<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 0R 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 0-11402
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TELXON CORPORATION
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(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 74-1666060
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(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
3330 West Market Street, Akron, Ohio 44333
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code (216) 867-3700
-------------------
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 June 30, 1995, there were 15,799,312 outstanding shares of the registrant's
Common Stock, $.01 par value per share ("Common Stock").
<PAGE> 2
TELXON CORPORATION AND SUBSIDIARIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
Page No.
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<S> <C> <C> <C>
PART I. FINANCIAL INFORMATION:
Item 1: Consolidated Financial Statements
Balance Sheet....................................................................... 3
Statement of Income................................................................. 4
Statement of Cash Flows............................................................. 5
Notes to Consolidated Financial Statements.......................................... 6-9
Item 2: Management's Discussion and Analysis of Financial
Condition and Results of Operations................................................. 10-12
PART II. OTHER INFORMATION:
Item 6: Exhibits and Reports on Form 8-K........................................................ 13
</TABLE>
2
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1: CONSOLIDATED FINANCIAL STATEMENTS
TELXON CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
June 30, March 31,
1995 1995
----------- -------------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash (including cash equivalents of $4,800
and $21,872)...................................................................... $ 28,442 $ 31,364
Accounts receivable, net of allowance for
doubtful accounts of $2,120 and $1,832............................................ 84,984 84,468
Notes and other accounts receivable.................................................... 5,972 6,256
Refundable income taxes................................................................ 1,839 935
Inventories............................................................................ 75,659 72,078
Prepaid expenses and other............................................................. 9,996 10,192
-------- --------
Total current assets.................................................... 206,892 205,293
Property and equipment, net............................................................ 45,667 45,887
Intangible and other assets, net....................................................... 23,805 24,947
-------- --------
Total................................................................... $276,364 $276,127
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable.......................................................................... $ 25,122 $ 25,395
Current portion of long-term debt...................................................... 1,343 1,343
Accounts payable....................................................................... 34,674 33,466
Capital lease obligations due within one
year.............................................................................. 839 769
Income taxes payable................................................................... 4,927 8,315
Accrued liabilities.................................................................... 32,828 34,388
-------- --------
Total current liabilities............................................... 99,733 103,676
Capital lease obligations.............................................................. 1,624 1,729
Convertible subordinated debentures.................................................... 24,734 24,734
Long-term debt......................................................................... 4,934 5,246
Other long-term liabilities............................................................ 2,166 2,164
-------- --------
Total liabilities....................................................... 133,191 137,549
-------- --------
Stockholders' equity:
Preferred Stock, $1.00 par value per share;
500,000 shares authorized, none issued............................................ -- --
Common Stock, $.01 par value per share;
50,000,000 shares authorized, 15,799,312
and 15,623,249 shares outstanding................................................. 158 156
Additional paid-in capital............................................................. 81,418 78,548
Retained earnings...................................................................... 64,470 62,954
Equity adjustment for foreign currency
translation....................................................................... (1,573) (1,525)
Unearned compensation relating to restricted
stock awards...................................................................... (1,300) (1,555)
-------- --------
Total stockholders' equity.............................................. 143,173 138,578
-------- --------
Commitments and contingencies.......................................................... -- --
-------- --------
Total................................................................... $276,364 $276,127
======== ========
<FN>
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
3
<PAGE> 4
<TABLE>
TELXON CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(In thousands, except shares and per share amounts)
(Unaudited)
<CAPTION>
Three Months Ended June 30,
-------------------------------
1995 1994
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<S> <C> <C>
Revenues:
Product.......................................................... $ 87,944 $ 74,935
Customer service................................................. 15,597 12,498
----------- ----------
Total revenues.............................................. 103,541 87,433
----------- ----------
Cost of revenues:
Product.......................................................... 51,411 44,176
Customer service................................................. 9,003 6,541
----------- ----------
Total cost of revenues...................................... 60,414 50,717
----------- ----------
Gross profit.......................................................... 43,127 36,716
----------- ----------
Operating expenses:
Selling expenses................................................. 19,668 16,181
Product development and engineering
expenses....................................................... 9,585 7,782
General and administrative expenses.............................. 9,136 9,064
----------- ----------
38,389 33,027
----------- ----------
Income from operations...................................... 4,738 3,689
Interest income....................................................... 143 115
Interest expense...................................................... (1,166) (1,075)
----------- ----------
Income before income taxes.................................. 3,715 2,729
Provision for income taxes............................................ 1,486 1,456
----------- ----------
Net income.................................................. $ 2,229 $ 1,273
=========== ==========
Earnings per common and common equivalent
share:
Net income per share........................................ $ .14 $ .08
=========== ==========
Average number of common and common
equivalent shares outstanding...................................... 16,102,000 15,824,000
=========== ==========
<FN>
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
4
<PAGE> 5
<TABLE>
TELXON CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
(In thousands)
<CAPTION>
Three Months Ended June 30,
---------------------------
1995 1994
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<S> <C> <C>
Cash flows from operating activities:
Net income............................................................. $ 2,229 $ 1,273
Adjustments to reconcile net income to
net cash used in operating activities:
Depreciation and amortization................................... 5,288 5,248
Non-cash compensation related to
restricted stock awards...................................... 254 165
Provision for doubtful accounts................................. 506 323
Provision for inventory obsolescence............................ 1,352 2,457
Deferred income taxes........................................... (323) (130)
Loss on disposal of assets...................................... 22 80
Changes in assets and liabilities:
Accounts and notes receivable.............................. (733) 5,029
Refundable income taxes.................................... (904) (2,361)
Inventories................................................ (4,932) (2,078)
Prepaid expenses and other................................. 579 29
Intangible and other assets................................ (326) (763)
Accounts payable and accrued
liabilities............................................ 200 (18,318)
Income taxes payable....................................... (3,388) 350
Other long-term liabilities................................ 3 (107)
------- -------
Total adjustments............................... (2,402) (10,076)
------- -------
Net cash used in operating activities.................................. (173) (8,803)
Cash flows from investing activities:
Additions to property and equipment.................................... (3,257) (5,027)
Payments for acquisitions, net of cash
acquired............................................................ (551) (533)
Short-term investments -- (38)
Software investments................................................... (264) (45)
------- -------
Net cash used in investing activities.................................. (4,072) (5,643)
Cash flows from financing activities:
Notes payable.......................................................... (545) 12,845
Principal payments on capital leases................................... (197) (111)
Principal payments for long-term borrowing............................. (40) (40)
Proceeds from exercise of stock options
(includes tax benefit).............................................. 2,159 995
------- -------
Net cash provided by financing activities.............................. 1,377 13,689
Effect of exchange rate changes on cash................................ (54) 321
------- -------
Net decrease in cash and cash
equivalents......................................................... (2,922) (436)
Cash and cash equivalents at beginning
of period........................................................... 31,364 24,041
Cash and cash equivalents at end of ------- -------
period.............................................................. $28,442 $23,605
======= =======
<FN>
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
5
<PAGE> 6
TELXON CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Management Representation
The consolidated financial statements of Telxon Corporation and its
subsidiaries (the "Company") have been prepared without audit. In the
opinion of the Company, all adjustments, consisting of normal recurring
adjustments necessary for a fair statement of results for the interim
periods, have been made. The statements, which do not include all of the
information and notes required by generally accepted accounting principles
for complete financial statements, should be read in conjunction with the
audited consolidated financial statements as contained in the Company's
Annual Report on Form 10-K for the fiscal year ended March 31, 1995.
2. Earnings Per Share
Computations of earnings per common and common equivalent share of common
stock are based on the weighted average number of common shares outstanding
during the period increased by the net shares issuable on the assumed
exercise of stock options using the treasury stock method. All securities
having a dilutive effect on earnings per share have been excluded from such
computations. Common stock purchase rights outstanding under the Company's
stockholder rights plan, which potentially have a dilutive effect, have
been excluded from the weighted common shares computation as preconditions
to the exercisability of such rights were not satisfied.
3. Inventories
Inventories consisted of the following (in thousands):
<TABLE>
<CAPTION>
June 30, 1995
(Unaudited) March 31, 1995
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<S> <C> <C>
Purchased components............................................. $43,071 $40,958
Work-in-process.................................................. 12,910 16,376
Finished goods................................................... 19,678 14,744
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$75,659 $72,078
======= =======
</TABLE>
4. Accrued Liabilities
Accrued liabilities consisted of the following (in thousands):
<TABLE>
<CAPTION>
June 30, 1995
(Unaudited) March 31, 1995
------------- --------------
<S> <C> <C>
Accrued payroll and other employee
compensation............................................... $ 8,887 $10,130
Accrued commissions............................................. 2,331 2,355
Accrued taxes other than payroll
and income taxes........................................... 3,223 2,570
Deferred customer service revenues.............................. 12,241 11,924
Accrued royalties.......................................... 2,727 2,280
Other accrued liabilities....................................... 3,419 5,129
------- -------
$32,828 $34,388
======= =======
</TABLE>
6
<PAGE> 7
5. Supplemental Cash Flow Information
<TABLE>
<CAPTION>
Three Months Ended June 30,
1995 1994
-------- ---------
(Unaudited)
(In thousands)
<S> <C> <C>
Cash paid during the period for:
Interest $1,587 $1,484
Income taxes 3,348 75
</TABLE>
Capital lease additions are non-cash transactions and, accordingly, $162
and $592 has been excluded from property and equipment additions in the
1996 and 1995 Statement of Cash Flows, respectively.
6. Litigation
In December 1992, four class action suits were filed in the United States
District Court, Northern District of Ohio, by certain alleged stockholders
of the Company on behalf of themselves and purported classes consisting of
Telxon stockholders, other than defendants and their affiliates, who
purchased the Company's common stock between May 20, 1992 and January 19,
1993. The named defendants are the Company, former President and Chief
Executive Officer Raymond D. Meyo, and then current President, Chief
Operating Officer and Chief Financial Officer Dan R. Wipff. On February 1,
1993, the plaintiffs filed their Amended and Consolidated Class Action
Complaint related to the four actions, alleging claims for fraud on the
market and negligent misrepresentation, arising from alleged
misrepresentations and omissions with respect to the Company's financial
performance and prospects, and alleged trading activities of the named
individual defendants. The Amended Complaint seeks certification of the
purported class, unspecified compensatory damages, the imposition of a
constructive trust on certain of the defendants' assets and other
unspecified extraordinary equitable and/or injunctive relief, interest,
attorneys' fees and costs. The defendants, including the Company, filed a
Motion to Dismiss which was denied by the court on June 3, 1993.
On April 16, 1993, the Plaintiffs filed their Motion for Class
Certification. The defendants, including the Company, filed their briefs
in opposition to Class Certification on October 13, 1993. On December 17,
1993, the District Court certified the class, consisting of Telxon
stockholders, other than defendants and their affiliates, who purchased
Telxon common stock between May 20, 1992 and December 14, 1992.
Discovery (other than of experts) in the Consolidated Class Action has been
completed. The defendants filed a Motion for Summary Judgment on May 19,
1995. The plaintiffs filed a brief in opposition to the Motion on June 9,
1995, and the defendants filed their reply brief on June 21, 1995. The
Court has not yet ruled on the Motion, and the Consolidated Class Action is
scheduled for trial commencing November 13, 1995. The defendants intend to
continue vigorously defending this Consolidated Class Action. However, the
ultimate outcome of this litigation cannot presently be determined, and
accordingly, no provision for any liability that may result from
adjudication has been made in the accompanying consolidated financial
statements.
7
<PAGE> 8
On September 21, 1993, a derivative Complaint was filed in the Court of
Chancery of the State of Delaware, in and for Newcastle County, by an
alleged stockholder of Telxon derivatively on behalf of Telxon. The named
defendants are the Company; Robert F. Meyerson, Chairman of the Board and
Chief Executive Officer; Dan R. Wipff, then President, Operating Officer
and Chief Financial Officer and director; Robert A. Goodman, Corporate
Secretary and outside director; Norton W. Rose, outside director and Dr.
Raj Reddy, outside director. The Complaint alleges breach of fiduciary
duty to the Company and waste of the Company's assets in connection with
certain transactions entered into by Telxon and compensation amounts paid
by the Company. The Complaint seeks an accounting, injunction, rescission,
attorneys' fees and costs. While the Company is nominally a defendant in
this derivative action, no monetary relief is sought by the plaintiff from
the Company; accordingly, no provisions for any loss nor any related
insurance recovery therefor have been made in the accompanying consolidated
financial statements. On November 12, 1993, Telxon and the individual
director defendants filed a Motion to Dismiss. The plaintiff filed his
brief in opposition to the Motion on May 2, 1994, and the defendants filed
a final responsive brief. The Motion was argued before the Court on March
29, 1995, and on July 18, 1995, the Court issued its ruling. The Court
dismissed all of the claims relating to the plaintiff's allegations of
corporate waste. The claims relating to breach of fiduciary duty survived
the Motion to Dismiss and will now be the subject of discovery, which has
not yet commenced. The defendants believe that the remaining claims lack
merit, and they intend to vigorously defend this action. While the
ultimate outcome of this action cannot presently be determined, the Company
does not anticipate that this matter will have a material adverse effect on
the Company's consolidated financial position, results of operations or
cash flows.
In the normal course of its operations, the Company is subject to
performance under contracts, and has various legal actions pending.
However, in management's opinion, any such outstanding matters have been
reflected in the consolidated financial statements, are covered by
insurance or would not have a material adverse effect on the Company's
consolidated financial position, results of operations or cash flows.
7. Short-Term and Long-Term Financing
Effective March 31, 1995, the Company amended and restated its revolving
credit, term loan and security agreement with two banks. This agreement
expires on March 31, 1996 and includes a provision for the extension of the
agreement in one-year increments. The agreement provides the Company with
a maximum revolving credit facility of $50 million, subject to availability
on qualifying accounts receivable and inventory, reduced by the $5.5
million term loan exercised by the Company, and bears interest at LIBOR
plus 2.5% or the higher of the banks' prime lending rate plus 1% or Federal
Funds Rate plus 1.5%. The facility is collateralized by substantially all
of the Company's domestic assets. The agreement also contains restrictive
covenants, certain of which require the Company to maintain specified
levels of net worth and working capital and to meet certain current ratios,
debt to net worth ratios, and fixed charge coverages. At June 30 and March
31, 1995, the Company had $25,122 and $25,395 of short-term borrowings
outstanding under the revolving credit facility and was in compliance with
all restrictive covenants contained in the agreement.
8
<PAGE> 9
Principal amounts due under the term loan are funded as revolving credit
advances. The funding of $272 in principal due for the quarter ended June 30,
1995 has been treated as non-cash transactions and, accordingly, have been
excluded from the 1996 Statement of Cash Flows.
8. Subsequent Event
Effective July 13, 1995, the Company acquired the assets and assumed
certain liabilities of Virtual Vision, Inc. for $1.9 million cash plus a
$1.0 million promissory note and other obligations of $.2 million. The
acquisition will be accounted for as a purchase. Virtual Vision is a leading
developer of certain "augmented reality" head-mounted systems technology.
9. Reclassifications
Certain items in the 1995 consolidated financial statements and notes
thereto have been reclassified to conform to the 1996 presentation.
9
<PAGE> 10
TELXON CORPORATION AND SUBSIDIARIES
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Results of Operations
---------------------
Revenues
--------
Total consolidated revenues increased $16.1 million or 18% for the first
quarter of fiscal 1996 as compared to the same period in fiscal 1995.
Product revenues increased $13.0 million or 17% over those same periods.
Product revenues include the sale of Portable Tele-Transaction Computer
("PTC") units, pen-based and touch-screen workslates, hardware
accessories, custom application software and software license fees. The
increase in product revenues was primarily due to an increase in average
selling price per PTC unit offset by a moderate decrease in PTC unit
volume due to sales mix trending towards more comprehensive products and
systems.
Customer service revenues increased $3.1 million or 25% for the first
quarter of fiscal 1996 as compared to the same period in fiscal 1995.
This revenue increase was primarily due to volume increases and growth in
the installed base of the Company's products.
Revenues for the Company's international operations (including Canada)
increased $5.1 million or 21% for the first quarter of fiscal 1996 as
compared to the same period in fiscal 1995. Changes in currency exchange
rates and intercompany hedging activities did not materially affect the
results of the Company's international operations.
The Company anticipates increased consolidated revenues for fiscal 1996
as compared to fiscal 1995.
Costs of Revenues
-----------------
Cost of product revenues as a percentage of product revenues remained
substantially unchanged at 59% for the first quarter of fiscal 1996 as
compared to the same period in fiscal 1995. Gross margins remained
consistent with those recorded during the first quarter of fiscal 1995 as
increased manufacturing costs were offset by increased revenues per PTC
unit.
Cost of customer service revenues as a percentage of customer service
revenues for the first quarter of fiscal 1996 increased to 58% as
compared to 52% for the same period of fiscal 1995. This increase was
primarily due to increased direct material and labor costs to repair the
Company's more sophisticated and complex products.
Inventory valuation accounts for the first quarter of fiscal 1996 were
increased to cover the risk of obsolescence due to new product
introductions and continuing technological change. As of June 30, 1995
inventory valuation accounts increased to $12.4 million or 14% of gross
inventory as compared to $10.9 million or 13% or gross inventory as March
31, 1995. The Company anticipates provisions for obsolescence as revenue
volumes from new product offerings replace revenue from older products.
10
<PAGE> 11
Operating Expenses
------------------
Selling expenses increased $3.5 million or 22% for the first quarter of
fiscal 1996 as compared to the same period in fiscal 1995. This increase
primarily reflects the increased revenues and related variable expenses.
Product development and engineering expenses increased $1.8 million or
23%. This increase is primarily attributable to research and development
activities related to new product development including wireless data
communications and spread spectrum technology, pen-based technology and
other product improvements. During the first quarter of fiscal 1996, the
Company recognized $1.0 million of development expense reimbursement
funding related to a large order from a major customer. The expense
reimbursement was offset against the related development expenses
incurred, resulting in the net research and development expense amount
shown in the statement of income. This large order is expected to be
delivered primarily in the second half of fiscal 1996. General and
administrative expenses for the first quarter of fiscal 1996 remained
substantially unchanged as compared to the same period in fiscal 1995 as
increased corporate resources were offset by the absence of certain
severance charges recorded in the previous fiscal year aggregating
approximately $.5 million.
Income Taxes
------------
The Company's consolidated effective income tax rate for the first
quarter of fiscal 1996 was 40%. The consolidated effective income tax
rate reflects income before taxes plus nondeductible goodwill
amortization, which sum is multiplied by the United States statutory rate
and increased by international rate differentials and partially offset by
research and development credits.
Liquidity
---------
At June 30, 1995, the Company had cash and cash equivalents of $28.4
million, as compared to $31.4 million at March 31, 1995. The Company's
current ratio (current assets divided by current liabilities) was 2.1:1
at June 30, 1995 as compared to 2.0:1 at March 31, 1995. The Company's
current ratio increased as working capital (current assets less current
liabilities) increased for the changes in inventories of $3.6 million,
income taxes payable of $3.4 million, accrued liabilities of $1.6 million
and other current assets and liabilities of $1.4 million. These working
capital increases were offset by a decrease to working capital as a
result of the decrease to cash and cash equivalents of $2.9 million and
an increase in accounts payable and other of $1.5 million. Inventory
levels, in total, increased at June 30, 1995 as compared to those
recorded at March 31, 1995 as purchased components were procured for
anticipated increased production levels in the second quarter of fiscal
1996. Accounts payable increased primarily due to increased
manufacturing inventory levels.
The Company believes that available cash and cash equivalents, internally
generated funds and credit availability, will be sufficient to meet
working capital requirements for the next twelve months.
11
______
<PAGE> 12
Cash Flows from Operating Activities
------------------------------------
Net cash used in operating activities was $.2 million for the first
quarter of fiscal 1996, as compared to $8.8 million for the same period
in fiscal 1995. Cash flows for the first quarter of fiscal 1996, as
compared to the same period in fiscal 1995, were positively impacted by
the change in cash flow impact of accounts payable of $18.5 million, the
increase in net income of $1.0 million, the cash flow impact of
refundable income taxes of $1.5 million and other items aggregating $1.4
million. These positive impacts were offset by negative cash flow
impacts in accounts and notes receivable of $5.8 million, income taxes
payable of $3.7 million, inventories of $2.9 million and other items
aggregating $1.4 million.
Investing Activities
--------------------
The Company invested $3.3 million in capital equipment during the first
quarter of fiscal 1996, a decrease of $1.7 million as compared to the
same period of fiscal 1995. The decrease in capital investments was
primarily due to the absence in the fiscal 1996 period of the
construction costs related to the Company's manufacturing plant in
Houston, Texas included in the fiscal 1995 amount.
Financing Activities
--------------------
Cash flows from financing activities decreased $12.3 million during the
first quarter of fiscal 1996 as compared with the same period in fiscal
1995. This decrease was primarily due to the absence of borrowing on
notes payable of $13.4 million offset by increased proceeds from the
exercise of stock options of $1.2 million.
Effective March 31, 1995, the Company amended and restated its revolving
credit, term loan and security agreement with two banks which expires
March 31, 1996. The agreement calls for a credit limit of $50 million
subject to availability on qualifying accounts receivable and inventory
and bears interest at LIBOR plus 2.5% or the higher of the banks' prime
rate plus 1% or the Federal Funds Rate plus 1.5%. At June 30, 1995, the
Company had $29.6 million outstanding under this agreement. The Company
anticipates continued borrowing under this agreement during fiscal
1996.
12
<PAGE> 13
TELXON CORPORATION AND SUBSIDIARIES
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
-----------------------------------------
(a) Exhibits
3.1 Restated Certificate of Incorporation of Registrant,
incorporated by reference to Exhibit No. 3.1 to
Registrant's Form 10-K filed for the year ended March
31, 1993.
3.2 Amended and Restated By-Laws of Registrant, as amended,
incorporated by reference to Exhibit No. 2(b) to
Registrant's Registration Statement on Form 8-A with
respect to its Common Stock filed pursuant to Section 12(g)
of the Securities Exchange Act, as amended by Amendment No.
1 thereto filed under cover of a Form 8.
4.1 Portions of the Restated Certificate of Incorporation of
Registrant pertaining to the rights of holders of
Registrant's Common Stock, par value $.01 per share
incorporated by reference to Exhibit 3.1 to Registrant's
Form 10-K for the year ended March 31, 1993.
4.2 Text of form of Certificate for the Registrant's Common
Stock, par value $.01 per share, and description of graphic
and image material appearing thereon, filed herewith.
4.3 Rights Agreement between Registrant and AmeriTrust Company
National Association, as Rights Agent, dated as of August
25, 1987, incorporated herein by reference to Exhibit 2(c)
to Amendment No. 1, dated May 21, 1992, to Registrant's
Registration Statement on Form 8-A, filed December 19,
1983, with respect to Registrant's Common Stock.
4.3.1 Form of Rights Certificate (included as Exhibit A
to the Rights Agreement included as Exhibit 4.3 to
this Quarterly Report on Form 10-Q). Until the
Distribution Date (as defined in the Rights
Agreement), the Rights Agreement provides that the
common stock purchase rights created thereunder are
evidenced by the certificates for Registrant's
Common Stock (the text of which and description
thereof is included as Exhibit 4.2 to this
Quarterly Report on Form 10-Q, which stock
certificates are deemed also to be certificates for
such common stock purchase rights) and not by
separate Rights Certificates; as soon as
practicable after the Distribution Date, Rights
Certificates will be mailed to each holder of
Registrant's Common Stock as of the close of
business on the Distribution Date.
13
<PAGE> 14
4.4 Indenture by and between the Registrant and AmeriTrust
Company National Association, as Trustee, dated as of June
1, 1987, regarding Registrant's 7-1/2% Convertible
Subordinated Debentures Due 2012, incorporated herein by
reference to Exhibit 4.2 to Registrant's Registration
Statement on Form S-3, Registration No. 33-14348,
filed May 18, 1987.
4.4.1 Form of the Registrant's 7-1/2% Convertible
Subordinated Debentures Due 2012 (set forth in the
Indenture included as Exhibit 4.4 to this Quarterly
Report on Form 10-Q).
10.1 Compensation and Benefits Plans of the Registrant.
10.1.1 Amended and Restated Retirement and Uniform
Matching Profit-Sharing Plan of Registrant,
effective July 1, 1993, incorporated herein by
reference to Exhibit 10.1.1 to Registrant's Form
10-K filed for the year ended March 31,
1994.
10.1.1.a Amendment, dated January 1, 1994,
incorporated herein by reference to
Exhibit 10.1.1.a to Registrant's
Form 10-K filed for the year
ended March 31, 1994.
10.1.1.b Amendment, dated April 1, 1994,
incorporated herein by reference to
Exhibit 10.1.1.b to Registrant's
Form 10-K filed for the year ended
March 31, 1994.
10.1.1.c Amendment, dated January 1, 1994,
incorporated herein by reference to
Exhibit 10.1.1.c to Registrant's
Form 10-Q filed for the quarter ended
December 31, 1994.
10.1.2 1988 Stock Option Plan of Registrant, incorporated
herein by reference to Exhibit 10.1.2 to
Registrant's Form 10-K filed for the year ended
March 31, 1994.
10.1.2.a Amendment, dated January 31, 1990,
incorporated herein by reference to
Exhibit 10.1.2.a to Registrant's
Form 10-K filed for the year
ended March 31, 1994.
10.1.3 1990 Stock Option Plan of the Registrant, as
amended, incorporated herein by reference to
Exhibit 10.1.3 to Registrant's Form 10-Q filed
for the quarter ended September 30, 1994.
10.1.4 1990 Stock Option Plan of the Registrant for
non-employee directors, as amended, incorporated
herein by reference to Exhibit 10.1.4 to
Registrant's Form 10-K filed for the year ended
March 31, 1994.
14
<PAGE> 15
10.1.5 Non-Qualified Stock Option Agreement between the
Registrant and Raj Reddy, dated as of October 17,
1988, incorporated herein by reference to Exhibit
10.1.6 to Registrant's Form 10-K filed for the
year ended March 31, 1994.
10.1.5.a Description of amendment extending
option term, incorporated herein by
reference to Exhibit 10.1.6.a to
Registrant's Form 10-Q filed for the
quarter ended September 30, 1994.
10.1.6 1992 Restricted Stock Plan of the Registrant,
incorporated herein by reference to Exhibit 10.1.17
to the Registrant's Form 10-Q filed for the
quarter ended December 31, 1993.
10.1.6.a Amendment, dated December 7, 1993,
incorporated herein by reference to
Exhibit 10.1.17.a to the
Registrant's Form 10-Q filed for the
quarter ended December 31, 1993.
10.1.6.b Amendment, dated July 18, 1994,
incorporated herein by reference to
Exhibit 10.1.17.b to Registrant's
Form 10-Q filed for the quarter ended
September 30, 1994.
10.1.7 Description of compensation arrangements between
the Registrant and Robert F. Meyerson, Chairman of
the Board of Registrant, filed herewith.
10.1.8 Employment Agreement between Telxon Products, Inc.,
a wholly owned subsidiary of the Registrant, and
Dan R. Wipff, dated September 29, 1994,
incorporated herein by reference to Exhibit 10.1.8
to Registrant's Form 10-Q filed for the quarter
ended September 30, 1994.
10.1.9 Consulting Agreement between the Registrant and
Accipiter Corporation, dated March 6, 1992,
incorporated herein by reference to Exhibit 10.17
to the Registrant's Form 10-K filed for the year
ended March 31, 1992.
10.1.10 Services and Non-Competition Agreement, dated as
of January 18, 1993, among Accipiter Corporation,
Robert F. Meyerson and the Registrant, incorporated
herein by reference to Exhibit 10.28 to the
Registrant's Form 10-Q filed for the quarter
ended December 31, 1992.
10.1.11 Employment Agreement between the Registrant and
John H. Cribb effective as of April 1, 1993,
incorporated herein by reference to Exhibit 10.1.11
to Registrant's Form 10-K filed for the year
ended March 31, 1994.
15
<PAGE> 16
10.1.12 Severance and Settlement Agreement, dated as of
December 23, 1992, between the Registrant and
Raymond D. Meyo, incorporated herein by reference
to Exhibit 10.26 to the Registrant's Form 10-Q
filed for the quarter ended December 31, 1992.
10.1.13 Consulting Agreement, dated as of December 23,
1992, between the Registrant and Raymond D. Meyo,
incorporated herein by reference to Exhibit 10.26
to the Registrant's Form 10-Q filed for the
quarter ended December 31, 1992.
10.1.14 Employment Agreement between the Registrant and
D. Michael Grimes, dated as of February 25, 1993,
incorporated herein by reference to Exhibit 10.1.14
to the Registrant's Form 10-K filed for the
year ended March 31, 1993.
10.1.15 Employment Agreement between the Registrant and
William J. Murphy, dated as of March 12, 1993,
incorporated herein by reference to Exhibit 10.1.15
to the Registrant's Form 10-K filed for the
year ended March 31, 1993.
10.1.16 Employment Agreement between the Registrant and
Frank Brick, effective as of October 15, 1993,
incorporated herein by reference to Exhibit 10.1.16
on Registrant's Form 10-Q filed for the quarter
ended September 30, 1994.
10.1.17 Employment Agreement between the Registrant and
David B. Swank, effective as of August 22, 1994,
incorporated herein by reference to Exhibit 10.1.18
to Registrant's Form 10-Q filed for the quarter
ended September 30, 1994.
10.2 Material Leases of the Registrant.
10.2.1 Lease between Registrant and 3330 W. Market
Properties, dated as of December 30, 1986,
incorporated herein by reference to Exhibit 10.2.1
to Registrant's Form 10-K filed for the year ended
March 31, 1994.
10.2.2 Lease between Itronix Corporation, a wholly owned
subsidiary of the Registrant, and Hutton
Settlement, Inc., dated as of April 5, 1993,
incorporated herein by reference to Exhibit 10.2.3
to the Registrant's Form 10-K filed for the year
ended March 31, 1993.
10.2.3 Commercial Lease and Condominium Lease Agreement
between Itronix Corporation, a wholly owned
subsidiary of the Registrant, and Metropolitan
Mortgage & Securities Company, Inc., dated May 26,
1994, incorporated herein by reference to Exhibit
10.2.3 to Registrant's Form 10-K for the year ended
March 31, 1995.
16
<PAGE> 17
10.3 Amended and Restated Revolving Credit, Term Loan and
Security Agreement between the Registrant and the Bank of
New York Commercial Corporation, dated as of March 31,
1995, incorporated herein by reference to Exhibit 10.3 to
Registrant's Form 10-K for the year ended March 31, 1995.
10.3.1 Amendment No. 1, dated as of June 16, 1995, to the
Amended and Restated Revolving Credit, Term Loan
and Security Agreement between the Registrant and
the Bank of New York Commercial Corporation,
incorporated herein by reference to Exhibit 10.3.1
to Registrant's Form 10-K for the year ended
March 31, 1995.
10.4 Amended and Restated.Agreement between the Registrant and
Symbol Technologies, Inc., dated as of September 30, 1992,
incorporated herein by reference to Exhibit 10.4 to
Registrant's Form 10-K for the year ended March 31, 1993.
10.5 Plan and Agreement of Merger, dated as of January 18,
1993, among the Registrant, WSACO, Inc. and
Tele-transaction, Inc., incorporated herein by reference to
Exhibit 10.29 to the Registrant's Form 10-Q filed for the
quarter ended December 31, 1992.
10.5.1 Notice of Termination by WSACO, Inc., as
contemplated by Section 5.7 of the Plan and
Agreement of Merger, of Amended and Restated
Consulting Agreement between Accipiter Corporation
and Teletransaction, Inc., incorporated herein by
reference to Exhibit 10.7.1 to Registrant's Form
10-K for the year ended March 31, 1993.
10.6 Asset Purchase Agreement between the Registrant and Retail
Management Systems Corporation, dated as of April 3, 1992,
incorporated herein by reference to Exhibit 10.23 to the
Registrant's Form 10-K filed for the year ended March 31,
1992.
10.7 Agreement for Sale and Licensing of Assets between AST
Research, Inc. and PenRight! Corporation, a wholly owned
subsidiary of the Registrant, dated as of January 26, 1994,
incorporated herein by reference to Exhibit 10.11 to the
Registrant's Form 10-Q for the quarter ended December 31,
1993.
10.8 Agreement of Purchase and Sale of Assets by and among
Vision Newco, Inc., a wholly owned subsidiary of the
Registrant, Virtual Vision, Inc., as debtor and debtor in
possession, and the Official Unsecured Creditors'
Committee, on behalf of the bankruptcy estate of Virtual
Vision, dated as of July 13, 1995, filed herewith.
11.01 Computation of Common Shares outstanding and earnings per
share for the three months ended June 30, 1995 and 1994,
filed herewith.
17
<PAGE> 18
27.01 Financial Data Schedule as of June 30, 1995, filed
herewith.
(b) Reports on Form 8-K
No Current Report on Form 8-K was filed by the Registrant during the
fiscal quarter ended June 30, 1995 for which this Quarterly Report on
Form 10-Q is filed.
18
<PAGE> 19
TELXON CORPORATION AND SUBSIDIARIES
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.
Date: August 14, 1995
TELXON CORPORATION
------------------
(Registrant)
/s/ Kenneth W. Haver
-------------------------------------
Kenneth W. Haver
Senior Vice President,
Chief Financial Officer
(Principal Financial Officer)
and Treasurer
19
<PAGE> 20
TELXON CORPORATION
EXHIBITS TO
FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 1995
20
<PAGE> 21
INDEX TO EXHIBITS
Page
----
* 3.1 Restated Certificate of Incorporation of Registrant,
incorporated by reference to Exhibit No. 3.1 to Registrant's Form
10-K filed for the year ended March 31, 1993.
* 3.2 Amended and Restated By-Laws of Registrant, as amended,
incorporated by reference to Exhibit No. 2(b) to Registrant's
Registration Statement on Form 8-A with respect to its Common
Stock filed pursuant to Section 12(g) of the Securities Exchange
Act, as amended by Amendment No. 1 thereto filed under
cover of a Form 8.
* 4.1 Portions of the Restated Certificate of Incorporation of
Registrant pertaining to the rights of holders of Registrant's
Common Stock, par value $.01 per share incorporated by reference
to Exhibit 3.1 to Registrant's Form 10-K for the year ended
March 31, 1993.
** 4.2 Text of form of Certificate for the Registrant's Common Stock,
par value $.01 per share, and description of graphic and image
material appearing thereon, filed herewith.
* 4.3 Rights Agreement between Registrant and AmeriTrust Company
National Association, as Rights Agent, dated as of August 25,
1987, incorporated herein by reference to Exhibit 2(c) to
Amendment No. 1, dated May 21, 1992, to Registrant's Registration
Statement on Form 8-A, filed December 19, 1983, with respect to
Registrant's Common Stock.
* 4.3.1 Form of Rights Certificate (included as Exhibit A to
the Rights Agreement included as Exhibit 4.3 to this
Quarterly Report on Form 10-Q). Until the Distribution
Date (as defined in the Rights Agreement), the Rights
Agreement provides that the common stock purchase rights
created thereunder are evidenced by the certificates for
Registrant's Common Stock (the text of which and
description thereof is included as Exhibit 4.2 to this
Quarterly Report on Form 10-Q, which stock certificates
are deemed also to be certificates for such common stock
purchase rights) and not by separate Rights
Certificates; as soon as practicable after the
Distribution Date, Rights Certificates will be mailed to
each holder of Registrant's Common Stock as of the close
of business on the Distribution Date.
* 4.4 Indenture by and between the Registrant and AmeriTrust Company
National Association, as Trustee, dated as of June 1, 1987,
regarding Registrant's 7-1/2% Convertible Subordinated Debentures
Due 2012, incorporated herein by reference to Exhibit 4.2 to
Registrant's Registration Statement on Form S-3, Registration
No. 33-14348, filed May 18, 1987.
21
<PAGE> 22
Page
----
* 4.4.1 Form of the Registrant's 7 1/2%.Convertible Subordinated
Debentures Due 2012 (set forth in the Indenture included
as Exhibit 4.4 to this Quarterly Report on Form 10-Q).
10.1 Compensation and Benefits Plans of the Registrant.
* 10.1.1 Amended and Restated Retirement and Uniform Matching
Profit-Sharing Plan of Registrant, effective July 1,
1993, incorporated herein by reference to Exhibit 10.1.1
to Registrant's Form 10-K filed for the year ended March
31, 1994.
* 10.1.1.a Amendment, dated January 1, 1994, incorporated
herein by reference to Exhibit 10.1.1.a to
Registrant's Form 10-K filed for the year
ended March 31, 1994.
* 10.1.1.b Amendment, dated April 1, 1994, incorporated
herein by reference to Exhibit 10.1.1.b to
Registrant's Form 10-K filed for the year
ended March 31, 1994.
* 10.1.1.c Amendment, dated January 1, 1994, incorporated
herein by reference to Exhibit 10.1.1.c to
Registrant's Form 10-Q field for the quarter
ended December 31, 1994.
* 10.1.2 1988 Stock Option Plan of Registrant, incorporated
herein by reference to Exhibit 10.1.2 to Registrant's
Form 10-K filed for the year ended March 31, 1994.
* 10.1.2.a Amendment, dated January 31, 1990,
incorporated.herein by reference to Exhibit
10.1.2.a to Registrant's Form 10-K filed for
the year ended March 31, 1994.
* 10.1.3 1990 Stock Option Plan of the Registrant, as amended,
incorporated herein by reference to Exhibit 10.1.3 to
Registrant's Form 10-Q filed for the quarter ended
September 30, 1994.
* 10.1.4 1990 Stock Option Plan of the Registrant for
non-employee directors, as amended, incorporated herein
by reference to Exhibit 10.1.4 to Registrant's Form 10-K
filed for the year ended March 31, 1994.
22
<PAGE> 23
Page
----
* 10.1.5 Non-Qualified Stock Option Agreement between the
Registrant and Raj Reddy, dated as of October 17, 1988,
incorporated herein by reference to Exhibit 10.1.6 to
Registrant's Form 10-K filed for the year ended March
31, 1994.
* 10.1.5.a Description of amendment extending option
term, incorporated herein by reference to
Exhibit 10.1.6.a to Registrant's Form 10-Q
filed for the quarter ended September 30,
1994.
* 10.1.6 1992 Restricted Stock Plan of the Registrant,
incorporated herein by reference to Exhibit 10.1.17 to
the Registrant's Form 10-Q filed for the quarter ended
December 31, 1993.
* 10.1.6.a Amendment, dated December 7, 1993, incorporated
herein by reference to Exhbit 10.1.17.a to the
Registrant's Form 10-Q filed for the quarter
ended December 31, 1993.
* 10.1.6.b Amendment, dated July 18, 1994, incorporated
herein by reference to Exhibit 10.1.17.b to
Registrant's Form 10-Q filed for the quarter
ended September 30, 1994.
** 10.1.7 Description of compensation arrangements between the
Registrant and Robert F. Meyerson, Chairman of the Board
of Registrant, filed herewith.
* 10.1.8 Employment Agreement between Telxon Products, Inc., a
wholly owned subsidiary of the Registrant, and Dan R.
Wipff, dated September 29, 1994, incorporated herein by
reference to Exhibit 10.1.8 to Registrant's Form 10-Q
filed for the quarter ended September 30, 1994.
* 10.1.9 Consulting Agreement between the Registrant and
Accipiter Corporation, dated March 6, 1992, incorporated
herein by reference to Exhibit 10.17 to the Registrant's
Form 10-K filed for the year ended March 31, 1992.
* 10.1.10 Services and Non Competition Agreement, dated as of
January 18, 1993, among Accipiter Corporation, Robert F.
Meyerson and the Registrant, incorporated herein by
reference to Exhibit 10.28 to the Registrant's Form 10-Q
filed for the quarter ended December 31, 1992.
23
<PAGE> 24
Page
----
* 10.1.11 Employment Agreement between the Registrant and John H.
Cribb effective as of April 1, 1993, incorporated herein
by reference to Exhibit 10.1.11 to Registrant's Form
10-K filed for the year ended March 31, 1994.
* 10.1.12 Severance and Settlement Agreement, dated as of
December 23, 1992, between the Registrant and Raymond D.
Meyo, incorporated herein by reference to Exhibit 10.26
to the Registrant's Form 10-Q filed for the quarter
ended December 31, 1992.
* 10.1.13 Consulting Agreement, dated as of December 23, 1992,
between the Registrant and Raymond D. Meyo, incorporated
herein by reference to Exhibit 10.26 to the Registrant's
Form 10-Q filed for the quarter ended December 31,
1992.
* 10.1.14 Employment Agreement between the Registrant and D.
Michael Grimes, dated as of February 25, 1993,
incorporated herein by reference to Exhibit 10.1.14 to
the Registrant's Form 10-K filed for the year ended
March 31, 1993.
* 10.1.15 Employment Agreement between the Registrant and William
J. Murphy, dated as of March 12, 1993, incorporated
herein by reference to Exhibit 10.1.15 to the
Registrant's Form 10-K filed for the year ended March
31, 1993.
* 10.1.16 Employment Agreement between the Registrant and Frank
Brick, effective as of October 15, 1993, incorporated
herein by reference to Exhibit 10.1.16 on Registrant's
Form 10-Q filed for the quarter ended September 30,
1994.
* 10.1.17 Employment Agreement between the Registrant and David B.
Swank, effective as of August 22, 1994, incorporated
herein by reference to Exhibit 10.1.18 to Registrant's
Form 10-Q filed for the quarter ended September 30,
1994.
10.2 Material Leases of the Registrant.
* 10.2.1 Lease between Registrant and 3330 W. Market Properties,
dated as of December 30, 1986, incorporated herein by
reference to Exhibit 10.2.1 to Registrant's Form 10-K
filed for the year ended March 31, 1994.
* 10.2.2 Lease between Itronix Corporation, a wholly owned
subsidiary of the Registrant, and Hutton Settlement,
Inc., dated as of April 5, 1993, incorporated herein by
reference to Exhibit 10.2.3 to the Registrant's Form
10-K filed for the year ended March 31, 1993.
24
<PAGE> 25
Page
----
* 10.2.3 Commercial Lease and Condominium Lease Agreement
between Itronix Corporation, a wholly owned subsidiary
of the Registrant, and Metropolitan Mortgage &
Securities Company, Inc., dated May 26, 1994,
incorporated herein by reference to Exhibit 10.2.3 to
Registrant's Form 10-K for the year ended March 31,
1995.
* 10.3 Amended and Restated Revolving Credit, Term Loan and Security
Agreement between the Registrant and the Bank of New York
Commercial Corporation, dated as of March 31, 1995, incorporated
herein by reference to Exhibit 10.3 to Registrant's Form 10-K for
the year ended March 31, 1995.
* 10.3.1 Amendment No. 1, dated as of June 16, 1995, to the
Amended and Restated Revolving Credit, Term Loan and
Security Agreement between the Registrant and the Bank
of New York Commercial Corporation, incorporated herein
by reference to Exhibit 10.3.1 to Registrant's Form 10-K
for the year ended March 31, 1995.
* 10.4 Amended and Restated Agreement between the Registrant and Symbol
Technologies, Inc., dated as of September 30, 1992, incorporated
herein by reference to Exhibit 10.4 to Registrant's Form 10-K for
the year ended March 31, 1993.
* 10.5 Plan and Agreement of Merger, dated as of January 18, 1993,
among the Registrant, WSACO, Inc. and Tele-transaction, Inc.,
incorporated herein by reference to Exhibit 10.29 to the
Registrant's Form 10-Q filed for the quarter ended December
31, 1992.
* 10.5.1 Notice of Termination by WSACO, Inc., as contemplated
by Section 5.7 of the Plan and Agreement of Merger, of
Amended and Restated Consulting Agreement between
Accipiter Corporation and Teletransaction, Inc.,
incorporated herein by reference to Exhibit 10.7.1 to
Registrant's Form 10-K for the year ended March 31,
1993.
* 10.6 Asset Purchase Agreement between the Registrant and Retail
Management Systems Corporation, dated as of April 3, 1992,
incorporated herein by reference to Exhibit 10.23 to the
Registrant's Form 10-K filed for the year ended March 31, 1992.
* 10.7 Agreement for Sale and Licensing of Assets between AST Research,
Inc. and PenRight! Corporation, a wholly owned subsidiary of the
Registrant, dated as of January 26, 1994, incorporated herein by
reference to Exhibit 10.11 to the Registrant's Form 10-Q for the
quarter ended December 31, 1993.
25
<PAGE> 26
Page
----
** 10.8 Agreement of Purchase and Sale of Assets by and among Vision
Newco, Inc., a wholly owned subsidiary of the Registrant, Virtual
Vision, Inc., as debtor and debtor in possession, and the
Official Unsecured Creditors' Committee, on behalf of the
bankruptcy estate of Virtual Vision dated as of July 13,
1995, filed herewith.
** 11.01 Computation of Common Shares outstanding and earnings per share
for the three months ended June 30, 1995 and 1994, filed herewith.
** 27.01 Financial Data Schedule as of June 30, 1995, filed herewith.
___________________________________________________
* Previously filed
** Filed herewith
26
<PAGE> 1
EXHIBIT 4.2
-----------
FORM OF CERTIFICATE
FOR
THE SHARES OF COMMON STOCK,
PAR VALUE $.01 PER SHARE,
OF
TELXON CORPORATION
Face of Certificate
-------------------
Blue-green scrollwork forms a frame around the outside of the face. Within the
top edge of this frame, the certificate number is printed in the upper left
corner, and in the upper left corner there is a space in which to inscribe (in
Arabic numerals) the number of shares evidenced thereby. Inside the frame, the
Registrant's name logo (a registered trademark) is centered at the top, with
the following text centered below it:
TELXON CORPORATION
INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE
Below the above text, a shaded box appears in the center of the certificate, in
the upper right corner of which is a printed box setting forth "CUSIP 879700 10
2". Still within the shaded box, there next appears at the left margin the
pre-printed phrase "This Certifies that", followed by space within which to
inscribe the name of the registered owner, which is in turn followed by the
pre-printed phrase "is the owner of" and additional space after that phrase at
the bottom of the shaded box within which to inscribe in words the number of
shares evidenced thereby. Below the shaded box appears the following text:
fully paid and nonassessable shares of the Common Stock, par value
$.01 of Telxon Corporation, transferable on the books of the
corporation by the holder hereof in person or by his duly authorized
attorney, upon surrender of this certificate properly endorsed.
This Certificate is not valid until countersigned by the
Transfer Agent.
WITNESS the facsimile seal and facsimile signatures of its
duly authorized officers.
Dated: [following which the date of the certificate is entered upon
issuance]
Centered in the bottom edge of the frame is the facsimile seal of the
Registrant, consisting of (i) an inner circle with the word "CORPORATE" along
the upper inside edge of that circle and the word "SEAL" centered in the circle
and (ii) a ring around that inner circle containing the words "TELXON
CORPORATION" on its upper side and the word "DELAWARE" on its lower side.
Inside the frame to the left of the seal is the facsimile signature
<PAGE> 2
of Dan R. Wipff appearing over the titles "SENIOR EXECUTIVE VICE PRESIDENT &
CHIEF OPERATING OFFICER" and to the right, the facsimile signature of Robert A.
Goodman, over the title "SECRETARY".
Vertically along the right inside edge of the frame appears the
countersignature block for the authentication of the certificate upon issuance
by the Registrant's transfer agent.
Reverse Side of Certificate
---------------------------
The following text appears of the reverse side:
The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM -- as tenants in common
TEN ENT -- as tenants by the entireties
JT TEN -- as joint tenants with right of survivorship
and not as tenants in common
UNIF GIFT MIN ACT -- _________________ CUSTODIAN ________________
(Cust) (Minor)
Under the Uniform Gifts to Minors Act ______________
(State)
Additional abbreviations may also be used though not in the above list.
THE CORPORATION WILL FURNISH WITHOUT CHARGE TO EACH STOCKHOLDER WHO SO
REQUESTS A STATEMENT OF THE POWERS, DESIGNATIONS, PREFERENCES AND RELATIVE,
PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS OF EACH CLASS OF STOCK OR SERIES
THEREOF AND THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS OF SUCH PREFERENCES
AND/OR RIGHTS.
For Value Received, ________ HEREBY SELL, ASSIGN AND TRANSFER UNTO
[box labeled "PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF
ASSIGNEE"] _______ OF THE SHARES REPRESENTED BY THE WITHIN CERTIFICATE AND
DO HEREBY IRREVOCABLY CONSTITUTE AND APPOINT ________ TO TRANSFER THE SAID
SHARES ON THE BOOKS OF THE WITHIN NAMED CORPORATION WITH FULL POWER OF
SUBSTITUTION IN THE PREMISES.
DATED _________________ 19_____
SIGNED _________________________________ _________________________________
THE ABOVE SIGNATURE(S) GUARANTEED BY
____________________________________
<PAGE> 3
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST
CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE
OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT
ALTERATION OR ENLARGEMENT, OR ANY CHANGE
WHATEVER
This certificate also evidences and entitles the holder hereof to certain
Rights as set forth in a Rights Agreement between Telxon Corporation and
Society National Bank (the "Rights Agent") dated as of August 25, 1987 (the
"Rights Agreement"), the terms of which are hereby incorporated herein by
reference and a copy of which is on file at the principal offices of Telxon
Corporation. Under certain circumstances, as set forth in the Rights
Agreement, such Rights may be redeemed, may expire, or may be evidenced by
separate certificates and will no longer be evidenced by this certificate.
Telxon Corporation will mail to the holder of this certificate a copy of the
Rights Agreement without charge within five (5) days after receipt of a written
request therefor. Under certain circumstances, Rights issued to Acquiring
Persons (as defined in the Rights Agreement) or certain related persons and any
subsequent holder of such Rights may become null and void with respect to
certain rights set forth in Section 11(a)(ii) of the Rights Agreement.
<PAGE> 1
EXHIBIT 10.1.7
--------------
DESCRIPTION OF COMPENSATION ARRANGEMENTS BETWEEN REGISTRANT
AND ROBERT F. MEYERSON, AN OFFICER OF REGISTRANT.
Pursuant to resolutions of the Board of Directors of Registrant dated
December 20, 1989, Robert F. Meyerson, Chairman of the Board of Directors of
Registrant, is entitled to annual compensation of $120,000, effective
commencing September 1, 1989, plus employee benefits consistent with those
afforded to other executive of Registrant for so long as Mr. Meyerson retains
his office as Chairman of the Board of Directors.
<PAGE> 1
EXHIBIT 10.8
AGREEMENT OF PURCHASE AND SALE OF ASSETS
THIS AGREEMENT OF PURCHASE AND SALE OF ASSETS (this
"Agreement"), is made as of July 13, 1995, by and among VISION
NEWCO, INC., a Delaware corporation (herein, together with its
successors and assigns, "Buyer"), VIRTUAL VISION, INC., a
Washington corporation (herein, together with its successors and
assigns, "Seller"), as debtor and debtor in possession, and THE
OFFICIAL UNSECURED CREDITORS' COMMITTEE, on behalf of the
bankruptcy estate of Virtual Vision (the "Creditors' Committee").
RECITALS
A. On July 18, 1994 (the "Petition Date"), Seller filed a
voluntary petition for relief under chapter 11 of the Bankruptcy
Code, 11 U.S.C. Sections 101-1330 (the "Bankruptcy Code") with the
United States Bankruptcy Court for the Western District of
Washington, at Seattle (the "Bankruptcy Court"), Case Number 94-
05834 (the "Case"), and currently is operating its business and
managing its property as a debtor in possession, pursuant to
Sections 1107 and 1108 of the Bankruptcy Code. The Creditors'
Committee was appointed, pursuant to Section 1102 of the
Bankruptcy Code, in August of 1994.
B. Seller is in the business (the "Business") of
developing and manufacturing visual display devices using, without
limitation, liquid crystal displays, images from which are
optically projected for virtual image perception by the user
thereof, and which are capable, among other things, of being
integrated with other devices.
C. Seller is desirous of selling and Buyer is desirous of
purchasing all of the assets of Seller other than the Excluded
Assets (as defined in Section 1.2), upon the terms and subject to
the conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual promises
hereinafter set forth and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
ARTICLE I
ASSETS SUBJECT TO THIS AGREEMENT
1.1 Purchase and Sale of Assets. Upon the terms and
subject to the conditions of this Agreement, and pursuant to
Sections 363, 365 and/or 1129 of the Bankruptcy Code, Seller shall
sell, assign, transfer, deliver and convey to Buyer, and Buyer
shall purchase and acquire from Seller, at the Closing (as defined
in Section 8.1), all of Seller's right, title and interest in and
to all of its rights, properties and assets of every nature, kind
and description, tangible and intangible, wherever located, except
for the Excluded Assets (defined below) (collectively, the
<PAGE> 2
"Acquired Assets"). The Acquired Assets shall include, without
limitation:
1.1.1 Receivables. All notes receivable, accounts
receivable and other amounts owing to Seller in connection with
the operation of the Business.
1.1.2 Inventory. All inventories of raw materials, work
in progress, finished goods, goods in transit and other
inventoried items owned by Seller on the Closing Date, wherever
situated, including, without limitation, rights in goods possessed
by distributors, sales representatives or vendors and the items
listed on Schedule 1.1.2 (the "Inventory").
1.1.3 Tangible Assets. All machinery, equipment, tools,
parts, spare parts, accessories, vehicles, office furniture,
office furnishings, office equipment, supplies, computer hardware
and software and all other tangible personal property of every
kind and nature owned by Seller on the Closing Date, whether or
not a fixture, including, without limitation, those items listed
on Schedule 1.1.3.
1.1.4 Contractual Rights. All rights and incidents of
interest of Seller in and to (a) the contracts, agreements,
leases, purchase orders, sales orders, licenses and other
commitments, including, without limitation, those listed on
Schedule 1.1.4 (the "Assumed Contracts") and (b) any contracts,
agreements, leases, purchase orders, sales orders, licenses and
other commitments under negotiation.
1.1.5 Intangible Assets. All of Seller's right, title and
interest in and to the intangible assets of Seller including,
without limitation, (a) all know-how, inventions, formulas,
innovations, designs, processes, formulations, trade secrets and
other technology, and mask work protection and technology, (b) all
patents, patent applications, inventions upon which patent
applications have not been filed, trade names, trademarks,
trademark registrations and applications, copyrighted works,
copyrighted registrations and applications including, without
limitation, those listed on Schedule 1.1.5 and all divisions,
continuations reissues, renewals, extensions and all other
improvements to any of the foregoing (the "Patents"; collectively
with subparagraph (a), the "Technology"), (c) the business and
goodwill of Seller as a going concern, and (d) subject to Section
9.3 below, all of Seller's rights in the name "Virtual Vision" and
all related names, marks, abbreviations, symbols and designs.
1.1.6 Governmental Licenses, Permits and Approvals. All
licenses, permits, franchises, qualifications, authorizations and
approvals issued or granted to Seller by any Governmental
Authority (as defined in Section 4.1.3) including, without
limitation, those listed on Schedule 1.1.6, to the extent
assignable pursuant to their respective terms.
<PAGE> 3
1.1.7 Records. Except as otherwise set forth in Section
1.2.3, all books, reports, files, documents, sales literature and
other marketing materials, designs, drawings, diagrams, plans,
manuals, research and testing records, asset listings, suppliers'
list, customers' lists, customers' records, employee records,
accounting, financial and operating records and other records of
Seller of every nature, whether written, printed or electronically
stored.
1.1.8 Credits, Prepaid Items, etc. All credits, prepaid
expenses, deferred charges, advance payments, deposits and prepaid
items owned by Seller on and after the date hereof including,
without limitation, those items listed on Schedule 1.1.8.
1.1.9 Certain Claims. All of Seller's rights and
incidents of interest in and to all causes of action, suits,
proceedings, judgments, claims and demands of any nature, whenever
maturing or asserted (and all interests in and rights to claims
under insurance policies and insurance contracts and claims
thereunder) including, without limitation, all of Seller's right,
title and interest in and to all actions or claims of any kind
whatsoever (and any and all proceeds related thereto), whether
direct, indirect, contingent, known or unknown, including, without
limitation, any insurance claims, related to or arising under or
in connection with the Nonexclusive License Agreement and Asset
Agreement dated as of October 17, 1994 between Seller and Virtual
Image Displays, Inc.
1.1.10 Other Assets. All other rights, properties or
assets of Seller other than the Excluded Assets.
1.2 Excluded Assets. Notwithstanding anything to the
contrary contained in this Agreement, the following rights,
properties and assets of Seller (collectively, the "Excluded
Assets") shall be retained by Seller and shall not be included in
the Acquired Assets sold, transferred, assigned, conveyed and
delivered to Buyer:
1.2.1 Cash. All cash, cash equivalents, marketable
securities, bank balances, bank accounts, deposits, monies in
possession and petty cash of Seller.
1.2.2 Praegitzer Molds. The proprietary molds of Virtual
Vision in which Praegitzer Industries, Inc. holds a valid security
interest.
1.2.3 Certain Corporate Records. The corporate minute
books and records, stock ledger, corporate seal and income tax
records and returns of Seller, and any worksheets, notes, files or
documents primarily related thereto, wherever located.
1.2.4 Other Excluded Assets. Any assets identified by
Buyer in Schedule 1.2.4.
<PAGE> 4
ARTICLE II
CONSIDERATION
2.1 Consideration. In consideration of the sale,
assignment, transfer and conveyance of the Acquired Assets, the
representations and warranties of Seller contained in this
Agreement and the other undertakings of Seller in this Agreement,
Buyer shall at the Closing:
(a) pay $1,850,000 to the Creditors' Committee or its
designee, on behalf of Seller, by wire transfer of immediately
available funds (with the $100,000 earnest money already held in
trust by counsel to the Creditors' Committee to be applied against
the foregoing amount);
(b) execute and deliver to the Creditors' Committee or its
designee, on behalf of Seller, a promissory note in the principal
amount of $1,000,000 (the "Buyer Note"), in accordance with the
Terms Sheet attached hereto as Exhibit A; and
(c) execute and deliver a Royalty Agreement in favor of
the Creditors' Committee or its designee, on behalf of Seller (the
"Royalty Agreement"), in accordance with the Terms Sheet attached
hereto as Exhibit A.
2.2 Allocation of Consideration. Seller and Buyer agree
that the consideration shall be allocated among the Acquired
Assets in the manner reasonably determined by Buyer. Seller and
Buyer shall reflect such allocation in all reports, including Form
8594, filed with the Internal Revenue Service.
ARTICLE III
ASSUMED LIABILITIES AND EXCLUDED LIABILITIES
3.1 Excluded Liabilities. Notwithstanding anything to the
contrary contained in this Agreement, Buyer shall have no
responsibility for and shall not assume or be liable for any
liabilities or obligations of Seller or any liabilities or
obligations of or relating to the Business or the Acquired Assets,
whenever arising and whether primary or secondary, direct or
indirect, absolute or contingent, contractual, tortious or
otherwise, other than those specifically identified or described
in Section 3.2. Without in any way limiting the generality of the
foregoing, Buyer shall not assume any of the following:
3.1.1 Excluded Contract Liabilities. Subject to Section
3.2, all liabilities and obligations arising under or in
connection with all contracts, leases, agreements, purchase
orders, sales orders, licenses, commitments and other
arrangements.
<PAGE> 5
3.1.2 Employee-Related Liabilities. All liabilities and
obligations to any persons employed or formerly employed by Seller
or any predecessor of Seller in the Business or otherwise at any
time or to any of such persons' spouses, children, other
dependents or beneficiaries or arising out of the termination
thereof, whenever such claims mature or are asserted, including,
without limitation, all liabilities and obligations arising
(a) under any Employee Plans (as defined in Section 5.1), (b) in
respect of any or all payroll obligations or practices or under
any employment, wage and hour restriction, equal opportunity or
discrimination, plant closing, immigration and naturalization
laws, (c) under any collective bargaining or employment laws or
contracts, (d) in connection with any workers' compensation or any
other employee health, accident or safety claims, and/or (e) in
respect of any severance, retirement benefits or post-retirement
health benefits.
3.1.3 Tax Liabilities. All liabilities and obligations
for United States federal, state, local, foreign or any other
taxes or assessments (including, without limitation, any interest,
penalty or addition to tax thereon or any cost or expense related
thereto) (a) attributable to Seller or any predecessor thereof or
to the conduct of the Business and the ownership and operation of
the Acquired Assets (including, without limitation, the employment
or engagement of any employee or independent contractor) or the
ownership or possession of any rights in or to, or the transfer
of, any of the Acquired Assets during any period ending on or
prior to the Closing Date, (b) attributable to or measured by the
income or any franchise, license or permit of Seller (or any
predecessor thereof) for any period, whether before or after the
Closing, (c) resulting from the transactions contemplated by this
Agreement, or (d) assessed, measured or payable at any time on or
prior to the Closing Date in respect of any personal property of
Seller or any of its predecessors.
3.1.4 Product Warranty Obligations. All liabilities and
obligations with respect to any and all express or implied product
warranties or product replacement or return programs, practices,
obligations or liabilities relating to any products manufactured,
packaged, assembled, sold, distributed, replaced or otherwise
disposed of by or on behalf of Seller or any of its predecessors
at any time.
3.1.5 Litigation. All liabilities and obligations of
Seller or any of its predecessors under all claims, demands,
litigation, actions, suits, investigations, proceedings,
assessments or judgments against, involving or applicable to or
binding upon Seller or any of its predecessors, the Business or
any of the Acquired Assets.
3.1.6 Other Liabilities. All other liabilities,
obligations and indebtedness of Seller or any of its predecessors
or affiliates or of the Business of any and every kind and nature,
whether now or hereafter owing, due or payable, howsoever
evidenced, created, incurred or assumed and whether primary or
<PAGE> 6
secondary, direct or indirect, matured or unmatured, known or
unknown, absolute or contingent, fixed or unliquidated, secured or
unsecured, contractual or tortious, arising by operation of Law
(as defined in section 4.1.3) or otherwise.
3.2 Buyer's Post-Closing Date Responsibilities. Buyer
shall be responsible for, and solely for any and all liabilities
or obligations arising out of the ownership, possession, use,
assumption, assignment or operation of the Acquired Assets or the
conduct of the Business by Buyer arising after the Closing Date,
and all liabilities or obligations incurred by Seller in the
ordinary course of its business within 30 days of the Closing
Date.
3.3 Seller's Closing Obligation. Pursuant to the Official
Unsecured Creditors' Committee's First Amended Plan of
Reorganization (the "Plan"), Seller shall pay to Insight, Inc.
("Insight") all minimum guaranteed royalty payments outstanding as
of the Closing Date under the Patent Transfer Agreement dated as
of March 28, 1994 between Insight and Seller.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1 Representations and Warranties of Seller. Seller
hereby represents and warrants to Buyer as follows:
4.1.1 Organization and Good Standing. Seller is a
corporation duly incorporated, validly existing and in good
standing under the laws of the State of Washington and has all
requisite corporate power and authority to own, lease or hold its
rights, properties and assets. Seller is not required to qualify
as a foreign corporation in any state.
4.1.2 Corporate Power and Authority. Subject only to the
entry by the Bankruptcy Court of the Confirmation Order, Seller
has all requisite corporate power and authority to execute,
deliver and perform this Agreement and any other agreements and
instruments to be entered into by Seller in connection herewith.
The execution, delivery and performance of this Agreement and all
such other agreements and instruments have been duly authorized
and approved by all necessary corporate action on the part of
Seller. The approval of Seller's shareholders is not required to
consummate the transactions contemplated hereby.
4.1.3 No Conflicts. Neither the execution and delivery
nor the performance by Seller of this Agreement or any other
agreements and instruments to be executed and delivered by Seller
in connection herewith will, (a) (i) violate or conflict with the
Articles of Incorporation or By-Laws of Seller, or (ii) to
Seller's knowledge after due inquiry, violate, conflict with,
result in a breach of, constitute a default under, or permit the
acceleration of any obligations under any note, debt instrument,
<PAGE> 7
indenture, mortgage, lease, license, purchase or sales order,
security agreement or other agreement, commitment, undertaking,
arrangement or contract, whether written or oral, express or
implied, to which Seller is a party or to or by which the Business
or any of the Acquired Assets may be subject or bound, (b) to
Seller's knowledge after due inquiry, result in the creation or
imposition in favor of any person of any Liens (as defined in
Section 4.1.5) upon any of the Acquired Assets, (c) to Seller's
knowledge after due inquiry, subject to the entry by the
Bankruptcy Court of the Confirmation Order, result in the
violation or breach of or conflict with any laws, statutes, rules,
regulations, ordinances, orders, arbitration awards, judgments,
decrees or other legal requirements (collectively, "Laws") of any
federal, state, local or foreign governmental or any subdivision,
agency, instrumentality, authority, commission, board or bureau
thereof or any federal, state, local or foreign court or
arbitrator (individually, a "Governmental Authority") applicable
to Seller, any of the Acquired Assets or the Business, or
(d) constitute an event which, after notice or lapse of time or
both, would result in any such violation, conflict, default or
acceleration, or in the creation or imposition of any such Liens.
4.1.4 No Consents. Except for the entry by the Bankruptcy
Court of the Confirmation Order, and except for any consent or
approval required of or by the Federal Communications Commission,
there are no consents, waivers, releases, approvals, orders,
authorizations, assignments, registrations, declarations, filings
or notices (collectively, "Consents") required to be satisfied,
obtained from or made to or with any Governmental Authority in
order (a) to permit Seller to enter into and perform this
Agreement and all other related agreements and instruments and
convey good and marketable title to the Acquired Assets as
provided in the last sentence of Section 4.1.5 and (b) to permit
the use, possession, occupancy and operation of the Acquired
Assets by Buyer after the Closing in substantially the same manner
as they were used and conducted by Seller on or prior to the date
hereof including all contracts which are not Excluded Assets
("Assumed Contracts"), and Buyer thereupon shall have effectively
acquired all of Seller's rights and interests in and to the
Assumed Contracts.
4.1.5 Title to Acquired Assets. Seller has good and
marketable title to all of the Acquired Assets. At the Closing,
Buyer will acquire good and marketable title to, or valid and
enforceable leasehold interests in, as the case may be, all
Acquired Assets, in each and every case free and clear of any and
all security interests, hypothecations, liens, claims,
encumbrances, mortgages, pledges, equities, charges, assessments,
easements, covenants, restrictions, reservations, defects in
title, encroachments, condemnation proceedings and other burdens
or conflicting interests (collectively, "Liens").
4.1.6 Agreements; No Defaults. Except as shall be
specifically released, waived, cured or excused by the Bankruptcy
Court Order, neither Seller nor, to the best of Seller's
<PAGE> 8
knowledge, any other party to any Assumed Contract has failed to
perform any required obligations or improperly terminated or is in
breach of or in default under any such Assumed Contract, and, to
the best of Seller's knowledge, there exists no condition or event
which, after notice or lapse of time or both, would constitute any
such breach, termination or default. To the best of Seller's
knowledge, each of the Assumed Contracts is a legal, binding and
enforceable obligation of or against the parties thereto.
4.1.7 Compliance With Laws. (a) Seller has not received
any written or oral notice of or citation for noncompliance with
any Laws in connection with the Acquired Assets or the Business;
and (b) to the best of Seller's knowledge, there exists no fact,
condition, situation or circumstance, which, after notice or lapse
of time or both, would constitute noncompliance with or give rise
to future liability with respect to any such Laws.
4.1.8 Litigation. Except as disclosed on Schedule 4.1.8
hereto and except for Seller's filing of the bankruptcy petition,
(i) Seller is not subject to any order of, or agreement,
memorandum or understanding with, any Governmental Authority
applicable to any of the Acquired Assets or the Business, and
(ii) there is no litigation, action, suit, proceeding, claim or
investigation pending, or, to the best of Seller's knowledge,
threatened against Seller and affecting or relating to the
Business, any of the Acquired Assets, the transactions
contemplated by this Agreement, and no matter set forth on
Schedule 4.1.8 shall affect, or the ability of Buyer after the
Closing to use the Acquired Assets and conduct the Business in
substantially the same manner as they are used and conducted on
the date hereof.
4.1.9 Technology. (a) In addition to all other Acquired
Assets, Seller is the owner of and possesses all rights in and to,
including the right to assign in accordance with the terms hereof,
the Technology, subject to the licenses listed on Schedule
4.1.9(a). The rights in and to the Technology to be assigned to
Buyer pursuant hereto are sufficient to allow the continued
development of the Business, including, without limitation,
commercial and consumer applications of the Technology. Any and
all elements of the Technology developed by any party or parties
other than Seller or in which any other party or parties has at
any time had an interest have, and all such interests have, been
duly and validly assigned for good and sufficient consideration,
along with any and all patents, copyrights and other intellectual
property rights therein and the attendant goodwill, to Seller in
writing. All such parties and assignments are identified on
Schedule 4.1.9(a), and true and correct copies have been provided
to Buyer. Seller has maintained all Technology that is a trade
secret in confidence and has maintained sufficient contractual and
other arrangements to protect the confidentiality thereof.
(b) None of the Technology is or contains any trade secret
of any other party, and there is and, except as described in
Schedule 4.1.9(b), has been no infringement or claim of
<PAGE> 9
infringement of any rights of third parties in or by the use of
the Technology, and there do not exist any facts or circumstances
which cause any of the rights represented by the Technology to be
unenforceable or which limit or restrict the scope of use, sale or
licensing of the Technology. Further, except as set forth in this
Agreement and Schedules hereto, none of the Technology, nor any
element thereof, is licensed to Seller by others, or by Seller to
others.
4.1.10 Delivery of Documents. Seller has delivered, or
will have delivered prior to Closing, to Buyer true, correct and
complete copies of all Assumed Contracts and such other
agreements, instruments or documents as are referred to on any
Schedule hereto.
4.1.11 Brokers' Fees. No investment banker, broker,
finder or other intermediary has been retained by or is authorized
to act on behalf of Seller who might be entitled to any fee or
commission from Buyer or any of its affiliates upon consummation
of the transactions contemplated by this Agreement.
4.2 Representations and Warranties of Buyer. Buyer
represents and warrants to Seller as follows:
4.2.1 Organization and Good Standing; Corporate Power and
Authority. Buyer is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of
Delaware and has all requisite corporate power and authority to
execute, deliver and perform this Agreement and any other
agreements and instruments to be entered into by Buyer in
connection herewith. The execution, delivery and performance of
this Agreement and any other such agreements and instruments have
been duly authorized and approved by all necessary corporate
action on the part of Buyer. This Agreement is, and such other
agreements and instruments are or upon their execution and
delivery by Buyer will be, the valid and binding obligations of
Buyer, enforceable against Buyer in accordance with their
respective terms.
4.2.2 Conflicts; Defaults. Neither the execution and
delivery of this Agreement and any other agreements and
instruments to be executed and delivered in connection herewith by
Buyer, nor the performance by Buyer of the transactions
contemplated hereby or thereby, will violate or conflict with
Buyer's Certificate of Incorporation or By-laws.
4.2.3 No Consents. To the best of Buyer's knowledge after
due inquiry, no Consent is required to be obtained from any
Governmental Authority in order to permit Buyer to enter into this
Agreement and all other related agreements and instruments.
4.2.4 Brokers' Fees. No broker, finder or other
intermediary has been retained by or is authorized to act on
behalf of Buyer who might be entitled to any fee or commission
<PAGE> 10
from Seller or any of its affiliates upon consummation of the
transactions contemplated by this Agreement.
4.3 Representations and Warranties of Creditors'
Committee. The Creditors' Committee represents and warrants that
it has been and is duly appointed under Section 1102 of the
Bankruptcy Code, and the Creditors' Committee has approved the
transactions contemplated by the Plan and this Agreement.
ARTICLE V
EMPLOYEE MATTERS
5.1 Employee Benefits. Seller shall retain all
liabilities and obligations in respect of the past, present and
future employees of Seller, including, without limitation, under
any Employee Plans and all applicable Laws. Without limiting the
generality of the foregoing or of Section 3.2, Buyer shall have no
liability or obligation whatsoever under any Employee Plan, nor
shall Buyer have any obligation to provide any employee benefits
to any persons employed or formerly employed by Seller
("Employees") whom Buyer hires or has hired or to make any
severance or termination payments to any such Employees in respect
of their employment or termination thereof by Seller, whether or
not Buyer hires such Employees. For the purposes of this
Agreement, "Employee Plans" shall mean the rights of Seller under,
and any funds and property held in trust or any other funding
vehicle pursuant to, any "employee benefit plan" (within the
meaning of Section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended) or any other bonus, stock option, stock
appreciation, stock purchase, severance, termination, lay-off,
leave of absence, disability, pension, profit sharing, retirement,
vacation or holiday pay, insurance, deferred compensation or other
employee or welfare benefit plan, agreement or arrangement of
Seller applicable to its employees.
5.2 Future Employment. Buyer may offer employment from
and after the Closing Date to any Employees on such terms and
conditions as Buyer may, in its sole discretion, determine, but
Buyer shall not be obligated to do so pursuant to this Agreement
or otherwise. Seller agrees to terminate all or any of its
Employees in the manner and at such time as Buyer may reasonably
request at or prior to the Closing; provided, however, that,
whether or not any Employee of Seller or any of its affiliates
becomes, or has become, an employee of Buyer, Seller hereby
irrevocably waives and releases such Employee from, and agrees not
to seek enforcement against Buyer or such Employee of, any
non-competition, non-disclosure, restrictive covenant or other
contract between such Employee and Seller or any of its affiliates
or predecessors; and provided further, however, that any such
restrictions shall inure to the benefit of Buyer.
<PAGE> 11
ARTICLE VI
PRE - CLOSING COVENANTS
6.1 Delivery of Documents; Access. During the period from
the date of this Agreement until the Closing, Seller shall
promptly deliver true, correct and complete copies of all filings
made with the Bankruptcy Court by Seller or any other person
relating to this Agreement, the Business or the Acquired Assets.
During such period, Seller shall provide the Buyer and its
officers, employees and representatives with full and complete
access, at reasonable times, to all of the personnel, facilities,
books and records of Seller in order to enable Buyer to make a
thorough investigation of the Acquired Assets and the Business.
6.2 Pre-Closing Conduct. During the period from the date
of this Agreement until the Closing, Seller shall operate the
Business in compliance with all Laws, perform and satisfy all of
its liabilities and obligations in the ordinary course and
maintain in good repair all of its properties and assets and
otherwise operate the business in the ordinary course. Without
limiting the foregoing, during the period from the date of this
Agreement until the Closing, except as otherwise ordered or
approved by the Bankruptcy Court, Seller shall conduct the
Business in the ordinary course, except that Seller and its
affiliates shall not, without the prior written consent of Buyer:
(a) sell, transfer, assign, lease or otherwise dispose of
any of the Acquired Assets;
(b) mortgage, pledge, encumber or subject to any Lien, or
permit to be mortgaged, pledged, encumbered or subjected to any
Lien, any of the Acquired Assets other than Liens existing on the
date of this Agreement;
(c) modify, amend, waive any rights under, permit to
expire, cancel or terminate any of the Assumed Contracts;
(d) move or otherwise relocate any of the Acquired Assets
to any other location;
(e) materially alter the payment or collection practices
and policies with respect to Seller's trade payables or accounts
receivable;
(f) incur, assume or guarantee any indebtedness for
borrowed money;
(g) enter into any agreement, contract, commitment or
arrangement with a term greater than 30 days or which involves
payments to be made by any party in excess of $5,000;
(h) pay, discharge or satisfy any claims, liabilities or
obligations arising on or prior to the Petition Date;
<PAGE> 12
(i) other than in the ordinary course of business
consistent with past practice and in accordance with the terms
hereof, pay, discharge or satisfy any claims, liabilities or
obligations arising after the Petition Date;
(j) expend any funds other than in connection with the
operations of the Business in the ordinary course of business;
(k) make, or enter into any agreement, contract,
arrangement or commitment to make, any capital expenditures; or
(l) agree to take any of the foregoing actions.
6.3 Certain Consents.
(a) Seller shall use its best efforts to promptly obtain
or cause to be obtained from any required Person, such Lien
terminations or releases, agreements, documents and instruments
("Lien Release Documents") as Buyer, in its sole discretion, shall
deem necessary or desirable in order to effect and evidence the
transfer to Buyer of such title to the Acquired Assets as is
provided in this Agreement, each duly completed and executed and
in proper form for filing with the appropriate Governmental
Authorities and otherwise in form and substance reasonably
satisfactory to Buyer. The Lien Release Documents required
pursuant to this Section 6.3(a) are referred to herein as the
"Required Lien Release Documents."
(b) Seller shall use its best efforts to promptly obtain
or cause to be obtained all Consents required to be obtained in
order to permit Seller and Buyer to consummate the transactions
provided for hereunder.
(c) Seller shall take all steps necessary or appropriate
to assume and assign to Buyer, effective as of the Closing, the
Assumed Contracts.
6.4 Notice of Certain Events. Seller and Buyer each
agrees to give prompt written notice to the other of (a) the
occurrence, or failure to occur, of any event, the occurrence or
failure to occur of which, with the giving of notice or the lapse
of time or both, would cause any representation or warranty of
such party contained in this Agreement to be untrue or inaccurate
in any material respect at any time from the date hereof to the
Closing Date, promptly upon becoming aware of such event, and
(b) any material failure on its part to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied
by it hereunder or thereunder; provided, however, that the
delivery of any notice pursuant to this Section 6.4 shall not
limit or otherwise affect the remedies available hereunder to the
party receiving such notice.
<PAGE> 13
ARTICLE VII
CONDITIONS TO CLOSING
7.1 Conditions to Obligations of Buyer. The obligation of
Buyer to consummate the transactions contemplated by this
Agreement shall be subject to the fulfillment, except as otherwise
set forth below, at or prior to the Closing of the following
conditions (any one or more of which may be waived in whole or in
part by Buyer in its sole discretion); provided, however, that
Buyer shall be obligated to consummate the transactions
contemplated by this Agreement unless any breach or nonperformance
by Seller or the Committee materially frustrates the purpose of
this Agreement:
7.1.1 Confirmation Matters. The Bankruptcy Court shall
have entered the Confirmation Order in such form and substance as
is satisfactory to and approved by Buyer, and such order shall
remain valid, binding and in full force and effect in such form
and substance (without any stay, rescission or modification
thereof), and the Confirmation Order shall have become a Final
Order (as such term is defined in the Plan).
7.1.2 Accuracy of Representations and Warranties;
Performance of Covenants. The representations and warranties of
Seller contained in this Agreement shall be true and correct as
made, both on the date of this Agreement and as of the Closing
Date (as though such representations and warranties were made anew
on the Closing Date), and Seller shall have performed and complied
with, in all material respects, all covenants, agreements,
undertakings, obligations and transactions contemplated by this
Agreement to be performed by Seller at or prior to the Closing.
7.1.3 Lien Release Documents. All Required Lien Release
Documents shall have been obtained by Buyer.
7.1.4 No Litigation. No preliminary or permanent
injunction or other order (including a temporary restraining
order) of any Governmental Authority shall be in effect as of the
Closing which enjoins, restrains or prohibits any of the
transactions contemplated by this Agreement. Except as provided
in Section 8.4, no action or proceeding shall be pending or
threatened seeking to restrain or prohibit the consummation of the
transactions contemplated by this Agreement.
7.1.5 Consents. Buyer shall have obtained all Consents,
in form and substance reasonably satisfactory to Buyer, required
to be obtained in order to permit Seller and Buyer to consummate
the transactions contemplated by this Agreement.
7.1.6 No Material Adverse Chance. Between the date of
this Agreement and the Closing Date, there shall have been no
material adverse change in the Seller's Business or the Acquired
Assets.
<PAGE> 14
7.1.7 Exhibits and Schedules. Each of the Exhibits and
Schedules to this Agreement shall be in form and substance
mutually satisfactory to Buyer and Seller.
7.1.8 Closing Deliveries. At or prior to the Closing,
Seller shall have delivered, or cause to be delivered, to Buyer
each of the documents required by Section 8.2.
7.2 Conditions to Obligations of Seller. The obligation
of Seller to consummate the transactions contemplated by this
Agreement shall be subject to the fulfillment at or prior to the
Closing of the following conditions (any one or more of which may
be waived in whole or in part by Seller in its sole discretion);
provided, however, that Seller shall be obligated to consummate
the transactions contemplated by this Agreement unless any breach
or nonperformance by Buyer materially frustrates the purpose of
this Agreement:
7.2.1 Confirmation Order. The Bankruptcy Court shall have
entered the Confirmation Order in such form and substance as is
satisfactory to and approved by Seller, and such order shall
remain valid, binding and in full force and effect in such form
and substance (without any stay, rescission or modification
thereof) and the Confirmation Order shall have become a Final
Order.
7.2.2 Accuracy of Representations and Warranties;
Performance of Covenants. The representations and warranties of
Buyer contained in this Agreement shall be true and correct as
made, both on the date of this Agreement and as of the Closing
Date (as though such representations and warranties were made anew
on the Closing Date).
7.2.3 No Litigation. No preliminary or permanent
injunction or other order (including a temporary restraining
order) of any Governmental Authority of competent jurisdiction
shall be in effect as of the Closing which enjoins, restrains or
prohibits any of the transactions contemplated by this Agreement.
7.2.4 Exhibits and Schedules. Each of the Exhibits and
Schedules to this Agreement shall be in form and substance
mutually satisfactory to Buyer and Seller.
7.2.5 Closing Deliveries. At or prior to the Closing,
Buyer shall have delivered, or cause to be delivered, to Seller
each of the documents required by Section 8.3.
ARTICLE VIII
CLOSING
8.1 The Closing. The closing (the "Closing") of the
transactions contemplated by this Agreement shall occur on the
first business day that is ten (10) days after the entry of the
<PAGE> 15
Confirmation Order at the offices of STOEL RIVES, 3600 One Union
Square, 600 University Street, Seattle, Washington, or at such
other time, date or place as the parties may agree (the "Closing
Date").
8.2 Closing Deliveries by Seller. Seller shall deliver to
Buyer the following items:
(a) Closing Certificates. One or more certificates on
behalf of Seller, each dated the Closing Date and signed by an
officer of Seller, as to the satisfaction of the conditions set
forth in Section 7.1.2, the receipt of all necessary corporate
authorizations and certain other corporate organizational and
incumbency matters.
(b) Forms of Assignment. A bill of sale and other
instruments of assignment covering the Acquired Assets to transfer
such title to the Acquired Assets as is provided in this
Agreement, each in form and substance reasonably satisfactory to
Buyer.
(c) Business License. A business license of Seller issued
by the Secretary of State of the State of Washington.
(d) Mutual Release. A mutual release in the form attached
as Exhibit B executed by Seller.
8.3 Closing Deliveries by Buyer. Buyer shall deliver to
Seller the following items:
(a) Receipts. Receipts, to be executed by Seller and the
Creditors' Committee at the closing, evidencing the payments to be
made at the Closing pursuant to Section 2.1.
(b) Buyer Note. The Buyer Note, duly executed by Buyer.
(c) Guaranty. A guaranty in substantially in the form of
Exhibit C, duly executed by Telxon Corporation, the parent
corporation of Buyer.
(d) Closing Certificates. One or more certificates on
behalf of Buyer, dated the Closing Date and signed by an officer
or similar authorized Representative of Buyer as to the
satisfaction of the conditions set forth in Section 7.2.2, the
receipt of all necessary corporate authorizations and certain
other corporate organizational and incumbency matters.
(e) Good Standing Certificate. A good standing
certificate of Buyer issued by the Secretary of State of Delaware.
(f) Mutual Release. A mutual release in the form attached
as Exhibit B executed by Buyer.
(g) Royalty Agreement. The Royalty Agreement, duly
executed by Buyer.
<PAGE> 16
ARTICLE IX
POST-CLOSING COVENANTS
9.1 Further Assurances. (a) After the Closing, Seller
shall, from time to time, at the request of Buyer, execute and
deliver or cause to be executed and delivered, to Buyer such other
instruments of assignment, conveyance and transfer and take such
other action as Buyer may reasonably request so as more
effectively to sell, transfer, assign and deliver and vest in
Buyer title to and possession of the Acquired Assets as provided
in this Agreement or otherwise to consummate the transactions
contemplated by this Agreement.
(b) After the Closing, Buyer shall from time to time, at
the request of Seller, prepare, execute and deliver to Seller such
other instruments of assumption and take such other action as
Seller may reasonably request.
9.2 Delivery of Property After Closing. From and after
the Closing, Seller shall promptly transfer and deliver to Buyer,
promptly after Seller's receipt thereof, any property which Seller
may receive that belongs to Buyer.
9.3 Seller's Name Change. From and after the Closing
Date, Seller shall cease using, doing business or holding itself
out under the name "Virtual Vision, Inc.," or any other name
including the words "Virtual Vision"; and provided further,
however, that Seller acknowledges that Buyer shall have sole
control of all trademarks acquired under this Agreement, including
the name "Virtual Vision."
ARTICLE X
INDEMNIFICATION AND SURVIVAL
10.1 Exclusive Remedies. Subject to Article VII, the
remedies contained in this Article X shall be the sole remedies
available to Buyer under this Agreement and applicable law for any
breach of contract, tort or other theory of recovery against
Seller in connection with this Agreement.
10.2 Remedies Relating to Patent Rights. If the transfer
to Buyer of title to or ownership of any of the Patents is not
effective pursuant to this Agreement and the Confirmation Order,
then Buyer shall be entitled to withhold payment of any remaining
payments due under the $1,000,000 promissory note and the Royalty
Agreement to the extent of Buyer's damages arising from such
misrepresentation.
10.3 Remedies Relating to Tangible Assets. If (a) the
transfer to Buyer of title to or ownership of any tangible asset
<PAGE> 17
identified in Schedule 1.1.3 hereto is not effective pursuant to
this Agreement and the Confirmation Order and (b) the damages
suffered by Buyer as a result of (all) such failure(s) effectively
to transfer (the) tangible asset(s) exceed(s) $50,000 in the
aggregate, then Buyer shall be entitled to withhold payment of any
remaining payments due under the $1,000,000 promissory note and
the Royalty Agreement to the extent of Buyer's damages arising
from such misrepresentation(s) in excess of $50,000 and up to
$250,000.
10.4 Arbitration. Buyer and Seller agree that all
disputes under this Article shall be resolved by J. Todd Tracy, as
sole arbitrator, pursuant to such rules or procedures of
arbitration selected by Mr. Tracy in his sole discretion. The
decision of the Arbitrator shall not be subject to review or
appeal.
10.5 Knowledge of Buyer. Buyer's rights to the remedies
under this Article X shall not be affected by any investigation
made by or on behalf of Buyer or whether or not Buyer relied upon
any untrue or incorrect representation or warranty, except that
Buyer shall not be entitled to indemnification for any Damages
arising out of any inaccuracy of Seller's representations and
warranties contained in Article IV to the extent actually known by
Buyer prior to the date of this Agreement.
10.6 Survival of Representations, Warranties and
Covenants. (a) Each of the representations and warranties of the
parties contained in this Agreement shall survive the Closing
until 5:00 p.m., Eastern Daylight Time, on the third anniversary
of the Closing Date (the "General Expiration Date"), at which time
all such representations and warranties, and any cause of action
arising out of any claim which is not asserted prior to the
General Expiration Date, shall terminate and be of no further
force and effect, except that the expiration of such
representations and warranties shall not affect any right to
pursue any claims (or any causes of action arising out of such
claims) asserted by any party prior to the General Expiration
Date.
(b) The covenants and other agreements of the parties
shall survive the Closing in accordance with their respective
terms.
ARTICLE XI
PRORATIONS AND EXPENSES
11.1 Payrolls, Other Taxes and Expenses. (a) Except as
otherwise expressly agreed by Buyer, payrolls, earned vacation
pay, benefits and all employer-related taxes, contributions and
fees of all persons employed by Seller for any and all periods of
employment with Seller shall be borne and paid by Seller.
Payrolls, vacation pay, if any, and all employer-related taxes,
<PAGE> 18
contributions and fees for all persons, if any, employed by Buyer
for any and all periods of employment with Buyer shall be borne
and paid by Buyer.
(b) Seller shall be responsible for and shall pay the
cost of all personal property transfer taxes, gross receipts,
sales or use taxes, license and registration fees and expenses,
if any, and all other charges of any Governmental Authority of or
in the State of Washington applicable to or assessed on the
transactions contemplated by this Agreement.
(c) Except as otherwise expressly provided in this
Agreement, each party to this Agreement shall bear its own costs
and expenses in connection with this Agreement and the
transactions contemplated hereby.
ARTICLE XII
AMENDMENT AND TERMINATION
12.1 Amendment. This Agreement may be amended only by an
agreement or instrument in writing which refers to this Agreement
and is duly executed by each of Buyer and Seller.
12.2 Termination. (a) This Agreement may be terminated
at any time prior to the Closing upon the mutual written
agreement of Buyer and Seller.
(b) Buyer may terminate this Agreement by written notice
to Seller if Buyer is not in material breach of its obligations
under this Agreement and if the Closing has not been consummated
on or before July 31, 1995.
(c) Subject to Section 7.1 above, Buyer may terminate
this Agreement by written notice to Seller at any time prior to
the Closing if a condition to its performance shall not be
fulfilled or upon the occurrence of a material default or breach
in any material respect of any representation, warranty,
covenant, agreement or obligation by Seller, and such condition
cannot be fulfilled or such default or breach cannot be cured at
or prior to the Closing.
12.3 Effect of Termination. In the event that this
Agreement shall be terminated as provided in Section 12.2, all
other obligations of the parties hereto under this Agreement
shall terminate and there shall be no liability of any party
hereto or its representatives to any other party or its
representatives, except that nothing herein shall relieve any
party from liability for fraud.
<PAGE> 19
ARTICLE XIII
MISCELLANEOUS
13.1 Notices. All notices, requests, consents and other
communications hereunder shall be in writing and shall be deemed
to have been duly given and received upon receipt by personal
delivery, telecopy or recognized overnight delivery service or
three (3) calendar days after being mailed by registered or
certified first class United States mail, return receipt
requested, postage prepaid, and in each case addressed:
(a) if to Seller, to:
Virtual Vision, Inc.
c/o SHULKIN HUTTON, INC., P.S.
1200 Third Avenue, Suite 1900
Seattle, WA 98101-3066
Attention: J. Todd Tracy, Esq.
Fax No. : (206) 682-9289
(b) if to the Creditors' Committee, to:
STOEL RIVES
3600 One Union Square
600 University Street
Seattle, WA 981013197
Attention: Bradford Anderson/David B. Levant
Fax No. : (206) 386-7500
(c) if to Buyer, to:
Vision Newco, Inc.
3330 W. Market Street
Akron, OH 44333
Attention: President
Fax No.: (216) 873-2240
with a copy to:
Goodman Weiss Miller Freedman
100 Erieview Plaza
Cleveland, Ohio 44114
Attention: Robert A. Goodman, Esq.
Fax No. : (216) 363-5835
; provided, however, that if any party shall have designated a
different address or telecopy number by notice to the other, then
to the last address or telecopy number to be designated.
13.2 Waivers. Seller may waive in writing compliance by
Buyer with any of the terms contained in this Agreement (except
such, if any, as may be imposed by Law). Buyer may waive in
writing compliance by Seller with any of the terms contained in
this Agreement (except such, if any, as may be imposed by Law).
<PAGE> 20
Any waiver by Seller or Buyer of any breach of, or failure to
comply with, any provision of this Agreement by another party
shall not be construed as, or constitute, a continuing waiver of
such provision, or a waiver of any other breach of, or failure to
comply with, any other provision of this Agreement.
13.3 Assignment. This Agreement and the rights and
duties hereunder shall be binding upon and inure to the benefit
of the successors and permitted assigns of each of the parties to
this Agreement. Except for the assignment by Buyer of this
Agreement and all or any of its rights and obligations hereunder
to (a) any of its affiliates, (b) its secured lenders, or (c) any
person who acquires (whether in a single transaction or a series
of transactions and whether by operation of law or otherwise) all
or substantially all of the assets of Buyer or at least a
majority of the outstanding capital stock of Buyer (any of which
assignments may be made without the consent of Seller), no party
shall assign or delegate this Agreement or any rights or
obligations hereunder without the prior written consent of the
other party, such consent not to be unreasonably withheld.
13.4 Complete Agreement. This Agreement, the Plan and
the Confirmation Order set forth the entire understanding of the
parties hereto with respect to the subject matter hereof and
supersede all prior agreements, covenants, arrangements,
communications, representations or warranties, whether oral or
written, by either party or any Representative of either party
hereto.
13.5 Governing Law. This Agreement shall be construed
and enforced in accordance with and governed by the internal
substantive laws of the State of Washington, without giving
effect to the principles of conflicts of law thereof.
13.6 Third Parties. Nothing herein expressed or implied
is intended or shall be construed to confer upon or give to any
person or entity, other than the parties to this Agreement, any
rights or remedies under or by reason of this Agreement.
13.7 Counterparts. This Agreement may be executed by the
parties to this Agreement in one or more counterparts, each of
which shall be deemed to be an original, but all of which
together shall constitute one and the same agreement.
13.8 Passage of Title and Risk of Loss. Legal title,
equitable title and risk of loss with respect to the Acquired
Assets shall pass to Buyer at the Closing.
13.9 Severability. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced
by any rule of law or public policy, all other terms and
provisions of this Agreement will nevertheless remain in full
force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any
manner adverse to any party hereto. Upon any such determination
<PAGE> 21
that any term or other provision is invalid, illegal or incapable
of being enforced, the parties hereto shall negotiate in good
faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable
manner, to the end that the transactions contemplated by this
Agreement are consummated to the extent possible.
13.10 Construction. The headings of the Articles and
Sections of this Agreement and in the Schedules and Exhibits to
this Agreement are inserted for convenience of reference only and
shall not be used in interpreting this Agreement. Unless
specifically stated otherwise, references to Articles, Sections,
Exhibits and Schedules refer to the Articles, Sections, Exhibits
and Schedules to this Agreement.
<PAGE> 22
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized officers as of
the day and year first above written.
VIRTUAL VISION, INC.
By: /s/ George Cone
Name: George Cone
Title: President
VISION NEWCO, INC.
By:/s/ David B. Swank
Name: David B. Swank
Title: Executive Vice President
THE OFFICIAL UNSECURED CREDITORS'
COMMITTEE OF VIRTUAL VISION, INC.
By: /s/ Alan J. Kuresman
Name: Alan J. Kuresman
Title: Committee Representative
<PAGE> 1
EXHIBIT 11.01
-------------
EXHIBIT 11.* TO REPORT ON FORM 10-Q
TELXON CORPORATION AND SUBSIDIARIES
COMPUTATION OF FULLY DILUTED EARNINGS PER SHARE
(Dollars in thousands except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended
June 30,
-------------------------
1995 1994
-------- --------
<S> <C> <C>
Net income applicable to common shares $ 2,229 $ 1,273
======= =======
Weighted average common shares outstanding
for the period 16,102 15,824
Increase in weighted average from:
Dilutive effect of stock options 237 7
------ ------
Weighted average common shares assuming issuance
of the above securities 16,339 15,831
======= =======
Net income per common share:
On the weighted average
common shares outstand-
ing for the year $ .14 $ .08
Assuming issuance of shares
for dilutive stock
options** $ .14 $ .08
<FN>
* Numbered in accordance with Item 601 of Regulation S-K.
** This calculation is submitted in accordance with Regulation S-K Item
601(b)(1) although not required for income statement presentation because it
results in dilution of less than three percent. The Company's 7 1/2%
Convertible Debentures were omitted from the fully diluted calculation due to
their antidilutive effect.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1996
<PERIOD-END> JUN-30-1995
<CASH> 28,442
<SECURITIES> 0
<RECEIVABLES> 87,104
<ALLOWANCES> 2,120
<INVENTORY> 75,659
<CURRENT-ASSETS> 206,892
<PP&E> 108,851
<DEPRECIATION> 63,184
<TOTAL-ASSETS> 276,364
<CURRENT-LIABILITIES> 99,733
<BONDS> 31,292
<COMMON> 158
0
0
<OTHER-SE> 143,173
<TOTAL-LIABILITY-AND-EQUITY> 276,364
<SALES> 87,944
<TOTAL-REVENUES> 103,541
<CGS> 51,411
<TOTAL-COSTS> 60,414
<OTHER-EXPENSES> 38,389
<LOSS-PROVISION> 506
<INTEREST-EXPENSE> 1,023
<INCOME-PRETAX> 3,715
<INCOME-TAX> 1,486
<INCOME-CONTINUING> 2,229
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,229
<EPS-PRIMARY> .14
<EPS-DILUTED> 0
</TABLE>
