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 DECEMBER 31, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER: 0-20724
WATSON WYATT & COMPANY
(Exact name of registrant as specified in its charter)
Delaware 53-0181291
(State or other (I.R.S. Employer
jurisdiction of Identification No.)
incorporation or
organization)
6707 Democracy Boulevard
Suite 800
Bethesda, Maryland 20817-1129
(Address of principal executive offices, including zip code)
TELEPHONE NUMBER (301) 581-4600
(Registrant's telephone number, including area code)
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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 [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of February 10, 1997.
Common Stock, $1.00 par value 16,095,869
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Class Number of Shares
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
WATSON WYATT & COMPANY
Consolidated Statements of Operations
(Thousands of U.S. Dollars, Except Per Share Amounts)
Quarters Ended December 31, Six Months Ended December 31,
-------------------------- -------------------------
1996 1995 1996 1995
----------- ----------- ---------- ----------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Fees $ 125,014 $ 119,829 $ 252,511 $ 235,791
Costs of providing services:
Salaries and employee benefits 56,966 58,697 119,630 120,845
Occupancy and communications 21,466 16,934 40,463 32,213
Professional and subcontracted services 22,773 20,879 43,166 33,522
Other 6,381 7,933 12,044 11,954
---------- ---------- ----------- ----------
107,586 104,443 215,303 198,534
General and administrative expenses 10,621 8,441 20,533 18,980
Depreciation and amortization 5,865 6,553 11,226 11,578
---------- ---------- ----------- ----------
124,072 119,437 247,062 229,092
Income from operations 942 392 5,449 6,699
Other:
Interest income 174 314 457 765
Interest expense (492) (371) (767) (490)
Loss from affiliates (1,812) (203) (3,117) (283)
---------- ---------- ---------- ----------
Income (loss) before income taxes and minority interest (1,188) 132 2,022 6,691
Provision for (benefit from) income taxes (412) 1,441 1,092 4,577
---------- ---------- ---------- ----------
Income (loss) before minority interest (776) (1,309) 930 2,114
Minority interest in net income of consolidated subsidiaries (43) (88) (84) (125)
---------- ---------- ----------- ----------
Net income (loss) $ (819) $ (1,397) $ 846 $ 1,989
========== ========== ========== ==========
Earnings (loss) per share $ (0.05) $ (0.08) $ 0.05 $ 0.11
========== ========== ========== ==========
</TABLE>
See accompanying notes
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<PAGE>
<TABLE>
<CAPTION>
WATSON WYATT & COMPANY
Consolidated Balance Sheets
(Thousands of U.S. Dollars)
December 31, June 30,
1996 1996
----------- ----------
ASSETS (unaudited)
<S> <C> <C>
Cash and cash equivalents $ 8,558 $ 21,694
Receivables from clients:
Billed, net of allowances 73,769 71,431
Unbilled 57,565 53,122
---------- ----------
131,334 124,553
Other current assets 9,659 6,936
---------- ----------
Total current assets 149,551 153,183
Investment in affiliates 44,578 41,195
Fixed assets 36,711 36,466
Deferred income taxes 41,983 41,983
Deferred software and development costs 36,968 35,746
Other intangible assets 3,450 3,820
Other assets 9,709 8,426
---------- ----------
$ 322,950 $ 320,819
========== ==========
LIABILITIES, REDEEMABLE COMMON STOCK, AND PERMANENT SHAREHOLDERS' EQUITY
Accounts payable and accrued liabilities $ 80,237 $ 88,203
Note payable 13,100 -
Income taxes payable 517 11,362
Deferred income taxes 34,830 34,830
---------- ----------
Total current liabilities 128,684 134,395
Accrued retirement benefits 85,570 81,141
Deferred rent and accrued lease losses 17,962 9,904
Other noncurrent liabilities 12,705 10,635
Minority interest in subsidiaries 449 362
Redeemable Common Stock - $1 par value:
25,000,000 shares authorized;
16,780,318 and 18,261,963 issued
and outstanding; at redemption value 82,895 90,214
Permanent shareholders' equity:
Adjustment for redemption value greater than amounts paid in by shareholders (34,413) (37,549)
Retained earnings 27,855 30,677
Cumulative translation gain 1,243 1,040
Commitments and contingencies
---------- ----------
$ 322,950 $ 320,819
========== ==========
</TABLE>
See accompanying notes
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<PAGE>
<TABLE>
<CAPTION>
WATSON WYATT & COMPANY
Consolidated Statements of Cash Flows
(Thousands of U.S. Dollars)
Six Months Ended December 31,
-----------------------------
1996 1995
------------ -----------
(Unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net income $ 846 $ 1,989
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for doubtful receivables from clients 5,712 2,473
Depreciation 6,563 7,025
Amortization of deferred software and development costs
and other intangible assets 4,663 4,553
Change in deferred income taxes - 3,392
Loss from affiliates 3,117 283
Minority interest in net income of consolidated subsidiaries 84 125
(Increase) decrease in assets:
Receivables from clients (12,493) 4,181
Income taxes receivable - (2,294)
Other current assets (2,723) (254)
Other assets (1,283) (1,889)
Increase (decrease) in liabilities:
Accounts payable and accrued liabilities (7,966) (2,007)
Income taxes payable (10,845) 302
Accrued retirement benefits 4,429 8,530
Deferred rent 8,058 (99)
Other noncurrent liabilities 2,070 1,677
Other 97 (417)
---------- ----------
Net cash provided by operating activities 329 27,570
---------- ----------
Cash flows from investing activities:
Purchases of fixed assets (6,858) (11,373)
Proceeds from sales of fixed assets 76 23
Acquisitions (197) (1,945)
Investment in software and development costs (5,272) (16,796)
Investment in affiliates (6,500) (1,309)
---------- ----------
Net cash used in investing activities (18,751) (31,400)
---------- ----------
Cash flows from financing activities:
Net borrowings 13,100 4,500
Issuances of Redeemable Common Stock 260 1,606
Repurchases of Redeemable Common Stock (8,111) (5,640)
---------- ----------
Net cash provided by financing activities 5,249 466
---------- ----------
Effect of exchange rate changes on cash 37 (178)
---------- ----------
Decrease in cash and cash equivalents (13,136) (3,542)
Cash and cash equivalents at beginning of period 21,694 11,860
---------- ----------
Cash and cash equivalents at end of period $ 8,558 $ 8,318
========== ==========
</TABLE>
See accompanying notes
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<PAGE>
<TABLE>
<CAPTION>
WATSON WYATT & COMPANY
Consolidated Statements of Changes in Permanent Shareholders' Equity
(Thousands of U.S. Dollars)
Adjustment For Redemption
Cumulative Value Greater Than Amounts
Retained Translation Paid In By
Earnings Gain Shareholders
---------- ---------- ----------
<S> <C> <C> <C>
Balance at June 30, 1996 $ 30,677 $ 1,040 $ (37,549)
Net income 846
Effect of repurchases of 1,539,319 shares of
common stock (various prices per share) (3,668) 3,668
Foreign currency translation adjustment 203
Adjustment of redemption value for change
in formula book value per share (532)
---------- ---------- ----------
Balance at December 31, 1996 (unaudited) $ 27,855 $ 1,243 $ (34,413)
========== ========== ==========
</TABLE>
See accompanying notes
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<PAGE>
WATSON WYATT & COMPANY
Notes To Consolidated Financial Statements
(Unaudited)
1. The accompanying unaudited consolidated financial statements of Watson
Wyatt & Company and its subsidiaries, (collectively, "Watson Wyatt" or "the
Company"), are presented in accordance with the rules and regulations of
the Securities and Exchange Commission and do not include all of the
disclosures normally required by generally accepted accounting principles.
In the opinion of management, these statements reflect all adjustments,
consisting only of normal recurring adjustments, which are necessary for a
fair presentation of the consolidated financial statements for the interim
periods. The consolidated financial statements should be read in
conjunction with the audited consolidated financial statements and notes
thereto contained in the Company's Form 10-K for the fiscal year ended June
30, 1996.
The results of operations for the six months ended December 31, 1996 are
not necessarily indicative of the results that can be expected for the
entire fiscal year ending June 30, 1997. Certain prior year amounts have
been reclassified to conform to the current year presentation.
2. On March 31, 1996, the Company and State Street Bank & Trust Company
("State Street"), formed Wellspring Resources, LLC ("Wellspring"), a
limited liability company established to provide benefits and human
resources administration outsourcing services. The Company contributed its
existing employee outsourced benefits operations and deferred software
development costs with a book value of $15.4 million to Wellspring in
exchange for a 50% interest, and State Street contributed cash of $15.4
million for the remaining 50% interest. The Company and State Street share
equally in the future funding requirements of Wellspring.
In connection with the formation of Wellspring, Watson Wyatt retained
certain client contracts for administrative and recordkeeping services and
entered into an agreement whereby Wellspring will provide the services
required by the contracts on behalf of the Company at cost. Expenses
charged to the Company by Wellspring for such services during the six
months ended December 31, 1996 were $18.4 million. The client contracts
provide for the receipt of fees during an implementation period in which
the Company develops custom software platforms and systems and performs the
related activities necessary to commence the administrative and
recordkeeping services. The Company defers all fees received and all
directly related software and systems development costs during the
implementation period, and recognizes such fees and costs in income over
the remaining lives of the contracts upon commencement of services under
such contracts. Deferred software and development costs related to these
contracts totaled $28.3 million and $25.3 million and the related deferred
contract revenues totaled $6.9 million and $7.3 million at December 31,
1996 and June 30, 1996, respectively.
3. Under the Company's stock purchase plan, the Company is obligated to
repurchase its Redeemable Common Stock, except in certain circumstances.
Accordingly, the redemption value of outstanding shares is classified as
Redeemable Common Stock and not as permanent shareholders' equity.
Redeemable Common Stock is equal to the number of shares outstanding
multiplied by the Formula Book Value per share, which was $4.94 per share
at December 31, 1996 and June 30, 1996. Permanent shareholders' equity
includes an adjustment for the difference between the redemption value of
the Redeemable Common Stock and the amounts actually paid by shareholders
for the shares.
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<PAGE>
4. During the six months ended December 31, 1996, the Company repurchased
1,539,319 shares of common stock, at various prices per share. The
computation of earnings per share is based upon the weighted average number
of shares of common stock outstanding during the period. The number of
shares used in the computation is 17,000,000 and 18,466,000 for the three
months ended December 31, 1996 and 1995, respectively, and 17,341,000 and
18,676,000 for the six months ended December 31, 1996 and 1995,
respectively.
5. During fiscal year 1997, the Company recorded sublease and lease
termination losses of $12.1 million, of which $10.3 million related to the
relocation of the corporate office space. The corporate office relocation
to a less expensive suburban location will result in a reduction of
occupancy expense in future years.
6. The Company guarantees certain leases for office premises and equipment for
its affiliate, Wellspring. Minimum rentals guaranteed under these leases
are $2.8 million in fiscal year 1997 and aggregate $73.3 million for the
remaining lease terms, which expire at various dates through 2007. These
leases are also jointly and severally guaranteed by State Street.
-7-
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
GENERAL
Watson Wyatt & Company, together with its affiliates and consolidated
subsidiaries, (collectively, "Watson Wyatt" or "the Company"), provides human
resource and employee benefits consulting and administrative/recordkeeping
services. The Company also provides a broad range of services in risk management
and general insurance and investment consulting, and derives fees from sales of
surveys. The Company works with organizations of all sizes, from the largest
multinationals to public employers and nonprofit institutions.
Watson Wyatt's fiscal year ends June 30. The financial statements contained in
this quarterly report reflect consolidated balance sheets as of the end of the
second quarter of fiscal year 1997 (December 31, 1996) and as of the end of the
prior fiscal year 1996 (June 30, 1996), and consolidated statements of
operations, of cash flows and of changes in permanent shareholders' equity for
the three and six months ended December 31, 1996 and 1995.
RESULTS OF OPERATIONS - THREE AND SIX MONTHS ENDED DECEMBER 31, 1996 COMPARED TO
THREE AND SIX MONTHS ENDED DECEMBER 31, 1995.
For the first six months of fiscal year 1997 the Company produced net income of
$.8 million, a decrease of $1.2 million from net income of $2.0 million for the
first six months of fiscal year 1996. Fiscal year 1997 results include a
sublease loss of $10.3 million associated with the relocation of the corporate
offices in Washington, D.C. to a less expensive suburban facility and $1.8
million in other lease losses.
Fees for the first six months of fiscal year 1997 total $252.5 million compared
to $235.8 million for the first six months of fiscal year 1996, an increase of
$16.7 million, or 7%. Revenue growth has occurred across almost all lines of
consulting business on relatively stable headcount and consistent utilization.
Principal areas of significant revenue growth include the Asia Pacific and Latin
America consulting regions and the outsourcing clients retained by the Company.
Salaries and employee benefit expenses for the second quarter of fiscal year
1997 were $57.0 million, a decrease of $1.7 million or 3%, from $58.7 million
the second quarter of fiscal year 1996. The Company incurred salaries and
employee benefit expenses of $119.6 million in the first six months of fiscal
year 1997, a decrease of $1.2 million, or 1%, from $120.8 million the prior
fiscal year. Amendments to the Company's postretirement benefit plan resulted in
a decrease in expense of $4.9 million, which was partially offset by normal
annual salary increases of approximately $3.6 million. In conjunction with the
changes to the postretirement benefit plan, the Company established a 401(k)
match of up to 3% of salaries beginning January 1, 1997. This future increase in
expense will be offset by the reduction in postretirement benefit costs.
Occupancy and communication expenses during the second quarter of fiscal year
1997 totaled $21.5 million, an increase of $4.6 million, or 27%, from the second
quarter of the prior year. For the first six months of fiscal year 1997,
occupancy and communication expenses totaled $40.5 million, an increase of $8.3
million, or 26%, from the first six months of the prior year. The increase is
due to the $12.1 million in sublease and lease termination losses primarily from
the relocation of the corporate office recorded in fiscal year 1997 partially
offset by $3.5 million in lower expenses as a result of the sale of the
Minneapolis outsourcing center and the formation of Wellspring in March 1996.
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<PAGE>
Professional and subcontracted services relating to consulting offices were
$22.8 million during the second quarter of fiscal year 1997, an increase of $1.9
million over the second quarter of the prior fiscal year. For the first six
months of fiscal year 1997, professional and subcontracted services were $43.2
million, an increase of $9.7 million, or 29%, over $33.5 million for the first
six months of fiscal year 1996. The increase is primarily due to costs charged
by Wellspring for servicing the retained outsourcing clients.
Other costs of providing services, which include travel and hotel, publications,
and general office expenses, were $6.4 million for the second quarter of fiscal
year 1997, a decrease of $1.5 million, or 20%, from the second quarter of fiscal
year 1996. For the first six months of fiscal year 1997, other costs of
providing services increased by $.1 million, or 1%, to $12.1 million from $12.0
million the prior year.
General and administrative ("G&A") expenses for the second quarter of fiscal
year 1997 were $10.6 million, a $2.2 million, or 26%, increase from the second
quarter of fiscal year 1996. For the first six months of fiscal year 1997, G&A
expenses were $20.5 million, a $1.5 million increase from $19.0 million the
prior fiscal year. The increase in expense is primarily attributable to an
increase in advertising and promotional expenses to further strengthen the
Company's market position.
Depreciation and amortization expense of $5.9 million for the second quarter of
fiscal year 1997 represents a decrease of $.7 million over the second quarter of
fiscal year 1996. For the first six months of fiscal year 1997, depreciation
decreased $.4 million, or 3%, over the prior year expense of $11.6 million. The
decrease is attributable to the disposal of assets in the prior year and lower
levels of capital expenditures.
Income before income taxes and minority interest of $2.0 million for the first
six months of fiscal year 1997 resulted in a tax provision of $1.1 million. This
compares to a provision of $4.6 million on $6.7 million of income before income
taxes and minority interest for the first six months of fiscal year 1996. The
effective tax rates for the six months ended December 31, 1996 and December 31,
1995 were 54% and 68%, respectively. The higher effective tax rate for the six
months ended December 31, 1995 is due to the nondeductibility of certain
expenses recorded during that period.
LIQUIDITY AND CAPITAL RESOURCES.
The Company relies primarily on funds from operations and short-term borrowings
as its source of liquidity. The Company believes that it has access to ample
financial resources to finance its growth as well as support ongoing operations.
The Company's cash and cash equivalents at December 31, 1996 totaled $8.6
million, compared to $21.7 million at June 30, 1996. The Company had borrowings
outstanding under its line of credit of $13.1 million at December 31, 1996 and
no borrowings at June 30, 1996.
CASH FROM OPERATIONS. For the first six months of fiscal year 1997, the Company
had cash inflows from operations of $.3 million, compared to $27.6 million for
the first six months of fiscal year 1996. The decrease in cash inflows in 1997
are due to an increase in bonus and income tax payments, an increase in advances
to Wellspring operations and a reduction in client collections.
The Company's ratio of current assets to current liabilities was 1.2 at December
31, 1996 and 1.1 at June 30, 1996.
CASH FROM INVESTING ACTIVITIES. Investing activity cash outflow was $18.8
million for the six months of fiscal year 1997, versus $31.4 million in 1996.
The decrease in investing cash outflows is due to lower levels of capital
expenditures, lower spending on deferred software and client software systems
costs,
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<PAGE>
including amounts which were contributed to Wellspring, and the acquisition of
HRE, Inc. in fiscal year 1996.
Anticipated commitments of funds for the remainder of fiscal year 1997 are
estimated at $20 million, which includes expected purchases of fixed assets, 50%
of the future capital requirements of Wellspring, and 50.1% of the capital
requirements of WWHE. Operating cash flows should, in combination with the line
of credit described below, provide for the Company's ongoing cash needs.
The Company has an $80 million revolving credit line which is scheduled to
mature on January 5, 2001. Fifty-five million dollars of the credit line is
available to the Company as revolving credit for operating needs, subject to
certain borrowing limitations. The remaining $25 million is available to secure
loans to associates from financial institutions for the purchase of Redeemable
Common Stock made available under the Company's stock purchase program. At
December 31, 1996, $37 million of the credit line is available to the Company as
revolving credit for operating needs.
CASH FROM FINANCING ACTIVITIES. Cash flow provided by financing activities was
$5.2 million for the first six months of fiscal year 1997, versus $.5 million in
the preceding year. The increase is due primarily to the increased level of
borrowing in fiscal year 1997.
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<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Watson Wyatt is from time to time a defendant in various lawsuits which arise in
the ordinary course of business. These disputes typically involve claims
relating to employment matters or the rendering of professional services. The
management of the Company does not believe that any such currently pending or
threatened litigation is likely to have a material adverse effect on the
business or financial condition of Watson Wyatt.
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
A. Board Election
At the fiftieth annual meeting of shareholders of the Company, held on November
6, 1996, the shareholders elected fifteen (15) nominees to the Board. Proxies
representing 15,745,960 shares were received (total shares outstanding as of the
Record Date were 17,140,508) and the results of the voting were as follows:
NOMINEES TO THE BOARD FOR WITHHOLD
Walter W. Bardenwerper 14,059,882 1,686,078
Charles A. Clemens 14,735,687 1,010,273
Paul R. Daoust 14,859,366 886,594
John J. Gabarro 14,688,491 1,057,469
John J. Haley 14,900,320 845,640
Gary T. Hallenbeck 14,583,634 1,162,326
Daniel B. Holmes 14,616,360 1,129,600
Ira T. Kay 14,905,760 840,200
Brian E. Kennedy 15,128,985 616,975
Robert D. Masding 15,184,547 561,413
R. Michael McCullough 15,191,732 554,228
A. W. Smith, Jr. 14,198,275 1,547,685
John A. Steinbrunner 14,988,369 757,591
A. Grahame Stott 15,214,021 531,939
Angela H. Watson 14,090,227 1,655,733
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<PAGE>
B. Amendment to Bylaw Section 9
The shareholders also voted to approve an amendment to the Company's Bylaws.
This amendment authorized modifying the formula for determining the price of the
Company's Common Stock to eliminate temporary variations in stock value arising
from certain non-operating transactions. Specifically, the amendment (i) spread
the economic impact of certain real estate sublease losses over the remaining
life the sublease (ii) eliminated annual changes in the Currency Translation
Adjustment ("CTA") occurring after June 30, 1996 and (iii) eliminated the
adjustment related to the value of the Company's survey business for future
years. The modified formula, which is called "Formula Book Value," will be used
to determine share price for periods subsequent to June 30, 1996.
The amendment was approved by the affirmative vote of more than 80% of the
Company's outstanding stock (as required per Section 9 of the Bylaws) as
follows:
For: 14,894,976
Against: 850,984
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORMS 8-K
a. Exhibits
3.1 Restated Certificate of Incorporation of Watson Wyatt & Company(1)
3.2 Restated Bylaws, dated November 22, 1996(4)
4.1 Form of Certificate Representing Common Stock(2)
10.1 Third Amended and Restated Credit and Security Agreement, dated
January 5, 1996(3)
10.2 First Amendment to The Third Amended and Restated Credit and Security
Agreement, dated June 14, 1996(1)
b. Reports on Form 8-K
None
- ------------------
(1) Incorporated by reference from the Registrant's Annual Report on Form 10-K
for the year ended June 30, 1996 (File No. 0-20724), filed on September 27,
1996.
(2) Incorporated by reference from Registrant's Initial Registration Statement
on Form 10 (File No. 0-20724), filed on October 13, 1992.
(3) Incorporated by reference from Registrant's Quarterly Report on Form 10-Q
for the quarter ended March 31, 1996 (File No. 0-20724), filed on May 13,
1996.
(4) Filed herewith
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<PAGE>
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.
Dated: February 10, 1997
Watson Wyatt & Company
(Registrant)
/S/ A. W. Smith, Jr. /S/ Barbara L. Landes
- -------------------------------- -------------------------------
Name: A. W. Smith, Jr. Name: Barbara L. Landes
Title: President and Chief Title: Vice President and Chief
Executive Officer Financial Officer
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<PAGE>
Bylaws
`[GRAPHIC OMITTED]
RESTATED BYLAWS
(Includes Changes Approved through November 22, 1996)
* * * * * *
OFFICES
Section 1.1 Resident Agent. The President or Secretary of the Corporation may,
from time to time, select a resident agent for the Corporation in the State of
Delaware.
Section 1.2 Offices. The Corporation may have offices in such locations as the
Board of Directors may from time to time determine or the business of the
Corporation may require.
SHAREHOLDERS' MEETINGS
Section 2.1 Place of Meetings. All meetings of the shareholders other than the
annual meeting may be held at such place and time as shall be stated in the
notice of the meeting, or in a duly executed waiver of notice thereof.
Section 2.2 Annual Meetings. An annual meeting of shareholders shall be held in
each year on a business day in November to be determined by the Board of
Directors and set forth in the Notice of such meeting, in the place designated
in the notice of such meeting at such time of day as will be set forth in such
notice. At such annual meeting, the shareholders shall elect a Board of
Directors and transact such other business as may properly be brought before the
meeting.
Section 2.3 Shareholders' List. At least ten days before every election of
directors, a complete list of the shareholders entitled to vote at said election
arranged in alphabetical order, with the residence of each and the number of
voting shares held by each, shall be prepared by the Secretary. Such list shall
be open for said ten days to the examination of any shareholder during normal
business hours at the place where the election is to be held or at such other
place in the city where the election is to be held as is designated by the
Secretary and is specified in the notice for such meeting, and shall be produced
and kept at the time and place of election during the whole time thereof, and
subject to the inspection of any shareholder who may be present.
Section 2.4 Special Meetings. Special meetings of the shareholders, for any
purpose or purposes, unless otherwise prescribed by statute or by the Restated
Certificate of Incorporation, shall be called by the President or Secretary at
the request in writing of a majority of the Board of Directors, or at the
request in writing of shareholders owning ten percent (10%) of the entire
capital stock of the Corporation issued and outstanding and entitled to vote.
Such request shall state the purpose or purposes of the proposed meeting.
Section 2.5 Notice of Meetings. Written notice of a meeting of the shareholders,
stating the time and place and object thereof, shall be served upon or mailed to
each shareholder entitled to vote thereat at such address as appears on the
books of the Corporation at least 10 but not more than 60 days before the
meeting.
<PAGE>
Section 2.6 Quorum. The holders of a majority of the stock issued and
outstanding and entitled to vote thereat, present in person or represented by
proxy, shall be requisite and shall constitute a quorum at all meetings of the
shareholders for the transaction of business except as otherwise provided by
statute, by the Restated Certificate of Incorporation or by these Bylaws. In the
event that a separate vote by class of stock may be required at such meeting,
holders of the majority of each such class of stock issued and outstanding
entitled to vote thereat, present in person or represented by proxy, shall be
requisite and shall constitute a quorum. If, however, such quorum shall not be
present or represented at any meeting of the shareholders, the shareholders
entitled to vote thereat, present in person or represented by proxy, shall have
power to adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present or represented. Any
such adjourned meeting as to which there may be a new record date, or which has
been adjourned for more than 30 days, shall be subject to the notice
requirements as set forth in section 2.5 hereof. At such adjourned meeting at
which a quorum shall be present or represented any business may be transacted
which might have been transacted at the meeting as originally notified.
Section 2.7 Voting. When a quorum is present at any meeting, the vote of the
holders of stock representing a majority of the voting power present in person
or represented by proxy shall decide any question brought before such meeting,
unless the question is one upon which by express provision of the statutes or of
the Restated Certificate of Incorporation or of these Bylaws, a different vote
is required in which case such express provision shall govern and control the
decision of such question. Each shareholder shall have the number of votes for
each share of stock having voting power, registered in his name on the books of
the Corporation, as is provided for in the Restated Certificate of
Incorporation. Except where the transfer books of the Corporation shall have
been closed or a date shall have been fixed as a record date for the
determination of its shareholders entitled to vote, no share of stock shall be
voted on at any election of directors which shall have been transferred on the
books of the Corporation twenty days next preceding such election of directors.
Section 2.8 Proxies. At any meeting of the shareholders every shareholder having
the right to vote shall be entitled to vote in person, or by proxy appointed by
an instrument in writing subscribed by such shareholder and bearing a date not
more than three years prior to said meeting, unless said instrument provides for
a longer period.
Section 2.9. Majority Consent. Whenever the vote of shareholders at a meeting
thereof is required or permitted to be taken in connection with any corporate
action by any provisions of the statutes or of the Restated Certificate of
Incorporation or these Bylaws, the meeting and vote of shareholders may be
dispensed with, if the holders of the outstanding stock having not less than the
minimum number that would be necessary to authorize or take such action at a
meeting if such meeting were held, shall consent in writing to such corporate
action being taken.
DIRECTORS
Section 3.1 Number of Directors. The number of directors which shall constitute
the whole Board shall not be less than 7 nor more than 25, as determined by the
Board of Directors. The directors shall be elected at the Annual Meeting of
Shareholders, except as provided in Section 3.3, and each director elected shall
hold office until his successor is elected and qualified. Directors need not be
shareholders.
Section 3.2 Place of Meeting. Meetings of the Board of Directors shall be held
at such place either within or without the State of Delaware or by telephone
conference call as shall be specified in the respective notices or waivers of
notice of such meetings.
Section 3.3 Vacancies. If the office of any director or directors becomes vacant
by reason of death, resignation, retirement, disqualification, removal from
office, or otherwise, or a new directorship is created, a majority of the
remaining directors, though less than a quorum, may choose a successor or
successors, or a director to fill the newly created directorship, who shall hold
office for the unexpired term or until the next election of directors.
<PAGE>
Section 3.4 General Powers. The property and business of the Corporation shall
be managed by its Board of Directors which may exercise all such powers of the
Corporation and do all such lawful acts and things as are not by statute or by
the Restated Certificate of Incorporation or by these Bylaws directed or
required to be exercised or done by the shareholders. The Board of Directors may
exercise the hereinbefore described powers, and any duly constituted and
authorized committee of the Board of Directors may exercise such powers as have
been delegated to it by the Board of Directors, without a meeting by the
unanimous execution of an instrument in writing.
Section 3.5 Committees of Directors. The Board of Directors may, by resolution
or resolutions passed by a majority of the Board, designate one or more
committees, each committee to consist of two or more of the directors of the
Corporation which, only to the extent provided in said resolution or
resolutions, shall have and may exercise the powers of the Board of Directors in
the management of the business and affairs of the Corporation and may have power
to authorize the seal of the Corporation to be affixed to all papers which may
require it. 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.
Whenever a committee is authorized by the Board of Directors to exercise any
power of the Board of Directors, two-thirds of the members of such committee
shall constitute a quorum and the act of the total number of directors who shall
constitute a quorum shall be the act of the committee. Such Committees, when
required by the Board, shall keep regular minutes of their proceedings and
report the same to the Board.
Section 3.6 Compensation of Directors. Directors who are employees shall not
receive any stated salary for their services as directors, but, pursuant to
normal corporate expense reimbursement policies, shall receive reimbursement for
expenses of attendance at such meetings; provided that nothing herein contained
may be construed to preclude any Director from serving the Corporation in any
other capacity and receiving compensation therefore.
Section 3.7 Annual Meeting. The annual meeting of the Board of Directors shall
be held immediately following and at the same place as the annual meeting of the
shareholders, or at such time and place as may be specified or fixed by the
Board of Directors, the Chairman of the Board, the President or the Secretary in
the notice of such meeting or waiver thereof.
Section 3.8 Notices of Board of Directors Meetings; Special Meetings. Special
meetings of the Board of Directors may be held at any time on the call of the
Chairman of the Board or the President or at the request in writing of any six
(6) directors. Notice of any regular or special meeting, unless waived, shall be
given by mail or facsimile, telex, or courier to each director at his address as
the same appears on the records of the Corporation not less than one (1) day
prior to the day on which such meeting is to be held if such notice is by
facsimile, telex, or courier, and not less than five (5) business days prior to
the day on which the meeting is to be held if such notice is by mail. If the
Secretary shall fail or refuse to give such notice, then the notice may be given
by the officer or any one of the directors making the call. Any such meeting may
be held at such place as the Board may fix from time to time or as may be
specified or fixed in such notice or waiver thereof. Notice may be waived in
writing by any director, either before or after the meeting. Any meeting of the
Board of Directors shall be a legal meeting without any notice thereof having
been given, if all the directors shall be present thereat, and no notice of a
meeting shall be required to be given to any director who shall attend such
meeting.
Section 3.9 Quorum and Manner of Acting. Except as otherwise provided in these
Bylaws, a majority of the total number of directors shall constitute a quorum at
any regular or special meeting of the Board of Directors. Except as otherwise
provided by law or by the Restated Certificate of Incorporation as amended, or
by these Bylaws, the act of a majority of the directors present at any meeting
at which a quorum is present shall be the act of the Board of Directors. In the
absence of a quorum, a majority of the directors present may adjourn the meeting
from time to time until a quorum be had. Notice of any adjourned meeting need
not be given.
Section 3.10 Notices. Whenever under the provisions of the statutes or of the
Restated Certificate of Incorporation or of these Bylaws, notice is required to
be given to any director or shareholder, it shall not be construed to mean
personal notice, but such notice may be given in writing, by mail, by depositing
the same in a post office or letter box, in a post-paid sealed wrapper, or by
facsimile, telex or courier, addressed to such director or shareholder at such
address as appears on the books of the Corporation, or in default of other
address, to such director or shareholder at the General Post Office in the City
of Wilmington, Delaware, and such notice shall be deemed to be given at the time
when the same shall be thus mailed or sent by facsimile, telex or courier.
Section 3.11 Waivers of Notice. Whenever any notice is required to be given
under the provisions of the statutes or of the Restated Certificate of
Incorporation, or of these Bylaws, a waiver thereof in writing signed by the
person or persons entitled to said notice, whether before or after the time
stated therein, or such person's or persons' attendance at such meeting, unless
such attendance is 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, shall be deemed equivalent thereto.
OFFICERS
Section 4.1 Executive Officers. The executive officers of the Corporation may
include a Chairman of the Board, and shall include a President, an Executive
Vice President, such Vice Presidents as the Board of Directors may designate to
be executive officers, a Vice President and Chief Financial Officer, a
Secretary, and a General Counsel. One person may hold any two of said offices
except the offices of President and Secretary or Chairman of the Board and
Secretary.
Section 4.2 Election, Term of Office and Eligibility. The executive officers of
the Corporation shall be elected annually by the Board of Directors at its
annual meeting or at a special meeting held in lieu thereof. Each officer,
except such officers as may be appointed in accordance with the provisions of
Section 4.3 shall hold office until his successor shall have been duly chosen
and qualified or until his death, resignation, retirement or removal. The
Chairman of the Board, the President, and the Executive Vice President shall be
and remain members of the Board of Directors. None of the other officers need be
members of the Board.
Section 4.3 Subordinate Officers, etc. The Board of Directors, or the President
of the Corporation if he is so empowered by resolution adopted by the Board of
Directors, may appoint such Assistant Vice Presidents, Assistant Secretaries,
Assistant Treasurers, and other Officers, such committees and such agents as the
Board, or the President may determine, to hold office for such period, and with
such authority and to perform such duties as the Board, or President may from
time to time determine. Unless otherwise specifically directed by the Board of
Directors, or the President, any committee appointed pursuant to this Section
4.3 may conduct its proceedings in such manner as its members shall determine,
including the taking of actions without a meeting by majority vote of its
members.
Section 4.4 Removal. Any Executive Officer may be removed at any time, either
with or without cause, but only by the affirmative vote of the majority of the
total number of directors serving at that time. Any subordinate officer
appointed pursuant to Section 4.3 may be removed at any time, either with or
without cause, by a majority vote of the directors present at any meeting of the
Board, or by the President if empowered so to do by resolution of the Board.
Section 4.5 Resignations. Any officer may resign at any time by giving written
notice to the Board of Directors or to the President or the Secretary of the
Corporation. Any such resignation shall take effect at the time specified
therein; and, unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.
Section 4.6 Vacancies. A vacancy in the office of President or Secretary for any
reason must be filled. A vacancy in any other office may be filled. Any vacancy
which is filled shall be filled for the unexpired portion of the term in the
same manner in which an officer to fill said office may be chosen pursuant to
Section 4.2 and/or Section 4.3.
Section 4.7 The Chairman of the Board. If a Chairman of the Board has been
elected, The Chairman of the Board shall preside at all meetings of the Board of
Directors and of the shareholders; he may sign with the Secretary or any other
proper officer of the Corporation thereunto authorized by the Board of
Directors, certificates for shares of the Corporation, any deeds, mortgages,
bonds, contracts, or other instruments which the Board of Directors has
authorized to be executed, except in cases where the signing and execution
thereof shall be expressly delegated by the Board of Directors or by these
Bylaws to some other officer or agent of the Corporation, or shall be required
by law to be otherwise signed or executed; and in general shall perform all
duties incident to the office of Chairman of the Board and such other duties as
from time to time may be assigned to him by the Board of Directors.
<PAGE>
Section 4.8 Office of the President.
(a)
The President. The President shall be the principal executive officer of the
Corporation and shall carry out the duties of the Chairman of the Board when no
incumbent holds such office or the Chairman of the Board is absent or when
otherwise requested by the Chairman of the Board to be responsible for any
duties of the Chairman of the Board; he shall have executive authority to see
that all orders, resolutions or other duly authorized decisions of the Board of
Directors or any duly authorized committee are carried into effect and, subject
to the control vested in the Board of Directors by statute, by the Restated
Certificate of Incorporation, as amended, or by these Bylaws, shall administer
and be responsible for the management of business and affairs of the
Corporation; he may sign with the Secretary or any other proper officer of the
Corporation thereunto authorized by the Board of Directors, certificates for
shares of the Corporation, any deeds, mortgages, bonds, contracts or other
instruments which the Board of Directors has authorized to be executed, except
in cases where signing and execution thereof shall be expressly delegated by the
Board of Directors or by these Bylaws to some other officer or agent of the
Corporation, or shall be required by law to be otherwise signed or executed; and
in general shall perform all duties incident to the office of President and such
other duties as from time to time may be assigned to him by the Board of
Directors or such duties as shall be in the normal and ordinary course of
business.
(b)
The Executive Vice President. In the event of the absence or disability
of the President, the Executive Vice President shall perform the duties
of the President. The Executive Vice President shall have principal
responsibility for the Corporation's consulting offices and practices
and shall also perform such other duties as from time to time may be
assigned to him by the Board of Directors or the President.
(c) The Chairman of the Board, if any, the President and the Executive Vice
President shall together constitute the Office of the President.
Section 4.9 The Vice Presidents. In the event of the absence or disability of
the President and the Executive Vice President, the Vice President who is also a
member of the Board of Directors and who has the longest continuous tenure on
the Board of Directors, or, if two or more such Vice Presidents and Directors
have equal tenure, such Vice President and Director who has the longest service
with the Corporation shall perform the duties of the President. The Vice
Presidents shall also perform such other duties as from time to time may be
assigned to them by the Board of Directors or the President.
Section 4.10 The Secretary. The Secretary shall:
(a) Keep the minutes of the meetings of the shareholders and of the
Board of Directors in books provided for that purpose;
(b) See that all notices are duly given in accordance with the
provisions of these Bylaws or as required by law;
(c) Be custodian of the records and of the seal of the Corporation and see
that the seal or a facsimile or equivalent thereof is affixed to or
impressed or reproduced on all stock certificates prior to their issue,
and on all documents the execution of which on behalf of the
Corporation under its seal is duly authorized;
(d) Have charge of the stock record books of the Corporation and keep or
cause to be kept the stock record and transfer books in such manner as
to show at any time the number of shares of each class of the capital
stock of the Corporation issued and outstanding, the names and
addresses of the holders of record thereof, and the number of shares
held by each; and exhibit or cause to be exhibited at all reasonable
times to any officer or director, upon application, the original or
duplicate stock ledger;
(e) See that the books, reports, statements, certificates, and all
other documents and records, required by law, are properly made, kept
and filed;
(f) In general, perform all duties incident to the office of Secretary, and
such other duties as are provided by these Bylaws and as from time to
time are assigned to him by the Board of Directors or by the Chairman
of the Board or by the President.
Section 4.11 The Treasurer. The Treasurer shall perform all the duties incident
to the office of Treasurer, and such other duties as from time to time may be
assigned to him by the Board of Directors, or by the Chairman of the Board, the
President or the Vice President and Chief Financial Officer.
Section 4.12 The Vice President and Chief Financial Officer. The Vice President
and Chief Financial Officer shall, under the direction of the Board of
Directors, the Chairman of the Board, the President, or the Executive Vice
President, be responsible for the management, coordination and administration of
the financial and accounting affairs of the Corporation and its subsidiaries
including providing advice to the Board of Directors, the President and the
executive officers of the Corporation on all financial matters. The Vice
President and Chief Financial Officer shall:
(a) Render to the Board of Directors at any meeting thereof, or from time
to time whenever the Board of Directors or the Chairman of the Board or
the President may require, an account of the financial condition of the
Corporation, and render or cause to be rendered a full financial report
at the annual meeting of the shareholders, if called upon so to do;
(b) have charge and custody of all funds and securities of the Corpora-
tion, except petty cash accounts;
(c) receive and give receipts for monies due and payable to the Corporation
from any source and deposit all the Corporation's monies in the name of
the Corporation in the institutions that are selected in accordance
with the provisions of these Bylaws; and
(d) in general, perform all of the duties as may be assigned to him
by the Board of Directors, the Chairman of the Board, the President
or the Executive Vice President.
Section 4.13 The Controller. The Controller shall maintain the fiscal records of
the Corporation. He shall advise the President, the Executive Vice President,
Treasurer, Vice President and Chief Financial Officer, the Board of Directors
and any audit committee thereof with respect to what, in his opinion, are proper
accounting procedures for the Corporation in light of its operating methods. He
shall be responsible for the maintenance of all financial records in accord with
the accounting procedures approved by the Board of Directors. The Controller
shall also serve as the principal assistant to the Vice President and Chief
Financial Officer in carrying out the latter's duties.
Section 4.14 The General Counsel. The General Counsel shall be the chief legal
officer of the Corporation and shall, under the direction of the Board of
Directors, the Chairman of the Board, or the President, be responsible for the
management, coordination and administration of the legal affairs of the
Corporation and its subsidiaries, including the prosecution and defense of legal
actions by and against the Corporation, shall provide advice to the Board of
Directors, the President, and the executive officers of the Corporation in all
legal matters and, in general, shall perform such duties as may be assigned to
him by the Board of Directors, the Chairman of the Board or the President.
Section 4.15 The Tax Director. The Tax Director shall report to the Vice
President and Chief Financial Officer or the Controller and shall be responsible
for the compliance with all tax laws by the Company and its affiliates, the
filing of tax returns, the management of tax audits and disputes and the
coordination of tax planning and compliance with the management of the Company
and its affiliates.
Section 4.16 Salaries. The salaries of the officers shall be fixed from time to
time by the Board of Directors, or by such officer or officers as are designated
to do so by the Board of Directors or, in the absence of any such designation,
by the President. No officer shall be prevented from receiving such salary by
reason of the fact that he is also a director of the Corporation.
Section 4.17 Bonds. If the Board of Directors shall so require, the Treasurer,
the Vice President and Chief Financial Officer, and any Assistant Treasurer
and/or any other officer or agent of the Corporation shall give bond to the
Corporation in such amount and with such surety as the Board of Directors may
deem sufficient, conditioned upon the faithful performance of their respective
duties and offices.
Section 4.18 Delegation of Duties. In case of the absence of any officer of the
Corporation or for any other reason which may seem sufficient to the Board, the
Board of Directors may, for the time being, delegate his powers and duties, or
any of them, to any other officer or to any director, provided that such
delegation shall be by a majority vote of the total number of directors.
SHARES OF STOCK
Section 5.1 Regulations. Subject to the terms of any contract of the Corporation
and Delaware Law, the Board of Directors may make such rules and regulations as
it may deem expedient concerning the issue, transfer, and registration of
certificates and uncertificated shares evidencing the ownership of shares of the
stock of the Corporation, including the issue of new certificates or the
registration on the Corporation's books of uncertificated shares, for lost or
destroyed certificates, and including the appointment of transfer agents and
registrars.
Section 5.2 Stock Certificates. Certificates for shares of stock of the
Corporation, if any, shall be respectively numbered serially for each class of
shares, or series thereof, as they are issued, shall be impressed with the
corporate seal or a facsimile thereof, and shall be signed by two officers of
the Corporation, one of whom shall be the Chairman of the Board, the President
or a Vice President, and the other of whom shall be the Secretary or Treasurer,
or an Assistant Secretary or an Assistant Treasurer, provided that such
signatures may be facsimiles. Each certificate shall exhibit the name of the
Corporation, the class (or series of any class) and the number of shares
represented thereby, the name of the holder, the par value of the shares
represented thereby or that such shares are without par value. Each certificate
shall be otherwise in such form as may be prescribed by the Board of Directors.
Subject to the requirements of Delaware law, the Corporation may (i) cancel
surrendered stock certificates as the respective shares are sold; and (ii) issue
uncertificated shares to evidence shares purchased.
Section 5.3 Transfer of Shares. The Corporation may from time to time enter into
an agreement or agreements with one or more of its shareholders restricting the
transferability of its stock in accord with the general corporate purpose to
have its stock owned by persons actively engaged in the corporate business.
Subject to the terms of any such agreement, shares of the capital stock of the
Corporation shall be transferable on the books of the Corporation by the holder
thereof in person or by his duly authorized attorney, upon (i) the surrender and
cancellation of a certificate or certificates for a like number of shares;
and/or (ii) upon registration on the books of the Corporation of the transfer of
the respective uncertificated shares and the transmittal to the new registered
owner, any former registered owner, and any applicable pledgee of a written
statement advising of such transfer (as required pursuant to Delaware law). As
against the Corporation a transfer of shares can be made only on the books of
the Corporation and in the manner hereinabove provided, and the Corporation
shall be entitled to treat the registered holder of any share as the owner
thereof and shall not be bound to recognize any equitable or other claim to or
interest in such share on the part of any other person, whether or not it shall
have express or other notice thereof, save as expressly provided by the statutes
of the State of Delaware. In the event shares of the Corporation are held by an
Employee Trust under Section 9.3, no transfer on the books of the Corporation
shall be made if said transfer would cause a violation of any provision of Title
I of the Employee Retirement Income Security Act of 1974 or the prohibited
transaction rules of Section 4975 of the Internal Revenue Code of 1986, as
amended.
Section 5.4 Date for Determination of Shareholders of Record. The Board of
Directors of the Corporation shall have the power to fix in advance a date as a
record date for the determination of shareholders entitled to notice of, and to
vote at, any meeting of shareholders of the Corporation, and any adjournment
thereof; or entitled to receive the payment of any dividend; or the date for the
allotment of rights, or the date when any rights in respect of any change or
conversion or exchange of capital stock of the Corporation shall go into effect
or in connection with obtaining the consent of shareholders for any purpose.
Notwithstanding the transfer of any stock on the books of the Corporation after
any such record date fixed as aforesaid, only such shareholders as shall be
shareholders as of such record date shall be entitled notice of, and to vote at,
such meeting and any adjournment thereof, to receive payment of such dividend,
or to receive such allotment of rights, or to exercise such rights, or to give
such consent, as the case may be. If the Board of Directors shall fail to
determine the record date for determining shareholders entitled to notice of,
and to vote at, any meeting of shareholders of the Corporation, such date shall
be established as provided by law.
Section 5.5 Lost Certificate. Any shareholder claiming that a certificate
representing shares of stock has been lost or destroyed may make an affidavit or
affirmation of that fact and if the Board of Directors so requires, advertise
the same in a manner designated by the Board, and give the Corporation a bond of
indemnity in form and with security for an amount satisfactory to the Board, but
not exceeding double the value of the shares represented by said certificate;
whereupon a new certificate may be issued of the same tenor (or a registration
may be made on the books of the Corporation evidencing the ownership of
uncertificated shares) representing the same number, class and/or series of
shares as were represented by the certificate alleged to have been lost or
destroyed.
BOOKS AND RECORDS
Section 6.1 Location. The books, accounts and records of the Corporation may be
kept at such place or places within or without the State of Delaware as the
Board of Directors may from time to time determine.
Section 6.2 Inspection. The books, accounts and records of the Corporation shall
be open to inspection by any member of the Board of Directors at all times; and
shall be open to inspection by the shareholders at such times, for proper
purposes, subject to regulations as the Board of Directors may prescribe, except
as otherwise provided by statute.
Section 6.3 Corporate Seal. The corporate seal shall contain two concentric
circles between which shall be the name of the Corporation and the word
"Delaware" and in the center shall be inscribed the words "Corporate Seal" and
the year in which the original Certificate of Incorporation was issued.
DIVIDENDS AND RESERVES
Section 7.1 Dividends. Subject to the provisions of the Restated Certificate of
Incorporation, as amended, and other lawful commitments of the Corporation,
dividends upon the shares of any class of stock, or series thereof, of the
Corporation may be declared by the Board of Directors out of the net assets of
the Corporation in excess of its capital or out of its net profits at any
regular or special meeting of the Board of Directors.
Section 7.2 Reserves. Before declaring any dividend or making any distribution
of net assets in excess of capital or any distribution of net profits, the Board
of Directors, from time to time in their absolute discretion, may set apart, out
of any funds of the Corporation available for dividends, a reserve or reserves
for working capital, or to meet contingencies, or for repairs or maintenance, or
for any other lawful purpose, and also, from time to time, may abolish or
decrease any such reserve or reserves.
MISCELLANEOUS PROVISION
Section 8.1 Fiscal Year. The fiscal year of the Corporation shall end on June
30th of each year.
<PAGE>
Section 8.2 Depositories. The Board of Directors, the Chairman of the Board, the
President, the Treasurer, the Vice President and Chief Financial Officer and the
Controller, and each of them, may designate the banks, trust companies, or other
depositories in which shall be deposited from time to time, the money or
securities of the Corporation. In the case of a designation by the
aforementioned officers, any such designation shall require the approval of two
of such officers, one of whom shall be the Treasurer or the Vice President and
Chief Financial Officer.
Section 8.3 Checks, Drafts, Notes, etc. All checks, drafts or other orders for
the payment of money and all notes or other evidences of indebtedness issued in
the name of the Corporation shall be signed by such officer or officers or agent
or agents as shall from time to time be designated by the Board of Directors or
as shall be designated by any two of the Chairman of the Board, the President,
the Treasurer or the Vice President and Chief Financial Officer in writing.
Section 8.4 Contracts, etc., How Executed. Except as in the Bylaws otherwise
provide, the Board of Directors may authorize any officer, agent or agents, to
enter into any contract or execute and deliver any instrument in the name and on
behalf of the Corporation, and such authority may be general or confined to
specific instances.
Section 8.5 Stock in Other Corporations. Any shares of stock in any other
corporation which may from time to time be held by the Corporation may be
represented and voted at any meeting of shareholders of such other corporation
by the President, the Treasurer or the Secretary of the Corporation or by any
other person or persons thereunto authorized by Board of Directors or designated
by the President, or by any proxy designated by written instrument of
appointment executed in the name of this Corporation by its President or by such
officers as may be designated by him and attested by the Secretary or Assistant
Secretary. Shares of stock held by the Corporation for investment purposes only
may be voted by the Vice President and Chief Financial Officer or by any proxy
designated by written instrument of appointment executed in the name of the
Corporation by the Vice President and Chief Financial Officer and attested by
the Secretary or an Assistant Secretary. Shares of stock belonging to the
Corporation need not stand in the name of the Corporation, but may be held for
the benefit of the Corporation in the individual name of the Treasurer or of any
other nominee designated for the purpose by the Board of Directors. Certificates
for shares so held for the benefit of the Corporation shall be endorsed in blank
or have proper stock powers attached so that said certificates are at all times
in due form for transfer, and shall be held for safekeeping in such manner as
shall be determined from time to time by the Board of Directors.
Section 8.6 Indemnification.
(a)
Each person who was or is 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 a person of whom he is the legal representative, is or was a
director or officer of the Corporation or is or was a director or officer
serving at the request of the Corporation as a director, officer, employee or
agent of another Corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit plans, shall be
indemnified and held harmless by the Corporation to the fullest extent
authorized by the laws of Delaware as the same now or may hereafter exist (but,
in the case of any change, only to the extent that such change authorizes the
Corporation to provide broader indemnification rights than said law permitted
the Corporation to provide prior to such change) against all costs, charges,
expenses, liabilities and losses (including attorneys' fees, judgments, fines,
ERISA excise taxes or penalties and amounts paid or to be paid in settlement)
reasonably incurred or suffered by such person in connection therewith and such
indemnification shall continue as to a person who has ceased to be a director or
officer and shall inure to the benefit of his heirs, executors and
administrators. The right to indemnification conferred in this Section shall be
a contract right and shall include the right to be paid by the Corporation the
expenses incurred in defending any such proceeding in advance of its final
disposition upon receipt by the Corporation of an undertaking, by or on behalf
of such director or officer, to repay all amounts so advanced if it shall
ultimately be determined that the director or officer is not entitled to be
indemnified under this Section or otherwise. 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.
<PAGE>
(b)
If a claim under subsection (a) of this Section is not paid in full by the
Corporation within thirty days after a written claim has been received by the
Corporation the claimant may at any time thereafter bring suit against the
Corporation to recover the unpaid amount of the claim and, if successful in
whole or in part, the claimant shall also be entitled to be paid the expense of
prosecuting such claim. It shall be a defense to any 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
has been tendered to the Corporation) that the claimant has failed to meet a
standard of conduct which makes it permissible to indemnify the claimant for the
amount claimed, but the burden of proving such defense shall be on the
Corporation. Neither the failure of the Corporation (including its Board of
Directors, independent legal counsel, or its shareholders) to have made a
determination prior to the commencement of such action that indemnification of
the claimant is permissible in the circumstances because he has met such
standard of conduct, nor an actual determination by the Corporation (including
its Board of Directors, independent legal counsel, or its shareholders) that the
claimant has not met such standard of conduct, nor the termination of any
proceeding by judgment, order, settlement, conviction or upon a plea of nolo
contendere or its equivalent, shall be a defense to the action or create a
presumption that the claimant has failed to meet the required standard of
conduct.
(c) The right to indemnification and the payment of expenses incurred in
defending a proceeding in advance of its final disposition conferred in
this Section shall not be exclusive of any other right which any person
may have or hereafter acquire under any statute, provision of the
Restated Certificate of Incorporation, Bylaw, agreement, vote of
shareholders or disinterested directors or otherwise.
(d) The Corporation may maintain insurance, at its expense, to protect
itself and any director, officer, employee or agent of the Corporation
or another corporation, partnership, joint venture, trust or other
enterprise against any expense, liability or loss, whether or not the
Corporation would have the power to indemnify such person against such
expense, liability or loss under Delaware law.
(e) To the extent that any director, officer, employee or agent of the
Corporation is by reason of such position, or a position with another
entity at the request of the Corporation, a witness in any proceeding,
he shall be indemnified against all costs and expenses actually and
reasonably incurred by him or on his behalf in connection therewith.
(f) Notwithstanding any amendment of this section which may have been
approved by the shareholders, this section may be added to, altered,
amended or repealed pursuant to Section 8.7 of these Bylaws.
(g) Any amendment, repeal or modification of any provision of this Section
by the shareholders or the directors of the Corporation shall not
adversely affect any right or protection of a director or officer of
the Corporation existing at the time of such amendment, repeal or
modification.
Section 8.7 Amendment of Bylaws. Except for Section 9 of these Bylaws, (which by
its terms may be altered, amended or repealed only upon the affirmative vote of
holders of stock possessing at least 80% of the outstanding voting rights), in
accordance with authority expressly contained in the Restated Certificate of
Incorporation, these Bylaws may be added to, altered, amended, or repealed, and
new or other Bylaws may be made and adopted by vote of a majority of the Board
of Directors at any regular or special meeting of the Board, and without prior
notice of intent so to do.
Section 8.8 Notices. All Notices and communications given hereunder shall be
given (a) to the Corporation at: 601 13th Street, Suite 900, Washington, D.C.
20005; Attn: Secretary, or such other address as may be provided to each
shareholder in writing by the Secretary and (b) to shareholders at their
respective addresses appearing on the stock records of the Corporation.
<PAGE>
RESTRICTION ON TRANSFERS OF STOCK
Section 9.1 Restriction on Stock. Except for (i) transfers to the Corporation or
to trusts, personal holding companies or other entities satisfying the terms and
conditions of Section 9.2 or 9.3 below, (ii) reversions from trusts described in
Section 9.2 to the grantors thereof or their estates, or (iii) transfers from
personal holding companies or similar entities described in Section 9.2 to the
sole shareholders there of, no present or future shareholder shall transfer,
whether by way of sale, gift, hypothecation, trust distribution, will, intestacy
or any other disposition, any shares of any class of capital stock ("Stock") in
the Corporation now owned or hereafter acquired by such shareholder (including,
without limitation, shares of Stock acquired upon conversion or exchange of
other shares of Stock), without first giving the Corporation prior written
notice of his intention to so dispose of such Stock. Said notice to the
Corporation ("Disposition Notice") shall state the terms and conditions of the
proposed disposition, including the names of the transferees, the purchase price
and payment terms, if any, the type of disposition, and the number of shares to
be transferred ("Offered Shares"). A shareholder giving a Disposition Notice is
herein sometimes called an "Offering Stockholder".
(a)
The Corporation shall have the option for a period of thirty days following the
receipt of a Disposition Notice from an Offering Stockholder to buy on such
Closing Date, as is determined by the President or Secretary, part or all of the
Offered Shares at the price per share determined in accordance with Section 9.5
of this Section 9, provided that the Corporation may buy less than all of the
Offered Shares if the balance of the Offered Shares is contemporaneously
purchased by Eligible Purchasers (or otherwise disposed of in accordance with
these Bylaws) or if the Offering Stockholder elects to accept offers by the
Corporation and/or Eligible Purchasers to purchase less than all of the Offered
Shares and to retain the balance of the Offered Shares. If the Corporation does
not elect to purchase all Offered Shares, within thirty days after receipt of
the Offering Stockholder's Disposition Notice, it shall forward to the Offering
Stockholder a list of the names and addresses of all Eligible Purchasers
together with a description of their respective rights to purchase Offered
Shares not initially purchased by the Corporation. The Offering Stockholder
shall within fifteen days after receipt of such list of Eligible Purchasers
offer to sell the balance of the Offered Shares to such Eligible Purchasers in
accordance with their respective rights to purchase set forth in such list.
(b) Elections by Eligible Purchasers to purchase Offered Shares under
subsection (a) hereof shall be by written notice delivered both to the
Corporation and to the Offering Stockholder within thirty days
following the receipt of the offer to sell from the Offering
Stockholder as provided in Section 9.1(a) hereof.
(c) The Corporation shall have the further option to buy or furnish
Eligible Purchasers for any Offered Shares not initially to be
purchased by the Corporation or by Eligible Purchasers under
subsections (a) or (b) hereof within 120 days following receipt by the
Corporation of the Disposition Notice.
(d)
The Offered Shares, if any, not purchased under subsections (a), (b), or (c) of
this Section 9.1 may be disposed of within 150 days after receipt by the
Corporation of the Disposition Notice, but only to persons and only on the terms
and conditions set forth in the Disposition Notice. Any Offered Shares not so
transferred within such 150-day period may not thereafter be transferred, except
upon compliance with the terms of this Section 9 of the Bylaws and as if they
had not been previously offered hereunder. Any attempt to transfer any Stock of
the Corporation in contravention of the provisions of this Section 9 shall be
null and void and without legal effect, except that such attempted transfer
shall constitute a continuing offer to sell all such Stock under Section 9.1(a)
hereof. The price at which such Stock may be purchased by the Corporation or
Eligible Purchasers shall be determined pursuant to Section 9.5 of this Section
9; such Stock will be deemed to have been offered at the date of the attempted
transfer; and, for purposes hereof, such attempted transfer shall be deemed to
constitute the giving of a Disposition Notice under Section 9.1, but there shall
be no limitations on the time periods within which the Corporation and/or
Eligible Purchasers shall be required to exercise their rights hereunder.
Section 9.2 Revocable Trusts; Personal Holding Corporations.
(a) Anything in this Section 9 to the contrary notwithstanding, any
shareholder may, with the approval of the Board of Directors or such
officer(s) as may be designated by the Board of Directors for such
purpose, transfer any or all Stock of the Corporation now owned or
hereafter acquired by him to a revocable trust for the sole benefit of
himself during his lifetime, provided that:
(i) the trust instrument acknowledges that the Stock is held
subject to the terms and conditions of these Bylaws;
(ii) the trust, by its terms, provides that on the first to occur of:
(A) the termination of the trust,
(B) the ceasing of the shareholder to act as sole
trustee of the trust, or
(C) any event described in Section 9.4 with
respect to the settlor, all stock of the Corporation
then held by the trust will either revert to the
shareholder or be offered for sale by the same
procedure as set forth in Section 9.1 hereof.
(iii) the shareholder is the sole trustee of said trust and
the trust grants to the shareholder and to no other person,
corporation or other entity full powers as trustee with
respect to all Stock of the Corporation at any time held by
the Trust, including powers to attend all meetings of
shareholders, vote such shares and give proxies with respect
thereto, make all decisions with respect to the trust's sale
or purchase thereof, including the power to direct the sale of
some or all of the Stock of the Corporation at any time for
any reason deemed valid by said shareholder;
(iv) a copy of the trust, as from time to time amended,
is at all times kept on file by the Trustee thereof with the
Secretary of the Corporation; and
(v) the trust, by its terms, provides that any amendment that
in any way affects the Stock of the Corporation held by the
trust or any of the provisions relating to such Stock set
forth in subparagraphs [(a)](i) through [d](iv) above, must be
approved in advance by the President, Treasurer or Secretary
of the Corporation or shall be null and void and of no effect
with respect to such Stock.
(b)
Personal Holding Corporations. Anything in this Section 9 to the contrary
notwithstanding, any non-U.S. resident shareholder of the Corporation's stock
(for purposes of this paragraph, the "Shareholder") may, with the approval of
the Board of Directors or such officer(s) as may be designated by the Board of
Directors for such purpose, transfer any or all Stock of the Corporation now
issued or hereafter acquired by him (or direct the Corporation to issue stock
allocated by the Corporation to him) to a personal holding corporation
incorporated under the laws of a jurisdiction outside of the United States which
corporation is wholly-owned by such Shareholder (or such similar entity under
the laws of the jurisdiction in which such Shareholder is domiciled which is
wholly-owned by such Shareholder and which is approved by the General Counsel of
the Corporation in his discretion), provided that:
(i) One hundred percent (100%) of the stock of such personal
holding corporation is owned solely by the Shareholder (or the
ownership of such other similar approved entity is one hundred
percent (100%) vested in the Shareholder) and no person,
corporation or other entity other than the Shareholder shall
have any rights or powers with respect to the ownership,
control or direction of any stock of such personal holding
corporation or other similar approved entity or any stock of
the Corporation at any time held by such personal holding
corporation or other similar approved entity, including,
without limitation, any right to attend meetings of
shareholders, vote such shares or give proxies with respect
thereto;
<PAGE>
(ii) the Articles of Incorporation, Bylaws and any other
charter or governing documents of such personal holding
corporation or other similar approved entity contain
restrictions on the transfer of its stock which have
substantially the same effect as the stock transfer
restrictions contained in these Bylaws, and are approved in
writing by the General Counsel of the Corporation, are not
amended without such approval, and certified or notarized
copies thereof are at all times kept on file with the
Secretary of the Corporation;
(iii) all stock certificates of the personal holding
corporation (or similar documents evidencing ownership of such
other similar approved entity) contain a legend identifying
the existence of such transfer restrictions;
(iv) such personal holding corporation or similar approved
entity shall agree in writing with the Corporation not to
issue or allot any additional stock of any class to anyone
other than the Shareholder;
(v) the Shareholder and the personal holding corporation or
other similar approved entity agree with the Corporation in
writing, in a form approved by the General Counsel of the
Corporation, that they will abide by all of the terms
restricting the transfer of the Corporation's stock as set
forth in these Bylaws (as they may be amended from time to
time) and that they will take or cause to be taken all steps
which may be required in order to assure compliance with the
stock transfer restrictions contained in these Bylaws,
including an agreement not to transfer the stock of the
personal holding corporation (or other evidence of ownership
of a similar approved entity); and
(vi) the personal holding corporation (or similar approved
entity) and the Shareholder shall agree in writing with each
other and the Corporation that, upon the first to occur of:
(A) any event described in Section 9.4
with respect to the Shareholder;
(B) the bankruptcy, insolvency, dissolution
(either voluntary or involuntary), sale or merger of
the personal holding corporation or other similar
approved entity, or the sale or attempted sale of any
of its stock, other than in accordance with these
Bylaws, or its assets, or the imposition of any lien
upon the stock of the Corporation or other assets
owned by the personal holding corporation or other
similar approved entity; or
(C) the amendment of the Articles of
Incorporation, Bylaws, or other charter or governing
documents of such personal holding corporation or
other similar approved entity, which amendment is not
approved in writing by the General Counsel of the
Corporation, or any breach of any of the provisions
of subparagraphs (i) through (v) of this subsection;
all stock of the Corporation then owned by the
personal holding corporation or other similar approved entity
will be deemed to be offered for sale by the same procedures
as set forth in Section 9.1 hereof.
Section 9.3 Employee Trusts. Anything in this Section 9 to the contrary
notwithstanding, Stock of the Corporation may be owned by one or more trusts
maintained exclusively for the benefit of employees of the Corporation and/or
any of its present or future subsidiaries and either qualified under Section
401(a) or 501(a) of the Internal Revenue Code of 1986 (or any successor
statute), or approved by the Board of Directors of the Corporation, provided
that:
(a) upon the occurrence of any event specified in Section 9.4 with respect
to any employee who is then a beneficiary of such trust, the trust
shall offer for sale in accordance with the terms and provisions of
Section 9.4 hereof:
(i) all Stock of the Corporation, if any, allocated
to the separate account of such employee under the trust's
terms; and
<PAGE>
(ii) a pro rata portion of all Stock of the Corporation held
by such trust and not allocated to the separate accounts of
beneficiaries, such pro rata portion to be based upon such
actuarial and other considerations as the trustees of the
trust and the Board of Directors of the Corporation shall, in
their absolute discretion, deem appropriate.
Section 9.4 Death, Termination of Employment, Bankruptcy, Liens. On the death of
a shareholder, or upon the termination of a shareholder's employment with the
Corporation or any subsidiary of the Corporation, whether said termination be by
retirement, voluntary or involuntary termination, or for any other reason, or
upon the Corporation receiving actual knowledge that a shareholder or any
personal holding corporation or similar approved entity as described in Section
9.2 has become bankrupt or suffered or permitted the imposition of any lien or
attachment on any Stock of the Corporation owned by such shareholder or any
trust, personal holding company or other similar approved entity holding Stock
for his benefit, whichever first occurs ("Determination Date"), all Stock of the
Corporation then owned by such shareholder or his representative or held for his
benefit in any trust, personal holding company or other entity permitted
hereunder shall be deemed offered for sale and to constitute Offered Shares
subject to purchase by the same procedure as set forth in Section 9.1 of this
Section 9, excepting that, purchase of such shares shall occur on such Closing
Date (not more than 245 days after the Determination Date), as the President or
Secretary shall determine with payment to be made in accordance with Section 9.6
hereof. Any of such shares of Stock not elected to be purchased by the
Corporation or by Eligible Purchasers within 245 days after the Determination
Date shall be purchased by the Corporation unless and to the extent that the
Corporation is prohibited from doing so by the Delaware General Corporation Law.
For purposes of this Section 9.4, notwithstanding any other provision of this
Bylaw, a shareholder shall be deemed to own all Stock transferred by him to a
trust satisfying the terms and conditions of Section 9.2 hereof and such trust
shall have the same obligations with respect to the sale of such Stock hereunder
as the shareholder would have had if the Stock had not been transferred to said
trust.
Section 9.5 Purchase Price.
(a) The Purchase Price for any Stock of the Corporation shall be determined
in accordance with this Section 9.5, excepting that if a Disposition
Notice given under Section 9.1 indicates an intention to make a bona
fide sale of Stock for value, then the Purchase Price for any Stock
which is the subject of such notice (including Stock which is being
offered pursuant to the terms of Section 9.2 or 9.3) shall equal the
price set forth in such notice, if such price is lower than the
Purchase Price determined hereunder.
(b) Except as provided in subparagraph (a) hereof and subject to
subparagraph (e) hereof, the Purchase Price for any Stock purchased by
an Eligible Purchaser on or after July 1, 1996 shall be the Formula
Book Value of such Stock as of the last day of the Corporation's fiscal
year coincident with or next preceding the Closing Date with respect to
such purchase.
(c) Except as provided in subparagraph (a) hereof, the Purchase Price for
any Stock purchased by the Corporation hereunder shall be determined as
follows (subject to appropriate adjustment to reflect stock splits,
stock dividends, combinations of shares and similar recapitalizations):
The Purchase Price (P) per share for purchases by the
Corporation with a date of Disposition Notice or a
Determination Date on or after July 1, 1990 shall be
determined by the following formula:
P = [B x (1 + (r x n/12))] + (d x n/12)
B = Formula Book Value of such Stock as of the last
day of the Corporation's fiscal year coincident with or next
preceding the date of Disposition Notice under Section 9.1 or
a Determination Date under Section 9.4, whichever is
applicable;
r = the actual percentage increase, if any, in the
Formula Book Value of such Stock as of the last day of the
Corporation's fiscal year during which such Disposition Notice
or Determination Date occurs over the Formula Book Value as of
the last day of the Corporation's prior fiscal year;
n = the number of completed months between (1) the
last day of the Corporation's fiscal year coincident with or
next preceding such Disposition Notice or Determination Date,
and (2) the date of such Disposition Notice or such
Determination Date, whichever is applicable; and
d = The dividend, if any, per share declared for such
Stock for the fiscal year during which such Disposition Notice
or Determination Date occurs (unless the shareholder actually
receives the dividend for such year, in which case d = 0).
(d) If, and only if, the Closing Date for the purchase by the Corporation
or an Eligible Purchaser of any Stock under Section 9.4 hereof is more
than thirty (30) days after the Determination Date, the Corporation
will pay the selling shareholder interest on the amount of the Net Book
Value denoted as "B" in the formula set forth in subparagraph (c)
hereof at the Loan Rate (as described in Section 9.6(b)(iii) hereof)
from the Determination Date to the Closing Date.
(e) Except as provided in subparagraph (a) hereof, with respect to any
purchases of Stock by an Eligible Purchaser from a shareholder other
than the Corporation, the Corporation will pay the selling shareholder
an amount which is equal to "P" minus "B" in the formula set forth in
subparagraph (c) hereof.
Section 9.6 Payment.
(a) The Purchase Price for Stock of the Corporation purchased hereunder by
an Eligible Purchaser shall be paid in cash on the Closing Date,
subject to Section 9.5(e) hereof, except as the purchaser and seller
may otherwise agree.
(b.i) Payments by the Corporation of the portion of the Purchase Price
representing the pro rata increase, if any, in the Net Book Value of
the Stock and the pro rata dividend may be made in multiple
installments as may be determined by the President or Secretary from
time-to-time, but no such installment shall be made later than eighteen
(18) months after the Closing Date except as provided in subparagraph
(b)(ii) hereof.
(b.ii)
Notwithstanding the provisions of subparagraph (b)(i) hereof, the Purchase Price
for Stock of the Corporation purchased hereunder by the Corporation may be paid,
at the option of the Corporation, (i) all in cash, or (ii) twenty-five percent
(25%) in cash and the balance in a non-negotiable promissory note of the
Corporation payable over a period of not more than three (3) years following the
Closing Date, no part of such note to be paid in the same calendar year in which
the stock is purchased unless such note is paid in full within such calendar
year, such note to bear interest on the unpaid balance thereof at the Loan Rate
(as hereinafter defined), or (iii) on such other terms as seller and the
Corporation may agree in writing.
(b.iii) "Loan Rate" shall mean the interest rate for Wyatt shareholder loans in
effect at such bank or banks as the Board of Directors, the President
or the President's designee shall have approved for such loans on the
date of issue of a note pursuant to subparagraph (b)(ii) hereof, or the
Determination Date pursuant to Section 9.5(d) hereof, or 10% per annum,
whichever is lower.
Section 9.7 Endorsement on Stock Certificates. All certificates representing
Stock of the Corporation shall be conspicuously endorsed with a legend
substantially as follows:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933. THE SHARES REPRESENTED BY THIS
CERTIFICATE ARE SUBJECT TO AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED,
HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT UNDER THE CIRCUMSTANCES
SPECIFIED IN SECTION 9. OF THE BYLAWS OF THE COMPANY, A COPY OF WHICH
MAY BE OBTAINED FROM THE SECRETARY OF THE WYATT COMPANY WHO WILL MAIL A
COPY THEREOF WITHOUT CHARGE TO THE HOLDER HEREOF WITHIN 5 DAYS OF A
WRITTEN REQUEST THEREFOR."
Section 9.8 [Reserved]
<PAGE>
Section 9.9 Definitions.
(a) The term "Eligible Purchasers", as used herein, shall mean any of the
following persons or entities:
(i) full-time employees or regular part-time
employees of the Corporation or its subsidiaries who
satisfy criteria approved from time-to-time by the Board
of Directors;
(ii) a partner engaged full-time in a partnership
practice of any affiliate or subsidiary, if applicable,
of the Corporation;
(iii) a director of the Corporation or any subsidiary
of the Corporation;
(iv) a corporation, partnership, association, or other entity
with which the Corporation has an affiliated business
relationship, as designated from time to time by the Board of
Directors; or
(v) full-time employees or regular part-time employees of any
corporation, partnership, association, or other entity with
which the Corporation has an affiliated business relationship
as designated from time to time by the Board of Directors and
who satisfy criteria approved from time to time by the Board
of Directors.
The Board of Directors shall designate which persons in the categories
of persons set forth above shall be deemed to be Eligible Purchasers
with respect to any particular transaction. Designation as an Eligible
Purchaser in connection with any offer and sale shall not create or
imply any right to be so designated in connection with any other offer
or sale or, if so designated, to be designated on the same terms and
conditions.
(b)
Net Book Value of Common Stock as used herein shall mean the consolidated net
book value of the Common Stock of the Corporation determined, on an accrual
basis, by generally accepted accounting principles except that in computing such
Net Book Value as of June 30, 1984, or any subsequent fiscal year end,
consolidated assets of the Corporation consisting of subscriber lists, computer
software and data banks used principally in compensation survey or related
businesses carried on by the Corporation or any subsidiary shall be valued at
50% of the Consolidated income received by the Corporation in respect of such
business during the fiscal year then ended. Formula Book Value as used herein
shall mean the Net Book Value of the Company's Common Stock as of June 30, 1996,
increased or decreased by net income or losses, and all other GAAP basis
increases or decreases to Net Book Value occurring after June 30, 1996, adjusted
to (i) spread the economic impact of certain real estate sublease losses over
the remaining life of the sublease; and (ii) eliminate annual changes in the
Currency Translation Adjustment ("CTA") occurring after June 30, 1996. Formula
Book Value shall be determined by the independent certified public accountants
of the Corporation from the Company's consolidated financial statement prepared
on an accrual basis in accordance with generally accepted accounting principles
as certified by such accountants, except as described above. Such determinations
shall be conclusive and binding upon the Corporation and all holders of stock.
(c) The term "Closing Date" hereunder shall mean the time established by
the President or Secretary pursuant to Section 9.1, 9.4 or 9.5 hereof.
(d) The term "Corporation" as used herein in Section 9 shall mean the
Corporation, a Subsidiary, or an Affiliate as defined in ARTICLE
FOURTEENTH of the Restated Certificate of Incorporation.
Section 9.10 Benefit. The rights and restrictions contained herein shall be
binding upon and inure to the benefit of all present and future shareholders of
the Corporation, their heirs, executors, administrators, successors and assigns.
Section 9.11 Amendment. Except as provided below, this Section 9 of the Bylaws
of the Corporation may be altered, amended or repealed only upon the affirmative
vote of the holders of Stock possessing at least 80% of the outstanding voting
rights of the capital stock of the Corporation, voting as one aggregate class.
If any such alteration, amendment or repeal affects any class or classes
adversely, then, in addition to the affirmative vote required above, the
affirmative vote of holders of at least a majority of the outstanding shares of
each class so affected, voting separately as a class, shall be required, unless
the effect of such alteration, amendment or repeal is adverse to all classes on
a substantially equivalent basis. Notwithstanding the foregoing, any amendment
to this Section 9 of the Bylaws of the Corporation describing the Purchase Price
of any class of Stock hereafter authorized shall require only such affirmative
vote of shareholders as Section 242 of the Delaware General Corporation Law, as
then in effect, requires to amend the Company's Restated Certificate of
Incorporation to authorize the issuance of such class.
g:\CORP: BYL11_96.doc
Revised: November 21, 1996
<TABLE> <S> <C>
<ARTICLE> 5
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<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> Jun-30-1997
<PERIOD-START> Jul-01-1996
<PERIOD-END> Dec-31-1996
<CASH> 8,558
<SECURITIES> 0
<RECEIVABLES> 138,711
<ALLOWANCES> 7,377
<INVENTORY> 0
<CURRENT-ASSETS> 149,551
<PP&E> 138,931
<DEPRECIATION> 102,220
<TOTAL-ASSETS> 322,950
<CURRENT-LIABILITIES> 128,684
<BONDS> 116,237
0
0
<COMMON> 16,780
<OTHER-SE> 60,800
<TOTAL-LIABILITY-AND-EQUITY> 322,950
<SALES> 0
<TOTAL-REVENUES> 252,511
<CGS> 215,303
<TOTAL-COSTS> 247,062
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 767
<INCOME-PRETAX> 2,022
<INCOME-TAX> 1,092
<INCOME-CONTINUING> 930
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 846
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