-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UEAWPHorQBkTeMYteW7mbiiaM/IODPaoXj8NBNtSGAtelMRaX2qMTOYSFjwieNYi mto06ou5lFBsrmtpWx9jkQ== 0000895345-02-000437.txt : 20020814 0000895345-02-000437.hdr.sgml : 20020814 20020814112844 ACCESSION NUMBER: 0000895345-02-000437 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20020630 FILED AS OF DATE: 20020814 FILER: COMPANY DATA: COMPANY CONFORMED NAME: METTLER TOLEDO INTERNATIONAL INC/ CENTRAL INDEX KEY: 0001037646 STANDARD INDUSTRIAL CLASSIFICATION: LABORATORY ANALYTICAL INSTRUMENTS [3826] IRS NUMBER: 133668641 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-13595 FILM NUMBER: 02732623 BUSINESS ADDRESS: STREET 1: IM LANGACHER P O BOX MT-100 STREET 2: CH 8606 GREIFENSEE CITY: SWITZERLAND STATE: V8 ZIP: 10022 BUSINESS PHONE: 2126445900 MAIL ADDRESS: STREET 1: IM LANGACHER STREET 2: P O BOX MT 100 CH 8606 GREIFENSEE CITY: SWITZERLAND STATE: V8 ZIP: 10022 FORMER COMPANY: FORMER CONFORMED NAME: MT INVESTORS INC DATE OF NAME CHANGE: 19970411 FORMER COMPANY: FORMER CONFORMED NAME: METTLER TOLEDO INTERNATIONAL INC DATE OF NAME CHANGE: 19971117 10-Q 1 tp10q.txt FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) |X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2002, 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 1-13595 Mettler-Toledo International Inc. -------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 13-3668641 ----------------------------------- ------------------------------------ (State or other jurisdiction of (IRS Employer Identification No.) Incorporation or organization) Im Langacher, P.O. Box MT-100 CH 8606 Greifensee, Switzerland ----------------------------------- --------------------------- (Address of principal executive offices) (Zip Code) 41-1-944-22-11 -------------------------------------------------------- (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- The Registrant had 44,208,274 shares of Common Stock outstanding at June 30, 2002. METTLER-TOLEDO INTERNATIONAL INC. INDEX TO QUARTERLY REPORT ON FORM 10-Q Page No. -------- PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS Unaudited Interim Consolidated Financial Statements: Interim Consolidated Balance Sheets as of June 30, 2002 3 and December 31, 2001 Interim Consolidated Statements of Operations for the six 4 months ended June 30, 2002 and 2001 Interim Consolidated Statements of Operations for the three 5 months ended June 30, 2002 and 2001 Interim Consolidated Statements of Shareholders' Equity 6 for the six months ended June 30, 2002 and 2001 Interim Consolidated Statements of Cash Flows for the six 7 months ended June 30, 2002 and 2001 Notes to the Interim Consolidated Financial Statements 8 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL 16 CONDITION AND RESULTS OF OPERATIONS ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT 21 MARKET RISK PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS 21 ITEM 2. CHANGES IN SECURITY 21 ITEM 3. DEFAULT UPON SENIOR SECURITIES 21 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 21 ITEM 5. OTHER INFORMATION 21 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 22 Signature 23 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS METTLER-TOLEDO INTERNATIONAL INC. INTERIM CONSOLIDATED BALANCE SHEETS AS OF JUNE 30, 2002 AND DECEMBER 31, 2001 (IN THOUSANDS, EXCEPT SHARE DATA)
JUNE 30, DECEMBER 31, 2002 2001 ---- ---- (UNAUDITED) ASSETS Current assets: Cash and cash equivalents $ 23,875 $ 27,721 Trade accounts receivable, net 230,071 227,295 Inventories, net 153,844 145,621 Other current assets and prepaid expenses 42,151 31,121 ------------ ------------- Total current assets 449,941 431,758 Property, plant and equipment, net 211,491 192,272 Excess of cost over net assets acquired, net 411,779 384,947 Other intangible assets 131,134 126,524 Other assets 54,014 53,911 ------------ ------------- Total assets $ 1,258,359 $ 1,189,412 ============ ============= LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Trade accounts payable $ 58,313 $ 66,327 Accrued and other liabilities 150,846 111,284 Accrued compensation and related items 38,058 47,702 Taxes payable 52,754 72,035 Short-term borrowings and current maturities of long-term debt 50,439 50,239 ------------ ------------- Total current liabilities 350,410 347,587 Long-term debt 304,444 309,479 Non-current deferred taxes 26,403 25,053 Other non-current liabilities 125,944 119,109 ------------ ------------- Total liabilities 807,201 801,228 Shareholders' equity: Preferred stock, $0.01 par value per share; authorized 10,000,000 shares - - Common stock, $0.01 par value per share; authorized 125,000,000 shares; issued 44,208,274 and 44,145,742 shares at June 30, 2002 and December 31, 2001 442 441 Additional paid-in capital 456,947 455,684 Retained earnings 50,109 3,957 Accumulated other comprehensive loss (56,340) (71,898) ------------ ------------- Total shareholders' equity 451,158 388,184 Commitments and contingencies - - ------------ ------------- Total liabilities and shareholders' equity $ 1,258,359 $ 1,189,412 ============ ============= The accompanying notes are an integral part of these interim consolidated financial statements.
METTLER-TOLEDO INTERNATIONAL INC. INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS SIX MONTHS ENDED JUNE 30, 2002 AND 2001 (IN THOUSANDS, EXCEPT SHARE DATA)
JUNE 30, JUNE 30, 2002 2001 ---- ---- (UNAUDITED) (UNAUDITED) Net sales $ 569,411 $ 544,677 Cost of sales 303,192 299,518 ----------- ------------- Gross profit 266,219 245,159 Research and development 34,461 30,310 Selling, general and administrative 158,179 144,124 Amortization 3,675 6,237 Interest expense 8,746 9,346 Other charges, net (see Note 4) 28,269 15,297 ----------- ------------- Earnings before taxes 32,889 39,845 Provision (benefit) for taxes (see Note 5) (13,263) 18,665 ----------- ------------- Net earnings $ 46,152 $ 21,180 =========== ============= Basic earnings per common share: Net earnings $1.04 $0.53 Weighted average number of common shares 44,191,062 39,914,687 Diluted earnings per common share: Net earnings $1.02 $0.50 Weighted average number of common shares 45,463,374 42,505,268 The accompanying notes are an integral part of these interim consolidated financial statements.
METTLER-TOLEDO INTERNATIONAL INC. INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS THREE MONTHS ENDED JUNE 30, 2002 AND 2001 (IN THOUSANDS, EXCEPT SHARE DATA)
JUNE 30, JUNE 30, 2002 2001 ---- ---- (UNAUDITED) (UNAUDITED) Net sales $296,454 $279,033 Cost of sales 155,372 152,184 ----------- ----------- Gross profit 141,082 126,849 Research and development 17,704 15,503 Selling, general and administrative 82,355 70,928 Amortization 1,901 3,025 Interest expense 4,355 4,563 Other charges, net (see Note 4) 28,555 15,290 ----------- ----------- Earnings before taxes 6,212 17,540 Provision (benefit) for taxes (see Note 5) (21,266) 10,858 ----------- ----------- Net earnings $ 27,478 $ 6,682 =========== =========== Basic earnings per common share: Net earnings $0.62 $0.17 Weighted average number of common shares 44,208,274 40,112,438 Diluted earnings per common share: Net earnings $0.61 $0.16 Weighted average number of common shares 45,409,690 42,472,310 The accompanying notes are an integral part of these interim consolidated financial statements.
METTLER-TOLEDO INTERNATIONAL INC. INTERIM CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY SIX MONTHS ENDED JUNE 30, 2002 AND 2001 (IN THOUSANDS, EXCEPT SHARE DATA) (UNAUDITED)
RETAINED ACCUMULATED COMMON STOCK ADDITIONAL EARNINGS / OTHER --------------------------- PAID-IN (ACCUMULATED COMPREHENSIVE SHARES AMOUNT CAPITAL DEFICIT) LOSS TOTAL ------ ------ ------- -------- ---- ----- Balance at December 31, 2001 44,145,742 $441 $ 455,684 $ 3,957 $ (71,898) $388,184 Exercise of stock options 62,532 1 1,263 - - 1,264 Comprehensive income: Net earnings - - - 46,152 - 46,152 Unrealized loss on cash-flow hedging instruments - - - - (2,097) (2,097) Change in currency translation adjustment - - - - 17,655 17,655 --------- Comprehensive income 61,710 ------------ --------- ----------- ------------- ----------- --------- Balance at June 30, 2002 44,208,274 $442 $ 456,947 $ 50,109 $ (56,340) $451,158 ============ ========= =========== ============= =========== ========= Balance at December 31, 2000 39,372,873 $393 $ 294,558 $(68,307) $ (47,804) $178,840 Exercise of stock options 739,565 7 8,936 - - 8,943 Comprehensive income: Net earnings - - - 21,180 - 21,180 Unrealized loss on cash-flow hedging instruments - - - - (1,689) (1,689) Change in currency translation adjustment - - - - (5,657) (5,657) --------- Comprehensive income 13,834 ------------ --------- ----------- ------------- ----------- --------- Balance at June 30, 2001 40,112,438 $400 $ 303,494 $ (47,127) $ (55,150) $201,617 ============ ========= =========== ============= =========== ========= The accompanying notes are an integral part of these interim consolidated financial statements.
METTLER-TOLEDO INTERNATIONAL INC. INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS SIX MONTHS ENDED JUNE 30, 2002 AND 2001 (IN THOUSANDS)
JUNE 30, JUNE 30, 2002 2001 ---- ---- (UNAUDITED) (UNAUDITED) Cash flow from operating activities: Net earnings $46,152 $21,180 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation 12,188 11,367 Amortization 3,675 6,237 Other 67 (704) Increase (decrease) in cash resulting from changes in: Trade accounts receivable, net 8,279 (672) Inventories 304 (4,469) Other current assets (4,436) (4,762) Trade accounts payable (11,984) (17,841) Accruals and other liabilities, net(a) (9,766) 19,336 ---------- ---------- Net cash provided by operating activities 44,479 29,672 ---------- ---------- Cash flows from investing activities: Proceeds from sale of property, plant and equipment 225 1,917 Purchase of property, plant and equipment (17,778) (15,166) Acquisitions (19,272) (934) ---------- ---------- Net cash used in investing activities (36,825) (14,183) ---------- ---------- Cash flows from financing activities: Proceeds from borrowings 37,882 43,555 Repayments of borrowings (49,482) (65,905) Proceeds from issuance of common stock 1,264 8,943 ---------- ---------- Net cash used in financing activities (10,336) (13,407) ---------- ---------- Effect of exchange rate changes on cash and cash equivalents (1,164) (595) ---------- ---------- Net increase (decrease) in cash and cash equivalents (3,846) 1,487 Cash and cash equivalents: Beginning of period $ 27,721 $21,725 ---------- ---------- End of period $ 23,875 $23,212 ========== ========== (a) Accruals and other liabilities include payments for restructuring and certain acquisition integration activities of $4.1 million in 2002 and $5.9 million in 2001. The accompanying notes are an integral part of these interim consolidated financial statements.
METTLER-TOLEDO INTERNATIONAL INC. NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (IN THOUSANDS UNLESS OTHERWISE STATED) 1. BASIS OF PRESENTATION Mettler-Toledo International Inc. ("Mettler Toledo" or the "Company") is a global manufacturer and marketer of precision instruments, including weighing and certain analytical and measurement technologies, for use in laboratory, industrial and food retailing applications. The Company is also a leading provider of automated chemistry solutions used in drug and chemical compound discovery and development. The Company's primary manufacturing facilities are located in Switzerland, the United States, Germany, the United Kingdom, France and China. The Company's principal executive offices are located in Greifensee, Switzerland. The accompanying interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP"). The interim consolidated financial statements have been prepared without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. The interim consolidated financial statements as of June 30, 2002 and for the six and three month periods ended June 30, 2002 and 2001 should be read in conjunction with the December 31, 2001 and 2000 consolidated financial statements and the notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2001. The accompanying interim consolidated financial statements reflect all adjustments (consisting of only normal recurring adjustments) which, in the opinion of management, are necessary for a fair statement of the results of the interim periods presented. Operating results for the six and three months ended June 30, 2002 are not necessarily indicative of the results to be expected for the full year ending December 31, 2002. The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, as well as disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results may differ from those estimates. METTLER-TOLEDO INTERNATIONAL INC. NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) (IN THOUSANDS UNLESS OTHERWISE STATED) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES INVENTORIES Inventories are valued at the lower of cost or market. Cost, which includes direct materials, labor and overhead plus indirect overhead, is determined using the first in, first out (FIFO) method. Inventories consisted of the following at June 30, 2002 and December 31, 2001: June 30, December 31, 2002 2001 --------------- --------------- Raw materials and parts $77,168 $70,392 Work in progress 31,850 28,433 Finished goods 44,826 46,796 --------------- --------------- $153,844 $145,621 =============== =============== INTANGIBLE ASSETS As of January 1, 2002 the Company has adopted Statement of Financial Accounting Standards No. 142 ("SFAS 142"), "Goodwill and Other Intangible Assets", effective for fiscal years beginning after December 15, 2001. This Statement requires that goodwill no longer be amortized to earnings, but instead be reviewed for impairment upon initial adoption of SFAS 142 and on an annual basis going forward. In addition, any goodwill arising from acquisitions completed after June 30, 2001 is not amortized. Other intangible assets will continue to be amortized over their useful lives. Application of the non-amortization provisions of SFAS 142 will increase our net earnings by $6.5 million and our diluted earnings per share by $0.15 on an annual basis, or $0.14 adjusting for additional shares issued in connection with our acquisition of Rainin Instrument LLC. The reconciliations of reported net earnings to adjusted net earnings before amortization of goodwill for the periods ended June 30 are as follows:
Three months ended Six months ended 2002 2001 2002 2001 ---- ---- ---- ---- Net earnings: Reported......................... $27,478 $ 6,682 $ 46,152 $ 21,180 Goodwill amortization............ - 1,602 - 3,209 ------- ------- -------- -------- Adjusted......................... $27,478 $ 8,284 $ 46,152 $ 24,389 ======= ======= ======== ======== Diluted earnings per share: Reported......................... $0.61 $0.16 $1.02 $0.50 Goodwill amortization............ - 0.04 - 0.07 ------- ------- -------- -------- Adjusted......................... $0.61 $0.20 $1.02 $0.57 ======= ======= ======== ========
METTLER-TOLEDO INTERNATIONAL INC. NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) (IN THOUSANDS UNLESS OTHERWISE STATED) 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) INTANGIBLE ASSETS (CONTINUED) SFAS 142 requires that goodwill be subject to annual impairment tests using a two-step process. The first step is to identify a potential impairment, and the second step measures the amount of impairment if any. The Company has completed its impairment review under SFAS 142 and has determined that there is no impact on the Company's financial position and results of operations. The components of other intangible assets are as follows:
June 30, December 31, 2002 2001 --------------- --------------- Customer relationships $ 70,955 $ 67,383 Tradename 23,327 22,434 Intellectual property license 19,905 19,905 Proven technology and patents 19,138 17,352 --------------- --------------- 133,325 127,074 Less accumulated amortization (2,191) (550) --------------- --------------- Total other intangible assets, net $131,134 $126,524 =============== ===============
Other intangible assets substantially relate to the acquisition of Rainin Instrument, LLC. The annual aggregate amortization expense based on the current balance of other intangible assets for the next five years is estimated at $3.4 million. EARNINGS PER COMMON SHARE As described in Note 10 in the Company's Annual Report on Form 10-K for the year ended December 31, 2001, in accordance with the treasury stock method, the Company has included the following equivalent shares relating to 4,389,835 outstanding options to purchase shares of common stock in the calculation of diluted weighted average number of common shares for the six and three month periods ended June 30, 2002 and 2001, respectively. June 30, June 30, 2002 2001 ---------------- ---------------- Six months ended 1,272,312 2,590,581 Three months ended 1,201,416 2,359,872 METTLER-TOLEDO INTERNATIONAL INC. NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) (IN THOUSANDS UNLESS OTHERWISE STATED) 3. BUSINESS COMBINATIONS During the six months ended June 30, 2002, the Company spent approximately $19.3 million on acquisitions, including the acquisition of SofTechnics Inc. and additional consideration related to earn-out periods associated with acquisitions consummated in prior years. SofTechnics is a leading provider of in-store retail item management software solutions. Goodwill recognized in connection with these acquisition payments totaled $17.7 million, which is primarily included in the Company's Principal U.S. Operations segment as depicted in Note 6 to these interim consolidated financial statements and is expected to be fully deductible for tax purposes. The Company may be required to make additional earn-out payments based upon the achievement of certain financial performance levels relating to certain of these acquisitions in the future. The fair value of any earn-out payments will be recorded as additional consideration of the acquired enterprise and recorded as goodwill and evaluated for impairment, when such payments are deemed issuable to the sellers. As discussed more fully in Note 3 of the Company's Annual Report on Form 10-K for the year ended December 31, 2001, the Company acquired Rainin Instrument, LLC in November 2001 for approximately $294.2 million. The following summarized unaudited pro forma information assumes the acquisition of Rainin occurred on January 1, 2001. The pro forma data reflects adjustments directly related to the acquisition, and does not include adjustments that may arise as a consequence of the acquisition. Accordingly, the unaudited pro forma information does not purport to be indicative of what the Company's combined results of operations would actually have been had the acquisition occurred on January 1, 2001 or to project the Company's combined results of operations for any future periods. METTLER-TOLEDO INTERNATIONAL INC. NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) (IN THOUSANDS UNLESS OTHERWISE STATED) 3. BUSINESS COMBINATIONS (CONTINUED) Six months ended June 30: 2002 2001 ---- ---- Net sales: As reported............................ $569,411 $544,677 Pro forma.............................. 569,411 582,341 Net earnings*: As reported............................ $46,152 $21,180 Pro forma.............................. 46,152 24,491 Basic earnings per common share: As reported............................ $1.04 $0.53 Pro forma.............................. 1.04 0.57 Diluted earnings per common share*: As reported............................ $1.02 $0.50 Pro forma.............................. 1.02 0.53 * Net earnings excluding restructuring charges in 2002 and 2001 and the one time tax credit in 2002, would have been $43,080 or $0.95 per share on a diluted basis in 2002 compared to $35,776 or $0.84 per share on a diluted basis in 2001 and on a pro forma basis $39,087 or $0.85 per share on a diluted basis for 2001. 4. OTHER CHARGES, NET Other charges, net consists primarily of foreign currency transactions, interest income, and charges related to the Company's cost-reduction programs. In June 2002, the Company's management approved restructuring plans to exit and consolidate manufacturing facilities and reduce the Company's expense structure. As part of these efforts to reduce costs, the Company recorded a charge of $28.7 million ($20.1 million after tax) during the three months ended June 30, 2002. This charge was comprised of restructuring liabilities of $24.3 million and related asset impairments of $4.4 million. In total, the Company expects this restructuring plan to result in cash outlays of approximately $22.1 million and non-cash items of $6.6 million. The charge comprised involuntary employee separation benefits, write-downs of impaired assets to be disposed and other exit costs. The Company expects to involuntarily terminate approximately 300 employees in targeted manufacturing and administrative areas and to substantially complete the manufacturing consolidation by the end of 2003. The asset impairments of $4.4 million primarily relate to plant and equipment disposals resulting from the exit of certain manufacturing facilities. Fair value of these assets was determined on the basis of their net realizable value on disposal. Substantially all of the impaired assets will be physically disposed by the end of 2003. METTLER-TOLEDO INTERNATIONAL INC. NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) (IN THOUSANDS UNLESS OTHERWISE STATED) 4. OTHER CHARGES, NET (CONTINUED) As part of the current restructuring program, the Company revised its U.S. defined benefit pension plan to freeze the benefits for current participants and to discontinue the plan for all future employees, resulting in an expense of $1.1 million. In addition, the Company's U.S. retiree medical program was also discontinued for certain current and all future active employees resulting in a curtailment gain of $1.3 million. During the three months ended June 30, 2001 the Company recorded a restructuring charge of $15.2 million associated with headcount reductions and manufacturing transfers. The activities associated with this charge are substantially complete. A roll-forward of the Company's accrual for restructuring activities follows:
For the six months ended Employee Lease June 30, 2002 related termination Other Total - ------------- ------- ----------- ----- ----- (a) (b) (c) Beginning of period........................ $ 2,001 $ 279 $324 $ 2,604 Restructuring expenses..................... 21,967 2,051 283 24,301 Cash payments.............................. (3,138) (105) (202) (3,445) Increases in retirement benefit obligation................................. (1,965) - - (1,965) Impact of foreign currency................. 341 45 16 402 ------- ------ ---- ------- Balance at June 30, 2002................... $19,206 $2,270 $421 $21,897 ======= ====== ==== ======= (a) Employee related costs comprise mainly severance, medical and other benefit costs in connection with headcount reductions announced during 2002. These employee terminations and related cash outflows will be substantially complete by the end of 2003. (b) Lease termination costs primarily relate to the early termination of leases on vacated property. (c) Other costs include expenses associated with equipment dismantling and disposal and other exit costs.
5. INCOME TAXES During the second quarter of 2002, we completed a tax restructuring program and related tax audits, and recorded a tax benefit of $23.1 million. METTLER-TOLEDO INTERNATIONAL INC. NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) (IN THOUSANDS UNLESS OTHERWISE STATED) 6. SEGMENT REPORTING The Company has five reportable segments: Principal U.S. Operations, Principal Central European Operations, Swiss R&D and Manufacturing Operations, Other Western European Operations and Other. The following tables show the operations of the Company's operating segments:
Principal Other For the period Principal Central Swiss R&D Western Eliminations January 1, 2002 to U.S. European and Mfg. European and June 30, 2002 Operations Operations Operations Operations Other (a) Corporate (b) Total ------------------------- --------------- ------------- ------------ ------------ ------------ ---------------- ---------- Net sales to external customers................... $207,131 $ 75,248 $ 10,292 $ 124,185 $ 152,555 $ - $ 569,411 Net sales to other segments. 15,855 24,921 62,099 19,213 65,127 (187,215) - -------- -------- -------- --------- --------- ----------- --------- Total net sales............. $222,986 $100,169 $ 72,391 $ 143,398 $ 217,682 $ (187,215) $ 569,411 ======== ======== ======== ========= ========= =========== ========= Adjusted operating income... $ 29,401 $ 7,674 $ 14,090 $ 6,645 $ 20,049 $ (4,280) $ 73,579 Goodwill, net............... $238,424 $ 15,272 $ 14,933 $ 57,527 $ 85,623 $ - $ 411,779 Principal Other For the period Principal Central Swiss R&D Western Eliminations January 1, 2001 to U.S. European and Mfg. European and June 30, 2001 Operations Operations Operations Operations Other (a) Corporate (b) Total ------------------------- --------------- ------------- ------------ ------------ ------------ ---------------- ---------- Net sales to external customers................... $174,050 $ 89,633 $ 13,362 $ 129,633 $ 137,999 $ - $ 544,677 Net sales to other segments. 14,012 28,384 70,791 20,951 70,822 (204,960) - -------- -------- -------- --------- --------- ----------- --------- Total net sales............. $188,062 $118,017 $ 84,153 $ 150,584 $ 208,821 $ (204,960) $ 544,677 ======== ======== ======== ========= ========= =========== ========= Adjusted operating income... $ 9,369 $ 13,712 $ 18,434 $ 11,388 $ 17,488 $ 334 $ 70,725 (a) Other includes reporting units in Asia, Eastern Europe, Latin America and segments from other countries that do not meet the aggregation criteria of SFAS 131. (b) Eliminations and Corporate includes the elimination of intersegment transactions as well as certain corporate expenses, intercompany investments and certain goodwill, which are not included in the Company's operating segments.
METTLER-TOLEDO INTERNATIONAL INC. NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) (IN THOUSANDS UNLESS OTHERWISE STATED) 6. SEGMENT REPORTING (CONTINUED) A reconciliation of adjusted operating income to earnings before taxes follows: For the period For the period January 1, 2002 January 1, 2001 to to June 30, 2002 June 30, 2001 ------------------ --------------------- Adjusted operating income............. $ 73,579 $70,725 Amortization.......................... 3,675 6,237 Interest expense...................... 8,746 9,346 Other charges, net.................... 28,269(a) 15,297(b) -------- ------- Earnings before taxes................. $ 32,889 $39,845 ======== ======= (a) Includes a charge of $28.7 million, which comprises severance, asset write-downs and other costs, primarily related to headcount reductions and manufacturing transfers. (b) Includes a charge of $15.2 million, which comprises severance, asset write-downs and other costs, primarily related to headcount reductions and manufacturing transfers. ---------------------------------------- ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the Unaudited Interim Consolidated Financial Statements included herein. GENERAL Our interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America on a basis which reflects the interim consolidated financial statements of Mettler-Toledo International Inc. Operating results for the six and three months ended June 30, 2002 are not necessarily indicative of the results to be expected for the full year ending December 31, 2002. RESULTS OF OPERATIONS Net sales were $569.4 million and $296.5 million for the six and three months ended June 30, 2002 compared to $544.7 million and $279.0 million for the corresponding periods in the prior year. This represents an increase of 5% and 4% in local currencies, respectively. Results for the three month period were positively impacted by the weakening of the U.S. dollar against other currencies. Net sales in U.S. dollars during the six and three month periods increased 5% and 6%, respectively. Net sales by geographic customer location were as follows: Net sales in Europe decreased 8% and 10% in local currencies during the six and three month periods ended June 30, 2002 versus the corresponding periods in the prior year reflecting weak sales performance across most product lines, particularly in Germany. In particular, we experienced a decrease of 26% and 40% respectively for the six and three month periods ended June 30, 2002 in sales of our European retail products after the introduction of the euro currency. The Company expects that sales of European retail products will continue to decline at over 40% for the remainder of 2002 versus 2001. Net sales in local currencies during the six and three month periods in the Americas increased 17% as compared to the corresponding period in 2001, principally due to the acquisition of Rainin Instrument in 2001. Net sales in local currencies during the six and three month periods in Asia and other markets increased 8% and 6% compared to the same periods in the prior year. The results of our business in Asia and other markets during the six and three month periods ending June 30, 2002 reflect particularly strong sales performance in China. We acquired Rainin Instrument in November 2001. Assuming we had acquired Rainin at the beginning of 2001, the acquisition would have added approximately $37.7 million and $19.7 million or 7% of sales to each of the six and three month periods ending June 30, 2001 respectively, and added $11.4 million and $6.6 million of Adjusted Operating Income (gross profit less research and development and selling, general and administrative expenses before amortization and other charges, net) on a pro forma basis. Our sales decline in Europe was primarily due to a deterioration in economic conditions, as well as a decrease in sales of our European retail products after the introduction of the euro currency. In the Americas, there has been no sign to date of an economic recovery benefiting the markets for our products, in particular those markets sensitive to manufacturing output. To the extent that economic conditions significantly deteriorate in these or other parts of the world, our sales growth and profitability may be adversely affected. Gross profit as a percentage of net sales increased to 46.8% and 47.6% for the six and three month periods ended June 30, 2002, compared to 45.0% and 45.5% for the corresponding periods in the prior year. This increase is primarily related to changes in our sales mix, as well as benefits from implementing various cost savings initiatives. Research and development expenses as a percentage of net sales increased to 6.1% and 6.0% for the six and three months ended June 30, 2002, compared to 5.6% for the corresponding period in the prior year. We continue to make significant investments in research and development, which increased 12% and 10% in local currencies for the six and three month periods ended June 30, 2002. Selling, general and administrative expenses as a percentage of net sales increased to 27.8% for the six and three month periods ended June 30, 2002, compared to 26.4% and 25.4% for the corresponding periods in the prior year primarily due to changes in our sales mix and our reduced sales volume in Europe. Additionally, our selling, general and administrative expenses increased significantly over the prior year for the six and three month periods ended June 30, 2002 primarily due to acquisitions and to a lesser degree unfavorable foreign currency. Adjusted Operating Income increased 4% to $73.6 million, or 12.9% of net sales, for the six months ended June 30, 2002, compared to $70.7 million, or 13.0% of net sales, for the corresponding period in the prior year. Adjusted Operating Income increased 1% to $41.0 million, or 13.8% of net sales, for the three months ended June 30, 2002, compared to $40.4 million, or 14.5% of net sales, for the corresponding period in the prior year. The reduced operating margin primarily reflects the effects of reduced sales volume in Europe as well as unfavorable foreign currency exchange rates, offset in part by the previously described benefits of the Rainin acquisition. We believe that Adjusted Operating Income provides important financial information in measuring and comparing our operating performance. Adjusted Operating Income is not intended to represent operating income under U.S. GAAP and should not be considered as an alternative to net earnings as an indicator of our performance. Other charges net were $28.3 million and $28.6 million for the six and three month periods ended June 30, 2002 compared to $15.3 million for the same periods in 2001. The quarter ended June 30, 2002 includes a pre-tax restructuring charge of $28.7 million. The charge primarily comprises severance payments related to work force reductions and other costs associated with consolidating manufacturing. The quarter ended June 30, 2001 includes a restructuring charge of $15.2 million. Activities associated with our 2001 restructuring charge are substantially complete. Interest expense decreased to $8.7 million and $4.4 million for the six and three months ended June 30, 2002, compared to $9.3 million and $4.6 million for the corresponding periods in the prior year. The decrease was principally due to reduced borrowing rates partially offset by higher average borrowings during 2002 to fund the Rainin acquisition. The provision for taxes is based upon our projected annual effective tax rate for the related period. Our effective tax rate before non-recurring items for the six and three month periods ended June 30, 2002 was approximately 30% compared with 35% in 2001. This reduction reflects the effect of several recently implemented tax initiatives. In addition, we recorded a one-time benefit of $23.1 million during the three months ended June 30, 2002 related to the completion of our tax restructuring program and related tax audits. Net earnings were $43.1 million and $24.4 million for the six and three months ended June 30, 2002, before the previously mentioned charge associated with headcount reductions and manufacturing transfers and the one-time tax benefit. This compares to net earnings of $35.8 million and $21.3 million, for the corresponding periods in the prior year before the prior year restructuring charge. Adjusting for the adoption of SFAS 142, net earnings before restructuring charges and the one-time tax benefit for the six and three month periods ended June 30, 2002 increased 11% and 7%, respectively. LIQUIDITY AND CAPITAL RESOURCES Cash provided by operating activities totaled $44.5 million for the six months ended June 30, 2002, compared to $29.7 million for the same period in 2001. The increase in 2002 resulted principally from increased Adjusted Operating Income and improved working capital management. Cash provided by operating activities includes payments for restructuring, and certain acquisition integration activities. These amounts totaled $4.1 million, and $5.9 million for the six months ended June 30, 2002 and 2001 respectively. During the six months ended June 30, 2002, we spent approximately $19.3 million on acquisitions, including additional consideration related to earn-out periods associated with acquisitions consummated in prior years. These purchases were funded from cash generated from operations and additional borrowings. We continue to explore potential acquisitions to expand our product portfolio and improve our distribution capabilities. In connection with any acquisition, we may incur additional indebtedness. In addition, we may make additional earn-out payments relating to certain of these and previous year acquisitions in the future. Capital expenditures are a significant use of funds and are made primarily for machinery, equipment, information technology equipment and the purchase and expansion of facilities. Our capital expenditures totaled $17.8 million and $15.2 million during the first six months of 2002 and 2001 respectively. The increase in 2002 is principally due to spending associated with Rainin's new facility in California. We expect capital expenditures to increase as our business grows, and to fluctuate as currency exchange rates change. At June 30, 2002, our consolidated debt, net of cash, was $331.0 million. We had borrowings of $335.4 million under our credit agreement and $19.5 million under various other arrangements as of June 30, 2002. Of our credit agreement borrowings, approximately $81.9 million was borrowed as term loans scheduled to mature in 2004 and $253.5 million was borrowed under a multi-currency revolving credit facility. At June 30, 2002, we had $148.8 million of availability remaining under the revolving credit facility. At June 30, 2002, approximately $265.6 million of the borrowings under the credit agreement and local working capital facilities were denominated in U.S. dollars. The balance of the borrowings under the credit agreement and local working capital facilities were denominated in certain of our other principal trading currencies amounting to approximately $89.3 million at June 30, 2002. Changes in exchange rates between the currencies in which we generate cash flow and the currencies in which our borrowings are denominated affect our liquidity. In addition, because we borrow in a variety of currencies, our debt balances fluctuate due to changes in exchange rates. Under the credit agreement, amounts outstanding under the term loans are payable in quarterly installments. In addition, the credit agreement obligates us to make mandatory prepayments in certain circumstances with the proceeds of asset sales or issuance of capital stock or indebtedness and with certain excess cash flow. The credit agreement imposes certain restrictions on us and our subsidiaries, including restrictions and limitations on the ability to pay dividends to our shareholders, incur indebtedness, make investments, grant liens, sell financial assets and engage in certain other activities. We must also comply with several financial and other covenants. We currently believe that cash flow from operating activities, together with borrowings available under the credit agreement and local working capital facilities, will be sufficient to fund currently anticipated working capital needs and capital spending requirements as well as debt service requirements for at least several years, but there can be no assurance that this will be the case. EFFECT OF CURRENCY ON RESULTS OF OPERATIONS Because we conduct operations in many countries, our operating income can be significantly affected by fluctuations in currency exchange rates. Swiss franc-denominated expenses represent a much greater percentage of our operating expenses than Swiss franc-denominated sales represent of our net sales. In part, this is because most of our manufacturing costs in Switzerland relate to products that are sold outside of Switzerland. Moreover, a substantial percentage of our research and development expenses and general and administrative expenses are incurred in Switzerland. Therefore, if the Swiss franc strengthens against all or most of our major trading currencies (e.g., the U.S. dollar, the euro, other major European currencies and the Japanese yen), our operating profit is reduced. We also have significantly more sales in European currencies (other than the Swiss franc) than we have expenses in those currencies. Therefore, when European currencies weaken against the U.S. dollar and the Swiss franc, it also decreases our operating profits. In recent years, the Swiss franc and other European currencies have generally moved in a consistent manner versus the U.S. dollar. Therefore, because the two effects previously described have offset each other, historically our operating profits have not been materially affected by movements in the U.S. dollar exchange rate versus European currencies. However, there can be no assurance that these currencies will continue to move in a consistent manner in the future. In 2002, we estimate that the unfavorable impact due primarily to the strengthening of the Swiss franc was approximately $1.2 million and $2.8 million for the three and six month periods ended June 30, 2002. We estimate that a further one percent strengthening of the Swiss franc against the euro would result in a decrease in our earnings before tax of between $0.8 million and $1.2 million on an annual basis. In addition to the effects of exchange rate movements on operating profits, our debt levels can fluctuate due to changes in exchange rates, particularly between the U.S. dollar and the Swiss franc. FORWARD-LOOKING STATEMENTS AND ASSOCIATED RISKS This Quarterly Report on Form 10-Q includes forward-looking statements based on our current expectations and projections about future events, including: strategic plans; potential growth, including penetration of developed markets and opportunities in emerging markets; planned product introductions; planned operational changes and research and development efforts; future financial performance, including expected capital expenditures; research and development expenditures; estimated proceeds from and the timing of asset sales; potential acquisitions; future cash sources and requirements; and potential cost savings from restructuring programs. These forward-looking statements are subject to a number of risks and uncertainties, certain of which are beyond our control, which could cause our actual results to differ materially from historical results or those anticipated. Certain of these risks and uncertainties have been identified in Exhibit 99.1 to our Annual Report on Form 10-K for the year ended December 31, 2001. The words "believe," "expect," "anticipate" and similar expressions identify forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. New risk factors emerge from time to time and it is not possible for us to predict all such risk factors, nor can we assess the impact of all such risk factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK As of June 30, 2002, there was no material change in the information provided under Item 7A in the Company's Annual Report on Form 10-K for the year ended December 31, 2001. PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS. NONE ITEM 2. CHANGES IN SECURITY. NONE ITEM 3. DEFAULTS UPON SENIOR SECURITIES. NONE ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. The Mettler-Toledo International Inc. annual meeting of stockholders was held on May 17, 2002. At the meeting, the following matters were submitted to a vote of stockholders: the election of directors of the Company as previously reported to the Commission, and the ratification of the appointment of the Company's independent auditors. As of March 18, 2002, the record date for the annual meeting, there were 44,173,450 shares of Mettler-Toledo International Inc. common stock entitled to vote at the meeting. The holders of 35,571,646 shares were represented in person or in proxy at the meeting, constituting a quorum. The vote with respect to the matters submitted to stockholders was as follows:
Withheld Matter For or Against Abstained - ------ --- ---------- --------- Election of Directors Robert F. Spoerry 35,449,407 122,239 Philip Caldwell 35,402,372 169,274 John T. Dickson 35,447,924 123,722 Philip H. Geier 35,447,250 124,396 Reginald H. Jones 35,444,750 126,896 John D. Macomber 35,404,126 167,520 George M. Milne 35,448,861 122,785 Thomas P. Salice 35,406,763 164,883 Appointment of Independent Auditors 34,519,403 1,047,292 4,931
ITEM 5. OTHER INFORMATION. NONE ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits 3. Amended By-laws of the Company, effective July 25, 2002. 10. Employment agreement between Mettler-Toledo International Inc. and Dennis W. Braun dated June 12, 2002. 99. Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (b) Reports on Form 8-K - None 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 thereto duly authorized. Mettler-Toledo International Inc. Date: August 14, 2002 By: /s/ Dennis Braun ----------------- Dennis Braun Chief Financial Officer EX-3 3 tpex3.txt EXHIBIT 3 Exhibit 3 AMENDED BY-LAWS OF METTLER-TOLEDO INTERNATIONAL INC. ARTICLE I --------- Stockholders ------------ SECTION 1. ANNUAL MEETING. The annual meeting of the stockholders of the Corporation shall be held on such date, at such time and at such place within or without the State of Delaware as may be designated by the Board of Directors, for the purpose of electing Directors and for the transaction of such other business as may be properly brought before the meeting. SECTION 2. SPECIAL MEETINGS. Except as otherwise provided in the Certificate of Incorporation, a special meeting of the stockholders of the Corporation may be called at any time by the Board of Directors, the Chairman of the Board or the President and shall be called by the Chairman of the Board, the President or the Secretary at the request in writing of stockholders holding together at least fifty percent of the number of shares of stock outstanding and entitled to vote at such meeting. Any special meeting of the stockholders shall be held on such date, at such time and at such place within or without the State of Delaware as the Board of Directors or the officer calling the meeting may designate. At a special meeting of the stockholders, no business shall be transacted and no corporate action shall be taken other than that stated in the notice of the meeting unless all of the stockholders are present in person or by proxy, in which case any and all business may be transacted at the meeting even though the meeting is held without notice. SECTION 3. NOTICE OF MEETINGS. Except as otherwise provided in these BY-LAWS or by law, a written notice of each meeting of the stockholders shall be given not less than ten (10) nor more than sixty (60) days before the date of the meeting to each stockholder of the Corporation entitled to vote at such meeting at his address as it appears on the records of the Corporation. The notice shall state the place, date and hour of the meeting and, in the case of a special meeting, the purpose or purposes for which the meeting is called. SECTION 4. QUORUM. At any meeting of the stockholders, the holders of a majority in number of the total outstanding shares of stock of the Corporation entitled to vote at such meeting, present in person or represented by proxy, shall constitute a quorum of the stockholders for all purposes, unless the representation of a larger number of shares shall be required by law, by the Certificate of Incorporation or by these By-Laws, in which case the representation of the number of shares so required shall constitute a quorum; provided that at any meeting of the stockholders at which the holders of any class of stock of the Corporation shall be entitled to vote separately as a class, the holders of a majority in number of the total outstanding shares of such class, present in person or represented by proxy, shall constitute a quorum for purposes of such class vote unless the representation of a larger number of shares of such class shall be required by law, by the Certificate of Incorporation or by these By-Laws. SECTION 5. ADJOURNED MEETINGS. Whether or not a quorum shall be present in person or represented at any meeting of the stockholders, the holders of a majority in number of the shares of stock of the Corporation present in person or represented by Proxy and entitled to vote at such meeting may adjourn from time to time; provided, however, that if the holders of any class of stock of the Corporation are entitled to vote separately as a class upon any matter at such meeting, any adjournment of the meeting in respect of action by such class upon such matter shall be determined by the holders of a majority of the shares of such class present in person or represented by proxy and entitled to vote at such meeting. When a meeting is adjourned to another time or place, notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting the stockholders, or the holders of any class of stock entitled to vote separately as a class, as the case may be, may transact any business which might have been transacted by them at the original meeting. If the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the adjourned meeting. SECTION 6. ORGANIZATION. The Chairman of the Board or, in his absence, the President shall call all meetings of the stockholders to order, and shall act as Chairman of such meetings. In the absence of the Chairman of the Board and the President, the holders of a majority in number of the shares of stock of the Corporation present in person or represented by proxy and entitled to vote at such meeting shall elect a Chairman. The Secretary of the Corporation shall act as Secretary of all meetings of the stockholders; but in the absence of the Secretary, the Chairman may appoint any person to act as Secretary of the meeting. It shall be the duty of the Secretary to prepare and make, at least ten days before every meeting of stockholders, a complete list of stockholders entitled to vote at such meeting, arranged in alphabetical order and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting or, if not so specified, at the place where the meeting is to be held, for the ten days next preceding the meeting, to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, and shall be produced and kept at the time and place of the meeting during the whole time thereof and subject to the inspection of any stockholder who may be present. SECTION 7. VOTING. Except as otherwise provided in the Certificate of Incorporation or by law, each stockholder shall be entitled to one vote for each share of the capital stock of the Corporation registered in the name of such stockholder upon the books of the Corporation. Each stockholder entitled to vote at meeting of stockholders or to express consent or dissent to corporate action in writing without a meeting may authorize another person or persons to act for him by proxy, but no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. When directed by the presiding officer or upon the demand of any stockholder, the vote upon any matter before a meeting of stockholders shall be by ballot. Except as otherwise provided by law or by the Certificate of Incorporation, Directors shall be elected by a plurality of the votes cast at a meeting of stockholders by the stockholders entitled to vote in the election and, whenever any corporate action, other than the election of Directors is to be taken, it shall be authorized by a majority of the votes cast at a meeting of stockholders by the stockholders entitled to vote thereon. Shares of the capital stock of the Corporation belonging to the Corporation or to another corporation, if a majority of the shares entitled to vote in the election of directors of such other corporation is held, directly or indirectly, by the Corporation, shall neither be entitled to vote nor be counted for quorum purposes. SECTION 8. INSPECTORS. When required by law or directed by the presiding officer or upon the demand of any stockholder entitled to vote, but not otherwise, the polls shall be opened and closed, the proxies and ballots shall be received and taken in charge, and all questions touching the qualification of voters, the validity of proxies and the acceptance or rejection of votes shall be decided at any meeting of the stockholders by two or more Inspectors who may be appointed by the Board of Directors before the meeting, or if not so appointed, shall be appointed by the presiding officer at the meeting. If any person so appointed fails to appear or act, the vacancy may be filled by appointment in like manner. SECTION 9. CONSENT OF STOCKHOLDER IN LIEU OF MEETING. Any action required or permitted to be taken by the Corporation's stockholders may not be effected by consent in writing. SECTION 10. ADVANCE NOTICE PROVISIONS FOR ELECTION OF DIRECTORS. Only persons who are nominated in accordance with the following procedures shall be eligible for election as directors of the Corporation. Nominations of persons for election to the Board of Directors may be made at any annual meeting of stockholders, or at any special meeting of stockholders called for the purpose of electing directors, (a) by or at the direction of the Board of Directors (or any duly authorized committee thereof) or (b) by any stockholder of the Corporation (i) who is a stockholder of record on the date of the giving of the notice provided for in this Section 10 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 10. 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 sixty (60) days nor more than ninety (90) days prior to the date of the annual meeting; provided, however, that in the event that less than seventy (70) days notice or prior public disclosure of the date of the annual meeting is given or made to stockholders, notice by the stockholder in order to be timely must be so received not later than the close of business on the tenth (10th) day following the day on which such notice of the date of the annual meeting was mailed or such 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 (10th) day following the day on which notice of the date of the special meeting was mailed or public disclosure of the date of the special meeting was made, whichever first occurs. 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 of 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 address 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 person 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 accompanied by a written consent of each proposed nominee to being named as a nominee and to serve as a director if elected. 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 10. 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 11. ADVANCE NOTICE PROVISIONS FOR BUSINESS TO BE TRANSACTED AT ANNUAL MEETING. 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 thereof), (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 of the giving of the notice provided for in this Section 11 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 sixty (60) days nor more than ninety (90) days prior to the date of the annual meeting; provided, however, that in the event that less than seventy (70) days notice or prior public disclosure of the date of the annual meeting is given or made to stockholders, notice by the stockholder in order to be timely must be so received not later than the close of business on the tenth (10th) day following the day on which such notice of the date of the annual meeting was mailed or such 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 desired to be brought before the annual meeting and the reasons for conducting such business 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 stockholder 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, provided, however that, once business has been properly brought before the annual meeting in accordance with such procedures, nothing in this Section 11 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 foregoing 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. SECTION 12. ORDER OF BUSINESS. The order of business at all meetings of the stockholders shall be determined by the Chairman of the meeting. ARTICLE II ---------- Board of Directors ------------------ SECTION 1. NUMBER AND TERM OF OFFICE. The business and affairs of the Corporation shall be managed by or under the direction of nine (9) Directors, who need not be stockholders of the Corporation. The Directors shall, except as hereinafter otherwise provided for filling vacancies, be elected at the annual meeting of stockholders, and shall hold office until their respective successors are elected and qualified or until their earlier resignation or removal. The number of Directors may be altered from time to time by amendment of these By-Laws. SECTION 2. REMOVAL, VACANCIES AND ADDITIONAL DIRECTORS. The stockholders may, at any special meeting the notice of which shall state that it is called for that purpose, remove, with or without cause, any Director and fill the vacancy; provided that whenever any Director shall have been elected by the holders of any class of stock of the Corporation voting separately as a class under the provisions of the Certificate of Incorporation, such Director may be removed and the vacancy filled only by the holders of that class of stock voting separately as a class. Vacancies caused by any such removal and not filled by the stockholders at the meeting at which such removal shall have been made, or any vacancy caused by the death or resignation of any Director or for any other reason, and any newly created directorship resulting from any increase in the authorized number of Directors, may be filled by the affirmative vote of a majority of the Directors then in office, although less than a quorum, and any Director so elected to fill any such vacancy or newly created directorship shall hold office until his successor is elected and qualified or until his earlier resignation or removal. When one or more Directors shall resign effective at a future date, a majority of Directors then in office, including those who have so resigned, shall have power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations shall become effective, and each Director so chosen shall hold office as herein provided in connection with the filling of other vacancies. SECTION 3. PLACE OF MEETING. The Board of Directors may hold its meetings in such place or places in the State of Delaware or outside the State of Delaware as the Board from time to time shall determine. SECTION 4. REGULAR MEETINGS. Regular meetings of the Board of Directors shall be held at such times and places as the Board from time to time by resolution shall determine. No notice shall be required for any regular meeting of the Board of Directors; but a copy of every resolution fixing or changing the time or place of regular meetings shall be mailed to every Director at least five days before the first meeting held in pursuance thereof. SECTION 5. SPECIAL MEETINGS. Special meetings of the Board of Directors shall be held whenever called by direction of the Chairman of the Board, the President or by any two of the Directors then in office. Notice of the day, hour and place of holding of each special meeting shall be given by mailing the same at least two days before the meeting or by causing the same to be delivered personally or transmitted by telegraph, facsimile, telex or sent by certified, registered or overnight mail at least one day before the meeting to each Director. Unless otherwise indicated in the notice thereof, any and all business other than an amendment of these By-Laws may be transacted at any special meeting, and an amendment of these By-Laws may be acted upon if the notice of the meeting shall have stated that the amendment of these By-Laws is one of the purposes of the meeting. At any meeting at which every Director shall be present, even though without any notice, any business may be transacted, including the amendment of these By-Laws. SECTION 6. QUORUM. Subject to the provisions of Section 2 of this Article II, a majority of the members of the Board of Directors in office (but in no case less than one-third of the total number of Directors nor less than two Directors) shall constitute a quorum for the transaction of business and the vote of the majority of the Directors present at any meeting of the Board of Directors at which a quorum is present shall be the act of the Board of Directors, If at any meeting of the Board there is less than a quorum present, a majority of those present may adjourn the meeting from time to time. SECTION 7. ORGANIZATION. The Chairman of the Board or, in his absence, the President shall preside at all meetings of the Board of Directors. In the absence of the Chairman of the Board and the President, a Chairman shall be elected from the Directors present. The Secretary of the Corporation shall act as Secretary of all meetings of the Directors; but in the absence of the Secretary, the Chairman may appoint any person to act as Secretary of the meeting. SECTION 8. COMMITTEES. The Board of Directors may, by resolution passed by a majority of the whole Board, designate one or more committees, each committee to consist of one or more of the Directors of the Corporation. The Board may designate one or more Directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided by resolution passed by a majority of the whole Board, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and the affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to amending the Certificate of Incorporation, adopting an agreement of merger or consolidation, recommending to the stockholders the sale, lease or exchange of all or substantially all of the Corporations property and assets, recommending to the stockholders a dissolution of the Corporation or a revocation of a dissolution, or amending these By-Laws; and unless such resolution, these By-Laws, or the Certificate of Incorporation expressly so provide, no such committee shall have the power or authority to declare a dividend or to authorize the issuance of stock. SECTION 9. CONFERENCE TELEPHONE MEETINGS. Unless otherwise restricted by the Certificate of Incorporation or by these By-Laws, the members of the Board of Directors or any committee designated by the Board, may participate in a meeting of the Board or such committee, as the case may be, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation shall constitute presence in person at such meeting. SECTION 10. CONSENT OF DIRECTORS OR COMMITTEE IN LIEU OF MEETING. Unless otherwise restricted by the Certificate of Incorporation or by these By-Laws, any action required or permitted to be taken at any meeting of the Board of Directors, or of any committee thereof, may be taken without a meeting if all members of the Board or committee, as the case may be, consent thereto in writing and the writing or writings are filed with the minutes of proceedings of the Board or committee, as the case may be. ARTICLE III ----------- Officers -------- SECTION 1. OFFICERS. The officers of the Corporation shall be a Chairman of the Board, a President, one or more Vice Presidents, a Chief Financial Officer, a Secretary and a Treasurer, and such additional officers, if any, as shall be elected by the Board of Directors pursuant to the provisions of Section 7 of this Article III. The Chairman of the Board, the President, one or more Vice Presidents, a Chief Financial Officer, the Secretary and the Treasurer shall be elected by the Board of Directors at its first meeting after each annual meeting of the stockholders. The failure to hold such election shall not of itself terminate the term of office of any officer. All officers shall hold office at the pleasure of the Board of Directors. Any officer may resign at any time upon written notice to the Corporation. Officers may, but need not, be Directors. Any number of offices may be held by the same person. All officers, agents and employees shall be subject to removal, with or without cause, at any time by the Board of Directors. The removal of an officer without cause shall be without prejudice to his contract rights, if any. The election or appointment of an officer shall not of itself create contract rights. All agents and employees other than officers elected by the Board of Directors shall also be subject to removal, with or without cause, at any time by the officers appointing them. Any vacancy caused by the death of any officer, his resignation, his removal, or otherwise, may be filled by the Board of Directors, and any officer so elected shall hold office at the pleasure of the Board of Directors. In addition to the powers and duties of the officers of the Corporation as set forth in these By-Laws, the officers shall have such authority and shall perform such duties as from time to time may be determined by the Board of Directors. SECTION 2. POWERS AND DUTIES OF THE CHAIRMAN OF THE BOARD. The Chairman of the Board shall preside at all meetings of the stockholders and at all meetings of the Board of Directors and shall have such other powers and perform such other duties as may from time to time be assigned to him by these By-Laws or by the Board of Directors. SECTION 3. POWERS AND DUTIES OF THE PRESIDENT. The President shall be the chief executive officer of the Corporation and, subject to the control of the Board of Directors and the Chairman of the Board, shall have general charge and control of all its operations and shall perform all duties incident to the office of President. In the absence of the Chairman of the Board, he shall preside at all meetings of the stockholders and at all meetings of the Board of Directors and shall have such other powers and perform such other duties as may from time to time be assigned to him by these By-Laws or by the Board of Directors or the Chairman of the Board. SECTION 4. POWERS AND DUTIES OF THE VICE PRESIDENTS. Each Vice President shall perform all duties incident to the office of Vice President and shall have such other powers and perform such other duties as may from time to time be assigned to him by these By-Laws or by the Board of Directors, the Chairman of the Board or the President. SECTION 5. POWERS AND DUTIES OF THE CHIEF FINANCIAL OFFICER. The Chief Financial Officer shall be the principal financial officer of the Corporation, and shall be in charge of, and have control over, all financial accounting and tax matters regarding the Corporation. The Chief Financial Officer shall have such other powers and perform such other duties as may from time to time be assigned to him by these By-Laws or by the Board of Directors, the Chairman of the Board or the President. SECTION 6. POWERS AND DUTIES OF THE SECRETARY. The Secretary shall keep the minutes of all meetings of the Board of Directors and the minutes of all meetings of the stockholders in books provided for that purpose; he shall attend to the giving or serving of all notices of the Corporation; he shall have custody of the corporate seal of the Corporation and shall affix the same to such documents and other papers as the Board of Directors, the Chairman of the Board or the President shall authorize and direct; he shall have charge of the stock certificate books, transfer books and stock ledgers and such other books and papers as the Board of Directors, the Chairman of the Board or the President shall direct, all of which shall at reasonable times be open to the examination of any Director, upon application, at the office of the Corporation during business hours; and he shall perform duties incident to the office of Secretary and shall also have such other powers and shall perform such other duties as may from time to time be assigned to him by these By-Laws or the Board of Directors, the Chairman of the Board or the President. SECTION 7. POWERS AND DUTIES OF THE TREASURER. The Treasurer shall act at the direction of the Chief Financial Officer. At the direction of the Chief Financial Officer, the Treasurer shall have custody of, and when proper shall pay out, disburse or otherwise dispose of, all funds and securities of the Corporation which may have come into his hands; he may endorse on behalf of the Corporation for collection checks, notes and other obligations and shall deposit the same to the credit of the Corporation in such bank or banks or depository or depositories as the Board of Directors may designate; he shall enter or cause to be entered regularly in the books of the Corporation kept for the purpose full and accurate accounts of all moneys received or paid or otherwise disposed of by him and whenever required by the Board of Directors, or the President or Chief Financial Officer shall render statements of such accounts; he shall, at all reasonable times, exhibit his books and accounts to any Director of the Corporation upon application at the office of the Corporation during business hours; and he shall perform all duties incident to the office of Treasurer and shall also have such other powers and shall perform such other duties as may from time to time be assigned to him by these By-Laws or by the Board of Directors, the Chairman of the Board, or the President or the Chief Financial Officer. SECTION 8. ADDITIONAL OFFICERS. The Board of Directors may from time to time elect such other officers (who may but need not be Directors), including a Controller, Assistant Treasurers, Assistant Secretaries and Assistant Controllers, as the Board may deem advisable and such officers shall have such authority and shall perform such duties as may from time to time be assigned to them by the Board of Directors, the Chairman of the Board or the President. The Board of Directors may from time to time by resolution delegate to any Assistant Treasurer or Assistant Treasurers any of the powers or duties herein assigned to the Treasurer; and may similarly delegate to any Assistant Secretary or Assistant Secretaries any of the powers or duties herein assigned to the Secretary. SECTION 9. GIVING OF BOND BY OFFICERS. All officers of the Corporation, if required to do so by the Board of Directors, shall furnish bonds to the Corporation for the faithful performance of their duties, in such penalties and with such conditions and security as the Board shall require. SECTION 10. VOTING UPON STOCKS. Unless otherwise ordered by the Board of Directors, the Chairman of the Board, the President or any Vice President shall have full power and authority on behalf of the Corporation to attend and to act and to vote, or in the name of the Corporation to execute proxies to vote, at any meetings of stockholders of any corporation in which the Corporation may hold stock, and at any such meetings shall possess and may exercise, in person or by proxy, any and all rights, powers and privileges incident to the ownership of such stock. The Board of Directors may from time to time, by resolution, confer like powers upon any other person or persons. SECTION 11. COMPENSATION OF OFFICERS. The officers of the Corporation shall be entitled to receive such compensation for their services as shall from time to time be determined by the Board of Directors. ARTICLE IV ---------- Stock-Seal-Fiscal Year ---------------------- SECTION 1. CERTIFICATES FOR SHARES OF STOCK. The certificates for shares of stock of the Corporation shall be in such form, not inconsistent with the Certificate of Incorporation, as shall be approved by the Board of Directors. All certificates shall be signed by the Chairman of the Board, the President or a Vice President and by the Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer, and shall not be valid unless so signed. In case any officer or officers who shall have signed any such certificate or certificates shall cease to be such officer or officers of the Corporation, whether because of death, resignation or otherwise, before such certificate or certificates shall have been delivered by the Corporation, such certificate or certificates may nevertheless be issued and delivered as though the person or persons who signed such certificate or certificates had not ceased to be such officer or officers of the Corporation. All certificates for shares of stock shall be consecutively numbered as the same are issued. The name of the person owning the shares represented thereby with the number of such shares and the date of issue thereof shall be entered on the books of the Corporation. Except as hereinafter provided, all certificates surrendered to the Corporation for transfer shall be canceled, and no new certificates shall be issued until former certificates for the same number of shares have been surrendered and canceled. SECTION 2. LOST, STOLEN OR DESTROYED CERTIFICATES. Whenever person owning a certificate for shares of stock of the Corporation alleges that it has been lost stolen or destroyed, he shall in the office of the Corporation an affidavit setting forth, to the best of his knowledge and belief, the time, place and circumstances of the loss, theft or destruction, and, if required by the Board of Directors, a bond of indemnity or other indemnification sufficient in the opinion of the Board of Directors to indemnify the Corporation and its agents against any claim that may be made against it or them on account of the alleged loss, theft or destruction of any such certificate or the issuance of a new certificate in replacement therefor. Thereupon the Corporation may cause to be issued to such person a new certificate in replacement for the certificate alleged to have been lost, stolen or destroyed. Upon the stub of every new certificate so issued shall be noted the fact of such issue and the number, date and the name of the registered owner of the lost, stolen or destroyed certificate in lieu of which the new certificate is issued. SECTION 3. TRANSFER OF SHARES. Shares of stock of the Corporation shall be transferred on the books of the Corporation by the holder thereof, in person or by his attorney duly authorized in writing, upon surrender and cancellation of certificates for the number of shares of stock to be transferred, except as provided in the preceding section. SECTION 4. REGULATIONS. The Board of Directors shall have power and authority to make such rules and regulations as it may deem expedient concerning the issue, transfer and registration of certificates for shares of stock of the Corporation. SECTION 5. RECORD DATE. In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, as the case may be, the Board of Directors may fix, in advance, a record date, which shall not be more than sixty (60) nor less than ten (10) days before the date of such meeting, nor more than sixty (60) days prior to any other action. If no record date is fixed, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held; the record date for determining stockholders entitled to express consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is necessary, shall be the day on which the first written consent is expressed; and the record date for determining stockholders for any other purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting. SECTION 6. DIVIDENDS. Subject to the provisions of the Certificate of Incorporation, the Board of Directors shall have power to declare and pay dividends upon shares of stock of the Corporation, but only out of funds available for the payment of dividends as provided by law. Subject to the provisions of the Certificate of Incorporation, any dividends declared upon the stock of the Corporation shall be payable on such date or dates as the Board of Directors shall determine. If the date fixed for the payment of any dividend shall in any year fall upon a legal holiday, then the dividend payable on such date shall be paid on the next day not a legal holiday. SECTION 7. CORPORATE SEAL. The Board of Directors shall provide a suitable seal, containing the name of the Corporation, which seal shall be kept in the custody of the Secretary. A duplicate of the seal may be kept and be used by any officer of the Corporation designated by the Board of Directors, the Chairman of the Board or the President. SECTION 8. FISCAL YEAR. The fiscal year of the Corporation shall be such fiscal year as the Board of Directors from time to time by resolution shall determine. ARTICLE V --------- Miscellaneous Provisions ------------------------ SECTION 1. CHECKS, NOTES, ETC. All checks, drafts, bills of exchange, acceptances, notes or other obligations or orders for the payment of money shall be signed and, if so required by the Board of Directors, countersigned by such officers of the Corporation and/or other persons as the Board of Directors from time to time shall designate. Checks, drafts, bills of exchange, acceptances, notes, obligations and orders for the payment of money made payable to the Corporation may be endorsed for deposit to the credit of the Corporation with a duly authorized depository by the Treasurer, or otherwise as the Board of Directors may from time to time, by resolution, determine. SECTION 2. LOANS. No loans and no renewals of any loans shall be contracted on behalf of the Corporation except as authorized by the Board of Directors. When authorized so to do, any officer or agent of the Corporation may effect loans and advances for the Corporation from any bank, trust company or other institution or from any firm, corporation or individual, and for such loans and advances may make, execute and deliver promissory notes, bonds or other evidences of indebtedness of the Corporation. When authorized so to do, any officer or agent of the Corporation may pledge, hypothecate or transfer, as security for the payment of any and all loans, advances, indebtedness and liabilities of the Corporation, any and all stocks, securities and other personal property at any time held by the Corporation, and to that end may endorse, assign and deliver the same. Such authority may be general or confined to specific instances. SECTION 3. WAIVERS OF NOTICE. Whenever any notice whatever is required to be given by law, by the Certificate of Incorporation or by these By-Laws to any person or persons, a waiver thereof in writing, signed by the person or persons entitled to the notice, whether before or after the time stated therein, shall be deemed equivalent thereto. SECTION 4. OFFICES OUTSIDE OF DELAWARE. Except as otherwise required by the laws of the State of Delaware, the Corporation may have an office or offices and keep its books, documents and papers outside of the State of Delaware at such place or places as from time to time may be determined by the Board of Directors, the Chairman of the Board or the President. SECTION 5. INDEMNIFICATION OF DIRECTORS, OFFICERS AND EMPLOYEES. The Corporation shall indemnify to the full extent authorized by law any person made or threatened to be made a party to an action, suit or proceeding, whether criminal, civil, administrative or investigative, by reason of the fact that he, his testator or intestate is or was a director, officer, employee or agent of the Corporation or is or was serving, at the request of the Corporation, as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise. ARTICLE VI ---------- Amendments ---------- These By-Laws and any amendment thereof may be altered, amended or repealed, or new By-Laws may be adopted, by the Board of Directors at any regular or special meeting by the affirmative vote of a majority of all of the members of the Board, provided in the case of any special meeting at which all of the members of the Board are not present, that the notice of such meeting shall have stated that the amendment of these By-Laws was one of the purposes of the meeting; but these By-Laws and any amendment thereof, including the By-Laws adopted by the Board of Directors, may be altered, amended or repealed and other By-Laws may be adopted by the holders of a majority of the total outstanding stock of the Corporation entitled to vote at any annual meeting or at any special meeting, provided, in the case of any special meeting, that notice of such proposed alteration, amendment, repeal or adoption is included in the notice of the meeting. [Adopted by the Board of Directors on July 25, 2002] EX-10 4 tpex10.txt EXHIBIT 10 Exhibit 10 [Letterhead of Mettler-Toledo International Inc.] PERSONAL/CONFIDENTIAL Mr. Dennis W. Braun Alte Seefeldstrasse 72A 8616 Riedikon Date June 12, 2002 Reference PB/vg Direct Dial +41 1 944 22 85 Telecopier +41 1 944 22 55 EMPLOYMENT AGREEMENT between METTLER-TOLEDO INTERNATIONAL INC., and MR. DENNIS W. BRAUN, born on June 14, 1964, citizen of the USA. The parties have entered into an employment agreement on the terms and conditions set forth below: Function Chief Financial Officer (CFO) and member of the Group Management Committee (GMC) of the METTLER TOLEDO Group. Employing Company/ Mettler-Toledo International Inc., Position Location Greifensee Branch, CH-8606 Greifensee, Switzerland. If not otherwise stipulated in this agreement, the Human Resources Policy and the General Rules of Employment including Benefit Plans of METTLER TOLEDO's Swiss operations as actually valid and as may be amended from time to time apply. Remuneration BASE SALARY of CHF 360'000.-- gross per annum, payable in twelve equal monthly installments of CHF 30'000.--. Participation in the INCENTIVE PLAN POBS PLUS for Members of the Group Management of METTLER TOLEDO. The BONUS is based and calculated on the grade of target achievement at the end of the business year as follows: . 4.50% of base salary for the range of 90 - 110 target points; . 3.75% of base salary for the range of 111 - 130 target points. For business year 2002, the bonus will be pro-rated. Expenses Expense Allowance according to the "Spesenreglements- erganzung Gruppenleitung" of CHF 10'500.-- per annum, payable in twelve monthly installments of CHF 875.--. No commuting allowance will be paid. Housing Allowance METTLER TOLEDO pays a Housing Allowance of CHF 48'000.-- gross per annum, payable in twelve monthly installments of CHF 4'000.--, as a contribution towards the cost of housing in Switzerland. Schooling Costs for METTLER TOLEDO pays the schooling fees for Children Dennis W. Braun's children in the International School, Zumikon, Switzerland. Stock Options Participation in the METTLER TOLEDO Stock Option Plan as actually valid and as may be amended from time to time. Dennis W. Braun has been granted 75'000 stock options upon joining METTLER TOLEDO. Personnel Insurance Participation in the Mettler-Toledo Fonds (pension plan for the Swiss based members of the GMC). Additional Accident Insurance, Disability Insurance (coverage of salary in case of illness and accident). The premiums of these insurances are fully covered by METTLER TOLEDO. Dennis W. Braun, his spouse and children participate in the US Health Insurance Plan of Mettler-Toledo, Inc., Columbus, OH, as actually valid and as may be amended from time to time. Holidays/Home Leave 30 working days per calendar year, incl. compensation for overtime. METTLER TOLEDO provides economy return air tickets to the United States for Dennis W. Braun, his spouse and children one time per year. Relocation Expenses Travel expenses for Dennis W. Braun, his spouse and children and adequate removal costs for the household shall be paid by METTLER TOLEDO. In addition, a single lump sum of CHF 20'000.-- ("curtain money") shall be paid to cover specific expenses in connection with the establishment of a household in Switzerland. METTLER TOLEDO will also assist and bear the expenses within reasonable limits to find housing in Switzerland. METTLER TOLEDO will cover the actual expenses in connection with the sale of Dennis W. Braun's home in the US up to a max. amount of USD 30'000.--. Sign-on Bonus METTLER TOLEDO has paid Dennis W. Braun a one time sign-on bonus of USD 75'000.-- gross upon joining, to compensate for the loss of incentive and to offset a loan with his previous employer. This bonus becomes partially refundable if Dennis W. Braun leaves METTLER TOLEDO earlier than three years after the starting date (USD 50'000.-- after year one, USD 25'000.-- after year two). Non-Competition While Dennis W. Braun is employed by METTLER TOLEDO, and for a period of twelve months after the termination of his employment, Dennis W. Braun shall not knowingly engage in or be employed in any business anywhere in the world which competes with the principal businesses of METTLER TOLEDO. Taxes All taxes levied by the residence and/or home country will be fully paid by Dennis W. Braun. Duration/Notice Period This employment agreement started on March 11, 2002. It is of unlimited duration; for termination, a notice period of twelve months for both parties applies. Change of Control/ In the case of a change of control transaction Successors and a termination without cause of the employment agreement by the successors within two years from starting date, Dennis W. Braun is entitled to an additional one time lump sum payment in the amount of one yearly target salary (base salary plus bonus at 100% target achievement level). Applicable Law and This agreement shall be governed by Swiss Law. Jurisdiction All disputes concerning the terms and conditions of this agreement shall be brought before the ordinary courts in the Canton of Zurich, Switzerland. Mettler-Toledo International Inc. The Employee Robert F. Spoerry Peter Burker Chief Executive Officer Head Human Resources Dennis W. Braun EX-99 5 tpex_99.txt EXHIBIT 99 Exhibit 99 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 In connection with the Quarterly Report of Mettler-Toledo International Inc. (the "Company") on Form 10-Q for the period ending June 30, 2002 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), each of the undersigned officers of the Company does hereby certify to his knowledge, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Dated: August 14, 2002 /s/ Robert F. Spoerry Robert F. Spoerry Chief Executive Officer /s/ Dennis W. Braun Dennis W. Braun Chief Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----