-----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, BAJcaO4QemFnRAX3yCFQzcMxxL0FtZrfon6/jR6R9eGToz6XgOkTGNOQB7SeSzRl yNInjja38y9saRSWxvtCEg== 0000950110-98-000970.txt : 19980817 0000950110-98-000970.hdr.sgml : 19980817 ACCESSION NUMBER: 0000950110-98-000970 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19980814 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: WILSHIRE OIL CO OF TEXAS CENTRAL INDEX KEY: 0000107454 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 840513668 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-04673 FILM NUMBER: 98691410 BUSINESS ADDRESS: STREET 1: 921 BERGEN AVE CITY: JERSEY CITY STATE: NJ ZIP: 07306-4204 BUSINESS PHONE: 2014202796 MAIL ADDRESS: STREET 1: 921 BERGEN AVENUE STREET 2: 921 BERGEN AVENUE CITY: JERSEY CITY STATE: NJ ZIP: 07306 10-Q 1 FORM 10-Q ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 ---------- FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For quarter ended June 30, 1998 Commission file number 1-467 WILSHIRE OIL COMPANY OF TEXAS ------------------------------------------------------- (Exact name of registrants as specified in its charter) DELAWARE 84-0513668 ------------------------------- ------------------- (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 921 BERGEN AVENUE -- JERSEY CITY, NEW JERSEY 07306-4204 - -------------------------------------------- ---------- (Address of principal executive offices) (Zip Code) Registrant's telephone number -- including area code (201) 420-2796 NO CHANGE --------------------------------------------------- Former name, former address and former fiscal year, if changed since last reports. Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No --- --- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the close of the period by this report. Common Stock $1 Par Value -- 9,330,614 ================================================================================ WILSHIRE OIL COMPANY OF TEXAS INDEX Page No. -------- PART I -- FINANCIAL INFORMATION Financial Information: Condensed Consolidated Balance Sheets -- June 30, 1998 (Unaudited) and December 31, 1997 ......... 1 Consolidated Statements of Income -- (Unaudited) Six months ended June 30, 1998 and 1997 ..... 2 Consolidated Statements of Income -- (Unaudited) Three months ended June 30, 1998 and 1997 ... 3 Consolidated Statements of Cash Flows -- (Unaudited) Six months ended June 30, 1998 and 1997 ..... 4 Notes to (Unaudited) Consolidated Financial Statements .... 5 & 6 Management's Discussion and Analysis of Financial Condition and Results of Operations ........ 7, 8, & 9 PART II -- OTHER INFORMATION ........................................ 10 WILSHIRE OIL COMPANY OF TEXAS AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (000's Omitted, Except Share Data) June 30, December 31, 1998 1997 ----------- ------------ (Unaudited) ASSETS CURRENT ASSETS Cash and cash equivalents ....................... $ 4,704 $ 5,534 Accounts receivable ............................. 822 1,061 Marketable securities, stated at market value ................................. 11,242 17,947 Prepaid expenses and other current assets ....... 1,291 949 -------- -------- Total current assets ..................... 18,059 25,491 -------- -------- PROPERTY AND EQUIPMENT Oil and gas properties, using the full cost method of accounting ............... 135,933 133,509 Real estate properties .......................... 55,608 50,901 Other property and equipment .................... 386 421 -------- -------- 191,927 184,831 Less -- Accumulated depreciation, depletion and amortization .............. 110,279 108,293 -------- -------- 81,648 76,538 -------- -------- $ 99,707 $102,029 ======== -------- LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Current portion of long-term debt ............... $ 3,500 $ 3,324 Accounts payable ................................ 1,431 1,856 Accrued and other liabilities ................... 1,633 3,110 -------- -------- Total current liabilities ................ 6,564 8,290 -------- -------- LONG-TERM DEBT, less current portion .............. 51,462 51,587 -------- -------- DEFERRED INCOME TAXES AND OTHER NONCURRENT LIABILITIES ......................... 12,420 13,415 -------- -------- SHAREHOLDERS' EQUITY Common stock, $1 par value, 15,000,000 shares authorized; 10,013,544 shares issued .................... 10,014 10,014 Capital in excess of par value ................. 9,788 9,522 Unrealized gain on marketable securities of $1,330 in 1998 and $2,943 in 1997, net of related income taxes ........ 732 1,619 Retained earnings .............................. 16,111 14,267 -------- -------- 36,645 35,422 Less -- Treasury stock, 682,930 and 888,724 shares in 1998 and 1997, at cost .... 4,261 3,857 Cumulative translation adjustment ..... 3,123 2,828 -------- -------- 29,261 28,737 -------- -------- $ 99,707 $102,029 ======== ======== 1 WILSHIRE OIL COMPANY OF TEXAS AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (000's Omitted, Except Share Data) (Unaudited) FOR THE SIX MONTHS ENDED ------------------------ June 30, June 30, 1998 1997 ------- ------- REVENUES Oil & Gas ........................................ $ 2,533 $ 2,842 Real Estate ...................................... 5,622 4,791 ------- ------- Total Revenues .......................... 8,155 7,633 COSTS AND EXPENSES Oil and Gas Production Expenses .................. 1,210 1,184 Real Estate Operating Expenses ................... 3,362 2,725 Depreciation, depletion and amortization ......... 1,986 2,115 General and Administrative ....................... 754 806 ------- ------- Total Costs and Expenses ................ 7,312 6,830 ------- ------- Income from Operations .................. 843 803 OTHER INCOME ..................................... 379 370 GAIN ON SALES OF MARKETABLE SECURITIES (Note 3) ........................... 3,543 6,001 INTEREST EXPENSE ................................. (1,989) (1,819) ------- ------- Income before provision for income taxes ........................... 2,776 5,355 PROVISION FOR INCOME TAXES ....................... 932 1,873 ------- ------- Net income ................................. $ 1,844 $ 3,482 ======= ======= BASIC EARNINGS PER SHARE ......................... $ .20 $ .36 ======= ======= DILUTED EARNINGS PER SHARE ....................... $ .20 $ .36 ======= ======= 2 WILSHIRE OIL COMPANY OF TEXAS AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (000's Omitted, Except Share Data) (Unaudited) FOR THE THREE MONTHS ENDED ------------------------- June 30, June 30, 1998 1997 ------- -------- REVENUES Oil & Gas ........................................ $ 1,207 $ 1,422 Real Estate ...................................... 2,895 2,450 ------- ------- Total Revenues .......................... 4,102 3,872 COSTS AND EXPENSES Oil and Gas Production Expenses .................. 617 601 Real Estate Operating Expenses ................... 1,754 1,401 Depreciation, depletion and amortization ......... 1,135 1,272 General and Administrative ....................... 356 437 ------- ------- Total Costs and Expenses ................ 3,862 3,711 ------- ------- Income from Operations ......... 240 161 OTHER INCOME ..................................... 256 180 GAIN ON SALES OF MARKETABLE SECURITIES (Note 3) ........................... 2,048 3,312 INTEREST EXPENSE ................................. (953) (896) ------- ------- Income before provision for income taxes ........................... 1,591 2,757 PROVISION FOR INCOME TAXES ....................... 527 991 ------- ------- Net income ................................ $ 1,064 $ 1,766 ======= ======= BASIC EARNINGS PER SHARE ......................... $ .11 $ .19 ======= ======= DILUTED EARNINGS PER SHARE ....................... $ .11 $ .18 ======= ======= 3 WILSHIRE OIL COMPANY OF TEXAS AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (000's Omitted) (Unaudited) For The Six Months Ended ------------------------ June 30, June 30, 1998 1997 -------- -------- CASH FLOWS FROM OPERATING ACTIVITIES Net Income ........................................... $ 1,844 $ 3,482 Adjustments to reconcile net income to net cash used in operating activities -- Depreciation, depletion and amortization ............. 1,986 2,115 Deferred income tax provision (benefit) .............. (269) 244 Amortization (adjustment) of deferred and unearned compensation in connection with non-qualified stock option plan, net ........ 266 (20) Gain on sales of marketable securities ............... (3,543) (6,001) Foreign currency transactions ........................ -- -- Changes in operating assets and liabilities -- (Increase) decrease in receivables .................. 239 643 (Increase) in prepaid expenses and other current assets ................................... (342) (233) Increase (decrease) in accounts payable, accrued and other liabilities .................... (1,902) 182 -------- -------- Net cash provided by (used in) operating activities ............................. $ (1,721) $ 412 -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES Capital expenditures, net ............................ (7,096) (2,730) Purchases of marketable securities ................... (1,914) (344) Proceeds from sales and redemptions of securities ... 10,549 8,053 -------- -------- Net cash provided by (used in) investing activities ............................. $ 1,539 $ 4,979 -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issuance of long term debt ............ 5,650 1,615 Principal payment of long term debt ................. (5,599) (7,149) Purchase of treasury stock .......................... (404) -- Exercise of stock options ........................... -- 108 Other ............................................... -- -- -------- -------- Net cash provided by (used in) financing activities ............................. $ (353) $ (5,426) -------- -------- EFFECT OF EXCHANGE RATE CHANGES ON CASH ................ (295) (198) -------- -------- Net increase (decrease) in cash and cash equivalents ................................. (830) (233) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD ................................. 5,534 1,192 -------- -------- CASH AND CASH EQUIVALENTS AT END OF PERIOD ....................................... $ 4,704 $ 959 ======== ======== SUPPLEMENTAL DISCLOSURES TO THE STATEMENTS OF CASH FLOWS: Cash paid during the period for -- Interest ............................................ $ 1,956 $ 1,790 Income taxes ........................................ $ 1,256 $ 1,231 4 WILSHIRE OIL COMPANY OF TEXAS NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS June 30, 1998 (Unaudited) 1. FINANCIAL STATEMENTS The condensed consolidated financial statements included herein have been prepared by the Registrant, 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, although the Registrant believes that the disclosures are adequate to make the information presented not misleading. It is suggested that these condensed consolidated financial statements be read in conjunction with the financial statements and the notes thereto included in the Company's latest annual report on Form 10-K. This condensed financial information reflects, in the opinion of management, all adjustments necessary to present fairly the results for the interim periods. All such adjustments are of a normal recurring nature. The results of operations for such interim periods are not necessarily indicative of the results for the full year. 2. DESCRIPTION OF BUSINESS: Wilshire Oil Company of Texas is a diversified corporation engaged in oil and gas exploration and production and real estate operations. The Company's oil and gas operations are conducted both in its own name and through several wholly-owned subsidiaries in the United States and Canada. Crude oil and natural gas productions are sold to oil refineries and natural gas pipeline companies. The Company's real estate holdings are located in the states of Arizona, Florida, New Jersey, Texas and Georgia. The Company also maintains investments in marketable securities. 3. GAIN ON SALES OF MARKETABLE SECURITIES The Company realized gains from the sales of marketable securities of $3,543,000 and $6,001,000 for the six months ended June 30, 1998 and 1997, respectively, and $2,048,000 and $3,312,000 for the three months ended June 30, 1998 and June 30, 1997, respectively. 4. COMPREHENSIVE INCOME Effective January 1, 1998, the Company adopted the provisions of Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive Income," which modifies the financial statement presentation of comprehensive income and its components. Reclassification of financial statements for earlier periods is required. 5 Comprehensive income, representing all changes in shareholders' equity during the period, other than changes resulting from the Company's common stock, for the six months ended June 30, 1998 and 1997 is as follows: Six Months Ended June 30, ----------------------- 1998 1997 ---------- ---------- Net income ............................................ $1,844,000 $3,482,000 Other comprehensive income (loss), net of taxes Foreign currency translation adjustments ............ (295,000) (198,000) Unrealized gain on available-for-sale securities .... 1,451,000 2,260,000 Less: Reclassification adjustment for gains included in net income, net of income tax effect of $1,205,000 and $2,040,000 in 1998 and 1997, respectively ................... (2,338,000) (3,961,000) ---------- --------- Other comprehensive income (loss) ..................... (1,182,000) (1,899,000) ---------- --------- Comprehensive income .................................. $ 662,000 $1,583,000 ========== ========== 5. EARNINGS PER SHARE In 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 128, "Earnings per Share" (SFAS No. 128), which requires presentation in the Consolidated Statement of Income of both basic and diluted earnings per share. Earnings per share amounts have been presented, and where appropriate, restated to conform to the SFAS No. 128 requirements. The following table sets forth the computation of basic and diluted earnings per share --
Six Months Ended June 30, Three Months Ended June 30, --------------------------- -------------------------- 1998 1997 1998 1997 ---------- ---------- ----------- ---------- Numerator-- Net income ............................ $1,844,000 $3,482,000 $1,064,000 $1,766,000 ========== ========== ========== ========== Denominator-- Weighted average common shares outstanding -- Basic ................ 9,366,087 9,542,139 9,383,830 9,543,357 Incremental shares from assumed conversions of stock options ........ 81,746 69,573 88,747 70,591 ---------- ---------- ---------- ---------- Weighted average common shares outstanding -- Diluted .............. 9,447,833 9,611,712 9,472,577 9,613,948 ========== ========== ========== ========== Basic earnings per share ................ $0.20 $0.36 $0.11 $0.19 Diluted earnings per share .............. $0.20 $0.36 $0.11 $0.18
6 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS Net income for the six months ended June 30 was $1,844,000 in 1998 as compared to $3,482,000 in 1997. Consolidated revenues for the six months ended June 30 increased from $7,633,000 in 1997 to $8,155,000 in 1998. Oil and gas revenues decreased from $2,842,000 in 1997 to $2,533,000 in 1998, due to declines in the price of crude oil. Real estate revenues increased from $4,791,000 in 1997 to $5,622,000 in 1998. This increase is due to higher rents and the operations of the properties acquired in 1997 and 1998. Total costs and expenses for the six months ended June 30 were $7,312,000 in 1998 compared with $6,830,000 in 1997. Oil and gas production expense increased by $26,000, real estate operating expenses increased by $637,000, depreciation, depletion and amortization decreased by $129,000, and general and administrative expenses decreased by $52,000. The increase in real estate operating expenses is attributable to the properties acquired in 1997 and 1998. Gain on sales of marketable securities was $3,543,000 in 1998 as compared with $6,001,000 in 1997. The Company realized $2.5 million less in gains in 1998 than in 1997. Interest expense was $1,989,000 in the first six months of 1998 as compared with $1,819,000 in 1997. This increase in interest expense is attributable to new first-mortgage indebtness associated with the Company's real estate acquisitions during the past twelve months. The provision for income taxes includes Federal, state and Canadian taxes. Differences between the effective tax rate and the statutory income tax rates are principally due to foreign resource tax credits in Canada and the dividend exclusion in the United States. 7 LIQUIDITY AND CAPITAL RESOURCES At June 30, 1998 the Company had approximately $9.9 million in marketable securities at cost, with a market value of approximately $11.2 million. The current ratio at June 30, 1998 was 2.75 to 1, which management considers adequate for the Company's current business. The Company's working capital was approximately $11.5 million at June 30, 1998. The Company anticipates that cash provided by operating activities and investing activities will be sufficient to meet its capital requirements to acquire oil and gas properties and to drill and evaluate these and other oil and gas properties presently held by the Company. The level of oil and gas capital expenditures will vary in future periods depending on market conditions, including the price of oil and the demand for natural gas, and other related factors. As the Company has no material long-term commitments with respect to its oil and gas capital expenditure plans, the Company has a significant degree of flexibility to adjust the level of its expenditures as circumstances warrant. The Company plans to actively continue its exploration and production activities as well as search for the acquisition of oil and gas producing properties and of companies with desirable oil and gas producing properties. There can be no assurance that the Company will in fact locate any such acquisitions. During the six months ended June 30, 1998, the Company acquired two real estate properties from The Trust Company of New Jersey ("TCNJ") at an aggregate purchase price of approximately $4.4 million. These transactions were financed by first-mortgage loans from TCNJ. The Company will explore other real estate acquisitions as they arise. The timing of any such acquisition will depend on, among other things, economic conditions and the favorable evaluation of specific opportunities presented to the Company. The Company is currently planning further acquisitions of investment properties during the next year. Accordingly, while the Company anticipates that it will actively explore these and other real estate acquisition opportunities, no assurance can be given that any such acquisition will occur. Net cash provided by (used in) operating activities was ($1,721,000) in 1998 and $412,000 in 1997. The decrease in 1998 was primarily due to changes in operating assets and liabilities. Net cash provided by (used in) investing activities was $1,539,000 in 1998 and $4,979,000 in 1997. The variations principally relate to purchases of real estate properties and transactions in securities. Purchases of real estate properties amounted to $4,400,000 in 1998 and $1,900,000 in 1997. Proceeds from sales and redemptions of securities amounted to $10,549,000 in 1998 and $8,053,000 in 1997. Included in these amounts are redemptions, at par, of preferred stock of TCNJ, aggregating $1,500,000 in 1998 and $750,000 in 1997. 8 Net cash provided by (used in) financing activities was ($353,000) in 1998 and ($5,426,000) in 1997. The variation principally relates to the issuance of long-term debt in connection with the purchases of real estate properties during the respective quarters as well as principal payments of long-term debt. The Company believes it has adequate capital resources to fund operations for the foreseeable future. "YEAR 2000 ISSUE" The Company continues to evaluate what effects, if any, Year 2000 issues may have on its operations. At present, the Company does not believe such issues will have any material adverse effect in its operations, liquidity or on its consolidated financial statements. FOWARD-LOOKING STATEMENTS This Report on Form 10-Q for the quarter ended June 30, 1998 contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements included herein other than statements of historical fact are forward-looking statements. Although the Company believes that the underlying assumptions and expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. The Company's business and prospects are subject to a number of risks which could cause actual results to differ materially from those reflected in such forward-looking statements, including volatility of oil & gas prices, the need to develop and replace reserves, risks involved in exploration and drilling, uncertainties about estimates of reserves, environmental risks relating to the Company's oil & gas and real estate properties, competition, the substantial capital expenditures required to fund the Company's oil & gas and real estate operations, market and economic changes in areas where the Company holds real estate properties, interest rate fluctuations, government regulation, and the ability of the Company to implement its business strategy. 9 PART II -- OTHER INFORMATION Item 6 -- Exhibits and Reports on Form 8-K - --------- -------------------------------- (a) Exhibits 3.2 Bylaws of the Company, as amended and restated June 11, 1998 27.1 Financial Data Schedule (b) No Form 8-K was filed during the quarter ended June 30, 1998. 10 S I G N A T U R E S Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. WILSHIRE OIL COMPANY OF TEXAS (Registrant) Date: August 13, 1998 By: /s/ S. WILZIG IZAK ----------------------------------- S. Wilzig Izak Chairman of the Board and Chief Executive Officer (Duly Authorized Officer and Chief Financial Officer) EX-3 2 BY-LAWS ================================================================================ WILSHIRE OIL COMPANY OF TEXAS ---------- BY-LAWS ---------- AS AMENDED AND RESTATED THROUGH JUNE 11, 1998 ================================================================================ WILSHIRE OIL COMPANY OF TEXAS BY-LAWS ARTICLE I. Stockholders. Section 1. The Annual Meeting of the Stockholders of the Corporation shall be held each year, on such date, at such time and at such place, either within or without the State of Delaware, as may be designated by the Board of Directors, from time to time, and stated in the Notice of the Meeting, for the purpose of electing Directors and transacting such other business as may properly be brought before the meeting. Section 2. Special meetings of the stockholders may be held upon call of the Board of Directors or the Executive Committee, if any, or the Chairman of the Board, if any, or the President, at such time and at such place within or without the State of Delaware as may be stated in the call and notice. Section 3. Except as otherwise herein provided, notice of the time and place of every meeting of the stockholders shall be delivered personally or mailed at least ten days previous thereto to each stockholder of record entitled to vote at the meeting, at the address furnished by him to the Corporation or its Transfer Agent. Such further notice shall be given as may be required by law. Any meeting may be held without notice if notice thereof is waived, whether before or after such meeting, by all of the stockholders entitled to vote thereat. Section 4. At every meeting of the stockholders the holders of record of a majority of the outstanding shares of stock of the Corporation, entitled to vote at the meeting, whether present in person or represented by proxy, shall, except as otherwise provided by law, or by the Certificate of Incorporation, constitute a quorum. If at any meeting there shall be no quorum, the holders of record, entitled to vote, of a majority of such shares of stock so present or represented may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall have been obtained, when any business may be transacted which might have been transacted at the meeting as first convened had there been a quorum. Section 5. Unless otherwise provided in the Certificate of Incorporation of the Corporation, meetings of the stockholders shall be presided over by the Chairman of the Board, if any, or the President or, if neither is present, by a person selected by the Board of Directors, or if no selection is made, by a Chairman to be chosen at the meeting. The Secretary of the Corporation or, if he is not present, an Assistant Secretary of the Corporation, if present, shall act as Secretary of the meeting, but if no such officer is present a Secretary shall be chosen at the meeting. The order of business at each such meeting shall be as determined by the chairman of the meeting. The chairman of the meeting shall have the right and authority to prescribe such rules, regulations and procedures and to do all such acts and things as are necessary or desirable for the proper conduct of the meeting, including, without limitation, the establishment of procedures for the maintenance of order and safety, limitations on the time allocated to questions or comments on the affairs of the Corporation, restrictions on entry to such meeting after the time prescribed for the commencement thereof and the opening and closing of the voting polls. Section 6. Each stockholder entitled to vote at any meeting shall have one vote in person or by proxy for each share of stock held by him which has voting power upon the matter in question at the time, but no proxy shall be voted on after three years from its date, unless such proxy provides for a longer period, and, except when the stock transfer books of the Corporation shall have been closed or a date shall have been fixed in advance as a record date for the determination of stockholders entitled to vote, as hereinafter provided, no share of stock shall be voted on at any election for directors which shall have been transferred on the books of the Corporation within twenty days next preceding such election of directors. Section 7. The Board of Directors shall have power to close the stock transfer books of the Corporation for a period not exceeding sixty days preceding the date of any meeting of stockholders or the date for payment of any dividend or the date for the allotment of rights or the date when any change or conversion or exchange of stock shall go into effect or for a period of not exceeding sixty days in connection with obtaining the consent of stockholders for any purpose; provided, however, that in lieu of closing the stock transfer books as aforesaid, the Board of Directors may fix in advance a date, not exceeding sixty days preceding the date of any meeting of stockholders, or the date for the payment of any dividend, or the date for the allotment of rights, or the date when any change or conversion or exchange of stock shall go into effect, or a date in connection with obtaining such consent, as a record date for the determination of the stockholders entitled to notice of, and to vote at, any such meeting and any adjournment thereof, or entitled to receive payment of any such dividend, or to any such allotment of rights, or to exercise the rights in respect of any such change, conversion or exchange of stock, or to give such consent, and in such case such stockholders and only such stockholders as shall be stockholders of record on the date so fixed shall be entitled to such notice of, and to vote at, such meeting and any adjournment thereof, or to receive payment of such dividend, or to receive such allotment of rights, or to exercise such rights, or to give such consent, as the case may be, notwithstanding any transfer of any stock on the books of the Corporation after any such record date fixed as aforesaid. Section 8. The provisions of this Article I, and of these By-Laws, are subject to the provisions of the Certificate of Incorporation of the Corporation, as from time to time amended, and in the case of any inconsistency between the provisions of these By-Laws and of the Certificate of Incorporation the Certificate of Incorporation shall govern and such inconsistency shall be resolved so as to carry into effect the intent and purposes of the provisions of the Certificate of Incorporation. -2- Section 9. Advance Notice of Stockholder Proposals. At any annual or special meeting of stockholders, proposals by stockholders and persons nominated for election as directors by stockholders shall be considered only if advance notice thereof has been timely given as provided herein and such proposals or nominations are otherwise proper for consideration under applicable law and the certificate of incorporation and by-laws of the Corporation. Notice of any proposal to be presented by any stockholder or of the name of any person to be nominated by any stockholder for election as a director of the Corporation at any meeting of stockholders shall be delivered to the Secretary of the Corporation at its principal executive office not less than 60 nor more than 90 days prior to the date of the meeting; provided, however, that if the date of the meeting is first publicly announced or disclosed (in a public filing or otherwise) less than 70 days prior to the date of the meeting, such advance notice shall be given not more than ten days after such date is first so announced or disclosed. Public notice shall be deemed to have been given more than 70 days in advance of the annual meeting if the Corporation shall have previously disclosed, in these by-laws or otherwise, that the annual meeting in each year is to be held on a determinable date, unless and until the Board determines to hold the meeting on a different date. Any stockholder who gives notice of any such proposal shall deliver therewith the text of the proposal to be presented and a brief written statement of the reasons why such stockholder favors the proposal and setting forth such stockholder's name and address, the number and class of all shares of each class of stock of the Corporation beneficially owned by such stockholder and any material interest of such stockholder in the proposal (other than as a stockholder). Any stockholder desiring to nominate any person for election as a director of the Corporation shall deliver with such notice a statement in writing setting forth the name of the person to be nominated, the number and class of all shares of each class of stock of the Corporation beneficially owned by such person, the information regarding such person required by paragraphs (a), (e) and (f) of Item 401 of Regulation S-K adopted by the Securities and Exchange Commission (or the corresponding provisions of any regulation subsequently adopted by the Securities and Exchange Commission applicable to the Corporation), such person's signed consent to serve as a director of the Corporation if elected, such stockholder's name and address and the number and class of all shares of each class of stock of the Corporation beneficially owned by such stockholder. As used herein, shares "beneficially owned" shall mean all shares as to which such person, together with such person's affiliates and associates (as defined in Rule 12b-2 under the Securities Exchange Act of 1934), may be deemed to beneficially own pursuant to Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, as well as all shares as to which such person, together with such person's affiliates and associates, has the right to become the beneficial owner pursuant to any agreement or understanding, or upon the exercise of warrants, options or rights to convert or exchange (whether such rights are exercisable immediately or only after the passage of time or the occurrence of conditions). The person presiding at the meeting, in addition to making any other determinations that may be appropriate to the conduct of the meeting, shall determine whether such notice has been duly given and shall direct that proposals and nominees not be considered if such notice has not been given. Section 10. Inspectors. Prior to any meeting of stockholders, the Board of Directors or the Chief Executive Officer shall appoint one or more inspectors to act at such meeting and make a written report thereof and may designate one or more persons as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is able to act at -3- the meeting of stockholders, the person presiding at the meeting shall appoint one or more inspectors to act at the meeting. Each inspector, before entering upon the discharge of his or her duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of his or her ability. The inspectors shall ascertain the number of shares outstanding and the voting power of each, determine the shares represented at the meeting and the validity of proxies and ballots, count all votes and ballots, determine and retain for a reasonable period a record of the disposition of any challenges made to any determination by the inspectors and certify their determination of the number of shares represented at the meeting and their count of all votes and ballots. The inspectors may appoint or retain other persons to assist them in the performance of their duties. The date and time of the opening and closing of the polls for each matter upon which the stockholders will vote at a meeting shall be announced at the meeting. No ballot, proxy or vote, nor any revocation thereof or change thereto, shall be accepted by the inspectors after the closing of the polls. In determining the validity and counting of proxies and ballots, the inspectors shall be limited to an examination of the proxies, any envelopes submitted therewith, any information provided by a stockholder who submits a proxy by telegram, cablegram or other electronic transmission from which it can be determined that the proxy was authorized by the stockholder, ballots and the regular books and records of the corporation, and they may also consider other reliable information for the limited purpose of reconciling proxies and ballots submitted by or on behalf of banks, brokers, their nominees or similar persons which represent more votes than the holder of a proxy is authorized by the record holder owner to cast or more votes than the stockholder holds of record. If the inspectors consider other reliable information for such purpose, they shall, at the time they make their certification, specify the precise information considered by them, including the person or persons from whom they obtained the information, when the information was obtained, the means by which the information was obtained and the basis for the inspectors' belief that such information is accurate and reliable. ARTICLE II. Board of Directors. Section 1. The Board of Directors of the Corporation shall consist of seven persons. Directors shall hold office until the third Annual Meeting of Stockholders next succeeding their election, or until their successors shall have been elected and shall have qualified. A majority of the Directors then in office shall constitute a quorum present. The Directors present may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall have been obtained, at which time any business may be transacted which might have been transacted at the meeting as first convened had there been a quorum. Whenever any vacancy shall have occurred in the Board of Directors by death, resignation or otherwise, or the number of Directors shall be increased by amendment of this Section, such vacancy may be filled, or the additional directors may be elected, by the vote of a majority of the directors then in office. -4- Section 2. Meetings of the Board of Directors shall be held at such place within or without the State of Delaware as may from time to time be fixed by resolution of the Board or as may be specified in the call of any meeting. Regular meetings of the Board shall be held at such time as may from time to time be fixed by resolution of the Board, and notice of such meetings need not be given. Special meetings of the Board may be held at any time upon call of the Chairman of the Board, if any, or the President, by oral, telegraphic or written notice, duly served on or given, sent or mailed to each director not less than two days before any such meeting. A meeting of the Board may be held without notice immediately after the annual meeting of the stockholders at the same place at which such meeting is held. Meetings may be held at any time without notice if all the directors are present or if those not present waive notice of the meeting in writing or by telegram, before or after any such meeting. Directors and members of committees shall be reimbursed for their necessary traveling expenses incurred in attending meetings of the Board or such committees and shall be paid such reasonable fees for their attendance as the Board of Directors may fix. ARTICLE III. Officers. Section 1. The Board of Directors, as soon as may be after the election of directors held in each year, shall elect from their number a Chairman of the Corporation, and shall also elect one or more Senior Vice-Presidents, Vice-Presidents, a Secretary and Treasurer, and from time to time may appoint such Assistant Vice-Presidents, Assistant Secretaries, Assistant Treasurers and other officers, agents and employees as it may deem proper. The Board of Directors may also elect a President of the Company. Any two offices may be held by the same person; and more than two offices, other than the offices of President and Secretary, may be held by the same person. Section 2. The term of office of all officers shall be one year, or until their respective successors are chosen and qualified; but any officer may be removed from office at any time by the affirmative vote of a majority of the members of the whole Board. Section 3. Subject to such limitations as the Board of Directors may from time to time prescribe, the officers of the Corporation shall each have such powers and duties as from time to time may be conferred by the Board of Directors. The Board of Directors may require the Treasurer, the Assistant Treasurers and any other officers, agents or employees of the Corporation to give bond for the faithful discharge of their duties, in such sum and of such character as the Board may from time to time prescribe. Section 4. The Chairman of the Board, if any, or in his absence or inability to act, the President, shall have the power to vote or give a proxy for the voting of all shares of stock of -5- any corporation owned by the Corporation at any meeting of the stockholders of any such corporation. ARTICLE IV. Certificates of Stock. Section 1. The interest of each stockholder in the Corporation shall be evidenced by a certificate or certificates for shares of stock of the Corporation, in such form as the Board of Directors may from time to time prescribe. The certificates for shares of stock of the Corporation shall be signed by the President or a Vice-President and by the Secretary or the Treasurer or an Assistant Secretary or an Assistant Treasurer, and shall be countersigned and registered in such manner, if any, as the Board may by resolution prescribe; provided, however, that, in case such certificates are required by such resolution to be signed by a transfer agent or an assistant transfer agent or by a transfer clerk acting on behalf of the Corporation and by a registrar, the signatures of any such President, Vice-President, Treasurer, Assistant Treasurer, Secretary or Assistant Secretary may be facsimile. Section 2. The shares of stock of the Corporation shall be transferable on the books of the Corporation by the holders thereof in person or by duly authorized attorney, upon surrender for cancellation of certificates for a like number of shares of the same class of stock, with duly executed assignment and power of transfer endorsed thereon or attached thereto, and with such proof of the authenticity of the signatures as the Corporation or its agent may reasonably require. Section 3. No certificate for shares of stock of the Corporation shall be issued in place of any certificate alleged to have been lost, stolen or destroyed, except upon production of such evidence of the loss, theft or destruction and upon indemnification of the Corporation and its agents to such extent and in such manner as the Board of Directors may from time to time prescribe. ARTICLE V. Checks, Notes, Etc. All checks and drafts on the Corporation's bank accounts and all bills of exchange and promissory notes, and all acceptances, obligations and other instruments for the payment of money, shall be signed by such officer or officers or agent or agents as shall be thereunto authorized from time to time by the Board of Directors. -6- ARTICLE VI. Fiscal Year. The fiscal year of the Corporation shall be as determined by resolution of the Board of Directors. ARTICLE VII. Corporate Seal. The corporate seal shall have inscribed thereon the name of the Corporation and the year of its incorporation, and shall be in such form as may be approved by the Board of Directors, which shall have power to alter the same at pleasure. ARTICLE VIII. Offices. The Corporation and the stockholders and the directors may have offices outside of the State of Delaware, at such places as shall be determined from time to time by the Board of Directors. ARTICLE IX. Amendments. The By-Laws of the Corporation may be altered, amended, added to or repealed at any meeting of the Board of Directors, by the affirmative vote of a majority of the total number of directors, if notice of the proposed change is given in the notice of the meeting or if all of the directors are present at the meeting, or if all directors not present at the meeting assent in writing to such change; PROVIDED, however, that no change of the time or place for the annual meeting of the stockholders for the election of directors shall be made except in accordance with the laws of the State of Delaware. By-Laws made by the directors may be altered or repealed by the stockholders having voting power, or by the directors. -7- EX-27 3 FDS
5 6-MOS DEC-31-1998 JUN-30-1998 4,704,000 11,242,000 822,000 0 0 18,059,000 191,927,000 110,279,000 99,707,000 6,564,000 0 0 0 10,014,000 19,247,000 99,707,000 2,533,000 8,155,000 1,210,000 7,312,000 0 0 1,989,000 2,776,000 932,000 1,844,000 0 0 0 1,844,000 .20 .20
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