10-Q

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 quarter ended March 29, 2002
	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: 33-96858-01	Commission File Number: 33-96858
COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION	COMMUNICATIONS & POWER INDUSTRIES, INC

(Exact name of registrant as specified in its charter) Delaware (State of Incorporation)	(Exact name of registrant as specified in its charter) Delaware (State of Incorporation)
77-0407395	77-0405693
(I.R.S. employer identification number) 811 Hansen Way	(I.R.S. employer identification number) 811 Hansen Way
Palo Alto, California 94303-1110 (650) 846-2900	Palo Alto, California 94303-1110 (650) 846-2900
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices) Securities registered pursuant to Section 12(b) of the Act:	(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices) Securities registered pursuant to Section 12(b) of the Act:
None Securities registered pursuant to Section 12(g) of the Act:	None Securities registered pursuant to Section 12(g) of the Act:
None	None

Indicate by check mark whether each 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 .

APPLICABLE ONLY TO CORPORATE ISSUERS:

     Indicate the number of shares outstanding for each of the Registrant’s classes of Common Stock, as of the latest practicable date: Communications & Power Industries Holding Corporation: 4,908,172 shares of Common Stock, $.01 par value, at May 6, 2002. Communications & Power Industries, Inc.: 1 share of Common Stock, $.01 par value, at May 6, 2002.

TABLE OF CONTENTS

		COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION CONSOLIDATED CONDENSED BALANCE SHEETS
		COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION STATEMENTS OF OPERATIONS
		COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION STATEMENTS OF OPERATIONS
		COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION STATEMENTS OF CASH FLOWS
		COMMUNICATIONS & POWER INDUSTRIES, INC., CONSOLIDATED CONDENSED BALANCE SHEETS
		COMMUNICATIONS & POWER INDUSTRIES, INC., STATEMENTS OF OPERATIONS
		COMMUNICATIONS & POWER INDUSTRIES, INC., STATEMENTS OF OPERATIONS
		COMMUNICATIONS & POWER INDUSTRIES, INC., STATEMENTS OF CASH FLOWS
	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
	PART II: OTHER INFORMATION
SIGNATURES
EXHIBIT INDEX
Exhibit 3.2

COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

COMMUNICATIONS & POWER INDUSTRIES INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries Holding Corporation)

PART I: FINANCIAL INFORMATION
ITEM 1: CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
	COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
		Consolidated Condensed Balance Sheets, March 29, 2002 and September 28, 2001	2
		Consolidated Condensed Statements of Operations for the 13-week periods ended March 29, 2002 and March 30, 2001	3
		Consolidated Condensed Statements of Operations for the 26-week periods ended March 29, 2002 and March 30, 2001	4
		Consolidated Condensed Statements of Cash Flows for the 26-week periods March 29, 2002 and March 30, 2001	5
		Notes to Consolidated Condensed Financial Statements	10
	COMMUNICATIONS & POWER INDUSTRIES, INC.
		Consolidated Condensed Balance Sheets, March 29, 2002 and September 28, 2001	6
		Consolidated Condensed Statements of Operations for the 13-week periods ended March 29, 2002 and March 30, 2001	7
		Consolidated Condensed Statements of Operations for the 26-week periods ended March 29, 2002 and March 30, 2001	8
		Consolidated Condensed Statements of Cash Flows for the 26-week periods March 29, 2002 and March 30, 2001	9
		Notes to Consolidated Condensed Financial Statements	10
ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			13
PART II: OTHER INFORMATION			20
SIGNATURES			21

-1-

COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands-unaudited)

			March 29,			September 28,
ASSETS			2002			2001
Current Assets
	Cash and cash equivalents		$	3,803		$	2,903
	Accounts receivable, net			37,057			46,738
	Inventories			47,930			57,678
	Deferred taxes			1,750			3,500
	Other current assets			1,470			2,241
Total current assets				92,010			113,060
Property, plant, and equipment, net				58,922			62,698
Goodwill and other intangibles, net				23,574			23,452
Debt issue costs, net				3,989			4,857
Total assets			$	178,495		$	204,067
		LIABILITIES, PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT
Current Liabilities
	Revolving credit facility		$	3,506		$	21,293
	Current portion of capital leases			449			919
	Mortgage financing			18,000			18,000
	Senior term loans			20,000			20,000
	Accounts payable			14,177			14,729
	Accrued expenses			14,308			17,859
	Product warranty			4,135			4,225
	Income taxes payable			1,103			407
	Accrued dividends payable			6,873			4,387
	Advance payments from customers			8,212			9,193
Total current liabilities				90,763			111,012
Senior subordinated notes				100,000			100,000
Obligations under capital leases				40			90
Total liabilities				190,803			211,102
Senior Redeemable Preferred Stock of Subsidiary				28,586			28,479
Junior Preferred Stock of Subsidiary				23,715			22,094
Commitments and contingencies
Stockholders’ Deficit
	Common stock			49			49
	Additional paid-in capital			19,111			19,111
	Accumulated deficit			(82,567	)		(75,587	)
	Stockholder loans			(1,202	)		(1,181	)
Net stockholders’ deficit				(64,609	)		(57,608	)
Total liabilities, preferred stock and stockholders’ deficit			$	178,495		$	204,067

See accompanying notes to the unaudited consolidated condensed financial statements.

-2-

COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

CONSOLIDATED CONDENSED
STATEMENTS OF OPERATIONS
(in thousands — unaudited)

				13-Week			13-Week
				period ended			period ended
				March 29,			March 30,
				2002			2001
	Sales			$	60,612		$	66,570
	Cost of sales				47,666			53,947
	Gross profit				12,946			12,623
	Operating costs and expenses:
			Research and development		1,517			1,541
			Selling and marketing		3,639			4,415
			General and administrative		4,556			5,776
	Total operating costs and expenses				9,712			11,732
	Operating income				3,234			891
	Gain on sale of property, plant and equipment				—			887
	Interest expense				(3,814	)		(5,364	)
	Loss before taxes				(580	)		(3,586	)
	Income tax expense				1,153			250
	Net loss				(1,733	)		(3,836	)
Preferred dividends:
		Senior redeemable preferred stock			1,292			1,077
		Junior preferred stock			824			718
Net loss attributable to common stock				$	(3,849	)	$	(5,631	)

See accompanying notes to the unaudited consolidated condensed financial statements.

-3-

COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

CONSOLIDATED CONDENSED
STATEMENTS OF OPERATIONS
(in thousands — unaudited)

				26-Week			26-Week
				period ended			period ended
				March 29,			March 30,
				2002			2001
	Sales			$	126,840		$	126,946
	Cost of sales				99,735			101,525
	Gross profit				27,105			25,421
	Operating costs and expenses:
			Research and development		2,772			2,929
			Selling and marketing		7,585			8,327
			General and administrative		9,143			10,262
	Total operating costs and expenses				19,500			21,518
	Operating income				7,605			3,903
	Gain on sale of property, plant and equipment				—			887
	Interest expense				(8,539	)		(10,531	)
	Loss before taxes				(934	)		(5,741	)
	Income tax expense				1,833			500
	Net loss				(2,767	)		(6,241	)
Preferred dividends:
		Senior redeemable preferred stock			2,486			2,118
		Junior preferred stock			1,620			1,412
Net loss attributable to common stock				$	(6,873	)	$	(9,771	)

See accompanying notes to the unaudited consolidated condensed financial statements.

-4-

COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

CONSOLIDATED CONDENSED
STATEMENTS OF CASH FLOWS
(in thousands — unaudited)

		26-Week			26-Week
		period ended			period ended
		March 29,			March 30,
		2002			2002
OPERATING ACTIVITIES
	Net cash provided by (used in) operating activities	$	20,579		$	(4,527	)
INVESTING ACTIVITIES
	Proceeds from sale of property, plant and equipment		—			1,922
	Purchase of property, plant and equipment, net		(1,372	)		(2,332	)
	Net cash used in investing activities		(1,372	)		(410	)
FINANCING ACTIVITIES
	Repayments on capital leases		(520	)		(348	)
	Payment of debt issue costs		—			(2,153	)
	Repayment of terminated revolving credit facility		—			(40,000	)
	(Repayment) proceeds from revolving credit facility		(17,787	)		24,305
	Repayments on terminated senior term loans		—			(16,049	)
	Proceeds from senior term loan		—			20,000
	Proceeds from mortgage financing		—			18,000
	Net cash (used in) provided by financing activities		(18,307	)		3,755
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS			900			(1,182	)
Cash and cash equivalents at beginning of period			2,903			4,766
Cash and cash equivalents at end of period		$	3,803		$	3,584

See accompanying notes to the unaudited consolidated condensed financial statements.

-5-

COMMUNICATIONS & POWER INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries Holding Corporation)

CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands-unaudited)

				March 29,			September 28,
ASSETS				2002			2001
Current Assets
	Cash and cash equivalents			$	3,803		$	2,903
	Accounts receivable, net				37,057			46,738
	Inventories				47,930			57,678
	Deferred taxes				1,750			3,500
	Other current assets				1,470			2,241
Total current assets					92,010			113,060
Property, plant, and equipment, net					45,219			48,672
Goodwill and other intangibles, net					23,574			23,452
Debt issue costs, net					3,963			4,715
Note receivable from parent					5,750			5,750
Total assets				$	170,516		$	195,649
			LIABILITIES, REDEEMABLE
		PREFERRED STOCK AND DEFICIT
Current Liabilities
	Revolving credit facility			$	3,506		$	21,293
	Current portion of capital leases				449			919
	Senior term loans				20,000			20,000
	Accounts payable				14,177			15,175
	Accrued expenses				15,418			18,196
	Product warranty				4,135			4,225
	Income taxes payable				1,103			407
	Accrued dividends				6,873			4,387
	Advance payments from customers				8,212			9,193
Total current liabilities					73,873			93,795
Senior subordinated notes					100,000			100,000
Deferred income on sale-leaseback					7,523			7,735
Obligations under capital leases					40			90
Total liabilities					181,436			201,620
Senior Redeemable Preferred Stock					28,586			28,479
Commitments and contingencies
Stockholders’ Deficit:
	Junior preferred stock				2			2
	Common stock				—			—
	Additional paid-in capital				42,872			41,252
	Accumulated deficit				(81,178	)		(74,523	)
	Stockholder loans				(1,202	)		(1,181	)
Net stockholders’ deficit					(39,506	)		(34,450	)
Total liabilities, senior redeemable preferred stock and stockholders’ deficit				$	170,516		$	195,649

See accompanying notes to the unaudited consolidated condensed financial statements.

-6-

COMMUNICATIONS & POWER INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries Holding Corporation)

CONSOLIDATED CONDENSED
STATEMENTS OF OPERATIONS
(in thousands — unaudited)

				13-Week			13-Week
				period ended			period ended
				March 29,			March 30,
				2002			2001
	Sales			$	60,612		$	66,570
	Cost of sales				47,666			53,947
	Gross profit				12,946			12,623
	Operating costs and expenses:
			Research and development		1,517			1,541
			Selling and marketing		3,639			4,415
			General and administrative		4,898			6,062
	Total operating costs and expenses				10,054			12,018
	Operating income				2,892			605
	Gain on sale of property, plant and equipment				—			887
	Interest expense				(3,329	)		(4,636	)
	Loss before taxes				(437	)		(3,144	)
	Income tax expense				1,323			250
	Net loss				(1,760	)		(3,394	)
Preferred dividends:
		Senior redeemable preferred stock			1,292			1,077
		Junior preferred stock			824			718
Net loss attributable to common stock				$	(3,876	)	$	(5,189	)

See accompanying notes to the unaudited consolidated condensed financial statements.

-7-

COMMUNICATIONS & POWER INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries Holding Corporation)

CONSOLIDATED CONDENSED
STATEMENTS OF OPERATIONS
(in thousands — unaudited)

				26-Week			26-Week
				period ended			period ended
				March 29,			March 30,
				2002			2001
	Sales			$	126,840		$	126,946
	Cost of sales				99,735			101,525
	Gross profit				27,105			25,421
	Operating costs and expenses:
			Research and development		2,772			2,929
			Selling and marketing		7,585			8,327
			General and administrative		9,831			10,537
	Total operating costs and expenses				20,188			21,793
	Operating income				6,917			3,628
	Gain on sale of property, plant and equipment				—			887
	Interest expense				(7,526	)		(9,723	)
	Loss before taxes				(609	)		(5,208	)
	Income tax expense				1,833			500
	Net loss				(2,442	)		(5,708	)
Preferred dividends:
		Senior redeemable preferred stock			2,486			2,118
		Junior preferred stock			1,620			1,412
Net loss attributable to common stock				$	(6,548	)	$	(9,238	)

See accompanying notes to the unaudited consolidated condensed financial statements.

-8-

COMMUNICATIONS & POWER INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries Holding Corporation)

CONSOLIDATED CONDENSED
STATEMENTS OF CASH FLOWS
(in thousands — unaudited)

		26-Week			26-Week
		period ended			period ended
		March 29,			March 30,
		2002			2001
OPERATING ACTIVITIES
	Net cash provided by (used in) operating activities	$	20,579		$	(4,677	)
INVESTING ACTIVITIES
	Proceeds from sale of property to parent		—			17,250
	Proceeds from sale of property, plant and equipment					1,922
	Purchase of property, plant and equipment, net		(1,372	)		(2,332	)
	Net cash (used in) provided by investing activities		(1,372	)		16,840
FINANCING ACTIVITIES
	Repayments on capital leases		(520	)		(348	)
	Payment of debt issue costs		—			(1,709	)
	Repayments of terminated revolving credit facility		—			(40,000	)
	(Repayments) proceeds from revolving credit facility		(17,787	)		24,305
	Repayments of terminated senior term loans		—			(16,049	)
	Proceeds from senior term loan		—			20,000
	Net cash used by financing activities		(18,307	)		(13,801	)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS			900			(1,638	)
Cash and cash equivalents at beginning of period			2,903			4,766
Cash and cash equivalents at end of period		$	3,803		$	3,128

See accompanying notes to the unaudited consolidated condensed financial statements.

-9-

COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

COMMUNICATIONS & POWER INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries Holding Corporation)

NOTES TO CONSOLIDATED
CONDENSED FINANCIAL STATEMENTS
(unaudited)

1. Basis of Presentation

     The accompanying unaudited consolidated condensed financial statements of Communications & Power Industries Holding Corporation (“Holding”) and Communications & Power Industries, Inc. (“CPI”, both companies together referred to as the “Company”) have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in annual financial statements have been condensed or omitted and, accordingly, these financial statements should be read in conjunction with the financial statements and the notes thereto contained in the Company’s September 28, 2001 Annual Report on Form 10-K. Management believes that these unaudited interim condensed financial statements contain all adjustments, all of which are of a normal recurring nature, necessary to present fairly the financial position of the Company, and its results of operations and cash flows for the interim period presented. The results for the interim periods reported are not necessarily indicative of the results for the complete fiscal year 2002.

2. Inventories

     Inventories are stated at the lower of average cost or market (net realizable value). The main components of inventories are as follows:

(Dollars in thousands)	March 29, 2002		September 28, 2001
Raw materials and parts	$	35,730	$	40,776
Work in process		8,973		14,874
Finished goods		3,227		2,028
Total inventories	$	47,930	$	57,678

3. Supplemental Cash Flow Information

	Holding				CPI
	26-Week Period Ended				26-Week Period Ended
	March 29,		March 30,		March 29,		March 30,
(In millions)	2002		2001		2002		2001
Cash Payments
Interest payments	$	8.2	$	10.0	$	7.7	$	9.7
Tax payments	$	0.5	$	0.6	$	0.5	$	0.6
Non-cash Financing
Unpaid cash dividends on senior preferred stock	$	2.5	$	2.1	$	2.5	$	2.1

-10-

COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

COMMUNICATIONS & POWER INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries Holding Corporation)

4. Segments and Related Information

     The Company has two reportable segments: vacuum electronic devices (“VEDs”) and satcom equipment. The CEO, identified as the Chief Operating Decision Maker, evaluates performance and allocates resources based on the Company’s principal performance measure; earnings before income taxes, interest, depreciation and amortization (“EBITDA”).

     Summarized financial information concerning the Company’s reportable segments is shown in the following table. Included in the “Other” column is financial information for the Company’s Solid State Products Division, which did not meet the quantitative thresholds, and certain unallocated corporate-level operating expenses. Intersegment product transfers are recorded at cost.

			Satcom
(Dollars in thousands)	VED's		Equipment			Other			Total
For the 13-Week Period Ended March 29, 2002:
Revenues from external customers	$	47,530	$	11,044		$	2,038		$	60,612
Intersegment product transfers		2,610		—			550			3,160
EBITDA — Holding		8,116		(54	)		(1,866	)		6,196
EBITDA — CPI		8,116		(54	)		(2,369	)		5,693
For the 13-Week Period Ended March 30, 2001:
Revenues from external customers	$	48,700	$	15,551		$	2,319		$	66,570
Intersegment product transfers		4,469		—			284			4,753
EBITDA — Holding		7,621		(599	)		(1,918	)		5,104
EBITDA — CPI		7,621		(599	)		(2,366	)		4,656
For the 26-Week Period Ended March 29, 2002:
Revenues from external customers	$	98,859	$	26,905		$	1,076		$	126,840
Intersegment product transfers		4,869		—			626			5,495
EBITDA — Holding		16,189		227			(2,755	)		13,661
EBITDA — CPI		16,189		227			(3,767	)		12,649
For the 26-Week Period Ended March 30, 2001:
Revenues from external customers	$	96,044	$	27,067		$	3,835		$	126,946
Intersegment product transfers		8,740		—			698			9,438
EBITDA — Holding		15,081		(661	)		(2,968	)		11,452
EBITDA — CPI		15,081		(661	)		(3,416	)		11,004

-11-

COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

COMMUNICATIONS & POWER INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries Holding Corporation)

     A reconciliation of EBITDA from reportable segments to Loss before Taxes is as follows:

	Holding						CPI
	13-Week Period Ended						13-Week Period Ended
(Dollars in thousands)	March 29, 2002			March 30, 2001			March 29, 2002			March 30, 2001
Segment EBITDA	$	6,196		$	5,104		$	5,693		$	4,656
Less:
Depreciation and amortization		2,962			3,326			2,801			3,164
Interest expense		3,814			5,364			3,329			4,636
Loss before taxes	$	(580	)	$	(3,586	)	$	(437	)	$	(3,144	)

	Holding						CPI
	26 -Week Period Ended						26 -Week Period Ended
(Dollars in thousands)	March 29, 2002			March 30, 2001			March 29, 2002			March 30, 2001
Segment EBITDA	$	13,661		$	11,452		$	12,649		$	11,004
Less:
Depreciation and amortization		6,056			6,662			5,732			6,489
Interest expense		8,539			10,531			7,526			9,723
Loss before taxes	$	(934	)	$	(5,741	)	$	(609	)	$	(5,208	)

     Sales by geographic area to unaffiliated customers (based on the location of customer) are as follows:

(Dollars in thousands)	13 - Week Period Ended				26 - Week Period Ended
	March 29,		March 30,		March 29,		March 30,
	2002		2001		2002		2001
United States	$	42,972	$	47,491	$	92,789	$	88,671
All foreign countries		17,640		19,079		34,051		38,275
Total Sales	$	60,612	$	66,570	$	126,840	$	126,946

     CPI has a single customer that accounts for 10% or more of consolidated sales. Sales to this customer were $10.3 million and $11.1 million of the Company’s consolidated sales for the 13-week period ended March 29, 2002 and March 30, 2001, respectively. Sales to this customer were $20.3 million and $21.0 million of the Company’s consolidated sales for the 26-week period ended March 29, 2002 and March 30, 2001, respectively. A substantial majority of these sales were VED segment products, but this customer also purchased satcom equipment products.

-12-

COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

COMMUNICATIONS & POWER INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries Holding Corporation)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     The following discussion reflects the condensed consolidated results of Communications & Power Industries Holding Corporation, which are materially consistent with those of CPI except as identified below and should be read in conjunction with the condensed consolidated financial statements and notes thereto:

CRITICAL ACCOUNTING POLICIES

     Management is required to make judgements, assumptions and estimates in preparing its financial statements and related disclosures in conformity with accounting principles generally accepted in the United States. The Company’s significant accounting policies are described in Note 2 to the Consolidated Financial Statements in the Annual Report on Form 10-K for the fiscal year ended September 28, 2001. The following critical accounting policies are those policies that management believes can affect its financial statements materially and involves subjective assumptions, judgements, or estimates.

     Revenue is recognized on a sale to a customer when persuasive evidence of an arrangement exists, delivery has occurred, the price is fixed or determinable, and collectibility is reasonably assured. The Company monitors the creditworthiness of its customers and does not record revenue on sales if collection is not reasonably assured. The Company’s products are generally subject to warranties, and the Company provides for the estimated future costs of repair, replacement or customer accommodation at the time of sale as an additional cost of product.

     Inventories are stated at the lower of average cost or market. The carrying value of inventory is reduced for estimated obsolescence or unmarketable inventory based upon assumptions about future demand and market conditions. If actual demand were to be substantially lower than estimated, further write-downs could be required. While these estimates require management to make assumptions and judgements, management believes its understanding of the markets and customers the Company serves as well as the mature nature of many of the products the Company manufactures provides it with the ability to make reliable estimates. Management also evaluates the carrying value of inventory for lower of cost or market on an individual product or contract basis. Analyses are performed based on the estimated costs at completion and if necessary, a provision is recorded to properly reflect the product or contract at the lower of cost or net realizable value (selling price less estimated cost of disposal). If actual contract costs were to be substantially higher than estimated, further provisions could be required.

     The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of long-lived assets is measured by comparison of its carrying amount to future net cash flows expected to be generated from the operation and sale of long-lived assets. If such assets are considered to be impaired, the Company’s carrying value is reduced to its estimated fair value. Adverse changes in the customers and markets served by the Company could result in future impairments of long-lived assets.

-13-

COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

COMMUNICATIONS & POWER INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries Holding Corporation)

     Goodwill represents the excess of the purchase price over the fair value of the net assets acquired. The Company assesses the recoverability of the carrying amount of goodwill by determining whether the carrying amount of goodwill can be recovered through undiscounted net cash flows of the acquired operation over the remaining amortization period. If determined to be impaired, the carrying amount is reduced to its estimated fair value which is based on an estimate of discounted future net cash flows. Adverse changes in the industries served by the Company, customer demand or other market conditions could result in future impairments of goodwill.

RESULTS OF OPERATIONS

     The Company serves the communications, radar, electronic countermeasures, industrial, medical and scientific markets. In addition, the Company divides the communications market into applications for ground-based satellite uplinks for military and commercial uses (“satcom”) and broadcast sectors. The Company defines and discusses its orders and sales trends by the end markets to more clearly relate its business to outside investors. Internally, however, the Company is organized into six operating units that are differentiated based on products. Four of these operating units comprise the Company’s vacuum electronic device (“VED”) segment. The Company also has a satellite communications equipment unit, which is a separate segment, and a solid state products unit, which is not reported as a separate segment. Segment data for VED and satcom equipment segments are included in Note 4 of the Notes to Consolidated Condensed Financial Statements.

     Orders during the second quarter of Fiscal 2002 were $65.3 million as compared to $78.1 million for the second quarter of Fiscal 2001. This decrease of $12.8 million for the quarter primarily reflects a weakness in the commercial communications market (down $ 3.2 million) coupled with fluctuations in the timing of order receipts in other non-communication markets (down $ 9.6 million) when compared to the second quarter of Fiscal 2001. Orders for the first six months of Fiscal 2002 of $136.7 million were down approximately $9.2 million or 6.3% from the $145.9 million in the same period of Fiscal 2001. The decrease from Fiscal 2001 levels was expected and can primarily be attributed to the decrease in orders in the commercial communications market as communications companies continue to delay capital spending. The total of all other non-communication orders were essentially unchanged from the first six months of Fiscal 2001.

     When orders for the first six months of Fiscal 2002 are reviewed by specific market, radar and electronic countermeasures decreased by $2.9 million, and $3.6 million, respectively, from the comparable period last year due primarily to timing of order releases from quarter to quarter. The Company expects orders in the radar market to increase during the remainder of the year with the total for the year consistent with Fiscal 2001 figures. Industrial orders are also down approximately $3.0 million from the first six months of Fiscal 2001 due to lower demand resulting from weak economic conditions. Medical and scientific orders have increased from the first six months of Fiscal 2001 by $6.8 million and $2.5 million, respectively. Medical orders increased due to the receipt of a few large orders for VED’s used in the treatment of cancer. Although these orders reoccur annually, their timing was accelerated and their value has increased from the prior year. Scientific orders have increased on a year-to-date basis compared to

-14-

COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

COMMUNICATIONS & POWER INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries Holding Corporation)

Fiscal 2001 due primarily to the receipt of the final phase on an order from a government research laboratory. Overall, incoming order levels fluctuate significantly on a quarterly basis and a particular quarter’s order rate may not be indicative of future order levels. In addition, the Company’s sales are highly dependent upon manufacturing scheduling, performance and shipments and, accordingly, it is not possible to accurately predict when these orders will be recognized as sales.

     As of March 29, 2002, the Company had an order backlog of $158.7 million, representing approximately seven-and-a-half months of sales, compared to order backlog of $173.7 million, or approximately eight months of sales, as of March 30, 2001. Order backlog as of March 29, 2002 increased by $7.2 million from $151.5 million at the end of Fiscal 2001.

     Sales for the second quarter of Fiscal 2002 were $60.6 million, a decrease of $6.0 million, or 9.0%, from the same period in Fiscal 2001. This decrease was driven primarily by sales in the commercial communications and industrial markets. Sales for the first six months of Fiscal 2002 were $126.8 million, flat from the comparable period of Fiscal 2001. Although year-to-date sales were flat, the allocation between market segments has shifted. Sales in the commercial communications and industrial market decreased $4.8 million from the first six months of Fiscal 2001, while sales in the radar and scientific markets have increased by $5.8 million. Commercial communications and industrial sales have been negatively affected by lower demand in these markets. Sales in the radar and scientific markets have benefited from increased military and research spending. Medical and electronic countermeasures were down $0.4 million and $0.7 million, respectively, from the first six months of Fiscal 2001.

     Gross margin as a percentage of sales increased 2.4% to 21.4% for the second quarter of Fiscal 2002, compared with the second quarter of Fiscal 2001. The gross margin percentage also increased for the six month period from 20.0% of sales in Fiscal 2001 to 21.4% of sales in Fiscal 2002. Gross margins were negatively effected in Fiscal 2001 by start-up costs on several new satcom products. In addition, margin fluctuations are expected due to the mix of products sold during any period.

     Operating costs and expenses were $9.7 million, or 16.0% of sales, for the second quarter of Fiscal 2002 as compared to $11.7 million, or 17.6 % of sales, for the second quarter of Fiscal 2001. For the six months ended March 29, 2002, operating costs and expenses decreased $2.0 million compared with a year ago from $21.5 million or 17.0 % of sales in Fiscal 2001 to $19.5 million, or 15.4% of sales in Fiscal 2002. A portion of this decrease reflects a $1.1 million reduction in costs associated with the relocation of the Satcom Division operation from Palo Alto, California to the facility in Ontario, Canada for the first six months of Fiscal 2002 as compared to the comparable period of Fiscal 2001. The remainder of the decrease reflects the Company’s continuing efforts to reduce costs and improve operating efficiency.

     Earnings before interest, income taxes, depreciation and amortization (“EBITDA”)¹ for the second quarter of Fiscal 2002 were $6.2 million, or 10.2% of sales, compared to $5.1 million, or 7.7% of sales, for the second quarter of Fiscal 2001. EBITDA for the first six months of Fiscal 2002 were $13.7

¹ EBITDA is presented because some investors may use it as a financial indicator of the ability to service or incur indebtedness. EBITDA should not be considered as an alternative to net earnings (loss), as a measure of operating results, cash flows or liquidity.

-15-

COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

COMMUNICATIONS & POWER INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries Holding Corporation)

million, or 10.8% of sales, compared to $11.5 million, or 9.0% of sales, for the first six months of Fiscal 2001. This increase in EBITDA can be attributed to the improved margins coupled with the impact of lower operating costs.

     Income tax expense for the second quarter of Fiscal 2002 was $1.2 million compared to $0.3 million for the second quarter of Fiscal 2001. For the six months ended March 29, 2002, the income tax expense was $1.8 million compared to $0.5 million for the corresponding period of Fiscal 2001. The increase in income tax expense relates primarily to taxable income resulting from timing differences.

     Net loss was $1.7 million for the second quarter of Fiscal 2002 compared to a net loss of $3.8 million for the second quarter of Fiscal 2001. For the six months ended March 29, 2002, the net loss was $2.8 million compared to net loss of $6.2 million for the corresponding period of Fiscal 2001. The decrease in the net loss for both periods resulted from decreased operating costs and interest expense partially offset by the increase in income tax expense. Interest expense has decreased primarily as a result of lower interest rates and a reduction in outstanding debt.

     CPI’s operating results differ slightly from Holding due to a sale-leaseback transaction between CPI and Holding which took place in December 2000. In the first six months of Fiscal 2002, CPI’s net loss before taxes was $0.6 million, which was approximately $0.3 million lower than Holdings’ net loss before taxes of $0.9 million. As a result of this transaction, operating costs for CPI were approximately $0.7 million higher than those of Holding due to rental payments paid by CPI to Holding for use of the San Carlos facility offset by amortization of the deferred gain on the sales-leaseback and additional depreciation on the San Carlos facility. Interest expense, net, for CPI was approximately $1.0 million lower than that of Holding. The decrease primarily relates to the fact that Holding’s interest expense includes interest paid on the mortgage financing of the San Carlos facility. All other operations data for CPI is consistent with Holding’s for the second quarter of Fiscal 2002.

FINANCIAL CONDITION

     Cash flows provided by operating activities for the first six months of Fiscal 2002 were $20.6 million, compared with cash used in operating activities of $4.5 million during the first six months of Fiscal 2001. The positive cash flow was generated primarily from reductions in accounts receivable and inventories from Fiscal 2001 balances.

     Investing activities were comprised principally of investment in property, plant and equipment totaling $1.4 million for the first six months of Fiscal 2002. Purchases of property, plant and equipment decreased approximately $1.0 million from the comparable period of Fiscal 2001 as the Company continues to manage cash. The Company currently anticipates that capital expenditure requirements for Fiscal 2002 will be approximately $4.0 million, down slightly from amounts spent in Fiscal 2001 and 2000 for ongoing capital improvement requirements.

     Financing activities during the first six months of Fiscal 2002 were related to repayments on the Company’s secured credit facility (“Credit Facility”) of $17.8 million and repayments on capital leases of $0.5 million.

-16-

COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

COMMUNICATIONS & POWER INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries Holding Corporation)

     As of March 29, 2002, the Company had $15.9 million available under its revolving line of credit that expires December 22, 2004. The following is a summary of certain obligations and commitments of the Company as of March 29, 2002:

				Due in
				less than		Due in		Due in		Due after
(dollars in thousands)		Total		1 year		1-3 years		4-5 years		5 years
Debt obligations, including capital lease obligations			141,995		41,955		40		100,000		—
Noncancellable operating leases			1,902		873		874		155		—
Senior Redeemable Preferred Stock			28,586		—		—		—		28,586
	Total cash obligations		172,483		42,828		914		100,155		28,586
Standby letters of credit			4,251		3,739		512		—		—

     The Company’s debt obligations include mortgage financing of $18.0 million and senior term loans of $20.0 million which are due on June 1, 2002 and December 22, 2002, respectively. The Company has received verbal notification from the bank that the mortgage loan will be extended for one year, until June 1, 2003, with terms similar to those on the existing mortgage. With respect to the senior term loans due December 22, 2002, management expects that cash to be generated by operations and borrowing under its Credit Facility in conjunction with either extending or finding alternative financing will allow it to meet this obligation. However, there can be no assurance that the combination of cash generated by operations, borrowing availability from the Company’s Credit Facility and additional collateral-based financing will be sufficient to meet the Company’s cash requirements. If the Company is unable to satisfy such cash requirements from these sources, the Company will adopt one or more alternatives, such as reducing or delaying capital expenditures, reducing discretionary costs, negotiating an increase to the Company’s borrowing capacity under its line of credit, and selling and leasing back its facility in San Carlos, California in a transaction with an outside party.

Market Risk

     The Company’s market risk disclosures set forth in its Annual Report on Form 10-K for the fiscal year ended September 28, 2001, have not changed significantly.

-17-

COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

COMMUNICATIONS & POWER INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries Holding Corporation)

Recent Accounting Pronouncements

     In July 2001, the FASB issued SFAS No. 142, “Goodwill and Other Intangible Assets.” SFAS No. 142 addresses financial accounting and reporting for acquired goodwill and other intangible assets. SFAS No. 142 changes the accounting for goodwill from an amortization method to an impairment-only approach. Goodwill will be tested annually and whenever events or circumstances occur indicating that goodwill might be impaired. Upon adoption of SFAS No. 142, amortization of goodwill recorded for business combinations will cease. Companies are required to adopt SFAS No. 142 for fiscal years beginning after December 15, 2001, but early adoption is permitted. The Company plans to adopt this Statement beginning in the first quarter of Fiscal 2003 and therefore has not yet determined the impact on its consolidated financial position or results of operations. At the beginning of Fiscal 2003, the goodwill balance, net of amortization, is expected to be $21.7 million.

     The FASB issued SFAS No. 143, “Accounting for Asset Retirement Obligations”, in August 2001, and SFAS No. 144, “Accounting for the Impairment or Disposal of Long-lived Assets”, in October 2001. SFAS No. 143 is effective for fiscal years beginning after June 15, 2002 and will require that the fair value of an asset retirement obligation be recorded as a liability in the period in which it incurs the obligation. It provides a single accounting model for long-lived assets to be disposed of and replaces SFAS No. 121 “Accounting for the Impairment of Long-Lived Assets and Long-Lived Assets to Be Disposed Of.” The Company does not expect the adoption of these statements to have a material effect on the Company’s consolidated financial position or results of operations. The Company will adopt this Statement beginning in the first quarter of Fiscal 2003

Forward-Looking Statements

     This document contains forward-looking statements that relate to future events or the Company’s future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential” or “continue,” the negative of such terms or other comparable terminology. These statements are only predictions. Actual events or results may differ materially.

     Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results, levels of activity, performance or achievements. Moreover, neither the Company nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. All written and oral forward-looking statements made in connection with this report which are attributable to the Company or persons acting on the Company’s behalf are expressly qualified in their entirety by the “risk factors” and other cautionary statements included herein. The Company is under no duty to update any of the forward-looking statements after the date of this report to conform such statements to actual results or to changes in the Company’s expectations.

     The information in this report is not a complete description of the Company’s business or the risks associated with an investment in the Company’s securities. We urge you to carefully review and consider the various disclosures made by the Company in this report and in the Company’s other reports filed with the SEC.

-18-

COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

COMMUNICATIONS & POWER INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries Holding Corporation)

Risk Factors

     You should carefully consider the various risks and uncertainties that impact the Company’s business and the other information in this report and the Company’s other filings with the SEC before you decide to invest in the Company or to maintain or increase your investment. Such risks and uncertainties include, but are not limited to, the following: product demand and market acceptance risks; the effect of general economic conditions; the impact of competitive products and pricing; new product development and commercialization; technological difficulties and the ability to increase margins; production interruptions due to power shutdowns and volatility in energy costs; U.S. Government export policies; changes in Governmental appropriations, national defense policies and availability of Government funds; changes in environmental regulation and legislation; availability of certain critical materials and raw material price fluctuations; the Company’s ability to generate the significant amount of cash needed to service its debt; and the Company’s ability to obtain financing in the future. Any of the foregoing factors could cause the Company’s business, results of operations, or financial condition to suffer and actual results could differ materially from those expected.

-19-

COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

COMMUNICATIONS & POWER INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries Holding Corporation)

PART II: OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

     None.

ITEM 2: CHANGES IN SECURITIES

     None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

     None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

     None.

ITEM 5. OTHER INFORMATION.

     None.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.

     (a)  The following exhibits are being filed as part of this report:

Exhibit No.	Description
3.2	Amended and Restated Bylaws of CPI dated March 19, 2002

     (b)  Reports on Form 8-K:

            No reports were filed on Form 8-K during the quarter ended March 29, 2002.

-20-

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.

COMMUNICATIONS & POWER INDUSTRIES, INC.
By:	/s/ O. Joe Caldarelli
	O. Joe Caldarelli Chief Executive Officer Date: May 9, 2002

By:	/s/ Joel Littman
	Joel Littman Chief Financial Officer, Treasurer and Secretary (Principal Financial and Accounting Officer) Date: May 9, 2002

-21-

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.

COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
By:	/s/ O. Joe Caldarelli
	O. Joe Caldarelli Chief Executive Officer Date: May 9, 2002

By:	/s/ Joel Littman
	Joel Littman Chief Financial Officer, Treasurer and Secretary (Principal Financial and Accounting Officer) Date: May 9, 2002

-22-

EXHIBIT INDEX

Exhibit No.	Description
3.2	Amended and Restated Bylaws of CPI dated March 19, 2002

EX-3.2

                                                                     EXHIBIT 3.2





..................................................................................

                     COMMUNICATIONS & POWER INDUSTRIES, INC.

                           AMENDED AND RESTATED BYLAWS

..................................................................................


                           AMENDED AND RESTATED BYLAWS

                                       OF

                     COMMUNICATIONS & POWER INDUSTRIES, INC.
                     (hereinafter called the "Corporation")

                        As Amended through March 19, 2002

                                    ARTICLE I

                                     OFFICES

        Section 1. Registered Office. The registered office of the Corporation
shall be in the City of Dover, County of Kent, State of Delaware.

        Section 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.

                                   ARTICLE II

                            MEETINGS OF STOCKHOLDERS

        Section 1. Place of Meetings. Meetings of the stockholders for the
election of directors or for any other purpose shall be held at such time and
place, either within or without the State of Delaware, as shall be designated
from time to time by the Board of Directors and stated in the notice of the
meeting or in a duly executed waiver of notice thereof.

        Section 2. Annual Meetings. The Annual Meetings of Stockholders shall be
held on such date and at such time as shall be designated from time to time by
the Board of Directors and stated in the notice of the meeting, at which
meetings the stockholders shall elect by a plurality vote a Board of Directors,
and transact such other business as may properly be brought before the meeting.

        Section 3. Special Meetings. Special meetings of the stockholders may be
called by the Board of Directors, the Chairman of the Board, the Chief Executive
Officer, the President, or by the holders of shares entitled to cast not less
than 10% of the votes at the meeting. Upon request in writing to the Chairman of
the Board, the Chief Executive Officer, the President, any Vice President or the
Secretary by any person (other than the board) entitled to call a special
meeting of stockholders, the officer forthwith shall cause notice to be given to
the stockholders entitled to vote that a meeting will be held at a time
requested by the person or persons calling the meeting, not less than
thirty-five (35) nor more than sixty (60) days after the receipt of the request.
If the notice is not given within twenty (20) days after receipt of the request,
the persons entitled to call the meeting may give the notice.

        Section 4. Notice of Meetings. Written notice of the place, date, and
time of all meetings of the stockholders shall be given not less than ten (10)
nor more than sixty (60)




days before the date on which the meeting is to be held, to each stockholder
entitled to vote at such meeting, except as otherwise provided herein or as
required from time to time by the Delaware General Corporation Law or the
Certificate of Incorporation.

        Section 5. Quorum; Adjournment. At any meeting of the stockholders, the
holders of a majority of all of the shares of the stock entitled to vote at the
meeting, present in person or by proxy, shall constitute a quorum for all
purposes, unless or except to the extent that the presence of a larger number
may be required by law or the Certificate of Incorporation. If a quorum shall
fail to attend any meeting, the chairman of the meeting or the holders of a
majority of the shares of stock entitled to vote who are present, in person or
by proxy, may adjourn the meeting to another place, date, or time without notice
other than announcement at the meeting, until a quorum shall be present or
represented.

        When a meeting is adjourned to another place, date or time, written
notice need not be given of the adjourned meeting if the place, date and time
thereof are announced at the meeting at which the adjournment is taken;
provided, however, that if the date of any adjourned meeting is more than thirty
(30) days after the date for which the meeting was originally noticed, or if a
new record date is fixed for the adjourned meeting, written notice of the place,
date, and time of the adjourned meeting shall be given in conformity herewith.
At any adjourned meeting, any business may be transacted which might have been
transacted at the original meeting.

        Section 6. Proxies and Voting. At any meeting of the stockholders, every
stockholder entitled to vote may vote in person or by proxy authorized by an
instrument in writing filed in accordance with the procedure established for the
meeting.

        Each stockholder shall have one vote for every share of stock entitled
to vote which is registered in his name on the record date for the meeting,
except as otherwise provided herein or required by law or the Certificate of
Incorporation.

        All voting, including on the election of directors but excepting where
otherwise provided herein or required by law or the Certificate of
Incorporation, may be by a voice vote; provided, however, that upon demand
therefor by a stockholder entitled to vote or such stockholder's proxy, a stock
vote shall be taken. Every stock vote shall be taken by ballots, each of which
shall state the name of the stockholder or proxy voting and such other
information as may be required under the procedure established for the meeting.
Every vote taken by ballots shall be counted by an inspector or inspectors
appointed by the chairman of the meeting.

        All elections shall be determined by a plurality of the votes cast, and
except as otherwise required by law or the Certificate of Incorporation, all
other matters shall be determined by a majority of the votes cast.

        Section 7. Stock List. A complete list of stockholders entitled to vote
at any meeting of stockholders, arranged in alphabetical order for each class of
stock and showing the address of each such stockholder and the number of shares
registered in such stockholder's name, shall be open to the examination of any
such stockholder, for any purpose germane to the meeting, during ordinary
business hours for a period of at least ten (10) days prior to the meeting,
either at a place within the city where the meeting is to be



                                      -2-


held, which place shall be specified in the notice of the meeting, or if not so
specified, at the place where the meeting is to be held.

        The stock list shall also be kept at the place of the meeting during the
whole time thereof and shall be open to the examination of any such stockholder
who is present. This list shall presumptively determine the identity of the
stockholders entitled to vote at the meeting and the number of shares held by
each of them.

        Section 8. Actions by Stockholders. Unless otherwise provided in the
Certificate of Incorporation, any action required to be taken at any annual or
special meeting of stockholders of the Corporation, or any action which may be
taken at any annual or special meeting of such 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. Prompt notice of the taking of
the corporate action without a meeting by less than unanimous written consent
shall be given to those stockholders who have not consented in writing.

                                   ARTICLE III

                               BOARD OF DIRECTORS

        Section 1. Duties and Powers. The business of the Corporation shall be
managed by or under the direction of the Board of Directors which may exercise
all such powers of the Corporation and do all such lawful acts and things as are
not by law or by the Certificate of Incorporation or by these Bylaws directed or
required to be exercised or done by the stockholders.

        Section 2. Number and Term of Office. The Board of Directors shall
consist of one (1) or more members. The number of directors shall be fixed and
may be changed from time to time by resolution duly adopted by the Board of
Directors or the stockholders, except as otherwise provided by law or the
Certificate of Incorporation. Except as provided in Section 3 of this Article,
directors shall be elected by the holders of record of a plurality of the votes
cast at Annual Meetings of Stockholders, and each director so elected shall hold
office until the next Annual Meeting and until his or her successor is duly
elected and qualified, or until his or her earlier resignation or removal. Any
director may resign at any time upon written notice to the Corporation.
Directors need not be stockholders.

        Section 3. Vacancies. Vacancies and newly created directorships
resulting from any increase in the authorized number of directors may be filled
by a majority of the directors then in office, although less than a quorum, or
by a sole remaining director or by the stockholders entitled to vote at any
Annual or Special Meeting held in accordance with Article II, and the directors
so chosen shall hold office until the next Annual or Special Meeting duly called
for that purpose and until their successors are duly elected and qualified, or
until their earlier resignation or removal.

        Section 4. Meetings. The Board of Directors of the Corporation may hold
meetings, both regular and special, either within or without the State of
Delaware. The first meeting of each newly-elected Board of Directors shall be
held immediately following the



                                      -3-


Annual Meeting of Stockholders and no notice of such meeting shall be necessary
to be given the newly-elected directors in order legally to constitute the
meeting, provided a quorum shall be present. Regular meetings of the Board of
Directors may be held without notice at such time and at such place as may from
time to time be determined by the Board of Directors. Special meetings of the
Board of Directors may be called by the Chairman of the Board, the Chief
Executive Officer, the President or a majority of the directors then in office.
Notice thereof stating the place, date and hour of the meeting shall be given to
each director either by mail not less than forty-eight (48) hours before the
date of the meeting, by telephone or telegram on twenty-four (24) hours' notice,
or on such shorter notice as the person or persons calling such meeting may deem
necessary or appropriate in the circumstances. Meetings may be held at any time
without notice if all the directors are present or if all those not present
waive such notice in accordance with Section 2 of Article VI of these Bylaws.

        Section 5. Quorum. Except as may be otherwise specifically provided by
law, the Certificate of Incorporation or these Bylaws, at all meetings of the
Board of Directors, a majority of the directors then in office shall constitute
a quorum for the transaction of business and 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. If a quorum shall not be present at any meeting of the
Board 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 6. Actions of Board Without a Meeting. Unless otherwise provided
by the Certificate of Incorporation or these Bylaws, any action required or
permitted to be taken at any meeting of the Board of Directors or of any
committee thereof may be taken without a meeting if all members of the Board of
Directors or committee, as the case may be, consent thereto in writing, and the
writing or writings are filed with the minutes of proceedings of the Board of
Directors or committee.

        Section 7. Meetings by Means of Conference Telephone. Unless otherwise
provided by the Certificate of Incorporation or these Bylaws, members of the
Board of Directors of the Corporation, or any committee designated by the Board
of Directors, may participate in a meeting of the Board of Directors or such
committee by means of a conference telephone or similar communications equipment
by means of which all persons participating in the meeting can hear each other,
and participation in a meeting pursuant to this Section 7 shall constitute
presence in person at such meeting.

        Section 8. Committees. The Board of Directors may, by resolution passed
by a majority of the directors then in office, designate one or more committees,
each committee to consist of one or more of the directors of the Corporation.
The Board of Directors may designate one or more directors as alternate members
of any committee, who may replace any absent or disqualified member at any
meeting of any such committee. In the absence or disqualification of a member of
a committee, and in the absence of a designation by the Board of Directors of an
alternate member to replace the absent or disqualified member, the member or
members thereof present at any meeting and not disqualified from voting, whether
or not such members constitute a quorum, may unanimously appoint another member
of the Board of Directors to act at the meeting in the place of any such absent
or disqualified member. Any committee, to the extent allowed by law and provided
in the Bylaw or resolution establishing such committee, shall have and may
exercise all the powers



                                      -4-


and authority of the Board of Directors in the management of the business and
affairs of the Corporation, and may authorize the seal of the Corporation to be
affixed to all papers which may require it. Each committee shall keep regular
minutes and report to the Board of Directors when required.

        Section 9. Compensation. Unless otherwise restricted by the Certificate
of Incorporation or these Bylaws, the Board of Directors shall have the
authority to fix the compensation of directors. The directors may be paid their
expenses, if any, of attendance at each meeting of the Board of Directors and
may be paid a fixed sum for attendance at each meeting of the Board of Directors
or a stated salary as director. No such payment shall preclude any director from
serving the Corporation in any other capacity and receiving compensation
therefor. Members of special or standing committees may be allowed like
compensation for attending committee meetings.

        Section 10. Removal. Unless otherwise restricted by the Certificate of
Incorporation or Bylaws, any director or the entire Board of Directors may be
removed, with or without cause, by the holders of a majority of shares entitled
to vote at an election of directors.

                                   ARTICLE IV

                                    OFFICERS

        Section 1. General. The officers of the Corporation shall be appointed
by the Board of Directors and shall consist of a Chairman of the Board, a Chief
Executive Officer, a President, a Secretary and a Treasurer (or a position with
the duties and responsibilities of a Treasurer). The Board of Directors may also
appoint one or more vice presidents, assistant secretaries or assistant
treasurers, and such other officers as the Board of Directors, in its
discretion, shall deem necessary or appropriate from time to time. Any number of
offices may be held by the same person, unless the Certificate of Incorporation
or these Bylaws otherwise provide.

        Section 2. Election; Term of Office. The Board of Directors at its first
meeting held after each Annual Meeting of Stockholders shall elect a Chairman of
the Board, a Chief Executive Officer, a President, a Secretary and a Treasurer
(or a position with the duties and responsibilities of a Treasurer), and may
also elect at that meeting or any other meeting, such other officers and agents
as it shall deem necessary or appropriate. Each officer of the Corporation shall
exercise such powers and perform such duties as shall be determined from time to
time by the Board of Directors together with the powers and duties customarily
exercised by such officer; and each officer of the Corporation shall hold office
until such officer's successor is elected and qualified or until such officer's
earlier resignation or removal. Any officer may resign at any time upon written
notice to the Corporation. The Board of Directors may at any time, with or
without cause, by the affirmative vote of a majority of directors then in
office, remove any officer.

        Section 3. Chairman of the Board. The Chairman of the Board shall
preside at all meetings of the stockholders and the Board of Directors and shall
have such other duties and powers as may be prescribed by the Board of Directors
from time to time.



                                      -5-


        Section 4. Chief Executive Officer. The Chief Executive Officer shall
have all customary executive powers and shall have and execute such further
powers and duties as may be specifically delegated to or vested in the Chief
Executive Officer from time to time by these Bylaws or the Board of Directors.
This power and these duties excludes any activity associated with classified
work or programs, where the executive power will lie with the Chairman of the
Board and the President.

        Section 5. President. The President shall be the chief operating officer
of the Corporation, shall have general and active management of the business of
the Corporation and shall see that all orders and resolutions of the Board of
Directors are carried into effect. The President shall have and exercise such
further powers and duties as may be specifically delegated to or vested in the
President from time to time by these Bylaws, the Board of Directors or the Chief
Executive Officer. In the absence of the Chief Executive Officer or in the event
of his inability or refusal to act, the President shall perform the duties of
the Chief Executive Officer, and when so acting, shall have all of the powers
and be subject to all of the restrictions upon the Chief Executive Officer. In
the absence of the Chairman of the Board or in the event of his inability or
refusal to act, or if the Board has not designated a Chairman, the President
shall perform the duties of the Chairman of the Board, and when so acting, shall
have all of the powers and be subject to all of the restrictions upon the
Chairman of the Board.

        Section 6. Vice President. In the absence of the President or in the
event of his inability or refusal to act, the Vice President (or in the event
there be more than one vice president, the vice presidents in the order
designated by the directors, or in the absence of any designation, then in the
order of their election) shall perform the duties of the President, and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the President. The vice presidents shall perform such other duties and have such
other powers as the Board of Directors, the Chief Executive Officer or the
President may from time to time prescribe.

        Section 7. Secretary. The Secretary shall attend all meetings of the
Board of Directors and all meetings of stockholders and record all the
proceedings thereat in a book or books to be kept for that purpose; the
Secretary shall also perform like duties for the standing committees when
required. The Secretary shall give, or cause to be given, notice of all meetings
of the stockholders and special meetings of the Board of Directors, and shall
perform such other duties as may be prescribed by the Board of Directors, the
Chief Executive Officer or the President. If the Secretary shall be unable or
shall refuse to cause to be given notice of all meetings of the stockholders and
special meetings of the Board of Directors, and if there be no Assistant
Secretary, then the Board of Directors, the Chief Executive Officer or the
President may choose another officer to cause such notice to be given. The
Secretary shall have custody of the seal of the Corporation and the Secretary or
any Assistant Secretary, if there be one, shall have authority to affix the same
to any instrument requiring it and when so affixed, it may be attested by the
signature of the Secretary or by the signature of any such Assistant Secretary.
The Board of Directors may give general authority to any other officer to affix
the seal of the Corporation and to attest the affixing by his or her signature.
The Secretary shall see that all books, reports, statements, certificates and
other documents and records required by law to be kept or filed are properly
kept or filed, as the case may be.



                                      -6-


        Section 8. Assistant Secretaries. Except as may be otherwise provided in
these Bylaws, Assistant Secretaries, if there be any, shall perform such duties
and have such powers as from time to time may be assigned to them by the Board
of Directors, the Chief Executive Officer, the President, or the Secretary, and
shall have the authority to perform all functions of the Secretary, and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the Secretary.

        Section 9. Treasurer. The Treasurer shall be the Chief Financial
Officer, shall have the custody of the corporate funds and securities, shall
keep complete and accurate accounts of all receipts and disbursements of the
Corporation, and shall deposit all monies and other valuable effects of the
Corporation in its name and to its credit in such banks and other depositories
as may be designated from time to time by the Board of Directors. The Treasurer
shall disburse the funds of the Corporation, taking proper vouchers and receipts
for such disbursements, and shall render to the Board of Directors, at its
regular meetings, or when the Board of Directors so requires, an account of all
his or her transactions as Treasurer and of the financial condition of the
Corporation. The Treasurer shall, when and if required by the Board of
Directors, give and file with the Corporation a bond, in such form and amount
and with such surety or sureties as shall be satisfactory to the Board of
Directors, for the faithful performance of his or her duties as Treasurer. The
Treasurer shall have such other powers and perform such other duties as the
Board of Directors, the Chief Executive Officer or the President shall from time
to time prescribe.

        Section 10. Assistant Treasurers. Except as may be otherwise provided in
these Bylaws, Assistant Treasurers, if there be any, shall perform such duties
and have such powers as from time to time may be assigned to them by the Board
of Directors, the Chief Executive Officer, the President, or the Treasurer, and
shall have the authority to perform all functions of the Treasurer, and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the Treasurer.

        Section 11. Other Officers. Such other officers as the Board of
Directors may choose shall perform such duties and have such powers as from time
to time may be assigned to them by the Board of Directors. The Board of
Directors may delegate to any other officer of the Corporation the power to
choose such other officers and to prescribe their respective duties and powers.

                                    ARTICLE V

                                      STOCK

        Section 1. Form of Certificates. Every holder of stock in the
Corporation shall be entitled to have a certificate signed, in the name of the
Corporation (i) by the Chairman of the Board, the Chief Executive Officer, the
President or a Vice President and (ii) by the Treasurer or an Assistant
Treasurer, or the Secretary or an Assistant Secretary of the Corporation,
certifying the number of shares owned by such holder in the Corporation.

        Section 2. Signatures. Any or all the signatures on the certificate may
be a facsimile. In case any officer, transfer agent or registrar who has signed
or whose facsimile signature has been placed upon a certificate shall have
ceased to be such officer, transfer agent or registrar before such certificate
is issued, it may be issued by the Corporation with



                                      -7-


the same effect as if such person were such officer, transfer agent or registrar
at the date of issue.

        Section 3. Lost Certificates. The Board of Directors may direct a new
certificate to be issued in place of any certificate theretofore issued by the
Corporation alleged to have been lost, stolen or destroyed, upon the making of
an affidavit of that fact by the person claiming the certificate of stock to be
lost, stolen or destroyed. When authorizing such issue of a new certificate, the
Board of Directors may, in its discretion and as a condition precedent to the
issuance thereof, require the owner of such lost, stolen or destroyed
certificate, or such owner's legal representative, to advertise the same in such
manner as the Board of Directors shall require and/or to give the Corporation a
bond in such sum as it may direct as indemnity against any claim that may be
made against the Corporation with respect to the certificate alleged to have
been lost, stolen or destroyed.

        Section 4. Transfers. Stock of the Corporation shall be transferable in
the manner prescribed by law and in these Bylaws. Transfers of stock shall be
made on the books of the Corporation only by the person named in the certificate
or by such person's attorney lawfully constituted in writing and upon the
surrender of the certificate therefor, which shall be cancelled before a new
certificate shall be issued.

        Section 5. Record Date. 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 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 stock, or for the purpose of
any other lawful action, the Board of Directors may fix, in advance, a record
date, which shall not be more than sixty (60) days nor less than ten (10) days
before the date of such meeting, nor more than sixty (60) days prior to any
other action. A determination of stockholders of record entitled to notice of or
to vote at a meeting of stockholders shall apply to any adjournment of the
meeting; provided, however, that the Board of Directors may fix a new record
date for the adjourned meeting.

        Section 6. Beneficial Owners. The Corporation shall be entitled to
recognize the exclusive right of a person registered on its books as the owner
of shares to receive dividends, and to vote as such owner, and to hold liable
for calls and assessments a person registered on its books as the owner of
shares, and shall not be bound to recognize any equitable or other claim to or
interest in such share or shares on the part of any other person, whether or not
it shall have express or other notice thereof, except as otherwise provided by
law.

        Section 7. Voting Securities Owned by the Corporation. Powers of
attorney, proxies, waivers of notice of meeting, consents and other instruments
relating to securities owned by the Corporation may be executed in the name of
and on behalf of the Corporation by the Chairman of the Board, the Chief
Executive Officer, the President, any Vice President or the Secretary and any
such officer may, in the name of and on behalf of the Corporation, take all such
action as any such officer may deem advisable to vote in person or by proxy at
any meeting of security holders of any corporation in which the Corporation may
own securities and at any such meeting shall possess and may exercise any and
all rights and power incident to the ownership of such securities and which, as
the owner thereof, the Corporation might have exercised and possessed if
present. The Board of



                                      -8-


Directors may, by resolution, from time to time confer like powers upon any
other person or persons.

                                   ARTICLE VI

                                     NOTICES

        Section 1. Notices. Whenever written notice is required by law, the
Certificate of Incorporation or these Bylaws, to be given to any director,
member of a committee or stockholder, such notice may be given by mail,
addressed to such director, member of a committee or stockholder, at such
person's address as it appears on the records of the Corporation, with postage
thereon prepaid, and such notice shall be deemed to be given at the time when
the same shall be deposited in the United States mail. Written notice may also
be given personally or by telegram, telex or cable and such notice shall be
deemed to be given at the time of receipt thereof if given personally or at the
time of transmission thereof if given by telegram, telex or cable.

        Section 2. Waiver of Notice. Whenever any notice is required by law, the
Certificate of Incorporation or these Bylaws to be given to any director, member
of a committee or stockholder, a waiver thereof in writing, signed by the person
or persons entitled to such notice, whether before or after the time stated
therein, shall be deemed equivalent to notice.

                                   ARTICLE VII

                               GENERAL PROVISIONS

        Section 1. Dividends. Dividends upon the capital stock of the
Corporation, subject to the provisions of the Certificate of Incorporation, if
any, may be declared by the Board of Directors at any regular or special meeting
or by any Committee of the Board of Directors having such authority at any
meeting thereof, and may be paid in cash, in property, in shares of the capital
stock or in any combination thereof. Before payment of any dividend, there may
be set aside out of any funds of the Corporation available for dividends such
sum or sums as the Board of Directors from time to time, in its absolute
discretion, deems proper as a reserve or reserves to meet contingencies, or for
equalizing dividends, or for repairing or maintaining any property of the
Corporation, or for any proper purpose, and the Board of Directors may modify or
abolish any such reserve.

        Section 2. Disbursements. All notes, checks, drafts and orders for the
payment of money issued by the Corporation shall be signed in the name of the
Corporation by such officers or such other persons as the Board of Directors may
from time to time designate.

        Section 3. Corporation Seal. The corporate seal, if the Corporation
shall have a corporate seal, shall have inscribed thereon the name of the
Corporation, the year of its organization and the words "Corporate Seal,
Delaware". The seal may be used by causing it or a facsimile thereof to be
impressed or affixed or reproduced or otherwise.



                                      -9-


                                  ARTICLE VIII

                    DIRECTORS' LIABILITY AND INDEMNIFICATION

        Section 1. Directors' Liability. To the fullest extent permitted by the
General Corporation Law of the State of Delaware, as it exists on the date
hereof or as it may hereafter be amended, 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. Any repeal or modification
of this Section 1 by the stockholders of the Corporation shall be prospective
only, and shall not adversely affect any limitation on the personal liability of
a director of the Corporation with respect to any act or omission occurring
prior to the time of such repeal or modification.

        Section 2. Right to Indemnification. Each person who was or is made a
party or is threatened to be made a party to or is otherwise involved in any
action, suit or proceeding, whether civil, criminal, administrative or
investigative (hereinafter a "proceeding"), by reason of the fact that he or she
is or was a director or an officer of the Corporation or is or was serving at
the request of the Corporation as a director, officer, employee or agent of
another corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to an employee benefit plan
(hereinafter an "indemnitee"), whether the basis of such proceeding is alleged
action in an official capacity as a director, officer, employee or agent or in
any other capacity while serving as a director, officer, employee or agent,
shall be indemnified and held harmless by the Corporation to the fullest extent
authorized by the Delaware General Corporation Law, as the same exists or may
hereafter be amended (but, in the case of any such amendment, only to the extent
that such amendment permits the Corporation to provide broader indemnification
rights than such law permitted the Corporation to provide prior to such
amendment), against all expense, liability and loss (including attorneys' fees,
judgments, fines, ERISA excise taxes or penalties and amounts paid in
settlement) reasonably incurred or suffered by such indemnitee in connection
therewith; provided, however, that, except as provided in Section 4 of this
Article VIII with respect to proceedings to enforce rights to indemnification,
the Corporation shall indemnify any such indemnitee in connection with a
proceeding (or part thereof) initiated by such indemnitee only if such
proceeding (or part thereof) was authorized by the Board of Directors of the
Corporation.

        Section 3. Right to Advancement of Expenses. The right to
indemnification conferred in Section 2 of this Article VIII shall include the
right to be paid by the Corporation the expenses (including attorneys' fees)
incurred in defending any such proceeding in advance of its final disposition
(hereinafter an "advancement of expenses"); provided, however, that, if the
Delaware General Corporation Law requires, an advancement of expenses incurred
by an indemnitee in his or her capacity as a director or officer (and not in any
other capacity in which service was or is rendered by such indemnitee,
including, without limitation, service to an employee benefit plan) shall be
made only upon delivery to the Corporation of an undertaking (hereinafter an
"undertaking"), by or on behalf of such indemnitee, to repay all amounts so
advanced if it shall ultimately be determined by final judicial decision from
which there is no further right to appeal (hereinafter a "final adjudication")
that such indemnitee is not entitled to be indemnified for such expenses under
this Section 3 or otherwise. The rights to indemnification and to the
advancement of expenses conferred in Section 2 and 3 of this Article VIII shall
be contract rights and such



                                      -10-


rights shall continue as to an indemnitee who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the indemnitee's
heirs, executors and administrators.

        Section 4. Right of Indemnitee to Bring Suit. If a claim under Section 2
or 3 of this Article VIII is not paid in full by the Corporation within sixty
(60) days after a written claim has been received by the Corporation, except in
the case of a claim for an advancement of expenses, in which case the applicable
period shall be twenty (20) days, the indemnitee may at any time thereafter
bring suit against the Corporation to recover the unpaid amount of the claim. If
successful in whole or in part in any such suit, or in a suit brought by the
Corporation to recover an advancement of expenses pursuant to the terms of an
undertaking, the indemnitee shall be entitled to be paid also the expense of
prosecuting or defending such suit. In (i) any suit brought by the indemnitee to
enforce a right to indemnification hereunder (but not in a suit brought by the
indemnitee to enforce a right to an advancement of expenses) it shall be a
defense that, and (ii) in any suit brought by the Corporation to recover an
advancement of expenses pursuant to the terms of an undertaking, the Corporation
shall be entitled to recover such expenses upon a final adjudication that, the
indemnitee has not met any applicable standard for indemnification set forth in
the Delaware General Corporation Law. Neither the failure of the Corporation
(including its Board of Directors, independent legal counsel, or its
stockholders) to have made a determination prior to the commencement of such
suit that indemnification of the indemnitee is proper in the circumstances
because the indemnitee has met the applicable standard of conduct set forth in
the Delaware General Corporation Law, nor an actual determination by the
Corporation (including its Board of Directors, independent legal counsel, or its
stockholders) that the indemnitee has not met such applicable standard of
conduct, shall create a presumption that the indemnitee has not met the
applicable standard of conduct or, in the case of such a suit brought by the
indemnitee, be a defense to such suit. In any suit brought by the indemnitee to
enforce a right to indemnification or to an advancement of expenses hereunder,
or brought by the Corporation to recover an advancement or expenses pursuant to
the terms of an undertaking, the burden or proving that the indemnitee is not
entitled to be indemnified, or to such advancement of expenses, under this
Article VIII or otherwise shall be on the Corporation.

        Section 5. Non-Exclusivity of Rights. The rights to indemnification and
to the advancement of expenses conferred in this Article VIII shall not be
exclusive of any other right which any person may have or hereafter acquire
under any statute, the Corporation's Certificate of Incorporation, Bylaws,
agreement, vote of stockholders or disinterested directors or otherwise.

        Section 6. Insurance. The Corporation may maintain insurance, at its
expense, to protect itself and any director, officer, employee or agent of the
Corporation or another corporation, partnership, joint venture, trust or other
enterprise against any expense, liability or loss, whether or not the
Corporation would have the power to indemnify such person against such expense,
liability or loss under the Delaware General Corporation Law.

        Section 7. Indemnification of Employees and Agents of the Corporation.
The Corporation may, to the extent authorized from time to time by the Board of
Directors, grant rights to indemnification and to the advancement of expenses to
any employee or agent of the Corporation to the fullest extent of the provisions
of this Article with respect to the indemnification and advancement of expenses
of directors and officers of the Corporation.



                                      -11-


        Section 8. Amendment. Section 1 of this Article VIII is also contained
in Paragraph SEVENTH of the Corporation's Certificate of Incorporation, and
accordingly, may be altered, amended or repealed only to the extent and at the
time the comparable Certificate Article is altered, amended or repealed. Any
repeal or modification of this Article VIII shall not change the rights of an
officer or director to indemnification with respect to any action or omission
occurring prior to such repeal or modification.

                                   ARTICLE IX

                                   AMENDMENTS

        Except as otherwise specifically stated within an Article to be altered,
amended or repealed, these Bylaws may be altered, amended or repealed and new
Bylaws may be adopted at any meeting of the Board of Directors or of the
stockholders, provided notice of the proposed change was given in the notice of
the meeting.




                                      -12-


                               TABLE OF CONTENTS





                                                                                   Page
                                                                                   ----
                                                                                
ARTICLE I           OFFICES..........................................................1

        Section 1.  Registered Office................................................1

        Section 2.  Other Offices....................................................1

ARTICLE II          MEETINGS OF STOCKHOLDERS.........................................1

        Section 1.  Place of Meetings................................................1

        Section 2.  Annual Meetings..................................................1

        Section 3.  Special Meetings.................................................1

        Section 4.  Notice of Meetings...............................................1

        Section 5.  Quorum; Adjournment..............................................2

        Section 6.  Proxies and Voting...............................................2

        Section 7.  Stock List.......................................................2

        Section 8.  Actions by Stockholders..........................................3

ARTICLE III         BOARD OF DIRECTORS...............................................3

        Section 1.  Duties and Powers................................................3

        Section 2.  Number and Term of Office........................................3

        Section 3.  Vacancies........................................................3

        Section 4.  Meetings.........................................................3

        Section 5.  Quorum...........................................................4

        Section 6.  Actions of Board Without a Meeting...............................4

        Section 7.  Meetings by Means of Conference Telephone........................4

        Section 8.  Committees.......................................................4

        Section 9.  Compensation.....................................................5

        Section 10. Removal..........................................................5




                                      -i-



                                                                                   Page
                                                                                   ----
                                                                                
ARTICLE IV          OFFICERS.........................................................5

        Section 1.  General..........................................................5

        Section 2.  Election; Term of Office.........................................5

        Section 3.  Chairman of the Board............................................5

        Section 4.  Chief Executive Officer..........................................6

        Section 5.  President........................................................6

        Section 6.  Vice President...................................................6

        Section 7.  Secretary........................................................6

        Section 8.  Assistant Secretaries............................................7

        Section 9.  Treasurer........................................................7

        Section 10. Assistant Treasurers.............................................7

        Section 11. Other Officers...................................................7

ARTICLE V           STOCK............................................................7

        Section 1.  Form of Certificates.............................................7

        Section 2.  Signatures.......................................................7

        Section 3.  Lost Certificates................................................8

        Section 4.  Transfers........................................................8

        Section 5.  Record Date......................................................8

        Section 6.  Beneficial Owners................................................8

        Section 7.  Voting Securities Owned by the Corporation.......................8

ARTICLE VI          NOTICES..........................................................9

        Section 1.  Notices..........................................................9

        Section 2.  Waiver of Notice.................................................9

ARTICLE VII         GENERAL PROVISIONS...............................................9

        Section 1.  Dividends........................................................9




                                      -ii-




                                                                                   Page
                                                                                   ----
                                                                                
        Section 2.  Disbursements....................................................9

        Section 3.  Corporation Seal.................................................9

ARTICLE VIII        DIRECTORS' LIABILITY AND INDEMNIFICATION........................10

        Section 1.  Directors' Liability............................................10

        Section 2.  Right to Indemnification........................................10

        Section 3.  Right to Advancement of Expenses................................10

        Section 4.  Right of Indemnitee to Bring Suit...............................11

        Section 5.  Non-Exclusivity of Rights.......................................11

        Section 6.  Insurance.......................................................11

        Section 7.  Indemnification of Employees and Agents of the Corporation......11

        Section 8.  Amendment.......................................................12

ARTICLE IX          AMENDMENTS......................................................12



                                      -iii-