AYDIN CORPORATION
Telephone 700 Dresher Road
(215) 657-7510 P.O. Box 349
FAX Horsham, PA 19044
(215) 657-3830 U.S.A.
Telex
685 1211 AYDIN UW
March 31, 1995
(VIA EDGAR)
SECURITIES AND EXCHANGE COMMISSION
450 Fifth Street, N.W.
Washington, DC 20549
Re: Form 10-K
File No. 1-7203
Gentlemen:
We enclose for filing Aydin Corporation's Annual Report on
Form 10-K for the year ended December 31, 1994. The filing fee
of $250.00 was paid by Fedwire on March 27, 1995.
The financial statements in the Annual Report on Form 10-K do
not reflect any changes in accounting principles or practices or
in the method of applying any such principles or practices as
compared with the financial statements which appear in the Annual
Report for 1993.
Sincerely,
/s/ Robert A. Clancy
Robert A. Clancy
Secretary and
Corporate Counsel
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
_X_ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended __December 31, 1994__.
OR
___ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from _________ to ______________.
Commission file number ____1-7203____.
AYDIN CORPORATION
_______________________________________________________
(Exact name of registrant as specified in its charter)
Delaware 23-1686808
_______________________________________ ___________________________
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
700 DRESHER ROAD
HORSHAM, PENNSYLVANIA 19044
_______________________________________ __________________________
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (215) 657-7510
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
______________________________ _________________________
Common Stock, $1 Par Value New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
NONE
_________________
(Title of Class)
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 by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K. _X_
The aggregate market value of 4,379,935 shares of Common Stock
held by non-affiliates, computed using the closing price as of
March 21, 1995, was $61,866,582.
Number of shares of Common Stock outstanding as of March 21, 1995
- 5,001,088.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the following documents are incorporated by
reference:
- 1994 Annual Report to Stockholders of Aydin Corporation
(hereinafter, "Annual Report") - Parts I and II
- Proxy Statement of Aydin Corporation, dated March 21,
1995 (hereinafter, "Proxy Statement") - Parts II and III
INDEX TO FORM 10-K
-----------------------------------------------------------------
This index lists the requirements of Form 10-K and the page
number in this Form 10-K (or in the Annual Report or the Proxy
Statement) where each item can be found.
PART I
Item 1 Business 10-K, pp. 2-6
Item 2 Properties 10-K, p. 6
Item 3 Legal Proceedings 10-K, p. 6
Item 4 Submission of Matters to a Vote of
Security Holders 10-K, p. 6
Executive Officers of the Registrant 10-K, pp. 6-7
PART II
Item 5 Market for the Registrant's Common Annual Report,
Equity and Related Stockholder Matters p. 24
Item 6 Selected Financial Data Annual Report,
p. 23
Item 7 Management's Discussion and Analysis
of Financial Condition and Results of Annual Report,
Operation p. 22
Item 8 Financial Statements and Supplementary Annual Report,
Data pp. 14-21, 23
Item 9 Changes In and Disagreements With
Accountants on Accounting and Proxy
Financial Disclosure Statement,p.17
PART III
Item 10 Directors and Executive Officers of the Proxy
Registrant Statement,
pp. 3-5, 11-12
10-K, pp. 6-7
Item 11 Executive Compensation Proxy
Statement,
pp. 5-9, 10
Item 12 Security Ownership of Certain Proxy
Beneficial Owners and Management Statement,
p. 2-3
Item 13 Certain Relationships and
Related Transactions 10-K, p. 9
PART IV
Item 14 Exhibits, Financial Statement Schedules 10-K, pp.9-10
and Reports on Form 8-K Exhibits
PART I
ITEM 1. BUSINESS
(a) General Development of Business
Aydin Corporation (the "Company" or "Aydin") was incorporated
under the laws of the State of Delaware in September, 1967.
The Company consists domestically of three major operating and
two smaller support divisions, and three foreign operating
subsidiaries. The divisions and subsidiaries are profit
centers each with engineering, manufacturing, marketing and
accounting functions. In addition, a new division (Aydin
Telecom) is presently being formed.
(b) Financial Information About Industry Segments
The Company operates predominantly in the electronics
manufacturing industry. Therefore, no segment information is
reported.
(c) Narrative Description of Business
The following table sets forth the percentage of the Company's
total revenue contributed by each of its classes of products
(among which overlapping does occur) for each of the last three
years:
1994 1993 1992
____ ____ ____
(1) Telecommunications 30% 27% 25%
(2) Airborne & Ground Data
Acquisition and Avionics 29 22 19
(3) Computer Equipment and Software 22 22 23
(4) Radars, Radar Simulation, Integration
and Modernization 5 8 9
(5) Command, Control and
Communications Systems 14 21 24
____ ____ ____
Totals 100% 100% 100%
____ ____ ____
____ ____ ____
As stated above, the Company operates predominantly in the
electronics manufacturing industry, and all information set
forth below is with respect to the Company's business as a
whole. The Company designs, manufactures, and sells five
classes of products as set forth above and as described below:
(1) Telecommunications
Aydin engineers, manufactures and sells microwave digital
and analog transmission equipment and systems for
commercial and military applications which include wireless
and hybrid fiber coax telephony communications equipment,
cellular range extender, line-of-site (LOS) microwave
radios, satellite earth stations, TDMA terminals and high
power transmitters, portable communications terminals,
troposcatter networks and wired network access products.
Aydin also installs turnkey telecom systems.
(2) Airborne and Ground Data Acquisition and Avionics
Aydin provides airborne equipment and systems to gather
critical information and to process, format and transmit to
the ground through communication data links from a
communications satellite, spacecraft, aircraft and/or
missile. Aydin's terminals receive this data on the ground
and analyze it further for display to track and control.
(Page 2)
(3) Computer Equipment and Software
Aydin sells a line of commercial, high-resolution CRT
monitors ranging in size from 10 inches to 29 inches.
Workstations are also offered, mostly for the process
control industry. Aydin also offers ruggedized and
TEMPEST-qualified versions of the same for military
applications. Software is written by Aydin for commercial
and military purposes for specific applications such as
radar simulation, modernization and integration; command,
control and communications; and air traffic control
systems.
(4) Radars, Radar Simulation, Integration and Modernization
Aydin has developed a modern 3-dimensional tactical air
defense radar and has completed and/or is working on
several projects in radar simulation, radar integration and
automation of manual radars. Modernization of previously
designed radars is also done by Aydin.
(5) Command, Control and Communications Systems
Aydin provides turnkey command, control and communications
(C3) systems with or without radars for defense systems,
both fixed and mobile.
The Company's products and systems are sold directly by Company
sales personnel and manufacturers' representatives. Sales
personnel for the Company are located in many cities across the
United States as well as at key major military bases, with
corporate marketing located in the Washington, D.C. area. With
respect to exports, sales efforts are conducted by its
international subsidiaries, its international sales network and
manufacturers' representatives in many countries.
The Company maintains standard product lines and systems sold
by catalogue, although it generally does not maintain an
inventory of finished goods. A significant portion of current
sales is attributable to such standard products, modifications
thereof, and turnkey communications systems using these
products. Another portion of sales is attributable to special,
made-to-order equipment based on customer's specific
requirements.
The Company's customers include U.S. and foreign communications
and electronic and aerospace firms, electric utilities,
regulated and unregulated telephone organizations, major
transportation organizations, other industrial and financial
concerns and process control companies, research laboratories,
universities, large defense contractors, foreign governments,
the U.S. Government through various agencies of the Department
of Defense, and the National Aeronautics and Space
Administration.
A breakdown of sales for the last three years including sales
to major customers who accounted for 10% or more of sales is as
follows:
1994 1993 1992
____________ ____________ ____________
U.S. Government Agencies (direct
and indirect), principally
Department of Defense (1) $ 42,015,000 $ 38,600,000 $ 39,347,000
Export and foreign sales
including equipment sold to
other U.S. companies for
export (1) (2) (3) 75,166,000 78,532,000 78,578,000
U.S. commercial and industrial
business 25,260,000 24,343,000 27,296,000
____________ ____________ ____________
TOTAL NET SALES $142,441,000 $141,475,000 $145,221,000
____________ ____________ ____________
____________ ____________ ____________
<FN>
(1) The U.S. Government, the Government of Turkey and CTI
(Argentina) were the only customers to whom sales exceeded
10% of consolidated sales during any of the past three
years. Sales to the Government of Turkey amounted to
$24,888,000 in 1994, $45,134,000 in 1993 and $48,738,000 in
1992. Sales to CTI (Argentina) amounted to $15,739,000 in
1994.
(2) Includes foreign sales of $37,167,000 for 1994, $22,958,000
for 1993, and $19,349,000 for 1992.
(3) A breakdown of total export and foreign sales by geographic
area follows in section (d) below.
Raw materials for the Company's business consist of
manufactured components and parts. The Company's raw materials
are presently available in adequate supply on the open market.
The Company holds no material patents, trademarks, licenses,
franchises or concessions.
The Company's operations are not seasonal to any material
extent.
As stated above, although the Company maintains standard
product lines and systems sold by catalogue, it generally does
not maintain a significant level of finished goods inventory.
However, the Company maintains an adequate level of raw
materials inventory so that it will be able to meet initial
delivery requirements of customers. The Company has had no
material difficulty in obtaining goods from suppliers. The
Company does not provide rights to return its products, and
generally does not provide extended payment terms to customers.
The backlog of unfilled orders at December 31, 1994 was $134
million as compared to $155 million at December 31, 1993.
Approximately 40% of the 1994 backlog is not reasonably
expected to be fulfilled within the current year.
The backlog includes approximately $54 million for a command,
control and communications project for the Government of Turkey
for which most of the work is to be done over the next two
years. This contract was signed in June, 1990 and became
effective in October, 1990.
All contracts with the U.S. Government and some of the foreign
governments are subject to cancellation at the convenience of
the government. In the event a contract with the U.S.
Government is so terminated, the Armed Services Procurement
Regulations provide that the Company shall be reimbursed for
expenses incurred and shall be entitled to reasonable profits.
The greater portion of the Company's business is obtained by
competitive bidding, while some is obtained through sole source
negotiation. In the domestic marketplace, the Company competes
with some major U.S. companies from time to time; however, some
of the competition in the U.S. comes from companies which are
similar in size or smaller than Aydin. In the international
marketplace, Aydin competes with major European and Japanese
companies in addition to U.S. firms. A number of such
competitors are larger than Aydin with greater financial
resources, while some are similar to or smaller than Aydin.
Technical capability, reputation, price, ability to meet
delivery schedules and reliability are the principal
competitive factors. No single competitor offers the same
range of products and systems as Aydin. Depending on the
particular product itself and the requirements of the contract
documents, the number of firms competing with Aydin generally
ranges from one to ten.
Estimated amounts spent during 1994, 1993, and 1992 on Company-
sponsored research and development activities, and customer-
sponsored research activities relating to the development of
new products, services or techniques or the improvement of
existing products, services or techniques are as follows:
(page 4)
1994 1993 1992
__________ __________ __________
Company-sponsored research
and development on direct
cost basis $5,159,000 $4,782,000 $5,275,000
Customer-sponsored research
and development activities $4,859,000 $4,125,000 $5,943,000
The Company along with others is responsible for the cost of
cleanup at a site leased by the Company prior to 1984 under an
order of the State of California. The cost to date for the
cleanup of the California site over the past ten years has been
approximately $5.8 million. Settlement has been reached with
three of four insurance carriers for approximately $6.7 million
which was received during 1993 and applied to the cleanup costs
previously incurred and cost to go. A court has granted a
declaratory judgement requiring the fourth carrier to pay all
cleanup costs in excess of the $6.7 million already received.
This judgement is being appealed by the fourth carrier.
Management believes the ultimate resolution of this entire
matter will not have a materially adverse effect on the
financial position or results of operations.
The Company employs approximately 1,500 persons, with
operations concentrated principally in the Philadelphia and San
Jose areas. Employer-employee relations are considered to be
satisfactory.
(d) Financial Information About Foreign and Domestic Operations
and Export Sales
The Company had no significant foreign operations prior to 1991
although a $210 million contract from the Government of Turkey
became effective in October, 1990 with approximately 35% of
this contract being performed by the Company's Turkish
subsidiary. Foreign assets included in the consolidated
balance sheet amounted to $33.7 million, $22.9 million, and
$23.4 million at December 31, 1994, 1993, and 1992,
respectively. Of these amounts, $6.7 million, $10.0 million,
and $19.1 million at December 31, 1994, 1993, and 1992,
respectively, is cash and short term investments of the
Company's Turkish subsidiary consisting mainly of U.S. dollar
denominated interest-bearing time deposits. In addition, at
December 31, 1994 cash and short-term investments at the
Argentina subsidiary was $1.9 million. Foreign sales and
pretax income for 1994 amounted to $37.2 million and $6.7
million, respectively, of which $21.1 million and $2.1 million,
respectively, was for the Argentina subsidiary. Foreign sales
and pretax income for 1993 amounted to $23.0 million and $3.9
million, respectively. Foreign sales and pretax income for
1992 amounted to $19.3 million and $3.3 million, respectively.
The Company's domestic operations include sales derived from
customers or projects located in areas of the world outside the
United States. Export and foreign sales for 1994, 1993, and
1992 by geographic area are set forth below:
1994 1993 1992
___________ ___________ ___________
Asia $ 6,788,000 $ 8,688,000 $ 2,553,000
Africa 2,553,000 2,301,000 1,969,000
Europe 41,465,000 59,426,000 68,980,000
North America 1,852,000 528,000 869,000
South America 22,125,000 6,745,000 3,901,000
Other 383,000 844,000 306,000
___________ ___________ ___________
Total export and
foreign sales $75,166,000 $78,532,000 $78,578,000
___________ ___________ ___________
___________ ___________ ___________
On a percentage basis, export and foreign sales (direct and
indirect) accounted for approximately 53% of total sales in
1994, 56% in 1993, and 54% in 1992. A majority of such export
and foreign sales were in the telecommunications field.
Licenses are required from U.S. Government agencies for most of
the Company's export products. The Company and its foreign
subsidiaries may be adversely affected by certain risks
(page 5)
generally associated with foreign contracts and operations,
including ownership and control limitations, currency
fluctuations, restrictions on repatriation of profits,
difficulty in the enforcement of judgments, late delivery
penalties, potential political or labor instability and general
worldwide economic conditions. However, such factors have not
had a material effect on the Company's operations to date, and
management believes that the risks involved in such foreign
business are no greater than the normal risks of any other
portion of the Company's sales. The Company has generally been
able to protect itself against foreign credit risks through
contract provisions, advance payments and irrevocable letters
of credit in its favor. However, it should be noted that
foreign contracts are sometimes subject to foreign laws.
ITEM 2. PROPERTIES
The Company's total plant capacity is approximately 700,000 square
feet of administrative and production facilities, 540,000 of which
it owns and the balance of which it leases. Three owned properties
totalling 192,000 square feet are subject to mortgages and six
owned properties totalling 348,000 square feet are unencumbered.
All major leased properties are held under leases expiring between
1998 and 1999, most with renewal options. The principal owned
properties are two administrative/production facilities in
Fort Washington, Pennsylvania, and five more in the Greater
Philadelphia area, and one in the San Jose area. In addition, the
Company maintains its corporate headquarters in Horsham,
Pennsylvania, and numerous sales offices within and outside the
U.S. The administrative and production facilities occupied by the
Company are well maintained and suitable for its operations, and
include plant area, warehouse space, and management, engineering
and clerical offices. The plants of each of the manufacturing
operations generally contain machine shops, assembly areas, testing
facilities and packing and shipping departments in addition to the
engineering and laboratory areas.
ITEM 3. LEGAL PROCEEDINGS
On January 5, 1994, the Company reached settlement agreements with
the U.S. Army and the Department of Justice ("DOJ") with reference
to the AN/GRC-222 microwave radio contract. Under the terms of the
agreement, the U.S. Army will reinstate the radio contract by
withdrawing its previous termination for default issued
November 30, 1993. Further, the investigation and all possible
charges against the Company by the DOJ are settled.
On January 6, 1994, pursuant to the terms of settlement with DOJ,
the Company entered a plea of guilty to the falsification of
testing data, charges to which two of its low level employees
previously pled guilty to in March 1993, and the plea was accepted
by the court (U.S. District Court for the Northern District of
California). The Company is reinstated on its AN/GRC-222 microwave
radio contract with all of its previous terms and conditions.
Further, the Company withdrew its contract claims, is doing
additional work for the Army at no additional cost, and paid $2
million as an added consideration. The total impact on pretax
income of this settlement was approximately $14,819,000, which has
been charged to the 1993 fourth quarter earnings. The additional
work and the related expenditures will be spread over a period of
three years or longer.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of security holders
during the Fourth Quarter of 1994.
EXECUTIVE OFFICERS OF THE REGISTRANT
The names, ages, year first elected as officer or appointed as
general manager, positions and recent prior experience of all
current executive officers of the Company as of March 21, 1995, are
as follows:
AYHAN HAKIMOGLU, CHAIRMAN AND C.E.O. (1)
67. First elected 1967. Chairman of the Board of Directors;
President of the Company through February 1992 and from March
1994 through December 1994.
(page 6)
DONALD S. TAYLOR, PRESIDENT
51. 1995. President of the Company and President Aydin Corp.
(East) since January 1995. From 1970 through 1994 held
various positions with Computer Sciences Corporation, the last
13 years as Vice President of its Integrated Systems Division.
JOHN F. VANDERSLICE, SENIOR VICE PRESIDENT
53. 1983. Senior Vice President of the Company. President
of the Vector Division (manufactures airborne data
communications products) since November 1982. Previously, he
was Manager of Engineering (1969-1972), Operations Manager
(1972-1973), and Vice President of Operations (1973-1982) of
the Vector Division.
DEMIRHAN HAKIMOGLU, VICE PRESIDENT (2)
55. 1992. Vice President of the Company. Chairman of the
Board and CEO of the Company's foreign subsidiary,
Aydin Yazilim A.S., since July 1990. Prior to that, served in
various engineering and management positions with various
divisions of the Company since 1968 (except for a two year
period, 1978-1980).
MATS J. OFVERBERG, VICE PRESIDENT (3)
54. 1990. Vice President of the Company and President of
Aydin Corporation (West) Division from December 1990 to
November 1993 and from March 14, 1994. Prior to his election
as an officer, he served as Vice President of Engineering of
the Company's Radar & EW Division and Executive Vice President
of the Company's Aydin (West) group of divisions from February
1987.
HERBERT WELBER, CONTROLLER AND ASSISTANT TREASURER
59. 1986. Controller and Assistant Treasurer of the Company
since August 1986. Previously, he was Controller and Vice
President of Controls Division (manufactures display
terminals) since August 1981.
Except for Dr. Taylor, each of the above officers was elected at
the Annual Meeting of the Board of Directors on April 29, 1994.
Dr. Taylor commenced his employment on January 3, 1995 and was
elected President of the Company as of that date. Officers are
elected each year after the Annual Meeting of Stockholders. Each
serves subject to the discretion of the Board of Directors until
his successor shall be elected and qualified or until his death,
disqualification, resignation or removal in the manner provided in
the Company's By-Laws. There are no family relationships among any
executive officers of Aydin, except for Ayhan Hakimoglu and
Demirhan Hakimoglu who are brothers.
__________________
(1) From July 1971 to May 1972 did not serve as an officer of the
Company, although he remained as a director.
(2) First elected Vice President in February 1991, and resigned
that position in July 1991. Re-elected Vice President in
February 1992.
(3) Retired November 3, 1993, and accepted re-employment
effective March 14, 1994.
(page 7)
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
Incorporated by reference is the information under the heading,
"Common Stock Prices" and "Stockholder and Dividend Information" on
page 24 of the Annual Report. The Company has no present plans to
pay any cash dividends. Future cash dividends, if any, will depend
on business conditions. There are no restrictions that prevent the
Company from paying future cash dividends, except that the
Company's Board of Directors had determined in December 1992 that
no cash dividend will be declared or paid for the foreseeable
future, and except for maintaining compliance with certain
covenants of a Credit Agreement for the funding of a standby Letter
of Credit, as described more fully in Note D to the Financial
Statements.
ITEM 6. SELECTED FINANCIAL DATA
Incorporated by reference is the information under the heading,
"Selected Financial Data" on page 23 of the Annual Report.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Incorporated by reference is the information under the heading,
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" on page 22 of the Annual Report.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Incorporated by reference are the Consolidated Financial Statements
of Aydin Corporation and the related Notes to Consolidated
Financial Statements, and Report of Independent Auditors on pages
14 to 21, inclusive, and the data under the heading, "Quarterly
Financial Data" on page 23, of the Annual Report.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
Incorporated by reference is the information under the heading,
"Independent Auditors" on page 17 of the Proxy Statement.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Incorporated by reference is the information under the heading,
"Election of Directors" on pages 3-5 of the Proxy Statement, the
information under the heading, "Compliance With Section 16(a) of
the Exchange Act" on pages 11 and 12 of the Proxy Statement, and
the information under the heading, "Executive Officers of the
Registrant" on pages 6 and 7, Part I of this 10-K.
ITEM 11. EXECUTIVE COMPENSATION
Incorporated by reference is the information under the heading,
"Compensation of Executive Officers", "Option Grants in Last
Fiscal, "Aggregated Option Exercises and Fiscal Year-End Option
Values", "Ten-Year Option Repricing", "Employment Contracts and
Termination of Employment Arrangements", and "Compensation
Committee Interlocks and Insider Participation" on pages 5-9 and 10
of the Proxy Statement.
(page 8)
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
Incorporated by reference is the information under the headings,
"Beneficial Ownership of Common Stock" and "Beneficial Ownership by
Management" on pages 2 and 3 of the Proxy Statement.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
FORM 8-K
The Company files as part of this report the following documents:
(a) 1. Financial Statements
The following is a list of the Consolidated Financial
Statements of Aydin Corporation and Subsidiaries which have
been incorporated by reference from the Annual Report as set
forth in Item 8 - "Financial Statements and Supplementary
Data":
Consolidated Balance Sheets, as of
December 31, 1994 and 1993.
Consolidated Statements of Operations for the years
ended December 31, 1994, 1993 and 1992.
Consolidated Statements of Cash Flows for the years
ended December 31, 1994, 1993 and 1992.
Notes to Consolidated Financial Statements.
Report of Independent Auditors.
2. Schedules
The following is a list of the Schedules of Aydin
Corporation and Subsidiaries filed as part of this report:
Schedule II - Valuation and Qualifying Accounts
Report of Independent Auditors
All other schedules not listed above are omitted because
they are inapplicable or are not required.
3. Exhibits
The following is a list of Exhibits filed as part of this report:
3(i) Restated Certificate of Incorporation
3(ii) By-Laws
10.1 Restricted Stock Agreement
10.2 Form of Individual Non-Qualified Stock Option
10.3 The 1981 Incentive Stock Option Plan
10.4 The 1983 Incentive Stock Option Plan
10.5 The 1984 Non-Qualified Stock Option Plan
(page 9)
10.6 The 1994 Incentive Stock Option Plan
13 Annual Report to Security Holders
21 Subsidiaries of Registrant
23.1 Consent of Independent Auditors, Grant Thornton LLP
23.2 Consent of Independent Auditors, KPMG Peat Marwick LLP
27 Financial Data Schedule (electronic filing only)
99.1 Report of Independent Auditors, Grant Thornton LLP
99.2 Report of Independent Auditors, KPMG Peat Marwick LLP
All other exhibits not listed above are omitted because they are
inapplicable.
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the Fourth Quarter of 1994.
AYDIN CORPORATION
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEAR S 1994, 1993, AND 1992
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
Balance at ADDITIONS Deductions - Balance at
Beginning Charged to Charged to Describe End of
of Period Costs and Other Period
DESCRIPTION Expenses Accounts -
Describe
Year 1994
Deducted from asset accounts:
Allowance for doubtful accounts $ 331,000 $ 43,000 $ 51,000 (1) $ 323,000
Raw materials inventory reserve 2,029,000 1,240,000 819,000 (2) 2,450,000
Totals $2,360,000 $1,283,000
$ 870,000 $2,773,000
Year 1993
Deducted from asset accounts:
Allowance for doubtful accounts $ 118,000 $ 289,000 $ 76,000 (1) $ 331,000
Raw materials inventory reserve 1,821,000 1,899,000 1,691,000 (2) 2,029,000
Totals $1,939,000 $2,188,000 $1,767,000 $2,360,000
Year 1992
Deducted from asset accounts:
Allowance for doubtful accounts $ 126,000 $ 108,000 $ 116,000 (1) $ 118,000
Raw materials inventory reserve 1,506,000 883,000 568,000 (2) 1,821,000
Totals $1,632,000 $ 991,000 $ 684,000 $1,939,000
<FN>
(1) Uncollectible accounts written off, net of recoveries.
(2) Obsolete inventory written off.
(page 10)
SIGNATURES
Pursuant to the requirements of section 13 or 15(d) 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.
Aydin Corporation
Dated: March 29, 1995 By: /s/ Robert A. Clancy
Robert A. Clancy
Secretary
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf
of the registrant and in the capacities and on the dates indicated.
By: /s/ Ayhan Hakimoglu Dated: March 29, 1995
Ayhan Hakimoglu
Chief Executive Officer and
Chairman of the Board of Directors
By: /s/ Donald S. Taylor Dated: March 29, 1995
Donald S. Taylor
President and Director
By: /s/ John F. Vanderslice Dated: March 29, 1995
John F. Vanderslice
Vice President and Director
By: /s/ Herbert Welber Dated: March 29, 1995
Herbert Welber
Controller and Assistant Treasurer
Principal Accounting Officer
By: /s/ Jay L. Landis Dated: March 29, 1995
Jay L. Landis
Treasurer
Principal Financial Officer
By: /s/ I. Gary Bard Dated: March 29, 1995
I. Gary Bard
Director
By: /s/ Nev A. Gokcen Dated: March 29, 1995
Nev A. Gokcen
Director
By: /s/ Harry D. Train, II Dated: March 29, 1995
Harry D. Train, II
Director
EXHIBIT INDEX
Exhibit Description
No. of Exhibit
3(i) Restated Certificate of Incorporation
3(ii) By-Laws
10.1 Restricted Stock Agreement
10.2 Form of Individual Non-Qualified Stock Option
10.3 The 1981 Incentive Stock Option Plan
10.4 The 1983 Incentive Stock Option Plan
10.5 The 1984 Non-Qualified Stock Option Plan
10.6 The 1994 Incentive Stock Option Plan
13 Annual Report to Security Holders
21 Subsidiaries of Registrant
23.1 Consent of Independent Auditors, Grant Thornton LLP
23.2 Consent of Independent Auditors, KPMG Peat Marwick LLP
27 Financial Data Schedule (electronic filing only)
99.1 Report of Independent Auditors, Grant Thornton LLP
99.2 Report of Independent Auditors, KPMG Peat Marwick LLP
Exhibit 3(i)
RESTATED CERTIFICATE OF INCORPORATION
of
AYDIN CORPORATION
FIRST. The name of the corporation is
AYDIN CORPORATION
SECOND. The address of its registered office in the State of
Delaware is 32 Loocherman Square, Suite L-100, Dover, County of Kent.
The name of its registered agent at such address is United States
Corporation Company.
THIRD. The nature of the business or purposes to be conducted
or promoted is any lawful act or activity for which corporations may
be organized under the General Corporation Law of Delaware.
FOURTH. The total number of shares of Common Stock which the
corporation shall have authority to issue is Seven Million Five
Hundred Thousand (7,500,000) and the par value of each of such shares
is One Dollar ($1.00) amounting in the aggregate to Seven Million Five
Hundred Thousand Dollars ($7,500,000). These shares shall have no
preemptive or preferential rights of subscription concerning further
issuance or authorization of the corporation's shares.
FIFTH. In furtherance and not in limitation of the powers
conferred by statute, the board of directors is expressly authorized:
To make, alter or repeal by-laws of the corporation.
To authorize and cause to be executed mortgages and liens upon
the real and personal property of the corporation.
To set apart out of any of the funds of the corporation
available for dividends a reserve or reserves for any proper purpose
and to abolish any such reserve in the manner in which it was created.
By a majority of the whole board, to designate one or more
committees, each committee to consist of two 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. Any such
committee, to the extent provided in the resolution or in the by-laws
of the corporation, 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 authorize the seal of the corporation to be
affixed to all papers which may require it; provided, however, the by-
laws may provide that in the absence or disqualification of any member
of such committee or committees, 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.
When and as authorized by the affirmative vote of the holders
of a majority of the stock issued and outstanding having voting power
given at a stockholders' meeting duly called upon such notice as is
required by statute, or when authorized by the written consent of the
holders of a majority of the voting stock issued and outstanding, to
sell, lease or exchange all or substantially all of the property and
assets of the corporation, including its good will and its corporate
franchises, upon such terms and conditions and for such consideration,
which may consist in whole or in part of money or property including
shares of stock in, and/or other securities of, any other corporation
or corporations, as its board of directors shall deem expedient and
for the best interests of the corporation.
SIXTH. A director of this corporation shall not be personally
liable to the corporation or its stockholders for monetary damages for
breach of fiduciary duty as a director, except for liability (i) for
any beach of the director's duty of loyalty to the corporation or its
stockholders, (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, (iii)
under Section 174 of the Delaware General Corporation Law, or (iv) for
any transaction from which the director derived an improper personal
benefit.
SEVENTH. Meetings of stockholders may be held within or
without the State of Delaware, as the by-laws may provide. The books
of the corporation may be kept (subject to any provision contained in
the statutes) outside the State of Delaware at such place or places as
may be designated from time to time by the board of directors or in
the by-laws of the corporation. Elections of directors need not be by
written ballot unless the by-laws of the corporation shall so provide.
EIGHTH. The corporation reserves the right to amend, alter,
change or repeal any provision contained in this certificate of
incorporation, in the manner now or hereafter prescribed by statute,
and all rights conferred upon stockholders herein are granted subject
to this reservation.
Exhibit 3(ii)
AYDIN CORPORATION
BY-LAWS
(Last Amended July 29, 1994)
*******
ARTICLE I
OFFICERS
Section 1. The registered office shall be in the City of
Dover, County of Kent, State of Delaware.
Section 2. The corporation may also have offices at such
other places both within and without the State of Delaware as the
Board of Directors may from time to time determine or the business of
the corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. All meetings of the stockholders for the election
of Directors shall be held in the City of Fort Washington, State of
Pennsylvania, at such place as may be fixed from time to time by the
Board of Directors, or at such other place either within or without
the State of Delaware as shall be designed from time to time by the
Board of Directors and stated in the notice of the meeting. Meetings
of stockholders for any other purpose may be held at such time and
place, within or without the State of Delaware, as shall be stated in
the notice of the meeting or in a duly executed waiver of notice
thereof.
Section 2. Annual meetings of stockholders shall be held on
the third Thursday of April if not a legal holiday, and if a legal
holiday, then on the next secular day following at 3:00 P.M. or at
such other date and time as shall be designated from time to time by
the Board of Directors and stated in the notice of the meeting, at
which they shall elect by a plurality vote a board of Directors, and
transact such other business as may properly be brought before this
meeting.
Section 3. Written notice of the annual meeting stating the
place, date and hour of the meeting shall be given to each stockholder
entitled to vote at such meeting not less than ten nor more than fifty
days before the date of the meeting.
Section 4. The officer who has charge of the stock ledger of
the corporation shall prepare and make, at least ten 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
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.
Section 5. Special meetings of the stockholders, for any
purpose or purposes, unless otherwise prescribed by statute or by the
certificate of incorporation, may be called by the Chairman of the
Board and shall be called by the Chairman of the Board or Secretary at
the request in writing of a majority of the Board of Directors, or at
the request in writing of stockholders owning a majority in amount of
the entire capital stock of the corporation issued and outstanding and
entitled to vote. Such request shall state the purpose or purposes of
the proposed meeting.
Section 6. Written notice of a special meeting stating the
place, date and hour of the meeting and the purpose or purposes for
which the meeting is called, shall be given not less than ten nor more
than fifty days before the date of the meeting, to each stockholder
entitled to vote at such meeting.
Section 7. Business transacted at any special meeting of
stockholders shall be limited to the purposes stated in the notice.
Section 8. 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 meeting of the
stockholders for the transaction of business except as otherwise
provided by statute or by the certificate of incorporation. If,
however, such quorum shall not be present or represented at any
meeting of the stockholder, 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 shall be present or represented. At
such adjourned meeting at which a quorum shall be present or
represented any business may be transaction which might have been
transacted at the meeting as originally notified. If the adjournment
is for more than thirty 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.
Section 9. When a quorum is present at any meeting, the vote
of the holder of a majority of the stock having voting power present
in person or represented by proxy shall decide any question brought
before such meeting, unless the question is one upon which by express
provision of the statutes or of the certificate of incorporation, a
different vote is required in which case such express provision shall
govern and control the decision of such question.
Section 10. Each stockholder shall at every meeting of the
stockholders be entitled to one vote in person or by proxy for each
share of the capital stock having voting power held by such
stockholder, but no proxy shall be voted on after three years from its
date, unless the proxy provides for a longer period.
Section 11. Whenever the vote of stockholders at a meeting
thereof is required or permitted to be taken for or in connection with
any corporate action, by any provision of the statutes, the meeting
and vote of stockholders may be dispensed with if all of the
stockholder who would have been entitled to vote upon the action if
such meeting were held shall consent in writing to such corporate
action being taken; or if the certificate of incorporation authorizes
the action to be taken with the written consent of the holders of less
than all of the stock who would have been entitled to vote upon the
action if a meeting were held, then on the written consent of the
stockholders having not less than such percentage of the total number
of votes as may be authorized in the certificate of incorporation;
provided that in no case shall the written consent be by the holders
of stock having less than the minimum percentage of the total vote
required by statute for the proposed corporate action, and provided
that prompt notice must be given to all stockholders of the taking of
corporate action without a meeting and by less than unanimous written
consent.
ARTICLE III
DIRECTORS
Section 1. The number of Directors which shall constitute the
whole Board shall be six (6). The Directors shall be elected at the
annual meeting of the stockholders, except as provided in Section 2 of
this Article, and each Director elected shall hold office until his
successor is elected and qualified. Directors need not be
stockholders.
Section 2. Vacancies and newly created directorships
resulting from any increase in the authorized number of Directors may
be filled by a majority of the Directors then in office, though less
than a quorum, or by a sole remaining director, and the Directors so
chosen shall held office until the next annual election and until
their successors are duly elected and shall qualify, unless sooner
displaced. If their are no Directors in office, then an election of
Directors may be held in the manner provided by statute. If, at the
time of filling any vacancy or any newly created directorship, the
Directors then in office shall constitute less than a majority of the
whole board (as constituted immediately prior to any such increase),
the Court of Chancery may, upon application of any stockholder or
stockholders holding at least ten 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.
Section 3. The business of the corporation shall be managed
by its Board of Directors which may exercise all such powers of the
corporation and do all such lawful acts and things as are not by
statute or by the Certificate of Incorporation or by these by-laws
directed or required to be exercised or done by the stockholders.
MEETING OF THE BOARD OF DIRECTORS
Section 4. The Board of Directors of the corporation may hold
meetings, both regular and special, either within or without the State
of Delaware.
Section 5. 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.
Section 6. 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.
Section 7. Special meetings of the Board may be called by the
Chairman of the Board on one day's notice to each director, either
personally, by telephone, by mail or by telegram; special meetings
shall be called by the Chairman of the Board or Secretary in like
manner and on like notice on the written request of two directors.
Section 8. At all meetings of the Board, a majority of the
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 shall not be present at any
meeting of the Board of Directors the directors present thereat may
adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present.
Section 9. Unless otherwise restricted by the certificate of
incorporation or these by-laws, 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.
COMMITTEES OF DIRECTORS
Section 10. The Board of Directors may, by resolution passed
by a majority of the whole board, designate one or more committees,
each committee to consist of two 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. Any such
committee, to the extent provided in the resolution, 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 authorize the
seal of the corporation to be affixed to all papers which may require
it; provided, however, that in the absence or disqualification of any
member of such committee or committees, the member of 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. Such committee or committees
shall have such name or names as may be determined from time to time
by resolution adopted by the Board of Directors.
Section 11. Each committee shall keep regular minutes of its
meetings and report the same to the Board of Directors when required.
COMPENSATION OF DIRECTORS
Section 12. The Directors may be paid their expenses, if any,
of attendance at each meeting of the Board of Directors and may be
paid a fixed sum for attendance at each meeting of the Board of
Directors or a stated salary as Director. No such payment shall
preclude any Director from serving the corporation in any other
capacity and receiving compensation therefor. Members of special or
standing committees may be allowed like compensation for attending
committee meetings.
ARTICLE IV
NOTICES
Section 1. Whenever, under the provisions of the statutes or
of the Certificate of Incorporation or of these by-laws, notice is
required to be given to any Director or stockholder, it shall not be
construed to mean personal notice, but such notice may be given in
writing, by mail, addressed to such Director or stockholder, at his
address as it appears on the records of the corporation, with postage
thereon prepaid, and such notice shall be deemed to be given at the
time when the same shall be deposited in the United States mail.
Notice to Directors may also be given by telegram, or by telephone.
Section 2. Whenever any notice is required to be given under
the provisions of the statutes or of the Certificate of Incorporation
or of these by-laws, a waiver thereof in writing, signed by the person
or persons entitled to said notice, whether before or after the time
stated therein, shall be deemed equivalent thereto.
ARTICLE V
OFFICERS
Section 1. The officers of the corporation shall be chosen by
the Board of Directors and shall be a Chairman of the Board, a
President, an Executive Vice President, a Secretary and a Treasurer.
The Board of Directors may also choose additional Vice Presidents, and
one or more Assistant Secretaries and Assistant Treasurers. Any
number of offices may be held by the same person, unless the
certificate of incorporation of these by-laws otherwise provide.
Section 2. The Board of Directors at its first meeting after
each annual meeting of stockholders shall choose a Chairman of the
Board, a President, an Executive Vice President, a Secretary and a
Treasurer, and may choose additional Vice Presidents, and one or more
Assistant Secretaries and Assistant Treasurers.
Section 3. The Board of Directors may appoint such other
officers and agents as it shall deem necessary who shall hold their
offices for such terms and shall exercise such powers and perform such
duties as shall be determined from time to time by the Board.
Section 4. The salaries of all officers and agents of the
corporation shall be fixed by the Board of Directors.
Section 5. The officers of the corporation shall hold office
until their successors are chosen and qualified. Any officer elected
or appointed by the Board of Directors may be removed at any time by
the affirmative vote of a majority of the Board of Directors. Any
vacancy occurring in any office of the corporation shall be filled by
the Board of Directors.
CHAIRMAN OF THE BOARD
Section 6. The Chairman of the Board shall be the chief
executive officer of the corporation and, subject to the control of
the Board of Directors, shall have the general direction and
supervision over the business and affairs of the corporation. He
shall preside at all meetings of the stockholders and of the Board of
Directors and shall be an ex officio member of all committees and
shall see that all orders and resolutions of the Board of Directors
are carried into effect. He shall participate in determining the
policies to be followed by the corporation and shall perform such
other duties as the Board of Directors shall from time to time
request.
THE PRESIDENT
Section 7. The President shall undertake such duties as may
be delegated to him by the Chairman of the Board and shall also have
such other powers and duties as the Board of Directors may from time
to time determine. In the absence of the Chairman of the Board or in
the event of his inability or refusal to act, the President shall
perform the duties of the Chairman of the Board, and when so acting,
shall have all the powers of and be subject to all the restrictions
upon the Chairman of the Board.
THE VICE PRESIDENTS
Section 8. In the absence of the President or in the event of
his inability or refusal to act, the Executive Vice President, (or in
the event of the absence or inability of or refusal to act by the
Executive Vice President and in the further event there be more than
one Vice President, the Vice Presidents in the order designated, or in
the absence of any designation, then in the order of their election)
shall perform the duties of the President, and when so acting, shall
have all the powers of and be subject to all the restrictions upon the
President. Such powers of and restrictions upon the President shall
include the performance of the duties of the Chairman of the Board in
the further event that the Chairman is absent or is unable or refuses
to act. Vice Presidents shall perform such other duties and have such
other powers as the Board or Directors may from time to time
prescribe.
THE SECRETARY AND ASSISTANT SECRETARY
Section 9. The Secretary shall attend all meetings of the
Board of Directors and all meetings of the stockholders and record all
the proceedings of the meetings of the corporation and of the Board of
Directors in a book to be kept for that purpose and shall perform like
duties for the standing committees when required. He shall give, or
cause to be given, notice of all meetings of the stockholders and
special meetings of the Board of Directors, and shall perform such
other duties as may be prescribed by the Board of Directors or
Chairman of the Board, under whose supervision he shall be. He shall
have custody of the corporate seal of the corporation and he, or an
Assistant Secretary, shall have authority to affix the same to any
instrument requiring it and when so affixed, it may be attested by his
signature or by the signature of such Assistant Secretary. The Board
of Directors may give general authority to any other officer to affix
the seal of the corporation and to attest the affixing by his
signature.
Section 10. The Assistant Secretary, or if there be more than
one, the Assistant Secretaries in the order determined by the Board of
Directors (or if there is no such determination, then in the order of
their election), shall, in the absence of the Secretary or in the
event of his 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 may from
time to time prescribe.
THE TREASURER AND ASSISTANT TREASURERS
Section 11. The Treasurer shall have the custody of the
corporate funds and securities and shall keep full and accurate
accounts if receipts and disbursements in books belonging to the
corporation and shall deposit all moneys and other valuable effects in
the name and to the credit of the corporation in such depositories as
may be designated by the Board of Directors.
Section 12. He shall disburse the funds of the corporation as
may be ordered by the Board of Directors, taking proper vouchers for
such disbursements, and shall render to the Chairman of the Board and
the Board of Directors, at its regular meetings, or when the Board of
Directors so requires, an account of all his transactions as Treasurer
and of the financial conditions of the corporation.
Section 13. If required by the Board of Directors, he shall
give the corporation a bond (which shall be renewed every six years)
in such sum and with such surety or sureties as shall be satisfactory
to the Board of Directors for the faithful performance of the duties
of his office and for the restoration to the corporation, in case of
his death, resignation, retirement or removal form office, of all
books, papers, vouchers, money and other property of whatever kind in
his possession or under his control belonging to the corporation.
Section 14. The Assistant Treasurer, or if there shall be more
than one, the Assistant Treasurers in the order determined by the
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 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 may from
time to time prescribe.
ARTICLE VI
CERTIFICATES OF STOCK
Section 1. Every holder of stock in the corporation 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, the President or a Vice President and the Treasurer or an
Assistant Treasurer, or the Secretary or an Assistant Secretary of the
corporation, certifying the number of shares owned by him in the
corporation.
Section 2. Where a certificate is countersigned (1) by a
transfer agent other than the corporation or its employee, or, (2) by
a registrar other than the corporation or its employee, the signatures
of the officers of the corporation may be facsimiles. In case any
officer who has signed or whose facsimile signature has been placed
upon a certificate shall have ceased to be such officer before such
certificate is issued, it may be issued by the corporation with the
same effect as if he were such officer at the date of issue.
LOST CERTIFICATES
Section 3. The Board of Directors may direct a new
certificate or certificates to be issued in place of any certificate
or certificates theretofore issued by the corporation alleged to have
been lost, stolen or destroyed, upon the making of an affidavit of
that fact by the person claiming the certificate of stock to be lost,
stolen or destroyed. When authorizing such issue of a new certificate
or certificates, the Board of Directors may, in its discretion and as
a condition precedent to the issuance thereof, require the owner of
such lost, stolen or destroyed certificate or certificates, or his
legal representative, to advertise the same in such manner as it shall
require and/or to give the corporation a bond in such sum as it may
direct as indemnity against any claim that may be made against the
corporation with respect to the certificate alleged to have been lost,
stolen or destroyed.
TRANSFERS OF STOCK
Section 4. 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, assignment 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 upon its books.
FIXING RECORD DATE
Section 5. In order that the corporation may determine the
stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, or to express consent to
corporate action in writing without a meeting, or entitled to receive
payment of any dividend or other distribution or allotment of any
rights, or entitled to exercise any rights in respect of any change,
conversion or exchange of stock or for the purpose of any other lawful
action, the Board of Directors may fix, in advance, a record date,
which shall not be more than sixty nor less than ten days before the
date of such meeting, nor more than sixty days prior to any other
action. A determination of stockholders of record entitled to notice
of or to vote at a meeting of stockholders shall apply to any
adjournment of the meeting; provided, however, that the Board of
Directors may fix a new record date for the adjourned meeting.
REGISTERED STOCKHOLDERS
Section 6. The corporation shall be entitled to recognize the
exclusive right of a person registered on its books as the owner of
shares to receive dividends, and to vote as such owner, and to hold
liable for calls and assessments a person registered on its books as
the owner of shares, and shall not be bound to recognize any equitable
or other claim to or interest in such share or shares on the part of
any other person, whether or not it shall have express or other notice
thereof, except as otherwise provided by the laws of Delaware.
ARTICLE VII
GENERAL PROVISIONS
DIVIDENDS
Section 1. Dividends upon the capital stock of the
corporation, subject to the provisions of the Certificate of
Incorporation, if any, may be declared by the Board of Directors at
any regular or special meeting, pursuant to law. Dividends may be
paid in cash, in property, or in shares of the capital stock, subject
to the provisions of the Certificate of Incorporation.
Section 2. Before payment of any dividend, there may be set
aside out of any funds of the corporation available for dividends such
sum or sums as the Directors from time to time, in their absolute
discretion, think proper as a reserve or reserves to meet
contingencies, or for equalizing dividends, or for repairing or
maintaining any property of the corporation, or for such other purpose
as the Directors shall think conducive to the interest of the
corporation, and the Directors may notify or abolish any such reserve
in the manner in which it was created.
ANNUAL REPORT
Section 3. (a) 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.
(b) On or before 120 days from the close of each
fiscal year, the Board of Directors shall cause to be delivered to
each stockholder of record an audited statement of financial condition
of the corporation as at the close of such fiscal year, together with
a statement of operations, including profit and loss for such fiscal
year. For the purposes of subsection (b), it will be sufficient if
such report is mailed in the ordinary course of business to those
shareholder of record as at the date on which the record of
shareholders has been taken for the purpose of the annual meeting,
pursuant to Section 5 of ARTICLE VI of these by-laws.
CHECKS
Section 4. All checks or demands for money and notes of the
corporation shall be signed by such officer or officers or such other
person or persons as the Board of Directors may from time to time
designate.
FISCAL YEAR
Section 5. The fiscal year of the corporation shall be fixed
by resolution of the Board of Directors.
SEAL
Section 6. The corporate seal shall have inscribed thereon
the name of the corporation, the year of its organization and the
words "Corporate Seal, Delaware."
The seal may be used by causing it or a facsimile thereof to be
impressed or affixed or reproduced or otherwise.
INDEMNIFICATION
Section 7. (a) Directors, Officers and Employees of the
Corporation. Every person now or hereafter serving as a Director,
Officer or Employee of the Corporation shall be indemnified and held
harmless by the corporation from and against any and all loss, cost,
liability and expense that may be imposed upon or incurred by him in
connection with or resulting from any claim, action, suit, or
proceeding, civil or criminal, in which he may become involved, as a
party or otherwise, by reason of his being or having been a director,
officer or employee of the corporation, whether or not he continues to
be such at the time such loss, cost, liability or expense shall have
been imposed or incurred. As used herein, the term "loss, cost,
liability and expense" shall include, but shall not be limited to,
counsel fees and disbursements and amounts of judgments, fines or
penalties against, and amounts paid in settlement by, any such
director, officer or employee; provided, however that no such
director, officer or employee shall be entitled to claim such
indemnity: (1) with respect to any matter as to which there shall
have been a final adjudication that he has committed or allowed some
act or omission, (a) otherwise than in good faith in what he considers
to be the best interests of the corporation, and (b) without
reasonable cause to believe that such act or omission was proper and
legal; or (2) in the event of a settlement of such claim, action,
suit, or proceeding unless (a) the court having jurisdiction thereof
shall have approved of such settlement with knowledge of the indemnity
provided herein, or (b) a written opinion of independent legal
counsel, selected by or in manner determined by the Board of
Directors, shall have been rendered substantially concurrently with
such settlement, to the effect that it was not probable that the
matter as to which indemnification is being made would have resulted
in a final adjudication as specified in clause (1) above and that the
said loss, cost, liability or expense may properly be borne by the
corporation. A conviction or judgment (whether based on a plea of
guilty or nolo contendere or its equivalent, or after trial) in a
criminal action, suit or proceeding shall not be deemed an
adjudication that such director, officer or employee has committed or
allowed some act or omission as hereinabove provided if independent
legal counsel, selected as hereinabove set forth, shall substantially
concurrently with such conviction or judgement give to the corporation
a written opinion that such director, officer or employee was acting
in good faith in what he considered to be the best interests of the
corporation or was not without reasonable cause to believe that such
act or omission was proper and legal.
(b) Directors, Officers and Employees of Subsidiaries.
Every person (including a director, officer or employee of the
corporation) who at the request of the corporation acts as a director,
officer or employee of any other corporation in which the corporation
owns shares of stock or of which it is a creditor shall be indemnified
to the same extent and subject to the same conditions that the
directors, officers, and employees of the corporation are indemnified
under the preceding paragraph, except that the amount of such loss,
cost, liability or expense paid to any such director, officer or
employee shall be reduced by and to the extent of any amounts which
may be collected by him from such other corporation.
(c) Miscellaneous. The provisions of this section shall
cover claims, actions, suits and proceedings, civil or criminal,
whether now pending or hereafter commenced and shall be retroactive to
cover acts or omissions or alleged acts or omissions which heretofore
have taken place. In the event of death of any person having a right
of indemnification under the provisions of this section, such right
shall inure to the benefit of his heirs, executors, administrators and
personal representatives. If any part of this section should be found
to be invalid or ineffective in any proceeding, the validity and
effect of the remaining provisions shall not be affected.
(d) Indemnification Not Exclusive. The foregoing right of
indemnification shall not be deemed exclusive of any other right to
which those indemnified may be entitled, and the corporation may
provide additional indemnity and rights to its directors, officers or
employees.
ARTICLE VIII
AMENDMENTS
Section 1. These by-laws may be altered or repealed at any
regular meeting of the stockholders or of the Board of Directors or at
any special meeting of the stockholders or of the Board of Directors
if notice of such alteration or repeal be contained in the notice of
such special meeting.
Exhibit 10.1
AYDIN CORPORATION
RESTRICTED STOCK AGREEMENT
THIS AGREEMENT, made on this 3rd day of January, 1995, by and
between AYDIN CORPORATION, a Delaware corporation (hereinafter called
the "Company"), and DONALD S. TAYLOR (hereinafter called the
"Employee").
WITNESSETH:
WHEREAS, the Employee has been elected by the Board of
Directors of the Company (the "Board") as President of the Company
effective January 3, 1995; and
WHEREAS, the Company and the Employee have agreed to certain
terms and conditions of employment of the Employee as set forth in the
Company's offer of employment letter (the "Employment Letter") dated
September 29, 1994; and
WHEREAS, the Employment Letter provides for a one-time bonus
for joining the Company of a restricted stock award (the "Award") of
10,000 shares of common stock of the Company (the "Common Stock") that
will vest over a four-year period; and
WHEREAS, the Board has authorized the granting of the Award
conditioned upon the execution by the Company and the Employee of this
Agreement, thereby allowing the Employee to acquire a proprietary
interest in the Company in order that the Employee will have a further
incentive for remaining with and increasing his efforts on behalf of
the Company or one of its Affiliates;
NOW Therefore, in consideration of the foregoing and of the
mutual covenants hereafter set forth and other good and valuable
consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto hereby agree as follows:
1. The Company hereby awards to the Employee as a separate
incentive in connection with his employment and not in lieu of any
salary or other compensation for his services, an Award covering
10,000 shares (the "Shares") of Common Stock on the terms and
conditions set forth in this Agreement.
2. The Shares covered by the Award shall vest in four equal
installments of 2,500 Shares each on the first, second, third and
fourth anniversary, respectively, of the date of this Agreement as
long as the Employee remains employed by the Company or one of its
Affiliates until such dates.
3. Upon notification that the New York Stock Exchange has
authorized listing of the Shares, a stock certificate evidencing the
Shares shall be registered on the Company's books in the name of the
Employee as of the date of this Agreement. Such certificate shall
contain a legend restricting the transferability of such certificate
and the Shares represented thereby, and referring to the terms and
conditions approved by the Board and applicable to the Shares
represented by the certificate (the "Restrictive Legend"). While the
Shares are restricted and subject to the Delaware General Corporation
Law, the Employee shall be entitled to all rights of a shareholder of
the Company, including the right to vote the Shares and receive
dividends and Other distributions declared on the Shares. The Employee
shall have the right to return the certificate to the Company at any
time for cancellation and to receive a certificate without the
Restrictive Legend representing the Shares that have vested as
provided in Section 2 hereof and a balance certificate bearing the
Restrictive Legend for those Shares, if any, that shall not have been
vested at such time; provided, however, that certificates representing
vested or unvested Shares shall also bear a restrictive legend
restricting transferability if legal counsel for the Company deems
such legend to be required under applicable securities laws.
4. If the employment of the Employee with the Company
terminates for any reason during a vesting period, the Shares that
have not vested shall be forfeited on the date of such termination of
employment, except that for any portion of a vesting period that has
elapsed through the date of such termination, the Employee shall
receive a pro-rata portion of the Shares that would have been vested
at the end of such period (the "Pro-Rata Shares") equal to the product
of the Shares that are subject to vesting during such period (i.e.,
2,500 Shares) multiplied by a fraction the numerator of which is the
number of days that have elapsed during such vesting period through
the date of termination and the denominator of which is 365. Upon
termination of employment, the certificate(s) bearing the Restrictive
Legend shall be returned to the Company for cancellation and a new
certificate representing Shares that have vested as of the termination
date for which the Restrictive Legend had not previously been removed
and for the Pro-Rata Shares shall be issued to the Employee. The
Employee may designate a beneficiary to receive the stock certificate
representing the Shares that the Employee would have been entitled to
receive under this Section 4 in the event that termination of
employment of the Employee is due to his death. Each such beneficiary
designation shall be in writing, making specific reference to this
Agreement, and shall be addressed to the Company's Secretary and
Corporate Counsel. The Employee has the right to change such
beneficiary designation at will by delivering another written
designation similar in form to the preceding designation to the
Company's Secretary and Corporate Counsel.
5. The Company shall have the right to obtain and withhold from
any payment or transfer of property under this Agreement the amount of
taxes required by any government to be withheld or otherwise deducted
and paid with respect to such payment or transfer. At its discretion,
the Company may require the Employee as a condition to receiving any
Shares of pursuant to the Award to reimburse the Company for any such
taxes required to be withheld by the Company and withhold any
distribution or transfer of Shares in whole or in part until the
Company is so reimbursed. In lieu thereof~ the Company shall have the
right to withhold from any other cash amount due or to become due from
the Company to the Employee an amount equal to such taxes as required
to be withheld by the Company to reimburse the Company for any such
taxes or to retain and withhold a number of Shares having a market
value no less than the amount of such taxes and to cancel (in whole or
m part) any such Shares so withheld in order to reimburse the Company
for any such taxes. Moreover, if the Employee elects, in accordance
with Section 83(b) of the Internal Revenue Code of 1986, as amended,
to recognize ordinary income upon the grant of the Award, the Company
will require at the time of that election the Employee to reimburse
the Company for the amount of taxes required by any government to be
withheld or otherwise paid as a consequence of that election.
6. Any notice to be given to the Company under the terms of
this Agreement shall be addressed to the Company, in care of its
Secretary and Corporate Counsels at 700 Dresher Road, P.O. Box 349,
Horsham, Pennsylvania 19044, or at such other address as the Company
may hereafter designate in writing. Any notice to be given to the
Employee shall be addressed to the Employee at the Employee's home
address of record as reflected in the Company's personnel files. Any
such notice shall be deemed to have been duly given, if and when
enclosed in a properly sealed envelope, addressed as aforesaid,
registered or certified and deposited, postage and registry fee
prepaid, in a United States post office.
7. Nothing herein contained shall affect the Employee's right
to participate in and receive benefits under and in accordance with
the then current provisions of any pension, insurance or other
employee welfare plan or program of the Company or any Affiliate.
8. Except as otherwise herein provided, the Award herein
granted and the rights and privileges conferred hereby shall not be
transferred, assigned, pledged or hypothecated in any way (whether by
operation of law or otherwise) and shall not be subject to sale under
execution, attachment or similar process.
9. Subject to the limitation on the transferability contained
herein, this Agreement shall be binding upon and inure to the benefit
of the heirs, legatees, legal representatives, successors and assigns
of the parties hereto.
10. The Board shall have the power to interpret this Agreement
and to adopt such rules for the administration, interpretation and
application of this Agreement as are consistent therewith and to
interpret or revoke any such rules. All actions taken and all
interpretations and determinations made by the Board in good faith
shall be final and binding upon Employee, the Company and all other
interested persons. No member of the Board shall be personally liable
for any action, determination or interpretation made in good faith
with respect to this Agreement.
11. In the event of changes in the capital stock of the Company
by reason of stock dividends, split-ups or combinations of shares,
reclassifications, mergers, consolidations, reorganizations or
liquidations during the restriction period, any and all new,
substituted or additional securities to which the Employee is entitled
by reason of the ownership of the Award shall be subject immediately
to the terms, conditions and restrictions of this Agreement.
12. In the event that any provision in this Agreement shall be
held invalid or unenforceable, such provision shall be severable from,
and such invalidity or unenforceability shall not be construed to have
any effect on, the remaining provisions of this Agreement.
13. This Agreement shall be construed and enforced in
accordance with the internal laws of the Commonwealth of Pennsylvania.
14. The Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of
which together shall constitute but one and the same instrument.
15. This Agreement may be amended or modified only by a written
instrument executed by both the Company and the Employee.
IN WITNESS WHEREOF, the parties have executed this Agreements
in duplicate, the day and year first above written.
Attest: AYDIN CORPORATION
/s/ Robert A. Clancy By: /s/ Ayhan Hakimoglu
Secretary
Title: Chairman
/s/ Donald S. Taylor
Employee's Signature
PH1\104045. 1
Exhibit 10.2
AYDIN CORPORATION
INDIVIDUAL NON-QUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT, made on between AYDIN
CORPORATION and its subsidiaries (hereinafter called the "Company")
and (hereinafter called "Optionee").
The Board of Directors of the Company has determined that it is
to the advantage and interest of the Company and its stockholders to
grant the option provided for herein to the Optionee for their
services to the Company and as an incentive for increased effort in
the future, and in consideration of the mutual convenants herein
contained, the parties hereto agree as follows:
1. Shares Optioned; Time of Exercise; Option Price.
The Company grants to Optionee the right and option to purchase, on
the terms and conditions hereinafter set forth, all or any part of an
aggregate of shares of the Company's presently authorized but
unissued common stock (par value $1.00) at the purchase price of $
per share, excerisable at the time and for the number of shares
indicated hereafter.
A. On or after , to and including
, shares.
B. On or after , to and including
, shares.
C. On or after , to and including
. shares.
D. On or after , to and including
. shares.
2. Payment for Delivery of Stock.
The option granted hereunder shall be exercisable by Optionee from
time to time (as hereinabove provided), by delivery of written notice
specifying therein the number of shares which he has elected to
purchase and the payment to the Company of the purchase price of the
shares which Optionee shall then elect to purchase. Payment is
acceptable if it is made either: (i) in cash (including check, bank
draft, or money order); or (ii) by delivering Company Common Stock
("Stock") already owned by Optionee; or (iii) by a combination of cash
and Stock. The fair market value of Stock so delivered shall be the
mean of the high and the low prices on the principal Exchange upon
which the Stock is traded on the trading day immediately preceding the
date of exercise.
3. Necessity of Affiliation When Option is Exercised.
The option granted hereby and all rights hereunder to the extent such
rights shall not have been exercised, shall terminate and become null
and void if the Optionee ceases to be affiliated with the Company
(whether by resignation, retirement, dismissal, disability or
otherwise), except that (a) in the event of the termination of such
affiliation for any reason other than the death of the Optionee, the
Optionee may at any time within a period of thirty (30) days
thereafter exercise the option granted hereby to the extent such
option was exercisable by Optionee on the date of the termination of
such affiliation, and (b) in the event of the death of the Optionee
while affiliated with the Company, the options granted hereby which
would have become exercisable by the Optionee at time of death may be
exercised immediately or any time within three (3) months after such
death by the person or persons to whom the Optionee's rights under the
option granted hereby shall pass by will or by the applicable laws of
descent and distribution; provided, however, that in no event may the
option granted hereby be exercised to any extent by anyone after the
terminal date specified in Section 1 of this Agreement. As used
herein, the term "affiliation" includes, but is not limited to
employee or director.
4. Nonassignability of Options.
Except as otherwise provided in Section 3 of this Agreement, the
option granted hereunder and the rights and privileges conferred
hereby shall be exercisable only by the Optionee and shall not be
transferable or be assignable, either voluntarily or by operation of
law, by Optionee, in whole or in part, and if the Optionee shall
attempt to make any such transfer or assignment of the option granted
hereunder, or any of the rights and privileges conferred, such attempt
to transfer or assign shall be void and of no affect, and the Company
shall have the right to terminate this Agreement as of the date of
such purported transfer or assignment.
5. Termination of Optionee
If Optionee is an employee or non-employee Director of the Company,
subject to the terms of any employment contract or other arrangement
to the contrary, the Company shall have the right to terminate or
change the terms of employment of the Optionee at any time for any
reason whatsoever. A leave of absence or an interruption in service
(including an interruption during military service) authorized or
approved by the Company shall not be deemed a termination of
employment for the purpose of this Section 5.
6. Compliance with Governmental and Other Regulations.
This option shall not be exercisable in whole or in part, and the
Company shall not be obligated to sell any shares of stock pursuant to
the exercise of this option, (a) until this option has
been approved by the shareholders of the Company, and (b) if such
exercise and sale would, in the opinion of counsel for the Company,
require registration of such shares under the Securities Act of 1933
(or other Federal or State statues having similar requirements), as it
may be in effect at that time, and the Company shall at such time not
desire to so register such shares. If at any time the Board of
Directors of the Company shall determine in its discretion that the
listing or qualifications of the shares of stock subject to this
option on any securities exchange or under any applicable law, or the
consent or approval of any governmental regulatory body, is necessary
or desirable as a condition of, or in connection with the issue of
shares pursuant to the exercise hereof, this option may not be
exercised in whole or in part unless such listing, qualification,
consent or approval shall have been effected or obtained free of any
conditions not acceptable to the Company's Board of Directors.
7. Acquisition for Investment; Notification of Disposition.
By accepting this option, Optionee agrees for himself, his heirs, and
legates that any and all shares purchased hereunder shall be acquired
for investment and not for distribution, and upon the issuance of any
or all of the shares subject to the option granted hereunder,
Optionee, his heirs or legates receiving such shares, shall deliver to
the Company a representation in writing that such shares are being
acquired in good faith for investment and not for distribution. The
Company, at its sole discretion, may take all reasonable steps
(including the affixing of an appropriate legend on certificates
embodying the shares) to assure itself against any sale or
distribution by Optionee not in compliance with the Federal or State
securities laws. In the event that the Optionee at any time
contemplates the disposition (whether by sale, exchange, gift or other
form of transfer) of any shares of stock acquired pursuant to the
exercise of the option granted hereby, Optionee will first notify the
Company of such proposed disposition and will thereafter cooperate
with the Company in complying with all the applicable requirements of
law which, in the opinion of the Company, must be satisfied prior to
the making of such disposition. In the event that the Optionee
disposes (whether by sale, exchange, gift or any other transfer) of
any shares of stock acquired pursuant to the exercise of the option
granted hereby, within one (1) year after the transfer of such shares
to him upon his exercise of such option, he will notify the Company in
writing within thirty (30) days after such disposition.
8. Adjustments
In the event that the shares of stock subject to the option granted
hereby shall be changed into or exchanged for a different number of
kinds of shares of stock or other securities of the Company, or of
another corporation (whether by reason of merger, consolidation,
recapitalization, reclassification, split-up, combination of shares or
otherwise) or if the number of such shares of stock shall be increased
through the payment of a stock
dividend, then there shall be substituted for or added to each share
of stock of the Company theretofore or thereafter subject to this
option the number and kind of shares of stock or other securities into
which each outstanding share of stock of the Company shall be so
changed, or for which each such share shall be exchanged, or to which
each such shall be entitled, as the case may be. This option shall
also be appropriately amended as to price and any other terms as may
be necessary to reflect the foregoing events. In the event there shall
be any other change in the number or kinds of the outstanding shares
of stock of the Company subject to this option, or of any stock for
which it shall have been exchanged, then if the Company's Board of
Directors shall, in its sole discretion, determine that such change
equitably requires an adjustment in this option, such adjustments
shall be made in accordance with such determination. No fractional
shares will be issued as a result of any adjustment in this option
pursuant to this Section 8, nor shall any cash payment be made in lieu
thereof. To the extent possible, any fractional shares resulting from
such adjustment will be aggregated and the resulting whole shares
added to any shares remaining to be purchased under this option.
Notice of any adjustment shall be given by the Company to the Optionee
and such adjustment (whether or not such notice is given) shall be
final, effective, binding and conclusive for all purposes hereof.
The Board of Directors shall have the power, in the event of any
merger or consolidation of the Company with or into any other
corporation or company, to amend this option to permit the exercise of
this option prior to the effectiveness of any such merger or
consolidation and to terminate this option as of such effectiveness.
If the Board of Directors of the Company shall exercise such power,
this option shall be deemed to have been amended to permit the
exercise hereof in whole or in part by the Optionee at any time or
from time to time as determined by the Board of Directors prior to the
effectiveness of such merger or consolidation, and this option shall
be deemed to terminate upon such effectiveness.
9. Rights of Optionee in Stock.
Neither the Optionee nor his executor, administrator, heirs or
legatees shall be or have any rights or privileges of a shareholder of
the Company in respect to the shares issuable upon exercise of the
option granted hereunder, unless and until certificates representing
such shares shall have been issued and del ivered.
10. Notices
Any notice to be given under the terms of this Agreement shall be
addressed to the Company at 700 Dresher Road, P.O. Box 349, Horsham,
PA 19044, and any notice to be given to the Optionee shall be
addressed to him at the address given beneath his signature hereto, or
at such other address as either party may
hereafter designate in writing to the other. Any such notice shall
have been deemed duly given when enclosed in a properly sealed
envelope or wrapper addressed as aforesaid and deposited (first class
postage prepaid) in post office or branch post office regularly
maintained by the United States Government.
11. Effect of Agreement; Execution.
This Agreement shall be binding upon and inure to the benefit of any
successor or successors of the Company.
IN WITNESS WHEREOF, the Company has caused these presents to be
executed on its behalf by its Chairman, to be sealed by its Corporate
seal, attested by its Secretary, and Optionee has hereunto set his
hand the day and year first above written which is the time of
granting of the option hereunder.
ATTESTED: AYDIN CORPORATION
_______________________ By___________________________
Robert A. Clancy Ayhan Hakimoglu
Secretary Chairman
{SEAL)
_____________________________
Optionee's signature
_____________________________
_____________________________
Optionee's Address (zip code)
Exhibit 10.3
THE 1981 INCENTIVE STOCK OPTION PLAN
OF AYDIN CORPORATION
100,000 Shares
(Last amended, April 27, 1990)
I. Purpose
The purpose of this Plan is to advance the interests of the
Corporation and its shareholders by strengthening the ability of
the Corporation to attract and retain in its employ key men of
training, experience and ability and to furnish additional
incentive to officers and valued key employees upon whose
judgement, initiative and efforts the successful conduct and
development of its business largely depends, by encouraging them
to purchase stock in the Corporation.
II. Definitions
As used in this Plan, "Corporation" means Aydin Corporation;
"Board of Directors" means the Board of Directors of Aydin
Corporation; "employee" includes officers and other key employees
of the Corporation and its subsidiaries but excludes members of
the Board of Directors who are not also officers or employees of
the Corporation; "Stock Option Committee" (the "Committee") means
the Board of Directors; "Common Stock" means the Corporation's
Common Stock of the par value of $1.00 per share; "Code" means the
Internal Revenue Code of 1954, as amended from time to time.
III. Eligible Personnel
A. All full-time salaried officers and key employees.
B. An employee who has been granted an option may, if he is
otherwise eligible, be granted an additional option or
options.
IV. Stock Option Committee
A. Subject to the provisions of the Plan, the Board of Directors
shall be the Stock Option Committee and shall administer the
Plan. It shall have authority to construe and interpret the
Plan, to define the terms used therein, to prescribe, amend
and rescind rules and regulations for the administration of
the Plan and to take such other action in the administration
of the Plan as it shall deem proper. The interpretation by
the Committee of any provision of the Plan or of any option
agreement entered into hereunder shall be in accordance with
Section 422A of the Code and Regulations issued thereunder as
they may be amended from time to time, in order that rights
granted hereunder and under said option agreements shall
constitute "Incentive Stock Options" within the meaning of
such Section.
B. A majority of the members of the Committee shall constitute a
quorum and make all Committee determinations, take all
Committee actions and conduct all Committee business. The
Committee shall keep minutes of its meetings.
C. Any Committee action may be taken or determination made
without a meeting if all members of the Committee shall
individually or collectively consent in writing to such action
or determination. Such written consent or consents shall be
filed with the minutes of the Committee.
D. All interpretations, determinations and actions by the
Committee shall be final, conclusive and binding upon all
parties.
E. No member of the Board of Directors or the Committee shall be
liable for any action or determination made in good faith with
respect to the Plan or any option agreement.
V. Granting of Options
A. The Board of Directors or the Stock Option Committee may at
any time and from time to time grant options to eligible
employees, to purchase shares of Common Stock of the
Corporation under this Plan, determining the specific
employees to whom options may be granted, the number of shares
to be subject to each option, the terms and provisions of the
option agreements, and the time or times at which such options
shall be granted, provided, however, no officer of the
Corporation who is also a director of the Corporation on the
date of any specific grant may be granted an option if such
grant, when aggregated with all previous grants to such person
under this plan (as adjusted as provided for in Section IX)
would exceed ten percent (10%) of the total number of shares
authorized under this plan.
B. The date of grant shall be the date the Board of Directors or
the Stock Option Committee takes the necessary action to make
the grant; provided, however, that if the minutes or
appropriate resolutions of the Board or the Committee provide
than an option is to be granted as of a date in the future,
the date of grant shall be such future date. In any event,
the optionee must be an employee on the date of the grant.
C. No option shall be granted under this Plan after the close of
business on October 22, 1991, but options theretofore granted
may extend beyond that date.
D. The options granted hereunder shall be "Incentive Stock
Options" as that term is used in the code.
VI. Shares Subject to the Plan
The total number of shares of Common Stock that may be
purchased pursuant to options granted under this Plan shall not
exceed 100,000 subject to adjustment as provided in Section IX and
subject to amendment as provided in Section X. If any option
outstanding hereunder shall expire or terminate for any reasons
without having been exercised in full, the unpurchased shares
subject to the option shall again be available for the grant of
options under this Plan. Upon the exercise of an option
outstanding hereunder, the Corporation may reissue Common Stock
held in its treasury or issue authorized but unissued Common
Stock.
VII. Terms of Options
A. Each option granted under the Plan shall include the following
provisions, or terms consistent with the following provisions:
1. The purchase price (option price) of the shares subject
to option shall be not less than the fair market value of
the stock on the day the option is granted. Such fair
market value shall be established as the following, in
order of descending preference:
a. Mean between the highest and the lowest quoted selling
prices of the stock on an exchange.
b. Lacking a. above, the mean between the "bid" and
"asked" prices as provided to the Company by a
legitimate broker.
c. Lacking a. or b. for the date of grant, the mean
between the "bid" and "asked" prices for the most
recent date quoted, as obtained for the Company by a
legitimate broker.
d. Lacking a., b. or c., the last established
determinable price.
2. Except as provided in Section VIII herein, no option may
be exercised unless the optionee is at the time of such
exercise in the employ of the Corporation or of a
subsidiary and shall have been continuously so employed
since the granting of his option. For the purpose of the
Plan, an employee who is on leave of absence or who is in
the Armed Services or the civilian employment of the
United States will be considered in the employ of the
Corporation or its subsidiaries to the extent his
employment would be treated as continuing intact under
Section 421 and 422A of the Code, and the Regulations
thereunder, as amended, from time to time.
3. No option may be exercised prior to one year nor after
five years from the date of its grant. Unless the option
Agreement provides otherwise, any time after one year
from the date of grant the employee may exercise his
option in accordance with the following schedule:
After: The optionee may purchase:
One year from date of grant.........................25% of the total.
Two years from date of grant..........An additional 25% of the total.
Three years from date of grant........An additional 25% of the total.
Four years from date of grant.........An additional 25% of the total.
4. An option granted under this Plan prior to January 1,
1987, shall not be exercisable while there is
"outstanding" (within the meaning of Section 422A(c)(7)
of the Code) any incentive stock option which was
granted, before the granting of said option, to the
optionee to purchase stock (i) of the Corporation, (ii)
of a corporation which (at the time of the granting of
such option) was a subsidiary of the Corporation, or
(iii) of a predecessor corporation of any such
corporation.
5. Upon each exercise of an option the purchase price shall
be payable in full in cash, (or its equivalent acceptable
to the Corporation), or Common Stock already owned by the
employee, or a combination of cash and Common Stock.
6. No fractional shares shall be issued under this Plan or
under any option granted hereunder, nor shall any cash
payment be made in lieu thereof.
7. An option shall not be assignable nor transferable by the
employee to whom granted otherwise than by will or by the
laws of descent and distribution, and may be exercised,
during his lifetime, only by such employee.
8. No person shall have the rights and privileges of a
shareholder with respect to shares subject to or
purchased under an option until the date appearing on the
certificates issued upon the exercise of the option.
B. The aggregate fair market value (determined as of the date the
option is granted) of the stock for which any employee may be
granted options in any calendar year prior to 1987 under this
Plan and any other "Incentive Stock Option Plan" (within the
meaning of Section 422A of the Code) of the Corporation or its
subsidiaries, shall not exceed $100,000 plus any "unused limit
carryover" to such year, as determined in accordance with
Subsection (c)(4) of such Section. Subsequent to December 31,
1986, options granted under this Plan shall not be subject to
these limitations, provided, however, the value of the shares
subject to one or more Incentive Stock Option Plans first
exercisable in any calendar year does not exceed $100,000
(determined as of the date the option is granted).
C. No option under this Plan may be granted to an employee who,
at the time the option is granted, owns stock possessing more
than 10 percent of the total combined voting power of all
classes of stock of the Corporation or of its subsidiaries,
provided, however, this limitation shall not apply if such
option is granted at an option price of at least 110 percent
of the fair market value of the stock on the date of the
grant.
D. Each option granted under this Plan may, but need not, include
other terms and conditions not inconsistent with the
provisions hereof, including a requirements that the optionee
represent at the time of each exercise of option that the
shares purchased are being acquired for investment and not for
resale.
E. Nothing in this Plan or in any option granted hereunder shall
confer any rights to continue in the employ of the Corporation
or its subsidiaries or interfere in any way with the rights of
the Corporation or any subsidiary to terminate the employee at
any time.
VIII. Termination of Employment or Death of Employee
A. If the employment of an optionee is terminated for cause, or
if he voluntarily quits, his option shall expire forthwith,
but he may exercise any installments accrued as of the date of
termination or voluntary quit provided payment for same is
received within 30 days of the termination. Retirement,
including Early Retirement, under any retirement plan of the
Corporation or subsidiary is not deemed a voluntary quit.
B. If the employment of an optionee terminates for any reason
other than termination for cause, a voluntary quit, disability
or death, the option shall expire three months thereafter
unless by its terms it expires sooner. During said period,
the option may be exercised in accordance with its terms but
only for the number of shares with respect to which
installments had accrued as of the date of termination of
employment.
C. If an optionee dies while he is employed by the Corporation or
a subsidiary or within the three month period referred to in
Section VIII(B) above or within the twelve month period
referred to in Section VIII(D) below, during said period, the
option may be exercised by his personal representatives or the
persons to whom his rights under the option shall pass by will
or the laws of descent and distribution in accordance with
terms of the option but only for that number of shares with
respect to which installments had accrued as of the date of
death or disability. Such exercisable installments must be
exercised within three months of death, unless, by its terms,
it expires sooner.
D. If the employment of an optionee terminates by reason of the
optionee's "disability" (within the meaning of Section
105(d)(4) of the Code), the option shall expire 12 months
thereafter unless by its terms it expires sooner. During said
period, the option may be exercised in accordance with its
terms but only for the number of shares with respect to which
installments had accrued as of the date of termination of
employment.
E. Notwithstanding the above, an option may not be exercised
after the expiration of five years from the date the option is
granted.
IX. Adjustments Upon Changes in Capitalization
In the event of any recapitalization, stock dividend, stock
split, or combination affecting the stock subject to this Plan, or
in the event of any merger, consolidation, or reorganization as a
result of which the Corporation is the surviving corporation, the
Committee will make appropriate adjustments in the aggregate
number of kind of shares subject to the Plan, the number of shares
that may be granted to any one employee, and the number of shares
and the price per share subject to outstanding options provided
that such options remain or constitute incentive stock options
within the meaning of Section 422A of the Code. Any such
determination of adjustment shall be final and conclusive upon the
parties.
In the event of the dissolution or liquidation of the
Corporation, or in the event of a reorganization, merger, or
consolidation of the Corporation with one or more corporations as
a result of which the Corporation is not the surviving
corporation, or in the event of a sale of substantially all of the
property or stock of the Corporation to another corporation, the
Plan shall terminate; and any option then outstanding hereunder
shall terminate on the effective date of such transaction;
provided, however, that in the event of any such transaction the
Board of Directors may, but need not, modify all outstanding
options so as to make all such options exercisable in full on a
date sufficiently in advance of the effective date of such
transaction to permit the shares acquired pursuant to any exercise
of such options to be issued before the effective date of such
transaction.
X. Amendment and Termination
A. The Board of Directors shall have the power, in its
discretion, to amend, suspend or terminate this Plan at any
time. The Board of Directors shall not have the power except
as may be permitted in Section IX herein:
1. To change the class of employees eligible to receive
options under the Plan; or
2. To increase the number of shares subject to the Plan in
the aggregate subsequent to the date the Plan is
submitted to the shareholders of the Corporation for
their approval; or
3. To increase the number of shares subject to an option for
anyone individual; or
4. To reduce the option price below the fair market value of
the stock at the time the option was granted; or
5. To increase the maximum terms of options provided herein.
B. The Board of Directors may, with the consent of an optionee,
make such modifications of the terms and conditions of his
option as it shall deem advisable.
XI. Effective Date of Plan
This Plan shall become effective as of October 23, 1981 upon
approval of the shareholders of the Corporation and shall
terminate at the close of business on October 22, 1991.
Exhibit 10.4
THE 1983 INCENTIVE STOCK OPTION PLAN
OF AYDIN CORPORATION
120,000 Shares
(Last amended, April 27, 1990)
I. Purpose
The purpose of this Plan is to advance the interests of the
Corporation and its shareholders by strengthening the ability of
the Corporation to attract and retain in its employ key men of
training, experience and ability and to furnish additional
incentive to officers and valued key employees upon whose
judgement, initiative and efforts the successful conduct and
development of its business largely depends, by encouraging them
to purchase stock in the Corporation.
II. Definitions
As used in this Plan, "Corporation" means Aydin Corporation;
"Board of Directors" means the Board of Directors of Aydin
Corporation; "employee" includes officers and other key employees
of the Corporation and its subsidiaries but excludes members of
the Board of Directors who are not also officers or employees of
the Corporation; "Stock Option Committee" (the "Committee") means
the Board of Directors; "Common Stock" means the Corporation's
Common Stock of the par value of $1.00 per share; "Code" means the
Internal Revenue Code of 1954, as amended from time to time.
III. Eligible Personnel
A. All full-time salaried officers and key employees.
B. An employee who has been granted an option may, if he is
otherwise eligible, be granted an additional option or
options.
IV. Stock Option Committee
A. Subject to the provisions of the Plan, the Board of Directors
shall be the Stock Option Committee and shall administer the
Plan. It shall have authority to construe and interpret the
Plan, to define the terms used therein, to prescribe, amend
and rescind rules and regulations for the administration of
the Plan and to take such other action in the administration
of the Plan as it shall deem proper. The interpretation by
the Committee of any provision of the Plan or of any option
agreement entered into hereunder shall be in accordance with
Section 422A of the Code and Regulations issued thereunder as
they may be amended from time to time, in order that rights
granted hereunder and under said option agreements shall
constitute "Incentive Stock Options" within the meaning of
such Section.
B. A majority of the members of the Committee shall constitute a
quorum and make all Committee determinations, take all
Committee actions and conduct all Committee business. The
Committee shall keep minutes of its meetings.
C. Any Committee action may be taken or determination made
without a meeting if all members of the Committee shall
individually or collectively consent in writing to such action
or determination. Such written consent or consents shall be
filed with the minutes of the Committee.
D. All interpretations, determinations and actions by the
Committee shall be final, conclusive and binding upon all
parties.
E. No member of the Board of Directors or the Committee shall be
liable for any action or determination made in good faith with
respect to the Plan or any option agreement.
V. Granting of Options
A. The Board of Directors or the Stock Option Committee may at
any time and from time to time grant options to eligible
employees, to purchase shares of Common Stock of the
Corporation under this Plan, determining the specific
employees to whom options may be granted, the number of shares
to be subject to each option, the terms and provisions of the
option agreements, and the time or times at which such options
shall be granted, provided, however, no officer of the
Corporation who is also a director of the Corporation on the
date of any specific grant may be granted an option if such
grant, when aggregated with all previous grants to such person
under this plan (as adjusted as provided for in Section IX)
would exceed ten percent (10%) of the total number of shares
authorized under this plan.
B. The date of grant shall be the date the Board of Directors or
the Stock Option Committee takes the necessary action to make
the grant; provided, however, that if the minutes or
appropriate resolutions of the Board or the Committee provide
than an option is to be granted as of a date in the future,
the date of grant shall be such future date. In any event,
the optionee must be an employee on the date of the grant.
C. No option shall be granted under this Plan after the close of
business on October 31, 1993, but options theretofore granted
may extend beyond that date.
D. The options granted hereunder shall be "Incentive Stock
Options" as that term is used in the code.
VI. Shares Subject to the Plan
The total number of shares of Common Stock that may be
purchased pursuant to options granted under this Plan shall not
exceed 120,000 subject to adjustment as provided in Section IX and
subject to amendment as provided in Section X. If any option
outstanding hereunder shall expire or terminate for any reasons
without having been exercised in full, the unpurchased shares
subject to the option shall again be available for the grant of
options under this Plan. Upon the exercise of an option
outstanding hereunder, the Corporation may reissue Common Stock
held in its treasury or issue authorized but unissued Common
Stock.
VII. Terms of Options
A. Each option granted under the Plan shall include the following
provisions, or terms consistent with the following provisions:
1. The purchase price (option price) of the shares subject
to option shall be not less than the fair market value of
the stock on the day the option is granted. Such fair
market value shall be established as the following, in
order of descending preference:
a. Mean between the highest and the lowest quoted selling
prices of the stock on an exchange.
b. Lacking a. above, the mean between the "bid" and
"asked" prices as provided to the Company by a
legitimate broker.
c. Lacking a. or b. for the date of grant, the mean
between the "bid" and "asked" prices for the most
recent date quoted, as obtained for the Company by a
legitimate broker.
d. Lacking a., b. or c., the last established
determinable price.
2. Except as provided in Section VIII herein, no option may
be exercised unless the optionee is at the time of such
exercise in the employ of the Corporation or of a
subsidiary and shall have been continuously so employed
since the granting of his option. For the purpose of the
Plan, an employee who is on leave of absence or who is in
the Armed Services or the civilian employment of the
United States will be considered in the employ of the
Corporation or its subsidiaries to the extent his
employment would be treated as continuing intact under
Section 421 and 422A of the Code, and the Regulations
thereunder, as amended, from time to time.
3. No option may be exercised prior to one year nor after
five years from the date of its grant. Unless the option
Agreement provides otherwise, any time after one year
from the date of grant the employee may exercise his
option in accordance with the following schedule:
After: The optionee may purchase:
One year from date of grant.........................25% of the total.
Two years from date of grant..........An additional 25% of the total.
Three years from date of grant........An additional 25% of the total.
Four years from date of grant.........An additional 25% of the total.
4. An option granted under this Plan prior to January 1,
1987, shall not be exercisable while there is
"outstanding" (within the meaning of Section 422A(c)(7)
of the Code) any incentive stock option which was
granted, before the granting of said option, to the
optionee to purchase stock (i) of the Corporation, (ii)
of a corporation which (at the time of the granting of
such option) was a subsidiary of the Corporation, or
(iii) of a predecessor corporation of any such
corporation.
5. Upon each exercise of an option the purchase price shall
be payable in full in cash, (or its equivalent acceptable
to the Corporation), or Common Stock already owned by the
employee, or a combination of cash and Common Stock.
6. No fractional shares shall be issued under this Plan or
under any option granted hereunder, nor shall any cash
payment be made in lieu thereof.
7. An option shall not be assignable nor transferable by the
employee to whom granted otherwise than by will or by the
laws of descent and distribution, and may be exercised,
during his lifetime, only by such employee.
8. No person shall have the rights and privileges of a
shareholder with respect to shares subject to or
purchased under an option until the date appearing on the
certificates issued upon the exercise of the option.
B. The aggregate fair market value (determined as of the date the
option is granted) of the stock for which any employee may be
granted options in any calendar year prior to 1987 under this
Plan and any other "Incentive Stock Option Plan" (within the
meaning of Section 422A of the Code) of the Corporation or its
subsidiaries, shall not exceed $100,000 plus any "unused limit
carryover" to such year, as determined in accordance with
Subsection (c)(4) of such Section. Subsequent to December 31,
1986, options granted under this Plan shall not be subject to
these limitations, provided, however, the value of the shares
subject to one or more Incentive Stock Option Plans first
exercisable in any calendar year does not exceed $100,000
(determined as of the date the option is granted).
C. No option under this Plan may be granted to an employee who,
at the time the option is granted, owns stock possessing more
than 10 percent of the total combined voting power of all
classes of stock of the Corporation or of its subsidiaries,
provided, however, this limitation shall not apply if such
option is granted at an option price of at least 110 percent
of the fair market value of the stock on the date of the
grant.
D. Each option granted under this Plan may, but need not, include
other terms and conditions not inconsistent with the
provisions hereof, including a requirements that the optionee
represent at the time of each exercise of option that the
shares purchased are being acquired for investment and not for
resale.
E. Nothing in this Plan or in any option granted hereunder shall
confer any rights to continue in the employ of the Corporation
or its subsidiaries or interfere in any way with the rights of
the Corporation or any subsidiary to terminate the employee at
any time.
VIII. Termination of Employment or Death of Employee
A. If the employment of an optionee is terminated for cause, or
if he voluntarily quits, his option shall expire forthwith,
but he may exercise any installments accrued as of the date of
termination or voluntary quit provided payment for same is
received within 30 days of the termination. Retirement,
including Early Retirement, under any retirement plan of the
Corporation or subsidiary is not deemed a voluntary quit.
B. If the employment of an optionee terminates for any reason
other than termination for cause, a voluntary quit, disability
or death, the option shall expire three months thereafter
unless by its terms it expires sooner. During said period,
the option may be exercised in accordance with its terms but
only for the number of shares with respect to which
installments had accrued as of the date of termination of
employment.
C. If an optionee dies while he is employed by the Corporation or
a subsidiary or within the three month period referred to in
Section VIII(B) above or within the twelve month period
referred to in Section VIII(D) below, during said period, the
option may be exercised by his personal representatives or the
persons to whom his rights under the option shall pass by will
or the laws of descent and distribution in accordance with
terms of the option but only for that number of shares with
respect to which installments had accrued as of the date of
death or disability. Such exercisable installments must be
exercised within three months of death, unless, by its terms,
it expires sooner.
D. If the employment of an optionee terminates by reason of the
optionee's "disability" (within the meaning of Section
105(d)(4) of the Code), the option shall expire 12 months
thereafter unless by its terms it expires sooner. During said
period, the option may be exercised in accordance with its
terms but only for the number of shares with respect to which
installments had accrued as of the date of termination of
employment.
E. Notwithstanding the above, an option may not be exercised
after the expiration of five years from the date the option is
granted.
IX. Adjustments Upon Changes in Capitalization
In the event of any recapitalization, stock dividend, stock
split, or combination affecting the stock subject to this Plan, or
in the event of any merger, consolidation, or reorganization as a
result of which the Corporation is the surviving corporation, the
Committee will make appropriate adjustments in the aggregate
number of kind of shares subject to the Plan, the number of shares
that may be granted to any one employee, and the number of shares
and the price per share subject to outstanding options provided
that such options remain or constitute incentive stock options
within the meaning of Section 422A of the Code. Any such
determination of adjustment shall be final and conclusive upon the
parties.
In the event of the dissolution or liquidation of the
Corporation, or in the event of a reorganization, merger, or
consolidation of the Corporation with one or more corporations as
a result of which the Corporation is not the surviving
corporation, or in the event of a sale of substantially all of the
property or stock of the Corporation to another corporation, the
Plan shall terminate; and any option then outstanding hereunder
shall terminate on the effective date of such transaction;
provided, however, that in the event of any such transaction the
Board of Directors may, but need not, modify all outstanding
options so as to make all such options exercisable in full on a
date sufficiently in advance of the effective date of such
transaction to permit the shares acquired pursuant to any exercise
of such options to be issued before the effective date of such
transaction.
X. Amendment and Termination
A. The Board of Directors shall have the power, in its
discretion, to amend, suspend or terminate this Plan at any
time. The Board of Directors shall not have the power except
as may be permitted in Section IX herein:
1. To change the class of employees eligible to receive
options under the Plan; or
2. To increase the number of shares subject to the Plan in
the aggregate subsequent to the date the Plan is
submitted to the shareholders of the Corporation for
their approval; or
3. To increase the number of shares subject to an option for
anyone individual; or
4. To reduce the option price below the fair market value of
the stock at the time the option was granted; or
5. To increase the maximum terms of options provided herein.
B. The Board of Directors may, with the consent of an optionee,
make such modifications of the terms and conditions of his
option as it shall deem advisable.
XI. Effective Date of Plan
This Plan shall become effective as of November 1, 1983 upon
approval of the shareholders of the Corporation and shall
terminate at the close of business on October 31, 1993.
Exhibit 10.5
THE 1984 NON-QUALIFIED STOCK OPTION PLAN
OF AYDIN CORPORATION
125,000 Shares
(Last amended, April 27, 1990)
I. Purpose
The purpose of this Plan is to advance the interests of the
Corporation and its shareholders by strengthening the ability of
the Corporation to attract and retain in its employ key men of
training, experience and ability and to furnish additional
incentive to officers and valued key employees upon whose
judgement, initiative and efforts the successful conduct and
development of its business largely depends, by encouraging them
to purchase stock in the Corporation.
II. Definitions
As used in this Plan, "Corporation" means Aydin Corporation;
"Board of Directors" means the Board of Directors of Aydin
Corporation; "employee" includes officers and other key employees
of the Corporation and its subsidiaries but excludes members of
the Board of Directors who are not also officers or employees of
the Corporation; "Stock Option Committee" (the "Committee") means
the Board of Directors; "Common Stock" means the Corporation's
Common Stock of the par value of $1.00 per share; "Code" means the
Internal Revenue Code of 1954, as amended from time to time.
III. Eligible Personnel
A. All full-time salaried officers and key employees.
B. An employee who has been granted an option may, if he is
otherwise eligible, be granted an additional option or
options.
IV. Stock Option Committee
A. Subject to the provisions of the Plan, the Board of Directors
shall be the Stock Option Committee and shall administer the
Plan. It shall have authority to construe and interpret the
Plan, to define the terms used therein, to prescribe, amend
and rescind rules and regulations for the administration of
the Plan and to take such other action in the administration
of the Plan as it shall deem proper.
B. A majority of the members of the Committee shall constitute a
quorum and make all Committee determinations, take all
Committee actions and conduct all Committee business. The
Committee shall keep minutes of its meetings.
C. Any Committee action may be taken or determination made
without a meeting if all members of the Committee shall
individually or collectively consent in writing to such action
or determination. Such written consent or consents shall be
filed with the minutes of the Committee.
D. All interpretations, determinations and actions by the
Committee shall be final, conclusive and binding upon all
parties.
E. No member of the Board of Directors or the Committee shall be
liable for any action or determination made in good faith with
respect to the Plan or any option agreement.
V. Granting of Options
A. The Board of Directors or the Stock Option Committee may at
any time and from time to time grant options to eligible
employees, to purchase shares of Common Stock of the
Corporation under this Plan, determining the specific
employees to whom options may be granted, the number of shares
to be subject to each option, the purchase price (option
price) of the shares subject to the option, the terms and
provisions of the option agreements, and the time or times at
which such options shall be granted, provided, however, no
officer of the Corporation who is also a director of the
Corporation on the date of any specific grant may be granted
an option if such grant, when aggregated with all previous
grants to such person under this plan (as adjusted as provided
for in Section IX) would exceed ten percent (10%) of the total
number of shares authorized under this plan.
B. The date of grant shall be the date the Board of Directors or
the Stock Option Committee takes the necessary action to make
the grant; provided, however, that if the minutes or
appropriate resolutions of the Board or the Committee provide
than an option is to be granted as of a date in the future,
the date of grant shall be such future date. In any event,
the optionee must be an employee on the date of the grant.
C. No option shall be granted under this Plan after the close of
business on July 1, 1995, but options theretofore granted may
extend beyond that date.
D. The options granted hereunder shall be "Non-Qualified Stock
Options" as that term is used in the code.
VI. Shares Subject to the Plan
The total number of shares of Common Stock that may be
purchased pursuant to options granted under this Plan shall not
exceed 125,000 subject to adjustment as provided in Section IX and
subject to amendment as provided in Section X. If any option
outstanding hereunder shall expire or terminate for any reasons
without having been exercised in full, the unpurchased shares
subject to the option shall again be available for the grant of
options under this Plan. Upon the exercise of an option
outstanding hereunder, the Corporation may reissue Common Stock
held in its treasury or issue authorized but unissued Common
Stock.
VII. Terms of Options
A. Each option granted under the Plan shall include the following
provisions, or terms consistent with the following provisions:
1. The purchase price (option price) of the shares subject
to option shall be determined by the Board of Directors
or the Stock Option Committee, but the option price will
not be less than fifty percent (50%) of the fair market
value of the shares subject to the option on the date the
option is granted. Such fair market value shall be
established as the following, in order of descending
preference:
a. Mean between the highest and the lowest quoted selling
prices of the stock on an exchange.
b. Lacking a. above, the mean between the "bid" and
"asked" prices as provided to the Company by a
legitimate broker.
c. Lacking a. or b. for the date of grant, the mean
between the "bid" and "asked" prices for the most
recent date quoted, as obtained for the Company by a
legitimate broker.
d. Lacking a., b. or c., the last established
determinable price.
2. Except as provided in Section VIII herein, no option may
be exercised unless the optionee is at the time of such
exercise in the employ of the Corporation or of a
subsidiary and shall have been continuously so employed
since the granting of his option. For the purpose of the
Plan, an employee who is on leave of absence which is
authorized or approved by the Corporation or who is in
the Armed Services or the civilian employment of the
United States will be considered in the employ of the
Corporation or its subsidiaries and his employment would
be treated as continuing intact under this Plan.
3. No option may be exercised prior to one year nor after
five years from the date of its grant. Unless the option
Agreement provides otherwise, any time after one year
from the date of grant the employee may exercise his
option in accordance with the following schedule:
After: The optionee may purchase:
One year from date of grant.........................25% of the total.
Two years from date of grant..........An additional 25% of the total.
Three years from date of grant........An additional 25% of the total.
Four years from date of grant.........An additional 25% of the total.
4. Upon each exercise of an option the purchase price shall
be payable in full in cash, (or its equivalent acceptable
to the Corporation), or Common Stock already owned by the
employee, or a combination of cash and Common Stock.
5. No fractional shares shall be issued under this Plan or
under any option granted hereunder, nor shall any cash
payment be made in lieu thereof.
6. An option shall not be assignable nor transferable by the
employee to whom granted otherwise than by will or by the
laws of descent and distribution, and may be exercised,
during his lifetime, only by such employee.
7. No person shall have the rights and privileges of a
shareholder with respect to shares subject to or
purchased under an option until the date appearing on the
certificates issued upon the exercise of the option.
B. Each option granted under this Plan may, but need not, include
other terms and conditions not inconsistent with the
provisions hereof, including a requirement that the optionee
represent at the time of each exercise of option that the
shares purchased are being acquired for investment and not for
resale.
C. Nothing in this Plan or in any option granted hereunder shall
confer any rights to continue in the employ of the Corporation
or its subsidiaries or interfere in any way with the rights of
the Corporation or any subsidiary to terminate the employee at
any time.
VIII. Termination of Employment or Death of Employee
A. If the employment of an optionee is terminated for cause, or
if he voluntarily quits, his option shall expire forthwith,
but he may exercise any installments accrued as of the date of
termination of employment provided payment for same is
received within 30 days of the termination.
B. If an optionee dies while he is employed by the Corporation or
a subsidiary, the option may be exercised by his personal
representatives or the persons to whom his rights under the
option shall pass by will or the laws of descent and
distribution in accordance with terms of the option but only
for that number of shares with respect to which installments
had accrued as of the date of death. Such exercisable
installments must be exercised within three months of death,
unless, by its terms, it expires sooner.
C. Notwithstanding the above, an option may not be exercised
after the expiration of five years from the date the option is
granted.
IX. Adjustments Upon Changes in Capitalization
In the event of any recapitalization, stock dividend, stock
split, or combination affecting the stock subject to this Plan, or
in the event of any merger, consolidation, or reorganization as a
result of which the Corporation is the surviving corporation, the
Committee will make appropriate adjustments in the aggregate
number of kind of shares subject to the Plan, the number of shares
that may be granted to any one employee, and the number of shares
and the price per share subject to outstanding options provided
that such options remain or constitute incentive stock options
within the meaning of Section 422A of the Code. Any such
determination of adjustment shall be final and conclusive upon the
parties.
In the event of the dissolution or liquidation of the
Corporation, or in the event of a reorganization, merger, or
consolidation of the Corporation with one or more corporations as
a result of which the Corporation is not the surviving
corporation, or in the event of a sale of substantially all of the
property or stock of the Corporation to another corporation, the
Plan shall terminate; and any option then outstanding hereunder
shall terminate on the effective date of such transaction;
provided, however, that in the event of any such transaction the
Board of Directors may, but need not, modify all outstanding
options so as to make all such options exercisable in full on a
date sufficiently in advance of the effective date of such
transaction to permit the shares acquired pursuant to any exercise
of such options to be issued before the effective date of such
transaction.
X. Amendment and Termination
A. The Board of Directors shall have the power, in its
discretion, to amend, suspend or terminate this Plan at any
time. The Board of Directors shall not have the power except
as may be permitted in Section IX herein:
1. To change the class of employees eligible to receive
options under the Plan; or
2. To increase the number of shares subject to the Plan in
the aggregate subsequent to the date the Plan is
submitted to the shareholders of the Corporation for
their approval; or
3. To increase the number of shares subject to an option for
any one individual; or
4. To reduce the option price below the fair market value of
the stock at the time the option was granted; or
5. To increase the maximum terms of options provided herein.
B. The Board of Directors may, with the consent of an optionee,
make such modifications of the terms and conditions of his
option as it shall deem advisable.
XI. Effective Date of Plan
This Plan shall become effective as of July 1, 1984, upon
approval of the shareholders of the Corporation and shall
terminate at the close of business on July 1, 1995.
Exhibit 10.6
THE 1994 INCENTIVE STOCK OPTION PLAN
OF AYDIN CORPORATION
150,000 Shares
(Last amended October 28, 1994)
I. Purpose
The purpose of this Plan is to advance the interests of the
Corporation and its shareholders by strengthening the ability of
the Corporation to attract and retain in its employ key
individuals of training, experience and ability and to furnish
additional incentive to officers and valued key employees upon
whose judgement, initiative and efforts the successful conduct and
development of its business largely depends, by encouraging them
to purchase stock in the Corporation.
II. Definitions
As used in this Plan, "Corporation" means Aydin Corporation;
"Board of Directors" means the Board of Directors of Aydin
Corporation; "employee" includes officers and other key employees
of the Corporation and its subsidiaries but excludes members of
the Board of Directors who are not also officers or employees of
the Corporation; "Stock Option Committee" (the "Committee") means
the Board of Directors; "Special Committee" means a committee
composed of at least three non-employee Directors that qualify as
"disinterested persons" under Rule 16b-3(d)(3); "Common Stock"
means the Corporation's Common Stock of the par value of $1.00 per
share; "Code" means the Internal Revenue Code of 1986, as amended
from time to time.
III. Eligible Personnel
A. All full-time salaried officers and key employees.
B. An employee who has been granted an option may, if he is
otherwise eligible, be granted an additional option or
options.
IV. Stock Option Committee
A. Subject to the provisions of the Plan, the Committee shall
administer the Plan. It shall have authority to construe and
interpret the Plan, to define the terms used therein, to
prescribe, amend and rescind rules and regulations for the
administration of the Plan and to take such other action in
the administration of the Plan as it shall deem proper. The
interpretation by the Committee of any provision of the Plan
or of any option agreement entered into hereunder shall be in
accordance with Section 422 of the Code and Regulations issued
thereunder as they may be amended from time to time, in order
that rights granted hereunder and under said option agreements
shall constitute "Incentive Stock Options" within the meaning
of that Section.
B. A majority of the members of the Committee, or the Special
Committee as the case may be, shall constitute a quorum and
make all determinations, take all actions and conduct all
business. They shall keep minutes of their respective
meetings.
C. Any Committee or Special Committee action may be taken or
determination made without a meeting if all members of the
respective committee shall individually or collectively
consent in writing to such action or determination. Such
written consent or consents shall be filed with the minutes of
the Corporation.
D. All interpretations, determinations and actions by the
respective committee shall be final, conclusive and binding
upon all parties.
E. No member of the Committee, or Special Committee as the case
may be,shall be liable for any action or determination made in
good faith with respect to the Plan or any option agreement.
V. Granting of Options
A. The Committee may at any time and from time to time grant
options to eligible employees, to purchase shares of Common
Stock of the Corporation under this Plan, determining the
specific employees to whom options may be granted, the number
of shares to be subject to each option, the terms and
provisions of the option agreements, and the time or times at
which such options shall be granted, provided, however, only
the Special Committee may grant options to officers of the
Corporation who are also directors of the Corporation on the
date of such grant.
B. The date of grant shall be the date either committee takes the
necessary action to make the grant; provided, however, that if
the minutes or appropriate resolutions of the respective
committee provide than an option is to be granted as of a date
in the future, the date of grant shall be such future date.
In any event, the optionee must be an employee on the date of
the grant.
C. No option shall be granted under this Plan after the close of
business on December 31, 2003, but options theretofore granted
may extend beyond that date.
D. The options granted hereunder shall be "Incentive Stock
Options" as that term is used in Section 422 of the Code.
VI. Shares Subject to the Plan
The total number of shares of Common Stock that may be
purchased pursuant to options granted under this Plan shall not
exceed 150,000 subject to adjustment as provided in Section IX and
subject to amendment as provided in Section X. If any option
outstanding hereunder shall expire or terminate for any reason
without having been exercised in full, the unpurchased shares
subject to the option shall again be available for the grant of
options under this Plan. Upon the exercise of an option
outstanding hereunder, the Corporation may reissue Common Stock
held in its treasury or issue authorized but unissued Common
Stock.
VII. Terms of Options
A. Each option granted under the Plan shall include the following
provisions, or terms consistent with the following provisions:
1. The purchase price (option price) of the shares subject
to option shall be not less than the fair market value of
the stock on the day the option is granted. Such fair
market value shall be established as the following, in
order of descending preference:
a. Mean between the highest and the lowest quoted selling
prices of the stock on an exchange.
b. Lacking a. above, the mean between the "bid" and
"asked" prices as provided to the Company by a
legitimate broker.
c. Lacking a. or b. for the date of grant, the mean
between the "bid" and "asked" prices for the most
recent date quoted, as obtained for the Company by a
legitimate broker.
d. Lacking a., b. or c., the last established
determinable price.
2. Except as provided in Section VIII herein, no option may
be exercised unless the optionee is at the time of such
exercise in the employ of the Corporation or of a
subsidiary and shall have been continuously so employed
since the granting of his option. For the purpose of the
Plan, an employee who is on leave of absence or who is in
the Armed Services or the civilian employment of the
United States will be considered in the employ of the
Corporation or its subsidiaries to the extent his
employment would be treated as continuing intact under
Sections 421 and 422 of the Code, and the Regulations
thereunder, as amended, from time to time.
3. No option may be exercised prior to one year nor after
five years from the date of its grant. Unless the option
Agreement provides otherwise, any time after one year
from the date of grant the employee may exercise his
option in accordance with the following schedule:
After: The optionee may purchase:
One year from date of grant.....25% of the total.
Two years from date of grant....additional 25% of the total.
Three years from date of grant..additional 25% of the total.
Four years from date of grant...additional 25% of the total.
4. Upon each exercise of an option the purchase price shall
be payable in full in cash, (or its equivalent acceptable
to the Corporation), or Common Stock already owned by the
employee, or a combination of cash and Common Stock.
5. No fractional shares shall be issued under this Plan or
under any option granted hereunder, nor shall any cash
payment be made in lieu thereof.
6. An option shall not be assignable or transferable by the
employee to whom granted otherwise than by will or by the
laws of descent and distribution, and may be exercised,
during his lifetime, only by such employee.
7. No person shall have the rights and privileges of a
shareholder with respect to shares subject to or
purchased under an option until the date appearing on the
certificates issued upon the exercise of the option.
B. The aggregate fair market value (determined as of the date the
option is granted) of the stock for which any employee may be
granted options first exercisable in any calendar year under
this Plan and all other "Incentive Stock Option Plans" of the
Corporation or its subsidiaries, shall not exceed $100,000.
C. No option under this Plan may be granted to an employee who,
at the time the option is granted, owns stock possessing more
than 10 percent of the total combined voting power of all
classes of stock of the Corporation or of its subsidiaries,
provided, however, this limitation shall not apply if such
option is granted at an option price of at least 110 percent
of the fair market value of the stock on the date of the
grant.
D. Each option granted under this Plan may, but need not, include
other terms and conditions not inconsistent with the
provisions hereof, including a requirement that the optionee
represent at the time of each exercise of option that the
shares purchased are being acquired for investment and not for
resale.
E. Nothing in this Plan nor in any option granted hereunder shall
confer any rights to continue in the employ of the Corporation
or its subsidiaries or interfere in any way with the rights of
the Corporation or any subsidiary to terminate the employee at
any time.
VIII. Termination of Employment or Death of Employee
A. If the employment of an optionee is terminated for cause, or
if he voluntarily quits, his option shall expire forthwith,
but he may exercise any options that are exercisable as of the
date of termination or voluntary quit provided payment for
same is received within 30 days of the termination.
Retirement, including Early Retirement, under any retirement
plan of the Corporation or subsidiary is not deemed a
voluntary quit.
B. If the employment of an optionee terminates for any reason
other than termination for cause, a voluntary quit, disability
or death, the option shall expire three months thereafter
unless by its terms it expires sooner. During said period,
the option may be exercised in accordance with its terms but
only for the number of shares with respect to which options
could be exercised as of the date of termination of
employment.
C. If an optionee dies while he is employed by the Corporation or
a subsidiary or within the three month period referred to in
Section VIII(B) above or within the twelve month period
referred to in Section VIII(D) below, during said period, the
option may be exercised by his personal representatives or the
persons to whom his rights under the option shall pass by will
or the laws of descent and distribution in accordance with
terms of the option but only for that number of shares with
respect to which options could be exercised as of the date of
death. Such exercisable option must be exercised within three
months of death, unless, by its terms, it expires sooner.
D. If the employment of an optionee terminates by reason of the
optionee's "disability" (within the meaning of Section
22(e)(3) of the Code), the option shall expire 12 months
thereafter unless by its terms it expires sooner. During said
period, the option may be exercised in accordance with its
terms but only for the number of shares with respect to which
options could be exercised as of the date of termination of
employment.
E. Notwithstanding the above, an option may not be exercised
after the expiration of five years from the date the option is
granted.
IX. Adjustments Upon Changes in Capitalization
In the event of any recapitalization, stock dividend, stock
split, or combination affecting the stock subject to this Plan, or
in the event of any merger, consolidation, or reorganization as a
result of which the Corporation is the surviving corporation, the
Committee will make appropriate adjustments in the aggregate
number of kind of shares subject to the Plan, the number of shares
that may be granted to any one employee, and the number of shares
and the price per share subject to outstanding options provided
that such options remain or constitute incentive stock options
within the meaning of Section 422 of the Code. Any such
determination of adjustment shall be final and conclusive upon the
parties.
In the event of the dissolution or liquidation of the
Corporation, or in the event of a reorganization, merger, or
consolidation of the Corporation with one or more corporations as
a result of which the Corporation is not the surviving
corporation, or in the event of a sale of substantially all of the
property or stock of the Corporation to another corporation, the
Plan shall terminate; and any option then outstanding hereunder
shall terminate on the effective date of such transaction;
provided, however, that in the event of any such transaction the
Board of Directors may, but need not, modify all outstanding
options so as to make all such options exercisable in full on a
date sufficiently in advance of the effective date of such
transaction to permit the shares acquired pursuant to any exercise
of such options to be issued before the effective date of such
transaction.
X. Amendment and Termination
A. The Board of Directors shall have the power, in its
discretion, to amend, suspend or terminate this Plan at any
time. The Board of Directors shall not have the power except
as may be permitted in Section IX herein:
1. To change the class of employees eligible to receive
options under the Plan; or
2. To increase the number of shares subject to the Plan in
the aggregate unless such increase is submitted to the
shareholders of the Corporation for their approval; or
3. To increase the number of shares subject to an option for
any one individual; or
4. To reduce the option price below the fair market value of
the stock (or below the 110% fair market value when
required by Section VII (C) hereof) at the time the
option was granted; or
5. To increase the maximum terms of options provided herein.
B. The Board of Directors may, with the consent of an optionee,
make such modifications of the terms and conditions of his
option as it shall deem advisable.
XI. Compliance with Rule 16b-3
The provisions of this Plan are intended to comply in all respects
with the provisions of Rule 16b-3 under the Securities Exchange Act of
1934 and any amendments thereto, and, if this Plan shall not so
comply, whether on the date of adoption or by reason of any later
amendment to or interpretation of Rule 16b-3, the provisions of this
Plan shall be deemed to be automatically amended so as to bring them
into full compliance with such rule.
XII. Effective Date of Plan
This Plan shall become effective as of January 3, 1994 upon
approval of the shareholders of the Corporation and shall
terminate at the close of business on December 31, 2003.
Exhibit 13
Dear Stockholder:
Total sales for 1994 were $142,441,000, versus sales of
$141,475,000 in 1993. In 1994, the Company had a net income of
$5,047,000 or $1.01 per share, as compared to a net loss of $4,967,000
or $1.00 per share in 1993.
Aydin's backlog at the end of 1994 was approximately $134 million,
as compared to $155 million at this time last year. Lower present
backlog, coupled with delays in bookings, may have negative impact on
earnings early in 1995. The Company has sizeable production options not
included in the above figures.
The Company is continuing to bid on large and small military and
industrial programs. During the last half of 1994, the Company
submitted approximately $800 million in proposals. This is a record
for the past several years, and there are several other significant
proposals in the preparation stage.
The Company's growth strategy is to continue bidding on its basic
industrial and military business. In addition, the Company will stress
its telecommunication business, including digital wireless telephony
and digital telephony for video cable systems.
The Company has formed a new division, "Aydin Telecom". Mr.
Thomas LoCasale has been appointed President of this Division,
reporting to me. This Division will develop, market and sell digital
wireless telephony equipment & systems, digital telephony networks for
video cable systems, network access equipment, satellite modems,
satellite TDMA next generation equipment, transcoders and certain types
of multiplexers.
In the telecommunications field, Aydin (West) will continue as a
separate Division to market and sell microwave radios, cell extender
for cellular systems, high power amplifiers and other satellite earth
station equipment, troposcatter equipment and turnkey telecom systems.
Aydin plans to be a major factor in digital wireless telephony and
cable video systems telephony products and network access equipment.
The Company expects long-distance carriers as well as cable TV
companies to enter into competition with the Baby Bells in local
telephony business. Similarly, local telephone companies will enter
into long-distance telephony. All of these will be the result of
deregulation which is at the proposal stage at this time.
Digital wireless systems are competitive in providing telephony
networks for developing countries such as Russia, China, and others who
wish to expand their telephone networks. At this stage, it is not
practical to hang or bury wires to bring a connection to every house,
especially in low population density areas.
Aydin expects that there will be a large market in telecom
equipment business of the type Aydin Telecom and Aydin (West) will sell
in the USA and world-wide.
Another significant part of our growth plan is to stress System
Integration (SI). Aydin believes that the Company is well-positioned
to expand its Systems Integration business base. This belief is based
on the fact that Aydin has already demonstrated its ability to
successfully bid and win major SI contracts against U.S. and
international competition.
Further, Dr. Donald Taylor was hired effective January 3, 1995, as
President of Aydin Corporation and President of the Aydin (East)
Division being formed by combining three Aydin Divisions.
Before joining Aydin, Dr. Taylor was a vice president of Computer
Sciences Corporation and was the key executive responsible for over $2
billion in major SI wins. As a recognized industry expert in bidding,
winning and performing on SI contracts, Dr. Taylor will provide
valuable guidance to the Company's plans to expand its SI contract
base. Finally, the Company recognizes that it must expand its SI
business base beyond the government military sector. Thus, the Company
will leverage its engineering and software expertise in key technology
areas to acquire SI contracts in the non-military and
commercial/industrial marketplace.
New product development efforts will continue in 1995, especially
in the Telecom field.
Work is continuing on the Command, Control, and Communication
program (Turkish Mobile Radar Complexes), with most of the remaining
work being done at Aydin's Turkish subsidiary. This program, valued at
approximately $210 million, was awarded to Aydin by the Turkish
Government in late 1990. As a result of expected completion of certain
phases of this project, Aydin expects a significant reduction of its
unbilled revenue and significant positive cash flow starting in the
middle of 1995.
Capital equipment expenditures in 1994 were approximately $4.4
million, and will probably not change significantly in 1995.
/s/ Ayhan Hakimoglu
Ayhan Hakimoglu
Chairman of the Board
February 24, 1995
[PHOTO]
(page 1)
THE COMPANY
CAPABILITIES
Aydin's major business areas are described below:
Telecommunications - Aydin offers microwave digital and analog
transmission equipment and systems for commercial and military
applications which include wireless and hybrid fiber coax telephony
communications equipment, cellular range extender, line-of-sight (LOS)
microwave radios, satellite earth stations, TDMA terminals and high
power transmitters, portable communications terminals, troposcatter
networks and wired network access products. Aydin also installs turnkey
telecom systems. Airborne and Ground Data Acquisition and Avionics -
Aydin provides airborne equipment and systems to gather critical
information and to process, format and transmit to the ground through
communication data links from a communications satellite, spacecraft,
aircraft and/or missile. Aydin's terminals receive this data on the
ground and analyze it further for display to track and control.
Computer Equipment and Software - Aydin sells a line of commercial,
high-resolution CRT monitors ranging in size from 10 inches to 29
inches. Workstations are also offered, mostly for the process control
industry. Aydin also offers ruggedized and TEMPEST-qualified versions
of the same for military applications. Software is written by Aydin for
commercial and military purposes for specific applications such as
radar simulation, modernization and integration; command, control and
communications; and air traffic control systems. Air and Other Traffic
Control - Aydin offers radar approach control systems including
appropriate radars. Aydin also manufactures VHF and UHF radios for
ground-to-air communication. Radars, Radar Simulation, Integration and
Modernization - Aydin has developed a modern 3-dimensional tactical air
defense radar and has completed and/or is working on several projects
in radar simulation, radar integration and automation of manual radars.
Modernization of previously designed radars is also done by Aydin.
Command, Control and Communications - Aydin provides turnkey command,
control and communications (C3) systems with or without radars for
defense systems, both fixed and mobile. Systems Integration - Some of
the capabilities described above consist of system integration. Aydin
plans to expand its present system integration business and
additionally pursue industrial/commercial systems.
ORGANIZATION AND MANUFACTURING PLANTS
Three major divisions, two smaller support divisions and three
operational subsidiaries, form Aydin's organization. The divisions and
subsidiaries are profit centers, maintaining individual engineering,
manufacturing, marketing and accounting functions.
The manufacturing plants, concentrated outside of Philadelphia,
Pennsylvania, and in San Jose, California, have approximately 575,000
square feet of space. The Company's foreign subsidiaries, with total
plant space of an additional 110,000 square feet, are situated in
Ankara, Turkey; Buenos Aires, Argentina; and Hertfordshire, England. An
office has been opened in Belgium in support of the NATO RIS Programs.
-------------------
OFFICERS
Ayhan Hakimoglu *
Chairman of the Board, Chief Executive Officer
Dr. Donald S. Taylor *
President & President, Aydin Corp. (East)
John Vanderslice *
Exec. Vice President & President, Aydin Vector
Demirhan Hakimoglu *
Vice President & Chief Executive Officer,
Aydin Yazilim ve Elektronik A.S.
Mats J. Ofverberg, Ph.D. *
Vice President & President, Aydin Corp. (West)
Thomas LoCasale *
Vice President & President, Aydin Telecom
Gary Boswell
General Manager, Computer & Monitor Unit of Aydin Corp. (East)
John Wong
General Manager, Controls Unit of Aydin Corp. (East)
Alexis Mozarovski
Vice President & President, Aydin S.A.
Jay L. Landis
Treasurer & Assistant Secretary
Herbert Welber *
Controller & Assistant Treasurer
Robert A. Clancy
Secretary
Zeynep B. Hakimoglu
Assistant Secretary
Serdar Akkor
General Manager, Aydin Yazilim ve Elektronik A.S.
Robert Bancroft
President, Aydin Electro Fab
Robert Kamin
President, Raytor Unit of Aydin Corp. (East)
George Isaacs
Chief Executive Officer, Aydin Controls (U.K.) Ltd.
Gerald Slehofer
President, Aydin Molded Devices
BOARD OF DIRECTORS
Ayhan Hakimoglu
Chairman of the Board
Dr. Donald S. Taylor
President
Dr. Nev A. Gokcen **
Thermodynamicist
Department of the Interior
Bureau of Mines, Albany, Oregon
Admiral Harry D. Train, II, USN (Ret.) **
General Manager, Strategic Research and Management
Services Division of Science Applications
International Corporation, Norfolk, Virginia
I. Gary Bard **
Consultant and Private Investor
John F. Vanderslice
Exec. Vice President & President, Aydin Vector
* Executive Officer
** Member of the Audit Committee
(page 2)
The complementary nature of Aydin's divisions and product lines
enables the divisions to work together to develop and market complete
systems. Aydin engineers and computer software specialists have the
capability to design any communications, information processing, air
defense or air traffic control network utilizing Aydin's various
product lines. The Company offers a broad range of products due to its
ability to combine analog microwave engineering methods with digital
techniques and software.
SALES AND MARKETING
Corporate marketing, located in suburban Washington, DC, supports
the direct sales forces of the divisions. Major cities and key military
bases are covered by Aydin sales personnel or manufacturers'
representatives. For exports, Aydin's sales efforts are conducted by
its international subsidiaries, its international sales network and
representatives in many countries.
Proprietary products and systems are available from Aydin,
although an inventory of finished goods is not generally maintained.
About one-half of the sales is attributable to standard products and
systems, including modifications thereof, and the other half is for
custom-designed and engineered equipment based on customers' specific
requirements.
Customers include domestic and foreign electronic and aerospace
firms, regulated and unregulated telephone organizations, computer and
aircraft manufacturers, large defense contractors, industrial and
financial concerns, process control companies, research laboratories,
foreign governments, and the military branches and other agencies of
the U.S. Government.
Industrial business was approximately 18% of the total revenues in
1994, while 29 % was comprised of sales in which Aydin was a prime or
subcontractor to the military branches and other agencies of the U.S.
Government. The remaining 53% of revenues was from overseas sales
including equipment sold to other U.S. companies for export.
SUBSIDIARIES
Aydin has three operating international subsidiaries, all
100%-owned. Aydin Controls (U.K.) Ltd., located in Hertfordshire,
England, provides sales and service for color terminals, display
processors, high resolution color monitors and telecommunications
products. In Argentina, Aydin S.A. sells and installs wireless and
other telecommunications products and systems.
The Company's subsidiary in Turkey, Aydin Yazilim ve Elektronik
A.S., is located in Ankara. Aydin Yazilim ve Elektronik is
manufacturing the last portion of the Turkish Mobile Command, Control
and Communications (C3) system in Turkey. Aydin Yazilim also writes
software for NATO and Turkish Programs in conjunction with Aydin. Aydin
Yazilim enhances Aydin's export business.
All of the above mentioned subsidiaries have extensive
technological capabilities.
See Note I to the financial statements for more information
concerning export sales.
RESEARCH AND NEW PRODUCT DEVELOPMENT
Product development expenditures in 1994 were 7.0% of Aydin's
revenues. About 48% of new product development is done through customer
contracts.
[PHOTO]
Line-of-Sight Radios and Troposcatter Terminals, Transportable
(page 3)
TELECOMMUNICATIONS
Aydin offers microwave digital and analog transmission equipment
and systems for commercial and military applications, which include
wireless and hybrid fiber coax telephony communications equipment,
cellular range extender, line-of-sight (LOS) microwave radios,
satellite earth stations, TDMA terminals and high power transmitters,
portable communications terminals, troposcatter communications and
wired Network Access products. Aydin also installs turnkey telecom
systems.
Wireless and Hybrid Fiber Coax Telephony
Aydin is developing its DigiCall(TM) product line which combines
our microwave and digital capabilities to provide voice, data and video
conferencing services over wireless or hybrid fiber coax networks.
The Aydin DigiCall(TM) Model 6032 is a radio frequency-based digital
loop carrier system that uses enhanced TDMA/FDMA to provide a cost
effective wireless link between the telecom service provider and
service subscribers. Voice quality is far superior to standard cellular
telephone.
The Aydin DigiCall(TM) Model 7024 provides telephony and PCS
services via wired or wireless access to a hybrid fiber coax cable
system owned by the Cable TV companies.
Aydin's DigiCall(TM) systems interface with all standard telephone
infrastructure equipment and are transparent to the cable TV, central
office telephone plant and subscriber telephone equipment.
The Aydin AyCell, currently under development, provides an inexpensive
method of expanding cellular telephone coverage to areas where calls
cannot currently be completed. Functioning as a user-transparent remote
antenna link, the AyCell will enable an existing cell to communicate
with areas that were previously "blacked out" due to geographical or
man-made obstructions. Applications include coverage inside convention
centers, shopping malls and sports arenas.
Aydin is continuing work on installation of a cellular telephony
network for a local cellular telephone company in Argentina by its
subsidiary.
Line-of-Sight Radios
Many types of medium and light route digital and analog microwave
radios for commercial and military use are manufactured by Aydin. These
radios include a light route AMLD analog and AMLDD digital low density
commercial radios, and the new AMCD series of medium route fixed
frequency high density digital radios. The AN/GRC-222 tactical digital
radio, used by the U.S. Army in Desert Storm is manufactured by Aydin.
For commercial and military users requiring field tunable digital
radios, the AMD series is available for tactical, strategic and
emergency uses. These radios are available for use with North American
or CEPT European data rates from 1.5 to 45 Mbps, and cover tunable
bands from 3.2 to 15 GHz.
For medium route U.S. domestic and international commercial
markets, the AMCD series of fixed frequency, high density digital
radios are offered. Both 64 quadrature amplitude modulation (QAM) and
128 Trellis Coded Modulation (TCM) techniques are used to satisfy the
bandwidth requirements of modern digital systems. E3 (34 Mbps), DS3 (45
Mbps), and SONET (51 Mbps) data rates and frequency options with 6, 7,
and 11 GHz versions are available in a 19-inch EIA rack configuration.
The low cost AMLD series of low density analog and digital radios
are intended for the light route commercial market. Sales of analog
microwave systems continue to be strong, particularly in the Third
World, as analog systems are still the most cost effective solution for
light route systems. The digital variations are available with optional
multiplexers in North American or CEPT rates up to 8 Mbps. Aydin's
radio products can be combined with the Aydin multiplex products
providing significant Aydin content in turnkey systems.
Satellite Communications
Aydin manufactures the major products used in satellite earth
stations, such as high power amplifiers (transmitters), medium power
and low noise GaAs amplifiers, up/down converters, digital data
buffers, and modems featuring forward error correction.
[PHOTO]
Multi-User Subscriber for DigiCall(TM) for Wireless or Cable TV
Telephony Networks
[PHOTO]
Field Tunable Military AN/GRC-222 Tactical Digital Radio for U.S. Army
(page 4)
Aydin and COMSAT Laboratories are cooperating to market and
manufacture the Second Generation Satellite TDMA Terminals. These
terminals, which significantly reduce the size and cost over first
generation terminals, are easily reconfigurable to meet a user's
changing traffic needs.
Current Aydin satellite communication high speed modems operate up
to 120 Mbps; a 420 Mbps modem is in development. Aydin modems are
installed in major government and commercial networks in North America
and Europe. These products are used for both primary links and as a
back-up to cable service. Customers include AT&T, KDD (Japan), British
Telecom, France Telecom, Telesat Canada, and Embratel (Brazil).
High Power Transmitters and Magnetics
Aydin continues to provide commercial high power transmitters
(HPAs) for satellite earth stations. Aydin's line of compact,
intelligent, microprocessor controlled TWT and Klystron microwave
amplifiers offers a distinct advantage over the competition. Aydin's
latest HPA product is an outdoor-mounted 400 Watt Tri-Band (C, X,
Ku-Band) TWTA suitable for mobile military SATCOM applications.
In addition to the HPA business, Aydin has maintained a steady
presence in magnetics products, supplying high power transformers to
the electronics industry. Aydin's high efficiency television
transmitter upgrade transformers are expected to show continuing
demand.
Portable Communication Terminals
Aydin is producing the AYCOM portable line-of-sight communication
terminal with two voice and data PABX, capable of providing service for
up to 96 subscribers. The AYCOM terminal contains an Aydin Hot-Standby
protected microwave radio configured for terminal operation, and an
AT&T Definity G3Vs digital automatic PABX with software selectable line
and station capabilities. The AYCOM terminal is the perfect solution
for short-haul (40-50 Km), low density remote subscriber link
requirements.
Troposcatter Communications
As one of the few manufacturers of troposcatter equipment, Aydin
has analog and digital versions of this equipment for both
transportable and fixed station use. Aydin's digital troposcatter modem
is the most modern dual or quad diversity adaptively equalized modem.
Troposcatter terminals are used in air defense systems, command and
control systems, on offshore platforms and for military tactical
communications. Aydin's digital troposcatter terminals have been in
production for years and are being delivered to international
customers.
Some customers are classified, but others include the U.S. Armed
Forces, Argentina, Australia, Chile, Egypt, Finland, Malaysia, the
Philippines, Saudi Arabia and South Korea. Aydin provides ongoing
support to these customers for maintenance and upgrades.
[PHOTO]
Satellite TDMA Terminal (Second Generation) Jointly Developed with
COMSAT
[PHOTO]
For Satellite Communications, Outdoor-Mounted, 400 Watt Tri-Band (C, X,
Ku-Band) TWTA High Power Transmitters
[PHOTO]
For Satellite Communications, 600 Watt Ku-Band TWTA High Power
Transmitter
(page 5)
Network Access Equipment
Aydin's network access unit (AYNACS 8000) provides cost effective
access to public telephone networks for today's voice, data and video
applications. It integrates all communications needs of the user of
various bandwidths and transmits them through public networks at T1
standard for domestic market, and E1 standard for the rest of the
world, to form an integrated and coherent product family. A major
development effort is underway to expand this network access product
line to include standalone Digital Access and Cross Connect Systems
(DACS), E1/T1 conversion and HDSL products.
Transcoders & Multiplexers
Aydin has a variety of T1 and E1 transcoders for voice and
voiceband applications. Aydin's product line includes T1 and E1 ADPCM
2:1 (Models 9100 and 9102) and 4:1 (Model 6441) T1 transcoders and echo
cancellers for the domestic and international marketplace. Customers
include Regional Bell Operating Companies and other service providers.
Model 9100 transcoder is equipped with unique features including bundle
cross connect and drop/insert capability, automatic routing and
protection switching and restoration. Aydin transcoders are capable of
handling Group III fax or 9600 bps modem traffic.
The 9100 series transcoders are also offered in a single 19-inch
rack mount multislot chassis for plugging in up to 11 modules.
The Aydin VDM-1000 multiplexer accepts up to 30 standard telephone
channels and combines them into E1 digital format. Both voice and data
requirements can be combined using the same multiplexer dependent on
the channel card mix. A ruggedized version is available for military
applications.
Turnkey Telecommunications Systems
Aydin continues to respond to the demands for highly reliable,
turnkey systems which may include line-of-sight radios, troposcatter
links, satellite earth stations, multiplexers, switches, fiber optic
cables, etc. Aydin has established a reputation in this sector of the
industry with turnkey systems supplied to countries such as Argentina,
Australia, Chile, Egypt, Ghana, Malaysia, Saudi Arabia, Thailand,
Turkey, Zambia and Finland.
Thick and Thin Film Microcircuits
Aydin's vertical integration strategy enables the design and
manufacture of small and highly reliable RF and microwave microcircuits
that operate over 100 MHz and through 40 GHz. These hybrid devices are
used in extreme environments and meet special performance requirements
and applicable Federal-MIL Standards. Applications include high
performance telecommunications systems, satellite terminals and
microwave simulation, as well as test equipment.
[PHOTO]
Aydin Portable Communication Terminal (Includes Radio and Switch)
[PHOTO]
Light Route, Low Cost LOS Digital Microwave Radio
[PHOTO]
Medium Route 34 and 45 Mb/s QAM or 51 Mb/s 128 TCM LOS Digital Radios
for E3, DS#, or SONET Capacities, respectively
(page 6)
DATA ACQUISITION & AVIONICS
Ground-Based Data Receive and Acquisition Systems
Aydin provides extensive capabilities in the reception,
processing, and analysis of data streams associated with spacecraft,
aircraft and missile systems or ground vehicles.
Aydin's satellite Telemetry, Tracking, and Control (TT&C) product
line continues to expand in response to the proliferation of
international commercial communication satellites. Key components of
INTELSAT's global system, and many regional systems include Aydin
Subsystems which collect and distribute satellite data.
Major remote sensing systems like NASA's Earth Observing System
(EOS) program have principal components supplied by Aydin, such as the
Space Data Receiver. Aydin is a leader in CCSDS communication
technology, which serves as a common baseline for many remote sensing
systems. Aydin also offers systems that support aircraft testing, using
data-driven architectures with advanced database management techniques.
The growing small or micro satellite industry uses Aydin's
equipment and systems to provide a cost-effective link with these
systems. The personal communication satellite systems and remote
imaging and sensing fields are all expanding and are attractive markets
for Aydin's products.
Airborne Data Acquisition and Transmission
Aydin systems and equipment gather critical information from
spacecraft, aircraft, missiles and guided weapons. The data is then
processed, formatted and transmitted to a fixed or mobile station on
the ground by VHF, UHF or microwave links. Aydin designs and
manufactures both the airborne and ground-based links for many types of
applications.
Aydin airborne data acquisition systems and subsystems are
compact, rugged and ideally suited for use in hostile environments or
where space is limited. The systems are microprocessor based, computer
programmable, and utilize the latest microcircuit technology. Aydin
airborne hardware is located on most military aircraft and missiles,
and most space programs including the Space Shuttle. Applications
include flight certification for commercial and military aircraft.
The transmission equipment manufactured by Aydin includes solid
state transmitters, receivers, and high power amplifiers. Transmission
power of up to 2 kilowatts is available in either continuous or pulsed
power operation. Aydin high power UHF transmission communication links
are currently being used by NASA to relay satellite and Space Shuttle
information from various sites around the world. Advanced airborne RF
processors, modulators, power amplifiers and receivers are used in the
latest technology missile guidance systems.
For remotely piloted vehicles and precision guided weapons, Aydin
manufactures command/control data links, video communications links and
telemetry systems.
Avionics
Aydin offers a series of MIL-STD-1553 and ARINC 429 avionic bus
systems, tape recorders, and transponders. This equipment provides on
board processing of data and communicates with other avionic systems.
These avionic products include a small, ruggedized digital tape
recorder designed to meet the demands of commercial, industrial and
military users. The tape recorder is used in applications which require
high capacity data storage. An Aydin companion playback unit with
analytical software is used for data reduction and analysis.
[PHOTO]
Wideband Satellite Telementry Transmitter
[PHOTO]
Airborne Data Acquisition Systems for Testing Commercial Aircraft for
Indonesia
(page 7)
COMPUTER EQUIPMENT & SOFTWARE
Color CRT Monitors
Aydin provides a complete line of commercial color monitor
products ranging in size from 10" to 28". The products support
applications from TV to 1600 x 1280 resolutions and may integrate with
a wide variety of touch screen technologies. With this wide range of
sizes and options, Aydin offers customers a single monitor supplier
solution.
To reinforce our commitment to customer satisfaction, Aydin has a
"Specials" department to supply customized solutions.
Aydin continues its research in CRT and flat panel display
technologies. The company expects to introduce new products in 1995
utilizing 29" CRT's, and 13" color flat panel displays at resolutions
up to 1280 x 1024. The products will include stand alone displays and
terminals.
Color Displays & Workstations
Aydin also specializes in providing display processing solutions
for the critical man-machine interface between operators and their
processes. Applications include petro-chemical, oil, gas, pulp and
paper, transportation, power generation, and power distribution
utilities, as well as most other industries.
Presently, Aydin is manufacturing and developing new products to
upgrade these existing customers and to branch out into new application
areas. Open system-based solutions are being offered which allow the
user to maintain the investment in installed system software, upgrade
hardware to current state-of-the-art, and expand capabilities beyond
the boundaries of the initial installation.
Aydin has developed and offers software packages, which emulate
the installed base of Aydin 5215 display processors in process control
industries especially by electric utilities. These emulators, which
facilitate upgrades for existing customers, are available for a number
of platforms including UNIX/X-Windows, MS-DOS, MS Windows, and
Windows NT.
The Aydin Model 7402 Industrial Workstation not only provides a
replacement for an Aydin display processor, but also functions as the
equivalent of eight individual workstations, each with state-of-the-art
computing power. UNIX, X-Windows and Ethernet ensure open architecture
compliance, along with industry standard VME and SCSI busses. The
workstation can connect to existing installed host computers using its
own integrated gateway or by means of an external gateway. Both methods
provide the user with an economical, yet powerful plug-and-play upgrade
solution.
Recently, Aydin has included a complete line of high performance
X-Terminals to address network solutions in a client-server
environment. These are available in a number of configurations,
including color (24 bit), greyscale, and monochrome. A 13" color LCD
version is available, as well as other LCD and CRT versions.
Ruggedized Workstations
Aydin's ruggedized Sun SPARCstation 10 color workstations have
been supplied to the Australian Army for use in a shelter, mobile
resource and communications management system. Also, Aydin is under
contract to the Australian Army to supply ruggedized Sun SPARCstation
10 servers as line control units for this same project. All of these
units have been tested to ground mobile shock and vibration
requirements, EMI and TEMPEST, and for operation at temperatures down
to -15 degrees C. Aydin also has a ruggedized portable "briefcase"
style workstation utilizing color LCD displays and a variety of CPUs.
[PHOTO]
Spectrum Autosync(R) 28" Large Screen MicroProcessor-Controlled High
Performance Monitor
[PHOTO]
Spectrum Autosync(R) 20" Microprocessor-Controlled VGA Monitor
(page 8)
Ruggedized Monitors
Aydin's ruggedized product line of color video monitors now
includes a 19" auto-scanning RGB monitor (Model 9010R/20). This high
resolution, ruggedized auto-scanning monitor is also offered with a
newly developed Active Magnetic Cancellation System (AMCS). The AMCS
enables the color monitor to maintain full performance under a high
magnetic field used by a warship, including submarines, to eliminate
its magnetic signature.
Aydin completed the qualification testing and delivery of
ruggedized 19" color monitors (Model 8943R/19) for use in severe ground
mobile environments including operation at low temperature down to
-35 degrees C encountered in the Swiss Alps.
Air defense consoles and radar displays for airspace management,
aircraft simulation training, shipboard combat information centers and
air defense centers are manufactured for a variety of programs.
Aydin's air defense console, the field-proven ADC-22, is operating
effectively in many current Air Defense and Radar Sites in numerous
countries. Rugged EMI/TEMPEST flat panel tactical terminals, TEMPEST
monitors, radar displays, and air defense consoles are also
manufactured by Aydin.
Software
Software is written by Aydin for commercial and military purposes
for specific applications such as radar simulation, modernization,
integration, and for command, control and communication and traffic
control.
Aydin has combined several new software technologies into an
integrated tool set. The Aydin software engineering includes
development platform independent popular software operating
environments like Ada, C, C++, FORTRAN and 4th Generation compilers and
SQL's, various functional and application dependent library utilities,
language linkers, popular relational data bases, symbolic debuggers and
automatic software configuration/documentation tools.
Aydin is experienced in developing its software in accordance with
MIL-STD-2167A to produce highly reliable, easily maintainable and very
transportable applications code.
Also, Aydin uses automated "look and feel" applications generators
like Visual BasicTM to quickly generate Man Machine Interfaces that are
essential in its systems products.
[PHOTO]
Aydin Model 7402 Industrial Workstation
[PHOTO]
Ruggedized SPARC 10 Workstation with Ruggedized 20" Color Monitor and
Keyboard/Trackball Unit
(page 9)
AIR & OTHER TRAFFIC CONTROL
Radar Approach Control (RAPCON)
Aydin has developed an advanced Mobile Radar Approach Control
Operations System which uses extensive multi-processor air traffic and
air space management software, large flat panel (plasma) displays,
local area networking, and highly automated voice and data
communications. The system can be configured for both military fixed
site and commercial air traffic control applications.
Aydin also offers complete RAPCON systems with surveillance and
precision approach radar.
UHF and VHF Radios
Aydin's UHF and VHF transmitters, receivers and power amplifiers
are used in ground-to-air communications for air traffic operations,
control and reporting centers, airport towers and ground control
approach applications. These radios are configured for either
collocated transceiver applications or split site, and can be
controlled either locally or from a remote position. For UHF operation,
Have Quick II anti-jam capability is provided.
Vessel & Other Traffic Control
Aydin offers vessel and other traffic control systems similar to
Rapcon described above with appropriate communication equipment.
[PHOTO]
GCA-1000 Series Radio for Commercial and Military Air Traffic Control
Applications
[PHOTO]
Interior View of the Operations Center for Air Traffic Control
(page 10)
RADARS, RADAR SIMULATION, INTEGRATION & MODERNIZATION
Radars
Aydin has developed a modern three-dimensional (3-D) tactical air
defense radar system, ASTAR-3. A C-band radar, it offers the latest
technology, microprocessor-based processing, sophisticated ECCM, high
system availability, low cost and advanced clutter rejection. A key
feature of ASTAR-3 is its mobility, as it can be transported on a
single truck. The ASTAR-3 development effort included the design of a
sophisticated phased array antenna.
[PHOTO]
Aydin has delivered eleven Multiple-Threat Emitter Simulator Systems
(MUTES), a Radar Simulator System for the U.S. Air Force
Radar Simulation and EW
A contract for the production of eleven Multiple Threat Emitter
Simulators (MUTES) was won by Aydin several years ago. The last system
was delivered in 1994. MUTES, nomenclatured AN/MST/T1A, is a
ground-based radar simulator, used for evaluation of airborne radar
warning and electronic countermeasures systems and pilot training.
Operating under computer control, MUTES controls the radiation
characteristics of a bank of transmitters in order to simulate the
electronic environment created by a wide range of surveillance,
tracking and guidance systems.
Radar Integration
An air defense program for NATO is RIS (Radar Integration System),
used for NATO's southern flank. Aydin's system is a LAN for radars. The
system is implemented using Ada software which links multiple local and
remote radars to a central processor for concurrent display.
Radar Modernization
The Automation of Manual Radars and integration into the NATO Air
Defense Ground Environment (NADGE) system, ordered by the Turkish
Ministry of Defense in late 1992, is in its final acceptance phases.
Aydin is under contract to the Belgian Air Force to add a Radar
Environmental Simulator and modern computer workstation to the Belgian
Air Defense System. This system contains radar video data extractors,
automated data processing including multiple radar target tracking,
Link-1 interfacing to other sites and multiple operator display
consoles. Aydin will offer this product worldwide.
[PHOTO]
Radar Integration System (RIS)
(page 11)
COMMAND, CONTROL & COMMUNICATION (C3)
Turnkey command, control and communications (C3) and complete air
defense systems, both fixed and mobile, are provided by Aydin. In-house
capability in sensor technology includes 2-D and 3-D ASTAR radars, long
haul communications using microwave radios and/or troposcatter, local
communications using LANs and ground/air/ground radios, data links for
external systems interfaces, computer systems, display systems and
other security devices.
Applications software is also provided for air surveillance, sea
surveillance, anti-submarine warfare and air defense systems.
These C3 and air defense systems are built by coupling hardware
elements with standard software elements such as link processing,
tracking, correlation, database, sensor and multisensor processing,
flight plan processing, data recording-reduction-playback, simulation
and training.
System elements include Aydin's ADC-22 standard console, large
screen plasma display consoles with soft-touch screen controls, color
CRT Operator Workstations with Windows environment, Aydin's GRC-222
radio, LINK-11, JTIDS, Aydin UHF/VHF radios with or without frequency
hopping, and a variety of radar specific devices. Using technical
expertise in a range of disciplines, such as weapons, communications,
radio theory, antenna design and placement, threat analysis, sensor and
display technology, coupled with Aydin's wide range of standard
hardware and software system elements, Aydin can be very cost effective
for C3 and air defense systems.
Work continues on the Turkish Mobile Radar Complexes program, the
C3 portion of a mobile air defense system, valued at approximately $210
million, awarded to Aydin by the Turkish Government in late 1990. Most
of the remaining work is being done at Aydin's Turkish subsidiary.
[PHOTO]
Interior View of Aydin's Command Shelter for C3 Applications
[PHOTO]
Mobile Command, Control, and Communication Shelter Assembly at Aydin
Yazilim ve Electronik A.S. in Turkey
(page 12)
SYSTEM INTEGRATION
Aydin believes that the Company is well positioned to expand its
Systems Integration (SI) business base. This belief is based on the
fact that Aydin has already demonstrated its ability to successfully
bid and win major SI contracts against U.S. and international
competition. The most recent examples are the Turkish TMRC Command,
Control, Communication, Belgium Radar, and the NATO RIS projects.
The Company successfully executed three major initiatives that
were specifically targeted to grow its SI contract base.
First, the Sales and Marketing organization was tasked to identify
target SI opportunities that fall within Aydin's existing business
areas, e.g. telecommunications; command, control, and communications;
and radar systems. This initiative resulted in the identification of
over $750M of new SI opportunities that the Company is actively
pursuing. These opportunities include the Air Traffic, Navigation,
Integration, and Coordination System (ATNAVICS), Next Generation Target
Control System (NGTCS), Digital Video Teleconferencing System (DVTS),
and the Integrated Management Communication Program (IMCP), and the new
Egyptian National Railroad Communications Project.
Second, recently in 1995, the Company combined its Controls and
Computer and Monitor Divisions, forming Aydin Corporation (East), to
improve the efficiency and competitiveness of its computer equipment,
software, air traffic control, radar integration and command, control
and communications operations.
Third, the Company sought to acquire a new Corporate President
with a proven record of success in the SI arena. This initiative was
accomplished when Dr. Donald S. Taylor was hired, effective January 3,
1995, as Corporate President and President of the recently formed Aydin
Corporation (East) Division. Before joining Aydin, Dr. Taylor was a
Vice President of Computer Sciences Corporation (CSC) and was the key
executive responsible for over $2 billion in major SI wins. As a
recognized industry expert in bidding, winning, and performing on SI
contracts, Dr. Taylor will provide invaluable strategic guidance to the
Company's plans to expand its SI contract base.
In 1995, Aydin will continue to aggressively pursue SI
opportunities world-wide, particularly in Turkey, NATO, Argentina,
Egypt, and other countries where the Company has had success in the
past. Additionally, Aydin will target selected SI opportunities with
the U.S. Government, either as a prime or as a major subcontractor.
Corporate focus and priority will be on $50M+ SI opportunities whose
technical and cost drivers are directly related to the technology and
products provided by the Company's three major product areas.
Finally, the Company recognizes that it must expand its SI
business base beyond the government military sector. Thus, the Company
will leverage its engineering and software expertise in key technology
areas to acquire SI contracts in the non-military and
commercial/industrial marketplace. Representative examples of
opportunities that the Company is considering include
computer-controlled manufacturing, turnkey process control systems,
wireless and other communications systems, multimedia systems, and
industrial simulation and training systems.
[PHOTO]
Field Testing of Turkish Mobile Radar Complex (TMRC), actually a
Command, Control, and Communications System
(page 13)
CONSOLIDATED STATEMENTS OF OPERATIONS
Aydin Corporation and Subsidiaries
YEAR ENDED DECEMBER 31,
1994 1993 1992
___________________________________________
Net sales................................................ $142,441,000 $141,475,000 $145,221,000
Costs and expenses:
Cost of sales
Department of Justice settlement.................... ( 403,000) 14,819,000 -0-
Other............................................... 104,673,000 103,735,000 101,452,000
Selling, general, and administrative................... 26,080,000 25,178,000 27,390,000
Research and development............................... 5,159,000 4,782,000 5,275,000
Interest expense (income), net......................... 5,000 273,000 ( 1,177,000)
___________ ___________ ___________
135,514,000 148,787,000 132,940,000
___________ ___________ ___________
Income (loss) before income taxes and minority interest.. 6,927,000 ( 7,312,000) 12,281,000
Income tax provision (recovery).......................... 1,880,000 ( 2,466,000) 4,458,000
___________ ___________ ___________
Income (loss) before minority interest................... 5,047,000 ( 4,846,000) 7,823,000
Less minority interest................................... -0- 121,000 761,000
___________ ___________ ___________
Net income (loss)........................................ $ 5,047,000 ($ 4,967,000) $ 7,062,000
___________ ___________ ___________
___________ ___________ ___________
Earnings (loss) per common and common equivalent share... $1.01 ($1,00) $1.40
___________ ___________ ___________
___________ ___________ ___________
See notes to consolidated financial statements.
(page 14)
CONSOLIDATED BALANCE SHEETS
Aydin Corporation and Subsidiaries
DECEMBER 31,
1994 1993
____________________________
ASSETS
CURRENT ASSETS
Cash and cash equivalents
1994-$18,220,000; 1993-$10,908,000.............................. $ 20,961,000 $ 11,822,000
Short-term investments............................................ 6,980,000 13,058,000
Accounts receivable, including contract retainage:
1994-$2,155,000; 1993 $386,000;................................. 35,351,000 33,525,000
Unbilled revenue, after progress billings:
1994-$14,982,000; 1993-$46,718,000.............................. 54,909,000 66,559,000
Inventories....................................................... 20,564,000 17,597,000
Prepaid expenses.................................................. 1,350,000 1,470,000
TOTAL CURRENT ASSETS......................................... 140,115,000 144,031,000
___________ ___________
PROPERTY, PLANT, AND EQUIPMENT, at cost,
net of accumulated depreciation and amortization:
1994-$56,103,000; 1993-$53,623,000.............................. 25,486,000 25,182,000
OTHER ASSETS........................................................ 477,000 508,000
___________ ___________
$166,078,000 $169,721,000
___________ ___________
___________ ___________
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt.............................. $ 402,000 $ 397,000
Short-term bank debt.............................................. 6,486,000 21,525,000
Accounts payable.................................................. 27,055,000 21,731,000
Accrued liabilities:
Compensation.................................................... 3,552,000 2,752,000
Department of Justice settlement................................ 3,618,000 8,015,000
Other........................................................... 3,430,000 4,528,000
Advance payments and contract billings
in excess of recognized revenue................................. 4,169,000 1,563,000
Accrued and deferred income taxes................................. 9,617,000 7,014,000
___________ ___________
TOTAL CURRENT LIABILITIES.................................... 58,329,000 67,525,000
LONG-TERM DEBT, less current maturities............................. 1,549,000 1,902,000
DEFERRED INCOME TAXES............................................... 6,983,000 6,230,000
MINORITY INTEREST................................................... -0- 105,000
STOCKHOLDERS' EQUITY
Common Stock, par value $1 authorized, 7,500,000 shares;
issued and outstanding, 1994-4,990,400 shares; 1993-4,981,273 shares.. 4,990,000 4,981,000
Additional paid-in capital........................................ 787,000 697,000
Retained earnings................................................. 93,953,000 88,906,000
Foreign currency translation effects.............................. ( 513,000) ( 625,000)
___________ ___________
99,217,000 93,959,000
___________ ___________
$166,078,000 $169,721,000
___________ ___________
___________ ___________
See notes to consolidated financial statements.
(page 15)
CONSOLIDATED STATEMENTS OF CASH FLOWS
Aydin Corporation and Subsidiaries
YEAR ENDED DECEMBER 31,
1994 1993 1992
_________________________________________
OPERATING ACTIVITIES
Net income (loss)......................................... $ 5,047,000 ($ 4,967,000) $ 7,062,000
Adjustments to reconcile net income (loss) to net cash
provided (used) by operating activities:
Depreciation and amortization......................... 4,101,000 4,473,000 4,213,000
Deferred income taxes................................. ( 7,347,000) ( 3,922,000) ( 456,000)
Minority interest..................................... -0- 121,000 761,000
Changes in other operating assets and liabilities, net:
Accounts receivable................................... ( 1,826,000) ( 7,887,000) ( 5,930,000)
Unbilled revenue...................................... 11,650,000 ( 7,504,000) (25,649,000)
Advance payments and contract billings
in excess of recognized revenue..................... 2,606,000 443,000 (15,729,000)
Inventories........................................... ( 2,967,000) 3,321,000 ( 1,910,000)
Prepaid expenses...................................... 120,000 454,000 ( 537,000)
Accounts payable...................................... 5,324,000 ( 1,667,000) 8,791,000
Accrued liabilities................................... ( 4,695,000) 10,333,000 523,000
Accrued income taxes.................................. 10,703,000 ( 266,000) ( 275,000)
Other................................................. 118,000 50,000 ( 513,000)
_____________ _____________ ____________
CASH PROVIDED (USED) BY
OPERATING ACTIVITIES............................ 22,834,000 ( 7,018,000) (29,649,000)
INVESTING ACTIVITIES
Purchase of property, plant, and equipment................ ( 4,377,000) ( 2,381,000) ( 1,429,000)
Short-term investments.................................... 6,078,000 6,872,000 11,658,000
_____________ _____________ ____________
CASH PROVIDED
BY INVESTING ACTIVITIES......................... 1,701,000 4,491,000 10,229,000
FINANCING ACTIVITIES
Payment of dividend....................................... -0- -0- ( 2,484,000)
Principal payments on long-term debt...................... ( 348,000) ( 389,000) ( 389,000)
Purchase of treasury stock................................ -0- -0- ( 750,000)
Minority investment in consolidated subsidiary............ ( 105,000) ( 2,327,000) ( 1,101,000)
Proceeds from exercise of stock options................... 96,000 454,000 390,000
Net short-term borrowings, (repayments)................... ( 15,039,000) ( 475,000) 22,000,000
_____________ _____________ ____________
CASH PROVIDED (USED)
BY FINANCING ACTIVITIES.......................... ( 15,396,000) ( 2,737,000) 17,666,000
_____________ _____________ ____________
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS............................. 9,139,000 ( 5,264,000) ( 1,754,000)
Cash and cash equivalents at
beginning of year......................................... 11,822,000 17,086,000 18,840,000
_____________ _____________ ____________
CASH AND CASH EQUIVALENTS
AT END OF YEAR.................................. $ 20,961,000 $ 11,822,000 $ 17,086,000
_____________ _____________ ____________
_____________ _____________ ____________
See notes to consolidated financial statements.
(page 16)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Aydin Corporation and Subsidiaries
Note A Summary of Significant Accounting Policies
Principles of Consolidation: The consolidated financial
statements include the accounts of the Company and its
wholly-owned subsidiaries. All significant intercompany
transactions and balances are eliminated in consolidation. During
1994, $75,000 was paid to minority shareholders in the Turkish
subsidiary raising the ownership to 100% from 99% at December 31,
1993.
Contract Accounting: Revenue on long-term type contracts in
excess of $100,000 is recorded on the percentage-of-completion
method. For such contracts, a portion of the total contract price
is included in sales in the proportion that costs incurred to date
bear to total estimated costs at completion. The impact of
periodic revisions in costs and estimated profit is reflected in
the accounting period in which the facts become known.
For all other contracts, revenue is recognized upon completion
of the contract or upon shipment of identifiable units.
The entire amount of ultimate losses estimated to be incurred
upon completion of contracts is charged to income when such losses
become known.
Contract progress billings are based upon contract provisions
for customer advance payments, contract costs incurred, and
completion of specified contract objectives. Contract billings for
partial shipments where product title passes to the customer are
not considered progress billings. Contracts may provide for
customer retainage of a portion of amounts billed until contract
completion. All contract retainage at December 31, 1994 matures in
1995.
Claims from customers of approximately $1.0 million for work
performed outside the scope of certain contracts for which the
Company anticipates recovery are included in unbilled revenue at
December 31, 1993 and 1994. Unbilled revenue at December 31, 1994
also includes approximately $2.7 million relating to contract
options exercised by a customer conditional upon completion of
certain acceptance tests.
Under the contract with the Government of Turkey, the Company
received total advance payments of $56 million in October 1990
which are being applied against future billings over a period of
approximately six years. The contract provides for price
escalation based on U.S. and Turkish inflation rates.
Inventories: Inventories are valued at the lower of cost or
market. Cost is determined using the first-in, first-out (FIFO)
and average cost method which approximates FIFO.
Depreciation and Amortization: Depreciation is provided by
the straight-line method ove the estimated useful lives of the
depreciable assets. Amortization of leasehold improvements under
operating leases is provided over the terms of the related leases
or the asset lives, if shorter.
Income Taxes: The Company accounts for income taxes on the
liability method in accordance with Statement of Financial
Accounting Standards (FAS) No. 109.
Foreign Currency Translation: In accordance with FAS No. 52,
balance sheet accounts of the Company s United Kingdom and
Argentina subsidiaries are translated from the local currency into
U.S. dollars at year-end rates while income and expenses are
translated at the weighted average exchange rate for the year. The
resulting translation gains or losses are shown as a separate
component of stockholders equity. The translation effects of the
Turkish subsidiary are reflected in the income statement as
required by FAS No. 52 because of the high inflation in the
Turkish economy. Pretax income for 1994 includes foreign currency
translation gains relating to the Turkish subsidiary of $755,000.
Earnings (Loss) Per Share: Earnings (loss) per share are
based on the weighted average number of common shares outstanding
plus shares issuable upon the assumed exercise of dilutive common
stock options. The number of shares used in earnings (loss) per
share calculations was 4,998,701 for 1994, 4,959,740 for 1993, and
5,043,063 for 1992.
Statement of Cash Flows: The Company considers all highly
liquid investments with a maturity of three months or less when
purchased to be cash equivalents.
Short-Term Investments: Short-term investments are carried at
cost which approximates market. Short-term investments at
December 31, 1994 consist of interest-bearing certificates of
deposit and time deposits with initial terms of 3 to 6 months.
Cash and short term investments include $18.2 million held as
collateral against outstanding letters of credit.
Note B - Inventories
Inventories at December 31, 1994 and 1993 consist of:
1994 1993
_____________________________
Raw materials......................$ 9,440,000 $ 8,549,000
Work in process.................... 7,419,000 6,036,000
Finished product................... 3,705,000 3,012,000
___________ __________
$20,564,000 $17,597,000
___________ __________
___________ __________
Note C - Property, Plant, and Equipment
The Company s investment in property, plant, and equipment at
December 31, 1994 and 1993 follows:
1994 1993
_____________________________
Land..............................$ 5,264,000 $ 5,264,000
Buildings......................... 20,490,000 20,459,000
Machinery and equipment........... 55,835,000 53,082,000
___________ __________
81,589,000 78,805,000
___________ __________
Less accumulated depreciation
and amortization................ 56,103,000 53,623,000
___________ __________
$25,486,000 $25,182,000
___________ __________
___________ __________
Note D - Short- and Long-Term Financing Arrangements
The Company has arrangements with certain banks whereby
$46,300,000 has been used for letters of credit and short-term
cash borrowings. These arrangements provide for interest on
borrowings at the prime lending rate (8.5% at December 31, 1994)
plus 2%. These arrangements also require informal compensating
cash balances of $150,000 and provide for commission rates on
letters of credit at 1% to 1 1/8%. As of December 31, 1994 and
1993, there were $6,486,000 and $21,525,000 of bank borrowings
under these arrangements, respectively. The banks are requesting
payment of these short-term borrowings which the Company
anticipates making during 1995 from internal cash flow. The
Company is seeking new banking arrangements to cover future
potential needs.
At December 31, 1994, $39,843,000 of letters of credit were
outstanding under these arrangements. Cash or short-term
investment collateral of $13,081,000 is required to be maintained
for letters of credit that have been issued. These have been
issued to foreign entities, principally to guarantee either
contract performance or the return of unearned advance payments in
the unlikely event that performance is not in accordance with the
contracts, or to foreign suppliers to guarantee payment to them of
the amount due. Of the total amount outstanding, $30.3 million
pertains to the Company s contract with the Government of Turkey.
This letter of credit was issued pursuant to a Credit Agreement
with certain banks. The term extends to October 4, 1996 or until
the letter of credit is reduced to zero, whichever occurs first.
Cash or short-term investment collateral is required to be
maintained equal to 1/3 of the balance outstanding in the letter
of credit which amounts to $10.1 million. In addition to certain
financial covenant requirements, the Credit Agreement contains
restrictions concerning the payment of dividends and purchase of
treasury stock which in the aggregate are limited to 50% of net
income for the prior four fiscal quarters.
Additional letters of credit of $5.1 million pertaining to the
Turkish contract and other requirements have been issued by a
Turkish bank for the Company s Turkish subsidiary. These letters
of credit are not part of the Company s line of credit. Cash or
short-term investment collateral is required to be maintained by
the Turkish subsidiary equal to 100% of the balance outstanding on
these letters of credit.
(page 17)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Aydin Corporation and Subsidiaries
Note E - Long-Term Debt
Long-term debt at December 31, 1994 and 1993 consists of the
following:
DECEMBER 31,
1994 1993
______________________
Fixed-rate mortgage payable $8,000 monthly through 2001,
including interest at 8 1/4%................................... $ 497,000 $ 557,000
Variable-rate mortgage bearing interest at 70% of the prime rate
(6.0% at December 31, 1994), quarterly principal payments of
$55,000 plus interest through November 30, 1997................ 655,000 819,000
Variable-rate mortgage bearing interest at 70% of the prime rate
(6.0% at December 31, 1994), quarterly principal payments of
$31,000 plus interest through May 1, 2001.................... 799,000 923,000
_________ _________
1,951,000 2,299,000
Less current maturities.......................................... 402,000 397,000
_________ _________
$1,549,000 $1,902,000
_________ _________
_________ _________
Interest expense on long- and short-term debt for the years 1994,
1993, and 1992 amounted to $1,142,000, $1,310,000, and $639,000,
respectively. Interest paid for the years 1994, 1993, and 1992
amounted to $1,226,000, $1,402,000, and $409,000, respectively.
Land and buildings having a net carrying value of $5,276,000 at
December 31, 1994 have been pledged as collateral for the mortgages.
Aggregate maturities of long-term debt for each of the years 1995
through 1999 are as follows: 1995-$402,000; 1996-$407,000;
1997-$413,000; 1998-$201,000; and 1999-$207,000.
Note F - Stockholders' Equity
The changes in common stock, additional paid-in capital, treasury
stock, retained earnings, and foreign currency translation effects
durinq the years 1992, 1993, and 1994 were as follows:
Foreign
Common Additional Currency
Stock Paid-In Treasury Retained Translation
Par $1 Capital Stock Earnings Effects
__________________________________________________________
Balance, January 1, 1992
(4,948,213 common shares) ...............$ 4,948,000 $ 464,000 $ -0- $89,295,000 $ -0-
Issuance of 34,536 shares on exercise of
stock options............................ 35,000 355,000
Tax benefit related to shares acquired by
employees under stock options............. 124,000
Acquisition of 37,450 shares of treasury
stock in the open market ................. (602,000)
Acquisition of 6,102 shares of treasury stock
received from employees as payment for
stock option exercises.................... (148,000)
Retirement of 43,552 treasury shares ....... (44,000) (706,000) 750,000
Dividend declared ($.50 per share) in
March 1992 and paid in March 1992 ........ (2,484,000)
Foreign currency translation adjustment .... (628,000)
Net income ................................. 7,062,000
__________ __________ ________ ___________ _________
Balance, December 31, 1992
(4,939,197 common shares) ................ 4,939,000 237,000 -0- 93,873,000 (628,000)
Issuance of 42,076 shares on exercise of
stock options............................. 42,000 412,000
Tax benefit related to shares acquired by
employees under stock options............. 48,000
Foreign currency translation adjustment .... 3,000
Net loss.................................... (4,967,000)
__________ __________ ________ ___________ _________
Balance, December 31, 1993
(4,981,273 common shares) ................. 4,981,000 697,000 -0- 88,906,000 (625,000)
Issuance of 9,127 shares on exercise of
stock options ............................. 9,000 87,000
Tax benefit related to shares acquired by
employees under stock options.............. 3,000
Foreign currency translation adjustment...... 112,000
Net income................................... 5,047,000
__________ __________ ________ ___________ _________
Balance December 31, 1994
(4,990,400 common shares) ................$4,990,000 $ 787,000 $ -0- $93,953,000 ($513,000)
(page 18)
NOTES TO CONSOLIDATED FINANCIAL STATMENTS (CONTINUED)
Aydin Corporation and Subsidiaries
Note G - Stock Options
Pursuant to stock option plans, the Company has granted
certain officers, directors, and key employees options to
purchase shares of its common stock. Options granted under the
plans must have an option price determined by the Board of
Directors, but in any event, not less than the fair market
value of the date of grant except for the 1984 plan of 187,500
shares which permits the Board of Directors to set an option
price up to 50% less than the fair market value of the stock on
the date of grant. Generally, options become exercisable
one-fourth annually beginning one year after grant, on a
cumulative basis, and expire five years after grant.
There is no charge to income with respect to stock options
under the plans. A summary of the changes in options during
1992, 1993, and 1994 follows:
Shares Shares
Under Available
Option for Option
____________________
At January 1, 1992..................... 289,245 42,895
Authorization of individual option... -0- 215,000
Options granted:
Option plan........................ 27,750 (27,750)
Individual options................. 215,000 (215,000)
Options exercised
(average price, $11.31)........ (34,536) -0-
Options canceled..................... (19,896) 19,896
_______ ______
At December 31, 1992................... 477,563 35,041
Options granted:
Option plan........................ 42,450 (42,450)
Options exercised
(average price $10.80)........ (42,076) -0-
Options canceled..................... (154,644) 154,644
Cancellation of authorization........ -0- (100,000)
_______ ______
At December 31, 1993................... 323,293 47,235
Options granted:
Option plan........................ 164,600 (164,600)
Individual options................. 30,000 (30,000)
Options exercised
(average price, $10.55)....... (9,127) -0-
Options cancelled.................... (185,648) 185,648
Authorization of 1994 options........ -0- 150,000
Cancellations of authorization....... -0- (97,000)
_______ ______
At December 31, 1994
(125,164 exercisable)........ 323,118 91,283
_______ ______
_______ ______
These options expire on various dates beginning January 1995 and
ending December 1999. The average exercise price of options
outstanding at December 31, 1994 is $11.66.
Note H - Taxes on Income
The provision (recovery) for income taxes consists of the
following:
Federal State Foreign Total
______________________________________________________
1994:
Current ..............................$ 973,000 $ 2,452,000 $9,224,000
Deferred.............................. (1,418,000) -0- (7,347,000)
Charge equivalent to tax benefit
related to shares acquired by
employees under stock options....... 2,000 1,000 -0- 3,000
__________ __________ __________ __________
($ 128,000) ($ 444,000) $2,452,000 $1,880,000
__________ __________ __________ __________
__________ __________ __________ __________
1993:
Current...............................($ 339,000) $ 62,000 $1,685,000 $1,408,000
Deferred..............................( 3,110,000) ( 812,000) -0- (3,922,000)
Charge equivalent to tax benefit
related to shares acquired by
employees under stock options....... 39,000 9,000 -0- 48,000
__________ __________ __________ __________
($3,410,000) ($ 741,000) $1,685,000 $2,466,000
__________ __________ __________ __________
__________ __________ __________ __________
1992:
Current............................... $3,022,000 $ 358,000 $1,410,000 $4,790,000
Deferred.............................. ( 323,000) ( 133,000) -0- ( 456,000)
Charge equivalent to tax benefit
related to shares acquired by
employees under stock options....... 99,000 25,000 -0- 124,000
$2,798,000 $ 250,000 $1,410,000 $4,458,000
__________ __________ __________ __________
__________ __________ __________ __________
(page 19)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Aydin Corporation and Subsidiaries
The components of deferred income tax balances follow.
No valuation allowances were required.
YEAR ENDED DECEMBER 31,
1994 1993 1992
________________________________________
Contract accounting................... $ 3,712,000 $11,740,000 $14,953,000
Excess tax over book depreciation..... 2,765,000 2,824,000 3,953,000
Inventory valuation................... ( 1,141,000) ( 1,599,000) ( 1,403,000)
Alternative minimum tax............... -0- ( 50,000) -0-
State deferred taxes.................. ( 269,000) ( 786,000) ( 1,408,000)
Other, net............................ ( 633,000) ( 348,000) ( 27,000)
___________ ___________ ___________
$ 4,434,000 $11,781,000 $15,704,000
___________ ___________ ___________
___________ ___________ ___________
A reconciliation between the federal statutory rate and the
effective income tax rate (computed by dividing income taxes by
income before income taxes and minority interest) is as
follows:
1994 1993 1992
_____________________
Federal statutory rate.......................... 34.0% (34.0%) 34.0%
State income taxes net of federal tax benefit... (3.7) (6.7) 1.4
Benefit from nontaxable FSC income.............. (7.1) (6.3) (2.3)
Effects of higher foreign income tax rates...... 2.5 5.6 2.3
Statutory federal rate increase to 35% on
income over $10 million........................ - 2.6 -
Non-deductible Department of Justice
settlement cost.............................. - 4.3 -
Other, net....................................... 1.4 .8 .9
Effective income tax rate........................27.1% (33.7%) 36.3%
Income tax payments, net of refunds, amounted to $5,066,000 in
1992 and $2,138,000 in 1993. Income tax refunds, net of
payments, amounted to $940,000 in 1994.
The Company has not provided deferred income taxes of
approximately $600,000 on cumulative unremitted earnings of
foreign subsidiaries, based on management's intention to
permanently invest such earnings in the foreign jurisdictions.
Note I - Export Sales, Major Customers, and Foreign Operations
The Company operates predominantly in the electronics
manufacturing industry. Export sales by geographic area are as
follows:
1994 1993 1992
_________________________________________
Asia................. $ 6,788,000 $ 8,688,000 $ 2,553,000
Africa............... 2,553,000 2,301,000 1,969,000
Europe............... 27,137,000 42,220,000 53,084,000
North America........ 1,852,000 528,000 869,000
South America........ 1,005,000 475,000 447,000
Other................ 384,000 844,000 306,000
___________ ___________ ___________
Total export sales. $39,719,000 $55,056,000 $59,228,000
___________ ___________ ___________
___________ ___________ ___________
The U.S. Government, the Government of Turkey and CTI
(Argentina) were the only customers to whom sales exceeded 10%
of consolidated sales during any of the past three years. Sales
to U.S. Government agencies, principally the Department of
Defense, amounted to $42,015,000, $38,600,000 and $39,347,000
in 1994, 1993 and 1992, respectively. Sales to the Government
of Turkey amounted to $24,888,000, $45,134,000 and $48,738,000
in 1994, 1993 and 1992, respectively. Accounts receivable at
December 31, 1994 includes $12.5 million from the Government of
Turkey. Sales to CTI amounted to $15,739,000 in 1994.
Foreign assets included in the consolidated balance sheet
amounted to $33.7 million, $22.9 million and $23.4 million at
December 31, 1994, 1993 and 1992, respectively. Of these
amounts, $6.7 million, $10.0 million and $19.1 million, at
December 31, 1994, 1993 and 1992, respectively, is cash and
short-term investments of the Company's Turkish subsidiary
consisting of U.S. dollar denominated interest-bearing time
deposits. In addition, at December 31, 1994 cash and short-term
investments at the Argentina subsidiary was $1.9 million.
Foreign sales and pretax income for 1994 amounted to $37.2
million and $6.7 million, respectively, of which $21.1 million
and $2.1 million, respectively, was for the Argentina
subsidiary. Foreign sales and pretax income for 1993 amounted
to $23.0 million and $3.9 million, respectively. Foreign sales
and pretax income for 1992 amounted to $19.3 mililion and $3.3
million, respectively.
Note J - Contingencies
The Company along with others is responsible for the cost of
cleanup at a site leased by the Company prior to 1984 under an
order of the State of California. The cost to date for the
cleanup of the California site over the past ten years has been
approximately $5.8 million. Settlement has been reached with
three of four insurance carriers for approximately $6.7 million
which was received during 1993 and applied to the cleanup costs
previously incurred and cost to go. A court has granted a
declaratory judgment requiring the fourth carrier to pay all
cleanup costs in excess of the $6.7 million already received.
This judgment is being appealed by the fourth carrier.
Management believes the ultimate resolution of this entire
matter will not have a materially adverse effect on the
financial position or results of operations.
(page 20)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Aydin Corporation and Subsidiaries
The IRS, as part of a field examination, has disallowed certain
prior years research and development tax credits taken by the
Company amounting to approximately $3.5 million plus related
interest. The Company is challenging this finding with the
appeals office of the IRS. Management is of the opinion that
the ultimate resolution will not have a materially adverse
effect on the financial position or results of operations.
Note K - Settlement with the Department of Justice
On January 5, 1994, the Company reached settlement agreements
with the U.S. Army and the Department of Justice ("DOJ") with
reference to the AN/GRC-222 microwave radio contract. Under the
terms of the agreement, the U.S. Army will reinstate the radio
contract by withdrawing its previous termination for default
issued November 30, 1993. Further, the investigation and all
possible charges against the Company by the DOJ are settled.
On January 6, 1994, pursuant to the terms of settlement with
DOJ, the Company entered a plea of guilty to the falsification
of testing data, charges to which two of its low level
employees previously pled guilty to in March 1993, and the plea
was accepted by the court (U.S. District Court for the Northern
District of California). The Company is reinstated on its
AN/GRC-222 microwave radio contract with all of its previous
terms and conditions. Further, the Company withdrew its
contract claims, is doing additional work for the Army at no
additional cost, and paid $2 million as an added consideration.
The total impact on pretax income of this settlement was
approximately $14,819,000, which has been charged to the 1993
fourth quarter earnings. The additional work and the related
expenditures will be spread over a period of three years or
longer.
REPORT OF INDEPENDENT AUDITORS
Report of Grant Thornton LLP
Independent Auditors
Stockholders and Board of Directors
Aydin Corporation
We have audited the consolidated balance sheet of Aydin
Corporation and subsidiaries as of December 31, 1994, and the
related consolidated statements of operations and cash flows
for the year then ended. These consolidated financial
statements are the responsibility of the Company s management.
Our responsibility is to express an opinion on these financial
statements based on our audit. The consolidated financial
statements of Aydin Corporation and subsidiaries as of and for
the years ended December 31, 1993 and 1992, were audited by
other auditors whose report dated February 25, 1994, expressed
an unqualified opinion on those statements.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used
and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We
believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the 1994 consolidated financial statements
referred to above present fairly, in all material respects, the
financial position of Aydin Corporation and subsidiaries as of
December 31, 1994, and the results of its operations and its
cash flows for the year then ended, in conformity with
generally accepted accounting principles.
/s/ Grant Thornthon LLP
Philadelphia, Pennsylvania
February 20, 1995
(page 21)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Aydin Corporation and Subsidiaries
Liquidity and Sources of Capital
Cash provided from operations during 1994 was $22.8 million.
In addition to the net income, the primary reason for the
positive cash flow was a $11.6 million decrease in unbilled
revenue mainly because of an excess of billings rendered on the
TMRC-C3 contract with the Government of Turkey versus costs
incurred and resulting revenue recorded for this contract.
The positive cash from operations was used to repay $15.0
million of short-term bank debt and purchase capital equipment
of $4.4 million.
Of the $27.9 million of cash and short-term investments at
December 31, 1994, approximately $18.2 million is required to
be maintained as collateral against letters of credit on the
Turkish and other contracts.
Cash used by operations during 1993 was $7.0 million. The
primary reasons for the cash outflow included: (1) a $7.5
million increase in unbilled revenue mainly because of costs
incurred and resulting revenue recognized on the TMRC-C3
contract with the Government of Turkey in excess of billings
rendered; and (2) a $7.9 million increase in accounts
receivable primarily because of the commencement in 1993 of
billings on the TMRC-C3 contract especially in the fourth
quarter, offset partially by $4.0 million of cash received in
settlement of insurance litigation related to environmental
matters. Partially offsetting these cash outflows was a $3.3
million decline in inventories and $4.5 million of
depreciation.
Also during 1993, $2.4 million was spent for capital
additions and $2.8 million was spent to increase the ownership
in the Turkish subsidiary from 71% at December 31, 1992 to 99%
at December 31, 1993.
The Company at December 31, 1994 has short-term bank
borrowings outstanding of $6.5 million. The banks are
requesting payment of these short-term borrowings. The Company
anticipates making full payment of these bank loans during 1995
from internal cash flow. The Company is seeking new banking
arrangements to cover its future potential needs.
Based on the present backlog and projected cash flows, the
Company anticipates financing its capital needs from internal
sources and from some short-term borrowings in the foreseeable
future.
Results of Operations
1994 versus 1993: Net sales for 1994 were basically flat
compared to 1993. U.S. Government sales, although still
depressed, increased to 29% of total sales from 27% last year.
Export and foreign sales declined to 53% of total sales from
56% last year because of a slow down in sales on the TMRC-C3
contract, partially offset by higher sales at the Company s
South American subsidiary. There is no assurance that the
higher level of sales and earnings at the Argentina subsidiary
will continue. Domestic industrial sales increased slightly to
18% of total sales from 17% last year.
Cost of sales, other than the settlement with the Department
of Justice, as a percentage of sales was essentially the same
as last year. Costs incurred during 1994 against the settlement
amounted to $3,994,000 and have been charged against the
settlement liability established at December 31, 1993. During
1994 the settlement liability was further reduced by $403,000,
reflecting a decrease in the December 31, 1993 estimate of
ultimate costs to be incurred.
Selling, general and administrative expenses increased by
$902,000 (4%) in 1994 primarily as a result of a higher level
of proposal activity and resulting proposal costs.
The effective income tax rate was 27% for 1994 compared to a
34% benefit for 1993. The lower rate for 1994 is primarily the
result of the impact on the rates of the 1993 pretax loss
compared to pretax income in 1994.
1993 versus 1992: Net sales of $141,475,000 for 1993
decreased by $3,746,000 from 1992, a decline of 3%. Industrial
sales declined to 17% of total sales from 19% last year due to
continued market weakness in the Company s market niches. U.S.
Government sales declined slightly and were offset by a small
increase in export and foreign sales which now represent 56% of
total sales versus 54% last year.
The $14,819,000 1993 special settlement charge included in
the cost of sales caption is the result of the Company s
decision to assume responsibility and plead guilty to criminal
charges of falsification of test data on a U.S. Government
contract (GRC-222), actions to which two low level employees
had previously pled guilty. Of this charge, $2.0 million were
cash payments made after December 31, 1993. The balance
represents additional work and to upgrade the GRC-222 microwave
radios for the U.S. Army and Aydin s dropping of claims it had
filed against the Army.
Other cost of sales as a percentage of sales increased to
73.3% from 69.9% last year as a result of a more competitive
U.S. Government business environment in 1993, a more favorable
sales mix in 1992 and cost overruns on certain contracts in
1993.
Selling, general and administrative expenses declined by
$2,212,000 from 1992 because of cost reductions necessitated by
the declines in sales and backlog.
Net interest expense was $273,000 in 1993 compared to last
year s net interest income of $1,177,000. The unfavorable swing
reflects the higher level of this year s short-term borrowings
and a decreased level of cash available for investment this
year.
The effective income tax rate decreased to 34% for 1993 from
36% last year. The primary reason for the lower 1993 income tax
rate is a function of a pretax loss in the U.S. in 1993 which
means that the following elements of tax reduced the effective
rate: foreign income tax provisions, non-deductible costs in
connection with the Department of Justice settlement, and
theimpact on deferred taxes of the increased U.S. statutory
rate effective January 1, 1994. Partially offsetting these
effects was the tax benefit from non-taxable Foreign Sales
Corporation income and a higher state income tax recovery on
the 1993 U.S. pretax loss than the 1992 state income tax
provision. See Note H for the impact of each of these items.
(page 22)
SELECTED FINANCIAL DATA
Aydin Corporation and Subsidiaries
($000 omitted except for per share amounts)
1994 1993* 1992 1991* 1990
_______________________________________________________
For the Year:
Net sales........................... $ 142,441 $ 141,475 $ 145,221 $ 158,544 $142,269
Cost of sales....................... 104,270 118,554* 101,452 113,329 99,873
Income (loss) before income taxes
and minority interest............. 6,927 ( 7,312)* 12,281 17,195 10,065
Net income (loss)................... 5,047 ( 4,967)* 7,062 10,787 7,465
Earnings (loss) per share........... 1.01 ( 1.00)* 1.40 2.13 1.51
Cash dividend per share............. -0- -0- .50 .50 -0-
Return on average stockholders equity. 5% ( 5%) 7% 12% 9%
At Year End:
Total Assets........................ $ 166,078 $ 169,721 $ 172,332 $ 154,493 $ 179,847
Working Capital..................... 81,786 76,506 80,578 82,287 73,352
Long-term debt...................... 1,549 1,902 2,295 2,688 3,076
Stockholders' equity................ 99,217 93,959 98,421 94,707 85,872
Stockholders' equity per share...... 19.88 18.86 19.93 19.14 17.49
<FN>
* Cost of sales includes a fourth quarter 1993 charge of
$14,819,000 in connection with a settlement reached with the
Department of Justice. After tax, this charge amounted to
$9,430,000 or $1.90 per share.
** In the fourth quarter of 1991, the Company adopted
Statement of Financial Accounting Standard (FAS) No. 109.
The effect of adoption of FAS No. 109 was not material.
QUARTERLY FINANCIAL DATA
($000 omitted except for per share amounts)
1st 2nd 3rd 4th Year
_____________________________________________________
For the Year:
1994 (with first 3 quarters
as restated):
Net sales..................... $ 33,975 $ 38,635 $ 35,053 $ 34,778 $142,441
Cost of sales................. 25,455 28,283 24,931 25,601 104,270
Income before income taxes.... 1,867 1,686 2,158 1,216 6,927
Net income.................... 1,193 1,272 1,304 1,278* 5,047
Earnings per share............ .24 .25 .26 .26* 1.01
<FN>
* Fourth quarter net income was increased by $500,000 ($.10 per
share) to reflect a reduction in the tax provision resulting
from a decrease in deferred state income taxes only partially
offset by an increase in taxes payable.
1st 2nd 3rd
___________________________
1994 (as originally reported):
Net sales................... $29,445 $27,306 $31,918
Cost of sales............... 21,812 18,137 22,621
Income before income taxes.. 1,371 1,398 1,691
Net income.................. 1,027 1,130 1,096
Earnings per share.......... .21 .22 .22
<FN>
The first three quarters have been restated as a result of not
including the results of a foreign subsidiary. In previous
years, the operations of this subsidiary were not significant.
1st 2nd 3rd 4th Year
_____________________________________________
1993:
Net sales.......................... $37,434 $36,969 $31,577 $35,495 $141,475
Cost of sales...................... 26,642 27,206 22,896 41,810* 118,554*
Income (loss) before income taxes
and minority interest............ 2,462 1,727 1,780 (13,281)* ( 7,312)*
Net income (loss).................. 1,436 1,152 1,067 ( 8,622)* ( 4,967)*
Earnings (loss) per share.......... .29 .23 .21 ( 1.73)* ( 1.00)*
<FN>
* Cost of sales includes a fourth quarter 1993 charge of
$14,819,000 in connection with a settlement reached with the
Department of Justice. After tax, this charge amounted to
$9,430,000 or $1.90 per share.
(page 23)
COMMON STOCK PRICES
Aydin Corporation and Subsidiaries
Aydin Corporation is listed on the New York Stock Exchange,
symbol AYD.
1994: High Low 1993: High Low
_____________________________ ______________________________
Fourth Q...13 1/2 10 1/8 Fourth Q.....16 1/2 11 3/4
Third Q....11 3/8 10 1/8 Third Q......18 3/8 15 1/2
Second Q...13 3/8 10 5/8 Second Q.....16 3/8 13 3/8
First Q....14 1/4 11 7/8 First Q......17 7/8 14 1/2
STOCKHOLDER AND DIVIDEND INFORMATION
Aydin has approximately 6,000 stockholders of record and
individual participants in security position listings. Aydin
has no present plans to pay any special cash dividends.
ANNUAL MEETING
The Company's Annual Meeting of Stockholders will be held on
Friday, April 28, 1995, at 3:00 p.m., in the Corporate Office
at 700 Dresher Road, Horsham, Pennsylvania. Stockholders are
cordially invited to attend the Annual Meeting.
FORM 10K
A copy of Aydin Corporation's Annual Report on Form 10K may be
obtained without charge by writing to Aydin Corporation, 700
Dresher Road, P.O. Box 349, Horsham, PA 19044, Attn: Investor
Relations.
HISTORY OF OPERATIONS*
Cost of Income Income(Loss)
Year Net Sales Sales (Loss) Per Share
1994 $142,441,000 $104,270,000 $ 5,047,000 $1.01
1993** 141,475,000 118,554,000 ( 4,967,000) (1.00)
1992 145,221,000 101,452,000 7,062,000 1.40
1991 158,544,000 113,329,000 10,787,000 2.13
1990 142,269,000 99,873,000 7,465,000 1.51
1989 157,486,000 108,665,000 9,190,000 1.81
1988 169,655,000 120,733,000 8,368,000 1.66
1987*** 149,240,000 101,634,000 8,803,000 1.56
1986 136,791,000 90,539,000 6,952,000 1.21
1985 133,019,000 92,094,000 3,799,000 .57
1984**** 137,500,000 90,811,000 8,965,000 1.30
1983 152,911,000 101,158,000 15,778,000 2.21
1982 124,308,000 84,910,000 10,284,000 1.46
1981 100,424,000 70,611,000 6,321,000 .90
1980 102,908,000 75,753,000 7,319,000 1.05
1979 64,167,000 45,599,000 4,062,000 .59
1978 47,443,000 33,566,000 2,676,000 .40
1977 51,436,000 36,864,000 3,457,000 .53
1976 42,413,000 31,752,000 2,072,000 .33
1975 35,426,000 28,032,000 910,000 .13
1974 32,569,000 23,750,000 1,646,000 .26
1973 28,324,000 20,474,000 1,380,000 .19
1972 22,176,000 17,414,000 386,000 .03
1971 15,632,000 12,251,000 (538,000) (.13)
1970 16,301,000 13,115,000 (1,297,000) (.27)
1969 12,733,000 9,052,000 468,000 .09
1968 4,380,000 3,121,000 175,000 .05
1967
(3 months) 1,528,000 1,142,000 75,000 -
<FN>
* Discontinued operations and extraordinary items are
excluded from above table.
** As a result of a settlement with the Department of
Justice, there was a pretax charge of $14,819,000 or
$9,430,000 after tax ($1.90 per share).
*** Excludes cumulative effect on prior years to December
31, 1986 of adopting new method of accountinq for income
taxes.
**** As a result of the Tax Reform Act of 1984, there was a
charge of $750,000 to Net Income in 1984, or $.11 per
share.
(page 24)
Exhibit 21
SUBSIDIARIES OF REGISTRANT
NAME (and name under which JURISDICTION PERCENTAGE
they do business-same) OF INCORPORATION OWNED
______________________________ ________________ __________
Aydin Controls (U.K.) Limited United Kingdom 100%
Aydin, S.A. Argentina 100%
Aydin Foreign Sales Limited Guam 100%
Aydin Investments, Inc. Delaware 100%
Aydin Yazilim ve Elektronik
Sanayi A. . Turkey 100% (1)
<FN>
(1) Ninety nine (99%) percent of the 100% is owned by registrant's
wholly owned subsidiary, Aydin Investments, Inc.
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Aydin Corporation:
We consent to incorporation by reference in Registration Statement
Numbers: 33-34863, 33-22016, 33-14284, 2-97645, 2-93603, 2-77623,
and 2-64093 on Form S-8 of Aydin Corporation of our reports dated
February 20, 1995, relating to the consolidated balance sheet of
Aydin Corporation and subsidiaries as of December 31, 1994 and the
related consolidated statements of operations and cash flows, and
related schedules for the year ended December 31, 1994, which reports
appear in or incorporated by reference in the 1994 annual report on
Form 10-K of Aydin Corporation.
/s/ Grant Thornton LLP
Grant Thornton LLP
Philadelphia, Pennsylvania
March 29, 1995
Exhibit 23.2
KPMG Peat Marwick LLP
1600 Market Street
Philadelphia, PA 19103-7212
The Board of Directors
Aydin Corporation:
We consent to incorporation by reference in the Registration
Statement Numbers: 33-53549, 33-34863, 33-22016, 33-14284, 2-97645,
2-93603, 2-77623, and 2-64093 on Form S-8 of Aydin Corporation of our
report dated February 25, 1994, relating to the consolidated balance
sheet of Aydin Corporation and subsidiaries as of December 31, 1993,
and the related consolidated statements of operations and cash flows
and related schedule for each of the years in the two-year period
then ended, which report appears in the 1994 annual report on Form
10-K of Aydin Corporation.
/s/ KPMG Peat Marwick LLP
Philadelphia, Pennsylvania
March 29, 1995
Exhibit 99.1
INDEP ENDENT AUDITORS' REPORT
Under date of February 20, 1995, we reported on the consolidated
balance sheet of Aydin Corporation and subsidiaries as of December
31, 1994, and the related consolidated statements of operations and
cash flows for the year ended December 31, 1994, as contained in the
1994 annual report to stockholders. These consolidated financial
statements and our report thereon are incorporated by reference in
the annual report on Form 10-K for the year 1994. In connection with
our audit of the aforementioned consolidated financial statements, we
also have audited the related financial statement schedules as listed
in the accompanying index. These financial statement schedules are
the responsibility of the Company's management. Our responsibility
is to express an opinion on these financial statement schedules based
on our audit.
In our opinion, such financial statement schedules, when considered
in relation to the basic consolidated financial statements taken as a
whole, present fairly, in all material respects, the information set
forth therein.
/s/ Grant Thornton LLP
Grant Thornton LLP
Philadelphia, Pennsylvania
February 20, 1995
Exhibit 99.2
KPMG Peat Marwick LLP
1600 Market Street
Philadelphia, PA 19103-7212
INDEPENDENT AUDITORS' REPORT
Stockholders and Board of Directors
Aydin Corporation
We have audited the consolidated balance sheet of Aydin Corporation
and subsidiaries as of December 31, 1993, and the related
consolidated statements of operations and cash flows for each of the
years in the two-year period then ended which financial statements
are incorporated by reference in this Form 10-K from the Company's
1994 Annual Report to Stockholders. In connection with our audits of
the consolidated financial statements, we have also audited the
financial statement schedule listed in the accompanying index for the
two-years ended December 31, 1993 and 1992. These consolidated
financial statements and financial statement schedule are the
responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements and financial
statement schedule.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial
position of Aydin Corporation and subsidiaries as of December 31,
1993, and the results of their operations and their cash flows for
each of the years in the two-year then ended, in conformity with
generally accepted accounting principles. Also, in our opinion, the
related financial statement schedule when considered in relation to
the basic consolidated financial statements taken as a whole,
presents fairly, in all material respects, the information set forth
therein.
/s/ KPMG Peat Marwick LLP
Philadelphia, Pennsylvania
February 25, 1994