-----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, Sbi6Wp4sp4WFM4qKNF77+diNx9Ghl/g9/GsC/0E1GMkMd7bIBP3yDpu88WehC6WC 67eXIhWdFP3D25CWbMdoWw== 0000950134-98-004689.txt : 19980525 0000950134-98-004689.hdr.sgml : 19980525 ACCESSION NUMBER: 0000950134-98-004689 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 19980522 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: VERTEX COMMUNICATIONS CORP /TX/ CENTRAL INDEX KEY: 0000780416 STANDARD INDUSTRIAL CLASSIFICATION: RADIO & TV BROADCASTING & COMMUNICATIONS EQUIPMENT [3663] IRS NUMBER: 751982974 STATE OF INCORPORATION: TX FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: S-3 SEC ACT: SEC FILE NUMBER: 333-53391 FILM NUMBER: 98630400 BUSINESS ADDRESS: STREET 1: 2600 N LONGVIEW ST STREET 2: PO BOX 1277 CITY: KILGORE STATE: TX ZIP: 75662 BUSINESS PHONE: 9039840555 S-3 1 FORM S-3 1 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 22, 1998 REGISTRATION NO. 333- ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------------------------ FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 VERTEX COMMUNICATIONS CORPORATION (Exact name of registrant as specified in its charter) TEXAS 75-1982974 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) J. REX VARDEMAN PRESIDENT AND CHIEF EXECUTIVE OFFICER VERTEX COMMUNICATIONS CORPORATION 2600 NORTH LONGVIEW STREET 2600 NORTH LONGVIEW STREET KILGORE, TEXAS 75662 KILGORE, TEXAS 75662 (903) 984-0555 (903) 984-0555 (Address, including zip code, and (Name, address, including zip code, and telephone number, including area code, telephone number, including area code, of registrant's principal executive offices) of agent for service)
------------------------ Copy to: BILL R. WOMBLE, ESQ. THOMPSON & KNIGHT, P.C. 1700 PACIFIC AVENUE, SUITE 3300 DALLAS, TEXAS 75201 (214) 969-1700 ------------------------ APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to time after the effective date of this Registration Statement. If the only securities being registered on this form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [ ] If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. [X] If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [ ] ------------------------ CALCULATION OF REGISTRATION FEE
========================================================================================================================= PROPOSED MAXIMUM PROPOSED MAXIMUM TITLE OF EACH CLASS OF AMOUNT OFFERING PRICE AGGREGATE AMOUNT OF SECURITIES TO BE REGISTERED TO BE REGISTERED PER SHARE(1) OFFERING PRICE(1) REGISTRATION FEE - ------------------------------------------------------------------------------------------------------------------------- Common Stock, $.10 par value per share.................. 474,349 shares $24.25 $11,502,963.00 $3,393.37 =========================================================================================================================
(1) Estimated pursuant to Rule 457(c) under the Securities Act of 1933 solely for the purpose of calculating the registration fee, based on the average of the high and low sale prices of the Common Stock on the Nasdaq National Market on May 18, 1998. THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE. ================================================================================ 2 INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE. SUBJECT TO COMPLETION, DATED MAY 22, 1998 PROSPECTUS 474,349 SHARES VERTEX COMMUNICATIONS CORPORATION COMMON STOCK ------------------------ All of the 474,349 shares (the "Shares") of Common Stock, par value $.10 per share ("Common Stock"), of Vertex Communications Corporation, a Texas corporation (the "Company"), offered hereby are being offered by and for the account of certain shareholders of the Company (the "Selling Shareholders") who received Common Stock in connection with an acquisition made by the Company. See "Selling Shareholders". The Common Stock is traded on the Nasdaq National Market System (the "Nasdaq") under the symbol "VTEX". On May 18, 1998, the last reported sale price of the Common Stock on the Nasdaq was $24.25 per share. SEE "RISK FACTORS" BEGINNING ON PAGE 4 FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE COMMON STOCK OFFERED HEREBY. ------------------------ The Shares were issued to the Selling Shareholders in connection with a reorganization exempt from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"), pursuant to Section (4)2 thereof and Regulation D thereunder. After June 10, 1998, the Shares may be offered by the Selling Shareholders from time to time in open market transactions (which may include block transactions) or otherwise in the over-the-counter market through the Nasdaq, or in private transactions at prices relating to prevailing market prices or at negotiated prices. The Selling Shareholders may effect such transactions by selling Shares to or through broker-dealers, and such broker-dealers may receive compensation in the form of discounts, concessions or commissions from the Selling Shareholders and/or the purchasers of Shares for whom such broker-dealers may act as agent or to whom they sell as principal or both (which compensation as to a particular broker-dealer might be in excess of customary commissions). The Selling Shareholders and any broker-dealer acting in connection with the sale of the Shares offered hereby may be deemed to be "underwriters" within the meaning of the Securities Act, in which event any discounts, concessions or commissions received by them, which are not expected to exceed those customary in the types of transactions involved, or any profit on resales of the Shares by them, may be deemed to be underwriting commissions or discounts under the Securities Act. See "Plan of Distribution" and "Selling Shareholders". The Company will receive no part of the proceeds of sales made hereunder. All expenses of registration incurred in connection with this offering are being borne by the Company, but all selling and other expenses incurred by the Selling Shareholders will be borne by such Selling Shareholders. See "Selling Shareholders". Certain transfer restrictions have been placed on the Shares offered hereunder by agreement between the Company and the Selling Shareholders. As a result, no Shares may be sold prior to June 10, 1998 or after March , 1999. See "Selling Shareholders". ------------------------ THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. ------------------------ The date of this Prospectus is , 1998. 3 AVAILABLE INFORMATION The Company is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act") and, in accordance therewith, files reports, proxy statements and other information with the Securities and Exchange Commission (the "Commission"). Such reports, proxy statements and other information can be inspected and copied at the office of the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, as well as at the regional offices of the Commission at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661, and Seven World Trade Center, 13th Floor, New York, New York 10048. Copies of such information can be obtained by mail from the Public Reference Section of the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. Additionally, the Commission maintains a web site that contains reports, proxy statements and other information regarding registrants (including the Company) that file electronically with the Commission. The address of the Commission's web site is http://www.sec.gov. The Company's Common Stock is listed on the Nasdaq and copies of reports, proxy statements and other information concerning the Company also can be inspected at the offices of the Nasdaq National Market, 1735 K Street, NW, Washington, D.C. 20006. This Prospectus constitutes a part of a registration statement on Form S-3 (the "Registration Statement") filed by the Company with the Commission under the Securities Act. This Prospectus does not contain all the information set forth in the Registration Statement, certain parts of which are omitted in accordance with the rules and regulations of the Commission, and reference is hereby made to the Registration Statement and to the exhibits relating thereto for further information with respect to the Company and the Shares offered hereby. Any statements contained herein concerning the provisions of any document are not necessarily complete, and, in each instance, reference is made to a copy of such document filed as an exhibit to the Registration Statement or otherwise filed with the Commission. Each such statement is qualified in its entirety by such reference. Copies of the Registration Statement and the exhibits thereto may be inspected, without charge, at the offices of the Commission, or obtained at prescribed rates from the Public Reference Section of the Commission at the address set forth above. 2 4 INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following documents heretofore filed by the Company with the Commission (File No. 0-15277) pursuant to the Exchange Act are hereby incorporated by reference into this Prospectus: (1) The Company's Annual Report on Form 10-K for the fiscal year ended September 30, 1997; and (2) The Company's quarterly report on Form 10-Q for the quarter ended January 2, 1998; and (3) The Company's quarterly report on Form 10-Q for the quarter ended April 3, 1998; and (4) The description of the Common Stock contained in the Registration Statement on Form 8-A of the Company heretofore filed with the Commission, including any amendments or reports filed for the purpose of updating such description. All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to the filing of a post-effective amendment which indicates that all Shares offered hereby have been sold or which deregisters all Shares then remaining unsold, shall be deemed to be incorporated by reference into this Prospectus and to be a part hereof from the date of filing of such documents. Any statement contained in this Prospectus or in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. THE COMPANY UNDERTAKES TO PROVIDE WITHOUT CHARGE TO EACH PERSON, INCLUDING ANY BENEFICIAL OWNER, TO WHOM THIS PROSPECTUS IS DELIVERED, ON THE WRITTEN OR ORAL REQUEST OF ANY SUCH PERSON, A COPY OF ANY AND ALL OF THE DOCUMENTS INCORPORATED BY REFERENCE HEREIN (OTHER THAN EXHIBITS TO SUCH DOCUMENTS WHICH ARE NOT SPECIFICALLY INCORPORATED BY REFERENCE IN SUCH DOCUMENTS). WRITTEN REQUESTS FOR SUCH COPIES SHOULD BE DIRECTED TO THE COMPANY, 2600 NORTH LONGVIEW STREET, KILGORE, TEXAS 75662, ATTENTION: JAMES D. CARTER, VICE PRESIDENT AND CHIEF FINANCIAL OFFICER. TELEPHONE REQUESTS MAY BE DIRECTED TO JAMES D. CARTER AT (903) 984-0555. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS IN CONNECTION WITH THE OFFERING DESCRIBED HEREIN AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE SELLING SHAREHOLDERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THOSE SPECIFICALLY OFFERED HEREBY OR OF ANY SECURITIES OFFERED HEREBY IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED, OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO, OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED OR INCORPORATED BY REFERENCE HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF OR THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE SUCH DATE. 3 5 THE COMPANY Vertex Communications Corporation designs, develops, manufactures, markets and supports an extensive line of precision products for satellite and deep space communications applications. These products include sophisticated earth station antennas ranging in size from 1.2 to 34 meters in diameter (which operate in various relevant frequency bands, including L-, C-, X, Ku- and Ka-bans, and are available for commercial and military applications), integrated communications network systems, and optical and radio telescopes. The Company also manufactures state-of-the-art control systems designed to manage and monitor the operation, guidance, tracking and telemetry capabilities of communications network systems as well as individual antennas, related electronic components used to amplify radio frequency signals, and precision waveguide components for application as component parts of communications systems. The Company also provides custom engineering, turnkey field installation, site testing and after-sale and maintenance services, and spare and replacement parts in support of its products. The Company's strategy is to provide a wide variety of precision satellite communications products compliant with state-of-the-art technology to satisfy an expanding range of customer and industry requirements. To accomplish its objectives, the Company engages in ongoing efforts to introduce, in a timely manner, products that are designed to meet applicable domestic and international specifications. The Company believes that it offers a more diverse line of products than any of its principal competitors. Due to the exacting design and engineering requirements necessary to produce satellite communications systems, subsystems and related products, quality control and precision engineering are central to the manufacturing process. The Company believes it has developed a reputation as a leader in quality control procedures which has enhanced its position in the marketplace. While the Company markets its products to systems integrators and end users who combine the Company's products with other communications equipment to form complete communications systems, the Company also markets integrated communications network systems utilizing its own products. In the United States, the Company markets its products through a direct sales force; while in international markets, the Company utilizes a direct sales force, supplemented by independent foreign sales representatives. The Company's customers include the television broadcast industry, international telecommunications companies, communications common carriers, private communications networks, and government agencies, including certain agencies of the U.S. Government and various foreign governments. The Company was organized as a Texas corporation in 1984. The Company's wholly-owned subsidiaries include: TIW Systems, Inc., a Nevada corporation headquartered in Santa Clara, California; Gamma-f Corp., a Nevada corporation headquartered in Torrance, California; Maxtech, Inc., a Pennsylvania corporation which is located in State College, Pennsylvania; Vertex Antennentechnik GmbH, a corporation formed pursuant to the laws of the Federal Republic of Germany, with its headquarters in Duisburg, Germany; Vertex Foreign Sales Corporation, formed pursuant to the laws of The Virgin Islands, with its office in St. Thomas, The Virgin Islands; and Vertex International, Ltd., formed under the laws of England. The Company's principal executive offices are located at 2600 North Longview Street, Kilgore, Texas 75662, and its telephone number is (903) 984-0555. RISK FACTORS In addition to the other information contained or incorporated by reference in this Prospectus, the following should be considered carefully by prospective purchasers in evaluating an investment in the shares of Common Stock offered by this Prospectus. DEPENDENCE ON MAJOR CUSTOMERS. The continued success of the Company's business is dependent on continued sales to its major customers. While no single customer accounted for as much as 10% of the Company's total sales in fiscal 1997, GTE Corporation and Satellite Transmission Systems, Inc., a subsidiary of California Microwave Systems, Inc., accounted for 12% and 16% of the Company's total sales in fiscal 1996 and 1995, respectively. For the six months ended April 3, 1998, no single customer accounted for as much as 10% of the Company's total sales for such period. The Company believes that its relationships with such 4 6 customers are excellent and that it will continue to be a major supplier of satellite communications earth station antenna products to its major customers. Although each of these relationships has existed for multiple years, there can be no assurance that such relationships will continue. The loss of any one of such customers could have a material adverse effect on the Company and its business. EXPORT SALES AND REGULATORY STANDARDS. Export sales to international markets were 56%, 59% and 64% of total sales in fiscal 1997, 1996 and 1995, respectively. For the six months ended April 3, 1998, export sales to international markets represented approximately 62% of the Company's total sales. The Company expects that its international business increasingly will account for a more significant portion of its net sales. Foreign regulatory bodies often establish standards different from those of the United States. Currently, the Company's products are designed to meet both domestic and foreign standards. Any future foreign regulatory requirement changes could require the design or redesign of specific products for foreign standards. While to date the Company has experienced no material difficulty in this regard and currently anticipates none in the foreseeable future, the cost and effort incurred by the Company to design or redesign products in compliance with such foreign standards could adversely affect the Company's operating results. CURRENCY EXCHANGE RATES. Although the Company conducts substantially all of its international business in United States dollars, such international business may be affected by changes in demand resulting from fluctuation in currency exchange rates, as well as by risks such as tariff regulations and difficulties in obtaining export licenses. While the Company's international business has not been materially affected by any of these factors to date, there can be no assurance that such factors will not have a material adverse effect upon the Company's business in the future. TECHNOLOGICAL CHANGE AND PRODUCT DEVELOPMENT. The satellite communications earth station antenna industry is characterized by technological change, product introductions and evolving industry standards resulting from ongoing research and development efforts. Although the Company believes it has certain technological and other advantages over its competitors, maintaining such advantages will require continued investment by the Company in research and development and sales and marketing. The Company's ability to compete successfully will depend, to a significant extent, on its ability to continue to enhance its existing products and to develop and introduce new products which maintain technological leadership, satisfy an expanded range of customer needs and maintain market acceptance. There can be no assurance that the demand for the Company's products will not be adversely impacted by subsequent developments in the industry or by the development of some alternative technology. COMPETITION. The Company experiences substantial competition from a number of established companies which provide a broad range of products to the satellite communications earth station antenna market. Certain of these companies have substantially greater financial and personnel resources than those available to the Company. The Company's products may not be proprietary or patentable, and consequentially may be subject to duplication and exploitation by its competition. No assurance can be given that the Company will be able to continue to effectively compete with existing or future competitors in the satellite communications earth station antenna industry. ANTI-TAKEOVER PROVISIONS. Texas law includes a number of provisions that may have the effect of delaying or deterring a change in the control of management of the Company and encouraging persons considering unsolicited tender offers or other unilateral takeover proposals to negotiate with the Company's Board of Directors rather than pursue non-negotiated takeover attempts. These provisions may make it more difficult for shareholders of the Company to benefit from certain transactions which are opposed by the incumbent Board of Directors. See "Description of Capital Stock -- Business Combination Law". DEPENDENCE ON KEY PERSONNEL. The Company is dependent upon the continued services and management experience of its senior executive officers. The ability of the Company to retain such officers is important to the continued success and growth of the Company. The loss of key personnel could have a material adverse effect on the Company. Except for limited coverage of its President and Chief Executive Officer, the Company does not maintain key person insurance on its executive officers. The Company's continued growth depends on its ability to attract and retain skilled employees and on the ability of its officers and key employees to successfully manage growth. 5 7 FORWARD-LOOKING STATEMENTS. The statements contained in or incorporated by reference into this Prospectus, including, but not limited to, those regarding the Company's financial position, business strategy and other plans and objectives for future operations and any other statements which are not historical facts are forward-looking statements. When used in this document, the words "anticipate," "estimate," "may," "plans," "project," and similar expressions are intended to be among the statements that identify forward- looking statements. Such statements involve risks and uncertainties, including, but not limited to, those relating to the Company's dependence on its ability to attract and retain skilled managers and other personnel; the intense competition with the satellite and deep space communications industry; the uncertainty of the Company's ability to manage and continue its growth and implement its business strategy; effects of regulations; the Company's vulnerability to general economic conditions and dependence on its principal customers; the Company's future financial and operating results, cash need and demand for its products and services; as well as other factors detailed in "Risk Factors" and elsewhere in this Prospectus and in the Company's other filings with the Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those indicated. 6 8 SELLING SHAREHOLDERS The Shares being offered by the Selling Shareholders were acquired from the Company in a transaction exempt from the registration requirements of the Securities Act provided by Section 4(2) thereof and Regulation D thereunder pursuant to an Agreement and Plan of Reorganization (the "Reorganization Agreement"), dated May 9, 1997, between and among the Company, Vertex Acquisition Corporation, a wholly-owned subsidiary of the Company, and TIW Systems, Inc. ("TIW"). The Company is registering the Shares of the Selling Shareholders pursuant to certain registration rights granted to them pursuant to the Reorganization Agreement. The Shares are being registered to permit secondary trading of the Shares, and the Selling Shareholders may offer Shares for resale from time to time after June 10, 1998. See "Plan of Distribution." The offering of the Shares contemplated hereby may commence at any time subsequent to the effective date of this prospectus and June 10, 1998 and will terminate on March , 1999, or such earlier date as all of the Shares offered hereby have been sold. The following table sets forth the name of each Selling Shareholder, the aggregate number of shares owned by each Selling Shareholder prior to this offering, the percentage of the Company's outstanding Common Stock owned by such Selling Shareholder prior to this offering, the aggregate number of shares to be offered by each Selling Shareholder, the aggregate number of shares to be owned by each Selling Shareholder after the sale of all Shares in this offering and the percentage of the Company's outstanding Common Stock that will be owned by such Selling Shareholder thereafter, in each case assuming the offering of and sale of all Shares in this offering.
SHARES BENEFICIALLY OWNED SHARES BENEFICIALLY OWNED PRIOR TO OFFERING(1) AFTER CLOSING ------------------------- ------------------------- NUMBER OF NUMBER OF SHARES NUMBER OF SELLING SHAREHOLDER SHARES PERCENT(2) BEING OFFERED SHARES PERCENT(2) ------------------- ---------- ----------- ---------------- ---------- ----------- Louis E. and Elizabeth A. Becker(3)......................... 34,808 * 34,808 0 * Jean-Pierre Bourgon................. 1,900 * 1,900 0 * Cynthia J. Carter................... 618 * 618 0 * Joseph Hermann Duller(4)............ 1,044 * 1,044 0 * Raymond Geisick(4).................. 1,675 * 1,675 0 * John R. and Ann M. Griffiths(5)..... 2,578 * 2,578 0 * Paul J. Ironmonger(6)............... 23,120 * 23,120 0 * Patricia A. Krehnke(4).............. 558 * 558 0 * Edward F. Kurz(7)................... 2,792 * 2,792 0 * Rein Luik(8)........................ 121,830 2.4 90,012 31,818 * Fred A. McGiven(4).................. 1,396 * 1,396 0 * William F. Nickerson(4)............. 1,253 * 1,253 0 * Heldur Tonisson(9).................. 261,066 5.1 192,884 68,182 1.3 TIW Stock Bonus Plan(10)............ 104,092 2.0 104,092 0 * Robert L. and Heather L. Wallace(4)........................ 6,636 * 6,636 0 * Robert N. Wellins(4)................ 1,253 * 1,253 0 * John W. Whetstone(4)................ 5,565 * 5,565 0 * Gary A. Young(4).................... 1,237 * 1,237 0 * Yu-Chien Yuan(4).................... 928 * 928 0 * Total...................... 574,349 11.2% 474,349 100,000 2.0%
- --------------- * Represents beneficial ownership of less than 1% of the outstanding shares of Common Stock. (1) Based on 5,110,688 shares of Common Stock issued and outstanding as of May 18, 1998. (2) The table includes shares of Common Stock that may be acquired through the exercise of options within 60 days. The percentage of the Common Stock owned by each person has been computed assuming the exercise of all options deemed to be beneficially owned by that person, and assuming that no options held by any other person have been exercised. 7 9 (3) Mr. Becker is Executive Vice President of Operations of TIW Systems, Inc., a wholly-owned subsidiary of the Company. (4) Currently an employee of TIW Systems, Inc. (5) Mr. Griffiths formerly served as a director of TIW Systems, Inc. from May 1984 to June 1997. (6) Includes 4,451 shares held by Whitcust & Co. as custodian for the benefit of the Paul J. Ironmonger IRA. (7) Mr. Kurz is Vice President and Chief Financial Officer of TIW Systems, Inc. and a co-trustee of the TIW Stock Bonus Plan. (8) Mr. Luik is President of TIW Systems, Inc., Vice President of the Company and a co-trustee of the TIW Stock Bonus Plan. (9) Mr. Tonisson formerly served as Chairman of the Board and a director of TIW Systems, Inc. from May 1994 to June 1997. (10) Of the 104,092 held by the TIW Stock Bonus Plan, 20,742 shares are held on behalf of the Selling Shareholders. Of these 20,742 shares, 20,543 shares are vested in the accounts of the Selling Shareholders under the TIW Stock Bonus Plan and 199 shares are allocated to the Selling Shareholders, subject to the vesting provisions of such Plan. DESCRIPTION OF CAPITAL STOCK GENERAL. The authorized capital stock of the Company consists of 20,000,000 shares of Common Stock, $.10 par value per share. As of May 18, 1998, 5,110,688 shares of Common Stock were outstanding. COMMON STOCK. All outstanding shares of Common Stock are fully paid and nonassessable. All holders of Common Stock have full voting rights and are entitled to one vote for each share held of record on all matters submitted to a vote of the shareholders. Votes may not be cumulated in the election of Directors. Shareholders have no preemptive, subscription or conversion rights. The Common Stock is neither redeemable nor convertible, and there are no sinking fund provisions. Holders of Common Stock are entitled to dividends when and as declared by the Board of Directors from funds legally available therefor and are entitled, in the event of liquidation, to share ratably in all assets remaining after payment of all obligations of the Company. With respect to any action required by the Shareholders of the Company, the affirmative vote of the holders of a majority of the Company's issued and outstanding Common Stock entitled to vote is sufficient to authorize, affirm, ratify or consent to such action. ChaseMellon Shareholder Services, LLC is the registrar and transfer agent for the Common Stock. SPECIAL MEETINGS. Special Meetings of the shareholders of the Company may be called by the Chairman of the Board or the President, and shall be called by the President or Secretary at the request of a majority of the Board of Directors or by shareholders holding not less than 10% of the outstanding voting stock of the Company. BUSINESS COMBINATION LAW. The Company is subject to Part Thirteen (the "Business Combination Law") of the Texas Business Corporation Act, which took effect September 1, 1997. In general, the Business Combination Law prevents an "affiliated shareholder" (defined generally as a person that is or was within the preceding three-year period the beneficial owner of 20% or more of a corporation's outstanding voting shares) or its affiliates or associates from entering into or engaging in a "business combination" (defined generally to include (i) mergers or share exchanges, (ii) dispositions of assets having an aggregate value equal to 10% or more of the market value of the assets or of the outstanding common stock or representing 10% or more of the earning power or net income of the corporation, (iii) certain issuances or transactions by the corporation that would increase the affiliated shareholder's number of shares of the corporation, (iv) certain liquidations or dissolutions, and (v) the receipt of tax, guarantee, loan or other financial benefits by an affiliated shareholder other than proportionately as a shareholder of the corporation) with an "issuing public corporation" (which 8 10 includes the Company) during the three-year period immediately following the affiliated shareholder's acquisition of shares unless (a) before the date such person became an affiliated shareholder, the board of directors of the issuing public corporation approves the business combination or the acquisition of shares made by the affiliated shareholder on such date or (b) not less than six months after the date such person became an affiliated shareholder, the business combination is approved by the affirmative vote of holders of at least two- thirds of the issuing public corporation's outstanding voting shares not beneficially owned by the affiliated shareholder or its affiliates or associates. The Business Combination Law does not apply to a business combination with an affiliated shareholder that was the beneficial owner of 20% or more of the outstanding voting shares of the issuing public corporation on December 31, 1996, and continuously until the announcement date of the business combination. In discharging the duties of director under the Business Combination Act or otherwise, a director, in considering the best interests of the Company, may consider the long-term as well as the short-term interests of the Company and its shareholders, including the possibility that those interests may be best served by the continued independence of the Company. LIMITATION OF DIRECTOR LIABILITY AND INDEMNIFICATION ARRANGEMENTS. The Restated Articles of Incorporation, as amended, of the Company contain a provision that limits the liability of the Company's directors as permitted by the Texas Miscellaneous Corporation Laws Act. The provision eliminates the personal liability of directors to the Company and its shareholders for monetary damages for breach of directors' fiduciary duty of care. The provision does not change the liability of a director for breach of his duty of loyalty to the Company or to shareholders, acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, an act or omission for which the liability of a director is expressly provided for by an applicable statute, an act related to an unlawful stock repurchase or payment of a dividend, or in respect of any transaction from which a director received an improper personal benefit. Pursuant to the Restated Articles of Incorporation, the liability of directors will be further limited or eliminated without action by shareholders if Texas law is amended to further limit or eliminate the personal liability of directors. The Company's Bylaws, as amended, provide for the indemnification of its officers and directors, and the advancement to them of expenses in connection with proceedings and claims, to the fullest extent permitted by the Texas Business Corporation Act. The Company has also entered into indemnification agreements with each of its directors and certain of its officers that contractually provided for indemnification and expense advancement and include related provisions meant to facilitate the indemnitees' receipt of such benefits. In addition, the Company may purchase directors' and officers' liability insurance policies for its directors and officers in the future. Such indemnification may be made even though directors and officers would not otherwise be entitled to indemnification under other provisions of the Bylaws or such agreements. It is the position of the Commission that indemnification of directors and officers for liabilities arising under the Securities Act is against public policy and is unenforceable pursuant to Section 14 of the Securities Act. PLAN OF DISTRIBUTION The Shares may be sold from time to time by the Selling Shareholders after June 10, 1998. All sales may be made by the Selling Shareholders on the Nasdaq, in privately negotiated transactions or otherwise at prices and at terms related to the then current market price, or in negotiated transactions. The Shares may be sold by any one or more of the following methods: (a) a block trade in which the broker or dealer so engaged will attempt to sell the Shares as agent, but may position and resell a portion of a block as principal to facilitate the transaction; (b) purchases by a broker or dealer as principal, and resale by such broker or dealer, for its account pursuant to this Prospectus; (c) ordinary brokerage transactions and transactions in which the broker solicits purchasers; and (d) privately negotiated transactions. The Selling Shareholders may effect such transactions by selling the Shares through or to brokers or dealers, and such brokers or dealers will receive compensation in the form of discounts or commissions from 9 11 the Selling Shareholders, and may receive commissions from the purchasers of the Shares for whom they may act as agent (which discounts or commissions from the Selling Shareholders or such purchasers might exceed those customary in the types of transactions involved). Any Shares covered by this Prospectus which qualify for sale pursuant to Rule 144 under the Securities Act may be sold under that Rule rather than pursuant to this Prospectus. There can be no assurance that the Selling Shareholders will sell any or all of the Shares offered by them hereunder. The Company will pay all fees and expenses incident to the preparation and filing of the Registration Statement and this Prospectus, including legal and accounting fees and expenses other than any underwriting discounts, any selling commissions payable in respect of sales of the Shares or any expenses incurred by the Selling Shareholders to retain any counsel, accountant or other advisor; all of which will be paid by the Selling Shareholders. The Company will receive no part of the proceeds from sales of the Shares. The Company intends to keep the Registration Statement effective until March , 1999. The Selling Shareholders and any broker-dealer acting in connection with the sale of the Shares offered hereby may be deemed to be "underwriters" within the meaning of the Securities Act, in which event any discounts, concessions or commissions received by them, which are not expected to exceed those customary in the types of transactions involved, or any profit on resales of the Shares by them, may be deemed to be underwriting commissions or discounts under the Securities Act. LEGAL MATTERS The legality of the Shares offered hereby will be passed upon for the Company by Thompson & Knight, P.C., Dallas, Texas. EXPERTS The financial statements and schedules incorporated by reference in this prospectus and elsewhere in the registration statement have been audited by Arthur Andersen, LLP, independent public accountants, as indicated in their reports with respect thereto, and are included herein in reliance upon the authority of said firm as experts (or, as experts in accounting and auditing) in giving said reports. 10 12 ====================================================== NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES TO WHICH IT RELATES OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY OR THE TRUST SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE. ------------------------ TABLE OF CONTENTS
PAGE ---- Available Information................. 2 Incorporation of Certain Documents by Reference........................... 3 The Company........................... 4 Risk Factors.......................... 4 Selling Shareholders.................. 7 Description of Capital Stock.......... 8 Plan of Distribution.................. 9 Legal Matters......................... 10 Experts............................... 10
====================================================== ====================================================== 474,349 SHARES [LOGO] COMMON STOCK VERTEX COMMUNICATIONS CORPORATION , 1998 ====================================================== 13 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. Except for the SEC registration fee, all expenses are estimated. All such expenses will be paid by the Registrant. SEC registration fee........................................ $ 3,394 Accounting fees and expenses................................ 5,000 Legal fees and expenses..................................... 22,000 Miscellaneous............................................... 606 Printing fees and expenses.................................. 8,500 ------- Total............................................. $39,500 =======
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS. The Company is a Texas corporation. Article 1302-7.06 of the Texas Miscellaneous Corporation Laws Act authorizes Texas corporations, such as the Company, to eliminate or limit, pursuant to a provision in their articles of incorporation, the liability of directors thereof to the corporation and its shareholders for certain acts or omissions in the director's capacity as a director, subject to certain limitations. Reference is made to Article Thirteen of the Company's Restated Articles of Incorporation, as amended, which are filed herewith as Exhibit 4.1, that eliminates the liability of directors of the Company for monetary damages for certain acts or omissions, subject to certain limitations. It is the position of the Commission that indemnification of directors and officers for liabilities arising under the Securities Act is against public policy and is unenforceable pursuant to Section 14 of the Securities Act. Article 2.02-1 of the Texas Business Corporation Act provides that a corporation may indemnify any director or officer who was, is or is threatened to be made a named defendant or respondent in a proceeding because he is or was a director or officer, provided that the director or officer (i) conducted himself in good faith, (ii) reasonably believed (a) in the case of conduct in his official capacity, that his conduct was in the corporation's best interests or (b) in all other cases, that his conduct was at least not opposed to the corporation's best interests and (iii) in the case of any criminal proceeding, had no reasonable cause to believe his conduct was unlawful. Subject to certain exceptions, a director or officer may not be indemnified if the person is found liable to the corporation or if the person is found liable on the basis that he improperly received a personal benefit. Under Texas law, reasonable expenses incurred by a director or officer may be paid or reimbursed by the corporation in advance of a final disposition of the proceeding after the corporation receives a written affirmation by the director or officer of his good faith belief that he has met the standard of conduct necessary for indemnification and a written undertaking by or on behalf of the director or officer to repay the amount if it is ultimately determined that the director or officer is not entitled to indemnification by the corporation. Texas law requires a corporation to indemnify an officer or director against reasonable expenses incurred in connection with the proceeding in which he is named defendant or respondent because he is or was a director or officer if he is wholly successful in defense of the proceeding. Texas law also permits a corporation to purchase and maintain insurance or another arrangement on behalf of any person who is or was a director or officer against any liability asserted against him and incurred by him in such a capacity or arising out of his status as such a person, whether or not the corporation would have the power to indemnify him against that liability under Article 2.02-1. The Company's Restated Articles of Incorporation and Bylaws provide for the indemnification of its officers and directors, and the advancement to them of expenses in connection with proceedings and claims, to the fullest extent permitted by the Texas Business Corporation Act. The Company has also entered into indemnification agreements with each of its directors and certain of its officers that contractually provide for II-1 14 indemnification and expense advancement and include related provisions meant to facilitate the indemnitees' receipt of such benefits. The above discussions of Article 1302-7.06 of the Texas Miscellaneous Corporation Law Act, Article 2.02-1 of the Texas Business Corporation Act and of the Company's Restated Articles of Incorporation and Bylaws are not intended to be exhaustive and each is respectively qualified in its entity by reference to the applicable statute and the Company's Restated Articles of Incorporation and Bylaws, as amended. ITEM 16. EXHIBITS. The information required by this Item 16 is set forth in the Index to Exhibits accompanying this Registration Statement. ITEM 17. UNDERTAKINGS. (a) Rule 415 Offering. The undersigned Registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement: (i) to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) to reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and (iii) to include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement; provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the Registration Statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (b) Filings incorporating subsequent Exchange Act documents by reference. The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant's Annual Report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in the Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. II-2 15 (h) Request for acceleration of effective date. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the provisions described in Item 15 above, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. II-3 16 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Kilgore, State of Texas, on the 22nd day of May, 1998. VERTEX COMMUNICATIONS CORPORATION (Registrant) By: /s/ J. REX VARDEMAN ------------------------------------ J. Rex Vardeman Chairman of the Board, President and Chief Executive Officer POWER OF ATTORNEY Each person whose signature appears below constitutes and appoints J. Rex Vardeman and James D. Carter, and each of them (with full power to each of them to act alone), his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities to sign on his behalf individually and in each capacity stated below any amendment, including post-effective amendments, to this Registration Statement under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents and either of them, or their substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the date indicated.
SIGNATURE TITLE DATE --------- ----- ---- /s/ J. REX VARDEMAN Chairman of the Board, May 22, 1998 - ----------------------------------------------------- President and Chief J. Rex Vardeman Executive Officer and Director (Principal Executive Officer) /s/ JAMES D. CARTER Vice President and Chief May 22, 1998 - ----------------------------------------------------- Financial Officer, James D. Carter Treasurer and Director (Principal Financial and Accounting Officer) /s/ A. DON BRANUM Senior Vice President and May 22, 1998 - ----------------------------------------------------- Director A. Don Branum /s/ DONALD E. HEITZMAN, SR. Director May 22, 1998 - ----------------------------------------------------- Donald E. Heitzman, Sr.
II-4 17
SIGNATURE TITLE DATE --------- ----- ---- /s/ JOHN G. FARMER Director May 22, 1998 - ----------------------------------------------------- John G. Farmer /s/ REIN LUIK Director May 22, 1998 - ----------------------------------------------------- Rein Luik /s/ BILL R. WOMBLE Director May 22, 1998 - ----------------------------------------------------- Bill R. Womble
II-5 18 INDEX TO EXHIBITS
EXHIBIT NUMBER DESCRIPTION ------- ----------- 4.1* -- Restated Articles of Incorporation of the Company and Amendments No. 1 and No. 2 thereto 4.2* -- Bylaws of the Company and Amendments No. 1 and No. 2 thereto 5.1* -- Opinion of Thompson & Knight, P.C., regarding legality of shares 23.1* -- Consent of counsel (included in the opinion of Thompson & Knight, P.C. filed herewith as Exhibit 5.1) 23.2* -- Consent of independent accountants 24* -- Power of Attorney (a power of attorney pursuant to which amendments to this Registration Statement may be filed is included on the signature page hereof)
- --------------- * Filed herewith. EX-4.1 2 RESTATED ARTICLES OF INCORPORATION OF THE COMPANY 1 EXHIBIT 4.1 ================================================================================ VERTEX COMMUNICATIONS CORPORATION EXHIBIT 4.1 TO FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ================================================================================ 2 RESTATED ARTICLES OF INCORPORATION OF VERTEX COMMUNICATIONS CORPORATION ARTICLE ONE NAME The name of the corporation is VERTEX COMMUNICATIONS CORPORATION (the "Corporation"). ARTICLE TWO PERIOD OF DURATION The period of duration of the Corporation is perpetual or until dissolved or merged or consolidated in some lawful manner. ARTICLE THREE PURPOSES AND POWERS Section 1. Purposes. The purposes for which the Corporation is organized are to transact any and all lawful business for which corporations may be incorporated under the Texas Business Corporation Act (the "Act"). Section 2. Powers. Subject to any specific written limitations or restrictions imposed by the Act, by other law, or by these Articles of Incorporation, and solely in furtherance thereof, but not in addition to the limited purposes set forth in Section 1 of this Article, the Corporation shall RESTATED ARTICLES OF INCORPORATION - PAGE 1 3 have and exercise all of the powers specified in the Act, which powers are not inconsistent with these Articles. ARTICLE FOUR CAPITALIZATION, PREEMPTIVE RIGHTS AND VOTING Section 1. Authorized Shares. The aggregate number of shares of capital stock which the Corporation shall have authority to issue is FIVE MILLION (5,000,000) shares of Common Stock without par value of the par value of Ten Cents (10(cent)) per share, constituting aggregate capital stock of FIVE HUNDRED THOUSAND AND NO/100 DOLLARS ($500,000.00). Section 2. Preemptive Rights and Voting. (A) Preemptive Rights. Unless otherwise determined by the Board of Directors in the manner provided under the Act, no holder of shares of capital stock of the Corporation shall, as such holder, have any right to purchase or subscribe for any capital stock of any class which the Corporation may issue or sell, whether or not exchangeable for any capital stock of the Corporation of any class or classes, whether issued out of unissued shares authorized by these Articles of Incorporation as originally filed or by any amendment thereof, or out of shares of capital stock of the Corporation acquired by it after the issue thereof; nor, unless otherwise determined by the Board of Directors in the RESTATED ARTICLES OF INCORPORATION - PAGE 2 4 manner provided under the Act, shall any holder of shares of capital stock of the Corporation, as such holder, have any right to purchase, acquire or subscribe for any securities which the Corporation may issue or sell whether or not convertible into or exchangeable for shares of capital stock of the Corporation of any class or classes, and whether or not any such securities have attached or appurtenant thereto warrants, options or other instruments which entitle the holders thereof to purchase, acquire or subscribe for shares of capital stock of any class or classes. (B) Voting. In the exercise of voting privileges, each holder of shares of the capital stock of the Corporation shall be entitled to one (1) vote for each share held in his name on the books of the Corporation. In all elections of Directors of the Corporation, cumulative voting is expressly prohibited. As such, each holder of shares of capital stock of the Corporation entitled to vote at the election of Directors shall have the right to vote, in person or by proxy, all or any portion of such shares for or against each individual Director to be elected and shall not be entitled to vote for or against any one Director more than the aggregate number of shares held by such holder which are entitled to vote on the election of Directors. With respect to any action to be taken by the shareholders of the Corporation as to any matter, the affirmative vote of the holders of a majority of the outstanding shares of the capital stock of the Corporation entitled to vote thereon shall be sufficient to authorize, affirm, ratify or consent to such action. RESTATED ARTICLES OF INCORPORATION - PAGE 3 5 ARTICLE FIVE COMMENCEMENT OF BUSINESS The Corporation shall not commence business until it has received for the issuance of its shares of Common Stock consideration of the value of at least ONE THOUSAND AND NO/100 DOLLARS ($1,000.00) consisting of money paid, labor done, or property actually received. ARTICLE SIX REGISTERED AGENT AND OFFICE Section 1. Registered Office. The address of the registered office of the Corporation is 2600 Longview Street, Kilgore, Texas 75662. Section 2. Registered Agent. The name of the registered agent of the Corporation at such address is J. REX VARDEMAN. ARTICLE SEVEN DIRECTORS Section 1. Board of Directors. The initial Board of Directors shall consist of one (1) member who need not be a resident of the State of Texas or a Shareholder of the Corporation, the number of Directors of the Corporation may from RESTATED ARTICLES OF INCORPORATION - PAGE 4 6 time to time be changed in accordance with the By-Laws of the Corporation and the Act. Section 2. Name and Address. The name and address of the person who is to serve as Director until the first annual meeting of Shareholders or until his successors are elected and qualified, or until his earlier death, resignation, or removal is as follows:
NUMBER, STREET NAME OR BUILDING CITY, STATE - ---- -------------- ----------- J. REX VARDEMAN 2600 Longview Kilgore, Texas Street 75662
ARTICLE EIGHT INCORPORATOR The name and address of the Incorporator is
NUMBER, STREET NAME OR BUILDING CITY, STATE - ---- -------------- ----------- J. REX VARDEMAN P. O. Box 1277 Kilgore, Texas 75662
ARTICLE NINE SPECIAL POWERS OF BOARD OF DIRECTORS In furtherance of, and not in limitation of the powers and authorities conferred under the Act, the Board of Directors is expressly authorized: RESTATED ARTICLES OF INCORPORATION - PAGE 5 7 1. To make, alter, amend and rescind the By-Laws of the Corporation; to fix, adjust and maintain from time to time the amount to be reserved as working capital; and to authorize and cause to be executed mortgages and liens upon the real and personal property of the Corporation. 2. From time to time, to determine whether and to what extent and at what times and places and under what conditions and provisions the accounts and books of the Corporation shall be maintained and made available for inspection of any Shareholder, and no Shareholder shall have any right to inspect any account or books or records of the Corporation, except as provided in the Act, or authorized by the Board of Directors. 3. If the By-Laws so provide, to designate two or more of their number to constitute an executive committee, which committee shall, as provided in said resolution or in the By-Laws of the Corporation, have and exercise any or all of the powers of the Board of Directors in the management of the business and affairs of the Corporation, except to the extent that the Act requires a particular matter to be authorized by the Board of Directors. ARTICLE TEN ADDITIONAL POWERS IN BY-LAWS The Corporation may in its By-Laws confer powers and authorities upon the Board of Directors in addition to the foregoing and to those expressly conferred upon them by the Act. RESTATED ARTICLES OF INCORPORATION - PAGE 6 8 ARTICLE ELEVEN TRANSACTIONS WITH DIRECTORS, OFFICERS AND SHAREHOLDERS The Officers, Directors and Shareholders holding ten percent (10%) or more of the outstanding capital stock of the Corporation ("insiders") may enter into business transactions with the Corporation in which they are personally interested without such transaction being affected or invalidated solely because of such personal interest; provided, however, that nothing contained herein shall relieve any insider from liability for breach of the fiduciary duties of an insider or authorize any insider to enter into any transaction with the Corporation in which such insider has a material interest for the purpose of personal gain to the detriment of the Corporation. ARTICLE TWELVE INDEMNIFICATION The Corporation shall have the power and authority to indemnify and hold its Directors and/or Officers harmless as authorized by the Board of Directors in accordance with the Act and the By-Laws of the Corporation against any and all loss, risk, damage, or expense arising from any action, suit, claim, or proceeding in which they are made parties by reason RESTATED ARTICLES OF INCORPORATION - PAGE 7 9 of their capacity or relationship with the Corporation. Indemnification so made and entered into shall not be deemed exclusive of any other rights to which any such person might otherwise be entitled. ARTICLE THIRTEEN MEETINGS Both Shareholders and Directors shall have the power and authority to hold their meetings either within or without the State of Texas, upon compliance with the provisions of the By-Laws pertaining thereto, and the Corporation may have one or more offices in addition to its principal office in the State of Texas, and keep its books and records (subject to the provisions of the Act) outside of the State of Texas at such places as may be from time to time designated by the Board of Directors. ARTICLE FOURTEEN AMENDMENTS The Corporation reserves the right to amend, alter, change or repeal any provision contained in these Articles of Incorporation or in its By-Laws in the manner now or hereafter prescribed by the Act, and all rights conferred on Shareholders herein are granted subject to this reservation. RESTATED ARTICLES OF INCORPORATION - PAGE 8 10 ARTICLE FIFTEEN CAPTIONS The captions used in these Articles of Incorporation are for convenience only and shall not be construed in interpreting the provisions hereof. VERTEX COMMUNICATIONS CORPORATION By: /s/ J. Rex Vardeman ------------------------------- J. REX VARDEMAN, President By: /s/ Bill Womble ------------------------------- BILL WOMBLE, Secretary THE STATE OF TEXAS ) ) COUNTY OF DALLAS ) BEFORE ME, a Notary Public, on this day personally appeared J. REX VARDEMAN, known to me to be the person whose name is subscribed to the foregoing document and, being by me first duly sworn, declared that the statements therein contained are true and correct. GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 12th day of September, 1984. /s/ William F. Pyne ------------------------------------- Notary Public in and for The State of Texas /s/ William F. Pyne ------------------------------------- (Printed Name of Notary) My Commission Expires: 11/09/84 - ---------------------- RESTATED ARTICLES OF INCORPORATION - PAGE 9 11 ARTICLES OF AMENDMENT TO THE RESTATED ARTICLES OF INCORPORATION OF VERTEX COMMUNICATIONS CORPORATION Pursuant to the provisions of Article 4.04 of the Texas Business Corporation Act, VERTEX COMMUNICATIONS CORPORATION, the undersigned corporation (the "Corporation"), adopts the following Articles of Amendment to its Restated Articles of Incorporation previously amended by those certain Articles of Amendment to the Restated Articles of Incorporation dated February 11, 1988, as filed in the Office of the Secretary of State on February 16, 1988: ARTICLE 1 NAME The name of the Corporation is VERTEX COMMUNICATIONS CORPORATION. ARTICLE 2 AMENDMENT The following amendment to the Restated Articles of Incorporation, as amended, was adopted by the shareholders of the Corporation on January 27, 1994, in order to increase the number of authorized shares of common stock, $.10 par value per share, of the Corporation from five million (5,000,000) shares to twenty million (20,000,000) shares. Section 1 of Article Four of the Restated Articles of Incorporation, as amended, is hereby amended to read in its entirety as follows: ARTICLES OF AMENDED TO THE RESTATED ARTICLES OF INCORPORATION - PAGE 1 12 "Section 1. Authorized Shares. The aggregate number of shares of capital stock which the Corporation shall have authority to issue is Twenty Million (20,000,000) shares of Common Stock of the par value of Ten Cents ($.10) per share, constituting aggregate capital stock of Two Million Dollars ($2,000,000.00). " ARTICLE 3 OUTSTANDING SHARES The number of shares of the Corporation outstanding at the time of such adoption was 4,586,556; and the number of shares entitled to vote thereon was 4,586,556. ARTICLE 4 VOTE The number of shares voted for such amendment was 3,316,173 (72.30%); and the number of shares voted against such amendment was 561,706 (12.25%). EXECUTED this 27th day of January, 1994. VERTEX COMMUNICATIONS CORPORATION By: /s/ J. Rex Vardeman ----------------------------------------- J. REX VARDEMAN, President and Chief Executive Officer ARTICLES OF AMENDED TO THE RESTATED ARTICLES OF INCORPORATION - PAGE 2 13 ARTICLES OF AMENDMENT TO THE RESTATED ARTICLES OF INCORPORATION OF VERTEX COMMUNICATIONS CORPORATION Pursuant to the provisions of Article 4.04 of the of the Texas Business Corporation Act, VERTEX COMMUNICATIONS CORPORATION, the undersigned corporation (the "Corporation"), adopts the following Articles of Amendment to its Restated Articles of Incorporation: ARTICLE l NAME The name of the Corporation is VERTEX COMMUNICATIONS CORPORATION. ARTICLE 2 AMENDMENT The following amendments to the Restated Articles of Incorporation were adopted by the shareholders of the Corporation on February 11, 1988, in order to limit the liability of Directors for monetary damages to the Corporation and its shareholders and to provide for the indemnification of the Directors, officers, employees and agents of the Corporation by the Corporation to the extent permitted by the Texas Business Corporation Act. 2.1 Article Twelve of the Restated Articles of Incorporation is hereby amended to read in its entirety as follows: ARTICLES OF AMENDED TO THE RESTATED ARTICLES OF INCORPORATION - PAGE 1 14 ARTICLE TWELVE INDEMNIFICATION Section 1. Mandatory Indemnification and Advancement of Expenses. Each person who was or is made a party or is threatened to be made a party to or is involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative, or investigative, any appeal in such action, suit or proceeding, and any inquiry or investigation that could lead to such an action, suit, or proceeding (a "proceeding"), by reason of the fact that he or a person for whom he is the legal representative 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, partner, venturer, proprietor, trustee, employee, agent, or similar functionary of another corporation, partnership, joint venture, sole proprietorship, trust, or other enterprise (including service with respect to employee benefit plans) shall be indemnified and held harmless by the Corporation to the fullest extent permitted by the Texas Business Corporation Act, as amended (the "Act"), against all judgments, penalties (including excise and similar taxes), fines, settlements, and reasonable expenses (including attorneys' fees) actually incurred by such person in connection with such proceeding. Such right shall be a contract right and shall include the right to require advancement by the Corporation of reasonable expenses (including attorneys' fees) incurred in defending any such proceeding in advance of its final disposition; provided, however, that the payment of such expenses in advance of the final disposition of such proceeding shall be made by the Corporation only upon delivery to the Corporation of a written affirmation by such person of his good faith belief that he has met the standard of conduct necessary for indemnification under the Act and a written undertaking, by or on behalf of such person, to repay all amounts so advanced if it should be determined ultimately that such person is not entitled to be so indemnified. Section 2. Nature of Indemnification. The indemnification and advancement of expenses provided for herein shall not be deemed exclusive of any other rights permitted by law to which a ARTICLES OF AMENDED TO THE RESTATED ARTICLES OF INCORPORATION - PAGE 2 15 person seeking indemnification may be entitled under any Bylaw, agreement, vote of shareholders or disinterested directors or otherwise, and shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person. Section 3. Insurance. The Corporation shall have power to purchase and maintain insurance or another arrangement 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 a director, officer, partner, venturer, proprietor, trustee, employee, agent, or similar functionary of another corporation, partnership, joint venture, sole proprietorship, trust or other enterprise (including service with respect to employee benefit plans) against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the Corporation would have the power to indemnify him against such liability under the provisions of this Article Twelve. 2.2 Articles Thirteen, Fourteen and Fifteen are hereby renumbered Article Fourteen, Article Fifteen and Article Sixteen, respectively. 2.3 A new Article Thirteen is hereby added to the Restated Articles of Incorporation, which Article shall read in its entirety as follows: ARTICLE THIRTEEN LIMITATION OF LIABILITY No director of the Corporation shall be personally liable to the Corporation or its shareholders for monetary damages for an act or omission in the director's capacity as a director, provided, however, that the foregoing provision shall not eliminate or limit the liability of a director for (i) a breach of the director's duty of loyalty to the Corporation or its shareholders, (ii) an act or ARTICLES OF AMENDED TO THE RESTATED ARTICLES OF INCORPORATION - PAGE 3 16 omission not in good faith or that involves intentional misconduct or a knowing violation of the law, (iii) a transaction from which a director received an improper benefit, whether or not the benefit resulted from an action taken within the scope of the director's office, (iv) an act or omission for which the liability of the director is expressly provided for by statute, or (v) an act related to an unlawful stock repurchase or payment of a dividend. If the Texas Miscellaneous Corporation Laws Act or other applicable provision of Texas law hereafter is amended to authorize further elimination or limitation of the liability of directors, then the liability of a director of the Corporation, in addition to the limitation on the personal liability provided herein, shall be limited to the fullest extent permitted by the Texas Miscellaneous Corporation Laws Act or other applicable provision of Texas law as amended. Any repeal or modification of this Article by the shareholders of the Corporation shall be prospective only, and shall not adversely affect any limitation on the personal liability of a director of the Corporation existing at the time of such repeal or modification. ARTICLE 3 OUTSTANDING SHARES The number of shares of the Corporation outstanding at the time of such adoption was 3,194,134; and the number of shares entitled to vote thereon was 3,194,134. ARTICLE 4 VOTE The number of shares voted for such Amendments was 2,714,962 (84.998%), and the number of shares voted against such Amendments was 111,023 (3.476%). ARTICLES OF AMENDED TO THE RESTATED ARTICLES OF INCORPORATION - PAGE 4 17 EXECUTED this 11th day of February, 1988. VERTEX COMMUNICATIONS CORPORATION By: /s/ J. Rex Vardeman ------------------------------------------- J. REX VARDEMAN, President THE STATE OF TEXAS ) ) COUNTY OF GREGG ) Before me, the undersigned, a Notary Public in and for the State of Texas, on this day personally appeared J. REX VARDEMAN, known to me to be the person and officer whose name is subscribed to the foregoing instrument and acknowledged to me that the same was the act of the said VERTEX COMMUNICATIONS CORPORATION, a corporation, and that he executed the same as the act of such corporation for the purposes and consideration therein expressed, and in the capacity therein stated. GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the 11th day of February, 1988. /s/ Wilora Tucker -------------------------------- Notary Public in and for The State of Texas /s/ Wilora Tucker -------------------------------- (Printed Name of Notary Public) My Commission Expires: 09-04-89 - ---------------------- ARTICLES OF AMENDED TO THE RESTATED ARTICLES OF INCORPORATION - PAGE 5 EX-4.2 3 BYLAWS OF THE COMPANY AND AMENDMENTS NO. 1 & NO. 2 1 EXHIBIT 4.2 ================================================================================ VERTEX COMMUNICATIONS CORPORATION EXHIBIT 4.2 TO FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ================================================================================ 2 TABLE OF CONTENTS CORPORATE BY-LAWS OF VERTEX COMMUNICATIONS CORPORATION (a Texas corporation)
SECTION SUBJECT MATTER PAGE - ------- -------------- ---- ARTICLE 1 -- NAME AND OFFICES................................................................................................1 1.01 Name.......................................................................................................1 1.02 Registered Office and Agent................................................................................1 (1) Registered Office.................................................................................1 (2) Registered Agent..................................................................................1 (3) Change of Registered Office or Agent..............................................................1 1.03 Other Offices..............................................................................................1 ARTICLE 2 -- SHAREHOLDERS....................................................................................................2 2.01 Place of Meetings..........................................................................................2 2.02 Annual Meetings............................................................................................2 2.03 Special Meetings...........................................................................................2 2.04 Notice.....................................................................................................2 2.05 Voting List................................................................................................3 2.06 Quorum.....................................................................................................3 2.07 Requisite Vote.............................................................................................4 2.08 Withdrawal of Quorum.......................................................................................4 2.09 Voting at Meeting..........................................................................................4 (1) Voting Power......................................................................................4 (2) Exercise of Voting Power; Proxies.................................................................4 (3) Election of Directors.............................................................................5 2.10 Record Date; Closing Transfer Books........................................................................5 2.11 Action Without Meetings....................................................................................5 2.12 Preemptive Rights..........................................................................................6 ARTICLE 3 -- DIRECTORS.......................................................................................................6 3.01 Management Powers..........................................................................................6 3.02 Number and Qualification...................................................................................6 3.03 Election and Term..........................................................................................7 3.04 Voting on Directors........................................................................................7 3.05 Vacancies..................................................................................................7
-i- 3 3.06 New Directorships..........................................................................................7 3.07 Removal....................................................................................................8 3.08 Meetings...................................................................................................8 (1) Place.............................................................................................8 (2) Annual Meeting....................................................................................8 (3) Regular Meetings..................................................................................8 (4) Special Meetings..................................................................................8 (5) Notice and Waiver of Notice.......................................................................8 (6) Quorum............................................................................................9 (7) Requisite Vote....................................................................................9 3.09 Action Without Meetings....................................................................................9 3.10 Committees.................................................................................................9 (1) Designation and Appointment.......................................................................9 (2) Members; Terms....................................................................................9 (3) Authority.........................................................................................9 (4) Records..........................................................................................10 (5) Change in Number.................................................................................10 (6) Vacancies........................................................................................10 (7) Removal..........................................................................................10 (8) Meetings.........................................................................................10 (9) Quorum; Requisite Vote...........................................................................10 (10) Compensation.....................................................................................10 (11) Action Without Meetings..........................................................................10 (12) Responsibility...................................................................................10 3.11 Compensation..............................................................................................11 3.12 Maintenance of Records....................................................................................11 3.13 Interested Directors and Officers.........................................................................11 ARTICLE 4 -- NOTICES........................................................................................................12 4.01 Method of Notice..........................................................................................12 4.02 Waiver....................................................................................................12 ARTICLE 5 -- OFFICERS AND AGENTS............................................................................................12 5.01 Designation...............................................................................................12 5.02 Election of Officers......................................................................................13 5.03 Qualifications............................................................................................13 5.04 Term of Office............................................................................................13 5.05 Authority.................................................................................................13 5.06 Removal...................................................................................................13 5.07 Vacancies.................................................................................................14 5.08 Compensation..............................................................................................14 5.09 Chairman of the Board.....................................................................................14 5.10 President.................................................................................................14
-ii- 4 5.11 Vice-Presidents...........................................................................................15 5.12 Secretary.................................................................................................15 5.13 Assistant Secretaries.....................................................................................15 5.14 Treasurer.................................................................................................16 5.15 Assistant Treasurers......................................................................................16 ARTICLE 6 -- INDEMNIFICATION................................................................................................17 6.01 Third Party Actions.......................................................................................17 6.02 Derivative Actions........................................................................................18 6.03 Authorization of Indemnity................................................................................18 6.04 Indemnification as to Expenses............................................................................19 6.05 Advance on Expenses.......................................................................................19 6.06 Nature of Indemnification.................................................................................19 6.07 Insurance.................................................................................................20 ARTICLE 7 -- STOCK CERTIFICATES AND TRANSFER REGULATIONS....................................................................20 7.01 Description of Certificates...............................................................................20 7.02 Delivery..................................................................................................21 7.03 Signatures................................................................................................21 7.04 Issuance of Certificates..................................................................................21 7.05 Payment for Shares........................................................................................21 (1) Consideration....................................................................................21 (2) Valuation........................................................................................22 (3) Effect...........................................................................................22 (4) Allocation of Consideration......................................................................22 7.06 Subscriptions.............................................................................................22 7.07 Closing of Transfer Books; Record Date....................................................................22 7.08 Registered Owners.........................................................................................23 7.09 Lost, Stolen or Destroyed Certificates....................................................................23 (1) Proof of Loss....................................................................................24 (2) Timely Request...................................................................................24 (3) Bond.............................................................................................24 (4) Other Requirements...............................................................................24 7.10 Registration of Transfers.................................................................................24 (1) Endorsement......................................................................................24 (2) Guaranty and Effectiveness of Signature..........................................................24 (3) Adverse Claims...................................................................................25 (4) Collection of Taxes..............................................................................25 (5) Additional Requirements Satisfied................................................................25
-iii- 5 7.11 Restrictions on Transfer and Legends on Certificates......................................................25 (1) Shares in Classes or Series......................................................................25 (2) Restriction on Transfer..........................................................................25 (3) Pre-Emptive Rights...............................................................................25 (4) Unregistered Securities..........................................................................26 ARTICLE 8 -- GENERAL PROVISIONS.............................................................................................26 8.01 Dividends.................................................................................................26 (1) Declaration and Payment..........................................................................26 (2) Record Date......................................................................................26 8.02 Reserves..................................................................................................27 8.03 Books and Records.........................................................................................27 8.04 Annual Statement..........................................................................................27 8.05 Checks and Notes..........................................................................................27 8.06 Fiscal Year...............................................................................................27 8.07 Corporate Seal............................................................................................28 8.08 Resignations..............................................................................................28 8.09 Amendment of By-Laws......................................................................................28 8.10 Construction..............................................................................................28 8.11 Telephone Meetings........................................................................................28 8.12 Table of Contents; Captions...............................................................................29
-iv- 6 BY-LAWS OF VERTEX COMMUNICATIONS CORPORATION (a Texas Corporation) ARTICLE 1 NAME AND OFFICES 1.01 Name. The name of the Corporation is VERTEX COMMUNICATIONS CORPORATION, hereinafter referred to as the "Corporation". 1.02 Registered Office and Agent. The Corporation shall establish, designate and continuously maintain a registered office and agent in the State of Texas, subject to the following provisions: (1) Registered Office. The Corporation shall establish and continuously maintain in the State of Texas a registered office which may be, but need not be, the same as its place of business. (2) Registered Agent. The Corporation shall designate and continuously maintain in the State of Texas a registered agent, which agent may be either an individual resident of the State of Texas whose business office is identical with such registered office, or a domestic corporation or a foreign corporation authorized -1- 7 to transact business in the State of Texas, having a business office identical with such registered office. (3) Change of Registered Office or Agent. The Corporation may change its registered office or change its registered agent, or both, upon the filing in the Office of the Secretary of State of the State of Texas of a statement setting forth the facts required by law, and executed for the Corporation by its President or a Vice-President, and verified by such officer. 1.03 Other Offices. The Corporation may also have offices at such other places within and without .he State of Texas as the Board of Directors may, from time to time, determine the business of the Corporation may require. ARTICLE 2 SHAREHOLDERS 2.01 Place of Meetings. Each meeting of the shareholders of the Corporation is to be held at the principal offices of the Corporation or at such other place, either within or without the State of Texas, as may be specified in the notice of the meeting or in a duly executed waiver of notice thereof. 2.02 Annual Meetings. The annual meeting of the shareholders for the election of Directors and for the transaction -2- 8 of such other business as may properly come before the meeting shall be held within one hundred twenty (120) days after the close of the fiscal year of the Corporation on a day during such period to be selected by the Board of Directors; provided, however, that the failure to hold the annual meeting within the designated period of time or on the designated date shall not work a forfeiture or dissolution of the Corporation. 2.03 Special Meetings. Special meetings of the shareholders, for any purpose or purposes, may be called by the Chairman of the Board or the President. Special meetings of the shareholders shall be called by the President or Secretary at the request in writing of a majority of the Board of Directors, or at the request in writing of shareholders owning ten per cent (10%) of the capital stock of the Corporation issued and outstanding and entitled to vote. Such request shall state the purpose or purposes of the proposed meeting and the business to be transacted at any such special meeting of shareholders, and shall be limited to the purposes stated in the notice therefor. 2.04 Notice. Written or printed notice of the meeting stating the place, day and hour of the meeting, and in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be delivered not less than ten -3- 9 (10) nor more than fifty (50) days before the date of the meeting, either personally or by mail, by or at the direction of the Chairman of the Board or the President, the Secretary or a majority of the members of the Board of Directors calling the meeting, to each shareholder of record entitled to vote at such meeting as determined in accordance with the provisions of Section 2.10 hereof. If mailed, such notice shall be deemed to be delivered when deposited in the United States Mail, with postage thereon prepaid, addressed to the shareholder entitled thereto at his address as it appears on the stock transfer books of the Corporation. 2.05 Voting List. The officer or agent having charge and custody of the stock transfer books of the Corporation, shall prepare, at least ten (10) days before each meeting of shareholders, a complete list of the shareholders entitled to vote at such meeting, arranged in alphabetical order and containing the address and number of voting shares held by each, which list shall be kept on file at the registered office of the Corporation for a period of not less than ten (10) days prior to such meeting and shall be subject to inspection by any shareholder at any time during usual business hours. Such list shall also be produced and kept open at the time and place of the meeting and shall be subject to the inspection of any shareholder during the entire time of the -4- 10 meeting. The original share ledger or transfer book, or a duplicate thereof, shall be prima facie evidence as to identity of the shareholders entitled to examine such list or share ledger or transfer book and to vote at any such meeting of the shareholders. 2.06 Quorum. The holders of a majority of the shares of the capital stock issued and outstanding and entitled to vote thereat, represented in person or by proxy, shall be requisite and shall constitute a quorum at all meetings of the shareholders for the transaction of business except as otherwise provided by statute or by the Articles of Incorporation or by these By-Laws. If, however, such quorum shall not be present or represented at any such meeting of the shareholders, the shareholders entitled to vote thereat, present in person, or represented by proxy, shall have the power to adjourn the meeting, from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally notified. 2.07 Requisite Vote. If a quorum is present at any meeting, the vote of the holders of a majority of the shares of capital stock having voting power, present in person or -5- 11 represented by proxy, shall determine any question brought before such meeting, unless the question is one upon which, by express provision of the statutes or of the Articles of Incorporation or of these By-Laws, a different vote shall be required, in which case such express provision shall govern and control the determination of such question. 2.08 Withdrawal of Quorum. If a quorum is present at the time of commencement of any meeting, the shareholders present at such duly convened meeting may continue to transact any business which may properly come before said meeting until adjournment thereof, notwithstanding the withdrawal from such meeting of sufficient holders of the shares of capital stock entitled to vote thereat to leave less than a quorum remaining. 2.09 Voting at Meeting. Voting at meetings of shareholders shall be conducted and exercised subject to the following procedures and regulations: (1) Voting Power. In the exercise of voting power with respect to each matter properly submitted to a vote at any meeting of shareholders, each shareholder of the capital stock of the Corporation having voting power shall be entitled to one (1) vote for each such share held in his name on the books of the Corporation, except to the extent otherwise specified by the Articles of Incorporation. (2) Exercise of Voting Power; Proxies. At any meeting of the shareholders, every holder of the shares of capital stock of the Corporation entitled to vote at such meeting may vote either in person, or by proxy duly -6- 12 appointed by instrument in writing subscribed by such shareholder or by his duly authorized attorney-in-fact; provided, however, no such appointment of proxy shall be valid after the expiration of eleven (11) months from the date of execution of such written instrument of appointment, unless otherwise stated therein. A proxy shall be revocable unless expressly designated therein as irrevocable or unless otherwise made irrevocable by law. Each proxy shall be filed with the Secretary of the Corporation prior to or at the time of the meeting. Voting for directors shall be in accordance with the provisions of paragraph (3) below of this Section 2.09. Any vote may be taken by voice vote or by show of hands unless someone entitled to vote at the meeting objects, in which case written ballots shall be used. (3) Election of Directors. In all elections of Directors cumulative voting shall be permissible, unless expressly denied by the Articles of Incorporation. If cumulative voting is so permissible, each shareholder of the capital stock of the Corporation entitled to vote at any such election shall have the right to cast, in person or by proxy, as many votes as shall equal the number of votes (except for these provisions as to cumulative voting) such shareholder would be entitled to cast for the election of Directors with respect to his shares multiplied by the number of Directors to be elected, and such shareholder may cast all such votes for a single Director, or may distribute such votes among the number of Directors to be voted for, or any two (2) or more of them, as such shareholder may deem appropriate. 2.10 Record Date; Closing Transfer Books. As more specifically provided in Article 7, Section 7.07 hereof, the Board of Directors may fix in advance a record date for the purpose of determining shareholders entitled to notice of or to vote at a meeting of shareholders, such record date to be not less than ten (10) nor more than fifty (50) days prior to such meeting, or the Board of Directors may close the stock transfer books for such purpose for a period of not less than -7- 13 ten (10) nor more than fifty (50) days prior to such meeting. In the absence of any action by the Board of Directors, the date upon which the notice of the meeting is mailed shall be deemed the record date. 2.11 Action Without Meetings. Any action permitted or required to be taken at a meeting of the shareholders of the Corporation may be taken without a meeting if a consent in writing, setting forth the action so taken, shall be signed by all of the shareholders of the capital stock of the Corporation entitled to vote with respect to the subject matter thereof, and such written consent shall have the same force and effect as a unanimous vote of the shareholders thereon. Any such executed written consent, or an executed counterpart thereof, shall be placed in the minute book of the Corporation. 2.12 Preemptive Rights. Unless otherwise determined by the Board of Directors in the manner provided under the Texas Business Corporation Act, as amended, no holder of shares of capital stock of the Corporation shall, as such holder, have any right to purchase or subscribe for any capital stock of any class which the Corporation may issue or sell, whether or not exchangeable for any capital stock of the Corporation of any class or classes, whether issued out of unissued shares authorized by the Articles of Incorporation, as amended, or -8- 14 out of shares of capital stock of the Corporation acquired by after the issue thereof; nor, unless otherwise determined by the Board of Directors in the manner provided under the Texas Business Corporation Act, as amended, shall any holder of shares of capital stock of the Corporation, as such holder, have any right to purchase, acquire or subscribe for any securities which the Corporation may issue or sell whether or not convertible into or exchangeable for shares of capital stock of the Corporation of any class or classes, and whether or not any such securities have attached or appurtenant thereto warrants, options or other instruments which entitle the holders thereof to purchase, acquire or subscribe for shares of capital stock of any class or classes. ARTICLE 3 DIRECTORS 3.01 Management Powers. The business affairs of the Corporation shall be managed by its Board of Directors which may exercise all such powers of the Corporation and do all such lawful acts and things as are not by statute or by the Articles of Incorporation or by these By-Laws directed or required to be exercised or done by the shareholders. 3.02 Number and Qualification. The Board of Directors shall consist of not less than one (1) member nor more than -9- 15 five (5) members; provided, however, the initial Board of Directors shall consist of one (1) member. Directors need not be residents of the State of Texas nor shareholders of the Corporation. Each Director shall qualify as a Director following election as such by agreeing to act or acting in such capacity. The number of Directors may be increased or decreased from time to time by resolution of the Board of Directors or shareholders without the necessity of a written amendment to the By-Laws of the Corporation; provided, however, no decrease shall have the effect of shortening the term of any incumbent Director. 3.03 Election and Term. Members of the Board of Directors shall hold office until the annual meeting of shareholders and until their successors shall have been elected and qualified at the annual meeting of the shareholders, the shareholders shall elect Directors to hold office until the next succeeding annual meeting. Each Director shall hold office for the term for which he is elected, and until his successor shall be elected and qualified. 3.04 Voting on Directors. Directors shall be elected by plurality vote. Cumulative voting in the election of Directors is expressly prohibited. -10- 16 3.05 Vacancies. Any vacancy occurring in the Board of Directors may be filled by the affirmative vote of a majority of the remaining Directors then in office, though less than a quorum of the Board of Directors. For purposes of these By-Laws, a "vacancy" shall be defined as an unfilled directorship arising by virtue of the death, resignation or removal of a Director theretofore duly elected to serve in such capacity in accordance with the relevant provisions of these By-Laws. A Director elected to fill a vacancy shall be elected for the unexpired portion of the term of his predecessor in office. 3.06 New Directorships. Any directorship to be filled by reason of an increase in the number of Directors actually serving as such shall be filled by election at an annual meeting of the shareholders or at a special meeting of shareholders called for that purpose, or by the Board of Directors for a term of office continuing only until the next election of one or more Directors by the shareholders, provided that the Board of Directors may not fill more than two (2) such directorships during the period between any two (2) successive annual meetings of shareholders. 3.07 Removal. Any Director may be removed either for or without cause at any duly convened special or annual meeting of shareholders, by the affirmative vote of a majority in -11- 17 number of shares of the shareholders present in person or by proxy at any meeting and entitled to vote for the election of such Director, provided notice of intention to act upon such matter shall have been given in the notice calling such meeting. 3.08 Meetings. The meetings of the Board of Directors shall be held and conducted subject to the following regulations: (1) Place. Meetings of the Board of Directors of the Corporation, annual, regular or special, are to be held at the principal office or place of business of the Corporation, or such other place, either within or without the State of Texas, as may be specified in the respective notices, or waivers of notice, thereof. (2) Annual Meeting. The Board of Directors shall meet each year immediately after the annual meeting of the shareholders, at the place where such meeting of the shareholders has been held (either within or without the State of Texas), for the purpose of organizations, election of officers, and consideration of any other business that may properly be brought before the meeting. No notice of any kind to either old or new members of the Board of Directors for such annual meeting shall be required. (3) Regular Meetings. Regular meetings of the Board of Directors may be held without notice at such time and at such place or places as shall from time to time be determined and designated by the Board. (4) Special Meetings. Special meetings of the Board of Directors may be called by the Chairman of the Board or the President of the Corporation on notice of two (2) days to each Director either personally or by mail or by telegram; special meetings shall be called by the Chairman of the Board or the President or Secretary in like manner and on like notice on the written request of two (2) Directors. -12- 18 (5) Notice and Waiver of Notice. Attendance of a Director at any meeting shall constitute a waiver of notice of such meeting, except where a Director attends for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular meeting of the Board of Directors need be specified in the notice or waiver of notice of such meeting. (6) Quorum. At all meetings of the Board of Directors, a majority of the number of Directors fixed by these By-Laws shall constitute a quorum for the transaction of business, until a greater number is required by law or by the Articles of Incorporation. If a quorum shall not be present at any meeting of Directors, the Directors present thereat may adjourn the meeting, from time to time, without notice other than announcement at the meeting, until a quorum shall be present. (7) Requisite Vote. The act of a majority of the Directors present at any meeting at which a quorum is present shall be the act of the Board of Directors unless the act of a greater number is required by statute or by the Articles of Incorporation or by these By-Laws. 3.09 Action Without Meetings. Unless otherwise restricted by the Articles of Incorporation or these ByLaws, any action required or permitted by law to be taken at any meetings of the Board of Directors, or any committee thereof, may be taken without a meeting, if prior to such action a written consent thereto is signed by all members of the Board or of such committee, as the case may be, and such written consent is filed in the minutes or proceedings of the Board of Directors or committee. -13- 19 3.10 Committees. Committees designated and appointed by the Board of Directors shall function subject to and in accordance with the following regulations and procedures: (1) Designation and Appointment. The Board of Directors may, by resolution adopted by a majority of the entire Board, designate and appoint one or more committees under such name or names and for such purpose or function as may be deemed appropriate. (2) Members; Terms. Each Committee thus designated and appointed shall consist of two or more of the Directors of the Corporation, one of whom, in the case of the Executive Committee, shall be the President. The members of any such committee shall serve at the pleasure of and subject to the discretion of the Board of Directors. (3) Authority. Each Committee, to the extent provided in the resolution of the Board creating same, shall have and may exercise such of the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation as the Board of Directors may direct and delegate, except, however, those matters which are required by statute to be reserved unto or acted upon by the entire Board of Directors. (4) Records. Each such Committee shall keep and maintain regular records or minutes of its meetings and report the same to the Board of Directors when required. (5) Change in Number. The number of members of any Committee appointed by the Board of Directors, as herein provided, may be increased or decreased (but not below two) from time to time by appropriate resolution adopted by a majority of the entire Board of Directors. (6) Vacancies. Vacancies in the membership of any committee designated and appointed hereunder shall be filled by the Board of Directors, at a regular or special meeting of the Board of Directors, in a manner consistent with the provisions of this Section 3.10. (7) Removal. Any member of any committee appointed hereunder may be removed by the Board of -14- 20 Directors by the affirmative vote of a majority of the entire Board, whenever in its judgment the best interests of the Corporation will be served thereby. (8) Meetings. The time, place and notice (if any) of committee meetings shall be determined by the members of such committee. (9) Quorum; Requisite Vote. At meetings of any committee appointed hereunder, a majority of the number of members designated by the Board of Directors shall constitute a quorum for the transaction of business. The act of a majority of the members of the committee present at any meeting at which a quorum is present shall be the act of such committee, except as otherwise specifically provided by statute or by the Articles of Incorporation or by these By-Laws. If a quorum is not present at a meeting of such committee, the members of such committee present may adjourn the meeting from time to time, without notice other than an announcement at the meeting, until a quorum is present. (10) Compensation. Appropriate compensation for members of any committee appointed pursuant to the authority hereof may be authorized by the action of a majority of the entire Board of Directors pursuant to the provisions of Section 3.11 hereof. (11) Action Without Meetings. Any action required or permitted to be taken at a meeting of any committee may be taken without a meeting if a consent in writing, setting forth the action so taken, is signed by all members of such committee. Such consent shall have the same force and effect as a unanimous vote at a meeting. The signed consent, or a signed copy, shall become a part of the record of such committee. (12) Responsibility. Notwithstanding any provision to the contrary herein, the designation and appointment of a committee and the delegation of authority to it shall not operate to relieve the Board of Directors, or any member thereof, of any responsibility imposed upon it or him by law. 3.11 Compensation. By appropriate resolution of the Board of Directors, the Directors may be reimbursed their -15- 21 expenses, if any, of attendance at each meeting of the Board of Directors and may be paid a fixed sum (as determined from time to time by the vote of a majority of the Directors then in office) 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 another capacity and receiving compensation therefor. Members of special or standing committees may, by appropriate resolution of the Board of Directors, be allowed similar reimbursement of expenses and compensation for attending committee meetings. 3.12 Maintenance of Records. The Directors may keep the books and records of the Corporation, except such as are required by law to be kept within the State, outside the State of Texas or at such place or places as they may, from time to time, determine. 3.13 Interested Directors and Officers. Any contract or other transaction between the Corporation and one or more of its Directors or officers, or between the Corporation and any firm of which one or more of its Directors or officers are members or employees, or in which they are interested, or between the Corporation and any corporation or association of which one or more of its Directors or officers are shareholders, members, directors, officers, or employees, or in which -16- 22 they are interested, shall be valid for all purposes, notwithstanding the presence of such Director or Directors or officer or officers at the meeting of the Board of Directors of the Corporation, which acts upon, or in reference to, such contract, or transaction, and notwithstanding his or their participation in such act, if the fact of such interest shall be disclosed or known to the Board of Directors and the Board of Directors shall, nevertheless, authorize, approve and ratify such contract or transaction by a vote of a majority of the Directors present, such interested Director or Directors to be counted in determining whether a quorum is present, but not to be counted in calculating the majority of such quorum necessary to carry such vote. The provisions of this Section shall not be construed to invalidate any contract or other transaction which would otherwise be valid under the common and statutory law applicable thereto. ARTICLE 4 NOTICES 4.01 Method of Notice. Whenever under the provisions of the Texas Business Corporation Act or of the Articles of Incorporation or of these By-Laws, notice is required to be given to any Director or shareholder, it shall not be construed to mean personal notice, but such notice may be given in writing, by mail, addressed to such Director or -17- 23 shareholder, at his 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. Notice to Directors or shareholders may also be given by telegram. 4.02 Waiver. Whenever any notice whatever is required to be given under the provisions of the Texas Business Corporation Act or under the provisions of the Articles of Incorporation or these By-Laws, 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 the giving of such notice. Attendance by such person or persons, whether in person or by proxy, at any meeting requiring notice shall constitute a waiver of notice of such meeting, except as provided in Section 3.08(5) hereof. ARTICLE 5 OFFICERS AND AGENTS 5.01 Designation. The officers of the Corporation shall be chosen by the Board of Directors and shall consist of the offices of: (1) President, Vice-President, Secretary and Treasurer; and -18- 24 (2) Such other offices and officers (including a Chairman of the Board and additional Vice-Presidents) and assistant officers and agents as the Board of Directors shall deem necessary. 5.02 Election of Officers. Each officer designated in Section 5.01(1) hereof shall be elected by the Board of Directors on the expiration of the term of office of such officer, as herein provided, or whenever a vacancy exists in such office. Each officer or agent designated in Section 5.01(2) above may be elected by the Board at any meeting. 5.03 Qualifications. No officer or agent need be a shareholder of the Corporation or a resident of Texas. No officer or agent is required to be a Director, except the Chairman of the Board. Any two or more offices may be held by the same person, except that the office of the President and the office of the Secretary shall not be held by the same person. 5.04 Term of Office. Unless otherwise specified by the Board of Directors at the time of election or appointment, or by the express provisions of an employment contract approved by the Board, the term of office of each officer and each agent shall expire on the date of the first meeting of Directors next following the annual meeting of shareholders each year. Each such officer or agent shall serve until the -19- 25 expiration of the term of his office or, if earlier, his death, resignation or removal. 5.05 Authority. Officers and agents shall have such authority and perform such duties in the management of the Corporation as are provided in these By-Laws or as may be determined by resolution of the Board of Directors not inconsistent with these By-Laws. 5.06 Removal. Any officer or agent elected or appointed by the Board of Directors may be removed by the Board of Directors whenever in its judgment the best interests of the Corporation will be served thereby. Such removal shall be without prejudice to the contract rights, if any, of the person so removed. Election or appointment of an officer or agent shall not of itself create contract rights. 5.07 Vacancies. Any vacancy occurring in any office of the Corporation (by death, resignation, removal or otherwise) shall be filled by the Board of Directors. 5.08 Compensation. The compensation of all officers and agents of the Corporation shall be fixed from time to time by the Board of Directors. 5.09 Chairman of the Board. If a Chairman of the Board is elected, he shall be chosen from among the Directors and shall be the chief executive and principal officer of the -20- 26 Corporation. He shall have the power to call special meetings of the shareholders and of the Directors for any purpose or purposes, and he shall preside at all meetings of the shareholders and of the Board of Directors, unless he shall be absent or unless he shall, at his election, designate the President to preside in his stead. The Chairman of the Board shall be responsible for the operations and business affairs of the Corporation and shall possess all of the powers granted by the By-Laws to the President, including the power to make and sign contracts and agreements in the name and on behalf of the Corporation. He shall, in general, have supervisory power over the President and all other officers and the business activities of the Corporation, subject to the discretion of the Board of Directors. 5.10 President. Subject to the supervision of the Chairman of the Board, or in the absence of the election of a Chairman of the Board, the President shall be the chief executive officer of the Corporation; shall preside at all meetings of the shareholders and the Board of Directors; shall have general and active management of the business of 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 execute bonds, mortgages and other contracts requiring -21- 27 seal, under the seal of the Corporation, except where required or permitted by law to be otherwise executed and except where the execution thereof shall be expressly delegated by the Board of Directors to some other officer or agent of the Corporation. The President shall perform such other duties and possess such other authority and powers as the Board of Directors may from time to time prescribe. 5.11 Vice-Presidents. The Vice-President, or if there shall be more than one, the Vice-Presidents in the order determined by a majority vote of the Board of Directors, shall, in the prolonged absence or disability of the President (and Chairman of the Board, if one is elected), perform the duties and exercise the powers of the President and shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe or the chief executive officer may from time to time delegate. 5.12 Secretary. The Secretary shall attend all meetings of the Board of Directors and all meetings of the shareholders of the Corporation and record all proceedings of the meetings of the Corporation and of the Board of Directors in a book to be maintained for that purpose and shall perform like duties for the standing committees when required. The Secretary shall give, or cause to be given, notice of all meetings of the shareholders and special meetings of the -22- 28 Board of Directors, and shall perform such other duties as may be prescribed by the Board of Directors, the Chairman of the Board, or President. He shall have custody of the corporate seal of the Corporation, and he, or an Assistant Secretary, shall have authority to affix the same to any instrument requiring it and when so affixed, it may be attested by his signature or by the signature of 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 signature. 5.13 Assistant Secretaries. The Assistant Secretary, or if there be more than one, the Assistant Secretaries in the order determined by the Board of Directors, shall in the absence or disability of the Secretary, perform the duties and exercise the powers of the Secretary and shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe or the chief executive officer may from time to time delegate. 5.14 Treasurer. The Treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the -23- 29 Board of Directors. The Treasurer shall disburse the funds of the Corporation as may be ordered by the Board of Directors, taking proper vouchers for such disbursements, and shall render to the President (and Chairman of the Board, if one is elected) and the Board of Directors, at its regular meetings, or when the Board of Directors so requires, an account of all his transactions as Treasurer and of the financial condition of the Corporation If required by the Board of Directors, he shall give the Corporation a bond in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of his office and for the restoration to the Corporation, in case of his death, resignation, retirement or removal from office, all books, papers, vouchers, money, and other property of whatever kind in his possession or under his control owned by the Corporation. The Treasurer shall perform such other duties and have such other authority and powers as the Board of Directors may from time to time prescribe or as the chief executive officer may from time to time delegate. 5.15 Assistant Treasurers. The Assistant Treasurer, or, if there shall be more than one, the Assistant Treasurers in the order determined by the Board of Directors, shall, in the absence or disability of the Treasurer, perform the -24- 30 duties and exercise the powers of the Treasurer and shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe or as the chief executive officer may from time to time delegate. ARTICLE 6 INDEMNIFICATION 6.01 Third Party Actions. Pursuant to, but cumulative of, the provisions of the Texas Business Corporation Act, as amended, and the Articles of Incorporation, the Board of Directors shall have the power and authority to indemnify and hold harmless each Director or officer of the Corporation, or of any other corporation for which such Director or officer has been requested to serve by the Corporation, who was or is a party or is threatened to be made a party to any threatened, pending or completed action, claim, suit or proceeding, whether civil, criminal, administrative, or investigative (other than an action by or in the right of the Corporation) by reason of the fact that such individual is or was a Director or officer of the Corporation, or is or was serving at the request of the Corporation as a director or officer of another corporation, against judgments, penalties (including excise and similar taxes), fines, amounts paid in settlement and reasonable expenses (including court costs and attorneys' fees) actually incurred by such person in connection with -25- 31 such action, suit or proceeding, if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any such action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful. 6.02 Derivative Actions. The Corporation shall have the power and authority to indemnify and hold harmless any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that such person is or was a Director or officer of the Corporation, or is or was serving at the request of the Corporation as a Director or officer of another corporation, against reasonable expenses (including court costs and attorneys' fees) actually incurred by such person in connection with the defense or settlement of such action or suit if such person acted in good faith and -26- 32 manner he reasonably believed to be in or not opposed to the best interests of the Corporation. 6.03 Authorization of Indemnity. Any indemnification under the foregoing Sections 6.01 and 6.02 (unless ordered by the court) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of such Director or officer is proper in the circumstances by virtue of the fact that it shall have been determined that such person has met the applicable standard of conduct set forth in either or such Sections, as the case may be. Such determination shall be made (1) by a majority vote of a quorum consisting of Directors who at the time of the vote are not named defendants or respondents in the proceeding; (2) if such a quorum cannot be obtained, by a majority vote of a committee of the Board of Directors, designated to act in the matter by a majority vote of all Directors, consisting solely of two (2) or more Directors who at the time of the vote are not named defendants and respondents in the proceeding; (3) by special legal counsel (in a written opinion) selected by the Board of Directors or a committee of the Board by a vote as set forth in Subsection (1) or (2) of this Section, or, if such a quorum cannot be obtained and such committee cannot be established, by a majority vote of all Directors; or (4) by the shareholders of the Corporation in a -27- 33 vote that excludes the shares held by Directors who are named defendants or respondents in the proceeding. 6.04 Indemnification as to Expenses. To the extent that a Director or officer of the Corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in the foregoing Sections 6.01 and 6.02, or in defense of any claim, issue or matter therein, such person shall be indemnified and held harmless against expenses (including attorney's fees) actually and reasonably incurred by him in connection therewith. 6.05 Advance on Expenses. Expenses incurred in defending a civil or criminal action, suit or proceeding may be paid by the Corporation in advance of the final disposition of such action, suit or proceeding as authorized by the Board of Directors in the specific case after (1) the Corporation receives a written affirmation by such Director or officer of his good faith belief that he has met the standard of conduct necessary for indemnification under Sections 6.01 or 6.02 hereof, as applicable, and a written undertaking by or on behalf of such Director or officer to repay the amount paid or reimbursed if it is ultimately determined that he has not met those requirements; and (2) a determination that the facts then known to those making the determination would not preclude indemnification under the provisions of the Texas Business Corporation Act and these By-Laws. -28- 34 6.06 Nature of Indemnification. The indemnification provided hereunder shall not be deemed exclusive of any other rights to which those seeking indemnification may be entitled under the Articles of Incorporation, By-Laws, any agreement, vote of shareholders or disinterested Directors or otherwise, both as to action in his official capacity and as to action in any other capacity while holding such office, and shall continue as to a person who has ceased to be a Director or officer and shall inure to the benefit of the heirs, executors and administrators of such person. 6.07 Insurance. The Corporation shall have the power and authority to purchase and maintain insurance on behalf of any person who is or was a Director, officer employee or agent of the Corporation, or who is or was serving at the request of the Corporation as a Director, officer, partner, venturer, proprietor, trustee, employee, agent, or similar functionary of another foreign or domestic corporation, partnership, joint venture, sole proprietorship, trust, or other enterprise, or employee benefit plan against any liability, claim, damage, loss or risk asserted against such person and incurred by such person in any such capacity, or arising out of the status of such person as such, irrespective of whether the Corporation would have the power to indemnify and -29- 35 hold such person harmless against such liability under the provisions hereof. ARTICLE 7 STOCK CERTIFICATES AND TRANSFER REGULATIONS 7.01 Description of Certificates. The shares of the capital stock of the Corporation shall be represented by certificates in the form approved by the Board of Directors and signed in the name of the Corporation by the President or a Vice-President and the Secretary or an Assistant Secretary of the Corporation, and sealed with the seal of the Corporation or a facsimile thereof. Each certificate shall state on the face thereof the name of the holder, the number and class of shares, the par value of shares covered thereby or a statement that such shares are without par value, and such other matters as are required by law. At such time as the Corporation may be authorized to issue shares of more than one class, every certificate shall set forth upon the face or back of such certificate a statement of the designations, preferences, limitations and relative rights of the shares of each class authorized to be issued, as required by the laws of the State of Texas. 7.02 Delivery. Every holder of the capital stock in the Corporation shall be entitled to have a certificate signed in the name of the Corporation by the President or a -30- 36 Vice-President and the Secretary or an Assistant Secretary of the Corporation, certifying the class of capital stock and the number of shares represented thereby as owned or held by such shareholder in the Corporation. 7.03 Signatures. The signatures of the President, Vice-President, Secretary or Assistant Secretary upon a certificate may be facsimiles if the certificate is countersigned (l) by a transfer agent or an assistant transfer agent, or (2) by a transfer clerk acting on behalf of the Corporation and a registrar. In case any officer or officers who have signed, or whose facsimile signature or signatures have been placed upon any such certificate or certificates, shall cease to serve as such officer or officers of the Corporation, whether because of death, resignation, removal or otherwise, before such certificate or certificates are issued and delivered by the Corporation, such certificate or certificates may nevertheless be adopted by the Corporation and be issued and delivered with the same effect as though the person or persons who signed such certificate or certificates or whose facsimile signature or signatures have been used thereon had not ceased to serve as such officer or officers of the Corporation. 7.04 Issuance of Certificates. Certificates evidencing shares of its capital stock (both treasury and authorized but unissued) may be issued for such consideration (not less than -31- 37 par value) and to such persons as the Board of Directors may determine from time to time. Shares shall not be issued until the full amount of the consideration, fixed as provided by law, has been paid. 7.05 Payment for Shares. Consideration for the issuance of shares shall be paid, valued and allocated as follows: (1) Consideration. The consideration for the issuance of shares shall consist of money paid, labor done (including services actually performed for the Corporation), or property (tangible or intangible) actually received. Neither promissory notes nor the promise of future services shall constitute payment of consideration for shares. (2) Valuation. In the absence of fraud in the transaction, the determination of the Board of Directors as to the value of consideration received shall be conclusive. (3) Effect. When consideration, fixed as provided by law, has been paid, the shares shall be deemed to have been issued and shall be considered fully paid and non-assessable. (4) Allocation of Consideration. The consideration received for shares shall be allocated by the Board of Directors, in accordance with law, between the stated capital and capital surplus accounts. 7.06 Subscriptions. Unless otherwise provided in the subscription agreement, subscriptions of shares, whether made before or after organization of the Corporation, shall be paid in full in such installments and at such times as shall be determined by the Board of Directors. Any call made by the Board of Directors for payment on subscriptions shall be -32- 38 uniform as to all shares of the same class and series. In case of default in the payment of any installment or call when payment is due, the Corporation may proceed to collect the amount due in the same manner as any debt due to the Corporation. 7.07 Closing of Transfer Books; Record Date. For the purpose of determining shareholders entitled to notice of or to vote at any meeting of shareholders, or any adjournment thereof, or entitled to receive payment of any dividend, or in order to make a determination of shareholders for any other proper purpose, the Board of Directors may provide that stock transfer books shall be closed for a stated period of time not to exceed, in any case, fifty (50) days. If the stock transfer books shall be closed for the purpose of determining shareholders, such books shall be closed for at least ten (10) days immediately preceding such meeting. In lieu of closing the stock transfer books, as aforesaid, the Board of Directors may fix in advance a date as the record date for any such determination of shareholders, such date in any case to be not more than fifty (50) days, and in case of a meeting of shareholders, not less than ten (10) days prior to the date on which the particular action requiring such determination of shareholders is to be taken. If the stock transfer books are not closed and the record date is fixed for the determination of shareholders entitled to notice of -33- 39 or to vote at a meeting of shareholders, or shareholders entitled to receive payment of a dividend, the date on which notice of the meeting is mailed or the date on which the resolution of the Board of Directors declaring such dividend is adopted, as the case may be, shall be the record date for such determination of shareholders. When a determination of shareholders entitled to vote at any meeting of shareholders has been made as provided in this Section, such determination shall be applied to any adjournment thereof except where the determination has been made through the closing of the stock transfer books and the stated period of closing has expired. 7.08 Registered Owners. Prior to due presentment for registration of transfer of a certificate evidencing shares of the capital stock of the Corporation in the manner set forth in Section 7.10 hereof, the Corporation shall be entitled to recognize the person registered as the owner of such shares on its books (or the books of its duly appointed transfer agent, as the case may be) as the person exclusively entitled to vote, to receive notices and dividends with respect to, and otherwise exercise all rights and powers relative to such shares; and the Corporation shall not be bound or otherwise obligated to recognize any claim, direct or indirect, legal or equitable, to such shares by any other person, whether or not it shall have actual, express or other -34- 40 notice thereof, except as otherwise provided by the laws of Texas. 7.09 Lost, Stolen or Destroyed Certificates. The Corporation shall issue a new certificate in place of any certificate for shares previously issued if the registered owner of the certificate satisfies the following conditions: (1) Proof of Loss. Submits proof in affidavit form satisfactory to the Corporation that such certificate has been lost, destroyed or wrongfully taken; and (2) Timely Request. Requests the issuance of a new certificate before the Corporation has notice that the certificate has been acquired by a purchaser for value in good faith and without notice of an adverse claim; and (3) Bond. Gives a bond in such form, and with such surety or sureties, with fixed or open penalty, as the Corporation may direct, to indemnify the Corporation (and its transfer agent and registrar, if any) against any claim that may be made or otherwise asserted by virtue of the alleged loss, destruction, or theft of such certificate or certificates; and (4) Other Requirements. Satisfies any other reasonable requirements imposed by the Corporation. In the event a certificate has been lost, apparently destroyed or wrongfully taken, and the registered owner of record fails to notify the Corporation within a reasonable time after he has notice of such loss, destruction, or wrongful taking, and the Corporation registers a transfer (in the manner hereinbelow set forth) of the shares represented by the certificate before receiving such notification, such prior registered owner of record shall be precluded from -35- 41 making any claim against the Corporation for the transfer required hereunder or for a new certificate. 7.10 Registration of Transfers. Subject to the provisions hereof, the Corporation shall register the transfer of a certificate evidencing shares of its capital stock presented to it for transfer if: (1) Endorsement. Upon surrender of the certificate to the Corporation (or its transfer agent, as the case may be) for transfer, the certificate (or an appended stock power) is properly endorsed by the registered owner, or by his duly authorized legal representative or attorney-in-fact, with proper written evidence of the authority and appointment of such representative, if any, accompanying the certificate; and (2) Guaranty and Effectiveness of Signature. The signature of such registered owner or his legal representative or attorney-in-fact, as the case may be, has been guaranteed by a national banking association or member of the New York Stock Exchange, and reasonable assurance in a form satisfactory to the Corporation is given that such endorsements are genuine and effective; and (3) Adverse Claims. The Corporation has no notice of an adverse claim or has otherwise discharged any duty to inquire into such a claim; and (4) Collection of Taxes. Any applicable law (local, state or federal) relating to the collection of taxes relative to the transaction has been complied with; and (5) Additional Requirements Satisfied. Such additional conditions and documentation as the Corporation (or its transfer agent, as the case may be) shall reasonably require, including without limitation there to, the delivery with the surrender of such stock certificate or certificates proper evidence of succession, assignment or other authority to obtain transfer thereof, as the circumstances may require, and such legal opinions with reference to the requested transfer as shall be required by the Corporation (or its transfer -36- 42 agent) pursuant to the provisions of these By-Laws and applicable law, shall have been satisfied. 7.11 Restrictions on Transfer and Legends on Certificates. (1) Shares in Classes or Series. If the Corporation is authorized to issue shares of more than one class, the certificate shall set forth, either on the face or back of the certificate, a full or summary statement of all of the designation, preferences, limitations, and relative rights of the shares of such class and, if the Corporation is authorized to issue any preferred or special class in series, the variations in the relative rights and preferences of the shares of each such series so far as the same have been fixed and determined, and the authority of the Board of Directors to fix and determine the relative rights and preferences of subsequent series. In lieu of providing such a statement in full on the certificate, a statement on the face or back of the certificate may provide that the Corporation will furnish such information to any shareholder without charge upon written request to the Corporation at its principal place of business or registered office and that copies of the information are on file in the office of the Secretary of State. (2) Restriction on Transfer. Any restrictions imposed by the Corporation on the sale or other disposition of its shares and on the transfer thereof must be copied at length or in summary form on the face, or so copied on the -37- 43 back and referred to on the face, of each certificate representing shares to which the restriction applies. The certificate may however state on the face or back that such a restriction exists pursuant to a specified document and that the Corporation will furnish a copy of the document to the holder of the certificate without charge upon written request to the Corporation at its principal place of business. (3) Pre-Emptive Rights. Any preemptive rights of a shareholder to acquire unissued or treasury shares of the Corporation which are limited or denied by the Articles of Incorporation must be set forth at length on the face or back of the certificate representing shares subject thereto. In lieu of providing such a statement in full on the certificate, a statement on the face or back of the certificate may provide that the Corporation will furnish such information to any shareholder without charge upon written request to the Corporation at its principal place of business and that a copy of such information is on file in the office of the Secretary of State. (4) Unregistered Securities. Any security of the Corporation, including, among others, any certificate evidencing shares of the Common Stock or warrants to purchase Common Stock of the Corporation, which is issued to any person without registration under the Securities Act of 1933, as amended, or the Blue Sky laws of any state, shall not be transferable until the Corporation has been furnished with a -38- 44 legal opinion of counsel with reference thereto, satisfactory in form and content to the Corporation and its counsel, to the effect that such sale, transfer or pledge does not involve a violation of the Securities Act of 1933, as amended, or the Blue Sky laws of any state having jurisdiction. The certificate representing the security shall bear substantially the following legend: "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR UNDER THE BLUE SKY LAWS OF ANY STATE AND MAY NOT BE OFFERED, SOLD OR TRANSFERRED UNLESS SUCH OFFER, SALE OR TRANSFER WILL NOT BE IN VIOLATION OF THE SECURITIES ACT OF 1933 OR ANY APPLICABLE BLUE SKY LAWS. ANY OFFER; SALE OR TRANSFER OF THESE SECURITIES MAY NOT BE MADE WITHOUT THE PRIOR WRITTEN APPROVAL OF THE CORPORATION OR ITS COUNSEL." ARTICLE 8 GENERAL PROVISIONS 8.01 Dividends. Subject to the provisions of the Texas Business Corporation Act, as amended, and the Articles of Incorporation, dividends of the Corporation shall be declared and paid pursuant to the following regulations: (1) Declaration and Payment. Dividends on the issued and outstanding shares of capital stock of the Corporation may be declared by the Board of Directors at any regular or special meeting and may be paid in cash, in property, property, or in shares of capital stock. Such declaration -39- 45 and payment shall be at the discretion of the Board of Directors. (2) Record Date. The Board of Directors may fix in advance a record date for the purpose of determining shareholders entitled to receive payment of any dividend, such record date to be not more than fifty (50) days prior to the payment date of such dividend, or the Board of Directors may close the stock transfer books for such purpose for a period of not more than fifty (50) days prior to the payment date of such dividend. In the absence of action by the Board of Directors, the date upon which the Board of Directors adopts the resolution declaring such dividend shall be the record date. 8.02 Reserves. There may be created by resolution of the Board of Directors out of the earned surplus of the Corporation such reserve or reserves as the Directors from time to time, in their discretion, think proper to provide for contingencies, or to equalize dividends, or to repair or maintain any property of the Corporation, or for such other purposes as the Directors shall think beneficial to the Corporation, and the Directors may modify or abolish any such reserve in the manner in which it was created. 8.03 Books and Records. The Corporation shall maintain correct and complete books and records of account and shall prepare and maintain minutes of the proceedings of its -40- 46 shareholders and Board of Directors, and shall keep at its registered office or principal place of business, or at the office of its transfer agent or registrar, a record of its shareholders, giving the names and addresses of all shareholders and the number and class of the shares held by each. 8.04 Annual Statement. The Board of Directors shall present at or before each annual meeting of shareholders a full and clear statement of the business and financial condition of the Corporation, including a reasonably detailed balance sheet and income statement under current date. 8.05 Checks and Notes. All checks or demands for money and notes of the Corporation shall be signed by such officer or officers or such other person or persons as the Board of Directors may from time to time designate. 8.06 Fiscal Year. The fiscal year of the Corporation shall be fixed by resolution of the Board of Directors. 8.07 Corporate Seal. The Corporation seal shall be in such form as may be determined by the Board of Directors. The seal may be used by causing it or a facsimile thereof to be impressed or affixed or in any manner reproduced. 8.08 Resignations. Any director, officer or agent may resign his office or position with the Corporation by delivering written notice thereof to the President or the -41- 47 Secretary. Such resignation shall be effective at the time specified therein, or immediately upon delivery if no time is specified. Unless otherwise specified therein, an acceptance of such resignation shall not be a necessary prerequisite of its effectiveness. 8.09 Amendment of By-Laws. These By-Laws may be altered, amended, or repealed and new By-Laws adopted at any meeting of the Board of Directors at which a quorum is present, by the affirmative vote of a majority of the Directors present at such meeting, provided notice of the proposed alteration, amendment, or repeal be contained in the notice of such meeting. 8.10 Construction. Whenever the context so requires herein, the masculine shall include the feminine and neuter, and the singular shall include the plural, and conversely. If any portion or provision of these By-Laws shall be held invalid or inoperative, then, so far as is reasonable and possible: (1) the remainder of these By-Laws shall be considered valid and operative, and (2) effect shall be given to the intent manifested by the portion or provision held invalid or inoperative. 8.11 Telephone Meetings. Shareholders, Directors, or members of any committee may hold any meeting of such shareholders, Directors or committee by means of conference -42- 48 telephone or similar communications equipment which permits all persons participating in the meeting to hear each other and actions taken at such meetings shall have the same force and effect as a unanimous vote at a meeting in person. The Secretary of the Corporation shall prepare a memorandum of the action taken. 8.12 Table of Contents; Cautions. The table of contents and captions used in these By-Laws have been inserted for administrative convenience only and do not constitute matter to be construed in interpretation. IN DUE CERTIFICATION WHEREOF, the undersigned, being the sole member of the Board of Directors of VERTEX COMMUNICATIONS CORPORATION, confirms the adoption and approval of the foregoing By-Laws, effective as of the 5th day of October, 1984. DIRECTORS: /s/ J. Rex. Vardeman ---------------------------------------- J. REX VARDEMAN, Sole Director -43- 49 FIRST AMENDMENT TO THE CORPORATE BYLAWS OF VERTEX COMMUNICATIONS CORPORATION (a Texas corporation) THE STATE OF TEXAS ) ) KNOW ALL MEN BY THESE PRESENTS: COUNTY OF DALLAS ) THAT, the undersigned, being the duly elected and serving Secretary of VERTEX COMMUNICATIONS CORPORATION, a Texas corporation (the "Company"), does hereby certify and affirm that the following is an original counterpart of the First Amendment to the Corporate Bylaws of the Company, unanimously adopted and approved by the Board of Directors of the Company at the annual meeting of the Board of Directors duly called and held on February 11, 1988, at which a quorum of the Directors was present, whereby Article 6 of the Corporate Bylaws of the Company was amended to read in its entirety as follows: ARTICLE 6 INDEMNIFICATION 6.01 Indemnification. Each person who was or is made a party or is threatened to be made a party, or who was or is a witness without being named a party, to any threatened, pending or completed action, claim, suit or proceeding, whether civil, criminal, administrative or investigative, any appeal in such an action, suit or proceeding, and any inquiry or investigation that could lead to such an action, suit or proceeding (a "Proceeding"), by reason of the fact that such individual is or was a Director, officer, employee or agent of the Corporation, or is or FIRST AMENDMENT TO THE CORPORATE BYLAWS - PAGE 1 50 was serving at the request of the Corporation as a director, officer, partner, venturer, proprietor, trustee, employee, agent or similar functionary of another corporation, partnership, trust, employee benefit plan or other enterprise, shall be indemnified and held harmless by the Corporation from and against any judgments, penalties (including excise taxes), fines, amounts paid in settlement and reasonable expenses (including court costs and attorneys' fees) actually incurred by such person in connection with such Proceeding if it is determined that he acted in good faith and reasonably believed (i) in the case of conduct in his official capacity on behalf of the Corporation that his conduct was in the Corporation's best interests, (ii) in all other cases, that his conduct was not opposed to the best interests of the Corporation, and (iii) with respect to any Proceeding which is a criminal action, that he had no reasonable cause to believe his conduct was unlawful; provided, however, that in the event a determination is made that such person is liable to the Corporation or is found liable on the basis that personal benefit was improperly received by such person, the indemnification is limited to reasonable expenses actually incurred by such person in connection with the Proceeding and shall not be made in respect of any Proceeding in which such person shall have been found liable for willful or intentional misconduct in the performance of his duty to the Corporation. The termination of any Proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself be determinative of whether the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any Proceeding which is a criminal action, had reasonable cause to believe that his conduct was unlawful. A person shall be deemed to have been found liable in respect of any claim, issue or matter only after the person shall have been so adjudged by a court of competent jurisdiction after exhaustion of all appeals therefrom. FIRST AMENDMENT TO THE CORPORATE BYLAWS - PAGE 2 51 6.02 Determination of Indemnification. Any indemnification under the foregoing Section 6.01 (unless ordered by a court of competent jurisdiction) shall be made by the Corporation only upon a determination that indemnification of such person is proper in the circumstances by virtue of the fact that it shall have been determined that such person has met the applicable standard of conduct. Such determination shall be made (1) by a majority vote of a quorum consisting of Directors who at the time of the vote are not named defendants or respondents in the Proceeding; (2) if such quorum cannot be obtained, by a majority vote of a committee of the Board of Directors, designated to act in the matter by a majority of all Directors, consisting solely of two or more Directors who at the time of the vote are not named defendants or respondents in the Proceeding; (3) by special legal counsel (in a written opinion) selected by the Board of Directors or a committee of the Board by a vote as set forth in Subsection (1) or (2) of this Section, or, if such quorum cannot be obtained and such committee cannot be established, by a majority vote of all Directors (in which Directors who are named defendants or respondents in the Proceeding may participate); or (4) by the shareholders of the Corporation in a vote that excludes the shares held by Directors who are named defendants or respondents in the Proceeding. 6.03 Advance of Expenses. Reasonable expenses, including court costs and attorneys' fees, incurred by a person who was or is a witness or who was or is named as a defendant or respondent in a Proceeding, by reason of the fact that such 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, partner, venturer, proprietor, trustee, employee, agent or similar functionary of another corporation, partnership, trust, employee benefit plan or other enterprise, shall be paid by the Corporation at reasonable intervals in advance of the final disposition of such Proceeding, upon receipt by the Corporation of a written FIRST AMENDMENT TO THE CORPORATE BYLAWS - PAGE 3 52 affirmation by such person of his good faith belief that he has met the standard of conduct necessary for indemnification under this Article 6, and a written undertaking by or on behalf of such person to repay the amount paid or reimbursed by the Corporation if it is ultimately determined that he is not entitled to be indemnified by the Corporation as authorized in this Article 6. Such written undertaking shall be an unlimited obligation of such person and it may be accepted without reference to financial ability to make repayment. 6.04 Nature of Indemnification. The indemnification and advancement of expenses provided hereunder shall not be deemed exclusive of any other rights to which those seeking indemnification may be entitled under the Articles of Incorporation, these By-Laws, any agreement, vote of shareholders or disinterested Directors or otherwise, both as to actions taken in an official capacity and as to actions taken in any other capacity while holding such office, shall continue as to a person who has ceased to be a Director, officer, employee or agent of the Corporation and shall inure to the benefit of the heirs, executors and administrators of such person. 6.05 Insurance. The Corporation shall have the power and authority to purchase and maintain insurance or another arrangement on behalf of any person who is or was a Director, officer, employee or agent of the Corporation, or who is or was serving at the request of the Corporation as a Director, officer, partner, venturer, proprietor, trustee, employee, agent, or similar functionary of another foreign or domestic corporation, partnership, joint venture, sole proprietorship, trust, employee benefit plan or other enterprise against any liability, claim, damage, loss or risk asserted against such person and incurred by such person in any such capacity or arising out of the status of such person as such, irrespective of whether the Corporation would have the power to indemnify and hold such person harmless against such liability under the provisions hereof. FIRST AMENDMENT TO THE CORPORATE BYLAWS - PAGE 4 53 6.06 Notice. Any indemnification or advance of expenses to a present or former director of the Corporation in accordance with this Article 6 shall be reported in writing to the shareholders of the Corporation with or before the notice or waiver of notice of the next shareholders' meeting or with or before the next submission of a consent to action without a meeting and, in any case, within the next twelve month period immediately following the indemnification or advance. IN DUE AUTHENTICATION WHEREOF, the undersigned, being hereunto duly authorized, has set his hand as of this 11th day of February, 1988. VERTEX COMMUNICATIONS CORPORATION By: /s/ Bill Womble ---------------------------------------- Bill Womble, Secretary FIRST AMENDMENT TO THE CORPORATE BYLAWS - PAGE 5 54 SECOND AMENDMENT TO THE CORPORATE BYLAWS OF VERTEX COMMUNICATIONS CORPORATION (a Texas corporation) ================================================================================ THE STATE OF TEXAS ) ) KNOW ALL MEN BY THESE PRESENTS: COUNTY OF GREGG ) That, the undersigned, being the duly elected and acting Secretary of VERTEX COMMUNICATIONS CORPORATION, a Texas corporation (the "Company"), does hereby CERTIFY and AFFIRM that the following is an original counterpart of the Second Amendment to the Corporate Bylaws of the Company, unanimously adopted and approved by the Board of Directors of the Company at a regular meeting of the Board of Directors duly called and held on October 29, 1991, at which a quorum of the Directors was present, whereby the Corporate Bylaws of the Company were amended as follows: 1. Section 2.10 of Article 2 of the Corporate Bylaws of the Company is amended to read in its entirety as follows: "2.10 Record Date: Closing Transfer Books. As more specifically provided in Article 7, Section 7.07 hereof, the Board of Directors may fix in advance a record date for the purpose of determining shareholders entitled to notice of or to vote at a meeting of shareholders, such record date to be not less than ten (10) nor more than sixty (60) days prior to such meeting, or the Board of Directors may close the stock transfer books for such purpose for a period of not less than ten (10) nor more than sixty (60) days prior to such meeting. In the absence of any action by the Board of Directors, the date upon which the notice of the meeting is mailed shall be deemed the record date." SECOND AMENDMENT TO THE CORPORATE BYLAWS OF VERTEX COMMUNICATIONS CORPORATION - PAGE 1 55 2. Section 7.07 of Article 7 of the Corporate Bylaws of the Company is amended to read in its entirety as follows: "7.07 Closing of Transfer Books: Record Date. For the purpose of determining shareholders entitled to notice of or to vote at any meeting of shareholders, or any adjournment thereof, or entitled to receive payment of any dividend, or in order to make a determination of shareholders for any other proper purpose, the Board of Directors may provide that the stock transfer books shall be closed for a stated period of time not to exceed, in any case, sixty (60) days. If the stock transfer books shall be closed for the purpose of determining shareholders, such books shall be closed for at least ten (10) days immediately preceding such meeting. In lieu of closing the stock transfer books, as aforesaid, the Board of Directors may fix in advance a date as the record date for any such determination of shareholders, such date in any case to be not more than sixty (60) days, and in case of a meeting of shareholders, not less than ten (10) days prior to the date on which the particular action requiring such determination of shareholders is to be taken. If the stock transfer books are not closed and the record date is not fixed for the determination of shareholders entitled to notice of or to vote at a meeting of shareholders, or shareholders entitled to receive payment of a dividend, the date on which notice of the meeting is mailed or the date on which the resolution of the Board of Directors declaring such dividend is adopted, as the case may be, shall be the record date for such determination of shareholders. When a determination of shareholders entitled to vote at any meeting of shareholders has been made as provided in this Section, such determination shall be applied to any adjournment thereof, except where the determination has been made through the closing of the stock transfer books and the stated period of closing has expired." SECOND AMENDMENT TO THE CORPORATE BYLAWS OF VERTEX COMMUNICATIONS CORPORATION - PAGE 2 56 IN DUE AUTHENTICATION WHEREOF, the undersigned, being hereunto duly authorized, has set his hand as of this 29th day of October, 1991. VERTEX COMMUNICATIONS CORPORATION By: /s/ Bill R. Womble -------------------------------------- BILL R. WOMBLE, Secretary SECOND AMENDMENT TO THE CORPORATE BYLAWS OF VERTEX COMMUNICATIONS CORPORATION - PAGE 3 EX-5.1 4 OPINION/CONSENT OF THOMPSON & KNIGHT, P.C. 1 EXHIBIT 5.1 ================================================================================ VERTEX COMMUNICATIONS CORPORATION EXHIBIT 5.1 TO FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ================================================================================ 2 Exhibit 5.1 THOMPSON & KNIGHT A PROFESSIONAL CORPORATION ATTORNEYS AND COUNSELORS 1700 PACIFIC AVENUE, SUITE 3300 DALLAS, TEXAS 75201-4693 (214) 969-1700 FAX (214) 969-1751 May 22, 1998 Vertex Communications Corporation 2600 North Longview Street Kilgore, Texas 756622 Re: VERTEX COMMUNICATIONS CORPORATION; FORM S-3 REGISTRATION STATEMENT Gentlemen: We have acted as counsel for Vertex Communications Corporation, a Texas corporation (the "Company"), in connection with the preparation of the Company's Registration Statement on Form S-3 (the "Registration Statement"), filed with the Securities and Exchange Commission (the "Commission") under the Securities Act of 1933, as amended (the "Securities Act"), covering the proposed sale of up to 474,349 shares (the "Shares") of Common Stock, par value $.10 per share, of the Company by the Selling Shareholders named therein (the "Selling Shareholders"). The Shares are proposed to be sold by the Selling Shareholders in the manner set forth in the Prospectus constituting Part I of the Registration Statement under the caption "Plan of Distribution". In connection with the foregoing, we have examined the originals or copies, certified or otherwise authenticated to our satisfaction, of such corporate records of the Company, certificates of public officials and other instruments and documents as we have deemed necessary to require as a basis for the opinion hereinafter expressed. As to questions of fact material to such opinion, we have, where relevant facts are not independently established, relied upon statements of officers of the Company. On the basis of the foregoing and in reliance thereon, we advise you that in our opinion the Shares to be sold by the Selling Shareholders pursuant to the Registration Statement have been duly and validly authorized by the Company and, when sold by the Selling Shareholders as described in the Registration Statement, will be legally issued, fully paid and nonassessable. We hereby consent to the filing of this opinion with the Commission as Exhibit 5.1 of the Registration Statement and to the reference to us in the Prospectus under the caption "Legal Matters". In giving this consent, we do not thereby admit that we come within the category of persons whose consent is required under Section 7 of the Securities Act or the rules or regulations of the Commission thereunder. 3 Vertex Communications Corporation May 22, 1998 Page 2 Respectfully submitted, THOMPSON & KNIGHT, P.C. A Professional Corporation By: /s/ Bill R. Womble ----------------------------------- BILL R. WOMBLE, Attorney EX-23.2 5 CONSENT OF INDEPENDENT ACCOUNTANTS 1 EXHIBIT 23.2 ================================================================================ VERTEX COMMUNICATIONS CORPORATION EXHIBIT 23.2 TO FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ================================================================================ 2 Exhibit 23.2 Consent of Independent Accountants As independent public accountants, we hereby consent to the incorporation by reference in this Form S-3 Registration Statement of our reports dated October 24, 1997, included in Vertex Communications Corporation's Form 10-K for the year ended September 30, 1997, and to all references to our Firm included in the registration statement. ARTHUR ANDERSEN LLP Dallas, Texas May 22, 1998 -----END PRIVACY-ENHANCED MESSAGE-----