<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
/X/ Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the quarterly period ended July 1, 1995 or
/ / Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from _______ to
_______ .
Commission file number 0-17885
B E I E L E C T R O N I C S, I N C.
(Exact name of Registrant as specified in its charter)
Delaware 71-0455756
-------------------------------- ------------------------------------
(State of incorporation) (I.R.S. Employer Identification No.)
One Post Street, Suite 2500
San Francisco, California 94104
----------------------------------------
(Address of principal executive offices)
(415) 956-4477
-------------------------------
(Registrant's telephone number)
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 the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common Stock: $.001 Par Value, 6,778,504 shares as of July 13, 1995
Page 1 of 16
<PAGE> 2
BEI ELECTRONICS , INC. AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
PART 1. FINANCIAL INFORMATION PAGE
--------------------- ----
<S> <C> <C>
Item 1. Financial Statements
Condensed Consolidated Balance Sheets--July 1, 1995 and October 1, 1994 3
Condensed Consolidated Statements of Operations--Quarter and Nine 4
Months ended July 1, 1995 and July 2, 1994
Condensed Consolidated Statements of Cash Flows--Nine Months ended July 5
1, 1995 and July 2, 1994
Notes to Condensed Consolidated Financial Statements--July 1, 1995 6
Item 2. Management's Discussion and Analysis of Financial Condition and Results of 11
Operations
PART II. OTHER INFORMATION
-----------------
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Amended By-Laws of the Company as of May 25, 1995 15
Fourth Amendment to Credit Agreement 15
Financial Data Schedule 15
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Company during the
quarter ended July 1, 1995.
SIGNATURES 16
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</TABLE>
Page 2 of 16
<PAGE> 3
BEI ELECTRONICS, INC. AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
July 1, October 1,
1995 1994
(Unaudited) (Note)
(dollars in thousands)
--------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Cash and cash equivalents $8,945 $4,197
Trade receivables - net 19,813 18,503
Inventories - net (See Note B) 26,860 33,185
Other current assets 3,210 4,903
-------- --------
Total current assets 58,828 60,788
Property, plant and equipment - net 27,993 29,270
Acquired Technology (See Note D) 8,168 5,621
Goodwill 4,906 5,156
Other assets - net 10,446 11,597
-------- --------
$110,341 $112,432
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Trade accounts payable $4,700 $7,826
Accrued expenses and other liabilities 14,802 11,951
Federal and state income taxes 86 --
Current portion of long-term debt 294 822
-------- --------
Total current liabilities 19,882 20,599
Long-term debt, less current portion 30,191 30,421
Deferred income taxes and other liabilities 3,065 3,583
Stockholders' equity less treasury stock 57,203 57,829
-------- --------
$110,341 $112,432
======== ========
</TABLE>
See notes to condensed consolidated financial statements.
Note: The balance sheet at October 1, 1994 has been derived from the audited
consolidated balance sheet at that date.
Page 3 of 16
<PAGE> 4
BEI ELECTRONICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Quarter Ended Nine Months Ended
----------------------------------------------------
July 1, July 2, July 1, July, 2
1995 1994 1995 1994
(dollars in thousands except per share amounts)
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net sales $36,634 $41,699 $109,863 $99,401
Cost of sales 25,776 30,309 80,403 69,914
----------------------------------------------------
10,858 11,390 29,460 29,487
Selling, general and administrative
expenses 8,335 8,768 25,260 26,653
Research, development and related
expenses 1,273 1,812 3,601 5,137
----------------------------------------------------
Income (loss) from operations 1,250 810 599 (2,303)
Interest expense 612 557 1,890 1,622
Other income 141 29 813 837
----------------------------------------------------
Income (loss) before income taxes 779 282 (478) (3,088)
Provision (benefit) for income taxes 376 105 (34) (1,221)
----------------------------------------------------
Net income (loss) $403 $177 ($444) ($1,867)
====================================================
Earnings (loss) per common share and
common share equivalents $0.06 $0.03 ($0.07) ($0.28)
===================================================
Weighted average shares outstanding 7,017 6,822 6,746 6,694
===================================================
Dividends per common share $0.02 $0.02 $0.06 $0.06
===================================================
</TABLE>
See notes to condensed consolidated financial statements.
Page 4 of 16
<PAGE> 5
BEI ELECTRONICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
-------------------------------------
July 1, July, 2
1995 1994
(dollars in thousands)
-------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net cash provided (used) by operating activities $8,998 ($1,379)
Cash flows from investing activities:
Purchases of property, plant and
equipment (2,970) (8,210)
(Decrease) Increase in other assets 8 (1,139)
------ -------
Net cash used in investing activities (2,962) (9,349)
Cash flows from financing activities:
Borrowings from line of credit 6,000 --
Payments on line of credit (6,000) --
Proceeds from long term debt -- 12,200
Payments on long term debt (928) (1,750)
Proceeds from issuance of common stock 178 289
Purchase of treasury stock (133) (171)
Payment of cash dividends (405) (399)
------ -------
Net cash (used) provided by financing
activities (1,288) 10,169
------ -------
Net increase (decrease) in cash and cash equivalents 4,748 (559)
Cash and cash equivalents at beginning of period 4,197 1,572
------ -------
Cash and cash equivalents at end of period $8,945 $1,013
====== =======
</TABLE>
See notes to condensed consolidated financial statements.
Page 5 of 16
<PAGE> 6
BEI ELECTRONICS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
July 1, 1995
NOTE A -- BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for
a fair presentation have been included. Operating results for the interim
periods presented are not necessarily indicative of the results that may be
expected for the year ending September 30, 1995. For further information,
refer to the consolidated financial statements and footnotes thereto in the
Company's annual report on Form 10-K for the year ended October 1, 1994.
NOTE B--INVENTORIES
<TABLE>
<CAPTION>
July 1, October 1,
1995 1994
(dollars in thousands)
-------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Finished products $1,573 $2,515
Work in process 5,674 5,570
Materials 9,486 9,047
Costs incurred under long-term contracts,
including U.S. Government contracts 29,454 36,054
Unapplied progress payments (19,327) (20,001)
------- -------
Net inventories $26,860 $33,185
======== =======
</TABLE>
Page 6 of 16
<PAGE> 7
NOTE C--EARNINGS PER COMMON SHARE AND COMMON SHARE EQUIVALENTS
<TABLE>
<CAPTION>
Quarter Ended Nine Months Ended
-----------------------------------------------
July 1, July, 2 July 1, July 2,
1995 1994 1995 1994
(dollars in thousands except per share amounts)
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Weighted average shares outstanding 6,796 6,685 6,746 6,694
Net effect of dilutive stock options
based on the treasury stock method 221 137 -- --
-----------------------------------------------
Total weighted average shares outstanding 7,017 6,822 6,746 6,694
===============================================
Net income (loss) $403 $177 ($444) ($1,867)
===============================================
Earnings (loss) per common share and common share
equivalents $0.06 $0.03 ($0.07) ($0.28)
===============================================
</TABLE>
Earnings per common share and common share equivalents are computed by dividing
net income by the weighted average number of shares of common stock and common
stock equivalents outstanding during the period. Loss per common share is
based on the weighted average number of common shares only, as any assumption
of conversion of options would be antidilutive.
NOTE D--CONTINGENCIES AND LITIGATION
In connection with the acquisition of assets from Systron Donner Corporation
during fiscal 1990, BEI Systron Donner Company assumed an obligation to pay
former shareholders of General Precision Industries (GPI) $4.3 million if
certain levels of confirmed orders and shipments are achieved for products
developed using technology acquired from GPI in 1986 under a license agreement
which expires in 2003. The technology acquired was assigned a value of $ 5.6
million for the purchase price allocation for the acquisition.
In September of 1991, the Licensor of the patent on which the Company's quartz
technology is based advised the Company that royalties in excess of the amounts
previously paid by the Company were due. The amount of royalties involved was
approximately $400,000. The Company advised the Licensor that based on its
understanding of the license agreement no additional amounts were due. The
Licensor alleged that nonpayment of the royalties due would give the Licensor
the right to terminate the license agreement. The parties were unable to
resolve these differences. Accordingly, the Company elected to exercise the
provision of the license agreement which required arbitration of any disputes
between the parties to the agreement.
Page 7 of 16
<PAGE> 8
In June of 1993, the Company and the Licensor filed briefs with the arbitration
Panel. The Licensor alleged in its brief that the amount of royalties,
milestone payments and accrued interest due as of September 30, 1992 was
approximately $10.0 million (including the $4.3 million described above), and
asked the arbitration Panel to rule that the license could be terminated based
on noncompliance by the Company with the terms of the license agreement.
The Company has asked the arbitration Panel to rule that the amounts of the
royalties paid by the Company had been properly determined by the Company, that
the original license agreement should be reformed to reduce the royalties due
on future sales as a result of failure by the Licensor to disclose certain
matters which significantly impacted the Company's timely ability to employ the
licensed patent on production units and that the license was not subject to
termination.
The arbitration process is ongoing. The arbitration Panel bifurcated the
issues in the arbitration, and issued an interim ruling in February 1995. In
that interim ruling, which will become final at the close of the arbitration,
the Panel concluded that the license agreement was not subject to termination,
that non-recurring engineering revenues were not royalty-bearing, and that $1
million of the $4.3 million discussed above is due only if certain conditions
are met in the future. The Panel also concluded that the Company is entitled
to ownership of an accelerometer that the former Shareholders developed.
Payment of the $3.3 million balance will depend on the Panel's ruling on the
Company's request for an equitable offset and on other factors. The second
phase of the arbitration will involve quantification of additional royalty
amounts due for unit sales of product using the acquired technology, and will
also involve other matters including the Company's request for an equitable
offset and parties' respective claims for attorneys' fees. Management has
vigorously defended its rights under the license agreement, and while the final
outcome of this matter cannot be determined with certainty, management
believes, taking all factors into account and after consultation with legal
counsel, that this matter will not result in a material adverse impact on the
financial position of the Company.
During a vendor survey conducted by BEI Defense Systems Company in the first
quarter of fiscal 1994, a component used in the HYDRA 70 rocket motor was
identified as being produced by a process that differed from the one that the
vendor had certified. Subsequent to the survey and BEI's evaluation of
alternative acceptable processes, BEI's customer, the U.S. Government, was
notified of the potentially non-conforming material. The customer, as required
by applicable contract provisions, notified Justice Department and Defense
Department investigators. Management also conducted an internal investigation
to determine the facts and appropriateness of follow-up actions. Due to these
investigations, delivery of certain completed rockets motors was delayed
beginning in late December 1993. Subsequently, the customer agreed to accept
the completed but undelivered rocket motors and the Company agreed to replace
the affected parts under warranty. During the fourth quarter of fiscal 1994,
the Company began rework under warranty and substantial deliveries of rocket
motors were completed prior to year end.
Page 8 of 16
<PAGE> 9
For previously delivered rocket motors, the customer has conducted extensive
tests on the potentially non-conforming part to determine whether required
levels of performance and reliability are achieved by the affected part. On
the basis of Government test results disclosed to the Company during June 1995,
there is no evidence that the non-conforming materials as delivered by the
Company are inferior to materials produced by the approved process. The report
concluded that the materials will perform acceptably and that there is no need
to restrict the service life of the rockets as manufactured by the Company.
The outcome of the Justice Department portion of the investigation is not
presently determinable. No provision has been made in the accompanying
financial statements for any liability that may result from this matter.
In October 1993, the State of California filed a first amended complaint
against a division of the Company and fifty-two other defendants. The
complaint seeks recovery of response costs incurred by the State at a waste oil
recycling facility in Commerce, California (the "Site").
The Company has joined a group of defendants who are potentially parties for
the Site (the "PRP Group"). The PRP Group is proceeding with analysis of past
work performed at the Site and preparing a Remedial Action Plan for the Site.
Currently, the estimated cost of the remedial actions proposed for the Site
range from $500,000 to $1,200,000. The PRP Group is also conducting settlement
negotiations with the State. Since filing its First Amended Complaint, the
State has claimed that its past costs associated with the Site are $3,100,000.
The division of the Company against which the claim is asserted was acquired
from Systron Donner Corporation in 1990. In connection with that acquisition,
Systron Donner agreed to indemnify the Company against any claims, damages and
expenses in excess of $100,000 arising in connection with certain environmental
matters. Management believes such indemnification will encompass this claim.
While the outcome of this matter cannot be determined with certainty,
management believes that the ultimate resolution will not have a material
adverse impact on the financial position of the Company.
In October 1993, CooperSurgical, Inc., a subsidiary of The Cooper Companies,
filed a complaint in the Chancery Division of the Superior Court of New Jersey
for unspecified damages alleging unfair competition due to actions by BEI
Medical Systems, Richard Turner, its president, a former employee of The Cooper
Companies, and others. On May 16, 1994, the court granted a partial summary
judgment in favor of the plaintiff and issued an injunction against the
defendants restraining them from selling certain products until June 20, 1996.
In September 1994, BEI Medical Systems filed a motion to vacate the May 16,
1994 order. On November 28, 1994, the court vacated the restraint order.
Management has vigorously defended its rights in this action and believes after
discussion with legal counsel that the CooperSurgical claims are exaggerated.
Expert witnesses for BEI have prepared a formal response to the CooperSurgical
damage claims which was submitted in February 1995. BEI's experts stated that
if CooperSurgical were entitled to damages, those
Page 9 of 16
<PAGE> 10
damages would total less than $100,000, and would be more than offset by BEI
Medical Systems' counterclaim against CooperSurgical. A trial date of November
13, 1995 has been set. While the outcome of this matter cannot be determined
at this time, management believes, taking known factors into account and after
consultation with legal counsel, that this matter will not result in a material
adverse impact on the financial position of the Company.
The Company has pending various legal actions arising in the normal course of
business. None of these legal actions are expected to have a material effect
on the Company's operating results or financial condition.
Page 10 of 16
<PAGE> 11
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following table sets forth, for the fiscal periods indicated, the
percentage of net sales represented by certain items in the Company's
Consolidated Statements of Operations.
<TABLE>
<CAPTION>
Quarter Ended Nine Months Ended
----------------------------------------------------
July 1, July 2, July 1, July 2,
1995 1994 1995 1994
--------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net sales 100.0% 100.0% 100.0% 100.0%
Cost of sales 70.4 72.7 73.2 70.3
----- ----- ----- -----
Gross profit 29.6 27.3 26.8 29.7
Operating expenses
Selling, general and administrative
expenses 22.7 21.0 23.0 26.8
Research, development and related
expenses 3.5 4.3 3.3 5.2
----- ----- ----- -----
Income (loss) from operations 3.4 1.9 0.5 (2.3)
Interest expense 1.7 1.3 1.6 1.6
Other income 0.4 0.1 0.7 0.8
----- ----- ----- -----
Income (loss) before income taxes 2.1 0.7 (0.4) (3.1)
Provision (credit) for income taxes 1.0 0.3 0.0 (1.2)
----- ----- ----- -----
Net income (loss) 1.1% 0.4% (0.4)% (1.9)%
===== ===== ===== =====
</TABLE>
QUARTER ENDED JULY 1, 1995 AND JULY 2, 1994
Net sales for the quarter ended July 1, 1995 decreased $5.1 million or 12.1%
from the same period in fiscal 1994.
Defense Systems segment net sales decreased $8.8 million or 45.2% in the third
quarter of fiscal 1995 compared to the same period in the prior year. The
decrease was primarily related to the higher than normal shipments in the third
quarter of fiscal 1994 which resulted from shipments which had been on hold
during the first half of fiscal 1994.
In January 1995, the Company was advised that the U.S. Army's fiscal 1996 to
fiscal 1998 HYDRA 70 Systems procurement had been awarded to a competing
bidder. The award has not yet been finalized due to ongoing protests by the
Company's joint bidder, Alliant Techsystems, and another unsuccessful bidder.
Shortly before filing this report, the Company received preliminary information
from Alliant Techsystems indicating that its protest of the Hydra 70
procurement would be upheld. The information available was not sufficient to
enable BEI management to determine what effect this ruling will have on the
Company's HYDRA 70 business. The HYDRA 70 Systems contract represented greater
than 90 percent of Defense Systems segment revenue during fiscal 1994 and
a similar
Page 11 of 16
<PAGE> 12
level through the third quarter of fiscal 1995. The existing HYDRA 70 backlog
of approximately $39 million which is scheduled for shipments into fiscal 1996
represents a similar portion of the total Defense Systems backlog.
As the HYDRA 70 Systems contract nears completion in fiscal 1996, revenues of
the Defense Systems segment can be expected to decline substantially unless
there is a change in the Army's announced plan.
Sensors & Systems segment sales volume increased $3.7 million or 18.6% from the
third quarter of 1994. The higher net sales were due primarily to increases in
several commercial product lines, specifically industrial and automotive
products and the timing of deliveries under government contracts.
Consolidated cost of sales as a percentage of net sales was lower in the third
quarter of fiscal 1995 versus the comparable period of fiscal 1994. Defense
Systems segment volume was only half that of the prior year causing its higher
cost of sales percentage to less significantly impact the consolidated results.
Offsetting this, cost of sales as a percentage of net sales in the Sensors and
Systems segment experienced an increase over the prior year due primarily to
increased costs on certain government funded development contracts.
The Company's gross profit margins from sales to the U.S. Government for
military and space products are generally lower than gross profit margins from
sales of commercial and industrial products. The margins on contracts
performed by the Defense Systems segment vary considerably. As a result,
profitability from Defense Systems' revenue has varied significantly depending
on the contract mix in any period. The existing backlog in the Defense Systems
segment has gross margins that are very low by historical standards, but are
similar to fiscal 1994 gross margins on similar Defense Systems products.
Management is continuing measures to reduce costs for the HYDRA 70 program.
Downward pressure on gross profit margins will continue, especially for
military contracts.
Selling, general and administrative expenses as a percentage of net sales
increased in the third quarter of fiscal 1995 versus the comparable period of
fiscal 1994, due to reduced sales volume. However, total selling, general and
administrative expenses declined $0.4 million or approximately 5% primarily due
to Corporate expense reductions partially offset by spending in the Sensors and
Systems segment to support sales growth.
Research, development and related expenses as a percentage of net sales for the
third quarter of fiscal 1995 showed a decrease from the same period in fiscal
1994 due to cutbacks in Company funded efforts on products with government and
defense applications, as well as elimination of a separate Corporate Research
Development function.
Page 12 of 16
<PAGE> 13
NINE MONTHS ENDED JULY 1, 1995 AND JULY 2, 1994
Net sales for the first nine months of fiscal 1995 increased $10.5 million or
10.5% from the prior year.
Sensors and Systems segment net sales for the nine month period ended July 1,
1995 increased $7.3 million or 12.4% from the first nine months of fiscal 1994.
The increased net sales were due primarily to the growth of sales in commercial
product lines, specifically industrial and automotive products. In addition,
there were gains in governmental contract sales, reflecting timing of
shipments.
Defense Systems segment net sales for the nine month period ended July 1, 1995
increased $2.8 million or 8.4% from the first nine months of fiscal 1994. The
increase was caused principally by the volume of unit deliveries of HYDRA 70
products.
Consolidated cost of sales as a percentage of net sales increased in the first
nine months of fiscal 1995 from the comparable period of fiscal 1994. Defense
Systems segment sales were up 8.4% from the prior year causing its higher cost
of sales percentage to impact the consolidated results. Additionally, cost of
sales as a percentage of net sales in the Sensors and Systems segment
experienced an increase over the prior year due primarily to increased costs on
certain government funded contracts. Medical Systems segment cost of sales as
a percentage of net sales was essentially unchanged.
Selling, general and administrative expenses as a percentage of net sales
decreased in the first nine months of fiscal 1995 versus the comparable period
of fiscal 1994, due primarily to the increased volume of total net sales and
due to reduced levels of spending, primarily in the Defense Systems segment,
with further reductions in the Medical Systems segment and Corporate. Spending
in the Defense Systems segment was cut back due to the anticipated decline in
future HYDRA 70 systems activity. Medical Systems segment cut back spending
due to continuing delays in new product introductions and to reduce operating
losses. Sensors and Systems segment increased spending at those commercial
operations experiencing volume growth.
Research, development and related expenses for the first nine months of fiscal
1995 decreased as a percentage of net sales from the same period in fiscal 1994
primarily due to the elimination of a separate Corporate Research and
Development function and additional focus of commercial product development
efforts in the Sensors and Systems segment, eliminating some programs while
increasing emphasis on automotive sensors.
Interest expense increased from the first nine months of fiscal 1994 due mainly
to a higher borrowing base resulting from use of the credit line and the
issuance of $11.2 million of Senior Notes during November 1994.
Page 13 of 16
<PAGE> 14
Other income decreased slightly for the nine months ended July 1, 1995 versus
the comparable period of fiscal 1994 due primarily to a decrease in royalty
income from a technology licensing agreement offset partially by increased
interest income on invested cash balances.
Income taxes vary from the expected rate due primarily to the effects of state
income taxes.
LIQUIDITY AND CAPITAL RESOURCES
During the first nine months of fiscal 1995, total cash provided by operations
was $9.0 million, including the net loss of $0.4 million. Sources of cash from
operations primarily consisted of a $6.3 million reduction in net inventories
due to the resumption of normal progress payments for materials used in the
HYDRA 70 program in addition to the positive impact of non-cash charges to
income from depreciation and amortization of $6.3 million. Cash flows from
operations were reduced as a result of a decrease in trade accounts payable of
$3.1 million and an increase in net trade receivables of $1.3 million.
Cash used for investing activities of $3.0 million consisted primarily of
capital expenditures in the first half of the fiscal year. In management's
opinion, the level of capital expenditures for fiscal 1995 is consistent with
the current volume of business. Cash flows for financing activities included
the short term borrowing and repayment of $6.0 million on the Company's line of
credit. The Company and the Bank have agreed to renew the bank credit line
effective June 1, 1995 for one year under similar terms. The Company had no
material capital commitments at July 1, 1995.
In 1991, the Financial Accounting Standards Board issued Statement of Financial
Accounting Standards ("FAS") No. 107 "Disclosures About Fair Value of Financial
Instruments." The Company will be required to adopt FAS 107 in fiscal year
1996. Accordingly, the Company plans to adopt FAS 107 when required, and will
disclose the fair value for all of its financial instruments, if practicable.
Based on the financial condition of the Company at July 1, 1995, management
believes that the existing cash balances, cash generated from operations, and
the available line of credit will be sufficient to meet the Company's planned
needs for the foreseeable future. If the Company requires additional capital,
it anticipates that such capital will be provided by bank or other borrowings,
although there can be no assurances that funds will be available on terms as
favorable as those applicable to the Company's currently outstanding debt.
EFFECTS OF INFLATION
Management believes that, for the periods presented, inflation has not had a
material effect on the Company's operations.
Page 14 of 16
<PAGE> 15
BEI ELECTRONICS, INC. AND SUBSIDIARIES
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Listing of Exhibits
3.1 By-Laws of BEI Electronics, Inc. (as amended through May 25,
1995).
10.1 Fourth Amendment to Credit Agreement, dated June 1, 1995,
between BEI Electronics, Inc., BEI Sensors & Systems Company,
Inc., Defense Systems Company, Inc., and BEI Medical Systems
Company, Inc. and Canadian Imperial Bank of Commerce.
27 Financial Data Schedule.
Page 15 of 16
<PAGE> 16
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 in the City of San
Francisco, County of San Francisco, State of California, on August 8, 1995.
BEI ELECTRONICS, INC.
By: /s/ Robert R. Corr
-----------------------------------------
Robert R. Corr
Treasurer and Controller
(Principal Accounting Officer)
Page 16 of 16
<PAGE> 17
EXHIBIT INDEX
Ex. 3.1 By-Laws of BEI Electronics, Inc.
Ex. 10.1 Fourth Amendment to Credit Agreement
Ex. 27 Financial Data Schedule
<PAGE> 1
Exhibit 3.1
BY-LAWS
OF
BEI ELECTRONICS, INC.
(AS AMENDED THROUGH MAY 25, 1995)
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
ARTICLE I -- Offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1. Registered Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 2. Other Offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II -- Corporate Seal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 3. Corporate Seal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE III -- Stockholders' Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 4. Place of Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 5. Annual Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 6. Special Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 7. Notice of Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 8. Quorum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 9. Adjournment and Notice of Adjourned Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 10. Voting Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 11. Beneficial Owners of Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 12. List of Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 13. Action without Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 14. Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE IV -- Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 15. Number and Term of Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 16. Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 17. Classes of Directors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 18. Newly Created Directorships and Vacancies . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 19. Resignation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 20. Removal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 21. Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 22. Quorum and Voting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 23. Action without Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 24. Fees and Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 25. Committees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 26. Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE V -- Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 27. Officers Designated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
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Section 28. Tenure and Duties of Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 29. Delegation of Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 30. Resignations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 31. Removal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE VI -- Execution of Corporate Instruments and
Voting of Securities Owned by the Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 32. Execution of Corporate Instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 33. Voting of Securities Owned by the Corporation . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE VII -- Shares of Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 34. Form and Execution of Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 35. Lost Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 36. Transfers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 37. Fixing Record Dates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 38. Registered Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE VIII -- Other Securities of the Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 39. Execution of Other Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE IX -- Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 40. Declaration of Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 41. Dividend Reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE X -- Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 42. Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE XI -- Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 43. Indemnification of Directors, Officers, Employees and Other Agents . . . . . . . . . . . . . . 18
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ARTICLE XII -- Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 44. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE XIII -- Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 45. Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE XIV -- Loans to Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 46. Loans to Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
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<PAGE> 5
BY-LAWS
OF
BEI ELECTRONICS, INC.
(A DELAWARE CORPORATION)
ARTICLE I
OFFICES
SECTION 1. REGISTERED OFFICE. The registered office of the
corporation in the State of Delaware shall be in the City of Dover, County of
Kent. (Del. Code Ann., tit. 8, Section 131)
SECTION 2. OTHER OFFICES. The corporation shall also have and
maintain an office or principal place of business in San Francisco, California,
at such place as may be fixed by the Board of Directors, and may also have
offices at such other places, both within and without the State of Delaware as
the Board of Directors may from time to time determine or the business of the
corporation may require. (Del. Code Ann., tit. 8, Section 122(8))
ARTICLE II
CORPORATE SEAL
SECTION 3. CORPORATE SEAL. The corporate seal shall consist of a die
bearing the name of the corporation and the inscription, "Corporate
Seal-Delaware." Said seal may be used by causing it or a facsimile thereof to
be impressed or affixed or reproduced or otherwise.
ARTICLE III
STOCKHOLDERS' MEETINGS
SECTION 4. PLACE OF MEETINGS. Meetings of the stockholders of the
corporation shall be held at such place, either within or without the State of
Delaware, as may be designated from time to time by the Board of Directors, or,
if not so designated, then at the office of the corporation required to be
maintained pursuant to Section 2 hereof. (Del. Code Ann., tit. 8, Section
211(a))
SECTION 5. ANNUAL MEETING. (a) The annual meeting of the
stockholders of the corporation, for the purpose of election of Directors and
for such other business as may lawfully
1.
<PAGE> 6
come before it, shall be held on such date and at such time as may be
designated from time to time by the Board of Directors.
(b) At an annual meeting of the stockholders, only such
business shall be conducted as shall have been properly brought before the
meeting. To be properly brought before an annual meeting, business must be:
(A) specified in the notice of meeting (or any supplement thereto) given by or
at the direction of the Board of Directors, (B) otherwise properly brought
before the meeting by or at the direction of the Board of Directors, or (C)
otherwise properly brought before the meeting by a stockholder. For business
to be properly brought before an annual meeting by a stockholder, the
stockholder must have given timely notice thereof in writing to the Secretary
of the corporation. To be timely, a stockholder's notice must be delivered to
or mailed and received at the principal executive offices of the corporation
not less than one hundred twenty (120) calendar days in advance of the date of
the corporation's proxy statement released to stockholders in connection with
the previous year's annual meeting of stockholders; provided, however, that in
the event that no annual meeting was held in the previous year or the date of
the annual meeting has been changed by more than thirty (30) days from the date
contemplated at the time of the previous year's proxy statement, notice by the
stockholder to be timely must be so received a reasonable time before the
solicitation is made. A stockholder's notice to the Secretary shall set forth
as to each matter the stockholder proposes to bring before the annual meeting:
(i) a brief description of the business desired to be brought before the annual
meeting and the reasons for conducting such business at the annual meeting,
(ii) the name and address, as they appear on the corporation's books, of the
stockholder proposing such business, (iii) the class and number of shares of
the corporation which are beneficially owned by the stockholder, (iv) any
material interest of the stockholder in such business and (v) any other
information that is required to be provided by the stockholder pursuant to
Regulation 14A under the Securities Exchange Act of 1934, as amended, in his
capacity as a proponent to a stockholder proposal. Notwithstanding the
foregoing, in order to include information with respect to a stockholder
proposal in the proxy statement and form of proxy for a stockholders' meeting,
stockholders must provide notice as required by the regulations promulgated
under the Securities and Exchange Act of 1934, as amended. Notwithstanding
anything in these Bylaws to the contrary, no business shall be conducted at any
annual meeting except in accordance with the procedures set forth in this
paragraph (b). The chairman of the annual meeting shall, if the facts warrant,
determine and declare at the meeting that business was not properly brought
before the meeting and in accordance with the provisions of this paragraph (b),
and, if he should so determine, he shall so declare at the meeting that any
such business not properly brought before the meeting shall not be transacted.
(Del. Code Ann., tit. 8: Paragraph 211(b))
(c) Only persons who are nominated in accordance with the
procedures set forth in this paragraph (c) shall be eligible for election as
Directors. Nominations of persons for election to the Board of Directors of
the corporation may be made at a meeting of stockholders by or at the direction
of the Board of Directors or by any stockholder of the corporation entitled to
vote in the election of Directors at the meeting who complies with the notice
procedures set forth in this paragraph (c). Such nominations, other than those
made by or at the direction of the Board of Directors, shall be made pursuant
to timely notice in writing
2.
<PAGE> 7
to the Secretary of the corporation in accordance with the provisions of
paragraph (b) of this Section 5. Such stockholder's notice shall set forth (i)
as to each person, if any, whom the stockholder proposes to nominate for
election or re-election as a Director: (A) the name, age, business address and
residence address of such person, (B) the principal occupation or employment of
such person, (C) the class and number of shares of the corporation which are
beneficially owned by such person, (D) a description of all arrangements or
understandings between the stockholder and each nominee and any other person or
persons (naming such person or persons) pursuant to which the nominations are
to be made by the stockholder, and (E) any other information relating to such
person that is required to be disclosed in solicitations of proxies for
election of Directors, or is otherwise required, in each case pursuant to
Regulation 14A under the Securities Exchange Act of 1934, as amended (including
without limitation such person's written consent to being named in the proxy
statement, if any, as a nominee and to serving as a Director if elected); and
(ii) as to such stockholder giving notice, the information required to be
provided pursuant to paragraph (b) of this Section 5. At the request of the
Board of Directors, any person nominated by a stockholder for election as a
Director shall furnish to the Secretary of the corporation that information
required to be set forth in the stockholder's notice of nomination which
pertains to the nominee. No person shall be eligible for election as a
Director of the corporation unless nominated in accordance with the procedures
set forth in this paragraph (c). The chairman of the meeting shall, if the
facts warrant, determine and declare at the meeting that a nomination was not
made in accordance with the procedures prescribed by these Bylaws, and if he
should so determine, he shall so declare at the meeting and the defective
nomination shall be disregarded. (Del. Code Ann., tit. 8, Sections 212, 214).
SECTION 6. SPECIAL MEETINGS. (a) Special meetings of the
stockholders of the corporation may be called, for any purpose or purposes, by
(i) the Chairman of the Board, (ii) the President, (iii) the Board of Directors
pursuant to a resolution adopted by a majority of the total number of
authorized directors (whether or not there exist any vacancies in previously
authorized directorships at the time any such resolution is presented to the
Board for adoption) or (iv) by the holders of shares entitled to cast not less
than ten percent (10%) of the votes at the meeting, and shall be held at such
place, on such date, and at such time as they or he shall fix.
(b) If a special meeting is called by any person or
persons other than the Board of Directors, the request shall be in writing,
specifying the time of such meeting and the general nature of the business
proposed to be transacted, and shall be delivered personally or sent by
registered mail or by telegraphic or other facsimile transmission to the
Chairman of the Board, the President, any Vice President, or the Secretary of
the corporation. No business may be transacted at such special meeting
otherwise than specified in such notice. The officer receiving the request
shall cause notice to be promptly given to the stockholders entitled to vote,
in accordance with the provisions of Section 7 of these Bylaws, that a meeting
will be held not less than thirty-five (35) nor more than sixty (60) days after
the receipt of the request. If the notice is not given within twenty (20) days
after the receipt of the request, the person or persons requesting the meeting
may give the notice. Nothing contained in this paragraph (b) shall be
3.
<PAGE> 8
construed as limiting, fixing, or affecting the time when a meeting of
stockholders called by action of the Board of Directors may be held.
SECTION 7. NOTICE OF MEETINGS. Except as otherwise provided by law
or the Certificate of Incorporation, written notice of each meeting of
stockholders shall be given not less than ten (10) nor more than sixty (60)
days before the date of the meeting to each stockholder entitled to vote at
such meeting, such notice to specify the place, date and hour and purpose or
purposes of the meeting. Notice of the time, place and purpose of any meeting
of stockholders may be waived in writing, signed by the person entitled to
notice thereof, either before or after such meeting, and will be waived by any
stockholder by his attendance thereat in person or by proxy, except when the
stockholder attends a meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business because the
meeting is not lawfully called or convened. Any stockholder so waiving notice
of such meeting shall be bound by the proceedings of any such meeting in all
respects as if due notice thereof had been given. (Del. Code Ann., tit. 8,
Sections 222, 229)
SECTION 8. QUORUM. At all meetings of stockholders, except where
otherwise provided by statute or by the Certificate of Incorporation, or by
these Bylaws, the presence, in person or by proxy duly authorized, of the
holders of a majority of the outstanding shares of stock entitled to vote shall
constitute a quorum for the transaction of business. Any shares, the voting of
which at said meeting has been enjoined, or which for any reason cannot be
lawfully voted at such meeting, shall not be counted to determine a quorum at
such meeting. In the absence of a quorum any meeting of stockholders may be
adjourned, from time to time, either by the chairman of the meeting or by vote
of the holders of a majority of the shares represented thereat, but no other
business shall be transacted at such meeting. The stockholders present at a
duly called or convened meeting, at which a quorum is present, may continue to
transact business until adjournment, notwithstanding the withdrawal of enough
stockholders to leave less than a quorum. Except as otherwise provided by law,
the Certificate of Incorporation or these Bylaws, all action taken by the
holders of a majority of the voting power represented at any meeting at which a
quorum is present shall be valid and binding upon the corporation; provided,
however, that Directors shall be elected by a plurality of the votes of the
shares present in person or represented by proxy at the meeting and entitled to
vote on the election of Directors. Where a separate vote by a class or classes
is required, a majority of the outstanding shares of such class or classes,
present in person or represented by proxy, shall constitute a quorum entitled
to take action with respect to that vote on that matter and the affirmative
vote of the majority (plurality, in the case of the election of Directors) of
shares of such class or classes present in person or represented by proxy at
the meeting shall be the act of such class. (Del. Code Ann., tit. 8, Section
216)
SECTION 9. ADJOURNMENT AND NOTICE OF ADJOURNED MEETINGS. Any meeting
of stockholders, whether annual or special, may be adjourned from time to time
either by the chairman of the meeting or by the vote of a majority of the
shares represented thereat. When a meeting is adjourned to another time or
place, notice need not be given of the adjourned meeting if the time and place
thereof are announced at the meeting at which the adjournment is taken. At the
adjourned meeting the corporation may transact any business which might have
4.
<PAGE> 9
been transacted at the original meeting. If the adjournment is for more than
thirty (30) days, or if after the adjournment a new record date is fixed for
the adjourned meeting, a notice of the adjourned meeting shall be given to each
stockholder of record entitled to vote at the meeting. (Del. Code Ann., tit.
8, Section 222(c))
SECTION 10. VOTING RIGHTS. For the purpose of determining those
stockholders entitled to vote at any meeting of the stockholders, except as
otherwise provided by law, only persons in whose names shares stand on the
stock records of the corporation on the record date, as provided in Section 12
of these Bylaws, shall be entitled to vote at any meeting of stockholders.
Except as may be otherwise provided in the Certificate of Incorporation or
these Bylaws, each stockholder shall be entitled to one vote for each share of
capital stock held by such stockholder. Every person entitled to vote or
execute consents shall have the right to do so either in person or by an agent
or agents authorized by a written proxy executed by such person or his duly
authorized agent, which proxy shall be filed with the Secretary at or before
the meeting at which it is to be used. An agent so appointed need not be a
stockholder. No proxy shall be voted after three (3) years from its date of
creation unless the proxy provides for a longer period. All elections of
Directors shall be by written ballot, unless otherwise provided in the
Certificate of Incorporation. (Del. Code Ann., tit. 8, Sections 211(e), 212(b))
SECTION 11. BENEFICIAL OWNERS OF STOCK. (a) If shares or other
securities having voting power stand of record in the names of two (2) or more
persons, whether fiduciaries, members of a partnership, joint tenants, tenants
in common, tenants by the entirety, or otherwise, or if two (2) or more persons
have the same fiduciary relationship respecting the same shares, unless the
Secretary is given written notice to the contrary and is furnished with a copy
of the instrument or order appointing them or creating the relationship wherein
it is so provided, their acts with respect to voting shall have the following
effect: (a) if only one (1) votes, his act binds all; (b) if more than one (1)
votes, the act of the majority so voting binds all; (c) if more than one (1)
votes, but the vote is evenly split on any particular matter, each faction may
vote the securities in question proportionally, or may apply to the Delaware
Court of Chancery for relief as provided in the General Corporation Law of
Delaware, Section 217(b). If the instrument filed with the Secretary shows
that any such tenancy is held in unequal interests, a majority or even-split
for the purpose of this subsection (c) shall be a majority or even-split in
interest. (Del. Code Ann., tit. 8, Section 217(b))
(b) Persons holding stock in a fiduciary capacity shall
be entitled to vote the shares so held. Persons whose stock is pledged shall
be entitled to vote, unless in the transfer by the pledgor on the books of the
corporation he has expressly empowered the pledgee to vote thereon, in which
case only the pledgee, or his proxy, may represent such stock and vote thereon.
(Del. Code Ann., tit. 8, Section 217(a)).
SECTION 12. LIST OF STOCKHOLDERS. The Secretary shall prepare and
make, at least ten (10) days before every meeting of stockholders, a complete
list of the stockholders entitled to vote at said meeting, arranged in
alphabetical order, showing the address of each stockholder and the number of
shares registered in the name of each stockholder. Such list shall be open to
the examination of any stockholder, for any purpose germane to the meeting,
during ordinary
5.
<PAGE> 10
business hours, for a period of at least ten (10) days prior to the meeting,
either at a place within the city where the meeting is to be held, which place
shall be specified in the notice of the meeting, or, if not specified, at the
place where the meeting is to be held. The list shall be produced and kept at
the time and place of meeting during the whole time thereof, and may be
inspected by any stockholder who is present. (Del. Code Ann., tit. 8, Section
219(a))
SECTION 13. ACTION WITHOUT MEETING.
(a) Any action required by statute to be taken at any
annual or special meeting of the stockholders, or any action which may be taken
at any annual or special meeting of the stockholders, may be taken without a
meeting, without prior notice and without a vote, if a consent or consents in
writing, setting forth the action so taken, are signed by the holders of
outstanding stock having not less than the minimum number of votes that would
be necessary to authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted.
(b) Every written consent shall bear the date of
signature of each stockholder who signs the consent, and no written consent
shall be effective to take the corporate action referred to therein unless,
within sixty (60) days of the earliest dated consent delivered to the
Corporation in the manner herein required, written consents signed by a
sufficient number of stockholders to take action are delivered to the
corporation by delivery to its registered office in the State of Delaware, its
principal place of business or an officer or agent of the corporation having
custody of the book in which proceedings of meetings of stockholders are
recorded. Delivery made to a corporation's registered office shall be by hand
or by certified or registered mail, return receipt requested. (Del. Code Ann.,
tit. 8, Section 228)
(c) Prompt notice of the taking of the corporate action
without a meeting by less than unanimous written consent shall be given to
those stockholders who have not consented in writing. If the action which is
consented to is such as would have required the filing of a certificate under
any section of the General corporation Law of Delaware if such action had been
voted on by stockholders at a meeting thereof, then the certificate filed under
such section shall state, in lieu of any statement required by such section
concerning any vote of stockholders, that written notice and written consent
have been given as provided in Section 228 of the General Corporation Law of
Delaware.
SECTION 14. ORGANIZATION. (a) At every meeting of stockholders, the
Chairman of the Board of Directors, or, if a Chairman has not been appointed or
is absent, the President, or, if the President is absent, the most senior Vice
President present, or in the absence of any such officer, a chairman of the
meeting chosen by a majority in interest of the stockholders entitled to vote,
present in person or by proxy, shall act as chairman. The Secretary, or, in
his absence, an Assistant Secretary directed to do so by the President, shall
act as secretary of the meeting.
(b) The Board of Directors of the corporation shall be
entitled to make such rules or regulations for the conduct of meetings of
stockholders as it shall deem necessary, appropriate or convenient. Subject to
such rules and regulations of the Board of Directors, if
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<PAGE> 11
any, the chairman of the meeting shall have the right and authority to
prescribe such rules, regulations and procedures and to do all such acts as, in
the judgment of such chairman, are necessary, appropriate or convenient for the
proper conduct of the meeting, including, without limitation, establishing an
agenda or order of business for the meeting, rules and procedures for
maintaining order at the meeting and the safety of those present, limitations
on participation in such meeting to stockholders of record of the corporation
and their duly authorized and constituted proxies, and such other persons as
the chairman shall permit, restrictions on entry to the meeting after the time
fixed for the commencement thereof, limitations on the time allotted to
questions or comments by participants and regulation of the opening and closing
of the polls for balloting on matters which are to be voted on by ballot.
Unless, and to the extent determined by the Board of Directors or the chairman
of the meeting, meetings of stockholders shall not be required to be held in
accordance with rules of parliamentary procedure.
ARTICLE IV
DIRECTORS
SECTION 15. NUMBER AND TERM OF OFFICE. The authorized number of
directors of the corporation shall be fixed from time to time by the Board of
Directors either by a resolution or a bylaw duly adopted by the Board of
Directors. The number of directors presently authorized is seven (7).
Directors need not be stockholders unless so required by the Certificate of
Incorporation. If for any cause, the Directors shall not have been elected at
an annual meeting, they may be elected as soon thereafter as convenient at a
special meeting of the stockholders called for that purpose in the manner
provided in these Bylaws. No reduction of the authorized number of Directors
shall have the effect of removing any Director before the Director's term of
office expires, unless such removal is made pursuant to the provisions of
Section 20 hereof. (Del. Code Ann., tit. 8, Sections 141(b), 211(b),
(c))
SECTION 16. POWERS. The powers of the corporation shall be
exercised, its business conducted and its property controlled by the Board of
Directors, except as may be otherwise provided by statute or by the Certificate
of Incorporation (Del. Code Ann., tit. 8, Section 141(a))
SECTION 17. CLASSES OF DIRECTORS. The Board of Directors shall be
divided into three classes: Class I, Class II and Class III, which shall be as
nearly equal in number as possible. Each director shall serve for a term
ending on the date of the third annual meeting of stockholders following the
annual meeting at which the director was elected; provided, however, that each
initial director in Class I shall hold office until the annual meeting of
stockholders in 1990; each initial director in Class II shall hold office until
the annual meeting of stockholders in 1991; and each initial director in Class
III shall hold office until the annual meeting of stockholders in 1992.
Notwithstanding the foregoing provisions of this section, each director shall
serve until his successor is duly elected and qualified or until his death,
resignation or removal. (Del. Code Ann., tit. 8, Section 141(d))
7.
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SECTION 18. NEWLY CREATED DIRECTORSHIPS AND VACANCIES. In the event
of any increase or decrease in the authorized number of directors, the newly
created or eliminated directorships resulting from such increase or decrease
shall be apportioned by the Board of Directors among the three classes of
directors so as to maintain such classes as nearly equal in number as possible.
No decrease in the number of directors constituting the Board of Directors
shall shorten the term of any incumbent director. Newly created directorships
resulting from any increase in the number of directors and any vacancies on the
Board of Directors resulting from death, resignation, disqualification, removal
or other cause shall be filled either (i) by the affirmative vote of the
holders of a majority of the voting power of the then-outstanding shares of the
Company's capital stock; or (ii) by the affirmative vote of a majority of the
remaining directors then in office, even though less than a quorum of the
authorized Board of Directors. Any director elected in accordance with the
preceding sentence shall hold office for the remainder of the full term of the
class of directors in which the new directorship was created or the vacancy
occurred and until such director's successors shall have been elected and
qualified.
SECTION 19. RESIGNATION. Any Director may resign at any time by
delivering his written resignation to the Secretary, such resignation to
specify whether it will be effective at a particular time, upon receipt by the
Secretary or at the pleasure of the Board of Directors. If no such
specification is made, it shall be deemed effective at the pleasure of the
Board of Directors. When one or more Directors shall resign from the Board of
Directors, effective at a future date, a majority of the Directors then in
office, including those who have so resigned, shall have power to fill such
vacancy or vacancies, the vote thereon to take effect when such resignation or
resignations shall become effective, and each Director so chosen shall hold
office for the unexpired portion of the term of the Director whose place shall
be vacated and until his successor shall have been duly elected and qualified.
(Del. Code Ann., tit. 8, Sections 141(b), 223(d))
SECTION 20. REMOVAL. Any director, or the entire Board of Directors,
may be removed from office, (a) with cause by the affirmative vote of the
holders of a majority of the voting power of all of the then-outstanding
shares of the Company's capital stock, voting together as a single class; or
(b) without cause, by the affirmative vote of the holders of at least sixty-six
and two-thirds percent (66-2/3%) of the voting power of the Company's capital
stock. (Del. Code Ann., tit. 8, Section 141(k))
SECTION 21. MEETINGS.
(a) ANNUAL MEETINGS. The annual meeting of the Board of
Directors shall be held immediately after the annual meeting of stockholders
and at the place where such meeting is held. No notice of an annual meeting of
the Board of Directors shall be necessary and such meeting shall be held for
the purpose of electing officers and transacting such other business as may
lawfully come before it.
(b) REGULAR MEETINGS. Except as hereinafter otherwise
provided, regular meetings of the Board of Directors shall be held in the
office of the corporation required to be
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maintained pursuant to Section 2 hereof. Unless otherwise restricted by the
Certificate of Incorporation, regular meetings of the Board of Directors may
also be held at any place within or without the State of Delaware which has
been determined by the Board of Directors. (Del. Code Ann., tit. 8, Section
141(g))
(c) SPECIAL MEETINGS. Unless otherwise restricted by the
Certificate of Incorporation, special meetings of the Board of Directors may be
held at any time and place within or without the State of Delaware whenever
called by the President or a majority of the Directors. (Del. Code Ann., tit.
8, Section 141(g))
(d) TELEPHONE MEETINGS. Any member of the Board of
Directors, or of any committee thereof, may participate in a meeting by means
of conference telephone or similar communications equipment by means of which
all persons participating in the meeting can hear each other, and participation
in a meeting by such means shall constitute presence in person at such meeting.
(Del. Code Ann., tit. 8, Section 141(i))
(e) NOTICE OF MEETINGS. Written notice of the time and
place of all special meetings of the Board of Directors shall be given at least
one (1) day before the date of the meeting. Notice of any meeting may be
waived in writing at any time before or after the meeting and will be waived by
any Director by attendance thereat, except when the Director attends the
meeting for the express purpose of objecting, at the beginning of the meeting,
to the transaction of any business because the meeting is not lawfully called
or convened. (Del. Code Ann., tit. 8, Section 229)
(f) WAIVER OF NOTICE. The transaction of all business at
any meeting of the Board of Directors, or any committee thereof, however called
or noticed, or wherever held, shall be as valid as though had at a meeting duly
held after regular call and notice, if a quorum is present and if, either
before or after the meeting, each of the Directors not present signs a written
waiver of notice, or a consent to holding such meeting, or an approval of the
minutes thereof. Neither the business to be transacted at, nor the purpose of,
any regular or special meeting of the Board of Directors need be specified in
any written waiver of notice or consent unless so required by the Certificate
of Incorporation or these Bylaws. All such waivers, consents or approvals
shall be filed with the corporate records or made a part of the minutes of the
meeting. (Del. Code Ann., tit. 8, Section 229)
SECTION 22. QUORUM AND VOTING.
(a) Unless the Certificate of Incorporation requires a
greater number and except with respect to indemnification questions arising
under Section 43 hereof, for which a quorum shall be one-third of the exact
number of Directors fixed from time to time in accordance with Section 15
hereof, but not less than one (1), a quorum of the Board of Directors shall
consist of a majority of the exact number of Directors fixed from time to time
in accordance with Section 15 of these Bylaws, but not less than one (1);
provided, however, at any meeting whether a quorum be present or otherwise, a
majority of the Directors present may adjourn from time to time until the time
fixed for the next regular meeting of the Board of
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Directors, without notice other than by announcement at the meeting. (Del.
Code Ann., tit. 8, Section 141(b))
(b) At each meeting of the Board of Directors at which a
quorum is present all questions and business shall be determined by a vote of a
majority of the Directors present, unless a different vote be required by law,
the Certificate of Incorporation or these Bylaws. (Del. Code Ann., tit. 8,
Section 141(b))
SECTION 23. ACTION WITHOUT MEETING. Unless otherwise restricted by
the Certificate of Incorporation or these Bylaws, any action required or
permitted to be taken at any meeting of the Board of Directors or of any
committee thereof may be taken without a meeting, if all members of the Board
of Directors or committee, as the case may be, consent thereto in writing, and
such writing or writings are filed with the minutes of proceedings of the Board
of Directors or committee. (Del. Code Ann., tit. 8, Section 141(f))
SECTION 24. FEES AND COMPENSATION. Directors shall be entitled to
such compensation for their services as may be approved by the Board of
Directors, including, if so approved, by resolution of the Board of Directors,
a fixed sum and expenses of attendance, if any, for attendance at each regular
or special meeting of the Board of Directors and at any meeting of a committee
of the Board of Directors. Nothing herein contained shall be construed to
preclude any Director from serving the corporation in any other capacity as an
officer, agent, employee, or otherwise and receiving compensation therefor.
(Del. Code Ann., tit. 8, Section 141(h))
SECTION 25. COMMITTEES.
(a) EXECUTIVE COMMITTEE. The Board of Directors may by
resolution passed by a majority of the whole Board of Directors, appoint an
Executive Committee to consist of one (1) or more members of the Board of
Directors. The Executive Committee, to the extent permitted by law and
specifically granted by the Board of Directors, shall have and may exercise
when the Board of Directors is not in session all powers of the Board of
Directors in the management of the business and affairs of the corporation,
including, without limitation, the power and authority to declare a dividend or
to authorize the issuance of stock, except such committee shall not have the
power or authority to amend the Certificate of Incorporation, to adopt an
agreement of merger or consolidation, to recommend to the stockholders the
sale, lease or exchange of all or substantially all of the corporation's
property and assets, to recommend to the stockholders of the corporation a
dissolution of the corporation or a revocation of a dissolution or to amend
these Bylaws. (Del. Code Ann., tit. 8, Section 141(c))
(b) OTHER COMMITTEES. The Board of Directors may, by
resolution passed by a majority of the whole Board of Directors, from time to
time appoint such other committees as may be permitted by law. Such other
committees appointed by the Board of Directors shall consist of one (1) or more
members of the Board of Directors, and shall have such powers and perform such
duties as may be prescribed by the resolution or resolutions creating such
committees, but in no event shall such committee have the powers denied to the
Executive Committee in these Bylaws. (Del. Code Ann., tit. 8, Section 141(c))
10.
<PAGE> 15
(c) TERM. The members of all committees of the Board of
Directors shall serve a one (1) year term. The Board of Directors, subject to
the provisions of subsections (a) or (b) of this Section 25, may at any time
increase or decrease the number of members of a committee or terminate the
existence of a committee. The membership of a committee member shall terminate
on the date of his death or voluntary resignation from the committee or from the
Board of Directors. The Board of Directors may at any time for any reason remove
any individual committee member and the Board of Directors may fill any
committee vacancy created by death, resignation, removal or increase in the
number of members of the committee. The Board of Directors may designate one or
more Directors as alternate members of any committee, who may replace any absent
or disqualified member at any meeting of the committee, and, in addition, in the
absence or disqualification of any member of a committee, the member or members
thereof present at any meeting and not disqualified from voting, whether or not
he or they constitute a quorum, may unanimously appoint another member of the
Board of Directors to act at the meeting in the place of any such absent or
disqualified member. (Del. Code Ann., tit. 8, Section 141(c))
(d) MEETINGS. Unless the Board of Directors shall otherwise
provide, regular meetings of the Executive Committee or any other committee
appointed pursuant to this Section 24 shall be held at such times and places as
are determined by the Board of Directors, or by any such committee, and when
notice thereof has been given to each member of such committee, no further
notice of such regular meetings need be given thereafter. Special meetings of
any such committee may be held at any place which has been determined from time
to time by such committee, and may be called by any Director who is a member of
such committee, upon written notice to the members of such committee of the time
and place of such special meeting given in the manner provided for the giving of
written notice to members of the Board of Directors of the time and place of
special meetings of the Board of Directors. Notice of any special meeting of any
committee may be waived in writing at any time before or after the meeting and
will be waived by any Director by attendance thereat, except when the Director
attends such special meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business because the meeting
is not lawfully called or convened. A majority of the authorized number of
members of any such committee shall constitute a quorum for the transaction of
business, and the act of a majority of those present at any meeting at which a
quorum is present shall be the act of such committee. (Del. Code Ann., tit. 8,
Section Section 141(c), 229)
SECTION 26. ORGANIZATION. At every meeting of the Directors, the
Chairman of the Board of Directors, or, if a Chairman has not been appointed or
is absent, the President, or if the President is absent, the most senior Vice
President, or, in the absence of any such officer, a chairman of the meeting
chosen by a majority of the Directors present, shall preside over the meeting.
The Secretary, or in his absence, an Assistant Secretary directed to do so by
the President, shall act as secretary of the meeting.
11.
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ARTICLE V
OFFICERS
SECTION 27. OFFICERS DESIGNATED. The officers of the corporation shall
be the Chairman of the Board of Directors, the President, one or more Vice
Presidents, the Secretary and the Chief Financial Officer or Treasurer, all of
whom shall be elected at the annual organizational meeting of the Board of
Directors. The order of the seniority of the Vice Presidents shall be in the
order of their nomination, unless otherwise determined by the Board of
Directors. The Board of Directors may also appoint one or more Assistant
Secretaries, Assistant Treasurers, and such other officers and agents with such
powers and duties as it shall deem necessary. The Board of Directors may assign
such additional titles to one or more of the officers as it shall deem
appropriate. Any one person may hold any number of offices of the corporation at
any one time unless specifically prohibited therefrom by law. The salaries and
other compensation of the officers of the corporation shall be fixed by or in
the manner designated by the Board of Directors. (Del. Code Ann., tit. 8,
Section Section 122(5), 142(a), (b))
SECTION 28. TENURE AND DUTIES OF OFFICERS.
(a) GENERAL. All officers shall hold office at the pleasure of
the Board of Directors and until their successors shall have been duly elected
and qualified, unless sooner removed. Any officer elected or appointed by the
Board of Directors may be removed at any time by the Board of Directors. If the
office of any officer becomes vacant for any reason, the vacancy may be filled
by the Board of Directors. (Del. Code Ann., tit. 8, Section 141(b), (e))
(b) DUTIES OF CHAIRMAN OF THE BOARD OF DIRECTORS. The Chairman
of the Board of Directors, if appointed and present, shall preside at all
meetings of the stockholders and the Board of Directors. The Chairman of the
Board of Directors shall perform other duties commonly incident to his office
and shall also perform such other duties and have such other powers as the Board
of Directors shall designate from time to time. If there is no President, then
the Chairman of the Board of Directors shall also serve as the Chief Executive
Officer of the corporation and shall have the powers and duties prescribed in
paragraph (c) of this Section 28. (Del. Code Ann., tit. 8, Section 142(a))
(c) DUTIES OF PRESIDENT. The President shall preside at all
meetings of the stockholders and at all meetings of the Board of Directors,
unless the Chairman of the Board of Directors has been appointed and is present.
The President shall be the Chief Executive Officer of the corporation and shall,
subject to the control of the Board of Directors, have general supervision,
direction and control of the business and officers of the corporation. The
President shall perform other duties commonly incident to his office and shall
also perform such other duties and have such other powers as the Board of
Directors shall designate from time to time. (Del. Code Ann., tit. 8, Section
142(a))
(d) DUTIES OF VICE PRESIDENTS. The Vice Presidents, in the
order of their seniority, may assume and perform the duties of the President in
the absence or disability of the
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President or whenever the office of President is vacant. The Vice Presidents
shall perform other duties commonly incident to their office and shall also
perform such other duties and have such other powers as the Board of Directors
or the President shall designate from time to time. (Del. Code Ann., tit. 8,
Section 142(a))
(e) DUTIES OF SECRETARY. The Secretary shall attend all
meetings of the stockholders and of the Board of Directors, and shall record all
acts and proceedings thereof in the minute book of the corporation. The
Secretary may give notice in conformity with these Bylaws of all meetings of the
stockholders, and of all meetings of the Board of Directors and any committee
thereof requiring notice. The Secretary shall perform all other duties given him
in these Bylaws and other duties commonly incident to his office and shall also
perform such other duties and have such other powers as the Board of Directors
shall designate from time to time. The President may direct any Assistant
Secretary to assume and perform the duties of the Secretary in the absence or
disability of the Secretary, and each Assistant Secretary shall perform other
duties commonly incident to his office and shall also perform such other duties
and have such other powers as the Board of Directors or the President shall
designate from time to time. (Del. Code Ann., tit. 8, Section 142(a))
(f) DUTIES OF CHIEF FINANCIAL OFFICER OR TREASURER. The Chief
Financial Officer or Treasurer shall keep or cause to be kept the books of
account of the corporation in a thorough and proper manner, and shall render
statements of the financial affairs of the corporation in such form and as often
as required by the Board of Directors or the President. The Chief Financial
Officer or Treasurer, subject to the order of the Board of Directors, shall have
the custody of all funds and securities of the corporation. The Chief Financial
Officer or Treasurer shall perform other duties commonly incident to his office
and shall also perform such other duties and have such other powers as the Board
of Directors or the President shall designate from time to time. The President
may direct any Assistant Treasurer to assume and perform the duties of the Chief
Financial Officer or Treasurer in the absence or disability of the Chief
Financial Officer or Treasurer, and each Assistant Treasurer shall perform other
duties commonly incident to his office and shall also perform such other duties
and have such other powers as the Board of Directors or the President shall
designate from time to time. (Del. Code Ann., tit. 8, Section 142(a))
SECTION 29. DELEGATION OF AUTHORITY. The Board of Directors may from
time to time delegate the powers or duties of any officer to any other officer
or agent, notwithstanding any provision hereof.
SECTION 30. RESIGNATIONS. Any officer may resign at any time by giving
written notice to the Board of Directors or to the President or to the
Secretary. Any such resignation shall be effective when received by the person
or persons to whom such notice is given, unless a later time is specified
therein, in which event the resignation shall become effective at such later
time. Unless otherwise specified in such notice, the acceptance of any such
resignation shall not be necessary to make it effective. Any resignation shall
be without prejudice to the rights, if any, of the corporation under any
contract with the resigning officer.(Del. Code Ann., tit. 8, Section 142(b))
13.
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SECTION 31. REMOVAL. Any officer may be removed from office at any
time, either with or without cause, by the vote or written consent of a majority
of the Directors in office at the time, or by any committee or superior officers
upon whom such power of removal may have been conferred by the Board of
Directors.
ARTICLE VI
EXECUTION OF CORPORATE INSTRUMENTS AND VOTING
of Securities Owned by the Corporation
SECTION 32. EXECUTION OF CORPORATE INSTRUMENTS. The Board of Directors
may, in its discretion, determine the method and designate the signatory officer
or officers, or other person or persons, to execute on behalf of the corporation
any corporate instrument or document, or to sign on behalf of the corporation
the corporate name without limitation, or to enter into contracts on behalf of
the corporation, except where otherwise provided by law or these Bylaws, and
such execution or signature shall be binding upon the corporation. (Del. Code
Ann., tit. 8, Section Section 103(a), 142(a), 158)
Unless otherwise specifically determined by the Board of
Directors or otherwise required by law, promissory notes, deeds of trust,
mortgages and other evidences of indebtedness of the corporation, and other
corporate instruments or documents requiring the corporate seal, and
certificates of shares of stock owned by the corporation, shall be executed,
signed or endorsed by the Chairman of the Board of Directors, or the President
or any Vice President, and by the Secretary or Chief Financial Officer or
Treasurer or any Assistant Secretary or Assistant Treasurer. All other
instruments and documents requiring the corporate signature, but not requiring
the corporate seal, may be executed as aforesaid or in such other manner as may
be directed by the Board of Directors. (Del. Code Ann., tit. 8, Section Section
103(a), 142(a), 158)
All checks and drafts drawn on banks or other depositaries on
funds to the credit of the corporation or in special accounts of the corporation
shall be signed by such person or persons as the Board of Directors shall
authorize so to do.
Unless authorized or ratified by the Board of Directors or
within the agency power of an officer, no officer, agent or employee shall have
any power or authority to bind the corporation by any contract or engagement or
to pledge its credit or to render it liable for any purpose or for any amount.
(Del. Code Ann., tit. 8, Section Section 103(a), 142(a), 158).
SECTION 33. VOTING OF SECURITIES OWNED BY THE CORPORATION. All stock
and other securities of other corporations owned or held by the corporation for
itself, or for other parties in any capacity, shall be voted, and all proxies
with respect thereto shall be executed, by the person authorized so to do by
resolution of the Board of Directors, or, in the absence of such authorization,
by the Chairman of the Board of Directors, the President, or any Vice President.
(Del. Code Ann., tit. 8, Section 123)
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ARTICLE VII
SHARES OF STOCK
SECTION 34. FORM AND EXECUTION OF CERTIFICATES. Certificates for the
shares of stock of the corporation shall be in such form as is consistent with
the Certificate of Incorporation and applicable law. Every holder of stock in
the corporation shall be entitled to have a certificate signed by or in the name
of the corporation by the Chairman of the Board of Directors, or the President
or any Vice President and by the Treasurer or Assistant Treasurer or the
Secretary or Assistant Secretary, certifying the number of shares owned by him
in the corporation. Where such certificate is countersigned by a transfer agent
other than the corporation or its employee, or by a registrar other than the
corporation or its employee, any other signature on the certificate may be a
facsimile. In case any officer, transfer agent, or registrar who has signed or
whose facsimile signature has been placed upon a certificate shall have ceased
to be such officer, transfer agent, or registrar before such certificate is
issued, it may be issued with the same effect as if he were such officer,
transfer agent, or registrar at the date of issue. Each certificate shall state
upon the face or back thereof, in full or in summary, all of the designations,
preferences, limitations, restrictions on transfer and relative rights of the
shares authorized to be issued. (Del. Code Ann., tit. 8, Section 158)
SECTION 35. LOST CERTIFICATES. A new certificate or certificates may be
issued in place of any certificate or certificates theretofore issued by the
corporation alleged to have been lost, stolen, or destroyed, upon the making of
an affidavit of that fact by the person claiming the certificate of stock to be
lost, stolen, or destroyed. The corporation may require, as a condition
precedent to the issuance of a new certificate or certificates, the owner of
such lost, stolen, or destroyed certificate or certificates, or his legal
representative, to advertise the same in such manner as it shall require or to
give the corporation a surety bond in such form and amount as it may direct as
indemnity against any claim that may be made against the corporation with
respect to the certificate alleged to have been lost, stolen, or destroyed.
(Del. Code Ann., tit. 8, Section 167)
SECTION 36. TRANSFERS.
(a) Transfers of record of shares of stock of the corporation
shall be made only upon its books by the holders thereof, in person or by
attorney duly authorized, and upon the surrender of a properly endorsed
certificate or certificates for a like number of shares. (Del. Code Ann., tit.
8, Section 201, tit. 6, Section 8-401(1))
(b) The corporation shall have power to enter into and perform
any agreement with any number of stockholders of any one or more classes of
stock of the corporation to restrict the transfer of shares of stock of the
corporation of any one or more classes owned by such stockholders in any manner
not prohibited by the General Corporation Law of Delaware. (Del. Code Ann., tit.
8, Section 160 (a))
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SECTION 37. FIXING RECORD DATES.
(a) In order that the Corporation may determine the
stockholders entitled to notice of or to vote at any meeting of stockholders or
any adjournment thereof, the Board of Directors may fix, in advance, a record
date, which record date shall not precede the date upon which the resolution
fixing the record date is adopted by the Board of Directors, and which record
date shall not be more than sixty (60) nor less than ten (10) days before the
date of such meeting. If no record date is fixed by the Board of Directors, the
record date for determining stockholders entitled to notice of or to vote at a
meeting of stockholders shall be at the close of business on the day next
preceding the day on which notice is given, or if notice is waived, at the close
of business on the day next preceding the day on which the meeting is held. A
determination of stockholders of record entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of the meeting; provided,
however, that the Board of Directors may fix a new record date for the adjourned
meeting.
(b) order that the Corporation may determine the stockholders
entitled to consent to corporate action in writing without a meeting, the Board
of Directors may fix, in advance, a record date, which record date shall not
precede the date upon which the resolution fixing the record date is adopted by
the Board of Directors, and which date shall not be more than ten (10) days
after the date upon which the resolution fixing the record date is adopted by
the Board of Directors. If no record date has been fixed by the Board of
Directors, the record date for determining stockholders entitled to consent to
corporate action in writing without a meeting, when no prior action by the Board
of Directors is required by law, shall be the first date on which a signed
written consent setting forth the action taken or proposed to be taken is
delivered to the Corporation by delivery to its registered office in the State
of Delaware, its principal place of business or an officer or agent of the
Corporation having custody of the book in which proceedings of meetings of
stockholders are recorded. Delivery made to a Corporation's registered office
shall be by hand or by certified or registered mail, return receipt requested.
If no record date has been fixed by the Board of Directors and prior action by
the Board of Directors is required by law, the record date for determining
stockholders entitled to consent to corporate action in writing without a
meeting shall be at the close of business on the day on which the Board of
Directors adopts the resolution taking such prior action.
(c) order that the corporation may determine the stockholders
entitled to receive payment of any dividend or other distribution or allotment
of any rights or the stockholders entitled to exercise any rights in respect of
any change, conversion or exchange of stock, or for the purpose of any other
lawful action, the Board of Directors may fix, in advance, a record date, which
record date shall not precede the date upon which the resolution fixing the
record date is adopted, and which record date shall be not more than sixty (60)
days prior to such action. If no record date is fixed, the record date for
determining stockholders for any such purpose shall be at the close of business
on the day on which the Board of Directors adopts the resolution relating
thereto. (Del. Code Ann., tit. 8, Section 213)
SECTION 38. REGISTERED STOCKHOLDERS. The corporation shall be entitled
to recognize the exclusive right of a person registered on its books as the
owner of shares to receive
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dividends, and to vote as such owner, and shall not be bound to recognize any
equitable or other claim to or interest in such share or shares on the part of
any other person whether or not it shall have express or other notice thereof,
except as otherwise provided by the laws of Delaware. (Del. Code Ann., tit. 8,
Section Section 213(a), 219)
ARTICLE VIII
OTHER SECURITIES OF THE CORPORATION
SECTION 39. EXECUTION OF OTHER SECURITIES. All bonds, debentures and
other corporate securities of the corporation, other than stock certificates
(covered in Section 33), may be signed by the Chairman of the Board of
Directors, the President or any Vice President, or such other person as may be
authorized by the Board of Directors, and the corporate seal impressed thereon
or a facsimile of such seal imprinted thereon and attested by the signature of
the Secretary or an Assistant Secretary, or the Chief Financial Officer or
Treasurer or an Assistant Treasurer; provided, however, that where any such
bond, debenture or other corporate security shall be authenticated by the manual
signature of a trustee under an indenture pursuant to which such bond, debenture
or other corporate security shall be issued, the signatures of the persons
signing and attesting the corporate seal on such bond, debenture or other
corporate security may be the imprinted facsimile of the signatures of such
persons. Interest coupons appertaining to any such bond, debenture or other
corporate security, authenticated by a trustee as aforesaid, shall be signed by
the Treasurer or an Assistant Treasurer of the corporation or such other person
as may be authorized by the Board of Directors, or bear imprinted thereon the
facsimile signature of such person. In case any officer who shall have signed or
attested any bond, debenture or other corporate security, or whose facsimile
signature shall appear thereon or on any such interest coupon, shall have ceased
to be such officer before the bond, debenture or other corporate security so
signed or attested shall have been delivered, such bond, debenture or other
corporate security nevertheless may be adopted by the corporation and issued and
delivered as though the person who signed the same or whose facsimile signature
shall have been used thereon had not ceased to be such officer of the
corporation.
ARTICLE IX
DIVIDENDS
SECTION 40. DECLARATION OF DIVIDENDS. Dividends upon the capital stock
of the corporation, subject to the provisions of the Certificate of
Incorporation, if any, may be declared by the Board of Directors pursuant to law
at any regular or special meeting. Dividends may be paid in cash, in property,
or in shares of the capital stock, subject to the provisions of the Certificate
of Incorporation. (Del. Code Ann., tit. 8, Section Section 170, 173)
SECTION 41. DIVIDEND RESERVE. Before payment of any dividend, there may
be set aside out of any funds of the corporation available for dividends such
sum or sums as the Board of
17.
<PAGE> 22
Directors from time to time, in their absolute discretion, think proper as a
reserve or reserves to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the corporation, or for such other
purpose as the Board of Directors shall think conducive to the interests of the
corporation, and the Board of Directors may modify or abolish any such reserve
in the manner in which it was created. (Del. Code Ann., tit. 8, Section 171)
ARTICLE X
FISCAL YEAR
SECTION 42. FISCAL YEAR. The fiscal year of the corporation shall end
on the nearest Saturday to the 30th day of September of each year and begin on
the following day or at such other times as may be fixed by resolution of the
Board of directors.
ARTICLE XI
INDEMNIFICATION
SECTION 43. INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES AND OTHER
AGENTS.
(a) DIRECTORS. The corporation shall indemnify its Directors
and executive officers to the fullest extent not prohibited by the Delaware
General Corporation Law; provided, however, that the corporation may limit the
extent of such indemnification by individual contracts with its Directors and
executive officers; and, provided, further, that the corporation shall not be
required to indemnify any Director or executive officer in connection with any
proceeding (or part thereof) initiated by such person or any proceeding by such
person against the corporation or its Directors, officers, employees or other
agents unless (i) such indemnification is expressly required to be made by law,
(ii) the proceeding was authorized by the Board of Directors of the corporation
or (iii) such indemnification is provided by the corporation, in its sole
discretion, pursuant to the powers vested in the corporation under the Delaware
General Corporation Law.
(b) OFFICERS, EMPLOYEES AND OTHER AGENTS. The corporation
shall have power to indemnify its other officers, employees and other agents as
set forth in the Delaware General Corporation Law.
(c) GOOD FAITH.
(1) For purposes of any determination under this Bylaw, a
Director or executive officer shall be deemed to have acted in good faith and in
a manner he reasonably believed to be in or not opposed to the best interests of
the corporation, and, with respect to any criminal action or proceeding, to have
had no reasonable cause to believe that his conduct was
18.
<PAGE> 23
unlawful, if his action is based on information, opinions, reports and
statements, including financial statements and other financial data, in each
case prepared or presented by:
(i) one or more officers or employees of the
corporation whom the Director or executive officer believed to be reliable and
competent in the matters presented;
(ii) counsel, independent accountants or other
persons as to matters which the Director or executive officer believed to be
within such person's professional competence; and
(iii) with respect to a Director, a committee of the
Board upon which such Director does not serve, as to matters within such
Committee's designated authority, which committee the Director believes to merit
confidence; so long as, in each case, the Director or executive officer acts
without knowledge that would cause such reliance to be unwarranted.
(2) 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 he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal proceeding, that
he had reasonable cause to believe that his conduct was unlawful.
(3) The provisions of this paragraph (c) shall not be
deemed to be exclusive or to limit in any way the circumstances in which a
person may be deemed to have met the applicable standard of conduct set forth by
the Delaware General Corporation Law.
(d) EXPENSES. The corporation shall advance, prior to the
final disposition of any proceeding, promptly following request therefor, all
expenses incurred by any Director or executive officer in connection with such
proceeding upon receipt of an undertaking by or on behalf of such person to
repay said amounts if it should be determined ultimately that such person is not
entitled to be indemnified under this Bylaw or otherwise.
Notwithstanding the foregoing, unless otherwise determined pursuant to
paragraph (e) of this Bylaw, no advance shall be made by the corporation if a
determination is reasonably and promptly made (1) by the Board of Directors by a
majority vote of a quorum consisting of Directors who were not parties to the
proceeding, or (2) if such quorum is not obtainable, or, even if obtainable, a
quorum of disinterested directors so directs, by independent legal counsel in a
written opinion, that the facts known to the decision making party at the time
such determination is made demonstrate clearly and convincingly that such person
acted in bad faith or in a manner that such person did not believe to be in or
not opposed to the best interests of the corporation.
19.
<PAGE> 24
(e) ENFORCEMENT. Without the necessity of entering into an
express contract, all rights to indemnification and advances to Directors and
executive officers 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 executive officer. Any right to indemnification
or advances granted by this Bylaw to a Director or executive officer shall be
enforceable by or on behalf of the person holding such right in any court of
competent jurisdiction if (i) the claim for indemnification or advances is
denied, in whole or in part, or (ii) no disposition of such claim is made within
ninety (90) days of request therefor. The claimant in such enforcement action,
if successful in whole or in part, shall be entitled to be paid also the expense
of prosecuting his claim. The corporation shall be entitled to raise as a
defense to any such action that the claimant has not met the standards of
conduct that make it permissible under the Delaware General Corporation Law for
the corporation to indemnify the claimant for the amount claimed. Neither the
failure of the corporation (including its Board of Directors, independent legal
counsel or its stockholders) to have made a determination prior to the
commencement of such action that indemnification of the claimant is proper in
the circumstances because he has met the applicable standard of conduct set
forth in the Delaware General Corporation Law, nor an actual determination by
the corporation (including its Board of Directors, independent legal counsel or
its stockholders) that the claimant has not met such applicable standard of
conduct, shall be a defense to the action or create a presumption that claimant
has not met the applicable standard of conduct.
(f) NON-EXCLUSIVITY 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 the Certificate of
Incorporation, Bylaws, agreement, vote of stockholders or disinterested
Directors or otherwise, both as to action in his 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 the Delaware General Corporation Law.
(g) 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.
(h) INSURANCE. To the fullest extent permitted by the Delaware
General Corporation 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.
(i) AMENDMENTS. Any repeal or modification of this Bylaw shall
only be prospective and shall not affect the rights under this Bylaw in effect
at the time of the alleged occurrence of any action or omission to act that is
the cause of any proceeding against any agent of the corporation.
20.
<PAGE> 25
(j) SAVING CLAUSE. If this Bylaw or any portion hereof shall be
invalidated on any ground by any court of competent jurisdiction, then the
corporation shall nevertheless indemnify each Director and executive officer to
the full extent not prohibited by any applicable portion of this Bylaw that
shall not have been invalidated, or by any other applicable law.
(k) CERTAIN DEFINITIONS. For the purposes of this Bylaw, the
following definitions shall apply:
(1) The term "proceeding" shall be broadly construed and
shall include, without limitation, the investigation, preparation, prosecution,
defense, settlement, arbitration and appeal of, and the giving of testimony in,
any threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative.
(2) The term "expenses" shall be broadly construed and
shall include, without limitation, court costs, attorneys' fees, witness fees,
fines, amounts paid in settlement or judgment and any other costs and expenses
of any nature or kind incurred in connection with any proceeding.
(3) The term the "corporation" shall include, in addition
to the resulting corporation, any constituent corporation (including any
constituent of a constituent) absorbed in a consolidation or merger which, if
its separate existence had continued, would have had power and authority to
indemnify its directors, officers, and employees or agents, so that any person
who is or was a director, officer, employee or agent of such constituent
corporation, or is or was serving at the request of such constituent corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, shall stand in the same position under
the provisions of this Bylaw with respect to the resulting or surviving
corporation as he would have with respect to such constituent corporation if its
separate existence had continued.
(4) References 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.
(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 an employee benefit plan; and 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; and a person
who acted in good faith and in a manner he 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.
21.
<PAGE> 26
ARTICLE XII
NOTICES
SECTION 44. NOTICES.
(a) NOTICE TO STOCKHOLDERS. Whenever, under any provisions of
these Bylaws, notice is required to be given to any stockholder, it shall be
given in writing, timely and duly deposited in the United States mail, postage
prepaid, and addressed to his last known post office address as shown by the
stock record of the corporation or its transfer agent. (Del. Code Ann., tit. 8,
Section 222)
(b) NOTICE TO DIRECTORS. Any notice required to be given to
any Director may be given by the method stated in subsection (a), or by
facsimile, telex or telegram, except that such notice other than one which is
delivered personally shall be sent to such address as such Director shall have
filed in writing with the Secretary, or, in the absence of such filing, to the
last known post office address of such Director.
(c) ADDRESS UNKNOWN. If no address of a stockholder or
Director be known, notice may be sent to the office of the corporation required
to be maintained pursuant to Section 2 hereof.
(d) AFFIDAVIT OF MAILING. An affidavit of mailing, executed by
a duly authorized and competent employee of the corporation or its transfer
agent appointed with respect to the class of stock affected, specifying the name
and address or the names and addresses of the stock- holder or stockholders, or
Director or Directors, to whom any such notice or notices was or were given, and
the time and method of giving the same, shall be conclusive evidence of the
statements therein contained. (Del. Code Ann., tit. 8, Section 222)
(e) TIME NOTICES DEEMED GIVEN. All notices given by mail, as
above provided, shall be deemed to have been given as at the time of mailing and
all notices given by facsimile, telex or telegram shall be deemed to have been
given as of the sending time recorded at time of transmission.
(f) METHODS OF NOTICE. It shall not be necessary that the same
method of giving notice be employed in respect of all Directors, but one
permissible method may be employed in respect of any one or more, and any other
permissible method or methods may be employed in respect of any other or others.
(g) FAILURE TO RECEIVE NOTICE. The period or limitation of
time within which any stockholder may exercise any option or right, or enjoy any
privilege or benefit, or be required to act, or within which any Director may
exercise any power or right, or enjoy any privilege, pursuant to any notice sent
him in the manner above provided, shall not be affected or extended in any
manner by the failure of such stockholder or such Director to receive such
notice.
22.
<PAGE> 27
(h) NOTICE TO PERSON WITH WHOM COMMUNICATION IS UNLAWFUL.
Whenever notice is required to be given, under any provision of law or of the
Certificate of Incorporation or Bylaws of the corporation, to any person with
whom communication is unlawful, the giving of such notice to such person shall
not be required and there shall be no duty to apply to any governmental
authority or agency for a license or permit to give such notice to such person.
Any action or meeting which shall be taken or held without notice to any such
person with whom communication is unlawful shall have the same force and effect
as if such notice had been duly given. In the event that the action taken by the
corporation is such as to require the filing of a certificate under any
provision of the Delaware General Corporation Law, the certificate shall state,
if such is the fact and if notice is required, that notice was given to all
persons entitled to receive notice except such persons with whom communication
is unlawful.
(i) NOTICE TO PERSON WITH UNDELIVERABLE ADDRESS. Whenever
notice is required to be given, under any provision of law or the Certificate of
Incorporation or Bylaws of the corporation, to any stockholder to whom (i)
notice of two consecutive annual meetings, and all notices of meetings or of the
taking of action by written consent without a meeting to such person during the
period between such two consecutive annual meetings, or (ii) all, and at least
two, payments (if sent by first class mail) of dividends or interest on
securities during a twelve month period, have been mailed addressed to such
person at his address as shown on the records of the Corporation and have been
returned undeliverable, the giving of such notice to such person shall not be
required. Any action or meeting which shall be taken or held without notice to
such person shall have the same force and effect as if such notice had been duly
given. If any such person shall deliver to the corporation a written notice
setting forth his then current address, the requirement that notice be given to
such person shall be reinstated. In the event that the action taken by the
corporation is such as to require the filing of a certificate under any
provision of the Delaware General Corporation Law, the certificate need not
state that notice was not given to persons to whom notice was not required to be
given pursuant to this paragraph. (Del. Code Ann, tit. 8, Section 230 )
ARTICLE XIII
AMENDMENTS
SECTION 45. AMENDMENTS. Except as otherwise set forth in paragraph (i)
of Section 43 of these Bylaws, these Bylaws may be amended or repealed and new
Bylaws adopted by the stockholders entitled to vote. The Board of Directors
shall also have the power, if such power is conferred upon the Board of
Directors by the Certificate of Incorporation, to adopt, amend or repeal Bylaws
(including, without limitation, the amendment of any Bylaw setting forth the
number of Directors who shall constitute the whole Board of Directors). (Del.
Code Ann., tit. 8, Section Section 109(a), 122(6))
23.
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ARTICLE XIV
LOANS TO OFFICERS
SECTION 46. LOANS TO OFFICERS. The corporation may lend money to, or
guarantee any obligation of, or otherwise assist any officer or other employee
of the corporation or of its subsidiaries, including any officer or employee who
is a Director of the corporation or its subsidiaries, whenever, in the judgment
of the Board of Directors, such loan, guarantee or assistance may reasonably be
expected to benefit the corporation. The loan, guarantee or other assistance may
be with or without interest and may be unsecured, or secured in such manner as
the Board of Directors shall approve, including, without limitation, a pledge of
shares of stock of the corporation. Nothing in this Section 46 shall be deemed
to deny, limit or restrict the powers of guaranty or warranty of the corporation
at common law or under any statute. (Del. Code Ann., tit. 8, Section 143)
24.
<PAGE> 1
Exhibit 10.1
BEI ELECTRONICS, INC.
FOURTH AMENDMENT TO CREDIT AGREEMENT
This FOURTH AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is dated
as of June 1, 1995 and entered into by and among BEI Electronics, Inc., a
Delaware corporation, BEI Sensors & Systems Company, Inc., a Delaware
corporation, Defense Systems Company, Inc., a Delaware corporation, and BEI
Medical Systems Company, Inc., a Delaware corporation (each a "Borrower" and
collectively the "Borrowers"), the financial institutions listed on the
signature pages hereof (each a "Lender" and collectively the "Lenders"), CIBC
Inc., as agent for the Lenders (the "Agent"), and Canadian Imperial Bank of
Commerce, as the Designated Issuer, and is made with reference to that certain
Credit Agreement dated as of June 1, 1993, as amended by the First Amendment to
Credit Agreement dated as of September 3, 1993, as amended by the Second
Amendment to Credit Agreement and Limited Waiver dated as of April 1, 1994, and
as amended by the Third Amendment to Credit Agreement dated as of September 30,
1994 (as so amended, the "Credit Agreement") by and among the Borrowers, the
Lenders, the Agent and the Designated Issuer. Capitalized terms used herein
without definition shall have the same meanings herein as set forth in the
Credit Agreement.
RECITALS
WHEREAS, the Borrowers have requested an extension of the Maturity Date
of the Credit Agreement, and the Lenders, the Agent and the Designated Issuer
have so agreed;
WHEREAS, the Borrowers, the Lenders, the Agent and the Designated
Issuer desire to amend the Credit Agreement as set forth below;
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree as follows:
1. Amendments to the Credit Agreement.
1.1 Amendments to Section 1.01: Defined Terms.
1.1.1 The following definitions in Section 1.01 of
the Credit Agreement are hereby amended in to read in their entirety as follows:
"'Consolidated Adjusted EBITDA': For any period, the sum of the
amounts for such period of, without duplication, (i) Consolidated Net
Income (or Consolidated Net Losses), plus (ii) Consolidated
Interest Expense, plus (iii) provisions for taxes based on
income, plus (iv) depreciation expense, plus (v) amortization expense,
plus (vi) any charges or expenses related to the GPI
1
<PAGE> 2
Settlement incurred subsequent to the quarter ending March 31, 1995,
but not in excess of $2,500,000, minus (vii) Consolidated
Capital Expenditures, all of the foregoing as determined on a
consolidated basis for BEI and its consolidated Subsidiaries in
accordance with GAAP."
"' Consolidated Capital Expenditures': For any period, the dollar
amount of purchases of property, plant and equipment reflected in the
consolidated statement of cash flow of BEI and its consolidated
Subsidiaries for such period, excluding, however, expenditures of
insurance proceeds received as the result of damage or destruction of
the property being replaced."
"' Consolidated Tangible Net Worth': For any period, the sum of
stockholders' equity of BEI and its consolidated Subsidiaries plus
Intangible Assets acquired by BEI and its consolidated Subsidiaries
after the date hereof as a result of an Acquisition in an amount not to
exceed $5,000,000 in the aggregate. Consolidated Tangible Net Worth
shall be calculated without giving effect to any foreign currency
translation adjustments."
"' Maturity Date': June 3, 1996."
"' Revolving Commitment': The amount of $15,000,000 as such amount may
be reduced pursuant to Sections 2.01(c) and (d)."
1.1.2 The following definitions are added to Section
1.01 of the Credit Agreement in appropriate alphabetical order:
"' Adjusted Consolidated Net Losses': For any period, the sum of the
amounts for such period of (i) Consolidated Net Loss, plus (ii) any
expenses or charges related to the GPI Settlement, but not in excess of
$2,500,000 plus (iii) any expenses or charges related to the
discontinued operations of Defense Systems Company, Inc., but not in
excess of $3,500,000, all of the foregoing as determined on a
consolidated basis for BEI and its consolidated Subsidiaries in
accordance with GAAP."
"' GPI Settlement': The resolution, whether by settlement, arbitration
award or otherwise, of the dispute between BEI and certain former
shareholders of General Precision Industries relating to royalties,
milestone payments, interest and related payments asserted to be
payable in connection with the license of certain technology to BEI."
1.2 Amendments to Section 2.05: Letters of Credit.
1.2.1 Section 2.05(a) of the Credit Agreement is
hereby amended by deleting the amount "$7,000,000" in clause (iii) thereof and
replacing it with the amount "$5,000,000".
2
<PAGE> 3
1.3 Amendments to Section 6.02: Negative Covenants.
1.3.1 Section 6.02(a) of the Credit Agreement is
hereby amended to read in its entirety as follows:
"(a) Current Ratio. Permit the ratio of Consolidated Current Assets to
Consolidated Current Liabilities at any time to be less than 1.50 to
1.00."
1.3.2 Section 6.02(b) of the Credit Agreement is
hereby amended to read in its entirety as follows:
"(b) Consolidated Tangible Net Worth. Permit Consolidated Tangible Net
Worth as at the end of any fiscal quarter of BEI to be less than the
sum of (i) $33,000,000 plus (ii) 75% of Consolidated Net Income for
each fiscal quarter of BEI commencing with the fiscal quarter ending
July 1, 1995, plus (iii) 100% of the Net Proceeds of any Equity
Issuance by BEI in excess of $5 Million Dollars ($5,000,000) after June
1, 1995."
1.3.3 Section 6.02(d) of the Credit Agreement is
hereby amended to read in its entirety as follows:
"(d) Interest Coverage Ratio. As of the end of any fiscal quarter of
BEI, permit the ratio of Consolidated Adjusted EBITDA for the number of
fiscal quarters then ended specified below to Consolidated Interest
Expense for such number of fiscal quarters to be less than the
correlative ratio set forth below:
<TABLE>
<CAPTION>
Period Ratio
------ -----
<S> <C>
Three Fiscal Quarters ending
July 1, 1995 1.25 : 1.00
Four Fiscal Quarters ending
September 30, 1995 1.25 : 1.00
Four Fiscal Quarters ending
December 30, 1995 1.60 : 1.00
Four Fiscal Quarters ending
on the last day of any fiscal
quarter thereafter 2.00 : 1.00"
</TABLE>
1.3.4 Section 6.02(f) of the Credit Agreement is
hereby amended to read in its entirety as follows:
3
<PAGE> 4
"(f) Adjusted Consolidated Net Income.
(i) Permit Adjusted Consolidated Net Losses for any
fiscal quarter to be greater than $3,000,000.
(ii) Permit Adjusted Consolidated Net Losses for any two
consecutive fiscal quarters."
1.3.5 Section 6.02(j)(ii) of the Credit Agreement is
hereby amended to read in its entirety as follows:
"any Borrower or any wholly-owned Subsidiary of a Borrower may acquire
the business, property, fixed assets or stock of Persons in a related
business (each, an "Acquisition"), provided that (i) immediately
following the consummation of any such Acquisition there shall exist no
condition or event that constitutes an Event of Default or a Potential
Event of Default, (ii) the fair market value of the consideration
(whether in the form of cash, assumed liabilities, or debt or equity
securities of any Borrower or any Subsidiary of a Borrower) paid in any
such Acquisition does not exceed $2,500,000 and (iii) the aggregate
fair market value of the consideration (whether in the form of cash,
assumed liabilities, or debt or equity securities of any Borrower or
any Subsidiary of a Borrower) paid in all such Acquisitions during any
fiscal year of BEI does not exceed $12,000,000 in the aggregate; and"
1.4 Amendment to Signature Page.
The signature page is hereby amended by deleting the
figure "$25,000,000" opposite the name of CIBC Inc. as lender, and replacing it
with the figure "$15,000,000".
1.5 Amendment to Exhibit C.
Exhibit C to the Credit Agreement is hereby deleted
and Exhibit C hereto substituted therefor.
2. Conditions to Effectiveness.
This Amendment shall be deemed effective as of June 1, 1995
(the "Fourth Amendment Effective Date") upon the satisfaction of all of the
following conditions precedent:
2.1 The Agent shall have received for each Lender and the
Designated Issuer counterparts hereof duly executed on behalf of the Borrowers,
the Agent and the Lenders (or notice of the approval of this Amendment by the
Lenders satisfactory to the Agent shall have been received by the Agent).
4
<PAGE> 5
2.2 The Agent shall have received a closing fee in the
amount of $50,000.
2.3 All corporate and other proceedings taken or to be taken
in connection with the transactions contemplated hereby and all documents
incidental thereto not previously found acceptable by the Agent, acting on
behalf of the Lenders, and its counsel shall be satisfactory in form and
substance to the Agent and such counsel, and the Agent and such counsel shall
have received all such counterpart originals or certified copies of such
documents as the Agent may reasonably request.
3. Borrowers' Representations and Warranties.
In order to induce the Lenders to enter into this Amendment and
to amend the Credit Agreement in the manner provided herein, the Borrowers
represent and warrant to each Lender that the following statements are true,
correct and complete:
3.1 Corporate Power and Authority. The Borrowers have
all requisite corporate power and authority to enter into this Amendment and to
carry out the transactions contemplated by, and perform their respective
obligations under, the Credit Agreement as amended by this Amendment (the
"Amended Agreement"). The Certificate of Incorporation and Bylaws of each of the
Borrowers have not been amended since September 30, 1994.
3.2 Authorization of Agreements. The execution and
delivery of this Amendment and the performance of the Amended Agreement have
been duly authorized by all necessary corporate action on the part of the
Borrowers.
3.3 No Conflict. The execution and delivery by the
Borrowers of this Amendment and the performance by the Borrowers of the Amended
Agreement do not and will not contravene (i) any law or regulation binding on or
affecting any of the Borrowers or any of their respective Subsidiaries, (ii) the
Certificate of Incorporation or Bylaws of any of the Borrowers, (iii) any order,
judgment or decree of any court of other agency of government binding on any of
the Borrowers or any of their respective Subsidiaries or (iv) any contractual
restriction binding on or affecting any of the Borrowers or any of their
respective Subsidiaries.
3.4 Governmental Consents. The execution and delivery
by the Borrowers of this Amendment and the performance by the Borrowers of the
Amended Agreement do not and will not require any authorization or approval of,
or other action by, or notice to or filing with any governmental authority or
regulatory body.
3.5 Binding Obligation. This Amendment and the Amended
Agreement have been duly executed and delivered by the Borrowers and are the
5
<PAGE> 6
binding obligations of the Borrowers, enforceable against the Borrowers in
accordance with their respective terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, liquidation, moratorium or
other similar laws of general application and equitable principles relating to
or affecting creditors' rights.
3.6 Absence of Default. No event has occurred and is
continuing or will result from the consummation of the transactions contemplated
by this Amendment that would constitute an Event of Default or a Potential Event
of Default.
4. Miscellaneous.
4.1 Reference to and Effect on the Credit Agreement and
the Other Loan Documents.
4.1.1 On and after the Fourth Amendment Effective
Date, each reference in the Credit Agreement to "this Agreement", "hereunder",
"hereof", "herein" or words of like import referring to the Credit Agreement,
and each reference in the other Loan Documents to the "Credit Agreement",
"thereunder", "thereof" or words of like import referring to the Credit
Agreement shall mean and be a reference to the Amended Agreement.
4.1.2 Except as specifically amended by this
Amendment, the Credit Agreement and the other Loan Documents shall remain in
full force and effect and are hereby ratified and confirmed.
4.1.3 Without limiting the generality of the
provisions of Section 10.01 of the Credit Agreement, nothing in this Amendment
shall be deemed to (a) constitute a waiver of compliance by the Borrowers with
respect to any term, provision or condition of the Credit Agreement or any other
instrument or agreement referred to therein or (b) prejudice any right or remedy
that the Agent or any Lender may now have or may have in the future under or in
connection with the Credit Agreement or any other instrument or agreement
referred to therein.
4.2 Fees and Expenses. The Borrowers acknowledge that
all costs, fees and expenses as described in Section 10.05 of the Credit
Agreement incurred by the Agent and its counsel with respect to this Amendment
and the documents and transactions contemplated hereby shall be for the account
of the Borrowers.
4.3 Headings. Section and subsection headings in this
Amendment are included herein for convenience of reference only and shall not
constitute a part of this Amendment for any other purpose or be given any
substantive effect.
4.4 Applicable Law. THIS AMENDMENT SHALL BE GOVERNED BY, AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
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<PAGE> 7
THE INTERNAL LAWS OF THE STATE OF CALIFORNIA, WITHOUT REGARD TO CONFLICTS OF
LAWS PRINCIPLES.
4.5 Counterparts. This Amendment may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
BEI ELECTRONICS, INC.
By:________________________________
Title:_____________________________
BEI SENSORS & SYSTEMS COMPANY, INC.
By:________________________________
Title:_____________________________
DEFENSE SYSTEMS COMPANY, INC
By:________________________________
Title:_____________________________
7
<PAGE> 8
BEI MEDICAL SYSTEMS COMPANY, INC.
By:_________________________________
Title:______________________________
CIBC INC., Individually and as Agent
By:_________________________________
Title:______________________________
CANADIAN IMPERIAL BANK OF COMMERCE,
as the Designated Issuer
By:_________________________________
Title:______________________________
8
<PAGE> 9
EXHIBIT C
[FORM OF COMPLIANCE CERTIFICATE]
1. This Compliance Certificate ("Compliance Certificate") is executed
and delivered by BEI Electronics, Inc., a Delaware corporation, BEI Sensors &
Systems Company, Inc., a Delaware corporation, Defense Systems Company, Inc., a
Delaware corporation, and BEI Medical Systems Company, Inc., a Delaware
corporation (collectively, the "Borrowers") to CIBC Inc. (the "Agent") pursuant
to Section 6.01(a)(iii)(B) of the Credit Agreement dated as of June 1, 1993
among the Borrowers, the financial institutions named therein, the Agent and
Canadian Imperial Bank of Commerce, as amended by the First Amendment to the
Credit Agreement dated as of September 3, 1993, and as amended by the Second
Amendment to the Credit Agreement and Limited Waiver dated as of April 1, 1994,
as amended by the Third Amendment to Credit Agreement dated as of September 30,
1994, and as amended by the Fourth Amendment to Credit Agreement dated as of
June 1, 1995 (as so amended and as further amended, restated, supplemented, or
modified from time to time, the "Credit Agreement"). Any terms used herein and
not defined herein shall have the meanings defined in the Credit Agreement. This
Compliance Certificate covers BEI's:
Fiscal quarter ended_____________________________, 19__
Fiscal year ended_____________________________, 19__
2. The following paragraphs set forth calculations in compliance with
obligations pursuant to Sections 6.02(a), (b), (c), (d), and (f) of the Credit
Agreement, as of the end of the fiscal period set forth in paragraph 1 hereof.
A. Current Ratio (Sec. 6.02(a)):
(a) Consolidated Current
Assets $__________
(b) Consolidated Current
Liabilities $__________
Ratio (a) : (b) ____:____
Minimum Permitted Ratio 1.50: 1.00
B. Consolidated Tangible Net Worth (Sec. 6.02(b)):
1. Actual Consolidated Tangible Net Worth
(a) Stockholders' equity $__________
minus
(b) Intangible Assets $__________
<PAGE> 10
<TABLE>
<S> <C> <C>
plus
(c) Intangible Assets acquired after
the date of the Credit Agreement
as a result of an Acquisition
(not to exceed $5,000,000 in the
aggregate) $__________
(a) - (b) + (c) $___________
2. Minimum Consolidated Tangible Net Worth
(a) $33,000,000 $33,000,000
plus
(b) 75% of Consolidated Net Income
for each fiscal quarter of BEI
after July 1, 1995 $__________
plus
(c) 100% of the Net Proceeds of any
Equity Issuance by BEI in
excess of $5,000,000
after June 1, 1995
$_________
(a) + (b) + (c) $__________
Required: 1 greater than or equal to 2 OK/Not OK
C. Leverage Ratio (Sec 6.02(c)):
(a) Consolidated Liabilities $__________
(b) Consolidated Tangible Net
Worth (B1) $__________
Ratio (a) : (b) _____:_____
Maximum Permitted Ratio 1.70 : 1.00
D. Interest Coverage Ratio (Sec. 6.02(d)):
(a) Consolidated Adjusted EBITDA
(i) Consolidated Net Income (or
Consolidated Net Losses) $__________
</TABLE>
C-2
<PAGE> 11
<TABLE>
<S> <C> <C>
plus
(ii) Consolidated Interest Expense $________
plus
(iii) Provisions for taxes based
on income $________
plus
(iv) Depreciation expense $________
plus
(v) Amortization expense $________
plus
(vi) Charges and Expenses
relating to GPI
Settlement incurred
after Mach 31, 1995 (not in
excess of $2,500,000) $________
minus
(vii) Consolidated Capital
Expenditures $________
(i) + (ii) + (iii) + (iv) + (v) + (vi) - (vii) $________
(b) Consolidated Interest Expense $________
Ratio (a) : (b) ____:____
Minimum Permitted Ratio
Three Fiscal Quarters ending
July 1, 1995 1.25 : 1.00
Four Fiscal Quarters ending
September 30, 1995 1.25 : 1.00
Four Fiscal Quarters ending
December 30, 1995 1.60 : 1.00
</TABLE>
C-3
<PAGE> 12
<TABLE>
<S> <C>
Four Fiscal Quarters ending
thereafter 2.00 : 1.00
OK/Not OK
E. Adjusted Consolidated Net Income (Sec. 6.02(f)):
(i) Required: No Adjusted Consolidated Net Losses
greater than $3,000,000 in any fiscal quarter OK/Not OK
(ii) Required: No two consecutive fiscal quarters
with Adjusted Consolidated Net Losses in most recently
ended two fiscal quarters OK/Not OK
</TABLE>
3. The aggregate amount of Investments made by BEI in BEI Medical
Systems Company, Inc. during the fiscal period covered by this Compliance
Certificate is $____________.
4. The undersigned has reviewed the terms of the Credit Agreement
and has made, or caused to be made under his/her supervision, a review in
reasonable detail of the transactions and condition of BEI and its Subsidiaries
during the fiscal period covered by this Compliance Certificate. The undersigned
does not (either as a result of such review or otherwise) have any knowledge of
the existence as of the date of this Compliance Certificate of any condition or
event that constitutes an Event of Default or a Potential Event of Default, with
the exception set forth below in response to which the Borrowers are taking or
propose to take the following actions (if none, so state):
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
5. This Compliance Certificate is executed on__________, 19___ by
the Chief Executive Officer, Chief Financial Officer, Treasurer or Controller of
BEI. The undersigned hereby certifies that each and every matter contained
herein is derived from the Borrowers' books and records and is, to the best
knowledge of the undersigned, true and correct.
BEI ELECTRONICS, INC.
a Delaware corporation
By:_______________________
C-4
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-START> OCT-02-1994
<PERIOD-END> JUL-01-1995
<CASH> 8,945
<SECURITIES> 0
<RECEIVABLES> 19,813
<ALLOWANCES> 0
<INVENTORY> 26,860
<CURRENT-ASSETS> 58,828
<PP&E> 27,993
<DEPRECIATION> 0
<TOTAL-ASSETS> 110,341
<CURRENT-LIABILITIES> 19,882
<BONDS> 30,191
<COMMON> 0
0
0
<OTHER-SE> 57,203
<TOTAL-LIABILITY-AND-EQUITY> 110,341
<SALES> 109,863
<TOTAL-REVENUES> 109,863
<CGS> 80,403
<TOTAL-COSTS> 80,403
<OTHER-EXPENSES> 28,861
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,890
<INCOME-PRETAX> (478)
<INCOME-TAX> (34)
<INCOME-CONTINUING> (444)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (444)
<EPS-PRIMARY> (.07)
<EPS-DILUTED> (.07)
</TABLE>
