UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934.
----------------------
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 for the quarterly period ended 6/30/96.
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[ ] 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 0-4538
CYBEX INTERNATIONAL, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
New York 11-1731581
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2100 Smithtown Avenue, Ronkonkoma, New York 11779
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(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code 516-585-9000
------------------------------
LUMEX, INC.
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(Former name, if changed since last report)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 19345
during the preceding 12 months (or for such shorter period that the Registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
----- -----
On June 30, 1996, the registrant had outstanding 4,359,642 shares of Common
Stock, par value $.10 per share, which is the registrant's only class of common
stock.
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
CYBEX INTERNATIONAL, INC.
(FORMERLY LUMEX, INC.)
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF OPERATIONS
-------------------------------------
(Dollars in thousands, except per share data)
(unaudited)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
------- -------
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Net Sales $ 17,713 $15,457 $ 37,789 $33,700
Cost and expenses:
Cost of sales 10,124 9,061 22,200 19,722
Selling, general and administrative 7,837 9,389 15,732 17,372
Other income (84) (139) (90) (238)
---------- ------- -------- -------
17,877 18,311 37,842 36,856
---------- ------- -------- -------
Operating loss (164) (2,854) (53) (3,156)
Interest expense 74 403 659 654
Interest income 165 429 230 779
---------- ------- -------- -------
Loss from continuing operations
before income tax benefit (73) (2,828) (482) (3,031)
Income tax benefit -0- (1,012) -0- (1,084)
---------- ------- -------- -------
LOSS FROM CONTINUING OPERATIONS (73) (1,816) (482) (1,947)
Income (loss) from discontinued
operations, net -0- 554 (414) 801
---------- ------- -------- -------
NET LOSS $ (73) $(1,262) $ (896) $(1,146)
========== ======= ======== =======
(LOSS) INCOME PER SHARE OF COMMON STOCK:
Continuing operations $ (0.02) $ (.42) $ (0.11) $ (0.44)
Discontinued operations -0- 0.13 (0.09) 0.18
---------- ------- -------- -------
NET LOSS $ (0.02) $ (0.29) $ (0.20) $ (0.26)
========== ======= ======== =======
</TABLE>
See notes to consolidated condensed financial statements.
2
<PAGE>
CYBEX INTERNATIONAL, INC.
(FORMERLY LUMEX, INC.)
<TABLE>
<CAPTION>
CONSOLIDATED CONDENSED BALANCE SHEETS
-------------------------------------
(unaudited)
JUNE 30, DECEMBER 31
1996 1995
---- ----
(Dollars in thousands)
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 6,210 $ 1,798
Investments -0- 2,476
Accounts receivable 17,947 22,482
Inventories 13,604 12,024
Lease receivables 1,359 574
Net assets of discontinued operations -0- 37,214
Other current assets 3,968 5,466
------- -------
Total Current Assets 43,088 82,034
Property, plant and equipment, net 13,019 13,291
Lease receivables 1,374 1,402
Intangible assets 2,381 1,687
Other assets 436 504
------- -------
$60,298 $98,918
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Short-term borrowings $ -0- $15,250
Accounts payable 6,461 10,874
Other current liabilities 9,851 28,218
------- -------
Total Current Liabilities 16,312 54,342
Deferred income taxes 1,227 1,227
Long-term debt 3,503 2,715
Stockholders' Equity
Common Stock, par value $.10 per share,
authorized 15,000,000 shares, issued
4,489,286 in 1996 and 4,458,354 in 1995 449 446
Capital surplus 17,390 17,128
Retained earnings 23,205 24,101
Treasury stock at cost (129,644 shares in
1996 and 54,897 shares in 1995) (1,519) (629)
Other (269) (412)
------- -------
Total Stockholder's Equity 39,256 40,634
------- -------
$60,298 $98,918
======= =======
</TABLE>
See notes to consolidated condensed financial statements.
3
<PAGE>
CYBEX INTERNATIONAL, INC.
(FORMERLY LUMEX, INC.)
<TABLE>
<CAPTION>
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
-----------------------------------------------
(unaudited)
SIX MONTHS ENDED
JUNE 30,
1996 1995
---- ----
(Dollars in thousands)
<S> <C> <C>
OPERATING ACTIVITIES:
Net loss $ (896) $ (1,146)
Adjustments to reconcile net loss to net
cash provided by (used in) operating activities:
Depreciation and amortization 1,370 2,448
Net changes in operating assets and
liabilities (11,455) (8,740)
Change in net assets of discontinued
operations 37,214 -0-
-------- ---------
NET CASH PROVIDED BY (USED IN) OPERATING
ACTIVITIES 26,233 (7,438)
INVESTING ACTIVITIES:
Purchase of property, plant and equipment (694) (4,895)
Proceeds from sales and maturities of investments 2,476 -0-
Purchases of intangible assets (33) (3,919)
Other -0- (110)
-------- ---------
NET CASH PROVIDED BY (USED IN)
INVESTING ACTIVITIES 1,749 (8,924)
FINANCING ACTIVITIES:
Principal payments of short-term borrowings (15,250) -0-
Proceeds from short-term borrowings -0- 5,500
Proceeds from sales of leases 4,341 4,491
Proceeds from long-term debt 2,465 -0-
Principal payments of long-term debt (14,384) (2,305)
Exercise of stock options 148 18
Common shares reacquired (890) (2)
Other -0- (157)
-------- ---------
NET CASH (USED IN) PROVIDED BY
FINANCING ACTIVITIES (23,570) 7,545
-------- ---------
INCREASE (DECREASE) IN CASH 4,412 (8,817)
CASH AND CASH EQUIVALENTS -- January 1 1,798 9,746
-------- ---------
CASH AND CASH EQUIVALENTS -- June 30 $ 6,210 $ 929
======== =========
</TABLE>
See notes to consolidated condensed financial statements.
4
<PAGE>
CYBEX INTERNATIONAL, INC.
(FORMERLY LUMEX, INC.)
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
----------------------------------------------------
(dollars in thousands)
NOTE 1 -- BASIS OF PRESENTATION
The accompanying unaudited consolidated condensed financial statements have been
prepared in accordance with the instructions to Form 10-Q and, therefore, do not
include all information and footnotes necessary for a fair presentation of
financial position, results of operations and changes in cash flows in
conformity with generally accepted accounting principles. In the opinion of
management, all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. The Company has
reclassified the presentation of certain prior year information to conform to
the current year presentation format.
Effective with the approval of shareholders at the Company's annual meeting of
shareholders on August 7, 1996, the Company's name was changed from Lumex, Inc.
to CYBEX International, Inc.
It is suggested that these condensed financial statements be read in conjunction
with the financial statements and the notes thereto included in the Company's
latest Annual Report on Form 10-K for the year ended December 31, 1995.
NOTE 2 -- DISCONTINUED OPERATIONS
On April 3, 1996, the Company completed the sale of its Lumex Division (the
"Division") to Fuqua Enterprises, Inc. ("Fuqua") for $40,750 in cash and,
accordingly the net assets and operating results of the Division are reflected
as discontinued operations. The sale agreement provides for a post closing
adjustment to the sales price based on changes in the net assets of the Division
from December 31, 1995, through the closing date. The Company has received
notice from Fuqua that it is not in agreement with the recorded amount of
certain of the net assets of the Division as of the closing date. Under the
terms of the sale agreement, if the Company and Fuqua are unable to agree on the
recorded amount of net assets, the disputed items will be submitted to
arbitration by an independent accounting firm.
NOTE 3 -- INVENTORIES
Inventories are valued at the lower of cost or market. Certain inventories are
valued under the last-in first-out (LIFO) method. The estimated replacement cost
of LIFO inventories exceeds stated LIFO cost by $1,551 and $1,500 at June 30,
1996, and December 31, 1995, respectively.
Inventories were as follows:
June 30, December 31
1996 1995
---- ----
Finished goods $ 6,308 $ 4,160
Work in process 4,259 3,828
Raw materials 3,037 4,036
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$13,604 $12,024
======= =======
5
<PAGE>
Because the inventory determination under the LIFO method can only be made at
the end of each fiscal year based on the inventory levels and costs at that
point, interim LIFO determinations are based on management's estimates of
expected year-end inventory levels and costs.
Since future estimates of inventory levels and prices are subject to many forces
beyond the control of management, interim financial results are subject to final
year-end LIFO inventory amounts.
NOTE 4 -- LONG-TERM DEBT
In May 1996, the Company borrowed $2,465 from a bank pursuant to a five year,
9.48% fixed rate term loan agreement. The term loan is payable in fifty seven
equal principal installments plus interest which commenced June 15, 1996. The
term loan is secured by an equivalent amount of specific lease receivables
included in the Company's lease receivables.
NOTE 5 -- NET (LOSS) INCOME PER COMMON SHARE
Net (loss) income per common share is computed by dividing net (loss) income by
the weighted average number of common shares and, if applicable, common share
equivalents (dilutive stock options) outstanding during each year as appears
below:
1996 1995
---- ----
Three months ended June 30 4,413,590 4,348,212
Six months ended June 30 4,415,247 4,353,240
6
<PAGE>
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
---------------------------------------------
On April 3, 1996, the Company completed the sale of substantially all the assets
of its Lumex Division for $40,750,000 in cash. Accordingly, the results of
operations of the Lumex Division have been reflected as discontinued operations.
The following discussion, including statistics presented, refers solely to
continuing operations unless otherwise stated.
RESULTS OF OPERATIONS
The following table sets forth selected items from the consolidated statements
of operations as a percentage of sales:
<TABLE>
<CAPTION>
% %
Quarter Ended Inc. Six Months Ended Inc.
June 30, (Dec) June 30, (Dec)
-------------- ----- ---------------- -----
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Net sales 100.0% 100.0% 14.6% 100.0% 100.0% 12.1%
Cost and expenses
Cost of sales 57.2 58.6 11.7 58.8 58.5 12.6
Selling, general and 44.3 60.8 (16.5) 41.6 51.6 (9.4)
administrative
Loss from continuing operations
before income tax benefit (0.4) (18.3) (1.3) (9.0)
</TABLE>
1996 vs. 1995:
- --------------
Net sales increased 14.6%, to $17,713,000 in the second quarter 1996 as compared
to net sales of $15,457,000 in the second quarter 1995. For the first six months
of 1996, net sales increased 12.1% to $37,789,000 as compared to $33,700,000 for
the period in 1995. The quarterly sales growth was primarily attributable to
significantly higher worldwide shipments of variable resistance training
equipment, including the second generation VR2 products, and of commercial
treadmills. Shipments of the NORM isokinetic extremity testing and
rehabilitation unit were also higher in the second quarter 1996 compared to the
second quarter 1995, principally due to the more reimbursement-friendly
international market. Shipments of the Company's BIKE and SEMI were lower in the
current year's second quarter and year-to-date compared to the same periods a
year earlier, principally due to continued competitive pricing practices.
Gross margins improved, as a percentage of sales, to 42.9% in the second quarter
1996 as compared to 41.4% in the same quarter a year ago, largely the result of
changing product mix and the impact in the prior year quarter of the startup
costs of several major new products.
Selling, general and administrative expenses declined both in terms of dollars,
and as a percentage of sales, to 44.3% for the second quarter 1996 compared to
60.8% for the same
7
<PAGE>
period a year earlier. Expense reductions put in place as part of the
restructuring plan adopted in the fourth quarter 1995 resulted in lower overall
selling and administrative costs, principally resulting from the realignment of
the Company's sales and customer service departments. Product development costs
were higher in 1995 due to accelerated efforts to complete the CYBEX NORM and
VR2 product lines which were successfully introduced in mid 1995.
Interest expense declined significantly as the Company repaid approximately $28
million of bank debt from the proceeds received in the sale of the Company's
Lumex Division in April 1996. Interest income declined due to lower average
balances in the Company's lease receivable portfolio.
The Company has significant carryforward tax losses and has not taken any
additional tax benefit for financial statement purposes.
LIQUIDITY AND CAPITAL RESOURCES
At June 30, 1996, the Company had a current ratio of 2.64 to 1 and working
capital in excess of $26.7 million, including $6.2 million in cash and cash
equivalents. The Company's financial condition considerably improved as a result
of the sale of its Lumex Division, completed on April 3, 1996, for $40.75
million in cash.
Net cash provided by operating activities was $26.2 million during the first six
months of 1996, including $37.2 million from the sale of the Company's Lumex
Division on April 3, 1996. Cash used in continuing operations of approximately
$11 million resulted largely from a $9.6 million decrease in accounts payable
and accrued liabilities, including $2.1 million of payments made related to $8.2
million of non-recurring charges recorded in the fourth quarter 1995.
Cash provided by investing activities, in excess of $1.7 million, resulted
primarily from sales and maturities of investments used to fund operating
activities during the quarter.
Cash used in financing activities of $23.6 million resulted primarily from the
repayment of short-term and long-term borrowings of $27.8 million from the
proceeds received in the sale of the Lumex Division and was largely offset by
$4.3 million received from periodic sales of lease receivables.
The Company has a $10 million bank line of credit under which, subsequent to the
sale of its Lumex Division, there were no outstanding borrowings. Management
expects the cash flow generated from its manufacturing operations plus the net
proceeds from the sale of the Lumex Division will be sufficient to meet its
general working capital and capital expenditure requirements, including those
related to the restructuring of its continuing operations. The Company's finance
subsidiary is expected to continue to support its working capital requirements
through periodic sales of its lease portfolios to third party financial
institutions.
8
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits
3(a).(1) Restated Certificate of Incorporation of Lumex, Inc., dated
May 20, 1988. (filed herewith)
3(a).(2) Certificate of Amendment of the Certificate of Incorporation
of Lumex, Inc., dated May 30, 1988. (filed herewith)
3(a).(3) Certificate of Amendment of the Certificate of Incorporation
of Lumex, Inc., dated August 7, 1996. (filed herewith)
10(xvii) Covenant Not to Compete, dated as of April 3, 1996, by
and among the Company, Lumex Medical Products, Inc.
(f/k/a MUL Acquisition Corp. I), MUL Acquisition Corp. II,
and Fuqua Enterprises, Inc. (filed herewith)
27 Financial Data Schedules (filed herewith)
(b) Reports on Form 8-K
The Company filed a Current Report on Form 8-K, dated April 3,
1996, reporting in Item 2 the sale by the Company of its Lumex Division.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CYBEX INTERNATIONAL, INC.
Date: August 14, 1996 By /s/ J. Raymond Elliott
J. Raymond Elliott
President and
Chief Executive Officer
Date: August 14, 1996 By /s/ Robert McNally
Robert McNally
Sr. Vice President and
Chief Financial Officer
<PAGE>
EXHIBIT INDEX
Exhibit Number Description
3(a).1 Restated Certificate of Incorporation of Lumex, Inc., dated
May 20, 1988. (filed herewith)
3(a).2 Certificate of Amendment of the Certificate of Incorporation
of Lumex, Inc., dated May 30, 1988. (filed herewith)
3(a).3 Certificate of Amendment of the Certificate of Incorporation
of Lumex, Inc., dated August 7, 1996. (filed herewith)
10(xvii) Covenant Not to Compete, dated as of April 3, 1996, by
and among the Company, Lumex Medical Products, Inc.
(f/k/a MUL Acquisition Corp. I), MUL Acquisition Corp. II,
and Fuqua Enterprises, Inc. (filed herewith)
27 Financial Data Schedules (filed herewith)
EXHIBIT 3(a).(1)
RESTATED CERTIFICATE OF INCORPORATION
OF
LUMEX, INC.
Under Section 807 of the Business Corporation Law
Weil, Gotshal & Manges
767 Fifth Avenue
New York, NY 10153
<PAGE>
RESTATED CERTIFICATE OF INCORPORATION
OF
LUMEX, INC.
Under Section 807 of the Business Corporation Law
-------------------------------------------------
WE, THE UNDERSIGNED, Lawrence N. Cohen and Robert McNally,
being respectively the President and the Secretary of Lumex, Inc., do
hereby certify:
FIRST: The name of the Corporation is Lumex, Inc.
-----
(hereinafter referred to as the "Corporation").
SECOND: The Certificate of Incorporation was filed with the
------
Department of State of New York on September 11, 1953.
THIRD: The text of the Certificate of Incorporation of the
-----
Corporation is hereby restated without amendments or changes to read
as herein set forth in full:
<PAGE>
CERTIFICATE OF INCORPORATION
OF
LUMEX, INC.
FIRST: The name of the corporation is LUMEX, INC.
-----
SECOND: The corporation is formed for the following purpose
------
or purposes:
To invent, design, develop, manufacture, produce, purchase
or otherwise acquire, own, distribute, market, sell, lease or
otherwise dispose of, articles, furniture, equipment and supplies of
every kind, nature and description, including, but no limited to,
items for use in hospitals, nursing homes, extended care facilities,
offices and homes, or equipment or supplies used in connection with
the practice of medicine, made of wood, metal, rubber, fabric whether
natural or synthetic, plastics or other material or other combination
thereof, and to erect, own, lease, equip, operate, maintain and use
manufacturing plants, factories, mills, laboratories, warehouses,
office buildings, offices, salesrooms, branch establishments, and all
buildings and structures whatsoever which may be necessary or
incidental to the manufacture, storage, shipment and sale of the
aforementioned products.
<PAGE>
To conduct a general merchandising and trading business, to
import, export, buy and sell, at wholesale and retail, lease,
handle, install, erect, repair, service, distribute,
contract in respect of, and otherwise deal in and with, on margin or
otherwise, whether as principal, agent, factor, broker, licensor,
licensee, on commission, on its own behalf or on behalf of others,
goods, wares, commodities, merchandise, and real and personal property
of every kind and description except bills of exchange.
To export from and import into the United States of America
and its territories and possessions, and any and all foreign countries
as principal or agent, merchandise of every kind and nature and to
purchase, sell, and deal in and with, at wholesale and retail,
merchandise of every kind and nature for exportation from, and
importation into the United States, and to and from all countries
foreign thereto, and for exportation from, and importation into, any
foreign country, to and from any other country foreign thereto, and to
purchase and sell domestic and foreign merchandise in domestic markets
and domestic and foreign merchandise in foreign markets, and to do a
general foreign and domestic exporting and importing business.
<PAGE>
To do a general brokerage, commission merchants' and selling
agents' business; to make and enter into all manner and kinds of
contracts, agreements and obligations by or with any person or
persons, incorporated or unincorporated firm or firms,
for the purchasing, acquiring, manufacturing, and selling of any
articles of personal property of any kind or nature whatsoever, and
generally with full power to perform any and all acts connected
therewith or arising therefrom or incidental thereto, and all acts
proper or necessary for the purpose of the business.
To manufacture, buy, trade, sell, handle, use, lease, and in
all ways to turn to account, and deal in and with respect to,
articles, goods, wares, merchandise and commodities of all kinds and
descriptions; to engage in and conduct, in all branches and details,
the business of manufacturing and trading.
To manage or administer as agent the business or property of
any corporation, firm, or person, carrying on any authorized business,
and to sell or dispose of, receive, and make disbursements for, or
arrange for the management or administration of the whole or any part
of the business or property of any corporation, firm or person.
<PAGE>
To act as agent, broker, consignee, or factor of others in
buying and selling all manner and kind of goods and to make contracts
with others in reference to the handling and disposing of the same,
and to deliver goods on bills of lading in the name of this
corporation; to draw drafts against such bills of lading and carry
insurance in the name of this corporation on goods consigned for sale.
To acquire by purchase, lease, gift, devise, or otherwise,
and to own, use, hold, sell, convey, exchange, lease, mortgage, work,
improve, develop, divide and otherwise handle, deal in and dispose of
real estate, real property and any interest or right therein, whether
as principal agent, broker or otherwise.
To manage, operate, service, equip, furnish, alter, and keep
in repair dwellings, apartment houses, hotels, office buildings and
real and personal property of every kind, nature and description,
whether as principal, agent, broker, or otherwise, and generally to do
anything and everything necessary and proper and to the extent
permitted by law in connection with the business of managing and
operating real and personal property of any and all kinds.
<PAGE>
To lend money or make advances from time to time to such
extent, to such borrowers, on such terms, and on such security, if
any, as the Board of Directors of the corporation may determine, but
only to the extent permitted corporations organized under the Business
Corporation Law.
To purchase, exchange, hire, or otherwise acquire such
personal property, chattels, rights, assessments, permits privileges,
and franchises as may lawfully be purchased, exchanged, hired, or
acquired under the Business Corporation Law.
To borrow money for its corporate purposes, and to make,
accept, endorse, execute and issue promissory notes, bills of
exchange, bonds, debentures or other obligations from time to time,
for the purchase of property or for any purpose in or about the
business of the corporation, and, if deemed proper, to secure the
payments of any such obligations by mortgage, pledge, deed of trust or
otherwise.
To underwrite, purchase, acquire, hold, pledge, hypothecate,
exchange, sell, deal in and dispose of, alone or in syndicates or
otherwise in conjunction with others stocks, bonds and other evidences
of indebtedness and obligations of any corporation, association,
partnership, syndicate, entity, or person or governmental, municipal
or public authority, domestic or foreign, and evidences of any
interest, in respect of any such stocks, bonds and other evidences of
indebtedness and obligations; to issue in exchange therefor its own
stocks, bonds or other obligations; and, while the owner or holder of
any such, to exercise all the rights, powers and privileges of
ownership in respect thereof; and, to the extent now, or hereafter
permitted by law, to aid by loan, subsidy, guaranty or otherwise those
issuing, creating or responsible for any such stocks, bonds or other
evidences of indebtedness or obligations or evidences of any interest
in respect thereof.
<PAGE>
To apply for, purchase, register, or in any manner to
acquire, and to hold, own, use, operate and introduce, and to sell,
lease, assign, pledge, or in any manner dispose of and in any manner
deal with patents, patent rights, licenses, copyrights, trade-marks,
trade names and to acquire, own, use or in any manner dispose of any
and all inventions, improvements and processes, labels, designs,
brands, or other rights, and to work, operate, or develop the same,
and to carry on any similar business, manufacturing or otherwise,
which may, directly or indirectly, effectuate these objects or any of
them.
To acquire, and to take over as a going concern and
thereafter to carry on the business of any person, firm or corporation
engaged in any business which this corporation is authorized to carry
on, and in connection therewith, to acquire the good will and all or
any of the assets and to assume or otherwise provide for all or any of
the liabilities of any such business.
To carry on business at any place or places, within the
jurisdiction of the United States, and in any and all foreign
countries, and to purchase, hold, mortgage, convey, lease or otherwise
dispose of and deal with real and personal property at any such place
or places.
To undertake, contract for or carry on any business
incidental to or in aid of, or advantageous in pursuance of, any of
the objects or purposes of the corporation.
To do any of the things thereinbefore enumerated for itself
or for account of others and to make and perform contracts for doing
any part thereof.
To enter into make, perform and carry out contracts of every
sort and kind which may be necessary or convenient for the business of
this corporation, or business of a similar nature, with any person,
corporation, private, public or municipal body public under the
government of the United States or any state, territory or colony
thereof, or any foreign government, so far as and to the extent that
the same may be done and performed by corporations organized under the
Business Corporation Law.
<PAGE>
To do all and everything necessary, suitable, or proper for
the accomplishment of any of the foregoing purposes and the attainment
of any of the foregoing objects and to have in furtherance thereof all
of the powers conferred upon corporations organized under the Business
Corporation Law, subject to any limitations thereof contained in this
Certificate of Incorporation or in the Laws of the State of New York.
THIRD: The total number of shares of all classes which the
-----
corporation shall have the authority to issue is fifteen
million five hundred thousand (15,500,000) of which five hundred
thousand (500,000) are to be Preferred Shares of the par value of one
dollar ($1) per share, and fifteen million (15,000,000) are to be
Common Shares of the par value of ten cents ($.10) per share. The
Preferred Shares shall consist of such one or more series as may be
established from time to time by the Board of Directors of the
Corporation pursuant to the authority hereinafter granted.
<PAGE>
The following is a statement of the designations and the
powers, preferences and rights, and the qualifications, limitations
and restrictions of the Preferred Shares and of the Common Shares, and
of the relative rights of the holders thereof.
1. General. The Board of Directors of the corporation is
-------
hereby authorized to issue, from time to time, Preferred Shares in
series and to fix from time to time by a vote or votes or by
resolution or resolutions of the Board of Directors providing for such
number of shares of each such series, the designations and the powers,
preferences and relative, participating, optional or other special
rights and qualifications, limitations or restrictions thereof,
including, without limitations, any of the following: (i) the voting
powers thereof, if any, full or limited, or no voting powers, (ii) the
relative, participating, optional or other special rights
thereof, (iii) provisions relating to the call or redemptions thereof,
including, without limitation, the times and prices for such calls or
redemptions, (iv) provisions relating to the rights thereof to receive
dividends, including, without limitation, the rates of such dividends
and the conditions on which such dividends shall be cumulative or
shall be accrued and paid and the times of payment of such dividends
and any preferential rights thereto in relation to dividends payable
on other classes of stock of the corporation or series thereof or on
other series of each such class and whether such dividends shall be
cumulative or non-cumulative, (v) the rights thereof upon the
dissolution of, or upon any distribution of the assets of, the
corporation, (vi) provisions relating to the conversion thereof into,
or the exchange thereof for shares of any other class or classes or of
any other series of the same class or of any series of any other class
or classes of shares of the corporation, including, without
limitation, the prices or rates and adjustments for any such
conversions or exchanges, and whether such series shall be convertible
or non-convertible and (vii) provisions relating to sinking funds
therefor and the retirement thereof, if any. Provisions relative to
the Preferred Shares, or any series thereof, contained herein or in
any such vote or votes or resolution or resolutions or other action
are herein called "Governing Provisions."
<PAGE>
2. Definitions. In these provisions and in any Governing
-----------
Provisions providing for the issue of each series of the Preferred
Shares as hereinbefore provided, and for the purposes hereof and
thereof, the following terms shall have the respective meanings below
specified, unless the context or a specific provision requires a
different meaning:
"Preferred Shares" means the Preferred Shares, par value $1
per share, in this Article THIRD described, of such series as may be
established by any Governing Provisions, from time to time
outstanding, excluding in each case any such shares held by the
corporation in its treasury.
"Common Shares" means the Common Shares, par value $.10 per
share, referred to in this Article THIRD, from time to time
outstanding, excluding such shares held by the corporation in its
treasury.
"Dividends accrued" means the amount of unpaid dividends,
whether or not declared, to which any share of this corporation is
entitled, at the date with reference to which the term is used,
whether or not such date is a dividend payment date.
<PAGE>
3. Dividends. The holders of each series of the Preferred
---------
Shares shall be entitled to receive, if, when and as declared by the
Board of Directors, out of funds legally available for the purpose,
preferential dividends, if any as provided in the Governing Provisions
establishing such series; provided, however, that if the stated
dividends are not paid in full, the holders of the Preferred Shares of
all the series shall share ratably in the payment of dividends
including accumulation, if any, in accordance with the sums which
would be payable on such shares if all dividends were declared and
paid in full. Subject to the provisions and restrictions set forth
below in Section 6 of this Article THIRD, and in any Governing
Provisions, the corporation may declare and pay, out of funds legally
available for the purpose, dividends on Common Shares or other shares
ranking junior to Preferred Shares as to dividends.
4. Liquidations. Upon any liquidation, dissolution or
------------
winding up of the corporation, whether voluntary or involuntary (all
herein referred to as a "liquidation"), the holders of each series of
the Preferred Shares shall be entitled to receive, in cash or in
property or both, before any distribution or payment is made upon any
Common Shares or other shares ranking junior to the Preferred Shares
in liquidation, such amount as may be provided in the Governing
Provisions establishing such series; provided, however, that if
upon any such liquidation, the amounts payable on or with respect
to the Preferred Shares of all series are not paid in full, the
holders of the Preferred Shares of all series shall share ratably
in any distribution of assets according to the respective
amounts which would be payable in respect of the shares
held by them upon such distribution if all amounts payable on or with
respect to the Preferred Shares of all series were paid in full.
Written notice of any liquidation, stating a distribution date and the
place where amounts distributable thereon shall be payable, shall be
given by mail, postage prepaid, not less than thirty (30) days prior
to the distribution date stated therein, to the holders of record of
all the outstanding shares of any series having any preference in
liquidation over any other outstanding shares, such notice to be
addressed to each shareholder at his post office address as shown by
the records of the corporation. After the amounts required heretofore
by this Section 4 of this Article THIRD and in any Governing
Provisions shall have been paid to the holders of the Preferred Shares
and the holders of such other shares as may be entitled thereto, or
set aside for payment to the holders of the Preferred Shares and the
holders of such other shares as may be entitled thereto, then but not
prior thereto, distributions or payments may be made upon any Common
Shares or other shares ranking junior to the Preferred Shares and
any such other shares in liquidation.
<PAGE>
5. Redemption. Each series of the Preferred Shares shall
----------
be or shall not be subject to redemption, as provided in the Governing
Provisions establishing such series. In case of the redemption of
only a part of the outstanding shares of any series of Preferred
Shares, the shares to be redeemed shall be selected by lot or pro rata
(subject to adjustment with respect to holdings not susceptible of
partial redemption in the exact proportion as the total number of
shares being redeemed bears to all the outstanding shares) in such
manner as the Board of Directors shall determine. Not less than (30)
days and not more than ninety (90) days prior written notice shall be
given by mail, postage prepaid, to the holders of record of the
Preferred Shares to be redeemed, such notice to be addressed to each
shareholder at his post office address as shown by the records of the
corporation. If such notice of redemption shall have been given, and
if, on or before the redemption date specified in such notice, there
shall have been deposited with the transfer agent for the Preferred
Shares the funds necessary for such redemption, in trust for the
account of the holders of the shares so called for redemption, payable
to them promptly upon the surrender of their share certificates,
except as to deposited funds unclaimed for not less than one
(1) year after such deposit, then upon the making of such
deposit, the shares with respect to which such deposit
shall have been made shall no longer be deemed to be outstanding, and
all rights with respect to such shares, including any rights to
receive notice and to vote, shall forthwith cease and determine except
only (i) the right of the holders thereof to receive, out of the funds
so deposited, the redemption price thereof without interest, and (ii)
any right of the holders thereof to convert as provided or referred to
in any Governing Provisions. Any funds so deposited and remaining
unclaimed at the end of not less than one (1) year from the date fixed
for such redemption shall be repaid to the corporation upon its
request, after which repayment the holders of the shares so called for
redemption shall look only to the corporation for the payment of the
redemption price thereof. Subject to the provisions hereof, the Board
of Directors shall have authority to prescribe the manner in which
Preferred Shares shall be redeemed from time to time. Any of the
Preferred Shares of any series redeemed pursuant to the provisions of
this Section 5 shall not thereafter be reissued as shares of such
series, but such shares shall become authorized and unissued Preferred
Shares which may thereafter be designated as shares of any other
series. Nothing in this Section 5 contained shall limit the
right of the corporation to purchase any Preferred Shares.
<PAGE>
6. Restriction on Dividends, etc., on Junior Shares. So
------------------------------------------------
long as any of the Preferred Shares are outstanding, the corporation
shall not declare or pay any dividend or make any other distribution
upon the Common Shares or any other shares ranking junior to the
Preferred Shares as to dividends or in liquidation (except dividends
or distributions payable in Common Shares or other shares of the
corporation ranking junior to the Preferred Shares as to dividends and
in liquidation) and the corporation shall not directly or indirectly
purchase or redeem or otherwise acquire for value any Common Shares or
other shares of the corporation ranking junior to the Preferred Shares
as to dividends and in liquidation (except any acquisitions of shares
by the issue of, or out of the proceeds of the sale of Common Shares
or other shares ranking junior to the Preferred Shares as to dividends
and in liquidation, and any repurchase of shares, or payments to the
holders of shares, in satisfaction of appraisal rights under any law
or laws) unless in each instance an amount equal to all cumulative
dividends accrued for all previous elapsed dividend periods of the
corporation shall have been paid or set aside for payment on all then
outstanding Preferred Shares and an amount of dividends thereon equal
to the current dividend thereon shall have been declared
and paid or set aside for payment for the then current
dividend period, and, unless all dividends on all
Preferred Shares theretofore surrendered for any permitted conversion
which remained accrued but unpaid for any previously fully elapsed
dividend periods at the time of such surrender shall have been
declared and paid or set aside for payment to the holder of each such
share who surrendered such share or his assignee. The rights to such
dividends on such surrendered shares shall be evidenced in such manner
as the Board of Directors shall reasonably determine.
<PAGE>
7. Voting Rights. Except for such voting powers, if any,
-------------
as may be granted under any Governing Provisions to any one or more
series of Preferred Share, or by law, voting power shall be vested
exclusively in the Common Shares. Preferred Shares of any series
having voting power under any Governing Provisions shall have no more
than one vote per share, except by the operation of anti-dilution
provisions, and shall not be given any special voting powers in
elections of directors, except that they may be given the right to
elect certain members of the Board of Directors in the event of any
dividend arrearage on such series. Except as otherwise expressly
required by law and except as may be otherwise expressly provided in
any Governing Provisions, all Preferred Shares having general voting
powers shall vote and otherwise act together with the Common Shares as a
single class and not as a separate class or classes. In the event that
any vote of the Preferred Shares as a separate class shall be required by
law or by any Governing Provisions, each of such Preferred Shares shall
have one (1) vote per share and shall be deemed to be and shall vote and
otherwise set together as a single separate class, without regard to
series, unless otherwise expressly required by law or by any Governing
Provisions. The holders of Preferred Shares having voting power shall
be entitled to notice of all meetings of shareholders of the
corporation at which such voting power may be exercised.
<PAGE>
8. Conversion of Convertible Preferred Shares. Preferred
------------------------------------------
Shares of any series which shall be stated to be convertible by any
Governing Provisions (such Preferred Share being hereinafter referred
to as "Convertible Preferred Shares"), may be converted, at the option
of the holder thereof, at the time, to the extent and in the manner
therein provided, into fully-paid and non-assessable Common Shares, or
other shares ranking junior to the Preferred Shares as to dividends
and in liquidation, of the corporation as may be stated in respect of
each series of Convertible Preferred Shares in any Governing
Provisions.
9. Amendments. The foregoing provisions as to the
----------
Preferred Shares generally shall have effect while any Preferred
Shares (other than shares held in treasury) shall remain outstanding
and the provisions relating to any particular series thereof shall
have effect while any shares of such series (other than shares held in
treasury) shall remain outstanding, and not otherwise, but said
provisions may be altered, amended or repealed or the application
thereof suspended or waived in any particular case and changes in the
designations, powers, preferences, and relative, participating,
optional and other special rights, and the qualifications,
limitations, and restrictions of the Preferred Shares or any series
thereof may be made as permitted by law, and in any event by the
affirmative vote, at a meeting duly called for the purpose of such
number of shares as may be provided in any Governing Provisions;
provided that the rights relative to each other only of any classes of
shares junior in respect of such rights to the Preferred Shares of any
series thereof from time to time existing may be fixed and varied
without consent of the Preferred Shares or such series thereof.
<PAGE>
10. Denial of Pre-emptive Rights. No holder of any shares
----------------------------
of the corporation of any class now or hereafter authorized shall have
any right as such holder (other than such
right, if any, as the Board of Directors in its discretion may
determine) to purchase, subscribe for or otherwise acquired any shares
of the corporation of any class now or hereafter authorized, or any
securities convertible into or exchangeable for any such shares, or
any warrants or other instruments evidencing rights or options to
subscribe for, purchase or otherwise acquire any such shares, whether
such shares, securities, warrants or other instruments be issued and
thereafter acquired by the corporation.
FOURTH: The city, incorporated village or town and the
------
county within the State of New York in which the office of the
corporation is located are as follows:
TOWN: Islip
----
COUNTY: Suffolk
------
FIFTH: The Secretary of State is designated as the agent of
-----
the corporation upon whom process against the corporation may be
served. The post office address within or without the State of New
York to which the Secretary of State shall mail a copy of any process
against the corporation served upon him is: 100 Spence Street, Bay
Shore, New York 11706.
SIXTH: Except as may otherwise be specifically provided in
-----
this Certificate of Incorporation, no provision of this Certificate of
Incorporation is intended by the corporation to be construed as
limiting, prohibiting, denying, or abrogating any of the
general or specific powers or rights conferred under the
Business Corporation Law upon the corporation, upon its shareholders,
bondholders, and security holders, and upon its directors, officers,
and other corporate personnel, including, in particular, the power of
the corporation to furnish indemnification to directors and officers
in the capacities defined and prescribed by the Business Corporation
Law and the defined and prescribed rights of said persons to
indemnification as the same are conferred by the Business Corporation
Law.
<PAGE>
SEVENTH: (a) The number of directors of the corporation
-------
shall be as from time to time provided by or pursuant to the By-Laws
of the corporation, but shall not be less than three. The Board of
Directors shall be classified, with respect to the time for which
directors shall hold office, into three classes, as determined by the
Board of Directors, each as nearly equal in number as possible. At
the 1987 annual meeting of the shareholders of the corporation, the
first such class of directors shall be elected for a term expiring
upon the next following annual meeting of shareholders and upon the
election and qualification of their respective successors, the second
such class of directors shall be elected for a term expiring upon the
second following annual meeting of shareholders and upon the election
and qualification of their respective successors, and
the third such class of directors shall be elected for a term expiring
upon the third following annual meeting of shareholders and upon the
election and qualification of their respective successors. At each
annual meeting of shareholders after the 1987 annual meeting,
directors of the class of directors whose term expires at such annual
meeting shall be elected for a term expiring upon the third following
annual meeting of shareholders and upon the election and qualification
of their respective successors. Whenever the number of directors
constituting the whole Board of Directors is changed, any increase or
decrease in the number of directors shall be apportioned by the Board
of Directors among the three classes so as to maintain all the classes
as equal in number as possible, and any additional directors
apportioned to a class shall hold office for a term which shall expire
with the term of the other directors of such class; provided, however,
that no decrease in the number of directors shall affect the term of
any director then in office.
<PAGE>
(b) Advance notice of nominations of the election of
directors shall be given in the manner and to the extent provided in
the By-Laws of the corporation.
(c) Newly created directorships resulting from any increase
in the number of directors constituting the entire Board of Directors,
and any vacancies on the Board of Directors
resulting from death, incapacity, resignation or removal of a
director, shall only be filled by the affirmative vote of a majority
of the remaining directors then in office, even though less than a
quorum of the Board of Directors, or by the sole remaining director
or, if no directors remain, by the shareholders of the corporation at
any special meeting called for that purpose. Any director elected to
fill a vacancy created by the death, incapacity, resignation or
removal of a director shall hold office for the remainder of the term
of that former director and thereafter until his successor shall have
been elected and qualified. Any director elected to fill a vacancy
caused by an increase in the size of the Board of Directors shall hold
office until the next annual meeting of shareholders and thereafter
until such director's successor shall have been elected and qualified.
EIGHTH: Any director may be removed from office (i) with
------
cause only by the affirmative vote of the holders of a majority of the
combined voting power of all then outstanding shares entitled to vote
in the election of directors, voting together as a single class, (ii)
without cause only by the affirmative vote of the holders of eighty
percent (80%) of the combined voting power of all then outstanding
shares entitled to vote in the election of directors, voting together
as a single class or (iii) with cause by the affirmative
vote of two-thirds of the members of the Board of Directors.
For purposes of this Article EIGHTH, "cause" shall mean the
willful failure of a director to perform in any substantial
respect such director's duties to the corporation
(other than any such failure resulting from incapacity due
to physical or mental illness), willful malfeasance by a director in
the performance of his duties to the corporation which is materially
and demonstrably injurious to the corporation, the commission by a
director of an act of fraud in the performance of his duties to the
corporation, the conviction of a director for a felony punishable by
confinement for a period in excess of one year, or the ineligibility
of a director for continuation in office under any applicable rules,
regulations or orders of any federal or state regulatory authority of
competent jurisdiction.
<PAGE>
NINTH: Any action required or permitted to be taken by the
-----
shareholders of the corporation must be effected at a duly called
annual or special meeting of shareholders of the corporation and may
not be effected by any consent in writing by such shareholders.
TENTH: Except as otherwise required by law, special
-----
meetings of shareholders of the corporation may be called only by the
Board of Directors pursuant to a resolution approved by a
majority of the entire Board of Directors or by such officers of the
corporation as may be authorized to so act by the By-Laws of the
corporation, and may not be called by any shareholder or shareholders
of the corporation.
ELEVENTH: Notwithstanding that no vote of shareholders may
--------
be required or that approval by a lesser percentage vote may be
permitted by law or by any other Article hereof or by the By-Laws of
the corporation or any agreement between the corporation and any
national securities exchange or otherwise, no Business Combination (as
hereinafter defined) shall be effected unless approved by vote of the
shareholders of the corporation as required by this Article ELEVENTH.
(a) In addition to any affirmative vote required by law or
any other provision of the Certificate of Incorporation and except as
otherwise expressly provided in paragraph (b) of this Article
ELEVENTH, each of the following transactions by or in respect of the
corporation shall require the approval of the shareholders of the
corporation by the affirmative vote of the holders of at least eighty
percent (80%) of the combined voting power of the outstanding Voting
Shares (as hereinafter defined) and by the affirmative vote of the
holders of a least sixty-seven percent (67%) of the combined voting
power of the outstanding Voting Shares held by Disinterested
Shareholders (as hereinafter defined):
<PAGE>
(1) any merger or consolidation of the corporation
with (i) any corporation which is an Interested Shareholder (as
hereinafter defined) or (ii) any other corporation which after
such merger or consolidation would be an Interested Shareholder
or an Affiliate (as hereinafter defined) of an Interested
Shareholder; or
(2) any sale, lease, exchange, mortgage, pledge,
transfer or other disposition (in one transaction or a series of
related transactions) to or with any Interested Shareholder of
(i) all or substantially all the assets of the corporation or
(ii) assets of the corporation or any Subsidiary (as hereinafter
defined) or Subsidiaries having in the aggregate a Fair Market
Value (as hereinafter defined) as of the Announcement Date (as
hereinafter defined) in an amount which is more than 20% of the
total value of the assets of the corporation and its consolidated
subsidiaries as reflected on the then most recent Balance Sheet
(as hereinafter defined) of the corporation; or
<PAGE>
(3) any merger of consolidation of any Subsidiary or
Subsidiaries having in the aggregate assets with a Fair Market
Value as of the Announcement Date in an amount which
is more than 20% of the total value of the assets of the
corporation and its consolidated subsidiaries as reflected on the
Balance Sheet of the corporation with (i) any corporation that is
an Interested Shareholder or (ii) any other corporation which
after such merger or consolidation would be an Interested
Shareholder or an Affiliate of an Interested Shareholder; or
(4) the issuance or transfer by the corporation or any
Subsidiary (in one transaction or a series of related
transactions) to any Interested Shareholder of any securities of
the corporation or any Subsidiary in exchange for cash,
securities or other property (or a combination thereof) having an
aggregate Fair Market Value as of the Announcement Date of
$25,000,000 or more, other than the issuance of securities upon
the conversion or exchange of securities of the corporation or in
exchange for securities of any Subsidiary that were acquired by
an Interested Shareholder from the corporation or a Subsidiary in
a Business Combination (as hereinafter defined) that was approved
by a vote of the shareholders pursuant to this Article ELEVENTH;
or
<PAGE>
(5) the adoption of any plan or proposal for the
liquidation or dissolution of the corporation proposed by or on
behalf of any Interested Shareholder; or
(6) any reclassification of any securities of the
corporation (including any reverse share split), any
recapitalization of the capital shares of the corporation, any
merger of consolidation of the corporation with or into any of
its Subsidiaries, or any other transaction (whether or not with
or involving any Interested Shareholder), which has the effect,
directly or indirectly, of increasing the proportion of the
outstanding shares of any class or series thereof of the
corporation or of any Subsidiary directly or indirectly
Beneficially Owned (as hereinafter defined) by any Interested
Shareholder or as a result of which the successor corporation (or
trust) would not have as part of its certificate or articles of
incorporation (or similarly constitutive documents) provisions to
the same effect as this Article ELEVENTH and the provision of
Article TWELFTH hereof relating to the amendment of this Article
ELEVENTH.
The term "Business Combination" as used in this Article ELEVENTH
shall mean any transaction or proposed transaction that is
referred to in any one or more of the foregoing
subparagraphs (1) through (6) of this paragraph (a) of this
Article ELEVENTH.
<PAGE>
(b) The provisions of paragraph (a) of this Article
ELEVENTH shall not be applicable to any particular Business
Combination, and such Business Combination shall require only such
vote of shareholders, if any, as is required by law and any other
Article hereof or the By-Laws of the corporation or any agreement
between the corporation and any national securities exchange or
otherwise, if such Business Combination shall have been approved by a
majority of the Disinterested Directors (as hereinafter defined) at
the time or if all the conditions specified in each of the following
subparagraphs (1), (2), (3) and (4) are satisfied:
(1) the transaction constituting the Business
Combination shall provide for a consideration per share to be
received by all holders of Common Shares in exchange for all of
their Common Shares, and the aggregate amount of the cash and the
Fair Market Value as of the date of the consummation of the
Business Combination of any consideration other than cash to be
received per share by holders of Common Shares in such Business
Combination, shall be at least equal to the highest of the
following:
<PAGE>
(i) if the Announcement Date of such Business
Combination is within three years of the Determination Date
(as hereinafter defined) in respect of the Interested
Shareholder involved in such Business Combination, the
higher, if applicable, of (A) the highest per share price
(including any brokerage commissions, transfer taxes and
soliciting dealers' fees) paid by such Interested
Shareholder for any Common Shares that are or were at any
time within such three-year period Beneficially Owned by
such Interested Shareholder and acquired by it at any time
within such three year period or (B) the price per share
equal to the Fair Market Value per Common Share on the
Announcement Date of such Business Combination multiplied by
the ratio of (x) the price determined pursuant to the
foregoing clause (A) to (y) the average Fair Market Value
per Common Share during the 90 day period prior to the
Determination Date in respect of such Interested
Shareholder, or
(ii) the average Fair Market Value of a Common
Share during the period of 90 days prior to the Announcement
Date of such Business Combination; provided, however, that
the prices referred to in the foregoing clauses (i)(A),
(i) (B)(x) and (ii) of this subparagraph (1) shall be adjusted
fairly to reflect any share dividend, share split,
reverse share split, combination of shares, recapitalization,
reorganization or similar event effecting the number of Common
Shares outstanding and the market price per share of outstanding
Common Shares that has occurred after the date as of which
such price is determined; and
(2) the holders of Common Shares shall have the right,
at the option of each such holder, to receive payment of the
consideration to be received by holders of Common Shares in
connection with such Business Combination in cash or in the same
type of consideration used by the Interested Shareholder involved
in such Business Combination within the three-year period
immediately prior to the Announcement Date in acquiring the
largest portion of the Common Shares, or any other class or
series of Voting Shares, acquired by such Interested Shareholder
during such three-year period if such consideration were not
cash; and
<PAGE>
(3) after the Determination Date in respect of the
Interested Shareholder involved in such Business Combination and
prior to the consummation of such Business Combination:
(i) except as approved by a majority of the
Disinterested Directors, there shall have been no failure to
declare and have available for payment at the regular dates
therefor the full amount of any dividends (whether or not
cumulative) accrued on any series of Preferred Shares or any
other class of shares or series thereof having a preference
over the Common shares as to dividends; and
(ii) there shall have been (A) no reduction in the
annual rate of dividends paid on the Common Shares (except
as necessary to reflect any split or subdivision of the
Common Shares), except as approved by a majority of the
Disinterested Directors, and (B) an increase in such annual
rate of dividends (as necessary to prevent any such
reduction) in the event of any reclassification (including
any reverse share split or combination of shares),
recapitalization, reorganization or any similar transaction
which has the effect of reducing the number of outstanding
Common Shares, unless the failure so to increase such annual
rate is approved by a majority of the Disinterested
Directors; and
<PAGE>
(4) after the Determination Date in respect of the
Interested Shareholder involved in such Business Combination,
such Interested Shareholder shall not have received the benefit,
directly or indirectly (except as a shareholder of the
corporation, in proportion to its shareholding), of any loans,
advances, guarantees or similar financial assistance
(collectively, "Financial Assistance") provided by the
corporation, whether in anticipation of or in connection with
such Business Combination or otherwise, unless the transaction
constituting the Business Combination shall provide for a
consideration to be received by the holders of Common Shares in
exchange for all of their Common Shares in an amount equal to the
amount required under the foregoing subparagraph (1) plus the
total amount of the Fair Market Value of all such Financial
Assistance; and
(5) a proxy or information statement describing the
proposed Business Combination and complying with the requirements
of the Securities Exchange Act of 1934, as amended, and the rules
and regulations thereunder (or any subsequent provisions
replacing such Act, rules or regulations) shall, at the
corporation's expense, be mailed to shareholders of the
corporation at least 30 days prior to the consummation of such
Business Combination (whether or
not such proxy or information statement is required to be mailed
pursuant to such Act, rules or regulations or subsequent
provisions), and the Disinterested Directors if there are any at
the time, shall have been provided a reasonable opportunity to
state their views therein with respect to such proposed Business
Combination and to include therewith an opinion of an independent
investment banker selected by the Disinterested Directors with
respect to such Business Combination.
<PAGE>
(c) For the purposes of this Article ELEVENTH:
(1) a "person" shall mean any individual, firm,
corporation, business or employee benefit trust, other trust,
partnership, joint venture, association or other entity.
(2) "Interested Shareholder" shall mean any person,
other than the corporation, any Subsidiary or any employee
benefit plan of the corporation or any Subsidiary which employee
benefit plan has been approved by a majority of the Disinterested
Directors, who or which:
(i) is the Beneficial Owner, directly or
indirectly, of Voting Shares that are entitled to cast 10%
or more of the total votes that all of the then outstanding
Voting Shares are entitled to cast in the
election of directors or is an Affiliate or Associate of any
such person or any predecessor thereto, or
(ii) acts with any other person as a partnership,
limited partnership, syndicate, or other group for the
purpose of acquiring, holding or disposing of securities of
the corporation, and such group is the Beneficial Owner,
directly or indirectly, of Voting Shares that are entitled
to cast 10% or more of the total votes which all of the then
outstanding Voting Shares are entitled to cast in the
election of directors, and any reference to a particular
Interested Shareholder involved in a Business Combination
shall also refer to any Affiliate or Associate thereof, any
predecessor thereto and any other person acting as a member
of a partnership, limited partnership, syndicate or group
with such particular Interested Shareholder within the
meaning of the foregoing clause (ii) of this subparagraph
(2).
<PAGE>
(3) A "Disinterested Shareholder" is any shareholder
who or which is not an Interested Shareholder.
(4) A person shall be a "Beneficial Owner" of, or have
"Beneficial Ownership" of, or "Beneficially Own," any Voting
Shares over which such person or any of its
Affiliates or Associates, directly or indirectly, through any
contract, arrangement, understanding or relationship has or
shares or, upon the exercise of any conversion rights, exchange
rights, warrants, options or similar interests (whether or not
exercisable), would have or share, either (i) voting power
(including the power to vote or to direct the voting) of such
security or (ii) investment power (including the power to dispose
or direct the disposition) of such security. For the purposes of
determining whether a person is an Interested Shareholder, the
number of Voting Shares deemed to be outstanding shall include
any shares Beneficially Owned by such person even though not
actually outstanding, but shall not include any Voting Shares
that are not outstanding but which may be issuable to other
persons pursuant to any agreement, arrangement or understanding,
or upon exercise of conversion rights, exchange rights, warrants
or options, or otherwise.
<PAGE>
(5) an "Affiliate" of a person shall mean any person
who, directly or indirectly, controls, is controlled by or is
under common control with such person.
(6) An "Associate" means (i) with respect to a
corporation or association, any officer or director thereof or of
a subsidiary thereof, (ii) with respect to a
partnership, any general partner thereof or any limited partner
thereof having a 10% ownership interest in such partnership,
(iii) with respect to a business or employee benefit trust, any
officer or trustee thereof or of any subsidiary thereof, (iv)
with respect to any other trust or an estate, any trustee,
executor or similar fiduciary and any person who has a
substantial interest as beneficiary of such trust or estate, (v)
with respect to a natural person, the spouse and children thereof
and any other relative thereof or of the spouse thereof who has
the same home, and (vi) any Affiliate of any such person.
(7) "Announcement Date" with respect to any Business
Combination means the date on which the proposal of such Business
Combination is first publicly announced.
(8) "Determination Date" in respect of an Interested
Shareholder means the date on which such Interested Shareholder
first became an Interested Shareholder.
(9) "Subsidiary" means any corporation of which a
majority of any class of its equity securities is owned, directly
or indirectly, by the corporation.
<PAGE>
(10) "Disinterested Director" with respect to a
Business Combination means any member of the Board of
Directors of the corporation who is not an Affiliate or Associate
of, and was not directly or indirectly a nominee of, any
Interested Shareholder involved in such Business Combination or
any Affiliate or Associate of such Interested Shareholder and who
either (i) was a member of the Board of Directors prior to the
time that such Interested Shareholder became an Interested
Shareholder or (ii) is a successor of a Disinterested Director
and was nominated to succeed a Disinterested Director by a
majority of the Disinterested Directors on the Board of Directors
at the time of his nomination. Any reference to "Disinterested
Directors" shall refer to a single disinterested Director if
there be but one.
(11) "Fair Market Value" as of any particular date
means: (i) in the case of shares that are traded on any
securities exchange or in the over-the-counter market, the
average for the trading days during the thirty-day period
immediately preceding the date in question of the closing sale
price of such shares on the New York Stock Exchange Composite
Tape, or, if such shares are not quoted on the Composite Tape, on
the New York Stock Exchange, or, if such shares are not listed on
such Exchange, on the principal United States securities exchange
registered under the
<PAGE>
Securities Exchange Act of 1934, as amended, on which such shares
are listed, or, if such shares are not listed on any such
exchange, of the last sales price at 4:00 p.m. reported in the
Consolidated Transaction Reporting System (as hereinafter
defined), or, if such a price is not so reported, the average of
the highest reported bid and the lowest reported asked quotations
for a share furnished by the National Association of Securities
Dealers Automated Quotation System or any successor quotation
reporting system or, if quotations are not available in such
system, as furnished by the National Quotation Bureau
Incorporated or any similar organization furnishing quotations
and, if no such quotations are available, the fair market value
on the date in question of a share as determined by a majority of
the Disinterested Directors in good faith and (ii) in the case of
shares of any class or series that are not traded on any
securities exchange or in the over-the-counter market or in the
case of property other than cash or shares or in the case of
Financial Assistance, the fair market value of such shares,
property or Financial Assistance, as the case may be, on the date
in question as determined by a majority of the Disinterested
Directors in good faith.
(12) "Consolidated Transaction Reporting System" means
the system of reporting securities information operated under the
authority of Rule 11Aa3-1 under the Securities Exchange Act of
1934, as amended, as such rule may from time to time be amended,
and any successor rule or rules.
(13) "Balance Sheet" as of any particular time means
the most recent, publicly available consolidated balance sheet of
the corporation and its consolidated subsidiaries audited by the
corporation's independent public accountants.
(14) "Voting Shares" means outstanding shares of the
corporation that are entitled to vote generally in the election
of directors.
(d) A majority of the Disinterested Directors shall have
the power and duty to determine, on the basis of information known to
them after reasonable inquiry, all facts necessary to determine
compliance with this Article ELEVENTH, including, without limitation:
(i) whether a person is an Interested Shareholder, (ii) the number of
Voting Shares Beneficially Owned by any person, (iii) whether a person
is an Affiliate or Associate of another person, (iv) Whether the
requirements of paragraph (b) of this Article ELEVENTH have been met
with respect
<PAGE>
to any Business Combination, (v) whether two or more transactions
constitute a "series of related transactions" for purposes of
paragraph (a) of this Article ELEVENTH; and (vi) whether the assets
that are the subject of any Business Combination have, or the
consideration to be received for the issuance or transfer of
securities by the corporation or any Subsidiary in any Business
Combination, (A) has an aggregate Fair Market Value of $25,000,000 or
more or (B) represents in the aggregate more than 20% of the total
value of the assets of the corporation and its consolidated
subsidiaries. The good faith determination of a majority of the
Disinterested Directors on such matters shall be conclusive and
binding for all purposes of this Article ELEVENTH.
(e) Nothing contained in this ARTICLE ELEVENTH shall be
construed to relieve any Interested Shareholder from any fiduciary
obligation imposed by law.
TWELFTH: Notwithstanding that approval by a lesser
-------
percentage vote may be permitted by law or by any other Article hereof
or by the By-Laws of the corporation, no provisions shall be adopted,
amended or repealed that would in any manner be inconsistent with this
ARTICLE TWELFTH and ARTICLES SEVENTH, EIGHTH, NINTH, TENTH and
ELEVENTH, concerning i) a classified Board of Directors, ii) removal
of directors, iii) vacancies on the Board of Directors, iv) fair price
for certain business
<PAGE>
combinations, v) the manner in which actions by shareholders shall be
accomplished and vi) the manner in which special meetings of
shareholders may be called, without the affirmative vote of the
holders of eighty percent (80%) of the combined voting power of all
then outstanding shares entitled to vote thereon. Furthermore, no
provisions shall be adopted, amended or repealed that would in any
manner be inconsistent with ARTICLE ELEVENTH without the affirmative
vote of the holders of sixty-seven percent (67%) if the combined
voting power of all Disinterested Shareholders, as defined in such
Article.
THIRTEENTH: A director shall not be personally liable to
----------
the Corporation or its shareholders for damages for any breach of duty
as a director, except for any such liability arising by reason that,
in addition to any and all other requirements for such liability,
there shall have been a judgment or other final adjudication adverse
to the director that establishes that his acts or omissions were in
bad faith or involved intentional misconduct or a knowing violation of
law or that he personally gained in fact a financial profit or other
advantage to which he was not legally entitled or that his acts
violated Section 719 of the New York Business Corporation Law.
Neither the amendment nor repeal of this Article nor the adoption of
any inconsistent provision of the certificate of incorporation shall
eliminate or reduce the effect of this Article
with respect to any matter occurring, or any cause of
action, suit or claim that but for this Article would
accrue or arise, prior to such amendment, repeal or
adoption of an inconsistent provision. This Article shall neither
eliminate nor limit the liability of a director for any act or
omission occurring prior to the adoption of this Article.
FOURTH: This restatement of the Certificate of
------
Incorporation of the Corporation was authorized by the affirmative
vote of the Board of Directors of the Corporation.
<PAGE>
IN WITNESS WHEREOF, the undersigned have caused this
Restated Certificate of Incorporation to be executed as of this 20th
day of May, 1988 and do hereby affirm under the penalties of perjury
that the statements contained herein are true and correct.
/s/ Lawrence N. Cohen
--------------------------------
Lawrence N. Cohen
President
/s/ Robert McNally
--------------------------------
Robert McNally
Secretary
NYFS10...:\80\60380\0001\1196\RID8036R.270
EXHIBIT 3(a).(2)
CERTIFICATE OF AMENDMENT
OF THE
CERTIFICATE OF INCORPORATION
OF
LUMEX, INC.
Under Section 805 of the Business Corporation Law
-------------------------------------------------
WE, THE UNDERSIGNED, Lawrence N. Cohen and Robert McNally,
being respectively the President and the Secretary of Lumex, Inc., do
hereby certify:
FIRST: The name of the Corporation is Lumex, Inc.
-----
(hereinafter referred to as the "Corporation").
SECOND: The Certificate of Incorporation was filed with the
------
Department of State of New York on September 11, 1953.
THIRD: The Certificate of Incorporation of the Corporation
-----
is hereby amended by adding the following provision, which was
authorized by the affirmative vote of the Board of Directors of the
Corporation, regarding the number, designation, preferences and
limitations of a new series of preferred shares of the Corporation:
Section 1. Designation and Amount. The shares of such
--------- ----------------------
series shall be designated as "Series A Preferred Shares" (the "Series
A Preferred Shares") and the number of shares constituting such series
shall be Fifty Thousand (50,000).
Section 2. Dividends and Distributions.
--------- ---------------------------
(A) Subject to the provisions for adjustment hereinafter
set forth, the holders of shares of Series A
<PAGE>
Preferred Shares shall be entitled to receive, when, as and if
declared by the Board of Directors out of funds legally available for
the purpose, (i) cash dividends in an amount per share (rounded to the
nearest cent) equal to one hundred (100) times the aggregate per share
amount of all cash dividends declared or paid on the Common Shares,
$.10 par value per share of the Company (the "Common Shares"), and
(ii) a preferential cash dividend (the "Preferential Dividends"), if
any, on the last business day of April, July, October and December of
each year (each a "Quarterly Dividend Payment Date"), commencing on
the first Quarterly Dividend Payment Date after the first issuance of
a share or fraction of a Series A Preferred Share in an amount equal
to $2.00 per Series A Preferred Share reduced (but not to an amount
less than zero) by the per share amount of all cash dividends declared
on the Series A Preferred Shares pursuant to clause (i) of this
sentence since the immediately preceding Quarterly Dividend Payment
Date or, with respect to the first Quarterly Dividend Payment Date,
since the first issuance of any share or fraction of a share of Series
A Preferred Share. In the event the Company shall, at any time after
the issuance of any Series A Preferred Share or fraction thereof, make
any distribution on the Common Shares, whether by way of a dividend or
a reclassification of stock, a recapitalization, reorganization or
partial liquidation of the Company or otherwise, which is payable in
cash or any debt security, debt
<PAGE>
instrument, real or personal property or any other property (other
than cash dividends subject to the immediately preceding sentence, a
distribution of Common Shares or other capital stock of the Company or
a distribution of rights or warrants to acquire any such share,
including any debt security convertible into or exchangeable for any
such share, at a price less than the Fair Market Value (as hereinafter
defined) of such share), then and in each such event the Company shall
simultaneously pay on each then outstanding Series A Preferred Share a
distribution, in like kind, of one hundred (100) times such
distribution paid on a Common Share (subject to the provisions for
adjustment hereinafter set forth). The dividends and distributions on
the Series A Preferred Shares to which holders thereof are entitled
pursuant to clause (i) of the first sentence of this paragraph and
pursuant to the second sentence of this paragraph are hereinafter
referred to as "Participating Dividends" and the multiple of such cash
and non-cash dividends on the Common Shares applicable to the
determination of the Participating Dividends, which shall be one
hundred (100) initially but shall be adjusted from time to time as
hereinafter provided, is hereinafter referred to as the "Dividend
Multiple". In the event the Company shall at any time after May 25,
1988 declare or pay any dividend or make any distribution on Common
Shares payable in Common Shares or any class or series thereof, or
effect a subdivision or split or a combination, consolidation or
reverse split of the
<PAGE>
outstanding Common Shares into a greater or lesser number of Common
Shares, then in each such case the Dividend Multiple thereafter
applicable to the determination of the amount of Participating
Dividends which holders of Series A Preferred Shares shall be entitled
to receive shall be the Dividend Multiple applicable immediately prior
to such event multiplied by a fraction the numerator of which is the
number of Common Shares outstanding immediately after such event and
the denominator of which is the number of Common Shares that were
outstanding immediately prior to such event.
(B) The Company shall declare each Participating Dividend
at the same time it declares any cash or non-cash dividend or
distribution on the Common Shares in respect of which a Participating
Dividend is required to be paid. No cash or non-cash dividend or
distribution on the Common Shares in respect of which a Participating
Dividend is required to be paid shall be paid or set aside for payment
on the Common Shares unless a Participating Dividend in respect of
such dividend or distribution on the Common Shares shall be
simultaneously paid, or set aside for payment, on the Series A
Preferred Shares.
(C) Preferential Dividends shall begin to accrue on
outstanding Series A Preferred Shares commencing with the Quarterly
Dividend Payment Date next following the date of issuance of any
Series A Preferred Shares and shall accrue on and as of such date and
each successive Quarterly Dividend Payment
<PAGE>
Date thereafter. Accrued but unpaid Preferential Dividends shall
cumulate but shall not bear interest. Preferential Dividends paid on
the Series A Preferred Shares in an amount less than the total amount
of such dividends at the time accrued and payable on such shares shall
be allocated pro rata on a share-by-share basis among all such shares
at the time outstanding.
Section 3. Voting Rights. The holders of Series A
--------- -------------
Preferred Shares shall have the following voting rights:
(A) Subject to the provisions for adjustment hereinafter
set forth, each Series A Preferred Share shall entitle the holder
thereof to one vote on all matters submitted to a vote of the
shareholders of the Company. The number of votes which a holder of
Series A Preferred Shares is entitled to cast, as the same may be
adjusted from time to time as hereinafter provided, is hereinafter
referred to as the "Vote Multiple." In the event the Company shall at
any time after May 25, 1988 declare or pay any dividend on Common
Shares payable in Common Shares, or effect a subdivision or split or a
combination, consolidation or reverse split of the outstanding Common
Shares into a greater or lesser number of Common Shares, then in each
such case the Vote Multiple thereafter applicable to the determination
of the number of votes per share to which holders of Series A
Preferred Shares shall be entitled after such event shall be the Vote
Multiple immediately prior to such event multiplied by a fraction the
numerator of which is the number of
<PAGE>
Common Shares outstanding immediately after such event and the
denominator of which is the number of Common Shares that were
outstanding immediately prior to such event.
(B) Except as otherwise provided herein, or by law, the
Certificate of Incorporation or the By-laws, the holders of Series A
Preferred Shares and the holders of Common Shares shall vote together
as one class on all matters submitted to a vote of shareholders of the
Company.
(C) In the event that the Preferential Dividends accrued on
the Series A Preferred Shares for six or more quarterly dividend
periods, whether consecutive or not, shall not have been declared and
paid or set apart for payment, the holders of record of the Series A
Preferred Shares and each series of Preferred Shares of the Company
then entitled to vote on the election of such directors shall have the
right, at the next meeting of shareholders called for the election of
directors, to elect two members to the Board of Directors, which
directors shall be in addition to the number required by the By-laws
prior to such event, to serve until the next Annual Meeting and until
their successors are elected and qualified or their earlier
resignation, removal or incapacity or until such earlier time as all
accrued and unpaid Preferential Dividends upon the outstanding Series
A Preferred Shares shall have been paid (or set aside for payment) in
full. The holders of Series A Preferred Shares shall continue to have
the right to elect
<PAGE>
directors as provided by the immediately preceding sentence until all
accrued and unpaid Preferential Dividends upon the outstanding Series
A Preferred Shares shall have been paid (or set aside for payment) in
full. Such directors may be removed and replaced by such
shareholders, and vacancies in such directorships may be filled only
by such shareholders (or by the remaining director elected by such
shareholders, if there be one) in the manner permitted by law;
provided, however, that any such action by shareholders shall be taken
at a meeting of shareholders and shall not be taken by written consent
thereto.
(D) Except as otherwise set forth herein or required by
law, the Certificate of Incorporation or the By-laws, holders of
Series A Preferred Shares shall have no special voting rights and
their consent shall not be required (except to the extent they are
entitled to vote with holders of Common Shares as set forth herein)
for the taking of any corporate action.
Section 4. Certain Restrictions.
--------- --------------------
(A) Whenever Preferential Dividends or Participating
Dividends are in arrears or the Company shall be in default of payment
thereof, thereafter and until all accrued and unpaid Preferential
Dividends and Participating Dividends, whether or not declared, on
Series A Preferred Shares outstanding shall have been paid or set
aside for payment in full, and in addition to any and all other rights
which any holder of Series A Preferred Shares may have in such
circumstances, the Company shall not:
<PAGE>
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire for
consideration, any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Series A Preferred Shares;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity as to
dividends with the Series A Preferred Shares, unless dividends
are paid ratably on the Series A Preferred Shares and all such
parity stock on which dividends are payable or in arrears in
proportion to the total amounts to which the holders of all such
shares are then entitled if the full dividends accrued thereon
were to be paid;
(iii) except as permitted by subparagraph (iv) of this
paragraph 4(A), redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either as
to dividends or upon liquidation, dissolution or winding up) with
the Series A Preferred Shares, provided that the Company may at
any time redeem, purchase or otherwise acquire shares of any such
parity stock in exchange for shares of any stock of the Company
ranking junior (both as to dividends and upon liquidation,
dissolution or winding up) to the Series A Preferred Shares; or
<PAGE>
(iv) purchase or otherwise acquire for consideration
any Series A Preferred Shares, or any shares of capital stock
ranking on a parity with the Series A Preferred Shares (either as
to dividends or upon liquidation, dissolution or winding up),
except in accordance with a purchase offer made to all holders of
such shares upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates and other
relative rights and preferences of the respective series and
classes, shall determine in good faith will result in fair and
equitable treatment among the respective series or classes.
(B) The Company shall not permit any Subsidiary (as
hereinafter defined) of the Company to purchase or otherwise acquire
for consideration any shares of stock of the Company unless the
Company could, under paragraph (A) of this Section 4, purchase or
otherwise acquire such shares at such time and in such manner. A
"Subsidiary" of the Company shall mean any corporation or other entity
of which securities or other ownership interests having ordinary
voting power sufficient to elect a majority of the board of directors
or other persons performing similar functions are beneficially owned,
directly or indirectly, by the Company or by any corporation or other
entity that is otherwise controlled by the Company.
<PAGE>
(C) The Company shall not issue any Series A Preferred
Shares except upon exercise of Rights issued pursuant to that certain
Rights Agreement dated as of May 23, 1988 between the Company and
Registrar & Transfer Company, as Rights Agent, a copy of which is on
file with the Secretary of the Company at its principal executive
office and shall be made available to shareholders of record without
charge upon written request therefor addressed to said Secretary.
Notwithstanding the foregoing sentence, nothing contained in the
provisions hereof shall prohibit or restrict the Company from issuing
for any purpose any series of Preferred Shares with rights and
privileges similar to, different from, or greater than, those of the
Series A Preferred Shares.
Section 5. Reacquired Shares. Any Series A Preferred
--------- -----------------
Shares purchased or otherwise acquired by the Company in any manner
whatsoever shall be retired and cancelled promptly after the
acquisition thereof. All such shares upon their retirement and
cancellation shall become authorized but unissued Preferred Shares,
without designation as to series, and such shares may be reissued as
part of a new series of Preferred Shares to be created by resolution
or resolutions of the Board of Directors.
Section 6. Liquidation, Dissolution or Winding Up. Upon
--------- --------------------------------------
any voluntary or involuntary liquidation, dissolution or winding up of
the Company, no distribution shall be made (i) to the holders of
shares of stock ranking junior (either as to
<PAGE>
dividends or upon liquidation, dissolution or winding up) to the
Series A Preferred Shares unless the holders of Series A Preferred
Shares shall have received, subject to adjustment as hereinafter
provided, (A) $60.00 per share plus an amount equal to accrued and
unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment, or (B) if greater than the amount
specified in clause (i)(A) of this sentence, an amount equal to one
hundred (100) times the aggregate amount to be distributed per share
to holders of Common Shares, as the same may be adjusted as
hereinafter provided, and (ii) to the holders of shares ranking on a
parity upon liquidation, dissolution or winding up with the Series A
Preferred Shares, unless simultaneously therewith distributions are
made ratably on the Series A Preferred Shares and all other shares of
such parity stock in proportion to the total amounts to which the
holders of Series A Preferred Shares are entitled under clause (i)(A)
of this sentence and to which the holders of such parity shares are
entitled, in each case upon such liquidation, dissolution or winding
up. The amount to which holders of Series A Preferred Shares may be
entitled upon liquidation, dissolution or winding up of the Company
pursuant to clause (i)(B) of the foregoing sentence is hereinafter
referred to as the "Participating Liquidation Amount" and the multiple
of the amount to be distributed to holders of Common Shares upon the
liquidation, dissolution or winding up of the Company applicable,
<PAGE>
pursuant to said clause, to the determination of the Participating
Liquidation Amount, as said multiple may be adjusted from time to time
as hereinafter provided, is hereinafter referred to as the
"Liquidation Multiple". In the event the Company shall at any time
after May 25, 1988 declare or pay any dividend on Common Shares
payable in Common Shares or any class or series thereof, or effect a
subdivision or split or a combination, consolidation or reverse split
of the outstanding Common Shares into a greater or lesser number of
Common Shares, then in each such case the Liquidation Multiple
thereafter applicable to the determination of the Participating
Liquidation Amount to which holders of Series A Preferred Shares shall
be entitled after such event shall be the Liquidation Multiple
applicable immediately prior to such event multiplied by a fraction
the numerator of which is the number of Common Shares outstanding
immediately after such event and the denominator of which is the
number of Common Shares that were outstanding immediately prior to
such event.
Section 7. Certain Reclassifications and Other Events.
--------- ------------------------------------------
(A) In the event that holders of Common Shares receive
after May 25, 1988 in respect of their Common Shares any share of
capital stock of the Company (other than any share of capital stock of
the Company of the same class and series as such outstanding Common
Shares), whether by way of reclassification, recapitalization,
reorganization, dividend or other distribution
<PAGE>
or otherwise (a "Transaction"), then and in each such event the
dividend rights, voting rights and rights upon the liquidation,
dissolution or winding up of the Company of the Series A Preferred
Shares shall be adjusted so that after such event the holders of
Series A Preferred Shares shall be entitled, in respect of each Series
A Preferred Share held, in addition to such rights in respect thereof
to which such holder was entitled immediately prior to such
adjustment, to (i) such additional dividends as equal the Dividend
Multiple in effect immediately prior to such Transaction multiplied by
the additional dividends which the holder of a Common Share shall be
entitled to receive by virtue of the receipt in the Transaction of
such capital stock; (ii) such additional voting rights as equal the
Vote Multiple in effect immediately prior to such Transaction
multiplied by the additional voting rights which the holder of a
Common Share shall be entitled to receive by virtue of the receipt in
the Transaction of such capital stock; and (iii) such additional
distributions upon liquidation, dissolution or winding up of the
Company as equal the Liquidation Multiple in effect immediately prior
to such Transaction multiplied by the additional amount which the
holder of a Common Share shall be entitled to receive upon
liquidation, dissolution or winding up of the Company by virtue of the
receipt in the Transaction of such capital stock, as the case may be,
all as provided by the terms of such capital stock.
<PAGE>
(B) In the event that holders of Common Shares receive
after May 25, 1988 in respect of their Common Shares any right or
warrant to purchase Common Shares (including as such a right, for all
purposes of this paragraph, any security convertible into or
exchangeable for Common Shares) at a purchase price per share less
than the Fair Market Value of a Common Share on the date of issuance
of such right or warrant, then and in each such event the dividend
rights, voting rights and rights upon the liquidation, dissolution or
winding up of the Company of the Series A Preferred Shares shall each
be adjusted so that after such event the Dividend Multiple, the Vote
Multiple and the Liquidation Multiple shall each be the product of the
Dividend Multiple, the Vote Multiple and the Liquidation Multiple, as
the case may be, in effect immediately prior to such event multiplied
by a fraction the numerator of which shall be the number of Common
Shares outstanding immediately before such issuance of rights or
warrants plus the maximum number of Common Shares which could be
acquired upon exercise in full of all such rights or warrants and the
denominator of which shall be the number of Common Shares outstanding
immediately before such issuance of rights or warrants plus the number
of Common Shares which could be purchased, at the Fair Market Value of
the Common Shares at the time of such issuance, by the maximum
aggregate consideration payable upon exercise in full of all such
rights or warrants.
<PAGE>
(C) In the event that holders of Common Shares receive
after May 25, 1988 in respect of their Common Shares any right or
warrant to purchase capital stock of the Company (other than Common
Shares of any class or series), including as such a right, for all
purposes of this paragraph, any security convertible into or
exchangeable for capital stock of the Company (other than Common
Shares of any class or series), at a purchase price per share less
than the Fair Market Value of such shares of capital stock on the date
of issuance of such right or warrant, then and in each such event the
dividend rights, voting rights and rights upon liquidation,
dissolution or winding up of the Company of the Series A Preferred
Shares shall each be adjusted so that after such event each holder of
a Series A Preferred Share shall be entitled, in respect of each
Series A Preferred Share held, in addition to such rights in respect
thereof to which such holder was entitled immediately prior to such
event, to receive (i) such additional dividends as equal the Dividend
Multiple in effect immediately prior to such event multiplied, first,
by the additional dividends to which the holder of a Common Share
shall be entitled upon exercise of such right or warrant by virtue of
the capital stock which could be acquired upon such exercise and
multiplied again by the Discount Fraction (as hereinafter defined);
(ii) such additional voting rights as equal the Vote Multiple in
effect immediately prior to such event multiplied, first, by the
additional voting rights to which the holder of a
<PAGE>
Common Share shall be entitled upon exercise of such right or warrant
by virtue of the capital stock which could be acquired upon such
exercise and multiplied again by the Discount Fraction; and (iii) such
additional distributions upon liquidation, dissolution or winding up
of the Company as equal the Liquidation Multiple in effect immediately
prior to such event multiplied, first, by the additional amount which
the holder of a Common Share shall be entitled to receive upon
liquidation, dissolution or winding up of the Company upon exercise of
such right or warrant by virtue of the capital stock which could be
acquired upon such exercise and multiplied again by the Discount
Fraction. For purposes of this paragraph, the "Discount Fraction"
shall be a fraction the numerator of which shall be the difference
between the Fair Market Value of a share of the capital stock subject
to a right or warrant distributed to holders of Common Shares as
contemplated by this paragraph immediately after the distribution
thereof and the purchase price per share for such shares of capital
stock pursuant to such right or warrant and the denominator of which
shall be the Fair Market Value of a share of such capital stock
immediately after the distribution of such right or warrant.
(D) For purposes hereof, the "Fair Market Value" of a share
of capital stock of the Company (including a Common Share) on any date
shall be deemed to be the average of the daily closing price per share
thereof over the 30 consecutive Trading
<PAGE>
Days (as such term is hereinafter defined) immediately prior to such
date; provided, however, that, in the event that such Fair Market
Value of any such share of capital stock is determined during a period
which includes any date that is within 30 Trading Days after (i) the
ex-dividend date for a dividend or distribution on stock payable in
shares of such stock or securities convertible into shares of such
stock, or (ii) the effective date of any subdivision, split,
combination, consolidation, reverse stock split or reclassification of
such stock, then, and in each such case, the Fair Market Value shall
be appropriately adjusted by the Board of Directors of the Company to
take into account ex-dividend or post-effective date trading. The
closing price for any day shall be the last sale price, regular way,
or, in case no such sale takes place on such day, the average of the
closing bid and asked prices, regular way (in either case, as reported
in the applicable transaction reporting system with respect to
securities listed or admitted to trading on the American Stock
Exchange), or, if the shares are not listed or admitted to trading on
the American Stock Exchange, as reported in the applicable transaction
reporting system with respect to securities listed on the principal
national securities exchange on which the shares are listed or
admitted to trading or, if the shares are not listed or admitted to
trading on any national securities exchange, the last quoted price or,
if not so quoted, the average of the high bid and low asked prices in
the
<PAGE>
over-the-counter market, as reported by the National Association of
Securities Dealers, Inc. Automated Quotation System ("NASDAQ") or such
other system then in use, or if on any such date the shares are not
quoted by any such organization, the average of the closing bid and
asked prices as furnished by a professional market marker making a
market in the shares selected by the Board of Directors of the
Company. The term "Trading Day" shall mean a day on which the
principal national securities exchange on which the shares are listed
or admitted to trading is open for the transaction of business or, if
the shares are not listed or admitted to trading on any national
securities exchange, on which the American Stock Exchange or such
other national securities exchange as may be selected by the Board of
Directors of the Company is open. If the shares are not publicly held
or not so listed or traded on any day within the period of 30 Trading
Days applicable to the determination of Fair Market Value thereof as
aforesaid, "Fair Market Value" shall mean the fair market value
thereof per share as determined in good faith by the Board of
Directors of the Company. In either case referred to in the foregoing
sentence, the determination of Fair Market Value shall be described in
a statement filed with the Secretary of the Company.
Section 8. Consolidation, Merger, etc. In case the Company
--------- ---------------------------
shall enter into any consolidation, merger, combination or other
transaction in which the Common Shares are exchanged for
<PAGE>
or changed into other stock or securities, cash and/or any other
property, then in any such case each outstanding Series A Preferred
Share shall at the same time be similarly exchanged for or changed
into the aggregate amount of stock, securities, cash and/or other
property (payable in like kind), as the case may be, for which or into
which each Common Share is changed or exchanged multiplied by the
highest of the Dividend Multiple, the Vote Multiple or the Liquidation
Multiple in effect immediately prior to such event.
Section 9. Effective Time of Adjustments.
--------- -----------------------------
(A) Adjustments to the Series A Preferred Shares required
by the provisions hereof shall be effective as of the time at which
the event requiring such adjustments occurs.
(B) The Company shall give prompt written notice to each
holder of a Series A Preferred Share of the effect of any adjustment
to the voting rights, dividend rights or rights upon liquidation,
dissolution or winding up of the Company of such shares required by
the provisions hereof. Notwithstanding the foregoing sentence, the
failure of the Company to give such notice shall not affect the
validity of or the force or effect of or the requirement for such
adjustment.
Section 10. No Redemption. The Series A Preferred Shares
---------- -------------
shall not be redeemable at the option of the Company or any holder
thereof. Notwithstanding the foregoing sentence of this Section, the
Company may acquire Series A Preferred Shares
<PAGE>
in any other manner permitted by law, the provisions hereof and the
Certificate of Incorporation of the Company.
Section 11. Ranking. Unless otherwise provided in the
---------- -------
Certificate of Incorporation of the Company or a Certificate of
Designations relating to a subsequent series of preferred stock of the
Company, the Series A Preferred Shares shall rank junior to all other
series of the Company's Preferred Shares as to the payment of
dividends and the distribution of assets on liquidation, dissolution
or winding up and senior to the Common Shares.
Section 12. Amendment. The provisions hereof and the
---------- ---------
Certificate of Incorporation of the Company shall not be amended in
any manner which would adversely affect the rights, privileges or
powers of the Series A Preferred Shares without, in addition to any
other vote of shareholders required by law, the affirmative vote of
the holders to two-thirds or more of the outstanding Series A
Preferred Shares, voting together as a single class.
<PAGE>
IN WITNESS WHEREOF, the undersigned have caused this
Certificate of Amendment to be executed as of this 30th day of May,
1988 and do hereby affirm under the penalties of perjury that the
statements contained herein are true and correct.
/s/ Lawrence N. Cohen
----------------------------------------
Lawrence N. Cohen
President
/s/ Robert McNally
----------------------------------------
Robert McNally
Secretary
NYFS10...:\80\60380\0001\1196\ART8036R.250
EXHIBIT 3(a).(3)
CERTIFICATE OF AMENDMENT
OF THE
CERTIFICATE OF INCORPORATION
OF
LUMEX, INC.
Under Section 805 of the Business Corporation Law
-------------------------------------------------
WE, THE UNDERSIGNED, J. Raymond Elliott and Robert McNally,
being respectively the President and the Secretary of Lumex, Inc., do
hereby certify:
FIRST: The name of the Corporation is Lumex, Inc.
-----
(hereinafter referred to as the "Corporation").
SECOND: The Certificate of Incorporation was filed with
------
the Department of State of New York on September 11, 1953.
THIRD: The Certificate of Incorporation is amended to
-----
change the name of the Corporation to "CYBEX International, Inc.".
The following amendment of the Certificate of Incorporation was
authorized by the affirmative vote of the Board of Directors of the
Corporation, followed by the affirmative vote of the holders of a
majority of all outstanding shares of the Corporation entitled to vote
thereon at the Corporation's Annual Meeting of Shareholders held on
August 7, 1996.
<PAGE>
FOURTH: Article FIRST of the Certificate of Incorporation
------
of the Corporation is hereby amended to read in its entirety as
follows:
"FIRST: (a) The name of the Corporation is CYBEX
-----
International, Inc."
IN WITNESS WHEREOF, the undersigned have caused this
Certificate of Amendment to be executed as of this 7th day of August,
1996 and do hereby affirm under the penalties of perjury that the
statements contained herein are true and correct.
/s/ J. Raymond Elliot
-----------------------------------
J. Raymond Elliott
President
/s/ Robert McNally
-----------------------------------
Robert McNally
Secretary
NYFS10...:\80\60380\0001\1196\AMD8056Y.540
EXHIBIT 10(xvii)
COVENANT NOT TO COMPETE
-----------------------
This Covenant Not to Compete (this "Agreement") is made this 3rd
day of April, 1996 by and among Lumex, Inc., a New York corporation
("Seller"), Lumex Medical Products, Inc. (f/k/a MUL Acquisition Corp.
I), a Delaware corporation ("Purchaser I"), MUL Acquisition Corp. II,
a Delaware Corporation ("Purchaser II) (Purchaser I and Purchaser II
are collectively referred to herein as "Purchasers"), and Fuqua
Enterprises, Inc., a Delaware corporation ("Parent").
WITNESSETH
----------
WHEREAS, Seller through its Lumex division (the "Division") and
anaffiliated leasing company is engaged in the business of designing,
manufacturing, marketing, selling, leasing and distributing a wide
variety of health care products; and
WHEREAS, Purchasers, wholly owned subsidiaries of Parent, are to
acquiresubstantially all of the assets and properties of the Division
pursuant to an Asset Sale Agreement, dated as of March 13, 1996, among
Seller, Purchasers and Parent (the "Asset Sale Agreement");
capitalized terms used herein and defined in the Asset Sale Agreement
shall have the meanings set forth in the Asset Sale Agreement when
used herein unless otherwise defined herein or unless the context
otherwise requires; and
WHEREAS, following the consummation of the transactions
contemplated bythe Asset Sale Agreement, Purchasers will control and
conduct the Business (as hereinafter defined); and
WHEREAS, to induce Purchasers and Parent to consummate the Asset
SaleAgreement and to acquire the Assets, Seller has agreed to execute
this Agreement, the terms and conditions of which are a material and
integral part of the consideration for the Asset Sale Agreement;
NOW, THEREFORE, in consideration of the premises, the mutual
promises andcovenants of the parties set forth in this Agreement and
the Asset Sale Agreement, and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:
ARTICLE I
DEFINITIONS
-----------
As used in this Agreement, the following terms shall have the
followingmeanings unless the context specifically requires otherwise:
<PAGE>
1.01 "BUSINESS" shall mean the design, manufacture, marketing,
--------
sale,leasing and distribution of health care products of the types and
performing the functions of the products designed, manufactured,
marketed, sold, leased or distributed by Seller through the Division
as of the date of this Agreement.
1.02 "COMPETE" OR "COMPETING" shall mean with respect to the
----------------------
Business:(i) the design, manufacture, marketing, sale, leasing or
distribution of health care products of the types or performing the
functions of the products designed, manufactured, marketed, sold,
leased and distributed by Seller through the Division as of the date
of this Agreement; (ii) hiring, soliciting or attempting to hire or
solicit any employee of the Division or Purchasers as of the Closing
Date either on Seller's behalf or on behalf of any other person or
entity; or (iii) entering into or attempting to enter into any
business substantially similar to the Business, either alone or with
any individual, partnership, corporation or association; provided,
however, that Competing shall not mean or include the ownership,
disposition or use of Excluded Assets.
1.03 "DIRECTLY OR INDIRECTLY" as they modify the words "Compete"
----------------------
or"Competing" shall mean: (i) acting as an agent, representative,
consultant, or independent contractor of any entity or enterprise that
is Competing with the Business; (ii) participating in any such
Competing entity or enterprise as an owner, partner, limited partner,
joint venturer, or stockholder (except as a stockholder owning less
than a five percent interest in a corporation whose shares are
actively traded on a national securities exchange or in the
over-the-counter market); and (iii) communicating to any such
Competing entity or enterprise the names or addresses or any other
information concerning any past, present or identified prospective
client, customer or supplier of the Division prior to Closing.
1.04 "TERRITORY" shall mean the United States of America and
---------
Canada.
ARTICLE II
NON-COMPETITION AND NON-DISCLOSURE
----------------------------------
2.01 SCOPE AND REASONABLENESS. Seller acknowledges that this
------------------------
Agreement(including without limitation the covenants and agreements
set forth in this Article II) is being entered into as an important
part of the consideration received by Purchasers and Parent in
connection with the acquisition of the Assets. Seller also
acknowledges that Purchasers and Parent have a reasonable present and
future expectation of continuing the Business within the Territory.
2.02 CONFIDENTIALITY AND TRADE SECRETS.
---------------------------------
(a) Seller acknowledges and agrees that as the owner of
the Division it has created substantial confidential information
used in and concerning the business and has been afforded an unique
opportunity to acquire confidential information concerning the
Business and that the misappropriation or disclosure of such
confidential information would cause irreparable harm to Purchasers
and Parent. Seller acknowledges that such confidential information
includes, without limitation, financial information concerning the
Business, the names and addresses of actual and potential customers of
the Business, studies of prospective market areas for the Business,
<PAGE>
supply sources of the Business, products of the Business, technical
data concerning the Business, ideas of the Business, processes of the
Business, financial matters concerning the Business, and trade secrets
of the Business, such information collectively being referred to as
the "Confidential Information." For purposes of this Agreement "trade
secrets" means any information that derives independent value from
being secret. Confidential Information shall not include any
information or documents that (i) are or become publicly available
without breach of this Section 2.02, (ii) Seller receives from any
third party who, to the best of Seller's knowledge upon reasonable
inquiry, is not breaching an obligation of confidence with Purchasers
or Parent (including such an obligation under an agreement assigned to
Purchasers pursuant to the Asset Sale Agreement) or without an
accompanying obligation of confidence, or (iii) is required to be
released by law. In the event that Seller is requested in any court
or governmental proceeding to disclose any Confidential Information,
Seller shall give Purchasers and Parent prompt notice of such request,
such that Purchasers or Parent may seek a protective order or other
appropriate relief, and in any such proceeding Seller will disclose
only so much of the Confidential Information as is required to be
disclosed.
(b) Seller will keep confidential and will not for a period of
three (3)years after the execution of this Agreement, directly or
indirectly, divulge to anyone, use or otherwise appropriate any of the
Confidential Information for any reason or purpose whatsoever except
to authorized representatives of Purchasers or the Parent.
(c) With respect to any trade secrets included in the
ConfidentialInformation, Seller also agrees not to use or disclose any
of such trade secrets at any time until such trade secrets become
generally available to the public by independent discovery or
development and publication through no fault of Seller. Seller
acknowledges and agrees that these prohibitions against disclosure of
Confidential Information are in addition to, and not in lieu of, any
rights or remedies that Purchasers or Parent may have available
pursuant to the laws of any jurisdiction or at common law to prevent
disclosure of trade secrets or proprietary information, and the
enforcement by Purchasers or Parent of any of their rights and
remedies pursuant to this Agreement shall not be construed as a waiver
of any other rights or available remedies they may possess in law or
equity absent this Agreement.
2.03 NON-COMPETITION. Seller agrees that for a period of three
---------------
(3) yearsfollowing the execution of this Agreement, it will not,
without Purchasers' prior written consent, Directly or Indirectly
Compete with Purchasers in the Business within the Territory.
2.04 NON-SOLICITATION AND NON-INTERFERENCE. Seller agrees that
-------------------------------------
for aperiod of one (1) year after the execution of this Agreement, it
will not in any way, directly or indirectly, for itself or on behalf
of or in conjunction with any other person, partnership, firm or
corporation hire any employee of the Division or Purchasers as of the
Closing Date, or request or induce any employee of the Division or
Purchasers as of the Closing Date to terminate his or her employment
and accept employment with another entity.
<PAGE>
2.05 REMEDIES. Seller acknowledges that any violation of this
--------
ArticleII will cause irreparable harm to Purchasers and Parent and
that damages are not an adequate remedy. Seller, therefore, agrees
that Purchasers and Parent shall be entitled to an injunction, without
the necessity of posting any bond, enjoining, prohibiting, and
restraining Seller from the continuance of any such violation, in
addition to any monetary recovery that might be available to
Purchasers and Parent by reason of a violation of this Agreement and
any other remedies at law or in equity, including without limitation
specific performance.
2.06 INDEPENDENT. The covenants set forth in the foregoing
-----------
Sections of Article II are and shall be deemed and construed as
separate and independent covenants. Should any part or provision of
such covenants be held invalid, void, or unenforceable in any court of
competent jurisdiction, such invalidity, voidness, or unenforceability
shall not render invalid, void, or unenforceable any other part or
provision thereof. Specifically, and without limiting the generality
of the foregoing, if any portion of Section 2.01, 2.02, 2.03 or 2.04
is found to be invalid by a court of competent jurisdiction because
its duration, the Territory, and/or the Business or any definition or
restriction are invalid or unreasonable in scope, such duration,
Territory, and/or Business or any definition or restriction, as the
case may be, shall be redefined by consideration of the reasonable
concerns and needs of Purchasers such that the intent of Purchasers,
the Company and Seller, in agreeing to Sections 2.01, 2.02, 2.03 and
2.04, will not be impaired and shall be enforceable to the fullest
extent of the applicable laws.
ARTICLE III
MISCELLANEOUS
-------------
3.01 SUCCESSORS AND ASSIGNS. This Agreement may not be assigned
----------------------
by anyparty hereto, except that Purchasers' and Parent's rights,
duties and obligations under this Agreement may be assigned and
delegated to any subsidiary of Purchasers or Parent
or to the acquiror of Purchasers, Parent or the Business in the event
either Purchaser or Parent is merged, acquired, sells substantially
all of its interest in the Business, or transfers its interest in the
Business to any other entity. From and after any such assignment by
Purchasers or Parent, the term "Purchasers" or "Parent," as the case
may be, shall mean such assignee, and such assignee may enforce any of
the rights of Purchasers or Parent under this Agreement as if it were
the original party hereto.
3.02 INTEGRATED AGREEMENT AND CONSIDERATION. This Agreement
--------------------------------------
constitutesthe entire Agreement between the parties with regard to its
subject matter and supersedes all prior agreements (other than the
Asset Sale Agreement and the agreements entered into in connection
therewith) relating to the same subject matter. Seller hereby
acknowledges that the consideration specified herein and in the Asset
Sale Agreement is good and valuable consideration received by Seller
for the covenants and undertakings described in this Agreement, and
such covenants and undertakings are ancillary to, and an integral part
of the transactions contemplated by the Asset Sale Agreement.
<PAGE>
3.03 COUNTERPARTS. This Agreement may be executed in two or
------------
morecounterparts, each of which will take effect as an original and
all of which shall evidence one and the same agreement.
3.04 GOVERNING LAW. The terms of this Agreement shall be
-------------
governed by andconstrued in accordance with the laws of the State of
New York.
3.05 PRONOUNS. All pronouns used herein shall be deemed to refer
--------
to themasculine, feminine, or neuter gender as the context requires.
3.07 BINDING EFFECT. This Agreement shall be binding upon and
--------------
inure tothe benefit of the parties and their respective heirs,
executors, administrators, successors, and permitted assigns.
Signatures on Next Page
<PAGE>
IN WITNESS WHEREOF, each party has caused this Agreement to be
executed onits behalf, all on the day and year first written above.
SELLER:
------
LUMEX, INC.
By: /s/ Robert McNally
--------------------------
Name: Robert McNally
Title: Chief Financial Officer
PURCHASERS:
----------
LUMEX MEDICAL PRODUCTS, INC.
By: /s/ L. P. Klamon
--------------------------
Name: Lawrence P. Klamon
Title: President and Chief
Executive Officer
MUL ACQUISITION CORP. II
By: /s/ L. P. Klamon
--------------------------
Name: Lawrence P. Klamon
Title: President and Chief
Executive Officer
PARENT:
------
FUQUA ENTERPRISES, INC.
By: /s/ L. P. Klamon
Name: Lawrence P. Klamon
Title: President and Chief
Executive Officer
NYFS10...:\80\60380\0001\6678\EXH8126U.110
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This Schedule contains summary financial information extracted from the
financial statements contained in the body of the accompanying Form
10-Q and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1996
<CASH> 6,210
<SECURITIES> 0
<RECEIVABLES> 19,306
<ALLOWANCES> 0
<INVENTORY> 13,604
<CURRENT-ASSETS> 43,088
<PP&E> 27,794
<DEPRECIATION> 14,775
<TOTAL-ASSETS> 60,298
<CURRENT-LIABILITIES> 16,312
<BONDS> 3,503
<COMMON> 449
0
0
<OTHER-SE> 38,807
<TOTAL-LIABILITY-AND-EQUITY> 60,298
<SALES> 37,789
<TOTAL-REVENUES> 37,789
<CGS> 22,200
<TOTAL-COSTS> 22,200
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 659
<INCOME-PRETAX> (482)
<INCOME-TAX> 0
<INCOME-CONTINUING> (482)
<DISCONTINUED> (414)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (896)
<EPS-PRIMARY> (.20)
<EPS-DILUTED> (.20)
</TABLE>
