<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
Commission file number: 33-67866
A I M MANAGEMENT GROUP INC.
(Exact name of registrant as specified in its charter)
Delaware 74-1881407
(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification No.)
11 Greenway Plaza, Suite 1919, Houston, Texas 77046
(Address of principal executive offices including zip code)
(713) 626-1919
(Registrant's telephone number, including area code)
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
--- ---
At April 30, 1996, there were 2,317,700 shares outstanding of the
Registrant's common stock, par value $0.0025 per share, and 1,037,100 shares
outstanding of the Registrant's Class B common stock, par
value $0.0025 per share (the "Class B Common Stock").
<PAGE> 2
A I M MANAGEMENT GROUP INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands)
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
----------- ------------
(unaudited)
<S> <C> <C>
ASSETS
Cash and cash equivalents ................................................ $45,659 $42,148
Accounts receivable:
Due from dealers for sales of capital stock of affiliated
registered investment companies ...................................... 1,628 1,670
Management fees from affiliated registered investment companies 18,544 15,949
Management fees due from managed accounts .............................. 264 360
Other, primarily due from affiliated registered investment companies ... 14,786 12,071
-------- --------
Total accounts receivable ............................................ 35,222 30,050
-------- --------
Prepaid expenses ......................................................... 1,375 1,343
Investments:
Affiliated registered investment companies, at market .................. 7,557 6,787
Other equity investments, at market .................................... 1,232 1,041
-------- --------
Total investments .................................................... 8,789 7,828
-------- --------
Furniture, equipment and leasehold improvements, at cost, less
accumulated depreciation and amortization of $15,403 in 1996
and $14,044 in 1995 .................................................... 17,488 15,760
Acquisition and organization costs, net of accumulated amortization of
$12,899 in 1996 and $12,114 in 1995 .................................... 38,217 38,961
Financing costs, net of accumulated amortization of $5,848 in 1996
and $5,372 in 1995 ..................................................... 6,262 6,738
Deferred sales commissions, net of accumulated amortization of
$18,021 in 1996 and $15,872 in 1995 .................................... 36,067 39,073
Deferred charges and other assets ........................................ 11,386 15,754
-------- --------
Total assets ......................................................... $200,465 $197,655
======== ========
</TABLE>
See accompanying notes to unaudited interim consolidated financial statements.
2
<PAGE> 3
A I M MANAGEMENT GROUP INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS - continued
(in thousands, except share amounts)
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
--------- ------------
(unaudited)
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' DEFICIT
Liabilities:
Payables to affiliated registered investment
companies for sales of their capital stock ... $ 1,620 $ 1,662
Accounts payable and accrued expenses ......... 17,971 20,752
Dividends payable ............................. 7,213 --
Interest payable .............................. 4,045 1,482
Federal and state income taxes payable ........ 7,031 5,832
Deferred compensation payable ................. 11,266 31,831
Credit facility to finance deferred sales
commissions .................................. 39,941 43,921
Senior secured notes .......................... 110,000 110,000
Deferred income tax ........................... 9,878 6,254
-------- --------
Total liabilities ..................... 208,965 221,734
-------- --------
Class B common stock of $.0025 par value per
share subject to Redemption Agreement,
including an increase in the Redemption
Price of $32,839 in 1996 and 24,590 in
1995: authorized, issued and outstanding
1,037,100 shares ......................... 67,839 59,590
Stockholders' deficit:
Common stock of $.0025 par value per share:
authorizing 4,240,000 shares, in 1996 and
1995, issued and outstanding 2,317,700
shares in 1996 and 2,243,800 shares in
1995 ...................................... 6 6
Additional paid-in capital ................. 5,255 3,275
Deficit .................................... (82,236) (87,339)
Net unrealized appreciation of marketable
equity securities, net of applicable
taxes ..................................... 698 450
Translation loss ........................... (62) (61)
-------- --------
Total stockholders' deficit ............ (76,339) (83,669)
-------- --------
Total liabilities and stockholders'
deficit ............................... $200,465 $197,655
======== ========
</TABLE>
See accompanying notes to unaudited interim consolidated financial statements.
3
<PAGE> 4
A I M MANAGEMENT GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
--------------------
1996 1995
------- -------
<S> <C> <C>
Management and advisory fees............................... $51,403 $28,202
Commission income.......................................... 15,021 5,131
Distribution fee income.................................... 8,792 4,743
Other operating revenues................................... 9,265 5,591
------- -------
Total operating revenues........................... 84,481 43,667
------- -------
Compensation and related expenses.......................... 27,395 15,795
Other administrative expenses.............................. 15,704 9,487
Interest and amortization of debt issuance costs........... 3,669 4,510
Depreciation and amortization.............................. 4,280 4,298
Other expenses............................................. 937 449
------- -------
Total operating expenses........................... 51,985 34,539
------- -------
Income before taxes........................................ 32,496 9,128
Income tax expense......................................... 11,944 3,534
------- -------
Net income................................................. $20,552 $ 5,594
======= =======
Net income................................................. $20,552 $ 5,594
Increase in Redemption Price of Class B
Common Stock (see Note 2).......................... (8,249) --
------- -------
Net income applicable to common stock...................... $12,303 $ 5,594
======= =======
Earnings per share......................................... $ 3.44 $ 1.59
======= =======
Weighted average shares.................................... 3,581 3,516
======= =======
</TABLE>
See accompanying notes to unaudited interim consolidated financial statements.
4
<PAGE> 5
A I M MANAGEMENT GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-----------------------
1996 1995
------ ------
<S> <C> <C>
Cash flows from operating activities
Net income ............................................................. $20,552 $ 5,594
Adjustments to reconcile net income to net cash provided by (used in)
operating activities:
Depreciation and amortization ........................................ 4,739 4,550
Deferred income tax .................................................. 3,490 5,615
Change in assets and liabilities:
Increase in accounts receivable ...................................... (5,172) (2,470)
Decrease (increase) in prepaid expenses .............................. (32) 236
(Increase) decrease in deferred sales commissions .................... 857 (13,076)
Decrease in deferred charges and other assets ........................ 4,368 3,404
Increase (decrease) in payables to affiliated registered
investment companies ............................................... (42) 463
Increase (decrease) in accounts payable and accrued expenses ......... (2,781) 3,363
Increase in interest payable ......................................... 2,563 2,469
Increase (decrease) in income taxes payable .......................... 3,086 (3,467)
Decrease in deferred compensation payable ............................ (20,565) (9,340)
------- -------
Total adjustments .................................................... (9,489) (8,253)
------- -------
Net cash provided by (used in) operating activities .................. 11,063 (2,659)
------- -------
Cash flows from investing activities:
Purchase of investments in affiliated registered
investment companies ............................................... (579) (226)
Proceeds from sale of government security .............................. -- 12,000
Purchase of furniture, equipment and leasehold improvements ............ (3,087) (788)
------- -------
Net cash provided by (used in) investing activities ................ (3,666) 10,986
------- -------
Cash flows from financing activities:
Proceeds for long-term debt ............................................ -- 7,998
Principal repayments of long-term debt ................................. (3,979) (4,168)
Payment of common stock dividend ....................................... -- (2,857)
Proceeds from exercise of options ...................................... 93 --
------- -------
Net cash provided by (used in) financing activities ................ (3,886) 973
------- -------
Net increase in cash and cash equivalents .......................... 3,511 9,300
Cash and cash equivalents at beginning of year ........................... 42,148 25,534
------- -------
Cash and cash equivalents at end of period ............................... 45,659 34,834
======= =======
Supplement cash flow disclosure:
Cash paid for interest ................................................. $ 578 $ 1,593
Cash paid for taxes .................................................... $ 5,213 $ 1,341
</TABLE>
See accompanying notes to unaudited interim consolidated financial statements.
5
<PAGE> 6
A I M MANAGEMENT GROUP INC. AND SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(1) General
The consolidated financial statements of A I M Management Group Inc. and
its subsidiaries (collectively, the "Company") have been prepared without
audit, pursuant to the rules and regulations of the Securities and Exchange
Commission and in accordance with generally accepted accounting principles, and
reflect all normal recurring adjustments which, in the opinion of management,
are necessary to present fairly the results of the interim periods presented.
These financial statements do not include all disclosures associated with
annual financial statements and, accordingly, should be read in conjunction
with the financial statements and notes contained in the Form 10-K of A I M
Management Group Inc. for the year ended December 31, 1995, File Number
33-67866. Certain reclassifications have been made to conform prior year
amounts to the 1996 presentation.
(2) Class B Common Stock
In connection with the sale of the Class B Common Stock, the purchasers
received the right to sell the Company the shares of Class B Common Stock (the
"Put"). The Put may be exercised after August 20, 2000, only of the Company
has not completed a public stock offering with the net proceeds in excess of
$25 million ("Qualified Public Stock Offering") prior thereto. Pursuant to the
Put, up to 345,700 shares may be sold to the Company in each of the 12-month
periods ended August 20, 2001, 2002 and 2003, at a purchase price equal to an
agreed upon formula price ("Redemption Price"). Currently, under the terms of
the bank facility agreement, the Company is precluded from purchasing the Class
B Common Stock. In addition, the indenture for the senior secured notes
contains restrictions related to the purchase of Class B Common Stock by the
Company.
The Class B Common Stock is recorded at the higher of its selling price or
the present value of the formula price in accordance with Staff Accounting
Bulletin #64 issued by the Securities and Exchange Commission. The present
value of the future formula price is based on the agreed upon formula times the
maximum number of shares which could be put to the Company in 2001, 2002 and
2003, discounted using the Company's cost of capital.
During the first quarter of 1996, a pro rata portion of the present value
of the Put based on the anticipated formula price at December 31, 1996 exceeded
the original selling price. As a result, the Company increased the deficit by
$8.2 million and increased the recorded value of the Class B Common Stock
during the first quarter of 1996. If the Company completes a Qualified Public
Stock Offering prior to August 20, 2000, increases in the value of the Put over
the selling price as well as the original selling price of $35 million of the
Class B Common Stock will be restored to stockholders' equity.
Periodic increases in the carrying amount of Class B Common Stock are
treated as dividends in the calculation of earnings per share. The current
increase in the value of the Put reduced earnings per share by approximately
$2.30 for the three months ended March 31, 1996.
6
<PAGE> 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
GENERAL
A I M Management Group Inc.'s largest sources of revenues are mutual
fund management and advisory fees, commission income earned from underwriting
and distributing retail mutual fund shares, distribution fee income and transfer
agent fees. Other sources of operating revenues include accounting service fees
and interest income. The term "Company," as used herein, unless the context
otherwise requires, refers to A I M Management Group Inc. and its direct and
indirect subsidiaries.
The Company sponsors, markets and provides investment advisory,
distribution and administrative services to the AIM Family of Funds, a family of
retail mutual funds that consists of 23 portfolios reflecting a broad range of
investment objectives and strategies. In addition, the Company manages and
distributes a retail mutual fund sold exclusively through a contractual plan
arrangement, manages a closed-end fund which invests primarily in convertible
securities and engages in short-selling investment strategies, and co-sponsors a
variable annuity product which gives investors the ability to invest in nine
separate portfolios. These specialized retail fund products and the AIM Family
of Funds are together herein referred to as the "AIM Retail Funds."
Certain retail classes of shares of the AIM Retail Funds are sold with
a front-end sales charge ("Class A Shares"). Commission income earned by the
Company on sales of Class A Shares is based on the amount of such shares which
are sold, and is paid from the customer-funded sales charge less an applicable
concession to the selling dealer. The Company also earns a fee from certain
insurance companies for services performed in connection with certain sales of
units of the variable annuity product. Certain AIM Retail Funds also offer
classes of shares which are sold without a front-end sales charge, but which are
generally subject to a contingent deferred sales charge ("CDSC") at the time of
their redemption ("Class B Shares"). The Company pays commissions at the time of
sale to financial intermediaries which sell Class B Shares.
The Company also sponsors and provides investment advisory and related
administrative services to a number of institutional mutual funds (or classes of
funds) sold primarily to banks (acting for themselves or in a fiduciary
capacity), collective and common trust funds, and accounts of public entities
(collectively, the "AIM Institutional Funds"). Sales of the AIM Institutional
Funds(R) do not generate sales commission revenue to the Company. The AIM Retail
Funds and the AIM Institutional Funds are collectively referred to herein as the
"AIM Funds." The Company also provides investment advisory services to
individuals, corporations, pension plans and other private investment advisory
accounts (the "Managed Accounts"), provides investment sub-advisory services to
two Canadian mutual funds and one portfolio of an open-end registered investment
company that is offered to separate accounts of variable insurance companies
(collectively, the "Sub-Advised Funds") and manages an offshore investment
company domiciled in Ireland (the "Offshore Fund"). As of March 31, 1996, total
assets under the Company's management were approximately $48.5 billion.
Mutual fund management and advisory fees are based on the average daily
net assets of the AIM Funds. Such fees are accrued daily by each AIM Fund and
paid to the Company monthly. The Company's management and advisory fees
fluctuate due to changes in the total value of the net assets under management.
Variations in the level of assets under management result from both sales and
redemptions of AIM Fund shares and changes in the market value of the
investments of the AIM Funds.
From time to time, the Company may waive all or a portion of its
management fees or 12b-1 Plan (as hereinafter defined) service or distribution
fees and/or assume all or a portion of the operating expenses of an AIM Fund for
competitive reasons and in response to commitments made to the directors of such
fund. In some cases, the Company may waive all or a portion of its management
fees and 12b-1 Plan distribution fees for new funds or to reflect economies of
scale at higher asset levels. During the first quarter of 1996, the Company
waived $2.2 million in management fees and assumed $0.1 million in operating
expenses for certain AIM Funds. Such waivers and assumptions were made for the
sole purpose of reducing the operating expenses of such AIM Funds and were not
made for the purposes of mitigating any losses from investments in derivative
securities or other portfolio securities. It is difficult to measure the effect
such waivers and
7
<PAGE> 8
assumptions had on the Company's results of operations because the Company
believes they enhance its ability to retain the assets under its management and
to attract additional investments in the AIM Funds. The Company currently is
unable to estimate to what extent, if any, it may terminate existing fee waivers
or cease assuming operating expenses in the future. It is not possible to
predict what effect, if any, the termination of arrangements regarding fee
waivers and assumptions of expenses may have on the future level of assets under
the Company's management.
Certain AIM Funds also pay service fees and distribution fees pursuant
to distribution plans ("12b-1 Plans") adopted pursuant to Rule 12b-1 under the
Investment Company Act of 1940, as amended. These distribution and service fees
also are based on the value of the net assets of the applicable funds or classes
and are subject to certain limits imposed under rules of the National
Association of Securities Dealers, Inc. See "Capital Resources and Liquidity"
for a discussion of the Company's ability to sell the right to receive future
12b-1 Plan distribution fees and CDSCs attributable to certain Class B Shares.
Pursuant to administrative service agreements, the Company is reimbursed for all
or a portion of the expenses, including salary, general and administrative and
office lease expenses, incurred by the Company in providing certain
administrative services (such as fund accounting) to the AIM Funds. Fund
accounting reimbursements paid to the Company by an AIM Fund are based on the
Company's costs of providing such service. Transfer agent fees paid to the
Company by the AIM Retail Funds are based on the number of shareholder accounts
outstanding during a calendar month, and transfer agent fees paid by the AIM
Institutional Funds are based on the average daily net assets in the
institutional shareholder accounts.
The Company's largest expenses are compensation and related expenses
and other administrative expenses, which includes expenses related to mutual
fund sales promotion.
The AIM Family of Funds, The AIM Family of Funds and Design (i.e., the
AIM logo), AIM and Design, AIM, AIM LINK and AIM Institutional Funds are
registered service marks of the Company.
8
<PAGE> 9
NET ASSETS UNDER MANAGEMENT AND ADMINISTRATION
The following table sets forth the Company's net assets under
management and administration at March 31, 1996 and 1995, and at December 31,
1995, 1994 and 1993.
<TABLE>
<CAPTION>
NET ASSETS UNDER MANAGEMENT AND ADMINISTRATION
(in millions)
March 31, December 31,
--------------------- ---------------------------------------
1996 1995 1995 1994 1993
----- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Retail:
Equity $31,097 $15,736 $26,461 $13,777 $ 12,056
Money Market 682 471 656 605 373
Fixed Income 3,072 2,028 2,784 1,859 1,887
Closed-End 69 65 68 64 68
--------- --------- ------- -------- --------
Total Retail 34,920 18,300 $29,969 16,305 14,384
--------- --------- ------- -------- --------
Institutional:
Money Market 12,395 9 ,650 10,827 10,664 10,401
Other 421 242 383 221 257
--------- --------- ------- -------- --------
Total Institutional 12,816 9,892 11,210 10,885 10,658
--------- --------- ------- -------- --------
Managed Accounts 669 280 268 284 286
--------- --------- ------- -------- --------
Sub-Advised Funds 86 25 60 -- ---
--------- --------- ------- -------- --------
Offshore Fund 46 -- 39 -- ---
--------- --------- ------- -------- --------
Total Net Assets $ 48,537 $28,497 $41,546 $ 27,474 $ 25,328
========= ========= ======= ======== ========
</TABLE>
The net assets of the AIM Retail Funds increased to $34.9 billion at
March 31, 1996 from $30.0 billion at December 31, 1995 and $18.3 billion at
March 31, 1995. These increases of $4.9 billion, or 16.3%, and $16.6 billion, or
90.7%, respectively, were attributable to a number of factors, including
increases in the market value of the assets held in the AIM Retail Funds'
portfolios resulting from generally improving equity markets and increased sales
of AIM Retail Fund shares. Approximately 75.0% of the increase in the assets of
the Company's fixed income and equity funds from December 31, 1995 to March 31,
1996 was due to an increase in the net sales of such funds and approximately
25.0% of such increase was primarily due to appreciation in the value of the
securities held in such funds' portfolios. The increase in sales of the AIM
Retail Funds during the first quarter of 1996 was primarily due to the strong
performance of several of the AIM Retail Funds during recent years, expansion of
the Company's retail distribution system, improved name recognition of the AIM
Family of Funds and the general increase in cash flows into equity and fixed
income mutual funds during the first quarter of 1996. The net assets of the AIM
Institutional Funds increased by 14.3% from December 31, 1995 to March 31, 1996,
and by 29.3% from March 31, 1995 to March 31, 1996. Total net assets under
management increased by $7.0 billion, or 16.9%, from December 31, 1995 to March
31, 1996, and by $20.0 billion, or 70.2%, from March 31, 1995 to March 31, 1996.
9
<PAGE> 10
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Total Operating Revenues. Total operating revenues increased to $84.5
million for the first quarter of 1996 from $43.7 million for the first quarter
of 1995. This increase of $40.8 million, or 93.4%, was primarily due to an
increase in the total amount of management and advisory fees received from the
AIM Retail Funds.
Management and Advisory Fees. Revenues from management and advisory
fees increased to $51.4 million for the first quarter of 1996 from $28.2
million for the first quarter of 1995. This increase of $23.2 million, or
82.3%, was primarily due to growth in net assets under management in the AIM
Retail Funds, as discussed above.
Commission Income. Revenues from retained portions of AIM Retail Fund
sales commissions increased to $15.0 million for the first quarter of 1996 from
$5.1 million for the first quarter of 1995. This increase of $9.9 million, or
194.1%, was primarily due to an increase in commissionable sales of Class A
Shares. Sales of Class A Shares increased 200.0% to $3.0 billion for the first
quarter of 1996 from $1.0 billion for the first quarter of 1995. The increase
in sales of Class A Shares was due primarily to the strong performance of
several of the AIM Retail Funds offering Class A Shares during recent years,
expansion of the Company's retail distribution system, improved name
recognition of the AIM Family of Funds and the general increase in cash flows
into equity and fixed income mutual funds during the first quarter of 1996.
Based on industry trends, the Company anticipates that sales of its Class A
Shares as a percentage of its overall sales will decrease over time.
Distribution Fee Income. Distribution fee income increased to $8.8
million for the first quarter of 1996 from $4.7 million for the first quarter of
1995. This increase of $4.1 million, or 87.2%, was primarily due to appreciation
of the assets attributable to Class A Shares and Class B Shares, and an increase
in sales of Class A Shares and Class B Shares, for the first quarter of 1996.
Distribution fee income includes both distribution fees and service fees
received by the Company. The Company retains service fees on Class A Shares sold
in amounts of $1.0 million or more and all Class B Shares for 12 months after
the sale of such shares. Service fees retained by the Company have increased in
connection with appreciation of the assets attributable to, and an increase in
sales of, Class A Shares that were sold in amounts of $1 million or more and all
Class B Shares. Additionally, the Company receives distribution fees from
certain Class A Shares. Such Class A Share distribution fees increased in
connection with appreciation of the assets attributable to, and an increase in
the sales of, such Class A Shares. Distribution fees related to sales of Class B
Shares after April 1, 1995 are not recognized as income of the Company since the
Company has sold these distribution fees to Citibank, N.A., as discussed below.
See "Capital Resources and Liquidity." During the first quarter of 1995,
distribution fees in the amount of $6.2 million related to Class B Shares sold
since April 1, 1995 were sold to Citibank, N.A. and thus were not recognized as
income to the Company. To some extent, if the Company had not sold such
distribution fees to Citibank, N.A., the related distribution fee income that
would have been recognized by the Company would have been offset by amortization
expenses incurred by the Company. The Company retains distribution fees related
to sales of Class B Shares prior to April 1, 1995. Sales of Class B Shares
represent an increasing proportion of the AIM Funds' sales volume, and the
Company anticipates that such trend will continue.
Other Operating Revenues. Other operating revenues increased to $9.3
million for the first quarter of 1996 from $5.6 million for the first quarter of
1995. This increase of $3.7 million, or 66.1%, was primarily due to an increase
in transfer agent fees during the first quarter of 1996. Transfer agent fees
increased to $7.0 million for the first quarter of 1996 from $4.0 million for
the first quarter of 1995. This increase of 75.0% was primarily due to an
increase in the number of shareholder accounts in the AIM Retail Funds.
Total Operating Expenses. Total operating expenses increased $17.5
million, or 50.7%, to $52.0 million for the first quarter of 1996 from $34.5
million for the first quarter of 1995. This increase was primarily due to an
increase in compensation and related expenses and other administrative expenses.
Compensation and Related Expenses. Compensation and related expenses
increased $11.6 million, or 73.4%, to $27.4 million for the first quarter of
1996 from $15.8 million for the first quarter of 1995. This
10
<PAGE> 11
increase was primarily due to an increase in salary and related expenses related
to growth in the size of the Company's operations and growth in the net assets
managed by the Company, an increase in the amount recorded as bonus expense
under the Company's incentive compensation plan relating to increases in the
Company's income and a change in the timing of the payments of awards under such
plan, and an increase in the amount recorded as wholesalers' bonus relating to
increases in sales of the AIM Funds.
Other Administrative Expenses. Other administrative expenses increased
$6.2 million, or 65.3%, to $15.7 million for the first quarter of 1996 from $9.5
million for the first quarter of 1995. This increase was primarily due to an
increase in business promotional costs related to the Company's expansion of its
retail distribution system and an increase in concessions paid to dealers
related to an increase in sales of Class A Shares in the amount of $1 million or
more.
Net Income. Net income increased to $20.6 million for the first quarter
of 1996 from $5.6 million for the first quarter of 1995. This increase of
$15.0 million, or 267.9%, was due to the changes in the Company's revenues and
expenses discussed above.
CAPITAL RESOURCES AND LIQUIDITY
Net increase in cash and cash equivalents was $3.5 million during the
first quarter of 1996, which represented a decrease of 62.4% from $9.3 million
during the first quarter of 1995. At March 31, 1996, the Company had liquid
assets of $88.5 million, including $45.7 million in unrestricted cash and cash
equivalents. Payables and accrued expenses due within 12 months totaled $49.1
million at March 31, 1996.
Net cash provided by operating activities was $11.1 million during the
first quarter of 1996, which represented a 511.1% increase from $2.7 million net
cash used in operating activities during the first quarter of 1995. The increase
was primarily due to the increase in the Company's net income during the first
quarter of 1996, as discussed above, and a decrease in deferred sales
commissions paid by the Company due to the Company's utilization of the Program
(as defined below) to fund the payment of certain sales commissions on Class B
Shares. Net cash provided by operating activities would have increased further
if not for an increase in the payments made by the Company to participants in
the Company's incentive compensation plan, as described above.
Net cash used in investing activities was $3.7 million during the first
quarter of 1996, which represented a 133.6% decrease from $11.0 million net cash
provided by investing activities during the first quarter of 1995. This decrease
was primarily related to the Company's sale of its investment in a government
security during the first quarter of 1995 and its increased capital expenditures
during the first quarter of 1996. The Company spent approximately $3.1 million
during the quarter ended March 31, 1996 on capital expenditures relating
primarily to office expansion. The Company leases all of its operating
facilities.
Net cash used in financing activities was $3.9 million during the first
quarter of 1996, which represented a 490.0% decrease from $1.0 million in net
cash provided by financing activities during the first quarter of 1995. This
decrease was primarily due to the Company's cessation of its borrowings under
the Bank Facility to finance the payment of deferred sales commissions to
financial intermediaries that sell Class B Shares beginning during the second
quarter of 1995, as discussed below. The Company funded payments of sales
commissions to financial intermediaries who sell Class B Shares from April 1,
1995 through March 31, 1996 under the Program with Citibank, as discussed below.
Outstanding borrowings under a credit facility entered into by the
Company in August 1993 (the "Bank Facility") and the 9% Senior Secured Notes due
2003 (the "Notes") issued by the Company in 1993 in connection with the
recapitalization of the Company totaled $149.9 million at March 31, 1996. The
amounts reborrowed pursuant to the Bank Facility to finance deferred sales
commissions are due in full on February 20, 1999 and are subject to mandatory
prepayment every 30 days in an amount equal to the 12b-1 Plan distribution fees
for certain Class B Shares paid by AIM Retail Funds offering Class B Shares and
the CDSCs paid by certain Class B shareholders. The mandatory prepayments by the
Company are credited toward a minimum annual payment that is required under the
Bank Facility. As of April 30, 1996, the Company owed
11
<PAGE> 12
approximately $39.3 million under the Bank Facility for amounts reborrowed to
finance deferred sales commissions. As of April 30, 1996, approximately $44.7
million was available under the Bank Facility as a series of term loans to the
Company for working capital purposes. The $110.0 million of Notes bear interest
at the rate of 9% per annum. Interest is payable in semiannual installments of
approximately $5.0 million. In April 1996, the Company repurchased an aggregate
of $10.0 million of the Notes.
Deferred sales commissions paid to financial intermediaries for selling
Class B Shares that are financed under the Bank Facility are capitalized and
amortized over a period of six years (the period of time during which the
investor is subject to a CDSC at the time of redemption of Class B Shares) for
accounting purposes and are expensed currently for tax purposes. CDSC payments
received by the Company related to Class B Shares sold before April 1, 1995
currently reduce unamortized deferred sales commissions. A CDSC paid to the
Company is greater than its related unamortized portion of the commission paid
to a financial intermediary for a sale of Class B Shares.
In May 1995, the Company executed agreements establishing a program
(the "Program") with Citibank, N.A. ("Citibank") to provide additional funding
for payments of sales commissions to financial intermediaries who sell Class B
Shares once amounts available under the Bank Facility to fund such sales
commissions had been substantially utilized. Pursuant to the Program, during the
second quarter of 1995 the Company began selling the right to receive future
distribution fees under the 12b-1 Plans and CDSCs (the "Fees") attributable to
certain Class B Shares sold on or after April 1, 1995 to Citibank for a purchase
price equal to a percentage of the price at which each Class B Share is sold. In
February 1996, the terms of the Program were amended to increase the minimum
aggregate purchase price limit to $175 million, which would fund commissions
payable on the sale of approximately $4.4 billion of Class B Shares. From April
1, 1995 through April 30, 1996, the Company received $168.6 million from
Citibank for the sale of Fees under the Program. In March 1996, the Company
received approximately $21.5 million from Citibank for the sale of Fees under
the Program. Effective May 3, 1996, the Company executed an amendment to the
terms of the Program whereby the minimum aggregate purchase price limit was
increased by $40 million and can be further increased from time to time in
connection with securitization transactions closed by Citibank. Future increases
in the minimum aggregate purchase price limit under the Program will depend upon
the amount of each securitization transaction closed by Citibank. The Company
intends to continue utilizing the Program to finance the payment of sales
commissions to financial intermediaries who sell Class B Shares for the near
future.
The Company is currently negotiating a credit facility with Citibank
and other financial institutions to provide an alternative method of funding the
payment of sales commissions to financial intermediaries who sell Class B Shares
(the "Proposed Credit Facility"). The amount of the Proposed Credit Facility
would be $200.0 million, including approximately $39.3 million outstanding under
the Bank Facility as of April 30, 1996. The Company would have the ability to
increase such amount up to a maximum of $250.0 million if certain conditions
were met. Part of the proceeds of the Proposed Credit Facility would be used to
repay amounts reborrowed under the Bank Facility to finance the Company's
payment of deferred sales commissions on Class B Shares. The Proposed Credit
Facility would be secured only by the Fees attributable to Class B Shares which
have not been sold under the Program. The Company is considering requesting the
lenders under the Bank Facility to release the security interests securing the
amount that would remain available to the Company under the Bank Facility. If
the security interests securing the remaining portion of the Bank Facility are
released, the security interests securing the Notes would also be released as
provided in the indenture under which the Notes were issued. The Company is also
currently exploring other sources of financing for future periods.
Stockholders' deficit decreased 8.8% to $76.3 million at March 31, 1996
from $83.7 million at December 31, 1995. The decrease in stockholders' deficit
was primarily due to the increase in the Company's net income discussed above.
Stockholders' deficit would have decreased further if not for the Company's
accounting treatment of the Put (as defined below) owned by TA Associates, Inc.
In connection with its purchase of the Company's Class B Common Stock, par value
$0.0025 per share (the "Class B Common"), TA Associates, Inc. received the right
to sell to the Company the shares of Class B Common (the "Put") after August 20,
2000 if the Company has not completed a public stock offering with net proceeds
in excess of $25.0 million (a "Qualified Public Stock Offering") prior thereto.
Pursuant to the Put, up to 345,700 shares of Class
12
<PAGE> 13
B common may be sold to the Company in each of the 12 month periods ended August
20, 2001, 2002 and 2003 at a purchase price equal to an agreed upon formula
price (the "Redemption Price"). Currently, the Company is precluded by the terms
of the Bank Facility agreement from purchasing the Class B Common. The indenture
for the Notes also contains restrictions related to the purchase of Class B
Common. The Class B Common is recorded at the higher of its selling price or the
present value of the formula price, which is based on an agreed upon formula.
During the first quarter of 1996, a pro rata portion of the present value of the
Put based on the anticipated formula price at December 31, 1996 exceeded the
original selling price. Accordingly, the Company increased the recorded value of
the Put by $8.2 million and increased the stockholders' deficit by $8.2 million
during the first quarter of 1996. If the Company completes a Qualified Public
Stock Offering prior to August 20, 2000, the entire recorded value of the Put
will be restored to stockholders' equity.
The Company has several subsidiaries which are registered in various
jurisdictions as broker-dealers or investment managers. At March 31, 1996, the
Company's ability to obtain dividends from such subsidiaries was limited by net
capital requirements in the aggregate amount of $0.8 million designed to ensure
the liquidity of such subsidiaries.
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is not a party to any material pending litigation, nor is
it aware of any threatened material legal proceeding involving the Company or
its subsidiaries or any of the property of the Company or its subsidiaries.
ITEM 2. CHANGES IN SECURITIES
Not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Effective March 1, 1996, a majority of the holders of the Common Stock
of the Company, par value $0.0025 per share ("Common Stock"), and a majority of
the holders of the Class B Common consented to an amendment and restatement of
the Company's 1993 Stock Option Plan for Outside Directors effective December
15, 1995.
At the annual meeting of shareholders of the Company on March 20, 1996,
the shareholders voted to elect Charles T. Bauer, Joseph R. Canion, Michael J.
Cemo, Gary T. Crum, Robert H. Graham, P. Andrews McLane, Sanford R. Robertson
and Stephen K. West as directors of the Company and appointed KPMG Peat Marwick
LLP as the Company's independent public accountants for the Company's fiscal
year ending December 31, 1996. The holders of 2,514,590 shares of the Company's
common stock, par value $0.0025 per share ("Common Stock"), and the Company's
Class B common stock, par value $0.0025 per share ("Class B Common"), as
adjusted pursuant to the Company's amended and restated certificate of
incorporation, were present at the meeting in person or represented by proxy and
voted all of such shares for the election of each of the aforementioned
directors and the appointment of KPMG Peat Marwick LLP as the Company's
independent public accountants.
ITEM 5. OTHER INFORMATION
Not applicable.
13
<PAGE> 14
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits
<TABLE>
<S> <C>
3.1 Amended and Restated By-Laws of the Company effective December 9, 1993.
3.2 Amendment No. 1, effective October 3, 1995, to the Amended and Restated
By-Laws of the Company effective December 9, 1993.
10.1 Amendment No. 2 (Letter Agreement), dated as of February 8, 1996, to the
Purchase and Sale Agreement, among the Company, Citibank, N.A. and Citicorp
North America, Inc. dated May 2, 1995.
10.2 Employment agreement between the Company and Michael J. Cemo dated as of
January 1, 1996.
10.3 Amendment No. 23, dated March 18, 1996, to the Lease Contract for premises
located at 11 Greenway Plaza, Houston, Texas.
10.4 Amendment No. 24, dated March 18, 1996, to the Lease Contract for premises
located at 11 Greenway Plaza, Houston, Texas.
11 Statement regarding computation of earnings per share.
27 Financial Data Schedule
b. Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended March 31, 1996.
</TABLE>
14
<PAGE> 15
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized on May 15, 1996.
A I M MANAGEMENT GROUP INC.
/s/ Charles T. Bauer
--------------------------------------
Charles T. Bauer
Chairman and Chief Executive Officer
/s/ John J. Arthur
--------------------------------------
John J. Arthur
Vice President and Treasurer
(Chief Accounting Officer)
15
<PAGE> 16
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit
- ------- ----------------------
<S> <C>
3.1 Amended and Restated By-Laws of the Company effective December 9, 1993.
3.2 Amendment No. 1, dated October 3, 1995, to the Amended and Restated
By-Laws of the Company effective December 9, 1993.
10.1 Amendment No. 2 (Letter Agreement), dated as of February 8, 1996, to the
Purchase and Sale Agreement, among the Company, Citibank, N.A. and
Citicorp North America, Inc.
10.2 Employment Agreement between the Company and Michael J. Cemo dated as
of January 1, 1996.
10.3 Amendment No. 23, dated as of March 18, 1996, to the Lease Contract for
premises located at 11 Greenway Plaza, Houston, Texas.
10.4 Amendment No. 24, dated as of March 18, 1996, to the Lease Contract for
premises located at 11 Greenway Plaza, Houston, Texas.
11 Statement of Computation of Earnings Per Share.
27 Financial Data Schedule
</TABLE>
<PAGE> 1
EXHIBIT 3.1
AMENDED AND RESTATED
BY-LAWS
OF
A I M MANAGEMENT GROUP INC.
Adopted Effective December 9, 1993
<PAGE> 2
AMENDED AND RESTATED
BY-LAWS
OF
A I M MANAGEMENT GROUP INC.
ARTICLE I
OFFICES
SECTION 1.1. Registered Office. The registered office of the
corporation in the State of Delaware shall be in the City of Wilmington, county
of New Castle, and the name of its registered agent shall be The Corporation
Trust Company.
SECTION 1.2. 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 2.1. Annual Meeting. The annual meeting of
stockholders for the election of directors shall be held at such place either
within or without the State of Delaware and at such date and time as shall be
designated from time to time by the Board of Directors and stated in the notice
of the meeting.
SECTION 2.2. Voting 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, 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 2.3. Special Meeting. 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
or by the Board of Directors or by written order of a majority of the directors
and shall be called by the President or the Secretary at the request in writing
of stockholders owning a majority in amount of the entire capital stock of the
corporation issued and outstanding and entitled to vote. Such request shall
state the purposes of the proposed meeting.
-1-
<PAGE> 3
The President or directors so calling, or the stockholders so requesting, any
such meeting shall fix the date and time of, and the place (either within or
without the State of Delaware) for, the meeting.
SECTION 2.4. Notice of Meeting. Written notice of the
annual, and each special meeting of stockholders, stating the time, place and
purpose or purposes thereof, shall be given to each stockholder entitled to
vote thereat, not less than ten nor more than 60 days before the meeting.
SECTION 2.5. Quorum. The holders of a majority of the stock
issued and outstanding and entitled to vote thereat, present in person or
represented by proxy, shall constitute a quorum at any meeting of stockholders
for the transaction of business except as otherwise provided by statute or by
the Certificate of Incorporation. Notwithstanding the other provisions of the
Certificate of Incorporation or these by-laws, the holders of a majority of the
shares of such stock, present in person or represented by proxy, although not
constituting a quorum, 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. If the adjournment is for more than 30 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. At such adjourned meeting at which
a quorum shall be present or represented any business may be transacted which
might have been transacted at the meeting as originally notified.
SECTION 2.6. Voting. When a quorum is present at any meeting
of the stockholders, the vote of the holders of a majority of the stock having
voting power present in person or represented by proxy shall decide any
question brought before such meeting, unless the question is one upon which, by
express provision of the statutes, of the Certificate of Incorporation or of
these by-laws, a different vote is required, in which case such express
provision shall govern and control the decision of such question. Every
stockholder having the right to vote shall be entitled to vote in person, or by
proxy appointed by an instrument in writing subscribed by such stockholder,
bearing a date not more than three years prior to voting, unless such
instrument provides for a longer period, and filed with the Secretary of the
corporation before, or at the time of, the meeting. If such instrument shall
designate two or more persons to act as proxies, unless such instrument shall
provide the contrary, a majority of such persons present at any meeting at
which their powers thereunder are to be exercised shall have and may exercise
all the powers of voting or giving consents thereby conferred, or if only one
be present, then such powers may be exercised by that one, or, if an even
number attend and a majority do not agree on any particular issue, each proxy
so attending shall be entitled to exercise such powers in respect of the same
portion of the shares as he is of the proxies representing such shares.
SECTION 2.7. Consent of Stockholders. Unless otherwise
provided in the Certificate of Incorporation, any action required to be taken
at any annual or special meeting of stockholders of the corporation or any
action which may be taken at any annual or special meeting of such stockholders
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. Prompt notice of
the taking of the corporate action without a meeting by less than unanimous
written consent shall be given by the Secretary of the corporation to those
stockholders who have not consented in writing.
-2-
<PAGE> 4
SECTION 2.8. Voting of Stock of Certain Holders. Shares
standing in the name of another corporation, domestic or foreign, may be voted
by such officer, agent or proxy as the by-laws of such corporation may
prescribe, or in the absence of such provision, as the Board of Directors of
such corporation may determine. Shares standing in the name of a deceased
person may be voted by the executor or administrator of such deceased person,
either in person or by proxy. Shares standing in the name of a guardian,
conservator or trustee may be voted by such fiduciary, either in person or by
proxy, but no fiduciary shall be entitled to vote shares held in such fiduciary
capacity without a transfer of such shares into the name of such fiduciary.
Shares standing in the name of a receiver may be voted by such receiver. A
stockholder whose shares are pledged shall be entitled to vote such shares,
unless in the transfer by the pledger on the books of the corporation, he has
expressly empowered the pledgee to vote thereon, in which case only the
pledgee, or his proxy, may represent the stock and vote thereon.
SECTION 2.9. Treasury Stock. The corporation shall not vote,
directly or indirectly, shares of its own stock owned by it; and such shares
shall not be counted in determining the total number of outstanding shares.
SECTION 2.10. Fixing Record Date. The Board of Directors may
fix in advance a date, not exceeding 60 days preceding the date of any meeting
of stockholders, or the date for payment of any dividend or distribution, or
the date for the allotment of rights, or the date when any change, or
conversion or exchange of capital stock shall go into effect, or a date in
connection with obtaining a consent, as a record date for the determination of
the stockholders entitled to notice of, and to vote at, any such meeting and
any adjournment thereof, or entitled to receive payment of such dividend or
distribution, or to receive any such allotment of rights, or to exercise the
rights in respect of any such change, conversion or exchange of capital stock,
or to give such consent, and in such case such stockholders and only such
stockholders as shall be stockholders of record on the date so fixed shall be
entitled to such notice of, and to vote at, any such meeting and any
adjournment thereof, or to receive payment of such dividends or distribution,
or to receive such allotment or rights, or to exercise such rights, or to give
such consent, as the case may be, notwithstanding any transfer of any stock on
the books of the corporation after any such record date fixed as aforesaid.
ARTICLE III
BOARD OF DIRECTORS
SECTION 3.1. Powers. The business and affairs of the
corporation shall be managed by its Board of Directors, which may exercise all
such powers of the Corporation and do all such lawful acts and things as are
not by statute or by the Certificate of Incorporation or by these by-laws
directed or required to be exercised or done by the stockholders.
SECTION 3.2. Number, Election and Term. The number of
directors which shall constitute the whole Board shall be not less than three.
Such number of directors shall from time to time be fixed and determined by the
directors and shall be set forth in the notice of any meeting of stockholders
held for the purpose of electing directors. The directors shall be elected at
the annual meeting of stockholders, except as provided in Section 3.3, and each
director elected shall hold office until his successor shall be elected and
shall qualify. Directors need not be residents of Delaware or stockholders of
the corporation.
-3-
<PAGE> 5
SECTION 3.3. Vacancies, Additional Directors and Removal From
Office. If any vacancy occurs in the Board of Directors caused by death,
resignation, retirement, disqualification or removal from office of any
director, or otherwise, or if any new directorship is created by an increase in
the authorized number of directors, a majority of the directors then in office,
though less than a quorum, or a sole remaining director, may choose a successor
or fill the newly created directorship; and a director so chosen shall hold
office until the next annual election and until his successor shall be duly
elected and shall qualify, unless sooner displaced. Any director may be
removed either for or without cause at any special meeting of stockholders duly
called and held for such purpose.
SECTION 3.4. Regular Meeting. A regular meeting of the Board
of Directors shall be held each year, without notice other than this by-law, at
the place of, and immediately following, the annual meeting of stockholders;
and other regular meetings of the Board of Directors shall be held each year,
at such time and place as the Board of Directors may provide, by resolution,
either within or without the State of Delaware, without notice other than such
resolution.
SECTION 3.5. Special Meeting. A special meeting of the Board
of Directors may be called by any Chairman of the Board or by the President and
shall be called by the Secretary on the written request of any two directors.
The Chairman or President so calling, or the directors so requesting, any such
meeting shall fix the time and any place, either within or without the State of
Delaware, as the place of holding such meeting.
SECTION 3.6. Notice of Special Meeting. Written notice of
special meetings of the Board of Directors shall be given to each director at
least 48 hours prior to the time of such meeting. Any director may waive
notice of any meeting. The attendance of a director at any meeting shall
constitute a waiver of notice of such meeting, except where a director attends
a meeting for the purpose of objecting to the transaction of any business
because the meeting is not lawfully called or convened. Neither the business
to be transacted at, nor the purpose of, any special meeting of the Board of
Directors need be specified in the notice or waiver of notice of such meeting,
except that notice shall be given of any proposed amendment to the by-laws if
it is to be adopted at any special meeting or with respect to any other matter
where notice is required by statute.
SECTION 3.7. Quorum and Participation. A majority of the
Board of Directors shall constitute a quorum for the transaction of business at
any meeting of the Board of Directors, 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, by the Certificate of Incorporation or by these by-laws. Members of
the Board of Directors may participate in a meeting of the Board of Directors
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 shall constitute presence in person and attendance at such
meeting. If a quorum shall not be present at any meeting of the Board of
Directors, the directors present thereat may adjourn the meeting from time to
time, without notice other than announcement at the meeting, until a quorum
shall be present.
SECTION 3.8. Action Without Meeting. 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 as provided in Article IV of these by-laws, may be
taken without a meeting, if a written consent thereto is signed by all members
of the Board or of such
-4-
<PAGE> 6
committee, as the case may be, and such written consent is filed with the
minutes of proceedings of the Board or committee.
SECTION 3.9. Compensation. Directors, as such, shall not be
entitled to any stated salary for their services unless voted by the
stockholders or the Board of Directors; but by resolution of the Board of
Directors, a fixed sum and expenses of attendance, if any, may be allowed for
attendance at each regular or special meeting of the Board of Directors or any
meeting of a committee of directors. No provision of these by-laws shall be
construed to preclude any director from serving the corporation in any other
capacity and receiving compensation therefor.
ARTICLE IV
COMMITTEE OF DIRECTORS
SECTION 4.1. Designation, Powers and Name. The Board of
Directors may, by resolution passed by a majority of the whole Board, designate
one or more committees, including, if they shall so determine, an Executive
Committee, each such committee to consist of two or more of the directors of
the corporation. The committee shall have and may exercise such of the powers
of the Board of Directors in the management of the business and affairs of the
corporation as may be provided in such resolution. The committee may authorize
the seal of the corporation to be affixed to all papers which may require it.
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 such committee. In the absence or disqualification of any member of
such committee or committees, 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.
Such committee or committees shall have such name or names and such limitations
of authority as may be determined from time to time by resolution adopted by
the Board of Directors.
SECTION 4.2. Minutes. Each committee of directors shall keep
regular minutes of its proceedings and report the same to the Board of
Directors when required.
SECTION 4.3. Compensation. Members of special or standing
committees may be allowed compensation for attending committee meetings, if the
Board of Directors shall so determine.
ARTICLE V
ADVISORY DIRECTORS
SECTION 5. In addition to the Officers of the corporation
there may be one or more advisory directors who shall be appointed by the Board
of Directors. Advisory directors shall provide advice and information to the
Board of Directors and shall have such other advisory responsibilities to the
Board as shall be requested by the Board of Directors from time to time, but
shall not be members of the Board of Directors of the corporation, shall not be
held out to the public or to stockholders as directors and shall have no powers
to act on behalf of the corporation or to act in any other capacity as
Directors. Advisory directors shall not be permitted to initiate or second
-5-
<PAGE> 7
motions of, or to vote on actions considered by, the Board of Directors.
References to "directors" throughout these by-laws and other corporate
documents, shall not include advisory directors, unless the term "advisory
director", specifically, is used; however, to the extent that liability is
asserted as arising from action taken by the Board of Directors and it is
asserted that an advisory director participated in or contributed to the action
taken, the advisory director's liability shall be considered to be within the
scope of the indemnification provided in Article XI for directors, officers,
employees and agents under the indemnification provisions of Section 145 of the
Delaware Corporation Law. Advisory directors shall be entitled to such
compensation for their services as may be determined from time to time by the
Board of Directors, and may be reimbursed for reasonable expenses associated
with the services rendered by them. No provision of these by-laws shall be
construed to preclude any advisory director from serving the corporation in any
other capacity and receiving compensation therefor.
ARTICLE VI
NOTICE
SECTION 6.1. Methods of Giving Notice. Whenever under the
provisions of the statutes of the State of Delaware, the Certificate of
Incorporation or these by-laws, notice is required to be given to any director,
member of any committee or stockholder, such notice shall be in writing and
delivered personally or mailed to such director, member or stockholder;
provided that in the case of a director or a member of any committee such
notice may be given orally or by telephone or telegram. If mailed, notice to a
director, member of a committee or stockholder shall be deemed to be given when
deposited in the United States mail first class in a sealed envelope, with
postage prepaid, addressed, in the case of a stockholder, to the stockholder at
the stockholder's address as it appears on the records of the corporation or,
in the case of a director or a member of a committee, to such person at his
business address. If sent by telegram, notice to a director or member of a
committee shall be deemed to be given when the telegram, so addressed, is
delivered to the telegraph company.
SECTION 6.2. Written Waiver. Whenever any notice is required
to be given under the provisions of the statutes of the State of Delaware, the
Certificate of Incorporation or these by-laws, 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 equivalent thereto.
ARTICLE VII
OFFICERS
SECTION 7.1. Officers. The officers of the corporation shall
be a Chairman of the Board, Vice Chairman of the Board (if such office is
created by the Board), a Chairman and Chief Executive Officer, Chief Operating
Officer, a President, one or more Vice Presidents, any one or more of which may
be designated Executive Vice President or Senior Vice President, a Secretary
and a Treasurer. In the event that the Board of Directors creates the office
of Vice Chairman of the Board, the Board shall, by resolution, define the
duties of such office. The Board of Directors may appoint such other officers
and agents, including Assistant Vice Presidents, Assistant Secretaries and
Assistant Treasurers, as it shall deem necessary, who shall hold their offices
for such terms and
-6-
<PAGE> 8
shall exercise such powers and perform such duties as shall be determined by
the Board. Any two or more offices, other than the offices of Chairman and
Chief Executive Officer and Secretary or President and Secretary, may be held
by the same person. No officer shall execute, acknowledge, verify or
countersign any instrument on behalf of the corporation in more than one
capacity, if such instrument is required by law, by these by-laws or by any act
of the corporation to be executed, acknowledged, verified or countersigned by
two or more officers. The Chairman and any Vice Chairman of the Board shall be
elected from among the directors. With the foregoing exceptions, none of the
other officers need be a director, and none of the officers need be a
stockholder of the corporation.
SECTION 7.2. Election and Term of Office. The officers of
the corporation shall be elected annually by the Board of Directors at its
first regular meeting held after the annual meeting of stockholders or as soon
thereafter as conveniently possible. Each officer shall hold office until his
successor shall have been chosen and shall have qualified or until his death or
the effective date of his resignation or removal, or until he shall cease to be
a director in the case of the Chairman and the Vice Chairman.
SECTION 7.3. Removal and Resignation. Any officer or agent
elected or appointed by the Board of Directors may be removed without cause by
the affirmative vote of a majority of the Board of Directors whenever, in its
judgment, the best interests of the corporation shall be served thereby, but
such removal shall be without prejudice to the contractual rights, if any, of
the person so removed. Any officer may resign at any time by giving written
notice to the corporation. 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 7.4. Vacancies. Any vacancy occurring in any office
of the corporation by death, resignation, removal or otherwise, may be filled
by the Board of Directors for the unexpired portion of the term.
SECTION 7.5. Salaries. The salaries of all officers and
agents of the corporation shall be fixed by the Board of Directors or pursuant
to its direction; and no officer shall be prevented from receiving such salary
by reason of his also being a director or advisory director.
SECTION 7.6. Chairman and Vice Chairman of the Board. The
Chairman of the Board shall preside at all meetings of the Board of Directors
and of the stockholders of the corporation. In the absence of the Chairman,
such duties shall be attended to by the Vice Chairman of the Board. The
Chairman shall formulate and submit to the Board of Directors or the Executive
Committee matters of general policy of the corporation and shall perform such
other duties as usually appertain to the office or as may be prescribed by the
Board of Directors or the Executive Committee.
SECTION 7.7. Chairman and Chief Executive Officer. The
Chairman and Chief Executive Officer, subject to the control of the Board of
Directors, shall in general supervise and control the business and affairs of
the corporation. In the absence of the Chairman or Vice Chairman of the Board
(if such office is created by the Board), the Chairman and Chief Executive
Officer shall preside at all meetings of the Board of Directors and of the
stockholders. He may also preside at any such meeting attended by the Chairman
or Vice Chairman of the Board, if he is so designated by such Chairman or in
the Chairman's absence, by the Vice Chairman. He shall have
-7-
<PAGE> 9
the power to appoint and remove subordinate officers, agents and employees,
except those elected or appointed by the Board of Directors. The Chairman and
Chief Executive Officer shall keep the Board of Directors fully informed and
shall consult them concerning the business of the corporation. He may sign
with the Secretary or any other officer of the corporation thereunto authorized
by the Board of Directors, certificates for shares of the corporation and any
deeds, bonds, mortgages, contracts, checks, notes, drafts or other instruments
which the Board of Directors has authorized to be executed, except in cases
where the signing and execution thereof has been expressly delegated by these
by-laws or by the Board of Directors to some other officer or agent of the
corporation, or shall be required by law to be otherwise executed. He shall
vote, or give a proxy to any other officer of the corporation to vote, all
shares of stock of any other corporation standing in the name of the
corporation and in general he shall perform all other duties normally incident
to the office of Chairman and Chief Executive Officer and such other duties as
may be prescribed by the stockholders or the Board of Directors from time to
time.
SECTION 7.8. President. The President shall be the Chief
Operating Officer of the corporation and shall have such other duties and
perform such other responsibilities as may be delegated to him by the Board of
Directors or the Chairman and Chief Executive Officer, and, in the absence of
the Chairman and Chief Executive Officer, shall assume the responsibilities of
that office in addition to his other responsibilities. The President shall
keep the Chairman and Chief Executive Officer and the Board of Directors fully
informed and shall consult them concerning the operations of the corporation.
He may sign with the Secretary or any other officer of the corporation
thereunto authorized by the Board of Directors, certificates for shares of the
corporation and any deeds, bonds, mortgages, contracts, checks, notes, drafts
or other instruments which the Board of Directors has authorized to be
executed, except in cases where the signing and execution thereof has been
expressly delegated by these by-laws or by the Board of Directors to some other
officer or agent of the corporation, or shall be required by law to be
otherwise executed. In the absence of the Chairman and Chief Executive
Officer, the President shall vote, or give a proxy to any other officer of the
corporation to vote, all shares of stock of any other corporation standing in
the name of the corporation and, in general, he shall perform all other duties
normally incident to the office of the President and such other duties as may
be prescribed by the stockholders, the Board of Directors or the Chairman and
Chief Executive Officer from time to time.
SECTION 7.9. Chief Operating Officer. The Chief Operating
Officer of the corporation shall have such duties and perform such
responsibilities as may be delegated to him by the Board of Directors or the
Chairman and Chief Executive Officer.
SECTION 7.10. Vice Presidents. In the absence of the
President, or in the event of his inability or refusal to act, the Executive
Vice President (or in the event there shall be no Vice President designated
Executive Vice President, any Vice President designated by the Board) shall
perform the duties and exercise the powers of the President. Any Vice
President may sign, with the Secretary or Assistant Secretary, certificates for
shares of the corporation. The Vice President shall perform such other duties
as from time to time may be assigned to them by the President, the Board of
Directors or the Executive Committee.
SECTION 7.11. Secretary. The Secretary shall (a) keep the
minutes of the meetings of the stockholders, the Board of Directors and
committees of directors; (b) see that all notices are duly given in accordance
with the provisions of these by-laws and as required by law; (c) be custodian
of the corporate records and of the seal of the corporation, and see that the
seal of the corporation or a facsimile thereof is affixed to all certificates
for shares prior to the issue thereof and
-8-
<PAGE> 10
to all documents, the execution of which on behalf of the corporation under its
seal is duly authorized in accordance with the provisions of these by-laws; (d)
keep or cause to be kept a register of the post office address of each
stockholder which shall be furnished by such stockholder; (e) sign with the
Chairman and Chief Executive Officer, the President, or an Executive Vice
President or Vice President, certificates for shares of the corporation, the
issue of which shall have been authorized by resolution of the Board of
Directors; (f) have general charge of the stock transfer books of the
corporation; and (g) in general, perform all duties normally incident to the
office of Secretary and such other duties as from time to time may be assigned
to him by the Chairman and Chief Executive Officer, the President, the Board of
Directors or the Executive Committee.
SECTION 7.12. Treasurer. If required by the Board of
Directors, the Treasurer shall give a bond for the faithful discharge of his
duties in such sum and with such surety or sureties as the Board of Directors
shall determine. He shall (a) have charge and custody of and be responsible
for all funds and securities of the corporation; receive and give receipts for
moneys due and payable to the corporation from any source whatsoever and
deposit all such moneys in the name of the corporation in such banks, trust
companies or other depositories as shall be selected in accordance with the
provisions of Section 8.3 of these by-laws; (b) prepare, or cause to be
prepared, for submission at each regular meeting of the Board of Directors, at
each annual meeting of the stockholders, and at such other times as may be
required by the Board of Directors, the Chairman and Chief Executive Officer,
the President or the Executive Committee, a statement of financial condition of
the corporation in such detail as may be required; and (c) in general, perform
all the duties incident to the office of Treasurer and such other duties as
from time to time may be assigned to him by the Chairman and Chief Executive
Officer, the President, the Board of Directors or the Executive Committee.
SECTION 7.13. Assistant Secretary or Treasurer. The
Assistant Secretaries and Assistant Treasurers shall, in general, perform such
duties as shall be assigned to them by the Secretary or the Treasurer,
respectively, or by the Chairman and Chief Executive Officer, the President,
the Board of Directors or the Executive Committee. The Assistant Secretaries
and Assistant Treasurers shall, in the absence of the Secretary or Treasurer,
respectively, perform all functions and duties which such absent officers may
delegate, but such delegation shall not relieve the absent officer from the
responsibilities and liabilities of his office. The Assistant Secretaries may
sign, with the Chairman and Chief Executive Officer, the President or a Vice
President, certificates for shares of the corporation, the issue of which shall
have been authorized by a resolution of the Board of Directors. The Assistant
Treasurers shall respectively, if required by the Board of Directors, give
bonds for the faithful discharge of their duties in such sums and with such
sureties as the Board of Directors shall determine.
SECTION 7.14. Assistant Vice Presidents. The Assistant Vice
Presidents shall, in general, perform such duties as shall be assigned to them
by the President, any Vice President, the Board of Directors or the Executive
Committee. The Assistant Vice Presidents shall, in the absence of a Vice
President, perform all functions and duties which such absent officer may
delegate, but such delegation shall not relieve the absent officer from the
responsibilities and liabilities of his office.
-9-
<PAGE> 11
ARTICLE VIII
CONTRACTS, CHECKS AND DEPOSITS
SECTION 8.1. Contracts. Subject to the provisions of Section
7.1, the Board of Directors may authorize any officer, officers, agent or
agents, to enter into any contract or execute and deliver any instrument in the
name of and on behalf of the corporation, and such authority may be general or
confined to specific instances.
SECTION 8.2. Checks, etc. All checks, demands, drafts or
other orders for the payment of money, notes or other evidences of indebtedness
issued in the name of the corporation, shall be signed by such officer or
officers or such agent or agents of the corporation, and in such manner, as
shall be determined by the Board of Directors.
SECTION 8.3. Deposits. All funds of the corporation not
otherwise employed shall be deposited from time to time to the credit of the
corporation in such banks, trust companies or other depositories as the Board
of Directors may select.
ARTICLE IX
CERTIFICATES OF STOCK
SECTION 9.1. Issuance. Each stockholder of this corporation
shall be entitled to a certificate or certificates showing the number of shares
of stock registered in his name on the books of the corporation. The
certificates shall be in such form as may be determined by the Board of
Directors, shall be issued in numerical order and shall be entered in the books
of the corporation as they are issued. They shall exhibit the holder's name
and number of shares and shall be signed by the Chairman and Chief Executive
Officer, the President or a Vice President and by the Secretary or an Assistant
Secretary. Any of or all of the signatures on the certificate may be
facsimiles. If the corporation shall be authorized to issue more than one
class of stock or more than one series of any class, the designations,
preferences and relative participating, optional or other special rights of
each class of stock or series thereof and the qualifications, limitations or
restrictions of such preferences and 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 of stock; provided that, except as otherwise
provided by statute, 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 to each stockholder who so requests the designations, preferences
and relative, participating, optional or other special rights of each class of
stock or series thereof and the qualifications, limitations or restrictions of
such preferences and rights. All certificates surrendered to the corporation
for transfer shall be cancelled and no new certificate shall be issued until
the former certificate for a like number of shares shall have been surrendered
and cancelled, except that in the case of a lost, stolen, destroyed or
mutilated certificate a new one may be issued therefor upon such terms and with
such indemnity, if any, to the corporation as the Board of Directors may
prescribe. Certificates shall not be issued representing fractional shares of
stock.
SECTION 9.2. Lost 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 making of an affidavit of that fact
-10-
<PAGE> 12
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 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 or certificates alleged to have
been lost, stolen or destroyed, or both.
SECTION 9.3. Transfers. 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, assignment 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. Transfers of shares shall be made only on the
books of the corporation by the registered holder thereof, or by his attorney
thereto authorized by power of attorney and filed with the Secretary of the
corporation or the Transfer Agent.
SECTION 9.4. 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 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 the State of Delaware.
ARTICLE X
DIVIDENDS
SECTION 10.1. Declaration. 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 capital stock, subject to the provisions of the
Certificate of Incorporation.
SECTION 10.2. Reserve. 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 Board of Directors from time to time, in their absolute
discretion, think proper as a reserve or reserves to meet contingencies, or for
equalizing dividends, or for repairing or maintaining any property of the
corporation, or for such other purpose as the Board of Directors shall think
conducive to the interest of the corporation, and the Directors may modify or
abolish any such reserve in the manner in which it was created.
ARTICLE XI
INDEMNIFICATION
SECTION 11.1. Third Party Actions. The corporation shall
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action by or in
the right of the corporation) by reason of his service as a member of the
Indemnified Class. For
-11-
<PAGE> 13
purposes of this Article XI, the Indemnified Class shall include any person who
is or was a director (including an advisory director), officer, employee or
agent of the corporation, or who is or was serving at the request of the
corporation as a director (including an advisory director), officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit plans. The
corporation shall indemnify any member of the Indemnified Class against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and with respect to any criminal action or proceeding, if such
person had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit, or proceeding by judgment, order, settlement
or conviction, or upon a plea of nolo contendere or its equivalent, shall not,
of itself, create a presumption that the person did not act in good faith and
in a manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
SECTION 11.2. Actions by or in the Right of the Corporation.
The corporation shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor
by reason of the fact that he is or was a member of the Indemnified Class,
against expenses (including attorneys' fees) actually and reasonably incurred
by him in connection with the defense or settlement of such action or suit if
he acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation and except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the Court of Chancery or the court in which
such action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which the Court of Chancery or such other court shall deem proper.
SECTION 11.3. Determination of Conduct. The determination
that a director, officer, employee or agent (including any advisory director)
has or has not met the applicable standard of conduct set forth in Section 11.1
and 11.2 (unless indemnification is ordered by a court) shall be made (1) by
the Board of Directors by a majority vote of a quorum consisting of directors
who were not parties to such action, suit or proceeding, or (2) if such quorum
is not obtainable, or even if obtainable a quorum of disinterested directors so
directs, by independent legal counsel in a written opinion, or (3) by the
stockholders.
SECTION 11.4. Payment of Expenses In Advance. Expenses
incurred in defending a civil or criminal action, suit or proceeding shall be
paid by the corporation in advance of the final disposition of such action,
suit or proceeding upon receipt of an undertaking by or on behalf of the
director, officer, employee or agent (including any advisory director) to repay
such amount if it shall ultimately be determined that he is not entitled to be
indemnified by the corporation as authorized in this Article XI.
SECTION 11.5. Indemnity Not Exclusive. The indemnification
and advancement of expenses provided hereunder or granted pursuant to the other
subsections of this Section shall not be deemed exclusive of any other rights
to which those seeking indemnification or advancement of expenses may be
entitled under any other by-law, agreement, vote of stockholders or
disinterested
-12-
<PAGE> 14
directors or otherwise, both as to action in his official capacity and as to
action in another capacity while holding such office, and shall, unless
otherwise provided when authorized or ratified, continue as to a person who has
ceased to be a director, officer, employee or agent (including any advisory
director) and shall inure to the benefit of the heirs, executors and
administrators of such person.
SECTION 11.6. Insurance. The corporation may purchase and
maintain insurance on behalf of any person who is or was a director (including
an advisory director), officer, employee or agent of the corporation, or is or
was serving at the request of the corporation as a director (including an
advisory director), officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, including service to
employee benefit plans, against any liability asserted against him and incurred
by him in any such capacity, or arising out of his status as such, whether or
not the corporation would have the power to indemnify him against such
liability under the provisions of this Article XI of the by-laws.
SECTION 11.7. Constituent Corporation. For the purpose of
this Article XI, references to "the corporation" include all constituent
corporations absorbed in a consolidation or merger as well as the resulting or
surviving corporation so that any person who is or was a director (including an
advisory director), officer, employee or agent of such a constituent
corporation or is or was serving at the request of such constituent corporation
as a director (including an advisory director), officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
including service to employee benefit plans, shall stand in the same position
under the provisions of this Article XI with respect to the resulting or
surviving corporation as he would if he had served the resulting or surviving
corporation in the same capacity.
SECTION 11.8. Amendments to Delaware General Corporation Law.
The provisions of this Article XI are intended to grant to all members of the
Indemnified Class the maximum indemnification permitted by the Delaware General
Corporation Law. If the Delaware General Corporation Law is amended to
authorize corporate action granting further indemnification of members of the
Indemnified Class, then the members of the Indemnified Class shall be granted
such additional rights of indemnification to the fullest extent permitted by
the Delaware General Corporation Law, as so amended.
SECTION 11.9. Repeal or Modification. Any repeal or
modification of this Article XI shall not adversely affect any right or
protection of a member of the Indemnified Class existing, or arising out of
acts or omissions occurring, at or prior to such repeal or modification.
ARTICLE XII
MISCELLANEOUS
SECTION 12.1. Seal. The corporate seal shall have inscribed
thereon the name of the corporation, and the words "Corporate Seal, Delaware."
The seal may be used by causing it or a facsimile thereof to be impressed or
affixed or otherwise reproduced.
SECTION 12.2. Books. The books of the corporation may be
kept (subject to any provision contained in the statutes) outside the State of
Delaware at the offices of the corporation at Houston, Texas, or at such other
place or places as may be designated from time to time by the Board of
Directors.
-13-
<PAGE> 15
ARTICLE XIII
AMENDMENT
SECTION 13. These by-laws may be altered, amended or repealed
at any regular meeting of the Board of Directors without prior notice, or at
any special meeting of the Board of Directors if notice of such alteration,
amendment or repeal be contained in the notice of such special meeting.
-14-
<PAGE> 1
EXHIBIT 3.2
AMENDMENT NO. 1, DATED OCTOBER 3, 1995,
TO THE
AMENDED AND RESTATED BY-LAWS
OF
A I M MANAGEMENT GROUP INC.
ADOPTED EFFECTIVE DECEMBER 9, 1993
The By-Laws of A I M Management Group Inc. are hereby amended as
follows:
1. Article VII, 7.7, 7.8 and 7.9 shall be amended in their entirety to read:
SECTION 7.7. Chairman and Chief Executive Officer. The
Chairman and Chief Executive Officer, subject to the control of the Board of
Directors, shall in general supervise and control the business and affairs of
the corporation. In the absence of the Chairman or Vice Chairman of the Board
(if such office is created by the Board), the Chairman and Chief Executive
Officer shall preside at all meetings of the Board of Directors and of the
stockholders. He may also preside at any such meeting attended by the Chairman
or Vice Chairman of the Board, if he is so designated by such Chairman or, in
the Chairman's absence, by the Vice Chairman. He shall have general and active
management of the business of the corporation and shall see that all orders and
resolutions of the Board of Directors are carried into effect. The Chairman
and Chief Executive Officer shall have the power to appoint and remove
subordinate officers, agents and employees, except those elected or appointed
by the Board of Directors. The Chairman and Chief Executive Officer shall keep
the Board of Directors fully informed and shall consult them concerning the
business of the corporation. He may execute certificates for shares of the
corporation and any deeds, bonds, mortgages, contracts, checks, notes, drafts
or other instruments which the Board of Directors has authorized to be
executed, except where required or permitted by law to be otherwise signed and
executed and except where the signing and execution thereof has been expressly
delegated by these by-laws or by the Board of Directors to some other officer
or agent of the corporation. He shall vote, or give a proxy to any other
officer of the corporation to vote, all shares of stock of any other
corporation standing in the name of the corporation and in general he shall
perform all other duties normally incident to the office of Chairman and Chief
Executive Officer and such other duties as may be prescribed by the
stockholders or the Board of Directors from time to time.
SECTION 7.8. President. The President shall be the Chief
Operating Officer of the corporation and shall have such other duties and
perform such other responsibilities as may be delegated to him by the Board of
Directors or the Chairman and Chief Executive Officer, and, in the absence of
the Chairman and Chief Executive Officer, shall assume the responsibilities of
that office in addition to his other responsibilities. The President shall
keep the Chairman and Chief Executive Officer and the Board of Directors fully
informed and shall consult them concerning the operations of the corporation.
He may execute certificates for shares of the corporation and any deeds, bonds,
mortgages, contracts, checks, notes, drafts or other instruments which the
Board of Directors has authorized to be executed, except where required or
permitted by law to be otherwise signed and executed and except where the
signing and execution thereof has been expressly delegated by these by-laws or
by the Board of Directors to some other officer or agent of the corporation. In
the absence of the Chairman and Chief Executive Officer, the President shall
vote, or give a proxy to any other officer of the corporation to vote, all
shares of stock of any other corporation standing in the name of the
corporation and, in general, he shall perform all other duties normally
incident to the office of the President and
<PAGE> 2
such other duties as may be prescribed by the stockholders, the Board of
Directors or the Chairman and Chief Executive Officer from time to time.
SECTION 7.9. Vice Presidents. In the absence of the
President, or in the event of his inability or refusal to act, the Executive
Vice President (or in the event there shall be no Vice President designated
Executive Vice President, any Vice President designated by the Board) shall
perform the duties and exercise the powers of the President. Any Vice
President may execute certificates for shares of the corporation and any deeds,
bonds, mortgages, contracts, checks, notes, drafts or other instruments which
the Board of Directors has authorized to be executed, except where required or
permitted by law to be otherwise signed and executed and except where the
signing and execution thereof has been expressly delegated by these by-laws or
by the Board of Directors to some other officer or agent of the corporation.
The Vice Presidents shall perform such other duties as from time to time may be
assigned to them by the President, the Board of Directors or the Executive
Committee.
2. Article VII, Section 7.11 is renumbered Section 7.10 and subsequent
sections are renumbered accordingly.
3. Article VIII relating to Contracts, Checks and Deposits is deleted in
its entirety and subsequent articles are renumbered accordingly.
<PAGE> 1
EXHIBIT 10.1
LETTER AGREEMENT
Dated as of February 8, 1996
Reference is made to that certain Purchase and Sale Agreement dated as
of May 2, 1995 (as amended and supplemented, the "Purchase Agreement") among
A I M Management Group Inc., Citibank, N.A. and Citicorp North America, Inc., as
program agent.
Each of the parties hereto agree that effective as of the date hereof
Section 1.01 of the Purchase Agreement shall be amended by replacing the dollar
amount "$125,000,000" set forth therein with the dollar amount "$175,000,000".
Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to such terms in the Purchase Agreement.
This letter agreement may be executed in any number of counterparts
and by different parties hereto on separate counterparts, each of which
counterparts, when so executed and delivered, shall be deemed to be an
original, and all of which counterparts, taken together, shall constitute but
one and the same agreement.
This letter agreement shall be binding upon, and enure to the benefit
of, the parties hereto and their respective successors and assigns.
THIS LETTER AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE
LAWS OF THE STATE OF NEW YORK AND FOR ALL PURPOSES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF SAID STATE WITHOUT REGARD TO ITS
CONFLICTS OF LAWS PROVISIONS.
<PAGE> 2
IN WITNESS WHEREOF, the parties hereto have caused this letter
agreement to be executed by their respective officers thereunto duly
authorized, as of the date first above written.
CITIBANK, N.A.
By: /s/ ARTHUR B. BOVINO
----------------------
Name: Arthur B. Bovino
Title: Attorney-In-Fact
CITICORP NORTH AMERICA, INC.,
as Program Agent
By: /s/ ARTHUR B. BOVINO
----------------------
Name:
Title:
A I M MANAGEMENT GROUP INC.,
as Seller and Servicer
By: /s/ CHARLES T. BAUER
----------------------
Name:
Title:
Consented and agreed
to as of the date first
written above:
A I M DISTRIBUTORS, INC.
By: /s/ MICHAEL J. CEMO
-----------------------
Name:
Title:
A I M ADVISORS, INC.
By: /s/ ROBERT H. GRAHAM
-----------------------
Name:
Title:
2
<PAGE> 1
EXHIBIT 10.2
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "Agreement") dated as of January 1, 1996 is
between A I M Management Group Inc., a Delaware corporation (the "Company"),
and Michael J. Cemo, a resident of Houston, Texas (the "Executive"). The
Company and the Executive are sometimes referred to herein as the "Parties."
In consideration of the mutual promises and covenants herein contained,
the Parties agree as follows:
1. EMPLOYMENT. The Company hereby employs the Executive and the
Executive hereby accepts employment with the Company subject to the terms and
conditions set forth herein.
2. DUTIES AND RESPONSIBILITIES.
2.1 POSITION AND DUTIES. Subject to the power of the Board of
Directors of the Company to elect and remove officers, the Executive shall
serve the Company as Senior Vice President or in such other office of
comparable or greater responsibility as the Board of Directors of the Company
may determine, and shall perform, faithfully and diligently, the services and
function for the Company listed on Schedule 1 or otherwise reasonably incident
to such office as may be designated from time-to-time by the Board of Directors
of the Company. The Executive understands that as part of his/her duties under
the Agreement he/she may be elected or appointed to hold executive offices in
one or more of the Company's consolidated subsidiaries.
2.2 PERFORMANCE STANDARDS. The Executive agrees to conform to the
Company's compliance procedures and to abide by the procedural and substantive
provisions of the Company's Code of Ethics, in each case as the same may be
implemented or amended from time-to-time by the Company's Board of Directors
(collectively, the "Required Standards of Conduct") and otherwise generally
conduct himself/herself at all times in such a manner as to maintain the
Company's good reputation.
2.3 EXTENT OF SERVICES. During the term of this Agreement the
Executive shall devote such of his/her entire time, attention, energies, and
business efforts to his/her duties as an employee of the Company and to the
business of the Company generally as is reasonably necessary to carry out
his/her duties specified in Paragraph 2.1. Executive shall not pursue any
other gainful employment (work for any form of compensation) during the term of
this Agreement.
2.4 PLACE OF EMPLOYMENT. The Executive's primary place of
employment shall be with the Company in Houston, Texas, unless otherwise agreed
by the Company and the Executive.
<PAGE> 2
2.5 REPRESENTATIONS BY EXECUTIVE. The Executive understands that
the Company's willingness to enter into this Agreement is predicated upon the
assumption that the Executive is not disqualified from performing services
subject to regulation under the Investment Advisers Act of 1940, as amended
(the "Advisers Act"), and other applicable federal and state laws.
Accordingly, the Executive represents and warrants to the Company that (a)
he/she is not disqualified from assisting the Company as contemplated by this
Agreement or in receiving compensation from the Company; (b) he/she is not
subject to an order of the Securities and Exchange Commission (the
"Commission") issued under Section 203(f) of the Advisers Act where such order
would prohibit him/her from carrying out his/her obligations under this
Agreement; (e) he/she has not been convicted within the previous ten years of
any felony or misdemeanor involving conduct described in Section
203(e)(2)(A)-(D) of the Advisers Act; (d) he/she has not been found by the
Commission to have engaged, and has not been convicted of engaging, in any of
the conduct specified in paragraphs (1), (4) or (5) of Section 203(e) of the
Advisers Act; (e) he/she is not subject to an order, judgment, or decree
described in Section 203(e)(3) of the Advisers Act, or an order, judgment, or
decree under any federal or state law suspending or barring him/her from the
securities business, or from acting as a fiduciary, and (f) he/she is not
disqualified from being associated with a "broker-dealer" registered under the
Securities Exchange Act of 1934, as amended.
3. SALARY AND OTHER BENEFITS. Subject to the terms and
conditions of this Agreement:
3.1 SALARY. As compensation for his/her services under and
during the term of his/her employment under this Agreement, the Executive shall
be paid an annual salary of not less than $275,000, plus such raises from
time-to-time as determined by the Board of Directors, payable in accordance
with the then current payroll policies of the Company, and subject to such
other periodic increases as determined by the Board of Directors of the
Company.
3.2 OTHER BENEFITS. During the term of this Agreement, the
Executive shall be entitled to receive the following benefits:
(i) Group hospitalization, major medical, long-term
disability and life insurance coverage to the extent
such coverage is available to other personnel of the
Company in comparable positions with and having
duties comparable to those of the Executive and such
other insurance coverage as is similarly available;
(ii) Commissions based on the sale of the Company's
managed investment and other products and services as
set forth in Appendix A hereto (as such Appendix may
be amended from time-to-time by the mutual agreement
of
-2-
<PAGE> 3
the Company and the Executive, or by the Company upon
60 days written notice to the Executive;
(iii) Participation in any bonus or profit sharing plan
that the Company makes generally available to its key
employees; and
(iv) Such vacation, holidays, and other paid or unpaid
leaves of absence as the Company's Board of Directors
may approve.
4. TERM. Subject to the special provisions for termination of
employment provided hereinbelow, the term of this Agreement shall begin on the
date hereof and shall continue in effect until January 1, 1997. Thereafter,
this Agreement shall continue in effect from month-to-month unless terminated
upon twelve months notice by either Party.
4.1 TERMINATION. The Executive's employment under this Agreement
shall terminate on the occurrence of any of the following events:
(i) The death of the Executive;
(ii) The resignation of the Executive (other than pursuant
to subparagraph (vii)) below;
(iii) The written agreement of the Executive and the
Company to terminate this Agreement;
(iv) At the discretion of the Company's Board of
Directors, if by reason of illness, injury, or mental
or physical disability the Executive is absent from
his/her employment or, as reasonably determined by
the Board of Directors of the Company, otherwise is
unable to perform his/her duties for a continuous
period of 90 days in any 365-day period, excluding
any authorized vacation or leave of absence during
such period;
(v) At the discretion of the Company's Board of
Directors, if the Executive (as reasonably determined
by the Board of Directors of the Company), (a) is
involved in any act of fraud, dishonesty, or other
material misconduct in the performance of his/her
duties under this Agreement; (b) fails, refuses, or
willfully neglects to comply in any material respect
with the Company's Required Standards of Conduct or
any applicable requirement of the Advisers Act or
rule or regulation promulgated by the Commission
thereunder; (c) takes, or any court or federal or
state regulatory agency takes, any action based on
events occurring prior or subsequent to the execution
of this Agreement which makes (or could reasonably be
-3-
<PAGE> 4
expected to make) any representation set forth in
Paragraph 2.5 untrue or inaccurate in any material
respect; (d) or materially breaches the terms of this
Agreement or fails substantially to perform the
services required of him/her pursuant to this
Agreement for reasons other than those specified in
Paragraph 4.1(i) through 4.1(iv), in each case after
written notice specifying such failure to the
Employee and if such breach or failure shall not have
been cured within 30 days after the Executive's
receipt of such notice; provided, however, that if
the Executive disputes the contention of the
Company's Board of Directors that there has been such
a failure, such dispute shall be resolved by
arbitration pursuant to Paragraph 6, and if the
arbitration decision is adverse to the Executive's
contention, the 30-day period within which the
Executive is entitled to cure such failure shall not
begin to run until the day the Executive is notified
of the arbitration decision;
(vi) At the discretion of a majority of the Company's
Board of Directors; or
(vii) The Executive has resigned pursuant to Paragraph
4.8.2.
4.2 NO RELEASE. Any termination of the Executive's employment
shall not release the Executive or the Company from (a) his/her or its
respective obligations through and as of the date of such termination or (b)
the provisions of Paragraph 5.
4.3 DEATH. If the Executive's employment under this Agreement is
terminated pursuant to Paragraph 4.1(i) by the death of the Executive, the
Company shall (a) pay to the estate of the Executive the compensation which
would otherwise be payable to the Executive through the end of the calendar
month in which his/her death occurs at the annual rate that the Executive would
have been entitled to receive under Paragraphs 3.1 and 3.2 of this Agreement,
including all commissions earned to date, plus a further payment equivalent to
the last three months' commissions; (b) pay to the estate of the Executive all
awarded but deferred compensation under any bonus plan in which the Executive
is a participant; and (c) pay to the estate of the Executive any other benefits
otherwise due to the Executive pursuant to this Agreement or otherwise to the
time of such termination. On the payment of such compensation, the Company
shall have no further obligation to the Executive pursuant to this Agreement.
4.4 RESIGNATION. The Executive may resign pursuant to Paragraph
4.1(ii)at any time on 60-days' written notice to the Company. If the
Executive's employment under this Agreement is so terminated, all compensation
due the Executive pursuant to this Agreement to the date of such termination
shall be paid by the Company to the Executive. Unless such resignation was
pursuant to Paragraph 4.8.2, on the payment of such compensation, the Company
shall have no further obligation to the Executive pursuant to Paragraph 4.8 or
otherwise under this Agreement.
-4-
<PAGE> 5
4.5 WRITTEN AGREEMENT. If the Executive's employment under this
Agreement is terminated pursuant to Paragraph 4.1(iii) by a written agreement
between the Executive and the Company, compensation shall be paid by the
Company to the Executive as provided in such written agreement. On the payment
of such compensation, the Company shall have no further obligation to the
Executive pursuant to this Agreement.
4.6 DISABILITY. If the Executive's employment is terminated
pursuant to Paragraph 4.1(iv) by the disability of the Executive, the Company
shall (a) pay to the Executive the compensation which would otherwise be
payable to the Executive through the end of the calendar month in which such
termination occurs at the annual rate that the Executive would have been
entitled to receive under Paragraphs 3.1 and 3.2 of this Agreement, including
all commissions earned to date, plus a further payment equivalent to the last
three months' commissions; (b) pay to the Executive all awarded but deferred
compensation under any bonus plan in which the Executive is a participant; and
(c) pay to the Executive any other benefits otherwise due to the Executive
pursuant to this Agreement at the time of such termination. On the payment of
such compensation, the Company shall have no further obligation to the
Executive pursuant to this Agreement.
(i) Nothing in this Paragraph 4.6 shall preclude the Executive
from receiving all benefits to which he/she may be entitled
under the terms and conditions of benefit programs adopted and
approved for senior management of the Company and those
benefits programs specifically approved by the Company for the
Executive.
(ii) Any comprehensive health care benefits coverage for the
benefit of the Executive's spouse and children in effect at
the Executive's death or termination under Paragraphs 4.1(i)
or 4.1(iv), as the case may be, may be continued at the
spouse's expense, subject to the provisions of the
Consolidated Omnibus Reconciliation Act.
4.7 TERMINATION FOR CAUSE. Any termination of the Executive's
employment under this Agreement pursuant to Paragraph 4.1(v) shall be deemed to
be a termination for cause and may be effected only by a majority vote of the
Company's Board of Directors to terminate the Executives employment under this
Agreement pursuant to such Paragraph. Termination of the Executive's
employment under this Agreement for cause shall be effective as of the date
specified in the notice to the Executive of such termination. If the
Executive's Employment under this Agreement is terminated for cause, all
compensation including any earned, but unpaid commissions due the Executive
pursuant to this Agreement to the date of such termination shall be paid by the
Company to the Executive. On the payment of such compensation, the Company
shall have no further obligation to the Executive pursuant to this Agreement.
-5-
<PAGE> 6
4.8 TERMINATION WITHOUT CAUSE.
4.8.1 VOLUNTARY TERMINATION BY THE COMPANY. If the Executive's
employment under this Agreement is terminated pursuant to Paragraph 4.1(vi),
such termination shall be deemed to have occurred without cause and may be
effected only by a majority vote of the Company's Board of Directors to
terminate the Executive's employment under this Agreement. Termination of the
Executive's employment under this Agreement without cause shall be effective as
of the date specified in the notice to the Executive of such termination.
4.8.2 BREACH OF AGREEMENT BY THE COMPANY. If the Executive
reasonably determines that the Company has failed in a material respect to
perform its obligations under this Agreement, the Executive may resign by
specifying in written notice to the Company the failure relied upon for such
determination, and if such failure shall not have been cured within 30 days
after the Company's receipt of such notice, the Executive's employment shall be
deemed terminated without cause; provided, however, that if the Company
disputes the Executive's contention that there has been such a failure, such
dispute shall be resolved by arbitration pursuant to Paragraph 6 and if the
arbitration decision is adverse to the Company's contention, the 30-day period
within which the Company is entitled to cure such failure shall not begin to
run until the day the Company is notified of the arbitration decision.
4.8.3 CONSEQUENCES OF TERMINATION WITHOUT CAUSE. In the event of a
termination of the Executive's employment under this Agreement without cause,
the Company shall within 30 days of such termination (a) pay to the Executive
one full year's salary in semi-monthly installments over the next twelve months
as provided in Paragraph 3.1; (b) pay to the Executive compensation which
would otherwise be payable to the Executive pursuant to Paragraph 3.2 through
the end of the calendar month in which such termination occurs and a further
payment equivalent to the past three months' commissions; (c) pay to the
Executive all awarded but deferred compensation under any bonus plan in which
the Executive is a participant; and (d) pay to the Executive any other benefits
otherwise due to the Executive pursuant to this Agreement or otherwise to the
time of such termination.
5. EXECUTIVE COVENANTS.
5.1 NONCOMPETITION. The Executive will not, during the term of this
Agreement or at any time prior to the first anniversary of the termination of
the Executive's employment pursuant to Paragraphs 4.1(ii), 4.1(iv), or 4.1(v)
of this Agreement, without the express written consent of the Board of
Directors of the Company, directly or indirectly, either engage in or
participate in or invest in or assist, as owner, part-owner, shareholder,
partner, director, officer, trustee, employee, agent or consultant, or in any
other capacity, any firm, corporation, or other business organization other
than the Company (or any subsidiary of the Company) which engages in any of the
following:
-6-
<PAGE> 7
(i) the business of furnishing investment advice to Investment
Companies (as that term is defined in the Investment Company
Act of 1940, as amended) in the United States;
(ii) the business of furnishing investment advisory or management
services to clients other than Investment Companies in the
United States;
(iii) assisting any Investment Company with which the Company or any
subsidiary of the Company has or ever (whether before or after
the date hereof) had any investment advisory or management
agreement (each a "Fund") or any other present or past client
of the Company or any subsidiary of the Company in
internalizing the investment management or investment advisory
function or any other function or service provided by the
Company or any subsidiary of the Company to any such Fund or
client, subject to the Executive's fiduciary duty owed to any
of the Funds or the directors or trustees thereof;
(iv) being a party to any contractual or business relationship with
any Fund or any other client of the Company or any subsidiary
of the Company involving services related to investment
management or investment advisory services, if such related
services are also provided by the Company, by any subsidiary
of the Company or by any other person at the Company's
direction to any Fund or to any other client of the Company or
any subsidiary of the Company;
(v) soliciting or inducing, directly or indirectly, any person who
is or ever (whether before or after the date hereof) was a
director, officer, trustee, partner, employee or client of the
Company or any subsidiary of the Company or of any of the
Funds to sever his/her relationship therewith or to establish
a relationship with any other person; or
(vi) authorizing or knowingly approving the taking of any action set
forth in clauses (iii) through (v) above by any other person.
5.2 NONDISCLOSURE. The Executive recognizes and acknowledges that
by virtue of his/her employment with the Company and because of the trust
bestowed upon him/her by the Company that (a) during the term of this Agreement
he/she will have access to certain confidential information respecting the
Company and its consolidated subsidiaries (the "Consolidated Companies") and
certain confidential stockholder and other records, including but not limited
to corporate books and records, financial information, lists of clients, lists
of prospective clients, portfolio investments of the Consolidated Companies and
their clients and other information and trade secrets ("Confidential
Information"); and (b) the components of the Confidential Information
constitutes valuable, special, and unique assets of the businesses of the
Consolidated Companies. The Executive will not, except as required by law,
during the term of
-7-
<PAGE> 8
his/her employment under this Agreement other than in the normal course of
business and in accordance with past practice of the Company, or at any time
prior to the first anniversary of the termination of such employment, disclose
any Confidential Information to any person or entity not affiliated with the
Company or make any use of any Confidential Information (whether or not any
such use would involve a disclosure of any of the Confidential Information to
any other person or entity) for any reason without the express prior written
consent of the Company. The Company shall be under no obligation to give such
consent for any reason or under any circumstances.
5.3 REMEDIES. In the event of a breach or threatened breach by
the Executive of the provisions of this Paragraph 5, the Parties hereby
stipulate that the Consolidated Companies shall have no adequate remedy at law
and shall be entitled to injunctive or other equitable relief in a court of
competent jurisdiction restraining the Executive from engaging in any activity
prohibited by the provisions of this Paragraph 5. In addition, nothing
contained herein shall in any manner be construed to prohibit or limit the
Consolidated Companies from pursuing any and all other remedies available to
the Consolidated Companies, at law or in equity, for a breach or threatened
breach of this Paragraph 5 of the Agreement, including, but not limited to, the
recovery of damages from the Executive.
6. ARBITRATION. The Company and the Executive agree to submit to
final and binding arbitration any and all disputes, claims (whether in tort,
contract, statutory or otherwise) and/or disagreements concerning the
interpretation or application of this Agreement, the Executive's employment by
the Company and/or the termination of this Agreement and/or the Executive's
employment by the Company. Any such dispute, claim and/or disagreement shall
be resolved by arbitration in accordance with the Commercial Arbitration Rules
of the American Arbitration Association (the "AAA"). Arbitration under this
provision must be initiated within 300 days of the action, inaction, or
occurrence about which the party initiating the arbitration is complaining.
Within 10 days of the initiation of an arbitration hereunder, each party will
designate an arbitrator pursuant to Rule 14 of the AAA Rules. The appointed
arbitrators shall appoint a neutral arbitrator from the panel in the manner
prescribed in Rule 13 of the AAA Rules. The Executive and the Company agree
that the decision of the arbitrators selected hereunder shall be final and
binding on both parties. This arbitration provision is expressly made pursuant
to and shall be governed by the Federal Arbitration Act, 9 U.S.C. Sections
1-14. The Parties hereto agree that, pursuant to Section 9 of the Act, a
judgment of the United States District Court for the Southern District of
Texas, Houston Division, shall be entered upon the award made pursuant to the
arbitration provision.
7. NOTICE. Any notice or other communication required or
permitted by his/her Agreement must be given in writing and may be served by
deposit in the United States mail in certified or registered form, postage
paid, addressed to the Party to be notified with return receipt requested, or
by delivering the notice in person to such Party. Notice given by United
States mail in the manner herein prescribed shall be deemed received on the
date reflected on the return
-8-
<PAGE> 9
receipt. Notices delivered in person shall be deemed received upon their
actual delivery to the Party to whom they are directed. For purposes of
notice, the address of the Executive, his/her spouse, any purported donee or
transferee or any administrator, executor, or legal representative of the
Executive or his/her estate, as the case may be, shall be as follows:
Michael J. Cemo
5604 Buffalo Speedway
Houston, TX 77005
The address of the Company shall be:
A I M Management Group Inc.
11 Greenway Plaza, Suite 1919
Houston, Texas 77046
Attention: President
Either Party shall have the right at any time to change his/her or its address
by giving at least five days' written notice to the other Party.
8. CONTROLLING LAW AND PERFORMANCE. The execution, validity,
interpretation, and performance of this Agreement shall be governed by the laws
of the State of Texas.
9. ADDITIONAL INSTRUMENTS. The Company and the Executive shall
execute and deliver any and all additional instruments and agreements which may
be necessary or proper to carry out the purposes of this Agreement.
10. ENTIRE AGREEMENT; AMENDMENTS; NO SURVIVING PRIOR AGREEMENTS.
This Agreement contains the entire agreement of the Parties with respect to the
subject matter hereof and may be changed only by an agreement in writing signed
by the Party against whom enforcement of any waiver, change, modification,
extension, or discharge is sought. This Agreement shall supersede all prior
agreements, documents, or other instruments with respect to the matters
covered hereby, and all such prior agreements, documents, and instruments shall
terminate upon the execution by the Executive and the Company of this
Agreement.
11. SEPARABILITY. If any provision of the Agreement is rendered
or declared illegal or unenforceable by reason of any existing or subsequently
enacted legislation or by decree of court of last resort, the Parties shall
promptly meet and negotiate substitute provisions for those rendered or
declared illegal or unenforceable to preserve the original intent of this
-9-
<PAGE> 10
Agreement to the extent legally possible, but all other provisions of this
Agreement shall remain in full force and effect.
12. ASSIGNMENTS. The Company may assign this Agreement only with
the written consent of the Executive, which consent shall not be withheld
unreasonably, and in the event of an assignment of this Agreement, all
covenants, conditions, and provisions hereunder shall inure to the benefit of
and be enforceable by or against the Company's successors and assigns. The
rights and obligations of the Executive under this Agreement are personal to
him/her, and no such rights, benefits, or obligations shall be subject to
voluntary or involuntary alienation, assignment, or transfer.
13. EFFECT OF AGREEMENT. Subject to the provisions of Paragraph
12 with respect to assignments, this Agreement shall be binding upon the
Executive and his/her heirs, executors, administrators, legal representatives
and assigns, and upon the Company and its respective successors and assigns.
14. EXECUTION. This Agreement may be executed in multiple
counterparts, each of which shall constitute one and the same instrument.
WAIVER OF BREACH. The waiver of either Party of a breach of any
provision of the Agreement by the other Party shall not be construed as a
waiver by such Party of any subsequent breach by such other Party..
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement
to be effective as of the day and year first above written.
A I M MANAGEMENT GROUP INC
By: /s/ ROBERT H. GRAHAM
------------------------------
Name: Robert H. Graham
Title: President
EXECUTIVE
By: /s/ MICHAEL J. CEMO
------------------------------
-10-
<PAGE> 11
APPENDIX A
The Executive shall be paid monthly commissions based upon the calendar
year-to-date sales of Company-sponsored mutual funds and variable annuities.
The commission for each month ("Monthly Commission") shall be calculated by:
1. Determining the calendar year-to-date dollar credits
attributable to sales of Company sponsored mutual funds and
variable annuities ("Y-T-D Credits") by summing the following
amounts:
(a) the actual underwrite's retention received
by A I M Distributors, Inc. upon sales of Class A
Shares of Company-sponsored mutual Funds ("Class A
Credits");
(b) 0.5% (0.005) of the gross sales of Class B
Shares of Company-sponsored mutual funds ("Class B
Credits");
(c) 0.25% (0.0025) of the gross sales of Class A
Shares of Company-sponsored mutual funds upon which
the front-end load has been waived ("Front-End Load
Waived Credits"); and
(d) 0.6% (0.006) of the gross sales of
Company-sponsored variable annuities ("VA Credits").
2. Determining annualized Y-T-D Credits ("Annualized Credits") by
multiplying the Y-T-D Credits determined in 1 above by 12 and
dividing the product by the number of months elapsed in the
calendar year.
3. Determining annualized commission ("Annualized Commissions")
by applying the following commission schedule to the
Annualized Credits:
(i) 2% of the first $40,000,000 of Annualized Credits;
(ii) 2.5% of the next $25,000,000 of Annualized
Credits; and
(iii) 2% of Annualized Credits in excess of $65,000,000.
4. Determining year-to-date commissions ("Y-T-D Commissions") by
dividing Annualized Commissions by 12 and multiplying the
result by the number of months elapsed in the calendar year.
5. Subtracting from Y-T-D Commissions all previous Monthly
Commissions paid with respect to the calendar year.
The resulting Monthly Commission shall be paid as soon as practical
(but in any case within 45 days) following the end of the month for which it
is due.
<PAGE> 12
In calculating Y-F-D Credits, the following sales of
Company-sponsored mutual funds will be excluded:
a. sales of AIM Summit Fund;
b. sales of Front-End Load Waived Shares for which A I M
Distributors, Inc. or Fund Management Company is the broker-dealer of
record; and
c. sales of Front-End Load Waived Shares included in mutual fund
wrap programs sponsored by broker-dealers. (Commissions on such sales
will be paid on a basis and at a rate to be agreed upon by the Company
and the Executive.)
<PAGE> 1
EXHIBIT 10.3
TWENTY-THIRD AMENDMENT OF LEASE CONTRACT
----------------------------------------
THIS TWENTY-THIRD AMENDMENT OF LEASE CONTRACT ("Twenty-Third
Amendment") is entered into between NINE GREENWAY, LTD., a Texas limited
partnership ("Landlord"), and A I M MANAGEMENT GROUP INC., a Delaware
corporation ("Tenant"), with reference to the following:
A. Nine Greenway Venture (predecessor in interest to Landlord)
and Tenant entered into a Lease Contract dated April 14, 1980, First Amendment
of Lease Contract dated January 29, 1981, Second Amendment of Lease Contract
dated November 12, 1982, Third Amendment of Lease Contract dated August 17,
1984, Fourth Amendment of Lease Contract dated April 28, 1986, Fifth Amendment
of Lease Contract dated December 11, 1986, Sixth Amendment of Lease Contract
dated August 6, 1987, Seventh Amendment of Lease Contract dated February 4,
1988, and Eighth Amendment of Lease Contract dated January 6, 1989, and
Landlord and Tenant entered into a Ninth Amendment of Lease Contract dated
March 27, 1990, Tenth Amendment of Lease Contract dated June 12, 1990, Eleventh
Amendment of Lease Contract dated August 27, 1990, Twelfth Amendment of Lease
Contract dated July 15, 1991, Thirteenth Amendment of Lease Contract dated
January 13, 1992, Fourteenth Amendment of Lease Contract dated July 17, 1992,
Fifteenth Amendment of Lease Contract dated July 17, 1992, Sixteenth Amendment
of Lease Contract dated August 10, 1992, Seventeenth Amendment of Lease
Contract dated February 25, 1993, Eighteenth Amendment of Lease Contract dated
April 22, 1994, Nineteenth Amendment of Lease Contract dated March 31, 1995,
Twentieth Amendment of Lease Contract dated July 31, 1995, Twenty-First
Amendment of Lease Contract dated August 1, 1995 and Twenty-Second Amendment of
Lease Contract (the "Twenty-Second Amendment") dated December 1, 1995 (as
amended, the "Lease") covering approximately 252,676 square feet of Rentable
Area consisting of: approximately 9,671 square feet of Rentable Area on the
Concourse Level; the entirety of the sixth (6th) floor; the entirety of the
seventh (7th) floor; approximately 17,741 square feet of Rentable Area on the
eleventh (11th) floor [of which approximately 10,940 square feet of Rentable
Area shall become effective on or about November 16, 1996]; approximately
12,645 square feet of Rentable Area on the twelfth (12th) floor; the entirety
of the thirteenth (13th) floor; approximately 9,655 square feet of Rentable
Area on the seventeenth (17th) floor; the entirety of the eighteenth (18th)
floor; the entirety of the nineteenth (19th) floor; the entirety of the
twenty-third (23rd) floor; the entirety of the twenty-fourth (24th) floor; the
entirety of the twenty-fifth (25th) floor; and approximately 11,904 square feet
of Rentable Area on the twenty-sixth (26th) floor [of which approximately 9,386
square feet of Rentable Area shall become effective on or about March 16, 1996
and approximately 2,518 square feet of Rentable Area shall become effective on
or about April 16, 1996] of the building known as Summit Tower, Eleven
Greenway, Houston, Texas (the "Building").
B. The parties have discovered minor errors in the square
footage amounts stated in certain prior amendments to the Lease for those
portions of the Leased Premises located on the eighteenth (18th) and
nineteenth (19th) floors of the Building.
C. Landlord and Tenant now desire to enter into this
Twenty-Third Amendment in order to (i) correct such errors; (ii) restate the
square footage of Rentable Area currently under Lease; (iii) adjust the Rent
Schedule and the Building Operating Cost accordingly; and (iv) provide for a
credit to Tenant for over-payments of Base Rental and Building Operating Cost,
as provided more fully below.
FOR GOOD AND VALUABLE CONSIDERATION, the receipt and sufficiency of
which are acknowledged, the parties agree as follows:
<PAGE> 2
1. CORRECTION OF SQUARE FOOTAGE.
a. Effective as of the original date of leasing the space, the
Rentable Area leased by Tenant on the eighteenth (18th) floor of the Building
shall be decreased from 23,907 square feet to 23,782 square feet, thereby
reducing the space by 125 square feet.
b. Effective as of the original date of leasing the space, the
Rentable Area leased by Tenant on the nineteenth (19th) floor of the Building
shall be decreased from 24,187 square feet to 23,782 square feet, thereby
reducing the space by 405 square feet.
2. REVISED SQUARE FOOTAGE. Landlord and Tenant confirm that the Rentable
Area leased by Tenant pursuant to the Lease as of the date of this Twenty-Third
Amendment is as follows (subject to Tenant's anticipated occupancy of the
remaining expansion spaces specified in the footnotes below):
<TABLE>
<CAPTION>
Floor Sq. Ft. of Rentable Area
----- ------------------------
<S> <C>
A portion of the concourse level 9,671
The entirety of the sixth (6th) floor 23,399
The entirety of the seventh (7th) floor 23,399
A portion of the eleventh (11th) floor 17,741(1)
A portion of the twelfth (12th) floor 12,645
The entirety of the thirteenth (13th) floor 23,829
A portion of the seventeenth (17th) floor 9,655
The entirety of the eighteenth (18th) floor 23,782
The entirety of the nineteenth (19th) floor 23,782
The entirety of the twenty-third (23rd) floor 24,113
The entirety of the twenty-fourth (24th) floor 24,113
The entirety of the twenty-fifth (25th) floor 24,113
A portion of the twenty-sixth (26th) floor 11,904(2)
-------
TOTAL 252,146
</TABLE>
(1) The Commencement Date for 6,801 square feet of
Rentable Area (Expansion Space "U") occurred on
January 1, 1996; and the Commencement Date for 10,940
square feet of Rentable Area (Expansion Space "X")
is anticipated to occur on November 11, 1996.
(2) The Commencement Date for 9,386 square feet of
Rentable Area (Expansion Space "V") is anticipated
to occur on March 16, 1996; and the Commencement Date
for 2,518 square feet of Rentable Area (Expansion
Space "W") is anticipated to occur on April 16, 1996.
3. REVISED SCHEDULE OF BASE RENTAL.
a. Commencing January 1, 1996, the schedule of Base Rental set
forth in Paragraph 3.A. of the Lease (as previously amended by Paragraph XIII
of the Twenty-Second Amendment) shall be deleted and the following inserted in
lieu thereof:
<TABLE>
<CAPTION>
FROM TO MONTHLY BASE RENTAL
---- -- -------------------
<S> <C> <C>
January 1, 1996 March 15, 1996 $260,197.71
March 16, 1996 March 31, 1996 $271,148.04
April 1, 1996 April 15, 1996 $271,306.20
April 16, 1996 November 15, 1996 $274,243.87
November 16, 1996 December 31, 1997 $286,551.37
January 1, 1998 June 9, 2000 $313,918.11
June 10, 2000 December 31, 2000 $325,679.14
January 1, 2001 December 31, 2003 $344,886.60
</TABLE>
2
<PAGE> 3
b. The foregoing revised rent schedule reflects the following
rent reductions applicable to a total of 530 square feet of Rentable Area
(i.e., 125 square feet of Rentable Area on the eighteenth [18th] floor and
405 square feet of Rentable Area on the nineteenth [19th] floor):
<TABLE>
<CAPTION>
FROM TO RENT/SQ.FT. REDUCTION
---- -- ----------- ---------
<S> <C> <C> <C>
January 1, 1996 December 31, 1997 $13.50 $596.26
January 1, 1998 December 31, 2000 $16.00 $706.67
January 1, 2001 December 31, 2003 $17.00 $750.83
</TABLE>
c. The foregoing revised rent schedule shall be subject to
further amendment should any Commencement Date for Expansion Spaces V, W and/or
X occur on a date other than as anticipated in the Twenty-Second Amendment.
When Expansion Spaces V, W and X are occupied by Tenant, Landlord and Tenant
shall, at the request of either party, execute a memorandum specifying the
Commencement Date for each such expansion space.
4. ESCALATION ADJUSTMENT. Effective January 1, 1996, Tenant's
proportionate share of increases in Building Operating Cost payable under
Paragraph 13. of the Lease shall be decreased to take into consideration the
square footage reductions on the eighteenth (18th) and nineteenth (19th) floors
of the Building as outlined herein.
5. CREDITS.
a. In consideration of Tenant's over-payment of Base Rental due
to errors previously contained in the square footage of the Leased Premises,
Landlord grants Tenant a credit against Base Rental in the amount of Forty-Two
Thousand Three Hundred Forty-Three and 71/100 Dollars ($42,343.71). Such credit
represents the aggregate amount of Tenant's overpayment of Base Rental through
and including December 31, 1995. Such credit shall be applied against the first
payment of Base Rental becoming due after Landlord's receipt of a
fully-executed copy of this Twenty-Third Amendment.
b. The total credit outlined above is based on the following Base
Rental adjustments:
(i) CREDIT SCHEDULE - 19th floor:
-----------------------------
<TABLE>
<CAPTION>
FROM TO RENT/SQ.FT. RENTAL RATE CREDIT
---- -- ----------- ----------- ------
<S> <C> <C> <C> <C>
December 1, 1986 November 30, 1987 79 $00.00 $ 00.00
December 1, 1987 December 31, 1988 79 $18.00 $ 1,540.50
January 1, 1989 December 31, 1994 405 $11.59 $28,163.52
January 1, 1995 December 31, 1995 405 $13.50 $ 5,467.56
----------
TOTAL $35,171.58
</TABLE>
(ii) CREDIT SCHEDULE - 18th floor:
------------------------------
<TABLE>
<CAPTION>
FROM TO RENT/SQ.FT. RENTAL RATE CREDIT
---- -- ----------- ----------- ------
<S> <C> <C> <C> <C>
October 1, 1991 December 31, 1995 125 $13.50 $7,172.13
---------
TOTAL $7,172.13
</TABLE>
c. In consideration of Tenant's over-payment of Building
Operating Cost due to errors previously contained in the square footage of the
Leased Premises, Landlord grants Tenant a credit against Base Rental in the
aggregate amount of such overpayments through and including December 31, 1995.
Promptly upon execution of this Twenty-Third Amendment, Landlord shall notify
Tenant of the amount of such credit, which shall be applied against the first
payment of Base Rental becoming due thereafter.
6. NO FURTHER MODIFICATIONS. The foregoing amendments shall not alter the
schedule for expansion of the Leased Premises set forth in the Twenty-Second
Amendment with respect to Expansion Space X on the eleventh (11th) floor and
Expansion Spaces V and W on the twenty-sixth (26th) floor of the Building.
Except as modified by this Twenty-Third Amendment, the Lease remains unchanged
and shall continue in full force and effect.
3
<PAGE> 4
ACCORDINGLY, Landlord and Tenant enter into this Twenty-Third
Amendment as of March 18, 1996.
NINE GREENWAY, LTD., by its managing
partner, J/K - G/P #9, LTD., by its sole general
partner, J/K Holdings, Inc.
By /s/ NEIL H. TOFSKY
--------------------------------------------
Neil H. Tofsky, Senior Vice President
LANDLORD
A I M MANAGEMENT GROUP INC., a Delaware
corporation
By /s/ GARY T. CRUM
--------------------------------------------
Gary T. Crum, Senior Vice President
TENANT
4
<PAGE> 1
EXHIBIT 10.4
TWENTY-FOURTH AMENDMENT OF LEASE CONTRACT
-----------------------------------------
THIS TWENTY-FOURTH AMENDMENT OF LEASE CONTRACT ("Twenty-Fourth
Amendment") is entered into between NINE GREENWAY, LTD., a Texas limited
partnership ("Landlord"), and A I M MANAGEMENT GROUP INC., a Delaware
corporation ("Tenant"), with reference to the following:
A. Nine Greenway Venture (predecessor in interest to Landlord)
and Tenant entered into a Lease Contract dated April 14, 1980, First Amendment
of Lease Contract dated January 29, 1981, Second Amendment of Lease Contract
dated November 12, 1982, Third Amendment of Lease Contract dated August 17,
1984, Fourth Amendment of Lease Contract dated April 28, 1986, Fifth Amendment
of Lease Contract dated December 11, 1986, Sixth Amendment of Lease Contract
dated August 6, 1987, Seventh Amendment of Lease Contract dated February 4,
1988, and Eighth Amendment of Lease Contract dated January 6, 1989, and
Landlord and Tenant entered into a Ninth Amendment of Lease Contract dated
March 27, 1990, Tenth Amendment of Lease Contract dated June 12, 1990, Eleventh
Amendment of Lease Contract dated August 27, 1990, Twelfth Amendment of Lease
Contract dated July 15, 1991, Thirteenth Amendment of Lease Contract dated
January 13, 1992, Fourteenth Amendment of Lease Contract dated July 17, 1992,
Fifteenth Amendment of Lease Contract dated July 17, 1992, Sixteenth Amendment
of Lease Contract dated August 10, 1992, Seventeenth Amendment of Lease
Contract dated February 25, 1993, Eighteenth Amendment of Lease Contract dated
April 22, 1994, Nineteenth Amendment of Lease Contract dated March 31, 1995,
Twentieth Amendment of Lease Contract dated July 31, 1995, Twenty-First
Amendment of Lease Contract dated August 1, 1995 and Twenty-Second Amendment of
Lease Contract (the "Twenty-Second Amendment") dated December 1, 1995,
Twenty-Third Amendment of Lease Contract ("the Twenty-Third Amendment") dated
March 18, 1996 (as amended, the "Lease") covering approximately 252,146 square
feet of Rentable Area consisting of: approximately 9,671 square feet of Rentable
Area on the Concourse Level; approximately 23,399 square feet of Rentable Area
being the entirety of the sixth (6th) floor; approximately 23,399 square feet of
Rentable Area being the entirety of the seventh (7th) floor; approximately
17,741 square feet of Rentable Area on the eleventh (11th) floor [of which
approximately 10,940 square feet of Rentable Area shall become effective on or
about November 16, 1996]; approximately 12,645 square feet of Rentable Area on
the twelfth (12th) floor; approximately 23,829 square feet of Rentable Area
being the entirety of the thirteenth (13th) floor; approximately 9,655 square
feet of Rentable Area on the seventeenth (17th) floor; approximately 23,782
square feet of Rentable Area being the entirety of the eighteenth (18th) floor;
approximately 23,782 square feet of Rentable Area being the entirety of the
nineteenth (19th) floor; approximately 24,113 square feet of Rentable Area being
the entirety of the twenty-third (23rd) floor; approximately 24,113 square feet
of Rentable Area being the entirety of the twenty-fourth (24th) floor;
approximately 24,113 square feet of Rentable Area being the entirety of the
twenty-fifth (25th) floor; and approximately 11,904 square feet of Rentable Area
on the twenty-sixth (26th) floor [of which approximately 9,386 square feet of
Rentable Area shall become effective on or about March 16, 1996 and
approximately 2,518 square feet of Rentable Area shall become effective on or
about April 16, 1996] of the building known as Summit Tower, Eleven Greenway,
Houston, Texas (the "Building").
B. Tenant wishes to lease from Landlord additional space located
on the first (1st) floor and the twelfth (12th) floor of the Building as
hereinafter described.
C. Landlord and Tenant now desire to enter into this
Twenty-Fourth Amendment to incorporate this additional space and adjust the
Base Rental and Building Operating Cost accordingly, as provided below.
FOR GOOD AND VALUABLE CONSIDERATION, the receipt and sufficiency of
which are acknowledged, the parties agree as follows:
<PAGE> 2
1. ADDITIONAL SPACE.
a. Landlord leases to Tenant and Tenant leases from Landlord
approximately 3,056 square feet of Rentable Area on the twelfth (12th) floor of
the Building shown outlined and hatched on EXHIBIT "A" attached hereto
("Expansion Space "Y"). The lease term for Expansion Space Y shall commence on
the "Commencement Date" defined below and shall expire on December 31, 2003,
the date of expiration of the Fourth Extension Period. The Commencement Date
for Expansion Space Y shall be forty-five (45) days from the date Landlord
tenders possession of Expansion Space Y to Tenant. Such tender of possession is
anticipated to occur on March 16, 1996 and the Commencement Date is anticipated
to be May 1, 1996.
b. Landlord leases to Tenant and Tenant leases from Landlord
approximately 4,607 square feet of Rentable Area on the first (1st) floor of
the Building shown outlined and hatched on EXHIBIT "B" attached hereto
("Expansion Space "Z"). The lease term for Expansion Space Z shall commence on
the "Commencement Date" defined below and shall expire on December 31, 2003,
the date of expiration of the Fourth Extension Period. The Commencement Date
for Expansion Space Z shall be forty-five (45) days from the date Landlord
tenders possession of Expansion Space Z to Tenant. Such tender of possession is
anticipated to occur on April 1, 1996 and the Commencement Date is anticipated
to be May 16, 1996.
c. Landlord leases to Tenant and Tenant leases from Landlord
approximately 7,698 square feet of Rentable Area on the twelfth (12th) floor of
the Building shown outlined and hatched on EXHIBIT "C" attached hereto
("Expansion Space "AA"). The lease term for Expansion Space AA shall commence
on the "Commencement Date" defined below and shall expire on December 31, 2003,
the date of expiration of the Fourth Extension Period. The Commencement Date
for Expansion Space AA shall be forty-five (45) days from the date Landlord
tenders possession of Expansion Space AA to Tenant. Such tender of possession
is anticipated to occur on July 1, 1996 and the Commencement Date is
anticipated to be August 16, 1996.
2. TOTAL SQUARE FOOTAGE. The following summarizes the schedule of
expansion remaining to be undertaken in 1996 pursuant to the Twenty-Second
Amendment and this Twenty-Fourth Amendment:
a. Commencing March 16, 1996, the term "Leased Premises" as used
herein shall mean and include approximately 238,688 square feet of Rentable
Area, being approximately 229,302 square feet of Rentable Area currently leased
and occupied by Tenant, plus approximately 9,386 square feet of Rentable Area
in Expansion Space V leased under the Twenty-Second Amendment.
b. Commencing April 16, 1996, the term "Leased Premises" as used
herein shall mean and include approximately 241,206 square feet of Rentable
Area, being approximately 238,688 square feet of Rentable Area then leased and
occupied by Tenant, plus approximately 2,518 square feet of Rentable Area in
Expansion Space W leased under the Twenty-Second Amendment.
c. Commencing May 1, 1996, the term "Leased Premises" as used
herein shall mean and include approximately 244,262 square feet of Rentable
Area, being approximately 241,206 square feet of Rentable Area then leased and
occupied by Tenant, plus approximately 3,056 square feet of Rentable Area in
Expansion Space Y leased hereunder.
d. Commencing May 16, 1996, the term "Leased Premises" as used
herein shall mean and include approximately 248,869 square feet of Rentable
Area, being approximately 244,262 square feet of Rentable Area then leased and
occupied by Tenant, plus approximately 4,607 square feet of Rentable Area in
Expansion Space Z leased hereunder.
2
<PAGE> 3
e. Commencing August 16, 1996, the term "Leased Premises" as used
herein shall mean and include approximately 256,567 square feet of Rentable
Area, being approximately 248,869 square feet of Rentable Area then leased and
occupied by Tenant, plus approximately 7,698 square feet of Rentable Area in
Expansion Space AA leased hereunder.
f. Commencing November 16, 1996, the term "Leased Premises" as
used herein shall mean and include approximately 267,507 square feet of
Rentable Area, being approximately 256,567 then leased and occupied by Tenant,
plus approximately 10,940 square feet of Rentable Area in Expansion Space X
leased under the Twenty-Second Amendment.
3. Base Rental.
a. Tenant shall pay Landlord Base Rental for Expansion Space Y in
the sum of Three Thousand Four Hundred Thirty-Eight and 00/00 Dollars
($3,438.00) per month from the Commencement Date (anticipated to be May 1,
1996) through December 31, 2000. Commencing January 1, 2001 and continuing
through December 31, 2003, Tenant shall pay Landlord for Expansion Space Y the
sum of Four Thousand Seventy-Four and 67/100 Dollars ($4,074.67).
b. Tenant shall pay Landlord Base Rental for Expansion Space Z in
the sum of Six Thousand One Hundred Nineteen and 63/00 Dollars ($6,119.63) per
month from the Commencement Date (anticipated to be May 16, 1996) through
December 31, 2000. Commencing January 1, 2001 and continuing through December
31, 2003, Tenant shall pay Landlord for Expansion Space Z the sum of Seven
Thousand Two Hundred Fifty-Two and 19/100 Dollars ($7,252.19).
c. Tenant shall pay Landlord Base Rental for Expansion Space AA
in the sum of Eight Thousand Six Hundred Sixty and 25/00 Dollars ($8,660.25)
per month from the Commencement Date (anticipated to be August 16, 1996)
through December 31, 2000. Commencing January 1, 2001 and continuing through
December 31, 2003, Tenant shall pay Landlord for Expansion Space AA the sum of
Ten Thousand Two Hundred Sixty-Four and 00/100 Dollars ($10,264.00).
4. Revised Schedule of Base Rental. Effective March 16, 1996
(Commencement Date for Expansion Space V taken under the Twenty-Second
Amendment), the rent schedule set forth in Paragraph 4 of the Twenty-Third
Amendment is deleted in its entirety and the following rent schedule which
takes into consideration Expansion Spaces Y, Z and AA leased hereunder, shall
be substituted in lieu thereof:
<TABLE>
<CAPTION>
FROM TO MONTHLY BASE RENTAL
---- -- -------------------
<S> <C> <C>
March 16, 1996 March 31, 1996 $271,148.04
April 1, 1996 April 15, 1996 $271,306.20
April 16, 1996 April 30, 1996 $274,243.87
May 1, 1996 May 15, 1996 $277,681.87
May 16, 1996 August 15, 1996 $283,801.50
August 16, 1996 November 15, 1996 $292,461.75
November 16, 1996 December 31, 1997 $304,769.25
January 1, 1998 June 9, 2000 $332,135.99
June 10, 2000 December 31, 2000 $343,897.02
January 1, 2001 December 31, 2003 $366,477.46
</TABLE>
The foregoing rent schedule shall be subject to further amendment
should any Commencement Date for Expansion Spaces V, W and/or X occur on a date
other than as anticipated in the Twenty-Second Amendment or should any
Commencement Date for Expansion Spaces Y, Z, and/or AA occur on a date other
than as anticipated in this Twenty-Fourth Amendment. When Expansion Spaces Y,
Z and AA are occupied by Tenant, Landlord and Tenant shall, at the request of
either party, execute a memorandum specifying the Commencement Date for each
such expansion space.
3
<PAGE> 4
5. ESCALATION ADJUSTMENT. Tenant's proportionate share of increases in
Building Operating Costs payable under Paragraph 13. of the Lease shall be
increased to take into consideration Expansion Spaces Y, Z and AA leased
hereunder. The "Base Year" for Expansion Spaces Y, Z and AA shall be the
calendar year 1996.
6. CONDITION OF PREMISES.
a. Landlord will tender and Tenant agrees to accept Expansion
Spaces Y and AA in an "as-is" condition; however, in Expansion Spaces Y and AA,
Landlord shall provide an allowance ("Construction Allowance") of One Hundred
Seventy-Two Thousand Sixty-Four and 00/100 Dollars ($172,064.00 [$16.00 per
square foot of Rentable Area]) for permanent leasehold improvements Tenant may
elect to install in Expansion Spaces Y and AA. As said Construction Allowance
is utilized by Tenant, payments and/or partial payments to Tenant shall be made
thirty (30) days from Landlord's receipt of paid invoices. Tenant shall, at its
sole cost and expense, provide complete construction documentation, including
MEP engineered drawings. Tenant may utilize up to Twenty-One Thousand Five
Hundred Eight and 00/100 Dollars ($21,508.00 [$2.00 per square foot of Rentable
Area]) to offset its cost for architectural services and the preparation of
construction documentation. In the event the entire Construction Allowance is
not utilized by Tenant, up to Ten Thousand Seven Hundred Fifty-Four and 00/00
Dollars ($10,754.00 [$1.00 per square foot of Rentable Area]) may be taken as a
credit again Base Rental. Such credit shall be applied against the first
monthly Base Rental payment next coming due after completion and occupancy of
the Expansion Spaces Y and AA, as the case may be.
b. Landlord will tender and Tenant agrees to accept Expansion
Space Z in an "as-is" condition; however, Landlord shall provide an allowance
("Construction Allowance") of Eighty-Seven Thousand Twenty-Six and 23/100
Dollars ($87,026.23 [$18.89 per square foot of Rentable Area]) for permanent
leasehold improvements Tenant may elect to install in Expansion Space Z. As
said Construction Allowance is utilized by Tenant, payments and/or partial
payments to Tenant shall be made thirty (30) days from Landlord's receipt of
paid invoices. Tenant shall, at its sole cost and expense, provide complete
construction documentation, including MEP engineered drawings. Tenant may
utilize up to Nine Thousand Two Hundred Fourteen and 00/100 Dollars ($9,214.00
[$2.00 per square foot of Rentable Area]) to offset its cost for architectural
services and the preparation of construction documentation. In the event the
entire Construction Allowance is not utilized by Tenant, up to Four Thousand
Six Hundred Eight and 00/100 Dollars ($4,607.00 [$1.00 per square foot of
Rentable Area]) may be taken as a credit again Base Rental. Such credit shall
be applied against the first monthly Base Rental payment next coming due after
completion and occupancy of the Expansion Spaces Z.
7. COMPETITIVE BIDS. For Expansion Spaces Y, Z and AA, Landlord will seek
competitive bids from a number of three (3) general contractors which meet
Landlord's existing requirements from Landlord's approved bidding list mutually
agreed upon between Tenant and Landlord and provide Tenant copies of the bids.
In addition, only subcontractors approved by Landlord, according to Landlord's
current standards for such approval, will be permitted to work on the
mechanical, electrical and plumbing systems of the Building. Tenant shall be
allowed to participate in the selection of the successful bidder and Tenant
shall enter into a contract with the successful bidder.
8. AMERICANS WITH DISABILITIES ACT. Landlord shall be responsible for
costs and implementation associated with compliance with the Americans with
Disabilities Act (the "ADA") for the base Building and all points of access
into the Building ("the Landlord's ADA Work"). Tenant shall be responsible for
all costs and implementation associated with ADA compliance within Expansion
Spaces Y, Z, and AA; however, for Expansion Spaces Y and AA, Tenant's ADA
compliance shall include bathrooms.
4
<PAGE> 5
6. NO FURTHER MODIFICATIONS. Except as modified by this Twenty-Fourth
Amendment, the Lease remains unchanged and shall continue in full force and
effect.
ACCORDINGLY, Landlord and Tenant enter into this Twenty-Fourth
Amendment as of March 18, 1996.
NINE GREENWAY, LTD., by its managing
partner, J/K - G/P #9, LTD., by its sole general
partner, J/K Holdings, Inc.
By /s/ NEIL H. TOFSKY
--------------------------------------------
Neil H. Tofsky, Senior Vice President
LANDLORD
A I M MANAGEMENT GROUP INC., a Delaware
corporation
By /s/ GARY T. CRUM
--------------------------------------------
Gary T. Crum, Senior Vice President
TENANT
5
<PAGE> 6
FLOOR 12
Floor Status
30 June 1995
[EXPANSION SPACE Y
FLOOR PLAN]
EXHIBIT "A"
AIM MANAGEMENT GROUP INC.
Expansion Space Y
PLEASE INITIAL
ILLEGIBLE
--------------
ILLEGIBLE
--------------
11 GREENWAY PLAZA
SENTERRA DEVELOPMENT
<PAGE> 7
FLOOR 1
Floor Status
1 January 1995
[EXPANSION SPACE Z
FLOOR PLAN]
EXHIBIT "B"
AIM MANAGEMENT GROUP INC.
Expansion Space Z
PLEASE INITIAL
ILLEGIBLE
--------------
ILLEGIBLE
--------------
11 GREENWAY PLAZA
SENTERRA DEVELOPMENT
<PAGE> 8
FLOOR 12
Floor Status
30 June 1995
[EXPANSION SPACE AA
FLOOR PLAN]
EXHIBIT "C"
AIM MANAGEMENT GROUP INC.
Expansion Space AA
PLEASE INITIAL
ILLEGIBLE
--------------
ILLEGIBLE
--------------
11 GREENWAY PLAZA
SENTERRA DEVELOPMENT
<PAGE> 1
EXHIBIT 11
A I M MANAGEMENT GROUP INC. AND SUBSIDIARIES
Computation of Earnings Per Share
(unaudited)
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-------------------
1996 1995
------ -------
<S> <C> <C>
Computation of Earnings per Common Share:
Net Income ........................................... $20,552 $ 5,594
Less increase in the Redemption Price of the Class
B Common Stock ...................................... (8,249) --
------- -------
Income applicable to common stock .................... $12,303 $ 5,594
------- -------
Computation of Weighted Average Common Shares:
Weighted average common shares outstanding ........... 3,294 3,175
Common shares issuable upon exercise of warrants
and options ......................................... 568 579
Less shares assumed repurchased with proceeds ........ (281) (238)
------- -------
3,581 3,516
------- -------
EARNINGS PER SHARE ...................................... $ 3.44 $ 1.59
======= =======
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 45,659
<SECURITIES> 7,557
<RECEIVABLES> 35,222
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 88,438
<PP&E> 32,891
<DEPRECIATION> (15,403)
<TOTAL-ASSETS> 200,465
<CURRENT-LIABILITIES> 49,146
<BONDS> 149,941
<COMMON> 6
67,839
0
<OTHER-SE> (76,345)
<TOTAL-LIABILITY-AND-EQUITY> 200,465
<SALES> 0
<TOTAL-REVENUES> 84,481
<CGS> 0
<TOTAL-COSTS> 43,099
<OTHER-EXPENSES> 5,217
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,669
<INCOME-PRETAX> 32,496
<INCOME-TAX> 11,944
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 20,552
<EPS-PRIMARY> 3.44
<EPS-DILUTED> 3.44
</TABLE>
