<PAGE>
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 SEPTEMBER 30, 1995
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 ELECTRONICS
- -------------------------------------------------------------------------------
(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 October 31, 1995 registrant had 12,372,663 shares of common stock
outstanding.
<PAGE>
PART I - FINANCIAL INFORMATION
- ------------------------------
Item 1. Financial Statements
WYLE ELECTRONICS
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Nine Months
Ended September 30, Ended September 30,
----------------------- --------------------
1995 1994 1995 1994
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net sales $273,499 $204,148 $778,434 $567,831
-------- -------- -------- --------
Costs and expenses
Cost of sales 224,379 171,081 643,774 474,588
Selling & administrative expenses 31,391 25,745 91,060 77,118
Special charge - 1,900 - 1,900
Interest expense, net 1,043 370 1,940 758
Miscellaneous, net (214) (253) (866) (451)
-------- -------- -------- --------
256,599 198,843 735,908 553,913
-------- -------- -------- --------
Income from continuing operations
before income taxes 16,900 5,305 42,526 13,918
Income taxes 6,761 2,180 16,883 5,358
-------- -------- -------- --------
Income from continuing operations 10,139 3,125 25,643 8,560
Discontinued operations
Income (loss) from operations,
net of taxes - (250) - 1,418
Loss on sale, net of taxes - (13,442) - (13,442)
-------- -------- -------- --------
Net income (loss) $ 10,139 $(10,567) $ 25,643 $ (3,464)
======== ======== ======== ========
Income (loss) per share:
Income from continuing operations $ .80 $ .25 $ 2.03 $ .69
======== ======== ======== ========
Discontinued operations
Income (loss) from operations,
net of taxes $ - $ (.02) $ - $ .11
======== ======== ======== ========
Loss on sale, net of taxes $ - $ (1.08) $ - $ (1 .08)
======== ======== ======== ========
Net income (loss) $ .80 $ (.85) $ 2.03 $ (.28)
======== ======== ======== ========
Average common and common
equivalent shares 12,726 12,427 12,613 12,432
======== ======== ======== ========
Dividends per share $ .07 $ .07 $ .21 $ .21
======== ======== ======== ========
</TABLE>
See accompanying notes.
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WYLE ELECTRONICS
CONSOLIDATED BALANCE SHEETS
(In thousands)
<TABLE>
<CAPTION>
(Unaudited)
ASSETS 9/30/95 12/31/94
- ------ -------- ---------
<S> <C> <C>
Current assets
Cash and cash equivalents $ 11,797 $ 9,319
Receivables (less allowances of $6,528 at 9/30/95 and
$5,333 at 12/31/94) 150,665 115,082
Inventories 176,105 140,332
Prepaid expenses 6,765 9,301
-------- ---------
Total current assets 345,332 274,034
-------- ---------
Property, plant and equipment 50,518 32,666
Less accumulated depreciation 19,258 17,169
-------- ---------
31,260 15,497
-------- ---------
Other assets 17,107 16,382
-------- ---------
Total Assets $393,699 $ 305,913
======== =========
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
Current liabilities
Current maturities of long-term debt $ 3,000 $ 3,000
Accounts payable 78,749 70,444
Accrued expenses 28,090 29,817
-------- ---------
Total current liabilities 109,839 103,261
-------- ---------
Long-term debt, less current maturities 73,376 17,802
-------- ---------
Other liabilities 24,961 25,104
-------- ---------
Commitments and contingencies - -
-------- ---------
Shareholders' equity
Common stock 90,036 86,647
Retained earnings 95,487 73,099
-------- ---------
185,523 159,746
-------- ---------
Total Liabilities and Shareholders' Equity $393,699 $ 305,913
======== =========
</TABLE>
See accompanying notes.
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WYLE ELECTRONICS
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
(In thousands)
Nine Months
Ended September 30,
--------------------------
1995 1994
-------- --------
<S> <C> <C>
OPERATING ACTIVITIES
Net income (loss) $ 25,643 $ (3,464)
Adjustments to reconcile net income (loss) to net cash
(used for) operating activities:
Depreciation and amortization 3,472 4,946
Provision for losses on receivables 2,133 1,521
Provision for deferred income taxes 1,861 (1,748)
Loss on sale of discontinued operations - 13,442
(Increase) in receivables (37,716) (35,310)
(Increase) in inventories (35,773) (29,816)
Decrease in prepaid expenses 163 2,665
Increase in accounts payable 8,305 24,290
Increase (decrease) in accrued expenses (1,727) 7,276
Other, net 142 310
-------- --------
Net cash (used for) operating activities (33,497) (15,888)
-------- --------
FINANCING ACTIVITIES
Additions to long-term debt 55,574 13,001
Payments of long-term debt - (1,120)
Exercise of stock options 3,430 444
Dividends on common stock (2,591) (2,572)
Repurchase of common stock (847) -
-------- --------
Net cash provided by financing activities 55,566 9,753
-------- --------
INVESTING ACTIVITIES
Additions to property, plant and equipment (19,130) (5,866)
Additions to other non-current assets and liabilities, net (461) (615)
-------- --------
Net cash (used for) investing activities (19,591) (6,481)
-------- --------
Increase (decrease) in cash and cash equivalents 2,478 (12,616)
Cash and cash equivalents at beginning of period 9,319 23,748
-------- --------
Cash and cash equivalents at end of period $ 11,797 $ 11,132
======== ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest $ 2,188 $ 950
Income taxes 14,912 7,282
</TABLE>
See accompanying notes.
3 of 8
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WYLE ELECTRONICS
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 year ended December
31, 1994. 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 year ended December 31, 1994.
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 nine months
ended September 30, 1995 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 third quarter of 1995
ended on October 1, 1995 (the Sunday nearest September 30, 1995). Last year's
third quarter ended on October 2, 1994. For clarity of presentation, the company
uses calendar month-end dates for financial reporting purposes.
Note 2 -- Discontinued Operations
On December 23, 1994, the company completed the sale of its Scientific Services
& Systems (SS&S) business to WESS Investment Corporation (WESS). During the
third quarter ended September 30, 1994, the company recorded the originally
expected loss on sale of this discontinued operation of $13,442,000, which is
net of income tax benefits of $8,416,000. On March 13, 1995, the company was
notified that WESS was not awarded the renewal of a certain major SS&S contract
which, in accordance with provisions of the Asset Purchase Agreement between the
company and WESS, resulted in a reduction in the purchase price paid by WESS.
Consequently, the loss on sale of discontinued operations was increased by
$2,337,000, after tax, and this amount was included in the fourth quarter
results of operations, bringing the total loss on sale, net of income taxes, to
$15,779,000 for the year ended December 31, 1994.
Operating results for SS&S are classified as discontinued operations on the
company's consolidated statements of income for 1994. Sales applicable to
discontinued operations for the three and nine month periods ended September 30,
1994 totaled $18,443,000 and $61,076,000, respectively. Income (loss) from
discontinued operations is net of an income tax provision (benefit) of
$(139,000) for the third quarter and $1,036,000 for the nine months ended
September 30, 1994.
Note 3 -- Contingencies
See PART II - OTHER INFORMATION, Item 1. Legal Proceedings.
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Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Results of Operations
- ---------------------
Consolidated sales for the three and nine months ended September 30, 1995
totaled $273,499,000 and $778,434,000, respectively. Income from continuing
operations aggregated $10,139,000 for the current year's third quarter and
$25,643,000 for the year-to-date. In comparison to the prior year, sales rose by
34% in the third quarter and advanced 37% for the first nine months. Income from
continuing operations grew by 224% in the third quarter and increased 200% for
the nine months versus the prior year periods. For the third quarter ended
September 30, 1994, the company recorded a special charge to continuing
operations of $1.9 million ($1.2 million after tax) primarily for anticipated
legal expenses associated with a lawsuit filed by Avnet, Inc. (see Note 3 --
Contingencies).
During the third quarter ended September 30, 1994, the company recorded the
originally expected loss on sale of its Scientific Services & Systems (SS&S)
operation of $13,442,000, after income taxes, and accounted for this business as
a discontinued operation. After recording the loss on sale and income (loss)
from discontinued operations, the company in the previous year reported a net
loss of $10,567,000 for the third quarter and $3,464,000 for the nine months
ended September 30, 1994.
The higher sales for the third quarter and first nine months ended September 30,
1995, in comparison to the prior year, resulted mainly from increased shipments
of semiconductor products, particularly those offered through the company's
value-added activities such as kitting, turnkey manufacturing,
autoreplenishment, design of application specific integrated circuits (ASICs)
and other semiconductor design/programming services. Shipments of lower-margin
PC microprocessors this year were down from the corresponding periods of the
prior year. The company also registered significantly higher shipments of
computer systems and mass storage devices for both the quarter and nine months
versus last year.
The increase in income from continuing operations for the third quarter and
year-to-date over the prior year reflects primarily the company's growth in
sales. Additionally, the company's aggregate gross margin percentage has
increased in comparison to last year, due mainly to a change in the mix of
products sold. Earnings for the current year have also benefited from lower
selling and administrative expense as a percentage of sales, due in part to an
increase in sales for the company's new expansion branches, which began
operations in mid-1993.
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 company's financial results have in
the past reflected variations from period-to-period due to these factors.
Financial Condition
- -------------------
Working capital as of September 30, 1995 totaled $235,493,000, up $64,720,000
from December 31, 1994. The growth in working capital can be attributed
primarily to an increase in trade receivables and inventories due to higher
sales levels, offset partially by a rise in accounts payable. The current ratio
at September 30, 1995 and December 31, 1994 was 3.1 and 2.7, respectively. The
percentage of long-term debt to total capital (long-term debt plus equity) was
28% at September 30, 1995 and 10% at December 31, 1994. The higher percentage
primarily reflects an increase in bank borrowings, offset partially by an
increase in shareholders' equity with the addition of year-to-date net income.
5 of 8
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Capital expenditures for the nine months ended September 30, 1995 aggregated
$19,130,000, which are up from the corresponding period of the prior year due
mainly to the construction of a new warehouse/value-added distribution center.
Capital outlays in 1995 for this new facility, which is on schedule to become
fully operational in 1996, are currently expected to aggregate approximately $18
million.
The company's cash requirements for 1995 have been higher than normal due to
funds required to finance capital outlays for the construction of the new
warehouse/value-added distribution center, combined with increased levels of
working capital to support sales growth. The company's near-term cash
requirements are expected to be provided through a combination of internally
generated cash flow, available committed and non-committed bank borrowings, and
other financing sources.
PART II - OTHER INFORMATION
- ---------------------------
Item 1. Legal Proceedings
-----------------
In May 1993, Avnet, Inc. ("Avnet") and Hall-Mark Electronics Corporation ("Hall-
Mark") filed a civil action against the company and a former employee of Hall-
Mark in the Superior Court of Fulton County, Georgia, seeking injunctive and
unspecified monetary damages, alleging, inter alia, that the company tortiously
interfered with the employment relations of Hall-Mark and its employees and that
the company tortiously interfered with a proposed business combination between
the plaintiffs, which combination was consummated subsequently. Plaintiffs'
motion for a preliminary injunction was denied in part by the trial court and
affirmed by the Georgia Supreme Court in December 1993. The company has filed a
counterclaim against plaintiffs, alleging, inter alia, that plaintiffs have
tortiously interfered with the company's business and employment relations. On
October 31, 1995, plaintiffs dismissed their claims without prejudice in
Georgia, and the Georgia court then dismissed the counterclaim. In September,
1995, the plaintiffs had refiled the same action against the company and some
former employees in the Circuit Court of Hillsborough County, Florida, which the
company has now moved to dismiss. The Florida litigation is still pending.
While this litigation is in the pretrial stage, the company believes that
plaintiffs' complaint is without merit and will contest it vigorously. The
company recorded a special charge of $1,900,000 during the third quarter of
1994, primarily for anticipated legal expenses associated with the defense of
this litigation. Although the company believes that a result adverse to the
company in this matter is unlikely, there can be no assurance as to its outcome
or the ultimate impact on the company's net income or financial position.
6 of 8
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits:
3(b). Bylaws of the Company, as amended to date
11. Calculation of Income Per Share
27. Financial Data Schedule
(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.
7 of 8
<PAGE>
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 ELECTRONICS
Date: November 14, 1995 By: /s/ R. VAN NESS HOLLAND, JR.
---------------------------
R. Van Ness Holland, Jr.
Executive Vice President-
Finance and Treasurer,
Chief Financial Officer
8 of 8
<PAGE>
WYLE ELECTRONICS
INDEX TO EXHIBITS FILED WITH FORM 10-Q
For the Quarter Ended September 30, 1995
Exhibits:
- --------
3(b). Bylaws of the Company, as amended to date
11. Calculation of Income Per Share
27. Financial Data Schedule
<PAGE>
EXHIBIT 3(b)
WYLE ELECTRONICS BYLAWS
<PAGE>
WYLE ELECTRONICS BYLAWS
TABLE OF CONTENTS
-----------------
ARTICLE I
GENERAL PROVISIONS
<TABLE>
<CAPTION>
Section Title Page
- ------------ --------------------------------- ----
<C> <S> <C>
1.01 Principal Executive Office 1
1.02 Number of Directors 1
</TABLE>
ARTICLE II
SHARES AND SHAREHOLDERS
<TABLE>
<CAPTION>
Section Title Page
- ------------ --------------------------------- ----
<C> <S> <C>
2.01 Meetings of Shareholders 1
(a) Place of Meetings 1
(b) Annual Meetings 1
(c) Special Meetings 2
(d) Notice of Meetings 2
(e) Notice of Shareholder Business
and Nominations 3
(f) Adjourned Meeting and Notice Thereof 5
(g) Waiver of Notice 5
(h) Quorum 6
2.02 Action Without a Meeting 6
2.03 Voting of Shares 6
(a) In General 7
(b) Cumulative Voting 7
(c) Election by Ballot 7
2.04 Proxies 7
2.05 Inspectors of Election 7
(a) Appointment 7
(b) Duties 8
2.06 Record Date 8
2.07 Share Certificates 9
(a) In General 9
(b) Two or More Classes or Series 9
(c) Special Restrictions 10
2.08 Lost, Stolen or Destroyed Certificates 10
2.09 Certificateless Shares 10
</TABLE>
ii
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ARTICLE III
DIRECTORS
<TABLE>
<CAPTION>
Section Title Page
- ----------- --------------------------------- ----
<C> <S> <C>
3.01 Powers 11
3.02 Committees of the Board 11
3.03 Election and Term of Office 12
3.04 Vacancies 13
3.05 Removal 13
3.06 Resignation 13
3.07 Meetings of the Board of Directors 13
(a) Regular Meetings 13
(b) Organization Meeting 13
(c) Special Meetings 14
(d) Notice of Meetings 14
(e) Adjournment 14
(f) Place of Meeting 14
(g) Presence by Conference Telephone Call 14
(h) Quorum 14
3.08 Action Without Meetings 14
3.09 Committee Meetings 15
</TABLE>
ARTICLE IV
OFFICERS
<TABLE>
<CAPTION>
Section Title Page
- ----------- --------------------------------- ----
<C> <S> <C>
4.01 Officers 15
4.02 Elections 15
4.03 Other Officers 15
4.04 Resignation 15
4.05 Chief Executive Officer 15
</TABLE>
iii
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ARTICLE V
MISCELLANEOUS
<TABLE>
<CAPTION>
Section Title Page
- ----------- --------------------------------- ----
<C> <S> <C>
5.01 Records and Reports 16
(a) Books and Account and Proceedings 16
(b) Annual Report 16
5.02 Representation of Shares of Other Corporations 16
5.03 Indemnification and Insurance 16
5.04 Construction and Definitions 17
</TABLE>
ARTICLE VI
AMENDMENTS
<TABLE>
<CAPTION>
Section Title Page
- ----------- --------------------------------- ----
<C> <S> <C>
6.01 Power of Shareholders 17
6.02 Power of Directors 18
</TABLE>
iv
<PAGE>
BYLAWS FOR THE REGULATION OF
WYLE ELECTRONICS
a California corporation
ARTICLE I
GENERAL PROVISIONS
Section 1.01 Principal Executive Office. The principal executive office
--------------------------
of the corporation shall be located at 15370 Barranca Parkway, Irvine,
California 92718. The Board of Directors shall have the power to change the
principal office to another location and may fix and locate one or more
subsidiary offices within or without the State of California.
Section 1.02 Number of Directors. The affairs of the Corporation shall be
-------------------
managed by a Board of Directors consisting of not less than 7 nor more than 12
Directors. The exact number of Directors within the limits specified shall be 12
until midnight May 8, 1995, at which time the exact number shall be 9 until
change by an amendment to these bylaws duly adopted by the Board of Directors or
by the shareholders. Such indefinite number may be changed, or a definite
number fixed without provision for an indefinite number, by an amendment to
these bylaws duly adopted by the vote or written consent of a majority of the
outstanding shares entitled to vote; provided, however, that a bylaw reducing
the minimum number of directors to a number less than five cannot be adopted if
the votes cast against its adoption at a meeting or the shares not consenting in
the case of action by written consent are equal to more than 16-2/3 percent of
the outstanding shares entitled to vote. No amendment may change the stated
maximum number of authorized directors to a number greater than two times the
stated minimum number of directors minus one.
ARTICLE II
SHARES AND SHAREHOLDERS
Section 2.01 Meetings of Shareholders.
------------------------
(a) Place of Meetings. Meetings of shareholders shall be held at any
-----------------
place within or without the State of California designated by the Board of
Directors. In the absence of any such designation, shareholder meetings shall
be held at the principal executive office of the corporation.
(b) Annual Meetings. An annual meeting of the shareholders of the
---------------
corporation shall be held at 10:30 a.m. on the second Tuesday of June of each
year or at such other time and date as may be designated by the Board of
Directors; provided, however,
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that should said day fall upon a legal holiday, the annual meeting of
shareholders shall be held at the same time on the next day thereafter ensuing
which is a full business day. At each annual meeting directors shall be elected
and any other proper business may be transacted.
(c) Special Meetings. Special meetings of the shareholders may be called
----------------
by the Board of Directors, the chairman of the board, the president or by the
holders of shares entitled to cash not less than 10% of the votes at the
meeting.
(d) Notice of Meetings. Notice of any shareholders' meeting shall be
------------------
given not less 10 (or, if sent by third-class mail, 30) nor more than 60 days
before the date of the meeting to each shareholder entitled to vote thereat.
Such notice shall state the place, date and hour of the meeting and (i) in the
case of a special meeting, the general nature of the business to be transacted,
and no other business may be transacted, or (ii) in the case of the annual
meeting, those matters which the board, at the time of the giving of the notice,
intends to present for action by the shareholders. The notice of any meeting
at which directors are to be elected shall include the names of nominees
intended at the time of the notice to be presented by the board for election.
If action is proposed to be taken at any meeting, which action is within
Sections 310, 902, 1201, 1900 or 2007 of the General Corporation Law, the notice
shall also state the general nature of that proposal.
Notice of a shareholders' meeting shall be given either personally or by
first-class mail (or, so long as the corporation has outstanding shares held of
record by 500 or more persons on the record date for the meeting, by third-class
mail) or other means of written communication, addressed to the shareholder at
the address of such shareholder appearing on the books of the corporation or
given by the shareholder to the corporation for the purpose of notice; or if no
such address appears or is given, at the place where the principal executive
office of the corporation is located or by publication at least once in a
newspaper of general circulation in the county in which the principal executive
office is located. The notice shall be deemed to have been given at the time
when delivered personally or deposited in the mail or sent by other means of
written communication. An affidavit of mailing of any notice, executed by the
secretary, assistant secretary or any transfer agent, shall be prima facie
evidence of the giving of the notice.
2
<PAGE>
(e) Notice of Shareholder Business and Nominations.
----------------------------------------------
A. Annual Meetings of Shareholders.
-------------------------------
(1) Nominations of persons for election to the Board of Directors of
the corporation and the proposal of business to be considered by the
shareholders may be made at an annual meeting of shareholders (a) pursuant to
the corporation's notice of meeting, (b) by or at the direction of the Board of
Directors or (c) by any shareholder of the corporation who was a shareholder of
record at the time of giving of notice provided for in this bylaw, who is
entitled to vote at the meeting and who complies with the notice procedures set
forth in this bylaw.
(2) For nominations or other business to be properly brought before
an annual meeting by a shareholder pursuant to clause (c) of paragraph (A)(1) of
this bylaw, the shareholder must have given timely notice thereof in writing to
the Secretary of the corporation and such other business must otherwise be a
proper matter for shareholder action. To be timely, a shareholder's notice shall
be delivered to the Secretary at the principal executive offices of the
corporation not later than the close of business on the 60th day nor earlier
than the close of business on the 90th day prior to the first anniversary of the
preceding year's annual meeting; provided, however, that in the event that the
date of the annual meeting is more than 30 days before or more than 60 days
after such anniversary date, notice by the shareholder to be timely must be so
delivered not earlier than the close of business on the 90th day prior to such
annual meeting and not later than the close of business on the later of the 60th
day prior to such annual meeting or the 10th day following the day on which
public announcement of the date of such meeting is first made by the
corporation. In no event shall the public announcement of an adjournment of an
annual meeting commence a new time period for the giving of a shareholder's
notice as described above. Such shareholder's notice shall set forth (a) as to
each person whom the shareholder proposes to nominate for election or reelection
as a director all information relating to such person that is required to be
disclosed in solicitations of proxies for election of directors in an election
contest, or is otherwise required, in each case pursuant to Regulation 14A under
the Securities Exchange Act of 1934, as amended (the "Exchange Act") and Rule
14a-11 thereunder (including such person's written consent to being named in the
proxy statement as a nominee and to serving as a director if elected); (b) as to
any other business that the shareholder proposes to bring before the meeting, a
brief description of the business desired to be brought before the meeting, the
reasons for conducting such business at the meeting and any material interest in
such business of such shareholder and the beneficial owner, if any, on whose
behalf the proposal is made; and (c) as to the shareholder giving the notice and
the
3
<PAGE>
beneficial owner, if any, on whose behalf the nomination or proposal is made (i)
the name and address of such shareholder, as they appear on the corporation's
books, and of such beneficial owner and (ii) the class and number of shares of
stock of the corporation which are owned beneficially and of record by such
shareholder and such beneficial owner.
(3) Notwithstanding anything in the second sentence of paragraph (A)(2) of
this bylaw to the contrary, in the event that the number of directors to be
elected to the Board of Directors of the corporation is increased and there is
no public announcement by the corporation naming all of the nominees for
director or specifying the size of the increased Board of Directors at least 70
days prior to the first anniversary of the preceding year's annual meeting, a
shareholder's notice required by this bylaw shall also be considered timely, but
only with respect to nominees for any new positions created by such increase, if
it shall be delivered to the Secretary at the principal executive offices of the
corporation not later than the close of business on the 10th day following
the day on which such public announcement is first made by the corporation.
B. Special Meetings of Shareholders. Only such business shall be
--------------------------------
conducted at a special meeting of shareholders as shall have been brought before
the meeting pursuant to the corporation's notice of meeting. Nominations of
persons for election to the Board of Directors may be made at a special meeting
of shareholders at which directors are to be elected pursuant to the
corporation's notice of meeting (a) by or at the direction of the Board of
Directors or (b) provided that the Board of Directors has determined that
directors shall be elected at such meeting, by any shareholder of the
Corporation who is a shareholder of record at the time of giving of notice
provided for in this bylaw, who shall be entitled to vote at the meeting and who
complies with the notice procedures set forth in this bylaw. In the event the
corporation calls a special meeting of shareholders for the purpose of electing
one or more directors to the Board of Directors, any such shareholder may
nominate a person or persons (as the case may be), for election to such
position(s) as specified in the corporation's notice of meeting, if the
shareholder's notice required by paragraph (A)(2) of this bylaw shall be
delivered to the Secretary at the principal executive offices of the corporation
not earlier than the close of business on the 90th day prior to such special
meeting and not later than the close of business on the later of the 60th day
prior to such special meeting or the 10th day following the day on which public
announcement is first made of the date of the special meeting and of the
nominees proposed by the Board of Directors to be elected at such meeting. In
no event shall the public announcement of an adjournment of a special meeting
commence a new time period for the giving of a shareholder's notice as described
above.
4
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C. General.
-------
(1) Only such persons who are nominated in accordance with the
procedures set forth in this bylaw shall be eligible to serve as directors and
only such business shall be conducted at a meeting of shareholders as shall have
been brought before the meeting in accordance with the procedures set forth in
this bylaw. Except as otherwise provided by law, the chairman of the meeting
shall have the power and duty to determine whether a nomination or any business
proposed to be brought before the meeting was made or proposed, as the case may
be, in accordance with the procedures set forth in this bylaw and, if any
proposed nomination or business is not in compliance with this bylaw, to declare
that such defective proposal or nomination shall be disregarded.
(2) For purposes of this bylaw, "public announcement" shall mean
disclosure in a press release reported by the Dow Jones News Service,
Associated Press or comparable national news service or in a document publicly
filed by the corporation with the Securities Exchange Commission pursuant to
Section 13, 14 or 15(d) of the Exchange Act.
(3) Nothwithstanding the foregoing provisions of this bylaw, a
shareholder shall also comply with all applicable requirements of the Exchange
Act and the rules and regulations thereunder with respect to the matters set
forth in this bylaw. Nothing in this bylaw shall be deemed to affect any right
of shareholders to request inclusion of proposals in the corporation's proxy
statement pursuant to Rule 14a-8 under the Exchange Act.
(4) Nothing in this bylaw is intended to provide any additional rights
to shareholders other than rights to which the shareholders are already entitled
by law.
(f) Adjourned Meeting and Notice Thereof. Any meeting of shareholders may
------------------------------------
be adjourned from time to time by the vote of a majority of the shares
represented either in person or by proxy whether or not a quorum is present.
When a shareholder's meeting is adjourned to another time or place, notice need
not be given of the adjourned meeting if the time and place thereof are
announced at the meeting at which the adjournment is taken. At the adjourned
meeting the corporation may transact any business which might have been
transacted at the original meeting. However, if the adjournment is for more than
45 days or if after the adjournment a new record date is fixed for the adjourned
meeting, a notice of the adjourned meeting shall be given to each shareholder of
record entitled to vote at the meeting.
(g) Waiver of Notice. The transactions of any meeting of shareholders,
----------------
however, called and noticed, and wherever held, are
5
<PAGE>
as valid as though had at a meeting duly held after regular call and notice, if
a quorum is present either in person or by proxy, and if, either before or after
the meeting, each of the persons entitled to vote, not present in person or by
proxy, signs a written waiver of notice or a consent to the holding of the
meeting or an approval of the minutes thereof. The waiver of notice or consent
need not specify either the business to be transacted at or the purpose of any
annual or special meeting of shareholders, except that if action is taken or
proposed to be taken for approval of any of those matters specified in the
second paragraph of subparagraph (d) of Section 2.01 of this Article II, the
waiver of notice or consent shall state the general nature of the proposal. All
such waivers, consents and approvals shall be filed with the corporate records
or made a part of the minutes of the meeting.
(h) Quorum. The presence in person or by proxy of persons entitled to
------
vote a majority of the shares entitled to vote at any meeting shall constitute a
quorum for the transaction of business. Except as provided in the following
paragraph, the affirmative vote of a majority of the shares represented and
voting at a duly held meeting at which a quorum is present (which shares voting
affirmatively also constitute at least a majority of the required quorum) shall
be the act of the shareholders, unless the vote of a greater number of voting by
classes is required by the General Corporation Law or the Articles of
Incorporation.
The shareholders present at a duly called or held meeting at which a quorum
is present may continue to transact business until adjournment notwithstanding
the withdrawal of enough shareholders to leave less than a quorum, provided that
any action taken (other than adjournment) must be approved by at least a
majority of the shares required to constitute a quorum.
Section 2.02 Action Without a Meeting. No action required to be taken or
------------------------
which may be taken by shareholders at any annual or special meeting of
shareholders of the corporation may be taken without a meeting, and the power
of shareholders to consent in writing, without a meeting, to the taking of any
action is specifically denied. Notwithstanding any other provision of these
bylaws to the contrary, any amendment, repeal, alteration or change of or to
this Section 2.02 shall require the affirmative vote of the holders of shares
representing at least eighty percent (80%) of the outstanding shares of stock of
the corporation entitled to vote generally in the election of directors
(considered for this purpose as one class).
Section 2.03 Voting of Shares.
----------------
(a) In General. Except as otherwise provided in the Articles of
----------
Incorporation, each outstanding share, regardless of
6
<PAGE>
class, shall be entitled to one vote on each matter submitted to a vote of
shareholders.
(b) Voting. At any election of directors, no shareholder shall be
------
entitled to cumulate votes (i.e., cast for any one or more candidates a number
of votes greater than the number of votes which such shareholder normally is
entitled to cast). In any election of directors, the candidates receiving the
highest number of affirmative votes up to the number of directors to be elected
by such shares are elected; votes against a director and votes withheld shall
have no effect.
(c) Election by Ballot. Elections for directors need not be by ballot
------------------
unless a shareholder demands election by ballot at the meeting and before the
voting begins.
Section 2.04 Proxies. Every person entitled to vote shares of this
-------
corporation may authorize another person or persons to act by proxy with respect
to such shares by delivering to the corporation a written authorization signed
by the shareholder or the shareholder's attorney in fact giving such other
person or persons power to vote with respect to the shares of such shareholder.
A proxy shall be deemed signed if the shareholder's name is placed on the proxy
(whether by manual signature, typewriting, telegraphic transmission or
otherwise) by the shareholder of the shareholder's attorney in fact. A validly
executed proxy which does not state that it is irrevocable shall continue in
full force and effect unless (i) before the vote pursuant to that proxy, it is
revoked by the person executing it: by a writing delivered to the corporation
stating that the proxy is revoked, by a subsequent proxy executed by the person
executing the prior proxy and presented to the meeting or by attendance at the
meeting and voting in person by the person executing the proxy; or (ii) before
the vote pursuant to that proxy is counted, written notice of the death or
incapacity of the maker of that proxy is received by the corporation; provided,
however, that, unless otherwise provided in the proxy, no proxy shall be valid
after the expiration of 11 months from the date of the proxy. The revocability
of a proxy that states on its face that it is irrevocable shall be governed by
the provisions of Section 705(e) and (f) of the General Corporation Law.
Section 2.05 Inspectors of Election.
----------------------
(a) Appointment. In advance of any meeting of shareholders the board may
-----------
appoint inspectors of election to act at the meeting and any adjournment
thereof. If inspectors of election are not so appointed, or if any persons so
appointed fail to appear or refuse to at, the chairman of any meeting of
shareholders may, and on the request of any shareholder or a shareholder's proxy
shall, appoint inspectors of election (or persons to replace those who so fail
or refuse) at the meeting.
7
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The number of inspectors shall be either one or three. If appointed at a meeting
on the request of one or more shareholders or proxies, the majority of shares
represented in person or by proxy shall determine whether one or three
inspectors are to be appointed.
(b) Duties. The inspectors of election shall determine the number of shares
------
outstanding and the voting power of each, the shares represented at the meeting,
the existence of a quorum and the authenticity, validity and effect of proxies,
receive votes, ballots or consents, hear and determine all challenges and
questions in any way arising in connection with the right to vote, count and
tabulate all votes or consents, determine when the polls shall close, determine
the results and do such acts as may be proper to conduct the election or vote
with fairness to all shareholders. The inspectors of election shall perform
their duties impartially, in good faith, to the best of their ability and as
expeditiously as is practical. If there are three inspectors of election, the
decision, act or certificate of a majority is effective in all respects as the
decision, act or certificate of all. Any report or certificate made by the
inspectors of election is prima facie evidence of the facts stated therein.
Section 2.06 Record Date. In order that the corporation may determine the
-----------
shareholders entitled to notice of any meeting or to vote 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 other lawful action, the board
may fix, in advance, a record date, which shall not be more than 60 nor less
than 10 days prior to the date of such meeting nor more than 60 days prior to
any other action. If no record date is fixed:
(a) The record date for determining shareholders entitled to notice of or
to vote at a meeting of shareholders shall be at the close of business on the
business day next preceding the day on which notice is given or, if notice is
waived, at the close of business on the business day next preceding the day on
which the meeting is held.
(b) The record date for determining shareholders entitled to give consent
to corporate action in writing without a meeting, when no prior action by the
board has been taken, shall be the day on which the first written consent is
given.
(c) The record date for determining shareholders for any other purpose
shall be at the close of business on the day on which the board adopts the
resolution relating thereto, or the 60th day prior to the date of such other
action, whichever is later.
8
<PAGE>
A determination of shareholders of record entitled to notice of or to vote
at a meeting of shareholders shall apply to any adjournment of the meeting
unless the board fixes a new record date for the adjourned meeting, but the
board shall fix a new record date if the meeting is adjourned for more than 45
days from the date set for the original meeting.
Shareholders at the close of business on the record date are entitled to
notice and to vote or to receive the dividend, distribution or allotment of
rights or to exercise the rights, as the case may be, notwithstanding any
transfer or any shares on the books of the corporation after the record date,
except as otherwise provided in the Articles of Incorporation or by agreement or
in the General Corporation Law.
Section 2.07 Share Certificates.
------------------
(a) In General. The corporation shall issue a certificate or certificates
----------
representing shares of its capital stock. Each certificate so issued shall be
signed in the name of the corporation by the chairman or vice chairman of the
board or the president or a vice president and by the chief financial officer or
an assistant treasurer or the secretary or any assistant secretary, shall state
the name of the record owner thereof and shall certify the number of shares and
the class or series of shares represented thereby. Any or all of the signatures
on the certificate may be facsimile. In case any officer, transfer agent or
registrar who has signed or whose facsimile signature has been placed upon a
certificate has ceased to be such officer, transfer agent or registrar before
such certificate is issued, it may be issued by the corporation with the same
effect as if such person were an officer, transfer agent or registrar at the
date of issue.
(b) Two or More Classes or Series. If the shares of the corporation are
-----------------------------
classified or if any class of shares has two or more series, there shall appear
on the certificate one of the following:
(1) A statement of the rights, preferences, privileges and restrictions
granted to or imposed upon the respective classes or series of shares authorized
to be issued and upon the holders thereof; or
(2) A summary of such rights, preferences, privileges and restrictions
with reference to the provisions of the Articles or Incorporation and any
certificates of determination establishing the same; or
(3) A statement setting forth the office or agency of the corporation
from which shareholders may obtain, up request
9
<PAGE>
and without charge, a copy of the statement referred to in subparagraph (1).
(c) Special Restrictions. There shall also appear on the certificate
--------------------
(unless stated or summarized under subparagraph (1) or (2) of subparagraph (b)
above) the statements required by all of the following clauses to the extent
applicable:
(1) The fact that the shares are subject to restrictions upon transfer.
(2) If the shares are assessable, a statement that they are assessable.
(3) If the shares are not fully paid, a statement of the total
consideration to be paid therefor and the amount paid thereon.
(4) The fact that the shares are subject to a voting agreement or an
irrevocable proxy or restrictions upon voting rights contractually imposed by
the corporation.
(5) The fact that the shares are redeemable.
(6) The fact that the shares are convertible and the period for
conversion.
Section 2.08 Lost, Stolen or Destroyed Certificates. The corporation may
--------------------------------------
issue a new share certificate or a new certificate for any other security in the
place of any certificate theretofore issued by it, alleged to have been lost,
stolen or destroyed, and the corporation may require the owner of the lost,
stolen or destroyed certificate or the owner's legal representative to give the
corporation a bond (or other adequate security) sufficient to indemnify it
against any claim that may be made against it (including any expense or
liability) on account of the alleged loss, theft or destruction of any such
certificate or the issuance of such new certificate.
Section 2.09 Certificateless Shares. Notwithstanding any other provisions
----------------------
of this Article II, the corporation may adopt a system of issuance, recordation
and transfer of its shares by electronic or other means not involving any
issuance of certificates, in compliance with and as provided under Section
416(b) of the General Corporation Law.
10
<PAGE>
ARTICLE III
DIRECTORS
Section 3.01 Powers. Subject to the provisions of the General Corporation
------
Law and the Articles of Incorporation, the business and affairs of the
corporation shall be managed and all corporate powers shall be exercised by or
under the direction of the Board of Directors. The board may delegate the
management of the day-to-day operations of the business of the corporation to a
management company or other person provided that the business and affairs of the
corporation shall be managed and all corporate powers shall be exercised under
the ultimate direction of the board.
Section 3.02 Committees of the Board. The board may, by resolution adopted
-----------------------
by a majority of the authorized number of directors, designate one or more
committees, each consisting of two or more directors, to serve at the pleasure
of the board. The board may designate one or more directors as alternate members
of any committee, who may replace any absent member at any meeting of the
committee. The appointment of members or alternate members of a committee
requires the vote of a majority of the authorized number of directors. Any such
committee, to the extent provided in the resolution of the board, shall have all
the authority of the board, except with respect to:
(a) The approval of any action which also requires, under the General
Corporation Law, shareholders' approval or approval of the outstanding shares.
(b) The filling of vacancies on the board or in any committee.
(c) The fixing of compensation of the directors for serving on the board or
on any committee.
(d) The amendment or repeal of bylaws or the adoption of new bylaws.
(e) The amendment or repeal of any resolution of the board which by its
express terms is not so amenable or repealable.
(f) A distribution (within the meaning of the General Corporation Law) to
the shareholders of the corporation, except at a rate, in a periodic amount or
within a price range determined by the board.
(g) The appointment of other committees of the board or the members
thereof.
11
<PAGE>
Section 3.03 Election and Term of Office. In the event that the
---------------------------
authorized number of directors shall be fixed at nine (9) or more, the Board of
Directors shall be divided into three classes, designated Class I, Class II and
Class III. Each class shall consist of one-third of the directors or as close an
approximation as possible. The initial term of office of the directors of Class
I shall expire at the annual meeting to be held during fiscal year 1996, the
initial term of office of the directors of Class II shall expire at the annual
meeting to be held during fiscal year 1997 and the initial term of office of the
directors of Class III shall expire at the annual meeting to be held during
fiscal year 1998. At each annual meeting, commencing with the annual meeting to
be held during fiscal year 1996 each of the successors to the directors of the
class whose term shall have expired at such annual meeting shall be elected for
a term running until the third annual meeting next succeeding his or her
election and until his or her successor shall have been duly elected and
qualified.
In the event that the authorized number of directors shall be fixed with at
least seven (7) but less than nine (9), the Board of Directors shall be divided
into two classes, designated Class I and Class II. Each class shall consist of
one-half of the directors or as close an approximation as possible. At each
annual meeting, each of the successors to the directors of the class whose term
shall have expired at such annual meeting shall be elected for a term running
until the second annual meeting next succeeding his or her election and until
his or her successor shall have been duly elected and qualified.
Notwithstanding the rule that the classes shall be as nearly equal in
number of directors as possible, in the event of any change in the authorized
number of directors, each director then continuing to serve as such shall
nevertheless continue as a director of the class of which he or she is a member
until the expiration of his or her current term, or his or her prior death,
resignation or removal.
At each annual election, the directors chosen to succeed those whose terms
then expire shall be of the same class as the directors they succeed, unless, by
reason of any intervening changes in the authorized number of directors, the
Board of Directors shall designate one or more directorships whose terms then
expires as directorships of another class in order more nearly to achieve
equality of number of directors among the classes.
This section only may be amended or repealed by the approval of the Board
of Directors and the outstanding shares (as defined as a single class,
notwithstanding Section 903 of the California General Corporation Law.
12
<PAGE>
Section 3.04 Vacancies. Except for a vacancy created by the removal of a
---------
director, vacancies on the board may be filled by approval of the board or, if
the number of directors then in office is less than a quorum, by (a) the
unanimous written consent of the directors then in office, (b) the affirmative
vote of a majority of the directors then in office at a meeting held pursuant to
notice or waivers of notice complying with the General Corporation Law or (c) a
sole remaining director. The shareholders may elect a director or directors at
any time to fill any vacancy or vacancies not filled by the directors, but any
such election by written consent other than to fill a vacancy created by removal
requires the consent of a majority of the outstanding shares entitled to vote.
The board shall have the power to declare vacant the office of a director
who has been declared of unsound mind by an order of court or convicted of a
felony.
Section 3.05 Removal. Any or all of the directors may be removed without
-------
cause if such removal is approved by the vote of a majority of the outstanding
shares entitled to vote, except that no director may be removed (unless the
entire board is removed) when the votes cast against removal, or not consenting
in writing to such removal, would be sufficient to elect such director if voted
cumulatively at an election at which the same total number of votes were cast
(or, if such action is taken by written consent, all shares entitled to vote
were voted) and either the number of directors elected at the most recent annual
meeting of shareholders, or if greater, the number of directors for whom removal
is being sought, were then being elected.
Section 3.06 Resignation. Any director may resign effective upon giving
-----------
written notice to the chairman of the board, the president, the secretary or the
Board of Directors of the corporation, unless the notice specifies a later time
for the effectiveness of such resignation. If the resignation is effective at a
future time, a successor may be elected to take office when the resignation
becomes effective.
Section 3.07 Meetings of the Board of Directors.
----------------------------------
(a) Regular Meetings. Regular meetings of the board may be held as provided
----------------
in these bylaws or by the board. Such meetings may be held without notice if the
time and place of such meetings are fixed by these bylaws or the board.
(b) Organization Meeting. Immediately following each annual meeting of
--------------------
shareholders, the board shall hold a regular meeting for the purpose of
organization, election of officers and the transaction of other business. Notice
of such meetings is hereby dispensed with.
13
<PAGE>
(c) Special Meetings. Special meetings of the board may be called by the
----------------
chairman of the board or the president or any vice president or the secretary or
any two directors. Special meetings shall be held upon 4 days' notice by mail or
48 hours' notice delivered personally or by telephone or telegraph.
(d) Notice of Meetings. A notice, or waiver of notice, need not specify the
------------------
purpose of any regular or special meeting of the board. Notice of a meeting need
not be given to any director who signs a waiver of notice or a consent to
holding the meeting or an approval of the minutes thereof, whether before or
after the meeting, or who attends the meeting without protesting, prior thereto
or at its commencement, the lack of notice to such director. All such waivers,
consents and approvals shall be filed with the corporate records or made a part
of the minutes of the meeting.
(e) Adjournment. A majority of the directors present, whether or not a
-----------
quorum is present, may adjourn any meeting to another time and place. If the
meeting is adjourned for more than 24 hours, notice of such adjournment to
another time and place shall be given prior to the time of the adjourned meeting
to the directors who were not present at the time of adjournment.
(f) Place of Meeting. Meetings of the board may be held at any place
----------------
within or without the state which has been designated in the notice of the
meeting or, if not stated in the notice or there is no notice, then such meeting
shall be held at the principal executive office of the corporation, or such
other place designated by resolution of the board.
(g) Presence by Conference Telephone Call. Members of the board may
-------------------------------------
participate in a meeting through use of conference telephone or similar
communications equipment, so long as all members participating in such meeting
can hear one another. Such participation constitutes presence in person at such
meeting.
(h) Quorum. A majority of the authorized number of directors constitutes
------
a quorum of the board for the transaction of business. Every act or decision
done or made by a majority of the directors present at a meeting duly held at
which a quorum is present is the act of the board, unless a greater number be
required by law or by the Articles of Incorporation. A meeting at which a quorum
is initially present may continue to transact business notwithstanding the
withdrawal of directors, if any action taken is approved by at least a majority
of the required quorum for such meeting.
Section 3.08 Action Without Meeting. Any action required or permitted to be
----------------------
taken by the board may be taken without a meeting if all members of the board
individually or collectively consent in writing to such action. Such written
consent or
14
<PAGE>
consents shall be filed with the minutes of the proceedings of the board. Such
action by written consent shall have the same force and effect as a unanimous
vote of such directors.
Section 3.09 Committee Meetings. The provisions of Section 3.07 and 3.08 of
------------------
these bylaws apply also to committees of the board and action by such
committees. mutatis mutandis.
ARTICLE IV
OFFICERS
Section 4.01 Officers. The officers of the corporation shall consist of a
--------
chairman of the board or a president, or both, a secretary, a chief financial
officer and such additional officers as may be elected or appointed in
accordance with Section 4.03 of these bylaws and as may be necessary to enable
the corporation to sign instruments and share certificates. Any number of
offices may be held by the same person.
Section 4.02 Elections. All officers of the corporation, except such
---------
officers as may be otherwise appointed in accordance with Section 4.03, shall be
chosen by the board and serve at the pleasure of the board, subject to the
rights, if any, of an officer under any contract of employment.
Section 4.03 Other Officers. The board, at its discretion, may appoint, or
--------------
empower the chairman of the board or president to appoint, one or more vice
presidents, assistant secretaries, assistant treasurers or such other officers
as the business of the corporation may require, each of whom shall hold office
for such period, have such authority and perform such duties as the board or the
chairman of the board or president may from time to time determine.
Section 4.04 Resignation. Any officer may resign at any time by giving
-----------
written notice to the corporation without prejudice to the rights, if any, of
the corporation under any contract to which the officer is a party.
Section 4.05 Chief Executive Officer. The chairman of the board or
-----------------------
president, as designated by the board, shall be the general manager and chief
executive officer of the corporation.
15
<PAGE>
ARTICLE V
MISCELLANEOUS
Section 5.01 Records and Reports.
-------------------
(a) Books of Account and Proceedings. The corporation shall keep adequate
--------------------------------
and correct books and records of account and shall keep minutes of the
proceedings of its shareholders, board and committees of the board and shall
keep at its principal executive office, or at the office of its transfer agent
or registrar, a record of its shareholders, giving the names and addresses of
all shareholders and the number and class of shares held by each. Such minutes
shall be kept in written form. Such other books and records shall be kept either
in written form or in any other form capable of being converted into written
form.
(b) Annual Report. An annual report shall be sent to the shareholders of
-------------
this corporation not later than 120 days after the close of the fiscal year and
at least 15 (or, if sent by third-class mail, 35) days prior to the annual
meeting of shareholders to be held during the next fiscal year. Such report
shall contain a balance sheet as of the end of such fiscal year and an income
statement and statement of changes in financial position for such fiscal year,
accompanied by a report thereon of independent accountants or, if there is no
such report, the certificate of an authorized officer of the corporation that
such statements were prepared without audit from the books and records of the
corporation. Such report shall also include such further statements required by
law applicable to the corporation from time to time.
Section 5.02 Representation of Shares of Other Corporations.
----------------------------------------------
The chairman of the board, if any, president or any vice president of this
corporation, or any person authorized to do so by the chairman of the board,
president or any vice president, is authorized to vote, represent and exercise
on behalf of this corporation all rights incident to any and all shares of any
other corporation standing in the name of this corporation. The authority herein
granted to said officers to vote or represent on behalf of this corporation any
and all shares held by this corporation in any other corporation may be
exercised either in person or by proxy.
Section 5.03 Indemnification and Insurance.
-----------------------------
(a) This corporation shall have the power to indemnify and hold harmless
each "agent" of the corporation, as the term "agent" is defined in Section
317(a) of the General Corporation Law, from and against any expenses, judgments,
fines, settlements
16
<PAGE>
and other accounts actually and reasonably incurred in connection with any
"proceeding" (as defined in Section 317(a)) to the full extent permitted by
applicable law. The corporation shall have the power to advance to its agents
expenses incurred in defending any proceeding prior to the final disposition
thereof to the full extent and in the manner permitted by applicable law.
(b) Any indemnification granted under this section, for any person referred
to in paragraph (a) above, shall create a right of indemnification whether or
not the proceeding to which the indemnification relates arose in whole or in
part prior to adoption of this section, and in the event of death such right
shall extend to such person's legal representatives. Any right of
indemnification given hereby shall not be exclusive of any other rights such
person may have, whether by law or under any agreement, insurance policy, vote
of directors or shareholders or, without limitation, otherwise.
(c) The corporation shall have the power to purchase and maintain insurance
on behalf of any agent of the corporation against any liability asserted against
or incurred by the agent in such capacity or arising out of the agent's status
as such, whether or not the corporation would have the power to indemnify the
agent against such liability.
Section 5.04 Construction and Definitions. Unless the context otherwise
----------------------------
requires, the general provisions, rules of construction and definitions
contained in the California General Corporation Law shall govern the
construction of these bylaws. Without limiting the generality of the foregoing,
the masculine gender includes the feminine and neuter, the singular number
includes the plural and the plural number includes the singular, and the term
"person" includes a corporation as well as a natural person.
ARTICLE VI
AMENDMENTS
Section 6.01 Power of Shareholders. Bylaws may be adopted, amended or
---------------------
repealed by the affirmative vote of the outstanding shares entitled to vote.
Such approval shall include the affirmative vote of a majority of the
outstanding shares of each class or series entitled, by any provision of the
Articles of Incorporation, these bylaws or the General Corporation Law, to vote
as a class or series on the subject matter being voted upon and shall also
include the affirmative vote of such greater proportion of the outstanding
shares of any class or series if such greater proportion is required by the
Articles of Incorporation, these bylaws or the General Corporation Law.
17
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Section 6.02 Power of Directors. Bylaws may be adopted, amended or
------------------
repealed by the approval of the board, except that a bylaw specifying or
changing a fixed number of directors of the maximum or minimum number or
changing from a fixed to a variable board or vice versa may only be adopted in
accordance with Section 6.01.
18
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CERTIFICATE OF SECRETARY
I, the undersigned, do hereby certify:
1. That I am the elected and acting Secretary of Wyle Electronics, a
California corporation; and
2. That the foregoing bylaws, comprising 18 pages, constitute the bylaws of
said corporation as adopted by the Board of Directors of the corporation and
amended through May 9, 1995.
IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed the
seal of said corporation this 9th day of May, 1995.
/s/ Stephen D. Natcher
----------------------
Stephen D. Natcher
[Seal]
<PAGE>
EXHIBIT 11
----------
WYLE ELECTRONICS
CALCULATION OF INCOME (LOSS) PER SHARE
(Unaudited)
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Nine Months
Ended September 30, Ended September 30,
-------------------- --------------------
1995 1994 1995 1994
-------- --------- ------- ----------
<S> <C> <C> <C> <C>
Income (loss) applicable to common shares
Income from continuing operations............... $10,139 $ 3,125 $25,643 $ 8,560
Discontinued operations
Income (loss) from operations, net of taxes.... - (250) - 1,418
Loss on sale, net of taxes..................... - (13,442) - (13,442)
------- -------- ------- --------
Net income (loss)............................ $10,139 $(10,567) $25,643 $ (3,464)
======= ======== ======= ========
PRIMARY
Common and common equivalent shares
Weighted average number of common
shares outstanding........................... 12,347 12,259 12,296 12,253
Stock options included under the
treasury stock method........................ 379 168 317 179
------- -------- ------- --------
12,726 12,427 12,613 12,432
======= ======== ======= ========
Income (loss) per share
Income from continuing operations.............. $ .80 $ .25 $ 2.03 $ .69
======= ======== ======= ========
Discontinued operations
Income (loss) from operations, net of taxes... $ - $ (.02) $ - $ .11
======= ======== ======= ========
Loss on sale, net of taxes.................... $ - $ (1.08) $ - $ (1.08)
======= ======== ======= ========
Net income (loss)........................... $ .80 $ (.85) $ 2.03 $ (.28)
======= ======== ======= ========
FULLY DILUTED (1)
Common and common equivalent shares
Weighted average number of common
shares outstanding........................... 12,347 12,259 12,296 12,253
Stock options included under the
treasury stock method........................ 414 168 438 179
------- -------- ------- --------
12,761 12,427 12,734 12,432
======= ======== ======= ========
Income (loss) per share
Income from continuing operations.............. $ .79 $ .25 $ 2.01 $ .69
======= ======== ======= ========
Discontinued operations
Income (loss) from operations, net of taxes... $ - $ (.02) $ - $ .11
======= ======== ======= ========
Loss on sale, net of taxes.................... $ - $ (1.08) $ - $ (1.08)
======= ======== ======= ========
Net income (loss)........................... $ .79 $ (.85) $ 2.01 $ (.28)
======= ======== ======= ========
</TABLE>
(1) Income (loss) per average common and common equivalent share presented on
the face of the consolidated statements of income represents primary
earnings per share. Dual presentation of primary and fully diluted earnings
per share has not been made on the consolidated statements of income
because the differences are insignificant.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 11,797
<SECURITIES> 0
<RECEIVABLES> 157,193
<ALLOWANCES> 6,528
<INVENTORY> 176,105
<CURRENT-ASSETS> 345,332
<PP&E> 50,518
<DEPRECIATION> 19,258
<TOTAL-ASSETS> 393,699
<CURRENT-LIABILITIES> 109,839
<BONDS> 73,376
<COMMON> 90,036
0
0
<OTHER-SE> 95,487
<TOTAL-LIABILITY-AND-EQUITY> 393,699
<SALES> 778,434
<TOTAL-REVENUES> 778,434
<CGS> 643,774
<TOTAL-COSTS> 643,774
<OTHER-EXPENSES> 88,061
<LOSS-PROVISION> 2,133
<INTEREST-EXPENSE> 1,940
<INCOME-PRETAX> 42,526
<INCOME-TAX> 16,883
<INCOME-CONTINUING> 25,643
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 25,643
<EPS-PRIMARY> 2.03
<EPS-DILUTED> 0
</TABLE>
