-----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, VxQk0RhINCx9SzifUmCMfYIis3GZy5f3HYqdVZTiRV8cF0b4vo90ajnFFdWl5hxt izQneURvh0ZqaWPXP9Le4Q== 0000950123-98-007248.txt : 19980810 0000950123-98-007248.hdr.sgml : 19980810 ACCESSION NUMBER: 0000950123-98-007248 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19980807 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: HUBBELL INC CENTRAL INDEX KEY: 0000048898 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC LIGHTING & WIRING EQUIPMENT [3640] IRS NUMBER: 060397030 STATE OF INCORPORATION: CT FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-02958 FILM NUMBER: 98679374 BUSINESS ADDRESS: STREET 1: 584 DERBY MILFORD RD CITY: ORANGE STATE: CT ZIP: 06477-4024 BUSINESS PHONE: 2037994100 MAIL ADDRESS: STREET 1: 584 DERBY MILFORD RD STREET 2: 584 DERBY MILFORD RD CITY: ORANGE STATE: CT ZIP: 06477-4024 FORMER COMPANY: FORMER CONFORMED NAME: HUBBELL HARVEY INC DATE OF NAME CHANGE: 19860716 10-Q 1 HUBBELL INCORPORATED 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10Q /X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended JUNE 30, 1998 ------------- / / 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 1-2958 ------ HUBBELL INCORPORATED - ------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) STATE OF CONNECTICUT 06-0397030 - ------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 584 DERBY MILFORD ROAD, ORANGE, CT 06477 - ------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (203) 799-4100 - ------------------------------------------------------------------------------- (Registrant's telephone number, including area code) N/A - ------------------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report.) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES /X/ NO / / The number of shares of registrant's classes of common stock outstanding as of August 3, 1998 were: Class A ($.01 par value) 10,941,000 Class B ($.01 par value) 54,998,000 2 HUBBELL INCORPORATED PART I - FINANCIAL INFORMATION ITEM 1 FINANCIAL STATEMENTS CONSOLIDATED BALANCE SHEET (UNAUDITED) (IN THOUSANDS)
June 30, 1998 December 31, 1997 ------------- ----------------- ASSETS Current Assets: Cash and temporary cash investments $ 57,811 $ 75,217 Accounts receivable (net) 207,321 191,027 Inventories 297,070 275,886 Prepaid taxes 28,156 30,179 Other 6,450 23,864 ---------- ---------- TOTAL CURRENT ASSETS 596,808 596,173 Property, Plant and Equipment (net) 276,782 251,933 Other Assets: Investments 212,078 205,578 Purchase price in excess of net assets of companies acquired (net) 193,410 190,514 Property held as investment 12,260 11,249 Other 29,404 29,337 ---------- ---------- $1,320,742 $1,284,784 ========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Commercial paper and notes $ 58,000 $ 250 Accounts payable 68,376 60,909 Accrued salaries, wages and employee benefits 36,962 34,069 Accrued income taxes 33,687 38,338 Dividends payable 20,509 19,483 Accrued consolidation and streamlining charge 14,000 14,000 Other accrued liabilities 78,596 89,252 ---------- ---------- TOTAL CURRENT LIABILITIES 310,130 256,301 Long-Term Debt 99,551 99,519 Other Non-Current Liabilities 95,813 95,810 Deferred Income Taxes 1,993 2,898 Shareholders' Equity 813,255 830,256 ---------- ---------- $1,320,742 $1,284,784 ========== ==========
See notes to consolidated financial statements 2 3 HUBBELL INCORPORATED CONSOLIDATED STATEMENT OF INCOME (UNAUDITED) (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
THREE MONTHS ENDED SIX MONTHS ENDED JUNE 30 JUNE 30 -------------------------- -------------------------- 1998 1997 1998 1997 --------- --------- --------- --------- NET SALES $ 372,480 $ 352,898 $ 712,221 $ 677,595 Cost of goods sold 256,133 241,680 491,424 466,301 --------- --------- --------- --------- GROSS PROFIT 116,347 111,218 220,797 211,294 Selling & administrative expenses 56,205 53,659 107,527 103,754 --------- --------- --------- --------- OPERATING INCOME 60,142 57,559 113,270 107,540 --------- --------- --------- --------- OTHER INCOME (EXPENSE): Investment income 4,072 4,313 8,175 8,841 Interest expense (2,623) (1,785) (4,336) (3,583) Other income (expense), net (698) (923) (1,199) (1,778) --------- --------- --------- --------- TOTAL OTHER INCOME, NET 751 1,605 2,640 3,480 --------- --------- --------- --------- INCOME BEFORE INCOME TAXES 60,893 59,164 115,910 111,020 Provision for income taxes 16,745 17,749 31,875 33,306 --------- --------- --------- --------- NET INCOME $ 44,148 $ 41,415 $ 84,035 $ 77,714 ========= ========= ========= ========= EARNINGS PER SHARE - BASIC $ 0.67 $ 0.62 $ 1.26 $ 1.16 ========= ========= ========= ========= EARNINGS PER SHARE - DILUTED $ 0.65 $ 0.60 $ 1.23 $ 1.13 ========= ========= ========= =========
See notes to consolidated financial statements. 3 4 HUBBELL INCORPORATED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) (IN THOUSANDS)
SIX MONTHS ENDED JUNE 30 CASH FLOWS FROM OPERATING ACTIVITIES 1998 1997 -------- --------- Net income $ 84,035 $ 77,714 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 25,942 25,039 Deferred income taxes 1,034 2,353 Expenditures for streamlining and consolidation (1,573) (5,927) Changes in assets and liabilities, net of the effect of business acquisitions: (Increase)/Decrease in accounts receivable (15,554) (14,170) (Increase)/Decrease in inventories (6,504) (11,825) (Increase)/Decrease in other current assets 17,442 3,106 Increase/(Decrease) in current operating liabilities (16,148) (15,582) (Increase)/Decrease in other, net 652 2,559 -------- --------- Net cash provided by operating activities 89,326 63,267 -------- --------- CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of businesses (20,498) (3,077) Additions to property, plant and equipment (44,076) (24,802) Purchases of investments (17,493) (4,296) Repayments and sales of investments 10,993 7,980 Other, net 2,114 (30) -------- --------- Net cash used in investing activities (68,960) (24,225) -------- --------- CASH FLOWS FROM FINANCING ACTIVITIES Payment of dividends (38,910) (34,653) Commercial paper and notes - borrowings (repayments) 57,750 (15,685) Exercise of stock options 4,295 1,926 Acquisition of treasury shares (60,907) (7,540) -------- --------- Net cash provided (used) in financing activities (37,772) (55,952) -------- --------- Increase (Decrease) in cash and temporary cash investments (17,406) (16,910) CASH AND TEMPORARY CASH INVESTMENTS Beginning of period 75,217 134,397 -------- --------- End of period $ 57,811 $ 117,487 ======== =========
See notes to consolidated financial statements 4 5 HUBBELL INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 1998 (UNAUDITED) 1. Inventories are classified as follows: (in thousands)
JUNE 30, DECEMBER 31, 1998 1997 -------- -------- Raw Material $101,746 $ 96,455 Work-in-Process 84,918 74,284 Finished Goods 154,652 148,939 -------- -------- 341,316 319,678 Excess of current Production costs over LIFO cost basis 44,246 43,792 -------- -------- $297,070 $275,886 ======== ========
2. Shareholders' Equity comprises: (in thousands)
JUNE 30, DECEMBER 31, 1998 1997 --------- --------- Common Stock, $.01 par value: Class A-authorized 50,000,000 shares, outstanding 10,968,921 and 11,146,062 shares $ 110 $ 111 Class B-authorized 150,000,000 shares outstanding 55,052,671 and 55,880,945 shares 551 559 Additional paid-in-capital 413,619 472,729 Retained earnings 410,986 366,887 Unrealized holding gains (losses) on securities 44 86 Cumulative translation adjustments (12,055) (10,116) --------- --------- $813,255 $830,256 ========= =========
5 6 HUBBELL INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 1998 (UNAUDITED) 3. The company has acquired three product lines and associated assets during 1998 for a cash purchase price of $20,498,000. The most recent of these acquisitions was the business and assets of Siescor Technologies, Inc. at the beginning of the second quarter. On February 14, 1997, Hubbell acquired Fargo Manufacturing Company, Inc. ("Fargo") based in Poughkeepsie, New York. Fargo manufactures distribution and transmission line products primarily for the electric utility market. Each share of Fargo common stock was converted into a right to receive shares or fractions thereof of Hubbell's Class B Common Stock and accordingly 1,170,572 shares of Class B Common Stock were issued. The acquisition of Fargo has been recorded under the purchase method of accounting with a cost of $43,100,000 net of cash acquired. Additionally, three product lines and associated assets were acquired during 1997 for $21,130,000 in cash. The costs of the acquired businesses have been allocated to assets acquired and liabilities assumed based on fair values with the residual amount assigned to goodwill, which is being amortized over forty years. The businesses have been included in the financial statements as of their respective acquisition date and had no material effect on the Company's financial position and reported earnings. 4. The following table sets forth the computation of earnings per share for the three months ended March 31, (in thousands except per share data):
THREE MONTHS ENDED SIX MONTHS ENDED JUNE 30 JUNE 30 ------------------- ------------------- 1998 1997 1998 1997 ------- ------- ------- ------- Net Income $44,148 $41,415 $84,035 $77,414 Weighted average number of common 66,215 67,192 66,533 67,008 shares outstanding during the period Common equivalent shares 1,800 1,729 1,925 1,706 ------- ------- ------- ------- Average number of shares outstanding 68,015 68,921 68,458 68,714 Earnings per share: Basic $ 0.67 $ 0.62 $ 1.26 $ 1.16 Diluted $ 0.65 $ 0.60 $ 1.23 $ 1.13
5. In the opinion of management, the information furnished in Part I-Financial Information on Form 10-Q reflects all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial statements for the periods indicated. 6. The results of operations for the three and six months ended June 30, 1998 and 1997 are not necessarily indicative of the results to be expected for the full year. 6 7 HUBBELL INCORPORATED ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS JUNE 30, 1998 FINANCIAL CONDITION At June 30, 1998, the Company's financial position remained strong with working capital of $286.7 million and a current ratio of 1.9 to 1. Total borrowings at June 30, 1998, were $157.6 million, 19.4% of shareholders equity. The net decline in cash and temporary cash investments of $17.4 million for the six months ended June 30, 1998, reflects the following: expenditures for plant and equipment as part of the consolidation and streamlining initiative, the acquisition of treasury shares under the Company's share repurchase program, and quarterly dividend payment offset by cash provided from operating activities. Net cash provided by operating activities reflects higher net income and a reduction in other current assets. Accounts receivable increased in line with higher sales. The increase in inventories is to provide adequate stock to maintain customer service levels during relocation of manufacturing operations. The Company believes that currently available cash, borrowing facilities, and its ability to increase its credit lines if needed, combined with internally generated funds should be more than sufficient to fund capital expenditures as well as any increase in working capital that would be required to accommodate a higher level of business activity. RESULTS OF OPERATIONS Consolidated net sales increased by 6% for the second quarter and 5% year-to-date, on improved shipment for Premise Wiring, Lighting and Pulse Communications combined with the acquisition of six product lines (three in 1997 and three in 1998). Operating income increased 5% for the quarter and first six months. Operating margins were essentially even with last year as profitability improvements offset the effects of workforce and production redeployment costs under the Company's consolidation and streamlining initiative which are being expensed as incurred; combined with increasing price competition and unfavorable foreign currency exchange rates. Low Voltage segment sales increased by 5% for the second quarter and year-to-date periods on higher shipments of generally all products within the segment. Operating income increased approximately 4% for the quarter and year-to-date reflecting the growth in sales. High Voltage segment sales declined 2% in the quarter and were essentially even with last year for the first six months. The effect of the acquisition of Fargo in February 1997 was offset by lower sales in the Asian and Canadian markets. Operating income increased 4% for the quarter and 9% for year-to-date on improved operating efficiencies and completing the assimilation of the Fargo acquisition. The Other Industry segment sales increased 11% for the quarter and 8% for the first six months on increased sales of telecommunications and wire management products combined with the acquisition of the Siescor Technologies product line in April 1998. Operating profits increased 7% and 6% respectively for the quarter and year-to-date reflecting the growth in sales and the impact of redeployment expenses associated with the streamlining and consolidation of the fittings, switch and outlet box businesses. Sales through the Company's international units declined by 9% in the second quarter and 2% year-to-date reflecting the weakened economies in Asia and Canada. Profitability was effected by unfavorable translation rates due to the strengthening of the US dollar against foreign currencies and combined with the lower sales volumes resulted in operating income declining by 13% in the quarter. 7 8 HUBBELL INCORPORATED MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS JUNE 30, 1998 (CONTINUED) The effective income tax rate for 1998 was 27.5% versus 30% in 1997. The decrease in the effective tax rate reflects a higher level of tax benefit from Puerto Rico operations. Year-to-date net income increased 8% and diluted earnings per share increased 9%, respectively. The Company's consolidation and streamlining program is proceeding according to management's plan. At June 30, 1998, the accrual balance was $30,108,000. Through June 30, 1998, cumulative costs charged to the consolidation and streamlining accrual were $14,500,000 as follows (in millions):
Employee Asset Exist Other Benefits Disposals Costs Costs Total ----- ----- ----- ----- ----- 1997 Streamlining Charge $15.6 $18.0 $ 6.1 $ 4.9 $44.6 Amounts Utilized in 1997 (.6) (7.3) (0.1) (4.9) (12.9) Amounts Utilized in 1998 (1.2) (0.1) (0.3) -- (1.6) ----- ----- ----- ----- ----- Remaining Reserve $13.8 $10.6 $ 5.7 $-- $30.1 ===== ===== ===== ===== =====
8 9 HUBBELL INCORPORATED PART II -- OTHER INFORMATION ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS At the Annual Meeting of Shareholders held on May 4, 1998: 1. The following nine (9) individuals were elected directors of the Company for the ensuing year to serve until the next Annual Meeting of Shareholders of the Company and until their respective successors may be elected and qualified, the affirmative votes being a majority of the voting power of all outstanding eligible shares all voting as a single class:
NAME OF INDIVIDUAL VOTES FOR VOTES WITHHELD - ------------------ --------- -------------- G. Jackson Ratcliffe 241,134,636 557,251 Andrew McNally IV 241,133,159 558,728 John A. Urquhart 241,069,976 621,911 George W. Edwards, Jr 240,925,806 766,081 E. Richard Brooks 240,918,309 773,578 Daniel J. Meyer 240,902,665 789,222 Horace G. McDonell 240,826,995 864,892 Malcolm Wallop 240,568,787 1,123,100 Joel S. Hoffman 240,117,101 1,574,786
2. Price Waterhouse was ratified as independent accountants to examine the annual financial statements for the Company for the year 1998 receiving 241,454,807 affirmative votes, being a majority of the votes cast on the matter all voting as a single class, with 133,388 negative votes and 103,706 votes abstained. 3. The proposal relating to an amendment to the Company's Restated Certificate of Incorporation (the "Certificate") to permit the Company to engage in any lawful business for which corporations may be formed under the laws of the State of Connecticut, which appears on pages 21 and 22 of the proxy statement, dated March 23, 1998 (the "Proxy Statement"), and which proposal is incorporated herein by reference, has been approved with 240,902,331 affirmative votes, being a majority of the votes cast on the matter all voting as a single class, with 419,432 negative votes, and 370,159 votes abstained. 4. The proposal relating to an amendment to the Company's Certificate to provide additional indemnification to directors and officers of the Company and to permit indemnification for employees and agents in certain circumstances, which appears on pages 22 to 27 of the Proxy Statement, and which proposal is incorporated herein by reference, has been approved with 238,942,825 affirmative votes, being a majority of the votes cast on the matter all voting as a single class, with 2,073,674 negative votes, and 670,421 votes abstained. 5. The proposal relating to amendments to the Company's Certificate to provide for various conforming changes intended to update citations to the Connecticut General Statutes, to provide flexibility with respect to locating the Company's headquarters, and to ensure consistency of the language throughout the Certificate, which appears on pages 27 and 28 of the Proxy Statement, and which proposal is incorporated herein by reference, has been approved with 239,917,373 affirmative votes, being a majority of the votes cast on the matter all voting as a single class, with 960,434 negative votes, and 814,094 votes abstained. 6. The shareholder proposal relating to Board diversity, which appears on pages 28 to 30 of the Proxy Statement, and which proposal is incorporated herein by reference, has been rejected with 20,738,938 affirmative votes, being the affirmative vote of less than a majority of the votes cast on the matter all voting as a single class, with 196,263,797 negative votes, being a majority of the votes cast on the matter all voting as a single class, and 2,278,558 votes abstained. 9 10 HUBBELL INCORPORATED PART II -- OTHER INFORMATION ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K EXHIBITS NUMBER DESCRIPTION - ------ ----------- 3a Restated Certificate of Incorporation, as amended and restated effective as of May 14, 1998* 27. Financial Data Schedule (Electronic filings only) - ---------- * Filed hereunder REPORTS ON FORM 8-K There were no reports on Form 8-K filed for the six months ended June 30, 1998. SIGNATURES 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. HUBBELL INCORPORATED Dated: August 7, 1998 /s/ H. B. Rowell, Jr. ---------------- -------------------------- Harry B. Rowell, Jr. Executive Vice President (Chief Financial and Accounting Officer) 10 EX-3.A 2 RESTATED CERTIFICATE OF INCORPORATION 1 EXHIBIT 3a HUBBELL INCORPORATED (A Stock Corporation) Restated Certificate of Incorporation (By Action of the Board of Directors) FIRST: That the name of the corporation is Hubbell Incorporated. SECOND: That said corporation shall be located in the Town of Orange, County of New Haven, in the State of Connecticut, or any other place the Board of Directors shall determine. THIRD: That the nature of the business to be transacted, and the purposes to be promoted or carried out, by said corporation are as follows: To manufacture, buy, sell, own and deal in machinery, tools, machine screws, electrical goods, supplies, apparatus, devices and fixtures of every character, material and description, and to buy, sell, own, and deal in letters patent and rights and licenses under letters patent, necessary or convenient for the prosecution of its business, and to grant rights and licenses to others under letters patent which may be owned by said corporation, and to buy, sell, mortgage, own and deal in such real estate as may be necessary or convenient for the prosecution of its business, and to engage in any other lawful business permitted under the laws of the State of Connecticut, and generally to do all things necessary or convenient for the prosecution of its business, and the proper conduct and management thereof. FOURTH: A. The total number of shares of the capital stock of this corporation hereby authorized is 205,891,097 divided into 5,891,097 shares of Preferred Stock without par value, 50,000,000 shares of Class A Common Stock of the par value of $0.01 each, and 150,000,000 shares of Class B Common Stock of the par value of $0.01 each. B. Except as may otherwise be provided by law, the holders of record of Class A and Class B Common Stock shall vote as a single class, and the holder of record of each issued and outstanding share of Class A Common Stock shall be entitled to have 20 votes and the holder of record of each issued and outstanding share of Class B Common Stock shall be entitled to have one vote, upon all matters brought before any meeting of the stockholders of the corporation. In all other respects, whether as to dividends or upon liquidation, dissolution or winding up of the affairs of the corporation, or otherwise, the holders of record of the Class A Common Stock and the holders of record of the Class B Common Stock shall have identical rights and privileges on the basis of the number of shares held except that stock dividends may be declared and paid on shares of Class A Common Stock in whole or in part in shares of Class B Common Stock. C. No holder of stock of the corporation of any class shall have any preemptive or other rights to subscribe to or purchase any new or additional or increased shares of stock of this corporation of any class or any scrip, rights, warrants, bonds or other obligations, security or evidences of indebtedness, whether or not convertible into or exchangeable for, or shall claim rights to purchase or otherwise acquire, shares of stock of the corporation of any class. C.1 The corporation may, to the extent of its unreserved and unrestricted capital surplus, (a) make distributions of cash or property to its shareholders with respect to its outstanding shares or any -1- 2 thereof, and (b) make purchases and permit conversions of its own shares for cash, securities or other property. D. The Preferred Stock may be issued from time to time in series and each series shall be so designated as to distinguish the shares thereof from the shares of all other series. All shares of Preferred Stock shall be of equal rank and shall be identical except as expressly determined by the Board of Directors pursuant to this paragraph FOURTH. The Board of Directors is hereby expressly vested with authority to fix and determine the variations as among such series. Except as otherwise provided by law, the foregoing authority shall include without limitation with respect to each such series authority to fix and determine the number of shares thereof, the dividend rate, whether dividends shall be cumulative and, if so, from which date or dates, voting rights, liquidation rights, the redemption price or prices, if any, and the terms and conditions of the redemption, any sinking fund provisions for the redemption or purchase of shares of the series, and the terms and conditions on which the shares are convertible into Class A Common Stock or Class B Common Stock, or both, if they are convertible; provided, however, that all shares of Preferred Stock shall constitute one and the same class, and shall be of equal rank, regardless of series, in respect of the payment of dividends and distributions in liquidation. Before the issuance of shares of Preferred Stock any provision of which is fixed by the Board of Directors as hereinbefore set forth, the Board of Directors shall by its Resolution amend the Certificate of Incorporation as required by Section 33-666 of the Connecticut General Statutes. FIFTH: That the amount of capital with which this corporation shall commence business is one hundred thousand dollars. SIXTH: That the duration of the corporation is unlimited. SEVENTH: The personal liability of any Director to the corporation or its shareholders for monetary damages for breach of duty as a Director is hereby limited to the amount of the compensation received by the Director for serving the corporation during the year of the violation if such breach did not (a) involve a knowing and culpable violation of law by the Director, (b) enable the Director or an associate, as defined in Section 33-840 of the Connecticut General Statutes, to receive an improper personal economic gain, (c) show a lack of good faith and a conscious disregard for the duty of the Director to the corporation under circumstances in which the Director was aware that his conduct or omission created an unjustifiable risk of serious injury to the corporation, (d) constitute a sustained and unexcused pattern of inattention that amounted to an abdication of the Director's duty to the corporation, or (e) create liability under Section 33-757 of the Connecticut General Statutes. This provision shall not limit or preclude the liability of a Director for any act or omission occurring prior to the date this provision becomes effective. Any lawful repeal or modification of this provision by the shareholders and the Board of Directors of the corporation shall not adversely affect any right or protection of a Director existing at or prior to the time of such repeal or modification. EIGHTH: The corporation shall, to the fullest extent permitted by law, indemnify its Directors from and against any and all of the liabilities, expenses and other matters referenced in or covered by the Connecticut Business Corporation Act. In furtherance and not in limitation thereof, the corporation shall indemnify each Director for liability, as defined in subsection (5) of Section 33-770 of the Connecticut General Statutes, to any person for any action taken, or any failure to take any action, as a Director, except liability that (i) involved a knowing and culpable violation of law by the Director, (ii) enabled the Director or an associate, as defined in Section 33-840 of the Connecticut General Statutes, to receive an improper personal economic gain, (iii) showed a lack of good faith and conscious disregard for the duty of the Director to the corporation under circumstances in which the Director was aware that his conduct -2- 3 or omission created an unjustifiable risk of serious injury to the corporation, (iv) constituted a sustained and unexcused pattern of inattention that amounted to an abdication of the Director's duty to the corporation, or (v) created liability under Section 33-757 of the Connecticut General Statutes; provided that nothing in this sentence shall affect the indemnification of or advance of expenses to a Director for any liability stemming from acts or omissions occurring prior to the effective date of this Paragraph EIGHTH. The corporation shall indemnify each officer of the corporation who is not a Director, or who is a Director but is made a party to a proceeding in his capacity solely as an officer, to the same extent as the corporation is permitted to provide the same to a Director, and may indemnify such persons to the extent permitted by Section 33-776 of the Connecticut General Statutes. The indemnification provided for herein shall not be deemed exclusive of any other rights to which those indemnified may be entitled under any bylaw, agreement, vote of shareholders or disinterested Directors or otherwise, both as to action in such person's official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a Director or officer and shall inure to the benefit of the heirs, executors and administrators of such a person. B. Expenses incurred by a Director or officer of the corporation in defending a civil or criminal action, suit or proceeding shall be paid for or reimbursed by the corporation to the fullest extent permitted by law in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such Director or officer to repay such amount if it shall be ultimately determined that such Director or officer is not entitled to be indemnified by the corporation. C. The corporation may indemnify and pay for or reimburse the expenses of employees and agents not otherwise entitled to indemnification pursuant to this Paragraph EIGHTH on such terms and conditions as may be established by the Board of Directors. D. No amendment to or repeal of this Paragraph EIGHTH shall apply to or have any effect on the indemnification of any Director, officer, employee or agent of the corporation for or with respect to any acts or omissions of such Director, officer, employee or agent occurring prior to such amendment or repeal, nor shall any such amendment or repeal apply to or have any effect on the obligations of the corporation to pay for or reimburse in advance expenses incurred by a Director, officer, employee or agent of the corporation in defending any action, suit or proceeding arising out of or with respect to any acts or omissions occurring prior to such amendment or repeal. NINTH: References in this Restated Certificate of Incorporation to sections of the Connecticut General Statutes shall be deemed to include amendments adopted form time to time to such sections and shall further be deemed to include any successor sections thereto. -3- EX-27 3 FINANCIAL DATA SCHEDULE
5 1,000 6-MOS DEC-31-1998 JUN-30-1998 57,811 0 215,799 8,478 297,070 596,808 559,154 282,372 1,320,742 310,130 99,551 0 0 661 812,594 1,320,742 712,221 712,221 491,424 491,424 2,640 1,016 4,336 115,910 31,875 84,035 0 0 0 84,035 1.26 1.23
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