-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, q155AxVcqQOmc1zmU0Ld3Hk52Y+4ssYZeMCh3LbfYTRZPiJaupTWblfliJZQZdY+ 79vRFesboP9nKaLMXD5tsg== 0000049029-94-000015.txt : 19940919 0000049029-94-000015.hdr.sgml : 19940919 ACCESSION NUMBER: 0000049029-94-000015 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 19940731 FILED AS OF DATE: 19940912 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HUGHES SUPPLY INC CENTRAL INDEX KEY: 0000049029 STANDARD INDUSTRIAL CLASSIFICATION: 5063 IRS NUMBER: 590559446 STATE OF INCORPORATION: FL FISCAL YEAR END: 0125 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-08772 FILM NUMBER: 94548669 BUSINESS ADDRESS: STREET 1: 20 N ORANGE AVE, STE 200 STREET 2: P O BOX 2273 CITY: ORLANDO STATE: FL ZIP: 32802-2273 BUSINESS PHONE: 4078414755 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended July 31, 1994 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 No. 0-5235 HUGHES SUPPLY, INC. Incorporated in the State I.R.S. Employer I.D. of Florida Number 59-0559446 Post Office Box 2273 20 North Orange Avenue, Suite 200 Orlando, Florida 32802 Registrant's Telephone Number, including area code: 407/841-4755 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES [X] NO [ ] Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Common Stock Outstanding as of August 26, 1994 $1 Par Value 5,789,594 Page 1 HUGHES SUPPLY, INC. FORM 10-Q Index Page No. Part I. Financial Information Item 1. Financial Statements Consolidated Balance Sheets as of July 31, 1994 and January 28, 1994 3 - 4 Consolidated Statements of Income for the Three Months Ended July 31, 1994 and 1993 5 Consolidated Statements of Income for the Six Months Ended July 31, 1994 and 1993 6 Consolidated Statements of Cash Flows for the Six Months Ended July 31, 1994 and 1993 7 Notes to Consolidated Financial Statements 8 - 9 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 10 - 12 Part II. Other Information Item 4. Submission of Matters to a Vote of Security Holders 13 - 14 Item 5. Other Information 14 - 15 Item 6. Exhibits and Reports on Form 8-K 15 - 18 Signatures 19 Index of Exhibits 20 Page 2 PART I. FINANCIAL INFORMATION Item 1. Financial Statements HUGHES SUPPLY, INC. Consolidated Balance Sheets (dollars in thousands) July 31, January 28, 1994 1994 ----------- ------------ (unaudited) ASSETS Current Assets: Cash and cash equivalents $ 2,362 $ 1,078 Accounts receivable, less allowance for losses of $6,120 and $3,914 108,315 97,765 Inventories 109,037 94,223 Deferred income taxes 5,868 4,972 Other current assets 2,897 5,532 ---------- ---------- Total current assets 228,479 203,570 ---------- ---------- Property, Plant and Equipment, at cost: Land 12,338 12,353 Buildings and improvements 39,830 37,097 Transportation equipment 20,060 19,674 Furniture, fixtures and equipment 17,020 14,843 Leased property under capital leases 10,794 10,794 ---------- ---------- Total 100,042 94,761 Less accumulated depreciation and amortization (48,169) (45,439) ---------- ---------- Net property, plant and equipment 51,873 49,322 ---------- ---------- Deferred Income Taxes 2,278 2,210 Other Assets 7,389 8,303 ---------- ---------- $ 290,019 $ 263,405 ========== ========== See accompanying notes to consolidated financial statements. Page 3 HUGHES SUPPLY, INC. Consolidated Balance Sheets-Continued (dollars in thousands) July 31, January 28, 1994 1994 ----------- ----------- (unaudited) LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Current portion of long-term debt $ 969 $ 898 Accounts payable 57,237 52,053 Accrued compensation and benefits 6,298 7,257 Other current liabilities 13,636 8,401 ---------- ---------- Total current liabilities 78,140 68,609 ---------- ---------- Long-Term Debt, less current portion: Notes and subordinated debentures 85,074 95,367 Capital lease obligations 3,424 3,859 ---------- ---------- Total long-term debt 88,498 99,226 ---------- ---------- Other Noncurrent Liabilities 1,286 1,143 ---------- ---------- Total liabilities 167,924 168,978 ---------- ---------- Shareholders' Equity: Preferred stock - - Common stock-6,148,944 and 5,075,670 shares issued 6,149 5,076 Capital in excess of par value 37,290 15,410 Retained earnings 84,223 80,425 ---------- ---------- 127,662 100,911 Less treasury stock-359,350 and 418,566 shares, at cost (5,567) (6,484) ---------- ---------- Total shareholders' equity 122,095 94,427 ---------- ---------- $ 290,019 $ 263,405 ========== ========== See accompanying notes to consolidated financial statements. Page 4 HUGHES SUPPLY, INC. Consolidated Statements of Income (unaudited) (in thousands, except per share amounts) Three months ended July 31, 1994 1993 ----------- ----------- Net Sales $ 202,619 $ 163,950 Cost of Sales 161,663 131,204 ---------- ---------- Gross Profit 40,956 32,746 ---------- ---------- Operating Expenses: Selling, general and administrative 32,706 26,990 Depreciation and amortization 2,093 1,729 Provision for doubtful accounts 727 651 ---------- ---------- Total operating expenses 35,526 29,370 ---------- ---------- Operating Income 5,430 3,376 ---------- ---------- Non-Operating Income and (Expenses): Interest and other investment income 552 470 Interest expense (1,119) (1,209) Other, net 148 147 ---------- ---------- (419) (592) ---------- ---------- Income Before Income Taxes 5,011 2,784 Income Taxes 2,003 1,066 ---------- ---------- Net Income $ 3,008 $ 1,718 ========== ========== Earnings Per Share: Primary $ .51 $ .37 ========== ========== Fully Diluted $ .51 $ .34 ========== ========== Average Number of Shares Outstanding: Primary 5,943 4,619 ========== ========== Fully Diluted 5,943 5,718 ========== ========== Dividends Per Share $ .05 $ .04 ========== ========== See accompanying notes to consolidated financial statements. Page 5 HUGHES SUPPLY, INC. Consolidated Statements of Income (unaudited) (in thousands, except per share amounts) Six months ended July 31, 1994 1993 ----------- ----------- Net Sales $ 386,520 $ 312,464 Cost of Sales 309,163 250,825 ---------- ---------- Gross Profit 77,357 61,639 ---------- ---------- Operating Expenses: Selling, general and administrative 63,077 52,106 Depreciation and amortization 4,142 3,358 Provision for doubtful accounts 1,412 1,233 ---------- ---------- Total operating expenses 68,631 56,697 ---------- ---------- Operating Income 8,726 4,942 ---------- ---------- Non-Operating Income and (Expenses): Interest and other investment income 1,108 889 Interest expense (2,254) (2,332) Other, net 335 414 ---------- ---------- (811) (1,029) ---------- ---------- Income Before Income Taxes 7,915 3,913 Income Taxes 3,237 1,496 ---------- ---------- Net Income $ 4,678 $ 2,417 ========== ========== Earnings Per Share: Primary $ .84 $ .52 ========== ========== Fully Diluted $ .81 $ .51 ========== ========== Average Number of Shares Outstanding: Primary 5,596 4,611 ========== ========== Fully Diluted 5,961 5,718 ========== ========== Dividends Per Share $ .10 $ .07 ========== ========== See accompanying notes to consolidated financial statements. Page 6 HUGHES SUPPLY, INC. Consolidated Statements of Cash Flows (unaudited) (in thousands) Six months ended July 31, 1994 1993 ----------- -------- Increase (Decrease) in Cash and Cash Equivalents: Cash flows from operating activities: Cash received from customers $ 375,082 $ 299,649 Cash paid to suppliers and employees (375,816) (297,043) Interest income received 1,108 889 Interest paid (1,731) (2,379) Income taxes paid (2,139) (2,188) ---------- ---------- Net cash used in operating activities ( 3,496) (1,072) ---------- ---------- Cash flows from investing activities: Capital expenditures (6,788) (4,262) Proceeds from sale of property, plant and equipment 446 287 Payment for business acquisitions, net of cash acquired (905) (3,554) ---------- ---------- Net cash used in investing activities (7,247) (7,529) ---------- ---------- Cash flows from financing activities: Net borrowings under short-term debt arrangements 12,701 9,550 Principal payments on: Long-term notes (106) (1,610) Capital lease obligations (363) (330) Issuance of common shares under stock option plans 528 12 Purchase of common shares (210) (12) Dividends paid (523) (251) ---------- ---------- Net cash provided by financing activities 12,027 7,359 ---------- ---------- Net Increase (Decrease) in Cash and Cash Equivalents 1,284 (1,242) Cash and Cash Equivalents: Beginning of period 1,078 2,253 ---------- ---------- End of period $ 2,362 $ 1,011 ========== ========== See accompanying notes to consolidated financial statements. Page 7 HUGHES SUPPLY, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) 1. In the opinion of the Company, the accompanying unaudited consolidated financial statements contain all adjustments (consisting only of normal recurring accruals) necessary to present fairly the financial position as of July 31, 1994, the results of operations for the three months and six months ended July 31, 1994 and 1993, and cash flows for the six months then ended. 2. On March 8, 1994, the Company issued a call for redemption of its outstanding 7% convertible subordinated debentures to take place on April 7, 1994. Of the $22,960,000 debentures outstanding at January 28, 1994, $22,889,000, or 99.7%, were converted into the Company's common stock at $21.17 per share or 47.2 common shares for each $1,000 face amount of debentures. This conversion resulted in the issuance of 1,081,146 common shares. If the conversion had occurred at the beginning of fiscal year 1995, primary earnings per share for the six months ended July 31, 1994 would have been $.81. Fully diluted earnings per share for the six months ended July 31, 1994 of $.81 already assumes the conversion of the debentures. 3. On May 24, 1994, the shareholders approved an amendment to the articles of incorporation of the Company increasing the number of authorized shares of common stock to 20,000,000 shares, $1.00 par value per share. The shareholders also approved an amendment to the Directors' Stock Option Plan for non-employee directors (the "Plan") increasing from 60,000 shares to 135,000 shares the number of shares as to which options under the Plan may be granted and extending the term of the Plan from May, 1998 to May, 2003. Page 8 HUGHES SUPPLY, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued (unaudited) 3. The following is a reconciliation of net income to net cash provided by (used in) operating activities(in thousands): Six months ended July 31, 1994 1993 ---------- ---------- Net income $ 4,678 $ 2,417 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation 3,718 2,999 Amortization 424 359 Provision for doubtful accounts 1,412 1,233 (Gain) on sale of property, plant and equipment (154) (188) Undistributed (earnings) of affiliate (65) (91) Changes in assets and liabilities: (Increase) decrease in: Accounts receivable (11,554) (12,950) Inventories (14,410) 2,447 Other current assets 2,635 2,417 Other assets 326 (110) Increase (decrease) in: Accounts payable and accrued expenses 7,730 1,039 Accrued interest and income taxes 2,836 (392) Other noncurrent liabilities 143 95 Decrease (increase) in deferred income taxes (1,215) (347) ---------- ---------- Net cash provided by operating activities $ (3,496) $ (1,072) ========== ========== Noncash Activities: As discussed in Note 2, the Company issued approximately 1,081,146 shares of common stock for the conversion of $22,889,000 debentures during the six months ended July 31, 1994. During the six months ended July 31, 1994, the Company contributed 16,597 treasury shares in the amount of $500,000 to an employee benefit plan. Page 9 PART I. FINANCIAL INFORMATION - continued Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations HUGHES SUPPLY, INC. On March 8, 1994, the Company called for redemption of its 7% convertible subordinated debentures as of April 7, 1994. Substantially all of the outstanding debentures were converted into common stock by April 7, 1994, which resulted in an increase of approximately $23,000,000 in shareholders' equity and a corresponding decrease of long-term debt of $23,000,000. As a result of the conversion, 1,081,146 new shares of common stock were issued. Material Changes in Results of Operations Net Sales: Net sales increased 24% to $202.6 million for the three months ended July 31, 1994 from $163.9 million in the prior year. Net sales for the six months ended July 31, 1994 were $386.5 million, a 24% increase over last year's sales of $312.5 million. The three and six month sales increases reflect the steady recovery of the building industry throughout the Southeast. In addition, newly-opened and acquired wholesale outlets accounted for approximately 45% of the increase for both periods. Management expects construction activity to remain strong for the remainder of fiscal year 1995 and is confident that our growth plans can be sustained through aggressive marketing in existing markets and selective acquisitions of complementary businesses. Gross Profit: Gross profit for the three months ended July 31, 1994 increased 25% to $41.0 million from $32.7 million for the three months ended July 31, 1993. The gross margin for the three months ended July 31, 1994 was 20.2%, compared to 20.0% last year. Gross profit increased 26% to $77.4 million for the six months ended July 31, 1994, compared to $61.6 million last year. The gross margin was 20.0% and 19.7% for the six months ended July 31, 1994 and 1993, respectively. The increase in gross profit dollars and the improvement in gross margins for both periods were due to more efficient purchasing which is attributable to increased volume and a greater concentration of supply sources resulting from the Company's preferred vendor program. Page 10 Operating Expenses: Operating expenses as a percentage of net sales were 17.5% and 17.9% for the three months ended July 31, 1994 and 1993, respectively. Operating expenses increased to $35.5 million for the three months ended July 31, 1994 from $29.4 million last year. Operating expenses as a percentage of net sales were 17.8% and 18.1% for the six months ended July 31, 1994 and 1993, respectively, and increased to $68.6 million from $56.7 million. The percentages to net sales has declined for both periods compared to the comparable prior year due to higher volume of sales and the Company's continuing efforts to control operating costs. Newly-opened wholesale outlets and recent acquisitions accounted for approximately 45% of the increase in operating expense dollars for both periods. Most of the remainder of the increases for both periods is due to personnel and other costs, such as transportation, associated with the growth in sales. Non-Operating Income and Expenses: Interest expense decreased to $1.1 million for the three months ended July 31, 1994 compared to $1.2 million last year. This decrease is primarily the result of lower average borrowings for the current quarter (due primarily to the conversion of the debentures in the first quarter) compared to the prior year which were partially offset by a slightly higher effective interest rate during the current year. Interest expense remained constant at $2.3 million for the six months ended July 31, 1994 and 1993, respectively. Average borrowings and the effective interest rate were virtually unchanged for the current six month period versus the prior year. Income Taxes: The effective tax rates were as follows: 1994 1993 Three months ended July 31, 40.0% 38.3% Six months ended July 31, 40.9% 38.2% The change in rates is due to fluctuations of nondeductible expenses and a 1% increase in the federal tax rate. Net Income: Net income was $3.0 million for the three months ended July 31, 1994 versus $1.7 million for the three months ended July 31, 1993. Primary earnings per share were $.51 and $.37 for the three months ended July 31, 1994 and 1993, respectively. Fully diluted earnings per share were $.51 and $.34 for the three months ended July 31, 1994 and 1993, respectively. Page 11 Net income was $4.7 million for the six months ended July 31, 1994 versus $2.4 million for the six months ended July 31, 1993. Primary earnings per share were $.84 and $.52 for the six months ended July 31, 1994 and 1993, respectively. Fully diluted earnings per share were $.81 and $.51 for the six months ended July 31, 1994 and 1993, respectively. Liquidity and Capital Resources The composition of working capital, as sales volume changes, typically becomes less liquid during periods of sales expansion when it is necessary to carry higher levels of inventories and receivables. As discussed above, the Company is in a period of sales expansion. Consequently, cash used in operating activities increased by approximately $2.4 million for the six months ended July 31, 1994 compared to the prior year period. The Company continues to maintain greater than 75% of total assets as current assets. Working capital at July 31, 1994 amounted to $150.3 million compared to $135.0 million at January 28, 1994. Inventories and accounts receivable at July 31, 1994 were $14.8 million and $10.6 million higher, respectively, than at January 28, 1994. Despite these increases, turnover for these assets improved. Inventory turnover was 6.1 and 5.9 times for the six months ended July 31, 1994 and 1993, respectively. Accounts receivable turnover for these periods was 7.2 and 7.0 times, respectively. Capital expenditures for the six months ended July 31, 1994 were $6.8 million compared to $4.3 million in the prior year. The increase is related to the Company's sales growth as new facilities and transportation equipment have been added to adequately service the growth. Capital expenditures for fiscal 1995 are expected to be approximately $10 million, exclusive of acquisitions. The Company's bank financing consists primarily of a $100 million unsecured credit facility which includes a $75 million long-term revolving credit facility and a $25 million line of credit convertible to a term note. The Company's financial condition remains strong and the Company has the resources necessary, with approximately $17 million in unused debt capacity (subject to borrowing limitations under long-term debt covenants), to meet future working capital requirements. Future expansion will be financed on a project-by-project basis through issuance of common stock and additional borrowings. Page 12 PART II. OTHER INFORMATION HUGHES SUPPLY, INC. Item 4. Submission of Matters to a Vote of Security Holders. (a) Annual Meeting of Shareholders. The Company's 1994 Annual Meeting of Shareholders (the "Annual Meeting") was held on May 24, 1994. (b) Election of Directors. Proxies for the Annual Meeting were solicited by management pursuant to Regulation 14 under the Securities Exchange Act of 1934 ("Regulation 14") and there was no solicitation of proxies in opposition to managements nominees listed in the Proxy Statement. All of management's nominees listed in the Proxy Statement were elected. (c) Other Matters Voted Upon. In addition to the election of directors referred to above, the following other matters were voted upon at the Annual Meeting: (i) Approval of Amendment to Directors' Stock Option Plan. The shareholders approved an amendment to the Directors' Stock Option Plan for non-employee directors (the "Plan") increasing from 60,000 shares to 135,000 shares the number of shares as to which options under the Plan may be granted and extending the term of the Plan from May 29, 1998 to May 24, 2003. The number of shares voted for the amendment, against the amendment, and abstaining from voting were as follows: 3,882,329 for approval; 288,258 against approval; and 27,823 abstaining from voting. A copy of Amendment No. 1 to Hughes Supply, Inc. Directors' Stock Option Plan dated May 24, 1994, setting forth the amendment approved by the shareholders at the Annual Meeting, and the Hughes Supply, Inc. Directors Stock Option Plan as adopted by the Board of Directors on January 24, 1989 and approved by the shareholders on May 30, 1989, which together constitute the Plan as presently in effect, is filed as Exhibit 10.4 to this Report. (ii) Approval of Stock Award Provisions of Senior Executives' Long-Term Incentive Bonus Plan for Fiscal Year 1996. Shareholders approved the stock award provisions of the Senior Executives' Long-Term Incentive Bonus Plan for Fiscal Year 1996 which had been approved by the Board of Directors on August 24, 1993 (the "bonus plan"). Under the terms of the bonus plan the Chief Executive Officer, President and Chief Financial Officer, would receive an incentive bonus if the Company achieves the required earnings per share during the three fiscal year period beginning with the fiscal year ended January 28, 1994 and ending with the fiscal year to be ended Page 13 January 26, 1996. Under the bonus plan 50% of any bonus would be paid in shares of common stock of the Company if the stock award provisions of the bonus plan were approved by shareholders and the balance of any such bonus would be paid in cash. In the absence of such shareholder approval any such bonus would be paid 100% in cash. The shareholders approved the stock award provisions of the bonus plan by the following vote: 4,027,905 shares voted for approval; 151,334 shares voted against approval; and 19,171 shares abstaining from voting. A written description of the bonus plan, which is not set forth in a formal document, is incorporated into this Report as Exhibit 10.8 by reference to the description of the bonus plan set forth under the caption "Approval of the Stock Award Provisions of the Senior Executives' Long-Term Incentive Bonus Plan for Fiscal Year 1996" on pages 26 and 27 of the Proxy Statement. (iii) Approval of Amendment to Articles of Incorporation to Increase Number of Authorized Shares of Common Stock. The shareholders also approved an amendment to the articles of incorporation of the Company increasing the number of authorized shares of common stock to 20,000,000 shares of common stock, $1.00 par value per share so that the authorized capital stock of the Company, after such amendment, consists of 30,000,000 shares of capital stock including 20,000,000 shares of common stock and 10,000,000 shares of preferred stock, no par value per share. The amendment to the articles of incorporation was approved by the following vote of the shareholders: 3,575,961 voted for the amendment; 609,293 voted against the amendment; and 13,156 abstaining from voting. A copy of the Articles of Amendment to Articles of Incorporation of Hughes Supply, Inc. dated June 14, 1994, setting forth the amendment approved by the shareholders at the Annual Meeting, and the Restated Articles of Incorporation Hughes Supply, Inc. (January 24, 1989), the articles of incorporation as last previously amended, which together constitute the articles of incorporation of the Company as presently in effect, is filed as Exhibit 3.1 to this Report. Item 5. Other Information. Amendment to By-Laws Approved by Board of Directors. At the annual organizational meeting of the Board of Directors held on May 24, 1994 following the Annual Meeting the Board of Directors amended Sections 2 and 3 of Article IV of the By-Laws of the Company to provide that the Chairman of the Board of Directors shall be the chief executive officer and that the President shall be the chief operating and administrative officer. A copy of the Page 14 By-Laws designated as the Composite By-Laws of Hughes Supply, Inc. (as amended May 24, 1994) including the amendments adopted by the Board of Directors is filed as Exhibit 3.2 to this Report. Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits Filed. (2) Plan of acquisition, reorganization, arrangement, liquidation or succession - not applicable. (3) Articles of incorporation and by-laws. 3.1 Articles of incorporation consisting of Articles of Amendment to Articles of Incorporation of Hughes Supply, Inc. dated June 14, 1994 and Restated Articles of Incorporation of Hughes Supply, Inc. (January 24, 1989). 3.2 Composite By-Laws of Hughes Supply, Inc. (as amended May 24, 1994). (4) Instruments defining the rights of security holders, including indentures. 4.1 Specimen Stock Certificate representing shares of the Company's common stock, $1.00 par value, filed as Exhibit 4.2 to form 10-Q for the quarter ended October 31, 1984. 4.2 Specimen Copy of Certificate representing 7% Convertible Debentures, filed as Exhibit 4(c) to Registration No. 33-4714. 4.3 Resolution Approving and Implementing Shareholder Rights Plan filed as Exhibit 4.4 to Form 8-K dated May 17, 1988. (10) Material contracts. 10.1 Lease Agreements with Hughes, Inc. (a) Orlando Trucking, Garage and Maintenance Operations dated December 1, 1971, filed as Exhibit 13(n) to Registration No. 2-43900. Letter dated April 15, 1992 extending lease from month to month, filed as exhibit 10.1(a) to Form 10-K for the fiscal year ended January 31, 1992. Page 15 (b) Leases effective March 31, 1988, filed as exhibit 10.1(c) to Form 10-K for the fiscal year ended January 27, 1989; Sub-item Property (1) Clearwater (2) Daytona Beach (3) Fort Pierce (4) Lakeland (5) Lakeland - Lightstyle (6) Leesburg (7) Orlando Electrical Operation (8) Orlando Plumbing Operation (9) Orlando Utility Warehouse (10) St. Petersburg (11) Sarasota (12) Venice (13) Winter Haven (c) Lease amendment letter between Hughes, Inc. and the Registrant, dated December 1, 1986, amending Orlando Truck Operations Center and Maintenance Garage lease, filed as Exhibit 10.1(i) to Form 10-K for the fiscal year ended January 30, 1987. (d) Lease agreement dated June 1, 1987, between Hughes, Inc. and the Registrant, for additional Sarasota property, filed as Exhibit 10.1(j) to Form 10-K for the fiscal year ended January 29, 1988. (e) Leases dated March 11, 1992, filed as Exhibit 10.1(e) to Form 10-K for the fiscal year ended January 31, 1992. Sub-item Property (1) Tallahassee Electrical Operation (2) Gainesville Electrical Operation (3) Valdosta Electrical Operation 10.2 Hughes Supply, Inc. 1988 Stock Option Plan filed as Exhibit A to Prospectus included in Registration No. 33-26468. 10.3 Form of Supplemental Executive Retirement Plan Agreement entered into between the Registrant and eight of its executive officers, filed as Exhibit 10.6 to Form 10-K for fiscal year ended January 30, 1987. Page 16 10.4 Directors' Stock Option Plan consisting of Amendment No. 1 to Hughes Supply, Inc. Directors' Stock Option Plan dated May 24, 1994 and Hughes Supply, Inc. Directors' Stock Option Plan as adopted January 24, 1989. 10.5 Asset Purchase Agreement with Accord Industries Company, dated October 9, 1990, for sale of Registrant's manufacturing operations, filed as Exhibit 10.7 to Form 10-K for fiscal year ended January 25, 1991. 10.6 Lease Agreement dated June 30, 1993 between Donald C. Martin and Electrical Distributors, Inc., filed as Exhibit 10.6 to Form 10-K for fiscal year ended January 28, 1994. 10.7 Consulting Agreement dated June 30, 1993 between Hughes Supply, Inc. and Donald C. Martin, filed as Exhibit 10.7 to Form 10-K for fiscal year ended January 28, 1994. 10.8 Written description of senior executives' long-term incentive bonus plan for fiscal year 1996 incorporated by reference to the description of the bonus plan set forth under the caption "Approval of the Stock Award Provisions of the Senior Executives' Long-Term Incentive Bonus Plan for Fiscal Year 1996" on pages 26 and 27 of the Registrant's Proxy Statement Annual Meeting of Shareholders To Be Held May 24, 1994. (11) Statement re computation of per share earnings. 11.1 Summary schedule of earnings per share calculation. (15) Letter re unaudited interim financial information - not applicable. (18) Letter re change in accounting principles - not applicable. (19) Report furnished to security holders - not applicable. (22) Published report regarding matters submitted to vote of security holders - not applicable. (23) Consents of experts and counsel - not applicable. (24) Power of attorney - not applicable. (27) Financial Data Schedule. 27.1 Financial Data Schedule. Page 17 (99) Additional exhibits - not applicable. (b) Reports on Form 8-K. During the quarter ended July 31, 1994, the Registrant filed a Current Report on Form 8-K dated May 24, 1994, which reported under Item 4 (Change in Registrant's Certifying Accountant) the appointment of Price Waterhouse LLP as auditors for the three fiscal year period commencing with the Registrant's current fiscal year ending January 27, 1995. Page 18 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. HUGHES SUPPLY, INC. Date: September 12, 1994 By: /s/ David H. Hughes David H. Hughes, Chairman of the Board and Chief Executive Officer Date: September 12, 1994 By: /s/ J. Stephen Zepf J. Stephen Zepf, Treasurer, Chief Financial Officer and Chief Accounting Officer Page 19 INDEX OF EXHIBITS FILED WITH THIS REPORT 3.1 Articles of Incorporation. 3.2 Composite By-Laws. 10.4 Directors' Stock Option Plan. 11.1 Computation of Per Share Earnings. 27.1 Financial Data Schedule Page 20 EX-11 2 Exhibit 11.1 HUGHES SUPPLY, INC. SUMMARY SCHEDULE OF EARNINGS PER SHARE CALCULATIONS (in thousands, except per share amounts) Potentially dilutive securities: a) Options for common stock, issued under stock option plan. b) 7% Convertible subordinated debentures, due May 1, 2011. Three Months Ended July 31, 1994 1993 Line - - ---- SHARES ------ 1 Average shares outstanding 5,789 4,552 2 Incremental shares (options) - Assuming options outstanding at end of period were exercised at beginning of period (or time of issuance, if later) and proceeds were used to purchase shares at average market price during the period 154 67 ---------- ---------- 3 Shares used in calculating Earnings Per Common and Common Equivalent Share 5,943 4,619 4 Incremental shares (options) - Assuming options outstanding at end of period were exercised at beginning of period (or time of issuance, if later) and proceeds were used to purchase shares at the higher of the average market price during the period or the market price at the end of the period; and that options exercised during the period were exercised at the beginning of the period(or time of issuance, if later) and the proceeds were used to purchase shares at the market price at the date of exercise - 14 5 Incremental shares (debentures) - Assuming debentures were converted at beginning of period (or time of issuance, if later) at most advantageous (for security holder) conversion rate that becomes effective within 10 years - 1,085 ---------- ---------- 6 Shares used in calculating Earnings Per Common Share - Assuming Full Dilution 5,943 5,718 ========== ========== EARNINGS -------- 7 Net income per financial statements, used in calculating Earnings Per Common Share and Earnings Per Common and Common Equivalent Share $ 3,008 $ 1,718 8 Incremental earnings (debentures) - Assuming interest charges applicable to convertible debentures (and nondiscretionary adjustments that would have been made based on net income) are taken into account in determining balance of income applicable to common stock - 249 ---------- ---------- 9 Earnings used in calculating Earnings Per Common Share - Assuming Full Dilution $ 3,008 $ 1,967 ========== ========== Three Months Ended July 31, 1994 1993 Line - - ---- RESULTING PER SHARE DATA ------------------------ 10 Earnings per common share (Line 7/Line 1) $ .52 $ .38 =========== =========== 11 Earnings per common share and common equivalent share (Line 7/Line 3) $ .51 $ .37 =========== =========== 12 Dilution 1.9% 2.6% =========== =========== 13 Earnings per common share - assuming full dilution (Line 9/Line 6) $ .51 $ .34 =========== =========== 14 Dilution 1.9% 10.5% =========== =========== 15 Used in statements of income: [ ] Line 10, if dilution less than 3%, or antidilution, exists for all periods. [ X ] Lines 11 and 13, if dilution >= 3% for any period. Six Months Ended July 31, 1994 1993 Line - - ---- SHARES ------ 1 Average shares outstanding 5,424 4,552 2 Incremental shares (options) - Assuming options outstanding at end of period were exercised at beginning of period (or time of issuance, if later) and proceeds were used to purchase shares at average market price during the period 172 59 ---------- ---------- 3 Shares used in calculating Earnings Per Common and Common Equivalent Share 5,596 4,611 4 Incremental shares (options) - Assuming options outstanding at end of period were exercised at beginning of period (or time of issuance, if later) and proceeds were used to purchase shares at the higher of the average market price during the period or the market price at the end of the period; and that options exercised during the period were exercised at the beginning of the period(or time of issuance, if later) and the proceeds were used to purchase shares at the market price at the date of exercise 5 22 5 Incremental shares (debentures) - Assuming debentures were converted at beginning of period (or time of issuance, if Six Months Ended July 31, 1994 1993 Line - - ---- later) at most advantageous (for security holder) conversion rate that becomes effective within 10 years 360 1,085 ---------- ---------- 6 Shares used in calculating Earnings Per Common Share - Assuming Full Dilution 5,961 5,718 ========== ========== EARNINGS -------- 7 Net income per financial statements, used in calculating Earnings Per Common Share and Earnings Per Common and Common Equivalent Share $ 4,678 $ 2,417 8 Incremental earnings (debentures) - Assuming interest charges applicable to convertible debentures (and nondiscretionary adjustments that would have been made based on net income) are taken into account in determining balance of income applicable to common stock 166 498 ---------- ---------- 9 Earnings used in calculating Earnings Per Common Share - Assuming Full Dilution $ 4,844 $ 2,915 ========== ========== RESULTING PER SHARE DATA ------------------------ 10 Earnings per common share (Line 7/Line 1) $ .86 $ .53 =========== =========== 11 Earnings per common share and common equivalent share (Line 7/Line 3) $ .84 $ .52 =========== =========== 12 Dilution 2.3% 1.9% =========== =========== 13 Earnings per common share - assuming full dilution (Line 9/Line 6) $ .81 $ .51 =========== =========== 14 Dilution 5.8% 3.8% =========== =========== 15 Used in statements of income: [ ] Line 10, if dilution less than 3%, or antidilution, exists for all periods. [ X ] Lines 11 and 13, if dilution >= 3% for any period. EX-27 3
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED BALANCE SHEET OF HUGHES SUPPLY, INC. AS OF JULY 31, 1994, AND THE RELATED STATEMENT OF INCOME FOR THE SIX MONTHS THEN ENDED AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 0000049029 HUGHES SUPPLY, INC. 1,000 6-MOS JAN-27-1995 JUL-31-1994 2,362 0 114,435 6,120 109,037 228,479 100,042 48,169 290,019 78,140 88,498 6,149 0 0 115,946 290,019 386,520 386,520 309,163 309,163 67,219 1,412 2,254 7,915 3,237 4,678 0 0 0 4,678 .84 .81
EX-3 4 ` ARTICLES OF AMENDMENT to ARTICLES OF INCORPORATION of HUGHES SUPPLY, INC. Pursuant to the provisions of Chapter 607, Florida Statutes, the undersigned corporation has adopted the amendment to its articles of incorporation, last previously amended and restated as the Restated Articles of Incorporation of Hughes Supply, Inc. (January 24, 1989) filed with the State of Florida Department of State on February 27, 1989 (such articles of incorporation being hereinafter referred to as its "Articles of Incorporation"), hereinafter set forth. FIRST: The name of the corporation amending its Articles of Incorporation is: HUGHES SUPPLY, INC. SECOND: The amendment to its Articles of Incorporation adopted by the corporation amends Article III, Section A of its Articles of Incorporation increasing the maximum authorized number of shares of stock of all classes from 20,000,000 shares, consisting of 10,000,000 shares of Common Stock and 10,000,000 shares of Preferred Stock to 30,000,000 shares, consisting of 20,000,000 shares of Common Stock and 10,000,000 shares of Preferred Stock, so that Article III is amended to read in its entirety as follows: ARTICLE III Section A. The maximum number of shares of all classes of stock which this Corporation is authorized to issue or to have outstanding at any time shall be 30,000,000 shares, which shall be divided as follows: (1) Not more than 20,000,000 shares of Common Stock of $1.00 par value per share (which shall be designated "Common Stock"); and (2) Not more than 10,000,000 shares of Preferred Stock of no par value per share (which shall be designated "Preferred Stock"). Section B. Each holder of Common Stock shall have one vote per share of such stock held, upon the payment of the consideration fixed for the issuance of said stock, whether such payment is made in money or in property to be exchanged therefor at a reasonable valuation. Said stock shall be fully paid and non- assessable. Section C. Holders of Common Stock shall not have preemptive rights to purchase additional shares of Common Stock or other securities of the Corporation whether or not such stock or other securities are issued for cash. Holders of securities other than Common Stock shall not have any preemptive or other right to subscribe for, or right of conversion into Common Stock, Preferred Stock, or other stock or securities of the Corporation, except such rights, if any, as may be expressly granted by the Board of Directors. Section D. The designations, powers, preferences, and rights, and the qualifications, limitations, or restrictions of the Preferred Stock shall be as follows: Dividends on the outstanding shares of Preferred Stock shall be declared and paid or set apart for payment before any dividends shall be declared and paid or set apart for payment on the outstanding shares of Common Stock with respect to the same quarterly period. Dividends on any shares of Preferred Stock shall be cumulative only if and to the extent determined by resolution of the Board of Directors, as provided below. In the event of any liquidation, dissolution, or winding up of the affairs of the Corporation, whether voluntary or involuntary, the outstanding shares of Preferred Stock shall have preference and priority over the outstanding shares of Common Stock for payment of the amount, if any, to which shares of each outstanding series of Preferred Stock may be entitled in accordance with the terms and rights thereof and each holder of Preferred Stock shall be entitled to be paid in full such amount, or have a sum sufficient for the payment in full set aside, before any such payments shall be made to the holders of Common Stock. The Board of Directors is expressly authorized at any time and from time to time to provide for the issuance of shares of Preferred Stock in one or more series, with such voting powers and with such designations, preferences and relative participating, optional or other rights, qualifications, limitations or restrictions, as shall be stated and expressed in the resolution or resolutions providing for the issue thereof adopted by the Board of Directors, and as are not stated and expressed in these Articles of Incorporation or any amendment thereto or prohibited by law, including the following: (1) The distinctive designation of such series and the number of shares which shall constitute such series, which number may be increased (except where otherwise provided by the Board of Directors in creating such series) or decreased (but not below the number of shares thereof then outstanding) from time to time by the Board of Directors; and (2) The rate or manner of payment of dividends on shares of each such series, including the dividend rate, date of declaration and payment, whether dividends shall be cumulative, and the conditions upon which and the date from which such dividends shall be cumulative; and (3) Whether the shares of such series can be redeemed, the time or times when, and the price or prices at which, shares of such series shall be redeemable, and the terms and conditions of redemption; and (4) The amount payable on shares of such series and the rights of holders of such shares in the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation; and (5) The sinking fund provisions, if any, for the redemption or purchase of shares of such series; and (6) The rights, if any, of the holders of shares of such series to convert such shares into, or exchange such shares for, shares of Common Stock, or any other securities, and the terms and conditions of such conversion or exchange; and (7) The voting rights, if any, whether full or limited, of the shares of such series; provided, however, that the voting rights of such Preferred Stock shall not exceed one vote per share thereof and no share shall have any voting rights until the payment therefor shall have been received by the Corporation. Except in respect of the particulars that may be fixed by the Board of Directors as provided above in this Article III, Section D, all shares of Preferred Stock shall be of equal rank and shall be identical, and each share of a series shall be identical in all respects with the other shares of the same series. When payment of the consideration for which shares of Preferred Stock are to be issued shall have been received by the Corporation, such shares shall be deemed to be fully paid and nonassessable. The Board of Directors, pursuant to the above authorization contained in this Section D of Article III on May 17, 1988 authorized the issuance of Series A Junior Participating Preferred Stock as set forth in the Resolution Establishing Series A Junior Participating Preferred Stock which is attached to and incorporated by reference herein as Appendix A to these Articles of Amendment. THIRD: The above amendment was approved by the Board of Directors of the corporation on March 24, 1994 and recommended to the board of directors for approval by the holders of Common Stock, the only outstanding class of stock of the corporation. FOURTH: The above amendment was approved by the shareholders on May 24, 1994 by the affirmative vote of the holders of a majority of the shares of Common Stock outstanding and entitled to vote on the amendment. The number of votes cast was sufficient for approval of the amendment. Dated: June 14, 1994 HUGHES SUPPLY, INC. By s/A. Stewart Hall, Jr. A. Stewart Hall, Jr. President By s/Robert N. Blackford Robert N. Blackford Secretary APPENDIX A TO ARTICLES OF AMENDMENT TO ARTICLES OF INCORPORATION OF HUGHES SUPPLY, INC. RESOLUTION ESTABLISHING SERIES A JUNIOR PARTICIPATING PREFERRED STOCK RESOLVED, that pursuant to the authority vested in this Board of Directors in accordance with the provisions of this Corporation's Articles of Incorporation, a series of Preferred Stock of this Corporation be, and it hereby is, created, and that the designation and amount thereof and the voting powers, preferences and relative, participating, optional and other special rights of the shares of such series, and the qualifications, limitations or restrictions thereof are as follows: Section 1. Designation and Amount. The shares of such series shall be designated as "Series A Junior Participating Preferred Stock" and the number of shares constituting such series shall be 300,000. Section 2. Dividends and Distributions. (A) Subject to the prior and superior rights of the holders of any shares of any series of Cumulative Preferred Stock ranking prior and superior to the shares of Series A Junior Participating Preferred Stock with respect to dividends, the holders of shares of Series A Junior Participating Preferred Stock shall be entitled to receive, when, as and if declared by the Board of Directors out of funds legally available for the purpose, quarterly dividends payable in cash on the third Friday in February, May, August and November of each year (each such date being referred to herein as a "Quarterly Dividend Payment Date"), commencing on the first Quarterly Dividend Payment Date after the first issuance of a share or fraction of a share of Series A Junior Participating Preferred Stock, in an amount per share (rounded to the nearest cent) equal to the greater of (a) $1.25 or (b) subject to the provision for adjustment hereinafter set forth, 100 times the aggregate per share amount of all cash dividends, and 100 times the aggregate per share amount (payable in kind) of all non-cash dividends or other distributions other than a dividend payable in shares of Common Stock or a subdivision of the outstanding shares of Common Stock (by reclassification or otherwise), declared on the Common Stock, par value $1.00 per share, of the Corporation (the "Common Stock") since the immediately preceding Quarterly Dividend Payment Date, or, with respect to the first Quarterly Dividend Payment Date, since the first issuance of any share or fraction of a share of Series A Junior Participating Preferred Stock. In the event the Corporation shall at any time after May 17, 1988 (the "Rights Declaration Date") (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the amount to which holders of shares of Series A Junior Participating Preferred Stock were entitled immediately prior to such event under clause (b) of the preceding sentence shall be adjusted by multiplying such amount by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. (B) The Corporation shall declare a dividend or distribution on the Series A Junior Participating Preferred Stock as provided in paragraph (A) above immediately after it declares a dividend or distribution on the Common Stock (other then a dividend payable in shares of Common Stock); provided that, in the event no dividend or distribution shall have been declared on the Common Stock during the period between any Quarterly Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date, a dividend of $1.25 per share on the Series A Junior Participating Preferred Stock shall nevertheless be payable on such subsequent Quarterly Dividend Payment Date. (C) Dividends shall begin to accrue and be cumulative on outstanding shares of Series A Junior Participating Preferred Stock from the Quarterly Dividend Payment Date next preceding the date of issue of such shares of Series A Junior Participating Preferred Stock, unless the date of issue of such shares is prior to the record date for the first Quarterly Dividend Payment Date, in which case dividends on such shares shall begin to accrue from the date of issue of such shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a date after the record date for the determination of holders of shares of Series A Junior Participating Preferred Stock entitled to receive a quarterly dividend and before such Quarterly Dividend Payment Date, in either of which events such dividends shall begin to accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends paid on the shares of Series A Junior Participating Preferred Stock in an amount less than the total amount of such dividends at the time accrued and payable on such shares shall be allocated pro rata on a share-by-share basis among all such shares at the time outstanding. The Board of Directors may fix a record date for the determination of holders of shares of Series A Junior Participating Preferred Stock entitled to receive payment of a dividend or distribution declared thereon, which record date shall be no more than 30 days prior to the date fixed for the payment thereof. Section 3. Voting Rights. The holders of shares of Series A Junior Participating Preferred Stock shall have the following voting rights: (A) Each share of Series A Junior Participating Preferred Stock shall entitle the holder thereof to 1 vote on all matters submitted to a vote of the stockholders of the Corporation. (B) Except as otherwise provided herein or by law, the holders of shares of Series A Junior Participating Preferred Stock end the holders of shares of Common Stock shall vote together as one class on all matters submitted to a vote of stockholders of the Corporation. (C) Holders of Series A Junior Participating Preferred Stock shall have no special voting rights and their consent shall not be required (except to the extent they are entitled to vote with holders of Common Stock as set forth herein) for taking any corporate action. Section 4. Certain Restrictions. (A) Whenever quarterly dividends or other dividends or distributions payable on the Series A Junior Participating Preferred Stock as provided in Section 2 are in arrears, thereafter and until all accrued end unpaid dividends and distributions, whether or not declared, on shares of Series A Junior Participating Preferred Stock outstanding shall have been paid in full, the Corporation shall not (i) declare or pay dividends on, make any other distributions on, or redeem or purchase or otherwise acquire for consideration, any shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Junior Participating Preferred Stock; (ii) declare or pay dividends on, or make any other distributions on, any shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series A Junior Participating Preferred Stock, except dividends paid ratably on the Series A Junior Participating Preferred Stock and all such parity stock on which dividends are payable or in arrears in proportion to the total amounts to which the holders of all such shares are then entitled; (iii) redeem or purchase or otherwise acquire for consideration shares of any stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series A Junior Participating Preferred Stock, provided that the Corporation may at any time redeem, purchase or otherwise acquire shares of any such parity stock in exchange for shares of any stock of the Corporation ranking junior (either as to dividends or upon dissolution, liquidation or winding up) to the Series A Junior Participating Preferred Stock; (iv) purchase or otherwise acquire for consideration any shares of Series A Junior Participating Preferred Stock, or any shares of stock ranking on a parity with the Series A Junior Participating Preferred Stock, except in accordance with a purchase offer made in writing or by publication (as determined by the Board of Directors) to all holders of such shares upon such terms as the Board of Directors, after consideration of the respective annual dividend rates and other relative rights and preferences of the respective series and classes, shall determine in good faith will result in fair and equitable treatment among the respective series or classes. (B) The Corporation shall not permit any subsidiary of the Corporation to purchase or otherwise acquire for consideration any shares of stock of the Corporation unless the Corporation could, under paragraph (A) of this Section 4, purchase or otherwise acquire such shares at such time and in such manner. Section 5. Reacquired Shares. Any shares of Series A Junior Participating Preferred Stock purchased or otherwise acquired by the Corporation in any manner whatsoever shall be retired and cancelled promptly after the acquisition thereof. All such shares shall upon their cancellation become authorized but unissued shares of Preferred Stock and may be reissued as part of a new series of Preferred Stock to be created by resolution or resolutions of the Board of Directors, subject to the conditions and restrictions on issuance set forth herein. Section 6. Liquidation, Dissolution or Winding Up. (A) Upon any liquidation (voluntary or otherwise), dissolution or winding up of the Corporation, no distribution shall be made to the holders of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Junior Participating Preferred Stock unless, prior thereto, the holders of shares of Series A Junior Participating Preferred Stock shall have received $100 per share, plus an amount equal to accrued and unpaid dividends and distributions thereon, whether or not declared, to the date of such payment (the "Series A Liquidation Preference"). Following the payment of the full amount of the Series A Liquidation Preference, no additional distributions shall be made to the holders of shares of Series A Junior Participating Preferred Stock unless, prior thereto, the holders of shares of Common Stock shall have received an amount per share (the "Common Adjustment") equal to the quotient obtained by dividing (i) the Series A Liquidation Preference by (ii) 100 (as appropriately adjusted as set forth in subparagraph C below to reflect such events as stock splits, stock dividends and recapitalizations with respect to the Common Stock) (such number in clause (ii), the "Adjustment Number"). Following the payment of the full amount of the Series A Liquidation Preference and the Common Adjustment in respect of all outstanding shares of Series A Junior Participating Preferred Stock and Common Stock, respectively, holders of Series A Junior Participating Preferred Stock and holders of shares of Common Stock shall receive their ratable and proportionate share of the remaining assets to be distributed in the ratio of the Adjustment Number to 1 with respect to such Preferred Stock and Common Stock, on a per share basis, respectively. (B) In the event, however, that there are not sufficient assets available to permit payment in full of the Series A Liquidation Preference and the liquidation preferences of all other series of preferred stock, if any, which rank on a parity with the Series A Junior Participating Preferred Stock, then such remaining assets shall be distributed ratably to the holders of such parity shares in proportion to their respective liquidation preferences. In the event, however, that there are not sufficient assets available to permit payment in full of the Common Adjustment, then such remaining assets shall be distributed ratably to the holders of Common Stock. (C) In the event the Corporation shall at any time after the Rights Declaration Date (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the Adjustment Number in effect immediately prior to such event shall be adjusted by multiplying such Adjustment Number by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. Section 7. Consolidation, Merger, etc. In case the Corporation shall enter into any consolidation, merger, combination or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property, then in any such case the shares of Series A Junior Participating Preferred Stock shall at the same time be similarly exchanged or changed in an amount per share (subject to the provision for adjustment hereinafter set forth) equal to 100 times the aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the case may be, into which or for which each share of Common Stock is changed or exchanged. In the event the Corporation shall at any time after the Rights Declaration Date (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the amount set forth in the preceding sentence with respect to the exchange or change of shares of Series A Junior Participating Preferred Stock shall be adjusted by multiplying such amount by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. Section 8. No Redemption or Conversion. The shares of Series A Junior Participating Preferred Stock shall not be redeemable or convertible into any other securities of the Corporation. Section 9. Ranking. The Series A Junior Participating Preferred Stock shall rank junior to all other series of the Corporation's Preferred Stock as to the payment of dividends and the distribution of assets, unless the terms of any such series shall provide otherwise. Section 10. Amendment. In the event shares of Series A Junior Participating Preferred Stock are outstanding, the Articles of Incorporation of the Corporation shall not be further amended in any manner which would materially alter or change the powers, preferences or special rights of the Series A Junior Participating Preferred Stock so as to affect them adversely without the affirmative vote of the holders of two-thirds or more of the outstanding shares of Series A Junior Participating Preferred Stock, voting separately as a class. Section 11. Fractional Shares. Series A Junior Participating Preferred Stock may be issued in fractions of a share which shall entitle the holder, in proportion to such holders fractional shares, to exercise voting rights, receive dividends, participate in distributions and to have the benefit of all other rights of holders of Series A Junior Participating Preferred Stock. RESTATED ARTICLES OF INCORPORATION HUGHES SUPPLY, INC. (January 24, 1989) We, the undersigned, hereby certify that the following Restated Articles of Incorporation of Hughes Supply, Inc. were duly adopted by the Corporation's Board of Directors at a meeting held on January 24, 1989, and that such Restated Articles of Incorporation only restate and integrate and do not further amend the provisions of the Corporation's Articles of Incorporation as heretofore amended and there is no discrepancy between the Corporation's Articles of Incorporation as heretofore amended and the provisions of these Restated Articles of Incorporation and the omission of matters of historical interest. ARTICLE I The name of this Corporation shall be: HUGHES SUPPLY, INC. ARTICLE II The general nature of business to be transacted by this Corporation is: Section A. To engage in every aspect and phase of the business of buying, selling, distributing, handling and storing all types of electrical, plumbing, heating and air conditioning, industrial and utilities supplies, fixtures and hardware, tools and contractors' supplies. Section B. To manufacture, purchase, or otherwise acquire, and to own, mortgage, pledge, sell, assign, transfer, or otherwise dispose of, and to invest in, trade in, deal in and with, goods, wares, merchandise, real and personal property, and services, of every class, kind and description, except that it is not to conduct a banking, safe deposit, trust, insurance, surety, express, railroad, canal, telegraph, telephone or cemetery company, a building and loan association, mutual fire insurance association, cooperative association, fraternal benefits society, state fair or exposition. Section C. To conduct business in, have one or more offices in, and buy, hold, mortgage, sell, convey, lease or otherwise dispose of real and personal property, including franchises, patents, copyrights, trademarks, licenses, in the State of Florida, and in all other States and Countries. Section D. To contract debts and borrow money, issue and sell or pledge bonds, debentures, notes and other evidences of indebtedness, and execute such mortgages, transfers of corporate property or other instruments to secure the payment of corporate indebtedness as required. Section E. To purchase the corporate assets of any other corporation and engage in the same or other character of business. Section F. To guarantee, endorse, purchase, hold, sell, transfer, mortgage, pledge or otherwise acquire or dispose of the shares of the capital stock of, or any bonds, securities, or other evidences of indebtedness created by any other corporation of the State of Florida or any other state or government, and while owner of such stock to exercise all the rights, powers and privileges of ownership, including the right to vote such stock. ARTICLE III Section A. The maximum number of shares of all classes of stock which this Corporation is authorized to issue or to have outstanding at any time shall be 20,000,000 shares, which shall be divided into classes as follows: (1) Not more than 10,000,000 shares of Common Stock of $1.00 par value per share (which shall be designated "Common Stock"); and (2) Not more than 10,000,000 shares of Preferred Stock of no par value per share (which shall be designated "Preferred Stock"). Section B. Each holder of Common Stock shall have one vote per share of such stock held, upon the payment of the consideration fixed for the issuance of said stock, whether such payment is made in money or in property to be exchanged therefor at a reasonable valuation. Said stock shall be fully paid and nonassessable. Section C. Holders of Common Stock shall not have preemptive rights to purchase additional shares of Common Stock or other securities of the Corporation whether or not such stock or other securities are issued for cash. Holders of securities other than Common Stock shall not have any preemptive or other right to subscribe for, or right of conversion into Common Stock, Preferred Stock, or other stock or securities of the Corporation, except such rights, if any, as may be expressly granted by the Board of Directors. Section D. The designations, powers, preferences, and rights, and the qualifications, limitations, or restrictions of the Preferred Stock shall be as follows: Dividends on the outstanding shares of Preferred Stock shall be declared and paid or set apart for payment before any dividends shall be declared and paid or set apart for payment on the outstanding shares of Common Stock with respect to the same quarterly period. Dividends on any shares of Preferred Stock shall be cumulative only if and to the extent determined by resolution of the Board of Directors, as provided below. In the event of any liquidation, dissolution, or winding up of the affairs of the Corporation, whether voluntary or involuntary, the outstanding shares of Preferred Stock shall have preference and priority over the outstanding shares of Common Stock for payment of the amount, if any, to which shares of each outstanding series of Preferred Stock may be entitled in accordance with the terms and rights thereof and each holder of Preferred Stock shall be entitled to be paid in full such amount, or have a sum sufficient for the payment in full set aside, before any such payments shall be made to the holders of Common Stock. The Board of Directors is expressly authorized at any time and from time to time to provide for the issuance of shares of Preferred Stock in one or more series, with such voting powers and with such designations, preferences and relative participating, optional or other rights, qualifications, limitations or restrictions, as shall be stated and expressed in the resolution or resolutions providing for the issue thereof adopted by the Board of Directors, and as are not stated and expressed in these Articles of Incorporation or any amendment thereto or prohibited by law, including the following: (1) The distinctive designation of such series and the number of shares which shall constitute such series, which number may be increased (except where otherwise provided by the Board of Directors in creating such series) or decreased (but not below the number of shares thereof then outstanding) from time to time by the Board of Directors; and (2) The rate or manner of payment of dividends on shares of each such series, including the dividend rate, date of declaration and payment, whether dividends shall be cumulative, and the conditions upon which and the date from which such dividends shall be cumulative; and (3) Whether the shares of such series can be redeemed, the time or times when, and the price or prices at which, shares of such series shall be redeemable, and the terms and conditions of redemption; and (4) The amount payable on shares of such series and the rights of holders of such shares in the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation; and (5) The sinking fund provisions, if any, for the redemption or purchase of shares of such series; and (6) The rights, if any, of the holders of shares of such series to convert such shares into, or exchange such shares for, shares of Common Stock, or any other securities, and the terms and conditions of such conversion or exchange; and (7) The voting rights, if any, whether full or limited, of the shares of such series; provided, however, that the voting rights of such Preferred Stock shall not exceed one vote per share thereof and no share shall have any voting rights until the payment therefor shall have been received by the Corporation. Except in respect of the particulars that may be fixed by the Board of Directors as provided above in this Article III, Section D, all shares of Preferred Stock shall be of equal rank and shall be identical, and each share of a series shall be identical in all respects with the other shares of the same series. When payment of the consideration for which shares of Preferred Stock are to be issued shall have been received by the Corporation, such shares shall be deemed to be fully paid and nonassessable. The Board of Directors, pursuant to the above authorization contained in this Section D of Article III on May 17, 1988 authorized the issuance of Series A Junior Participating Preferred Stock as set forth in the Resolution Establishing Series A Junior Participating Preferred Stock which is attached to and incorporated by reference herein as Appendix A to these Restated Articles of Incorporation. ARTICLE IV The amount of capital with which this Corporation shall begin business is the sum of Five Hundred Dollars ($500.00). ARTICLE V This Corporation shall have perpetual existence. ARTICLE VI The principal office and place of business of this Corporation shall be located at 521 West Central Boulevard, Orlando, Florida, but this Corporation may establish and maintain its principal office, or other offices, at other places in the United States of America, its Colonies or dependencies, and in any foreign country as its Board of Directors may from time to time determine. ARTICLE VII Section A. Number of Directors. The number of Directors of this Corporation shall be the number from time to time fixed by the holders of record of at least 80% of the outstanding shares of stock entitled to vote or by the Directors in accordance with the terms and conditions of the By- Laws, but at no time shall said number of Directors be less than three. Section B. Term of Directors. The Directors shall be classified with respect to the time for which they shall severally hold office by dividing them into three classes, each consisting of as near one-third of the whole number of Directors as practicable, and all Directors of the Corporation shall hold office until their successors are elected and qualified. The first such classification shall be made at the Annual Meeting of Shareholders to be held in the year 1975. At that Annual Meeting, the Directors shall be classified for staggered terms of 1, 2, and 3 years, respectively, and at each successive Annual Meeting, the successors to the class of Directors whose terms expire that year shall be elected to hold office for the term of three years, so that the term of office of one class of Directors shall expire each year. Any vacancy which shall occur in a class of Directors prior to the expiration of the term of such class may be filled by the Board of Directors for the remainder of the full term. Section C. Removal of Directors. Notwithstanding any other provisions of these Articles of Incorporation, the By-Laws of the Corporation or applicable law, the affirmative vote of the holders of record of at least 80% of the outstanding shares of stock entitled to vote shall be required to remove Directors of the Corporation without cause. Section D. Amendment. Notwithstanding any other provision of the Articles of Incorporation, the By-Laws of the Corporation or applicable law, the affirmative vote of the holders of record of at least 80% of the outstanding shares of stock entitled to vote shall be required (1) to amend, modify or repeal this Article VII, (2) adopt any provision of the Articles of Incorporation or the By-Laws of the Corporation which is inconsistent with this Article VII, or (3) prior to the fixing by the Board of Directors of any right or preference of any series of Preferred Stock which is inconsistent with the provisions of this Article VII. ARTICLE VIII Stock certificates to replace lost or destroyed certificates shall be issued on such basis and according to such procedures as are from time to time provided for in the By-Laws of the Corporation. ARTICLE IX The names and post office addresses of the first Board of Directors are as follows, and these Directors shall hold office for the first year of this Corporation's existence, or until their successors shall be elected and qualified: Russell S. Hughes 526 Grove Park Drive, Orlando, Fla. Harry C. Hughes 521 W. Central Avenue, Orlando, Fla. Romania S. Hughes 816 E. Central Avenue, Orlando, Fla. ARTICLE X The name and post office address of each of the subscribers to these Articles of Incorporation, and the number of shares subscribed for by each are as follows: Russell S. Hughes 526 Grove Park Drive, Orlando, Fla. 1 sh. Harry C. Hughes 521 W. Central Avenue, Orlando, Fla. 1 sh. Romania S. Hughes 816 E. Central Avenue, Orlando, Fla. 2 shs. ARTICLE XI These Articles of Incorporation may be amended in the manner provided by law. Every Amendment shall be approved by the Board of Directors, proposed by them to the stockholders, and approved at the stockholders' meeting by a majority of the stock issued and entitled to be voted unless all the Directors and all the stockholders sign a written statement manifesting their intention that a certain Amendment of these Articles of Incorporation be made. ARTICLE XII No plan of consolidation or merger under which the Corporation is not the surviving constituent corporation shall be deemed approved by the stockholders unless such plan of consolidation or merger shall be approved by the affirmative vote of two-thirds of the total number of shares of stock outstanding and entitled to vote. No amendment to the Articles of Incorporation may amend or delete the requirement that two-thirds of the total number of shares of stock outstanding and entitled to vote approve any plan of consolidation or merger under which the Corporation is not the surviving constituent corporation unless at a meeting duly called two- thirds of the total number of shares of stock outstanding and entitled to vote shall approve such amendment or deletion of such requirement. ARTICLE XIII Section A. Higher Vote Required for Certain Business Combinations. In addition to any affirmative vote required by law or these Articles of Incorporation, and except as expressly provided in Section B of this Article XIII, the affirmative vote of the holders of two-thirds of the then outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors (the "Voting Stock") shall be required for the approval or authorization of any Business Combination (as hereinafter defined). Section B. Exceptions to Higher Voting Requirement. The provisions of Section A of this Article XIII shall not be applicable to any particular Business Combination, and such Business Combination shall require only such affirmative vote as is required by law or any other Article of these Articles of Incorporation, if the Business Combination shall have been approved by a majority of the directors who are Disinterested Directors (as hereinafter defined) or if all of the following conditions are met: 1. The aggregate amount of the cash and the Fair Market Value (as hereinafter defined), as of the date of the consummation of the Business Combination, of consideration other than cash to be received per share by holders of Common Stock in such Business Combination shall be at least equal to the higher of (i) the highest price paid for any share of Common Stock by the Interested Shareholder (as hereinafter defined) involved in the proposed Business Combination within the two-year period immediately prior to the time of the first public announcement of such proposed Business Combination (the "Announcement Date") or in the transaction in which such person became an Interested Shareholder, whichever price is the higher; or (ii) the Fair Market Value per share of the Corporation's Common Stock on the Announcement Date, or on the date on which the Interested Shareholder became an Interested Shareholder (the "Determination Date"), whichever is higher. The price paid for any share of Common Stock shall be the amount of cash plus the Fair Market Value of any other consideration to be received therefor, deter-mined at the time of payment therefor. 2. The consideration to be received by holders of a particular class of outstanding Voting Stock (including Common Stock) shall be in cash or in the same form as the Interested Shareholder has previously paid for shares of such class of Voting Stock. If the Interested Shareholder has paid for shares of any class of Voting Stock with varying forms of consideration, the form of consideration for such class of Voting Stock shall be either cash or the form of consideration used to acquire the largest number of shares of such class of Voting Stock previously acquired by it. The price determined in accordance with Paragraph 1 of this Section B shall be subject to appropriate adjustment in the event of any stock dividend, stock split, combination of shares or similar event. 3. After the Determination Date and prior to the consummation of such Business Combination: (i) there shall have been (a) no reduction in the annual rate of dividends paid on the Common Stock (except as necessary to reflect any subdivision of the Common Stock) and no failure to declare and pay at the regular date therefor any full dividend (whether or not cumulative) on any outstanding Preferred Stock, except as approved by a majority of the directors who are Disinterested Directors, and (b) an increase in the annual rate of dividends if necessary to reflect any reclassification (including any reverse stock split), recapitalization, reorganization or any similar transaction which has the effect of reducing the number of outstanding shares of stock, unless the failure so to increase such rates is approved by a majority of the directors who are Disinterested Directors; and (ii) such Interested Shareholder shall not have become the beneficial owner of any additional shares of Voting Stock without the approval of a majority of the directors who are Disinterested Directors except as part of the transaction which results in such Interested Shareholder becoming an Interested Shareholder or pursuant to a stock ownership, stock option or other benefit plan maintained by the Corporation or any of its subsidiaries generally for the officers and/or employees of the Corporation or any of its subsidiaries. 4. After the Determination Date, such Interested Shareholder shall not have received the benefit, directly or indirectly (except proportionately as a stockholder), of any loans, advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantages provided by the Corporation, whether in anticipation of or in connection with such Business Combination or otherwise. 5. A proxy or information statement describing the proposed Business Combination and complying with the requirements of the Securities Exchange Act of 1934 and the rules and regulations thereunder (or any subsequent provisions replacing such act, rules or regulations) shall be mailed to all stockholders of the Corporation at least 30 days prior to the consummation of such Business Combination (whether or not such proxy or information statement is required to be mailed pursuant to such act or subsequent provisions). Section C. Certain Definitions. For purposes of this Article XIII: 1. The term "Business Combination" shall mean: (i) any merger or consolidation (except a merger or consolidation in which the Corporation is not the surviving constituent corporation) of the Corporation or any Subsidiary (as hereinafter defined) with or into (a) any Interested Shareholder, or (b) any other corporation (whether or not itself an Interested Shareholder) which is, or after such merger or consolidation would be, an Affiliate or Associate (as those terms are defined on July 1, 1985 in Rule 12b-2 under the Securities Exchange Act of 1934, as amended) of an Interested Shareholder; (ii) any sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions) to or with any Interested Shareholder or any Affiliate or Associate of an Interested Shareholder of assets of the Corporation or any Subsidiary having a fair market value in excess of 10% of the Fair Market Value of the total consolidated assets of the Corporation as of the end of its most recent fiscal year ending prior to the time the determination is being made; (iii) any sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions) of all or a substantial part of the assets of an Interested Shareholder or an Affiliate or Associate of an Interested Shareholder to the Corporation or any Subsidiary for consideration having a Fair Market Value aggregating $5,000,000 or more; (iv) the issuance or transfer by the Corporation or any Subsidiary of any securities of the Corporation or any Subsidiary to any Interested Shareholder or any Affiliate or Associate of an Interested Shareholder other than the issuance of securities by the Corporation or any Subsidiary (a) upon the exercise of warrants or the conversion of convertible securities of the Corporation or any Subsidiary which are directly or indirectly owned by any Interested Shareholder or any Affiliate or Associate of any Interested Shareholder, or (b) in connection with any stock option, stock ownership or other benefit plan maintained by the Corporation or any Subsidiary generally for the officers and/or employees of the Corporation or any Subsidiary; (v) the adoption of any plan or proposal for the liquidation or dissolution of the Corporation proposed by or on behalf of any Interested Shareholder or any Affiliate or Associate of any Interested Shareholder; or (vi) any reclassification or recapitalization (including any reverse stock split) of the Corporation or a merger or consolidation (except a merger or consolidation in which the Corporation is not the surviving constituent corporation) of the Corporation with any Subsidiary or a reorganization or any other transaction (whether or not with or into or otherwise involving an Interested Shareholder) which has the effect, directly or indirectly, of increasing the proportionate share of the outstanding stock of any class of equity or convertible securities of the Corporation or any Subsidiary which is directly or indirectly owned by an Interested Shareholder or any Affiliate or Associate of an Interested Shareholder. 2. The term "Interested Shareholder" shall mean and include any person, corporation or other entity which is the beneficial owner, directly or indirectly, of 10% or more of the combined voting power of the then outstanding Voting Stock of the Corporation. 3. The term "Disinterested Director" shall mean and include each director of the Corporation who is not himself or herself the Interested Shareholder proposing the Business Combination or an Affiliate or Associate of such Interested Shareholder or an officer, director or employee of such Interested Shareholder or of an Affiliate or Associate of such Interested Shareholder. 4. A person shall be a "beneficial owner" of any Voting Stock: (i) which such person or any of its Affiliates or Associates beneficially owns, directly or indirectly; or (ii) which such person or any of its Affiliates or Associates has (a) the right to acquire (whether such right is exercisable immediately or only after the passage of time), pursuant to any agreement, arrangement or understanding or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise, or (b) the right to vote or to direct the vote pursuant to any agreement, arrangement or understanding; or (iii) which are beneficially owned, directly or indirectly, by any other person with which such person or any of its Affiliates or Associates has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting or disposing of any shares of Voting Stock. 5. For the purposes of determining whether a person is an Interested Shareholder pursuant to Paragraph 2 of this Section C, the number of shares of Voting Stock deemed to be outstanding shall include shares deemed owned through application of Paragraph 4 of this Section C but shall not include any other shares of Voting Stock which may be issuable to other persons pursuant to any agreement, arrangement or understanding, or upon exercise of conversion rights, warrants or options, or otherwise. 6. The term "Fair Market Value" shall mean: (i) in the case of stock, the highest closing sale price during the 30-day period immediately preceding the date in question of a share of such stock on the principal United States Securities Exchange registered under the Securities Exchange Act of 1934 on which such stock is listed, or, if such stock is not listed on any such exchange, the highest closing bid quotation with respect to a share of such stock during the 30-day period preceding the date in question on the National Association of Securities Dealers, Inc. Automated Quotations System or any system then in use, or if no such quotations are available, the fair market value on the date in question of a share of such stock as determined by a majority of the directors who are Disinterested Directors in good faith; and (ii) in the case of stock of any class of securities not traded on any securities exchange or in the over-the-counter market or in the case of property other than cash or stock, the fair market value of such securities or property on the date in question as determined by a majority of the directors who are Disinterested Directors in good faith. 7. The term "Subsidiary" shall mean any corporation of which a majority of the voting shares is owned, directly or indirectly, by the Corporation. 8. In the event of any Business Combination in which the Corporation survives, the phrase "consideration to be received" as used in Paragraphs 1 and 2 of Section B shall include the shares of Common Stock and/or the shares of any other class of outstanding Voting Stock retained by the holders of such shares. Section D. Powers of the Board of Directors. The Board of Directors acting by a majority of the directors who are Disinterested Directors shall have the power and duty to determine for the purpose of this Article XIII on the basis of information known to them after reasonable inquiry, all facts necessary to determine the applicability of the various provisions of this Article XIII including, (1) whether a person is an Interested Shareholder, (2) the number of shares of Voting Stock beneficially owned by any person, (3) whether a person is an Affiliate or Associate of another, and (4) whether the requirements of Section B have been met with respect to any Business Combination, and the good faith determination of a majority of the directors who are Disinterested Directors shall be conclusive and binding for all purposes of this Article XIII. Section E. No Effect on Fiduciary Obligations. Nothing contained in this Article XIII shall be construed to relieve any Interested Shareholder from any fiduciary obligation imposed by lain. Section F. Severability. In the event any provision (or any part thereof) of this Article XIII should be determined to be invalid, prohibited or unenforceable for any reason, the remaining provisions, and parts thereof, shall remain in full force and effect and enforceable against the Corporation and its shareholders, including any Interested Shareholder, to the fullest extent permitted by law. Section G. Amendment. Notwithstanding any other provision of the Articles of Incorporation, the By-Laws of the Corporation or applicable law, the affirmative vote of two-thirds of the votes of then outstanding Voting Stock, voting together as a single class, shall be required (1) to amend, modify or repeal this Article XIII, (2) adopt any provision of the Articles of Incorporation or By-Laws which is inconsistent with this Article XIII, or (3) prior to the fixing by the Board of Directors of any right or preference of any series of Preferred Stock which is inconsistent with the provisions of this Article XIII. ARTICLE XIV Notwithstanding any other provision of the Articles of Incorporation, the By-Laws of the Corporation or applicable law, (a) any special meeting of the stockholders called by a stockholder or stockholders must be called by a request in writing submitted by the holder or holders of at least 80% of the outstanding shares of stock entitled to vote, (b) the stockholders of the Corporation shall not be permitted to take action by means of written consents, and (c) the affirmative vote of at least 80% of the outstanding shares of stock entitled to vote shall be required (i) to amend, modify or repeal this Article XIV, (ii) adopt any provision of the Articles of Incorporation or By-Laws of the Corporation which is inconsistent with this Article XIV, or (iii) prior to the fixing by the Board of Directors of any right or preference of any series of Preferred Stock which is inconsistent with the provisions of this Article XIV. Upon the filing of these Restated Articles of Incorporation of the Florida Department of State, the Corporation's original Articles of Incorporation as heretofore amended, shall be superseded, and thereafter these Restated Articles of Incorporation shall in accordance with Section 607.194 of the Florida General Corporation Act, be the Articles of Incorporation of the Corporation. Witness our hands and seals and the Corporate Seal of said Corporation this 31st day of January, 1989. s/David H. Hughes DAVID H. HUGHES, President Hughes Supply, Inc. s/Robert N. Blackford ROBERT N. BLACKFORD, Secretary Hughes Supply, Inc. (CORPORATE SEAL) STATE OF FLORIDA ) ) COUNTY OF ORANGE ) Personally appeared before me, the undersigned authority, David H. Hughes, well known to me and known to me to be the President of Hughes Supply, Inc., and after having been duly sworn, he did depose and say that the foregoing Restated Articles of Incorporation were duly approved by the Board of Directors and stockholders of the Corporation as stated. Witness my hand and seal in the County and State aforesaid this 31st day of January, 1989. s/Eileen G. Weisenbarger NOTARY PUBLIC My Commission Expires: July 29, 1991 Notary Public, State of Florida APPENDIX A TO SECOND RESTATED ARTICLES OF INCORPORATION RESOLUTION ESTABLISHING SERIES A JUNIOR PARTICIPATING PREFERRED STOCK of HUGHES SUPPLY, INC. RESOLVED, that pursuant to the authority vested in this Board of Directors in accordance with the provisions of this Corporation's Articles of Incorporation, a series of Preferred Stock of this Corporation be, and it hereby is, created, and that the designation and amount thereof and the voting powers, preferences and relative, participating, optional and other special rights of the shares of such series, and the qualifications, limitations or restrictions thereof are as follows: Section 1. Designation and Amount. The shares of such series shall be designated as "Series A Junior Participating Preferred Stock" and the number of shares constituting such series shall be 300,000. Section 2. Dividends and Distributions. (A) Subject to the prior and superior rights of the holders of any shares of any series of Cumulative Preferred Stock ranking prior and superior to the shares of Series A Junior Participating Preferred Stock with respect to dividends, the holders of shares of Series A Junior Participating Preferred Stock shall be entitled to receive, when, as and if declared by the Board of Directors out of funds legally available for the purpose, quarterly dividends payable in cash on the third Friday in February, May, August and November of each year (each such date being referred to herein as a "Quarterly Dividend Payment Date"), commencing on the first Quarterly Dividend Payment Date after the first issuance of a share or fraction of a share of Series A Junior Participating Preferred Stock, in an amount per share (rounded to the nearest cent) equal to the greater of (a) $1.25 or (b) subject to the provision for adjustment hereinafter set forth, 100 times the aggregate per share amount of all cash dividends, and 100 times the aggregate per share amount (payable in kind) of all non-cash dividends or other distributions other than a dividend payable in shares of Common Stock or a subdivision of the outstanding shares of Common Stock (by reclassification or otherwise), declared on the Common Stock, par value $1.00 per share, of the Corporation (the "Common Stock") since the immediately preceding Quarterly Dividend Payment Date, or, with respect to the first Quarterly Dividend Payment Date, since the first issuance of any share or fraction of a share of Series A Junior Participating Preferred Stock. In the event the Corporation shall at any time after May 17, 1988 (the "Rights Declaration Date") (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the amount to which holders of shares of Series A Junior Participating Preferred Stock were entitled immediately prior to such event under clause (b) of the preceding sentence shall be adjusted by multiplying such amount by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. (B) The Corporation shall declare a dividend or distribution on the Series A Junior Participating Preferred Stock as provided in paragraph (A) above immediately after it declares a dividend or distribution on the Common Stock (other then a dividend payable in shares of Common Stock); provided that, in the event no dividend or distribution shall have been declared on the Common Stock during the period between any Quarterly Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date, a dividend of $1.25 per share on the Series A Junior Participating Preferred Stock shall nevertheless be payable on such subsequent Quarterly Dividend Payment Date. (C) Dividends shall begin to accrue and be cumulative on outstanding shares of Series A Junior Participating Preferred Stock from the Quarterly Dividend Payment Date next preceding the date of issue of such shares of Series A Junior Participating Preferred Stock, unless the date of issue of such shares is prior to the record date for the first Quarterly Dividend Payment Date, in which case dividends on such shares shall begin to accrue from the date of issue of such shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a date after the record date for the determination of holders of shares of Series A Junior Participating Preferred Stock entitled to receive a quarterly dividend and before such Quarterly Dividend Payment Date, in either of which events such dividends shall begin to accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends paid on the shares of Series A Junior Participating Preferred Stock in an amount less than the total amount of such dividends at the time accrued and payable on such shares shall be allocated pro rata on a share-by-share basis among all such shares at the time outstanding. The Board of Directors may fix a record date for the determination of holders of shares of Series A Junior Participating Preferred Stock entitled to receive payment of a dividend or distribution declared thereon, which record date shall be no more than 30 days prior to the date fixed for the payment thereof. Section 3. Voting Rights. The holders of shares of Series A Junior Participating Preferred Stock shall have the following voting rights: (A) Each share of Series A Junior Participating Preferred Stock shall entitle the holder thereof to 1 vote on all matters submitted to a vote of the stockholders of the Corporation. (B) Except as otherwise provided herein or by law, the holders of shares of Series A Junior Participating Preferred Stock end the holders of shares of Common Stock shall vote together as one class on all matters submitted to a vote of stockholders of the Corporation. (C) Holders of Series A Junior Participating Preferred Stock shall have no special voting rights and their consent shall not be required (except to the extent they are entitled to vote with holders of Common Stock as set forth herein) for taking any corporate action. Section 4. Certain Restrictions. (A) Whenever quarterly dividends or other dividends or distributions payable on the Series A Junior Participating Preferred Stock as provided in Section 2 are in arrears, thereafter and until all accrued end unpaid dividends and distributions, whether or not declared, on shares of Series A Junior Participating Preferred Stock outstanding shall have been paid in full, the Corporation shall not (i) declare or pay dividends on, make any other distributions on, or redeem or purchase or otherwise acquire for consideration, any shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Junior Participating Preferred Stock; (ii) declare or pay dividends on, or make any other distributions on, any shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series A Junior Participating Preferred Stock, except dividends paid ratably on the Series A Junior Participating Preferred Stock and all such parity stock on which dividends are payable or in arrears in proportion to the total amounts to which the holders of all such shares are then entitled; (iii) redeem or purchase or otherwise acquire for consideration shares of any stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series A Junior Participating Preferred Stock, provided that the Corporation may at any time redeem, purchase or otherwise acquire shares of any such parity stock in exchange for shares of any stock of the Corporation ranking junior (either as to dividends or upon dissolution, liquidation or winding up) to the Series A Junior Participating Preferred Stock; (iv) purchase or otherwise acquire for consideration any shares of Series A Junior Participating Preferred Stock, or any shares of stock ranking on a parity with the Series A Junior Participating Preferred Stock, except in accordance with a purchase offer made in writing or by publication (as determined by the Board of Directors) to all holders of such shares upon such terms as the Board of Directors, after consideration of the respective annual dividend rates and other relative rights and preferences of the respective series and classes, shall determine in good faith will result in fair and equitable treatment among the respective series or classes. (B) The Corporation shall not permit any subsidiary of the Corporation to purchase or otherwise acquire for consideration any shares of stock of the Corporation unless the Corporation could, under paragraph (A) of this Section 4, purchase or otherwise acquire such shares at such time and in such manner. Section 5. Reacquired Shares. Any shares of Series A Junior Participating Preferred Stock purchased or otherwise acquired by the Corporation in any manner whatsoever shall be retired and cancelled promptly after the acquisition thereof. All such shares shall upon their cancellation become authorized but unissued shares of Preferred Stock and may be reissued as part of a new series of Preferred Stock to be created by resolution or resolutions of the Board of Directors, subject to the conditions and restrictions on issuance set forth herein. Section 6. Liquidation, Dissolution or Winding Up. (A) Upon any liquidation (voluntary or otherwise), dissolution or winding up of the Corporation, no distribution shall be made to the holders of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Junior Participating Preferred Stock unless, prior thereto, the holders of shares of Series A Junior Participating Preferred Stock shall have received $100 per share, plus an amount equal to accrued and unpaid dividends and distributions thereon, whether or not declared, to the date of such payment (the "Series A Liquidation Preference"). Following the payment of the full amount of the Series A Liquidation Preference, no additional distributions shall be made to the holders of shares of Series A Junior Participating Preferred Stock unless, prior thereto, the holders of shares of Common Stock shall have received an amount per share (the "Common Adjustment") equal to the quotient obtained by dividing (i) the Series A Liquidation Preference by (ii) 100 (as appropriately adjusted as set forth in subparagraph C below to reflect such events as stock splits, stock dividends and recapitalizations with respect to the Common Stock) (such number in clause (ii), the "Adjustment Number"). Following the payment of the full amount of the Series A Liquidation Preference and the Common Adjustment in respect of all outstanding shares of Series A Junior Participating Preferred Stock and Common Stock, respectively, holders of Series A Junior Participating Preferred Stock and holders of shares of Common Stock shall receive their ratable and proportionate share of the remaining assets to be distributed in the ratio of the Adjustment Number to 1 with respect to such Preferred Stock and Common Stock, on a per share basis, respectively. (B) In the event, however, that there are not sufficient assets available to permit payment in full of the Series A Liquidation Preference and the liquidation preferences of all other series of preferred stock, if any, which rank on a parity with the Series A Junior Participating Preferred Stock, then such remaining assets shall be distributed ratably to the holders of such parity shares in proportion to their respective liquidation preferences. In the event, however, that there are not sufficient assets available to permit payment in full of the Common Adjustment, then such remaining assets shall be distributed ratably to the holders of Common Stock. (C) In the event the Corporation shall at any time after the Rights Declaration Date (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the Adjustment Number in effect immediately prior to such event shall be adjusted by multiplying such Adjustment Number by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. Section 7. Consolidation, Merger, etc. In case the Corporation shall enter into any consolidation, merger, combination or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property, then in any such case the shares of Series A Junior Participating Preferred Stock shall at the same time be similarly exchanged or changed in an amount per share (subject to the provision for adjustment hereinafter set forth) equal to 100 times the aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the case may be, into which or for which each share of Common Stock is changed or exchanged. In the event the Corporation shall at any time after the Rights Declaration Date (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the amount set forth in the preceding sentence with respect to the exchange or change of shares of Series A Junior Participating Preferred Stock shall be adjusted by multiplying such amount by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. Section 8. No Redemption or Conversion. The shares of Series A Junior Participating Preferred Stock shall not be redeemable or convertible into any other securities of the Corporation. Section 9. Ranking. The Series A Junior Participating Preferred Stock shall rank junior to all other series of the Corporation's Preferred Stock as to the payment of dividends and the distribution of assets, unless the terms of any such series shall provide otherwise. Section 10. Amendment. In the event shares of Series A Junior Participating Preferred Stock are outstanding, the Articles of Incorporation of the Corporation shall not be further amended in any manner which would materially alter or change the powers, preferences or special rights of the Series A Junior Participating Preferred Stock so as to affect them adversely without the affirmative vote of the holders of two-thirds or more of the outstanding shares of Series A Junior Participating Preferred Stock, voting separately as a class. Section 11. Fractional Shares. Series A Junior Participating Preferred Stock may be issued in fractions of a share which shall entitle the holder, in proportion to such holders fractional shares, to exercise voting rights, receive dividends, participate in distributions and to have the benefit of all other rights of holders of Series A Junior Participating Preferred Stock. EX-3 5 COMPOSITE BY-LAWS -of- HUGHES SUPPLY, INC. (As Amended May 24, 1994) ARTICLE I Stock 1. Certificates of Stock shall be issued in numerical order from the stock certificate book, and be signed by the President or the Vice-president, and the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary, and sealed with the seal of the Corporation. The seal may be facsimile, engraved or printed. If such certificate is signed by (a) a transfer agent or an assistant transfer agent, other than the Corporation itself, or by (b) a transfer clerk acting on behalf of the Corporation and a registrar, the signature of any of those officers named herein may be facsimile. In case any officer who signed, or whose facsimile signature has been used on any certificate shall cease to be such officer for any reason before the certificate has been delivered by the Corporation, such certificate may nevertheless be adopted by the Corporation and issued and delivered as though the person who signed it or whose facsimile signature has been used thereon had not ceased to be such officer. Subscription warrants, scrip for fractional shares and similar certificates may be issued from time to time and be signed by the President, a Vice President or the Treasurer, and, where otherwise required, sealed with the seal of the Corporation. The signature of the signing officer, and the seal may be facsimile, engraved or printed. 2. Transfer of Stock shall be made only on the books of the Corporation, in person or by attorney, upon surrender of the certificate evidencing the stock sought to be transferred, properly endorsed or assigned; the certificate so surrendered shall be cancelled as and when a new certificate or certificates are issued. 3. Lost Certificates. The Board of Directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the Corporation alleged to have been lost or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost or destroyed. When authorizing such issue of a new certificate or certificates, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost or destroyed certificate or certificates, or his legal representative, to advertise the same in such manner as it shall require and/or to give the Corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the Corporation with respect to the certificate alleged to have been lost or destroyed. 4. Record Date, Subsequent Transfers. The Board of Directors shall have power to 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 dividends or the date for the allotment of any rights or the date when any change or conversion or exchange of stock shall go into effect or a date in connection with the obtaining of any consent of stockholders for any purpose, 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 to receive payment of any such dividend or to any such allotment of rights or to exercise rights in respect of any such change, conversion or exchange of stock or to give any such consent, and, in such case, such stockholders, and only such stockholders, as shall be stockholders on the record date so fixed shall be entitled to notice of, and vote at, such meeting and any adjournment thereof or to receive payment of any 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. ARTICLE II Stockholders 1. The Annual Meeting of this corporation shall be held at ten o'clock a.m. on the third Tuesday of May of each year, if not a legal holiday, and if a legal holiday, then the day following, commencing with the year A.D. 1970. Each Annual Meeting shall be held at the principal office of the Corporation unless some other place in or out of the State of Florida is designated by the Board of Directors three weeks or more before the day of such Meeting. 2. Special Meetings of the stockholders may be called at any time by resolution of the Board of Directors or by the President and may be called at any time by a request in writing submitted by the holder or holders of at least 801 of the out-standing shares of stock entitled to vote. Such request must state the purpose of the meeting. 3. Written Consents. The stockholders of the Corporation shall not be permitted to take action by means of written consents. 4. Notice of Stockholders' Meetings of the Corporation shall be given by mailing a written notice of such meeting, signed by the President, or a Vice President or the Secretary or an Assistant Secretary, of the Corporation, to each stockholder of record entitled to vote at such meeting at his address as it appears on the records of the Corporation not less than ten (10) nor more than sixty (60) days before the date set for such meeting. The notice shall state the purpose of the meeting and the time and place it is to be held. Notice mailed to a stockholder in accordance with the provisions of this By-Law shall be deemed sufficient for said meeting and if any stockholder shall transfer any of his stock after notice, it shall not be necessary to notify the transferee. Any meeting of stockholders may be held either within or without the State of Florida. Any stockholder may waive notice of any meeting either before, or at, or after, the meeting. When stockholders who hold four-fifths (4/5) of the voting stock of the Corporation having the right and entitled to vote at any meeting, shall be present in person, or by proxy, at any meeting, however called or notified, and shall sign a written consent thereto on the record of the meeting, the acts of such meeting shall be as valid as if legally called and notified. 5. A Quorum at any meeting of the stockholders shall consist of a majority of the stock of the Corporation entitled to vote thereat represented in person or by proxy, and a majority of such quorum shall decide any question that may come before the meeting; provided, however, that: (i) No plan of consolidation or merger under which the Corporation is not the surviving constituent corporation shall be deemed approved by the stockholders unless such plan of consolidation or merger shall be approved by the affirmative vote of two-thirds of the total number of shares of stock outstanding and entitled to vote; and (ii) No amendment to the Articles of Incorporation may amend or delete the requirement that two-thirds of the total number of shares of stock outstanding and entitled to vote approve any plan of consolidation or merger under which the Corporation is not the surviving constituent corporation, unless at a meeting duly called two-thirds of the total number of shares of stock outstanding and entitled to vote shall approve such amendment or deletion of such requirement; and (iii) In addition to any affirmative vote required by law or the Articles of Incorporation, and except as expressly provided in Section 8 of Article XIII of the Articles of Incorporation ("Article XIII"), the affirmative vote of, the holders of two-thirds of the then outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors shall be required for the approval or authorization of any Business Combination (as defined in Article XIII). The provisions of Section A of Article XIII shall not be applicable to any particular Business Combination, and such Business Combination shall require only such affirmative vote as is required by law or any other Article of the Articles of Incorporation, if the Business Combination shall have been approved by a majority of the directors who are Disinterested Directors (as defined in Article XIII), or if all of the conditions of Section B of Article XIII are met; and (iv) Notwithstanding any other provision of the By-Laws of the Corporation or applicable law, the affirmative vote of two- thirds of the votes of the then outstanding Voting Stock (as defined in the Articles of Incorporation), voting together as a single class, shall be required (1) to amend, modify or repeal Article XIII of the Articles of Incorporation ("Article XIII"), (2) adopt any provision of the Articles of Incorporation or By-Laws which is inconsistent with Article XIII, or (3) prior to the fixing by the Board of Directors of any right or preference of any series of Preferred Stock which is inconsistent with the provisions of Article XIII; and (v) In the event the number of directors of the Corporation shall be fixed by the stockholders in accordance with Section A of Article XII of the Articles of Incorporation, such number shall be the number fixed by the holders of record of at least 80% of the outstanding shares of stock entitled to vote; and (vi) Notwithstanding any other provision of the By-Laws of the Corporation or applicable law, the affirmative vote of the holders of record of at least 80% of the outstanding shares of stock entitled to vote shall be required to remove directors of the Corporation without cause; and (vii) Notwithstanding any other provision of the By-Laws of the Corporation or applicable law, the affirmative vote of the holders of record of at least 80% of the outstanding shares of stock entitled to vote shall be required (1) to amend, modify or repeal Article VII or Article XIV of the Articles of Incorporation ("Article VII or XIV"), (2) adopt any provision of the Articles of Incorporation or the By-Laws of the Corporation which is inconsistent with Article VII or XIV, or (3) prior to the fixing by the Board of Directors of any right or preference of any series of Preferred Stock which is inconsistent with the provisions of Article XII or XIV. In the absence of a quorum, a majority of the shares present in person or by proxy and entitled to vote may adjourn any meeting from time to time until a quorum shall be present, any business may be transacted which might have been transacted at the meeting as originally called unless otherwise provided by statute, and no notice of an adjourned meeting need be given. 6. Judges. At every meeting of stockholders the vote shall be conducted by two or more judges appointed for that purpose by the Board of Directors; and all questions respecting the qualification of voters, the validity of the proxies and the acceptance and rejection of votes shall be decided by such judges. Before acting at any meeting, the judges shall be sworn faithfully to execute their duties, with strict impartiality and according to the best of their ability. If fewer than two judges appointed by the Board of Directors to act at any meeting shall be present and willing to act at such meeting, the stockholders present at the meeting in person or by proxy may, by a per capita vote, appoint one or more judges so to act. ARTICLE III Directors 1. Powers. The business and property of the Corporation shall be managed by a Board of Directors, all of whom shall be of full age and at least one of whom shall be a citizen of the United States, and such Board of Directors shall have full control over the affairs of the Corporation and shall be authorized to exercise all of its corporate powers unless otherwise provided in these By- Laws. 2. Number and Term of Directors. The Board of Directors shall consist of three or more directors, the exact number to be fixed and determined from time to time by resolution of a majority of the full Board of Directors or by holders of record of at least 80% of the outstanding shares of stock entitled to vote at any meeting thereof. The directors shall be classified with respect to the time for which they shall severally hold office by dividing them into three classes, each consisting of as near one-third of the whole number of Directors as practicable, and all directors of the Corporation shall hold office until their successors are elected and qualified. The first such classification shall be made at the Annual fleeting of the Stockholders to be held in the year 1975. At that Annual Meeting, the directors shall be classified for staggered terms of 1, 2 and 3 years, respectively, and at each successive Annual Meeting the successors to the class of directors whose terms expire that year shall be elected to hold office for the term of 3 years, so that the term of office of one class of directors shall expire in each year. Any vacancy which shall occur in a class of directors prior to the expiration of the term of such class may be filled by the Board of Directors. A director elected to fill a vacancy shall hold office only until the next election of directors by the stockholders. An increase in the number of directors shall be deemed to create vacancies for the purpose of this section. 3. Election of Directors. At the Annual Meeting of Stockholders, directors shall be elected by a plurality of the votes cast at such election. At the election of directors, each shareholder shall have the right to vote the number of shares owned by him for as many persons as there are directors to be elected. There shall be no cumulative voting. Nominations for election of the Board of Directors may be made by the Board of Directors, or by any stockholder of any outstanding class of capital stock of the Corporation entitled to vote for the election of directors. Nominations, other than those made by the existing Board of Directors, shall be made in writing and shall be delivered or mailed to the President of the Corporation not less than 14 days nor more than 50 days prior to any meeting of stockholders called for the election of directors; provided, however, that if less than twenty-one days' (21) notice of the meeting is given to stockholders such nomination shall be mailed or delivered to the President of the Corporation not later than the close of business on the 7th day following the day on which the notice of meeting was mailed. Such nomination and notification shall contain the following information to the extent known to the notifying stockholder: (i) The names and addresses of the proposed nominee or nominees; (ii) The principal occupation of each proposed nominees; (iii) The total number of shares that to the knowledge of the notifying or nominating shareholders will be voted for each of the proposed nominees; (iv) The name and residence address of each notifying or nominating shareholder; and (v) The number of shares owned by the notifying or nominating shareholder. Nominations not made in accordance herewith may, in his discretion be disregarded by the chairman of the meeting, and upon his instructions, the judges of election may disregard all votes cast for each such nomination. 4. Place of Meeting. Meetings of the Board of Directors or of any committee thereof may be held either within or without the State of Florida. 5. Organization Meetings of the Board of Directors shall be held as soon as practicable each year after the annual election of directors for the purpose of organization, election of officers and the transaction of other business. No notice of such meeting shall be required. Such organization meeting may, however, be held at any other time or place which shall be specified in a notice given, as hereinafter provided, for special meetings of the Board, or in a consent and waiver of notice thereof signed by all of the directors. 6. Regular Meetings. The Board of Directors may from tine to time, by resolution, appoint the time and place for holding regular meetings of the Board, if by it deemed advisable, and such regular meetings shall thereupon be held at the time and place so appointed, without the giving of any notice with regard thereto. In case the day appointed for a regular meeting shall fall upon a Saturday or legal holiday in the State of Florida, such meeting shall be held on the next succeeding day not a Saturday or legal holiday in Florida, at the regularly appointed hour. Except as otherwise provided in the By-Laws, any and all business may be transacted at any regular meeting. 7. Special Meetings. Special meetings of the Board of Directors shall be held whenever called by the Chairman, the President, or by any two of the directors. Notice to a director of any such meeting may be given in writing, by mailing the same to the residence or place of business of the director as shown on the books of the Corporation not later than two days before the day on which the meeting is to be held, or may be given by sending the same to him at such place by telegraph or by delivering the same to him personally or leaving the same for him at his place of business or by giving the same to him personally or by telephone, not later than the day before such day of meeting. Notice of any meeting of the Board need not, however, be given to any director, if waived by him in writing (including telegram, cablegram or radiogram) or if he shall be present at the meeting; and any meeting of the Board of Directors shall be a legal meeting without any notice thereof having been given, if all members shall be present thereat. Except as otherwise provided in the By-Laws or as may be indicated in the notice thereof, any and all business may be transacted at any special meeting. 8. Quorum and Manner of Acting. Except as otherwise provided in the By-Laws, a majority of the directors in office at the time of any meeting of the Board of Directors, but not less than two directors, shall constitute a quorum for the transaction of business; and, except as otherwise required by statute or by the Certificate of Incorporation or any amendment thereto, or by the By-Laws, the act of a majority of the directors present at any such meeting at which a quorum is present shall be the act of the Board of Directors. In the absence of a quorum, a majority of the directors present may adjourn any meeting, from time to time, until a quorum is present. No notice of any adjourned meeting need be given. 9. Business Combination. The Board of Directors acting by a majority of the directors who are Disinterested Directors (as defined in Article XIII of the Articles of Incorporation) ("Article XIII") shall have the power and duty to determine for the purpose of Article XIII on the basis of information known to them after reasonable inquiry, all facts necessary to determine the applicability of the various provisions of Article XIII, including (1) whether a person is an Interested Shareholder (as defined in Article XIII), (2) the number of shares of Voting Stock (as defined in Article XIII) beneficially owned by any person, (3) whether a person is an Affiliate or Associate (as defined in Article XIII) of another, and (4) whether the requirements of Section 8 of Article XIII have been met with respect to any Business Combination (as defined in Article XIII), and the good faith determination of a majority of the directors who are Disinterested Directors shall be conclusive and binding for all purposes of Article XIII. 10. Directors' Compensation. The Board of Directors shall have authority to determine from time to time the amount, if any, of compensation and expenses which shall be paid to its members for attendance at meetings of the Board or of any committee of the Board. The Board of Directors shall also have power, in its discretion, to provide for and to pay to directors rendering services to the Corporation not ordinarily rendered by directors, as such, special compensation appropriate to the value of such services, as determined by the Board from time to time. 11. Resignations. Any director of the Corporation may resign at any time either by oral tender of resignation at any meeting of the Board or by giving written notice thereof to the Chairman, the President, or the Secretary. Such resignation shall take effect at the time specified therefor; and, unless otherwise specified with respect thereto, the acceptance of such resignation shall not be necessary to make it effective. 12. Removal of Directors. Any director may be removed at any time for cause by the affirmative vote of the holders of record of a majority of the outstanding shares of stock entitled to vote, or without cause by the affirmative vote of the holders of record of at least 80% of the outstanding shares of stock entitled to vote, at a meeting of the stockholders called for the purpose; and the vacancy in the Board caused by such removal may be filled by the stockholders or, if the stockholders shall have failed to do so, such vacancy may be filled by the Board of Directors at any meeting by the affirmative vote of a majority of the remaining directors. ARTICLE IV Officers, Employees and Agents 1. Officers, Term of Office, Vacancies, Removal. The Board of Directors shall elect a President, one or more Vice Presidents of such precedence, rank or additional designation, if any, among the same as the Board of Directors may provide, a Secretary and a Treasurer, such election to take place, if practicable, at the Organization Meeting of the Board of Directors each year, and such officers shall hold office, subject to removal by the Board, until the Organization Meeting of the Board of Directors in the next subsequent year and until their respective successors are elected and qualified. In addition, the Board of Directors in its discretion may provide for and elect a Chairman of the Board of Directors, who may also hold the office of President, and a Vice Chairman of the Board, who may also hold the office of Vice President or President. The Board of Directors may appoint a successor to fill a vacancy in any office for the remainder of the term. The Board of Directors or the Executive Committee may, from time to time, appoint any one or more Assistant Vice Presidents, one or more Assistant Secretaries, one or more Assistant Treasurers, and such other officers and agents as may appear to be necessary or advisable in the conduct or affairs of the Corporation; and all such officers shall hold office during the pleasure of the Board. Any officers and agents may be removed at any time, for or without cause, by the Board of Directors, or, in case any such officer or agent may be appointed pursuant to these By-Laws by the Executive Committee, he may be removed by the Executive Committee. 2. Chairman. The Chairman shall be the chief executive officer of the Corporation and, under the direction of the Board of Directors, shall have general executive powers in the management and direction of the business and affairs of the Corporation, as well as the specific powers conferred by these By-Laws or by the Board of Directors. The Chairman shall preside, when present, at all meetings of the stockholders, the Board of Directors and the Executive Committee. 3. President. The President shall be the chief operating and administrative officer of the Corporation and, under the direction of the Board of Directors, shall, subject to the Chairman, have direct general supervision over the management, business, properties and affairs of the Corporation. In the absence of the Chairman, he shall preside at all meetings of the stockholders, the Board of Directors and the Executive Committee. He shall have general executive powers, including all powers required by law to be exercised by a president of a corporation as such, as well as the specific powers conferred by these By-Laws or by the Board of Directors. 4. Vice President. Each Vice President shall have general executive powers as well as the specific powers conferred by these By-Laws. He shall also have such further powers and duties as may from time to time be conferred upon, or assigned to, him by the Board of Directors, the Chairman or the President. 5. Secretary. The Secretary shall attend to the giving of notice of all meetings of stockholders and of the Board of Directors required by these By-Laws to be given, and shall keep true records of all proceedings thereat. Be shall have charge of the corporate seal and shall keep and account for all books, documents, papers and records of the Corporation, except those for which some other officer or agent is properly accountable, and shall generally perform all the duties usually appertaining to the office of secretary of a corporation. In the absence of the Secretary, an Assistant Secretary or Secretary pro tempore shall perform his duties. 6. Treasurer. The Treasurer shall have the care and custody of all moneys, funds and securities of the Corporation. He shall disburse the funds of the Corporation in the manner ordered by the Board of Directors and shall keep full and accurate accounts of receipts and disbursements of the Corporation. He shall, whenever required to do so, render an account of all his transactions as Treasurer to the Board of Directors. He shall perform such other duties as shall be assigned to him by the Board of Directors, the Chairman or the President. In the absence of the Treasurer, his duties shall be performed by an Assistant Treasurer or by another officer thereunto designated by the Board of Directors, the Chairman or the President. 7. Additional Officers; Duties and Powers. In addition to the foregoing especially enumerated duties and powers the several officers and agents of the Corporation, whether or not specifically referred to in these By-Laws, shall perform such duties and exercise such powers, in addition to those for which provision is made in these By-Laws, as the Board of Directors or Executive Committee may from time to time determine or as may be assigned to them by any competent superior officer. 8. Compensation. The Board of Directors shall fix the compensation of the Chairman and the President and of the senior and executive Vice Presidents, if any; the compensation of all other officers of the Corporation shall be fixed by the Board of Directors, the Executive Committee, or the President. ARTICLE V Committees of the Board 1. Executive Committee; Constitution, Powers, Vacancies. The Board of Directors may, resolution adopted by affirmative vote of a majority of the whole Board, appoint an Executive Committee, to consist of the Chairman and the President, ex officio, and one or more other directors (with such alternates, if any, as may be deemed desirable), which Executive Committee shall have and may exercise, when the Board is not in session, all the powers of the Board of Directors in the management of the business and affairs of the Corporation, including the power to authorize the seal of the Corporation to be affixed to all papers which may require it, and also including the power, from time to time, to appoint one or more attorneys-in-fact to act for and in representation of the Corporation, either generally or specially, judicially or extra- judicially, and to delegate to any such attorney or attorneys-in- fact all or any of the powers which, in the judgment of the Executive Committee, may be necessary, convenient or suitable for exercise in any country or jurisdiction in the transaction of the business of the Corporation or the defense or enforcement of its rights, even though such powers be herein provided or directed to be exercised by a designated officer of the Corporation; provided, that the foregoing shall not be construed as authorizing action by the Executive Committee with respect to any action which by these By-Laws or by the Certificate of Incorporation or any amendment thereto, or by statute, is required to be taken by the Board of Directors, as such. As far as practicable, members of the Executive Committee and their alternates (if any) shall be appointed at the Organization Meeting of the Board in the next subsequent year and until their respective successors are appointed. Any vacancy in the Executive Committee may be filled by affirmative vote of a majority of the whole Board of Directors. 2. Executive Committee; Meetings. Stated meetings of the Executive Committee, of which no notice shall be necessary, shall be held at such times and at such places as shall be fixed, from time to time, by resolution adopted by the Executive Committee. Special meetings of the Executive Committee may be called by the Chairman or the President, or by the Chairman of the Executive Committee (if he be a person other than the Chairman or the President) or by any other two members of the Executive Committee, at any time. Notice of any special meeting of the Executive Committee may be given in the manner provided in the By-Laws for giving notice of a special meeting of the Board of Directors, but notice of any such meeting need not be given to any member of the Executive Committee if waived by him in writing (including telegram, cablegram or radiogram) or if he shall be present at the meeting; and any meeting of the Executive Committee shall be a legal meeting, without any notice thereof having been given, if all the members shall be present thereat. A majority of the Executive Committee shall constitute a quorum for the transaction of business; and the act of a majority of those present at any meeting at which a quorum is present shall be the act of the Executive Committee. 3. Executive Committee; Records. The Executive Committee shall keep a record of its acts and proceedings and shall report the same, from time to time, to the Board of Directors. The Secretary of the Corporation, or in his absence, an Assistant Secretary, shall act as secretary to the Executive Committee; or the Committee may, in its discretion, appoint its own secretary. 4. Other Committees. The Board of Directors may from time to time, by resolution passed by a majority of the whole Board, designate one or more other committees for any purpose, each consisting of two or more Directors, and may delegate to any such committee such powers of the Board of Directors in the management of the business and affairs of the Corporation as the Board may deem expedient, subject to the provisions of these By-Laws, with power to sub-delegate such powers, if by the Board deemed desirable. ARTICLE VI Miscellaneous 1. Fiscal Year. The fiscal year of the corporation shall end on Friday of the last weekend in January of each year, effecting a 52-53 week fiscal year basis. 2. Corporate Seal. The Secretary or any Assistant Secretary, or other officer thereunto designated by the Secretary, shall have authority to affix the corporate seal to any document requiring such seal and to attest the same. 3. Execution of Instruments. The bills, notes, checks, and other instruments for the payment of money, all agreements, indentures, mortgages, deeds, conveyances, transfers, certificates, declarations, receipts, discharges, releases, satisfactions, settlements, petitions, schedules, accounts, affidavits, bonds, undertakings, proxies and other instruments or documents may be signed, executed, acknowledged, verified, delivered, or accepted on behalf of the corporation by the Chairman, the President, any Vice President, the Secretary or the Treasurer. Any such instruments may also be signed, executed, acknowledged, verified, delivered or accepted on behalf of the corporation in such other manner and by such other officers, employees or agents of the corporation as the Board of Directors or Executive Committee may from time to time direct. 4. Dividends. Dividends shall be declared only at such times and in such amounts as the Board of Directors shall direct. ARTICLE VII Amendments Except as otherwise provided herein or in the Articles of Incorporation, these By-Laws or any provisions thereof may be amended, altered, or repealed, in any particulars and new By-Laws or provisions, not inconsistent with any provision of the Certificate of Incorporation or any provision of law, may be adopted by the Board of Directors, at any meeting thereof, by the by the affirmative vote of a majority of the whole number of Directors, or by the stockholders of the Corporation, at any meeting of the stockholders, provided, however, that the power of the Directors to make and alter By-Laws shall be subject to such restrictions upon the exercise of such power as may be expressly imposed by the stockholders in any By-Laws adopted by them from time to time. ________________________ Adopted by the Board of Directors of Hughes Supply, Inc. on November 18, 1986. EX-10 6 AMENDMENT NO. 1 TO HUGHES SUPPLY, INC. DIRECTORS' STOCK OPTION PLAN WHEREAS, the Board of Directors of Hughes Supply, Inc. (the "Corporation") approved the Directors' Stock Option Plan (the "Plan") on January 24, 1989 in the form attached hereto as Appendix "A"; WHEREAS, the letter from the staff of the Securities and Exchange Commission referred to in Section 14 of the Plan was issued by the Commission Staff on April 6, 1989 satisfying the conditions of Section 14; WHEREAS, the shareholders of the Corporation approved the Plan at the Annual Meeting of Shareholders held on May 30, 1989; WHEREAS, in accordance with the terms of Sections 3 and 4 of the Plan, options with respect to all of the stock authorized for options under the Plan have been granted and no additional options under the Plan may be granted in the absence of the expiration or termination of presently outstanding options or an amendment to the Plan increasing a number of shares as to which options may be granted; and WHEREAS, the Board of Directors of the Corporation on March 24, 1994 approved and recommended shareholder approval of an amendment to the Plan to increase by 75,000 the number of shares as to which options may be granted under the Plan; and WHEREAS, the shareholders approved the recommended amendment at Annual Meeting of Shareholders held on May 24, 1994 increasing from 60,000 to 135,000 the number of shares with respect to which options may be granted under the Plan from 60,000 shares to 135,000 shares; NOW, THEREFORE, IN WITNESS THEREOF, the following provisions of the Plan are hereby amended and modified as follows: Section 3. Section 3. Participants and Options is hereby amended and modified to amend and modify subparagraph (ii) thereof and to add a new subparagraph (iii) as follows: 3. PARTICIPANTS AND OPTIONS (ii) In addition to the options referred to in subparagraph (i) above, during the term of the Plan until, but not including, the date of the 1994 annual meeting of shareholders a subsequent grant of options for an aggregate of 12,000 shares, or such lesser number of shares as shall then constitute all of the remaining shares which are authorized for options under the Plan but which are not then subject to options under the Plan, within the limitation set forth in Section 4 hereof, divided equally (rounded, if necessary, down to the nearest whole number of shares) among the Participants under the Plan, will be made at the meeting of the Board of Directors of the Corporation immediately following the 1990 annual meeting of stockholders of the Corporation and at each Board meeting immediately following each annual meeting of stockholders thereafter during the term of the Plan and prior to the 1994 annual meeting of shareholders. (iii) In addition to the options referred to in subparagraphs (i) and (ii) above, during the term of the Plan beginning with the date of the 1994 annual meeting of shareholders a subsequent grant of options for an aggregate of 15,000 shares or such lesser number of shares as shall then constitute all of the remaining shares which are authorized for options under the Plan but which are not then subject to options under the Plan, within the limitations set forth in Section 4 hereof, divided equally (rounded, if necessary, down to the nearest whole number of shares) among the Participants under the Plan, will be made at the meeting of the Board of Directors of the Corporation immediately following the 1994 annual meeting of stockholders of the Corporation at each Board meeting immediately following each annual meeting of stockholders thereafter during the term of the Plan. Section 4. Section 4. Stock is hereby amended and modified to read in its entirety as follows: 4. STOCK The stock which may be subject to options under the Plan shall be 135,000 shares of the Corporation's authorized but unissued or reacquired $1.00 par value common stock hereafter sometimes called capital stock. The aggregate number of shares of capital stock which are subject to outstanding options and which will be subject to options to be granted under the Plan shall be subject to adjustment in accordance with the provisions of subsection (h) of Section 5 hereof. In the event that any outstanding option under the Plan for any reason expires or is terminated, the shares of capital stock allocable to the unexercised portion of such option may again be subject to an option under the Plan. Of the stock which may be subject to options under the Plan, 75,000 of such shares have been added by an amendment to the Plan approved by the stockholders on May 24, 1994 and such additional shares constitute shares as to which "Amendment Options" within the meaning of Section 6 hereof may be granted and approval by the stockholders of such amendment extends the term of the Plan in accordance with Section 6 hereof. Except as hereinbefore set forth, the Plan shall remain unchanged and in full force and effect. The amendments and modifications set forth in this Amendment No. 1 to Hughes Supply, Inc. Directors' Stock Option Plan were approved and adopted by the Board of Directors and the stockholders on the dates hereinabove set forth. Witness my hand and the seal of the Corporation this 24th day of May, 1994. s/Robert N. Blackford Robert N. Blackford, Secretary Hughes Supply, Inc. HUGHES SUPPLY, INC. Directors' Stock Option Plan 1. PURPOSE This Directors Stock Option Plan (the "Plan") is intended as an incentive and to encourage Directors of Hughes Supply, Inc. (the "Corporation") who are not, and for the previous twelve (12) months have not been, employees of the Corporation eligible to participate in the Hughes Supply, Inc. 1988 Stock Option Plan (the "Employee Plan") to increase their stock ownership and proprietary interest in the success of the Corporation, to encourage them to continue as Directors of the Corporation and as an incentive to work to increase the value of the stock of the Corporation. The options to be issued pursuant to this Plan shall not constitute incentive stock options within the meaning of Sec. 422A of the 1986 Internal Revenue Code, as amended (the "Code"). 2. ADMINISTRATION The Plan shall be administered by a Directors' Stock Option Plan committee appointed by the Board of Directors of the Corporation (the "Committee"). The Committee shall consist of not less than three (3) members of the Corporation's Board of Directors who are not,,employees of the Corporation and who are "disinterested persons as that term is defined in Rule 16b-3(d) under the Securities Exchange Act of 1934 (the "Exchange Act") or any successor statute or regulation regarding the same subject matter. The Board of Directors may from time to time remove members from, or add members to, the Committee. Vacancies on the Committee, howsoever caused, shall be filled by the Board of Directors. The Committee shall elect one of its members as Chairman, and shall hold meetings at such times and places as it may determine. Acts of the Committee taken by a majority of the Committee at a meeting at which a quorum is present, or acts reduced to or approved in writing by a majority of the members of the Committee, shall be the valid acts of the Committee. A nonemployee Director shall receive options under the Plan whether or not such Director also serves as a member of the Committee. Subject to the provisions of the Plan the Committee may from time to time adopt such rules for administration of the Plan as it deems appropriate. The interpretation and construction by the Committee of any provisions of the Plan or of any option granted under it shall be final unless otherwise determined by the Board of Directors. No member of the Board of Directors or the Committee shall be liable for any action or determination made in good faith with respect to the Plan or any option granted under it. 3. PARTICIPANTS AND OPTIONS The persons who shall be participants under the Plan (the "Participants") shall be all such Directors of the Corporation as are not on the date of the grant of an option under the Plan, and for a period of at least twelve (12) months prior to the grant of such option have not been, employees of the Corporation. Options are granted and shall be granted to Participants under the Plan as follows: (i) Subject to approval of the Plan by the stockholders in accordance with Section 13 hereof and to the receipt by the Corporation of the letter from the staff of the Securities and Exchange Commission referred to in Section 14 hereof, an initial grant of an aggregate of 12,000 shares divided equally (rounded, if necessary, down to the nearest whole number of shares) among the Participants is made effective as of January 24, 1989 to the Participants on that date. (ii) In addition to the options referred to in subparagraph (i) above, during the term of the Plan a subsequent grant of options for an aggregate of 12,000 shares or such lesser number of shares as shall then constitute all of the remaining shares which are not then, but which may be subject to options under the Plan within the limitation set forth in Section 4 hereof, divided equally (rounded, if necessary, down to the nearest whole number of shares) among the then Participants under the Plan, will be made at the meeting of the Board of Directors of the Corporation immediately following the 1990 annual meeting of stockholders of the Corporation and at each Board meeting immediately following each annual meeting of stockholders of the Corporation thereafter during the term of the Plan. 4. STOCK The stock which may be subject to the options under the Plan shall be 60,000 shares of the Corporations authorized but unissued or reacquired $1.00 par value common stock hereafter sometimes called capital stock. The aggregate number of shares of capital stock which are subject to outstanding options and which will be subject to options to be granted under the Plan shall be subject to adjustment in accordance with the provisions of subsection (h) of Section 5 hereof. In the event that any outstanding option under the Plan for any reason expires or is terminated, the shares of capital stock allocable to the unexercised portion of such option may again be subjected to an option under the Plan. 5. TERMS AND CONDITIONS OF OPTIONS: STOCK OPTION AGREEMENTS Stock options granted pursuant to the Plan shall be evidenced by stock option agreements in such form as the Committee shall from time to time recommend and the Board of Directors shall from time to time approve, which agreements shall comply with and be subject to the following terms and conditions: (a) Optionee's Agreement Each optionee shall agree to remain as a Director of the Corporation but such agreement shall not impose upon the Corporation any obligation to retain the optionee as a Director for any period. (b) Number of Shares Each option shall state the number of shares to which it pertains. (c) Option Price Each option shall state the option price, which shall be not less than one hundred percent (100%) of the fair market value of the shares of capital stock of the Corporation on the date of the granting of the option. During such time as such stock is not listed upon an established stock exchange the fair market value per share shall be the mean between dealer "bid" and "ask" prices of the capital stock in over-the-counter market applicable to transactions effected in Orlando, Florida on the day the option is granted, as reported by the National Association of Securities Dealers, Inc. If the stock is listed upon an established stock exchange or exchanges such fair market value shall be deemed to be the highest closing price of the capital stock on such stock exchange or exchanges on the day the option is granted or if no sale of the Corporation's capital stock shall have been made on any stock exchange on that day, on the next preceding day on which there was a sale of such stock. Subject to the foregoing, the Board of Directors and the Committee in fixing the option price shall have full authority and discretion and be fully protected in doing so. (d) Medium and Time of Payment The option price shall be payable in United States dollars upon the exercise of the option and may be paid in cash, by check or with shares of capital stock of the Corporation valued at their fair market value, as that term is defined in the preceding paragraph. (e) Term and Exercise of Options An option shall be exercisable either in whole or in part at any time after the date on which it is granted and prior to its expiration date which, unless sooner terminated under subsections (f) or (g) of this Section 5 hereof, shall be ten (10) years from the date on which it is granted. The procedure for exercise of an option shall be as set forth in the Plan and in the stock option agreement evidencing the grant of the option. In the event of any conflict between the language of the stock option agreement and the language of the Plan, the language of the Plan shall govern. No option shall be exercisable after its expiration date. Not less than ten (10) shares may be purchased at any one time unless the number purchased is the total number at the time purchasable under the option. During the lifetime of the optionee, the option shall be exercisable only by him and shall not be assignable or transferable by him and no other person shall acquire any rights therein. (f) Termination of Service as a Director Except Death In the event that an optionee shall cease to be a Director of the Corporation for any reason other than his death, subject to the condition that no option shall be exercisable after its expiration date, such optionee shall have the right to exercise the option at any time within three (3) months after such termination as a Director to the extent his right to exercise such option has not previously been exercised at the date of such termination. For purposes of this paragraph, in the case of an optionee who becomes disabled within the meaning of Sec. 22(3)(e) of the Code, the words "three months" shall be replaced by the words "one year". (g) Death of Optionee and Transfer of Option If the optionee shall die while a Director of the Corporation or within a period of three (3) months after the termination of his service as a Director of the Corporation and shall not have fully exercised the option, an option may be exercised at any time within one (1) year after the optionee's death, subject to the condition that no option shall be exercisable after its expiration date, to the extent that the optionee's right to exercise such option at the time of his death had not been previously exercised, by the executors or administrators of the optionee or by any person or persons who shall have acquired the option directly from the optionee by bequest or inheritance or by reason of the death of the decedent. No option shall be transferable by the optionee otherwise than by Will or the laws of descent and distribution. (h) Recapitalization Subject to any required action by the stockholders, the number of shares of capital stock which are subject to each outstanding option or which will be subject to each option to be granted under the Plan, and the price per share thereof in each such option, shall be proportionately adjusted for any increase or decrease in the number of issued shares of capital stock of the Corporation resulting from a subdivision or consolidation of shares or the payment of a stock dividend (but only on the capital stock) or any other increase or decrease in the number of such shares effected without receipt of consideration by the Corporation. Subject to any required action by the stockholders if the Corporation shall be the surviving corporation in any merger or consolidation, each outstanding option shall pertain to and apply to the securities to which a holder of the number of shares of capital stock subject to the option would have been entitled. A dissolution or liquidation of the Corporation or a merger or consolidation in which the Corporation is not the surviving corporation, shall cause each outstanding option to terminate provided that each optionee shall, in such event, have the right immediately prior to such dissolution or liquidation, or merger or consolidation in which the Corporation is not the surviving corporation, to exercise his option in whole or in part. In the event of a change in the capital stock of the Corporation as presently constituted, which is limited to a change of all of its authorized shares with par value into the same number of shares with a different par value or without par value, the shares resulting from any such change shall be deemed to be the capital stock within the meaning of the Plan. To the extent that the foregoing adjustments relate to stock or securities of the Corporation, such adjustments shall be made by the Committee, whose determination in that respect shall be final, binding and conclusive. Except as hereinbefore expressly provided in this subsection 5(h), the optionee shall have no rights by reason of any subdivision or consolidation of shares of stock of any class or the payment of any stock dividend or any other increase or decrease in the number of shares of stock of any class or by reason of any dissolution, liquidation, merger, or consolidation or spin-off of assets or stock of another corporation, and any issue by the Corporation of shares of stock of any class, or securities convertible into shares of stock of any class, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares of capital stock subject to the option. The grant of an option pursuant to the Plan shall not affect in any way the right or power of the Corporation to make adjustments, reclassifications, reorganizations or changes of its capital or business structure or to merge or to consolidate or to dissolve, liquidate or sell, or transfer all or any part of its business or assets. (i) Rights as a Stockholder An optionee or a transferee of an option shall have no rights as a stockholder with respect to any shares covered by his option until the date of the issuance of a stock certificate to him for such shares. No adjustments shall be made for dividends (ordinary or extraordinary, whether in cash, securities or other property) or distributions or other rights for which the record date is prior to the date such stock certificate is issued, except as provided in subsection 5(h) hereof. (j) Modification, Extension and Renewal of Options Subject to the terms and conditions and within the limitations of the Plan, the Board of Directors may modify, extend or renew outstanding options granted under the Plan, or accept the surrender of outstanding options (to the extent not theretofore exercised) and authorize the granting of new options in substitution therefor (to the extent not theretofore exercised). Notwithstanding the foregoing, however, no modification of an option shall, without consent of the optionee, alter or impair any rights of obligations under any option theretofore granted under the Plan. (k) Investment Purpose Each option under the Plan shall be granted on the condition that the purchases of stock thereunder shall be for investment purposes, and not with a view to resale or distribution except that in the event the stock subject to such option is registered under the Securities Act of 1933, as amended (the "Securities Act"), or in the event a resale of such stock without such registration would otherwise be permissible, such condition shall be inoperative if in the opinion of counsel for the Corporation such condition is not required under the Securities Act, or any other applicable law, regulation, or rule of any governmental agency. (I) Other Provisions The option agreements authorized under the Plan shall contain such other provisions, including, without limitation, restrictions upon the exercise of the option, as the Committee and the Board of Directors of the Corporation shall deem advisable. 6. EFFECTIVE DATE AND TERM OF PLAN Subject to approval by the stockholders as required by Section 13 hereof and to the receipt by the Corporation of the letter from the staff of the Securities and Exchange Commission referred to in Section 14 hereof, the Plan shall become effective as of January 24, 1989, the date of its adoption by the Board of Directors of the Corporation and, subject to such stockholder approval and the receipt of such letter, the initial grant of options hereunder as provided in subsection 3(i) shall be effective as of the effective date of the Plan. This Plan shall remain in effect and options shall be granted hereunder from time to time until ten (10) years from the date the Plan is approved by the stockholders or until terminated by the Board of Directors in accordance with Section 8 hereof, whichever is earlier. Notwithstanding the foregoing part of this Section 6, with respect to any amendment to this Plan adopted for the purpose of increasing the number of shares as to which options ("Amendment Options") may be granted hereunder, the Plan shall remain in effect as to Amendment Options and Amendment Options may be granted hereunder from time to time until ten (10) years from the date such amendment is adopted or the date such amendment is approved by the stockholders if such approval is required or until the Plan, as amended, is terminated by the Board of Directors in accordance with Section 8 hereof, whichever is earlier. For purposes of options outstanding under the Plan the Plan shall continue in effect until all outstanding options have been exercised in full or are no longer exercisable. 7. INDEMNIFICATION OF COMMITTEE In addition to such other rights of indemnification as they may have as Directors or as members of the Committee, the members of the Committee shall be indemnified by the Corporation against the reasonable expenses, including attorneys fees, actually and necessarily incurred in connection with the defense of any action, suit or proceeding, or in connection with any appeal therein, to which they or any of them may be a party by reason of any action taken or failure to act under or in connection with the Plan or any option granted thereunder, and against all amounts paid by them in settlement thereof, not to exceed, in the judgment of the Board of Directors, the estimated expense of litigating the proceeding to conclusion (provided such settlement is approved by independent legal counsel selected by the Corporation) or paid by them in satisfaction of a judgment in any such action, suit or proceeding, except in relation to matters as to which it shall be adjudged in such action, suit or proceeding that the member of the Committee is liable. A Committee member shall in writing offer the Corporation the opportunity, at its own expense, to handle and defend the same. 8. AMENDMENT OF THE PLAN The Board of Directors of the Corporation may, insofar as permitted by law, from time to time, with respect to any shares at the time not subject to options, suspend or discontinue the Plan or revise or amend it in any respect whatsoever except that, without approval of the stockholders, no such revision or amendment shall change the number of shares subject to the Plan, extend the term of the Plan or the term of any option which may be granted under the Plan, change the designation of the Participants or the manner in which options are granted under the Plan or materially increase the benefits accruing under the Plan (materially, within the meaning of Rule 16b-3 implementing the Exchange Act), decrease the price at which options may be granted or remove the administration of the Plan from the Committee (except as may be required by the staff of the Commission to provide the letter described in Section 13 hereof). 9. APPLICATION OF FUNDS The proceeds received by the Corporation from the sale of capital stock pursuant to options will be used for general corporate purposes. 10. NO OBLIGATION TO EXERCISE OPTION The granting of an option shall impose no obligation upon the optionee to exercise such option. 11. WITHHOLDING The exercise of any option granted under the Plan shall constitute an optionee's full and complete consent to whatever action the Committee directs to satisfy the federal and state withholding requirements, if any, which the Committee in its discretion deems applicable to such exercise or surrender. 12. CONSTRUCTION The Plan shall be construed under the laws of the State of Florida. 13. APPROVAL OF STOCKHOLDERS The Plan shall be submitted for approval by the stockholders of the Corporation within twelve (12) months from the date the Plan is adopted by the Board of Directors. Any amendment to the Plan requiring approval by the stockholders of the Corporation shall be submitted for approval by the stockholders within twelve (12) months from the date the amendment is adopted by the Board of Directors. The initial options granted under the Plan, as set forth in subsection 3(i) hereof are granted as of the date set forth therein; provided, however, that such options shall not be exercisable until after the date on which the Plan shall have approved by a vote of the stockholders. Options may be granted pursuant to any amendment to this Plan adopted for the purpose of increasing the number of shares as to which options may be granted, the types of options which may be granted or the rights applicable to options which may be granted hereunder, commencing with the date of adoption of such amendment by the Board of Directors of the Corporation; provided, however, that options granted in reliance upon any such amendment shall not be exercisable until the date on which such amendment shall have been submitted for approval of the stockholders. 14. LETTER FROM COMMISSION STAFF The Corporation will request a letter from the staff of the Securities and Exchange Commission (the "Commission") concurring with the opinion of legal counsel to the Corporation that the Plan complies with the requirements set forth in Rule 16b- 3 promulgated by the Commission to provide exemptive relief from certain aspects of Section 16(b) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). If, as a condition of providing its concurring letter, the staff of the Commission requires modifications to the Plan which are not material and such modifications are approved by the Board of Directors, the Plan shall be so modified and amended under the provisions of Section 8 hereof. In the event the Corporation is unable to obtain the aforementioned concurring letter from the staff of the Commission as required by this Section 14 or the Plan is not approved by the stockholders as required by Section 13 hereof, the Plan shall be deemed null and void ab initio. -----END PRIVACY-ENHANCED MESSAGE-----