<PAGE> 1
================================================================================
- --------------------------------------------------------------------------------
FORM 10-Q
-------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR QUARTER ENDED JUNE 30, 1996. COMMISSION FILE NUMBER 1-11804
THE GEON COMPANY
(Exact name of Registrant as specified in its charter)
DELAWARE 34-1730488
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
One Geon Center, Avon Lake, Ohio 44012
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (216) 930-1000
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
----- -----
As of June 30, 1996 there were 24,593,931 shares of common stock outstanding.
There is only one class of common stock.
- --------------------------------------------------------------------------------
================================================================================
<PAGE> 2
THE GEON COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(IN MILLIONS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
-------------------------- -------------------------
1996 1995 1996 1995
---------- ----------- --------- ---------
<S> <C> <C> <C> <C>
Sales $ 311.8 $ 357.6 $ 557.5 $ 693.8
Operating costs and expenses:
Cost of sales 280.1 298.0 519.9 582.1
Selling and administrative expenses 13.3 14.0 25.7 26.9
Employee separation and plant phase-out charges -- 56.5 -- 56.5
-------- -------- -------- --------
Operating income (loss) 18.4 (10.9) 11.9 28.3
Interest expense (2.6) (1.6) (5.5) (3.3)
Interest income .3 .2 1.0 .6
Other income (expense), net .4 (2.0) .2 (4.1)
-------- -------- -------- --------
Income (loss) before income taxes 16.5 (14.3) 7.6 21.5
Income tax (expense) benefit (6.4) 6.3 (3.1) (8.1)
-------- -------- -------- --------
Net income (loss) $ 10.1 $ (8.0) $ 4.5 13.4
======== ======== ======== ========
Earnings per share:
Net income (loss) $ .40 $ (.31) $ .18 $ .51
======== ======== ======== ========
Number of shares used to compute earnings per share 25.2 26.2 25.2 26.5
Dividends paid per common share: $ .125 $ .125 $ .25 $ .25
</TABLE>
Page 2 of 9 Pages
<PAGE> 3
THE GEON COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(IN MILLIONS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
June 30, December 31,
ASSETS 1996 1995
-------- --------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 15.6 $ 61.1
Accounts receivable, less allowance for doubtful
receivables ($2.3 in 1996 and $2.1 in 1995) 134.2 102.3
Inventories:
Finished products and in-process 83.0 94.4
Raw materials and supplies 40.0 27.4
-------- --------
123.0 121.8
LIFO reserve (30.2) (29.6)
-------- --------
92.8 92.2
Deferred income taxes 14.0 14.0
Prepaid expenses 15.7 13.4
-------- --------
Total current assets 272.3 283.0
Property:
Land, buildings, machinery and equipment 1,156.0 1,131.9
Allowances for depreciation and amortization (709.0) (687.2)
-------- --------
Property, net 447.0 444.7
Deferred charges and other assets 34.7 24.3
-------- --------
Total assets $ 754.0 $ 752.0
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Short-term bank debt $ 9.6 $ 8.6
Accounts payable 133.7 125.8
Accrued expenses 61.4 58.0
Current portion of long-term debt .7 .7
-------- --------
Total current liabilities 205.4 193.1
Long-term debt 137.6 137.9
Deferred income taxes 39.2 37.3
Postretirement benefits other than pensions 86.6 86.7
Other non-current liabilities 79.9 88.1
-------- --------
Total liabilities 548.7 543.1
Stockholders' equity:
Preferred stock, 10.0 shares authorized, no shares issued -- --
Common stock, $.10 par, authorized 100.0 shares;
issued 27.9 shares in 1996 and in 1995 2.8 2.8
Additional paid-in capital 271.7 273.9
Common stock held in treasury (3.3 shares in 1996
and 3.2 shares in 1995) (88.1) (86.6)
Retained earnings 60.6 62.3
Cumulative translation adjustment (18.3) (19.1)
Equity adjustment to recognize minimum pension liability (19.7) (19.7)
Unearned portion of restricted stock awards (3.7) (4.7)
-------- --------
Total stockholders' equity 205.3 208.9
-------- --------
Total liabilities and stockholders' equity $ 754.0 $ 752.0
======== ========
</TABLE>
Page 3 of 9 Pages
<PAGE> 4
THE GEON COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(DOLLARS IN MILLIONS)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
------------------
1996 1995
------- -------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 4.5 $ 13.4
Adjustments to reconcile net income to net
cash (used) provided by operating activities:
Employee separation and plant phase-out -- 56.5
Depreciation and amortization 28.1 30.0
Provision (credit) for deferred income taxes 2.7 (9.6)
Change in assets and liabilities:
Accounts receivable (32.4) 7.6
Inventories .2 (20.4)
Accounts payable 8.9 (19.6)
Accrued expenses 3.0 (2.0)
Income taxes payable .4 (2.4)
Other (18.4) 13.3
------- -------
Net cash (used) provided by operating activities (3.0) 66.8
INVESTING ACTIVITIES
Purchases of property (32.5) (29.5)
------- -------
NET CASH (USED) PROVIDED BY OPERATING AND INVESTING ACTIVITIES (35.5) 37.3
FINANCING ACTIVITIES
Increase (decrease) in short-term debt .6 (3.8)
Repayment of long-term debt (.3) (.3)
Repurchase of common stock (4.9) (37.3)
Dividends (6.2) (6.5)
Proceeds from issuance of common stock .4 .2
------- -------
Net cash used by financing activities (10.4) (47.7)
EFFECT OF EXCHANGE RATE CHANGES ON CASH .4 --
------- -------
DECREASE IN CASH AND CASH EQUIVALENTS (45.5) (10.4)
CASH AND CASH EQUIVALENTS AT JANUARY 1 61.1 47.5
------- -------
CASH AND CASH EQUIVALENTS AT JUNE 30 $ 15.6 $ 37.1
======= =======
</TABLE>
During the first six months of 1996 and 1995 the Company paid net income taxes
of $1.9 and $21.1, respectively. Cash payments for interest including amounts
capitalized were $5.4 for the first six months of 1996 and $4.0 for the same
period of 1995.
Page 4 of 9 Pages
<PAGE> 5
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
------------------------------------------------------
Note A
- ------
The accompanying unaudited consolidated financial statements of The Geon Company
(Company or Geon) have been prepared in accordance with generally accepted
accounting principles for interim financial information and the instructions to
Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all
of the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for a
fair financial presentation have been included. Operating results for the three
month and six month periods ended June 30, 1996 are not necessarily indicative
of the results that may be expected for the year ending December 31, 1996. For
further information refer to the consolidated financial statements and notes
thereto included in the Company's annual report on Form 10-K for the year ended
December 31, 1995. Certain amounts for 1995 have been reclassified to conform to
the 1996 presentation.
Note B
- ------
There are pending or threatened against the Company or its subsidiaries various
claims, lawsuits and administrative proceedings, all arising from the ordinary
course of business with respect to commercial, product liability and
environmental matters, which seek remedies or damages. The Company believes that
any liability that may finally be determined should not have a material adverse
effect on the Company's consolidated financial position.
Note C
- ------
On August 1, 1996 the Board of Directors authorized the Company to repurchase up
to 2.5 million shares of Geon common stock. Future purchases will be dependent
on the Company's earnings, cash flow and market price of its common stock.
Page 5 of 9 Pages
<PAGE> 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Industry Conditions:
- --------------------
Based on The Society of Plastics Industry's June 1996 data, North American (U.S.
and Canada) producer shipments of polyvinyl chloride (PVC), including exports,
are estimated to have been 8% higher in the second quarter of 1996 over the
first quarter of 1996 and were about 17% higher than in the same quarter in
1995. For the first six months of 1996, North American shipments are 10% higher
than the same period of last year. Exports from North America year-to-date
(which represented about 10% of total shipments) were 3% less than a year ago.
Capacity utilization (shipments/capacity) for North America was estimated at 99%
of effective capacity (92% of nameplate) during the second quarter of 1996, with
inventories declining as shipments exceeded production by 3%. In the first
quarter of 1996 and second quarter 1995 shipments were 95% and 93% of effective
capacity, respectively. North American capacity in the second quarter of 1996 is
estimated to have increased 3% compared to the previous quarter and 6% since
last year's second quarter.
Chlorine prices decreased approximately 3% in the second quarter of 1996 versus
a year ago. Ethylene prices, increased 12% in the second quarter of 1996 from
the previous quarter but were 17% lower than the same period of the prior year.
The spread between PVC resin prices in the largest PVC resin markets and
ethylene and chlorine prices is estimated to have been 2.5 cents per pound
higher in the second quarter of 1996 as compared to the previous quarter and 7.5
cents per pound lower than the second quarter of 1995. Ethylene and chlorine
prices are likely to increase in the third quarter. In 1996 domestic PVC resin
producers have generally realized a 7 cent per pound increase over the February
through June period. Another 4 cent per pound resin price increase has been
announced to be phased in during the third quarter.
Results of Operations:
- ----------------------
The Company had sales of $311.8 million in the second quarter versus $357.6
million in the same quarter of 1995. Operating income was $18.4 million in the
second quarter of 1996. During the same period a year ago operating income was
$45.6 million, excluding a special charge of $56.5 million ($34.5 million
after-tax) for employee separation and plant phase-out charges to reconfigure
the Company's compounding operations. In the first quarter of 1996 Geon had
sales of $245.7 million and an operating loss of $6.5 million. Net income (loss)
for the second quarter of 1996 and 1995 was $10.1 million and $(8.0) million,
respectively.
The Company's second quarter 1996 resin shipments were 25% and 26% above the
first quarter of 1996 (which were constrained by plant operational problems) and
second quarter of 1995, respectively. The Company's average spread between resin
prices and raw material costs (ethylene and chlorine) improved approximately 1.5
cents per pound from the first quarter of 1996 and was 7.5 cents per pound below
the same period last year. Compound sales volume in the second quarter of 1996
was approximately 21% above the same period a year ago.
In April 1996 Geon started up its 800 million pound VCM expansion thereby
producing VCM from purchased ethylene and chlorine and reducing purchases of
VCM.
During the second quarter of last year, the Company was able to sell VCM into
the export market at a substantial premium to domestic prices. This benefited
the second quarter of 1995 operating income, when compared to the second quarter
of 1996, by approximately $10 million.
In the first six months of 1996, sales were $557.5 million and net income $4.5
million. For the same period of 1995 the Company had sales of $693.8 million
and net income of $47.9 million before the after-tax effect of the one-time
charge mentioned above.
Interest & Other Expense:
- -------------------------
Interest expense of $2.6 million during the second quarter of 1996 increased
from $1.6 million during the same period in 1995. The increase reflects interest
expense on higher average debt levels and higher interest rates associated with
the Company's long-term public debt offering in December 1995. Other income
(expense), net
Page 6 of 9 Pages
<PAGE> 7
improved in the second quarter 1996 as compared to the same
period in 1995 mainly from the effects of favorable foreign currency rates and
lower costs associated with the sale of accounts receivable.
Taxes:
- ------
The second quarter of 1996 included an income tax expense of $6.4 million on
pre-tax income of $16.5 million as compared to an income tax benefit of $6.3
million in the second quarter of 1995 on a pre-tax loss of $14.3 million. For
the first half of 1996 income tax expense was $3.1 million on pre-tax income of
$7.6 million as compared to income tax expense of $8.1 million on pre-tax income
of $21.5 million during the same period 1995. Changes in effective tax rates
between the periods noted above were primarily attributable to the accrual of
dividend withholding taxes on foreign subsidiaries' undistributed earnings.
Capital Resources and Liquidity:
- --------------------------------
During the six months ended June 30, 1996, the Company used $3.0 million of net
cash from operating and investing activities compared to providing $66.8 million
during the same period of 1995. This change is primarily attributable to lower
earnings before any special charge and a $12 million pension payment in the
second quarter of 1996. Partially offsetting these uses was net operating
working capital (accounts receivable plus inventories less accounts payable)
which increased $9.1 million less in 1996 versus 1995.
Investing activities include the purchase of property of $32.5 million during
the first six months of 1996 which approximated the same period in 1995. Capital
expenditures for the full year of 1996 are projected to approximate 1995.
Financing activities in the first six months of 1996 primarily reflects the
payment of dividends and the repurchase of 200,000 shares of common stock
authorized under a February 1995 Board of Directors resolution. In July 1996 the
Company repurchased an additional 656,400 shares, completing the Board of
Directors February 1995 repurchase authorization leaving 23.9 million shares
outstanding. On August 1, 1996 the Company announced that the Board of Directors
authorized an additional repurchase of 2.5 million shares. The timing of any
stock repurchase depends on the Company's earnings, cash flow and market price
of its stock common stock.
The Company believes that the projected cash to be provided by operations, the
existing working capital facilities and other available permitted borrowings
will provide sufficient funds to support dividends, debt service requirements
and normal capital expenditures plus expenditures associated with the previously
announced chlor-alkali plant with mechanical completion planned for in late
1997.
Environmental Matters:
- ----------------------
The Company is subject to various federal, state and local environmental laws
and regulations concerning emissions to the air, discharges to waterways, the
release of materials into the environment, the generation, handling, storage,
transportation, treatment and disposal of waste materials or otherwise relating
to the protection of the environment.
The Company maintains a disciplined environmental and industrial safety and
health compliance program and conducts internal and external regulatory audits
at its plants in order to identify and categorize potential environmental
exposures and to ensure compliance with applicable environmental, health and
safety laws and regulations. This is an effort which has required and may
continue to require process or operational modifications, the installation of
pollution control devices and cleanups.
The Company estimates capital expenditures related to the limiting and
monitoring of hazardous and non-hazardous wastes during 1996 and 1997 to
approximate $2 million to $4 million.
The Company believes that compliance with current governmental regulations will
not have a material adverse effect on its capital expenditures, earnings, cash
flow or liquidity. At June 30, 1996, the Company had accruals totaling
approximately $27.9 million to cover future environmental remediation
expenditures. Environmental remediation expenditures are estimated to be $5
million to $8 million in 1996.
Page 7 of 9 Pages
<PAGE> 8
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
On March 10, 1993, Westlake Monomers Corporation (Westlake)
brought an action against the Company and The B.F.Goodrich
Company (BFG) generally alleging that certain of Westlake's
rights pursuant to a right of first refusal agreement between BFG
and Westlake covering specified assets, generally comprised of
those located at Calvert City, Kentucky were triggered by the
Initial Public Offering of the Company by BFG in April 1993. With
the lawsuit stayed, and the issues referred to arbitration for
resolution, on October 31, 1994, the arbitrator indicated that
the right of first refusal was triggered, but the decision did
not specify a remedy. On March 29, 1995 BFG announced that the
arbitrator in that case ruled that Westlake does not have the
right to buy common shares in The Geon Company as part of an
existing right of first refusal. As discussed in the Company's
Form 10-K, BFG has previously agreed to indemnify the Company
with respect to any liabilities and expenses arising from the
Westlake lawsuit.
Item 4. Submission of Matters to a Vote of Security Holders
The Company held its Annual Meeting of Stockholders on May 2,
1996. As described in the 1996 Proxy Statement, the following
action was taken:
a) The nine nominees for directors were elected. The votes for
Director votes were as follows:
<TABLE>
<CAPTION>
Number of Shares Number of Shares
Voted For Vote Withheld
---------------- ----------------
<S> <C> <C>
James K. Baker 22,057,517 53,274
Gale Duff-Bloom 22,041,119 69,672
J. A. Fred Brothers 22,053,181 57,610
J. Douglas Campbell 22,057,517 53,274
Harry A. Hammerly 22,057,517 53,274
D. Larry Moore 22,057,387 53,404
John D. Ong 21,861,126 249,665
William F. Patient 22,047,356 63,435
R. Geoffrey P. Styles 22,057,137 53,654
</TABLE>
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 3a - Amendments to the By-Laws of The Geon Company
Exhibit 3b - Amended and Restated By-Laws of The Geon Company
(b) Exhibit 11 - Statement re Computation of Per Share Earnings
(c) Exhibit 27 - Financial Data Schedule
(d) Reports on Form 8-K
None.
Page 8 of 9 Pages
<PAGE> 9
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
August 7, 1996 THE GEON COMPANY
/s/ T. A. Waltermire
------------------------------------
T. A. Waltermire
Chief Financial Officer,
(Principal Financial Officer)
/s/ G. P. Smith
------------------------------------
G. P. Smith
Controller and Assistant Treasurer
(Principal Accounting Officer)
Page 9 of 9 Pages
<PAGE> 1
EXHIBIT 3a
Exhibit A
---------
Amendments to the By-Laws of The Geon Company
Duly Approved and Adopted by the Board of Directors
at a Meeting of the Board of Directors
Held August 1, 1996.
1. SECTION 2 OF ARTICLE I IS HEREBY AMENDED IN ITS ENTIRETY AS
FOLLOWS:
"SECTION 2. SPECIAL MEETINGS. Special meetings of the
stockholders may be called by the Chief Executive Officer or by the
Board of Directors, pursuant to a resolution adopted by a majority of
the total number of directors which the Board would have if there were
no vacancies (the "Whole Board"), at such times and at such place
either within or without the State of Delaware as may be stated in the
call or in a waiver of notice thereof."
2. SECTION 3 OF ARTICLE I IS HEREBY AMENDED BY INSERTING AFTER
THE LAST SENTENCE THEREOF THE FOLLOWING:
"Any special meeting of the stockholders may be cancelled by
resolution of the Whole Board upon public notice given prior to the
date previously scheduled for such meeting of the stockholders."
3. THE HEADING OF SECTION 4 OF ARTICLE I IS HEREBY AMENDED BY
ADDING THE WORD "ADJOURNMENT" AT THE END OF THE HEADING THEREOF, SO THAT THE
HEADING WILL READ IN ITS ENTIRETY AS FOLLOWS:
"QUORUM AND ADJOURNMENT."
4. THE SECOND SENTENCE OF SECTION 4 OF ARTICLE I IS HEREBY
AMENDED IN ITS ENTIRETY AS FOLLOWS:
"The stockholders present at a duly called meeting at which a
quorum is present may continue to transact business until adjournment,
notwithstanding the withdrawal of holders of a sufficient number of
shares such that less than a quorum remains. The chairman of the
meeting or a majority of the shares so represented may adjourn the
meeting from time to time, whether or not there is a quorum present. No
notice of the time and place of adjourned meetings need be given except
as required by law."
5. SECTION 8 OF ARTICLE I IS HEREBY AMENDED IN ITS ENTIRETY AS
FOLLOWS:
"SECTION 8. ACTION BY CONSENT. Any action required or
permitted to be taken at any meeting of stockholders may be taken
without a meeting, with or without prior notice and with or without a
vote, only if, prior to such action, a written consent of consents
thereto, setting forth such action, is signed by the holders of record
of all of the shares of the stock of the Corporation, issued and
outstanding and entitled to vote thereon."
A-1
<PAGE> 2
6. SECTION 2 OF ARTICLE III IS HEREBY AMENDED BY DELETING FROM
THE SECOND SENTENCE THEREOF THE WORDS "ENTIRE BOARD" AND INSERTING THEREAT THE
WORDS "WHOLE BOARD" AND BY DELETING THE THIRD SENTENCE THEREOF IN ITS ENTIRETY.
7. SECTION 4 OF ARTICLE III IS HEREBY AMENDED BY DELETING THE
PHRASE "OR BY A MAJORITY VOTE OF THE RECORD HOLDERS OF AT LEAST A MAJORITY OF
THE SHARES OF STOCK OF THE CORPORATION, ISSUED AND OUTSTANDING AND ENTITLED TO
VOTE," THEREFROM.
8. SECTION 8 OF ARTICLE III IS HEREBY AMENDED BY deleting from
the first sentence thereof the words "entire Board" and inserting thereat the
words "Whole Board".
9. THE LAST SENTENCE OF SECTION 11 OF ARTICLE III IS HEREBY
AMENDED BY DELETING THE WORDS "BY A VOTE OF THE STOCKHOLDERS" THEREFROM.
10. SECTION 5 OF ARTICLE V IS HEREBY DELETED IN ITS ENTIRETY.
11. SECTIONS 4, 6, 7, AND 8 OF ARTICLE V ARE HEREBY RENUMBERED
TO BE SECTIONS 5, 9, 10, AND 11, RESPECTIVELY.
12. A NEW SECTION 4 IS HEREBY ADDED TO ARTICLE V, WHICH SHALL
READ IN ITS ENTIRETY AS FOLLOWS:
"SECTION 4. RIGHT TO INDEMNIFICATION. The right to
indemnification conferred in this Article V 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, such expenses to be paid by the Corporation within 20 days
after the receipt by the Corporation of a statement or statements from
the claimant requesting such payment or payments of expenses from time
to time; PROVIDED, HOWEVER, that if the General Corporation Law of the
State of Delaware requires, the payment of such expenses incurred by a
director or officer in his or her capacity as a director or officer
(and not in any other capacity in which service was or is rendered by
such person while a director or officer, including, without limitation,
service to an employee benefit plan) in advance of the final
disposition of a proceeding, shall be made only upon delivery to 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 such director or officer is not entitled to be
indemnified under this Article V or otherwise."
13. SECTION 5 OF ARTICLE V IS HEREBY AMENDED IN ITS ENTIRETY
AS FOLLOWS:
"SECTION 5. SPECIFIC AUTHORIZATION. To obtain indemnification
under this Article V, a claimant shall submit to the Corporation a
written request, including therein or therewith such documentation and
information as is reasonably available to the
A-2
<PAGE> 3
claimant and is reasonably necessary to determine whether and to what
extent the claimant is entitled to indemnification. Any indemnification
under Section 1 or Section 2 of this Article V (unless ordered by a
court) shall be made by the Corporation only as authorized in the
specific case upon a determination that indemnification of the
director, officer, employee or agent is proper in the circumstances
because he has met the applicable standard of conduct set forth in said
Sections 1 and 2. Such determination shall be made by (a) the
stockholders, (b) the Board of Directors by a majority vote of a quorum
consisting of Disinterested Directors, or (c) (1) even if such quorum
is not obtainable, if a quorum of Disinterested Directors so directs or
(2) if a Change of Control shall have occurred, by an Independent
Counsel in a written opinion, which Independent Counsel shall be
selected by a majority vote of a quorum of Disinterested Directors or,
if a Change of Control shall have occurred, by the claimant. If it is
so determined that the claimant is entitled to indemnification, payment
to the claimant shall be made within 10 days after such determination."
14. A NEW SECTION 6 IS HEREBY ADDED TO ARTICLE V, WHICH SHALL
READ IN ITS ENTIRETY AS FOLLOWS:
"SECTION 6. SUIT AGAINST CORPORATION. If a claim under Section
1 or 2 of this Article V is not paid in full by the Corporation within
30 days after a written claim pursuant to Section 5 of this Article V
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 be entitled to be paid also the expense of prosecuting
such claim. It shall be a defense to any such action (other than an
action brought to enforce a claim for expenses incurred in defending
any proceeding in advance of its final disposition where the required
undertaking, if any is required, has been tendered to the Corporation)
that the claimant has not met the standard of conduct which makes it
permissible under the General Corporation Law of the State of Delaware
or this Article V for the Corporation 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 Counsel or stockholders) to have made a
determination prior to the commencement of such action that
indemnification of the claimant is proper in the circumstances because
he or she has met the applicable standard of conduct set forth in the
General Corporation Law of the State of Delaware or this Article V, nor
an actual determination by the Corporation (including its Board of
Directors, Independent Counsel or stockholders) that the claimant has
not met such applicable standard of conduct, shall be a defense to the
action or create a presumption that the claimant has not met the
applicable standard of conduct."
15. A NEW SECTION 7 IS HEREBY ADDED TO ARTICLE V, WHICH SHALL
READ IN ITS ENTIRETY AS FOLLOWS:
"SECTION 7. CORPORATION BOUND. If a determination shall have
been made pursuant to Section 5 of this Article V that the claimant is
entitled to indemnification, the Corporation shall be bound by such
determination in any judicial proceeding commenced pursuant to Section
6 of this Article V."
A-3
<PAGE> 4
16. A NEW SECTION 8 IS HEREBY ADDED TO ARTICLE V, WHICH SHALL
READ IN ITS ENTIRETY AS FOLLOWS:
"SECTION 8. PRECLUSION. The Corporation shall be precluded
from asserting in any judicial proceeding commenced pursuant to Section
6 of this Article V that the procedures and presumptions of this
Article V are not valid, binding and enforceable and shall stipulate in
such proceeding that the Corporation is bound by all the provisions of
this Article V."
17. SECTION 11 OF ARTICLE V IS HEREBY AMENDED IN ITS ENTIRETY
AS FOLLOWS:
"SECTION 11. INVALIDITY OF ANY PROVISIONS OF THIS ARTICLE. The
invalidity or unenforceability of any provision of this Article V shall
not affect the validity or enforceability of the remaining provisions
of this Article V, and, to the fullest extent possible, such provisions
of this Article V (including, without limitation, each such portion of
any Section of this Article V containing any such provision held to be
invalid, illegal or unenforceable) shall be construed so as to give
effect to the intent manifested by the provision held invalid, illegal
or unenforceable."
18. A NEW SECTION 12 IS ADDED TO ARTICLE V, WHICH SHALL READ
IN ITS ENTIRETY AS FOLLOWS:
"SECTION 12. DEFINITIONS. For purposes of this Article V:
"(A) "Change of Control" means:
"(1) the acquisition by any individual, entity or
group (within the meaning of Section 13(d)(3) or 14(d)(2) of
the Exchange Act) (a "Person") of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act)
of voting securities of the Corporation where such acquisition
causes such Person to own 20% or more of the combined voting
power of the then outstanding voting securities of the
Corporation entitled to vote generally in the election of
directors (the "Outstanding Corporation Voting Securities");
PROVIDED, HOWEVER, that for purposes of this paragraph (1),
the following acquisitions shall not be deemed to result in a
Change of Control: (i) any acquisition directly from the
Corporation, (ii) any acquisition by the Corporation, (iii)
any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Corporation or any
corporation controlled by the Corporation or (iv) any
acquisition by any corporation pursuant to a transaction that
complies with clauses (i), (ii) and (iii) of paragraph (3)
below; PROVIDED, FURTHER, that if any Person's beneficial
ownership of the Outstanding Corporation Voting Securities
reaches or exceeds 20% as a result of a transaction described
in clause (i) or (ii) above, and such Person subsequently
acquires beneficial ownership of additional voting securities
of the Corporation, such subsequent acquisition shall be
treated as an acquisition that causes such Person to own 20%
or more of the Outstanding Corporation Voting Securities; and
provided, further, that if at least a majority of the members
A-4
<PAGE> 5
of the Incumbent Board (as defined below) determines in good
faith that a Person has acquired beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act)
of 20% or more of the Outstanding Corporation Voting
Securities inadvertently, and such Person divests as promptly
as practicable a sufficient number of shares so that such
Person beneficially owns (within the meaning of Rule 13d-3
promulgated under the Exchange Act) less than 20% of the
Outstanding Corporation Voting Securities, then no Change of
Control shall have occurred as a result of such Person's
acquisition; or
"(2) individuals who, as of August 1, 1996,
constitute the Board of Directors (the "Incumbent Board")
cease for any reason to constitute at least a majority of the
Board of Directors; PROVIDED, HOWEVER, that any individual
becoming a director subsequent to August 1, 1996, whose
election, or nomination for election by the Corporation's
stockholders, was approved by a vote of at least a majority of
the directors then comprising the Incumbent Board shall be
considered a member of the Incumbent Board, except that, for
this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election
contest with respect to the election or removal of directors
or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board of
Directors shall not be considered a member of the Incumbent
Board; or
"(3) the consummation of a reorganization, merger or
consolidation or sale or other disposition of all or
substantially all of the assets of the Corporation or the
acquisition of assets of another corporation ("Business
Combination"); excluding, however, such a Business Combination
pursuant to which (i) all or substantially all of the
individuals and entities who were the beneficial owners of the
Outstanding Corporation Voting Securities immediately prior to
such Business Combination beneficially own, directly or
indirectly, more than 60% of, respectively, the then
outstanding shares of common stock and the combined voting
power of the then outstanding voting securities entitled to
vote generally in the election of directors, as the case may
be, of the corporation resulting from such Business
Combination (including, without limitation, a corporation that
as a result of such transaction owns the Corporation or all or
substantially all of the Corporation's assets either directly
or through one or more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to such
Business Combination of the Outstanding Corporation Voting
Securities, (ii) no Person (excluding any employee benefit
plan (or related trust) of the Corporation or such corporation
resulting from such Business Combination) beneficially owns,
directly or indirectly, 20% or more of, respectively, the then
outstanding shares of common stock of the corporation
resulting from such Business Combination or the combined
voting power of the then outstanding voting securities of such
corporation except to the extent that such ownership existed
prior to the Business Combination and (iii) at least a
majority of the members of the board of directors of the
corporation resulting from such Business Combination were
members of the Incumbent Board at the time of the execution of
A-5
<PAGE> 6
the initial agreement, or of the action of the Board of
Directors, providing for such Business Combination; or
"(4) approval by the stockholders of the Corporation
of a complete liquidation or dissolution of the Corporation.
"(B) "Disinterested Director" means a director of the
Corporation who is not and was not a party to the matter in respect of
which indemnification is sought by the claimant.
"(C) "Independent Counsel" means a law firm, a member of a law
firm, or an independent practitioner, that is experienced in matters of
corporation law and shall include any person who, under the applicable
standards of professional conduct then prevailing, would not have a
conflict of interest in representing either the Corporation or the
claimant in an action to determine the claimant's rights under this
Article V."
19. A NEW SECTION 13 IS ADDED TO ARTICLE V, WHICH SHALL READ
IN ITS ENTIRETY AS FOLLOWS:
"SECTION 13. NOTICE. Any notice, request or other
communication required or permitted to be given to the Corporation
under this Article V shall be in writing and either delivered in person
or sent by telecopy, telex, telegram, overnight mail or courier
service, or certified or registered mail, postage prepaid, return
receipt requested, to the Secretary of the Corporation and shall be
effective only upon receipt by the Secretary."
1. Section 1 of Article IX is hereby amended by deleting from
the third sentence thereof the words "entire Board" and inserting thereat the
words "Whole Board".
A-6
<PAGE> 1
EXHIBIT 3b
AMENDED AND RESTATED BY-LAWS
OF
THE GEON COMPANY
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C> <C> <C>
ARTICLE 1. STOCKHOLDERS...................................................................... 1
Section 2. Annual Meeting.......................................................... 1
Section 3. Special Meetings........................................................ 1
Section 4. Notice of Meetings...................................................... 1
Section 5. Quorum and Adjournment.................................................. 2
Section 6. Organization of Meetings................................................ 2
Section 7. Voting ................................................................. 2
Section 8. Inspectors of Election.................................................. 3
Section 9. Action by Consent....................................................... 3
Section 10. Introduction of Business at a Meeting
of Stockholders................................................ 3
ARTICLE 11. CAPITAL STOCK ................................................................... 6
Section 12. Certificates............................................................ 6
Section 13. Transfer................................................................ 7
Section 14. Record Dates............................................................ 7
Section 15. Lost Certificates....................................................... 7
ARTICLE 16. DIRECTORS.......................................................................8
Section 17. Responsibilities........................................................ 8
Section 18. Number and Term......................................................... 8
Section 19. Quorum ................................................................. 8
Section 20. Vacancies............................................................... 8
Section 21. Nomination of Directors................................................. 8
Section 22. Meetings................................................................ 9
Section 23. Notice ................................................................. 9
Section 24. Committees.............................................................. 9
Section 25. Action by Consent....................................................... 10
Section 26. Compensation............................................................ 10
Section 27. Removal................................................................. 10
Section 28. Traveling Expenses...................................................... 10
ARTICLE 29. OFFICERS......................................................................11
Section 30. Titles and Election..................................................... 11
Section 31. Terms of Office......................................................... 11
Section 32. Removal................................................................. 11
Section 33. Resignations............................................................ 11
Section 34. Vacancies............................................................... 11
Section 35. Chairman of the Board................................................... 11
Section 36. Vice Chairman of the Board.............................................. 11
Section 37. President............................................................... 12
Section 38. Chief Executive Officer................................................. 12
Section 39. Vice-President.......................................................... 12
Section 40. Secretary............................................................... 13
Section 41. Treasurer............................................................... 13
Section 42. Duties of Officers may be Delegated..................................... 13
</TABLE>
(2)
<PAGE> 3
<TABLE>
<S> <C> <C> <C>
ARTICLE 43. INDEMNIFICATION.................................................................. 13
Section 44. Actions by Others....................................................... 13
Section 45. Actions by or in the Right of the
Corporation.................................................... 14
Section 46. Successful Defense...................................................... 15
Section 47. Specific Authorization.................................................. 15
Section 48. Advance of Expenses..................................................... 15
Section 49. Right of Indemnity not Exclusive........................................ 16
Section 50. Insurance............................................................... 16
Section 51. Preclusion.............................................................. 17
Section 51. Right of Indemnity not Exclusive........................................ 17
Section 52. Insurance............................................................... 17
Section 53. Invalidity of any Provisions of
this Article................................................... 17
Section 54. Definitions............................................................. 17
Section 55. Notice ................................................................. 20
ARTICLE 56. WAIVER OF NOTICE................................................................. 20
Section 57. Waiver of Notice........................................................ 20
ARTICLE 58. CHECKS, NOTES, ETC............................................................... 20
Section 59. Checks, Notes, Etc...................................................... 20
ARTICLE 60. MISCELLANEOUS PROVISIONS......................................................... 21
Section 61. Offices................................................................. 21
Section 62. Fiscal Year............................................................. 21
Section 63. Corporate Seal.......................................................... 21
Section 64. Books ................................................................. 21
Section 65. Voting of Stock......................................................... 21
ARTICLE 66. AMENDMENTS...................................................................... 22
Section 67. Amendments.............................................................. 22
</TABLE>
(3)
<PAGE> 4
BY-LAWS
OF
THE GEON COMPANY
Article 68.
STOCKHOLDERS
Section 69. Annual Meeting. The annual meeting of the
stockholders of the Corporation, for the election of Directors and for the
transaction of such other business as may properly come before the meeting,
shall be held either within or without the State of Delaware, at such place as
the Board of Directors may designate in the call or in a waiver of notice
thereof, on such date as the Directors may determine from time to time each year
beginning with the year 1994 (or if such day be a legal holiday, then on the
next succeeding day not a holiday). The Board of Directors acting by resolution
may postpone and reschedule any previously scheduled annual meeting of
stockholders.
Section 70. Special Meetings. Special meetings of the
stockholders may be called by the Chief Executive Officer or by the Board of
Directors, pursuant to a resolution adopted by a majority of the total number of
directors which the Board of Directors would have if there were no vacancies
(the "Whole Board"), at such times and at such place either within or without
the State of Delaware as may be stated in the call or in a waiver of notice
thereof.
Section 71. Notice of Meetings. Notice of the time, place and
purpose of every meeting of stockholders shall be delivered personally or mailed
not less than ten (10) days nor more than sixty (60) days before the date fixed
for such meeting to each stockholder of record entitled to vote, at his post
office address appearing upon the records of the Corporation or at such other
address as shall be furnished in writing by him to the corporation for such
purpose. Such further notice shall be given as may be required by law or by
these By-Laws. Any meeting may be held without notice if all stockholders
entitled to vote are present, in person or by proxy, of if notice is waived in
writing, either before or after the meeting, by those not present. Any special
meeting of the stockholders may be cancelled by resolution of the Whole Board
upon public notice given prior to the date previously scheduled for such meeting
of the stockholders.
Section 72. Quorum and Adjournment. At all meetings of
stockholders, annual or special, other than meetings a quorum at which is fixed
by statute, and except as otherwise provided by these By-Laws, in order to
constitute a quorum there shall be present, either in person or by proxy, the
holders of record of at least a majority of the shares of the stock of the
Corporation, issued and outstanding and entitled to vote at such meeting. The
stockholders present at a duly called meeting at which a quorum is present may
continue to transact business until adjournment, notwithstanding the withdrawal
of holders of a sufficient number of shares such that less than a quorum
remains. The chairman of the meeting or a majority of the shares so represented
may adjourn the meeting from time to time, whether or not there is a quorum
present. No notice of the time and place of adjourned meetings need be given
except as required by law.
Section 73. Organization of Meetings. Meetings of the
stockholders shall be presided by the Chairman of the Board, if there be one, or
if he is not present by the President, or if he is not present, by a chairman to
be chosen at the meeting. The Secretary of the Corporation, or in the Secretary
of the Corporation's absence an Assistant Secretary, shall act as Secretary of
the meeting, if present.
-1-
<PAGE> 5
Section 74. Voting. Except as otherwise provided by statute or
the Certificate of Incorporation, each stockholder of record entitled to vote
shall be entitled at every meeting of stockholders to one vote, either in person
or by proxy executed in writing by the stockholder or by the stockholder's duly
authorized attorney, for each share of such stock standing in his name on the
records of the Corporation. Elections of directors shall be determined by a
plurality of the votes cast and, except as otherwise provided by statute, the
Certificate of Incorporation, or these By-Laws, all other action shall be
determined by a majority of the votes cast at such meeting.
At all elections of directors, the voting shall be by ballot
or in such other manner as may be determined by the stockholders present in
person or by proxy entitled to vote at such election. With respect to any other
matter presented to the stockholders for their consideration at a meeting, any
stockholder entitled to vote may, on any question, demand a vote by ballot.
A complete list of the stockholders entitled to vote at each
such meeting, arranged in alphabetical order, with the address of each, and the
number of shares registered in the name of each stockholder, shall be prepared
by the Secretary and shall be open to the examination by any stockholder, for
any purpose germane to the meeting, during ordinary business hours, for a period
of at least ten days prior to the meeting, either at a place within the city
where the meeting is to be held, which place shall be specified in the notice of
the meeting, or, if not so specified, at the place where the meeting is to be
held. The list shall also be produced and kept at the time and place of the
meeting during the whole time thereof, and may be inspected by any stockholder
who is present.
Section 75. Inspectors of Election. The Board of Directors
prior to any meeting of stockholders shall appoint two Inspectors of Election to
act at the meeting or any adjournment thereof. In the event of the failure of
the Board of Directors to make such appointment or if any Inspector of Election
shall for any reason fail to attend and to act at such meeting, the chairman of
the meeting shall appoint one or more Inspectors of Election. Each Inspector of
Election, before entering upon the discharge of his duties, shall take and sign
an oath faithfully to execute the duties of Inspector of Election at such
meeting with strict impartiality and according to the best of his ability. If
appointed, Inspectors of Election shall take charge of the polls and, when the
vote is completed, shall make a certificate of the result of the vote taken and
of such other facts as may be required by law.
Section 76. Action by Consent. Any action required or
permitted to be taken at any meeting of stockholders may be taken without a
meeting, with or without prior notice and with or without a vote, only if, prior
to such action, a written consent or consents thereto, setting forth such
action, is signed by the holders of record of all of the shares of the stock of
the Corporation, issued and outstanding and entitled to vote thereon.
Section 77. Introduction of Business at a Meeting of
Stockholders.
78. Annual Meetings of Stockholders.
a) Nominations of persons for election to the Board of
Directors of the Corporation and the proposal of business to be
considered by the stockholders may be made at an annual meeting of the
stockholders (a) pursuant to the Corporation's notice of meeting, (b)
by or at the direction of the Board of Directors or (c) by any
stockholder of the Corporation who was a stockholder of record at the
time of giving notice provided for in this By-Law, who is entitled to
vote at the meeting and who complied with the notice procedures set
forth in this Section 9.
-2-
<PAGE> 6
b) For nominations or other business to be properly brought
before an annual meeting by a stockholder pursuant to clause (c) of
paragraph (A)(1) of this Section 9, the stockholder must have given
timely notice thereof in writing to the Secretary of the Corporation.
To be timely, a stockholder's notice shall be delivered to the
Secretary at the principal executive offices of the Corporation not
less than sixty (60) days nor more than ninety (90) days prior to the
first anniversary of the preceding year's annual meeting; provided,
however, that in the event that the date of the annual meeting is
advanced by more than thirty (30) days or delayed by more than sixty
(60) days from such anniversary date, notice by the stockholder to be
timely must be so delivered not earlier than the 90th day prior to such
annual meeting and not later than the close of business on the 60th day
prior to such annual meeting or the 10th day following the day on which
public announcement of the date of such meeting is first made. Such
stockholder's notice shall set forth (a) as to each person whom the
stockholder proposes to nominate for election or reelection as a
director, the name, age, principal occupations and employment during
the past five years, name and principal business of any corporation or
other organization in which such occupations and employment were
carried on, a brief description of any arrangement or understanding
between such person and any other person(s) (naming such person(s))
pursuant to which he was or is to be selected as a nominee, and the
written consent of such person(s) to serve as a director if elected;
(b) as to any other business that the stockholder proposes to bring
before the meeting, a brief description of the business desired to be
brought before the meeting, the reasons for conducting such business at
the meeting and any material interest in such business of such
stockholder and beneficial owner, if any, on whose behalf the proposal
is made; (c) as to the stockholder giving the notice and the beneficial
owner, if any, on whose behalf the nomination or proposal is made (i)
the name and address of such stockholder, as they appear on the
Corporation's books, of such beneficial owner and any other
stockholders believed by such stockholder to be supporting such
nominee(s) or other business and (ii) the class and number of shares of
the Corporation which are owned beneficially and of record by such
stockholder, such beneficial owner and any other stockholders believed
by such stockholder to be supporting such nominee(s) or other business.
c) Notwithstanding anything in the second sentence of
paragraph (A)(2) of this Section 9 to the contrary, in the event that
the number of directors to be elected to the Board of Directors of the
Corporation is increased and there is no public announcement naming all
of the nominees for Director or specifying the size of the increased
Board of Directors made by the Corporation at least seventy (70) days
prior to the first anniversary of the preceding year's annual meeting,
a stockholder's notice required by this Section 9 shall also be
considered timely, but only with respect to nominees for any new
positions created by such increase, if it shall be delivered to the
Secretary as the principal executive offices of the Corporation not
later than the close of business on the 10th day following the day on
which such public announcement is first made by the Corporation.
1. Special Meetings of Stockholders. Only such business shall
be conducted at a special meeting of stockholders as shall have been brought
before the meeting pursuant to the Corporation's notice of meeting. Nominations
of persons for election to the Board of Directors may be made at a special
meeting of stockholders at which directors are to be elected pursuant to the
Corporation's notice of meeting (a) by or at the direction of the Board of
Directors or (b) provided that the Board of Directors has determined that
directors shall be elected at such special meeting, by any stockholder of the
Corporation who is a stockholder of record at the time of giving of notice
provided for in this Section 9, who shall be entitled to vote at the meeting and
who complies with the notice procedures set forth in this Section 9. In the
event the Corporation calls a special meeting of stockholders for the purpose
-3-
<PAGE> 7
of electing one or more directors, any such stockholder may nominate a person or
persons (as the case may be), for election to such position(s) as specified in
the Corporation's notice of meeting, if the stockholder's notice required by
paragraph (A)(2) of this Section 9 shall be delivered to the Secretary at the
principal executive offices of the Corporation not earlier than the 90th day
prior to such special meeting and not later than the close of business on the
later of the 60th day prior to such special meeting or the 10th day following
the day on which public announcement is first made of the date of the special
meeting and of the nominees proposed by the Board of Directors to be elected at
such meeting.
d) General. Only such persons who are nominated in accordance
with the procedures set forth in this Section 9 shall be eligible to
serve as directors and only such business shall be conducted at a
meeting of stockholders as shall have been brought before the meeting
in accordance with the procedures set forth in this Section 9. The
Chairman of the meeting shall have the power and duty to determine
whether a nomination or any business proposed to be brought before the
meeting was made in accordance with the procedures set forth in this
Section 9 and, if any proposed nomination or business is not in
compliance with this Section 9 of these By-Laws, to declare that such
defective proposal shall be disregarded.
e) For purposes of this Section 9, "public announcement" shall
mean disclosure in a press release reported by the Dow Jones News
Service, Associated Press or comparable national news service or in a
document publicly filed by the Corporation with the Securities and
Exchange Commission pursuant to Sections 13, 14 or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") or any
successor provisions.
f) Notwithstanding the foregoing provisions of this Section 9,
a stockholder shall also comply with all applicable requirements of the
Exchange Act and the rules and regulations thereunder with respect to
the matters set forth in this Section 9. Nothing in this Section 9
shall be deemed to affect any rights of stockholders to request
inclusion of a proposal in the Corporation's proxy statement pursuant
to Rule 14a-8 under the Exchange Act (or any similar provision).
Article
CAPITAL STOCK
Section 2. Certificates. The interest of each stockholder of
the Corporation shall be evidenced by certificates for shares of stock in such
form as the Board of Directors may from time to time prescribe. Certificates of
stock shall be numbered and registered in the order in which they are issued and
shall be signed by the Chairman of the Board, a Vice Chairman of the Board, the
Chief Executive Officer, the President or a Vice-President and by the Secretary
or Treasurer or by an Assistant Secretary or an Assistant Treasurer, and sealed
with the seal of the Corporation or a facsimile thereof. The signatures of the
officers upon a certificate may be facsimiles if: (i) the certificate is
countersigned by a transfer agent or registered by a registrar other than the
Corporation or its employee, or (ii) the shares are listed on a registered
national security exchange. In case any officer or officers who shall have
signed, or whose facsimile signature or signatures shall have been used on, any
such certificate because of death, resignation or otherwise, before such
certificate or certificates, shall have been delivered by the Corporation, such
certificate or certificates may nevertheless be adopted by the Corporation and
be issued and delivered as though the person or persons who signed such
certificate or certificates or whose facsimile signature or
-4-
<PAGE> 8
signatures shall have been used thereon had not ceased to be such officer or
officers of the Corporation.
Section 3. Transfer. The shares of stock of the Corporation
shall be transferred only upon the books of the Corporation by the holder
thereof in person or by his attorney, upon surrender for cancellation of
certificates for the same number of shares, with an assignment and power of
transfer endorsed thereon or attached thereto, duly executed, with such proof of
the authenticity of the signature as the Corporation or its agents may
reasonably require.
Section 4. Record Dates. Unless otherwise provided by statute
or by the Certificate of Incorporation, the Board of Directors may fix in
advance a date, not less than ten nor more than sixty days preceding the date of
any meeting of stockholders, or the date for the payment of any dividend, or the
date for the distribution or allotment of any rights, or the date when any
change, conversion or exchange of capital stock shall go into effect, as a
record date for the determination of the stockholders entitled to notice of, and
to vote at, any such meeting, or entitled to receive payment of any such
dividend, or to receive any distribution or allotment of such rights, or to
exercise the rights in respect of any such change, conversion or exchange of
capital stock, and in such case only such stockholders as shall be stockholders
of record on the date so fixed shall be entitled to such notice of, and to vote
at, such meeting, or to receive payment of such dividend, or to receive such
distribution or allotment or rights or to exercise such rights, as the case may
be, notwithstanding any transfer of any stock on the books of the Corporation
after any such record date fixed as aforesaid.
Section 5. Lost Certificates. In the event that any
certificate of stock is lost, stolen, destroyed or mutilated, the Board of
Directors may authorize the issuance of a new certificate of the same tenor and
for the same number of shares in lieu thereof. The Board of Directors may in its
discretion, before the issuance of such new certificate, require the owner of
the lost, stolen, destroyed or mutilated certificate, or the legal
representative of the owner to make an affidavit or affirmation setting forth
such facts as to the loss, destruction or mutilation as it deems necessary, and
to give the Corporation a bond in such reasonable sum as it directs to indemnify
the Corporation.
Article 6.
DIRECTORS
Section 7. Responsibilities. The business of the Corporation
shall be managed under the direction of the Board of Directors.
Section 8. Number and Term. The Board of Directors of the
Corporation shall consist of not less than three (3) nor more than twenty-one
(21) persons as determined by the Board of Directors from time to time. The
number of directors may be changed by a resolution passed by a majority of the
Whole Board or by a vote of the holders of record of at least a majority of the
shares of stock of the Corporation, issued and outstanding and entitled to vote.
No decrease in the Board shall shorten the term of any incumbent Director.
Section 9. Quorum. At any meetings of the Board of Directors,
regular or special, a majority of the members of the Board of Directors then
holding office (but not less than one-third of the total number of directors nor
less than two directors) shall constitute a quorum for the transaction of
business, but if at any meeting of the Board there shall be less than a quorum
present, a majority of those present may adjourn the meeting from time to time
until a quorum shall have been obtained.
-5-
<PAGE> 9
Section 10. Vacancies. Whenever any vacancy shall have
occurred in the Board of Directors, by reason of death, resignation, or
otherwise, other than removal of a director with or without cause by a vote of
the stockholders, it shall be filled by a majority vote of the remaining
directors, though less than a quorum (except as otherwise provided by law), and
the person so chosen shall hold office until the next annual election and until
his or her successor is duly elected and has qualified.
Section 11. Nomination of Directors. The Board of Directors,
in recommending nominees for election by the stockholders to the Board of
Directors and in electing members to fill vacancies occurring in the Board of
Directors, will not nominate an individual for election at an annual meeting
who, prior to such annual meeting, will attain age 70, and to fill a vacancy
will not elect an individual who has attained age 70; provided, however, that
the provisions of this Section 5 may be waived with respect to any nominee by a
majority of the Directors, excluding such nominee, if such nominee is then a
Director.
Section 12. Meetings. Meetings of the Board of Directors shall
be held at such place either within or without the State of Delaware, as may
from time to time be fixed by resolution of the Board, or as may be specified is
the call or in a waiver of notice thereof. Regular meetings of the Board of
Directors shall be held at such times as may from time to time be fixed by
resolution of the Board, except that a regular meeting of the Board of Directors
shall be held following the adjournment of and on the same date as the annual
meeting of stockholders and at such meeting the Board may elect or appoint
officers of the Corporation. Special meetings of the Board of Directors may be
called by the Chairman of the Board, a Vice Chairman of the Board, the Chief
Executive Officer or the President. The Secretary shall call Special Meetings of
the Board of Directors when requested in writing so to do by any three members
thereof.
Any one or more members of the Board of Directors or any
Committee of the Board of Directors may participate in a meeting of the Board of
Directors or such Committee by means of a conference telephone or similar
communications equipment allowing all persons participating in the meeting to
hear each other at the same time. Participation by such means shall constitute
presence in person at a meeting.
Section 13. Notice. Notice of any special meeting of the Board
of Directors may be served not less than two days before the date and time fixed
for such meeting, by oral, written or electronic communication stating the time,
place and purpose thereof or if by mail not less than three days before the date
fixed for such meeting. Any oral notice may be given to each member of the Board
of Directors at his or her office or his or address as it appears on the books
of the Corporation, whether or not the director is present personally to receive
it. Any written or electronic notice shall be addressed to each member of the
Board of Directors at his or her office or his or her address as it appears on
the books of the Corporation. A meeting of the Board may be held without notice
immediately after the annual meeting of stockholders at the same place at which
such meeting was held. Notice need not be given of regular meetings of the
Board. Any meeting may be held without notice, if all directors are present, or
if notice is waived in writing, either before or after the meeting, by those not
present.
Section 14. Committees. The Board of Directors may, in its
discretion, by resolution passed by a majority of the Whole Board, designate
from among its members one or more committees which shall consist of two or more
directors. The Board may designate one or more directors as alternate members of
any such committee, who may replace any absent or disqualified member at any
meeting of the committee. Such committees shall exercise such powers and duties
as shall be
-6-
<PAGE> 10
conferred or authorized by the resolution appointing them or as the Board from
time to time may prescribe. A majority of any such committee may determine its
action and fix the time and place of its meetings, unless the Board of Directors
shall otherwise provide. The Board shall have power at any time to change the
membership of any such committee, to fill vacancies in it, or to dissolve it.
Section 15. Action by Consent. Any action required or
permitted to be taken at any meeting of the Board of Directors, or of any
committee thereof, may be taken without a meeting, if a written consent or
consents thereto is signed by all members of the Board, or of such committee as
the case may be, and such written consent or consents is filed with the minutes
of proceedings of the Board or committee.
Section 16. Compensation. The Board of Directors may
determine, from time to time, the amount of compensation which shall be paid to
its members. The Board of Directors shall also have power, in its discretion, to
allow a fixed sum and expenses for attendance at each regular or special meeting
of the Board, or of any committee of the Board; in addition the Board of
Directors shall also have power, in its discretion, to provide for and pay to
directors rendering services to the Corporation not ordinarily rendered by
directors, as such, special compensation appropriate to the value of such
services, as determined by the Board from time to time.
Section 17. Removal. Any one or more of the directors of the
Corporation may be removed at any time, with or without cause, by a vote of the
holders of record of at least a majority of the shares of stock of the
Corporation, issued and outstanding and entitled to vote. The term of the
director or directors who shall have been so removed, shall thereupon terminate
and there shall be a vacancy or vacancies in the Board of Directors, to be
filled as provided in these By-Laws.
Section 18. Traveling Expenses. A Director attending any
meeting of the Board of Directors shall be allowed any proper expenses incurred
in attending such meeting.
Article 19.
OFFICERS
Section 20. Titles and Election. The Board of Directors may
elect from its number a Chairman of the Board and one or more Vice Chairmen of
the Board and shall elect a President and may elect one or more Vice-Presidents,
a Secretary, a Treasurer, and a Controller, and may appoint such other officers
as it may deem appropriate. All officers shall serve during the pleasure of the
Board. The Board of Directors may create such other offices as it may determine
and appoint officers to fill such offices, fill vacancies in any office,
delegate to one or more officers any of the duties of any officer or officers,
and prescribe the duties of any officers. Any number of offices may be held by
the same person.
Section 21. Terms of Office. The officer shall hold office
until their successors are chosen and qualify.
Section 22. Removal. Any officer may be removed, either with
or without cause, at any time, by the affirmative vote of a majority of the
Board of Directors.
Section 23. Resignations. Any officer may resign at any time
by giving written notice to the Board of Directors or to the Secretary. Such
resignation shall
-7-
<PAGE> 11
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 24. Vacancies. If the office of any officer or agent
becomes vacant by reason of death, resignation, retirement, disqualification,
removal from office or otherwise, the directors may choose a successor, who
shall hold office for the unexpired term in respect of which such vacancy
occurred.
Section 25. Chairman of the Board. The Chairman of the Board,
if there be one, shall preside at all meetings of stockholders, of the Board of
Directors and shall have such other authority and perform such other duties as
are prescribed by these By-Laws and by the Board of Directors.
Section 26. Vice Chairman of the Board. Each Vice Chairman of
the Board, if he or she is not the Chief Executive Officer, shall have such
authority and perform such duties as may be prescribed by these By-Laws and the
Chief Executive Officer. A Vice Chairman of the Board, if he or she is the Chief
Executive Officer, shall have such authority and perform such duties as are
prescribed by these By-Laws and by the Board of Directors. The Vice Chairman of
the Board (or, if there be more than one, the Vice Chairman of the Board in the
order designated by the Board of Directors), in the absence or disability of the
Chairman of the Board and the President, shall preside at all meetings of the
stockholders, of the Board of Directors and, unless there is a different
Chairman of the Executive Committee, of the Executive Committee.
Section 27. President. The President, if he or she is not the
Chief Executive Officer, shall have such authority and perform such duties as
may be prescribed by these By-Laws and the Chief Executive Officer. The
President, if he or she is the Chief Executive Officer, shall have such
authority and perform such duties as are prescribed by these By-Laws and by the
Board of Directors. The President, in the absence or disability of the Chairman
of the Board or any Vice Chairman, shall preside at all meetings of the
stockholders and of the Board of Directors.
Section 28. Chief Executive Officer. The Board of Directors
shall designate the Chairman of the Board, a Vice Chairman of the Board, or the
President as Chief Executive Officer. Such Chief Executive Officer shall have
the general management and control of the affairs and business of the
Corporation, subject to the Board of Directors. Subject to action by the Board
of Directors, he or she may appoint and discharge agents and employees and fix
their compensation; and he or she shall see that all orders and resolutions of
the Board of Directors are carried into effect. He or she shall have the power
to execute bonds, mortgages and other contracts, agreements and instruments of
the Corporation, and shall do and perform such other duties as are incident to
his or her office or as from time to time may be assigned to him by the Board of
Directors or which are or may at any time be authorized or required by law.
In the absence or disability of the officer designated as
Chief Executive Officer, one of the other aforementioned officers (Chairman of
the Board, Vice Chairman of the Board, or President), as determined by the Board
of Directors, shall perform any and all of the duties of the Chief Executive
Officer. Subject to limitations or procedures established by the Board of
Directors, the Chief Executive Officer may delegate from time to time his or her
authority to act.
Section 29. Vice-President. Each Vice-President shall have the
powers and duties incident to that office and shall have such other powers and
duties as are prescribed by the By-Laws and from time to time by the Chief
Executive Officer.
Section 30. Secretary. The Secretary shall be ex-officio
Secretary of the Board of Directors and, unless otherwise determined by the
Committees, of all
-8-
<PAGE> 12
standing Committees. He or she shall keep the minutes of all meetings of the
stockholders, the Board of Directors and of all standing Committees and attend
to serving and giving all notices of the Corporation. He or shall have the
charge of the corporate seal, the stock certificate books and such other books,
records, and papers as the Board of Directors may direct, cause to be kept a
stock record containing the names alphabetically arranged of all persons who are
stockholders of the Corporation, showing their place of residence, the number of
shares of stock held by them respectively, the time when they respectively
became owners thereof, and the amount paid thereon and shall perform such other
duties as may be incident to his or her office.
Section 31. Treasurer. The Treasurer shall keep or cause to be
kept full and accurate accounts of all receipts and disbursements in books
belonging to the Corporation, and shall have the care and custody of all funds
and securities of the Corporation and deposit such funds in the name of the
Corporation in such bank or banks as the Board of Directors or the Chief
Executive Officer may authorize. He or she shall disburse the funds of the
Corporation as may be ordered by the Board of Directors or the Chief Executive
Officer, taking proper vouchers for such disbursements, and shall render to the
Board of Directors an account of all of his or her transactions as Treasurer and
of the financial condition of the Corporation as such is required from time to
time; and he or she shall perform such other duties as are prescribed by these
By-Laws and as are incident to his or her office.
Section 32. Duties of Officers may be Delegated. In case of
the absence or disability of any officer of the Corporation, or for any other
reason that the Board may deem sufficient, the Board may delegate, for the time
being, the powers or duties, or any of them, of such officer to any other
officer, or to any director.
Article 33.
INDEMNIFICATION
Section 34. Actions by Others. The Corporation (1) shall
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action by or in
the right of the Corporation) by reason of the fact that he is or was a director
or an officer of the Corporation and (2) except as otherwise required by Section
3 of this Article V, may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Corporation) by reason of the
fact that he is or was an employee or agent of the Corporation, or is or was
serving at the request of the Corporation as a director, officer, employee,
agent of or participant in another corporation, partnership, joint venture,
trust or other enterprise, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him in connection with such action, suit or proceeding if he acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the Corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the Corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
Section 35. Actions by or in the Right of the Corporation. The
Corporation shall indemnify any person who was or is a party or is threatened to
be
-9-
<PAGE> 13
made a party to any threatened, pending or completed action or suit by or in the
right of the Corporation to procure a judgment in its favor by reason of the
fact that he or she is or was a director or officer of the Corporation, and the
Corporation may indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action or suit by or in
the right of the Corporation to procure a judgment in its favor by reason of the
fact that he or she is or was an employee or agent of the Corporation or is or
was serving at the request of the Corporation as a director, officer, employee,
agent of or participant in another corporation, partnership, joint venture,
trust or other enterprise against expenses (including attorneys' fees) actually
and reasonably incurred by him or her in connection with the defense or
settlement of such action or suit if he or she acted in good faith and in a
manner he or she reasonably believed to be in or not opposed to the best
interests of the Corporation and except that no indemnification shall be made in
respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable for negligence or misconduct in the performance of his or
her duty to the Corporation unless and only to the extent that the Delaware
Court of Chancery or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Delaware Court of Chancery or
such other court shall deem proper.
Section 36. Successful Defense. To the extent that a person
who is or was a director, officer, employee or agent of the Corporation has been
successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in Section 1 or Section 2 of this Article, or in defense
of any claim, issue or matter therein, he shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
Section 37. Right to Indemnification. The right to
indemnification conferred in this Article V 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, such expenses
to be paid by the Corporation within 20 days after the receipt by the
Corporation of a statement or statements from the claimant requesting such
payment or payments of expenses from time to time; provided, however, that if
the General Corporation Law of the State of Delaware requires, the payment of
such expenses incurred by a director or officer in his or her capacity as a
director or officer (and not in any other capacity in which service was or is
rendered by such person while a director or officer, including, without
limitation, service to an employee benefit plan) in advance of the final
disposition of a proceeding, shall be made only upon delivery to 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 such director or
officer is not entitled to be indemnified under this Article V or otherwise.
Section 38. Specific Authorization. To obtain indemnification
under this Article V, a claimant shall submit to the Corporation a written
request, including therein or therewith such documentation and information as is
reasonably available to the claimant and is reasonably necessary to determine
whether and to what extent the claimant is entitled to indemnification. Any
indemnification under Section 1 or Section 2 of this Article V (unless ordered
by a court) shall be made by the Corporation only as authorized in the specific
case upon a determination that indemnification of the director, officer,
employee or agent is proper in the circumstances because he has met the
applicable standard of conduct set forth in said Sections 1 and 2. Such
determination shall be made by (a) the stockholders, (b) the Board of Directors
by a majority vote of a quorum consisting of Disinterested Directors, or (c) (1)
even if such quorum is not obtainable, if a quorum of Disinterested Directors so
directs or (2) if a Change of Control shall have occurred, by an Independent
Counsel in a written opinion, which Independent Counsel
-10-
<PAGE> 14
shall be selected by a majority vote of a quorum of Disinterested Directors or,
if a Change of Control shall have occurred, by the claimant. If it is so
determined that the claimant is entitled to indemnification, payment to the
claimant shall be made within 10 days after such determination.
Section 39. Suit Against Corporation. If a claim under Section
1 or 2 of this Article V is not paid in full by the Corporation within 30 days
after a written claim pursuant to Section 5 of this Article V 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 be entitled to be paid also the expense of
prosecuting such claim. It shall be a defense to any such action (other than an
action brought to enforce a claim for expenses incurred in defending any
proceeding in advance of its final disposition where the required undertaking,
if any is required, has been tendered to the Corporation) that the claimant has
not met the standard of conduct which makes it permissible under the General
Corporation Law of the State of Delaware or this Article V for the Corporation
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 Counsel or stockholders) to have
made a determination prior to the commencement of such action that
indemnification of the claimant is proper in the circumstances because he or she
has met the applicable standard of conduct set forth in the General Corporation
Law of the State of Delaware or this Article V, nor an actual determination by
the Corporation (including its Board of Directors, Independent Counsel or
stockholders) that the claimant has not met such applicable standard of conduct,
shall be a defense to the action or create a presumption that the claimant has
not met the applicable standard of conduct.
Section 40. Corporation Bound. If a determination shall have
been made pursuant to Section 5 of this Article V that the claimant is entitled
to indemnification, the Corporation shall be bound by such determination in any
judicial proceeding commenced pursuant to Section 6 of this Article V.
Section 41. Preclusion. The Corporation shall be precluded
from asserting in any judicial proceeding commenced pursuant to Section 6 of
this Article V that the procedures and presumptions of this Article V are not
valid, binding and enforceable and shall stipulate in such proceeding that the
Corporation is bound by all the provisions of this Article V.
Section 42. Right of Indemnity not Exclusive. The
indemnification and advancement of expenses provided by this Article shall not
be deemed exclusive of any other rights to which those seeking indemnification
may be entitled under any by-law, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in his official capacity
and as to action in another capacity while holding such office, and shall
continue as to a person who has ceased to be a director, officer, employee or
agent and shall inure to the benefit of the heirs, executors and administrators
of such a person.
Section 43. Insurance. The Corporation may purchase and
maintain insurance on behalf of any person who is or was a director, officer,
employee or agent of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent of or participant in
another corporation, partnership, joint venture, trust or other enterprise
against any liability asserted against him and incurred by him any such
capacity, or arising out of his status as such, whether or not the Corporation
would have the power to indemnify him against such liability under the
provisions of this Article, Section 145 of the General Corporation Law of the
State of Delaware or otherwise.
-11-
<PAGE> 15
Section 44. Invalidity of any Provisions of this Article. The
invalidity or unenforceability of any provision of this Article V shall not
affect the validity or enforceability of the remaining provisions of this
Article V, and, to the fullest extent possible, such provisions of this Article
V (including, without limitation, each such portion of any Section of this
Article V containing any such provision held to be invalid, illegal or
unenforceable) shall be construed so as to give effect to the intent manifested
by the provision held invalid, illegal or unenforceable.
Section 45. Definitions. For purposes of this Article V:
(A) "Change of Control" means:
(1) the acquisition by any individual, entity or
group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act) (a "Person") of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) of voting securities
of the Corporation where such acquisition causes such Person to own 20%
or more of the combined voting power of the then outstanding voting
securities of the Corporation entitled to vote generally in the
election of directors (the "Outstanding Corporation Voting
Securities"); provided, however, that for purposes of this paragraph
(1), the following acquisitions shall not be deemed to result in a
Change of Control: (i) any acquisition directly from the Corporation,
(ii) any acquisition by the Corporation, (iii) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by the
Corporation or any corporation controlled by the Corporation or (iv)
any acquisition by any corporation pursuant to a transaction that
complies with clauses (i), (ii) and (iii) of paragraph (3) below;
provided, further, that if any Person's beneficial ownership of the
Outstanding Corporation Voting Securities reaches or exceeds 20% as a
result of a transaction described in clause (i) or (ii) above, and such
Person subsequently acquires beneficial ownership of additional voting
securities of the Corporation, such subsequent acquisition shall be
treated as an acquisition that causes such Person to own 20% or more of
the Outstanding Corporation Voting Securities; and provided, further,
that if at least a majority of the members of the Incumbent Board (as
defined below) determines in good faith that a Person has acquired
beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 20% or more of the Outstanding Corporation
Voting Securities inadvertently, and such Person divests as promptly as
practicable a sufficient number of shares so that such Person
beneficially owns (within the meaning of Rule 13d-3 promulgated under
the Exchange Act) less than 20% of the Outstanding Corporation Voting
Securities, then no Change of Control shall have occurred as a result
of such Person's acquisition; or
(2) individuals who, as of August 1, 1996, constitute
the Board of Directors (the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board of Directors; provided,
however, that any individual becoming a director subsequent to August
1, 1996, whose election, or nomination for election by the
Corporation's stockholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be
considered a member of the Incumbent Board, except that, for this
purpose, any such individual whose initial assumption of office occurs
as a result of an actual or threatened election contest with respect to
the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other
than the Board of Directors shall not be considered a member of the
Incumbent Board; or
(3) the consummation of a reorganization, merger or
consolidation or sale or other disposition of all or substantially all
of the assets of the
-12-
<PAGE> 16
Corporation or the acquisition of assets of another corporation
("Business Combination"); excluding, however, such a Business
Combination pursuant to which (i) all or substantially all of the
individuals and entities who were the beneficial owners of the
Outstanding Corporation Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly, more
than 60% of, respectively, the then outstanding shares of common stock
and the combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as the case
may be, of the corporation resulting from such Business Combination
(including, without limitation, a corporation that as a result of such
transaction owns the Corporation or all or substantially all of the
Corporation's assets either directly or through one or more
subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Business Combination of the Outstanding
Corporation Voting Securities, (ii) no Person (excluding any employee
benefit plan (or related trust) of the Corporation or such corporation
resulting from such Business Combination) beneficially owns, directly
or indirectly, 20% or more of, respectively, the then outstanding
shares of common stock of the corporation resulting from such Business
Combination or the combined voting power of the then outstanding voting
securities of such corporation except to the extent that such ownership
existed prior to the Business Combination and (iii) at least a majority
of the members of the board of directors of the corporation resulting
from such Business Combination were members of the Incumbent Board at
the time of the execution of the initial agreement, or of the action of
the Board of Directors, providing for such Business Combination; or
(4) approval by the stockholders of the Corporation of a
complete liquidation or dissolution of the Corporation.
(B) "Disinterested Director" means a director of the
Corporation who is not and was not a party to the matter in respect of which
indemnification is sought by the claimant.
(C) "Independent Counsel" means a law firm, a member of a law
firm, or an independent practitioner, that is experienced in matters of
corporation law and shall include any person who, under the applicable standards
of professional conduct then prevailing, would not have a conflict of interest
in representing either the Corporation or the claimant in an action to determine
the claimant's rights under this Article V.
Section 46. Notice. Any notice, request or other communication
required or permitted to be given to the Corporation under this Article V shall
be in writing and either delivered in person or sent by telecopy, telex,
telegram, overnight mail or courier service, or certified or registered mail,
postage prepaid, return receipt requested, to the Secretary of the Corporation
and shall be effective only upon receipt by the Secretary.
Article 47.
WAIVER OF NOTICE
Section 48. Waiver of Notice. Whenever under the provisions of
these By-Laws or of the General Corporation Law of the State of Delaware, the
Board of Directors or any Committee is authorized to take any action after
notice or after lapse of a prescribed period of time, such action may be taken
without notice and without the lapse of any period of time, if such action be
authorized or approved and the requirements waived by each member entitled to
notice. Such authorized or approval and such waiver shall be filed with the
Secretary of the Corporation.
-13-
<PAGE> 17
Article 49.
CHECKS, NOTES, ETC.
Section 50. Checks, Notes, Etc. Subject to limitations or
procedures established by the Board of Directors, all checks and drafts on the
Corporation's bank accounts and all bills of exchange and promissory notes, and
all acceptances, obligations and other instruments for the payment of money, may
be signed by the Chief Executive Officer or the Treasurer and may also be signed
by such other officer or officers, agent or agents, in the manner authorized
from time to time by the Board of Directors.
Article 51.
MISCELLANEOUS PROVISIONS
Section 52. Offices. The registered office of the Corporation
shall be located at the office of United States Corporation Company, in the City
of Dover, County of Kent, in the State of Delaware and said Company shall be the
registered agent of this Corporation in charge thereof. The Corporation may have
other offices either within or without the State of Delaware at such places as
shall be determined from time to time by the Board of Directors or as the
business of the Corporation may require.
Section 53. Fiscal Year. The fiscal year of the Corporation
shall be determined by the Board of Directors.
Section 54. Corporate Seal. The seal of the Corporation shall
be circular in form and contain the name of the Corporation, and the year and
state of its incorporation. Such seal may be altered from time to time at the
discretion of the Board of Directors.
Section 55. Books. There shall be kept at such office of the
Corporation as the Board of Directors shall determine, within or without the
State of Delaware, correct books and records of account of all its business and
transactions, minutes of the proceedings of its stockholders, Board of Directors
and committees, and the stock book, containing the names and addresses of the
stockholders, the number of shares of stock held by them, respectively, and the
dates when they respectively became the owners of record thereof, and in which
the transfer of stock shall be registered, and such other books and records as
the Board of Directors may from time to time determine.
Section 56. Voting of Stock. Unless otherwise specifically
authorized by the Board of Directors, all stock owned by the Corporation, other
than stock of the Corporation, shall be voted, in person or by proxy, by any
officer of the Corporation on behalf of the Corporation.
Article 57.
AMENDMENTS
Section 58. Amendments. The vote of the holders of at least a
majority of the shares of stock of the Corporation, issued and outstanding and
entitled to vote, shall be necessary at any meeting of stockholders to amend or
repeal these By-Laws or to adopt new by-laws. These By-Laws may also be amended
or repealed, or new by-laws adopted, at any meeting of the Board of Directors by
the vote of at least a
-14-
<PAGE> 18
majority of the Whole Board; provided that any by-law adopted by the Board may
be amended or repealed by the stockholders in the manner set forth above.
Any proposal to amend or repeal these By-Laws or to adopt new
by-laws shall be stated in the notice of the meeting of the Board of Directors
or the stockholders, or in the waiver of notice thereof, as the case may be,
unless all of the directors or the holders of record of all of the shares of
stock of the Corporation, issued and outstanding and entitled to vote, are
present at such meeting.
-15-
<PAGE> 1
EXHIBIT 11
(In millions, except per share data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
-------------------------- ----------------------
1996 1995 1996 1995
----------- ----------- --------- ---------
<S> <C> <C> <C> <C>
PRIMARY EARNINGS PER SHARE:
Number of Shares
----------------
Average shares outstanding 24.7 25.7 24.7 26.0
Net effect of dilutive stock options - based on treasury stock
method using average market price .5 .5 .5 .5
----------- ----------- --------- ---------
Total common and common equivalent shares outstanding 25.2 26.2 25.2 26.5
=========== =========== ========= =========
Net income (loss) per share $ .40 $ (.31) $ .18 $ .51
=========== =========== ========= =========
</TABLE>
The unaudited earnings per share for all periods presented were computed
based on the weighted average number of shares of common stock outstanding
and common stock equivalents. The dilutive effect of options is based on the
treasury stock method using the average market price for the period.
The market price of common stock on June 30, 1996 was below the average for
the three month and six month periods ended June 30, 1996. Therefore, in a
fully dilutive earnings per share calculation, the impact of stock options
would be anti-dilutive.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 11
<SECURITIES> 5
<RECEIVABLES> 134
<ALLOWANCES> 2
<INVENTORY> 93
<CURRENT-ASSETS> 272
<PP&E> 1,156
<DEPRECIATION> 709
<TOTAL-ASSETS> 754
<CURRENT-LIABILITIES> 205
<BONDS> 138
<COMMON> 3
0
0
<OTHER-SE> 202
<TOTAL-LIABILITY-AND-EQUITY> 754
<SALES> 558
<TOTAL-REVENUES> 558
<CGS> 546
<TOTAL-COSTS> 546
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6
<INCOME-PRETAX> 8
<INCOME-TAX> 3
<INCOME-CONTINUING> 5
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5
<EPS-PRIMARY> .18
<EPS-DILUTED> .18
</TABLE>
