-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, B9Lw70+3G/0L7sgpDq68hjmWHnbS3gBfcD47BMS433ZZJLfsrRRk93/K4mCuXm50 RFVYGve0Ows5GL9KBKHzSw== 0000027116-01-500013.txt : 20010813 0000027116-01-500013.hdr.sgml : 20010813 ACCESSION NUMBER: 0000027116-01-500013 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20010630 FILED AS OF DATE: 20010810 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DATRON SYSTEMS INC/DE CENTRAL INDEX KEY: 0000027116 STANDARD INDUSTRIAL CLASSIFICATION: RADIO & TV BROADCASTING & COMMUNICATIONS EQUIPMENT [3663] IRS NUMBER: 952582922 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-07445 FILM NUMBER: 1705107 BUSINESS ADDRESS: STREET 1: 3030 ENTERPRISE CT CITY: VISTA STATE: CA ZIP: 92083 BUSINESS PHONE: 7607345454 MAIL ADDRESS: STREET 1: 3030 ENTERPRISE CT. CITY: VISTA STATE: CA ZIP: 93083 10-Q 1 secq.txt FORM 10-Q FOR PERIOD ENDED JUNE 30, 2001 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2001 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______to___________ Commission File Number: 0-7445 DATRON SYSTEMS INCORPORATED ------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 95-2582922 - ------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 3030 Enterprise Court, Vista, California 92083-8347 - -------------------------------------------------------------- (Address of principal executive offices) (zip code) 760) 734-5454 ------------------------------------------------------- (Registrant's telephone number, including area code) _______________________________________________________________ (Former name, former address and formal fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. [ X ] Yes [ ] No APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15 (d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. [ ] Yes [ ] No APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of common stock as of the latest practicable date. As of August 8, 2001, the Registrant had only one class of common stock, par value $0.01, of which there were 2,806,602 shares outstanding. PART I - FINANCIAL INFORMATION Item 1. Financial Statements
DATRON SYSTEMS INCORPORATED CONSOLIDATED BALANCE SHEETS (In thousands) June 30, 2001 March 31, (Unaudited) 2001 ----------- -------- ASSETS Current assets: Cash and cash equivalents $3,678 $8,380 Accounts receivable, net 17,137 19,652 Inventories 12,803 11,495 Deferred income taxes 2,426 2,426 Prepaid expenses and other current assets 1,235 493 ------- ------ Total current assets 37,279 42,446 Property, plant and equipment, net 8,771 9,004 Goodwill, net 4,981 5,032 Other assets 885 787 ------- ------- Total assets $51,916 $57,269 ======= ======= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $3,173 $4,835 Accrued expenses 5,579 6,754 Customer advances 1,627 1,929 Income taxes payable 370 1,554 Current portion of long-term debt 98 96 ------ ------ Total current liabilities 10,847 15,168 Long-term debt 2,958 2,984 Deferred income taxes 1,481 1,481 Deferred rent 159 150 ------ ------ Total liabilities 15,445 19,783 ------ ------ Stockholders' equity: Preferred stock - par value $0.01;authorized 2,000,000 shares, none issued or outstanding --- --- Common stock -- par value $0.01; authorized 10,000,000 shares, 2,758,257 and 3,116,292 shares issued in June and March, respectively 27 31 Additional paid-in capital 9,148 11,114 Retained earnings 27,296 28,417 Treasury stock, at cost;no shares in June and 368,005 shares in March --- ( 2,076) ------- ------- Total stockholders' equity 36,471 37,486 ------- ------- Total liabilities and stockholders' equity $51,916 $57,269 ======= ======= See notes to consolidated financial statements.
1
DATRON SYSTEMS INCORPORATED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except per-share amounts) Three Months Ended June 30, 2001 2000 -------- ------- Net sales $10,609 $13,354 Cost of sales 8,102 9,946 ------- ------- Gross profit 2,507 3,408 Selling, general and administrative 3,655 2,996 Research and development 708 1,023 ------- ------- Operating loss (1,856) (611) Interest expense (52) (53) Interest income 62 130 Other income (expense) 21 (8) ------- ------- Loss before income taxes (1,825) (542) Income taxes (benefit) (704) (215) ------- ------- Net loss ($1,121) ($327) ======== ======= Loss per common share-basic ($0.41) ($0.12) ======== ======= Weighted average number of common shares outstanding 2,752 2,721 ======== ======= Loss per common share-diluted ($0.41) ($0.12) ======== ======= Weighted average number of common and common equivalent shares outstanding 2,752 2,721 ======== ======= See notes to consolidated financial statements.
2
DATRON SYSTEMS INCORPORATED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands) Three Months Ended June 30, 2001 2000 ------- ------ Cash Flows from Operating Activities Net loss ($1,121) ($327) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization 458 482 Changes in operating assets and liabilities: Accounts receivable 2,515 1,318 Inventories (1,308) (79) Prepaid expenses and other assets (842) (347) Accounts payable and accrued expenses (2,837) (4,045) Customer advances (302) (793) Income taxes payable (1,184) (1,062) Deferred rent 9 15 Other 1 14 ------- ------ Net cash used in operating activities (4,611) (4,824) ------- ------ Cash Flows from Investing Activities Additions to property, plant and equipment (172) (154) ------- ------ Net cash used in investing activities (172) (154) ------- ------ Cash Flows from Financing Activities Repayments of long-term debt (24) (23) Stock options exercised 23 39 Issuance of common stock 82 57 ------- ------ Net cash provided by financing activities 81 73 ------- ------ Decrease in cash and cash equivalents (4,702) (4,905) Cash and cash equivalents at beginning of period 8,380 12,183 ------- ------ Cash and cash equivalents at end of period $3,678 $7,278 ======= ====== See notes to consolidated financial statements.
3 Datron Systems Incorporated Notes to Consolidated Financial Statements (Unaudited) 1. Basis of Presentation The unaudited consolidated financial statements included herein contain the accounts of Datron Systems Incorporated and its wholly owned subsidiaries (the "Company") and have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. It is suggested that these financial statements be read in connection with the financial statements and notes thereto included in the Company's annual report on Form 10-K for the fiscal year ended March 31, 2001. In the opinion of the Company's management, the accompanying unaudited financial statements contain all adjustments, consisting only of normal recurring adjustments, unless otherwise stated, which are necessary to present fairly its financial position at June 30, 2001 and the results of its operations and its cash flows for the periods presented. Results of operations for the periods presented herein are not necessarily indicative of what results will be for the entire fiscal year. The balance sheet at March 31, 2001 has been derived from audited financial statements. In June 2001, the Financial Accounting Standards Board ("FASB") issued two new pronouncements: Statement of Financial Accounting Standards ("SFAS") No. 141, "Business Combinations," and SFAS No. 142, "Goodwill and Other Intangible Assets." SFAS No. 141 requires that the purchase method of accounting be used for all business combinations initiated after June 30, 2001 and that the use of the pooling-of-interests method is no longer allowed. SFAS No. 142 requires that upon adoption, amortization of goodwill will cease and instead, the carrying value of goodwill will be evaluated for impairment on an annual basis. Identifiable intangible assets will continue to be amortized over their useful lives and reviewed for impairment in accordance with SFAS No. 121 "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of." The Company is required to implement SFAS No. 141 on July 1, 2001 and SFAS No. 142 at the beginning of its next fiscal year, April 1, 2002. The Company is evaluating the impact of the adoption of these standards and has not yet determined the effect, if any, that their adoption will have on its consolidated financial position or results of operations. On July 3, 2001, The Titan Corporation ("Titan") commenced an exchange offer (the "Offer") through its wholly owned subsidiary, Gem Acquisition Corp. ("Merger Sub"), for all of the outstanding shares of common stock ("Datron Common Stock") of Datron Systems Incorporated ("Datron"). The Offer expired at midnight (NYC time) on August 3, 2001 and the Merger Sub accepted for payment approximately 1,953,682 shares tendered by Datron stockholders in the Offer. As a result, Titan owns approximately 69.6% of Datron Common Stock. Each validly tendered share of Datron Common Stock will be exchanged for 0.81919 shares of Titan common stock, and cash will be issued for fractional shares of Titan common stock. In addition, pursuant to the terms of an Agreement and Plan of Merger and Reorganization dated as of June 24, 2001 by and among Datron, Merger Sub and Titan, effective August 3, 2001, Datron's board of directors was increased from six to seven members, three of Datron's board members resigned and Titan designated four directors who were elected to Datron's board. Titan designees now constitute a majority of the Board of Directors of Datron. The Offer is the first step of Titan's two-step acquisition of Datron. The second step will be the merger (the "Merger") of Merger Sub with and into Datron, which will take place as soon as practicable subject to applicable legal requirements. Upon completion of the Merger, Datron will be a wholly owned subsidiary of Titan. 2. Earnings (Loss) per Share Basic earnings per share ("EPS") is calculated based on the weighted average number of shares outstanding during the period. Diluted EPS is calculated based on the weighted average number of shares outstanding during the period plus equivalent shares issuable under the Company's stock option plans when such amounts are dilutive. Options to purchase 441,365 shares of common stock at prices ranging from $5.10 to $15.73 were not included in the computation of diluted EPS at June 30, 2001 because the effect of such options would be anti-dilutive. Such options expire at various dates from March 12, 2002 to May 13, 2011. At June 30, 2000, options to purchase 433,150 shares of common stock at prices ranging from $5.10 to $15.73 were not included in the computation of diluted EPS because the effect of such options would be anti-dilutive. 4 3. Accounts Receivable At June 30, 2001 and March 31, 2001, accounts receivable were as follows:
June 30, March 31, 2001 2001 ------------- ------------ Billed $ 13,276,000 $ 15,484,000 Unbilled 3,983,000 4,285,000 ------------- ------------ Subtotal 17,259,000 19,769,000 Allowance for doubtful accounts (122,000) (117,000) ------------- ------------ Total $17,137,000 $19,652,000 ============= ===========
4. Inventories At June 30, 2001 and March 31, 2001, inventories were as follows:
June 30, March 31, 2001 2001 ------------ ------------ Raw materials $ 7,139,000 $ 7,714,000 Work-in-process 3,599,000 2,395,000 Finished goods 2,065,000 1,386,000 ------------- ------------ Total $12,803,000 $11,495,000 ============= ============
Inventories are presented net of allowances for obsolescence of $1,732,000 and $1,665,000 at June 30, 2001 and March 31, 2001, respectively. 5. Property, Plant and Equipment At June 30, 2001 and March 31, 2001, property, plant and equipment was as follows:
June 30, March 31, 2001 2001 ------------ ----------- Land and buildings $ 9,052,000 $ 9,052,000 Machinery and equipment 15,530,000 15,400,000 Furniture and office equipment 1,558,000 1,552,000 Leasehold improvements 752,000 751,000 Construction-in-process 92,000 57,000 ----------- ---------- Subtotal 26,984,000 26,812,000 Accumulated depreciation and amortization (18,213,000) (17,808,000) ------------- ----------- Total $ 8,771,000 $ 9,004,000 ============ ============
5 6. Segment Information Segment information was as follows for the periods shown:
Three Months Ended June 30, 2001 2000 ------------ ----------- Net sales: Antenna and Imaging Systems $ 7,450,000 $ 9,848,000 Communication Products 3,159,000 3,506,000 ----------- ----------- Consolidated net sales $10,609,000 $13,354,000 =========== =========== Operating income (loss): Antenna and Imaging Systems $ 151,000 $ 206,000 Communication Products (1,090,000) (464,000) General corporate expenses (917,000) (353,000) ---------- ---------- Consolidated operating income (loss) (1,856,000) (611,000) Interest income, net 10,000 77,000 Other income (expense) 21,000 (8,000) ----------- ---------- Loss before income taxes $(l,825,000) $(542,000) =========== ==========
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. Datron Systems Incorporated and its wholly owned subsidiaries (the "Company") report operations in two business segments: Antenna and Imaging Systems, and Communication Products. The Antenna and Imaging Systems business segment designs and manufactures satellite communication systems, subsystems and antennas that are sold worldwide to commercial and governmental customers, including the U.S. Department of Defense. Its major product lines are (i) satellite tracking antennas used for remote sensing, telemetry, tracking and control ("TT&C") and satellite communication purposes by governmental and commercial users, and (ii) mobile broadband communication systems for airlines, military transports and mobile land and marine direct broadcast satellite ("DBS") television users. The Communication Products business segment designs, manufactures and distributes voice and data communication radios for worldwide military and civilian purposes. This Management's Discussion and Analysis of Financial Condition and Results of Operations contains "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. A variety of factors could cause the Company's actual results to differ from the anticipated results expressed in such forward-looking statements. These include, among others, uncertainties stemming from the dependence of the Company on foreign sales and on large orders from a relatively small number of customers, risks relating to the decline in the Company's traditional defense business and the Company's efforts to develop and market consumer products, lack of timely development or customer acceptance of new products, changes in or unavailability of products and services offered by satellite service providers and their related suppliers, worldwide economic downturns and currency devaluations, restrictions imposed by the U.S. government on the export of Company products, and the impact of competition. For more information, please review the Company's periodic reports under the Securities Exchange Act of 1934, including without limitation the Investment Considerations set forth in the Company's Annual Report on Form 10-K. Results of Operations Net loss for the first quarter of fiscal 2002 was $1,121,000, or $0.41 per diluted share, compared with a net loss of $327,000, or $0.12 per diluted share, in the first quarter of fiscal 2001. Excluding merger-related expenses, net loss for the quarter was approximately $892,000, or $0.32 per diluted share. Net sales in the first quarter of fiscal 2002 were $10,609,000, a 21% decrease from first quarter net sales last fiscal year of $13,354,000. The decline in sales was primarily due to lower sales of antenna systems and mobile broadband communication products. The larger net loss was primarily due to lower gross profits on the lower sales as well as expenses of approximately $381,000 ($229,000, or $0.08 per diluted share, after-tax) related to the acquisition of the Company by The Titan Corporation, partially offset by lower research and development expenses. Operating results for each business segment were as follows: 6
Antenna and Imaging Systems Three Months Ended June 30, 2001 2000 ---------- ---------- Net sales $7,450,000 $9,848,000 ========== ========== Gross profit $1,941,000 $2,540,000 ========== ========== Operating income $151,000 $206,000 ========== ==========
Sales of Antenna and Imaging Systems products decreased 24% in the first quarter of fiscal 2002 compared with the first quarter of fiscal 2001. The decrease was primarily due to lower sales of antenna systems and airborne broadband communication products. The market for antenna systems continues to be soft and it is expected to remain so through at least the second quarter of fiscal 2002. Gross profit percentage on sales of Antenna and Imaging Systems products was 26.1% in the first quarter of fiscal 2002 compared with 25.8% in the first quarter last fiscal year. The improvement resulted from lower material costs and a more favorable product mix. Operating income percentage from sales of Antenna and Imaging Systems products was 2.0% in the first quarter of fiscal 2002 compared with 2.1% in the first quarter last fiscal year. Although selling and administrative expenses as a percentage of sales were higher in the recent quarter due to the lower sales, they were offset by lower research and development expenses.
Communication Products Three Months Ended June 30, 2001 2000 ----------- ---------- Net sales $3,159,000 $3,506,000 =========== ========== Gross profit $566,000 $868,000 =========== ========== Operating loss ($1,090,000) ($464,000) =========== ==========
Sales of Communication Products decreased 10% in the first quarter of fiscal 2002 compared with the first quarter of fiscal 2001. The decrease in sales was primarily due to an export licensing problem that delayed shipment of a $1.5 million portion of a radio order. Those radios are expected to ship in the second quarter. This segment's business has traditionally been driven by one or two large contracts each fiscal year with growth often occurring in the second half. Gross profit percentage on sales of Communication Products was 17.9% in the first quarter of fiscal 2002 compared with 24.8% in the first quarter last fiscal year. Low sales and expenses related to the rapid reconfiguration of radios to permit partial shipment of the radios affected by the export licensing problem were responsible for the decline. Operating loss percentage from sales of Communication Products was 34.5% in the first quarter of fiscal 2002 compared with an operating loss percentage of 13.2% in the first quarter last fiscal year. The decline was primarily due to lower gross margins and higher research and development expenses. Consolidated expenses Selling, general and administrative expenses were $3,655,000 in the first quarter of fiscal 2002, a 22% increase compared with first quarter of fiscal 2001 expenses of $2,996,000. The increase was primarily due to expenses related to the pending acquisition of the Company by The Titan Corporation. 7 Research and development expenses were $708,000 in the first quarter of fiscal 2002 compared with $1,023,000 in the first quarter last fiscal year. The 31% decrease was primarily due a reduction in spending on programs to improve mobile DBS antenna products, partially offset by an increase in spending on design improvements for the new GuardianTM radios.
Order backlog at June 30 2001 2000 ----------- ----------- Antenna and Imaging Systems $9,969,000 $19,361,000 Communication Products 2,732,000 7,609,000 ----------- ----------- Total $12,701,000 $26,970,000 =========== ===========
The 49% decrease in Antenna and Imaging Systems backlog at June 30, 2001 compared with June 30, 2000 was primarily due to continued softness in the markets for antenna systems and remote sensing earth stations and to the absence of microwave product orders due to the sale of that product line in the third quarter of fiscal 2001. In addition, $1.4 million of backlog for broadband satellite communication antennas was reversed during the first quarter due to a contract cancellation. The 64% decrease in Communication Products backlog at June 30, 2001 compared with June 30, 2000 was due to low first quarter bookings compared with strong bookings of radio products in the first quarter last fiscal year. An improvement in Communication Products bookings is expected in the second quarter, which should translate into sales growth and improved profitability in the second half of fiscal 2002. Liquidity and Capital Resources At June 30, 2001, working capital was $26,432,000 compared with $27,278,000 at March 31, 2001, a decrease of $846,000, or 3%. Major changes affecting working capital during this period were as follows: accounts receivable decreased $2,515,000 primarily due to low sales during the recent quarter; inventories increased $1,308,000; accounts payable and accrued expenses decreased $2,837,000 primarily due to payment of expenses related to sales in the fourth quarter of fiscal 2001; and income taxes payable decreased $1,184,000. The Company's cash position at June 30, 2001 was $3,678,000 compared with $8,380,000 at March 31, 2001, a decrease of 56%. At June 30, 2001, the Company had no borrowings against its revolving line of credit. Capital equipment expenditures were $172,000 in the first quarter of fiscal 2002 compared with $154,000 in the first quarter last fiscal year. Capital expenditures in fiscal 2002 are expected to be higher than fiscal 2001 expenditures due to anticipated tooling requirements for new products. At June 30, 2001, the Company had a $15,000,000 revolving line of credit with a bank. The line may be used for the issuance of standby letters of credit up to $15,000,00 and working capital advances up to $5,000,000 provided total credit extended does not exceed $15,000,000. The line of credit expires on August 2, 2002 and is not subject to a borrowing base formula. At June 30, 2001, there were no borrowings under the line of credit and the bank had issued letters of credit against the line totaling $4,236,000. The Company believes its existing working capital, anticipated future cash flows from operations and available credit with its bank are sufficient to finance presently planned capital and working capital requirements. Recently Issued Accounting Pronouncements In June 2001, the Financial Accounting Standards Board ("FASB") issued two new pronouncements: Statement of Financial Accounting Standards ("SFAS") No. 141, "Business Combinations," and SFAS No. 142, "Goodwill and Other Intangible Assets." SFAS No. 141 requires that the purchase method of accounting be used for all business combinations initiated after June 30, 2001 and that the use of the pooling-of-interests method is no longer allowed. SFAS No. 142 requires that upon adoption, amortization of goodwill will cease and instead, the carrying value of goodwill will be evaluated for impairment on an annual basis. Identifiable intangible assets will continue to be amortized over their useful lives and reviewed for impairment in accordance with SFAS No. 121 "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of." The Company is required to implement SFAS No. 141 on July 1, 2001 and SFAS No. 142 at the beginning of its next fiscal year, April 1, 2002. The Company is evaluating the impact of the adoption of these standards and has not yet determined the effect, if any, that their adoption will have on its consolidated financial position or results of operations. 8 PART II -- OTHER INFORMATION Item 2. Changes in Securities. Pursuant to a business loan agreement with a bank, the Company must comply with certain financial covenants. The agreement also prohibits the Company from declaration or payment of dividends or other distributions on the Company's stock, except under certain conditions specified in the agreement. The Company is in compliance with both requirements. Item 3. Legal Proceedings. In August 1992, Trans World Communications, Inc. (Trans World), a wholly owned subsidiary of the Company and which was renamed Datron World Communications Inc. on March 31, 1995, was named as defendant in a lawsuit filed by ATACS Corporation (ATACS) and AIRTACS Corporation (AIRTACS) relating to a contract to provide radio communication shelters. ATACS and AIRTACS contend that Trans World entered into an agreement to team with them on the contract and then wrongfully failed to use them as subcontractors. They seek damages in excess of $2,000,000. In rulings on May 28, 1997 and September 3, 1997, the court found Trans World in breach of a teaming agreement and awarded ATACS and AIRTACS one dollar ($1.00) in damages. On September 8, 1998, the U.S. Court of Appeals affirmed the district court's decision except as to the award of nominal damages, and remanded the matter to the district court for further hearing on damages. On June 14, 2000, the district court issued an order awarding ATACS and AIRTACS damages of $30,075 including prejudgment interest. On July 12, 2000, ATACS and AIRTACS appealed the district court's judgment to the U.S. Court of Appeals. On August 7, 2001, the U.S. Court of Appeals reversed the judgment of the district court and remanded the matter to the district court with instructions to recalculate damages. Item 5. Other Information. On July 3, 2001, The Titan Corporation ("Titan") commenced an exchange offer (the "Offer") through its wholly owned subsidiary, Gem Acquisition Corp. ("Merger Sub"), for all of the outstanding shares of common stock ("Datron Common Stock") of Datron Systems Incorporated ("Datron"). The Offer expired at midnight (NYC time) on August 3, 2001 and the Merger Sub accepted for payment approximately 1,953,682 shares tendered by Datron stockholders in the Offer. As a result, Titan owns approximately 69.6% of Datron Common Stock. Each validly tendered share of Datron Common Stock will be exchanged for 0.81919 shares of Titan common stock, and cash will be issued for fractional shares of Titan common stock. In addition, pursuant to the terms of an Agreement and Plan of Merger and Reorganization dated as of June 24, 2001 by and among Datron, Merger Sub and Titan, effective August 3, 2001, Datron's board of directors was increased from six to seven members, three of Datron's board members resigned and Titan designated four directors who were elected to Datron's board. Titan designees now constitute a majority of the Board of Directors of Datron. The Offer is the first step of Titan's two-step acquisition of Datron. The second step will be the merger (the "Merger") of Merger Sub with and into Datron, which will take place as soon as practicable subject to applicable legal requirements. Upon completion of the Merger, Datron will be a wholly owned subsidiary of Titan. Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits: 2.1* Agreement and Plan of Merger and Reorganization dated as of June 24, 2001 by and among Datron Systems Incorporated, The Titan Corporation and Gem Acquisition Corp. 3(ii). Amended and Restated Bylaws of Datron Systems Incorporated as of August 3, 2001. 9 (b) Reports on Form 8-K: The Registrant filed a report on Form 8-K on May 4, 2001 containing the response from David A. Derby, chairman, president and chief executive officer of Datron Systems Incorporated, to the letter dated April 24, 2001 from Duncan Soukup, managing director of Acquisitor plc. The Registrant filed a report on Form 8-K on June 26, 2001 containing the text of the press release it issued on June 25, 2001 announcing the Registrant had entered into an agreement and plan of merger with The Titan Corporation and Gem Acquisition Corp. The same report on Form 8-K contained the response from Victor A. Hebert, legal counsel to Datron Systems Incorporated, to the June 25, 2001 letter from Frank C. Lanza, chairman and chief executive officer of L-3 Communications, to George M. Ball of Philpott Ball & Werner. The Registrant filed a report on Form 8-K on July 3, 2001 containing as an exhibit the Merger Agreement with The Titan Corporation and Gem Acquisition Corp. previously announced on June 25, 2001. The same report on Form 8-K contained the response from David A. Derby to the June 28, 2001 letter from Mr. Lanza in which Mr. Lanza proposed that L-3 Communications acquire all of the Registrant's outstanding common stock and options to purchase common stock for $16.25 per share. * Incorporated by this reference to Exhibit 99.16 to Registrant's Form 8-K filed with the Commission on July 3, 2001. 10 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.
DATRON SYSTEMS INCORPORATED Date: August 10, 2001 By: WILLIAM L. STEPHAN WILLIAM L. STEPHAN Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)
11 EX-3 3 ex3.txt EXHIBIT 3(II) AMENDED AND RESTATED BYLAWS Exhibit 3(ii) AMENDED AND RESTATED BYLAWS OF DATRON SYSTEMS INCORPORATED (As of August 03, 2001) REGISTERED OFFICE AND REGISTERED AGENT 1. Registered Office. The corporation shall have and maintain in the State of Delaware a registered office which may, but need not be, the same as its place of business. The corporation by resolution of its Board of Directors or the corporation's registered agent may change the location of the corporation's registered office to any other place in Delaware. A certificate certifying the change shall be filed with the Secretary of State and a certified copy of the filed certificate shall be recorded in the office of the Recorder for the county in which the new office is located; and, if such new office is located in a county other than that in which the former office was located, a certified copy of such filed certificate shall also be recorded in the office of the Recorder for the county in which such former office was located. 2. Registered Agent. The corporation shall have and maintain in the State of Delaware a registered agent, which agent may be either (1) an individual resident in the State of Delaware whose business office is identical with the corporation's registered office or (2) a domestic corporation, which may be itself, or a foreign corporation, authorized to transact business in the State of Delaware, having a business office identical with the corporation's registered office. The corporation by resolution of its Board of Directors may change the registered agent of the corporation. A certificate certifying the change shall be filed with the Secretary of State and a certified copy of the filed certificate shall be recorded in the office of the Recorder for the county in which the registered agent is located. STOCKHOLDERS 3. Time and Place of Meetings. All meetings of the stockholders shall be held at such time and place, either within or without the State of Delaware, as shall be fixed by the Board of Directors and stated in the notice or waiver of notice of the meeting. 4. Annual Meeting. An annual meeting of the stockholders for the election of directors and for the transaction of other proper business as may come before the meeting shall be held at 11:00 A.M. on the first Tuesday of the fifth calendar month following the end of the corporation's fiscal year, or at such other time and place as the Board of Directors shall designate; provided that the Board of Directors shall hold an annual meeting within thirteen months after the organization of the corporation or its last annual meeting. 5. Special Meetings. Special meetings of the stockholders, other than those required by statute, may be called at any time by the Board of Directors pursuant to a resolution approved by a majority of the whole Board of Directors. The Board of Directors may postpone or reschedule any previously scheduled special meeting. 6. Notice. a) Annual and Special Meetings. A written notice of the annual meeting or of a special meeting shall be given which shall state the place, date and time of the meeting, and in the case of a special meeting, the purpose or purposes for which the meeting is called. Unless otherwise provided by statute, such written notice of any meeting shall be given not less than 10 nor more than 60 days before the date of the meeting to each stockholder entitled to vote at such meeting. If mailed, notice is given when deposited in the United States mail, postage prepaid, directed to the stockholder at the stockholder's address as it appears on the records of the corporation. (b) Adjourned Meeting. Notice of an adjourned meeting need not be given if the place, date and time of the adjourned meeting are announced at the meeting at which the adjournment is taken and the adjournment is not for more than 30 days. At the adjourned meeting the corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than 30 days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given as in the case of an annual or special meeting. 7. Quorum and Required Vote. Except as otherwise provided by statute, the Delaware General Corporation Law, the Certificate of Incorporation or these Bylaws, (1) a majority of the shares entitle d to vote, present in person or represented by a proxy, shall constitute a quorum at the meeting of stockholders, (2) the affirmative vote of the majority of shares present in person or represented by proxy at the meeting and entitled to vote on the subject matter shall be the act of the stockholders, and (3) when a separate vote by class is required, the affirmative vote of the majority of shares of such class present in person or represented by proxy at the meeting shall be the act of the class. 8. Voting. Except as otherwise provided by the Delaware General Corporation Law or the Certificate of Incorporation, each holder of voting stock on the record date fixed pursuant to these Bylaws and registered in the holder's name on the books of the corporation for the determination of stockholders who shall be entitled to vote at such meetings shall, at each meeting of the stockholders, be entitled to one vote for each share of stock held. Each stockholder entitled to vote at a meeting of stockholders or to express consent or dissent to corporate action in writing without a meeting may authorize another person or persons to act for such stockholder by proxy, but no such proxy shall be voted or acted upon after 3 years from its date, unless the proxy provides for a longer period. A duly executed proxy shall be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. A proxy may be made irrevocable regardless of whether the interest with which it is coupled is an interest in the stock itself or an interest in the corporation generally. 9. List of Stockholders and Stock Ledger. The officer who has charge of the stock ledger of the corporation shall prepare and make, at least 10 days before every meeting of stockholders, a complete list of stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least 10 days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. The stock ledger shall be the only evidence as to who are the stockholders entitled to examine the stock ledger, the list of stockholders required by this paragraph or the books of the corporation or to vote in person or by proxy at any meeting of stockholders. 10. Consent of Stockholders in Lieu of Meeting. Unless otherwise provided in the Certificate of Incorporation, any action required to be taken, or any action which may be taken, at an annual or special meeting of the stockholders of the corporation, 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. 10A. Advance Notice of Stockholder Nominations and Proposals. Nominations of persons for election to the Board and the proposal of business to be transacted by the stockholders may be made at an annual meeting of stockholders (a) pursuant to the corporation's notice with respect to such meeting, (b) by or at the direction of the Board or (c) by any stockholder of record of the corporation who was a stockholder of record at the time of the giving of the notice provided for in the following paragraph, who is entitled to vote at the meeting and who has complied with the notice procedures set forth in this section. For nominations or other business to be properly brought before an annual meeting by a stockholder pursuant to clause (c) of the foregoing paragraph, (1) the stockholder must have given timely notice thereof in writing to the Secretary of the corporation, (2) such business must be a proper matter for stockholder action under the Delaware General Corporation Law, (3) if the stockholder, or the beneficial owner on whose behalf any such proposal or nomination is made, has provided the corporation with a Solicitation Notice, as that term is defined in subclause (c)(iii) of this paragraph, such stockholder or beneficial owner must, in the case of a proposal, have delivered a proxy statement and form of proxy to holders of at least the percentage of the corporation's voting shares required under applicable law to carry any such proposal, or, in the case of a nomination or nominations, have delivered a proxy statement and form of proxy to holders of a percentage of the corporation's voting shares reasonably believed by such stockholder or beneficial holder to be sufficient to elect the nominee or nominees proposed to be nominated by such stockholder, and must, in either case, have included in such materials the Solicitation Notice, and (4) if no Solicitation Notice relating thereto has been timely provided pursuant to this section, the stockholder or beneficial owner proposing such business or nomination must not have solicited a number of proxies sufficient to have required the delivery of such a Solicitation Notice under this section. To be timely, a stockholder's notice shall be delivered to the Secretary at the principal executive offices of the corporation not less than 45 or more than 75 days prior to the first anniversary (the "Anniversary") of the date on which the corporation first mailed its proxy materials for the preceding year's annual meeting of stockholders; provided, however, that if the date of the annual meeting is advanced more than 30 days prior to or delayed by more than 30 days after the anniversary of the preceding year's annual meeting, notice by the stockholder to be timely must be so delivered not later than the close of business on the later of (i) the 90th day prior to such annual meeting or (ii) the 10th day following the day on which public announcement of the date of such meeting is first made. Such stockholder's notice shall set forth (a) as to each person whom the stockholder proposes to nominate for election or reelection as a director all information relating to such person as would be required to be disclosed in solicitations of proxies for the election of such nominees as directors pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and such person's written consent to serve as a director if elected; (b) as to any other business that the stockholder proposes to bring before the meeting, a brief description of such business, the reasons for conducting such business at the meeting, and any material interest in such business of such stockholder and the beneficial owner, if any, on whose behalf the proposal is made; (c) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made (i) the name and address of such stockholder, as they appear on the corporation's books, and of such beneficial owner, (ii) the class and number of shares of the corporation that are owned beneficially and of record by such stockholder and such beneficial owner, and (iii) whether either such stockholder or beneficial owner intends to deliver a proxy statement and form of proxy to holders of, in the case of a proposal, at least the percentage of the corporation's voting shares required under applicable law to carry the proposal or, in the case of a nomination or nominations, a sufficient number of holders of the corporation's voting shares to elect such nominee or nominees (an affirmative statement of such intent, a "Solicitation Notice"). Notwithstanding anything in the second sentence of the second paragraph of this Section 10A to the contrary, in the event that the number of directors to be elected to the Board is increased and there is no public announcement naming all of the nominees for director or specifying the size of the increased Board made by the corporation at least 55 days prior to the Anniversary, a stockholder's notice required by this Bylaw shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be delivered to the Secretary at the principal executive offices of the corporation not later than the close of business on the 10th day following the day on which such public announcement is first made by the corporation. Only persons nominated in accordance with the procedures set forth in this Section 10A shall be eligible to serve as directors and only such business shall be conducted at an annual meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in this section. The chair of the meeting shall determine whether a nomination or any business proposed to be brought before the meeting has been made in accordance with the procedures set forth in these Bylaws and, if any proposed nomination or business is not in compliance with these Bylaws, to declare that such defective proposed business or nomination shall not be presented for stockholder action at the meeting and shall be disregarded. Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the corporation's notice of meeting. Nominations of persons for election to the Board may be made at a special meeting of stockholders at which directors are to be elected pursuant to the corporation's notice of meeting (a) by or at the direction of the Board or (b) by any stockholder of record of the corporation who is a stockholder of record at the time of giving of notice provided for in this paragraph, who shall be entitled to vote at the meeting and who complies with the notice procedures set forth in this Section 10A. Nominations by stockholders of persons for election to the Board may be made at such a special meeting of stockholders if the stockholders' notice required by the second paragraph of this Section 10A is delivered to the Secretary at the principal executive offices of the corporation not later than the close of business on the later of the 90th day prior to such special meeting or the 10th day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board to be elected at such meeting. For purposes of this section, "public announcement" shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or a comparable national news service or in a document publicly filed by the corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act. Notwithstanding the foregoing provisions of this Section 10A, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to matters set forth in this Section 10A. Nothing in this Section 10A shall affect any rights of stockholders to request inclusion of proposals in the corporation's proxy statement pursuant to Rule 14a-8 under the Exchange Act. BOARD OF DIRECTORS 11. Powers. The business and affairs of the corporation shall be managed by or under the direction of its Board of Directors. 12. Number, Classification and Term of Office. The number of directors of the corporation shall be seven (7). The number of directors of the corporation may be changed from time to time by resolution adopted by a majority of the total authorized number of directors, but in no event shall the number of directors be less than one or more than nine. No decrease in the number of directors shall have the effect of shortening the term of office of any incumbent director. Election of the directors shall take place at the annual meeting of the stockholders. Each director elected shall hold office until the director's successor is elected and qualified or until the director's death, resignation or removal. 13. Resignations. A director may resign at any time by giving written notice to the corporation and such resignation shall be effective when given unless the director specifies a later time. The resignation shall be effective regardless of whether it is accepted by the corporation. 14. Removal of Directors. A director may be removed with or without cause by the holders of a majority of the shares then entitled to vote at an election of directors. 15. Vacancies and Newly Created Directorships. Unless otherwise provided in the Certificate of Incorporation or these Bylaws, (1) vacancies and newly created directorships resulting from any increase in the authorized number of directors elected by all of the stockholders having the right to vote as a single class may be filled by a majority of the directors then in office, although less than a quorum, or by a sole remaining director, (2) any directors so chosen shall hold office until the next annual meeting, and until their successors shall be elected and qualified and (3) when one or more directors shall resign from the Board of Directors, effective at a future date, a majority of the directors then in office, including those who have so resigned, shall have power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations shall become effective. If at the time of filling any vacancy or newly created directorship, the directors then in office shall constitute less than a majority of the whole Board of Directors (as constituted immediately prior to any such increase), any stockholder or stockholders holding at least 10 percent of the total number of shares at the time outstanding having the right to vote for such directors, may apply to the Delaware Court of Chancery for a summary order that an election be held to fill any such vacancies or newly created directorships, or to replace the directors chosen by the directors then in office. 16. Time and Place of Meeting. All meetings of the Board of Directors shall be held at such time and place, either within or without the State of Delaware, as shall be fixed by the Board of Directors or stated in the notice or waiver of notice of the meeting. 17. Regular Meetings. Unless the Board of Directors determines otherwise, the Board of Directors shall hold a regular meeting during each quarter of the corporation's fiscal year. Unless fixed by the Board of Directors, these meetings shall be called by the Chairman of the Board, the President or any director. One such meeting shall take place immediately after the annual meeting of stockholders. 18. Special Meetings. Special meetings of the Board of Directors may be called by the Chairman of the Board, the President or any director. 19. Notice of Meetings. (a) Regular and Special Meetings. Regular meetings of the Board of Directors may be held without notice if the time and place of the meetings has been fixed by the Board of Directors. Special meetings and regular meetings not fixed by the Board of Directors shall be held upon 4 days notice by mail or 48 hours notice delivered personally or by telephone or telegraph which shall state the place, date and time of the meeting. Notice need not specify the purpose of any regular or special meeting. (b) Adjourned Meetings. Notice of an adjourned meeting need not be given if the place, date and time of the adjourned meeting are announced at the meeting at which the adjournment is taken and the adjournment is not for more than 48hours. If a meeting is adjourned for more than 48 hours, notice of the adjourned meeting shall be given prior to the time of that meeting to the directors who were not present at the time of the adjournment. 20. Action Without Meeting. Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, any action required or permitted to be taken at any meeting of the Board of Directors or any committee thereof may be taken without a meeting if all members of the Board of Directors or committee thereof, 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 thereof. 21. Meeting by Telephone. Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, members of the Board of Directors or any committee thereof may participate in the meeting of the Board of Directors or committee thereof by means of conference telephone or similar communications equipment if all persons who participate in the meeting can hear each other and such participation in a meeting shall constitute presence in person at such meeting. 22. Quorum and Manner of Acting. Except as otherwise provided by the Delaware General Corporation Law, the Certificate of Incorporation or these Bylaws, the majority of the total number of directors shall be required to constitute a quorum for the transaction of business at any meeting of the Board of Directors or any committee thereof, and the act of the majority of the directors present at any meeting at which a quorum is present shall be the act of the Board of Directors. 23. Committees. The Board of Directors may, by a resolution passed by a majority of the whole Board of Directors, 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 the committee. In the absence or disqualification of a member of a committee, the member or members present at any meeting and not disqualified from voting, whether or not the member or 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 such committee, to the extent permitted by law and to the extent provided in the resolution of the Board of Directors or in the Bylaws of the corporation, shall have and may exercise all the powers 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; but no such committee shall have the power or authority to (1) amend the Certificate of Incorporation (except that a committee may, to the extent authorized in the resolution or resolutions providing the issuance of shares of stock adopted by the Board of Directors as provided in Section 151(a) of the Delaware General Corporation Law, fix the designations and any of the preferences or rights of such shares relating to dividends, redemption, dissolution, any distribution of assets of the corporation or the conversion into, or the exchange of such shares for, shares of any other class or classes or any other series of the same or any other class or classes of stock of the corporation), (2) adopt an agreement of merger or consolidation under Section 251 or Section 252 of the Delaware General Corporation Law, (3) recommend to the stockholders the sale, lease or exchange of all or substantially all of the corporation's property and assets, (4) recommend to the stockholders dissolution of the corporation or a revocation of a dissolution or (5) amend these Bylaws and, unless the resolution, Certificate of Incorporation or these Bylaws expressly provide, no such committee shall have the power or authority to declare a dividend, to authorize the issuance of stock or to adopt a certificate of ownership in a merger pursuant to Section 253 of the Delaware General Corporation Law. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the Board of Directors. The Board of Directors shall have the power, at any time for any reason, to change the members of, to fill vacancies on, and to discontinue any such committee. Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors when the Board of Directors requires. 24. Compensation of Directors. 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 or a committee thereof, may be paid a fixed sum for attendance at each meeting of the Board of Directors or a committee thereof and may be paid a stated salary as director. No such payment shall preclude any director from serving the corporation in any other capacity and receiving compensation therefor. OFFICERS 25. Titles. The officers of the corporation shall be chosen by the Board of Directors and shall include a President, a Secretary and a Treasurer. The Board of Directors may also appoint a Chairman of the Board, selected from the directors on the Board of Directors, one or more Vice-Presidents, Assistant Vice-Presidents, Assistant Secretaries, Assistant Treasurers and such other officers and agents with such powers and duties as it shall deem necessary. Any number of offices may be held by the same person unless otherwise provided by the Certificate of Incorporation or these Bylaws. 26. Election, Term of Office and Vacancies. The officers shall be elected annually by the Board of Directors at its regular meeting following the annual meeting of the stockholders, and each officer shall hold office until the next annual election of officers and until the officer's successor is elected and qualified, or until the officer's death, designation or removal. Any officer may be removed at any time, with or without cause, by the Board of Directors. Any vacancy occurring in any office may be filled by the Board of Directors. 27. Resignation. Any officer may resign at any time upon notice to the corporation and such resignation shall be effective when given unless the officer specifies a later time. The resignation shall be effective regardless of whether it is accepted by the corporation. 28. Chairman of the Board. If the Board of Directors elects a Chairman of the Board, the Chairman of the Board shall preside over all meetings of the Board of Directors and stockholders. The Chairman of the Board shall be an ex- officio member of all committees of the Board of Directors. 29. President. The President, subject to the general control of the Board of Directors, shall be the chief executive officer of the corporation, and, as such, shall be responsible for the management and direction of the affairs of the corporation, its officers, employees and agents. If the Board of Directors does not elect a Chairman of the Board, the President shall preside over all meetings of the Board of Directors and stockholders. The President shall exercise such other powers and duties as may be assigned by these Bylaws or by the Board of Directors and shall see that all orders and resolutions of the Board of Directors are carried into effect. The President shall be an ex-officio member of all committees of the Board of Directors. 30. Secretary and Assistant Secretaries. The Secretary shall attend meetings of the shareholders and the Board of Directors and committees thereof and shall (1) record all votes and the minutes of such meetings in a book to be kept at the registered office of the corporation, its principal place of business or at such other place as the Board of Directors may determine, (2) see that all notices are duly given in accordance with the provisions of these Bylaws as required by law, (3) give or cause to be given, notice of all meetings of the stockholders and the Board of Directors and committees thereof, (4) be custodian of all corporate records (other than financial) and of the seal of the corporation,(5) have authority to affix the seal to all documents requiring it and attest to the same, (6) perform all duties incident to the office of Secretary and (7) have such other duties and powers as may, from time to time, be assigned by the Board of Directors or President. Unless a transfer agent is appointed by the Board of Directors to keep a share register, the Secretary shall keep a share register at the registered office of the corporation, its principal place of business or at such other place as the Board of Directors may determine showing the names of the shareholders and their addresses, the number and class of shares held by each, the number and date of certificates issued and the number and date of cancellation of each certificate surrendered for cancellation. At the request of the Secretary, or in the Secretary's absence or disability, any Assistant Secretary shall perform any of the duties of the Secretary and when so acting, shall have all the powers of, and be subject to all the restrictions upon, the Secretary. 31. Treasurer and Assistant Treasurers. The Treasurer shall (1) have custody of all the corporate funds and securities, (2) keep adequate and correct accounts of the properties and business transactions, (3) disburse such funds of the corporation as may be ordered by the Board of Directors or the President, taking proper vouchers for such disbursements, (4) render to the Board of Directors or the President whenever they may require an account of all transactions and the financial condition of the corporation, (5) perform all other duties commonly incident to the office of Treasurer and (6) have such other duties and powers as may, from time to time, be assigned by the Board of Directors or the President. At the request of the Treasurer or in the Treasurer's absence or disability, any Assistant Treasurer may perform any of the duties of the Treasurer and when so acting shall have all the powers, of and be subject to all the restrictions upon, the Treasurer. 32. Compensation. The compensation of all officers and agents of the corporation shall be fixed by the Board of Directors from time to time. EXECUTION OF INSTRUMENTS 33. Authority. Unless otherwise provided by the Board of Directors, deeds, notes, contracts and any other corporate instrument or document may be executed on behalf of the corporation by the signature of the Chairman of the Board, the President or a Vice-President when attested by the Secretary or an Assistant Secretary or by such officers as may be duly authorized to exercise the duties, respectively, ordinarily exercised by the President, Vice- President, Secretary or Assistant Secretary of the Corporation. STOCK AND DIVIDENDS 34. Certificates for Shares. The shares of the corporation shall be represented by certificates which shall be numbered and entered in the books of the corporation as they are issued. The certificates shall exhibit the holder's name and number of shares and shall be signed by or in the name of the corporation by the Chairman of the Board of Directors, the President or a Vice-President and by the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary. Any or all of 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 such certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, such certificate may nevertheless be issued by the corporation with the same effect as if such officer, transfer agent or registrar were such officer, transfer agent or registrar at the date of issuance. 35. Issuance of Additional Stock. The Board of Directors may, at any time and from time to time, if all of the shares of capital stock which the corporation is authorized by the Certificate of Incorporation to issue have not been issued, subscribed for, or otherwise committed to be issued, issue or take subscriptions for additional shares of the corporation's capital stock up to the amount authorized in the Certificate of Incorporation. 36. Transfer. Upon surrender to the corporation or the transfer agent of the corporation of a certificate of stock duly endorsed or accompanied by proper evidence of succession, assignation, or authority to transfer the corporation shall issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books. 37. Lost, Stolen or Destroyed Stock Certificates. The corporation may issue a new certificate of stock in place of any certificate 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 to be lost, stolen or destroyed. In authorizing such issue of a new certificate the corporation may as a condition precedent to such issue require the owner of such lost, stolen or destroyed certificate to give the corporation a bond sufficient to indemnify it against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate. 38. Dividends. Subject to the Delaware General Corporation Law, the Certificate of Incorporation and these Bylaws, dividends upon the capital stock of the corporation may be declared by the Board of Directors and such dividends may be paid in cash, property or shares of the capital stock. RECORD DATE 39. 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 to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of 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 60 nor less than 10 days before the date of such meeting, nor more than 60 days prior to any other action. If no record date is fixed, the record date (1) for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held, (2) for determining stockholders entitled to express consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is necessary, shall, subject to the next paragraph, be the day on which the first written consent is expressed, (3) for determining stockholders for any other purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto. 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 that the Board of Directors may fix a new record date for the adjourned meeting. Any stockholder of record seeking to have the stockholders authorize or take corporate action by written consent shall, by written notice to the Secretary, request the Board of Directors to fix a record date. The Board of Directors shall promptly, but in all events within 10 days after the date on which such a request is received, adopt a resolution fixing the record date. If no record date has been fixed by the Board of Directors within 10 days of the date on which such a request is received, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is required by applicable law, shall be the day on which the first written consent is expressed. If no record date has been fixed by the Board of Directors and prior action by the Board of Directors is required by applicable law, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the date on which the Board of Directors adopts the resolution taking such prior action. CONFLICTS OF INTEREST 40. Loans and Guarantees. The corporation may lend money to, or guarantee any obligation of, or otherwise assist any officer or other employee of the corporation or of its subsidiary, including any officer or employee who is a director of the corporation or its subsidiary, whenever, in the judgment of the Board of Directors, such loan, guarantee or assistance may reasonably be expected to benefit the corporation. The loan, guarantee or other assistance may be with or without interest, and may be unsecured, or secured in such manner as the Board of Directors shall approve, including, without limitation, a pledge of shares of stock of the corporation. 41. Interested Directors. No contract or transaction between the corporation and one or more of its directors or officers, or between a corporation and any other corporation, partnership, association or other organization in which one or more of its directors or officers are directors or officers, or have a financial interest, shall be void or voidable solely for this reason, or solely because the director or officer is present at or participates in the meeting of the Board of Directors or committee thereof which authorizes the contract or transaction, or solely because an interested director's votes are counted for such purpose, if (1) the material facts as to the interested director's relationship or interest and as to the contract or transaction are disclosed or are known to the Board of Directors or committee thereof, and the Board of Directors or committee thereof in good faith authorizes the contract or transaction by the affirmative votes of a majority of the disinterested directors, even-though the disinterested directors be less than a quorum, or (2) the material facts as to the interested director's relationship or interest and as to the contract or transaction are disclosed or are known to the shareholders entitled to vote thereon and the contract or transaction is specifically approved in good faith by the vote of the shareholders or (3) the contract or transaction is fair as to the corporation as of the time it is authorized, approved or ratified by the Board of Directors, a committee thereof or the shareholders. Common or interested directors may be counted in determining the presence of a quorum at a meeting of the Board of Directors or a committee thereof which authorizes the contract or transaction. INDEMNIFICATION AND INSURANCE 42. Indemnification of Officers, Directors, Employees and Agents. (a) Right of Indemnity. The corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suitor proceeding whether civil, criminal, administrative or investigative, whether or not the action is by or in the right of the corporation, by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit or proceeding to the maximum extent permitted by Section 145 of the Delaware General Corporation Law, as amended from time to time. For purposes of these subparagraphs, "the corporation," "other enterprises," "fines," and "serving at the request of the corporation" shall have the meaning specified in Section 145. (b) Approval of Indemnity. Upon written request to the Board of Directors by any person seeking indemnification under Section 145(a) or (b), the Board of Directors shall approve indemnification upon a determination that indemnification of the person is proper in the circumstances because the person has met the applicable standard of conduct set forth in Section 145(a) or (b). Such determination shall be made (1) by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (2) if such a quorum is not obtainable, or, even if obtainable a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, or (3) if there are no disinterested directors, by the stockholders. (c) Advancement of Expenses. Expenses incurred by any person entitled to indemnification under this Bylaw in defending a civil or criminal action, suit or proceeding shall be paid by the corporation in advance of the final disposition of such action, suit or proceeding, provided that, if Section 145 so requires, the payment of such expenses incurred by an officer or director in his or her capacity as such (and not in any other capacity in which a director or officer, including without limitation service with respect to an employee benefit plan) in advance of an action, suit or proceeding shall only be made upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that such director or officer is not entitled to be indemnified by the corporation as authorized in Section 145. (d) Non-exclusivity of Rights. The right to indemnification and payment of expenses incurred in defending a proceeding in advance of its final disposition conferred in this Bylaw shall not be exclusive of any other right which any person ma y have or hereafter acquire under any statute, provision of the Certificate of Incorporation, Bylaw, agreement, vote of stockholders or disinterested directors or otherwise. Such rights shall continue as to a person who has ceased to be an officer, director, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person. (e) Contract Right. The right to indemnification confirmed by this Bylaw shall be a contract right. (f) Proceedinqs bv Indemnitee. A person otherwise entitled to indemnification in connection with any action, suit or proceeding (or part thereof) initiated by such person shall only be indemnified for, or have his or her expenses advanced in connection therewith, if such proceedings (or part thereof) are authorized by the Board of Directors. 43. Insurance. Upon resolution passed by the Board of Directors, the corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as the director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of any such persons status as such, whether or not the corporation would have the power to indemnify such person against such liability under Section 145 of the Delaware General Corporation Law. WAIVER OF NOTICE 44. Waiver of Notice. Whenever notice is required to be given under the Delaware General Corporation Law, the Certificate of Incorporation or these Bylaws, a written waiver of notice, signed by the person entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Unless so required by the Certificate of Incorporation or these Bylaws, neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders, directors or members of a committee of directors need be specified in any written waiver of notice. INSPECTION OF BOOKS AND RECORDS 45. Stockholders. Any stockholder, in person or by an attorney or other agent, shall, upon written demand under oath stating the purpose thereof, have the right during the usual hours for business to inspect for any proper purpose the corporation's stock ledger, a list of its stockholders and its other books and records and to make copies or extracts there from. A proper purpose shall mean a purpose reasonably related to such person's interest as a stockholder. In every instance where an attorney or other agent shall be the person who seeks the right to inspection, the demand under oath shall be accompanied by a power of attorney or such other writing which authorizes the attorney or other agent to so act on behalf of the stockholder. The demand under oath shall be directed to the corporation at its registered office in the State of Delaware or at its principal place of business. The stock ledger shall be the only evidence as to who are the stockholders entitled to examine the stock ledger, the list of stockholders and the other books and records of the corporation. 46. Directors. Any director shall have the right to examine the corporation's stock ledger, a list of its stockholders and its other books and records for a purpose reasonably related to such director's position as a director. 47. Form of Records. Any records maintained by a corporation in the regular course of its business, including its stock ledger, books of account, and minute books, may be kept on, or be in the form of, punch cards, magnetic tape, photographs, micro photographs or any other information storage device, provided that the record so kept can be converted in clearly legible written form within a reasonable time. The corporation shall so convert any record so kept upon the request of any person entitled to inspect the same. AMENDMENTS 48. Amendments. These Bylaws may be amended or repealed or new bylaws may be adopted, by the stockholders or by the Board of Directors. FISCAL YEAR 49. Fiscal Year. Unless otherwise fixed by resolution by the Board of Directors, the fiscal year of the corporation shall end March 31st. -----END PRIVACY-ENHANCED MESSAGE-----