<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT of 1934
For the quarterly period ended September 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT of 1934
For the transition period from______to______
COMMISSION FILE NUMBER: 0-452
TECUMSEH PRODUCTS COMPANY
(Exact name of registrant as specified in its charter)
MICHIGAN 38-1093240
(State of Incorporation) (IRS Employer Identification Number)
100 EAST PATTERSON STREET
TECUMSEH, MICHIGAN 49286
(Address of Principal Executive Offices)
Telephone Number: (517) 423-8411
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 [ ]
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
<TABLE>
<CAPTION>
Class of Stock Outstanding at October 31, 1997
<S> <C>
Class B Common Stock, $1.00 par value 5,470,146
Class A Common Stock, $1.00 par value 16,410,438
</TABLE>
<PAGE> 2
TECUMSEH PRODUCTS COMPANY AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION - ITEM 1
CONSOLIDATED CONDENSED BALANCE SHEETS
(Unaudited and subject to year end adjustments)
<TABLE>
<CAPTION>
(Dollars in millions) September 30, December 31,
1997 1996
======================================================================================================
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 266.1 $ 277.7
Accounts receivable, trade, less allowance for doubtful
accounts of $6.6 million in 1997 and $6.7 million in 1996 247.4 204.5
Inventories 251.9 275.2
Deferred income taxes 36.7 36.6
Other current assets 8.1 10.4
- ----------------------------------------------------------------------------------------------------
TOTAL CURRENT ASSETS 810.2 804.4
PROPERTY, PLANT AND EQUIPMENT, at cost, net of
accumulated depreciation of $460.1 million in 1997
and $448.3 million in 1996 575.0 529.1
EXCESS OF COST OVER ACQUIRED NET ASSETS 58.0 56.0
DEFERRED INCOME TAXES 11.0 13.6
PREPAID PENSION EXPENSE 55.5 46.7
OTHER ASSETS 25.0 22.8
- ----------------------------------------------------------------------------------------------------
TOTAL ASSETS $1,534.7 $1,472.6
====================================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable, trade $ 114.4 $ 114.3
Income taxes payable 11.7 0.1
Short-term borrowings 7.4 19.8
Accrued liabilities 127.2 120.5
- ----------------------------------------------------------------------------------------------------
TOTAL CURRENT LIABILITIES 260.7 254.7
LONG-TERM DEBT 23.6 14.4
NON-PENSION POSTRETIREMENT BENEFITS 182.1 178.4
PRODUCT WARRANTY AND SELF-INSURED RISKS 31.4 30.2
ACCRUAL FOR ENVIRONMENTAL MATTERS 32.1 33.0
PENSION LIABILITIES 13.1 14.4
- ----------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 543.0 525.1
- ----------------------------------------------------------------------------------------------------
STOCKHOLDERS' EQUITY:
Class A common stock, $1 par value; authorized 75,000,000
shares; issued and outstanding 16,410,438 shares 16.4 16.4
Class B common stock, $1 par value; authorized 25,000,000
shares; issued and outstanding 5,470,146 shares 5.5 5.5
Capital in excess of par value 29.9 29.9
Retained earnings 949.4 883.8
Foreign currency translation adjustment (9.5) 11.9
- ----------------------------------------------------------------------------------------------------
TOTAL STOCKHOLDERS' EQUITY 991.7 947.5
- ----------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,534.7 $1,472.6
====================================================================================================
</TABLE>
The accompanying notes are an integral part of these statements.
Page 2
<PAGE> 3
TECUMSEH PRODUCTS COMPANY AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION - ITEM 1
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Unaudited and subject to year end adjustments)
<TABLE>
<CAPTION>
(Dollars in millions Three Months Ended Nine Months Ended
except per share amounts) September 30, September 30,
---------------------------------------
1997 1996 1997 1996
=================================================================================
<S> <C> <C> <C> <C>
NET SALES $389.0 $ 408.7 $1,349.2 $1,395.8
COSTS AND EXPENSES
Cost of sales and operating expense 334.4 346.1 1,149.8 1,187.0
Selling and administrative expense 23.4 23.1 75.6 73.4
- ---------------------------------------------------------------------------------
OPERATING INCOME 31.2 39.5 123.8 135.4
OTHER INCOME (EXPENSE)
Interest expense (1.6) (1.3) (4.5) (4.9)
Interest income and other, net 5.7 4.8 15.0 14.5
- ---------------------------------------------------------------------------------
INCOME BEFORE TAXES ON INCOME 35.3 43.0 134.3 145.0
- ---------------------------------------------------------------------------------
Taxes on income 13.4 15.8 49.1 52.9
- ---------------------------------------------------------------------------------
NET INCOME $ 21.9 $ 27.2 $ 85.2 $ 92.1
=================================================================================
NET INCOME PER SHARE $ 1.00 $ 1.24 $ 3.89 $ 4.21
=================================================================================
CASH DIVIDENDS DECLARED
PER SHARE $ 0.30 $ 0.26 $ 0.90 $ 0.78
=================================================================================
</TABLE>
The accompanying notes are an integral part of these statements.
Page 3
<PAGE> 4
TECUMSEH PRODUCTS COMPANY AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION - ITEM 1
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited and subject to year end adjustments)
<TABLE>
<CAPTION>
Nine Months Ended
(Dollars in millions) September 30,
---------------------
1997 1996
===================================================================================
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 85.2 $ 92.1
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization 52.4 48.0
Accounts receivable (44.2) (25.1)
Inventories 20.1 2.9
Payables and accrued expenses 24.9 10.6
Other (2.4) (3.3)
- ----------------------------------------------------------------------------------
CASH PROVIDED BY OPERATIONS 136.0 125.2
- ----------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (72.1) (87.7)
Business acquisition, net of cash acquired (45.2) --
- ----------------------------------------------------------------------------------
CASH USED IN INVESTING ACTIVITIES (117.3) (87.7)
- ----------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends paid (19.7) (17.1)
Decrease in borrowings, net (2.3) (6.1)
- ----------------------------------------------------------------------------------
CASH USED IN FINANCING ACTIVITIES (22.0) (23.2)
- ----------------------------------------------------------------------------------
EFFECT OF EXCHANGE RATE CHANGES ON CASH (8.3) (2.7)
- ----------------------------------------------------------------------------------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (11.6) 11.6
CASH AND CASH EQUIVALENTS:
BEGINNING OF PERIOD 277.7 261.6
- ----------------------------------------------------------------------------------
END OF PERIOD $ 266.1 $ 273.2
==================================================================================
</TABLE>
The accompanying notes are an integral part of these statements.
Page 4
<PAGE> 5
TECUMSEH PRODUCTS COMPANY AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION - ITEM 1
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1. The condensed consolidated financial statements are unaudited and reflect
all adjustments (consisting only of normal recurring adjustments) which
are, in the opinion of management, necessary for a fair presentation of
the financial position and operating results for the interim periods. The
December 31, 1996 condensed balance sheet data was derived from audited
financial statements, but does not include all disclosures required by
generally accepted accounting principles. The condensed consolidated
financial statements should be read in conjunction with the consolidated
financial statements and notes thereto contained in the Company's Annual
Report for the fiscal year ended December 31, 1996. Due to the seasonal
nature of the Company's business, the results of operations for the
interim period are not necessarily indicative of the results for the
entire fiscal year.
The financial data required in this Form 10-Q by Rule 10.01 of Regulation
S-X have been reviewed by Ciulla, Smith & Dale, LLP, the Company's
independent certified public accountants, as described in their report
contained elsewhere herein.
2. Inventories consisted of:
(Dollars in Millions) SEPTEMBER 30, December 31,
1997 1996
==================================================================
Raw material and work in process $ 151.0 $ 155.1
Finished goods 81.8 101.4
Supplies 19.1 18.7
------------------------------------------------------------------
$ 251.9 $ 275.2
==================================================================
3. Effective July 1, 1997, the Brazilian economy is no longer considered
highly inflationary for financial statement reporting purposes.
Accordingly, the assets and liabilities of the Company's Brazilian
subsidiary are translated into U.S. dollars at current exchange rates and
revenues and expenses are translated at average monthly exchange rates.
The resulting translation adjustments are recorded in a separate component
of stockholders' equity. Prior to July 1, 1997, inventory, plant and
equipment and related income statement items were translated at historical
exchange rates while other assets and liabilities were translated at
current exchange rates. The resulting translation gain (loss) was
included in net earnings and was $2.5 million, $4.8 million and $(1.1)
million in 1996, 1995 and 1994, respectively.
4. The Company has been named by the EPA as a potentially responsible party
in connection with the Sheboygan River and Harbor Superfund Site in
Wisconsin. At September 30, 1997 the Company had an accrual of $29.6
million ($30.1 million at December 31, 1996) for estimated costs
associated with the cleanup of certain polychlorinated biphenyl (PCB)
contamination at this Superfund Site. The Company has based the estimated
cost of cleanup on ongoing engineering studies, including samples taken in
the Sheboygan River, and on assumptions as to the nature, extent and
areas that will have to be remediated.
Page 5
<PAGE> 6
TECUMSEH PRODUCTS COMPANY AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION - ITEM 1
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS, CONTINUED
Significant assumptions underlying the estimated costs are that
remediation will involve innovative technologies, including (but not
limited to) bioremediation near the Company's plant site and along the
upper river, and only natural armoring and bioremediation in the lower
river and harbor. The EPA has indicated it expects to issue a record of
decision on the cleanup of the Sheboygan River and Harbor Site in the
Spring of 1998, but the ultimate resolution of the matter may take much
longer. The ultimate costs to the Company will be dependent upon factors
beyond its control. These factors include the scope and methodology of
the remedial action requirements to be established by the EPA (in
consultation with the Wisconsin Department of Natural Resources (WDNR)),
rapidly changing technology, and the outcome of any related litigation.
The Company, in cooperation with the WDNR, is conducting an investigation
of soil and groundwater contamination at the Company's Grafton, Wisconsin
plant. Certain test procedures are underway to assess the extent of
contamination and to develop remedial options for the site. While the
Company has provided for estimated investigation and on-site remediation
costs, the extent and timing of future off-site remediation requirements,
if any, are not presently determinable.
The WDNR has requested that the Company and other interested parties join
it in a cooperative effort to clean up PCB contamination in the watershed
of the south branch of the Manitowoc River, downstream of the Company's
New Holstein, Wisconsin facility. The Company has cooperated to date with
the WDNR in investigating the scope and range of the contamination. The
WDNR has not identified the parties it believes are responsible for such
contamination. The Company has provided for preliminary investigation
expenses. Although participation in a cooperative remediation effort is
under consideration, it is not possible at this time to reasonably
estimate the cost of any such participation.
In addition to the above mentioned sites, the Company is also currently
participating with the EPA and various state agencies at certain other
sites to determine the nature and extent of any remedial action which may
be necessary with regard to such other sites. Based on limited
preliminary data and other information currently available, the Company
has no reason to believe that the level of expenditures for potential
remedial action necessary at these other sites will have a material effect
on its financial position.
5. Various lawsuits and claims, including those involving ordinary routine
litigation incidental to its business, to which the Company is a party,
are pending, or have been asserted, against the Company. Although the
outcome of these matters cannot be predicted with certainty, and some may
be disposed of unfavorably to the Company, management has no reason to
believe that their disposition will have a materially adverse effect on
the consolidated financial position of the Company.
Page 6
<PAGE> 7
November 11, 1997
INDEPENDENT ACCOUNTANTS' REPORT
Tecumseh Products Company
Tecumseh, Michigan
We have reviewed the consolidated condensed balance sheet of Tecumseh
Products Company and Subsidiaries as of September 30, 1997, and the related
consolidated condensed statements of income and cash flows for the three months
and nine months ended September 30, 1997 and 1996. These financial statements
are the responsibility of the Company's management.
We have conducted our review in accordance with standards established by
the American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted
in accordance with generally accepted auditing standards, the objective of
which is the expression of an opinion regarding the financial statements taken
as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the consolidated condensed financial statements referred to
above for them to be in conformity with generally accepted accounting
principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet as of December 31, 1996, and the
related consolidated statements of income, stockholders' equity, and cash flows
for the year then ended (not presented herein); and in our report dated
February 18, 1997, we expressed an unqualified opinion on those consolidated
financial statements. In our opinion, the information set forth in the
accompanying consolidated condensed balance sheet as of December 31, 1996, is
fairly stated in all material respects in relation to the consolidated balance
sheet from which it has been derived.
CIULLA, SMITH & DALE, LLP
Certified Public Accountants
Southfield, Michigan
Page 7
<PAGE> 8
TECUMSEH PRODUCTS COMPANY AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION -- ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
RESULTS OF OPERATIONS
Sales of $389.0 million for the third quarter of 1997 were 5% lower than the
same quarter of 1996. Consolidated earnings of $21.9 million, or $1.00 per
share, were 19% lower than 1996 third quarter earnings of $27.2 million.
Year-to-date sales of $1,349.2 decreased 3% as compared to the first nine
months of 1996, while earnings for the same period decreased 7%. Third quarter
and year-to-date results were unfavorably impacted by substantially lower
profitability in the Company's Brazilian compressor operations.
The following table presents results by business segments:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
(Dollars in millions) September 30, September 30,
------------------ --------------------
1997 1996 1997 1996
==============================================================================
<S> <C> <C> <C> <C>
NET SALES:
Compressor Products $ 231.6 $ 262.1 $ 812.2 $ 893.7
Engine and Power Train Products 134.9 124.2 454.5 424.8
Pump Products 22.5 22.4 82.5 77.3
- ------------------------------------------------------------------------------
TOTAL NET SALES $ 389.0 $ 408.7 $1,349.2 $1,395.8
==============================================================================
OPERATING INCOME:
Compressor Products $ 14.2 $ 25.1 $ 73.3 $ 84.5
Engine and Power Train Products 17.9 14.7 49.0 48.1
Pump Products 2.0 2.5 9.6 10.5
Corporate Expenses (2.9) (2.8) (8.1) (7.7)
- ------------------------------------------------------------------------------
TOTAL OPERATING INCOME 31.2 39.5 123.8 135.4
Interest expense (1.6) (1.3) (4.5) (4.9)
Interest income and other, net 5.7 4.8 15.0 14.5
- ------------------------------------------------------------------------------
INCOME BEFORE TAXES ON INCOME $ 35.3 $ 43.0 $ 134.3 $ 145.0
==============================================================================
</TABLE>
NOTE: Certain amounts previously reported have been reclassified to conform
with the current presentation.
Page 8
<PAGE> 9
TECUMSEH PRODUCTS COMPANY AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION -- ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION, CONTINUED
Compressor Products
Worldwide Compressor Products sales for the third quarter of 1997 were $231.6
million, 12% lower than the third quarter of 1996. An especially weak home
appliance market in Brazil caused sales produced at the Company's Brazilian
operations to drop over 30%. Sales of compressors for air conditioners also
decreased in the North American room and central air conditioning markets due
to continued unseasonably cold weather in key regions of the U.S. These same
factors contributed to the 9% decrease in year-to-date sales.
Substantially lower profitability in Brazil and volume related margin declines
in North America resulted in reduced operating margins for the quarter, 6.1% as
compared to 9.6% in 1996. European operations showed improved profitability on
slightly higher dollar sales volume due to a lower French Franc and ongoing
cost reduction measures. Year-to-date operating margins were 9.0% versus 9.5%
in 1996. Improved margins as a result of cost cutting programs in the first
and second quarter were more than offset by lower third quarter results.
Engine and Power Train Products
Worldwide Engine and Power Train Products sales for the third quarter increased
9% to $134.9 million, as compared to $124.2 million in 1996. The Company
experienced strong demand for both its lawn and garden engines and transmission
products, while snow engine demand was flat. Year-to-date sales increased 7%
to $454.5 million due to strong sales of lawn and garden product by a major
retail customer.
Operating margins for the third quarter of 1997 increased to 13.3% as compared
to 11.8% due to sales volume gains. Nine month operating margins decreased to
10.8% as compared to 11.3% in 1996 as a result of a 16% unit drop in higher
margin snow engine sales along with start-up costs at the new engine production
facility in Georgia.
Pump Products
Pump Products sales for the third quarter were essentially flat with prior
year, $22.5 million in 1997 versus $22.4 million in 1996. Nine months sales
increased 7% to $82.5 million. Year-to-date sales gains were due primarily to
strong demand for water-gardening products.
Pump Products operating margins for the third quarter were 8.9% as compared to
11.2%, while year-to-date margins decreased to 11.6% as compared to 13.6% in
1996. The reduced margins were due to higher marketing costs and depreciation
associated with new facilities, which the Company expects to result in sales
growth and higher pump margins in the future.
Page 9
<PAGE> 10
TECUMSEH PRODUCTS COMPANY AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION -- ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION, CONTINUED
Outlook
The Brazilian appliance industry has suffered a significant downturn and demand
for Brazilian-built appliances and components is expected to remain weak
through the fourth quarter and potentially into 1998. Weather-related softness
in demand for North American air conditioners is likely to continue as well,
and fourth quarter snow engine production is expected to be significantly below
the unusually high levels of 1996. Recent turmoil in Asian and other currency
markets is also expected to negatively impact compressor sales. Given these
conditions, the consolidated earnings for the fourth quarter of 1997 are
expected to be down substantially from the previous year period.
CAPITAL RESOURCES AND LIQUIDITY
Over the last several years there has been an industry trend toward the use of
scroll compressors in the unitary air conditioning market. Tecumseh does not
currently offer a scroll compressor and the Company believes the lack of a
scroll is making it more difficult to compete in the unitary air conditioning
market. Development efforts continue toward obtaining a marketable scroll
compressor after a decision earlier in the year to modify Tecumseh's original
design. Work is proceeding on performance characteristics, reduction of
manufacturing costs to competitive levels and minimization of additional
capital needed for tooling and equipment. There is still much work to be done
on the product and the Company cannot accurately estimate when it will be ready
for market in commercial quantities.
During the third quarter, the Company completed the acquisition of two
compressor manufacturing facilities in India, positioning Tecumseh as the
leading compressor manufacturer in that rapidly growing economy. These
operations contributed modestly to sales during the quarter. The purchase
price of both operations was approximately $45 million, and was accounted for
using the purchase accounting method.
The Company continued to maintain a strong and liquid financial position.
Working capital of $549.5 million at September 30, 1997 was slightly down from
$549.7 million at December 31, 1996, and the ratio of current assets to current
liabilities approximated 3.1. Year-to-date capital spending of $72.1 million
(excluding the Indian acquisitions, as discussed above) included expenditures
for a new electric motor manufacturing facility in Mississippi, expansion of
our TP compressor line in Brazil and additional equipment for a new engine
manufacturing facility in Georgia. Total capital spending for 1997 should
approximate $110-120 million. Working capital requirements and planned capital
expenditures for the remainder of 1997 and 1998 are expected to be financed
through internally available funds. However, the Company may utilize long-term
financing arrangements in connection with various state investment incentives.
Page 10
<PAGE> 11
TECUMSEH PRODUCTS COMPANY AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION -- ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION, CONTINUED
UNCERTAINTIES RELATING TO FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements within the meaning of the
securities laws. In addition, forward-looking statements may be made orally in
the future by or on behalf of the Company.
Forward-looking statements involve risks and uncertainties, including, but not
limited to, changes in business conditions and the economy in general in both
foreign and domestic markets; weather conditions affecting demand for air
conditioners, lawn and garden products and snow throwers; financial market
changes, including interest rates and foreign exchange rates; economic trend
factors such as housing starts; governmental regulations; availability of
materials; actions of competitors; and the Company's ability to profitably
develop, manufacture and sell both new and existing products.
Page 11
<PAGE> 12
TECUMSEH PRODUCTS COMPANY AND SUBSIDIARIES
PART II. OTHER INFORMATION
Item 5. Other Information
On October 22, 1997 the Board of Directors amended the Company's Bylaws to
include advance notice provisions for annual shareholder meetings. These
provisions require advance written notice of shareholder generated Board of
Director nominations or other proposals for shareholder action. The notice
must contain specific information and the notice must be received within
specified time limits. For further information, see the Amended and Restated
Bylaws contained elsewhere herein.
Item 6. Exhibits and Reports on Form 8-K
(a) The exhibits to this report are listed in the Exhibit Index contained
elsewhere herein.
(b) The Company did not file any reports on Form 8-K during the three months
ended September 30, 1997.
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:
TECUMSEH PRODUCTS COMPANY
-------------------------
(Registrant)
Dated: November 13, 1997 /s/ John H. Foss
--------------------------- -----------------------
John H. Foss
Vice President, Treasurer and
Chief Financial Officer
Page 12
<PAGE> 13
EXHIBIT INDEX
Exhibit
Number
- -------
(3) Company's Amended and Restated Bylaws as amended through
October 22, 1997.
27 Financial Data Schedule
Page 13
<PAGE> 1
EXHIBIT 3 As amended through 10/22/97
AMENDED AND RESTATED
BYLAWS OF TECUMSEH PRODUCTS COMPANY
ARTICLE I
MEETINGS
SECTION 1. PLACE OF MEETING. Any or all meetings of the
shareholders, and of the board of directors, of this Corporation may be held
within or without the State of Michigan provided that no meeting shall be held
at a place other than the registered office in Michigan, except pursuant to
Bylaw or resolution adopted by the board of directors.
SECTION 2. ANNUAL MEETING OF SHAREHOLDERS. An annual meeting of
the shareholders shall be held in each calendar year on the fourth Wednesday of
April of such calendar year at 10:30 a.m., local time, or at such other date
and time as shall be determined from time to time by the board of directors,
for the election of directors and for the transaction of such other business as
may come before such annual meeting.
SECTION 3. NOTICE OF ANNUAL MEETING OF SHAREHOLDERS. Except as
otherwise provided in the Michigan Business Corporation Act, as amended from
time to time (the "Act"), at least ten (10) but not more than sixty (60) days
prior to the date fixed by Section 2 of this Article for the holding of the
annual meeting of shareholders, written notice of the time, place, and purposes
of such meeting shall be given either personally or by mail, as hereinafter
provided, to each shareholder entitled to vote at such meeting.
SECTION 4. BUSINESS AT ANNUAL MEETINGS. At an annual meeting of
the shareholders of the Corporation, only such business shall be conducted as
shall have been properly brought before the meeting. To be properly brought
before an annual meeting, business must be (a) specified in the notice of
meeting (or any supplement thereto) given by or at the direction of the Board
of Directors, (b) otherwise brought before the meeting by or at the direction
of the Board of Directors, or (c) otherwise properly brought before the meeting
by a shareholder. For business to be properly brought before an annual meeting
by a shareholder, if such business relates to the election of directors of the
Corporation, the procedures in Article IV, Section 2, of these Bylaws must be
complied with. If such business relates to any other matter, the shareholder
must have given timely notice thereof in writing to the Secretary of the
Corporation. To be timely, a shareholder's notice must be delivered to the
Secretary and received at the principal executive offices of the Corporation
not less than 60 days nor more than 90 days prior to the anniversary date of
the immediately preceding annual meeting of shareholders; provided however that
in the event that the annual meeting is called for a date that is not within 20
days before or after such anniversary date, such notice by the shareholder in
order to be timely must be so received not later than the close of business on
the tenth day following the day on
<PAGE> 2
which such notice of the date of the annual meeting is mailed or public
disclosure of the date of the annual meeting is made, whichever first occurs.
A shareholder's notice to the Secretary shall set forth as to each matter the
shareholder proposes to bring before the annual meeting (a) a brief description
of the business desired to be brought before the annual meeting containing all
material information relating thereto and the reasons for conducting such
business at the annual meeting, (b) the name and address, as they appear on the
Corporation's books, of the shareholder proposing such business, (c) the class
and number of shares of the Corporation which are beneficially owned by the
shareholder, and (d) any material interest of the shareholder in such business.
Notwithstanding anything in the Bylaws to the contrary, no business shall be
conducted at any annual meeting except in accordance with the procedures set
forth in this Section 4. The officer presiding over the meeting shall, if the
facts warrant, determine and declare to the meeting that business was not
properly brought before the meeting in accordance with the provisions of this
Section 4, and if he or she should so determine, the presiding officer shall so
declare to the meeting that any such business not properly brought before the
meeting shall not be transacted.
SECTION 5. SPECIAL MEETINGS OF SHAREHOLDERS. A special meeting
of the shareholders, for any purpose or purposes proper for shareholder action
and specified in the notice of such meeting, may be called at any time by the
Chairman of the Board of Directors or, during the absence or disability of the
Chairman of the Board of Directors or while that office is vacant, by the
President (or, during the absence or disability of both the Chairman of the
Board of Directors and the President or while both such offices are vacant, by
the Vice-Chairman of the Board of Directors) and shall be so called at the
request in writing of a majority of the board of directors or of shareholders
entitled to vote not less than an aggregate of fifty percent (50%) of the
outstanding shares of the Corporation having the right to vote at such special
meeting. Any such request shall state the purpose or purposes of the proposed
meeting. The method by which such meeting may be called is as follows: upon
receipt of a specification in writing setting forth the date and objects of
such proposed special meeting, signed by the Chairman of the Board of Directors
or, during the absence or disability of the Chairman of the Board of Directors
or while that office is vacant, by the President (or, during the absence or
disability of both the Chairman of the Board of Directors and the President or
while both such offices are vacant, by the Vice-Chairman of the Board of
Directors) or of a request by a majority of the board of directors, or by
shareholders as above provided, the Secretary of this Corporation shall
prepare, sign, and mail the notices requisite to such meeting.
SECTION 6. NOTICE AND BUSINESS AT SPECIAL MEETINGS OF
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SHAREHOLDERS. At least ten (10) but not more than sixty (60) days prior to the
date fixed for the holding of any special meeting of shareholders, written
notice of the time, place, and purposes of such meeting shall be given either
personally or by mail, as hereinafter provided, to each shareholder entitled to
vote at such meeting. The business transacted at any such special meeting,
other than procedural matters and matters relating to the conduct of the
meeting, shall be limited to the purpose or purposes set forth in the notice.
The officer presiding at the meeting shall, if the facts warrant, determine and
declare to the meeting that business was not properly brought before the
meeting in accordance with the provisions of this Section 6, and if he or she
should so determine, such presiding officer shall so declare to the meeting
that any business not properly brought before the meeting shall not be
transacted.
SECTION 7. ORGANIZATION MEETING OF BOARD. At the place of
holding the annual meeting of shareholders, and immediately following the same,
the board of directors, as constituted upon final adjournment of such annual
meeting, shall convene for the purpose of election of officers and transacting
any other business properly brought before it, provided, that the organization
meeting in any year may be held at a different time and place than that herein
provided by consent of a majority of the directors of such new board. No
notice of such meeting shall be necessary to the newly elected directors in
order to legally constitute the meeting, provided a quorum shall be present,
unless the meeting is not held at the place of holding and immediately
following the annual meeting of shareholders.
SECTION 8. REGULAR MEETINGS OF BOARD. Regular meetings of the
board of directors shall be held not less frequently than once in each month
other than July and December, and at such time and place as the board of
directors shall from time to time determine. No notice of regular meetings of
the board of directors shall be required.
SECTION 9. SPECIAL MEETING OF BOARD. Special meetings of the
board of directors may be called by the Chairman of the Board of Directors or,
during the absence or disability of the Chairman of the Board of Directors or,
while that office is vacant, by the President (or, during the absence or
disability of both the Chairman of the Board of Directors and the President or
while both such offices are vacant, by the Vice-Chairman of the Board of
Directors) at any time by means of notice of the time and place thereof to each
Director given not less than twenty-four (24) hours before the time such
special meeting is to be held, but action taken at any such meeting shall not
be invalidated for want of notice if such notice shall be waived as hereinafter
provided.
SECTION 10. NOTICES AND MAILING. All notices required to be
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given by any provision of these Bylaws shall state the authority pursuant to
which they are issued (as, "by order of the Chairman of the Board of Directors"
or "by order of the President" or "by order of the Vice-Chairman of the Board
of Directors" or "by request of the board of directors" or "by request of
shareholders," as the case may be) and shall bear the written or printed
signature of the Secretary. Every notice to a shareholder shall be plainly
addressed to the sendee at such shareholder's last address appearing upon the
original or duplicate stock ledger of this Corporation. Every notice to a
director shall be plainly addressed to the sendee at his last address appearing
on the records of this Corporation. Every notice by mail shall be deemed duly
served when the same has been deposited in the United States mail with postage
fully prepaid so addressed to the sendee. Written notice may also be given in
person or by telegram, telecopy, telex, radiogram, cablegram, or mailgram, and
such notice shall be deemed duly given when the recipient receives the notice
personally or when notice, so addressed to the sendee, has been delivered to
the company, or to the equipment, transmitting such notice.
SECTION 11. WAIVER OF NOTICE. Notice of the time, place, and
purpose of any meeting of the shareholders or of the board of directors may be
waived in writing, either before or after such meeting has been held. Any and
all requirements of the laws of the State of Michigan, and of the Articles of
Incorporation, and of the Bylaws with respect to the calling of any meeting of
the shareholders or of the board of directors may be waived in writing, either
before or after such meeting has been held. Neither the business to be
transacted at, nor the purpose of, a regular or special meeting of the board of
directors need be specified in the waiver of notice of the meeting.
SECTION 12. PROCEDURAL MATTERS. At each meeting of the
shareholders, the officer presiding over the meeting shall fix and announce the
date and time of the opening and the closing of the polls for each matter upon
which the shareholders will vote at the meeting and shall determine the order
of business and all other matters of procedure. Except to the extent
inconsistent with any such rules and regulations as adopted by the board of
directors, such presiding officer may establish rules, which need not be in
writing, to maintain order for the conduct of the meeting, including, without
limitation, restricting attendance to bona fide shareholders of record and
their proxies and other persons in attendance at the invitation of the Board or
such presiding officer and making rules governing speeches and debates. The
presiding officer acts in his or her absolute discretion and his or her rulings
are not subject to appeal.
ARTICLE II
QUORUM
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SECTION 1. QUORUM OF SHAREHOLDERS. A majority of the
outstanding shares of this Corporation entitled to vote, present by the record
holders thereof in person or by proxy, shall constitute a quorum at any meeting
of the shareholders.
SECTION 2. QUORUM OF DIRECTORS. A majority of the members of
the board of directors then in office shall constitute a quorum for transaction
of business.
ARTICLE III
VOTING, ELECTIONS AND PROXIES
SECTION 1. WHO IS ENTITLED TO VOTE. Except as the Articles of
Incorporation of this Corporation otherwise provide, each shareholder of this
Corporation shall, at every meeting of the shareholders, be entitled to one
vote in person or by proxy for each share of capital stock of this Corporation
held by such shareholder, subject, however, to the full effect of the
limitations imposed by the fixed record date for determination of shareholders
set forth in Section 2 of this Article.
SECTION 2. RECORD DATE FOR DETERMINATION OF SHAREHOLDERS. For
the purpose of determining shareholders entitled to notice of and to vote at a
meeting of shareholders or an adjournment of a meeting, the board of directors
may fix a record date, which shall not precede the date on which the resolution
fixing the record date is adopted by the board. The date shall not be more
than sixty (60) nor less than ten (10) days before the date of the meeting. If
a record date is not fixed, the record date for determination of shareholders
entitled to notice of or to vote at a meeting of shareholders shall be the
close of business on the day next preceding the day on which notice is given,
or if no notice is given, the day next preceding the day on which the meeting
is held. When a determination of shareholders of record entitled to notice of
or to vote at a meeting of shareholders has been made as provided in this
Section, the determination applies to any adjournment of the meeting, unless
the board of directors fixes a new record date under this Section for the
adjourned meeting. For the purpose of determining shareholders entitled to
receive payment of a share dividend or distribution, or allotment of a right,
or for the purpose of any other action, the board of directors may fix a record
date, which shall not precede the date on which the resolution fixing the
record date is adopted by the board. The date shall not be more than sixty
(60) days before the payment of the share dividend or distribution or allotment
of a right or other action. If a record date is not fixed, the record date
shall be the close of business on the day on which the resolution of the board
of directors relating to the corporate action is adopted.
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SECTION 3. PROXIES. No proxy shall be deemed operative unless
and until signed by the shareholder and filed with the Corporation. In the
absence of limitation to the contrary contained in the proxy, the same shall
extend to all meetings of the shareholders and shall remain in force three
years from its date and no longer.
SECTION 4. VOTE BY SHAREHOLDER CORPORATION. Any other
corporation owning voting shares in this Corporation may vote upon the same by
the President of such shareholder corporation, or by proxy appointed by him or,
in absence of the President and his proxy, by its Treasurer or, in their
absence, by its Secretary. The board of directors of such shareholder
corporation may appoint some other person to vote such shares.
SECTION 5. INSPECTORS OF ELECTION. The board of directors, in
advance of a shareholders' meeting, may appoint one (1) or more inspectors of
election to act at the meeting or any adjournment thereof. If inspectors are
not so appointed, the person presiding at a shareholders' meeting may, and on
request of a shareholder entitled to vote thereat shall, appoint one (1) or
more inspectors. In case a person appointed fails to appear or act, the
vacancy may be filled by appointment made by the board of directors in advance
of the meeting or at the meeting by the person presiding thereat. The
inspectors shall determine the number of shares outstanding and the voting
power of each, the shares represented at the meeting, the existence of a
quorum, the validity and effect of proxies, and shall receive votes or ballots,
hear and determine challenges and questions arising in connection with the
right to vote, count and tabulate votes or ballots, determine the result, and
do such acts as are proper to conduct the election or vote with fairness to all
shareholders. On request of the person presiding at the meeting or a
shareholder entitled to vote thereat, the inspectors shall make and execute a
written report to the person presiding at the meeting of any of the facts found
by them and matters determined by them. The report shall be prima facie
evidence of the facts stated and of the vote as certified by the inspectors.
ARTICLE IV
BOARD OF DIRECTORS
SECTION 1. NUMBER AND TERM OF DIRECTORS. The business and
affairs of the Corporation shall be managed by a board of directors composed of
not less than nine (9) nor more than twelve (12) members. The number of
directors which shall constitute the board of directors at any given time shall
be determined by resolution of the board of directors; provided, however, that
in the absence of an express determination by the board of directors, the
number of directors, until changed by the board, shall be that number of
directors elected at the most recently held annual meeting of
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shareholders and, provided further, that no decrease in the number of directors
constituting the whole board of directors shall shorten the term of any then
incumbent director. At each annual meeting of shareholders, the shareholders
shall elect directors to hold office until the succeeding annual meeting. The
board of directors may thereafter increase the number of directors from time to
time up to a maximum of twelve (12) and may then fill the vacancies resulting
from such increase as provided by Section 3 of this Article IV. A director
shall hold office for the term for which he or she is elected and until his or
her successor is elected and qualified, or until his or her resignation or
removal. Directors need not be shareholders.
SECTION 2. NOMINATIONS. Nominations for election to the
board of directors at a meeting of shareholders may be made by the board of
directors or by a committee thereof, or by any shareholder of the Corporation
entitled to vote for the election of directors at such meeting. Such
nominations, other than those made by or on behalf of the board of directors,
shall be made by notice in writing delivered or mailed by first class United
States mail, postage prepaid, to the Secretary of the Corporation, and received
(1) in the case of an annual meeting, not less than 60 days nor more than 90
days prior to the anniversary date of the immediately preceding annual meeting
of the shareholders; provided, however, that in the event that the annual
meeting is called for a date that is not within 20 days before or after such
anniversary date, such notice by the shareholder 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 is mailed or public
disclosure of the date of the annual meeting is made, whichever first occurs,
or (2) in the case of a special meeting of shareholders called for the purpose
of electing directors, not later than the close of business on the tenth day
following the day on which notice of the date of the special meeting is mailed
or public disclosure of the date of the special meeting is made, whichever
first occurs. Such notice shall set forth (a) as to each proposed nominee (i)
the name, date of birth, business address, and residence address of such
nominee, (ii) the principal occupation or employment of such nominee during the
past five years, (iii) the number of shares of stock of the Corporation which
are beneficially owned by such nominee, and (iv) any other information
concerning such nominee that must be disclosed as to nominees in proxy
solicitations pursuant to Regulation 14A under the Securities Exchange Act of
1934, as amended (including such person's written consent to be named as a
nominee and to serve as a director if elected), and (b) as to the shareholder
giving the notice (i) the name and address of such shareholder, as they appear
on the Corporation's books, (ii) the class or classes and number(s) of shares
of the Corporation which are beneficially owned by such shareholder, (iii) a
description of all arrangement or understandings between such shareholder and
each proposed nominee
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and any other person or persons (including their names) pursuant to which the
nomination(s) are to be made by such shareholder, and (iv) any other
information relating to such shareholder 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. At the
request of the board of directors, any person nominated by the board of
directors for election as a director shall furnish to the Secretary of the
Corporation that information required to be set forth in a shareholder's notice
of nomination which pertains to the nominee. 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 2 of the Bylaws. The officer
presiding over a meeting of shareholders may, if the facts warrant, determine
and declare to the meeting that a nomination was not made in accordance with
the foregoing procedure, and if he or she should so determine, the presiding
officer shall so declare to the meeting and the defective nomination shall be
disregarded.
SECTION 3. VACANCIES. Unless otherwise limited by the articles
of incorporation, if a vacancy, including a vacancy resulting from an increase
in the number of directors, occurs in the board of directors, the vacancy may
be filled as follows:
(a) The shareholders may fill the vacancy at an annual
meeting of shareholders or a special meeting called for such
purpose.
(b) The board may fill the vacancy.
(c) If the directors remaining in office constitute fewer than a
quorum of the board of directors, they may fill the vacancy by
the affirmative vote of a majority of all the directors
remaining in office.
SECTION 4. ACTION BY UNANIMOUS WRITTEN CONSENT. Action required
or permitted to be taken under authorization voted at a meeting of the board of
directors or a committee of the board of directors, may be taken without a
meeting if, before or after the action, all members of the board then in office
or of the committee consent to the action in writing. The written consents
shall be filed with the minutes of the proceedings of the board of directors or
committee. The consent has the same effect as a vote of the board of directors
or committee for all purposes.
SECTION 5. POWER TO ELECT OFFICERS. The board of directors
shall elect a Chairman of the Board of Directors, a President, a Secretary, and
a Treasurer and may elect a Vice-Chairman of the Board of Directors, a
Secretary of the Board of Directors, a Chairman of the Board of Directors
Emeritus, and one or more Vice-
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Presidents, Assistant Secretaries, and Assistant Treasurers. None of said
officers, except the Chairman of the Board of Directors, the President, and the
Vice-Chairman of the Board of Directors, need be a member of the board of
directors, but a Vice-President who is not a director shall not succeed to or
fill the office of Chairman of the Board of Directors or President. Any two of
the aforementioned offices, except those of Chairman of the Board of Directors
and President, of Chairman of the Board of Directors and Vice-Chairman of the
Board of Directors, or of President and Vice-President, may be held by the same
person, but no officer shall execute, acknowledge, or verify any instrument or
document in more than one capacity.
SECTION 6. POWER TO APPOINT OTHER OFFICERS AND AGENTS. The
board of directors shall have power to appoint such other officers and agents
as the board may deem necessary for transaction of the business of the
Corporation.
SECTION 7. REMOVAL OF OFFICERS AND AGENTS. Any officer or agent
may be removed by the board of directors, with or without cause, whenever in
the judgment of the board the business interests of the corporation will be
served thereby.
SECTION 8. POWER TO FILL VACANCIES. The board shall have power
to fill any vacancy in any office occurring from any reason whatsoever.
SECTION 9. DELEGATION OF POWERS. For any reason deemed
sufficient by the board of directors, whether occasioned by absence or
otherwise, the board may delegate all or any of the powers and duties of any
officer to any other officer or director, but no officer or director shall
execute, acknowledge, or verify any instrument or document in more than one
capacity.
SECTION 10. POWER TO APPOINT EXECUTIVE AND OTHER COMMITTEES. The
board of directors shall have power to appoint by resolution an Executive
Committee composed of two or more directors who, to the extent provided in such
resolution and except as otherwise provided in the Act, shall have and may
exercise the authority of the board of directors in the management of the
business of the Corporation between meetings of the board. The board of
directors may also designate one or more other committees, each such committee
to consist of one or more of the directors of the Corporation. Any such other
committee, to the extent provided in the resolution of the board of directors
creating such committee and except as otherwise provided in the Act, may
exercise all the powers and authority of the board of directors in the
management of the business and affairs of the corporation. The board may
designate one or more directors as alternate members of any committee, who may
replace an absent or disqualified member at a meeting of the committee. Any
committee, and each member thereof, shall serve at
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the pleasure of the board of directors.
SECTION 11. POWER TO REQUIRE BONDS. The board of directors may
require any officer or agent to file with the Corporation a satisfactory bond
conditioned for faithful performance of his duties.
SECTION 12. COMPENSATION. The compensation of directors,
officers, and agents may be fixed by the board.
SECTION 13. OATH OF DIRECTORS. Each person who shall be elected
a director of this Corporation shall promptly, after being so elected, and
before assuming his duties as such director for the term for which he has been
so elected, have administered to him, and shall take, in such manner, and at
such time and place as the Chairman of the Board of Directors or the President
shall determine and decide, an oath substantially as follows:
I, _______________________________, being duly elected to the
board of directors of Tecumseh Products Company, do hereby accept such
office and solemnly swear or affirm that I, conscientiously, honestly,
lawfully, and to the best of my ability, will perform the duties and
discharge the responsibilities of a director of this Corporation.
SECTION 14. HONORARY MEMBERS OF THE BOARD OF DIRECTORS. There
shall be such number of Honorary Members of the board of directors as the board
of directors shall from time to time determine and decide. The board of
directors may appoint as an Honorary Member of the board of directors any
person who at the time of his appointment as such is not, but who at any time
prior to his appointment as such has been, a member of the board of directors,
as a reward for and in recognition of distinguished service to the Corporation
as a member of its board of directors. An Honorary Member of the board of
directors shall have the right, but not the obligation, to attend meetings of
the board of directors and shall receive for such attendance such fee or other
compensation as the board of directors shall from time to time fix and
determine. An Honorary Member of the board of directors shall have the right
to participate in any discussions and deliberations at any meeting of the board
of directors in the same manner and to the same extent as if he were a member
of the board of directors but shall have no right to vote on or with respect to
any resolution adopted or to be adopted, any business transacted or to be
transacted, or any action taken or to be taken by the board of directors at any
such meeting. Except as expressly provided herein, an Honorary Member of the
board of directors shall have only such authority, and shall perform only such
duties, in, or in connection with, the management of the property and affairs
of the Corporation and the transaction of its business as the board of
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directors shall from time to time delegate to him with his consent.
SECTION 15. MANDATORY RETIREMENT AGE FOR DIRECTORS. Except as
hereinafter provided, no person shall be eligible for election or re-election
as a member, other than as an Honorary Member, of the board of directors of the
Corporation after he shall have attained the age of 70 years. Each person who
attains the age of 70 years during his term as a member, other than an Honorary
Member, of the board of directors shall retire as a member of the board of
directors of the Corporation not later than at the expiration of any term of
office for which he shall have been elected and which began before, and ended
after, such person shall have attained the age of 70 years. Notwithstanding
the foregoing, any member of the board of directors who has attained the age of
71 years prior to February 24, 1993 shall be eligible for re-election as a
member of the board of directors.
SECTION 16. PARTICIPATION IN MEETING BY TELEPHONE. By oral or
written permission of a majority of the board of directors, a member of the
board of directors or of a committee designated by the board may participate in
a meeting by means of conference telephone or similar communications equipment
through which all persons participating in the meeting can communicate with the
other participants. Participation in a meeting pursuant to this Section
constitutes presence in person at the meeting.
ARTICLE V
OFFICERS
SECTION 1. CHAIRMAN OF THE BOARD OF DIRECTORS. The Chairman of
the Board of Directors shall be selected by, and from among the membership of,
the board of directors. He shall preside at all meetings of the shareholders
and of the board of directors and of any Executive Committee at which he is in
attendance. He shall perform such other duties and functions as shall be
assigned to him from time to time by the board of directors. Except where by
law the signature of the President of this Corporation is required, the
Chairman of the Board of Directors shall possess the same power and authority
as the President to sign all certificates, contracts, instruments, papers, and
documents of every conceivable kind and character whatsoever, in the name of
and on behalf of this Corporation, which may be authorized by the board of
directors. During the absence or disability of the President, the Chairman of
the Board of Directors shall exercise all of the powers and discharge all of
the duties of the President.
SECTION 2. VICE-CHAIRMAN OF THE BOARD OF DIRECTORS. If the
board of directors elects a Vice-Chairman of the Board of Directors, he shall
be selected from the membership of the board of directors. During the absence
or disability of both the Chairman
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of the Board of Directors and the President, or while both such offices are
vacant, he shall preside at all meetings of the shareholders, of the board of
directors, and of any Executive Committee. During the absence or disability of
both the President and the Chairman of the Board of Directors, or while both
such offices are vacant for any reason, the Vice-Chairman of the Board of
Directors shall have and may exercise any and all of the powers and duties of
the President and of the Chairman of the Board of Directors. At all other
times the Vice-Chairman of the Board of Directors shall be responsible to the
Chairman of the Board of Directors and through him (or during the absence or
disability of the Chairman of the Board of Directors or while that office is
vacant for any reason, directly) to the board of directors for the exercise,
performance, and discharge of such powers, duties, and responsibilities as the
Chairman of the Board of Directors or the board of directors shall see fit to
vest in or delegate to him or which are vested in or imposed upon him by the
Bylaws.
SECTION 3. PRESIDENT AND CHIEF EXECUTIVE OFFICER. The President
shall be selected by, and from among the membership of, the board of directors.
He shall be (and may identify himself and execute instruments and other
documents using the title of) the Chief Executive Officer of this Corporation
and shall, in general, supervise and manage the business affairs of this
Corporation, including, but not limited to, any and all duties normally and
customarily incident to the office of the President and Chief Executive Officer
of a corporation and such other duties and functions as shall be assigned to
him from time to time by the board of directors. During the absence or
disability of the Chairman of the Board of Directors, or while such office is
vacant, the President shall perform all duties and functions, and while so
acting shall have all of the powers and authority, of the Chairman of the Board
of Directors. The President shall be ex officio a member of all standing
committees other than any committee having authority to determine or make
recommendations with respect to the salary, bonus, or other incentive
compensation to be paid by the Corporation to any of its officers.
SECTION 4. VICE-PRESIDENTS. The board of directors may
designate one or more Vice-Presidents as Executive Vice-Presidents. Except as
otherwise expressly provided in the Bylaws of this Corporation, or unless the
board of directors shall otherwise provide by resolution duly adopted by it,
such of the Vice-Presidents as shall have been designated Executive
Vice-Presidents and are members of the board of directors in order of their
seniority as members of the board of directors (or if no Vice-President who is
a member of the board of directors shall have been designated an Executive
Vice-President, then such Vice-Presidents as are members of the board of
directors specified by the board of directors) shall perform the duties and
exercise the power of the President, of the Chairman of the Board of Directors,
and of the
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Vice-Chairman of the Board of Directors during the absence or disability of all
of the persons occupying said offices. The Vice-Presidents shall perform such
other duties as may be delegated to them by the board of directors, any
Executive Committee, the Chairman of the Board of Directors, or the President.
SECTION 5. SECRETARY. The Secretary shall attend all meetings
of the shareholders and of any Executive Committee and, during the absence or
disability of the Secretary of the Board of Directors or while such office is
vacant, all meetings of the board of directors, and the Secretary shall
preserve in the books of the Corporation true minutes of the proceedings of the
shareholders and of any Executive Committee and, during the absence or
disability of the Secretary of the Board of Directors or while such office
vacant, the minutes of all meetings of the board of directors. He shall safely
keep in his custody the seal of the Corporation and shall have authority to
affix the same to all instruments where its use is required by statute, bylaw,
or resolution. He shall perform such other duties as may be delegated to him
by the board of directors, any Executive Committee, the Chairman of the Board
of Directors, or the President.
SECTION 6. TREASURER. The Treasurer shall have custody of all
corporate funds and securities and shall keep in books belonging to the
Corporation full and accurate accounts of all receipts and disbursements; he
shall deposit all moneys, securities, and other valuable effects in the name of
the Corporation in such depositories as may be designated for that purpose by
the board of directors. He shall disburse the funds of the Corporation as may
be ordered by the board of directors, taking proper vouchers for such
disbursements, and shall render to the Chairman of the Board of Directors, the
President, and the board of directors whenever requested by them an account of
all his transactions as Treasurer and of the financial condition of the
Corporation. If required by the board of directors, he shall keep in force a
bond, in form, amount, and with a surety or sureties satisfactory to the board
of directors, conditioned for faithful performance of the duties of his office,
and for restoration to the Corporation in case of his death, resignation,
retirement, or removal from office, of all books, papers, vouchers, money, and
property of whatever kind in his possession or under his control belonging to
the Corporation. He shall perform such other duties as may be delegated to him
by the board of directors, any Executive Committee, the Chairman of the Board
of Directors, or the President.
SECTION 7. ASSISTANT SECRETARY AND ASSISTANT TREASURER. The
Assistant Secretary or Assistant Secretaries, in the absence or disability of
the Secretary, shall perform the duties and exercise the powers of the
Secretary. The Assistant Treasurer or Assistant Treasurers, in the absence or
disability of the Treasurer, shall
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perform the duties and exercise the powers of the Treasurer. Any Assistant
Treasurer, if required by the board of directors, shall keep in force a bond as
provided in Section 6 of this Article V.
SECTION 8. SECRETARY OF THE BOARD OF DIRECTORS. The Secretary
of the Board of Directors shall attend all meetings of the board of directors,
and shall preserve in books of the Corporation true minutes of all such
meetings. He shall have authority to affix the seal of the Corporation to all
certificates or other instruments embodying or relating to any resolution
adopted by, or proceedings taken at any meeting of, the board of directors of
the Corporation. He shall perform such other duties as may be delegated to him
by the board of directors.
SECTION 9. CHAIRMAN OF THE BOARD OF DIRECTORS EMERITUS. The
board of directors may designate as Chairman of the Board of Directors Emeritus
any person who at any time prior to such designation has been Chairman of the
Board of Directors, and who at the time of his designation as Chairman of the
Board of Directors Emeritus is a member of the board of directors of the
Corporation, as a reward for and in recognition of distinguished service to
this Corporation as Chairman of the Board of Directors. During the absence or
disability of the Chairman of the Board of Directors, the Vice-Chairman of the
Board of Directors, and the President, or while all such offices are vacant,
the Chairman of the Board of Directors Emeritus shall preside at all meetings
of the shareholders and of the board of directors. Except where by law the
signature of the President of this Corporation is required, the Chairman of the
Board of Directors Emeritus shall possess the same power and authority as the
President to sign all certificates, contracts, instruments, papers, and
documents of every conceivable kind and character whatsoever, in the name of
and on behalf of this Corporation, which may be authorized by the board of
directors. He shall perform such other duties as may be delegated to him by
the board of directors, any Executive Committee, or the President.
SECTION 10. CHIEF FINANCIAL OFFICER. As and whenever it
determines the same to be appropriate, the board of directors may designate the
President, an Executive Vice-President, a Vice-President, or the Treasurer as
the Chief Financial Officer of the Corporation, and any such officer so
designated (while he continues to hold the office held at the time of such
designation and until such designation is revoked or a different officer is so
designated by the board of directors) may identify himself and execute
instruments and other documents using the title of Chief Financial Officer.
ARTICLE VI
STOCK AND TRANSFERS
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<PAGE> 15
SECTION 1. CERTIFICATES FOR SHARES. Every shareholder shall be
entitled to a certificate evidencing the shares of the capital stock of the
Corporation owned by him, signed by the President or a Vice-President, and by
the Secretary, the Treasurer, an Assistant Secretary, or an Assistant
Treasurer, under the seal of the Corporation, certifying the number and class
of shares, evidenced by such certificate, which certificate may, but need not
be, also signed by the Chairman of the Board of Directors, shall be in such
manner and form as shall have been approved by the board of directors, and
shall set forth such terms and provisions as shall from time to time be
required by the laws of the State of Michigan to be set forth in such
certificate; provided, that where any such certificate is signed: (i) by a
transfer agent or an assistant transfer agent or (ii) by a transfer clerk
acting on behalf of this Corporation, and by a registrar, the signature of any
such President, Vice-President, Secretary, Assistant Secretary, Treasurer, or
Assistant Treasurer, or of the Chairman of the Board of Directors, and the seal
of the Corporation, may be a facsimile.
SECTION 2. TRANSFERABLE ONLY ON BOOKS OF CORPORATION. Shares
shall be transferable only on the books of the Corporation by the person named
in the certificate, or by attorney lawfully constituted in writing, and upon
surrender of the certificate therefor. A record shall be made of every such
transfer and issue. Whenever any transfer is made for collateral security and
not absolutely, the fact shall be so expressed in the entry of such transfer.
SECTION 3. REGISTERED STOCKHOLDERS. The Corporation shall have
the right to treat the registered holder of any share as the absolute owner
thereof and shall not be bound to recognize any equitable or other claim to, or
interest in, such share on the part of any other person, whether or not the
Corporation shall have express or other notice thereof, save as may be
otherwise provided by the statutes of Michigan.
SECTION 4. TRANSFER AGENT AND REGISTRAR. The board of directors
may appoint a transfer agent and a registrar of transfers, and may require all
certificates of shares to bear the signature of such transfer agent and of such
registrar of transfers, or as the board may otherwise direct.
SECTION 5. REGULATIONS. The board of directors shall have power
and authority to make all such rules and regulations as the board shall deem
expedient regulating the issue, transfer, and registration of certificates for
shares in this Corporation.
ARTICLE VII
DIVIDENDS AND RESERVES
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<PAGE> 16
SECTION 1. DIVIDENDS. The board of directors shall have the
power and authority to declare dividends or other distributions to security
holders to the full extent permitted by applicable law. Dividends may be paid
in cash or other property of the Corporation, in shares, obligations, or other
securities of the Corporation, or in any other form permitted by applicable
law.
SECTION 2. RESERVES. The board of directors shall have power
and authority to set apart such reserve or reserves, for any proper purpose, as
the board in its discretion shall approve; and the board shall have power and
authority to abolish any reserve created by the board.
ARTICLE VIII
LIST OF SHAREHOLDERS
SECTION 1. LIST OF SHAREHOLDERS ENTITLED TO VOTE. The officer
or agent having charge of the stock transfer books for shares of the
Corporation shall make and certify a complete list of the shareholders entitled
to vote at a shareholders' meeting or any adjournment thereof. The list shall:
(a) Be arranged alphabetically within each class and series, with
the address of, and the number of shares held by, each
shareholder.
(b) Be produced at the time and place of the meeting.
(c) Be subject to inspection by any shareholder during the whole
time of the meeting.
(d) Be prima facie evidence as to who are the shareholders
entitled to examine the list or to vote at the meeting.
ARTICLE IX
GENERAL PROVISIONS
SECTION 1. CHECKS, ETC. All checks, drafts, and orders for
payment of money shall be signed in the name of the Corporation by one or more
of such officers or agents as the board of directors shall from time to time
designate for that purpose or as shall be designated from time to time by any
officer of the Corporation authorized by the board of directors to make such
designations.
SECTION 2. CONTRACTS, CONVEYANCES, ETC. When the execution of
any contract, conveyance, or other instrument has been authorized without
specification of the executing officers, the Chairman of the Board of
Directors, the President, or any Vice-President, and the Secretary or any
Assistant Secretary, may
-16-
<PAGE> 17
execute the same in the name and behalf of this Corporation and may affix the
corporate seal thereto. The board of directors shall have power to designate
the officers and agents who shall have authority to execute any instrument in
behalf of this Corporation.
SECTION 3. VOTING SECURITIES. Unless otherwise directed by the board
of directors, the Chairman of the Board of Directors, or the President, or, in
the case of their absence or inability to act, the Vice-Presidents, in order of
their seniority, shall have full power and authority on behalf of this
Corporation to attend and to act and to vote, or to execute in the name or on
behalf of this Corporation a consent in writing in lieu of a meeting of
shareholders or a proxy authorizing an agent or attorney-in-fact for this
Corporation to attend and vote, at any meetings of security holders of
corporations in which this Corporation may hold securities, and at such
meetings he or his duly authorized agent or attorney-in-fact shall possess and
may exercise any and all rights and powers incident to the ownership of such
securities and which, as the owner thereof, this Corporation might have
possessed and exercised if present. The board of directors by resolution from
time to time may confer like power upon any other person or persons.
ARTICLE X
AMENDMENT
SECTION 1. MANNER OF AMENDMENT. The Bylaws of the Corporation
may be amended, altered, changed, added to, or repealed, in whole or in part,
by the affirmative vote of a majority of the shares of the capital stock of the
Corporation entitled to vote thereat, present in person or proxy at any annual
or special meeting of the shareholders of the Corporation at which a quorum is
present, if notice of the proposed amendment, alteration, change, addition, or
repeal is contained in the notice of such meeting. The Bylaws may also be
amended, altered, changed, added to, or repealed, in whole or in part, by the
affirmative vote of a majority of the board of directors, at any regular
meeting of the board of directors at which a quorum is present, or at any
special meeting of the board of directors at which a quorum is present if
notice of the proposed amendment, alteration, change, addition, or repeal is
contained in the notice of such special meeting, unless and to the extent that
the power to amend or repeal the Bylaws is reserved exclusively to the
shareholders of the Corporation in its Articles of Incorporation. The power
and authority of the board of directors to amend, alter, change, add to, or
repeal the Bylaws shall extend and be exercisable with respect to not only all
or any portion of the Bylaws adopted by the board of directors but also with
respect to all or any portion of the Bylaws adopted by the shareholders,
provided, however, that the shareholders may, if they elect so to do, prescribe
in the Bylaws
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<PAGE> 18
that any or all of the provisions of the Bylaws adopted by the shareholders
shall not be altered or repealed by the board of directors.
ARTICLE XI
CHAPTER 7B OF MICHIGAN BUSINESS
CORPORATION ACT
SECTION 1. CHAPTER 7B NOT APPLICABLE. Chapter 7B of the Act
(entitled "Control Share Acquisitions") does not apply to control share
acquisitions of shares of the Corporation.
-18-
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