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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB
(Mark One)
[x] Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the fiscal year ended June 30, 1997
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from _____________ to _____________
Commission File Number: 0-4036
Kreisler Manufacturing Corporation
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(Name of small business issuer in its charter)
Delaware 22-1044792
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(State of other jurisdiction of I.R.S. employer
incorporation or organization) Identification Number)
5960 Central Avenue, Suite H., St. Petersburg, Florida 33707
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(Address of principal executive offices) (zip code)
Issuer's telephone number: 813-347-1144
Securities registered pursuant to Section 12(b) of the Exchange Act:
Not applicable
Securities registered pursuant to Section 12(g) of the Exchange Act:
Common Stock, $.50 par value per share
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(Title of Class)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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. [x] Yes [ ] No
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [x]
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The Issuer's revenues for its most recent fiscal year was $9,402,005.
The aggregate market value of the voting and non voting common equity held by
non-affiliates of the issuer is approximately $2,329,000 (1).
The number of shares of Common Stock outstanding as of September 17, 1997 was
485,512 shares.
DOCUMENTS INCORPORATED BY REFERENCE
Certain portions of the Company's Annual Report to Shareholders for the fiscal
year ended June 30, 1997 are incorporated by reference in Parts I and II of this
Report. With the exception of the information incorporated by reference in Parts
I and II of this Report, the Company's Annual Report to Shareholders for the
fiscal year ended June 30, 1997 is not to be deemed "filed" with the Securities
and Exchange Commission for any purpose.
Certain portions of the Company's Proxy Statement to be filed in connection with
its 1997 Annual Meeting of Shareholders are incorporated by reference in Part
III of this Report.
Transitional Small Business Disclosure Format (check one)
[ ] Yes [X] No
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(1) The aggregate dollar amount of the voting and non-voting common equity stock
set forth equals the number of shares of Common Stock outstanding, reduced by
the number of shares of Common Stock held by executive officers, directors and
stockholders owning in excess of 10% of the registrant's common stock multiplied
by the last closing price for the Common Stock as quoted on the National
Association of Securities Dealers Automated Quotation System on September 17,
1997. The information provided shall in no way be construed as an admission that
any person whose holdings are excluded from this figure is an affiliate of the
registrant or that any person whose holdings are included in this figure is an
affiliate of the registrant or that any person whose holdings are included in
this figure is not an affiliate of the registrant and any such admission is
hereby disclaimed. The information provided herein is included solely for record
keeping purposes of the Securities and Exchange Commission.
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TABLE OF CONTENTS
FORM 10-KSB ANNUAL REPORT 1997
KREISLER MANUFACTURING CORPORATION
PAGE NO.
PART I........................................................................1
ITEM 1. DESCRIPTION OF BUSINESS.........................................1
ITEM 2. DESCRIPTION OF PROPERTY.........................................2
ITEM 3. LEGAL PROCEEDINGS...............................................3
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.............3
PART II.......................................................................3
ITEM 5. MARKET FOR THE COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS.............................................3
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION.......................................................4
ITEM 7. FINANCIAL STATEMENTS............................................4
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.............................5
PART III......................................................................5
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE
ACT.............................................................5
ITEM 10. EXECUTIVE COMPENSATION..........................................5
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT......................................................5
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS..................5
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K................................5
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PART I
Item 1. Description of Business
Kreisler Manufacturing Corporation is a Delaware business corporation which was
incorporated on December 13, 1968. Kreisler Manufacturing Corporation and its
wholly-owned subsidiary, Kreisler Industrial Corporation (collectively the
"Company") manufacture precision metal components and assemblies at Elmwood
Park, New Jersey for use in military and commercial aircraft engines.
Products
The Company fabricates precision metal components and assemblies primarily for
aircraft engines with both military and commercial applications. The primary
function of the Company's products is to transport fluids, including air, to
various parts of the aircraft or aircraft engine. The redirection of air is a
major element in reducing the high temperatures generated by aerospace
propulsion. These high temperatures are a limiting factor in increasing thrust
in jet engines.
Tube assemblies may be made of various materials and configurations, including
titanium, inconel and stainless steel. These quality controlled and highly
engineered manifold assemblies transfer fuel for combustion, oil for
lubrication, hydraulic fluid to activate thrust reversers and impingement tubes
or baffles to cool vanes in the combustion section of the engine.
Over the past three years, ninety percent of the Company's products were tubular
assemblies. For the fiscal year ended June 30, 1997, the sales activity was
aproximately thirty-five percent for military aircraft engines and sixty-five
percent for commercial aircraft engines.
Substantially all sales of products are made through an in-house sales staff
supported by a government sales representative. All products are manufactured to
the blueprints and specifications of the particular customer. Orders for these
are received through competitive proposals, which are made in response to
requests for bids from contractors who are frequently supplying engines to
various branches of the Untied States Government or to commercial businesses.
Customers
Four customers of the Company accounted for 73% or more of the consolidated net
sales of the Company in the fiscal year ended June 30, 1997.
Competition
The fields in which the Company operates are highly competitive and among the
Company's competitors are enterprises which are substantially larger than the
Company and possess greater financial, production and marketing resources, as
well as numerous smaller concerns. The Company is not a significant factor in
its fields. The principal methods of competition are price,
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quality and delivery. In today's market flexibility, quality, cost and speed of
delivery are required elements. The Company believes that it is competitive on
all the above elements.
Sources of Supply
The Company does not have any long-term or fixed requirement agreements with its
suppliers.
Materials for the products within the Company are purchased, as required, from
various suppliers. At times, approved vendors are designated by the Company's
customers. The Company believes alternative sources of supply for material are
available at reasonable prices.
Production
Fabricated precision metal components or assemblies are manufactured and
assembled by the Company to customer specifications. To meet the exacting
requirements of its customers, the Company must exercise rigid quality control.
Employees
At June 30, 1997, the Company employed approximately 90 persons, all of whom are
full-time employees. Approximately 49 are subject to a collective bargaining
agreement with the United Service Employees Union which terminates on December
4, 1997.
Government Regulations
The Company is subject to various Federal and State regulations concerning the
conduct of its business including regulations under the Occupational Health and
Safety Act and various acts dealing with the environment.
A material portion of the business of the Company is subject to provisions which
permit the termination of contracts at the election of the U.S Government or its
prime contractors. Contracts with the U.S. Government and with suppliers to the
U.S. Government generally provide for termination at any time for the
convenience of the U.S. Government and its prime contractors, and upon such
termination a contractor is entitled to receive payment for the work performed
plus a pro rata portion of the profit it would have earned but for the
termination.
Item 2. Description of Property
The Company's industrial plant is located at Elmwood Park, New Jersey and
consists of 52,000 square feet of leased space. The facility is approximately 40
years old and the average age of the equipment is 15 years. The lease expires
October 1, 2000. The annual lease expense on the plant facilities is $79,992.
During fiscal 1997, $53,000 of capital expenditures were made. Management
believes that the
2
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Company's present industrial plant facilities are suitable for the Company's
current and near term operations and that these properties are adequately
covered by insurance.
Item 3. Legal Proceedings.
By letter dated June 22, 1993 from the Environmental Protection Agency, the
Agency notified the Company that it had evaluated information relating to the
transportation of waste in 1962-1963-1964 to the Caldwell Trucking Company
Superfund Site and based upon this information EPA believes that the Company is
a Potentially Responsible Party ("PRP") pursuant to Section 107(a) of the
Comprehensive Environmental Response compensation and Liability Act, 42 U.S.C.
Section 9607(a). The letter from EPA notified Kreisler of its potential
liability for all costs incurred and to be incurred by the government relating
to the Site. According to the letter, under CERCLA, and other laws, potentially
liable parties, such as Kreisler, may be ordered to perform response actions
deemed necessary by EPA to protect the public health, welfare or the
environment, and may be liable for all costs incurred by the government in
responding to any release or threatened release at the Site.
The EPA and a PRP Group have filed suit against the Company for its costs with
regard to the Site. Both cases are currently under a stay. The Company does not
know the amount which will be sought in these cases. Pursuant to the terms of
several insurance policies, the legal defense burden is being shared by these
insurance companies.
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable.
PART II
Item 5. Market for the Common Equity and Related Stockholder Matters
The Company's Common Stock is traded in over the counter market and is quoted on
the national Association of Securities Dealers, Inc. Automated Quotation System
(NASDAQ). There is no established public trading market for the Company's Common
Stock. The following table sets forth the sales prices for the Common Stock for
each quarter in the two year period June 30, 1997.
3
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Quarter 1997 1996
High Low High Low
Fourth 7 1/8 5 4 1/2 2 3/4
Third 7 1/4 4 5/8 5 1/4 2 3/4
Second 4 5/8 3 5/8 5 1/2 4 1/4
First 3 1/2 2 5/8 6 1/4 5 1/2
The Company has not paid any dividends during the last two fiscal years. The
holders of the Company's Common Stock are entitled to receive dividends when, as
and if declared by the Board of Directors out of funds legally available
therefore. It is the Company's current policy not to pay dividends and to retain
earnings for future growth of the Company.
At June 30, 1997, the Company had approximately 400 stockholders of record.
Item 6. Management's Discussion and Analysis or Plan of Operation
"Management's Discussion and Analysis" on page 8 of the Annual Report to
Stockholders is incorporated herein by reference.
Item 7. Financial Statements
The following consolidated financial statements of the Company and its
subsidiaries and the Auditor's Report included on pages 1 through 7 of the
Annual Report to Stockholders for the year ended June 30,1997 are incorporated
herein by reference:
Consolidated Balance Sheets - June 30, 1997
Consolidated Statements of Operations - Years Ended June 30, 1997 and
1996
Consolidated Statements of Changes in Stockholders' Equity - June 30,
1997 and 1996
Consolidated Statements of Cash Flows - Years Ended June 30, 1997 and
1996
Notes to Consolidated Financial Statements
Report of Independent Certified Public Accountants
4
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Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
Not Applicable.
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act
Incorporated by reference to the Company's Proxy Statement relating to the 1997
Annual Meeting of Stockholders.
Item 10. Executive Compensation
Incorporated by reference to the Company's Proxy Statement relating to the 1997
Annual Meeting of Stockholders.
Item 11. Security Ownership of Certain Beneficial Owners and Management
Incorporated by reference to the Company's Proxy Statement relating to the 1997
Annual Meeting of Stockholders.
Item 12. Certain Relationships and Related Transactions
Incorporated by reference to the Company's Proxy Statement relating to the 1997
Annual Meeting of Stockholders.
Item 13. Exhibits and Reports on Form 8-K
(a) The following exhibits are filed with this Report.
1 Financial Statements.
3.1 Certificate of Incorporation, including amendment
3.2 Bylaws
10.1 1997 Stock Option Plan*
10.2 Lease Agreement
10.3 Union Agreement
5
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11 Statement re computation of per share earnings.
13 Annual Report to Stockholders for the fiscal year ended June
30, 1997 (such report, except for those portions expressly
incorporated by reference to this Annual Report on Form 10-K,
is furnished for the information of the Commission and is not
to be deemed filed as part of this Report).
21 Subsidiaries of the Registrant.
27 Financial Data Schedule
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* Compensatory Plan
(b) Reports on 8-K
No reports on Form 8-K were filed during the last period covered by
this report.
6
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SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
KREISLER MANUFACTURING CORPORATION
By: /s/ Edward L. Stern
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Edward L. Stern, President
Date: September 19, 1997
In accordance with the Securities Exchange Act, this report has been signed
below by the following persons on behalf of the registrant and in the capacities
and on the dates indicated.
NAME TITLE DATE
- ---- ----- ----
/s/ Edward L. Stern Director, President and September 19, 1997
- ------------------------- Chief Financial Officer
Edward L. Stern (Principal Executive Officer,
Principal Financial Officer
and Principal Accounting
Officer)
/s/ Robert S. Krupp Director September 19, 1997
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Robert S. Krupp
/s/ Harry Brill-Edwards Director September 19, 1997
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Harry Brill-Edwards
/s/ Edward A. Stern Director, Vice President September 19, 1997
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Edward A. Stern
/s/ Michael D. Stern Director, Vice President September 19, 1997
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Michael D. Stern
7
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EXHIBIT INDEX
3.1 Certificate of Incorporation, including amendments
3.2 Bylaws
10.1 1997 Stock Option Plan*
10.2 Lease Agreement
10.3 Union Agreement
11 Statement re computation of per share earnings.
13 Annual Report to Stockholders for the fiscal year ended June
30, 1997 (such report, except for those portions expressly
incorporated by reference to this Annual Report on Form 10-K,
is furnished for the information of the Commission and is not
to be deemed filed as part of this Report).
21 Subsidiaries of the Registrant.
27 Financial Data Schedule
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EXHIBIT 3.1
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CERTIFICATE OF INCORPORATION
of
KREISLER MANUFACTURING CORPORATION
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BUSBY and RIVKIN
750 Third Avenue
New York, New York 10017
(212) 986-5220
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CERTIFICATE OF INCORPORATION
of
KREISLER MANUFACTURING CORPORATION
--------------
The undersigned, a natural person, for the purpose of organizing a
corporation for conducting the business and promoting the purposes hereinafter
stated, under the provisions and subject to the requirements of the laws of the
State of Delaware (particularly Chapter 1, Title 8 of the Delaware Code and the
acts amendatory thereof and supplemental thereto, and known, identified and
referred to as the "General Corporation Law of the State of Delaware"), hereby
certifies that:
FIRST: The name of the corporation (hereinafter called the
"corporation) is Kreisler Manufacturing Corporation.
SECOND: The address, including street, number, city and county, of the
registered office of the corporation in the State of Delaware is 229 South State
Street, City of Dover, County of Kent; and the name of the registered agent of
the corporation in the State of Delaware at such address is The Prentice-Hall
Corporation System, Inc.
THIRD: The nature of the business and of the purposes to be conducted
and promoted by the corporation, which shall be in addition to the authority of
the corporation to conduct any lawful business, to promote any lawful purpose,
and to engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of the State of Delaware, is as
follows:
To manufacture, buy or otherwise acquire, sell, pledge
or otherwise dispose of, hold, own, import, export, lease and
deal and trade in general merchandise and all goods, wares and
merchandise of every nature and description, and particularly
but without limitation on the foregoing, to design,
manufacture, purchase or otherwise acquire, sell, pledge or
otherwise dispose of, import, export, repair, engrave, cut,
stamp, set and generally work with and upon and deal in
jewelry, gems, precious and semi-precious stone, cameos, gold,
silver, platinum and other wares, plate, utensils, ornaments
and articles, time pieces, pocket books, handbags and leather
goods and novelties of all kinds, umbrellas, parasols and
canes, personal furnishings and travelers' supplies and
equipment, china, glass and porcelain wares, novelties of all
kinds, optical goods and supplies, watchbands, bracelets, and
straps, pens and pencils, cigarette lighters, and generally to
do all things and to carry on all lines of trade common to or
in connection with the jewelry business, wholesale, retail,
consignment and manufacturing, and to do all of the
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foregoing as principal or agent on commission or otherwise and
to design, manufacture, purchase or otherwise acquire, sell,
pledge or dispose of, import, export and generally work with
and upon and deal in equipment, appliances, accessories,
apparatus and machinery used in connection with or relating to
the manufacture of aircraft of every description and all parts
and components thereof; and generally to do all things and to
carry on all lines of trade common to or in connection with a
general manufacturing business, and to do all of the foregoing
as principal or agent on commission or otherwise.
To purchase, receive, take by grant, gift, devise,
bequest or otherwise, lease, or otherwise acquire, own, hold,
improve, employ, use and otherwise deal in and with real or
personal property, or any interest therein, wherever situated,
and to sell, convey, lease, exchange, transfer or otherwise
dispose of, or mortgage or pledge, all or any of its property
and assets, or any interest therein, wherever situated.
To engage generally in the real estate business as
principal, agent, broker and in any lawful capacity, and
generally to take, lease purchase, or otherwise acquire, and
to own, use, hold, sell, convey, exchange, lease, mortgage,
work, clear, improve, develop, divide, and otherwise handle,
manage, operate, deal in and dispose of real estate, real
property, lands, multiple-dwelling structures, houses,
buildings and other works and any interest or right therein;
to take, lease, purchase or otherwise acquire, and to own,
use, hold, sell, convey, exchange, hire, lease, pledge,
mortgage, and otherwise handle, and deal in and dispose of, as
principal, agent, broker, and in any lawful capacity, such
personal property, chattels, chattels real, rights, easements,
privileges, choses in action, notes, bonds, mortgages, and
securities as may lawfully be acquired, held, or disposed of;
and to acquire, purchase, sell, assign, transfer, dispose of,
and generally deal in and with, as principal, agent, broker,
and in any lawful capacity, mortgages and other interests in
real, personal, and mixed properties; to carry on a general
construction, contracting, building, and realty management
business as principal, agent, representative, contractor,
subcontractor, and in any other lawful capacity.
To carry on a general mercantile, industrial,
investing, and trading business in all of its branches; to
devise, invent, manufacture, fabricate, assemble, install,
service, maintain, alter, buy, sell, import, export, license
as licensor or licensee, lease as lessor or lessee,
distribute, job, enter into, negotiate, execute, acquire, and
assign contracts in respect of, acquire, receive, grant, and
assign licensing arrangements, options, franchises, and other
rights in respect of, and
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generally deal in and with, at wholesale and retail, as
principal, and as sales, business, special, or general agent,
representative, broker, factor, merchant, distributor, jobber,
advisor, and in any other lawful capacity, goods, wares,
merchandise, commodities, and unimproved, improved, finished,
processes, and other real, personal, and mixed property of any
and all kinds, together with the components, resultants, and
by-products thereof.
To apply for, register, obtain, purchase, lease, take
licenses in respect of or otherwise acquire, and to hold, own,
use, operate, develop, enjoy, turn to account, grant licenses
and immunities in respect of, manufacture under and to
introduce, sell, assign, mortgage, pledge or otherwise dispose
of, and, in any manner deal with and contract with reference
to:
(a) inventions, devices, formulae, processes and any
improvements and modifications thereof;
(b) letters patent, patent rights, patented processes,
copyrights, designs, and similar rights, trade-marks, trade
names, trade symbols and other indications of origin and
ownership granted by or recognized under the laws of the
United States of America, the District of Columbia, any state
or subdivision thereof, and any commonwealth, territory,
possession, dependency; colony, possession, agency or
instrumentality of the United States of America and of any
foreign country, and all rights connected therewith or
appertaining thereunto;
(c) franchises, licenses, grants and concessions.
To guarantee, purchase, take, receive, subscribe for,
and otherwise acquire, own, hold, use, and otherwise employ,
sell, lease, exchange, transfer, and otherwise dispose of,
mortgage, lend, pledge, and otherwise deal in and with,
securities (which term, for the purpose of this Article THIRD,
includes, without limitation of the generality thereof, any
shares of stock, bonds, debentures, notes, mortgages, other
obligations, and any certificates, receipts or other
instruments representing rights to receive, purchase or
subscribe for the same, or representing any other rights or
interests therein or in any property or assets) of any
persons, domestic and foreign firms, associations, and
corporations, and by any government or agency or
instrumentality thereof; to make payment therefor in any
lawful manner; and, while owner of any such securities, to
exercise any and all rights, powers and privileges in respect
thereof, including the right to vote.
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To make, enter into, perform and carry out contracts of
every kind and description with any person, firm, association,
corporation or government or agency or instrumentality
thereof.
To acquire by purchase, exchange or otherwise, all, or
any part of, or any interest in, the properties, assets,
business and good will of any one or more persons, firms,
associations or corporations heretofore or hereafter engaged
in any business for which a corporation may now or hereafter
be organized under the laws of the State of Delaware; to pay
for the same in cash, property or its own or other securities;
to hold, operate, reorganize, liquidate, sell or in any manner
dispose of the whole or any part thereof; and in connection
therewith, to assume or guarantee performance of any
liabilities, obligations or contracts of such persons, firms,
associations or corporations, and to conduct the whole or any
part of any business thus acquired.
To lend money in furtherance of its corporate purposes
and to invest and reinvest its funds from time to time to such
extent, to such persons, firms, associations, corporations,
governments or agencies or instrumentalities thereof, and on
such terms and on such security, if any, as the Board of
Directors of the corporation may determine.
To make contracts of guaranty and suretyship of all
kinds and endorse or guarantee the payment of principal,
interest or dividends upon, and to guarantee the performance
of sinking fund or other obligations of, any securities, and
to guarantee in any way permitted by law the performance of
any of the contracts or other undertakings in which the
corporation may otherwise be or become interested, of any
persons, firm, association, corporation, government or agency
or instrumentality thereof, or of any other combination,
organization or entity whatsoever.
To borrow money without limit as to amount and at such
rates of interest as it may determine; from time to time to
issue and sell its own securities, including its shares of
stock, notes, bonds, debentures, and other obligations, in
such amounts, on such terms and conditions, for such purposes
and for such prices, now or hereafter permitted by the laws of
the State of Delaware and by this certificate of
incorporation, as the Board of Directors of the corporation
may determine; and to secure any of its obligations by
mortgage, pledge or other encumbrance of all or any of its
property, franchises and income.
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To be a promoter or manager of other corporations of
any type or kind; and to participate with others in any
corporation, partnership, limited partnership, joint venture,
or other association of any kind, or in any transaction,
undertaking or arrangement which the corporation would have
power to conduct by itself, whether or not such participation
involves sharing or delegation of control with or to others.
To draw, make, accept, endorse, discount, execute, and
issue promissory notes, drafts, bills of exchange, warrants,
bonds, debentures, and other negotiable or transferable
instruments and evidences of indebtedness whether secured by
mortgage or otherwise, as well as to secure the same by
mortgage or otherwise, so far as may be permitted by the laws
of the State of Delaware.
To purchase, receive, take, reacquire or otherwise
acquire, own and hold, sell, lend, exchange, reissue, transfer
or otherwise dispose of, pledge, use, cancel, and otherwise
deal in and with its own shares and its other securities from
time to time to such an extent and in such manner and upon
such term as the Board of Directors of the corporation shall
determine; provided that the corporation shall not use its
funds or property for the purchase of its own shares of
capital stock when its capital is impaired or when such use
would cause any impairment of its capital, except to the
extent permitted by law.
To organize, as an incorporator, or cause to be
organized under the laws of the State of Delaware, or of any
other State of the United States of America, or of the
District of Columbia, or of any commonwealth, territory,
dependency, colony, possession, agency, or instrumentality of
the United States of America, or of any foreign country, a
corporation or corporations for the purpose of conducting and
promoting any business or purpose for which corporations may
be organized, and to dissolve, wind up, liquidate, merge or
consolidate any such corporation or corporations or to cause
the same to be dissolved, wound up, liquidated, merged or
consolidated.
To conduct its business, promote its purposes, and
carry on its operations in any and all of its branches and
maintain offices both within and without the State of
Delaware, in any and all States of the United States of
America, in the District of Columbia, and in any or all
commonwealths, territories, dependencies, colonies,
possessions, agencies, or instrumentalities of the United
States of America and of foreign governments.
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To promote and exercise all or any part of the
foregoing purposes and powers in any and all parts of the
world, and to conduct its business in all or any of its
branches as principal, agent, broker, factor, contractor, and
in any other lawful capacity, either alone or through or in
conjunction with any corporations, associations, partnerships,
firms, trustees, syndicates, individuals, organizations, and
other entities in any part of the world, and, in conducting
its business and promoting any of its purposes, to maintain
offices, branches and agencies in any part of the world, to
make and perform any contracts and to do any acts and things,
and to carry on any business, and to exercise any powers and
privileges suitable, convenient, or proper for the conduct,
promotion, and attainment of any of the business and purposes
herein specified or which at any time may be incidental
thereto or may appear conducive to or expedient for the
accomplishment of any of such business and purposes and which
might be engaged in or carried on by a corporation
incorporated or organized under the General Corporation Law of
the State Delaware, and to have and exercise all of the powers
conferred by the laws of the State of Delaware upon
corporations incorporated or organized under the General
Corporation Law of the State of Delaware.
The foregoing provisions of this Article THIRD shall be construed both
as purposes and powers and each as an independent purpose and power. The
foregoing enumeration of specific purposes and powers shall not be held to limit
or restrict in any manner the purposes and powers of the corporation, and the
purposes and powers herein specified shall, except when otherwise provided in
this Article THIRD, be in no wise limited or restricted by reference to, or
inference from, the terms of any provision of this or any other Article of this
certificate of incorporation; provided, that the corporation shall not conduct
any business, promote any purpose, or exercise any power or privilege within or
without the State of Delaware which, under the laws thereof, the corporation may
not lawfully conduct, promote, or exercise.
FOURTH: The corporation shall be authorized to issue one class of
shares of stock to be designated "Common Stock"; the total number of shares
which the corporation shall have authority to issue is 3,000,000; and each such
share shall have a par value of Fifty Cents ($0.50).
No holder of any stock of the corporation of any class now or hereafter
authorized, shall as such holder, be entitled as of right to purchase or
subscribe for any shares of stock of the corporation of any class or any series
now or hereafter authorized, or any securities convertible into or exchangeable
for any such shares, or any warrants, options, rights or other instruments
evidencing rights to subscribe for, or purchase any such shares, whether such
shares, securities, warrants, options, rights or other instruments be unissued
or issued and thereafter acquired by the corporation.
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<PAGE>
FIFTH: The name and the mailing address of the incorporator are as
follows:
NAME MAILING ADDRESS
---- ---------------
Tobias Stern 9015 Bergenline Avenue
North Bergen, New Jersey 07047
SIXTH: The corporation is to have perpetual existence.
SEVENTH: Whenever a compromise or arrangement is proposed between this
corporation and its creditors or any class of them and/or between this
corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this corporation under
the provisions of section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers appointed
for this corporation under the provisions of section 279 of Title 8 of the
Delaware Code order a meeting of the creditors or class of creditors, and/or of
the stockholders or class of stockholders of this corporation, as the case may
be, to be summoned in such manner as the said court directs. If a majority in
number representing three-fourths in value of the creditors or class of
creditors, and/or of the stockholders or class of stockholders of this
corporation, as the case may be, agree to any compromise or arrangement and to
any reorganization of this corporation as consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application has been made,
be binding on all the creditors or class of creditors, and/or on all the
stockholders or class of stockholders, of this corporation, as the case may be,
and also on this corporation.
EIGHTH: For the management of the business and for the conduct of the
affairs of the corporation, and in further definition, limitation and regulation
of the powers of the corporation and of its directors and of its stockholders or
any class thereof, as the case may be, it is further provided:
1. The management of the business and the conduct of
the affairs of the corporation, including the election of the
Chairman of the Board of Directors, if any, the President, the
Treasurer, the Secretary, and other principal officers of the
corporation, shall be vested in its Board of Directors. The
number of directors which shall constitute the whole Board of
Directors shall be fixed by, or in the manner provided in, the
By-Laws. The phrase "whole Board" and the phrase "total number
of directors" shall be deemed to have the same meaning, to
wit, the total number of directors which the corporation would
have if there were no vacancies. No election of directors need
be by written ballot.
2. The original By-Laws of the corporation shall be
adopted by the incorporator. Thereafter, the power to make,
alter, or repeal the By-Laws, and to adopt any new By-Law,
except a By-Law
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<PAGE>
classifying directors for election for staggered terms, shall
be vested in the Board of Directors.
3. Whenever the corporation shall be authorized to
issue only one class of stock, each outstanding share shall
entitle the holder thereof to notice of, and the right to vote
at, any meeting of stockholders. Whenever the corporation
shall be authorized to issue more than one class of stock, no
outstanding share of any class of stock which is denied voting
power under the provisions of the certificate of incorporation
shall entitle the holder thereof to notice of, and the right
to vote, at any meeting of stockholders except as the
provisions of paragraph (d)(2) of section 242 of the General
Corporation Law and of sections 251, 252, and 253 of the
General Corporation Law shall otherwise require; provided,
that no share of any such class which is otherwise denied
voting power shall entitle the holder thereof to vote upon the
increase or decrease in the number of authorized shares of
said class.
4. In lieu of taking any permissive or requisite action
by vote at a meeting of stockholders, any such vote and any
such meeting may be dispensed with if either all of the
stockholders entitled to vote upon the action at any such
meeting shall consent in writing to any such corporate action
being taken or if less than all of the stockholders entitled
to vote upon the action at any such meeting shall consent in
writing to any such corporate action taken upon less than the
unanimous written consent of all stockholders entitled to vote
upon any such action shall be by written consent of the
stockholders holding at least the minimum percentage of the
votes required to be cast to authorize any such action under
the provisions of the General Corporation Law or under the
provisions of the certificate of incorporation as permitted by
the provisions of the General Corporation Law; and, provided,
that prompt notice be given to all stockholders entitled to
vote on any such action of taking of such action without a
meeting any by less than unanimous written consent.
NINTH: (a) 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 a committee thereof which authorized the contract or
transaction, or solely because his or their votes are counted for such purpose,
if:
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<PAGE>
(1) The material facts as to his interest and as
to the contract or transaction are disclosed or are
known to the Board of Directors or the committee, and
the Board or committee in good faith authorizes the
contract or transaction by a vote sufficient for such
purpose without counting the vote of the interested
director or directors; or
(2) The material facts as to his interest and as
to the contract or transaction are disclosed or are
known to the stockholders entitled to vote thereon, and
the contract or transaction is specifically approved in
good faith by vote of the stockholders; or
(3) 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 stockholders.
(b) 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 authorized the
contract or transaction.
TENTH: (a) The corporation shall have power to 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 serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or 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 interest 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.
(b) The corporation shall have power to 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 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
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<PAGE>
corporation and 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 for negligence or misconduct in the performance of his duty to the
corporation unless and only to the extent that the Court of Chancery 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 indemnify for such
expenses which the Court of Chancery or such other court shall deem proper.
(c) To the extent that a director, officer, employee or agent
of the corporation has been successful on the merits or otherwise in defense of
any action, suit or proceeding referred to in paragraphs (a) and (b), 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.
(d) Any indemnification under paragraphs (a) and (b) (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 paragraphs (a) and (b). Such
determination shall be made (1) 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 (2) 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 (3) by the stockholders.
(e) Expenses incurred in defending a civil or criminal action,
suit or proceeding may be paid by the corporation in advance of the final
disposition of such action, suit or proceeding as authorized by the Board of
Directors in the specific case upon receipt of an undertaking by or on behalf of
the director, officer, employee or agent to repay such amount unless it shall
ultimately be determined that he is entitled to be indemnified by the
corporation as authorized in this Article.
(f) The indemnification provided by this Article shall not be
deemed exclusive of any other rights to which those seeking indemnification may
be entitled under any bylaw, agreement, vote of stockholders or disinterested
directors or otherwise, both as to action in his official capacity and as to
action in another capacity while holding such office, and shall 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.
(g) The corporation shall have power to purchase and maintain
insurance on behalf of any person who 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 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 to indemnify him
against such liability under the provisions of this Article.
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<PAGE>
ELEVENTH: From time to time any of the provisions of this certificate
of incorporation may be amended, altered or repealed, and other provisions
authorized by the laws of the State of Delaware at the time in force may be
added or inserted in the manner and at the time prescribed by said laws, and all
rights at any time conferred upon the stockholders of the corporation by this
certificate of incorporation are granted subject to the provisions of this
Article ELEVENTH.
Executed at New York, New York on December 14, 1968.
---------------------------
Tobias Stern
Incorporator
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<PAGE>
STATE OF NEW YORK )
) ss.
COUNTY OF NEW YORK )
BE IT REMEMBERED that, on December 14, 1968, before me, a Notary Public
duly authorized by law to take acknowledgment of deeds, personally came Tobias
Stern, the incorporator who duly executed the foregoing certificate of
incorporation before me and acknowledged the same to be his act and deed, and
that the facts therein stated are true.
GIVEN under my hand on December 14, 1968.
--------------------------------
Daniel P. Lund
Notary Public, State of New York
No. 31-7622550
Qualified in New York County
Commission Expires March 30, 1970
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
KREISLER MANUFACTURING CORPORATION
KREISLER MANUFACTURING CORPORATION, a corporation organized and
existing under and by virtue of the General Corporation Law of the State of
Delaware, does hereby certify:
FIRST: That at a meeting of the Board of Directors of Kreisler
Manufacturing corporation (the "Corporation"), resolutions were duly adopted
setting forth a proposed amendment to the Certificate of Incorporation of the
Corporation, declaring said amendment to be advisable and calling a meeting of
the stockholders of the Corporation for consideration thereof. The resolution
setting forth the proposed amendment is as follows:
"RESOLVED, that Article Tenth of the Certificate of Incorporation of
the Corporation shall be amended and restated in its entirety to read as stated
on Exhibit "A" attached hereto."
SECOND: That thereafter, pursuant to resolution of its Board of
Directors, an annual meeting of the stockholders of the Corporation was duly
called and held, upon notice in accordance with Section 222 of the General
Corporation Law of the State of Delaware, at which meeting the necessary number
of shares as required by statute were voted in favor of the amendment.
THIRD: That said amendment was duly adopted in accordance with the
provisions of Section 242 of "he General Corporation Law of the State of
Delaware.
FOURTH: That the capital of Corporation shall not be reduced under or
by reason of said amendment.
IN WITNESS WHEREOF, Kreisler Manufacturing Corporation has caused this
Certificate to be signed by Edward L. Stern, its President, and attested by
Irene Clark, its Assistant Secretary, this 26th day of November, 1991.
KREISLER MANUFACTURING
CORPORATION
Attest: ____________________________ By: ____________________________
Irene Clark, Edward L. Stern
Assistant Secretary President
<PAGE>
EXHIBIT A
TO
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
KREISLER MANUFACTURING CORPORATION
TENTH. (a) A director shall have no personal liability to the
corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director; provided that this sentence shall not eliminate or limit the
liability of a director (i) for any breach of the directors duty of loyalty to
the corporation or its stockholders, (ii) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law,
(iii) under Section 174 of the Delaware General Corporate Law, or (iv) for any
transaction from which the director derived an improper personal benefit. This
Article Tenth shall not eliminate or limit the liability of a director for any
act or omission occurring prior to date when this Article Tenth becomes
effective.
(b) The corporation shall, to the fullest extent permitted by
applicable law, indemnify its directors and officers who were or are a party or
are threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (whether or not such action, suit or proceeding arises or arose by
or in the right of the corporation or other entity) by reason of the fact that
such director or officer is or was a director or officer of the corporation or
is or was serving at the request of the corporation as a director, officer,
employee, general partner, agent or fiduciary of another corporation,
partnership, joint venture, trust or other enterprise (including service with
respect to employee benefit plans), against expenses (including, but not limited
to, attorneys' fees and costs), judgments, fines (including excise taxes
assessed on a person with respect to any employee benefit plan) and amounts paid
in settlement actually and reasonably incurred by such director or officer in
connection with such action, suit or proceeding, except as otherwise provided in
subsection (d) of this Article Tenth. Persons who are directors or officers of
the corporation prior to the date this Article Tenth is approved by the
corporation's stockholders, but who do not hold such office on or after such
date, shall not be covered by this subsection (b) of Article Tenth. A director
or officer of the corporation entitled to indemnification under this subsection
(b) in this Article Tenth is hereafter in this Article Tenth referred to as a
"covered person."
(c) Expenses incurred by a covered person in defending a
threatened, pending or completed civil or criminal 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 person to repay such amount if it shall ultimately be determined that such
person is not entitled to be indemnified by the corporation, except as otherwise
provided in subsection (d) of this Article Tenth.
(d) No indemnification under subsection (b) of this Article
Tenth or advancement or reimbursement of expenses under subsection (c) of this
Article Tenth shall be provided to a covered person (A) with respect to expenses
or the payment of profits arising from
<PAGE>
purchase or sale of the securities of the corporation in violation of Section
16(b) of the Securities Exchange Act of 1934; (B) if a final unappealable
Judgment or award establishes that such director or officer engaged in
intentional misconduct or a transaction from which he derived an improper
personal benefit; (C) for expenses or liabilities of any type whatsoever
(including, but not limited to, judgments, fines, and amounts paid in
settlement) which have been paid directly to such person by an insurance carrier
under a policy of officers' and directors' liability insurance maintained by the
corporation or other enterprise, and (D) for amounts paid in settlement of any
threatened, pending, or completed action, suit or proceeding without the written
consent of the corporation, which written consent shall not be unreasonably
withheld. The Board of Directors of the corporation is hereby authorized, at any
time by resolution and without stockholder approval, to add to the above list of
exceptions from the right of indemnification under subsection (b) of this
Article Tenth or advancement or reimbursement of expenses under subsection (c)
of this Article Tenth, but any such additional exception shall not apply with
respect to any event, act or omission which has occurred prior to the date the
Board of Directors in fact adopts such resolution. Any such additional exception
may at any time after its adoption, be amended, supplemented, waived or
terminated by resolution of Board of Directors of the corporation.
(e) The indemnification and advancement or reimbursement of
expenses provided by, or granted pursuant to this Article Tenth shall continue
as to a person who has ceased to be a director or officer of the corporation,
and shall inure to the benefit of the heirs, executors and administrators of
such person.
(f) The term to the "fullest extent permitted by applicable
law", as used in this Article Tenth, shall mean the maximum extent permitted by
public policy, common law or statute. Any covered person may, to the fullest
extent permitted by applicable law, elect to have the right to indemnification
or to advancement or reimbursement of expenses interpreted, at such person's
option (i) on a basis of the applicable law on the date this Article Tenth was
approved by stockholders, or (ii) on the basis of the applicable law in effect
at the time of the occurrence of the event or events giving rise to the action,
suit or proceeding, or (iii) on the basis of the applicable law in effect at the
time indemnification is sought.
(g) The right of a covered person to be indemnified or to
receive an advancement or reimbursement of expenses pursuant to this Article
Tenth (i) may also be enforced as a contract right pursuant to which the person
entitled thereto may bring suit is if the provisions hereof were set forth in a
separate written contract between the corporation and such person, (ii) to the
fullest extent permitted by applicable law, is intended to be retroactive and
shall be available with respect to events occurring prior to the adoption
hereof, (iii) shall continue to exist after the rescission or restrictive
modification (as determined by such person) of this Article Tenth with respect
to events, acts or emissions occurring before such rescission or restrictive
modification is adopted.
(h) If a request for indemnification or for the advancement or
reimbursement of expenses pursuant hereto is not paid in full by the corporation
within thirty days after a written claim has been received by the corporation
together with all supporting information reasonably requested by the
corporation, the claimant may at any time thereafter bring suit against the
2
<PAGE>
corporation to recover the unpaid amount of the claim (plus interest at the
prime rate announced from time to time by the corporation's primary banker) and,
if successful in whole or in part, the claimant shall be entitled also to be
paid the expenses (including, but not limited to, attorney's fees and costs) of
prosecuting such claim. Neither the failure of the corporation (including its
board of directors, independent legal counsel, or its stockholders) to have made
a determination prior to the commencement of such action that indemnification of
or the advancement or reimbursement of expenses to the claimant is proper in the
circumstances, nor an actual determination by the corporation (including its
board of directors, independent legal counsel, or its stockholders) that the
claimant is not entitled to indemnification or to the reimbursement or
advancement of expenses, shall be a defense to the action or create a
presumption that the claimant is not so entitled.
(i) The indemnification and advancement or reimbursement of
expenses provided by, or granted pursuant to, this Article Tenth shall not be
deemed exclusive of any other rights to which those seeking indemnification or
advancement of expenses may be entitled under any bylaw, agreement, vote of
stockholders or disinterested directors or otherwise. The provisions of this
Article Tenth may at any time (and whether before or after there is any basis
for a claim for indemnification or for the advancements or reimbursements of
expenses pursuant to this Article Tenth), be amended, supplemented, waived, or
terminated in whole or in point, with respect to any covered person by a written
agreement signed by the corporation and such person.
(j) The corporation shall have the right to appoint the
attorney for a covered person provided such appointment is not unreasonable
under the circumstances.
(k) The corporation may, to the fullest extent permitted by,
applicable law, indemnify, and advance expenses for, persons in all situations
other than that covered by this Article Tenth.
3
<PAGE>
EXHIBIT 3.2
<PAGE>
KREISLER MANUFACTURING CORPORATION
----------------------
BYLAWS
----------------------
ARTICLE I
CORPORATE OFFICES
Section 1. Registered Office. The registered office shall be in the
State of Delaware, 229 South State Street, City of Dover, County of Kent. The
name of the registered agent of the corporation at such location is
Prentice-Hall Corporation System, Inc.
Section 2. Other Offices. The corporation may also have offices at such
other places both within and without the State of Delaware as the board of
directors may from time to time determine or the business of the corporation may
require.
ARTICLE II
MEETING OF STOCKHOLDERS
Section 1. Place of Meetings. Meetings of the stockholders shall be
held at any place, within or outside the State of Delaware, designated by the
Board of Directors. In the absence of any such designation, stockholders
meetings shall be held at the registered office of the corporation.
Section 2. Annual Meeting. An annual meeting of stockholders shall be
held each year on a date and at a time designated by the board of directors. At
the meeting, directors shall be elected and any other proper business may be
transacted.
Section 3. Special Meeting. A special meeting of the stockholders may
be called at any time by the board of directors, or by the chairman of the
board, or by the president, or by one or more stockholders entitled
to cast at least a majority of the votes which all shareholders are entitled
<PAGE>
to cast at the particular meeting. If a special meeting is called by any person
or persons other than the board of directors, the request shall be in writing,
specifying the time of such meeting and the general nature of the business
proposed to be transacted, and shall be delivered personally or sent by
registered mail or by telegraphic or other facsimile transmission to the
chairman of the board, the president, any vice president or the secretary of the
corporation. No business may be transacted at such special meeting otherwise
than as specified in such notice. The officer receiving the request shall cause
notice to be promptly given to the stockholders entitled to vote, in accordance
with the provisions of Section 4 and Section 5 of this Article II, that a
meeting will be held at the time requested by the person or persons who called
the meeting, not less than thirty-five nor more than sixty days after the
receipt of the request. If the notice is not given within twenty (20) days after
the receipt of the request, the person or persons who called the meeting may
give the notice. Nothing contained in this Section 3 shall be construed as
limiting, fixing or affecting the time when a meeting of stockholders called by
action of the board of directors may be held.
Section 4. Notice of Stockholders' Meeting. All notices of meetings
with stockholders shall be in writing and shall be sent or otherwise given in
accordance with Section 5 of this Article II, not less than ten nor more than
sixty days before the date of the meeting to each stockholder entitled to vote
at the meeting. The notice shall specify the place, date, and hour of the
meeting, and, in the case of a special meeting, the purpose or purposes for
which the meeting is called.
Section 5. Manner of Giving Notice; Affidavit of Notice. Written notice
of any meeting of stockholders, if mailed, is given when deposited in the United
States mail, postage prepaid, directed to the stockholder at his address as it
appears on the records of the corporation. An affidavit of the secretary or an
assistant secretary or of the transfer agent of the corporation that the notice
has been given shall, in the absence of fraud, be prime facie evidence of the
facts stated therein.
2
<PAGE>
Section 6. List of Stockholders Entitled to Vote. The officer who has
charge of the stock ledger of the corporation shall prepare and make, at least
ten days before every meeting of stockholders, a complete list of the
stockholders entitled to vote at the meeting, arranged in alphabetical order,
and showing the address of each stockholder and the number of shares registered
in the name of each stockholder. Such list shall be open to the examination of
any stockholder, 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 stockholder
Section 7. Quorum; Adjourned Meeting. The holders of a majority of the
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
stockholders for the transaction of business except as otherwise provided by
statute or by the certificate of incorporation. If, however, such quorum shall
not be present or represented at any meeting of the stockholders, then either
(i) the Chairman of the meeting, or (ii) the stockholders entitled to vote
thereat, present in person or represented by proxy, shall have power to adjourn
the meeting from time to time, without notice other than announcement at the
meeting, until a quorum shall be present or represented. At such adjourned
meeting at which a quorum shall be present or represented any business may be
transacted which might have been transacted at the meeting as originally
notified. 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 stockholder of record entitled to
vote at the meeting.
3
<PAGE>
Section 8. Conduct of Business. The Chairman of any meeting of
stockholders shall determine the order of business and the procedure at the
meeting, including such regulation of the manner of voting and the conduct of
business.
Section 9. Voting. When a quorum is present at any meeting, the vote of
the holders of a majority of the stock having voting power present in person or
represented by proxy shall decide any question brought before such meeting,
unless the question is one upon which by express provision of the statutes or of
the certificate of incorporation, a different vote is required in which case
such express provision shall govern and control the decision of such question.
Unless otherwise provided in the certificate of incorporation and subject to the
provisions of ss.213 of the Delaware General Corporation Law (relating to fixing
a date for the determination of stockholders of record) each stockholder shall
at every meeting of the stockholders be entitled to one vote in person or by
proxy for each share of the capital stock having voting power held by such
stockholder, but no proxy shall be voted on after three years from its date,
unless the proxy provides for a longer period.
Section 10. Waiver of Notice. Whenever notice is required to be given
under any provision of the General Corporation Law of Delaware or of the
certificate of incorporation or these by-laws, a written waiver thereof, signed
by the person entitled to notice, whether before or after the time stated
therein, shall be deemed equivalent to notice. Attendance of a person at a
meeting shall constitute a waiver of notice of such meeting, except when the
person attends a meeting for the express purpose of objecting, at the beginning
of the meeting, to the transaction of any business because the meeting is not
lawfully called or convened. Neither the business to be transacted at, nor the
purpose of, any regular or special meeting of the stockholders need be specified
in any written waiver of notice unless so required by the certificate of
incorporation or these by-laws.
4
<PAGE>
Section 11. Stockholder Action By Written Consent Without A Meeting.
Unless otherwise provided in the certificate of incorporation, any action
required to be taken at any annual or special meeting of stockholders of the
corporation, or any action which may be taken at any annual or special meeting
of such stockholders, 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 those stockholders who
have not consented in writing. If the action which is consented to is such as
would have required the filing of a certificate under any section of the General
Corporation Law of Delaware if such action had been voted on by stockholders at
a meeting thereof, then the certificate filed under such section shall state, in
lieu of any statement required by such section concerning any vote of
stockholders that written notice and written consent have been given as provided
in Section 228 of the General Corporation Law of Delaware.
ARTICLE II
DIRECTORS
Section 1. Number, Election, Nomination, Qualification and Term of
Office of Directors. The number of directors which shall constitute the board
shall be such as from time to time shall be determined by resolution of the
board of directors, but the number shall be not less than three nor greater than
five. The directors shall be elected at the annual meeting of the stockholders.
Written nominations for directors to be elected at an annual meeting of
stockholders must be submitted to the Secretary of the Corporation not later
than the close of business on the fifth business day
5
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immediately preceding the date of the meeting. All late nominations shall be
rejected. Except as provided in Section 2 of this Article, each director elected
shall hold office until his successor is elected and qualified or until his
earlier resignation or removal. Directors need not be stockholders. Elections of
directors need not be by written ballot.
Section 2. Resignation and Vacancies. Any director may resign at any
time upon written notice to the attention of the Secretary of the corporation.
When one or more directors so resigns and the resignation is effective at a
future date, a majority of the directors then in office, including those who
have so resigned, shall have power to fill such vacancy or vacancies, the vote
thereon to take effect when such resignation or resignations shall become
effective, and each director so chosen shall hold office as provided in this
section in the filling of other vacancies.
Unless otherwise provided in the certificate of incorporation or these
by-laws:
(i) Vacancies and newly created directorships resulting from
any increase in the authorized number of directors elected by all of the
stockholders having the right to vote as a single class may be filled by a
majority of the directors then in office, although less than a quorum, or by a
sole remaining director.
(ii) Whenever the holders of any class or classes of stock or
series thereof are entitled to elect one or more directors by the provisions of
the certificate of incorporation, vacancies and newly created directorships of
such class or classes or series may be filled by a majority of the directors
elected by such class or series thereof then in office, or by a sole remaining
director so elected.
If at any time, by reason of death or resignation or other
cause, the corporation should have no directors in office, then any officer or
any stockholder or an executor, administrator, trustee or guardian of a
stockholder, or other fiduciary entrusted with like responsibility for the
person or
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estate of a stockholder, may call a special meeting of stockholders in
accordance with the provisions of the certificate of incorporation or these
by-laws, or may apply to the Court of Chancery for a decree summarily ordering
an election as provided in Section 211 of the General Corporation Law of
Delaware.
If, at the time of filling any vacancy or any newly created
directorship, the directors then in office constitute less than a majority of
the whole board (as constituted immediately prior to any such increase), then
the Court of Chancery may, upon application of any stockholder or stockholders
holding at least ten (10) percent of the total number of the shares at the time
outstanding having the right to vote for such directors, summarily order an
election to be held to fill any such vacancies or newly created directorships,
or to replace the directors chosen by the directors then in office as aforesaid,
which election shall be governed by the provisions of Section 211 of the General
Corporation Law of Delaware as far as applicable.
Section 3. Powers. The business of the corporation shall be managed by
its board of directors which may exercise all such powers of the corporation and
do all such lawful acts and things as are not by statute or by the certificate
of incorporation or by these by-laws directed or required to be exercised or
done by the stockholders.
Section 4. Place of Meetings; Meetings by Telephone. The board of
directors of the corporation may hold meetings, both regular and special, either
within or outside the State of Delaware. Unless otherwise restricted by the
certificate of incorporation or these by-laws, members of the board of
directors, or any committee designated by the board of directors, may
participate in a meeting of the board of directors, or any committee, by means
of conference telephone or similar communications equipment by means of which
all persons participating in the meeting can hear each other, and such
participation in a meeting shall constitute presence in person at the meeting.
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Section 5. Regular Meetings. Regular meetings of the board of directors
may be held without notice at such time and at such place as shall from time to
time be determined by the board.
Section 6. Special Meetings. Special meetings of the board of directors
for any purpose or purposes may be called at any time by the chairman of the
board, the president or any two directors.
Section 7. Quorum. At all meetings of the board of directors a majority
of the 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, except as may be otherwise
specifically provided by statute or by the certificate of incorporation. If a
quorum shall not be present at any meeting of the board of directors the
directors present thereat may adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum shall be present.
A meeting at which a quorum is initially present may continue to transact
business notwithstanding the withdrawal of directors, if any action taken is
approved by at least a majority of the required quorum for the meeting.
Section 8. Waiver of Notice. Whenever notice is required to be given
under any provision of the General Corporation Law of Delaware or of the
certificate of incorporation or these by-laws, a written waiver thereof, signed
by the person entitled to notice, whether before or after the time stated
therein, shall be deemed equivalent to notice. Attendance of a person at a
meeting shall constitute a waiver of notice of such meeting, except when the
person attends a meeting for the express purpose of objecting, at the beginning
of the meeting, to the transaction of any business because the meeting is not
lawfully called or convened. Neither the business to be transacted at, nor the
purpose of, any regular or special meeting of the directors, or members of a
committee of
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directors, need be specified in any written waiver of notice unless so required
by the certificate of incorporation or these by-laws.
Section 9. Board Action By Written Consent Without A Meeting. Unless
otherwise restricted by the certificate 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
members of the board 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 or committee.
Section 10. Committee of Directors. The board of directors may, be
resolution passed by a majority of the whole board, designate one or more
committees, each committee to consist of one or more of the directors of the
corporation. The board may designate one or more directors as alternate members
of any committee, who may replace any absent or disqualified member at any
meeting of the committee. In the absence or disqualification of a member of a
committee, 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 such absent or disqualified member. Any such
committee, to the extent provided in the resolution of the board of directors or
in the by-laws of the corporation, shall have and may exercise all the powers
and authority of the board of directors in the management of the business and
affairs of the corporation, and may authorize the seal of the corporation to be
affixed to all papers which may require it; but no such committee shall have the
power or authority to (i) amend the certificate of incorporation (except that a
committee may, to the extent authorized in the resolution or resolution
providing for the issuance of shares of stock adopted by the board of directors
as provided in Section 151(a) of the General Corporation Law of Delaware, fix
the designations and any of the preferences or rights of such shares relating to
dividends, redemption,
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dissolution, any distribution of assets of the corporation or the conversion
into, or the exchange of such shares for, shares of any other class or classes
or any other series of the same or any other class or classes of stock of the
corporation or fix the number of shares of any series of stock or authorize the
increase or decrease of the shares of any series), (ii) adopt an agreement of
merger or consolidation under Sections 251 or 252 of the General Corporation Law
of Delaware, (iii) recommend to the stockholders the sale, lease or exchange of
all or substantially all of the corporation's property and assets, (iv)
recommend to the stockholders a dissolution of the corporation or a revocation
of a dissolution, or (v) amend the by-laws, of the corporation; and, unless the
board resolution establishing the committees, the by-laws or the certificate of
incorporation expressly so provide, no such committee shall have the power or
authority to declare a dividend, to authorize the issuance of stock or to adopt
a certificate of ownership and merger pursuant to Section 253 of the General
Corporation Law of Delaware. Such committee or committees shall have such name
or names as may be determined from time to time by resolution adopted by the
board of directors.
Section 11. Committee Minutes. Each committee shall keep regular
minutes of its meetings and report the same to the board of directors when
required.
Section 12. Meetings and Action of Committees. Meetings and actions of
committees shall be governed by, and held and taken in accordance with, the
provisions of Article III of these by-laws, Section 4 (place of meetings and
meetings by telephone), Section 5 (regular meetings), Section 6 (special
meetings), Section 7 (quorum), Section 8 (waiver of notice), and Section 9
(action without a meeting), with such changes in the context of those by-laws as
are necessary to substitute the committee and its members for the board of
directors and its members; provided, however, that the time of regular meetings
of committees may be determined either by resolution of the board of directors
and its members; provided, however, that the time of regular meetings of
committees may
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be determined either by resolution of the board of directors or by resolution of
the committee, that special meetings of committees may also be called by
resolution of the board of directors and that notice of special meetings of
committees shall also be given to all alternate members, who shall have the
right to attend all meetings of the committee. The board of directors may adopt
rules for the government of any committee not inconsistent with the provisions
of these by-laws.
Section 12. Compensation of Directors. Unless otherwise restricted by
the certificate of incorporation or these by-laws, the board of directors shall
have the authority to fix the compensation of directors. The directors may be
paid their expenses, if any, of 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.
ARTICLE IV
OFFICERS
Section 1. Officers. The officers of the corporation shall be a
chairman of the board, a president, one or more vice-presidents, a secretary,
and a treasurer and such other officers or assistant officers as the Board of
Directors may deem advisable. Except for the President, Secretary and Treasurer,
the Board may refrain from filling any of the said offices at any time and from
time to time. Officers shall be elected by the board of directors at the time
and in the manner as the board of directors from time to time shall determine,
subject to the rights, if any, of an officer under any contract of employment.
Any number of offices may be held by the same person, unless the certificate of
incorporation or these by-laws otherwise provide.
Section 2. Compensation. The salaries and compensation of all officers
and agents of the corporation, except the Chairman of the Board and President,
elected by the board of directors shall
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be fixed by the compensation committee of the board of directors and, in the
absence of an compensation committee, by the President.
Section 3. Removal and Resignation. The officers of the corporation
shall hold office until their successors are chosen and qualify. Subject to any
rights, if any, under any contract of employment, any officer elected or
appointed by the board of directors may be removed at any time by the
affirmative vote of a majority of the board of directors. Any officer may resign
at any time by giving written notice to the corporation. Any resignation shall
take effect at the date of the receipt of that notice or at any later time
specified in that notice; and, unless otherwise specified in that notice, the
acceptance of the resignation shall not be necessary to make it effective. Any
resignation is without prejudice to the rights, if any, of the corporation under
any contract to which the officer is a party. Any vacancy occurring in any
office of the corporation shall be filled by the board of directors.
Section 4. Chairman of the Board. The chairman of the board, if such an
officer be elected, shall, if present, preside at meetings of the board of
directors and exercise and perform such other powers and duties as may from time
to time be assigned to him by the board of directors or as may be prescribed by
these by-laws. If there is no president, then the chairman of the board shall
also be the chief executive officer of the corporation and shall have the powers
and duties prescribed in Section 5 of these by-laws.
Section 5. The President. Subject to such supervisory powers, if any,
as may be given by the Board of Directors to the Chairman of the Board, if there
be such an officer, the president shall be the chief executive officer of the
corporation, and shall, subject to the control of the board of directors, have
general supervision, direction and control of the business and the officers of
the corporation. He shall preside at all meetings of the stockholders and in the
absence or nonexistence
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of a chairman of the board, at all meetings of the board of directors. He shall
have general and active management of the business of the corporation and shall
see that all orders and resolutions of the board of directors are carried into
effect.
Section 6. Vice-Presidents. In the absence or disability of the
president or in the event of his inability or refusal to act, the
vice-president, if any, (or in the event there be more than one vice-president,
the vice-presidents in the order designated, or in the absence of any
designation, then in the order of their election) 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. The vice-presidents shall perform
such other duties and have such other powers as may from time to time be
prescribed for them respectively by the board of directors, these by-laws, the
president or the chairman of the board.
Section 7. The Secretary. The secretary shall attend all meetings of
the board of directors and all meetings of the stockholders and record all the
proceedings of the meetings of the corporation and of the board of directors in
a book to be kept for that purpose and shall perform like duties for the
standing committees when required. He shall give, or cause to be given, notice
of all meetings of the stockholders and special meetings of the board of
directors, and shall perform such other duties as may be prescribed by the board
of directors, these by-laws, the president (or the chairman of the board) under
whose supervision he shall be. He shall have custody of the corporate seal of
the corporation and he shall have authority to affix the same to any instrument
requiring it and when so affixed, it may be attested by his signature. 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.
Section 8. The Treasurer. The treasurer shall have the custody of the
corporate funds and securities and shall keep full and accurate books and
records of accounts of the properties and
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business transactions of the corporation, including accounts of its assets,
liabilities, receipts, disbursements, gains, losses, capital, retained earnings
and shares. The books of account shall at all reasonable times be open to
inspection by any director. The treasurer 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. He shall disburse
the funds of the corporation as may be ordered by the board of directors, taking
proper vouchers for such disbursements, and shall render to the president and
the board of directors, at its regular meetings, or when the board of directors
so requires, an account of all his transactions as treasurer and of the
financial condition of the corporation.
Section 9. Assistant Officers. Any assistant officers elected to the
Board of Directors shall have such duties as may be prescribed by the Board of
Directors, the Chairman of the Board, the President, or the officer to whom they
are an assistant. Assistant officers shall perform the duties and have the power
of the officer to whom they are an assistant in the event of such officer's
absence or disability.
ARTICLE V
Section 1. Indemnification to the Fullest Extent of the Law. The
corporation shall, to the fullest extent permitted by applicable law, indemnify
its directors and officers who were or are a party or are threatened to be made
a party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (whether or not such
action, suit or proceeding arises or arose by or in the right of the corporation
or other entity) by reason of the fact that such director or officer is or was a
director or officer of the corporation or is or was serving at the request of
the corporation as a director, officer, employee, general partner, agent or
fiduciary of another corporation, partnership, joint venture, trust or other
enterprise (including service with
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respect to employee benefit plans), against expenses (including, but not limited
to, attorneys' fees and costs), judgments, fines (including excise taxes
assessed on a person with respect to any employee benefit plan) and amounts paid
in settlement actually and reasonably incurred by such director or officer in
connection with such action, suit or proceeding, except as otherwise provided in
Section 3 of this Article V. Persons who are directors or officers of the
corporation prior to the date this Article V is approved by the corporation's
shareholders, but who do not hold such office on or after such date, shall not
be covered by this Section 1 of Article V. A director or officer of the
corporation entitled to indemnification under this Section 1 of this Article V
is hereafter in this Article V referred to as a "covered person."
Section 2. Advancement of Expenses. Expenses incurred by a covered
person in defending a threatened, pending or completed civil or criminal 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 person to repay such amount if it shall ultimately be
determined that such person is not entitled to be indemnified by the
corporation, except as otherwise provided in Section 3 of this Article V.
Section 3. Limitations on indemnification. No indemnification under
Section 1 of this Article V or advancement or reimbursement of expenses under
Section 2 of this Article V shall be provided to a covered person (A) with
respect to expenses or the payment of profits arising from purchase or sale of
the securities of the corporation in violation of Section 16(b) of the
Securities Exchange Act of 1934; (B) if a final unappealable judgment or award
establishes that such director or officer engaged in intentional misconduct or a
transaction from which he derived an improper personal benefit; (C) for expenses
or liabilities of any type whatsoever (including, but not limited to, judgments,
fines, and amounts paid in settlement) which have been paid directly to such
person
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by an insurance carrier under a policy of officers' and directors' Liability
insurance maintained by the corporation or other enterprise; and (D) for amounts
paid in settlement of any threatened, pending; or completed action, suit or
proceeding without the written consent of the corporation, which written consent
shall not be unreasonably withheld. The Board of Directors of the corporation is
hereby authorized, at any time by resolution and without stockholder approval,
to add to the above list of exceptions from the right of indemnification under
Section 1 of this Article V or advancement or reimbursement of expenses under
Section 2 of this Article V, but any such additional exception shall not apply
with respect to any event, act or omission which has occurred prior to the date
the Board of Directors in fact adopts such resolution. Any such additional
exception may at any time after its adoption, be amended, supplemented, waived
or terminated by resolution of the Board of Directors of the corporation.
Section 4. Continuation of Indemnification. The indemnification and
advancement or reimbursement of expenses provided by, or granted pursuant to
this Article V shall continue as to a person who has ceased to be a director or
officer of the corporation, and shall inure to the benefit of the heirs,
executors and administrators of such person.
Section 5. Definition. The term to the "fullest extent permitted by
applicable law," as used in this Article V, shall mean the maximum extent
permitted by public policy, common law or statute. Any covered person may, to
the fullest extent permitted by applicable law, elect to have the right to
indemnification or to advancement or reimbursement of expenses interpreted, at
such person's option (i) on a basis of the applicable law on the date this
Article Tenth was approved by shareholders, or (ii) on the basis of the
applicable law in effect at the time of the occurrence of the event or events
giving rise to the action, suit or proceeding, or (iii) on the basis of the
applicable law in effect at the time indemnification is sought.
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Section 6. Contract Right. The right of a covered person to be
indemnified or to receive an advancement or reimbursement of expenses pursuant
to this Article V (i) may also be enforced as a contract right pursuant to which
the person entitled thereto may bring suit as if the provisions hereof were set
forth in a separate written contract between the corporation and such person,
(ii) to the fullest extent permitted by applicable law, is intended to be
retroactive and shall be available with respect to events occurring prior to the
adoption hereof, (iii) shall continue to exist after the rescission or
restrictive modification (as determined by such person) of this Article V with
respect to events, acts or omissions occurring before such rescission or
restrictive modification is adopted.
Section 7. Failure to Honor Request for Indemnification. If a request
for indemnification or for the advancement or reimbursement of expenses pursuant
hereto as not paid in full by the corporation within thirty days after a written
claim has been received by the corporation together with all supporting
information reasonably requested by the corporation, the claimant may at any
time thereafter bring suit against the corporation to recover the unpaid amount
of the claim (plus interest at the prime rate announced from time to time by the
corporation's primary banker) and, if successful in whole or in part, the
claimant shall be entitled also to be paid the expenses (including, but not
limited to, attorney's fees and costs) of prosecuting such claim. Neither the
failure of the corporation (including its board of directors, independent legal
counsel, or its stockholders) to have made a determination prior to the
commencement of such action that indemnification of or the advancement or
reimbursement of expenses to the claimant is proper in the circumstances, nor an
actual determination by the corporation (including its board of directors,
independent legal counsel, or its stockholders) that the claimant is not
entitled to indemnification or to the reimbursement or advancement of expenses,
shall be a defense to the action or create a presumption that the claimant is
not so entitled.
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Section 8. Non-Exclusivity of Article. The indemnification and
advancement or reimbursement of expenses provided by, or granted pursuant to,
this Article V shall not be deemed exclusive of any other rights to which those
seeking indemnification or advancement of expenses may be entitled under any
bylaw, agreement, vote of stockholders or disinterested directors or otherwise.
The provisions of this Article V may at any time (and whether before or after
there is any basis for a claim for indemnification or for the advancements or
reimbursements of expenses pursuant to this Article V), be amended,
supplemented, waived, or terminated in whole or in point, with respect to any
covered person by a written agreements signed by the corporation and such
persons.
Section 9. Appointment of Attorney. The corporation shall have the
right to appoint the attorney for a covered person provided such appointment is
not unreasonable under the circumstances.
Section 10. Permissive Indemnification. The corporation may, to the
fullest extent permitted by applicable law, indemnify, and advance expenses for,
persons in all situations other than that covered by this Article V.
ARTICLE VI
SHARES OF CAPITAL STOCK
Section 1. Stock Certificates; Partly Paid Shares. The shares of the
corporation shall be represented by certificates, provided that the board of
directors of the corporation may provide by resolution or resolutions that some
or all of any or all classes or series of its stock shall be uncertificated
shares. Any such resolution shall not apply to shares represented by a
certificate until such certificate is surrendered to the corporation.
Notwithstanding the adoption of such a resolution by the board of directors,
every holder of stock represented by certificates and upon request every
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holder of uncertificated shares shall be entitled to have a certificate signed
by, or in the name of the corporation by the chairman or vice-chairman of the
board of directors, or the president or vice-president, and by the treasurer or
an assistant treasurer, or the secretary or an assistant secretary of such
corporation representing the number of shares registered in certificate form.
Any or all of the signatures 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 has ceased to be such officer, transfer agent
or registrar before such certificate is issued, it may be issued by the
corporation with the same effect as if he were such officer, transfer agent or
registrar at the date of issue. The corporation may issue the whole or any part
of its shares as partly paid and subject to call for the remainder of the
consideration to be paid therefor. Upon the face or back of each stock
certificate issued to represent any such partly paid shares, upon the books and
records of the corporation in the case of uncertificated partly paid shares, the
total amount of the consideration to be paid therefor and the amount paid
thereon shall be stated. Upon the declaration of any dividend on fully paid
shares, the corporation shall declare a dividend upon partly paid shares of the
same class, but only upon the basis of the percentage of the consideration
actually paid thereon.
Section 2. Special Designation on Certificates. If the corporation is
authorized to issue more than one class of stock or more than one series of any
class, then the powers, the designations, the preferences, and the relative,
participating, optional or other special rights of each class of stock or series
thereof and the qualifications, limitations or restrictions of such preferences
and/or rights shall be set forth in full or summarized on the face or back of
the certificate that the corporation shall issue to represent such class or
series of stock; provided, however, that, except as otherwise provided in
Section 202 of the General Corporation Law of Delaware, in lieu of the foregoing
requirements there may be set forth on the face or back of the certificate that
the corporation shall issue to
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represent such class or series of stock a statement that the corporation will
furnish without charge to each stockholder who so requests the powers, the
designations, the preferences, and the relative, participating, optional or
other special rights of each class of stock or series thereof and the
qualifications, limitations or restrictions of such preferences and/or rights.
Section 3. Lost Certificates. Except as provided in this Section 3, no
new certificates for shares shall be issued to replace a previously issued
certificate unless the latter is surrendered to the corporation and cancelled at
the same time. The corporation may issue a new certificate of stock or
uncertificated shares in the place of any certificate theretofore issued by it,
alleged to have been lost, stolen or destroyed, and the corporation may require
the owner of the lost, stolen or destroyed certificate, or his legal
representative, to give the corporation a bond sufficient to indemnify it
against any claim that may be made against it on account of the alleged loss,
theft or destruction of any such certificate or the issuance of such new
certificate or uncertificated shares.
ARTICLE VII
GENERAL
Section 1. Registered Stockholders. 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 the laws of Delaware.
Section 2. Dividends. Dividends upon the capital stock of the
corporation, subject to the provisions of the certificate of incorporation, if
any, may be declared by the board of directors at any regular or special
meeting, pursuant to law. Dividends may be paid in cash, in property, or in
shares
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of the capital stock, subject to the provisions of the certificate of
incorporation. Before payment of away dividend, there may be set aside out of
any funds of the corporation available for dividends such sum or sums as the
directors from time to time, in their absolute discretion, think proper as a
reserve or reserves to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the corporation, or for such other
purpose as the directors shall think conducive to the interest of the
corporation, and the directors may modify or abolish any such reserve in the
manner in which it was created.
Section 3. Record Date for Stockholder Notice; Voting; Giving Consents.
In order that the corporation may determine the stockholders entitled to notice
of or to vote at any meeting of stockholders or any adjournment thereof, or
entitled to 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 (60) nor less than (10) days before the date of such meeting,
nor more than sixty (60) days prior to any other action.
If the board of directors does not so fix a record date:
(i) The record date for determining stockholders
entitled to notice or to vote at a meeting of stockholders
shall be at the close of business on the day next preceding
the day on which notice is given, or, if notice is waived, at
the close of business on the day next preceding the day on
which the meeting is held.
(ii) The record date for determining stockholders
entitled to express consent to corporate action in writing
without a meeting, when no prior action by the board of
directors is necessary, shall be the day on which the first
written consent is expressed.
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(iii) The record date for determining stockholders for
any other purpose shall be at the close of business on the day
on which the board of directors adopts the resolution relating
thereto.
A determination of stockholders of record entitled to notice
of or to vote at a meeting of stockholders 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 4. Annual Statement. The board of directors shall present at
each annual meeting, and at any special meeting of the stockholders when called
for by vote of the stockholders, a full and clear statement of the business and
condition of the corporation.
Section 5. Checks. 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 6. Fiscal Year. The fiscal year of the corporation begins on
the first day of July and ends on the thirtieth day of June in each year.
Section 7. Seal. The corporate seal shall have inscribed thereon the
name of the corporation, the year of its organization and the words "Corporate
Seal, Delaware." The seal may be used by causing it or a facsimile thereof to be
impressed or affixed or reproduced or otherwise.
ARTICLE VIII
AMENDMENTS
These bylaws may be adopted, amended or repealed by the stockholders
entitled to vote; provided, however, that the corporation may, in its
certificate of incorporation, confer the power to adopt, amend or repeal by-laws
upon the directors. The fact that such power has been so conferred upon the
directors shall not divest the stockholders of the power, nor limit their power
to adopt, amend or repeal the by-laws.
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EXHIBIT 10.1
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KREISLER MANUFACTURING CORPORATION
1997 STOCK OPTION PLAN
1. Purpose of Plan
The purpose of this 1997 Stock Option Plan (the "Plan") is to provide
additional incentive to officers, other key employees, and directors of, and
important consultants to, Kreisler Manufacturing Corporation, a Delaware
Corporation (the "Company"), and each present or future parent or subsidiary
corporation, by encouraging them to invest in shares of the Company's common
stock, $.50 par value per share ("Common Stock"), and thereby acquire a
proprietary interest in the Company and an increased personal interest in the
Company's continued success and progress.
2. Aggregate Number of Shares
70,000 shares of the Company's Common Stock shall be the aggregate
number of shares which may be issued under this Plan. Notwithstanding the
foregoing, in the event of any change in the outstanding shares of the Common
Stock of the Company by reason of a stock dividend, stock split, combination of
shares, recapitalization, merger, consolidation, transfer of assets,
reorganization, conversion or what the Committee (defined in Section 4(a)),
deems in its sole discretion to be similar circumstances, the aggregate number
and kind of shares which may be issued under this Plan shall be appropriately
adjusted in a manner determined in the sole discretion of the Committee.
Reacquired shares of the Company's Common Stock, as well as unissued shares, may
be used for the purpose of this Plan. Common Stock of the Company subject to
options which have terminated unexercised, either in whole or in part, shall be
available for future options granted under this Plan.
3. Class of Persons Eligible to Receive Options
All officers and key employees of the Company and of any present or
future Company parent or subsidiary corporation are eligible to receive an
option or options under this Plan. All directors of, and important consultants
to, the Company and of any present or future Company parent or subsidiary
corporation are also eligible to receive an option or options under this Plan.
The individuals who shall, in fact, receive an option or options shall
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be selected by the Committee, in its sole discretion, except as otherwise
specified in Section 4 hereof. No individual may receive options under this Plan
for more than the total number of shares of the Company's Common Stock
authorized for issuance under this Plan.
4. Administration of Plan
(a) This Plan shall be administered either by the Company's Board of
Directors or an Option Committee appointed by the Company's Board of Directors.
The term "Committee," as used herein, shall refer to either the Company's Board
of Directors or such Option Committee, depending upon who is administering the
Plan. The Committee shall, in addition to its other authority and subject to the
provisions of this Plan, determine which individuals shall in fact be granted an
option or options, whether the option shall be an Incentive Stock Option or a
Non-Qualified Stock Option (as such terms are defined in Section 5(a)), the
number of shares to be subject to each of the options, the time or times at
which the options shall be granted, the rate of option exercisability, and,
subject to Section 5 hereof, the price at which each of the options is
exercisable and the duration of the option.
(b) The Committee shall adopt such rules for the conduct of
its business and administration of this Plan as it considers desirable. A
majority of the members of the Committee shall constitute a quorum for all
purposes. The vote or written consent of a majority of the members of the
Committee on a particular matter shall constitute the act of the Committee on
such matter. The Committee shall have the right to construe the Plan and the
options issued pursuant to it, to correct defects and omissions and to reconcile
inconsistencies to the extent necessary to effectuate the Plan and the options
issued pursuant to it, and such action shall be final, binding and conclusive
upon all parties concerned. No member of the Committee or the Board of Directors
shall be liable for any act or omission (whether or not negligent) taken or
omitted in good faith, or for the exercise of an authority or discretion granted
in connection with the Plan to a Committee or the Board of Directors, or for the
acts or omissions of any other members of a Committee or the Board of Directors.
Subject to the numerical limitations on Committee membership set forth in
Section 4(a) hereof, the Board of Directors may at any time appoint additional
members of the Committee and may at any time remove any member of the Committee
with or without cause. Vacancies in the Committee, however caused, may be filled
by the Board of Directors, if it so desires.
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5. Incentive Stock Options and Non-Qualified Stock Options
(a) Options issued pursuant to this Plan may be either
Incentive Stock Options granted pursuant to Section 5(b) hereof or Non-Qualified
Stock Options granted pursuant to Section 5(c) hereof, as determined by the
Committee. An "Incentive Stock Option" is an option which satisfies all of the
requirements of Section 422 of the Internal Revenue Code of 1986, as amended
(the "Code") and the regulations thereunder, and a "Non-Qualified Stock Option"
is an option which either does not satisfy all of those requirements or the
terms of the option provide that it will not be treated as an Incentive Stock
Option. The Committee may grant both an Incentive Stock Option and a
Non-Qualified Stock Option to the same person, or more than one of each type of
option to the same person. The option price for options issued under this Plan
shall be equal at least to the fair market value (as defined below) of the
Company's Common Stock on the date of the grant of the option. The fair market
value of the Company's Common Stock on any particular date shall mean the last
reported sale price of a share of the Company's Common Stock on any stock
exchange on which such stock is then listed or admitted to trading, or on the
NASDAQ National Market System or Small Cap NASDAQ, on such date, or if no sale
took place on such day, the last such date on which a sale took place, or if the
Common Stock is not then quoted on the NASDAQ National Market System or Small
Cap NASDAQ, or listed or admitted to trading on any stock exchange, the average
of the bid and asked prices in the over-the-counter market on such date, or if
none of the foregoing, a price determined in good faith by the Committee to
equal the fair market value per share of the Common Stock.
(b) Subject to the authority of the Committee set forth in
Section 4(a) hereof, Incentive Stock Options issued pursuant to this Plan shall
be issued substantially in the form set forth in Appendix I hereof, which form
is hereby incorporated by reference and made a part hereof, and shall contain
substantially the terms and conditions set forth therein. Incentive Stock
Options shall not be exercisable after the expiration of ten years from the date
such options are granted, unless terminated earlier under the terms of the
option, except that options granted to individuals described in Section
422(b)(6) of the Code shall conform to the provisions of Section 422(c)(5) of
the Code. At the time of the grant of an Incentive Stock Option hereunder, the
Committee may, in its
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discretion, amend or supplement any of the option terms contained in Appendix I
for any particular optionee, provided that the option as amended or supplemented
satisfies the requirements of Section 422 of the Code and the regulations
thereunder. Each of the options granted pursuant to this Section 5(b) is
intended, if possible, to be an "Incentive Stock Option" as that term is defined
in Section 422 of the Code and the regulations thereunder. In the event this
Plan or any option granted pursuant to this Section 5(b) is in any way
inconsistent with the applicable legal requirements of the Code or the
regulations thereunder for an Incentive Stock Option, this Plan and such option
shall be deemed automatically amended as of the date hereof to conform to such
legal requirements, if such conformity may be achieved by amendment.
(c) Subject to the authority of the Committee set forth in
Section 4(a) hereof, Non-Qualified Stock Options issued to officers and other
key employees pursuant to this Plan shall be issued substantially in the form
set forth in Appendix II hereof, which form is hereby incorporated by reference
and made a part hereof, and shall contain substantially the terms and conditions
set forth therein. Subject to the authority of the Committee set forth in
Section 4(a) hereof, Non-Qualified Stock Options issued to directors and
important consultants pursuant to this Plan shall be issued substantially in the
form set forth in Appendix III hereof, which form is hereby incorporated by
reference and made a part hereof, and shall contain substantially the terms and
conditions set forth therein. Non-Qualified Stock Options shall expire ten years
after the date they are granted, unless terminated earlier under the option
terms. At the time of granting a Non-Qualified Stock Option hereunder, the
Committee may, in its discretion, amend or supplement any of the option terms
contained in Appendix II or Appendix III for any particular optionee.
(d) Neither the Company nor any of its current or future
parent, subsidiaries or affiliates, nor their officers, directors, shareholders,
stock option plan committees, employees or agents shall have any liability to
any optionee in the event (i) an option granted pursuant to Section 5(b) hereof
does not qualify as an "Incentive Stock Option" as that term is used in Section
422 of the Code and the regulations thereunder; (ii) any optionee does not
obtain the tax treatment pertaining to an Incentive Stock Option; or (iii) any
option granted pursuant to Section 5(c) hereof is an "Incentive Stock Option."
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6. Amendment, Supplement, Suspension and Termination
Options shall not be granted pursuant to this Plan after the
expiration of ten years from the date the Plan is adopted by the Board of
Directors of the Company. The Board of Directors reserves the right at any time,
and from time to time, to amend or supplement this Plan in any way, or to
suspend or terminate it, effective as of such date, which date may be either
before or after the taking of such action, as may be specified by the Board of
Directors; provided, however, that such action shall not affect options granted
under the Plan prior to the actual date on which such action occurred. If an
amendment or supplement of this Plan is required by the Code or the regulations
thereunder to be approved by the shareholders of the Company in order to permit
the granting of "Incentive Stock Options" (as that term is defined in Section
422 of the Code and regulations thereunder) pursuant to the amended or
supplemented Plan, such amendment or supplement shall also be approved by the
shareholders of the Company in such manner as is prescribed by the Code and the
regulations thereunder. If the Board of Directors voluntarily submits a proposed
amendment, supplement, suspension or termination for shareholder approval, such
submission shall not require any future amendments, supplements, suspensions or
terminations (whether or not relating to the same provision or subject matter)
to be similarly submitted for shareholder approval.
7. Effectiveness of Plan
This Plan shall become effective on the date of its adoption
by the Company's Board of Directors, subject however to approval by the holders
of the Company's Common Stock in the manner as prescribed in the Code and the
regulations thereunder. Options may be granted under this Plan prior to
obtaining shareholder approval, provided such options shall not be exercisable
until shareholder approval is obtained.
8. General Conditions
(a) Nothing contained in this Plan or any option granted
pursuant to this Plan shall confer upon any employee the right to continue in
the employ of the Company or any affiliated or subsidiary corporation or
interfere in any way with the rights of
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the Company or any affiliated or subsidiary corporation to terminate his
employment in any way.
(b) Nothing contained in this Plan or any option granted
pursuant to this Plan shall confer upon any director or consultant the right to
continue as a director of, or consultant to, the Company or any affiliated or
subsidiary corporation or interfere in any way with the rights of the Company or
any affiliated or subsidiary corporation, or their respective shareholders, to
terminate the directorship of any such director or the consultancy relationship
of any such consultant.
(c) Corporate action constituting an offer of stock for sale
to any person under the terms of the options to be granted hereunder shall be
deemed complete as of the date when the Committee authorizes the grant of the
option to the such person, regardless of when the option is actually delivered
to such person or acknowledged or agreed to by him.
(d) The terms "parent corporation" and "subsidiary
corporation" as used throughout this Plan, and the options granted pursuant to
this Plan, shall (except as otherwise provided in the option form) have the
meaning that is ascribed to that term when contained in Section 422(b) of the
Code and the regulations thereunder, and the Company shall be deemed to be the
grantor corporation for purposes of applying such meaning.
(e) References in this Plan to the Code shall be deemed to
also refer to the corresponding provisions of any future United States revenue
law.
(f) The use of the masculine pronoun shall include the
feminine gender whenever appropriate.
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APPENDIX I
INCENTIVE STOCK OPTION
To: __________________________________________________________________________
Name
__________________________________________________________________________
Address
Date of Grant: ________________________________________________________________
You are hereby granted an option, effective as of the date hereof, to
purchase __________ shares of common stock, $.50 par value per share ("Common
Stock"), of Kreisler Manufacturing Corporation, a Delaware corporation (the
"Company") at a price of $_____ per share pursuant to the Company's 1997 Stock
Option Plan (the "Plan").
Your option may first be exercised on and after one year from the date
of grant, but not before that time. On and after one year and prior to two years
from the date of grant, your option may be exercised for up to 33 1/3% of the
total number of shares subject to the option minus the number of shares
previously purchased by exercise of the option (as adjusted for any change in
the outstanding shares of the Common Stock of the Company by reason of a stock
dividend, stock split, combination of shares, recapitalization, merger,
consolidation, transfer of assets, reorganization, conversion or what the
Committee deems in its sole discretion to be similar circumstances). Each
succeeding year thereafter, your option may be exercised for up to an additional
33_% of the total number of shares subject to the option minus the number of
shares previously purchased by exercise of the option (as adjusted for any
change in the outstanding shares of the Common Stock of the Company by reason of
a stock dividend, stock split, combination of shares, recapitalization, merger,
consolidation, transfer of assets, reorganization, conversion or what the
Committee deems in its sole discretion to be similar circumstances). Thus, this
option is fully exercisable on and after three years after the date of grant,
except if terminated
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earlier as provided herein. This option shall terminate and is not exercisable
after ten years from the date of its grant (the "Scheduled Termination Date"),
except if terminated earlier as hereafter provided.
In the event of a "Change of Control" (as defined below) of the
Company, your option may, from and after the date of the Change of Control, and
notwithstanding the immediately preceding paragraph, be exercised for up to 100%
of the total number of shares then subject to the option minus the number of
shares previously purchased upon exercise of the option (as adjusted for stock
dividends, stock splits, combinations of shares and what the Committee deems in
its sole discreticelerate accordingly. A "Change of Control" shall be deemed to
have occurred upon the happening of any of the following events:
1. A change within a twelve-month period in the holders of more than
50% of the outstanding voting stock of the Company; or
2. Any other event deemed to constitute a "Change of Control" by the
Committee.
You may exercise your option by giving written notice to the Secretary
of the Company on forms supplied by the Company at its then principal executive
office, accompanied by payment of the option price for the total number of
shares you specify that you wish to purchase. The payment may be in any of the
following forms: (a) cash, which may be evidenced by a check and includes cash
received from a stock brokerage firm in a so-called "cashless exercise"; (b)
(unless prohibited by the Committee) certificates representing shares of Common
Stock of the Company, which will be valued by the Secretary of the Company at
the fair market value per share of the Company's Common Stock (as determined in
accordance with the Plan) on the date of delivery of such certificates to the
Company, accompanied by an assignment of the stock to the Company; or (c)
(unless prohibited by the Committee) any combination of cash and Common Stock of
the Company valued as provided in clause (b). Any assignment of stock shall be
in a form and substance satisfactory to the Secretary of the Company, including
guarantees of signature(s) and payment of all transfer taxes if the Secretary
deems such guarantees necessary or desirable.
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Your option will, to the extent not previously exercised by you,
terminate three months after the date on which your employment by the Company or
a Company subsidiary corporation is terminated (whether such termination be
voluntary or involuntary) other than by reason of disability as defined in
Section 22(e)(3) of the Internal Revenue Code of 1986, as amended (the "Code"),
and the regulations thereunder, or death, in which case your option will
terminate one year from the date of termination of employment due to disability
or death (but in no event later than the Scheduled Termination Date). After the
date your employment is terminated, as aforesaid, you may exercise this option
only for the number of shares which you had a right to purchase and did not
purchase on the date your employment terminated. If you are employed by a
Company subsidiary corporation, your employment shall be deemed to have
terminated on the date your employer ceases to be a Company subsidiary
corporation, unless you are on that date transferred to the Company or another
Company subsidiary corporation. Your employment shall not be deemed to have
terminated if you are transferred from the Company to a Company subsidiary
corporation, or vice versa, or from one Company subsidiary corporation to
another Company subsidiary corporation.
If you die while employed by the Company or a Company subsidiary
corporation, your executor or administrator, as the case may be, may, at any
time within one year after the date of your death (but in no event later than
the Scheduled Termination Date), exercise the option as to any shares which you
had a right to purchase and did not purchase during your lifetime. If your
employment with the Company or a Company parent or subsidiary corporation is
terminated by reason of your becoming disabled (within the meaning of Section
22(e)(3) of the Code and the regulations thereunder), you or your legal guardian
or custodian may at any time within one year after the date of such termination
(but in no event later than the Scheduled Termination Date), exercise the option
as to any shares which you had a right to purchase and did not purchase prior to
such termination. Your executor, administrator, guardian or custodian must
present proof of his authority satisfactory to the Company prior to being
allowed to exercise this option.
In the event of any change in the outstanding shares of the Common
Stock of the Company by reason of a stock dividend, stock split, combination of
shares, recapitalization, merger,
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consolidation, transfer of assets, reorganization, conversion or what the
Committee deems in its sole discretion to be similar circumstances, the number
and kind of shares subject to this option and the option price of such shares
shall be appropriately adjusted in a manner to be determined in the sole
discretion of the Committee.
In the event of a liquidation of the Company, including (but not
limited to) a transfer of assets followed by a liquidation of the Company, the
Committee shall have the right to terminate this option upon thirty (30) days
prior written notice to you, notwithstanding anything to the contrary contained
in this option.
This option is not transferable otherwise than by will or the laws of
descent and distribution, and is exercisable during your lifetime only by you,
including, for this purpose, your legal guardian or custodian in the event of
disability. Until the option price has been paid in full pursuant to due
exercise of this option and the purchased shares are delivered to you, you do
not have any rights as a shareholder of the Company. The Company reserves the
right not to deliver to you the shares purchased by virtue of the exercise of
this option during any period of time in which the Company deems, in its sole
discretion, that such delivery would violate a federal, state, local or
securities exchange rule, regulation or law.
Notwithstanding anything to the contrary contained herein, this option
is not exercisable until all the following events occur and during the following
periods of time:
(a) Until the Plan pursuant to which this option is granted is
approved by the shareholders of the Company in the manner prescribed by the Code
and the regulations thereunder;
(b) Until this option and the optioned shares are approved
and/or registered with such federal, state and local regulatory bodies or
agencies and securities exchanges as the Company may deem necessary or
desirable; or
(c) During any period of time in which the Company deems that
the exercisability of this option, the offer to sell the shares optioned
hereunder, or the sale thereof, may violate a federal, state, local or
securities exchange rule, regulation or
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law, or may cause the Company to be legally obligated to issue or sell more
shares than the Company is legally entitled to issue or sell.
(d) Until you have paid or made suitable arrangements to pay
(which may include payment through the surrender of Common Stock, unless
prohibited by the Committee) (i) all federal, state and local income tax
withholding required to be withheld by the Company in connection with the option
exercise and (ii) the employee's portion of other federal, state and local
payroll and other taxes due in connection with the option exercise.
The following two paragraphs shall be applicable if, on the
date of exercise of this option, the Common Stock to be purchased pursuant to
such exercise has not been registered under the Securities Act of 1933, as
amended, and under applicable state securities laws, and shall continue to be
applicable for so long as such registration has not occurred:
(a) The optionee hereby agrees, warrants and represents that
he will acquire the Common Stock to be issued hereunder for his own account for
investment purposes only, and not with a view to, or in connection with, any
resale or other distribution of any of such shares, except as hereafter
permitted. The optionee further agrees that he will not at any time make any
offer, sale, transfer, pledge or other disposition of such Common Stock to be
issued hereunder without an effective registration statement under the
Securities Act of 1933, as amended, and under any applicable state securities
laws or an opinion of counsel acceptable to the Company to the effect that the
proposed transaction will be exempt from such registration. The optionee shall
execute such instruments, reprule, regulation or law.
(b) The certificates for Common Stock to be issued to the
optionee hereunder shall bear the following legend:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended, or under
applicable state securities laws. The shares have been acquired for
investment and may not be offered, sold, transferred, pledged or
otherwise disposed of without an effective registration statement under
the
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Securities Act of 1933, as amended, and under any applicable state
securities laws or an opinion of counsel acceptable to the Company that
the proposed transaction will be exempt from such registration."
The foregoing legend shall be removed upon registration of the legended shares
under the Securities Act of 1933, as amended, and under any applicable state
laws or upon receipt of any opinion of counsel acceptable to the Company that
said registration is no longer required.
The sole purpose of the agreements, warranties, representations and
legend set forth in the two immediately preceding paragraphs is to prevent
violations of the Securities Act of 1933, as amended, and any applicable state
securities laws.
It is the intention of the Company and you that this option shall, if
possible, be an "Incentive Stock Option" as that term is used in Section 422 of
the Code and the regulations thereunder. In the event this option is in any way
inconsistent with the legal requirements of the Code or the regulations
thereunder for an "Incentive Stock Option," this option shall be deemed
automatically amended as of the date hereof to conform to such legal
requirements, if such conformity may be achieved by amendment.
Nothing herein shall modify your status as an at-will employee of the
Company. Further, nothing herein guarantees you employment for any specified
period of time. This means that either you or the Company may terminate your
employment at any time for any reason, or no reason. You recognize that, for
instance, you may terminate your employment or the Company may terminate your
employment prior to the date on which your option becomes vested.
Any dispute or disagreement between you and the Company with respect to
any portion of this option or its validity, construction, meaning, performance
or your rights hereunder shall be settled by arbitration in accordance with the
Commercial Arbitration Rules of the American Arbitration Association or its
successor, as amended from time to time. However, prior to submission to
arbitration you will attempt to resolve any disputes or disagreements with the
Company over this option amicably and informally, in good faith, for a period
not to exceed two weeks. Thereafter, the dispute or disagreement will be
submitted to
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arbitration. At any time prior to a decision from the arbitrator(s) being
rendered, you and the Company may resolve the dispute by settlement. You and the
Company shall equally share the costs charged by the American Arbitration
Association or its successor, but you and the Company shall otherwise be solely
responsible for your own respective counsel fees and expenses. The decision of
the arbitrator(s) shall be made in writing, setting forth the award, the reasons
for the decision and award and shall be binding and conclusive on you and the
Company. Further, neither you nor the Company shall appeal any such award.
Judgment of a court of competent jurisdiction may be entered upon the award and
may be enforced as such in accordance with the provisions of the award.
This option shall be subject to the terms of the Plan in effect on the
date this option is granted, which terms are hereby incorporated herein by
reference and made a part hereof. In the event of any conflict between the terms
of this option and the terms of the Plan in effect on the date of this option,
the terms of the Plan shall govern. This option constitutes the entire
understanding between the Company and you with respect to the subject matter
hereof and no amendment, supplement or waiver of this option, in whole or in
part, shall be binding upon the Company unless in writing and signed by the
President of the Company. This option and the performances of the parties
hereunder shall be construed in accordance with and governed by the laws of the
State of Delaware.
Please sign the copy of this option and return it to the Company's
Secretary, thereby indicating your understanding of and agreement with its terms
and conditions.
Kreisler Manufacturing Corporation
By: ______________________________
I hereby acknowledge receipt of a copy of the foregoing stock option
and, having read it hereby signify my understanding of, and my agreement with,
its terms and conditions.
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_________________________________ __________________
(Signature) (Date)
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APPENDIX II
NON-QUALIFIED STOCK OPTION FOR OFFICERS AND OTHER KEY EMPLOYEES
To: __________________________________________________________________________
Name
__________________________________________________________________________
Address
Date of Grant: ________________________________________________________________
You are hereby granted an option, effective as of the date hereof, to
purchase __________ shares of common stock, $.50 par value per share ("Common
Stock"), of Kreisler Manufacturing Corporation, a Delaware corporation (the
"Company") at a price of $_____ per share pursuant to the Company's 1997 Stock
Option Plan (the "Plan").
Your option may first be exercised on and after one year from the date
of grant, but not before that time. On and after one year and prior to two years
from the date of grant, your option may be exercised for up to 33 1/3% of the
total number of shares subject to the option minus the number of shares
previously purchased by exercise of the option (as adjusted for any change in
the outstanding shares of the Common Stock of the Company by reason of a stock
dividend, stock split, combination of shares, recapitalization, merger,
consolidation, transfer of assets, reorganization, conversion or what the
Committee deems in its sole discretion to be similar circumstances). Each
succeeding year thereafter, your option may be exercised for up to an additional
33_% of the total number of shares subject to the option minus the number of
shares previously purchased by exercise of the option (as adjusted for any
change in the outstanding shares of the Common Stock of the Company by reason of
a stock dividend, stock split, combination of shares, recapitalization, merger,
consolidation, transfer of assets, reorganization, conversion or what the
Committee deems in its sole discretion to be similar circumstances). Thus, this
option is fully exercisable on and after three years after the date of grant,
except if terminated earlier as provided herein. This option shall terminate and
is not
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exercisable after ten years from the date of its grant (the "Scheduled
Termination Date"), except if terminated earlier as hereafter provided.
In the event of a "Change of Control" (as defined below) of the
Company, your option may, from and after the date of the Change of Control, and
notwithstanding the immediately preceding paragraph, be exercised for up to 100%
of the total number of shares then subject to the option minus the number of
shares previously purchased upon exercise of the option (as adjusted for stock
dividends, stock splits, combinations of shares and what the Committee deems in
its sole discretccelerate accordingly. A "Change of Control" shall be deemed to
have occurred upon the happening of any of the following events:
1. A change within a twelve-month period in the holders of more than
50% of the outstanding voting stock of the Company; or
2. Any other event deemed to constitute a "Change of Control" by the
Committee.
You may exercise your option by giving written notice to the Secretary
of the Company on forms supplied by the Company at its then principal executive
office, accompanied by payment of the option price for the total number of
shares you specify that you wish to purchase. The payment may be in any of the
following forms: (a) cash, which may be evidenced by a check and includes cash
received from a stock brokerage firm in a so-called "cashless exercise"; (b)
(unless prohibited by the Committee) certificates representing shares of Common
Stock of the Company, which will be valued by the Secretary of the Company at
the fair market value per share of the Company's Common Stock (as determined in
accordance with the Plan) on the date of delivery of such certificates to the
Company, accompanied by an assignment of the stock to the Company; or (c)
(unless prohibited by the Committee) any combination of cash and Common Stock of
the Company valued as provided in clause (b). Any assignment of stock shall be
in a form and substance satisfactory to the Secretary of the Company, including
guarantees of signature(s) and payment of all transfer taxes if the Secretary
deems such guarantees necessary or desirable.
Your option will, to the extent not previously exercised by you,
terminate three months after the date on which your employment
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by the Company or a Company subsidiary corporation is terminated (whether such
termination be voluntary or involuntary) other than by reason of disability as
defined in Section 22(e)(3) of the Internal Revenue Code of 1986, as amended
(the "Code"), and the regulations thereunder, or death, in which case your
option will terminate one year from the date of termination of employment due to
disability or death (but in no event later than the Scheduled Termination Date).
After the date your employment is terminated, as aforesaid, you may exercise
this option only for the number of shares which you had a right to purchase and
did not purchase on the date your employment terminated. If you are employed by
a Company subsidiary corporation, your employment shall be deemed to have
terminated on the date your employer ceases to be a Company subsidiary
corporation, unless you are on that date transferred to the Company or another
Company subsidiary corporation. Your employment shall not be deemed to have
terminated if you are transferred from the Company to a Company subsidiary
corporation, or vice versa, or from one Company subsidiary corporation to
another Company subsidiary corporation.
If you die while employed by the Company or a Company subsidiary
corporation, your executor or administrator, as the case may be, may, at any
time within one year after the date of your death (but in no event later than
the Scheduled Termination Date), exercise the option as to any shares which you
had a right to purchase and did not purchase during your lifetime. If your
employment with the Company or a Company parent or subsidiary corporation is
terminated by reason of your becoming disabled (within the meaning of Section
22(e)(3) of the Code and the regulations thereunder), you or your legal guardian
or custodian may at any time within one year after the date of such termination
(but in no event later than the Scheduled Termination Date), exercise the option
as to any shares which you had a right to purchase and did not purchase prior to
such termination. Your executor, administrator, guardian or custodian must
present proof of his authority satisfactory to the Company prior to being
allowed to exercise this option.
In the event of any change in the outstanding shares of the Common
Stock of the Company by reason of a stock dividend, stock split, combination of
shares, recapitalization, merger, consolidation, transfer of assets,
reorganization, conversion or what the Committee deems in its sole discretion to
be similar
17
<PAGE>
circumstances, the number and kind of shares subject to this option and the
option price of such shares shall be appropriately adjusted in a manner to be
determined in the sole discretion of the Committee.
In the event of a liquidation of the Company, including (but not
limited to) a transfer of assets followed by a liquidation of the Company, the
Committee shall have the right to terminate this option upon thirty (30) days
prior written notice to you, notwithstanding anything to the contrary contained
in this option.
This option is not transferable otherwise than by will or the laws of
descent and distribution, and is exercisable during your lifetime only by you,
including, for this purpose, your legal guardian or custodian in the event of
disability. Until the option price has been paid in full pursuant to due
exercise of this option and the purchased shares are delivered to you, you do
not have any rights as a shareholder of the Company. The Company reserves the
right not to deliver to you the shares purchased by virtue of the exercise of
this option during any period of time in which the Company deems, in its sole
discretion, that such delivery would violate a federal, state, local or
securities exchange rule, regulation or law.
Notwithstanding anything to the contrary contained herein, this option
is not exercisable until all the following events occur and during the following
periods of time:
(a) Until the Plan pursuant to which this option is granted is
approved by the shareholders of the Company in the manner prescribed by the Code
and the regulations thereunder;
(b) Until this option and the optioned shares are approved
and/or registered with such federal, state and local regulatory bodies or
agencies and securities exchanges as the Company may deem necessary or
desirable; or
(c) During any period of time in which the Company deems that
the exercisability of this option, the offer to sell the shares optioned
hereunder, or the sale thereof, may violate a federal, state, local or
securities exchange rule, regulation or law, or may cause the Company to be
legally obligated to issue or
18
<PAGE>
sell more shares than the Company is legally entitled to issue or sell.
(d) Until you have paid or made suitable arrangements to pay
(which may include payment through the surrender of Common Stock, unless
prohibited by the Committee) (i) all federal, state and local income tax
withholding required to be withheld by the Company in connection with the option
exercise and (ii) the employee's portion of other federal, state and local
payroll and other taxes due in connection with the option exercise.
If in any year in which this option is exercised the Company
is entitled to a corporate federal income tax deduction for the excess of the
fair market value of the stock acquired under this option over the option price,
the Company agrees to pay to you, within ten days after the date of exercise, an
amount equal to 25% of such excess in order to assist you in paying your federal
and state income taxes resulting from the exercise of this option.
The following two paragraphs shall be applicable if, on the
date of exercise of this option, the Common Stock to be purchased pursuant to
such exercise has not been registered under the Securities Act of 1933, as
amended, and under applicable state securities laws, and shall continue to be
applicable for so long as such registration has not occurred:
(a) The optionee hereby agrees, warrants and represents that
he will acquire the Common Stock to be issued hereunder for his own account for
investment purposes only, and not with a view to, or in connection with, any
resale or other distribution of any of such shares, except as hereafter
permitted. The optionee further agrees that he will not at any time make any
offer, sale, transfer, pledge or other disposition of such Common Stock to be
issued hereunder without an effective registration statement under the
Securities Act of 1933, as amended, and under any applicable state securities
laws or an opinion of counsel acceptable to the Company to the effect that the
proposed transaction will be exempt from such registration. The optionee shall
execute such instruments, representations, acknowledgements and agreements as
the Company may, in its sole discretion, deem advisable to avoid any violation
of federal, state, local or securities exchange rule, regulation or law.
19
<PAGE>
(b) The certificates for Common Stock to be issued to the
optionee hereunder shall bear the following legend:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended, or under
applicable state securities laws. The shares have been acquired for
investment and may not be offered, sold, transferred, pledged or
otherwise disposed of without an effective registration statement under
the Securities Act of 1933, as amended, and under any applicable state
securities laws or an opinion of counsel acceptable to the Company that
the proposed transaction will be exempt from such registration."
The foregoing legend shall be removed upon registration of the legended shares
under the Securities Act of 1933, as amended, and under any applicable state
laws or upon receipt of any opinion of counsel acceptable to the Company that
said registration is no longer required.
The sole purpose of the agreements, warranties, representations and
legend set forth in the two immediately preceding paragraphs is to prevent
violations of the Securities Act of 1933, as amended, and any applicable state
securities laws.
It is the intention of the Company and you that this option shall not
be an "Incentive Stock Option" as that term is used in Section 422 of the Code
and the regulations thereunder.
Nothing herein shall modify your status as an at-will employee of the
Company. Further, nothing herein guarantees you employment for any specified
period of time. This means that either you or the Company may terminate your
employment at any time for any reason, or no reason. You recognize that, for
instance, you may terminate your employment or the Company may terminate your
employment prior to the date on which your option becomes vested.
Any dispute or disagreement between you and the Company with respect to
any portion of this option or its validity, construction, meaning, performance
or your rights hereunder shall be settled by arbitration in accordance with the
Commercial Arbitration Rules of the American Arbitration Association or its
successor, as amended from time to time. However, prior to
20
<PAGE>
submission to arbitration you will attempt to resolve any disputes or
disagreements with the Company over this option amicably and informally, in good
faith, for a period not to exceed two weeks. Thereafter, the dispute or
disagreement will be submitted to arbitration. At any time prior to a decision
from the arbitrator(s) being rendered, you and the Company may resolve the
dispute by settlement. You and the Company shall equally share the costs charged
by the American Arbitration Association or its successor, but you and the
Company shall otherwise be solely responsible for your own respective counsel
fees and expenses. The decision of the arbitrator(s) shall be made in writing,
setting forth the award, the reasons for the decision and award and shall be
binding and conclusive on you and the Company. Further, neither you nor the
Company shall appeal any such award. Judgment of a court of competent
jurisdiction may be entered upon the award and may be enforced as such in
accordance with the provisions of the award.
This option shall be subject to the terms of the Plan in effect on the
date this option is granted, which terms are hereby incorporated herein by
reference and made a part hereof. In the event of any conflict between the terms
of this option and the terms of the Plan in effect on the date of this option,
the terms of the Plan shall govern. This option constitutes the entire
understanding between the Company and you with respect to the subject matter
hereof and no amendment, supplement or waiver of this option, in whole or in
part, shall be binding upon the Company unless in writing and signed by the
President of the Company. This option and the performances of the parties
hereunder shall be construed in accordance with and governed by the laws of the
State of Delaware.
Please sign the copy of this option and return it to the Company's
Secretary, thereby indicating your understanding of and agreement with its terms
and conditions.
Kreisler Manufacturing Corporation
By: ______________________________
21
<PAGE>
I hereby acknowledge receipt of a copy of the foregoing stock option
and, having read it hereby signify my understanding of, and my agreement with,
its terms and conditions.
_________________________________ __________________
(Signature) (Date)
22
<PAGE>
APPENDIX III
NON-QUALIFIED STOCK OPTION FOR DIRECTORS
AND IMPORTANT CONSULTANTS
To: __________________________________________________________________________
Name
__________________________________________________________________________
Address
Date of Grant: ________________________________________________________________
You are hereby granted an option, effective as of the date hereof, to
purchase __________ shares of common stock, $.50 par value per share ("Common
Stock"), of Kreisler Manufacturing Corporation, a Delaware corporation (the
"Company") at a price of $_____ per share pursuant to the Company's 1997 Stock
Option Plan (the "Plan").
Your option may first be exercised on and after one year from the date
of grant, but not before that time. On and after one year and prior to two years
from the date of grant, your option may be exercised for up to 33 1/3% of the
total number of shares subject to the option minus the number of shares
previously purchased by exercise of the option (as adjusted for any change in
the outstanding shares of the Common Stock of the Company by reason of a stock
dividend, stock split, combination of shares, recapitalization, merger,
consolidation, transfer of assets, reorganization, conversion or what the
Committee deems in its sole discretion to be similar circumstances). Each
succeeding year thereafter, your option may be exercised for up to an additional
33_% of the total number of shares subject to the option minus the number of
shares previously purchased by exercise of the option (as adjusted for any
change in the outstanding shares of the Common Stock of the Company by reason of
a stock dividend, stock split, combination of shares, recapitalization, merger,
consolidation, transfer of assets, reorganization, conversion or what the
Committee deems in its sole discretion to be similar circumstances). Thus, this
option is fully exercisable on and
23
<PAGE>
after three years after the date of grant, except if terminated earlier as
provided herein. This option shall terminate and is not exercisable after ten
years from the date of its grant (the "Scheduled Termination Date"), except if
terminated earlier as hereafter provided.
In the event of a "Change of Control" (as defined below) of the
Company, your option may, from and after the date of the Change of Control, and
notwithstanding the immediately preceding paragraph, be exercised for up to 100%
of the total number of shares then subject to the option minus the number of
shares previously purchased upon exercise of the option (as adjusted for stock
dividends, stock splits, combinations of shares and what the Committee deems in
its sole discretccelerate accordingly. A "Change of Control" shall be deemed to
have occurred upon the happening of any of the following events:
1. A change within a twelve-month period in the holders of more than
50% of the outstanding voting stock of the Company; or
2. Any other event deemed to constitute a "Change of Control" by the
Committee.
You may exercise your option by giving written notice to the Secretary
of the Company on forms supplied by the Company at its then principal executive
office, accompanied by payment of the option price for the total number of
shares you specify that you wish to purchase. The payment may be in any of the
following forms: (a) cash, which may be evidenced by a check and includes cash
received from a stock brokerage firm in a so-called "cashless exercise"; (b)
(unless prohibited by the Committee) certificates representing shares of Common
Stock of the Company, which will be valued by the Secretary of the Company at
the fair market value per share of the Company's Common Stock (as determined in
accordance with the Plan) on the date of delivery of such certificates to the
Company, accompanied by an assignment of the stock to the Company; or (c)
(unless prohibited by the Committee) any combination of cash and Common Stock of
the Company valued as provided in clause (b). Any assignment of stock shall be
in a form and substance satisfactory to the Secretary of the Company, including
guarantees of signature(s) and payment of all transfer taxes if the Secretary
deems such guarantees necessary or desirable.
24
<PAGE>
Your option will, to the extent not previously exercised by you,
terminate three months after the date on which you cease for any reason to be a
director of, or consultant to, the Company or a subsidiary corporation (whether
by death, disability, resignation, removal, failure to be reappointed, reelected
or otherwise, or the expiration of any consulting arrangement, and regardless of
whether the failure to continue as a director or consultant was for cause or
without cause or otherwise), but in no event later than ten years from the date
this option is granted. After the date you cease to be a director or consultant,
you may exercise this option only for the number of shares which you had a right
to purchase and did not purchase on the date you ceased to be a director or
consultant. If you are a director of a subsidiary corporation, your directorship
shall be deemed to have terminated on the date such company ceases to be a
subsidiary corporation, unless you are also a director of the Company or another
subsidiary corporation, or on that date became a director of the Company or
another subsidiary corporation. Your directorship or consultancy shall not be
deemed to have terminated if you cease being a director of, or consultant to,
the Company or a subsidiary corporation but are or concurrently therewith become
a director of, or consultant to, the Company or another subsidiary corporation.
In the event of any change in the outstanding shares of the Common
Stock of the Company by reason of a stock dividend, stock split, combination of
shares, recapitalization, merger, consolidation, transfer of assets,
reorganization, conversion or what the Committee deems in its sole discretion to
be similar circumstances, the number and kind of shares subject to this option
and the option price of such shares shall be appropriately adjusted in a manner
to be determined in the sole discretion of the Committee.
In the event of a liquidation of the Company, including (but not
limited to) a transfer of assets followed by a liquidation of the Company, the
Committee shall have the right to terminate this option upon thirty (30) days
prior written notice to you, notwithstanding anything to the contrary contained
in this option.
This option is not transferable otherwise than by will or the laws of
descent and distribution, and is exercisable during your lifetime only by you,
including, for this purpose, your legal guardian or custodian in the event of
disability. Until the option
25
<PAGE>
price has been paid in full pursuant to due exercise of this option and the
purchased shares are delivered to you, you do not have any rights as a
shareholder of the Company. The Company reserves the right not to deliver to you
the shares purchased by virtue of the exercise of this option during any period
of time in which the Company deems, in its sole discretion, that such delivery
would violate a federal, state, local or securities exchange rule, regulation or
law.
Notwithstanding anything to the contrary contained herein, this option
is not exercisable until all the following events occur and during the following
periods of time:
(a) Until the Plan pursuant to which this option is granted is
approved by the shareholders of the Company in the manner prescribed by the Code
and the regulations thereunder;
(b) Until this option and the optioned shares are approved
and/or registered with such federal, state and local regulatory bodies or
agencies and securities exchanges as the Company may deem necessary or
desirable; or
(c) During any period of time in which the Company deems that
the exercisability of this option, the offer to sell the shares optioned
hereunder, or the sale thereof, may violate a federal, state, local or
securities exchange rule, regulation or law, or may cause the Company to be
legally obligated to issue or sell more shares than the Company is legally
entitled to issue or sell.
(d) Until you have paid or made suitable arrangements to pay
(which may include payment through the surrender of Common Stock, unless
prohibited by the Committee) (i) all federal, state and local income tax
withholding required to be withheld by the Company in connection with the option
exercise and (ii) the employee's portion of other federal, state and local
payroll and other taxes due in connection with the option exercise.
The following two paragraphs shall be applicable if, on the
date of exercise of this option, the Common Stock to be purchased pursuant to
such exercise has not been registered under the Securities Act of 1933, as
amended, and under applicable state
26
<PAGE>
securities laws, and shall continue to be applicable for so long as such
registration has not occurred:
(a) The optionee hereby agrees, warrants and represents that
he will acquire the Common Stock to be issued hereunder for his own account for
investment purposes only, and not with a view to, or in connection with, any
resale or other distribution of any of such shares, except as hereafter
permitted. The optionee further agrees that he will not at any time make any
offer, sale, transfer, pledge or other disposition of such Common Stock to be
issued hereunder without an effective registration statement under the
Securities Act of 1933, as amended, and under any applicable state securities
laws or an opinion of counsel acceptable to the Company to the effect that the
proposed transaction will be exempt from such registration. The optionee shall
execute such instruments, reprule, regulation or law.
(b) The certificates for Common Stock to be issued to the
optionee hereunder shall bear the following legend:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended, or under
applicable state securities laws. The shares have been acquired for
investment and may not be offered, sold, transferred, pledged or
otherwise disposed of without an effective registration statement under
the Securities Act of 1933, as amended, and under any applicable state
securities laws or an opinion of counsel acceptable to the Company that
the proposed transaction will be exempt from such registration."
The foregoing legend shall be removed upon registration of the legended shares
under the Securities Act of 1933, as amended, and under any applicable state
laws or upon receipt of any opinion of counsel acceptable to the Company that
said registration is no longer required.
The sole purpose of the agreements, warranties, representations and
legend set forth in the two immediately preceding paragraphs is to prevent
violations of the Securities Act of 1933, as amended, and any applicable state
securities laws.
27
<PAGE>
It is the intention of the Company and you that this option shall not
be an "Incentive Stock Option" as that term is used in Section 422 of the Code
and the regulations thereunder.
Any dispute or disagreement between you and the Company with respect to
any portion of this option or its validity, construction, meaning, performance
or your rights hereunder shall be settled by arbitration in accordance with the
Commercial Arbitration Rules of the American Arbitration Association or its
successor, as amended from time to time. However, prior to submission to
arbitration you will attempt to resolve any disputes or disagreements with the
Company over this option amicably and informally, in good faith, for a period
not to exceed two weeks. Thereafter, the dispute or disagreement will be
submitted to arbitration. At any time prior to a decision from the arbitrator(s)
being rendered, you and the Company may resolve the dispute by settlement. You
and the Company shall equally share the costs charged by the American
Arbitration Association or its successor, but you and the Company shall
otherwise be solely responsible for your own respective counsel fees and
expenses. The decision of the arbitrator(s) shall be made in writing, setting
forth the award, the reasons for the decision and award and shall be binding and
conclusive on you and the Company. Further, neither you nor the Company shall
appeal any such award. Judgment of a court of competent jurisdiction may be
entered upon the award and may be enforced as such in accordance with the
provisions of the award.
This option shall be subject to the terms of the Plan in effect on the
date this option is granted, which terms are hereby incorporated herein by
reference and made a part hereof. In the event of any conflict between the terms
of this option and the terms of the Plan in effect on the date of this option,
the terms of the Plan shall govern. This option constitutes the entire
understanding between the Company and you with respect to the subject matter
hereof and no amendment, supplement or waiver of this option, in whole or in
part, shall be binding upon the Company unless in writing and signed by the
President of the Company. This option and the performances of the parties
hereunder shall be construed in accordance with and governed by the laws of the
State of Delaware.
28
<PAGE>
Please sign the copy of this option and return it to the Company's
Secretary, thereby indicating your understanding of and agreement with its terms
and conditions.
Kreisler Manufacturing Corporation
By: ______________________________
I hereby acknowledge receipt of a copy of the foregoing stock option
and, having read it hereby signify my understanding of, and my agreement with,
its terms and conditions.
_________________________________ __________________
(Signature) (Date)
<PAGE>
EXHIBIT 10.2
<PAGE>
THIS AGREEMENT made the 21st day of March in the year One Thousand Nine
Hundred and Seventy-Eight
Between SHIRLEY ANTKIES and JACK ANTKIES, as Trustees under the Will of
Samuel Antkies, deceased, c/o Shirley Antkies, 2780 No. E. 183rd Street, North
Miami Beach, Florida, SIDNEY MESSER, residing at 1601 South Ocean Drive,
Hollywood, Florida, and NATHAN MALAMUTH, residing at 3180 South Ocean Drive,
Hallandale, Florida, parties of the first part hereinafter known as the
landlord,
And KREISLER MANUFACTURING CORPORATION, a Delaware Corporation, having
its home office at 2600 22nd Street North, St. Petersberg, Fla., and KREISLER
INDUSTRIAL CORPORATION, a New Jersey Corporation, having its office at 180 Van
Riper Avenue, Elmwood Park, New Jersey, parties of the second part hereinafter
known as the Tenant:
Witnesseth, That the said landlord has agreed to LET and DEMISE and
hereby does LET and DEMISE to the said Tenant, and the said Tenant has agreed to
HIRE and hereby does HIRE from the said Landlord, the following premises: all
that property now occupied by the tenant located in Elmwood Park, New Jersey,
comprising a total area of approximately 90,000 square feet, on which there is
presently located a building now occupied by the tenant having an area of
approximately 52,000 square feet on the same 90,000 square feet area.
for the term of seven (7) years to commence on the first day of October
1978, and to end on the 30th day of September 1985, to be used and occupied only
for light manufacturing and for any other business or purposes now being
conducted by the tenant which comply with the terms of a variance hereinbefore
granted outlining the types of business to be excluded.
Upon the following Conditions and Covenants:
FIRST: That the said Tenant hereby covenants and agrees to pay unto the
said Landlord the annual rent or sum of FIFTY-EIGHT THOUSAND FIVE HUNDRED
DOLLARS ($58,500.00) and 00/100------payable in equal monthly payment of
$4,875.00 per month and payable in advance on the first day of each and every
month during the entire term of this lease; tenant shall have the privilege of a
five day grace period for the payment of its monthly rent.
SECOND: That the Tenant shall take good care of the premises and shall
at its own cost and expense make all repairs both interior and exterior, and at
the end or other expiration of the term, shall deliver up the demised premises
in good order or condition, damages by the elements excepted. See Paragraph 29th
of attached Rider.
THIRD: That the Tenant shall promptly execute and comply with all
statutes, ordinances, rules, orders, regulations and requirements of the
Federal, State and City Government and of any and all their Departments and
Bureaus applicable to said premises, for the correction, prevention, and
abatement of nuisances, violations or other grievances, in, upon or connected
with said premises during said term; and shall also promptly comply with and
execute all rules, orders and regulations
<PAGE>
of the Board of Fire Underwriters for the prevention of fires at its own cost
and expense provided they relate to the business of, or use and occupation by
the tenant.
FOURTH: That in case the Tenant shall fail or neglect to comply with
the aforesaid statutes, ordinances, rules, orders, regulations and requirements
or any of them, or in case the Tenant shall fail or neglect to make any
necessary repairs, then the Landlord or his Agents may enter said premises and
make said repairs and comply with any and all of the said statutes, ordinances,
rules, orders, regulations or requirements, at the cost and expense of the
Tenant and in case of the Tenant's failure to pay therefor, the said cost and
expense shall be added to the next month's rent and be due and payable as such,
or the Landlord may deduct the same from the balance of any sum remaining in the
Landlord's hands. This provision is in addition to the right of the Landlord to
terminate this lease by reason of any default on the part of the Tenant. The
Landlord shall promptly deliver to tenant any notice of violations received by
it.
EIGHTH: (missing text on copy)____________________________________,
representatives, shall have the right to enter into and upon said premises, or
any part thereof, at all reasonable hours necessary for the safety and
preservation thereof, provided the same does not unreasonably interfere with
tenant's use of the premises.
NINTH: That the Tenant also agrees to permit the Landlord or his Agents
to show the premises to persons wishing to hire or purchase the same; and the
Tenant further agrees that on and after one year next preceding the expiration
of the term hereby granted, the Landlord or his Agents shall have the right to
place notices on the front of said premises, or any part thereof, offering the
premises "To Let" or "For Sale," and the Tenant hereby agrees to permit the same
to remain thereon without hindrance or molestation, at reasonable times during
business hours.
FIFTEENTH: That if default be made in any of the covenants herein
contained, then it shall be lawful for the said Landlord to re-enter the said
premises, and the same to have again re-possess and enjoy.
SIXTEENTH: That this instrument shall not be a lien against said
premises in respect to any bona fide mortgages that hereafter may be placed
against said premises,, which mortgages are not to exceed in the aggregate the
sum of FOUR HUNDRED FIFTY THOUSAND ($450,000.00) and 0/100 Dollars, and that the
recording of such mortgage or mortgages shall have preference and precedence and
be superior and prior in lien of this lease, irrespective of the date of
recording and the Tenant agrees to execute any such instrument without cost,
which may be deemed necessary or desirable to further effect the subordination
of this lease to any such mortgage or mortgages, and a refusal to execute such
instruments shall entitle the Landlord, his assigns and legal representatives to
the option of cancelling this lease without incurring any expense or damage, and
the term hereby granted is expressly limited accordingly.
EIGHTEENTH: That the security deposited under this lease shall not be
mortgaged, assigned or encumbered by the Tenant without the written consent of
the Landlord.
-2-
<PAGE>
NINETEENTH: It is expressly understood and agreed that if for any
reason it shall be impossible to obtain fire insurance on the buildings and
improvements on the demised premises in an amount, and in the form, and in fire
insurance companies acceptable to the Landlord, the latter may, if he so elect,
at any time thereafter terminate this lease and the term thereof, on giving to
the Tenant three days' notice in writing of his intention to do and upon the
giving of such notice, this lease and the term thereof shall terminate and come
to an end.
TWENTY-SECOND: The failure of the Landlord to insist upon strict
performance of any of the covenants or conditions of this lease or to exercise
any option herein conferred in any one or more instances, shall not be construed
as a waiver or relinquishment for the future of any such covenants, conditions
or options, but the same shall be and remain in full force and effect.
TWENTY-THIRD: If after default in payment of rent or violation of any
other provision of this lease, or upon the expiration of this lease, the Tenant
moves out or is dispossessed and fails to remove any trade fixtures or other
property prior to such said default, removal, expiration of lease, or prior to
the issuance of the final order or execution of the warrant, then and in that
event, the said fixtures and property shall be deemed abandoned by the said
Tenant and shall become the property of the Landlord.
TWENTY-FOURTH: In the event that the relation of the Landlord and
Tenant may cease or terminate by reason of the re-entry of the landlord under
the terms and covenants contained in this lease or by the ejectment of the
Tenant by summary proceedings or otherwise, or after the abandonment of the
premises by the Tenant, it is hereby agreed that the Tenant shall remain liable
and shall pay in monthly payments the rent which accrues subsequent to the
re-entry by the Landlord, and the Tenant expressly agrees to pay as damages for
the breach of the covenants herein contained, the difference between the rent
reserved and the rent collected and received, if any, by the Landlord, during
the remainder of the unexpired term, such difference or deficiency between the
rent herein reserved and the rent collected, if any, shall become due and
payable in monthly payments during the remainder of the unexpired term, as the
amounts of such difference or deficiency shall from time to time be ascertained.
TWENTY-FIFTH: If the whole or any part of the demised premises shall be
acquired or condemned by Eminent Domain for any public or quasi public use or
purpose, then and in that event, the term of this lease shall cease and
terminate from the date of title vesting in such proceeding and tenant shall
have no claim against landlord for the value of any unexpired term of said
lease. No part of any award shall belong to the tenant. In the event of
condemnation, the rent shall be apportioned to the date of title vesting in such
condemnation proceeding.
TWENTY-SIXTH: That the tenant shall neither encumber, nor obstruct the
sidewalk in front of, entrance to or halls and stairs of said building, nor
allow the same to be obstructed or encumbered in any manner.
-3-
<PAGE>
TWENTY-SEVENTH: That the tenant will not nor will the tenant permit
undertenants or other persons to do anything in said premises, or bring anything
into said premises, or bring anything into said premises, or permit anything to
be brought into said premises or to be kept therein, which will in any way
increase the rate of fire insurance on said demised premises, nor use the
demised premises or any part thereof, nor suffer or permit their use for any
business or purpose which would cause an increase in the rate of fire insurance
on said building, and the tenant agrees to pay on demand any such increase.
TWENTY-EIGHTH: In case of damage, by fire or other cause, to the
building in which the leased premises are located, without the fault of the
tenant or of tenant's agent or employees, if the damage is so extensive as to
amount practically to the total destruction of the leased premises or of the
building, or if the landlord shall within a reasonable time decide not to
rebuild, this lease shall cease and come to an end, and the rent shall be
apportioned to the time of the damage. In all other cases where the leased
premises are damaged by fire without the fault of the tenant or of tenant's
agents or employees the landlord shall repair the damage with reasonable
dispatch after notice of damage, and if the damage has rendered the premises
untenable* (see rider)
And the said Landlord does covenant that the said Tenant on paying the
said rent, and performing the covenants aforesaid, shall and may peaceably and
quietly have, hold and enjoy the said demised premises for the term aforesaid.
And it is further understood and agreed, that the covenants and
agreements herein contained are binding on the parties hereto and their legal
representatives.
IN WITNESS WHEREOF, the said parties have set their hands and seals or
caused these presents to be signed by their proper corporate officers and caused
their proper corporate seal to be hereto affixed the day and year first above
written.
/s/ /s/
- ---------------------------- ----------------------------
______ to landlord Shirley Antkies
KREISLER MANUFACTURING CORPORATION /s/
----------------------------
Jack Antkies
/s/ Trustees under the Will of
- ---------------------------- Samuel Antkies, deceased
President-Tenant
ATTEST: /s/
----------------------------
/s/ Sidney Messer
- ----------------------------
Secretary - Asst
/s/
----------------------------
ATTEST Nathan Malamuth, Landlord
/s/ KREISLER INDUSTRIAL CORPORATION
- ----------------------------
Secretary By: /s/
----------------------------
President-tenant
-4-
<PAGE>
RIDER
* in whole or in part, there shall be an apportionment of the rent until the
damage has been repaired. In determining what constitutes reasonable dispatch
consideration shall be given to delays caused by strikes, adjustment of
insurance and other causes beyond the landlord's control.
TWENTY-NINTH: Under the terms of Paragraph Second of the within lease, the
tenant has agreed to be liable for and to make all necessary repairs to both the
interior and exterior of the building. In addition thereto, the tenant agrees to
keep the driveway and parking lot in good repair and further agrees that the
said parking lot shall be used for parking only. The tenant further agrees to be
liable for all roof repairs except if it becomes necessary to replace the entire
roof by reason of a total collapse due to windstorm or other external factors in
which event the landlord agrees to be responsible for the major repair.
** (See continuation of paragraph 29th on bottom of this page).
THIRTIETH: All notices required to be given to the tenant must be in writing and
forwarded to the tenant by certified or registered mail, addressed to the tenant
at 180 Van Riper Avenue, Elmwood Park, New Jersey, and all notices required to
be given to the landlord must be in writing and forwarded to the landlord by
certified or registered mail addressed to both Sidney Messer at 1601 South Ocean
Drive Hollywood, Florida 33019 (apt. 901) and to Nathan Malamuth at 3108 South
Ocean Drive, Hallandale, Florida, 33009 (apartment 804).
THIRTY-FIRST: Tenant shall not assign this agreement or underlet or underlease
the premises or any part thereof without the prior consent of the landlord,
which consent shall not unreasonably be withheld, provided, however, that the
landlord need not consent to any such assignment unless tenant shall deliver to
the landlord, in a form reasonably acceptable to the landlord, the assumption by
the assignee of all covenants and obligations, under this lease and provided,
further, that tenant shall remain liable under all of the terms of this lease
for the duration of the term. Landlord shall not be required to consent to a
sublease of part or all of the premises unless tenant shall execute and deliver
to landlord, on a form reasonably acceptable to the landlord, an assignment of
all rents to become due to tenant under said sublease, which assignment shall be
in the form of security to landlord for the performance of tenant's obligations
under this lease.
THIRTY-SECOND: Tenant may place signs on the land and buildings of the demised
premises, provided, however, that such signs shall not create a hazard to any
person or property and shall comply in every way with all applicable
governmental regulations and that tenant shall obtain, at its own expense, all
necessary permits for the erection or installation of said signs.
**(continued)
At the end or other expiration of this lease, tenant agrees to restore the
building to its original condition thus eliminating all pits and excavations
made in the floors.
-5-
<PAGE>
THIRTY-THIRD: The tenant shall, without any previous demand therefor, pay to the
landlord, or its agent, the said rent at the times and in the manner above
provided. In the event of the non-payment of said rent, or any installment
thereof, at the times and in the manner above provided, or if the tenant shall
be dispossessed for non-payment of rent, or if the leased premises shall be
deserted or vacated, or if the tenant defaults in any other covenant or
condition of this lease and such default continues for twenty days after notice
to the tenant, the landlord or its agents shall have the right to and may enter
the said premises as the agent of the tenant, either by force or otherwise,
without being liable for any prosecution or damages therefor, and may relet the
premises as the agent of the tenant, and receive the rent therefor, upon such
terms as shall be satisfactory to the landlord, and all rights of the tenant to
repossess the premises under this lease shall be forfeited. Such re-entry by the
landlord shall not operate to release the tenant from any rent to be paid or
covenants to be performed hereunder during the full term of this lease. For the
purpose of reletting, the landlord shall be authorized to make such repairs or
alterations in or to the leased premises as may be necessary to place the same
in good order and condition. The tenant shall be liable to the landlord for the
cost of such repairs or alterations, and all reasonable expenses of such
reletting. If the sum realized or to be realized from the reletting is
insufficient to satisfy the monthly or term rent provided in this lease, the
landlord, at its option, may require the tenant to pay such deficiency month by
month, or may hold the tenant in advance for the entire deficiency to be
realized during the term of the reletting. The tenant shall not be entitled to
any surplus accruing as a result of the reletting. The landlord is hereby
granted a lien, in addition to any statutory lien or right to distrain that may
exist, on all personal property of the tenant in or upon the demised premises,
to secure payment of the rent and performance of the covenants and conditions of
this lease. The landlord shall have the right, as agent of the tenant, to take
possession of any furniture, fixtures or other personal property of the tenant
found in or about the premises, and sell the same at public or private sale and
to apply the proceeds thereof to the payment of any moneys becoming due under
this lease, the tenant hereby waiving the benefit of all laws exempting property
from execution, levy and sale on distress or judgment. The tenant agrees to pay,
as additional rent, all reasonable attorney's fees and other reasonable expenses
incurred by the landlord in enforcing any of the obligations under this lease.
(a) If at any time prior to the date herein fixed as of the
commencement of the term of this lease there shall be filed by or against tenant
in any court pursuant to any statute either of the United State(sic) or of any
State a petition in bankruptcy or insolvency or for reorganization or for the
appointment of a receiver or trustee of all or a portion of tenant's property,
and within thirty (30) days thereof tenant fails to secure a discharge thereof,
or if tenant makes an assignment for the benefit of creditors, or petition for
or enter into an agreement this lease shall ipso facto be cancelled and
terminated and in which event neither tenant or any person claiming through or
under tenant or by virtue of any statute or of an order of any court shall be
entitled to possession of the demised premises and landlord, in addition to the
other rights and remedies given by (c) hereby and by virtue of any other
provision herein or elsewhere in this lease contained or by virtue of any
statute or rule of law, may retain as liquidated damages any rent, security,
deposit of moneys received by them from tenant or others in behalf of tenant
upon the execution hereof.
-6-
<PAGE>
(b) If at the date fixed as the commencement of the term of
this lease or if at any time during the term hereby demised there shall be filed
by or against Tenant in any court pursuant to any statute either of the United
States or of any State a petition in bankruptcy or insolvency or for
reorganization or for the appointment of a receiver or trustee of all or a
portion of tenant's property, and within thirty (30) days thereof tenant fails
to secure a discharge thereof, or if tenant makes an assignment for the benefit
of creditors or petition for or enter into an arrangement this lease, at the
option of the landlord, exercised within a reasonable time after notice of the
happening of any one or more of such events, may be cancelled and terminated and
in which event neither tenant nor any person claiming through or under tenant by
virtue of any statute or of an order of any court shall be entitled to
possession or to remain in possession of the premises demised but shall
forthwith quit and surrender the premises, and landlord, in addition to the
other rights and remedies landlord has by virtue of any other provision herein
or elsewhere in this lease contained or by virtue of any statute or rule of law,
may retain as liquidated damages any rent, security, deposit or moneys received
by them from tenant or others in behalf of tenant.
(c) It is stipulated and agreed that in the event of the
termination of this lease pursuant to (a) or (b) landlord shall forthwith,
notwithstanding any other provisions of this lease to the contrary, be entitled
to recover from tenant as and for liquidated damages an amount equal to the
difference between the rent reserved hereunder for the unexpired portion of the
term demised and the then fair and reasonable rental value of the demised
premises for the same period. If such premises or any part thereof be re-let by
the landlord for the unexpired term of said lease or any part thereof, before
presentation of proof of such liquidated damages to any court, commission or
tribunal, the amount of rent reserved upon such re-letting shall be prima facie
to be the fair and reasonable rental value for the part or the whole of the
premises so re-let during the term of the re-letting. Nothing herein contained
shall limit or prejudice the right of the landlord to prove for and obtain as
liquidated damages by reason of such termination, an amount equal to the maximum
allowed by any statute or rule of law in effect at the time when, and governing
the proceedings, in which such damages are to be proved, whether or not such
amount be greater, equal to, or less than the amount of the difference referred
to above.
THIRTY-FOURTH: The tenant shall be liable for the payment of, in addition to the
net rental hereinbefore mentioned, all taxes which may be charged, imposed or
assessed upon or in relation to the demised premises during the term of the
within lease, as well as all insurance, water costs, sewer rents, heating costs,
electricity and, at its own cost and expense, maintain the said premises. It is
hereby agreed by and between the parties hereto that the landlord shall make the
actual payment of the taxes and assessments, including the real property taxes
which are due quarterly on February 1st, May 1st, August 1st and November 1st
direct to the taxing authorities and the tenant further agrees to reimburse the
landlord for the payment of the aforesaid tax and assessment payments, which is
to be considered as additional rent, no later than five days after the landlord
has made the said payments and has so advised the tenant. Taxes and assessments
for the first and last years of the lease shall be apportioned pro rata. Tenant
shall not be required to pay any estate, inheritance, succession, transfer,
franchise or income taxes which may be payable by landlord and landlord's heirs,
devisees, legal representatives, successors, assigns, or any of them, or any
taxes of a similar nature. In addition thereto, the tenant shall be liable for
50% of any assessments which may be
-7-
<PAGE>
charged, imposed or assessed upon or in relation to the demised premises during
the term of the within lease.
THIRTY-FIFTH: The landlord makes no warranties or representation that the
premises may be used for the purposes set forth in this lease or any
representations or warranties of any nature, except as expressly set forth
herein.
THIRTY-SIXTH: The tenant shall not have the right to make any major alteration
without the consent of the landlord in writing. If such consent is given, or if
the tenant makes minor alterations without the landlord's consent, the tenant
shall restore the demised premises to the same condition as when received upon
request of the landlord.
THIRTY-SEVENTH: The landlord shall not be responsible for the loss or damage to
property or injury to persons, occurring in or about the demised premises, by
reason of any existing or future condition, defect, matter or thing in said
demised premises or the property of which the premises are a part, unless due to
negligence or willful conduct of landlord, its agents or employees, or for the
acts, omissions or negligence of other persons or tenants in and about the said
property. The tenant agrees to indemnify and save the landlord harmless from all
claims and liability for losses of or damage to property, or injuries to persons
occurring in or about the demised premises. In furtherance thereof, the tenant
shall carry at its own expense, public liability insurance, in a minimum amount
of Two Hundred Fifty Thousand ($250,000.00) DOLLARS for each person injured and
One Million ($1,000,000.00) DOLLARS for any one accident and One Hundred Fifty
Thousand ($150,000.00) DOLLARS for property damage in any one accident which
shall include the landlord as a named insured. Tenant shall deliver to landlord
policy of said insurance and upon default thereof, the landlord may procure the
same and tenant shall pay therefor as additional rent hereunder upon demand.
THIRTY-EIGHTH: Landlord or Landlord's agents have made no representations or
promises with respect to the demised premises and the buildings thereon except
as expressly herein set forth.
THIRTY-NINTH: In the event that any mechanic's lien is filed against the
premises as a result of alterations, additions or improvements made by the
tenant, or in the events any other lien against the premises is created by any
act or omission of tenant, the tenant shall promptly remove the same; the
landlord, at its option, after thirty (30) days notice to the tenant if the
tenant fails to remove the same within said period of 30 days notice, may pay
the said lien, without inquiring into the validity thereof, and the tenant shall
forthwith reimburse the landlord the total expense incurred by the landlord in
discharging the said lien, as additional rent hereunder.
Nothing herein contained shall be construed as a consent on the part of the
landlord to subject the landlord's property to liability under the mechanic's
lien law of the State of New Jersey, or to any lien law or any lien or charge
whatsoever.
-8-
<PAGE>
FORTIETH: The rights and remedies contained in this lease are not intended to be
exclusive, but as additional to all rights and remedies the landlord would
otherwise have by law.
FORTY-FIRST: The tenant shall procure and pay for building fire insurance with
extended coverage in the amount of SEVEN HUNDRED FIFTY THOUSAND DOLLARS
($750,000.00) and deliver the original policy to the landlord. The landlord may
obtain such insurance if the tenant fails to do so and charge the cost to tenant
as additional rent.
FORTY-SECOND: The landlord represents that it is the owner of the demised
premises having a deed for same duly recorded, and that it has full power under
the laws of the State of New Jersey to execute and deliver this lease.
FORTY-THIRD: In connection with the fire insurance specified in Paragraph
Forty-First and Paragraph "19th", the landlord will not object to any fire
insurance company authorized to do business in the State of New Jersey except
for good and sufficient reasons.
FORTY-FOURTH: Both the landlord and tenant represents and warrants that they
have had no dealings with any broker with regard to this lease.
FORTY-FIFTH: The landlord hereby acknowledges that the tenant has already
deposited with the landlord the sum of $10,000.00 as security for the full and
faithful performance by the tenant of all of the terms and conditions upon the
tenant's part to be performed; in addition thereto, the tenant has this day
deposited an additional sum of $2,500.00, thus making the total security
herewith held by the landlord to be in the sum of $12,500.00 which said sum
shall be returned to the tenant after the time fixed as the expiration of the
term herein, provided that the tenant has fully and faithfully carried out all
of the terms, covenants and conditions on its part to be performed. In the event
of a bona fide sale, subject to this lease, the landlord shall have the right to
transfer the security to the vendee for the benefit of the tenant, and the
landlord shall be considered released by the tenant from all liability for the
return of such security, and the tenant aggrees to look to the new landlord
solely for the return of the said security, and it is agreed that this shall
apply to every transfer or assignment made of the security to a new landlord.
The landlord will pay the tenant annually interest at the rate of five (5%)
percent per annum upon the said security, but will be entitled to deduct one
(1%) percent thereof for administration costs.
FORTY-SIXTH: That in the case of any damage or injury occurring to the glass in
any of the buildings on the premises or damage and injury to the said premises
of any kind whatsoever, then the said tenant shall cause the said damage or
injury to be repaired as speedily as possible at the tenant's own cost and
expense.
FORTY-SEVENTH: It is expressly agreed and understood by and between the parties
to this agreement, that the landlord shall not be liable for any damage or
injury to person or property caused by or resulting from steam, electricity,
gas, water, rain, ice or snow, or any leak or flow from or into any part of said
building, or from any damage or injury resulting or arising from any other cause
or
-9-
<PAGE>
happening whatsoever, unless due to negligence or willful conduct of the
landlord, its agents or employees.
FORTY-EIGHTH: Landlord agrees that tenant shall have the right, at its own cost
and expense, to contest the amount or legality of any tax or assessment as to
which tenant may be obligated to pay, and tenant may make application from the
reduction thereof, or of any assessment upon which the same may be based, and
landlord agrees at the request of tenant to execute or join in the execution of
any instruments or documents necessary in connection with such contest or
application and assist tenant in the prosecution of such contest or application,
but without cost or expense to landlord. If any such contest or application
shall result in a reduction of any such tax or assessment, the total amount of
any refund received by the landlord, to the extent to which the same is based
upon payment made by the tenant, shall promptly be paid by the landlord to the
tenant, or tenant may at its option deduct the same from rent thereafter
payable. (See also paragraph FIFTY-EIGHTH below.)
FORTY-NINTH: If any dispute shall arise as to any of the provisions of the
within lease and same cannot be settled amicably by the parties hereto, both the
landlord and tenant hereby agree that any such dispute shall be arbitrated
according to the rules then obtaining of the American Arbitration Association.
FIFTIETH: Shirley Antkies and Jack Antkies are the sole surviving Trustees under
the will of Samuel Antkies, deceased, and as such, together with Sidney Messer
and Nathan Malamuth, they covenant, warrant and represent that they have full
right and power to execute and perform this lease and to grant the estate
demised herein.
FIFTY-FIRST: Tenant is hereby granted the option to renew this lease on all the
same terms and conditions, except that the annual rent shall be increased by 10%
and the monthly installments of rent accordingly increased, for a renewal term
of five (5) years commencing on expiration of the initial term. Such option
shall be exercisable by written notice to be forwarded by certified or
registered mail from tenant to landlord to that effect given not later than
twelve (12) months prior to expiration of the initial term, and the said written
notice shall be forwarded either to Sidney Messer and to Nathan Malamuth at
their respective addresses set forth in the beginning of this lease, or at any
other address designated by either or both of them in the future.
FIFTY-SECOND: Anything in this lease to the contrary notwithstanding, landlord
shall be responsible for any and all roof repairs, and/or replacement until
October 1, 1978.
FIFTY-THIRD: Anything to the contrary notwithstanding, both parties hereto agree
upon the following verbiage to be added to sub-section (c) of Paragraph
Thirty-Third of this Rider relating to the computation of damages in the event
of the termination set forth therein:
In the computation of such damages, the difference between any installment of
rent becoming due hereunder after the date of termination and the fair and
reasonable rental value of the demised
-10-
<PAGE>
premises for the period for which such installment was payable shall be
discounted to the date of termination at the rate of 4% per annum
FIFTY-FOURTH: Landlord agrees that tenant shall have the right, at its own costs
and expense, to contest the amount or legality of any tax or assessment as to
which tenant may be obligated to pay, and tenant may make application for the
reduction thereof, or of any assessment upon which the same may be based, and
landlord agrees at the request of tenant to execute or join in the execution of
any instruments or documents necessary in connection with such contest or
application and assist tenant in the prosecution of such contest or application,
but without cost or expense to landlord. If any such contest or application
shall result in a reduction of any such tax or assessment, the total amount of
any refund received by the landlord, to the extent to which the same is based
upon payment made by the tenant, shall promptly be paid by the landlord to the
tenant, or tenant may at its option deduct the same from rent thereafter
payable.
FIFTY-FIFTH: Possession of the demised premises by the tenant shall include all
present installation, such as electrical system, including all buss ducts,
flourescent fixtures now installed in premises, and air conditioning equipment
in offices now partitioned, and sprinkler system, it being understood and agreed
that this paragraph shall only apply to items previously installed by the tenant
which are not affixed to the realty, and which can only be removed if no damage
is done to the realty.
FIFTY-SIXTH: The mortgages specified in paragraph Sixteenth of this lease shall
contain the following provision:
The mortgagee shall give Kreisler Manufacturing Corporation and Kreisler
Industrial Corporation, tenants of the premises covered hereby, notice by
registered or certified mail directed to said tenants at 2600 22nd Street North,
St. Petersburg, Florida and 180 Van Riper Avenue, Elmwood Park, New Jersey,
respectively, of any default under this mortgage, and will not commence any
proceedings or take any other action toward foreclosure thereof on account of
such default within twenty days after giving such notice. Said tenants shall
have the right, at their option, to remedy the mortgagor's default within such
twenty-day period and shall be subrogated to mortgagee's lien to the extent of
the remedied payments made by said tenants. The lien of this mortgage shall not
cover any of said tenants' fixtures, alterations or improvements which by law or
the terms of this lease tenant is permitted to remove from the demised premises.
FIFTY-SEVENTH: This lease supersedes and replaces that certain agreement of
lease dated November 14, 1966, between Shirley Antkies, Jack Antkies and Sol
Atkins, as Trustees under the will of Samuel Antkies, deceased, Sidney Messer
and Nathan Malamuth, as landlord, and Jacques Kreisler Manufacturing Corporation
and Kreisler Industrial Corporation, as tenant, and the supplemental lease
agreement between the same landlord and tenant dated May 13, 1968.
FIFTY-EIGHTH: Tenant may defer payment of the contested tax or assessment
pending any contest, provided that Tenant shall have deposited with Landlord a
surety bond issued by a surety
-11-
<PAGE>
company of recognized responsibility, conditioned upon the payment of the same
plus all fines, interest, penalties or costs which may become due pending such
contest or such other security satisfactory to Landlord as will insure the
payment of such tax or assessment and such fines, interest, penalties or costs.
Notwithstanding such contest, Tenant shall pay such tax or assessment no later
than ten days before the demised premises may become subject to a sale by
governmental authority by reason of the non-payment thereof. Upon the final
determination of any such contest, Tenant shall pay such tax or assessment which
may have been deferred pending such contest, together with such fines,
interests, penalties, costs and charges as may be payable in connection
therewith. (The foregoing refers to paragraph FORTY-EIGHTH above.)
-12-
<PAGE>
LEASE RENEWAL AGREEMENT
THIS agreement, this _____ day of September, A.D., 1984, by and between
SHIRLEY ANTKINS and JACK ANTKINS, as Trustees under the will of SAMUEL ANTKINS,
deceased, SIDNEY MESSER and NATHAN MALAMUTH known as the Landlord and Kreisler
Manufacturing Corporation, a Delaware Corporation and Kreisler Industrial
Corporation, a New Jersey Corporation hereinafter referred to as Tenant:
1. The Landlord and Tenant on March 21, 1978 entered into a lease, a
copy of which is attached, hereto and made a part hereof.
2. Under paragraph number fifty-first Tenant is granted the right to
renew the subject lease for an additional five year term at the expiration of
the existing term, and the Tenant has so elected to renew the lease and the
Landlord has accepted said renewal subject to the following amendment to the
existing attached lease.
A. The official address of NATHAN MALAMUTH is now: 1300 St.
Charles Place, Pembroke Lakes, Florida 33026. The official address now of
Kreisler Manufacturing Corporation is 5960 Central Avenue - Suite H St.
Petersburg, Florida.
B. The agreed annual rent for the first five year term renewal
shall be Sixty-four Thousand Nine Hundred Twenty Dollars ($64,920.00) payable
Five Thousand Four Hundred Ten Dollars ($5,410.00) per month payable in advance
on the first day of each and every month during the entire term of the lease;
Tenant shall have a privilege of a five day grace period for the payment of its
monthly rent. the first monthly rent shall be due on or before October 1, 1985.
C. Paragraph number Twenty-ninth second sentence which now
reads as follows: "The Tenant further agrees to be liable for all roof repairs
except if it becomes necessary to replace the entire roof by reason of a total
collapse due to windstorm or other external factors in which event the Landlord
agrees to be responsible for the major repairs," is amended to read and shall
now read
<PAGE>
as follows: "The Tenant further agrees to be liable for all roof
repairs." NOTE: See paragraph Fifty-Ninth.
D. Paragraph number Thirteenth is amended to give the correct
address of NATHAN MALAMUTH being: 1300 St. Charles Place, Pembroke Lakes,
Florida 33026.
E. Paragraph number Forty-First is amended to read that the
procure fire insurance with extended coverage shall be for One Million Dollars
($1,000,000.00) rather than Seven Hundred Fifty Thousand Dollars ($750,000.00).
F. Paragraph number Fifty-First is amended by adding the
following language to the paragraph.
"At the end of this renewal period which is September
30, 1990 the Tenant is hereby granted the option to
renew this lease as amended on all the same terms and
conditions except the rental amount shall be
Seventy-Two Thousand Dollars ($72,00.00) payable
monthly in advance, Six Thousand Dollars ($6,000.00)
per month."
"Tenant is further granted an option for an
additional five year term (if the lease is still in
full force and effect) beginning October 1, 1995
under the same terms and conditions, except the
rental price shall be Seventy-Nine Thousand Nine
Hundred Ninety-Two Dollars ($79,992.00) payable
monthly in advance, Six Thousand Six Hundred
Sixty-Six Dollars ($6,666.00) per month."
G. Paragraph number Fifty-Sixth is amended to give the correct
address of Kreisler Manufacturing Corporation being: 5960 Central Avenue - Suite
H, St. Petersburg, Florida.
<PAGE>
H. The attached lease is further amended by adding a new
clause Fifty-Ninth as follows:
"Fifty-Ninth: The Landlord and Tenant each agree that
the roof is in present need of repair or replacement.
The Landlord agrees to pay one half the cost of a new
roof up to a limit of liability for the Landlord of
Thirty-Two Thousand Five Hundred Dollars (32,500.00).
The roof repairs or replacement shall be performed by
a licensed roofer with a ten year warranty for the
roof."
All other terms and conditions of the original attached lease not in
conflict with this amendment shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have set their hands and seals or to be
signed by a proper corporate officer with seal attached.
- --------------------------------
---------------------------------------
- -------------------------------- SHIRLEY ANTKINS, Trustee under the Will
of Samuel Antkins, deceased
- --------------------------------
---------------------------------------
- -------------------------------- JACK ANTKINS, Trustee under the Will
of Samuel Antkins, deceased
- --------------------------------
---------------------------------------
- -------------------------------- SIDNEY MESSER
- --------------------------------
---------------------------------------
- -------------------------------- NATHAN MALAMUTH
<PAGE>
KREISLER MANUFACTURING CORP.
By:
---------------------------------------
KREISLER INDUSTRIAL CORP.
By:
---------------------------------------
<PAGE>
LEASE MODIFICATION AGREEMENT by and
between KREISLER INDUSTRIAL CORPORATION, Tenant,
AND T&T INVESTMENT COMPANY, as Successor to ANTKIES,
MESSER and MALAMUTH, Landlord
THIS AGREEMENT, made this _____ day of _________, 1995, by and between
Kreisler Industrial Corporation, hereinafter "Tenant," an T&T Investment
Company, successor in interest to Antkies, Messer and Malamuth, hereinafter
"Landlord," and concerning the premises located at 168 Van Riper Street, Elmwood
Park, New Jersey, the above-named parties do hereby agree that:
1. The parties, and/or their predecessors, entered into a written Lease
Agreement dated March 21, 1978.
2. Said Lease Agreement was renewed on or about September 25, 1984.
3. Pursuant to the terms of the original base Agreement, Paragraph
Sixteenth provided that no mortgage lien on the premises could be in excess of
the aggregate principal sum of Four Hundred Fifty Thousand ($450,000) Dollars.
4. Tenant has renewed the Lease, in accordance with the renewal
Agreement dated September 25, 1984, from October 1, 1995 until September 30,
2000.
5. The parties hereby agree that the Tenant shall have the right to
terminate the Lease during the extension term above-described, upon the
following conditions and in the following manner: Tenant shall give to Landlord,
by certified mail, return receipt requested, written notice of intention to
terminate, which notice shall be given at least one year prior to actual
termination. During said year, Tenant will remain fully responsible for any and
all obligations pursuant to the Lease and renewals thereof, and Landlord,
likewise, will be bound by the obligations thereof. Even in the event Tenant
yields possession of the demised premises to Landlord before the expiration of
one year after provision of such notice of intent to terminate, each party
agrees to remain bound by the terms and conditions of all prior written
Agreements until the expiration of one year from the date of such written notice
to terminate.
<PAGE>
6. The parties hereby agree that the provision of Paragraphs Sixteenth
and Fifty-sixth of the original base Agreement of March 21, 1978 shall be
deleted and of no further force and effect. There shall be no further
restriction on the principal amount of any mortgage placed on the premises, and
Tenant agrees to execute any and all instruments, without cost, in order to
subordinate the terms of this Lease to any mortgage requested by Landlord.
Landlord agrees, however, that any future mortgagee shall give Tenant written
notice, by certified mail, return receipt requested, of any default under such
mortgage and shall not commence any proceeding of such default within 20 days
after giving such notice. Tenant retains the right, at its option, to remedy any
mortgagor's default within such 20-day period and shall be subrogated to any
mortgagee's lien to the extent of any remedied payments made by said Tenant. The
lien of any mortgage shall not cover any of Tenant's fixtures, alterations or
improvements which, by law or the terms of prior Agreements, are permitted to be
removed from the demised premises. This paragraph 6 amendment is not legally
effective unless and until all mortgagees (both present and future) of the
leased premises signs non-disturbance agreements in form and substance
satisfactory to counsel for the Tenant.
7. The parties hereby agree that, in the event of a sale of the subject
premises by Landlord, Tenant's Lease, and any and all modifications thereto,
shall remain in full force and effect, and that any third party purchaser is
hereby bound by the provisions of same through the end of the lease term, to
wit, September 30, 2000.
8. This Lease Agreement amendment modifies and supplements the prior
written Agreements by and between the parties herein, and shall be deemed to
supercede only those paragraphs and provisions of the prior Agreements
specifically referred to herein. All other terms, provisions and obligations
contained in the previous Agreements entered into are hereby ratified and
confirmed, except where inconsistent herewith.
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IN WITNESS WHEREOF, the above-named parties do hereby set their hands
and seals on the date and year above written.
Attest: KREISLER INDUSTRIAL CORP.
By:
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Edward Stern, Chairman
Attest: T&T INVESTMENT COMPANY
By:
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Arnold Messer
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EXHIBIT 10.3
<PAGE>
UNION AGREEMENT
AGREEMENT entered into this 5th day of December 1994, as of October 1,
1994, between KREISLER INDUSTRIAL CORPORATION, A Division of KREISLER
MANUFACTURING CORPORATION, for the plant located at 180 Van Riper Avenue,
Elmwood Park, State of New Jersey, hereinafter known as the "Employer" and LOCAL
377, RWDSU, affiliated with AFL-CIO, located 29-27 41st Avenue, Long Island
City, NY, 11101, hereinafter known as the "Union," and on behalf of said Union
and on behalf of the covered employees of the Union now employed and hereafter
to be employed by the Company at its Elmwood Park, New Jersey plant.
PREAMBLE
PART I: WHEREAS, the parties hereto have mutually agreed on the terms
and conditions governing employment of employees in the bargaining unit, the
parties agree to perform in good faith all the provisions of this Agreement and
avoid work interruptions during the term thereof.
NOW THEREFORE, it is agreed:
PART II: Except as delegated, modified or abridged by this Agreement,
all rights, powers and authorities management had prior to this execution of
this Agreement remain and reside in management. The listing of specific rights,
hereafter in this agreement is not intended to be, nor shall be considered,
restrictive of, or a waiver of any rights of management not listed and not
specifically surrendered herein, whether or not such rights have been exercised
by the Company in the past. Included in the rights of management, but not
limited thereto, is the right of the Company to manage the plant; to direct the
working force; to determine the working force; to plan, direct or control
operations; to determine the work to be done in the plant; to determine the
products to be manufactured in the plant; to transfer or discharge employees; to
maintain efficiency of production and/or operations; to introduce new or
improved methods, to introduce new equipment; to decide the nature of equipment
or machinery to be used in the plant and the manning of the same; to automate;
to determine the methods and processes of manufacturing or operations; to
sub-contract for such work or service as the Company deems necessary; to
schedule production, to determine the methods of training employees; to
determine all matters concerned with the designing and engineering of products;
to determine the control of raw materials; to determine the methods of material
handling and shipping; to move or transfer any equipment, operation, processes,
methods or products that the Company determines is required.
ARTICLE I
Section 1. The Employer recognizes LOCAL 377, RWDSU, affiliated with
AFL-CIO, as the sole collective bargaining agent for all of its leadmen,
production, inspection, shipping, maintenance and machine shop employees.
Excluding all non-production employees, e.g. engineering, professional,
administrative, designing, sample-making, clerical (a term including clerks,
material control clerks, and any other factory office clerical positions),
foremen, assistant foremen, and all supervisory employees who have the authority
to hire, promote, discharge,
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discipline or otherwise affect changes in the status of employees or who may
effectively recommend such action.
Section 2. Part-time employees may perform bargaining unit work, All
part-time employees who normally work twenty-five (25) hours or more in their
normal work week must make application to join the Union and must pay Union dues
as provided in Article II. A part-time employee working less than twenty-five
(25) hours a week shall not be covered by this Agreement and shall not be
entitled to the benefits hereunder, with the exception of the wage rate provided
in Schedule I, annexed hereto.
ARTICLE II
UNION MEMBERSHIP AND DUES DEDUCTION
Section 1. All employees covered by this agreement shall be or become
members of the Union on or after the thirtieth calendar day following the date
of this Agreement or the date of their employment, whichever is later, in
accordance with Article VII, "Seniority," Section "1" and all such employees
shall thereafter maintain their union membership in good standing with respect
to union membership dues and initiation fees for the duration of this agreement
as a condition of their continued employment.
Section 2. (a) The Employer agrees to deduct from the wages earned
during the 2nd or 3rd week of each month or from the last wages of an employee
leaving the employ of the company, monthly union dues for each employee who has
given the company proper written authorization to make a deduction.
(b) The Employer agrees to deduct the union initiation fee
from the wages of any employee who becomes a member of the Union provided
written authorization to do so is given by the employee to the company.
Section 3. All monies deducted by the Employer shall be paid to the
Union on or before the 15th day of the month following that for which deductions
are made.
Section 4. In the event there is a dispute between the Company and the
Union or any member thereof with respect to dues deduction, such dispute shall
be resolved in accordance with the "Grievance Procedure" herein set forth.
ARTICLE III
HOURS OF WORK
Section 1. Eight (8) hours per day, five (5) days per week, and forty
(40) hours per week shall normally constitute the work week. However, this may
be increased or decreased by the Company, as herein set forth after discussion
with the Union representatives, when in the Company's opinion, it is necessary
to do so in order to maintain an efficient operation.
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Section 2. (a) The number of shifts and the starting time and the hours
of work per day or per week in each shift shall be fixed from time to time
solely by the Employer after discussion with the Union with respect thereto, and
hours per day or per week so fixed shall be considered as the normal hours of
work per day or per week. However, no reduction of the work week by more than
one (1) hour per day or, in the alternative, to less than four (4) days per
week, shall be made without the mutual consent of the Company and the Union.
Furthermore, there shall be no reduction of the work week until all part time
employees have been laid off and while there are employees with less than
eighteen (18) months seniority working in the plant, unless agreed to by the
Company and the Union.
(b) However, not withstanding, the above provisions of Section
2(a), a temporary reduction of the work week may be made by the Company when, in
its opinion, it is necessary to do so because of special or unusual
circumstances, such as inventory periods or lay-offs, of less than one week.
Section 3. The Employer shall have the right to employ part-time
employees and the hours per day or per week at which the part-time employee is
employed shall be considered as the normal hours of work per day or per week of
the said employee.
Section 4. For the purpose of computing the pay of employees, the work
week shall begin at the starting time of the shift which starts immediately
prior to or following midnight Sunday, and shall end at the same time before or
after midnight of the following Sunday.
Section 5. Employees shall receive three (3) minutes wash-up time
before lunch and three (3) minutes wash-up time before quitting time. Those jobs
where actual wash-up exceeds said amount, such employees shall receive
additional wash-up time as agreed upon between the Employer and the Union.
Section 6. The Employer agrees that overtime work will be distributed
fairly and as equally as possible among the permanent employees within the
respective classifications and departments provided the individual employee has
the necessary qualifications and the ability to perform the required overtime
work, irrespective of the shift in which such individual employees work. With
respect to "grievances" under this paragraph, in the event of proven unfair
assignment, the redress shall be limited to the granting of opportunity for the
next available overtime assignment for which the employee is qualified.
Section 7. (a) In the event that an employee reports for work on their
regular shift without having been previously notified not to report to work,
they shall be given a minimum of four (4) hours work; or, if no work is
available, they shall be given four (4) hours pay, except where such
notification is not given by reason of circumstances wholly beyond the control
of the Employer.
(b) In the event that the plant will be closed because of
reasons beyond the control of the Company, the Employer agrees, whenever
possible, to notify the employees of such closing approximately two (2) hours
before the beginning of the shift or shifts affected through the use of local
telephone answering service which the employee must call. Such notification
shall be
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deemed compliance with the requirement of notification set forth in Section 7
(a) above and the Company shall have no liability to provide any hours of work
or pay as heretofore provided in this section.
(c) The Company shall have no liability to provide any
guaranteed work or pay as heretofore required in Section 7 (a) in the event the
lack of work is caused by f ire, flood, power or boiler failure, labor dispute,
acts of God, or circumstances beyond the control of the Employer.
ARTICLE IV
RATE OF PAY
Section 1. The Employer agrees to grant an increase of $0.25 per hour
effective 5 December 1994, to all regular employees, members of the bargaining
unit in its employ and on the payroll as of 5 December 1994; and an additional
increase of $0.25 per hour effective 1 October 1995, to all Union employees in
its employ and on the payroll on 1 October 1995; and an additional increase of
$0.25 per hour effective on 1 October 1996, to all Union employees in its employ
and on the payroll on 1 October 1996.
Section 2. (a) All occupations are classified into seven (7) labor
grades, the rates of these classifications will remain in effect as listed on
Schedule I, annexed hereto.
(b) New employees shall be hired at not less than the minimum
rates specified in Schedule I for their respective labor grade and will receive
an automatic increase every four (4) months until they reach the maximum of the
labor grade as shown in Schedule I.
(c) An employee to be eligible for an increase must have
worked at least 75% of the schedule working days for the six month period
immediately preceding the date of the automatic increase. In the event the
employee does not meet this requirement due to a leave of absence or lay-off,
the due date of the automatic increase will be advanced by the total number of
scheduled work days absent.
(d) For the purpose of arriving at the date on which the first
automatic increase is due, an employee hired during the first three days of the
work week shall be considered to have been hired on the first day of the work
week; and an employee hired during the last two days of the work week shall be
considered to have been hired on the first day of the following week. For the
purpose of arriving at the date of subsequent automatic increases, the last
automatic or merit increase granted will be used to determine the date of
eligibility and according to the day of the week on which this falls, the guide
outlined in the previous sentence will be used.
(e) The Union will be furnished with the job title and labor
grade of all Union employees. Any question regarding an individuals job title
will be resolved between the individual and the foreman. If it is not resolved
on this level, it will then follow the Grievance Procedure.
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(f) An employee assigned to perform more than one job will be
in the higher classification provided they are required to spend at least 40% of
their time in such classification.
(g) An employee who is given a new job shall be given
instruction and training on any higher classification, and while receiving such
training in the higher classification shall be given the going rate for that
classification. Senior person to be given first choice in any promotion provided
they are qualified to do the job.
(h) When a new job is created, the Union will be immediately
informed regarding the job title and the starting rate.
(i) In the event the content of the job changes over a period
of time and the hiring rate is changed, the change shall become effective on the
date the Company and the Union agree the job content has been changed
sufficiently to warrant a change in rate.
(j) No changes shall be made in the minimum or maximum hiring
rate of the labor grades during the term of this agreement. This does not limit
nor prohibit the Company form hiring individual employees at a higher rate than
the minimum, if, in the Company's opinion, it feels it is necessary in order to
secure qualified personnel.
(k) The Union agrees not to interfere with the work assignment
of any employees but will seek redress through proper channels.
Section 3. (a) An employee who works on the second shift shall receive
a 10% night shift premium on the base rate for working this shift.
(b) An employee who works on the third shift shall receive a
15% night shift premium on the base rate for working this shift.
Section 4. Any work performed in excess of eight (8) hours per day
shall constitute overtime and shall be paid for at time and one half the regular
straight time rate. Work performed by the second shift shall be construed as
being worked in the day in which the immediately preceding first shift worked
even though the hours of the later shift run into the calendar Saturdays,
Sundays, or Holidays. Work performed on Saturday shall be paid for at time and
one half the regular straight time rate. work performed on Sunday and/or Legal
Holidays enumerated herein shall be paid for at double the regular straight time
rates.
Section 5. Should the Employer move the factory outside the Elmwood
Park area, where transportation creates a hardship upon the employees, any
employee deciding to terminate his employment after the Employer had given
formal notice of its intention to move, would receive as severance whatever
vacation pay he had accumulated on a pro-rated basis.
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ARTICLE V
HOLIDAY PAY
Section 1. The following shall be deemed legal Holidays:
New ' Year's Eve Labor Day
New Year's Day Election Day
Washington's Birthday Thanksgiving Day
Friday Before Easter Friday After Thanksgiving
Memorial Day Christmas Eve
Fourth of July Christmas Day
Section 2. (a) Union members shall be paid for the above holidays on
which no work shall have been performed at their regular straight time hourly
rates, for their normal work day or fraction thereof, where indicated, provided,
however, that the employee is on the payroll and actually worked the full
working day preceding and the first full working day following such holiday.
Employees who are absent may qualify for such pay upon presentation of valid
reason for absence from work, such as a doctor's note for illness. Determination
of qualification shall be at the Employer's discretion.
(b) Union members to be notified in advance of a close down by
the Company two (2) days before a said holiday.
Section 3. Union members who are on leave of absence or on lay-off on
any of the aforementioned holidays are not entitled to receive pay for said
holiday, except that an employee who is laid off due to lack of work or is
recalled from lay-off shall be entitled to receive pay for any of the
aforementioned holidays which fall within)the week during which the employee is
laid off or recalled.
ARTICLE VI
VACATION PAY
Section 1. (a) Vacation pay shall be computed at 2% of the employee's
earnings for the fiscal year ending at July 1st, provided however, that he shall
have worked for at least three (3) months during the aforesaid year. In the
event that an employee shall have worked at least forty-three (43) weeks in the
year, the minimum vacation pay shall be forty (40) hours at his base rate.
(b) In addition, an employee who was hired three (3) years
prior to June 30th, of the vacation year, will receive an additional amount
equal to the amount computed in paragraph (a) above, but not less than forty
(40) hours pay at his base rate in effect at July lst.
(c) An employee hired five (5) years or more prior to June
30th of the vacation year will receive a third week's vacation pay computed as
in paragraph (a) above.
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(d) An employee hired fifteen (15) years or more prior to June
30th of the vacation year will receive a fourth weeks's vacation pay computed as
in paragraph (a) above.
(e) An employee terminated for just cause within six (6)
months of a vacation year will not be paid any vacation (See Article XI,
Section 4).
Section 2. Employees who have been continuously employed by the Company
for three (3) months or more and who are on layoff as of July 1st of any
calendar year, shall receive a prorata vacation pay based upon the time actually
worked in the fiscal year ending July 1st, which payment shall. be made to the
employees at the normal vacation time.
Section 3. Vacation shall be scheduled at the convenience of the
Employer sometime during June, July or August. Vacation pay shall be distributed
in advance. Employees entitled to three or four weeks vacation pay may take
their 3rd and/or 4th week of vacation at any time during the calendar year
provided, however, such scheduling shall be done at the discretion of management
in order not to interfere with the efficient operation of the plant. If two
employees select the same vacation time and if management is willing to permit
only one employee to take vacation at that time seniority shall prevail.
Vacation shut-down dates will be posted on the bulletin board by June 15th of
each year.
ARTICLE VII
SENIORITY
Section 1. (a) An employee hired on or after the date of this agreement
shall be a probationary employee until they have been employed for thirty (30)
calendar days. During their probationary period, they shall be entitled to no
seniority and the discharge of a probationary employee during such period shall
not constitute a cause for grievance. Not more than five (5) working days
absence for any reason shall be credited for the purpose of computing the
probationary period while absent. At the end of their probationary period, or on
any rehiring, the date of their most recent hiring shall become their seniority
date. For purposes of seniority, this paragraph shall apply to an employee who
quits or is discharged or otherwise loses their seniority and is subsequently
rehired.
(b) The Employer shall have the right to extend the
probationary period of any employee for thirty (30) calendar days with the
agreement of the Union Chairperson.
Section 2. (a) Employees working less than eight (8) hours per day,
forty (40) hours per week regardless of their seniority, will be the first to be
laid off when reduction of force occurs.
(b) In case of lay-off, seniority shall be on a plantwide
basis, irrespective of shift, with the exception of part-time workers, provided
only that the employees retained shall have the skill and ability to do work to
the satisfaction of the Company.
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(c) No new employees shall be hired for any job until a
laid-off person having the ability to perform the work has been offered the
opportunity.
(d) No new employees shall be hired in any department unless
all employees entitled to seniority hereunder are working a full forty (40) hour
week.
Section 3. Seniority rights shall be broken when an employee.
(a) Quits voluntarily,
(b) is discharged,
(c) after a lay-off, fails to report to work within three (3)
days after the mailing of the notice to return to work to last address furnished
by the employee,
(d) fails to return to work after a leave of absence is up,
(e) is laid off for a period of nine (9) months or more.
Section 4. (a) The number of Union representatives, in addition to the
Union Chairperson, shall not exceed 3% of the Union employees on the payroll.
(b) The Shop Chairperson shall have top seniority in the
plant.
(c) The Union Steward shall have top seniority in the section
in which the steward is employed.
(d) There shall be at least one Union Steward in the plant at
all times when eight (8) or more Union workers are working excluding the
Maintenance Department.
ARTICLE VIII
LAY-OFFS
Section 1. The Employer agrees to notify the Shop Chairperson
twenty-four (24) hours in advance when a lay-off for a period of more than one
(1) week is contemplated by the Employer; failing which the employee concerned
shall be given one (1) day's pay at his straight time hourly rate.
Section 2. It is expressly understood and agreed that the Employer has
the right in its discretion to lay off any employee or number of employees when
business conditions make such layoff necessary, subject to provisions in this
agreement. In the operation of seniority, it is agreed that the Employer will
apply seniority rights with respect to layoffs, and rehiring within the plant,
as provided in the immediately preceding article. The Employer shall have no
obligation to permit
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an employee to bump into a job where the employee does not have the
qualifications to perform said job, subject to an employee' s right to grieve on
the issue of his qualifications.
Section 3. Seniority as to recall will operate in the same manner as
lay-off.
Section 4. The Shop Chairperson shall be notified on all recalls.
Section 5. An employee who is recalled after a lay-off and accepts a
job in a lower classification will automatically be transferred back with the
same rate of pay in his own classification whenever his job becomes available.
ARTICLE IX
TRANSFERS
Section 1. The Employer shall at all times have the right to transfer
any employee from one department to another department and an employee so
transferred shall carry his accumulated seniority with them into the department
to which they have been transferred and no employee's seniority rights shall be
reduced because of any such transfer and no discharge shall result solely
because of such transfer.
Section 2. The moving of employees within a classification in a
department shall not be considered a transfer and will be made whenever
necessary for the efficient operation of the department. Any employee who
refuses to accept an assignment to another job in the same classification in a
department offered to them shall be deemed to have quit.
Section 3. It is agreed that due to special conditions prevailing in
the shop in the closing down of/or disbanding of any department, the Employer
may transfer an employee from a higher skilled department to a lower skilled one
at the rate prevailing in the department to which they are transferred. Such
transfer, however, shall take place by agreement with the Union Representative,
and also by agreement with the employee or employees in question.
Section 4. It is agreed that such employee whose wages have been
reduced because of a transfer shall have first preference to return to his
original department from which they were transferred when there is sufficient
work in such department.
Section 5. Union job openings will be posted on the bulletin board.
Union employees who have the necessary qualifications will be interviewed and if
found acceptable, will be given the job on a 30 day trial basis.
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ARTICLE X
LEAVE OF ABSENCE
Section 1. There shall be no loss of seniority as a result of an
approved leave of absence. The following will govern the granting of leaves of
absence.
(a) Leave of absence will be granted without pay.
(b) Maximum leave of absence will be six weeks.
(c) In order to qualify for a leave of absence, an employee
must have had one year of service with the company.
(d) At least one year must elapse between successive leaves of
absence, except if the leave is due to medical reasons.
(e) An employee who fails to return to work after the
stipulated time of his leave of absence shall be subject to discharge.
(f) An employee who is ill or injured and presents
satisfactory proof of such illness or injury to the Employer will be granted a
leave of absence as provided in the terms set forth in the preceding paragraphs
for a period not to exceed sixty (60) days. Such leave of absence may be
extended by the Employer for additional periods of time not to exceed sixty (60)
days in any instance, if at the expiration of such leave or extension thereof,
the employee continues to be unable to return to work but under normal
circumstances should be able to do so within a reasonable period, and provided
further that he notifies the Employer in writing by registered mail to that
effect at least five (5) calendar days prior to expiration of such leave of
absence.
(g) An employee who sustains a compensable injury or who
acquired an occupational disease which originates in the Employer's plant will
be granted a leave of absence automatically for the full period of legal
temporary disability.
(h) An employee who engages in gainful employment during a
leave of absence, except when such leave is expressly granted for such purpose,
shall be deemed to have quit.
(i) An employee shall be subject to immediate dismissal for
falsifying any reason given to the Company for leave of absence.
(j) Anything herein to the contrary notwithstanding, employees
will be entitled to the Benefits of the State of New Jersey Family Leave Act or
the Federal Family and Medical Leave Act, whichever Act provides the greater
Benefit.
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Section 2. The Employer agrees that in the event an employee is elected
to full time office in the Union, such employee shall be granted a leave of
absence for the duration of their term of office and shall be reinstated without
loss of seniority upon the expiration of their term of office.
Section 3. In the event that any regular employee shall enter into or
be drafted into the armed forces of the United States, it is agreed that they
shall be granted a leave of absence for the duration of their service, and it is
further agreed that such employee shall, at the conclusion of the period of
service, provided they are physically equipped to perform their duties, and
provided that they apply within sixty (60) days after their discharge, be
re-employed without loss of seniority or other rights and be reinstated to their
former position or one equivalent to it as a regular employee at the then
prevailing rate of wages for such position. It is further understood and agreed
that any new employee who is engaged to take the place of an employee who
entered the armed forces of the United States may be discharged upon the
rehiring of the former employee.
Section 4. (a) In the event of the death of an employee's husband,
wife, parent, brother, sister, or child, they will be granted a maximum of a
three (3) day leave of a absence starting from time of death, with pay at their
normal straight time earnings, for any regularly scheduled work days lost, to
take care of the funeral arrangements and attend the funeral of the deceased,
upon delivery of proof satisfactory to the Company of such death, provided they
shall have had at least one (1) year's service with t he Company.
(b) In the event of the death of an employee's grandparent,
mother-in-law, father-in-law, brother-in-law, sister-in-law, step-mother,
step-father, step-child, step-brother, step-sister, they will be granted a one
(1) day leave of absence with pay at their normal straight time earnings for
actual time lost for a scheduled work day, to attend the funeral upon delivery
of proof satisfactory to the Company of such death, provided they shall have had
at least one (1) year's service with the Company.
(c) Employees on vacation, leave of absence, or on lay-off,
will not be paid for the above sections 4(a) or 4(b).
Section 5. (a) In the event an employee is summoned for jury duty, they
will be granted a two (2) week leave of absence and will be paid, up to a
maximum of two (2) weeks, the difference between jury pay and their regular
straight time pay for their normal work week, provided they have had at least
one (1) year's service with the Company.
(b) Employees on vacation, leave of absence, or on lay-off ,
will not be paid or the above section 5 (a).
ARTICLE XI
DISCHARGE
Section 1. Any employee absent from work for five (5) consecutive
working days without notification of such absence to the Personnel Department
will automatically be removed from the
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payroll of the Employer and lose all seniority rights. An employee must have a
satisfactory reason for any day of absence.
Section 2. Any employee requesting relief from a work assignment, due
to physical conditions, must upon the Employer's request, submit to a physical
examination by a physician. If, on the basis of the doctor's report, the Company
determines that the employee is physically able to perform the work assignment,
the employee will be so informed. Refusal to perform the work assigned will
result in the automatic termination of the employee.
Section 3. Excessive absenteeism or lateness will result in dismissal,
after at least one warning slip has been issued to the employee, and notice been
given to the Union Chairperson.
Section 4. The Employer reserves the right to discharge an employee for
any just cause or reason. Included in the right to discharge, but not limited to
the foregoing authority, the parties agree that inefficiency, loitering after
warning, drinking, gambling or bookmaking on the company premises, or crimes
committed off the company premises shall be cause for discharge under this
provision. It is understood that in the event a person is accused of a crime
committed off company premises, the party will be suspended without pay or
benefits until the disposition of the criminal proceedings when the final
disciplinary action will be determined, provided, however, that if the Union
claims that the discharge was unjust or not for reasonable cause, the matter
shall be submitted for arbitration in the manner provided for in this agreement.
ARTICLE XII
DEPARTMENTAL SUPERVISORS
Section 1. The Employer reserves the right to have assistant foreman
perform whatever type work it deems necessary for the efficient operation of the
department.
Section 2. An employee upgraded to a position, Assistant Foreman or
Foreman, outside the bargaining unit, and for any reason returned to a position
within the bargaining unit within a period of one (1) year from the date they
were upgraded, shall be reinstated in the union with full seniority rights from
their original date of hire.
ARTICLE XIII
HOSPITALIZATION AND INSURANCE
Section 1. (a) The Employer agrees to provide, at its expense, (as
specified in Section 1(b)), a benefit plan (Local 377 Group Health Plan) for
each employee, provided said employee meets the eligibility requirements as
specified in the subject plan.
(b) The Employer agrees to pay $250.00 per month beginning 1
November 1994, $260.00 per month beginning 1 October 1995 and $270.00 per month
beginning 1 October
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1996 for each employee. In addition, any increased employer contribution
negotiated in the successor agreement to this Agreement will also be paid for
the months of October 1997 and November 1997.
Section 2. The Employer agrees to provide, at its expense, a group life
insurance plan providing a $3,000 (Three Thousand Dollars) coverage for each
employee, provided said employee shall have six (6) months service with the
Company.
ARTICLE XIV
GRIEVANCE PROCEDURE
Any dispute, difference, or grievance which may arise concerning any of
the provisions, terms, interpretations of this agreement shall be submitted
within two (2) working days of its occurrence by the Union or employee affected
to the Company for settlement between the Union Steward and the Foreman, or be
forever barred. If no agreement is reached within two (2) additional working
days, it shall be referred to the Shop Chairperson and the Supervisor. If no
agreement is reached within two (2) additional working days, it shall be
referred to the Union Representatives and the representative of Management. If
the Union is not satisfied with the answer given by the Company, it must serve
written notice to appeal within ten (10) working days. If timely notice of
appeal to arbitration is not given, the matter is closed and the company's
answer is final. If timely notice of appeal to arbitration is served, the
parties shall endeavor to select an arbitrator mutually satisfactory to them. In
the event the parties cannot agree on a mutually satisfactory arbitrator within
five (5) working days, either party may request the New Jersey State Board of
Mediation to submit a panel of arbitrators in accordance with its rules and
practices. The arbitrator shall then be selected in accordance with the rules
and regulations of the New Jersey State Mediation Board and the issue in dispute
shall be submitted to him for final determination.
The arbitrator may provide for reinstatement of any discharged
employee, either with or without pay as the arbitrator may determine, or may
sustain a discharge, or may otherwise determine any other question referred to
him. In the event of any back pay award, there shall be deducted from the same,
any employee earnings elsewhere, as determined in accordance with National Labor
Relations Board standards.
The arbitrator shall not have the authority to alter, modify, add to or
subtract from any of the terms or provisions of the Agreement.
The fee of the arbitrator shall be shared equally by the Company and
the Union. All other expenses of the arbitration shall be paid by the party
incurring the same.
No individual employee or employees shall have the right to request
arbitration under this agreement.
-13-
<PAGE>
ARTICLE XV
INTERFERENCE, DISCRIMINATION, COERCION
This contract is the full agreement and the Employer shall not enter
into any private agreement with any of its employees, whereby any of the
provisions of this agreement may or shall be violated, waived or modified.
Any and all such agreements shall be null and void and of no effect.
ARTICLE XVI
NO STRIKES, LOCKOUTS
During the term of this agreement, the Employer shall not lockout and
the Union agrees that neither it nor any of its representatives, stewards,
covered employees or members will sanction, authorize or engage in any strike,
slowdown, stoppage or interference with work; but should such unauthorized
suspension or stoppage or interference with work take place, the Union and its
agents shall make every effort to restore and resume normal operations
forthwith. The Employer agrees that it will not sue or claim money damages from
the Union by reason of any unsanctioned or unauthorized strike or suspension of
work, provided the Union has reasonably endeavored to have work resumed.
ARTICLE XVII
MISCELLANEOUS
Section 1. Any provisions of this agreement which are in conflict with
any law, executive or governmental, city or state regulations, order or
directive, now or hereafter in existence, shall be suspended as long as such
conflict exists.
Section 2. No payroll deduction shall be made for any purpose
whatsoever except as specifically required by Federal, State and/or Municipal
Law, or as herein above specified, or unless authorized in writing by the
employee in question and agreed to by the Employer. Nothing herein contained,
however, shall be construed to prevent reasonable regulations for deductions in
case an employee is late in reporting for work.
Section 3. Unless an employee is hospitalized, employees absent from
work must call in by 8:30 AM on a daily basis or they will be subject to the
progressive discipline set forth in Article XI, Section 3.
-14-
<PAGE>
ARTICLE XVIII
SECURITY
Section 1. In the event that a Government agency, concerned with
security regulations applicable to the Employer, advises the Employer to
restrict any member of the Union from work on or access to classified
information or material, the Union will not hold the Employer responsible for
such action as the Employer may reasonably take to comply with its contractual
obligations to the customer working on contracts for the government.
Section 2. The Union recognizes that the Employer has certain
obligations under the law pertaining to security and in its contracts with
vendors doing government work as required by the security regulations of the
armed forces and agree that nothing contained in this agreement is intended to
place the Employer in violation of such law pertaining to security or its
security agreements with the government.
ARTICLE XIX
TERM OF AGREEMENT
This agreement shall remain in full force and effect and shall be
binding upon the parties and successors until midnight, 4 December 1997, and
shall be considered automatically renewed from year to year thereafter unless at
least sixty (60) days prior to the end of any effective period either
-15-
<PAGE>
party shall serve written notice upon the other by registered mail that it
desires to modify or terminate this agreement.
IN WITNESS WHEREOF, the parties hereto set,,their hands and seals the
day and year first above written.
KREISLER INDUSTRIAL CORPORATION LOCAL 377, RWDSU AFL-CIO
- ------------------------------------ ------------------------------------
President
------------------------------------
Recording Secretary
COMMITTEE
------------------------------------
------------------------------------
------------------------------------
------------------------------------
------------------------------------
-16-
<PAGE>
EFFECTIVE 5 DECEMBER 1994
SCHEDULE I
LABOR GRADE "B"
Minimum $5.10 per hour with an increase of $.05 per hour after thirty
days and automatic increases of $.10 per hour every four months until reaching
maximum rate of $10.95 per hour.
The following jobs are in "B" Classification:
General Machine Operator - (including chamfering, swedging, drill
press, tube cutter).
Solder Remover
Pressure & Flow Tester
Induction Brazer
Identification Moveman
Shipping/Receiving Clerk
Porter
Furnace Assembler
Cap and Wrap
LABOR GRADE "C"
Minimum $5.20 per hour with an increase of $.05 per hour after thirty
days and automatic increases of $.l0 per hour every four months until reaching
maximum rate $11.05 per hour.
The following jobs are in "C" Classification:
Chemical Cleaner
DeBurrer
Tube Bender
Final Assembly Inspector
LABOR GRADE "D"
Minimum $5.35 per hour with an increase of $.05 per hour after thirty
days and automatic increases of $.10 per hour every four months until reaching
maximum rate of $11.20 per hour.
The following jobs are in "D" Classification:
Adjustor
Torch Brazer
Fluorescent Penetrant Operate & Set-Up.
Plater
-17-
<PAGE>
LABOR GRADE "E"
Minimum $5.60 per hour with an increase of $.05 per hour after thirty
days and automatic increases of $.10 per hour every four months until reaching
maximum rate of $11.45 per hour.
The following jobs are in "E" Classification:
Machinist - 2nd Class
Vendor's Inspector
Leadman
Truck Driver
X-Ray Technician
Process Inspector
Ultra-Sonic Technician
LABOR GRADE "F"
Minimum $5.85 per hour with an increase of $.05 per hour after thirty
days and automatic increases of $.10 per hour every four months until reaching
maximum rate of $11.95 per hour.
The following jobs are in "F" Classification:
Furnace Operator
General Maintenance Man
X-Ray Reader
Set-Up Man
LABOR GRADE "G"
Minimum $6.10 per hour with an increase of $.05 per hour after thirty
days and automatic increases of $.10 per hour every four months until reaching
maximum rate of $12.20 per hour.
The following jobs are in "G" Classification:
CNC Machine Set-Up
Machinist lst Class
Experimental Machinist
Turret Lathe Set-Up and Operator
LABOR GRADE "H"
Minimum $6.35 per hour with an increase of $.05 per hour after thirty
days and automatic increases of $.l0 per hour every four months until reaching
maximum rate of $12.70 per hour.
The following jobs are in "H" Classification:
-18-
<PAGE>
Tool and Die Maker
Toolmaker
Layout Inspector
Welder
LEADMAN: In the event the Company establishes a leadman in any
classification in any labor grade, it is agreed the rate of the leadman should
be 10% above their then current hourly rate, said payment to commence upon the
completion of a 30-day trial period in the leadman classification.
-19-
<PAGE>
EFFECTIVE 5 DECEMBER 1995
SCHEDULE I
LABOR GRADE "B"
Minimum $5.10 per hour with an increase of $.05 per hour after thirty
days and automatic increases of $.10 per hour every four months until reaching
maximum rate of $11.20 per hour.
The following jobs are in "B" Classification:
General Machine Operator - (including chamfering, swedging, drill
press, tube cutter).
Solder Remover
Pressure & Flow Tester
Induction Brazer
Identification Moveman
Shipping/Receiving Clerk
Porter
Furnace Assembler
Cap and Wrap
LABOR GRADE "C"
Minimum $5.20 per hour with an increase of $.05 per hour after thirty
days and automatic increases of $.10 per hour every four months until reaching
maximum rate $11.30 per hour.
The following jobs are in "C" Classification:
Chemical Cleaner
DeBurrer
Tube Bender
Final Assembly Inspector
LABOR GRADE "D"
Minimum $5.35 per hour with an increase of $.05 per hour after thirty
days and automatic increases of $.10 per hour every four months until reaching
maximum rate of $11.45 per hour.
The following jobs are in "D" Classification:
Adjustor
Torch Brazer
Fluorescent Penetrant Operate & Set-Up.
Plater
-20-
<PAGE>
LABOR GRADE "E"
Minimum $5.60 per hour with an increase of $.05 per hour after thirty
days and automatic increases of $.10 per hour every four months until reaching
maximum rate of $11.70 per hour.
The following jobs are in "E" Classification:
Machinist - 2nd Class
Vendor's Inspector
Leadman
Truck Driver
X-Ray Technician
Process Inspector
Ultra-Sonic Technician
LABOR GRADE "F"
Minimum $5.85 per hour with an increase of $.05 per hour after thirty
days and automatic increases of $.10 per hour every four months until reaching
maximum rate of $12.20 per hour.
The following jobs are in "F" Classification:
Furnace Operator
General Maintenance Man
X-Ray Reader
Set-Up Man
LABOR GRADE "G"
Minimum $6.10 per hour with an increase of $.05 per hour after thirty
days and automatic increases of $.10 per hour every four months until reaching
maximum rate of $12.45 per hour.
The following jobs are in "G" Classification:
CNC Machine Set-Up
Machinist lst Class
Experimental Machinist
Turret Lathe Set-Up and Operator
LABOR GRADE "H"
Minimum $6.35 per hour with an increase of $.05 per hour after thirty
days and automatic increases of $.10 per hour every four months until reaching
maximum rate of $12.95 per hour.
The following jobs are in "H" Classification:
-21-
<PAGE>
Tool and Die Maker
Toolmaker
Layout Inspector
Welder
LEADMAN: In the event the Company establishes a leadman in any
classification in any labor grade, it is agreed the rate of the leadman should
be 10% above their then current hourly rate, said payment to commence upon the
completion of a 30-day trial period in the leadman classification.
22
<PAGE>
EFFECTIVE 5 DECEMBER 1996
SCHEDULE I
LABOR GRADE "B"
Minimum $5.10 per hour with an increase of $.05 per hour after thirty
days and automatic increases of $.10 per hour every four months until reaching
maximum rate of $11.45 per hour.
The following jobs are in "B" Classification:
General Machine Operator - (including chamfering, swedging, drill
press, tube cutter).
Solder Remover
Pressure & Flow Tester
Induction Brazer
Identification Moveman
Shipping/Receiving Clerk
Porter
Furnace Assembler
Cap and Wrap
LABOR GRADE "C"
Minimum $5.20 per hour with an increase of $.05 per hour after thirty
days and automatic increases of $.10 per hour every four months until reaching
maximum rate $11.95 per hour.
The following jobs are in "C" Classification:
Chemical Cleaner
DeBurrer
Tube Bender
Final Assembly Inspector
LABOR GRADE "D"
Minimum $5.35 per hour with an increase of $.05 per hour after thirty
days and automatic increases of $.10 per hour every four months until reaching
maximum rate of $11.70 per hour.
The following jobs are in "D" Classification:
Adjustor
Torch Brazer
Fluorescent Penetrant Operate & Set-Up.
Plater
-23-
<PAGE>
LABOR GRADE "E"
Minimum $5.60 per hour with an increase of $.05 per hour after thirty
days and automatic increases of $.10 per hour every four months until reaching
maximum rate of $11.95 per hour.
The following jobs are in "E" Classification:
Machinist - 2nd Class
Vendor's Inspector
Leadman
Truck Driver
X-Ray Technician
Process Inspector
Ultra-Sonic Technician
LABOR GRADE "F"
Minimum $5.85 per hour with an increase of $.05 per hour after thirty
days and automatic increases of $.10 per hour every four months until reaching
maximum rate of $12.45 per hour.
The following jobs are in "F" Classification:
Furnace Operator
General Maintenance Man
X-Ray Reader
Set-Up Man
LABOR GRADE "G"
Minimum $6.10 per hour with an increase of $.05 per hour after thirty
days and automatic increases of $.10 per hour every four months until reaching
maximum rate of $12.70 per hour.
The following jobs are in "G" Classification:
CNC Machine Set-Up
Machinist lst Class
Experimental Machinist
Turret Lathe Set-Up and Operator
LABOR GRADE "H"
Minimum $6.35 per hour with an increase of $.05 per hour after thirty
days and automatic increases of $.10 per hour every four months until reaching
maximum rate of $13.20 per hour.
The following jobs are in "H" Classification:
-24-
<PAGE>
Tool and Die Maker
Toolmaker
Layout Inspector
Welder
LEADMAN: In the event the Company establishes a leadman in any
classification in any labor grade, it is agreed the rate of the leadman should
be 10% above their then current hourly rate, said payment to commence upon the
completion of a 30-day trial period in the leadman classification.
-25-
<PAGE>
EXHIBIT 11.
Statement re computation of per share earnings
SHARES
Shares outstanding at June 30, 1997 485,512
-------
Net profit after tax $ 970,910 = $2.00 per share
-------------------- -------
Shares outstanding 485,512
<PAGE>
1997 ANNUAL REPORT
KREISLER MANUFACTURING CORPORATION
<PAGE>
TO OUR STOCKHOLDERS
It was a very good year for Kreisler. Net profit for fiscal year
1996-1997 was $971,000 or 10.3% compared to a loss of $923,000 or 16.2% in the
comparable period in the prior year. Earnings (loss) per share in 1997 and 1996
was $2.00 compared to $(1.90) respectively. Profit for fiscal year 1997 was
favorably impacted by a $295,000 or $0.61 per share deferred tax benefit.
Fiscal year 1996-1997 sales were $9,402,000 compared to $5,704,000 in
the prior year--an increase of $3,698,000 or 65%. As the airline industry
continues its strong forward momentum, our backlog has approximately doubled
again as it did in the prior year. The aerospace industry forecasts a continued
steady growth over the next five years at four to five percent per year.
Three important events occurred over the past year. First a return to
profitability. The second was being able to demonstrate our ability to
significantly increase our capacity, and the third to show tremendous
improvement in our on time delivery. From one of our major customers we received
a best supplier of the year award for engineering support and on time delivery.
All our employees should be justly complimented and proud of the above
accomplishments. Our goal for the coming year is to increase our sales, improve
profitability and continued improvement in on time deliveries.
Kreisler has turned the corner for its stockholders, employees and
customers. It has been a difficult five years, but we now look forward to more
prosperous years ahead. For those shareholders who have stayed with us through
the lean years we thank you and we hope for you and all our shareholders
generous rewards. Thank you for your continued support.
Sincerely,
/s/ Edward L. Stern
Edward L. Stern
President and Chairman of the Board
September 17, 1997
<PAGE>
Kreisler Manufacturing Corporation and Subsidiaries
Consolidated Balance Sheets
June 30, 1997 and 1996
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------- --------------------- -------- -------------------
1997 1996
- ----------------------------------------------------------------------- --------------------- -------- -------------------
<S> <C> <C>
Assets
Cash and cash equivalents $691,916 $587,063
Certificates of deposit - current - 300,000
Accounts receivable - trade 1,609,913 891,360
Inventories 1,822,570 1,573,614
Deferred tax asset 300,000 -
Other current assets 22,987 21,833
- ----------------------------------------------------------------------- --------------------- -------- -------------------
Total Current Assets 4,447,386 3,373,870
- ----------------------------------------------------------------------- --------------------- -------- -------------------
Certificates of deposit 554,934 525,344
Property, plant and equipment, at cost less accumulated
depreciation of $2,724,581 for 1997 and $2,677,734 for 1996 197,246 204,093
- ----------------------------------------------------------------------- --------------------- -------- -------------------
5,199,566 $4,103,307
- ----------------------------------------------------------------------- --------------------- -------- -------------------
Liabilities and Stockholders' Equity
Accounts payable - trade $552,959 $401,896
Accrued expenses 174,216 199,930
- ----------------------------------------------------------------------- --------------------- -------- -------------------
Total Current Liabilities 727,175 601,826
- ----------------------------------------------------------------------- --------------------- -------- -------------------
Stockholders' Equity
Common Stock, $.50 par value - 3,000,000 shares authorized;
485,512 shares issued and outstanding for 1997 and 1996 242,756 242,756
Additional paid - in - capital 1,571,703 1,571,703
Retained earnings 2,657,932 1,687,022
- ----------------------------------------------------------------------- --------------------- -------- -------------------
Total Stockholders' Equity 4,472,391 3,501,481
- ----------------------------------------------------------------------- --------------------- -------- -------------------
$5,199,566 $4,103,307
- ----------------------------------------------------------------------- --------------------- -------- -------------------
</TABLE>
See accompanying notes to Consolidated Financial Statements
1
<PAGE>
Kreisler Manufacturing Corporation and Subsidiaries
Consolidated Statements of Operations
Three years ended June 30, 1997
<TABLE>
<CAPTION>
- ----------------------------------------------------- ------------------------ ------------------------ -------------------------
1997 1996 1995
- ----------------------------------------------------- ------------------------ ------------------------ -------------------------
<S> <C> <C> <C>
Sales $9,402,005 $5,703,865 $5,252,361
- ----------------------------------------------------- ------------------------ ------------------------ -------------------------
Cost of goods sold 8,513,738 6,441,227 6,423,227
Selling, general and administrative expenses 282,221 282,962 305,579
- ----------------------------------------------------- ------------------------ ------------------------ -------------------------
8,795,959 6,724,189 6,728,806
- ----------------------------------------------------- ------------------------ ------------------------ -------------------------
Profit (loss) from operations 606,046 (1,020,324) (1,476,445)
Other income (expense):
Interest and other earnings 69,864 103,837 196,788
(Loss) on investments - (6,432) -
- ----------------------------------------------------- ------------------------ ------------------------ -------------------------
Profit (loss) before income taxes 675,910 (922,919) (1,279,657)
Income tax benefit 295,000 - -
- ----------------------------------------------------- ------------------------ ------------------------ -------------------------
Net Profit (loss) $970,910 $(922,919) $(1,279,657)
- ----------------------------------------------------- ------------------------ ------------------------ -------------------------
Earnings per share:
Net Profit (loss) $2.00 $(1.90) $(2.55)
- ----------------------------------------------------- ------------------------ ------------------------ -------------------------
</TABLE>
Consolidated Statements of Changes in Stockholders' Equity
<TABLE>
<CAPTION>
Unrealized
Additional Holding Gains Total
Common Paid-In Retained Treasury on Available-for Stockholders'
Stock Capital Earnings Stock Sale Securities Equity
- --------------------------------- -------------- ---------------- ---------------- --------------- ----------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Balance June 30, 1994 $411,726 $2,667,377 $6,301,636 $(3,554,422) $ - $5,826,317
Net loss (1,279,657) (1,279,657)
Purchase of treasury stock (122,260) (122,260)
Unrealized gain on available-
for-sale securities 3,088 3,088
- --------------------------------- -------------- ---------------- ---------------- --------------- ----------------- --------------
Balance June 30, 1995 411,726 2,667,377 5,021,979 (3,676,682) 3,088 $4,427,488
Net loss (922,919) (922,919)
Retirement of treasury stock (168,970) (1,095,674) (2,412,038) 3,676,682 -
Recognition of gain upon sale
of available-for-sale (3,088) (3,088)
securities
- --------------------------------- -------------- ---------------- ---------------- --------------- ----------------- --------------
Balance June 30, 1996 242,756 1,571,703 1,687,022 - - $3,501,481
Net profit 970,910 970,910
- --------------------------------- -------------- ---------------- ---------------- --------------- ----------------- --------------
Balance June 30, 1997 $242,756 $1,571,703 $2,657,932 $ - $ - $4,472,391
- --------------------------------- -------------- ---------------- ---------------- --------------- ----------------- --------------
</TABLE>
See accompanying notes to Consolidated Financial Statements
2
<PAGE>
Kreisler Manufacturing Corporation and Subsidiaries
Consolidated Statements of Cash Flows
Three years ended June 30, 1997
<TABLE>
<CAPTION>
- ------------------------------------------------------------- ---------------------- --------------------- ----------------------
1997 1996 1995
- ------------------------------------------------------------- ---------------------- --------------------- ----------------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net profit (loss) $970,910 $(922,919) $(1,279,657)
Adjustments to reconcile net profit (loss) to
cash (used) provided by operating activities:
Depreciation and amortization 59,509 59,576 76,498
Gain on sale of assets (1,000) (8,269) (1,394)
Decrease (increase) in accounts receivable-trade (718,553) 123,002 (134,806)
Decrease (increase) in inventories (248,956) (404,776) (120,979)
Decrease (increase) in other current assets (1,154) 16,201 373,259
Decrease (increase) in deferred tax asset (300,000) - -
Increase (decrease) in accounts payable-trade 151,063 258,078 (1,420)
Increase (decrease) in accrued expenses (25,715) 34,084 41,872
- ------------------------------------------------------------- ---------------------- --------------------- ----------------------
Net adjustments (1,084,806) 77,896 233,030
- ------------------------------------------------------------- ---------------------- --------------------- ----------------------
Net cash (used) by operating activities (113,896) (845,023) (1,046,627)
Cash flows from investing activities:
Purchases of investments and certificates of deposit (29,590) (556,124) (22,543)
Proceeds from sale of investments and redemption of
certificates of deposit 300,000 1,418,532 59,852
Purchase of property, plant and equipment (52,661) (38,276) (37,475)
Proceeds from sale of equipment 1,000 - 4,500
- ------------------------------------------------------------- ---------------------- --------------------- ----------------------
Net cash provided by investing activities 218,749 824,132 4,334
Cash flows from financing activities:
Purchase of treasury stock - - (122,260)
- ------------------------------------------------------------- ---------------------- --------------------- ----------------------
Net cash used by financing activities - - (122,260)
- ------------------------------------------------------------- ---------------------- --------------------- ----------------------
Net increase (decrease) in cash and cash equivalents 104,853 (20,891) (1,164,553)
Cash and cash equivalents at beginning of year 587,063 607,954 1,772,507
- ------------------------------------------------------------- ---------------------- --------------------- ----------------------
Cash and cash equivalents at end of year $691,916 $587,063 $607,954
- ------------------------------------------------------------- ---------------------- --------------------- ----------------------
</TABLE>
See accompanying notes to Consolidated Financial Statements
3
<PAGE>
Kreisler Manufacturing Corporation and Subsidiaries
Notes to Consolidated Financial Statements
June 30, 1997
1. Summary of Significant Accounting Policies:
a. Operations
Kreisler Manufacturing Corporation (the "Company") fabricates precision metal
components and assemblies primarily for aircraft engines with both military and
commercial applications. These products include tube assemblies of multiple
sizes and configuration, vane inserts, and blade locks.
b. Consolidation
The consolidated financial statements include the accounts of Kreisler
Manufacturing Corporation and its subsidiaries, all of which are wholly owned.
Intercompany transactions and accounts have been eliminated.
c. Investments
The Company accounts for investments in accordance with FASB Statement No. 115
(FAS 115), "Accounting for Certain Investments in Debt and Equity Securities".
Under FAS 115, debt investments that the Company has a positive intent to hold
to maturity are classified as "held-to-maturity securities", and reported at
amortized cost. Debt and equity securities that are bought and held principally
for the purpose of selling them in the near term are classified as trading
securities and reported at fair value, with unrealized gains and losses included
in earnings. Debt and equity securities not classified as either
"held-to-maturity securities" or trading securities are classified as
"available-for-sale" securities and reported at fair value, with unrealized
gains and losses excluded from earnings and reported in a separate component of
stockholders' equity. The Company accounts for investment activity using the
specific identification method.
d. Accounts Receivable
The accounts receivable is net of an allowance for uncollectible accounts of
$8,600 for 1997 and 1996.
e. Property, Plant and Equipment
Property, plant and equipment are recorded at cost less accumulated
depreciation. Maintenance and repairs, which do not improve efficiency or extend
the useful life, are charged to operations as incurred. Asset and related
accumulated depreciation amounts are relieved from the accounts for retirements
or dispositions. Resulting gains or losses are reflected in earnings.
Depreciation is computed using accelerated methods over the estimated useful
lives of three to ten years for machinery and equipment while the straight line
method is used over the term of leases for building improvements.
f. Inventories
Inventories are stated at the lower of cost or market, cost being determined on
a first-in, first-out basis.
g. Income Taxes
The Company accounts for its income taxes in accordance with FASB Statement No.
109, "Accounting for Income Taxes" (FAS No. 109), which requires the
establishment of a deferred tax asset or liability for the recognition of the
tax effect of future deductible or taxable amounts, operating loss, or tax
credit carryforwards. Deferred tax expense or benefit is recognized as a result
of the changes in the deferred assets and liabilities during the year. Future
tax benefits, such as net operating loss carryforwards, are recognized to the
extent that realization of such benefits are more likely than not.
h. Earnings Per Share
Earnings per share of common stock are based on the weighted average number of
shares outstanding during each year.
i. Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
2. Certificates of Deposit
The Company holds certificates of deposit at various financial institutions
throughout the United States. The value at June 30, 1997, by year of maturity is
as follows:
Fiscal year ended June 30
- -------------------------------------------------------------------------------
1999 $ 554,934
- -------------------------------------------------------------------------------
3. Investments - Available-for-Sale Securities
During the year ended June 30, 1996, the Company sold its interest in debt and
equity securities. Sales proceeds and realized gains and losses on these
transactions were as follows:
Net Realized
Sales Proceeds Gains(Losses)
- -------------------------------------------------------------------------------
Mortgage backed securities $ 372,238 $ (6,759)
T-bills 562,681 339
Obligations of other U.S.
Government agencies 204,375 (12)
- -------------------------------------------------------------------------------
$ 1,139,294 $ (6,432)
- -------------------------------------------------------------------------------
4
<PAGE>
Kreisler Manufacturing Corporation and Subsidiaries
Notes to Consolidated Financial Statements
3. Investments - Available-for-Sale Securities (cont'd)
Since all investments were sold, the $3,088 of previously unrealized holding
gains on available-for-sale securities were reduced to $0 and included in
earnings for the year ended June 30, 1996.
4. Concentration of Credit Risk
The Company maintains cash balances and certificates of deposit at several
financial institutions. Accounts at each institution are insured by the Federal
Deposit Insurance Corporation up to $100,000. Uninsured balances at one
institution totaled $422,000, and $272,650 at June 30, 1997, and 1996,
respectively. The Company has not experienced any losses in such accounts and
believes it is not exposed to any significant credit risk on cash and cash
equivalents.
5. Inventories
Inventories consist of the following at June 30:
1997 1996
- -------------------------------------------------------------------------------
Raw materials $ 1,232,044 $1,058,619
Work in process 528,880 465,034
Finished goods 61,646 49,961
- -------------------------------------------------------------------------------
$ 1,822,570 $1,573,614
- -------------------------------------------------------------------------------
6. Property, Plant and Equipment
Property, Plant and Equipment consists of the following at June 30:
1997 1996
- -------------------------------------------------------------------------------
Building improvements $ 145,740 $ 127,833
Machinery and equipment 2,776,087 2,753,994
- -------------------------------------------------------------------------------
2,921,827 2,881,827
Less accumulated depreciation (2,724,581) (2,677,734)
- -------------------------------------------------------------------------------
$ 197,246 $ 204,093
Depreciation expense was $59,509, $59,678, and $66,225 for 1997, 1996, and 1995,
respectively.
7. Income Taxes
The Company and its subsidiaries file a consolidated federal income tax return.
The provision for income tax expense (benefit) from continuing operations was as
follows for the year ended June 30:
1997 1996 1995
- -------------------------------------------------------------------------------
Federal Income Taxes (Benefit)
Current $ 5,000 $ - $ -
Deferred 236,000 (308,100) (430,000)
State Income Taxes (Benefit)
Current - - -
Deferred 26,000 (41,400) (52,600)
- -------------------------------------------------------------------------------
$ 267,000 (349,500) (482,600)
Tax Credit (5,000) - -
Change in valuation allowance (557,000) 349,500 482,600
- -------------------------------------------------------------------------------
(562,000) 349,500 482,600
- -------------------------------------------------------------------------------
Income tax benefit $(295,000) $ - $ -
- -------------------------------------------------------------------------------
The actual income tax expense (benefit) attributable to earnings (loss) for the
years ended June 30 differed from the amounts computed by applying the U.S.
federal income tax rate of 34% to pretax income (loss) as a result of the
following:
1997 1996 1995
- -------------------------------------------------------------------------------
Computed expected tax expense
(benefit) $ 230,000 $(313,800) $(435,100)
Alternative minimum tax 5,000 - -
State income tax expense (benefit),
net of federal income reduction 26,000 (41,400) (52,600)
Non-deductible expenses 6,000 5,700 5,100
Valuation allowance increase (decrease) (557,000) 349,500 482,600
Alternative minimum tax credit (5,000) - -
- -------------------------------------------------------------------------------
(Benefit) provision for income taxes $ (295,000) $ - $ -
- -------------------------------------------------------------------------------
Non-deductible expenses relate primarily to life insurance payments and meals
and entertainment that are not deductible for income tax purposes. The valuation
allowance decreased $557,000 for the year ended June 30, 1997. The use of net
operating loss carryforwards to offset the current year taxable income resulted
in a benefit of $262,000. Changes in economic circumstances made the utilization
of a portion of the net operating loss carryforwards likely, generating a
benefit of $295,000.
At June 30, 1997, the Company had a net operating loss carryforward for federal
income tax purposes of approximately $1,595,000, expiring over a period of years
through 2011; a net operating loss carryforward of approximately $2,692,000 for
New Jersey state income tax purposes, expiring over a period of years through
2003; and a net operating loss carryforward for Florida state income tax
purposes of approximately $177,000, expiring over a period of years through
2011.
Deferred tax assets consist of the following at June 30:
1997 1996
- -------------------------------------------------------------------------------
Net operating loss carryforward $ 709,000 $ 976,000
Other 7,000 2,000
Alternative minimum tax credit 5,000 -
- -------------------------------------------------------------------------------
721,000 978,000
Less valuation allowance (421,000) (978,000)
- -------------------------------------------------------------------------------
$ 300,000 $ -
- -------------------------------------------------------------------------------
5
<PAGE>
Kreisler Manufacturing Corporation and Subsidiaries
Notes to Consolidated Financial Statements
8. Interest and Other Earnings
The components of interest and other earnings are as follows:
1997 1996 1995
- -------------------------------------------------------------------------------
Interest income $ 64,929 $ 103,837 $ 187,705
Gain on sale of equipment - - 1,394
Miscellaneous income 4,935 - 7,689
- -------------------------------------------------------------------------------
Total $ 69,864 $ 103,837 $ 196,788
- -------------------------------------------------------------------------------
9. Significant Customers
A substantial portion of the Company's sales were to the U.S. Government and to
three industrial customers in 1997, two industrial customers in 1996 and one
industrial customer in 1995. Sales to and accounts receivable from these
customers for the past three years were as follows:
U.S. Government Industrial Customers
Sales A/R Sales A/R
- -------------------------------------------------------------------------------
1997 $1,236,000 $ 269,000 $5,951,000 $811,000
1996 592,000 104,000 3,179,000 450,000
1995 1,726,000 4,000 1,704,000 517,000
10. Commitments and Contingencies
a. Leases
The Company conducts its operations from leased facilities, which include a
manufacturing plant and office. Total rental expense for 1997, 1996 and 1995
amounted to $91,682, $89,511 and $83,240 respectively. A schedule of the
Company's minimum non-cancelable rental commitments as of June 30, 1997,
follows:
Year Ending June 30,
- -------------------------------------------------------------------------------
1998 $ 79,992
- -------------------------------------------------------------------------------
b. Contingencies
Certain federal and state laws authorize the United States Environmental
Protection Agency (EPA) to issue orders and bring enforcement actions to compel
responsible parties to take investigative and remedial actions at any site that
is determined to present an imminent and substantial danger to the public or the
environment because of an actual or threatened release of one or more hazardous
substances. These statutory provisions impose joint and several responsibility
without regard to fault on all responsible parties, including the generators of
the hazardous substances, for certain investigative and remedial costs at sites
where these substances were disposed of or processed. Because of the nature of
the Company's business, various products and substances are or were produced or
handled which contain constituents classified as hazardous. The Company
generally provides for the disposal or processing of such substances through
licensed independent contractors.
As of June 22, 1993, Kreisler Industrial Corporation (KIC), a wholly-owned
subsidiary of Kreisler Manufacturing Corporation, was notified by the EPA that
the EPA considers KIC to be a Potentially Responsible Party (PRP) pursuant to
Section 107(a) of the Comprehensive Environmental Response Compensation and
Liability Act relating to the cleanup of a superfund site in Fairfield, New
Jersey (Site).
Currently, management is unable to ascertain the amount of liability or the time
frame over which payments will be made. As of June 11, 1993, the United States
had incurred at least $6,441,998 for response actions taken in regard to the
Site, of which, $4.5 million was not reimbursed. Generally, actions directed at
funding such site investigations and remediation include all suspected or known
responsible parties.
The EPA and a PRP Group have filed suit against KIC for its costs with regard to
the Site. Both cases are currently under a stay. KIC does not know the amount
which will be sought in these cases. Pursuant to the terms of several insurance
policies, the legal defense burden is being shared by these insurance companies.
11. Related Party Transactions
In June 1995, the Company repurchased from its President 15,897 shares of common
stock at an average price of $7.69 per share. The purchase price was within the
range of the stock bid and ask amounts for the days purchased.
Consulting fees paid to a board member totaled $42,988, $67,450, and $100,225,
in 1997, 1996, and 1995, respectively.
12. Current Liabilities in Excess of 5%
Liabilities, other than trade payables, at June 30,1997, which exceed 5% of
current liabilities include an accrual for payroll of $46,550. At June 30, 1996,
there were no liabilities other than trade payables, which exceeded 5% of
current liabilities.
6
<PAGE>
REPORT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors and Stockholders
Kreisler Manufacturing Corporation
We have audited the accompanying consolidated balance sheets of Kreisler
Manufacturing Corporation and its subsidiaries as of June 30, 1997 and 1996, and
the related consolidated statements of operations, changes in stockholders'
equity, and cash flows for each of the three years in the period ended June 30,
1997. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Kreisler
Manufacturing Corporation and its subsidiaries as of June 30, 1997 and 1996, and
the results of their operations and their cash flows for each of the three years
in the period ended June 30, 1997 in conformity with generally accepted
accounting principles.
GREGORY, SHARER & STUART
/s/ GREGORY, SHARER & STUART
St. Petersburg, Florida
August 12, 1997
7
<PAGE>
Kreisler Manufacturing Corporation and Subsidiaries
Management's Discussion and Analysis
Description of Business
Kreisler Manufacturing Corporation fabricates precision metal components
and assemblies primarily for aircraft engines with both military and commercial
applications. These products fall into three categories. The primary category
representing the majority of its business is manifold assemblies consisting of
fuel manifolds, air lines, oil lines and de-icer lines. Fuel manifolds supply
fuel to the combustion section of the engine. Air lines carry air to cool
sections of the engine. Oil lines transfer oil to lubricate various bearings in
the engine. De-icer lines transmit hot air to the engine to prevent icing.
The second category is blade locks, small metal stampings used at the base
of turbine blades to lock the blades to the hub.
The third category is baffles which are inserted into vanes located in the
combustion section of the engine for cooling purposes. These are sheet metal
parts formed generally in the shape of an airfoil with orifices to achieve this
cooling.
1997 Compared to 1996
Sales increased from $5,704,000 in 1996 to $9,402,000 in 1997. The sales
increase of $3,698,000 or 65% reflects an increase of $3,441,000 with six major
customers. Our backlog as of June 30, 1997, has again doubled compared to the
prior year.
Gross profit became positive at 9.4% as of June 30, 1997, compared to a
negative 13% at the same time in the prior year.
Net profit before taxes for 1997 were $676,000 or 7.2% , as compared to a
loss of $923,000 or 16% in the prior year.
Capital expenditures were $53,000 compared to $38,000 in the prior year. No
budget has been established for 1997-1998 and any such expenditures will be
determined as needed.
Selling, general and administrative expenses stayed the same. Sales
commissions increased 150%, but legal and general and administrative expenses
declined an equal amount.
Short term liquidity, management believes, will be adequately provided by
internally generated funds or cash reserves to meet the needs of the business.
Our cash reserves are $1,245,000, a reduction of $155,000 or 11%. At June 30,
1997, working capital was $3,425,000. and a current ratio of 5.7:1. Accounts
receivable increased to $1,610,000 from $891,000 -- an increase of $719,000 or
81%. We have no long term debt. Stockholder equity is $9.21 per share compared
to $7.21 per share in the prior year -- an increase of $2.00 per share or 28%.
Quarterly Common Stock Data
The Company's stock is traded over-the-counter. There are approximately 400
shareholders. The Company does not anticipate the payment of cash dividends this
year. The table below presents a summary of the sales prices for years ended
June 30.
1997 1996
- -------------------------------------------------------------------------------
Sales Price Range Sales Price Range
Quarter High Low High Low
June 30 7 1/8 5 4 1/2 2 3/4
March 31 7 1/4 4 5/8 5 1/4 2 3/4
December 31 4 5/8 3 5/8 5 1/2 4 1/4
September 30 3 1/2 2 5/8 6 1/4 5 1/2
8
<PAGE>
Kreisler Manufacturing Corporation and Subsidiaries
Directors and Officers
<TABLE>
<S> <C>
- ----------------------------------------------------------------------------------------------------------------------------
DIRECTORS TRANSFER AGENT
EDWARD L. STERN, Chairman of the Board, President,CEO, Common Stock
Kreisler Manufacturing Corporation,Kreisler Industrial Corporation American Stock Transfer and Trust Company
ROBERT S. KRUPP, Financial Consultant 40 Wall Street
HARRY BRILL-EDWARDS, President, Gas Turbine Consulting New York, NY 10005
EDWARD A. STERN, Vice President, Kreisler Industrial
Corporation REGISTRAR
MICHAEL D. STERN, Vice President, Kreisler Industrial American Stock Transfer and Trust Company
Corporation 40 Wall Street
New York, NY 10005
OFFICERS COUNSEL
EDWARD L. STERN, Chairman of the Board, President BLANK, ROME, COMISKY & McCAULEY
EDWARD A. STERN, Vice President 4 Penn Central Plaza
MICHAEL D. STERN, Vice President Philadelphia, PA 19103
AUDITORS ADDITIONAL INFORMATION
GREGORY, SHARER & STUART Stockholders may obtain, free of charge, a copy of
Certified Public Accountants Kreisler's annual report on Form 10-K filed with the
100 Second Avenue South, Suite 606 Securities and Exchange Commission for the year
St. Petersburg, FL 33701 ended June 30, 1997, by written or telephone
request to the Secretary of Kreisler Manufacturing
Corporation, 5960 Central Avenue, Suite H, St.
Petersburg, Florida, 33707
Telephone 813 - 347 - 1144
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
CORPORATE OFFICES: 5960 CENTRAL AVENUE, SUITE H, ST. PETERSBURG, FL 33707
[LOGO]
This entire report printed on Recycled Paper
9
<PAGE>
EXHIBIT 21
Subsidiaries of the Registrant
The only significant subsidiary of the Registrant is Kreisler Industrial
Corporation, a New Jersey corporation, all of whose outstanding stock is owned
by the Registrant.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> JUN-30-1997
<CASH> 691,916
<SECURITIES> 0
<RECEIVABLES> 1,609,913
<ALLOWANCES> 0
<INVENTORY> 1,822,570
<CURRENT-ASSETS> 4,447,386
<PP&E> 2,921,827
<DEPRECIATION> 2,724,581
<TOTAL-ASSETS> 5,199,566
<CURRENT-LIABILITIES> 727,175
<BONDS> 0
<COMMON> 242,756
0
0
<OTHER-SE> 4,229,635
<TOTAL-LIABILITY-AND-EQUITY> 5,199,566
<SALES> 9,402,005
<TOTAL-REVENUES> 9,402,005
<CGS> 8,795,959
<TOTAL-COSTS> 8,795,959
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 675,910
<INCOME-TAX> (295,000)
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 970,910
<EPS-PRIMARY> 2.00
<EPS-DILUTED> 0.00
</TABLE>
