<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 22, 1998
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
VERTEX COMMUNICATIONS CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
TEXAS 75-1982974
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
J. REX VARDEMAN
PRESIDENT AND CHIEF EXECUTIVE OFFICER
VERTEX COMMUNICATIONS CORPORATION
2600 NORTH LONGVIEW STREET 2600 NORTH LONGVIEW STREET
KILGORE, TEXAS 75662 KILGORE, TEXAS 75662
(903) 984-0555 (903) 984-0555
(Address, including zip code, and (Name, address, including zip code, and
telephone number, including area code, telephone number, including area code,
of registrant's principal executive offices) of agent for service)
</TABLE>
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Copy to:
BILL R. WOMBLE, ESQ.
THOMPSON & KNIGHT, P.C.
1700 PACIFIC AVENUE, SUITE 3300
DALLAS, TEXAS 75201
(214) 969-1700
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED TO BE REGISTERED PER SHARE(1) OFFERING PRICE(1) REGISTRATION FEE
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.10 par value
per share.................. 474,349 shares $24.25 $11,502,963.00 $3,393.37
=========================================================================================================================
</TABLE>
(1) Estimated pursuant to Rule 457(c) under the Securities Act of 1933 solely
for the purpose of calculating the registration fee, based on the average of
the high and low sale prices of the Common Stock on the Nasdaq National
Market on May 18, 1998.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
================================================================================
<PAGE> 2
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED MAY 22, 1998
PROSPECTUS
474,349 SHARES
VERTEX COMMUNICATIONS CORPORATION
COMMON STOCK
------------------------
All of the 474,349 shares (the "Shares") of Common Stock, par value $.10
per share ("Common Stock"), of Vertex Communications Corporation, a Texas
corporation (the "Company"), offered hereby are being offered by and for the
account of certain shareholders of the Company (the "Selling Shareholders") who
received Common Stock in connection with an acquisition made by the Company. See
"Selling Shareholders".
The Common Stock is traded on the Nasdaq National Market System (the
"Nasdaq") under the symbol "VTEX". On May 18, 1998, the last reported sale price
of the Common Stock on the Nasdaq was $24.25 per share.
SEE "RISK FACTORS" BEGINNING ON PAGE 4 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE COMMON STOCK OFFERED
HEREBY.
------------------------
The Shares were issued to the Selling Shareholders in connection with a
reorganization exempt from the registration requirements of the Securities Act
of 1933, as amended (the "Securities Act"), pursuant to Section (4)2 thereof and
Regulation D thereunder. After June 10, 1998, the Shares may be offered by the
Selling Shareholders from time to time in open market transactions (which may
include block transactions) or otherwise in the over-the-counter market through
the Nasdaq, or in private transactions at prices relating to prevailing market
prices or at negotiated prices. The Selling Shareholders may effect such
transactions by selling Shares to or through broker-dealers, and such
broker-dealers may receive compensation in the form of discounts, concessions or
commissions from the Selling Shareholders and/or the purchasers of Shares for
whom such broker-dealers may act as agent or to whom they sell as principal or
both (which compensation as to a particular broker-dealer might be in excess of
customary commissions). The Selling Shareholders and any broker-dealer acting in
connection with the sale of the Shares offered hereby may be deemed to be
"underwriters" within the meaning of the Securities Act, in which event any
discounts, concessions or commissions received by them, which are not expected
to exceed those customary in the types of transactions involved, or any profit
on resales of the Shares by them, may be deemed to be underwriting commissions
or discounts under the Securities Act. See "Plan of Distribution" and "Selling
Shareholders".
The Company will receive no part of the proceeds of sales made hereunder.
All expenses of registration incurred in connection with this offering are being
borne by the Company, but all selling and other expenses incurred by the Selling
Shareholders will be borne by such Selling Shareholders. See "Selling
Shareholders".
Certain transfer restrictions have been placed on the Shares offered
hereunder by agreement between the Company and the Selling Shareholders. As a
result, no Shares may be sold prior to June 10, 1998 or after March , 1999.
See "Selling Shareholders".
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
The date of this Prospectus is , 1998.
<PAGE> 3
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the office of
the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, as well as at the regional offices of the Commission at
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661,
and Seven World Trade Center, 13th Floor, New York, New York 10048. Copies of
such information can be obtained by mail from the Public Reference Section of
the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. Additionally, the Commission maintains a web site
that contains reports, proxy statements and other information regarding
registrants (including the Company) that file electronically with the
Commission. The address of the Commission's web site is http://www.sec.gov. The
Company's Common Stock is listed on the Nasdaq and copies of reports, proxy
statements and other information concerning the Company also can be inspected at
the offices of the Nasdaq National Market, 1735 K Street, NW, Washington, D.C.
20006.
This Prospectus constitutes a part of a registration statement on Form S-3
(the "Registration Statement") filed by the Company with the Commission under
the Securities Act. This Prospectus does not contain all the information set
forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission, and reference is
hereby made to the Registration Statement and to the exhibits relating thereto
for further information with respect to the Company and the Shares offered
hereby. Any statements contained herein concerning the provisions of any
document are not necessarily complete, and, in each instance, reference is made
to a copy of such document filed as an exhibit to the Registration Statement or
otherwise filed with the Commission. Each such statement is qualified in its
entirety by such reference. Copies of the Registration Statement and the
exhibits thereto may be inspected, without charge, at the offices of the
Commission, or obtained at prescribed rates from the Public Reference Section of
the Commission at the address set forth above.
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed by the Company with the Commission
(File No. 0-15277) pursuant to the Exchange Act are hereby incorporated by
reference into this Prospectus:
(1) The Company's Annual Report on Form 10-K for the fiscal year ended
September 30, 1997; and
(2) The Company's quarterly report on Form 10-Q for the quarter ended
January 2, 1998; and
(3) The Company's quarterly report on Form 10-Q for the quarter ended
April 3, 1998; and
(4) The description of the Common Stock contained in the Registration
Statement on Form 8-A of the Company heretofore filed with the Commission,
including any amendments or reports filed for the purpose of updating such
description.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the filing of a post-effective amendment which indicates that all Shares offered
hereby have been sold or which deregisters all Shares then remaining unsold,
shall be deemed to be incorporated by reference into this Prospectus and to be a
part hereof from the date of filing of such documents. Any statement contained
in this Prospectus or in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
THE COMPANY UNDERTAKES TO PROVIDE WITHOUT CHARGE TO EACH PERSON, INCLUDING
ANY BENEFICIAL OWNER, TO WHOM THIS PROSPECTUS IS DELIVERED, ON THE WRITTEN OR
ORAL REQUEST OF ANY SUCH PERSON, A COPY OF ANY AND ALL OF THE DOCUMENTS
INCORPORATED BY REFERENCE HEREIN (OTHER THAN EXHIBITS TO SUCH DOCUMENTS WHICH
ARE NOT SPECIFICALLY INCORPORATED BY REFERENCE IN SUCH DOCUMENTS). WRITTEN
REQUESTS FOR SUCH COPIES SHOULD BE DIRECTED TO THE COMPANY, 2600 NORTH LONGVIEW
STREET, KILGORE, TEXAS 75662, ATTENTION: JAMES D. CARTER, VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER. TELEPHONE REQUESTS MAY BE DIRECTED TO JAMES D. CARTER
AT (903) 984-0555.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS IN CONNECTION WITH
THE OFFERING DESCRIBED HEREIN AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR THE SELLING SHAREHOLDERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO
SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THOSE
SPECIFICALLY OFFERED HEREBY OR OF ANY SECURITIES OFFERED HEREBY IN ANY
JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED, OR IN WHICH
THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO, OR TO
ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED OR
INCORPORATED BY REFERENCE HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE
DATE HEREOF OR THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE
SUCH DATE.
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<PAGE> 5
THE COMPANY
Vertex Communications Corporation designs, develops, manufactures, markets
and supports an extensive line of precision products for satellite and deep
space communications applications. These products include sophisticated earth
station antennas ranging in size from 1.2 to 34 meters in diameter (which
operate in various relevant frequency bands, including L-, C-, X, Ku- and
Ka-bans, and are available for commercial and military applications), integrated
communications network systems, and optical and radio telescopes. The Company
also manufactures state-of-the-art control systems designed to manage and
monitor the operation, guidance, tracking and telemetry capabilities of
communications network systems as well as individual antennas, related
electronic components used to amplify radio frequency signals, and precision
waveguide components for application as component parts of communications
systems. The Company also provides custom engineering, turnkey field
installation, site testing and after-sale and maintenance services, and spare
and replacement parts in support of its products.
The Company's strategy is to provide a wide variety of precision satellite
communications products compliant with state-of-the-art technology to satisfy an
expanding range of customer and industry requirements. To accomplish its
objectives, the Company engages in ongoing efforts to introduce, in a timely
manner, products that are designed to meet applicable domestic and international
specifications. The Company believes that it offers a more diverse line of
products than any of its principal competitors. Due to the exacting design and
engineering requirements necessary to produce satellite communications systems,
subsystems and related products, quality control and precision engineering are
central to the manufacturing process. The Company believes it has developed a
reputation as a leader in quality control procedures which has enhanced its
position in the marketplace.
While the Company markets its products to systems integrators and end users
who combine the Company's products with other communications equipment to form
complete communications systems, the Company also markets integrated
communications network systems utilizing its own products. In the United States,
the Company markets its products through a direct sales force; while in
international markets, the Company utilizes a direct sales force, supplemented
by independent foreign sales representatives. The Company's customers include
the television broadcast industry, international telecommunications companies,
communications common carriers, private communications networks, and government
agencies, including certain agencies of the U.S. Government and various foreign
governments.
The Company was organized as a Texas corporation in 1984. The Company's
wholly-owned subsidiaries include: TIW Systems, Inc., a Nevada corporation
headquartered in Santa Clara, California; Gamma-f Corp., a Nevada corporation
headquartered in Torrance, California; Maxtech, Inc., a Pennsylvania corporation
which is located in State College, Pennsylvania; Vertex Antennentechnik GmbH, a
corporation formed pursuant to the laws of the Federal Republic of Germany, with
its headquarters in Duisburg, Germany; Vertex Foreign Sales Corporation, formed
pursuant to the laws of The Virgin Islands, with its office in St. Thomas, The
Virgin Islands; and Vertex International, Ltd., formed under the laws of
England.
The Company's principal executive offices are located at 2600 North
Longview Street, Kilgore, Texas 75662, and its telephone number is (903)
984-0555.
RISK FACTORS
In addition to the other information contained or incorporated by reference
in this Prospectus, the following should be considered carefully by prospective
purchasers in evaluating an investment in the shares of Common Stock offered by
this Prospectus.
DEPENDENCE ON MAJOR CUSTOMERS. The continued success of the Company's
business is dependent on continued sales to its major customers. While no single
customer accounted for as much as 10% of the Company's total sales in fiscal
1997, GTE Corporation and Satellite Transmission Systems, Inc., a subsidiary of
California Microwave Systems, Inc., accounted for 12% and 16% of the Company's
total sales in fiscal 1996 and 1995, respectively. For the six months ended
April 3, 1998, no single customer accounted for as much as 10% of the Company's
total sales for such period. The Company believes that its relationships with
such
4
<PAGE> 6
customers are excellent and that it will continue to be a major supplier of
satellite communications earth station antenna products to its major customers.
Although each of these relationships has existed for multiple years, there can
be no assurance that such relationships will continue. The loss of any one of
such customers could have a material adverse effect on the Company and its
business.
EXPORT SALES AND REGULATORY STANDARDS. Export sales to international
markets were 56%, 59% and 64% of total sales in fiscal 1997, 1996 and 1995,
respectively. For the six months ended April 3, 1998, export sales to
international markets represented approximately 62% of the Company's total
sales. The Company expects that its international business increasingly will
account for a more significant portion of its net sales. Foreign regulatory
bodies often establish standards different from those of the United States.
Currently, the Company's products are designed to meet both domestic and foreign
standards. Any future foreign regulatory requirement changes could require the
design or redesign of specific products for foreign standards. While to date the
Company has experienced no material difficulty in this regard and currently
anticipates none in the foreseeable future, the cost and effort incurred by the
Company to design or redesign products in compliance with such foreign standards
could adversely affect the Company's operating results.
CURRENCY EXCHANGE RATES. Although the Company conducts substantially all of
its international business in United States dollars, such international business
may be affected by changes in demand resulting from fluctuation in currency
exchange rates, as well as by risks such as tariff regulations and difficulties
in obtaining export licenses. While the Company's international business has not
been materially affected by any of these factors to date, there can be no
assurance that such factors will not have a material adverse effect upon the
Company's business in the future.
TECHNOLOGICAL CHANGE AND PRODUCT DEVELOPMENT. The satellite communications
earth station antenna industry is characterized by technological change, product
introductions and evolving industry standards resulting from ongoing research
and development efforts. Although the Company believes it has certain
technological and other advantages over its competitors, maintaining such
advantages will require continued investment by the Company in research and
development and sales and marketing. The Company's ability to compete
successfully will depend, to a significant extent, on its ability to continue to
enhance its existing products and to develop and introduce new products which
maintain technological leadership, satisfy an expanded range of customer needs
and maintain market acceptance. There can be no assurance that the demand for
the Company's products will not be adversely impacted by subsequent developments
in the industry or by the development of some alternative technology.
COMPETITION. The Company experiences substantial competition from a number
of established companies which provide a broad range of products to the
satellite communications earth station antenna market. Certain of these
companies have substantially greater financial and personnel resources than
those available to the Company. The Company's products may not be proprietary or
patentable, and consequentially may be subject to duplication and exploitation
by its competition. No assurance can be given that the Company will be able to
continue to effectively compete with existing or future competitors in the
satellite communications earth station antenna industry.
ANTI-TAKEOVER PROVISIONS. Texas law includes a number of provisions that
may have the effect of delaying or deterring a change in the control of
management of the Company and encouraging persons considering unsolicited tender
offers or other unilateral takeover proposals to negotiate with the Company's
Board of Directors rather than pursue non-negotiated takeover attempts. These
provisions may make it more difficult for shareholders of the Company to benefit
from certain transactions which are opposed by the incumbent Board of Directors.
See "Description of Capital Stock -- Business Combination Law".
DEPENDENCE ON KEY PERSONNEL. The Company is dependent upon the continued
services and management experience of its senior executive officers. The ability
of the Company to retain such officers is important to the continued success and
growth of the Company. The loss of key personnel could have a material adverse
effect on the Company. Except for limited coverage of its President and Chief
Executive Officer, the Company does not maintain key person insurance on its
executive officers. The Company's continued growth depends on its ability to
attract and retain skilled employees and on the ability of its officers and key
employees to successfully manage growth.
5
<PAGE> 7
FORWARD-LOOKING STATEMENTS. The statements contained in or incorporated by
reference into this Prospectus, including, but not limited to, those regarding
the Company's financial position, business strategy and other plans and
objectives for future operations and any other statements which are not
historical facts are forward-looking statements. When used in this document, the
words "anticipate," "estimate," "may," "plans," "project," and similar
expressions are intended to be among the statements that identify forward-
looking statements. Such statements involve risks and uncertainties, including,
but not limited to, those relating to the Company's dependence on its ability to
attract and retain skilled managers and other personnel; the intense competition
with the satellite and deep space communications industry; the uncertainty of
the Company's ability to manage and continue its growth and implement its
business strategy; effects of regulations; the Company's vulnerability to
general economic conditions and dependence on its principal customers; the
Company's future financial and operating results, cash need and demand for its
products and services; as well as other factors detailed in "Risk Factors" and
elsewhere in this Prospectus and in the Company's other filings with the
Securities and Exchange Commission. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove incorrect,
actual outcomes may vary materially from those indicated.
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<PAGE> 8
SELLING SHAREHOLDERS
The Shares being offered by the Selling Shareholders were acquired from the
Company in a transaction exempt from the registration requirements of the
Securities Act provided by Section 4(2) thereof and Regulation D thereunder
pursuant to an Agreement and Plan of Reorganization (the "Reorganization
Agreement"), dated May 9, 1997, between and among the Company, Vertex
Acquisition Corporation, a wholly-owned subsidiary of the Company, and TIW
Systems, Inc. ("TIW"). The Company is registering the Shares of the Selling
Shareholders pursuant to certain registration rights granted to them pursuant to
the Reorganization Agreement. The Shares are being registered to permit
secondary trading of the Shares, and the Selling Shareholders may offer Shares
for resale from time to time after June 10, 1998. See "Plan of Distribution."
The offering of the Shares contemplated hereby may commence at any time
subsequent to the effective date of this prospectus and June 10, 1998 and will
terminate on March , 1999, or such earlier date as all of the Shares offered
hereby have been sold.
The following table sets forth the name of each Selling Shareholder, the
aggregate number of shares owned by each Selling Shareholder prior to this
offering, the percentage of the Company's outstanding Common Stock owned by such
Selling Shareholder prior to this offering, the aggregate number of shares to be
offered by each Selling Shareholder, the aggregate number of shares to be owned
by each Selling Shareholder after the sale of all Shares in this offering and
the percentage of the Company's outstanding Common Stock that will be owned by
such Selling Shareholder thereafter, in each case assuming the offering of and
sale of all Shares in this offering.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED SHARES BENEFICIALLY OWNED
PRIOR TO OFFERING(1) AFTER CLOSING
------------------------- -------------------------
NUMBER OF NUMBER OF SHARES NUMBER OF
SELLING SHAREHOLDER SHARES PERCENT(2) BEING OFFERED SHARES PERCENT(2)
------------------- ---------- ----------- ---------------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Louis E. and Elizabeth A.
Becker(3)......................... 34,808 * 34,808 0 *
Jean-Pierre Bourgon................. 1,900 * 1,900 0 *
Cynthia J. Carter................... 618 * 618 0 *
Joseph Hermann Duller(4)............ 1,044 * 1,044 0 *
Raymond Geisick(4).................. 1,675 * 1,675 0 *
John R. and Ann M. Griffiths(5)..... 2,578 * 2,578 0 *
Paul J. Ironmonger(6)............... 23,120 * 23,120 0 *
Patricia A. Krehnke(4).............. 558 * 558 0 *
Edward F. Kurz(7)................... 2,792 * 2,792 0 *
Rein Luik(8)........................ 121,830 2.4 90,012 31,818 *
Fred A. McGiven(4).................. 1,396 * 1,396 0 *
William F. Nickerson(4)............. 1,253 * 1,253 0 *
Heldur Tonisson(9).................. 261,066 5.1 192,884 68,182 1.3
TIW Stock Bonus Plan(10)............ 104,092 2.0 104,092 0 *
Robert L. and Heather L.
Wallace(4)........................ 6,636 * 6,636 0 *
Robert N. Wellins(4)................ 1,253 * 1,253 0 *
John W. Whetstone(4)................ 5,565 * 5,565 0 *
Gary A. Young(4).................... 1,237 * 1,237 0 *
Yu-Chien Yuan(4).................... 928 * 928 0 *
Total...................... 574,349 11.2% 474,349 100,000 2.0%
</TABLE>
- ---------------
* Represents beneficial ownership of less than 1% of the outstanding shares
of Common Stock.
(1) Based on 5,110,688 shares of Common Stock issued and outstanding as of May
18, 1998.
(2) The table includes shares of Common Stock that may be acquired through the
exercise of options within 60 days. The percentage of the Common Stock
owned by each person has been computed assuming the exercise of all options
deemed to be beneficially owned by that person, and assuming that no
options held by any other person have been exercised.
7
<PAGE> 9
(3) Mr. Becker is Executive Vice President of Operations of TIW Systems, Inc.,
a wholly-owned subsidiary of the Company.
(4) Currently an employee of TIW Systems, Inc.
(5) Mr. Griffiths formerly served as a director of TIW Systems, Inc. from May
1984 to June 1997.
(6) Includes 4,451 shares held by Whitcust & Co. as custodian for the benefit
of the Paul J. Ironmonger IRA.
(7) Mr. Kurz is Vice President and Chief Financial Officer of TIW Systems, Inc.
and a co-trustee of the TIW Stock Bonus Plan.
(8) Mr. Luik is President of TIW Systems, Inc., Vice President of the Company
and a co-trustee of the TIW Stock Bonus Plan.
(9) Mr. Tonisson formerly served as Chairman of the Board and a director of TIW
Systems, Inc. from May 1994 to June 1997.
(10) Of the 104,092 held by the TIW Stock Bonus Plan, 20,742 shares are held on
behalf of the Selling Shareholders. Of these 20,742 shares, 20,543 shares
are vested in the accounts of the Selling Shareholders under the TIW Stock
Bonus Plan and 199 shares are allocated to the Selling Shareholders,
subject to the vesting provisions of such Plan.
DESCRIPTION OF CAPITAL STOCK
GENERAL. The authorized capital stock of the Company consists of 20,000,000
shares of Common Stock, $.10 par value per share. As of May 18, 1998, 5,110,688
shares of Common Stock were outstanding.
COMMON STOCK. All outstanding shares of Common Stock are fully paid and
nonassessable. All holders of Common Stock have full voting rights and are
entitled to one vote for each share held of record on all matters submitted to a
vote of the shareholders. Votes may not be cumulated in the election of
Directors. Shareholders have no preemptive, subscription or conversion rights.
The Common Stock is neither redeemable nor convertible, and there are no sinking
fund provisions. Holders of Common Stock are entitled to dividends when and as
declared by the Board of Directors from funds legally available therefor and are
entitled, in the event of liquidation, to share ratably in all assets remaining
after payment of all obligations of the Company. With respect to any action
required by the Shareholders of the Company, the affirmative vote of the holders
of a majority of the Company's issued and outstanding Common Stock entitled to
vote is sufficient to authorize, affirm, ratify or consent to such action.
ChaseMellon Shareholder Services, LLC is the registrar and transfer agent
for the Common Stock.
SPECIAL MEETINGS. Special Meetings of the shareholders of the Company may
be called by the Chairman of the Board or the President, and shall be called by
the President or Secretary at the request of a majority of the Board of
Directors or by shareholders holding not less than 10% of the outstanding voting
stock of the Company.
BUSINESS COMBINATION LAW. The Company is subject to Part Thirteen (the
"Business Combination Law") of the Texas Business Corporation Act, which took
effect September 1, 1997. In general, the Business Combination Law prevents an
"affiliated shareholder" (defined generally as a person that is or was within
the preceding three-year period the beneficial owner of 20% or more of a
corporation's outstanding voting shares) or its affiliates or associates from
entering into or engaging in a "business combination" (defined generally to
include (i) mergers or share exchanges, (ii) dispositions of assets having an
aggregate value equal to 10% or more of the market value of the assets or of the
outstanding common stock or representing 10% or more of the earning power or net
income of the corporation, (iii) certain issuances or transactions by the
corporation that would increase the affiliated shareholder's number of shares of
the corporation, (iv) certain liquidations or dissolutions, and (v) the receipt
of tax, guarantee, loan or other financial benefits by an affiliated shareholder
other than proportionately as a shareholder of the corporation) with an "issuing
public corporation" (which
8
<PAGE> 10
includes the Company) during the three-year period immediately following the
affiliated shareholder's acquisition of shares unless (a) before the date such
person became an affiliated shareholder, the board of directors of the issuing
public corporation approves the business combination or the acquisition of
shares made by the affiliated shareholder on such date or (b) not less than six
months after the date such person became an affiliated shareholder, the business
combination is approved by the affirmative vote of holders of at least two-
thirds of the issuing public corporation's outstanding voting shares not
beneficially owned by the affiliated shareholder or its affiliates or
associates. The Business Combination Law does not apply to a business
combination with an affiliated shareholder that was the beneficial owner of 20%
or more of the outstanding voting shares of the issuing public corporation on
December 31, 1996, and continuously until the announcement date of the business
combination. In discharging the duties of director under the Business
Combination Act or otherwise, a director, in considering the best interests of
the Company, may consider the long-term as well as the short-term interests of
the Company and its shareholders, including the possibility that those interests
may be best served by the continued independence of the Company.
LIMITATION OF DIRECTOR LIABILITY AND INDEMNIFICATION ARRANGEMENTS. The
Restated Articles of Incorporation, as amended, of the Company contain a
provision that limits the liability of the Company's directors as permitted by
the Texas Miscellaneous Corporation Laws Act. The provision eliminates the
personal liability of directors to the Company and its shareholders for monetary
damages for breach of directors' fiduciary duty of care. The provision does not
change the liability of a director for breach of his duty of loyalty to the
Company or to shareholders, acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, an act or omission for
which the liability of a director is expressly provided for by an applicable
statute, an act related to an unlawful stock repurchase or payment of a
dividend, or in respect of any transaction from which a director received an
improper personal benefit. Pursuant to the Restated Articles of Incorporation,
the liability of directors will be further limited or eliminated without action
by shareholders if Texas law is amended to further limit or eliminate the
personal liability of directors.
The Company's Bylaws, as amended, provide for the indemnification of its
officers and directors, and the advancement to them of expenses in connection
with proceedings and claims, to the fullest extent permitted by the Texas
Business Corporation Act. The Company has also entered into indemnification
agreements with each of its directors and certain of its officers that
contractually provided for indemnification and expense advancement and include
related provisions meant to facilitate the indemnitees' receipt of such
benefits. In addition, the Company may purchase directors' and officers'
liability insurance policies for its directors and officers in the future. Such
indemnification may be made even though directors and officers would not
otherwise be entitled to indemnification under other provisions of the Bylaws or
such agreements. It is the position of the Commission that indemnification of
directors and officers for liabilities arising under the Securities Act is
against public policy and is unenforceable pursuant to Section 14 of the
Securities Act.
PLAN OF DISTRIBUTION
The Shares may be sold from time to time by the Selling Shareholders after
June 10, 1998. All sales may be made by the Selling Shareholders on the Nasdaq,
in privately negotiated transactions or otherwise at prices and at terms related
to the then current market price, or in negotiated transactions. The Shares may
be sold by any one or more of the following methods:
(a) a block trade in which the broker or dealer so engaged will
attempt to sell the Shares as agent, but may position and resell a portion
of a block as principal to facilitate the transaction;
(b) purchases by a broker or dealer as principal, and resale by such
broker or dealer, for its account pursuant to this Prospectus;
(c) ordinary brokerage transactions and transactions in which the
broker solicits purchasers; and
(d) privately negotiated transactions.
The Selling Shareholders may effect such transactions by selling the Shares
through or to brokers or dealers, and such brokers or dealers will receive
compensation in the form of discounts or commissions from
9
<PAGE> 11
the Selling Shareholders, and may receive commissions from the purchasers of the
Shares for whom they may act as agent (which discounts or commissions from the
Selling Shareholders or such purchasers might exceed those customary in the
types of transactions involved).
Any Shares covered by this Prospectus which qualify for sale pursuant to
Rule 144 under the Securities Act may be sold under that Rule rather than
pursuant to this Prospectus.
There can be no assurance that the Selling Shareholders will sell any or
all of the Shares offered by them hereunder.
The Company will pay all fees and expenses incident to the preparation and
filing of the Registration Statement and this Prospectus, including legal and
accounting fees and expenses other than any underwriting discounts, any selling
commissions payable in respect of sales of the Shares or any expenses incurred
by the Selling Shareholders to retain any counsel, accountant or other advisor;
all of which will be paid by the Selling Shareholders. The Company will receive
no part of the proceeds from sales of the Shares. The Company intends to keep
the Registration Statement effective until March , 1999.
The Selling Shareholders and any broker-dealer acting in connection with
the sale of the Shares offered hereby may be deemed to be "underwriters" within
the meaning of the Securities Act, in which event any discounts, concessions or
commissions received by them, which are not expected to exceed those customary
in the types of transactions involved, or any profit on resales of the Shares by
them, may be deemed to be underwriting commissions or discounts under the
Securities Act.
LEGAL MATTERS
The legality of the Shares offered hereby will be passed upon for the
Company by Thompson & Knight, P.C., Dallas, Texas.
EXPERTS
The financial statements and schedules incorporated by reference in this
prospectus and elsewhere in the registration statement have been audited by
Arthur Andersen, LLP, independent public accountants, as indicated in their
reports with respect thereto, and are included herein in reliance upon the
authority of said firm as experts (or, as experts in accounting and auditing) in
giving said reports.
10
<PAGE> 12
======================================================
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES TO
WHICH IT RELATES OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH
SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER
ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY OR THE TRUST SINCE THE DATE HEREOF OR THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information................. 2
Incorporation of Certain Documents by
Reference........................... 3
The Company........................... 4
Risk Factors.......................... 4
Selling Shareholders.................. 7
Description of Capital Stock.......... 8
Plan of Distribution.................. 9
Legal Matters......................... 10
Experts............................... 10
</TABLE>
======================================================
======================================================
474,349 SHARES
[LOGO]
COMMON STOCK
VERTEX COMMUNICATIONS
CORPORATION
, 1998
======================================================
<PAGE> 13
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Except for the SEC registration fee, all expenses are estimated. All such
expenses will be paid by the Registrant.
<TABLE>
<S> <C>
SEC registration fee........................................ $ 3,394
Accounting fees and expenses................................ 5,000
Legal fees and expenses..................................... 22,000
Miscellaneous............................................... 606
Printing fees and expenses.................................. 8,500
-------
Total............................................. $39,500
=======
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company is a Texas corporation. Article 1302-7.06 of the Texas
Miscellaneous Corporation Laws Act authorizes Texas corporations, such as the
Company, to eliminate or limit, pursuant to a provision in their articles of
incorporation, the liability of directors thereof to the corporation and its
shareholders for certain acts or omissions in the director's capacity as a
director, subject to certain limitations. Reference is made to Article Thirteen
of the Company's Restated Articles of Incorporation, as amended, which are filed
herewith as Exhibit 4.1, that eliminates the liability of directors of the
Company for monetary damages for certain acts or omissions, subject to certain
limitations. It is the position of the Commission that indemnification of
directors and officers for liabilities arising under the Securities Act is
against public policy and is unenforceable pursuant to Section 14 of the
Securities Act.
Article 2.02-1 of the Texas Business Corporation Act provides that a
corporation may indemnify any director or officer who was, is or is threatened
to be made a named defendant or respondent in a proceeding because he is or was
a director or officer, provided that the director or officer (i) conducted
himself in good faith, (ii) reasonably believed (a) in the case of conduct in
his official capacity, that his conduct was in the corporation's best interests
or (b) in all other cases, that his conduct was at least not opposed to the
corporation's best interests and (iii) in the case of any criminal proceeding,
had no reasonable cause to believe his conduct was unlawful. Subject to certain
exceptions, a director or officer may not be indemnified if the person is found
liable to the corporation or if the person is found liable on the basis that he
improperly received a personal benefit. Under Texas law, reasonable expenses
incurred by a director or officer may be paid or reimbursed by the corporation
in advance of a final disposition of the proceeding after the corporation
receives a written affirmation by the director or officer of his good faith
belief that he has met the standard of conduct necessary for indemnification and
a written undertaking by or on behalf of the director or officer to repay the
amount if it is ultimately determined that the director or officer is not
entitled to indemnification by the corporation. Texas law requires a corporation
to indemnify an officer or director against reasonable expenses incurred in
connection with the proceeding in which he is named defendant or respondent
because he is or was a director or officer if he is wholly successful in defense
of the proceeding.
Texas law also permits a corporation to purchase and maintain insurance or
another arrangement on behalf of any person who is or was a director or officer
against any liability asserted against him and incurred by him in such a
capacity or arising out of his status as such a person, whether or not the
corporation would have the power to indemnify him against that liability under
Article 2.02-1.
The Company's Restated Articles of Incorporation and Bylaws provide for the
indemnification of its officers and directors, and the advancement to them of
expenses in connection with proceedings and claims, to the fullest extent
permitted by the Texas Business Corporation Act. The Company has also entered
into indemnification agreements with each of its directors and certain of its
officers that contractually provide for
II-1
<PAGE> 14
indemnification and expense advancement and include related provisions meant to
facilitate the indemnitees' receipt of such benefits.
The above discussions of Article 1302-7.06 of the Texas Miscellaneous
Corporation Law Act, Article 2.02-1 of the Texas Business Corporation Act and of
the Company's Restated Articles of Incorporation and Bylaws are not intended to
be exhaustive and each is respectively qualified in its entity by reference to
the applicable statute and the Company's Restated Articles of Incorporation and
Bylaws, as amended.
ITEM 16. EXHIBITS.
The information required by this Item 16 is set forth in the Index to
Exhibits accompanying this Registration Statement.
ITEM 17. UNDERTAKINGS.
(a) Rule 415 Offering.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
Registration Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the
effective registration statement; and
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the Registrant
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) Filings incorporating subsequent Exchange Act documents by reference.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's Annual Report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
II-2
<PAGE> 15
(h) Request for acceleration of effective date.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described in Item 15 above, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
II-3
<PAGE> 16
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Kilgore, State of Texas, on the 22nd day of May,
1998.
VERTEX COMMUNICATIONS CORPORATION
(Registrant)
By: /s/ J. REX VARDEMAN
------------------------------------
J. Rex Vardeman
Chairman of the Board,
President and Chief Executive
Officer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints J. Rex
Vardeman and James D. Carter, and each of them (with full power to each of them
to act alone), his true and lawful attorney-in-fact and agent, with full power
of substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities to sign on his behalf individually and in each capacity
stated below any amendment, including post-effective amendments, to this
Registration Statement under the Securities Act of 1933, as amended, and to file
the same, with all exhibits thereto and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents and either of them, or their substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ J. REX VARDEMAN Chairman of the Board, May 22, 1998
- ----------------------------------------------------- President and Chief
J. Rex Vardeman Executive Officer and
Director (Principal
Executive Officer)
/s/ JAMES D. CARTER Vice President and Chief May 22, 1998
- ----------------------------------------------------- Financial Officer,
James D. Carter Treasurer and Director
(Principal Financial and
Accounting Officer)
/s/ A. DON BRANUM Senior Vice President and May 22, 1998
- ----------------------------------------------------- Director
A. Don Branum
/s/ DONALD E. HEITZMAN, SR. Director May 22, 1998
- -----------------------------------------------------
Donald E. Heitzman, Sr.
</TABLE>
II-4
<PAGE> 17
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ JOHN G. FARMER Director May 22, 1998
- -----------------------------------------------------
John G. Farmer
/s/ REIN LUIK Director May 22, 1998
- -----------------------------------------------------
Rein Luik
/s/ BILL R. WOMBLE Director May 22, 1998
- -----------------------------------------------------
Bill R. Womble
</TABLE>
II-5
<PAGE> 18
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
4.1* -- Restated Articles of Incorporation of the Company and
Amendments No. 1 and No. 2 thereto
4.2* -- Bylaws of the Company and Amendments No. 1 and No. 2
thereto
5.1* -- Opinion of Thompson & Knight, P.C., regarding legality of
shares
23.1* -- Consent of counsel (included in the opinion of Thompson &
Knight, P.C. filed herewith as Exhibit 5.1)
23.2* -- Consent of independent accountants
24* -- Power of Attorney (a power of attorney pursuant to which
amendments to this Registration Statement may be filed is
included on the signature page hereof)
</TABLE>
- ---------------
* Filed herewith.
<PAGE> 1
EXHIBIT 4.1
================================================================================
VERTEX COMMUNICATIONS CORPORATION
EXHIBIT 4.1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
================================================================================
<PAGE> 2
RESTATED ARTICLES OF INCORPORATION
OF
VERTEX COMMUNICATIONS CORPORATION
ARTICLE ONE
NAME
The name of the corporation is VERTEX COMMUNICATIONS CORPORATION (the
"Corporation").
ARTICLE TWO
PERIOD OF DURATION
The period of duration of the Corporation is perpetual or until
dissolved or merged or consolidated in some lawful manner.
ARTICLE THREE
PURPOSES AND POWERS
Section 1. Purposes. The purposes for which the Corporation is
organized are to transact any and all lawful business for which corporations may
be incorporated under the Texas Business Corporation Act (the "Act").
Section 2. Powers. Subject to any specific written limitations or
restrictions imposed by the Act, by other law, or by these Articles of
Incorporation, and solely in furtherance thereof, but not in addition to the
limited purposes set forth in Section 1 of this Article, the Corporation shall
RESTATED ARTICLES OF INCORPORATION - PAGE 1
<PAGE> 3
have and exercise all of the powers specified in the Act, which powers are not
inconsistent with these Articles.
ARTICLE FOUR
CAPITALIZATION, PREEMPTIVE
RIGHTS AND VOTING
Section 1. Authorized Shares. The aggregate number of shares of capital
stock which the Corporation shall have authority to issue is FIVE MILLION
(5,000,000) shares of Common Stock without par value of the par value of Ten
Cents (10(cent)) per share, constituting aggregate capital stock of FIVE HUNDRED
THOUSAND AND NO/100 DOLLARS ($500,000.00).
Section 2. Preemptive Rights and Voting.
(A) Preemptive Rights. Unless otherwise determined by the Board of
Directors in the manner provided under the Act, no holder of shares of capital
stock of the Corporation shall, as such holder, have any right to purchase or
subscribe for any capital stock of any class which the Corporation may issue or
sell, whether or not exchangeable for any capital stock of the Corporation of
any class or classes, whether issued out of unissued shares authorized by these
Articles of Incorporation as originally filed or by any amendment thereof, or
out of shares of capital stock of the Corporation acquired by it after the issue
thereof; nor, unless otherwise determined by the Board of Directors in the
RESTATED ARTICLES OF INCORPORATION - PAGE 2
<PAGE> 4
manner provided under the Act, shall any holder of shares of capital stock of
the Corporation, as such holder, have any right to purchase, acquire or
subscribe for any securities which the Corporation may issue or sell whether or
not convertible into or exchangeable for shares of capital stock of the
Corporation of any class or classes, and whether or not any such securities have
attached or appurtenant thereto warrants, options or other instruments which
entitle the holders thereof to purchase, acquire or subscribe for shares of
capital stock of any class or classes.
(B) Voting. In the exercise of voting privileges, each holder of shares
of the capital stock of the Corporation shall be entitled to one (1) vote for
each share held in his name on the books of the Corporation. In all elections of
Directors of the Corporation, cumulative voting is expressly prohibited. As
such, each holder of shares of capital stock of the Corporation entitled to vote
at the election of Directors shall have the right to vote, in person or by
proxy, all or any portion of such shares for or against each individual Director
to be elected and shall not be entitled to vote for or against any one Director
more than the aggregate number of shares held by such holder which are entitled
to vote on the election of Directors. With respect to any action to be taken by
the shareholders of the Corporation as to any matter, the affirmative vote of
the holders of a majority of the outstanding shares of the capital stock of the
Corporation entitled to vote thereon shall be sufficient to authorize, affirm,
ratify or consent to such action.
RESTATED ARTICLES OF INCORPORATION - PAGE 3
<PAGE> 5
ARTICLE FIVE
COMMENCEMENT OF BUSINESS
The Corporation shall not commence business until it has received for
the issuance of its shares of Common Stock consideration of the value of at
least ONE THOUSAND AND NO/100 DOLLARS ($1,000.00) consisting of money paid,
labor done, or property actually received.
ARTICLE SIX
REGISTERED AGENT AND OFFICE
Section 1. Registered Office. The address of the registered office of
the Corporation is 2600 Longview Street, Kilgore, Texas 75662.
Section 2. Registered Agent. The name of the registered agent of the
Corporation at such address is J. REX VARDEMAN.
ARTICLE SEVEN
DIRECTORS
Section 1. Board of Directors. The initial Board of Directors shall
consist of one (1) member who need not be a resident of the State of Texas or a
Shareholder of the Corporation, the number of Directors of the Corporation may
from
RESTATED ARTICLES OF INCORPORATION - PAGE 4
<PAGE> 6
time to time be changed in accordance with the By-Laws of the Corporation and
the Act.
Section 2. Name and Address. The name and address of the person who is
to serve as Director until the first annual meeting of Shareholders or until his
successors are elected and qualified, or until his earlier death, resignation,
or removal is as follows:
<TABLE>
<CAPTION>
NUMBER, STREET
NAME OR BUILDING CITY, STATE
- ---- -------------- -----------
<S> <C> <C>
J. REX VARDEMAN 2600 Longview Kilgore, Texas
Street 75662
</TABLE>
ARTICLE EIGHT
INCORPORATOR
The name and address of the Incorporator is
<TABLE>
<CAPTION>
NUMBER, STREET
NAME OR BUILDING CITY, STATE
- ---- -------------- -----------
<S> <C> <C>
J. REX VARDEMAN P. O. Box 1277 Kilgore, Texas
75662
</TABLE>
ARTICLE NINE
SPECIAL POWERS OF
BOARD OF DIRECTORS
In furtherance of, and not in limitation of the powers and authorities
conferred under the Act, the Board of Directors is expressly authorized:
RESTATED ARTICLES OF INCORPORATION - PAGE 5
<PAGE> 7
1. To make, alter, amend and rescind the By-Laws of the
Corporation; to fix, adjust and maintain from time to time the
amount to be reserved as working capital; and to authorize and
cause to be executed mortgages and liens upon the real and
personal property of the Corporation.
2. From time to time, to determine whether and to what extent and
at what times and places and under what conditions and
provisions the accounts and books of the Corporation shall be
maintained and made available for inspection of any
Shareholder, and no Shareholder shall have any right to
inspect any account or books or records of the Corporation,
except as provided in the Act, or authorized by the Board of
Directors.
3. If the By-Laws so provide, to designate two or more of their
number to constitute an executive committee, which committee
shall, as provided in said resolution or in the By-Laws of the
Corporation, have and exercise any or all of the powers of the
Board of Directors in the management of the business and
affairs of the Corporation, except to the extent that the Act
requires a particular matter to be authorized by the Board of
Directors.
ARTICLE TEN
ADDITIONAL POWERS IN BY-LAWS
The Corporation may in its By-Laws confer powers and authorities upon
the Board of Directors in addition to the foregoing and to those expressly
conferred upon them by the Act.
RESTATED ARTICLES OF INCORPORATION - PAGE 6
<PAGE> 8
ARTICLE ELEVEN
TRANSACTIONS WITH DIRECTORS,
OFFICERS AND SHAREHOLDERS
The Officers, Directors and Shareholders holding ten percent (10%) or
more of the outstanding capital stock of the Corporation ("insiders") may enter
into business transactions with the Corporation in which they are personally
interested without such transaction being affected or invalidated solely because
of such personal interest; provided, however, that nothing contained herein
shall relieve any insider from liability for breach of the fiduciary duties of
an insider or authorize any insider to enter into any transaction with the
Corporation in which such insider has a material interest for the purpose of
personal gain to the detriment of the Corporation.
ARTICLE TWELVE
INDEMNIFICATION
The Corporation shall have the power and authority to indemnify and
hold its Directors and/or Officers harmless as authorized by the Board of
Directors in accordance with the Act and the By-Laws of the Corporation against
any and all loss, risk, damage, or expense arising from any action, suit, claim,
or proceeding in which they are made parties by reason
RESTATED ARTICLES OF INCORPORATION - PAGE 7
<PAGE> 9
of their capacity or relationship with the Corporation. Indemnification so made
and entered into shall not be deemed exclusive of any other rights to which any
such person might otherwise be entitled.
ARTICLE THIRTEEN
MEETINGS
Both Shareholders and Directors shall have the power and authority to
hold their meetings either within or without the State of Texas, upon compliance
with the provisions of the By-Laws pertaining thereto, and the Corporation may
have one or more offices in addition to its principal office in the State of
Texas, and keep its books and records (subject to the provisions of the Act)
outside of the State of Texas at such places as may be from time to time
designated by the Board of Directors.
ARTICLE FOURTEEN
AMENDMENTS
The Corporation reserves the right to amend, alter, change or repeal
any provision contained in these Articles of Incorporation or in its By-Laws in
the manner now or hereafter prescribed by the Act, and all rights conferred on
Shareholders herein are granted subject to this reservation.
RESTATED ARTICLES OF INCORPORATION - PAGE 8
<PAGE> 10
ARTICLE FIFTEEN
CAPTIONS
The captions used in these Articles of Incorporation are for
convenience only and shall not be construed in interpreting the provisions
hereof.
VERTEX COMMUNICATIONS CORPORATION
By: /s/ J. Rex Vardeman
-------------------------------
J. REX VARDEMAN, President
By: /s/ Bill Womble
-------------------------------
BILL WOMBLE, Secretary
THE STATE OF TEXAS )
)
COUNTY OF DALLAS )
BEFORE ME, a Notary Public, on this day personally appeared J. REX
VARDEMAN, known to me to be the person whose name is subscribed to the foregoing
document and, being by me first duly sworn, declared that the statements therein
contained are true and correct.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 12th day of September,
1984.
/s/ William F. Pyne
-------------------------------------
Notary Public in and for
The State of Texas
/s/ William F. Pyne
-------------------------------------
(Printed Name of Notary)
My Commission Expires:
11/09/84
- ----------------------
RESTATED ARTICLES OF INCORPORATION - PAGE 9
<PAGE> 11
ARTICLES OF AMENDMENT
TO THE
RESTATED ARTICLES OF INCORPORATION
OF
VERTEX COMMUNICATIONS CORPORATION
Pursuant to the provisions of Article 4.04 of the Texas Business
Corporation Act, VERTEX COMMUNICATIONS CORPORATION, the undersigned corporation
(the "Corporation"), adopts the following Articles of Amendment to its Restated
Articles of Incorporation previously amended by those certain Articles of
Amendment to the Restated Articles of Incorporation dated February 11, 1988, as
filed in the Office of the Secretary of State on February 16, 1988:
ARTICLE 1
NAME
The name of the Corporation is VERTEX COMMUNICATIONS CORPORATION.
ARTICLE 2
AMENDMENT
The following amendment to the Restated Articles of Incorporation, as
amended, was adopted by the shareholders of the Corporation on January 27, 1994,
in order to increase the number of authorized shares of common stock, $.10 par
value per share, of the Corporation from five million (5,000,000) shares to
twenty million (20,000,000) shares.
Section 1 of Article Four of the Restated Articles of Incorporation, as
amended, is hereby amended to read in its entirety as follows:
ARTICLES OF AMENDED TO THE
RESTATED ARTICLES OF INCORPORATION - PAGE 1
<PAGE> 12
"Section 1. Authorized Shares. The aggregate number of shares of
capital stock which the Corporation shall have authority to issue is Twenty
Million (20,000,000) shares of Common Stock of the par value of Ten Cents ($.10)
per share, constituting aggregate capital stock of Two Million Dollars
($2,000,000.00). "
ARTICLE 3
OUTSTANDING SHARES
The number of shares of the Corporation outstanding at the time of such
adoption was 4,586,556; and the number of shares entitled to vote thereon was
4,586,556.
ARTICLE 4
VOTE
The number of shares voted for such amendment was 3,316,173 (72.30%);
and the number of shares voted against such amendment was 561,706 (12.25%).
EXECUTED this 27th day of January, 1994.
VERTEX COMMUNICATIONS CORPORATION
By: /s/ J. Rex Vardeman
-----------------------------------------
J. REX VARDEMAN,
President and Chief Executive Officer
ARTICLES OF AMENDED TO THE
RESTATED ARTICLES OF INCORPORATION - PAGE 2
<PAGE> 13
ARTICLES OF AMENDMENT
TO THE
RESTATED ARTICLES OF INCORPORATION
OF
VERTEX COMMUNICATIONS CORPORATION
Pursuant to the provisions of Article 4.04 of the of the Texas Business
Corporation Act, VERTEX COMMUNICATIONS CORPORATION, the undersigned corporation
(the "Corporation"), adopts the following Articles of Amendment to its Restated
Articles of Incorporation:
ARTICLE l
NAME
The name of the Corporation is VERTEX COMMUNICATIONS CORPORATION.
ARTICLE 2
AMENDMENT
The following amendments to the Restated Articles of Incorporation were
adopted by the shareholders of the Corporation on February 11, 1988, in order to
limit the liability of Directors for monetary damages to the Corporation and its
shareholders and to provide for the indemnification of the Directors, officers,
employees and agents of the Corporation by the Corporation to the extent
permitted by the Texas Business Corporation Act.
2.1 Article Twelve of the Restated Articles of Incorporation is hereby
amended to read in its entirety as follows:
ARTICLES OF AMENDED TO THE
RESTATED ARTICLES OF INCORPORATION - PAGE 1
<PAGE> 14
ARTICLE TWELVE
INDEMNIFICATION
Section 1. Mandatory Indemnification and Advancement of
Expenses. Each person who was or is made a party or is threatened to be
made a party to or is involved in any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative, or
investigative, any appeal in such action, suit or proceeding, and any
inquiry or investigation that could lead to such an action, suit, or
proceeding (a "proceeding"), by reason of the fact that he or a person
for whom he is the legal representative is or was a director, officer,
employee or agent of the Corporation, or is or was serving at the
request of the Corporation as a director, officer, partner, venturer,
proprietor, trustee, employee, agent, or similar functionary of another
corporation, partnership, joint venture, sole proprietorship, trust, or
other enterprise (including service with respect to employee benefit
plans) shall be indemnified and held harmless by the Corporation to the
fullest extent permitted by the Texas Business Corporation Act, as
amended (the "Act"), against all judgments, penalties (including excise
and similar taxes), fines, settlements, and reasonable expenses
(including attorneys' fees) actually incurred by such person in
connection with such proceeding. Such right shall be a contract right
and shall include the right to require advancement by the Corporation
of reasonable expenses (including attorneys' fees) incurred in
defending any such proceeding in advance of its final disposition;
provided, however, that the payment of such expenses in advance of the
final disposition of such proceeding shall be made by the Corporation
only upon delivery to the Corporation of a written affirmation by such
person of his good faith belief that he has met the standard of conduct
necessary for indemnification under the Act and a written undertaking,
by or on behalf of such person, to repay all amounts so advanced if it
should be determined ultimately that such person is not entitled to be
so indemnified.
Section 2. Nature of Indemnification. The indemnification and
advancement of expenses provided for herein shall not be deemed
exclusive of any other rights permitted by law to which a
ARTICLES OF AMENDED TO THE
RESTATED ARTICLES OF INCORPORATION - PAGE 2
<PAGE> 15
person seeking indemnification may be entitled under any Bylaw, agreement, vote
of shareholders or disinterested directors or otherwise, and shall continue as
to a person who has ceased to be a director, officer, employee or agent and
shall inure to the benefit of the heirs, executors and administrators of such a
person.
Section 3. Insurance. The Corporation shall have power to
purchase and maintain insurance or another arrangement on behalf of any
person who is or was a director, officer, employee or agent of the
Corporation, or is or was serving at the request of the Corporation as
a director, officer, partner, venturer, proprietor, trustee, employee,
agent, or similar functionary of another corporation, partnership,
joint venture, sole proprietorship, trust or other enterprise
(including service with respect to employee benefit plans) against any
liability asserted against him and incurred by him in any such
capacity, or arising out of his status as such, whether or not the
Corporation would have the power to indemnify him against such
liability under the provisions of this Article Twelve.
2.2 Articles Thirteen, Fourteen and Fifteen are hereby renumbered
Article Fourteen, Article Fifteen and Article Sixteen, respectively.
2.3 A new Article Thirteen is hereby added to the Restated Articles of
Incorporation, which Article shall read in its entirety as follows:
ARTICLE THIRTEEN
LIMITATION OF LIABILITY
No director of the Corporation shall be personally liable to
the Corporation or its shareholders for monetary damages for an act or
omission in the director's capacity as a director, provided, however,
that the foregoing provision shall not eliminate or limit the liability
of a director for (i) a breach of the director's duty of loyalty to the
Corporation or its shareholders, (ii) an act or
ARTICLES OF AMENDED TO THE
RESTATED ARTICLES OF INCORPORATION - PAGE 3
<PAGE> 16
omission not in good faith or that involves intentional misconduct or a knowing
violation of the law, (iii) a transaction from which a director received an
improper benefit, whether or not the benefit resulted from an action taken
within the scope of the director's office, (iv) an act or omission for which the
liability of the director is expressly provided for by statute, or (v) an act
related to an unlawful stock repurchase or payment of a dividend. If the Texas
Miscellaneous Corporation Laws Act or other applicable provision of Texas law
hereafter is amended to authorize further elimination or limitation of the
liability of directors, then the liability of a director of the Corporation, in
addition to the limitation on the personal liability provided herein, shall be
limited to the fullest extent permitted by the Texas Miscellaneous Corporation
Laws Act or other applicable provision of Texas law as amended. Any repeal or
modification of this Article by the shareholders of the Corporation shall be
prospective only, and shall not adversely affect any limitation on the personal
liability of a director of the Corporation existing at the time of such repeal
or modification.
ARTICLE 3
OUTSTANDING SHARES
The number of shares of the Corporation outstanding at the time of such
adoption was 3,194,134; and the number of shares entitled to vote thereon was
3,194,134.
ARTICLE 4
VOTE
The number of shares voted for such Amendments was 2,714,962 (84.998%),
and the number of shares voted against such Amendments was 111,023 (3.476%).
ARTICLES OF AMENDED TO THE
RESTATED ARTICLES OF INCORPORATION - PAGE 4
<PAGE> 17
EXECUTED this 11th day of February, 1988.
VERTEX COMMUNICATIONS CORPORATION
By: /s/ J. Rex Vardeman
-------------------------------------------
J. REX VARDEMAN,
President
THE STATE OF TEXAS )
)
COUNTY OF GREGG )
Before me, the undersigned, a Notary Public in and for the State of
Texas, on this day personally appeared J. REX VARDEMAN, known to me to be the
person and officer whose name is subscribed to the foregoing instrument and
acknowledged to me that the same was the act of the said VERTEX COMMUNICATIONS
CORPORATION, a corporation, and that he executed the same as the act of such
corporation for the purposes and consideration therein expressed, and in the
capacity therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the 11th day of February,
1988.
/s/ Wilora Tucker
--------------------------------
Notary Public in and for
The State of Texas
/s/ Wilora Tucker
--------------------------------
(Printed Name of Notary Public)
My Commission Expires:
09-04-89
- ----------------------
ARTICLES OF AMENDED TO THE
RESTATED ARTICLES OF INCORPORATION - PAGE 5
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EXHIBIT 4.2
================================================================================
VERTEX COMMUNICATIONS CORPORATION
EXHIBIT 4.2
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
================================================================================
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TABLE OF CONTENTS
CORPORATE BY-LAWS
OF
VERTEX COMMUNICATIONS CORPORATION
(a Texas corporation)
<TABLE>
<CAPTION>
SECTION SUBJECT MATTER PAGE
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ARTICLE 1 -- NAME AND OFFICES................................................................................................1
1.01 Name.......................................................................................................1
1.02 Registered Office and Agent................................................................................1
(1) Registered Office.................................................................................1
(2) Registered Agent..................................................................................1
(3) Change of Registered Office or Agent..............................................................1
1.03 Other Offices..............................................................................................1
ARTICLE 2 -- SHAREHOLDERS....................................................................................................2
2.01 Place of Meetings..........................................................................................2
2.02 Annual Meetings............................................................................................2
2.03 Special Meetings...........................................................................................2
2.04 Notice.....................................................................................................2
2.05 Voting List................................................................................................3
2.06 Quorum.....................................................................................................3
2.07 Requisite Vote.............................................................................................4
2.08 Withdrawal of Quorum.......................................................................................4
2.09 Voting at Meeting..........................................................................................4
(1) Voting Power......................................................................................4
(2) Exercise of Voting Power; Proxies.................................................................4
(3) Election of Directors.............................................................................5
2.10 Record Date; Closing Transfer Books........................................................................5
2.11 Action Without Meetings....................................................................................5
2.12 Preemptive Rights..........................................................................................6
ARTICLE 3 -- DIRECTORS.......................................................................................................6
3.01 Management Powers..........................................................................................6
3.02 Number and Qualification...................................................................................6
3.03 Election and Term..........................................................................................7
3.04 Voting on Directors........................................................................................7
3.05 Vacancies..................................................................................................7
</TABLE>
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<TABLE>
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3.06 New Directorships..........................................................................................7
3.07 Removal....................................................................................................8
3.08 Meetings...................................................................................................8
(1) Place.............................................................................................8
(2) Annual Meeting....................................................................................8
(3) Regular Meetings..................................................................................8
(4) Special Meetings..................................................................................8
(5) Notice and Waiver of Notice.......................................................................8
(6) Quorum............................................................................................9
(7) Requisite Vote....................................................................................9
3.09 Action Without Meetings....................................................................................9
3.10 Committees.................................................................................................9
(1) Designation and Appointment.......................................................................9
(2) Members; Terms....................................................................................9
(3) Authority.........................................................................................9
(4) Records..........................................................................................10
(5) Change in Number.................................................................................10
(6) Vacancies........................................................................................10
(7) Removal..........................................................................................10
(8) Meetings.........................................................................................10
(9) Quorum; Requisite Vote...........................................................................10
(10) Compensation.....................................................................................10
(11) Action Without Meetings..........................................................................10
(12) Responsibility...................................................................................10
3.11 Compensation..............................................................................................11
3.12 Maintenance of Records....................................................................................11
3.13 Interested Directors and Officers.........................................................................11
ARTICLE 4 -- NOTICES........................................................................................................12
4.01 Method of Notice..........................................................................................12
4.02 Waiver....................................................................................................12
ARTICLE 5 -- OFFICERS AND AGENTS............................................................................................12
5.01 Designation...............................................................................................12
5.02 Election of Officers......................................................................................13
5.03 Qualifications............................................................................................13
5.04 Term of Office............................................................................................13
5.05 Authority.................................................................................................13
5.06 Removal...................................................................................................13
5.07 Vacancies.................................................................................................14
5.08 Compensation..............................................................................................14
5.09 Chairman of the Board.....................................................................................14
5.10 President.................................................................................................14
</TABLE>
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<TABLE>
<S> <C> <C>
5.11 Vice-Presidents...........................................................................................15
5.12 Secretary.................................................................................................15
5.13 Assistant Secretaries.....................................................................................15
5.14 Treasurer.................................................................................................16
5.15 Assistant Treasurers......................................................................................16
ARTICLE 6 -- INDEMNIFICATION................................................................................................17
6.01 Third Party Actions.......................................................................................17
6.02 Derivative Actions........................................................................................18
6.03 Authorization of Indemnity................................................................................18
6.04 Indemnification as to Expenses............................................................................19
6.05 Advance on Expenses.......................................................................................19
6.06 Nature of Indemnification.................................................................................19
6.07 Insurance.................................................................................................20
ARTICLE 7 -- STOCK CERTIFICATES AND TRANSFER REGULATIONS....................................................................20
7.01 Description of Certificates...............................................................................20
7.02 Delivery..................................................................................................21
7.03 Signatures................................................................................................21
7.04 Issuance of Certificates..................................................................................21
7.05 Payment for Shares........................................................................................21
(1) Consideration....................................................................................21
(2) Valuation........................................................................................22
(3) Effect...........................................................................................22
(4) Allocation of Consideration......................................................................22
7.06 Subscriptions.............................................................................................22
7.07 Closing of Transfer Books; Record Date....................................................................22
7.08 Registered Owners.........................................................................................23
7.09 Lost, Stolen or Destroyed Certificates....................................................................23
(1) Proof of Loss....................................................................................24
(2) Timely Request...................................................................................24
(3) Bond.............................................................................................24
(4) Other Requirements...............................................................................24
7.10 Registration of Transfers.................................................................................24
(1) Endorsement......................................................................................24
(2) Guaranty and Effectiveness of Signature..........................................................24
(3) Adverse Claims...................................................................................25
(4) Collection of Taxes..............................................................................25
(5) Additional Requirements Satisfied................................................................25
</TABLE>
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7.11 Restrictions on Transfer and Legends on Certificates......................................................25
(1) Shares in Classes or Series......................................................................25
(2) Restriction on Transfer..........................................................................25
(3) Pre-Emptive Rights...............................................................................25
(4) Unregistered Securities..........................................................................26
ARTICLE 8 -- GENERAL PROVISIONS.............................................................................................26
8.01 Dividends.................................................................................................26
(1) Declaration and Payment..........................................................................26
(2) Record Date......................................................................................26
8.02 Reserves..................................................................................................27
8.03 Books and Records.........................................................................................27
8.04 Annual Statement..........................................................................................27
8.05 Checks and Notes..........................................................................................27
8.06 Fiscal Year...............................................................................................27
8.07 Corporate Seal............................................................................................28
8.08 Resignations..............................................................................................28
8.09 Amendment of By-Laws......................................................................................28
8.10 Construction..............................................................................................28
8.11 Telephone Meetings........................................................................................28
8.12 Table of Contents; Captions...............................................................................29
</TABLE>
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BY-LAWS
OF
VERTEX COMMUNICATIONS CORPORATION
(a Texas Corporation)
ARTICLE 1
NAME AND OFFICES
1.01 Name. The name of the Corporation is VERTEX COMMUNICATIONS
CORPORATION, hereinafter referred to as the "Corporation".
1.02 Registered Office and Agent. The Corporation shall establish,
designate and continuously maintain a registered office and agent in the State
of Texas, subject to the following provisions:
(1) Registered Office. The Corporation shall establish and
continuously maintain in the State of Texas a registered office which
may be, but need not be, the same as its place of business.
(2) Registered Agent. The Corporation shall designate and
continuously maintain in the State of Texas a registered agent, which
agent may be either an individual resident of the State of Texas whose
business office is identical with such registered office, or a domestic
corporation or a foreign corporation authorized
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to transact business in the State of Texas, having a business office identical
with such registered office.
(3) Change of Registered Office or Agent. The Corporation may
change its registered office or change its registered agent, or both,
upon the filing in the Office of the Secretary of State of the State of
Texas of a statement setting forth the facts required by law, and
executed for the Corporation by its President or a Vice-President, and
verified by such officer.
1.03 Other Offices. The Corporation may also have offices at such other
places within and without .he State of Texas as the Board of Directors may, from
time to time, determine the business of the Corporation may require.
ARTICLE 2
SHAREHOLDERS
2.01 Place of Meetings. Each meeting of the shareholders of the
Corporation is to be held at the principal offices of the Corporation or at such
other place, either within or without the State of Texas, as may be specified in
the notice of the meeting or in a duly executed waiver of notice thereof.
2.02 Annual Meetings. The annual meeting of the shareholders for the
election of Directors and for the transaction
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of such other business as may properly come before the meeting shall be held
within one hundred twenty (120) days after the close of the fiscal year of the
Corporation on a day during such period to be selected by the Board of
Directors; provided, however, that the failure to hold the annual meeting within
the designated period of time or on the designated date shall not work a
forfeiture or dissolution of the Corporation.
2.03 Special Meetings. Special meetings of the shareholders, for any
purpose or purposes, may be called by the Chairman of the Board or the
President. Special meetings of the shareholders shall be called by the President
or Secretary at the request in writing of a majority of the Board of Directors,
or at the request in writing of shareholders owning ten per cent (10%) of the
capital stock of the Corporation issued and outstanding and entitled to vote.
Such request shall state the purpose or purposes of the proposed meeting and the
business to be transacted at any such special meeting of shareholders, and shall
be limited to the purposes stated in the notice therefor.
2.04 Notice. Written or printed notice of the meeting stating the
place, day and hour of the meeting, and in the case of a special meeting, the
purpose or purposes for which the meeting is called, shall be delivered not less
than ten
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(10) nor more than fifty (50) days before the date of the meeting, either
personally or by mail, by or at the direction of the Chairman of the Board or
the President, the Secretary or a majority of the members of the Board of
Directors calling the meeting, to each shareholder of record entitled to vote at
such meeting as determined in accordance with the provisions of Section 2.10
hereof. If mailed, such notice shall be deemed to be delivered when deposited in
the United States Mail, with postage thereon prepaid, addressed to the
shareholder entitled thereto at his address as it appears on the stock transfer
books of the Corporation.
2.05 Voting List. The officer or agent having charge and custody of the
stock transfer books of the Corporation, shall prepare, at least ten (10) days
before each meeting of shareholders, a complete list of the shareholders
entitled to vote at such meeting, arranged in alphabetical order and containing
the address and number of voting shares held by each, which list shall be kept
on file at the registered office of the Corporation for a period of not less
than ten (10) days prior to such meeting and shall be subject to inspection by
any shareholder at any time during usual business hours. Such list shall also be
produced and kept open at the time and place of the meeting and shall be subject
to the inspection of any shareholder during the entire time of the
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meeting. The original share ledger or transfer book, or a duplicate thereof,
shall be prima facie evidence as to identity of the shareholders entitled to
examine such list or share ledger or transfer book and to vote at any such
meeting of the shareholders.
2.06 Quorum. The holders of a majority of the shares of the capital
stock issued and outstanding and entitled to vote thereat, represented in person
or by proxy, shall be requisite and shall constitute a quorum at all meetings of
the shareholders for the transaction of business except as otherwise provided by
statute or by the Articles of Incorporation or by these By-Laws. If, however,
such quorum shall not be present or represented at any such meeting of the
shareholders, the shareholders entitled to vote thereat, present in person, or
represented by proxy, shall have the power to adjourn the meeting, from time to
time, without notice other than announcement at the meeting, until a quorum
shall be present or represented. At such adjourned meeting at which a quorum
shall be present or represented, any business may be transacted which might have
been transacted at the meeting as originally notified.
2.07 Requisite Vote. If a quorum is present at any meeting, the vote of
the holders of a majority of the shares of capital stock having voting power,
present in person or
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represented by proxy, shall determine any question brought before such meeting,
unless the question is one upon which, by express provision of the statutes or
of the Articles of Incorporation or of these By-Laws, a different vote shall be
required, in which case such express provision shall govern and control the
determination of such question.
2.08 Withdrawal of Quorum. If a quorum is present at the time of
commencement of any meeting, the shareholders present at such duly convened
meeting may continue to transact any business which may properly come before
said meeting until adjournment thereof, notwithstanding the withdrawal from such
meeting of sufficient holders of the shares of capital stock entitled to vote
thereat to leave less than a quorum remaining.
2.09 Voting at Meeting. Voting at meetings of shareholders shall be
conducted and exercised subject to the following procedures and regulations:
(1) Voting Power. In the exercise of voting power with respect
to each matter properly submitted to a vote at any meeting of
shareholders, each shareholder of the capital stock of the Corporation
having voting power shall be entitled to one (1) vote for each such
share held in his name on the books of the Corporation, except to the
extent otherwise specified by the Articles of Incorporation.
(2) Exercise of Voting Power; Proxies. At any meeting of the
shareholders, every holder of the shares of capital stock of the
Corporation entitled to vote at such meeting may vote either in person,
or by proxy duly
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appointed by instrument in writing subscribed by such shareholder or by his duly
authorized attorney-in-fact; provided, however, no such appointment of proxy
shall be valid after the expiration of eleven (11) months from the date of
execution of such written instrument of appointment, unless otherwise stated
therein. A proxy shall be revocable unless expressly designated therein as
irrevocable or unless otherwise made irrevocable by law. Each proxy shall be
filed with the Secretary of the Corporation prior to or at the time of the
meeting. Voting for directors shall be in accordance with the provisions of
paragraph (3) below of this Section 2.09. Any vote may be taken by voice vote or
by show of hands unless someone entitled to vote at the meeting objects, in
which case written ballots shall be used.
(3) Election of Directors. In all elections of Directors
cumulative voting shall be permissible, unless expressly denied by the
Articles of Incorporation. If cumulative voting is so permissible, each
shareholder of the capital stock of the Corporation entitled to vote at
any such election shall have the right to cast, in person or by proxy,
as many votes as shall equal the number of votes (except for these
provisions as to cumulative voting) such shareholder would be entitled
to cast for the election of Directors with respect to his shares
multiplied by the number of Directors to be elected, and such
shareholder may cast all such votes for a single Director, or may
distribute such votes among the number of Directors to be voted for, or
any two (2) or more of them, as such shareholder may deem appropriate.
2.10 Record Date; Closing Transfer Books. As more specifically provided
in Article 7, Section 7.07 hereof, the Board of Directors may fix in advance a
record date for the purpose of determining shareholders entitled to notice of or
to vote at a meeting of shareholders, such record date to be not less than ten
(10) nor more than fifty (50) days prior to such meeting, or the Board of
Directors may close the stock transfer books for such purpose for a period of
not less than
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ten (10) nor more than fifty (50) days prior to such meeting. In the absence of
any action by the Board of Directors, the date upon which the notice of the
meeting is mailed shall be deemed the record date.
2.11 Action Without Meetings. Any action permitted or required to be
taken at a meeting of the shareholders of the Corporation may be taken without a
meeting if a consent in writing, setting forth the action so taken, shall be
signed by all of the shareholders of the capital stock of the Corporation
entitled to vote with respect to the subject matter thereof, and such written
consent shall have the same force and effect as a unanimous vote of the
shareholders thereon. Any such executed written consent, or an executed
counterpart thereof, shall be placed in the minute book of the Corporation.
2.12 Preemptive Rights. Unless otherwise determined by the Board of
Directors in the manner provided under the Texas Business Corporation Act, as
amended, no holder of shares of capital stock of the Corporation shall, as such
holder, have any right to purchase or subscribe for any capital stock of any
class which the Corporation may issue or sell, whether or not exchangeable for
any capital stock of the Corporation of any class or classes, whether issued out
of unissued shares authorized by the Articles of Incorporation, as amended, or
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out of shares of capital stock of the Corporation acquired by after the issue
thereof; nor, unless otherwise determined by the Board of Directors in the
manner provided under the Texas Business Corporation Act, as amended, shall any
holder of shares of capital stock of the Corporation, as such holder, have any
right to purchase, acquire or subscribe for any securities which the Corporation
may issue or sell whether or not convertible into or exchangeable for shares of
capital stock of the Corporation of any class or classes, and whether or not any
such securities have attached or appurtenant thereto warrants, options or other
instruments which entitle the holders thereof to purchase, acquire or subscribe
for shares of capital stock of any class or classes.
ARTICLE 3
DIRECTORS
3.01 Management Powers. The business affairs of the Corporation shall
be managed by its Board of Directors which may exercise all such powers of the
Corporation and do all such lawful acts and things as are not by statute or by
the Articles of Incorporation or by these By-Laws directed or required to be
exercised or done by the shareholders.
3.02 Number and Qualification. The Board of Directors shall consist of
not less than one (1) member nor more than
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five (5) members; provided, however, the initial Board of Directors shall
consist of one (1) member. Directors need not be residents of the State of Texas
nor shareholders of the Corporation. Each Director shall qualify as a Director
following election as such by agreeing to act or acting in such capacity. The
number of Directors may be increased or decreased from time to time by
resolution of the Board of Directors or shareholders without the necessity of a
written amendment to the By-Laws of the Corporation; provided, however, no
decrease shall have the effect of shortening the term of any incumbent Director.
3.03 Election and Term. Members of the Board of Directors shall hold
office until the annual meeting of shareholders and until their successors shall
have been elected and qualified at the annual meeting of the shareholders, the
shareholders shall elect Directors to hold office until the next succeeding
annual meeting. Each Director shall hold office for the term for which he is
elected, and until his successor shall be elected and qualified.
3.04 Voting on Directors. Directors shall be elected by plurality vote.
Cumulative voting in the election of Directors is expressly prohibited.
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3.05 Vacancies. Any vacancy occurring in the Board of Directors may be
filled by the affirmative vote of a majority of the remaining Directors then in
office, though less than a quorum of the Board of Directors. For purposes of
these By-Laws, a "vacancy" shall be defined as an unfilled directorship arising
by virtue of the death, resignation or removal of a Director theretofore duly
elected to serve in such capacity in accordance with the relevant provisions of
these By-Laws. A Director elected to fill a vacancy shall be elected for the
unexpired portion of the term of his predecessor in office.
3.06 New Directorships. Any directorship to be filled by reason of an
increase in the number of Directors actually serving as such shall be filled by
election at an annual meeting of the shareholders or at a special meeting of
shareholders called for that purpose, or by the Board of Directors for a term of
office continuing only until the next election of one or more Directors by the
shareholders, provided that the Board of Directors may not fill more than two
(2) such directorships during the period between any two (2) successive annual
meetings of shareholders.
3.07 Removal. Any Director may be removed either for or without cause
at any duly convened special or annual meeting of shareholders, by the
affirmative vote of a majority in
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number of shares of the shareholders present in person or by proxy at any
meeting and entitled to vote for the election of such Director, provided notice
of intention to act upon such matter shall have been given in the notice calling
such meeting.
3.08 Meetings. The meetings of the Board of Directors shall be held and
conducted subject to the following regulations:
(1) Place. Meetings of the Board of Directors of the
Corporation, annual, regular or special, are to be held at the
principal office or place of business of the Corporation, or such other
place, either within or without the State of Texas, as may be specified
in the respective notices, or waivers of notice, thereof.
(2) Annual Meeting. The Board of Directors shall meet each
year immediately after the annual meeting of the shareholders, at the
place where such meeting of the shareholders has been held (either
within or without the State of Texas), for the purpose of
organizations, election of officers, and consideration of any other
business that may properly be brought before the meeting. No notice of
any kind to either old or new members of the Board of Directors for
such annual meeting shall be required.
(3) Regular Meetings. Regular meetings of the Board of
Directors may be held without notice at such time and at such place or
places as shall from time to time be determined and designated by the
Board.
(4) Special Meetings. Special meetings of the Board of
Directors may be called by the Chairman of the Board or the President
of the Corporation on notice of two (2) days to each Director either
personally or by mail or by telegram; special meetings shall be called
by the Chairman of the Board or the President or Secretary in like
manner and on like notice on the written request of two (2) Directors.
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(5) Notice and Waiver of Notice. Attendance of a Director at
any meeting shall constitute a waiver of notice of such meeting, except
where a Director attends for the express purpose of objecting to the
transaction of any business because the meeting is not lawfully called
or convened. Neither the business to be transacted at, nor the purpose
of, any regular meeting of the Board of Directors need be specified in
the notice or waiver of notice of such meeting.
(6) Quorum. At all meetings of the Board of Directors, a
majority of the number of Directors fixed by these By-Laws shall
constitute a quorum for the transaction of business, until a greater
number is required by law or by the Articles of Incorporation. 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.
(7) Requisite Vote. The act of a majority of the Directors
present at any meeting at which a quorum is present shall be the act of
the Board of Directors unless the act of a greater number is required
by statute or by the Articles of Incorporation or by these By-Laws.
3.09 Action Without Meetings. Unless otherwise restricted by the
Articles of Incorporation or these ByLaws, any action required or permitted by
law to be taken at any meetings of the Board of Directors, or any committee
thereof, may be taken without a meeting, if prior to such action a written
consent thereto is signed by all members of the Board or of such committee, as
the case may be, and such written consent is filed in the minutes or proceedings
of the Board of Directors or committee.
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3.10 Committees. Committees designated and appointed by the Board of
Directors shall function subject to and in accordance with the following
regulations and procedures:
(1) Designation and Appointment. The Board of Directors may,
by resolution adopted by a majority of the entire Board, designate and
appoint one or more committees under such name or names and for such
purpose or function as may be deemed appropriate.
(2) Members; Terms. Each Committee thus designated and
appointed shall consist of two or more of the Directors of the
Corporation, one of whom, in the case of the Executive Committee, shall
be the President. The members of any such committee shall serve at the
pleasure of and subject to the discretion of the Board of Directors.
(3) Authority. Each Committee, to the extent provided in the
resolution of the Board creating same, shall have and may exercise such
of the powers and authority of the Board of Directors in the management
of the business and affairs of the Corporation as the Board of
Directors may direct and delegate, except, however, those matters which
are required by statute to be reserved unto or acted upon by the entire
Board of Directors.
(4) Records. Each such Committee shall keep and maintain
regular records or minutes of its meetings and report the same to the
Board of Directors when required.
(5) Change in Number. The number of members of any Committee
appointed by the Board of Directors, as herein provided, may be
increased or decreased (but not below two) from time to time by
appropriate resolution adopted by a majority of the entire Board of
Directors.
(6) Vacancies. Vacancies in the membership of any committee
designated and appointed hereunder shall be filled by the Board of
Directors, at a regular or special meeting of the Board of Directors,
in a manner consistent with the provisions of this Section 3.10.
(7) Removal. Any member of any committee appointed hereunder
may be removed by the Board of
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Directors by the affirmative vote of a majority of the entire Board, whenever in
its judgment the best interests of the Corporation will be served thereby.
(8) Meetings. The time, place and notice (if any) of committee
meetings shall be determined by the members of such committee.
(9) Quorum; Requisite Vote. At meetings of any committee
appointed hereunder, a majority of the number of members designated by
the Board of Directors shall constitute a quorum for the transaction of
business. The act of a majority of the members of the committee present
at any meeting at which a quorum is present shall be the act of such
committee, except as otherwise specifically provided by statute or by
the Articles of Incorporation or by these By-Laws. If a quorum is not
present at a meeting of such committee, the members of such committee
present may adjourn the meeting from time to time, without notice other
than an announcement at the meeting, until a quorum is present.
(10) Compensation. Appropriate compensation for members of any
committee appointed pursuant to the authority hereof may be authorized
by the action of a majority of the entire Board of Directors pursuant
to the provisions of Section 3.11 hereof.
(11) Action Without Meetings. Any action required or permitted
to be taken at a meeting of any committee may be taken without a
meeting if a consent in writing, setting forth the action so taken, is
signed by all members of such committee. Such consent shall have the
same force and effect as a unanimous vote at a meeting. The signed
consent, or a signed copy, shall become a part of the record of such
committee.
(12) Responsibility. Notwithstanding any provision to the
contrary herein, the designation and appointment of a committee and the
delegation of authority to it shall not operate to relieve the Board of
Directors, or any member thereof, of any responsibility imposed upon it
or him by law.
3.11 Compensation. By appropriate resolution of the Board of Directors,
the Directors may be reimbursed their
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expenses, if any, of attendance at each meeting of the Board of Directors and
may be paid a fixed sum (as determined from time to time by the vote of a
majority of the Directors then in office) for attendance at each meeting of the
Board of Directors or a stated salary as Director. No such payment shall
preclude any Director from serving the Corporation in another capacity and
receiving compensation therefor. Members of special or standing committees may,
by appropriate resolution of the Board of Directors, be allowed similar
reimbursement of expenses and compensation for attending committee meetings.
3.12 Maintenance of Records. The Directors may keep the books and
records of the Corporation, except such as are required by law to be kept within
the State, outside the State of Texas or at such place or places as they may,
from time to time, determine.
3.13 Interested Directors and Officers. Any contract or other
transaction between the Corporation and one or more of its Directors or
officers, or between the Corporation and any firm of which one or more of its
Directors or officers are members or employees, or in which they are interested,
or between the Corporation and any corporation or association of which one or
more of its Directors or officers are shareholders, members, directors,
officers, or employees, or in which
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they are interested, shall be valid for all purposes, notwithstanding the
presence of such Director or Directors or officer or officers at the meeting of
the Board of Directors of the Corporation, which acts upon, or in reference to,
such contract, or transaction, and notwithstanding his or their participation in
such act, if the fact of such interest shall be disclosed or known to the Board
of Directors and the Board of Directors shall, nevertheless, authorize, approve
and ratify such contract or transaction by a vote of a majority of the Directors
present, such interested Director or Directors to be counted in determining
whether a quorum is present, but not to be counted in calculating the majority
of such quorum necessary to carry such vote. The provisions of this Section
shall not be construed to invalidate any contract or other transaction which
would otherwise be valid under the common and statutory law applicable thereto.
ARTICLE 4
NOTICES
4.01 Method of Notice. Whenever under the provisions of the Texas
Business Corporation Act or of the Articles of Incorporation or of these
By-Laws, notice is required to be given to any Director or shareholder, it shall
not be construed to mean personal notice, but such notice may be given in
writing, by mail, addressed to such Director or
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shareholder, at his address as it appears on the records of the Corporation,
with postage thereon prepaid, and such notice shall be deemed to be given at the
time when the same shall be deposited in the United States Mail. Notice to
Directors or shareholders may also be given by telegram.
4.02 Waiver. Whenever any notice whatever is required to be given under
the provisions of the Texas Business Corporation Act or under the provisions of
the Articles of Incorporation or these By-Laws, a waiver thereof in writing
signed by the person or persons entitled to such notice, whether before or after
the time stated therein, shall be deemed equivalent to the giving of such
notice. Attendance by such person or persons, whether in person or by proxy, at
any meeting requiring notice shall constitute a waiver of notice of such
meeting, except as provided in Section 3.08(5) hereof.
ARTICLE 5
OFFICERS AND AGENTS
5.01 Designation. The officers of the Corporation shall be chosen by
the Board of Directors and shall consist of the offices of:
(1) President, Vice-President, Secretary and Treasurer; and
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(2) Such other offices and officers (including a Chairman of
the Board and additional Vice-Presidents) and assistant officers and
agents as the Board of Directors shall deem necessary.
5.02 Election of Officers. Each officer designated in Section 5.01(1)
hereof shall be elected by the Board of Directors on the expiration of the term
of office of such officer, as herein provided, or whenever a vacancy exists in
such office. Each officer or agent designated in Section 5.01(2) above may be
elected by the Board at any meeting.
5.03 Qualifications. No officer or agent need be a shareholder of the
Corporation or a resident of Texas. No officer or agent is required to be a
Director, except the Chairman of the Board. Any two or more offices may be held
by the same person, except that the office of the President and the office of
the Secretary shall not be held by the same person.
5.04 Term of Office. Unless otherwise specified by the Board of
Directors at the time of election or appointment, or by the express provisions
of an employment contract approved by the Board, the term of office of each
officer and each agent shall expire on the date of the first meeting of
Directors next following the annual meeting of shareholders each year. Each such
officer or agent shall serve until the
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expiration of the term of his office or, if earlier, his death, resignation or
removal.
5.05 Authority. Officers and agents shall have such authority and
perform such duties in the management of the Corporation as are provided in
these By-Laws or as may be determined by resolution of the Board of Directors
not inconsistent with these By-Laws.
5.06 Removal. Any officer or agent elected or appointed by the Board of
Directors may be removed by the Board of Directors whenever in its judgment the
best interests of the Corporation will be served thereby. Such removal shall be
without prejudice to the contract rights, if any, of the person so removed.
Election or appointment of an officer or agent shall not of itself create
contract rights.
5.07 Vacancies. Any vacancy occurring in any office of the Corporation
(by death, resignation, removal or otherwise) shall be filled by the Board of
Directors.
5.08 Compensation. The compensation of all officers and agents of the
Corporation shall be fixed from time to time by the Board of Directors.
5.09 Chairman of the Board. If a Chairman of the Board is elected, he
shall be chosen from among the Directors and shall be the chief executive and
principal officer of the
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Corporation. He shall have the power to call special meetings of the
shareholders and of the Directors for any purpose or purposes, and he shall
preside at all meetings of the shareholders and of the Board of Directors,
unless he shall be absent or unless he shall, at his election, designate the
President to preside in his stead. The Chairman of the Board shall be
responsible for the operations and business affairs of the Corporation and shall
possess all of the powers granted by the By-Laws to the President, including the
power to make and sign contracts and agreements in the name and on behalf of the
Corporation. He shall, in general, have supervisory power over the President and
all other officers and the business activities of the Corporation, subject to
the discretion of the Board of Directors.
5.10 President. Subject to the supervision of the Chairman of the
Board, or in the absence of the election of a Chairman of the Board, the
President shall be the chief executive officer of the Corporation; shall preside
at all meetings of the shareholders and the Board of Directors; shall have
general and active management of the business of general and active management
of the business of the Corporation and shall see that all orders and resolutions
of the Board of Directors are carried into effect. The President shall execute
bonds, mortgages and other contracts requiring
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seal, under the seal of the Corporation, except where required or permitted by
law to be otherwise executed and except where the execution thereof shall be
expressly delegated by the Board of Directors to some other officer or agent of
the Corporation. The President shall perform such other duties and possess such
other authority and powers as the Board of Directors may from time to time
prescribe.
5.11 Vice-Presidents. The Vice-President, or if there shall be more
than one, the Vice-Presidents in the order determined by a majority vote of the
Board of Directors, shall, in the prolonged absence or disability of the
President (and Chairman of the Board, if one is elected), perform the duties and
exercise the powers of the President and shall perform such other duties and
have such other powers as the Board of Directors may from time to time prescribe
or the chief executive officer may from time to time delegate.
5.12 Secretary. The Secretary shall attend all meetings of the Board of
Directors and all meetings of the shareholders of the Corporation and record all
proceedings of the meetings of the Corporation and of the Board of Directors in
a book to be maintained for that purpose and shall perform like duties for the
standing committees when required. The Secretary shall give, or cause to be
given, notice of all meetings of the shareholders and special meetings of the
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Board of Directors, and shall perform such other duties as may be prescribed by
the Board of Directors, the Chairman of the Board, or President. He shall have
custody of the corporate seal of the Corporation, and he, or an Assistant
Secretary, shall have authority to affix the same to any instrument requiring it
and when so affixed, it may be attested by his signature or by the signature of
such Assistant Secretary. The Board of Directors may give general authority to
any other officer to affix the seal of the Corporation and to attest the
affixing by his signature.
5.13 Assistant Secretaries. The Assistant Secretary, or if there be
more than one, the Assistant Secretaries in the order determined by the Board of
Directors, shall in the absence or disability of the Secretary, perform the
duties and exercise the powers of the Secretary and shall perform such other
duties and have such other powers as the Board of Directors may from time to
time prescribe or the chief executive officer may from time to time delegate.
5.14 Treasurer. The Treasurer shall have the custody of the corporate
funds and securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the Corporation and shall deposit all moneys
and other valuable effects in the name and to the credit of the Corporation in
such depositories as may be designated by the
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Board of Directors. The Treasurer shall disburse the funds of the Corporation as
may be ordered by the Board of Directors, taking proper vouchers for such
disbursements, and shall render to the President (and Chairman of the Board, if
one is elected) and the Board of Directors, at its regular meetings, or when the
Board of Directors so requires, an account of all his transactions as Treasurer
and of the financial condition of the Corporation If required by the Board of
Directors, he shall give the Corporation a bond in such sum and with such surety
or sureties as shall be satisfactory to the Board of Directors for the faithful
performance of the duties of his office and for the restoration to the
Corporation, in case of his death, resignation, retirement or removal from
office, all books, papers, vouchers, money, and other property of whatever kind
in his possession or under his control owned by the Corporation. The Treasurer
shall perform such other duties and have such other authority and powers as the
Board of Directors may from time to time prescribe or as the chief executive
officer may from time to time delegate.
5.15 Assistant Treasurers. The Assistant Treasurer, or, if there shall
be more than one, the Assistant Treasurers in the order determined by the Board
of Directors, shall, in the absence or disability of the Treasurer, perform the
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duties and exercise the powers of the Treasurer and shall perform such other
duties and have such other powers as the Board of Directors may from time to
time prescribe or as the chief executive officer may from time to time delegate.
ARTICLE 6
INDEMNIFICATION
6.01 Third Party Actions. Pursuant to, but cumulative of, the
provisions of the Texas Business Corporation Act, as amended, and the Articles
of Incorporation, the Board of Directors shall have the power and authority to
indemnify and hold harmless each Director or officer of the Corporation, or of
any other corporation for which such Director or officer has been requested to
serve by the Corporation, who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, claim, suit or proceeding,
whether civil, criminal, administrative, or investigative (other than an action
by or in the right of the Corporation) by reason of the fact that such
individual 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 of another
corporation, against judgments, penalties (including excise and similar taxes),
fines, amounts paid in settlement and reasonable expenses (including court costs
and attorneys' fees) actually incurred by such person in connection with
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such action, suit or proceeding, if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
such action, suit or proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
6.02 Derivative Actions. The Corporation shall have the power and
authority to indemnify and hold harmless any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the Corporation to procure a judgment in its favor by
reason of the fact that such person 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 of another corporation, against reasonable expenses
(including court costs and attorneys' fees) actually incurred by such person in
connection with the defense or settlement of such action or suit if such person
acted in good faith and
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manner he reasonably believed to be in or not opposed to the best interests of
the Corporation.
6.03 Authorization of Indemnity. Any indemnification under the
foregoing Sections 6.01 and 6.02 (unless ordered by the court) shall be made by
the Corporation only as authorized in the specific case upon a determination
that indemnification of such Director or officer is proper in the circumstances
by virtue of the fact that it shall have been determined that such person has
met the applicable standard of conduct set forth in either or such Sections, as
the case may be. Such determination shall be made (1) by a majority vote of a
quorum consisting of Directors who at the time of the vote are not named
defendants or respondents in the proceeding; (2) if such a quorum cannot be
obtained, by a majority vote of a committee of the Board of Directors,
designated to act in the matter by a majority vote of all Directors, consisting
solely of two (2) or more Directors who at the time of the vote are not named
defendants and respondents in the proceeding; (3) by special legal counsel (in a
written opinion) selected by the Board of Directors or a committee of the Board
by a vote as set forth in Subsection (1) or (2) of this Section, or, if such a
quorum cannot be obtained and such committee cannot be established, by a
majority vote of all Directors; or (4) by the shareholders of the Corporation in
a
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vote that excludes the shares held by Directors who are named defendants or
respondents in the proceeding.
6.04 Indemnification as to Expenses. To the extent that a Director or
officer of the Corporation has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to in the foregoing Sections
6.01 and 6.02, or in defense of any claim, issue or matter therein, such person
shall be indemnified and held harmless against expenses (including attorney's
fees) actually and reasonably incurred by him in connection therewith.
6.05 Advance on Expenses. Expenses incurred in defending a civil or
criminal action, suit or proceeding may be paid by the Corporation in advance of
the final disposition of such action, suit or proceeding as authorized by the
Board of Directors in the specific case after (1) the Corporation receives a
written affirmation by such Director or officer of his good faith belief that he
has met the standard of conduct necessary for indemnification under Sections
6.01 or 6.02 hereof, as applicable, and a written undertaking by or on behalf of
such Director or officer to repay the amount paid or reimbursed if it is
ultimately determined that he has not met those requirements; and (2) a
determination that the facts then known to those making the determination would
not preclude indemnification under the provisions of the Texas Business
Corporation Act and these By-Laws.
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6.06 Nature of Indemnification. The indemnification provided hereunder
shall not be deemed exclusive of any other rights to which those seeking
indemnification may be entitled under the Articles of Incorporation, By-Laws,
any agreement, vote of shareholders or disinterested Directors or otherwise,
both as to action in his official capacity and as to action in any other
capacity while holding such office, and shall continue as to a person who has
ceased to be a Director or officer and shall inure to the benefit of the heirs,
executors and administrators of such person.
6.07 Insurance. The Corporation shall have the power and authority to
purchase and maintain insurance on behalf of any person who is or was a
Director, officer employee or agent of the Corporation, or who is or was serving
at the request of the Corporation as a Director, officer, partner, venturer,
proprietor, trustee, employee, agent, or similar functionary of another foreign
or domestic corporation, partnership, joint venture, sole proprietorship, trust,
or other enterprise, or employee benefit plan against any liability, claim,
damage, loss or risk asserted against such person and incurred by such person in
any such capacity, or arising out of the status of such person as such,
irrespective of whether the Corporation would have the power to indemnify and
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hold such person harmless against such liability under the provisions hereof.
ARTICLE 7
STOCK CERTIFICATES AND
TRANSFER REGULATIONS
7.01 Description of Certificates. The shares of the capital stock of
the Corporation shall be represented by certificates in the form approved by the
Board of Directors and signed in the name of the Corporation by the President or
a Vice-President and the Secretary or an Assistant Secretary of the Corporation,
and sealed with the seal of the Corporation or a facsimile thereof. Each
certificate shall state on the face thereof the name of the holder, the number
and class of shares, the par value of shares covered thereby or a statement that
such shares are without par value, and such other matters as are required by
law. At such time as the Corporation may be authorized to issue shares of more
than one class, every certificate shall set forth upon the face or back of such
certificate a statement of the designations, preferences, limitations and
relative rights of the shares of each class authorized to be issued, as required
by the laws of the State of Texas.
7.02 Delivery. Every holder of the capital stock in the Corporation
shall be entitled to have a certificate signed in the name of the Corporation by
the President or a
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Vice-President and the Secretary or an Assistant Secretary of the Corporation,
certifying the class of capital stock and the number of shares represented
thereby as owned or held by such shareholder in the Corporation.
7.03 Signatures. The signatures of the President, Vice-President,
Secretary or Assistant Secretary upon a certificate may be facsimiles if the
certificate is countersigned (l) by a transfer agent or an assistant transfer
agent, or (2) by a transfer clerk acting on behalf of the Corporation and a
registrar. In case any officer or officers who have signed, or whose facsimile
signature or signatures have been placed upon any such certificate or
certificates, shall cease to serve as such officer or officers of the
Corporation, whether because of death, resignation, removal or otherwise, before
such certificate or certificates are issued and delivered by the Corporation,
such certificate or certificates may nevertheless be adopted by the Corporation
and be issued and delivered with the same effect as though the person or persons
who signed such certificate or certificates or whose facsimile signature or
signatures have been used thereon had not ceased to serve as such officer or
officers of the Corporation.
7.04 Issuance of Certificates. Certificates evidencing shares of its
capital stock (both treasury and authorized but unissued) may be issued for such
consideration (not less than
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par value) and to such persons as the Board of Directors may determine from time
to time. Shares shall not be issued until the full amount of the consideration,
fixed as provided by law, has been paid.
7.05 Payment for Shares. Consideration for the issuance of shares shall
be paid, valued and allocated as follows:
(1) Consideration. The consideration for the issuance of
shares shall consist of money paid, labor done (including services
actually performed for the Corporation), or property (tangible or
intangible) actually received. Neither promissory notes nor the promise
of future services shall constitute payment of consideration for
shares.
(2) Valuation. In the absence of fraud in the transaction, the
determination of the Board of Directors as to the value of
consideration received shall be conclusive.
(3) Effect. When consideration, fixed as provided by law, has
been paid, the shares shall be deemed to have been issued and shall be
considered fully paid and non-assessable.
(4) Allocation of Consideration. The consideration received
for shares shall be allocated by the Board of Directors, in accordance
with law, between the stated capital and capital surplus accounts.
7.06 Subscriptions. Unless otherwise provided in the subscription
agreement, subscriptions of shares, whether made before or after organization of
the Corporation, shall be paid in full in such installments and at such times as
shall be determined by the Board of Directors. Any call made by the Board of
Directors for payment on subscriptions shall be
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uniform as to all shares of the same class and series. In case of default in the
payment of any installment or call when payment is due, the Corporation may
proceed to collect the amount due in the same manner as any debt due to the
Corporation.
7.07 Closing of Transfer Books; Record Date. For the purpose of
determining shareholders entitled to notice of or to vote at any meeting of
shareholders, or any adjournment thereof, or entitled to receive payment of any
dividend, or in order to make a determination of shareholders for any other
proper purpose, the Board of Directors may provide that stock transfer books
shall be closed for a stated period of time not to exceed, in any case, fifty
(50) days. If the stock transfer books shall be closed for the purpose of
determining shareholders, such books shall be closed for at least ten (10) days
immediately preceding such meeting. In lieu of closing the stock transfer books,
as aforesaid, the Board of Directors may fix in advance a date as the record
date for any such determination of shareholders, such date in any case to be not
more than fifty (50) days, and in case of a meeting of shareholders, not less
than ten (10) days prior to the date on which the particular action requiring
such determination of shareholders is to be taken. If the stock transfer books
are not closed and the record date is fixed for the determination of
shareholders entitled to notice of
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or to vote at a meeting of shareholders, or shareholders entitled to receive
payment of a dividend, the date on which notice of the meeting is mailed or the
date on which the resolution of the Board of Directors declaring such dividend
is adopted, as the case may be, shall be the record date for such determination
of shareholders. When a determination of shareholders entitled to vote at any
meeting of shareholders has been made as provided in this Section, such
determination shall be applied to any adjournment thereof except where the
determination has been made through the closing of the stock transfer books and
the stated period of closing has expired.
7.08 Registered Owners. Prior to due presentment for registration of
transfer of a certificate evidencing shares of the capital stock of the
Corporation in the manner set forth in Section 7.10 hereof, the Corporation
shall be entitled to recognize the person registered as the owner of such shares
on its books (or the books of its duly appointed transfer agent, as the case may
be) as the person exclusively entitled to vote, to receive notices and dividends
with respect to, and otherwise exercise all rights and powers relative to such
shares; and the Corporation shall not be bound or otherwise obligated to
recognize any claim, direct or indirect, legal or equitable, to such shares by
any other person, whether or not it shall have actual, express or other
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notice thereof, except as otherwise provided by the laws of Texas.
7.09 Lost, Stolen or Destroyed Certificates. The Corporation shall
issue a new certificate in place of any certificate for shares previously issued
if the registered owner of the certificate satisfies the following conditions:
(1) Proof of Loss. Submits proof in affidavit form
satisfactory to the Corporation that such certificate has been lost,
destroyed or wrongfully taken; and
(2) Timely Request. Requests the issuance of a new certificate
before the Corporation has notice that the certificate has been
acquired by a purchaser for value in good faith and without notice of
an adverse claim; and
(3) Bond. Gives a bond in such form, and with such surety or
sureties, with fixed or open penalty, as the Corporation may direct, to
indemnify the Corporation (and its transfer agent and registrar, if
any) against any claim that may be made or otherwise asserted by virtue
of the alleged loss, destruction, or theft of such certificate or
certificates; and
(4) Other Requirements. Satisfies any other reasonable
requirements imposed by the Corporation.
In the event a certificate has been lost, apparently destroyed or wrongfully
taken, and the registered owner of record fails to notify the Corporation within
a reasonable time after he has notice of such loss, destruction, or wrongful
taking, and the Corporation registers a transfer (in the manner hereinbelow set
forth) of the shares represented by the certificate before receiving such
notification, such prior registered owner of record shall be precluded from
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<PAGE> 41
making any claim against the Corporation for the transfer required hereunder or
for a new certificate.
7.10 Registration of Transfers. Subject to the provisions hereof, the
Corporation shall register the transfer of a certificate evidencing shares of
its capital stock presented to it for transfer if:
(1) Endorsement. Upon surrender of the certificate to the
Corporation (or its transfer agent, as the case may be) for transfer,
the certificate (or an appended stock power) is properly endorsed by
the registered owner, or by his duly authorized legal representative or
attorney-in-fact, with proper written evidence of the authority and
appointment of such representative, if any, accompanying the
certificate; and
(2) Guaranty and Effectiveness of Signature. The signature of
such registered owner or his legal representative or attorney-in-fact,
as the case may be, has been guaranteed by a national banking
association or member of the New York Stock Exchange, and reasonable
assurance in a form satisfactory to the Corporation is given that such
endorsements are genuine and effective; and
(3) Adverse Claims. The Corporation has no notice of an
adverse claim or has otherwise discharged any duty to inquire into such
a claim; and
(4) Collection of Taxes. Any applicable law (local, state or
federal) relating to the collection of taxes relative to the
transaction has been complied with; and
(5) Additional Requirements Satisfied. Such additional
conditions and documentation as the Corporation (or its transfer agent,
as the case may be) shall reasonably require, including without
limitation there to, the delivery with the surrender of such stock
certificate or certificates proper evidence of succession, assignment
or other authority to obtain transfer thereof, as the circumstances may
require, and such legal opinions with reference to the requested
transfer as shall be required by the Corporation (or its transfer
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<PAGE> 42
agent) pursuant to the provisions of these By-Laws and applicable law,
shall have been satisfied.
7.11 Restrictions on Transfer and Legends on Certificates.
(1) Shares in Classes or Series. If the Corporation is
authorized to issue shares of more than one class, the certificate
shall set forth, either on the face or back of the certificate, a full
or summary statement of all of the designation, preferences,
limitations, and relative rights of the shares of such class and, if
the Corporation is authorized to issue any preferred or special class
in series, the variations in the relative rights and preferences of the
shares of each such series so far as the same have been fixed and
determined, and the authority of the Board of Directors to fix and
determine the relative rights and preferences of subsequent series. In
lieu of providing such a statement in full on the certificate, a
statement on the face or back of the certificate may provide that the
Corporation will furnish such information to any shareholder without
charge upon written request to the Corporation at its principal place
of business or registered office and that copies of the information are
on file in the office of the Secretary of State.
(2) Restriction on Transfer. Any restrictions imposed by the
Corporation on the sale or other disposition of its shares and on the
transfer thereof must be copied at length or in summary form on the
face, or so copied on the
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<PAGE> 43
back and referred to on the face, of each certificate representing shares to
which the restriction applies. The certificate may however state on the face or
back that such a restriction exists pursuant to a specified document and that
the Corporation will furnish a copy of the document to the holder of the
certificate without charge upon written request to the Corporation at its
principal place of business.
(3) Pre-Emptive Rights. Any preemptive rights of a shareholder
to acquire unissued or treasury shares of the Corporation which are
limited or denied by the Articles of Incorporation must be set forth at
length on the face or back of the certificate representing shares
subject thereto. In lieu of providing such a statement in full on the
certificate, a statement on the face or back of the certificate may
provide that the Corporation will furnish such information to any
shareholder without charge upon written request to the Corporation at
its principal place of business and that a copy of such information is
on file in the office of the Secretary of State.
(4) Unregistered Securities. Any security of the Corporation,
including, among others, any certificate evidencing shares of the
Common Stock or warrants to purchase Common Stock of the Corporation,
which is issued to any person without registration under the Securities
Act of 1933, as amended, or the Blue Sky laws of any state, shall not
be transferable until the Corporation has been furnished with a
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<PAGE> 44
legal opinion of counsel with reference thereto, satisfactory in form and
content to the Corporation and its counsel, to the effect that such sale,
transfer or pledge does not involve a violation of the Securities Act of 1933,
as amended, or the Blue Sky laws of any state having jurisdiction. The
certificate representing the security shall bear substantially the following
legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 OR UNDER THE BLUE
SKY LAWS OF ANY STATE AND MAY NOT BE OFFERED, SOLD OR
TRANSFERRED UNLESS SUCH OFFER, SALE OR TRANSFER WILL NOT BE IN
VIOLATION OF THE SECURITIES ACT OF 1933 OR ANY APPLICABLE BLUE
SKY LAWS. ANY OFFER; SALE OR TRANSFER OF THESE SECURITIES MAY
NOT BE MADE WITHOUT THE PRIOR WRITTEN APPROVAL OF THE
CORPORATION OR ITS COUNSEL."
ARTICLE 8
GENERAL PROVISIONS
8.01 Dividends. Subject to the provisions of the Texas Business
Corporation Act, as amended, and the Articles of Incorporation, dividends of the
Corporation shall be declared and paid pursuant to the following regulations:
(1) Declaration and Payment. Dividends on the issued and
outstanding shares of capital stock of the Corporation may be declared by the
Board of Directors at any regular or special meeting and may be paid in cash, in
property, property, or in shares of capital stock. Such declaration
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<PAGE> 45
and payment shall be at the discretion of the Board of Directors.
(2) Record Date. The Board of Directors may fix in advance a
record date for the purpose of determining shareholders entitled to receive
payment of any dividend, such record date to be not more than fifty (50) days
prior to the payment date of such dividend, or the Board of Directors may close
the stock transfer books for such purpose for a period of not more than fifty
(50) days prior to the payment date of such dividend. In the absence of action
by the Board of Directors, the date upon which the Board of Directors adopts the
resolution declaring such dividend shall be the record date.
8.02 Reserves. There may be created by resolution of the Board of
Directors out of the earned surplus of the Corporation such reserve or reserves
as the Directors from time to time, in their discretion, think proper to provide
for contingencies, or to equalize dividends, or to repair or maintain any
property of the Corporation, or for such other purposes as the Directors shall
think beneficial to the Corporation, and the Directors may modify or abolish any
such reserve in the manner in which it was created.
8.03 Books and Records. The Corporation shall maintain correct and
complete books and records of account and shall prepare and maintain minutes of
the proceedings of its
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<PAGE> 46
shareholders and Board of Directors, and shall keep at its registered office or
principal place of business, or at the office of its transfer agent or
registrar, a record of its shareholders, giving the names and addresses of all
shareholders and the number and class of the shares held by each.
8.04 Annual Statement. The Board of Directors shall present at or
before each annual meeting of shareholders a full and clear statement of the
business and financial condition of the Corporation, including a reasonably
detailed balance sheet and income statement under current date.
8.05 Checks and Notes. All checks or demands for money and notes of the
Corporation shall be signed by such officer or officers or such other person or
persons as the Board of Directors may from time to time designate.
8.06 Fiscal Year. The fiscal year of the Corporation shall be fixed by
resolution of the Board of Directors.
8.07 Corporate Seal. The Corporation seal shall be in such form as may
be determined by the Board of Directors. The seal may be used by causing it or a
facsimile thereof to be impressed or affixed or in any manner reproduced.
8.08 Resignations. Any director, officer or agent may resign his office
or position with the Corporation by delivering written notice thereof to the
President or the
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<PAGE> 47
Secretary. Such resignation shall be effective at the time specified therein, or
immediately upon delivery if no time is specified. Unless otherwise specified
therein, an acceptance of such resignation shall not be a necessary prerequisite
of its effectiveness.
8.09 Amendment of By-Laws. These By-Laws may be altered, amended, or
repealed and new By-Laws adopted at any meeting of the Board of Directors at
which a quorum is present, by the affirmative vote of a majority of the
Directors present at such meeting, provided notice of the proposed alteration,
amendment, or repeal be contained in the notice of such meeting.
8.10 Construction. Whenever the context so requires herein, the
masculine shall include the feminine and neuter, and the singular shall include
the plural, and conversely.
If any portion or provision of these By-Laws shall be held invalid or
inoperative, then, so far as is reasonable and possible: (1) the remainder of
these By-Laws shall be considered valid and operative, and (2) effect shall be
given to the intent manifested by the portion or provision held invalid or
inoperative.
8.11 Telephone Meetings. Shareholders, Directors, or members of any
committee may hold any meeting of such shareholders, Directors or committee by
means of conference
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<PAGE> 48
telephone or similar communications equipment which permits all persons
participating in the meeting to hear each other and actions taken at such
meetings shall have the same force and effect as a unanimous vote at a meeting
in person. The Secretary of the Corporation shall prepare a memorandum of the
action taken.
8.12 Table of Contents; Cautions. The table of contents and captions
used in these By-Laws have been inserted for administrative convenience only and
do not constitute matter to be construed in interpretation.
IN DUE CERTIFICATION WHEREOF, the undersigned, being the sole member of
the Board of Directors of VERTEX COMMUNICATIONS CORPORATION, confirms the
adoption and approval of the foregoing By-Laws, effective as of the 5th day of
October, 1984.
DIRECTORS:
/s/ J. Rex. Vardeman
----------------------------------------
J. REX VARDEMAN,
Sole Director
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<PAGE> 49
FIRST AMENDMENT
TO THE CORPORATE BYLAWS
OF
VERTEX COMMUNICATIONS CORPORATION
(a Texas corporation)
THE STATE OF TEXAS )
) KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF DALLAS )
THAT, the undersigned, being the duly elected and serving Secretary of
VERTEX COMMUNICATIONS CORPORATION, a Texas corporation (the "Company"), does
hereby certify and affirm that the following is an original counterpart of the
First Amendment to the Corporate Bylaws of the Company, unanimously adopted and
approved by the Board of Directors of the Company at the annual meeting of the
Board of Directors duly called and held on February 11, 1988, at which a quorum
of the Directors was present, whereby Article 6 of the Corporate Bylaws of the
Company was amended to read in its entirety as follows:
ARTICLE 6
INDEMNIFICATION
6.01 Indemnification. Each person who was or is made a party
or is threatened to be made a party, or who was or is a witness without
being named a party, to any threatened, pending or completed action,
claim, suit or proceeding, whether civil, criminal, administrative or
investigative, any appeal in such an action, suit or proceeding, and
any inquiry or investigation that could lead to such an action, suit or
proceeding (a "Proceeding"), by reason of the fact that such individual
is or was a Director, officer, employee or agent of the Corporation, or
is or
FIRST AMENDMENT TO THE CORPORATE BYLAWS - PAGE 1
<PAGE> 50
was serving at the request of the Corporation as a director, officer,
partner, venturer, proprietor, trustee, employee, agent or similar
functionary of another corporation, partnership, trust, employee
benefit plan or other enterprise, shall be indemnified and held
harmless by the Corporation from and against any judgments, penalties
(including excise taxes), fines, amounts paid in settlement and
reasonable expenses (including court costs and attorneys' fees)
actually incurred by such person in connection with such Proceeding if
it is determined that he acted in good faith and reasonably believed
(i) in the case of conduct in his official capacity on behalf of the
Corporation that his conduct was in the Corporation's best interests,
(ii) in all other cases, that his conduct was not opposed to the best
interests of the Corporation, and (iii) with respect to any Proceeding
which is a criminal action, that he had no reasonable cause to believe
his conduct was unlawful; provided, however, that in the event a
determination is made that such person is liable to the Corporation or
is found liable on the basis that personal benefit was improperly
received by such person, the indemnification is limited to reasonable
expenses actually incurred by such person in connection with the
Proceeding and shall not be made in respect of any Proceeding in which
such person shall have been found liable for willful or intentional
misconduct in the performance of his duty to the Corporation. The
termination of any Proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall
not, of itself be determinative of whether the person did not act in
good faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the Corporation, and, with respect to
any Proceeding which is a criminal action, had reasonable cause to
believe that his conduct was unlawful. A person shall be deemed to have
been found liable in respect of any claim, issue or matter only after
the person shall have been so adjudged by a court of competent
jurisdiction after exhaustion of all appeals therefrom.
FIRST AMENDMENT TO THE CORPORATE BYLAWS - PAGE 2
<PAGE> 51
6.02 Determination of Indemnification. Any indemnification
under the foregoing Section 6.01 (unless ordered by a court of
competent jurisdiction) shall be made by the Corporation only upon a
determination that indemnification of such person is proper in the
circumstances by virtue of the fact that it shall have been determined
that such person has met the applicable standard of conduct. Such
determination shall be made (1) by a majority vote of a quorum
consisting of Directors who at the time of the vote are not named
defendants or respondents in the Proceeding; (2) if such quorum cannot
be obtained, by a majority vote of a committee of the Board of
Directors, designated to act in the matter by a majority of all
Directors, consisting solely of two or more Directors who at the time
of the vote are not named defendants or respondents in the Proceeding;
(3) by special legal counsel (in a written opinion) selected by the
Board of Directors or a committee of the Board by a vote as set forth
in Subsection (1) or (2) of this Section, or, if such quorum cannot be
obtained and such committee cannot be established, by a majority vote
of all Directors (in which Directors who are named defendants or
respondents in the Proceeding may participate); or (4) by the
shareholders of the Corporation in a vote that excludes the shares held
by Directors who are named defendants or respondents in the Proceeding.
6.03 Advance of Expenses. Reasonable expenses, including court
costs and attorneys' fees, incurred by a person who was or is a witness
or who was or is named as a defendant or respondent in a Proceeding, by
reason of the fact that such person is or was a director, officer,
employee or agent of the Corporation or is or was serving at the
request of the Corporation as a director, officer, partner, venturer,
proprietor, trustee, employee, agent or similar functionary of another
corporation, partnership, trust, employee benefit plan or other
enterprise, shall be paid by the Corporation at reasonable intervals in
advance of the final disposition of such Proceeding, upon receipt by
the Corporation of a written
FIRST AMENDMENT TO THE CORPORATE BYLAWS - PAGE 3
<PAGE> 52
affirmation by such person of his good faith belief that he has met the
standard of conduct necessary for indemnification under this Article 6,
and a written undertaking by or on behalf of such person to repay the
amount paid or reimbursed by the Corporation if it is ultimately
determined that he is not entitled to be indemnified by the Corporation
as authorized in this Article 6. Such written undertaking shall be an
unlimited obligation of such person and it may be accepted without
reference to financial ability to make repayment.
6.04 Nature of Indemnification. The indemnification and
advancement of expenses provided hereunder shall not be deemed
exclusive of any other rights to which those seeking indemnification
may be entitled under the Articles of Incorporation, these By-Laws, any
agreement, vote of shareholders or disinterested Directors or
otherwise, both as to actions taken in an official capacity and as to
actions taken in any other capacity while holding such office, shall
continue as to a person who has ceased to be a Director, officer,
employee or agent of the Corporation and shall inure to the benefit of
the heirs, executors and administrators of such person.
6.05 Insurance. The Corporation shall have the power and
authority to purchase and maintain insurance or another arrangement on
behalf of any person who is or was a Director, officer, employee or
agent of the Corporation, or who is or was serving at the request of
the Corporation as a Director, officer, partner, venturer, proprietor,
trustee, employee, agent, or similar functionary of another foreign or
domestic corporation, partnership, joint venture, sole proprietorship,
trust, employee benefit plan or other enterprise against any liability,
claim, damage, loss or risk asserted against such person and incurred
by such person in any such capacity or arising out of the status of
such person as such, irrespective of whether the Corporation would have
the power to indemnify and hold such person harmless against such
liability under the provisions hereof.
FIRST AMENDMENT TO THE CORPORATE BYLAWS - PAGE 4
<PAGE> 53
6.06 Notice. Any indemnification or advance of expenses to a
present or former director of the Corporation in accordance with this
Article 6 shall be reported in writing to the shareholders of the
Corporation with or before the notice or waiver of notice of the next
shareholders' meeting or with or before the next submission of a
consent to action without a meeting and, in any case, within the next
twelve month period immediately following the indemnification or
advance.
IN DUE AUTHENTICATION WHEREOF, the undersigned, being hereunto duly
authorized, has set his hand as of this 11th day of February, 1988.
VERTEX COMMUNICATIONS CORPORATION
By: /s/ Bill Womble
----------------------------------------
Bill Womble,
Secretary
FIRST AMENDMENT TO THE CORPORATE BYLAWS - PAGE 5
<PAGE> 54
SECOND AMENDMENT
TO THE
CORPORATE BYLAWS
OF
VERTEX COMMUNICATIONS CORPORATION
(a Texas corporation)
================================================================================
THE STATE OF TEXAS )
) KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF GREGG )
That, the undersigned, being the duly elected and acting Secretary of
VERTEX COMMUNICATIONS CORPORATION, a Texas corporation (the "Company"), does
hereby CERTIFY and AFFIRM that the following is an original counterpart of the
Second Amendment to the Corporate Bylaws of the Company, unanimously adopted and
approved by the Board of Directors of the Company at a regular meeting of the
Board of Directors duly called and held on October 29, 1991, at which a quorum
of the Directors was present, whereby the Corporate Bylaws of the Company were
amended as follows:
1. Section 2.10 of Article 2 of the Corporate Bylaws of the Company is
amended to read in its entirety as follows:
"2.10 Record Date: Closing Transfer Books. As more
specifically provided in Article 7, Section 7.07 hereof, the Board of
Directors may fix in advance a record date for the purpose of
determining shareholders entitled to notice of or to vote at a meeting
of shareholders, such record date to be not less than ten (10) nor more
than sixty (60) days prior to such meeting, or the Board of Directors
may close the stock transfer books for such purpose for a period of not
less than ten (10) nor more than sixty (60) days prior to such meeting.
In the absence of any action by the Board of Directors, the date upon
which the notice of the meeting is mailed shall be deemed the record
date."
SECOND AMENDMENT TO THE CORPORATE BYLAWS OF
VERTEX COMMUNICATIONS CORPORATION - PAGE 1
<PAGE> 55
2. Section 7.07 of Article 7 of the Corporate Bylaws of the Company is
amended to read in its entirety as follows:
"7.07 Closing of Transfer Books: Record Date. For the
purpose of determining shareholders entitled to notice of or
to vote at any meeting of shareholders, or any adjournment
thereof, or entitled to receive payment of any dividend, or in
order to make a determination of shareholders for any other
proper purpose, the Board of Directors may provide that the
stock transfer books shall be closed for a stated period of
time not to exceed, in any case, sixty (60) days. If the stock
transfer books shall be closed for the purpose of determining
shareholders, such books shall be closed for at least ten (10)
days immediately preceding such meeting. In lieu of closing
the stock transfer books, as aforesaid, the Board of Directors
may fix in advance a date as the record date for any such
determination of shareholders, such date in any case to be not
more than sixty (60) days, and in case of a meeting of
shareholders, not less than ten (10) days prior to the date on
which the particular action requiring such determination of
shareholders is to be taken. If the stock transfer books are
not closed and the record date is not fixed for the
determination of shareholders entitled to notice of or to vote
at a meeting of shareholders, or shareholders entitled to
receive payment of a dividend, the date on which notice of the
meeting is mailed or the date on which the resolution of the
Board of Directors declaring such dividend is adopted, as the
case may be, shall be the record date for such determination
of shareholders. When a determination of shareholders entitled
to vote at any meeting of shareholders has been made as
provided in this Section, such determination shall be applied
to any adjournment thereof, except where the determination has
been made through the closing of the stock transfer books and
the stated period of closing has expired."
SECOND AMENDMENT TO THE CORPORATE BYLAWS OF
VERTEX COMMUNICATIONS CORPORATION - PAGE 2
<PAGE> 56
IN DUE AUTHENTICATION WHEREOF, the undersigned, being hereunto duly
authorized, has set his hand as of this 29th day of October, 1991.
VERTEX COMMUNICATIONS CORPORATION
By: /s/ Bill R. Womble
--------------------------------------
BILL R. WOMBLE, Secretary
SECOND AMENDMENT TO THE CORPORATE BYLAWS OF
VERTEX COMMUNICATIONS CORPORATION - PAGE 3
<PAGE> 1
EXHIBIT 5.1
================================================================================
VERTEX COMMUNICATIONS CORPORATION
EXHIBIT 5.1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
================================================================================
<PAGE> 2
Exhibit 5.1
THOMPSON & KNIGHT
A PROFESSIONAL CORPORATION
ATTORNEYS AND COUNSELORS
1700 PACIFIC AVENUE, SUITE 3300
DALLAS, TEXAS 75201-4693
(214) 969-1700
FAX (214) 969-1751
May 22, 1998
Vertex Communications Corporation
2600 North Longview Street
Kilgore, Texas 756622
Re: VERTEX COMMUNICATIONS CORPORATION;
FORM S-3 REGISTRATION STATEMENT
Gentlemen:
We have acted as counsel for Vertex Communications Corporation, a Texas
corporation (the "Company"), in connection with the preparation of the Company's
Registration Statement on Form S-3 (the "Registration Statement"), filed with
the Securities and Exchange Commission (the "Commission") under the Securities
Act of 1933, as amended (the "Securities Act"), covering the proposed sale of up
to 474,349 shares (the "Shares") of Common Stock, par value $.10 per share, of
the Company by the Selling Shareholders named therein (the "Selling
Shareholders"). The Shares are proposed to be sold by the Selling Shareholders
in the manner set forth in the Prospectus constituting Part I of the
Registration Statement under the caption "Plan of Distribution".
In connection with the foregoing, we have examined the originals or
copies, certified or otherwise authenticated to our satisfaction, of such
corporate records of the Company, certificates of public officials and other
instruments and documents as we have deemed necessary to require as a basis for
the opinion hereinafter expressed. As to questions of fact material to such
opinion, we have, where relevant facts are not independently established, relied
upon statements of officers of the Company.
On the basis of the foregoing and in reliance thereon, we advise you
that in our opinion the Shares to be sold by the Selling Shareholders pursuant
to the Registration Statement have been duly and validly authorized by the
Company and, when sold by the Selling Shareholders as described in the
Registration Statement, will be legally issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion with the Commission as
Exhibit 5.1 of the Registration Statement and to the reference to us in the
Prospectus under the caption "Legal Matters". In giving this consent, we do not
thereby admit that we come within the category of persons whose consent is
required under Section 7 of the Securities Act or the rules or regulations of
the Commission thereunder.
<PAGE> 3
Vertex Communications Corporation
May 22, 1998
Page 2
Respectfully submitted,
THOMPSON & KNIGHT, P.C.
A Professional Corporation
By: /s/ Bill R. Womble
-----------------------------------
BILL R. WOMBLE, Attorney
<PAGE> 1
EXHIBIT 23.2
================================================================================
VERTEX COMMUNICATIONS CORPORATION
EXHIBIT 23.2
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
================================================================================
<PAGE> 2
Exhibit 23.2
Consent of Independent Accountants
As independent public accountants, we hereby consent to the incorporation by
reference in this Form S-3 Registration Statement of our reports dated October
24, 1997, included in Vertex Communications Corporation's Form 10-K for the year
ended September 30, 1997, and to all references to our Firm included in the
registration statement.
ARTHUR ANDERSEN LLP
Dallas, Texas
May 22, 1998
