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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-K
--------------------------
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended: December 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER: 000-18908
IN FOCUS SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
OREGON 93-0932102
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
27700B S.W. PARKWAY AVENUE
WILSONVILLE, OREGON 97070
--------------------------
(Address of principal executive offices and zip code)
503-685-8888
(Registrant's telephone number including area code)
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
COMMON STOCK, WITHOUT PAR VALUE
(Title of Class)
--------------------------
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days: Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K, or any amendment to
this Form 10-K. [ ]
The aggregate market value of the voting stock held by non-affiliates of the
Registrant is $224,970,354 as of February 24, 1997 based upon the last sales
price as reported by the Nasdaq National Market System.
The number of shares outstanding of the Registrant's Common Stock as of February
24, 1997 was 10,765,980 shares.
The Index to Exhibits appears on page 16 of this document.
--------------------------
DOCUMENTS INCORPORATED BY REFERENCE
The Registrant has incorporated into Part III of Form 10-K by reference portions
of its Proxy Statement, dated March 13, 1997.
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IN FOCUS SYSTEMS, INC.
1996 FORM 10-K ANNUAL REPORT
TABLE OF CONTENTS
Page
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PART I
Item 1. Business 3
Item 2. Properties 7
Item 3. Legal Proceedings 8
Item 4. Submission of Matters to a Vote of Security Holders 8
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder
Matters 8
Item 6. Selected Financial Data 9
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations 10
Item 8. Financial Statements and Supplementary Data 13
Item 9. Changes in and Disagreements With Accountants on Accounting
and Financial Disclosure 13
PART III
Item 10. Directors and Executive Officers of the Registrant 14
Item 11. Executive Compensation 14
Item 12. Security Ownership of Certain Beneficial Owners and Management 14
Item 13 Certain Relationships and Related Transactions 14
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K 15
Signatures 20
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PART I
ITEM 1. BUSINESS
FORWARD LOOKING STATEMENTS
Statements in this Form 10-K which the Company considers to be forward-looking
are denoted with an *, and the following cautionary language applies to all such
statements, as well as any other statements in this Form 10-K which the reader
may consider to be forward-looking in nature. Investors are cautioned that all
forward-looking statements involve risks and uncertainties and several factors
could cause actual results to differ materially from those in the
forward-looking statements. The Company from time to time may make
forward-looking statements relating to anticipated gross margins, availability
of products manufactured on behalf of the Company, backlog, new product
introductions and future capital expenditures, and the following factors, among
others, could cause actual results to differ from those indicated in the
forward-looking statements: 1) in regards to gross margins, uncertainties
associated with market acceptance of and demand for the Company's products,
impact of competitive products and their pricing and dependence on third party
suppliers; 2) in regards to product availability and backlog, uncertainties
associated with manufacturing capabilities and dependence on third party
suppliers; 3) in regards to new product introductions, uncertainties associated
with the development of technology and the establishment of full manufacturing
capabilities, dependence on third party suppliers and intellectual property
rights; and 4) in regards to future capital expenditures, uncertainties
associated with new product introductions.
INTRODUCTION
In Focus Systems, Inc. ( an Oregon corporation) was founded in October 1986 to
develop, manufacture and market innovative projection products using flat panel
LCD technology to present output from personal computers and other electronic
devices. References within this document to the "Company" or to "In Focus" are
to In Focus Systems, Inc. and its consolidated subsidiaries, In Focus Systems
FSC, Inc. and In Focus Services, Inc.
PRODUCTS
The Company develops, manufactures and markets multimedia projection products
and services to present video, audio, graphics and data from personal computers,
workstations, VCRs and laser disc players. The Company's products are used in
businesses, schools and government agencies for training sessions, meetings,
sales presentations, technical seminars and other applications involving the
sharing of computer-generated and/or video information with an audience. The
Company's products are compatible with all major personal computers and most
video sources used in business and education. The Company, through its wholly
owned subsidiary, In Focus Services, Inc., also provides creative presentation
services to Fortune 500 and other companies.
PROJECTION SYSTEMS
LITEPRO 570 LS The LitePro 570 LS is a portable multimedia projection
system which combines an amorphous, active matrix LCD, full motion video and
stereo sound. The 570 LS provides 640 x 480 resolution, 300 ANSI lumens, weighs
19.7 pounds and comes with built-in LiteShow II presentation management hardware
and software.
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LITEPRO 580 The LitePro 580 is a multimedia projection system which
combines advanced ploysilicon active matrix LCDs, dichroic optics and full
motion video with stereo sound. The 580 provides 640 x 480 resolution, 350 ANSI
lumens and weighs 16.8 pounds.
LITEPRO 760 The LitePro 760 is a portable ultra-high resolution LCD
projector that is plug-and-play compatible with over 60 advanced computing
platforms. The 760 provides 1024 x 768 resolution, 150 ANSI lumens and weighs
19.5 pounds.
LITEPRO 210 The LitePro 210 is a portable multimedia projection system
which combines an amorphous, active matrix LCD, full motion video, built in JBL
Sound System-Registered Trademark-, Smart Remote, auto sensing and Cable Wizard
connectivity. The 210 provides 640 x 480 resolution, 300 ANSI lumens and weighs
16 pounds.
LITEPRO 220 The LitePro 220 is a portable multimedia projection system
which combines an amorphous, active matrix LCD with 800 x 600 resolution, full
motion video, built in JBL Sound System-Registered Trademark-, Smart Remote,
auto sensing and Cable Wizard connectivity. The 220 provides 800 x 600
resolution, 250 ANSI lumens and weighs 16 pounds.
LITEPRO 620 The LitePro 620 is a portable multimedia projection system
which combines Texas Instruments DMD-TM- (Digital Micro Mirror Device), full
motion video, built in JBL Sound System-Registered Trademark-, Smart Remote,
auto sensing and Cable Wizard connectivity. The 620 provides 800 x 600
resolution, 400 ANSI lumens, 1200 ANSI lumens in grayscale mode and weighs 24
pounds.
LITEPRO 720 The LitePro 720 is an ultra portable multimedia projection
system which combines advanced polysilicon active matrix LCDs, dichroic optics,
full motion video, sound, Smart Remote, auto sensing and Cable Wizard
connectivity. The 720 provides 800 x 600 resolution, 450 ANSI lumens and weighs
12 pounds.
COLOR LCD PROJECTION PANELS
SMARTVIEW 2600 The Smartview 2600 is a data only 1.4 million color panel
using a 9.4" enhanced TSTN(2) LCD. The 2600 provides 640 x 480 resolution and
weighs 6.5 pounds.
SMARTVIEW 3600 The Smartview 3600 is an active matrix 8.4" color LCD that
projects data, video and audio. The 3600 provides 640 x 480 resolution and
weighs 6 pounds.
POWERVIEW 820 The PowerView 820 is an active matrix 10.4" color LCD that
projects data, video and audio. The 820 provides 800 x 600 resolution and
weighs 4.2 pounds.
POWERVIEW 950 The PowerView 950 is the industry's first active matrix
1,024 x 768 high resolution color LCD projection panel featuring a full-sized
10.4" LCD for use with high resolution PC and workstation applications. The 950
weighs 6 pounds.
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PRODUCT AND TECHNOLOGY DEVELOPMENT
The Company increased its investment level in research and development in 1996
in order to enhance existing products as well as create new, differentiated
products in the market place. The Company expects this focus to continue into
1997.
The Company expended approximately $3,856,000, $7,613,000 and $11,693,000 on
research and development activities for the years ended December 31, 1994, 1995
and 1996, respectively. SEE NOTE 1 OF NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS CONTAINED IN ITEM 14.
MARKETING AND DISTRIBUTION
In Focus sells its brand name products through distributors, dealers, catalogs
and governmental sales agencies. More than 165 audio visual dealers, computer
dealers and presentation specialists sell the Company's name brand products. In
Focus also sells through two-tier distributors such as Ingram-Micro, Tech Data,
Merisel, Microage and Access Graphics, who in turn resell In Focus products to
value added resellers throughout North America. In Focus has devoted
significant resources to develop and support a well-trained dealer network with
the ability to demonstrate and sell the Company's products to a wide range of
end-users.
Internationally, In Focus sells its products to 70 international distributors in
more than 60 countries. These distributors sell the Company's products to audio
visual dealers, computer dealers and to end-users. For the year ended December
31, 1996, international sales represented approximately 41 percent of the
Company's revenue. International sales managers, located in Miami, Florida,
Singapore and Amsterdam work with the international distributors to sell and
support the Company's products. SEE NOTE 12 OF NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS CONTAINED IN ITEM 14. The Company has a private label arrangement
with Boxlight Corporation, which resells the Company's color LCD projection
panels and projectors under its own label.
During 1996, the Company continued to develop and refine several sales and
marketing programs including telesales and telemarketing, a national accounts
program, a cooperative marketing program, a target attainment program, a
demonstration program and a leasing program.
CUSTOMER SERVICE
In Focus has established customer service and support organizations at the
Company's headquarters in Wilsonville, Oregon and at the Company's facility in
the Netherlands which provide telephone support and technical training.
Hardware repair is conducted at the Company's headquarters in Wilsonville, by
authorized agents for the Company in Belgium and Singapore and through a network
of Authorized Service Providers worldwide. Customers have toll-free telephone
access to technical specialists who respond to applications and hardware
questions. All of the Company's products are covered by a one-year warranty for
parts and labor from the date of sale, with extended service agreements
available for purchase. A number of authorized dealers and distributors in
North America and internationally have been trained by the Company to provide
customer service repair, technical support and training to their resellers and
end-users.
5
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MANUFACTURING AND SUPPLY
The principal components of the Company's products are display devices,
including various types of LCDs and DMDs, integrated circuits, light sources,
optics, plastic housing parts and electronic sub-assemblies. The Company
procures and tests parts manufactured to the Company's specifications and also
designs and delivers certain electronic components to local sub-contractors for
sub-assembly. The Company then manufactures the final product, which includes
precise alignment of the LCDs and 100 percent testing.
The Company offers products utilizing several types of display devices and
generally attempts to procure components from multiple sources. Certain
components, however, including certain LCDs, DMDs and plastic housing parts for
the projection panels, are purchased from single or limited sources. The
plastic housing parts for the projection panels are molded using Company-owned
tooling. The key components in projection panels and projection systems are the
display devices and imaging engines manufactured to the Company's specifications
by both major Japanese and American manufacturers of products for the
electronics industry. The Company believes that it could obtain most LCDs and
imaging engines manufactured to its specifications from other foreign sources
within three-to-six months at a price that would not be materially higher than
the price paid to existing suppliers.
CUSTOMERS
The Company sells its products to a large number of customers worldwide. No
customer accounted for 10 percent or more of revenue in the year ended December
31, 1996.
BACKLOG
The Company's customers generally order products for immediate delivery, and the
Company generally ships products within one week after receipt of an order.
However, due to the unavailability of adequate supplies of SVGA glass for the
LitePro 220 and 620 and orders on credit hold at the end of the year, backlog at
December 31, 1996 was approximately $9.2 million. Backlog at December 31, 1994
and 1995 was approximately $7.7 million and $33.1 million, respectively. Given
current supply and demand estimates, it is anticipated that a majority of the
current backlog will turn over by the end of the first quarter of 1997*. There
is minimal seasonal influence relating to the Company's order backlog. The
stated backlog is not necessarily indicative of Company sales for any future
period nor is a backlog any assurance that the Company will realize a profit
from filling the orders.
COMPETITION
The Company believes its ability to compete in the projection display market
depends on certain key product characteristics, including resolution,
brightness, range and quality of colors, portability, display speed, power
requirements and price.
The Company faces competition from over 35 to 40 established manufacturers and
distributors and expects additional competition as new technologies,
applications and products are introduced. Principal current competitors include
Sharp Corporation, Hitachi, NEC, Epson, Sanyo, Sony, Panasonic, IBM, JVC, 3M,
Polaroid, Proxima Corporation, nView Corporation, ASK, Davis and Liesengang.
6
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PATENTS, TRADEMARKS AND LICENSES
The Company has been issued United States Patents covering various novel aspects
of its display systems. In addition, applications for United States Patents are
pending on inventions which enable In Focus' display systems to operate at
higher speeds with higher resolution, better contrast, more efficient light and
optical paths, greater numbers of colors or shades and increased ease of use
features. Corresponding applications for many of these inventions are pending
in Australia, Canada, Japan, Taiwan and the European Patent Office.
The Company attempts to protect its proprietary information through agreements
with customers and suppliers. The Company requires its employees, consultants
and advisors to execute confidentiality agreements on the commencement of
employment with or service to In Focus. While the Company's ability to compete
may be affected by its ability to protect its intellectual property, In Focus
believes the rapid pace of technological change in the industry will mean that
the Company's ability to develop new technologies and distribute new products on
a timely basis will be of equal importance to maintaining its competitive
position in addition to protecting its existing intellectual property.
The Company licenses certain of its patents to Motif, Inc., the Company's 50/50
joint venture with Motorola, Inc.
In Focus holds United States registered trademarks for "In Focus," "PC Viewer,"
"In Focus Systems," "Genigraphics," "TSTN," "Overview," "PanelBook,"
"Presentation Plus" and "LitePro." The Company is in the process of
registration of the trademarks "PowerView," "Powerpro," "Presentation Solution,"
"Smartview," "Cable Wizard," "LiteGo," "GraphicsLink," "Instant Status,"
"Instant Quote," "Instant Order," "Instant Answers," "Web Projector," and
"Smart Projector."
EMPLOYEES
As of December 31, 1996, In Focus had 504 employees, including 89, temporary
personnel engaged through the services of an employment agency. In Focus
believes its relations with its employees are good.
ITEM 2. PROPERTIES
The Company currently leases facilities in Wilsonville, Oregon consisting of a
total of 203,000 square feet of office and manufacturing space leased pursuant
to a noncancelable operating lease which expires in December 1998 and has a five
year renewal option. The Company also leases space in Atlanta, Georgia and
Memphis, Tennessee in relation to Genigraphics. The Memphis lease expires in
February 1997 and is being replaced with another leased space in the Memphis
area for which the lease expires in 2002. The Atlanta lease expires in 1997.
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ITEM 3. LEGAL PROCEEDINGS
As of February 27, 1997, there were no material pending legal proceedings to
which the Company or its subsidiaries are a party. From time to time, the
Company becomes involved in ordinary, routine or regulatory legal proceedings
incidental to the business of the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of the Company's shareholders during the
quarter ended December 31, 1996.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Company's Common Stock trades on The Nasdaq National Market System under the
symbol INFS. The high and low sales prices for the two years in the period
ended December 31, 1996 were as follows:
1996 High Low
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Quarter 4 $ 22.25 $ 13.37
Quarter 3 25.25 13.13
Quarter 2 57.50 24.25
Quarter 1 38.50 29.50
1995 High Low
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Quarter 4 $ 37.63 $ 21.75
Quarter 3 32.75 22.75
Quarter 2 28.50 24.12
Quarter 1 29.75 18.13
The number of shareholders of record at December 31, 1996 was 230.
There were no cash dividends declared or paid in 1996 or 1995. The Company does
not anticipate declaring cash dividends in the foreseeable future.
There were no sales of unregistered securities by the Company during the year
ended December 31, 1996.
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ITEM 6. SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
IN THOUSANDS:
EXCEPT PER SHARE AND
SHARE AMOUNTS 1996 1995 1994 1993 1992
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<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA
Revenue $ 258,475 $ 202,821 $ 123,068 $ 73,542 $ 59,833
Cost of product sales 185,313 126,148 70,035 46,838 39,112
Gross profit 73,162 76,673 53,033 26,704 20,721
Operating expenses:
Marketing and sales 30,152 25,265 17,468 11,133 9,958
Engineering 18,545 11,882 5,572 4,435 3,966
General and administrative 7,535 6,585 6,189 4,083 2,512
Income from operations 16,930 32,941 23,804 7,053 4,285
Other income 1,492 2,024 1,737 1,515 1,367
Income before equity in income (loss) of joint
venture and provision for income taxes 18,422 34,965 25,541 8,568 5,652
Provision for income taxes 5,622 11,842 8,627 2,556 1,732
Income before equity in income
(loss) of joint venture 12,800 23,123 16,914 6,012 3,920
Equity in income (loss) of joint venture 332 (431) (6,506) - -
Net income $ 13,132 $ 22,692 $ 10,408 $ 6,012 $ 3,920
Net income per share $ 1.16 $ 1.98 $ 0.89 $ 0.53 $ 0.42
Shares used in per share calculations 11,279,821 11,443,612 11,700,871 11,360,274 9,363,533
BALANCE SHEET DATA
Working capital $ 93,109 $ 81,414 $ 63,343 $ 63,866 $ 58,721
Total assets 138,250 127,303 102,210 79,171 67,621
Long-term debt, less current portion 738 - - - 210
Shareholders' equity 107,960 97,527 86,168 70,240 61,427
</TABLE>
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
1996 COMPARED TO 1995
Revenue increased to $258.5 million in 1996 from $202.8 million in 1995. The 27
percent growth in revenue resulted primarily from growth in unit sales of the
Company's complete line of LitePro projection products, offset by a decrease in
projector average selling prices. Self contained projection systems accounted
for approximately 87 percent of revenue in 1996. International revenue
increased to $106.2 million in 1996 (41 percent of total revenue) from $78.9
million in 1995 (39 percent of total revenue).
The Company's customers generally order products for immediate delivery, and the
Company generally ships products within one week after receipt of an order.
However, due to the unavailability of adequate supplies of SVGA glass for the
LitePro 220 and 620 and orders on credit hold at the end of the year, backlog at
December 31, 1996 was approximately $9.2 million. Backlog at December 31, 1994
and 1995 was approximately $7.7 million and $33.1 million, respectively. Given
current supply and demand estimates, it is anticipated that a majority of the
current backlog will turn over by the end of the first quarter of 1997*. There
is minimal seasonal influence relating to the Company's order backlog. The
stated backlog is not necessarily indicative of Company sales for any future
period nor is a backlog any assurance that the Company will realize a profit
from filling the orders.
Due to the increase in competition within the Company's value added dealer
channel, the Company has limited the amount of credit available for additional
growth and has taken a tighter stance on shipping product to dealers who are in
past due situations. Therefore, growth within this channel is somewhat
dependent upon the ability of the dealers to find alternative sources of
capital.
Gross profit, as a percentage of revenue, decreased to 28.3 percent in 1996 from
37.8 percent in 1995. The decline in gross margins in 1996 resulted primarily
from a) the expected arrival of new competition in the market, which resulted in
additional pricing pressures market wide, b) reserves established for price
protection provided to customers on sales of LitePro 580s during the second
quarter of 1996, c) higher than anticipated costs as a result of expediting
parts to support a steeper than expected ramp up in production for the LitePro
210 and 620 and d) in conjunction with new product launches in the second
quarter, the repositioning of mature products in the market. Repositioning of
mature products included providing additional discounts for volume purchases,
price protection and stock rotation coverage in certain situations, along with
writing down slower moving inventory to the lower of cost or market.
Marketing and sales expense increased, while decreasing as a percentage of
revenue, to $30.2 million (11.7 percent of revenue) in 1996 from $25.3 million
(12.5 percent of revenue) in 1995. The increase in expenditures is primarily a
result of growth in revenues, demand creation programs and brand recognition
efforts, offset by a reduction in the workforce at the beginning of the third
quarter of 1996 and cost containment efforts during
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the third quarter that focused resources on those areas that most directly
contributed to revenue growth, quality and customer satisfaction.
Engineering expenses increased to $18.5 million (7.2 percent of revenue) in 1996
from $11.9 million (5.9 percent of revenue) in 1995. The increase is primarily a
result of increased research and development efforts to support the Company's
product introduction plans as well as investments in engineering and mechanical
computer aided design systems. In addition, the Company incurred additional
costs associated with the introduction of several new products during the second
and third quarters of 1996. The increases in engineering expense were partially
offset by a reduction in the workforce at the beginning of the third quarter of
1996 and cost containment efforts.
General and administrative expenses increased, while decreasing as a percentage
of revenue, to $7.5 million (2.9 percent of revenue) in 1996 from $6.6 million
(3.3 percent of revenue) in 1995. The increase in expenditures is primarily
attributable to increased investment in training and information systems and
severance reserves recorded as part of the reduction in force at the end of the
second quarter of 1996. At the end of the second quarter, the Company
reevaluated workload requirements and reduced the workforce by 8 percent,
implementing a flatter organization structure, which significantly reduced
operating expenses for the second half of 1996.
Income from operations decreased to $16.9 million (6.6 percent of revenue) in
1996 from $32.9 million (16.2 percent of revenue) in 1995. This decrease is
mainly attributable to the lower gross margins achieved in 1996, as discussed
above.
The Company's effective tax rate was approximately 30.5 percent in 1996,
compared to approximately 34 percent in 1995. The decrease in the effective
rate is primarily a result of the reinstatement of the research and development
tax credit effective July 1, 1996 and an increased benefit realized under the
Company's Foreign Sales Corporation, offset by increased state taxes as a
percentage of income.
The Company believes that the impact of inflation on net income was minimal in
1996 and 1995.
1995 COMPARED TO 1994
Revenue increased to $202.8 million in 1995 from $123.1 million in 1994. The 65
percent growth in revenue resulted primarily from continued strong demand for
our LitePro series of products, including the LitePro 560, 570 and 580 and other
new products introduced in 1995. Self contained projection systems accounted for
over 70 percent of revenue in 1995. International revenue increased to $78.9
million in 1995 (39 percent of total revenue) from $49.6 million in 1994 (40
percent of total revenue).
Gross profit, as a percentage of revenue, decreased to 38 percent in 1995 from
43 percent in 1994. The decreased gross margin percentage in 1995 is primarily
attributable to increased sales of the LitePro 580 series products, which are
manufactured for the Company by an outside source and therefore carry lower
margins than other products, as well as increasing price competition on all
products due to unconstrained LCD supplies and new market entrants.
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Marketing and sales expense increased, while decreasing as a percentage of
revenue, to $25.3 million (12.5 percent of revenue) in 1995 from $17.5 million
(14.2 percent of revenue) in 1994. The increase in expenditures is mainly
attributable to an emphasis on growing market share, brand recognition, demand
creation and cooperative advertising programs and general growth of the Company.
Engineering expenses increased to $11.9 million (5.9 percent of revenue) in 1995
from $5.6 million (4.5 percent of revenue) in 1994. This 113 percent increase
in spending over 1994 is a result of increased research and development efforts
and prototype and material costs related to next generation products as well as
investments in engineering and mechanical computer aided design systems.
General and administrative expenses increased, while decreasing as a percentage
of revenue, to $6.6 million (3.3 percent of revenue) in 1995 from $6.2 million
(5.0 percent of revenue) in 1994. The slight increase over 1994 is mainly
attributable to growth of the Company and investments in training and
information systems for the entire Company, offset by continued cost containment
efforts and one-time costs incurred in the third quarter of 1994 related to the
acquisition of certain assets and liabilities of Genigraphics Corporation.
Income from operations increased to $32.9 million (16.2 percent of revenue) in
1995 from $23.8 million (19.3 percent of revenue) in 1994. This increase is
mainly attributable to the individual line item changes discussed above.
The Company's effective tax rate was approximately 34 percent in 1995, compared
to approximately 34 percent in 1994. The effective rate remained constant as a
result of a reduced impact of the research and development credit as a
percentage of income and a lower Foreign Sales Corporation benefit, offset by
decreased state taxes as a percentage of income.
The Company believes that the impact of inflation on net income was minimal in
1995 and 1994.
LIQUIDITY AND CAPITAL RESOURCES
At December 31, 1996 the Company had working capital of $93.1 million, which
included $33.9 million of cash and $4.3 million of marketable
securities-current. The $10.6 million decrease in the combined cash and
marketable securities balance is mainly as a result of $0.9 million used in
operations, $8.8 million for the repurchase of 500,000 shares of the Company's
Common Stock and $8.0 million for the purchase of property and equipment, offset
by $3.7 million provided by the sale of Common Stock through the exercise of
employee stock options and $2.4 million provided by the income tax benefit of
disqualifying dispositions, the release of restriction on $1.0 million in cash.
The current ratio at December 31, 1996 and 1995 was 4.2:1 and 3.8:1,
respectively.
Accounts receivable increased $5.9 million to $55.3 million at December 31, 1996
from $49.4 million at December 31, 1995, primarily as a result of increased
revenue, offset by increased collections due to stepped up efforts in this area.
Days sales outstanding decreased to approximately 68 days at December 31, 1996
from approximately 74 at
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December 31, 1995. Aging beyond 60 days past due was approximately 6 percent of
accounts receivable at December 31, 1996.
Inventories increased $11.9 million to $22.7 million at December 31, 1996 from
$10.8 million at December 31, 1995 due primarily to growth in parts stock and
finished goods to support the shift in production to products that the Company
manufactures and unfilled orders for certain customers on credit hold at the end
of the year. Inventory turned approximately 11 times during 1996 and 1995.
Income taxes receivable, net of income taxes payable, increased $3.4 million to
a net receivable of $1.3 million at December 31, 1996 from a net payable of $2.1
million at December 31, 1995 due primarily to the amount of payments that were
required based on calculations prescribed by the Internal Revenue Code.
Shareholders equity increased $10.4 million as a result of net income of $13.1
million, tax benefit of disqualifying dispositions and non-qualified stock
option exercises of $2.4 million and employee stock option exercises of $3.7
million, offset by the purchase of 500,000 shares of the Company's Common Stock
for $8.8 million.
Expenditures for property and equipment in 1997 are expected to be approximately
$12.9 million, primarily for new product tooling, the expansion of manufacturing
capacity in Wilsonville and information systems infrastructure*.
The Company's working capital requirements over the next year are expected to be
met from existing cash and marketable securities balances, cash flow from
operations and amounts available under its line of credit facility*.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY FINANCIAL DATA
The financial statements and notes thereto required by this item are included on
pages F-1 through F-15 as listed in Item 14 of Part IV of this document.
Quarterly financial data for each of the eight quarters in the two year period
ended December 31, 1996 is as follows:
<TABLE>
<CAPTION>
IN THOUSANDS, EXCEPT PER SHARE DATA 1ST QUARTER 2ND QUARTER 3RD QUARTER 4TH QUARTER
- ----------------------------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
1996
- ----
Revenue $ 67,698 $ 58,569 $ 59,080 $ 73,128
Gross profit 23,416 13,320 15,962 20,464
Net income (loss) 6,991 (1,148) 2,378 4,911
Net income (loss) per share 0.61 (0.10) 0.22 0.45
1995
- ----
Revenue $ 39,203 $ 48,140 $ 54,448 $ 61,030
Gross profit 16,269 17,711 19,738 22,955
Net income 4,753 5,185 5,982 6,772
Net income per share 0.40 0.47 0.53 0.60
</TABLE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
13
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information required by this item is included under the captions ELECTION OF
DIRECTORS, EXECUTIVE OFFICERS and SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING
COMPLIANCE, respectively in the Company's Proxy Statement for its 1997 Annual
Meeting of Shareholders and is incorporated herein by reference.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this item is included under the caption EXECUTIVE
COMPENSATION in the Company's Proxy Statement for its 1997 Annual Meeting of
Shareholders and is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this item is included under the caption SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT in the Company's Proxy
Statement for its 1997 Annual Meeting of Shareholders and is incorporated herein
by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this item is included under the caption CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS in the Company's Proxy Statement for its
1997 Annual Meeting of Shareholders and is incorporated herein by reference.
14
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
FINANCIAL STATEMENTS
The Consolidated Financial Statements, together with the report thereon of
Arthur Andersen LLP, are included on the pages indicated below :
Page
----
Report of Independent Public Accountants F-1
Consolidated Balance Sheets - December 31, 1996 and 1995 F-2
Consolidated Statements of Operations for the years ended
December 31, 1996,1995 and 1994 F-3
Consolidated Statements of Shareholders' Equity - December 31,
1996, 1995 and 1994 F-4
Consolidated Statements of Cash Flows for the years ended
December 31, 1996, 1995 and 1994 F-5
Notes to Consolidated Financial Statements F-6
FINANCIAL STATEMENT SCHEDULES
The following schedule and report thereon is filed herewith:
Page
----
Report of Independent Public Accountants on Financial
Statement Schedule F-16
Schedule II Valuation and Qualifying Accounts F-17
15
<PAGE>
EXHIBITS
The following exhibits are filed herewith:
Sequential
Exhibit No. Page No.
- ----------- --------
3.1 1990 Restated Articles of Incorporation - Incorporated
by reference to Exhibit 3.1 to the Company's Form S-1
Registration Statement (Commission File No. 33-36460)
as filed with the Securities and Exchange Commission
on November 13, 1990. ----
3.2 1997 Restated Bylaws
4.1 See Article VII of Exhibit 3.1 and Section II of
Exhibit 3.2. ----
10.1 1988 Combination Stock Option Plan, as amended -
Incorporated by reference to Exhibit 10.1 to the
Company's annual report on Form 10-K for the year
ended December 31, 1991. ----
10.2 Amendment No. 5 to 1988 Combination Stock Option Plan -
Incorporated by reference to Exhibit 4.2 of the
Company's Form S-8 Registration Statement (Commission
File No. 33-47449) as filed with the Securities and
Exchange Commission on April 24, 1992. ----
10.3 Amendment No. 6 to 1988 Combination Stock Option Plan -
Incorporated by reference to Exhibit 10.3 of the
Company's annual report on Form 10-K for the year
ended December 31, 1992, as filed with the Securities
and Exchange Commission on March 31, 1993. ----
10.4 Amendment No. 7 to 1988 Combination Stock Option Plan -
Incorporated by reference to the Company's annual
report on Form 10-K for the year ended December 31,
1994, as filed with the Securities and Exchange
Commission on March 16, 1995. ----
16
<PAGE>
Sequential
Exhibit No. Page No.
- ----------- --------
10.5 Amendment No. 8 to 1988 Combination Stock Option Plan -
Incorporated by reference to Exhibit 4.1.1 of the
Company's Form S-8 Registration Statement (Commission
File No. 333-15235) as filed with the Securities and
Exchange Commission on October 31, 1996. ----
10.6 Amendment No. 9 to 1988 Combination Stock Option Plan.
10.7 Form of Incentive Stock Option Agreement - Incorporated
by reference to Exhibit 10.2 to the Company's annual
report on Form 10-K for the year ended December 31,
1991. ----
10.8 Form of Non-Qualified Stock Option Agreement -
Incorporated by reference to Exhibit 10.3 of the
Company's Form S-1 Registration Statement (Commission
File No. 33-36460) as filed with the Securities and
Exchange Commission on November 13, 1990. ----
10.9 In Focus Systems, Inc. Directors' Stock Option Plan -
Incorporated by reference to Exhibit 4.3 to the
Company's Form S-8 Registration Statement (Commission
File No. 33-57488) as filed with the Securities and
Exchange Commission on January 26, 1993. ----
10.10 Amendment No. 1 to the In Focus Systems, Inc. Directors'
Stock Option Plan - Incorporated by reference to the
Company's annual report on Form 10-K for the year ended
December 31, 1995, as filed with the Securities and
Exchange Commission on March 14, 1996. ----
10.11 Amendment No. 2 to the In Focus Systems, Inc. Directors'
Stock Option Plan - Incorporated by reference to Exhibit
4.2.2 of the Company's Form S-8 Registration Statement
(Commission File No. 333-15235) as filed with the
Securities and Exchange Commission on October 31, 1996.. ----
17
<PAGE>
Sequential
Exhibit No. Page No.
- ----------- --------
10.12 Form of Directors' Stock Option Agreement -
Incorporated by reference to Exhibit 4.3.1 to the
Company's Form S-8 Registration Statement (Commission
File No. 33-57488) as filed with the Securities and
Exchange Commission on January 26, 1993. ----
10.13 Letter of employment for John V. Harker - Incorporated
by reference to the Company's annual report on Form
10-K, as filed with the Securities and Exchange
Commission of March 31, 1993. ----
10.14 1997 Executive Bonus Plan - Chief Executive Officer
and Chairman of the Board.
10.15 1997 Executive Bonus Plan - Sr. Vice President
10.16 1997 Executive Bonus Plan - Vice President.
10.17 Lease Agreement for Registrant's facilities in
Wilsonville, Oregon, dated January 20, 1993 -
Incorporated by reference to the Company's annual
report on Form 10-K for the year ended December 31,
1992, as filed with the Securities and Exchange
Commission on March 31, 1993. ----
10.18 Amendment No. 1, dated March 1, 1995, to facilities
Lease Agreement dated January 20, 1993 - Incorporated
by reference to the Company's Annual Report on Form
10-K for the year ended December 31, 1995, as filed
with the Securities and Exchange Commission of March
14, 1996. ----
10.19 Amendment No. 2, dated May 15, 1995, to facilities
Lease Agreement dated January 20, 1993 - Incorporated
by reference to the Company's Annual Report on Form
10-K for the year ended December 31, 1995, as filed
with the Securities and Exchange Commission of March
14, 1996. ----
18
<PAGE>
Sequential
Exhibit No. Page No.
- ----------- --------
10.20 Amendment No. 3, dated September 1, 1995, to facilities
Lease Agreement dated January 20, 1993 - Incorporated
by reference to the Company's Annual Report on Form
10-K for the year ended December 31, 1995, as filed with
the Securities and Exchange Commission of March 14,
1996. ----
10.21 Amendment No. 4, dated December 1, 1995, to facilities
Lease Agreement dated January 20, 1993 - Incorporated
by reference to the Company's Annual Report on Form
10-K for the year ended December 31, 1995, as filed
with the Securities and Exchange Commission on March
14, 1996. ----
10.22 Lease Agreement for Registrant's additional facilities
in Wilsonville, Oregon dated November 7, 1995 -
Incorporated by reference to the Company's Annual
Report on Form 10-K for the year ended December 31,
1995, as filed with the Securities and Exchange
Commission on March 14, 1996. ----
11 Statement regarding computation of per share earnings.
21 List of Subsidiaries - Incorporated by reference to the
Company's fiscal year end December 31, 1994 Form 10-K
Statement as filed with the Securities and Exchange
Commission on March 16, 1995. ----
23 Consent of Arthur Andersen LLP
24.1 Power of attorney of Peter D. Behrendt
24.2 Power of attorney of Michael R. Hallman
24.3 Power of attorney of Jack D. Kuehler
24.4 Power of attorney of John R. Dougery
27 Financial data schedule
REPORTS ON FORM 8-K
No reports on Form 8-K have been filed by the Registrant during the quarter
ended December 31, 1996.
19
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
Date: February 25, 1997 IN FOCUS SYSTEMS, INC.
By /s/ JOHN V. HARKER
---------------------------------
John V. Harker
Chairman of the Board, President
and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated:
Signature Title
- --------- -----
/s/ JOHN V. HARKER Chairman of the Board, President
- ---------------------- and Chief Executive Officer
John V. Harker (Principal Executive Officer)
Date: February 25, 1997
/s/ MICHAEL D. YONKER Vice President, Information Services,
- ---------------------- Chief Financial Officer, Secretary and
Michael D. Yonker Treasurer
(Principal Financial and Accounting Officer)
Date: February 25, 1997
* PETER D. BEHRENDT Director
- ---------------------- Date: February 25, 1997
Peter D. Behrendt
* JOHN R. DOUGERY Director
- ---------------------- Date: February 25, 1997
John R. Dougery
* MICHAEL R. HALLMAN Director
- ---------------------- Date: February 25, 1997
Michael R. Hallman
* JACK D. KUEHLER Director
- ---------------------- Date: February 25, 1997
Jack D. Kuehler
* BY /s/ JOHN V. HARKER
-------------------
John V. Harker
Attorney-in-fact
20
<PAGE>
Report of Independent Public Accountants
To the Board of Directors and Shareholders of
In Focus Systems, Inc.:
We have audited the accompanying consolidated balance sheets of In Focus
Systems, Inc. (an Oregon corporation) and subsidiaries as of December 31, 1996
and 1995, and the related consolidated statements of operations, shareholders'
equity and cash flows for each of the three years in the period ended
December 31, 1996. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of In Focus Systems,
Inc. and subsidiaries as of December 31, 1996 and 1995, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1996, in conformity with generally accepted accounting principles.
Portland, Oregon,
January 23, 1997
F-1
<PAGE>
IN FOCUS SYSTEMS, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)
December 31, December 31,
1996 1995
------------ ------------
ASSETS
Current Assets:
Cash and cash equivalents $ 33,935 $ 30,165
Marketable securities - held to maturity 4,263 16,563
Accounts receivable, net of allowances of
$3,942 and $2,089 55,289 49,363
Inventories, net 22,715 10,767
Income taxes receivable 1,305 -
Deferred income taxes 3,135 1,624
Other current assets 1,546 2,167
--------- ---------
Total Current Assets 122,188 110,649
Restricted cash - 1,000
Marketable securities - held to maturity - 2,056
Property and equipment, net of accumulated
depreciation of $13,692 and $8,412 14,553 12,201
Other assets, net 1,509 1,397
--------- ---------
Total Assets $ 138,250 $ 127,303
--------- ---------
--------- ---------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Income taxes payable $ - $ 2,128
Accounts payable 22,210 21,476
Payroll and related benefits payable 2,282 2,076
Marketing cooperative payable 1,604 1,596
Other current liabilities 2,983 1,959
--------- ---------
Total Current Liabilities 29,079 29,235
Note payable 738 -
Deferred income taxes 473 541
Shareholders' Equity:
Common stock, 30,000,000 shares authorized;
shares issued and outstanding: 10,693,486
and 10,925,474 47,912 46,405
Additional paid-in capital 10,080 7,727
Retained earnings 49,968 43,395
--------- ---------
Total Shareholders' Equity 107,960 97,527
--------- ---------
Total Liabilities and Shareholders' Equity $ 138,250 $ 127,303
--------- ---------
--------- ---------
The accompanying notes are an integral part of these consolidated
balance sheets.
F-2
<PAGE>
IN FOCUS SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Years Ended December 31, 1996, 1995 and 1994
(In thousands, except share and per share amounts)
1996 1995 1994
---------- ---------- ----------
Revenue $ 258,475 $ 202,821 $ 123,068
Cost of sales 185,313 126,148 70,035
---------- ---------- ----------
Gross profit 73,162 76,673 53,033
Operating expenses:
Marketing and sales 30,152 25,265 17,468
Engineering 18,545 11,882 5,572
General and administrative 7,535 6,585 6,189
---------- ---------- ----------
56,232 43,732 29,229
---------- ---------- ----------
Income from operations 16,930 32,941 23,804
Other income (expense):
Interest expense (45) - (17)
Interest income 1,597 2,010 1,861
Other, net (60) 14 (107)
---------- ---------- ----------
1,492 2,024 1,737
---------- ---------- ----------
Income before equity in income (loss) of
joint venture and provision for income
taxes 18,422 34,965 25,541
Provision for income taxes 5,622 11,842 8,627
---------- ---------- ----------
Income before equity in income (loss) of
joint venture 12,800 23,123 16,914
Equity in income (loss) of joint venture 332 (431) (6,506)
---------- ---------- ----------
Net income $ 13,132 $ 22,692 $ 10,408
---------- ---------- ----------
---------- ---------- ----------
Net income per share $ 1.16 $ 1.98 $ 0.89
---------- ---------- ----------
---------- ---------- ----------
Shares used in per share calculations 11,279,821 11,443,612 11,700,871
---------- ---------- ----------
---------- ---------- ----------
The accompanying notes are an integral part of these consolidated statements.
F-3
<PAGE>
IN FOCUS SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDER'S EQUITY
For the Years Ended December 31, 1996, 1995 and 1994
(In thousands, except share amounts)
<TABLE>
<CAPTION>
Common Stock Additional Total
------------------------- Paid-In Retained Shareholders'
Shares Amount Capital Earnings Equity
---------- --------- ---------- ---------- -------------
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1993 11,077,627 $ 48,602 $ 3,343 $ 18,295 $ 70,240
-
Exercise of Common Stock Options 458,142 3,648 - - 3,648
Income tax benefit of non-qualified stock
option exercises and disqualifying
dispositions - - 1,872 - 1,872
Net income - - - 10,408 10,408
----------- ----------- ----------- ----------- ----------
Balance at December 31, 1994 11,535,769 52,250 5,215 28,703 86,168
-
Exercise of Common Stock Options 389,705 4,155 - - 4,155
Income tax benefit of non-qualified stock
option exercises and disqualifying
dispositions - - 2,512 - 2,512
Stock repurchase (1,000,000) (10,000) - (8,000) (18,000)
Net income - - 22,692 22,692
----------- ----------- ----------- ----------- ----------
Balance at December 31, 1995 10,925,474 46,405 7,727 43,395 97,527
Exercise of Common Stock Options 268,012 3,731 - - 3,731
Income tax benefit of non-qualified stock
option exercises and disqualifying
dispositions - - 2,353 - 2,353
Stock repurchase (500,000) (2,224) (6,559) (8,783)
Net income - - - 13,132 13,132
----------- ----------- ----------- ----------- ----------
Balance at December 31, 1996 10,693,486 $ 47,912 $ 10,080 $ 49,968 $ 107,960
----------- ----------- ----------- ----------- ----------
----------- ----------- ----------- ----------- ----------
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
F-4
<PAGE>
IN FOCUS SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 1996, 1995 and 1994
(In thousands)
<TABLE>
<CAPTION>
1996 1995 1994
-------- -------- --------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income $ 13,132 $ 22,692 $ 10,408
Adjustments to reconcile net income to net cash flows
provided by (used in) operating activities:
Depreciation and amortization 6,235 3,740 2,101
Other non-cash expenses 340 - -
Equity in (income) loss of joint venture (332) 431 6,506
Loss on sale of equipment 41 - 94
(Increase) decrease in:
Accounts receivable, net (5,926) (18,804) (10,139)
Inventories, net (11,948) 665 (4,607)
Income taxes receivable, net (3,433) - -
Deferred income taxes (1,579) (280) (178)
Other current assets 621 (752) (446)
Increase (decrease) in:
Income taxes payable, net - 1,532 (353)
Accounts payable 734 13,835 1,995
Payroll and related benefits payable 206 279 606
Marketing cooperative payable 8 1,012 421
Other current liabilities 1,024 283 151
--------- --------- ---------
Net cash provided by (used in) operating activities (877) 24,633 6,559
Cash flows from investing activities:
Restricted cash 1,000 - -
Purchase of marketable securities-held to maturity (10,742) (22,910) (39,501)
Maturities of marketable securities-held to maturity 25,098 35,672 12,570
Payments for purchase of property and equipment (7,990) (7,265) (6,839)
Proceeds from sale of property and equipment 2 - 2
Investment in joint venture 332 (431) (2,625)
Other assets, net (186) (145) (575)
Purchase of Genigraphics Corporation - - (1,330)
--------- --------- ---------
Net cash provided by (used in) investing activities 7,514 4,921 (38,298)
Cash flows from financing activities:
Payment under note payable guarantee - (3,232) -
Payments under note payable (168) - -
Proceeds from sale of common stock 3,731 4,155 3,648
Income tax benefit of non-qualified stock option
exercises and disqualifying dispositions 2,353 2,512 1,872
Stock repurchase (8,783) (18,000) -
--------- --------- ---------
Net cash provided by (used in) financing activities (2,867) (14,565) 5,520
--------- --------- ---------
Increase (decrease) in cash and cash equivalents 3,770 14,989 (26,219)
Cash and cash equivalents:
Beginning of period 30,165 15,176 41,395
--------- --------- ---------
End of period $ 33,935 $ 30,165 $ 15,176
--------- --------- ---------
--------- --------- ---------
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
F-5
<PAGE>
IN FOCUS SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(NUMBERS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS OR AS OTHERWISE INDICATED)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of In Focus Systems,
Inc. (the "Company") and its wholly-owned subsidiaries, In Focus Systems FSC,
Inc., formed February 1, 1990 and In Focus Services, Inc. formed August 4, 1994.
All significant intercompany accounts and transactions have been eliminated.
NATURE OF OPERATIONS
The Company develops, manufactures and markets multimedia projection products
and services to present video, audio, graphics and data from personal computers,
workstations, VCRs and laser disc players. The Company's products are used in
businesses, schools and government agencies for training sessions, meetings,
sales presentations, technical seminars and other applications involving the
sharing of computer-generated and/or video information with an audience. The
Company's products are compatible with all major personal computers and most
video sources used in business and education. The Company, through its wholly
owned subsidiary, In Focus Services, Inc., also provides creative presentation
services to Fortune 500 and other companies.
ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.
Management believes that the estimates used are reasonable.
CASH EQUIVALENTS AND MARKETABLE SECURITIES
Cash equivalents consist of highly liquid investments with maturities at the
date of purchase of 90 days or less; marketable securities consist primarily of
government and corporate securities. The Company's marketable securities are
all classified as "held to maturity" as the Company has the intent and ability
to hold the securities until maturity. Accordingly, these securities are
carried at amortized cost. See Note 2 below.
REVENUE RECOGNITION
Revenue from the sale of products is recognized at time of shipment to the
customer. The Company maintains a reserve for sales returns and allowances.
Reserves are also established when the Company establishes a price protection or
a dealer stock rotation program for a particular product or products. The
Company has incentive programs for dealers and distributors whereby rebates are
offered based upon exceeding a percentage of quarterly and annual volume goals.
Estimated rebates are netted against revenue in the month in which revenue is
recognized.
F-6
<PAGE>
PRODUCT WARRANTY
Estimated warranty costs are provided at the time of sale of the warranted
products.
CONCENTRATIONS OF RISK
The Company generally attempts to procure components from multiple sources.
Certain components, however, including LCDs and plastic housing parts, are
purchased from single or limited sources.
The Company sells its products to a large number of customers worldwide. At
December 31, 1996, four customers each represented between 5 percent and 6.5
percent of total accounts receivable and at December 31, 1995, four customers
each represented approximately 5 percent of total accounts receivable. The
Company performs ongoing credit evaluations of its customers and maintains a
reserve for potential credit losses. Historically, the Company has not incurred
significant losses related to its accounts receivable.
The Company invests its excess cash with high credit quality financial
institutions which bear minimal risk and, by policy, limits the amount of credit
exposure to any one financial institution. The Company has not experienced any
losses on its investments.
INVENTORIES
Inventories are valued at the lower of cost, using average costs, which
approximates the first-in, first-out (FIFO) method, or market, and include
materials, labor and manufacturing overhead.
PROPERTY AND EQUIPMENT
Property and equipment are stated at cost. Depreciation and amortization are
provided using the straight-line method over the estimated useful lives of the
assets (approximately two to five years). Leasehold improvements are amortized
over the lease term or the estimated useful life of the asset, whichever is
shorter.
RESEARCH AND DEVELOPMENT
Included in engineering expenses are expenditures for research and development
of products, which are expensed as incurred, of approximately $11,693, $7,613
and $3,856 for the years ended December 31, 1996, 1995 and 1994, respectively.
STOCK-BASED COMPENSATION PLANS
The Company accounts for its stock-based compensation plans under Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" (APB
25). Effective January 1, 1996, the Company adopted the disclosure option of
Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation" (SFAS 123). SFAS 123 requires that companies which do not choose
to account for stock-based compensation as prescribed by this statement shall
disclose the pro forma effects on earnings and earnings per share as if SFAS 123
had been adopted. Additionally, certain other disclosures are required with
respect to stock compensation and the assumptions used to determine the pro
forma effects of SFAS 123.
F-7
<PAGE>
NET INCOME PER SHARE
Net income per share is computed using the weighted average number of common and
dilutive common equivalent shares outstanding. Fully diluted earnings per share
is not significantly different from primary earnings per share for the periods
presented.
PATENTS AND TRADEMARKS
Costs associated with obtaining patents and trademarks are capitalized and
amortized over the estimated life of the associated patent or trademark.
RECLASSIFICATIONS
Certain amounts in the prior year financial statements have been reclassified to
conform to the current presentation.
2. MARKETABLE SECURITIES:
The Company accounts for its Marketable Securities in accordance with Statement
of Financial Accounting Standards No. 115, ACCOUNTING FOR CERTAIN INVESTMENTS IN
DEBT AND EQUITY SECURITIES (SFAS 115).
December 31, December 31,
1996 1995
---------------- ----------------
Held to Maturity Held to Maturity
Fair Market Value $ 4,354 $ 18,810
---------------- ----------------
---------------- ----------------
Amortized Cost:
U.S. Government -- --
State and Local Government 4,263 16,824
Corporate Debt -- 1,795
---------------- ----------------
Total $ 4,263 $ 18,619
---------------- ----------------
---------------- ----------------
Maturity Information:
Less than one year 4,263 16,563
One to five years -- 2,056
---------------- ----------------
Total $ 4,263 $ 18,619
---------------- ----------------
---------------- ----------------
3. INCOME TAXES:
The Company accounts for income taxes in accordance with SFAS 109, "ACCOUNTING
FOR INCOME TAXES." The Company realizes tax benefits as a result of the
exercise of nonqualified stock options and the exercise and subsequent sale of
certain incentive stock options (disqualifying dispositions). For financial
reporting purposes, any reduction in income tax obligations as a result of these
tax benefits is credited to paid-in capital. Tax benefits of $2,353, $2,512 and
$1,872 were credited to paid-in capital in 1996, 1995 and 1994, respectively.
F-8
<PAGE>
3. INCOME TAXES (CONTINUED):
The provision for income taxes is as follows:
December 31, 1996 1995 1994
------- ------- -------
FEDERAL:
Current $ 6,462 $ 10,898 $ 7,528
Deferred (1,306) (280) (178)
------- ------- -------
5,156 10,618 7,350
STATE:
Current 739 1,224 1,277
Deferred (273) -- --
------- ------- -------
466 1,224 1,277
------- ------- -------
Total $ 5,622 $ 11,842 $ 8,627
------- ------- -------
------- ------- -------
Total deferred income tax assets at December 31, 1996 and 1995 were $3,413 and
$2,195, respectively. Total deferred income tax liabilities at December 31,
1996 and 1995 were $751 and $1,112, respectively. Individually significant
temporary differences at December 31, 1996 include accounts receivable reserves
which were recorded as deferred assets of $1,497. Individually significant
temporary differences at December 31, 1995 include accounts receivable reserves
and cooperative advertising reserves which were recorded as deferred assets of
$786 and $559, respectively, and book/tax depreciation differences which were
recorded as deferred liabilities of $514. The Company has not recorded a
valuation allowance against the deferred tax assets as they are realizable as a
result of past income and available income tax carrybacks.
The reconciliation between the effective tax rate and the statutory federal
income tax rate is as follows:
For the Year Ended December 31, 1996 1995 1994
- ---------------------------------------------- ------ ------ ------
Statutory federal income tax rate 35.0 % 35.0 % 35.0 %
State taxes, net of federal income tax benefit 3.5 2.1 3.6
Research and development tax credit (1.6) (0.7) (1.0)
Foreign sales corporation tax benefit (3.1) (0.9) (2.8)
Tax exempt interest (2.4) (1.6) (1.7)
Other (0.9) -- 0.7
------ ------ ------
Effective tax rate 30.5 % 33.9 % 33.8 %
------ ------ ------
------ ------ ------
4. INVENTORIES:
December 31, 1996 1995
- ------------------------------ ---------- ----------
Raw materials and components $ 6,259 $ 4,786
Work-in-process 1,148 1,166
Finished goods 15,308 4,815
---------- ----------
$ 22,715 $ 10,767
---------- ----------
---------- ----------
F-9
<PAGE>
5. PROPERTY AND EQUIPMENT:
December 31, 1996 1995
- ------------------------- ---------- ----------
Furniture and fixtures $ 3,020 $ 2,879
Manufacturing equipment 7,496 4,406
Engineering equipment 1,344 760
Computer equipment 14,889 11,388
Leasehold improvements 1,486 1,170
Vehicles 10 10
---------- ----------
28,245 20,613
Less accumulated depreciation (13,692) (8,412)
---------- ----------
$ 14,553 $ 12,201
---------- ----------
---------- ----------
6. LINE OF CREDIT AND NOTE PAYABLE
In September 1996, the Company entered into an unsecured $10.0 million line of
credit with a commercial bank. The line of credit bears interest, at the
Company's election, at one of the following: 1) the bank's prime rate, 2) LIBOR
plus .65 percent, or 3) at a fixed rate as quoted to the borrower by the bank on
the date of borrowing. The bank's prime rate on December 31, 1996 was 8.25
percent. The line of credit expires on April 30, 1997. The line of credit
agreement contains certain liquidity, tangible net worth and pre-tax profit
covenants. At December 31, 1996 the Company was in compliance with all of the
covenants and had no outstanding balance under the line of credit.
Note payable at December 31, 1996 consists of amounts due related to the
acquisition of certain property and equipment and related service fees.
Maturities under this note payable for years subsequent to December 31, 1996 are
as follows:
Year Ending
December 31,
- -------------------
1997 $ --
1998 171
1999 202
2000 216
2001 149
--------
$ 738
--------
--------
7. LEASE OBLIGATIONS:
The Company leases its facilities and certain improvements under a noncancelable
operating lease which expires in December 1998 and has a five year renewal
option. In connection with the facilities lease, the Company had placed in
trust $1,000 which was held for the benefit of the lessor in the event
remediation of environmental contamination is required for the property occupied
by the Company. The $1,000 was released during 1996 after the Company satisfied
all of the lease obligations in this regard for a nominal cost.
F-10
<PAGE>
7. LEASE OBLIGATIONS (CONTINUED):
The Company also leases space in Atlanta, Georgia and Memphis, Tennessee for its
Genigraphics operations. The Memphis lease expires in February 1997 and is
being replaced with another leased facility in the Memphis area for which the
lease expires in 2002. The Atlanta lease expires in 1997.
Future minimum lease payments under the noncancelable operating leases as of
December 31, 1996 are as follows (there were no capital leases at December 31,
1996):
1997 $ 1,961
1998 1,963
1999 217
2000 217
2001 217
Thereafter 72
--------
Total minimum lease payments $ 4,647
--------
--------
Rental expense for the years ended December 31, 1996, 1995 and 1994 was $2,268
$1,305 and $1,257, respectively.
8. MOTIF:
In October 1992, the Company and Motorola, Inc. (Motorola) formed a joint
venture called Motif Inc. (Motif). The joint venture was formed to manufacture
and sell liquid crystal displays (LCDs) and to market and distribute application
specific integrated circuits (ASICs) embodying the Company's Active Addressing
technology. The Company and Motorola each acquired a 50 percent interest in
Motif. The Company's interest, accounted for under the equity method, was
acquired in exchange for the licensing of certain of its technology and the
contribution of equipment, at net book value of $170. Motorola's interest in
the joint venture was acquired in exchange for cash required to complete the
development of Active Addressing ASIC and fund the working capital needs of the
joint venture.
In October, 1994, the Company announced plans to restructure the Motif LCD
operations in order to provide greater focus on the development of its core
Active Addressing technology. As a result, Motif shut down its LCD
manufacturing operation in Wilsonville, Oregon, resulting in a one time
restructuring charge. The Company's share of this restructuring charge and 1994
operating losses was $6.5 million. The Company's investment in the underlying
net assets of Motif at December 31, 1996 was $101.
At December 31, 1996 Motif had signed two license agreements with unrelated
parties for the use of its Active Addressing technology. Royalties generated by
license agreements will be divided between the Company and Motorola on an equal
basis.
F-11
<PAGE>
9. GENIGRAPHICS CORPORATION:
On August 4, 1994, In Focus Services, Inc., a newly formed, wholly owned
subsidiary of the Company, acquired certain assets and liabilities of
Genigraphics Corporation and Genigraphics Service Corporation (Genigraphics) for
$1.5 million. The acquisition was consummated pursuant to an Agreement for Sale
and Purchase of Business Assets, dated June 28, 1994, between the Company and
Genigraphics, as amended on August 4, 1994. Consolidated proforma financial
information is as follows:
For the Year Ended
December 31, 1994
- ----------------------- --------------------
Revenue $ 128,000
Net income $ 10,000
Net income per share $ 0.87
10. SHAREHOLDERS' EQUITY:
In connection with the formation of Motif, the Company sold 2,212 shares of
Common Stock to Motorola at $10 per share under a Stock Purchase Agreement.
Under the terms of the agreement, Motorola was granted limited preemptive rights
to future issuances of the Company's Common Stock and the Company was granted
the right of first refusal in the event shares owned by Motorola are sold. In
March 1995, the Company bought 1,000 shares of its Common Stock from Motorola
for $18 per share. Motorola sold additional shares of the Company's Common
Stock from time to time throughout 1995 and at December 31, 1995, Motorola held
no shares of the Company's Common Stock.
In July 1996, the Company completed the repurchase of a total of 500 shares of
its Common Stock at an average price of $17.60 per share, for a total of $8,785,
which was paid out of existing cash balances.
STOCK OPTION PLANS
The Company's 1988 Combination Stock Option Plan, as amended (the "Option Plan")
provides for the issuance of incentive stock options to employees of the Company
and nonstatutory stock options to employees, officers, directors and consultants
of the Company. At December 31, 1996, the Company had 2,067 shares of Common
Stock reserved for issuance under the Option Plan. Under the Option Plan, the
exercise price of incentive stock options cannot be less than fair market value
at date of grant and the exercise price of a nonstatutory stock options cannot
be less than 50 percent of fair market value at the date of grant or book value
per share at the end of the preceding fiscal year. Options granted generally
vest over a four year period and expire ten years from the date of grant.
F-12
<PAGE>
10. SHAREHOLDERS' EQUITY (CONTINUED):
<TABLE>
<CAPTION>
Activity under the Option Plan is summarized as follows:
Shares Shares Exercise Total
Available Subject to Price Per Exercise
for Grant Options Share Price
---------- ----------- ------------- --------
<S> <C> <C> <C> <C>
Balances, December 31,
1993 352 1,330 $ 1.15-18.50 $ 12,711
Additional shares reserved 1,000 - - -
Options granted (512) 512 11.00-30.75 9,108
Options canceled 132 (132) 1.15-18.50 (1,593)
Options exercised - (458) 1.15-16.50 (3,656)
-------- ------ ------------ ---------
Balances, December 31,
1994 972 1,252 1.15-30.75 16,570
Options granted (651) 651 18.13-36.12 16,792
Options canceled 118 (118) 6.50-29.87 (1,975)
Options exercised - (389) 1.15-28.25 (4,148)
-------- ------ ------------ ---------
Balances, December 31,
1995 439 1,396 6.50-36.12 27,239
Additional shares reserved 500 - - -
Options granted (1,052) 1,052 13.37-55.50 25,516
Options canceled 689 (689) 7.75-55.50 (21,812)
Options exercised - (268) 6.50-36.75 (3,731)
-------- ------ ------------ ---------
Balances, December 31,
1996 576 1,491 $7.50-47.50 $ 27,212
-------- ------ ------------ ---------
-------- ------ ------------ ---------
</TABLE>
At December 31, 1996, options to purchase 436 shares of Common Stock were
exercisable.
The Company's Directors' Stock Option Plan, as amended (the "Directors' Plan")
provides for the grant of stock options covering a total of 200 shares of the
Company's Common Stock to directors of the Company who have not, at any time
during the year preceding the grant of a stock option under the Directors' Plan,
been an employee of the Company or its subsidiaries ("Eligible Directors"). The
Directors' Plan provides for the automatic grant of options to purchase 10
shares of the Company's Common Stock on the date the director becomes an
eligible director and options to purchase 5 shares of the Company's Common Stock
on each anniversary of that date through August 21, 2002. The Directors' Plan
also provides for the automatic grant of options to each Eligible Director on a
quarterly basis in lieu of the payment of a retainer and attendance fees. All
Director options vest six months after the date of grant.
At December 31, 1996 the Company has reserved 200 shares of Common Stock for
issuance under the Directors' Plan. Options to purchase 89 shares of the
Company's Common Stock have been granted at prices ranging from $9.25 to $35.75
and are outstanding at December 31, 1996. At December 31, 1996, options to
purchase 52 shares of Common Stock were exercisable.
F-13
<PAGE>
10. SHAREHOLDERS' EQUITY (CONTINUED):
STATEMENT OF FINANCIAL ACCOUNTING STANDARDS NO. 123
During 1995, the Financial Accounting Standards Board issued SFAS 123 which
defines a fair value based method of accounting for an employee stock option and
similar equity instrument and encourages all entities to adopt that method of
accounting for all of their employee stock compensation plans. However, it also
allows an entity to continue to measure compensation cost for those plans using
the method of accounting prescribed by APB 25. Entities electing to remain with
the accounting in APB 25 must make pro forma disclosures of net income and, if
presented, earnings per share, as if the fair value based method of accounting
defined in SFAS 123 had been adopted.
The Company has elected to account for its stock-based compensation plans under
APB 25; however, the Company has computed, for pro forma disclosure purposes,
the value of all options granted during 1996 and 1995 using the Black-Scholes
option pricing model as prescribed by SFAS 123 using the following weighted
average assumptions for grants:
For the Year Ended
December 31, 1996 1995
-------- --------
Risk-free interest rate 6% 6%
Expected dividend yield 0% 0%
Expected lives 5.10 5.10
Expected volatility 74.7% 72.0%
Using the Black-Scholes methodology, the total value of options granted during
1996 and 1995 was $19,659 and $10,997, respectively, which would be amortized on
a pro forma basis over the vesting period of the options (typically four years).
The weighted average fair value of options granted during 1996 and 1995 was
$19.47 per share and $16.40 per share, respectively. If the Company had
accounted for its stock-based compensation plans in accordance with SFAS 123,
the Company's net income and net income per share would approximate the pro
forma disclosures below:
For the Year Ended
December 31, 1996 1995
------------------- -------------------
As Pro As Pro
Reported Forma Reported Forma
-------- -------- --------- ---------
Net income $ 13,132 $ 6,493 $ 22,692 $ 21,313
Net income per share $ 1.16 $ 0.62 $ 1.98 $ 1.92
The effects of applying SFAS 123 in this pro forma disclosure are not indicative
of future amounts. SFAS 123 does not apply to awards prior to January 1, 1995,
and additional awards are anticipated in future years.
F-14
<PAGE>
10. SHAREHOLDERS' EQUITY (CONTINUED):
The following table summarizes information about stock options outstanding at
December 31, 1996:
Options Outstanding Options Exercisable
- ----------------------------------------------------- -----------------------
Average Weighted Number of Weighted
Range of Number Remaining Average Shares Average
Exercise Outstanding Contractual Exercise Exerciseable Exercise
Prices at 12/31/96 Life(years) Price at 12/31/96 Price
- ------------- ----------- ----------- --------- ------------ ---------
$ 7.50-14.75 344 6.62 $ 11.70 237 $ 11.28
15.00-16.25 34 7.62 15.87 18 15.86
16.50-16.50 599 9.26 16.50 60 16.50
17.00-22.75 317 9.00 19.61 59 20.76
23 25-47.50 286 8.62 29.41 114 29.16
- ------------- ----------- ----------- --------- ------------ ---------
$ 7.50-47.50 1,580 8.48 $ 18.40 488 $ 17.43
- ------------- ----------- ----------- --------- ------------ ---------
- ------------- ----------- ----------- --------- ------------ ---------
11. SUPPLEMENTAL CASH FLOW INFORMATION:
Supplemental disclosure of cash flow information is as follows:
For the Year Ended December 31, 1996 1995 1994
- ---------------------------------------------- ------ ------ ------
Cash paid during the period for interest $ 39 $ - $ 17
Cash paid during the period for income taxes 8,861 8,078 7,263
Property acquired through note payable 566 - -
Reclass of joint venture reserve to note
payable (a non-cash financing activity) - - 3,232
12. EXPORT SALES AND MAJOR CUSTOMERS:
The Company markets its products in the United States and internationally.
Geographic revenue information is as follows:
For the Year Ended December 31, 1996 1995 1994
- -------------------------------- ---------- --------- ---------
United States $ 152,285 $ 123,933 $ 73,500
Europe 66,045 49,555 24,756
Other 40,145 29,333 24,812
---------- --------- ---------
$ 258,475 $ 202,821 $ 123,068
---------- --------- ---------
---------- --------- ---------
No customers accounted for 10 percent or more of revenue in the years
ended December 31, 1996, 1995 or 1994.
F-15
<PAGE>
Report of Independent Public Accountants
on Financial Statement Schedule
We have audited in accordance with generally accepted auditing standards, the
consolidated financial statements included in In Focus Systems, Inc.'s Annual
Report on Form 10-K, and have issued our report thereon dated January 23, 1997.
Our audits were made for the purpose of forming an opinion on those statements
taken as a whole. The schedule listed on page 15 is the responsibility of the
Company's management and is presented for purposes of complying with the
Securities and Exchange Commission's rules and is not part of the basic
consolidated financial statements. This schedule has been subjected to the
auditing procedures applied in our audits of the basic consolidated financial
statements and, in our opinion, fairly states, in all material respects, the
financial data required to be set forth therein in relation to the basic
consolidated financial statements taken as a whole.
ARTHUR ANDERSEN LLP
Portland, Oregon,
January 23, 1997
F-16
<PAGE>
SCHEDULE II
In Focus Systems, Inc.
Valuation and Qualifying Accounts
Years Ended December 31, 1994, 1995 and 1996
(In thousands)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E
- ----------------------------------------------------------------------------------------------------------------------------------
Balance Charged Charged to Balance
at Beginning to Costs and Other Accounts - Deductions - at End
Description of Period Expenses Describe Describe (a) of Period
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Year Ended December 31, 1994:
Reserves deducted from asset accounts:
Allowance for uncollectible accounts $ 585 $ 523 $ 186 (b) $ (77) $ 1,217
Sales allowances (c) $ 644 $ 3,586 $ - $ (3,367) $ 863
Year Ended December 31, 1995:
Reserves deducted from asset accounts:
Allowance for uncollectible accounts $ 1,217 $ 317 $ - $ (350) $ 1,184
Sales allowances (c) $ 863 $ 7,175 $ - $ (7,133) $ 905
Year Ended December 31, 1996:
Reserves deducted from asset accounts:
Allowance for uncollectible accounts $ 1,184 $ 1,040 $ - $ (392) $ 1,832
Sales allowances (c) $ 905 $ 15,234 $ - $ (14,029) $ 2,110
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
(a) Charges to the accounts included in this column are for the purposes for
which the reserves were created.
(b) Amount reflects balance in the allowance for uncollectible accounts of
Genigraphics Corporation upon acquisition.
(c) The reserve for sales allowances is used for pricing adjustments made in
accordance with the Company's pricing structure.
F-17
<PAGE>
EXHIBIT 3.2
1997 RESTATED BYLAWS
OF
IN FOCUS SYSTEMS, INC.
<PAGE>
CONTENTS
SECTION 1. OFFICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 2. SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.1 Annual Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.2 Special Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.3 Place of Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.4 Notice of Meeting. . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.5 Waiver of Notice . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.6 Fixing of Record Date for Determining Shareholders . . . . . . . . . 2
2.7 Shareholders' List . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.8 Quorum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.9 Manner of Acting . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.10 Proxies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.11 Voting of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.12 Voting for Directors . . . . . . . . . . . . . . . . . . . . . . . . 4
2.13 Action by Shareholders Without a Meeting . . . . . . . . . . . . . . 4
2.14 Voting of Shares by Corporation. . . . . . . . . . . . . . . . . . . 4
2.14.1 Shares Held by Another Corporation . . . . . . . . . . . . 4
2.14.2 Shares Held by the Corporation . . . . . . . . . . . . . . 4
2.15 Acceptance or Rejection of Shareholder Votes,
Consents, Waivers and Proxy Appointments. . . . . . . . . . . . . . 5
2.15.1 Documents Bearing Name of Shareholders . . . . . . . . . . 5
2.15.2 Documents Bearing Name of Third Parties. . . . . . . . . . 5
2.15.3 Rejection of Documents . . . . . . . . . . . . . . . . . . 5
2.16 Subject of Meetings. . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 3. BOARD OF DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . 6
3.1 General Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.2 Number, Tenure and Qualifications. . . . . . . . . . . . . . . . . . 7
3.3 Nominations of Directors . . . . . . . . . . . . . . . . . . . . . . 7
3.4 Annual and Regular Meetings. . . . . . . . . . . . . . . . . . . . . 8
3.5 Special Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.6 Meetings by Telecommunications . . . . . . . . . . . . . . . . . . . 8
3.7 Notice of Special Meetings . . . . . . . . . . . . . . . . . . . . . 8
3.7.1 Personal Delivery. . . . . . . . . . . . . . . . . . . . . 9
3.7.2 Delivery by Mail . . . . . . . . . . . . . . . . . . . . . 9
3.7.3 Delivery by Telegraph. . . . . . . . . . . . . . . . . . . 9
3.7.4 Oral Notice. . . . . . . . . . . . . . . . . . . . . . . . 9
3.7.5 Notice by Facsimile Transmission . . . . . . . . . . . . . 9
-i-
<PAGE>
3.7.6 Notice by Private Courier. . . . . . . . . . . . . . . . . 9
3.8 Waiver of Notice . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.8.1 Written Waiver . . . . . . . . . . . . . . . . . . . . . . 9
3.8.2 Waiver by Attendance . . . . . . . . . . . . . . . . . . .10
3.9 Quorum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.10 Manner of Acting . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.11 Presumption of Assent. . . . . . . . . . . . . . . . . . . . . . . 10
3.12 Action by Board or Committees Without a Meeting. . . . . . . . . . 10
3.13 Resignation. . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.14 Removal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.15 Vacancies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
3.16 Minutes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
3.17 Executive and Other Committees . . . . . . . . . . . . . . . . . . .11
3.17.1 Creation of Committees . . . . . . . . . . . . . . . . . .11
3.17.2 Authority of Committees. . . . . . . . . . . . . . . . . .11
3.17.3 Quorum and Manner of Acting. . . . . . . . . . . . . . . .12
3.17.4 Minutes of Meetings. . . . . . . . . . . . . . . . . . . .12
3.17.5 Resignation. . . . . . . . . . . . . . . . . . . . . . . .12
3.17.6 Removal. . . . . . . . . . . . . . . . . . . . . . . . . .12
3.18 Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
SECTION 4. OFFICERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
4.1 Number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
4.2 Appointment and Term of Office . . . . . . . . . . . . . . . . . . .13
4.3 Resignation. . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
4.4 Removal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
4.5 Vacancies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
4.6 Chair of the Board . . . . . . . . . . . . . . . . . . . . . . . . .13
4.7 Chief Executive Officer. . . . . . . . . . . . . . . . . . . . . . .13
4.8 President. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
4.9 Vice President . . . . . . . . . . . . . . . . . . . . . . . . . . .14
4.10 Secretary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
4.11 Treasurer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
4.12 Salaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
SECTION 5. CONTRACTS, LOANS, CHECKS AND DEPOSITS . . . . . . . . . . . . . . .15
5.1 Contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
5.2 Loans to the Corporation . . . . . . . . . . . . . . . . . . . . . .15
5.3 Loans to Directors . . . . . . . . . . . . . . . . . . . . . . . . .15
5.4 Checks, Drafts, Etc. . . . . . . . . . . . . . . . . . . . . . . . .15
5.5 Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
-ii-
<PAGE>
SECTION 6. CERTIFICATES FOR SHARES AND THEIR TRANSFER. . . . . . . . . . . . .15
6.1 Issuance of Shares . . . . . . . . . . . . . . . . . . . . . . . . .15
6.2 Escrow for Shares. . . . . . . . . . . . . . . . . . . . . . . . . .16
6.3 Certificates for Shares. . . . . . . . . . . . . . . . . . . . . . .16
6.4 Stock Records. . . . . . . . . . . . . . . . . . . . . . . . . . . .16
6.5 Restriction on Transfer. . . . . . . . . . . . . . . . . . . . . . .16
6.5.1 Securities Laws. . . . . . . . . . . . . . . . . . . . . .16
6.5.2 Other Restrictions . . . . . . . . . . . . . . . . . . . .16
6.6 Transfer of Shares . . . . . . . . . . . . . . . . . . . . . . . . .16
6.7 Lost or Destroyed Certificates . . . . . . . . . . . . . . . . . . .17
6.8 Transfer Agent and Registrar . . . . . . . . . . . . . . . . . . . .17
6.9 Officer Ceasing to Act . . . . . . . . . . . . . . . . . . . . . . .17
6.10 Fractional Shares. . . . . . . . . . . . . . . . . . . . . . . . . .17
SECTION 7. BOOKS AND RECORDS. . . . . . . . . . . . . . . . . . . . . . . . .17
SECTION 8. FISCAL YEAR. . . . . . . . . . . . . . . . . . . . . . . . . . . .17
SECTION 9. SEAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
SECTION 10. INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . . . .18
10.1 Directors and Officers. . . . . . . . . . . . . . . . . . . . . . .18
10.2 Employees and Other Agents. . . . . . . . . . . . . . . . . . . . .18
10.3 No Presumption of Bad Faith . . . . . . . . . . . . . . . . . . . .18
10.4 Advances of Expenses. . . . . . . . . . . . . . . . . . . . . . . .18
10.5 Enforcement . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
10.6 Nonexclusivity of Rights. . . . . . . . . . . . . . . . . . . . . .19
10.7 Survival of Rights. . . . . . . . . . . . . . . . . . . . . . . . .19
10.8 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19
10.9 Amendments to Law . . . . . . . . . . . . . . . . . . . . . . . . .19
10.10 Savings Clause. . . . . . . . . . . . . . . . . . . . . . . . . . .19
10.11 Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . .19
SECTION 11. AMENDMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
-iii-
<PAGE>
1997 RESTATED BYLAWS
OF
IN FOCUS SYSTEMS, INC.
SECTION 1
OFFICES
The principal office of the Corporation shall be located at the principal
place of business or such other place as the Board of Directors (the "Board")
may designate. The Corporation may have such other offices, either within or
without the State of Oregon, as the Board may designate or as the business of
the Corporation may require from time to time.
SECTION 2
SHAREHOLDERS
2.1 ANNUAL MEETING. The annual meeting of the shareholders shall be held
in the month of April each year, or in such other month as fixed by the Board,
on such date and at such time as fixed by the Board, at the principal office of
the Corporation or at such other place as fixed by the Board, for the purpose of
electing Directors and transacting such other business as may properly come
before the meeting.
2.2 SPECIAL MEETINGS. The Board or the Chair of the Board may call
special meetings of the shareholders for any purpose. The holders of not less
than one-tenth of all the outstanding shares of the Corporation entitled to vote
on any issue proposed to be considered at the proposed special meeting, if they
date, sign and deliver to the Corporation's Secretary a written demand for a
special meeting describing the purpose(s) for which it is to be held, may call a
special meeting of the shareholders for such stated purpose(s).
2.3 PLACE OF MEETING. All meetings shall be held at the principal office
of the Corporation or at such other place as designated by the Board, by any
persons entitled to call a meeting hereunder, or in a waiver of notice signed by
all of the shareholders entitled to vote at the meeting.
2.4 NOTICE OF MEETING.
2.4.1 The Corporation shall cause to be delivered to each
shareholder entitled to notice of or to vote at an annual or special meeting of
shareholders, either personally or by mail, not less than ten (10) nor more than
sixty (60) days before the meeting, written notice stating the date, time and
place of the meeting and, in the case of a special meeting, the purpose(s) for
which the meeting is called.
2.4.2 Notice to a shareholder of an annual or special shareholder
meeting shall be in writing. Such notice, if in comprehensible form, is
effective (a) when mailed, if
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it is mailed postpaid and is correctly addressed to the shareholder's address
shown in the Corporation's then current record of shareholders; or (b) when
received by the shareholder, if it is delivered by telegraph, facsimile
transmission or private courier.
2.4.3 If an annual or special shareholders' meeting is adjourned
to a different date, time, or place, notice need not be given of the new date,
time, or place if the new date, time, or place is announced at the meeting
before adjournment, unless a new record date for the adjourned meeting is or
must be fixed under Section 2.6.1 of these Bylaws or the Oregon Business
Corporation Act.
2.5 WAIVER OF NOTICE.
2.5.1 Whenever any notice is required to be given to any
shareholder under the provisions of these Bylaws, the Articles of Incorporation
or the Oregon Business Corporation Act, a waiver thereof in writing, signed by
the person or persons entitled to such notice, whether before or after the time
stated therein, and delivered to the Corporation for inclusion in the minutes
for filing with the corporate records, shall be deemed equivalent to the giving
of such notice.
2.5.2 The attendance of a shareholder at a meeting waives
objection to lack of, or defect in, notice of such meeting or of consideration
of a particular matter at the meeting, unless the shareholder, at the beginning
of the meeting or prior to consideration of such matter, objects to holding the
meeting, transacting business at the meeting, or considering the matter when
presented at the meeting.
2.6 FIXING OF RECORD DATE FOR DETERMINING SHAREHOLDERS.
2.6.1 For the purpose of determining shareholders entitled to
notice of, or to vote at, any meeting of shareholders or any adjournment
thereof, or shareholders entitled to receive payment of any dividend, or in
order to make a determination of shareholders for any other purpose, the Board
may fix in advance a date as the record date for any such determination. Such
record date shall be not more than seventy (70) 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 is to be taken. If no record
date is fixed for the determination of shareholders entitled to notice of or to
vote at a meeting, or to receive payment of a dividend, the date on which the
notice of meeting is mailed or on which the resolution of the Board declaring
such dividend is adopted, as the case may be, shall be the record date for such
determination. Such determination shall apply to any adjournment of the
meeting, provided such adjournment is not set for a date more than 120 days
after the date fixed for the original meeting.
2.6.2 The record date for the determination of shareholders
entitled to demand a special shareholder meeting shall be the date the first
shareholder signs the demand.
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2.7 SHAREHOLDERS' LIST.
2.7.1 Beginning two (2) business days after notice of a meeting of
shareholders is given, a complete alphabetical list of the shareholders entitled
to notice of such meeting shall be made, arranged by voting group, and within
each voting group by class or series, with the address of and number of shares
held by each shareholder. This record shall be kept on file at the
Corporation's principal office or at a place identified in the meeting notice in
the city where the meeting will be held. On written demand, this record shall
be subject to inspection by any shareholder at any time during normal business
hours. Such record shall also be kept open at such meeting for inspection by
any shareholder.
2.7.2 A shareholder may, on written demand, copy the shareholders'
list at such shareholder's expense during regular business hours, provided that:
(a) Such shareholder's demand is made in good faith and for a
proper purpose;
(b) Such shareholder has described with reasonable particularity
such shareholder's purpose in the written demand; and
(c) The shareholders' list is directly connected with such
shareholder's purpose.
2.8 QUORUM. A majority of the votes entitled to be cast on a matter at a
meeting by a voting group, represented in person or by proxy, shall constitute a
quorum of that voting group for action on that matter at a meeting of the
shareholders. If a quorum is not present for a matter to be acted upon, a
majority of the shares represented at the meeting may adjourn the meeting from
time to time without further notice. If the necessary quorum is present or
represented at a reconvened meeting following such an adjournment, any business
may be transacted that might have been transacted at the meeting as originally
called. The shareholders present at a duly organized meeting may continue to
transact business until adjournment, notwithstanding the withdrawal of enough
shareholders to leave less than a quorum.
2.9 MANNER OF ACTING.
2.9.1 If a quorum exists, action on a matter (other than the
election of Directors) by a voting group is approved if the votes cast within
the voting group favoring the action exceed the votes cast opposing the action,
unless the affirmative vote of a greater number is required by these Bylaws, the
Articles of Incorporation or the Oregon Business Corporation Act.
2.9.2 If a matter is to be voted on by a single group, action on
that matter is taken when voted upon by that voting group. If a matter is to be
voted on by two or more
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voting groups, action on that matter is taken only when voted upon by each of
those voting groups counted separately. Action may be taken by one voting group
on a matter even though no action is taken by another voting group entitled to
vote on such matter.
2.10 PROXIES. A shareholder may vote by proxy executed in writing by the
shareholder or by his or her attorney-in-fact. Such proxy shall be effective
when received by the Secretary or other officer or agent authorized to tabulate
votes at the meeting. A proxy shall become invalid eleven (11) months after the
date of its execution, unless otherwise expressly provided in the proxy. A
proxy for a specified meeting shall entitle the holder thereof to vote at any
adjournment of such meeting but shall not be valid after the final adjournment
thereof.
2.11 VOTING OF SHARES. Each outstanding share entitled to vote shall be
entitled to one vote upon each matter submitted to a vote at a meeting of
shareholders.
2.12 VOTING FOR DIRECTORS. Each shareholder may vote, in person or by
proxy, the number of shares owned by such shareholder that are entitled to vote
at an election of Directors, for as many persons as there are Directors to be
elected and for whose election such shares have a right to vote. Unless
otherwise provided in the Articles of Incorporation, Directors are elected by a
plurality of the votes cast by shares entitled to vote in the election at a
meeting at which a quorum is present.
2.13 ACTION BY SHAREHOLDERS WITHOUT A MEETING. Any action which could be
taken at a meeting of the shareholders may be taken without a meeting if a
written consent setting forth the action so taken is signed by all shareholders
entitled to vote with respect to the subject matter thereof. The action shall
be effective on the date on which the last signature is placed on the consent,
or at such earlier or later time as is set forth therein. Such written consent,
which shall have the same force and effect as a unanimous vote of the
shareholders, shall be inserted in the minute book as if it were the minutes of
a meeting of the shareholders.
2.14 VOTING OF SHARES BY CORPORATION.
2.14.1 SHARES HELD BY ANOTHER CORPORATION. Shares standing in the
name of another corporation may be voted by such officer, agent or proxy as the
bylaws of such other corporation may prescribe, or, in the absence of such
provision, as the board of directors of such corporation may determine;
provided, however, such shares are not entitled to vote if the Corporation owns,
directly or indirectly, a majority of the shares entitled to vote for directors
of such other corporation.
2.14.2 SHARES HELD BY THE CORPORATION. Authorized but unissued
shares shall not be voted or counted for determining whether a quorum exists at
any meeting or counted in determining the total number of outstanding shares at
any given time. Notwithstanding the foregoing, shares of its own stock held by
the Corporation in a fiduciary
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capacity may be counted for purposes of determining whether a quorum exists, and
may be voted by the Corporation.
2.15 ACCEPTANCE OR REJECTION OF SHAREHOLDER VOTES, CONSENTS, WAIVERS AND
PROXY APPOINTMENTS.
2.15.1 DOCUMENTS BEARING NAME OF SHAREHOLDERS. If the name signed
on a vote, consent, waiver or proxy appointment corresponds to the name of a
shareholder, the Secretary or other agent authorized to tabulate votes at the
meeting may, if acting in good faith, accept such vote, consent, waiver or proxy
appointment and give it effect as the act of the shareholder.
2.15.2 DOCUMENTS BEARING NAME OF THIRD PARTIES. If the name signed
on a vote, consent, waiver or proxy appointment does not correspond to the name
of its shareholder, the Secretary or other agent authorized to tabulate votes at
the meeting may nevertheless, if acting in good faith, accept such vote,
consent, waiver or proxy appointment and give it effect as the act of the
shareholder if:
(a) The shareholder is an entity and the name signed purports to
be that of an officer or an agent of the entity;
(b) The name signed purports to be that of an administrator,
executor, guardian or conservator representing the shareholder and, if the
Secretary or other agent requests, acceptable evidence of fiduciary status has
been presented;
(c) The name signed purports to be that of a receiver or trustee
in bankruptcy of the shareholder, and, if the Secretary or other agent requests,
acceptable evidence of this status has been presented;
(d) The name signed purports to be that of a pledgee, beneficial
owner or attorney-in-fact of the shareholder and, if the Secretary or other
agent requests, acceptable evidence of the signatory's authority to sign has
been presented; or
(e) Two or more persons are the shareholder as co-tenants or
fiduciaries and the name signed purports to be the name of at least one of the
co-owners and the person signing appears to be acting on behalf of all co-
owners.
2.15.3 REJECTION OF DOCUMENTS. The Secretary or other agent
authorized to tabulate votes at the meeting is entitled to reject a vote,
consent, waiver or proxy appointment if such agent, acting in good faith, has
reasonable basis for doubt about the validity of the signature on it or about
the signatory's authority to sign for the shareholder.
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2.16 SUBJECT OF MEETINGS. To be properly brought before an annual meeting
of shareholders, business must be either (i) specified in the notice of the
meeting (or any supplement or amendment thereto) given by or at the direction of
the Board, (ii) otherwise brought before the meeting by or at the direction of
the Board, or (iii) otherwise brought before the meeting by a shareholder who is
a shareholder of record at the time of giving of the notice provided for in this
Section 2.16, who shall be entitled to vote at such meeting and who complies
fully with all of the notice procedures and other requirements set forth in this
Section 2.16. In addition to any other applicable requirements, for business to
be properly brought before an annual meeting of shareholders by a shareholder,
the shareholder must have given timely notice thereof in writing to the
Secretary of the Corporation. To be timely, a shareholder's notice shall be
delivered to or mailed and received at the principal executive offices of the
Corporation not less than sixty (60) calendar days nor more than ninety (90)
calendar days prior to the first anniversary of the preceding year's annual
meeting; provided, however, that in the event that the date of the annual
meeting is changed by more than thirty (30) calendar days from such anniversary
date, notice by the shareholder to be timely must be so received not later than
the close of business on the tenth (10th) calendar day following the earlier of
the day on which notice of the date of the meeting was mailed or public
disclosure was made. A shareholder's notice to the Corporation's Secretary of
business proposed to be conducted at any annual or special meeting of
shareholders shall set forth as to each matter the shareholder proposes to bring
before such meeting (i) a brief description of the business desired to be
brought before the meeting and the reasons for conducting such business at the
meeting, (ii) the name and record address of the shareholder proposing such
business and the name and address of the beneficial owner, if any, on whose
behalf the proposal is made, (iii) the class, series and number of shares of the
capital stock of the Corporation which are owned beneficially and of record by
such shareholder and by the beneficial owner, if any, on whose behalf the
proposal is made, and (iv) any material interest of such shareholder and the
beneficial owner, if any, on whose behalf the proposal is made in such business.
Notwithstanding anything in these Bylaws to the contrary, no business shall be
conducted at a meeting of shareholders except in accordance with the procedures
set forth in this Section 2.16. The officer of the Corporation presiding at a
meeting of shareholders (the "Presiding Officer") shall determine whether the
proposed business is properly brought before the meeting in accordance with the
provisions of this Section 2.16. If the Presiding Officer should determine that
the proposed business is not properly brought before the meeting, the Presiding
Officer shall state such determination to the meeting, whereupon any such
business not properly brought before the meeting shall not be transacted or
otherwise brought before the meeting. Notwithstanding the foregoing provisions
of this Section 2.16, a shareholder shall also comply with all applicable
requirements of the Securities Exchange Act of 1934, as amended, and the rules
and regulations thereunder with respect to the matters set forth herein.
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SECTION 3
BOARD OF DIRECTORS
3.1 GENERAL POWERS. The business and affairs of the Corporation shall be
managed by the Board, except as may be otherwise provided in these Bylaws, the
Articles of Incorporation or the Oregon Business Corporation Act.
3.2 NUMBER, TENURE AND QUALIFICATIONS. The authorized number of Directors
of the Corporation shall be no less than three and no more than seven. The
current number of Directors shall be within such maximum and minimum limits as
determined, or as amended from time to time, by resolution adopted by the Board.
The maximum or minimum number of Directors may be changed from time to time by
amendment to these Bylaws, but no decrease in the number of Directors shall
shorten the term of any incumbent Director. Each Director shall hold office
until the next annual meeting of shareholders or until removed. If a Director's
term expires, however, the Director shall continue to serve until the Director's
successor shall have been elected and qualified, or until there is a decrease in
the number of Directors. Directors need not be shareholders of the Corporation
or residents of the State of Oregon.
3.3 NOMINATIONS OF DIRECTORS. Only persons who are nominated in
accordance with the following procedures shall be eligible for election as
Directors. Nominations of persons for election to the Board of the Corporation
at any meeting of shareholders may be made by or at the direction of the Board,
by any committee of persons appointed by the Board or at the meeting by any
shareholder of the Corporation who is a shareholder of record at the time of
giving notice provided for in this Section 3.3, who shall be entitled to vote
for the election of directors at the meeting and who complies fully with all of
the notice procedures and other requirements set forth in this Section 3.3 and
the procedures and requirements set forth in the Oregon Business Corporation
Act. Nominations by any shareholder shall be made pursuant to timely notice in
writing to the Secretary of the Corporation. To be timely, a shareholder's
notice shall be delivered to or mailed and received at the principal executive
offices of the Corporation (a) in the case of an annual meeting, not less than
sixty (60) calendar days nor more than ninety (90) calendar days prior to the
first anniversary of the preceding year's annual meeting; provided, however,
that in the event that the date of the annual meeting is changed by more than
thirty (30) calendar days from such anniversary date, notice by the shareholder
to be timely must be so received not later than the close of business on the
tenth (10th) calendar day following the earlier of the day on which notice of
the date of the meeting was mailed or public disclosure was made, and (b) in the
case of a special meeting at which Directors are to be elected, not later than
the earlier of (i) the close of business on the tenth (10th) calendar day
following the earlier of the day on which notice of the date of the meeting was
mailed or public disclosure was made or (ii) the close of business on the fifth
(5th) calendar day before the date of the meeting. Such shareholder's notice to
the Secretary or a written demand from shareholders pursuant to Section 60.204
of the Oregon Revised Statutes shall set forth (i) as to each person whom such
shareholders propose to nominate for election or reelection as a Director,
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(a) the name, age, business address and residence address of the person, (b) the
principal occupation or employment of the person, (c) the class and number of
shares of capital stock of the Corporation which are beneficially owned by the
person, and (d) all other information relating to the person that is or would be
required to be disclosed in a solicitation for proxies for election of Directors
pursuant to the Rules and Regulations of the Securities and Exchange Commission
under Section 14 of the Securities Exchange Act of 1934, as amended (including
such person's written consent to being named in the proxy statement as a nominee
and to serving as a Director if elected); (ii) as to the shareholders giving
such notice or demand (a) the name and record address of the shareholders, (b)
the class and number of shares of capital stock of the Corporation which are
beneficially owned by each such shareholder and also which are owned of record
by each such shareholder and (c) any material interest or relationship each such
shareholder has in or with the proposed nominee; and (iii) as to each beneficial
owner, if any, on whose behalf the nomination is made, (a) the name and address
of such person, (b) the class and number of shares of capital stock of the
Corporation which are beneficially owned by such person and (c) any material
interest or relationship such person has in or with the proposed nominee. The
Corporation may require any proposed nominee to furnish such other information
as may reasonably be required by the Corporation to determine the eligibility of
such proposed nominee to serve as a Director of the Corporation. No person
shall be eligible for election as a Director of the Corporation unless nominated
in accordance with the procedures set forth herein. The Presiding Officer shall
determine whether the nomination is made in accordance with the foregoing
procedures. If the Presiding Officer should determine that the nomination was
not made in accordance with the foregoing procedures, the Presiding Officer
shall state such determination to the meeting, whereupon any such defective
nomination shall be disregarded and not otherwise brought before the meeting.
Notwithstanding the foregoing provisions of this Section 3.3, a shareholder
shall also comply with all applicable requirements of the Securities Exchange
Act of 1934, as amended, and the rules and regulations thereunder with respect
to the matters set forth herein.
3.4 ANNUAL AND REGULAR MEETINGS. An annual Board meeting shall be held
without further notice at the principal office of the Corporation on the day
immediately following the annual meeting of shareholders, or at such other date,
time and place as fixed by the Board. By resolution, the Board, or any
committee thereof, may specify the time and place for holding regular meetings
thereof without other notice than such resolution.
3.5 SPECIAL MEETINGS. Special meetings of the Board or any committee
designated by the Board may be called by or at the request of the Chair of the
Board, the Chief Executive Officer, the President, or any two Directors, and, in
the case of any special meeting of any committee designated by the Board, by the
Chair thereof. The person or persons authorized to call special meetings may
fix any place either within or without the State of Oregon as the place for
holding any special Board or committee meeting called by them.
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3.6 MEETINGS BY TELECOMMUNICATIONS. Members of the Board or any committee
designated by the Board may participate in a meeting of such Board or committee
by use of any means of communication by which all persons participating may
simultaneously hear each other during the meeting. Participation by such means
shall be deemed presence in person at the meeting.
3.7 NOTICE OF SPECIAL MEETING. Notice of a special Board or committee
meeting stating the date, time and place of the meeting shall be given to a
Director in writing or orally by telephone or in person as set forth below.
Neither the business to be transacted at, nor the purpose of, any special
meeting need be specified in the notice of such meeting.
3.7.1 PERSONAL DELIVERY. If delivery is by personal service, the
notice shall be effective if delivered at such address at least one day before
the meeting.
3.7.2 DELIVERY BY MAIL. If notice is delivered by mail, the
notice shall be deemed effective if deposited in the official government mail at
least five days before the meeting properly addressed to a Director at his or
her address shown on the records of the Corporation with postage prepaid.
3.7.3 DELIVERY BY TELEGRAPH. If notice is delivered by telegraph,
the notice shall be deemed effective if the content thereof is delivered to the
telegraph company by such time that telegraph company guarantees delivery at
least one day before the meeting.
3.7.4 ORAL NOTICE. If notice is delivered orally, by telephone or
in person, the notice shall be effective if personally given to a Director at
least one day before the meeting.
3.7.5 NOTICE BY FACSIMILE TRANSMISSION. If notice is delivered by
facsimile transmission, the notice shall be deemed effective if the content
thereof is transmitted to the office of a Director, at the facsimile number
shown on the records of the Corporation, at least one day before the meeting,
and receipt is either confirmed by confirming transmission equipment or
acknowledged by the receiving office.
3.7.6 NOTICE BY PRIVATE COURIER. If notice is delivered by
private courier, the notice shall be deemed effective if delivered to the
courier, properly addressed and prepaid, by such time that the courier
guarantees delivery at least one day before the meeting.
3.8 WAIVER OF NOTICE.
3.8.1 WRITTEN WAIVER. Whenever any notice is required to be given
to any Director under the provisions of these Bylaws, the Articles of
Incorporation or the Oregon Business Corporation Act, a waiver thereof in
writing, executed at any time, specifying the meeting for which notice is
waived, signed by the person or persons entitled to such notice,
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and filed with the minutes or corporate records, shall be deemed equivalent to
the giving of such notice.
3.8.2 WAIVER BY ATTENDANCE. The attendance of a Director at a
Board or committee meeting shall constitute a waiver of notice of such meeting,
unless the Director, at the beginning of the meeting, or promptly upon such
Director's arrival, objects to holding the meeting or transacting any business
at the meeting and does not thereafter vote for or assent to action taken at the
meeting.
3.9 QUORUM. A majority of the number of Directors fixed by or in the
manner provided by these Bylaws shall constitute a quorum for the transaction of
business at any Board meeting.
3.10 MANNER OF ACTING. The act of the majority of the Directors present at
a Board or committee meeting at which there is a quorum shall be the act of the
Board or committee, unless the vote of a greater number is required by these
Bylaws, the Articles of Incorporation or the Oregon Business Corporation Act.
3.11 PRESUMPTION OF ASSENT. A Director of the Corporation present at a
Board or committee meeting at which action on any corporate matter is taken
shall be deemed to have assented to the action taken unless such Director
objects at the beginning of the meeting, or promptly upon such Director's
arrival, to holding the meeting or transacting business at the meeting; or such
Director's dissent is entered in the minutes of the meeting; or such Director
delivers a written notice of dissent or abstention to such action with the
presiding officer of the meeting before the adjournment thereof; or such
Director forwards such notice by registered mail to the Secretary of the
Corporation immediately after the adjournment of the meeting. A Director who
voted in favor of such action may not thereafter dissent or abstain.
3.12 ACTION BY BOARD OR COMMITTEES WITHOUT A MEETING. Any action which
could be taken at a meeting of the Board or of any committee appointed by the
Board may be taken without a meeting if a written consent setting forth the
action so taken is signed by each Director or by each committee member. The
action shall be effective when the last signature is placed on the consent,
unless the consent specifies an earlier or later date. Such written consent,
which shall have the same effect as a unanimous vote of the Directors or such
committee, shall be inserted in the minute book as if it were the minutes of a
Board or committee meeting.
3.13 RESIGNATION. Any Director may resign at any time by delivering
written notice to the Chair of the Board, the Board, or to the registered office
of the Corporation. Such resignation shall take effect at the time specified in
the notice, or if no time is specified, upon delivery. Unless otherwise
specified therein, the acceptance of such resignation shall not be necessary to
make it effective. Once delivered, a notice of resignation is irrevocable
unless revocation is permitted by the Board.
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3.14 REMOVAL. One or more members of the Board (including the entire
Board) may be removed at a meeting of shareholders called expressly for that
purpose, provided that the notice of such meeting states that the purpose, or
one of the purposes, of the meeting is such removal. A member of the Board may
be removed with or without cause, unless the Articles of Incorporation permit
removal for cause only, by a vote of the holders of a majority of the shares
then entitled to vote on the election of the Director(s). A Director may be
removed only if the number of votes cast to remove the Director exceeds the
number of votes cast to not remove the Director. If a Director is elected by a
voting group of shareholders, only the shareholders of that voting group may
participate in the vote to remove such Director.
3.15 VACANCIES. Any vacancy occurring on the Board, including a vacancy
resulting from an increase in the number of Directors, may be filled by the
shareholders, by the Board, by the affirmative vote of a majority of the
remaining Directors though less than a quorum of the Board, or by a sole
remaining Director. A Director elected to fill a vacancy shall be elected for
the unexpired term of his or her predecessor in office; except that the term of
a Director elected by the Board to fill a vacancy expires at the next
shareholders' meeting at which Directors are elected. Any Directorship to be
filled by reason of an increase in the number of Directors may be filled by the
affirmative vote of a majority of the number of Directors fixed by the Bylaws
prior to such increase for a term of office continuing only until the next
election of Directors by the shareholders. Any Directorship not so filled by
the Directors shall be filled by election at the next annual meeting of
shareholders or at a special meeting of shareholders called for that purpose.
If the vacant Directorship is filled by the shareholders and was held by a
Director elected by a voting group of shareholders, then only the holders of
shares of that voting group are entitled to vote to fill such vacancy. A
vacancy that will occur at a specific later date by reason of a resignation
effective at such later date or otherwise may be filled before the vacancy
occurs, but the new Director may not take office until the vacancy occurs.
3.16 MINUTES. The Board shall keep minutes of its meetings and shall cause
them to be recorded in books kept for that purpose.
3.17 EXECUTIVE AND OTHER COMMITTEES.
3.17.1 CREATION OF COMMITTEES. The Board, by resolution adopted by
a majority of the number of Directors fixed in the manner provided by these
Bylaws, may appoint standing or temporary committees, including an Executive
Committee, from its own number and consisting of no less than two (2) Directors.
The Board may invest such committee(s) with such powers as it may see fit,
subject to such conditions as may be prescribed by the Board, these Bylaws, the
Articles of Incorporation and the Oregon Business Corporation Act.
3.17.2 AUTHORITY OF COMMITTEES. Each committee shall have and may
exercise all of the authority of the Board to the extent provided in the
resolution of the Board
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designating the committee and any subsequent resolutions pertaining thereto and
adopted in like manner, except that no such committee shall have the authority
to: (a) authorize distributions, except as may be permitted by Section
3.17.2(g) of these Bylaws; (b) approve or propose to shareholders actions
required by the Oregon Business Corporation Act to be approved by shareholders;
(c) fill vacancies on the Board or any committee thereof; (d) adopt, amend or
repeal these Bylaws; (e) amend the Articles of Incorporation; (f) approve a plan
of merger not requiring shareholder approval; or (g) authorize or approve
reacquisition of shares, except within limits prescribed by the Board.
3.17.3 QUORUM AND MANNER OF ACTING. A majority of the number of
Directors composing any committee of the Board, as established and fixed by
resolution of the Board, shall constitute a quorum for the transaction of
business at any meeting of such committee.
3.17.4 MINUTES OF MEETINGS. All committees so appointed shall keep
regular minutes of their meetings and shall cause them to be recorded in books
kept for that purpose.
3.17.5 RESIGNATION. Any member of any committee may resign at any
time by delivering written notice thereof to the Board, the Chair of the Board
or the Corporation. Any such resignation shall take effect at the time
specified in the notice, or if no time is specified, upon delivery. Unless
otherwise specified therein, the acceptance of such resignation shall not be
necessary to make it effective. Once delivered, a notice of resignation is
irrevocable unless revocation is permitted by the Board.
3.17.6 REMOVAL. The Board may remove from office any member of any
committee elected or appointed by it, but only by the affirmative vote of not
less than a majority of the number of Directors fixed by or in the manner
provided by these Bylaws.
3.18 COMPENSATION. By Board resolution, Directors and committee members
may be paid their expenses, if any, of attendance at each Board or committee
meeting, or a fixed sum for attendance at each Board or committee meeting, or a
stated salary as Director or a committee member, or a combination of the
foregoing. No such payment shall preclude any Director or committee member from
serving the Corporation in any other capacity and receiving compensation
therefor.
SECTION 4
OFFICERS
4.1 NUMBER. The Officers of the Corporation shall be a President and a
Secretary, each of whom shall be appointed by the Board. One or more Vice
Presidents, a Treasurer and such other Officers and assistant Officers,
including a Chair of the Board and/or a Chief Executive Officer, may be
appointed by the Board; such Officers and assistant Officers to hold office for
such period, have such authority and perform such duties as are
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provided in these Bylaws or as may be provided by resolution of the Board. Any
Officer may be assigned by the Board any additional title that the Board deems
appropriate. The Board may delegate to any Officer or agent the power to
appoint any such subordinate Officers or agents and to prescribe their
respective terms of office, authority and duties. Any two or more offices may
be held by the same person.
4.2 APPOINTMENT AND TERM OF OFFICE. The Officers of the Corporation shall
be appointed annually by the Board at the Board meeting held after the annual
meeting of the shareholders. If the appointment of Officers is not made at such
meeting, such appointment shall be made as soon thereafter as a Board meeting
conveniently may be held. Unless an Officer dies, resigns, or is removed from
office, he or she shall hold office until the next annual meeting of the Board
or until his or her successor is appointed.
4.3 RESIGNATION. Any Officer may resign at any time by delivering written
notice to the Corporation. Any such resignation shall take effect at the time
specified in the notice, or if no time is specified, upon delivery. Unless
otherwise specified therein, the acceptance of such resignation shall not be
necessary to make it effective. Once delivered, a notice of resignation is
irrevocable unless revocation is permitted by the Board.
4.4 REMOVAL. Any Officer or agent appointed by the Board may be removed
by the Board, with or without cause, but such removal shall be without prejudice
to the contract rights, if any, of the person so removed. Appointment of an
Officer or agent shall not of itself create contract rights.
4.5 VACANCIES. A vacancy in any office because of death, resignation,
removal, disqualification, creation of a new office or any other cause may be
filled by the Board for the unexpired portion of the term, or for a new term
established by the Board. If a resignation is made effective at a later date,
and the Corporation accepts such future effective date, the Board may fill the
pending vacancy before the effective date, if the Board provides that the
successor does not take office until the effective date.
4.6 CHAIR OF THE BOARD. If appointed, the Chair of the Board shall
perform such duties as shall be assigned to him or her by the Board from time to
time and shall preside over meetings of the Board and shareholders unless
another Officer is appointed or designated by the Board as Chair of such
meeting.
4.7 CHIEF EXECUTIVE OFFICER. If appointed, the Chief Executive Officer
shall be the chief executive Officer of the Corporation unless some other
Officer is so designated by the Board, shall preside over meetings of the Board
and shareholders in the absence of a Chair of the Board and, subject to the
Board's control, shall supervise and control all of the assets, business and
affairs of the Corporation. The Chief Executive Officer shall have authority to
sign deeds, mortgages, bonds, contracts, or other instruments, except when the
signing and execution thereof have been expressly delegated by the Board or by
these Bylaws to some other Officer or agent of the Corporation, or are required
by law to be otherwise
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<PAGE>
signed or executed by some other Officer or in some other manner. In general,
the Chief Executive Officer shall perform all duties incident to the office of
Chief Executive Officer and such other duties as are prescribed by the Board
from time to time.
4.8 PRESIDENT. In the absence of a Chief Executive Officer or in the
event of the death of the Chief Executive Officer or his or her inability to
act, the President shall perform the duties of the Chief Executive Officer,
except as may be limited by resolution of the Board, with all the powers of and
subject to all the restrictions upon the Chief Executive Officer. The President
shall have, to the extent authorized by the Chief Executive Officer or the
Board, the same powers as the Chief Executive Officer to sign deeds, mortgages,
bonds, contracts or other instruments. The President shall perform such other
duties as from time to time may be assigned to him or her by the Chief Executive
Officer or the Board.
4.9 VICE PRESIDENT. In the event of the death of the President or his or
her inability to act, the Vice President (or if there is more than one Vice
President, the Vice President who was designated by the Board as the successor
to the President, or if no Vice President is so designated, the Vice President
first appointed to such office) shall perform the duties of the President,
except as may be limited by resolution of the Board, with all the powers of and
subject to all the restrictions upon the President. Vice Presidents shall have,
to the extent authorized by the Chief Executive Officer, the President, or the
Board, the same powers as the President to sign deeds, mortgages, bonds,
contracts or other instruments. Vice Presidents shall perform such other duties
as from time to time may be assigned to them by the Chief Executive Officer, the
President, or the Board.
4.10 SECRETARY. The Secretary shall: (a) prepare and keep the minutes of
meetings of the shareholders and the Board in one or more books provided for
that purpose; (b) see that all notices are duly given in accordance with the
provisions of these Bylaws or as required by law; (c) be responsible for custody
of the corporate records and seal of the Corporation; (d) keep registers of the
post office address of each shareholder and Director; (e) have general charge of
the stock transfer books of the Corporation; and (f) in general perform all
duties incident to the office of Secretary and such other duties as from time to
time may be assigned to him or her by the Chief Executive Officer, the President
or by the Board. In the absence of the Secretary, an Assistant Secretary may
perform the duties of the Secretary.
4.11 TREASURER. If required by the Board, the Treasurer shall give a bond
for the faithful discharge of his or her duties in such amount and with such
surety or sureties as the Board shall determine. The Treasurer shall have
charge and custody of and be responsible for all funds and securities of the
Corporation; receive and give receipts for moneys due and payable to the
Corporation from any source whatsoever, and deposit all such moneys in the name
of the Corporation in banks, trust companies or other depositories selected in
accordance with the provisions of these Bylaws; and in general perform all of
the duties incident to the office of the Treasurer and such other duties as from
time to time may be
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<PAGE>
assigned to him or her by the Chief Executive Officer, the President or by the
Board. In the absence of the Treasurer, an Assistant Treasurer may perform the
duties of the Treasurer.
4.12 SALARIES. The salaries of the Officers shall be fixed from time to
time by the Board or by any person or persons to whom the Board has delegated
such authority. No Officer shall be prevented from receiving such salary by
reason of the fact that he or she is also a Director of the Corporation.
SECTION 5
CONTRACTS, LOANS, CHECKS AND DEPOSITS
5.1 CONTRACTS. The Board may authorize any Officer or Officers, or agent
or agents, to enter into any contract or execute and deliver any instrument in
the name of and on behalf of the Corporation. Such authority may be general or
confined to specific instances.
5.2 LOANS TO THE CORPORATION. No loans shall be contracted on behalf of
the Corporation and no evidences of indebtedness shall be issued in its name
unless authorized by a resolution of the Board. Such authority may be general
or confined to specific instances.
5.3 LOANS TO DIRECTORS. The Corporation shall not lend money to or
guarantee the obligation of a Director unless: (a) the particular loan or
guarantee is approved by a majority of the votes represented by the outstanding
voting shares of all classes, voting as a single voting group, excluding the
votes of the shares owned by or voted under the control of the benefitted
Director; or (b) the Board determines that the loan or guarantee benefits the
Corporation and either approves the specific loan or guarantee or a general plan
authorizing the loans and guarantees. The fact that a loan or guarantee is made
in violation of this provision shall not affect the borrower's liability on the
loan.
5.4 CHECKS, DRAFTS, ETC. All checks, drafts or other orders for the
payment of money, notes or other evidences of indebtedness issued in the name of
the Corporation shall be signed by such Officer or Officers, or agent or agents,
of the Corporation and in such manner as is from time to time determined by
resolution of the Board.
5.5 DEPOSITS. All funds of the Corporation not otherwise employed shall
be deposited from time to time to the credit of the Corporation in such banks,
trust companies or other depositories as the Board may select.
SECTION 6
CERTIFICATES FOR SHARES AND THEIR TRANSFER
6.1 ISSUANCE OF SHARES. No shares of the Corporation shall be issued
unless authorized by the Board, which authorization shall include the maximum
number of shares to
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<PAGE>
be issued and the consideration to be received for each share. Before the
Corporation issues shares, the Board shall determine that the consideration
received or to be received for such shares is adequate. Such determination by
the Board shall be conclusive insofar as the adequacy of consideration for the
issuance of shares relates to whether the shares are validly issued, fully paid
and nonassessable.
6.2 ESCROW FOR SHARES. The Board may authorize the placement in escrow of
shares issued for a contract for future services or benefits or a promissory
note, or may authorize other arrangements to restrict the transfer of shares,
and may authorize the crediting of distributions in respect of such shares
against their purchase price, until the services are performed, the note is paid
or the benefits received. If the services are not performed, the note is not
paid, or the benefits are not received, the Board may cancel, in whole or in
part, such shares placed in escrow or restricted and such distributions
credited.
6.3 CERTIFICATES FOR SHARES. Certificates representing shares of the
Corporation shall be in such form as shall be determined by the Board. Such
certificates shall be signed by any two of the following officers: the Chair of
the Board, the President, any Vice President, the Treasurer, the Secretary or
any Assistant Secretary. Any or all of the signatures on a certificate may be
facsimiles if the certificate is manually signed on behalf of a transfer agent
or a registrar other than the Corporation itself or an employee of the
Corporation. All certificates shall be consecutively numbered or otherwise
identified.
6.4 STOCK RECORDS. The stock transfer books shall be kept at the
registered office or principal place of business of the Corporation or at the
office of the Corporation's transfer agent or registrar. The name and address
of each person to whom certificates for shares are issued, together with the
class and number of shares represented by each such certificate and the date of
issue thereof, shall be entered on the stock transfer books of the Corporation.
The person in whose name shares stand on the books of the Corporation shall be
deemed by the Corporation to be the owner thereof for all purposes.
6.5 RESTRICTION ON TRANSFER.
6.5.1 SECURITIES LAWS. Except to the extent that the Corporation
has obtained an opinion of counsel acceptable to the Corporation that transfer
restrictions are not required under applicable securities laws, or has otherwise
satisfied itself that such transfer restrictions are not required, all
certificates representing shares of the Corporation shall bear conspicuously on
the front or back of the certificate a legend or legends describing the
restriction or restrictions.
6.5.2 OTHER RESTRICTIONS. In addition, the front or back of all
certificates shall include conspicuous written notice of any further
restrictions which may be imposed on the transferability of such shares.
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<PAGE>
6.6 TRANSFER OF SHARES. Transfer of shares of the Corporation shall be
made only on the stock transfer books of the Corporation pursuant to
authorization or document of transfer made by the holder of record thereof or by
his or her legal representative, who shall furnish proper evidence of authority
to transfer, or by his or her attorney-in-fact authorized by power of attorney
duly executed and filed with the Secretary of the Corporation. All certificates
surrendered to the Corporation for transfer shall be cancelled and no new
certificate shall be issued until the former certificates for a like number of
shares shall have been surrendered and cancelled.
6.7 LOST OR DESTROYED CERTIFICATES. In the case of a lost, destroyed or
mutilated certificate, a new certificate may be issued therefor upon such terms
and indemnity to the Corporation as the Board may prescribe.
6.8 TRANSFER AGENT AND REGISTRAR. The Board may from time to time appoint
one or more Transfer Agents and one or more Registrars for the shares of the
Corporation, with such powers and duties as the Board shall determine by
resolution.
6.9 OFFICER CEASING TO ACT. In case any officer who has signed or whose
facsimile signature has been placed upon a stock certificate shall have ceased
to be such officer before such certificate is issued, it may be issued by the
Corporation with the same effect as if the signer were such officer at the date
of its issuance.
6.10 FRACTIONAL SHARES. The Corporation shall not issue certificates for
fractional shares.
SECTION 7
BOOKS AND RECORDS
The Corporation shall keep correct and complete books and records of
account, stock transfer books, minutes of the proceedings of its shareholders
and Board and such other records as may be necessary or advisable.
SECTION 8
FISCAL YEAR
The fiscal year of the Corporation shall be the calendar year, provided
that if a different fiscal year is at any time selected for purposes of federal
income taxes, the fiscal year shall be the year so selected.
SECTION 9
SEAL
The seal of the Corporation, if any, shall consist of the name of the
Corporation and the state of its incorporation.
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<PAGE>
SECTION 10
INDEMNIFICATION
10.1 DIRECTORS AND OFFICERS. The Corporation shall indemnify its directors
and officers to the fullest extent not prohibited by law.
10.2 EMPLOYEES AND OTHER AGENTS. The Corporation shall have the power to
indemnify its employees and other agents to the fullest extent not prohibited by
law.
10.3 NO PRESUMPTION OF BAD FAITH. The termination of any 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 the person reasonably believed to be in
or not opposed to the best interests of this Corporation, or, with respect to
any criminal proceeding, that the person had reasonable cause to believe that
the conduct was unlawful.
10.4 ADVANCES OF EXPENSES. The expenses incurred by a director or officer
in any proceeding shall be paid by the Corporation in advance at the written
request of the director or officer, if the director or officer:
10.4.1 Furnishes the Corporation a written affirmation of such
person's good faith belief that such person is entitled to be indemnified by the
Corporation; and
10.4.2 Furnishes the Corporation a written undertaking to repay such
advance to the extent that it is ultimately determined by a court that such
person is not entitled to be indemnified by the Corporation. Such advances
shall be made without regard to the person's ability to repay such expenses and
without regard to the person's ultimate entitlement to indemnification under
this Bylaw or otherwise.
10.5 ENFORCEMENT. Without the necessity of entering into an express
contract, all rights to indemnification and advances under this Bylaw shall be
deemed to be contractual rights and be effective to the same extent and as if
provided for in a contract between the Corporation and the director or officer
who serves in such capacity at any time while this Bylaw and any other
applicable law, if any, are in effect. Any right to indemnification or advances
granted by this Bylaw to a director or officer shall be enforceable by or on
behalf of the person holding such right in any court of competent jurisdiction
if (a) the claim for indemnification or advances is denied, in whole or in part,
or (b) no disposition of such claim is made within ninety (90) days of request
thereof. The claimant in such enforcement action, if successful in whole or in
part, shall be entitled to be also paid the expense of prosecuting the claim.
It shall be a defense to any such action (other than an action brought to
enforce a claim for expenses incurred in connection with any proceeding in
advance of its final disposition when the required affirmation and undertaking
have been tendered to the Corporation) that the claimant has not met the
standards of conduct which makes it permissible under the law for the
Corporation to indemnify the claimant, but the burden of
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<PAGE>
proving such defense shall be on the Corporation. Neither the failure of the
Corporation (including its Board of Directors, independent legal counsel or its
shareholders) to have made a determination prior to the commencement of such
action that indemnification of the claimant is proper in the circumstances
because the claimant has met the applicable standard of conduct, nor an actual
determination by the Corporation (including its Board of Directors, independent
legal counsel or its shareholders) that the claimant has not met such applicable
standard of conduct, shall be a defense to the action or create a presumption
that the claimant has not met the applicable standard of conduct.
10.6 NONEXCLUSIVITY OF RIGHTS. The rights conferred on any person by this
Bylaw shall not be exclusive of any other right which such person may have or
hereafter acquire under any statute, provision of articles of incorporation,
bylaws, agreement, vote of shareholders or disinterested directors or otherwise,
both as to action in the person's official capacity and as to action in another
capacity while holding office. The Corporation is specifically authorized to
enter into individual contracts with any or all of its directors, officers,
employees or agents respecting indemnification and advances to the fullest
extent not prohibited by law.
10.7 SURVIVAL OF RIGHTS. The rights conferred on any person by this Bylaw
shall continue as to a person who has ceased to be a director, officer, employee
or other agent and shall inure to the benefit of the heirs, executors and
administrators of such a person.
10.8 INSURANCE. To the fullest extent not prohibited by law, the
Corporation, upon approval by the Board of Directors, may purchase insurance on
behalf of any person required or permitted to be indemnified pursuant to this
Bylaw.
10.9 AMENDMENTS TO LAW. For purposes of this Bylaw, the meaning of "law"
within the phrase "to the fullest extent not prohibited by law" shall include,
but not be limited to, the Oregon Business Corporation Act, as the same exists
on the date hereof or as it may be amended; provided, however, that in the case
of any such amendment, such amendment shall apply only to the extent that it
permits the Corporation to provide broader indemnification rights than the Act
permitted the Corporation to provide prior to such amendment.
10.10 SAVINGS CLAUSE. If this Bylaw or any portion thereof shall be
invalidated on any ground by any court of competent jurisdiction, the
Corporation shall indemnify each director, officer or other agent to the fullest
extent permitted by any applicable portion of this Bylaw that shall not have
been invalidated, or by any other applicable law.
10.11 CERTAIN DEFINITIONS. For purposes of this Section, the following
definitions shall apply:
10.11.1 The term "proceeding" shall be broadly construed and shall
include, without limitation, the investigation, preparation, prosecution,
defense, settlement and appeal
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<PAGE>
of any threatened, pending or completed action, suit or proceeding, whether
brought in the right of the Corporation or otherwise and whether civil,
criminal, administrative or investigative, in which the director or officer may
be or may have been involved as a party or otherwise by reason of the fact that
the director or officer is or was a director or officer of the Corporation or is
or was serving at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise.
10.11.2 The term "expenses" shall be broadly construed and shall
include, without limitation, all costs, charges and expenses (including fees and
disbursements of attorneys, accountants and other experts) actually and
reasonably incurred by a director or officer in connection with any proceeding,
all expenses of investigations, judicial or administrative proceedings or
appeals, and any expenses of establishing a right to indemnification under these
Bylaws, but shall not include amounts paid in settlement, judgments or fines.
10.11.3 "Corporation" shall mean In Focus Systems, Inc. and any
successor corporation thereof.
10.11.4 Reference to a "director," "officer," "employee" or "agent"
of the Corporation shall include, without limitation, situations where such
person is serving at the request of the Corporation as a director, officer,
employee, trustee or agent of another corporation, partnership, joint venture,
trust or other enterprise.
10.11.5 References to "other enterprises" shall include employee
benefit plans. References to "fines" shall include any excise taxes assessed on
a person with respect to any employee benefit plan. References to "serving at
the request of the Corporation" shall include any service as a director,
officer, employee or agent of the Corporation which imposes duties on, or
involves services by, such director, officer, employee or agent with respect to
an employee benefit plan, its participants, or beneficiaries. A person who
acted in good faith and in a manner the person reasonably believed to be in the
interest of the participants and beneficiaries of an employee benefit plan shall
be deemed to have acted in a manner "not opposed to the best interests of the
Corporation" as referred to in this Bylaw.
SECTION 11
AMENDMENTS
These Bylaws may be altered, amended or repealed and new Bylaws may be
adopted by the Board at any regular or special meeting of the Board; provided,
however, that the shareholders, in amending or repealing a particular Bylaw, may
provide expressly that the Board may not amend or repeal that Bylaw. The
shareholders may also make, alter, amend and repeal the Bylaws of the
Corporation at any annual meeting or at a special meeting called for that
purpose. All Bylaws made by the Board may be amended, repealed, altered or
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<PAGE>
modified by the shareholders at any regular or special meeting called for that
purpose. The foregoing Bylaws were adopted by the Board of Directors of the
Corporation on February 25, 1997 and the Secretary of the Corporation was
empowered to authenticate such Bylaws by his signature below.
___________________________________
Michael D. Yonker, Secretary
Page 21 - 1997 RESTATED BYLAWS
<PAGE>
EXHIBIT 10.6
AMENDMENT NO. 9
TO
IN FOCUS SYSTEMS, INC. 1988 COMBINATION STOCK OPTION PLAN
Section 2 of the In Focus Systems, 1988 Combination Stock Option Plan, as
previously amended on June 17, 1991, is hereby deleted in its entirety and the
following new Section 2 is substituted in lieu thereof:
"2. ADMINISTRATION OF THE PLAN.
A. ADMINISTRATION. The Plan shall be administered by the Board of
Directors of the Company (the "Board") or a committee or committees (which term
includes subcommittees) appointed by, and consisting of two or more members of,
the Board. The Board or the committee, if appointed, will be referred to in
this Plan as the "Administrative Committee." When selecting the membership of
any committee which will grant options to any persons subject or likely to
become subject to Section 16 under the Exchange Act, the Board shall consider
the provisions regarding (a) "outside directors," as contemplated by Section
162(m) of the Code, and (b) "nonemployee directors," as contemplated by Rule
16b-3 under the Exchange Act. The Board may delegate the responsibility for
administering the Plan with respect to designated classes of eligible persons to
different committees, subject to such limitations as the Board deems
appropriate. If more than one committee is appointed, references to the
Administrative Committee shall mean the committee which has authority to
administer options to the class of employees in question. Committee members
shall serve for such term as the Board may determine subject to removal by the
Board at any time.
B. AUTHORITY OF ADMINISTRATIVE COMMITTEE. The Administrative Committee
shall have the authority (a) to administer the Plan in accordance with its
express terms; (b) to determine all questions arising in connection with the
administration, interpretation and application of the Plan, including all
questions relating to the value of the Common Stock; (c) to correct any defect,
supply any information, or reconcile any inconsistency in such manner and to
such extent as shall be deemed necessary or advisable to carry out the purposes
of the Plan; (d) to prescribe, amend and rescind rules and regulations relating
to the administration of the Plan; (e) to determine the duration and purposes of
leaves of absence which may be granted to participants without constituting a
termination of employment for purposes of the Plan; (f) to select those
employees, directors and consultants to whom Options shall be granted; (g) to
determine whether the Company shall grant ISOs or Non-Qualified Stock Options,
the terms and provisions of the respective option agreements to be entered into
with such persons (which need not be identical with the terms of any other such
agreement and which may include, without limitation, provisions granting to one
or more officers of the Company, a proxy covering the shares acquired by the
Optionee upon exercise of one or more Options), when such Options shall be
granted, and the number of shares of Common Stock subject to each Option; and
(h) to make all other determinations necessary or advisable for administration
of the Plan. Exercise of the foregoing authority by the Administrative
Committee shall be consistent with the intent that the ISOs issued under the
Plan be qualified under the terms of Section 422 of the Code, and that the Non-
Qualified Stock Options shall not be so qualified. All determinations made by
the Administrative Committee in good faith on matters referred to in this
Paragraph 2 B shall be final, conclusive and binding upon all persons. The
Administrative Committee shall have all powers necessary or appropriate to
accomplish its duties under the Plan."
<PAGE>
EXHIBIT 10.14
IN FOCUS SYSTEMS, INC.
1997 EXECUTIVE BONUS PLAN
CEO, CHAIRMAN OF THE BOARD
POLICY: It is In Focus Systems' policy to provide the Corporate CEO and
Chairman of the Board the opportunity for increased compensation
based upon In Focus Systems' overall achievement of Corporate
profit goals.
GUIDELINES: 1. Adoption of Plan
This Executive Bonus Plan (the "Plan") was adopted by the Board
of Directors of In Focus Systems, Inc. (the "Company") effective
January 24, 1997.
2. Purpose of Plan and Effective Date
The purpose of the Plan is to establish the terms and conditions
under which the Company will pay Executive bonuses for the
calendar year beginning January 1, 1997, and ending December 31,
1997.
Unless the Board of Directors specifically provides otherwise,
all Executive bonuses will be awarded solely in accordance with
this Plan.
3. Eligibility
Eligibility is limited to the CEO and Chairman of the Board of
the Company.
Eligible Executives must be in active pay status for an entire
quarter to be paid profit sharing for that quarter. The
Executive must also be in active pay status when profit sharing
checks are distributed in order to receive that quarter's profit
sharing payout.
In the event that an Executive is with the Company for less than
one year, a pro-rated bonus will be calculated based on number of
months employed. No annual bonus will be paid if an Executive
joins the Company after October 1, 1997. Executives must be
actively employed on the last day of the year to be eligible for
any annual bonus amount.
<PAGE>
4. Plan Components
(a) Profit Sharing
The first component of the bonus plan shall be the payment of the
profit sharing, paid quarterly. The percentage to be paid
(multiplied by the Executive's quarterly salary) shall be at the
same rate as calculated for other employees in accordance with
the currently approved In Focus Systems Profit Sharing Program.
The payment to be made to the Executives shall not reduce the
amount to be paid to other employees, i.e., shall not come from
the profit-sharing pool calculated for other employees.
(b) Annual Bonus
The second component of the bonus plan shall be an annual bonus
paid at year end based on: the Company's 1997 financial
performance (Profit Before Tax). This payout shall be calculated
as follows:
- The targeted bonus shall be 60 percent and shall be
calculated using the following formula:
Bonus = (P) * (60%)
where:
-- P = Corporate PBT performance (vs. Operating Plan)
calculated by dividing actual 1997 Profit Before
Tax (PBT) plus income/loss from joint venture
activity by Operating Plan PBT plus planned
income/loss from joint venture activity.
- Other limitations/constraints regarding calculation of the
bonus are as follows:
-- Bonus = 0 if P is less than 75%
-- Maximum bonus payout shall be 200% of the target bonus
amount.
-- An accelerator shall apply to above plan performance
starting at 110% of plan. For every percent above
110%, 1.5% shall be added to the bonus amount (see
attachment for examples).
<PAGE>
5. Payment of Executive Bonus
Payment of the Executive Bonus Plan will be based on audited
year-end results, and will be distributed within 30 days
after the audit has been completed.
6. Discretion of the Board of Directors
Nothing in this Plan shall prohibit the Board of Directors
from awarding a bonus to one or more Executives in addition
to the Executive Bonus awarded pursuant to this Plan.
The Board of Directors reserves the right to modify, change
or rescind this policy at any time at its sole discretion as
is required to meet the Company's objectives.
<PAGE>
EXHIBIT 10.15
IN FOCUS SYSTEMS, INC.
1997 EXECUTIVE BONUS PLAN - SENIOR VICE PRESIDENT
POLICY: It is In Focus Systems' policy to provide Corporate Senior Vice
Presidents the opportunity for increased compensation based upon:
1) In Focus Systems' overall achievement of Corporate profit
goals, and 2) performance of each Senior Vice President against
his individual goals/objectives.
GUIDELINES: 1. Adoption of Plan
This Senior Vice President Bonus Plan (the "Plan") was
adopted by the Board of Directors of In Focus Systems, Inc.
(the "Company") effective January 24, 1997.
2. Purpose of Plan and Effective Date
The purpose of the Plan is to establish the terms and
conditions under which the Company will pay Senior Vice
President bonuses for the calendar year beginning January 1,
1997 and ending December 31, 1997.
Unless the Board of Directors specifically provides
otherwise, all Senior Vice President bonuses will be awarded
solely in accordance with this Plan.
3. Eligibility
Eligibility is limited to the Senior Vice President of the
Company.
Eligible Senior Vice Presidents must be in active pay status
for an entire quarter to be paid profit sharing for that
quarter. The Senior Vice President must also be in active
pay status when profit sharing checks are distributed in
order to receive that quarter's profit sharing payout.
In the event that a Senior Vice President is with the
Company for less than one year, a pro-rated bonus will be
calculated based on number of months employed. No annual
bonus will be paid if a Senior Vice President joins the
Company after October 1, 1997. Senior Vice Presidents must
be actively employed on the last day of the year to be
eligible for any annual bonus amount.
<PAGE>
4. Plan Components
(a) Profit Sharing
The first component of the bonus plan shall be the payment
of the profit sharing, paid quarterly. The percentage to be
paid (multiplied by the Senior Vice President's quarterly
salary) shall be at the same rate as calculated for other
employees in accordance with the currently approved In Focus
Systems Profit Sharing Program. The payment to be made to
the Vice Presidents shall not reduce the amount to be paid
to other employees, i.e., shall not come from the profit-
sharing pool calculated for other employees.
(b) Annual Bonus
The second component of the bonus plan shall be an annual
bonus paid at year end based on: 1) the Company's 1997
financial performance (Profit Before Tax), and 2) the
performance of the Senior Vice President against his
individual goals/objectives. This payout shall be
calculated as follows:
- The targeted bonus shall be 35 percent and shall
be calculated using the following formula:
Bonus = (.75P + .25G) (35%)
where:
-- P = Corporate PBT performance (vs. Operating
Plan) calculated by dividing actual 1997
Profit Before Tax (PBT) plus income/loss from
joint venture activity by Operating Plan PBT
plus planned income/loss from joint venture
activity.
-- G = Individual performance (vs. 1997 goals)
determined by the CEO, by comparing the
individual Senior Vice President's
performance against his major 1997 goals.
- Other limitations/constraints regarding
calculation of the bonus are as follows:
-- Profit Component of Bonus = 0 if P is less
than .75
-- Individual Goals Component of Bonus = 0 if G
is less than .75
-- Maximum bonus component for individual
performance = 130%.
<PAGE>
-- Maximum bonus component for PBT component =
200%.
-- If Profit is less than 75% of Plan but
greater than 49.99% of Plan, the Executive
shall receive a reduced bonus amount based on
what the Individual Performance component
would have otherwise been. The reduced
amount shall be calculated by multiplying the
Individual Performance component by the
percentage of Profit actually achieved.
-- If Profit is less than 50%, no payouts will
be made from either component.
5. Payment of Senior Vice President Bonus
Payment of the Senior Vice President Bonus Plan will be
based on audited year-end results, and will be distributed
within 30 days after the audit has been completed.
6. Discretion of the Board of Directors
Nothing in this Plan shall prohibit the Board of Directors
from awarding a bonus to one or more Senior Vice Presidents
in addition to the Senior Vice President Bonus awarded
pursuant to this Plan.
The Board of Directors reserves the right to modify, change
or rescind this policy at any time at its sole discretion as
is required to meet the Company's objectives.
Any annual bonus greater than $100,000 will require approval
of the Corporate Compensation Committee.
<PAGE>
EXHIBIT 10.16
IN FOCUS SYSTEMS, INC.
1997 EXECUTIVE BONUS PLAN - VICE PRESIDENT
POLICY: It is In Focus Systems' policy to provide Corporate Vice
Presidents the opportunity for increased compensation based upon:
1) In Focus Systems' overall achievement of Corporate profit
goals, and 2) performance of each Vice President against his/her
individual goals/objectives.
GUIDELINES: 1. Adoption of Plan
This Vice President Bonus Plan (the "Plan") was adopted by
the Board of Directors of In Focus Systems, Inc. (the
"Company") effective January 24, 1997.
2. Purpose of Plan and Effective Date
The purpose of the Plan is to establish the terms and
conditions under which the Company will pay Vice President
bonuses for the calendar year beginning January 1, 1997, and
ending December 31, 1997.
Unless the Board of Directors specifically provides
otherwise, all Vice President bonuses will be awarded solely
in accordance with this Plan.
3. Eligibility
Eligibility is limited to all Vice Presidents of the
Company.
Eligible Vice Presidents must be in active pay status for an
entire quarter to be paid profit sharing for that quarter.
The Vice President must also be in active pay status when
profit sharing checks are distributed in order to receive
that quarter's profit sharing payout.
In the event that a Vice President is with the Company for
less than one year, a pro-rated bonus will be calculated
based on number of months employed. No annual bonus will be
paid if a Vice President joins the Company after October 1,
1997. Vice Presidents must be actively employed on the last
day of the year to be eligible for any annual bonus amount.
<PAGE>
4. Plan Components
(a) Profit Sharing
The first component of the bonus plan shall be the payment
of the profit sharing, paid quarterly. The percentage to be
paid (multiplied by the Vice President's quarterly salary)
shall be at the same rate as calculated for other employees
in accordance with the currently approved In Focus Systems
Profit Sharing Program. The payment to be made to the Vice
Presidents shall not reduce the amount to be paid to other
employees, i.e., shall not come from the profit-sharing pool
calculated for other employees.
(b) Annual Bonus
The second component of the bonus plan shall be an annual
bonus paid at year end based on: 1) the Company's 1997
financial performance (Profit Before Tax), and 2) the
performance of each Vice President against his/her
individual goals/objectives. This payout shall be
calculated as follows:
- The targeted bonus shall be 30 percent and shall be
calculated using the following formula:
Bonus = (.75P + .25G) (30%)
where:
-- P = Corporate PBT performance (vs. Operating Plan)
calculated by dividing actual 1997 Profit Before
Tax (PBT) plus income/loss from joint venture
activity by Operating Plan PBT plus planned
income/loss from joint venture activity.
-- G = Individual performance (vs. 1997 goals)
determined by the CEO, by comparing the individual
Vice President's performance against his/her major
1997 goals.
- Other limitations/constraints regarding calculation of
the bonus are as follows:
-- Profit Component of Bonus = 0 if P is less than
.75
-- Individual Goals Component of Bonus = 0 if G is
less than .75
-- Maximum bonus component for individual performance
= 130%.
<PAGE>
-- Maximum bonus component for PBT component = 200%.
-- If Profit is less than 75% of Plan but greater
than 49.99% of Plan, the Executive shall receive a
reduced bonus amount based on what the Individual
Performance component would have otherwise been.
The reduced amount shall be calculated by
multiplying the Individual Performance component
by the percentage of Profit actually achieved.
-- If Profit is less than 50%, no payouts will be
made from either component.
5. Payment of Vice President Bonus
Payment of the Vice President Bonus Plan will be based on
audited year-end results, and will be distributed within 30
days after the audit has been completed.
6. Discretion of the Board of Directors
Nothing in this Plan shall prohibit the Board of Directors
from awarding a bonus to one or more Vice Presidents in
addition to the Vice President Bonus awarded pursuant to
this Plan.
The Board of Directors reserves the right to modify, change
or rescind this policy at any time at its sole discretion as
is required to meet the Company's objectives.
Any annual bonus greater than $100,000 will require approval
of the Corporate Compensation Committee.
<PAGE>
EXHIBIT 11
IN FOCUS SYSTEMS, INC.
CALCULATIONS OF NET INCOME PER SHARE
<TABLE>
<CAPTION>
Year Ended December 31,
------------------------------------------------------------------------------------------------
1996 1995 1994
--------------------------- --------------------------- ----------------------------
Primary Fully Diluted Primary Fully Diluted Primary Fully Diluted
--------------------------- --------------------------- ----------------------------
<S> <C> <C> <C> <C> <C> <C>
Weighted Average Shares
Outstanding for the Period 10,861,457 10,861,457 10,944,240 10,944,240 11,256,047 11,256,047
Dilutive Common Stock
Options Using the Treasury
Stock Method 418,364 420,146 499,372 697,040 444,824 728,280
--------------------------- --------------------------- --------------------------
Total Shares Used for Per
Share Calculations 11,279,821 11,281,603 11,443,612 11,641,280 11,700,871 11,984,327
--------------------------- --------------------------- ---------------------------
--------------------------- --------------------------- ---------------------------
Net Income $ 13,132,000 $ 13,132,000 $ 22,692,000 $ 22,692,000 $ 10,408,000 $ 10,408,000
--------------------------- --------------------------- ---------------------------
--------------------------- --------------------------- ---------------------------
Net Income Per Share $ 1.16 $ 1.16 $ 1.98 $ 1.95 $ 0.89 $ 0.87
--------------------------- --------------------------- ---------------------------
--------------------------- --------------------------- ---------------------------
</TABLE>
<PAGE>
EXHIBIT 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As Independent public accountants, we hereby consent to the incorporation of our
reports dated January 23, 1997, included in this Form 10-K into the Company's
previously filed Registration Statements Nos. 33-82522 and 333-15235 on
Form S-8.
ARTHUR ANDERSEN LLP
Portland, Oregon,
March 10, 1997
<PAGE>
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, PETER D. BEHRENDT,
hereby constitutes and appoints JOHN V. HARKER and MICHAEL D. YONKER, or either
of them, his true and lawful attorneys-in-fact and agents, each with full power
of substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign the Form 10-K Annual Report of In Focus Systems,
Inc., an Oregon corporation, for fiscal year ended December 31, 1996 and any
amendments thereto, and to file this Power of Attorney and the Form 10-K , with
all exhibits thereto, and other documents in connection therewith with the
Securities and Exchange Commission and the National Association of Securities
Dealers, Inc., granting unto each of said attorneys-in-fact and agents 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 each of said attorneys-in-fact and agents, or his substitute or
substitutes, may do or cause to be done by virtue hereof.
Dated this 25th day of February, 1997.
/s/ PETER D. BEHRENDT, Director
----------------------
Peter D. Behrendt
<PAGE>
EXHIBIT 24.2
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, MICHAEL R. HALLMAN,
hereby constitutes and appoints JOHN V. HARKER and MICHAEL D. YONKER, or either
of them, his true and lawful attorneys-in-fact and agents, each with full power
of substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign the Form 10-K Annual Report of In Focus Systems,
Inc., an Oregon corporation, for fiscal year ended December 31, 1996 and any
amendments thereto, and to file this Power of Attorney and the Form 10-K , with
all exhibits thereto, and other documents in connection therewith with the
Securities and Exchange Commission and the National Association of Securities
Dealers, Inc., granting unto each of said attorneys-in-fact and agents 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 each of said attorneys-in-fact and agents, or his substitute or
substitutes, may do or cause to be done by virtue hereof.
Dated this 25th day of February, 1997.
/s/ MICHAEL R. HALLMAN, Director
-----------------------
Michael R. Hallman
<PAGE>
EXHIBIT 24.3
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, JACK D. KUEHLER,
hereby constitutes and appoints JOHN V. HARKER and MICHAEL D. YONKER, or either
of them, his true and lawful attorneys-in-fact and agents, each with full power
of substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign the Form 10-K Annual Report of In Focus Systems,
Inc., an Oregon corporation, for fiscal year ended December 31, 1996 and any
amendments thereto, and to file this Power of Attorney and the Form 10-K , with
all exhibits thereto, and other documents in connection therewith with the
Securities and Exchange Commission and the National Association of Securities
Dealers, Inc., granting unto each of said attorneys-in-fact and agents 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 each of said attorneys-in-fact and agents, or his substitute or
substitutes, may do or cause to be done by virtue hereof.
Dated this 25th day of February, 1997.
/s/ JACK D. KUEHLER, Director
--------------------
Jack D. Kuehler
<PAGE>
EXHIBIT 24.4
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, JOHN R. DOUGERY,
hereby constitutes and appoints JOHN V. HARKER and MICHAEL D. YONKER, or either
of them, his true and lawful attorneys-in-fact and agents, each with full power
of substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign the Form 10-K Annual Report of In Focus Systems,
Inc., an Oregon corporation, for fiscal year ended December 31, 1996 and any
amendments thereto, and to file this Power of Attorney and the Form 10-K , with
all exhibits thereto, and other documents in connection therewith with the
Securities and Exchange Commission and the National Association of Securities
Dealers, Inc., granting unto each of said attorneys-in-fact and agents 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 each of said attorneys-in-fact and agents, or his substitute or
substitutes, may do or cause to be done by virtue hereof.
Dated this 25th day of February, 1997.
/s/ JOHN R. DOUGERY, Director
--------------------
John R. Dougery
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 33,935
<SECURITIES> 4,263
<RECEIVABLES> 55,289
<ALLOWANCES> 3,942
<INVENTORY> 22,715
<CURRENT-ASSETS> 122,188
<PP&E> 14,553
<DEPRECIATION> 13,692
<TOTAL-ASSETS> 138,250
<CURRENT-LIABILITIES> 29,079
<BONDS> 738
0
0
<COMMON> 47,912
<OTHER-SE> 60,048
<TOTAL-LIABILITY-AND-EQUITY> 138,250
<SALES> 258,475
<TOTAL-REVENUES> 258,475
<CGS> 185,313
<TOTAL-COSTS> 185,313
<OTHER-EXPENSES> 56,232
<LOSS-PROVISION> 1,040
<INTEREST-EXPENSE> 45
<INCOME-PRETAX> 18,422
<INCOME-TAX> 5,622
<INCOME-CONTINUING> 13,132
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 13,132
<EPS-PRIMARY> 1.16
<EPS-DILUTED> 1.16
</TABLE>
