<PAGE>
<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 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 number 1-5374
WYLE LABORATORIES
(Exact name of registrant as specified in its charter)
California 95-1779998
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
15370 Barranca Parkway
Irvine, California 92718
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (714) 753-9953
(Former name, former address and former fiscal year, if changed since
last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90
days. Yes X No
At April 30, 1994 registrant had 12,251,166 shares of common stock
outstanding.
<PAGE>
<PAGE> 2
PART I - FINANCIAL INFORMATION
- - ------------------------------
Item 1. Financial Statements
WYLE LABORATORIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands, except per share amounts)
Three Months Ended
---------------------
March 31, April 30,
1994 1993
--------- ---------
Net sales $ 197,195 $ 137,624
--------- ---------
Costs and expenses
Cost of sales 164,363 109,158
Selling & administrative expenses 28,280 21,438
Interest expense, net 142 52
Miscellaneous, net (122) (113)
--------- ---------
192,663 130,535
--------- ---------
Income before income taxes and
accounting change 4,532 7,089
Income taxes 1,723 2,552
--------- ---------
Income before accounting change 2,809 4,537
Cumulative effect of accounting
change for postretirement benefits
other than pensions - (3,193)
--------- ---------
Net income $ 2,809 $ 1,344
========= =========
Income per share:
Income before accounting change $ .23 $ .37
========= =========
Cumulative effect of accounting
change for postretirement benefits
other than pensions $ - $ (.26)
========= =========
Net income $ .23 $ .11
========= =========
Average common and common equivalent shares 12,454 12,352
========= =========
Dividends per share $ .07 $ .07
========= =========
See accompanying notes. <PAGE>
<PAGE> 3
WYLE LABORATORIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
ASSETS 3/31/94 12/31/93
- - ------ --------- ---------
Current assets
Cash and cash equivalents $ 18,054 $ 23,748
Receivables (less allowances of $4,387 at
3/31/94 and $4,183 at 12/31/93) 101,779 87,287
Inventories 106,793 105,716
Prepaid expenses 4,562 6,949
--------- ---------
Total current assets 231,188 223,700
--------- ---------
Property, plant and equipment 79,441 77,502
Less accumulated depreciation 48,357 46,896
--------- ---------
31,084 30,606
--------- ---------
Other assets 7,159 6,265
--------- ---------
Total Assets $ 269,431 $ 260,571
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
- - ------------------------------------
Current liabilities
Current maturities of long-term debt $ 3,000 $ 4,120
Accounts payable 64,910 60,556
Accrued expenses 19,310 15,592
--------- ---------
Total current liabilities 87,220 80,268
--------- ---------
Long-term debt, less current maturities 6,000 6,000
--------- ---------
Deferred income taxes and other liabilities 9,515 9,947
--------- ---------
Commitments and contingencies - -
--------- ---------
Shareholders' equity
Common stock 86,821 86,348
Retained earnings 79,875 78,008
--------- ---------
166,696 164,356
--------- ---------
Total Liabilities and Shareholders' Equity $ 269,431 $ 260,571
========= =========
See accompanying notes.<PAGE>
<PAGE> 4
WYLE LABORATORIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
Three Months Ended
---------------------
March 31, April 30,
1994 1993
--------- ---------
OPERATING ACTIVITIES
Net income $ 2,809 $ 1,344
Adjustments to reconcile net income to
net cash provided by (used for) operating
activities:
Depreciation and amortization 1,598 1,381
Provision for losses on receivables 338 441
Provision for deferred income taxes (700) (603)
Cumulative effect of accounting
change for postretirement benefits
other than pensions - 3,193
(Increase) decrease in receivables (14,830) 1,775
(Increase) decrease in inventories (1,077) 6,810
Decrease in prepaid expenses 2,731 1,940
Increase (decrease) in accounts payable 4,354 (6,852)
Increase (decrease) in accrued expenses 3,445 (159)
Other, net (227) 124
-------- --------
Net cash provided by (used for)
operating activities (1,559) 9,394
-------- --------
FINANCING ACTIVITIES
Payments of long-term debt (1,120) (48)
Dividends on common stock (857) (852)
Exercise of stock options 350 468
-------- --------
Net cash (used for) financing activities (1,627) (432)
-------- --------
INVESTING ACTIVITIES
Additions to property, plant and equipment (1,957) (780)
Additions to other non-current assets (551) (384)
-------- --------
Net cash (used for) investing activities (2,508) (1,164)
-------- --------
Increase (decrease) in cash and
cash equivalents (5,694) 7,798
Cash and cash equivalents at
beginning of period 23,748 29,467
-------- --------
Cash and cash equivalents at end of period $ 18,054 $ 37,265
======== ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest $ 260 $ 306
Income taxes 17 355
See accompanying notes.<PAGE>
<PAGE> 5
WYLE LABORATORIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1 -- Basis of Presentation
- - -------------------------------
The consolidated financial statements included herein have been
prepared by the company, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in
financial statements prepared in accordance with generally
accepted accounting principles have been omitted pursuant to such
rules and regulations. The accompanying consolidated financial
statements have been prepared on the same basis as the
consolidated financial statements for the eleven-month fiscal
period ended December 31, 1993. These financial statements should
be read in conjunction with the financial statements and the notes
thereto included in the company's Annual Report to Shareholders
for the eleven-month fiscal period ended December 31, 1993.
Effective December 31, 1993, the company changed its year-end from
January 31 to December 31. Although the three-month periods ended
March 31, 1994 and April 30, 1993 are not the same, the company
believes that this difference did not materially affect the
comparability of the financial information presented.
The consolidated financial statements include the accounts of the
company and all of its subsidiaries after eliminating all
significant intercompany transactions and reflect all normal
recurring adjustments which are, in the opinion of management,
necessary to present a fair statement of the results for the
interim periods reported. The results of operations for the three
months ended March 31, 1994 are not necessarily indicative of the
results to be expected for the full year.
The company's fiscal quarters are on a 13-week basis. The first
quarter of 1994 ended on April 3, 1994 (the Sunday nearest March
31, 1994). For clarity of presentation, the company uses calendar
month-end dates for financial reporting purposes.
Note 2 -- Change in Accounting Principle
- - ----------------------------------------
In November 1992, the Financial Accounting Standards Board (the
"FASB") issued Statement No. 112, "Employers' Accounting for
Postemployment Benefits." This statement required the company to
change its method of accounting for postemployment benefits
provided to qualifying former or inactive employees and their
dependents before retirement, to accrue for the cost of these
benefits during an employee's years of service. The adoption of
FASB Statement No. 112 did not have a material effect on the
company's net income or financial position.<PAGE>
<PAGE> 6
Note 3 -- Inventories
- - ---------------------
A detail of inventory balances at March 31, 1994 and December 31,
1993 is presented below:
(In thousands)
Inventories: 3/31/94 12/31/93
-------- --------
Finished goods $101,280 $100,600
Work in process 3,543 3,057
Raw materials 1,970 2,059
-------- --------
Total $106,793 $105,716
======== ========
<PAGE>
<PAGE> 7
Item 2. Management's Discussion and Analysis of Results
of Operations and Financial Condition
Comparative Sales and Income by Major Lines of Business
- - -------------------------------------------------------
(In thousands)
Three Months Ended
---------------------
March 31, April 30,
1994 1993
--------- ---------
NET SALES
- - ---------
Electronics Marketing $175,579 $112,016
Scientific Services & Systems 21,616 25,608
-------- --------
Total $197,195 $137,624
======== ========
INCOME
- - ------
Electronics Marketing $ 5,126 $ 7,165
Scientific Services & Systems 1,345 1,722
-------- --------
Operating income 6,471 8,887
General corporate expenses (1,797) (1,746)
Interest expense, net (142) (52)
-------- --------
Income before income taxes and
accounting change $ 4,532 $ 7,089
======== ======== <PAGE>
<PAGE> 8
Results of Operations
- - ---------------------
Consolidated sales for the first quarter ended March 31, 1994 totaled
$197,195,000, up 43% versus the three months ended April 30, 1993.
After tax income aggregated $2,809,000, compared with $4,537,000
(before the effect of an accounting change)in the prior year.
Effective December 31, 1993, the company changed its year-end from
January 31 to December 31. Although the three-month periods ended
March 31, 1994 and April 30, 1993 are not the same, the company
believes this difference did not materially affect the comparability
of the financial information presented.
The company's higher sales reflected an increase in shipments at the
Electronics Marketing Group, offset in part by a decline in billings
at the Scientific Services & Systems Group. The reduction in earnings
this year compared to the previous year resulted mainly from costs
incurred in opening ten new facilities in connection with the
previously announced major expansion program at the company's
Electronics Marketing Group.
During the first quarter ended April 30, 1993, the company recorded a
one-time, non-cash charge of $3,193,000, after tax, for the cumulative
effect of an accounting change to adopt FASB Statement No. 106,
"Employers' Accounting for Postretirement Benefits Other Than
Pensions."
The Electronics Marketing Group posted first quarter sales of
$175,579,000 and operating income of $5,126,000. In comparison to the
first quarter of the prior year, revenues rose 57%, while earnings
declined 28% due primarily to expansion-related investment costs. The
gain in sales resulted mainly from increased demand for semiconductor
products, particularly those offered through the group's value-added
activities such as kitting, turnkey manufacturing,
autoreplenishment, design of application specific integrated circuits
(ASICs) and other design/programming services. The group also
registered higher shipments of lower margin commodity products,
primarily microprocessors, and increased computer product revenues,
mainly workstations, multi-user systems and mass storage devices. The
continued ramp-up in shipments from the group's new expansion
divisions also contributed to the current year's sales growth.
The favorable effect of the group's increase in sales was offset
partly by a decline in its aggregate gross margin percentage due
primarily to a change in product mix, as a higher percentage of
revenues was generated from lower margin commodity products and high-
volume customer engagements. Without expansion operations, the group's
earnings for the quarter were above those achieved in the prior year.
The Electronics Marketing Group's strategic geographic expansion
program to open ten new divisions in key eastern and midwestern
markets within the United States is proceeding. As sales from these
new locations continue to increase, the company believes that the
expansion operations could begin to generate profits during the second
half of calendar 1994.<PAGE>
<PAGE> 9
The electronics distribution industry is highly sensitive to
fluctuating market conditions primarily caused by changes in the
supply and demand for semiconductors and computer products. The
group's financial results have in the past reflected variations from
period-to-period due to these factors.
The Scientific Services & Systems Group recorded first quarter sales
of $21,616,000 and operating income of $1,345,000. Revenues and
earnings for the group declined 16% and 22%, respectively, compared to
the prior year. The group's lower sales versus the previous year
reflect mainly a reduction in nuclear services related business levels
and the completion of certain international contracts, offset in part
by an increase in manufacturing revenues. The reduction in the group's
earnings year-to-year resulted primarily from continuing competitive
conditions in its major markets.
A significant portion of the Scientific Services & Systems Group's
business is generated directly or indirectly from competitively bid
government contracts. The group's financial results have in the past
and may in the future be affected by government budget cutbacks and
funding delays in programs to which these contracts relate.
Financial Condition
- - -------------------
Working capital as of March 31, 1994 totaled $143,968,000, up slightly
from December 31, 1993. The growth in working capital can primarily be
attributed to higher trade receivables at the Electronics Marketing
Group due to higher sales levels, offset partially by lower cash and
cash equivalents and increases in accounts payable and accrued
expenses. The current ratio at March 31, 1994 and December 31, 1993
was 2.7 and 2.8, respectively.
The ratio of long-term debt to total capital (long-term debt plus
equity) was 3% at March 31, 1994 and 4% at December 31, 1993. The
company's cash requirements in 1994 are expected to be higher than
normal due to funds required to finance continuing start-up costs and
working capital associated with the Electronics Marketing Group's
expansion program. In addition, capital outlays of approximately $10-
12 million are anticipated to be made during 1994 and 1995 for
construction of a new warehouse/value-added distribution center for
the Electronics Marketing Group. The company's near-term cash
requirements are expected to be financed through a combination of cash
and cash equivalent balances on hand, internally generated cash flow
and bank borrowings as required.<PAGE>
<PAGE> 10
PART II - OTHER INFORMATION
- - ---------------------------
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits:
10. Agreement and General Release between John R. Herring
and the company dated April 11, 1994
11. Calculation of Income Per Share
(b) Reports on Form 8-K:
None.
No responses are given to any other items of Part II because the
answers are either negative or not applicable.
<PAGE>
<PAGE> 11
SIGNATURE
---------
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
WYLE LABORATORIES
Date: May 16, 1994 By: R. VAN NESS HOLLAND, JR.
------------------------
R. Van Ness Holland, Jr.
Executive Vice President-
Finance and Treasurer,
Chief Financial Officer
<PAGE>
<PAGE> 12
WYLE LABORATORIES
INDEX TO EXHIBITS FILED WITH FORM 10-Q
For the Quarter Ended March 31, 1994
Exhibits:
- - --------
10. Agreement and General Release between John R. Herring and the
company dated April 11, 1994
11. Calculation of Income Per Share
<PAGE>
EXHIBIT 10
----------
AGREEMENT AND GENERAL RELEASE
John R. Herring (the "Employee") and Wyle Laboratories (the
"Company") have entered into the following Agreement to resolve all
issues relating to the Employee's employment with the Company. This
Agreement and General Release ("Agreement") is effective as of the date
specified in Section NINE.
ONE: Employment.
The Employee's employment with and compensation
from Wyle Laboratories will continue pursuant to the terms of his
Employment Agreement dated February 1, 1988, through July 31, 1994, at
which time the Employee will resign to commence retirement.
TWO: Benefits.
The Employee shall receive the following upon
his retirement effective August 1, 1994:
(a) The Company will supplement, through the
Wyle Laboratories Supplemental Executive Retirement Plan, the Employee's
currently-accrued retirement benefit such that the Employee will receive
an aggregate retirement benefit equal to that which he would have had if
he had retired at age 65.
(b) The Company will continue to make premium
payments on the group permanent life insurance policy with Security
Mutual Life that it has procured for the Employee until his 65th
birthday.
(c) The Company will assist the Employee in
converting his existing $200,000 face amount of contributory group life
insurance with Northwestern National Life Insurance Company to a whole
life policy.
(d) The Company will continue the existing
split dollar life insurance policy with Security Mutual Life in effect
until the Employee reaches age 65 under the same arrangement in effect
as of February 1, 1994.
(e) The Company will provide the Employee with
office space the Company selects and access to secretarial services
during the period he serves as a Director of the Company.
(f) On or before July 31, 1994, the Company
will present to the Executive Compensation Committee for its
consideration, a discretionary incentive award recommendation for the
seven-month period ending July 31, 1994, which amount shall be
determined thereafter by the Executive Compensation Committee and the
Board of Directors of the Company at its next regularly scheduled
meeting.
(g) The Company will give the Employee his
Company car effective August 1, 1994. The Employee shall declare the
low "Blue Book" value as taxable income at that time.<PAGE>
(h) From August 1994 until the Employee's 65th
birthday, the Company will pay to the Employee monthly an amount
representing the difference between the Wyle Laboratories Retiree
Medical Plan premium and the Wyle Laboratories Medical Plan premium.
The Employee shall cease to be eligible to
participate under any other benefit plans of the Company following
termination of the Employee's employment on July 31, 1994, except those
benefits, including retiree medical benefits, to which he is entitled as
a retiree or under this Agreement.
The Employee agrees that the Company is not
required to pay or provide any of the foregoing to the Employee except
as obligated by execution of this Agreement and that the Company may
withhold taxes from the foregoing to the extent required by law, as
conclusively determined by the Company. The Employee further agrees
that the Employee is not entitled to receive, will not claim and
expressly waives any entitlement to rights, benefits or compensation
other than as expressly set forth in this Agreement.
THREE: Complete Release.
(a) Release: The Employee irrevocably and
unconditionally releases all of the claims described in subsection (b)
in existence when this Agreement becomes effective under Section NINE
that the Employee may now have (or which may arise before the Employee's
employment with the Company ends) against the following persons or
entities (the "Releasees"): The Company, all related companies and all
of the Company's or such related companies' predecessors and successors;
and, with respect to each such entity, all of its past and present
employees, officers, directors, stockholders, owners, representatives,
assigns, attorneys, agents, insurers, employee benefit programs (and the
trustees, administrators, fiduciaries and insurers of such programs) and
any other persons acting by, through, under or in concert with any of
the persons or entities listed in this subsection.
(b) Claims Released: Except as provided in
subsection (d), the claims released include all claims, promises, debts,
causes of action or similar rights of any type or nature the Employee
has or had which in any way relate to (1) the Employee's employment with
the Company, or the termination of that employment, such as claims for
compensation, bonuses, commissions, lost wages or unused accrued
vacation or sick pay, (2) the design or administration of any employee
benefit program or the Employee's entitlement to benefits under any such
program, (3) any rights the Employee has to severance or similar
benefits under any program, policy or procedure of the Company, (4) any
rights the Employee may have to the continued receipt of health or life
insurance-type benefits except as expressly provided in Sections ONE and
TWO of this Agreement, (5) any claims to attorneys fees or other
indemnities, and (6) any other claims or demands the Employee may on any
basis have or have had. The claims released, for example, may have
arisen under any of the following statutes or common law doctrines:
Anti-Discrimination Statutes, such as the Age
Discrimination in Employment Act and Executive Order 11141, which
prohibit age discrimination in employment; Title VII of the Civil Rights
Act of 1964, Section 1981 of the Civil Rights Act of 1866 and Executive
Order 11246, which prohibit discrimination based on race, color,<PAGE>
national origin, religion or sex; the Equal Pay Act, which prohibits
paying men and women unequal pay for equal work; the Americans With
Disabilities Act and Subsection 503 and 504 of the Rehabilitation Act of
1973, which prohibit discrimination against the disabled; the California
Fair Employment and Housing Act, which prohibits discrimination in
employment based on race, color, national origin, ancestry, physical or
mental disability, medical condition, marital status, sex or age; and
any other federal, state or local laws or regulations prohibiting
employment discrimination.
Federal Employment Statutes, such as the WARN
Act, which requires that advance notice be given of certain work force
reductions; the Employee Retirement Income Security Act of 1974, which,
among other things, protects pension or health plan benefits; and the
Fair Labor Standards Act of 1938, which regulates wage and hour matters.
Other Laws, such as any federal, state or local
law providing workers' compensation benefits, restricting an employer's
right to terminate employees or otherwise regulating employment; any
federal, state or local law enforcing express or implied employment
contracts or requiring an employer to deal with employees fairly or in
good faith; California Labor Code Subsection 200 et seq., relating to
salary, commission, compensation, benefits and other matters; the
California Workers' Compensation Act; the California Unemployment
Insurance Code; any applicable California Industrial Welfare Commission
Order; and any other federal, state or local laws providing recourse for
alleged wrongful discharge, physical or personal injury, emotional
distress, fraud, negligent misrepresentation, libel, slander, defamation
and similar or related claims. The laws referred to in this Section
include statutes, regulations, other administrative guidance and common
law doctrines.
(c) Release Extends to Both Known and Unknown
Claims: This release covers both claims that the Employee knows about
and those the Employee does not know about. The Employee understands
the significance of his release of unknown claims and his waiver of
statutory protection against a release of unknown claims. The Employee
expressly waives the protection of Section 1542 of the Civil Code of the
State of California, which states as follows:
A general release does not extend to claims which the
creditor does not know or suspect to exist in his
favor at the time of executing the release, which if
known by him must have materially affected his
settlement with the debtor.
The Employee expressly waives all rights afforded by any statute which
limits the effect of a release with respect to unknown claims.
(d) Claims Not Released by the Employee: This
Agreement does not release: (1) Any rights or claims that arise after
the date this Agreement becomes effective, such as rights the Employee
may thereafter have under the Age Discrimination in Employment Act.
(The Employee understands and agrees that his right to challenge the
termination of his employment specified in Section ONE is a right that
arose before this Agreement was executed by him and has been waived by
the terms of this Agreement.) (2) The Employee's right to the benefits<PAGE>
provided by this Agreement and by his Employment Agreement through July
31, 1994, as well as the right to enforce this Agreement. (3) The
Employee's rights, if any, to unpaid salary and standard employee
insurance benefits through July 31, 1994, pension and retiree medical
benefits, and COBRA health benefits, except to the extent the Employee's
claim is for extra benefits based on payments under this Agreement or
the claim was rejected or denied, either as to the Employee or as to
other similarly situated employees, before this Agreement became
effective.
(e) Ownership of Claims: The Employee
represents that the Employee has not assigned or transferred, or
purported to assign or transfer, all or any part of any claim released
by this Agreement.
FOUR: Employee's Promises.
In addition to the release of claims provided
for in Section THREE, the Employee also agrees to the following:
(a) Employment to Terminate: The Employee
hereby agrees to resign employment with the Company as of the close of
business on July 31, 1994. The Employee understands that the Employee's
employment with the Company and all related companies will never be
resumed again at any time in the future. The Employee acknowledges that
the Employee is resigning in exchange for the benefits payable or
provided under this Agreement.
(b) No Pursuit of Released Claims: The
Employee promises never to file or prosecute a lawsuit or other
complaint or charge asserting any claims that are released by the
Agreement. The Employee represents that the Employee has not filed or
caused to be filed any lawsuit, complaint or charge with respect to any
claim this Agreement releases. The Employee further agrees to request
any government agency or other body assuming jurisdiction of any
complaint or charge relating to a released claim to withdraw from or
dismiss the matter with prejudice.
(c) Company Property to be Returned: The
Employee promises that, on or before the Employee's last day of work,
the Employee will return to the Company all files, memoranda, documents,
records, copies of the foregoing, credit cards, keys and any other
Company property in the Employee's possession or control, except those
the Employee uses in conjunction with his service on the Board of
Directors.
(d) Employee not to Harm the Company: The
Employee agrees not to incur any expenses, obligations or liabilities on
behalf of the Company after his employment terminates and agrees not to
criticize, denigrate or otherwise disparage the Company or any other
Releasee. The Employee acknowledges that he, in confidence, was
furnished or acquired secret, confidential or proprietary information
and trade secrets concerning the operations of the Company and its
affiliates, their future plans and their methods of doing business. The<PAGE>
Employee recognizes that the Company and its affiliates would be
severely damaged if this data were used by the Employee or disclosed to
any other person or entity. The Employee agrees not to make use of this
data and to keep it secret and agrees that these promises shall never
expire. Because the Employee's solicitation of the Company's customers,
suppliers or employees would, under certain circumstances, necessarily
involve the use or disclosure of confidential information protected by
this Agreement, the Employee further agrees, for a period of twenty-four
(24) months from the effective date of this Agreement, not to solicit or
attempt to solicit any customer or supplier of the Company to do
business with any person, corporation or other entity or to solicit for
employment any person who is or, within six months prior to such
solicitation, was an officer, manager or employee of the Company or its
affiliates.
(e) Cooperation Required: The Employee agrees
that, to the extent and in the manner requested by the Company, the
Employee will fully cooperate with the Company and assist the Company in
effecting a smooth transition of the Employee's responsibilities. For
example, the Employee, when requested by the Company, must promptly and
fully respond to all inquiries from the Company and its representatives
relating to any legal matters involving the Company and testify in
connection with said matters if requested by the Company or compelled by
law. To the extent the Employee incurs out-of-pocket expenses (such as
postage costs or telephone charges) in assisting the Company at its
request, the Company will mail the Employee a reimbursement check for
those expenses within fifteen days after it receives a request for
payment from the Employee, with satisfactory written substantiation of
the claimed expenses.
(f) Tax Indemnity: The Employee agrees that
the Employee is solely responsible for all tax obligations which may
arise in connection with payments to the Employee under this Agreement.
The Employee agrees to indemnify the Company for all expenses, penalties
or interest charges it incurs as a result of not paying payroll taxes
on, or withholding taxes from, amounts paid under this Agreement. The
Employee further agrees not to make any claim against the Company or any
other person based on how the Company reports amounts paid under this
Agreement to tax authorities or if an adverse determination is made as
to the tax treatment of any amounts payable under this Agreement. In
addition, the Employee understands and agrees that the Company has no
duty to try to prevent such an adverse determination.
(g) Promise to Sign Later Release of Claims:
The Employee agrees that he will execute the General Release of Claims
attached as Exhibit "A" at the close of his last day of employment, July
31, 1994, to effect a final waiver of any claim that arises between the
effective date of this Agreement and July 31, 1994, in exchange for
which the Company will release the Employee to the extent provided in
the General Release of Claims.
FIVE: Non-Admission of Liability.
The Company has entered into this Agreement with
the Employee to effect a mutually acceptable resolution of each claim
that is released in Section THREE. The Company does not believe or<PAGE>
admit that it or any other Releasee has done anything wrong. The
Employee agrees that this Agreement shall not be admissible in any court
or other forum for any purpose other that the enforcement of its terms.
SIX: Consequences of Employee's Violation of
Promises.
(a) General Consequences: If the Employee
breaks any of the Employee's promises in this Agreement, for example, by
filing or prosecuting a lawsuit or charge based on claims that the
Employee has released, or if any representation made by the Employee in
this Agreement was false when made, the Employee (1) shall forfeit all
right to future benefits under this Agreement, (2) must repay all
benefits previously received, upon the Company's demand, and (3) must
pay reasonable attorneys' fees and all other costs incurred as a result
of the Employee's breach or false representation, such as the cost of
defending any suit brought with respect to a released claim by the
Employee or other owner of a released claim.
(b) Injunctive Relief: The Employee further
agrees that the Company would be irreparably harmed by any actual or
threatened violation of Section FOUR that involves disclosure or use of
confidential information or solicitation of employees or customers of
the Company, and that the Company shall be entitled to an injunction
prohibiting the Employee from committing any such violation.
(c) Challenges to Validity: Should the
Employee attempt to challenge the enforceability of this Agreement, the
Employee shall initially tender to the payor, by certified checks
delivered to the Company, all amounts received pursuant to this
Agreement, plus interest and invite the Company to cancel this Agreement
before commencing any legal action in any forum whatsoever. In the
event the Company accepts this offer, this Agreement shall be cancelled.
In the event the Company does not accept this offer, the Company shall
so notify the Employee and the amount tendered by the Employee shall be
placed in an interest-bearing account pending a determination of the
enforceability of this Agreement. If the Agreement is determined to be
enforceable, the amount in the account, less the attorneys' fees, costs,
damages and expenses awarded to the Company pursuant to Section SIX
and/or THIRTEEN, shall be repaid to the Employee; if this Agreement is
not enforceable, the amount in the account shall be retained by the
Company or its designee.
SEVEN: Period for Consideration of Agreement.
The Employee acknowledges that the Employee was
given a period of at least twenty-one (21) days to review and consider
this Agreement before signing it. The Employee further acknowledges
that the Employee (1) took advantage of this period to consider this
Agreement before signing it, (2) carefully read this Agreement, (3)
fully understands it and (4) is entering into it voluntarily.
EIGHT: Encouragement to Consult with Attorney.
The Employee acknowledges that the Company
strongly encouraged the Employee to discuss this Agreement with an
attorney (at the Employee's own expense) before signing this Agreement
and that, to the extent the Employee deemed it appropriate, the Employee
did so.<PAGE>
NINE: Effective Date of Agreement.
The Employee may revoke this Agreement within
seven (7) days after the Employee signs it. The last day on which this
Agreement can be revoked is called the "Last Revocation Day."
Revocation shall be made by delivering a written notice of revocation to
Stephen Natcher at Wyle Laboratories, 15370 Barranca Parkway, Irvine,
California 92619-7008, no later than the close of business on the Last
Revocation Day. If the Employee revokes this Agreement, it shall not
become effective and the Employee will not receive the amounts or
benefits described in Section TWO. If the Employee does not revoke this
Agreement, it shall become effective on the day after the Last
Revocation Day.
TEN: Severability.
The provisions of this Agreement are severable.
If any part of it is found to be unenforceable, all other provisions
shall remain fully valid and enforceable.
ELEVEN: Choice of Laws.
This Agreement shall be interpreted and enforced
under the laws of the State of California.
TWELVE: Nature, Effect and Interpretation of
this Agreement.
(a) Entire Agreement: This is the entire
Agreement between the Employee and the Company regarding the subjects
addressed in the Agreement; it may not be modified or cancelled in any
manner except by a writing signed by both the Company and the Employee.
The Company has made no promises to the Employee other than those in
this Agreement.
(b) Successors and Assignees: This Agreement
shall bind the Employee's heirs, administrators, representatives,
executors, successors and assigns, and shall inure to the benefit of all
Releasees and their respective heirs, administrators, representatives,
executors, successors and assigns.
(c) Interpretation: This Agreement shall be
construed as a whole according to its fair meaning, and not strictly for
or against any of the parties. Unless the context indicates otherwise,
the term "or" shall be deemed to include the term "and" and the singular
or plural number shall be deemed to include the other. Paragraph
headings used in this Agreement are intended solely for convenience of
reference and shall not be used in the interpretation of any of this
Agreement. <PAGE>
(d) Implementation: The Company and the
Employee both agree that, without the receipt of further consideration,
they will sign and deliver any documents and do anything else that is
necessary in the future to make the provisions of this Agreement
effective.
THIRTEEN: Arbitration of Disputes.
(a) Agreement to Arbitrate: Any dispute (an
"Arbitrable Dispute") about the validity, interpretation, effect or
alleged violations of this Agreement must be submitted to final and
binding arbitration in Orange County, California, before a judicial
arbitrator selected in accordance with the procedures of the Judicial
Arbitration and Mediation Services. Should either party pursue any
other legal or administrative action against the other, the responding
party shall be entitled to the return of any payments that party made
under this Agreement and shall be entitled to recover all damages,
costs, expenses and attorneys' fees the responding party incurs as a
result of such action. The arbitrator may not modify or change this
Agreement in any way.
(b) Costs of Arbitration: Each party shall pay
the fees of their respective attorneys, the expenses of their witnesses
and any other expenses connected with the arbitration, but all other
costs of the arbitration, including the fees of the arbitrator, cost of
any record or transcript of the arbitration, administrative fees and
other fees and costs shall be paid in equal shares by the Employee and
the Company. The party losing the arbitration shall reimburse the party
who prevailed for all expenses the prevailing party paid pursuant to the
preceding sentence.
(c) Exclusive Remedy: Arbitration in this
manner shall be the exclusive remedy for any Arbitrable Dispute. The
arbitrator's decision or award shall be fully enforceable and subject to
an entry of judgment by a court of competent jurisdiction. Should the
Employee or the Company attempt to resolve an Arbitrable Dispute by any
method other than arbitration pursuant to this Section, the responding
party shall be entitled to recover from the initiating party all
damages, costs, expenses and attorneys' fees incurred as a result and the
responding party shall be entitled to the return of any payments that
party made under this Agreement.
(d) Sole Exception: Notwithstanding the
foregoing, a dispute relating to alleged violations of Section FOUR
involving the use or disclosure of confidential information or the
solicitation of employees or customers of the Company, at the Company's
sole option, may be resolved through a means other than arbitration.<PAGE>
PLEASE READ THIS AGREEMENT CAREFULLY. IT CONTAINS A RELEASE
OF ALL KNOWN AND UNKNOWN CLAIMS.
Executed at El Segundo, California, this 7th day of April, 1994.
JOHN R. HERRING
---------------
EMPLOYEE
Executed at Irvine, California, this 11TH day of April, 1994.
STEPHEN D. NATCHER
------------------
COMPANY<PAGE>
EXHIBIT "A"
GENERAL RELEASE OF CLAIMS
John R. Herring (the "Employee") and Wyle Laboratories (the
"Company") have entered into the following General Release of Claims
("Agreement') to resolve all issues arising on or before the effective
date of this Agreement as specified in Section SIX. This Agreement
supplements the terms of the Agreement and General Release which became
effective on _______________, 1994.
ONE: Complete Release.
(a) Release: The Employee irrevocably and
unconditionally releases all of the claims described in subsection (b)
in existence when this Agreement becomes effective under Section SIX
that the Employee may have against the following persons or entities
(the "Releasees"): The Company, all related companies and all of the
Company's or such related companies' predecessors and successors; and,
with respect to each such entity, all of its past and present employees,
officers, directors, stockholders, owners, representatives, assigns,
attorneys, agents, insurers, employee benefit programs (and the
trustees, administrators, fiduciaries and insurers of such programs) and
any other persons acting by, through, under or in concert with any of
the persons or entities listed in this subsection. The Company
irrevocably and unconditionally releases all of the claims described in
subsection (b) in existence when this Agreement becomes effective under
Section SIX that the Company may have against the Employee or his heirs.
(b) Claims Released: Except as provided in
subsection (d), the claims released include all claims, promises, debts,
causes of action or similar rights of any type or nature the Employee
has or had which in any way relate to (1) the Employee's employment with
the Company, or the termination of that employment, such as claims for
compensation, bonuses, commissions, lost wages or unused accrued
vacation or sick pay, (2) the design or administration of any employee
benefit program or the Employee's entitlement to benefits under any such
program, (3) any rights the Employee has to severance or similar
benefits under any program, policy or procedure of the Company, (4) any
rights the Employee may have to the continued receipt of health or life
insurance-type benefits, (5) any claims to attorneys fees or other
indemnities, and (6) any other claims or demands the Employee may on any
basis have or have had. Except as provided in subsection (d), the
claims released by the Company include all claims, promises, debts,
causes of action or similar rights of any type or nature the Company has
or had against the Employee. The claims released, for example, may have
arisen under any of the following statutes or common law doctrines:
Anti-Discrimination Statutes, such as the Age
Discrimination in Employment Act and Executive Order 11141, which
prohibit age discrimination in employment; Title VII of the Civil Rights
Act of 1964, Section 1981 of the Civil Rights Act of 1866 and Executive
Order 11246, which prohibit discrimination based on race, color,<PAGE>
national origin, religion or sex; the Equal Pay Act, which prohibits
paying men and women unequal pay for equal work; the Americans With
Disabilities Act and Subsection 503 and 504 of the Rehabilitation Act of
1973, which prohibit discrimination against the disabled; the California
Fair Employment and Housing Act, which prohibits discrimination in
employment based on race, color, national origin, ancestry, physical or
mental disability, medical condition, marital status, sex or age; and
any other federal, state or local laws or regulations prohibiting
employment discrimination.
Federal Employment Statutes, such as the WARN
Act, which requires that advance notice be given of certain work force
reductions; the Employee Retirement Income Security Act of 1974, which,
among other things, protects pension or health plan benefits; and the
Fair Labor Standards Act of 1938, which regulates wage and hour matters.
Other Laws, such as any federal, state or local
law providing workers' compensation benefits, restricting an employer's
right to terminate employees or otherwise regulating employment; any
federal, state or local law enforcing express or implied employment
contracts or requiring an employer to deal with employees fairly or in
good faith; California Labor Code Subsection 200 et seq., relating to
salary, commission, compensation, benefits and other matters; the
California Workers' Compensation Act; the California Unemployment
Insurance Code; any applicable California Industrial Welfare Commission
Order; and any other federal, state or local laws providing recourse for
alleged wrongful discharge, physical or personal injury, emotional
distress, fraud, negligent misrepresentation, libel, slander, defamation
and similar or related claims. The laws referred to in this Section
include statutes, regulations, other administrative guidance and common
law doctrines.
(c) Release Extends to Both Known and Unknown
Claims: This release covers both claims that the parties know about and
those they do not know about. The parties understand the significance
of their release of unknown claims and their waiver of statutory
protection against a release of unknown claims. The parties expressly
waive the protection of Section 1542 of the Civil Code of the State of
California, which states as follows:
A general release does not extend to claims which the
creditor does not know or suspect to exist in his
favor at the time of executing the release, which if
known by him must have materially affected his
settlement with the debtor.
The parties expressly waive all rights afforded by any statute which
limits the effect of a release with respect to unknown claims.
(d) Claims Not Released: This Agreement does
not release: (1) Any rights or claims that arise under the Age
Discrimination in Employment Act after this Agreement was signed. (2)
The right of any party to the benefits of and the right to enforce this
Agreement or the Agreement and General Release appended to this
Agreement. (3) The Employee's rights, if any, to unpaid pension and to
COBRA and retiree health benefits under the Company's standard benefits<PAGE>
programs applicable to the Employee, except to the extent the Employee's
claim is for extra benefits based on payments under the appended
Agreement and General Release or the claim was rejected or denied,
either as to the Employee or as to other similarly situated employees,
before this Agreement became effective. (4) Claims by the Company
against the Employee based upon acts or omissions the Employee knew or
should have known to be unlawful. (5) Claims by the Company against the
Employee based upon an act or omission that does not arise in the course
and scope of his employment with the Company.
(e) Ownership of Claims: The Employee
represents that the Employee has not assigned or transferred, or
purported to assign or transfer, all or any part of any claim released
by this Agreement.
(f) No Pursuit of Released Claims: The parties
promise never to file or prosecute a lawsuit or other complaint or
charge asserting any claims that are released by the Agreement. The
parties represent that they have not filed or caused to be filed any
lawsuit, complaint or charge with respect to any claim this Agreement
releases and know of no basis at this time for filing any claim
whatsoever against the other party. The parties further agree to
request any government agency or other body assuming jurisdiction of any
complaint or charge relating to a released claim to withdraw from or
dismiss the matter with prejudice.
TWO: Non-Admission of Liability.
The parties have entered into this Agreement
with the Employee to effect a mutually acceptable resolution of each
claim that is released in Section ONE. The Company does not believe or
admit that it or any other Releasee has done anything wrong. The
Employee does not believe or admit that he has done anything wrong. The
parties agree that this Agreement shall not be admissible in any court
or other forum for any purpose other that the enforcement of its terms.
THREE: Consequences of Any Party's Violation of
Promises.
(a) General Consequences: If any party breaks
any of the promises made in this Agreement, for example, by filing or
prosecuting a lawsuit or charge based on claims that the party has
released, or if any representation made by the party in this Agreement
was false when made, the breaching party (1) shall forfeit all right to
future benefits under this Agreement, (2) must repay all benefits
previously received under this Agreement or the appended Agreement and
General Release upon the nonbreaching party's demand, and (3) must pay
reasonable attorneys' fees and all other costs incurred as a result of
that party's breach or false representation, such as the cost of
defending any suit brought with respect to a released claim.
(b) Challenges to Validity: Should the
Employee attempt to challenge the enforceability of this Agreement, he
shall comply with the provisions of Section SIX of the Agreement and
General Release.<PAGE>
FOUR: Period for Consideration of Agreement.
The Employee acknowledges that the Employee was
given a period of at least twenty-one (21) days to review and consider
this Agreement before signing it. The Employee further acknowledges
that the Employee (1) took advantage of this period to consider this
Agreement before signing it, (2) carefully read this Agreement, (3)
fully understands it and (4) is entering into it voluntarily.
FIVE: Encouragement to Consult with Attorney.
The Employee acknowledges that the Company
strongly encouraged the Employee to discuss this Agreement with an
attorney (at the Employee's own expense) before signing this Agreement
and that, to the extent the Employee deemed it appropriate, the Employee
did so.
SIX: Effective Date of Agreement.
The Employee may revoke this Agreement within
seven (7) days after the Employee signs it. The last day on which this
Agreement can be revoked is called the "Last Revocation Day."
Revocation shall be made by delivering a written notice of revocation to
Stephen Natcher at Wyle Laboratories, 15370 Barranca Parkway, Irvine,
California 92619-7008, no later than the close of business on the Last
Revocation Day. If the Employee revokes this Agreement, it shall not
become effective and the Employee will not receive the benefits of the
release contained in the Agreement. If the Employee does not revoke
this Agreement, it shall become effective on the day after the Last
Revocation Day.
The revocation of this Agreement shall not cause
the revocation of the Agreement and General Release executed by the
parties and appended to this Agreement.
SEVEN: Severability.
The provisions of this Agreement are severable.
If any part of it is found to be unenforceable, all other provisions
shall remain fully valid and enforceable.
EIGHT: Choice of Laws.
This Agreement shall be interpreted and enforced
under the laws of the State of California.
NINE: Nature, Effect and Interpretation of
this Agreement.
(a) Entire Agreement: This is the entire
Agreement between the Employee and the Company regarding the subjects
addressed in the Agreement; it may not be modified or cancelled in any
manner except by a writing signed by both the Company and the Employee.
The parties have made no promises to one another other than those in
this Agreement and the Agreement and General Release which is appended
to this Agreement.<PAGE>
(b) Successors and Assignees: This Agreement
shall bind the parties' heirs, administrators, representatives,
executors, successors and assigns, and shall inure to the benefit of the
Employee, the Company, all Releasees and their respective heirs,
administrators, representatives, executors, successors and assigns.
(c) Interpretation: This Agreement shall be
construed as a whole according to its fair meaning, and not strictly for
or against any of the parties. Unless the context indicates otherwise,
the term "or" shall be deemed to include the term "and" and the singular
or plural number shall be deemed to include the other. Paragraph
headings used in this Agreement are intended solely for convenience of
reference and shall not be used in the interpretation of any of this
Agreement.
(d) Implementation: The Company and the
Employee both agree that, without the receipt of further consideration,
they will sign and deliver any documents and do anything else that is
necessary in the future to make the provisions of this Agreement
effective.
TEN: Arbitration of Disputes.
(a) Agreement to Arbitrate: Any dispute (an
"Arbitrable Dispute") about the validity, interpretation, effect or
alleged violations of this Agreement must be submitted to final and
binding arbitration in Orange County, California, before a judicial
arbitrator selected in accordance with the procedures of the Judicial
Arbitration and Mediation Services. Should either party pursue any
other legal or administrative action against the other, the responding
party shall be entitled to the return of any payments that party made
under this Agreement and the Agreement and General Release appended
hereto, and shall be entitled to recover all damages, costs, expenses
and attorneys' fees the responding party incurs as a result of such
action. The arbitrator may not modify or change this Agreement in any
way.
(b) Costs of Arbitration: Each party shall pay
the fees of their respective attorneys, the expenses of their witnesses
and any other expenses connected with the arbitration, but all other
costs of the arbitration, including the fees of the arbitrator, cost of
any record or transcript of the arbitration, administrative fees and
other fees and costs shall be paid in equal shares by the Employee and
the Company. The party losing the arbitration shall reimburse the party
who prevailed for all expenses the prevailing party paid pursuant to the
preceding sentence.
(c) Exclusive Remedy: Arbitration in this
manner shall be the exclusive remedy for any Arbitrable Dispute. The
arbitrator's decision or award shall be fully enforceable and subject to
an entry of judgment by a court of competent jurisdiction. Should the
Employee or the Company attempt to resolve an Arbitrable Dispute by any
method other than arbitration pursuant to this Section, the responding
party shall be entitled to recover from the initiating party all<PAGE>
damages, costs, expenses and attorneys' fees incurred as a result and
the responding party shall be entitled to the return of any payments
that party made under this Agreement and the Agreement and General
Release appended hereto.
(d) Sole Exception: Notwithstanding the
foregoing, a dispute relating to alleged violations by the Employee of
Section FOUR of the Agreement and General Release involving the use or
disclosure of confidential information or the solicitation of employees
or customers of the Company, at the Company's sole option, may be
resolved through a means other than arbitration.
PLEASE READ THIS AGREEMENT CAREFULLY. IT CONTAINS A RELEASE
OF ALL KNOWN AND UNKNOWN CLAIMS.
Executed at _________________, California, this ____ day of
____________, 1994.
_____________________________
EMPLOYEE
Executed at Irvine, California, this ____ day of
____________, 1994.
_____________________________
COMPANY
<PAGE>
EXHIBIT 11
----------
WYLE LABORATORIES
CALCULATION OF INCOME PER SHARE
(Unaudited)
(In thousands, except per share amounts)
Three Months Ended
--------------------
March 31, April 30,
1994 1993
--------- ---------
Net income applicable to common shares. . $ 2,809 $ 1,344
========= =========
Common and common equivalent shares -
Weighted average number of common
shares outstanding. . . . . . . . . . 12,233 12,162
Stock options included under the
treasury stock method (1) . . . . . . 221 190
--------- ---------
12,454 12,352
========= =========
Income per share -
Income before accounting change . . . . $ .23 $ .37
Cumulative effect of accounting change ========= =========
for postretirement benefits other
than pensions . . . . . . . . . . . . $ - $ (.26)
========= =========
Net income per common share . . . . . . $ .23 $ .11
========= =========
(1) The assumed repurchase price of option shares is based on
the average market price for the period.
