<PAGE>
Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the Quarterly Period Ended September 30, 1997
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from ______ to ________
Commission File Number 0-26924
AMX CORPORATION
(Exact name of registrant as specified in its charter)
TEXAS 75-1815822
(State of Incorporation) (I.R.S. Employer Identification
No.)
11995 FORESTGATE DRIVE
DALLAS, TEXAS 75243
(Address of principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (972) 644-3048
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
COMMON STOCK, $0.01 PAR VALUE 8,196,824
(Title of Each Class) (Number of Shares Outstanding at
October 31, 1997)
<PAGE>
AMX CORPORATION
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1997
INDEX
PAGE NUMBER
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Balance Sheets at September 30, 1997 and
March 31, 1997 2
Consolidated Statements of Income for the Three and
Six Months Ended September 30, 1997 and 1996 4
Consolidated Statements of Cash Flows for the Six
Months ended September 30, 1997 and 1996 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
Item 3. Quantitative and Qualitative Disclosures About Market
Risk
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 15
Item 4 Submission of Matters to a Vote of Security Holders
Item 6. Exhibits and Reports on Form 8-K 15
SIGNATURES 17
1
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AMX CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands, except for share and per share amounts)
<TABLE>
September 30, 1997 March 31, 1997
------------------ --------------
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 864 $ 2,092
Receivables - trade and other; less allowance
for doubtful accounts of $111 at September 30,
1997 and $94 at March 31, 1997 8,057 6,670
Inventories 7,809 4,960
Prepaid expenses 399 472
Deferred income tax 98 98
Income taxes recoverable 11 42
------- -------
Total current assets 17,238 14,334
Property and equipment, at cost, net 4,334 4,030
Capitalized software 261 376
Deposits and other 790 802
Deferred income tax 6 6
Goodwill, net 182 193
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Total assets $22,811 $19,741
------- -------
------- -------
</TABLE>
2
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AMX CORPORATION
CONSOLIDATED BALANCE SHEETS (CONTINUED)
(In thousands, except for share and per share amounts)
<TABLE>
September 30, 1997 March 31, 1997
------------------ --------------
LIABILITIES AND SHAREHOLDERS' EQUITY
<S> <C> <C>
Current liabilities:
Accounts payable $ 4,329 $ 3,259
Accrued compensation 1,539 1,035
Accrued sales commission 597 437
Reserve for litigation - 750
Accrued dealer incentives 335 284
Other accrued expenses 263 199
Line of credit and notes payable 1,725 188
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Total current liabilities 8,788 6,152
Long-term debt, less current portion 82 92
Deferred tax liability - -
Minority interest in subsidiary 1,476 1,501
Shareholders' equity:
Common stock, $.01 par value:
Authorized shares - 40,000,000
Issued shares - 7,846,010 at September 30, 1997
and 7,832,791 at March 31, 1997 78 78
Additional paid-in capital 1,892 1,827
Retained earnings 10,542 10,138
Less common treasury stock of 5,208 shares (47) (47)
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Total shareholders' equity 12,465 11,996
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Total liabilities and shareholders' equity $22,811 $19,741
------- -------
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</TABLE>
See accompanying notes.
3
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AMX CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except for share and per share amounts)
<TABLE>
Three Months Ended Six Months Ended
September 30 September 30
----------------- ---------------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
System sales $ 14,353 $ 9,953 $ 26,402 $ 17,579
OEM and custom product sales 485 777 1,470 1,363
--------- --------- --------- ---------
Net sales 14,838 10,730 27,872 18,942
Cost of sales 6,346 3,914 12,123 7,332
--------- --------- --------- ---------
Gross profit 8,492 6,816 15,749 11,610
--------- --------- --------- ---------
Selling and marketing expenses 5,162 3,631 10,710 6,943
Research and development expenses 974 586 2,011 1,339
Acquired research and development - - - 1,230
General and administrative expenses 1,326 1,116 2,369 1,808
--------- --------- --------- ---------
Total Operating Expenses 7,462 5,333 15,090 11,320
--------- --------- --------- ---------
Operating income 1,030 1,483 659 290
Interest expense (income) 38 (2) 48 4
Other income 40 68 69 141
--------- --------- --------- ---------
Income before income taxes 1,032 1,553 680 427
Income tax provision 417 782 274 201
Minority interest - (235) - (235)
--------- --------- --------- ---------
Net income $ 615 $ 1,006 $ 406 $ 461
--------- --------- --------- ---------
--------- --------- --------- ---------
Earnings per common share $ 0.07 $ 0.12 $ 0.05 $ 0.06
--------- --------- --------- ---------
--------- --------- --------- ---------
Common and common equivalent
shares outstanding 8,279,498 8,277,994 8,246,024 8,266,203
--------- --------- --------- ---------
--------- --------- --------- ---------
</TABLE>
See accompanying notes.
4
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AMX CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
<TABLE>
Six Months Ended September 30,
1997 1996
---- ----
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 406 $ 461
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation and amortization 911 413
Acquired research and development - 980
Provision for losses on receivables 17 (34)
Provision for inventory obsolescence 3 (12)
Changes in operating assets and liabilities:
Receivables (1,404) (447)
Inventories (2,852) (286)
Other (31)
Prepaid expenses 73 21
Accounts payable 1,070 135
Accrued expenses 29 (27)
Income taxes recoverable/payable 31 (56)
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Net cash provided by (used in) operating activities (1,747) 1,148
INVESTING ACTIVITIES
Purchases of property and equipment (1,046) (1,114)
Investment in capitalized software - (81)
Payment to former owner of AudioEase - (180)
Minority interest in PHAST (25) 714
Increase in other assets - (502)
------- -------
Net cash used in investing activities (1,071) (1,163)
FINANCING ACTIVITIES
Sale of stock 65 26
Exercise of stock options - 86
Purchase of treasury stock - (47)
Disqualifying disposition of stock options - 44
Net increase in line of credit 1,600 -
Proceeds from long-term debt - 125
Repayments on long-term debt (73) (170)
------- -------
Net cash provided by financing activities 1,592 64
Effect of exchange rate changes on cash (2) 3
------- -------
Net increase (decrease) in cash and cash equivalents (1,228) 52
Cash and cash equivalents at beginning of period 2,092 4,859
------- -------
Cash and cash equivalents at end of period $ 864 $ 4,911
------- -------
------- -------
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES
Issuance of AMX common stock in connection with
AudioEase acquisition $ - $ 1,500
------- -------
------- -------
</TABLE>
See accompanying notes.
5
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AMX CORPORATION
Notes to Consolidated Financial Statements
September 30, 1997
1. Basis of Presentation
The accompanying condensed consolidated financial statements, which should be
read in conjunction with the consolidated financial statements and footnotes
included in the Company's Annual Report on Form 10-K for the fiscal year ended
March 31, 1997, are unaudited (except for the March 31, 1997 consolidated
balance sheet, which was derived from the Company's audited financial
statements), but have been prepared in accordance with generally accepted
accounting principles for interim financial information. Accordingly, they do
not include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments (consisting only of normal recurring adjustments)
considered necessary for a fair presentation have been included.
Operating results for the six months ended September 30, 1997 are not
necessarily indicative of the results that may be expected for the entire year
ending March 31, 1998.
2. Earnings Per Share
Earnings per share is based on the weighted average number of common and common
equivalent shares outstanding including the dilutive effect of options and
warrants outstanding.
In February 1997, the Financial Accounting Standards Board issued Statement No.
128 (FAS 128), "Earnings Per Share," which is effective for financial statements
for periods ending after December 15, 1997. Early adoption of the new standard
is not permitted. The new standard eliminates primary and fully diluted
earnings per share and requires presentation of basic and diluted earnings per
share together with disclosure of how the per share amounts were computed. The
impact of this change is expected to be immaterial.
3. Inventories
The components of inventories are as follows:
September 30, 1997 March 31, 1997
------------------ --------------
Raw materials $3,011,918 $2,512,648
Work in progress 1,049,208 446,976
Finished goods 3,826,332 2,060,869
Less reserve for obsolescence (78,802) (60,302)
---------- ----------
Total $7,808,656 $4,960,191
---------- ----------
---------- ----------
6
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4. Asset Acquisition
In August 1996, the Company's chairman, Scott D. Miller acquired 14,750 shares
of preferred stock of PHAST for an aggregate purchase price of $1,475,000 and
acquired 7,322 shares of the common stock of PHAST for an aggregate purchase
price of $25,000. In March 1997, Mr. Miller granted an option to the Company,
commencing on April 1, 1997 and expiring on March 31, 1998, to acquire all of
Mr. Miller's preferred and common stock in PHAST for an aggregate price of $2.5
million, subject to an independent appraisal indicating at least an equal value.
On July 7, 1997, the Company acquired 7,322 shares of common stock, representing
29% of the stock of its subsidiary, PHAST Corporation, from Mr. Miller for
$25,000 in a cash transaction. The Company had held 51% of the stock of PHAST
prior to the purchase. The Company also granted Mr. Miller the right to require
the Company to purchase his 14,750 shares of preferred stock in PHAST for a per
share purchase price of $100 (which is the liquidation preference of the
preferred stock), or an aggregate purchase price of $1,475,000, plus accrued but
unpaid dividends, at any time from April 1, 1998 through March 31, 1999. In
connection therewith, the option granted to the Company in March 1997 to
purchase such preferred stock from Mr. Miller was terminated.
On August 14, 1997, the Company announced an agreement in principle to purchase
the remaining 20% of the stock of PHAST from its employee shareholders. The
agreement required the Company to issue 350,814 shares of its common stock, and
a de minimis amount of cash in exchange for 6,421 shares of PHAST stock. The
agreement was executed on October 14, 1997 and the shares of AMX common stock
were issued on October 23, 1997.
In October 1997, the Company agreed to issue up to 500,000 options to acquire
shares of AMX common stock to various employees of PHAST and AudioEase, both
of which are subsidiaries of the Company. The options issued by AMX are
subject to shareholder approval and have performance conditions which are
required to be met before the options vest.
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction with the
Consolidated Financial Statements and Notes thereto included in the Company's
1997 Annual Report on Form 10-K. The Company believes that all necessary
adjustments (consisting only of normal recurring adjustments) have been included
in the amounts stated below to present fairly the following quarterly
information. Quarterly operating results have varied significantly in the past
and can be expected to vary in the future. Results of operations for any
particular quarter are not necessarily indicative of results of operations for a
full year.
FORWARD LOOKING INFORMATION
Certain information contained herein contains forward-looking statements that
involve a number of risks and uncertainties. A number of factors could cause
results to differ materially from those anticipated by such forward-looking
statements. These factors include, but are not limited to, the competitive
environment in the industry and in the Company's market areas, changes in raw
materials, economic conditions in its markets, and demands placed on
management. In addition, such forward-looking statements are necessarily
dependent upon assumptions, estimates and data that may be incorrect or
imprecise. Accordingly, any forward-looking statements included herein do not
purport to be predictions of future events or circumstances and may not be
realized. These risks and uncertainties could result in lower revenues, gross
margin compression, and higher than expected expenses.
OVERVIEW
AMX designs, develops, manufactures and markets integrated control systems that
enable end users to operate as a single system a broad range of electronic and
programmable equipment in a variety of corporate, educational, industrial,
entertainment, governmental, and residential settings. The Company's hardware
and software products provide the operating system, machine control, and user
interface necessary to operate, as an integrated network, electronic devices
from different manufacturers through easy-to-use control panels. The Company's
systems are available in a variety of configurations and provide centralized
control of a wide range of video systems, audio systems, teleconferencing
equipment, educational media, lighting equipment, environmental control systems,
security systems, and other electronic devices. The Company has introduced
several Windows-R-based software applications that handle design functions,
permit scheduling control, and enable a personal computer to operate on the
Company's AXlink bus as a control panel.
The Company's quarterly operating results have varied significantly in the
past, and can be expected to vary in the future. These quarterly fluctuations
have been the result of a number of factors, including the seasonal
purchasing of its dealers and distributors, particularly from international
distributors, OEMs, and other large customers; sales and marketing expenses
related to entering new markets; the Company's reliance upon dealers and
distributors; the timing of new product introductions by the Company and its
competitors; fluctuations in commercial and residential construction and
remodeling activity; and changes in product or distribution channel mix. In
addition, the Company generally experiences higher selling and marketing
expenses during the first fiscal quarter of each year due to costs associated
with the Company's largest trade show (occurring in June) and experiences
higher sales in the education market during the second fiscal quarter of each
year due to the buying cycles of educational institutions.
The Company's system sales are made through dealers and distributors. The
Company principally relies on over 1,600 specialized third-party dealers of
electronic and audiovisual equipment to sell, install, support and service
its products in the United States. Internationally, the Company relies on a
network of 19 exclusive distributors serving 23 countries and over 93 dealers
serving an additional 23 countries to distribute its products.
8
<PAGE>
OEM and Custom Product Sales have been made only to a few customers and
have generally been large and sporadic transactions. During fiscal 1995,
1996, 1997, and the six months ended September 30, 1997, 45%, 56%, 39%, and
40% respectively, of the Company's OEM and Custom Product Sales have been
with one customer whose orders have fluctuated significantly based on their
own sales volumes. While the Company's OEM customers typically place orders
for products several months before the scheduled shipment date, these orders
are subject to rescheduling and cancellation. Also, OEM customers can
redesign their products without the AMX equipment in them resulting in
reduced or eliminated sales to such customers. One of the Company's
strategies for growth is to increase OEM and Custom Product Sales to large
customers that typically carry lower gross margins, but also have lower
selling expenses.
The Company's U. S. dealers pursue a wide variety of projects that can
range from small conference rooms/boardrooms to very large projects in a
university, government facility, amusement park, or corporate training
facility. The Company's international distributors tend to order in large
quantities to take advantage of volume discounts the Company offers and to
economize on shipping costs. These international orders are not received at
the same time each year. Notwithstanding the difficulty in forecasting future
sales and the relatively small level of backlog at any given time, the
Company generally must plan production, order components, and undertake its
development, selling and marketing activities, and other commitments months
in advance. Accordingly, any shortfall in revenues in a given quarter may
impact the Company's results of operations because the Company generally does
not plan to adjust expenditure levels in response to fluctuations in
quarterly revenues.
The Company purchases components that comprise approximately 28% to 32% of
its cost of sales from foreign vendors. The primary components purchased are
standard power supplies and displays for touch panels. Historically, the
Company has not had any significant cost issues related to price changes due
to purchasing from foreign vendors. However, there can be no assurance that
this will be the case in the future. The Company has experienced delays of up
to three weeks in receiving materials from foreign vendors. However, the
Company takes this issue into consideration when orders are placed and,
therefore, this concern has not, in the past, significantly impacted the
Company's ability to meet production and customer delivery deadlines.
However, a significant shortage of or interruption in the supply of foreign
components could have a material adverse affect on the Company's results of
operations.
The Company's selling and marketing expenses category also includes
customer service and support and engineering. The engineering department of
the Company is involved in research and development as well as customer
support and service. Additionally, the Company has created sales support
teams, which are focused on specific geographic regions or customer
categories. These teams include sales personnel, system designers, and
technical support personnel, all of whom indirectly participate in research
and development activities by establishing close relationships with the
Company's customers and by individually responding to customer-expressed
needs.
9
<PAGE>
The Company's selling and marketing expenses also include costs associated
with expanding its presence into the Pacific Rim region. In August 1995, the
company formed a wholly owned subsidiary, AMX Control Systems Pte. Ltd., as a
representative company in Singapore in order to provide customer support for
the sale of its products into that region. Late in the fiscal year ended
March 31, 1997, the Company committed to expand the operations of this
subsidiary and has increased the operations of AMX Control Systems Pte. Ltd.
to include additional customer support, marketing support, product
programming, and product training for its customers in the region.
The Company also has committed resources to develop new software for
specific vertical markets to expand system sales and to provide added value
to its hardware products. The Company's investment in PHAST Corporation,
which commenced in August 1995, is an example of this commitment. This
subsidiary designed and has recently begun shipments of control systems and
products for home automation. As of September 30, 1997, the Company has
advanced $4,794,000 to PHAST, and has recorded net losses of $1,227,883,
$2,311,000 and $445,000 for the six months ended September 30, 1997 and the
years ended March 31, 1997 and March 31, 1996, respectively. Although
management believes that significant investments such as these are
appropriate, such investments can and have had a negative impact on the
Company's results of operations.
10
<PAGE>
RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 1997 RESULTS COMPARED TO THREE MONTHS ENDED
SEPTEMBER 30, 1996.
NET SALES for the second quarter were $14.8 million, up 38% over the net
sales in the second quarter of the prior year of $10.7 million. The increase
in sales was driven by growth in residential and international sales.
Residential sales increased 106% primarily as a result of $911,000 sales from
PHAST this year which did not occur in the second quarter last year.
International sales increased 70% over the same quarter last year.
COST OF SALES consists of material, labor, and manufacturing overhead, and
was $6.3 million or 42.8% of net sales for the second quarter of 1998, as
compared to $3.9 million or 36.5% of net sales in the comparable period of
the prior year. The increase in cost of sales is due primarily to the
increase in residential and international sales noted above, both of which
have historically experienced higher percentage cost of sales than the
Company's core business. The cost of sales in the residential market
approximates 50%. However, the Company has also been adversely affected by
the manufacturing variances caused by the under absorption of overhead costs
at PHAST and AudioEase. The core business of the Company, which is comprised
mostly of corporate sales, has maintained its historical cost of sales
percentage of 39%.
SELLING AND MARKETING EXPENSES increased from $3.6 million, or 33.8% of
net sales for the second quarter last year to $5.2 million or 34.8% of sales
for the second quarter this year. Both the increase in dollars and the
percentage increase were driven by the emergence of PHAST and the expansion
of the sales and marketing activities in the Company's subsidiary, AMX
Control Systems Pte. Ltd. These companies accounted for $575,700 of the
total increase of $1.6 million for the quarter. The remaining sales and
marketing expenses were consistent with or lower than the historical
percentage of net sales.
RESEARCH AND DEVELOPMENT EXPENSES were $974,000, or 6.6% of net sales in
the second quarter of 1998 compared to $586,000 and 5.5% of net sales last
year. The increase in spending is a result of AMX's commitment to the
development of new products to maintain its competitive position in its
marketplace.
GENERAL AND ADMINISTRATIVE EXPENSES were $1.3 million, or 8.9% of net
sales during the second quarter of 1998 compared to $1.1 million and 10.4% of
net sales for the second quarter last year. The decrease was a result of the
elimination of legal expenses associated with litigation the Company was
involved with last year.
MINORITY INTEREST of $235,000 was recorded in the second quarter last year
due to the preferred stock investment made in the Company's subsidiary,
PHAST. In the Company's fourth quarter of last fiscal year, management
decided that it would more likely than not exercise its option to purchase
the preferred stock, and accordingly, has not recorded any additional
minority interest in its consolidated financial statements.
11
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The Company's EFFECTIVE TAX RATE was 50.4% in the second quarter of last
year compared to 40.4% in the second quarter this year. The effective tax
rate has been reduced by the Company's ability to include PHAST in its
consolidated tax return as a result of its purchase of PHAST shares that
moved the Company's total holding above 80%. Also, last year the Company was
adversely affected by the acquired research and development expenses, which
it was not allowed to deduct on its tax return.
SIX MONTHS ENDED SEPTEMBER 30, 1997 RESULTS COMPARED TO SIX MONTHS ENDED
SEPTEMBER 30, 1996.
NET SALES were $27.9 million for the six months ended September 30, 1997,
up 47.1% over the $18.9 million in sales for the comparable period in the
prior year. The increase in sales was driven by growth in residential and
international sales. Residential sales are up 125% over the same period last
year due to shipment of products from PHAST, which did not occur last year.
International sales increased 71% over the same period last year, driven by
sales in the Company's UK subsidiary, AXCESS Technologies and the increase in
sales in the Pacific Rim.
COST OF SALES were $12.1 million or 43.5% of net sales in the six months
ended September 30, 1997, as compared to $7.3 million or 38.7% of net sales
in the comparable period of the prior year. The increase for the six months
ended September 30, 1997 is due to the increase in residential and
international sales noted above, both of which have historically experienced
higher percentage cost of sales than the Company's core business. The cost of
sales in the residential market approximates 50%. However, the Company has
also been adversely affected by the manufacturing variances caused by the
under absorption of overhead costs at PHAST and AudioEase.
SELLING AND MARKETING EXPENSES increased from $6.9 million, or 36.7% of
net sales for the six months ended September 30, 1996 to $10.7 million or
38.4% of sales for the same period of the current year. Expenses increased as
a result of the emergence of PHAST and the increased commitment by the
Company to its Singapore subsidiary, AMX Control Systems Pte. Ltd.. These
two companies accounted for $985,000 of the $3.8 million increase. The
remaining sales and marketing expenses were consistent with or lower than the
historical percentage of net sales.
ACQUIRED RESEARCH AND DEVELOPMENT was $1.2 million for the six months
ended September 30, 1996 resulting from the allocation of costs associated
with the acquisitions of AudioEase and Camrobotics, which occurred in May and
June 1996, respectively.
RESEARCH AND DEVELOPMENT EXPENSES were $2.0 million for the six months
ending September 30, 1997 compared to $1.3 million for the same period last
year. This represents 7.2% and 7.1% of net sales respectively. The increase
in spending reflect the Company's continued commitment to the development of
its products.
12
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GENERAL AND ADMINISTRATIVE EXPENSES were $2.4 million for the six months
ending September 30, 1997, up from $1.8 million for the same period last
year. This represents a decrease from 9.5% of net sales to 8.5% of net
sales. The decrease is a result of the elimination of legal expenses
associated with the litigation which the Company settled in the fourth
quarter of last year.
The Company's EFFECTIVE TAX RATE was 40.3% for the six months ended
September 30, 1997 and 47.1% for the same period last year. The effective
tax rate has been reduced by the Company's ability to include PHAST in its
consolidated tax return due to its purchase of shares that moved the
Company's total holding above 80%. Also, last year the Company was adversely
affected by the acquired research and development expenses, which it was not
allowed to deduct on its tax return. There remain $3.5 million in PHAST
losses which will be carried forward and applied against any future net
income generated by PHAST.
LIQUIDITY AND CAPITAL RESOURCES
For the past three years, the Company has satisfied its operating cash
requirements principally through cash flow from operations. In the six months
ended September 30, 1997, the Company used $1.7 million of cash in
operations. The Company spent $1.0 million in capital expenditures,
primarily for the purchase of computer equipment and for furniture and
fixtures and leasehold improvements associated with the expansion of its
headquarters in Dallas, Texas.
The Company has a revolving loan agreement for $5.0 million which expires
on July 15, 1998, which provides for interest at the bank's contract rate
which is expected to approximate prime. At September 30, 1997, $1.6 million
was outstanding under the revolving loan agreement.
The Company expects to spend approximately $1.8 million for capital
expenditures in fiscal 1998.
The Company utilizes a significant number of computer software programs
and operating systems in its operations, including applications used in
manufacturing, product development, financial business systems, and various
administrative functions. To the extent that the Company's software
applications contain source code that is unable to appropriately interpret
the upcoming calendar year "2000", some level of modification or even
possibly replacement of such applications will be necessary. The Company is
currently in the process of completing its identification of applications that
are not "Year 2000" compliant. Given information known at this time about
Company systems having such issues, coupled with the Company's on-going,
normal course of business efforts to upgrade or replace business critical
systems, as necessary, it is currently not expected that these "Year 2000"
costs will have any material adverse impacts on the Company's liquidity or
its results of operations.
In May 1996, the Company acquired 100% of SPS International, Inc. dba
AudioEase. AudioEase designs, manufactures, and markets hardware and software
products for upscale home theater systems whole-home audio/video control and
distribution systems, as well as other electronic home systems. The
acquisition was completed at a purchase price of $1.5 million paid in 181,818
shares of AMX Corporation common stock. The Company engaged an independent
appraisal company to assist in allocating the purchase price of AudioEase.
The majority of the purchase price was allocated to in-process research and
development projects. In accordance with generally accepted accounting
principles, the purchase price allocated to in-process research and
development projects was expensed in a one-time charge to the Company's
consolidated earnings as of the date of the consummation of the combination.
In June 1996, the Company acquired 100% of the assets of Camrobotics, Inc.
a designer and developer of pan and tilt cameras for a purchase price of
$250,000. Payment was made with $125,000 in cash and the delivery of a
$125,000 note payable
13
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due in November 1997. The majority of the purchase price was allocated
to in-process research and development projects. In accordance with generally
accepted accounting principles, the purchase price allocated to in-process
research and development projects was expensed in a one-time charge to the
Company's consolidated earnings as of the date of the consummation of the
combination.
On July 7, 1997, the Company acquired 7,322 shares of common stock,
representing 29% of the stock of its subsidiary, PHAST Corporation, from the
Company's chairman, Scott D. Miller for $25,000 in a cash transaction. The
Company had held 51% of the stock of PHAST prior to the purchase. The
Company also granted Mr. Miller the right to require the Company to purchase
his 14,750 shares of preferred stock in PHAST for a per share purchase price
of $100 (which is the liquidation preference of the preferred stock), or an
aggregate purchase price of $1,475,000, plus accrued but unpaid dividends, at
any time from April 1, 1998 through March 31, 1999.
The Company believes that cash flow from operations, the Company's
existing cash resources and funds available under its revolving loan facility
will be adequate to fund its working capital and capital expenditure
requirements for at least the next 12 months. An important element of the
Company's business strategy has been, and continues to be, the acquisition of
similar businesses and complementary products and technology and the
integration of such businesses and products and technology into the Company's
existing operations. Such future acquisitions, if they occur, may require
that the Company seek additional funds.
CONTINGENCIES
The Company is party to ordinary litigation incidental to its business,
none of which is expected to have a material adverse effect on the results of
operations, financial position, or liquidity of the Company.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not applicable.
14
<PAGE>
AMX CORPORATION
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Information pertaining to this item is incorporated herein from Part 1.
Financial Information (Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations - Contingencies).
Item 4. Submission of Matters to a Vote of Security Holders
The 1997 Annual Meeting of Shareholders of AMX Corporation was held on
August 13, 1997 to consider two matters of business. The matters brought
before the shareholders and the voting results are as follows:
1. Election of Directors.
SHARES
WITHHELD
FROM VOTING BROKER
FOR FOR NON-VOTES *
Scott D. Miller 5,024,174 11,369 -
Joe Hardt 5,026,074 9,469 -
Peter York 5,026,174 9,369 -
Thomas S. Roberts 5,026,274 9,269 -
Harvey B. Cash 5,026,274 9,269 -
J. Otis Winters 5,026,274 9,269 -
2. Ratification of Ernst & Young LLP as auditors
BROKER
FOR AGAINST ABSTAIN NON-VOTES *
5,021,124 1,250 13,169 -
* Broker non-votes occur where a broker holding stock in street name does not
vote those shares.
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits
3.1 Amended and Restated Articles of Incorporation the Company.
(Incorporated by reference from Exhibit 3.1 to the Company's Form S-8
filed March 11, 1996, File No. 333-2202).
15
<PAGE>
+3.2 Amended and Restated Bylaws of the Company, as amended.
4.1 Specimen certificate for the Common Stock of the Company
(Incorporated by reference from Exhibit 4.1 to the Company's
Registration Statement on Form S-1 filed September 13, 1995, as
amended, File No. 33-96886).
+27.1 Financial Data Schedule.
b. Reports on Form 8-K
None
- -----------------------
+ Filed herewith.
16
<PAGE>
AMX CORPORATION
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.
AMX Corporation
Date: November 13, 1997 By: /s/ David E. Chisum
------------------------------------
David E. Chisum
Chief Financial Officer (Duly Authorized
Officer and Principal Financial Officer)
17
<PAGE>
AMENDED AND RESTATED BYLAWS
OF
AMX CORPORATION
<PAGE>
AMENDED AND RESTATED BYLAWS
OF
AMX CORPORATION
TABLE OF CONTENTS
ARTICLE I. Offices.
1.01. Principal Office.
1.02. Other Offices.
ARTICLE II. Meetings of Shareholders.
2.01. Place of Meetings.
2.02. Annual Meeting.
2.03. List of Shareholders.
2.04. Special Meetings.
2.05. Notice.
2.06. Quorum.
2.07. Voting on Matters Other than the Election of Directors.
2.08. Voting in the Election of Directors.
2.09. Voting Procedure.
2.10. Action Without a Meeting.
2.11. Telephone Meetings.
ARTICLE III. Directors.
3.01. Management.
3.02. Number; Election.
3.03. Change in Number.
3.04. Election of Directors.
3.05. Place of Meetings.
3.06. First Meetings.
3.07. Regular Meetings.
3.08. Special Meetings.
3.09. Quorum.
3.10. Removal.
3.11. Vote of Directors to Fill Vacancy.
3.12. Vote of Shareholders to Fill Vacancy.
3.13. Action Without Meeting; Telephone Meetings.
3.14. Chairman of the Board.
3.15. Compensation.
3.16. Committees.
(i)
<PAGE>
TABLE OF CONTENTS
(Continued)
ARTICLE IV. Notices.
4.01. Method.
4.02. Waiver.
ARTICLE V. Officers.
5.01. Officers.
5.02. Election.
5.03. Compensation.
5.04. Removal and Vacancies.
5.05. President.
5.06. Vice Presidents.
5.07. Secretary.
5.08. Assistant Secretaries.
5.09. Treasurer.
5.10. Assistant Treasurers.
ARTICLE VI. Certificates Representing Shares.
6.01. Certificates.
6.02. Lost Certificates.
6.03. Transfer of Shares.
6.04. Registered Shareholders.
6.05. Fixing Record Date for Matters Other Than Consents to
Action.
6.06. Fixing Record Date for Consents to Action.
6.07. Distribution Held in Suspense.
6.08. Joint Owners of Shares.
ARTICLE VII. General Provisions.
7.01. Distributions.
7.02. Reserves.
7.03. Checks.
7.04. Fiscal Year.
7.05. Seal.
7.06. Indemnification.
7.07. Transactions with Directors and Officers.
7.08. Amendments.
7.09. Table of Contents; Headings.
(ii)
<PAGE>
AMENDED AND RESTATED BYLAWS
OF
AMX CORPORATION
(THE "CORPORATION")
ARTICLE I.
OFFICES
Section 1.01. PRINCIPAL OFFICE. The principal business office of the
Corporation shall be at 11995 Forestgate Drive, Dallas, Texas 75243
Section 1.02. OTHER OFFICES. The Corporation may also have offices at
such other places, both within and without the State of Texas, as the Board of
Directors may from time to time determine or the business of the Corporation may
require.
ARTICLE II.
MEETINGS OF SHAREHOLDERS
Section 2.01. PLACE OF MEETINGS. Meetings of shareholders for all
purposes may be held at such time and place, within or without the State of
Texas, as shall be stated in the notice of the meeting or in a duly executed
waiver of notice thereof.
Section 2.02. ANNUAL MEETING. An annual meeting of the shareholders shall
be held at such time as the Board of Directors may decide, at which meeting they
shall elect a Board of Directors and transact such other business as may
properly be brought before the meeting.
Section 2.03. LIST OF SHAREHOLDERS. The officer or agent having charge of
the share transfer records shall make, at least ten (10) days before each
meeting of the shareholders, a complete list of the shareholders entitled to
vote at said meeting, arranged in alphabetical order with the address of and the
number of voting shares held by each, which list, for a period of ten (10) days
prior to such meeting, shall be kept on file at the registered office or
principal place of business of the Corporation and shall be subject to
inspection by any shareholder at any time during usual business hours. Such
list shall be produced and kept open at the time and place of the meeting during
the whole time thereof, and shall be subject to the inspection of any
shareholder who may be present. The original share transfer records shall be
prima facie evidence as to the shareholders who are entitled to examine such
list or transfer records or to vote at any such meeting of shareholders.
Section 2.04. SPECIAL MEETINGS. Special meetings of the shareholders, for
any purpose or purposes, unless otherwise prescribed by statute or by the
Articles of Incorporation or by these
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<PAGE>
Bylaws, may be called by the President, the Board of Directors, or the holders
of not less than ten percent (10%) of all shares entitled to vote at the
meetings. Business transacted at all special meetings shall be confined to
the purposes stated in the notice of the meeting.
Section 2.05. NOTICE. Written or printed notice stating the place, day
and hour of the meeting, and, in case of a special meeting, the purpose or
purposes for which the meeting is called, shall be delivered not less than ten
(10) nor more than sixty (60) days before the date of the meeting, either
personally or by mail by or at the direction of the President, the Secretary or
the officer or person calling the meeting, to each shareholder entitled to vote
at the meeting; provided, however, in the event of a merger or consolidation,
such notice shall be delivered not less than twenty (20) days before the
meeting.
Section 2.06. QUORUM. Unless otherwise provided in the Articles of
Incorporation, a quorum shall be present at a meeting of shareholders if the
holders of a majority of the shares entitled to vote are represented at the
meeting in person or by proxy. Unless otherwise provided in the Articles of
Incorporation or these Bylaws, once a quorum is present at a meeting of
shareholders, the shareholders represented in person or by proxy at the meeting
may conduct such business as may be properly brought before the meeting until it
is adjourned, and the subsequent withdrawal from the meeting of any shareholder
or the refusal of any shareholder represented in person or by proxy to vote
shall not affect the presence of a quorum at the meeting. Unless otherwise
provided in the Articles of Incorporation, the shareholders represented in
person or by proxy at a meeting of shareholders at which a quorum is not present
may adjourn the meeting until such time and to such place as may be determined
by a vote of the holders of a majority of the shares represented in person or by
proxy at that meeting.
Section 2.07. VOTING ON MATTERS OTHER THAN THE ELECTION OF DIRECTORS.
With respect to any matter other than the election of Directors or a matter for
which the affirmative vote of the holders of a specified portion of the shares
entitled to vote is required by law, the affirmative vote of the holders of a
majority of the shares entitled to vote on that matter and represented in person
or by proxy at a meeting of shareholders at which a quorum is present shall be
the act of the shareholders unless otherwise provided in the Articles of
Incorporation or these Bylaws.
Section 2.08. VOTING IN THE ELECTION OF DIRECTORS. Directors shall be
elected by a plurality of the votes cast by the holders of shares entitled to
vote in the election of Directors at a meeting of shareholders at which a quorum
is present unless otherwise provided in the Articles of Incorporation or these
Bylaws.
Section 2.09. VOTING PROCEDURE. Each outstanding share of common stock
shall be entitled to one (1) vote on each matter submitted to a vote at a
meeting of shareholders, except to the extent that the voting rights of the
shares of any class or classes are limited or denied by the Articles of
Incorporation. At any meeting of the shareholders, every shareholder having the
right to vote shall be entitled to vote either in person or by proxy executed in
writing subscribed by the shareholder. A telegram, telex, cablegram or similar
transmission by the shareholder, or a photographic, photostatic, facsimile or
similar reproduction of a writing executed by the shareholder shall be treated
as an execution in writing for purposes of this section. No proxy shall
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<PAGE>
be valid after eleven (11) months from the date of its execution, unless
otherwise provided in the proxy. Each proxy shall be revocable unless the
proxy form conspicuously states that the proxy is irrevocable and the proxy is
coupled with an interest.
Section 2.10. ACTION WITHOUT A MEETING. Except as otherwise provided
below, any action required or permitted to be taken at a meeting of the
shareholders of the Corporation may be taken without a meeting if a consent in
writing setting forth the action so taken shall be signed by all of the
shareholders entitled to vote with respect to the subject matter thereof, and
such consent shall have the same force and effect as a unanimous vote of the
shareholders.
The Articles of Incorporation may provide that any action required by the
Texas Business Corporation Act to be taken at any annual or special meeting of
shareholders, or any action that may be taken at any annual or special meeting
of shareholders, may be taken without a meeting, without prior notice, and
without a vote, if a consent or consents in writing, setting forth the action so
taken, shall be signed by the holder or holders of shares having not less than
the minimum number of votes that would be necessary to take such action at a
meeting at which the holders of all shares entitled to vote on the action were
present and voted. If the Articles of Incorporation make such a provision, then
such written consent shall bear the date of signature of each shareholder who
signs the consent. No written consent shall be effective to take the action
that is the subject of the consent unless, within sixty (60) days after the date
of the earliest dated consent delivered to the Corporation in the manner
required by the Texas Business Corporation Act, a consent or consents signed by
the holder or holders of shares having not less than the minimum number of votes
that would be necessary to take the action that is the subject of the consent
are delivered to the Corporation by delivery to its registered office, its
principal place of business, or an officer or agent of the Corporation having
custody of the books in which proceedings of meetings of shareholders are
recorded. Delivery shall be by hand or certified or registered mail, return
receipt requested. Delivery to the Corporation's principal place of business
shall be addressed to the president or principal executive officer of the
Corporation.
A telegram, telex, cablegram, or similar transmission by a shareholder, or
a photographic, photostatic, facsimile or similar reproduction of a writing
signed by a shareholder shall be regarded as signed by the shareholder for
purposes of this section. Prompt notice of the taking of any action by
shareholders without a meeting by less than unanimous written consent shall be
given to those shareholders who did not consent in writing to the action.
Section 2.11. TELEPHONE MEETINGS. Subject to applicable notice provisions
and unless otherwise restricted by the Articles of Incorporation, shareholders
may participate in and hold a meeting by means of conference telephone or
similar communications equipment by means of which all persons participating in
the meeting can hear each other, and participation in such meeting shall
constitute presence in person at such meeting, except where a person's
participation is for the express purpose of objecting to the transaction of any
business on the ground that the meeting is not lawfully called or convened.
-3-
<PAGE>
ARTICLE III.
DIRECTORS
Section 3.01. MANAGEMENT. The powers of the Corporation shall be
exercised by or under the authority of, and the business affairs of the
Corporation shall be managed under the direction of the Board of Directors that
may exercise all such powers of the Corporation and do all such lawful acts and
things as are not by statute or by the Articles of Incorporation or by these
Bylaws directed or required to be exercised or done by the shareholders. The
Board of Directors shall keep regular minutes of its proceedings.
Section 3.02. NUMBER; ELECTION. The Directors of the Corporation shall
consist of not less than one (1) Director, as determined from time to time by
resolution of the shareholders of the Corporation. Directors need not be
shareholders or residents of the State of Texas. The Directors shall be elected
at the annual meeting of the shareholders by the holders of shares entitled to
vote in the election of Directors and, except as hereinafter provided, each
Director elected shall hold office for the term for which such Director is
elected and until such Director's successor shall have been elected and shall
qualify.
Section 3.03. CHANGE IN NUMBER. The number of Directors may be increased
or decreased from time to time by amendment to these Bylaws, but no decrease
shall have the effect of shortening the term of any incumbent Director.
Section 3.04. ELECTION OF DIRECTORS. Directors shall be elected by a
plurality of the votes cast by the holders of shares entitled to vote in the
election of Directors at a meeting of shareholders at which a quorum is present
unless otherwise provided in the Articles of Incorporation or these Bylaws. At
every election of Directors, each shareholder shall have the right to vote in
person or by proxy the number of voting shares owned by such shareholder for as
many persons as there are Directors to be elected and for whose election such
shareholder has a right to vote. Cumulative voting shall be prohibited.
Section 3.05. PLACE OF MEETINGS. The Directors of the Corporation may
hold their meetings, both regular and special, either within or without the
State of Texas.
Section 3.06. FIRST MEETINGS. The first meeting of each newly elected
Board shall be held without further notice immediately following the annual
meeting of shareholders, and at the same place, unless by unanimous consent of
the Directors then elected and serving, such time or place shall be changed.
Section 3.07. REGULAR MEETINGS. Regular meetings of the Board of
Directors may be held without notice at such time and place as shall from time
to time be determined by the Board.
Section 3.08. SPECIAL MEETINGS. Special meetings of the Board of
Directors may be called by the President on three (3) days' notice to each
Director, either personally or by mail or by telegram and shall be called by the
President or any officer in like manner and on like notice on the written
request of two (2) or more of the Directors. Except as may be otherwise
expressly provided by law or by the Articles of Incorporation or by these
Bylaws, neither the business to
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<PAGE>
be transacted at nor the purpose of any special meeting need be specified in a
notice or waiver of notice of such meeting.
Section 3.09. QUORUM. At all meetings of the Board of Directors, the
presence of a majority of the number of the Directors fixed by or in the manner
provided in the Articles of Incorporation or these Bylaws shall constitute a
quorum for the transaction of business unless a greater number is required by
law, the Articles of Incorporation or the Bylaws. The act of a majority of the
Directors present at any meeting at which there is a quorum shall be the act of
the Board of Directors unless the act of a greater number is required by law,
the Articles of Incorporation or by these Bylaws. If a quorum shall not be
present at any meeting of Directors, the Directors present thereat may adjourn
the meeting from time to time, without notice other than announcement at the
meeting, until a quorum shall be present.
Section 3.10. REMOVAL. At any meeting of the shareholders called
expressly for such purpose, any Director or the entire Board of Directors may be
removed either with or without cause by the affirmative vote of the holders of a
majority of the shares entitled to vote at an election of such Directors.
Section 3.11. VOTE OF DIRECTORS TO FILL VACANCY. Any vacancy occurring in
the initial Board of Directors before the issuance of shares may be filled by
the affirmative vote or written consent of a majority of the incorporators or by
the affirmative vote of a majority of the remaining Directors though less than a
quorum of the Board of Directors. Any vacancy subsequently occurring in the
Board of Directors after the issuance of shares may be filled in accordance with
Section 3.12 of this Article III or may be filled by the affirmative vote of a
majority of the remaining Directors though less than a quorum of the Board of
Directors. A Director elected to fill a vacancy shall be elected for the
unexpired term of such Director's predecessor in office. A directorship to be
filled by reason of an increase in the number of Directors may be filled in
accordance with Section 3.12 of this Article III or may be filled by the Board
of Directors for a term of office continuing only until the next election of one
(1) or more Directors by the shareholders; provided that the Board of Directors
may not fill more than two (2) such directorships during the period between any
two (2) successive annual meetings of the shareholders.
Section 3.12. VOTE OF SHAREHOLDERS TO FILL VACANCY. Any vacancy occurring
in the Board of Directors or any directorship to be filled by reason of an
increase in the number of Directors may be filled by election at any annual or
special meeting of shareholders called for that purpose.
Section 3.13. ACTION WITHOUT MEETING; TELEPHONE MEETINGS. Unless
otherwise restricted by the Articles of Incorporation or these Bylaws, any
action required or permitted to be taken at a meeting of the Board of Directors
or of any committee designated by the Board of Directors may be taken without a
meeting if a consent in writing, setting forth the action so taken is signed by
all the members of the Board of Directors or committee, as the case may be.
Such consent shall have the same force and effect as a unanimous vote at a
meeting and may be stated as such in any document or instrument filed with the
Secretary of State. Subject to applicable notice provisions and unless
otherwise restricted by the Articles of Incorporation or these Bylaws, members
of the
-5-
<PAGE>
Board of Directors or members of any committee designated by the Board of
Directors may participate in and hold a meeting by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other, and participation in such
meeting shall constitute presence in person at such meeting, except where a
person participates in the meeting for the express purpose of objecting to the
transaction of any business on the ground that the meeting is not lawfully
called or convened.
Section 3.14. CHAIR OF THE BOARD. The Board of Directors may elect a
Chair of the Board to preside at their meetings and perform such other duties as
the Board may from time to time assign to the Chair.
Section 3.15. COMPENSATION. Directors, as such, shall not receive any
stated salary for their services, but, by resolution of the Board a fixed sum
and expenses of attendance, if any, may be allowed for attendance at each
regular or special meeting of the Board; provided that nothing herein contained
shall be construed to preclude any Director from serving the Corporation in any
other capacity and receiving compensation therefor. Members of any committee
designated by the Board may, by resolution of the Board of Directors, be allowed
like compensation for attending committee meetings.
Section 3.16. COMMITTEES. The Board of Directors, by resolution adopted
by a majority of the full Board of Directors, may designate from among its
members one (1) or more committees, each of which shall be comprised of one (1)
or more of its members and may designate one (1) or more of its members as
alternate members of any committee, who may, subject to any limitations imposed
by the Board of Directors, replace absent or disqualified members at any meeting
of that committee. Any such committee, except to the extent provided in said
resolution, shall have and may exercise all of the authority of the Board of
Directors in the management of the business and affairs of the Corporation,
except where action of the full Board of Directors is required by law or by the
Articles of Incorporation. Any member of the committees may be removed by the
Board of Directors by the affirmative vote of a majority of the Board of
Directors, whenever in its judgment the best interests of the Corporation will
be served thereby. The committees shall keep regular minutes of their
proceedings and report the same to the Board of Directors when required.
ARTICLE IV.
NOTICES
Section 4.01. METHOD. Whenever by statute, the Articles of Incorporation
or these Bylaws, notice is required to be given to any Director or shareholder,
and no provision is made as to how such notice shall be given, it shall not be
construed to mean personal notice, but any such notice may be given in writing,
either personally or by mail, postage prepaid, addressed to such Director or
shareholder at such address as appears on the share transfer records of the
Corporation or in any other method permitted by law. Any notice required or
permitted to be
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<PAGE>
given by mail shall be deemed to be given at the time when the
same shall be thus deposited in the United States mail as aforesaid.
Section 4.02. WAIVER. Whenever any notice is required to be given to any
shareholder or Director of the Corporation by law, the Articles of Incorporation
or these Bylaws, a waiver thereof in writing signed by the person or persons
entitled to such notice, whether before or after the time stated in such notice,
shall be deemed equivalent to the giving of such notice. Attendance of a
shareholder or Director at a meeting shall constitute a waiver of notice of such
meeting, except where a shareholder or Director attends for the express purpose
of objecting to the transaction of any business on the ground that the meeting
is not lawfully called or convened. Consent in writing by a shareholder or
Director to any action taken or resolution adopted by the shareholders or
Directors of the Corporation shall constitute a waiver of any and all notices
required to be given in connection with such action or resolution.
ARTICLE V.
OFFICERS
Section 5.01. ELECTED OFFICERS. The elected officers of the Corporation
shall be a Chairman of the Board (if the Board of Directors shall determine the
election of such officer to be appropriate), President, and one or more Vice
Presidents as may be determined from time to time by the Board (and, in the case
of each such Vice President, with such descriptive title, if any, as the Board
of Directors shall deem appropriate), a Secretary, and a Treasurer. The
Chairman of the Board, if any, shall be a member of the Board of Directors. No
other elected officer of the Corporation need be a member of the Board of
Directors. The Board of Directors may appoint such other officers and agents as
it shall deem necessary, who shall be appointed for such terms and shall
exercise such powers and perform such duties as shall be determined from time to
time by the Board of Directors.
Section 5.02. ELECTION. So far as is practicable, all elected officers
shall be elected by the Board of Directors at its first meeting after each
annual meeting of shareholders.
Section 5.03. APPOINTIVE OFFICERS. The Board of Directors may also
appoint one or more Assistant Secretaries and Assistant Treasurers and such
other officers and assistant officers and agents (none of whom need be a member
of the Board) as it shall from time to time deem necessary, who shall exercise
such powers and perform such duties as shall be set forth in these Bylaws or
determined from time to time by the Board of Directors or the Executive
Committee.
Section 5.04. TWO OR MORE OFFICES. Any two (2) or more offices may be held
by the same person.
Section 5.05. COMPENSATION. The compensation of all officers of the
Corporation shall be fixed from time to time by the Board of Directors or the
Executive Committee. The Board
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<PAGE>
of Directors or the Executive Committee may from time to time delegate to the
President the authority to fix the compensation of any or all of the other
officers of the Corporation.
Section 5.06. TERM OF OFFICE; REMOVAL; FILLING OF VACANCIES. Each elected
officer of the Corporation shall hold office until his successor is chosen and
qualified in his stead or until his earlier death, resignation, retirement,
disqualification or removal from office. Each appointive officer shall hold
office at the pleasure of the Board of Directors without the necessity of
periodic reappointment. Any officer or agent elected or appointed by the Board
of Directors may be removed at any time by the Board of Directors whenever in
its judgment the best interests of the Corporation will be served thereby, but
such removal shall be without prejudice to the contract rights, if any, of the
person so removed. Election or appointment of an officer or agent will not of
itself create contract rights. If the office of any officer becomes vacant for
any reason, the vacancy may be filled by the Board of Directors.
Section 5.07. CHAIR OF THE BOARD. The Board of Directors may elect a
Chair of the Board to preside at their meetings and perform such other duties as
the Board may from time to time assign to the Chair.
Section 5.08. CHIEF EXECUTIVE OFFICER. The Chief Executive Officer shall
preside at all meetings of the shareholders and the Board of Directors unless
the Board shall choose to elect a Chairman of the Board, in which event the
Chief Executive Officer shall preside at Board of Directors' meetings in the
absence of the Chairman of the Board of Directors. The Chief Executive Officer
shall have general and active management of the business and affairs of the
Corporation, shall see that all orders and resolutions of the Board are carried
into effect, and shall perform such other duties as the Board of Directors shall
prescribe.
Section 5.09. CHIEF OPERATING OFFICER. The Chief Operating Officer shall
have general and active management of the day-to-day operations of the
Corporation and shall perform such other duties as the Board of Directors shall
prescribe.
Section 5.10. CHIEF FINANCIAL OFFICER. The Chief Financial Officer shall
have principal responsibility for the financial, tax and accounting affairs of
the Corporation and shall discharge such specific responsibilities in connection
therewith, including, without limitation, preparation of periodic financial
statements of the Corporation, as may be assigned to such person from time to
time by the Board of Directors, the Chief Executive Officer or the Chief
Operating Officer.
Section 5.11. PRESIDENT. The President shall be ex-officio a member of
all standing committees and shall have general powers of oversight, supervision
and management of the business and affairs of the Corporation. The President
shall see that all orders and resolutions of the Board of Directors are carried
into effect. The President shall have such other powers and duties as usually
pertain to such office or as may be prescribed by the Board of Directors. The
President shall execute bonds, mortgages, instruments, contracts, agreements,
and other documentation, except where the signing and execution thereof shall be
expressly delegated by the Board of Directors to some other officer or agent of
the Corporation.
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<PAGE>
Section 5.12. VICE PRESIDENTS. Each Vice President shall have such titles
as may be prescribed by the Board of Directors, and shall generally assist the
President and shall have such powers and perform such duties and services as
shall from time to time be prescribed or delegated to him by the Chief Executive
Officer, the Chief Operating Officer, the President, the Board of Directors or
the Executive Committee.
Section 5.13. TREASURER. The Treasurer shall have the care and custody of
all monies, funds and securities of the Corporation; shall deposit or cause to
be deposited all such funds in and with such depositories as the Board of
Directors or the Executive Committee shall from time to time direct or as shall
be selected in accordance with procedure established by the Board or the
Executive Committee; shall advise upon all terms of credit granted by the
Corporation; and shall be responsible for the collection of all its accounts and
shall cause to be kept full and accurate accounts of all receipts and
disbursements of the Corporation. He shall have the power to endorse for
deposit or collection or otherwise all checks, drafts, notes, bills of exchange
or other commercial papers payable to the Corporation and to give proper
receipts or discharges for all payments to the Corporation. The Treasurer shall
generally perform all the duties usually appertaining to the office of treasurer
of a corporation. In the absence or disability of the Treasurer, his duties
shall be performed and his powers may be exercised by the Assistant Treasurers
in the order of their seniority, unless otherwise determined by the Treasurer,
the Chairman of the Board, the Chief Executive Officer, the Chief Operating
Officer, the Chief Financial Officer, the President, the Board of Directors or
the Executive Committee. If required by the Board of Directors, he shall give
the Corporation a bond in such form, in such sum, and with such surety or
sureties as shall be satisfactory to the Board for the faithful performance of
the duties of his office.
Section 5.14. ASSISTANT TREASURERS. Each Assistant Treasurer shall
generally assist the Treasurer and shall have such powers and perform such
duties and services as shall from time to time be prescribed or delegated to him
by the Treasurer, the Chairman of the Board, the Chief Executive Officer, the
Chief Operating Officer, The Chief Financial Officer, the President, the Board
of Directors, or the Executive Committee.
Section 5.15. SECRETARY. The Secretary shall see that notice is given of
all meetings of the shareholders and special meetings of the Board of Directors
and shall keep and attest true records of all proceedings at all meetings of the
shareholders and the Board. He shall have charge of the corporate seal and have
authority to attest any and all instruments or writings to which the same may be
affixed. He shall keep and account for all books, documents, papers and records
of the Corporation except those for which some other officer or agent is
properly accountable. He shall have authority to sign stock certificates and
shall generally perform all the duties usually appertaining to the office of
secretary of a corporation. In the absence or disability of the Secretary, his
duties shall be performed and his powers may be exercised by the Assistant
Secretaries in the order of their seniority, unless otherwise determined by the
Secretary, the Chairman of the Board, the Chief Executive Officer, the Chief
Operating Officer, the President, the Board of Directors, or the Executive
Committee.
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<PAGE>
Section 5.16. ASSISTANT SECRETARIES. Each Assistant Secretary shall
generally assist the Secretary and shall have such powers and perform such
duties and services as shall from time to time be prescribed or delegated to him
by the Secretary, the Chairman of the Board, the Chief Executive Officer, the
Chief Operating Officer, the President, the Board of Directors or the Executive
Committee.
Section 5.17. ADDITIONAL POWERS AND DUTIES. In addition to the foregoing
especially enumerated duties, services, and powers, the several elected and
appointive officers of the Corporation shall perform such other duties and
services and exercise such further powers as may be provided by statute, the
Articles of Incorporation or these Bylaws or as the Board of Directors or the
Executive Committee may from time to time determine or as may be assigned to
them by any competent superior officer.
ARTICLE VI.
CERTIFICATES REPRESENTING SHARES
Section 6.01. CERTIFICATES. Certificates in such form as may be
determined by the Board of Directors shall be delivered representing all shares
to which shareholders are entitled. Such certificates shall be consecutively
numbered and shall be entered in the books of the Corporation as they are
issued. Each certificate shall state on the face thereof the holder's name, the
number and class of shares, and the par value of such shares or a statement that
such shares are without par value. They shall be signed by the President or a
Vice President and the Secretary or an Assistant Secretary and may be sealed
with the seal of the Corporation or a facsimile thereof. If any certificate is
countersigned by a transfer agent, or an assistant transfer agent or registered
by a registrar, other than the Corporation or an employee of the Corporation,
the signature of any such officer may be facsimile. Shares may not be issued
until the full amount of the consideration, fixed as provided by law, has been
paid.
Section 6.02. LOST CERTIFICATES. The Board of Directors may direct a new
certificate representing shares to be issued in place of any certificate
theretofore issued by the Corporation alleged to have been lost or destroyed,
upon the making of an affidavit of that fact by the person claiming the
certificate to be lost or destroyed. When authorizing such issue of a new
certificate, the Board of Directors, in its discretion and as a condition
precedent to the issuance thereof, may require the owner of such lost or
destroyed certificate, or such owner's legal representative, to advertise the
same in such manner as it shall require and/or give the Corporation a bond in
such form, in such sum, and with such surety or sureties as it may direct as
indemnity against any claim that may be made against the Corporation with
respect to the certificate alleged to have been lost or destroyed.
Section 6.03. TRANSFER OF SHARES. Except as is otherwise provided in
these Bylaws, shares of stock shall be transferable only on the books of the
Corporation by the holder thereof in person or by such holder's duly authorized
attorney. Upon surrender to the Corporation or the transfer agent of the
Corporation of a certificate representing shares duly endorsed or accompanied by
-10-
<PAGE>
proper evidence of succession, assignment or authority to transfer, it shall be
the duty of the Corporation or the transfer agent of the Corporation to issue a
new certificate to the person entitled thereto, cancel the old certificate and
record the transaction upon its books.
Section 6.04. REGISTERED SHAREHOLDERS. Unless otherwise provided by
statute, the Corporation may regard the person in whose name any shares issued
by the Corporation are registered in the share transfer records of the
Corporation at any particular time (including, without limitation as of a record
date fixed pursuant to Sections 6.05 and 6.06) as the owner of those shares at
that time for purposes of voting those shares, receiving distributions thereon
or notices in respect thereof, transferring those shares, exercising rights of
dissent with respect to those shares, exercising or waiving any preemptive right
with respect to those shares, entering into agreements with respect to those
shares in accordance with the Texas Business Corporation Act or giving proxies
with respect to those shares. Neither the Corporation nor any of its officers,
Directors, employees or agents shall be liable for regarding that person as the
owner of those shares at that time for those purposes, regardless of whether
that person possesses a certificate for those shares.
Section 6.05. FIXING RECORD DATE FOR MATTERS OTHER THAN CONSENTS TO
ACTION. For the purpose of determining shareholders entitled to notice of or to
vote at any meeting of shareholders or any adjournment thereof, or entitled to
receive a distribution by the Corporation (other than a distribution involving a
purchase or redemption by the Corporation of any of its own shares) or a share
dividend, or in order to make a determination of shareholders for any other
proper purpose (other than determining shareholders entitled to consent to
action by shareholders proposed to be taken without a meeting of shareholders),
the Board of Directors may provide that the share transfer records shall be
closed for a stated period but not to exceed, in any case, sixty (60) days. If
the share transfer records shall be closed for the purpose of determining
shareholders entitled to notice of or to vote at a meeting of shareholders, such
records shall be closed for at least ten (10) days immediately preceding such
meeting. In lieu of closing the share transfer records, the Board of Directors
may fix in advance a date as the record date for any such determination of
shareholders, such date in any case to be not more than sixty (60) days, and, in
the case of a meeting of shareholders, not less than ten (10) days, prior to the
date on which the particular action requiring such determination of shareholders
is to be taken. If the share transfer records are not closed and no record date
is fixed for the determination of shareholders entitled to notice of or to vote
at a meeting of shareholders, or shareholders entitled to receive a distribution
(other than a distribution involving a purchase or redemption by the Corporation
of any of its own shares) or a share dividend, the date on which such notice of
the meeting is mailed or the date on which the resolution of the Board of
Directors declaring such distribution or share dividend is adopted, as the case
may be, shall be the record date for such determination of shareholders. When a
determination of shareholders entitled to vote at any meeting of shareholders
has been made as provided in this Section, such determination shall apply to any
adjournment thereof, except where the determination has been made through the
closing of the share transfer records and the stated period of closing has
expired.
Section 6.06. FIXING RECORD DATE FOR CONSENTS TO ACTION. Unless a record
date shall have previously been fixed or determined pursuant to this Article VI,
whenever action by shareholders
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<PAGE>
is proposed to be taken by consent in writing without a meeting of
shareholders, the Board of Directors may fix a record date for the purpose of
determining shareholders entitled to consent to that action, which record date
shall not precede, and shall not be more than ten (10) days after, the date
upon which the resolution fixing the record date is adopted by the Board of
Directors. If no record date has been fixed by the Board of Directors and the
prior action of the Board of Directors is not required by the Texas Business
Corporation Act, the record date for determining shareholders entitled to
consent to action in writing without a meeting shall be the first date on
which a signed written consent setting forth the action taken or proposed to
be taken is delivered to the Corporation by delivery to its registered office,
its principal place of business, or an officer or agent of the Corporation
having custody of the books in which proceedings of meetings of shareholders
are recorded. Delivery shall be by hand or by certified or registered mail,
return receipt requested. Delivery to the Corporation's principal place of
business shall be addressed to the President or the principal executive
officer of the Corporation. If no record date shall have been affixed by the
Board of Directors and prior action of the Board of Directors is required by
statute, the record date for determining shareholders entitled to consent to
action in writing without a meeting shall be at the close of business on the
date on which the Board of Directors adopts resolution taking such prior
action.
Section 6.07. DISTRIBUTION HELD IN SUSPENSE. Distributions made by the
Corporation, including those that were payable but not paid to a holder of
shares or to such holder's heirs, successors or assigns, and have been held in
suspense by the Corporation or were paid or delivered by it into an escrow
account or to a trustee or custodian, shall be payable by the Corporation,
escrow agent, trustee or custodian to the holder of the shares as of the record
date determined for that distribution as provided in Section 6.05, or to such
holder's heirs, successors or assigns.
Section 6.08. JOINT OWNERS OF SHARES. When shares are registered on the
books of the Corporation in the names of two (2) or more persons as joint owners
with the right of survivorship, after the death of a joint owner and before the
time that the Corporation receives actual written notice that parties other than
the surviving joint owner or owners claim an interest in the shares or any
distributions thereon, the Corporation may record on its books and otherwise
effect the transfer of those shares to any person, firm, or Corporation
(including that surviving joint owner individually) and pay any distributions
made in respect of those shares, in each case as if the surviving joint owner or
owners were the absolute owners of the shares. The Corporation permitting such
a transfer by and making any distribution to such a surviving joint owner or
owners before the receipt of written notice from other parties claiming an
interest in those shares or distributions is discharged from all liability for
the transfer or payment so made; provided, however, that the discharge of the
Corporation from liability and the transfer of full legal and equitable title of
the shares in no way affects, reduces, or limits any cause of action existing in
favor of any owner of an interest in those shares or distributions against the
surviving owner or owners.
-12-
<PAGE>
ARTICLE VII.
GENERAL PROVISIONS
Section 7.01. DISTRIBUTIONS. Distributions upon the outstanding shares of
the Corporation, subject to the provisions of the Articles of Incorporation, may
be declared by the Board of Directors at any regular or special meeting.
Distributions may be paid in cash, in property or in shares of the Corporation,
subject to the provisions of the statutes and the Articles of Incorporation.
Section 7.02. RESERVES. There may be created by resolution of the Board
of Directors out of the surplus of the Corporation such reserve or reserves as
the Directors from time to time, in their discretion, think proper to provide
for contingencies, or to equalize distributions, or to repair or maintain any
property of the Corporation, or for such other purposes as the Board of
Directors shall think beneficial to the Corporation, and the Board of Directors
may modify or abolish any such reserve in the manner in which it was created.
Section 7.03. CHECKS. All checks or demands for money and notes of the
Corporation shall be signed by such officer or officers or such other person or
persons as the Board of Directors may from time to time designate.
Section 7.04. FISCAL YEAR. The fiscal year of the Corporation shall be
fixed by resolution of the Board of Directors.
Section 7.05. SEAL. The corporate seal shall be kept in the safe custody
of the Secretary of the Corporation and shall have inscribed thereon the name of
the Corporation and may be in such form as the Board of Directors may determine.
Said seal may be used by causing it or a facsimile thereof to be impressed or
affixed or reproduced or otherwise.
Section 7.06. INDEMNIFICATION. The Corporation shall have the authority
to and shall indemnify and advance expenses to the Directors, officers,
employees, agents of the Corporation or any other persons serving at the request
of the Corporation in such capacities in a manner and to the maximum extent
permitted by applicable state or federal law. The Corporation may purchase and
maintain liability insurance or make other arrangements for such obligations to
the extent permitted by the Texas Business Corporation Act.
Section 7.07. TRANSACTIONS WITH DIRECTORS AND OFFICERS. No contract or
transaction between the Corporation and one (1) or more of its Directors or
officers, or between the Corporation and any other Corporation, partnership,
association, or other organization in which one (1) or more of its directors or
officers are Directors or officers or have a financial interest, shall be void
or voidable solely for this reason, solely because the Director or officer is
present at or participates in the meeting of the Board of Directors or committee
thereof that authorizes the contract or transaction, or solely because his, her,
its or their votes are counted for such purpose, if:
(1) The material facts as to such person's relationship or interest
and as to the contract or transaction are disclosed or are known to the
Board of Directors or the
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<PAGE>
committee, and the Board of Directors or committee in good faith authorizes
the contract or transaction by the affirmative vote of a majority of the
disinterested Directors, even though the disinterested Directors be less
than a quorum; or
(2) The material facts as to such person's relationship or interest
and as to the contract or transaction are disclosed or are known to the
shareholders entitled to vote thereon, and the contract or transaction is
specifically approved in good faith by vote of the shareholders; or
(3) The contract or transaction is fair as to the Corporation as of
the time it is authorized, approved or ratified by the Board of Directors,
a committee thereof, or the shareholders.
Common or interested Directors may be counted in determining the presence of a
quorum at a meeting of the Board of Directors or of a committee that authorizes
the contract or transaction.
Section 7.08. AMENDMENTS. The Board of Directors may amend or repeal the
Bylaws of the Corporation or adopt new Bylaws, unless: (1) the Articles of
Incorporation or the Texas Business Corporation Act reserves the power
exclusively to the shareholders in whole or part; or (2) the shareholders in
amending, repealing or adopting a particular bylaw expressly provide that the
Board of Directors may not amend or repeal that bylaw. Unless the Articles of
Incorporation or a bylaw adopted by the shareholders provides otherwise as to
all or some portion of the Bylaws, the shareholders may amend, repeal or adopt
the Bylaws even though the Bylaws may also be amended, repealed or adopted by
the Board of Directors.
Section 7.09. TABLE OF CONTENTS; HEADINGS. The Table of Contents and
headings used in these Bylaws have been inserted for convenience only and do not
constitute matters to be construed in interpretation.
CERTIFICATE BY ASSISTANT SECRETARY
The undersigned, being the Assistant Secretary of the Corporation, hereby
certifies that the foregoing code of Bylaws was duly adopted by the Director of
said Corporation effective on March __, 1995.
/s/ SYLVIA GRIFFIN
----------------------------------
Assistant Secretary
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<PAGE>
AMENDMENTS TO THE BYLAWS
OF
AMX CORPORATION
(the "Corporation")
1. The following Amendments to Sections 5.08, 5.09, 5.10 and 5.11 of the
Bylaws was adopted by the Board of Directors of the Corporation on
September 11, 1995.
RESOLVED, that Sections 5.08, 5.09, 5.10 and 5.11 of the Bylaws
of the Corporation be amended, changed and altered so as to read in
their entirety as follows:
"Section 5.08. CHIEF EXECUTIVE OFFICER. The Board of
Directors may, but shall not be required to, elect a Chief
Executive Officer. If so elected, the Chief Executive
Officer shall preside at all meetings of the shareholders
and the Board of Directors unless the Board shall choose to
elect a Chairman of the Board, in which event the Chief
Executive Officer shall preside at Board of Directors'
meetings in the absence of the Chair of the Board of
Directors. The Chief Executive Officer shall have general
and active management of the business and affairs of the
Corporation, shall see that all orders and resolutions of
the Board are carried into effect, and shall perform such
other duties as the Board of Directors shall prescribe.
Such duties shall be performed by the President of the
Corporation if the Board of Directors does not elect a Chief
Executive Officer.
Section 5.09. CHIEF OPERATING OFFICER. The Board of
Directors may, but shall not be required to, elect a Chief
Operating Officer. If so elected, the Chief Operating
Officer shall have general and active management of the day-
to-day operations of the Corporation and shall perform such
other duties as the Board of Directors shall prescribe.
Such duties shall be performed by the President of the
Corporation if the Board of Directors does not elect a Chief
Operating Officer.
Section 5.10. CHIEF FINANCIAL OFFICER. The Board of
Directors may, but shall not be required to, elect a Chief
Financial Officer. If so elected, the Chief Financial
Officer shall have principal responsibility for the
financial, tax and accounting affairs of the Corporation and
shall discharge such specific responsibilities in connection
therewith, including, without limitation, preparation of
periodic financial statements of the Corporation, as may be
assigned
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<PAGE>
to such person from time to time by the Board of Directors,
the Chief Executive Officer, the Chief Operating Officer or
the President. Such duties shall be performed by the Treasurer
of the Corporation if the Board of Directors does not elect a
Chief Financial Officer.
Section 5.11. PRESIDENT. The President shall have general
powers of oversight, supervision and management of the
business and affairs of the Corporation. The President
shall see that all orders and resolutions of the Board of
Directors are carried into effect. The President shall have
such other powers and duties as usually pertain to such
office or as may be prescribed by the Board of Directors.
The President shall execute bonds, mortgages, instruments,
contracts, agreements, and other documentation, except where
the signing and execution thereof shall be expressly
delegated by the Board of Directors to some other officer or
agent of the Corporation."
RESOLVED FURTHER, that the remaining terms and provisions of the
Bylaws shall continue as originally adopted.
/s/ PETER D. YORK
----------------------------------
Peter D. York, Secretary
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<PAGE>
JULY 11, 1997 AMENDMENT TO THE BYLAWS
OF
AMX CORPORATION
(the "Corporation")
1. The following Amendment to Section 3.02 of the Bylaws was adopted by the
Board of Directors of the Corporation as of July 11, 1997.
RESOLVED, that the first sentence of Section 3.02 of the Bylaws was
amended by the Board of Directors of the Corporation as of July 11, 1997 as
set forth below with the remainder of Section 3.02 being unaltered.
"Section 3.02. NUMBER; ELECTION. The Directors of the
Corporation shall consist of not less than one (1) Director,
as determined from time to time by resolution of the
Shareholders or the Directors of the Corporation. Directors
need not be shareholders or residents of the State of Texas.
The Directors shall be elected at the annual meeting of the
shareholders by the holders of shares entitled to vote in
the election of Directors and, except as hereinafter
provided, each Director elected shall hold office for the
term for which such Director is elected and until such
Director's successor shall have been elected and shall
qualify."
RESOLVED FURTHER, that the remaining terms and provisions of the Bylaws
shall continue as previously adopted.
/s/ PETER D. YORK
----------------------------------
Peter D. York, Secretary
-17-
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