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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
December 17, 1999
Date of Report
(Date of earliest event reported)
----------------------
DECRANE AIRCRAFT HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 333-70365 34-1645569
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
2361 ROSECRANS AVENUE, SUITE 180, EL SEGUNDO, CA
90245 (Address, including zip code, of principal executive offices)
(310) 725-9123
(Registrant's telephone number, including area code)
----------------------
NOT APPLICABLE
(Former address and telephone number of principal executive offices, if changed
since last report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
ACQUISITION OF THE INFINITY PARTNERS, LTD.
On December 17, 1999 we acquired substantially all of the assets,
subject to accounts payable and accrued expenses assumed, of The Infinity
Partners, Ltd. Infinity is a Texas-based designer and manufacturer of
interior components for middle- and high-end corporate aircraft. We intend to
continue to use the acquired assets to manufacture products similar to those
previously manufactured by Infinity.
The total purchase price was $17.6 million, plus a maximum of $25.2
million of contingent consideration payable in 2000 and 2001 based on future
attainment of defined performance criteria. The total purchase price includes
an estimated $0.8 million of acquisition related costs. The acquisition will
be accounted for as a purchase and the difference between the purchase price
and the fair value of the net assets acquired will be recorded as goodwill
and amortized on a straight-line basis over thirty years. The amount of
contingent consideration paid in the future, if any, will increase goodwill
and will be amortized prospectively over the remaining period of the initial
thirty-year term. Our consolidated financial statements will include
Infinity's financial position and its results of operations for periods
subsequent to the acquisition date.
The acquisition was funded with borrowings under our senior credit
facility.
ITEM 5. OTHER EVENTS
REORGANIZATION AND RESTRUCTURING CHARGE
In December 1999, we announced a plan to reorganize and restructure the
operations of two of our subsidiaries, Hollingsead International, Inc. and
Elsinore Engineering, Inc. In conjunction with this restructuring, we expect
to record a nonrecurring pre-tax charge of between $8.0 million and $9.0
million in the fourth quarter of 1999 resulting in a net loss for the quarter
and year ending December 31, 1999.
STOCK OPTION PLAN
In December 1999, DeCrane Holdings amended its qualified management
incentive stock option plan for key employees. The amended plan provides for
the granting of options to purchase 356,257 common shares and expires in
2009. The options generally vest based upon future attainment of defined
performance criteria although alternate vesting schedules may be authorized.
Options to purchase 279,662 shares at $23.00 per share were granted of which
options to purchase approximately 28,000 shares immediately vested. We
believe the per share exercise price of the options granted approximated the
fair market value of the underlying common stock on the grant date.
The stock option plan is attached as Exhibit 10.19 to this Form 8-K.
MANAGEMENT STOCK PURCHASE
In December 1999, management purchased 171,304 shares of DeCrane
Holdings common stock for $23.00 per share. The total purchase price was $3.9
million of which one-half was paid in cash at closing and one-half was loaned
to management by DeCrane Aircraft at applicable federal rates.
The form of the stock subscription agreement is attached as Exhibit 10.20
to this Form 8-K.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements of businesses acquired.
The Infinity Partners, Ltd. Regulation S-X compliant audited financial
statements are not available at this time. The audited financial statements for
the appropriate periods will be filed by amendment to this Form 8-K as soon as
practicable, but in no event later than March 1, 2000.
(b) Pro forma financial information.
Unaudited pro forma financial information reflecting The Infinity Partners,
Ltd. acquisition is not available at this time. The pro forma financial
information will be filed by amendment to this Form 8-K as soon as practicable,
but in no event later than March 1, 2000.
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(c) Exhibits.
<TABLE>
<CAPTION>
EXHIBIT
NO. EXHIBIT DESCRIPTION
------- ----------------------------------------------------------------------------------------------
<S> <C>
10.19 Amended Management Incentive Stock Option Plan **
10.20 Amended Stock Subscription Agreement **
10.21 Amended Incentive Bonus Plan **
13.22.1 Articles of Incorporation DAH-IP Holdings, Inc. **
13.22.2 By Laws of DAH-IP Holdings, Inc. **
13.23.1 Articles of Incorporation of DAH-IP Infinity, Inc. **
13.23.2 By Laws of DAH-IP Infinity, Inc. **
13.24.1 Certificate of Limited Partnership DAH-IP Acquisition Co., L.P. **
the General Partner, and DeCrane Aircraft Holdings, Inc., the Limited Partner **
13.24.2 Limited Partnership Agreement of DAH-IP Acquisition Co., L.P. among DAH-IP Holdings, Inc.,
the General Partner, and DeCrane Aircraft Holdings, Inc., the Limited Partner **
13.24.3 Assignment of Partnership Interest by DeCrane Aircraft Holdings, Inc. to DAH-IP Infinity, Inc. **
21.1 List of Subsidiaries of Registrant **
--------------------
* Previously filed
** Filed herewith
</TABLE>
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.
DECRANE AIRCRAFT HOLDINGS, INC.
(Registrant)
December 30, 1999 By: /S/ RICHARD J. KAPLAN
--------------------------------------
Name: Richard J. Kaplan
Title: Senior Vice President, Chief
Financial Officer, Secretary
and Treasurer
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DECRANE HOLDINGS CO.
MANAGEMENT INCENTIVE PLAN
SECTION 1. PURPOSE. The purposes of the DeCrane Holdings Co. Management
Incentive Plan are to promote the interests of DeCrane Holdings Co. (the
"COMPANY") and its stockholders by (i) attracting and retaining exceptional
executive personnel and other key employees of the Company and its Subsidiaries,
as defined below; (ii) motivating such employees by means of performance-related
incentives to achieve longer-range performance goals; and (iii) enabling such
employees to participate in the long-term growth and financial success of the
Company.
SECTION 2. DEFINITIONS. As used in the Plan, the following terms shall
have the meanings set forth below:
"AFFILIATE" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by or under common control with
such Person. For purposes of this definition, the terms "control" (including
with correlative meanings, the terms "controlling", "controlled by" and "under
common control with"), when used with respect to any Person, means the
possession, directly or indirectly of the power to direct or cause the direction
of the management and policies of such Person, whether through the ownership of
voting securities, by contract or otherwise.
"AWARD" means any Option.
"AWARD AGREEMENT" means an agreement in substantially the Form attached
hereto as Exhibit A or any other written agreement, contract, or other
instrument or document, designated by the Committee, evidencing any Award which
may, but need not, be executed or acknowledged by a Participant.
"BOARD" means the Board of Directors of the Company.
"CAUSE" means (i) dishonesty by a Participant that results in
substantial personal enrichment at the expense of the Company; (ii) willful
violations of a Participant's obligations to the Company (including under any
employment agreement between the Participant and the Company) which result in
material injury to the Company; (iii) a Participant's commission of any felony
involving the personal dishonesty of the Participant; or (iv) a Participant's
chronic alcoholism or abuse of controlled substances.
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"CHANGE OF CONTROL" means:
(a) any "person" (as such term is used in Section 3(a)(9) and
13(d)(3) of the Exchange Act) other than (A) the DLJ Entities and/or
their respective Permitted Transferees (as defined in the Investors'
Agreement) or (B) any "group" (within the meaning of such Section
13(d)(3)) of which the DLJ Entities constitute a majority (on the basis
of ownership interest), acquires, directly or indirectly, by virtue of
the consummation of any purchase, merger or other combination,
securities of the Company representing more than 51% of the combined
voting power of the Company's then outstanding voting securities with
respect to matters submitted to a vote of the stockholders generally;
or
(b) a sale or transfer by the Company or any of its
Subsidiaries of substantially all of the consolidated assets of the
Company and its Subsidiaries to an entity which is not an Affiliate of
the Company prior to such sale or transfer.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time.
"COMMITTEE" means a committee of the Board designated by the Board to
administer the Plan. Until otherwise determined by the Board, the full Board
shall be the Committee under the Plan.
"DISABILITY" shall mean a Participant's inability to perform the duties
of his or her employment due to mental or physical incapacity for a period of
six consecutive months.
"EMPLOYEE" means an employee of the Company or any Subsidiary.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"FAIR MARKET VALUE" means with respect to the Shares, as of any given
date or dates, the average reported closing price of a share of such class of
common stock on such exchange or market as is the principal trading market for
such class of common stock for the three trading days immediately preceding such
date or dates. If such class of common stock is not traded on an exchange or
principal trading market on such date, the fair market value of a Share shall be
determined by the Committee in good faith taking into account as appropriate
recent sales of the Shares, recent valuations of the Shares and such other
factors as the Committee shall in its discretion deem relevant or appropriate.
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"INVESTORS' AGREEMENT" means the Amended and Restated Investors'
Agreement dated as of October 2, 1998 among (i) the Company, (ii) DLJ Merchant
Banking Partners II, L.P., DLJ Merchant Banking Partners II-A, L.P., DLJ
Offshore Partners II, C.V., DLJ Diversified Partners, L.P., DLJ Diversified
Partners-A, L.P., DLJ Millennium Partners, L.P., DLJ Millennium Partners-A,
L.P., DLJMB Funding II, Inc., UK Investment Plan 1997 Partners, DLJ EAB
Partners, DLJ First ESC, L.P. and DLJ ESC II, L.P. (collectively, the "DLJ
ENTITIES") and (iii) certain other Persons listed on the signature pages
thereof.
"OPTION" means a right to purchase Shares from the Company granted
under Section 6 of the Plan.
"PARTICIPANT" means the Employees set forth on Exhibit B hereto
selected by the Committee to receive the Awards set forth in Exhibit B (and to
the extent applicable, any heirs or legal representatives thereof).
"PERMITTED TRANSFEREE" shall have the meaning assigned to it in the
Investors' Agreement.
"PERSON" means any individual, corporation, limited liability company,
partnership, association, joint-stock company, trust, unincorporated
organization, government or political subdivision thereof or other entity.
"PLAN" means this DeCrane Holdings Co. Management Incentive Plan.
"SEC" means the Securities and Exchange Commission or any successor
thereto.
"SHARES" means shares of common stock, $0.01 par value, of the Company
or such other securities as may be designated by the Committee from time to
time.
"SUBSIDIARY" shall mean, with respect to any Person, any corporation or
other entity of which securities or other ownership interests having ordinary
voting power to elect a majority of the board of directors or other Persons
performing similar functions are at the time directly or indirectly owned by
such Person.
"SUBSTITUTE AWARDS" means Awards granted in assumption of, or in
substitution for, outstanding awards previously granted by a company acquired by
the Company or with which the Company combines.
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SECTION 3. ADMINISTRATION.
(a) AUTHORITY OF COMMITTEE. The Plan shall be administered by the
Committee. Subject to the terms of the Plan, applicable law and contractual
restrictions affecting the Company, and in addition to other express powers and
authorizations conferred on the Committee by the Plan, the Committee shall have
full power and authority to: (i) designate Participants; (ii) determine the type
or types of Awards to be granted to a Participant; (iii) determine the number of
Shares to be covered by, or with respect to which payments, rights, or other
matters are to be calculated in connection with, Awards; (iv) determine the
terms and conditions of any Award and Award Agreement; (v) determine whether, to
what extent, and under what circumstances Awards may be settled or exercised in
cash, Shares, other securities, other Awards or other property, or canceled,
forfeited, or suspended and the method or methods by which Awards may be
settled, exercised, canceled, forfeited, or suspended; (vi) determine whether,
to what extent, and under what circumstances cash, Shares, other securities,
other Awards, other property, and other amounts payable with respect to an Award
shall be deferred either automatically or at the election of the holder thereof
or of the Committee; (vii) interpret and administer the Plan and any instrument
or agreement relating to, or Award made under, the Plan; (viii) establish,
amend, suspend, or waive such rules and regulations and appoint such agents as
it shall deem appropriate for the proper administration of the Plan; and (ix)
make any other determination and take any other action that the Committee deems
necessary or desirable for the administration of the Plan.
(b) COMMITTEE DISCRETION BINDING. Unless otherwise expressly provided
in the Plan, all designations, determinations, interpretations, and other
decisions under or with respect to the Plan or any Award shall be within the
sole discretion of the Committee, may be made at any time and shall be final,
conclusive and binding upon all Persons, including the Company, any Subsidiary,
any Participant, any holder or beneficiary of any Award, any shareholder and any
Employee.
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SECTION 4. SHARES AVAILABLE FOR AWARDS.
(a) SHARES AVAILABLE. Subject to adjustment as provided in Section
4(b) and 4(c), the number of Shares with respect to which Awards may be
granted under the Plan shall be 356,257 Shares. If, after the effective date
of the Plan, any Shares covered by an Award granted under the Plan or to
which such an Award relates are forfeited, or if such an Award is settled for
cash or otherwise terminates or is canceled without the delivery of Shares,
then the Shares covered by such Award, or to which such Award relates, or the
number of Shares otherwise counted against the aggregate number of Shares
with respect to which Awards may be granted, to the extent of any such
settlement, forfeiture, termination or cancellation, shall, in the calendar
year in which such settlement, forfeiture, termination or cancellation
occurs, again become Shares with respect to which Awards may be granted
unless any dividends have been paid thereon prior to such settlement,
forfeiture, termination or cancellation. In addition, Shares tendered in
satisfaction or partial satisfaction of the exercise price of any Award or
any tax withholding obligations will again become Shares with respect to
which Awards may be granted. Notwithstanding the foregoing and subject to
adjustment as provided in Section 4(b), no Employee of the Company may
receive Options in any calendar year that relate to more than 150,000 Shares.
(b) ADJUSTMENTS. In the event that the Committee determines that
any dividend or other distribution (whether in the form of cash, Shares,
other securities or other property), recapitalization, stock split, reverse
stock split, reorganization, reclassification, merger, consolidation,
split-up, spin-off, combination, repurchase, or exchange of Shares or other
securities of the Company, issuance of warrants or other rights to purchase
Shares or other securities of the Company, or other similar corporate
transaction or event affects the Shares such that an adjustment is determined
by the Committee to be appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made
available under the Plan, then the Committee shall, in such manner as it may
deem equitable, adjust any or all of (i) the number of Shares of the Company
(or number and kind of other securities or property) with respect to which
Awards may thereafter be granted, (ii) the number of Shares or other
securities of the Company (or number and kind of other securities or
property) subject to outstanding Awards, and (iii) the grant or exercise
price with respect to any Award, or, if deemed appropriate, make provision
for a cash payment to the holder of an outstanding Award.
(c) SUBSTITUTE AWARDS. Any Shares underlying Substitute Awards
shall not be counted against the Shares available for Awards under the Plan.
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(d) SOURCES OF SHARES DELIVERABLE UNDER AWARDS. Any Shares
delivered pursuant to an Award may consist, in whole or in part, of
authorized and unissued Shares or of treasury Shares.
(e) Participants who have previously purchased shares from the
Company shall be entitled to purchase additional Shares from the Company, at
Fair Market Value and on such other terms and conditions as are substantially
similar to that of such previous purchase, in such amounts as may be required
to prevent dilution of each such Participant's ownership interest in the
Company.
SECTION 5. ELIGIBILITY. Any Employee, including any officer or
employee-director of the Company or any Subsidiary, shall be eligible to be
designated a Participant.
SECTION 6. STOCK OPTIONS.
(a) GRANT. Subject to the provisions of the Plan and contractual
restrictions affecting the Company, the Committee shall have sole and
complete authority to determine the Employees to whom Options shall be
granted, the number of Shares to be covered by each Option, the exercise
price therefor and the conditions and limitations applicable to the exercise
of the Option.
(b) EXERCISE PRICE. The Committee in its sole discretion shall
establish the exercise price at the time each Option is granted; PROVIDED,
that in no event shall the exercise price per Share be less than the Fair
Market Value of a Share on the date of grant.
(c) EXERCISE. Each Option shall be exercisable at such times and
subject to such terms and conditions as the Committee may, in its sole
discretion, specify in the applicable Award Agreement or thereafter. The
Committee may impose such conditions with respect to the exercise of Options,
including without limitation, any relating to the application of Federal or
state securities laws, as it may deem necessary or advisable.
(d) PAYMENT. No Shares shall be delivered pursuant to any exercise
of an Option until payment in full of the exercise price, or adequate
provision therefor, is received by the Company. Such payment may be made: (i)
in cash; (ii) in Shares owned by the Participant for at least six months (the
value of such Shares shall be their Fair Market Value on the date of
exercise); (iii) by a combination of cash and Shares; or (iv) in such other
manner as permitted by the Committee at the time of grant or thereafter.
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SECTION 7. TERMINATION OF EMPLOYMENT; VESTING. (a) TERMINATION OF
EMPLOYMENT. Each Award Agreement shall contain such terms as the Committee
may in its sole discretion determine concerning vesting, forfeiture, the
Company's rights of repurchase of Shares acquired upon exercise of an Option,
and/or the effects of termination or suspension of a Participant's employment
upon the exercisability of any Option granted thereunder.
(b) VESTING. Ten percent (10%) of the Options set forth on Exhibit
B in respect of each Participant designated thereon a "Corporate Participant"
or an "Operating Company Participant" shall be immediately vested. Ninety
percent (90%) of each such Option held by each such Corporate Participant or
Operating Company Participant shall vest as set forth on Schedule 1, Schedule
2 or Schedule 3, as appropriate, in each case upon attainment of the
conditions and targets set forth in the relevant Schedule.
SECTION 8. CHANGE OF CONTROL. The Committee, in its sole
discretion, may provide in an Award Agreement for the accelerated vesting of
an Award in the event of a Change of Control.
SECTION 9. AMENDMENT AND TERMINATION.
(a) AMENDMENTS TO THE PLAN. The Board may amend, alter, suspend,
discontinue, or terminate the Plan or any portion thereof at any time;
provided that no such amendment, alteration, suspension, discontinuation or
termination shall be made without shareholder approval if such approval is
necessary to comply with any tax or regulatory requirement, including for
these purposes any approval requirement which is a prerequisite for exemptive
relief from Section 16(b) of the Exchange Act, for which or with which the
Board deems it necessary or desirable to qualify or comply. Notwithstanding
anything to the contrary herein, the Committee may amend the Plan in such
manner as may be necessary so as to have the Plan conform with local rules
and regulations in any jurisdiction outside the United States.
(b) AMENDMENTS TO AWARDS. Subject to the terms of the Plan and
applicable law, the Committee may waive any conditions or rights under, amend
any terms of, or alter, suspend, discontinue, cancel or terminate, any Award
theretofore granted, prospectively or retroactively; provided that any such
waiver, amendment, alteration, suspension, discontinuance, cancellation or
termination that would adversely affect the rights of a Participant or any
holder or beneficiary of any Award theretofore granted shall not to that
extent be effective without the consent of the affected Participant, holder
or beneficiary.
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(c) CANCELLATION. Any provision of this Plan or any Award Agreement
to the contrary notwithstanding, in the event of a Change of Control or an
offer to Participants generally relating to the acquisition of Shares,
including through purchase, merger or otherwise, the Committee may cause any
Award granted hereunder to be canceled in consideration of a cash payment or
alternative Award made to the holder of such canceled Award equal in value to
the Fair Market Value of such canceled Award.
SECTION 10. GENERAL PROVISIONS.
(a) DIVIDEND EQUIVALENTS. In the sole and complete discretion of
the Committee, an Award may provide the Participant with dividends or
dividend equivalents, payable in cash, Shares, other securities or other
property on a current or deferred basis.
(b) NONTRANSFERABILITY. Except to the extent otherwise provided in
an Award Agreement, no Award shall be assigned, alienated, pledged, attached,
sold or otherwise transferred or encumbered by a Participant, except by will
or the laws of descent and distribution.
(c) NO RIGHTS TO AWARDS. No Employee, Participant or other Person
shall have any claim to be granted any Award, and there is no obligation for
uniformity of treatment of Employees, Participants, or holders or
beneficiaries of Awards. The terms and conditions of Awards need not be the
same with respect to each recipient.
(d) SHARE CERTIFICATES. Certificates issued in respect of Shares
shall, unless the Committee otherwise determines, be registered in the name
of the Participant or its Permitted Transferees and shall be deposited by
such Participant or Permitted Transferee, together with a stock power
endorsed in blank, with the Company. When the Participant ceases to be bound
by any transfer restrictions set forth herein or in the Investors' Agreement,
the Company shall deliver such certificates to the Participant upon request.
Such stock certificate shall carry such appropriate legends, and such written
instructions shall be given to the Company's transfer agent, as may be deemed
necessary or advisable by counsel to the Company in order to comply with the
requirements of the Securities Act of 1933, any state securities laws or any
other applicable laws and the Investors' Agreement. Subject to the provisions
of the Investors' Agreement, all certificates for Shares or other securities
of the Company or any Subsidiary delivered under the Plan pursuant to any
Award or the exercise thereof shall be subject to such stop transfer orders
and other restrictions as the Committee may deem advisable under the Plan or
the rules, regulations and other requirements of the Securities and Exchange
Commission or any stock exchange upon which such Shares or
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other securities are then listed and any applicable laws or rules or
regulations, and the Committee may cause a legend or legends to be put on any
such certificates to make appropriate reference to such restrictions.
(e) WITHHOLDING. A Participant may be required to pay to the
Company or any Subsidiary, and the Company or any Subsidiary shall have the
right and is hereby authorized to withhold from any Award, from any payment
due or transfer made under any Award or under the Plan or from any
compensation or other amount owing to a Participant the amount (in cash,
Shares, other securities, other Awards or other property) of any applicable
withholding taxes in respect of an Award, its exercise, or any payment or
transfer under an Award or under the Plan and to take such other action as
may be necessary in the opinion of the Company to satisfy all obligations for
the payment of such taxes. The Committee may provide for additional cash
payments to holders of Awards to defray or offset any tax arising from any
such grant, lapse, vesting, or exercise of any Award.
(f) AWARD AGREEMENTS. Each Award hereunder shall be evidenced by an
Award Agreement which shall be delivered to the Participant and shall specify
the terms and conditions of the Award and any rules applicable thereto.
(g) NO LIMIT ON OTHER COMPENSATION ARRANGEMENTS. Nothing contained
in the Plan shall prevent the Company or any Subsidiary from adopting or
continuing in effect other compensation arrangements, which may, but need
not, provide for the grant of options, restricted stock, Shares and other
types of Awards provided for hereunder (subject to shareholder approval if
such approval is required), and such arrangements may be either generally
applicable or applicable only in specific cases.
(h) NO RIGHT TO EMPLOYMENT. The grant of an Award shall not be
construed as giving a Participant the right to be retained in the employ or
service of the Company or any Subsidiary. Further, the Company or an
Subsidiary may at any time dismiss a Participant from employment or service,
free from any liability or any claim under the Plan, unless otherwise
expressly provided in the Plan or in any Award Agreement.
(i) RIGHTS AS A STOCKHOLDER. Subject to the provisions of the
applicable Award, no Participant or holder or beneficiary of any Award shall
have any rights as a stockholder with respect to any Shares to be issued
under the Plan until he or she has become the holder of such Shares.
(j) GOVERNING LAW. The validity, construction, and effect of the
Plan and any rules and regulations relating to the Plan and any Award
Agreement shall be determined in accordance with the laws of the State of
Delaware.
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(k) SEVERABILITY. If any provision of the Plan or any Award is or
becomes or is deemed to be invalid, illegal, or unenforceable in any
jurisdiction or as to any Person or Award, or would disqualify the Plan or
any Award under any law deemed applicable by the Committee, such provision
shall be construed or deemed amended to conform to the applicable laws, or if
it cannot be construed or deemed amended without, in the determination of the
Committee, materially altering the intent of the Plan or the Award, such
provision shall be stricken as to such jurisdiction, Person or Award and the
remainder of the Plan and any such Award shall remain in full force and
effect.
(l) OTHER LAWS. The Committee may refuse to issue or transfer any
Shares or other consideration under an Award if, acting in its sole
discretion, it determines that the issuance or transfer of such Shares or
such other consideration might violate any applicable law or regulation or
entitle the Company to recover the same under Section 16(b) of the Exchange
Act, and any payment tendered to the Company by a Participant in connection
therewith shall be promptly refunded to the relevant Participant, holder or
beneficiary. Without limiting the generality of the foregoing, no Award
granted hereunder shall be construed as an offer to sell securities of the
Company, and no such offer shall be outstanding, unless and until the
Committee in its sole discretion has determined that any such offer, if made,
would be in compliance with all applicable requirements of the U.S. federal
securities laws and any other laws to which such offer, if made, would be
subject.
(m) NO TRUST OR FUND CREATED. Neither the Plan nor any Award shall
create or be construed to create a trust or separate fund of any kind or a
fiduciary relationship between the Company or any Subsidiary and a
Participant or any other Person. To the extent that any Person acquires a
right to receive payments from the Company or any Subsidiary pursuant to an
Award, such right shall be no greater than the right of any unsecured general
creditor of the Company or any Subsidiary.
(n) NO FRACTIONAL SHARES. No fractional Shares shall be issued or
delivered pursuant to the Plan or any Award, and the Committee shall
determine whether cash or other securities or other property shall be paid or
transferred in lieu of any fractional Shares or whether such fractional
Shares or any rights thereto shall be canceled, terminated, or otherwise
eliminated.
(o) TRANSFER RESTRICTIONS. Shares acquired hereunder may not be
sold, assigned, transferred, pledged or otherwise disposed of, except as
provided in the Plan, the applicable Award Agreement and the Investors'
Agreement.
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(p) HEADINGS. Headings are given to the Sections and subsections of
the Plan solely as a convenience to facilitate reference. Such headings shall
not be deemed in any way material or relevant to the construction or
interpretation of the Plan or any provision thereof.
SECTION 11. TERM OF THE PLAN.
(a) EFFECTIVE DATE. The Plan shall be effective as of December 14,
1999, subject to approval by the shareholders of the Company. Awards may be
granted hereunder prior to such shareholder approval subject in all cases,
however, to such approval.
(b) EXPIRATION DATE. The Board and the Committee's authority to
grant Awards under the Plan shall terminate on the tenth anniversary of the
Plan's effective date. Unless otherwise expressly provided in the Plan or in
an applicable Award Agreement, any Award granted hereunder may, and the
authority of the Board or the Committee to amend, alter, adjust, suspend,
discontinue, or terminate any such Award or to waive any conditions or rights
under any such Award shall, continue after the authority for grant of new
Awards hereunder has been exhausted.
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EXHIBIT A
Award Agreement
under the
DeCrane Holdings Co.
Management Incentive Plan
Date of Grant: December 20, 1999
Name of Optionee:
--------------------------
Number of Shares:
--------------------------
Exercise Price: $23.00/share
Expiration Date: December 20, 2009
DeCrane Holdings Co., a Delaware corporation (the "COMPANY"), hereby
grants to the above-named optionee (the "OPTIONEE") a performance-based
vesting option (the "OPTION") to purchase from the Company, for the price per
share set forth above, the number of shares of Common Stock, $0.01 par value
(the "SHARES"), of the Company set forth above pursuant to the DeCrane
Holdings Co. Management Incentive Plan (the "PLAN"). The Options are not
intended to be treated as incentive stock options under the Code.
Capitalized terms not otherwise defined herein shall have the same
meanings as in the Plan. The terms and conditions of the Option granted
hereby, to the extent not controlled by the terms and conditions contained in
the Plan, are as follows:
1. EXERCISE PRICE. The price at which each Share subject to this
Option may be purchased shall be the price set forth above.
2. NUMBER OF SHARES; EXERCISE. The number of Shares for which the
Option may be exercised are set forth above. To the extent this Option has
become vested in accordance with Section 3 below, the Option may be exercised
at any time until the Expiration Date, subject to the terms of the Plan and
of Section 7 below.
<PAGE>
3. VESTING.
(a) GENERAL.
(i) The Option shall be immediately vested and
exercisable with respect to 10% of the Shares subject thereto.
(ii) To the extent not previously vested in
accordance with the provisions of this Section 3, the Option shall
become fully vested and exercisable on the earlier of: (x) the eighth
anniversary of the Date of Grant, provided the Optionee is then in the
employ of the Company or a Subsidiary; or (y) upon a Change in Control
provided that the internal rate of return realized by the DLJ Entities
in respect of such Change in Control exceeds the targets set forth on
Schedule 1 to the Plan.
(b) PERFORMANCE CONDITIONS.
(i) The Option shall be considered to be a
"GROWTH-BASED OPTION" to the extent of 90% of the Shares subject
thereto. A portion of this Growth-Based Option shall become vested and
exercisable on the thirtieth day following the availability of audited
financial statements of the Company for each of the four fiscal years
of the Company commencing with the fiscal year ending December 31, 1999
(each such day, a "VESTING DATE"), provided, in the case of Operating
Company Participants, the operating company to which such Optionee's
employment primarily relates (the "OPERATING COMPANY") has achieved
such Operating Company's Target EBITDA for such fiscal year as set
forth in Schedule 2 or Schedule 3 to the Plan, as applicable, or, in
the case of Corporate Participants, provided that the Total
Consolidated EBITDA achieved for such year equals the Total Target
Consolidated EBITDA for such year as set forth in Schedule 3 to the
Plan. Schedule 2 and Schedule 3 set forth the total portion of the
Growth-Based Option that will be treated as vested and exercisable as
of each Vesting Date based on achievement of the specified percentages
of the relevant Target EBITDA and Schedule 3 sets forth the Total
Target Consolidated EBITDA, as the case may be, in each case for each
fiscal year.
(ii) If the Target EBITDA value referred to in clause
(b)(i) for any Operating Company is exceeded in any fiscal year, an
amount equal to all or a portion of the excess of actual EBITDA over
such target EBITDA shall be taken into account in respect of the
immediately preceding fiscal year solely for purposes of determining
whether such Operating Company's Target EBITDA for such preceding
fiscal year has
A-2
<PAGE>
been attained; provided, however, that any such excess EBITDA in any
fiscal year that is taken into account as provided herein shall not be
taken into account, directly or indirectly, for any purpose in respect
of any other preceding fiscal year or any fiscal year commencing after
such immediately preceding fiscal year.
(iii) If the Target EBITDA value referred to in
clause (b)(i) for any Operating Company is exceeded in any fiscal year,
an amount equal to all or a portion of the excess of actual EBITDA over
such target EBITDA, provided that such excess has not been taken into
account in respect of the immediately preceding fiscal year pursuant to
Clause (b)(ii), shall be taken into account in the immediately
succeeding fiscal year solely for purposes of determining whether such
Operating Company's Target EBITDA for such succeeding fiscal year has
been attained; provided, however, that any such excess EBITDA in any
fiscal year shall not be taken into account, directly or indirectly,
for any purpose in respect of any fiscal year commencing after such
immediately succeeding fiscal year.
(iv) The Target EBITDA for the Operating Companies
may be reallocated among such Companies provided that: (x) the Board
and management of the Company agree on such reallocation and (y) the
Target Total Divisional EBITDA (Rev.) set forth on Schedule 3 remains
unchanged. In the event that the Company acquires any business during
such period, the Target Total Consolidated EBITDA (Rev.) on Schedule 3
shall be increased by the EBITDA projected for such business for the
year of acquisition and for each subsequent year, as projected for each
such year at the time of its acquisition. The Committee shall have the
discretion to adjust the corporate elimination in Schedule 3 to reflect
such acquisition.
4. MANNER OF EXERCISE. The Optionee (or his representative, devisee or
heir, as applicable) may exercise any portion of this Option which has become
exercisable in accordance with the terms hereof as to all or any of the Shares
then available for purchase by delivering to the Company written notice
specifying:
(i) the number of whole Shares to be purchased together with
payment in full of the aggregate Exercise Price of such shares;
(ii) the address to which dividends, notices, reports, etc.
are to be sent; and
(iii) the Optionee's social security number.
A-3
<PAGE>
Payment shall be in cash, by certified or bank cashier's check payable to the
order of the Company, free from all collection charges, or in unencumbered
Shares (provided such shares shall have been held by the Optionee for at least
six months unless the Committee determines in its sole discretion that such
six-month holding period is not necessary to comply with any accounting, legal
or regulatory requirement) having a Fair Market Value equal to the full amount
of the Exercise Price therefor, or such other form as may be permitted by the
Committee. Only one stock certificate will be issued unless the Optionee
otherwise requests in writing. Shares purchased upon exercise of the Option will
be issued in the name of the Optionee or the Optionee's Permitted Transferee. No
Shares shall be issued hereunder unless and until the Optionee (or his
representative, devisee or heir, as applicable) executes and agrees to be bound
by the Investors' Agreement. The Optionee shall not be entitled to any rights as
a stockholder of the Company in respect of any Shares covered by this Option
until such Shares shall have been paid for in full and issued to the Optionee.
5. CERTIFICATES. Certificates issued in respect of Shares acquired upon
exercise of the Option shall, unless the Committee otherwise determines, be
registered in the name of the Optionee or its Permitted Transferee. When the
Optionee ceases to be bound by the provisions of the Investors' Agreement, the
Company shall deliver such certificates to the Optionee or its Permitted
Transferee upon request. Such stock certificate shall carry such appropriate
legends, and such written instructions shall be given to the Company's transfer
agent, as may be deemed necessary or advisable by counsel to the Company in
order to comply with the requirements of the Securities Act of 1933, any state
securities laws or any other applicable laws or the Investors' Agreement.
6. NONTRANSFERABILITY. This Option is personal to the Optionee and may
be exercised only by the Optionee or his or her representative in the event of
the Optionee's Disability or death. This Option shall not be transferable other
than by will or the laws of descent and distribution. Notwithstanding the
foregoing, this Option may be transferred to a trust solely for the benefit of
the Optionee or the Optionee's immediate family (which shall be deemed to
include the Optionee's spouse, parents, siblings, children, stepchildren and
grandchildren).
7. FORFEITURE OF OPTION; RIGHT OF REPURCHASE.
(a) If the Optionee's employment with the Company and its Subsidiaries
shall terminate for any reason other than by the Company or its Subsidiary for
Cause, then (i) to the extent not yet vested as of the date of termination of
employment, the Option shall immediately be forfeited; and (ii) to the extent
vested as of the date of termination of employment, the Option may be
A-4
<PAGE>
retained and exercised, in accordance with the terms of the Plan and this
Award Agreement, during the six month period following such termination.
(b) If the Optionee's employment with the Company and its Subsidiaries
shall be terminated by the Company or its Subsidiary for Cause, then the entire
Option shall immediately be forfeited, and all Shares previously acquired upon
exercise of the Option shall be subject to a right of repurchase by the Company
from the Participant or his or her Permitted Transferee at a price equal to the
Exercise Price.
8. SALE OF UNDERLYING SHARES. The Optionee's right and obligation to
sell any Shares acquired upon exercise of the Option (in the case of Optionees
who are party thereto) shall be subject to the terms of the Investors'
Agreement.
9. EMPLOYMENT RIGHTS. This Option does not confer on the Optionee any
right to continue in the employ of the Company or any Subsidiary or interfere in
any way with the right of the Company or any Subsidiary to determine the terms
of the Optionee's employment.
10. TERMS OF PLAN; INTERPRETATIONS. This Option and the terms and
conditions herein set forth are subject in all respects to the terms and
conditions of the Plan, which shall be controlling. All interpretations or
determinations of the Committee and/or the Board shall be binding and conclusive
upon the Optionee and his legal representatives on any question arising
hereunder. The Optionee acknowledges that he has received and reviewed a copy of
the Plan.
11. DELEGATION. Optionee acknowledges that any powers, rights or
responsibilities of the Board and/or the Committee set forth herein may be
delegated to and exercised by any subcommittee thereof as permitted under the
Plan.
12. NOTICES. All notices hereunder to the party shall be delivered or
mailed to the following addresses:
If to the Company:
DeCrane Holdings Co.
c/o DLJ Merchant Banking Partners II, L.P.
277 Park Avenue
New York, New York 10172
Attention: Thompson Dean
Fax: (212) 892-7272
A-5
<PAGE>
and
DeCrane Holdings Co.
2361 Rosecrans Avenue
Suite 180
El Segundo, CA 90245
Attention: R. Jack DeCrane
Fax: (310) 643-0746
with a copy to:
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Attention: George R. Bason, Jr., Esq.
Fax: (212) 450-4800
If to the Optionee:
To the person and at the address specified on the signature
page.
Such addresses for the service of notices may be changed at any time provided
notice of such change is furnished in advance to the other party.
13. ENTIRE AGREEMENT. This Agreement, together with the Plan and (in
the case of Optionees who are party thereto) the Investors Agreement, contains
the entire understanding of the parties hereto in respect of the subject matter
contained herein. This Agreement, the Plan and the Investors' Agreement
supersede all prior agreements and understandings between the parties hereto
with respect to the subject matter hereof.
14. GOVERNING LAW. This Award Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without
application of the conflict of laws principles thereof.
15. COUNTERPARTS. This Award Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
A-6
<PAGE>
IN WITNESS WHEREOF, the undersigned have caused this Award Agreement to
be duly executed as of the date first above written.
DeCRANE HOLDINGS CO.
By:
---------------------------
Name:
Title:
OPTIONEE:
------------------------------
Name:
Address: c/o DeCrane Holdings Co.
2361 Rosecrans Avenue
Suite 180
El Segundo, CA 90245
A-7
<PAGE>
EXHIBIT B
DECRANE HOLDINGS CO.
MANAGEMENT INCENTIVE PLAN
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
STOCK OPTION
STOCK OPTIONS (#) PERCENTAGE (%)
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
CORPORATE PARTICIPANTS
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
OPERATING COMPANY PARTICIPANTS
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
TOTAL ALLOCATED
- --------------------------------------------------------------------------------------------------
UNALLOCATED
- --------------------------------------------------------------------------------------------------
Total 356,257 10.00 %
- --------------------------------------------------------------------------------------------------
</TABLE>
A-8
<PAGE>
SUBSCRIPTION AGREEMENT
SUBSCRIPTION AGREEMENT (this "AGREEMENT") dated as of December 20,
1999, by and among DeCrane Holdings Co., a Delaware corporation (the "COMPANY")
and ______________________ (the "INVESTOR").
WHEREAS, the Investor desires to subscribe for, and the Company desires
to issue to the Investor, the number of shares of common stock, par value $0.01
per share (the "COMMON STOCK"), of the Company set forth on Exhibit A hereto
(such shares of Common Stock to be subscribed for by the Investor and issued to
the Investor by the Company, the "SHARES" and together with any other shares of
Common Stock which may subsequently be issued to such Investor, the "OWNED
SHARES").
NOW, THEREFORE, IT IS AGREED:
ARTICLE I
ISSUANCE OF SHARES; CONSIDERATION
Section 1.01. ISSUANCE OF SHARES. Upon the terms set forth in this
Agreement, the Company hereby agrees to issue to the Investor, and the Investor
hereby subscribes for, the Shares.
Section 1.02. SUBSCRIPTION. In consideration for the issuance by the
Company of the Shares, the Investor shall:
(a) pay to the Company, by wire transfer of immediately
available funds to an account specified by the Company, an amount equal to 50%
of the aggregate subscription price set forth on Exhibit A hereto; and
(b) execute and deliver to the Company a Promissory Note and
Pledge Agreement (the "PROMISSORY NOTE AND PLEDGE") in the form of
Exhibit C hereto evidencing a loan (a "LOAN") in a principal amount
equal to 50% of the aggregate subscription price set forth on Exhibit A
hereto.
Section 1.03. INVESTORS' AGREEMENT. As a condition to the issuance of
the Shares, the Investor shall execute and deliver to the Company an agreement
in the form of Exhibit B hereto, pursuant to which the Investor agrees to be
bound by the terms of the Amended and Restated Investors' Agreement ("INVESTORS'
AGREEMENT"), dated as of October 2, 1998, by and among the Company and the
stockholders of the Company named therein (the "DLJ ENTITIES").
<PAGE>
ARTICLE II
RIGHTS OF THE INVESTOR AND THE COMPANY
Section 2.01 PREEMPTIVE RIGHTS. The Company shall provide each Investor
with a written notice (a "ISSUANCE NOTICE") of any proposed issuance by the
Company of Common Stock at least 10 days prior to the proposed issuance date.
Such notice shall specify the price at which the Common Stock is to be issued
and the other material terms of the issuance. In the event the DLJ Entities
propose to purchase any such Common Stock from the Company, each Investor shall
be entitled to purchase, at the price and on the terms at which the DLJ Entities
propose to purchase such Common Stock and specified in such Issuance Notice,
such Investor's Pro Rata Portion of the Common Stock proposed to be issued. An
Investor may exercise its rights under this Section 2.01 by delivering written
notice of its election to purchase Common Stock to the Company and DLJMB within
5 days of receipt of the Issuance Notice. A delivery of such a written notice
(which notice shall specify the number of shares of Common Stock to be purchased
by the Investor submitting such notice) by such Investor shall constitute a
binding agreement of such Investor to purchase, subject to the purchase by the
DLJ Entities of their portion of such Common Stock, at the price and on the
terms specified in the Issuance Notice, the number of shares of Common Stock
specified in such Investor's written notice.
(b) In the case of any issuance of Common Stock, the Company
shall have 90 days from the date of the Issuance Notice to consummate the
proposed issuance of any or all of such Common Stock which the Investors have
not elected to purchase at the price and upon terms that are not materially less
favorable to the Company than those specified in the Issuance Notice. At the
consummation of such issuance, the Company shall issue certificates representing
the Common Stock to be purchased by each Investor exercising preemptive rights
pursuant to this Section 2.01 registered in the name of such Investor, against
payment by such Investor of the purchase price (subject to Section 2.01(c)
hereof) for such Common Stock. If the Company proposes to issue Common Stock
after such 90-day period, it shall again comply with the procedures set forth in
this Section.
(c) In the event an Investor so chooses, such Investor may
elect, in lieu of paying the purchase price referred to in Section 1.04(b)
hereof in cash, to pay an amount equal to 50% of the aggregate purchase price in
cash and request a Loan from the Company for the remainder. If such a request is
made, it shall be a condition of such Investor's purchase of the shares of
Common Stock under this Section 2.01 that such Investor execute and deliver a
Promissory Note and Pledge Agreement in the form of Exhibit C hereto in respect
of such Loan and such shares.
2
<PAGE>
(d) Notwithstanding the foregoing, no Investor shall be
entitled to purchase Common Stock as contemplated by this Section 2.01 in
connection with issuances of Common Stock (i) to employees of the Company or any
Subsidiary pursuant to employee benefit plans or arrangements approved by the
Board (including upon the exercise of employee stock options), (ii) in
connection with any bona fide, arm's-length restructuring of outstanding debt of
the Company or any Subsidiary, (iii) in connection with any bona fide,
arm's-length direct or indirect merger, acquisition or similar transaction, (iv)
in connection with an underwritten public offering, or (v) issued upon exercise
or conversion of any other Equity Securities outstanding as of the date hereof.
The Company shall not be under any obligation to consummate any proposed
issuance of Common Stock, regardless of whether it shall have delivered a
Issuance Notice in respect of such proposed issuance.
(e) The Company will use its reasonable best efforts to provide
the Issuance Notice at least 15 Business Days prior to any proposed issuance of
Common Stock.
(f) The rights of any Investor under this Section 1.04 shall
terminate automatically as to such Investor upon the termination of such
Investor's employment by the Company or any of its Subsidiaries.
(g) The following terms shall have the definitions set forth
below:
"PRO RATA PORTION" means the pro rata portion of any Common Stock
proposed to be issued by the Company with respect to which Investors shall be
entitled to exercise their rights under Section 2.01, based upon such Investor's
Adjusted Ownership of shares of Common Stock immediately prior to the date on
which the Issuance Notice is given as a percentage of the Equity Securities then
outstanding (on a fully diluted basis).
"ADJUSTED OWNERSHIP" means, with respect to any Investor, at any time,
the number of shares of Common Stock purchased pursuant to this Agreement and
owned as of such date, taking into account any stock split, stock dividend,
reverse stock split or similar event.
"EQUITY SECURITIES" means the Common Stock, securities convertible into
or exchangeable for Common Stock and options, warrants or other rights to
acquire Common Stock, preferred stock or any other equity security issued by the
Company.
"DLJMB" means DLJ Merchant Banking Partners II, L.P.
3
<PAGE>
Section 2.02. TERMINATION OF EMPLOYMENT; REPAYMENT OF LOAN. (a) Upon
the termination of an Investor's employment with the Company and its
Subsidiaries:
(a) Any outstanding Loan shall become due in accordance with the terms
of such Loan.
(b) In the event of an Investor's death or Disability, retirement at
age 62 or later or termination of employment by the Company other than for Cause
the Company or its designee shall have the right to purchase, and the Investor
shall have the right to cause the Company to purchase, all or a portion of the
Owned Shares at a per share price equal to the Fair Market Value on the date of
purchase.
(c) In the event of an Investor's termination of employment with the
Company (i) by the Company for Cause or (ii) by the Investor, the Company or its
designee shall have the right to purchase, and the Investor shall have the right
to cause the Company to purchase, all or a portion of the Shares at a per share
price equal to the lesser of (a) $23.00/share (or such other purchase price as
the Investor shall have paid for such shares) and (b) the Fair Market Value on
the date of purchase.
(d) If either the Company or the Investor elects to exercise its right
under this Section 2.02, the Company or the Investor, as the case may be, shall
deliver written notice (a "PURCHASE NOTICE") to such effect within 60 days of a
termination of employment. For purposes of this Section 2.02, the "date of
purchase" shall mean the third business day following the receipt of notice by
the other party that the purchase right is to be exercised. Payment of the
purchase price may be made in cash or by certified check; PROVIDED that if the
terms of any agreement to which the Company is a party, or any of the indentures
governing any debt securities issued by the Company or any of its subsidiaries
would prohibit the Company from effecting such payment, payment may be effected
through a reduction in the amount of the principal of any outstanding Loan or a
promissory note in each case having such commercially reasonable terms and
interest rate as may be determined by the Company in its reasonable discretion,
provided that in any event such note shall become due at such time as the
prohibitions described above shall lapse.
(e) The terms "CAUSE", "DISABILITY" and "FAIR MARKET VALUE" shall have
the meanings given to such terms in the Company's Management Incentive Plan.
4
<PAGE>
ARTICLE III
REPRESENTATIONS OF THE COMPANY
Section 3.01. CORPORATE EXISTENCE AND POWER. The Company is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware. The Company has all corporate power to own its
properties and to carry on its business as now conducted.
Section 3.02. AUTHORITY AND APPROVAL. The execution and delivery of
this Agreement are within the corporate powers of the Company and have been duly
authorized by all necessary corporate action on the part of the Company. This
Agreement constitutes a legal, valid and binding agreement of the Company,
enforceable against it in accordance with its terms, except to the extent that
its enforceability may be subject to applicable bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles.
Section 3.03. SHARES. When issued to the Investor in accordance with
the terms hereof, the Shares will be duly authorized, validly issued, fully paid
and non-assessable.
Section 3.04. CAPITALIZATION. The authorized capital stock of the
Company (immediately prior to giving effect to the issuance of the Shares)
consists of (i) 3,500,000 shares of Common Stock, of which 3,400,532 shares are
issued and outstanding as of the date hereof, and (ii) 2,500,000 shares of
Preferred Stock, of which 342,417 shares are issued and outstanding as of the
date hereof. Except for (i) the Preferred Stock, (ii) warrants to purchase an
aggregate of 155,000 shares of Common Stock issued to the DLJ Entities on
October 2, 1998, (iii) warrants to purchase an aggregate of 150,000 shares of
Common Stock issued in connection with the Company's 12% Senior Subordinated
Notes due 2008 on October 5, 1998, (iv) options to purchase an aggregate of
44,612 shares of Common Stock issued to certain members of Global Technology
Partners, LL as of September 30, 1999 and (v) options to purchase an aggregate
of 356,257 shares of Common Stock to be issued under the Company's Management
Incentive Plan, there are no outstanding securities convertible into or
exchangeable for the capital stock of the Company and no outstanding options,
rights or warrants to purchase or subscribe for any shares of the capital stock
of the Company.
5
<PAGE>
ARTICLE IV
REPRESENTATIONS OF THE INVESTOR
Section 4.01. AUTHORIZATION. The Investor has full power and authority
to enter into this Agreement and the Promissory Note and Pledge and to perform
his obligations hereunder and thereunder.
Section 4.02. ENFORCEABILITY. Each of this Agreement and the Promissory
Note and Pledge has been duly executed and delivered by the Investor and
constitutes a legal, valid and binding obligation of the Investor, enforceable
against the Investor in accordance with its terms, except to the extent that its
enforceability may be subject to applicable bankruptcy, insolvency or similar
laws affecting the enforcement of creditors' rights generally and by general
equitable principles.
Section 4.03. PRIVATE PLACEMENT. (a) The Investor understands that the
offering and sale of the Shares to the Investor as contemplated hereby is
intended to be exempt from registration under the Securities Act of 1933, as
amended (the "1933 ACT") pursuant to Regulation D and Section 4(2) thereunder.
(b) The Shares to be acquired by the Investor pursuant to this
Agreement are being acquired for his own account for investment and without a
view to the public distribution of the Shares or any interest therein. The
Investor understands that the Shares may not be transferred or sold unless
registered under the 1933 Act or an exemption from such registration becomes
available.
(c) The Investor has sufficient knowledge and experience in financial
and business matters so as to be capable of evaluating the merits and risks of
his investment in the Shares and the Investor is capable of bearing the economic
risks of such investment, including a complete loss of his investment in the
Shares.
(d) The Investor has been given the opportunity to ask questions of
and receive answers from the Company concerning the Company, the Shares and
other related matters. The Investor further represents and warrants to the
Company that he has been furnished with all information he deems necessary or
desirable to evaluate the merits and risks of the acquisition of the Shares and
that the Company has made available to the Investor or his agents all documents
and information relating to an investment in the Shares requested by or on
behalf of the Investor. In evaluating the suitability of an investment in the
Shares, the Investor has not relied upon any other representations or other
information (other than as contemplated by the preceding sentences) whether oral
or written made by or on behalf of the Company.
6
<PAGE>
(e) The Investor is an "Accredited Investor" as such term is defined
in Regulation D under the 1933 Act.
ARTICLE V
MISCELLANEOUS
Section 5.01. NOTICES. All notices, requests and other communications
to any party hereunder shall be in writing (including facsimile transmission to
the recipient's then current facsimile number) and shall be given,
if to the Investor, to the address set forth on the signature page, and
if to the Company, to:
DeCrane Holdings Co.
2361 Rosecrans Avenue
Suite 180
El Segundo, Ca 90245
Attn: R. Jack DeCrane
Fax: (310) 643-0746
Section 5.02. AMENDMENTS AND WAIVERS. Any provision of this Agreement
may be amended modified, supplemented or waived if, but only if, such amendment
or waiver is in writing and is signed, in the case of an amendment, by each
party to this Agreement, or in the case of a waiver, by the party against whom
the waiver is to be effective.
Section 5.03. SUCCESSORS AND ASSIGNS. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; PROVIDED that no party may assign, delegate
or otherwise transfer any of its rights or obligations under this Agreement
without the consent of each other party hereto.
Section 5.04. COUNTERPARTS; THIRD PARTY BENEFICIARIES. This Agreement
may be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement shall become effective when each party hereto shall
have received a counterpart hereof signed by the other party hereto. No
provision of this Agreement is intended to confer upon any person other than the
parties hereto any rights or remedies hereunder.
Section 5.05. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter of this
7
<PAGE>
Agreement and supersedes all prior agreements and understandings, both oral and
written, between the parties with respect to the subject matter of this
Agreement.
Section 5.06. CAPTIONS. The captions herein are included for
convenience of reference only and shall be ignored in the construction or
interpretation hereof.
Section 5.07. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with laws of the State of New York.
8
<PAGE>
IN WITNESS WHEREOF, the Investor has executed this Agreement and the
Company has caused its corporate name to be hereunto subscribed by its officers
thereunto duly authorized, all as of the day and year first above written.
DECRANE HOLDINGS CO.
By:___________________________
Name:
Title:
INVESTOR
By:___________________________
Name:
Title:
Address:
Fax:
9
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT A
- ----------------- ---------------- -------------- -------------- --------------
NUMBER OF AMOUNT OF CASH PORTION FINANCED
SHARES OF SUBSCRIPTION OF PORTION OF
SUBSCRIBED FOR PRICE SUBSCRIPTION SUBSCRIPTION
PRICE PRICE
- ----------------- ---------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Common Stock $ $ $
$23.00/share
- ----------------- ---------------- -------------- -------------- --------------
</TABLE>
10
<PAGE>
EXHIBIT B
FORM OF AGREEMENT TO BE BOUND
December 20, 1999
To the Parties to the Amended and Restated Investors'
Agreement dated as of October 2, 1998
Ladies and Gentlemen:
Reference is made to the Amended and Restated Investors' Agreement
dated as of October 2, 1998 (the "INVESTORS' AGREEMENT") among DeCrane Holdings
Co. and the other Persons listed on the signature pages thereof and each other
Person who has or shall become a party to the Investors' Agreement as provided
therein. Capitalized terms used herein and not defined have the meanings
ascribed to them in the Investors' Agreement.
In consideration of the covenants and agreements contained in the
Investors' Agreement, the undersigned hereby confirms and agrees that it shall
be bound as a "Stockholder" by all of the provisions thereof.
This letter shall be construed and enforced in accordance with the
internal laws of the State of Delaware.
Very truly yours,
Signed:___________________
Printed:___________________
11
<PAGE>
EXHIBIT C
FORM OF PROMISSORY NOTE AND PLEDGE
New York, New York
December 20, 1999
For value received,________________ (the "INVESTOR") promises to pay to
the order of DeCrane Aircraft Holdings, Inc., a Delaware corporation (the
"COMPANY"), also referred to herein as the "LENDER"),
$ (the "LOAN"),
---------------
the principal amount of which will be repayable in full on the eighth
anniversary of the date hereof (the "PAYMENT DATE", subject to prepayment as set
forth below, and subject to the following sentence. If at any time the Investor
disposes of any shares of Common Stock, par value $0.01 per share, of the
Company (the "COMMON SHARES") pledged hereunder, the proceeds of any such sale
shall be used by the Investor as follows:
(i) first, to pay any accrued but unpaid interest on the Loan, and
(ii) second, to repay the principal amount of the Loan (or portion
thereof), promptly upon receipt of such proceeds.
The Investor promises to pay on the Payment Date, all accrued and
unpaid interest on the Loan on such date as well as all outstanding principal on
such date. Interest will accrue on the outstanding principal amount of the Loan,
and will be compounded annually, at a rate equal to the applicable federal rate
as published by the Treasury Department of the United States of America and
effective on November 30, 1999. All payments of principal and interest shall be
made in lawful money of the United States in Federal or other immediately
available funds at the office of the Company c/o DLJ Merchant Banking Partners
II, L.P. , 277 Park Avenue, New York, New York 10172, or as otherwise notified
to the Investor by the Company. The Investor may pay the Loan without penalty in
whole at any time, or from time to time in part, by paying the principal amount
to be paid at such time, together with all accrued interest to the date of
payment.
SECURITY INTEREST. To secure payment of the principal of and all
interest on the Loan, the Investor hereby assigns, pledges and grants to DLJ
Merchant Banking II, Inc. (the "AGENT"), for the benefit of the Lender, a
security interest in (and, to the extent not previously delivered, delivers to
the Agent): (i) _______________ Common Shares acquired by the Investor from the
Company as of the date hereof and all other shares of capital stock acquired by
the Investor from the Lender (collectively, the "PLEDGED SHARES"); (ii) all
rights and privileges with respect to the Pledged Shares; (iii) all income and
profits thereon; (iv) all dividends, payments and other distributions with
respect thereto; and (v) all proceeds thereof and substitutions therefor, other
than any cash income, profits, dividends, payments, distributions or proceeds so
long as the
12
<PAGE>
Investor is not in default hereunder (collectively, the "COLLATERAL"). The
Investor is delivering to the Agent certificates representing the Pledged
Shares in pledge hereunder.
Certificates evidencing the Pledged Shares shall remain in the physical
custody of the Agent at all times until the Investor has made payment in full of
all principal and interest on the Loan. However, the Agent may elect to release
certificates on the request of Investor in connection with a transfer by
Investor which is permitted hereunder, so long as the proceeds of such sale are
applied as provided herein and, in its reasonable discretion, the Agent
determines that the remaining Collateral is sufficient to secure the Loan.
This Promissory Note and Pledge constitutes a security agreement for
purposes of the Uniform Commercial Code in all relevant jurisdictions. Upon the
nonpayment of principal or interest when due hereunder or under any other note
issued in connection with any other loan made by Lender to Investor on similar
terms (a "DEFAULT"), the Agent (i) may, by notice to the Investor, declare the
Loan (together with accrued and unpaid interest thereon) to be, and the Loan
shall thereupon become, immediately due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by the
Investor, and (ii) shall have all the rights and remedies of a secured party
provided in the Uniform Commercial Code in force in New York.
The Pledged Shares are granted as security only and shall not subject
the Agent or the Company to, or in any way affect or modify, any obligation or
liability of the Investor with respect to any of its Collateral or any
transaction in connection therewith.
The Investor agrees that it will, at the Company's expense and in such
manner and form as the Agent may reasonably require, execute, deliver, file and
record any financing statement, specific assignment or other paper and take any
other action that may be reasonably necessary or desirable, or that the Agent
may reasonably request, in order to create, preserve, or validate any security
interest or to enable the Agent to exercise and enforce its rights hereunder
with respect to any of the Collateral. To the extent permitted by applicable
law, the Investor hereby authorizes the Agent to execute and file, in the name
of the Investor or otherwise, Uniform Commercial Code financing statements
(which may be carbon, photographic, photostatic or other reproductions of this
Promissory Note and Pledge or of a financing statement relating to this
Promissory Note and Pledge) which the Agent in its sole discretion may deem
necessary or appropriate to further perfect its security interest in the
Collateral.
Limited Recourse. The Company's recourse under this Promissory Note and
Pledge is limited solely to the Collateral.
13
<PAGE>
Remedies Upon Default. To the extent a Default shall have occurred and
be continuing, the Agent may cause any or all of the Pledged Shares to be
transferred of record into the name of the Agent or its nominee. The Investor
will promptly give to the Agent copies of any notices or other communications
received by him with respect to Pledged Shares registered in the name of the
Investor. The Agent will promptly give to the Investor copies of any notices and
communications received by the Agent with respect to Pledged Shares registered
in the name of the Agent or its nominee.
If a Default shall have occurred and be continuing, the Agent shall
have the right to receive and to retain as Collateral hereunder for the benefit
of the Company all dividends, interest and other payments and distributions made
upon or with respect to the Collateral, and the Investor shall take all such
action as the Agent may deem necessary or appropriate to give effect to such
right.
Voting, etc., Prior to Default. Unless a Default shall have occurred
and be continuing, the Investor shall have the right, from time to time, to
receive and retain all cash dividends, interest and other payments and
distributions made upon or with respect to the Collateral and to vote and to
give consents, ratifications and waivers with respect to the Pledged Shares, and
the Agent shall deliver to the Investor such proxies, powers of attorney,
consents, ratifications and waivers in respect of any of the Pledged Shares
which are registered in the name of the Agent or its nominee.
If a Default shall have occurred and be continuing, the Agent shall
have the right to the extent permitted by law (and the Investor shall take all
such action as may be necessary or appropriate to give effect to such right) to
vote and to give consents, ratifications and waivers, and take any other action
with respect to any or all of the Pledged Shares with the same force and effect
as if the Agent were the absolute and sole owner thereof.
Agent Appointed Attorney in Fact. The Investor hereby irrevocably
appoints the Agent its true and lawful attorney, with full power of
substitution, in the name of the Investor, the Agent or otherwise, for the sole
use and benefit of the Agent, but at the expense of the Agent, to the extent
permitted by law, to exercise, at any time and from time to time while a Default
has occurred and is continuing, all or any of the following power with respect
to all or any of the Collateral:
(i) to demand, sue for, collect, receive and give acquittance for
any and all monies due to become due upon or by virtue
thereof;
(ii) to settle, compromise, compound, prosecute or defend any
action or proceeding with respect thereto;
14
<PAGE>
(iii) to sell, transfer, assign or otherwise deal in or with the
same or the proceeds or avails thereof, as fully and
effectually as if the Agent were the absolute owner thereof;
and
(iv) to extend the time of payment of any or all thereof and to
make any allowance and other adjustments with reference
thereto:
PROVIDED that the Agent shall give the Investor not less than ten days' prior
written notice of the time and place of any sale or other intended disposition
of any of the Collateral. The Agent and the Investor agree that such notice
constitutes "reasonable notification" within the meaning of Section 9-504(3) of
the Uniform Commercial Code.
The Investor covenants and agrees that, in the event that (i) any of
the Collateral shall become subject to any lien or security interest other than
the liens and security interests in favor of the Agent created hereunto, or (ii)
the lien on and security interest in the Collateral in favor of the Agent shall
cease to be a first priority perfected security interest in and lien on any of
such Collateral (except pursuant to a release herein contemplated), the Investor
will promptly take whatever reasonable action may be necessary to release such
other liens or security interests or to restore the Agent's lien on and security
interest in the Collateral as a first priority perfected security interest or
lien, as the case may be. The Investor acknowledges that money damages would not
be a sufficient remedy for the breach of the Investor's covenant in this
paragraph and that, in addition to all other remedies that may be available, the
Agent shall be entitled to specific performance as a remedy for any such breach.
The Investor agrees that it will forthwith upon demand pay to the Agent
and the Company, as the case may be, the amount of any and all reasonable
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel and of any other parties, which the Agent or the Company may incur in
connection with (w) the enforcement of this Promissory Note and Pledge,
including such expenses as are incurred to preserve the value of the Collateral
and the validity, perfection, rank and value of any security interest, (x) the
collection, sale or other disposition of any of the Collateral, (y) the exercise
by the Agent of any of the rights conferred upon it hereunder or (z) any
Default; PROVIDED, HOWEVER, that in no event shall the total amount collected
pursuant to this paragraph exceed the value of the Collateral.
15
<PAGE>
For the purpose of this Promissory Note and Pledge, notices and all
other communications provided for in this Promissory Note and Pledge shall be in
writing and shall be given to the respective addresses or telecopy numbers set
forth below:
if to the Investor, to the address set forth on the signature page
hereof:
if to the Company, to: DeCrane Holdings Co.
2361 Rosecrans Avenue, Suite 180
El Segundo, CA 90245
Attention: R. Jack DeCrane
Telefax: (310) 643-0746
if to the Agent: DLJ Merchant Banking Partners II, L.P.
277 Park Avenue
New York, NY 10172
Attention: Thompson Dean
Telefax: (212) 892-7272
PROVIDED, that all notices to the Company shall be directed to the attention of
the Board with a copy to the Secretary of the Company, or to such other address
as either party may have furnished to the other in writing in accordance
herewith. Each such notice or other communication shall be effective (i) if
given by telecopy, when such telecopy is transmitted to the telecopy number
specified in this paragraph and telephonic confirmation of receipt thereof is
obtained, (ii) if given by prepaid overnight courier, one business day after
deposit with such courier or (iii) if given by United States certified or
registered mail, postage prepaid, three business days after deposit with the
United States postal service; PROVIDED THAT notice of change of address shall be
effective only upon receipt.
No failure or delay by the Agent in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
Any provision of this Promissory Note and Pledge may be amended or
waived if, and only if, such amendment or waiver is in writing and is signed by
The Investor, the Company and the Agent. The provisions of this Promissory Note
and Pledge shall be binding upon the Investor and its successors, assigns,
personal representatives, estate and heirs and shall inure to the benefit of the
Company and its successors and assign.
16
<PAGE>
This Promissory Note and Pledge shall be governed by and construed in
accordance with the laws of the State of New York.
Upon the repayment in full of the principal of and interest on the
Loan, the security interest shall terminate and all rights to the Collateral
shall revert to the Investor, and the Agent shall take all actions which may
reasonably be requested by the Investor to reflect the termination of such
security interest. In addition, in the case of a transfer of the Collateral
permitted hereunder in which the proceeds are applied as provided herein, the
security interest in the Collateral so transferred shall terminate and the Agent
shall take all actions which may reasonably be requested by the Investor to
reflect the termination of such security interest.
17
<PAGE>
This Promissory Note and Pledge constitutes the entire agreement and
understanding among the parties hereto and supersedes any and all prior
agreements and understanding, oral or written, relating to the subject matter
hereof.
By:___________________________
Name:
Address:
Fax:
Agreed and Acknowledged:
DeCRANE HOLDING CO. DLJ MERCHANT BANKING II, INC.
By:___________________ By:____________________________
Name: Name:
Title: Title:
18
<PAGE>
DECRANE AIRCRAFT HOLDINGS, INC.
INCENTIVE BONUS PLAN
SECTION 1. PURPOSE. The purposes of the DeCrane Aircraft Holdings, Inc.
Incentive Bonus Plan are to promote the interests of DeCrane Aircraft Holdings,
Inc. (the "COMPANY") and its stockholders by motivating executive personnel and
other key employees of the Company and its Subsidiaries, as defined below; by
means of performance-related incentives to achieve specified performance goals.
SECTION 2. DEFINITIONS. As used in the Plan, the following terms shall
have the meanings set forth below:
"AFFILIATE" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by or under common control with
such Person. For purposes of this definition, the terms "control" (including
with correlative meanings, the terms "controlling", "controlled by" and "under
common control with"), when used with respect to any Person, means the
possession, directly or indirectly of the power to direct or cause the direction
of the management and policies of such Person, whether through the ownership of
voting securities, by contract or otherwise.
"AWARD" means any opportunity to receive an Incentive Bonus.
"BOARD" means the Board of Directors of the Company.
"CAUSE" means (i) dishonesty by a Participant that results in
substantial personal enrichment at the expense of the Company; (ii) willful
violations of a Participant's obligations to the Company (including under any
employment agreement between the Participant and the Company) which result in
material injury to the Company; (iii) a Participant's conviction of any felony
involving the personal dishonesty of the Participant; or (iv) a Participant's
chronic alcoholism or abuse of controlled substances.
"COMMITTEE" means a committee of the Board designated by the Board to
administer the Plan. Until otherwise determined by the Board, the full Board
shall be the Committee under the Plan.
"EMPLOYEE" means an employee of the Company or any Subsidiary.
"INCENTIVE BONUS" means a cash bonus to be paid out of the Bonus Pool
established and as determined pursuant to Exhibit A hereto, which Exhibit A may
be revised from time to time by the Committee.
<PAGE>
"PARTICIPANT" means any Employee selected by the Committee to
participate in the Plan (and to the extent applicable, any heirs or legal
representatives thereof).
"PERSON" means any individual, corporation, limited liability company,
partnership, association, joint-stock company, trust, unincorporated
organization, government or political subdivision thereof or other entity.
"PLAN" means this DeCrane Aircraft Holdings, Inc. Incentive Bonus Plan.
"SUBSIDIARY" shall mean, with respect to any Person, any corporation or
other entity of which securities or other ownership interests having ordinary
voting power to elect a majority of the board of directors or other Persons
performing similar functions are at the time directly or indirectly owned by
such Person.
SECTION 3. ADMINISTRATION.
(a) AUTHORITY OF COMMITTEE. The Plan shall be administered by the
Committee. Subject to the terms of the Plan, applicable law and contractual
restrictions affecting the Company, and in addition to other express powers and
authorizations conferred on the Committee by the Plan, the Committee shall have
full power and authority to: (i) designate Participants; (ii) determine the
amount, terms and conditions of any Award; (iii) interpret and administer the
Plan and any instrument or agreement relating to, or Award made under, the Plan;
(iv) establish, amend, suspend, or waive such rules and regulations and appoint
such agents as it shall deem appropriate for the proper administration of the
Plan; and (v) make any other determination and take any other action that the
Committee deems necessary or desirable for the administration of the Plan.
(b) COMMITTEE DISCRETION BINDING. Unless otherwise expressly provided
in the Plan, all designations, determinations, interpretations, and other
decisions under or with respect to the Plan or any Award shall be within the
sole discretion of the Committee, may be made at any time and shall be final,
conclusive and binding upon all Persons, including the Company, any Subsidiary,
any Participant or beneficiary thereof, any shareholder and any Employee.
SECTION 4. ELIGIBILITY. Any Employee, including any officer or
employee-director of the Company or any Subsidiary, shall be eligible to be
designated a Participant.
SECTION 5. INCENTIVE BONUS AWARDS.
2
<PAGE>
(a) Each Participant shall be entitled to participation in the bonus
pool set forth in Exhibit A hereto to the extent and under terms and conditions
determined by the Committee.
(b) Each Participant will be notified in writing at the time of his or
her approval as a Participant, of the amount and terms of such Participant's
Incentive Bonus opportunity.
(c) Incentive Bonus payments, if any, will be made as soon as
practicable after the end of the year or period to which they relate and have
been calculated and approved by the Committee.
(d) The Committee shall allocate Incentive Bonus Awards among the
Participants.
(e) The senior executive officer of each company or business acquired
by the Company after the Effective Date shall be a Participant in the Plan, with
the amount and terms of such Participant's Incentive Bonus opportunity to be
determined by the Committee.
SECTION 6. TERMINATION OF EMPLOYMENT. If a Participant dies, retires,
or otherwise terminates employment (except upon a termination for Cause by the
Company), a pro rata share of the Participant's award based on the period of
actual participation may, at the Committee's sole discretion, be paid to the
Participant after the end of the year if it would have become earned and payable
had the Participant's employment status not changed.
SECTION 7. AMENDMENT AND TERMINATION.
(a) AMENDMENTS TO THE PLAN. The Board may amend, alter, suspend,
discontinue, or terminate the Plan or any portion thereof at any time.
(b) AMENDMENTS TO AWARDS. Subject to the terms of the Plan and
applicable law, the Committee may waive any conditions or rights under, amend
any terms of, or alter, suspend, discontinue, cancel or terminate, any Award
theretofore granted, prospectively or retroactively; provided that any such
waiver, amendment, alteration, suspension, discontinuance, cancellation or
termination that would adversely affect the rights Participant or any
beneficiary thereof shall not to that extent be effective without the consent of
the affected Participant, holder or beneficiary.
3
<PAGE>
SECTION 8. GENERAL PROVISIONS.
(a) NONTRANSFERABILITY. No Award shall be assigned, alienated,
pledged, attached, sold or otherwise transferred or encumbered by a Participant.
(b) NO RIGHTS TO AWARDS. No Employee, Participant or other Person
shall have any claim to be granted any Award, and there is no obligation for
uniformity of treatment of Employees, Participants, or beneficiaries thereof.
The terms and conditions of Awards need not be the same with respect to each
recipient.
(c) WITHHOLDING. The Company or any Subsidiary shall have the right
and is hereby authorized to withhold from any Incentive Bonus due or made under
any Award or under the Plan the amount of any applicable withholding taxes in
respect of an Incentive Bonus payment under an Award or under the Plan and to
take such other action as may be necessary in the opinion of the Company to
satisfy all obligations for the payment of such taxes.
(d) NO LIMIT ON OTHER COMPENSATION ARRANGEMENTS. Nothing contained in
the Plan shall prevent the Company or any Subsidiary from adopting or continuing
in effect other compensation arrangements.
(e) NO RIGHT TO EMPLOYMENT. The grant of an Award shall not be
construed as giving a Participant the right to be retained in the employ or
service of the Company or any Subsidiary. Further, the Company or an Subsidiary
may at any time dismiss a Participant from employment or service, free from any
liability or any claim under the Plan, unless otherwise expressly provided in
the Plan or in any Award Agreement.
(f) GOVERNING LAW. The validity, construction, and effect of the Plan
and any rules and regulations relating to the Plan and any Award shall be
determined in accordance with the laws of the State of Delaware.
(g) SEVERABILITY. If any provision of the Plan or any Award is or
becomes or is deemed to be invalid, illegal, or unenforceable in any
jurisdiction or as to any Person or Award, or would disqualify the Plan or any
Award under any law deemed applicable by the Committee, such provision shall be
construed or deemed amended to conform to the applicable laws, or if it cannot
be construed or deemed amended without, in the determination of the Committee,
materially altering the intent of the Plan or the Award, such provision shall be
stricken as to such jurisdiction, Person or Award and the remainder of the Plan
and any such Award shall remain in full force and effect.
4
<PAGE>
(h) NO TRUST OR FUND CREATED. Neither the Plan nor any Award shall
create or be construed to create a trust or separate fund of any kind or a
fiduciary relationship between the Company or any Subsidiary and a Participant
or any other Person. To the extent that any Person acquires a right to receive
payments from the Company or any Subsidiary pursuant to an Award, such right
shall be no greater than the right of any unsecured general creditor of the
Company or any Subsidiary.
(i) HEADINGS. Headings are given to the Sections and subsections of
the Plan solely as a convenience to facilitate reference. Such headings shall
not be deemed in any way material or relevant to the construction or
interpretation of the Plan or any provision thereof.
SECTION 9. TERM OF THE PLAN.
(a) EFFECTIVE DATE. The Plan shall be effective as of January 1,
1999.
(b) EXPIRATION DATE. The Board and the Committee's authority to grant
Awards under the Plan shall terminate on the fourth anniversary of the Plan's
effective date.
5
<PAGE>
Exhibit 13.22.1
CERTIFICATE OF INCORPORATION
OF
DAH - IP HOLDINGS, INC.
* * * * *
1. The name of the corporation is DAH - IP Holdings, Inc.
2. The address of its registered office in the State of Delaware is
Corporation Trust Center, 1209 Orange Street in the City of Wilmington, County
of New Castle. The name of its registered agent at such address is The
Corporation Trust Company.
3. The total number of shares of stock which the corporation shall have
authority to issue is 1,000; all of such shares shall have $.01 par value.
To engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of Delaware.
5. The name and mailing address of each incorporator is as follows:
NAME MAILING ADDRESS
---- ---------------
M.C. Kinnamon 1209 Orange Street, Wilmington, DE 19801
The name and mailing address of each person who is to serve as a
director until the first annual meeting of the stockholders or until a successor
is elected and qualified, is as follows:
NAME MAILING ADDRESS
---- ---------------
R. Jack DeCrane 2361 Rosecrans Ave #180 El Segundo, CA 90245
Richard J. Kaplan 2361 Rosecrans Ave #180 El Segundo, CA 90245
6. The corporation is to have perpetual existence.
7. In furtherance and not in limitation of the powers conferred by
statute, the board of directors is expressly authorized:
To make, alter or repeal the by-laws of the corporation.
<PAGE>
8. Elections of directors need not be by written ballot unless the
by-laws of the corporation shall so provide.
9. The corporation reserves the right to amend, alter, change or repeal
any provision contained in this Certificate of Incorporation, in the manner now
or hereafter prescribed by statute, and all rights conferred upon stockholders
herein are granted subject to this reservation.
10. A director of the corporation shall not be personally liable to the
corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director except for liability (i) for any breach of the director's
duty of loyalty to the corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the Delaware General Corporation
Law, or (iv) for any transaction from which the director derived any improper
personal benefit.
WE, THE UNDERSIGNED, being each of the incorporators hereinbefore
named, for the purpose of forming a corporation pursuant to the General
Corporation Law of the State of Delaware, do make this Certificate, hereby
declaring and certifying that this is our act and deed and the facts herein
stated are true, and accordingly have hereunto set our hands this 17th day of
November, 1999.
/s/ M.C. KINNAMON
---------------------------
M.C. Kinnamon
<PAGE>
BYLAWS
OF
DAH-IP HOLDINGS, INC.
ARTICLE 1 - Offices
Section 1.1 REGISTERED OFFICE. The registered office of the Corporation
shall be in the City of Wilmington, County of New Castle, State of Delaware.
Section 1.2 OTHER OFFICES. The Corporation 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.
ARTICLE 2 - Meetings of Stockholders
Section 2.1 ANNUAL MEETINGS. Annual meetings of stockholders shall be
held on a date set by the Board of Directors in each year for the purpose of
electing directors and transacting such other proper business as may come before
the meeting.
Section 2.2 SPECIAL MEETINGS. Special meetings shall by held solely for
the purpose or purposes specified in the notice of meeting.
Section 2.3 TIME AND PLACE OF MEETINGS. Subject to the provisions of
Section 2.1 each meeting of stockholders shall be held on such date, at such
hour and at such place, either within or without the State of Delaware, as shall
be fixed by the Board of Directors or in the notice of the meeting or, in the
case of an adjourned meeting, as announced at the meeting at which the
adjournment is taken.
Section 2.4 NOTICE OF MEETINGS. A written notice of each meeting of
stockholders, stating the place, date and hour of the meeting and, in the case
of a special meeting, the purpose or purposes for which the meeting is called,
shall be given either personally or by mail to each stockholder entitled to vote
at the meeting. Unless otherwise provided by statute, the notice shall be given
not less than ten nor more than sixty days before the date of the meeting and,
if mailed, shall be deposited in the United States mail, postage prepaid,
directed to the stockholder at his address as it appears on the records of the
Corporation. No notice need be given to any person with whom communication is
unlawful, nor shall there be any duty to apply for any permit or license to give
notice to any such person. If the time and place of an adjourned meeting of
stockholders are announced at the meeting at which the adjournment is taken, no
notice need be given of the adjourned meeting unless that adjournment is for
more than thirty days or unless, after the adjournment, a new record date is
fixed for the adjourned meeting.
Section 2.5 WAIVER OF NOTICE. Anything herein to the contrary
notwithstanding, notice of any meeting of stockholders need not be given to any
stockholder who in person or by proxy shall have waived in writing notice of the
meeting, either before or after such meeting, or who shall attend the meeting in
person or by proxy, unless he attends for the express purpose of
<PAGE>
objecting, at the beginning of the meeting, to the transaction of any
business because the meeting is not lawfully called or convened.
Section 2.6 QUORUM AND MANNER OF ACTING. Subject to the provisions of
these bylaws, the certificate of incorporation and statutes as to the vote that
is required for a specified action, the presence in person or by proxy of the
holders of 50% of the outstanding shares of the Corporation entitled to vote at
any meeting of stockholders, plus one share, shall constitute a quorum for the
transaction of business, and the vote in person or by proxy of the holders of a
majority of the shares constituting such quorum shall be binding on all
stockholders of the Corporation. A majority of the shares present in person or
by proxy and entitled to vote may, regardless of whether or not they constitute
a quorum, adjourn the meeting to another time and place. Any business which
might have been transacted at the original meeting may be transacted at any
adjourned meeting at which a quorum is present.
Section 2.7 VOTING. Stockholders shall be entitled to cumulative voting
at all elections of directors to the extent provided in or pursuant to the
certificate of incorporation. Stockholders may vote by proxy but no proxy shall
be voted or acted upon after three years from its date, unless the proxy
provides for a longer period.
Section 2.8 INSPECTION OF ELECTION.
(a) The Board of Directors shall appoint an inspector of election to
act at each meeting of stockholders and any adjournment thereof. If an inspector
of election is not so appointed, or the person appointed as inspector fails or
refuses to act, the chairman of the meeting shall appoint an inspector of
election.
(b) The inspector of election shall determine the outstanding stock of
the Corporation and the voting power of each class and series, the stock
represented at the meeting and the existence of a quorum, shall receive votes or
ballots, shall count and tabulate all votes and shall determine the result; and
in connection therewith, the inspector shall determine the authority, validity
and effect of proxies, hear and determine all challenges and questions, and do
such other acts as may be proper to conduct the election or vote with fairness
to all stockholders.
(c) The inspector of election shall make a report in writing of any
challenge or question or other matter determined by him and shall execute a
certificate of any fact found in connection therewith. Any such report or
certificate shall be filed with the record of the meeting.
Section 2.9 LIST OF STOCKHOLDERS. A complete list of the stockholders
entitled to vote at each meeting of stockholders, arranged in alphabetical
order, and showing the address and number of shares registered in the name of
each stockholder, shall be prepared and made available for examination during
regular business hours by any stockholder for any purpose germane to the
meeting. The list shall be available for such examination at the place where the
meeting is to be held for a period of not less than ten days prior to the
meeting and during the whole time of the meeting.
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Section 2.10 ACTION WITHOUT A MEETING. Any action required to be taken
at any annual or special meeting of stockholders, or any action which may be
taken at any annual or special meeting of stockholders, may be taken without a
meeting, without prior notice and without a vote, if a consent in writing,
setting forth the action so taken, shall be 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.
ARTICLE 3 - Board of Directors
Section 3.1 NUMBER. The number of directors shall be no less than one
and no more than five, and shall be set by the Board of Directors by adoption of
a resolution with respect thereto.
Section 3.2 ORGANIZATION MEETINGS. As promptly as practicable after
each annual meeting of stockholders, an organization meeting of the Board of
Directors shall be held for the purpose of organization and the transaction of
other business.
Section 3.3 REGULAR MEETINGS. Regular meetings of the Board of
Directors may be held at such place and time as may be designated by the Board.
Section 3.4 SPECIAL MEETINGS. Special meetings of the Board of
Directors may be called by the Chairman, the President, any three directors, or,
if less than three, the remaining directors.
Section 3.5 BUSINESS OF MEETINGS. Except as otherwise expressly
provided in these bylaws, any and all business may be transacted at any meeting
of the Board of Directors; PROVIDED, that if so stated in the notice of meeting,
the business transacted at a special meeting shall be limited to the purpose or
purposes specified in the notice.
Section 3.6 TIME AND PLACE OF MEETINGS. Subject to the provisions of
Section 3.4 each meeting of the Board of Directors shall be held on such date,
at such hour and in such place as fixed by the Board or in the notice or waivers
of notice of the meeting or, in the case of an adjourned meeting, as announced
at the meeting at which the adjournment is taken.
Section 3.7 NOTICE OF MEETINGS. No notice need be given of any
organization or regular meeting of the Board of Directors for which the date,
hour and place have been fixed by the Board. Notice of the date, hour and place
of all other organization and regular meetings, and of all special meetings,
shall be given to each director personally, by telephone or telegraph or by
mail. If by mail, the notice shall be deposited in the United States mail,
postage prepaid, directed to the director at his residence or usual place of
business as the same appear on the books of the Corporation not later than five
days before the meeting. If given by telegraph, the notice shall be directed to
the director at his residence or usual place of business as the same appear on
the books of the Corporation not later than at any time during the day before
the meeting. If given personally or by telephone, the notice shall be given not
later than the day before the meeting.
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Section 3.8 WAIVER OF NOTICE. Anything herein to the contrary
notwithstanding, notice of any meeting of the Board of Directors need not be
given to any director who shall have waived in writing notice of the meeting,
either before or after the meeting, or who shall attend such meeting, unless he
attends 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.
Section 3.9 ATTENDANCE BY TELEPHONE. Directors may participate in
meetings of the Board of Directors by means of conference telephone or similar
communications equipment by means of which all directors participating in the
meeting can hear one another, and such participation shall constitute presence
in person in the meeting.
Section 3.10 QUORUM AND MANNER OF ACTING. A majority of the total
number of directors at the time provided for pursuant to Section 3.1 shall
constitute a quorum for the transaction of business at any meeting of the Board
of Directors and, except as otherwise provided in these bylaws, in the
certificate of incorporation or by statute, the act of a majority of the
directors present at any meeting at which a quorum is present shall be the act
of the Board. A majority of the directors present at any meeting, regardless of
whether or not they constitute a quorum, may adjourn the meeting to another time
or place. Any business which might have been transacted at the original meeting
may be transacted at any adjourned meeting at which a quorum is present.
Section 3.11 ACTION WITHOUT A MEETING. Any action which could be taken
at a meeting of the Board of Directors may be taken without a meeting if all of
the directors consent to the action in writing and the writing or writings are
filed with the minutes of the Board.
Section 3.12 RESIGNATION OF DIRECTORS. Any director may resign at any
time upon written notice to the Corporation. The resignation shall become
effective at the time specified in the notice and, unless otherwise provided in
the notice, acceptance of the resignation shall not be necessary to make it
effective.
Section 3.13 VACANCIES AND REMOVAL. Vacancies in the Board of
Directors, except vacancies created by removal of a director by the
shareholders, may be filled by a majority of the remaining directors, though
less than a quorum, or by a sole remaining director, and each director so
elected shall hold office until a successor is elected at an annual or a special
meeting of the shareholders in accordance with these Bylaws.
The shareholders may elect a director or directors at any time to fill
any vacancy or vacancies not filled by the directors. If the Board of Directors
accepts the resignation of a director tendered to take effect at a future time,
the Board or the shareholders may elect a successor to take office when the
resignation is to become effective.
No reduction of the authorized number of directors shall have the
effect of removing any director prior to the expiration of such director's term
of office.
A vacancy or vacancies in the Board of Directors shall be deemed to
exist in case of the death, resignation or removal of any director, or if the
authorized number of directors is
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increased, or if the shareholders fail at any annual or special meeting of
shareholders at which any director or directors are elected to elect the full
authorized number of directors to be voted for at that meeting. The Board may
declare vacant the office of a director who has been declared of unsound mind
by an order of court or convicted of a felony.
All the directors, or any individual director or directors, may be
removed from office, without cause, by the vote of the shareholders having a
majority of the voting power entitling them to elect directors in place of those
to be removed.
ARTICLE 4 - Committees of the Board of Directors
Section 4.1 EXECUTIVE COMMITTEE. By resolution adopted by an
affirmative vote of the majority of the whole Board of Directors, the Board may
appoint an Executive Committee consisting of the chief executive officer of the
Corporation, EX OFFICIO, and two or more other directors and, if deemed
desirable, one or more directors as alternate members who may replace any
absentee or disqualified member at any meeting of the Executive Committee. If so
appointed, the Executive Committee shall, when the Board is not in session, have
all the power and authority of the Board in the management of the business and
affairs of the Corporation not reserved to the Board by Section 4.3 including,
but not limited to, the power and authority to declare dividends, to authorize
the issuance of stock and to adopt a certificate of ownership and merger. The
Executive Committee shall keep a record of its acts and proceedings and shall
report the same from time to time to the Board of Directors.
Section 4.2 OTHER COMMITTEES. By resolution adopted by an affirmative
vote of the majority of the whole Board of Directors, the Board may from time to
time appoint such other committees of the Board, consisting of one or more
directors and, if deemed desirable, one or more directors who shall act as
alternate members and who may replace any absentee or disqualified member at any
meeting of the committee, and may delegate to each such committee any of the
powers and authority of the Board in the management of the business and affairs
of the Corporation not reserved to the Board pursuant to Section 4.3. Each such
committee shall keep a record of its acts and proceedings.
Section 4.3 POWERS RESERVED TO THE BOARD. No committee of the Board
shall take any action to amend the certificate of incorporation (except that a
committee may, to the extent authorized in the resolution or resolutions
providing for the issuance of shares of stock adopted by the Board, fix any of
the preferences or rights of such shares relating to dividends, redemption,
dissolution, any distribution of assets of the Corporation or the conversion
into, or the exchange of such shares for, shares of any other class or classes
or any other series of the same or any other class or classes of stock of the
Corporation) or these bylaws, adopt any agreement to merge or consolidate the
Corporation, or recommend to the stockholders a sale, lease or exchange of all
or substantially all of the property and assets of the Corporation, a
dissolution of the Corporation or a revocation of a dissolution of the
Corporation; nor shall any committee of the Board take any action which is
required in these bylaws, in the certificate of incorporation or by statute to
be taken by a vote of a specified proportion of the whole Board of Directors.
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Section 4.4 ELECTION OF COMMITTEE MEMBERS; VACANCIES. So far as
practicable, members of the committees of the Board and their alternates (if
any) shall be appointed at each organization meeting of the Board of
Directors and, unless sooner discharged by an affirmative vote of the
majority of the whole Board, shall hold office until the next organization
meeting of the Board and until their respective successors are appointed. In
the absence or disqualification of any member of a committee of the Board,
the member or members (including alternates) present at any meeting of the
committee and not disqualified from voting, whether or not he or they
constitute a quorum, may unanimously appoint another director to act at a
meeting in place of any absent or disqualified member. Vacancies in
committees of the Board created by death, resignation or removal may be
filled by an affirmative vote of a majority of the whole Board of Directors.
Section 4.5 MEETINGS. Each committee of the Board may provide for
regular meetings of such committee. Special meetings of each committee may be
called by any two members of the committee (or, if there is only one member,
by that member in concert with the chief executive officer) or by the chief
executive officer of the Corporation. The provisions of Section 3 regarding
the business, time and place, notice and waivers of notice of meetings,
attendance at meetings and action without a meeting shall apply to each
committee of the Board, except that the references in such provisions to the
directors and the Board of Directors shall be deemed respectively to be
references to the members of the committee and to the committee.
Section 4.6 QUORUM AND MANNER OF ACTING. A majority of the members
of any committee of the Board shall constitute a quorum for the transaction
of business at meetings of the committee, and the act of a majority of the
members present at any meeting at which a quorum is present shall be the act
of the committee. A majority of the members present at any meeting,
regardless of whether or not they constitute a quorum, may adjourn the
meeting to another time or place. Any business which might have been
transacted at the original meeting may be transacted at any adjourned meeting
at which a quorum is present.
ARTICLE 5 - Officers
Section 5.1 ELECTION AND APPOINTMENT. The elected officers of the
Corporation shall consist of a Chief Executive Officer, one or more Vice
Presidents, a Chief Financial Officer, a Secretary and such other elected
officers as shall from time to time be designated by the Board of Directors.
The Board may from time to time make, or provide for, such other designations
as it deems appropriate. The Board may also appoint, or provide for the
appointment of, such other officers and agents as may from time to time
appear necessary or advisable in the conduct of the affairs of the
Corporation. Any number of offices may be held by the same person, except no
person may at the same time be both the Chief Executive Officer and the chief
financial officer.
Section 5.2 DUTIES OF CHIEF EXECUTIVE OFFICER. The chief executive
officer of the Corporation shall preside at all meetings of stockholders and
(unless the Board of Directors elects a separate Chairman) at all meetings of
the Board of Directors and the Executive Committee and, except to the extent
otherwise provided in these bylaws or by the Board, shall have general
authority to execute any and all documents in the name of the Corporation and
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general and active supervision and control of all of the business and affairs
of the Corporation. In the absence of the chief executive officer, his duties
shall be performed and his powers may be exercised by the chief financial
officer or by such other officer as shall be designated either by the chief
executive officer in writing or (failing such designation) by the Executive
Committee or Board of Directors.
Section 5.3 DUTIES OF OTHER OFFICERS. The other officers of the
Corporation shall have such powers and duties not inconsistent with these
bylaws as may from time to time be conferred upon them in or pursuant to
resolutions of the Board of Directors, and shall have such additional powers
and duties not inconsistent with such resolutions as may from time to time be
assigned to them by any competent superior officer. The Board shall assign to
one or more of the officers of the Corporation the duty to record the
proceedings of the meetings of the stockholders and the Board of Directors in
a book to be kept for that purpose.
Section 5.4 TERM OF OFFICE AND VACANCY. So far as practicable, the
elected officers shall be elected at each organization meeting of the Board,
and shall hold office until the next organization meeting of the Board and
until their respective successors are elected and qualified. If a vacancy
shall occur in any elected office, the Board of Directors may elect a
successor for the remainder of the term. Appointed officers shall hold office
at the pleasure of the Board. Any officer may resign by written notice to the
Corporation.
Section 5.5 REMOVAL OF ELECTED OFFICERS. Elected officers may be
removed at any time, either for or without cause, by the affirmative vote of
a majority of the whole Board of Directors at a meeting called for that
purpose.
Section 5.6 COMPENSATION OF ELECTED OFFICERS. The compensation of
all elected officers of the Corporation shall be fixed from time to time by
the Board of Directors.
ARTICLE 6 - Shares and Transfer of Shares
Section 6.1 CERTIFICATES. Every stockholder shall be entitled to a
certificate signed by the Chairman or Vice Chairman of the Board of
Directors, or the Chief Executive Officer or the President, and by the Chief
Financial Officer or the Treasurer or an Assistant Treasurer, or the
Secretary or an Assistant Secretary of the Corporation, certifying the class
and number of shares owned by him in the Corporation; PROVIDED that, any and
all signatures on a 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 by the
Corporation with the same effect as if he or it were such officer, transfer
agent or registrar at the date of issue.
Section 6.2 TRANSFER AGENTS AND REGISTRARS. The Board of Directors
may, in its discretion, appoint one or more responsible banks or trust
companies in the City of New York or in such other city or cities (if any) as
the Board may deem advisable, from time to time, to act as transfer agents
and registrars of shares of the Corporation; and, when such appointments
shall
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have been made, no certificate for shares of the Corporation shall be valid
until countersigned by one of such transfer agents and registered by one of
such registrars.
Section 6.3 TRANSFERS OF SHARES. Shares of the Corporation may be
transferred by delivery of the certificates therefor, accompanied either by
an assignment in writing on the back of the certificates or by written power
of attorney to sell, assign and transfer the same, signed by the record
holder thereof; but no transfer shall affect the right of the Corporation to
pay any dividend upon the shares to the holder of record thereof, or to treat
the holder of record as the holder in fact thereof for all purposes, and no
transfer shall be valid, except between the parties thereto, until such
transfer shall have been made upon the books of the Corporation.
Section 6.4 LOST CERTIFICATES. In case any certificate for shares of
the Corporation shall be lost, stolen or destroyed, the Board of Directors,
in its discretion, or any transfer agent thereunto duly authorized by the
Board, may authorize the issue of a substitute certificate in place of the
certificate so lost, stolen or destroyed, and may cause such substitute
certificate to be countersigned by the appropriate transfer agent (if any)
and registered by the appropriate registrar (if any); PROVIDED that, in each
such case, the applicant for a substitute certificate shall furnish to the
Corporation and to such of its transfer agents and registrars as may require
the same, evidence to their satisfaction, in their discretion, of the loss,
theft or destruction of such certificate and of the ownership thereof, and
also such security or indemnity as may by them be required.
Section 6.5 RECORD DATES. 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, or to express consent to action in
writing without a meeting, or entitled to receive payment of any dividend or
other distribution or allotment of any rights, or entitled to exercise any
rights in respect of any change, conversion or exchange of shares or for the
purpose of any other lawful action, the Board of Directors may fix, in
advance, a record date which shall be not more than sixty nor less than ten
days before the date of any meeting of stockholders, and not more than sixty
days prior to any other action. In such case, those stockholders, and only
those stockholders, who are stockholders of record on the date fixed by the
Board of Directors shall, notwithstanding any subsequent transfer of shares
on the books of the Corporation, be entitled to notice of and to vote at such
meeting of stockholders, or any adjournment thereof, or to express consent to
such corporate action in writing without a meeting, or entitled to receive
payment of such dividend or other distribution or allotment of rights, or
entitled to exercise rights in respect of any such change, conversion or
exchange of shares or to participate in any such other lawful action.
ARTICLE 7 - Miscellaneous
Section 7.1 FISCAL YEAR. The fiscal year of the Corporation shall be
fixed by resolution of the Board of Directors.
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Section 7.2 SIGNATURE ON NEGOTIABLE INSTRUMENTS. All bills, notes,
checks or other instruments for the payment of money shall be signed or
countersigned in such manner as from time to time may be prescribed by
resolution of the Board of Directors.
Section 7.3 INDEMNIFICATION OF OFFICERS, DIRECTORS, EMPLOYEES,
AGENTS AND FIDUCIARIES; INSURANCE.
(a) The Corporation may indemnify, in accordance with and to the
full extent permitted by the laws of the State of Delaware, as such laws may
be amended from time to time, and shall so indemnify to the full extent
permitted by such laws, any person (and the heirs and legal representatives
of any such person) made or threatened to be made a party to any threatened,
pending, or completed action, suit, or proceeding, whether civil, criminal,
administrative, or investigative, by reason of the fact that such person is
or was a director, officer, employee, agent, or fiduciary of the Corporation
or any constituent corporation absorbed in a consolidation or merger, or
serves or served as such with another corporation, partnership, joint
venture, trust or other enterprise at the request of the Corporation or any
such constituent corporation.
(b) By action of the Board of Directors notwithstanding any interest
of the directors in such action, the Corporation may purchase and maintain
insurance in such amounts as the Board of Directors deems appropriate on
behalf of any person who is or was a director, officer, employee, agent or
fiduciary of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee, agent or fiduciary of another
corporation, partnership, joint venture, trust or other enterprise against
any liability asserted against him and incurred by him in any such capacity,
or arising out of his status as such, whether or not the Corporation shall
have power to indemnify him against such liability under the provisions of
this Section.
ARTICLE 8 - Bylaw Amendments
Section 8.1 BY THE STOCKHOLDERS. These bylaws may be amended by the
stockholders at a meeting called for the purpose in any manner not
inconsistent with any provision of law or of the certificate of incorporation.
Section 8.2 BY THE DIRECTORS. These bylaws may be amended by the
affirmative vote of a majority of the whole Board of Directors in any manner
not inconsistent with any provision of law or of the certificate of
incorporation.
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Exhibit 13.23.1
CERTIFICATE OF INCORPORATION
OF
DAH - IP INFINITY, INC.
* * * * *
1. The name of the corporation is DAH - IP Infinity, Inc.
2. The address of its registered office in the State of Delaware is
Corporation Trust Center, 1209 Orange Street in the City of Wilmington, County
of New Castle. The name of its registered agent at such address is The
Corporation Trust Company.
3. The total number of shares of stock which the corporation shall have
authority to issue is 1,000; all of such shares shall have $.01 par value.
To engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of Delaware.
5. The name and mailing address of each incorporator is as follows:
NAME MAILING ADDRESS
---- ---------------
M.C. Kinnamon 1209 Orange Street, Wilmington, DE 19801
The name and mailing address of each person who is to serve as a
director until the first annual meeting of the stockholders or until a successor
is elected and qualified, is as follows:
NAME MAILING ADDRESS
---- ---------------
R. Jack DeCrane 2361 Rosecrans Ave #180 El Segundo, CA 90245
Richard J. Kaplan 2361 Rosecrans Ave #180 El Segundo, CA 90245
6. The corporation is to have perpetual existence.
7. In furtherance and not in limitation of the powers conferred by
statute, the board of directors is expressly authorized:
To make, alter or repeal the by-laws of the corporation.
<PAGE>
8. Elections of directors need not be by written ballot unless the
by-laws of the corporation shall so provide.
9. The corporation reserves the right to amend, alter, change or repeal
any provision contained in this Certificate of Incorporation, in the manner now
or hereafter prescribed by statute, and all rights conferred upon stockholders
herein are granted subject to this reservation.
10. A director of the corporation shall not be personally liable to the
corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director except for liability (i) for any breach of the director's
duty of loyalty to the corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the Delaware General Corporation
Law, or (iv) for any transaction from which the director derived any improper
personal benefit.
WE, THE UNDERSIGNED, being each of the incorporators hereinbefore
named, for the purpose of forming a corporation pursuant to the General
Corporation Law of the State of Delaware, do make this Certificate, hereby
declaring and certifying that this is our act and deed and the facts herein
stated are true, and accordingly have hereunto set our hands this 09th day of
December, 1999.
/s/ M.C. Kinnamon
-------------------------------------
M.C. Kinnamon
<PAGE>
Exhibit 13.23.2
BYLAWS
OF
DAH-IP INFINITY, INC.
ARTICLE 1 - Offices
Section 1.1 REGISTERED OFFICE. The registered office of the
Corporation shall be in the City of Wilmington, County of New Castle, State
of Delaware.
Section 1.2 OTHER OFFICES. The Corporation 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.
ARTICLE 2 - Meetings of Stockholders
Section 2.1 ANNUAL MEETINGS. Annual meetings of stockholders shall
be held on a date set by the Board of Directors in each year for the purpose
of electing directors and transacting such other proper business as may come
before the meeting.
Section 2.2 SPECIAL MEETINGS. Special meetings shall by held solely
for the purpose or purposes specified in the notice of meeting.
Section 2.3 TIME AND PLACE OF MEETINGS. Subject to the provisions of
Section 2.1 each meeting of stockholders shall be held on such date, at such
hour and at such place, either within or without the State of Delaware, as
shall be fixed by the Board of Directors or in the notice of the meeting or,
in the case of an adjourned meeting, as announced at the meeting at which the
adjournment is taken.
Section 2.4 NOTICE OF MEETINGS. A written notice of each meeting of
stockholders, stating the place, date and hour of the meeting and, in the
case of a special meeting, the purpose or purposes for which the meeting is
called, shall be given either personally or by mail to each stockholder
entitled to vote at the meeting. Unless otherwise provided by statute, the
notice shall be given not less than ten nor more than sixty days before the
date of the meeting and, if mailed, shall be deposited in the United States
mail, postage prepaid, directed to the stockholder at his address as it
appears on the records of the Corporation. No notice need be given to any
person with whom communication is unlawful, nor shall there be any duty to
apply for any permit or license to give notice to any such person. If the
time and place of an adjourned meeting of stockholders are announced at the
meeting at which the adjournment is taken, no notice need be given of the
adjourned meeting unless that adjournment is for more than thirty days or
unless, after the adjournment, a new record date is fixed for the adjourned
meeting.
Section 2.5 WAIVER OF NOTICE. Anything herein to the contrary
notwithstanding, notice of any meeting of stockholders need not be given to
any stockholder who in person or by proxy shall have waived in writing notice
of the meeting, either before or after such meeting, or who shall attend the
meeting in person or by proxy, unless he attends for the express purpose of
<PAGE>
objecting, at the beginning of the meeting, to the transaction of any
business because the meeting is not lawfully called or convened.
Section 2.6 QUORUM AND MANNER OF ACTING. Subject to the provisions
of these bylaws, the certificate of incorporation and statutes as to the vote
that is required for a specified action, the presence in person or by proxy
of the holders of 50% of the outstanding shares of the Corporation entitled
to vote at any meeting of stockholders, plus one share, shall constitute a
quorum for the transaction of business, and the vote in person or by proxy of
the holders of a majority of the shares constituting such quorum shall be
binding on all stockholders of the Corporation. A majority of the shares
present in person or by proxy and entitled to vote may, regardless of whether
or not they constitute a quorum, adjourn the meeting to another time and
place. Any business which might have been transacted at the original meeting
may be transacted at any adjourned meeting at which a quorum is present.
Section 2.7 VOTING. Stockholders shall be entitled to cumulative
voting at all elections of directors to the extent provided in or pursuant to
the certificate of incorporation. Stockholders may vote by proxy but no proxy
shall be voted or acted upon after three years from its date, unless the
proxy provides for a longer period.
Section 2.8 INSPECTION OF ELECTION.
(a) The Board of Directors shall appoint an inspector of election to
act at each meeting of stockholders and any adjournment thereof. If an
inspector of election is not so appointed, or the person appointed as
inspector fails or refuses to act, the chairman of the meeting shall appoint
an inspector of election.
(b) The inspector of election shall determine the outstanding stock
of the Corporation and the voting power of each class and series, the stock
represented at the meeting and the existence of a quorum, shall receive votes
or ballots, shall count and tabulate all votes and shall determine the
result; and in connection therewith, the inspector shall determine the
authority, validity and effect of proxies, hear and determine all challenges
and questions, and do such other acts as may be proper to conduct the
election or vote with fairness to all stockholders.
(c) The inspector of election shall make a report in writing of any
challenge or question or other matter determined by him and shall execute a
certificate of any fact found in connection therewith. Any such report or
certificate shall be filed with the record of the meeting.
Section 2.9 LIST OF STOCKHOLDERS. A complete list of the
stockholders entitled to vote at each meeting of stockholders, arranged in
alphabetical order, and showing the address and number of shares registered
in the name of each stockholder, shall be prepared and made available for
examination during regular business hours by any stockholder for any purpose
germane to the meeting. The list shall be available for such examination at
the place where the meeting is to be held for a period of not less than ten
days prior to the meeting and during the whole time of the meeting.
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Section 2.10 ACTION WITHOUT A MEETING. Any action required to be
taken at any annual or special meeting of stockholders, or any action which
may be taken at any annual or special meeting of stockholders, may be taken
without a meeting, without prior notice and without a vote, if a consent in
writing, setting forth the action so taken, shall be 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.
ARTICLE 3 - Board of Directors
Section 3.1 NUMBER. The number of directors shall be no less than
one and no more than five, and shall be set by the Board of Directors by
adoption of a resolution with respect thereto.
Section 3.2 ORGANIZATION MEETINGS. As promptly as practicable after
each annual meeting of stockholders, an organization meeting of the Board of
Directors shall be held for the purpose of organization and the transaction
of other business.
Section 3.3 REGULAR MEETINGS. Regular meetings of the Board of
Directors may be held at such place and time as may be designated by the
Board.
Section 3.4 SPECIAL MEETINGS. Special meetings of the Board of
Directors may be called by the Chairman, the President, any three directors,
or, if less than three, the remaining directors.
Section 3.5 BUSINESS OF MEETINGS. Except as otherwise expressly
provided in these bylaws, any and all business may be transacted at any
meeting of the Board of Directors; PROVIDED, that if so stated in the notice
of meeting, the business transacted at a special meeting shall be limited to
the purpose or purposes specified in the notice.
Section 3.6 TIME AND PLACE OF MEETINGS. Subject to the provisions of
Section 3.4 each meeting of the Board of Directors shall be held on such
date, at such hour and in such place as fixed by the Board or in the notice
or waivers of notice of the meeting or, in the case of an adjourned meeting,
as announced at the meeting at which the adjournment is taken.
Section 3.7 NOTICE OF MEETINGS. No notice need be given of any
organization or regular meeting of the Board of Directors for which the date,
hour and place have been fixed by the Board. Notice of the date, hour and
place of all other organization and regular meetings, and of all special
meetings, shall be given to each director personally, by telephone or
telegraph or by mail. If by mail, the notice shall be deposited in the United
States mail, postage prepaid, directed to the director at his residence or
usual place of business as the same appear on the books of the Corporation
not later than five days before the meeting. If given by telegraph, the
notice shall be directed to the director at his residence or usual place of
business as the same appear on the books of the Corporation not later than at
any time during the day before the meeting. If given personally or by
telephone, the notice shall be given not later than the day before the
meeting.
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Section 3.8 WAIVER OF NOTICE. Anything herein to the contrary
notwithstanding, notice of any meeting of the Board of Directors need not be
given to any director who shall have waived in writing notice of the meeting,
either before or after the meeting, or who shall attend such meeting, unless
he attends 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.
Section 3.9 ATTENDANCE BY TELEPHONE. Directors may participate in
meetings of the Board of Directors by means of conference telephone or
similar communications equipment by means of which all directors
participating in the meeting can hear one another, and such participation
shall constitute presence in person in the meeting.
Section 3.10 QUORUM AND MANNER OF ACTING. A majority of the total
number of directors at the time provided for pursuant to Section 3.1 shall
constitute a quorum for the transaction of business at any meeting of the
Board of Directors and, except as otherwise provided in these bylaws, in the
certificate of incorporation or by statute, the act of a majority of the
directors present at any meeting at which a quorum is present shall be the
act of the Board. A majority of the directors present at any meeting,
regardless of whether or not they constitute a quorum, may adjourn the
meeting to another time or place. Any business which might have been
transacted at the original meeting may be transacted at any adjourned meeting
at which a quorum is present.
Section 3.11 ACTION WITHOUT A MEETING. Any action which could be
taken at a meeting of the Board of Directors may be taken without a meeting
if all of the directors consent to the action in writing and the writing or
writings are filed with the minutes of the Board.
Section 3.12 RESIGNATION OF DIRECTORS. Any director may resign at
any time upon written notice to the Corporation. The resignation shall become
effective at the time specified in the notice and, unless otherwise provided
in the notice, acceptance of the resignation shall not be necessary to make
it effective.
Section 3.13 VACANCIES AND REMOVAL. Vacancies in the Board of
Directors, except vacancies created by removal of a director by the
shareholders, may be filled by a majority of the remaining directors, though
less than a quorum, or by a sole remaining director, and each director so
elected shall hold office until a successor is elected at an annual or a
special meeting of the shareholders in accordance with these Bylaws.
The shareholders may elect a director or directors at any time to
fill any vacancy or vacancies not filled by the directors. If the Board of
Directors accepts the resignation of a director tendered to take effect at a
future time, the Board or the shareholders may elect a successor to take
office when the resignation is to become effective.
No reduction of the authorized number of directors shall have the
effect of removing any director prior to the expiration of such director's
term of office.
A vacancy or vacancies in the Board of Directors shall be deemed to
exist in case of the death, resignation or removal of any director, or if the
authorized number of directors is
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increased, or if the shareholders fail at any annual or special meeting of
shareholders at which any director or directors are elected to elect the full
authorized number of directors to be voted for at that meeting. The Board may
declare vacant the office of a director who has been declared of unsound mind
by an order of court or convicted of a felony.
All the directors, or any individual director or directors, may be
removed from office, without cause, by the vote of the shareholders having a
majority of the voting power entitling them to elect directors in place of
those to be removed.
ARTICLE 4 - Committees of the Board of Directors
Section 4.1 EXECUTIVE COMMITTEE. By resolution adopted by an
affirmative vote of the majority of the whole Board of Directors, the Board
may appoint an Executive Committee consisting of the chief executive officer
of the Corporation, EX OFFICIO, and two or more other directors and, if
deemed desirable, one or more directors as alternate members who may replace
any absentee or disqualified member at any meeting of the Executive
Committee. If so appointed, the Executive Committee shall, when the Board is
not in session, have all the power and authority of the Board in the
management of the business and affairs of the Corporation not reserved to the
Board by Section 4.3 including, but not limited to, the power and authority
to declare dividends, to authorize the issuance of stock and to adopt a
certificate of ownership and merger. The Executive Committee shall keep a
record of its acts and proceedings and shall report the same from time to
time to the Board of Directors.
Section 4.2 OTHER COMMITTEES. By resolution adopted by an
affirmative vote of the majority of the whole Board of Directors, the Board
may from time to time appoint such other committees of the Board, consisting
of one or more directors and, if deemed desirable, one or more directors who
shall act as alternate members and who may replace any absentee or
disqualified member at any meeting of the committee, and may delegate to each
such committee any of the powers and authority of the Board in the management
of the business and affairs of the Corporation not reserved to the Board
pursuant to Section 4.3. Each such committee shall keep a record of its acts
and proceedings.
Section 4.3 POWERS RESERVED TO THE BOARD. No committee of the Board
shall take any action to amend the certificate of incorporation (except that
a committee may, to the extent authorized in the resolution or resolutions
providing for the issuance of shares of stock adopted by the Board, fix any
of the preferences or rights of such shares relating to dividends,
redemption, dissolution, any distribution of assets of the Corporation or the
conversion into, or the exchange of such shares for, shares of any other
class or classes or any other series of the same or any other class or
classes of stock of the Corporation) or these bylaws, adopt any agreement to
merge or consolidate the Corporation, or recommend to the stockholders a
sale, lease or exchange of all or substantially all of the property and
assets of the Corporation, a dissolution of the Corporation or a revocation
of a dissolution of the Corporation; nor shall any committee of the Board
take any action which is required in these bylaws, in the certificate of
incorporation or by statute to be taken by a vote of a specified proportion
of the whole Board of Directors.
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Section 4.4 ELECTION OF COMMITTEE MEMBERS; VACANCIES. So far as
practicable, members of the committees of the Board and their alternates (if
any) shall be appointed at each organization meeting of the Board of Directors
and, unless sooner discharged by an affirmative vote of the majority of the
whole Board, shall hold office until the next organization meeting of the Board
and until their respective successors are appointed. In the absence or
disqualification of any member of a committee of the Board, the member or
members (including alternates) present at any meeting of the committee and not
disqualified from voting, whether or not he or they constitute a quorum, may
unanimously appoint another director to act at a meeting in place of any absent
or disqualified member. Vacancies in committees of the Board created by death,
resignation or removal may be filled by an affirmative vote of a majority of the
whole Board of Directors.
Section 4.5 MEETINGS. Each committee of the Board may provide for
regular meetings of such committee. Special meetings of each committee may be
called by any two members of the committee (or, if there is only one member, by
that member in concert with the chief executive officer) or by the chief
executive officer of the Corporation. The provisions of Section 3 regarding the
business, time and place, notice and waivers of notice of meetings, attendance
at meetings and action without a meeting shall apply to each committee of the
Board, except that the references in such provisions to the directors and the
Board of Directors shall be deemed respectively to be references to the members
of the committee and to the committee.
Section 4.6 QUORUM AND MANNER OF ACTING. A majority of the members of
any committee of the Board shall constitute a quorum for the transaction of
business at meetings of the committee, and the act of a majority of the members
present at any meeting at which a quorum is present shall be the act of the
committee. A majority of the members present at any meeting, regardless of
whether or not they constitute a quorum, may adjourn the meeting to another time
or place. Any business which might have been transacted at the original meeting
may be transacted at any adjourned meeting at which a quorum is present.
ARTICLE 5 - Officers
Section 5.1 ELECTION AND APPOINTMENT. The elected officers of the
Corporation shall consist of a Chief Executive Officer, one or more Vice
Presidents, a Chief Financial Officer, a Secretary and such other elected
officers as shall from time to time be designated by the Board of Directors. The
Board may from time to time make, or provide for, such other designations as it
deems appropriate. The Board may also appoint, or provide for the appointment
of, such other officers and agents as may from time to time appear necessary or
advisable in the conduct of the affairs of the Corporation. Any number of
offices may be held by the same person, except no person may at the same time be
both the Chief Executive Officer and the chief financial officer.
Section 5.2 DUTIES OF CHIEF EXECUTIVE OFFICER. The chief executive
officer of the Corporation shall preside at all meetings of stockholders and
(unless the Board of Directors elects a separate Chairman) at all meetings of
the Board of Directors and the Executive Committee and, except to the extent
otherwise provided in these bylaws or by the Board, shall have general authority
to execute any and all documents in the name of the Corporation and
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general and active supervision and control of all of the business and affairs
of the Corporation. In the absence of the chief executive officer, his duties
shall be performed and his powers may be exercised by the chief financial
officer or by such other officer as shall be designated either by the chief
executive officer in writing or (failing such designation) by the Executive
Committee or Board of Directors.
Section 5.3 DUTIES OF OTHER OFFICERS. The other officers of the
Corporation shall have such powers and duties not inconsistent with these bylaws
as may from time to time be conferred upon them in or pursuant to resolutions of
the Board of Directors, and shall have such additional powers and duties not
inconsistent with such resolutions as may from time to time be assigned to them
by any competent superior officer. The Board shall assign to one or more of the
officers of the Corporation the duty to record the proceedings of the meetings
of the stockholders and the Board of Directors in a book to be kept for that
purpose.
Section 5.4 TERM OF OFFICE AND VACANCY. So far as practicable, the
elected officers shall be elected at each organization meeting of the Board, and
shall hold office until the next organization meeting of the Board and until
their respective successors are elected and qualified. If a vacancy shall occur
in any elected office, the Board of Directors may elect a successor for the
remainder of the term. Appointed officers shall hold office at the pleasure of
the Board. Any officer may resign by written notice to the Corporation.
Section 5.5 REMOVAL OF ELECTED OFFICERS. Elected officers may be
removed at any time, either for or without cause, by the affirmative vote of a
majority of the whole Board of Directors at a meeting called for that purpose.
Section 5.6 COMPENSATION OF ELECTED OFFICERS. The compensation of all
elected officers of the Corporation shall be fixed from time to time by the
Board of Directors.
ARTICLE 6 - Shares and Transfer of Shares
Section 6.1 CERTIFICATES. Every stockholder shall be entitled to a
certificate signed by the Chairman or Vice Chairman of the Board of Directors,
or the Chief Executive Officer or the President, and by the Chief Financial
Officer or the Treasurer or an Assistant Treasurer, or the Secretary or an
Assistant Secretary of the Corporation, certifying the class and number of
shares owned by him in the Corporation; PROVIDED that, any and all signatures on
a 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 by the Corporation with the
same effect as if he or it were such officer, transfer agent or registrar at the
date of issue.
Section 6.2 TRANSFER AGENTS AND REGISTRARS. The Board of Directors may,
in its discretion, appoint one or more responsible banks or trust companies in
the City of New York or in such other city or cities (if any) as the Board may
deem advisable, from time to time, to act as transfer agents and registrars of
shares of the Corporation; and, when such appointments shall
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have been made, no certificate for shares of the Corporation shall be valid
until countersigned by one of such transfer agents and registered by one of such
registrars.
Section 6.3 TRANSFERS OF SHARES. Shares of the Corporation may be
transferred by delivery of the certificates therefor, accompanied either by an
assignment in writing on the back of the certificates or by written power of
attorney to sell, assign and transfer the same, signed by the record holder
thereof; but no transfer shall affect the right of the Corporation to pay any
dividend upon the shares to the holder of record thereof, or to treat the holder
of record as the holder in fact thereof for all purposes, and no transfer shall
be valid, except between the parties thereto, until such transfer shall have
been made upon the books of the Corporation.
Section 6.4 LOST CERTIFICATES. In case any certificate for shares of
the Corporation shall be lost, stolen or destroyed, the Board of Directors, in
its discretion, or any transfer agent thereunto duly authorized by the Board,
may authorize the issue of a substitute certificate in place of the certificate
so lost, stolen or destroyed, and may cause such substitute certificate to be
countersigned by the appropriate transfer agent (if any) and registered by the
appropriate registrar (if any); PROVIDED that, in each such case, the applicant
for a substitute certificate shall furnish to the Corporation and to such of its
transfer agents and registrars as may require the same, evidence to their
satisfaction, in their discretion, of the loss, theft or destruction of such
certificate and of the ownership thereof, and also such security or indemnity as
may by them be required.
Section 6.5 RECORD DATES. 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, or to express consent to action in
writing without a meeting, or entitled to receive payment of any dividend or
other distribution or allotment of any rights, or entitled to exercise any
rights in respect of any change, conversion or exchange of shares or for the
purpose of any other lawful action, the Board of Directors may fix, in advance,
a record date which shall be not more than sixty nor less than ten days before
the date of any meeting of stockholders, and not more than sixty days prior to
any other action. In such case, those stockholders, and only those stockholders,
who are stockholders of record on the date fixed by the Board of Directors
shall, notwithstanding any subsequent transfer of shares on the books of the
Corporation, be entitled to notice of and to vote at such meeting of
stockholders, or any adjournment thereof, or to express consent to such
corporate action in writing without a meeting, or entitled to receive payment of
such dividend or other distribution or allotment of rights, or entitled to
exercise rights in respect of any such change, conversion or exchange of shares
or to participate in any such other lawful action.
ARTICLE 7 - Miscellaneous
Section 7.1 FISCAL YEAR. The fiscal year of the Corporation shall be
fixed by resolution of the Board of Directors.
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Section 7.2 SIGNATURE ON NEGOTIABLE INSTRUMENTS. All bills, notes,
checks or other instruments for the payment of money shall be signed or
countersigned in such manner as from time to time may be prescribed by
resolution of the Board of Directors.
Section 7.3 INDEMNIFICATION OF OFFICERS, DIRECTORS, EMPLOYEES, AGENTS
AND FIDUCIARIES; INSURANCE.
(a) The Corporation may indemnify, in accordance with and to the full
extent permitted by the laws of the State of Delaware, as such laws may be
amended from time to time, and shall so indemnify to the full extent permitted
by such laws, any person (and the heirs and legal representatives of any such
person) made or threatened to be made a party to any threatened, pending, or
completed action, suit, or proceeding, whether civil, criminal, administrative,
or investigative, by reason of the fact that such person is or was a director,
officer, employee, agent, or fiduciary of the Corporation or any constituent
corporation absorbed in a consolidation or merger, or serves or served as such
with another corporation, partnership, joint venture, trust or other enterprise
at the request of the Corporation or any such constituent corporation.
(b) By action of the Board of Directors notwithstanding any interest of
the directors in such action, the Corporation may purchase and maintain
insurance in such amounts as the Board of Directors deems appropriate on behalf
of any person who is or was a director, officer, employee, agent or fiduciary of
the Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee, agent or fiduciary of another corporation,
partnership, joint venture, trust or other enterprise against any liability
asserted against him and incurred by him in any such capacity, or arising out of
his status as such, whether or not the Corporation shall have power to indemnify
him against such liability under the provisions of this Section.
ARTICLE 8 - Bylaw Amendments
Section 8.1 BY THE STOCKHOLDERS. These bylaws may be amended by the
stockholders at a meeting called for the purpose in any manner not inconsistent
with any provision of law or of the certificate of incorporation.
Section 8.2 BY THE DIRECTORS. These bylaws may be amended by the
affirmative vote of a majority of the whole Board of Directors in any manner not
inconsistent with any provision of law or of the certificate of incorporation.
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CERTIFICATE OF LIMITED PARTNERSHIP
1. The name of the limited partnership is DAH-IP Acquisition Co., L.P.
2. The address of the registered office is 350 N. St. Paul Street, Dallas,
Texas 75201
3. The name of the registered agent at the above address is CT Corporation
System.
4. The address where the records of the limited partnership are to be kept
or made available (pursuant to TRLPA art. 6132a-1, sec. 1.07) is 2361
Rosecrans Avenue, Suite 180, El Segundo, California 90245
5. The name, mailing address and street address of the business or residence
of each general partner is as follows:
Business or Residence
General Partner Mailing Address Street Address
--------------- --------------- ---------------
DAH-IP Holdings, Inc. 2361 Rosecrans Avenue 2361 Rosecrans Avenue
Suite 180 Suite 180
El Segundo, CA 90401 El Segundo, CA 90401
DAH-IP Acquisition Co., L.P.
BY: DAH-IP Holdings, Inc.
/s/ RICHARD J. KAPLAN
----------------------
By: Richard J. Kaplan
Chief Financial Officer
And Secretary
<PAGE>
DAH-IP ACQUISITION CO., L.P.
LIMITED PARTNERSHIP AGREEMENT
This Limited Partnership Agreement dated as of 19th day of November,
1999 is entered into among DAH-IP Holdings, Inc., a Delaware corporation (the
"General Partner") and DeCrane Aircraft Holdings, Inc., a Delaware corporation
(the "Limited Partner") (the General Partner and the Limited Partner are
referred to below collectively as the "Partners" and individually as a
"Partner"), and is made with reference to the following facts:
WHEREAS, the Partners formed this limited partnership (the
"Partnership") pursuant to the Texas Revised Limited Partnership Act (the "Act")
on November 19, 1999.
WHEREAS, the Partners desire to set forth in this Agreement
their understanding as to how the Partnership will be administered.
NOW, THEREFORE, in consideration of the mutual provisions and
understandings contained in this Agreement, the Partners hereby agree as
follows:
SECTION 1
PARTNERSHIP FORMATION AND IDENTIFICATION
1.1 FORMATION Partners admitted on the date hereof formed the
Partnership as a limited partnership pursuant to the Texas Revised Limited
Partnership Act.
1.2 NAME AND PLACE OF BUSINESS The name of the Partnership
shall be the DAH-IP Acquisition Co., L.P. or such other name or names as may be
selected by the General Partner from time to time with written notice given to
the Limited Partner of such change. The principal place of business of the
Partnership shall be 1712 Shady Oaks Drive, Denton, Texas 76205, unless changed
by the General Partner with written notice given to the Limited Partner of such
change. The Partnership may also maintain such other offices at such other
places as the General Partner may deem advisable.
1.3 ADDRESS OF PARTNERS The address of the Limited Partner is
2361 Rosecrans #180, El Segundo, California 90245. The address of the General
Partner is 2361 Rosecrans #180, El Segundo, California 90245. A Limited Partner
may change its address by written notice to the General Partner, and the General
Partner may change its address by written notice to each Limited Partner.
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1.4 CERTIFICATE The General Partner has prepared, executed and
acknowledged a separate Certificate of Limited Partnership pursuant to the power
of attorney contained in Section 11. This Certificate of Limited Partnership was
recorded in the office of the Secretary of State of the State of Texas on
November 19, 1999.
1.5 INVESTMENT INTENT The Limited Partner represents and
warrants that its interest in the Partnership has been acquired for investment
purposes and that it is not acquiring such interest with a view toward the sale
or distribution of all or any part thereof. The Limited Partner acknowledges
that the issuance of its interest in the Partnership has not been registered
under the Securities Act of 1933 ( the "33 Act"), or qualified under any state
securities or blue sky law in reliance on exemptions from such registration and
qualification afforded by the 1933 Act and state securities and blue sky laws.
SECTION 2
PURPOSE AND NATURE OF BUSINESS
The purpose of the Partnership and business to be carried on
by it, subject to the limitations contained elsewhere in this Agreement, are:
(a) To acquire substantially all of the assets of The Infinity
Partners, Ltd.
(b) To engage in the design, engineering, manufacture, sale or
servicing of cabin cabinetry, furniture or fixtures or equipment for commercial
or corporate aircraft or fixtures or equipment for commercial or corporate
aircraft or general aviation aircraft; and
(c) To enter into and perform any contracts and agreements,
and carry on any activities, incidental to the accomplishment of the foregoing
purpose.
SECTION 3
TERM
The Partnership shall commence on formation pursuant to
Section 1 and shall continue in full force and effect until October 31, 2049,
unless extended by amendment of this Agreement or unless the Partnership is
dissolved prior to that date as hereinafter provided.
SECTION 4
FISCAL YEAR
The Fiscal Year of the Partnership for financial reporting and
tax purposes shall be the calendar year. If, however, the General Partner
determines that a change to some other fiscal year for either financial
reporting or tax purposes would be in the best interests of the
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Partnership, the General Partner shall be entitled (subject to applicable
laws and regulations) to make such a change.
SECTION 5
AGENT FOR SERVICE OF PROCESS
CT Corporation System, 350 North St. Paul Street, Dallas Texas
75201, is hereby designated as the agent of the Partnership upon whom process
issued by authority of or under any law of the State of Texas may be served.
SECTION 6
CAPITAL CONTRIBUTIONS AND ACCOUNTS
6.1 INITIAL CAPITAL CONTRIBUTIONS
(a) The Partners shall contribute the following cash amounts
to the capital of the Partnership concurrently herewith:
<TABLE>
<S> <C>
General Partner $ 32,000
Limited Partner $ 3,168,000
Total $ 3,200,000
</TABLE>
(b) Capital Contributions may be made cash or in kind, if such
property is approved by the General Partner.
6.2 ADDITIONAL CAPITAL CONTRIBUTION Except as otherwise
provided in this Article 6, the Limited Partner shall not be obligated to make
any additional capital contributions to the Partnership, provided that, upon the
General Partner's request, the Limited Partner shall be entitled to make
additional capital contributions in the Limited Partner's sole and absolute
discretion.
6.3 LIMITED LIABILITY The Limited Partner (i) shall not be
obligated or liable to the Partnership, the General Partner, or any other person
for losses in excess of the capital contributions made and required to be made
by the Limited Partner under this Agreement, (ii) except as may otherwise be
provided by law, shall not be liable to the Partnership, the General Partner or
any other person for the repayment of amounts received from the Partnership
pursuant to the terms of this Agreement, whether or not such amounts are deemed
to be returns or withdrawals of capital, and (iii) shall not have any liability
or obligation to any person whatsoever for any obligations or liabilities of the
Partnership.
6.4 CAPITAL ACCOUNTS The General Partner shall at all times
maintain or cause to be maintained a separate capital account ("Capital
Account") for each Partner which shall be credited with all Capital
Contributions and maintained as provided below. Each Capital Account shall
specifically reflect the name and address of the Partner and shall be maintained
in accordance with Treasury Regulation Section 1.704-1(b).
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SECTION 7
ALLOCATIONS AND DISTRIBUTIONS
7.1 ALLOCATIONS
(a) ALLOCATION OF LOSSES All losses of the Partnership
(including all expense items separately stated on the Partnership's tax returns)
shall be allocated one percent (1%) to the General Partner and ninety-nine
percent (99%) to the Limited Partner.
(b) ALLOCATION OF PROFITS Profits from operations and capital
events shall be allocated one percent (1%) to the General Partner and
ninety-nine percent (99%) to the Limited Partner.
7.2 DISTRIBUTIONS
(a) Cash available for distribution means and includes all
cash receipts of the Partnership from any and all sources whatsoever, less all
Partnership expenditures and less a reserve determined in the reasonable
discretion of the General Partner. Cash available for distribution shall be
distributed one percent (1%) to the General Partner and ninety-nine percent
(99%) to the Limited Partner.
(b) Cash available for distribution shall be distributed to
the partners within thirty (30) days after the General Partner determines the
availability thereof.
SECTION 8
AUTHORITY OF THE GENERAL PARTNER
8.1 MANAGEMENT The General Partner shall have full
responsibility for and charge of the overall management, conduct and operation
of the Partnership in all respects. Without in any way limiting or impairing the
generality of the foregoing, the General Partner shall have the full power and
authority to do the following:
(a) Negotiate the acquisition of the assets of The Infinity
Partners Ltd. (the "Assets");
(b) Manage the Assets;
(c) Administer the overall operation of the Partnership;
(d) Act as the tax matters partner for the Partnership in
accordance with Section 8.2;
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(e) Perform, or cause to be performed, the following services:
(i) set up books of account, records and payment
procedures, including individual accounts of the Partners;
(ii) provide bookkeeping and other related services
for the Partnership;
(iii) collect, manage and disburse the Capital
Contributions of the Partners for the purposes set forth in this
Agreement;
(iv) provide management, financial and business
planning services to the Partnership;
(v) collect receipts and make payments and
expenditures in accordance with the terms of this Agreement; and
(vi) make periodic reports relating to operating
results, valuations and Limited Partner account balances, as required
by this Agreement;
(g) Employ from time to time third parties to render services
to the Partnership, including attorneys and accountants who may also
represent the General Partner or any of its Affiliates;
(h) Appoint and designate any Person as successor or
substitute agent for service of process of the Partnership and file any
amendment to the Certificate of Limited Partnership necessary or
appropriate in connection therewith;
(i) Take whatever steps are required by governmental
authorities having jurisdiction over the Partnership or its Assets;
(j) Possess and exercise all of the rights and powers provided
by law to a general partner in a limited partnership, except to the
extent that such rights might be limited or restricted by this
Agreement;
(k) Process Limited Partner admissions, withdrawals and
redemptions;
(l) Exercise, in its sole discretion, any voting, consent or
similar rights relating to the Assets and execute and deliver on behalf
of the Partnership any proxies, powers of attorney, consents or other
instruments relating to the exercise of those rights; and
(m) Do anything else that the General Partner deems advisable
to further the purposes of the Partnership and that is not prohibited
by this Agreement or applicable law.
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8.2 TAX MATTERS
(a) The General Partner is hereby designated the "tax
matters partner" for purposes of Section 6231(a) of the Code (and regulations
thereunder).
(b) The General Partner is hereby authorized to withhold,
out of any distributions that would otherwise be made to the Limited Partner,
an amount equal to the amount of United States federal, state or local income
or other tax, and any related penalties, interest or other payments, that the
General Partner determines the Partnership or the General Partner is required
to withhold or to pay to a taxing authority with respect to or on behalf of
such Limited Partner, and to file all necessary reports relating to such
withholding or payment as may be required by law. Any amounts so withheld or
paid shall be deemed actually distributed to such Limited Partner for all
purposes of this Agreement. Notwithstanding the foregoing, if any such
amounts are deemed for tax purposes to be a Partnership deduction or expense,
the amount of any such deduction or expense shall be specially allocated to
the Limited Partner. If at any time (x) the amount required to be withheld or
paid with respect to or on behalf of such Limited Partner shall exceed (y)
the amounts that are then available for distribution to such Limited Partner,
the General Partner shall notify such Limited Partner of the amount by which
the amount referred to in clause (x) exceeds the amount referred to in clause
(y), and such Limited Partner shall promptly pay over to the General Partner
an amount of cash equal to such amount. The Limited Partner shall indemnify
the Partnership and the General Partner and hold each of them harmless from
any liability with respect to any taxes, penalties or interest required to be
withheld or paid to any taxing authority by the Partnership or the General
Partner for or on behalf of such Limited Partner or with respect to such
Limited Partner.
(c) The General Partner shall have the right to make such
elections under the tax laws of the United States, the several states and
other relevant jurisdictions as to the treatment of items of Partnership
income, gain, loss, deduction and credit and as to all other relevant matters
as it believes necessary, appropriate and desirable.
(d) The General Partner may make or petition to revoke (as
the case may be) the election referred to in Section 754 of the Code. Each
Partner agrees in the event of such an election to supply promptly to the
Partnership the information necessary to give effect thereto.
8.3 DOING BUSINESS OUTSIDE TEXAS In the event that the
Partnership engages in any business permitted by this Agreement in
jurisdictions other than Texas, and the General Partner deems it advisable in
order to protect the limited liability of the Limited Partner or to comply
with applicable laws and regulations, the General Partner may, and, to the
extent required by law, shall:
(a) File or record this Agreement, a certificate of limited
partnership or other documents or instruments in such other
jurisdictions;
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(b) Establish and form a new limited partnership(s) in such
other jurisdictions pursuant to such jurisdiction's laws and
regulations, which limited partnership(s) shall have the Partnership or
the Limited Partner as a limited partner or as limited partners and the
General Partner as the general partner;
(c) Obtain opinions of counsel in such other jurisdictions;
and
(d) Take such other actions as shall be deemed advisable by
the General Partner.
8.4 MANAGEMENT FEE OF GENERAL PARTNER The General Partner will
not receive a Management Fee for its services hereunder.
8.5 EXPENSES OF THE PARTNERSHIP The General Partner shall be
entitled to reimbursement in full from the Partnership for (or cause the
Partnership to pay directly) all properly substantiated expenses, costs and fees
directly incurred in connection with the formation, operation and termination of
the Partnership.
8.6 LIMITED PARTNER'S CONSENT To the fullest extent permitted
by law, the Limited Partner hereby consents to the exercise by the General
Partner of the powers conferred on it by this Agreement.
8.7 AMENDMENTS
(a) This Agreement may be amended only in a writing signed by
all of the Partners.
(b) Notwithstanding paragraph (a) of this Section, the General
Partner may amend this Agreement, without providing written notice to the
Limited Partner thereof, to: (i) make a change that is necessary or, in the
opinion of the General Partner, advisable to qualify the Partnership as a
limited partnership or a partnership in which the Limited Partner have limited
liability under the laws of any jurisdiction, or to ensure that the Partnership
will not be treated as an association taxable as a corporation for federal
income tax purposes; (ii) supply any omission or make any change that is
necessary or desirable to cure any ambiguity, or to correct or supplement any
provision in this Agreement that would be inconsistent with any other provision
in this Agreement; or (iii) make any change that is necessary or desirable to
satisfy any opinion, order or ruling of any federal, state or other governmental
statutes, so long as such change minimizes any adverse effect on the Limited
Partner, or that is required or contemplated by this Agreement.
8.8 GENERAL PARTNER LIABILITY Except as otherwise required by
law, neither of the General Partner nor any of its Affiliates, directors,
officers, employees, shareholders, assigns, representatives or agents shall be
liable, responsible or accountable in damages or otherwise to the Partnership or
the Limited Partner for any loss, liability, damage, settlement cost, or other
expense incurred by reason of any act or omission performed or omitted by such
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Person so long as such Person is not determined to be guilty by a final
adjudication of gross negligence or willful misconduct with respect to such act
or omission. The General Partner may separately engage or invest in other
business ventures that may be in competition with the Partnership.
SECTION 9
LIMITED PARTNER
9.1 NO MANAGEMENT POWER OR LIABILITY Except as specifically
provided herein to the contrary, the Limited Partner shall have no rights or
power in the management of, or the transaction of any business by, the
Partnership and shall have no power or authority to sign for or bind the
Partnership.
SECTION 10
TRANSFER OF PARTNERS' INTERESTS; WITHDRAWALS
10.1 RESTRICTIONS ON TRANSFER Each Partner shall not
voluntarily or involuntarily sell, convey, assign, mortgage, pledge,
hypothecate, encumber or otherwise transfer (collectively, "Transfer") its
interest in the Partnership or any part thereof without the prior written
consent of the other Partner, which consent may not be unreasonably withheld.
10.2 SUBSTITUTED LIMITED PARTNER
(a) No transferee of a Limited Partner's interest in the
Partner shall have the right to become a Limited Partner ("Substitute Limited
Partner") in place of its transferor unless and until all of the following
conditions have been satisfied:
(i) The General Partner has consented in writing to
the substitution;
(ii) The assignor and assignee execute, acknowledge
and deliver such instruments as the General Partner deems
necessary, appropriate or desirable to effect such substitution; and
(iii) The Substituted Limited Partner agrees to bear
all expenses and costs of such substitution, including legal fees
and filing fees of the Partnership.
(b) An assignee, Legal Representative or successor in interest
of a Limited Partner shall be subject to all of the restrictions upon a Limited
Partner provided in this Agreement.
(c) If an assignee, Legal Representative or successor in
interest of a Limited Partner is not admitted as a Substituted Limited Partner
(a "Nonadmitted Transferee"), such Nonadmitted Transferee shall become a holder
of record of the Limited Partnership interest and shall be entitled to receive
distributions in respect of such Units as herein provided but otherwise shall
have none of the rights or obligations of a Limited Partner.
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SECTION 11
POWER OF ATTORNEY
11.1 APPOINTMENT OF GENERAL PARTNER AS ATTORNEY FOR LIMITED
PARTNERS The Limited Partner makes, constitutes and appoints the General Partner
its true and lawful attorney-in-fact, in its name, place and stead, with full
power to do any of the following:
(a) File and record this Agreement and all amendments to this
Agreement made in accordance with this Agreement;
(b) Prepare, execute on its behalf, verify, file and record
amendments to this Agreement;
(c) Prepare, execute on its behalf, file and record a
Certificate of Limited Partnership and all amendments that the General Partner
may deem advisable, including amendments to reflect the changes identified in
clause (b) above;
(d) Prepare, execute on its behalf, file and record any other
agreements, certificates, instruments and other documents required to continue
the Partnership, to admit Substituted Limited Partner, to liquidate and dissolve
the Partnership, to comply with applicable law, and to carry out the purposes of
clauses (a) and (b) above, to the extent consistent with this Agreement;
(e) Take any further action that the General Partner shall
consider advisable in connection with the exercise of the authority pursuant to
this Section.
11.2 NATURE OF SPECIAL POWER The power of attorney granted
under this Section 11 is a special power of attorney coupled with an interest,
is irrevocable and may be exercised by the General Partner by listing all of the
Partners executing any agreement, certificate, instrument or document with a
single signature of such attorney-in-fact acting as attorney-in-fact for all of
them.
SECTION 12
BOOKS AND RECORDS
The General Partner shall maintain the books and records
required by law for the Partnership at its principal office and all Partners
have the right to inspect, examine and copy such books and records at reasonable
times and upon reasonable notice. Upon the request of a Limited Partner, the
General Partner shall promptly deliver to the requesting Limited Partner, at the
expense of the Partnership, a copy of any information which the General Partner
is required by law to so provide.
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SECTION 13
ADMISSION OF ADDITIONAL PARTNERS, GENERAL PARTNER REMOVAL, ETC.
13.1 ADMISSION OF PARTNERS No additional Partners shall be
admitted to the Partnership without the written consent of all Partners.
13.2 VOLUNTARY WITHDRAWAL; HYPOTHECATION The General Partner
shall have the right to resign as General Partner of the Partnership at any time
in its sole discretion, upon 30 days' prior written notice. The General Partner
may pledge or grant a security interest in its right to receive payments and
distributions under this Agreement.
13.2 REMOVAL OF THE GENERAL PARTNER; INSOLVENCY, ETC.
(a) The General Partner may be removed as general partner
without its consent only by reason of the General Partner's fraud, willful
misconduct or gross negligence in connection with operations of the Partnership,
which fraud, willful misconduct or gross negligence shall have had a material
adverse effect on the business or properties of the Partnership, or if the
General Partner shall cease to be capable of properly performing its duties
hereunder. Immediately prior to the effective date of such removal or upon the
resignation of the General Partner, a successor General Partner may be appointed
to continue the business of the Partnership upon the written consent of the
Limited Partner.
(b) The General Partner shall cease to be the General Partner
of the Partnership if the General Partner is dissolved, or if an order for
relief against the General Partner is entered under Chapter 7 of the federal
bankruptcy law, or if: (i) the General Partner makes a general assignment for
the benefit of creditors, (ii) the General Partner files a voluntary petition
under the federal bankruptcy law, (iii) the General Partner files a petition or
answer seeking for the General Partner any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under any
statute, law, or regulation, (iv) the General Partner files an answer or other
pleading admitting or failing to contest the material allegations of a petition
filed against the General Partner in any proceeding of this nature, (v) the
General Partner seeks, consents to, or acquiesces in the appointment of a
trustee, receiver, or liquidator of the General Partner or of all or any
substantial part of the General Partner's properties, (vi) 60 days after the
commencement of any proceeding against the General Partner seeking
reorganization, arrangement, composition, readjustment, liquidation, dissolution
or similar relief under any statute, law or regulation, and the proceeding has
not been dismissed, or (vii) within 60 days after the appointment without the
General Partner's consent or acquiescence of a trustee, receiver, or liquidator
of the General Partner or of all or any substantial part of the General
Partner's properties, the appointment is not vacated or stayed, or within 60
days after the expiration of any such stay, the appointment is not vacated.
Immediately prior to the effective date of the General Partner's cessation of
service as General Partner, a successor General Partner may be appointed to
continue the business of the Partnership with the written consent of not less
than all of the remaining Partners.
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(c) If the Limited Partner removes the General Partner in
accordance with Section 13.2(a), a notice of removal specifying the effective
date of removal shall be served on the General Partner either by certified or by
registered mail, return receipt requested, or by personal service.
(d) Any successor General Partner shall have the same rights
and obligations under this Agreement as the replaced General Partner would have
had subsequent to such date if the replaced General Partner has continued to act
as General Partner.
SECTION 14
DISSOLUTION AND TERMINATION OF THE PARTNERSHIP
14.1 EVENTS CAUSING DISSOLUTION The Partnership shall be
dissolved and terminated and its Assets distributed in the manner and order
provided for in this Section upon expiration of the term of the Partnership
unless earlier dissolved under the following provisions:
(a) The General Partner may elect to dissolve the Partnership
following the sale of all or substantially all of the Assets of the Partnership;
(b) The General Partner may elect to dissolve the Partnership
in the event that the General Partner determines that as a result of the
application to the Partnership or a Partner of legal restrictions, the
Partnership, the Limited Partner or the General Partner may be materially and
adversely affected;
(c) When the General Partner resigns, is removed or otherwise
ceases to be the General Partner of the Partnership, the Partnership shall be
dissolved and terminated unless a successor General Partner has been appointed;
or
(d) A court of competent jurisdiction decrees dissolution.
Notwithstanding provisions (a) through (d) above, the General
Partner may elect to terminate the Partnership in its sole and absolute
discretion.
14.2 DISTRIBUTION AND VALUATION OF ASSETS ON LIQUIDATION
(a) In liquidating the Partnership, the General Partner will
make distributions in cash, in kind, or partly in cash and partly in kind as the
General Partner may determine. The General Partner need not distribute all of
the Assets at once, but may make partial distributions.
(b) Subject to subsection (c) below, the Assets of the
Partnership, after allowing for claims of creditors of the Partnership, the
Management Fees of the General Partner, claims by the General Partner for
expenses, charges or deductions of the Partnership paid by it, or any other
liabilities of the Partnership, shall be distributed to the Partners in the
proportions that their respective positive Capital Account balances bear to each
other. In the case of a
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distribution in kind of any Assets, such Assets shall be treated as though
they were sold immediately prior to such distribution for their fair market
value, and the Capital Accounts shall be adjusted to reflect such deemed sale.
(c) In the event the Partnership is "liquidated" within the
meaning of Treasury Regulation Section 1.704-1(b)(2)(ii)(g), the distributions
pursuant to this Article shall be made, to the extent possible, within the time
period required by Treasury Regulation Section 1.704-1(b)(2)(ii)(b)(2). Where
necessary and desirable to comply with the preceding sentence, distributions may
be made to a trust established for the benefit of the Partners for the purposes
of liquidating Partnership Assets, collecting amounts owed to the Partnership
and paying any contingent or unforeseen liabilities or obligations of the
Partnership or of the General Partner arising out of or in connection with the
Partnership. The General Partner or the liquidator, as the case may be, shall
distribute the assets of any such trust to the Partners from time to time in the
same proportions as the amount distributed to the trust by the Partnership would
otherwise have been distributed to the Partners pursuant to this Agreement.
SECTION 15
GENERAL PROVISIONS
15.1 NOTICES Except as otherwise provided herein, any notice,
distribution, offer or other communication which shall be given to any Partner
in connection with the Partnership or this Agreement shall be duly given if
reduced to writing and either personally delivered or sent by mail, postage
prepaid, or facsimile transmission, telex or telegraph to the address most
recently furnished by the Limited Partner for such purpose and if so mailed
shall conclusively be deemed received five days after mailing, or if sent by
facsimile transmission, telex or telegraph shall conclusively be deemed received
the day after being so sent.
15.2 SURVIVAL OF RIGHTS This Agreement shall be binding upon
and, as to permitted or accepted successors, transferees and assigns, inure to
the benefit of the Partners and the Partnership and their respective heirs,
legatees, legal representatives, successors, transferees and assigns, in all
cases whether by the laws of descent and distribution, sale of assets, other
sale, operation of law, or, without limitation, otherwise.
15.3 CONSTRUCTION The language in all parts of this Agreement
shall be in all cases construed simply according to its fair meaning and not
strictly for or against the Limited Partner or the General Partner.
15.4 SECTION HEADINGS The captions of the sections in this
Agreement are for convenience only and shall not be used in construing or
interpreting this Agreement.
15.5 AGREEMENT IN COUNTERPARTS This Agreement and any
amendments hereto may be executed in multiple counterparts, each of which shall
be deemed an original agreement and all of which shall constitute one and the
same agreement, notwithstanding the fact that all Partners are not signatories
to the original or the same counterpart.
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15.6 GOVERNING LAW This Agreement shall be construed according
to the internal laws, and not the laws pertaining to choice or conflict of laws,
of the State of Texas.
15.8 ADDITIONAL DOCUMENTS Each Partner, upon the request of
the General Partner, agrees to perform all further acts and execute, acknowledge
and deliver all further documents which may be reasonably necessary, appropriate
or desirable to carry out the provisions of this Agreement, including but not
limited to acknowledging before a Notary Public any signature heretofore or
hereafter made by a Partner.
15.8 ENTIRE AGREEMENT This Agreement as may have been executed
and delivered by the Limited Partner (a) constitutes the entire Agreement of the
Partners with respect to the Partnership, and (b) supersedes all prior written
and prior and contemporaneous oral agreements, understandings and negotiations
with respect to the Partnership.
IN WITNESS WHEREOF, the parties hereto have hereunto set their
hands as of the date first written above.
GENERAL PARTNER
DAH-IP HOLDINGS, INC.
By:
----------------------------
Name:
--------------------------
Title
--------------------------
LIMITED PARTNER
DECRANE AIRCRAFT HOLDINGS, INC.
By:
----------------------------
Name:
--------------------------
Title
--------------------------
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ASSIGNMENT OF PARTNERSHIP INTEREST
DECRANE AIRCRAFT HOLDINGS, INC., a Delaware corporation ("Assignor"),
does hereby transfer and assign unto DAH-IP INFINITY, INC., a Delaware
corporation ("Assignee"), a Ninety-Nine percent (99%) limited partnership
interest in DAH-IP ACQUISITION CO., L.P., a Texas limited partnership (the
"Partnership"), which represents all of Assignor's interest in said Partnership.
Executed this 10th day of December, 1999.
DECRANE AIRCRAFT HOLDINGS, INC.
By:
------------------------
Name:
----------------------
Title:
---------------------
REQUIRED CONSENT
We, the undersigned being all of the Partners of DAH-IP ACQUISITION
CO., L.P., do hereby consent to the above Assignment of Partnership Interest.
Executed this 10th day of December, 1999.
GENERAL PARTNER LIMITED PARTNER
DAH-IP HOLDINGS, INC. DECRANE AIRCRAFT
HOLDINGS, INC.
By: By
------------------------ -------------------------
Name Name
----------------------- -----------------------
Title Title
- --------------------- ----------------------
ACCEPTANCE OF PARTNERSHIP AGREEMENT
DAH-IP INFINITY, INC., a Delaware corporation, as assignee of the
Partnership Interest referenced above, does hereby accept all of the terms and
conditions of the DAH-IP
<PAGE>
ACQUISITION CO., L.P., Limited Partnership Agreement, dated November 19, 1999.
Executed this 10th day of December, 1999.
DAH-IP INFINITY, INC.
By:
------------------------
Name:
----------------------
Title
----------------------
-2-
<PAGE>
EXHIBIT 21.1
LIST OF SUBSIDIARIES OF REGISTRANT
SUBSIDIARIES OF DECRANE AIRCRAFT HOLDINGS, INC.
AEROSPACE DISPLAY SYSTEMS, INC., a Delaware corporation.
AUDIO INTERNATIONAL SALES, INC., a U. S. Virgin Islands corporation.
AUDIO INTERNATIONAL, INC., an Arkansas corporation.
AVTECH CORPORATION, a Washington corporation.
CORY COMPONENTS, INC., a California corporation.
CWP ACQUISITION, INC., a Delaware corporation.
DAH-IP ACQUISITION CO., L.P., a Texas limited partnership.
DAH-IP HOLDINGS, INC., a Delaware corporation.
DAH-IP INFINITY, INC., a Delaware corporation.
DETTMERS INDUSTRIES, INC., a Delaware corporation.
ELSINORE AEROSPACE SERVICES, INC., a California corporation.
ELSINORE ENGINEERING, INC., a Delaware corporation.
FLIGHT REFUELING, INC., a Maryland corporation.
HOLLINGSEAD INTERNATIONAL, INC., a California corporation.
HOLLINGSEAD INTERNATIONAL, LTD., a UK company.
INTERNATIONAL CUSTOM INTERIORS, INC., a Florida corporation.
PATRICK AIRCRAFT TANK SYSTEMS, INC., a Maryland corporation.
PATS AIRCRAFT AND ENGINEERING CORPORATION, a Maryland corporation.
PATS SUPPORT, INC., a Maryland corporation.
PATS, INC., a Maryland corporation.
PCI ACQUISITION CO., INC., a Delaware Corporation.
PPI HOLDINGS, INC., a Kansas corporation.
PRECISION PATTERN, INC., a Kansas corporation.
TRI-STAR ELECTRONICS EUROPE S.A., a Swiss company.
TRI-STAR ELECTRONICS INTERNATIONAL, INC., a California corporation.
TRI-STAR TECHNOLOGIES, a California general partnership.
