<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 8 )*
OIS Optical Imaging Systems, Inc.
- --------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, par value $0.01
- --------------------------------------------------------------------------------
(Title of Class of Securities)
670852102
- --------------------------------------------------------------------------------
(CUSIP Number)
Robert H. Gorlin
2300 Harmon Road
Auburn Hills, Michigan 48326-1714
(810) 340-2178
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
October 31, 1996
- --------------------------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ]
Check the following box if a fee is being paid with the statement [ ]. (A fee
is not required only if the reporting person: (1) has a previous statement on
file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
NOTE: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
(Page 1 of 34 Pages)
- ----------------------
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities,
and for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
<PAGE> 2
SCHEDULE 13D
CUSIP NO. 670852102 Page __2__ of __34__ Pages
_____________________________________________________________________________
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Guardian Industries Corp.
_____________________________________________________________________________
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / /
_____________________________________________________________________________
3 SEC USE ONLY
_____________________________________________________________________________
4 SOURCE OF FUNDS*
WC
_____________________________________________________________________________
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS / /
REQUIRED PURSUANT TO ITEM 2(d) or 2(e)
_____________________________________________________________________________
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
_____________________________________________________________________________
7 SOLE VOTING POWER
NUMBER OF 77,562,451
SHARES ______________________________________________________________
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY -0-
EACH ______________________________________________________________
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON 77,562,451
WITH ______________________________________________________________
10 SHARED DISPOSITIVE POWER
-0-
_____________________________________________________________________________
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
77,562,451
_____________________________________________________________________________
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) / /
EXCLUDES CERTAIN SHARES*
_____________________________________________________________________________
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
79.8%
_____________________________________________________________________________
14 TYPE OF REPORTING PERSON*
CO
_____________________________________________________________________________
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE> 3
SCHEDULE 13D
CUSIP NO. 670852102 Page __3__ OF __34__ Pages
_____________________________________________________________________________
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
William Davidson
_____________________________________________________________________________
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / /
_____________________________________________________________________________
3 SEC USE ONLY
_____________________________________________________________________________
4 SOURCE OF FUNDS*
PF
_____________________________________________________________________________
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS / /
REQUIRED PURSUANT TO ITEM 2(d) or 2(e)
_____________________________________________________________________________
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
_____________________________________________________________________________
7 SOLE VOTING POWER
NUMBER OF 78,562,451
SHARES ______________________________________________________________
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY -0-
EACH ______________________________________________________________
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON 78,562,451
WITH ______________________________________________________________
10 SHARED DISPOSITIVE POWER
-0-
_____________________________________________________________________________
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
78,562,451
_____________________________________________________________________________
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) / /
EXCLUDES CERTAIN SHARES*
_____________________________________________________________________________
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
80.9%
_____________________________________________________________________________
14 TYPE OF REPORTING PERSON*
IN
_____________________________________________________________________________
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE> 4
SCHEDULE 13D
CUSIP NO. 670852102 Page __4__ OF __34__ Pages
_____________________________________________________________________________
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
GD Investments Corp.
_____________________________________________________________________________
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / /
_____________________________________________________________________________
3 SEC USE ONLY
_____________________________________________________________________________
4 SOURCE OF FUNDS*
00
_____________________________________________________________________________
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS / /
REQUIRED PURSUANT TO ITEM 2(d) or 2(e)
_____________________________________________________________________________
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
_____________________________________________________________________________
7 SOLE VOTING POWER
NUMBER OF 77,562,451
SHARES ______________________________________________________________
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY -0-
EACH ______________________________________________________________
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH 77,562,451
______________________________________________________________
10 SHARED DISPOSITIVE POWER
-0-
_____________________________________________________________________________
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
77,562,451
_____________________________________________________________________________
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) / /
EXCLUDES CERTAIN SHARES*
_____________________________________________________________________________
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
79.8%
_____________________________________________________________________________
14 TYPE OF REPORTING PERSON*
CO
_____________________________________________________________________________
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE> 5
Page __5__ of __34__ Pages
ITEM 1. SECURITY AND ISSUER.
The title of the class of equity securities to which this statement
relates is Common Stock, par value $.01 per share (the "Common Stock"). The
name of the Issuer of the class of securities to which this statement relates
is OIS Optical Imaging Systems, Inc., a Delaware corporation (the "Issuer").
The address of the Issuer's principal executive offices is 47050 Five Mile
Road, Northville, Michigan 48167.
ITEM 2. IDENTITY AND BACKGROUND.
The names of the persons on whose behalf this Amendment No. 8 is being
filed are Guardian Industries Corp. ("Guardian"), William Davidson ("Davidson")
and GD Investments Corp. ("GDIC"). Collectively, all persons filing this
Amendment are referred to as "Applicants".
I. GUARDIAN INDUSTRIES CORP.
(a) - (c). Guardian Industries Corp., a Delaware corporation, is
engaged principally in the manufacture and fabrication of flat glass.
Guardian's principal office address is 2300 Harmon Road, Auburn Hills, Michigan
48326-1714.
The following tabulation sets forth certain information with respect
to the executive officers and directors of Guardian. Each person is a citizen
of the United States and, unless otherwise indicated, has his business address
at Guardian's principal office at 2300 Harmon Road, Auburn Hills, Michigan
48326-1714. If such person's principal occupation is other than as an officer
of Guardian, his position with Guardian is shown parenthetically.
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Page _6_ of _34_ Pages
<TABLE>
<CAPTION>
Principal Occupation and Business
Address if Different from
Guardian's Principal Offices
---------------------------------
<S> <C>
William Davidson President, Chief Executive Officer
and Director
Ralph J. Gerson Executive Vice President and
Director
Russell J. Ebeid President - Glass Division and
Director
Jack W. Sights President - Automotive Products Group
Jeffrey A. Knight Group Vice President - Finance
Peter S. Walters Group Vice President
James D. Moore Group Vice President
Charles G. Croskey Group Vice President
11535 E. Mountain View
Kingsburg, California 93631
Richard Alonzo Vice President - Engineering
Paul Rappaport Vice President and Tax Counsel
Robert H. Gorlin Vice President and General Counsel
Joseph G. Bruce Vice President - Purchasing
David Clark Vice President - Corporate Acquisitions and Finance and Treasurer
Oscar H. Feldman Attorney at Law, Counsel to Butzel
Long
150 West Jefferson
Detroit, Michigan 48226
(Director and Assistant
Secretary)
</TABLE>
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Page _7_ of _34_ Pages
Guardian controls GDIC as a result of its ownership of 85% of the
outstanding shares of GDIC, and, therefore, is also a beneficial owner of the
Issuer's securities owned by GDIC.
II. WILLIAM DAVIDSON
William Davidson is the President, the Chief Executive
Officer, a director, and the controlling shareholder of Guardian. His address
is 2300 Harmon Road, Auburn Hills, Michigan 48326-1714. Mr. Davidson controls
Guardian and, therefore, is also a beneficial owner of the Issuer's securities
owned by GDIC. Mr. Davidson is a citizen of the United States.
III. GD INVESTMENTS CORP.
(a) - (c). GD Investments Corp., a Delaware corporation, is a
holding company. GDIC's address is 2300 Harmon road, Auburn Hills, Michigan
48326-1714.
The following tabulation sets forth certain information with
respect to the executive officers and directors of GDIC. Each person is a
citizen of the United States and has his business address at GDIC's principal
office at 2300 Harmon Road, Auburn Hills, Michigan 48326-1714. Each person's
principal occupation is as an officer and/or employee of Guardian.
Position with GDIC
---------------------------------
William Davidson Director
Russell J. Ebeid Director
Ralph J. Gerson Director
Jeffrey A. Knight President
Robert H. Gorlin Vice President and Secretary
David A. Clark Vice President and Treasurer
<PAGE> 8
Page __8__ of __34__ Pages
Katherine A. Castillo Assistant Treasurer
Gary W. Greene Assistant Treasurer
R. Mark Manion Assistant Treasurer
(d) None of the Applicants nor any of Guardian's or
GDIC's executive officers or directors has, during the last five years, been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors).
(e) None of the Applicants nor any of Guardian's or
GDIC's executive officers or directors has, during the last five years, been a
party to a civil proceeding of a judicial or administrative body of competent
jurisdiction as a result of which he or it was or is subject to any judgment,
decree or final order enjoining future violations of, or prohibiting or
mandating activities subject to, Federal or State securities laws or findings
any violation with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Guardian and Davidson created a new subsidiary, GDIC, and
capitalized GDIC, in part, by contributing the following number of shares of
Common Stock to GDIC on October 31, 1996: (i) Guardian contributed 51,935,048
shares of Common Stock and (ii) Davidson contributed an additional 25,767,403
shares of Common Stock.
ITEM 4. PURPOSE OF TRANSACTION
On October 29, 1996, the Board of Directors of the Issuer
authorized the issuance of 100,000 shares of Series B Cumulative Preferred
Stock, par value $0.01 per share (the "Series B Preferred"), with an original
issuance price of $1,000 per share. The Series B Preferred is not convertible
into Common Stock or any other security and has substantially the same
preferences, rights and privileges as the Series A Cumulative Preferred Stock
of the Issuer, having an original issuance price of $1,000 per share, par value
$.01 per share (the "Series A Preferred"), except that each share of Series B
Preferred
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Page _9_ of _34_ Pages
entitles the holder to 350 votes on each matter submitted to a vote of the
Issuer's shareholders. Resolutions of the Board of Directors of the Issuer
establishing the Series B Preferred are attached to this amended Schedule 13D
as Exhibit 15.
Effective October 30, 1996, the Issuer issued 38,137 shares
of Series B Preferred to Guardian in exchange for the 35,000 shares of Series A
Preferred which Guardian previously acquired (including accrued and unpaid
dividends on the Series A Preferred), pursuant to an Exchange Agreement between
Guardian and the Issuer (the "Exchange Agreement"). The Exchange Agreement is
attached as Exhibit 16 to this amended Schedule 13D.
Effective October 31, 1996, (i) Guardian contributed
51,795,048 shares of Common Stock, 38,137 shares of Series B Preferred and
other property to GDIC, in return for 85% of the outstanding common stock of
GDIC and (ii) Mr. Davidson contributed 25,767,403 shares of Common Stock to
GDIC in return for 15% of the outstanding common stock of GDIC. Guardian and
Davidson previously had purchased the Common Stock as a long term investment in
the Issuer and in order to obtain voting control of the Issuer's voting
securities. The transfer of shares of Common Stock to GDIC allows Guardian and
Davidson to maintain control of the Issuer's voting securities.
Effective October 31, 1996, GDIC purchased an additional
21,000 shares of Series B Preferred from the Issuer for $1,000 per share. The
source of the funds used for the acquisition of these shares of Series B
Preferred was GDIC's working capital. The proceeds from this transaction were
used by the Issuer to retire outstanding indebtedness owed to Guardian and for
working capital purposes.
As a result of the contributions of Common Stock and Series B
Preferred to GDIC, the Issuer is eligible, and has elected, to become a member
of an affiliated group pursuant to Section 1504(a) of the Internal Revenue
Code, as amended, with Guardian, GDIC and Guardian's other qualifying
subsidiaries (the "Affiliated Group"). As a member of the Affiliated Group,
the Issuer's tax attributes generated after October 31, 1996 will be included
in the single consolidated federal income tax return filed by the Affiliated
Group.
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Page _10_ of _34_ Pages
In order to provide funding for future operations of the
Issuer, the Issuer has entered into a Tax Sharing Agreement with Guardian
effective November 1, 1996 (the "Tax Sharing Agreement"). Pursuant to the
terms of the Tax Sharing Agreement, Guardian will compensate the Issuer for the
value of the Issuer's losses and credits which are utilized by the Affiliated
Group by making payments to the Issuer in an amount equal to the difference
between (i) the liability reflected on the Affiliated Group's consolidated
federal income tax return with the inclusion of the Issuer and (ii) the
liability without the inclusion of the Issuer. The Tax Sharing Agreement is
attached as Exhibit 17 to this amended Schedule 13D.
(a) Any of the Applicants may purchase additional Common Stock
or Series B Preferred, sell Common Stock or Series B Preferred, or make
charitable contributions of Common Stock from time to time, depending on their
evaluation of market conditions, the prospects for their investment in the
Issuer, and other factors any of them may deem relevant from time to time.
(b)-(j) None of the Applicants have any plans or proposals
which relate to or would result in an extraordinary corporate transaction, such
as a merger, reorganization or liquidation, involving the Issuer or any of its
securities; a sale or transfer of a material amount of assets of the Issuer or
any of its subsidiaries; any change in the present board of directors or
management of the Issuer, including any plans or proposals to change the number
or term of directors or to fill any existing vacancies on the board; any
material change in the present capitalization or dividend policy of the issuer;
any other material change in the Issuer's business or corporate structure;
changes in the Issuer's charter, bylaws or other actions which may impede the
acquisition of control of the Issuer by any person; causing a class of
securities of the Issuer to be delisted from a national securities exchange or
to cease to be authorized to be quoted in an inter-dealer quotation system of a
registered national securities association; a class of equity securities of the
Issuer becoming eligible for termination of registration pursuant to Section
12(g)(4) of the Act; or any action similar to any of those enumerated above in
response to sub-items (b)-(j).
<PAGE> 11
Page _11_ of _34_ Pages
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) GDIC beneficially owns 77,562,451 shares of Common
Stock (or approximately 79.8% of the shares that are deemed to be outstanding
under the Rules of the Securities and Exchange Commission).
Guardian controls GDIC and as the majority shareholder of
GDIC, could be considered a beneficial owner of the 77,562,451 shares of Common
Stock owned by GDIC (or approximately 79.8% of the shares that are deemed to be
outstanding under the Rules of the Securities and Exchange Commission).
Mr. Davidson controls Guardian and, as the controlling
shareholder of Guardian, could be considered a beneficial owner of the
77,562,451 shares of Common Stock beneficially owned by Guardian (or
approximately 79.8% of the shares of Common Stock that are deemed to be
outstanding under the Rules of the Securities and Exchange Commission). In
addition, Mr. Davidson is the record and beneficial owner of an additional
1,000,000 shares of Common Stock of the Issuer (which constitutes approximately
1% of the Common Stock of the Issuer).
(b) GDIC owns outright and has sole voting and dispositive
power with respect to the shares it beneficially owns. Guardian and Davidson
also have sole voting and dispositive power with respect to the shares of
Common Stock of the Issuer which they beneficially own through GDIC. In
addition, Davidson has sole voting and dispositive power with respect to the
1,000,000 shares it owns.
(c) On October 31, 1996, (1) Guardian contributed all of its
remaining shares of Common Stock (51,795,048 shares) to GDIC and (2) Davidson
contributed 25,767,403 shares of Common Stock to GDIC. In addition, Guardian
donated 140,000 shares of Common Stock to a nonprofit corporation since the
filing of Amendment No. 7 to this Schedule 13D.
<PAGE> 12
Page _12_ of _34_ Pages
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
Since the filing of Amendment No. 7 to this Schedule 13D,
Guardian and the Issuer have entered into the following contracts:
(a) Exchange Agreement, dated October 30, 1996, by and
between Guardian and the Issuer.
(b) Tax Sharing Agreement, dated October 31, 1996, by and
between Guardian and the Issuer.
Although certain of the principal provisions of the above
agreements are described in Item 4 of this amended Schedule 13D, such
descriptions do not purport to be complete and are qualified by the texts of
the agreements, which are attached as Exhibits to this amended Schedule 13D.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
15. Terms and Conditions of the Series B Preferred -- Resolution of the
Board of Directors of the Issuer establishing the Series B Preferred.
16. Exchange Agreement, dated October 30, 1996, by and between the Issuer
and Guardian.
17. Tax Sharing Agreement, dated October 31, 1996, by and between the
Issuer and Guardian.
18. Agreement among GD Investments Corp., William Davidson and Guardian
Industries Corp. that this Amendment No. 8 to Schedule 13D is, and
subsequent amendments will be, filed on behalf of each of them.
<PAGE> 13
Page _13_ of _34_ Pages
SIGNATURE.
After reasonable inquiry and to the best of each of the undersigned's
knowledge and belief, each of the undersigned certify that the information set
forth in this statement is true, correct and complete.
Date: November 4, 1996
*
- --------------------------------------
WILLIAM DAVIDSON, By Robert H. Gorlin,
Attorney-in-fact, pursuant to power
of attorney filed as Exhibit 12.
GUARDIAN INDUSTRIES CORP.
By: / Robert H. Gorlin /
----------------------------------
Name: Robert H. Gorlin
Title: Vice President and General Counsel
GD INVESTMENTS CORP.
By: / Robert H. Gorlin /
----------------------------------
Name: Robert H. Gorlin
Title: Vice President and Secretary
* / Robert H. Gorlin /
- -------------------------------------
Robert H. Gorlin, Attorney-in-fact
<PAGE> 14
Page _14_ of _34_ Pages
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. Description
- --------- -----------
<S> <C>
15. Terms and Conditions of the Series B Preferred -- Res
olution of the Board of Directors of the Issuer
establishing the Series B Preferred.
16. Exchange Agreement, dated October 30, 1996, by and
between the Issuer and Guardian.
17. Tax Sharing Agreement, dated November 1, 1996, by and
between the Issuer and Guardian.
18. Agreement among GD Investments Corp., William Davidson
and Guardian Industries Corp. that this Amendment No.
8 to Schedule 13D is, and subsequent amendments will
be, filed on behalf of each of them.
</TABLE>
<PAGE> 1
Page _15_ of _34_ Pages
EXHIBIT 15
OIS OPTICAL IMAGING SYSTEMS, INC.
RESOLUTION AUTHORIZING
THE SERIES B CUMULATIVE PREFERRED STOCK
RESOLVED, that in accordance with the provisions of the Company's
Restated Certificate of Incorporation, as amended, (the "Certificate of
Incorporation") a series of cumulative preferred stock, $0.01 par value
("Series B Preferred"), be and hereby is created and authorized for issuance,
and that the designations and amounts thereof and the preferences,
qualifications, privileges, limitations, options, and other rights (the "Rights
and Preferences") of the Series B Preferred are as set forth in this resolution
(this "Designation Resolution"):
SECTION 1. Designation and Amount. The Company has authority to
issue 100,000 shares of Series B Preferred, which number may be increased or
decreased at any time and from time to time by resolution of the Board of
Directors (the "Board"), except that no decrease will reduce the number of
authorized shares of Series B Preferred to a number less than the number of
shares of Series B Preferred then outstanding.
SECTION 2. Dividends and Distributions.
2.1 Accrual of Dividends. The holders of shares of
Series B Preferred will be entitled to receive, when, as, and if declared by
the Board, out of legally available funds, dividends payable in cash as
hereinafter provided, which dividends will be paid prior and in preference to
any payment of any dividend to the holders of the common stock of the Company
and to all other classes or series of capital stock of the Company that are
hereafter designated to be subordinated to the Series B Preferred. Dividends
on each share of Series B Preferred will begin to accrue from the Original Date
Of Issuance (as defined in Section 9.1) of any such share and will accumulate
and be payable in cash (and not in kind) on the last day of June and December
in each year, computed on the Original Issuance Price (as defined in Section
9.2), at the following rates:
(a) during each of the first three (3) years from the
Original Date Of Issuance of any such share and
through the last day of June or December (as the case
may be), at an annual rate of 8%; and
(b) thereafter during each of years four (4) through six
(6) following the Original Date Of Issuance at one of
the following rates, as selected by a majority of the
disinterested members of the Company's Board of
Directors (the "Independent Directors") (and in the
absence of a selection by the Independent Directors,
the rate computed as provided in paragraph (i) will
apply):
<PAGE> 2
Page _16_ of _34_ Pages
(i) a rate per annum equal to the sum of: (A)
LIBOR, as quoted on the Reuters Data Service
on the first day of January or July, as the
case may be; and (B) 125 basis points, which
rate will be recalculated as of the first day
of each January and July for the following
six-month period; or
(ii) a rate per annum equal to the sum of (A) the
three-year Treasury Bill yield, as quoted on
the Reuters Data Service on the first day of
the three-year period, and (B) 200 basis
points; and
(c) thereafter the "Independent Directors" may select one
of the following rates (in the absence of a selection
by the Independent Directors, the rate computed as
provided in paragraph (i) will apply):
(i) a rate per annum equal to the sum of: (A)
LIBOR, as quoted on the Reuters Data Service
on the first day of January or July, as the
case may be; and (B) 350 basis points, which
rate will be recalculated as of the first day
of each January and July for the following
six-month period; or
(ii) a rate per annum equal to the sum of (A) the
three-year Treasury Bill yield, as quoted on
the Reuters Data Service on the first day of
the applicable three-year period, and (B) 400
basis points, which rate will be recalculated
as of the first day of each three-year
period; and
(d) thereafter beginning with year ten (10) after the
Original Date Of Issuance and on each successive
three-year anniversary the rate then in effect will
increase by an additional 150 basis points.
(e) Notwithstanding anything herein to the contrary, the
dividend rate shall not at anytime exceed 16.5% per
annum.
During each of the first three (3) years from the Original Date of Issuance of
any share, no interest or sum of money in lieu of interest will be payable in
respect of any dividend payment or payments that may be in arrears, and accrued
and unpaid dividends will not compound. Thereafter, interest on accrued and
unpaid dividends will accrue and will be compounded semi-annually at the annual
dividend rate then in effect.
2.2 Payment of Dividends. Dividends on shares of Series B
Preferred will be paid on dates established by the Board of Directors (each
such date, a "Dividend Payment Date"). Dividends accruing on shares of Series
B Preferred for any period of less than a full year will be computed on the
basis of a 365 day year. Dividends paid on shares of Series B Preferred in an
<PAGE> 3
Page _17_ of _34_ Pages
amount less than the total amount of the dividends accumulated on such shares
will be allocated in such manner so that holders of Series B Preferred share
ratably in the dividends so paid.
2.3 Record Date. The Board of Directors may fix a record
date for the determination of holders of shares of Series B Preferred entitled
to receive payment of a dividend or distribution declared thereon, which record
date will be no more than 60 days prior to the date fixed for the payment.
SECTION 3. No Conversion or Redemption Rights.
3.1 No Conversion Right. The holders of the shares of
Series B Preferred will not have any right to convert any such shares into
shares of any other class or series of capital stock of the Company, or into
rights, options or warrants to subscribe for or purchase shares of any other
class or series of capital stock of the Company.
3.2 No Redemption Right. The holders of Series B
Preferred will not have any right to require the Company to redeem any or all
of their shares. The Company will not redeem any shares of Series B Preferred
without the affirmative vote of a majority of the Independent Directors.
SECTION 4. Certain Restrictions.
4.1 Dividends and Distributions. At any time while any
shares of Series B Preferred are outstanding and any dividends accrued thereon
remain unpaid after any Liquidation (as defined in Section 6 below), the
Company will not:
(a) declare or pay dividends or make any other
distributions on any shares of stock ranking junior to the Series B Preferred
as to dividends; or
(b) declare or pay dividends or make any other
distributions on any shares of stock ranking on a parity with the Series B
Preferred as to dividends, except dividends or other distributions paid on the
Series B Preferred and all such parity stock in such proportions so that the
amount of dividends or other distributions declared in respect of each such
series or class of stock bear the same ratio to each other as the ratio that
the accumulated but unpaid dividends in respect of each such series or class of
stock bear to each other.
4.2 Redemption and Purchase. At any time while any shares
of Series B Preferred remain outstanding, the Company will not:
(a) redeem, purchase or otherwise acquire for
consideration (including pursuant to sinking fund requirements) shares of any
stock ranking junior to the Series B Preferred as to dividends and as to
liquidating distributions, except that the Company may at any time redeem,
purchase or otherwise acquire shares of any such junior stock by the conversion
of
<PAGE> 4
Page _18_ of _34_ Pages
such shares into, or the exchange of such shares for, shares of any stock of
the Company ranking junior to the Series B Preferred as to dividends and as to
liquidating distributions;
(b) redeem pursuant to a sinking fund or otherwise
shares of any stock of the Company ranking on a parity with the Series B
Preferred as to dividends and as to liquidating distributions, except (i) by
means of a redemption pursuant to which all outstanding shares of Series B
Preferred and all stock of the Company ranking on a parity with the Series B
Preferred as to dividends and as to liquidating distributions are redeemed or
pursuant to which a pro rata redemption is made from all holders of the Series
B Preferred and all stock of the Company ranking on a parity with the Series B
Preferred as to dividends and as to liquidating distributions, the amount
allocable to each class or series of such stock being determined on the basis
of the aggregate liquidation preference of the outstanding shares of each such
class or series being redeemed, or (ii) by conversion of such parity stock
into, or exchange of such parity stock for, stock of the Company ranking junior
to the Series B Preferred as to dividends and as to liquidating distributions;
or
(c) purchase or otherwise acquire for any
consideration any stock of the Company ranking on a parity with the Series B
Preferred as to dividends and as to liquidating distributions, except (i)
pursuant to an acquisition made in accordance with the terms of one or more
offers to purchase all of the outstanding shares of Series B Preferred and all
stock of the Company ranking on a parity with the Series B Preferred as to
dividends and as to liquidating distributions (which offers will describe such
proposed acquisition of all such parity stock), each of which offers will have
been accepted by the holders of at least 50% of the shares of each series or
class of stock receiving such offer outstanding at the commencement of the
first of such purchase offers, or (ii) by conversion of such parity stock into,
or exchange of such parity stock for, stock of the Company ranking junior to
the Series B Preferred as to dividends and as to liquidating distributions.
SECTION 5. Reacquired Shares. Any shares of Series B Preferred
redeemed, purchased, or otherwise acquired by the Company in any manner
whatsoever will have the status of authorized but unissued shares of Series B
Preferred.
SECTION 6. Liquidation, Dissolution or Winding Up.
6.1 Liquidation Procedure. Upon any voluntary or
involuntary liquidation, dissolution, or winding up of the Company (a
"Liquidation"), the holders of the Series B Preferred then outstanding will be
entitled to be paid out of the assets of the Company available for distribution
to its shareholders an amount equal to the Original Issuance Price for each
outstanding share of Series B Preferred, plus any accrued but unpaid dividends
(the "Redemption Price"). No distribution will be made:
(a) to the holders of shares of stock ranking junior
to the Series B Preferred upon a Liquidation unless, prior thereto, each holder
of shares of Series B Preferred has
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received a distribution in the amount of the Redemption Price of such holder's
shares of Series B Preferred; or
(b) to the holders of shares of stock ranking on a
parity with the Series B Preferred upon a Liquidation, except distributions
made ratably on the Series B Preferred and all other such parity stock in
proportion to the total amounts to which the holders of all such shares are
entitled upon a Liquidation.
6.2 Shortfall in Payment on Liquidation. If the amount
available for distribution on Liquidation to holders of shares of Series B
Preferred is less than the aggregate Redemption Price of such shares, the
amount so available for distribution will be allocated among such holders in
such manner so that holders of Series B Preferred share ratably in the
distributions upon Liquidation so paid according to the respective aggregate
Redemption Price of shares of Series B Preferred held by such holders at the
time of such distribution.
6.3 No Other Rights. After payment in full of the
Redemption Price of the Series B Preferred, the Series B Preferred will not be
entitled to receive any additional cash, property, or other assets of the
Company upon the Liquidation of the Company. If the Company pays a liquidation
payment amounting in the aggregate to less than the Redemption Price of the
Series B Preferred, the Company in its discretion may require the surrender of
certificates evidencing the shares of Series B Preferred and issue a
replacement certificate or certificates, or it may require the certificates
evidencing the shares in respect of which such payments are to be made to be
presented to the Company, or its agent, for notation thereon of amounts of the
Redemption Price paid for such shares. If a certificate for Series B Preferred
on which payment of one or more partial Liquidation payments has been made is
presented for exchange or transfer, the certificate issued upon such exchange
or transfer will bear an appropriate notation as to the aggregate amount of the
Redemption Price that had been paid.
SECTION 7. Event of Default. An "Event of Default" will occur if the
Company fails to pay (a) the Redemption Price on any shares of the Series B
Preferred within thirty (30) days after such Redemption Price will be due or
(b) a dividend payment within thirty (30) days after the Dividend Payment Date.
SECTION 8. Voting Rights. The holders of shares of Series B Preferred
will have only the voting rights expressly provided in this Section 8 and the
rights expressly required by applicable law.
8.1 Ordinary Matters. Each share of Series B Preferred
will entitle the holder thereof to 350 votes on each and every matter submitted
to a vote of the shareholders of the Company.
8.2 Matters Affecting the Rights of Series B Preferred.
The affirmative vote of the holders of 75% of the outstanding shares of Series
B Preferred will be required for the Company to (a) amend or repeal any
provisions of the Certificate of Incorporation or of this
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Designation Resolution, if the amendment or repeal would materially adversely
affect the Rights and Preferences of the Series B Preferred, or (b) amend the
Certificate of Incorporation or adopt a designation resolution to create or
increase the amount of any class or series of capital stock that would rank
senior to or on parity with the Series B Preferred as to dividend and/or
liquidation rights.
8.3 Voting Rights Upon Default in Payment of Dividends.
Without in any way limiting the rights and remedies of holders of shares of
Series B Preferred at law, in equity, or pursuant to contractual arrangement
with the Company, upon an Event of Default the affirmative vote of the holders
of a majority of outstanding shares of Series B Preferred will be required for
the Company to sell or lease all or substantially all of the Company's
properties or assets.
SECTION 9. Definitions.
9.1 "Original Date Of Issuance" of any share of Series B
Preferred means the date on which: (a) a subscription agreement for that share
has been received by the Company and (b) the consideration for that share has
been fully paid by the initial purchaser.
9.2 "Original Issuance Price" means, with respect to
Series B Preferred, One Thousand Dollars ($1,000.00) per share.
<PAGE> 1
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EXHIBIT 16
EXCHANGE AGREEMENT
This is an EXCHANGE AGREEMENT, dated as of October 30, 1996, by
and between OIS OPTICAL IMAGING SYSTEMS, INC., a Delaware corporation (the
"Company") and GUARDIAN INDUSTRIES CORP., a Delaware corporation ("Guardian").
Background
A. Guardian owns 35,000 shares of Series A Cumulative Preferred
Stock having an original issuance price of $1,000 per share (the "Series A
Preferred Stock"), par value $.01 per share, of the Company (the "Series A
Preferred Shares"), which were purchased for an aggregate purchase price of
$35,000,000. As of October 30, the accrued and unpaid dividends on the Series
A Preferred Shares will be $3,136,986 (the "Accumulated Dividends").
B. The parties hereto desire to exchange the nonvoting Series A
Preferred Shares plus the Accumulated Dividends for 38,137 shares of voting
Series B Cumulative Preferred Stock having an original issuance price of $1,000
per share (the "Series B Preferred Stock"), par value $.01, of the Company (the
Series B Preferred Shares") in accordance with this Agreement (the "Exchange").
C. Provided that the Exchange is consummated, GD Investments
Corp., a subsidiary of Guardian, is willing to provide financing to the Company
by purchasing approximately 19,000 additional shares Series B Preferred Stock
having an original issuance price of $1,000 per share from the Company for cash
to be used by the Company to retire outstanding indebtedness owed to Guardian
by the Company, provided, that, among other things, the Company agrees to
exchange the Series B Preferred Shares for the Series A Preferred Shares in
accordance with the terms of this Agreement.
D. Provided that the Exchange is consummated, Guardian and
certain Affiliates (as defined in Section 4(e) herein) are willing to enter
into a tax sharing agreement (the "Tax Sharing Agreement") whereby the Company
will be included as a member of an affiliated group under Section 1504(c) of
the Internal Revenue Code with Guardian and/or its Affiliates (collectively,
the "Guardian Group").
Terms
Intending to be legally bound, in consideration of the
foregoing premises and the mutual covenants and agreements set forth herein,
the parties hereto agree as follows:
<PAGE> 2
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1. Exchange of Preferred Stock. Effective as of October
30, 1996, the Company hereby sells and issues to Guardian the Series B
Preferred Shares in exchange for the Series A Preferred Shares and the
Accumulated Dividends.
2. Deliveries. The Company herewith delivers to
Guardian, and Guardian hereby acknowledges receipt of a stock certificate
evidencing the Series B Preferred Shares, registered in the name of Guardian or
its designee. Guardian herewith delivers to the Company, and the Company
hereby acknowledges receipt of, stock certificates representing the Series A
Preferred Shares.
3. Representations and Warranties of the Company. The
Company represents and warrants to Guardian as follows:
(a) Organization, Standing, etc. The Company is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has all requisite corporate power and
authority to own its assets and to carry on its business as presently
conducted. The Company has all requisite corporate power and authority to (i)
execute, deliver and perform its obligations under this Agreement, (ii) issue
the Series B Preferred Shares and (iii) execute, deliver and perform its
obligations under all other agreements and instruments executed and delivered
by it pursuant to or in connection with this Agreement.
(b) Authorization and Execution; Series B Preferred
Shares Validly Issued. The execution, delivery and performance by the Company
of this Agreement and the issuance of the Series B Preferred Shares hereunder
have been duly and validly authorized by all requisite corporate action of the
Company. This Agreement has been duly executed and delivered by the Company and
constitutes a valid and binding agreement of the Company, enforceable against
the Company in accordance with its terms. Upon the execution and delivery of
this Agreement, the Series B Preferred Shares will be validly issued and
outstanding, fully paid and nonassessable. The terms of the Series B Preferred
Shares are set forth in the Certificate of Designations, Preferences and Rights
of Series B Cumulative Preferred Stock of the Company, filed with the Office of
the Secretary of State of Delaware on October 30, 1996.
(c) Contravention. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby do not contravene or constitute a default under or violate
(i) any provision of applicable law or regulation the violation of which would
have a material adverse effect on the Company or on the Series B Preferred
Shares, (ii) the Certificate of Incorporation or Bylaws of the Company or (iii)
any agreement, judgment, injunction, order, decree or other instrument binding
upon the Company or its subsidiaries or any of their assets or properties, the
violation of which would have a material adverse effect on the Company or
result in the creation or imposition of any lien, security interest, pledge or
encumbrance of any kind (collective a "Lien") on any asset of the Company or on
the Series B Preferred Shares.
<PAGE> 3
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(d) Consents. No consent, approval, authorization
or order of, or registration or filing with, any third party, including, without
limitation, any governmental agency or body, is required for the consummation
of the transactions contemplated in this Agreement.
(e) Litigation, Proceedings, Defaults. (i) There
is no action, suit, investigation or proceeding pending against, or to the
knowledge of the Company threatened against or affecting, the Company or its
assets or any of the Series B Preferred Shares before or by any court or
arbitrator or any governmental body, agency, department, instrumentality or
official; (ii) the Company is not in violation of its Certificate of
Incorporation or Bylaws; and (iii) the Company is not in violation of, or in
default under, any provision of any applicable law or regulation or of any
agreement, judgment, injunction, order, decree or other instrument binding upon
the Company, which, in each case, would affect the validity of this Agreement or
the Series B Preferred Shares or any other document or agreement executed or to
be executed by the Company pursuant hereto or in connection herewith or would
impair the ability of the Company to perform in any material respect the
obligations which it has under this Agreement or any such other document or
agreement.
(f) Governmental Regulation. Except as may be
required pursuant to the Securities Act of 1933, as amended (the "Securities
Act"), the Securities Exchange Act of 1934, as amended (the "Exchange Act")
state securities laws, and the rules and regulations of the National Association
of Securities Dealers, Inc. Over-the-Counter market, the Company is not subject
to any federal or state law or regulation or other regulatory scheme limiting
its ability to issue the Series B Preferred Shares.
(g) Capitalization. The Company's authorized
capital stock consists of 125,000,000 shares of common stock, par value $.01,
of the Company (the "Common Stock"), 50,000 shares of Series A Preferred Stock
and 100,000 shares of Series B Preferred Stock. As of June 30, 1996,
97,103,790 shares of Common Stock were issued and outstanding. As of the date
of this Agreement, following the transactions contemplated herein, (i) 50,000
shares of Series A Preferred Stock will be authorized but unissued, and (ii)
38,137 shares of Series B Preferred Stock will be issued and outstanding. All
outstanding shares have been duly authorized, validly issued and are fully paid
and nonassessable.
(h) Brokers. The Company has not engaged any
broker or finder who might be entitled to any brokerage, finder's or other fee
or commission in connection with the sale of the Series B Preferred Shares.
4. Representations and Warranties of Guardian. Guardian
represents and warrants to the Company that:
(a) Organization, Standing, etc. Guardian is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has all requisite corporate power and
authority to own its assets and to carry on its business as
<PAGE> 4
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presently conducted. Guardian has all requisite corporate power and authority
to (i) execute, deliver and perform its obligations under this Agreement, and
(ii) execute, deliver and perform its obligations under all other agreements
and instruments executed and delivered by it pursuant to or in connection with
this Agreement.
(b) Authorization and Execution. The execution,
delivery and performance by Guardian of this Agreement have been duly and
validly authorized by all requisite corporate action of Guardian. This
Agreement has been duly executed and delivered by Guardian and constitutes a
valid and binding agreement of Guardian, enforceable against Guardian in
accordance with its terms.
(c) Contravention. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby do not contravene or constitute a default under or violate
(i) any provision of applicable law or regulation the violation of which would
have a material adverse effect on Guardian, (ii) the Certificate of
Incorporation or Bylaws of Guardian or (iii) any agreement, judgment,
injunction, order, decree or other instrument binding upon Guardian or its
subsidiaries or any of their assets or properties, the violation of which would
have a material adverse effect on Guardian or its subsidiaries or result in the
creation or imposition of any Lien on any asset of Guardian or its
subsidiaries.
(d) Litigation, Proceedings, Defaults. (i) There
is no action, suit, investigation or proceeding pending against, or to the
knowledge of the Guardian threatened against or affecting, Guardian or its
assets before or by any court or arbitrator or any governmental body, agency,
department, instrumentality or official; (ii) Guardian is not in violation of
its Certificate of Incorporation or Bylaws; and (iii) Guardian is not in
violation of, or in default under, any provision of any applicable law or
regulation or of any agreement, judgment, injunction, order, decree or other
instrument binding upon Guardian, which, in each case, would affect the
validity of this Agreement or any other document or agreement executed or to be
executed by Guardian pursuant hereto or in connection herewith or would impair
the ability of Guardian to perform in any material respect the obligations
which it has under this Agreement or any such other document or agreement.
(e) Purchase for Investment.
(i) The Series B Preferred Shares
purchased by Guardian have been acquired by Guardian solely for Guardian's own
account or the account of its Affiliates (as such term is defined in Rule 405
of the Securities Act and which are also members of its consolidated group for
federal income tax purposes), for investment, and not with a view to any
distribution thereof; and Guardian will not distribute the Series B Preferred
Shares in violation of the Securities Act or the applicable securities laws of
any state. For purposes of this Section 4(e) the term "Guardian" shall include
the Affiliates of Guardian.
<PAGE> 5
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(ii) Guardian is financially able to hold
the Series B Preferred Shares for long-term investment, believes that the
nature and amount of the Series B Preferred Shares purchased by Guardian is
consistent with Guardian's overall investment program and financial position,
recognizes that there are substantial risks involved in the purchase of the
Series B Preferred Shares, and can afford a complete loss of such investment.
(iii) Guardian has been provided by the
Company with full access to, and opportunity to ask questions of, the Company's
executive officers and full access to financial and other information relating
to the Company and Guardian has entered into this Agreement and has purchased
the Series B Preferred Shares based on Guardian's own review of the Company,
its assets, business and prospects, and not on any representation or warranty
of the Company or any other person which has or has not been made, whether in
this Agreement or otherwise.
(f) Brokers. Guardian has not engaged any broker
or finder who might be entitled to any brokerage, finder's or other fee or
commission in connection with the sale of the Series B Preferred Shares.
5. Miscellaneous.
(a) Notices. All notices, requests, claims,
demands and other communications hereunder shall be in writing and shall be
deemed to have been duly given when delivered in person, by cable, telegram,
facsimile transmission with confirmation of receipt, or telex, or by registered
or certified mail (postage prepaid, return receipt requested) to the respective
parties as follows:
If to the Company:
OIS Optical Imaging Systems, Inc.
47050 Five Mile Road
Northville, Michigan 48167
Attention: President
To Guardian:
Guardian Industries Corp.
2300 Harmon Road
Auburn Hills, Michigan 48326
Attention: General Counsel
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above
(provided that notice of any change of address shall be effective only upon
receipt thereof).
<PAGE> 6
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(b) Expenses; Documentary Taxes. Each party
hereto agrees to pay its own fees and disbursements in connection with the
purchase and sale of the Series B Preferred Shares as contemplated by this
Agreement.
(c) Successors and Assigns. Except as expressly
provided in this Agreement (i) the rights and obligations of Guardian under
this Agreement may not be assigned to any person other than to an affiliate of
Guardian and the rights and obligations of the Company under this Agreement may
not be assigned to any person other than to an Affiliate of the Company, and
(ii) this Agreement shall not be construed so as to confer any right or benefit
upon any person other than the parties to this Agreement, and their respective
successors and assigns. This Agreement shall be binding upon the Company and
Guardian and their respective successors and permitted assigns.
(d) Governing Law. This Agreement shall be
governed by and construed in accordance with the internal laws of the State of
Delaware without giving effect to principles of conflicts of law.
(e) Severability. If any term, provision,
covenant or restriction of this Agreement or the application of any provision
hereof is otherwise declared to be illegal, invalid, void or otherwise
unenforceable by a court of competent jurisdiction, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated
except to the extent necessary to delete such illegal, invalid, void or
unenforceable provision unless such provision to be deleted shall substantially
impair the benefits of the remaining portions of this Agreement.
(f) Counterparts; Effectiveness. This Agreement
may be executed in two or more counterparts each of which shall be deemed an
original, but which shall constitute one and the same instrument.
(g) Entire Agreement. This Agreement supersedes
all prior oral and written agreements and understandings of the parties hereto
with respect to the subject matter hereof.
(h) Headings. The headings of the Sections and
subsections hereof are inserted as a matter of convenience and for reference
only and in no way define, limit or describe the scope of this Agreement or the
meaning of any provision hereof.
[SIGNATURE PAGE FOLLOWS]
<PAGE> 7
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
OIS OPTICAL IMAGING SYSTEMS, INC.
By: / Charles C. Wilson /
--------------------------------
Name: Charles C. Wilson
Title: Executive Vice President and
Chief Financial Officer
GUARDIAN INDUSTRIES CORP.
By: / David A. Clark /
--------------------------------
Name: David A. Clark
Title: Vice President/Corporate Finance &
Acquisitions and Treasurer
<PAGE> 1
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EXHIBIT 17
TAX SHARING AGREEMENT
This Tax Sharing Agreement ("Agreement") is effective as of the 1st
day of November 1996, by and among GUARDIAN INDUSTRIES CORP., a Delaware
corporation (hereinafter referred to as the "Parent Company"), and OIS OPTICAL
IMAGING SYSTEMS, INC. a Delaware corporation (hereinafter referred to as the
"Subsidiary" or "OIS").
The term "Parent Company" shall include Guardian Industries Corp. and
any subsidiary thereof whose stock is owned directly or indirectly by Guardian
Industries Corp. and which qualifies as a member of the Parent Company's
affiliated group as defined in Section 1504(a) of the Internal Revenue Code of
1986, as amended ("Internal Revenue Code") and such term shall exclude OIS (and
its subsidiaries). The terms "Subsidiary" and "OIS" shall include OIS Optical
Imaging Systems, Inc. and any of its subsidiaries acquired or formed after the
effective date of this Agreement, and which later qualify as members of the
Parent Company's affiliated group as defined in Section 1504(a) of the Internal
Revenue Code.
WITNESSETH
WHEREAS, the Parent Company and Subsidiary are expected to qualify as
members of an affiliated group as defined in Section 1504 (a) of the Internal
Revenue Code ("Affiliated Group"), commencing on November 1, 1996.
WHEREAS, the Parent Company and Subsidiary desire to file a United
States consolidated income tax return as an Affiliated Group for the taxable
period which includes November 1, 1996 through December 31, 1996 and to file,
if qualified to do so as an Affiliated Group, United States consolidated income
tax returns for subsequent tax years (or other taxable periods).
WHEREAS, it is the intent and desire of the Parent Company and
Subsidiary that a method be established for each tax year (or other taxable
period) that a United States consolidated income tax return is filed by the
Affiliated Group for sharing and allocating the United States consolidated
income tax liability of the Affiliated Group among its members, for reimbursing
the Parent Company for payment of such tax liability, if any, and for providing
for the allocation of any United States income tax refund arising from a
carryback of losses or tax credits from subsequent tax years (or other taxable
periods).
WHEREAS, the Parent Company and Subsidiary will make available any
current and net operating losses and tax credits as they may have available to
reduce the United States consolidated income tax liability of the Affiliated
Group.
WHEREAS, The Parent Company and Subsidiary desire to provide for the
reimbursement to the Parent Company and/or Subsidiary whose current and net
operating losses and tax credits have been used to reduce the United States
consolidated income tax liability of the Affiliated Group.
<PAGE> 2
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NOW THEREFORE, In consideration of the mutual covenants and promises
contained in this Agreement, the parties hereto do hereby agree as follows:
A. CONSOLIDATED FEDERAL INCOME TAX RETURNS
(l) A United States consolidated income tax return shall be filed
by the Parent Company for the taxable year ending December 31, 1996 and for
each subsequent taxable period during which this Agreement is in effect and for
which the Affiliated Group is required or permitted to file a United States
consolidated income tax return.
(2) For each tax year (or other taxable period) the aggregate
United States consolidated income tax liability for members of the Affiliated
Group shall be computed twice, once with the inclusion of the Subsidiary in
such computation and secondly with the exclusion of the Subsidiary from such
computation.
(3) To the extent that members (including the Parent Company and
Subsidiary) of the Affiliated Group have had their United States income tax
liabilities, as computed on an aggregate basis, increased by inclusion of
Subsidiary, an account payable (liability) of the Subsidiary ("Tax Liability to
Parent") to the Parent Company shall be established on the books of the Parent
Company and of the Subsidiary. To the extent that members (including the
Parent Company and Subsidiary) of the Affiliated Group have had their United
States income tax liabilities, as computed on an aggregate basis, decreased by
inclusion of Subsidiary, an account payable (liability) of the Parent Company
("Tax Liability to Subsidiary") to the Subsidiary shall be established on the
books of the Parent Company and of the Subsidiary. In determining whether the
tax liability of the Affiliated Group has been reduced by the Subsidiary's
deductions or credits it will be assumed that the Affiliated Group first
utilizes comparable credits and net operating loss carryovers from prior years
generated by other members of the Affiliated Group.
(4) An estimate of the Tax Liability to Parent or Tax Liability
to Subsidiary shall be made by the Parent Company not later than March 15th for
the preceding calendar year (or taxable period ending on December 31st). The
resulting estimated account payable shall be collected within thirty (30) days
of the date that such estimate is made. A final calculation of the Tax
Liability to Parent or Tax Liability to Subsidiary shall be made within 30 days
of the date that the Parent Company files the consolidated return for any
calendar year (or taxable period ending on December 31st). The resulting final
account payable shall be collected within 30 days of the date that such final
calculation of the Tax Liability to Parent or Tax Liability to Subsidiary is
provided by the Parent Company to Subsidiary.
(5) The Parent Company will determine the allocation of the
United States consolidated income tax liability, and the account payables and
receivables to be reflected on the books of the Parent Company and Subsidiary
in accordance with this Agreement. To the extent that the Subsidiary disagrees
with such determination, the matter shall be referred to the independent
certified public accountants then auditing the books of the Parent Company,
whose determination shall be final.
(6) Payment of the actual United States consolidated income tax
liability for a taxable year (or other taxable period) shall include the
payment of estimated income tax installments due
<PAGE> 3
Page _30_ of _34_ Pages
for such tax year (or other taxable period), which payments, if any, will be
determined by the Parent Company based on an estimate of income tax liability
for the tax year (or other taxable period). The Subsidiary shall pay to the
Parent Company, the Subsidiary's share of each payment of the actual estimated
consolidated income tax liability, within thirty (30) days of receiving notice
of such payment from the Parent Company. The Subsidiary's share of any
overpayment of estimated income tax will be refunded to the Subsidiary by the
Parent Company within thirty (30) days after it is determined that the
Subsidiary has overpaid the estimated income tax.
(7) If the United States consolidated income tax liability is
adjusted for any tax year (or other taxable period), whether by means of an
amended tax return, claim for refund or after a tax audit by the United States
Internal Revenue Service, the Tax Liability to Parent or Tax Liability to
Subsidiary for that year (or other taxable period) shall be recomputed to give
effect to such adjustments. The resulting change in the Tax Liability to
Parent or Tax Liability to Subsidiary, shall be determined in the same manner
as in Paragraph A (2) of this Agreement. In the case of an increase in Tax
Liability to Parent (or decrease in Tax Liability to Subsidiary), the
Subsidiary shall pay the resultant difference to the Parent Company within
thirty (30) days after receiving notice of such liability from the Parent
Company. In the case of a decrease in Tax Liability to Parent (or increase in
Tax Liability to Subsidiary), the Parent Company shall pay the resultant
difference to Subsidiary within thirty (30) days after the adjustment has been
finally determined. Any interest (income or expense) and penalties arising
from adjustments to the United States consolidated income tax liability shall
be equitably apportioned between the Parent Company and Subsidiary.
B. PARENT AS AGENT AND CONSENTS
(1) The Subsidiary irrevocably designates the Parent Company as
its agent for the purpose of taking any and all action necessary or incidental
to the filing of United States consolidated income tax returns and state
combined or consolidated returns (including, but not limited to, the conduct of
any audit by any taxing authority).
(2) The Subsidiary agrees to furnish the Parent Company with any
and all information requested by the Parent Company to carry out the provisions
of this Agreement, to cooperate with Parent Company in filing any return or
consent contemplated by this Agreement and to cooperate in connection with any
refund claim, audit, judicial or other like or similar proceeding.
(3) At the direction of the Parent Company, the Subsidiary shall
execute and file such consents, elections, and other documents that may be
required or appropriate for the proper filing of each United States
consolidated income tax return and state combined or consolidated returns.
(4) Subsidiary hereby consents to all elections made by the
Parent Company on behalf of the Affiliated Group.
C. CONSOLIDATED AND COMBINED STATE INCOME TAX RETURNS
If the Affiliated Group or any members thereof is required or elects
to file combined or consolidated state or local tax returns including the
Subsidiary, the Parent Company shall not be required to reimburse the
Subsidiary for any of the Subsidiary's tax losses or attributes which are
<PAGE> 4
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utilized by the Affiliated Group or any members thereof. In the event that the
Subsidiary would have a stand alone income, franchise or similar tax liability
for state and local taxes, then Parent Company shall make an allocation of such
state or local tax liability to Subsidiary consistent with the principles set
forth in Paragraph A (2) of this Agreement.
D. SUBSIDIARY LEAVING THE AFFILIATED GROUP
(1) If the Subsidiary (or a subsidiary of the Subsidiary) is no
longer a member of the Affiliated Group (a "Former Member"), the Parent Company
shall, upon the request of a Former Member, provide any assistance that shall
be reasonably required to enable the Former Member to pursue any tax refund,
including but not limited to the filing of tax refund claims on behalf of the
Former Member.
(2) The Former Member shall be able to participate, in good faith
and at its own expense, in the audit of the portion of the United States
consolidated income tax return of the Affiliated Group which relates to its
separate taxable income or loss and shall be able to participate, in good faith
and at its own expense, in any contest, litigation, or settlement of any issue
relating to such separate taxable income or loss.
(3) The Former Member and the remaining members of the Affiliated
Group will fully cooperate with each other in connection with the allocation of
income and expense for the taxable year in which the Former Member leaves the
Affiliated Group.
(4) The Former Member (and, in the event the Affiliated Group
ceases to file a United States consolidated return, the Parent Company) shall
be bound by the terms of this Agreement with respect to all tax years during
which such Former Member joined in the filing of United States consolidated
income tax returns and state combined or consolidated returns.
(5) The Former Member and the remaining members of the Affiliated
Group will cooperate and provide such information as will be necessary to
enable each of them to file whatever returns are required for United States
income tax purposes and state combined or consolidated returns, or in
connection with any audit or litigation with respect to such returns.
E. MISCELLANEOUS PROVISIONS
(1) This Agreement shall apply to the taxable year ending
December 31, 1996 and all subsequent taxable periods unless the Parent Company
and Subsidiary agree to terminate or modify this Agreement. Any termination or
modification, no matter when agreed to, shall be deemed effective as of the end
of the then current taxable period. Notwithstanding termination, this
Agreement shall continue in effect with respect to any payment or refund (Tax
Liability to Parent or Tax Liability to Subsidiary) due for all taxable periods
prior to termination.
(2) All notices under this Agreement shall be in writing and
shall be deemed to have been sufficiently given or served and effective for all
purposes when presented personally, or sent by facsimile transmission (if
receipt of the transmission is confirmed in writing by the addressee) or three
days after being deposited in a United States postal receptacle for registered
or certified mail addressed, return receipt requested, postage prepaid, to any
person at the address set forth
<PAGE> 5
Page _32_ of _34_ Pages
below, or at such other address as such party shall subsequently designate in
writing delivered in the form of a notice to:
If to Parent Company: Guardian Industries Corp.
Vice President and Tax Counsel
2300 Harmon Road
Auburn Hills, Michigan 48326
If to Subsidiary: OIS Optical Imaging Systems, Inc.
Chief Financial Officer
47050 Five Mile Road
Northville, Michigan 48167
(3) Neither this Agreement nor any provision hereof may be
changed, waived, discharged, or terminated orally but only by an instrument in
writing signed by the party against whom enforcement of the change, waiver,
discharge, or termination is sought.
(4) This Agreement shall constitute the entire agreement between
the parties concerning the subject matter hereof and shall supersede any prior
agreements and understandings between or among the parties with respect to the
subject matter hereof.
(5) The validity, interpretation, and enforceability of this
Agreement shall be governed in all respects by the laws of the State of
Michigan.
(6) Failure of any party at any time to require the other party's
performance of any obligation under this Agreement shall not affect the right
to require performance of that obligation. Any waiver by any party of any
breach of any provision of this Agreement shall not be construed as a waiver or
modification of the provision itself, or a waiver of any rights under this
Agreement.
(7) Every provision of this Agreement is intended to be
severable. If any term or provision is illegal or invalid for any reason
whatsoever, such illegality or invalidity shall not affect the validity of the
remainder of this Agreement.
(8) This Agreement may be executed in multiple counterparts each
of which shall be deemed an original and all of which shall constitute one
agreement, and the signatures of any party to any counterpart shall be deemed
to be a signature to, and may be appended to, any other counterpart.
(9) This Agreement shall be binding upon and inure to the benefit
of any successor, whether by statutory merger, acquisition of assets or
otherwise, to any of the parties hereto, to the same extent as if the successor
had been an original party to this Agreement.
(10) If during a United States consolidated income tax return
period Subsidiary acquires or organizes another corporation or company that is
allowed to be included in the consolidated return of the Affiliated Group, then
such corporation or company shall join in and be bound by this Agreement.
<PAGE> 6
Page _33_ of _34_ Pages
IN WITNESS WHEREOF , the parties hereto have caused this Agreement to
be executed by their duly authorized representatives as of the date first above
written.
GUARDIAN INDUSTRIES CORP.
By / Jeffrey A. Knight /
--------------------------------------
Jeffrey A. Knight
Group Vice President/Finance
OIS OPTICAL IMAGING SYSTEMS, INC.
By / Charles C. Wilson /
--------------------------------------
Charles C. Wilson Executive
Vice-President and Chief
Financial Officer
<PAGE> 1
Page _34_ of _34_ Pages
EXHIBIT 18
AGREEMENT
The undersigned agree that the Amendment No. 8 to Schedule 13D with respect to
Common Stock, $0.01 par value, of OIS Optical Imaging Systems, Inc. to which
this Agreement is attached as an Exhibit is, and that future amendments to such
Schedule 13D will be, filed on behalf of each of us.
*
- ------------------------------
WILLIAM DAVIDSON, By Robert H. Gorlin,
Attorney-in-fact, pursuant to Power of
Attorney filed as Exhibit 12.
GUARDIAN INDUSTRIES CORP.
By: / Robert H. Gorlin /
---------------------------
Name: Robert H. Gorlin
Title: Vice President and General Counsel
GD INVESTMENTS CORP.
By: / Robert H. Gorlin /
---------------------------
Name: Robert H. Gorlin
Title: Vice President and Secretary
* / Robert H. Gorlin /
- ------------------------------
Robert H. Gorlin, Attorney-in-fact
Dated: October 31, 1996
