SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended July, 29, 1995
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
_______ SECURITIES EXCHANGE ACT OF 1934
For the transition period from________to__________
Commission file number 1-5392
AMERICAN STORES COMPANY
(Exact name of registrant as specified in its charter)
Delaware 87-0207226
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
709 East South Temple
Salt Lake City, Utah 84102
(Address of principal executive offices) (Zip Code)
801-539-0112
(Registrant's telephone number, including area code)
None
(Former name, former address and former fiscal year, if changed since last
report)
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
APPLICABLE ONLY TO ISSUERS INVOLVED
IN BANKRUPTCY PROCEEDINGS DURING
THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes____ No____
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of August 25, 1995: Common Stock, Par Value $1.00 - 147,487,378
shares.
Part I. Financial Information
Item 1. Financial Statements
<TABLE>
AMERICAN STORES COMPANY
Consolidated Condensed Statements of Earnings
(unaudited)
(In thousands, except per share data)
<S> <C> <C>
Thirteen WeeksEnded
July 29, July 30,
1995 1994
Sales $4,494,890 $4,669,018
Cost of merchandise sold, including
warehousing and transportation expenses 3,300,899 3,436,515
Gross profit 1,193,991 1,232,503
Operating expenses 1,028,714 1,062,673
Operating profit 165,277 169,830
Other income (expense):
Interest expense (39,430) (44,882)
Other 3,188 (562)
Net other income (expense) (36,242) (45,444)
Earnings before income taxes 129,035 124,386
Federal and state income taxes 55,098 55,352
Net earnings $ 73,937 $ 69,034
Net earnings per share $0.50 $0.48
Average shares outstanding 148,318 142,745
Dividends per share $0.14 $0.12
______________________________________________________________________________
See accompanying notes to consolidated condensed financial statements.
AMERICAN STORES COMPANY
Consolidated Condensed Statements of Earnings
(unaudited)
(In thousands, except per share data)
Twenty-Six WeeksEnded
July 29, July 30,
1995 1994
Sales $8,857,127 $9,276,670
Cost of merchandise sold, including
warehousing and transportation expenses 6,502,691 6,824,366
Gross profit 2,354,436 2,452,304
Operating expenses 2,054,583 2,150,718
Operating profit 299,853 301,586
Other income (expense):
Interest expense (79,118) (89,634)
Other 2,336 (1,146)
Net other income (expense) (76,782) (90,780)
Earnings before income taxes 223,071 210,806
Federal and state income taxes 95,251 93,809
Net earnings $ 127,820 $ 116,997
Net earnings per share $0.87 $0.82
Average shares outstanding 147,249 142,682
Dividends per share $0.28 $0.24
______________________________________________________________________________
See accompanying notes to consolidated condensed financial statements.
AMERICAN STORES COMPANY
Consolidated Condensed Balance Sheets
(unaudited)
(In thousands of dollars)
July 29, January 28,
1995 1995
Current Assets:
Cash and cash equivalents $ 54,642 $ 195,689
Inventories 1,434,571 1,526,770
Other current assets 413,875 409,636
Total current assets 1,903,088 2,132,095
Property, plant and equipment, less
accumulated depreciation and amortization
of $1,998,279 on July 29, 1995 and
$1,904,474 on January 28, 1995 2,971,119 2,851,128
Goodwill 1,744,906 1,771,121
Other assets 290,808 277,222
Assets $6,909,921 $7,031,566
Current Liabilities:
Current maturities of long-term debt and
capital lease obligations $ 66,036 $ 141,214
Accounts payable 813,579 883,329
Other current liabilities 832,465 906,888
Total current liabilities 1,712,080 1,931,431
Long-term debt and obligations under capital
leases, less current maturities 2,042,082 2,064,077
Other liabilities 922,077 985,137
Shareholders' Equity - shares outstanding of
147,533,378 on July 29, 1995 and
142,971,062 on January 28, 1995 2,233,682 2,050,921
Liabilities and Shareholders' Equity $6,909,921 $7,031,566
______________________________________________________________________________
See accompanying notes to consolidated condensed financial statements.
AMERICAN STORES COMPANY
Consolidated Condensed Statements of Cash Flows
(unaudited)
(In thousands of dollars)
Twenty-Six Weeks Ended
July 29, July 30,
1995 1994
Cash Flows from Operating Activities:
Net earnings $ 127,820 $ 116,997
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Depreciation and amortization 200,119 199,354
Net (gain) loss on asset sales (2,006) 3,068
Changes in operating assets and liabilities (138,074) (121,932)
Total adjustments 60,039 80,490
Net cash provided by operating activities 187,859 197,487
Cash Flows from Investing Activities:
Expended for property, plant and equipment (315,309) (183,827)
Proceeds from sale of other assets 28,635 11,735
Net cash (used in) investing activities (286,674) (172,092)
Cash Flows from Financing Activities:
Net (decrease) increase in borrowings (97,173) 8,706
Issuance of shares related to conversion
of debt 120,311 0
Other changes in equity 11,076 10,120
Repurchase of common stock (34,874) 0
Cash dividends (41,572) (34,254)
Net cash (used in) financing activities (42,232) (15,428)
Net (decrease) increase in cash and
cash equivalents (141,047) 9,967
Cash and cash equivalents:
Beginning of year 195,689 59,580
End of quarter $ 54,642 $ 69,547
Supplementary Information - Statements of Cash Flows:
Cash paid during the year for:
Interest (net of amounts capitalized) $ 81,492 $ 89,867
Income taxes, net of refunds $ 91,839 $ 164,397
</TABLE>
AMERICAN STORES COMPANY
Notes to Consolidated Condensed Financial Statements
(unaudited)
July 29, 1995
Basis of Presentation
In the opinion of management, the accompanying unaudited consolidated condensed
financial statements contain all normal recurring adjustments necessary to
present fairly the financial position of American Stores Company and its
subsidiaries as of July 29, 1995 and January 28, 1995 and the results of its
operations for the thirteen weeks ended July 29, 1995 and July 30, 1994 and
results of operations and cash flows for the twenty-six weeks ended July 29,
1995 and July 30, 1994. The operating results for the interim periods are not
necessarily indicative of results for a full year. For a further discussion of
the Company's accounting policies, please refer to the Company's Form 10-K for
the fiscal year ended January 28, 1995.
Net Earnings Per Share
Earnings per share are determined by dividing the year-to-date weighted average
number of shares outstanding into net earnings. Common share equivalents in the
form of stock options are excluded from the calculation of primary earnings per
share since they have no material dilutive effect on per share figures.
Disposition of Operations
On September 8, 1994, the Company sold its 33-store Star Market food division
with a basis of $167.0 million for $288.0 million and the assumption of
substantially all of its outstanding liabilities. On January 19, 1995, the
Company sold 45 of its Acme Markets stores with a basis of $48.4 million for
$89.6 million.
Acquisition of Stores
On February 15, 1995, the Company acquired the seventeen stores operated by
Clark Drugs for $39.0 million. The transaction involved the transfer of $25.0
million of real property plus inventory and other items for fourteen owned
properties and three leased properties.
Conversion of Debt
On March 9, 1995, the Company completed the redemption of its $175 million 7-
1/4% Convertible Subordinated Notes due 2001. The Company issued 5.3 million
shares of common stock upon the conversion of $120.3 million principal amount of
Notes and the balance of approximately $54.7 million principal amount of Notes
was redeemed for cash.
Part I - Financial Information (continued)
Long-Term Debt Issuance
On May 15, 1995, the Company issued $200 million of 7.40% debentures due May 15,
2005, at 99.542 percent to yield 7.47%. The net proceeds of the offering were
used to refinance a portion of the Company's long-term indebtedness that was
repaid or redeemed over the last twelve months. The refinancing of this long-
term debt had been temporarily funded through short-term variable-rate
borrowings under the Company's principal bank credit agreement.
Repurchase of Common Stock
The Company repurchased 1.3 million shares of its common stock during the
quarter ended July 29, 1995 in accordance with its existing stock repurchase
program. The stock was repurchased at an average market price of $28.44 per
share. As of July 29, 1995 there remained an additional 2.7 million shares
authorized for repurchase under the program.
Part I - Financial Information (continued)
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Results of Operations
Total sales and the percentage change in comparable store sales for the second
quarter and first twenty-six weeks of 1995 and 1994 are set forth in the table
below. The decrease in second quarter and year-to-date 1995 total sales from
the prior year is primarily attributable to the disposition of the 33-store Star
Market food division in the third quarter of 1994 and the sale of 45 Acme
Markets stores (the disposed of operations) in the fourth quarter of 1994. The
increase in second quarter sales from continuing operations in 1995 is primarily
a result of increases in drug store operations due to higher pharmacy sales,
effective promotions, and the acquisition of seventeen Clark Drug stores on
February 15, 1995. Year-to-date sales from continuing operations reflect drug
store operations' increase in sales partially offset by a decline in sales in
the western food store operations due primarily to the impact of a nine-day
labor dispute in northern California in the first quarter of 1995.
<TABLE>
13 Weeks Ended 26 Weeks Ended
Comparable Store July 29, July 30, Comparable Store July 29, July 30,
% Change 1995 1994 % Change 1995 1994
<S> <C> <C> <C> <C> <C> <C>
Sales:
Eastern food operations 0.23% $1,513,302 $1,505,637 -0.13% $2,975,535 $2,986,158
Western food operations 0.25% 1,767,281 1,756,355 -0.92% 3,475,593 3,491,882
Drug store operations 5.46% 1,211,480 1,106,832 5.74% 2,400,961 2,198,606
Other 2,827 3,056 5,038 6,549
Continuing operations 4,494,890 4,371,880 8,857,127 8,683,195
Disposed of operations 0 297,138 0 593,475
Total sales 1.57% $4,494,890 $4,669,018 1.05% $8,857,127 $9,276,670
</TABLE>
Eastern food operations include Acme Markets and Jewel Food Stores.
Western food operations include Lucky Northern California Division, Lucky
Southern California Division, Jewel Osco Southwest and Super Saver.
Drug store operations include Osco Drug and Sav-on.
Comparable store sales include stores open one year or more and replacement
stores.
Gross profit as a percent of sales increased to 26.6% in the second quarter and
first twenty-six weeks of 1995, compared to 26.4% in the same periods of 1994.
Gross profit for the second quarter and twenty-six weeks year-to-date increased
as a percent of sales over the prior year primarily as a result of the disposed
of operations which netted lower gross margins in the prior year. This
improvement was partially offset by the drug store operations decrease in gross
profit percentage due to lower pharmacy gross margins caused by a shift from
cash customers to lower-margin third-party customers and Super Saver, the
Company's warehouse format, which typically generates lower gross profit than
traditional food and drug store formats. In addition, the year-to-date gross
profit as a percent to sales was impacted by a nine-day labor dispute in the
Western food operations in the first quarter of 1995.
Part I - Financial Information (continued)
Operating expense as a percent of sales increased to 22.9% in the second quarter
of 1995, compared to 22.8% in 1994. Operating expense as a percent of sales for
the first twenty-six weeks of 1995 remained flat compared to 1994 at 23.2%.
Second quarter and year-to-date operating expense as a percent of sales
decreased at all three operating regions due mainly to reduced costs including
self-insurance and health care costs and other effective cost control measures.
This decrease in operating costs was offset by the lower operating expenses of
the disposed of operations in the prior year and the cost of the Company's
reengineering efforts in the current year.
Total operating profit for the second quarter and first twenty-six weeks of 1995
and 1994 is set forth in the table below. Operating profit was 3.7% of sales in
the second quarter of 1995 and 3.6% of sales in the second quarter of 1994.
Second quarter operating profit from continuing operations increased 2.1% over
the prior year reflecting higher operating profits for the Company's food and
drug operations. Operating profit for the first twenty-six weeks of 1995 was
3.4% of sales compared to 3.3% of sales for the same period 1994. The 1995 year
-to-date operating profit in the western food operations was negatively impacted
by a nine-day labor dispute in northern California and losses incurred by Super
Saver. These decreases were partially offset by an increase in operating profit
in the Lucky Southern California Division.
<TABLE>
13 Weeks Ended 26 Weeks Ended
July 29, July 30, July 29, July 30,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Operating Profit:
Eastern food operations $ 66,473 $ 64,621 $122,949 $115,251
Western food operations 64,335 60,510 116,334 120,678
Drug store operations 61,402 59,059 114,179 107,101
LIFO (9,000) (10,000) (18,000) (20,000)
Purchase accounting amortization (19,227) (19,746) (38,485) (39,517)
Other 1,294 7,503 2,876 2,481
Continuing operations 165,277 161,947 299,853 285,994
Disposed of operations 0 7,883 0 15,592
Total operating profit $165,277 $169,830 $299,853 $301,586
</TABLE>
"Other" includes real estate operations in both 1995 and 1994.
"Other" for 1994 also includes costs related to the consolidation of the
information technology data centers and the Acme voluntary severance program.
Interest expense decreased in the second quarter and first twenty-six weeks of
1995 over the same periods in 1994 due to a lower average borrowing rate and the
continued reduction of long term debt. Long term debt was reduced using
proceeds from the disposed of operations and the shares issued upon conversion
of the Company's $175 million 7-1/4% Convertible Subordinated Notes.
Part I - Financial Information (continued)
The Company's effective income tax rates were 42.7% in 1995 compared to 44.5% in
the prior year. The current year effective tax rates are down due to higher
earnings in the current year and dispositions of assets in states with higher
tax rates in the prior year.
Net earnings per share amounted to $0.50 per share in the second quarter of 1995
compared to $0.48 per share in the same quarter of the prior year and $0.87 per
share in the first twenty-six weeks of 1995 compared to $0.82 per share for the
same period of 1994.
The Company recorded a charge to operating expenses of $23.9 million in 1994 for
centralization of information technology, accounting, real estate and
construction functions. This charge included $5.6 million related to
termination benefits of which $2.3 million has been paid in the twenty-six week
period ended July 29, 1995 and $3.9 million has been paid to date over the
course of the restructuring. It is estimated by the Company that 570 people
will be terminated over the course of the restructuring and 413 people have
been terminated to date. There have been no adjustments or revisions to the
original charge.
Liquidity and Capital Resources
Cash provided by operating activities decreased by $9.6 million in the first
twenty-six weeks of 1995 compared to the same period of 1994. The decrease is
due to changes in the components of working capital and is not indicative of
long-term trends. Cash and cash equivalents at the beginning of 1995 were higher
than the beginning of 1994 due to proceeds held in short-term investments from
the sale of disposed of operations.
Cash capital expenditures for the first twenty-six weeks of 1995 and 1994
amounted to $315.3 million and $183.8 million, respectively. Total capital
expenditures including the net present value of leases amounted to $353.6
million in 1995, compared to $189.7 million in 1994. For the first half of
1995, 14 new stores were opened, 15 stores were closed and 88 stores were
remodeled. The Company also acquired 17 Clark Drugs stores in California in the
first quarter of 1995.
On March 9, 1995, the Company completed the redemption of its $175 million
7-1/4% Convertible Subordinated Notes due 2001. The Company issued 5.3 million
shares of common stock upon the conversion of $120.3 million principal amount of
Notes and the balance of approximately $54.7 million principal amount of Notes
was redeemed for cash.
On May 15, 1995, the Company issued $200 million of 7.40% debentures due May 15,
2005, at 99.542 percent to yield 7.47%. The Company believes that its cash flow
from operations, supplemented by credit available under the Company's existing
credit facility, as well as its ability to refinance debt, will be adequate to
meet its presently identifiable cash requirements.
During the second quarter, the Company repurchased 1.3 million shares of its
common stock at an average market price of $28.44 under its existing stock
repurchase program.
Part I - Financial Information (continued)
The ratio of total debt (debt plus obligations under capital leases) to total
capitalization (total debt plus common shareholders' equity) amounted to 48.6%
at July 29, 1995 and 51.8% at January 28, 1995.
Contingencies
The Company has identified environmental contamination sites related primarily
to underground petroleum storage tanks at various store, warehouse, office and
manufacturing facilities (related to current operations as well as previously
disposed of businesses). Although the ultimate outcome and expense of
environmental remediation is uncertain, the Company believes that the required
costs of remediation and continuing compliance with environmental laws will
not have a material adverse effect on the financial condition or operating
results of the Company.
The Company, from time to time, has disposed of leased properties and may retain
certain contingent lease liabilities, either by contract or law. Although the
Company is unaware of any material assertions against it from such dispositions,
such claims may arise in the future. If such claims were asserted the expense
to the Company would consist of unpaid lease obligations, such as rents, which
may be offset by subletting the property, negotiating favorable lease
terminations, operating the facilities or applying existing reserves.
Part II - Other Information
Item 1.Legal Proceedings -- For a description of legal proceedings, please
refer to the footnote entitled "Legal Proceedings" contained in the
Notes to Consolidated Financial Statements section of the Company's Form
10-K for the fiscal year ended January 28, 1995.
The Company is also involved in various claims, administrative
proceedings and other legal proceedings which arise from time to time in
connection with the ordinary conduct of the Company's business.
Item 2. Changes in Securities -- None
Item 3. Defaults upon Senior Securities -- None
Part II - Other Information (continued)
Item 4.Submission of Matters to a Vote of Security Holders -- The Annual
Meeting of the Company's Shareholders was held June 21, 1995 at which
time the shareholders voted on the following matters:
Of the 129,407,370 total shares voted, the following number of shares
were cast to amend the Restated Certificate of Incorporation to provide
for the annual election of Directors: 124,761,055 votes to amend,
4,007,276 votes against amendment, 639,039 votes abstained and 5,123,567
shares were "broker non-votes". Of the 134,530,937 total shares voted,
the following number of shares were voted for the nominees for director:
Arden B. Engebretsen 133,813,158, Donald B. Holbrook 132,580,694, James
B. Fisher 133,814,155, Victor L. Lund 133,455,248, L. Tom Perry
133,648,517, J.L. Scott 132,689,816. Of the 134,530,937 total shares
voted, the following number of shares were cast to approve the American
Stores Company 1995 Employee Stock Purchase Plan: 128,804,126 votes
cast in favor of the proposal, 5,215,382 votes cast against the
proposal, and 511,429 votes abstained. Of the 134,530,937 total shares
voted, the following number of shares were cast to ratify the
appointment of Ernst & Young as the independent certified public
accountants to audit the accounts and records of the Company for the
fiscal year ending February 3, 1996: 134,017,874 votes ratified the
appointment, 231,376 votes were cast against the ratification, and
281,687 votes abstained.
Item 5.Other Information -- On July 10, 1995, Standard & Poor's raised its
rating on the Company's Senior debt to BBB+ from BBB and affirmed its A-
2 rating on the Company's commercial paper.
Item 6. Exhibits and Reports on Form 8-K --
(a) Exhibits --
3.2 The Company's Restated By-Laws.
11.1 Calculations of earnings per share.
27.1 Financial Data Schedule.
(b) Reports on Form 8-K filed during the quarter -- None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
American Stores Company
(Registrant)
Dated 9/12/95 /s/ Teresa Beck
Teresa Beck
Chief Financial Officer
(Principal Financial Officer)
Dated 9/12/95 /s/ Kathleen E. McDermott
Kathleen E. McDermott
Chief Legal Officer and Assistant Secretary
Dated 9/12/95 /s/ Bradley M. Vierig
Bradley M. Vierig
Senior Vice President and Controller
(Chief Accounting Officer)
Exhibit 11.1
AMERICAN STORES COMPANY
Calculation of Earnings Per Share
(unaudited)
(In thousands of dollars, except per share data)
<TABLE>
Thirteen Weeks Ended Twenty-Six Weeks Ended
July 29, July 30, July 29, July 30,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Primary Earnings Per Share
Primary earnings applicable to
shareholders $ 73,937 $ 69,034 $ 127,820 $116,997
Primary earnings per share $0.50 $0.48 $0.87 $0.82
Average shares outstanding 148,318 142,745 147,249 142,682
Fully Diluted Earnings Per Share
Earnings applicable to shareholders $ 73,937 $ 69,034 $ 127,820 $116,997
Plus interest on convertible debentures 0 1,903 0 3,806
Fully diluted earnings applicable to
shareholders $ 73,937 $ 70,937 $ 127,820 $120,803
Fully diluted earnings per share $0.50(1) $0.47(1) $0.86(1) $0.80(1)
Fully diluted average shares outstanding 149,011 151,211 147,945 151,205
Calculation of Fully Diluted Average Shares Outstanding
Effect of assumed exercise of stock options:
Proceeds from assumed exercise $ 45,541 $ 14,524 $ 36,649 $ 15,346
Shares under options outstanding 2,237 1,251 1,938 1,340
Shares assumed acquired with proceeds
under the treasury stock method (1,544) (563) (1,242) (595)
Incremental shares due to assumed
exercise of stock options 693 688 696 745
Fully diluted average shares outstanding:
Average shares outstanding 148,318 142,745 147,249 142,682
Assumed exercise of stock options 693 688 696 745
Assumed conversion of debentures 0 7,778 0 7,778
Total 149,011 151,211 147,945 151,205
(1) Dilution is less than 3%.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the balance
sheet and income statements for the twenty-six week period ended July 29, 1995.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> FEB-3-1996
<PERIOD-END> JUL-29-1995
<CASH> 54,642<F1>
<SECURITIES> 0
<RECEIVABLES> 288,148
<ALLOWANCES> 0
<INVENTORY> 1,434,571
<CURRENT-ASSETS> 1,903,088
<PP&E> 4,781,569
<DEPRECIATION> 1,890,265
<TOTAL-ASSETS> 6,909,921
<CURRENT-LIABILITIES> 1,712,080
<BONDS> 2,042,082
<COMMON> 149,888
0
0
<OTHER-SE> 2,083,794
<TOTAL-LIABILITY-AND-EQUITY> 6,909,921
<SALES> 8,857,127
<TOTAL-REVENUES> 8,857,127
<CGS> 6,502,691
<TOTAL-COSTS> 6,502,691
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 79,118
<INCOME-PRETAX> 223,071
<INCOME-TAX> 95,251
<INCOME-CONTINUING> 127,820
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 127,820
<EPS-PRIMARY> $0.87
<EPS-DILUTED> $0.87
<FN>
<F1>All numbers except EPS are in (000's).
</FN>
</TABLE>
RESTATED BY-LAWS OF
AMERICAN STORES COMPANY
Amended Effective July 18, 1995
ARTICLE I
OFFICES
Section 1.01. Registered Office. The registered office of the Company
shall be at 100 West Tenth Street, Wilmington, County of New Castle, Delaware,
until otherwise established by a vote of a majority of the Board of Directors
in office, and a statement of such change is filed in the manner provided by
statute.
Section 1.02. Other Offices. The Company may also have offices at such
other places within or without the State of Delaware as the Board of Directors
may from time to time determine or the business of the Company requires.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 2.01. Place of Meeting. All meetings of the stockholders of the
Company shall be held in Wilmington, Delaware, or at such other place within
or without the State of Delaware as shall be designated by the Board of
Directors in the notice of such meeting.
Section 2.02. Annual Meeting. The Board of Directors may fix the date
and time of the annual meeting of the stockholders, but if no such date and
time is fixed by the Board, the meeting for any calendar year shall be held at
such time and date as the Board of Directors may determine and at said meeting
the stockholders then entitled to vote shall elect by written ballot directors
and shall transact such other business as may properly be brought before the
meeting.
Section 2.03. Special Meetings. Special meetings of the stockholders of
the Company for any purpose or purposes for which meetings may lawfully be
called, may be called at any time for any purpose or purposes by the Board of
Directors or by any person or Committee expressly so authorized by the Board
of Directors and by no other person or persons. At any time, upon written
request of any person or persons who have duly called a special meeting, which
written request shall state the purpose or purposes of the meeting, it shall
be the duty of the Secretary to fix the date of the meeting to be held at such
date and time as the Secretary may fix, not less than ten nor more than sixty
days after the receipt of the request, and to give due notice thereof. If the
Secretary shall neglect or refuse to fix the time and date of such meeting and
give notice thereof, the person or persons calling the meeting may do so.
Section 2.04. Notice of Meetings. Written notice of the place, date and
hour of every meeting of the stockholders, whether annual or special, shall be
given to each stockholder of record entitled to vote at the meeting not less
than ten nor more than sixty days before the date of the meeting. Every
notice of a special meeting shall state the purpose or purposes thereof.
Section 2.04.1 Notice of Nominations and Stockholder Business
(1) Annual Meetings of Stockholders.
(a) Nominations of persons for election to the Board of Directors of the
Company and the proposal of business to be considered by the
stockholders may be made at an annual meeting of stockholders (a)
pursuant to the Company's notice of meeting, (b) by or at the
direction of the Board of Directors or (c) by any stockholder of the
Company who was a stockholder of record at the time of giving the
notice provided for in this by-law who is entitled to vote at the
meeting and who complies with the notice procedures set forth in this
by-law.
(b) For nominations or other business to be properly brought before an
annual meeting by a stockholder, the stockholder must have given
timely notice thereof in writing to the Secretary of the Company and
such other business must otherwise be a proper matter for stockholder
action. To be timely, a stockholder's notice shall be delivered to
the Secretary at the principal executive offices of the Company not
later than the close of business on the 30th day nor earlier than the
close of business on the 90th day 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 more than 15 days before
or more than 60 days after such anniversary date, notice by the
stockholder to be timely must be so delivered not earlier than the
close of business on the 90th day prior to such annual meeting and
not later than the close of business on the later of the 30th 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
by the Company. In no event shall the public announcement of an
adjournment of an annual meeting commence a new time period for the
giving of a stockholder's notice as described above. 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, all information relating to such person that is required to
be disclosed in solicitations of proxies for election of directors in
an election contest, or is otherwise required, in each case pursuant
to Regulation 14A under the Securities Exchange Act of 1934, as
amended (the "Exchange Act") and Rule 14a-11 thereunder (including
such person's written consent to being named in the proxy statement
as a nominee and to serving as a director if elected); (b) as to any
other business that the stockholder proposes to bring before the
meeting, a brief description of 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 the beneficial owner, if any, on whose behalf the
proposal is made; and (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 Company's books, and of such beneficial owner and
(ii) the class and number of shares of the Company which are owned
beneficially and of record by such stockholder and such beneficial
owner.
(c) Notwithstanding any provision in this by-law to the contrary, in the
event that the number of directors to be elected to the Board of
Directors of the Company is increased and the Company does not make a
public announcement naming all of the nominees for director or
specifying the size of the increased Board of Directors at least 40
days prior to the first anniversary of the preceding year's annual
meeting, a stockholder's notice required by this by-law shall also be
considered timely, but only with respect to nominees for any new
positions created by such increase, if it shall be delivered to the
Secretary at the principal executive offices of the Company not later
than the close of business on the 10th day following the day on which
such public announcement is first made by the Company.
(2) 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 Company's notice of meeting.
(3) General.
(a) Only such persons who are nominated in accordance with the procedures
set forth in this by-law 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 by-law. Except as otherwise provided by
law, the Certificate of Incorporation or these by-laws, 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 or proposed, as the case may be, in accordance with the
procedures set forth in this by-law and, if any proposed nomination
or business is not in compliance with this by-law, to declare that
such defective proposal or nomination shall be disregarded.
(b) For purposes of this by-law, "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 Company with the Securities and Exchange
Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act.
(c) Notwithstanding the foregoing provisions of this by-law, a
stockholder shall also comply with all applicable requirements of the
Exchange Act and the rules and regulations thereunder with respect to
the matters set forth in this by-law. Nothing in this by-law shall
be deemed to affect any rights (i) of stockholders to request
inclusion of proposals in the Company's proxy statement pursuant to
Rule 14a-8 under the Exchange Act or (ii) of the holders of any
series of Preferred Stock to elect directors under specified
circumstances.
Section 2.05. Quorum, Manner of Acting and Adjournment. The holders of a
majority of the stock issued and outstanding (not including treasury stock)
and entitled to vote thereat, present in person or represented by proxy, shall
constitute a quorum at all meetings of the stockholders for the transaction of
business except as otherwise provided by statute, by the Certificate of
Incorporation or by these by-laws. If, however, such quorum shall not be
present or represented at any meeting of the stockholders, the stockholders
entitled to vote thereat, present in person or represented by proxy, shall
have power to adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present or represented.
At any such adjourned meeting, at which a quorum shall be present or
represented, any business may be transacted which might have been transacted
at the meeting as originally notified. If the adjournment is for more than
thirty days, or if after the adjournment a new record date is fixed for the
adjourned meeting, a notice of the adjourned meeting shall be given to each
stockholder of record entitled to vote at the meeting. When a quorum is
present at any meeting, the vote of the holders of the majority of the stock
having voting power present in person or represented by proxy shall decide any
questions brought before such meeting, unless the question is one upon which,
by express provision of the applicable statute, the Company's Certificate of
Incorporation or these by-laws, a different vote is required in which case
such express provision shall govern and control the decision of such question.
Except upon those questions governed by the aforesaid express provisions, the
stockholders present in person or by proxy at a duly organized meeting can
continue to do business until adjournment, notwithstanding withdrawal of
enough stockholders to leave less than a quorum.
Section 2.06. Organization. At every meeting of the stockholders the
Chairman of the Board, if there be one, or in the case of vacancy in office or
absence of the Chairman of the Board, such person as may be designated by the
Board of Directors, or, in the absence of any such person, one of the
following persons present in the order stated: the Vice Chairmen of the
Board, if there be one in their order of rank and seniority; the President;
the Executive Vice Presidents and the Vice Presidents, in their order of rank
and seniority; or a Chairman chosen by the stockholders entitled to cast a
majority of the votes which all stockholders present in person or by proxy are
entitled to cast, shall act as Chairman, and the Secretary, or, in his
absence, an Assistant Secretary, or in the absence of both the Secretary and
Assistant Secretaries, a person appointed by the Chairman shall act as
Secretary.
Section 2.07. Voting: Proxies. Each stockholder shall at every meeting
of the stockholders be entitled to one vote in person or by proxy for each
share of capital stock having voting power registered in his name on the books
of the Company on the record date for such meeting. All elections of
directors shall be by written ballot. The vote upon any other matter need not
be by ballot. No proxy shall be voted after three years from its date, unless
the proxy provides for a longer period. Every proxy shall be executed in
writing by the stockholder or by his duly authorized attorney-in-fact and
filed with the Secretary of the Company. A proxy, unless coupled with an
interest, shall be revocable at will, notwithstanding any other agreement or
any provisions in the proxy to the contrary, but the revocation of a proxy
shall not be effective until notice thereof has been given to the Secretary of
the Company. A duly executed proxy shall be irrevocable if it states that it
is irrevocable and if, and only as long as, it is coupled with an interest
sufficient in law to support an irrevocable power. A proxy may be made
irrevocable regardless of whether the interest with which it is coupled is an
interest in the stock itself or an interest in the Company generally. A proxy
shall not be revoked by the death or incapacity of the maker unless, before
the vote is counted or the authority is exercised, written notice of such
death or incapacity is given to the Secretary of the Company.
Section 2.08. Voting Lists. The officer who has charge of the stock
ledger of the Company shall prepare and make, at least ten days before every
meeting of stockholders, a complete list of the stockholders entitled to vote
at the meeting. The list shall be arranged in alphabetical order showing the
address of each stockholder and the number of shares registered in the name of
each stockholder. Such list shall be open to the examination of any
stockholder, for any purpose germane to the meeting, during ordinary business
hours, for a period of at least 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 2.09. Inspectors of Election. In advance of any meeting of
stockholders the Board of Directors may appoint inspectors of election, who
need not be stockholders, to act at such meeting or any adjournment thereof.
If inspectors of election are not so appointed, the Chairman of any such
meeting may, and upon the demand of any stockholder or his proxy at the
meeting and before voting begins, shall appoint inspectors of election. The
number of inspectors shall be either one, two or three, as determined, in the
case of inspectors appointed upon demand of a stockholder, by stockholders
present entitled to cast a majority of the votes which all stockholders
present are entitled to cast thereon. No person who is a candidate for office
shall act as an inspector. In case any person appointed as inspector fails to
appear or fails or refuses to act, the vacancy may be filled by appointment
made by the Board of Directors in advance of the convening of the meeting, or
at the meeting by the Chairman of the meeting.
If inspectors of election are appointed as aforesaid, they shall determine
the number of shares outstanding and the voting power of each, the shares
represented at the meeting, the existence of a quorum, the authenticity,
validity and effect of proxies, receive votes or ballots, hear and determine
all challenges and questions in any way arising in connection with the right
to vote, count and tabulate all votes, determine the result, and do such acts
as may be proper to conduct the election or vote with fairness to all
stockholders. If there be three inspectors of election, the decision, act or
certificate of a majority shall be effective in all respects as the decision,
act or certificate of all.
On request of the Chairman of the meeting or of any stockholder or his
proxy, the inspectors shall make a report in writing of any challenge or
question or matter determined by them, and execute a certificate of any fact
found by them.
ARTICLE III
BOARD OF DIRECTORS
Section 3.01. Board Powers. The business and affairs of the Company
shall be managed by or under the direction of the Board of Directors; and all
powers of the Company, except those specifically reserved or granted to the
stockholders by statute, the Certificate of Incorporation or these by-laws,
are hereby granted to and vested in the Board of Directors. The primary
functions of the Board are to select the Chief Executive Officer and, in
consultation with such Chief Executive Officer, select the other principal
senior executives; evaluate their performance; fix their compensation; oversee
the conduct of the business to evaluate whether it is being managed properly;
review the Company's financial objectives, major plans and major accounting
and auditing issues; and to perform all other functions prescribed by law or
the Certificate of Incorporation.
Section 3.02. Number, Term of Office and Qualification. The Board of
Directors shall consist of such number of directors not less than five nor
more than twenty as may be determined from time to time by the Board of
Directors. Each director elected prior to 1995 shall hold office for the term
of years for which that director was elected and until that director's
successor is elected and qualified or until that director's earlier
resignation or removal, and each director elected after January 1, 1995 shall
hold office until the next annual meeting of shareholders and until that
director's successor is elected and qualified or until that director's earlier
resignation or removal. All directors of the Company shall be natural persons
of full age.
Section 3.03. Vacancies. Vacancies and newly created directorships
resulting from any increase in the authorized number of directors may be
filled by a majority of the directors then in office, though less than a
quorum, or by a sole remaining director, and the directors so chosen shall
hold office until the event of their death, resignation or removal. If there
are no directors in office, then an election of directors may be held in the
manner provided by statute. If, at the time of filling any vacancy or any
newly created directorship, the directors then in office shall constitute less
than a majority of the whole Board of Directors (as constituted immediately
prior to any such increase), the Court of Chancery may, upon application of
any stockholder or stockholders holding at least ten percent of the total
number of the shares at the time outstanding having the right to vote for such
directors, summarily order an election to be held to fill any such vacancies
or newly created directorships, or to replace the directors chosen by the
directors then in office.
Section 3.04. Resignations. Any director of the Company may resign at
any time by giving written notice to the Chairman of the Board or the
Secretary of the Company. Such resignation shall take effect at the date of
the receipt of such notice or at any later time specified therein and, unless
otherwise specified therein, the acceptance of such resignation shall not be
necessary to make it effective.
Section 3.05. Organization. At every meeting of the Board of Directors,
the Chairman of the Board, if there be one, or, in the case of a vacancy in
the office or absence of the Chairman of the Board, one of the following
officers present in the order stated: the Vice Chairmen of the Board, if
there be one in their order of rank and seniority; the President; the
Executive Vice Presidents or Vice Presidents in their order of rank and
seniority; or a Chairman chosen by a majority of the directors present, shall
preside, and the Secretary, or in his absence, an Assistant Secretary, or in
the absence of the Secretary and the Assistant Secretaries, any person
appointed by the Chairman of the meeting, shall act as Secretary.
Section 3.06. Place of Meeting. The Board of Directors may hold its
meetings, both regular and special, at such place or places within or without
the State of Delaware as the Chairman of the Board or the Board of Directors
may from time to time determine, or as may be designated in the notice calling
the meeting.
Section 3.07. Organization Meeting. Immediately after each annual
election of directors or other meeting at which the entire Board of Directors
is elected, the newly elected Board of Directors shall meet for the purpose of
organization, election of officers, and the transaction of other business, at
the place where said election of directors was held. Notice of such meeting
need not be given. Such organization meeting may be held at any other time or
place which shall be specified in a notice given as hereinafter provided for
special meetings of the Board of Directors, or as shall be specified in a
written waiver signed by all of the directors.
Section 3.08. Regular Meetings. Regular meetings of the Board of
Directors shall be held without notice at such time and at such place as shall
be determined from time to time by the Board of Directors. Notice of any
regular meeting shall be given in the manner prescribed for special meetings
of the Board of Directors.
Section 3.09. Special Meetings. Special meetings of the Board of
Directors shall be held whenever called by the Chairman of the Board of
Directors, the President or on the written request of three or more of the
directors. Notice of each such meeting shall be given to each director in
writing, or by telephone personally, at least 24 hours before the time at
which the meeting is to be held. Each such notice shall state the time and
place of the meeting to be so held.
Section 3.10. Quorum, Manner of Acting and Adjournment. At all meetings
of the Board of Directors a majority of the total number of directors shall
constitute a quorum for the transaction of business and the act of a majority
of the Directors present at any meeting at which there is a quorum shall be
the act of the Board of Directors, except as may be otherwise specifically
provided by statute or by the Certificate of Incorporation. If a quorum shall
not be present at any meeting of the Board of Directors, the directors present
thereat may adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present.
Unless otherwise restricted by the Certificate of Incorporation or these
by-laws, any action required or permitted to be taken at any meeting of the
Board of Directors or of any committee thereof may be taken without a meeting,
if all members of the Board or Committee, as the case may be, consent thereto
in writing, and the writing or writings are filed with the minutes of
proceedings of the Board or committee as the case may be.
Section 3.11. Committees of the Board of Directors. The Board of
Directors may, by a resolution adopted by the Board, designate an Executive
Committee and other committees. Each committee, other than the Executive
Committee, shall consist of two or more directors who shall be approved by a
majority of the whole Board. The Executive Committee shall consist of three
or more directors, one of whom shall be the Chairman of the Board of the
Company. The Board may designate one or more directors as alternate members
of any committee who may replace any absent or disqualified member at any
meeting of the committee. In the absence or disqualification of a member or
the alternate or alternates, if any, designated for such member of any
committee, the member or members thereof present at any meeting and not
disqualified, whether or not they constitute a quorum, may unanimously appoint
another director to act at the meeting in place of any such absent or
disqualified member.
The committees of the Board shall have and exercise the authority of the
Board of Directors to the extent provided in the resolution designating the
committee.
No committee of the Board of Directors shall have the authority of the
Board with respect to any of the following actions:
(1) Declaring any dividend;
(2) Authorizing the issuance of any stock of the Company;
(3) Amending the Certificate of Incorporation;
(4) Adopting an agreement of merger or consolidation;
(5) Recommending to the stockholders the sale, lease or exchange of all
or substantially all of the Company's property and assets;
(6) Recommending to the stockholders a dissolution of the Company or a
revocation of a dissolution; or
(7) Amending the by-laws of the Company.
The provisions of Section 3.09 with respect to the provision of notice for
special meetings shall be applicable to all committees of the Board.
At all meetings of any committee of the Board of Directors, a majority of
the members of the committee shall constitute a quorum for the transaction of
business and the act of a majority of the members of the committee present at
any meeting thereof at which there is a quorum shall be the act of the
committee, except as may be otherwise specifically provided for in the
resolution establishing the committee, or by law or by the Certificate of
Incorporation. If a quorum is not present at any meeting of any committee of
the Board, the committee members present thereat may adjourn the meeting from
time to time without notice other than announcement at the meeting, until a
quorum shall be present.
Section 3.12. Interested Directors or Officers. No contract or
transaction between the Company and one or more of its directors or officers,
or between the Company and any other Company, partnership, association, or
other organization in which one or more of its directors or officers are
directors or officers, or have a financial interest, shall be void or voidable
solely for this reason, or solely because the director or officer is present
at or participates in the meeting of the Board or committee thereof which
authorized the contract or transaction, or solely because his or their votes
are counted for such purpose, if:
(1) The material facts as to his relationship or interest and as to the
contract or transaction are disclosed or are known to the Board of
Directors or the committee, and the Board or committee in good faith
authorizes the contract or transaction by the affirmative votes of a
majority of the disinterested directors, even though the
disinterested directors be less than a quorum; or
(2) The material facts as to his relationship or interest and as to the
contract or transaction are disclosed or are known to the
stockholders entitled to vote thereon, and the contract or
transaction is specifically approved in good faith by vote of the
stockholders; or
(3) The contract or transaction is fair as to the Company as of the time
it is authorized, approved or ratified by the Board of Directors, a
committee thereof, or the stockholders.
Common or interested directors may be counted in determining the presence
of a quorum at a meeting of the Board of Directors or of a committee which
authorizes the contract or transaction.
Section 3.13. Compensation. Each director who is not also a full-time
active employee of the Company or any subsidiary thereof shall be paid such
compensation for his or her services as a director and shall be reimbursed for
such expenses as may be fixed by the Board of Directors.
ARTICLE IV
NOTICE, WAIVERS, MEETINGS
Section 4.01. Notice, What Constitutes. Whenever, under the provisions
of the statutes or of the Certificate of Incorporation or of these by-laws,
written notice is required to be given to any directors or stockholder, such
notice may be given to such person, either personally or by sending a copy
thereof through the mail, or by telegraph, facsimile transmission, charges
prepaid, to his address appearing on the books of the Company. If the notice
is sent by mail, by telegraph or by private delivery service, it shall be
deemed to have been given to the person entitled thereto when deposited in the
United States mail or with a telegraph office or private delivery service for
transmission to such person.
Section 4.02. Waivers of Notice. Whenever any written notice is required
to be given under the provisions of the Certificate of Incorporation, these by-
laws, or by statute, a waiver thereof in writing, signed by the person or
persons entitled to such notice, whether before or after the time stated
therein, shall be deemed equivalent to the giving of such notice. Neither the
business to be transacted at, nor the purpose of, any regular or special
meeting of the stockholders, directors, or members of a committee of directors
need be specified in any written waiver of notice of such meeting.
Attendance of a person, either in person or by proxy, at any meeting,
shall constitute a waiver of notice of such meeting, except when a person
attends a meeting for the express purpose of objecting, at the beginning of
the meeting, to the transaction of any business because the meeting was not
lawfully called or convened.
Section 4.03. Conference Telephone Meetings.
(a) Policy Statement by the Board of Directors. It is the position of
the Board of Directors that personal attendance at meetings is highly
preferable to attendance via telephone conference and, therefore,
that telephone conferences should be discouraged and used only in
limited circumstances, such as an emergency or when the Chairman of
the Board or the President and Chief Executive Officer feel that it
is in the best interest of the Company to call a meeting (as opposed
to postponing or rescheduling the meeting) when one or more Directors
can be present only by telephone conference, or where the matters to
be discussed are of a routine or perfunctory nature. Because of the
concern for confidentiality and electronic interference or signal
disruption, only "wired" telephones should be used.
(b) One or more directors may participate in a meeting of the Board, or
of a committee of the Board, by means of conference telephone or
similar communications equipment by means of which all persons
participating in the meeting can hear each other and participation in
a meeting pursuant to this section ("b") shall constitute presence in
person at such meeting.
ARTICLE V
OFFICERS
Section 5.01. Number, Qualifications and Designation. The officers of
the Company shall be chosen by the Board of Directors and shall be a Chairman
of the Board, a President and/or Chief Executive Officer, one or more
Executive Vice Presidents, Senior Vice Presidents and Vice Presidents, a
Secretary, a Treasurer, and such other officers as may be elected in
accordance with the provisions of Section 5.03 of this Article. One person
may hold more than one office.
Section 5.02. Election and Term of Office. The officers of the Company,
except those elected by delegated authority pursuant to Section 5.03 of this
Article, shall be elected annually by the Board of Directors, and each such
officer shall hold his office until his successor shall have been elected and
qualified, or until his earlier resignation or removal.
Section 5.03. Subordinate Officers, Committees and Agents. The Board of
Directors may, from time to time, elect such other officers, employees or
other agents as it deems necessary, who shall hold their offices for such
terms and shall exercise such powers and perform such duties as are provided
in these by-laws, or as the Board of Directors may from time to time
determine. The Board of Directors may delegate to any officer or committee
the power to elect subordinate officers and to retain or appoint employees or
other agents, or committees thereof, and to prescribe the authority and duties
of such subordinate officers, committees, employees or other agents.
Section 5.04. Resignations. Any officer or agent may resign at any time
by giving written notice to the Board of Directors, or to the Chairman of the
Board or the Secretary of the Company. Any such resignation shall take effect
at the date of the receipt of such notice or at any later time specified
therein and, unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.
Section 5.05. Removal. Any officer, committee, employee or other agent
of the Company may be removed, either for or without cause, by the Board of
Directors or other authority which elected or appointed such officer,
committee or other agent whenever in the judgment of such authority the best
interests of the Company will be served thereby.
Section 5.06. Vacancies. A vacancy in any office because of death,
resignation, removal, disqualification, or any other cause, shall be filled by
the Board of Directors or by the officer or committee to which the power to
fill such office has been delegated pursuant to Section 5.03 of this Article,
as the case may be, and if the office is one for which these by-laws prescribe
a term, shall be filled for the unexpired portion of the term.
Section 5.07. General Powers. Except as otherwise provided by law, the
Certificate of Incorporation or these by-laws, the day-to-day management of
the Company's business and affairs shall be conducted by or under the
supervision of the President and Chief Executive Officer and by those other
officers and employees to whom management functions are delegated by the Board
of Directors or the President and Chief Executive Officer.
Section 5.08. Corporate Authority. The Chairman of the Board shall,
subject to the control of the Board of Directors, have general and active
supervision of the affairs, business, officers and employees of the Company.
By virtue of his office, the Chairman of the Board shall be a member of all
committees of the Board of Directors or of the Company except as otherwise
specifically provided. He shall, from time to time, in his discretion or at
the order of the Board, submit to the Board reports of the operations and
affairs of the Company. He shall also perform such other duties and have such
other powers as may be assigned to him from time to time by the Board of
Directors.
Section 5.09. The Chairman and Vice Chairmen of the Board. The Chairman
of the Board shall preside at all meetings of the stockholders and of the
Board of Directors, and shall perform such other duties as may from time to
time be assigned to him by the Board of Directors. The Vice Chairmen of the
Board, if there be one, in their order of rank and seniority, shall perform
such duties as may from time to time be assigned to them by the Board of
Directors, by the Chairman of the Board or these by-laws.
SECTION 5.10. THE PRESIDENT. DELETED IN ITS ENTIRETY.
Section 5.11. The Vice Presidents. The Company may have one or more
Executive Vice Presidents, Senior Vice Presidents and Vice Presidents having
such duties as from time to time may be determined by the Board of Directors
or by the Chairman of the Board, or by the President and/or Chief Executive
Officer pursuant to Section 5.07.
Section 5.12. The Secretary. The Secretary shall keep full minutes of
all meetings of the stockholders and of the Board of Directors; shall be ex-
officio Secretary of the Board of Directors; shall attend all meetings of the
stockholders and of the Board of Directors; shall record all the votes of the
stockholders and of the directors and the minutes of the meetings of the
stockholders and of the Board of Directors and of committees of the Board in a
book or books to be kept for that purpose. The Secretary shall give, or cause
to be given, notices of all meetings of the stockholders of the Company and of
the Board of Directors; shall be the custodian of the seal of the Company and
see that it is affixed to all documents to be executed on behalf of the
Company under its seal; shall have responsibility for the custody and
safekeeping of all permanent records and other documents of the Company; and,
in general, shall perform all duties incident to the office of Secretary and
such other duties as may be prescribed by the Board of Directors or by the
Chairman of the Board, under whose supervision he shall be. The Board of
Directors may elect one or more Assistant Secretaries to perform such duties
as shall from time to time be assigned to them by the Board of Directors or
the Chairman of the Board.
Section 5.13. The Treasurer. The Treasurer shall have or provide for the
custody of all funds, securities and other property of the Company; shall
collect and receive or provide for the collection or receipt of money earned
by or in any manner due to or received by the Company; shall deposit or cause
to be deposited all said moneys in such banks or other depositories as the
Board of Directors may from time to time designate; shall make disbursements
of Company funds upon appropriate vouchers; shall keep full and accurate
accounts of transactions of his office in books belonging to the Company;
shall, whenever so required by the Board of Directors, the Executive Committee
or an Audit Committee, render an accounting showing his transactions as
Treasurer, and the financial condition of the Company; and, in general, shall
discharge any other duties as may from time to time be assigned to him by the
Board of Directors. The Board of Directors may elect one or more Assistant
Treasurers to perform the duties of the Treasurer as shall from time to time
be assigned to them by the Board of Directors or the Treasurer.
Section 5.14. The Controller. The Board of Directors may appoint a
Controller who shall maintain full and accurate records of all assets and
liabilities and transactions of the Company, see that adequate audits thereof
are currently and regularly made and, in conjunction with other officers and
department heads, initiate and enforce measures and procedures whereby the
business of the Company shall be conducted with maximum safeguards, efficiency
and economy. He shall make all such records available for examination when so
required by the Board of Directors, the Executive Committee, or an Audit
Committee. He shall perform such other duties and have such other obligations
as may be prescribed by the Board of Directors or by the Chairman of the
Board.
Section 5.15. Officer's Bonds. Any officer shall give a bond for the
faithful discharge of his duties in such sum, if any, and with such surety or
sureties as the Board of Directors shall require. The Company may obtain such
bonds at its expense as the Board of Directors shall require.
Section 5.16. Compensation. The compensation of the officers and agents
of the Company elected by the Board of Directors shall be fixed from time to
time by the Board of Directors or by such committee as may be designated by
the Board of Directors to fix salaries or other compensation of officers.
ARTICLE VI
CERTIFICATES OF STOCK, TRANSFER, ETC.
Section 6.01. Issuance. The certificates for stock of the Company shall
be numbered and registered in the stock ledger and transfer books or
equivalent records of the Company as they are issued. They shall be signed by
the Chairman of the Board, the President, an Executive Vice President or a
Vice President and by the Secretary or an Assistant Secretary or the Treasurer
or an Assistant Treasurer, and shall bear the corporate seal, which may be a
facsimile, engraved or printed. Any of or all the signatures upon such
certificate may be a facsimile, engraved or printed if such certificate of
stock is signed or countersigned by a transfer agent or by a registrar, which
signature may also be a facsimile. In case any officer, transfer agent or
registrar who has signed, or whose facsimile signature has been placed upon
any share certificate shall have ceased to be such officer, transfer agent or
registrar before the certificate is issued, it may be issued with the same
effect as if he were such officer, transfer agent or registrar at the date of
its issue.
Section 6.02. Transfer. Transfers of shares of stock of the Company
shall be made on the books of the Company upon surrender of the certificates
therefor, endorsed by the person named in the certificate or by attorney
lawfully constituted in writing. No transfer shall be made inconsistent with
the provisions of the Uniform Commercial Code, Article 8 of Title 5A of the
Delaware Code, and its amendments and supplements.
Section 6.03. Stock Certificates. Stock certificates of the Company
shall be in such form as provided by statute and approved by the Board of
Directors. The stock record books and the blank stock certificate books shall
be kept by the Secretary or by any agency designated by the Board of Directors
for that purpose.
Section 6.04. Lost, Stolen, Destroyed or Mutilated Certificates. The
Board of Directors may direct a new certificate or certificates to be issued
in place of any certificate or certificates theretofore issued by the Company
alleged to have been lost, stolen or destroyed, upon the making of an
affidavit of the fact by the person claiming the certificate of stock to be
lost, stolen or destroyed. When authorizing such issue of a new certificate
or certificates, the Board of Directors may, in its discretion and as a
condition precedent to the issuance thereof, require the owner of such lost,
stolen or destroyed certificate or certificates, or his legal representative,
to give the Company a bond in such sum as it may direct as indemnity against
any claim that may be made against the Company with respect to the certificate
alleged to have been lost, stolen or destroyed.
Section 6.05. Record Holder of Shares. The Company shall be entitled to
recognize the exclusive right of a person registered on its books as the owner
of shares to receive dividends, and to vote as such owner, and to hold liable
for calls and assessments a person registered on its books as the owner of
shares, and shall not be bound to recognize any equitable or other claim to or
interest in such share or shares on the part of any other person, whether or
not it shall have express or other notice thereof, except as otherwise
provided by the laws of Delaware.
Section 6.06. Determination of Stockholders of Record. In order that the
Company may determine the stockholders entitled to notice of or to vote at any
meeting of stockholders or any adjournment thereof, or entitled to receive
payment of any dividend or other distribution or allotment of any rights, or
entitled to exercise any rights in respect of any change, conversion or
exchange of stock or for the purpose of any other lawful action, the Board of
Directors may fix, in advance, a record date, which shall not be more than
sixty nor less than ten days before the date of such meeting, nor more than
sixty days prior to any other action.
If no record date is fixed:
(1) The record date for determining stockholders entitled to notice
of or to vote at a meeting of stockholders shall be at the close
of business on the day next preceding the day on which notice is
given, or, if notice is waived, at the close of business on the
day next preceding the day on which the meeting is held.
(2) The record date for determining stockholders for any other
purpose shall be at the close of business on the day on which
the Board of Directors adopts the resolution relating thereto.
Only such stockholders as shall be stockholders on the record date fixed
or determined as aforesaid shall be entitled to notice of or to vote at such
meeting or adjournment, or entitled to receive payment of any dividend or
other distribution or allotment of any rights, or entitled to exercise any
rights in respect of any change, conversion or exchange of stock or for the
purpose of any other lawful action. A determination of stockholders of record
entitled to notice of or to vote at a meeting of stockholders shall apply to
any adjournment of the meeting; provided, however, that the Board of Directors
may fix a new record date for the adjourned meeting.
ARTICLE VII
INDEMNIFICATION OF DIRECTORS, OFFICERS, ETC.
DELETED IN ITS ENTIRETY.
ARTICLE VIII
INSURANCE
DELETED IN ITS ENTIRETY.
ARTICLE IX
MISCELLANEOUS
Section 9.01. Corporate Seal. The corporate seal of the Company shall
have inscribed thereon the name of the Company, the year of its incorporation
and the words "Corporate Seal, Delaware". The seal may be used by causing it
or a facsimile thereof to be impressed or affixed or otherwise reproduced.
Section 9.02. Checks. All checks, notes, bills of exchange or other
orders in writing shall be signed by such person or persons as the Board of
Directors, or officer or officers authorized by resolution of the Board of
Directors may, from time to time, designate.
Section 9.03. Contracts. Except as otherwise provided in these by-laws,
the Board of Directors may authorize any officer or officers including the
Chairman and Vice Chairmen of the Board of Directors, or any agent or agents,
to enter into any contract or to execute or deliver any instrument on behalf
of the Company and such authority may be general or confined to specific
instances.
Section 9.04. Audit. The Board of Directors shall cause the accounts and
records of the Company and its subsidiaries to be examined and audited by a
firm of independent certified public accountants at least once each year. The
Board of Directors each year shall cause a report of the financial condition
of the Company and its subsidiaries as of the closing date of the preceding
fiscal year to be prepared. Such report shall be in such form as shall be
approved by the Board of Directors and shall be examined and audited by a firm
of independent certified public accountants.
Section 9.05. Inspection. The books, accounts and records of the Company
shall be open for inspection in person by any member of the Board of Directors
at all times.
Section 9.06. Amendment of by-laws. These by-laws shall not be made,
repealed, altered, amended or rescinded by the stockholders of the Company
except by the vote of not less than 80% of the total outstanding shares of
common stock as well as a majority of the total outstanding shares of common
stock not held by a Related Person (as defined in Article Thirteenth of the
Certificate of Incorporation) and/or its affiliates. Nothing contained herein
shall detract from the authority of the Board of Directors to make, alter or
repeal the by-laws of the Company (as set forth in Article 10.03(a) of the
Certificate of Incorporation).
