-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RJY1e7ELZaBEnBF6d+0o49ybxmfMWZe4+avs0IYSGjeuh+z+l64E8Ce4NvyDesAM Pz7ad/g6cuI0DAFwnsQI1w== 0000068100-96-000451.txt : 19960412 0000068100-96-000451.hdr.sgml : 19960412 ACCESSION NUMBER: 0000068100-96-000451 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960411 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19960411 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MORGAN J P & CO INC CENTRAL INDEX KEY: 0000068100 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 132625764 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-05885 FILM NUMBER: 96546283 BUSINESS ADDRESS: STREET 1: 60 WALL ST CITY: NEW YORK STATE: NY ZIP: 10260 BUSINESS PHONE: 2124832323 MAIL ADDRESS: STREET 1: P O BOX 271 STREET 2: C/O WILLIAM D HALL CITY: WILMINGTON STATE: DE ZIP: 19899 8-K 1 COVER PAGE TO EARNINGS RELEASE 1 _____________________________________________________________________ ______ _____________________________________________________________________ ______ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ______________ FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 ______________ Date of Report (Date of earliest event reported) April 11, 1996 J.P. MORGAN & CO. INCORPORATED (Exact name of registrant as specified in its charter) DELAWARE 1-5885 13-2625764 (State or other juris- (Commission (IRS Employer diction of File Number) Identification No.) incorporation) 60 WALL STREET, NEW YORK, NEW YORK 10260- 0060 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (212) 483-2323 _________________________________________________________________ (Former name or former address, if changed since last report) _____________________________________________________________________ ______ _____________________________________________________________________ ______ 2 ITEM 5. OTHER EVENTS On April 11, 1996, the Registrant issued a press release announcing its earnings for the three-month period ended March 31, 1996. A copy of such press release is filed herein as Exhibit 99. A complete copy of the by-laws of J.P. Morgan & Co. Incorporated as amended through April 10, 1996, is filed herein as Exhibit 3b. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS (a) Financial Statements NONE. The financial statements included in this report are not required to be filed as part of this report. (b) Pro Forma Financial Information NONE. (c) Exhibits 3b. By-laws of J.P. Morgan & Co. Incorporated as amended through April 10, 1996 99. Copy of press release of J.P. Morgan & Co. Incorporated dated April 11, 1996. 3 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 hereunto duly authorized. J.P. MORGAN & CO. INCORPORATED ______________________________ (REGISTRANT) /s/ PATRICIA A. JONES ____________________________ NAME: PATRICIA A. JONES TITLE: MANAGING DIRECTOR DATE: April 11, 1996 4 LIST OF EXHIBITS EXHIBIT 3b. By-laws of J.P. Morgan & Co. Incorporated as amended through April 10, 1996 99. Copy of press release of J.P. Morgan & Co. Incorporated dated April 11, 1996. EX-99 2 EARNINGS RELEASE FOR FIRST QTR 1996 1 April 11, 1996 J.P. MORGAN REPORTS 1996 FIRST QUARTER RESULTS J.P. Morgan & Co. Incorporated reported net income of $439 million in the first quarter of 1996, 72% higher than in the first quarter of 1995. Earnings per share for the quarter were $2.13 versus $1.27 a year ago. Last year, first quarter earnings included a charge of $55 million ($33 million after tax), or $0.17 per share, related primarily to severance. Douglas A. Warner III, chairman, said: OGrowing opportunities to put J.P. MorganOs worldwide capabilities to work for clients led to strong first quarter results. Market-making, investment banking, and investment management all produced substantial gains.O FIRST QUARTER RESULTS AT A GLANCE
In millions of dollars, Fourth except per share data First quarter quarter 1996 1995 1995 ___________________________________________________________________________ ___ Revenues $ 1,740 $ 1,388 $1,518 Operating expenses (1,085) (1,002) (990) Income taxes (216) (131) (162) ___________________________________________________________________________ ___ Net income $ 439 $ 255 $ 366 Net income per share $2.13 $1.27 $1.80 ___________________________________________________________________________ ___ Dividends declared per share $0.81 $0.75 $0.81
REVENUES rose 25% in the first quarter from a year ago. - Trading revenue more than doubled to $758 million, as increased client activity propelled advances in fixed income and equities. Combined trading and related net interest revenue was up 116% to $788 million. - Investment banking revenue rose 76% to $201 million. - Investment management fees grew 21%. Operational service and credit-related fees were down as a result of the sale of the firmOs custody business in late 1995. - Net interest revenue declined 21% to $396 million. OPERATING EXPENSES were up 8% from a year ago, as incentive compensation accruals for the first quarter increased in line with higher earnings. The remainder of this release contains information on specific areas of results, a financial summary, and the consolidated financial statements. 2 REVENUES Revenues totaled $1.740 billion in the first quarter of 1996, up 25% from $1.388 billion a year earlier. NET INTEREST REVENUE declined 21% to $396 million from the first quarter of 1995, reflecting lower returns from asset and liability management in the United States and a decrease in trading-related net interest revenue. TRADING REVENUE rose to $758 million from $303 million a year earlier. Revenues in both developed and emerging markets were strong and diversified across the range of the firmOs trading products. Reported trading revenue does not include net interest revenue associated with trading activities, which was $30 million in the first quarter of 1996 and $61 million a year ago. Combined trading and related net interest revenue increased to $788 million from $364 million a year earlier. (For details, see the table of combined trading and related net interest revenue by principal product groupings on page 8.) Combined revenue from fixed income rose to $602 million in the first quarter from $123 million in the year-earlier quarter because of strong client demand for swaps as well as government and corporate securities; risk management activity for clients accelerated. Combined revenue from equities doubled to $51 million from $25 million a year earlier, driven by strong demand for equity derivative products. Combined revenue from commodities was $32 million compared with $22 million in the year-earlier quarter. Foreign exchange combined revenue totaled $73 million versus $106 million in the first quarter of 1995. Combined revenue from the firmOs proprietary unit was $30 million compared with $88 million in the first quarter of 1995. INVESTMENT BANKING REVENUE was up 76% to $201 million in the first quarter. Underwriting revenue grew to $65 million from $22 million a year ago, as Morgan raised more debt and equity capital for a broad range of clients. Advisory fees rose to $136 million from $92 million a year earlier, reflecting our growing share of the merger-and-acquisition advisory market. CREDIT-RELATED FEES were $38 million in the first quarter, 12% lower than in the first quarter of 1995 because of the sale of the custody business in 1995. INVESTMENT MANAGEMENT FEES advanced 21% to $157 million from a year ago, as assets under management rose, primarily from net new business. OPERATIONAL SERVICE FEES in the first quarter totaled $113 million, 19% lower than in the 1995 first quarter. Excluding revenues of $33 million associated with the recently sold custody business, operational service fees for the first quarter rose 6% on increased brokerage commissions. NET INVESTMENT SECURITIES GAINS were $12 million in the first quarter, compared with gains of $9 million in the first quarter of 1995. OTHER REVENUE was $65 million in the first quarter, compared with $149 million in the 1995 first quarter. The 1996 first quarter included net equity investment securities gains of $64 million, versus $163 million a year ago. 3 OPERATING EXPENSES Operating expenses were $1.085 billion in the first quarter of 1996, up 8% from a year earlier. Excluding the 1995 first quarter charge and the 1995 expenses associated with the custody business, operating expenses were up 21%. Employee compensation and benefits expense rose, primarily reflecting higher incentive compensation accruals in line with higher earnings. Expenses other than employee compensation and benefits were essentially flat. At March 31, 1996, staff totaled 15,431 employees compared with 16,443 employees at March 31, 1995. Income tax expense of $216 million in the first quarter was based on an effective tax rate of 33% versus 34% in the first quarter of 1995. ASSETS Total assets were $205 billion at March 31, 1996, compared with $185 billion at December 31, 1995, primarily because of an increase in trading- related assets and loans. Nonperforming assets increased by $38 million to $156 million during the first quarter as assets newly classified as nonperforming exceeded charge-offs and repayments. No provision for credit losses was deemed necessary in the 1996 first quarter. The allowance for credit losses was $1.117 billion at March 31, 1996. (For details, see asset quality tables on page 9.) CAPITAL At March 31, 1996, J.P. Morgan's estimated Tier 1 and total risk-based capital ratios were 8.2% and 12.1%, respectively, compared with Tier 1 and total risk-based capital ratios of 8.8% and 13.0%, respectively, at December 31, 1995. The first quarter decreases in the risk-based capital ratios related primarily to the rise in risk-adjusted assets. The March 31, 1996, leverage ratio was 6.2% versus 6.1% at December 31, 1995. At March 31, 1996, stockholders' equity included approximately $470 million of net unrealized appreciation on debt investment and marketable equity investment securities, net the related deferred tax liability of $290 million. Net unrealized appreciation was $566 million at December 31, 1995. The unrealized appreciation on debt investment securities was $331 million and $484 million at March 31, 1996, and December 31, 1995, respectively. The unrealized appreciation on marketable equity investment securities was $429 million and $440 million at March 31, 1996, and December 31, 1995, respectively. During February 1996, J.P. Morgan issued $200 million of perpetual 6 5/8% cumulative preferred stock, series H, with a stated value of $500 per share. These shares are represented by 4 million depositary shares with a stated value of $50 per share, each representing one-tenth of a preferred share. # # # J.P. Morgan is a global banking firm that serves clients with complex financial needs through an integrated range of advisory, financing, trading, investment, and related capabilities. Attached are the financial summary, the financial statements, the combined trading and related net interest revenue table, and the asset quality tables. J.P. Morgan news releases, including quarterly financial results, are available on the Internet (http://www.jpmorgan.com). 4 FINANCIAL SUMMARY J.P. Morgan & Co. Incorporated _________________________________________________________
Dollars in millions, except per share data First quarter Fourth ____________________ quarter ______ 1996 1995 1995 _______________________________________ Net income $439 $255 $366 PER COMMON SHARE Net income (a) $ 2.13 $ 1.27 $ 1.80 Dividends 0.81 0.75 0.81 declared Book value (b) 51.57 47.19 50.71 _________________________________________________________ Weighted- average number of common and common equivalent 202,133, 196,905, 199,829 shares 593 106 ,966 outstanding _________________________________________________________ Dividends declared on $152 $141 $152 common stock Dividends declared on 8 6 6 preferred stock SELECTED RATIOS Annualized rate of return on average common stockholders' equity (c) 17.2% 11.1% 14.7% As % of period- end total assets: Common equity 5.0 5.5 5.4 Total equity 5.3 5.8 5.7 Regulatory capital ratios (d) Tier 1 risk- based capital ratio 8.2 8.9 8.8 Total risk- based 12.1 13.2 13.0 capital ratio Leverage 6.2 5.9 6.1 ratio _________________________________________________________ AVERAGE BALANCES Debt investment $ 24,298 $ 22,720 $ 23,077 securities (e) Loans 27,326 23,667 24,500 Total interest- 162,606 135,310 147,569 earning assets Total assets 204,836 175,694 189,724 Total interest- bearing 154,804 129,279 142,575 liabilities Total liabilities 194,160 166,128 179,570 Common stockholders' equity 10,065 9,072 9,660 Total stockholders' equity 10,676 9,566 10,154 Net interest earnings (fully taxable basis) 418 529 511 Net yield on interest- earning assets 1.03% 1.59% 1.37% _________________________________________________________ Employees at period-end 15,431 16,443 15,613 _________________________________________________________ (a) Earnings per share amounts represent both primary and fully diluted earnings per share. (b) Excluding the impact of SFAS No. 115, book value per common share would have been $49.18, $44.87 and $47.83 for the three months ended March 31, 1996, March 31, 1995, and December 31, 1995, respectively. (c) Excluding the impact of SFAS No. 115, the annualized rate of return on average common stockholders' equity would have been 18.1%, 11.7% and 15.5% for the three months ended March 31, 1996, March 31, 1995, and December 31, 1995, respectively. (d) In accordance with Federal Reserve Board guidelines, these ratios exclude the equity, assets and off-balance-sheet exposures of J.P. Morgan Securities, Inc. and the effect of SFAS No. 115. Risk-based capital ratios for March 31, 1996, are estimates. (e) Average debt investment securities are computed based on historical amortized cost, excluding the effects of SFAS No. 115 adjustments.
5 CONSOLIDATED STATEMENT OF INCOME J.P. Morgan & Co. Incorporated ______________________________________________________________________________ ____________
In millions, except per share data Three months ended _______________________________________________________________ March 31 March 31 Increase December Increase/ 1996 1995 / 31 (Decrease) (Decreas 1995 e) _______________________________________________________________ NET INTEREST REVENUE Interest revenue $2,554 $2,470 $ 84 $2,609 ($55) Interest expense 2,158 1,970 188 2,121 37 _________________________________________________________________________________ _________ Net interest revenue 396 500 (104) 488 (92) NONINTEREST REVENUE Trading revenue 758 303 455 369 389 Investment banking revenue 201 114 87 158 43 Credit-related fees 38 43 (5) 40 (2) Investment management fees 157 130 27 156 1 Operational service 113 140 (27) 129 (16) fees Net investment securities 3 1 11 gains 12 9 Other revenue 65 149 (84) 177 (112) ___________________________________________________________________________ _______________ Total noninterest 1,344 888 456 1,030 314 revenue Total revenue 1,740 1,388 352 1,518 222 OPERATING EXPENSES Employee compensation and 730 626 104 608 122 benefits Net occupancy 73 80 (7) 76 (3) Technology and communications 158 172 (14) 165 (7) Other expenses 124 124 - 141 (17) ___________________________________________________________________________ _______________ Total operating 1,085 1,002 83 990 95 expenses Income before income 655 386 269 528 127 taxes Income taxes 216 131 85 162 54 _________________________________________________________________________________ _________ Net income 439 255 184 366 73 PER COMMON SHARE Net income (a) $2.13 $1.27 $0.86 $1.80 $0.33 Dividends declared 0.81 0.75 0.06 0.81 - _________________________________________________________________________________ _________ (a) Earnings per share amounts represent both primary and fully diluted earnings per share.
6 CONSOLIDATED BALANCE SHEET J.P. Morgan & Co. Incorporated ___________________________________________________________________________ _________
Dollars in millions March 31 December 31 1996 1995 __________________________________________________ ASSETS Cash and due from banks $ 732 $ 1,535 Interest-earning deposits with 1,183 1,986 banks Debt investment securities available for sale carried at fair value(Cost: $27,115 at March 1996 and $24,154 at December 1995) 27,446 24,638 Trading account assets 69,844 69,408 Securities purchased under agreements to resell ($39,683 at March 1996 and $32,157 at December 1995) and federal 39,692 32,157 funds sold Securities borrowed 22,901 19,830 Loans 28,645 23,453 Less: allowance for credit 1,117 1,130 losses ___________________________________________________________________________ _________ Net loans 27,528 22,323 Customers' acceptance 339 237 liability Accrued interest and accounts receivable 4,766 3,539 Premises and equipment 3,354 3,339 Less: accumulated 1,445 1,412 depreciation ___________________________________________________________________________ _________ Premises and equipment, net 1,909 1,927 Other assets 8,407 7,299 ___________________________________________________________________________ _________ Total assets 204,747 184,879 ___________________________________________________________________________ _________ LIABILITIES Noninterest-bearing deposits: In offices in the U.S. 2,784 3,287 In offices outside the 677 744 U.S. Interest-bearing deposits: In offices in the U.S. 1,765 2,003 In offices outside the 44,978 40,404 U.S. ___________________________________________________________________________ _________ Total deposits 50,204 46,438 Trading account liabilities 46,766 45,289 Securities sold under agreements to repurchase ($55,952 at March 1996 and $40,803 at December 1995) and federal funds purchased 58,765 45,099 Commercial paper 4,229 2,801 Other liabilities for borrowed money 15,659 15,129 Accounts payable and accrued expenses 7,265 5,643 Liability on acceptances 339 237 Long-term debt not qualifying as risk-based capital 5,710 5,737 Other liabilities 1,272 4,465 ___________________________________________________________________________ _________ 190,209 170,838 Long-term debt qualifying as risk-based capital 3,691 3,590 ___________________________________________________________________________ _________ Total liabilities 193,900 174,428 STOCKHOLDERS' EQUITY Preferred stock (authorized shares: 10,400,000): Adjustable rate cumulative preferred stock, $100 par value(issued and outstanding: 2,444,300) 244 244 Variable cumulative preferred stock, $1,000 par value (issued 250 250 and outstanding: 250,000) Fixed cumulative preferred stock, $500 par value (issued and 200 - outstanding: 400,000) Common stock, $2.50 par value (authorized shares: 500,000,000; issued: 200,682,873 at March 1996 and 678,373 at December 1995) 502 502 Capital surplus 1,432 1,430 Retained earnings 8,006 7,731 Net unrealized gains on investment securities, net of 470 566 taxes Other 593 552 ___________________________________________________________________________ _________ 11,697 11,275 Less: treasury stock (13,382,388 shares at March 1996 and 13,562,755 shares at December 1995) at cost 850 824 ___________________________________________________________________________ _________ Total stockholders' equity 10,847 10,451 ___________________________________________________________________________ _________ Total liabilities and stockholders' equity 204,747 184,879 ___________________________________________________________________________ _________
7 CONSOLIDATED STATEMENT OF CONDITION Morgan Guaranty Trust Company of New York ___________________________________________________________________________ _______
Dollars in millions March 31 December 1996 31 1995 _________________________________ ASSETS Cash and due from banks $ 709 $ 1,421 Interest-earning deposits with banks 1,270 2,081 Debt investment securities available for sale 23,004 23,625 carried at fair value Trading account assets 54,306 55,298 Securities purchased under agreements to resell 25,218 21,013 and federal funds sold Loans 25,933 20,628 Less: allowance for credit losses 1,009 1,021 ___________________________________________________________________________ _______ Net loans 24,924 19,607 Customers' acceptance liability 319 237 Accrued interest and accounts receivable 3,424 3,401 Premises and equipment 2,970 2,958 Less: accumulated depreciation 1,249 1,224 ___________________________________________________________________________ _______ Premises and equipment, net 1,721 1,734 Other assets 6,101 4,574 ___________________________________________________________________________ _______ Total assets 140,996 132,991 ___________________________________________________________________________ _______ LIABILITIES Noninterest-bearing deposits: In offices in the U.S. 2,731 3,254 In offices outside the U.S. 703 839 Interest-bearing deposits: In offices in the U.S. 1,707 1,846 In offices outside the U.S. 45,706 40,450 ___________________________________________________________________________ _______ Total deposits 50,847 46,389 Trading account liabilities 41,660 39,126 Securities sold under agreements to repurchase 21,496 20,090 and federal funds purchased Other liabilities for borrowed money 7,367 7,368 Accounts payable and accrued expenses 4,180 4,168 Liability on acceptances 319 237 Long-term debt not qualifying as risk-based 2,507 2,786 capital Other liabilities 1,443 2,852 ___________________________________________________________________________ _______ 129,819 123,016 Long-term debt qualifying as risk-based 2,437 1,509 capital ___________________________________________________________________________ _______ Total liabilities 132,256 124,525 STOCKHOLDER'S EQUITY Preferred stock, $100 par value (authorized shares: 2,500,000) - - Common stock, $25 par value (authorized and outstanding shares: 250 250 10,000,000) Surplus 2,820 2,820 Undivided profits 5,491 5,136 Net unrealized gains on investment securities, net of 181 264 taxes Foreign currency translation (2) (4) ___________________________________________________________________________ _______ Total stockholder's equity 8,740 8,466 ___________________________________________________________________________ _______ Total liabilities and stockholder's equity 140,996 132,991 ___________________________________________________________________________ _______ Member of the Federal Reserve System and the Federal Deposit Insurance Corporation.
8 COMBINED TRADING AND RELATED NET INTEREST REVENUE J.P. Morgan & Co. Incorporated
Dollars in millions Fixed Foreign Commo- Proprietar y Income Equities Exchange dities Unit Total ___________________________________________________________________________ _______________ First Quarter 1996 Trading revenue $533 $94 $ 68 $34 $29 $758 Net interest 69 (43) 5 (2) 1 30 revenue* ___________________________________________________________________________ _______________ Combined total 602 51 73 32 30 788 ___________________________________________________________________________ _______________ First Quarter 1995 Trading revenue 57 42 102 19 83 303 Net interest 66 (17) 4 3 5 61 revenue ___________________________________________________________________________ _______________ Combined total 123 25 106 22 88 364 ___________________________________________________________________________ _______________ Fourth Quarter 1995 Trading revenue 248 36 63 5 17 369 Net interest 38 (32) 12 (2) - 16 revenue ___________________________________________________________________________ _______________ Combined total 286 4 75 3 17 385 *Estimated
9 ASSET QUALITY J.P. Morgan & Co. Incorporated ________________________________________________________________________ NONPERFORMING ASSETS
March 31 December March 31 31 Dollars in millions 1996 1995 1995 ____________________________________________ Impaired loans: Commercial and $110 $ 67 $148 industrial Other 42 48 65 ________________________________________________________________________ 152 115 213 Restructuring countries 4 2 3 ___________________________________________________________ ____________ Total impaired loans 156 117 216 Other nonperforming - 1 1 assets ________________________________________________________________________ Total nonperforming 156 118 217 assets ________________________________________________________________________ ALLOWANCE FOR CREDIT LOSSES March 31 December March 31 31 Dollars in millions 1996 1995 1995 ____________________________________ _______ Allowance for credit $1,117 $1,130 $1,132 losses _________________________________________________________________________ First Quarter __________________________ 1996 1995 __________________________ Charge-offs: Commercial and ($15) ($6) industrial Restructuring - - countries Other (3) (2) Recoveries 5 9 _____________________________________________ _________
EX-3 3 BY-LAWS AS AMENDED THROUGH 4/10/96 By-Laws of J.P. Morgan & Co. Incorporated As amended through April 10, 1996 The undersigned, Secretary of J.P. Morgan & Co. Incorporated, hereby certifies that attached hereto is a true and complete copy of the By-Laws of the Corporation as amended to date. ______________________________________ _____________________ Date BY-LAWS OF J.P. MORGAN & CO. INCORPORATED (a Delaware corporation) Article I Stockholders Section 1.1 The annual meeting of the stockholders of the Corporation shall be held on such date and at such time and place within or without the state of Delaware as may be fixed by the Board of Directors, for the election of Directors and such other business as may properly come before the meeting. Notice of the time, place and purpose or purposes of such meeting shall be given not less than 10 nor more than 60 days before said meeting by mailing postage prepaid or delivering personally such notice, signed by the Chairman of the Board or the President or the Secretary or an Assistant Secretary, to each stockholder of record entitled to vote at such meeting at his address as it appears on the stock ledger of the Corporation, unless he shall have filed with the Secretary a written request that notices intended for him be mailed to some other address, in which case it shall be mailed to the address designated in such request. Notice shall not be required to be given to any stockholder who shall waive such notice in writing or who shall attend such meeting in person or by proxy unless such attendance is for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Section 1.2 Special meetings of the stockholders may be called by the Chairman of the Board, the President, the Chairman of the Executive Committee, a Vice Chairman of the Board or the Board of Directors. It shall be the duty of the Chairman of the Board or the President or the Chairman of the Executive Committee or a Vice Chairman of the Board to call a special meeting of the stockholders whenever requested in writing to do so by stockholders owning a majority of the capital stock of the Corporation. Notice of any special meeting, stating the time, place and purpose or purposes thereof, shall be given by mail to the stockholders in the manner provided in Section 1.1 for the calling of annual meetings of stockholders. Section 1.3 At any meeting of stockholders, unless otherwise provided by law, stockholders entitled to cast a majority of the votes thereat, present either in person or by proxy, shall constitute a quorum and any question brought before such meeting shall be decided by the stockholders owning a majority of the capital stock represented at such meeting, voting either in person or by proxy. Less than a quorum shall have power to adjourn any meeting. Section 1.4 The Chairman of the Board, or in his absence the President, or in his absence the Chairman of the Executive Committee, or in his absence a Vice Chairman of the Board, shall preside at all meetings of stockholders, and the order in which the business thereof shall be disposed of, in the absence of a contrary vote by stockholders, shall be determined by the presiding officer. Section 1.5 The Board of Directors may at any time appoint two or more persons to act as inspectors of election at any meeting of stockholders. If any inspector so appointed shall be absent or shall refuse to act, or if his office become vacant and be not filled by the Board of Directors, if a majority of the inspectors be present, they may act; otherwise, the presiding officer of the meeting may appoint one or more inspectors of election for such meeting. Each inspector shall be entitled to a reasonable compensation for his services to be paid by the Corporation. Article II Board of Directors Section 2.1 The business of the Corporation shall be managed and its corporate powers exercised by a Board of Directors. The Board shall from time to time by vote of a majority of Directors then in office fix the number of Directors. Section 2.2 At each annual meeting of stockholders each of the Directors shall be elected to serve until the next annual meeting of stockholders and until his successor shall have been elected and shall have qualified. Section 2.3 The Board of Directors shall hold regular meetings for business, of which meetings no notice shall be required, on such date and at such time and place as may be fixed by the Board of Directors. Section 2.4 Special meetings of the Board of Directors may be called by the Chairman of the Board, the President, the Chairman of the Executive Committee, or a Vice Chairman of the Board, and any of them shall call a special meeting whenever requested to do so by any two members of the Board of Directors. Notice of such meeting shall be mailed to each Director addressed to him at his usual residence or place of business at least two days before the day on which such meeting is to be held, or shall be sent to him at such address by facsimile, electronic mail, telegram, radio or cable or given personally or by telephone not later than the day before such meeting is to be held. Section 2.5 Any one or more members of the Board of Directors or any committee thereof may participate in a meeting of the Board of Directors or a committee thereof by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other. Participation in a meeting by such means shall constitute presence in person at such meeting. Section 2.6 Except as otherwise required by law, one-third of the number of Directors, as fixed from time to time, shall constitute a quorum. Section 2.7 Directors and members of the Executive Committee and the members of any other committee shall be entitled to receive such compensation or such fees for attendance as the Board of Directors shall fix from time to time. Nothing herein contained shall be construed to preclude any Director from serving in any other capacity and receiving compensation therefor. Article III Committees Section 3.1 The Board of Directors shall, at the meeting at which these By-Laws are adopted and at the first meeting after each annual meeting of stockholders, appoint an Executive Committee of such number of Directors, including the Chairman of the Board, the President, the Chairman of the Executive Committee, the Vice Chairman, or if there be more than one, the Vice Chairmen of the Board, as the Board of Directors may determine, which may exercise the powers of the Board of Directors in the intervals between the meetings of the Board of Directors. The minutes of each meeting of the Executive Committee shall be submitted to the first regular meeting of the Board of Directors following the meeting of the Executive Committee. The Executive Committee may adopt its own rules of procedure and shall hold meetings upon request of any member thereof. No notice of any meetings of the Executive Committee shall be required. Three members of the Executive Committee shall constitute a quorum. Section 3.2 The Board of Directors may elect by resolution passed by a majority of the whole Board of Directors, from among its membership or otherwise, such other committees with such powers as it shall determine. Such committees shall determine their own quorum and adopt their own rules of procedure. Section 3.3 Unless otherwise ordered by the Board of Directors, in the absence or disqualification of any member of any committee of the Board of Directors, the member or members thereof present at any meeting and not disqualified from voting may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member. Section 3.4 The Board of Directors may fill any vacancy in any committee. Article IV Officers and Employees Section 4.1 The Board of Directors, at the meeting at which these By-Laws are adopted and at the first meeting after each annual meeting of stockholders, shall elect from their number a Chairman of the Board and may elect from their number a President, a Chairman of the Executive Committee and one or more Vice Chairmen of the Board. Each such officer shall hold office until the next annual election of officers and until his successor is elected and shall have qualified. Any vacancy occurring in the office of Chairman of the Board, President, Chairman of the Executive Committee or Vice Chairman of the Board may be filled at any regular or special meeting of the Board of Directors. The Board of Directors shall also elect a Secretary and a Treasurer and may elect one or more Managing Directors and one or more Vice Presidents (any one or more of whom may be designated Executive Vice Presidents or Senior Vice Presidents), a Controller, an Auditor and such other officers as the Board of Directors may deem appropriate or desirable. The Board of Directors may provide for the election or appointment of officers who are not members of the Board of Directors in such manner as the Board of Directors may determine or delegate. All officers elected or appointed pursuant to this paragraph shall hold office at the pleasure of the Board of Directors. The compensation of officers shall be fixed either by the Board of Directors or as the Board of Directors may determine or delegate. Section 4.2 All other agents and employees of the Corporation shall be appointed, their duties prescribed and their compensation fixed, by the Chairman of the Board or the President, or any officer authorized to do so by either of them. Section 4.3 Any or all of the officers or employees of the Corporation may be required to give such bonds as the Board of Directors may determine. Section 4.4 The Chairman of the Board shall have general supervision of the policies and operations of the Corporation on behalf of the Board of Directors and shall be the chief executive officer of the Corporation. He shall preside at meetings of the stockholders and at meetings of the Board of Directors, and, in the absence of the Chairman of the Executive Committee, at meetings of the Executive Committee. He shall have the power to sign checks, orders, contracts, leases, notes, drafts and other documents and instruments in connection with the business of the Corporation, and together with the Secretary or an Assistant Secretary conveyances of real estate. Section 4.5 The President of the Corporation shall participate in the supervision of the policies of the Corporation on behalf of the Board of Directors and shall manage and administer the Corporation's operations. He shall perform all duties incident to the office of President, and, except as the Board of Directors or Executive Committee shall otherwise direct, in the event of the absence or disability of the Chairman of the Board shall act in his place and assume his duties. He shall have the same power to sign for the Corporation as is prescribed in these By-Laws for the Chairman of the Board. In the absence of the President, such officer as the Board of Directors or the Executive Committee or the Chairman of the Board may designate shall act in his stead. Section 4.6 The Chairman of the Executive Committee shall preside at meetings of the Executive Committee and shall participate in the supervision of the policies and operations of the Corporation on behalf of the Board of Directors and shall have such other duties as shall be assigned to him by the Board of Directors, the Executive Committee and Chairman of the Board. He shall have the same power to sign for the Corporation as is prescribed in these By-Laws for the Chairman of the Board. Section 4.7 The Vice Chairman of the Board, or if there be more than one, then each of them, shall participate in the supervision of the policies and operations of the Corporation on behalf of the Board of Directors, and shall have such duties as shall be assigned to them by the Board of Directors, the Executive Committee and the Chairman of the Board. Each Vice Chairman shall have the same power to sign for the Corporation as is prescribed in these By-Laws for the Chairman of the Board. Section 4.8 Each Managing Director and each Vice President shall have the duties and authority usually pertaining to such office and in addition such other duties as shall be assigned to him by the Board of Directors, the Executive Committee, the Chairman of the Board, the President, the Chairman of the Executive Committee and a Vice Chairman of the Board. Unless otherwise ordered by the Board of Directors or the Executive Committee, each Managing Director and each Vice President shall have the same power to sign for the Corporation as is prescribed in these By-Laws for the Chairman of the Board. Section 4.9 The Treasurer shall have the supervision and care of all the funds and securities of the Corporation. He shall keep permanent records of the evidences of property or indebtedness and of all fiscal transactions of the Corporation. He shall perform all acts incident to the office of Treasurer. Section 4.10 The Controller shall exercise general supervision over, and be responsible for, the operation of all matters pertaining to the accounting and bookkeeping of the Corporation and shall have such further duties as the Chairman of the Board or the President shall assign to him. He shall render to the Board of Directors, the Executive Committee, the Chairman of the Board, the President, the Chairman of the Executive Committee and the Vice Chairman of the Board condensed monthly balance sheets and statements of operating results and shall prepare such cost control reports and such other statements and reports as the Chairman of the Board, the President, the Chairman of the Executive Committee or a Vice Chairman of the Board may request. Section 4.11 The Auditor shall exercise general supervision over, and be responsible for, the operation of all matters pertaining to the auditing of the Corporation and shall have such further duties as the Chairman of the Board or the President shall assign to him. He shall render to the Board of Directors, the Executive Committee, any committee of the Board of Directors appointed to examine the affairs of the Corporation, the Chairman of the Board, the President, the Chairman of the Executive Committee and the Vice Chairman of the Board such regular audit statements and reports as may be requested of him and such other reports as in his judgment are necessary in the performance of his duties. Section 4.12 The Secretary shall keep the minutes of all meetings of the Board of Directors and of all meetings of the stockholders; he shall attend to the giving and receiving of all notices of and to the Corporation; he may sign, with other authorized officers, all contracts, instruments or documents in the name of the Corporation and may affix or cause to be affixed thereto the seal of the Corporation, of which he shall be the custodian; and he shall in general perform all the duties incident to the office of Secretary. Section 4.13 Any Assistant Treasurer shall perform such duties as may be designated by the President with the approval of the Board of Directors, the Executive Committee, the Chairman of the Board, the Chairman of the Executive Committee or a Vice Chairman of the Board. In the absence or inability of the Treasurer to act, any Assistant Treasurer may perform all the duties and may exercise all the powers of the Treasurer. Section 4.14 Any Assistant Secretary shall perform such duties as may be designated by the President with the approval of the Board of Directors, the Executive Committee, the Chairman of the Board, the Chairman of the Executive Committee or a Vice Chairman of the Board. Any Assistant Secretary may perform all the duties and may exercise any of the powers of the Secretary. Section 4.15 All other officers of the Corporation shall perform such duties as may be designated by the Chairman of the Board or any officer authorized to do so by him. Section 4.16 All checks, orders, contracts, advices and other instruments and documents shall be signed by the officers authorized in these By-Laws to do so or by such other officers or by such employees and agents other than officers as the Board of Directors or the Executive Committee shall authorize, and subject to such restrictions as the Board of Directors or the Executive Committee shall prescribe. The Board of Directors or Executive Committee may delegate to one or more officers of the Corporation all or part of the authority to grant signing powers contained in this Section 4.16. Article V Seal Section 5.1 The Corporation shall have a seal which shall be in such form as the Board of Directors shall approve. Article VI Capital Stock Section 6.1 All certificates of stock shall be signed by the Chairman of the Board, the President, the Chairman of the Executive Committee, a Vice Chairman of the Board or a Vice President, and the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary. The signatures may be facsimile, engraved or printed, to the extent permitted by law. Section 6.2 No transfer of stock of the Corporation shall be permitted except upon the surrender of the outstanding certificate of stock. No new certificate shall be issued until the former certificate is canceled, except that in the case of loss or destruction of a certificate, a new certificate may be issued upon such terms as the Board of Directors may prescribe. Section 6.3 In order that the Corporation may determine the stockholders entitled to notice of and to vote at any meeting, or any adjournment thereof, or entitled to express consent to any corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not be more than 60 nor less than 10 days before such meeting, nor more than 60 days prior to any other action. Article VII Voting of stock of other corporations Section 7.1 Shares of the capital stock of other corporations eld by the Corporation shall be voted in such manner as may be determined by the Board of Directors. Article VIII Amendments Section 8.1 Except as may be otherwise provided by law, these By- Laws may be altered or repealed at any meeting of the Board of Directors, whether or not such alteration or repeal shall or may affect any By-Law which does or may be deemed to limit the powers of the Directors, provided notice of such meeting setting forth the substance of the proposed alteration or repeal shall have been given to each Director prior to such meeting. -----END PRIVACY-ENHANCED MESSAGE-----