<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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 December 31, 1996
------------------------------------------------
or
[ ] TRANSACTION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________________ to ____________________________
Commission File Number: 1-8988
--------------------------------------------------------
ECC International Corp.
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 23-1714658
- -------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
175 Strafford Avenue, Suite 116, Wayne, PA 19087-3377
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(610) 687-2600
- -------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Not Applicable
- -------------------------------------------------------------------------------
(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 twelve 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 at least the past 90 days. [X] Yes [ ] No
As of December 31, 1996, there were 7,908,187 shares of the Registrant's
Common Stock, $.10 par value per share, issued and outstanding.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE> 2
ECC INTERNATIONAL CORP. AND SUBSIDIARIES
<TABLE>
CONSOLIDATED INCOME STATEMENTS
SIX MONTHS ENDED DECEMBER 31, 1996 AND 1995
(In Thousands Except Share and Per Share Data)
(Unaudited)
<CAPTION>
Six Months Six Months
Ended Ended
12/31/96 12/31/95
--------- ---------
<S> <C> <C>
Net Sales $ 48,039 $ 58,671
Cost of Sales 40,823 45,907
--------- ---------
Gross Profit 7,216 12,764
--------- ---------
Expenses:
Selling, General & Administrative 7,459 6,763
Systems Development 415 184
--------- ---------
Total Expenses 7,874 6,947
--------- ---------
Operating (Loss)/Income (658) 5,817
--------- ---------
Other Income (Expense):
Interest Income 108 113
Interest Expense (900) (851)
Other - Net 9 (130)
--------- ---------
Total Other Expense (783) (868)
--------- ---------
(Loss)/Income Before Income Taxes (1,441) 4,949
(Benefit)/Provision for Income Taxes (7) 1,703
--------- ---------
Net (Loss)/Income $ (1,434) $ 3,246
========= =========
(Loss)/Earnings Per Common Share and
Common Share Equivalents $ (0.18) $ 0.41
========= =========
Weighted Average Number of Common and
Common Share Equivalents Outstanding 8,008,962 7,923,003
</TABLE>
See accompanying notes to the consolidated financial statements.
<PAGE> 3
ECC INTERNATIONAL CORP. AND SUBSIDIARIES
<TABLE>
CONSOLIDATED INCOME STATEMENTS
THREE MONTHS ENDED DECEMBER 31, 1996 AND 1995
(In Thousands Except Share and Per Share Data)
(Unaudited)
<CAPTION>
Three Months Three Months
Ended Ended
12/31/96 12/31/95
--------- ---------
<S> <C> <C>
Net Sales $ 23,619 $ 31,691
Cost of Sales 21,123 25,278
--------- ---------
Gross Profit 2,496 6,413
--------- ---------
Expenses:
Selling, General & Administrative 3,751 3,505
Systems Development 253 125
--------- ---------
Total Expenses 4,004 3,630
--------- ---------
Operating (Loss)/Income (1,508) 2,783
--------- ---------
Other Income (Expense):
Interest Income 59 50
Interest Expense (467) (387)
Other - Net 31 (70)
--------- ---------
Total Other Expense (377) (407)
--------- ---------
(Loss)/Income Before Income Taxes (1,885) 2,376
(Benefit)/Provision for Income Taxes (236) 817
--------- ---------
Net (Loss)/Income $ (1,649) $ 1,559
========= =========
(Loss)/Earnings Per Common Share and
Common Share Equivalents $ (0.21) $ 0.20
========= =========
Weighted Average Number of Common and
Common Share Equivalents Outstanding 8,008,977 7,871,061
</TABLE>
See accompanying notes to the consolidated financial statements.
<PAGE> 4
ECC INTERNATIONAL CORP. AND SUBSIDIARIES
<TABLE>
CONSOLIDATED BALANCE SHEETS
(In Thousands)
<CAPTION>
(Unaudited) (Audited)
12/31/96 6/30/96
----------- ---------
<S> <C> <C>
ASSETS
Current Assets:
Cash $ 5,849 $ 5,057
Accounts Receivable, Net 7,048 11,136
Costs and Estimated Earnings in Excess
of Billings on Uncompleted Contracts 39,037 35,251
Inventories
Raw Material 7,058 8,027
Work in Process 4,435 3,069
Finished Goods 2,579 1,888
Prepaid Expenses and Other 2,453 2,190
------- -------
Total Current Assets 68,459 66,618
Property, Plant and Equipment - Net 26,921 26,686
Other Assets 1,852 2,093
------- -------
Total Assets $97,232 $95,397
======= =======
</TABLE>
Continued...
<PAGE> 5
ECC INTERNATIONAL CORP. AND SUBSIDIARIES
<TABLE>
CONSOLIDATED BALANCE SHEETS (Continued)
(In Thousands)
<CAPTION>
(Unaudited) (Audited)
12/31/96 6/30/96
----------- ---------
<S> <C> <C>
LIABILITIES & STOCKHOLDERS' EQUITY
Current Liabilities:
Current Portion of Long-Term Debt $ 3,750 $ 4,272
Accounts Payable 9,026 10,967
Accrued Compensation 3,661 3,878
Advances on Long-Term Contracts 5,064 856
Accrued Profit Sharing 354 --
Other Accrued Expenses 1,187 2,409
------- -------
Total Current Liabilities 23,042 22,382
------- -------
Deferred Income Taxes 1,434 1,434
------- -------
Long-Term Debt 20,674 18,706
------- -------
Commitments and Contingencies
Stockholders' Equity:
Common stock, $.10 par; authorized
20,000,000 shares at 12/31/96 and
6/30/96; reserved for stock options
and other obligations to issue stock,
1,509,176 shares at 12/31/96 and
1,190,499 shares at 6/30/96; issued
and outstanding, 7,908,187 shares
at 12/31/96 and 7,833,143 at 6/30/96 794 782
Preferred stock, $.10 par; authorized
1,000,000 shares at 12/31/96 and at
6/30/96; issued and none outstanding
at 12/31/96 and 6/30/96 -- --
Capital in Excess of Par 23,320 22,831
Cumulative Translation Adjustment 118 (22)
Retained Earnings 27,850 29,284
------- -------
Total Stockholders' Equity 52,082 52,875
------- -------
Total Liabilities & Stockholders' Equity $97,232 $95,397
======= =======
</TABLE>
See accompanying notes to the consolidated financial statements.
<PAGE> 6
ECC INTERNATIONAL CORP. AND SUBSIDIARIES
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED
DECEMBER 31, 1996 AND 1995
(In Thousands)
(Unaudited)
<CAPTION>
Six Months Six Months
Ended Ended
12/31/96 12/31/95
---------- ----------
<S> <C> <C>
Cash Flows From Operating Activities:
Net (Loss)/Income $(1,434) $ 3,246
Items Not Requiring Cash:
Depreciation 2,250 1,819
Provision for Doubtful Accounts 2 65
Changes in Certain Assets and Liabilities:
Accounts Receivable 4,086 (6,821)
Cost and Estimated Earnings in Excess
of Billings on Uncompleted Contracts (3,786) 10,173
Inventories (1,088) (4,458)
Prepaid Expenses and Other (263) 31
Accounts Payable (1,941) 3,778
Advances on Long-Term Contracts 4,208 (239)
Accrued Expenses (1,085) (888)
------- -------
Net Cash Provided By Operating Activities 949 6,706
------- -------
Cash Flows From Investing Activities:
Additions to Property, Plant and Equipment (2,485) (2,384)
Other 381 (131)
------- -------
Net Cash Used In Investing Activities (2,104) (2,515)
------- -------
Cash Flows From Financing Activities:
Proceeds From Issuance of Common Stock, Options
Exercised and Warrants, Including Related Tax
Benefits 501 588
Repayments under Term Loan (1,500) (1,500)
New Borrowings under Revolving Credit Facility,
Net 2,946 (1,649)
------- -------
Net Cash Provided By (Used In) Financing
Activities 1,947 (2,561)
------- -------
Net Increase in Cash 792 1,630
Cash at Beginning of the Period 5,057 3,535
------- -------
Cash at End of the Period 5,849 5,165
======= =======
</TABLE>
Continued...
<PAGE> 7
ECC INTERNATIONAL CORP. AND SUBSIDIARIES
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED
DECEMBER 31, 1996 AND 1995 (Continued)
(In Thousands)
(Unaudited)
<CAPTION>
Six Months Six Months
Ended Ended
12/31/96 12/31/95
---------- ----------
<S> <C> <C>
Supplemental Disclosure of Cash Flow Information:
Cash Paid During the Year For:
Interest $883 $ 870
Income Taxes $922 $2,216
</TABLE>
See accompanying notes to the consolidated financial statements.
<PAGE> 8
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------------
1. The accompanying financial statements are unaudited and have been prepared by
ECC pursuant to the rules and regulations of the Securities and Exchange
Commission. The June 30, 1996 balance sheet was derived from audited
financial statements but does not include all disclosures required by
generally accepted accounting principles. In the opinion of management such
consolidated financial statements contain all adjustments, consisting of only
normal recurring adjustments, necessary to present fairly the consolidated
financial position, results of operations and cash flows for the interim
periods presented. The aforementioned consolidated financial statements have
been prepared substantially in conformity with the accounting principles
reflected in the consolidated financial statements included in the Company's
Annual Report on Form 10-K for the fiscal year ended June 30, 1996.
2. Earnings per share for the six and three-month periods ended December 31,
1996 and 1995 are based on net (loss)/income divided by the weighted average
number of common shares and common share equivalents outstanding.
Common stock equivalents (stock options, warrants and options under the
Company's Employee Stock Purchase Plan) are excluded from the calculation of
per share data when their dilutive effect is not material.
3. The Company did not comply with the minimum fixed charge coverage ratio at
December 31, 1996 or September 30, 1996 or the Debt to Equity Ratio at
December 31, 1996 under its Term Loan and Revolving Credit Agreement.
Accordingly, the Company has received irrevocable waivers with respect to
such covenants from its bank lender. The Company's term loan requires
quarterly principal payments of $750,000 during fiscal year 1997.
<PAGE> 9
ECC INTERNATIONAL CORP. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
a) Material Changes in Financial Condition
---------------------------------------
During the six-month period ended December 31, 1996, the Company's principal
sources of cash were receipts on accounts receivable, borrowings under the
revolving credit facility as well as advances on contracts in the UK division.
The principal uses of these and existing funds were to make payments on the term
loan and accounts payable and to finance the increase in inventories as well as
acquisitions of property, plant and equipment.
Costs and estimated earnings in excess of billings on uncompleted contracts
increased due to progress on several new contracts awarded in the Training
division in late fiscal year 1996 or the first half of fiscal year 1997.
Work in process inventory increased primarily due to unabsorbed overhead.
Overhead is absorbed on an annualized projected rate. Management expects that
volume during the remaining fiscal 1997 quarters will support the currently
budgeted overhead rate.
Finished goods inventory increased primarily due to the continued production of
vending machines in anticipation of future sales orders.
The decrease in accounts payable was primarily the result of a substantial
slow-down in material purchases as two of the Company's largest contracts will
be completed or substantially completed during fiscal year 1997.
Advances on long-term contracts increased as a result of payments received in
advance of work performed on contracts in the U.K. division.
Other accrued expenses decreased primarily as a result of federal income tax
payments made during the first half of fiscal year 1997.
The Company did not comply with the minimum fixed coverage ratio at December 31,
1996 or September 30, 1996 or the debt to equity ratio at December 31, 1996
under its Term Loan and Revolving Credit Agreement. Accordingly, the Company has
received irrevocable waivers with respect to such covenants from its bank
lenders. The term loan requires quarterly principal payments of $750,000 during
fiscal year 1997.
During fiscal year 1997, the Company anticipates spending approximately $3.5
million for new machinery and equipment, computers and to continue to refurbish
the Orlando facility.
Other than as stated above, the Company has no other material commitments for
capital expenditures. Management believes that with proceeds from the revolving
credit facility and its projected cash flow the Company will have sufficient
resources to meet current and future operating commitments.
<PAGE> 10
b) Material Changes in Results of Operations
-----------------------------------------
Net sales decreased for the six and three-month periods ended December 31,
1996 as compared to the same periods ended December 31, 1995. The decrease in
net sales was primarily the result of low volume in the Company's vending
subsidiary during the first and second quarters. The decrease was also the
result of several training division contracts which have reduced activity as
they are expected to be completed during fiscal year 1997 or the first
quarter of fiscal year 1998. Sales volume in the U.K. division increased
substantially over the corresponding periods in the prior fiscal year due to
continued efforts on it's two major contracts.
Gross margin as a percentage of sales decreased for the six and three-month
periods ended December 31, 1996 versus the same periods ended December 31,
1995. The decrease in gross margin was primarily the result of low sales
volume in the vending subsidiary which was not sufficient to cover overhead
costs for the first and second quarters of fiscal year 1997. In addition,
gross margin in the U.K. division decreased as a result of contract
adjustments recorded during the second quarter of fiscal year 1997. These
gross margin adjustments were taken due to a decrease in expected future
sales volume which may result in higher overhead rates than previously
anticipated. On January 15, 1997, the Company announced that it would
recognize an approximate $1.2 million net loss in its U.K. subsidiary for the
second quarter of fiscal year 1997 due to retroactive contract adjustments to
reflect the new higher overhead rate. A decrease in sales volume is
anticipated in the U.K. division over the next six quarters due to a
projected decline in contract awards.
The gross margin of the domestic training division is relatively consistent
with the corresponding period in the prior fiscal year.
Selling, general and administrative costs increased for the six and
three-month periods ended December 31, 1996. The increase primarily reflects
costs associated with resolutions proposed and approved by ECC's stockholders
at the Company's Annual Meeting of Stockholders on December 3, 1996. These
proposals require the engagement of an investment banking firm to assist the
Company in seeking to obtain a purchaser on terms and conditions that the
Board deems are in the best interests of the Company.
Systems development increased for the six and three-month periods ended
December 31, 1996. The increase reflects efforts in the domestic training
division to develop and/or enhance technologies and processes in order to
remain competitive in the industry.
<PAGE> 11
c) Certain Factors That May Affect Future Operating Results.
--------------------------------------------------------
The following important factors, among others, could cause actual results to
differ materially from those indicated by forward-looking statements made in
this Quarterly Report on Form 10-Q and presented elsewhere by management from
time to time. All forward-looking statements included in this document are
based on information available to the Company on the date hereof, and the
Company assumes no obligation to update any such forward-looking statements.
It is important to note that the Company's actual results could differ
materially from those in such forward-looking statements.
A number of uncertainties exist that could affect the Company's future
operating results, including, without limitation, general economic
conditions, changes in government spending, cancellation of weapons programs,
delays in contract awards, delays in the acceptance process of contract
deliverables, the Company's continued ability to develop and introduce
products in both its training division and vending subsidiary, the
introduction of new products by competitors, pricing practices of
competitors, the cost and availability of parts and the Company's ability to
control costs.
To date, a substantial portion of the Company's revenues have been
attributable to long-term contracts with various government agencies. As a
result, any factor adversely affecting procurement of long-term government
contracts could have a material adverse effect on the Company's financial
condition and results of operations. In addition, many of the Company's
competitors have substantially greater financial resources and generate
higher revenues than the Company.
The Company's vending subsidiary completed a large vending order to a major
customer during fiscal year 1996 and, to date, has not replaced it with
another large order. The vending subsidiary is presently in negotiations with
several potential customers and any factor adversely affecting the Company's
ability to obtain sales orders for its vending products may have a material
adverse effect on the Company's financial condition and results of
operations.
Because of these and other factors, past financial performance should not be
considered an indication of future performance. The Company's future
quarterly operating results may vary significantly, depending on factors such
as the timing of contract awards or potentially lengthily sales cycles for
the vending products. Investors should not use historical trends to
anticipate future results and should be aware that the trading price of the
Company's Common Stock may be subject to wide fluctuations in response to
quarterly variations in operating results and other factors, including those
discussed above.
<PAGE> 12
PART II. OTHER INFORMATION
ECC INTERNATIONAL CORP.
Item 1. Legal Proceedings
-----------------
During fiscal year 1996, the Company submitted a claim for contract
adjustment under the Economic Price Adjustment (EPA) provisions of a
major contract seeking approximately $950,000. The value of the claim
is included in costs and estimated earnings in excess of billings on
uncompleted contracts.
The Company has received a letter from the Department of The Air
Force Contracting Officer stating that it intends to issue a
unilateral modification to the contract in the amount of $190,000 for
the EPA. On January 30, 1997, the Company filed a claim with The
United States Court of Federal Claims totalling $1,114,000.
In 1992, the Company began to manufacture and sell outside of Europe,
under license from Deutsche Wurlitzer GmbH ("Wurlitzer"), a glass
front frozen food product vending machine. In 1995, the Company began
the design, manufacture and sale of its own frozen food product
vending machine. Wurlitzer has indicated to the Company that it
believes the Company is prohibited, based on the terms of the license
agreement, from selling the Company-designed frozen food product
vending machine in Europe and that such machine is subject to the
royalty provisions of such license agreement. On February 21, 1996,
the Company commenced an action against Wurlitzer in the Middle
District of Florida (Civ. No. 96-192-CV-ORL-18). The complaint seeks
a declaratory judgement that its frozen food product vending machine
design, currently utilized by ECC Vending Corp., does not infringe
certain rights held by Wurlitzer and is not covered by any license or
non-disclosure agreements between the Company and Wurlitzer. The case
has recently been transferred to the United States District Court for
the Southern District of New York.
On October 9, 1996, Wurlitzer answered the complaint and
counterclaimed that the Company: (1) misappropriated and converted
Wurlitzer's trade secrets; (2) was in breach of the license agreement
with Wurlitzer; (3) was in breach of a nondisclosure agreement with
Wurlitzer; (4) had breached an implied covenant of good faith and
fair dealing; (5) had breached fiduciary duties allegedly owed to
Wurlitzer; and (6) was liable for unjust enrichment and was a
constructive trustee. Discovery has commenced and a trial date is set
for January 1998. The Company believes that it has valid defenses to
any claims that Wurlitzer may have and that its design does not
infringe on any patents or rights of Wurlitzer and is not covered by
any agreements with Wurlitzer. In the event that Wurlitzer is
successful in its counterclaim, the Company does not believe it would
have a material adverse effect on the financial condition or results
of the Company.
<PAGE> 13
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
<TABLE>
At the Company's Annual Meeting of Stockholders held on December 3,
1996, the following proposals were adopted by the vote specified
below:
<CAPTION>
Broker
Proposal For Against Abstain NonVotes
<S> <C> <C> <C> <C>
1) To elect the Board
of Directors
Julian Demora 5,413,365 1,495,918 - 217,418
Ajit W. Hirani 5,414,944 1,494,339 - 217,418
Martin S. Kaplan 5,394,940 1,514,343 - 217,418
Herbert Krasnow 5,412,940 1,496,343 - 217,418
Jesse Krasnow 5,414,815 1,494,468 - 217,418
Thomas E. McGrath 5,414,548 1,494,735 - 217,418
Merrill A. McPeak 5,415,140 1,494,143 - 217,418
George W. Murphy 5,414,640 1,494,643 - 217,418
2) Ratification of
Coopers & Lybrand
as auditors 6,801,608 67,165 40,510 217,418
3) Approval of the proposal to amend the By-Laws of the Company, to
take effect July 1, 1997, providing that a special meeting of
stockholders shall be called by the President or Secretary of the
Company upon written application from the holders of not less
than 30% of the Company's outstanding capital stock entitled to
vote at the special meeting.
2,828,450 2,255,847 51,454 1,990,950
4) Approval of stockholder proposal to request the engagement of an
investment banking firm.
3,588,568 1,920,668 46,003 1,571,426
5) Approval of stockholder proposal to amend the By-laws of the
Company to provide that a special meeting of stockholders shall
be called upon written notice from holders of not less than ten
percent of the Company's outstanding voting stock.
3,185,583 2,318,369 50,487 1,572,262
</TABLE>
<PAGE> 14
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
a. Exhibits
--------
Exhibit 3.2 - Amended and Restated By-laws of ECC International Corp.
Exhibit 11 - Schedule of Computation of Earnings Per Share
Exhibit 27 - Financial Data Schedule
b. Reports on Form 8-K
-------------------
The Company filed no reports on Form 8-K during the quarter for
which this report is filed.
<PAGE> 15
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ECC INTERNATIONAL CORP.
Date February 12, 1997 /s/ George W. Murphy
------------------------ --------------------------------
George W. Murphy, President
Date February 12, 1997 /s/ Relland Winand
------------------------ --------------------------------
Relland Winand
Vice President, Finance
<PAGE> 1
EXHIBIT 3.2
Amended and Restated as of
December 3, 1996
AMENDED AND RESTATED
BY-LAWS
OF
ECC INTERNATIONAL CORP.
ARTICLE I
---------
OFFICES
-------
SECTION 1. The location of the principal office of the Corporation in
the State of Delaware shall be the City of Dover, County of Kent, State of
Delaware.
SECTION 2. The Corporation may also have offices at such other places,
both within and without the State of Delaware, as the Board of Directors may,
from time to time, determine or the business of the Corporation may require.
ARTICLE II
----------
MEETING OF STOCKHOLDERS
-----------------------
SECTION 1. All meetings of the stockholders for the election of
directors shall be held at the principal office of the Corporation in the State
of Delaware or at such other place within or without the State of Delaware as
may from time to time be fixed by the Board of Directors and as may be specified
in the respective Notices of Meeting or duly executed waivers of notice;
provided that the place of meeting for the election of directors shall not be
changed within 60 days next before the day on which the election is to be held
and, at least 20 days before the election is held, a notice of any such change
shall be given to each stockholder entitled to vote at the election.
SECTION 2. An annual meeting of stockholders shall be held on the date
and at the time fixed from time to time, by the directors, provided, that the
first annual meeting shall be held on a date within thirteen months after the
organization of the Corporation, and each successive annual meeting shall be
held on a date within thirteen months after the date of the preceding annual
meeting. At such annual
<PAGE> 2
meeting the stockholders shall elect by a plurality vote by ballot, a Board of
Directors and transact such other business as may properly be brought before the
meeting.
SECTION 3. The written notice of the annual meeting shall be given to
each stockholder entitled to vote thereat, not less than ten (10) nor more than
fifty (50) days prior to the meeting.
SECTION 4. At least ten (10) days before every election of directors, a
complete list of the stockholders entitled to vote at said election, arranged in
alphabetical order with the residence of each and the number of voting shares
held by each, shall be prepared by the Secretary. Such list shall be open at the
place where the election is to be held for said ten (10) days, to the
examination of any stockholder, and shall be produced and kept at the time and
place of election during the whole time thereof, and subject to the inspection
of any stockholder who may be present.
SECTION 5. At all elections of directors, the chairman of the meeting
shall appoint two (2) Inspectors of Election, unless such appointment shall be
unanimously waived by those stockholders present or represented by proxy at the
meeting and entitled to vote. The Inspectors shall first take and subscribe an
oath or affirmation faithfully to execute the duties of Inspectors at such
meeting with strict impartiality and according to the best of their ability, and
shall take charge of the polls and after the balloting shall make a certificate
of the result of the vote taken; but no director or candidate for the office of
director shall be appointed as such Inspector.
SECTION 6. In lieu of closing the stock transfer books, the Board of
Directors may fix in advance a date, not more than sixty (60) nor less than ten
(10) days preceding the date of any meeting of stockholders, or the date for the
payment of any dividend, or the date for the allotment of rights, or the date
when any change or conversion or any exchange of capital stock shall go into
effect, or the date in connection with obtaining the consent of stockholders for
any purpose, as a record date for the determination of the stockholders entitled
to notice of, and to vote at, any such meeting and any adjournment thereof, or
entitled to receive payment of any such dividend, or to any such allotment of
rights, or to exercise the rights in respect of any such change, conversion or
exchange of capital stock, or to give such consent, and in such case such
stockholders and only such stockholders as shall be stockholders of record on
the date so fixed shall be entitled to such notice of, and to vote at, such
meeting and any adjournment thereof, or to receive payment of such dividend, or
to receive such allotment of rights, or to exercise such rights, or to give such
consent, as the case may be, notwithstanding any transfer of any stock on the
books of the corporation after any such record date fixed as aforesaid.
In any case where the Board of Directors shall not have fixed as
aforesaid a record date for the determination of the stockholders entitled to
notice of, and to vote at, any meeting of stockholders, such record date shall
be at the close of business on the day next preceding the day on which notice is
given or, if notice is waived, at the close of business on the day next
preceding the day on which the meeting is held.
-2-
<PAGE> 3
The Board of Directors may close the stock books of the Corporation
against transfers of stock for a period not exceeding sixty (60) days next
preceding the dates in this Section 6 mentioned, and none of the stock of the
Corporation shall be transferred upon its books during such period.
SECTION 7. Special meetings of the stockholders, for any purpose or
purposes, unless otherwise prescribed by statute or by the Certificate of
Incorporation, may be called by the President or Chairman of the Board and shall
be called by the President or Secretary at the request in writing of a majority
of the Board of Directors. In addition, a special meeting of stockholders shall
be called by the President or Secretary upon the written application, dated on
or after July 1, 1997, of one or more stockholders who hold in the aggregate not
less than 30% of the outstanding capital stock entitled to vote at the special
meeting. A special meeting of the stockholders, for any purpose or purposes,
unless otherwise prescribed by statute or by the Certificate of Incorporation,
shall be called by the Corporation upon written notice from stockholders owning
not less than ten (10%) percent of the Corporation's outstanding shares of
voting stock, which notice shall set forth the purpose or purposes of such
special meeting and the Corporation shall hold the special meeting of
stockholders no later than thirty (30) days after the date such notice is
received by the Corporation. Notwithstanding anything to the contrary contained
in Article X, Section 1 of the By-laws of the Corporation, this By-law may not
be amended without the affirmative vote of a majority of shares of voting stock
present in person or represented by proxy at a meeting of the Corporation's
stockholders and entitled to vote on the matter.
SECTION 8. Written notice of a special meeting of stockholders, stating
the time and place and object thereof, shall be served upon or mailed to each
stockholder entitled to vote thereat at such address as appears on the books of
the Corporation not less than ten (10) nor more than fifty (50) days before such
meeting.
SECTION 9. Business transacted at all special meetings shall be
confined to the objects stated in the call.
SECTION 10. The holders of a majority of the stock issued and
outstanding and entitled to vote thereat, present in person or represented by
proxy shall be requisite and shall constitute a quorum at all meetings of the
stockholders for the transaction of business except as otherwise provided by
statute, by the Certificate of Incorporation or by these By-laws. If, however,
such quorum shall not be present or represented at any meeting of the
stockholders, the stockholders entitled to vote thereat, present in person or
represented by proxy, shall have power to adjourn the meeting from time to time,
without notice other than announcement at the meeting until a quorum shall be
present or represented. At such adjourned meeting at which a quorum shall be
present or represented, any business may be transacted which might have been
transacted at the meeting as originally notified.
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<PAGE> 4
SECTION 11. When a quorum is present at any meeting, the vote of the
holders of a majority of the stock having voting power, present in person or
represented by proxy shall decide any question brought before such meeting,
unless the question is one upon which by statute, the Certificate of
Incorporation or express provision of these By-laws, a different vote is
required in which case such provision shall govern and control the decision of
such question.
SECTION 12. At any meeting of the stockholders every stockholder having
the right to vote shall be entitled to vote in person, or by proxy appointed by
an instrument in writing, subscribed by such stockholder and bearing a date not
more than three (3) years prior to said meeting, unless said instrument provides
for a longer period. Each stockholder shall have one vote for each share of
stock having voting power, registered in his name on the books of the
Corporation. Except where the transfer books of the Corporation shall have been
closed or a date shall have been fixed as a record date for the determination of
its stockholders entitled to vote, no share of stock shall be voted on at any
election of directors which shall have been transferred on the books of the
Corporation within twenty (20) days next preceding such election of directors.
SECTION 13. Whenever a vote of stockholders at a meeting thereof is
required or permitted to be taken in connection with any corporate action by any
provisions of statute or of the Certificate of Incorporation or of these
By-laws, the meeting and vote of stockholders may be dispensed with if all the
stockholders who would have been entitled to vote upon the action if such
meeting were held shall consent in writing to such corporate action being taken.
Section 14.
----------
(a) At any annual meeting of stockholders, only such business shall be
conducted, and only such proposals shall be acted on, as is properly brought
before the meeting. In order for business to be properly brought before the
meeting, business must be either (i) specified in the notice of meeting (or any
supplement thereto) given by or at the direction of the Board of Directors, (ii)
otherwise properly brought before the meeting by or at the direction of the
Board, or (iii) otherwise properly brought before the meeting by a stockholder.
In addition to any other applicable requirements, for business to be properly
brought before an annual meeting by a stockholder, the stockholder must have
given timely notice thereof in writing to the Secretary of the Corporation. To
be timely, a stockholder's notice must be delivered to or mailed and received at
the principal executive offices of the corporation, not less than 50 days nor
more than 75 days prior to the meeting; provided, however, that in the event
that less than 65 days' notice or prior public disclosure of the date of the
meeting is given or made to stockholders, notice by the stockholder to be timely
must be so received not later than the close of business on the 15th day
following the day on which such notice of the date of the annual meeting was
mailed or such public disclosure was made, whichever first occurs. A
stockholder's notice to the Secretary shall set forth as to each matter the
stockholder
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<PAGE> 5
proposes to bring before the annual meeting (i) a brief description of the
business desired to be brought before the annual meeting and the reasons for
conducting such business at the annual meeting, (ii) the name and record address
of the stockholder proposing such business, (iii) the class and number of shares
of the Corporation which are beneficially owned by the stockholder, and (iv) any
material interest of the stockholder in such business.
(b) Notwithstanding anything in the By-laws to the contrary, no
business shall be conducted at the annual meeting except in accordance with the
procedures set forth in this Section 14 of Article II, provided, however, that
nothing in this Section 14 of Article II shall be deemed to preclude discussion
by any stockholder of any business properly brought before the annual meeting.
(c) The chairman of the annual meeting shall, if the facts warrant,
determine and declare to the meeting that business was not properly brought
before the meeting in accordance with the provisions of this Section 14 of
Article II, and if he should so determine, he shall so declare to the meeting
and any such business not properly brought before the meeting shall not be
transacted.
(d) At any special meeting of stockholders, only such business shall be
conducted, and only such proposals shall be acted on, as is properly brought
before the special meeting. In order for business to be property brought before
the special meeting, business must be either (i) specified in the notice of
special meeting (or any supplement thereto) given by or at the direction of the
Board of Directors, (ii) otherwise properly brought before the special meeting
by or at the direction of the Board, or (iii) otherwise properly brought before
the special meeting by a stockholder. In addition to any other applicable
requirements, for business to be properly brought before a special meeting by a
stockholder, the stockholder must have given notice thereof in writing to the
Secretary of the Corporation. A stockholder's notice to the Secretary shall set
forth as to each matter the stockholder proposes to bring before the special
meeting (i) a brief description of the business desired to be brought before the
special meeting and the reasons for conducting such business at the special
meeting, (ii) the name and record address of the stockholder proposing such
business, (iii) the class and number of shares of the Corporation which are
beneficially owned by the stockholder, and (iv) any material interest of the
stockholder in such business. Notwithstanding anything in the By-laws to the
contrary, no business shall be conducted at the special meeting except in
accordance with the procedures set forth in this Section 14 of Article II. The
chairman of the special meeting shall, if the facts warrant, determine and
declare to the special meeting that business was not properly brought before the
special meeting in accordance with the provisions of this Section 14 of Article
II and, if he should so determine, he shall so declare to the special meeting
and any such business not properly brought before the special meeting shall not
be transacted.
SECTION 15. Not less than 50 days nor more than 75 days prior to the
date of the Annual Meeting any stockholder who intends to make a nomination at
the
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<PAGE> 6
Annual Meeting shall deliver a notice to the Secretary of the Corporation
setting forth (a) as to each nominee whom the stockholder proposes to nominate
for election or reelection as a director, (i) the name, age, business address
and residence address of the nominee, the principal occupation or employment of
the nominee, (iii) the class and number of shares of capital stock of the
corporation which are beneficially owned by the nominee and (iv) any other
information concerning the nominee that would be required under the rules of the
Securities and Exchange Commission in a proxy statement soliciting proxies of
the election of such nominee; and (b) as to the stockholder giving the notice,
(i) the name and record address of the stockholder and (ii) the class and number
of shares of capital stock of the Corporation which are beneficially owned by
the stockholder; provided, however, that in the event that less than 65 days'
notice or prior public disclosure of the date of the annual meeting is given or
made to stockholders, notice by the stockholder to be timely must be so
delivered not later than the close of business on the 15th day following the day
on which such notice of the date of the meeting was mailed or such public
disclosure was made, whichever first occurs. Such notice shall include a signed
consent to serve as a director of the Corporation, if elected, of each such
nominee. The corporation may require any proposed nominee to furnish such other
information as may reasonably be required by the Corporation to determine the
eligibility for such proposed nominee to serve as a director of the Corporation.
ARTICLE III
-----------
DIRECTORS
---------
SECTION 1. The number of directors which shall constitute the whole
Board shall be not less than four nor more than twenty as the directors may from
time to time determine by resolution. The directors shall be elected at the
annual meeting of stockholders, except as provided in Section 2 of this Article,
and each director elected shall hold office until his successor shall be elected
and shall qualify. Directors need not be stockholders. The directors shall act
only as a Board and the individual directors shall have no power as such, except
when acting pursuant to written consent signed by all members of the Board as
provided in Section 3 hereof.
SECTION 2. Vacancies among the directors whether caused by death,
resignation, retirement, disqualification or removal from office, of any
directors, by an increase in the number of directors, or otherwise, shall be
filled by vote of a majority of the directors then in office, though less than a
quorum, and the directors so chosen shall hold office until the next annual
election of directors and until their successors shall be duly elected and
qualified unless sooner removed or displaced pursuant to law. Voting by
directors for such filling of vacancies need not be by ballot.
SECTION 3. The property and business of the Corporation shall be
managed by its Board of Directors which may exercise all such powers of the
Corporation and do all such lawful acts and things as are not by statute or by
the Certificate of
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<PAGE> 7
Incorporation or by these By-laws directed or required to be exercised or done
by the stockholders.
Whenever the vote of directors, or members of a Committee thereof, at a
meeting thereof is required or permitted to be taken in connection with any
corporate action by any provisions of the statutes or of the Certificate of
Incorporation or of these Bylaws, the meeting and vote of directors or members
of a Committee thereof, may be dispensed with, if all the directors or members
of such Committee, prior to such action, shall consent in writing to such
corporate action being taken and such written consent is filed with the minutes
of the Board or Committee.
Meetings of the Board of Directors
----------------------------------
SECTION 4. The directors of the Corporation may hold their meetings,
both regular and special, either within or without the State of Delaware.
SECTION 5. The first meeting of each newly elected Board may be held
immediately after each annual meeting of the stockholders at the same place at
which the meeting is held, and no notice of such meeting shall be necessary to
the meeting, provided a quorum shall be present. In the event such first meeting
is not held immediately after the annual meeting of the stockholders, it may be
held at such time and place as shall be specified in the notice given as
hereinafter provided for special meetings of the Board of Directors, or at such
time and place as shall be fixed by the consent in writing of all of the
directors.
SECTION 6. Regular meetings of the Board may be held without notice at
such time and place as shall from time to time be determined by the Board.
Regular meetings may be held at any time without notice if all of the directors
are present.
SECTION 7. Special meetings of the Board may be called by the President
or Chairman of the Board on at least six (6) hours' notice to each director,
either personally or by mail, and shall be called by the President or Secretary
in like manner and on like notice given within three (3) days after receipt of
the written request of three (3) directors, and in the absence of the President
and Secretary, any three (3) directors may call a special meeting of the Board
in like manner and on like notice.
SECTION 8. At all meetings of the Board, the presence of not less than
one-half of the total number of directors, but in no event less than two, shall
be necessary and sufficient to constitute a quorum for the transaction of
business. The act of the majority of the directors present at a meeting at which
there is a quorum shall be the act of the Board of Directors, except as may be
otherwise specifically provided by statute or by the Certificate of
Incorporation or by these By-laws. If a quorum shall not be present at any
meeting of directors, the directors present thereat may adjourn the meeting from
time to time without notice other than announcement at the meeting, until a
quorum shall be present.
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<PAGE> 8
Committees of Directors
-----------------------
SECTION 9. The Board of Directors may, by resolution, passed by a
majority of the whole Board, designate an Executive Committee to consist of four
(4) or more directors as the Board from time to time may determine. The
Executive Committee shall have and may exercise when the Board is not in
session, all the powers of the Board of Directors in the management of the
business and the affairs of the Corporation, and shall have power to authorize
the seal of the Corporation to be affixed to all papers which may require it;
but the Executive Committee shall not have the power to fill vacancies in the
said Committee or to make or amend the By-laws of the Corporation. The Board
shall have the power at any time to change the membership of the Executive
Committee, to fill vacancies in it, or to dissolve it. The Board of Directors
shall also have the power to designate one or more alternate members of such
Executive Committee which alternative members shall have power to serve, subject
to such conditions as the Board may prescribe, as a member or members of said
Executive Committee during the absence or inability to act of any one or more
members of said Committee. The Executive Committee may make rules for the
conduct of its business and may appoint such Committees and assistants as it may
from time to time deem necessary. A majority of the members of the Executive
Committee shall constitute a quorum. Unless otherwise ordered by the Board, each
member of the Executive Committee shall continue to be a member thereof until
the expiration of its term of office as a director (or, in case of his
re-election as a director, until the expiration of his new term of office) or
until sooner removed from the Board. Meetings of the Executive Committee shall
be held at the principal office of the Corporation in the State of Delaware, or
at such other place or places within or without the State of Delaware as shall
be specified in the notice or waiver of notice of meeting, or specified by
resolution of the Board or of the Executive Committee.
SECTION 10. The Board of Directors may also, by resolution or
resolutions, passed by a majority of the whole Board, designate one or more
other Committees, each Committee to consist of two (2) or more of the directors
of the Corporation, which, to the extent provided in said resolution or
resolutions, shall have and may exercise the powers of the Board of Directors in
the management of the business and affairs of the Corporation and shall have
power to authorize the seal of the Corporation to be affixed to all papers which
may require it. Such Committee or Committees shall have such name or names as
may be determined from time to time by resolution adopted by the Board of
Directors.
SECTION 11. Whenever requested by the Board of Directors the Committee
shall keep regular minutes of their proceedings and report the same to the Board
when required.
Compensation of Directors
-------------------------
SECTION 12. Directors may, by resolution of the Board, receive a fixed
annual sum for acting as directors, payable quarterly or at such other intervals
as the Board
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<PAGE> 9
shall fix, and/or a fixed sum and expenses of attendance, if any, for attendance
at each regular or special meeting of the Board; provided that nothing herein
contained shall be construed to preclude any director from serving the
Corporation in any other capacity and receiving compensation therefor. Members
of special or standing Committees may be allowed like compensation for attending
Committee meetings.
Indemnification of Directors and Officers
-----------------------------------------
SECTION 13. The Corporation shall, to the fullest extent permitted by
Section 145 of the General Corporation Law of Delaware, as that Section may be
amended and supplemented from time to time, indemnify any director, officer or
trustee which it shall have power to indemnify under that Section against any
expenses, liabilities or other matters referred to in or covered by that
Section. The indemnification provided for in this Section 13 (i) shall not be
deemed exclusive of any other rights to which those indemnified may be entitled
under any by-law, agreement or vote of stockholders or disinterested directors
or otherwise, both as to action in their official capacities and as to action in
another capacity while holding such office, (ii) shall continue as to a person
who has ceased to be a director, officer or trustee and (iii) shall inure to the
benefit of the heirs, executors and administrators of such a person. The
corporation's obligation to provide indemnification under this Section 13 shall
be offset to the extent of any other source of indemnification or any otherwise
applicable insurance coverage under a policy maintained by the corporation or
any other person.
To assure indemnification under this Section 13 of all such persons who
are determined by the Corporation or otherwise to be or to have been
"fiduciaries" of any employee benefit plan of the Corporation which may exist
from time to time, such Section 145 shall, for the purposes of this Section 13,
be interpreted as follows: an "other enterprise" shall be deemed to include such
an employee benefit plan, including, without limitation, any plan of the
Corporation which is governed by the Act of Congress entitled "Employee
Retirement Income Security Act of 1974", as amended from time to time; the
Corporation shall be deemed to have requested a person to serve an employee
benefit plan where the performance by such person of his duties to the
corporation also imposes duties on, or otherwise involves services by, such
person to the plan or participants or beneficiaries of the plan; excise taxes
assessed on a person with respect to an employee benefit plan pursuant to such
Act of Congress shall be deemed "fines"; and action taken or omitted by a person
with respect to an employee benefit plan in the performance of such person's
duties for a purpose reasonably believed by such person to be in the interest of
the participants and beneficiaries of the plan shall be deemed to be for a
purpose which is not opposed to the best interests of the Corporation.
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<PAGE> 10
ARTICLE IV
----------
NOTICES
-------
SECTION 1. Whenever under the provisions of statute or of the
Certificate of Incorporation or of these By-laws notice is required to be given
to any director or stockholder, it shall not be construed to mean personal
notice, but such notice may be given in writing, by mail addressed to such
director or stockholder at such address as appears on the books of the
Corporation, and such notice shall be deemed to be given at the time when the
same shall be thus mailed.
SECTION 2. Whenever any notice is required to be given under the
provisions of statute or of the Certificate of Incorporation or of these
By-laws, a waiver thereof in writing signed by the person or persons entitled to
said notice, whether before or after the time stated therein, shall be deemed
equivalent thereto.
ARTICLE V
---------
OFFICERS
--------
SECTION 1. The officers of the Corporation shall be chosen by the
directors and may include a Chairman of the Board of Directors, a President, an
Executive Vice President, a Vice President, a Secretary, a Treasurer and a
Comptroller. The Chief Executive Officer of the Corporation shall be such
officer as may be designated by the Board of Directors. The Board of Directors
may also choose a Vice Chairman of the Board of Directors, additional Vice
Presidents and one or more Assistant Secretaries, Assistant Treasurers and
Assistant Comptrollers. Any individual may hold two or more offices, except that
the offices of the President and Secretary may not be held by the same person.
The Board may appoint such other officers and agents as it may deem necessary,
who shall hold their offices for such terms and shall exercise such powers and
perform such duties as shall be determined from time to time by the Board.
SECTION 2. The Board of Directors at its first meeting after such
annual meeting of stockholders may choose a Chairman of the Board from its
members, and may choose a President, an Executive Vice President and one or more
Vice Presidents, a Treasurer and a Secretary, none of whom need be a member of
the Board.
SECTION 3. The officers of the Corporation shall hold office until
their successors are chosen and qualify in their stead. Any officer elected or
appointed by the Board of Directors may be removed at any time by the
affirmative vote of a majority of the whole Board of Directors. If the office of
any officer becomes vacant for any reason, the vacancy shall be filled by the
Board of Directors.
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<PAGE> 11
Chairman of the Board of Directors
----------------------------------
SECTION 4. The Chairman of the Board of Directors shall preside at all
meetings of the Board and of the stockholders and shall perform all duties
incident to the Chairman of the Board of Directors. He may sign and execute in
the name of the Corporation, all deeds, mortgages, bonds, contracts or other
instruments authorized by the Board of Directors, except where required or
permitted by law to be otherwise signed and executed and except in cases where
the signing and execution thereof shall be delegated by the Board of Directors
or by these By-laws to some other officer or agent of the Corporation. He shall
have such other powers and perform such duties as may be assigned to him by the
Board of Directors.
President
---------
SECTION 5. The President shall perform all the duties incident to the
office of the President. He may sign and execute in the name of the Corporation,
all deeds, mortgages, bonds, contracts or other instruments authorized by the
Board of Directors, except where required or permitted by law to be otherwise
signed and executed and except in cases where the signing and execution thereof
shall be delegated by the Board of Directors or by these By-laws to some other
officer or agent of the Corporation. He shall have such other powers and perform
such duties as may be assigned to him by the Board of Directors.
Executive Vice President
------------------------
SECTION 6. The Executive Vice President, if one is elected, shall
perform the duties of the President in his absence and such other duties as may
be assigned to him by the Board of Directors, or the President.
Vice President
--------------
SECTION 7. The Vice President shall perform such duties as the
President or the Board of Directors may, from time to time, designate.
Secretary and Assistant Secretaries
-----------------------------------
SECTION 8. The Secretary shall record all the proceedings of the
meetings of the stockholders and directors in a book to be kept for that
purpose, and shall perform like duties for the standing Committees when
requested. He shall give, or cause to be given, notice of all meetings of the
stockholders and special meetings of the Board of Directors, and shall perform
such other duties as may be prescribed by the Board of Directors or President,
under whose supervision he shall be. He shall keep in safe custody the seal of
the Corporation and when authorized by the Board, affix the same to any
instrument requiring it and, when so affixed, it shall be attested by his
signature or by the signature of the Treasurer or an Assistant Secretary.
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SECTION 9. The Assistant Secretary in order of their seniority shall,
in the absence or disability of the Secretary, perform the duties and exercise
the powers of the Secretary and shall perform such other duties as the President
or the Board of Directors shall prescribe.
Treasurer and Assistant Treasurers
----------------------------------
SECTION 10. The Treasurer shall have the custody of the corporate funds
and securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the Corporation and shall deposit all moneys
and other valuable effects in the name and to the credit of the Corporation in
such depositories as may be designated by the Board of Directors.
SECTION 11. He shall disburse the funds of the Corporation as may be
ordered by the Board of Directors, taking proper vouchers for such
disbursements, and shall render to the President and the Board of Directors, at
its regular meetings, or when the Board of Directors so requires, an account of
all his transactions as Treasurer and of the financial condition of the
Corporation.
SECTION 12. He shall perform all duties incident to the office, and any
duties that may be assigned to him by the Board of Directors or the President.
SECTION 13. If required by the Board of Directors, he shall give the
Corporation a bond in such sum and with such surety or sureties as shall be
satisfactory to the Board for the faithful performance of the duties of his
office and for the restoration to the Corporation, in case of his death,
resignation, retirement or removal from office, of all books, papers, vouchers,
money and other property of whatever kind in his possession or under his control
belonging to the Corporation.
SECTION 14. The Assistant Treasurers in the order of their seniority,
unless otherwise determined by the Board of Directors, shall, in the absence or
disability of the Treasurer, perform the duties and exercise the powers of the
Treasurer. They shall perform such other duties and have such other powers as
the President or the Board of Directors may from time to time prescribe.
Comptroller and Assistant Comptroller
-------------------------------------
SECTION 15. The Comptroller shall receive and audit the accounts of all
officers and agents of the Corporation who receive or disburse its funds, and
all other accounts of receipts or disbursements of the Corporation, and shall
keep a proper record of the same.
SECTION 16. He shall keep an account of all contracts, leases or
agreements, by the terms of which moneys are receivable or payable by the
Corporation, as well as of all debts due to or liabilities incurred by the
Corporation, and shall render to the President and the Board of Directors, at
the regular meetings, or when the Board of
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<PAGE> 13
Directors so requires, reports of all payments coming due and all balances past
due to or from the Corporation.
SECTION 17. He shall properly classify the receipts and disbursements
of the Corporation and report the same to the President and the Board of
Directors, at the regular meetings, or when the Board of Directors so requires,
and shall perform such other duties as may be assigned to him by the President
or the Board of Directors.
SECTION 18. The Assistant Comptrollers in the order of their seniority,
unless otherwise determined by the Board of Directors, shall, in the absence or
disability of the Comptroller, perform the duties and exercise the powers of the
Comptroller. They shall perform such other duties and have such other powers as
the President or the Board of Directors may from time to time prescribe.
ARTICLE VI
----------
CERTIFICATES OF STOCK
---------------------
SECTION 1. The interest of each stockholder of the Corporation shall be
evidenced by certificates for shares of stock in such form as the Board of
Directors may from time to time prescribe in accordance with the law. The
certificates of stock shall be numbered and shall be entered in the books of the
Corporation as they are issued. They shall exhibit the holder's name and number
of shares and shall be signed by the President or a Vice President and the
Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary.
SECTION 2. Where a certificate is signed (1) by a transfer agent or an
assistant transfer agent, or (2) by a transfer clerk acting on behalf of the
Corporation and a registrar, the signature of any such President, Vice
President, Treasurer, Assistant Treasurer, Secretary or Assistant Secretary may
be facsimile. In case any officer or officers who have signed, or whose
facsimile signature or signatures have been used on, any such certificate or
certificates shall cease to be such officer or officers of the Corporation,
whether because of death, resignation or otherwise, before such certificate or
certificates shall have been delivered by the Corporation, such certificate or
certificates may nevertheless be adopted by the Corporation and be issued and
delivered as though the person or persons who signed such certificate or
certificates or whose facsimile signature or signatures have been used thereon
have not ceased to be such officer or officers of the Corporation.
SECTION 3. The shares in the stock of the Corporation shall be
transferable on the books of the Corporation by the holder thereof in person or
by his attorney, upon surrender for cancellation of certificates for the same
number of similar shares, with an assignment and power of transfer endorsed
thereon or attached thereto, duly executed, and with such proof of the
authenticity of the signature as the Corporation or its agents may reasonably
require.
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<PAGE> 14
SECTION 4. The Corporation shall be entitled to treat the holder of
record of any share or shares of stock as the holder in fact thereof and,
accordingly, shall not be bound to recognize any equitable or other claim to or
interest in such share or shares on the part of any other person, whether or not
it shall have express or other notice thereof, except as otherwise provided by
the laws of Delaware.
Lost Certificates
-----------------
SECTION 5. The Board of Directors may direct a new certificate or
certificates to be issued in place of any certificate or certificates
theretofore issued by the Corporation alleged to have been lost or destroyed,
upon the making of an affidavit of that fact by the person claiming the
certificate of stock to be lost or destroyed. When authorizing the issuance of a
new certificate or certificates, the Board of Directors may, in its discretion,
and as a condition precedent to the issuance thereof, require the owner of such
lost or destroyed certificate or certificates, or his legal representative, to
advertise the same in such manner as it shall require and/or give the
Corporation a bond in such sum as it may direct as indemnity against any claim
that may be made against the Corporation with respect to the certificate alleged
to have been lost or destroyed.
ARTICLE VII
-----------
CORPORATE BOOKS
---------------
SECTION 1. The Books of the Corporation, except the original or
duplicate stock ledger, may be kept outside of Delaware at such place or places
as the Board of Directors may from time to time determine.
ARTICLE VIII
------------
EXECUTION OF INSTRUMENTS
------------------------
SECTION 1. All checks, notes, drafts, bills of exchange, orders for
payment of money, bonds, debentures, obligations, bills of lading, commercial
documents and other negotiable and/or nonnegotiable instruments, contracts and
formal documents (other than certificates of stock) shall be signed by such
officer or officers or agent or agents as shall be thereunto authorized from
time to time by the Board of Directors. The seal of the Corporation may be
affixed to such instruments and papers requiring the same as shall have been
duly signed and may be attested by the Secretary or one of the Assistant
Secretaries or by the Treasurer or one of the Assistant Treasurers or by any
other officer.
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<PAGE> 15
ARTICLE IX
----------
GENERAL PROVISIONS
------------------
Dividends
---------
SECTION 1. Dividends upon the capital stock of the Corporation subject
to the provisions of the Certificate of Incorporation, if any, may be declared
by the Board of Directors at any regular or special meeting, pursuant to law.
Dividends may be paid in cash, in property or in shares of the capital stock,
subject to the provisions of the Certificate of Incorporation.
SECTION 2. Before payment of any dividend, there may be set aside out
of any funds in the Corporation available for dividends, such sum or sums as the
directors from time to time, in their absolute discretion, think proper as a
reserve fund to meet contingencies, or for equalizing dividends, or for
preparing or maintaining any property of the Corporation, or for such other
purposes as the directors shall think conducive to the interest of the
Corporation, and the directors may modify or abolish any such reserve in the
manner in which it was created.
Corporate Seal
--------------
SECTION 3. The corporate seal shall have inscribed thereon the name of
the Corporation, the year of its organization and the words "Corporate
Seal-Delaware." In lieu of the corporate seal, when so authorized by the Board
of Directors or Executive Committee, a facsimile thereof may be impressed or
affixed or reproduced.
Voting Upon Stocks
------------------
SECTION 4. Unless otherwise ordered by the Board of Directors or
Executive Committee, the President or any of the Vice Presidents authorized
thereto in writing by the President shall have full power and authority on
behalf of the corporation to attend and to act and to vote, or to give, on
behalf of the Corporation, a proxy to attend and to act and to vote at any
meeting of the stockholders of any corporation in which the Corporation may hold
stock, and at any such meeting he or such proxy shall possess and may exercise,
for the purpose of such meeting, any and all the rights and powers incident to
the ownership of said stock, and which as the owner thereof, the Corporation
might have possessed and exercised if present. The Board of Directors and
Executive Committee by resolution from time to time may confer like power upon
any other person or persons.
Fiscal Year
-----------
SECTION 5. The fiscal year of the corporation shall be fixed, and shall
be subject to change by the Board of Directors.
-15-
<PAGE> 16
ARTICLE X
---------
Amendments
----------
SECTION 1. These By-laws may be altered or repealed at any regular
meeting of the stockholders or at any special meeting of the stockholders at
which a quorum is present or represented, provided notice of the proposed
alteration or repeal be contained in the notice of such special meeting, by
affirmative vote of a majority of the stock entitled to vote at such meeting,
and present or represented thereat, or by the affirmative note of a majority of
the whole Board of Directors at any regular meeting of the Board or at any
special meeting of the Board if notice of the proposed alteration or repeal be
contained in the notice of such special meeting; provided, however, that no
change of the time or place of the meeting for election of directors shall be
made within sixty (60) days next before the day on which such meeting is to be
held, and that in case of any change of such time or place, notice thereof shall
be given to each stockholder in person or by letter mailed to his last known
post office address at least twenty (20) days before the meeting is held.
-16-
<PAGE> 1
Exhibit 11
<TABLE>
SCHEDULE OF COMPUTATION OF EARNINGS PER SHARE
(In Thousands, Except Per Share Data)
(Unaudited)
<CAPTION>
Six Months Six Months
Ended Ended
December 31 December 31
1996 1995
<S> <C> <C>
Primary
- -------
Net Income $ (1,434) $ 3,246
========== ==========
Weighted Average Shares Outstanding 7,908,375 7,724,559
Incremental Shares from Assumed
Exercise of Stock Options 100,587 198,444
---------- ----------
Total Shares 8,008,962 7,923,003
========== ==========
Primary Per Share Amounts
- -------------------------
Net Income $ (0.18) $ 0.41
========== ==========
Fully Diluted *
- -------------
Net Income $ (1,434) $ 3,246
========== ==========
Weighted Average Shares Outstanding 7,908,375 7,724,559
Incremental Shares from Assumed
Exercise of Stock Options 104,838 198,444
---------- ----------
Total Shares 8,013,213 7,923,003
========== ==========
Fully Diluted Per Share Amounts
- -------------------------------
Net Income $ (0.18) $ 0.41
========== ==========
<FN>
* Fully diluted earnings per share calculation is presented in accordance
with Regulation S-K item 601(b)(11) although not required by footnote 2 to
paragraph 14 of Accounting Principles Board Opinion No. 15 because it
results in dilution of less than 3%.
</TABLE>
<PAGE> 2
Exhibit 11
<TABLE>
SCHEDULE OF COMPUTATION OF EARNINGS PER SHARE
(In Thousands, Except Per Share Data)
(Unaudited)
<CAPTION>
Three Months Three Months
Ended Ended
December 31 December 31
1996 1995
<S> <C> <C>
Primary
- -------
Net Income $ (1,649) $ 1,559
========== ==========
Weighted Average Shares Outstanding 7,908,563 7,724,891
Incremental Shares from Assumed
Exercise of Stock Options 100,414 146,170
---------- ----------
Total Shares 8,008,977 7,871,061
========== ==========
Primary Per Share Amounts
- -------------------------
Net Income $ (0.21) $ 0.20
========== ==========
Fully Diluted *
- -------------
Net Income $ (1,649) $ 1,559
========== ==========
Weighted Average Shares Outstanding 7,908,563 7,724,891
Incremental Shares from Assumed
Exercise of Stock Options 104,838 183,304
---------- ----------
Total Shares 8,013,401 7,908,195
========== ==========
Fully Diluted Per Share Amounts
- -------------------------------
Net Income $ (0.21) $ 0.20
========== ==========
<FN>
* Fully diluted earnings per share calculation is presented in accordance
with Regulation S-K item 601(b)(11) although not required by footnote 2 to
paragraph 14 of Accounting Principles Board Opinion No. 15 because it
results in dilution of less than 3%.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<RESTATED>
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
<EXCHANGE-RATE> 1
<CASH> 5,849
<SECURITIES> 0
<RECEIVABLES> 7,185
<ALLOWANCES> 137
<INVENTORY> 14,072
<CURRENT-ASSETS> 68,459
<PP&E> 60,215
<DEPRECIATION> 33,294
<TOTAL-ASSETS> 97,232
<CURRENT-LIABILITIES> 23,042
<BONDS> 20,674
0
0
<COMMON> 794
<OTHER-SE> 51,288
<TOTAL-LIABILITY-AND-EQUITY> 97,232
<SALES> 48,039
<TOTAL-REVENUES> 48,039
<CGS> 40,823
<TOTAL-COSTS> 40,823
<OTHER-EXPENSES> 298
<LOSS-PROVISION> 2
<INTEREST-EXPENSE> 900
<INCOME-PRETAX> (1,441)
<INCOME-TAX> (7)
<INCOME-CONTINUING> (1,434)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,434)
<EPS-PRIMARY> (.18)
<EPS-DILUTED> (.18)
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 5,849
<SECURITIES> 0
<RECEIVABLES> 7,185
<ALLOWANCES> 137
<INVENTORY> 14,072
<CURRENT-ASSETS> 68,459
<PP&E> 60,215
<DEPRECIATION> 33,294
<TOTAL-ASSETS> 97,232
<CURRENT-LIABILITIES> 23,042
<BONDS> 20,674
0
0
<COMMON> 794
<OTHER-SE> 51,288
<TOTAL-LIABILITY-AND-EQUITY> 97,232
<SALES> 23,619
<TOTAL-REVENUES> 23,619
<CGS> 21,123
<TOTAL-COSTS> 21,123
<OTHER-EXPENSES> 222
<LOSS-PROVISION> 2
<INTEREST-EXPENSE> 467
<INCOME-PRETAX> (1,885)
<INCOME-TAX> (236)
<INCOME-CONTINUING> (1,649)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,649)
<EPS-PRIMARY> (.21)
<EPS-DILUTED> (.21)
</TABLE>
