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 Quarterly Period Ended October 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 0-17873
GIDDINGS & LEWIS, INC.
(Exact name of registrant as specified in its charter)
Wisconsin 39-1643189
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
142 Doty Street, Fond du Lac, Wisconsin 54935
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (414) 921-9400
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 Outstanding as of October 1, 1995: 34,422,043 shares
<PAGE>
GIDDINGS & LEWIS, INC.
Form 10-Q Index
For Quarter Ended October 1, 1995
Page
PART I. Financial Information
Item 1. Condensed Consolidated Statements of Income 3
Condensed Consolidated Statements of Cash Flows 4
Condensed Consolidated Balance Sheets 5
Condensed Consolidated Statement of Changes
in Shareholders' Equity 6
Notes to Condensed Consolidated Financial
Statements 7 - 9
Item 2. Management's Discussion and Analysis of
Results of Operations and Financial
Condition 10 - 12
PART II. Other Information
Item 6. Exhibits and Reports on Form 8-K 13 - 14
Signatures 15
Exhibit Index 16
2
<PAGE>
<TABLE>
GIDDINGS & LEWIS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In Thousands Except Share and Per Share Data)
(Unaudited)
<CAPTION>
Three months ended Nine months ended
Oct. 1, Oct. 2, Oct. 1, Oct. 2,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Net sales $ 195,921 $ 166,100 $ 521,622 $ 433,935
Costs and expenses:
Cost of sales 153,663 131,476 409,860 340,185
Selling, general and
administrative expenses 18,601 15,526 48,749 43,522
Depreciation and amortization 5,867 3,870 15,226 12,054
-------- -------- --------- --------
Total operating expenses 178,131 150,872 473,835 395,761
-------- -------- --------- --------
Operating income 17,790 15,228 47,787 38,174
Interest (income)/expense, net 3,399 (138) 6,415 (757)
Other (income)/expense 253 (468) 115 (404)
-------- -------- -------- --------
Income before provision
for income taxes 14,138 15,834 41,257 39,335
Provision for income taxes 5,595 6,025 16,299 15,426
-------- -------- -------- --------
Net income $ 8,543 $ 9,809 $ 24,958 $ 23,909
======== ======== ======== ========
Per common share amounts:
Net income $ .25 $ .29 $ .73 $ .70
======== ======== ======== ========
Dividends declared $ .03 $ .03 $ .09 $ .09
======== ======== ======== ========
Average number of common
shares outstanding 34,409,742 34,290,599 34,390,048 34,280,033
</TABLE>
See accompanying notes.
3
<PAGE>
<TABLE>
GIDDINGS & LEWIS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
<CAPTION>
Three months ended Nine months ended
Oct. 1, Oct. 2, Oct. 1, Oct. 2,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Operating activities:
Net income $ 8,543 $ 9,809 $ 24,958 $ 23,909
Adjustments to reconcile net
income to net cash provided
(used) by operating activities:
Depreciation and amortization 5,867 3,870 15,226 12,054
Net changes in working capital
items, net of the effects
of Fadal acquisition (1,619) (48,894) (41,947) (44,472)
Other (7,719) 514 (8,701) (2,035)
-------- -------- -------- --------
Net cash provided (used) by
operating activities 5,072 (34,701) (10,464) (10,544)
-------- -------- -------- --------
Investing activities:
Purchase of Fadal Engineering
Company, Inc. - - (179,579) -
Additions to property, plant,
and equipment (3,907) (3,871) (11,194) (12,445)
Other (901) 97 347 3,587
-------- -------- -------- --------
Net cash used by investing
activities (4,808) (3,774) (190,426) (8,858)
Financing activities:
Proceeds from draws on line of
credit 41,000 - 320,938 -
Repayments under lines of credit (137,168) - (233,168) -
Proceeds from sale of debt
securities 100,000 - 100,000 -
Payment for debt issue costs (1,151) - (1,151) -
Proceeds from stock options
exercised - 32 - 488
Cash dividends (1,033) (1,030) (3,097) (3,087)
Payment for redemption of
preferred share purchase
rights (172) - (172) -
-------- -------- -------- --------
Net cash provided (used) by
financing activities 1,476 (998) 183,350 (2,599)
-------- -------- -------- --------
Effect of exchange rate
changes on cash 165 1,316 323 3,546
-------- -------- -------- --------
Net increase (decrease) in cash
and cash equivalents 1,905 (38,157) (17,217) (18,455)
Cash and cash equivalents -
beginning of period 4,950 73,579 24,072 53,877
--------- -------- -------- --------
Cash and cash equivalents -
end of period $ 6,855 $ 35,422 $ 6,855 $ 35,422
========= ======== ======== ========
</TABLE>
See accompanying notes.
4
<PAGE>
GIDDINGS & LEWIS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)
October 1, December 31,
1995 1994
ASSETS
Current assets:
Cash and cash equivalents $ 6,855 $ 24,072
Accounts receivable 372,002 343,881
Inventories 114,453 74,823
Deferred income taxes 9,455 9,455
Other current assets 6,398 10,923
-------- --------
Total current assets 509,163 463,154
Fixed assets - net 121,941 107,164
Costs in excess of net acquired assets
and other intangible assets 204,897 84,997
Other assets 17,019 12,943
Deferred income taxes 18,513 18,968
-------- --------
TOTAL ASSETS $871,533 $687,226
======== ========
LIABILITIES & SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable 87,770 -
Accounts payable 53,382 76,562
Accrued expenses and other liabilities 76,218 78,912
-------- --------
Total current liabilities 217,370 155,474
Long-term debt 100,000 -
Long-term employee benefits and other
long-term liabilities 42,350 46,454
-------- --------
Total liabilities 359,720 201,928
Contingencies
Shareholders' equity:
Class A preferred stock - -
Common stock 3,442 3,429
Capital in excess of par 326,471 325,063
Retained earnings 180,318 158,457
Cumulative translation adjustment 4,173 174
Unamortized compensation expense (2,591) (1,825)
-------- --------
Total shareholders' equity 511,813 485,298
-------- --------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $871,533 $687,226
======== ========
See accompanying notes.
5
<PAGE>
<TABLE>
GIDDINGS & LEWIS, INC.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
NINE MONTHS ENDED OCTOBER 1, 1995
(In Thousands, Except Share Amounts)
(Unaudited)
<CAPTION>
Common Stock Capital in Cumulative Unamortized Total
Excess of Retained Translation Compensation Shareholders'
Shares Amount Par Earnings Adjustment Expense Equity
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1994 34,294,404 $3,429 $325,063 $158,457 $ 174 $(1,825) $485,298
Net stock awards and
options 127,639 13 1,386 (1,960) (561)
Tax benefit related to
vesting of restricted
stock 194 194
Net income 24,958 24,958
Amortization of
compensation expense 1,194 1,194
Cash dividends (3,097) (3,097)
Payment for redemption of
preferred share
purchase rights (172) (172)
Translation adjustment 3,999 3,999
Other - - - - - - -
---------- ------ -------- -------- ------ ------- --------
Balance, October 1, 1995 34,422,043 $3,442 $326,471 $180,318 $4,173 $(2,591) $511,813
========== ======= ======== ======== ====== ======= ========
</TABLE>
See accompanying notes.
6
<PAGE>
GIDDINGS & LEWIS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
OCTOBER 1, 1995
(Unaudited)
1. 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. Due to the nature of a substantial portion of the
Company's business (i.e., long-term and complex contracts),
significant adjustments are sometimes required to reflect experience
and other factors. Such adjustments are recorded as changes in
estimates as part of the percentage-of-completion accounting in the
period they became known. Operating results for the nine-month period
ended October 1, 1995 are not necessarily indicative of the results
that may be expected for the year ending December 31, 1995. For
further information, refer to the consolidated financial statements
and footnotes thereto included in the Company's Annual Report on
Form 10-K for the year ended December 31, 1994.
The Company is organized into four major operating groups: Automation
Technology, Integrated Automation, Automation Measurement and Control,
and European Operations. The Automation Technology Group is
responsible for the manufacture of cellular and smart manufacturing
systems, automated standalone machine tools and machining centers,
tooling and fixtures, and remanufacturing. The Integrated Automation
Group produces assembly automation products and systems and flexible
transfer lines. Programmable industrial computers, servo systems,
controls, and measurement products are offered by the Automation
Measurement and Control Group. The European Operations Group offers
the Company's complete product lines through its sales, engineering,
manufacturing, and service facilities in England and Germany.
2. Inventories
October 1, December 31,
1995 1994
(in thousands)
Raw materials $ 47,095 $ 37,166
Work-in-process 56,139 27,568
Finished goods 11,219 10,089
---------- ----------
$ 114,453 $ 74,823
========== ==========
3. Purchase of Fadal Engineering Company, Inc.
On April 24, 1995, a wholly owned subsidiary of the Company acquired
for $180,193,000 ($179,579,000 as adjusted for postclosing
adjustments) (a) all of the issued and outstanding shares of capital
stock of Fadal Engineering Company, Inc. (Fadal) and (b) the land and
building used by Fadal and leased from a related partnership. To
provide financing for the acquisition, the Company (a) entered into
an unsecured $100 million revolving credit facility dated as of April
24, 1995 (the "1995 Credit Agreement") and (b) amended its
7
<PAGE>
unsecured $175 million revolving credit facility dated as of
December 21, 1992 (the "1992 Credit Agreement"). The Company
borrowed $61,579,000 under the 1995 Credit Agreement and
$118,000,000 under the 1992 Credit Agreement to finance the
acquisition. (See further discussion regarding debt financing below.)
Approximately $120 million of the purchase price was allocated to cost
in excess of net acquired assets and other intangible assets. Certain
principals and other employees of Fadal entered into noncompetition
and/or employment agreements in connection with the transaction. The
operations of Fadal have been included in the Company's Automation
Technology Group since the date of the acquisition. Details regarding
the Fadal acquisition were previously reported by the Company in Current
Reports on Form 8-K, dated as of April 24, 1995 and July 19, 1995,
filed with the Securities and Exchange Commission.
The proforma unaudited results of operations for the nine months
ended October 1, 1995 and October 2, 1994, assuming consummation of
the Fadal acquisition as of January 1, 1994, are as follows:
Nine months ended
October 1, 1995 October 2, 1994
(in thousands, except per share data)
Net sales $ 574,616 $ 531,431
Net income 28,287 27,963
Net income per common
share $ .82 $ .82
4. Debt Financing
On September 26, 1995, the Company agreed to sell $100,000,000
principal amount of its 7 1/2% Notes Due 2005 (the "Notes") in a
public offering. The net proceeds from the sale of the Notes
(approximately $98.9 million) were used to repay, in full, the
remaining $47.0 million of borrowings under the 1995 Credit Agreement
and the remaining net proceeds of $51.9 million were used to reduce
borrowings under the 1992 Credit Agreement.
5. Contingencies
The Company is involved in various environmental matters, including
matters in which the Company and certain of its subsidiaries or
alleged predecessors have been named as potentially responsible
parties under the Comprehensive Environmental Response Compensation
and Liability Act (CERCLA). These matters include a soil and water
contamination matter at the Company's former West Allis, Wisconsin
facility. In 1992, the Company was notified by the Wisconsin
Department of Natural Resources (WDNR) of contamination at the West
Allis site. In 1994, the Company sold most of the site, including
the manufacturing facility. The Company is currently implementing a
WDNR approved clean-up plan on the portion of the site that was not
sold.
The Company has established accruals ($10.3 million and $13.8 million
at October 1, 1995 and December 31, 1994, respectively) for all
environmental contingencies of which management is currently aware in
accordance with generally accepted accounting principles. In
establishing these accruals, management considered (a) reports of
environmental consultants retained by the Company, (b) the costs
incurred to date by the Company at sites where clean-up is presently
ongoing and the estimated costs to complete the necessary remediation
work remaining at such sites, (c) the financial solvency, where
appropriate, of other parties that have been responsible for
effecting remediation at specified sites, and (d) the experience of
other parties who have been involved in the remediation of comparable
sites. The accruals recorded by the Company with respect to
environmental matters have not been reduced by potential insurance or
other recoveries and are not discounted. Although the Company has
and will continue to pursue such claims
8
<PAGE>
against insurance carriers and other responsible parties, future
potential recoveries remain uncertain and, therefore, were not recorded
as a reduction to the estimated gross environmental liabilities. Based
on the foregoing and given current information, management believes that
future costs in excess of the amounts accrued on all presently known and
quantifiable environmental contingencies will not be material to the
Company's financial position or results of operations.
In another matter, a Michigan Department of Natural Resources
investigation into alleged environmental violations at the Company's
Menominee, Michigan facility has resulted in the issuance of a
criminal complaint against the Company and two of its employees. The
complaint generally is focused on alleged releases of hazardous
substances and the alleged illegal treatment and disposal of
hazardous wastes. Two civil lawsuits are also pending which allege
improper disposal and emissions at this facility. The Company is
vigorously defending itself against all charges and allegations.
Information presently available to the Company does not enable it to
reasonably estimate potential civil or criminal penalties, or
remediation costs, if any, related to this matter.
The Company is also involved in other litigation and proceedings,
including product liability claims. In the case of product
liability, the Company is partially self-insured and has accrued for
all claim exposure for which a loss is probable and reasonably
estimable. Based on current information, management believes that
future costs in excess of the amounts accrued for all existing
litigation will not be material to the Company's financial position
or results of operations.
9
<PAGE>
GIDDINGS & LEWIS, INC.
Management's Discussion and Analysis of Results of Operations
and Financial Condition
Results of Operations for the First Nine Months
of 1995 Compared to 1994
The following table sets forth the Company's bookings by operating group
in the period and consolidated backlog at period-end on a quarterly basis
for the period July 4, 1994 through October 1, 1995.
<TABLE>
<CAPTION>
Oct. 2, Dec. 31, April 2, July 2, Oct. 1,
1994 1994 1995 1995 1995
(In Thousands)
<S> <C> <C> <C> <C> <C>
Operating group:
Automation
Technology $ 28,973 $ 40,116 $ 41,523 $ 76,765 $ 83,534
Integrated
Automation 94,705 91,226 91,420 64,884 39,091
European
Operations 12,141 8,759 8,680 27,459 24,470
Automation
Measurement
and Control 16,964 17,948 17,741 19,364 14,698
-------- -------- -------- -------- --------
Consolidated
bookings $152,783 $158,049 $159,364 $188,472 $161,793
======== ======== ======== ======== ========
Consolidated
backlog $449,969 $422,172 $430,121 $478,324 $442,507
======== ======== ======== ======== ========
</TABLE>
Bookings in the first nine months of 1995 were $509.6 million compared to
bookings in the first nine months of 1994 of $491.4 million. Automation
Technology bookings of $201.8 million in the first nine months of 1995
increased 117.6% from $92.7 million in the comparable period of 1994
primarily as a result of the acquisition of Fadal in April 1995 and the
demand for the new RAM machining centers which were introduced in the
second half of 1994. Integrated Automation bookings in the first nine
months totalled $195.4 million, a 40.1% decrease from the year earlier
period of $326.2 million due to the timing of order placement for large
automotive contracts. The domestic automotive sector continues to be a
major source for new orders for this group. Although European Operations
bookings increased 152.0% from a very low $24.1 million in the first nine
months of 1994 to $60.6 million in the first nine months of 1995, the
Company continues to monitor the outlook for bookings, relative to
capacity, at its German operation. Automation Measurement and Control
bookings of $51.8 million for the first nine months of 1995 increased 6.9%
over the comparable 1994 period bookings of $48.4 million. Much of this
increase was attributed to orders from the domestic automotive industry.
Bookings in the third quarter of 1995 were $161.8 million compared to
bookings in the third quarter of 1994 of $152.8 million. Automation
Technology bookings were $83.5 million in the third quarter of 1995, an
increase of 188.3% from $29.0 in the third quarter of 1994. Integrated
Automation bookings of $39.1 million in the third quarter of 1995
decreased 58.7% from $94.7 million in the third quarter of 1994. European
Operations bookings increased 101.5% from $12.1 million in the third
quarter 1994 to $24.5 million in the third quarter of 1995. Automation
Measurement and Control bookings of $14.7 million for the third quarter of
1995
10
<PAGE>
decreased 13.4% from $17.0 million in the third quarter of 1994. The
reasons for the fluctuations in third quarter bookings (1995 vs. 1994) are
essentially the same as those noted in the previous paragraph relating to
the nine-month results, except for Automation Measurement and Control
Group which experienced a general decline in bookings in the third quarter
of 1995 compared to the prior year period.
Consolidated net sales in the first nine months of 1995 totalled $521.6
million compared to $433.9 million in the year earlier period. The
increase in net sales was related to the strong bookings in first half of
1994 and the addition of Fadal in April 1995. Net sales for Automation
Technology of $202.9 million increased 61.3% from $125.8 million in the
year earlier period. Integrated Automation net sales of $201.2 million
increased 13.7% from $176.9 million. European Operations sales in the
first nine months of 1995 were $63.7 million, a decrease of 25.6% from
$85.7 million in the year earlier period as certain major automotive
contracts near completion. Automation Measurement and Control net sales
increased 18.1% to $53.8 million in the 1995 period compared to $45.5
million in the 1994 period.
Consolidated net sales increased from $166.1 million in the third quarter
of 1994 to $195.9 million in the third quarter of 1995. In the third
quarter of 1995, Automation Technology net sales totalled $91.9 million
compared to $41.0 million in the year earlier period. Integrated
Automation net sales of $66.8 million in the third quarter of 1995
decreased from $75.0 million in the comparable 1994 period. European
Operations net sales in the third quarter of 1995 were $19.3 million, a
43.7% decrease from 1994 third quarter net sales of $34.3 million. Net
sales for the Automation Measurement and Control group were $17.9 million
in the third quarter of 1995 compared to $15.8 million in the year earlier
period.
The consolidated gross margin percentages (before depreciation and
amortization) for the first nine months and the third quarter of 1995 were
21.4% and 21.6%, respectively, as compared to 21.6% and 20.8% for the
comparable 1994 periods. The increase in the gross margin percentage in
the third quarter 1995 was primarily due to the benefit from the inclusion
of Fadal, offset by higher than expected development costs related to the
introduction of RAM machining centers at Automation Technology and excess
program costs on certain contracts at Integrated Automation, all of which
are expected to impact fourth quarter 1995 margins as well.
Selling, general, and administrative expenses (before depreciation and
amortization) decreased as a percentage of sales to 9.3% in the first nine
months of 1995 from 10.0% in the year earlier period, and increased to
9.5% for the third quarter of 1995 from 9.3% in the third quarter of 1994.
The improvement in the first nine months of 1995 over the comparable
period in 1994 is largely due to the favorable settlement associated with
the successful defense of a patent infringement case in the second quarter
of 1995.
Net interest (income)/expense for the first nine months and third quarter
of 1995 of $6.4 million and $3.4 million, respectively, increased from
($.8) million and ($.1) million, respectively, in the comparable 1994
periods. The increase in net interest expense is mainly attributable to
increased borrowings resulting from the acquisition of Fadal.
The provision for income taxes of $16.3 million and $5.6 million for the
first nine months and third quarter of 1995, respectively, is based on the
estimated annual effective tax rate for 1995. The Company's effective tax
rate for the first nine months of 1995 amounted to 39.5% as compared to
39.2% for the year earlier period.
Liquidity and Capital Resources at October 1, 1995
On October 1, 1995, the Company had $6.9 million of cash and cash
equivalents on
11
<PAGE>
hand which was a decrease of $17.2 million from the balance on hand at
the beginning of the year. For the first nine months of 1995, operating
activities used $10.5 million of cash. Cash used by working capital
changes totaled $41.9 million due primarily to the build up of
inventory of contracts in progress and the decrease in accounts payable.
Investing activities used $190.4 million for the first nine months which
included $179.6 million for the purchase of Fadal and $11.2 million in
capital expenditures. Financing activities provided cash of $183.4
million which included proceeds from draws on lines of credit of $320.9
million along with $98.9 million of net proceeds from the sale of the
Company's 7 1/2% Notes less repayments under lines of credit of $233.2
million and payments for dividends and the redemption of preferred share
purchase rights totalling $3.1 million. Approximately $98.9 million of
the proceeds from the sale of the Notes was used to repay borrowings under
the lines of credit. See Note 4 of Notes to Condensed Consolidated
Financial Statements.
The Company believes its cash flows from operations and funds available
from existing or anticipated borrowing arrangements will be adequate to
finance capital expenditures and working capital requirements for the
foreseeable future.
12
<PAGE>
Part II - OTHER INFORMATION
Giddings & Lewis, Inc.
Form 10-Q
October 1, 1995
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
3.1 Articles of Amendment relating to Class A Preferred
Stock, Series B, of Giddings & Lewis, Inc.
3.2 Restated Articles of Incorporation of
Giddings & Lewis, Inc., as amended to date.
4.1 Indenture between Giddings & Lewis, Inc. and Firstar
Trust Company, as Trustee, dated as of August 7, 1995
[Incorporated by reference to Exhibit 4.1 to Amendment
No. 1 to Giddings & Lewis, Inc.'s Registration
Statement on Form S-3 (Registration No. 33-61237)]
4.2 Officer's Certificate, dated as of September 26, 1995,
relating to Giddings & Lewis, Inc.'s 7 1/2% Notes due
2005 [Incorporated by reference to Exhibit 4 to
Giddings & Lewis, Inc.'s Current Report on Form 8-K,
dated September 26, 1995]
4.3 Rights Agreement, dated as of August 23, 1995, between
Giddings & Lewis, Inc. and Firstar Trust Company, as
Rights Agent [Incorporated by reference to Exhibit 4.1
to Giddings & Lewis, Inc.'s Current Report on Form 8-
K, dated August 23, 1995]
27 Financial Data Schedule
(b) Reports on Form 8-K
The Company filed a Current Report on Form 8-K, dated
July 19, 1995, under Item 5 to update certain financial
information related to the acquisition of Fadal Engineering
Company, Inc. This Form 8-K included historical financial
statements of Fadal Engineering Company, Inc. at and for
the three months ended April 2, 1995 and March 31, 1994 and
pro forma financial statements of the Company at and for
the three months ended April 2, 1995.
13
<PAGE>
The Company filed a Current Report on Form 8-K, dated
August 23, 1995, under Items 5 and 7 to report the
declaration of a dividend of preferred share purchase
rights in connection with the execution and delivery of a
new Rights Agreement between the Company and Firstar Trust
Company. The Company also reported its decision to redeem
the existing preferred share purchase rights.
The Company filed a Current Report on Form 8-K, dated
September 26, 1995, under Items 5 and 7 to report entering
into an agreement to sell $100,000,000 principal amount of
the Company's 7 1/2% Notes due 2005 in a public offering.
14
<PAGE>
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Giddings & Lewis, Inc.
Date: November 13, 1995 /s/ Joseph R. Coppola
Joseph R. Coppola
Chairman and Chief Executive
Officer
Date: November 13, 1995 /s/ Richard C. Kleinfeldt
Richard C. Kleinfeldt
Vice-President - Finance and
Secretary (Chief Financial and
Accounting Officer)
15
<PAGE>
EXHIBIT INDEX
Exhibit No. Exhibit Description
3.1 Articles of Amendment relating to Class A Preferred Stock,
Series B, of Giddings & Lewis, Inc.
3.2 Restated Articles of Incorporation of Giddings & Lewis,
Inc., as amended to date.
4.1 Indenture between Giddings & Lewis, Inc. and Firstar Trust
Company, as Trustee, dated as of August 7, 1995
[Incorporated by reference to Exhibit 4.1 to Amendment No. 1
to Giddings & Lewis, Inc.'s Registration Statement on Form
S-3 (Registration No. 33-61237)]
4.2 Officer's Certificate, dated as of September 26, 1995,
relating to Giddings & Lewis, Inc.'s 7 1/2% Notes due 2005
[Incorporated by reference to Exhibit 4 to Giddings & Lewis,
Inc.'s Current Report on Form 8-K, dated September 26, 1995]
4.3 Rights Agreement, dated as of August 23, 1995, between
Giddings & Lewis, Inc. and Firstar Trust Company, as Rights
Agent [Incorporated by reference to Exhibit 4.1 to
Giddings & Lewis, Inc.'s Current Report on Form 8-K, dated
August 23, 1995]
27 Financial Data Schedule
16
ARTICLES OF AMENDMENT
relating to
CLASS A PREFERRED STOCK, SERIES B
of
GIDDINGS & LEWIS, INC.
Pursuant to Sections 180.0602 and 180.1002
of the Wisconsin Business Corporation Law
I, Richard C. Kleinfeldt, Vice President-Finance and Secretary
of Giddings & Lewis, Inc., a corporation organized and existing under the
Wisconsin Business Corporation Law (the "Corporation"), in accordance with
the provisions of Sections 180.0602 and 180.1002 hereof, DO HEREBY CERTIFY
THAT:
A. Pursuant to the authority conferred upon the Board of Directors
by the Restated Articles of Incorporation, as amended, of the Corporation
and in accordance with Sections 180.0602 and 180.1002 of the Wisconsin
Business Corporation Law, the Board of Directors of the Corporation
adopted a resolution on August 23, 1995, creating a series of shares of
Class A Preferred Stock, $.10 par value, of the Corporation, designated as
Class A Preferred Stock, Series B.
B. Said resolution of the Board of Directors of the Corporation
creating the series designated as Class A Preferred Stock, Series B,
provides that said series shall have such designation and number of shares
and such preferences, limitations and relative rights as are set forth in
the paragraph below, which paragraph shall constitute Paragraph (6) of
Section B of Article IV of the Corporation's Restated Articles of
Incorporation:
(6) Class A Preferred Stock, Series B.
(i) Designation and Amount. There is hereby
created a series of Class A Preferred Stock which shall
be designated as "Class A Preferred Stock, Series B" (the
"Class A Preferred Stock, Series B"); the number of
shares constituting such series shall be Seven Hundred
Thousand (700,000). Such number of shares may be
increased or decreased by resolution of the Board of
Directors; provided, that no decrease shall reduce the
number of shares of Class A Preferred Stock, Series B, to
a number less than the number of shares then outstanding
plus the number of shares reserved for issuance upon the
exercise of outstanding options, rights or warrants or
upon the conversion of any outstanding securities issued
by the Corporation into Class A Preferred Stock,
Series B.
(ii) Dividends and Distributions.
(I) The holders of shares of Class A
Preferred Stock, Series B, in preference to the
holders of Common Stock of the Corporation and
of any other junior stock, shall be entitled to
receive, when, as and if declared by the Board
of Directors out of funds legally available for
the purpose, quarterly dividends payable in
cash on the first business days of January,
April, July and October in each year (each such
date being referred to herein as a "Quarterly
Dividend Payment Date"), commencing on the
first Quarterly Dividend Payment Date after the
first issuance of a share or fraction of a
share of Class A Preferred Stock, Series B, in
an amount per share (rounded to the nearest
cent) equal to the greater of (a) $1.00 or (b)
subject to the provision for adjustment
hereinafter set forth, 100 times the aggregate
per share amount of all cash dividends, and 100
times the aggregate per share amount (payable
in kind) of all noncash dividends or other
distributions, other than a dividend payable in
shares of Common Stock or a subdivision of the
outstanding shares of Common Stock (by
reclassification or otherwise), declared on the
Common Stock since the immediately preceding
Quarterly Dividend Payment Date, or, with
respect to the first Quarterly Payment Date,
since the first issuance of any share or
fraction of a share of Class A Preferred Stock,
Series B. In the event the Corporation shall
at any time after August 23, 1995 (the "Rights
Declaration Date") (i) declare any dividend on
Common Stock payable in shares of Common Stock,
(ii) subdivide the outstanding Common Stock, or
(iii) combine the outstanding Common Stock into
a smaller number of shares, then in each such
case the amount to which holders of shares of
Class A Preferred Stock, Series B, were
entitled immediately prior to such event under
clause (b) of the preceding sentence shall be
adjusted by multiplying such amount by a
fraction the numerator of which is the number
of shares of Common Stock that are outstanding
immediately after such event and the
denominator of which is the number of shares of
Common Stock that were outstanding immediately
prior to such event.
(II) The Corporation shall declare a
dividend or distribution on the Class A
Preferred Stock, Series B, as provided in
paragraph (I) above immediately after it
declares a dividend or distribution on the
Common Stock (other than a dividend payable in
shares of Common Stock); provided that, in the
event no dividend or distribution shall have
been declared on the Common Stock during the
period between any Quarterly Dividend Payment
Date and the next subsequent Quarterly Dividend
Payment Date, a dividend of $1.00 per share on
the Class A Preferred Stock, Series B, shall
nevertheless be payable on such subsequent
Quarterly Dividend Payment Date.
(III) Dividends shall begin to
accrue and be cumulative on outstanding shares
of Class A Preferred Stock, Series B, from the
Quarterly Dividend Payment Date next preceding
the date of issue of such shares of Class A
Preferred Stock, Series B, unless the date of
issue of such shares is prior to the record
date for the first Quarterly Dividend Payment
Date, in which case dividends on such shares
shall begin to accrue from the date of issue of
such shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date
after the record date for the determination of
holders of shares of Class A Preferred Stock,
Series B, entitled to receive a quarterly
dividend and before such Quarterly Dividend
Payment Date, in either of which events such
dividends shall begin to accrue and be
cumulative from such Quarterly Dividend Payment
Date. Accrued but unpaid dividends shall not
bear interest. Dividends paid on the shares of
Class A Preferred Stock, Series B, in an amount
less than the total amount of such dividends at
the time accrued and payable on such shares
shall be allocated pro rata on a share-by-share
basis among all such shares at the time
outstanding. The Board of Directors may fix a
record date for the determination of holders of
shares of Class A Preferred Stock, Series B,
entitled to receive payment of a dividend or
distribution declared thereon, which record
date shall be no more than 30 days prior to the
date fixed for the payment thereof.
(iii) Voting Rights. The holders of
shares of Class A Preferred Stock, Series B, shall have
the following voting rights:
(I) Subject to the provision for
adjustment hereinafter set forth, each share of
Class A Preferred Stock, Series B, shall
entitle the holder thereof to 100 votes on all
matters submitted to a vote of the shareholders
of the Corporation. In the event the
Corporation shall at any time declare or pay
any dividend on Common Stock payable in shares
of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding
shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in
shares of Common Stock) into a greater or
lesser number of shares of Common Stock, then
in each such case the number of votes per share
to which holders of shares of Class A Preferred
Stock, Series B, were entitled immediately
prior to such event shall be adjusted by
multiplying such number by a fraction the
numerator of which is the number of shares of
Common Stock that are outstanding immediately
after such event and the denominator of which
is the number of shares of Common Stock that
were outstanding immediately prior to such
event.
(II) Except as otherwise provided herein,
in any other resolution of the Board of
Directors creating a series of Class A
Preferred Stock or any similar stock, or by
law, the holders of shares of Class A Preferred
Stock, Series B, and the holders of shares of
Common Stock shall vote together as one class
on all matters submitted to a vote of
shareholders of the Corporation.
(III) Except as set forth herein,
holders of Class A Preferred Stock, Series B,
shall have no special voting rights and their
consent shall not be required (except to the
extent they are entitled to vote with holders
of Common Stock as set forth herein) for taking
any corporate action.
(iv) Certain Restrictions.
(I) Whenever quarterly dividends or other
dividends or distributions payable on the Class
A Preferred Stock, Series B, as provided in
subparagraph (ii) are in arrears, thereafter
and until all accrued and unpaid dividends and
distributions, whether or not declared, on
shares of Class A Preferred Stock, Series B,
outstanding shall have been paid in full, the
Corporation shall not:
(1) declare or pay dividends
on, make any other distributions on,
or redeem or purchase or otherwise
acquire for consideration any shares
of stock ranking junior (either as to
dividends or upon liquidation,
dissolution or winding up) to the
Class A Preferred Stock, Series B;
(2) declare or pay dividends
on or make any other distributions on
any shares of stock ranking on a
parity (either as to dividends or
upon liquidation, dissolution or
winding up) with the Class A
Preferred Stock, Series B, except
dividends paid ratably on the Class A
Preferred Stock, Series B, and all
such parity stock on which dividends
are payable or in arrears in
proportion to the total amounts to
which the holders of all such shares
are then entitled;
(3) redeem or purchase or
otherwise acquire for consideration
shares of any stock ranking on a
parity (either as to dividends or
upon liquidation, dissolution or
winding up) with the Class A
Preferred Stock, Series B, provided
that the Corporation may at any time
redeem, purchase or otherwise acquire
shares of any such parity stock in
exchange for shares of any stock of
the Corporation ranking junior to or
on a parity with (both as to
dividends or upon dissolution,
liquidation or winding up) the Class
A Preferred Stock, Series B; or
(4) purchase or otherwise
acquire for consideration any shares
of Class A Preferred Stock, Series B,
or any shares of stock ranking on a
parity with the Class A Preferred
Stock, Series B, except in accordance
with a purchase offer made in writing
or by publication (as determined by
the Board of Directors) to all
holders of such shares upon such
terms as the Board of Directors,
after consideration of the respective
annual dividend rates and other
relative rights and preferences of
the respective series and classes,
shall determine in good faith will
result in fair and equitable
treatment among the respective series
or classes.
(II) The Corporation shall not permit any
corporation of which an amount of voting
securities sufficient to elect at least a
majority of the directors of such corporation
is beneficially owned, directly or indirectly,
by the Corporation or otherwise controlled by
the Corporation to purchase or otherwise
acquire for consideration any shares of stock
of the Corporation unless the Corporation
could, under paragraph (I) of this subparagraph
(iv), purchase or otherwise acquire such shares
at such time and in such manner.
(v) Reacquired Shares. Any shares of Class A
Preferred Stock, Series B, purchased or otherwise
acquired by the Corporation in any manner whatsoever
shall be retired and cancelled promptly after the
acquisition thereof. All such shares shall upon their
cancellation become authorized but unissued shares of
Class A Preferred Stock, par value $.10 per share, and
may be reissued as part of a new series of Class A
Preferred Stock, par value $.10 per share, to be created
by resolution or resolutions of the Board of Directors,
subject to the conditions and restrictions on issuance
set forth herein.
(vi) Liquidation, Dissolution or Winding Up.
Upon any liquidation, dissolution or winding up of the
Corporation, no distribution shall be made (1) to the
holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up)
to the Class A Preferred Stock, Series B, unless, prior
thereto, the holders of shares of Class A Preferred
Stock, Series B, shall have received $100 per share, plus
an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the
date of such payment, provided that the holders of shares
of Class A Preferred Stock, Series B, shall be entitled
to receive an aggregate amount per share, subject to the
provision for adjustment hereinafter set forth, equal to
100 times the aggregate amount to be distributed per
share to holders of shares of Common Stock, or (2) to the
holders of shares of stock ranking on a parity (either as
to dividends or upon liquidation, dissolution or winding
up) with the Class A Preferred Stock, Series B, except
distributions made ratably on the Class A Preferred
Stock, Series B, and all other such parity stock in
proportion to the total amounts to which the holders of
all such shares are entitled upon such liquidation,
dissolution or winding up. In the event the Corporation
shall at any time declare or pay any dividend on the
Common Stock payable in shares of Common Stock, or effect
a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification
or otherwise than by payment of a dividend in shares of
Common Stock) into a greater or lesser number of shares
of Common Stock, then in each such case the aggregate
amount to which holders of shares of Class A Preferred
Stock, Series B, were entitled immediately prior to such
event under the proviso in clause (1) of the preceding
sentence shall be adjusted by multiplying such amount by
a fraction the numerator of which is the number of shares
of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of
Common Stock that were outstanding immediately prior to
such event.
(vii) Consolidation, Merger, etc. In
case the Corporation shall enter into any consolidation,
merger, combination or other transaction in which the
shares of Common Stock are exchanged for or changed into
other stock or securities, cash and/or any other
property, then in any such case the shares of Class A
Preferred Stock, Series B, shall at the same time be
similarly exchanged or changed in an amount per share
(subject to the provision for adjustment hereinafter set
forth) equal to 100 times the aggregate amount of stock,
securities, cash and/or any other property (payable in
kind), as the case may be, into which or for which each
share of Common Stock is changed or exchanged. In the
event the Corporation shall at any time after the Rights
Declaration Date (1) declare any dividend on Common Stock
payable in shares of Common Stock, (2) subdivide the
outstanding Common Stock, or (3) combine the outstanding
Common Stock into a smaller number of shares, then in
each such case the amount set forth in the preceding
sentence with respect to the exchange or change of shares
of Class A Preferred Stock, Series B, shall be adjusted
by multiplying such amount by a fraction the numerator of
which is the number of shares of Common Stock that are
outstanding immediately after such event and the
denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such
event.
(viii) No Redemption. The shares of Class
A Preferred Stock, Series B, shall not be redeemable.
(ix) Fractional Shares. Class A Preferred
Stock, Series B, may be issued in fractions of a share
which shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights,
receive dividends, participate in distributions and to
have the benefit of all other rights of holders of Class
A Preferred Stock, Series B.
* * *
C. None of the shares of Class A Preferred Stock, Series B, have
been issued as of the date hereof.
D. The amendment creating the Class A Preferred Stock, Series B, was
adopted by the Board of Directors of the Corporation in accordance with
Section 180.1002 of the Wisconsin Business Corporation Law and shareholder
action was not required.
IN WITNESS WHEREOF, the undersigned has executed and subscribed
these Articles of Amendment on behalf of the Corporation and does affirm
the foregoing as true this 23rd day of August, 1995.
By: /s/ Richard C. Kleinfeldt
Richard C. Kleinfeldt
Vice President-Finance and
Secretary
______________
This instrument was drafted by, and should be returned to, Jay O.
Rothman of the firm of Foley & Lardner, 777 East Wisconsin, Milwaukee,
Wisconsin 53202.
Composite Copy
Reflecting Amendments
through August 25, 1995
RESTATED ARTICLES OF INCORPORATION
OF
GIDDINGS & LEWIS, INC., AS AMENDED
ARTICLE I
The name of the Corporation is GIDDINGS & LEWIS, INC.
ARTICLE II
The period of existence of the Corporation shall be perpetual.
ARTICLE III
The purpose or purposes for which the Corporation is organized
is to carry on and engage in any lawful activity within the purposes for
which corporations may be organized under the Wisconsin Business
Corporation Law, Chapter 180 of the Wisconsin Statutes.
ARTICLE IV
The aggregate number of shares which the Corporation shall have
the authority to issue shall be seventy-four million (74,000,000) shares,
consisting of: (i) seventy million (70,000,000) shares of a class
designated as "Common Stock," with a par value of $.10 per share; (ii)
three million (3,000,000) shares of a class designated as "Class A
Preferred Stock," with a par value of $.10 per share; and (iii) one
million (1,000,000) shares of a class designated as "Senior Preferred
Stock," with a par value of $1.00 per share. For purposes of these
Restated Articles of Incorporation, the Class A Preferred Stock and the
Senior Preferred Stock are collectively referred to herein as the
"Preferred Stock."
The designation, relative rights, preferences and limitations of
the shares of each class and the authority of the Board of Directors of
the Corporation to establish and to designate series of the Senior
Preferred Stock and of the Class A Preferred Stock and to fix the
variations in the relative rights, preferences and limitations as between
such series, shall be as set forth herein.
A. SENIOR PREFERRED STOCK.
(1) Series and Variations Between Series. The Board of
Directors of the Corporation is authorized, subject to limitations
prescribed by law and the provisions of this paragraph A, to provide for
the issuance of Senior Preferred Stock in series, each of such series to
be distinctively designated, and to have such redemption rights, dividend
rights, rights on dissolution or distribution of assets, conversion or
exchange rights, voting powers, designations, preferences and relative
participating, optional or other special rights, if any, and such
qualifications, limitations or restrictions thereof as shall be provided
by the Board of Directors.
(2) Dividends. Before any dividends shall be paid or set apart
for payment upon shares of Class A Preferred Stock or Common Stock, the
holders of each series of Senior Preferred Stock shall be entitled to
receive dividends at the rate and at such times as specified in the
particular series. The holders of shares of Senior Preferred Stock shall
have no rights to participate with the holders of shares of Class A
Preferred Stock or the holders of shares of Common Stock in any
distribution of dividends in excess of the preferential dividends fixed
for such Senior Preferred Stock.
(3) Liquidation, Dissolution or Winding Up. In case of
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation, the holders of shares of each series of Senior Preferred
Stock shall be entitled to receive out of the assets of the Corporation in
money or money's worth the amount specified in the particular series for
each share at the time outstanding together with all accrued but unpaid
dividends thereon, before any of such assets shall be paid or distributed
to the holders of shares of Class A Preferred Stock or the holders of
shares of Common Stock. The holders of shares of Senior Preferred Stock
shall have no rights to participate with the holders of shares of Class A
Preferred Stock or the holders of shares of Common Stock in the assets of
the Corporation available for distribution to shareholders in excess of
the preferential amount fixed for such Senior Preferred Stock.
(4) Voting Rights. The holders of Senior Preferred Stock shall
have only such voting rights as are fixed for shares of such series by the
Board of Directors pursuant to this paragraph A or are provided by law.
B. CLASS A PREFERRED STOCK.
(1) Series and Variations Between Series. The Board of
Directors of the Corporation is authorized, subject to limitations
prescribed by law and the provisions of this paragraph B, to provide for
the issuance of the Class A Preferred Stock in series, to establish or
change the number of shares to be included in each such series and to fix
the designation, relative rights, preferences and limitations of the
shares of each such series. The authority of the Board of Directors of
the Corporation with respect to each series shall include, but not be
limited to, determination of the following:
(i) The number of shares constituting that series and
the distinctive designation of that series;
(ii) The dividend rate or rates on the shares of that
series and/or the method of determining such rate or rates
and the timing of dividend payments on the shares of such
series;
(iii) Whether and to what extent the shares of
that series shall have voting rights in addition to the
voting rights provided by law, which might include the
right to elect a specified number of directors in any case
or if dividends on such series were not paid for a
specified period of time;
(iv) Whether the shares of that series shall be
convertible into shares of stock of any other series, and,
if so, the terms and conditions of such conversion,
including the price or prices or the rate or rates of
conversion and the terms of adjustment thereof;
(v) Whether or not the shares of that series shall be
redeemable, and, if so, the terms and conditions of such
redemption, including the date or dates upon or after which
they shall be redeemable and the amount per share payable
in case of redemption, which amount may vary under
different conditions and at different redemption dates;
(vi) The rights of the shares of that series in the
event of voluntary or involuntary liquidation, dissolution
or winding up of the Corporation;
(vii) The obligation, if any, of the Corporation
to retire shares of that series pursuant to a sinking fund;
and
(viii) Any other relative rights, preferences and
limitations of that series.
Subject to the designations, relative rights, preferences and
limitations provided pursuant to this paragraph B, each share of Class A
Preferred Stock shall be of equal rank with each other share of Class A
Preferred Stock.
(2) Dividends. Before any dividends shall be paid or set apart
for payment upon shares of Common Stock, the holders of each series of
Class A Preferred Stock shall be entitled to receive dividends at the rate
and at such times as specified in the particular series. Dividends on
shares of Class A Preferred Stock shall be paid out of any funds legally
available for the payment of such dividends, when and if declared by the
Board of Directors. Such dividends shall accumulate on each share of
Class A Preferred Stock from the date of issuance. All dividends on
shares of Class A Preferred Stock shall be cumulative so that if the
Corporation shall not pay, on a timely basis, the specified dividend, or
any part thereof, on the shares of Class A Preferred Stock then issued and
outstanding, such deficiency shall thereafter be fully paid, but without
interest, before any dividend shall be paid or set apart for payment on
the Common Stock.
Any dividend paid upon the Class A Preferred Stock and at a time
when any accumulated dividends for any prior period are delinquent shall
be expressly declared as a dividend in whole or partial payment of the
accumulated dividend for the earliest dividend period for which dividends
are then delinquent, and shall be so designated to each shareholder to
whom payment is made. All shares of Class A Preferred Stock shall rank
equally and shall share ratably, in proportion to the rate of dividend of
the series, in all dividends paid or set aside for payment for any
dividend period or part thereof upon any such shares.
Except to the limited extent hereinafter provided, so long as
any shares of Class A Preferred Stock shall be outstanding, no dividend,
whether in cash, stock or otherwise, shall be paid or declared nor shall
any distribution be made on the Common Stock, nor shall any Common Stock
be purchased, redeemed or otherwise acquired for value by the Corporation,
nor shall any moneys be paid to or set aside or made available for a
sinking fund for the purchase or redemption of any Common Stock, unless:
(i) All dividends on the Class A Preferred Stock of
all series for all past dividend periods shall have been
paid or shall have been declared and a sum sufficient for
the payment thereof set apart; and
(ii) The Corporation shall have set aside all amounts
theretofore required to be set aside as and for all sinking
fund accounts, if any, for the redemption or purchase of
all series of Class A Preferred Stock for all past sinking
fund payment periods or dates.
The foregoing provisions shall not, however, apply to, or in any way
restrict (x) any acquisition of Common Stock in exchange solely for Common
Stock; (y) the acquisition of Common Stock through application of the
proceeds of the sale of Common Stock; or (z) stock dividends or
distributions payable only in shares of stock having rights and
preferences subordinate to the Class A Preferred Stock.
(3) Liquidation, Dissolution or Winding Up. In case of
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation, the holders of shares of each series of Class A Preferred
Stock shall be entitled to receive out of the assets of the Corporation in
money or money's worth the amount specified in the particular series for
each share at the time outstanding together with all accrued but unpaid
dividends thereon, before any of such assets shall be paid or distributed
to holders of Common Stock. In case of the voluntary or involuntary
liquidation, dissolution or winding up of the Corporation, if the assets
of the Corporation shall be insufficient to pay the holders of all shares
of Class A Preferred Stock then outstanding the entire amounts to which
they may be entitled, the holders of shares of each outstanding series of
Class A Preferred Stock shall share ratably in such assets in proportion
to the respective amounts payable in liquidation.
(4) Voting Rights. The holders of Class A Preferred Stock
shall have only such voting rights as are fixed for shares of each series
by the Board of Directors pursuant to this paragraph B or are provided by
law.
(5) Class A Preferred Stock, Series A.
(i) Designation and Amount. There is hereby created a series
of Class A Preferred Stock which shall be designated as "Class A Preferred
Stock, Series A" (the "Class A Preferred Stock, Series A"); the number of
shares constituting such series shall be Three Hundred Fifty Thousand
(350,000). Such number of shares may be increased or decreased by
resolution of the Board of Directors; provided, that no decrease shall
reduce the number of shares of Class A Preferred Stock, Series A, to a
number less than the number of shares then outstanding plus the number of
shares reserved for issuance upon the exercise of outstanding options,
rights or warrants or upon the conversion of any outstanding securities
issued by the Corporation into Class A Preferred Stock, Series A.
(ii) Dividends and Distributions.
(I) The holders of shares of Class A Preferred Stock, Series A,
in preference to the holders of Common Stock of the Corporation and of any
other junior stock, shall be entitled to receive, when, as and if declared
by the Board of Directors out of funds legally available for that purpose,
quarterly dividends payable in cash on the first business days of January,
April, July and October in each year (each such date being referred to
herein as a "Quarterly Dividend Payment Date"), commencing on the first
Quarterly Dividend Payment Date after the first issuance of a share or
fraction of a share of Class A Preferred Stock, Series A, in an amount per
share (rounded to the nearest cent) equal to the greater of (a) $1.00 or
(b) subject to the provision for adjustment hereinafter set forth, 100
times the aggregate per share amount of all cash dividends, and 100 times
the aggregate per share amount (payable in kind) of all noncash dividends
or other distributions, other than a dividend payable in shares of Common
Stock or a subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise), declared on the Common Stock since the
immediately preceding Quarterly Dividend Payment Date, or, with respect to
the first Quarterly Dividend Payment Date, since the first issuance of any
share or fraction of a share of Class A Preferred Stock, Series A. In the
event the Corporation shall at any time after February 7, 1990 (the
"Rights Declaration Date") (i) declare any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding Common
Stock, or (iii) combine the outstanding Common Stock into a smaller number
of shares, then in each such case the amount to which holders of shares of
Class A Preferred Stock, Series A, were entitled immediately prior to such
event under clause (b) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction the numerator of which is the number
of shares of Common Stock that are outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event.
(II) The Corporation shall declare a dividend or distribution on
the Class A Preferred Stock, Series A, as provided in paragraph (I) above
immediately after it declares a dividend or distribution on the Common
Stock (other than a dividend payable in shares of Common Stock); provided
that, in the event no dividend or distribution shall have been declared on
the Common Stock during the period between any Quarterly Dividend Payment
Date and the next subsequent Quarterly Dividend Payment Date, a dividend
of $1.00 per share on the Class A Preferred Stock, Series A, shall
nevertheless be payable on such subsequent Quarterly Dividend Payment
Date.
(III) Dividends shall begin to accrue and be cumulative on
outstanding shares of Class A Preferred Stock, Series A, from the
Quarterly Dividend Payment Date next preceding the date of issue of such
shares of Class A Preferred Stock, Series A, unless the date of issue of
such shares is prior to the record date for the first Quarterly Dividend
Payment Date, in which case dividends on such shares shall begin to accrue
from the date of issue of such shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Class A Preferred Stock, Series A,
entitled to receive a quarterly dividend and before such Quarterly
Dividend Payment Date, in either of which events such dividends shall
begin to accrue and be cumulative from such Quarterly Dividend Payment
Date. Accrued but unpaid dividends shall not bear interest. Dividends
paid on the shares of Class A Preferred Stock, Series A, in an amount less
than the total amount of such dividends at the time accrued and payable on
such shares shall be allocated pro rata on a share-by-share basis among
all such shares at the time outstanding. The Board of Directors may fix a
record date for the determination of holders of shares of Class A
Preferred Stock, Series A, entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be no more than 30
days prior to the date fixed for the payment thereof.
(iii) Voting Rights. The holders of shares of Class A
Preferred Stock, Series A, shall have the following voting rights:
(I) Subject to the provision for adjustment hereinafter set
forth, each share of Class A Preferred Stock, Series A, shall entitle the
holder thereof to 100 votes on all matters submitted to a vote of the
shareholders of the Corporation. In the event the Corporation shall at
any time declare or pay any dividend on Common Stock payable in shares of
Common Stock, or effect a subdivision or combination or consolidation of
the outstanding shares of Common Stock (by reclassification or otherwise
than by payment of a dividend in shares of Common Stock) into a greater or
lesser number of shares of Common Stock, then in each such case the number
of votes per share to which holders of shares of Class A Preferred Stock,
Series A, were entitled immediately prior to such event shall be adjusted
by multiplying such number by a fraction the numerator of which is the
number of shares of Common Stock that are outstanding immediately after
such event and the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such event.
(II) Except as otherwise provided herein, in any other
resolution of the Board of Directors creating a series of Class A
Preferred Stock or any similar stock, or by law, the holders of shares of
Class A Preferred Stock, Series A, and the holders of shares of Common
Stock shall vote together as one class on all matters submitted to a vote
of shareholders of the Corporation.
(III) Except as set forth herein, holders of Class A
Preferred Stock, Series A, shall have no special voting rights and their
consent shall not be required (except to the extent they are entitled to
vote with holders of Common Stock as set forth herein) for taking any
corporate action.
(iv) Certain Restrictions.
(I) Whenever quarterly dividends or other dividends or
distributions payable on the Class A Preferred Stock, Series A, as
provided in subparagraph (ii) are in arrears, thereafter and until all
accrued and unpaid dividends and distributions, whether or not declared,
on shares of Class A Preferred Stock, Series A, outstanding shall have
been paid in full, the Corporation shall not:
(1) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise
acquire for consideration any shares of stock ranking
junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Class A Preferred Stock,
Series A;
(2) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or
winding up) with the Class A Preferred Stock, Series A,
except dividends paid ratably on the Class A Preferred
Stock, Series A, and all such parity stock on which
dividends are payable or in arrears in proportion to the
total amounts to which the holders of all such shares are
then entitled;
(3) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or
winding up) with the Class A Preferred Stock, Series A,
provided that the Corporation may at any time redeem,
purchase or otherwise acquire shares of any such parity
stock in exchange for shares of any stock of the
Corporation ranking junior to or on a parity with (both as
to dividends or upon dissolution, liquidation or winding
up) the Class A Preferred Stock, Series A; or
(4) purchase or otherwise acquire for consideration
any shares of Class A Preferred Stock, Series A, or any
shares of stock ranking on a parity with the Class A
Preferred Stock, Series A, except in accordance with a
purchase offer made in writing or by publication (as
determined by the Board of Directors) to all holders of
such shares upon such terms as the Board of Directors,
after consideration of the respective annual dividend rates
and other relative rights and preferences of the respective
series and classes, shall determine in good faith will
result in fair and equitable treatment among the respective
series or classes.
(II) The Corporation shall not permit any corporation of which
an amount of voting securities sufficient to elect at least a majority of
the directors of such corporation is beneficially owned, directly or
indirectly, by the Corporation or otherwise controlled by the Corporation
to purchase or otherwise acquire for consideration any shares of stock of
the Corporation unless the Corporation could, under paragraph (I) of this
subparagraph (iv), purchase or otherwise acquire such shares at such time
and in such manner.
(v) Reacquired Shares. Any shares of Class A Preferred Stock,
Series A, purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and cancelled promptly after the acquisition
thereof. All such shares shall upon their cancellation become authorized
but unissued shares of Class A Preferred Stock, par value $.10 per share,
and may be reissued as part of a new series of Class A Preferred Stock,
par value $.10 per share, to be created by resolution or resolutions of
the Board of Directors, subject to the conditions and restrictions on
issuance set forth herein.
(vi) Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Corporation, no distribution
shall be made (1) to the holders of shares of stock ranking junior (either
as to dividends or upon liquidation, dissolution or winding up) to the
Class A Preferred Stock, Series A, unless, prior thereto, the holders of
shares of Class A Preferred Stock, Series A, shall have received $100 per
share, plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of such
payment, provided that the holders of shares of Class A Preferred Stock,
Series A, shall be entitled to receive an aggregate amount per share,
subject to the provision for adjustment hereinafter set forth, equal to
100 times the aggregate amount to be distributed per share to holders of
shares of Common Stock, or (2) to the holders of shares of stock ranking
on a parity (either as to dividends or upon liquidation, dissolution or
winding up) with the Class A Preferred Stock, Series A, except
distributions made ratably on the Class A Preferred Stock, Series A, and
all other such parity stock in proportion to the total amounts to which
the holders of all such shares are entitled upon such liquidation,
dissolution or winding up. In the event the Corporation shall at any time
declare or pay any dividend on the Common Stock payable in shares of
Common Stock, or effect a subdivision or combination or consolidation of
the outstanding shares of Common Stock (by reclassification or otherwise
than by payment of a dividend in shares of Common Stock) into a greater or
lesser number of shares of Common Stock, then in each such case the
aggregate amount to which holders of shares of Class A Preferred Stock,
Series A, were entitled immediately prior to such event under the proviso
in clause (1) of the preceding sentence shall be adjusted by multiplying
such amount by a fraction the numerator of which is the number of shares
of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(vii) Consolidation, Merger, etc. In case the Corporation
shall enter into any consolidation, merger, combination or other
transaction in which the shares of Common Stock are exchanged for or
changed into other stock or securities, cash and/or any other property,
then in any such case the shares of Class A Preferred Stock, Series A,
shall at the same time be similarly exchanged or changed in an amount per
share (subject to the provision for adjustment hereinafter set forth)
equal to 100 times the aggregate amount of stock, securities, cash and/or
any other property (payable in kind), as the case may be, into which or
for which each share of Common Stock is changed or exchanged. In the
event the Corporation shall at any time after the Rights Declaration Date
(1) declare any dividend on Common Stock payable in shares of Common
Stock, (2) subdivide the outstanding Common Stock, or (3) combine the
outstanding Common Stock into a smaller number of shares, then in each
such case the amount set forth in the preceding sentence with respect to
the exchange or change of shares of Class A Preferred Stock, Series A,
shall be adjusted by multiplying such amount by a fraction the numerator
of which is the number of shares of Common Stock that are outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such
event.
(viii) No Redemption. The shares of Class A Preferred Stock,
Series A, shall not be redeemable.
(ix) Fractional Shares. Class A Preferred Stock, Series A, may
be issued in fractions of a share which shall entitle the holder, in
proportion to such holder's fractional shares, to exercise voting rights,
receive dividends, participate in distributions and to have the benefit of
all other rights of holders of Class A Preferred Stock, Series A.
(6) Class A Preferred Stock, Series B.
(i) Designation and Amount. There is hereby created a series
of Class A Preferred Stock which shall be designated as "Class A Preferred
Stock, Series B" (the "Class A Preferred Stock, Series B"); the number of
shares constituting such series shall be Seven Hundred Thousand (700,000).
Such number of shares may be increased or decreased by resolution of the
Board of Directors; provided, that no decrease shall reduce the number of
shares of Class A Preferred Stock, Series B, to a number less than the
number of shares then outstanding plus the number of shares reserved for
issuance upon the exercise of outstanding options, rights or warrants or
upon the conversion of any outstanding securities issued by the
Corporation into Class A Preferred Stock, Series B.
(ii) Dividends and Distributions.
(I) The holders of shares of Class A Preferred Stock, Series B,
in preference to the holders of Common Stock of the Corporation and of any
other junior stock, shall be entitled to receive, when, as and if declared
by the Board of Directors out of funds legally available for the purpose,
quarterly dividends payable in cash on the first business days of January,
April, July and October in each year (each such date being referred to
herein as a "Quarterly Dividend Payment Date"), commencing on the first
Quarterly Dividend Payment Date after the first issuance of a share or
fraction of a share of Class A Preferred Stock, Series B, in an amount per
share (rounded to the nearest cent) equal to the greater of (a) $1.00 or
(b) subject to the provision for adjustment hereinafter set forth, 100
times the aggregate per share amount of all cash dividends, and 100 times
the aggregate per share amount (payable in kind) of all noncash dividends
or other distributions, other than a dividend payable in shares of Common
Stock or a subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise), declared on the Common Stock since the
immediately preceding Quarterly Dividend Payment Date, or, with respect to
the first Quarterly Payment Date, since the first issuance of any share or
fraction of a share of Class A Preferred Stock, Series B. In the event
the Corporation shall at any time after August 23, 1995 (the "Rights
Declaration Date") (i) declare any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding Common Stock, or
(iii) combine the outstanding Common Stock into a smaller number of
shares, then in each such case the amount to which holders of shares of
Class A Preferred Stock, Series B, were entitled immediately prior to such
event under clause (b) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction the numerator of which is the number
of shares of Common Stock that are outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event.
(II) The Corporation shall declare a dividend or distribution on
the Class A Preferred Stock, Series B, as provided in paragraph (I) above
immediately after it declares a dividend or distribution on the Common
Stock (other than a dividend payable in shares of Common Stock); provided
that, in the event no dividend or distribution shall have been declared on
the Common Stock during the period between any Quarterly Dividend Payment
Date and the next subsequent Quarterly Dividend Payment Date, a dividend
of $1.00 per share on the Class A Preferred Stock, Series B, shall
nevertheless be payable on such subsequent Quarterly Dividend Payment
Date.
(III) Dividends shall begin to accrue and be cumulative on
outstanding shares of Class A Preferred Stock, Series B, from the
Quarterly Dividend Payment Date next preceding the date of issue of such
shares of Class A Preferred Stock, Series B, unless the date of issue of
such shares is prior to the record date for the first Quarterly Dividend
Payment Date, in which case dividends on such shares shall begin to accrue
from the date of issue of such shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Class A Preferred Stock, Series B,
entitled to receive a quarterly dividend and before such Quarterly
Dividend Payment Date, in either of which events such dividends shall
begin to accrue and be cumulative from such Quarterly Dividend Payment
Date. Accrued but unpaid dividends shall not bear interest. Dividends
paid on the shares of Class A Preferred Stock, Series B, in an amount less
than the total amount of such dividends at the time accrued and payable on
such shares shall be allocated pro rata on a share-by-share basis among
all such shares at the time outstanding. The Board of Directors may fix a
record date for the determination of holders of shares of Class A
Preferred Stock, Series B, entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be no more than 30
days prior to the date fixed for the payment thereof.
(iii) Voting Rights. The holders of shares of Class A
Preferred Stock, Series B, shall have the following voting rights:
(I) Subject to the provision for adjustment hereinafter set
forth, each share of Class A Preferred Stock, Series B, shall entitle the
holder thereof to 100 votes on all matters submitted to a vote of the
shareholders of the Corporation. In the event the Corporation shall at
any time declare or pay any dividend on Common Stock payable in shares of
Common Stock, or effect a subdivision or combination or consolidation of
the outstanding shares of Common Stock (by reclassification or otherwise
than by payment of a dividend in shares of Common Stock) into a greater or
lesser number of shares of Common Stock, then in each such case the number
of votes per share to which holders of shares of Class A Preferred Stock,
Series B, were entitled immediately prior to such event shall be adjusted
by multiplying such number by a fraction the numerator of which is the
number of shares of Common Stock that are outstanding immediately after
such event and the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such event.
(II) Except as otherwise provided herein, in any other
resolution of the Board of Directors creating a series of Class A
Preferred Stock or any similar stock, or by law, the holders of shares of
Class A Preferred Stock, Series B, and the holders of shares of Common
Stock shall vote together as one class on all matters submitted to a vote
of shareholders of the Corporation.
(III) Except as set forth herein, holders of Class A
Preferred Stock, Series B, shall have no special voting rights and their
consent shall not be required (except to the extent they are entitled to
vote with holders of Common Stock as set forth herein) for taking any
corporate action.
(iv) Certain Restrictions.
(I) Whenever quarterly dividends or other dividends or
distributions payable on the Class A Preferred Stock, Series B, as
provided in subparagraph (ii) are in arrears, thereafter and until all
accrued and unpaid dividends and distributions, whether or not declared,
on shares of Class A Preferred Stock, Series B, outstanding shall have
been paid in full, the Corporation shall not:
(1) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise
acquire for consideration any shares of stock ranking
junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Class A Preferred Stock,
Series B;
(2) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or
winding up) with the Class A Preferred Stock, Series B,
except dividends paid ratably on the Class A Preferred
Stock, Series B, and all such parity stock on which
dividends are payable or in arrears in proportion to the
total amounts to which the holders of all such shares are
then entitled;
(3) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or
winding up) with the Class A Preferred Stock, Series B,
provided that the Corporation may at any time redeem,
purchase or otherwise acquire shares of any such parity
stock in exchange for shares of any stock of the
Corporation ranking junior to or on a parity with (both as
to dividends or upon dissolution, liquidation or winding
up) the Class A Preferred Stock, Series B; or
(4) purchase or otherwise acquire for consideration
any shares of Class A Preferred Stock, Series B, or any
shares of stock ranking on a parity with the Class A
Preferred Stock, Series B, except in accordance with a
purchase offer made in writing or by publication (as
determined by the Board of Directors) to all holders of
such shares upon such terms as the Board of Directors,
after consideration of the respective annual dividend rates
and other relative rights and preferences of the respective
series and classes, shall determine in good faith will
result in fair and equitable treatment among the respective
series or classes.
(II) The Corporation shall not permit any corporation of which
an amount of voting securities sufficient to elect at least a majority of
the directors of such corporation is beneficially owned, directly or
indirectly, by the Corporation or otherwise controlled by the Corporation
to purchase or otherwise acquire for consideration any shares of stock of
the Corporation unless the Corporation could, under paragraph (I) of this
subparagraph (iv), purchase or otherwise acquire such shares at such time
and in such manner.
(v) Reacquired Shares. Any shares of Class A Preferred Stock,
Series B, purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and cancelled promptly after the acquisition
thereof. All such shares shall upon their cancellation become authorized
but unissued shares of Class A Preferred Stock, par value $.10 per share,
and may be reissued as part of a new series of Class A Preferred Stock,
par value $.10 per share, to be created by resolution or resolutions of
the Board of Directors, subject to the conditions and restrictions on
issuance set forth herein.
(vi) Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Corporation, no distribution
shall be made (1) to the holders of shares of stock ranking junior (either
as to dividends or upon liquidation, dissolution or winding up) to the
Class A Preferred Stock, Series B, unless, prior thereto, the holders of
shares of Class A Preferred Stock, Series B, shall have received $100 per
share, plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of such
payment, provided that the holders of shares of Class A Preferred Stock,
Series B, shall be entitled to receive an aggregate amount per share,
subject to the provision for adjustment hereinafter set forth, equal to
100 times the aggregate amount to be distributed per share to holders of
shares of Common Stock, or (2) to the holders of shares of stock ranking
on a parity (either as to dividends or upon liquidation, dissolution or
winding up) with the Class A Preferred Stock, Series B, except
distributions made ratably on the Class A Preferred Stock, Series B, and
all other such parity stock in proportion to the total amounts to which
the holders of all such shares are entitled upon such liquidation,
dissolution or winding up. In the event the Corporation shall at any time
declare or pay any dividend on the Common Stock payable in shares of
Common Stock, or effect a subdivision or combination or consolidation of
the outstanding shares of Common Stock (by reclassification or otherwise
than by payment of a dividend in shares of Common Stock) into a greater or
lesser number of shares of Common Stock, then in each such case the
aggregate amount to which holders of shares of Class A Preferred Stock,
Series B, were entitled immediately prior to such event under the proviso
in clause (1) of the preceding sentence shall be adjusted by multiplying
such amount by a fraction the numerator of which is the number of shares
of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(vii) Consolidation, Merger, etc. In case the Corporation
shall enter into any consolidation, merger, combination or other
transaction in which the shares of Common Stock are exchanged for or
changed into other stock or securities, cash and/or any other property,
then in any such case the shares of Class A Preferred Stock, Series B,
shall at the same time be similarly exchanged or changed in an amount per
share (subject to the provision for adjustment hereinafter set forth)
equal to 100 times the aggregate amount of stock, securities, cash and/or
any other property (payable in kind), as the case may be, into which or
for which each share of Common Stock is changed or exchanged. In the
event the Corporation shall at any time after the Rights Declaration Date
(1) declare any dividend on Common Stock payable in shares of Common
Stock, (2) subdivide the outstanding Common Stock, or (3) combine the
outstanding Common Stock into a smaller number of shares, then in each
such case the amount set forth in the preceding sentence with respect to
the exchange or change of shares of Class A Preferred Stock, Series B,
shall be adjusted by multiplying such amount by a fraction the numerator
of which is the number of shares of Common Stock that are outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such
event.
(viii) No Redemption. The shares of Class A Preferred Stock,
Series B, shall not be redeemable.
(ix) Fractional Shares. Class A Preferred Stock, Series B, may
be issued in fractions of a share which shall entitle the holder, in
proportion to such holder's fractional shares, to exercise voting rights,
receive dividends, participate in distributions and to have the benefit of
all other rights of holders of Class A Preferred Stock, Series B.
C. COMMON STOCK.
(1) Dividends. Subject to the provisions of this Article IV,
the Board of Directors may, in its sole discretion, out of funds legally
available for the payment of dividends and at such times and in such
manner as determined by the Board of Directors, declare and pay dividends
on the Common Stock.
(2) Liquidation Rights. In the event of any voluntary or
involuntary liquidation, dissolution or winding up of the Corporation,
after there shall have been paid to or set aside for the holders of shares
of Senior Preferred Stock and Class A Preferred Stock the full
preferential amounts to which they are entitled, the holders of
outstanding shares of Common Stock shall be entitled to receive pro rata,
according to the number of shares held by each, the remaining assets of
the Corporation available for distribution.
(3) Voting Rights. Except as otherwise provided by law and
except as may be determined by the Board of Directors with respect to the
Senior Preferred Stock and the Class A Preferred Stock pursuant to
paragraphs A and B of this Article IV, only the holders of Common Stock
shall be entitled to vote for the election of directors of the Corporation
and for all other corporate purposes. Upon any such vote the holders of
Common Stock shall, except as otherwise provided by law, be entitled to
one vote for each share of Common Stock held by them respectively.
D. PREEMPTIVE RIGHTS.
Except as the Board of Directors of the Corporation may
otherwise determine from time to time, no shareholder of the Corporation
shall have any preferential or preemptive right to subscribe for or
purchase from the Corporation any new or additional shares of capital
stock of the Corporation or securities convertible into shares of capital
stock, whether now or hereafter authorized.
ARTICLE V
A. POWERS, NUMBER, QUALIFICATIONS, CLASSIFICATION AND
NOMINATION OF DIRECTORS.
The general powers, number, classification and tenure of the
directors of the Corporation shall be as set forth in Section 3.01 of
Article III of the By-laws of the Corporation (and as such Section shall
exist from time to time). Such Section 3.01 of the By-laws, or any
provision thereof, may only be amended, altered, changed or repealed by
the affirmative vote of shareholders holding at least sixty-six and two-
thirds percent (66-2/3%) of the voting power of the then outstanding
shares of all classes of capital stock of the Corporation generally
possessing voting rights in the election of directors, considered for this
purpose as a single class; provided, however, that the Board of Directors,
by resolution adopted by the Requisite Vote (as hereinafter defined), may
amend, alter, change or repeal Section 3.01 of the By-laws, or any
provision thereof, without a vote of the shareholders. As used herein,
the term "Requisite Vote" shall mean the affirmative vote of at least two-
thirds of the directors then in office plus one director.
B. REMOVAL OF DIRECTORS.
Any director may be removed from office with or without cause,
but only by the affirmative vote of shareholders holding at least sixty-
six and two-thirds percent (66-2/3%) of the voting power of the then
outstanding shares of all classes of capital stock of the Corporation
generally possessing voting rights in the election of directors,
considered for this purpose as a single class; provided, however, that if
the Board of Directors by resolution adopted by the Requisite Vote shall
have recommended removal of a director, then the shareholders may remove
such director from office with or without cause by a majority vote of such
outstanding shares.
C. VACANCIES.
Any vacancy occurring in the Board of Directors, including a
vacancy created by the removal of a director or an increase in the number
of directors, shall be filled by the affirmative vote of a majority of the
directors then in office, although less than a quorum of the Board of
Directors. Any director so elected shall serve until the next election of
the class for which such director shall have been chosen and until his
successor shall be elected and qualified.
D. AMENDMENTS.
(1) Notwithstanding any other provision of these Articles of
Incorporation, the provisions of this Article V shall be amended, altered,
changed or repealed only by the affirmative vote of shareholders holding
at least sixty-six and two-thirds percent (66-2/3%) of the voting power of
the then outstanding shares of all classes of capital stock of the
Corporation generally possessing voting rights in the election of
directors, considered for this purpose as a single class.
(2) Notwithstanding the foregoing and any provisions in the By-
laws of the Corporation, whenever the holders of any one or more series of
Preferred Stock issued by the Corporation pursuant to Article IV hereof
shall have the right, voting separately as a class or by series, to elect
directors at an annual or special meeting of shareholders, the election,
term of office, filling of vacancies and other features of such
directorships shall be governed by the terms of the series of Preferred
Stock applicable thereto, and such directors so elected shall not be
divided into classes unless expressly provided by the terms of the
applicable series.
ARTICLE VI
The address of the registered office of the Corporation is 142
Doty Street, Fond du Lac, Wisconsin 54935, in Fond du Lac County. The
name of the Corporation's registered agent at such address is Richard C.
Kleinfeldt.
ARTICLE VII
The Corporation shall have the express right to acquire and
dispose of its own shares on such terms and conditions as the Board of
Directors may from time to time determine and agree.
ARTICLE VIII
The directors and officers of the Corporation shall be entitled
to such rights of indemnification and otherwise as are provided by law and
by Article IX of the By-laws. Article IX of the By-laws, or any provision
thereof, shall be amended, altered, changed or repealed only by the
affirmative vote of shareholders holding at least sixty-six and two-thirds
percent (66-2/3%) of the voting power of the then outstanding shares of
all classes of capital stock of the Corporation generally possessing
voting rights in the election of directors, considered for this purpose as
a single class; provided, however, that the Board of Directors, by
resolution adopted by the affirmative vote of two-thirds of the directors
then in office plus one director, may amend, alter, change or repeal
Article IX of the By-laws, or any provision thereof, without a vote of the
shareholders.
ARTICLE IX
These Articles of Incorporation may be amended solely as
authorized hereby and by law at the time of amendment.
ARTICLE X
Sections 180.25(9) and 180.725 of the Wisconsin Business
Corporation Law as in effect on the date hereof, and as such Sections may
be amended from time to time, shall not apply to this Corporation.
* * *
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM GIDDINGS &
LEWIS' CONSOLIDATED BALANCE SHEET AT OCTOBER 1, 1995 AND CONSOLIDATED STATEMENT
OF INCOME FOR THE NINE MONTHS ENDED OCTOBER 1, 1995 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> OCT-01-1995
<CASH> 6,855
<SECURITIES> 0
<RECEIVABLES> 374,549
<ALLOWANCES> 2,547
<INVENTORY> 114,453
<CURRENT-ASSETS> 509,163
<PP&E> 236,838
<DEPRECIATION> 114,897
<TOTAL-ASSETS> 871,533
<CURRENT-LIABILITIES> 217,370
<BONDS> 100,000
<COMMON> 3,442
0
0
<OTHER-SE> 508,371
<TOTAL-LIABILITY-AND-EQUITY> 871,533
<SALES> 521,622
<TOTAL-REVENUES> 521,622
<CGS> 409,860
<TOTAL-COSTS> 409,860
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,415
<INCOME-PRETAX> 41,257
<INCOME-TAX> 16,299
<INCOME-CONTINUING> 24,958
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 24,958
<EPS-PRIMARY> .73
<EPS-DILUTED> .73
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