UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 1998
--------------------------------------------
[ ] 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
1-13116
FRANCHISE FINANCE CORPORATION OF AMERICA
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 86-0736091
- --------------------------------------------------------------------------------
(State of Incorporation) (I.R.S. Employer
Identification Number)
The Perimeter Center
17207 North Perimeter Drive
Scottsdale, Arizona 85255
- --------------------------------------------------------------------------------
(Address of principal executive offices)
(Zip Code)
Registrants' telephone number including area code (602) 585-4500
---------------------------
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
----- -----
Number of shares outstanding of each of the issuer's classes of common stock as
of May 5, 1998:
Common Stock, $0.01 par value 48,834,842
------------------------------- ------------------
Class Number of Shares
<PAGE>
PART 1 - FINANCIAL INFORMATION
Item l. Financial Statements.
------- ---------------------
FRANCHISE FINANCE CORPORATION OF AMERICA
CONSOLIDATED BALANCE SHEETS - MARCH 31, 1998 AND
DECEMBER 31, 1997 (Amounts in thousands
except share data)
(Unaudited)
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
------------ ------------
<S> <C> <C>
ASSETS
------
Investments:
Investments in Real Estate, at cost:
Land $ 398,513 $ 382,637
Buildings and Improvements 570,410 545,629
Equipment 21,990 23,039
------------ ------------
990,913 951,305
Less-Accumulated Depreciation 177,966 175,263
------------ ------------
Net Real Estate Investments 812,947 776,042
Mortgage Loans Held for Sale 395,023 251,622
Mortgage Loans Receivable, net of allowances
of $2,600 in 1998 and 1997 25,627 35,184
Real Estate Investment Securities 54,560 55,185
Other Investments 28,064 27,118
------------ ------------
Total Investments 1,316,221 1,145,151
Cash and Cash Equivalents 2,916 7,130
Accounts Receivable, net of allowances
of $1,900 in 1998 and 1997 9,118 7,581
Other Assets 19,289 19,336
------------ ------------
Total Assets $ 1,347,544 $ 1,179,198
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Liabilities:
Dividends Payable $ 22,506 $ 19,640
Notes Payable (Note 2) 326,423 309,360
Borrowings Under Line of Credit 289,000 302,000
Mortgage Payable to Affiliate 8,500 8,500
Accrued Expenses and Other 21,587 16,702
------------ ------------
Total Liabilities 668,016 656,202
------------ ------------
Shareholders' Equity:
Preferred Stock, par value $.01 per share, 10 million shares
authorized, none issued or outstanding -- --
Common Stock, par value $.01 per share, authorized 200 million
shares, issued and outstanding 47,885,525 shares in 1998
and 41,787,543 shares in 1997 479 418
Capital in Excess of Par Value 743,459 583,056
Cumulative Net Income 220,680 202,106
Cumulative Dividends (285,090) (262,584)
------------ ------------
Total Shareholders' Equity 679,528 522,996
------------ ------------
Total Liabilities and Shareholders' Equity $ 1,347,544 $ 1,179,198
============ ============
</TABLE>
<PAGE>
FRANCHISE FINANCE CORPORATION OF AMERICA
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
(Amounts in thousands except per share data)
(Unaudited)
<TABLE>
<CAPTION>
1998 1997
-------- --------
<S> <C> <C>
REVENUES:
Rental $ 26,868 $ 24,383
Mortgage Loan Interest 8,872 1,530
Investment Income and Other 3,650 2,579
Interest (Related Party) -- 4,283
-------- --------
39,390 32,775
-------- --------
EXPENSES:
Depreciation and Amortization 5,483 5,160
Operating, General and Administrative 3,379 2,551
Property Costs 296 521
Interest 11,510 8,363
Interest (Related Party) 250 246
-------- --------
20,918 16,841
-------- --------
Income Before Gain on Sale of Property and Other Costs 18,472 15,934
Gain on Sale of Property 102 3,309
Equity in Net Loss of Affiliate -- (1,028)
-------- --------
Net Income $ 18,574 $ 18,215
======== ========
Basic Net Income Per Share $ .43 $ .45
======== ========
Diluted Net Income Per Share (Note 3) $ .42 $ .44
======== ========
Number of Common Shares Used in Basic Net Income Per Share 43,588 40,596
Incremental Shares from Assumed Conversion of Options 472 381
-------- --------
Number of Common Shares Used in Diluted Net Income Per Share 44,060 40,977
======== ========
</TABLE>
<PAGE>
FRANCHISE FINANCE CORPORATION OF AMERICA
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 1998
(Amounts in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Common Stock Issued Capital in
--------------------- Excess of Cumulative Cumulative
Shares Amount Par Value Net Income Dividends Total
--------- --------- ---------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
BALANCE, December 31, 1997 41,788 $ 418 $ 583,056 $ 202,106 $ (262,584) $ 522,996
Capital contributions -
Issuance of common stock 6,043 60 158,901 -- -- 158,961
Dividend reinvestment plan 55 1 1,496 -- -- 1,497
Exercise of stock options -- -- 6 -- -- 6
Net income -- -- -- 18,574 -- 18,574
Dividends declared -
$.47 per share -- -- -- -- (22,506) (22,506)
--------- --------- ---------- ---------- ---------- ---------
BALANCE, March 31, 1998 47,886 $ 479 $ 743,459 $ 220,680 $ (285,090) $ 679,528
========= ========= ========== ========== ========== =========
</TABLE>
<PAGE>
FRANCHISE FINANCE CORPORATION OF AMERICA
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
(Amounts in thousands)
(Unaudited)
<TABLE>
<CAPTION>
1998 1997
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 18,574 $ 18,215
Adjustments to net income:
Depreciation and amortization 5,483 5,160
Gain on sale of property (102) (3,309)
Equity in net loss of affiliate -- 1,028
Other 3,494 5,736
--------- ---------
Net cash provided by operating activities 27,449 26,830
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property (46,089) (4,109)
Investment in mortgage loans (135,390) (110,611)
Investment in notes receivable (5,983) (3,650)
Investment in related party notes receivable -- (19,143)
Proceeds from sale of property 3,301 9,085
Receipt of mortgage loan and note payoffs 4,504 --
Collection of mortgage loan principal 2,424 787
Collection of investment security principal 746 361
--------- ---------
Net cash used in investing activities (176,487) (127,280)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends paid (19,640) (18,254)
Proceeds from issuance of common stock 160,464 1,814
Proceeds from bank borrowings 123,000 131,500
Proceeds from issuance of notes 17,000 50,000
Payment of bank borrowings and loan fees (136,000) (70,300)
--------- ---------
Net cash provided by financing activities 144,824 94,760
--------- ---------
NET DECREASE IN CASH AND CASH EQUIVALENTS (4,214) (5,690)
CASH AND CASH EQUIVALENTS, beginning of period 7,130 11,350
--------- ---------
CASH AND CASH EQUIVALENTS, end of period $ 2,916 $ 5,660
========= =========
Supplemental Disclosure of Noncash Activities:
Mortgage loan obtained as part of property sale proceeds,
net of deferred gain $ 1,447 $ --
========= =========
</TABLE>
<PAGE>
FRANCHISE FINANCE CORPORATION OF AMERICA
----------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
MARCH 31, 1998
--------------
(1) DERIVATIVE FINANCIAL INSTRUMENTS:
--------------------------------
FFCA intends to use derivative financial instruments to manage interest
rate exposures which exist as a part of its ongoing business operations. The
portfolio of fixed-rate mortgage loans held for sale through securitization is
funded on an interim basis by FFCA's variable rate bank credit facility. In such
circumstances, FFCA hedges against fluctuations in interest rates that could
adversely affect the value of the mortgage loans to be sold. At March 31, 1998,
FFCA had interest rate swap contracts outstanding with a total notional amount
of $209 million. FFCA intends to terminate these contracts upon securitization
of the fixed-rate mortgage loans in May 1998, at which time both the gain or
loss on the securitization of the fixed-rate mortgage loans and the gain or loss
on the termination of the interest rate swap contracts will be measured and
recognized in the statement of operations. FFCA had no outstanding liabilities
under these contracts at March 31, 1998 and, based on the level of interest
rates prevailing, FFCA would have paid approximately $4 million if it had
terminated these swap contracts at March 31, 1998.
(2) NOTES PAYABLE:
-------------
In January 1998, FFCA issued $17 million in unsecured notes due in
2007, bearing interest at a rate of 6.86%. Subsequent to March 31, 1998, FFCA
issued $30.5 million in unsecured notes due in 2008, bearing interest at a rate
of 7.07%. Interest on the notes is payable semi-annually in arrears on each May
30 and November 30 with principal due at maturity.
(3) EARNINGS PER SHARE:
------------------
Earnings per share amounts for 1997 have been restated to conform with
1998's presentation as required by Statement of Financial Accounting Standards
(SFAS) No. 128, "Earnings Per Share". Stock options to purchase 157,922 shares
of common stock at $27.625 per share were outstanding during the quarter ended
March 31, 1998, but were not included in the computation of diluted earnings per
share, because the options' exercise price was greater than the average market
price of the common shares.
Subsequent to March 31, 1998, FFCA issued 892,857 shares of common
stock resulting in net proceeds of approximately $23.7 million.
<PAGE>
Part I -- Financial Information
- -------------------------------
Item 2. Management's Discussion and Analysis of
---------------------------------------
Financial Condition and Results of Operations
---------------------------------------------
General
- -------
Franchise Finance Corporation of America ("FFCA") is a self-administered real
estate investment trust ("REIT") which primarily provides real estate financing
to the chain restaurant industry, as well as to the convenience store and
automotive services and parts industries through various financial products,
including sale-leaseback transactions, mortgage loans, equipment loans and
construction financing. At March 31, 1998, FFCA had interests in 2,760
properties consisting of investments in 2,382 chain restaurants properties, 335
convenience stores, 33 automotive service and parts stores and 10 other retail
properties. FFCA's portfolio included 2,137 chain store properties represented
by investments in real estate and mortgage loans and 623 properties represented
by securitized mortgage loans in which FFCA holds a residual interest.
Liquidity and Capital Resources
- -------------------------------
During the first quarter of 1998, FFCA originated $185.5 million in new
sale-leaseback and mortgage loan investments, representing $96.3 million in
chain restaurant properties, $83 million in convenience stores and $6.2 million
in automotive services and parts stores. The overall increase in new investments
from $136 million for the comparable quarter in 1997 reflects the impact of
FFCA's expansion into the convenience store and automotive services and parts
industries. FFCA also expanded outside of the United States with three
restaurant investments in Canada. At March 31, 1998, FFCA's portfolio represents
over 2,700 locations in 48 states and Canada, approximately 290 of which were
financed in the first quarter of 1998. In addition to this geographic
diversification, the portfolio is also represented by more than 400 different
operators in approximately 50 retail chains.
FFCA's investments in chain store properties are funded initially by cash
generated from operations and draws on FFCA's revolving credit facility. The
loan facility is used as a warehousing line until a sufficiently large and
diverse pool of mortgage loans is accumulated to warrant the sale of loans
through a securitization transaction. At March 31, 1998, FFCA had $395 million
in fixed and floating rate mortgage loans held for sale of which approximately
$335 million will be securitized in a transaction in May 1998. From the time the
fixed rate mortgage loans are originated until the time they are sold through a
securitization transaction, FFCA hedges against fluctuations in interest rates
through the use of derivative financial instruments. At March 31, 1998, FFCA had
outstanding interest rate swap contracts aggregating $209 million in notional
amount. FFCA had no outstanding liabilities under these contracts at March 31,
1998 and, based on the level of interest rates prevailing, FFCA would have paid
approximately $4 million if it had terminated the swap contracts at March 31,
1998.
FFCA's revolving credit facility is also used as a warehousing line for
properties pending the issuance of additional debt or equity securities. In
January 1998, FFCA issued $17 million in unsecured notes due in 2007 bearing
interest at a rate of 6.86%. In April 1998, FFCA issued $30.5 million in
unsecured notes due in 2008 bearing interest at a rate of 7.07%. In addition,
FFCA demonstrated its ability to access the capital markets by entering into
various equity transactions during the quarter. FFCA raised a total of $59
million in equity through the sale of 2.2 million shares of common stock to two
separate unit investment trusts in February 1998. In March 1998, FFCA sold
approximately 3.8 million shares of common stock to an affiliate of Colony
Capital, Inc. (Colony), a Los Angeles based real estate-related investment firm.
In the transaction, Colony made a $100 million equity investment in newly-issued
shares of FFCA common stock and has warrants to purchase an additional 1,476,908
shares. This equity issuance makes Colony the largest shareholder of FFCA and
adds to FFCA's financial flexibility and capabilities.
Rental and mortgage interest revenue generated by FFCA's investments in
restaurant properties has, and will continue to, comprise the majority of the
cash generated from operations. Operations during the three-month period
provided net cash of $27.4 million as compared to $26.8 million in 1997 with the
increase primarily
<PAGE>
due to increased revenues because of the growth in the size of the portfolio.
Cash generated from operations provides distributions to the shareholders in the
form of quarterly dividends. This cash also may be used on an interim basis to
fund new investments in properties or to pay down debt.
FFCA's primary source of interim funding for new investments continues to be its
$350 million unsecured acquisition loan facility. In January 1998, FFCA entered
into a separate $100 million acquisition loan facility with a bank (with
substantially the same terms and conditions as the $350 million acquisition loan
facility), which expires upon receipt of the cash proceeds from the
securitization transaction scheduled for mid-May 1998. In addition, FFCA and the
participating banks amended certain covenants under the acquisition loan
facility to accommodate the securitization transaction.
At March 31, 1998, FFCA had cash and cash equivalents of $2.9 million and $161
million available on its bank lines of credit. FFCA's anticipated investments
include commitments totaling approximately $400 million at March 31, 1998. These
commitments were made to several large operators who operated chain restaurants
such as of Burger King, Arby's and Applebee's, and to operators of automotive
service and parts stores such as Econo Lube, Checker Auto and Valvoline, to
acquire or finance (subject to FFCA's customary underwriting procedures)
approximately 385 chain store properties over the next year. FFCA anticipates
funding these specific commitments, and other investments in chain store
properties, through amounts available on its revolving credit facilities,
issuance of additional unsecured debt, issuance of mortgage-backed securities
through securitization or issuance of additional equity securities of FFCA.
FFCA has a dividend reinvestment plan that allows shareholders to acquire
additional shares of FFCA stock by automatically reinvesting their quarterly
dividends. As of March 31, 1998, shareholders owning approximately 7.25% of the
outstanding shares of FFCA common stock participate in the dividend reinvestment
plan and dividends reinvested during the quarter ended March 31, 1998 totaled
approximately $1.5 million. FFCA declared a first quarter 1998 dividend of $0.47
per share, or $1.88 per share on an annualized basis, payable on May 20, 1998 to
shareholders of record on May 8, 1998. Management anticipates that cash
generated from operations will be sufficient to meet operating requirements and
provide the level of shareholder dividends required to maintain FFCA's status as
a REIT.
Results of Operations
- ---------------------
FFCA had income of $18.5 million before gain on the sale of property and other
costs for the quarter ended March 31, 1998 (the quarter) as compared to $15.9
million for the comparable quarter of 1997, representing an increase of 16%. Net
income of $18.6 million ($.42 per share assuming dilution) for the first quarter
of 1998 included gains on the sale of property aggregating $102,000. The
comparable quarter in 1997 resulted in net income of $18.2 million ($.44 per
share assuming dilution) for the quarter ended March 31, 1997 which included
gains of $3.3 million, partially offset by FFCA's equity in the loss of its
affiliate.
Total revenues rose 20% to $39.4 million during the quarter from $32.8 million
in the comparable quarter of 1997 primarily due to the growth of FFCA's
investment portfolio. In 1998, 90% of FFCA's total revenues were derived from
chain restaurant investments, 7% from convenience store investments and the
remaining 3% related to other investments. FFCA's primary source of revenues
continues to be rental revenues generated by its portfolio of restaurant
properties leased to restaurant operators on a triple-net basis. Over one-third
of the increase in total revenues during 1998 related to increases in rental
revenues due to new investments. New investments in property subject to
operating leases totaled $46 million in 1998 as compared to $8.5 million in the
first quarter of 1997. Weighted average base lease rates on new investments in
1998, as compared to 1997, remained unchanged at approximately 10%. Partially
offsetting the revenue increases generated by new investments were decreases in
rent related to properties sold and the expiration of original equipment leases.
Generally, the leases in FFCA's portfolio also provide for contingent rentals
based on a percentage of the gross sales of the related restaurants. Such
contingent rentals totaled $1.3 million in the 1998 quarter as compared to $1.1
million in the comparable quarter in 1997.
Mortgage interest income generated by FFCA's loan portfolio totaled $8.9 million
for the quarter ended March 31, 1998 as compared to $1.5 million for the quarter
ended March 31, 1997 due to the increase in
<PAGE>
mortgage investments. Rates achieved on the loans originated during the first
quarter of 1998 averaged 8.6% as compared to 8.8% achieved during the first
quarter of 1997. The average interest rates on the bank credit facility used to
fund these new loans reflected a corresponding decrease during these periods.
Increases and decreases in mortgage interest income between quarters has been,
and will continue to be, impacted by the amount of loans held for sale and the
timing of the sale of these loans through securitization transactions. Although
FFCA no longer receives mortgage interest income from the mortgages it sold
during 1996 and 1997, it retains certain interests through the purchase of
subordinated investment securities. These securities generate revenues that are
included in "Investment Income and Other" in the accompanying financial
statements and represent the majority of the increase in this income between
years.
Expenses increased to $20.9 million during the quarter ended March 31, 1998 from
$16.8 million in the comparable quarter of 1997 primarily due to an increase in
interest expense. Interest expense rose $3.2 million due to the use of
borrowings for investment in chain store properties. FFCA's outstanding
borrowings averaged $640 million during the first quarter of 1998 as compared to
$450 million during the first quarter of 1997. Operating, general and
administrative expenses in the first quarter of 1998 increased by approximately
$828,000 as compared to the same quarter in 1997. In 1997, FFCA recovered
approximately $300,000 more in notes previously written off than it did in 1998.
The increase is also attributable to the addition of personnel and other
resources devoted to the expansion of FFCA's line of financial products.
During the quarter, FFCA sold 10 properties (as compared to 16 properties sold
in the first quarter of 1997) and recorded net gains of $102,000 on these sales,
as compared to net gains of $3.3 million recorded in the first quarter of 1997.
Proceeds from the sale of property and mortgage payoffs during the quarter
totaled $7.8 million, which were used to fund new investments.
In the opinion of management, the financial information included in this report
reflects all adjustments necessary for fair presentation. All adjustments are of
a normal recurring nature.
Part II -- Other Information
- ----------------------------
Item 6. Exhibits and Reports on Form 8-K.
--------------------------------
(a) The following is a complete list of exhibits filed as part of this
Form 10-Q. For electronic filing purposes only, this report
contains Exhibit 27, Financial Data Schedule. Exhibit numbers
correspond to the numbers in the Exhibit Table of Item 601 of
Regulation S-K.
3.01 The Second Amended and Restated Bylaws of Franchise Finance
Corporation of America
(b) During the quarter covered by this report, FFCA filed the
following reports on Form 8-K:
Form 8-K dated December 29, 1997
Item 5. Other Events - On December 29, 1997, FFCA entered into
a Second Amended and Restated Credit Agreement with
NationsBank of Texas, N.A. and certain lenders which generally
conforms to FFCA's asset securitization transactions and
establishes a revolving line of credit through the year 2000.
Item 7. Financial Statements and Exhibits - Second Amended and
Restated Credit Agreement dated as of December 29, 1997 among
Franchise Finance Corporation of America, Certain Lenders and
NationsBank of Texas, N.A.
Form 8-K dated January 27, 1998
Item 5. Other Events - On January 27, 1998, FFCA entered into
a Credit Agreement with NationsBank of Texas, N.A. for an
amount of credit available of $100 million to finance
<PAGE>
FFCA's ongoing working capital and general corporate
requirements, including acquisitions to the extent permitted
thereunder.
Item 7. Financial Statements and Exhibits - Credit Agreement
dated as of January 27, 1998 among Franchise Finance
Corporation of America, Certain Lenders and NationsBank of
Texas, N.A.
Form 8-K dated February 17, 1998
Item 5. Other Events - On February 17, 1998, FFCA issued a
press release announcing that it signed a purchase agreement
pursuant to which an affiliate of Colony Capital, Inc.
(Colony) will acquire $100 million of FFCA's common stock in a
private placement which is expected to close within the next
45 days. Colony will acquire approximately 8% of FFCA's
outstanding common stock, will have warrants to purchase an
additional 3% and will appoint Kelvin Davis, Colony's
President and Chief Operating Officer, to be nominated to
FFCA's Board of Directors.
Item 7. Financial Statements and Exhibits - Press release
dated February 17, 1998, issued by FFCA announcing the signing
of the purchase agreement pursuant to which an affiliate of
Colony Capital, Inc. will acquire $100 million of FFCA's
common stock in a private offering.
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the registrant has caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
FRANCHISE FINANCE CORPORATION OF AMERICA
Date: May 11, 1998 By /s/ John Barravecchia
------------------------------------------------
John Barravecchia, Executive Vice President,
Chief Financial Officer and Treasurer
Date: May 11, 1998 By /s/ Catherine F. Long
------------------------------------------------
Catherine F. Long, Senior Vice President Finance
and Principal Accounting Officer
<PAGE>
EXHIBIT INDEX
The following is a complete list of exhibits filed as part of this Form 10-Q.
For electronic filing purposes only, this report contains Exhibit 27, Financial
Data Schedule. Exhibit numbers correspond to the numbers in the Exhibit Table of
Item 601 of Regulation S-K.
Sequentially
Exhibit No. Description Numbered Page
- ----------- ----------- -------------
3.01 The Second Amended and Restated Bylaws of
Franchise Finance Corporation of America
SECOND AMENDED AND RESTATED BYLAWS
OF
FRANCHISE FINANCE CORPORATION OF AMERICA
Effective as of April 27, 1998
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office of the corporation
shall be in the City of Wilmington, County of New Castle, State of Delaware.
Section 2. Other Offices. The corporation may also have offices at such
other places both within and without the State of Delaware as the Board of
Directors may from time to time determine or the business of the corporation may
require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. Place of Meeting. Meetings of stockholders shall be held at
any place within or without the State of Delaware designated by the Board of
Directors. In the absence of any such designation, stockholders' meetings shall
be held at the principal executive office of the corporation.
Section 2. Annual Meetings. The annual meeting of stockholders shall be
held each year on a date and at a time designated by the Board of Directors. At
each annual meeting directors shall be elected and any other proper business may
be transacted.
Section 3. Quorum.
(a) A majority of the stock issued and outstanding and
entitled to vote at any meeting of stockholders, the holders of which
are present in person or represented by proxy, shall constitute a
quorum for the transaction of business, except as otherwise provided by
law, the Certificate of Incorporation or these Bylaws. A quorum, once
established, shall not be broken by the withdrawal of enough votes to
leave less than a quorum and the votes present may continue to transact
business until adjournment. If, however, such quorum shall not be
present or represented at any meeting of the stockholders, a majority
of the voting stock represented in person or by proxy may adjourn the
meeting from time to time, to reconvene at the same or some other
place,
<PAGE>
and notice need not be given of any such adjourned meeting if the time
and place thereof are announced at the meeting at which the adjournment
is taken. At such adjourned meeting at which a quorum shall be present
or represented, any business may be transacted that 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
thereat.
(b) All elections of directors shall be by a plurality vote
cast of the stockholders present and in person entitled to vote at such
meeting of stockholders. When a quorum is present at any meeting, the
vote of the holders of a majority of the stock having voting power
present represented in person or by proxy shall decide any question
brought before such meeting, unless the question is one upon which by
express provision of law, the Certificate of Incorporation or these
Bylaws, a different vote is required, in which case such express
provision shall govern and control the decision of such question.
Section 4. Proxy. Each stockholder entitled to vote at a meeting of
stockholders or to express consent or dissent to corporate action in writing
without a meeting, may vote in person or may authorize another person or persons
to act for him by proxy appointed in any manner permitted under Delaware law as
the same exists or may hereafter be amended. All proxies must be filed with,
transmitted to or otherwise conveyed to the Secretary of the corporation at the
beginning of each meeting in order to be counted in any vote at such meeting.
Each stockholder shall have one vote for each share of stock having voting
power, registered in his name on the books of the corporation on the record date
set by the Board of Directors as provided in Article V, Section 6 hereof.
Section 5. Special Meetings. Special meetings of the stockholders, for
any purpose or purposes, unless otherwise prescribed by statute or by the
Certificate of Incorporation, may be called by the President and shall be called
by the President or the Secretary at the request in writing of a majority of the
Board of Directors, or at the request in writing of stockholders owning not less
than ten percent (10%) of the entire capital stock of the corporation issued and
outstanding, and entitled to vote. Such request shall state the purpose or
purposes of the proposed meeting. Business transacted at any special meeting of
stockholders shall be limited to the purposes stated in the notice.
Section 6. Notice of Meetings. Whenever stockholders are required or
permitted to take any action at a meeting, a written notice of the meeting shall
be given which notice shall state the place, date and hour of the meeting, and,
in the case of a special meeting, the purpose or purposes for which the meeting
is called. Unless otherwise provided in the Certificate of Incorporation or
these Bylaws, the written notice of any meeting shall be given to each
stockholder entitled to vote at such meeting not less than ten nor more than
sixty days before the date of the meeting. If mailed, notice is given when
deposited in the United States mail,
2
<PAGE>
postage prepaid, directed to the stockholder at his address as it appears on the
records of the corporation.
Section 7. Stockholder List. The officer who has charge of the stock
ledger of the corporation shall prepare and make, at least ten days before every
meeting of stockholders, a complete list of the stockholders entitled to vote at
the meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
ten days prior to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the notice of the
meeting, or, if not so specified, at the place where the meeting is to be held.
The list shall also be produced and kept at the time and place of the meeting
during the whole time thereof, and may be inspected by any stockholder who is
present.
Section 8. Action by Consent of Stockholders. Unless otherwise provided
in the Certificate of Incorporation, any action required or permitted to be
taken at any annual or special meeting of stockholders of the corporation, may
be taken without a meeting, without prior notice and without a vote, if a
consent in writing, setting forth the action so taken, shall be signed by the
holders of outstanding stock having not less than the minimum number of votes
that would be necessary to authorize or take such action at a meeting at which
all shares entitled to vote thereon were present and voted; provided, however,
that no action required or permitted to be taken at any annual meeting of
stockholders of the Corporation shall be taken pursuant to the provisions of
this Section 8 so long as any shares of the Corporation's stock are listed on
the New York Stock Exchange. Prompt notice of the taking of the corporate action
without a meeting by less than unanimous written consent shall be given to those
stockholders who have not consented in writing.
ARTICLE III
BOARD OF DIRECTORS
Section 1. Number. The initial number of directors which shall
constitute the Board of Directors shall be two (2). The number of directors
which shall constitute the whole Board of Directors shall be not less than two
(2) nor more than fifteen (15). The number of directors of the corporation may
be changed by majority vote of the Board of Directors. The directors need not be
stockholders.
Section 2. Term of Office. The directors shall be elected at the annual
meeting of the stockholders, except as provided in Section 3 of this Article,
and each director elected shall hold office for a term of one (1) year and until
his successor is elected and qualified; provided, however, that unless otherwise
restricted by the Certificate of Incorporation or by law, any director or the
entire Board of Directors may be removed, either with or without cause, from
3
<PAGE>
the Board of Directors at any meeting of stockholders by a majority of the stock
represented and entitled to vote thereat.
Section 3. Resignations, Removal and Vacancies. Any director may resign
at any time upon the delivery of written notice to the corporation. Vacancies on
the Board of Directors by reason of death, resignation, retirement,
disqualification, removal from office or otherwise, 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, although less than
a quorum, or by a sole remaining director. The directors so chosen shall hold
office until the next annual election of directors and until their successors
are duly elected and shall qualify, unless sooner displaced. 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 of the State of Delaware 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 4. Power and Authority. The property and business of the
corporation shall be managed by or under the direction of its Board of
Directors. In addition to the powers and authorities by these Bylaws expressly
conferred upon them, the Board of Directors may exercise all such powers of the
corporation and do all such lawful acts and things as are not by statute, the
Certificate of Incorporation or these Bylaws directed or required to be
exercised or done by the stockholders.
Section 5. Place of Meeting. The directors may hold their meetings and
have one or more offices, and keep the books of the corporation outside of the
State of Delaware.
Section 6. Regular Meetings. Regular meetings of the Board of Directors
may be held without notice at such time and place as shall from time to time be
determined by the Board of Directors.
Section 7. Special Meetings. Special meetings of the Board of Directors
may be called by the President on forty-eight hours' notice to each director,
either personally or by mail, telegram or telecopy; special meetings shall be
called by the President or the Secretary in like manner and on like notice on
the written request of two directors unless the Board of Directors consists of
only one director, in which case special meetings shall be called by the
President or Secretary in like manner or on like notice on the written request
of the sole director.
Section 8. Quorum. At all meetings of the Board of Directors a majority
of the authorized number of directors shall be necessary and sufficient to
constitute a quorum for the
4
<PAGE>
transaction of business, and the vote 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, the
Certificate of Incorporation or these Bylaws. 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. If only one director is
authorized, such sole director shall constitute a quorum.
Section 9. Action by Consent in Lieu of Meeting. Unless otherwise
restricted by the Certificate of Incorporation or these Bylaws, any action
required or permitted to be taken at any meeting of the Board of Directors or of
any committee thereof may be taken without a meeting, if all members of the
Board of Directors or committee, as the case may be, consent thereto in writing,
and the writing or writings are filed with the minutes of proceedings of the
Board of Directors or committee.
Section 10. Telephonic Meetings. Unless otherwise restricted by the
Certificate of Incorporation or these Bylaws, members of the Board of Directors,
or any committee designated by the Board of Directors, may participate in a
meeting of the Board of Directors, or any committee, by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other, and such participation in a
meeting shall constitute presence in person at such meeting.
Section 11. Committees of Directors. The Board of Directors may, by
resolution passed by a majority of the whole Board of Directors, designate one
or more committees, each such committee to consist of one or more of the
directors of the corporation. The Board of Directors may designate one or more
directors as alternate members of any committee, who may replace any absent or
disqualified member at any meeting of the committee. In the absence or
disqualification of a member of a committee, the member or members thereof
present at any meeting and not disqualified from voting, whether or not he or
they constitute a quorum, may unanimously appoint another member of the Board of
Directors to act at the meeting in the place of any such absent or disqualified
member. Any such committee, to the extent provided in the resolution of the
Board of Directors, shall have and may exercise all the powers and authority of
the Board of Directors in the management of the business and affairs of the
corporation, and may authorize the seal of the corporation to be affixed to all
papers which may require it; but no such committee shall have the power or
authority in reference to amending the Certificate of Incorporation (except that
a committee may, to the extent authorized in the resolution or resolutions
providing for the issuance of shares of stock adopted by the Board of Directors,
fix the designations and any of the preferences or rights of such shares
relating to dividends, redemption, dissolution, any distribution of assets of
the corporation or the conversion into, or the exchange of such shares for,
shares of any other class or classes or any other series of the same or any
other class or classes of stock of the corporation or fix the number of shares
of any series of stock or authorize the increase or decrease of the shares of
any series), adopting an agreement of merger or consolidation,
5
<PAGE>
recommending to the stockholders the sale, lease or exchange of all or
substantially all of the corporation's property and assets, recommending to the
stockholders a dissolution of the corporation or a revocation of a dissolution,
or amending these Bylaws; and, unless the resolution or the Certificate of
Incorporation expressly so provides, no such committee shall have the power or
authority to declare a dividend, to authorize the issuance of stock or to adopt
a certificate of ownership and merger. Each committee shall keep regular minutes
of its meetings and report the same to the Board of Directors when required.
Section 12. Compensation of Directors. Unless otherwise restricted by
the Certificate of Incorporation or these Bylaws, the Board of Directors shall
have the authority to fix the compensation of directors; provided, however, that
no officer of the corporation shall receive any compensation for serving as a
director of the corporation. The directors who are not officers of the
corporation shall be paid their expenses, if any, and a fixed sum for their
attendance at each meeting of the Board of Directors and each committee meeting.
No such payment shall preclude any director from serving the corporation in any
other capacity and receiving compensation therefor. Members of special or
standing committees may be allowed like compensation for attending committee
meetings.
Section 13. Indemnification. The corporation shall indemnify every
person who was or is a party or is or was threatened to be made a party to any
action, suit, or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that he is or was a director or officer of
the corporation or, while a director or officer of the corporation, is or was
serving at the request of the corporation as a director, officer, employee,
agent or trustee of another corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise, against expenses (including counsel
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding, to the full
extent permitted by applicable law.
Section 14. Transactions with Interested Directors. No contract or
transaction between the corporation and one or more of its directors, or between
the corporation and any other corporation, partnership, association or other
entity in which one or more of its directors are directors or officers of this
corporation or are financially interested, shall be either void or voidable for
this reason alone, or solely because the director is present at or participates
in the meeting of the board or committee which authorizes the contract or
transaction, or solely because his or their votes are counted for such purpose,
if (i) 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
committee, and the board or committee in good faith authorizes the contract or
transaction by the affirmative vote of a majority of the disinterested
directors, even though the disinterested directors be less than a quorum; or
(ii) the material facts as to his relationship or interest and to the contract
or transaction are disclosed or made known to the stockholders entitled to vote
thereon, and the contract or transaction are specifically approved in good
faith; or (iii) the contract or transaction is fair as to the corporation as of
the time it is authorized, approved or ratified by the Board of Directors, a
committee or the stockholders.
6
<PAGE>
ARTICLE IV
OFFICERS
Section 1. Officers.
(a) The officers of this corporation shall be chosen by the
Board of Directors and shall include a President and a Secretary. The
corporation may also have at the discretion of the Board of Directors
such other officers as are desired, including a Chairman of the Board
of Directors, one or more Vice Presidents, a Treasurer, one or more
Assistant Secretaries and Assistant Treasurers, and such other officers
as may be appointed in accordance with the provisions of Section 3 of
this Article IV. In the event there are two or more Vice Presidents,
then one or more may be designated as Executive Vice President, Senior
Vice President, or other similar or dissimilar title. At the time of
the election of officers, the directors may by resolution determine the
order of their rank. Any number of offices may be held by the same
person, unless the Certificate of Incorporation or these Bylaws
otherwise provide.
(b) The Board of Directors, at its first meeting after each
annual meeting of stockholders, shall choose the officers of the
corporation.
(c) The Board of Directors may appoint such other officers and
agents as it shall deem necessary who shall hold their offices for such
terms and shall exercise such powers and perform such duties as shall
be determined from time to time by the Board of Directors.
(d) The salaries of all officers and agents of the corporation
shall be fixed by the Board of Directors.
(e) The officers of the corporation shall hold office until
their successors are chosen and qualify in their stead. Any officer
elected or appointed by the Board of Directors may be removed at any
time by the affirmative vote of a majority of the Board of Directors.
If the office of any officer or officers becomes vacant for any reason,
the vacancy shall be filled by the Board of Directors.
Section 2. Chairman of the Board of Directors. The Chairman of the
Board of Directors, if such an officer be elected, shall, if present, preside at
all meetings of the Board of Directors and exercise and perform such other
powers and duties as may be from time to time assigned to him by the Board of
Directors or prescribed by these Bylaws. If there is no President, the Chairman
of the Board of Directors shall in addition be the Chief Executive Officer of
the corporation and shall have the powers and duties prescribed in Section 3 of
this Article IV.
7
<PAGE>
Section 3. President. Subject to such supervisory powers, if any, as
may be given by the Board of Directors to the Chairman of the Board of
Directors, if there be such an officer, the President shall be the Chief
Executive Officer of the corporation and shall, subject to the control of the
Board of Directors, have general supervision, direction and control of the
business and officers of the corporation. He shall preside at all meetings of
the stockholders and, in the absence of the Chairman of the Board of Directors,
or if there be none, at all meetings of the Board of Directors. He shall be an
ex-officio member of all committees and shall have the general powers and duties
of management usually vested in the office of President and Chief Executive
Officer of corporations, and shall have such other powers and duties as may be
prescribed by the Board of Directors or these Bylaws.
Section 4. Vice Presidents. In the absence or disability of the
President, the Vice Presidents in order of their rank as fixed by the Board of
Directors, or if not ranked, the Vice President designated by the Board of
Directors, shall perform all the duties of the President, and when so acting
shall have all the powers of and be subject to all the restrictions upon the
President. The Vice Presidents shall have such other duties as from time to time
may be prescribed for them, respectively, by the Board of Directors.
Section 5. Secretary. The Secretary shall attend all sessions of the
Board of Directors and all meetings of the stockholders and record all votes and
the minutes of all proceedings in a book to be kept for that purpose; and shall
perform like duties for the standing committees when required by the Board of
Directors. The Secretary shall give, or cause to be given, notice of all
meetings of the stockholders and of the Board of Directors, and shall perform
such other duties as may be prescribed by the Board of Directors or these
Bylaws. He shall keep in safe custody the seal of the corporation, and when
authorized by the Board, affix the same to any instrument requiring it, and when
so affixed it shall be attested by his signature or by the signature of an
Assistant Secretary. The Board of Directors may give general authority to any
other officer to affix the seal of the corporation and to attest the affixing by
his signature.
Section 6. Assistant Secretary. The Assistant Secretary, or if there be
more than one, the Assistant Secretaries in the order determined by the Board of
Directors, or if there be no such determination, the Assistant Secretary
designated by the Board of Directors, shall, in the absence or disability of the
Secretary, perform the duties and exercise the powers of the Secretary and shall
perform such other duties and have such other powers as the Board of Directors
may from time to time prescribe.
Section 7. Treasurer. The Treasurer shall have the custody of the
corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the corporation and shall
deposit all moneys, and other valuable effects in the name and to the credit of
the corporation, in such depositories as may be designated by the Board of
Directors. He shall disburse the funds of the corporation as may be ordered by
the Board of Directors, taking proper vouchers for such disbursements, and shall
render to the Board of Directors, at its regular meetings, or when the Board of
Directors so requires, an
8
<PAGE>
account of all his transactions as Treasurer and of the financial condition of
the corporation. If required by the Board of Directors, he shall give the
corporation a bond, in such sum and with such surety or sureties as shall be
satisfactory to the Board of Directors, for the faithful performance of the
duties of his office and for the restoration to the corporation, in case of his
death, resignation, retirement or removal from office, of all books, papers,
vouchers, money and other property of whatever kind in his possession or under
his control belonging to the corporation.
Section 8. Assistant Treasurer. The Assistant Treasurer, or if there
shall be more than one, the Assistant Treasurers in the order determined by the
Board of Directors, or if there be no such determination, the Assistant
Treasurer designated by the Board of Directors, shall, in the absence or
disability of the Treasurer, perform the duties and exercise the powers of the
Treasurer and shall perform such other duties and have such other powers as the
Board of Directors may from time to time prescribe.
ARTICLE V
THE CORPORATION'S STOCK
Section 1. Certificates of Stock. Every holder of stock of the
corporation shall be entitled to have a certificate signed by, or in the name of
the corporation by, the Chairman or Vice Chairman of the Board of Directors, or
the President or a Vice President, and by the Secretary or an Assistant
Secretary, or the Treasurer or an Assistant Treasurer of the corporation,
certifying the number of shares represented by the certificate owned by such
stockholder in the corporation.
Section 2. Signatures on Certificates. Any or all of the signatures on
the certificate may be a facsimile. In case any officer, transfer agent or
registrar who has signed or whose facsimile signature has been placed upon a
certificate shall have ceased to be such officer, transfer agent, or registrar
before such certificate is issued, it may be issued by the corporation with the
same effect as if he were such officer, transfer agent or registrar at the date
of issue.
Section 3. Powers, Designations and Preferences. If the corporation
shall be authorized to issue more than one class of stock or more than one
series of any class, the powers, designations, preferences and relative,
participating, optional or other special rights of each class of stock or series
thereof and the qualification, limitations or restrictions of such preferences
and/or rights shall be set forth in full or summarized on the face or back of
the certificate which the corporation shall issue to represent such class or
series of stock; provided that, except as otherwise provided in Section 202 of
the General Corporation Law of the State of Delaware, in lieu of the foregoing
requirements, there may be set forth on the face or back of the certificate
which the corporation shall issue to represent such class or series of stock, a
statement that the corporation will furnish without charge to each stockholder
who so requests the powers, designations, preferences and relative,
participating, optional or other special
9
<PAGE>
rights of each class of stock or series thereof and the qualifications,
limitations or restrictions of such preferences and/or rights.
Section 4. Lost, Stolen or Destroyed 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 corporation alleged to
have been lost, stolen or destroyed, upon the making of an affidavit of that
fact by the person claiming the certificate of stock to be lost, stolen or
destroyed. When authorizing such issue of a new certificate or certificates, the
Board of Directors may, in its discretion and as a condition precedent to the
issuance thereof, require the owner of such lost, stolen or destroyed
certificate or certificates, or his legal representative, to advertise the same
in such manner as it shall require and/or to give the corporation a bond in such
sum as it may direct as indemnity against any claim that may be made against the
corporation with respect to the certificate alleged to have been lost, stolen or
destroyed.
Section 5. Transfers of Stock. Upon surrender to the corporation, or
the transfer agent of the corporation, of a certificate for shares duly endorsed
or accompanied by proper evidence of succession, assignation or authority to
transfer, it shall be the duty of the corporation to issue a new certificate to
the person entitled thereto, cancel the old certificate and record the
transaction upon its books.
Section 6. Record Date. In order that the corporation may determine the
stockholders entitled to notice of or to vote at any meeting, or at any
adjournment of a meeting, of stockholders; or entitled to express consent to
corporate action in writing without a meeting; 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 record date shall not precede the date upon
which the resolution fixing the record date is adopted by the Board of
Directors. The record date for determining the stockholders entitled to notice
of or to vote at any meeting of the stockholders or any adjournment thereof
shall not be more than sixty nor less than ten days before the date of such
meeting; provided, however, that so long as any shares of the Corporation's
stock are listed on the New York Stock Exchange, the Record Date shall be no
less than thirty days before such meeting. The record date for determining the
stockholders entitled to consent to corporate action in writing without a
meeting shall not be more than ten days after the date upon which the resolution
fixing the record date is adopted by the Board of Directors. The record date for
any other purpose shall not be more than sixty days prior to such other action;
provided, however, that so long as any shares of the Corporation's stock are
listed on the New York Stock Exchange, the Record Date shall be no less than
thirty days before such meeting. If no record date is fixed, (i) the record date
for determining stockholders entitled to notice of or to vote at any meeting
shall be at the close of business on the day next preceding the day on which
notice is given or, if notice is waived by all stockholders, at the close of
business on the day next preceding the day on which the meeting is held; (ii)
the record date for determining stockholders entitled to express consent to
corporate action in writing without a meeting, when
10
<PAGE>
no prior action by the Board of Directors is required, shall be the first date
on which a signed written consent setting forth the action taken or to be taken
is delivered to the corporation, and when prior action by the Board of Directors
is required, shall be at the close of business on the day on which the Board of
Directors adopts the resolution taking such prior action; and (iii) 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 to such other purpose. A determination of stockholders of record
entitled to notice of or to vote at a meeting of stockholders shall apply to any
adjournment of the meeting; provided, however, that the Board of Directors may
fix a new record date for the adjourned meeting.
Section 7. Registered Stockholders. The corporation shall be entitled
to treat the holder of record of any share or shares of stock as the holder in
fact thereof and accordingly shall not be bound to recognize any equitable or
other claim or interest in such share on the part of any other person, whether
or not it shall have express or other notice thereof, save as expressly provided
by the laws of the State of Delaware.
ARTICLE VI
GENERAL PROVISIONS
Section 1. Dividends.
(a) Dividends upon the capital stock of the corporation,
subject to the provisions of the Certificate of Incorporation, if any,
may be declared by the Board of Directors at any regular or special
meeting, pursuant to law. Dividends may be paid in cash, in property or
in shares of the capital stock, subject to the General Corporation Law
of the State of Delaware and the provisions of the Certificate of
Incorporation.
(b) Before payment of any dividend there may be set aside out
of any funds of the corporation available for dividends such sum or
sums as the directors from time to time, in their absolute discretion,
think proper as a reserve fund to meet contingencies, or for equalizing
dividends, or for repairing or maintaining any property of the
corporation, or for such other purpose as the directors shall think
conducive to the interests of the corporation, and the directors may
abolish any such reserve.
Section 2. Checks. All checks or demands for money and notes of the
corporation shall be signed by such officer or officers as the Board of
Directors may from time to time designate.
Section 3. Fiscal Year. The fiscal year of the corporation shall be
fixed by resolution of the Board of Directors.
11
<PAGE>
Section 4. Seal. The corporate seal shall have inscribed thereon the
name of the corporation, the year of its organization and the words "Corporate
Seal, Delaware." Said seal may be used by causing it or a facsimile thereof to
be impressed or affixed or reproduced or otherwise.
Section 5. Notices.
(a) Whenever, under the provisions of the law, the Certificate
of Incorporation or these Bylaws, notice is required to be given to any
director or stockholder, it shall not be construed to mean personal
notice, but such notice may be given in writing, by mail, addressed to
such director or stockholder, at his address as it appears on the
records of the corporation, with postage thereon prepaid, and such
notice shall be deemed to be given at the time when the same shall be
deposited in the United States mail. Notice to director may also be
given by telegram or telecopy.
(b) Whenever any notice is required to be given under the
provisions of the law, the Certificate of Incorporation or these
Bylaws, a waiver thereof in writing, signed by the person or persons
entitled to said notice, whether before or after the time stated
therein, shall be deemed to be equivalent.
Section 6. Annual Statement. The Board of Directors shall present at
each annual meeting, and at any special meeting of the stockholders when called
for by vote of the stockholders, a full and clear statement of the business and
condition of the corporation.
ARTICLE VII
AMENDMENTS
Section 1. Amendments. These Bylaws may be altered, amended or repealed
or new Bylaws may be adopted by the stockholders or by the Board of Directors,
when such power is conferred upon the Board of Directors by the Certificate of
Incorporation, at any regular meeting of the stockholders or of the Board of
Directors or at any special meeting of the stockholders or of the Board of
Directors if notice of such alteration, amendment, repeal or adoption of new
Bylaws be contained in the notice of such special meeting. If the power to
alter, adopt, amend or repeal the Bylaws is conferred upon the Board of
Directors by the Certificate of Incorporation it shall not divest or limit the
power of the stockholders to alter, adopt, amend or repeal the Bylaws.
12
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