SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. - 20549
_________________________
FORM 10-Q
(Mark One)
* QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the Quarterly Period Ended July 4, 1997
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from to
Commission File No. 0-12588
_________________________
SALIENT 3 COMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)
Delaware 23-2280922
(State of Incorporation) (IRS Employer
Identification No.)
P.O. Box 1498, Reading, Pennsylvania 19603
(Mailing address of principal executive offices) (Zip Code)
(610) 856-5500
________________________________________________________________________________
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that
the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days.
Yes X No
Class A Class B
Number of shares of each class of
common stock outstanding as of
July 4, 1997 (excluding 2,617,134
Class A treasury shares): 5,830,847 537,319
<PAGE>
SALIENT 3 COMMUNICATIONS, INC. AND SUBSIDIARIES
INDEX
Part I. Financial Information Pages
Item I.
Consolidated Condensed Balance Sheets at
July 4, 1997 and January 3, 1997 (unaudited)
Consolidated Condensed Statements of Operations for the
six month and three month periods ended July 4, 1997
and June 28, 1996 (unaudited)
Consolidated Condensed Statements of Cash Flows
for the six month periods ended July 4, 1997
and June 28, 1996 (unaudited)
Notes to Consolidated Condensed Financial Statements
Item II.
Management's Discussion and Analysis of Results of
Operations and Financial Condition
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K
Signatures
<PAGE>
Part I. Financial Information
Salient 3 Communications, Inc. and Subsidiaries
Consolidated Condensed Balance Sheets
July 4, 1997 and January 3, 1997
(Unaudited)
(000's)
<TABLE>
July 4, January 3,
1997 1997
ASSETS
Current assets:
<S> <C> <C>
Cash and cash equivalents $ 1,802 $ 1,482
Accounts receivable, net of allowance
for doubtful accounts of $1,878 and
$1,565, respectively 19,820 20,723
Inventories 21,382 16,244
Deferred income taxes 3,891 4,180
Other current assets 4,780 2,640
Net assets held for sale 38,614 45,996
------ ------
Total current assets 90,289 91,265
Property, plant and equipment, at cost: 41,172 37,105
Less accumulated depreciation and
amortization 19,312 17,821
------ ------
21,860 19,284
Deferred income taxes 8,105 8,105
Other assets - 500
Intangible assets 45,564 36,593
Total Assets $165,818 $155,747
======= =======
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable $ 9,044 $ -
Accounts payable 7,235 7,657
Salaries and wages 1,494 1,256
Income taxes, currently payable 1,937 3,096
Estimated liability for contract losses 1,471 1,539
Other accrued liabilities 8,230 10,654
------ ------
Total current liabilities 29,411 24,202
Long-term debt 38,317 26,549
Other long-term liabilities 5,141 4,967
Self-insured retention 2,409 2,409
Stockholders' equity:
Common stock 8,985 8,985
Capital in excess of par value 38,047 38,091
Warrants outstanding 1,665 1,180
Retained earnings 82,430 89,838
Foreign currency translation adjustment 100 -
Deferred compensation-restricted stock (799) (287)
Treasury stock (39,888) (40,187)
------ ------
90,540 97,620
Total Liabilities and Stockholders' Equity $165,818 $155,747
======= =======
The accompanying notes are an integral part of the consolidated condensed
financial statements.
</TABLE>
<PAGE>
Salient 3 Communications, Inc. and Subsidiaries
Consolidated Condensed Statements of Operations
(Unaudited)
(000's except for share information)
<TABLE>
Six Months Ended Three Months Ended
July 4, 1997 June 28, 1996 July 4, 1997 June 28, 1996
<S> <C> <C> <C> <C>
Telecommunications sales $49,377 $40,640 $24,560 $20,472
Cost of goods sold 31,007 26,274 15,585 13,285
------ ------ ------ ------
Gross profit 18,370 14,366 8,975 7,187
Selling, general and
administrative 16,112 10,432 8,636 5,433
Purchased in-process
research & development 6,150 - 6,150 -
Research & development 4,457 3,461 2,410 1,653
Intangible amortization 809 380 458 193
----- ----- ----- -----
Operating profit (loss) (9,158) 93 (8,679) (92)
Interest income 33 169 15 67
Interest expense 1,123 116 629 54
------ ---- ----- ----
Pre-tax income (loss)
from continuing operations (10,248) 146 (9,293) (79)
Provision (benefit) for taxes
on income (1,519) 55 (1,178) (30)
----- --- ----- ---
Net income (loss)
from continuing operations (8,729) 91 (8,115) (49)
Income from discontinued operations:
Technical Services Segment
(less applicable income taxes of
$498 and $880 for the six month
periods ended and $195 and $521
for the three month periods
ended, respectively) 860 1,427 314 841
Gain on disposal of a Technical
Services Company (less applicable
income taxes of $583) 1,080 - 1,080 -
Real Estate Segment
(less applicable income taxes of
$381 and $445 for the six month
periods ended and $202 and $249
for the three month periods
ended, respectively) 659 722 336 402
----- ----- ----- -----
Net income from
discontinued operations 2,599 2,149 1,730 1,243
Total net income (loss) $(6,130) $2,240 $(6,385) $1,194
===== ===== ===== =====
Per share of common stock:
Net income (loss)
from continuing operations $(1.38) $0.01 $(1.28) $(0.01)
Net income from
discontinued operations:
Technical Services Segment $0.31 $0.23 $0.22 $0.13
Real Estate Segment $0.10 $0.12 $0.05 $0.07
---- ---- ---- ----
Total earnings per share $(0.97) $0.36 $(1.01) $0.19
==== ==== ==== ====
Cash dividend per share $0.20 $0.40 $0.10 $0.20
Average number of shares
of common stock 6,312,166 6,287,406 6,307,880 6,289,030
The accompanying notes are an integral part of the
consolidated condensed financial statements.
<PAGE>
Salient 3 Communications, Inc. and Subsidiaries
Consolidated Condensed Statements of Cash Flows
(Unaudited) Six Months Ended
(000's) July 4, June 28,
1997 1996
</TABLE>
<TABLE>
Cash flows from operating activities:
<S> <C> <C>
Net income (loss) $(6,130) $2,240
Adjustments to reconcile net income (loss) to net
cash provided by (used for) operating activities:
Gain on the sale of subsidiary (1,663) -
Purchased in-process research and
development write-off 6,150 -
Other items not affecting cash 4,486 3,673
Changes in current assets and current liabilities,
net of effects from acquisitions and disposition (6,182) (864)
Other, net - (278)
----- -----
Net cash provided by (used for) operating activities (3,339) 4,771
Cash flows from investing activities:
Payments for acquisitions (19,302) (954)
Payments for property, plant and equipment (3,817) (3,122)
Proceeds from sale of subsidiary 7,213 -
Proceeds from sale of property, plant
and equipment - 912
------ -----
Net cash used for investing activities (15,906) (3,164)
Cash flows from financing activities:
Proceeds from issuance of debt 19,900 -
Payments of debt (8,123) (1,003)
Borrowings under note payable 9,044 -
Issuance of treasury stock in connection
with stock option, award and purchase
plans 83 300
Payments to acquire treasury stock (384) (421)
Cash dividends paid (1,278) (2,515)
Other, net 323 (308)
------ -----
Net cash provided by (used for) financing activities 19,565 (3,947)
Net increase (decrease) in cash and cash equivalents 320 (2,340)
Cash and cash equivalents at beginning of period 1,482 11,119
----- ------
Cash and cash equivalents at end of period $1,802 $8,779
===== =====
Supplemental cash flow disclosures:
Interest paid $1,562 $80
Income taxes paid, net of refunds received $1,164 $971
The accompanying notes are an integral part of the
consolidated condensed financial statements.
</TABLE>
<PAGE>
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
(000's except for share and per share information)
1. On June 24, 1997, the Company sold its SRA Technologies, Inc. (SRA)
subsidiary to Dames & Moore, Inc. for $8,800 in cash. The sale of SRA
resulted in a $1,080 gain, net of income taxes of $583, or $.17 per
share. Proceeds were used to reduce the Company's outstanding debt.
2. On July 31, 1997, the Company sold its real estate complex, Green
Hills Corporate Center to Brandywine Realty Trust for $40,000,
substantially all in cash. The Company anticipates an after-tax gain
of approximately $7,000.
3. In the first quarter of 1997, the Company elected discontinued
operations treatment for both its Technical Services and Real Estate
Segments. Discontinued operations treatment reflects the progress
made in the first quarter towards divestiture of these segments.
The results for technical services and the real estate segments have
been classified as discontinued operations for all periods presented
in the Consolidated Condensed Statements of Operations and Balance
Sheets. The assets and liabilities of the discontinued operations
have been classified in the Consolidated Condensed Balance Sheets as
"Net assets held for sale." Discontinued operations have not been
segregated in the Statement of Consolidated Cash Flows and, therefore,
amounts for certain captions will not agree with the respective
Consolidated Condensed Statements of Operations.
The following is a summary of revenue by discontinued segment:
Three Months Ended Six Months Ended
July 4, 1997 June 28, 1996 July 4, 1997 June 28, 1996
Revenues:
Technical Services $18,382 $21,669 $36,093 $43,250
Real Estate 2,180 2,148 4,330 4,287
------ ------ ------ ------
$20,562 $23,817 $40,423 $47,537
4. On April 30, 1997, the Company announced that it changed its name from
Gilbert Associates, Inc. to Salient 3 Communications, Inc. The name
change resulted from the Company's plan to solely focus on
telecommunications.
5. The financial statements furnished herein reflect all adjustments
which are, in the opinion of management, necessary for a fair
presentation of financial position and results of operations for the
interim periods. Such adjustments are of a normal recurring nature.
The consolidated condensed financial statements have been reclassified
to conform with current year presentation.
6. Net income per share of common stock was determined using the average
number of Class A and Class B shares outstanding. The effect on net
income per share resulting from dilution upon exercise of outstanding
stock options, warrants and restricted stock is not material, and
therefore is not shown.
No preferred stock was outstanding as of July 4, 1997.
7. During the first quarter of 1997 and the second quarter of 1996,
several key employees were issued an aggregate of 39,000 and 34,500
shares, respectively, of restricted stock in the Company. The value
of this stock is recorded as deferred compensation in the
stockholders' equity section of the consolidated condensed balance
sheets, and will be expensed over the vesting period. The vesting
period will not exceed 10 years and may be accelerated depending upon
the achievement of certain objectives.
8. The components of inventories as of the balance sheet dates are as
follows:
July 4, 1997 Jan. 3, 1997
Raw material $11,468 $10,755
Work in process 3,742 1,768
Finished goods 6,172 3,721
------ ------
$21,382 $16,244
9. Other accrued liabilities includes an accrual relating to workers'
compensation of $1,966 and $2,082 at July 4, 1997 and January 3, 1997,
respectively.
10. On September 30, 1996, the Company acquired the assets of SAFCO
Corporation's Electronic Systems Division (ESD), which was
subsequently renamed SAFCO Technologies (SAFCO). As part of the asset
purchase agreement, the Company paid former shareholders $1,204 during
the first quarter of 1997.
11. On April 21, 1997, the Company acquired all of the outstanding capital
stock of TEC Cellular, Inc. (TEC) for $14,000 in cash subject to
certain adjustments plus seven year warrants exercisable to purchase
100,000 shares of the Company stock at $18 per share. Also, depending
upon the achievement of certain earnings objectives in 1997, the
former shareholders of TEC may be entitled to an additional $1,000
payment. Any payment will increase goodwill. TEC is part of the
Company's wireless telecommunication business and is a division of
SAFCO.
In conjunction with the TEC acquisition, the Company recorded a $6,150
charge with no tax benefit, or $.97 per share, for purchased in-
process research and development costs. The purchased in-process
research and development has not yet reached technological feasibility
and had no alternative future use as of the date of closing.
On April 30, 1997, the Company acquired all of the outstanding stock
of DAC Ltd. (DAC) for 3 million pounds (approximately $5,000). DAC is
part of the Company's industrial telecommunication business and is a
subsidiary of GAI-Tronics Corporation.
12. During the first quarter of 1997, the Financial Accounting Standards
Board (FASB) issued Statement 128, which specifies the computation,
presentation, and disclosure requirements for earnings per share (EPS)
for public companies. This statement is effective for financial
statements for both interim and annual periods ending after December
15, 1997 and adoption of this statement for the Company will occur in
the fourth quarter of 1997. This statement would not materially
affect the Company's EPS calculation.
13. During the first quarter of 1997, the Company paid $1,000 to the
former principals of Instruments Associates, Inc. as part of the 1993
purchase agreement.
14. The Company has elected to allocate interest not specifically
associated with any segment based upon a ratio of net assets.
Interest expense allocated to discontinued operations was not material
in either of the six and three month periods ended July 4, 1997.
<PAGE>
Management's Discussion and Analysis of Results of Operations and
Financial Condition
Results of Operations
In June 1996, the Board of Directors announced that the Company had
begun to explore strategic options for its remaining units within the
technical services and real estate segments. During the first quarter
of 1997, the Company adopted discontinued operations treatment for its
technical services and real estate segments.
On April 30, 1997, the Company announced that it changed its name from
Gilbert Associates, Inc. to Salient 3 Communications, Inc. The name
change resulted from the Company's plan to solely focus on
telecommunications.
For the six months ended July 4, 1997, the Company lost $8,729 or $1.38
per share from continuing operations. Included in the results, is a
$6,150 charge or $.97 per share for purchased in-process research and
development associated with the TEC Cellular Inc. (TEC) acquisition
(Note 11). The purchased in-process research and development has not
yet reached technological feasibility and had no alternative future use
as of the date of closing.
Excluding the write-off of purchased in-process research and
development, the Company reported a loss from continuing operations of
$2,579 or $.41 per share for the first half of 1997 compared to income
of $91 or $.01 per share for 1996. The net loss from continuing
operations is primarily due to its SAFCO unit and to a much lesser
extent reduced revenue from the wireline unit in the second quarter of
1997. SAFCO's results suffered due the fact that its business is very
seasonal, product delays and restructuring their global sales force.
SAFCO has historically generated losses in the first half of the year.
The Company expects SAFCO's operations will improve during the
second half of 1997. SAFCO was acquired on September 30, 1996. Given the
seasonality of SAFCO's business, and increased interest expense and
goodwill amortization associated with the SAFCO acquisition, the
Company's results suffered.
For the quarter, excluding the write-off of purchased in-process
research and development, the Company reported a loss from continuing
operations of $1,965 or $.31 per share compared to a loss of $49 or $.01
per share for 1996. The net loss from continuing operations is
primarily due to results from SAFCO as mentioned above and reduced
revenue from the wireline unit.
The Company anticipates improvement in results of operations in the
second half of the year, as a result of improvement in SAFCO's
operations and normal second half strength of the business.
Revenue from continuing operations increased 21% and 20% for the six and
three month periods in 1997, respectively, compared to the same periods
in 1996. The increases were primarily due to the SAFCO and TEC
(wireless unit) and DAC Ltd. (industrial unit) acquisitions.
The following is a breakdown of revenue by telecommunication unit:
Year to Date Second Quarter
1997 1996 1997 1996
Industrial $24,443 $19,650 $13,159 $9,529
Wireline 14,802 16,332 5,298 8,409
Wireless 10,132 4,658 6,103 2,534
------ ------ ------ ------
Total $49,377 $40,640 $24,560 $20,472
The higher industrial revenue in both the six and three month periods of
1997 is due primarily to the DAC acquisition and increased demand for
products in the markets served and the introduction of new products by
the Company's GAI-Tronics unit.
The decline in wireline revenue stems from a drop off of demand for
analog channel units in the second quarter prompted by certain re-use
programs now in place at some of their customers.
The wireless improvement in sales in both periods is due primarily to
the SAFCO and TEC acquisitions and was somewhat offset by lower revenue
from Instrument Associates Inc. in the second quarter. SAFCO and TEC
had combined revenues of $6,460 and $4,463 in the six and three month
periods of 1997.
The gross profit percentage increased from 35% in 1996 to 37% in 1997 in
both the six and three month periods. The increase in gross profit
percentage stems from higher margins realized from the recently acquired
businesses - SAFCO and TEC.
Selling, General and Administration, Research and Development and
Intangible Amortization
Selling, general and administrative, research and development and
intangible amortization increased 54%, 29% and 113%, respectively, in
the first six months of 1997 compared to the same period in 1996.
Selling, general and administrative, research and development and
intangible amortization increased 59%, 46% and 137%, respectively, in
the current quarter compared to the second quarter of 1996. The
increases relate primarily to the acquisitions.
Interest Expense
Interest expense increased in the first six months and second quarter of
1997 as compared to the same periods in 1996 due to the debt incurred to
finance the acquisitions.
Provision (Benefit) for taxes on income (loss)
Excluding the aforementioned adjustment, the effective tax rate was 37%
in the first half and second quarter of 1997 compared to 38% in the same
periods of 1996.
Income from discontinued operations
On June 24, 1997, the Company sold its SRA Technologies, Inc. subsidiary
to Dames & Moore, Inc. for $8,800 in cash. The sale of SRA resulted in
a $1,080 gain, net of income taxes of $583, or $.17 per share.
On July 31, 1997, the Company sold its real estate complex, Green Hills
Corporate Center to Brandywine Realty Trust, for $40,000, substantially
all in cash. The Company anticipates an after-tax gain of approximately
$7,000. The Company has reduced its debt levels with the sales
proceeds.
The Company expects that its remaining discontinued unit, Resource
Consultants, Inc., will remain profitable until the disposition is
completed. The exact timing of the disposition is uncertain but is expected
to occur within the following six months. The Company expects that the
sale of the remaining unit could generate after-tax proceeds of
approximately $15,000 - $20,000.
Liquidity and Capital Resources
Working capital declined by $6,185 in 1997 primarily due to the sale of
SRA. Cash proceeds received on the divestiture were used to reduce
long-term debt.
Amounts generated from operations, anticipated proceeds from the
divestiture, combined with available cash and cash equivalents, and
short-term lines of credit are expected to provide adequate working capital
to satisfy the contingent payments to former XEL, SAFCO, and TEC
shareholders and the repurchase of up to one million shares of the
Company's stock in the open market at least through the end of the current
fiscal year. On June 25, 1997, the Board of Directors authorized an expansion
of the 1995 share repurchase plan to allow the Company to potentially purchase
up to one million shares in the open market.
Lines of credit with CoreStates Bank, N.A., are available to fund both
working capital needs and acquisitions. After the consideration of the
outstanding borrowings and certain loan covenants, the Company has
approximately $500 available under the acquisition and working capital
lines of credit as of July 4, 1997. After considering proceeds from the
Green Hills Corporate Center sale, approximately $37 million will be
available under the lines of credit.
The Company estimates that its total capital expenditures in 1997,
excluding acquisitions, will be approximately $6,500. No restrictions
on cash transfers between the Company and its subsidiaries exist.
In the first quarter of 1997, the Financial Accounting Standards Board
(FASB) issued Statement of Financial Accounting Standards No. 128,
"Disclosure of Information about Capital Structure," which requires
companies to calculate earnings per share on a basic and diluted basis.
The statement becomes effective for the fourth quarter of 1997. The
adoption would not materially affect the Company's earnings per share
calculation for the quarter or six months ended July 4, 1997.
In the second quarter of 1997, the FASB issued Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income," and
Statement of Financial Accounting Standards No. 131, "Disclosures about
Segments of an Enterprise and Related Information". The Company has not
determined the effect of adopting these new pronouncements on the
consolidated financial statements.
The Form 10-Q contains certain statements of a forward-looking nature
relating to future events or the future financial performance of the
Company. Such statements are only predictions and involve risks and
uncertainties, and actual events or performance may differ materially as
expressed in any such forward looking statements. Potential risks and
uncertainties include, without limitation: the effect of general
economic conditions, the impact of competitive products, services and
pricing, and demand and market acceptance risks of current and new
products and services; with respect to the Technical Services segment,
its dependence on the U.S. government as a customer; and with respect to
the Telecommunication segment, the uncertain effect of the
Telecommunications Act of 1996, technology change, and risks of product
development and commercialization difficulties, and the Company's
ability to complete its divestiture program in the time frames and at
the prices indicated and the Company's ability to make acquisitions at
prices which will be accretive to earnings. Further information on
factors that could affect the Company's future financial performance can
be found in the Company's other filings with the Securities and Exchange
Commission. Words used in this report such as "positioned", "yields",
"should generate", "appears", "viewed", "could potentially", "would
position", "expected", and "should allow" indicate the presence of
forward looking statements.
<PAGE>
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
3(i) Amended Certificate of Incorporation of Salient 3
Communication Inc.
3(ii) Amended Bylaws of Salient 3 Communication Inc.
(b) Reports on Form 8-K
(1) The registrant filed Form 8-K on April 23, 1997 which
announced the acquisition of TEC Cellular, Inc. and an
agreement to purchase DAC Ltd.
(2) The registrant filed Form 8-K on May 1, 1997 which
announced that the Company changed its name from
Gilbert Associates, Inc. to Salient 3 Communications,
Inc.
(3) The registrant filed Form 8-K on July 2, 1997 for the
sale of SRA Technologies, Inc., including Pro Forma
Unaudited Consolidated Condensed Financial Statements,
and announced an agreement to sell the Green Hills
Corporate Center.
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.
Salient 3 Communications, Inc.
/s/Paul H. Snyder
Paul H. Snyder
Senior Vice President and
Chief Financial Officer
Date: August 13, 1997
<PAGE>
CERTIFICATE OF INCORPORATION
OF
SALIENT 3 COMMUNICATIONS, INC.
SALIENT 3 COMMUNICATIONS, INC. (the "Corporation"), a corporation
organized and existing under and by virtue of the General Corporation Law of
the State of Delaware, does hereby certify:
FIRST: That the Board of Directors of the Corporation duly adopted a
resolution declaring advisable the amendment of the Certificate of
Incorporation of the Corporation and submitting the same to the stockholders
of the Corporation for approval. The resolution setting forth the proposed
amendment is as follows:
RESOLVED, that the Board of Directors hereby approves the following
amendments to the Corporation's Certificate of Incorporation (the
"Certificate"):
1. Deleting the entire text of Articles FIFTH, SIXTH and SEVENTH thereof
and substituting, in each case, in lieu thereof the word "Reserved".
2. Deleting the entire text of Article NINTH thereof and redesignating the
current Article TENTH as Article NINTH.
3. Amending subsection (b) of Article EIGHTH by (i) deleting subsections (1)
and (3) thereof in their entirety, (ii) deleting the ":" in the first sentence
thereof, (iii) deleting the paragraph number designation of subsection (2),
and (iv) substituting the word "to" for the word "To" in the current
subsection (2).
4. Amending subsection (c) of Article EIGHTH by deleting the current text of
this subsection in its entirety.
5. Amending subsection (e) of Article EIGHTH by deleting the current text of
this subsection in its entirety.
6. Amending Article SECOND of the Certificate to read in its entirety as
follows:
Its registered office in the State of Delaware and New Castle
County shall be 1013 Centre Road, Wilmington, DE, 19801. The
registered agent at such address shall be United States Corporation
Company.
7. Amending subsection (c) of Article FOURTH of the Certificate by
designating the text starting with the words "Class A Common Stock" and
ending with the words "Class B Common Stock of the Corporation" as
clause (i), and by adding the following text immediately before the words
"share for share":
share for share, or (ii) Class B Common Stock of the Corporation
to be converted into Class A Common Stock of the Corporation,
8. Amending subsection (e) of Article FOURTH of the Certificate by deleting
the words "its class" at the end of such subsection, and by substituting in
lieu thereof the words "Common Stock".
9. Amending subsection (f) of Article FOURTH of the Certificate by deleting
the last sentence thereof in its entirety.
10. Amending the last sentence of subsection (g) of Article FOURTH of the
Certificate by (i) deleting the words ", and the amount of the capital stock
which may be issued and outstanding at any time," and (ii) by replacing the
words "outstanding Class B Common Stock" with the words "shares of
Common Stock then entitled to vote at an election of directors".
11. Amending Article EIGHTH by adding a new subsection to be designated as
subsection (c):
(c) The Corporation shall be governed by subsection (c)(2) of
Section 141 of the Delaware General Corporation Law.
12. Amending subsection (d) of Article EIGHTH by deleting the current text
of this subsection in its entirety.
13. Amend Article EIGHTH by adding the following new subsection to be
designated as subsection (d):
(d) The election of the directors of the Corporation need not be by
written ballot unless the Bylaws of the Corporation shall so
provide.
14. Amending subsection (g) of Article EIGHTH by (i) redesignating the entire
text of this subsection as subsection (e), and (ii) adding the following text
at the end of such subsection:
If the Delaware General Corporation Law is amended after the
filing of the Certificate of Incorporation of which this article is a
part to authorize corporate action further eliminating or limiting the
personal liability of directors, then the liability of a director of the
Corporation shall be eliminated or limited to the fullest extent
permitted by the Delaware General Corporation Law, as so
amended.
15. Amend Article FIFTH by deleting the entire text thereof, and substituting
in lieu thereof the following text:
FIFTH: The Board of Directors shall be divided into three classes,
as nearly equal in number as the then total number of directors
constituting the entire Board of Directors permits. At the 1997
annual meeting of the stockholders of the Corporation (the "First
Meeting"), directors of the first class shall be elected to hold office
for a term expiring at the next succeeding annual meeting, directors
of the second class shall be elected to hold office for a term expiring
at the second succeeding annual meeting and directors of the third
class shall be elected to hold office for a term expiring at the third
succeeding annual meeting. At each annual meeting of the
stockholders of the Corporation following the First Meeting, the
successors to the class of directors whose term shall then expire
shall be elected to hold office for a term expiring at the third
succeeding annual meeting.
SECOND: That the stockholders of the Corporation, at a meeting duly called
and held, consented to the aforesaid amendments.
THIRD: That the amendments were duly adopted in accordance with the
provisions of ss 242 of the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, SALIENT 3 COMMUNICATIONS, INC. has caused
this certificate to be signed by Timothy S. Cobb, its President, this 31st
day of July, 1997.
/s/Timothy S. Cobb
Timothy S. Cobb, President
<PAGE>
Bylaws for Salient 3 Communications, Inc.
INDEX
Offices
Seal
Stockholders' Meeting
Committees of the Board
Compensation of Directors
Meetings of the Board
Quorum
Officers
Chairman of the Board
President
Executive Vice President - Vice Presidents
General Counsel
Secretary and Assistant Secretaries
Treasurer and Assistant Treasurers
Controller
Duties of Officers May Be Delegated
Right of Indemnification of Directors and Officers
Stocks of Other Corporations
Certificates of Stock
Transfers of Stock
Registered Stockholders
Lost Certificates
Books, Accounts and Records
Checks, Drafts and Notes
Fiscal Year
Dividends
Notices
Waiver of Notice
Amendments
<PAGE>
BYLAWS
OF
SALIENT 3 COMMUNICATIONS, INC.
OFFICES
1. The registered office of the corporation in the State of Delaware
shall be established and maintained at the principal business office of the
individual or corporation acting as the corporation's registered agent in said
State.
2. The corporation may have offices at such other place or places
as the Board of Directors may from time to time determine or the business of
the corporation may require.
SEAL
3. The corporate seal shall have the name of the corporation, the
year of its organization and the words "CORPORATE SEAL, DELAWARE"
inscribed thereon. If authorized by the Board of Directors, the corporate seal
may be affixed to any certificates of stock, bonds, debentures, notes or other
engraved, lithographed or printed instruments, by engraving, lithographing
or printing thereon such seal or a facsimile thereof, and such seal or
facsimile thereof so engraved, lithographed or printed thereon shall have the
same force and effect, for all purposes, as if such corporate seal had been
affixed thereto by indentation.
STOCKHOLDERS' MEETINGS
4. All meetings of the stockholders shall be held at such time and
place as may be fixed by the Board of Directors.
5. The annual meeting of stockholders shall be held any date
selected by the Directors during each year, when the stockholders shall elect
a Board of Directors of the corporation and transact such other business as
may properly be brought before the meeting; provided that, if the Board of
Directors shall determine that in any year it is not convenient or advisable to
hold the meeting on such day, then in such year the annual meeting shall
instead be held on such other day, not more than thirty days after the end of
the calendar year and not a legal holiday, as the Board of Directors shall
prescribe. All meetings of stockholders shall be presided over by the
Chairman of the Board, if present, and otherwise by the President or the
Executive Vice President, except when by statute the election of a presiding
officer shall be required.
6. The holders of a majority of the stock issued and outstanding
and entitled to vote thereat, present in person or represented by proxy, shall
be requisite for and shall constitute a quorum at all meetings of the
stockholders for the transaction of business, except as otherwise provided by
law, by the Certificate of Incorporation, or by these Bylaws. If, however, a
quorum shall not be present or represented at any meeting of the
stockholders, the stockholders entitled to vote thereat, present in person or
by proxy, shall have power to adjourn the meeting, until a quorum shall be
present; provided that, if the adjournment is for more than thirty days, or if
after 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. At such adjourned meeting at which a
quorum shall be present, in person or by proxy, any business may be
transacted which might have been transacted at the meeting as originally
noticed.
7. RESERVED
8. A complete list of the stockholders entitled to vote at the
ensuing election of directors, arranged in alphabetical order, with the
residence of each and the number of voting shares held by each, shall be
prepared by the Secretary and filed in the office where the election is to be
held at least ten days before every election and shall at all times during the
usual hours for business and during the whole time of said election, be open
to the examination of any stockholder.
9. Special meetings of the stockholders for any purpose or
purposes shall be called only by the Board of Directors pursuant to a
resolution adopted by a majority of the whole Board.
10. Business transacted at all special meetings shall be confined to
the objects stated in the call.
11. Notice of meetings of stockholders shall be delivered personally
or mailed, not less than ten nor more than sixty days before the meeting, to
each person who appears on the books of the corporation as a stockholder
entitled to vote at said meeting, except that where the matter to be acted on
is a merger or consolidation or sale, lease or exchange of all or
substantially all of the corporation's assets, such notice
shall be given not less than twenty nor more than sixty days
prior to the meeting. Each such notice shall briefly
state the place, date and hour of the meeting and, in the case of a special
meeting of stockholders, the purpose or purposes of the meeting.
DIRECTORS
12. The number of directors which shall constitute the whole Board
for its first meeting shall be three (3). Thereafter the number of directors
may be changed to not less than three (3) nor more than eleven (11) as fixed
from time to time by a resolution adopted by a majority of the entire Board
of Directors. The Board of Directors shall be divided into three classes, as
nearly equal in numbers as the then total number of directors constituting the
entire Board of Directors permits. At the 1997 annual meeting of the
stockholders of the corporation (the "First Meeting"), directors of the first
class shall be elected to hold office for a term expiring at the
next succeeding annual meeting, directors of the second class
shall be elected to hold office for a term expiring at the second
succeeding annual meeting and directors of the third class
shall be elected to hold office for a term expiring at the third
succeeding annual meeting. At each annual meeting of the stockholders of
the corporation following the First Meeting, the successors to the class of
directors whose term shall then expire shall be elected to hold office for a
term expiring at the third succeeding meeting. Each employee director of
this corporation shall be a holder of Class B Common Stock of the
corporation, if any such shares are outstanding.
13. The property and business of the corporation shall be managed
by its Board of Directors which, in addition to the powers and authorities by
the Certificate of Incorporation and by these Bylaws expressly conferred
upon them, 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 Bylaws directed or required to be exercised or
done by the stockholders.
14. RESERVED
COMMITTEES OF THE BOARD
15. The Board of Directors may designate one or more committees,
each committee to consist of one or more of the Directors of the corporation.
Any such committee shall have and may exercise all the powers and authority
of the Board of Directors to the extent provided in the resolution of the
Board, subject to the Delaware General Corporation Law..
16. Regular minutes of the proceedings of any committee appointed
by the Board of Directors shall be kept by the Secretary or an Assistant
Secretary of the corporation or by a secretary designated from among the
members of the committee, and all proceedings shall be reported to the Board
of Directors at its first meeting following the taking of any action by the
committee. The minutes of the proceedings shall be transcribed in the
regular minute book of the corporation. The presence of a majority of the
members of any such committee shall be necessary to constitute a quorum at
any meeting, and the affirmative vote of a majority of all the members
present at any meeting at which there is a quorum shall be necessary to the
taking of any action or the adoption of any resolution.
COMPENSATION OF DIRECTORS
17. Directors, as such, shall not receive any stated salary for their
services, but by resolution of the Board, a fixed sum and expenses of
attendance, if any, may be allowed for attendance at each regular or special
meeting of the Board; but nothing herein contained shall be construed to
preclude any director from serving the corporation in any other capacity and
receiving compensation therefor.
18. Members of special or standing committees may be allowed like
compensation for attending committee meetings.
MEETINGS OF THE BOARD
19. The directors may hold their meetings at such places, either
within or without the State of Delaware, as shall, from time to time, be
determined by the Board.
20. The first meeting of the Board of Directors in each year at
which a quorum shall be present, held next after the annual meeting of
stockholders at which directors shall have been elected, shall be held for the
purpose of organization, the election of officers, and the transaction of any
other business which may come before the meeting.
21. Regular meetings of the Board may be held without notice at
such time and place as shall from time to time be determined by the Board.
22. Special meetings of the Board may be called by the Chairman of
the Board, the President, or the Executive Vice President or any two
directors. The Secretary or other officer performing his duties shall give
notice of such meetings either personally or by mail or by telegram at least
twenty-four hours before the meeting. Meetings may be held at any time and
place without such notice if all the directors are present or if those not
present waive notice either before or after the meeting.
23. Members of the Board of Directors, or any committee thereof,
may participate in a meeting of such Board, or committee, by means of a
conference telephone or similar communications equipment by means of
which all persons participating in the meeting can hear each other, and such
participation shall constitute presence in person at such meeting.
24. Whenever any action is required or permitted to be taken by
vote at a meeting of the Board of Directors, or any committee thereof, such
action may be taken without a meeting if all members of the Board of
Directors, or such committee, consent thereto in writing and such written
consent or consents are filed with the minutes of the proceedings of the
Board of Directors, or such committee; and each such consent shall have the
same effect as a unanimous vote at a meeting of the Board of Directors, or
such committee, as the case may be.
QUORUM
25. A majority of the whole number of directors shall be requisite
for and shall constitute a quorum at all meetings of the Board for the
transaction of business, and the act of a majority of the directors present at
any meeting at which there is a quorum, shall be the act of the Board of
Directors, except as may be otherwise specifically provided by statute or by
the Certificate of Incorporation or by these Bylaws. If a quorum shall not be
present at any meeting of directors, the directors present thereat may adjourn
the meeting from time to time, without notice other than announcement at the
meeting until a quorum shall be present.
OFFICERS
26. The officers of the corporation may include a Chairman of the
Board, a President, an Executive Vice President, one or more Vice
Presidents, a General Counsel, a Treasurer, one or more Assistant
Treasurers, a Secretary, one or more Assistant Secretaries, a Controller, and
such other officers and agents as may be deemed necessary, who shall be
chosen by the Board of Directors as hereinabove provided, and shall hold
their offices until their respective successors are chosen and qualified. None
of the officers, except the Chairman of the Board if there be one and the
President, need be a director. One person may hold the offices of Secretary
and Treasurer, or Vice President and Treasurer or Vice President and
Secretary, but not the offices of Vice President, Secretary and Treasurer.
Any officer elected or appointed by the Board of Directors may be removed
at any time, with or without cause, by the affirmative vote of a majority of
the whole Board of Directors. If the office of any officer of the corporation
shall become vacant for any reason, the Board, by a majority vote of those
present at any meeting at which a quorum is present, may choose a successor
or successors, who shall hold office for the unexpired term in respect of
which such vacancy occurred.
27. The salaries of all officers and agents of the corporation shall be
fixed by the Board of Directors.
CHAIRMAN OF THE BOARD
28. The Chairman of the Board if there be one, shall preside at all
meetings of the Board of Directors and of the stockholders, except when by
statute the election of a presiding officer shall be required. He shall
exercise or delegate the authority to exercise the functions of the President
during the absence or disability of the President. He shall have such
other powers and perform such other duties as may be prescribed from time
to time by law, by the Bylaws or by the Board of Directors.
PRESIDENT
29. The President shall, in the absence of the Chairman of the
Board, preside at all meetings of the stockholders and of the Board of
Directors. He shall have general supervision of the affairs of the corporation
and may sign or countersign all certificates, contracts or other instruments of
the corporation, and shall perform such other duties as are incident to his
office or are properly required of him by the Board of Directors.
EXECUTIVE VICE PRESIDENT - VICE PRESIDENTS
30. (a) The Executive Vice President, if there be one, shall
exercise the functions of the President during the absence or disability of the
President. He shall also perform such other and further duties as may from
time to time be assigned to him by the Board of Directors.
(b) The Vice President - Finance, if there be one, shall be the
principal financial and accounting officer of the corporation, shall be
generally responsible for the financial and accounting aspects of the
corporation and shall supervise and control the offices of the Controller and
Treasurer. He shall also perform such other and further duties as may, from
time to time, be assigned to him by the Board of Directors.
(c) The Vice President or Vice Presidents shall perform the
duties of the President or Executive Vice President in their respective
absences or during their respective inability to act. Any action taken by a
Vice President in performance of the duties of the President or the Executive
Vice President shall be prima facie evidence of the absence or inability to act
of the President or the Executive Vice President at the time such action was
taken. The Vice Presidents shall have such other and further powers and
shall perform such other and further duties as may from time to time be
assigned to them respectively by the Board of Directors or by the Chairman
of the Board, the President or Executive Vice President.
GENERAL COUNSEL
31. The General Counsel, if there be one, shall be the principal legal
officer of the corporation. The General Counsel shall be generally
responsible for all matters of a legal nature including, but not limited to,
administration of all litigation in which the corporation, from time to time,
may become involved, review of legal opinions as required in connection
with the business of the corporation and review of legal principles involved
in contracts of the corporation. He shall report to the President and shall
perform such other and further duties as may from time to time be assigned
to him by the Board of Directors or the President.
SECRETARY
AND ASSISTANT SECRETARIES
32. The Secretary shall attend all meetings of the Board of Directors
and of the stockholders and record all votes and the minutes of all
proceedings in a book or books to be kept by him 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 of
the Board of Directors and shall perform such other duties as may be
prescribed by the Board of Directors, or the Chairman of the Board, under
whose supervision he shall be. Any records kept by him shall be the
property of the corporation and shall be restored to the corporation in case of
his death, resignation, retirement or removal from office. He shall be the
custodian of the seal of the corporation, and, when authorized by the Board
of Directors or by the Chairman of the Board, the President or any Vice
President, shall affix the same to all instruments requiring it and shall
attest the same. He shall have control of the stock ledger, stock
certificate book and other formal records and documents relating to the
corporate affairs of the corporation.
The Assistant Secretary or Assistant Secretaries shall assist the
Secretary in the performance of his duties and shall exercise and perform his
powers and duties in his absence or inability, and such powers and duties as
may be conferred or required by the Board of Directors.
TREASURER
AND ASSISTANT TREASURERS
33. (a) The Treasurer shall have the custody of the funds and
securities of the corporation 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.
(b) He shall disburse the funds of the corporation in such
manner as may be ordered by the Board of Directors or by the Chairman of
the Board or the President or any Vice President, taking proper vouchers for
such disbursements, and shall render to the Chairman of the Board or the
President or the Vice President - Finance, and to the directors, at the regular
meetings of the Board, or whenever they may require it, an account of all his
transactions as Treasurer and of the financial condition of the corporation.
(c) The Treasurer shall exercise the powers and duties of his
office subject to the supervision and control of the Vice President - Finance,
if there be one. He shall have such other and further powers and shall
perform such other and further duties as may, from time to time, be assigned
to him by the Board of Directors.
(d) He shall give the corporation a bond, if required by the
Board of Directors, in such sum and in form and with one or more sureties
satisfactory to the Board 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.
The Assistant Treasurer or Assistant Treasurers shall assist the
Treasurer in the performance of his duties and shall exercise and perform his
powers and duties, in his absence or inability, and such powers and duties as
may be conferred or required by the Board of Directors.
CONTROLLER
34. The Controller of the corporation, subject to the supervision and
control of the Vice President - Finance, if there be one, shall have full
control of all the books of account of the corporation and keep a true and
accurate record of all property owned by it, of its debts and of its revenues
and expenses and shall keep all accounting records of the corporation other
than the record of receipts and disbursements and those relating to the
deposit or custody of money and securities of the corporation, which shall be
kept by the Treasurer, and shall also make reports to the Chairman of the
Board, if there be one, the President, the Vice President - Finance, if there
be one, and the Directors and others of or relating to the financial condition
of the corporation. He shall have such other and further powers and shall
perform such other and further duties as may be assigned to him from time to
time by the Board of Directors. If a Controller shall not be elected, the
duties of the office of the Controller shall be included as part of those of
the Treasurer.
DUTIES OF OFFICERS MAY BE DELEGATED
35. In case of the absence of any officer of the corporation, or for
any other reason that the Board of Directors may deem sufficient, the Board
may delegate, for the time being, the powers or duties, or any of them, of
such officer to any other officer or to any director.
RIGHT OF INDEMNIFICATION OF DIRECTORS AND OFFICERS
36. INDEMNIFICATION:
(a) Right to Indemnification:
Each person who was or is a party or is threatened to be made a
party to or is involved in any action, suit or proceeding, whether civil,
criminal, administrative or investigative ("Proceeding"), including without
limitation Proceedings by or in the right of the corporation to procure a
judgment in its favor, by reason of the fact that he or she or a person for
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 or 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 General Corporation Law of the State of
Delaware, as the same exists or may hereafter be amended (but, in the case
of any such amendment, only to the extent such amendment permits the
corporation to provide broader indemnification rights than said law permitted
the corporation to provide prior to such amendment) 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. Such right shall
be a contract right and shall include the right to be paid by the corporation
for 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 of the corporation 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.
(b) Right of Claimant to Bring Suit:
If a claim under Subsection (a) is not paid in full by the
corporation within ninety (90) 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 General
Corporation Law of the State of Delaware 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 General
Corporation Law of the State of Delaware, 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.
(c) Non-Exclusivity of Rights:
The rights conferred by Subsections (a) and (b) 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, vote
of stockholders or disinterested directors or otherwise.
(d) 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 General Corporation Law of the State of
Delaware.
STOCKS OF OTHER CORPORATIONS
37. The Board of Directors shall have the right to authorize any
director, officer or other person on behalf of the corporation to attend, act
and vote at meetings of the stockholders of any corporation in which the
corporation shall hold stock, and to exercise thereat any and all rights and
powers incident to the ownership of such stock, and to execute waivers of
notice of such meetings and calls therefor; and authority may be given to
exercise the same either on one or more designated occasions, or generally
on all occasions until revoked by the Board. In the event that the Board shall
fail to give such authority, such authority may be exercised by the Chairman
of the Board or President in person or by proxy appointed by him on behalf
of the corporation.
CERTIFICATES OF STOCK
38. The certificates of stock of the corporation shall be numbered
and shall be entered in the books of the corporation as they are issued. They
shall be in the form approved by the Board of Directors. They shall exhibit
the holder's name and number of shares and shall be signed by the Chairman
of the Board or President and the Treasurer or an Assistant Treasurer, or the
Secretary or an Assistant Secretary, and the seal of the corporation shall be
affixed thereto. Where any such certificates of stock are signed by a transfer
agent or transfer clerk and by a registrar, the signatures of the Chairman of
the Board or President and the Treasurer or an Assistant Treasurer, or the
Secretary or an Assistant Secretary upon any such certificates, if authorized
by the Board of Directors, may be made by engraving, lithographing or
printing thereon a facsimile of such signatures, in lieu of actual signatures,
and such facsimile signatures so engraved, lithographed or printed thereon
shall have the same force and effect as if such officers had actually signed
the same.
In case any officer or officers who shall have signed or whose
facsimile signature or signatures shall have been affixed to any such
certificate or certificates, shall cease to be such officer or officers of the
corporation before such certificate or certificates shall have been delivered
by the corporation, such certificate or certificates may nevertheless be issued
and delivered as though the person or persons who signed such certificate, or
whose facsimile signature or signatures shall have been affixed thereto had
not ceased to be such officer or officers of the corporation.
TRANSFERS OF STOCK
39. No holder of Class B Common Stock of the corporation,
desirous of selling or transferring any share or shares of such Class B
Common Stock of the corporation, shall have the power to sell or transfer
any such share or shares unless and until he shall first have offered the same
for sale to the corporation at the actual price at which it is proposed to sell
or transfer the same. Such offer shall be made in writing signed by such
stockholder and sent by mail to the corporation at its principal place of
business, and shall remain good for acceptance by the corporation for a
period of thirty days from the date of receipt thereof and shall be
accompanied by a written offer signed by the proposed purchaser, giving his
name and address and his offering price. Any pledgee of any share or shares
of Class B Common Stock of the corporation, before bringing any suit,
action or proceedings, or doing any act to foreclose his pledge, shall first
offer such stock for sale to the corporation at the fair market value of such
stock. Such offer shall remain good for acceptance by the corporation for a
period of thirty days after receipt thereof. In case an offer above referred
to shall not be accepted by the corporation within such thirty-day period, such
share or shares may be sold or transferred to such proposed purchaser.
40. Transfers of stock shall be made on the books of the corporation
only by the person named in the certificate or by attorney, lawfully
constituted in writing, and upon surrender of the certificate therefor.
41. RESERVED
REGISTERED STOCKHOLDERS
42. The corporation shall be entitled to treat the holder of record of
any share or shares of stock as the holder in fact thereof and accordingly
shall not be bound to recognize any equitable or other claim to or interest in
such shares on the part of any other person, whether or not it shall have
express or other notice thereof, save as expressly provided by the laws of
Delaware.
LOST CERTIFICATES
43. Any person claiming a certificate of stock to be lost or destroyed
shall make an affidavit or affirmation of that fact, whereupon a new
certificate may be issued of the same tenor and for the same number of
shares as the one alleged to be lost or destroyed; provided, however, that the
Board of Directors may require, as a condition to the issuance of a new
certificate, a bond of indemnity in such form and amount and with such
surety or sureties, or without surety, as the Board of Directors shall
determine and may also require the advertisement of such loss in such
manner as the Board may prescribe.
BOOKS, ACCOUNTS AND RECORDS
44. Except as otherwise provided by law, the books, accounts and
records of the corporation may be kept within or without the State of
Delaware at such place as the Board of Directors shall from time to time
determine.
CHECKS, DRAFTS AND NOTES
45. All checks or demands for money and notes of the corporation
shall be signed by such person or persons (who may or may not be an officer
or officers of the corporation) as the Board of Directors may from time to
time designate, either directly or through such officers of the corporation as
shall, by resolution of the Board of Directors, be authorized to designate
such person or persons.
If authorized by the Board of Directors, the signatures of the
authorized signers upon checks drawn on the payroll, general and dividend
accounts of this corporation may be made by printing thereon a facsimile of
such signatures, in lieu of actual signatures, and such facsimile signatures so
printed thereon shall have the same force and effect as if such authorized
signers had actually signed the same.
FISCAL YEAR
46. The fiscal year shall be fixed by the Board of Directors.
DIVIDENDS
47. Before payment of any dividend or making any distribution of
surplus, there may be set aside out of surplus such sum or sums as the
directors from time to time, in their absolute discretion, think proper as a
reserve fund 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 interests of the
corporation.
NOTICES
48. Whenever under the provisions of these Bylaws notice is
required to be given to any director, officer or stockholder, it shall not be
construed to require personal notice, but such notice may be given in
writing, either by telegram, or by mail, by depositing the same in a post
office, letter-box or mail chute, maintained by the U.S. Postal Service, in a
postpaid sealed wrapper, addressed to such stockholder, officer or director at
his address as the same appears on the books of the corporation, and any
notice so sent shall be deemed to have been given at the time when the same
shall be so sent.
WAIVER OF NOTICE
49. Whenever any notice whatever is required to be given under the
provisions of any statute or of the Certificate of Incorporation or of these
Bylaws, 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. Attendance of a person at a meeting of
stockholders, directors or any committee of directors, as the case may be,
shall constitute a waiver of notice of such meeting, except where the person
is attending the meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business because the
meeting is not lawfully called or convened.
AMENDMENTS
50. These Bylaws may be altered, amended, repealed or added to by
the affirmative vote of a majority of the stock issued and outstanding and
entitled to vote or by the Board of Directors acting as above provided;
provided, however, that no change of the time or place of a meeting for the
election of directors, as fixed by these Bylaws, shall be made within sixty
days next before the day on which such election is to be held, and that in
case of any change of such time or place, notice thereof shall be given to
each stockholder in person or by letter mailed to his last known post office
address, at least twenty days before the election is held.
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