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 For the quarterly period ended: December 31, 1999
Commission File Number: 0-11309
NETOPTIX CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 04-2526583
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
Sturbridge Business Park, P.O. Box 550 01566
Sturbridge, Massachusetts (Zip Code)
(Address of principal executive offices)
Registrant's telephone number including area code (508) 347-9191
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
------------------ ------------------
Indicate the number of shares outstanding of each of the Issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at February 9, 2000
- ------------------------------- ----------------------------------------
Common stock, par value $.01 11,452,596 shares
<PAGE>
NETOPTIX CORPORATION
INDEX
Part I. Financial Information: Page No.
Item 1. Financial Statements (unaudited)
Consolidated Balance Sheets................................... 3
Consolidated Statements of Operations......................... 4
Consolidated Statements of Cash Flows......................... 5
Notes to Condensed Consolidated Financial Statements.......... 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 10
Part II.Other Information:
Forward-Looking Statements..................................... 12
Item 1. Legal Proceedings.............................................. 12
Item 2. Changes in Securities and Use of Proceeds...................... 12
Item 4. Submission of Matters to a Vote of Security Holders............ 12
Item 6. Exhibits and Reports on Form 8-K............................... 13
Signatures..................................................... 14
<PAGE>
Part I. FINANCIAL INFORMATION
Item 1..........Financial Statements
<TABLE>
<CAPTION>
NETOPTIX CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands except share data) Dec. 31, 1999 Sept. 30, 1999
------------- --------------
ASSETS
Current assets:
<S> <C> <C>
Cash and cash equivalents $ 408 $ 2,117
Accounts receivable, less allowances of $507 3,274 2,789
Inventories 1,631 1,593
Other current assets 286 389
Assets relating to discontinued operations, net 13,807 14,009
Assets held for sale 3,288 3,288
--------- ---------
Total current assets 22,694 24,185
Property, plant and equipment, net 13,252 10,520
Excess of cost over the fair value of assets acquired, net 11,690 11,796
Other assets, net 2,470 1,864
--------- ---------
Total assets $50,106 $ 48,365
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Revolving line of credit $ 1,630 $ 1,150
Current portion of long term debt 5,350 5,350
Accounts payable 1,990 3,148
Accrued liabilities 2,972 3,590
Accrued liabilities, relating to discontinued operations 5,091 5,000
--------- ---------
Total current liabilities 17,033 18,238
Long-term debt 2,345 550
Other liabilities 679 660
--------- ---------
Total Liabilities 20,057 19,448
Commitments & contingencies (Note 7)
Stockholders' equity:
Common stock, $0.01 par value, 36,000,000 shares authorized,
11,416,846 and 11,326,481 issued and outstanding, respectively 114 113
Additional paid-in capital 61,952 61,389
Accumulated deficit (31,803) (32,422)
Accumulated other comprehensive loss (214) (163)
--------- ---------
Total stockholders' equity 30,049 28,917
--------- --------
Total liabilities and stockholders' equity $50,106 $ 48,365
========= =========
See accompanying notes
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NETOPTIX CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
For the Three Months Ended
December 31,
<S> <C> <C>
(Dollars in thousands, except per share data) 1999 1998
---- ----
Net Sales $ 4,695 $ 3,831
Cost of sales 2,287 2,647
------- --------
Gross profit 2,408 1,184
Research and development expenses 40 278
Selling & administrative expenses 1,542 3,305
Reduction in carrying value of certain long-lived assets -- 1,841
-------- --------
Total operating expense 1,582 5,424
------- --------
Operating profit (loss) 826 (4,240)
Interest expense, net (249) (320)
Other income, net 82 27
-------- --------
Income (loss) from continuing operations before income tax 659 (4,533)
Provision for income taxes 40 --
-------- --------
Income (loss) from continuing operations 619 (4,533)
Discontinued operations:
Income from operations of discontinued operations, net of income taxes -- 392
-------- --------
Net income (loss) $ 619 $ (4,141)
======== ========
Net income (loss) per common shares outstanding:
Income (loss) from continuing operations $ 0.05 $ (0.56)
Effect of discontinued operations -- 0.05
-------- --------
Net income (loss) $ 0.05 $ (0.51)
======== ========
See accompanying notes
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NETOPTIX CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
For the Three Months Ended
December 31,
1999 1998
---- ----
Cash flows from operating activities:
<S> <C> <C>
Net income (loss) $ 619 $ (4,141)
Adjustments to reconcile net loss to net cash provided (used)
by operating activities:
Depreciation and amortization 394 819
Reduction in carrying value of long-lived assets -- 1,841
Other adjustments, net 38 241
Increase (decrease) in cash from changes in operating
assets and liabilities:
Accounts receivable (485) 1,252
Inventories (38) 201
Accounts payable (1,706) 80
Other changes, net (216) (217)
-------- --------
Total adjustments (2,013) 4,217
-------- --------
Net cash provided (used) by operating activities (1,394) 76
Cash flows from investing activities:
Capital expenditures (2,993) (730)
Proceeds from sale of assets 2 --
-------- --------
Net cash used in investing activities (2,991) (730)
Cash flows from financing activities:
Borrowings on note payable 9,006 1,750
Payment of notes payable (6,731) (1,059)
Proceeds from issuance of common stock, net of expenses 564 56
Payment of financing costs (112) (62)
-------- --------
Net cash provided by financing activities 2,727 685
Effect of exchange rate changes on cash (51) 13
-------- --------
Net increase/decrease in cash and cash equivalents (1,709) 44
Cash and cash equivalents at beginning of period 2,117 563
-------- --------
Cash and cash equivalents at end of period $ 408 $ 607
======== ========
</TABLE>
<PAGE>
NETOPTIX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands, Except Per Share Data)
1. BASIS OF PRESENTATION
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements, as well as the reported amounts of
revenues and expenses during the reporting period. Actual results could
differ from these estimates.
In the opinion of management, the accompanying unaudited condensed
consolidated financial statements reflect all adjustments (consisting
of normal recurring adjustments except as disclosed in Note 7)
considered necessary for a fair presentation. The Company's accounting
policies are described in the Notes to the Consolidated Financial
Statements in the Company's 1999 Form 10-K, which should be read in
conjunction with these financial statements.
The results of operations for the three months ended December 31, 1999,
are not necessarily indicative of the results to be expected for the
full year.
As stated in Note 4, on January 31, 2000, the Company sold its
Leisegang Medical, Inc. and related women's health businesses ("LMI")
and related assets, and on July 1, 1999, the Company sold its
Scientific Detector and Spectroscopy Products business ("SDP"). These
businesses have been presented as discontinued operations in the
accompanying consolidated financial statements. For comparative
purposes, the statement of operations and related earnings per share
information, for all periods presented, have been restated to reflect
the results of operations for the discontinued businesses in "Income
from operations of discontinued operations, net of income taxes." The
consolidated balance sheets reflect the assets related to LMI as
"Assets relating to discontinued operations, net." The liabilities,
estimated loss from operations and estimated loss on the sale of LMI
are reflected on the balance sheet as "Accrued liabilities related to
discontinued operations."
Certain reclassifications have been made to amounts reported in
previous years in order to conform to the current year presentation.
2. INVENTORIES
Inventories consist of the following:
December 31, September 30,
1999 1999
------ -----
Finished goods $ 276 $ 569
Work-in-progress 1,043 819
Raw materials 312 205
------ ------
$1,631 $1,593
====== ======
3. EARNINGS PER SHARE
The following table sets forth the computation of basic and diluted
earnings per share:
For the Three Months ended
December 31,
1999 1998
---- ----
Numerator:
Income (loss) from continuing operations $ 619 $(4,533)
======== ========
Denominator:
Weighted average shares - basic 11,383 8,071
Dilutive stock warrants 955 --
Dilutive employee stock options 388 --
-------- --------
Weighted average shares - assuming dilution 12,726 8,071
======== ========
Net income (loss) per common share -
basic and diluted
Income (loss) from continuing operations $ 0.05 $ (0.56)
Effect of discontinued businesses -- 0.05
-------- --------
$ 0.05 $ (0.51)
======== ========
4. DISCONTINUED BUSINESSES
On January 31, 2000, the Company sold its LMI and related women's
health businesses and related assets. The transaction includes the
Company's operating units in Germany and Canada as well as the LMI
operation in Boca Raton, Florida. The purchase price is approximately
$10 million. The net proceeds will be used to reduce debt and
accordingly, such indebtedness have been reflected as a current
liability. The Company is in the process of finalizing the actual gain
or loss on the disposition of LMI. The Company does not anticipate any
material differences from the amounts previously reported.
On July 1, 1999, the Company sold its SDP business. The proceeds from
the sale, totaling approximately $7.1 million, were applied to the
Company's outstanding debt. The Company recorded a gain on the sale of
approximately $2.7 million.
The tax benefit associated with the net loss on the sale has been fully
reserved at September 30, 1999.
The operating results and estimated net loss on the sale of these
businesses have been presented as discontinued operations.
Summarized information of the discontinued operations is as follows:
<TABLE>
<CAPTION>
For the Three Months ended
December 31,
1999
Income statement data: LMI SDP Total
--- --- -----
<S> <C> <C> <C>
Net sales $ 3,461 $ -- $ 3,461
Loss from discontinued operations(1) (613) -- (613)
1998
LMI SDP Total
--- --- -----
Net sales $ 16,659 $ 2,463 $ 19,122
Income from discontinued operations 121 271 392
Earnings per share from discontinued operations
0.02 0.03 0.05
</TABLE>
<TABLE>
<CAPTION>
Balance sheet data: December 31, 1999 September 30, 1999
----------------- ------------------
<S> <C> <C>
Cash $ 136 $ 75
Accounts receivable 2,030 1,969
Inventories 3,319 3,521
Property, plant and equipment, net 1,387 1,434
Goodwill and other 6,935 7,010
------- ------
Total assets of discontinued operations $ 13,807 $ 14,009
====== ======
Other accrued liabilities 505 414
Estimated loss on sale 4,586 4,586
----- ------
Total liabilities of discontinued operations $ 5,091 $ 5,000
===== ======
</TABLE>
(1) The loss from discontinued operations for the three months ended
December 31, 1999 has been provided for in the accrual established
as of September 30, 1999.
5. REVOLVING CREDIT FACILITY
In September 1999, the Company refinanced its outstanding bank loan
through a new credit facility ("Credit Facility"). The Credit Facility
provides for a term loan ("Term Loan") of $13.0 million, bearing
interest at prime rate plus 2.0% or LIBOR plus 3.0% (10.50% at December
31, 1999) and a revolving line of credit ("Revolver") of $12.0 million,
bearing interest at prime plus 1.75% or LIBOR plus 2.5% (10.25% at
December 31, 1999). The Term Loan is used to finance equipment and
capital expenditures for use in the Company's optical systems and
components business in the United States and Germany. Such equipment
collateralizes the Term Loan, whereas the Revolver is secured by
accounts receivables and inventory. The borrowings under the Revolver
are subject to eligible accounts receivable and inventory. The Credit
Facility includes provisions which require the Company to remit the net
cash proceeds of the LMI sale to the bank. Therefore, $5.4 million of
the $7.6 million and $5.9 million outstanding on the Term Loan at
December 31, 1999 and September 30, 1999, respectively, as well as the
$1.6 million and $1.2 million outstanding on the Revolver as of
December 31, 1999 and September 30, 1999, respectively, are stated as
current liabilities. The outstanding balance of the Term Loan as of
September 30, 2000 will become payable in 20 quarterly installments
starting November 1, 2000. The carrying value of this debt as of
December 31, 1999 approximated its fair market value. The Credit
Facility contains certain covenants and requirements concerning
financial ratios and other indebtedness, as well as limitations
regarding the payment of dividends in fiscal year 2000.
6. NONRECURRING CHARGES
(a) Impairment of Long-Lived Assets
For the three months ended December 31, 1998, the Company recorded a
charge of $1.8 million for costs to reduce the carrying value of
certain long-lived assets to estimated fair market value primarily
related to land and buildings, as well as maintenance and engineering
equipment at the Company's Sturbridge, Massachusetts facility.
(b) Telecommunications Products
During the three months ended December 31, 1998, the Company terminated
its telecommunications business and reduced the workforce. The Company
suspended all investments for this business and related activities. The
Company incurred operating losses related to the telecommunications
business of $0.4 million for the three months ended December 31, 1998.
7. COMMITMENTS AND CONTINGENCIES
The Company is a defendant in four class action law suits filed in
Federal District Court in the Commonwealth of Massachusetts by
stockholders of the Company alleging violations of the federal
securities laws based on alleged misleading statements regarding the
Company's financial performance and other matters. The Company believes
these lawsuits are without merit and intends to defend them vigorously.
8. COMPREHENSIVE INCOME
Total comprehensive income (loss) was ($51) and $13 for the three
months ended December 31, 1999 and 1998, respectively.
<PAGE>
Part I. FINANCIAL INFORMATION
Item 2. Management's Discussion And Analysis Of Financial Condition
And Results Of Operations
Financial Condition
Revenues for the three month period ended December 31, 1999 of $4.7 million were
22.6% greater than the comparable prior year period. In the most recent quarter,
sales of approximately $1.5 million were included from the Dense Wavelength
Division Multiplexing (DWDM) filter business. This was the first ever quarter to
include results from the DWDM filter business which resulted from the Company's
shift to a telecommunications strategy that has been in progress since January
1999. As part of this strategy, the Company, during the fourth quarter ending
September 30, 1999, sold its Scientific Detector and Spectroscopy Products (SDP)
business and announced the sale of the Leisegang Medical, Inc. (LMI) and related
women's health businesses. The sale of the LMI businesses was closed on January
31, 2000. The disposition of those businesses have been treated as discontinued
operations and their results are included in the discontinued operations section
of the Statements of Operations. As the focus was being shifted to the start-up
of its DWDM business at the OFC subsidiary, resources were shifted away from its
historical core business, which resulted in sales decreases during the quarter
of approximately 40.0% in that core business. Also during the quarter, sales at
its Diamond Turning Division increased by 8.0%.
As a result of the DWDM filter business, the overall gross profit percentage
increased to 51.3% from 30.9% from the prior year due to the higher gross profit
on filter sales as compared to the existing core business.
Research and Development (R&D) expenses for the period ended December 31, 1998
included project costs associated with the Telecom business that was terminated
during the first quarter of fiscal year 1999. That elimination accounts for the
decrease in R&D spending year-over-year in addition to the fact that the
development team has been focused on production rather than research.
Selling and administrative expenses were approximately $1.8 million lower for
the fiscal year 2000 first quarter as the previous year's results included $0.8
million of one-time costs associated with a reduction in workforce and other
consolidation costs. The balance of the reduced spending is accounted for by the
subsequent downsizing, primarily, of Corporate administrative functions and
lower general Corporate expenditures resulting from a smaller and less complex
Corporate structure. Also during the quarter ended December 31, 1998,
approximately $1.8 million of asset impairment costs were incurred associated
with the termination of the Medical Endoscope Products business and certain
portions of its SDP businesses.
Interest expense for the recent quarter ended was $71,000 lower than the prior
year as the average bank balance outstanding decreased to $9.3 million from
$13.5 million for the prior year. The borrowing rates were not significantly
different between years. Current borrowings supported the DWDM project spending
and some working capital requirements while the previous years' balance almost
entirely supported working capital shortfalls, as the Company was experiencing
severe liquidity problems at that time.
For both the current and comparable prior year periods, the Company's effective
tax rate differs from the statutory rate primarily due to the available tax loss
carry-forwards. The provision principally relates to foreign and state income
taxes.
As discussed earlier, the disposition of SDP and LMI are accounted for as
discontinued operations with the results for the periods presented restated to
reflect that accounting treatment. For the quarter ended December 31, 1998,
results from discontinued operations included net incomes of $0.3 million for
SDP and $0.1 million for LMI. For the current period, LMI incurred a small loss
which was charged to a reserve for discontinued operations that was established
at September 30, 1999.
Year 2000
As previously disclosed, the Company had put into place various strategies to
address and remedy Year 2000 issues. As of the date of this filing, the Company
has experienced no Year 2000 related difficulties and none are expected. There
were no costs related to remediation efforts during the first quarter of fiscal
2000.
<PAGE>
Part II. Other Information
FORWARD-LOOKING STATEMENTS
This Form 10-Q includes forward-looking statements concerning pending
legal proceedings and other aspects of future operations. These forward-looking
statements are based on certain underlying assumptions and expectations of
management. Certain factors could cause actual results to differ materially from
the forward-looking statements included in this Form 10-Q. For additional
information on those factors which could affect actual results, please refer to
the Company's Form 10-K for the fiscal year ended September 30, 1999.
ITEM 1. LEGAL PROCEEDINGS
There is one class action lawsuit pending against the Company and
certain of its former officers alleging violations of federal securities laws
which was filed on June 21, 1999. This lawsuit consolidates and amends four
class action lawsuits filed during the first quarter of fiscal year 1999. The
Company is in the process of responding to the allegations contained in the
lawsuit. As indicated previously, the Company will vigorously defend this
lawsuit and believes that it is without merit.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.
(C) Sales of Unregistered Securities
On September 1, 1999, the Company issued a total of 50,000 shares of
common stock to Fleet National Bank, as Custodian FBO NetOptix Corporation
Employee Pension Plan, for an aggregate purchase price of $623,437.50. The
Company issued the shares without registration under the Securities Act of 1993
(the "Act") in reliance upon the exemption provided in Section 4(2) of the Act.
This exemption was made available to the Company based on the fact that there
was a single purchaser who made appropriate investment representations to the
Company in connection with the acquisition of the shares.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) The Annual Meeting of Stockholders began on January 26, 2000 and later
that day was adjourned until February 9, 2000, on which date the
Annual Meeting of Stockholders was concluded.
(b) Each of the persons named in the Proxy Statement as a nominee for
Director was elected.
(c) Set forth below are the voting results on each of the matters which
were submitted to the stockholders:
<TABLE>
<CAPTION>
Withheld Broker
Election of Directors: For Against or Abstain Non-Votes
--- ------- ---------- ---------
<S> <C> <C>
Gerhard R. Andlinger 9,865,054 540,907
Charles E. Ball 9,832,255 573,706
John F. Blais, Jr. 9,864,755 541,206
Todd F. Davenport 9,864,355 541,606
Robert D. Happ 8,433,625 1,972,336
Stephen A. Magida 9,863,955 542,006
Paul C. O'Brien 9,832,554 573,407
</TABLE>
<TABLE>
<CAPTION>
Resolutions:
<S> <C> <C> <C> <C> <C>
To approve the 1999 6,963,285 529,479 147,690 2,765,507
Stock Option Plan
To approve the 1999 7,308,411 281,970 163,468 2,652,112
Stock Option Plan for
Non-Employee Directors
To approve an increase in the 9,518,246 871,505 16,210
number of authorized shares of
Common Stock to 100,000,000
To approve the authorization of 6,913,131 679,947 47,376 2,765,507
2,000,000 shares of a new class
of undesignated preferred stock
To approve the deletion of an 7,789,470 147,113
Article from the Certificate of
Incorporation which required
the approval of 66 2/3% of the
outstanding shares to approve
certain transactions
</TABLE>
Additional information regarding the matters referred to under this
Item 4 is set forth in the Proxy Statement dated December 30, 1999 previously
filed with the Commission and incorporated herein by reference.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits:
3 Amended and Restatd Bylaws of the Company, as amended
on January 26, 2000
27.1 Financial Data Schedule (EDGAR filing only).
27.2 Financial Data Schedule (EDGAR filing only)
b. Reports on Form 8-K
1. Current Report on Form 8-K dated September 30, 1999
and filed on October 21, 1999, with two press
releases dated September 30, 1999 and October 4, 1999
and a Loan and Security Agreement dated as of
September 30, 1999 attached as exhibits thereto,
regarding (i) the Company's change of its name to
NetOptix Corporation effective September 30, 1999;
and (ii) the Company's completion of arrangements for
a debt financing package totaling $25 million with
Deutsch Financial Services Corporation.
2. Current Report on Form 8-K dated November 18, 1999
and filed on November 22, 1999, with a press release
dated November 18, 1999 attached as an exhibit
thereto, regarding the setting of the Company's 2000
Annual Meeting of Stockholders for January 26, 2000
and the record date for determining the stockholders
allowed to vote at such Annual Meeting at November
30, 1999.
3. Current Report on Form 8-K/A dated November 17, 1999
and filed on December 10, 1999, with a press release
dated December 8, 1999 attached as an exhibit
thereto, regarding the change in the record date for
the Company's 2000 Annual Meeting of Stockholders
from November 30, 1999 to December 8, 1999.
4. Current Report on Form 8-K dated December 14, 1999
and filed on December 16, 1999, with two press
releases, each dated December 14, 1999, attached as
exhibits thereto, regarding (i) the Company's
reported financial results for its fourth quarter
ended September 30, 1999 and for the fiscal year
ended September 30, 1999 (including attached
consolidated condensed balance sheets as of September
30, 1998 and 1999 and consolidated statements of
operations for the three-month and twelve-month
periods ended September 30, 1998 and 1999), and (ii)
the Company's agreement to sell its women's health
businesses and related assets to CooperSurgical, Inc.
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.
NETOPTIX CORPORATION
Dated: February 11, 2000 /s/ Gerhard R. Andlinger
-----------------------------------------
Gerhard R. Andlinger, Chairman of the
Board and Chief Executive Officer
(Principal Executive Officer)
/s/ Thomas J. Mathews
-----------------------------------------
Thomas J. Mathews, Vice President,
Finance, Chief Financial Officer and
Assistant Secretary (Principal
Financial and Accounting Officer)
<PAGE>
NETOPTIX CORPORATION
INDEX TO EXHIBITS
Exhibit No.
- -----------
3 Amended and Restated Bylaws of the Company,
as amended on January 26, 2000.
27.1 Financial Data Schedule
27.2 Financial Data Schedule
Adopted January 26, 2000
NETOPTIX CORPORATION
AMENDED AND RESTATED
BY-LAWS
ARTICLE I
OFFICES
Section 1. The registered office shall be in the City of Wilmington, County of
New Castle, State of Delaware.
Section 2. The corporation may also have offices at such other places, both
within and without the State of Delaware, as the board of directors may from
time to time determine or the business of the Corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. All meetings of the stockholders for the election of directors shall
be held in the City of Sturbridge, Massachusetts, at such place as may be fixed
from time to time by the board of directors, or at such other place, either
within or without the State of Delaware, as shall be designated from time to
time by the board of directors and stated in the notice of the meeting. Meetings
of stockholders for any other purpose may be held at such time and place, within
or without the State of Delaware, as shall be stated in the notice of the
meeting or in a duly executed waiver of notice thereof.
Section 2. The annual meeting of the stockholders shall be held on the third
Thursday in January in each year, or such other date as may be fixed by the
board of directors, at such time as shall be stated in the notice of the meeting
for the purpose of electing directors and for the transaction of such other
business as may properly come before the meeting.
Section 3. Written notice of the annual meeting stating the place, date and hour
of the meeting shall be given to each stockholder entitled to vote at such
meeting not less than ten nor more than sixty days before the date of the
meeting.
Section 4. Special meetings of the stockholders, for any purpose or purposes,
unless otherwise prescribed by statute or by the certificate of incorporation,
may be called by the president and shall be called by the president or secretary
at the request in writing of a majority of the board of directors, or at the
request in writing of stockholders owning a majority in amount of the entire
capital stock of the corporation issued and outstanding and entitled to vote.
Such request shall state the purpose or purposes of the proposed meeting.
Section 5. Written notice of a special meeting stating the place, date and hour
of the meeting and the purpose or purposes for which the meeting is called,
shall be given not less than ten nor more than sixty days before the date of the
meeting, to each stockholder entitled to vote at such meeting.
Section 6. The officer who has charge of the stock ledger of the corporation
shall prepare and make, at least ten days before every meeting of stockholders,
a complete list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each stockholder and the number
of shares registered in the name of each stockholder. Such list shall be open to
the examination of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least ten days prior to the
meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held. The list shall also be
produced and kept at the time and place of the meeting during the whole time
thereof, and may be inspected by any stockholder who is present.
Section 7. The holders of a majority of the stock issued and outstanding and
entitled to vote thereat, present in person or represented by proxy, shall
constitute a quorum at all meetings of the stockholders for the transaction of
business except as otherwise provided by statute or by the certificate of
incorporation. Whether or not such quorum shall be present or represented at any
meeting of the stockholders, the stockholders entitled to vote thereat, present
in person or represented by proxy, shall, by a majority vote thereof, have power
to adjourn the meeting from time to time, without notice other than announcement
at the meeting. At such adjourned meeting, at which a quorum shall be present or
represented, any business may be transacted which might have been transacted at
the meeting as originally notified. If the adjournment is for more than thirty
days, or if after the adjournment a new record date is fixed for the adjourned
meeting, a notice of the adjourned meeting shall be given to each stockholder of
record entitled to vote at the meeting. The stockholders present or represented
at any duly organized meeting may continue to transact business until
adjournment, notwithstanding the withdrawal of enough stockholders to leave less
than a quorum.
Section 8. When a quorum is present at any meeting, the vote of the holders of a
majority of the stock having voting power present in person or represented by
proxy shall decide any question brought before such meeting, unless the question
is one upon which by express provision of the statutes, the certificate of
incorporation, or these by-laws, a different vote is required, in which case
such express provision shall govern and control the decision of such question.
Section 9. Unless otherwise provided in the certificate of incorporation, each
stockholder shall, at every meeting of the stockholders, be entitled to one vote
in person or by proxy for each share of the capital stock having voting power
held by such stockholder, but no proxy shall be voted on after three years from
its date, unless the proxy provides for a longer period.
Section 10. Unless otherwise provided in the certificate of incorporation, any
action required to be taken at any annual or special meeting of stockholders of
the corporation, or any action which may be taken at any annual or special
meeting of such stockholders, may be taken without a meeting, without prior
notice and without a vote, if a consent in writing, setting forth the action so
taken, shall be signed by the holders of outstanding stock having not less than
the minimum number of votes that would be necessary to authorize or take such
action at a meeting at which all shares entitled to vote thereon were present
and voted. Prompt notice of the taking of the corporate action without a meeting
by less than unanimous written consent shall be given to those stockholders who
have not consented in writing.
ARTICLE III
DIRECTORS
Section 1. The business of the corporation shall be managed by its board of
directors which may exercise all such powers of the corporation and do all such
lawful acts and things as are not by statute or by the certificate of
incorporation or by these by-laws directed or required to be exercised or done
by the stockholders.
Section 2. The number of directors which shall constitute the whole board shall
be not less than three nor more than nine. Within the limits above specified,
the number of directors shall be determined by resolution of the board of
directors or by the stockholders at the annual meeting. The directors shall be
elected at the annual meeting of the stockholders, except as provided in Section
3 of this Article, and each director elected shall hold office until his
successor is elected and qualified. Directors need not be stockholders.
Section 3. Vacancies and newly created directorships resulting from any increase
in the authorized number of directors may be filled by a majority of the
directors then in office, though less than a quorum, or by a sole remaining
director, and the directors so chosen shall hold office until the next annual
election and until their successors are duly elected and shall qualify, unless
sooner displaced. If there are no directors in office, then an election of
directors may be held in the manner provided by statute.
MEETINGS OF THE BOARD OF DIRECTORS
Section 4. The board of directors of the corporation may hold meetings, both
regular and special, either within or without the State of Delaware.
Section 5. The first meeting of each newly elected board of directors shall be
held as soon as practicable after each annual election of directors on the same
day and at the same place at which such election was held and no notice of such
meeting shall be necessary to the newly elected directors in order legally to
constitute the meeting, provided a quorum shall be present. In the event such
meeting is not held at such time and place, the meeting may be held at such time
and place as shall be specified in a notice given as hereinafter provided for
special meetings of the board of directors, or as shall be specified in a
written waiver signed by all of the directors.
Section 6. Regular meetings of the board of directors may be held without notice
at such time and at such place as shall from time to time be determined by the
board.
Section 7. Special meetings of the board may be called by the president on two
days' notice to each director, if such notice is delivered personally or sent by
telegram, or on at least three days' notice if sent by mail. Special meetings
shall be called by the president or secretary in like manner and on like notice
on the written request of at least one-half of the directors then in office.
Section 8. At all meetings of the board a majority of the directors shall
constitute a quorum for the transaction of business and the act of a majority of
the directors present at any meeting at which there is a quorum shall be the act
of the board of directors, except as may otherwise be specifically provided by
statute, the Restated Certificate of Incorporation or these by-laws. If a quorum
shall not be present at any meeting of the board of directors, the directors
present may adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum is present. The directors present at
any duly organized meeting of the board of directors may continue to transact
business until adjournment, notwithstanding the withdrawal of enough directors
to leave less than a quorum.
The corporation shall not, without the consent of the Required Directors, as
defined below, at the time of such proposed action, (i) amend, alter or repeal
any provision of the Restated Certificate of Incorporation or by-laws of the
corporation, or file any certificate of designation relating to any preferred
stock; (ii) sell, convey, transfer, abandon, lease or otherwise dispose of or
encumber all or substantially all of its property or business or effect a
material change in the nature of its business; (iii) sell, convey, transfer,
abandon, lease or otherwise dispose of or encumber any of the capital stock of
Leisegang Medical, Inc. or Optical Filter Corporation, or sell all or
substantially all of the property or business of either of those corporations,
whether or not they constitute all or substantially all of the property or
business of the corporation, (iv) purchase, lease or otherwise acquire all or
substantially all of the properties or assets of any other corporation or entity
(whether through the purchase of stock or assets); (v) merge or consolidate with
or into any other corporation, corporations, entity or entities; (vi)
voluntarily dissolve, liquidate, or wind up or carry out any partial liquidation
or dissolution or transaction in the nature of a partial liquidation or
dissolution; (vii) issue any shares of its common stock or any class or series
of capital stock, or any options, warrants, bonds, debentures, notes or other
obligations or securities convertible into or exchangeable for, or having
optional rights to purchase, its common stock (other than issuances of common
stock upon the exercise of outstanding options or future awards granted pursuant
to the corporation's 1981 Stock Option Plan, 1991 Stock Option Plan, 1996
Directors Stock Option Plan or 1997 Stock Purchase Plan) or adopt any new stock
option plan or stock appreciation plan, amend any such plans or amend or reprice
any award or grant thereunder; or (viii) incur any indebtedness (other than
accounts payable arising in the ordinary course of business) except as
permitted, at the time of such incurrence, by the corporation's existing credit
facility as amended or restated at such time; provided, however, that the
provisions of this paragraph shall terminate on the first date that Andlinger
Capital XIII LLC (the "Investor") and its Permitted Transferees, as defined
below, beneficially own in the aggregate less than 98% of their Initial Common
Holdings, as defined below.
For the purposes of the preceding paragraph: (i) "Initial Common Holdings" means
the aggregate of 2,000,000 shares of the corporation's common stock plus
2,000,000 shares of such stock issuable upon exercise of the warrant issued to
the Investor at the closing of the purchase of such securities by the Investor
under the Securities Purchase Agreement dated as of December 22, 1998 (as if
such shares were issued at such closing); (ii) "Permitted Transferee" means (a)
the members of Investor, (b) the spouse or children or grandchildren (in each
case, natural or adopted) or any trust for the sole benefit of the spouse or
children or grandchildren (in each case, natural or adopted) of any member of
Investor, (c) the heirs, executors, administrators or personal representatives
upon the death of any member of Investor or upon the incompetency or disability
of any member of Investor for purposes of the protection and management of the
assets of such member, and (d) any affiliate of Investor or its members; and
(iii) "Required Directors" means that number of directors of the corporation's
board of directors equal to the quotient obtained by dividing (x) five times the
number of directors constituting all directors at the time of such determination
by (y) seven, and, if such quotient is not a whole number, rounding such
quotient up to the nearest whole number so that, for example, if the number of
all directors on the board is seven, the number of Required Directors would be
five, and if the number of all directors is nine, the number of Required
Directors would be seven.
Section 9. Unless otherwise restricted by the certificate of incorporation or by
these by-laws, any action required or permitted to be taken at any meeting of
the board of directors or of any committee thereof may be taken without a
meeting, if all members of the board or committee, as the case may be, consent
thereto in writing, and the writing or writings are filed with the minutes of
proceedings of the board or committee.
Section 10. Unless otherwise restricted by the certificate of incorporation or
these by-laws, members of the board of directors may participate in a meeting of
the board of directors or any committee, by means of conference, telephone or
similar communications equipment by means of which all persons participating in
the meeting can hear each other, and such participation in a meeting shall
constitute presence in person at the meeting.
COMMITTEES OF DIRECTORS
Section 11. The board of directors may, by resolution passed by a majority of
the directors then in office, designate one or more committees, each committee
to consist of one or more of the directors of the corporation. The board may
designate one or more directors as alternate members of any committee, who may
replace any absent or disqualified member at any meeting of the committee. In
the absence of disqualification of a member of a committee, the member or
members thereof present at any meeting and not disqualified from voting, whether
or not he or they constitute a quorum, may unanimously appoint another member of
the board of directors to act at the meeting in the place of any such absent or
disqualified member. Any such committee, to the extent provided in the
resolution of the board of directors, shall have and may exercise all the powers
and authority of the board of directors in the management of the business and
affairs of the corporation, and may authorize the seal of the corporation to be
affixed to all papers which may require it; but no such committee shall have the
power or authority in reference to amending the certificate of incorporation,
adopting an agreement of merger or consolidation, recommending to the
stockholders the sale, lease or exchange of all or substantially all of the
corporation's property and assets, recommending to the stockholders a
dissolution of the corporation or a revocation of a dissolution, or amending the
by-laws of the corporation; and, unless the resolution or the certificate of
incorporation expressly so provide, no such committee shall have the power or
authority to declare a dividend or to authorize the issuance of stock. Such
committee or committees shall have such name or names as may be determined from
time to time by resolution adopted by the board of directors.
Section 12. Each committee shall keep regular minutes of its meetings and report
the same to the board of directors when required. Except as otherwise determined
by the board of directors, the provisions of these by-laws governing meetings of
the board of directors shall apply also to meetings of committees.
COMPENSATION OF DIRECTORS
Section 13. Unless otherwise restricted by the certificate of incorporation or
these by-laws, the board of directors shall have the authority to fix the
compensation of directors. The directors may be paid their expenses, if any, of
attendance at each meeting of the board of directors and may be paid a fixed sum
for attendance at each meeting of the board of directors or a stated salary as
director. No such payment shall preclude any director from serving the
corporation in any other capacity and receiving compensation therefor. Members
of special or standing committees may be allowed like compensation for attending
committee meetings.
ARTICLE IV
NOTICES
Section 1. Whenever, under the provisions of the statutes or of the certificate
of incorporation or of these by-laws, notice is required to be given to any
director or stockholder, it shall not be construed to necessitate personal
notice, but such notice may be given in writing, delivered in person, by mail or
telegraphic means, addressed to such director or stockholder at his address as
it appears on the records of the corporation, with postage or other fees thereon
prepaid, and such notice shall be deemed to be given at the time when the same
shall be deposited with the United States Postal Service, lodged with a
telegraphic common carrier or delivered in person to such address.
Section 2. Whenever any notice is required to be given under the provisions of
the statutes or of the certificate of incorporation or of these by-laws, a
waiver thereof in writing, signed by the person or persons entitled to said
notice, whether before or after the time stated therein, shall be deemed
equivalent thereto.
ARTICLE V
OFFICERS
Section 1. The officers of the corporation shall be chosen by the board of
directors and shall be a president, a vice-president, a secretary and a
treasurer. The board of directors may also choose a chairman of the board,
additional vice-presidents, one or more assistant secretaries and assistant
treasurers and any other officers that it deems necessary or appropriate. Any
number of offices may be held by the same person, unless the certificate of
incorporation or these by-laws otherwise provide.
Section 2. The board of directors at its first meeting after each annual meeting
of stockholders shall choose a president, one or more vice-presidents, a
secretary and a treasurer.
Section 3. The board of directors may, at any time, appoint such other officers
and agents as it shall deem necessary who shall hold their offices for such
terms and shall exercise such powers and perform such duties as shall be
determined from time to time by the board.
Section 4. The salaries of all officers and agents of the corporation shall be
fixed by the board of directors.
Section 5. The officers of the corporation shall hold office until their
successors are chosen and qualify. Any officer elected or appointed by the board
of directors may be removed, with or without cause, at any time by the
affirmative vote of a majority of the directors then in office. Any vacancy
occurring in any office of the corporation shall be filled by the board of
directors.
THE CHAIRMAN OF THE BOARD
Section 6. The chairman of the board, if any, shall be the chief executive
officer of the corporation and, subject to the direction of the board of
directors, shall perform such executive, supervisory and management functions
and duties as may be assigned to him from time to time by the board of
directors. He shall, if present, preside at all meetings of stockholders and of
the board of directors unless otherwise determined by the board of directors.
Section 6(a). The chairman of the board may execute bonds, mortgages and other
contracts requiring a seal, under the seal of the corporation, except where
required or permitted by law to be otherwise signed and executed and except
where the signing and execution thereof shall be expressly delegated by the
board of directors to some other officer or agent of the corporation.
THE PRESIDENT
Section 7. The president shall preside at all meetings of the stockholders and
the board of directors in the absence of a chairman of the board, shall have
general and active management of the business of the corporation (except to the
extent that the board of directors has designated certain business units of the
corporation and the management thereof to report directly to the chairman of the
board) and shall see that all orders and resolutions of the board of directors
and the chairman of the board are carried into effect.
Section 8. The president may execute bonds, mortgages and other contracts
requiring a seal, under the seal of the corporation, except where required or
permitted by law to be otherwise signed and executed and except where the
signing and execution thereof shall be expressly delegated by the board of
directors to some other officer or agent of the corporation.
THE VICE-PRESIDENTS
Section 9. In the absence of the president or in the event of his inability or
refusal to act, the vice-president or in the event there be more than one
vice-president, the vice-presidents in the order designated by the directors (or
in the absence of any designation, then in the order of their election) shall
perform the duties of the president, and when so acting, shall have all the
powers of and be subject to all the restrictions upon the president. The
vice-presidents shall perform such other duties and have such other powers as
the board of directors may from time to time prescribe.
THE SECRETARY AND ASSISTANT SECRETARIES
Section 10. The secretary shall attend all meetings of the board of directors
and all meetings of the stockholders and record all the proceedings of the
meetings of the corporation and of the board of directors in a book to be kept
for that purpose and shall perform like duties for the standing committees when
required. He shall give, or cause to be given, notice of all meetings of the
stockholders and special meetings of the board of directors, and shall perform
such other duties as may be prescribed by the board of directors or president,
under whose supervision he shall be. He shall have custody of the corporate seal
of the corporation and he, or an assistant secretary, shall have authority to
affix the same to any instrument requiring it, and when so affixed, it may be
attested by his signature or by the signature of such assistant secretary. The
board of directors may give general authority to any other officer to affix the
seal of the corporation and to attest the affixing by his signature.
Section 11. The assistant secretary, or if there be more than one, the assistant
secretaries in the order determined by the board of directors (of if there be no
such determination, then in the order of their election), shall, in the absence
of the secretary or in the event of his inability or refusal to act, perform the
duties and exercise the powers of the secretary and shall perform such other
duties and have such other powers as the board of directors may from time to
time prescribe.
THE TREASURER AND ASSISTANT TREASURERS
Section 12. The treasurer shall have the custody of the corporate funds and
securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the corporation and shall deposit all moneys
and other valuable effects in the name and to the credit of the corporation in
such depositories as may be designated by the board of directors.
Section 13. He shall disburse the funds of the corporation as may be ordered by
the board of directors, taking proper vouchers for such disbursements, and shall
render to the president and the board of directors, at its regular meetings, or
when the board of directors so requires, an account of all his transactions as
treasurer and of the financial condition of the corporation.
Section 14. If required by the board of directors, he shall give the corporation
a bond (which shall be renewed every six years) in such sum and with such surety
or sureties as shall be satisfactory to the board of directors for the faithful
performance of the duties of his office and for the restoration to the
corporation, in case of his death, resignation, retirement or removal from
office, of all books, papers, vouchers, money and other property of whatever
kind in his possession or under his control belonging to the corporation.
Section 15. The assistant treasurer, or if there shall be more than one, the
assistant treasurers in the order determined by the board of directors (or if
there be no such determination, then in the order of their election), shall, in
the absence of the treasurer or in the event of his inability or refusal to act,
perform the duties and exercise the powers of the treasurer and shall perform
such other duties and have such other powers as the board of directors may from
time to time prescribe.
ARTICLE VI
CERTIFICATES OF STOCK
Section 1. Every holder of stock in the corporation shall be entitled to have a
certificate, signed by, or in the name of the corporation by, the president or a
vice president and the treasurer or an assistant treasurer, or the secretary or
an assistant secretary of the corporation, certifying the number of shares owned
by him in the corporation.
Section 2. Any of or all the signatures on the certificate may be facsimile. In
case any officer, transfer agent or registrar who has signed or whose facsimile
signature has been placed upon a certificate shall have ceased to be such
officer, transfer agent or registrar before such certificate is issued, it may
be issued by the corporation with the same effect as if he were such officer,
transfer agent or registrar at the date of issue.
LOST CERTIFICATES
Section 3. The board of directors may direct a new certificate or certificates
to be issued in place of any certificate or certificates theretofore issued by
the corporation alleged to have been lost, stolen or destroyed, upon the making
of an affidavit of that fact by the person claiming the certificate of stock to
be lost, stolen or destroyed. When authorizing such issue of a new certificate
or certificates, the board of directors may, in its discretion and as a
condition precedent to the issuance thereof, require the owner of such lost,
stolen or destroyed certificate or certificates, or his legal representative, to
advertise the same in such manner as it shall require and/or to give the
corporation a bond in such sum as it may direct as indemnity against any claim
that may be made against the corporation with respect to the certificate alleged
to have been lost, stolen or destroyed.
TRANSFERS OF STOCK
Section 4. Upon surrender to the corporation or the transfer agent of the
corporation of a certificate for shares duly endorsed or accompanied by proper
evidence of succession, assignment or authority to transfer, it shall be the
duty of the corporation to issue a new certificate to the person entitled
thereto, cancel the old certificate and record the transaction upon its books.
FIXING RECORD DATE
Section 5. In order that the corporation may determine the stockholders entitled
to notice of or to vote at any meeting of stockholders or any adjournment
thereof, or to express consent to corporate action in writing without a meeting,
or entitled to receive payment of any dividend or other distribution or
allotment of any rights, or entitled to exercise any rights in respect of any
change, conversion or exchange of stock or for the purpose of any other lawful
action, the board of directors may fix, in advance, a record date, which shall
not be more than sixty nor less than ten days before the date of such meeting,
nor more than sixty days prior to any other action. A determination of
stockholders of record entitled to notice of or to vote at a meeting of
stockholders shall apply to any adjournment of the meeting; provided, however,
that the board of directors may fix a new record date for the adjourned meeting.
REGISTERED STOCKHOLDERS
Section 6. The corporation shall be entitled to recognize the exclusive right of
a person registered on its books as the owner of shares to receive dividends,
and to vote as such owner, and to hold liable for calls and assessments a person
registered on its books as the owner of shares, and shall not be bound to
recognize any equitable or other claim to or interest in such share or shares on
the part of any other person, whether or not it shall have express or other
notice thereof, except as otherwise provided by the laws of Delaware.
ARTICLE VII
GENERAL PROVISIONS
DIVIDENDS
Section 1. Dividends upon the capital stock of the corporation, subject to the
provisions of the certificate of incorporation, if any, may be declared by the
board of directors at any regular or special meeting, pursuant to law. Dividends
may be paid in cash, in property, or in shares of the capital stock, subject to
the provisions of the certificate of incorporation.
Section 2. Before payment of any dividend, there may be set aside out of any
funds of the corporation available for dividends such sum or sums as the
directors from time to time, in their absolute discretion, think proper as a
reserve or reserves to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the corporation, or for such other
purpose as the directors shall think conducive to the interest of the
corporation, and the directors may modify or abolish any such reserve in the
manner in which it was created.
CHECKS
Section 3. All checks or demands for money and notes of the corporation shall be
signed by such officer or officers or such other person or persons as the board
of directors may from time to time designate.
FISCAL YEAR
Section 4. Except as from time to time otherwise provided by the board of
directors, the fiscal year of the corporation shall commence on the first day of
October.
SEAL
Section 5. The corporate seal shall have inscribed thereon the name of the
corporation, the year of its organization and the words "Corporate Seal,
Delaware". The seal may be used by causing it or a facsimile thereof to be
impressed or affixed or reproduced or otherwise.
ARTICLE VIII
AMENDMENTS
Section 1. Except as may be provided in Section 8 of Article III, these by-laws
may be altered, amended or repealed or new by-laws may be adopted by the
stockholders or by the board of directors at any regular or special meeting of
the stockholders or of the board of directors.
ARTICLE IX
INDEMNIFICATION
Section 1. Right to Indemnification. Each person who was or is made a party or
is threatened to be made a party to or is involved in any action, suit, or
proceeding, whether criminal, administrative or investigative, by reason of the
fact that he or she, or a person of whom he or she is the legal representative,
is or was a director or officer of the corporation or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation or of a partnership, joint venture, trust or other enterprise,
including service with respect to employee benefit plans, whether the basis of
such proceeding is alleged action in an official capacity as a director,
officer, employee or agent or in any other capacity while serving as a director,
officer, employee or agent, shall be indemnified and held harmless by the
corporation to the fullest extent authorized by the Delaware General Corporation
Law, as the same exists or may hereafter be amended (but, in the case of any
such amendment, only to the extent that such amendment permits the corporation
to provide broader indemnification rights than said law permitted the
Corporation to provide prior to such amendments) against all expenses, liability
and loss (including attorneys' fees, judgments, fines, ERISA excise taxes or
penalties and amounts paid or to be paid in settlement) reasonably incurred or
suffered by such person in connection therewith, provided, however, that the
corporation shall indemnify any such person seeking indemnity in connection with
any suit or proceeding (or part thereof) initiated by such person only if such
action, suit or proceeding (or part thereof) was authorized by the board of
directors of the corporation. Such right shall be a contract right and shall
include the right to be paid by the corporation expenses incurred in defending
any such proceeding in advance of its final disposition; provided, however,
that, the payment of such expenses incurred by a director or officer in his or
her capacity as a director or officer (and not in any other capacity in which
service was or is rendered by such person while a director or officer,
including, without limitation, service to an employee benefit plan) in advance
of the final disposition of such proceeding, shall be made only upon delivery to
the corporation of an undertaking, by or on behalf of such director or officer,
to repay all amounts so advanced if it should be determined ultimately that such
director or officer is not entitled to be indemnified under this Section or
otherwise.
Section 2. Right of Claimant to Bring Suit. If a claim under Section 1 is not
paid in full by the corporation within ninety days after a written claim has
been received by the corporation, the claimant may at any time thereafter bring
suit against the corporation to recover the unpaid amount of the claim and, if
successful in whole or in part, the claimant shall be entitled to be paid also
the expense of prosecuting such claim. It shall be a defense to any such action
(other than an action brought to enforce a claim for expenses incurred, in
defending any proceeding in advance of its final disposition where the required
undertaking has been tendered to the corporation) that the claimant has not met
the standards of conduct which make it permissible under the Delaware General
Corporation Law for the corporation to indemnify the claimant for the amount
claimed, but the burden of proving such defense shall be on the corporation.
Neither the failure of the corporation (including its board of directors,
independent legal counsel, or its stockholders) to have made a determination
prior to the commencement of such action that indemnification of the claimant is
proper in the circumstances because he or she has met the applicable standard of
conduct set forth in the Delaware General Corporation Law, nor an actual
determination by the corporation (including its board of directors, independent
legal counsel, or its stockholders) that the claimant had not met such
applicable standard of conduct, shall be a defense to the action or create a
presumption that claimant had not met the applicable standard of conduct.
Section 3. Non-Exclusivity of Rights. The rights conferred on any person by
Sections 1 and 2 shall not be exclusive of any other right which such person may
have or hereafter acquire under any statute, provision of the certificate of
incorporation, by-law, agreement, vote of stockholders or disinterested
directors or otherwise.
Section 4. Insurance. The corporation may maintain insurance, at its expense, to
protect itself and any such director, officer, employee or agent of the
corporation or another corporation, partnership, joint venture, trust or other
enterprise against any such expense, liability or loss, whether or not the
corporation would have the power to indemnify such person against such expense,
liability or loss under the Delaware General Corporation Law.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Exhibit 27.1
</LEGEND>
<CIK> 0000711425
<NAME> NetOptix Corporation
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<S> <C>
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0
0
<COMMON> 114
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<INCOME-TAX> 40
<INCOME-CONTINUING> 619
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<EPS-BASIC> 0.05
<EPS-DILUTED> 0.05
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Exhibit 27.2
</LEGEND>
<CIK> 0000711425
<NAME> NetOptix Corporation
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<CURRENCY> U.S. DOLLARS
<S> <C>
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<BONDS> 992
0
0
<COMMON> 81
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<CGS> 2,647
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<CHANGES> 0
<NET-INCOME> (4,141)
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</TABLE>
