<PAGE>
<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
- --- OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
-------------------
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
- --- OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
---------- ----------
Commission File No. 0-14800
---------------
X-RITE, INCORPORATED
- ------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Michigan 38-1737300
- ------------------------------------------------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
3100 44th Street, SW, Grandville, Michigan 49418
- ------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(616) 534-7663
- ------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
--- ---
The number of shares outstanding of registrant's common stock, par value
$.10 per share, at July 31, 1996 was 21,029,534 shares.
Exhibit Index on page 11.
-1-
<PAGE>
<PAGE> 2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
X-RITE, INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, December 31,
1996 1995
------------ -----------
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 2,347,000 $ 332,000
Short-term investments 6,350,000 4,073,000
Accounts receivable, less allowances of
$698,000 in 1996 and $574,000 in 1995 15,398,000 13,168,000
Inventories 12,660,000 12,835,000
Deferred tax assets 792,000 792,000
Prepaid expenses and other current assets 673,000 683,000
----------- -----------
Total current assets 38,220,000 31,883,000
PROPERTY AND EQUIPMENT, at cost 26,920,000 25,107,000
Less accumulated depreciation (11,007,000) (9,825,000)
----------- -----------
15,913,000 15,282,000
OTHER ASSETS:
Costs in excess of net assets acquired 9,810,000 10,098,000
Other noncurrent assets 6,097,000 6,244,000
----------- -----------
15,907,000 16,342,000
----------- -----------
$70,040,000 $63,507,000
=========== ===========
See accompanying notes to condensed consolidated financial statements.
-2-
<PAGE>
<PAGE> 3
X-RITE, INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS--Continued
June 30, December 31,
1996 1995
------------ -----------
(Unaudited)
LIABILITIES AND SHAREHOLDERS' INVESTMENT
CURRENT LIABILITIES:
Accounts payable $ 1,312,000 $ 1,499,000
Accrued liabilities--
Payroll and employee benefits 1,037,000 785,000
Income taxes 556,000 286,000
Other accrued liabilities 1,235,000 1,056,000
----------- -----------
Total current liabilities 4,140,000 3,626,000
DEFERRED INCOME TAXES 611,000 611,000
SHAREHOLDERS' INVESTMENT:
Common stock 2,103,000 2,102,000
Additional paid-in capital 6,408,000 6,388,000
Retained earnings 56,874,000 50,781,000
Cumulative translation adjustment (96,000) (1,000)
----------- -----------
65,289,000 59,270,000
----------- -----------
$70,040,000 $63,507,000
=========== ===========
See accompanying notes to condensed consolidated financial statements.
-3-
<PAGE>
<PAGE> 4
X-RITE, INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Three Months Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
----------- ----------- ----------- -----------
Net sales $20,827,000 $18,906,000 $40,523,000 $36,852,000
Cost of sales 7,440,000 6,523,000 14,537,000 11,954,000
----------- ----------- ----------- -----------
Gross profit 13,387,000 12,383,000 25,986,000 24,898,000
Operating expenses:
Selling & marketing 3,507,000 4,229,000 6,937,000 7,945,000
Engineering, general
& administrative 2,945,000 2,882,000 5,728,000 5,403,000
Research & development 1,351,000 1,556,000 2,743,000 3,031,000
----------- ----------- ----------- -----------
7,803,000 8,667,000 15,408,000 16,379,000
----------- ----------- ----------- -----------
Operating income 5,584,000 3,716,000 10,578,000 8,519,000
Other income 94,000 67,000 166,000 157,000
----------- ----------- ----------- -----------
Income before
income taxes 5,678,000 3,783,000 10,744,000 8,676,000
Income taxes 1,903,000 1,230,000 3,600,000 2,820,000
----------- ----------- ----------- -----------
NET INCOME $ 3,775,000 $ 2,553,000 $ 7,144,000 $ 5,856,000
=========== =========== =========== ===========
Average number of common
and common equivalent
shares outstanding 21,207,000 21,178,000 21,184,000 21,164,000
========== ========== ========== ==========
Earnings per common and
common equivalent share $.18 $.12 $.34 $.28
==== ==== ==== ====
Cash dividends per share $.025 $.025 $.050 $.050
===== ===== ===== =====
See accompanying notes to condensed consolidated financial statements.
-4-
<PAGE>
<PAGE> 5
X-RITE, INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Six Months Ended
June 30,
1996 1995
---------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES $7,675,000 $ 2,323,000
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of investments 700,000 13,726,000
Proceeds from maturities of investments 567,000 -
Purchases of investments (3,551,000) -
Capital expenditures (1,895,000) (1,876,000)
Acquisitions, less cash acquired - (11,490,000)
Purchases of other assets (459,000) -
Other investing activities 26,000 -
---------- -----------
Net cash and cash equivalents provided
by (used for)investing activities (4,612,000) 386,000
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends paid (1,051,000) (1,050,000)
Issuance of common stock 21,000 141,000
---------- -----------
Net cash and cash equivalents
used for financing activities (1,030,000) (909,000)
EFFECT OF EXCHANGE RATE CHANGES ON CASH
AND CASH EQUIVALENTS (18,000) (21,000)
---------- -----------
NET INCREASE IN CASH AND CASH EQUIVALENTS 2,015,000 1,789,000
CASH AND CASH EQUIVALENTS AT BEGINNING
OF YEAR 332,000 1,171,000
---------- -----------
CASH AND CASH EQUIVALENTS AT END OF QUARTER $2,347,000 $ 2,960,000
========== ===========
See accompanying notes to condensed consolidated financial statements.
-5-
<PAGE>
<PAGE> 6
X-RITE, INCORPORATED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1--BASIS OF PRESENTATION
The condensed consolidated financial statements included herein have been
prepared by X-Rite Incorporated ("X-Rite" or the "Company"), without audit,
pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosures normally included
in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules
and regulations, although the Company believes that the disclosures are
adequate to make the information presented not misleading. It is suggested
that these condensed consolidated financial statements be read in
conjunction with the consolidated financial statements and notes thereto
included in X-Rite's 1995 annual report on Form 10-K.
In the opinion of management, the accompanying unaudited condensed
consolidated financial statements contain all adjustments necessary to
present fairly the financial position of the Company as of June 30, 1996,
the results of its operations for the three and six month periods ended
June 30, 1996 and 1995, and its cash flows for the six month periods ended
June 30, 1996 and 1995. All such adjustments are of a normal and recurring
nature.
Certain reclassifications have been made to prior year operating expenses
to conform with the 1996 presentation.
NOTE 2--INVENTORIES
Inventories consisted of the following:
June 31, December 31,
1996 1995
------------ -----------
Raw materials $ 4,453,000 $ 4,399,000
Work in process 3,380,000 3,523,000
Finished goods 4,827,000 4,913,000
----------- -----------
$12,660,000 $12,835,000
=========== ===========
-6-
<PAGE>
<PAGE> 7
Item 2. Management's Discussion and Analysis of Results
of Operations and Financial Condition
RESULTS OF OPERATIONS
Net Sales:
Second quarter 1996 consolidated net sales were 10.2% higher than sales in
the same quarter a year ago. The year-over-year increase was due to higher
unit volume sales.
Consolidated net sales for the six months ended June 30, 1996 increased
10.0% compared to the same period in 1995. The improvement in sales was
due to unit volume increases and the inclusion of Labsphere, Inc.
("Labsphere") sales for a full three months in the first quarter of 1996.
Labsphere was acquired by X-Rite in February of 1995, accordingly first
quarter consolidated sales that year only included Labsphere's sales
subsequent to acquisition.
Cost of Sales and Gross Profit:
Gross profit as a percentage of sales was 64.3% for the second quarter of
1996, compared to 65.5% for the second quarter of 1995. Year to date,
gross profit as a percentage of sales was 64.1% in 1996 and 67.6% in 1995.
The decline in gross profit margins was due to a change in product sales
mix.
Operating Expenses:
Second quarter and year-to-date selling and marketing expenses have
declined compared to the same periods in 1995. The decreases resulted from
reducing certain advertising and trade show expenses, and making workforce
reductions as part of an overall effort to contain operating expenses.
Engineering, general and administrative ("EG&A") expenses in the second
quarter were comparable to the same quarter in the prior year. EG&A
expenses year-to-date increased 6.0% compared to the same period in the
prior year. Most of the increase was due to EG&A expenses from the
Labsphere operations being included for a full three months in the first
quarter of 1996, versus only a partial quarter's costs in 1995. The
Company has also been increasing its support of its international
subsidiary operations where management believes the greatest long-term
sales growth opportunities exist.
Research and development expenses in the second quarter and year to date
decreased slightly compared with the same periods in 1995. X-Rite is
committed to continuing its investments in strategic product development,
but is also containing costs wherever possible in order to optimize those
investments.
-7-
<PAGE>
<PAGE> 8
Item 2. Management's Discussion and Analysis of Results
of Operations and Financial Condition, continued
RESULTS OF OPERATIONS, continued
Other Income:
Other income consisted mainly of interest earnings from invested funds.
Second quarter and year-to-date interest income was higher than comparable
periods in the prior year due to an increase in funds during the second
quarter available to invest.
Net Income:
The Company recorded net income of $3,775,000 for the three months ended
June 30, 1996 compared to $2,553,000 in the same period of 1995. On a per
share basis, second quarter net income was $.18 in 1996 and $.12 in 1995.
For the first six months of 1996, net income was $7,144,000, or $.34 per
share, compared to $5,856,000, or $.28 per share in 1995. The increase in
second quarter and year-to-date earnings was due to higher sales volume and
lower operating expenses. The average number of common and common
equivalent shares outstanding was not significantly different between the
periods.
FINANCIAL CONDITION AND LIQUIDITY
Cash provided by operating activities in the first six months of 1996
totaled $7,675,000. Working capital at June 30, 1996 was $34,080,000
compared to $28,257,000 at December 31, 1995. The increase in working
capital was mainly due to net income earned in the period.
Capital expenditures in the first six months of 1996 totaled $1,895,000 and
consisted of computers, software, machinery and equipment. X-Rite
currently anticipates capital expenditures for the remainder of 1996 will
be approximately $600,000, and will consist mainly of machinery and
equipment.
Management expects that X-Rite's current liquidity, combined with cash flow
from future operations and the Company's $20 million revolving credit
agreement, will be sufficient to finance the Company's operations, capital
expenditures and dividends for the remainder of 1996 and 1997.
-8-
<PAGE>
<PAGE> 9
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
At the Annual Meeting of Shareholders on May 20, 1996, X-Rites's
shareholders voted on the following matters:
1. Election of the following directors to three year terms expiring in
1999:
Affirmative Votes Broker
Votes Withheld Nonvotes
----------- -------- --------
Dr. Marvin G. DeVries 17,641,741 91,736 7,614
Stanley W. Cheff 17,669,291 64,186 7,614
James A. Knister 17,656,676 76,801 7,614
Company directors Lawrence E. Fleming, Rufus S. Teesdale and Charles
VanNamen (whose terms expire in 1997); and Ted Thompson, Ronald A.
VandenBerg and Quinten E. Ward (whose terms expires in 1998) continued
as directors of the Company following the annual meeting.
2. A proposal to adopt the X-Rite, Incorporated Cash Bonus Conversion
Plan (the "Plan"). The proposal was carried and the Plan was approved
with 16,307,705 shares voting for, 534,083 shares voting against and
899,303 shares abstaining.
Item 6. Exhibits and Reports on Form 8-K
(a) See Exhibit Index on Page 11 of this Form 10-Q report.
(b) There were no reports on Form 8-K filed by the Registrant
during the three months ended June 30, 1996.
-9-
<PAGE>
<PAGE> 10
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
X-RITE, INCORPORATED
August 7, 1996 /s/ Ted Thompson
----------------------
Ted Thompson
Chairman, President and
Chief Executive Officer
August 7, 1996 /s/ Duane F. Kluting
----------------------
Duane F. Kluting
Vice President and
Chief Financial Officer
-10-
<PAGE>
<PAGE> 11
EXHIBIT INDEX
- --------------------------------------------------------------------------
3(a) Restated Articles of Incorporation (filed as exhibit to Form
S-18 dated April 10, 1986 (Registration No. 33-3954C) and
incorporated herein by reference)
3(b) Certificate of Amendment to Restated Articles of Incorporation
adding Article IX (filed as exhibit to Form 10-Q for the quarter
ended June 30, 1987 (Commission File No. 0-14800) and
incorporated herein by reference)
3(c) Certificate of Amendment to Restated Articles of Incorporation
amending Article III (filed as exhibit to Form 10-K for the year
ended December 31, 1995 (Commission File No. 0-14800) and
incorporated herein by reference)
3(d) Bylaws, as amended through June 16, 1994 (filed as exhibit to
Form 10-K for the year ended December 31, 1994 (Commission File
No. 0-14800) and incorporated herein by reference)
3(e) First amendment to amended Bylaws amending Article IV (filed as
exhibit to Form 10-K for the year ended December 31, 1995
(Commission File No. 0-14800) and incorporated herein by
reference)
4 X-Rite, Incorporated common stock certificate specimen (filed
as exhibit to Form 10-Q for the quarter ended June 30, 1986
(Commission File No. 0-14800) and incorporated herein by
reference)
The following material contracts identified with "*" preceding the exhibit
number are agreements or compensation plans with or relating to executive
officers, directors or related parties.
*10(a) X-Rite, Incorporated 1993 Outside Director Stock Option Plan
(filed as exhibit to Form S-8 dated July 19, 1994 (Commission
File No. 0-14800) and incorporated herein by reference)
*10(b) X-Rite, Incorporated Cash Bonus Conversion Plan (filed as
Appendix A to the definitive proxy statement dated April 8, 1996
relating to the Company's 1996 annual meeting (Commission File
No. 0-14800) and incorporated herein by reference)
*10(c) Form of Indemnity Contract entered into between the registrant
and members of the board of directors
*10(d) Employment Resignation and Severance Agreement entered into
between the registrant and Bruce Jorgensen (filed as exhibit to
Form 10-Q for the quarter ended March 31, 1996 (Commission File
No. 0-14800) and incorporated herein by reference)
-11-
<PAGE>
<PAGE> 12
EXHIBIT INDEX
- --------------------------------------------------------------------------
10(e) Exchange Agreement entered into between the registrant and
Ronald L. Sisson (filed as exhibit to Form 10-K for the year
ended December 31, 1994 (Commission File No. 0-14800) and
incorporated herein by reference)
27 Financial Data Schedule
-12-
<PAGE>
<PAGE> 13
<EX-10.c>
Exhibit 10(c)
INDEMNITY AGREEMENT
AGREEMENT made as of the _______ day of __________, 19__, by and among
X-Rite, Incorporated, a Michigan corporation (the "Corporation") and
________________________ (the "Indemnitee") with respect to the following:
WITNESSETH:
WHEREAS, the Board of Directors of the Corporation has recognized that
the present trend in litigation against corporate directors has created a
reluctance in persons to serve in such a capacity and that such effect is
likely to result in less effective direction and supervision of the
Corporation s business affairs;
WHEREAS, the Board of Directors of the Corporation has determined that
such consequences are so detrimental to the best interests of the
Corporation and its shareholders that its directors should be provided with
protection against inordinate risks in order to insure that the most
capable persons available will be attracted to such a position;
WHEREAS, in light of the rising costs of and reduced coverage of
director liability insurance and the recent amendment to the Michigan
Business Corporation Act, which permits an increase in the scope of
indemnification of directors, it is reasonable and necessary for the
Corporation to contractually obligate itself to indemnify its directors for
certain costs, expenses and other monetary liabilities to the fullest
extent permitted by law and as further provided in this Agreement.
NOW, THEREFORE, in order to induce Indemnitee to serve or continue to
serve the Corporation as a director, and in consideration of the mutual
covenants and agreements hereinafter set forth, the parties agree as
follows:
1. DEFINITIONS. As used herein, the following terms are defined as
follows:
(a) Claim. Any threatened, pending or completed action, suit or
proceeding, or any inquiry or investigation, whether civil, criminal,
administrative or investigative and whether formal or informal, by reason
of the fact that Indemnitee is or was a director of the Corporation or is
or was serving at the request of the Corporation as a director of another
corporation or in a similar capacity of any other kind of entity.
(b) Expenses. Attorneys fees and all other costs, expenses and
obligations actually and reasonably paid or incurred in connection with
investigating, defending, participating or being a witness in, or preparing
to defend, participate or be a witness in any Claim or appeal therefrom.
-13-
<PAGE>
<PAGE> 14
2. AGREEMENT TO SERVE. Indemnitee agrees to serve as a director of the
Corporation to the best of his ability so long as he is duly elected and
qualified in accordance with the Articles of Incorporation and Bylaws of
the Corporation, or until his earlier resignation or removal.
3. INDEMNIFICATION. Subject to the terms and conditions of this
Agreement, the Corporation hereby agrees to indemnify Indemnitee as
follows:
(a) In the event Indemnitee was, is or becomes a party to or witness or
other participant in, or is threatened to be made a party to or witness or
other participant in a Claim, the Corporation shall indemnify Indemnitee to
the fullest extent permitted by law and as provided in this Agreement,
pursuant to the authorization of Section 565 of the Michigan Business
Corporation Act, against any and all Expenses, judgments, fines, penalties
and amounts paid in settlement of such Claim.
(b) The Corporation shall indemnify Indemnitee as soon as practicable,
but in any event not later than thirty (30) days after written demand is
presented to the Corporation.
4. CONDITION PRECEDENT TO INDEMNIFICATION. Indemnitee, as a condition
precedent to indemnification under this Agreement, shall tender written
notice to the Corporation as soon as practicable of any Claim made against
him for which indemnification will or likely will be sought under the terms
of this Agreement.
Notice to the Corporation shall be directed to X-Rite, Incorporated, 3100
Forty-fourth Street, S.W., Grandville, Michigan 49418, Attn: Corporate
Secretary. In addition, Indemnitee shall give the Corporation such
information and cooperation as may be reasonably necessary and requested by
the Corporation.
5. CONSENT OF CORPORATION. No amounts paid in settlement for which
indemnity will be sought hereunder shall be incurred without the
Corporation s written consent, which consent shall not be unreasonably
withheld.
6. LIMITATIONS ON INDEMNITY.
(a) The Corporation shall not be liable under this Agreement to make any
payment in connection with any Claim made against Indemnitee:
(1) For which payment is made to Indemnitee under a valid and
collectible insurance policy, except for any excess beyond the amount of
payment under such insurance policy;
(2) For which Indemnitee is indemnified by the Corporation otherwise
than pursuant to this Agreement;
-14-
<PAGE>
<PAGE> 15
(3) Based upon or attributable to any transaction: (i) involving
intentional misconduct or knowing violation of law; (ii) which is in
violation of Section 555(1), or any successor provision, of the Michigan
Business Corporation Act; or (iii) from which Indemnitee derived an
improper personal benefit;
(4) For an accounting of profits made from the purchase or sale by
Indemnitee of securities of the Corporation, within the meaning of Section
16(b) of the Securities Exchange Act of 1934 and amendments thereto, or
similar provisions of any state law; or
(5) For which payment of indemnification by the Corporation is otherwise
prohibited by applicable law.
(b) Except as provided in Paragraph 8 hereof, the Corporation shall not
be liable under this Agreement to make any payment in connection with any
action initiated by Indemnitee against the Corporation or any director of
the Corporation, unless the Corporation has joined in or consented to the
initiation of such action.
7. PAYMENT OF COSTS AND EXPENSES IN ADVANCE. If requested by
Indemnitee, the Corporation shall pay (within ten (10) days of such written
request) any and all costs and Expenses incurred by Indemnitee in defending
or investigating any Claim, in advance of the final disposition of such
Claim, upon the receipt of a written undertaking by Indemnitee to repay any
such amounts if it is ultimately determined that Indemnitee is not entitled
to indemnification by the Corporation.
8. INDEMNIFICATION FOR ADDITIONAL EXPENSES. The Corporation shall
indemnify Indemnitee against any and all expenses, including attorneys
fees, incurred by Indemnitee in connection with any action, including
expenses of preparation for such action, brought by Indemnitee for: (a)
indemnification or advance payment of Expenses by the Corporation under
this Agreement; or (b) recovery under any directors liability insurance
policy or policies maintained by the Corporation; provided, however, that
indemnification under this Paragraph 8 shall be limited to those
circumstances where the Indemnitee is successful in obtaining a recovery
of, or a determination that he is entitled to such indemnification, advance
expense payment or insurance recovery.
9. PARTIAL INDEMNIFICATION. In the event Indemnitee is entitled to
indemnification hereunder for a portion of the Expenses, judgments, fines,
penalties and amounts paid in settlement actually and reasonably incurred
by him in the investigation, defense, appeal or settlement of any Claim but
not, however, for all the total amount thereof, the Corporation shall
indemnify Indemnitee for the portion thereof to which Indemnitee is
entitled.
-15-
<PAGE>
<PAGE> 16
10. SUBROGATION. In the event of payment under this Agreement, the
Corporation shall be subrogated to the extent of such payment to all the
rights of recovery of Indemnitee, who shall execute all papers required and
shall do everything that may be necessary to secure such rights, including
the execution of such documents necessary to enable the Corporation
effectively to bring suit or enforce such rights.
11. NO PRESUMPTION. For purposes of this Agreement, the termination of
any action, suit or proceeding by judgment, order, settlement (whether with
or without court approval) or conviction, or upon a plea of nolo
contendere, or its equivalent, shall not create a presumption that
Indemnitee did not meet any particular standard of conduct or have any
particular belief or that a court has determined that indemnification is
not permitted by applicable law.
12. SPECIFIC DETERMINATION OF ENTITLEMENT TO INDEMNIFICATION. In the
event Indemnitee is found liable to the Corporation as a result of any
Claim brought by or in the right of the Corporation, whether and the extent
to which Indemnitee is nevertheless entitled to indemnification under this
Agreement shall be predicted on a determination that indemnification is
appropriate in light of the circumstances of the case and applicable legal
standards, which determination shall be made, at the option of Indemnitee,
by: (a) majority vote of a committee of two (2) or more disinterested
directors appointed by the Board of Directors; (b) independent legal
counsel in a written opinion; or (c) the court in which the Claim was
brought.
13. LIABILITY INSURANCE. To the extent the Corporation maintains an
insurance policy or policies providing liability insurance for directors,
Indemnitee shall be covered by such policy or policies, in accordance with
its or their terms, to the maximum extent of the coverage extended to any
other director of the Corporation.
14. SCOPE OF AGREEMENT. The rights of Indemnitee hereunder shall be in
addition to any other rights Indemnitee may have under any provision of the
Corporation s Articles of Incorporation, Bylaws or laws of the State of
Michigan.
15. AMENDMENT, TERMINATION AND WAIVER. This Agreement may be amended,
modified or terminated and any of the terms and conditions herein may be
waived only by the written consent of the parties hereto. The failure of
any party at any time or times to require performance of any provisions
contained herein shall in no manner affect the right of such party at any
later time to enforce the same.
-16-
<PAGE>
<PAGE> 17
16. BINDING EFFECT AND ASSIGNMENT. This agreement shall be binding upon
and inure to the benefit of the Indemnitee and his personal
representatives, heirs and assigns, and the Corporation and its successors
and assigns, including any direct or indirect successor of the Corporation
by purchase, merger, consolidation or otherwise to all or substantially all
of the business and/or assets of the Corporation; provided, however, that
no assignment of any rights or delegation of obligations provided for
herein may be made by either party without the express written consent of
the other party. This Agreement shall continue in effect while Indemnitee
is a director of the Corporation and for the period immediately thereafter,
terminating two (2) years subsequent to the duration of any applicable
period of limitations for commencing any claims.
17. GOVERNING LAW. The parties hereto acknowledge and agree that this
Agreement shall be governed by, construed and enforced in accordance with
the laws, and in the courts, of the State of Michigan.
18. SEVERABILITY. Any provision of this Agreement which may be
prohibited by law, or otherwise held invalid by a court of competent
jurisdiction, shall be ineffective only to the extent of such prohibition
or invalidity and shall not invalidate or otherwise render ineffective the
remaining provisions of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
X-RITE, INCORPORATED
By ___________________________
Its _________________________
INDEMNITEE
______________________________
-17-
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 2,347,000
<SECURITIES> 6,350,000
<RECEIVABLES> 16,096,000
<ALLOWANCES> 698,000
<INVENTORY> 12,660,000
<CURRENT-ASSETS> 38,220,000
<PP&E> 26,920,000
<DEPRECIATION> 11,007,000
<TOTAL-ASSETS> 70,040,000
<CURRENT-LIABILITIES> 4,140,000
<BONDS> 0
0
0
<COMMON> 2,103,000
<OTHER-SE> 63,186,000
<TOTAL-LIABILITY-AND-EQUITY> 70,040,000
<SALES> 40,523,000
<TOTAL-REVENUES> 40,523,000
<CGS> 14,537,000
<TOTAL-COSTS> 14,537,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 10,744,000
<INCOME-TAX> 3,600,000
<INCOME-CONTINUING> 7,144,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7,144,000
<EPS-PRIMARY> .34
<EPS-DILUTED> .34
</TABLE>
