-----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, WgAJha0ZKyVm76a1HnPXKWyNqL887cYjXt7ZVlt3GJI2cO/e1lbZXV/sPwSNQjLk N/rYX9iyM72yRXQ7lawecQ== 0000867105-97-000004.txt : 19970505 0000867105-97-000004.hdr.sgml : 19970505 ACCESSION NUMBER: 0000867105-97-000004 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19970330 FILED AS OF DATE: 19970502 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: CYRIX CORP CENTRAL INDEX KEY: 0000867105 STANDARD INDUSTRIAL CLASSIFICATION: SEMICONDUCTORS & RELATED DEVICES [3674] IRS NUMBER: 752218250 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-21904 FILM NUMBER: 97593870 BUSINESS ADDRESS: STREET 1: 2703 N CENTRAL EXPRESSWAY CITY: RICHARDSON STATE: TX ZIP: 75080 BUSINESS PHONE: 2149948387 MAIL ADDRESS: STREET 1: MS 220 STREET 2: PO BOX 853920 CITY: RICHARDSON STATE: TX ZIP: 75085-3920 10-Q 1 ----------------------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q --------------- (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 30, 1997 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from .................... to ................... Commission File 0-21904 Cyrix Corporation (Exact name of registrant as specified in its charter) Delaware 75-2218250 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 2703 North Central Expressway, Richardson, TX 75080 (Address of principal executive offices) (Zip Code) 972-968-8387 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ------ ------- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Common Stock, $.004 Par Value 19,631,498 (Title of Each Class) (Number of Shares Outstanding at April 17, 1997) ----------------------------------------------- CYRIX CORPORATION INDEX Part I. Financial Information Page No. Item 1. Financial Statements Consolidated Balance Sheets as of March 31, 1997 and December 31, 1996 3-4 Consolidated Statements of Income for the three months ended March 31, 1997 and 1996 5 Consolidated Statements of Cash Flows for the three months ended March 31, 1997 and 1996 6 Notes to Consolidated Financial Statements 7-10 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 11-13 Part II. Other Information Item 1. Legal Proceedings 14 Item 6. Exhibits and Reports on Form 8-K 14 Signature Page 15 PART I. FINANCIAL INFORMATION Item 1. Financial Statements
CYRIX CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS ASSETS (Unaudited) (In thousands) March 31, December 31, 1997 1996 ------------------ ---------------- Current assets: Cash and cash equivalents $96,093 $65,712 Investments 30,591 22,035 Trade accounts receivable, net of valuation allowances of $9,417 at March 31, 1997 and $4,236 at December 31, 1996 41,224 27,791 Inventories: Raw materials 3,517 9,576 Work in process 15,138 14,204 Finished goods 8,031 652 ------------------ ---------------- Total inventories 26,686 24,432 Prepayment for product purchases (Note 5) 15,658 20,471 Income taxes receivable -- 21,033 Deferred taxes 9,474 4,783 Other assets 786 1,184 ------------------ ---------------- Total current assets 220,512 187,441 Property and equipment Land 4,964 4,964 Buildings and improvements 11,375 11,154 Machinery and equipment 137,236 132,359 ------------------ ---------------- 153,575 148,477 Accumulated depreciation (69,504) (62,892) ------------------ ---------------- 84,071 85,585 Prepayment for product purchases, less current portion (Note 5) 17,952 22,465 Other assets 3,642 3,851 ------------------ ---------------- Total assets $326,177 $299,342 ------------------ ----------------
CYRIX CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (CONTINUED) LIABILITIES AND STOCKHOLDERS' EQUITY (Unaudited) (In thousands) March 31, December 31, 1997 1996 ------------------ ------------------ Current liabilities: Accounts payable $20,350 $17,504 Accrued salaries and benefits 4,198 5,454 Deferred income and distributor reserves 8,286 2,610 Income taxes payable 11,190 377 Current maturities of long-term debt and capitalized lease obligations (Note 4) 3,054 3,075 Other accrued expenses 10,097 8,034 ------------------ ------------------ Total current liabilities 57,175 37,054 Long-term debt and capitalized lease obligations, less current maturities (Note 4) 135,423 136,156 Deferred income taxes 2,846 3,206 Commitments and contingencies (Notes 5 and 6) Stockholders' equity: Common stock, $.004 par value; authorized 60,000 shares, issued 20,228 at March 31, 1997 and December 31, 1996 81 81 Additional capital 50,229 49,040 Retained earnings 80,463 73,850 Less treasury stock, at cost, 599 shares at March 31, 1997 and 717 shares at December 31, 1996 (40) (45) ------------------ ------------------ Total stockholders' equity 130,733 122,926 ------------------ ------------------ Total liabilities and stockholders' equity $326,177 $299,342 ------------------ ------------------
See accompanying notes.
CYRIX CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (In thousands, except per share data) Fiscal Quarter Ended March 31, 1997 1996 --------------------------------------- Net product sales $74,857 $49,199 Royalty revenue (Note 3) 759 2,407 --------------------------------------- Net revenues 75,616 51,606 Cost of sales 42,168 26,279 --------------------------------------- 33,448 25,327 --------------------------------------- Expenses: Marketing, general and administrative 11,700 13,012 Research and development 10,114 7,701 --------------------------------------- 21,814 20,713 --------------------------------------- Income from operations 11,634 4,614 Other income and expense: Interest income 1,008 434 Interest expense (2,623) (2,084) --------------------------------------- (1,615) (1,650) --------------------------------------- Income before provision for income taxes 10,019 2,964 Provision for income taxes 3,406 1,008 --------------------------------------- Net income $ 6,613 $ 1,956 --------------------------------------- Net income per common and common equivalent share - primary $ 0.33 $ 0.10 --------------------------------------- Weighted average common and common equivalent shares outstanding 20,340 20,029 ---------------------------------------
See accompanying notes.
CYRIX CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands) Three Months Ended March 31, 1997 1996 --------------------------------------- Operating Activities Net income $ 6,613 $ 1,956 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 6,939 6,923 Provision for doubtful accounts and OEM customer returns 4,160 4,443 Deferred taxes (5,051) 4,782 Changes in operating assets and liabilities: Receivables (17,593) (7,011) Inventories (2,254) (9,764) Income taxes receivable 23,781 -- Other current assets 398 107 Accounts payable 2,846 5,499 Income taxes payable 8,065 (166) Accrued expenses 807 1,698 Deferred income and distributor reserves 5,676 (7,948) Other assets 209 30 --------------------------------------- Net cash provided by operating activities 34,596 549 Investing Activities Prepayments for product purchases -- (10,000) Reduction in prepayments for product purchases 9,326 4,957 Purchases of property and equipment, net (5,425) (3,891) Purchases of investments (17,646) -- Proceeds from redemption of investments 9,090 -- --------------------------------------- Net cash used in investing activities (4,655) (8,934) Financing activities Repayments of long-term debt and capitalized lease obligations (754) (5,422) Tax benefit from stock option exercises 319 8 Net proceeds from issuance of common stock 875 769 --------------------------------------- Net cash provided by financing activities 440 (4,645) --------------------------------------- Increase (decrease) in cash and cash equivalents 30,381 (13,030) Cash and cash equivalents at beginning of period 65,712 44,334 --------------------------------------- Cash and cash equivalents at end of period $ 96,093 $31,304 ---------------------------------------
See accompanying notes. CYRIX CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) March 31, 1997 1. Basis of Presentation The unaudited consolidated financial statements of Cyrix Corporation and subsidiaries ("the Company" or "Cyrix") have been prepared in accordance with generally accepted accounting principles for interim financial information. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, considered necessary for a fair presentation have been included. Results of operations for the periods presented are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 1997. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the fiscal year ended December 31, 1996, and notes thereto included in the Company's Form 10-K filed with the Securities and Exchange Commission ("SEC") on March 10, 1997. The Company uses a 52/53 week fiscal year that ends on or about December 31 and 13/14 week fiscal quarters that end on or about March 31, June 30 and September 30. The accompanying financial statements have been labeled as though the Company's accounting periods ended on the respective calendar year ended December 31 and the fiscal quarter ended March 31. Fiscal year 1996 ended December 29, 1996, the first fiscal quarter of 1997 ended March 30, 1997, and the first fiscal quarter of 1996 ended March 31, 1996. The first fiscal quarters of 1997 and 1996 were each 13-week fiscal quarters. In February 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings Per Share" which becomes effective for the Company's 1997 consolidated financial statements beginning in the fourth quarter of 1997. SFAS No. 128 will eliminate the disclosure of primary earnings per share which includes the dilutive effect of stock options, warrants and other convertible securities ("Common Stock Equivalents") and instead requires reporting of "basic" earnings per share, which will exclude Common Stock Equivalents. Additionally, SFAS No. 128 changes the methodology for fully diluted earnings per share. In the opinion of the Company's management, it is not anticipated that the adoption of this new accounting standard will have a material effect on the reported earnings per share of the Company. 2. Earnings per Common and Common Equivalent Share Earnings per common and common equivalent share are computed by dividing net income by the weighted average number of shares of common stock and dilutive common stock equivalents outstanding during each period. During each period presented, common stock options were the only common stock equivalents outstanding. The dilutive effects of common stock equivalents are calculated using the treasury stock method. Common stock equivalents are not included in the computation of earnings per share for any period in which their inclusion would have the effect of increasing the earnings per share amount or decreasing the loss per share amount otherwise computed. Fully diluted earnings per share is substantially the same as primary earnings per share for all periods presented. 3. Royalty Revenue During the first fiscal quarters ended March 31, 1997 and 1996, the Company received royalty revenue in the amount of $759 thousand and $2.4 million, respectively, from Texas Instruments Incorporated ("TI") and SGS Thomson Microelectronics, Inc. ("SGS") based on sales of licensed products. 4. Long-term Obligations In May 1996, the Company issued $126.5 million of 5.5% convertible subordinated notes ("notes") due June 1, 2001. The notes are convertible into shares of the Company's common stock at the conversion rate of 25.1572 shares per $1,000 principal amount of notes (equivalent to a conversion price of $39.75 per share). The notes are subordinated to present and future senior indebtedness of the Company, and the notes are redeemable at the option of the Company, in whole or in part, on or after June 1, 1999. Interest payments of approximately $3.5 million are due each June 1 and December 1 until maturity. The Company has financed certain land, buildings and equipment under financing agreements which contain restrictive covenants including restriction on dividends, additional debt and certain other transactions and which include the maintenance of certain net worth, net income per quarter, working capital and other financial ratios. 5. Commitments The Company currently has two manufacturing agreements with IBM. The Company entered into the first of such agreements (the "original" agreement) on April 8, 1994. The original agreement provides for IBM's Microelectronics division to manufacture specified quantities of wafers of Cyrix-designed products for sale to Cyrix through December 1999 at defined prices. Cyrix is responsible for the total production costs (including equipment costs) of such specified quantities of products irrespective of the number of products actually ordered by the Company. Cyrix made a capital equipment investment of approximately $88 million in an IBM manufacturing facility pursuant to the original agreement. The depreciation expense associated with such capital equipment, which Cyrix owns, is reimbursed to the Company by IBM on a monthly basis. In the event of expiration or termination of the original agreement by either party, IBM has the option to purchase this capital equipment from Cyrix at its then net book value, if any. Also, Cyrix made prepayments for product purchases of approximately $30 million during fiscal 1994, $30 million during fiscal 1995, $10 million on January 1, 1996 and $10 million on April 1, 1997. One additional prepayment of $10 million is due on January 1, 1998. Such prepayments will be credited to Cyrix as it purchases wafers from IBM at defined prices during the period from July 1, 1995 through December 31, 1999. In addition to supplying microprocessors to Cyrix, IBM has the right to manufacture an equivalent amount of wafers of Cyrix-designed products for use internally or to sell on an OEM basis. The Company entered into a second agreement (the "foundry" agreement) with IBM on May 17, 1996. The foundry agreement specifies that IBM's Microelectronics division manufacture additional quantities of wafers of Cyrix-designed products for sale to Cyrix through December 1997 at defined prices. The foundry agreement originally provided that the Company purchase wafers totaling approximately $45 million during the second half of 1996. Although the foundry agreement specified significant penalties if the Company did not purchase the entire commitment under the foundry agreement, the Company negotiated a reduction in the commitment due to the lower than expected sales volume in 1996 without incurring significant penalties. The Company has submitted purchase orders to IBM for further purchases of wafers during the second fiscal quarter of 1997 and expects to continue to purchase wafers under the foundry agreement during the second half of 1997. 6. Contingencies Microprocessor Litigation Since March 1992, the Company and Intel Corporation ("Intel") have been engaged in litigation related to certain of the Company's microprocessor products. On January 21, 1994, the United States District Court for the Eastern District of Texas, Sherman Division ruled in favor of the Company with respect to microprocessor products which were made and sold to the Company by certain Intel licensees, SGS-Thomson Microelectronics, Inc. ("SGS") and TI. Intel appealed the ruling on April 8, 1994. On December 8, 1994, the Court of Appeals for the Federal Circuit affirmed the district court's January 21, 1994 ruling. On December 23, 1994, Intel filed a petition for reconsideration of that decision and a motion for rehearing en banc with the Court of Appeals. In February 1995, the Court of Appeals for the Federal Circuit denied Intel's motion for a rehearing en banc. On January 24, 1994, the United States District Court for the Eastern District of Texas, Sherman Division began to try the Company's allegations that Intel violated certain antitrust statutes and misused its patents and Intel's allegations that the Company infringed certain Intel patents. Effective January 31, 1994, the Company and Intel entered into a settlement agreement which provides for the dismissal of the claims which were to be litigated in the January 24, 1994 trial. Pursuant to the settlement agreement, Intel granted the Company a fully paid-up, irrevocable license under claims 2 and 6 of Intel's United States patent 4,972,338 ("the Crawford patent") and certain other system patents for products sold after January 31, 1994. Intel also acknowledged that products purchased by the Company from certain licensees exhaust Intel device claims including claim 1 of the Crawford patent. Further, Intel paid $5 million to the Company. The Company and Intel agreed that if the January 21, 1994 ruling, insofar as it relates to SGS, was reversed after final adjudication or was remanded for additional findings and subsequently reversed so that Cyrix did not have a right to use claims 2 and 6 of the Crawford patent based on the SGS license, Cyrix would return the $5 million plus interest to Intel. Cyrix deferred recognition as income of the $5 million settlement payment received in February 1994 until final resolution of this issue. Intel agreed to pay the Company an additional $5 million if the January 21, 1994 SGS ruling was upheld after final adjudication. As noted previously, in December 1994, the Court of Appeals for the Federal Circuit upheld the district court's January 21, 1994 ruling and later denied Intel's motion for a rehearing en banc. The time period during which Intel had the right to appeal the case to the United States Supreme Court expired without such appeal, and the Company received the additional $5 million settlement payment in the second quarter of 1995. Therefore, the Company recognized settlement income of $10 million in the second quarter of 1995. As part of the settlement agreement, the Company and Intel agreed to litigate in the United States District Court for the Eastern District of Texas, Sherman Division, whether products manufactured by SGS affiliates under the "have-made" provision in the SGS-Intel license, sold to SGS, and then sold to the Company fall within the scope of the SGS license. On December 30, 1994, the district court ruled that SGS was licensed by Intel to exercise have-made rights by having third parties (including SGS affiliates) manufacture and sell microprocessors to Cyrix free of claims of patent infringement by Intel. Intel appealed the ruling on March 7, 1995. On March 5, 1996, the Court of Appeals for the Federal Circuit affirmed the district court's December 1994 ruling. On March 18, 1996 Intel filed a petition for a rehearing of that decision with the Court of Appeals. In April 1996, the Court of Appeals denied Intel's petition for a rehearing. The time period during which Intel had the right to appeal the case to the United States Supreme Court expired without such appeal, and the Company received a $1 million settlement payment on July 30, 1996. Therefore, the Company recognized settlement income of $1 million in the third quarter of 1996. Similarly, the Company and Intel agreed to litigate in the United States District Court for the Eastern District of Texas, Sherman Division, whether IBM is licensed under claim 1 of the Crawford patent when manufacturing products that are primarily designed by the Company. On April 5, 1994, the district court granted IBM's motion to intervene, and on December 8, 1994, the district court ruled that IBM was licensed by Intel to act as a semiconductor foundry for Cyrix free of claims of patent infringement by Intel. Intel appealed the ruling on March 7, 1995. On March 5, 1996, the Court of Appeals for the Federal Circuit affirmed the district court's December 1994 ruling. The time period during which Intel had the right to appeal the case to the United States Supreme Court expired without such appeal, and the Company received a $1 million settlement payment on July 30, 1996. Therefore, the Company recognized settlement income of $1 million in the third quarter of 1996. Stockholders Class Action In December 1994, eleven class actions were filed in the United States District Court for the Northern District of Texas, purportedly on behalf of purchasers of the Company's common stock, alleging that the Company and various of its officers and directors violated sections of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, by issuing false and misleading statements concerning the introduction and production of the Company's Cx486DX2 40/80 MHz microprocessors. The complaints also allege that the conduct of the Company and certain of its officers and directors constituted fraud and negligent misrepresentation and that certain of such officers and directors sold shares of the Company's common stock while in possession of material undisclosed information. In June 1995, all of the actions were consolidated into one complaint in the federal district court in Dallas, Texas. The Company moved to dismiss the consolidated amended class action complaint in July 1995. On August 20, 1996, the United States District Court for the Northern District of Texas, Dallas Division, entered an order dismissing plaintiffs' complaint for failure to properly plead a cause of action. The court, however, dismissed plaintiffs' complaint "without prejudice," and permitted plaintiffs leave to amend their complaint by September 10, 1996 to cure its deficiencies. No such amendment was filed and on September 26, 1996, the U.S. District Court in Dallas entered a judgment dismissing the securities class action lawsuit against the Company and various of its officers. Gateway Trademark Litigation By letter dated May 17, 1996, Gateway 2000, Inc. ("Gateway") alleged that Cyrix "is infringing valuable trademark and trade dress rights of Gateway 2000" in advertisements promoting Cyrix's 6x86(TM) personal computer systems. Gateway asserts that Cyrix's "reproduction, copy and colorable imitation of Gateway's registered trademark and trade dress in connection with advertising Cyrix's goods is likely to cause confusion, mistake or deceive the public within the meaning of the Lanham Act." The letter threatens Cyrix with actions for trademark infringement, false advertising and trade disparagement, and unfair competition. Finally, the letter suggests that Gateway might assert its rights in other nations if the advertisements have been distributed on the international market. On May 24, 1996, Cyrix filed in the United States District Court for the Northern District of Texas, Dallas Division, Cyrix Corporation v. Gateway 2000, Inc., seeking a declaratory judgment: (i) that none of Cyrix's actions or omissions relating to its advertisements of the Cyrix 6x86 computers has violated any provisions of the Lanham Act; (ii) that none of Cyrix's actions or omissions relating to its advertisements of the Cyrix 6x86 computers has violated the common law of the State of Texas or any provisions of the Texas Trademark Act, Texas Business & Commerce Code Sections 16.01 et seq., including but not limited to those provisions relating to trademark infringement, trade dress infringement and dilution; (iii) that Cyrix has not engaged in any false or unlawful advertising; (iv) that Cyrix has not engaged in any unfair competition or trade disparagement; (v) that Cyrix's conduct relating to its advertisements of the Cyrix 6x86 computers is speech protected by the U.S. Constitution and the Texas Constitution of 1876; (vi) that none of Cyrix's actions or omissions relating to its advertisements of the Cyrix 6x86 computers has violated any state or federal laws; (vii) that Cyrix's acts are privileged and/or excused by: (a) the defense of fair use; (b) the defense of opinion and parody; and (c) the defense of truth; and (viii) that Cyrix is free to use images of Holstein cows to signify Gateway (even in an unflattering fashion) in advertising of personal computers that is not factually false, deceptive or misleading. Subsequently, in late June and early July Gateway filed actions in state court in New York, New Jersey, Connecticut, Massachusetts and California. The state court cases are essentially the same and allege that Cyrix violated anti-dilution laws, deceptive trade practices laws, trademark infringement laws, and unfair competition laws. Cyrix believes that Gateway also made claims under the Federal Trademark Act and certain state law claims preempted by the Federal Copyright law. Gateway requested, among other relief, preliminary and permanent injunctions, as well as actual and punitive damages. In each of the five cases, Gateway sought actual damages (typically asserting such amount is at least one million dollars) and punitive damages. On December 20, 1996, the Company and Gateway agreed to a settlement of all of the claims in the state and federal court actions and the dismissal with prejudice of those actions. The settlement, the terms of which are confidential by agreement between the parties, had no material impact upon the Company's results of operations in the current or future years. MMX Litigation On March 14, 1997, Intel filed in the US District Court for the District of Delaware a complaint alleging that both Cyrix and Advanced Microdevices Inc. ("AMD") were infringing Intel's trademark rights by promoting products which Cyrix and AMD claimed were MMX(TM) compatible products. Although Cyrix had distributed preliminary marketing materials that indicated its M2 processor is expected to be MMX compatible, Cyrix had not yet sold any such parts. The complaint sought temporary and permanent relief from additional marketing of products that used the term MMX without recognizing it as an Intel trademark. However, on March 31, 1997, Cyrix and Intel reached agreement that enables Cyrix to market its products that implement MMX technology while providing appropriate attribution to Intel for the MMX trademark and to describe Cyrix's M2 processor as compatible with MMX technology in all future advertising. Creative Labs Litigation On March 17, 1997, Creative Labs, Inc. ("Creative") filed an action against Cyrix Corporation, Compaq Corporation, and Tiger Direct, Inc. ("Tiger") in the US District Court for the Northern District of California, Oakland Division, alleging that each had sold and/or marketed products incorporating the Company's MediaGX processor and that such processor, when operated with Microsoft's Windows 95 software, caused the computers in which the products were installed to indicate that a Sound Blaster card was installed in the system when in fact no such card was installed. Additionally, Creative claimed that certain of Creative's proprietary applet software were inappropriately available on Cyrix's internet web page. Creative sought a temporary restraining order to prevent Cyrix and the other companies named in the suit from shipping products which caused systems to identify its sound device as a Sound Blaster sound card and to prevent further use of Creative's applet software in the Company's internet web page. The temporary restraining order was granted on March 28, 1997. While admitting no wrong-doing, the Company has taken actions that it believes satisfy the requirements of the temporary restraining order including removal of all of Creative's applet and driver software from its internet web page. The Company has also agreed to indemnify Tiger with regard to this action and Tiger has tendered its defense to the Company. A hearing has been scheduled for May 2, 1997 to determine whether a preliminary injunction against future shipments of MediaGX processors should be granted. The ultimate outcome of this litigation cannot presently be determined; however, the Company intends to defend the actions vigorously. Any decision adverse to the Company in this matter could have a material adverse effect on the Company, its financial condition, or its results of operations. Other Matters The Company is a defendant in various other actions which arose in the normal course of business. In the opinion of management, the ultimate disposition of these other matters will not have a material adverse effect on the financial condition or overall trends in the results of operations of the Company.
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations The following table sets forth items from Cyrix's Consolidated Statements of Income as percentages of net revenues: Fiscal Quarter Ended March 31, 1997 1996 ------------------------------ Net product sales 99.0 % 95.3 % Royalty revenue 1.0 4.7 ------------ ------------- Net revenues 100.0 100.0 Cost of sales 55.8 50.9 Marketing, general and administrative 15.5 25.2 Research and development 13.4 14.9 ------------ ------------- Income from operations 15.3 9.0 Net interest expense 2.1 3.2 ------------ ------------- Income before provision for income taxes 13.2 5.8 Provision for income taxes 4.5 2.0 ============ ============= Net income 8.7 % 3.8 % ============ =============
Results of Operations Net Revenues. Net product sales of $74.9 million for the first quarter of fiscal 1997 increased 52% compared with net product sales of $49.2 million for the first quarter of fiscal 1996. Processor unit shipments for the first fiscal quarter of 1997 declined by 3% compared with unit shipments of the same period of fiscal 1996. During the first fiscal quarter of 1997, the Company's MediaGX and 6x86 processors accounted for 99% of net product sales; sales of 6x86(TM) and 5x86(TM) microprocessors represented over 90% of the Company's net product sales the first fiscal quarter of 1996. Net revenues for the first fiscal quarters of 1997 and 1996 included $759 thousand and $2.4 million of royalty payments, respectively, received from TI and SGS based upon sales of products licensed to them by the Company. Sales of processors to international customers constituted 55% and 50% of processor product sales in the first quarters of fiscal 1997 and 1996, respectively. Sales of processors to international customers are made primarily to customers in Europe, Taiwan, Hong Kong, Korea and Japan. The outlook for the Company's revenue growth is dependent upon the Company's MediaGX and M2 products. The MediaGX product was introduced in the first quarter of fiscal 1997 and the M2 product is expected to be introduced in the second quarter of fiscal 1997. If these products do not offer performance, features and pricing attractive to the personal computer industry, the Company may build excess inventory or experience net losses similar to those incurred in fiscal 1996. During the fourth quarter of 1996 and to a greater extent during the first quarter of 1997, Intel spent considerable resources advertising its processors that incorporate MMX technology. Additionally, AMD has introduced its K6 processor that it claims is compatible with MMX. Until Cyrix is able to manufacture its M2 product in commercial quantities it will not have a product offering that is compatible with MMX technology. Therefore, it is likely that the average sales prices of Cyrix's 6x86 processors will decline significantly during the remainder of fiscal 1997. Additionally, the Company's ability to compete with AMD and Intel in the second half of fiscal 1997 will be dependent upon manufacturing its M2 product in sufficient quantities and with acceptable yields and processor speeds to offer products similar to those of its competitors. During the first fiscal quarter of 1997, Cyrix introduced its MediaGX processor, which incorporates many of the functions performed by peripheral components of traditional PCs into the processor and allows computer manufacturers to sell complete personal computers at retail prices under one thousand dollars. Although the product has been introduced and Cyrix has been able to produce and sell commercial quantities of such processors, the Company's success in the second half of 1997 is, in part, dependent upon continued success of this product. Since the MediaGX processor requires a motherboard that differs from the industry standard motherboard, the product's success is also dependent upon personal computer manufacturers who have the ability and desire to market a personal computer that uses such non-standard components. Although the Company has been able to sell significant quantities of its MediaGX product, continued revenue and margin growth will be dependent upon obtaining additional customers for the product and minimizing the declines in average sales prices over the remaining quarters of fiscal 1997. Gross Margins. The Company's gross margin increased to $33.4 million for the first fiscal quarter of 1997 from $25.3 million for the same period of 1996. The Company's margins increased when compared to the first fiscal quarter of 1996 due to improvements in manufacturing processes which reduced the processor's die size, better die yields and higher unit volumes of 6x86 products. Quarterly growth, if any, in the Company's gross margin in the remainder of fiscal 1997 is dependent upon the market acceptance of its MediaGX and M2 processors. Risks associated with enhancing the designs of, ramping production of, and obtaining sales orders for such microprocessors are discussed in Net Revenues (above), Reliance on Third-Party Manufacturers (below) and Product Transitions (below). Marketing, General and Administrative Expenses. Marketing, general and administrative expenses for the first quarters of fiscal 1997 and 1996 were $11.7 million and $13.0 million, respectively. Marketing, general and administrative expenses for the first fiscal quarter of 1997 decreased compared with the same period of fiscal 1996 primarily due to a decline in sales and marketing expenses associated with the personal computer systems business. Research and Development Expenses. The Company's research and development expenses for the first fiscal quarters of 1997 and 1996 were $10.1 million and $7.7 million, respectively. The increase of research and development expenses in the first fiscal quarter of 1997 compared with the same period of 1996 was attributable to the expansion of the Company's engineering staff, design equipment and prototype expenses to support the development of microprocessor products. The Company intends to continue to increase its research and development expenses in an effort to enhance existing products and develop technologically advanced products. Net Interest Expense. Interest expense for the fiscal quarter ended March 31, 1997 increased to $2.6 million compared to $2.1 million for the same period of fiscal 1996 primarily due to higher loan balances partially offset by lower interest rates. Such increase was offset by increased interest income due to higher cash and investment balances in the first fiscal quarter of 1997 compared to the first fiscal quarter of 1996. Provision (Benefit) for Income Taxes. The Company's effective tax rate was 34% in the first fiscal quarters of 1997 and 1996. Other Factors Affecting Results of Operations. Reliance on Third-Party Manufacturers. All of the Company's processors produced in 1996 and the first fiscal quarter of 1997 were manufactured and sold to the Company by IBM. The Company's 6x86 microprocessors are more complex than its earlier generation microprocessors and such microprocessors require more advanced manufacturing processes than those required for the Company's previous products. Further, there can be no assurance that Cyrix will be able to successfully ramp and sustain production of its MediaGX and M2 products at IBM without experiencing yield problems or performance issues in the remainder of fiscal 1997 and beyond. The Company's reliance on third party manufacturers creates risks that the Company will not be able to obtain capacity to meet its manufacturing requirements, will not be able to obtain products with acceptable performance and cost, will not have access to necessary process technologies and the possible breakdown in the relationship with the third-party manufacturers. Further, the Company has licensed some of its intellectual property to SGS and IBM to obtain access to specified levels of manufacturing capacity, and the Company could be required to license more of its intellectual property and product rights and proprietary technology to obtain additional manufacturing capacity. Thus, the Company currently faces competition from IBM and may also face competition from SGS in the future. The Company's reliance on third party manufacturers could have a material adverse affect on the Company's revenues and operating results. Product Transitions. Once current microprocessor products have been in the market place for a period of time and begin to be replaced by higher performance microprocessors (whether of the Company's or a competitor's design), the Company expects the price of such earlier generation microprocessors to decline and net sales and gross margins of such microprocessors to decrease. In order to continue to maintain its then current gross margin and levels of revenue growth, if any, the Company will therefore be required to design, develop and successfully commercialize next generation microprocessors in a timely manner. Although the Company is committed to its product development efforts, there can be no assurance that the Company will be able to introduce new products quickly enough to avoid adverse revenue transition patterns during future product transitions. During the first fiscal quarter of 1997, Cyrix introduced its MediaGX processor and Cyrix plans to introduce its M2 processor in the second fiscal quarter of 1997. Cyrix expects that these introductions will cause prices and margins for its 6x86 processors to decline. Consequently, if the MediaGX and M2 products do not offer performance, features and pricing attractive to the personal computer industry, the Company may build excess inventory or experience net losses similar to those incurred in fiscal 1996. Additionally, Intel and several of the Company's other competitors have substantially greater financial, technical, manufacturing and marketing resources than the Company and they may introduce new microprocessor designs with features or performance that exceed those contained in the Company's new products. If the Company experiences a delay in transitioning to its MediaGX and M2 processors, the period of time and the impact on profit margins during this product transition will be dependent upon several factors including, but not limited to, the following: Cyrix may experience performance difficulties with the new product designs; Cyrix may not be able to successfully ramp production of new products at IBM or other qualified foundries without yield problems or other performance issues; and personal computer manufacturers may not design the Company's new products into their notebook and desktop computers in a timely manner or purchase the Company's products in the volumes and at the prices necessary to offset the declining market, average selling prices and profit margins of the Company's 6x86 processors. Purchase commitments. The Company currently has two manufacturing agreements with IBM. The Company entered into the first of such agreements (the "original" agreement) on April 8, 1994. The original agreement provides for IBM's Microelectronics division to manufacture specified quantities of wafers of Cyrix-designed products for sale to Cyrix through December 1999 at defined prices. Cyrix is responsible for the total production costs (including equipment costs) of such specified quantities of products irrespective of the number of products|ztually ordered by the Company. Cyrix made a capital equipment investment of approximately $88 million in an IBM manufacturing facility pursuant to the original agreement. The depreciation expense associated wit such capital equipment, which Cyrix owns, is reimbursed to the Company by IBM on a monthly basis. In the event of expiration or termination of the original agreement by either party, IBM has the option to purchase this capital equipment from Cyrix at its then net book value, if any. Also, Cyrix made prepayments for product purchases of approximately $30 million during fiscal 1994, $30 million during fiscal 1995, $10 million on January 1, 1996 and $10 million on April 1, 1997. One additional prepayment of $10 million is due on January 1, 1998. Such prepayments will be credited to Cyrix as it purchases wafers from IBM at defined prices during the period from July 1, 1995 through December 31, 1999. In addition to supplying microprocessors to Cyrix, IBM has the right to manufacture an equivalent amount of wafers of Cyrix-designed products for use internally or to sell on an OEM basis. The Company entered into a second agreement (the "foundry" agreement) with IBM on May 17, 1996. The foundry agreement specifies that IBM Microelectronics division manufacture additional quantities of wafers of Cyrix-designed products for sale to Cyrix through December 1997 at defined prices. The foundry agreement originally provided that the Company purchase wafers totaling approximately $45 million during the second half of 1996. Although the foundry agreement specified significant penalties if the Company did not purchase the entire commitment, the Company negotiated a reduction inorpe commitment due to the lower than expected sales volume in 1996 without incurring significant penalties. The Company has submitted purchase orders to IBM for further purchases of wafers during the second fiscal quarter of 1997 and expects tolopntinue to purchase wafers under the foundry agreement during the second half of 1997. General. The markets for the Company's products are characterized by a highly competitive and rapidly changing environment in which operating results are subject to the effects of frequent product introductions, manufacturing technology innovations and rapid fluctuations in product demand. While the Company attempts to identify and respond to these changes as soon as possible, prediction of and reaction to such events is difficult. Liquidity and Capital Resources Cash and cash equivalents totaled $96.1 million at March 31, 1997 compared with $65.7 million at December 31, 1996. The Company's primary source of cash in the three months ended March 31, 1997 was an income tax refund received totaling $23.8 million and cash generated by an increase in taxes payable. Excluding the income tax refund, the Company generated cash from operating activities of $10.8 million. The primary uses of cash in the three months ended March 31, 1997 consisted of purchases of investments, purchases of property, plant, and equipment and cash consumed by increases in receivables, inventories and deferred taxes. The Company's primary uses of cash in the first quarter of 1996 consisted of capital equipment purchases, product prepayments pursuant to the Company's agreement with IBM and principal payments on long-term debt and capitalized lease obligations. Cyrix's long-term debt and capitalized lease obligations totaled $138.5 million and $139.2 million at March 31, 1997 and March 31, 1996, respectively. Approximately $3.1 million of such debt is scheduled for payment during the next twelve months. Additionally, the Company is obligated to make an interest payment on the convertible subordinated bonds on June 1, 1997 totaling approximately $3.5 million dollars. Since the end of the first fiscal quarter of 1997, the Company made a $10 million prepayment to IBM pursuant to the original agreemsnt which will be credited against future product purchases (See "Purchase Commitments above). Cyrix expects that its current cash, cash equivalents and investments will be sufficient to fund operations for the remainder of fiscal 1997; however, if future cash requirements exceed available cash resources, the Company may pursue additional financing. Due to the factors noted above andoswsewhere in Management's Discussion and Analysis of Financial Condition and Results of Operations, the Company's future earnings, if any, and stock price may be subject to significant volatility, particularly on a quarterly basis. Past financial performance should not be considered a reliable indicator of future performance and investors should not use historical trends to anticipate results or trends in future periods. Any shortfall in revenue or earnings from the levels anticipated by securities analysts could have an immediate and significant effect on the trading price of the Company's common stock in any given period. Also, the Company participates in a highly dynamic industry which often results in volatility of the Company's common stock price. "Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995 This report contains forward looking statements. The forward looking statements with respect to the introduction, availability, cost, features, performance, customer acceptance and revenue contribution of future products, including the MediaGX and the M2, are subject to engineering, manufacturing and market acceptance risks. Engineering difficulties such as the failure to properly and timely design or debug such products could delay the introduction of such products or adversely impact their performance or customer acceptance. Manufacturing difficulties such as the failure to obtain required capacity, technical problems with the manufacture of these complex products or the inability to provide products at competitive cost to the Company could also delay the introduction of these products or adversely affect their availability, cost, features, performance or customer acceptance. Finally, the inability to achieve sufficient customer design wins for the products could adversely affect the Company's ability to market them in quantities sufficient to achieve its revenue goals. PART II. OTHER INFORMATION Item 1. Legal Proceedings Current Litigation See Note 6 to the Consolidated Financial Statements included in Part I, Item 1 for a description of material pending litigation and certain related settlements. The final outcome of one or more of the issues subject to litigation as described in Note 6 to the Consolidated Financial Statements could have a material adverse effect on the Company's results of operations during the remainder of fiscal 1997 or a subsequent period. Potential Future Litigation The Company believes that Intel has a strategy of protecting its market share by filing intellectual property lawsuits against its competitors, and that Intel may assert additional patent infringement claims against the Company. Potential additional Intel litigation would likely involve different patents with new combination or system claims. In addition, new patent applications are continuawtr being filed by Intel and by others. Since pending United States patent applications are confidential until patents are issued, it is impossible to ascertain all potential patent infringement claims. If the Company is alleged to infringe one or more patents, it may seek a license to the patent. However, there can be no assurance that a license will be available on reasonable terms. In such event, the Company may be forced to litigate the matter. The damages and legal and other expenses of any resulting litigation could have a material adverse effect on future operations. Item 6. Exhibits and Reports on Form 8-K a. Exhibit 3(ii). Amended and Restated Bylaws of the Company as adopted by the Board of Directors as of April 17, 1997 b. Exhibit 10. Severance agreement between Gerald D. Rogers and the Company c. Exhibit 11. Earnings per Common and Common Equivalent Share. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to bvvuigned on its behalf by the undersigned, thereunto duly authorized. Cyrix Corporation Date: May 1, 1997 By: James W. Swent III ------------------------- James W. Swent III Senior Vice President of Finance and Administration (Principal Financial Officer)
INDEX TO EXHIBITS Sequentially Exhibit Numbered Number Description Page - --------------------------------------------------------------------------------------------------------------------------- 3(ii) Amended and Restated Bylaws of the Company as adopted by the Board of Directors as of April 17, 1997 10 Severance agreement between Gerald D. Rogers and the Company 11 Earnings per Common and Common Equivalent Share
EX-3.(II) 2 RESTATED BY-LAWS Exhibit 3(ii)
RESTATED BYLAWS OF CYRIX CORPORATION a Delaware corporation (As amended through April 17, 1997) TABLE OF CONTENTS ARTICLE I - CORPORATE OFFICES ............................................................................1 1.1 REGISTERED OFFICE.......................................................................1 1.2 OTHER OFFICES...........................................................................1 ARTICLE II - MEETINGS OF STOCKHOLDERS.....................................................................1 2.1 PLACE OF MEETINGS.......................................................................1 2.2 ANNUAL MEETING..........................................................................1 2.3 SPECIAL MEETING.........................................................................1 2.4 NOTICE OF STOCKHOLDERS' MEETINGS........................................................2 2.5 MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE............................................2 2.6 QUORUM..................................................................................2 2.7 ADJOURNED MEETING; NOTICE...............................................................3 2.8 VOTING..................................................................................3 2.9 WAIVER OF NOTICE........................................................................3 2.10 STOCKHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING.......................................................................3 2.11 RECORD DATE FOR STOCKHOLDER NOTICE; VOTING; GIVING CONSENTS.........................................................................4 2.12 PROXIES.................................................................................4 2.13 LIST OF STOCKHOLDERS ENTITLED TO VOTE...................................................5 ARTICLE III - DIRECTORS ..................................................................................5 3.1 POWERS..................................................................................5 3.2 NUMBER OF DIRECTORS.....................................................................5 3.3 ELECTION, QUALIFICATION AND TERM OF OFFICE OF DIRECTORS.................................5 3.4 RESIGNATION AND VACANCIES...............................................................6 3.5 PLACE OF MEETINGS; MEETINGS BY TELEPHONE................................................7 3.6 FIRST MEETINGS .........................................................................7 3.7 REGULAR MEETINGS........................................................................7 3.8 SPECIAL MEETINGS; NOTICE................................................................7 3.9 QUORUM .................................................................................8 3.10 WAIVER OF NOTICE........................................................................8 3.11 ADJOURNED MEETING; NOTICE...............................................................8 3.12 BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING.......................................8 3.13 FEES AND COMPENSATION OF DIRECTORS......................................................8 3.14 APPROVAL OF LOANS TO OFFICERS...........................................................9 3.15 REMOVAL OF DIRECTORS....................................................................9 -i-|par TABLE OF CONTENTS (continued) Page ARTICLE IV - COMMITTEES....................................................................................9 4.1 COMMITTEES OF DIRECTORS..................................................................9 4.2 COMMITTEE MINUTES.......................................................................10 4.3 MEETINGS AND ACTION OF COMMITTEES.......................................................10 ARTICLE V - OFFICERS......................................................................................10 5.1 OFFICERS................................................................................10 5.2 ELECTION OF OFFICERS....................................................................11 5.3 SUBORDINATE OFFICERS....................................................................11 5.4 REMOVAL AND RESIGNATION OF OFFICERS.....................................................11 5.5 VACANCIES IN OFFICES....................................................................11 5.6 CHAIRMAN OF THE BOARD...................................................................11 5.7 PRESIDENT...............................................................................12 5.8 VICE PRESIDENT..........................................................................12 5.9 SECRETARY...............................................................................12 5.10 TREASURER...............................................................................13 5.11 ASSISTANT SECRETARY.....................................................................13 5.12 ASSISTANT TREASURER.....................................................................13 5.13 AUTHORITY AND DUTIES OF OFFICERS........................................................13 ARTICLE VI - INDEMNITY....................................................................................14 6.1 THIRD PARTY ACTIONS.....................................................................14 6.2 ACTIONS BY OR IN THE RIGHT OF THE CORPORATION...........................................14 6.3 SUCCESSFUL DEFENSE......................................................................15 6.4 DETERMINATION OF CONDUCT................................................................15 6.5 PAYMENT OF EXPENSES IN ADVANCE..........................................................15 6.6 INDEMNITY NOT EXCLUSIVE.................................................................15 6.7 INSURANCE INDEMNIFICATION...............................................................16 6.8 THE CORPORATION.........................................................................16 6.9 EMPLOYEE BENEFIT PLANS..................................................................16 6.10 CONTINUATION OF INDEMNIFICATION AND ADVANCEMENT OF EXPENSES.............................16 ARTICLE VII - RECORDS AND REPORTS.........................................................................17 7.1 MAINTENANCE AND INSPECTION OF RECORDS...................................................17 7.2 INSPECTION BY DIRECTORS 7.3 ANNUAL STATEMENT TO STOCKHOLDERS .......................................................18 7.4 REPRESENTATION OF SHARES OF OTHER CORPORATIONS .........................................18 -ii- TABLE OF CONTENTS (continued) Page ARTICLE VIII - GENERAL MATTERS............................................................................18 8.1 CHECKS..................................................................................18 8.2 EXECUTION OF CORPORATE CONTRACTS AND INSTRUMENTS.............................................................................18 8.3 STOCK CERTIFICATES; PARTLY PAID SHARES..................................................18 8.4 SPECIAL DESIGNATION ON CERTIFICATES.....................................................19 8.5 LOST CERTIFICATES.......................................................................19 8.6 CONSTRUCTION; DEFINITIONS...............................................................20 8.7 DIVIDENDS...............................................................................20 8.8 FISCAL YEAR.............................................................................20 8.9 SEAL....................................................................................20 8.10 TRANSFER OF STOCK.......................................................................20 8.11 STOCK TRANSFER AGREEMENTS...............................................................21 8.12 REGISTERED STOCKHOLDERS.................................................................21 ARTICLE IX - AMENDMENTS...................................................................................21 ARTICLE X - DISSOLUTION.................................................................................21 ARTICLE XI - CUSTODIAN....................................................................................22 11.1 APPOINTMENT OF A CUSTODIAN IN CERTAIN CASES......................................................22 11.2 DUTIES OF CUSTODIAN..............................................................................22 -iii- - --------------------------------------------------------------------------------------------------------------------------- 1 - ---------------------------------------------------------------------------------------------------------------------------
BYLAWS OF CYRIX CORPORATION I CORPORATE OFFICES 1.1 REGISTERED OFFICE The registered office of the corporation shall be in the City of Wilmington, County of New Castle, State of Delaware. The name of the registered agent of the corporation at such location is The Corporation Trust Company. 1.2 OTHER OFFICES The board of directors may at any time establish other offices at any place or places where the corporation is qualified to do business. ARTICLE II MEETINGS OF STOCKHOLDERS 2.1 PLACE OF MEETINGS Meetings of stockholders shall be held at any place, within or outside the State of Delaware, designated by the board of directors. In the absence of any such designation, stockholders' meetings shall be held at the registered office of the corporation. 2.2 ANNUAL MEETING The annual meeting of stockholders shall be held each year on a date and at a time designated by the board of directors. At the meeting, directors shall be elected and any other proper business may be transacted. plain 2.3 SPECIAL MEETING A special meeting of the shareholders may be called at any time by the board of directors, or by the chairman of the board, or by the president, or by one or more shareholders holding shares in the aggregate entitled to cast not less than ten percent (10%) of the votes at that meeting. If a special meeting is called by any person or persons other than the board of directors or the president or the chairman of the board, then the request shall be in writing, specifying the time of such meeting and the general nature of the business proposed to be transacted, and shall be delivered personally or sent by registered mail or by telegraphic or other facsimile transmission to the chairman of the board, the president, any vice president or the secretary of the corporation. The officer receiving the request shall cause notice to be promptly given to the shareholders entitled to vote, in accordance with the provisions of Sections 2.4 and 2.5 of these bylaws, that a meeting wbTL be held at the time requested by the person or persons calling the meeting, so long as that time is not less than thirty-five (35) nor more than sixty (60) days after the receipt of the request. If the notice is not given within twenty (20) days after receipt of the request, then the person or persons requesting the meeting may give the notice. Nothing contained in this paragraph of this Section 2.3 shall be construed as limiting, fixing or affecting the time when a meeting of shareholders called by action of the board of directors may be held. 2.4 NOTICE OF STOCKHOLDERS' MEETINGS All notices of meetings with stockholders shall be in writing and shall be sent or otherwise given in accordance with Section 2.5 of these bylaws not less than ten (10) nor more than sixty (60) days before the date of the meeting to each stockholder entitled to vote at such meeting. The notice shall specify the place, date, and hour of the meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called. 2.5 MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE Written notice of any meeting of stockholders, if mailed, is given when deposited in the United States mail, postage prepaid, directed to the stockholder at his address as it appears on the records of the corporation. An affidavit of the secretary or an assistant secretary or of the transfer agent of the corporation that the notice has been given shall, in the absence of fraud, be prima facie evidence of the facts stated therein. 2.6 QUORUM The holders of a majority of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise provided by statute or by the certificate of incorporation. If, however, such quorum is not present or represented at any meeting of the stockholders, then the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum is present or represented. At such adjourned meeting at which a quorum is present or represented, any business may be transacted that might have been transacted at the meeting as originally noticed. 2.7 ADJOURNED MEETING; NOTICE When a meeting is adjourned to another time or place, unless these bylaws otherwise require, notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting the corporation may transact any business that might have been transacted at the original meeting. If the adjournment is for more than thirty (30) days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. 2.8 VOTING The stockholders entitled to vote at any meeting of stockholders shall be determined in accordance with the provisions of Section 2.11 of these bylaws, subject to the provisions of Sections 217 and 218 of the General Corporation Law of Delaware (relating to voting rights of fiduciaries, pledgors and joint owners of stock and to voting trusts and other voting agreements). Except as may be otherwise provided in the certificate of incorporation, each stockholder shall be entitled to one vote for each share of capital stock held by such stockholder. 2.9 WAIVER OF NOTICE Whenever notice is required to be given under any provision of the General Corporation Law of Delaware or of the certificate of incorporation or these bylaws, a written waiver thereof, signed by the person entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders need be specified in any written waiver of notice unless so required by the certificate of incorporation or these bylaws. 2.10 STOCKHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING Unless otherwise provided in the certificate of incorporation, any action required by this chapter to be taken at any annual or special meeting of stockholders of a corporation, or any action that may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice, and without a vote if a consent in writing, setting forth the action so taken, is signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing. If the action which is consented to is such as would have required the filing of a certificate under any section of the General Corporation Law of Delaware if such action had been voted on by stockholders at a meeting thereof, then the certificate filed under such section shall state, in lieu of any statement required by such section concerning any vote of stockholders, that written notice and written consent have been given as provided in Section 228 of the General Corporation Law of Delaware. 2.11 RECORD DATE FOR STOCKHOLDER NOTICE; VOTING; GIVING CONSENTS In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or entitled to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the board of directors may fix, in advance, a record date, which shall not be more than sixty (60) nor less than ten (10) days before the date of such meeting, nor more than sixty (60) days prior to any other action. If the board of directors does not so fix a record date: (i) The record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. (ii) The record date for determining stockholders entitled to express consent to corporate action in writing without a meeting, when no prior action by the board of directors is necessary, shall be the day on which the first written consent is expressed. (iii) The record date for determining stockholders for any other purpose shall be at the close of business on the day on which the board of directors adopts the resolution relating thereto. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the board of directors may fix a new record date for the adjourned meeting. 2.12 PROXIES Each stockholder entitled to vote at a meeting of stockholders or to express consent or dissent to corporate action in writing without a meeting may authorize another person or persons to act for him by a written proxy, signed by the stockholder and filed with the secretary of the corporation, but no such proxy shall be voted or acted upon after three (3) years from its date, unless the proxy provides for a longer period. A proxy shall be deemed signed if the stockholder's name is placed on the proxy (whether by manual signature, typewriting, telegraphic transmission or otherwise) by the stockholder or the stockholder's attorney-in-fact. The revocability of a proxy that states on its face that it is irrevocable shall be governed by the provisions of Section 212(c) of the General Corporation Law of Delaware. 2.13 LIST OF STOCKHOLDERS ENTITLED TO VOTE The officer who has charge of the stock ledger of a corporation shall prepare and make, at least ten (10) days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten (10) days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. ARTICLE III DIRECTORS 3.1 POWERS Subject to the provisions of the General Corporation Law of Delaware and any limitations in the certificate of incorporation or these bylaws relating to action required to be approved by the stockholders or by the outstanding shares, the business and affairs of the corporation shall be managed and all corporate powers shall be exercised by or under the direction of the board of directors. 3.2 NUMBER OF DIRECTORS The number of directors of the Corporation shall be not less than three (3) nor more than ten (10). The exact number of directors, within the limit specified above, shall be determined from time to time by resolution of the board of directors. No reduction of the authorized number of directors shall have the effect of removing any director before that director's term of office expires. 3.3 ELECTION, QUALIFICATION AND TERM OF OFFICE OF DIRECTORS Except as provided in Section 3.4 of these bylaws, directors shall be elected at each annual meeting of stockholders to hold office until the next annual meeting. Directors need not be stockholders unless so required by the certificate of incorporation or these bylaws, wherein other qualifications for directors may be prescribed. Each director, including a director elected to fill a vacancy, shall hold office until his successor is elected and qualified or until his earlier resignation or removal. Elections of directors need not be by written ballot. 3.4 RESIGNATION AND VACANCIES Any director may resign at any time upon written notice to the corporation. When one or more directors so resigns and the resignation is effective at a future date, a majority of the directors then in office, including those who have so resigned, shall have power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations shall become effective, and each director so chosen shall hold office as provided in this section in the filling of other vacancies. Unless otherwise provided in the certificate of incorporation or these bylaws: (i) Vacancies and newly created directorships resulting from any increase in the authorized number of directors elected by all of the stockholders having the right to vote as a single class may be filled by a majority of the directors then in office, although less than a quorum, or by a sole remaining director. (ii) Whenever the holders of any class or classes of stock or series thereof are entitled to elect one or more directors by the provisions of the certificate of incorporation, vacancies and newly created directorships of such class or classes or series may be filled by a majority of the directors elected by such class or classes or series thereof then in office, or by a sole remaining director so elected. If at any time, by reason of death or resignation or other cause, the corporation should have no directors in office, then any officer or any stockholder or an executor, administrator, trustee or guardian of a stockholder, or other fiduciary entrusted with like responsibility for the person or estate of a stockholder, may call a special meeting of stockholders in accordance with the provisions of the certificate of incorporation or these bylaws, or may apply to the Court of Chancery for a decree summarily ordering an election as provided in Section 211 of the General Corporation Law of Delaware. If, at the time of filling any vacancy or any newly created directorship, the directors then in office constitute less than a majority of the whole board (as constituted immediately prior to any such increase), then the Court of Chancery may, upon application of any stockholder or stockholders holding at least ten (10) percent of the total number of the shares at the time outstanding having the right to vote for such directors, summarily order an election to be held to fill any such vacancies or newly created directorships, or to replace the directors chosen by the directors then in office as aforesaid, which election shall be governed by the provisions of Section 211 of the General Corporation Law of Delaware as far as applicable. 3.5 PLACE OF MEETINGS; MEETINGS BY TELEPHONE The board of directors of the corporation may hold meetings, both regular and special, either within or outside the State of Delaware. Unless otherwise restricted by the certificate of incorporation or these bylaws, members of the board of directors, or any committee designated by the board of directors, may participate in a meeting of the board of directors, or any committee, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting. 3.6 FIRST MEETINGS The first meeting of each newly elected board of directors shall be held at such time and place as shall be fixed by the vote of the stockholders at the annual meeting and no notice of such meeting shall be necessary to the newly elected directors in order legally to constitute the meeting, provided a quorum shall be present. In the event of the failure of the stockholders to fix the time or place of such first meeting of the newly elected board of directors, or in the event such meeting is not held at the time and place so fixed by the stockholders, the meeting may be held at such time and place as shall be specified in a notice given as hereinafter provided for special meetings of the board of directors, or as shall be specified in a written waiver signed by all of the directors. 3.7 REGULAR MEETINGS Regular meetings of the board of directors may be held without notice at such time and at such place as shall from time to time be determined by the board. 3.8 SPECIAL MEETINGS; NOTICE Special meetings of the board of directors for any purpose or purposes may be called at any time by the chairman of the board, the president, any vice president, the secretary or any two (2) directors. Notice of the time and place of special meetings and the purpose or purposes for which the meeting is called shall be delivered personally or by telephone to each director or sent by first-class mail or telegram, charges prepaid, addressed to each director at that director's address as it is shown on the records of the corporation. If the notice is mailed, it shall be deposited in the United States mail at least four (4) days before the time of the holding of the meeting. If the notice is delivered personally or by telephone or by telegram, it shall be delivered personally or by telephone or to the telegraph company at least forty-eight (48) hours before the time of the holding of the meeting. Any oral notice given personally or by telephone may be communicated either to the director or to a person at the office of the director who the person giving the notice has reason to believe will promptly communicate it to the director. The notice need not specify the place of the meeting, if the meeting is to be held at the principal executive office of the corporation. 3.9 QUORUM At all meetings of the board of directors, a majority of the authorized number of directors shall constitute a quorum for the transaction of business and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the board of directors, except as may be otherwise specifically provided by statute or by the certificate of incorporation. If a quorum is not present at any meeting of the board of directors, then the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum is present. 3.10 WAIVER OF NOTICE Whenever notice is required to be given under any provision of the General Corporation Law of Delaware or of the certificate of incorporation or these bylaws, a written waiver thereof, signed by the person entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the directors, or members of a committee of directors, need be specified in any written waiver of notice unless so required by the certificate of incorporation or these bylaws. 3.11 ADJOURNED MEETING; NOTICE If a quorum is not present at any meeting of the board of directors, then the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum is present. 3.12 BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING Unless otherwise restricted by the certificate of incorporation or these bylaws, any action required or permitted to be taken at any meeting of the board of directors, or of any committee thereof, may be taken without a meeting if all members of the board or committee, as the case may be, consent thereto in writing and the writing or writings are filed with the minutes of proceedings of the board or committee. 3.13 FEES AND COMPENSATION OF DIRECTORS Unless otherwise restricted by the certificate of incorporation or these bylaws, the board of directors shall have the authority to fix the compensation of directors. 3.14 APPROVAL OF LOANS TO OFFICERS The corporation may lend money to, or guarantee any obligation of, or otherwise assist any officer or other employee of the corporation or of its subsidiary, including any officer or employee who is a director of the corporation or its subsidiary, whenever, in the judgment of the directors, such loan, guaranty or assistance may reasonably be expected to benefit the corporation. The loan, guaranty or other assistance may be with or without interest and may be unsecured, or secured in such manner as the board of directors shall approve, including, without limitation, a pledge of shares of stock of the corporation. Nothing in this section contained shall be deemed to deny, limit or restrict the powers of guaranty or warranty of the corporation at common law or under any statute. 3.15 REMOVAL OF DIRECTORS Unless otherwise restricted by statute, by the certificate of incorporation or by these bylaws, any director or the entire board of directors may be removed, with or without cause, by the holders of a majority of the shares then entitled to vote at an election of directors. No reduction of the authorized number of directors shall have the effect of removing any director prior to the expiration of such director's term of office. ARTICLE IV COMMITTEES 4.1 COMMITTEES OF DIRECTORS The board of directors may, by resolution passed by a majority of the whole board, designate one or more committees, with each committee to consist of one or more of the directors of the corporation. The board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the board of directors to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the board of directors or in the bylaws of the corporation, shall have and may exercise all the powers and authority of the board of directors in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers that may require it; but no such committee shall have the power or authority to (i) amend the certificate of incorporation (except that a committee may, to the extent authorized in the resolution or resolutions providing for the issuance of shares of stock adopted by the board of directors as provided in Section 151(a) of the General Corporation Law of Delaware, fix any of the preferences or rights of such shares relating to dividends, redemption, dissolution, any distribution of assets of the corporation or the conversion into, or the exchange of such shares for, shares of any other class or classes or any other series of the same or any other class or classes of stock of the corporation), (ii) adopt an agreement of merger or consolidation under Sections 251 or 252 of the General Corporation Law of Delaware, (iii) recommend to the stockholders the sale, lease or exchange of all or substantially all of the corporation's property and assets, (iv) recommend to the stockholders a dissolution of the corporation or a revocation of a dissolution, or (v) amend the bylaws of the corporation; and, unless the board resolution establishing the committee, the bylaws or the certificate of incorporation expressly so provide, no such committee shall have the power or authority to declare a dividend, to authorize the issuance of stock, or to adopt a certificate of ownership and merger pursuant to Section 253 of the General Corporation Law of Delaware. 4.2 COMMITTEE MINUTES Each committee shall keep regular minutes of its meetings and report the same to the board of directors when required. 4.3 MEETINGS AND ACTION OF COMMITTEES Meetings and actions of committees shall be governed by, and held and taken in accordance with, the provisions of Article III of these bylaws, Section 3.5 (place of meetings and meetings by telephone), Section 3.7 (regular meetings), Section 3.8 (special meetings and notice), Section 3.9 (quorum), Section 3.10 (waiver of notice), Section 3.11 (adjournment and notice of adjournment), and Section 3.12 (action without a meeting), with such changes in the context of those bylaws as are necessary to substitute the committee and its members for the board of directors and its members; provided, however, that the time of regular meetings of committees may also be called by resolution of the board of directors and that notice of special meetings of committees shall also be given to all alternate members, who shall have the right to attend all meetings of the committee. The board of directors may adopt rules for the government of any committee not inconsistent with the provisions of these bylaws. ARTICLE V OFFICERS 5.1 OFFICERS The officers of the corporation shall be a president, one or more vice presidents, a secretary, and a treasurer. The corporation may also have, at the discretion of the board of directors, a chairman of the board, one or more assistant vice presidents, assistant secretaries, assistant treasurers, and any such other officers as may be appointed in accordance with the provisions of Section 5.3 of these bylaws. Any number of offices may be held by the same person. 5.2 ELECTION OF OFFICERS The officers of the corporation, except such officers as may be appointed in accordance with the provisions of Sections 5.3 or 5.5 of these bylaws, shall be chosen by the board of directors, subject to the rights, if any, of an officer under any contract of employment. 5.3 SUBORDINATE OFFICERS The board of directors may appoint, or empower the president to appoint, such other officers and agents as the business of the corporation may require, each of whom shall hold office for such period, have such authority, and perform such duties as are provided in these bylaws or as the board of directors may from time to time determine. 5.4 REMOVAL AND RESIGNATION OF OFFICERS Subject to the rights, if any, of an officer under any contract of employment, any officer may be removed, either with or without cause, by an affirmative vote of the majority of the board of directors at any regular or special meeting of the board or, except in the case of an officer chosen by the board of directors, by any officer upon whom such power of removal may be conferred by the board of directors. Any officer may resign at any time by giving written notice to the corporation. Any resignation shall take effect at the date of the receipt of that notice or at any later time specified in that notice; and, unless otherwise specified in that notice, the acceptance of the resignation shall not be necessary to make it effective. Any resignation is without prejudice to the rights, if any, of the corporation under any contract to which the officer is a party. 5.5 VACANCIES IN OFFICES Any vacancy occurring in any office of the corporation shall be filled by the board of directors. 5.6 CHAIRMAN OF THE BOARD The chairman of the board, if such an officer be elected, shall, if present, preside at meetings of the board of directors and exercise and perform such other powers and duties as may from time to time be assigned to him by the board of directors or as may be prescribed by these bylaws. If there is no president, then the chairman of the board shall also be the chief executive officer of the corporation and shall have the powers and duties prescribed in Section 5.7 of these bylaws. 5.7 PRESIDENT Subject to such supervisory powers, if any, as may be given by the board of directors to the chairman of the board, if there be such an officer, the president shall be the chief executive officer of the corporation and shall, subject to the control of the board of directors, have general supervision, direction, and control of the business and the officers of the corporation. He shall preside at all meetings of the shareholders and, in the absence or nonexistence of a chairman of the board, at all meetings of the board of directors. He shall have the general powers and duties of management usually vested in the office of president of a corporation and shall have such other powers and duties as may be prescribed by the board of directors or these bylaws. 5.8 VICE PRESIDENT In the absence or disability of the president, the vice presidents, if any, in order of their rank as fixed by the board of directors or, if not ranked, a vice president designated by the board of directors, shall perform all the duties of the president and when so acting shall have all the powers of, and be subject to all the restrictions upon, the president. The vice presidents shall have such other powers and perform such other duties as from time to time may be prescribed for them respectively by the board of directors, these bylaws, the president or the chairman of the board. 5.9 SECRETARY The secretary shall keep or cause to be kept, at the principal executive office of the corporation or such other place as the board of directors may direct, a book of minutes of all meetings and actions of directors, committees of directors, and shareholders. The minutes shall show the time and place of each meeting, whether regular or special (and, if special, how authorized and the notice given), the names of those present at directors' meetings or committee meetings, the number of shares present or represented at shareholders' meetings, and the proceedings thereof. The secretary shall keep, or cause to be kept, at the principal executive office of the corporation or at the office of the corporation's transfer agent or registrar, as determined by resolution of the board of directors, a share register, or a duplicate share register, showing the names of all shareholders and their addresses, the number and classes of shares held by each, the number and date of certificates evidencing such shares, and the number and date of cancellation of every certificate surrendered for cancellation. The secretary shall give, or cause to be given, notice of all meetings of the shareholders and of the board of directors required to be given by law or by these bylaws. He shall keep the seal of the corporation, if one be adopted, in safe custody and shall have such other powers and perform such other duties as may be prescribed by the board of directors or by these bylaws. 5.10 TREASURER The treasurer shall keep and maintain, or cause to be kept and maintained, adequate and correct books and records of accounts of the properties and business transactions of the corporation, including accounts of its assets, liabilities, receipts, disbursements, gains, losses, capital, retained earnings, and shares. The books of account shall at all reasonable times be open to inspection by any director. The treasurer shall deposit all money and other valuables in the name and to the credit of the corporation with such depositaries as may be designated by the board of directors. He shall disburse the funds of the corporation as may be ordered by the board of directors, shall render to the president and directors, whenever they request it, an account of all of his transactions as treasurer and of the financial condition of the corporation, and shall have such other powers and perform such other duties as may be prescribed by the board of directors or these bylaws. 5.11 ASSISTANT SECRETARY The assistant secretary, or, if there is more than one, the assistant secretaries in the order determined by the stockholders or board of directors (or if there be no such determination, then in the order of their election) shall, in the absence of the secretary or in the event of his or her inability or refusal to act, 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 or the stockholders may from time to time prescribe. 5.12 ASSISTANT TREASURER The assistant treasurer, or, if there is more than one, the assistant treasurers, in the order determined by the stockholders or board of directors (or if there be no such determination, then in the order of their election), shall, in the absence of the treasurer or in the event of his or her inability or refusal to act, perform the duties and exercise the powers of the treasurer and shall perform such other duties and have such other powers as the board of directors or the stockholders may from time to time prescribe. 5.13 AUTHORITY AND DUTIES OF OFFICERS In addition to the foregoing authority and duties, all officers of the corporation shall respectively have such authority and perform such duties in the management of the business of the corporation as may be designated from time to time by the board of directors or the stockholders. ARTICLE VI INDEMNITY 6.1 THIRD PARTY ACTIONS The corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending, or completed action, 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 he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement (if such settlement is approved in advance by the corporation, which approval shall not be unreasonably withheld) actually and reasonably incurred by him in connection with 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 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 interest of the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful. 6.2 ACTIONS BY OR IN THE RIGHT OF THE CORPORATION The corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he is or was a director, officer, employee or agent of corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys' fees) and amounts paid in settlement (if such settlement is approved in advance by the corporation, which approval shall not be unreasonably withheld) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit, if he acted in good faith and in manner he reasonably believed to be in or not opposed to the best interests of the corporation, except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Delaware Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Delaware Court of Chancery or such other court shall deem proper. Notwithstanding any other provision of this Article VI, no person shall be indemnified hereunder for any expenses or amounts paid in settlement with respect to any action to recover short-swing profits under Section 16(b) of the Securities Exchange Act of 1934, as amended. 6.3 SUCCESSFUL DEFENSE To the extent that a director, officer, employee or agent of the corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in Sections 6.1 and 6.2, or in defense of any claim, issue or matter therein, he shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by him in connection therewith. 6.4 DETERMINATION OF CONDUCT Any indemnification under Sections 6.1 and 6.2 (unless ordered by a court) shall be made by the corporation only as authorized in the specific case upon a determination that the indemnification of the director, officer, employee or agent is proper in the circumstances because he has met the applicable standard of conduct set forth in Sections 6.1 and 6.2. Such determination shall be made (1) by the Board of Directors or the Executive Committee by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding or (2) or if such quorum is not obtainable or, even if obtainable, a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, or (3) by the stockholders. Notwithstanding the foregoing, a director, officer, employee or agent of the Corporation shall be entitled to contest any determination that the director, officer, employee or agent has not met the applicable standard of conduct set forth in Sections 6.1 and 6.2 by petitioning a court of competent jurisdiction. 6.5 PAYMENT OF EXPENSES IN ADVANCE Expenses (including attorneys' fees) incurred in defending a civil, criminal, administrative or investigative action, suit or proceeding by an individual who may be entitled to indemnification pursuant to Section 6.1 or 6.2, shall be paid by the Corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of the director, officer, employee or agent to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the Corporation as authorized in this Article VI. 6.6 INDEMNITY NOT EXCLUSIVE The indemnification and advancement of expenses provided by or granted pursuant to the other sections of this Article VI shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any by-law, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office. 6.7 INSURANCE INDEMNIFICATION The corporation shall have the power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against any liability asserted against him and incurred by him in any such capacity or arising out of his status as such, whether or not the corporation would have the power to indemnify him against such liability under the provisions of this Article VI. 6.8 THE CORPORATION For purposes of this Article VI, references to "the corporation" shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under and subject to the provisions of this Article VI (including, without limitation the provisions of Section 6.4) with respect to the resulting or surviving corporation as he would have with respect to such constituent corporation if its separate existence had continued. 6.9 EMPLOYEE BENEFIT PLANS For purposes of this Article VI, references to "other enterprises" shall include employee benefit plans; references to "fines" shall include any excise taxes assessed on a person with respect to an employee benefit plan; and references to "serving at the request of the corporation" shall include any service as a director, officer, employee or agent of the corporation which imposes duties on, or involves services by, such director, officer, employee, or agent with respect to an employee benefit plan, its participants, or beneficiaries; and a person who acted in good faith and in a manner he reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner "not opposed to the best interests of the corporation" as referred to in this Article VI. 6.10 CONTINUATION OF INDEMNIFICATION AND ADVANCEMENT OF EXPENSES The indemnification and advancement of expenses provided by, or granted pursuant to, this Article VI shall, unless otherwise provided when authorized or ratified, 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. ARTICLE VII RECORDS AND REPORTS 7.1 MAINTENANCE AND INSPECTION OF RECORDS The corporation shall, either at its principal executive office or at such place or places as designated by the board of directors, keep a record of its shareholders listing their names and addresses and the number and class of shares held by each shareholder, a copy of these bylaws as amended to date, accounting books, and other records. Any stockholder of record, in person or by attorney or other agent, shall, upon written demand under oath stating the purpose thereof, have the right during the usual hours for business to inspect for any proper purpose the corporation's stock ledger, a list of its stockholders, and its other books and records and to make copies or extracts therefrom. A proper purpose shall mean a purpose reasonably related to such person's interest as a stockholder. In every instance where an attorney or other agent is the person who seeks the right to inspection, the demand under oath shall be accompanied by a power of attorney or such other writing that authorizes the attorney or other agent to so act on behalf of the stockholder. The demand under oath shall be directed to the corporation at its registered office in Delaware or at its principal place of business. The officer who has charge of the stock ledger of a corporation shall prepare and make, at least ten (10) days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten (10) days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. 7.2 INSPECTION BY DIRECTORS Any director shall have the right to examine the corporation's stock ledger, a list of its stockholders, and its other books and records for a purpose reasonably related to his position as a director. The Court of Chancery is hereby vested with the exclusive jurisdiction to determine whether a director is entitled to the inspection sought. The Court may summarily order the corporation to permit the director to inspect any and all books and records, the stock ledger, and the stock list and to make copies or extracts therefrom. The Court may, in its discretion, prescribe any limitations or conditions with reference to the inspection, or award such other and further relief as the Court may deem just and proper. 7.3 ANNUAL STATEMENT TO STOCKHOLDERS The board of directors shall present at each annual meeting, and at any special meeting of the stockholders when called for by vote of the stockholders, a full and clear statement of the business and condition of the corporation. 7.4 REPRESENTATION OF SHARES OF OTHER CORPORATIONS The chairman of the board, the president, any vice president, the treasurer, the secretary or assistant secretary of this corporation, or any other person authorized by the board of directors or the president or a vice president, is authorized to vote, represent, and exercise on behalf of this corporation all rights incident to any and all shares of any other corporation or corporations standing in the name of this corporation. The authority granted herein may be exercised either by such person directly or by any other person authorized to do so by proxy or power of attorney duly executed by such person having the authority. ARTICLE VIII GENERAL MATTERS 8.1 CHECKS From time to time, the board of directors shall determine by resolution which person or persons may sign or endorse all checks, drafts, other orders for payment of money, notes or other evidences of indebtedness that are issued in the name of or payable to the corporation, and only the persons so authorized shall sign or endorse those instruments. 8.2 EXECUTION OF CORPORATE CONTRACTS AND INSTRUMENTS The board of directors, except as otherwise provided in these bylaws, may authorize any officer or officers, or agent or agents, to enter into any contract or execute any instrument in the name of and on behalf of the corporation; such authority may be general or confined to specific instances. Unless so authorized or ratified by the board of directors or within the agency power of an officer, no officer, agent or employee shall have any power or authority to bind the corporation by any contract or engagement or to pledge its credit or to render it liable for any purpose or for any amount. 8.3 STOCK CERTIFICATES: PARTLY PAID SHARES The shares of a corporation shall be represented by certificates, provided that the board of directors of the corporation may provide by resolution or resolutions that some or all of any or all classes or series of its stock shall be uncertificated shares. Any such resolution shall not apply to shares represented by a certificate until such certificate is surrendered to the corporation. Notwithstanding the adoption of such a resolution by the board of directors, every holder of stock represented by certificates and upon request every holder of uncertificated shares shall be entitled to have a certificate signed by, or in the name of the corporation by the chairman or vice-chairman of the board of directors, or the president or vice-president, and by the treasurer or an assistant treasurer, or the secretary or an assistant secretary of such corporation representing the number of shares registered in certificate form. Any or all of the signatures on the certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate has ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if he were such officer, transfer agent or registrar at the date of issue. The corporation may issue the whole or any part of its shares as partly paid and subject to call for the remainder of the consideration to be paid therefor. Upon the face or back of each stock certificate issued to represent any such partly paid shares, upon the books and records of the corporation in the case of uncertificated partly paid shares, the total amount of the consideration to be paid therefor and the amount paid thereon shall be stated. Upon the declaration of any dividend on fully paid shares, the corporation shall declare a dividend upon partly paid shares of the same class, but only upon the basis of the percentage of the consideration actually paid thereon. 8.4 SPECIAL DESIGNATION ON CERTIFICATES If the corporation is authorized to issue more than one class of stock or more than one series of any class, then the powers, the designations, the preferences, and the relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights shall be set forth in full or summarized on the face or back of the certificate that the corporation shall issue to represent such class or series of stock; provided, however, that, except as otherwise provided in Section 202 of the General Corporation Law of Delaware, in lieu of the foregoing requirements there may be set forth on the face or back of the certificate that the corporation shall issue to represent such class or series of stock a statement that the corporation will furnish without charge to each stockholder who so requests the powers, the designations, the preferences, and the relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights. 8.5 LOST CERTIFICATES Except as provided in this Section 8.5, no new certificates for shares shall be issued to replace a previously issued certificate unless the latter is surrendered to the corporation and canceled at the same time. The corporation may issue a new certificate of stock or uncertificated shares in the place of any certificate theretofore issued by it, alleged to have been lost, stolen or destroyed, and the corporation may require the owner of the lost, stolen or destroyed certificate, or his legal representative, to give the corporation a bond sufficient to indemnify it against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate or uncertificated shares. 8.6 CONSTRUCTION; DEFINITIONS Unless the context requires otherwise, the general provisions, rules of construction, and definitions in the Delaware General Corporation Law shall govern the construction of these bylaws. Without limiting the generality of this provision, the singular number includes the plural, the plural number includes the singular, and the term "person" includes both a corporation and a natural person. 8.7 DIVIDENDS The directors of the corporation, subject to any restrictions contained in the certificate of incorporation, may declare and pay dividends upon the shares of its capital stock pursuant to the General Corporation Law of Delaware. Dividends may be paid in cash, in property, or in shares of the corporation's capital stock. The directors of the corporation may set apart out of any of the funds of the corporation available for dividends a reserve or reserves for any proper purpose and may abolish any such reserve. Such purposes shall include but not be limited to equalizing dividends, repairing or maintaining any property of the corporation, and meeting contingencies. 8.8 FISCAL YEAR The fiscal year of the corporation shall be fixed by resolution of the board of directors and may be changed by the board of directors. 8.9 SEAL The corporation shall have power to have a corporate seal, which shall be adopted and which may be altered by the board of directors, and the corporation may use the same by causing it or a facsimile thereof to be impressed or affixed or in any other manner reproduced. 8.10 TRANSFER OF STOCK Upon surrender to the corporation or the transfer agent of the corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignation or authority to transfer, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate, and record the transaction in its books. 8.11 STOCK TRANSFER AGREEMENTS The corporation shall have power to enter into and perform any agreement with any number of shareholders of any one or more classes of stock of the corporation to restrict the transfer of shares of stock of the corporation of any one or more classes owned by such stockholders in any manner not prohibited by the General Corporation Law of Delaware. 8.12 REGISTERED STOCKHOLDERS The corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends and to vote as such owner, shall be entitled to hold liable for calls and assessments the person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of another person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware. ARTICLE IX AMENDMENTS The original or other bylaws of the corporation may be adopted, amended or repealed by the stockholders entitled to vote; provided, however, that the corporation may, in its certificate of incorporation, confer the power to adopt, amend or repeal bylaws upon the directors upon such terms as are contained in the certificate. The fact that such power has been so conferred upon the directors shall not divest the stockholders of the power, nor limit their power to adopt, amend or repeal bylaws. ARTICLE X DISSOLUTION If it should be deemed advisable in the judgment of the board of directors of the corporation that the corporation should be dissolved, the board, after the adoption of a resolution to that effect by a majority of the whole board at any meeting called for that purpose, shall cause notice to be mailed to each stockholder entitled to vote thereon of the adoption of the resolution and of a meeting of stockholders to take action upon the resolution. At the meeting a vote shall be taken for and against the proposed dissolution. If a majority of the outstanding stock of the corporation entitled to vote thereon votes for the proposed dissolution, then a certificate stating that the dissolution has been authorized in accordance with the provisions of Section 275 of the General Corporation Law of Delaware and setting forth the names and residences of the directors and officers shall be executed, acknowledged, and filed and shall become effective in accordance with Section 103 of the General Corporation Law of Delaware. Upon such certificate's becoming effective in accordance with Section 103 of the General Corporation Law of Delaware, the corporation shall be dissolved. Whenever all the stockholders entitled to vote on a dissolution consent in writing, either in person or by duly authorized attorney, to a dissolution, no meeting of directors or stockholders shall be necessary. The consent shall be filed and shall become effective in accordance with Section 103 of the General Corporation Law of Delaware. Upon such consent's becoming effective in accordance with Section 103 of the General Corporation Law of Delaware, the corporation shall be dissolved. If the consent is signed by an attorney, then the original power of attorney or a photocopy thereof shall be attached to and filed with the consent. The consent filed with the Secretary of State shall have attached to it the affidavit of the secretary or some other officer of the corporation stating that the consent has been signed by or on behalf of all the stockholders entitled to vote on a dissolution; in addition, there shall be attached to the consent a certification by the secretary or some other officer of the corporation setting forth the names and residences of the directors and officers of the corporation. ARTICLE XI CUSTODIAN 11.1 APPOINTMENT OF A CUSTODIAN IN CERTAIN CASES The Court of Chancery, upon application of any stockholder, may appoint one or more persons to be custodians and, if the corporation is insolvent, to be receivers, of and for the corporation when: (i) at any meeting held for the election of directors the stockholders are so divided that they have failed to elect successors to directors whose terms have expired or would have expired upon qualification of their successors; or (ii) the business of the corporation is suffering or is threatened with irreparable injury because the directors are so divided respecting the management of the affairs of the corporation that the required vote for action by the board of directors cannot be obtained and the stockholders are unable to terminate this division; or (iii) the corporation has abandoned its business and has failed within a reasonable time to take steps to dissolve, liquidate or distribute its assets. 11.2 DUTIES OF CUSTODIAN The custodian shall have all the powers and title of a receiver appointed under Section 291 of the General Corporation Law of Delaware, but the authority of the custodian shall be to continue the business of the corporation and not to liquidate its affairs and distribute its assets, except when the Court of Chancery otherwise orders and except in cases arising under Sections 226(a)(3) or 352(a)(2) of the General Corporation Law of Delaware. EX-10 3 SEVERANCE AGREEMENT - JERRY ROGERS Exhibit 10 March 3, 1997 Mr. Gerald D. Rogers 3827 Beverly Drive Dallas, TX 75205 Dear Jerry: This letter, upon its execution and return by you, will evidence our agreement with respect to (i) your continued receipt of certain benefits following your resignation as President and Chief Executive Officer of Cyrix Corporation (the "Corporation") effective December 9, 1996 and (ii) the other matters addressed herein. 1. Cash Compensation. a) The Corporation shall continue to make cash payments to you of $11,540 on a bi-weekly basis through June 9, 1998. You agree to consult with the Corporation on mutually agreed upon terms. b) The Corporation shall pay to you an amount equal to the sum of (i) $33,934, which represents your accrued vacation pay (totaling 235 hours) through December 8, 1996, plus (ii) $50,000 bonus, which represents 25% of the 1996 bonus of $200,000 set by the Board of Directors of the Corporation at the end of 1995. Such total amount will be paid to you in a lump sum in cash eight (8) days after your execution and delivery to the corporation of this agreement. 2. Stock Options. The vesting of 300,000 outstanding stock options granted to you on January 26, 1995, and January 17, 1996, shall accelerate in full immediately. A total of 465,399 option shares are available for immediate exercise. The 40,399 option shares granted on January 15, 1991, shall be exercisable within the terms and conditions of such grant. Not withstanding termination of your employment with the Corporation or termination of your services as a Director, all other options shall be exercisable for ten years from the date of each option grant relevant to the Corporation's 1988 Incentive Stock Plan. The Corporation agrees that all the Options shall be exercisable without regard to any condition that you and/or your spouse execute either a Restricted Stock Purchase Agreement in the form attached as Attachment 1 to the Nonstatutory Stock Option Agreement between you and the Corporation, or any ov,,r agreement of any kind imposing restrictions on you or the stock acquired pursuant to the exercise of an Option (including any stock so acquired previously). 3. Medical and/or Dental Benefit Continuation. You have previously been furnished with a letter from the Corporation advising you, in connection with your termination of employment, with regard to your right to continue certain medical and/or dental insurance coverage. If you should elect to continue the medical and/or dental insurance coverage in accordance with the terms of the Corporation's prior letter, the Corporation agrees to pay the premiums for the continuation of such coverage through June 9, 1998. In addition, the Corporation shall pay the costs of your annual physical examinations at the Cooper Clinic through June 9, 1998. 4. Resignation from Other Positions. This letter agreement will evidence your resignation, effective December 9, 1996, not only from your position as President and Chief Executive Officer of the Corporation but also from all positions as an officer and/or director of any subsidiary of the Corporation. You shall continue to serve as a director of the Corporation in accordance with the Corporation's Bylaws until the Corporation1997 annual meeting of stockholders (and thereafter, if nominated and elected in accordance with the Corporation's Bylaws). 5. Corporate Property. The Corporation hereby assigns and transfers to you all rights, title and interest in any computers and related peripheral equipment and accessories and the cellular phone that you have in your possession. 6. Confidential Information. You agree not to publish or disclose to any person or entity, or to use for your personal benefit, any data or information concerning the Corporation or its products, business or affairs, including information concerning the Corporation's relationships with its manufacturers and customers (except such information as is publicly availab|~from other sources). These confidentiality obligations will expire (3) three years from the date of your cessation of your service as a director of the Corporation. Any violation by you of this paragraph 6 shall result in termination of the Corporation's payment established pursuant to paragraph 1 above and termination of the Corporation's obligation, to pay insurance premiums set forth in paragraph 3 above. 7. No Solicitation. You agree that prior to the first anniversary of the cessation of your service as a director of the Corporation, you shall not encourage or solicit any person who is either now or then an employee of the Corporation or any of its subsidiaries to terminate such employment. Any violation by you of this paragraph 7 shall result in termination of the Corporation's established payment pursuant to paragraph 1 above and termination of the Corporation's obligation to pay insurance premiums set forth in paragraph 3 above. 8. Mutual Release. a) You hereby release and discharge the Corporation, its subsidiaries and affiliates, and their officers, directors, stockholders, employees, employee benefit plans and agents, from any and all actions, liabilities and/or claims for relief and remuneration whatsoever, with respect to any act, omission or transaction occurring up to and including the date of your execution of this letter agreement, arising out of, or in any way connected with, your employment or former employment by the Corporation or your separation from such employment, including but not limited to all matters in law, in equity, in contract, in tort or pursuant to any statute. This release includes, but is not limited to, any complaints or charges of wrongful termination or discrimination (based on your age or any other factor) under the Age Discrimination in Employment Act, as amended, Title VII of the Civil Rights Act of 1964, as amended, the Texas Commission on Human Rights Act, as amended, the Americans with Disabilities Act, as amended, and any other statute or law. Notwithstanding, the foregoing, neither this release nor any other provis|s of this letter agreement shall be deemed a waiver or release by you of (i) any of your rights under this letter agreement, or (ii) any of your rights under the Indemnification Agreement described in paragraph agreement below. b) The Corporation on its own behalf and on behalf of its subsidiaries and other affiliated companies, hereby releases and discharges you and your heirs, executors, administrators, legal representatives, successors and assigns, of and from any and all claims, actions, suits, debts, liabilities, contracts, obligations and demands, direct and indirect, liquidated or unliquidated, contingent or matured, known or unknown, which the Corporation or any of its subsidiaries or other affiliated companies may now or hereafter have or claim to have against you and your heirs, executors, administrators, legal representatives, successors and assigns, regardless of the nature thereof or the manner in which such matters arose or accrued, and specifically including any matter that may be based on your sole or contributory negligence (whether active, passive or gross), pr^however, that the Corporation does not hereby release claims or causes of action it may hereafter have against you arising out of any breach by you of the provisions of this letter agreement. 9. Timing. As stated in your original agreement, dated January 8, 1997, you had 21 days to consider and execute the agreement. This revised agreement should be considered and executed immediately. You further agree that the Corporation may require you to verify in writing that youxid not revoke this agreement during the seven-day revocation period as a condition to the Corporation making the payments set forth in paragraph 1 of this agreement. 10. Consultation with Attorney. You are advised to consult with an attorney prior to executing this agreement. 11. Indemnification. The Corporation acknowledges and confirms the continuing obligation of the Corporation to indemnify and advance expenses to you pursuant to the Indemnification Agreement dated March 25, 1988 betweenwxxe Corporation and you. 12. Good and Sufficient Consideration. You acknowledge that the promises of the Corporation contained herein constitute good and sufficient consideration for the release and other promises made by you. 13. Entire Agreement. This letter agreement constitutes the entire agreement of the parties and supersedes any and all prior agreements or understanding concerning the subject hereof. qrsi 14. Disclosure. The parties hereto agree that they will keep the terms and fact of this agreement confidential, except as may be required by law or judicial process and they will not make any disparaging statements about the other to any third person or party. 15. Change in Control. In the event of a Change in Control of the Corporation after the date of this letter agreement, the Corporation shall pay you a lump sum in cash, on or before the fifth day following such Change of Control, the total amount of any severance payments remaining pursuant to paragraph 1(a) hereof. For the purposes of this paragraph 15, a Change in Control" will be deemed to have occurred if any person (as such term is used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934 shall become the beneficial owner (within the meaning of Rule 13(d)(3) under the Securities and Exchange Act of 1934) of a majority or more of the Corporation's outstanding common stock. Please indicate your agreement to the foregoing by executing and returning a copy of this letter agreement. Very truly yours, CYRIX CORPORATION By:/s/ James W. Swent, III --------------------- James W. Swent, III Sr. V.P. Finance & CFO Agreed to this 10th day of March, 1997. /s/ Gerald D. Rogers - ----------------------------------- Gerald D. Rogers EX-11 4 Exhibit 11
EXHIBIT 11 CYRIX CORPORATION AND SUBSIDIARIES PRIMARY AND FULLY DILUTED EARNINGS PER COMMON AND COMMON EQUIVALENT SHARE (In thousands, except per share data) Quarters Ended March 31, 1997 1996 ---------------------------- Weighted average common shares outstanding 19,598 19,295 Incremental shares related to assumed exercise of 742 734 stock options ------------- ------------- Weighted average common and common equivalent shares 20,340 20,029 ============= ============= Net income $6,613 $1,956 ============= ============= Earnings per common and common equivalent share - primary $0.33 $0.10 ============= ============= Ea|ngs per common and common equivalent share assuming full dilution: Weighted average common shares outstanding 19,598 19,295 Incremental shares related to: Assumed conversion of subordinated notes 3,182 -- Assumed exercise of stock options 742 734 ------------- ------------- Weighted average common and common equivalent shares 23,522 20,029 ============= ============= Net income available to common stockholders $6,613 $1,956 Interest, net of tax, on assumed conversion of subordinated notes 1,148 -- ------------- ------------- Adjusted net income $7,761 $1,956 ============= ============= Earnings per common and common equivalent share - fully diluted $0.33 $0.10 ============= =============
EX-27 5 FDS --
5 1000 3-Mos Dec-28-1997 Dec-30-1996 Mar-30-1997 96,093 30,591 41,224 9,417 26,686 220,512 153,575 69,504 326,177 57,175 138,477 0 0 81 130,652 326,177 74,857 75,616 42,168 21,814 0 4,160 2,623 10,019 3,406 6,613 0 0 0 6,613 0.33 0.33
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