U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
X Quarterly report under Section 13 or 15(d) of the Securities Exchange Act
of 1934
For the quarterly period ended September 30, 1997
____ Transition report under Section 13 or 15(d) of the Exchange Act
For the transition period from _____ to _____
Commission file number 33-82246
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INTERVEST BANCSHARES CORPORATION
--------------------------------
(Exact Name of Small Business Issuer as Specified in Its Charter)
Delaware 13-3699013
-------- ----------
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
10 Rockefeller Plaza, Suite 1015
New York, New York 10020-1903
-----------------------------
(Address of Principal Executive Offices)
(212)757-7300
------------------------------------------------
(Issuer's Telephone Number, Including Area Code)
-----------------------------
(Former Name, Former Address and Former Fiscal Year, if Changed
Since Last Report)
Check whether the issuer: (1) filed all reports required to be filed by Section
12, 13 or 15(d) of the Exchange Act during the past 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
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date;
Class A Common stock, par value $1.00 per share 1,350,000
- ----------------------------------------------- -------------------------------
(class) Outstanding at October 31, 1997
Class B Common stock, par value $1.00 per share 300,000
- ----------------------------------------------- -------------------------------
(class) Outstanding at October 31, 1997
- --------------------------------------------------------------------------------
CONFORMED COPY
<PAGE>
INTERVEST BANCSHARES CORPORATION AND SUBSIDIARY
INDEX
Part I. Financial Information
Item 1. Financial Statements Page
Condensed Consolidated Balance Sheets -
September 30, 1997 (unaudited) and December 31, 1996 . . . . . . . . 2
Condensed Consolidated Statements of Earnings -
Three and Nine Months ended September 30, 1997 and 1996 (unaudited). . . . 3
Condensed Consolidated Statement of Stockholders' Equity -
Nine Months ended September 30, 1997 (unaudited) . . . . . . . . . . 4
Condensed Consolidated Statements of Cash Flows -
Nine Months ended September 30, 1997 and 1996 (unaudited). . . . . . 5
Notes to Condensed Consolidated Financial Statements (unaudited). . . . .6-7
Item 2. Management's Discussion and Analysis or Plan of Operation. . . . 8-10
Part II. Other Information
Item 4. Submission of Matters to a Vote of Security Holders. . . . . 11
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . 11
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
1
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<TABLE>
<CAPTION>
INTERVEST BANCSHARES CORPORATION AND SUBSIDIARY
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets
(In thousands)
September 30, December 31,
--------------------------
Assets 1997 1996
(unaudited)
<S> <C> <C>
Cash and due from banks$ 2,209 2,868
Federal funds sold 8,885 3,452
-------- -------
Total cash and cash equivalents 11,094 6,320
Interest-bearing deposits with banks 197 99
Securities held to maturity 43,772 34,507
Loans receivable, net 72,458 59,499
Accrued interest receivable 1,017 842
Premises and equipment, net 4,542 2,940
Restricted securities, Federal Reserve Bank stock, at cost 232 203
Foreclosed real estate -- 185
Deferred income tax asset 495 526
Other assets 158 75
-------- -------
Total $133,965 105,196
======== =======
Liabilities and Stockholders' Equity
Deposits:
Demand deposits 2,163 2,401
Savings deposits 10,465 4,742
NOW deposits 3,914 4,536
Money-market deposits 15,740 7,507
Time deposits 87,505 74,261
-------- -------
Total deposits 119,787 93,447
Other liabilities 3,529 1,676
-------- -------
Total liabilities 123,316 95,123
-------- -------
Minority interest 340 326
-------- -------
Stockholders' Equity:
Class A common stock 1,350 900
Class B common stock 300 200
Additional paid-in capital 7,105 7,655
Retained earnings 1,554 992
-------- -------
Total stockholders' equity 10,309 9,747
-------- -------
Total $133,965 105,196
======== =======
</TABLE>
See Accompanying Notes to Condensed Consolidated Financial Statements.
2
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<TABLE>
<CAPTION>
INTERVEST BANCSHARES CORPORATION AND SUBSIDIARY
Condensed Consolidated Statements of Earnings
(Dollars in thousands, except per share figures)
Three Months Ended Nine Months Ended
September 30, September 30,
1997 1996 1997 1996
(unaudited) (unaudited)
<S> <C> <C> <C> <C>
Interest income:
Loans receivable $ 1,656 1,193 4,659 3,280
Securities held to maturity 616 394 1,850 1,069
Other interest-earning assets 65 50 132 145
--------- --------- --------- ---------
Total interest income 2,337 1,637 6,641 4,494
--------- --------- --------- ---------
Interest expense-
Deposits 1,480 975 4,168 2,603
--------- --------- --------- ---------
Net interest income 857 662 2,473 1,891
Provision for loan losses 82 62 266 190
--------- --------- --------- ---------
Net interest income after
provision for loan losses 775 600 2,207 1,701
--------- --------- --------- ---------
Noninterest income:
Customer service charges 27 24 83 84
Other 1 -- 13 18
--------- --------- --------- ---------
Total noninterest income 28 24 96 102
--------- --------- --------- ---------
Noninterest expenses:
Salaries and employee benefits 221 187 659 538
Occupancy and equipment 119 77 310 256
Advertising and promotion -- 2 42 5
Professional fees 105 34 169 121
Deposit insurance premiums 3 1 8 2
Other 19 73 219 217
--------- --------- --------- ---------
Total noninterest expenses 467 374 1,407 1,139
Earnings before income taxes 336 250 896 664
Income taxes 121 101 334 273
--------- --------- --------- ---------
Net earnings $ 215 149 562 391
========= ========= ========= =========
Earnings per share $ .13 .09 .34 .24
========= ========= ========= =========
Weighted-average number of shares outstanding 1,650,000 1,650,000 1,650,000 1,650,000
========= ========= ========= =========
</TABLE>
See Accompanying Notes to Condensed Consolidated Financial Statements.
3
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<TABLE>
<CAPTION>
INTERVEST BANCSHARES CORPORATION AND SUBSIDIARY
Condensed Consolidated Statement of Stockholders' Equity
For the Nine-Month Period Ended September 30, 1997
(In thousands)
Class A Class B Additional Total
Common Common Paid-In Retained Stockholders'
Stock Stock Capital Earnings Equity
----- ----- ------- -------- ------
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1996 $ 900 200 7,655 992 9,747
Effect of 1.5 for 1 stock split
(unaudited) 450 100 (550) -- --
Net earnings for the nine months
ended September 30, 1997
(unaudited) -- -- -- 562 562
------ --- ----- ----- ------
Balance at September 30, 1997
(unaudited) $1,350 300 7,105 1,554 10,309
====== === ===== ===== ======
</TABLE>
See Accompanying Notes to Condensed Consolidated Financial Statements
4
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<TABLE>
<CAPTION>
INTERVEST BANCSHARES CORPORATION AND SUBSIDIARY
Condensed Consolidated Statements of Cash Flows
(In thousands)
Nine Months Ended
September 30,
-------------
1997 1996
---- ----
(unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 562 391
Adjustments to reconcile net earnings to net cash provided by
operating activities:
Depreciation 179 171
Provision for deferred income taxes 31 125
(Increase) decrease in other assets (83) 12
Increase in other liabilities 654 865
Increase in accrued interest receivable (175) (101)
Net amortization of fees, premiums and discounts 42 184
Write-down on foreclosed real estate 8 --
Net gain on sale of foreclosed real estate (7) --
Provision for loan losses 266 190
------- -------
Net cash provided by operating activities 1,477 1,837
------- -------
Cash flows from investing activities:
Proceeds from sale of foreclosed real estate 184 --
Purchase of securities held to maturity (26,369) (21,443)
Net (increase) decrease in interest-bearing deposits (98) 199
Net purchase of premises and equipment (1,781) (178)
Net increase in loans (13,281) (18,068)
Net purchases of restricted securities (29) --
Maturities of securities held to maturity 17,118 11,750
------- -------
Net cash used in investing activities (24,256) (27,740)
------- -------
Cash flows from financing activities:
Net increase in demand, savings, NOW and money-market deposits 13,096 3,010
Net increase in time deposits 13,244 17,838
Increase in advance payments by borrowers for taxes and insurance 1,213 1,180
------- -------
Net cash provided by financing activities 27,553 22,028
------- -------
Net increase (decrease) in cash and cash equivalents 4,774 (3,875)
Cash and cash equivalents at beginning of period 6,320 8,551
------- -------
Cash and cash equivalents at end of period $ 11,094 4,676
======== =====
Supplemental disclosure of cash flow information: Cash paid during the period
for:
Interest $ 4,130 2,573
======== =====
Income taxes $ 525 32
======== =====
</TABLE>
See Accompanying Notes to Condensed Consolidated Financial Statements.
5
<PAGE>
INTERVEST BANCSHARES CORPORATION AND SUBSIDIARY
Notes to Condensed Consolidated Financial Statements (unaudited)
1. General.
In the opinion of the management of Intervest Bancshares Corporation
(the "Holding Company"), the accompanying condensed consolidated
financial statements contain all adjustments (consisting principally of
normal recurring accruals) necessary to present fairly the financial
position at September 30, 1997, the results of operations for the three
and nine-month periods ended September 30, 1997 and 1996 and the cash
flows for the nine-months ended September 30, 1997 and 1996. The
results of operations for the three and nine months ended September 30,
1997 are not necessarily indic ative of the results to be expected for
the full year.
The Holding Company's condensed consolidated financial statements
include the accounts of its majority-owned subsidiary, Intervest Bank
(the "Bank") (collectively the "Company"). The Holding Company's
primary business activity is the ownership of the Bank. All
intercompany accounts and transactions have been eliminated in
consolidation.
2. Loan Impairment and Credit Losses.
No loans were identified as being impaired during the nine-month period
ended September 30, 1997. The activity in the allowance for loan losses
is as follows (in thousands):
For the Three For the Nine
Months Ended Months Ended
September 30, September 30,
--------- --- --------- ---
1997 1996 1997 1996
---- ---- ---- ----
(In thousands)
Balance, beginning of period $ 999 752 811 593
Provision charged to earnings 82 62 266 190
Recoveries, net of charge-offs 3 1 7 32
------- --- ----- ---
Balance, end of period $ 1,084 815 1,084 815
======= === ===== ===
3. Earnings Per Common Share.
Earnings per common share were computed by dividing the net earnings
for the period by the weighted-average number of shares outstanding.
The effect of the outstanding warrants was not material (see note 5).
4. Regulatory Capital.
The Bank is required to maintain certain minimum regulatory capital
requirements. The following is a summary at September 30, 1997 of the
regulatory capital requirements and the Bank's capital on a percentage
basis:
Ratios of Regulatory
the Bank Requirement
Total capital to risk-weighted assets 11.35% 8.00%
Tier I capital to risk-weighted assets 10.11% 4.00%
Tier I capital to total assets - leverage ratio 7.29% 4.00%
(continued)
6
<PAGE>
INTERVEST BANCSHARES CORPORATION AND SUBSIDIARY
Notes to Condensed Consolidated Financial Statements (unaudited), Continued
5. Common Stock Split.
On September 18, 1997, the Board of Directors of the Holding Company
declared a 1.5 for 1 Class A and Class B common stock split payable on
September 19, 1997 to stockholders of record on September 19, 1997. All
per share amounts have been restated to reflect the effect of these
stock splits.
6. Impact of New Accounting Principle.
On January 1, 1997, the Company adopted Statement of Financial
Accounting Standards No. 125 "Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities" ("SFAS 125") which
provides accounting and reporting standards for tra nsfers and
servicing of financial assets and extinguishments of liabilities. This
Statement also provides consistent standards for distinguishing
transfers of financial assets that are sales from transfers that are
secured borrowings. SFAS 125 is effective for transfers and servicing
of financial assets and extinguishments of liabilities occurring after
December 31, 1996. The adoption of SFAS 125 has no effect on the
Company's financial statements during the nine-month period ended
September 30, 1997.
7. Future Accounting Requirements.
The FASB has issued Statement of Financial Accounting Standards No. 128
("SFAS 128"). This Statement specifies the computation, presentation
and disclosure requirements for earnings per share (EPS) for entities
with publicly-held common stock. SFAS 128 is effe ctive for both
interim and annual periods ending after December 15, 1997 and upon
adoption, all periods will be presented to conform with SFAS 128.
Management believes the effect of adopting this Statement will not have
a material effect on earnings per share.
7
<PAGE>
INTERVEST BANCSHARES CORPORATION AND SUBSIDIARY
Item 2. Management's Discussion and Analysis
or Plan of Operation
Comparison of September 30, 1997 and December 31, 1996
Liquidity and Capital Resources
The Company's primary source of cash during the nine months ended
September 30, 1997 was from the maturity of securities totaling $17.1
million and net deposit inflows of $26.3 million. Cash was used
primarily for net loan originations of $13.3 million and the purchase
of securities totaling $26. 4 million. At September 30, 1997, the
Company had outstanding commitments to originate loans of $6.6 million.
It is expected that these requirements will be funded from the sources
described above. At September 30, 1997, the Bank exceeded its
regulatory liquidity requirements.
The following table shows selected ratios for the periods ended or at
the dates indicated:
<TABLE>
<CAPTION>
Nine Months Nine Months
Ended Year Ended Ended
September 30, December 31, September 30,
1997 1996 1996
---- ---- ----
Average equity as a percentage
<S> <C> <C> <C>
of average assets 8.31% 11.29% 12.03%
Equity to total assets at end of period 7.70% 9.27% 10.39%
Return on average assets (1) .64% .67% .66%
Return on average equity (1) 7.67% 5.91% 5.49%
Noninterest expense to average assets (1) 1.60% 1.85% 1.92%
Nonperforming loans and foreclosed real estate to
total assets at end of period --% .18% .27%
</TABLE>
(1) Annualized for the nine months ended September 30, 1997 and 1996.
8
<PAGE>
INTERVEST BANCSHARES CORPORATION AND SUBSIDIARY
Comparison of the Three-Month Periods Ended September 30, 1997 and 1996
Results of Operations:
General.
Net earnings for the three months ended September 30, 1997 were
$215,000 or $.13 per share compared to net earnings of $149,000 or $.09
per share for the three months ended September 30, 1996. This increase
in the Company's net earnings was primarily due to an increase in net
interest income, partially offset by an increase in noninterest
expenses.
Interest Income and Expense.
Interest income increased by $700,000 from $1,637,000 for the three
months ended September 30, 1996 to $2,337,000 for the three months
ended September 30, 1997. Interest income on loans increased by
$463,000 due to an increase in the average loan portfolio balance for
the three months ended September 30, 1997 to $72.0 million compared to
$52.0 million during the 1996 period as well as a slight increase in
the weighted-average yield from 9.18% in 1996 to 9.20% in 1997.
Interest on securities increased by $222,000 due to an increase in the
average securities portfolio during the three months ended September
30, 1997 to $40.3 million from $25.7 million during 1996 partially
offset by a decrease in the weighted-average yield from 6.17% in 1996
to 6.13% in 1997. Interest on other interest-earning assets increased
by $15,000 due to an increase in the ave rage balance of such assets
from 1996 to 1997.
Interest expense on deposit accounts increased to $1,480,000 for the
three months ended September 30, 1997 from $975,000 for the three
months ended September 30, 1996. Interest expense increased primarily
because of an increase in the average balance of deposits from 1996 to
1997. The average balance of deposits for the three months ended
September 30, 1997 was $107.6 million compared to $71.1 million during
1996.
Provision for Loan Losses.
The provision for loan losses is charged to earnings to bring the total
allowance to a level deemed appropriate by management and is based upon
historical experience, the volume and type of lending conducted by the
Company, industry standards, the amount of nonperfor ming loans,
general economic conditions, particularly as they relate to the
Company's market areas, and other factors related to the collectibility
of the Company's loan portfolio. The provision for the three months
ended September 30, 1997 and 1996 was $82,000 and $62,000,
respectively. Managemen t believes the balance in the allowance for
loan losses of $1,084,000 at September 30, 1997 is adequate.
Noninterest Expenses.
Total noninterest expenses increased by $93,000 to $467,000 for the
three months ended September 30, 1997 from $374,000 for the three
months ended September 30, 1996, primarily due to an increase in
employee compensation and benefits, occupancy and equipment expenses as
w ell as professional fees due to the overall growth of the Company.
Provision for Income Taxes.
The income tax provision for the three months ended September 30, 1997
was $121,000 (an effective rate of 36.0%) compared to $101,000 (an
effective rate of 40.4%) for the comparable 1996 period. In 1996, a
greater portion of the consolidated earnings was generated by the
Holding Company which has a higher state income tax rate.
9
<PAGE>
INTERVEST BANCSHARES CORPORATION AND SUBSIDIARY
Comparison of the Nine-Month Periods Ended September 30, 1997 and 1996
Results of Operations:
General.
Net earnings for the nine months ended September 30, 1997 were $562,000
or $.34 per share compared to net earnings of $391,000 or $.24 per
share for the nine months ended September 30, 1996. This increase in
the Company's net earnings was primarily due to an increase in net
interest income, partially offset by an increase in noninterest
expenses and an increase in the provision for income taxes.
Interest Income and Expense.
Interest income increased by $2,147,000 from $4,494,000 for the nine
months ended September 30, 1996 to $6,641,000 for the nine months ended
September 30, 1997. Interest income on loans increased by $1,379,000
due to an increase in the average loan portfolio balance for the nine
months ended September 30, 1997 to $67.9 million compared to $46.3
million during the 1996 period partially offset by a decrease in the
weighted-average yield from 9.45% in 1996 to 9.15% in 1997. Interest on
securities increased by $781,000 due to an increase in the average
securit ies portfolio during the nine months ended September 30, 1997
to $40.6 million from $23.7 million during 1996 and an increase in the
weighted-average yield from 6.03% in 1996 to 6.08% in 1997. Interest on
other interest-earning assets decreased by $13,000 primarily due to a
decrease in the average balance of these assets from 1996 to 1997.
Interest expense on deposit accounts increased to $4,168,000 for the
nine months ended September 30, 1997 from $2,603,000 for the nine
months ended September 30, 1996. Interest expense increased primarily
because of an increase in the average balance of deposits from 1996 to
1997. The average balance of deposits for the nine months ended
September 30, 1997 was $102.8 million compared to $64.5 million during
1996.
Provision for Loan Losses.
The provision for loan losses is charged to earnings to bring the total
allowance to a level deemed appropriate by management and is based upon
historical experience, the volume and type of lending conducted by the
Company, industry standards, the amount of nonperforming loans,
general economic conditions, particularly as they relate to the
Company's market areas, and other factors related to the collectibility
of the Company's loan portfolio. The provision increased from $190,000
for the nine months ended September 30, 1996 to $266,000 for the nine
months ended September 30, 1997. The increase was deemed appropriate
by management due to the growth in the loan portfolio in 1997.
Noninterest Expense.
Total noninterest expense increased by $268,000 to $1,407,000 for the
nine months ended September 30, 1997 from $1,139,000 for the nine
months ended September 30, 1996, primarily due to an increase in
employee compensation and benefits, occupancy and equipment expenses,
ad vertising and promotion, as well as professional fees and other
miscellaneous expenses due to the overall growth of the Company.
Provision for Income Taxes.
The income tax provision for the nine months ended September 30, 1997
was $334,000 (an effective rate of 37.3%) compared to $273,000 (an
effective rate of 41.1%) for the comparable 1996 period. In 1996, a
greater portion of the consolidated earnings was generated by the
Holding Company which has a higher state income tax rate.
10
<PAGE>
INTERVEST BANCSHARES CORPORATION AND SUBSIDIARY
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
On September 18, 1997, a proposal to amend the Company's Certificate of
Incorporation to increase the number of shares of Class A Common Stock that the
Company is authorized to issue from 4,000,000 shares to 7,500,000 shares, to
increase the number of shares of Cl ass B Common Stock that the Company is
authorized to issue from 400,000 to 700,000 and to increase the number of shares
of Preferred Stock that the Company is authorized to issue from 200,000 to
300,000 was approved by written consent of shareholders owning 2/3rds of the
issued and outstanding shares of Class A Common Stock and all of the issued and
outstanding shares of Class B Common Stock. By such written consent, the same
shareholders also approved the preservation of the 50,000 share threshold
referred to in paragraph 4(c)(ii) of the Company's Certificate of Incorporation
related to class voting for directors and also approved revised by-laws of the
Company.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits (numbered in accordance with Item 601 of Regulation S-B)
3(i). Restated Certificate of Incorporation, incorporated by reference
from Pre-Effective Amendment No.1 to Registration Statement on
Form SB-2 (No.333-33419), filed with the Securities and Exchange
Commission on September 22, 1997.
3(ii). Revised Bylaws
27. Financial Data Schedule (for SEC use only)
(b) No reports on Form 8-K were filed during the period covered by this report.
INTERVEST BANCSHARES CORPORATION
AND SUBSIDIARY
(Registrant)
Date: November 12, 1997 By: /s/ Lowell S. Dansker
----------------------- ----------------------------
Lowell S. Dansker,
President and Treasurer
(Chief Financial Officer)
Date: November 12, 1997 By: /s/ Lawrence G. Bergman
----------------------- ----------------------------
Lawrence G. Bergman,
Vice President and
Secretary
11
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 2,209
<INT-BEARING-DEPOSITS> 197
<FED-FUNDS-SOLD> 8,885
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 43,772
<INVESTMENTS-MARKET> 43,794
<LOANS> 73,542
<ALLOWANCE> 1,084
<TOTAL-ASSETS> 133,965
<DEPOSITS> 119,787
<SHORT-TERM> 0
<LIABILITIES-OTHER> 3,869
<LONG-TERM> 0
0
0
<COMMON> 1,650
<OTHER-SE> 8,659
<TOTAL-LIABILITIES-AND-EQUITY> 133,965
<INTEREST-LOAN> 4,659
<INTEREST-INVEST> 1,850
<INTEREST-OTHER> 132
<INTEREST-TOTAL> 6,641
<INTEREST-DEPOSIT> 4,168
<INTEREST-EXPENSE> 4,168
<INTEREST-INCOME-NET> 2,473
<LOAN-LOSSES> 266
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 1,407
<INCOME-PRETAX> 896
<INCOME-PRE-EXTRAORDINARY> 896
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 562
<EPS-PRIMARY> .34
<EPS-DILUTED> .34
<YIELD-ACTUAL> 7.94
<LOANS-NON> 0
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 811
<CHARGE-OFFS> 0
<RECOVERIES> 7
<ALLOWANCE-CLOSE> 1,084
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 1,084
</TABLE>
BY-LAWS
- OF -
INTERVEST BANCSHARES CORPORATION
<PAGE>
ARTICLE I
---------
MEETINGS OF SHAREHOLDERS
------------------------
SECTION 1. Annual Meeting. An annual meeting of the Shareholders shall be held
for the election of directors at such date, time and place, either within or
without the State of Delaware, as may be designated by resolution of the Board
of Directors from time to time. Any other proper business may be transacted at
the annual meeting.
SECTION 2. Special Meetings. Special Meetings of the Shareholders of the
Corporation may be held at any time in the interval between Annual Meetings.
Special Meetings may be called by the chairman, the president, or the Board of
Directors, or by a Committee of the Board of Directors which has be en duly
designated by the Board of Directors and whose powers and authority include the
power to call such meetings. The request for a Special Meeting shall state the
purpose or purposes of the Meeting and matters proposed to be acted upon
thereat.
SECTION 3. Place of Meetings. Annual and Special Meetings of the Shareholders of
the Corporation shall be held at the principal office of the Corporation or at
such other place within or without the State of Delaware as the Board of
Directors may from time to time determine.
SECTION 4. Notice of Meetings. Written or printed notice of the date, time and
place of all meetings of the Shareholders shall be given personally, or by first
class mail, not less than ten (10) days nor more than sixty (60) days before the
day fixed for the meeting, to each Shareholder entitled to vote at said meeting,
and, unless the meeting is an annual meeting, such notice must also state the
purpose or purposes for which the meeting is called and must indicate that it is
being issued by or at the direction of the person or persons calling the
meeting. Such notice must also be given t o any Shareholder who, by reason of
any action proposed at such meeting, would be entitled to have his stock
appraised, if such action were taken, and such notice must specify the proposed
action and state the fact that if the action is taken, the dissenting
Shareholder shall have appraisal rights. Such notice shall be given to the
Shareholder by leaving the same with him at his residence or usual place of
business or by mailing it, postage prepaid and addressed to him at his address
as it appears on the books of the Corporation, unless he shall have filed with
the Secretary of the Corporat ion a written request that notices intended for
him be mailed to some other address, in which event it shall be mailed to the
address designated in such request. The notices, as provided for in this
Section, are not required to be given to any Shareholder who submits a signed
waiver of notice, in person or by proxy, whether before or after the meeting.
The attendance of any Shareholder at a meeting, in person or by proxy, without
protesting prior to the conclusion of the meeting the lack of notice of such
meeting, shall constitute a waiver of notice by him. No notice of an adjourned
meeti ng of Shareholders need be given, unless the Board of Directors fixes a
new record date for the adjourned meeting.
SECTION 5. Record Dates. For the purposes of determining the Shareholders
entitled to notice of or to vote at a Shareholders' meeting or any adjournment
thereof, the Board of Directors may fix a date of record which shall not be more
than sixty (60) days nor less than ten (10) days before said me eting date. For
2
<PAGE>
the purpose of determining Shareholders entitled to express consent to or
dissent from any proposal without a meeting, or for determining Shareholders
entitled to receive payment of a dividend or the allotment of any rights, or for
any other action, the Board of Directors may fix a date of record which shall
not be more than sixty (60) days prior to such action.
SECTION 6. Quorum. At all meetings of Shareholders, except as otherwise provided
by law, a quorum shall exist if there is present in person or represented by
proxy, Shareholders owning a majority in number of the shares of the Corporation
issued and outstanding and entitled to vote thereat, in or der to constitute a
quorum; but if there be no quorum, the holders of such shares so present or
represented may by majority vote adjourn the meeting from time to time, but not
for a period of over thirty (30) days at any one time, without notice other than
by announcement at the meeting, until a qu orum shall attend. At any such
adjournment of the meeting, which a quorum shall attend, any business may be
transacted which might have been transacted at the meeting as originally called.
When a quorum is once present, it is not broken by the subsequent withdrawal of
any Shareholder.
SECTION 7. Voting. At all meetings of the Shareholders, each Shareholder
entitled to vote thereat may vote in person or by proxy, and shall have one vote
for each share standing in his name on the books of the Corporation as of the
Record Date fixed for the meeting, unless otherwise provided in t he Certificate
of Incorporation or any amendments thereto. Upon demand of the Shareholders
holding a majority in interest of the shares, present in person or by proxy and
entitled to vote, voting shall be by ballot. A plurality of votes cast shall be
sufficient to elect Directors, and a majority of votes cast shall be sufficient
to take any other corporate action, except as otherwise provided by law or these
By-Laws.
SECTION 8. Proxies. Every proxy shall be in writing, subscribed by the
Shareholder or his duly authorized attorney and dated. No proxy which is dated
more than three (3) years before the meeting at which it is offered shall be
accepted, unless such proxy shall, on its face, name a longer period for which
it is to remain in force.
SECTION 9. Conduct of Meetings. Meetings of the Shareholders shall be presided
over by the Chairman of the Board of Directors, if any, or, in his absence, by
the President of the Corporation or, in his absence, by a Vice President, if
any, or, in the absence of all such officers, by a Chairman to be chosen at the
Meeting. The officer presiding shall appoint a secretary.
SECTION 10. Action Without a Meeting. Whenever Shareholders are required or
permitted to take any action by vote, such action may be taken without a
meeting, without prior notice and without a vote, on written consent, setting
forth the action so taken, signed by the holders of outstanding shares 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 action without a meeting
by less than unanimous written consent shall be given to those shareholders who
have not consented in writing.
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SECTION 11. Notice of Business. No business may be transacted at an annual
meeting of stockholders, other than business that is either (a) specified in the
notice of meeting (or any supplement thereto) given by or at the direction of
the Board of Directors (or any duly authorized committee thereo f), (b)
otherwise properly brought before the annual meeting by or at the direction of
the Board of Directors (or any duly authorized committee thereof) or (c)
otherwise properly brought before the annual meeting by any stockholder of the
Corporation (i) who is a stockholder of record on the date o f the giving of the
notice provided for in this Section 11 of this Article I and on the record date
for the determination of stockholders entitled to vote at such annual meeting
and (ii) who complies with the notice procedures set forth in this Section 11.
In addition to any other applicable requirements, for business to be
properly brought before an annual meeting by a stockholder, such stockholder
must have given timely notice thereof in proper written form to the Secretary of
the Corporation.
To be timely, a stockholder's notice to the Secretary must be delivered to
or mailed and received at the principal executive offices of the Corporation not
less than 90 days nor more than 120 days in advance of the date of the
Corporation's proxy statement and notice released to stockholders i n connection
with the immediately preceding annual meeting of stockholders; provided,
however, that in the event that the annual meeting is called for a date that is
not within 30 days before or the date contemplated by that notice, notice by the
stockholder in order to be timely must be so receive d not later than the close
of the business on the tenth day following the day on which such notice of the
date of the annual meeting was mailed or public disclosure of the date of the
annual meeting was made, whichever first occurs.
To be in proper written form, a stockholder's notice to the Secretary must
set forth as to each matter such stockholder proposes to bring before the annual
meeting (i) a brief description of the business proposed to be brought before
the annual meeting and the reasons for conducting such busin ess at the annual
meeting, (ii) the name and record address of such stockholder, (iii) the class
or series and number of shares of capital stock of the Corporation which are
owned beneficially or of record by such stockholder, (iv) a description of all
arrangements or understandings between such st ockholder and any other person or
persons (including their names) in connection with the proposal of such business
by such stockholder and any material interest of such stockholder in such
business and (v) a representation that such stockholder intends to appear in
person or by proxy at the annual meeting to bring such business before the
meeting.
No business shall be conducted at the annual meeting of stockholders except
business brought before the annual meeting in accordance with the procedures set
forth in this Section 11 of this Article I; provided, however, that, once
business has been properly brought before the annual meeting in accordance with
such procedures, nothing in this Section 11 of this Article I shall be deemed to
preclude discussion by any stockholder of any such business. If the Chairman of
an annual meeting determines that business was not properly brought before the
annual meeting in accordance with the fore going procedures, the Chairman shall
declare to the meeting that the business was not properly brought before the
meeting and such business shall not be transacted or discussed.
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ARTICLE II
----------
BOARD OF DIRECTORS
------------------
SECTION 1. Election and Powers. The Board of Directors shall have the management
and control of the affairs and business of the Corporation. The Directors shall
be elected by the Shareholders at each annual meeting of Shareholders and each
Director shall serve until his successor is elected or appointed and qualified,
unless his directorship be theretofore vacated by resignation, death, removal or
otherwise.
SECTION 2. Number. The number of Directors constituting the entire Board of
Directors shall be such number, not less than three (3), as shall be designated
by resolution of the Board of Directors adopted prior to the election of
Directors at the Annual Meeting of Shareholders. In the absence of such
resolution the number of Directors to be elected at such Annual Meeting shall be
the number last fixed by the Board of Directors. Any Board action designating a
change in the number of directors shall require a vote of a majority of the
entire Board. The "entire Board", as used in this Artic le, shall mean the total
number of Directors which the Corporation would have if there were no vacancies.
Notwithstanding the provisions of this Section, where all of the shares are
owned beneficially and of record by less than three Shareholders, the number of
Directors may be less than three, but not less than the number of Shareholders.
SECTION 3. Vacancies. Vacancies in the Board of Directors (including any
resulting from an increase in the number of Directors) created for any reason
may be filled by vote of the Board of Directors. If, however, the number of
Directors then in office is less than a quorum, vacancies may be fill ed by a
vote of a majority of the Directors then in office. A Director elected by the
Board of Directors to fill a vacancy under this Section shall hold office until
the next meeting of shareholders at which the election of directors is in the
regular order of business, and until his successor has been duly elected or
appointed and qualified.
SECTION 4. Nomination of Directors. Only persons who are nominated in accordance
with the following procedures shall be eligible for election as directors of the
Corporation, except as may be otherwise provided in the Certificate of
Incorporation. Nominations of persons for election to the Board of Directors at
any annual meeting of stockholders or at any special meeting of stockholders
called for the purpose of electing directors may be made (a) by or at the
direction of the Board of Directors or Nominating Committee thereof or (b) by
any stockholder of the Corporation (i) who is a stockh older of record on the
date of the giving of the notice provided for in this Section 4 of this Article
II and on the record date for the determination of stockholders entitled to vote
at such meeting and (ii) who complies with the notice procedures set forth in
this Section 4 of this Article II.
In addition to any other applicable requirements, for a nomination to be
made by a stockholder, such stockholder must have given timely notice thereof in
proper written form to the Secretary of the Corporation.
To be timely, a stockholder's notice to the Secretary must be delivered to
or mailed and received at the principal executive offices of the Corporation (a)
in the case of an annual meeting, not less than 90 days nor more than 120 days
in advance of the date of the Corporation's proxy statement and notice released
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to stockholders in connection with the immediately preceding annual meeting of
stockholders; provided, however, that in the event that the annual meeting is
called for a date that is not within 30 days before or the date contemplated by
that notice, notice by the stockholder in order to be timely must be so received
not later than the close of business on the tenth day following the day on which
such notice of the date of the annual meeting was mailed or public disclosure of
the date of the annual meeting was made, whichever first occurs; and (b) in the
case of a special meeting of stockholders called for the purpose of electing
directors, not later than the close of business on the tenth day following the
day on which public disclosure of the date of the special meeting was made.
To be in proper written form, a stockholder's notice to the Secretary must
set forth (a) as to each person whom the stockholder proposes to nominate for
election as a director (i) the name, age, business address and residence address
of the person, (ii) the principal occupation or employment o f the person, (iii)
the class or series and number of shares of capital stock of the Corporation
which are owned beneficially or of record by the person and (iv) any other
information relating to the person that would be required to be disclosed in a
proxy statement or other filings required to be made in connection with
solicitations of proxies for election of directors pursuant to Section 14 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the rules
and regulations promulgated thereunder; and (b) as to the stockholder giving the
notice (i) the name and record ad dress of such stockholder, (ii) the class or
series and number of shares of capital stock of the Corporation which are owned
beneficially or of record by such stockholder, (iii) a description of all
arrangements or understandings between such stockholder and each proposed
nominee and any other pers on or persons (including their names) pursuant to
which the nomination(s) are to be made by such stockholder, (iv) a
representation that such stockholder intends to appear in person or by proxy at
the meeting to nominate the persons named in its notice and (v) any other
information relating to such stockholder that would be required to be disclosed
in a proxy statement or other filings required to be made in connection with
solicitations of proxies for election of directors pursuant to Section 14 of the
Exchange Act and the rules and regulations promulgated thereunder. Such notice
must be ac companied by a written consent of each proposed nominee to being
named as a nominee and to serve as a director if elected.
Subject to Section 3 of this Article II, no person shall be eligible for
election as a director of the Corporation unless nominated in accordance with
the procedures set forth in this Section 4 of this Article II. If the Chairman
of the meeting determines that a nomination was not made in accordance with the
foregoing procedures, the Chairman shall declare to the meeting that the
nomination was defective and such defective nomination shall be disregarded.
SECTION 5. Removal. At any meeting of the Shareholders duly called, any Director
may, by vote of the holders of a majority of the shares of the class who elected
that Director, be removed from office, with or without cause. Any Director may
also be removed, with or without cause, by action of th e Board of Directors.
SECTION 6. Meetings. Regular Meetings of the Board of Directors shall be held at
such times as the Directors may from time to time determine. Special Meetings of
the Board of Directors shall be held at any time, upon call from the Chairman of
the Board, the President, any Vice President, the Secretary, or by any member of
the Board of Directors.
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SECTION 7. Place of Meetings. Regular and Special Meetings of the Board of
Directors shall be held at the principal office of the Corporation or at such
other place, within or without the State of Delaware, as the Board of Directors
may from time to time determine.
SECTION 8. Notice of Meeting. Notice of the place, day and hour of every regular
and special meeting shall be given to each Director by delivering the same to
him personally or sending the same to him by telegraph or leaving the same at
his residence or usual place of business, at least one (1) d ay before the
meeting, or shall be mailed to each Director, postage prepaid and addressed to
him at the last known Post Office address according to the records of the
Corporation, at least three (3) days before the meeting. No notice of any
adjourned meeting of the Board of Directors need to be gi ven other than by
announcement at the meeting, subject to the provisions of Section 10 of this
Article.
SECTION 9. Waiver of Notice. Notice of a meeting need not be given to any
Director who submits a signed written waiver thereof, whether before, during or
after the meeting, nor to any Director who attends the meeting without
protesting, prior thereto or at its commencement, the lack of notice to him.
SECTION 10. Quorum. A majority of the entire Board shall be necessary to
constitute a quorum for the transaction of business at each meeting of the Board
of Directors; but if at any meeting there be less than a quorum present, a
majority of those present may adjourn the meeting from time to time without
notice other than by announcement at the meeting, until a quorum shall attend.
At any such adjournment, at which a quorum shall be present, any business may be
transacted which might have been transacted at the meeting as originally called.
SECTION 11. Action Without a Meeting. Any action required or permitted to be
taken by the Board of Directors or any committee thereof at a duly held meeting
may be taken without a meeting if all members of the Board of Directors or the
committee consent in writing to the adoption of a resolution authorizing the
action. Such resolution and the written consents thereto by the members of the
Board of Directors or committee shall be filed with the minutes of the
proceedings of the Board of Directors or the committee.
SECTION 12. Personal Attendance by Conference Communication Equipment. Any one
or more members of the Board of Directors or any committee thereof may
participate in a meeting of such Board or committee by means of a conference
telephone or similar communications equipment allowing all persons par
ticipating in the meeting to hear each other at the same time. Participation by
such means shall constitute presence in person at the meeting.
SECTION 13. Executive Committee and Other Committees. The Board of Directors
may, in its discretion, by an affirmative vote of a majority of the entire
Board, appoint an Executive Committee, or any other committee, to consist of
three (3) or more Directors as the Board of Directors may from time to time
determine. The Executive Committee shall have, and may exercise between meetings
of the Board of Directors, all the powers of the Board of Directors in the
management of the business and affairs of the Corporation (including the power
to declare dividends and to authorize the issuance of s tock), and other
committees shall have those powers conferred upon them by the Board of
Directors, except that no committee shall have power to take any action not
allowed to such committee by the applicable law of the Corporation's state of
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incorporation, as the same may be amended from time to ti me. As of the date of
adoption of these By-laws, no committee shall have the power:
(a) To amend the Certificate of Incorporation;
(b) To adopt an agreement of merger or consolidation;
(c) To recommend to Shareholders: (i) the sale, lease or exchange of
substantially all of the assets of the Corporation; or (ii) the
dissolution of the Corporation; or
(d) To repeal, amend or adopt by-laws.
In the absence of any member of the Executive Committee or of any other
committee, the members thereof present at any meeting may appoint a member of
the Board of Directors previously designated by the Board of Directors as a
committee alternate to act in place of such absent member. The Board of
Directors shall have the power at any time to change the membership of any
committee, to fill vacancies in it, or dissolve it. The Executive Committee and
any other committee may make rules for the conduct of its business, and may
appoint such committees and assistants as may from time to time be necessary,
unless the Board of Directors shall provide otherwise. A majority of the members
of the Executive Committee and of any other committee shall constitute a quorum.
ARTICLE III
-----------
OFFICERS
--------
SECTION 1. Election of Officers. The Board of Directors (or the Executive
Committee), at any duly held meeting thereof, shall elect a Chairman, a
President, a Secretary and a Treasurer of the Corporation, and may elect one or
more Vice Presidents and any other officers. Each such officer shall s erve at
the pleasure of the Board of Directors or until his successor shall have been
duly elected or appointed and qualifies, or until he shall have resigned, shall
have deceased or shall have been removed in the manner provided in Section 3 of
this Article. Any two offices may be held by the sam e person, except that no
person shall hold the office of President and Secretary concurrently.
Notwithstanding the foregoing, if all of the stock of the Corporation shall ever
be owned by one person, such person may hold all or any combination of offices.
Any vacancies in the above offices shall be filled by the Board.
SECTION 2. Assistant and Subordinate Officers. The Board of Directors (or the
Executive Committee) may elect one or more Assistant Treasurers, one or more
Assistant Secretaries and such other subordinate officers or agents as it may
deem proper from time to time, who shall hold office at the plea sure of the
Board of Directors (or the Executive Committee). The Board of Directors may from
time to time authorize the President to appoint and remove such assistant and
subordinate officers and agents and prescribe the powers and duties thereof.
SECTION 3. Removal. Any officers of the Corporation may be removed with or
without cause by a vote of the majority of the entire Board of Directors of the
Corporation then in office at a meeting called for that purpose (or, except in
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the case of an officer elected by the Board of Directors, by th e Executive
Committee) whenever in its judgment the best interests of the Corporation may be
served thereby.
SECTION 4. Compensation. The Board of Directors shall fix the compensation of
all officers of the Corporation who are elected or appointed by the Board of
Directors. The Board of Directors or the Executive Committee shall fix the
compensation of all other officers of the Corporation, except that the Board of
Directors may authorize the President to fix the compensation of such assistant
and subordinate officers and agents as he is authorized to appoint and remove.
SECTION 5. Chairman of the Board. The Chairman of the Board, if there be one,
shall preside at all meetings of the Board of Directors and shall perform such
other duties as the Board of Directors may direct. There may be more than one
person holding the office of Chairman, in which case they shall act as
Co-Chairmen and shall share the duties of such office.
SECTION 6. President. The President shall be the Chief Executive Officer of the
Corporation and shall, subject to the direction of the Board of Directors (or
the Executive Committee), have the general management of the affairs of the
Corporation. The President shall preside at all meetings of th e Shareholders.
If there be no Chairman of the Board, or in his absence or inability to act, the
President shall perform all duties of the Chairman of the Board, subject,
however, to the control of the Board of Directors (or the Executive Committee).
SECTION 7. Vice Presidents. Any one or more of the Vice Presidents may be
designated by the Board of Directors (or the Executive Committee) as an
Executive Vice President. At the request of the President, or in his absence or
during his disability, the Executive Vice President shall perform the duties and
exercise the functions of the President. If there be no Executive Vice
President, or if there be more than one (1), the Board of Directors (or the
Executive Committee) may determine which one or more of the Vice Presidents
shall perform any of such duties or exercise any of such functio ns; if such
determination is not made by the Board of Directors (or the Executive
Committee), the President may make such determination; otherwise, any of the
Vice Presidents may perform any of such duties or exercise any of such
functions. Each Vice President shall have such other powers and duties as may be
properly designated by the Board of Directors (or the Executive Committee) and
the President.
SECTION 8. Secretary. The Secretary shall keep full minutes of all meetings of
the Shareholders and of the Board of Directors in books provided for that
purpose. He shall see that all notices are duly given in accordance with the
provisions of these By-Laws or as required by law. He shall be th e custodian of
the records and of the Seal or Seals of the Corporation. He shall affix the
Corporate Seal to all documents, the execution of which on behalf of the
Corporation, under the Seal, is duly authorized by the Board of Directors (or
Executive Committee), and when so affixed may attest the same. He shall have
such other powers and duties as may be properly designated by the Board of
Directors (or the Executive Committee) and the President.
SECTION 9. Treasurer. The Treasurer shall keep correct and complete books and
records of account for the Corporation. Subject to the control and supervision
of the Board of Directors (or the Executive Committee) and the President, or
such other officer as the President may designate, the Treasur er shall
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establish and execute programs for the provision of the capital required by the
Corporation, including negotiating the procurement of capital and maintaining
adequate sources for the Corporation's current borrowing from lending
institutions. He shall maintain banking arrangements to recei ve, have custody
of and disburse the Corporation's moneys and securities. He shall invest the
Corporation's funds as required, establish and coordinate policies for
investment in pension and other similar trusts, and provide insurance coverage
as required. He shall direct the granting of credit a nd the collection of
accounts due the Corporation, including the supervision of special arrangements
for financing sales, such as time payments and leasing plans. He shall have such
other powers and duties as may be properly designated by the Board of Directors
(or the Executive Committee) and the President.
ARTICLE IV
----------
SHARE CERTIFICATES
------------------
SECTION 1. Form and Signatures. The interest of each Shareholder of the
Corporation shall be evidenced by certificates for shares in such form not
inconsistent with the law or the Certificate of Incorporation, and any
amendments thereof, as the Board of Directors may from time to time prescribe.
The share certificates shall be signed by the President or a Vice President and
by the Secretary or an Assistant Secretary, and may be sealed with the seal of
the Corporation. Where any share certificate is countersigned by a transfer
agent or registered by a registrar, other than the Corporation itself or its
employee, or if the shares are listed on a registered national security
exchange, the signatures of any such President, Vice President, Secretary, or
Assistant Secretary, may be facsimiles engraved or printed. In case any officer
who has signed or whose facsimile signature has been placed upon such
certificate shall have ceased to be such officer before the share certificate is
issued, such certificate may be issued by the Corporation with the same effect
as if such person had not ceased to be such officer.
SECTION 2. Transfer of Shares. The shares of the Corporation shall be
transferred on the books of the Corporation by the Registered holder thereof, in
person or by his attorney, upon surrender for cancellation of certificates for
the same number of shares, with a proper assignment and powers of t ransfer
endorsed thereon or attached thereto, duly signed by the person appearing by the
certificate to be the owner of the shares represented thereby, with such proof
of the authenticity of the signature as the Corporation, or its agents, may
reasonably require. Such certificate shall have affixe d thereto all stock
transfer stamps required by law. The Board of Directors shall have power and
authority to make all such other rules and regulations as it may deem expedient
concerning the issue, transfer and registration of certificates for shares of
the Corporation.
SECTION 3. Mutilated, Lost, Stolen or Destroyed Certificates. The holder of any
certificates representing shares of the Corporation shall immediately notify the
Corporation of any mutilation, loss, theft or destruction thereof, and the Board
of Directors may, in its discretion, cause one or more new certificates, for the
same number of shares in aggregate, to be issued to such holder upon the
surrender of the mutilated certificate, or, in case of an alleged loss, theft or
destruction of the certificate, upon satisfactory proof of such loss, theft or
destruction and the deposit of indemnity , by way of bond or otherwise, in such
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form and amount and with such sureties as the Board of Directors may require, to
indemnify the Corporation and transfer agent and registrar, if any, against loss
or liability by reason of the issuance of such new certificates; but the Board
of Directors may, in its discretion, refuse to issue such new certificates save
upon the order of some court having jurisdiction in such matters.
SECTION 4. Stock Ledgers. The Stock Ledgers of the Corporation containing the
names and addresses of the Shareholders and the number of shares held by them
respectively shall be maintained at the principal office of the Corporation, or
if there be a transfer agent, at the office of such transfer agent, as the Board
of Directors shall determine.
SECTION 5. Transfer Agents and Registrars. The Corporation may have one or more
transfer agents and one or more registrars of its stock or of any class or
classes of its shares whose respective duties the Board of Directors may from
time to time determine.
ARTICLE V
---------
INDEMNIFICATION
---------------
The Corporation shall indemnify (a) any person made or threatened to be made a
party to any action or proceeding by reason of the fact that he, his testator or
intestate, is or was a director or officer of the Corporation, and (b) any
director or officer of the Corporation who served any other comp any in any
capacity at the request of the Corporation, in the manner and to the maximum
extent permitted by the General Corporation Law of Delaware, as the same now
exists or may hereafter be amended in a manner more favorable to persons
entitled to indemnification; and the Corporation may, in the discretion of the
Board of Directors, indemnify all other corporate personnel to the extent
permitted by law. The right to indemnification conferred herein shall include
the right to be paid by the Corporation the expenses (including attorneys' fees)
incurred in defending any such proceeding in ad vance of its final disposition.
ARTICLE VI
----------
FINANCES
--------
SECTION 1. Dividends. Subject to law and to the provisions of the Certificate of
Incorporation, and any amendments thereof, the Board of Directors may declare
dividends on the stock of the Corporation, payable upon such dates as the Board
of Directors may designate.
SECTION 2. Reserves. Before payment of any dividends, 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 its absolute discretion, deems proper
as a reserve or reserves to meet contingencies, or for e qualizing dividends, or
for repairing or maintaining any property of the Corporation, or for such other
purpose as the Board of Directors shall deem conducive to the interest of the
Corporation, and the Board of Directors may modify or abolish any such reserve
in the manner in which it was created.
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SECTION 3. Bills, Notes, Etc. All checks or demands for money and notes or other
instruments evidencing indebtedness or obligations of the Corporation shall be
made in the name of the Corporation and shall be signed by such officer or
officers or such other person or persons as the Board of Direc tors may from
time to time designate.
ARTICLE VII
-----------
AMENDMENTS
----------
The Board of Directors shall have the power to adopt, amend or repeal the
By-Laws of the Corporation by a majority vote of the entire Board at any
meeting, provided that the Shareholders may make additional By-Laws and may
alter and repeal any By-Laws whether adopted by them or otherwise.
12
