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 April 30, 1995
or
[ ] Transition Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from
______________________ to ______________________
COMMISSION FILE NUMBER 0-6050
POWELL INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
NEVADA 88-0106100
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
8550 MOSLEY DRIVE, HOUSTON, TEXAS 77075-1180
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (713) 944-6900
Indicate by "X" whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [ ]
Common Stock, par value $.01 per share; 10,542,704 shares outstanding on April
30, 1995.
POWELL INDUSTRIES, INC.
PART I - Financial Information
Item 1. Financial Statements ............................. 3 - 8
Item 2. Management's Discussion and Analysis of
Financial Condition and Quarterly
Results of Operations ......................... 10
PART II - Other Information and Signatures ......................... 11 - 12
2
Powell Industries, Inc. and Subsidiaries
Consolidated Balance Sheets
(In Thousands, Except Share Data)
APRIL 30, OCTOBER 31,
Assets 1995 1994
(UNAUDITED)
----------- -----------
Current Assets:
Cash and cash equivalents .................................................................... $ 1,238 $ 7,598
Accounts receivable, less allowance for doubtful accounts
of $851 and $1,061, respectively .......................................................... 36,544 33,976
Costs and estimated earnings in excess of billings ........................................... 11,074 7,338
Inventories .................................................................................. 19,301 14,899
Deferred income taxes ........................................................................ 2,421 2,134
Prepaid expenses and other current assets .................................................... 1,982 1,327
-------- --------
Total Current Assets ....................................................................... 72,560 67,272
Property, plant and equipment, net ............................................................. 16,017 15,659
Deferred income taxes, noncurrent .............................................................. 1,518 1,390
Other assets ................................................................................... 5,771 6,423
-------- --------
Total Assets ............................................................................... $ 95,866 $ 90,744
======== ========
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts and income taxes payable ............................................................ $ 11,917 $ 9,217
Accrued salaries, bonuses and commissions .................................................... 3,713 4,612
Accrued product warranty ..................................................................... 3,119 3,679
Other accrued expenses ....................................................................... 4,242 5,372
Billings in excess of costs and estimated earnings ........................................... 4,647 2,350
Current maturities of long-term debt ......................................................... 2,813 2,813
-------- --------
Total Current Liabilities .................................................................. 30,451 28,043
Long-term debt ................................................................................. 6,563 6,563
Deferred compensation expense .................................................................. 1,951 1,887
Postretirement benefits liability .............................................................. 2,547 2,595
Stockholders' Equity:
Preferred stock, $.01 par value; 5,000,000 shares authorized; none issued
Common stock, $.01 par value; 15,000,000 shares authorized; 10,542,704 and
10,517,704, respectively, shares issued and outstanding .................................... 105 105
Additional paid-in capital ................................................................... 5,062 4,906
Retained earnings ............................................................................ 52,746 50,485
Deferred compensation-ESOP ................................................................... (3,559) (3,840)
-------- --------
Total Stockholders' Equity ................................................................. 54,354 51,656
-------- --------
Total Liabilities and Stockholders' Equity ................................................. $ 95,866 $ 90,744
======== ========
The accompanying notes are an integral part of these
consolidated financial statements.
3
Powell Industries, Inc. and Subsidiaries
Consolidated Statements of Operations (unaudited)
(In Thousands, Except Per Share Data)
THREE MONTHS ENDED APRIL 30,
------------------------------------
1995 1994
----------- -----------
Revenues ......................................................................... $ 41,398 $ 39,378
Cost of goods sold ............................................................... 32,459 30,571
----------- -----------
Gross profit ..................................................................... 8,939 8,807
Selling, general and administrative expenses ..................................... 6,616 6,690
----------- -----------
Earnings from operations ......................................................... 2,323 2,117
Interest, net .................................................................... 145 179
----------- -----------
Earnings before income taxes ..................................................... 2,178 1,938
Income tax provision ............................................................. 720 644
----------- -----------
Net earnings ..................................................................... 1,458 1,294
=========== ===========
Net earnings per common share .................................................... $ 0.14 $ 0.12
=========== ===========
Weighted average number of common shares outstanding ............................. 10,534,371 10,509,371
=========== ===========
The accompanying notes are an integral part of these
consolidated financial statements.
4
Powell Industries, Inc. and Subsidiaries
Consolidated Statements of Operations (unaudited)
(In Thousands, Except Per Share Data)
SIX MONTHS ENDED APRIL 30,
------------------------------------
1995 1994
----------- -----------
Revenues ......................................................................... $ 77,987 $ 73,720
Cost of goods sold ............................................................... 61,457 57,564
----------- -----------
Gross profit ..................................................................... 16,530 16,156
Selling, general and administrative expenses ..................................... 12,952 12,958
----------- -----------
Earnings from operations ......................................................... 3,578 3,198
Interest, net .................................................................... 268 382
----------- -----------
Earnings before income taxes ..................................................... 3,310 2,816
Income tax provision ............................................................. 1,049 894
----------- -----------
Net earnings ..................................................................... $ 2,261 $ 1,922
=========== ===========
----------- -----------
Net earnings per common share .................................................... $ 0.21 $ 0.18
=========== ===========
Weighted average number of common shares outstanding ............................. 10,526,037 10,501,037
=========== ===========
The accompanying notes are an integral part of these
consolidated financial statements.
5
Powell Industries, Inc. and Subsidiaries
Consolidated Statements of Cash Flows (unaudited)
(In Thousands)
SIX MONTHS ENDED APRIL 30,
---------------------------
1995 1994
-------- --------
Operating Activities:
Net earnings ............................................................................... $ 2,261 $ 1,922
Adjustments to reconcile net earnings to net cash provided by (used in)
operating activities:
Depreciation and amortization ............................................................ 1,710 1,647
Deferred income taxes .................................................................... (415) (824)
Postretirement benefit liability ......................................................... (48) 424
Changes in operating assets and liabilities:
Accounts receivable .................................................................... (2,568) (5,568)
Costs and estimated earnings in excess of billings ..................................... (3,736) 3,933
Inventories ............................................................................ (4,402) (3,722)
Prepaid expenses and other current assets .............................................. (655) (933)
Other assets ........................................................................... (168) (360)
Accounts payable and income taxes payable .............................................. 2,700 (2,460)
Accrued liabilities .................................................................... (2,589) 984
Billings in excess of costs and estimated earnings ..................................... 2,297 (107)
Other long-term liabilities ............................................................ 345 140
-------- --------
Net cash used in operating activities ........................................................ (5,268) (4,924)
-------- --------
Investing Activities:
Purchases of property, plant, and equipment ................................................ (1,248) (975)
Acquisition of Transdyn Controls, Inc. ..................................................... -- (1,539)
-------- --------
Net cash used in investing activities ........................................................ (1,248) (2,514)
-------- --------
Financing Activities:
Payments of long-term debt ................................................................. -- (519)
Exercise of stock grants ................................................................... 156 178
-------- --------
Net cash provided by (used in) financing activities .......................................... 156 (341)
-------- --------
Net decrease in cash and cash equivalents .................................................... (6,360) (7,779)
Cash and cash equivalents at beginning of period ............................................. 7,598 13,118
-------- --------
Cash and cash equivalents at end of period ................................................... $ 1,238 $ 5,339
======== ========
The accompanying notes are an integral part of these
consolidated financial statements.
6
Part I
Item 1
POWELL INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A. BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been
prepared in accordance with the instructions to Form 10-Q and, in the opinion of
management, reflect all adjustments which are of a normal recurring nature
necessary for a fair presentation of financial position, results of operations
and of cash flows. It is suggested that these financial statements be read in
conjunction with the financial statements and notes thereto included in the
Company's latest annual report.
B. INVENTORY
APRIL 30, OCTOBER 31,
1995 1994
(UNAUDITED)
----------- -----------
The components of inventory are summarized below (in thousands):
Raw materials and subassemblies ............................................ $13,872 $ 9,392
Work-in-process ............................................................ 5,429 5,507
------- -------
Total inventories .......................................................... $19,301 $14,899
======= =======
C. PROPERTY, PLANT AND EQUIPMENT
APRIL 30, OCTOBER 31,
1995 1994
(UNAUDITED)
------------ -----------
Property, plant and equipment is summarized below (in thousands):
Land ........................................................................... $ 2,514 $ 2,514
Buildings and improvements ..................................................... 14,372 14,282
Machinery and equipment ........................................................ 22,533 21,863
Furniture & fixtures ........................................................... 3,756 3,076
Construction in progress ....................................................... 597 247
-------- --------
43,772 41,982
Less-accumulated depreciation .................................................. (27,755) (26,323)
-------- --------
Total property, plant and equipment, net ....................................... $ 16,017 $ 15,659
======== ========
7
Part I
Item 1
D. Other Financial Information (unaudited)
SIX MONTHS ENDED
APRIL 30,
---------------------------------
1995 1994
------ ------
Supplemental disclosure of cash flow information (in thousands):
Cash paid during the period for:
Interest .................................................................. $ 501 $ 654
====== ======
Income taxes .............................................................. $1,620 $ 630
====== ======
E. Production Contracts
For contracts in which the percentage-of-completion method is used, costs
and estimated earnings in excess of billings are shown as a current asset
and billings in excess of costs and estimated earnings are shown as a
current liability. The components of these contracts are as follows (in
thousands):
APRIL 30, OCTOBER 31,
1995 1994
(UNAUDITED)
----------- -----------
Costs and estimated earnings ......................................................... $ 46,067 $ 33,258
Progress billings .................................................................... (34,993) (25,920)
-------- --------
Total costs and estimated earnings in excess of billings ............................. $ 11,074 $ 7,338
======== ========
Progress billings .................................................................... $ 18,253 $ 12,556
Costs and estimated earnings ......................................................... (13,606) (10,206)
-------- --------
Total billings in excess of costs and estimated earnings ............................. $ 4,647 $ 2,350
======== ========
8
Part I
Item 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND QUARTERLY RESULTS
OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
During 1990, the Company concluded a private placement of $15,000,000 in term
notes, of which $9,376,000 was outstanding as of January 31, 1995. These notes
are unsecured with a fixed interest rate of 10.4 percent. The notes mature
through June 1997, with the next payment of $2,813,000 due in June 1995.
The Company also has a revolving line of credit, with a major domestic bank, of
$10,000,000, which was amended in April 1995, to extend the maturity date to May
1, 1997. As of April 30, 1995 and October 31, 1994, none of this line was
outstanding.
The Company's ability to satisfy its cash requirements is evaluated by analyzing
key measures of liquidity applicable to the Company. The following table is a
summary of the measures which are significant to management:
April 30, October 31, April 30,
1995 1994 1994
Working Capital ................ $42,109,000 $39,229,000 $41,386,000
Current Ratio .................. 2.38 to 1 2.40 to 1 2.60 to 1
Debt to Capitalization ......... .15 to 1 .15 to 1 .20 to 1
The consolidated statements of cash flows show that approximately $6,360,000 of
cash was used during the six months ended April 30, 1995. The increases in
accounts receivables and inventories requiring the use of cash were due to the
increased volume of business, product shipment delays and advance purchase of
inventory. Another major use of cash was the reduction of accrued liabilities
for incentive compensation, legal expenses and insurance. Billings in excess of
costs and estimated earnings increased and had a positive effect on the
Company's cash flow during the quarter. The increase in this account reflects
the increase in the amount of progress billings in advance of costs incurred
during the period. The use of cash for capital expenditures during the six
months of 1995 was $1,248,000 which was mainly invested in machinery and
equipment.
The Company's fiscal 1995 asset management program will continue to focus on the
collection of receivables and reduction in inventories. The Company plans to
satisfy its fiscal 1995 capital requirements and operating needs primarily with
funds available in cash and cash equivalents of $1,238,000, funds generated from
operating activities and funds available under its existing revolving credit
line.
9
RESULTS OF OPERATIONS
The following table sets forth, as a percentage of revenues, certain items from
the Consolidated Statements of Operations.
APRIL 30,
-----------------------------------------------------------------
1995 1994
- - ------------------------------------------------------------------------------------------------------------------------------------
THREE MONTHS SIX MONTHS THREE MONTHS SIX MONTHS
ENDED ENDED ENDED ENDED
------------ ---------- ------------ ----------
Revenues ................................................... 100.0% 100.0% 100.0% 100.0%
Gross Profit ............................................... 21.6 21.2 22.4 21.9
Selling, general and administrative
expenses ................................................. 16.0 16.6 17.0 17.6
Interest, net .............................................. .4 .4 .5 .5
Net earnings before income tax ............................. 5.2 4.2 4.9 3.8
Income tax provision ....................................... 1.7 1.3 1.6 1.2
Net earnings ............................................... 3.5 2.9 3.3 2.6
REVENUES for the quarter ended April 30, 1995 were up five percent to
$41,398,000 from $39,378,000 in the second quarter of last year. This increase
in volume was due to higher electrical distribution equipment product line
revenues. Revenues for the six months ended April 30, 1995 were up 6 percent to
$77,987,000 from $73,720,000 in the first six months of last year. This increase
in volume was due to higher electrical distribution equipment product line
revenues which were partially offset by lower revenues from process control
product lines.
GROSS PROFIT, as a percentage of revenues, was 21.6 percent and 22.4 percent for
the quarters ended April 30, 1995 and 1994. The gross profit percentage for the
six months ended April 30, 1995 and 1994 was 21.2 percent and 21.9 percent,
respectively. The lower percentages in 1995 were due to changes in product mix
shipped during 1995.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSE as a percentage of revenues was
16.0% and 17.0% for the quarters ended April 30, 1995 and 1994. The percentages
of revenues for the six months ending April 30, 1995 and 1994 are 16.6% and
17.6%, respectively. The higher percentages in 1995 were due to the effect of
increased revenue volume without corresponding increases in expense.
INTEREST, NET is lower in 1995 than in 1994 due to the reduction in outstanding
debt.
INCOME TAX PROVISION had effective tax rates of 33.1% and 33.2% for the quarters
ended April 30, 1995 and 1994. For the six months ended April 30, 1995 and 1994
the effective tax rate was 31.7% in each period. The lower than statutory rates
are due to foreign sales corporation credits.
NET EARNINGS were $1,458,000 or $.14 per share for the second quarter of fiscal
1995, an increase of 13 percent from $1,294,000 or $.12 per share for the same
period last year. The net earnings for the six months ended April 30, 1995 were
$2,261,000, or $.21 per share, compared with $1,922,000, or $.18 per share for
the first six months of fiscal 1994, an increase of eighteen percent. The
increase in both 1995 periods reported were mainly due to the higher revenue
volume and lower interest expense.
The order backlog at April 30, 1995 was $112.4 million compared to $106.7
million at October 31, 1994. The October 31, 1994, backlog has been adjusted for
a large turbine package order canceled in January 1995, as previously reported,
when a customer terminated a cogeneration project.
10
Part II
OTHER INFORMATION
ITEM 1. Legal Proceedings
No material developments in litigation previously reported.
ITEM 2. Changes in Securities
None
ITEM 3. Defaults Upon Senior Securities
Not applicable
ITEM 4. Submission of Matters to a Vote of Security Holders
None
ITEM 5. Other Information
None
ITEM 6. Exhibits and Reports on Form 8-K
a. Exhibits
3.2 Bylaws of Powell Industries, Inc.
10.5 Fourth amendment, dated April 30, 1995, to Credit Agreement
between Powell Industries, Inc. and NationsBank of Texas.
b. Reports on Form 8K
None
c. Exhibit 27.0 Financial Data Schedule
11
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
POWELL INDUSTRIES, INC.
Registrant
June 13, 1995
Date THOMAS W. POWELL
President and Chief Executive Officer
(Principal Executive Officer)
June 13, 1995
Date J. F. AHART
Vice President,
Secretary-Treasurer
Chief Financial Officer
(Principal Financial and Accounting Officer)
EXHIBIT 3.2
BYLAWS
OF
POWELL INDUSTRIES, INC.
BYLAWS
OF
POWELL INDUSTRIES, INC.
I
OFFICES
1.1 PRINCIPAL OFFICE. The principal office shall be in Houston, Harris
County, Texas.
1.2 OTHER OFFICES. The Corporation may also have offices at such other
places, both within and without the State of Nevada, as the Board of Directors
may from time to time determine or the business of the Corporation may require.
II
STOCKHOLDERS' MEETINGS
2.1 PLACE OF MEETINGS. All meetings of the stockholders shall be held at
the principal office of the Corporation or any other place within or without the
State of Nevada as may be designated for that purpose from time to time by the
Board of Directors.
2.2 ANNUAL MEETINGS. The annual meetings of the stockholders shall be held
on such time and date in each year as may be determined by the Board of
Directors.
2.3 NOTICE OF MEETING. Written notice of the meeting, stating the place,
date and hour of the meeting, the purpose or purposes for which the meeting is
called and signed by the President, a Vice President, the Secretary, an
Assistant Secretary, or by such other natural person as shall be designated by
the Board of Directors shall be given in writing to each stockholder entitled to
vote at the meeting not less than ten (10) nor more than sixty (60) days before
the date of the meeting either personally or by mail, postage prepaid, addressed
to the stockholder at his address appearing on the books of the Corporation.
Notice of an adjourned meeting need not be given if the time and place thereof
are announced at the meeting at which
1
the adjournment is taken, unless the adjournment is for more than thirty (30)
days, or after the adjournment a new record date is fixed for the adjourned
meeting, in which case a notice of the adjourned meeting shall be given to each
stockholder of record entitled to vote at the meeting. Notwithstanding the
foregoing, no notice need be given to any stockholder if (i) notice of two (2)
consecutive annual meetings, and all notices of meetings or of the taking of
action by written consent without a meeting to such person during the period
between such two (2) consecutive annual meetings, or (ii) all (but in no event
less than two [2]) payments sent by first-class mail of dividends or interest on
securities during a twelve-month period, have been mailed to that person at his
address as shown on the records of the Corporation, and have been returned
undeliverable. However, if such a person delivers to the Corporation a written
notice setting forth his then current address, then any notice subsequently
given shall also be given to such person.
2.4 SPECIAL MEETINGS. Special meetings of the stockholders for any purpose
or purposes whatsoever may be called at any time by the Chairman of the Board,
or by the Board of Directors, or by one or more stockholders holding in the
aggregate at least twenty percent (20%) of all the shares entitled to vote at
the proposed special meeting. Only business within the purpose or purposes
described in the notice of the special meeting of the stockholders may be
conducted at the meeting.
2.5 QUORUM. A majority of the shares entitled to vote constitutes a quorum
for the transaction of business. Once a quorum is present at a meeting of
stockholders, the stockholders represented in person or by proxy at the meeting
may conduct such business as may be properly brought before the meeting until it
is adjourned, and the subsequent withdrawal from the meeting of any stockholder
or the refusal of any stockholder represented in person or by proxy to vote
2
shall not affect the presence of a quorum at the meeting. The stockholders
represented in person or by proxy at a meeting of stockholders at which a quorum
is not present may adjourn the meeting until such time and to such place as may
be determined by a vote of the holders of a majority of the shares represented
in person or by proxy at that meeting.
2.6 VOTING. In all matters other than the election of Directors, the
affirmative vote of a majority of the shares present in person or represented by
proxy and entitled to vote on the subject matter at a meeting at which a quorum
is present shall be the act of the stockholders. Directors shall be elected by a
plurality of the votes of the shares present or represented by proxy at the
meeting and entitled to vote on the election of Directors. No stockholder shall
have the right to cumulate his votes at any election for Directors of the
Corporation.
2.7 PROXIES. Every person entitled to vote or execute consents may do so
either in person or by valid proxy granted in accordance with the requirements
of the Nevada General Corporation Law.
2.8 CONSENT OF ABSENTEES. No defect in the calling or noticing of a
stockholders' meeting will affect the validity of any action at the meeting if a
quorum was present and if each stockholder not present in person or by proxy
signs a written waiver of notice, consent to the holding of the meeting, or
approval of the minutes, either before or after the meeting, and such waivers,
consents, or approvals are filed with the corporate records or made a part of
the minutes of the meeting.
2.9 ACTION WITHOUT MEETING. Any action required or permitted to be taken
at any annual or special meeting of stockholders of the Corporation may be taken
without a meeting, without prior notice or call, and without a vote, if a
consent or consents in writing, setting forth the action so taken, shall be
signed by the holder or holders of shares having not less than the
3
minimum number of votes that would be necessary to authorize or take such action
at a meeting at which the holders of all shares entitled to vote on the action
were present and voted. The written consent must be filed with the minutes of
the proceedings of the stockholders.
III
DIRECTORS
3.1 POWERS. The Directors shall act only as a board, and an individual
Director shall have no power as such. All corporate powers of the Corporation
shall be exercised by, or under the authority of, and the business and affairs
of the Corporation shall be controlled by the Board of Directors, subject,
however, to such limitations as are imposed by law, the Articles of
Incorporation, or these Bylaws as to any actions to be authorized or approved by
the stockholders. The Board of Directors may, by contract or otherwise, give
general or limited or special power and authority to the officers and employees
of the Corporation to transact the general business, or any special business, of
the Corporation, and may give powers of attorney to agents of the Corporation to
transact any special business requiring such authorization.
3.2 NUMBER AND QUALIFICATION OF DIRECTORS. The authorized number of
Directors of the Corporation shall be nine (9). The Directors need not be
stockholders of the Corporation. The term of office of each Director shall
expire (except as hereinafter provided to allow for rotation of Directors) every
three (3) years. The Board of Directors shall be divided into three (3) classes
of Directors, with three (3) Directors in each class. The Directors of Class 1
shall hold office until the next annual meeting of the stockholders of the
Corporation following the date of the adoption of these Bylaws, the Directors of
Class 2 shall hold office until the second annual meeting of the stockholders of
the Corporation following the date of the adoption of these
4
Bylaws, and the Directors of Class 3 shall hold office until the third annual
meeting of the stockholders of the Corporation following the date of the
adoption of these Bylaws.
3.3 TERM OF OFFICE. Except for the terms as provided in Section 3.2
hereof, each Director shall be elected to hold office for a term of three (3)
years. Each Director shall serve until the expiration of his or her term and
thereafter until his or her respective successor is duly elected and qualified,
or until his or her earlier death, resignation or removal.
3.4 VACANCIES. Any vacancy occurring in the Board of Directors, including
a vacancy occurring by reason of an increase in the number of Directors, may be
filled by a majority of the remaining Directors, although less than a quorum, or
by a sole remaining Director. The stockholders may fill any vacancy occurring in
the Board of Directors not filled by the Directors at an annual or special
meeting of stockholders.
3.5 REMOVAL OF DIRECTORS. The entire Board of Directors or any individual
Director may be removed from office in the manner provided by the Nevada General
Corporation Law.
3.6 PLACE OF MEETINGS. All meetings of the Board of Directors shall be
held at the principal office of the Corporation or at such place within or
without of the State of Nevada as may be designated from time to time by
resolution of the Board of Directors or by written consent of all of the members
of the Board of Directors.
3.7 REGULAR MEETINGS. Regular meetings of the Board of Directors shall be
held, without call or notice, immediately following each annual meeting of the
stockholders of the Corporation, and at such other times as the Board of
Directors may determine.
3.8 SPECIAL MEETINGS - CALL AND NOTICE. Special meetings of the Board of
Directors for any purpose may be called at any time by the Chairman of the
Board, the President, or by any two (2) Directors. Written notice of the special
meetings, stating the time and, in general
5
terms, the purpose or purposes thereof, shall be mailed or telegraphed or
personally delivered to each Director not later than the day before the day
appointed for the meeting.
3.9 QUORUM. A majority of the authorized number of Directors shall be
necessary to constitute a quorum for the transaction of business, except to
adjourn as hereinafter provided and except as provided in Section 3.4 of these
Bylaws. Every act or decision done or made by a majority of the Directors
present at a meeting at which a quorum is present shall be regarded as the act
of the Board of Directors, unless a greater number be required by law.
3.10 BOARD OF DIRECTORS ACTION WITHOUT MEETING; TELEPHONE MEETINGS. Any
action required or permitted to be taken by the Board of Directors may be taken
without a meeting and with the same force and effect as a unanimous vote of
Directors if before or after the action, all members of the Board of Directors
shall sign a written consent to such action. Such written consent shall be filed
with the minutes of the proceedings of the Board of Directors. The Directors may
participate in a meeting of the Board of Directors by means of a telephone
conference or similar method of communication by which all persons participating
in the meeting can hear each other. Participation in such a meeting constitutes
presence in person at the meeting, except where participation is for the express
purpose of objecting to the transaction of any business at the meeting on the
ground that the meeting is not lawfully called or convened.
3.11 ADJOURNMENT - NOTICE. A quorum of the Directors may adjourn any
Directors' meeting to meet again at a stated day and hour. Notice of the time
and place of holding an adjourned meeting shall be given to each absent
Director, and to all Directors if the time and place is not fixed at the meeting
adjourned. In the absence of a quorum, a majority of the Directors present at
any Directors' meeting, either regular or special, may adjourn from time to time
until the time fixed for the next regular meeting of the Board of Directors.
6
3.12 CONDUCT OF MEETINGS. The Chairman of the Board or, in his absence,
any Director selected by the Directors present shall preside at meetings of the
Board of Directors. The Secretary of the Corporation or, in his absence, any
person appointed by the presiding officer shall act as secretary at meetings of
the Board of Directors.
3.13 PRESUMPTION OF ASSENT. A Director of the Corporation who is present
at a meeting of the Board of Directors in which action on any Corporation matter
is taken shall be presumed to have assented to the action taken unless his
dissent or abstention shall be written in the minutes of the meeting or unless
he shall file his written dissent to such action or abstention with respect to
such action with the person acting as the secretary of the meeting before the
adjournment thereof, or shall forward such dissent or abstention by registered
or certified mail to the Secretary of the Corporation immediately after the
adjournment of the meeting. Such right to dissent or abstain shall not apply to
a Director who voted in favor of such action.
3.14 COMPENSATION. Directors and members of committees may receive such
compensation, if any, for their services and such reimbursement for expenses as
may be fixed or determined by resolution of the Board of Directors.
3.15 CONSENT OF ABSENTEES. No defect in the calling or noticing of a
Directors' meeting will affect the validity of any action at the meeting if a
quorum was present and if each director not present signs a written waiver of
notice, consent to the holding of the meeting, or approval of the minutes,
either before or after the meeting, and such waivers, consents, or approvals are
filed with the corporate records or made a part of the minutes of the meeting.
7
3.16 CHAIRMAN OF THE BOARD. The Chairman of the Board shall preside at
meetings of the Board of Directors. In the event of the absence of the Chairman
of the Board from any meeting, the Board of Directors may elect a chairman from
among its members to preside at such meeting.
3.17 COMMITTEES.
A. DESIGNATION. The Board of Directors may, by resolution adopted by
a majority of the Board of Directors, designate one (1) or more
committees, including, without limitation, an Executive Committee, an
Audit Committee, and a Compensation Committee. Members of each such
committee shall serve at the pleasure of the Board of Directors. The
members of each such committee shall be designated by resolution adopted
by a majority of the full Board of Directors. Each committee must include
at least one (1) Director, but the Board of Directors may appoint natural
persons who are not Directors to serve on committees. To the extent
provided in the resolution of the Board of Directors designating such
committee or in any subsequent resolution of the Board of Directors, any
such committee shall have and may exercise the powers of the Board of
Directors in the management of the business and affairs of the
Corporation, and may have power to authorize the seal of the Corporation
to be affixed to all papers on which the Corporation desires to place a
seal.
B. CHANGE IN NUMBER. The number of members of any committee may be
increased or decreased from time to time by a resolution adopted by the
Board of Directors.
8
C. REMOVAL. Any member of any committee may be removed by a
resolution adopted by the Board of Directors, whenever, in the Board of
Directors' judgment, the best interests of the Corporation will be served
thereby.
D. VACANCIES. A vacancy occurring in any committee (by death,
resignation, removal, or otherwise) may be filled by a resolution adopted
by the Board of Directors.
E. MEETINGS. The time, place, and notice (if any), of the meetings
of any committee shall be determined by such committee.
F. MAJORITY VOTE. At meetings of any such committee, a majority of
the members of such committee designated by the Board of Directors shall
constitute a quorum for the transaction of business. A majority vote by
the members of such committee present at a meeting at which a quorum is
present shall constitute an act of such committee. If a quorum is not
present at a meeting of a committee, the member or members present may
adjourn the meeting from time to time, until a quorum is present, without
notice other than an announcement at the meeting.
G. COMPENSATION. By resolution of the Board of Directors, the
members of any committee may be paid their expenses, if any, of attendance
at each meeting of the committee and may be paid a fixed sum for
attendance at each meeting of the committee or a stated salary as a
member. No such payment shall preclude any member of any such committee
from serving the Corporation in any other capacity and receiving
compensation therefor.
H. PROCEDURE. Each committee shall keep regular minutes of its
proceedings and report the same to the Board of Directors when required.
The minutes of the proceedings of each committee shall be placed in the
minute book of the corporation.
9
I. ACTION WITHOUT MEETING. Any action required or permitted to be
taken at a meeting of a committee may be taken without a meeting if a
consent in writing, setting forth the actions so taken, is signed by all
members of the committee. Such consent shall have the same force and
effect as a unanimous vote at an actual meeting. The executed consent
shall be placed in the minute book.
J. RESPONSIBILITY. The designation of any committee and the
delegation of authority to it shall not operate to relieve the Board of
Directors, or any member thereof, of any responsibility imposed upon it or
him by law.
K. SUBCOMMITTEES. Except as otherwise specifically provided by the
Board of Directors, any committee shall have the power to appoint a
subcommittee from among its members and to delegate to any such
subcommittee any of its powers, duties, and functions.
IV
OFFICERS
4.1 TITLE. The officers of the Corporation shall be a Chairman of the
Board, a President, a Vice President, a Secretary, a Chief Financial Officer, a
Treasurer and such other officers and assistants as the Board of Directors shall
from time to time determine. Any two or more offices may be held by one person.
4.2 ELECTION. The officers of the Corporation, except such officers as may
be appointed in accordance with the provisions of this Paragraph 4.2 or
Paragraph 4.4 of this Article, shall be chosen annually by the Board of
Directors, and each shall hold his office until he shall resign or shall be
removed or otherwise disqualified to serve, or his successor shall be elected
and qualified. The Board of Directors may delegate to any officer or committee
the
10
power to appoint any subordinate officers (other than the Chairman of the Board,
President, Vice President, Secretary, Chief Financial Officer, and Treasurer),
committees or agents, to specify their duties and to determine their
compensation.
4.3 REMOVAL AND RESIGNATION. Any officer may be removed, either with or
without cause, by a majority of the Directors at the time in office, at any
regular or special meeting of the Board of Directors, or by any committee or
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
Board of Directors or to the President or Secretary of the Corporation. Any such
resignation shall take effect at the date of the receipt of such notice or at
any later time specified therein; and, unless otherwise specified therein, the
acceptance of such resignation shall not be necessary to make it effective.
4.4 VACANCIES. If the office of the Chairman of the Board, President,
Secretary, Chief Financial Officer, or Treasurer becomes vacant by reason of
death, resignation, removal, or otherwise, the Board of Directors shall elect a
successor who shall hold office for the unexpired term, and until his successor
is elected.
4.5 CHAIRMAN OF THE BOARD. The Chairman of the Board shall be the chief
executive officer of the Corporation and shall, subject to the control of the
Board of Directors, have the general powers and duties usually vested in the
chief executive officer of a corporation. The Chairman of the Board must be a
member of the Board of Directors. The Chairman of the Board shall preside at all
meetings of the Board of Directors and the stockholders of the Corporation and
shall have such other powers and duties as may be prescribed by the Board of
Directors.
11
4.6 PRESIDENT. The President of the Corporation shall be the chief
operating officer of the Corporation and shall, subject to the control of the
Board of Directors, have day to day supervision, direction, and control of the
business and officers of the Corporation and 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. Within this authority and in the course of his
duties, he shall:
A. Sign all certificates of stock of the Corporation, in conjunction
with the Secretary or Assistant Secretary, unless otherwise ordered by the
Board of Directors.
B. Make such contracts and take such actions as the ordinary conduct
of the Corporation's business may require, unless the Board of Directors
shall order otherwise by resolution.
C. Appoint and remove, employ and discharge, and prescribe the
duties and fix the compensation of all agents and employees of the
Corporation other than the duly appointed officers, subject to the
approval of the Board of Directors, and control all of the officers,
agents, and employees of the Corporation, subject to the direction of the
Board of Directors.
D. In the absence of the Chairman of the Board, preside at meetings
of the stockholders.
4.7 VICE PRESIDENT. In the absence of the President, or in the event of
his inability or refusal to act, a Vice President designated by the Board of
Directors shall perform the duties of the President and when so acting shall
have all of the powers of and be subject to the restrictions upon the President.
In the absence of a designation by the Board of Directors of a Vice President to
perform the duties of the President, or in the event of his absence or inability
12
or refusal to act, the Vice President who is present and who is senior in terms
of time as a Vice President of the Corporation so shall act. The Vice President
shall perform such other duties and have such other powers as the Board of
Directors may from time to time prescribe.
4.8 SECRETARY. The Secretary shall:
A. Sign, with the President or the Vice President, certificates for
shares of the Corporation.
B. Attest and keep at the principal office of the Corporation the
original or a copy of these Bylaws as amended or otherwise altered to
date.
C. Sign or attest such documents as may be required by law or the
business of the Corporation, and affix the corporate seal to such
instruments as may be necessary or proper.
D. See that all notices are duly given in accordance with the
provisions of these Bylaws or as required by law. In the absence or
disability of the Secretary, or his refusal or neglect to act, notice may
be given and served by an Assistant Secretary or by the President or Vice
President or by the Board of Directors.
E. In general, perform all duties incident to the office of
Secretary, and such other duties as from time to time may be assigned to
him by the Board of Directors.
F. In the absence or disability of the Secretary or his refusal or
neglect to act, the Assistant Secretary, or if there be none, the Chief
Financial Officer or the Treasurer, acting as Assistant Secretary, may
perform all of the functions of the Secretary. In the absence or inability
to act, or refusal or neglect to act of the Secretary, the Assistant
Secretary, and the Treasurer, any person thereunto authorized by the
President or Vice President or by the Board of Directors may perform the
functions of the Secretary.
13
4.9 CHIEF FINANCIAL OFFICER. The Chief Financial Officer shall be the
chief financial officer of the Corporation and shall, subject to the control of
the Board of Directors, have the general powers and duties usually vested in the
chief financial officer of a corporation and such other powers and duties as may
be prescribed by the Board of Directors.
4.10 TREASURER. The Treasurer shall have the responsibility for the
custody and control of all the funds and securities of the Corporation, and
shall have such other powers and duties as designated in these Bylaws and as
from time to time may be assigned to him by the Board of Directors. He shall
perform all acts incident to the position of Treasurer, subject to the control
of the President and the Board of Directors. The Treasurer shall, if required by
the Board of Directors, give such bond for the faithful discharge of his duties
in such form as the Board of Directors may require.
4.11 ASSISTANT SECRETARIES. Each Assistant Secretary shall have the usual
powers and duties pertaining to his office, together with such other powers and
duties as designated in these Bylaws and as from time to time may be designated
to him by the President or the Board of Directors. The Assistant Secretary shall
exercise the powers of the Secretary during that officer's absence or inability
or refusal to act.
4.12 ASSISTANT TREASURERS. Each Assistant Treasurer shall have the usual
powers and duties pertaining to his office, together with such other powers and
duties as designated in these Bylaws and as from time to time may be assigned to
him by the President or the Board of Directors. The Assistant Treasurer shall
exercise the powers of the Treasurer during that officer's absence or inability
or refusal to act.
14
4.13 OTHER DUTIES. In general, each officer shall perform all the duties
incident to his office and such other duties as from time to time may be
assigned to him by the Board of Directors.
V
INDEMNIFICATION; INSURANCE
5.1 PERSONS. The Corporation shall indemnify, subject to the further
provisions of this Article V, to the extent provided in Section 5.3, (i) any
person who is or was a Director, officer, agent, or employee of the Corporation,
and (ii) any person who serves or served at the Corporation's request as a
director, officer, agent, employee, manager, partner, or trustee of another
corporation, partnership, joint venture, trust, or other enterprise, who was or
is a party or threatened to be made a party to any threatened, pending, or
completed action, suit, or proceeding, whether civil, criminal, administrative,
or investigative (herein called a "proceeding").
5.2 STANDARD. A person named in Section 5.1 shall be indemnified only if
he has been successful, on the merits or otherwise, in the defense of the
proceeding, or in defense of any claim, issue or matter therein, or if: (i) in a
proceeding other than an action by or in the right of the Corporation, (a) 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 (b) in the case of a
criminal proceeding, had no reasonable cause to believe his conduct was
unlawful; or (ii) in the case of a proceeding by or in the right of the
Corporation to procure a judgment in its favor, (a) 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 (b) with respect to any claim, issue, or matter as to
which such person shall have been adjudged to be liable to the Corporation by a
court of competent jurisdiction after exhaustion of all appeals therefrom, or
with respect to amounts paid in
15
settlement to the Corporation, 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 as the court shall
deem proper.
5.3 EXTENT. A person named in Section 5.1 shall be indemnified by the
Corporation, if he satisfies the applicable standards of Section 5.2, against
expenses (including attorneys' fees), judgments, fines, and amounts paid in
settlement actually and reasonably incurred by the person in connection with the
proceeding, subject to the limitation of clause (ii)(b) of Section 5.2, if
applicable.
5.4 DETERMINATION. A determination that a person has satisfied the
standard for indemnification under Section 5.2 and a determination as to
reasonableness of expenses may be made by a court or may be made: (i) by the
stockholders of the Corporation; (ii) by the Board of Directors by a majority of
a quorum consisting of Directors of the Corporation who at the time of the vote
are not parties to the proceeding; or (iii) if such a quorum of Directors cannot
be obtained, or, even if obtainable a quorum of disinterested Directors so
directs, by independent legal counsel selected by the Board of Directors, in a
written opinion.
5.5 PRORATION. A determination under Section 5.4 may include a
determination that a person has met the standard as to some matters, but not as
to others, and may reasonably prorate amounts to be indemnified.
5.6 ADVANCE PAYMENT. Expenses (including attorneys' fees) incurred by an
officer or director in defending any civil, criminal, administrative, or
investigative proceeding shall be paid by the Corporation as they are incurred
in advance of the final disposition of such proceeding, and without any of the
determinations specified in Section 5.4, upon receipt of an
16
undertaking by or on behalf of such officer or director to repay such amount if
it is ultimately determined by a court of competent jurisdiction that such
officer or director is not entitled to be indemnified by the Corporation. Such
expenses incurred by other employees and agents may be so paid upon such terms
and conditions, if any, as the Board of Directors deems appropriate.
5.7 NONEXCLUSIVE AND CONSISTENT. The indemnification and advancements of
expenses provided by this Article V shall not be exclusive of any other rights
to which a person may be entitled by law, the Articles of Incorporation of the
Corporation, these Bylaws, agreement, vote of stockholders or disinterested
Directors, or otherwise. It is not the intent of the Corporation that any
provision of this Article V be inconsistent with the requirements and
limitations provided in Section 78.751 of the Nevada General Corporation Law and
to the extent that any provision hereof conflicts with any such requirement or
limitation, the provisions of Section 78.751 shall govern.
5.8 CONTINUATION. The indemnification and advance payments provided by
this Article V shall continue as to a person who has ceased to hold a position
named in Section 5.1 and shall inure to his heirs, executors, and
administrators.
5.9 INSURANCE. The Corporation may purchase and maintain insurance or make
other financial arrangements on behalf of any person who holds or who has held
any position named in 5.1, 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 has the authority to indemnify him against such
liability under this Article V or Section 78.751 of the Nevada General
Corporation Law. The Board of Directors shall determine the terms and conditions
of the insurance or other arrangement and the identity of the insurer or other
person participating in
17
an arrangement. No financial arrangement made pursuant to this Section 5.9 may
provide protection for a person adjudged by a court of competent jurisdiction,
after exhaustion of all appeals therefrom, to be liable for intentional
misconduct, fraud or a knowing violation of the law, except with respect to the
advancement of expenses or indemnification ordered by a court.
VI
EXECUTION OF INSTRUMENTS
6.1 AUTHORIZATION. The Board of Directors may, in its discretion,
determine the method and designate the signatory officer or officers, or other
person or persons to execute any corporate instrument or document, or to sign
the corporate name, without limitation, except where otherwise provided by law,
and such execution or signature shall be binding upon the Corporation.
VII
ISSUANCE AND TRANSFER OF SHARES
7.1 SHARE CERTIFICATES. The Corporation shall deliver certificates
representing all shares to which stockholders are entitled, which certificates
shall be in such form as the Board of Directors may provide. Each certificate
shall bear upon its face the statement that the Corporation is organized in
Nevada, the name in which it is issued, the number and class of shares and
series, if any, and the par value or a statement that the shares are without par
value. The certificates shall be signed by the President or a Vice President and
by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant
Secretary, which signatures may be in facsimile if the certificates are to be
countersigned by a transfer agent and a registrar (which may be the same
institution if such institution countersigns certificates in both capacities),
and
18
the seal of the Corporation shall be affixed thereto. The certificates shall
contain on the faces or backs such recitations or references as are required by
law.
7.2 REPLACEMENT OF CERTIFICATES. No new certificates shall be issued until
the former certificate for the shares represented thereby shall have been
surrendered and cancelled, except in the case of lost or destroyed certificates
for which the Board of Directors may order new certificates to be issued upon
such terms, conditions, and guaranties as the Board of Directors may see fit to
impose, including the filing of a sufficient indemnity bond.
7.3 TRANSFER OF SHARES. Shares of the Corporation may be transferred by
endorsement by the signature of the owner, his agent, attorney, or legal
representative, and the delivery of the certificate. The transferee in any
transfer of shares shall be deemed to have full notice of and consent to the
Bylaws of the Corporation to the same extent as if he had signed a written
assent thereto.
7.4 REASONABLE DOUBTS AS TO RIGHT TO TRANSFER. When a transfer of shares
is requested and there is reasonable doubt as to the right of the person seeking
the transfer, the Corporation or its transfer agent, before recording the
transfer of the shares on its books or issuing any certificate therefor, may
require from the person seeking the transfer reasonable proof of his right to
the transfer. If there remains a reasonable doubt of the right to the transfer,
the Corporation may refuse a transfer unless the person gives adequate security
or a bond of indemnity executed by a corporate surety or by two individual
sureties satisfactory to the Corporation as to form, amount, and responsibility
of sureties. The bond shall be conditioned to protect the Corporation, its
officers, transfer agents, and registrars, or any of them, against any loss,
damage, expense, or other liability to the owner of the shares by reason of the
recordation of the transfer or the issuance of a new certificate for shares.
19
VIII
RECORDS AND REPORTS
8.1 BOOKS AND RECORDS. All books and records provided for by statute shall
be open to inspection of the stockholders from time to time and to the extent
expressly provided by statute, and not otherwise. The Directors may examine such
books and records at all reasonable times.
8.2 FIXING RECORD DATES FOR MEETINGS. For the purpose of determining
stockholders entitled to notice of or to vote at any meeting of stockholders or
any adjournment thereof, the Board of Directors of the Corporation may fix a
record date, which record date shall not be more than sixty (60) days before the
date of such meeting. 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.
8.3 FIXING RECORD DATES FOR CONSENTS TO ACTION. Unless a record date shall
have previously been fixed, whenever action by stockholders is proposed to be
taken by consent in writing without a meeting of the stockholders, the Board of
Directors may fix a record date for the purpose of determining the stockholders
entitled to consent to that action.
8.4 FIXING RECORD DATES FOR DISTRIBUTIONS AND OTHER PURPOSES. In order
that the Corporation may determine the stockholders entitled to receive payment
of any dividend or other distribution or allotment of any rights or the
stockholders entitled to exercise any rights in respect of any change,
conversion or exchange of stock, or the for the purpose of any other lawful
action, the Board of Directors may fix a record date.
20
IX
AMENDMENT OF BYLAWS
9.1 AMENDMENT OF BYLAWS. The stockholders may amend or repeal these
Bylaws, or adopt new bylaws. The Board of Directors may also amend or repeal
these Bylaws, or adopt new bylaws, unless the stockholders in amending,
repealing, or adopting a particular bylaw expressly provide that the Board of
Directors may not amend or repeal that bylaw.
21
CERTIFICATE BY SECRETARY
The undersigned, being the secretary of the Corporation, hereby certifies
that the foregoing Bylaws were duly adopted by the first Board of Directors of
the Corporation effective on March 17, 1995.
IN WITNESS WHEREOF, I have signed this certification as of the _____ day
of _____________, 1995.
------------------------------------------
J.F. Ahart, Secretary
HO950440192
031795lsd1
10811-1
22
BYLAWS
OF
POWELL INDUSTRIES, INC.
TABLE OF CONTENTS
PAGE
----
I OFFICES........................................................ 1
1.1 Principal Office......................................... 1
1.2 Other Offices............................................ 1
II STOCKHOLDERS' MEETINGS......................................... 1
2.1 Place of Meetings........................................ 1
2.2 Annual Meetings.......................................... 1
2.3 Notice of Meeting........................................ 1
2.4 Special Meetings......................................... 2
2.5 Quorum................................................... 2
2.6 Voting................................................... 3
2.7 Proxies.................................................. 3
2.8 Consent of Absentees..................................... 3
2.9 Action Without Meeting................................... 3
III DIRECTORS...................................................... 4
3.1 Powers................................................... 4
3.2 Number and Qualification of Directors.................... 4
3.3 Term of Office........................................... 5
3.4 Vacancies................................................ 5
3.5 Removal of Directors..................................... 5
3.6 Place of Meetings........................................ 5
3.7 Regular Meetings......................................... 5
3.8 Special Meetings - Call and Notice....................... 5
3.9 Quorum................................................... 6
3.10 Board of Directors Action Without Meeting;
Telephone Meetings....................................... 6
3.11 Adjournment - Notice..................................... 6
3.12 Conduct of Meetings...................................... 7
3.13 Presumption of Assent.................................... 7
3.14 Compensation............................................. 7
3.15 Consent of Absentees..................................... 7
3.16 Chairman of the Board.................................... 8
3.17 Committees............................................... 8
IV OFFICERS....................................................... 10
4.1 Title.................................................... 10
4.2 Election................................................. 10
4.3 Removal and Resignation.................................. 11
4.4 Vacancies................................................ 11
i
4.5 Chairman of the Board.................................... 11
4.6 President................................................ 12
4.7 Vice President........................................... 12
4.8 Secretary................................................ 13
4.9 Chief Financial Officer.................................. 14
4.10 Treasurer................................................ 14
4.11 Assistant Secretaries.................................... 14
4.12 Assistant Treasurers..................................... 14
4.13 Other Duties............................................. 15
V INDEMNIFICATION; INSURANCE..................................... 15
5.1 Persons.................................................. 15
5.2 Standard................................................. 15
5.3 Extent................................................... 16
5.4 Determination............................................ 16
5.5 Proration................................................ 16
5.6 Advance Payment.......................................... 16
5.7 Nonexclusive and Consistent.............................. 17
5.8 Continuation............................................. 17
5.9 Insurance................................................ 17
VI EXECUTION OF INSTRUMENTS....................................... 18
6.1 Authorization............................................ 18
VII ISSUANCE AND TRANSFER OF SHARES................................ 18
7.1 Share Certificates....................................... 18
7.2 Replacement of Certificates.............................. 19
7.3 Transfer of Shares....................................... 19
7.4 Reasonable Doubts as to Right to Transfer................ 19
VIII RECORDS AND REPORTS............................................ 20
8.1 Books and Records........................................ 20
8.2 Fixing Record Dates for Meetings......................... 20
8.3 Fixing Record Dates for Consents to Action............... 20
8.4 Fixing Record Dates for Distributions and Other Purposes. 20
IX AMENDMENT OF BYLAWS............................................ 21
9.1 Amendment of Bylaws...................................... 21
ii
EXHIBIT 10.5
FOURTH AMENDMENT
TO
CREDIT AGREEMENT
THIS FOURTH AMENDMENT TO CREDIT AGREEMENT (this "Fourth Amendment") is
entered into effective as of April 30, 1995, by and between POWELL INDUSTRIES,
INC., a Nevada Corporation ("Borrower"), with its mailing address at P.O. Box
12818, Houston, Texas 77217, and NATIONSBANK OF TEXAS, N.A., a national banking
association, with its mailing address at 700 Louisiana Street, Houston, Texas
77002 ("Lender").
WITNESSETH:
WHEREAS, Lender and Borrower heretofore entered into that certain Credit
Agreement, dated as of July 15, 1991 as amended by that certain First Amendment
to Credit Agreement dated as of May 29, 1992, that certain Second Amendment to
Credit Agreement dated as of April 30, 1993 and that certain Third Amendment to
Credit Agreement dated as of April 30, 1994 (as so amended, the "Credit
Agreement") pursuant to which Lender agreed to make loans to Borrower from time
to time subject to and upon terms, covenants and conditions contained therein;
and
WHEREAS, Lender and Borrower now desire to amend the Credit Agreement in
certain particulars.
NOW THEREFORE, in consideration of these premises, the promises, mutual
covenants and agreements contained in this Fourth Amendment, and fully intending
to be legally bound by this Fourth Amendment, Lender and Borrower hereby agree
as follows:
1. DEFINITIONS.
Unless otherwise specifically defined herein, all defined terms used
in this Fourth Amendment shall have their respective meanings set forth in
the Credit Agreement.
2. AMENDMENTS.
a. Exhibit 1.2 to the Credit Agreement is hereby amended by deleting
it in its entirety and substituting in lieu thereof Exhibit 1.2 attached
hereto.
a. Subsection 1.5(b) of the Credit Agreement is hereby amended to
read in its entirety as follows:
-1-
"(b) Any Eurodollar Rate Advance from time to time outstanding shall
bear interest from the first day of the Interest Period applicable thereto
until the last day of such Interest Period at a rate per annum equal to
the lesser of (i) the Highest Lawful Rate, or (ii) the Eurodollar Rate
applicable to such Interest Period plus the Eurodollar Margin."
c. Exhibit 1.7 to the Credit Agreement is hereby amended by deleting
it in its entirety and substituting in lieu thereof Exhibit 1.7 hereto.
d. The first six sentences of Section 2.1 of the Credit Agreement
are amended to read in their entirety as follows:
"Prior to April 30, 1995, Lender has issued for the account of
Borrower those certain Letters of Credit set forth on EXHIBIT 2.1A hereto
(the "EXISTING LETTERS OF CREDIT"). The Existing Letters of Credit shall
be subject to the same terms and conditions of this Agreement affecting
Letters of Credit (as defined below). In addition, Lender may from time to
time, until May 1, 1997 (such date, or such later date as may be
determined by Lender in its sole and absolute discretion upon the prior
written request of Borrower, the "LETTER OF CREDIT MATURITY DATE"), in its
sole and absolute discretion, upon the request of Borrower, if the
applicable conditions precedent specified in SUBSECTIONS 3.1(B) AND 3.1(C)
and SUBSECTIONS 3.2(B), 3.2(C) AND 3.2(E) shall have been satisfied with
respect to such requested Letter of Credit, issue either documentary
letters of credit or standby letters of credit ("LETTERS OF CREDIT") in
the name of Borrower on behalf of any of its wholly-owned Subsidiaries. At
no time shall Lender have any obligation or commitment to issue Letters of
Credit hereunder. Rather, this ARTICLE II is intended solely to set forth
procedures and terms which shall govern in connection with any Letter of
Credit if Lender elects, in its sole and absolute discretion, to issue any
Letter of Credit. The aggregate undrawn face amount of all Letters of
Credit at any time outstanding, together with the aggregate undrawn face
amount of the Existing Letters of Credit, shall not exceed FIVE MILLION
DOLLARS ($5,000,000)."
e. Exhibit 2.1A to the Credit Agreement is hereby amended by
deleting it in its entirety and substituting in lieu thereof Exhibit 2.1A
attached hereto.
f. Section 8.1 of the Credit Agreement is hereby amended by
inserting the following definition in its proper alphabetic location:
"'EURODOLLAR Margin' shall mean the rate of 1.25% per annum."
3. REPRESENTATIONS AND WARRANTIES.
By the execution of this Fourth Amendment, Borrower represents and
-2-
warrants that (i) except as heretofore disclosed to Lender, the
representations and warranties stated in the Credit Agreement are true and
correct as of the date hereof (and for purposes hereof, the references to
October 31, 1990 and January 31, 1991 in Section 4.1 of the Credit
Agreement shall be amended to be references to October 31, 1994 and
January 31, 1995, respectively) and (ii) neither an Event of Default, as
defined in the Credit Agreement, nor any event which with the lapse of
time or notice or both could become an Event of Default, has occurred and
is continuing as of the date hereof.
4. EFFECTIVENESS.
a. Except to the extent specifically amended and supplemented
hereby, all of the terms, conditions and provisions of the Credit
Agreement shall remain unmodified, and the Credit Agreement, as amended
and supplemented by this Fourth Amendment, is confirmed as being in full
force and effect.
b. All references to the Credit Agreement herein or in any other
document or instrument between Borrower and Lender shall hereafter be
construed to be references to the Credit Agreement as modified by this
Fourth Amendment.
c. Concurrently herewith, Borrower will execute and deliver to
Lender the Note in the form of Exhibit 1.2 attached hereto.
5. COUNTERPARTS.
This Fourth Amendment may be executed in any number of counterparts,
each of which when executed and delivered shall be deemed an original, but
all of which constitute one instrument. In making proof of this Fourth
Amendment, it shall not be necessary to produce or account for more than
one counterpart thereof signed by each of the parties hereto.
6. GOVERNING LAW.
This Fourth Amendment shall be governed by and construed in
accordance with the laws of the State of Texas, except to the extent that
Lender has greater rights or remedies under Federal law, whether as a
national bank or otherwise, in which case such choice of Texas law shall
not be deemed to deprive Lender of such rights and remedies as may be
available under Federal law.
-3-
7. NOTICE OF FINAL AGREEMENT.
THIS FOURTH AMENDMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE
FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
IN WITNESS WHEREOF, the parties hereto have executed this Fourth Amendment
as of the date and year first above written.
BORROWER:
POWELL INDUSTRIES, INC.
By: _______________________________________
Name: _____________________________________
Title: ____________________________________
LENDER:
NATIONSBANK OF TEXAS, N.A.
By: _______________________________________
Name: _____________________________________
Title: ____________________________________
CONSENT AND REAFFIRMATION
OF GUARANTORS
POWELL ELECTRICAL MANUFACTURING COMPANY, POWELL-PROCESS SYSTEMS, INC., U.S.
TURBINE CORP., UNIBUS, INC., DELTA-UNIBUS CORP., POWELL-ESCO COMPANY, TRANSDYN
CONTROLS, INC., and POWELL INNOVATIVE BREAKER TECHNOLOGIES, INC. are guarantors
(individually a "Guarantor" collectively the "Guarantors') under a certain
guaranty (the "Guaranty") related
-4-
to the Credit Agreement and the other Loan Documents.
For good and valuable consideration, the sufficiency of which is hereby
acknowledged, each Guarantor hereby consents to the foregoing Fourth Amendment,
and hereby declares to and agrees with the Lender that the Guaranty is and shall
continue in full force and effect for the benefit of the Lender with respect to
the Obligations under the Credit Agreement and the other Loan Documents, that
there are no offsets, claims or defenses of any Guarantor with respect to the
Guaranty or any other Loan Document, that the Guaranty is not released,
diminished or impaired in any way by the above Fourth Amendment, and that the
Guaranty is hereby ratified and confirmed in all respects. Each Guarantor hereby
acknowledges that without this consent and reaffirmation, the Lender would not
execute the above Fourth Amendment.
GUARANTORS:
POWELL ELECTRICAL MANUFACTURING
COMPANY
By: _______________________________________
Name: _____________________________________
Title: ____________________________________
POWELL-PROCESS SYSTEMS, INC.
By: _______________________________________
Name: _____________________________________
Title: ____________________________________
U.S. TURBINE CORP.
By: _______________________________________
Name: _____________________________________
Title: ____________________________________
-5-
UNIBUS, INC.
By: _______________________________________
Name: _____________________________________
Title: ____________________________________
DELTA-UNIBUS CORP.
By: _______________________________________
Name: _____________________________________
Title: ____________________________________
POWELL-ESCO COMPANY
By: _______________________________________
Name: _____________________________________
Title: ____________________________________
TRANSDYN CONTROLS, INC.
By: _______________________________________
Name: _____________________________________
Title: ____________________________________
POWELL INNOVATIVE BREAKER
TECHNOLOGIES, INC.
By: _______________________________________
Name: _____________________________________
Title: ____________________________________
-6-
EXHIBIT 1.2
AMENDED AND RESTATED
PROMISSORY NOTE
$10,000,000.00 Dated: April 30, 1995
FOR VALUE RECEIVED, the undersigned, Powell Industries, Inc., a Nevada
corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of NationsBank
of Texas, N.A. (the "Lender") the principal sum of Ten Million and No/100
Dollars ($10,000,000.00) (the "Commitment") or, if less, the aggregate unpaid
principal amount of all Advances outstanding, on the earlier to occur of (i) May
1, 1997 (the "Stated Maturity Date") or (ii) the termination of the Commitment
by Lender under SECTION 6.2 of the Credit Agreement (such earlier date herein
referred to as the "Termination Date"); together with interest on any and all
Advances remaining unpaid hereunder from time to time outstanding from the date
hereof until said Advances are paid in full, at the rates set forth in the
Credit Agreement, payable on the dates set forth in the Credit Agreement and,
with respect to interest on any overdue Advances (and, to the extent permitted
by applicable Laws, all accrued unpaid interest on such unpaid Advances),
payable on demand, at the lesser of (i) the Highest Lawful Rate (as defined in
the Credit Agreement); or (ii) the Default Rate (as defined in the Credit
Agreement).
Both principal and interest are payable in lawful money of the United
States of America to Lender at Lender's banking house at 901 Main Street,
Dallas, Texas 75202 in immediately available funds, or at such other place as
may be from time to time designated by Lender by notice to Borrower.
This Promissory Note is the Note referred to in, and is entitled to the
benefits of, the Credit Agreement dated as of July 15, 1991 as amended by that
certain First Amendment to Credit Agreement dated May 29, 1992, that certain
Second Amendment to Credit Agreement dated April 30, 1993, that certain Third
Amendment to Credit Agreement dated April 30, 1994 and that certain Fourth
Amendment to Credit Agreement dated April 30, 1995 (as amended, extended,
supplemented or restated from time to time, the "Credit Agreement") between
Borrower and Lender, which Credit Agreement, among other things, contains
provisions for acceleration of the maturity hereof upon the happening of certain
stated events and also for prepayments on account of principal hereof prior to
the maturity hereof upon the terms and conditions therein specified.
If following the occurrence of an Event of Default this Promissory Note is
placed in the hands of an attorney for collection, or if all or any part of the
Obligations (as defined in the Credit Agreement) are proved, established or
collected in any court or in connection with any proceeding for bankruptcy,
receivership, debtor relief, probate, or any other court proceeding, then in
either such event Borrower and all endorsers, sureties, and guarantors of this
Promissory Note jointly and severally agree to pay reasonable attorney's fees,
costs, and expenses and collection costs to lender, or to any other holder
hereof, in addition to all other amounts payable hereunder.
Borrower and any and all endorsers, guarantors and sureties severally
waive grace,
1
demand, presentment for payment, notice of dishonor or default, protest, notice
of protest, notice of intent to accelerate, notice of acceleration and diligence
in collecting and bringing of suit against any party hereto, and agree to all
renewals, extensions or partial payments hereon and to any release or
substitution of security hereof, in whole or in part, with or without notice,
before or after maturity.
THIS PROMISSORY NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF TEXAS AND THE LAWS OF THE UNITED STATES OF
AMERICA.
IN WITNESS WHEREOF, Borrower has caused this Promissory Note to be
executed and delivered by its officer thereunto duly authorized effective as of
the date first above written.
POWELL INDUSTRIES, INC.
By: _______________________________________
Name: _____________________________________
Title: ____________________________________
2
EXHIBIT 1.7
FORM OF NOTICE OF ELECTION
[Date]
NationsBank of Texas, N.A.
901 Main Street
Dallas, TX 75202
Gentlemen:
Pursuant to that certain Credit Agreement dated as of July 15, 1991 (as amended,
extended, supplemented or restated from time to time, the "Agreement," the terms
defined therein being used herein as therein defined) between Powell Industries,
Inc. ("Borrower"), and NationsBank of Texas, N.A. ("Lender"), Borrower hereby;
1. Requests that an Advance be made under the Agreement (the "Proposed
Advance"), which request is made pursuant to SECTION 1.7 of the
Agreement.
2. In connection with the Proposed Advance, set forth below is the
information required by SECTION 1.7 of the Agreement with respect to
such Proposed Advance:
a. Information applicable to the Proposed Advance:
i. The interest rate applicable to the Proposed Advance is
the ____________ Rate.
ii. The date of the Proposed Advance is
____________________.
iii. The aggregate principal amount of the Proposed Advance
is $________________.
b. Certifies that the amount of the Proposed Advance does not
exceed the amount available under the Commitment.
c. Requests that the proceeds of the Proposed Advance be
deposited in the following account maintained by Borrower with
Lender (enter account number):_______________________.
Dated:________________________, 199___.
Very truly yours,
POWELL INDUSTRIES, INC.
By: __________________________________
Name: ________________________________
Title: _______________________________
By: __________________________________
Name: ________________________________
Title: _______________________________
EXHIBIT 2.1A
OUTSTANDING LETTERS OF CREDIT AS OF 4/18/95
- - --------------------------------------------------------------------------------
START EXPIRATION AMOUNT
L/C # BENEFICIARY DATE DATE OUTSTANDING
- - --------------------------------------------------------------------------------
117976 TAIWAN POWER COMPANY 3-30-92 9-30-95 $ 57,539.00
- - --------------------------------------------------------------------------------
119470 NATIONAL COMMERCIAL BANK 5-5-92 7-20-95 $ 226,743.70
- - --------------------------------------------------------------------------------
125457 ISRAEL ELECTRIC COMPANY 12-17-92 11-30-95 $ 252,037.00
- - --------------------------------------------------------------------------------
131006 LIBERTY MUTUAL INSURANCE 9-1-93 9-1-95 $ 234,872.00
- - --------------------------------------------------------------------------------
134230 ISRAEL ELECTRIC COMPANY 11-12-93 9-3095 $ 24,370.00
- - --------------------------------------------------------------------------------
135587 TAIWAN POWER COMPANY 1-28-94 2-1-96 $ 49,776.00
- - --------------------------------------------------------------------------------
135594 KENNECOT UTAH COPPER 2-10-94 7-1-96 $ 138,590.50
SMELTER
- - --------------------------------------------------------------------------------
135646 KIEWET/STONE AND WEBSTER JV 4-29-94 6-30-96 $ 25,998.60
- - --------------------------------------------------------------------------------
139700 BLACK AND VEATCH 5-19-94 11-30-95 $ 36,615.90
INTERNATIONAL
- - --------------------------------------------------------------------------------
139709 TAIWAN POWER COMPANY 6-9-94 8-31-95 $ 56,853.00
- - --------------------------------------------------------------------------------
139718 DUPAGE WATER COMMISSION 6-23-94 8-28-95 $ 69,391.65
- - --------------------------------------------------------------------------------
142697 HUNGARIAN OIL AND GAS 8-29-94 5-1-95 $ 25,000.00
- - --------------------------------------------------------------------------------
142711 NATIONAL COMMERCIAL BANK 9-9-94 10-14-96 $ 45,128.80
- - --------------------------------------------------------------------------------
142742 MUSTANG ENGINEERING 10-25-94 6-1-95 $ 118,472.00
- - --------------------------------------------------------------------------------
145379 UMW CORPORATION SD 2-8-95 6-30-95 $1,179,206.50
- - --------------------------------------------------------------------------------
145364 UMW CORPORATION 1-11-95 6-30-95 $ 393,069.00
- - --------------------------------------------------------------------------------
145398 UMW CORPORATION SD 2-28-95 6-30-95 $1,057,617.00
- - --------------------------------------------------------------------------------
145406 THE HUNGARIAN OIL AND GAS 3-13-95 5-1-95 $ 25,000.00
- - --------------------------------------------------------------------------------
TOTAL
$4,016,280.65
- - --------------------------------------------------------------------------------
5
1,000
3-MOS
OCT-31-1995
APR-30-1995
1,238
0
37,395
851
19,301
72,560
43,772
27,755
95,866
30,451
0
105
0
0
54,249
95,866
41,398
41,398
32,459
32,459
6,616
0
145
2,178
720
0
0
0
0
1458
0.14
0
