<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 15, 1996
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 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 MARCH 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NO. 0-21362
----------------
HARVARD INDUSTRIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<CAPTION>
<S> <C>
FLORIDA 21-0715310
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER IDENTIFICATION NO.)
OF INCORPORATION OR ORGANIZATION)
2502 N. ROCKY POINT DRIVE, SUITE 960
TAMPA, FLORIDA 33607
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
</TABLE>
(813) 288-5000
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
-------------------
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 [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
INDICATE BY CHECK MARK WHETHER THE REGISTRANT HAS FILED ALL DOCUMENTS
AND REPORTS REQUIRED TO BE FILED BY SECTION 12, 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 SUBSEQUENT TO THE DISTRIBUTION OF SECURITIES UNDER A PLAN
CONFIRMED BY A COURT. YES [X] NO [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
THE NUMBER OF SHARES OUTSTANDING OF REGISTRANT'S COMMON STOCK, AS OF MAY 15,
1996, WAS 6,998,907.
===============================================================================
<PAGE> 2
HARVARD INDUSTRIES, INC.
INDEX
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements:
Consolidated Balance Sheets
March 31, 1996 (Unaudited) and September 30, 1995 (Audited)..................................... 2
Consolidated Statements of Operations (Unaudited)
Three and Six Months Ended March 31, 1996 and 1995.............................................. 3
Consolidated Statements of Cash Flows (Unaudited)
Six Months Ended March 31, 1996 and 1995....................................................... 4
Notes to Consolidated Financial Statements - (Unaudited)................................................. 5
Item 2. Management's Discussion and Analysis of Financial Condition and Results of
Operations............................................................................................... 16
PART II. OTHER INFORMATION:
Item 1. Legal Proceedings...................................................................... 21
Item 4. Submission of Matters to a Vote of Security Holders.................................... 21
Item 5. Other Information...................................................................... 22
Item 6. Exhibits and Reports on Form 8-K....................................................... 22
SIGNATURES............................................................................................... 24
</TABLE>
- 1 -
<PAGE> 3
HARVARD INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
MARCH 31, 1996 AND SEPTEMBER 30, 1995
(In thousands of dollars)
<TABLE>
<CAPTION>
March 31, September 30,
1996 1995
ASSETS (Unaudited) (Audited)
------------ ------------
<S> <C> <C>
Current assets:
Cash and cash equivalents........................................... $ 3,733 $ 19,925
Accounts receivable, net............................................ 100,843 102,714
Inventories......................................................... 61,889 63,742
Net assets of discontinued operations............................... - 7,621
Prepaid expenses and other current assets........................... 1,248 1,415
---------- ----------
Total current assets......................................... 167,713 195,417
Property, plant and equipment, net.................................... 307,834 307,247
Intangible assets, net................................................ 137,398 132,537
Net assets of discontinued operations................................. 4,948 -
Other assets,net...................................................... 23,631 27,061
---------- ----------
$ 641,524 $ 662,262
========== ==========
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current liabilities:
Current portion of long-term debt................................... $ 2,359 $ 2,801
Accounts payable.................................................... 72,832 79,702
Accrued expenses.................................................... 76,355 85,232
Income taxes payable................................................ 7,857 8,265
---------- ----------
Total current liabilities.................................... 159,403 176,000
Revolving working capital loan........................................ 18,000 -
Long-term debt........................................................ 321,076 322,000
Postretirement benefits other than pensions........................... 99,490 95,642
Other ................................................................ 28,919 31,175
---------- ----------
Total liabilities............................................ 626,888 624,817
---------- ----------
14 1/4% Pay-In-Kind Exchangeable Preferred Stock,
($108,063 liquidation value at March 31, 1996 - includes
$7,188 of undeclared dividends payable on
September 30, 1996)............................................ 107,073 99,651
---------- ----------
Stockholders' deficiency:
Common Stock, $.01 par value; 30,000,000 shares authorized;
shares issued and outstanding : 6,998,407 at March 31,
1996 and 6,994,907 at September 30, 1995........................ 70 70
Additional paid-in capital.......................................... 49,506 56,899
Additional minimum pension liability............................... (1,836) (1,836)
Foreign currency translation adjustment............................. (1,895) (1,743)
Accumulated deficit................................................. (138,282) (115,596)
---------- ----------
Total stockholders' deficiency............................. (92,437) (62,206)
---------- ----------
Commitments and contingent liabilities................................
$ 641,524 $ 662,262
========== ==========
</TABLE>
See accompanying Notes to Consolidated Financial Statements (Unaudited).
- 2 -
<PAGE> 4
HARVARD INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE AND SIX MONTHS ENDED MARCH 31, 1996 AND 1995
(Unaudited)
(In thousands of dollars, except share and per share data)
<TABLE>
<CAPTION>
Three months ended Six months ended
------------------------------ -----------------------------
March 31, March 31, March 31, March 31,
1996 1995 1996 1995
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Sales........................................................ $ 200,821 $ 157,981 $ 411,357 $ 307,840
------------- ------------- ------------- -------------
Costs and expenses:
Cost of sales............................................. 196,426 137,128 384,776 271,628
Selling, general and administrative....................... 11,945 7,316 22,199 14,740
Interest expense.......................................... 10,311 4,054 20,361 7,769
Other (income) expense, net............................... 2,552 (171) 5,258 (197)
------------- ------------- ------------- -------------
Total costs and expenses.............................. 221,234 148,327 432,594 293,940
------------- ------------- ------------- -------------
Income (loss) before income taxes............................ (20,413) 9,654 (21,237) 13,900
Provision for income taxes................................... 549 3,887 1,449 5,629
------------- ------------- ------------- -------------
Net income (loss)............................................ $ (20,962) $ 5,767 $ (22,686) $ 8,271
============= ============= ============= =============
Net income (loss) attributable to common shareholders (a).... $ (24,674) $ 2,001 $ (30,108) $ 738
============= ============= ============= ============
Net income (loss) per common share (a)....................... $ (3.53) $ 0.28 $ (4.30) $ 0.10
============= ============= ============= =============
Weighted average number of common shares outstanding......... 6,997,157 7,242,462 6,996,032 7,134,295
============= ============= ============= =============
</TABLE>
(a) After deducting accrued dividends and accretion related to the Company's
14 1/4% PIK Exchangeable Preferred Stock.
See accompanying Notes to Consolidated Financial Statements (Unaudited).
- 3 -
<PAGE> 5
HARVARD INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED MARCH 31, 1996 AND 1995
(Unaudited)
(In thousands of dollars)
<TABLE>
<CAPTION>
Six months ended
------------------------
March 31, March 31,
1996 1995
---------- ----------
<S> <C> <C>
Cash flows related to operating activities:
Net income (loss).................................................... $ (22,686) $ 8,271
Add back (deduct) items not affecting cash and cash equivalents:
Income tax allocation charge....................................... - 3,665
Depreciation and amortization...................................... 25,901 15,373
Loss on disposition of property, plant and equipment
and property held for sale........................................ 982 683
Postretirement benefits............................................ 3,848 1,800
Changes in operating assets and liabilities :
Accounts receivable............................................... 1,871 (6,047)
Inventories....................................................... 1,853 5,557
Other current assets.............................................. 167 (751)
Accounts payable.................................................. (6,870) 4,836
Accrued expenses and income taxes payable........................ (16,064) (16,374)
Other noncurrent liabilities...................................... 474 -
---------- ----------
Net cash provided by (used in) operations............................ (10,524) 17,013
---------- ----------
Cash flows related to investing activities:
Acquisition of property, plant and equipment......................... (20,787) (7,687)
Proceeds to date from sale of discontinued operations................ 2,673 4,224
Proceeds from disposition of property, plant and equipment........... 663 928
Net change in other noncurrent accounts.............................. (1,070) 497
---------- ----------
Net cash used in investing activities................................ (18,521) (2,038)
---------- ----------
Cash flows related to financing activities:
Proceeds from exercise of stock options.............................. 29 2,400
Net borrowings under credit agreement................................ 18,000 -
Repayments of long-term debt......................................... (1,366) (4,815)
Pension fund payment pursuant to PBGC settlement agreement........... (3,000) (3,000)
Payment of EPA settlements........................................... (810) -
---------- ----------
Net cash provided by (used in) financing activities.................. 12,853 (5,415)
---------- ----------
Net increase (decrease) in cash and cash equivalents................... (16,192) 9,560
Beginning of period................................................... 19,925 60,360
---------- ----------
End of period......................................................... $ 3,733 $ 69,920
========== ==========
</TABLE>
See accompanying Notes to Consolidated Financial Statements (Unaudited).
- 4 -
<PAGE> 6
HARVARD INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1996 AND 1995
(UNAUDITED)
(IN THOUSANDS OF DOLLARS, EXCEPT SHARE AND PER SHARE DATA)
NOTE 1
The interim consolidated financial statements are unaudited but, in
the opinion of management, reflect all adjustments (consisting only of normal
recurring adjustments) necessary for a fair presentation of the results for the
periods presented. The results of operations for any interim period are not
necessarily indicative of the results to be expected for the full year. These
interim consolidated financial statements should be read in conjunction with
the consolidated financial statements and notes thereto for the year ended
September 30, 1995 included in the Company's Annual Report on Form 10-K.
NOTE 2
On three separate occasions in fiscal 1994, the Company became aware
that certain products of its discontinued ESNA division were not manufactured
and/or tested in accordance with required specifications at its Union, New
Jersey and/or Pocahontas, Arkansas facilities. These fastener products were
sold to the United States government and other customers for application in the
construction of aircraft engines and air frames.
In connection therewith, the Company notified the Department of
Defense Office of Inspector General ("DoD/OIG") and, upon request, was admitted
into the Voluntary Disclosure Program of the Department of Defense. The
Company also notified ESNA's customers, including the Defense Industrial
Supply Center, of these matters and has offered to retest and/or reprocess
affected parts. The Company, with the assistance of outside counsel and a
fastener specialist, investigated this matter and the Company recorded a
provision of $21,000 as of September 30, 1993. The Company retested and/or
reprocessed affected parts, including affected parts in its inventory, from
September 1993 until July 31, 1995, when such activities terminated with
respect to those parts which were returned by customers. For those fasteners
which had been destroyed during retesting, credits were issued to affected
customers' accounts. As a result of its admission into the Voluntary
Disclosure Program, the Company expects that it will receive favorable
consideration from the government with respect to whether or not criminal
charges should be brought, administrative sanctions should be imposed and civil
penalties should be sought in connection with sales of affected parts to the
government. There is no assurance, however, that the Company will receive such
treatment with respect to any of the disclosures made by the Company in
connection with its admission to the Voluntary Disclosure Program.
The Company may also be subject to civil damages which could result
from claims made by other customers. In May 1995, a major customer, Harco
Division of VSI Corporation ("Harco"), filed a complaint in United States
District Court seeking damages. The Company has also received notification of
possible claims from other customers similar to Harco. In April 1996, the
Company and Harco negotiated a settlement whereby Harco dismissed its complaint
against the Company and the proceedings are now concluded. The Company has
agreed to indemnify Harco against any future claims relating to the ESNA
matter, if any, that may be asserted against Harco by its customers.
Additionally, the Company agreed to indemnify Harco for certain future costs,
if any, which may result from non-performance by the Company's sub-contractor
in filling Harco's orders.
- 5 -
<PAGE> 7
At March 31, 1996, the remaining accrued costs of discontinued operations are
primarily related to legal costs, fines and penalties, subcontractor costs,
severance pay and the Harco settlement (which settlement was charged against
the accrued costs of discontinued operations).
The ultimate cost of disposition of the ESNA matter, as well as the
required funding of such cost, is dependent upon future events, the outcomes of
which are not determinable at the present time. Such outcomes could have a
material effect on the Company's financial condition, results of operations
and/or liquidity.
If it is ultimately determined that the deviations from specifications
and certifications made in connection therewith, constitute violations of
various statutory and regulatory provisions, the Company may, among other
things, be subject to criminal prosecution, treble damages and penalties under
the Civil False Claims Act or Racketeer Influenced and Corrupt Organization
Act, as well as administrative sanctions, such as debarment from future
government contracting.
Net assets of discontinued operations reflect the estimated net
realizable value of remaining assets consisting primarily of the Union, New
Jersey facility and certain royalty receivables. The Company has reclassified
such net assets as noncurrent since current facts indicate that realization
will not occur during the current operating cycle. On May 6,1996, the Company
entered into an Agreement to sell the ESNA property in Union, New Jersey (the
"Property") to a New Jersey developer, subject to certain conditions including
(i) the developer obtaining all necessary development approvals and permits so
as to permit the construction of a 200 unit townhouse complex on the Property,
(ii) the Company obtaining applicable environmental clearances for the Property
from the New Jersey Department of Environmental Protection and (iii) the
Company demolishing and removing the building and related structures which are
currently on the Property. The Agreement calls for the developer to purchase
the Property in two (2) sections. While the closing dates for this transaction
are contingent upon the satisfaction of the aforementioned conditions and,
therefore, are not certain at this time, the Company estimates that the closing
on the first section will take place within the next 24 months and the closing
on the second section will take place within the next 36 months.
NOTE 3
As of October 1, 1995, the Company changed its accounting for certain
inventory (which comprised approximately 25% of the Company's total reported
inventory balance of $62,465 at September 30, 1995) from the last-in, first-out
(LIFO) method to the first-in, first-out (FIFO) method. As a result of changes
in the Company's manufacturing and inventory management processes, which are
attributable to a continuing emphasis on cost reduction in the automotive
industry, the Company believes that the FIFO method provides for a better
matching of inventory costs with product sales for all of the Company's
inventory. These changes include an emphasis on cost reduction programs,
promotion of production efficiencies and the implementation of inventory
reduction programs. The change from the LIFO method to the FIFO method has
been applied retroactively by restating the financial statements of prior
periods which are summarized as follows:
<TABLE>
<CAPTION>
Decrease In
Beginning Reduction Increase Decrease
Accumulated In Cost Net In Loss
Deficit Of Sales Income Per Share
----------- -------- ------ ---------
<S> <C> <C> <C> <C>
Six months ended March 31, 1995
previously reported $1,126 $163 $98 $.01
Three months ended March 31, 1995
previously reported $1,141 $138 $83 $.02
</TABLE>
- 6 -
<PAGE> 8
NOTE 4
On July 28, 1995, the Company acquired Doehler-Jarvis Inc.
("Doehler-Jarvis") for a purchase cost aggregating approximately $107,000. The
acquisition was accounted for under the purchase method of accounting. The
purchase cost and repayment of existing Doehler-Jarvis debt aggregated
approximately $218,000 and was financed through the proceeds from the private
placement of $200,000 principal amount of 11 1/8% Senior Notes Due 2005 and
cash on hand.
In July 1995, Doehler-Jarvis initiated production of lower intake
manifolds for one of its major customers (hereinafter "The Manifold Program").
The Manifold Program, subject to customer demands, is expected to produce
approximately $110,000 in revenues for the period September 30, 1995 through
September 30, 1999. In fiscal 1996, the Company finalized its purchase
accounting analysis and determined that the estimated manufacturing costs of
fulfilling the Manifold Program will exceed estimated revenues to be generated
by $10,000. Accordingly, the Company adjusted the goodwill initially recorded
at the July 28, 1995 date of acquisition of Doehler-Jarvis by $10,000 and
established a liability (accrued program costs) to reflect the operating loss
under the Manifold Program. Such accrued program costs at March 31, 1996 were
$3,061. The cost for the Manifold Program in the second quarter of fiscal year
1996 reflected an additional negative gross margin of $2,111, due to cost
overruns in excess of the established liability. The Company has entered into
intensive discussions with its customer seeking modifications to the Manifold
Program.
Pro forma unaudited results of operations for the six months ended
March 31, 1995, assuming the acquisition of Doehler-Jarvis had occurred on
October 1, 1994, are as follows:
<TABLE>
<S> <C>
Sales $445,910
Net income $ 3,099
Net loss attributable to common stockholders $ (4,434)
Net loss per share $ (.67)
</TABLE>
The summary pro forma financial data do not purport to represent what
the Company's results of operations would actually have been had the
transaction, in fact, occurred on such date or to project the Company's results
of operations at any future date or for any future period.
NOTE 5
During the six months ended March 31, 1996, the Company recorded an
increase of $7,422 in its 14 1/4% Pay-In-Kind Exchangeable Preferred Stock
("PIK Preferred Stock") and a corresponding deduction in additional
paid-in-capital to recognize (i) an accrual of 50% of the required 1996
dividend which is payable in shares of PIK Preferred Stock on September 30,
1996 and (ii) the accretion of the related difference between the fair value of
such stock at August 23, 1992 and redemption value.
NOTE 6
Loss per common share is computed by dividing net loss (after
deducting accrued dividends and accretion related to PIK Preferred Stock) by
the weighted average number of common shares outstanding. No consideration was
given to equivalent shares related to stock options since such shares are
anti-dilutive.
- 7 -
<PAGE> 9
NOTE 7
The Company is also a party to various claims and routine litigation
arising in the normal course of its business. Based on information currently
available, management of the Company believes, after consultation with legal
counsel, that the result of such claims and litigation, except for the
uncertainties related to ESNA discussed in Note 2, will not have a material
effect on the financial position or results of operations of the Company.
NOTE 8
The differences between the statutory federal income tax rate and the
Company's effective income tax rates result principally from the fact of having
an operating profit in Canada and an operating loss in the U.S.
NOTE 9
As of March 31, 1996, the Company had $18,000 of revolving working
capital loans outstanding pursuant to its Credit Agreement. Because the
Company anticipates utilizing such working capital loans over the next twelve
months and the Credit Agreement expires on September 30, 1998, the Company has
classified the outstanding revolving working capital loans as a long-term
liability. As a result of the adverse operating results during the quarter
ended March 31, 1996, the Company was not in compliance with the minimum
consolidated interest coverage ratio of 2.0 to 1.0, nor the maximum consolidated
total debt ratio of 3.5 to 1.0 required by its Credit Agreement. However, on
May 14, 1996, the Company obtained a "Waiver and Consent" from the lenders
under such Credit Agreement whereby the Company's non-compliance with the
March 31, 1996 financial covenants was waived. In addition, the "waiver"
provides for the Company to continue having the ability to make revolving
working capital loans, subject to "Borrowing Base" availability. The Company
anticipates negotiating an Amendment to the Credit Agreement by June 30, 1996.
NOTE 10
Both the 12% Notes and the 11 1/8% Notes are guarantied on a senior
unsecured basis, pursuant to guaranties (the Guaranties) by all of the Company's
wholly-owned direct and certain of its wholly-owned indirect domestic
subsidiaries (the Guarantors). The Notes are unconditionally guarantied,
jointly and severally, on a senior unsecured basis, by each of the Guarantors
under such Guarantor's guaranty (a Guaranty). Each Guaranty by a Guarantor is
limited in amount to an amount not to exceed the maximum amount that can be
guarantied by that Guarantor without rendering the Guaranty, as it relates to
such Guarantor, voidable under applicable law relating to fraudulent conveyance
or fraudulent transfer. As such, a Guaranty could be effectively subordinated
to all other indebtedness (including guaranties and other contingent
liabilities) of the applicable Guarantor, and, depending on the amount of such
indebtedness, a Guarantor's liability on its Guaranty could be reduced to zero.
The Company conducts all of its automotive business through and derives
virtually all of its income from its subsidiaries. Therefore, the Company's
ability to make required principal and interest payments with respect to the
Company's indebtedness (including the Notes) and other obligations depends on
the earnings of its subsidiaries and on its ability to receive funds from its
subsidiaries through dividends or other payments. The ability of its
subsidiaries to pay such dividends or make payments on intercompany indebtedness
or otherwise will be subject to applicable state laws.
Upon the sale or other disposition of a Guarantor or the sale or
disposition of all or substantially all of the assets of a Guarantor (in each
case other than to the Company or an affiliate of the Company) permitted by the
indentures governing the Notes, such Guarantor will be released and relieved
from all of its obligations under its Guaranty.
- 8 -
<PAGE> 10
The following condensed consolidating information presents:
1. Condensed balance sheets as of March 31, 1996 and
September 30, 1995 and condensed statements of operations and cash
flows for the six months ended March 31, 1996 and 1995.
2. The Parent Company and Combined Guarantor Subsidiaries with
their investments in subsidiaries accounted for on the equity method.
3. Elimination entries necessary to consolidate the Parent
Company and all of its subsidiaries.
4. The Parent Company, pursuant to the terms of an interest
bearing note with Guarantor Subsidiaries, has included in their allocation of
expenses, interest expense for the six months ended March 31, 1996 and 1995,
respectively.
The Company believes that providing the following condensed
consolidating information is of material interest to investors in the Notes and
has not presented separate financial statements for each of the Guarantors.
- 9 -
<PAGE> 11
HARVARD INDUSTRIES, INC.
CONSOLIDATING BALANCE SHEET
MARCH 31, 1996
(In thousands of dollars)
<TABLE>
<CAPTION>
Combined Combined
Parent Guarantor Non-Guarantor
Company Subsidiaries Subsidiaries Eliminations Consolidated
ASSETS --------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Current assets:
Cash and cash equivalents........................ $ 1,822 $ 936 $ 975 $ - $ 3,733
Accounts receivable, net......................... 5,371 88,876 6,596 - 100,843
Inventories...................................... 5,263 54,837 1,789 - 61,889
Prepaid expenses and other current assets........ 729 504 15 - 1,248
---------- ---------- ----------- ---------- ----------
Total current assets........................... 13,185 145,153 9,375 0 167,713
Investment in Subsidiaries......................... 326,152 45,357 - (371,509) -
Property, plant and equipment, net................. 5,017 295,404 7,413 - 307,834
Intangible assets, net............................. - 137,398 - - 137,398
Net assets of discontinued operations.............. 4,948 - - - 4,948
Intercompany receivables........................... 363,829 323,553 48,191 (735,573) -
Other assets....................................... 17,367 6,024 240 - 23,631
---------- ---------- ----------- ---------- ----------
$ 730,498 $ 952,889 $ 65,219 $(1,107,082) $ 641,524
LIABILITIES AND STOCKHOLDERS' ========== ========== =========== =========== ==========
EQUITY (DEFICIT)
Current liabilities:
Current portion of long-term debt................ $ 15 $ 2,344 $ - $ - $ 2,359
Accounts payable................................. 2,957 65,009 4,866 - 72,832
Accrued expenses ................................ 18,253 57,889 213 - 76,355
Income taxes payable ............................ 2,271 1,095 4,491 - 7,857
---------- ---------- ----------- ----------- ----------
Total current liabilities................... 23,496 126,337 9,570 0 159,403
Revolving working capital loan................... $ 18,000 $ - $ - $ - $ 18,000
Long-term debt..................................... 300,000 21,076 - - 321,076
Postretirement benefits other than
pensions......................................... - 99,490 - - 99,490
Intercompany payables.............................. 369,015 358,327 8,231 (735,573) -
Other.............................................. 5,351 21,507 2,061 - 28,919
---------- ---------- ----------- ----------- ----------
Total liabilities........................... 715,862 626,737 19,862 (735,573) 626,888
---------- ---------- ----------- ----------- ----------
PIK Preferred...................................... 107,073 - - - 107,073
---------- ---------- ----------- ----------- ----------
Stockholders' equity (deficiency):
Common stock and additional
paid-in-capital................................ 49,576 73,054 135 (73,189) 49,576
Additional minimum pension liability............. (1,836) (1,836) - 1,836 (1,836)
Foreign currency translation adjustment.......... (1,895) (1,881) (1,881) 3,762 (1,895)
Retained earnings (deficit)...................... (138,282) 256,815 47,103 (303,918) (138,282)
---------- ---------- ----------- ----------- ----------
Total stockholders' equity (deficit)........ (92,437) 326,152 45,357 (371,509) (92,437)
---------- ---------- ----------- ----------- ----------
$ 730,498 $ 952,889 $ 65,219 $ 1,107,082 $ 641,524
========== ========== =========== =========== ==========
</TABLE>
- 10 -
<PAGE> 12
HARVARD INDUSTRIES, INC.
CONSOLIDATING BALANCE SHEET
SEPTEMBER 30, 1995
(In thousands of dollars)
<TABLE>
<CAPTION>
Combined Combined
Parent Guarantor Non-Guarantor
Company Subsidiaries Subsidiaries Eliminations Consolidated
ASSETS --------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Current assets:
Cash and cash equivalents...................... $ 18,645 $ (2,180) $ 3,491 $ (31) $ 19,925
Accounts receivable, net....................... 6,138 89,589 6,987 - 102,714
Inventories.................................... 5,304 57,286 1,152 - 63,742
Net assets of discontinued operations.......... 7,621 - - - 7,621
Prepaid expenses and other current assets...... 341 1,073 1 - 1,415
---------- ---------- ---------- ---------- ----------
Total current assets......................... 38,049 145,768 11,631 (31) 195,417
Investment in Subsidiaries....................... 328,523 45,266 - (373,789) -
Property, plant and equipment, net............... 5,527 296,047 5,673 - 307,247
Intangible assets, net........................... - 132,537 - - 132,537
Intercompany receivables......................... 322,282 260,511 41,659 (624,452) -
Other assets..................................... 18,859 7,962 240 - 27,061
---------- ---------- ---------- ---------- ----------
$ 713,240 $ 888,091 $ 59,203 $ (998,272) $ 662,262
LIABILITIES AND STOCKHOLDERS' ========== ========== ========== ========== =========
EQUITY (DEFICIT)
Current liabilities:
Current portion of long-term debt.............. $ 31 $ 2,770 $ - $ - $ 2,801
Accounts payable............................... 3,273 72,089 4,340 - 79,702
Accrued expenses............................... 27,199 57,422 611 - 85,232
Income taxes payable........................... 3,133 2,428 2,715 (11) 8,265
---------- ---------- ---------- ---------- ----------
Total current liabilities.................. 33,636 134,709 7,666 (11) 176,000
Long-term debt................................... 300,000 22,000 - - 322,000
Postretirement benefits other than pensions..... - 95,642 - - 95,642
Intercompany payables............................ 337,179 284,983 2,290 (624,452) -
Other............................................ 4,980 22,234 3,961 - 31,175
---------- ---------- ---------- ---------- ----------
Total liabilities......................... 675,795 559,568 13,917 (624,463) 624,817
---------- ---------- ---------- ---------- ----------
PIK Preferred.................................... 99,651 - - - 99,651
---------- ---------- ---------- ---------- ----------
Stockholders' equity (deficiency):
Common stock and additional
paid-in-capital.............................. 56,969 73,054 135 (73,189) 56,969
Additional minimum pension liability........... (1,836) (1,836) - 1,836 (1,836)
Foreign currency translation adjustment........ (1,743) (1,727) (1,743) 3,470 (1,743)
Retained earnings (deficit).................... (115,596) 259,032 46,894 (305,926) (115,596)
---------- ---------- ---------- ---------- ----------
Total stockholders' equity (deficit)......... (62,206) 328,523 45,286 (373,809) (62,206)
---------- ---------- ---------- ---------- ----------
$ 713,240 $ 888,091 $ 59,203 $ (998,272) $ 662,262
========== ========== ========== ========== =========
</TABLE>
- 11 -
<PAGE> 13
HARVARD INDUSTRIES, INC.
CONSOLIDATING INCOME STATEMENTS OF OPERATIONS
SIX MONTHS ENDED MARCH, 1996
(In thousand of dollars)
<TABLE>
<CAPTION>
Combined Combined
Parent Guarantor Non-Guarantor
Company Subsidiaries Subsidiaries Elimination Consolidated
---------- ------------ ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Sales............................................. $ 16,644 $ 380,524 $ 14,189 $ - $ 411,357
---------- ---------- ----------- ------------ ----------
Costs and expenses:
Cost of sales................................... 15,721 356,856 12,199 - 384,776
Selling, general and administrative............. 5,323 16,872 4 - 22,199
Interest expense................................ 18,773 1,568 20 - 20,361
Other (income) expense, net..................... (18) 5,464 (188) - 5,258
Equity in (income) loss of subsidiaries........ 11,809 (368) - (11,441) -
Allocated expenses.............................. (12,278) 11,299 979 - -
---------- ---------- ---------- ----------- ----------
Total costs and expenses.................... 39,330 391,691 13,014 (11,441) 432,594
---------- ---------- ---------- ----------- ----------
Income (loss) before provision for
income taxes ................................... (22,686) (11,167) 1,175 11,441 (21,237)
Provision for income taxes........................ - 642 807 - 1,449
---------- ---------- ---------- ----------- ----------
Net income (loss)................................. $ 22,686 $ (11,809) $ 368 $ 11,441 $ (22,686)
========== ========== ========== =========== ==========
</TABLE>
- 12 -
<PAGE> 14
HARVARD INDUSTRIES, INC.
CONSOLIDATING INCOME STATEMENTS OF OPERATIONS
SIX MONTHS ENDED MARCH 31, 1995
(In thousand of dollars)
<TABLE>
<CAPTION>
Combined Combined
Parent Guarantor Non-Guarantor
Company Subsidiaries Subsidiaries Elimination Consolidated
---------- ------------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C>
Sales............................................... $ 17,046 $ 273,192 $ 17,602 $ - $ 307,840
Intercompany sales.................................. - - 8,507 (8,507) -
---------- ---------- ---------- ---------- ----------
Total sales................................... 17,046 273,192 26,109 (8,507) 307,840
---------- ---------- ---------- ---------- ----------
Costs and expenses:
Cost of sales..................................... 15,456 243,449 21,230 (8,507) 271,628
Selling, general and administrative............... 5,643 9,097 - - 14,740
Interest expense.................................. 6,815 949 5 - 7,769
Other (income) expense, net....................... (919) (241) 963 - (197)
Equity in (income) loss of
subsidiaries.................................... (11,582) (1,793) - 13,375 -
Allocated expenses................................ (6,638) 6,146 492 -
---------- ---------- ---------- ---------- ----------
Total costs and expenses...................... 8,775 257,607 22,690 4,868 293,940
---------- ---------- ---------- ---------- ----------
Income (loss) before income taxes................... 8,271 15,585 3,419 (13,375) 13,900
Provision for income taxes.......................... - 4,003 1,626 - 5,629
---------- ---------- ---------- ---------- ----------
Net income (loss)................................ $ 8,271 $ 11,582 $ 1,793 $ (13,375) $ 8,271
========== ========== ========== ========== =========
</TABLE>
- 13 -
<PAGE> 15
HARVARD INDUSTRIES, INC.
CONSOLIDATING STATEMENT OF CASH FLOWS
SIX MONTHS ENDED MARCH 31, 1996
(In thousands of dollars)
<TABLE>
<CAPTION>
Combined Combined
Parent Guarantor Non-Guarantor
Company Subsidiaries Subsidiaries Elimination Consolidated
---------- ------------ ------------ ----------- ------------
<S> <C> <C> <C> <C> <C>
Cash flows related to operating activities:
Net income (loss)........................................ $ (22,686) (11,809) 368 11,441 $ (22,686)
Add back (deduct) items not affecting
cash and cash equivalents:
Equity in (income) loss of subsidiaries................ 11,809 (368) - (11,441) -
Depreciation and amortization.......................... 1,790 23,608 503 - 25,901
Loss on disposition of property, plant and
equipment and property held for sale.................. - 982 - - 982
Postretirement benefits................................ - 3,848 - - 3,848
Changes in operating assets and liabilities:
Accounts receivable.................................... 767 713 391 - 1,871
Inventories............................................ 41 2,449 (637) - 1,853
Other current assets................................... (388) 569 (14) - 167
Accounts payable....................................... (316) (7,080) 526 - (6,870)
Accrued expenses and income taxes payable.............. (17,584) (843) 2,352 11 (16,064)
Other noncurrent liabilities........................... 474 - - 474
----------- ---------- ---------- --------- ----------
Net cash provided by operations.................. (26,567) 12,543 3,489 11 (10,524)
----------- ---------- ---------- --------- ----------
Cash flows related to investing activities:
Acquisition of property, plant and equipment............. 22 (18,489) (2,320) - (20,787)
Proceeds to date from sale of discontinued operations.... 2,673 - - - 2,673
Proceeds from disposition of property, plant and equipment - 663 - - 663
Net change in other noncurrent accounts................... (472) 2,581 (3,199) 20 (1,070)
----------- ---------- ---------- ---------- ----------
Net cash provided by (used in) investing activities......... 2,223 (15,245) (5,519) 20 (18,521)
----------- ---------- ---------- ---------- ----------
Cash flows related to financing activities:
Proceeds from exercise of stock options................... 29 - - - 29
Net borrowings under revolving working capital loan....... 18,000 - - - 18,000
Repayments of long-term debt.............................. (16) (1,350) - - (1,366)
Pension fund payment pursuant to PBGC settlement agreement - (3,000) - - (3,000)
Payment of EPA settlement agreements...................... (781) (134) 105 - (810)
Net changes in intercompany balances...................... (9,711) 10,302 (591) - -
------------ ----------- ---------- ---------- ----------
Net cash provided by (used in) financing activities........ 7,521 5,818 (486) - 12,853
------------ ----------- ---------- ---------- ----------
Net increase (decrease) in cash and cash equivalents........ (16,823) 3,116 (2,516) 31 (16,192)
Cash and cash equivalents :
Beginning of period....................................... 18,645 (2,180) 3,491 (31) 19,925
----------- ----------- ---------- ---------- ----------
End of period.............................................$ 1,822 $ 936 $ 975 $ - $ 3,733
============ =========== ========== ========== ==========
</TABLE>
- 14 -
<PAGE> 16
HARVARD INDUSTRIES, INC.
CONSOLIDATING STATEMENT OF CASH FLOWS
SIX MONTHS ENDED MARCH 31, 1995
(In thousands of dollars)
<TABLE>
<CAPTION>
Combined Combined
Parent Guarantor Non-Guarantor
Company Subsidiaries Subsidiaries Elimination Consolidated
---------- ------------ ------------ ----------- -------------
<S> <C> <C> <C> <C> <C>
Cash flows related to operating activities:
Net income (loss)............................................ $ 8,271 $ 11,582 $ 1,793 $ (13,375) $ 8,271
Add back (deduct) items not affecting
cash and cash equivalents:
Income tax allocation charge............................... - 3,665 - - 3,665
Equity in (income) loss of subsidiaries.................... (11,582) (1,793) - 13,375 -
Depreciation and amortization.............................. 1,441 13,293 639 - 15,373
Disposition of property, plant and
equipment and property held for sale...................... - 683 - - 683
Postretirement benefits.................................... - 1,800 - - 1,800
Changes in operating assets and liabilities :
Accounts receivable........................................ (2,178) (4,154) 285 - (6,047)
Inventories................................................ (741) 5,489 809 - 5,557
Other current assets....................................... (899) 156 (8) - (751)
Accounts payable........................................... 1,480 3,541 (185) - 4,836
Accrued expenses and income taxes payable.................. (11,804) (771) (3,824) 25 (16,374)
---------- ---------- ---------- ---------- ----------
Net cash provided by (used in) operations.................. (16,012) 33,491 (491) 25 17,013
---------- ---------- ---------- ---------- ---------
Cash flows related to investing activities:
Acquisition of property, plant and equipment................. (35) (7,652) - - (7,687)
Proceeds to date from sale of discontinued operations........ 4,224 - 625 (625) 4,224
Proceeds from disposition of property,
plant and equipment........................................ - 928 - - 928
Net change in other noncurrent accounts...................... (1,542) 244 1,112 683 497
---------- ---------- ---------- --------- --------
Net cash provided by (used in) investing activities............ 2,647 (6,480) 1,737 58 (2,038)
---------- ---------- ---------- --------- --------
Cash flows related to financing activities:
Proceeds from exercise of stock options...................... 2,400 - - - 2,400
Repayments of long-term debt................................. (1,131) (3,684) - - (4,815)
Pension fund payment pursuant to PBGC settlement agreement... - (3,000) - - (3,000)
Net changes in intercompany balances......................... 10,857 (9,660) (1,197) - -
---------- ---------- ---------- --------- --------
Net cash provided by (used in) financing activities........... 12,126 (16,344) (1,197) 0 (5,415)
---------- ---------- ---------- --------- --------
Net increase (decrease) in cash and cash equivalents........... (1,239) 10,667 49 83 9,560
Cash and cash equivalents :
Beginning of period.......................................... 4,218 54,417 1,839 (114) 60,360
---------- ---------- ---------- ---------- ----------
End of period................................................ $ 2,979 $ 65,084 $ 1,888 $ (31) $ 69,920
========== ========== ========== ========== ==========
</TABLE>
- 15 -
<PAGE> 17
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
(IN THOUSANDS OF DOLLARS)
FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking
statements. Additional written or oral forward-looking statements may be made
by the Company from time to time, in filings with the Securities and Exchange
Commission or otherwise. Such forward-looking statements are within the
meaning of that term in Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934. Such statements may include, but
not be limited to, projections of revenues, income or losses, capital
expenditures, plans for future operations, financing needs or plans, plans
relating to products or services of the Company, as well as assumptions
relating to the foregoing.
Forward-looking statements are inherently subject to risks and
uncertainties, some of which cannot be predicted or quantified. Future events
and actual results could differ materially from those set forth in, contemplated
by, or underlying the forward-looking statements. Statements in this Quarterly
Report, particularly the Notes to Consolidated Financial Statements and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," describe factors, among others, that could contribute to or cause
such differences.
GENERAL
The volume of the Company's business has changed significantly due
principally to the acquisition of Doehler- Jarvis on July 28, 1995. The
acquisition was accounted for under the purchase method of accounting and,
accordingly, this operation is reflected in the consolidated financial results
of the Company only since the date of acquisition. For this reason, comparison
of financial results may not be meaningful.
The Company's results of operations have been adversely impacted
during the three and six months ended March 31, 1996 by the following
conditions: decline in large passenger car sales, the effects of the March 1996
General Motors "GM" strike, adverse weather conditions in January and February
1996, increased launch costs related to new and replacement business, and
losses related to two of the Doehler-Jarvis Programs with one of its major
customers which were launched in fiscal 1995. During the three months ended
March 31, 1996, the cost of sales exceeded revenues (negative gross margin) for
Doehler-Jarvis, primarily reflecting continued losses under the Manifold
Program and a program for Bell Housings ("the Programs"). Presently, the
Company is in intensive discussions with one of its major customers seeking
modifications to these Programs.
RESULTS OF OPERATIONS
Six Months Ended March 31, 1996 Compared to Six Months Ended March 31, 1995
Sales. Excluding $149,000 of Doehler-Jarvis sales, consolidated sales
decreased $46,000. The automotive accessories segment sales accounted for 96%
and 95%, respectively, of consolidated sales for the six months ended March
31, 1996 and 1995. Automotive component sales, excluding $145,000 of such
sales by Doehler-Jarvis, decreased $44,000, of which $17,000 was due to lower
volumes for existing light vehicle platforms, principally for passenger cars,
$11,000 due to the effects of the March 1996 Strike at GM and $16,000
attributable to the inclusion in 1995 of sales to Ford phased out in June
1995, as previously disclosed. Nonautomotive sales decreased $402 due to a
decrease in furniture sales.
- 16 -
<PAGE> 18
Gross Profit. The consolidated gross profit expressed as a percentage
of sales (the "gross profit margin") decreased from 11.8% to 6.5%. The gross
profit margin of the automotive segment decreased from 11.9% to 6.5%. However,
excluding Doehler-Jarvis' gross profit margin, the automotive segment would
have decreased from 11.9% to 6.8%. The decrease in the gross profit margin was
due principally to the lower passenger car sales mentioned above, effects of
the March 1996 GM Strike, January and February 1996 adverse weather conditions,
and excess launch costs for new and replacement products. Doehler-Jarvis
had sales of the Programs aggregating $22,000 for which a negative gross
margin of $3,200 was incurred. The nonautomotive segment had a decrease in
gross profit of $684, due principally to the fact that the prior year's gross
profit included a one time favorable settlement with a supplier amounting to
$475, as well as a product mix change in 1996.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $2,633, or 20.7% , after excluding $6,826 of
such expenses of Doehler-Jarvis, and due to the fact that 1996 does not include
any bonus provision with respect to the Company's key management and operating
personnel, as compared to $2,000 in 1995. The current year includes salary
increases and additional nonautomotive selling costs incurred to penetrate the
mass merchandising furniture market. As a percentage of sales, such
consolidated expenses were 5.4% and 4.8% for the six months ended March 31,
1996 and 1995, respectively.
Interest Expense. Interest expense increased from $7,769 to $20,361
for the six months ended March 31, 1996. The increase in interest expense was
the result of the issuance in July 1995 of the 11 1/8% Senior Notes, capital
leases which were assumed in the Doehler-Jarvis acquisition and the revolving
working capital loans under its Credit Agreement.
Other (income) Expense, Net. The change in this caption was due,
principally, to the increase in goodwill amortization of $4,372 due to the
acquisition of Doehler-Jarvis and the reduction in interest income due to the
use of approximately $26,300 of cash on hand in the acquisition of
Doehler-Jarvis.
Provision for Income Taxes. The differences between the statutory
federal income tax rate and the Company's effective income tax rates result,
principally, from generating an operating profit in Canada and an operating
loss in the U.S.
Net Income (Loss). Net loss for the six months ended March 31, 1996
was $22,686 compared to a net income of $8,271 in the comparable prior year six
month period. The change is because operating results (as described above),
were insufficient to cover increases in interest expense and amortization of
goodwill.
Three Months Ended March 31, 1996 Compared to Three Months Ended March 31, 1995
Sales. Excluding $75,000 of Doehler-Jarvis sales, consolidated sales
decreased $32,000. The automotive accessories segment sales accounted for 96%
and 94%, respectively, of consolidated sales for the three months ended March
31, 1996 and 1995. Automotive component sales, excluding $74,000 of such sales
by Doehler-Jarvis, decreased $30,000, of which $10,000 was due to lower volumes
for existing light vehicle platforms, principally passenger cars, $11,000 was
due to the effects of the March 1996 strike at GM and $9,000 was attributable
to the inclusion in 1995 of sales to Ford phased out in June 1995, as
previously disclosed. Doehler-Jarvis had sales of the Programs aggregating
$13,000 for which a negative gross margin of $2,600 was incurred. Nonautomotive
sales reflected a decrease in furniture sales of $2,000.
- 17 -
<PAGE> 19
Gross Profit. The consolidated gross profit expressed as a percentage
of sales (the "gross profit margin") decreased from 13.2% to 2.2%. The gross
profit margin of the automotive segment decreased from 13.7% to 2.2%. However,
if Doehler-Jarvis' negative gross margin for the quarter was eliminated, the
automotive segment would have decreased from 13.7% to 3.9%. The decrease in the
gross profit margin was due principally to the lower passenger car sales volumes
mentioned above, the effects of the March 1996 GM strike, January and February
weather related problems and excess launch costs for new and replacement
products. Cost of sales exceeded revenues for Doehler-Jarvis operations during
the second fiscal quarter as a result of losses incurred related to the Programs
previously discussed. Additionally, the nonautomotive segment had a decrease in
gross profit of $382, principally due to the second quarter 1996 decline in
sales volume.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $1,984, or 32.7%, after excluding $3,895 of
such expenses of Doehler-Jarvis, and due to the fact that 1996 does not include
any bonus provision with respect to the Company's key management and operating
personnel, as compared to $1,250 in 1995. The current year includes salary
increases and additional nonautomotive selling costs incurred to penetrate the
mass merchandising furniture market. As a percentage of sales, such
consolidated expenses were 5.9% and 4.6% for the three months ended March 31,
1996, and 1995, respectively.
Interest Expense. Interest expense increased from $4,054 to $10,311
for the quarter ended March 31, 1996. The increase in interest expense was the
result of the issuance in July 1995 of the 11 1/8% Senior Notes, capital leases
which were assumed in the Doehler-Jarvis acquisition, and the revolving working
capital loans under its Credit Agreement.
Other (Income) Expense, Net. The change in this caption was due,
principally, to the increase in goodwill amortization of $2,186 attributable to
the acquisition of Doehler-Jarvis and the reduction in interest income due to
the use of approximately $26,300 of cash on hand in the acquisition of
Doehler-Jarvis.
Provision for Income Taxes. The differences between the statutory
federal income tax rate and the Company's effective income tax rates result,
principally, from generating an operating profit in Canada and an operating
loss in the U.S.
Net Income (Loss). Net loss for the three months ended March 31, 1996
was $20,962 compared to a net income of $5,767 in the comparable prior year
quarter. The change is because operating results (as described above) were
insufficient to cover increased interest costs and goodwill amortization related
to the acquisition.
LIQUIDITY AND CAPITAL RESOURCES
For the six months and three months ended March 31, 1996, the Company
had negative cash flow from operations of $10,524 and $20,361, respectively.
Proceeds from the sale of discontinued operations and a sale of a building
generated cash of $3,336 during the six months ended March 31, 1996. The
negative cash flow from operations for the three months ended March 31, 1996
resulted in requirements for the Company to borrow under its Credit Agreement.
At March 31, 1996, such working capital loans amounted to $18,000. These
working capital loans, together with cash on hand at September 30, 1995, were
used primarily to fund working capital needs, the purchase of property, plant
and equipment of $20,787, to meet debt service obligations (principal and
interest) of $20,008, and to fund pension payments pursuant to the PBGC
settlement agreement and EPA payments of $3,810. The Company had a deficiency
of earnings over fixed charges and dividends on preferred stock of $28,659 and
$24,125, respectively, for the six months and three months ended March 31, 1996.
- 18 -
<PAGE> 20
Capital Expenditures. Company expenditures for property, plant and
equipment during the first six months ended March 31, 1996 and 1995 were
$20,787 and $7,687, respectively, principally for machinery and equipment
required in the ordinary course of operating the Company's business.
Approximately, $7,211 of the increase in capital expenditures was attributable
to Doehler-Jarvis. The Company revised its use of anticipated funds from
operations from $45,000 to $30,000, with respect to 1996 capital expenditures
which excludes certain equipment which may be leased pursuant to operating
leases. The Company does not anticipate any material effect upon operations as
a result of such revised use of anticipated funds.
General. In addition to its debt service and capital expenditures'
requirements, the Company will have requirements during the last six months of
fiscal 1996 to fund: (i) costs associated with the ESNA matter, estimated to be
$3,000, (ii) restructuring costs of approximately $2,250, (iii) costs
associated with legal proceedings and claims relating to environmental matters
estimated to be approximately $1,000 and (iv) contributions of an additional
$3,000 to be made to certain pension plans (in addition to the Company's
minimum funding requirements with respect to each such plan).
ESNA. Although the Company has projected that the 1996 estimated cost
of the ESNA matter will not be material, the ultimate cost of disposition of
this matter, as well as the required funding of such costs, is dependent upon
future events, the outcomes of which are not determinable at the present time.
Such outcomes could have a material effect on the Company's financial
condition, results of operations and/or liquidity. If it is ultimately
determined that the deviations from specifications and certifications made in
connection therewith, constitute violations of various statutory and regulatory
provisions, the Company may, among other things, be subject to criminal
prosecution, treble damages and penalties under the Civil False Claims Act or
Racketeer Influenced and Corrupt Organization Act, as well as administrative
sanctions, such as debarment from future government contracting.
Credit Agreement. The Company borrowed under its Credit Agreement
during the second quarter and anticipates continuing to borrow working capital
for the next twelve months. Under its Credit Agreement, which expires on
September 30, 1998, the Company may borrow up to $100,000, $70,000 of which may
be used for revolving working capital loans. In this regard, the Company had
$18,000 of working capital loans outstanding as of March 31, 1996, and as of May
10, 1996, had working capital loans of $28,000 outstanding. The working
capital loans resulted from negative operating cash flow. Because the
Company anticipates continued use of working capital loans under its Credit
Agreement for the next twelve months, and the Credit Agreement expires on
September 30, 1998, the Company has classified the revolving working capital
loans as a long-term liability.
Due to the negative operating results generated during the quarter
ended March 31, 1996, the Company was not in compliance with the minimum
consolidated interest coverage ratio of 2.0 to 1.0 nor the maximum consolidated
total debt ratio of 3.5 to 1.0 required under the Credit Agreement. However, on
May 14, 1996, the Company obtained from the lenders a "Waiver and Consent" to
its Credit Agreement whereby the Company's non-compliance with the financial
covenants as of March 31, 1996 was waived. The Company continues to have the
ability to make revolving working capital loans, subject to "Borrowing Base"
availability. The Company anticipates negotiating by June 30, 1996 an Amendment
to the Credit Agreement to modify future financial covenants. Borrowings
available under the existing Credit Agreement are anticipated to provide
necessary liquidity through fiscal year 1997.
PIK Preferred Stock. The Company continues to explore various financing
alternatives, including capital market alternatives with respect to its 14 1/4%
PIK Preferred Stock outstanding, which shares are required to be redeemed on or
before November 16, 1998. If the Company fails to redeem the PIK Preferred
Stock on said date, or otherwise fails to make a dividend payment, then the
number of directors constituting the Board shall be increased by two and the
outstanding shares of the PIK Preferred Stock shall vote as a class, with each
shareholder entitled to one vote, to elect two Directors to fill such newly
created directorships.
- 19 -
<PAGE> 21
Outlook for Third Quarter. The Company currently expects that sales,
operating income and cash flow for the third quarter ending June 30, 1996 will
again be negatively impacted by the continued reduction and inconsistent demands
for large passenger cars, as compared to last year's third quarter. The Company
also expects continuation of losses on the Programs, subject to obtaining
modifications from its customer, currently the subject of discussions. These
factors will require the Company to continue to use working capital loans to
fund operations. While the Company anticipates that the discussions will result
in favorable modifications of the Programs, there is no assurance that there
will be favorable modifications or the extent of such modifications, if any.
- 20 -
<PAGE> 22
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
As previously disclosed, a complaint was filed in the United States
District Court, Central District of California, in May, 1995, entitled VSI
Corporation d/b/a/Harco vs. Harvard Industries, Inc. d/b/a ESNA, and Does 1 -
50. The complaint alleged that as a result of certain actions at the Company's
discontinued ESNA division, including the facts discussed in Note 2 of the
notes to consolidated financial statements as of and for the period ended March
31, 1996 and 1995, included in this report, the Harco Division of VSI
Corporation ("Harco") was damaged and sought damages, including treble damages
under the Federal Racketeer Influenced and Corrupt Organizations Act, in an
amount to be determined at trial. In April, 1996, the Company and Harco
negotiated a settlement whereby the Company paid Harco cash and forgave
accounts receivable (in an aggregate amount that is not material to the
Company) and, the Company agreed to indemnify Harco against future claims
relating to the ESNA matter, if any, that may be asserted against Harco by its
customers, and to indemnify Harco for certain future costs, if any, that may
result from non-performance by the Company's sub-contractor in filling Harco's
orders. As part of the settlement, Harco dismissed its complaint against the
Company and the proceedings are now concluded.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
On March 18, 1996, the Company held an Annual Meeting of Shareholders
at which the following action was taken:
1. The following individuals were elected at the meeting (with the voting
results reflected for each such individual) to serve until the next
Annual Meeting and until their successors are elected and qualified:
<TABLE>
<CAPTION>
ABSTENTIONS
AND BROKER
FOR WITHHELD NON-VOTES
----------- -------- ---------
<S> <C> <C> <C>
Vincent J. Naimoli 6,122,638 900 900
John W. Adams 6,122,638 900 900
C. Scott Bartlett, Jr. 6,122,638 900 900
Joseph P. Hoar 6,122,638 900 900
Michael Hoffman 6,095,338 28,200 900
</TABLE>
2. A proposal to amend the Restated Certificate of Incorporation of the
Company to increase the number of authorized shares of Common Stock,
par value $.01 per share, from 15,000,000 shares to 30,000,000 shares:
6,055,038 shares were voted "For" the proposal, 67,600 shares were
voted "Against" the proposal, and 900 shares abstained or otherwise
represented broker non-votes.
3. A proposal to change the Company's state of incorporation from
Delaware to Florida through a merger of the Company with a
newly-formed and wholly-owned Florida subsidiary: 4,557,124 shares
were voted "For" the proposal, 109,800 shares were voted "Against" the
proposal, and 1,300 shares abstained or otherwise represented broker
non-votes.
4. A proposal to adopt the Company's 1995 Employee Stock Purchase Plan:
4,660,404 shares were voted "For"the proposal, 2,830 shares were voted
"Against" the proposal, and 1,100 shares abstained or otherwise
represented broker non-votes.
- 21 -
<PAGE> 23
5. A proposal to adopt the Company's Stock Plan for Non-Employee
Directors: 4,633,214 shares were voted "For" the proposal, 37,330
shares were voted "Against" the proposal, and 2,540 shares abstained
or otherwise represented broker non-votes.
ITEM 5. OTHER INFORMATION.
The Ratio of Earnings to Fixed Charges and Dividends on Preferred
Stock, and the supporting computation thereof, are filed as Exhibit 12.1 to
this Quarterly Report on Form 10-Q and are incorporated herein by reference.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits:
3.1 Articles of Merger, dated as March 20, 1996, between Harvard
Industries, Inc. and Harvard Merger Corporation, and filed with the
Secretary of State of Florida on March 22, 1996.
3.2 Certificate of Merger of Harvard Industries, Inc. into Harvard Merger
Corporation, dated as of March 20, 1996, and filed with the Secretary
of State of Delaware on March 25, 1996.
3.3 Articles of Incorporation of Harvard Industries, Inc. (incorporated
under the name of Harvard Merger Corporation), and filed with the
Secretary of State of Florida on February 8, 1996.
3.4 Amendment to Articles of Incorporation of Harvard Industries, Inc. and
filed with the Secretary of State of Florida on March 22, 1996.
3.5 By-Laws of Harvard Industries, Inc..
10. Amendment No. 1, Waiver and Consent, dated as of March 31, 1996, to
the Credit Agreement, dated as of July 28, 1995, among the Company and
certain of its subsidiaries with Chemical Bank, for itself and as
agent for the other lenders party thereto.
12.1 Computation of Ratio of Earnings to Fixed Charges and Dividends on
Preferred Stock.
27. Financial Data Schedule (for SEC use only)
(b) Reports on Form 8-K:
None
- 22 -
<PAGE> 24
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION PAGE NO.
3.1 Articles of Merger, dated as of March 20, 1996, between Harvard
Industries, Inc. and Harvard Merger Corporation, and filed with
the Secretary of State of Florida on March 22, 1996.
3.2 Certificate of Merger of Harvard Industries, Inc. into Harvard
Merger Corporation, dated as of March 20, 1996, and filed with
the Secretary of State of Delaware on March 25, 1996.
3.3 Articles of Incorporation of Harvard Industries, Inc. (incorporated
under the name of Harvard Merger Corporation), and filed with the
Secretary of State of Florida on February 8, 1996.
3.4 Amendment to Articles of Incorporation of Harvard Industries,
Inc. and filed with the Secretary of State of Florida on March 22,
1996.
3.5 By-Laws of Harvard Industries, Inc..
10. Amendment No. 1, Waiver and Consent, dated as of March 31, 1996, to
the Credit Agreement dated as of July 28, 1995, among the Company and
certain of its subsidiaries with Chemical Bank, for itself and as
agent for the other lenders party thereto.
12.1 Computation of Ratio of Earnings to Fixed Charges and Dividends on
Preferred Stock.
27. Financial Data Schedule (for SEC use only)
- 23 -
<PAGE> 25
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto authorized.
HARVARD INDUSTRIES, INC.
-----------------------------------------
(Registrant)
May 14, 1996 /s/ Joseph J. Gagliardi
-----------------------------------------
Joseph J. Gagliardi
Vice President Finance and
Chief Financial Officer
(Principal Financial Officer)
May 14, 1996 /s/ William J. Warren
-----------------------------------------
William J. Warren
Vice President and
Chief Accounting Officer
(Principal Accounting Officer)
- 24 -
<PAGE> 1
EXHIBIT 3.1
ARTICLES OF MERGER BETWEEN
HARVARD INDUSTRIES, INC.,
AND
HARVARD MERGER CORPORATION
Pursuant to Section 607.1105 of the Florida Business Corporation Act and
Section 252 of the General Corporation Law of the State of Delaware, Harvard
Merger Corporation, a Florida corporation ("Survivor") and Harvard Industries,
Inc., a Delaware corporation ("Merging Corporation"), hereby adopt the
following Articles of Merger for the purpose of effecting the merger of the
Merging Corporation into its subsidiary, the Survivor, which will be the
surviving corporation (the "Merger").
ARTICLE I
The Agreement and Plan of Merger effecting the Merger of the Merging
Corporation with and into the Survivor is attached hereto and made a part of
these Articles of Merger as Exhibit "A".
ARTICLE II
The name of the surviving corporation is Harvard Merger Corporation which,
pursuant to the Agreement and Plan of Merger, will change its name from and
after the effective date, as hereinafter provided, to Harvard Industries, Inc.
ARTICLE III
The effective date of the Merger shall be upon the filing of these
Articles of Merger with the Secretary of State of Florida.
ARTICLE IV
The Agreement and Plan of Merger was adopted by the unanimous written
consent of the Board of Directors of Survivor on February 9, 1996 and by the
written consent of Merging Corporation, as the sole shareholder of Survivor, on
behalf of Survivor on February 9, 1996. The Agreement and Plan of Merger was
adopted by the unanimous written consent of the Board of Directors of Merging
Corporation and by the affirmative vote of the holders of a majority of the
aggregate number of outstanding shares of Common Stock of Merging Corporation
on March 18, 1996.
<PAGE> 2
IN WITNESS WHEREOF, the undersigned has executed this document as of the
20th day of March, 1996.
HARVARD MERGER CORPORATION, a
Florida corporation
By:
---------------------------------
Title: President
HARVARD INDUSTRIES, INC., a Delaware
corporation
By:
---------------------------------
Title: Vice President
<PAGE> 3
EXHIBIT "A"
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER dated March 20, 1996 (the "Agreement"),
is entered into between Harvard Merger Corporation, a Florida corporation
("Harvard-Florida"), and Harvard Industries, Inc., a Delaware corporation
("Harvard-Delaware").
BACKGROUND
Harvard-Delaware has an aggregate authorized capital stock of (i)
15,000,000 shares of Common Stock, par value $.01 per share (the
"Harvard-Delaware Common Stock"), of which, as of February 1, 1996, 6,994,907
shares were issued and outstanding, (ii) 12,000,000 shares of Pay-in-Kind
Exchangeable Preferred Stock, par value $.01 per share (the "Harvard-Delaware
PIK Preferred"), of which, as of February 1, 1996, 4,035,000 shares were issued
and outstanding, (iii) 500,000 shares of Series A Junior Preferred Stock, par
value $.01 per share, of which, as of February 1, 1996, no shares were issued
and outstanding, and (iv) 2,500,000 shares of Preferred Stock, par value $.01
per share, of which, as of February 1, 1996, no shares were issued and
outstanding.
Harvard-Florida has an aggregate authorized capital stock of (i)
15,000,000 shares of Common Stock, par value of $.01 per share (the
"Harvard-Florida Common Stock"), of which 100 shares were duly issued and are
now outstanding, and held by Harvard-Delaware, (ii) 12,000,000 shares of
Pay-in-Kind Exchangeable Preferred Stock, par value $.01 per share (the
"Harvard-Florida PIK Preferred"), of which, as of February 1, 1996, no shares
were issued and outstanding, (iii) 500,000 shares of Series A Junior Preferred
Stock, par value $.01 per share, of which, as of February 1, 1996, no shares
were issued and outstanding, and (iv) 2,500,000 shares of Preferred Stock, par
value $.01 per share, of which, as of February 1, 1996, no shares were issued
and outstanding.
The respective Boards of Directors of Harvard-Florida and Harvard-
Delaware believe that the best interests of Harvard-Florida and
Harvard-Delaware and their respective stockholders will be served by the merger
of Harvard-Delaware with and into Harvard-Florida under and pursuant to the
provisions of this Agreement and the Delaware General Corporation Law and the
Florida Business Corporation Act.
AGREEMENT
In consideration of the mutual agreements contained in this Agreement, the
parties hereto agree as set forth below.
1. Merger. Harvard-Delaware shall be merged with and into
Harvard-Florida (the "Merger").
<PAGE> 4
2. Effective Date. The Merger shall become effective immediately
upon the later of the filing of this Agreement or a certificate of merger with
the Secretary of State of Delaware in accordance with the Delaware General
Corporation Law and the filing of articles of merger with the Secretary of
State of Florida in accordance with the Florida Business Corporation Act. The
time of such effectiveness is hereinafter called the "Effective Date."
3. Surviving Corporation. Harvard-Florida shall be the surviving
corporation of the Merger and shall continue to be governed by the laws of the
State of Florida. On the Effective Date, the separate corporate existence of
Harvard-Delaware shall cease.
4. Name of Surviving Corporation. On the Effective Date, the
Articles of Incorporation of Harvard-Florida shall be amended to change the
name of Harvard-Florida to "Harvard Industries, Inc."
5. Certificate of Incorporation. Except as provided in Section 4,
the Articles of Incorporation of Harvard-Florida as it exists on the Effective
Date shall be the Articles of Incorporation of Harvard-Florida following the
Effective Date, unless and until the same shall thereafter be amended or
repealed in accordance with the laws of the State of Florida.
6. By-Laws. The By-Laws of Harvard-Florida as they exist on the
Effective Date shall be the By-Laws of Harvard-Florida following the Effective
Date, unless and until the same shall be amended or repealed in accordance with
the provisions thereof and the laws of the State of Florida.
7. Board of Directors and Officers. The members of the Board of
Directors and the officers of Harvard-Delaware immediately prior to the
Effective Date shall be the members of the Board of Directors and the
officers, respectively, of Harvard-Florida following the Effective Date, and
such persons shall serve in such offices for the terms provided by law or in
the By-Laws, or until their respective successors are elected and qualified.
8. Retirement of Outstanding Harvard-Florida Stock. On the
Effective Date, each of the 100 shares of the Harvard-Florida Common Stock
presently issued and outstanding shall be retired, and no shares of
Harvard-Florida Common Stock or other securities of Harvard-Florida shall be
issued in respect thereof.
9. Conversion of Outstanding Harvard-Delaware Stock. On the
Effective Date, each issued and outstanding share of Harvard-Delaware Common
Stock and all rights in respect thereof shall be converted into one fully-paid
and nonassessable share of Harvard-Florida Common Stock, and each certificate
representing shares of Harvard-Delaware Common Stock shall for all purposes be
deemed to evidence the ownership of the same number of shares of
Harvard-Florida Common Stock as are set forth in such certificate.
<PAGE> 5
Also on the Effective Date, each issued and outstanding share of
Harvard-Delaware PIK Preferred and all rights in respect thereof shall be
converted into one fully-paid and nonassessable share of Harvard- Florida PIK
Preferred, and each certificate representing shares of Harvard-Delaware PIK
Preferred shall for all purposes be deemed to evidence the ownership of the
same number of shares of Harvard-Florida PIK Preferred as are set forth in such
certificate. After the Effective Date, each holder of an outstanding
certificate representing shares of Harvard-Delaware capital stock may surrender
the same to Harvard-Florida's registrar and transfer agent for cancellation,
and each such holder shall be entitled to receive in exchange therefore a
certificate(s) evidencing the ownership of the same number and class of shares
of Harvard-Florida capital stock as are represented by the Harvard-Delaware
certificate(s) surrendered to Harvard-Florida's registrar and transfer agent.
10. Stock Options, Warrants, Etc. On the Effective Date, each stock
option, stock warrant, and other right to subscribe for or purchase shares of
Harvard-Delaware Common Stock shall be converted into a stock option, stock
warrant, or other right to subscribe for or purchase the same number of shares
of Harvard-Florida Common Stock, and each certificate, agreement, note or other
document representing such stock option, stock warrant, convertible debt
instrument or other right to subscribe for or purchase shares of
Harvard-Delaware Common Stock shall for all purposes be deemed to evidence the
ownership of a stock option, stock warrant, or other right to subscribe for or
purchase shares of Harvard-Florida Common Stock.
11. Rights and Liabilities of Harvard-Florida. At and after the
Effective Date, and all in the manner of and as more fully set forth in the
Florida Business Corporation Act and the Delaware General Corporation Law, the
title to all real estate and other property, or any interest therein, owned by
each of Harvard-Delaware and Harvard-Florida shall be vested in
Harvard-Florida without reversion or impairment; Harvard-Florida shall succeed
to and possess, without further act or deed, all estates, rights, privileges,
powers, and franchises, both public and private, and all of the property, real,
personal and mixed, of each of Harvard-Delaware and Harvard-Florida without
reversion or impairment; Harvard-Florida shall thenceforth be responsible and
liable for all the liabilities and obligations of each of Harvard-Delaware and
Harvard-Florida; any claim existing or action or proceeding pending by or
against Harvard-Delaware or Harvard-Florida may be continued as if the Merger
did not occur or Harvard-Florida may be substituted for Harvard-Delaware in the
proceeding; neither the rights of creditors nor any liens upon the property of
Harvard-Delaware or Harvard-Florida shall be impaired by the Merger; and
Harvard-Florida shall indemnify and hold harmless the officers and directors of
each of the parties hereto against all such debts, liabilities and duties and
against all claims and demands arising out of the Merger.
<PAGE> 6
12. Termination. This Agreement may be terminated and abandoned by
action of the respective Boards of Directors of Harvard-Delaware and
Harvard-Florida at any time prior to the Effective Date, whether before or
after approval by the stockholders of either or both of the parties hereto.
13. Amendment. The Boards of Directors of the parties hereto may
amend this Agreement at any time prior to the Effective Date; provided that an
amendment made subsequent to the approval of this Agreement by the stockholders
of either of the parties hereto shall not: (a) alter or change the number or
kind of shares to be received in exchange for or on conversion of all or any of
the shares of the parties hereto, (b) change any term of the Articles of
Incorporation of Harvard-Florida (except as contemplated below), or (c) change
any other terms or conditions of this Agreement if such change would adversely
affect the holders of any capital stock of either party hereto.
Notwithstanding the foregoing, the Articles of Incorporation of Harvard-Florida
may be amended to increase the number of shares of authorized capital stock if
such an amendment is adopted by the stockholders of Harvard-Delaware with
respect to the Articles of Incorporation of Harvard-Delaware.
14. Conditions. The obligations of the parties to consummate the
Merger are subject to the satisfaction of the following conditions: (i) no
action, suit or proceeding shall be pending before any court or quasi-judicial
or administrative agency of any federal, state or foreign jurisdiction or
before any arbitrator wherein an unfavorable injunction, judgment, order,
decree, ruling or charge would (a) prevent consummation of the Merger, (b)
cause the Merger to be rescinded following consummation, or (c) adversely
affect the business, assets, properties, operations (financial or otherwise),
or prospects of Harvard-Florida as a result of the Merger (and no such
injunction, judgment, order, decree, ruling or charge shall be in effect); and
(ii) the parties shall have received all consents of third parties that have
agreements with Harvard-Delaware and whose consent is required for the
assumption of such agreements by Harvard-Florida.
15. Governing Law. This Agreement shall in all respects be
construed, interpreted and enforced in accordance with and governed by the laws
of the State of Florida.
IN WITNESS WHEREOF, each of the parties hereto has caused this Plan and
Agreement of Merger to be executed as of the date first written above.
HARVARD MERGER CORPORATION,
a Florida corporation
By: /s/ Richard T. Dawson
-------------------------
Title: President
<PAGE> 7
HARVARD INDUSTRIES, INC.,
a Delaware corporation
By: /s/ Joseph J. Gagliardi
--------------------------
Title: Vice President
<PAGE> 1
EXHIBIT 3.2
CERTIFICATE OF MERGER
OF
HARVARD INDUSTRIES INC.
INTO
HARVARD MERGER CORPORATION
(UNDER SECTION 252 OF THE GENERAL CORPORATION LAW
OF THE STATE OF DELAWARE)
Harvard Merger Corporation hereby certifies that:
1. The name and state of incorporation of each of the constituent
business entities are:
(a) Harvard Industries, Inc., a Delaware corporation; and
(b) Harvard Merger Corporation, a Florida corporation.
2. The Agreement and Plan of Merger (the "Agreement") has been
approved, adopted, certified, executed and acknowledged by Harvard Merger
Corporation and by Harvard Industries, Inc. in accordance with the provisions
of Section 252 of the General Corporation Law of the State of Delaware
3. The name of the surviving corporation is Harvard Merger
Corporation, which, pursuant to the Agreement, will change its name from and
after the effective date, as hereinafter provided, to Harvard Industries, Inc.
4. The merger shall become effective upon the filing of this
Certificate of Merger.
5. The certificate of incorporation of Harvard Merger Corporation,
including all amendments made thereto, shall be the certificate of
incorporation of the surviving corporation.
6. The surviving corporation is a corporation of the State of
Florida.
7. The executed Agreement is on file at the principal place of
business of Harvard Merger Corporation at 2502 North Rocky Point Drive, Tampa,
Florida 33607.
8. A copy of the Agreement will be furnished by Harvard Merger
Corporation, on request and without cost, to any stockholder of Harvard
Industries, Inc. or Harvard Merger Corporation.
9. Harvard Merger Corporation hereby agrees that it may be served
with process in Delaware in any proceeding for enforcement of any obligation of
Harvard Industries, Inc., as well as for enforcement of any obligation of
Harvard Merger
<PAGE> 2
Corporation arising from the merger, including any suit or other proceeding to
enforce the right of any stockholders as determined in appraisal proceedings
pursuant to Section 262 of the General Corporation Law of the State of
Delaware, and Harvard Merger Corporation hereby irrevocably appoints the
Secretary of State of the State of Delaware as its agent to accept service of
process in any such suit or other proceedings and a copy of such process shall
be mailed by the Secretary of State to Harvard Merger Corporation at the
following address: 2502 North Rocky Point Drive, Tampa, Florida 33607.
IN WITNESS WHEREOF, Harvard Merger Corporation has caused this certificate
to be signed by Richard T. Dawson, the President of Harvard Merger Corporation,
on the 20th day of March, 1996.
HARVARD MERGER CORPORATION
By:
-----------------------
Title: President
<PAGE> 3
EXHIBIT "A"
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER dated March 20, 1996 (the "Agreement"),
is entered into between Harvard Merger Corporation, a Florida corporation
("Harvard-Florida"), and Harvard Industries, Inc., a Delaware corporation
("Harvard-Delaware").
BACKGROUND
Harvard-Delaware has an aggregate authorized capital stock of (i)
15,000,000 shares of Common Stock, par value $.01 per share (the
"Harvard-Delaware Common Stock"), of which, as of February 1, 1996, 6,994,907
shares were issued and outstanding, (ii) 12,000,000 shares of Pay-in-Kind
Exchangeable Preferred Stock, par value $.01 per share (the "Harvard-Delaware
PIK Preferred"), of which, as of February 1, 1996, 4,035,000 shares were issued
and outstanding, (iii) 500,000 shares of Series A Junior Preferred Stock, par
value $.01 per share, of which, as of February 1, 1996, no shares were issued
and outstanding, and (iv) 2,500,000 shares of Preferred Stock, par value $.01
per share, of which, as of February 1, 1996, no shares were issued and
outstanding.
Harvard-Florida has an aggregate authorized capital stock of (i)
15,000,000 shares of Common Stock, par value of $.01 per share (the
"Harvard-Florida Common Stock"), of which 100 shares were duly issued and are
now outstanding, and held by Harvard-Delaware, (ii) 12,000,000 shares of
Pay-in-Kind Exchangeable Preferred Stock, par value $.01 per share (the
"Harvard-Florida PIK Preferred"), of which, as of February 1, 1996, no shares
were issued and outstanding, (iii) 500,000 shares of Series A Junior Preferred
Stock, par value $.01 per share, of which, as of February 1, 1996, no shares
were issued and outstanding, and (iv) 2,500,000 shares of Preferred Stock, par
value $.01 per share, of which, as of February 1, 1996, no shares were issued
and outstanding.
The respective Boards of Directors of Harvard-Florida and Harvard-
Delaware believe that the best interests of Harvard-Florida and
Harvard-Delaware and their respective stockholders will be served by the merger
of Harvard-Delaware with and into Harvard-Florida under and pursuant to the
provisions of this Agreement and the Delaware General Corporation Law and the
Florida Business Corporation Act.
AGREEMENT
In consideration of the mutual agreements contained in this Agreement, the
parties hereto agree as set forth below.
10. Merger. Harvard-Delaware shall be merged with and into
Harvard-Florida (the "Merger").
<PAGE> 4
11. Effective Date. The Merger shall become effective immediately
upon the later of the filing of this Agreement or a certificate of merger with
the Secretary of State of Delaware in accordance with the Delaware General
Corporation Law and the filing of articles of merger with the Secretary of
State of Florida in accordance with the Florida Business Corporation Act. The
time of such effectiveness is hereinafter called the "Effective Date."
12. Surviving Corporation. Harvard-Florida shall be the surviving
corporation of the Merger and shall continue to be governed by the laws of the
State of Florida. On the Effective Date, the separate corporate existence of
Harvard-Delaware shall cease.
13. Name of Surviving Corporation. On the Effective Date, the
Articles of Incorporation of Harvard-Florida shall be amended to change the
name of Harvard-Florida to "Harvard Industries, Inc."
14. Certificate of Incorporation. Except as provided in Section 4,
the Articles of Incorporation of Harvard-Florida as it exists on the Effective
Date shall be the Articles of Incorporation of Harvard-Florida following the
Effective Date, unless and until the same shall thereafter be amended or
repealed in accordance with the laws of the State of Florida.
15. By-Laws. The By-Laws of Harvard-Florida as they exist on the
Effective Date shall be the By-Laws of Harvard-Florida following the Effective
Date, unless and until the same shall be amended or repealed in accordance with
the provisions thereof and the laws of the State of Florida.
16. Board of Directors and Officers. The members of the Board of
Directors and the officers of Harvard-Delaware immediately prior to the
Effective Date shall be the members of the Board of Directors and the
officers, respectively, of Harvard-Florida following the Effective Date, and
such persons shall serve in such offices for the terms provided by law or in
the By-Laws, or until their respective successors are elected and qualified.
17. Retirement of Outstanding Harvard-Florida Stock. On the
Effective Date, each of the 100 shares of the Harvard-Florida Common Stock
presently issued and outstanding shall be retired, and no shares of
Harvard-Florida Common Stock or other securities of Harvard-Florida shall be
issued in respect thereof.
18. Conversion of Outstanding Harvard-Delaware Stock. On the
Effective Date, each issued and outstanding share of Harvard-Delaware Common
Stock and all rights in respect thereof shall be converted into one fully-paid
and nonassessable share of Harvard-Florida Common Stock, and each certificate
representing shares of Harvard-Delaware Common Stock shall for all purposes be
deemed to evidence the ownership of the same number of shares of
Harvard-Florida Common Stock as are set forth in such certificate.
<PAGE> 5
Also on the Effective Date, each issued and outstanding share of
Harvard-Delaware PIK Preferred and all rights in respect thereof shall be
converted into one fully-paid and nonassessable share of Harvard- Florida PIK
Preferred, and each certificate representing shares of Harvard-Delaware PIK
Preferred shall for all purposes be deemed to evidence the ownership of the
same number of shares of Harvard-Florida PIK Preferred as are set forth in such
certificate. After the Effective Date, each holder of an outstanding
certificate representing shares of Harvard-Delaware capital stock may surrender
the same to Harvard-Florida's registrar and transfer agent for cancellation,
and each such holder shall be entitled to receive in exchange therefore a
certificate(s) evidencing the ownership of the same number and class of shares
of Harvard-Florida capital stock as are represented by the Harvard-Delaware
certificate(s) surrendered to Harvard-Florida's registrar and transfer agent.
19. Stock Options, Warrants, Etc. On the Effective Date, each stock
option, stock warrant, and other right to subscribe for or purchase shares of
Harvard-Delaware Common Stock shall be converted into a stock option, stock
warrant, or other right to subscribe for or purchase the same number of shares
of Harvard-Florida Common Stock, and each certificate, agreement, note or other
document representing such stock option, stock warrant, convertible debt
instrument or other right to subscribe for or purchase shares of
Harvard-Delaware Common Stock shall for all purposes be deemed to evidence the
ownership of a stock option, stock warrant, or other right to subscribe for or
purchase shares of Harvard-Florida Common Stock.
20. Rights and Liabilities of Harvard-Florida. At and after the
Effective Date, and all in the manner of and as more fully set forth in the
Florida Business Corporation Act and the Delaware General Corporation Law, the
title to all real estate and other property, or any interest therein, owned by
each of Harvard-Delaware and Harvard-Florida shall be vested in Harvard-Florida
without reversion or impairment; Harvard-Florida shall succeed to and possess,
without further act or deed, all estates, rights, privileges, powers, and
franchises, both public and private, and all of the property, real, personal
and mixed, of each of Harvard-Delaware and Harvard-Florida without reversion or
impairment; Harvard-Florida shall thenceforth be responsible and liable for all
the liabilities and obligations of each of Harvard-Delaware and
Harvard-Florida; any claim existing or action or proceeding pending by or
against Harvard-Delaware or Harvard-Florida may be continued as if the Merger
did not occur or Harvard-Florida may be substituted for Harvard-Delaware in the
proceeding; neither the rights of creditors nor any liens upon the property of
Harvard-Delaware or Harvard-Florida shall be impaired by the Merger; and
Harvard-Florida shall indemnify and hold harmless the officers and directors of
each of the parties hereto against all such debts, liabilities and duties and
against all claims and demands arising out of the Merger.
<PAGE> 6
21. Termination. This Agreement may be terminated and abandoned by
action of the respective Boards of Directors of Harvard-Delaware and
Harvard-Florida at any time prior to the Effective Date, whether before or
after approval by the stockholders of either or both of the parties hereto.
22. Amendment. The Boards of Directors of the parties hereto may
amend this Agreement at any time prior to the Effective Date; provided that an
amendment made subsequent to the approval of this Agreement by the stockholders
of either of the parties hereto shall not: (a) alter or change the number or
kind of shares to be received in exchange for or on conversion of all or any of
the shares of the parties hereto, (b) change any term of the Articles of
Incorporation of Harvard-Florida (except as contemplated below), or (c) change
any other terms or conditions of this Agreement if such change would adversely
affect the holders of any capital stock of either party hereto.
Notwithstanding the foregoing, the Articles of Incorporation of Harvard-Florida
may be amended to increase the number of shares of authorized capital stock if
such an amendment is adopted by the stockholders of Harvard-Delaware with
respect to the Articles of Incorporation of Harvard-Delaware.
23. Conditions. The obligations of the parties to consummate the
Merger are subject to the satisfaction of the following conditions: (i) no
action, suit or proceeding shall be pending before any court or quasi-judicial
or administrative agency of any federal, state or foreign jurisdiction or before
any arbitrator wherein an unfavorable injunction, judgment, order, decree,
ruling or charge would (a) prevent consummation of the Merger, (b) cause the
Merger to be rescinded following consummation, or (c) adversely affect the
business, assets, properties, operations (financial or otherwise), or prospects
of Harvard-Florida as a result of the Merger (and no such injunction, judgment,
order, decree, ruling or charge shall be in effect); and (ii) the parties shall
have received all consents of third parties that have agreements with
Harvard-Delaware and whose consent is required for the assumption of such
agreements by Harvard-Florida.
24. Governing Law. This Agreement shall in all respects be
construed, interpreted and enforced in accordance with and governed by the
laws of the State of Florida.
IN WITNESS WHEREOF, each of the parties hereto has caused this Plan
and Agreement of Merger to be executed as of the date first written above.
HARVARD MERGER CORPORATION,
a Florida corporation
By: /s/ Richard T. Dawson
------------------------
Title: President
<PAGE> 7
HARVARD INDUSTRIES, INC.,
a Delaware corporation
By: /s/ Joseph J. Gagliardi
-------------------------
Title: Vice President
<PAGE> 1
EXHIBIT 3.3
ARTICLES OF INCORPORATION
OF
HARVARD MERGER CORPORATION
The undersigned, acting as incorporator of Harvard Merger Corporation,
under the Florida Business Corporation Act, adopts the following Articles of
Incorporation.
FIRST: The name of the Corporation is Harvard Merger Corporation
(hereinafter, the "Corporation").
SECOND: The mailing address of the Corporation is 2502 North Rocky Point
Drive, Tampa, Florida 33607.
THIRD: The purpose of the Corporation is to engage in any lawful act or
activity for which a corporation may be organized under the laws of the United
States and the Florida Business Corporation Act (the "FBCA").
FOURTH: The total number of shares of all classes of capital stock which
the Corporation shall have authority to issue is thirty million (30,000,000),
consisting of fifteen million (15,000,000) shares of Common Stock, each having
a par value of $.01 per share (the "Common Stock"), twelve million (12,000,000)
shares of Pay-in-Kind Exchangeable Preferred Stock, par value $.01 per share
(the "PIK Preferred"), five hundred thousand (500,000) shares of Series A
Junior Preferred Stock, each having a par value of $.01 per share (the "Series
A Junior Preferred Stock") and two million five hundred thousand (2,500,000)
shares of Preferred Stock, par value $.01 per share (the "Preferred Stock").
The Board of Directors is expressly authorized to provide for the
issuance of all or any shares of the Preferred Stock in one or more classes or
series, and to fix for each such class or series such voting powers, full or
limited, or no voting powers, and such distinctive designations, preferences
and relative, participating, optional or other special rights and such
qualifications, limitations or restrictions thereof, as shall be stated and
expressed in the resolution or resolutions adopted by the Board of Directors
providing for the issuance of such class or series and as may be permitted by
the FBCA, including, without limitation, the authority to provide that any such
class or series may be (i) subject to redemption at such time or times and at
such price or prices; (ii) entitled to receive dividends (which may be
cumulative or non-cumulative) at such rates, on such conditions, and at such
times, and payable in preference to, or in such relation to, the dividends
payable on any other class or classes or any other series; or (iii) entitled to
such rights upon the dissolution of, or upon any distribution of the assets of,
the Corporation; all as may be stated in such resolution or resolutions.
<PAGE> 2
The following is a statement of the designations and powers,
preferences and rights, and qualifications, limitations and restrictions
thereof, in respect of the capital stock of the Corporation.
1. Common Stock. Except as otherwise required by law, the holders of
Common Stock shall be entitled to one vote per share on all matters upon which
holders of shares of Common Stock shall be entitled to vote.
2. PIK Preferred. The voting powers, preferences and relative,
participating, optional and other special rights of the PIK Preferred are as
follows:
(a) Rank. The PIK Preferred shall, with respect to dividend rights
and rights on liquidation, winding up and dissolution, rank senior to the
Corporation's Common Stock, and to all classes and series of stock of the
Corporation now or hereafter authorized, issued or outstanding which by their
terms expressly provide that they are junior to the PIK Preferred. All of the
foregoing classes of securities, other than the PIK Preferred, are hereinafter
referred to as the "Junior Securities."
(b) Dividends. The holders of shares of the PIK Preferred shall be
entitled to receive, when, as and if declared by the Board of Directors of the
Corporation, out of funds legally available therefor, dividends at the rate per
annum of $3.5625 per share, and no more, payable, at the option of the
Corporation, in cash (subject to the limitations in subparagraph 1(b) of this
Article Fourth) or in additional shares of PIK Preferred at the rate of 0.1425
share of PIK Preferred for each share of PIK Preferred. Subject to the
provisions of the following paragraph, such dividends shall be cumulative and
shall accrue from October 1, 1991 and be payable annually commencing September
30, 1992 and on September 30 annually thereafter (each of such dates being a
"Dividend Payment Date"), to holders of record at the close of business on the
date specified by the board of Directors at the time such dividend is declared
(the "Record Date"), which Record Date shall not be more than 60 days prior to
the applicable Dividend Payment Date. All dividends paid with respect to
shares of PIK Preferred shall be paid pro rata to the holders entitled thereto.
All shares of PIK Preferred issued as a dividend with respect to the PIK
Preferred will thereupon be duly authorized, validly issued, fully paid and
nonassessable.
Accrued but unpaid dividends for any past dividend periods may be
declared by the Board of Directors and paid on any date fixed by the Board of
Directors, whether or not a regular Dividend Payment Date, to holders of record
on the books of the Corporation on such record date as may be fixed by the
Board of Directors. Holders of PIK Preferred will not be entitled to any
dividends, whether payable in cash, property or stock, in excess of full
cumulative dividends provided for herein. Additional shares of PIK Preferred,
in an amount per share equal to the dividends
<PAGE> 3
accruing on issued and outstanding shares of PIK Preferred shall accrue and be
payable in respect of any accrued but unpaid dividends. Dividends payable on
the PIK Preferred which would result in fractional shares of PIK Preferred may
be paid, at the option of the Corporation, in cash (subject to the limitations
in subparagraph 1(b) of this Article Fourth) or fractional shares of PIK
Preferred. Dividends payable on the PIK Preferred for any period less than a
full annual dividend period shall be computed on the basis of a 365-day year
and the actual number of days elapsed in the period for which it is payable.
(c) Liquidation Preference. In the event of any voluntary or
involuntary liquidation, dissolution or winding up of the affairs of the
Corporation, then, before any distribution or payment shall be made to the
holders of any Junior Securities, including the Common Stock, the holders of
the PIK Preferred then outstanding shall be entitled to be paid out of the
assets of the Corporation available for distribution to its shareholders an
amount in cash equal to $25.00 for each share of PIK Preferred outstanding
(which amount is hereinafter referred to as the "Liquidation Preference"),
together with an amount in cash equal to all accrued and unpaid dividends
thereon to the date fixed for liquidation, dissolution or winding up. Except
as provided in the preceding sentence, holders of PIK Preferred shall not be
entitled to any distribution in the event of liquidation, dissolution or
winding up of the affairs of the Corporation. If the assets of the Corporation
available for distribution to its shareholders are not sufficient to pay in
full the Liquidation Preference plus accrued and unpaid dividends payable to
the holders of outstanding shares of PIK Preferred, then the holders of all
such shares shall share ratably in any distribution of assets in accordance
with the amount which would be payable on such distribution if the amounts to
which the holders of outstanding shares of PIK Preferred are entitled were paid
in full. After payment of the full amount of the Liquidation Preference plus
accrued and unpaid dividends to which each holder of PIK Preferred is entitled
as aforesaid, holders of any class or classes of Junior Securities shall be
entitled, to the exclusion of the holders of shares of PIK Preferred, to share,
according to their respective rights and preferences, in all remaining assets
of the Corporation available for distribution to its shareholders.
For the purposes of this subparagraph (2)(c) of Article Fourth,
neither the voluntary sale, conveyance, exchange or transfer (for cash, shares
of stock, securities or other consideration) of all or substantially all of the
property or assets of the Corporation nor the consolidation or merger of the
Corporation with any other corporation shall be deemed to be a voluntary or
involuntary liquidation, dissolution or winding up of the Corporation, unless
such voluntary sale, conveyance, exchange or transfer shall be pursuant to a
plan of liquidation, dissolution or winding up of the Corporation.
<PAGE> 4
(d) Redemption. To the extent the Corporation shall have funds
legally available therefor, the Corporation, at the option of the Board of
Directors, may redeem, in whole or in part, the shares of PIK Preferred at the
time outstanding, at any time or from time to time, upon notice given as
hereinafter specified, at a redemption price equal to the Liquidation
Preference per share, together with accrued and unpaid dividends thereon to the
redemption date. On and after the redemption date of a share of PIK Preferred,
unless the Corporation defaults in the payment of the redemption price,
dividends will cease to accrue on shares of PIK Preferred called for redemption
and all rights of holders of such shares will terminate except for the right to
receive the redemption price.
On November 16, 1998 (the "Mandatory Redemption Date"), the
Corporation shall redeem, out of funds legally available therefor, all of the
shares of PIK Preferred outstanding, at a redemption price equal to the
outstanding Liquidation Preference per share plus all accrued and unpaid
dividends on such shares to the redemption date. In the event the Corporation
fails to redeem all of the outstanding shares of PIK Preferred on the Mandatory
Redemption Date, the outstanding shares of PIK Preferred shall have the voting
rights specified in subparagraph (2)(f) of this Article Fourth.
(e) Procedure for Redemption. In the event that less than all
outstanding shares of PIK Preferred are to be redeemed, the shares of PIK
Preferred to be redeemed shall be selected, at the option of the Corporation,
pro rata or by lot, except that the Corporation may redeem all shares held by
any holders of a number of shares of PIK Preferred not to exceed 1,000 as may
be specified by the Corporation.
In the event that the Corporation shall redeem shares of PIK
Preferred, notice of such redemption shall be mailed by first-class mail,
postage prepaid, and mailed not less than 30 days nor more than 60 days prior
to the redemption date, addressed to the holders of record of the shares to be
redeemed at their respective addresses as they shall appear on the books of the
Corporation; provided, however, that failure to give such notice or any defect
therein or in the mailing thereof shall not affect the validity of the
proceeding for the redemption of any shares so to be redeemed except as to the
holder(s) to whom the Corporation has failed to give such notice or except as
to the holder(s) to whom notice was defective. Each such notice shall state:
(i) the redemption date; (ii) the number of shares of PIK Preferred to be
redeemed and, if less than all the shares held by such holder are to be
redeemed, the number of such holder's shares to be redeemed; (iii) the
redemption price; (iv) the place or places where certificates for such shares
are to be surrendered for payment of the redemption price; and (v) that
dividends on the shares to be redeemed will cease to accrue on such redemption
date.
<PAGE> 5
Notice having been mailed as aforesaid and provided that on or before
the redemption date funds necessary for such redemption shall have been set
aside by the Corporation, separate and apart from its other funds, in trust for
the pro rata benefit of the holders of the shares so called for redemption, so
as to be and to continue to be available therefor, then, from and after the
redemption date, dividends on the shares of PIK Preferred so called for
redemption shall cease to accrue, and said shares shall no longer be deemed to
be outstanding and shall not have the status of shares of PIK Preferred, and
all rights of the holders thereof as shareholders of the Corporation (except
the right to receive the redemption price from the Corporation) shall cease.
Upon surrender in accordance with said notice of the certificates for any
shares so redeemed (properly endorsed or assigned for transfer, if the Board of
Directors of the Corporation shall so require and the notice shall so state),
such shares shall be redeemed by the Corporation at the redemption price as
aforesaid. In case fewer than all the shares represented by any such
certificate are redeemed, a new certificate or certificates shall be issued
representing the unredeemed shares without cost to the holder thereof.
(f) Voting Rights. Except as otherwise provided by law, the holders
of shares of PIK Preferred shall not be entitled to any voting rights except as
hereinafter provided in this subparagraph (2)(f).
(i) If the Corporation shall have failed to meet the mandatory
redemption obligation as provided in subparagraph (2)(d) of this Article Fourth
(the "Redemption Obligation") or shall be in arrears and have failed to pay a
dividend payment as provided in subparagraph (2)(b) of this Article Fourth (the
"Dividend Obligation"), then the number of directors constituting the Board of
Directors shall, without further action, be increased by two and the holders of
PIK Preferred shall have the exclusive right, voting separately as a class, to
elect two directors of the Corporation to fill such newly created
directorships, the remaining directors to be elected by the other class or
classes of stock entitled to vote therefor, at each meeting of shareholders
held for the purpose of electing directors.
(ii) Whenever such voting right shall have vested, such right
may be exercised initially either at a special meeting of the holders of the
PIK Preferred, called as hereinafter provided, or any annual meeting of
shareholders held for the purpose of electing directors, and thereafter at such
annual meetings. Such voting right shall continue, in the event of a failure
of a Redemption Obligation, until such time as no shares of PIK Preferred shall
remain outstanding, and, in the event of a failure of a Dividend Obligation,
until such time as all current dividends have been declared and paid on the
outstanding shares of PIK Preferred, at which time such voting right of the
holders of the PIK Preferred shall terminate
<PAGE> 6
until the next occurrence of a failure of a Redemption Obligation or a Dividend
Obligation.
(iii) At any time when such voting right shall have vested in
the holders of the PIK Preferred Stock, and if such right shall not already
have been initially exercised, a proper officer of the Corporation shall,
upon the written request of any holder of record of PIK Preferred then
outstanding, addressed to the Secretary of the Corporation, call a special
meeting of the holders of the PIK Preferred for the purpose of electing
directors. Such meeting shall be held at the earliest practicable date upon
the notice required for annual meetings of shareholders at the place for
holding annual meetings of shareholders of the Corporation or, if none, at a
place designated by the Secretary of the Corporation. If such meeting shall
not be called by a proper officer of the Corporation within 10 days after the
personal service of such written request upon the Secretary of the Corporation,
or within 10 days after mailing the same within the United States, by
registered mail, addressed to the Secretary of the Corporation at its principal
office (such mailing to be evidenced by the registry receipt issued by the
postal authorities), then the holders of record of 10% of the shares of
the PIK Preferred then outstanding may designate in writing a holder of PIK
Preferred Stock to call such meeting at the expense of the Corporation, and
such meeting may be called by such person so designated upon the notice
required for annual meetings of shareholders and shall be he at the same place
as is elsewhere provided in this subparagraph (2)(f)(iii). Any holder of the
PIK Preferred shall have access to the stock books of the Corporation for the
purpose of causing a meeting of shareholders to be called pursuant to the
provisions of this paragraph.
(iv) At any meeting held for the purpose of electing directors
at which the holders of PIK Preferred shall have the right to elect directors
as provided herein, the presence in person or by proxy of the holders of
33-1/3% of the then outstanding shares of PIK Preferred shall be required and
be sufficient to constitute a quorum of such class for the election of
directors by such class. At any such meeting or adjournment thereof (a) the
absence of a quorum of the holders of the PIK Preferred shall not prevent the
election of directors other than those to be elected by the holders of stock
of such class and the absence of a quorum or quorums of the holders of capital
stock entitled to elect such other directors shall not prevent the election of
directors to be elected by the holders of the PIK Preferred and (b) in the
absence of a quorum of the holders of any class of stock entitled to vote for
the election of directors, a majority of the holders present in person or by
proxy of such class shall have the power to adjourn the meeting for the
election of directors which the holders of such class are entitled to elect,
from time to time, without notice other than announcement at the meeting, until
a quorum shall be present.
<PAGE> 7
(v) The term of office of all directors elected by the holders
of the PIK Preferred pursuant to subparagraph (2)(f)(i) in office at any time
when the aforesaid voting rights are vested in the holders of the PIK
Preferred shall terminate upon the election of their successors at any meeting
of shareholders for the purpose of electing directors. Upon any termination of
the aforesaid voting rights the term of office of all directors elected by the
holders of the PIK Preferred pursuant to subparagraph (2(f)(i) then in office
shall thereupon terminate and upon such termination the number of directors
constituting the Board of Directors shall, without further action, be reduced
by two.
(vi) In exercising the voting rights set forth in this
subparagraph (2)(f), each outstanding share of PIK Preferred shall be
entitled to one vote.
(g) Limitation on Restricted Payments. The Corporation shall not,
so long as any shares of PIK Preferred are outstanding, (i) declare or pay any
dividend or make any distribution on account of Junior Securities (other than
dividends or distributions payable in Junior Securities or rights to acquire
Junior Securities) or (ii) repurchase any shares of Junior Securities.
(h) Reporting Requirements. The Corporation shall send to holders
of Common Stock and PIK Preferred by first-class mail, postage prepaid, to their
respective addresses as the same shall appear on the stock register of the
Corporation, the audited annual financial statements of the Corporation,
including the notes thereto and an auditor's report, within 90 days after the
end of each fiscal year, and unaudited quarterly financial statements for each
of the first three quarters in each fiscal year, within 45 days after the end
of each such quarter.
(i) Exchange. (i) The Corporation may, at its option, at any time,
exchange the Corporation's 14-1/4% Subordinated Notes due November 16, 1998
(the "Exchange Notes") for all (and not less than all) of the PIK Preferred.
Holders of outstanding shares of PIK Preferred will be entitled to receive
$25 principal amount of Exchange Notes (in denominations as set forth in the
Indenture) for each share of PIK Preferred held by them at the time of
exchange and each share of PIK Preferred accrued as a dividend on such shares
of PIK Preferred on the date of exchange, up to but not including the date of
exchange and, for any fractional share of PIK Preferred, such fraction of $25
principal amount of Exchange Notes as such fractional share is a fraction of a
whole share of PIK Preferred.
(ii) The Corporation will mail to each holder of record of the
shares of PIK Preferred written notice of its intention to exchange not less
than 30 nor more than 60 days prior to the date fixed for the exchange
(the "Exchange Date"). Such notice shall state: (A) the Exchange Date,
(B) the place or places where certificates for such shares are to be surrendered
<PAGE> 8
for exchange, and (C) that dividends on the shares to be exchanged will
cease to accrue on such Exchange Date. Prior to giving the notice of
intention to exchange, the Corporation shall authorize the Exchange Notes in
an aggregate principal amount equal to the aggregate liquidation amount of all
shares of PIK Preferred then outstanding or accrued and execute and deliver
with a bank or trust company, with capital and surplus of not less than
$50,000,000 selected by the Corporation, and qualify under the Trust Indenture
Act of 1939 (the "TIA"), if required, an indenture (the "Indenture") in
substantially the form filed as an appendix to the Corporation's Plan of
Reorganization filed in connection with its bankruptcy cases, which form is on
file with the Secretary of the Corporation, with such changes as would not
adversely affect any of the preferences, rights, powers or privileges of any
holders of the PIK Preferred, or that may be required by law (including the
TIA) or usage, except that prior to the execution of the Indenture (x) the
affirmative vote or consent of the holders of at least a majority of the
outstanding shares of PIK Preferred shall be required to approve any amendment
or supplement that would have required the written consent of the holders of
at least a majority in principal amount of the Exchange Notes pursuant to the
first sentence of Section 9.02 of the form of the Indenture; and (y) the
affirmative vote or consent of each of the holders of the PIK Preferred shall
be required to effect any amendment or supplement of any provision in the form
of the Indenture having the effects described in the third sentence of Section
9.02 of the form of the Indenture. The Exchange Notes to be issued in
exchange for the PIK Preferred shall be duly executed in exchange for the PIK
Preferred shall be duly executed and authenticated on or prior to the Exchange
Date and the Corporation will pay interest on the Exchange Notes at the rate
and on the dates specified in such Indenture from the Exchange Date.
(iii) If notice of any exchange by the Corporation pursuant to
subparagraph (2)(i) of this Article Fourth shall have been mailed as provided
therein, and if on or before the Exchange Date the Exchange Notes shall have
been duly executed and authenticated, then on and after the close of business
on the Exchange Date, the shares of PIK Preferred to be exchanged,
notwithstanding that any certificate therefor shall not have been surrendered
for cancellation, shall no longer be deemed outstanding, and all rights with
respect to such shares shall forthwith cease and terminate, except the right of
the holders thereof to receive upon surrender of their certificates the
Exchange Notes.
(j) Limitation on Preferred Stock Issuance. The Corporation shall
not, so long as any shares of PIK Preferred are outstanding, issue any shares of
Preferred Stock which: (i) specify a dividend rate in excess of 14-1/4% of the
liquidation preference of such Preferred Stock, (ii) may be redeemed or are
subject to sinking fund requirements which must be satisfied prior to the
redemption or repurchase of all outstanding shares of the
<PAGE> 9
PIK Preferred, (iii) have a mandatory redemption date prior to January 1, 1999,
or (iv) rank senior to the PIK Preferred or, unless the net proceeds of the
issuance of the Preferred Stock are used to redeem or repurchase PIK Preferred
or Exchange Notes, rank pari passu with the PIK Preferred, with respect to
dividend rights and rights on liquidation, winding up and dissolution.
3. Series A Junior Preferred Stock. The voting powers, preferences and
relative, participating, optional and other special rights of the Series A
Junior Preferred Stock are as follows:
(a) Dividends and Distributions. The holders of shares of Series A
Junior Preferred stock shall entitled to receive, when, as and if declared by
the Board of Directors out of funds legally available for the purpose,
quarterly dividends payable in cash on the last day of March, June, September
and December in each year (each such date being referred to herein as a
"Quarterly Dividend Payment Date"), commencing on the first Quarterly Dividend
Payment Date after the first issuance of a share or fraction of a share of
Series A Junior Preferred Stock, in an amount per share (rounded to the nearest
cent) equal to the greater of (a) $0.01 or (b) subject to the provision for
adjustment hereinafter set forth, 100 times the aggregate per share amount of
all cash dividends, and 100 times the aggregate per share amount (payable in
kind) of all non-cash dividends or other distributions other than a dividend
payable in shares of Common Stock or a subdivision of the outstanding shares of
Common Stock (by reclassification or otherwise), declared on the Common Stock,
par value $0.01 per share, of the Corporation (the "Common Stock") since the
immediately preceding Quarterly Dividend Payment Date, or, with respect to the
first Quarterly Dividend Payment Date, since the first issuance of any share or
fraction of a share of Series A Junior Preferred Stock. In the event the
Corporation shall at any time after October 18, 1994 (the "Rights Declaration
Date") (i) declare any dividend on Common Stock payable in shares of Common
Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such
case the amount to which holders of shares of Series A Junior Preferred Stock
were entitled immediately prior to such event under clause (b) of the preceding
sentence shall be adjusted by multiplying such amount by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
The Corporation shall declare a dividend or distribution on the Series A
Junior Preferred Stock as provided in the preceding paragraph immediately after
it declares a dividend or distribution on the Common Stock (other than a
dividend payable in shares of Common Stock); provided that, in the event no
dividend or distribution shall have been declared on the Common Stock during
the period between any Quarterly Dividend Payment Date and the next subsequent
Quarterly Dividend Payment Date, a dividend of $1.00 per
<PAGE> 10
share on the Series A Junior Preferred stock shall nevertheless be payable on
such subsequent Quarterly Dividend Payment Date.
Dividends shall begin to accrue and be cumulative on outstanding shares of
Series A Junior Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issue of such shares of Series A Junior Preferred Stock,
unless the date of issue of such shares is prior to the record date for the
first Quarterly Dividend Payment Date, in which case dividends on such shares
shall begin to accrue from the date of issue of such shares, or unless the date
of issue is a Quarterly Dividend Payment Date or is a date after the record
date for the determination of holders of shares of Series A Junior Preferred
Stock entitled to receive a quarterly dividend and before such Quarterly
Dividend Payment Date, in either of which events such dividends shall begin to
accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued
but unpaid dividends shall not bear interest. Dividends paid on the shares of
Series A Junior Preferred Stock in an amount less than the total amount of such
dividends at the time accrued and payable on such shares shall be allocated pro
rata on a share-by-share basis among all such shares at the time outstanding.
The Board of Directors may fix a record date for the determination of holders
of shares of Series A Junior Preferred Stock entitled to receive payment of a
dividend or distribution declared thereon, which record date shall be no more
than 30 days prior to the date fixed for the payment thereof.
(b) Voting Rights. Subject to the provision for adjustment
hereinafter set forth, each share of Series A Junior Preferred stock shall
entitle the holder thereof to 100 votes on all matters submitted to a vote of
the shareholders of the Corporation. In the event the Corporation shall at
any time after the Rights Declaration Date (i) declare any dividend on Common
Stock payable in shares of Common Stock, (ii) subdivide the outstanding
Common Stock, or (iii) combine the outstanding Common Stock into a smaller
number of shares, then in each such case the number of votes per share to which
holders of shares of Series A Junior Preferred Stock were entitled immediately
prior to such event shall be adjusted by multiplying such number by a fraction
the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
Except as otherwise provided herein or by law, the holders of shares
of Series A Junior Preferred Stock and the holders of shares of Common Stock
shall vote together as one class on all matters submitted to a vote of
shareholders of the Corporation.
(i) If any time dividends on any Series A Junior Preferred
Stock shall be in arrears in an amount equal to six quarterly dividends
thereon, the occurrence of such contingency shall mark the beginning of a
period (herein called a "default
<PAGE> 11
period") which shall extend until such time when all accrued and unpaid
dividends for all previous quarterly dividend periods and for the current
quarterly dividend period on all shares of Series A Junior Preferred Stock then
outstanding shall have been declared and paid or set apart for payment.
During each default period, all holders of Preferred Stock (including holders
of the Series A Junior Preferred Stock) with dividends in arrears in an amount
equal to six quarterly dividends thereon, voting as a class, irrespective of
series, shall have the right to elect two directors.
(ii) During any default period, such voting right of the holders
of Series A Junior Preferred Stock may be exercised initially at a special
meeting called pursuant to subparagraph (3)(b)(iii) or at any annual meeting
of shareholders, and thereafter at annual meetings of shareholders, provided
that such voting right shall not be exercised unless the holders of ten percent
(10%) in number of shares of Preferred Stock outstanding shall be present in
person or by proxy. The absence of a quorum of the holders of Common Stock
shall not affect the exercise by the holders of Preferred Stock of such voting
right. At any meeting at which the holders of Preferred Stock shall exercise
such voting right initially during an existing default period, they shall have
the right, voting as a class, to elect Directors to fill such vacancies, if
any, in the Board of Directors as may then exist up to two Directors or, if
such right is exercised at an annual meeting, to elect two Directors. If the
number which may be so elected at any special meeting does not amount to the
required number, the holders of the Preferred Stock shall have the right to
make such increase in the number of Directors as shall be necessary to permit
the election by them of the required number. After the holders of the
Preferred Stock shall have exercised their right to elect Directors in any
default period and during the continuance of such period, the number of
Directors shall not be increased or decreased except by vote of the holders of
Preferred Stock as herein provided or pursuant to the rights of any equity
securities ranking senior to or pari passu with the Series A Junior Preferred
Stock.
(iii) Unless the holders of Preferred Stock shall, during an
existing default period, have previously exercised their right to elect
Directors, the Board of Directors may order, or any shareholder or
shareholders owning in the aggregate not less than ten percent (10%) of the
total number of shares of Preferred Stock outstanding, irrespective of series,
may request, the calling of special meeting of the holders of Preferred Stock,
which meeting shall thereupon be called by the President, a Vice-President or
the Secretary of the Corporation. Notice of such meeting and of any annual
meeting at which holders of Preferred Stock are entitled to vote pursuant to
this subparagraph (iii) shall be given to each holder of record of Preferred
Stock by mailing a copy of such notice to him at his last address as the same
appears on the books of the Corporation.
<PAGE> 12
Such meeting shall be called for a time not earlier than 20 days and not later
than 60 days after such order or request or in default of the calling of such
meeting within 60 days after such order or request, such meeting may be called
on similar notice by any shareholder or shareholders owning in the aggregate
not less than ten percent (10%) of the total number of shares of Preferred
Stock outstanding. Notwithstanding the provisions of this subparagraph (iii),
no such special meeting shall be called during the period within 60 days
immediately preceding the date fixed for the next annual meeting of the
shareholders.
(iv) In any default period, the holders of Common Stock, and
other classes of stock of the Corporation if applicable, shall continue to be
entitled to elect the whole number of Directors until the holders of Preferred
Stock shall have exercised their right to elect two (2) Directors voting as a
class, after the exercise of which right (x) the Directors so elected by the
holders of Preferred Stock shall continue in office until their successors
shall have been elected by such holders or until the expiration of the default
period, and (y) any vacancy in the Board of Directors may (except as provided
in subparagraph 3(b)(ii)) be filled by vote of a majority of the remaining
Directors theretofore elected by the holders of the class of stock which
elected the Director whose office shall have become vacant. References in this
subparagraph (3)(b) to Directors elected by the holders of a particular class
of stock shall include Directors elected by such Directors to fill vacancies as
provided in clause (y) of the foregoing sentence.
(v) Immediately upon the expiration of a default period, (x)
the right of the holders of Preferred Stock as a class to elect Directors shall
cease, (y) the term of any Directors elected by the holders of Preferred Stock
as a class shall terminate, and (z) the number of Directors shall be such
number as may be provided for in the certificate of incorporation or by-laws
irrespective of any increase made pursuant to the provisions of subparagraph
(3)(b)(ii) (such number being subject, however, to change thereafter in any
manner provided by law or in the certificate of incorporation or by-laws).
Any vacancies in the Board of Directors effected by the provisions of clauses
(y) and (z) in the preceding sentence may be filled by a majority of the
remaining Directors.
Except as set forth herein, holders of Series A Junior Preferred stock
shall have no special voting rights and their consent shall not be required
(except to the extent they are entitled to vote with holders of Common Stock as
set forth herein) for taking any corporate action.
(c) Certain Restrictions. Whenever quarterly dividends or other
dividends or distributions payable on the Series A Junior Preferred Stock as
provided in subparagraph (3)(a) are in arrears, thereafter and until all
accrued and unpaid dividends and distributions, whether or not declared, on
shares of Series A
<PAGE> 13
Junior Preferred Stock outstanding shall have been paid in full, the
Corporation shall not
(i) declare or pay dividends on, make any other distributions
on, or redeem or purchase or otherwise acquire for consideration any shares of
stock ranking junior (either as to dividends or upon liquidation, dissolution
or winding up) to the Series A Junior Preferred Stock;
(ii) declare or pay dividends on or make any other distributions
on any shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Junior Preferred
Stock, except dividends paid ratably on the Series A Junior Preferred Stock
and all such parity stock on which dividends are payable or in arrears in
proportion to the total amounts to which the holders of all such shares are
then entitled;
(iii) redeem or purchase or otherwise acquire for consideration
shares of any stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Junior Preferred
Stock, provided that the Corporation may at any time redeem, purchase or
otherwise acquire shares of any such parity stock in exchange for shares of any
stock of the Corporation ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Series A Junior Preferred
Stock; or
(iv) purchase or otherwise acquire for consideration any shares
of Series A Junior Preferred Stock, or any shares of stock ranking on a parity
with the Series A Junior Preferred Stock, except in accordance with a purchase
offer made in writing or by publication (as determined by the Board of
Directors) to all holders of such shares upon such terms as the Board of
Directors, after consideration of the respective annual dividend rates and
other relative rights and preferences of the respective series and classes,
shall determine in good faith will result in fair and equitable treatment
among the respective series or classes.
The Corporation shall not permit any subsidiary of the Corporation to
purchase or otherwise acquire for consideration any shares of stock of the
Corporation unless the Corporation could, under this subparagraph 3(c),
purchase or otherwise acquire such shares at such time and in such manner.
(d) Reacquired Shares. Any shares of Series A Junior Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereof. All
such shares shall upon their cancellation become authorized by unissued shares
of Preferred Stock and may be reissued as part of a new series of Preferred
Stock to be created by resolution or resolutions of the Board of
<PAGE> 14
Directors, subject to the conditions and restrictions on issuance set forth
herein.
(e) Liquidation, Dissolution or Winding Up. Upon any liquidation
(voluntary or otherwise), dissolution or winding up of the Corporation, no
distribution shall be made to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or winding up) to the
Series A Junior Preferred Stock unless, prior thereto, the holders of shares of
Series A Junior Preferred Stock shall have received an amount equal to 100
times the Exercise Price, plus an amount equal to accrued and unpaid dividends
and distributions thereon, whether or not declared, to the date of such payment
(the "Series A Liquidation Preference"). Following the payment of the full
amount of the Series A Liquidation Preference, no additional distributions
shall be made to the holders of shares of Series A Junior Preferred Stock
unless, prior thereto, the holders of shares of Common Stock shall have
received an amount per share (the "Common Adjustment") equal to the quotient
obtained by dividing (i) the Series A Liquidation Preference by (ii) 100 (as
appropriately adjusted as set forth under this subparagraph 3(e) to reflect
such events as stock splits, stock dividends and recapitalization with respect
to the Common Stock) (such number in clause (ii), the "Adjustment Number").
Following the payment of the full amount of the Series A Liquidation Preference
and the Common Adjustment in respect of all outstanding shares of Series A
Junior Preferred Stock and Common Stock, respectively, holders of Series A
Junior Preferred Stock and holders of shares of Common Stock shall receive
their ratable and proportionate share of the remaining assets to be distributed
in the ratio of the Adjustment Number to 1 with respect to such Preferred Stock
and Common Stock, on a per share basis, respectively.
In the event, however, that there are not sufficient assets available
to permit payment in full of the Series A Liquidation Preference and the
liquidation preferences of all other series of preferred stock, if any, which
rank on a parity with the Series A Junior Preferred Stock, then such remaining
assets shall be distributed ratably to the holders of such parity shares in
proportion to their respective liquidation preferences. In the event, however,
that there are not sufficient assets available to permit payment in full of the
Common Adjustment, then such remaining assets shall be distributed ratably to
the holders of Common Stock.
In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such
case the Adjustment Number in effect immediately prior to such event shall be
adjusted by multiplying such Adjustment Number by a fraction the numerator of
which is the number of shares of Common Stock outstanding immediately after
such event and the denominator of which is the
<PAGE> 15
number of shares of Common Stock that were outstanding immediately prior to
such event.
(f) Consolidation, Merger, etc. In case the Corporation shall enter
into any consolidation, merger, combination or other transaction in which the
shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case the shares
of Series A Junior Preferred Stock shall at the same time be similarly
exchanged or changed in an amount per share (subject to the provision for
adjustment hereinafter set forth) equal to 100 times the aggregate amount of
stock, securities, cash and/or any other property (payable in kind), as the
case may be, into which or for which each share of Common Stock is changed or
exchanged. In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine
the outstanding Common Stock into a smaller number of shares, then in each such
case the amount set forth in the preceding sentence with respect to the
exchange or change of shares of Series A Junior Preferred Stock shall be
adjusted by multiplying such amount by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(g) No Redemption. The shares of Series A Junior Preferred Stock
shall not be redeemable.
(h) Amendment. The Articles of Incorporation of the Corporation
shall not be further amended in any manner which would materially alter or
change the powers, preferences or special rights of the Series A Junior
Preferred Stock so as to affect them adversely without the affirmative vote of
the holders of a majority or more of the outstanding shares of Series A Junior
Preferred Stock, voting separately as a class.
(i) Fractional Shares. Series A Junior Preferred Stock may be
issued in fractions of a share which shall entitle the holder, in proportion
to such holder's fractional shares, to exercise voting rights, receive
dividends, participate in distributions and to have the benefit of all other
rights of holders of Series A Junior Preferred Stock.
SIXTH: The following provisions are inserted for the management of the
business and the conduct of the affairs of the Corporation, and for further
definition, limitation and regulation of the powers of the Corporation and of
its directors and shareholders:
(1) The business and affairs of the Corporation shall be managed by or
under the direction of the Board of Directors.
<PAGE> 16
(2) The directors shall have concurrent power with the shareholders to
make, alter, amend, change, add to or repeal the By-Laws of the Corporation.
(3) The number of directors of the Corporation shall be as from time to
time fixed by, or in the manner provided in, the By-Laws of the Corporation.
Election of directors need not be by written ballot unless the By-Laws so
provide.
(4) In addition to the powers and authority hereinbefore or by statute
expressly conferred upon them, the directors are hereby empowered to exercise
all such powers and do all such acts and things as may be exercised or done by
the Corporation, subject, nevertheless, to the provisions of the FBCA, these
Articles of Incorporation, and any By-Laws adopted by the shareholders;
provided, however, that no By-Laws hereafter adopted by the shareholders shall
invalidate any prior act of the directors which would have been valid if such
By-Laws had not been adopted.
SEVENTH: Meetings of shareholders may be held within or without the State
of Florida, as the By-Laws may provide. The books of the Corporation may be
kept (subject to any provision contained in the FBCA) outside the State of
Florida at such place or places as may be designated from time to time by the
Board of Directors or in the By-Laws of the Corporation.
EIGHTH: The existence of the Corporation will commence on the date of
filing of these Articles of Incorporation.
NINTH: The street address of the initial registered office of the
Corporation is 2502 North Rocky Point Drive, Tampa, Florida 33607, and the name
of the Corporation's initial registered agent at that address is Richard T.
Dawson.
TENTH: The number of directors of the Corporation shall be set in the
manner described in the By-Laws, but shall never be less than one. The name of
the initial director of the Corporation is Richard T. Dawson, whose street
address is 2502 North Rocky Point Drive, Tampa, Florida 33607.
ELEVENTH: The name of the incorporator of the Corporation is Michael L.
Jamieson, whose street address is 400 North Ashley Drive, Suite 2050, Tampa,
Florida 33602. The incorporator of the Corporation assigns to the Corporation
his rights under Section 607.0201, Florida Statutes, to constitute a
corporation, and he assigns to those persons designated by the Board of
Directors any rights he may have as incorporator to acquire any of the capital
stock of the Corporation, this assignment becoming effective on the date
corporate existence begins.
TWELFTH: The power to adopt, alter, amend or repeal By-Laws shall be
vested in the Board of Directors and the shareholders, except that the Board of
Directors may not amend or repeal any By-
<PAGE> 17
Law adopted by the shareholders if the shareholders specifically provide that
the By-Law is not subject to amendment or repeal by the directors.
THIRTEENTH: The Corporation reserves the right to amend, alter, change
or repeal any provision contained in these Articles of Incorporation, in the
manner now or hereafter prescribed by statute and in accordance with the
provisions of Article Fourth hereof, and all rights conferred upon shareholders
herein are granted subject to this reservation.
The undersigned incorporator, for the purpose of forming a corporation
under the laws of the State of Florida, has executed these Articles of
Incorporation this 7th day of February, 1996.
INCORPORATOR:
/s/ MICHAEL L. JAMIESON
-----------------------
Michael L. Jamieson
<PAGE> 18
CERTIFICATE DESIGNATING PLACE OF BUSINESS OR DOMICILE FOR THE SERVICE OF
PROCESS WITHIN THIS STATE, NAMING AGENT UPON WHOM PROCESS MAY BE SERVED.
Pursuant to Chapter 48.091, Florida Statutes, the following is submitted:
That Harvard Merger Corporation, desiring to organize under the laws of
the State of Florida with its initial registered office, as indicated in the
Articles of Incorporation, at 2502 North Rocky Point Drive, City of Tampa,
State of Florida, has named Richard T. Dawson as its agent to accept service of
process within this state.
ACKNOWLEDGMENT:
Having been named to accept service of process for the corporation named
above, at the place designated in this certificate, I agree to act in that
capacity, to comply with the provisions of the Florida Business Corporation
Act, and am familiar with, and accept, the obligations of that position.
Richard T. Dawson
<PAGE> 1
EXHIBIT 3.4
ARTICLES OF AMENDMENT TO
ARTICLES OF INCORPORATION OF
HARVARD MERGER CORPORATION
Pursuant to the provisions of Section 607.1006 of the Florida
Business Corporation Act, Harvard Merger Corporation (the "Corporation") adopts
the following Articles of Amendment to its Articles of Incorporation:
FIRST: The name of the Corporation is:
Harvard Merger Corporation
SECOND: The first sentence of Article Fourth of the Articles of
Incorporation shall be amended in its entirety to read as follows:
The total number of shares of all classes of capital stock which the
Corporation shall have authority to issue is forty-five million
(45,000,000), consisting of thirty million (30,000,000) shares of Common
Stock, each having a par value of $.01 per share ("Common Stock"), twelve
million (12,000,000) shares of Pay-in-Kind Exchangeable Preferred Stock, par
value $.01 per share (the "PIK Preferred"), five hundred thousand (500,000)
shares of Series A Junior Preferred Stock, each having a par value of $.01 per
share (the "Series A Junior Preferred Stock") and two million five hundred
thousand (2,500,000) shares of Preferred Stock, par value $.01 per share (the
"Preferred Stock")
FOURTH: The amendment was duly adopted by the directors and
shareholders of the Corporation on March 18, 1996.
FIFTH: The number of votes cast for the amendment by the
shareholders was sufficient for approval.
IN WITNESS WHEREOF, these Articles of Amendment have been executed as
of March 20, 1996.
----------------------------
Richard T. Dawson, President
<PAGE> 1
EXHIBIT 3.5
BY-LAWS
OF
HARVARD INDUSTRIES, INC.
(hereinafter called the "Corporation")
Article I
OFFICES
Section 1. Registered Office. The registered office of the Corporation
shall be in the City of Tampa, State of Florida.
Section 2. Other Offices. The Corporation may also have offices at such
other places both within and without the State of Florida as the Board of
Directors may from time to time determine.
Article II
MEETING OF SHAREHOLDERS
Section 1. Place of Meeting. Meetings of the shareholders for the
election of directors or for any other purpose shall be held at such time and
place, either within or without the State of Florida as shall be designated
from time to time by the Board of Directors and stated in the notice of the
meeting or in a duly executed waiver of notice thereof.
Section 2. Annual Meeting. The Annual Meetings of Shareholders shall be
held on such date and at such time as shall be designated from time to time by
the Board of Directors and stated in the notice of the meeting, at which
meetings the shareholders shall, unless otherwise provided by the Articles of
Incorporation, elect by a plurality vote a Board of Directors, and transact
such other business as may properly be brought before the meeting. Written
notice of the Annual Meeting stating the place, date and hour of the meeting
shall be given to each shareholder entitled to vote at such meeting not less
than ten nor more than sixty days before the date of the meeting.
Section 3. Special Meetings. Unless otherwise prescribed by law or by
the Articles of Incorporation, Special Meetings of Shareholders, for any
purpose or purposes, may be called by either (i) the Chairman, if there be one,
or (ii) the President, and shall be called by any such officer at the request
in writing of a majority of the Board of Directors or at the request in writing
of shareholders owning a majority of the capital stock of the Corporation
issued and outstanding and entitled to vote. Such request shall state the
purpose or purposes of the proposed meeting. Written notice of a Special
Meeting stating the place, date and hour of the meeting and the purpose or
purposes for which the meeting is called shall be given not less than ten nor
more than sixty days before the date of the meeting to each shareholder
entitled to vote at such meeting.
<PAGE> 2
Section 4. Quorum. Except as otherwise provided by law or by the
Articles of Incorporation, the holders of a majority of the capital stock
issued and outstanding and entitled to vote thereat, present in person or
represented by proxy, shall constitute a quorum at all meetings of the
shareholders for the transaction of business. If, however, such quorum shall
not be present or represented at any meeting of the shareholders, the
shareholders entitled to vote thereat, present in person or represented by
proxy, shall, by a majority of those present, have power to adjourn the meeting
from time to time, without notice other than announcement at the meeting, until
a quorum shall be present or represented. At such adjourned meeting at which a
quorum shall be present or represented, any business may be transacted which
might have been transacted at the meeting as originally noticed. If the
adjournment is for more than thirty days, or if after the adjournment a new
record date is fixed for the adjourned meeting, a notice of the adjourned
meeting shall be given to each shareholder to vote at the meeting.
Section 5. Voting. Unless otherwise required by law, the Articles of
Incorporation or these By-Laws, any question brought before any meeting of
shareholders shall be decided by the vote of the holders of a majority of the
stock represented and entitled to vote thereat. Each shareholder represented
at a meeting of shareholders shall be entitled to cast one vote for each share
of the capital stock entitled to vote thereat held by such shareholder. Such
votes may be cast in person or by proxy but no proxy shall be voted on or after
three years from its date, unless such proxy provides for a longer period. The
Board of Directors, in its discretion, or the officer of the Corporation
presiding at a meeting of shareholders, in his discretion, may require that any
votes cast at such meeting shall be cast by written ballot.
Section 6. Consent of Shareholders in Lieu of Meeting. Unless otherwise
provided in the Articles of Incorporation, any action required or permitted to
be taken at any Annual or Special Meeting of Shareholders of the Corporation,
may be taken without a meeting, without prior notice and without a vote, if a
consent in writing, setting forth the action so taken, shall be signed by the
holders of outstanding stock having not less than the minimum number of votes
that would be necessary to authorize or take such action at a meeting at which
all shares entitled to vote thereon were present and voted. Prompt notice of
the taking of the corporate action without a meeting by less than unanimous
written consent shall be given to these shareholders who have not consent in
writing.
Section 7. List of Shareholders Entitled to Vote. The officer of the
Corporation who has charge of the stock ledger of the Corporation shall prepare
and make, at least ten days before every meeting of shareholders, a complete
list of the shareholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each shareholder and the number
of shares registered in the name of each shareholder. Such list shall
<PAGE> 3
be open to the examination of any shareholder, for any purpose germane to the
meeting, during ordinary business hours, for a period of at least ten days
prior to the meeting, either at a place within the city where the meeting is to
be held, which place shall be specified in the notice of the meeting, or, if
not so specified, at the place where the meeting is to be held. The list shall
also be produced and kept at the time and place of the meeting during the whole
time thereof, and may be inspected by any shareholder of the Corporation who is
present.
Section 8. Stock Ledger. The stock ledger of the Corporation shall be
the only evidence as to who are the shareholders entitled to examine the stock
ledger, the list required by Section 7 of this Article II or the books of the
Corporation, or to vote in person or by proxy at any meeting of shareholders.
Article III
DIRECTORS
Section 1. Number and Election of Directors. The Board of Directors
shall consist of not less than three nor more than fifteen members, the exact
number of which shall be adjusted from time to time by the Board of Directors.
Except as provided in Section 2 of this Article or in the Articles of
Incorporation, directors shall be elected by a plurality of the votes cast at
Annual Meetings of Shareholders, and each director so elected shall hold office
until the next Annual Meeting and until his successor is duly elected and
qualified, or until his earlier resignation or removal. Any director may
resign at any time upon notice to the Corporation. Directors need not be
shareholders.
Section 2. Vacancies. Unless otherwise provided in the Articles of
Incorporation, vacancies and newly created directorships resulting from any
increase in the authorized number of directors may be filled by a majority of
the directors then in office, though less than a quorum, or by a sole remaining
director, and the directors so chosen shall hold office until the next annual
election and until their successors are duly elected and qualified, or until
their earlier resignation or removal.
Section 3. Duties and Powers. The business of the Corporation shall be
managed by or under the direction of the Board of Directors which may exercise
all such powers of the Corporation and do all such lawful acts and things as
are not by statute or by the Articles of Incorporation or by these By-Laws
directed or required to be exercised or done by the shareholders.
Section 4. Meetings. The Board of Directors of the Corporation may hold
meetings, both regular and special, either within or without the State of
Florida. Regular meetings of the Board of Directors may be held without notice
at such time and at such place as may from time to time be determined by the
Board of Directors. Special meetings of the Board of Directors may be
<PAGE> 4
called by the Chairman, if there be one, the President, or any director.
Notice thereof stating the place, date and hour of the meeting shall be given
to each director either by mail not less than 48 hours before the date of the
meeting, by telephone or telegram on 24 hours notice, or on such shorter notice
as the person or persons calling such meeting may deem necessary or appropriate
in the circumstances.
Section 5. Quorum. Except as may be otherwise specifically provided by
law, the Articles of Incorporation or these By-Laws, at all meetings of the
Board of Directors, a majority of the entire Board of Directors shall
constitute a quorum for the transaction of business and the act of a majority
of the directors present at any meeting at which there is a quorum shall be the
act of the Board of Directors. If a quorum shall not be present at any meeting
of the Board of Directors, a majority of the directors present thereat may
adjourn the meeting from time to time, without notice other than announcement
at the meeting, until a quorum shall be present.
Section 6. Actions of Board. Unless otherwise provided by the Articles
of Incorporation or these By-Laws, any action required or permitted to be taken
at any meeting of the Board of Directors or of any committee thereof may be
taken without a meeting, if all the members of the Board of Directors or
committee, as the case may be, consent thereto in writing, and the writing or
writings are filed with the minutes of proceedings of the Board of Directors or
committee.
Section 7. Meetings by Means of Conference Telephone. Unless otherwise
provided by the Articles of Incorporation or these By-Laws, members of the
Board of Directors of the Corporation, or any committee designated by the Board
of Directors, may participate in a meeting of the Board of Directors or such
committee by means of a conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other, and participation in a meeting pursuant to this Section 7 shall
constitute presence in person at such meeting.
Section 8. Committees. The Board of Directors may, by resolution passed
by a majority of the entire Board of Directors, designate one or more
committees, each committee to consist of one or more of the directors of the
Corporation. The Board of Directors may designate one or more directors as
alternate members of any committee, who may replace any absent or disqualified
member at any meeting of any such committee. In the absence or
disqualification of a member of a committee, and in the absence of a
designation by the Board of Directors of an alternate member to replace the
absent or disqualified member, the member or members thereof present at any
meeting and not disqualified from voting, whether or not he or they constitute
a quorum, may unanimously appoint another member of the Board of Directors to
act at the meeting in the place of any absent or disqualified member. Any
committee, to the extent allowed by law and provided in the resolution
establishing such committee, shall have and may exercise
<PAGE> 5
all the powers and authority of the Board of Directors in the management of
the business and affairs of the Corporation. Each committee shall keep
regular minutes and report to the Board of Directors when required.
(a) Compensation Committee. The Board of Directors shall appoint a
Compensation Committee of the Board of Directors (the "Compensation
Committee"), which shall be responsible for reviewing (but not approving) all
salaries and bonuses paid by the Corporation or its Subsidiaries to the
executive officers of the Corporation or its Subsidiaries, employment
agreements with a duration of more than one year and all bonus and incentive
plans. The Compensation Committee shall consist of three members of the Board
of Directors.
(b) Audit Committee. The Board of Directors shall appoint an audit
committee of the Board of Directors (the "Audit Committee"). Until the audit
for fiscal year 1994 is completed, the Audit Committee (i) shall be responsible
for determining the scope of the audit conducted by the Corporation's
independent public accountants, but shall not have the authority to discharge
the Corporation's independent public accountants, (ii) shall review, and may
request the Corporation's independent public accountants to substantiate, any
bankruptcy expenses incurred by the Corporation, and (iii) shall be allotted
reasonable funds for the purpose of retaining such legal counsel and financial
and accounting advisors, on terms not in excess of standard hourly rates, bills
for which shall be submitted to the Corporation monthly, as the Audit Committee
shall determine to be necessary and desirable. In the event the Board of
Directors determines that the funds requested by the Audit Committee pursuant
to subsection (iii) of the preceding sentence are in excess of that required by
the terms of such subsection, the Board of Directors shall submit the
determination of the amount of reasonable funds to be allotted to the Audit
Committee to an independent arbitrator, selected pursuant to and whose decision
shall be made in accordance with the rules of the American Arbitration
Association, and who shall reach a decision within 60 days of the time such
question is submitted to such independent arbitrator. In making a
determination as to an amount of reasonable funds an arbitrator may consider
and provide appropriate funds for reasonably probable future developments.
Following such decision the Corporation shall not be required to allocate funds
to the Audit Committee in excess of the amount determined by such arbitrator to
be reasonable, provided, that expenses accrued with respect to legal counsel
and financial and accounting advisors to the Audit Committee prior to the
arbitrator's decision, not in excess of standard hourly rates, for which bills
have been submitted to the Corporation on a monthly basis, shall be paid by the
Corporation. In the event of a substantial change in circumstances after the
decision of such arbitrator, either the Audit Committee or the Board of
Directors may resubmit the determination of the amount of reasonable funds to
be allotted to the Audit Committee to an independent arbitrator in the manner
described and, after such arbitrator's determination,
<PAGE> 6
the Corporation shall allocate funds in accordance with such determination.
In addition to the foregoing, the Corporation shall pay the fees and expenses,
not in excess of standard rates, incurred by the Audit Committee in connection
with any arbitration proceeding provided for by this Section 8, including, but
not limited to, fees of legal counsel and financial and accounting advisors.
The Audit Committee shall consist of three members of the Board of Directors.
Section 9. Compensation. Directors of the Corporation, other than
directors who are employees of the Corporation, shall be paid an annual fee in
an amount determined by the Board of Directors which, until the later of (i)
the time at which no shares of Pay-In-Kind Exchangeable Preferred Stock, par
value $.01 per share, of the Corporation and no 14-1/4% Subordinated Notes due
November 16, 1988 of the Corporation are outstanding and (ii) September 30,
1994, shall be not less than $25,000 per annum for each such director. The
directors shall be paid their reasonable expenses, if any, of attendance at
each meeting of the Board of Directors and may be paid a fixed sum for
attendance at each meeting of the Board of Directors or a stated salary as
director. No such payment shall preclude any director from serving the
Corporation in any other capacity and receiving compensation therefor. Members
of special or standing committees may be allowed like compensation for
attending committee meetings.
Section 10. Interested Directors. No contract or transaction between the
Corporation and one or more of its directors or officers, or between the
Corporation and any other corporation, partnership, association, or other
organization in which one or more of its directors or officers are directors or
officers, or have a financial interest, shall be void or voidable solely for
this reason, or solely because the director or officer is present at or
participates in the meeting of the Board of Directors or committee thereof
which authorizes the contract or transaction, or solely because his or their
votes are counted for such purpose if (i) the material facts as to his or their
relationship or interest and as to the contract or transaction are disclosed or
are known to the Board of Directors or the committee, and the Board of
Directors or committee in good faith authorizes the contract or transaction by
the affirmative votes of a majority of the disinterested directors, even though
the disinterested directors be less than a quorum; or (ii) the material facts
as to his or their relationship or interest and as to the contract or
transaction are disclosed or are known to the shareholders entitled to vote
thereon, and the contract or transaction is specifically approved in good faith
by vote of the shareholders; or (iii) the contract or transaction is fair as to
the Corporation as of the time it is authorized, approved or ratified, by the
Board of Directors, a committee thereof or the shareholders. Common or
interested directors may be counted in determining the presence of a quorum at
a meeting of the Board of Directors or of a committee which authorizes the
contract or transaction.
<PAGE> 7
Section 11. Expenses. Until the later of the date on which (i) no shares
of Pay-In-Kind Exchangeable Preferred Stock, par value $.01 per share, of the
Corporation and no 14-1/4% Subordinated Notes due November 16, 1998 of the
Corporation are outstanding, or (ii) the audit for fiscal year 1994 is
completed and accepted by the Board of Directors, the Board of Directors of the
Corporation shall be allotted reasonable funds for the purposes of retaining
legal counsel and financial and accounting advisors, on terms not in excess of
standard hourly rates, bills for which shall be submitted to the Corporation
monthly, in the event any Director shall dispute the determinations of the
entire Board of Directors relating to any of the provisions of Articles Fourth
or Fifth of the Corporation's Articles of Incorporation. In the event the
Board of Directors determines that the funds requested pursuant to the first
sentence of this Section 11 are in excess of that required by the terms of such
sentence, the Board of Directors shall submit the determination of the amount
of reasonable funds to be allotted to the directors to an independent
arbitrator, selected pursuant to and whose decision shall be made in accordance
with the rules of the American Arbitration Association, and who shall reach a
decision within 60 days of the time such question is submitted to such
independent arbitrator. In making a determination as to an amount of
reasonable funds an arbitrator may consider and provide appropriate funds for
reasonably probable future developments. Following such decision the
Corporation shall not be required to allocate funds to the directors in excess
of the amount determined by such arbitrator to be reasonable, provided, that
expenses accrued with respect to legal counsel and financial and accounting
advisors to the directors prior to the arbitrator's decision, not in excess of
standard hourly rates, for which bills have been submitted to the Corporation
on a monthly basis, shall be paid by the Corporation. In the event of a
substantial change in circumstances after the decision of such arbitrator, the
Board of Directors may resubmit the determination of the amount of reasonable
funds to be allotted to the directors to an independent arbitrator in the
manner described above and, after such arbitrator's determination, the
Corporation shall allocate funds in accordance with such determination. In
addition to the foregoing, the Corporation shall pay the fees and expenses, not
in excess of standard rates, incurred by the directors in connection with any
arbitration proceeding provided for by this Section 11, including, but not
limited to, fees of legal counsel and financial and accounting advisors.
Section 12. Reports to Directors. Unless otherwise directed by the Audit
Committee, the Corporation shall provide monthly reports to the Directors of
the Corporation with respect to the following:
(a) an executive summary report on the month's operating results.
<PAGE> 8
(b) a monthly updated budget for balance of fiscal year and next
fiscal year, as available.
(c) the Consolidated and Consolidating Balance Sheets, Income
Statements and Cash Flow Statements on a monthly and year-to-date basis
(including comparison with projections and explanation of variances).
(d) the results of all financial covenant tests (including but not
limited to Bank covenants).
(e) a summary of working capital items (accounts receivable,
inventory, prepaid expenses and accounts payable) including:
(i) a calculation of days and a comparison with projections,
actual results for the prior month and actual results for the same month last
year.
(ii) an explanation of significant variances from projections.
(iii) a breakdown of inventory components by raw materials, work
in progress and finished goods.
(iv) the amount and percentage of accounts payables past due, a
summary of the aging of accounts payable by dollar amount and percent of total.
(f) the details of components of Other (Income)/Expense (including
comparison with projected and explanation of variance).
(g) copies of all reports prepared for the Corporation's leaders.
(h) copies of all financial reports prepared for dissemination to
shareholders and/or the SEC.
In addition, annually, the Corporation shall provide to the Directors of
the Corporation the annual budget, including subsidiary budgets.
Article IV
OFFICERS
Section 1. General. The officers of the Corporation shall be chosen by
the Board of Directors and shall be a President, a Secretary and a Treasurer.
The Board of Directors, in its discretion, may also choose a Chairman of the
Board of Directors (who must be a director) and one or more Vice Presidents,
Assistant Secretaries, Assistant Treasurers and other officers. Any number of
offices may be held by the same person, unless otherwise prohibited by law, the
Articles of Incorporation or these By-Laws.
<PAGE> 9
The officers of the Corporation need not be shareholders of the Corporation
nor, except in the case of the Chairman of the Board of Directors, need such
officers be directors of the Corporation.
Section 2. Election. The Board of Directors at its first meeting held
after each Annual Meeting of Shareholders shall elect the officers of the
Corporation who shall hold their offices for such terms and shall exercise such
powers and perform such duties as shall be determined from time to time by the
Board of Directors; and all officers of the Corporation shall hold office until
their successors are chosen and qualified, or until their earlier resignation
or removal. Any officer elected by the Board of Directors may be removed at
any time by the affirmative vote of a majority of the Board of Directors. Any
vacancy occurring in any office of the Corporation shall be filled by the Board
of Directors. The salaries of all officers of the Corporation shall be fixed
by the Board of Directors.
Section 3. Voting Securities Owned by the Corporation. Powers of
attorney, proxies, waivers of notice of meeting, consents and other instruments
relating to securities owned by the Corporation may be executed in the name of
and on behalf of the Corporation by the President or any Vice President and any
such officer may, in the name of and on behalf of the Corporation, take all
such action as any such officer may deem advisable to vote in person or by
proxy at any meeting of security holders of any corporation in which the
Corporation may own securities and at any such meeting shall possess and may
exercise any and all rights and power incident to the ownership of such
securities and which, as the owner thereof, the Corporation might have
exercised and possessed if present. The Board of Directors may, by resolution,
from time to time confer like powers upon any other person or persons.
Section 4. Chairman of the Board of Directors. The Chairman of the Board
of Directors, if there be one, shall preside at all meetings of the
shareholders and of the Board of Directors. He shall be the Chief Executive
Officer of the Corporation, and except where by law the signature of the
President is required, the Chairman of the Board of Directors shall possess the
same power as the President to sign all contracts, certificates and other
instruments of the Corporation which may be authorized by the Board of
Directors. During the absence or disability of the President, the Chairman of
the Board of Directors shall exercise all the powers and discharge all the
duties of the President. The Chairman of the Board of Directors shall also
perform such other duties and may exercise such other powers as from time to
time may be assigned to him by these By-Laws or by the Board of Directors.
Section 5. President. The President shall, subject to the control of the
Board of Directors and, if there be one, the Chairman of the Board of
Directors, have general supervision of the business of the Corporation and
shall see that all orders and resolutions of the Board of Directors are carried
into effect. He
<PAGE> 10
shall execute all bonds, mortgages, contracts and other instruments of the
Corporation requiring a seal, under the seal of the Corporation, except where
required or permitted by law to be otherwise signed and executed and except
that the other officers of the Corporation may sign and execute documents when
so authorized by these By-Laws, the Board of Directors or the President. In
the absence or disability of the Chairman of the Board of Directors, or if
there be none, the President shall preside at all meetings of the shareholders
and the Board of Directors. If there be no Chairman of the Board of Directors,
the President shall be the Chief Executive Officer of the Corporation. The
President shall also perform such other duties and may exercise such other
powers as from time to time may be assigned to him by these By- Laws or by the
Board of Directors.
Section 6. Vice Presidents. At the request of the President or in his
absence or in the event of his inability or refusal to act (and if there be no
Chairman of the Board of Directors), the Vice President or the Vice Presidents
if there is more than one (in the order designated by the Board of Directors)
shall perform the duties of the President, and when so acting, shall have all
the powers of and be subject to all the restrictions upon the President. Each
Vice President shall perform such other duties and have such other powers as
the Board of Directors from time to time may prescribe. If there be no
Chairman of the Board of Directors and no Vice President, the Board of
Directors shall designate the officer of the Corporation who, in the absence of
the President or in the event of the inability or refusal of the President to
act, shall perform the duties of the President, and when so acting, shall have
all the powers of and be subject to all the restrictions upon the President.
Section 7. Secretary. The Secretary shall attend all meetings of the
Board of Directors and all meetings of shareholders and record all the
proceedings thereat in a book or books to be kept for that purpose; the
Secretary shall also perform like duties for the standing committees when
required. The Secretary shall give, or cause to be given, notice of all
meetings of the shareholders and special meetings of the Board of Directors,
and shall perform such other duties as may be prescribed by the Board of
Directors or President, under whose supervision he shall be. If the Secretary
shall be unable or shall refuse to cause to be given notice of all meetings of
the shareholders and special meetings of the Board of Directors, and if there
be no Assistant Secretary, then either the Board of Directors or the President
may choose another officer to cause such notice to be given. The Secretary
shall have custody of the seal of the Corporation and the Secretary or any
Assistant Secretary, if there be one, shall have authority to affix the same to
any instrument requiring it, and when so affixed, it may be attested by the
signature of the Secretary or by the signature of any such Assistant Secretary.
The Board of Directors may give general authority to any other officer to affix
the seal of the Corporation and to attest the affixing by his signature. The
Secretary shall see that all books, reports,
<PAGE> 11
statements, certificates and other documents and records required by law to be
kept or filed are properly kept or filed, as the case may be.
Section 8. Treasurer. The Treasurer shall have the custody of the
corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the Corporation and shall
deposit all moneys and other valuable effects in the name and to the credit of
the Corporation in such depositories as may be designated by the Board of
Directors. The Treasurer shall disburse the funds of the Corporation as may be
ordered by the Board of Directors, taking proper vouchers for such
disbursements, and shall render to the President and the Board of Directors, at
its regular meetings, or when the Board of Directors so requires, an account of
all his transactions as Treasurer and of the financial condition of the
Corporation. If required by the Board of Directors, the Treasurer shall give
the Corporation a bond in such sum and with such surety or sureties as shall be
satisfactory to the Board of Directors for the faithful performance of the
duties of his office and for the restoration to the Corporation, in case of his
death, resignation, retirement or removal from office, of all books, papers,
vouchers, money and other property of whatever kind in his possession or under
his control belonging to the Corporation.
Section 9. Assistant Secretaries. Except as may be otherwise provided in
these By-Laws, Assistant Secretaries, if there be any, shall perform such
duties and have such powers as from time to time may be assigned to them by the
Board of Directors, the President, any Vice President, if there be one, or the
Secretary, and in the absence of the Secretary or in the event of his
disability or refusal to act, shall perform the duties of the Secretary, and
when so acting, shall have all the powers of and be subject to all the
restrictions upon the Secretary.
Section 10. Assistant Treasurers. Assistant Treasurers, if there be
any, shall perform such duties and have such powers as from time to time may be
assigned to them by the Board of Directors, the President, any vice President,
if there be one, or the Treasurer, and in the absence of the Treasurer or in
the event of his disability or refusal to act, shall perform the duties of the
Treasurer, and when so acting, shall have all the powers of and be subject to
all the restrictions upon the Treasurer. If required by the Board of
Directors, an Assistant Treasurer shall give the Corporation a bond in such sum
and with such surety or sureties as shall be satisfactory to the Board of
Directors for the faithful performance of the duties of his office and for the
restoration to the Corporation, in case of his death, resignation, retirement
or removal from office, of all books, papers, vouchers, money and other
property of whatever kind in his possession or under his control belonging to
the Corporation.
Section 11. Other officers. Such other officers as the Board of
Directors may choose shall perform such duties and have such
<PAGE> 12
powers as from time to time may be assigned to them by the Board of Directors.
The Board of Directors may delegate to any other officer of the Corporation the
power to choose such other officers and to prescribe their respective duties
and powers.
Article V
STOCK
Section 1. Form of Certificates. Every holder of stock in the
Corporation shall be entitled to have a certificate signed, in the name of the
Corporation (i) by the Chairman of the Board of Directors, the President or a
Vice President and (ii) by the Treasurer or an Assistant Treasurer, or the
Secretary or an Assistant Secretary of the Corporation, certifying the number
of shares owned by him in the Corporation.
Section 2. Signatures. Where a certificate is countersigned by (i) a
transfer agent other than the Corporation or its employee, or (ii) a registrar
other than the Corporation or its employee, any other signature on the
certificate may be a facsimile. In case any officer, transfer agent or
registrar who has signed or whose facsimile signature has been placed upon a
certificate shall have ceased to be such officer, transfer agent or registrar
before such certificate is issued, it may be issued by the Corporation with the
same effect as if he were such officer, transfer agent or registrar at the date
of issue.
Section 3. Lost Certificates. The Board of Directors may direct a new
certificate to be issued in place of any certificate theretofore issued by the
Corporation alleged to have been lost, stolen or destroyed, upon the making of
an affidavit of that fact by the person claiming the certificate of stock to be
lost, stolen or destroyed. When authorizing such issue of a new certificate,
the Board of Directors may, in its discretion and as a condition precedent to
the issuance thereof, require the owner of such lost, stolen or destroyed
certificate, or his legal representative, to advertise the same in such manner
as the Board of Directors shall require and/or to give the Corporation a bond
in such sum as it may direct as indemnity against any claim that may be made
against the Corporation with respect to the certificate alleged to have been
lost, stolen or destroyed.
Section 4. Transfers. Stock of the Corporation shall be transferable in
the manner prescribed by law and in these By-Laws. Transfers of stock shall be
made on the books of the Corporation only by the person named in the
certificate or by his attorney lawfully constituted in writing and upon the
surrender of the certificate therefor, which shall be cancelled before a new
certificate shall be issued.
Section 5. Record Date. In order that the Corporation may determine the
shareholders entitled to notice of or to vote at any meeting of shareholders or
any adjournment thereof, or entitled to
<PAGE> 13
express consent to corporate action in writing without a meeting, or entitled
to receive payment of any dividend or other distribution or allotment of any
rights, or entitled to exercise any rights in respect of any change, conversion
or exchange of stock, or for the purpose of any other lawful action, the Board
of Directors may fix, in advance, a record date, which shall not be more than
sixty days nor less than ten days before the date of such meeting, nor more
than sixty days prior to any other action. A determination of shareholders of
record entitled to notice of or to vote at a meeting of shareholders shall
apply to any adjournment of the meeting; provided, however, that the Board of
Directors may fix a new record date for the adjourned meeting.
Section 6. Beneficial Owners. The Corporation shall be entitled to
recognize the exclusive right of a person registered on its books as the owner
of shares to receive dividends, and to vote as such owner, and to hold liable
for calls and assessments a person registered on its books as the owner of
shares, and shall not be bound to recognize any equitable or other claim to or
interest in such share or shares on the part of any other person, whether or
not it shall have express or other notice thereof, except as otherwise provided
by law.
Article VI
NOTICES
Section 1. Notices. Whenever written notice is required by law, the
Articles of Incorporation or these By-Laws, to be given to any director, member
of a committee or shareholder, such notice may be given by mail, addressed to
such director, member of a committee or shareholder, at his address as it
appears on the records of the Corporation, with postage thereon prepaid, and
such notice shall be deemed to be given at the time when the same shall be
deposited in the United States mail. Written notice may also be given
personally or by telegram, telex or cable.
Section 2. Waivers of Notice. Whenever any notice is required by law, the
Articles of Incorporation or these By-Laws, to be given to any director, member
of a committee or shareholder, a waiver thereof in writing, signed, by the
person or persons entitled to said notice, whether before or after the time
stated therein, shall be deemed equivalent thereto.
Article VII
GENERAL PROVISIONS
Section 1. Dividends. Dividends upon the capital stock of the
Corporation subject to the provisions of the Articles of Incorporation, if any,
may be declared by the Board of Directors at any regular or special meeting,
and may be paid in cash, in property, or in shares of the capital stock.
Before payment of any
<PAGE> 14
dividend, there may be set aside out of any funds of the Corporation available
for dividends such sum or sums as the Board of Directors from time to time, in
its absolute discretion, deems proper as a reserve or reserves to meet
contingencies, or for equalizing dividends, or for repairing or maintaining any
property of the Corporation, or for any proper purpose, and the Board of
Directors may modify or abolish any such reserve.
Section 2. Disbursements. All checks or demands for money and notes of
the Corporation shall be signed by such officer or officers or such other
person or persons as the Board of Directors may from time to time designate.
Section 3. Fiscal Year. The fiscal year of the Corporation shall be
fixed by resolution of the Board of Directors.
Section 4. Corporate Seal. The corporate seal shall have inscribed
thereon the name of the Corporation. The seal may be used by causing it or a
facsimile thereof to be impressed or affixed or reproduced or otherwise.
Article VIII
INDEMNIFICATION
Section 1. Power to Indemnify in Actions, Suits or Proceedings other Than
Those by or in the Right of the Corporation. Subject to Section 3 of this
Article VIII, the Corporation shall indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Corporation) by
reason of the fact that he is or was a director, officer, employee or agent of
the Corporation, or is or was a director or officer of the Corporation serving
at the request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust, employee benefit plan
of other enterprise, against expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding if he acted in good faith and
in a manner he reasonably believed to be in or not opposed to the best
interests of the Corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the Corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
<PAGE> 15
Section 2. Power to Indemnify in Actions, Suits or Proceedings by or in
the Right of the Corporation. Subject to Section 3 of this Article VIII, the
Corporation shall indemnify any person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action or suit by or
in the right of the Corporation to procure a judgment in its favor by reason of
the fact that he is or was a director, officer, employee or agent of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the Corporation; except that no indemnification shall be
made in respect of any claim, issue or matter as to which such person shall
have been adjudged to be liable to the Corporation unless and only to the
extent that the circuit court or the court in which such action or suit was
brought shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which the circuit
court or such other court shall deem proper.
Section 3. Authorization of Indemnification. Any indemnification under
this Article VIII (unless ordered by a court) shall be made by the Corporation
only as authorized in the specific case upon a determination that
indemnification of the director, officer, employee or agent is proper in the
circumstances because he has met the applicable standard of conduct set forth
in Section 1 or Section 2 of this Article VIII, as the case may be. Such
determination shall be made (i) by the Board of Directors by a majority vote of
a quorum consisting of directors who were not parties to such action, suit or
proceeding, or (ii) if such a quorum is not obtainable, or, even if obtainable
a quorum of disinterested directors so directs, by independent legal counsel in
a written opinion, or (iii) by the shareholders, or (iv) as otherwise provided
by law. To the extent, however, than a director, officer, employee or agent of
the Corporate has been successful on the merits or otherwise in defense of any
action, suit or proceeding described above, or in defense of any claim, issue
or matter therein, he shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by him in connection
therewith, without the necessity of authorization in the specific case.
Section 4. Good Faith Defined. For purposes of any determination under
Section 3 of this Article VIII, a person shall be deemed to have acted in good
faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the Corporation, or, with respect to any criminal action or
proceeding, to have had no reasonable cause to believe his conduct was
unlawful, if his action is based on the records or books of account
<PAGE> 16
of the Corporation or another enterprise, or on information supplied to him by
the officers of the Corporation or another enterprise in the course of their
duties, or on the advice of legal counsel for the Corporation or another
enterprise or on information or records given or reports made to the
Corporation or another enterprise by an independent certified public accountant
or by an appraiser or other expert selected with reasonable care by the
Corporation or another enterprise. The term "another enterprise" as used in
this Section 4 shall mean any other corporation or any partnership, joint
venture, trust, employee benefit plan or other enterprise of which such person
is or vas serving at the request of the Corporation as a director, officer,
employee or agent. The provisions of this Section 4 shall not be deemed to be
exclusive or to limit in any way the circumstances in which a person may be
deemed to have met the applicable standard of conduct set forth in Sections 1
or 2 of this Article VIII, as the case may be.
Section 5. Indemnification by a Court. Notwithstanding any contrary
determination in the specific case under Section 3 of this Article VIII, and
notwithstanding the absence of any determination thereunder, any director,
officer, employee or agent may apply to any court of competent jurisdiction in
the State of Florida for indemnification to the extent otherwise permissible
under Sections 1 and 2 of this Article VIII. The basis of such indemnification
by a court shall be a determination by such court that indemnification of the
director, officer, employee or agent is proper in the circumstances because he
has met the applicable standards of conduct set forth in Sections 1 or 2 of
this Article VIII, as the cost may be. Neither a contrary determination in the
specific case under Section 3 of this Article VIII nor the absence of any
determination thereunder shall be a defense to such application or create a
presumption that the director, officer, employee or agent seeking
indemnification has not met any applicable standard of conduct. Notice of any
application for indemnification pursuant to this Section 5 shall be given to
the Corporation promptly upon the filing of such application. If successful,
in whole or in part, the director, employee or agent seeking indemnification
shall also be entitled to be paid the expense of prosecuting such application.
Section 6. Expenses Payable in Advance. Expenses incurred by a director,
officer, employee or agent in defending or investigating a threatened or
pending action, suit or proceeding shall be paid by the Corporation in advance
of the final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such director, officer, employee or agent to
repay such amount if it shall ultimately be determined that he is not entitled
to be indemnified by the Corporation as authorized in this Article VIII.
Section 7. Nonexclusivity of Indemnification and Advancement of Expenses.
The indemnification and advancement of expenses provided by or granted pursuant
to this Article VIII shall not be deemed exclusive of any other rights to which
those seeking indemnification or advancement of expenses may be entitled under
<PAGE> 17
any By-Law, agreement, contract, vote of shareholders or disinterested
directors or pursuant to the direction (howsoever embodied) of any court of
competent jurisdiction or otherwise, both as to action in his official capacity
and as to action in another capacity while holding such office, it being the
policy of the Corporation that indemnification of the persons specified in
Sections 1 and 2 of this Article VIII shall be made to the fullest extent
permitted by law. The provisions of this Article VIII shall not be deemed to
preclude the indemnification of any person who is not specified in Sections 1
or 2 of this Article VIII but whom the Corporation has the power or obligation
to indemnify under the provisions of the Florida Business Corporation Act, or
otherwise.
Section 8. Insurance. The Corporation shall purchase and maintain a
reasonable level of insurance (but in no event in an amount less than that
provided for on September 30, 1991) on behalf of any person who is or was a
director or officer of the Corporation, and may purchase and maintain insurance
on behalf of any person who is or was an employee or agent, of the Corporation,
or is or was serving at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise against any liability asserted
against him and incurred by him in any such capacity, or arising out of his
status as such, whether or not the Corporation would have the power or the
obligation to indemnify him against such liability under the provisions of this
Article VIII.
Section 9. Certain Definitions. For purposes of this Article VIII,
references to "the Corporation" shall include, in addition to the resulting
corporation, any constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power and authority to indemnify its
directors, officers, employees or agents, so that any person who is or was a
director, officer, employee or agent of such constituent corporation, or is or
was a director or officer of such constituent corporation serving at the
request of such constituent corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise, shall stand in the same position under the
provisions of this Article VIII with respect to the resulting or surviving
corporation as he would have with respect to such constituent corporation if
its separate existence had continued. For purposes of this Article VIII,
references to "fines" shall include any excise taxes assessed on a person with
respect to an employee benefit plan; and references to "serving at the request
of the Corporation" shall include any service as a director, officer, employee
or agent of the Corporation which imposes duties on, or involves services by,
such director, officer, employee or agent with respect to an employee benefit
plan, its participants or beneficiaries; and a person who acted in good faith
and in a manner he reasonably believed to be in the interest of the
participants and beneficiaries of an employee benefit plan shall be deemed to
<PAGE> 18
have acted in a manner "not opposed to the best interests of the Corporation"
as referred to in this Article VIII.
Section 10. Survival of Indemnification and Advancement of Expenses. The
indemnification and advancement of expenses provided by, or granted pursuant
to, this Article VIII shall, unless otherwise provided when authorized or
ratified, continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such a person.
Section 11. Limitation on Indemnification. Notwithstanding anything
contained in this Article VIII to the contrary, except for proceedings to
enforce rights to indemnification (which shall be governed by Section 5
hereof), the Corporation shall not be obligated to indemnify any director,
officer, employee or agent in connection with a proceeding (or part thereof)
initiated by such person unless such proceeding (or part thereof) was
authorized or consented to by the Board of Directors of the Corporation.
Article IX
AMENDMENTS
Section 1. These By-Laws may be altered, amended or repealed, in whole or
in part, or new By-Laws may be adopted by the shareholders or by the Board of
Directors, provided, however, that notice of such alteration, amendment, repeal
or adoption of new By-Laws be contained in the notice of such meeting of
shareholders or Board of Directors as the case may be. All such amendments
must be approved by either the holders of a majority of the outstanding capital
stock entitled to vote thereon or by a majority of the entire Board of
Directors then in office.
Section 2. Entire Board of Directors. As used in this Article IX and in
these By-Laws generally, the term "entire Board of Directors" means the total
number of directors which the Corporation would have if there were no
vacancies.
<PAGE> 1
EXHIBIT 10
CONFORMED COPY
AMENDMENT No. 1, WAIVER AND CONSENT dated as of March 31,
1996 (this "AMENDMENT"), to the Credit Agreement dated as of July 28, 1995 (the
"CREDIT AGREEMENT"), among HARVARD INDUSTRIES, INC., a Delaware corporation
("HARVARD"), DOEHLER-JARVIS, INC., a Delaware corporation ("DOEHLER-JARVIS"),
the Borrowers named therein (the "BORROWERS"), the several banks and other
financial institutions party to the Credit Agreement (the "LENDERS"), CHEMICAL
BANK, a New York banking corporation ("CHEMICAL BANK"), as administrative agent
(in such capacity, the "ADMINISTRATIVE AGENT") and as collateral agent (in such
capacity, the "COLLATERAL AGENT") for the Lenders, and CHEMICAL BANK OF
DELAWARE, a Delaware banking corporation, as issuing bank (in such capacity,
the "ISSUING BANK").
A. Pursuant to the Credit Agreement, the Lenders and the Issuing Bank
have extended credit to the Borrowers, and have agreed to extend credit to the
Borrowers, in each case pursuant to the terms and subject to the conditions set
forth therein.
B. Harvard, Doehler-Jarvis and the Borrowers have requested that the
Credit Agreement be amended and that the Lenders grant a limited waiver of
Sections 6.09 and 6.11 of the Credit Agreement, in each case as set forth
herein.
C. Harvard has also requested that the Lenders consent to its
reincorporation in the State of Florida.
D. The Required Lenders are willing so to amend the Credit Agreement,
grant such limited waiver and grant such consent, in each case pursuant to the
terms and subject to the conditions set forth herein.
E. Capitalized terms used but not defined herein shall have the meanings
assigned to them in the Credit Agreement, as amended hereby.
Accordingly, in consideration of the mutual agreements herein contained
and other good and valuable consideration, the sufficiency and receipt of which
are hereby acknowledged, the parties hereto agree as follows:
SECTION 1. AMENDMENT TO SECTION 1.01 OF THE CREDIT AGREEMENT. (a)
Section 1.01 of the Credit Agreement is hereby amended by adding immediately
following the word "Indebtedness" in the second line of the definition of the
term "Consolidated Current Liabilities" the phrase "and, for the fiscal quarter
ending on March 31, 1996, Revolving Loans."
<PAGE> 2
SECTION 2. WAIVER. (a) The Required Lenders hereby waive compliance by
Harvard with the provisions of Section 6.09 of the Credit Agreement for the
two-fiscal-quarter period ending on March 31, 1996, PROVIDED that the ratio
described therein is not less than 1.40 to 1.00 for such period.
(b) The Required Lenders hereby waive compliance by Harvard with the
provisions of Section 6.11 of the Credit Agreement for the fiscal quarter
ending on March 31, 1996, PROVIDED that the ratio described therein does not
exceed 4.75 to 1.00 for such period.
SECTION 3. CONSENT. The Required Lenders hereby consent to Harvard's
reincorporation in the State of Florida, PROVIDED, HOWEVER, that (a) the
certificate or articles of incorporation filed in connection with such
reincorporation and the by-laws adopted in connection therewith do not differ
in any material respect from the existing certificate or articles of
incorporation and by-laws, (b) such reincorporation shall not adversely affect
the Lenders, (c) the Administrative Agent shall have received a favorable
written opinion of counsel for Harvard to such effect and (d) the
Administrative Agent shall have received a certified copy of the certificate or
articles of incorporation and by-laws filed in the State of Florida.
SECTION 4. REPRESENTATIONS AND WARRANTIES. To induce the other parties
hereto to enter into this Amendment, each of Harvard, Doehler-Jarvis and the
Borrowers represents and warrants to each of the Lenders, the Administrative
Agent, the Collateral Agent and the Issuing Bank that, following giving effect
to this Amendment, (a) the representations and warranties set forth in Article
III of the Credit Agreement are true and correct in all material respects on
and as of the date hereof with the same effect as though made on and as of the
date hereof, except to the extent such representations and warranties expressly
relate to an earlier date, and (b) no Default or Event of Default has occurred
and is continuing.
SECTION 5. CONDITIONS TO EFFECTIVENESS. This Amendment shall become
effective on the date that the Administrative Agent shall have received
counterparts of this Amendment that, when taken together, bear the signatures
of Harvard, Doehler-Jarvis, the Borrowers and the Required Lenders.
SECTION 6. EFFECT OF AMENDMENT. Except as expressly set forth herein,
this Amendment shall not by implication or otherwise limit, impair, constitute
a waiver of, or otherwise affect the rights and remedies of the Lenders, the
Administrative Agent, the Collateral Agent, the Issuing Bank, Harvard,
Doehler-Jarvis or the Borrowers under the Credit Agreement or any other Loan
Document, and shall not alter, modify, amend or in any way affect any of the
terms, conditions, obligations, covenants or agreements contained in the Credit
Agreement, or any other Loan Document, all of which are ratified and affirmed
in all respects and shall continue in full force and effect. Nothing herein
shall be deemed to entitle
<PAGE> 3
Harvard, Doehler-Jarvis or the Borrowers to a consent to, or a waiver,
amendment, modification or other change of, any of the terms, conditions,
obligations, covenants or agreements contained in the Credit Agreement, or any
other Loan Document in similar or different circumstances. This Amendment
shall apply and be effective only with respect to the provisions of the Credit
Agreement specifically referred to herein. Any default under this Amendment
shall constitute an Event of Default under the Credit Agreement.
SECTION 7. COUNTERPARTS. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument.
Delivery of any executed counterpart of a signature page of this Amendment by
facsimile transmissions shall be as effective as delivery of a manually
executed counterpart hereof.
SECTION 8. APPLICABLE LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 9. HEADINGS. The headings of this Amendment are for purposes of
reference only and shall not limit or otherwise affect the meaning hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed by their duly authorized officers, all as of the date and year
first above written.
HARVARD INDUSTRIES, INC.,
By: /s/ JOSEPH J. GAGLIARDI
---------------------------
Name: Joseph J. Gagliardi
Title: Vice President-Finance
and Chief Financial Officer
HARMAN AUTOMOTIVE, INC.,
By: /s/ Authorized Officer
---------------------------
Name:
Title:
HAYES-ALBION CORPORATION,
By: /s/ Authorized Officer
---------------------------
Name:
Title:
<PAGE> 4
THE KINGSTON-WARREN CORPORATION,
By: /s/ Authorized Officer
---------------------------
Name:
Title:
DOEHLER-JARVIS, INC.,
By: /s/ Authorized Officer
---------------------------
Name:
Title:
DOEHLER-JARVIS GREENEVILLE, INC.,
By: /s/ Authorized Officer
---------------------------
Name:
Title:
DOEHLER-JARVIS POTTSTOWN, INC.,
By: /s/ Authorized Officer
---------------------------
Name:
Title:
DOEHLER-JARVIS TECHNOLOGIES, INC.,
By: /s/ Authorized Officer
---------------------------
Name:
Title:
DOEHLER-JARVIS TOLEDO, INC.,
By: /s/ Authorized Officer
---------------------------
Name:
Title:
CHEMICAL BANK, individually and
as Administrative Agent,
Collateral Agent and Swingline
Lender,
By: /s/ Authorized Officer
---------------------------
Name:
Title:
<PAGE> 5
CHEMICAL BANK DELAWARE, as Issuing
Bank,
By: /s/
---------------------------
Name:
Title:
COMERICA BANK,
By: /s/
---------------------------
Name:
Title:
FIRST UNION COMMERCIAL CORPORATION
By: /s/ Authorized Officer
---------------------------
Name:
Title:
IBJ SCHRODER BANK AND TRUST COMPANY
By: /s/ Authorized Officer
---------------------------
Name:
Title:
MIDLANTIC BANK, N.A.,
By: /s/ Authorized Officer
---------------------------
Name:
Title:
NBD BANK,
By: /s/
---------------------------
Name:
Title:
SANWA BUSINESS CREDIT CORPORATION,
By: /s/ Authorized Officer
---------------------------
Name:
Title:
<PAGE> 1
EXHIBIT 12.1
HARVARD INDUSTRIES INC.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND
DIVIDENDS ON PREFERRED STOCK
(In thousands of dollars)
<TABLE>
<CAPTION>
Three months ended Six months ended
March 31, March 31,
--------------------- ----------------------
1996 1995 1996 1995
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Pre-tax income (loss)..................................... $ (20,413) $ 9,654 $ (21,237) $ 13,900
Add: Fixed charges........................................ 10,545 4,210 20,829 8,081
---------- ---------- ---------- ----------
Income as adjusted........................................ $ (9,868) $ 13,864 $ (408) $ 21,981
========== ========== ========== ==========
Fixed charges:
Interest on indebtedness.............................. $ 10,311 $ 4,054 $ 20,361 $ 7,769
Portion of rents representative of the interest factor 234 156 468 312
---------- ---------- ---------- ----------
Fixed charges......................................... 10,545 4,210 20,829 8,081
Dividends on preferred stock and accretion................ 3,712 3,766 7,422 7,533
---------- ---------- ---------- ----------
Fixed charges and dividends on preferred stock............ $ 14,257 $ 7,976 $ 28,251 $ 15,614
========== ========== ========== ==========
Ratio of earnings over fixed charges and dividends
on preferred stock ................................... 1.74 x 1.41 x
========== ==========
Deficiency of earnings over fixed charges and
dividends on preferred stock.......................... $ (24,125) $ (28,659)
========== ==========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> OCT-01-1995
<PERIOD-END> MAR-31-1996
<CASH> 3,733
<SECURITIES> 0
<RECEIVABLES> 100,843
<ALLOWANCES> 0
<INVENTORY> 61,889
<CURRENT-ASSETS> 167,713
<PP&E> 408,860
<DEPRECIATION> 101,026
<TOTAL-ASSETS> 641,524
<CURRENT-LIABILITIES> 159,403
<BONDS> 300,000
107,073
0
<COMMON> 70
<OTHER-SE> (92,367)
<TOTAL-LIABILITY-AND-EQUITY> 641,524
<SALES> 411,357
<TOTAL-REVENUES> 411,357
<CGS> 384,776
<TOTAL-COSTS> 406,975
<OTHER-EXPENSES> 5,258
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 20,361
<INCOME-PRETAX> (21,237)
<INCOME-TAX> 1,449
<INCOME-CONTINUING> (22,686)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (22,686)
<EPS-PRIMARY> (4.30)
<EPS-DILUTED> (4.30)
</TABLE>
