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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 33-72710
UNIVERSAL OUTDOOR, INC.
ILLINOIS 36-2827496
-------- ----------
(STATE OR OTHER JURISDICTION (IRS EMPLOYER IDENTIFICATION NO.)
OF INCORPORATION OR ORGANIZATION)
321 NORTH CLARK STREET, SUITE 1010, CHICAGO, ILLINOIS 60610
REGISTRANT'S TELEPHONE NUMBER: (312) 644-8673
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 _____
THE NUMBER OF SHARES OUTSTANDING OF THE REGISTRANT'S COMMON STOCK, $0.01
PAR VALUE, AS OF JUNE 30, 1996 WAS 10,000.
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PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
UNIVERSAL OUTDOOR, INC.
BALANCE SHEETS
(Dollars in Thousands)
ASSETS
June 30, December 31,
1996 1995
----------- ------------
(Unaudited)
CURRENT ASSETS:
Cash $ 59 $ 19
Accounts receivable 9,654 5,059
Other receivables 563 201
Prepaid land rents 2,644 1,043
Prepaid insurance and other 1,594 1,029
----------- ------------
Total current assets 14,514 7,351
----------- ------------
PROPERTY AND EQUIPMENT 152,279 55,346
----------- ------------
OTHER ASSETS:
Noncomplete agreements, net of accumulated
amortization of $5,155 and $1,044 1,426 1,995
Finance costs, net of accumulated
amortization of $1,044 and $835 5,631 3,196
Excess of cost over fair value of
assets acquired, net of accumulated
amortization of $261 and $230 2,952 700
Other costs associated with acquisitions,
net of accumulated amortization of $781
and $686 548 525
Deposits 22 20
----------- ------------
Total other assets 10,579 6,436
----------- ------------
$177,372 $69,133
----------- ------------
----------- ------------
LIABILITIES AND COMMON STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Current maturities of long term debt $ - $ 58
Accounts payable 1,285 1,225
Accrued interest 998 1,054
Accounts payable - affiliates 220 234
Deferred revenue 487 468
Accrued expenses 3,402 409
----------- ------------
Total current liabilities 6,392 3,448
----------- ------------
LONG TERM DEBT, less current maturities 150,207 76,079
----------- ------------
COMMON STOCKHOLDER'S DEFICIT:
Common stock, $.01 par value, 1,500,000
shares authorized; and 437,500
shares issued and outstanding - -
Additional paid in capital 52,524 22,535
Accumulated deficit (31,751) (32,929)
----------- ------------
Total common stockholders' deficit 20,773 (10,394)
----------- ------------
$177,372 $69,133
----------- ------------
----------- ------------
See accompanying notes to financial statements.
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UNIVERSAL OUTDOOR,INC.
STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in Thousands)
<TABLE>
<CAPTION>
For the For the
Three Months Ended Six Months Ended
June 30, June 30,
----------------- -----------------
1996 1995 1996 1995
------- ------- ------- -------
<S> <C> <C> <C> <C>
Revenues $20,034 $10,267 $29,366 $18,292
Less agency commissions 2,222 1,092 3,127 1,881
------- ------- ------- -------
Net revenues 17,812 9,175 26,239 16,411
------- ------- ------- -------
Operating expenses:
Direct cost of revenues 5,949 3,158 9,520 6,266
General and administrative
expenses 1,922 1,107 3,076 2,150
Depreciation and amortization 2,642 1,801 4,674 3,538
------- ------- ------- -------
10,513 6,066 17,270 11,954
------- ------- ------- -------
Operating income 7,299 3,109 8,969 4,457
Other (income) expenses:
Interest expense 3,562 2,005 5,871 4,059
Interest expense - amortization
of deferred financing costs 108 130 215 221
Miscellaneous 1,750 1,750
(Gain) loss on disposal of
assets and other expenses (87) 11 (76) 21
------- ------- ------- -------
Total other expense 5,333 2,206 7,760 4,301
------- ------- ------- -------
Net income (loss) $ 1,966 $ 903 $1,209 $ 156
------- ------- ------- -------
------- ------- ------- -------
</TABLE>
See accompanying notes to financial statements.
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UNIVERSAL OUTDOOR, INC.
STATEMENTS OF CASH FLOW
(Unaudited)
(Dollars in Thousands)
<TABLE>
<CAPTION>
For the six For the
months ended year ended
June 30, December 31,
1996 1995
--------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ 1,209 ($ 156)
Depreciation and amortization 3,896 3,790
Costs related to acquisitions 1,750 -
Loss (gain) on sale of property and equipment - -
Changes in assets and liabilities:
Accounts receivable and other receivables (1,254) (672)
Prepaid land rents, insurance and other (209) (73)
Accounts payable and accrued expenses 866 (407)
Accounts payable - affiliate (10) (146)
Accrued interest (72) (44)
Other - 15
--------- --------
Net cash provided by operation activities 6,176 2,619
--------- --------
CASH FLOWS USED IN INVESTING ACTIVITIES:
Capital expenditures (2,943) (2,521)
Acquisitions net of cash acquired (107,106) (2,164)
Other payments (2) -
Acquisition costs (74) -
--------- --------
Net cash used in investing activities (110,125) (4,685)
--------- --------
CASH FLOWS USED IN FINANCING:
Proceeds from issuance of LTD 75,000 -
Principal payments of LTD (1,173) (52)
Net borrowings (repayments) of LOC LaSalle (9,478) 2,267
Net borrowings (repayments) of LOC Bankers Trust 9,700
Deferred financing costs -
Additional paid in capital 30,000 -
Dividend paid to parent - (60)
Other (60) -
--------- --------
Net cash used/received in financing 103,989 2,071
--------- --------
NET INCREASE (DECREASE) IN CASH 40 5
CASH AT BEGINNING $ 19 11
--------- --------
--------- --------
CASH AT END $ 59 $ 16
--------- --------
--------- --------
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid during the period $ 5,815 $4,035
--------- --------
--------- --------
</TABLE>
See accompanying notes to financial statements.
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UNIVERSAL OUTDOOR, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - BASIS OF PRESENTATION OF UNAUDITED FINANCIAL STATEMENTS:
The financial statements contained herein have been prepared by management
and are unaudited. The financial statements should be read in conjunction
with the financial statements and the notes thereto included in the Annual
Report on Form 10-K of Universal Outdoor, Inc. ("Universal") for the year
ended December 31, 1995.
In the opinion of management, the accompanying unaudited financial statements
contain all adjustments, considering only of normal recurring adjustments,
necessary to present fairly the financial position of Universal as of March
31, 1996, and the results of its operations and its cash flows for the
periods presented herein.
Earnings per share calculations have not been prepared because Universal is a
wholly-owned subsidiary of Universal Outdoor Holdings, Inc. (The "Holding
Company"), and the Holding Company is closely held and owned by a private
investor group. Accordingly, earnings per share is not required or
meaningful.
Prior to the Refinancing Plan, Universal Outdoor, Inc., Universal Outdoor II
Holding Company, Outdoor Properties, Inc., Midwest Outdoor Management, Inc.
and CBT Development, Inc. were under common ownership and control. In
connection with the Refinancing Plan, (i) a wholly-owned subsidiary of the
Holding Company was merged with and into Universal Outdoor, Inc. Which
thereupon became a wholly-owned subsidiary of the Holding Company and (ii)
Universal Outdoors, Inc. acquired all the assets, in consideration of the
assumption of all the liabilities, of each of Outdoor Properties, Inc.,
Midwest Outdoor Management, Inc. and CBT Development, Inc.
NOTE 2 - REFINANCING PLAN:
Effective November 18, 1993, Universal executed a Refinancing Plan to extend
the average life of its obligations, thereby enhancing its operations and
financial flexibility. As part of the Refinancing Plan, Universal combined,
in a single operating entity (Universal Outdoor, Inc.) under the Holding
Company, business activities previously conducted by separate affiliated
corporations, repaid certain outstanding indebtedness, issued $65.0 million
Senior Notes due 2003 of Universal Outdoor, Inc. and replaced its existing
bank credit facility.
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In addition, the Refinancing Plan provided for the amendment of the terms of
the redeemable preferred stock of the Holding Company to allow the provisions
of the indenture governing the $65.0 million Senior Notes due 2003 to
restrict payments by the operating company to the Holding Company until the
$65.0 million Senior Notes due 2003 have been retired.
NOTE 3 - ACQUISITIONS:
On April 5, 1996 the Company purchased all outstanding stock of NOA Holding
Company, Inc. for approximately $85 million. As a result of the acquisition,
Universal acquired signboards in the Minneapolis/St. Paul, Minnesota and
Jacksonville, Florida markets. The Company financed the acquisition with
$84.7 million in bank borrowings and $30 million in cash proceeds from the
sale of equity of the Holding Company to an investor group.
In the first quarter of 1996, the Company acquired signboards in the Chicago
market through two asset purchase agreements. In January, the Company
purchased 160 display faces from Adsign, Inc. for $12.5 million which was
paid in cash. In March 1996, the Company purchased 18 structures from Image
Media, Inc. for $1.2 million which was paid in cash. Both investments were
financed with borrowings against the Acquisition Line of Credit.
NOTE 4 - RELATED PARTY TRANSACTIONS:
In June 1994, Universal's parent entity, the Holding Company, advanced
approximately $1.2 million to Universal in the form of an intercompany loan
which was a portion of the proceeds from the sale by the Holding Company of
its notes and warrants. Universal does not pay interest on this loan, and as
of June 30, 1996, $225,000 was outstanding.
NOTE 5 - COMMITMENTS AND CONTINGENCIES:
Universal is subject to various litigation in the normal course of business.
Such litigation includes claims by municipalities that certain outdoor
advertising structures should be removed. The ultimate outcome of current
and future litigation cannot be presently determined. Management believes
the outcome of current litigation will not have a significant impact on
Universal.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSES OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
RESULTS OF OPERATIONS
COMPARISON OF SIX MONTHS ENDED JUNE 30, 1996 AND JUNE 30, 1995
Net revenues increased 59.8% to $26.2 million during the first six
months of 1996 compared to $16.4 million in the corresponding 1995 period.
This increase was a result of inclusion of approximately $6.8 million of
revenues from the Minneapolis and Jacksonville markets (the "Naegele
Markets") which were acquired by the Registrant from NOA Holding Company
("Naegele") in April 1996 (the "Naegele Acquisition"). The remaining $3.0
million or 18.3% increase in net revenues was a result of higher advertising
rates and occupancy levels on the Registrant's signboards and inclusion for
the full quarter of signboard revenues from the acquisitions of Image Media,
Inc. and AdSign. Overall net revenues from tobacco advertising increased to
$3.4 million in the first six months of 1996 compared to $2.1 million in the
1995 period. This increase was due mainly to the inclusion of tobacco
revenues from the acquired Naegele Markets. As a percentage of net revenues,
tobacco advertising sales increased to 13.1% in the first six months of 1996
compared to 13.0% in the 1995 period.
Direct cost of revenues increased to $9.5 million in the first six
months of 1996 compared to $6.3 million in the 1995 period. The Naegele
Markets accounted for $2.1 million of the increase. As a percentage of net
revenues, however, direct cost of revenues decreased to 36.3% in the first
six months of 1996 compared to 38.4% in the 1995 period as a result of
economies of scale associated with the increased revenues.
General and administrative expenses increased to $3.1 million in the
first six months of 1996 from $2.2 million in the 1995 period. As a
percentage of net revenues, general and administrative expenses decreased to
11.8% in the first six months of 1996 compared to 13.4% in the 1995 period.
This percentage decrease was due to the addition of the new markets' revenues
without a significant increase in staffing or other corporate overhead
expenses.
Depreciation and amortization expense increased to $4.7 million in the
first six months of 1996 compared to $3.5 million in the 1995 period. This
increase was due to significant increases in the fixed assets as a result of
the acquisitions.
Total interest expense increased to $6.1 million in the first six months
of 1996 compared to $4.3 million in the 1995 period. The increase resulted
from increased debt outstanding under the credit facility which was incurred
to finance the Naegele Acquisition.
Other expenses increased to $1.8 million in 1996. This consisted of a
$1.8 million one-time charge for expenses arising out of the Naegele
Acquisition.
The foregoing factors contributed to the Registrant's $1.2 million net
income in the first six months of 1996 compared to $.2 million net income in
the 1995 period.
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COMPARISON OF THREE MONTHS ENDED JUNE 30, 1996 AND JUNE 30, 1995
Net revenues increased 93.4% to $17.8 million during the three months
ended June 30, 1996 compared to $9.2 million in the corresponding 1995
period. The recently acquired Naegele Markets contributed $6.8 million of
this increase. The remaining $1.8 million or 19.6% increase in net revenues
was a result of higher advertising rates and occupancy levels on the
Registrant's signboards and inclusion for the full quarter of signboard
revenues from the acquisitions of Image Media, Inc. and AdSign. Overall net
revenues from tobacco advertising increased to $2.2 million in the second
quarter of 1996 from $1.1 in the comparable 1995 period as a result of the
Naegele Acquisition. As a percentage of net revenues, tobacco advertising
sales increased to 12.3% for the three months ended June 30, 1996 from 12.0%
in the 1995 period.
Direct cost of revenues increased to $5.9 million in the second quarter
of 1996 compared to $3.2 million in the 1995 period. The Naegele Markets
accounted for $2.1 million of the increase. As a percentage of net revenues,
however, direct cost decreased to 33.1% for the second quarter of 1996
compared to 34.8% for the 1995 period as a result of economies of scale
associated with increased revenues.
General and administrative expenses increased to $1.9 million in the
second quarter of 1996 from $1.1 million in the 1995 period. The Naegele
Markets accounted for $.8 million of the increase. As a percentage of net
revenues, general and administrative expenses decreased to 10.6% for the 1996
period compared to 12.0% in the 1995 period, reflecting further economies of
scale associated with the increased revenues.
Depreciation and amortization expense increased to $2.6 million for the
three months ended June 30, 1996 from $1.8 million for the 1995 period. This
increase was due to significant increases in the fixed assets as a result of
the acquisitions.
Total interest expense increased to $5.1 million in the second quarter
of 1996 compared to $2.2 million in the 1995 period. The increase resulted
from increased debt outstanding under the credit facility which was incurred
to finance the Naegele Acquisition.
Other expenses increased to $1.8 million in 1996. This consisted of a
$1.8 million one-time charge for expenses arising out of the Naegele
Acquisition.
The foregoing factors contributed to the Registrant's $1.9 million net
income for the three months ended June 30, 1996 compared to the $903,000 net
income in the 1995 period.
LIQUIDITY AND CAPITAL RESOURCES
The Registrant has pursued and continues to pursue a strategy of growth
primarily through (i) the development of new outdoor advertising structures
in each of its existing markets and (ii) the acquisition of existing outdoor
advertising properties. In April 1996, the Registrant consummated the
Naegele Acquisition pursuant to which the Registrant acquired approximately
2,550 display faces (of which approximately 1,455 are located in the
Minneapolis/St. Paul market and
7
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approximately 1,095 are located in the Jacksonville market) and approximately
840 painted bulletin faces (of which approximately 440 are located in the
Minneapolis/St. Paul market and approximately 400 are located in the
Jacksonville market). The purchase price of the Naegele Acquisition,
including fees and expenses associated with the transaction, was
approximately $90 million. In connection therewith, the Registrant, its
current lender, LaSalle National Bank ("LaSalle"), and an additional bank,
Bankers Trust Company (together with LaSalle, the "Lenders"), agreed to (i)
refinance the Registrant's existing credit facility with a revolving credit
facility for working capital purposes (the "Revolving Credit Facility"), and
(ii) provide an additional extension of credit for purposes of acquisition
financing (the "Acquisition Credit Facility") and, specifically, the
financing, in part, of the Naegele Acquisition.
At June 30, 1996 approximately $84.7 million was outstanding under the
Acquisition Credit Facility. The Acquisition Credit Facility consists of an
acquisition term loan in the amount of $75 million and an acquisition
revolving credit line in the amount of $12.5 million for a total available of
$87.5 million. In addition, the Lenders have extended $12.5 million under
the Revolving Credit Facility, of which nothing was outstanding at June 30,
1996.
In addition to the amounts drawn under the Acquisition Credit Facility,
Universal Outdoor Holdings, Inc. ("Holdings"), the parent of the Registrant,
sold a minority portion of its capital stock for $30 million in cash proceeds
which was used to finance the remaining amount of the Naegele Acquisition and
to refinance the existing indebtedness.
The credit agreements governing the Revolving Credit Facility and the
Acquisition Credit Facility contain certain restrictions with respect to the
Registrant's ability to (i) incur additional indebtedness and contingent
liabilities, (ii) create liens and (iii) pay dividends and effect certain
other transactions involving the capital stock of the Registrant. In
addition, the indenture governing the Registrant's outstanding senior notes
(the "Indenture") contains a number of restrictive covenants including
limitations on additional debt incurrence based on a cash flow ratio test and
limitations on distributions to shareholders based on a net income test.
On July 23, 1996, Holdings completed an initial public offering of
7,130,000 shares of Common Stock (the "Offering") which included the
Underwriters' exercise of their over-allotment option. Proceeds to Holdings
from the Offering totaled $62.4 million. All of the proceeds were used to
reduce the outstanding indebtedness. In conjunction with this, the
Registrant modified the acquisition term loan and acquisition revolving
credit line to provide for a single acquisition revolving credit line in the
amount of $87.5 million.
Net cash provided by operating activities increased to $6.2 million for
the six months ended June 30, 1996 from $2.6 million for the 1995 period.
Net cash provided by operating activities reflects the Registrant's net loss
adjusted for non-cash items and the use or source of cash for the net change
in working capital.
The Registrant's net cash used in investing activities of $110.1 million
for the six months ended June 30, 1996 includes cash used for acquisitions of
$107.1 million and other capital expenditures of $2.9 million. Capital
expenditures have been made primarily to develop new structures in each of
its markets. The Registrant intends to continue to develop new structures in
its markets and to consider potential acquisitions in the Midwest and markets
contiguous to existing markets. Management
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believes that its internally generated funds, together with available
borrowings under the Revolving Credit Facility and the Acquisition Credit
Facility, will be sufficient to satisfy its cash requirements, including
anticipated capital expenditures, for the foreseeable future.
For the six months ended June 30, 1996, $104.0 million was provided by
financing activities due to increased borrowings on the Acquisition Credit
Facility and the sale of capital stock, as compared to the 1995 period, when
$2.1 million was provided by financing activities as a result of borrowings
on the Revolving Credit Facility.
PART II
OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS
By unanimous written consent of the Sole Shareholder, dated April 5,
1996, Universal Outdoor Holdings, Inc., the sole shareholder of the
Registrant, elected the following persons directors of the Registrant:
Daniel L. Simon, Brian T. Clingen, Michael B. Goldberg and Michael J.
Roche.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Certain of the documents listed below have heretofore been filed
with the Securities and Exchange Commission by the Registrant (Commission
File No. 33-72810), and each such document is incorporated herein by
reference as indicated below:
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NUMBER DESCRIPTION
2.1 Amendment No. 1 to NOA Stock Purchase Agreement
(incorporated by reference to Exhibit 2.2 of the
Registrant's Form 8-K (Commission File No. 33-72810)
(the "Registrant Statement"))
3.1 Third Restated Articles of Incorporation of the
Registrant
3.2 Second Amended and Restated By-Laws of the Registrant
10.1 Revolving Credit Agreement of the Registrant
(incorporated by reference to Exhibit 10.1 of the
Registrant Statement)
10.2 Acquisition Credit Agreement of the Registrant
(incorporated by reference to Exhibit 10.2 of the
Registrant Statement)
27 Financial Data Schedule
(b) REPORTS ON FORM 8-K - The Registrant filed a Current Report on
Form 8-K dated April 5, 1996 during the quarter ended June 30, 1996. Such
Current Report contained the financial statements of NOA Holding Company
and reported the acquisition of such company by the Registrant.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Universal Outdoor, Inc.
(Registrant)
/s/ Brian T. Clingen
August 13, 1996 _______________________________________
Brian T. Clingen
Vice President and Chief Financial Officer
11
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INDEX TO EXHIBITS
NUMBER DESCRIPTION PAGE
------ ----------- ----
2.1 Amendment No.1 to NOA Stock Purchase Agreement
(incorporated by reference to Exhibit 2.2 of the
Registrant's Form 8-K (Commission File No. 33-72810)
(the "Registrant Statement"))
3.1 Third Restated Articles of Incorporation of the
Registrant
3.2 Second Amended and Restated By-Laws of the Registrant
10.1 Revolving Credit Agreement of the Registrant
(incorporated by reference to Exhibit 10.1 of
the Registrant Statement)
10.2 Acquisition Credit Agreement of the Registrant
(incorporated by reference to
Exhibit 10.2 of the Registrant Statement)
27 Financial Data Schedule
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THIRD RESTATED ARTICLES OF INCORPORATION
ARTICLE ONE The name of the Corporation is UNIVERSAL OUTDOOR, INC.
(the "Corporation") incorporated on June 12, 1975.
ARTICLE TWO The name and address of the registered agent and its
registered office are:
Paul G. Simon
321 North Clark Street
Suite 1010
Chicago, Illinois 60610
Cook County
ARTICLE THREE The purpose or purposes for which the Corporation is
organized are:
To engage in the selling and placing of space for all forms of
billboard, sign and display advertising; to act as agent,
broker, representative, or in any other capacity, for others
in the sale of space for advertising purposes; and to do a
general advertising business in all its branches.
To manufacture, install, supply, maintain, lease and operate
billboard sign boards and all other types of signs; and to
acquire businesses of one or more so engaged.
To manufacture, buy, sell, job, trade in or other wise deal in
goods, wares and merchandise of every kind, nature and
description.
To do all things proper, incidental and conducive to the
attainment of such purposes.
To engage in the transaction of any or all lawful business
for which the Corporations may be incorpo rated under the
Illinois Business Corporation Act.
ARTICLE FOUR The authorized shares shall be:
Par Value Number of Shares
Class Per Share Authorized
------ --------- ----------------
Common $0.01 1,000,000
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ARTICLE FIVE The number of shares issued as of the date hereof, and the
amount of paid-in capital of the Corporation are:
Number of Amount of
Par Value Shares Paid-in
Class Per share Issued Capital
------ --------- --------- -----------
Common $0.01 10,000 $13,203,794
AMENDED
ARTICLE SIX Paragraph 1: The business and affairs of the Corporation shall
be managed by or under the direction of the Board of
Directors except as otherwise required by law. The number
of directors constituting the entire Board of Directors of
the Corporation shall be as set forth in the By-Laws.
Paragraph 2: In all elections for directors, every shareholder
shall have the right to vote the number of shares owned by
such shareholder for as many persons as there are directors
to be elected. Shareholders shall have no right to cumulate
such votes.
Paragraph 3: Subject to paragraph 4 of this ARTICLE SIXTH
or as otherwise required by law, the Board of Directors shall
take action in the manner provided for in the By-Laws of the
Corporation.
Paragraph 4: So long as Kelso Investment Associations V,
L.P. a Delaware limited partnership, Kelso Equity
Partners V, L.P., a Delaware limited partnership, and the
individuals named on the signature page to that certain
Agreement and Plan of Recapitalization dated July 26, 1996
shall beneficially own, in the aggregate, more than 10% of
the outstanding shares of Universal Outdoor Holdings, Inc.,
a Delaware corporation ("HOLDINGS"), the Board of
Directors shall use its best efforts to cause the Board of
Directors of the Corporation to be comprised at all times of
the directors as are the directors of Holdings at such time.
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ARTICLE SEVEN Dividends may be declared and paid upon the Common Stock out
of the assets of the Corporation legally available therefor,
when and as determined by the Board of Directors, in its
discretion.
ARTICLE EIGHT The holders of the Common Stock shall be entitled to receive,
in the event of any liquidation, dissolution or winding up of
the Corporation, all of the assets of the Corporation available
for distribution to shareholders. In such event, each holder
of the Common Stock shall receive such fraction of such assets
as shall be equal the total number of shares of Common Stock
held by such holder divided by the total number of shares of
Common Stock then issued and outstanding.
AMENDED
ARTICLE NINTH Any action by the Board of Directors of the Corporation or by
the Corporation with respect to the appointment, removal or
replacement of each of the chief executive officers of the
Corporation who shall be the Chairman of the Board and the
President, respectively, of the Corporation shall require
the approval of the holders of a majority of the outstanding
shares of Common Stock.
ARTICLE TENTH In furtherance and not in limitation of the powers conferred
by statute, the Board of Directors is expressly authorized to
make, alter or repeal the By-Laws of the Corporation;
PROVIDED, THAT no by-law shall at any time be inconsistent
with any provision of these Articles.
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SECOND AMENDED AND RESTATED
BY-LAWS
OF
UNIVERSAL OUTDOOR, INC.
ARTICLE 1.
OFFICES
The corporation shall continuously maintain in the State of Illinois a
registered office and a registered agent whose office is identical with such
registered office, and may have other offices within or without the state.
ARTICLE 2.
SHAREHOLDERS
SECTION i. ANNUAL MEETING. An annual meeting of the
shareholders shall be held on the second Monday
in January of each year for the purpose of
electing directors and for the transaction of
such other business as may come before the
meeting. In the absence of a determination to
the contrary, the annual meeting shall be held
at the offices of the corporation.
SECTION ii. SPECIAL MEETINGS. Special meetings of the
shareholders may be called either by the chairman
of the board, president, by the board of directors
or by the holders of not less than one-fifth of
all the outstanding shares of the corporation
entitled to vote on the matter for which the
meeting is called, for the purpose or purposes
stated in the call of the meeting. A special
meeting shall be held at such place as may be
determined by resolution
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of the board of directors
or, in the absence of such a determination, at the
offices of the corporation.
SECTION iii. NOTICE OF MEETINGS. Written notice stating the
place, date, and hour of the meeting, and in the
case of a special meeting, the purpose or purposes
for which the meeting is called, shall be
delivered not less than ten nor more than forty
days before the date of the meeting, or in the
case of a merger, consolidation, share exchange,
dissolution or sale, lease or exchange of assets
not less than twenty nor more than forty days
before the date of the meeting, either personally
or by mail, by or at the direction of the chairman
of the board, president, or the secretary, or the
officer or persons calling the meeting, to each
shareholder of record entitled to vote at such
meeting. If mailed, such notice shall be deemed
to be delivered when deposited in the United
States mail, addressed to the shareholder at his
or her address as it appears on the records of the
corporation, with postage thereon prepaid. When a
meeting is adjourned to another time or place,
notice need not be given of the adjourned meeting
if the time and place thereof are announced at the
meeting at which the adjournment is taken.
SECTION iv. FIXING OF RECORD DATE. For the purpose of
determining the shareholders entitled to notice of
or to vote at any meeting of shareholders or any
adjournment thereof, or to express consent to
corporate action in writing without a meeting, or
to receive payment of any dividend, or other
distribution or allotment of any rights, or to
exercise any rights in respect of any change,
conversion or exchange
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of shares or for the
purpose of any other lawful action, the board of
directors of the corporation may fix in advance a
record date which shall not be more than forty
days and, for a meeting of shareholders, not less
than ten days, or in the case of a merger,
consolidation, share exchange, dissolution or
sale, lease or exchange of assets not less than
twenty days, before the date of such meeting. If
no record date is fixed, the record date for the
determination of shareholders entitled to notice
of or to vote at a meeting of shareholders shall
be the date on which notice of the meeting is
mailed, and the record date for the determination
of shareholders for any other purpose shall be the
date on which the board of directors adopts the
resolution relating thereto. A determination of
shareholders of record entitled to notice of or to
vote at a meeting of shareholders shall apply to
any adjournment of the meeting.
SECTION v. VOTING LISTS. The officer or agent having charge
of the transfer books for shares of the
corporation shall make, within ten days after the
record date for a meeting of shareholders or ten
days before such meeting, whichever is earlier, a
complete list of the shareholders entitled to vote
at such meeting, arranged in alphabetical order,
showing the address of and the number of shares
registered in the name of each shareholder, which
list, for a period of ten days prior to such
meeting, shall be kept on file at the registered
office of the corporation and shall be open to
inspection by any shareholder, and to copying at
the shareholder's expense, at any time during
usual business hours. Such list shall also be
produced and kept open at the time and place of
the meeting
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and may be inspected by any
shareholder during the whole time of the
meeting. The original share ledger or transfer
book, or a duplicate thereof kept in the State
of Illinois, shall be prima facie evidence as
to who are the shareholders entitled to examine
such list or share ledger or transfer book or
to vote at any meeting of shareholders.
SECTION vi. QUORUM. The holders of a majority of the
outstanding shares of the corporation entitled to
vote on a matter, present in person or represented
by proxy, shall constitute a quorum at any meeting
of shareholders; provided that if less than a
majority of the outstanding shares are represented
at said meeting, a majority of the shares so
represented may adjourn the meeting at any time
without further notice. If a quorum is present,
the affirmative vote of the majority of the shares
represented at the meeting shall be the act of the
shareholders, unless the vote of a greater number
of voting by classes is required by the Illinois
Business Corporation Act of 1983, as amended, the
articles of incorporation or these by-laws. At
any adjourned meeting at which a quorum shall be
present, any business may be transacted which
might have been transacted at the original
meeting. Withdrawal of shareholders from any
meeting shall not cause failure of a duly
constituted quorum at that meeting.
SECTION vii. PROXIES. A shareholder may appoint a proxy to
vote or otherwise act for him or her by signing an
appointment form and delivering it to the person
so appointed.
No proxy shall be valid after the expiration of 11 months from the
date thereof unless otherwise provided in the proxy.
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Every proxy continues in full force and effect until revoked by the person
executing it prior to the vote pursuant thereto, except as otherwise provided
herein. Such revocation may be effected by a writing delivered to the
corporation stating that the proxy is revoked or by a subsequent proxy
executed by, or by attendance at the meeting and voting in person by, the
person executing the proxy. The dates contained on the forms of proxy
presumptively determine the order of execution, regardless of the postmark
dates on the envelopes in which they are mailed.
An appointment of the proxy is revocable by the shareholder unless the
appointment form conspicuously stated that it is irrevocable and the appointment
is coupled with an interest in the shares or in the corporation generally. An
appointment made irrevocable as provided herein becomes revocable when the
interest in the proxy terminates. A transferee for value of shares subject to
an irrevocable appointment may revoke the appointment if the transferee was
ignorant of its existence when the share were acquired and both the existence of
the appointment and its revocability were not noted conspicuously on the
certificate (or information statement for shares without certificates)
representing the shares.
The death or incapacity of the shareholder appointing a proxy does not
revoke the proxy's authority unless notice of the death or incapacity is
received by the officer or agent who maintains the corporation's share transfer
book before the proxy exercises his or her authority under the appointment.
Unless the appointment of a proxy contains an express limitation on
the proxy's authority, a corporation may accept the proxy's vote or other
action as that of the shareholder making the appointment. If the proxy
appointed fails to vote or otherwise act in accordance with the appointment,
the shareholder is entitled to such legal or equitable relief as is
appropriate in the circumstances.
SECTION viii. VOTING OF SHARES. Except as otherwise provided
in the articles of incorporation or the Illinois
Business Corporation Act of 1983, as amended, each
outstanding voting share, regardless of class,
shall be entitled to one vote upon each matter
submitted to vote at a meeting of shareholders.
SECTION xi. VOTING OF SHARES BY CERTAIN HOLDERS. Shares of
the corporation's
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own shares held by the
corporation in fiduciary capacity may be voted and
shall be counted in determining the total number
of outstanding shares entitled to vote at any
given time.
Shares registered in the name of another corporation, domestic or
foreign, may be voted by any officer agent, proxy or other legal representative
authorized to vote such shares under the law of incorporation of such
corporation. The chairman of the board or president or other person holding the
position of chief executive officer of such other corporation may be treated as
authorized to vote such shares, together with any other person indicated and any
other holder of an office indicated by the corporate shareholder to the
corporation as a person or an officer authorized to vote such shares. Such
persons and offices indicated shall be registered on the transfer books for
shares and included in any voting list prepared in accordance with Section 5 of
this Article.
Shares registered in the name of a deceased person, a minor ward or a
person under legal disability may be voted by his or her administrator,
executor, or court appointed guardian, either in person or by proxy without a
transfer of such shares into the name of such administrator, executor, or court
appointed guardian. Shares registered in the name of a trustee may be voted by
him or her, either in person or by proxy.
Shares registered in the name of a receiver may be voted by such
receiver, and shares held by or under the control of a receiver may be voted by
such receiver without the transfer thereof into his or her name if authority so
to do is contained in an appropriate order of the court by which such receiver
was appointed.
A shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee shall be entitled to vote the shares so transferred.
Any number of shareholders may create a voting trust for the purpose
of conferring upon a trustee or trustees the right to vote or otherwise
represent their share, for a period not to exceed ten years, by entering into a
written voting trust agreement specifying the terms and conditions of the voting
trust, and by transferring their shares to such trustee or trustees for the
purpose of the agreement. Any such trust agreement shall not become effective
until a counterpart of the agreement is deposited with the corporation at its
registered office. The counterpart of the voting trust agreement so deposited
with the corporation shall
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be subject to the same right of examination by a
shareholder of the corporation, in person or by agent or attorney, as is the
record of the shareholders of the corporation, and shall be subject to
examination by any holder of a beneficial interest in the voting trust, either
in person or by agent or attorney, at any reasonable time for any proper
purpose.
SECTION x. INSPECTORS. At any meeting of shareholders, the
presiding officer may, or upon the request of any
shareholder shall, appoint one or more persons as
inspectors for such meeting.
Such inspectors shall ascertain and report the number of shares
represented at the meeting, based upon their determination of the validity and
effect of proxies; count all votes and report the results; and do such other
acts as are proper to conduct the election and voting with impartiality and
fairness to all the shareholders.
Each report of an inspector shall be in writing and signed by him or
her or by a majority of them if there be more than one inspector acting at such
meeting. If there is more than one inspector, the report of a majority shall be
the report of the inspectors. The report of the inspector or inspectors on the
number of shares represented at the meeting and the results of the voting shall
be prima facie evidence thereof.
SECTION xi. INFORMAL ACTION BY SHAREHOLDERS. Any action
required to be taken at any annual or special
meeting of the shareholders of the corporation, or
any other action which may be taken at a meeting
of the shareholders, may be taken without a
meeting and without a vote, if a consent in
writing, setting forth the action so taken, shall
be signed (i) if 5 days prior notice of the
proposed action is given in writing to all of the
shareholders entitled to vote with respect to the
subject matter thereof, by the holders of
outstanding shares having not less then 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 voting or (ii) by all of the
shareholders
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entitled to vote with respect to the subject
matter thereof.
Prompt notice of the taking of the corporate action without a meeting
by less than unanimous written consent shall be given in writing to those
shareholders who have not consented in writing. In the event that the action
which is consented to is such as would have required the filing of a certificate
under any section of the Illinois Business Corporation Act of 1983 if such
action had been voted on by the shareholders at a meeting thereof, the
certificate filed under such section shall state, in lieu of any statement
required by such section concerning any vote of shareholders, that written
consent has been given in accordance with the provisions of Section 7.10 of the
Illinois Business Corporation Act of 1983, as amended, and that written notice
has been given as provided in such Section 7.10.
SECTION xii. VOTING BY BALLOT. Voting on any question or in
any election may be by voice unless the presiding
officer shall order or any shareholder shall
demand that voting be by ballot.
ARTICLE 3.
DIRECTORS
SECTION i. GENERAL POWERS. The business and affairs of
the corporation shall be managed by or under
the direction of its board of directors except
as otherwise required by law.
SECTION ii. NUMBER, TENURE AND QUALIFICATIONS. The number of
directors of the corporation shall be five (5).
Except as provided in Section 13 of this Article,
each director shall hold office until the next
annual meeting of shareholder or until his
successor shall have been elected and qualified.
Directors need not be residents of the State of
Illinois or shareholders of the corporation. The
number of directors may be increased or de creased
from time to time, pursuant to the provisions of
the articles of incorporation, by the amendment of
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this section; but no decrease shall have the
effect of shortening the term of any incumbent
director. So long as Kelso Investment Associates
V, L.P., a Delaware limited partnership ("KIA"),
Kelso Equity Partners V, L.P., a Delaware limited
partnership ("KEP"), and the individuals named on
the signature page to that certain Agreement and
Plan of Recapitalization dated as of July 26, 1996
shall beneficially own, in the aggregate, more
than 10% of the outstanding shares of the
corporation, the directors of the board of
directors of the corporation shall be identical to
the directors on the Board of Directors of
Universal Outdoor Holdings, Inc., a Delaware
corporation.
SECTION iii. REGULAR MEETINGS. A regular meeting of the board
of directors shall be held without other notice
than these by-laws, immediately after the annual
meeting of shareholders. The board of directors
may provide, by resolution, the time and place for
the holding of additional regular meetings without
other notice than such resolution.
SECTION iv. SPECIAL MEETINGS. Special meetings of the board
of directors may be called by or at the request of
the chairman of the board, president or any two
directors. The person or persons authorized to
call special meetings of the board of directors
may fix any place as the place for holding any
special meeting of the board of directors called
by them.
SECTION v. NOTICE. Notice of any special meeting shall be
given at least ten (10) days previous thereto by
written notice to each director at his business
address as it appears in records of the
corporation. If
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mailed, such notice shall be
deemed to be delivered when deposited in the
United States mail so addressed, with postage
thereon prepaid. If notice be given by telegram,
such notice shall be deemed to be delivered when
the telegram is delivered to the telegram company.
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
express 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 regular or
special meeting of the board of directors need be
specified in the notice or waiver of notice of
such meeting.
SECTION vi. QUORUM. At all meetings of the board one-half of
the directors shall constitute a quorum for the
transaction of business. If a quorum is not
present at said meeting, a majority of the
directors present may adjourn the meeting at any
time without further notice. Unless specifically
prohibited by the articles of incorporation or
these by-laws, members of the board of directors
or of any committee of the board of directors may
participate in and act at any meeting of such
board or committee through the use of a conference
telephone or other communications equipment by
means of which all persons participating in the
meeting can hear each other. Participation in
such meeting shall constitute attendance and
presence in person at the meeting of the person or
persons so participating.
SECTION vii. MANNER OF ACTING. The act of the majority of the
directors present at a meeting at which a quorum
is present shall be the act of the
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board of
directors, unless the act of a greater number is
required by statute or these by-laws.
SECTION viii. VACANCIES. Vacancies and newly created
directorships resulting from any increase in the
authorized number of directors may be filled by
the unanimous approval of the directors present at
a meeting at which there is a quorum, and each
director so chosen shall hold office until his
successor is elected and qualified, or until his
earlier resignation or removal. If there are no
directors in office, then an election of directors
may be held in the manner provided by statute.
SECTION ix. ACTION WITH A MEETING. Unless specifically
prohibited by the articles of incorporation or
these by-laws, any action required to be taken at
a meeting of the board of directors, or any other
action which may be taken at a meeting of the
board of directors, or of any committee thereof
may be taken without a meeting if a consent in
writing, setting forth the action so taken, shall
be signed by all the directors entitled to vote
with respect to the subject matter thereof, or by
all the members of such committee, as the case may
be. Any such consent signed by all directors or
all the members of the committee shall have the
same effect as a unanimous vote, and may be stated
as such in any document filed with the Secretary
of State or with anyone else.
SECTION x. COMPENSATION. The board of directors, by the
affirmative vote of a majority of directors then
in office, and irrespective of any personal
interest of any of its
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members, shall have
authority to establish reasonable compensation of
all directors for services to the corporation as
directors, officers, or otherwise. By resolution
of the board of directors, the directors may be
paid their expenses, if any, of attendance at each
meeting of the board. No such payment previously
mentioned in this section shall preclude any
director from serving the corporation in any other
capacity and receiving compensation therefor.
SECTION xi. PRESUMPTION OF ASSENT. A director of the
corporation who is present at a meeting of the
board of directors at which action on any
corporate matter is taken shall be conclusively
presumed to have assented to the action taken
unless his dissent shall be entered in the minutes
of the meeting or unless he shall file his written
dissent to such action with the person acting as
the secretary of the meeting before the
adjournment thereof or shall forward such dissent
by regis tered mail to the secretary of the
corporation immediately after the adjournment of
the meeting. Such right to dissent shall not
apply to a director who voted in favor of such
action.
SECTION xii. COMMITTEES. A majority of the directors may
create one or more committees and appoint members
of the board of directors to serve on the
committee or committees. Each committee shall
have two or more members, who serve at the
pleasure of the board.
(i) Unless the appointment by the board of
directors requires a greater number, a majority of
any committee shall constitute a quorum and a
majority of a quorum is necessary for committee
action. A
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committee may act by unanimous consent
in writing without a meeting, and subject to the
provisions of the by-laws or action by the board
of directors, the committee by majority vote of
its members shall determine the time and place of
meetings and the notice required therefor.
(ii) To the extent specified by the board of
directors or in the articles of incorporation or
these by-laws, each committee may exercise the
authority of the board of directors under Section
8.05 of the Illinois Business Corporation Act of
1983, as amended; provided, however, a committee
may not:
(a) authorize distributions;
(b) approve or recommend to shareholders any act
required by law to be approved by shareholders;
(c) fill vacancies on the board or on any of its
committees;
(d) elect or remove officers or fix the compensation
of any member of the committee;
(e) adopt, amend or repeal these by-laws;
(f) approve a plan of merger not requiring shareholder
approval;
(g) authorize or approve reacquisition of shares,
except according to a general formula or method
prescribed by the board;
(h) authorize or approve the issuance or sale, or
contract for sale, of shares or determine the
designation and relative rights, preferences, and
limitations of a series of shares, except that the
board may direct a committee to fix the specific terms
of the issuance or sale or
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contract for sale of the
number of shares to be allocated to particular
employees under an employee benefit plan; or
(i) amend, alter, repeal, or take action inconsistent
with any resolution or action of the board of directors
when the resolution or action of the board of directors
provides by its terms that it shall not be amended,
altered or repealed by action of a committee.
Vacancies in the membership of the committee shall be filled by the board of
directors at a regular or special meeting of the board of directors. The
executive committee shall keep regular minute of its proceedings and report the
same to the board when required.
SECTION 13. REMOVAL OF DIRECTORS. Any director may be removed, with
or without cause, (i) by unanimous approval of the directors present at a
meeting at which a quorum is present as set forth in the articles of
incorporation, or (ii) at a meeting of shareholders by the affirmative vote of
the holders of a majority of the outstanding shares then entitled to vote at an
election of directors, except as follows:
(1) No director shall be removed at a meeting of shareholders
unless the notice of such meeting shall state that a purpose of the meeting is
to vote upon the removal of one or more directors named in the notice. Only the
named director or directors may be removed at such meeting.
(2) In the case the corporation provides for cumulative voting,
if less than the entire board is to be removed, no director may be removed at a
meeting of shareholders, with or without cause, if the votes cast against his
or her removal would be sufficient to elect him or her if then cumulatively
voted at an election of the entire board of directors.
(3) If a director is elected by a class or series of shares, he
or she may be removed only by the shareholders of that class or series.
The above provisions shall not preclude the circuit court of the
county in which the corporation's registered office is located from removing a
director of the corporation from office in a proceeding commenced either by the
corporation or by shareholders of the corporation holding at least 10 percent of
the outstanding shares of any class if the court finds (1) the director is
engaged in fraudulent or dishonest conduct or has grossly abused his or her
position to the detriment of the corporation, and (2) removal is in the best
interest of the corporation. If the court removes a
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director, it may bar the director from reelection for a period prescribed by
the court. If such a proceeding is commenced by the shareholders, they shall
make the corporation a party defendant.
ARTICLE IV
OFFICERS
SECTION 1. NUMBER. The officers of the corporation shall be a
chairman of the board, president, a treasurer, a secretary, and such vice
presidents, assistant treasurers, assistant secretaries or other officers as may
be elected by the board of directors. Any two or more offices may be held by
the same person.
SECTION 2. ELECTION AND TERM OF OFFICE. The officers of the
corporation shall be elected annually by the board of directors at the first
meeting of the board of directors held after each annual meeting of
shareholders, PROVIDED, HOWEVER, that any action by the board of directors or by
the corporation with respect to the appointment of the executive officers of the
corporation shall require the approval of the holders of a majority of the
outstanding voting shares of the corporation. If the election of officers shall
not be held at such meeting, such election shall be held as soon thereafter as
conveniently may be. Vacancies may be filled or new offices created and filled
at any meeting of the board of directors, subject to the first sentence of this
section. Each officer shall hold office until his or her successor shall have
been duly elected and shall have qualified or until his or her death or until he
or she shall resign or shall have been removed in the manner hereinafter
provided. Election of an officer shall not of itself create contract rights.
SECTION 3. REMOVAL. Any officer elected or appointed by the board of
directors may be removed by the board of directors whenever in its judgment the
best interests of the corporation would be served thereby, but such removal
shall be without prejudice to the contract rights, if any, of the person so
removed, PROVIDED, HOWEVER, that any action by the board of directors or by the
corporation with respect to the removal or replacement of the executive officers
of the corporation shall require the approval of the holders of a majority of
the outstanding voting shares of the corporation.
SECTION 4. EXECUTIVE OFFICERS. The executive officers of the
Corporation shall be two in number and shall be granted the powers as stated
herein.
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4(a) CHAIRMAN OF THE BOARD. The chairman of the board shall be
one of the principal executive officers of the corporation. Subject
to the direction and control of the board of directors, the chairman
shall have the authority to manage the business of the corporation;
see that the resolutions and directions of the board of directors are
carried into effect in all instances except where such responsibility
is specifically designated to some other officer by the board of
directors; enforce the by-laws of this corporation and discharge all
duties incident to his office which are required by law and such other
duties as may be specifically prescribed from time to time by the
board of directors. He shall cause to be called regular and special
meetings of the shareholders and directors. Except in those instances
in which the authority to execute is expressly delegated to another
officer or agent of the corporation, the chairman of the board may
execute for the corporation certificates for its shares and any
contracts, deeds, mortgages, bonds, or other instruments which the
board of directors has authorized to be executed and he may accomplish
such execution either under or without the seal of the corporation and
either individually or with the secretary, any assistant secretary, or
other officers authorized by the board of directors.
4(b) PRESIDENT. The president shall be one of the principal
executive officers of the corporation. Subject to the direction and
control of the board of directors, the president shall have the
authority to manage the business of the corporation; see that the
resolutions and directions of the board of directors are carried into
effect in all instances except where such responsibility is
specifically designated to some other officer by the board of
directors; enforce the by-laws of this corporation and discharge all
duties incident to his office which are required by law and such other
duties as may be specifically prescribed from time to time by the
board of directors. He shall cause to be called regular and special
meetings of the shareholders and directors. Except in these instances
in which the authority to execute is expressly delegated to another
officer or agent of the corporation, the chairman of the board may
execute for the corporation certificates for its shares and any
contracts, deeds, mortgages, bonds, or other instruments which the
board of directors has authorized to be executed and he may accomplish
such execution either under or without the seal of the corporation and
either individually or with the secretary, any assis-
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tant secretary, or other officers authorized by the board of
directors.
SECTION 5. THE VICE-PRESIDENT(S). The vice-president(s), if any,
shall assist the president in the discharge of his or her duties as the
president may direct and shall perform such other duties as from time to time
may be assigned to him by the president or by the board of directors. In the
absence of the president or in the event of his inability or refusal to act, the
vice-president (or in the event there be more than one vice-president, the vice-
presidents in the order designated by the board of directors, or by the
president if the board of directors has not made such designation, or in the
absence of any designation, then in the order of seniority of tenure as vice-
president) shall perform the duties of the president, and when so acting, shall
have all the powers of and be subject to all the restrictions upon the
president. Except in those instances in which the authority to execute is
expressly delegated to another officer or agent of the corporation or a
different mode of execution is expressly prescribed by the board of directors or
these by-laws, the vice-president (or each of them if there are more than one)
may execute for the corporation certificates for its shares and any contracts,
deeds, mortgages, bonds or other instruments which the board of directors has
authorized to be executed, and he or she may accomplish such execution either
under or without the seal of the corporation and either individually or with the
secretary, any assistant secretary, or any other officer thereunto authorized
by the board of directors, according to the requirements of the form of the
instrument.
SECTION 6. THE TREASURER. The treasurer shall be the principal
accounting and financial officer of the corporation. He or she shall: (a) have
charge of and be responsible for the maintenance of adequate books of account
for the corporation; (b) have charge and custody of all funds and securities of
the corporation, and be responsible therefor and for the receipt and
disbursement thereof; and (c) perform all the duties incident to the office of
treasurer and such other duties as from time to time may be assigned to him or
her by the president or by the board of directors. If required by the board of
directors, the treasurer shall give a bond for the faithful discharge of his or
her duties in such sum and with such surety or sureties as the board of
directors may determine.
SECTION 7. THE SECRETARY. The secretary shall: (a) record the
minutes of the shareholders' and of the board of directors' meetings in one or
more books provided for that purpose; (b) see that all notices are duly given in
accordance with the provisions of these by-laws or as required by law; (c) be
custodian of the corporate records and of the seal of the
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corporation; (d) keep a register of the post-office address of each
shareholder which shall be furnished to the secretary by such shareholder;
(e) sign with the president, or a vice-president, or any other officer
thereunto authorized by the board of directors, certificates for shares of
the corporation, the issue of which shall have been authorized by the board
of directors, and any contracts, deeds, mortgages, bonds, or other
instruments which the board of directors has authorized to be executed,
according to the requirements of the form of the instrument; except when a
different mode of execution is expressly prescribed by the board of directors
or these by-laws; (f) have general charge of the stock transfer books of the
corporation; (g) have authority to certify the by-laws, resolutions of the
shareholders and board of directors and committees thereof, and other
documents of the corporation as true and correct copies thereof, and (h)
perform all duties incident to the office of secretary and such other duties
as from time to time may be assigned to him or her by the president or by the
board of directors.
SECTION 8. ASSISTANT TREASURERS AND ASSISTANT SECRETARIES. The
assistant treasurers and assistant secretaries shall perform such duties as
shall be assigned to them by the treasurer or the secretary, respectively, or by
the president or the board of directors. The assistant secretaries may sign
with the president, or a vice-president, or any other officer thereunto
authorized by the board of directors, certificates for shares of the
corporation, the issue of which shall have been authorized by the board of
directors, and any contracts, deeds, mortgages, bonds, or other instruments
which the board of directors has authorized to be executed, according to the
requirements of the form of the instrument, except when a different mode of
execution is expressly prescribed by the board of directors or these by-laws.
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 9. SALARIES. The salaries of the officers shall be fixed from
time to time by the board of directors and no officer shall be prevented from
receiving such salary by reason of the fact that he is also a director of the
corporation.
ARTICLE V
CONTRACTS, LOANS, CHECKS AND DEPOSITS
SECTION 1. CONTRACTS. The board of directors may authorize any
officer or officers, agent or agents, to enter into any contract or execute and
deliver any instrument in the name of
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and on behalf of the corporation, and such authority may be general or
confined to specific instances.
SECTION 2. LOANS. No loans shall be contracted on behalf of the
corporation and no evidences of indebtedness shall be issued in its name unless
authorized by a resolution of the board of directors. Such authority may be
general or confined to specific instances.
SECTION 3. CHECKS, DRAFTS, ETC. All checks, 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, agent
or agents of the corporation and in such manner as shall from time to time be
determined by resolution of the board of directors.
SECTION 4. 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 VI
CERTIFICATES FOR SHARES AND THEIR TRANSFER
SECTION 1. CERTIFICATES FOR SHARES. The issued shares of the
corporation shall be represented by certificates or shall be uncertified
shares. Certificates representing shares of the corporation shall be signed
by the appropriate corporate officers and may be sealed with the seal, or a
facsimile of the seal, of the corporation, if the corporation uses a seal.
In case the seal of the corporation is changed after the certificate is
sealed with the seal or a facsimile of the seal of the corporation, but
before it is issued, the certificate may be issued by the corporation with
the same effect as if the seal had not been changed. If a certificate is
countersigned by a transfer agent or registrar, other than the corporation
itself or its employee, any other signatures or countersignature on the
certificate may be facsimiles, In case any officer of the corporation, or any
officer or employee of the transfer agent or registrar who has signed or
whose facsimile signature has been placed upon such certificate ceases to be
an officer of the corporation, or an officer or employee of the transfer
agent or registrar before such certificate is issued, the certificate may be
issued by the corporation with the same effect as if the officer of the
corporation, or the officer or employee of the transfer agent or registrar
had not ceased to be such at the date of its issue.
In the event the corporation authorizes more than one class of stock
every certificate representing shares issued by a
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corporation shall set forth upon the face or back of the certificate a full
summary or statement of all of the designations, preferences, qualifications,
limitations, restrictions, and special or relative rights of the shares of
each class authorized to be issued, and, if the corporation is authorized to
issue any preferred or special class in series, the variations in the
relative rights and preferences between the shares of each such series so far
as the same have been fixed and determined and the authority of the board of
directors to fix and determine the relative rights and preferences of
subsequent series. Such statement may be omitted from the certificate if it
shall be set forth upon the face or back of the certificate that such
statement, in full, will be furnished by the corporation to any shareholder
upon request and without charge.
Each certificate representing shares shall also state:
(a) That the corporation is organized under the laws of the State of
Illinois.
(b) The name of the person to whom issued.
(c) The number and class of shares, and the designation of the
series, if any, which such certificate represents.
No certificate shall be issued for any share until such share is fully
paid.
Unless otherwise provided by the articles of incorporation or by-laws,
the board of directors of a corporation may provide by resolution that some or
all of any or all classes and series of its shares shall be uncertificated
shares, provided that such resolution shall not apply to shares represented by a
certificate until such certificate is surrendered to the corporation. Within a
reasonable time after the issuance or transfer of uncertificated shares, the
corporation shall send to the registered owner thereof a written notice
containing the information required to be set forth or stated on certificates
pursuant to Section 6.35 of the Illinois Business Corporation Act of 1983, as
amended. Except as otherwise expressly provided by law, the rights and
obligations of the holders of uncertificated shared and rights and obligations
of the holders of certificates representing shares of the same class and series
shall be identical.
The name and address of each shareholder, the number and class of
shares held and the date on which the certificates for the shares were issued
shall be entered on the books of the corporation. The person in whose name
shares stand on the books
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of the corporation shall be deemed the owner thereof for all purposes as
regards the corporation.
SECTION 2. LOST CERTIFICATES. If a certificate representing shares
has allegedly been lost or destroyed the board of directors may in its
discretion, except as may be required by law, direct that a new certificate be
issued upon such indemnification and other reasonable requirements as it may
impose.
SECTION 3. TRANSFERS OF SHARES. Transfers of shares of the
corporation shall be recorded on the books of the corporation and, except in the
case of a lost or destroyed certificate, on surrender for cancellation of the
certificate for such shares. A certificate presented for transfer must be duly
endorsed and accompanied by proper guaranty of signature and other appropriate
assurances that the endorsement is effective. Transfer of an uncertificated
share shall be made on receipt by the corporation of an instruction from the
registered owner or other appropriate person. The instruction shall be in
writing or a communication in such form as may be agreed upon in writing by the
corporation.
ARTICLE VII
FISCAL YEAR
The fiscal year of the corporation shall be fixed by resolution of the
board of directors.
ARTICLE VIII
DIVIDENDS
The board of directors may from time to time declare, and the
corporation may pay, dividends on its outstanding shares in the manner and upon
the terms and conditions provided by law and its articles of incorporation.
ARTICLE IX
SEAL
The corporate seal shall have inscribed thereon the name of the
corporation and the words "Corporate Seal, Illinois." The seal may be used by
causing it or a facsimile thereof to be impressed or affixed or in any manner
reproduced, provided that the affixing of the corporate seal to an instrument
shall not give the instrument additional force or effect, or change the
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construction thereof, and the use of the corporate seal is not mandatory.
ARTICLE X
WAIVER OF NOTICE
Whenever any notice is required to be given under the provisions of
these by-laws or under the provisions of the articles of incorporation or under
the provisions of the Illinois Business Corporation Act of 1983, as amended, a
waiver thereof in writing, signed by the person or persons entitled to such
notice, whether before or after the time stated therein, shall be deemed
equivalent to the giving of such notice. Attendance at any meeting shall
constitute waiver of notice thereof unless the person at the meeting objects to
the holding of the meeting because proper notice was act given.
ARTICLE XI
AMENDMENTS
Unless the power to make, alter, amend or repeal by-laws is reserved
to the shareholders by the articles of incorporation, the by-laws of the
corporation may be made, altered, amended or repealed by the board of directors.
ARTICLE XII
INDEMNIFICATION OF OFFICERS,
DIRECTORS, EMPLOYEES AND AGENTS
SECTION 1. The corporation shall have power to indemnify any person
who was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of the
corporation) by reason of the fact that such person is or was a director,
officer, employee or agent of the corporation, or who is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by such person in connection with
such action, suit or proceeding if such person acted in good faith and in a
manner such person reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
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proceeding, had no reasonable cause to believe his or her conduct was unlawful.
The termination of any action, suit or proceeding by judgment or settlement,
conviction or upon a plea of nolo contenders or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which such person reasonably believed to be in or not opposed to the best
interest of the corporation, and with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
SECTION 2. The corporation shall have the power to 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 such
person is or was a director, officer, employee or agent of the corporation, or
is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise against expenses (including attorneys' fees) actually and
reasonably incurred by such person in connection with the defense or settlement
of such action or suit if such person acted in good faith and in a manner such
person reasonably believed to be in or not opposed to the best interests of the
corporation and except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable for negligence or misconduct in the performance of his or her duty to the
corporation unless and only to the extent that the 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
shall deem proper.
SECTION 3. To the extent that a director, officer, employee or agent
of a corporation has been successful on the merits or otherwise in defense of
any action, suit or proceeding referred to in Sections 1 and 2, or in defense of
any claim, issue or matter therein, such person shall be indemnified against
expenses (including attorneys' fees) actually and reasonably incurred by such
person in connection therewith.
SECTION 4. Any indemnification under Sections 1 and 2 (unless ordered by a
court) shall be made by the corporation only as authorized in the specific case
upon a determination that indemnification of the director, officer, employee or
agent is proper in the circumstances because such person has met the applicable
standard of conduct set forth in Sections 1 and 2. Such determination shall be
made (a) 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 (b) if
such a
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quorum is not obtainable, or, even if obtainable, a quorum of disinterested
directors so directs, by independent legal counsel in a written opinion, or
(c) by the shareholders.
SECTION 5. The indemnification provided by this article shall not be
deemed exclusive of any other rights to which those indemnified may be entitled
under any contract, agreement, vote of shareholders or disinterested directors
or otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office, and shall continue as to a person
who has ceased to be a director, officer, employee or agent and shall inure to
the benefit of the heirs, executors and administrators of such a person.
SECTION 6. The corporation shall have power to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise against any liability asserted against
him or her and incurred by him or her in any such capacity, or arising out of
his or her status as such, whether or not the corporation would have the power
to indemnify him or her against such liability under the provisions of this
article.
SECTION 7. Expenses incurred in defending a civil or criminal action,
suit or proceeding may be paid by the corporation in advance of the final
disposition of such action, suit or proceeding, as authorized by the board of
directors in the specific case, upon receipt of an undertaking by or on behalf
of the director, officer, employee or agent to repay such amount, unless it
shall ultimately be determined that he or she is entitled to be indemnified by
the corporation as authorized in this Section.
SECTION 8. If the corporation pays an indemnity or advances expenses
to a director, officer, employee or agent, the corporation shall report the
indemnification or advance in writing to the shareholders with or before the
notice of the next shareholders meeting.
ARTICLE XIII
AMENDMENT TO BY-LAWS
These By-Laws may only be amended, altered, changed or repealed as
provided in the articles of incorporation of the corporation.
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THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE CONSOLIDATED BALANCE SHEETS AND CONSOLIDATED STATEMENTS OF OPERATIONS
FOUND IN THE COMPANY'S 10-Q FOR THE YEAR TO DATE AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
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