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<SEC-DOCUMENT>0000950124-96-001922.txt : 19960506

<SEC-HEADER>0000950124-96-001922.hdr.sgml : 19960506

ACCESSION NUMBER:     0000950124-96-001922

CONFORMED SUBMISSION TYPE:   10-Q

PUBLIC DOCUMENT COUNT:       6

CONFORMED PERIOD OF REPORT:  19960331

FILED AS OF DATE:     19960503

SROS:         NYSE

 

FILER:

 

    COMPANY DATA:

       COMPANY CONFORMED NAME:          IDEX CORP /DE/

       CENTRAL INDEX KEY:           0000832101

       STANDARD INDUSTRIAL CLASSIFICATION:    PUMPS & PUMPING EQUIPMENT [3561]

       IRS NUMBER:              363555336

       STATE OF INCORPORATION:         DE

       FISCAL YEAR END:         1231

 

    FILING VALUES:

       FORM TYPE:    10-Q

       SEC ACT:      1934 Act

       SEC FILE NUMBER:  001-10235

       FILM NUMBER:      96556244

 

    BUSINESS ADDRESS:

       STREET 1:     630 DUNDEE RD STE 400

       CITY:         NORTHBROOK

       STATE:        IL

       ZIP:          60062

       BUSINESS PHONE:       7084987070

</SEC-HEADER>

<DOCUMENT>

<TYPE>10-Q

<SEQUENCE>1

<DESCRIPTION>FORM 10-Q

<TEXT>

 

<PAGE>   1

 

 

                       SECURITIES AND EXCHANGE COMMISSION

                            Washington, D.C.  20549

                                  ____________

 

                                   Form 10-Q

 

     X      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

    ----    OF THE SECURITIES EXCHANGE ACT OF 1934

 

            For the quarter ended March 31, 1996

 

                                       OR

 

            TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

    ----    OF THE SECURITIES EXCHANGE ACT OF 1934

   

            For the transition period from          to

                                           --------    --------

                         Commission file number 1-10235

 

                                IDEX Corporation                          

             (Exact name of registrant as specified in its charter)

 

<TABLE>

  <S>                                       <C>

             Delaware                           36-3555336           

  ------------------------------    ----------------------------------

  State or other jurisdiction of             (I.R.S. Employer

  incorporation or organization             Identification No.)

 

 

       630 Dundee Road

      Northbrook, Illinois                           60062           

- ----------------------------------  ----------------------------------

     (Address of principal                        (Zip Code)

       executive offices)

</TABLE>

 

Registrant's telephone number, including area code  (847) 498-7070

 

- ----------------------------------------------------------------------

Former name, former address and former fiscal year,

if changed since last report.

 

Indicate by check mark whether the registrant (1) has filed all reports

required to be filed by Section 13 or 15(d) of the Securities Exchange Act of

1934 during the preceding 12 months (or for such shorter period that the

registrant was required to file such reports), and (2) has been subject to such

filing requirements for the past 90 days.    Yes X   No  

                                                ---    ---

Number of shares of common stock of IDEX Corporation ("IDEX" or the "Company")

outstanding as of April 29, 1996:  19,181,604 shares.

 

Documents Incorporated by Reference:  None.

<PAGE>   2

 

                         PART I. FINANCIAL INFORMATION

 

Item 1.  Financial Statements

 

                       IDEX CORPORATION AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS  

               (in thousands, except share and per share amounts)

<TABLE>

<CAPTION>

                                                          March 31,      December 31,

                                                            1996             1995   

                                                         -----------     ------------

                                                         (unaudited)

 <S>                                                      <C>            <C>   

 ASSETS                                         

                                               

  Current assets                               

   Cash and cash equivalents.................              $  7,656         $  5,937

   Receivables - net.........................                72,616           70,338

   Inventories...............................                99,494          101,052

   Deferred taxes............................                 6,854            7,045

   Other current assets......................                 1,934            1,527

                                                           --------         --------

    Total current assets.....................               188,554          185,899

  Property, plant and equipment - net........                90,192           91,278

  Intangible assets - net....................               182,116          184,217

  Other noncurrent assets....................                 4,894            4,728

                                                           --------         --------

     Total assets............................              $465,756         $466,122

                                                           ========         ========

                                                                         

                                                                        

 LIABILITIES AND SHAREHOLDERS' EQUITY                                   

                                                                         

  Current liabilities                                                   

   Trade accounts payable....................              $ 33,303         $ 36,846

   Dividends payable.........................                 3,064            3,061

   Accrued expenses..........................                42,529           42,901

                                                           --------         --------

     Total current liabilities...............                78,896           82,808

  Long-term debt.............................               201,107          206,184

  Other noncurrent liabilities...............                25,023           26,185

                                                           --------         --------

     Total liabilities.......................               305,026          315,177

                                                           --------         --------

  Shareholders' equity

   Common stock, par value $.01 per share; 

    Shares authorized:

     1996:  75,000,000

     1995:  50,000,000

    Shares issued and outstanding: 

     1996:  19,148,043

     1995:  19,130,284.......................                   191              191

   Additional paid-in capital................                86,497           86,118

   Retained earnings.........................                76,879           67,729

   Accumulated translation adjustment........                (2,837)          (3,093)

                                                           --------         --------

    Total shareholders' equity...............               160,730          150,945

                                                           --------         --------

     Total liabilities and shareholders'                                   

      equity.................................              $465,756         $466,122

                                                           ========         ========

</TABLE>

 

 

- ---------------

See Notes to Consolidated Financial Statements

 

 

 

 

 

                                       1

<PAGE>   3

 

 

 

                       IDEX CORPORATION AND SUBSIDIARIES

                     STATEMENTS OF CONSOLIDATED OPERATIONS

                    (in thousands, except per share amounts)

 

 

 

<TABLE>

<CAPTION>

 For the Three Months Ended March 31,            1996            1995

                                                 ----            ----

                                                     (unaudited)

 <S>                                            <C>            <C>

 Net sales................................      $133,886       $116,580

 Cost of sales............................        82,222         71,507

                                                 -------        -------

                                                              

 Gross profit.............................        51,664         45,073

 Selling, general and administrative......        27,016         23,639

 Goodwill amortization....................         1,232            960

                                                 -------        -------

 Income from operations...................        23,416         20,474

 Other income - net.......................            43              9

                                                 -------        -------

 Income before interest expense and                           

  income taxes............................        23,459         20,483

 Interest expense.........................         4,225          3,666

                                                  -------       -------

                                                              

 Income before income taxes...............        19,234         16,817

 Provision for income taxes...............         7,020          6,055

                                                 -------        -------

 Net income...............................       $12,214        $10,762

                                                 =======        =======

 

 Earnings per common share................       $   .62        $   .55

                                                 =======        =======

 Weighted average common shares                                

 outstanding.............................         19,817         19,624

                                                 =======        =======

                                                              

 

</TABLE>

 

 

 

- ---------------

See Notes to Consolidated Financial Statements.

 

 

 

 

 

                                       2

<PAGE>   4

 

                       IDEX CORPORATION AND SUBSIDIARIES

                 STATEMENT OF CONSOLIDATED SHAREHOLDERS' EQUITY

                    (in thousands, except per share amounts)

 

 

 

<TABLE>

<CAPTION>

                                             Common Stock &                            Accumulated              Total

                                                 Paid-In             Retained          Translation           Shareholders

                                                 Capital             Earnings           Adjustment              Equity  

                                               -----------          ----------         ------------          ------------

 

 <S>                                               <C>                  <C>                <C>                   <C>

 Balance:

  December 31, 1995.....                           $86,309              $67,729            $(3,093)                 $150,945

 

 Stock options

 exercised..............                               379                                                               379

 

 Unrealized translation

 adjustment ............                                                                       256                       256

 

 Cash dividends on common

 stock ($.16 per share)..                                                (3,064)                                      (3,064)

 

 Net income.............                                                 12,214                                       12,214

                                                   -------              -------            -------                  --------

 

 Balance:

  March 31, 1996........                           $86,688              $76,879            $(2,837)                 $160,720

   (unaudited)                                     =======              =======            =======                  ========

  

</TABLE>

 

 

 

- ---------------

See Notes to Consolidated Financial Statements.

 

 

                                       3

<PAGE>   5

 

 

                       IDEX CORPORATION AND SUBSIDIARIES

                     STATEMENTS OF CONSOLIDATED CASH FLOWS

                                 (in thousands)

 

<TABLE>

<CAPTION>

 For the Three Months Ended March 31,                              1996             1995

                                                                   ----             ----

                                                                        (unaudited)

 <S>                                                            <C>              <C>

 Cash Flows From Operating Activities:                            

  Net income.....................................                $ 12,214         $ 10,762

  Adjustments to reconcile net income to net cash             

   provided by operating activities:                          

   Depreciation..................................                   3,486            2,859

   Amortization of intangibles...................                   1,704            1,199

   Amortization of debt issuance expenses........                     150              156

   Deferred income taxes.........................                     399              285

   Increase in receivables.......................                  (2,278)          (2,147)

   (Increase) decrease in inventories............                   1,558           (5,713)

   Increase (decrease) in trade accounts payable.                  (3,543)           1,854

   Increase (decrease) in accrued expenses.......                  (  372)           3,379

   Other transactions - net......................                  (  772)           ( 808)

                                                                  -------           ------

    Net cash flows from operating activities.....                  12,546           11,826

                                                                  -------          -------

 Cash Flows From Investing Activities:                        

  Additions to property, plant and equipment....                   (2,689)          (2,257)

                                                                  -------          -------

  Net cash flows from investing activities......                   (2,689)          (2,257)

                                                                  --------         --------

 Cash Flows From Financing Activities:                        

  Dividends paid.................................                  (3,061)          (2,671)

  Net repayments of long-term debt...............                  (3,268)          (5,500)

  Decrease in accrued interest...................                  (1,809)          (1,945)

                                                                  -------          -------

   Net cash flows from financing activities......                  (8,138)         (10,116)

                                                                  --------         --------

                                                              

 Net increase (decrease) in cash.................                   1,719             (547)

                                                              

 Cash and cash equivalents at beginning of period                   5,937            6,288

                                                                  -------          -------

 Cash and cash equivalents at end of period......                 $ 7,656          $ 5,741

                                                                  =======          =======

<CAPTION>

               Supplemental Disclosure of Cash Flow Information

               ------------------------------------------------

 

 <S>                                                             <C>               <C>

 Cash paid during the period for:                                

  Interest.......................................                 $5,479            $5,393

  Taxes (including foreign)......................                  2,859               946

</TABLE>

 

 

 

 

 

- ---------------

See Notes to Consolidated Financial Statements.

 

 

 

 

 

                                       4

<PAGE>   6

 

 

 

                       IDEX CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

1.   Organization and Acquisition

 

     Pursuant to the requirements of the Securities and Exchange Commission,

the January 22, 1988 Acquisition of the initial six businesses comprising IDEX

Corporation ("IDEX" or the "Company") was not accounted for as a purchase

transaction.  Consequently, the accounting for the acquisition does not reflect

any adjustment of the carrying value of the assets and liabilities to their

fair values at the time of the acquisition.  Accordingly, the total

shareholders' equity of IDEX at March 31, 1996 and December 31, 1995 includes a

charge of $96.5 million which represents the excess of the purchase price over

the book value of the subsidiaries purchased at the date of the acquisition.

 

2.(a) Significant Accounting Policies

 

     In the opinion of management, the unaudited information presented as of

March 31, 1996 and for the three months ended March 31, 1996 and 1995 reflects

all adjustments necessary, which consist only of normal recurring adjustments,

for a fair presentation of the interim periods.

 

  (b) Earnings Per Share

 

     Earnings per share is computed by dividing net income by the weighted

average number of shares of common stock and common stock equivalents

outstanding during the period.  Common stock equivalents, in the form of stock

options, have been included in the calculation of weighted average shares

outstanding using the treasury stock method.

 

3.   Inventories

 

     The components of inventories as of March 31, 1996 and December 31, 1995

were (000's omitted):

<TABLE>

<CAPTION>

                                               March 31,    December 31,

                                                 1996           1995   

                                               --------     ------------

 <S>                                          <C>           <C>

 Inventories                                  

    Raw materials and supplies                 $ 12,492         $ 13,978

    Work in process                              14,611           15,434

    Finished goods                               72,391           71,640

                                               --------         --------

 

     Totals                                    $ 99,494         $101,052

                                               ========         ========

</TABLE>

 

     Those inventories which were carried on a LIFO basis amounted to $57,684

and $57,409 at March 31, 1996 and December 31, 1995, respectively.  The excess

of current cost over LIFO inventory value and the impact on earnings of using

the LIFO method are not material.

 

4.   Common and Preferred Stock

 

     The Company had five million shares of preferred stock authorized but

unissued at March 31, 1996 and December 31, 1995.

 

 

 

 

 

                                       5

<PAGE>   7

 

 

Item 2.  Management's Discussion and Analysis of Financial Condition and

         Results of Operations

 

Historical Overview and Outlook

 

     IDEX sells a broad range of proprietary fluid handling and industrial

products to a diverse customer base in the U.S. and, to an increasing extent,

internationally.  Accordingly, IDEX's businesses are affected by levels of

industrial activity and economic conditions in the U.S. and in other countries

where its products are sold and by the relationship of the dollar to other

currencies.  Among the factors that affect the demand for IDEX's products are

interest rates, levels of capital spending in certain industries, and overall

industrial growth.

 

     IDEX has a history of strong operating margins.  The Company's operating

margins are affected by, among other things, utilization of facilities as sales

volumes change, and inclusion of newly acquired businesses which may have lower

margins that could be further affected by purchase accounting adjustments.

 

     IDEX's orders, sales, net income and earnings per share in the first

quarter of 1996 were the highest of any first quarter in its history.  Business

conditions showed moderate growth during that period.  Incoming orders in the

1996 first quarter increased 6% over the same quarter of 1995, which was IDEX's

previous record quarter.  Sales in the first quarter of 1996 increased 15% over

the same quarter of last year, as sales in the core businesses improved 4% and

the inclusion of Micropump (May 1995) and Lukas (October 1995) added 11% to the

volume increase.  Shipments in the quarter kept pace with the incoming orders,

so backlogs were unchanged and remain at IDEX's normal operating level of about

1-1/2 months' sales.  This low level of backlog allows IDEX to provide

excellent customer service, but also means that changes in orders are felt

quickly in operating results.

 

     IDEX continues to expect record sales and earnings in 1996.  As expected,

the rate of growth, particularly in the U.S., has slowed somewhat, but IDEX's

business activity continues at a high level.  With modest economic growth

expected during the next few quarters and barring unforeseen circumstances,

IDEX should experience higher earnings in 1996 than in 1995.  International

expansion, new products, cost controls, integration of acquisitions, and use of

the Company's strong cash flow to cut debt and interest expense are among the

factors that should contribute to earnings growth.

 

 

 

 

 

                                       6

<PAGE>   8

 

 

                Company and Business Group Financial Information

                                (000's omitted)

 

 

 

<TABLE>

<CAPTION>

For the Three Months Ended March 31,            1996         1995

                                                ----         ----

                                                   (unaudited)

 <S>                                           <C>           <C>

 Fluid Handling Group (1)

  Net sales...............................     $ 96,617      $ 81,527

  Income from operations..................       19,793        16,907

  Operating margin........................         20.5%         20.7%

  Depreciation and amortization ..........     $  4,303      $  3,202

  Capital expenditures....................        1,330         1,341

 

 

 Industrial Products Group (1)

  Net sales...............................     $ 37,328      $ 35,160

  Income from operations..................        5,880         5,890

  Operating margin........................         15.8%         16.8%

  Depreciation and amortization ..........     $    851      $    841

  Capital expenditures....................        1,340           895

 

 

 Company

  Net sales...............................     $133,886      $116,580

  Income from operations..................       23,416        20,474

  Operating margin........................         17.5%         17.6%

  Depreciation and amortization (2).......     $  5,190      $  4,058

  Capital expenditures....................        2,689         2,257

 

</TABLE>

 

 

  (1) Group income from operations excludes net unallocated corporate operating

      expenses.

 

  (2) Excludes amortization of debt issuance expenses.

 

 

 

 

 

                                       7

<PAGE>   9

 

Results of Operations

 

    For purposes of this discussion and analysis section, reference is made to

the table on the preceding page and the Company's Statements of Consolidated

Operations included in the Financial Statement section.  IDEX consists of two

business segments: Fluid Handling and Industrial Products.

 

Performance in the Three Months Ended March 31, 1996 Compared to 1995

 

    Net sales for the three months ended March 31, 1996 were $133.9 million an

increase of 15% over the $116.6 million recorded in the first quarter of 1995.

 

    Fluid Handling Group sales of $96.6 million increased $15.1 million, or

19%, due to the inclusion of the recently acquired Micropump and Lukas

operations and improving international business conditions.  Sales outside the

U.S. increased to 38% of total Fluid Handling Group sales in the first quarter

of 1996 from 31% in the comparable 1995 period due to the inclusion of Lukas,

based in Germany, the U.K.-based operations of Micropump, and stronger

worldwide demand for products of the Group's core businesses.

 

    First quarter 1996 sales in the Industrial Products Group of $37.3 million

increased $2.2 million, or 6%, over the same quarter of last year due to higher

customer demand for banding and clamping devices and sign mounting systems.

Shipments outside the U.S. were 37% of total sales in the Industrial Products

Group in the first quarter of 1996, up from 36% in the comparable 1995 period.

 

    Income from operations increased $2.9 million or 14% to $23.4 million in

the three months ended March 31, 1996 from $20.5 million in 1995's first

quarter.  Operating margin at 17.5% of sales in the 1996 period was virtually

unchanged from 17.6% in 1995.  In the Fluid Handling Group, income from

operations of $19.8 million and operating margin of 20.5% in the first three

months of 1996 compare to the $16.9 million and 20.7% recorded in 1995.  The

slight operating margin decline resulted from the inclusion of recent

acquisitions whose operating margins, as expected, were somewhat lower than the

other units in the Group and whose profits were further affected by purchase

accounting adjustments.  Income from operations in the Industrial Products

Group of $5.9 million in the three-month 1996 period was unchanged from 1995.

Operating margin of 15.8% in the 1996 first quarter decreased from the 16.8%

achieved in 1995 due primarily to softness in the heavy-duty truck market and

manufacturing inefficiencies associated with new product introduction.

 

    Interest expense increased to $4.2 million in the first quarter of 1996

from $3.7 million in the 1995 period because of additional borrowings under the

Credit Agreements for the acquisitions of Micropump and Lukas.

 

    The provision for income taxes increased to $7.0 million in the three

months ended March 31, 1996 from $6.1 million in the comparable 1995 period.

The effective tax rate increased to 36.5% in 1996 from 36.0% in 1995.

 

    Net income of $12.2 million in the first quarter of 1996 was 13% higher

than net income of $10.8 million in same period of 1995.  Earnings per share

amounted to $.62 in 1996's first quarter, which was 13% higher than the $.55

recorded in the first quarter of 1995.

 

 

 

 

 

                                       8

<PAGE>   10

 

 

Liquidity and Capital Resources

 

    At March 31, 1996, IDEX's working capital was $109.7 million and its

current ratio was 2.4 to 1.  Internally generated funds were adequate to fund

capital expenditures of $2.7 million and $2.3 million, and dividends on common

stock of $3.1 million and $2.7 million, for the three months ended March 31,

1996 and 1995, respectively.  The capital expenditures were generally for

machinery and equipment which improved productivity, although a portion was for

repair and replacement of equipment and facilities.  Management believes that

IDEX has ample capacity in its plant and equipment to meet expected needs for

future growth in the intermediate term.  During the three months ended March

31, 1996 and 1995, depreciation and amortization expense, excluding

amortization of debt issuance expenses, was $5.2 million and $4.1 million,

respectively.

 

    At March 31, 1996, the maximum amount available under the U.S. Credit

Agreement was $150 million, of which $93 million was being used.  The

availability under the U.S. Credit Agreement declines in stages commencing

December 31, 1996 to $115 million on December 31, 1997.  Any amount outstanding

at June 30, 1999 becomes due at that date.  Interest is payable quarterly on

the outstanding balance at the bank agent's reference rate, or at LIBOR plus 75

basis points.  The maximum amount available at March 31, 1996 under the

Company's German Credit Agreement was DM 52.5 million ($35.6 million), of which

DM 46.7 million ($31.7 million) was being used.  The availability under the

Company's German Credit Agreement declines in stages from DM 52.5 million to DM

31.3 million at November 1, 2000.  Any amount outstanding at November 1, 2001

becomes due at that date.  Interest is payable quarterly on the outstanding

balance at LIBOR plus 100 basis points.

 

    IDEX believes it will generate sufficient cash flow from operations to meet

its operating requirements, interest and scheduled amortization payments under

both the U.S. Credit Agreement and the German Credit Agreement, interest and

principal payments on the Senior Subordinated Notes, approximately $16 million

of planned capital expenditures and $12 million of annual dividend payments to

holders of common stock in 1996.  From commencement of operations in January

1988 until March 31, 1996, IDEX has borrowed $277 million under the credit

agreements to complete nine acquisitions.  During this same period, IDEX

generated, principally from operations, cash flow of $242 million to reduce its

indebtedness.  In the event that suitable businesses or assets are available

for acquisition by IDEX upon terms acceptable to the Board of Directors, IDEX

may obtain all or a portion of the financing for the acquisitions through the

incurrence of additional long-term indebtedness.

 

 

 

 

 

                                       9

<PAGE>   11

 

 

                          Part II.  Other Information

 

 

Item 1.   Legal Proceedings.     None.

 

 

Item 2.   Changes in Securities.     Not Applicable.

 

 

Item 3.   Defaults upon Senior Securities.     None.

 

 

Item 4.   Submission of Matters to a Vote of Security Holders.

 

          The Company held its Annual Shareholders' Meeting on Tuesday, March

          26, 1996.  At the Annual Meeting, shareholders elected three

          directors to serve three-year terms on the Board of Directors of IDEX

          Corporation.  The following persons received a majority of the votes

          cast for Class I Directors specifically as stated:

 

<TABLE>

<CAPTION>

                   Director                 For              Withheld 

                --------------         -------------       ------------

                <S>                      <C>                 <C>

                Donald N. Boyce          17,686,019             55,177

                Richard E. Heath         16,478,569          1,262,627

                Henry R. Kravis          16,392,068          1,349,128

</TABLE>

 

                Additionally, shareholders voted on the following matters:

 

                1)   An amendment to the Company's Restated Certificate of

                     Incorporation to increase the number of authorized Common

                     Shares from 50,000,000 to 75,000,000 shares received the

                     votes of a majority of the common shares outstanding,

                     specifically as stated:

 

<TABLE>

                     <S>                 <C>

                     Affirmative Votes   17,387,229

                                         ----------

                     Negative Votes         311,050

                                            -------

                     Abstentions             42,917

                                             ------

                     Broker Nonvotes              0

                                             ------

</TABLE>

 

                2)   Adoption of the 1996 Stock Plan for Officers of IDEX

                     Corporation received a majority of the votes cast,

                     specifically as stated:

 

<TABLE>

                     <S>                 <C>

                     Affirmative Votes   14,501,747

                                         ----------

                     Negative Votes       2,004,146

                                          ---------

                     Abstentions             21,200

                                             ------

                     Broker Nonvotes      1,214,103

                                          ---------

</TABLE>

 

                3)   A proposal to appoint Deloitte & Touche LLP as Auditors of

                     IDEX Corporation received a majority of the votes cast,

                     specifically as stated:

 

<TABLE>

                     <S>                 <C>

                     Affirmative Votes   17,697,103

                                         ----------

                     Negative Votes          38,155

                                             ------

                     Abstentions              5,938

                                              -----

                     Broker Nonvotes              0

                                              -----

</TABLE>

 

 

 

 

 

                                       10

<PAGE>   12

 

 

 

 

                4)   Approval of the Amended and Restated IDEX Corporation

                     Directors Deferred Compensation Plan received a majority

                     of the votes cast, specifically as stated:

 

<TABLE>

                     <S>                 <C>

                     Affirmative Votes   16,274,710

                                         ----------

                     Negative Votes         181,574

                                            -------

                     Abstentions             70,794

                                             ------

                     Broker Nonvotes      1,214,118

                                          ---------

</TABLE>

 

Item 5.   Other Information.

 

 

Item 6.   Exhibits and Reports on Form 8-K

 

          (a)  Exhibits

 

               The exhibits listed in the accompanying "Exhibit Index" are

               filed as part of this report.

 

          (b)  Reports on Form 8-K

 

               There have been no reports on Form 8-K filed during the

               quarter for which this report is filed.

 

 

 

 

 

                                       11

<PAGE>   13

 

 

 

 

 

                                   SIGNATURES

 

      Pursuant to the requirements of the Securities Exchange Act of 1934, the

Registrant has duly caused this Report to be signed on its behalf by the

undersigned, thereunto duly authorized in the capacity and on the date

indicated.

 

 

 

 

 

                                        IDEX CORPORATION

 

 

 

 

 

May 3, 1996                               /s/Wayne P. Sayatovic       

                                             ------------------------

                                             Wayne P. Sayatovic

                                             Senior Vice President-

                                             Finance, Chief Financial

                                             Officer and Secretary

                                             (Duly Authorized and Principal

                                              Financial Officer)

 

 

 

 

 

                                       12

 

 

 

 

 

<PAGE>   14

                                 EXHIBIT INDEX

 

Exhibit

Number                          Description                                 Page

- ------                          -----------                                 ----

     

 

 3.1          Restated Certificate of Incorporation of IDEX (formerly HI,

              Inc.) (incorporated by reference to Exhibit No. 3.1 to the

              Registration Statement on Form S-1 of IDEX Corporation, et

              al., Registration No. 33-21205, as filed on April 21, 1988).

   

*3.1(a)       Amendment to Restated Certificate of Incorporation of IDEX

              (formerly HI, Inc.), as amended.

 

 3.2          Amended and Restated By-Laws of IDEX (incorporated by

              reference to Exhibit No. 3.2 to Post-Effective Amendment

              No. 2 to the Registration Statement on Form S-1 of IDEX

              Corporation, et al., Registration No. 33-21205, as filed on

              July 17, 1989).

 

 3.2(a)       Amended and Restated Article III, Section 13 of the Amended and

              Restated By-Laws of IDEX (incorporated by reference to Exhibit

              No. 3.2(a) to Post-Effective Amendment No. 3 to the Registration

              Statement on Form S-1 of IDEX Corporation, et al., Registration

              No. 33-21205, as filed on February 12, 1990).

 

 4.1          Restated Certificate of Incorporation and By-Laws of IDEX

              (filed as Exhibits 3.1 through 3.2(a)).

 

 4.2          Indenture, dated as of September 15, 1992, among IDEX, the

              Subsidiaries and The Connecticut National Bank, as Trustee,

              relating to the 9-3/4% Senior Subordinated Notes of IDEX

              due 2002 (incorporated by reference to Exhibit No. 4.2 to

              the Annual Report of IDEX on Form 10-K for the fiscal year

              ending December 31, 1992, Commission File No. 1-10235).

 

 4.2(a)       First Supplemental Indenture dated as of December 22, 1995

              among IDEX and the Subsidiaries named therein and Fleet

              National Bank of Connecticut (formerly known as Shawmut

              Bank Connecticut, N.A., which was formerly  known as The

              Connecticut National Bank), a national banking association,

              as trustee (incorporated by reference to Exhibit No. 4.2(a)

              to the Annual Report of IDEX on Form 10-K for the fiscal

              year ending December 31, 1995, Commission File No. 1-10235).

             

 4.3          Specimen Senior Subordinated Note of IDEX (including

              specimen Guarantee)(incorporated by reference to Exhibit

              No. 4.3 to the Annual Report of IDEX on Form 10-K for the

              fiscal year ending December 31, 1992, Commission File No.

              1-10235).

 

 4.4          Specimen Certificate of Common Stock (incorporated by

              reference to Exhibit No. 4.3 to the Registration Statement

              on Form S-2 of IDEX Corporation, et al., Registration No.

              33-42208, as filed on September 16, 1991).

 

10.1          Second Amended and Restated Credit Agreement dated as of

              January 29, 1993 among IDEX, various banks named therein

              and Continental Bank N.A., as Agent (incorporated by

              reference to Exhibit No. 10.1 to the Annual Report of IDEX

              on Form 10-K for the fiscal year ending December 31, 1992,

              Commission File No. 1-10235).

 

 

                                       13

<PAGE>   15

 

Exhibit

Number                              Description                             Page

- -------                             -----------                             ----

10.1(a)    First Amendment dated as of May 23, 1994, to Second Amended and

           Restated Credit Agreement dated as of January 29, 1993, by and

           among IDEX, various banks named therein and Continental Bank N.A.,

           as Agent (incorporated by reference to Exhibit No. 10.18 to the

           Quarterly Report of IDEX on Form 10-Q for the quarter ended

           June 30, 1994, Commission File No. 1-10235).

 

10.1(b)    Second Amendment dated as of October 24, 1994, to Second Amended and

           Restated Credit Agreement dated as of January 29, 1993, by and

           among IDEX, as borrower and Bank of America Illinois (formerly

           known as Continental Bank N.A.), as a Bank and as agent, and the

           other banks signatory thereto (incorporated by reference to Exhibit

           No. 10.1(b) to the Annual Report of IDEX on Form 10-K for the fiscal

           year ending December 31, 1994, Commission File No. 1-10235).

 

10.1(c)    Third Amendment dated as of February 28, 1995, to Second Amended and

           Restated Credit Agreement dated as of January 29, 1993, by and among

           IDEX, as borrower and Bank of America Illinois, as Agent

           (incorporated by reference to Exhibit No.10.1(c) to the Quarterly

           Report of IDEX on Form 10-Q for the quarter ended March 31, 1995,

           Commission File No. 1-10235).

 

10.1(d)    Fourth Amendment dated as of November 1, 1995, to Second Amended and

           Restated Credit Agreement dated as of January 29, 1993, by and

           among IDEX, as borrower, and Bank of America Illinois, as Agent

           (incorporated by reference to Exhibit No. 10.1(d) to the Annual

           Report of IDEX on Form 10-K for the fiscal year ending December 31,

           1995, Commission File No. 1-10235).

 

10.1(e)    Fifth Amendment dated as of December 22, 1995, to Second Amended and

           Restated Credit Agreement dated as of January 29, 1993, by and

           among IDEX, as borrower and Bank of America Illinois, as Agent

           (incorporated by  reference to Exhibit No. 10.1(e) to the Annual

           Report of IDEX on Form 10-K for the fiscal year ending December 31,

           1995, Commission File No. 1-10235).

 

10.2       Pledge Agreement, dated January 22, 1988, between IDEX and the Bank

           Agent (incorporated by reference to Exhibit No. 10.3 to the

           Registration Statement on Form S-1 of IDEX Corporation, et al.,

           Registration No. 33-21205, as filed on April 21, 1988).

 

10.3       Guaranty Agreement, dated January 22, 1988, between each of the

           Guarantors named therein and the Bank Agent (incorporated by

           reference to Exhibit No. 10.4 to the Registration Statement on Form

           S-1 of IDEX Corporation, et al., Registration No. 33-21205, as

           filed on April 21, 1988).

 

10.3(a)    Guaranty Agreement, dated May 7, 1991, by CIC Acquisition

           Corporation in favor of the Bank Agent (incorporated by reference to

           Exhibit No. 10.3(a) to the Registration Statement on Form S-1 of IDEX

           Corporation, et al., Registration No. 33-50220, as filed on July 29,

           1992).

 

10.3(b)    Guaranty Agreement, dated May 4, 1992, by PLF Acquisition Corporation

           and MCL Acquisition Corporation in favor of the Bank Agent

           (incorporated by reference to Exhibit No. 10.3(b) to the

           Registration Statement on Form S-1 of IDEX Corporation, et al.,

           Registration No. 33-50220, as filed on July 29, 1992).

 

 

 

 

                                      14

<PAGE>   16

Exhibit

Number                          Description                                Page

- ------                          -----------                                ----

 

10.3(c)       Guaranty Agreement, dated October 24, 1994, executed by

              Hale Products, Inc. in favor of the Bank Agent

              (incorporated by reference to Exhibit No. 10.3(c) to the

              Annual Report of IDEX on Form 10-K for the fiscal year

              ending December 31, 1994, Commission File No. 1-10235).

 

10.3(d)       Guaranty Agreement, dated as of November 1, 1995, executed

              by Micropump, Inc. in favor of the Bank Agent (incorporated

              by reference to Exhibit No. 10.3(d) to the Annual Report of

              IDEX on Form 10-K for the fiscal year ending December 31,

              1995, Commission File No. 1-10235).

 

10.3(e)       Guaranty Agreement, dated as of December 22, 1995, executed

              by Dunja Verwaltungsgesellschaft mbH (a German corporation)

              in favor of the Bank Agent (incorporated by reference to

              Exhibit No. 10.3(e) to the Annual Report of IDEX on Form

              10-K for the fiscal year ending December 31, 1995,

              Commission File No. 1-10235).

 

10.4          Inter-Guarantor Agreement, dated as of January 22, 1988

              among the Subsidiaries named therein and the Bank Agent

              (incorporated by reference to Exhibit No. 4.8 to the

              Registration Statement on Form S-1 of IDEX Corporation, et

              al., Registration No. 33-21205, as filed on April 21, 1988).

              

10.4(a)       First Amendment to Inter-Guarantor Agreement, dated as of

              May 7, 1991, among IDEX and the Subsidiaries named therein

              (incorporated by reference to Exhibit No. 10.6(a) to the

              Registration Statement on Form S-1 of IDEX Corporation, et

              al., Registration No. 33-50220, as filed on July 29, 1992).

 

10.4(b)       Second Amendment to Inter-Guarantor Agreement, dated as of

              October 24, 1994, by and among IDEX and the Subsidiaries

              named therein (incorporated by reference to Exhibit No.

              10.4(b) to the Annual Report of IDEX on Form 10-K for the

              fiscal year ending December 31, 1994, Commission File No.

              1-10235).

 

10.4(c)       Third Amendment to Inter-Guarantor Agreement, dated as of

              November 1, 1995, by and among IDEX and the Subsidiaries

              named therein (incorporated by reference to Exhibit No.

              10.4(c) to the Annual Report of IDEX on Form 10-K for the

              fiscal year ending December 31, 1995, Commission File No.

              1-10235).  

 

10.4(d)       Fourth Amendment to Inter-Guarantor Agreement, dated as of

              December 22, 1995, by and among IDEX and the Subsidiaries

              named therein (incorporated by reference to Exhibit No.

              10.4(d) to the Annual Report of IDEX on Form 10-K for the

              fiscal year ending December 31, 1995, Commission File No.

              1-10235).

 

**10.5        Amended and Restated Employment Agreement between IDEX and

              Donald N. Boyce, dated as of January 22, 1988 (incorporated

              by reference to Exhibit No. 10.15 to Amendment No. 1 to the

              Registration Statement on Form S-1 of IDEX Corporation,

              Registration No. 33-28317, as filed on June 1, 1989).

 

 

                                       15

   

<PAGE>   17

Exhibit

Number                            Description                               Page

- ------                            -----------                               ----

 

**10.5(a)     First Amendment to the Amended and Restated Employment

              Agreement between IDEX and Donald N. Boyce, dated as of

              January 13, 1993 (incorporated by reference to Exhibit No.

              10.5(a) to the Annual Report of IDEX on Form 10-K for the

              fiscal year ending December 31, 1992, Commission File No.

              1-10235).

 

**10.5(b)     Second Amendment to the Amended and Restated Employment

              Agreement between IDEX and Donald N. Boyce, dated as of

              September 27, 1994 (incorporated by reference to Exhibit

              No. 10.5(b) to the Annual Report of IDEX on Form 10-K for

              the fiscal year ending December 31, 1994, Commission File

              No. 1-10235).

 

**10.6        Amended and Restated Employment Agreement between IDEX and

              Wayne P. Sayatovic, dated as of January 22, 1988

              (incorporated by reference to Exhibit No. 10.17 to

              Amendment No. 1 to the Registration Statement on Form S-1

              of IDEX Corporation, Registration No. 33-28317, as filed on

              June 1, 1989).

 

**10.6(a)     First Amendment to the Amended and Restated Employment

              Agreement between IDEX and Wayne P. Sayatovic, dated as of

              January 13, 1993 (incorporated by reference to Exhibit No.

              10.7(a) to the Annual Report of IDEX on Form 10-K for the

              fiscal year ending December 31, 1992, Commission File No.

              1-10235).

 

**10.6(b)     Second Amendment to the Amended and Restated Employment

              Agreement between IDEX and Wayne P. Sayatovic, dated as of

              September 27, 1994 (incorporated by reference to Exhibit

              No. 10.6(b) to the Annual Report of IDEX on Form 10-K for

              the fiscal year ending December 31, 1994, Commission File

              No. 1-10235).

 

**10.7        Employment Agreement between IDEX and Frank J. Hansen dated

              as of August 1, 1994 (incorporated by reference to Exhibit

              No. 10.7 to the Quarterly Report of IDEX on Form 10-Q for

              quarter ended September 30, 1994, Commission File No. 1-10235).

 

**10.7(a)     First Amendment to the Employment Agreement between IDEX and

              Frank J. Hansen, dated as of September 27, 1994

              (incorporated by reference to Exhibit No. 10.7(a) to the

              Annual Report of IDEX on Form 10-K for the fiscal year

              ending December 31, 1994, Commission File No. 1-10235).

 

**10.8        Employment Agreement between IDEX and Jerry N. Derck, dated

              as of September 27, 1994 (incorporated by reference to

              Exhibit No. 10.8 to the Annual Report of IDEX on Form 10-K

              for the fiscal year ending December 31, 1994, Commission

              File No. 1-10235).

 

**10.9        Management Incentive Compensation Plan (incorporated by

              reference to Exhibit No. 10.21 to Amendment No. 1 to the

              Registration Statement on Form S-1 of IDEX Corporation,

              Registration No. 33-283317, as filed on June 1, 1989).

 

 *10.9(a)     Amended Management Incentive Compensation Plan

 

 

                                      16

<PAGE>   18

Exhibit

Number                          Description                                 Page

- ------                          -----------                                 ----

 

**10.10       Form of Indemnification Agreement (incorporated by

              reference to Exhibit No. 10.23 to the Registration

              Statement on Form S-1 of IDEX Corporation, Registration No.

              33-28317, as filed on April 26, 1989).

 

**10.11       Form of Shareholder Purchase and Sale Agreement

              (incorporated by reference to Exhibit No. 10.24 to Amendment

              No. 1 to the Registration Statement on Form S-1 of IDEX

              Corporation, Registration No. 33-28317, as filed on June 1,

              1989).

 

**10.12       Revised Form of IDEX Stock Option Plan for Outside

              Directors (incorporated by reference to Exhibit No.

              10.22(a) to Post-Effective Amendment No. 4 to the

              Registration Statement on Form S-1 of IDEX Corporation, et

              al., Registration No. 33-21205, as filed on March 2, 1990).

 

 *10.13       Amendment to the IDEX Stock Option Plan for Outside

              Directors, adopted by resolution of the Board of Directors

              dated as of January 28, 1992 (incorporated by reference to

              Exhibit No. 10.21(a) of the Annual Report of IDEX on Form

              10-K for the fiscal year ended December 31, 1991,

              Commission File No. 1-10235).

 

**10.14       Non-Qualified Stock Option Plan for Non-Officer Key

              Employees of IDEX (incorporated by reference to Exhibit No.

              10.15 to the Annual Report of IDEX on Form 10-K for the

              fiscal year ending December 31, 1992, Commission File No.

              1-102351).

 

**10.15       Non-Qualified Stock Option Plan for Officers of IDEX

              (incorporated by reference to Exhibit No. 10.16 to the

              Annual Report of IDEX on Form 10-K for the fiscal year

              ending December 31, 1992, Commission File No. 1-102351).

 

**10.16       IDEX Supplemental Executive Retirement Plan (incorporated

              by reference to Exhibit No. 10.17 to the Annual Report of

              IDEX on Form 10-K for the fiscal year ending December 31,

              1991, Commission File No. 1-102351).

 

  10.17       Stock Purchase Agreement, dated as of May 6, 1994 by and among

              HPI Acquisition Corp., HFP Partners, L.P., the persons

              listed on Schedule A and Hale Products, Inc. (incorporated

              by reference to Exhibit No. 10.17 to the Quarterly Report

              of IDEX on Form 10-Q for the quarter ended June 30, 1994,

              Commission File No. 1-10235).

 

 *10.18       1996 Stock Plan for Officers of IDEX.

 

 *10.19       Amended and Restated IDEX Directors Deferred Compensation Plan.

 

 

 

 

                                       17

<PAGE>   19

 

Exhibit

Number                                          Description                Page

- -------                                         -----------                ----

 

*27          Financial Data Schedule.

          

             Revolving Credit Facility, dated as of September 29, 1995,

             between Dunja Verwaltungsgesellschaft mbH and Bank of

             America  NT & SA, Frankfurt Branch (a copy of the

             agreement will be furnished to the Commission upon

             request).

 

          

          

          

- ---------------

 *Filed her

          

          

          

                                      18

</TEXT>

</DOCUMENT>

<DOCUMENT>

<TYPE>EX-3.1(A)

<SEQUENCE>2

<DESCRIPTION>CERTIFICATE OF INCORPORATION

<TEXT>

 

<PAGE>   1

                                                                     EXHIBIT 3.1

 

 

                          CERTIFICATE OF AMENDMENT OF

                     RESTATED CERTIFICATE OF INCORPORATION

                              OF IDEX CORPORATION

 

                 IDEX Corporation, a corporation organized and existing under

and by virtue of the General Corporation Law of the State of Delaware,

 

                 DOES HEREBY CERTIFY:

 

                 A.       That the Board of Directors of IDEX Corporation duly

adopted a resolution proposing and declaring advisable the following amendment

to the Restated Certificate of Incorporation of IDEX Corporation (the "Restated

Certificate of Incorporation"):

 

                 The first paragraph of Article IV of the Restated Certificate

of Incorporation is amended in its entirety to read as follows:

 

                          The total number of shares of all classes of stock

                 which the corporation shall have authority to issue is

                 80,000,000 shares, consisting of 5,000,000 shares of preferred

                 stock, par value $.01 per share (the "Preferred Stock") and

                 75,000,000 shares of common stock, par value $.01 per share

                 (the "Common Stock").

 

                 B.       That the amendment set forth above was duly adopted

in accordance with the provisions of Section 242 of the General Corporation Law

of the State of Delaware.

 

                 IN WITNESS WHEREOF, IDEX Corporation has caused this

Certificate to be executed by Donald B. Boyce, its Chairman of the Board,

President and Chief Executive Officer, and attested to by Wayne P. Sayatovic,

its Senior Vice President - Finance, Chief Financial Officer and Secretary,

this 23rd day of January, 1996.

 

 

 

                                             __________________________________

                                             DONALD N. BOYCE

                                             Chairman of the Board,

                                             President & Chief Executive Officer

                                             of IDEX Corporation

 

ATTEST:

 

 

__________________________________

WAYNE P. SAYATOVIC

Senior Vice President - Finance,

Chief Financial Officer & Secretary

of IDEX Corporation

<PAGE>   2

 

                          CERTIFICATE OF AMENDMENT OF

 

                     RESTATED CERTIFICATE OF INCORPORATION

 

                              OF IDEX CORPORATION

 

                 IDEX Corporation, a corporation organized and existing under

and by virtue of the General Corporation Law of the State of Delaware,

 

                 DOES HEREBY CERTIFY:

 

                 A.   That the Board of Directors of IDEX Corporation duly

adopted a resolution proposing and declaring advisable the following amendments

to the Restated Certificate of Incorporation of IDEX Corporation (the "Restated

Certificate of Incorporation").

 

 

                 1.       The first paragraph of Article IV of the Restated

Certificate of Incorporation is amended in its entirety to read as follows:

 

                          The total number of shares of all classes of stock

         which the Corporation shall have authority to issue is 22,000,000

         shares, consisting of 2,000,000 shares of preferred stock, par value

         $.01 per share (the "Preferred Stock") and 20,000,000 shares of common

         stock, par value $.01 per share (the "Common Stock").

 

                 2.       Section C of Article IV of the Restated Certificate

                          of Incorporation is amended in its entirety to read

                          as follows:

 

                          C.      The Common Stock.

 

                          1.      Rights.  The Common Stock shall be subject to

         the express terms of the Preferred Stock and any series thereof.  Each

         share of Common Stock shall be equal to every other share of Common

         Stock.

 

                          2.   Changes and Reclassification of Common Stock.

         Upon this Restated Certificate of Incorporation becoming effective

         pursuant to the General Corporation Law of the State of Delaware (the

         "Effective Time"), and without any further action on the part of the

         Corporation or its stockholders, each share of Common Stock, $.01 par

         value, then issued, shall be automatically changed and reclassified

 

                                      2

 

<PAGE>   3

 

         into seven fully paid and nonassessable shares of Common Stock, $.01

         par value.  Any stock certificate that, immediately prior to the

         Effective Time, represents shares of Common Stock will, from and after

         the Effective Time, automatically and without the necessity of

         presenting the same for exchange, represent the number of shares of

         Common Stock as equals the product obtained by multiplying (a) the

         number of shares of Common Stock represented by such certificate prior

         to the Effective Time by (b) seven.

 

                 3.       The Restated Certificate of Incorporation is amended

to add the following Article VIII and Article IX:

 

                                  ARTICLE VIII

 

                                CLASSIFIED BOARD

 

 

                   A.   Except as may otherwise be provided pursuant to

         Article IV hereof with respect to any rights of holders of Preferred

         Stock to elect additional directors, the board of directors of the

         Corporation shall consist of a minimum of three (3) and a maximum of

         twelve (12) directors and the number of directors of the Corporation

         shall be fixed, within the minimum and maximum, as provided in the

         bylaws of the Corporation.

 

                   B.      The directors of the Corporation (other than

         any directors who may be elected by holders of Preferred Stock as

         provided for pursuant to Article IV hereof) shall be and are divided

         into three classes:  Class I, Class II and Class III.  The number of

         directors in each class shall be as nearly equal as possible.  Each

         director shall serve for a term ending on the date of the third annual

         meeting of stockholders (an "Annual Meeting") following the Annual

         Meeting at which such director was elected; provided, however, that

         each initial director in Class I shall serve for a term ending on the

         date of the Annual Meeting held in 1990, each initial director in

         Class II shall serve for a term ending on the date of the

         Annual Meeting held in 1991, and each initial director in Class III

         shall serve for a term ending on the date of the Annual Meeting held

         in 1992.  Any director who may be elected by holders of Preferred

         Stock as provided for pursuant to Article IV hereof shall serve for

         such period as may be provided, pursuant to Article IV hereof.

 

                   C.   In the event of any increase or decrease in the

         authorized number of directors:

 

                        1.   each director then serving shall

                 nevertheless continue as a director of the class of which he

                 is a member until the expiration of his term

 

                                      3

 

<PAGE>   4

 

                 or his prior death, retirement, resignation or removal; and

 

                        2.   except to the extent that an increase or

                 decrease in the authorized number of directors occurs in

                 connection with the rights of holders of Preferred Stock to

                 elect additional directors, the newly created or eliminated

                 directorships resulting from any increase or decrease shall be

                 apportioned by the Board of Directors among the three classes

                 so as to keep the number of directors in each class as nearly

                 equal as possible.

 

                    D.   Notwithstanding the provisions of Sections B and

         C of this Article VIII, each director shall serve until his successor

         is elected and qualified or until his death, retirement, resignation

         or removal.  Except as may otherwise be provided pursuant to Article

         IV hereof with respect to any rights of holders of Preferred Stock, no

         director may be removed during his term except for cause.

 

                    E.   Except as may otherwise be provided pursuant to

         Article IV hereof with respect to any rights of holders of Preferred

         Stock to elect additional directors, should a vacancy in the Board of

         Directors occur or be created (whether arising through death,

         retirement, resignation or removal or through an increase in the

         number of authorized directors), such vacancy shall be filled by the

         affirmative vote of a majority of the remaining directors of the class

         in which such vacancy occurs, or by the sole remaining director of

         that class if only one such director remains, or by the affirmative

         vote of a majority of the remaining directors of the other two

         classes, if there is no director remaining in the class in which such

         vacancy occurs.  A director so elected to fill a vacancy shall serve

         for the remainder of the term Of the class to which he was elected.

 

                                   ARTICLE IX

 

                        VOTE REQUIRED TO AMEND ARTICLES

 

 

                    The provisions set forth in this Article IX and in

         Article VIII may not be repealed or amended in any respect, and no

         provision imposing cumulative voting in the election of directors may

         be added, unless such action is approved by the affirmative vote of

         the holders of not less than 80% of the outstanding shares of stock

         with voting rights (as defined in Article IV.B hereof).

 

                                      4

 

<PAGE>   5

 

                 B.       That the amendments set forth above were duly adopted

in accordance with the provisions of Sections 228 and 242 of the General

Corporation Law of the State of Delaware.

                 IN WITNESS WHEREOF, IDEX Corporation has caused this

Certificate to be executed by Donald N. Boyce, its President and Chief

Executive Officer, and attested to by Wayne P. Sayatovic, its Vice President,

Treasurer and Secretary this 10th day of May, 1989.

 

 

 

                                                

                                                  _____________________________

                                                  DONALD N. BOYCE

                                                  Chairman of the Board,

                                                  President and Chief Executive

                                                  Officer of IDEX Corporation

 

 

ATTEST:

 

 

_____________________________

WAYNE P. SAYATOVIC

Vice President, Treasurer and

Secretary of IDEX Corporation

 

                                      5

<PAGE>   6

 

                     RESTATED CERTIFICATE OF INCORPORATION

                                       OF

                                    HI, INC.

 

                 The undersigned, being the President and Secretary of HI,

Inc., a corporation organized and existing under the laws of the State of

Delaware, do hereby certify as follows:

 

                 FIRST:  the name of the corporation is HI, Inc., and that the

date of filing of its original Certificate of Incorporation with the Secretary

of State of the State of Delaware was September 24, 1987; and

 

                 SECOND:  this Restated Certificate of Incorporation and the

amendments set forth herein have been duly adopted in accordance with the

provisions of Sections 228, 242 and 245 of the General Corporation Law of the

State of Delaware (the "General Corporation Law"); and

 

                 THIRD:  the text of the Certificate of Incorporation is hereby

restated and amended to read as herein set forth in full:

 

                                   ARTICLE I

                            NAME OF THE CORPORATION

 

                 The name of this corporation is IDEX Corporation (hereinafter

referred to as the "Corporation" or the "Company").

 

                                   ARTICLE II

                     REGISTERED AGENT AND REGISTERED OFFICE

 

                 The address of its registered office in the State of Delaware

is Corporation Trust Center, 1209 Orange Street in the City of Wilmington,

County of New Castle.  The name of its registered agent at such address is The

Corporation Trust Company.

 

                                  ARTICLE III

                           PURPOSE OF THE CORPORATION

 

                 The nature of business or purposes to be conducted or promoted

is to engage in any lawful act or activity for which corporations may be

organized under the General Corporation Law.

 

                                   ARTICLE IV

                            AUTHORIZED CAPITAL STOCK

 

                 The total number of shares of all classes of stock which the

Corporation shall have authority to issue is 10,000,000 shares, consisting of

2,000,000 shares of preferred stock, par value $.01 per share (the "Preferred

Stock") and 8,000,000 shares of common stock, par value $.01 per share (the

"Common Stock").

<PAGE>   7

 

                 The following is a description of each of the classes of stock

of the Corporation and a statement of the powers, preferences and rights or

such stock, and the qualifications, limitations and restrictions thereof:

 

                 A.       Authority of the Board of Directors.  The Preferred

Stock may be issued from time to time, in one or more series, and each series

shall be known and designated by such designations as may be stated and

expressed in a resolution or resolutions adopted by the Board of Directors of

the Corporation and as shall have been set forth in a certificate made,

executed, acknowledged, filed and recorded in the manner required by the laws

of the State of Delaware in order to make the same effective.  Each series

shall consist of such number of shares as shall be stated and expressed in such

resolution or resolutions providing for the issue of Preferred Stock of such

series together with such additional number of shares as the Board of Directors

by resolution or resolutions may from time to time determine to issue as a part

of such series.  All shares of any one series of such Preferred Stock shall be

alike in every particular except that shares issued at different times may

accumulate dividends from different dates.  The Board of Directors shall have

the power and authority to state and determine, in the resolution or

resolutions providing for the issue of each series of Preferred Stock, the

number of shares of each such series authorized to be issued, the voting powers

(if any) and the designations, preferences and relative, participating,

optional or other rights appertaining to each such series, and the

qualifications, limitations or restrictions thereof (including, but not by way

of limitation, full power and authority to determine as to the Preferred Stock

of each such series, the rate or rates of dividends payable thereon, the times

of payment of such dividends, the prices and manner upon which the same may be

redeemed, the amount or amounts payable thereon in the event of liquidation,

dissolution or winding up of the Corporation, and the right (if any) to convert

the same into, and/or to purchase, stock of any other class or series).  The

Board of Directors may from time to time decrease the number of shares of any

series of Preferred Stock (but not below the number thereof then outstanding).

The foregoing provisions of this paragraph with respect to the creation or

issuance of series of Preferred Stock shall be subject to any additional

conditions with respect thereto which may be contained in any resolutions then

in effect which shall have theretofore been adopted in accordance with the

foregoing provisions of this paragraph with respect to any then outstanding

series of Preferred Stock.

 

                 B.       Voting Rights.

 

                 1.       Common Stock.  The holders of the Common Stock shall

be entitled to one vote for each share held of record by such holders.

 

                 2.       Preferred Stock.  The Preferred Stock shall have no

voting rights and shall have no rights to receive notice of any meetings except

as required by law or expressly provided herein or in the resolution

establishing any series thereof.

 

                                      2

 

<PAGE>   8

 

                 C.       The Common Stock.

 

                 1.       The Common Stock shall be subject to the express

terms of the Preferred Stock and any series thereof.  Each share of Common

Stock shall be equal to every other share of Common Stock.

 

                 D.       Terms of Senior Preferred Stock.

 

                 1.       Designation; Number of Shares.  The following is a

statement of the designations, powers, preferences and the relative

participating, optional or other special rights and the qualifications,

limitations or restrictions of a series of Preferred Stock to be designated as

"Senior Redeemable Adjustable Rate Exchangeable Preferred Stock" (as used

herein and in Sections E and F hereof, the "Senior Preferred Stock").  The

number of shares of Senior Preferred Stock authorized for issuance hereby is

700,000.  The definitions of terms defined in this Section D are applicable

only to this Section D, unless the context otherwise requires.

 

                 2.       Dividends.

 

                 (a)      Rate.  The holders of the Senior Preferred Stock

shall be entitled to receive, when, as and if declared by the Corporation's

Board of Directors, out of the funds of the Corporation legally available

therefor pursuant to the General Corporation Law (as used herein and in

Sections E and F hereof, the "Legally Available Funds"), cumulative dividends,

computed in accordance with Section D(2)(b) hereof, on each share of Senior

Preferred Stock for each Quarterly Dividend Period (as defined in Section

D(2)(f) hereof) equal to the Liquidation Preference (as defined in Section

D(5)(a) hereof) of each such share multiplied by a rate per annum (the "Monthly

Dividend Rate") (such Monthly Dividend Rate being reset for each Monthly Period

(as defined in Section D(2)(f) hereof) that shares of Senior Preferred Stock

are outstanding) which Monthly Dividend Rate shall be equal to the sum of (i)

(A) with respect to any dividend paid in cash, 650 basis points (6.5%) and (B)

with respect to any dividend paid in additional shares of Senior Preferred

Stock, 700 basis points (7.0%) and (ii) the highest of (x) the Three Month

Treasury Rate or (y) the Ten Year Treasury Rate or (z) the Thirty Year Treasury

Rate for such Monthly Period; provided, however, that the Monthly Dividend Rate

for the first Monthly Period of the first Monthly Period of the first Quarterly

Dividend Period commencing on the day the shares of Senior Preferred Stock are

originally issued shall be 16.03%.  Dividends shall be payable quarterly on

April 15, July 15, October 15 and January 15, in each year (each a "Dividend

Payment Date"), commencing April 15, 1988.  The effective rate for any

Quarterly Dividend Period shall equal the average of the three Monthly Dividend

Rates for such Quarterly Dividend Period (the "Quarterly Dividend Rate");

provided, however, that the Quarterly Dividend Rate shall neither exceed 19%

nor be less than 14%.  Such dividends shall be cumulative from the date of

original issue of such shares.  Accrued and unpaid dividends on the Senior

Preferred Stock shall accrue additional dividends in respect thereof (the

"Additional Dividends"), compounded quarterly, at the Quarterly Dividend Rate

than applicable to the Senior Preferred Stock.   Each such dividend shall be

paid to the holders of record of shares of Senior Preferred Stock as they

appear on the stock register of the Corporation on such record date

 

                                      3

<PAGE>   9

 

as shall be fixed by the Board of Directors of the Corporation or a duly

authorized committee thereof, which date shall be not more than 60 days nor

less than 10 days preceding the Dividend Payment Date relating thereto.  On or

prior to January 15, 1993, all dividends may at the option of the Corporation

be paid, in lieu of cash, in additional shares of Senior Preferred Stock (based

on the Liquidation Preference thereof) and thereafter all dividends shall be

payable only in cash.  Upon any declaration of dividends to be paid in cash on

or prior to January 15, 1993, the Board of Directors of the Corporation shall

give written notice to the holders of record of shares of Senior Preferred

Stock on the record date for the quarter in respect of which such dividends are

to be paid not less than 10 days preceding the Dividend Payment Date for such

quarter.  Upon any declaration of dividends, the Board of Directors of the

Corporation or a duly authorized committee thereof shall calculate, in

accordance with this Section D(2), the Quarterly Dividend Rate (including the

Monthly Dividend Rate for each Monthly Period therein) for the Quarterly

Dividend Period with respect to which dividends are being paid.  The

Corporation may issue fractional shares in connection with the declaration and

payment of any dividend paid in additional shares of Senior Preferred Stock.

 

                 (b)      Computation.  Dividends (including Additional

Dividends) payable on the Senior Preferred Stock shall be computed on the basis

of a 360-day year of twelve 30-day months and, if payable for a period that is

less than a full Monthly Period, the actual number of days elapsed in the

period for which payable.

 

                 (c)      Taxes - Dividends Received Deduction.  The

Corporation (i) will not claim as an expense reducing taxable income any

dividends paid on the Senior Preferred Stock or any other shares of Preferred

Stock in any Federal income tax return, claim for refund or other statement,

report or submission made to the Internal Revenue Service (except to the extent

that there may be no reasonable basis in law to do otherwise); provided,

however, that the foregoing shall not apply to (x) any dividends paid deduction

(as defined in Section 561 of the Code or any successor provision) or (y) any

other deduction that is not inconsistent with the characterization of such

payments as dividends (within the meaning of Section 316(a) of the Internal

Revenue Code of 1986, as amended (the "Code"), or any successor provision) and

the holders' entitlement to claim the dividends received deduction, and (ii)

will make any election (or take any similar action) which may become necessary

to comply with clause (i).  At the reasonable request of any holder of shares

of Senior Preferred Stock (and at the expense of such holder), the Corporation

will join in the submission to the Internal Revenue Service of one request (and

will cooperate with respect to the submission of any additional requests) for a

ruling that the dividends paid on the Senior Preferred Stock will be eligible

for the dividends received deduction under Section 243(a)(1) of the Code, or

any successor provision); provided, however, that the foregoing shall not be

construed to require the Corporation to join in more than one ruling request

with respect to the Senior Preferred Stock.  In addition, the Corporation will

cooperate with any holder of Senior Preferred Stock (at the expense of such

holder) in any litigation, appeal, or other proceeding relating to the

eligibility for the dividends received deduction under Section 243(a)(1) of the

Code (or any successor provision) of any dividends (within the meaning of

Section 316(a) of the Code or any successor provision) paid on the Senior

Preferred Stock.  To the extent possible, the principles of this paragraph

shall also apply with respect to State and local

 

                                      4

<PAGE>   10

 

taxes.  Notwithstanding (ii) above, nothing contained herein shall affect or

impair the rights and ability of the Corporation to conduct the contest and/or

settlement of any issue raised in any United States tax audit according to the

reasonable business judgment of the Corporation, as the case may be.

 

                 (d)      Taxes - Distributions Treated as Dividends.  The

Corporation will use its best efforts to ensure that distributions made with

respect to the Senior Preferred Stock are treated as dividends within the

meaning of Section 316(a) of the Code or any successor provision.  The

Corporation's obligation under this paragraph (d) and paragraph (c) above shall

survive the payment or redemption, in whole or in part, or exchange, of the

Senior Preferred Stock or the transfer of any shares of Senior Preferred Stock.

 

                 (e)      Adjustment of Quarterly Dividend Rate.  The Quarterly

Dividend Rate shall be adjusted in the event that a "shelf" registration

statement covering the offering, on a delayed or continuous basis, of the

Senior Preferred Stock, is not filed or declared effective under the Securities

Act of 1933, as amended (the "ACT"), pursuant to and in accordance with the

terms and provisions of the Registration Rights Agreement substantially in the

form filed with the Secretary of the Corporation.

 

                 (f)      Definitions.  "Three Month Discount Rate" means, for

each monthly period (the "Monthly Period") during which shares of Senior

Preferred Stock are outstanding (each Monthly Period to commence on the

fifteenth day of every calendar month and end on the fifteenth day of the next

succeeding month; the first Monthly Period with respect to which the Quarterly

Dividend Rate is to be reset shall commence on February 15, 1988), the

arithmetic average (rounded to the nearest basis point) of the weekly average

per annum secondary market discount rates for three month United States

Treasury obligations for the three calendar weeks ending on the second Business

Day next preceding the commencement of each Monthly Period (the "Rate

Determination Period") (x) as published by the Federal Reserve Board (i) in its

Statistical Release H.15 (519), "Selected Interest Rates," which weekly per

annum secondary market discount rates presently are set forth in such

Statistical Release under the caption "U.S. Government Securities -- Treasury

Bills -- Second Market -- 3 Month" or (ii) if said Statistical Release H.15

(519) is not then published, in any release comparable to Statistical Release

H.15 (519) or (y) if the Federal Reserve Board shall not then be publishing a

comparable release, as published in any official publication or release of any

other United States Government Department or agency.  However, if the Three

Month Discount Rate cannot be determined as provided above, then the Three

Month Discount Rate shall mean the arithmetic average of the average per annum

secondary market discount rates, based on the asked prices for each Business

Day during the Rate Determination Period of all of the actively traded issues

of non-interest bearing United States Treasury obligations with a maturity of

not less than 80 nor more than 100 days from such Business Day (1) as published

in The Wall Street Journal or (2) if The Wall Street Journal shall cease such

publication, based on average asked prices as quoted by each of three United

States Government securities dealers of recognized national standing selected

by the Corporation.

 

                                      5

<PAGE>   11

 

                 "Three Month Treasury Rate" means, for each Monthly Period,

the result of the following calculation regarding the Three Month Discount Rate

for such period, rounded to the nearest basis point:

 

                      Three Month Discount Rate (%) x 365

               ------------------------------------------------

                360 - (91 x .01 x Three Month Discount Rate (%))

 

                 "Ten Year Treasury Rate" and "Thirty Year Treasury Rate"

means, with respect to each Monthly Period, the arithmetic average (rounded to

the nearest basis point) of the weekly average per annum yield to maturity

values adjusted to constant maturities of ten or thirty years, respectively,

for the Rate Determination Period as read from the yield curves of the most

actively traded marketable United States Treasury fixed interest rate

securities (x) constructed daily by the United States Treasury Department (i)

as published by the Federal Reserve Board in its Statistical Release H.15

(519), "Selected Interest Rates," which weekly average yield to maturity values

presently are set forth in such Statistical Release under the caption "U.S.

Government Securities -- Treasury Constant Maturities -- 10 Year" or "U.S.

Government Securities -- Treasury Constant Maturities -- 30 Year,"

respectively, or (ii) if said Statistical Release H.15 (519) is not then

published, as published by the Federal Reserve Board in any release comparable

to its Statistical Release H.15 (519) or (iii) if the Federal Reserve Board

shall not be publishing a comparable release, as published in any official

publication or release of any other United States Government Department or

agency, or (y) if the United States Treasury Department shall not then be

constructing such yield curves, then as constructed by the Federal Reserve

Board or any other United States Government department or agency and published

as set forth in (x) above.  However, if the Ten Year Treasury Rate or the

Thirty Year Treasury Rate, as the case may be, cannot be determined as provided

above, then the Ten Year Treasury Rate or the Thirty Year Treasury Rate, as the

case may be, shall mean the arithmetic average (rounded to the nearest basis

point) of the per annum yields to maturity for each Business Day during the

Rate Determination Period of all of the issues of actively trading issues of

non-interest bearing United States Treasury fixed interest rate securities

with a maturity of (A) not less than 117 months nor more than 123 months from

such Business Day, if the rate which cannot be otherwise determined is the Ten

Year Treasury Rate or (B) not less than 357 months nor more than 363 months

from such Business Day if the rate which cannot be otherwise determined is the

Thirty Year Treasury Rate, in each such case (1) as published in The Wall

Street Journal or (2) if The Wall Street Journal shall cease such publication,

based on average asked prices (or yields) as quoted by each of three United

States Government securities dealers of recognized national standing selected

by the corporation.

 

                 "Quarterly Dividend Period" means the period from January 15

through the next April 15, from April 15 through the next July 15, from July 15

through the next October 15, or from October 15 through the next January 15, as

the case may be; provided that the first Quarterly Dividend Period shall mean

the period commencing the day shares of Senior Preferred Stock are originally

issued and ending on April 15, 1988.

                                      6

 

<PAGE>   12

 

                 "Junior Preferred Stock" means the Series A Junior Redeemable

Preferred Stock due 2001 and Series B Junior Redeemable Preferred Stock due

2001 of the Corporation issuable under this Restated Certificate of

Incorporation.

 

                 "Business Day" means, with respect to the Senior Preferred

Stock, any day other than a Saturday, a Sunday or any day on which the New York

Stock Exchange is closed.

 

                 3.       Redemption of Senior Preferred Stock.

 

                 (a)      Mandatory Redemption.  As a mandatory redemption for

the retirement of the shares of Senior Preferred Stock, the Corporation shall,

subject to any applicable contractual restrictions, redeem, out of Legally

Available Funds, on July 15, 2000, if any such shares remain outstanding, all

such shares issued, at the redemption price of 100% of the Liquidation

Preference (as defined in Section D(5)(a) hereof).  Immediately prior to

authorizing or making such redemption with respect to the Senior Preferred

Stock, the Corporation, by resolution of its Board of Directors shall, to the

extent of any Legally Available Funds, declare a dividend on the Senior

Preferred Stock payable on the redemption date in an amount equal to any

accrued and unpaid dividends (including Additional Dividends) on the Senior

Preferred Stock as of such date and, if the Corporation does not have

sufficient Legally Available Funds to declare and pay all dividends (including

Additional Dividends) accrued at the time of such redemption, any remaining

accrued and unpaid dividends (including Additional Dividends) shall be added to

the redemption price.

 

                 If the Corporation shall fail to discharge its obligation to

redeem all of the outstanding shares of Senior Preferred Stock required to be

redeemed pursuant to this Section D(3)(a) (the "Senior Mandatory Redemption

Obligation"), the Senior Mandatory Redemption Obligation shall be discharged as

soon as the Corporation is able to discharge such Senior Mandatory Redemption

Obligation.

 

                 (b)      Optional Redemption.  Subject to contractual

restrictions of the Corporation to the contrary, the Senior Preferred Stock

shall be redeemable, in whole or in part (subject to the last paragraph of this

subsection (b)), out of Legally Available Funds, at the option of the

Corporation by resolution of its Board of Directors, at the redemption price

per share stated below at any time, or from time to time, after issuance, upon

giving notice as provided in paragraph (c) below.

 

                 If redeemed during the twelve-month period beginning January

15:

 

<TABLE>

<CAPTION>

                 Year                              Price

                 ----                              -----

                 <S>                               <C>

                 1988                              $105

                 1989                              $105

                 1990                              $105

                 1991                              $104

                 1992                              $103

                                                      

</TABLE>

 

                                      7

<PAGE>   13

 

<TABLE>

                 <S>                               <C>

                 1993                              $102

                 1994                              $101

                 1995 and thereafter               $100

</TABLE>

 

                 Immediately prior to authorizing or making any such redemption

with respect to the Senior Preferred Stock, the Corporation, by resolution of

its Board of Directors shall, to the extent of any Legally Available Funds,

declare a dividend on the Senior Preferred Stock payable on the redemption date

in an amount equal to any accrued and unpaid dividends (including Additional

Dividends) on the Senior Preferred Stock as of such date and if the Corporation

does not have sufficient Legally Available Funds as of the date such redemption

is authorized to declare and pay all dividends (including Additional Dividends)

accrued at the time of such redemption, any remaining accrued and unpaid

dividends (including Additional Dividends) shall be added to the redemption

price.

 

                 Unless the full cumulative dividends (including Additional

Dividends) on all outstanding shares of Senior Preferred Stock shall have been

paid or contemporaneously are declared and paid for all past dividend periods

(or included in the redemption price), the Corporation may not redeem only part

of the outstanding shares of Senior Preferred Stock pursuant to the first

paragraph of this subsection (b).

 

                 (c)      Notice of Redemption.  At least 30 days but not more

than 60 days prior to the date fixed for the redemption of shares of the Senior

Preferred Stock pursuant to Section D(3)(a) or D(3)(b) above, a written notice

shall be mailed to each holder of record of shares of Senior Preferred Stock to

be redeemed in a postage prepaid envelope addressed to such holder at his post

office address as shown on the records of the Corporation, notifying such

holder of the election of the Corporation to redeem such shares, stating the

date fixed for redemption thereof (hereinafter referred to as the redemption

date) and calling upon such holder to surrender to the Corporation on the

redemption date at the place designated in such notice his certificate or

certificates representing the number of shares specified in such notice of

redemption, provided, however, that no failure to give such notice nor any

defect therein shall affect the validity of the proceeding for the redemption

of any shares of Senior Preferred Stock to be redeemed except as to the holder

to whom the Corporation has failed to give said notice or except as to the

holder whose notice was defective.  On the redemption date each holder of

shares of Senior Preferred Stock to be redeemed shall present and surrender his

certificate or certificates for such shares to the Corporation at the place

designated in such notice and thereupon the redemption price of such shares

shall be paid to or on the order of the person whose name appears on such

certificate or certificates as the owner thereof and each surrendered

certificate shall be cancelled.  In case less than all the shares represented

by such certificate are redeemed, a new certificate shall be issued

representing the unredeemed shares.  From and after the redemption date (unless

default shall be made by the Corporation in payment of the redemption price)

all dividends on the shares of Senior Preferred Stock designated for redemption

in such notice shall cease to accrue and all rights of the holders thereof as

stockholders of the Corporation, except the right to receive the redemption

price thereof (including all accrued and unpaid dividends up to the redemption

date) upon the surrender of certificates representing the same, shall cease and

terminate and such shares shall not thereafter be transferred (except with the

consent of the

                                      8

 

<PAGE>   14

 

Corporation) on the books of the Corporation and such shares shall not be

deemed to be outstanding for any purpose whatsoever.  At its election, the

Corporation prior to the redemption date may deposit the redemption price

(including all accrued and unpaid dividends up to the redemption date) of the

shares of Senior Preferred Stock so called for redemption in trust for the

holders thereof with a bank or trust company having capital, surplus and

undivided profits aggregating not less than $50,000,000 in The Borough of

Manhattan, City and State of New York, in which case such notice to the holders

of the Senior Preferred Stock to be redeemed shall state the date of such

deposit, shall specify the office of such bank or trust company as the place of

payment of the redemption price and shall call upon such holders to surrender

the certificates representing such shares at such price on or after the date

fixed in such redemption notice (which shall not be later than the redemption

date) against payment of the redemption price (including all accrued and unpaid

dividends up to the redemption date).  From and after the making of such

deposit, the shares of Senior Preferred Stock so designated for redemption

shall not be deemed to be outstanding for any purpose whatsoever and the rights

of the holders of such shares shall be limited to the right to receive the

redemption price of such shares (including all accrued and unpaid dividends up

to the redemption date), without interest, upon surrender of the certificates

representing the same to the Corporation at said office of such bank or trust

company.  Any interest accrued on such funds shall be paid to the Corporation

from time to time.  Any moneys so deposited which shall remain unclaimed by the

holders of such Senior Preferred Stock at the end of two years after the

redemption date shall be returned by such bank or trust company to the

Corporation, after which the holders of the Senior Preferred Stock shall have

no further interest in such moneys, except as unsecured creditors of the

Corporation.

 

                 (d)      Reissuances.  Shares of Senior Preferred Stock which

have been issued and acquired in any manner, including shares purchased or

redeemed or exchanged, shall (upon compliance with any applicable provisions of

the laws of the State of Delaware) have the status of authorized and unissued

shares of the class of Preferred Stock undesignated as to series and may be

redesignated and reissued as part of any series of Preferred Stock; provided,

however, that no such issued and reacquired shares of Senior Preferred Stock

shall be reissued or sold as Senior Preferred Stock unless reissued as a stock

dividend on shares of Senior Preferred Stock.

 

                 (e)      Selection of Shares to be Redeemed.  If less than all

of the shares of Senior Preferred Stock are to be redeemed, the Board of

Directors of the Corporation shall allocate the total Liquidation Preference

(as defined in Section D(5)(a) hereof) of shares to be redeemed pro rata

between (i) any shares (A) which have not been registered under the Act and

disposed of pursuant to an effective registration statement or (B) which have

not been distributed to the public pursuant to Rule 144 (or any similar

provision then in force) under the Act ("Restricted Shares") and (ii) the

remaining shares.  The Restricted Shares to be redeemed shall be selected pro

rata (or as nearly pro rata as practicable) by lot, or by any other method that

complies with the requirements of the principal national securities exchange,

if any, on which the shares being redeemed are listed, at the direction of the

Board of Directors of the Corporation.

 

                 4.       Voting Rights.

 

                                      9

<PAGE>   15

 

 

                 (a)      No General Voting Rights.  The holders of the Senior

Preferred Stock shall not, except as required by law or as otherwise set forth

herein, have any right or power to vote on any question or in any proceeding or

to be represented at, or to receive notice of, any meeting of the Corporation's

stockholders.  On any matters on which the holders of the Senior Preferred

Stock shall be entitled to vote, they shall be entitled to one vote for each

share held.

 

                 (b)      Right to Elect Directors.  In case at any time (i)

the equivalent of six or more full quarterly dividends (whether consecutive or

not) on the Senior Preferred Stock shall be in arrears or (ii) the Corporation

shall have failed to discharge the Senior Mandatory Redemption Obligation as

set forth in Section D(3)(a) hereof, then during the period (the "Voting

Period") commencing with such time and ending with the time when (i) all

arrears in dividends on the Senior Preferred Stock shall have been paid and the

full dividend on the Senior Preferred Stock for the then current Quarterly

Dividend Period shall have been paid or declared and set apart for payment or

(ii) the Corporation shall have redeemed all shares of the Senior Preferred

Stock as set forth in Section D(3)(a) hereof, as the case may be, at any

meeting of the stockholders of the Corporation held for the election of

directors during the Voting Period, the holders of a majority of the

outstanding shares of Senior Preferred Stock represented in person or by proxy

at said meeting shall be entitled, as a class, to the exclusion of the holders

of all other classes or series of stock (including, without limitation, the

Junior Preferred Stock) of the Corporation, to elect 20% of the directors of

the Corporation, but in no event less than two directors of the Corporation.

During any Voting Period, the Board of Directors of the Corporation shall be

expanded to include such greater number of directors as may be necessary to

comply with this Section D(4)(b).  The remaining directors shall be elected by

the other series, class or classes of stock entitled to vote therefor, at each

meeting of stockholders held for the purpose of electing directors.

 

                 (c)      Special Meeting.  At any time when the voting rights

set forth in Section D(4)(b) hereof with respect to the election of directors

shall have vested in the holders of Senior Preferred Stock and if such right

shall not already have been initially exercised, a proper officer of the

Corporation shall, upon the written request of any holder of record of Senior

Preferred Stock then outstanding, addressed to the Secretary of the

Corporation, call a special meeting of holders of Senior Preferred Stock.  Such

meeting shall be held at the earliest practicable date upon the notice required

for annual meetings of stockholders at the place for holding annual meetings of

stockholders of the Corporation or, if none, at a place designated by the

Secretary of the Corporation.  If such meeting shall not be called by the

proper officers of the Corporation within 30 days after the personal service of

such written request upon the Secretary of the Corporation, or within 30 days

after mailing the same within the United States, by registered mail, addressed

to the Secretary of the Corporation at its principal office (such mailing to be

evidenced by the registry receipt issued by the postal authorities), then the

holders of record of 10% of the shares of Senior Preferred Stock then

outstanding may designate in writing a holder of Senior Preferred Stock to call

such meeting at the expense of the Corporation, and such meeting may be called

by such person so designated upon the notice required for annual meetings of

stockholders and shall be held at the same place as is elsewhere provided in

this Section D(4)(c).  Any holder of Senior Preferred Stock which would be

entitled to vote at such meeting shall have access

 

                                     10

 

<PAGE>   16

 

to the stock ledger books of the Corporation for the purpose of causing a

meeting of the stockholders to be called pursuant to the provisions of this

Section D(4)(c).  Notwithstanding the other provisions of this Section D(4)(c),

however, no such special meeting shall be called which will be held during a

period within 90 days immediately preceding the date fixed for the next annual

meeting of stockholders.  In lieu of a meeting of the holders of Senior

Preferred Stock, called as provided above, the holders of Senior Preferred

Stock may act during any Voting Period by written consent pursuant to Section

228 of the General Corporation Law.

 

                 (d)      Quorum.  At any meeting held for the purpose of

electing directors at which the holders of Senior Preferred Stock shall have

the right to elect directors as provided herein, the presence in person or by

proxy of the holders of at least one-third of the then outstanding shares of

Senior Preferred Stock shall be required and be sufficient to constitute a

quorum of such series for the election of directors by such series.  At any

such meeting or adjournment thereof (i) the absence of a quorum of the holders

of Senior Preferred Stock shall not prevent the election of directors other

than those to be elected by the holders of stock of such series and the absence

of a quorum or quorums of holders of capital stock entitled to elect such other

directors shall not prevent the election of directors to be elected by the

holders of the Senior Preferred Stock and (ii) in the absence of a quorum of

the holders of any class or series of stock entitled to vote for the election

of directors, a majority of the holders present in person or by proxy of such

class or series shall have the power to adjourn the meeting for the election of

directors which the holders of such class or series are entitled to elect, from

time to time without notice (except as required by law) other than announcement

at the meeting, until a quorum shall be present.

 

                 (e)      Term of Office of Directors; Vacancy.  Any director

who shall have been elected by holders of Senior Preferred Stock may be removed

at any time during a Voting Period, either for or without cause, by and only by

the affirmative vote of the holders of record of a majority of the outstanding

shares of Senior Preferred Stock given at a special meeting of such

stockholders called for such purpose (or by written consent without a meeting),

and any vacancy thereby created may be filled during such Voting Period by the

holders of Senior Preferred Stock present in person or represented by proxy at

such meeting.  Any director elected by holders of Senior Preferred Stock who

dies, resigns or otherwise ceases to be a director shall be replaced by the

affirmative vote of the holders of record of a majority of the outstanding

shares of Senior Preferred Stock at a special meeting of stockholders called

for that purpose (or by written consent without a meeting) or, if the holders

of Senior Preferred Stock fail to fill such vacancy within 30 days after such

vacancy has been created, by the remaining director(s) elected by holders of

Senior Preferred Stock.  At the end of the Voting Period, the holders of Senior

Preferred Stock shall be automatically divested of all voting power vested in

them under this subsection (e) but subject always to the subsequent vesting

hereunder of voting power in the holders of Senior Preferred Stock in the event

of (i) any similar cumulated arrearage in payment of quarterly dividends

occurring thereafter or (ii) the subsequent failure of the Corporation to make

the Senior Mandatory Redemption Obligation.  The term of all directors elected

pursuant to the provisions of this subsection (e) shall in all events expire at

the end of the Voting Period and upon such expiration the number of directors

constituting the Board of Directors shall, without further

 

                                     11

<PAGE>   17

 

action, be reduced by two (2) (or such other number by which the number of

directors constituting the Board of Directors shall have been increased

pursuant to Section D(4)(b) hereof), subject always to the increase of the

number of directors pursuant to Section D(4)(b) hereof in case of the future

right of the holders of Senior Preferred Stock to elect directors as provided

herein.

 

                 5.       Liquidation Preference.

 

                 (a)      Priority of Senior Preferred Stock in Event of

Liquidation or Dissolution.  In the event of any liquidation, dissolution, or

winding up of the affairs of the Corporation, whether voluntary or otherwise,

after payment or provision for payment of the debts and other liabilities of

the Corporation, the holders of the Senior Preferred Stock shall be entitled to

receive, out of the remaining net assets of the Corporation, the amount of one

hundred dollars ($100.00) in cash for each share of Senior Preferred Stock (the

"Liquidation Preference"), plus an amount equal to all dividends (including

Additional Dividends) accrued and unpaid on each such share up to the date

fixed for distribution, before any distribution shall be made to the holders of

the Common Stock, Junior Preferred Stock or any other capital stock ranking (as

to any such distribution) junior to the Senior Preferred Stock.  In the event

of any involuntary or voluntary liquidation, dissolution or winding up of the

affairs of the Corporation, the Corporation by resolution of its Board of

Directors shall, to the extent of any Legally Available Funds, declare a

dividend on the Senior Preferred Stock payable before any distribution is made

to any holder of any series of Preferred Stock or Common Stock or any other

stock of the Corporation ranking junior to the Senior Preferred Stock as to

liquidation, dissolution or winding up (including, without limitation, the

Junior Preferred Stock and any Common Stock), in an amount equal to any accrued

and unpaid dividends (including Additional Dividends) on the Senior Preferred

Stock as of such date and if the Corporation does not have sufficient Legally

Available Funds to declare and pay all dividends (including Additional

Dividends) accrued at the time of such liquidation, any remaining accrued and

unpaid dividends (including Additional Dividends) shall be added to the

Liquidation Preference to be received by the holders of the Senior Preferred

Stock for such Senior Preferred Stock.  Except as otherwise provided in this

Section D(5), holders of Senior Preferred Stock shall not be entitled to any

distribution in the event of liquidation, dissolution or winding up of the

affairs of the Corporation.

 

                 (b)      Merger Not Liquidation.  For the purposes of this

Section D(5), neither the voluntary sale, lease, conveyance, exchange or

transfer (for cash, shares of stock, securities or other consideration) of all

or substantially all the property or assets of the Corporation, nor the

consolidation or merger of the Corporation with one or more other corporations,

shall be deemed to be a liquidation, dissolution or winding up, voluntary or

involuntary, unless such voluntary sale, lease, conveyance, exchange or

transfer shall be in connection with a plan of liquidation, dissolution or

winding up of the Corporation.

 

                 (c)      Fractional Shares.  The Liquidation Preference with

respect to each outstanding fractional share of Senior Preferred Stock shall be

equal to a ratably proportionate amount of the Liquidation preference with

respect to each outstanding share of Senior Preferred Stock.

 

                                     12

 

 

<PAGE>   18

 

 

                 6.       No Conversion of Senior Preferred Stock.  The Senior

                          Preferred Stock shall not be convertible.

 

                 7.       Exchange For Junior Subordinated Debentures.

 

                 (a)      Requirements of Exchange.  The shares of Senior

Preferred Stock are exchangeable in whole, but not in part, at the option of

the Company on any Dividend Payment Date on or after January 15, 1990 for

Junior Subordinated Debentures Due July 15, 2000 of the Corporation (the

"Junior Subordinated Debentures") to be issued pursuant to an indenture (the

"Indenture") substantially in the form filed with the Secretary of the

Corporation; provided, that on the date of exchange (i) there shall be no

dividend arrearage (including the dividend payable on the date of exchange) on

the Senior Preferred Stock; (ii) no Default or Event of Default (each as

defined in the Indenture) under the Indenture shall have occurred and be

continuing, both prior to and after giving effect to the exchange; and (iii)

there shall be no other contractual restriction under any outstanding

indebtedness of the Corporation prohibiting the exchange.  Holders of

outstanding shares of Senior Preferred Stock will be entitled to receive $100

principal amount Junior Subordinated Debentures in exchange for each share of

Senior Preferred Stock held by them at the time of exchange.  In the event that

such exchange would result in the issuance of a Junior Subordinated Debenture

in a principal amount which is not an integral multiple of $1,000, the

difference between such principal amount and the highest integral multiple of

$1,000 which is less than such principal amount shall be paid to the holder in

cash.

 

                 (b)      Notice of Exchange.  The Corporation will mail to

each holder of record of the shares of Senior Preferred Stock written notice of

the Corporation's intention to exchange not less than 30 nor more than 60 days

prior to the Dividend Payment Date fixed for the exchange (the "Junior

Subordinated Debenture Exchange Date").  Each such notice shall state:  (i) the

Junior Subordinated Debenture Exchange Date, (ii) the place or places where

certificates for such shares of Senior Preferred Stock are to be surrendered

for exchange into Junior Subordinated Debentures and (iii) that dividends on

the shares of Senior Preferred Stock to be exchanged will cease to accrue on

such Junior Subordinated Debenture Exchange Date.  The form of the Indenture

may not be amended or supplemented before the Junior Subordinated Debenture

Exchange Date without the affirmative vote or consent of the holders of a

majority of the outstanding shares of Senior Preferred Stock, except for those

changes which would not adversely affect the legal rights of the holders.  The

Corporation will cause the Junior Subordinated Debentures to be authenticated

on the Junior Subordinated Debenture Exchange Date, and will pay interest on

the Junior Subordinated Debentures at the rate and on the dates specified in

such Indenture from the Junior Subordinated Debenture Exchange Date.

 

                 (c)      Effect of Exchange.  If notice has been mailed as

aforesaid, from and after the Junior Subordinated Debenture Exchange Date

(unless default shall be made by the Company in issuing Junior Subordinated

Debentures in exchange for, or default shall have been made by the Corporation

in making the final dividend payment on, the outstanding shares of Senior

Preferred Stock on the Junior Subordinated Debenture Exchange Date), dividends

on the shares of Senior Preferred Stock shall cease to accrue and said shares

shall

 

                                     13

<PAGE>   19

 

no longer be deemed to be issued and outstanding and all rights of the holders

thereof as stockholders of the Corporation (except the right to receive in

accordance with this Section D(7) the Corporation's Junior Subordinated

Debentures) shall cease and terminate.  Upon surrender in accordance with said

notice of the certificates for any shares of Senior Preferred Stock so

exchanged (properly endorsed or assigned for transfer, if the Corporation shall

so require and the notice shall so state), such shares shall be exchanged by

the Corporation into Junior Subordinated Debentures as aforesaid.

 

                 8.       Limitations.

 

                 (a)      Rank.  With respect to rights to receive dividends,

mandatory redemption payments and distributions upon liquidation, dissolution

or winding up of the Corporation, the Senior Preferred Stock shall rank prior

to all other capital stock of the Corporation outstanding at the time of

issuance of the Senior Preferred Stock and, as described in this Section D(8),

the Senior Preferred Stock shall be subject to the creation of Junior

Securities (as defined below) and, pursuant to the voting requirements of

Section D(8)(b)(ii), Parity Securities (as defined below); provided, however,

that no Parity or Junior Security shall be created that is entitled to receive

a dividend in cash with respect to any period of time which includes a dividend

period for which Senior Preferred Stock receives a dividend payable in

additional shares of Senior Preferred Stock.

 

                 (b)      Payments on Junior Securities and Parity Securities.

So long as any shares of Senior Preferred Stock are outstanding, the

Corporation shall not declare, pay or set apart for payment any dividend on the

Junior Preferred Stock or any other capital stock of the Corporation ranking

junior to the Senior Preferred Stock as to dividends or liquidation rights

(collectively, "Junior Securities") or any other capital stock of the

Corporation ranking on a parity with the Senior Preferred Stock as to dividends

or liquidation rights (collectively, "Parity Securities") or make any payment

on account of, or set apart for payment money for a sinking or other similar

fund for, the purchase, redemption (whether optional or mandatory) or other

retirement of, any of the Junior Securities or Parity Securities or any

warrants, rights, calls or options exercisable for or convertible into any of

the Junior Securities or Parity Securities, or make any distribution in respect

thereof, either directly or indirectly, whether in cash, obligations or shares

of the Corporation or the property thereof (other than (i) dividends,

distributions, redemptions, sinking funds or other similar obligations to be

satisfied pro rata (based on aggregate liquidation value) between Parity

Securities and the Senior Preferred Stock, (ii) distributions or dividends in

Junior Securities to the holders of Junior Securities and (iii) the repurchase

of Junior Securities from certain of the Corporation's or its subsidiaries'

officers and key employees, in an aggregate amount not to exceed $1,500,000,

upon the death, disability, voluntary or involuntary termination of any such

persons), and shall not permit any corporation or other entity directly or

indirectly controlled by the Corporation to purchase or redeem any of the

Junior Securities or Parity Securities or any warrants, rights, calls or

options exercisable for or convertible into any of the Junior Securities or

Parity Securities; provided, however, that with respect to dividends and

distributions, payments may be made or amounts set aside for payment of

dividends on the Junior Securities or Parity Securities if prior to or

concurrently with such payment or setting apart for payment, all accrued and

unpaid dividends on shares of the Senior Preferred

 

                                     14

 

<PAGE>   20

 

Stock not paid on the dates provided for in Section D(2)(a) hereof (including

Additional Dividends) shall have been or shall be paid.

 

                 (c)      Voting Rights - Extraordinary Events.

 

                          (i)     Amendments Affecting the Terms of the Senior

         Preferred Stock.  So long as any shares of the Senior Preferred Stock

         are outstanding and unless the vote or consent of the holders of a

         greater number of shares shall then be required by law (and in

         addition to any vote then required by law), the consent of the holders

         of at least 66-2/3% of all of the outstanding shares of Senior

         Preferred Stock (given in person or by proxy, either by written

         consent pursuant to Section 228 of the General Corporation Law or by a

         vote at a special meeting of stockholders called for such purpose or

         at any annual meeting of stockholders, with the holders of Senior

         Preferred Stock voting as class and with each share of Senior

         Preferred Stock having one vote) shall be necessary for authorizing,

         effecting or validating the amendment, alteration or repeal of any of

         the provisions of this Article IV.D or of any amendment thereto, or of

         any resolution or resolutions providing for the issue of any stock,

         that would have an adverse effect on the designations, rights,

         preferences or privileges of shares of Senior Preferred Stock.

 

                          (ii)    Creation of Priority Securities; Merger or

         Consolidation.  So long as any shares of the Senior Preferred Stock

         are outstanding and unless the vote or consent of the holders of a

         greater number of shares shall then be required by law (and in

         addition to any vote then required by law), the consent of the holders

         of at least 66-2/3 of all of the outstanding shares of Senior

         Preferred Stock (given in person or by proxy, either by written

         consent pursuant to Section 228 of the General Corporation Law or by a

         vote at a special meeting of stockholders called for such purpose or

         at any annual meeting of stockholders, with the holders of Senior

         Preferred Stock voting as a class and with each share of Senior

         Preferred Stock having one vote) shall be required in order to

         authorize (A) the creation of any class or series of Senior Preferred

         Stock ranking prior to the Senior Preferred Stock as to dividends or

         upon liquidation (collectively, "Priority Securities") or any class or

         series of Parity Securities or the authorization of additional shares

         of any class or series of Priority Securities or Parity Securities or

         (B) the sale, lease or conveyance of all or substantially all of the

         Corporation's assets or the merger or consolidation of the Corporation

         with or into any other entity if as a result of such transaction the

         Senior Preferred Stock would be redeemed for less than its Liquidation

         Preference plus any accrued and unpaid dividends (including Additional

         Dividends), or as a result of which the Senior Preferred Stock would

         continue in existence (either as stock in the Corporation or in the

         surviving company in a merger) but with an adverse alteration in the

         specified powers, designations, rights, preferences or privileges.

 

                          (iii)   Authorization or Issuance of Junior

         Securities.  Subject to the provisions of Section D(8)(a) hereof,

         nothing herein contained shall be construed so as to require a class

         vote or the consent of the holders of the outstanding shares of Senior

         Preferred Stock (A) in connection with any increase in the total

         number of

 

                                     15

 

<PAGE>   21

 

         authorized shares or issuance of additional shares of Common Stock, or

         (B) in connection with the authorization or increase or issuance of

         additional shares of any class or series of Junior Securities.

 

                          (iv)    Restriction on Voting Rights.  The

         limitations stated above shall not apply if, at or prior to the time

         when the distribution, payment, purchase, redemption, discharge,

         conversion, exchange, amendment, alteration, repeal, issuance, sale,

         lease, conveyance, merger or consolidation is to occur, as the case

         may be, provision is made for the concurrent redemption of all

         outstanding shares of Senior Preferred Stock, including any shares of

         Senior Preferred Stock issued in payment of dividends on the Senior

         Preferred Stock.  Nothing herein contained shall in any way limit the

         right and power of the Corporation to issue the presently authorized

         but unissued shares of its capital stock, or bonds, notes, mortgages,

         debentures, and other obligations, and to incur indebtedness to banks

         and to other lenders.

 

                 (d)      Construction of Conflicting Terms.  In the event of

any conflict between the terms of the Senior Preferred Stock and any Junior

Securities or Parity Securities, the terms of the Senior Preferred Stock shall

control and apply.

 

                 E.       Terms of Series A Junior Preferred Stock.

 

                 1.       Designation; Number of Shares.  The following is a

statement of the designations, powers, preferences and the relative

participating, optional or other special rights and the qualifications,

limitations or restrictions of a series of Preferred Stock to be designated as

"Series A Junior Redeemable Preferred Stock due 2001" (as used herein and in

Sections D and F hereto, the "Series A Junior Preferred Stock").  The number of

shares of Series A Junior Preferred Stock authorized for issuance hereby is

50,000.  The definitions of terms defined in this Section E are applicable only

to this Section E, unless the context otherwise requires.

 

                 2.       Dividends.

 

                 (a)      Rate.  The holders of the shares of Series A Junior

Preferred Stock shall be entitled to receive, when, as and if declared by the

Board of Directors, out of Legally Available Funds cumulative dividends on each

share of Series A Junior Preferred Stock for each Quarterly Dividend Period (as

defined below) at the annual rate of 12% ($12.00) per share, and no more.  Such

dividends shall be payable in equal quarterly payments on April 15, July 15,

October 15, and January 15, in each year (each a "Dividend Payment Date"),

commencing April 15, 1988.  Each period from January 15 through the next April

15, from April 15 through the next July 15, from July 15 through the next

October 15, or from October 15 through the next January 15, as the case may be,

is hereinafter referred to as a "Quarterly Dividend Period"; provided that the

first Quarterly Dividend Period shall mean the period commending the day shares

of Series A Junior Preferred Stock are originally issued and ending on April

15, 1988.  Each of such quarterly dividends (whether payable in cash or stock)

shall be fully cumulative and shall accrue

                                     16

 

<PAGE>   22

 

(whether or not declared), without interest from the first day of the

applicable Quarterly Dividend Period.  Each such dividend shall be paid to the

holders of record of shares of Series A Junior Preferred Stock as they appear

on the stock register of the Corporation on such record date as shall be fixed

by the Board of Directors of the Corporation or a duly authorized committee

thereof, which date shall be not more than 60 days nor less than 10 days

preceding the Dividend Payment Date relating thereto.  On or prior to January

15, 1993, all dividends may at the option of the Corporation be paid, in lieu

of cash, in additional shares of Series A Junior Preferred Stock (based on the

Liquidation Preference thereof) and thereafter all dividends shall be payable

only in cash; provided, however, that if the Corporation shall fail to pay a

dividend payment in cash on or prior to January 15, 1993, then the Corporation

shall make such dividend payment in additional shares of Series A Junior

Preferred Stock to the extent permitted by applicable law, regardless of the

terms of any other securities of the Corporation or any contract or other

agreement to which it may be a party.  The Corporation may issue fractional

shares of any dividend paid in additional shares of Series A Junior Preferred

Stock.

 

                 (b)      Computation.  Dividends payable on the Series A

Junior Preferred Stock shall be computed on the basis of a 360-day year of

twelve 30-day months and, if payable for a period that is less than a full

Quarterly Dividend Period, the actual number of days elapsed in the period for

which payable.

 

                 3.       Redemption of Series A Junior Preferred Stock.

 

                 (a)      Mandatory Redemption.  As a mandatory redemption for

the retirement of the shares of Series A Junior Preferred Stock, the

Corporation shall, subject to any applicable contractual restrictions, redeem,

out of Legally Available Funds, on July 15, 2001, if any such shares remain

outstanding, all such shares issued, at the redemption price of 100% of the

Series A Liquidation Preference (as defined in Section E(5)(a) hereof).

Immediately prior to authorizing or making such redemption with respect to the

Series A Junior Preferred Stock, the Corporation, by resolution of its Board of

Directors shall, to the extent of any Legally Available Funds, declare a

dividend on the Series A Junior Preferred Stock payable on the redemption date

in an amount equal to any accrued and unpaid dividends on the Series A Junior

Preferred Stock as of such date and, if the Corporation does not have

sufficient legally Available Funds to declare and pay all dividends accrued at

the time of such redemption, any remaining accrued and unpaid dividends shall

be added to the redemption price.

 

                 If the Corporation shall fail to discharge its obligation to

redeem all of the outstanding shares of Series A Junior Preferred Stock

required to be redeemed pursuant to this Section E(3)(a) (the "Series A Junior

Mandatory Redemption Obligation"), the Series A Junior Mandatory Redemption

Obligation shall be discharged as soon as the Corporation is able to discharge

such Series A Junior Mandatory Redemption Obligation.

 

                 (b)      Optional Redemption.  Subject to contractual or other

restrictions of the Corporation to the contrary, the Series A Junior Preferred

Stock shall be redeemable, in whole or in part (subject to the next succeeding

paragraph), out of Legally Available Funds,

 

                                     17

 

<PAGE>   23

 

at the option of the Corporation by resolution of its Board of Directors, at a

redemption price per share of $100.  Immediately prior to authorizing or making

any such redemption with respect to the Series A Junior Preferred Stock, the

Corporation, by resolution of its Board of Directors shall, to the extent of

any Legally Available Funds, declare a dividend on the Series A Junior

Preferred Stock payable on the redemption date in an amount equal to any

accrued and unpaid dividends on the Series A Junior Preferred Stock as of such

date and if the Corporation does not have sufficient legally Available Funds as

of the date such redemption is authorized to declare and pay all dividends

accrued at the time of such redemption, any remaining accrued and unpaid

dividends shall be added to the redemption price.

 

                 Unless the full cumulative dividends on all outstanding shares

of Series A Junior Preferred Stock shall have been paid or contemporaneously

are declared and paid for all past dividend periods (or included in the

redemption price), the Corporation may not redeem only part of the outstanding

shares of Series A Junior Preferred Stock pursuant to the first paragraph of

this subsection (b).

 

                 (c)      Notice of Redemption.  At least 30 days but not more

than 60 days prior to the date fixed for the redemption of shares of the Series

A Junior Preferred Stock pursuant to Section E(3)(a) or E(3)(b) above, a

written notice shall be mailed to each holder of record of shares of Series A

Junior Preferred Stock to be redeemed in a postage prepaid envelope addressed

to such holder at his post office address as shown on the records of the

Corporation, notifying such holder of the election of the Corporation to redeem

such shares, stating the date fixed for redemption thereof (hereinafter

referred to as the redemption date) and calling upon such holder to surrender

to the Corporation on the redemption date at the place designated in such

notice his certificate or certificates representing the number of shares

specified in such notice of redemption, provided, however, that no failure to

give such notice nor any defect therein shall affect the validity of the

proceeding for the redemption of any shares of Series A Junior Preferred Stock

to be redeemed except as to the holder to whom the Corporation has failed to

give said notice or except as to the holder whose notice was defective.  If at

any time there shall be only one holder of all outstanding shares of Series A

Junior Preferred Stock, the notice required by this subsection (c) shall be

sent by telecopy or by registered or certified mail, postage prepaid, to such

sole shareholder.  On the redemption date each holder of shares of Series A

Junior Preferred Stock to be redeemed shall present and surrender his

certificate or certificates for such shares to the Corporation at the place

designated in such notice and thereupon the redemption price of such shares

shall be paid to or on the order of the person whose names appears on such

certificate or certificates as the owner thereof and each surrendered

certificate shall be cancelled.  In case less than all the shares represented

by such certificate are redeemed, a new certificate shall be issued

representing the unredeemed shares.  From and after the redemption date (unless

default shall be made by the Corporation in payment of the redemption price)

all dividends on the shares of Series A Junior Preferred Stock designated for

redemption in such notice shall cease to accrue and all rights of the holders

thereof as stockholders of the Corporation, except the right to receive the

redemption price thereof (including all accrued and unpaid dividends up to the

redemption date) upon the surrender of certificates representing the same,

shall cease and terminate and such shares shall not thereafter be transferred

(except with the

 

                                     18

 

<PAGE>   24

 

consent of the Corporation) on the books of the Corporation and such shares

shall not be deemed to be outstanding for any purpose whatsoever.  At its

election, the Corporation prior to the redemption date may deposit the

redemption price (including all accrued and unpaid dividends up to the

redemption date) of the shares of Series A Junior Preferred Stock so called for

redemption in trust for the holders thereof with a bank or trust company having

capital, surplus and undivided profits aggregating not less than $50,000,000 in

The Borough of Manhattan, City and State of New York, in which case such notice

to the holders of the Series A Junior Preferred Stock to be redeemed shall

state the date of such deposit, shall specify the office of such bank or trust

company as the place of payment of the redemption price and shall call upon

such holders to surrender the certificates representing such shares at such

price on or after the date fixed in such redemption notice (which shall not be

later than the redemption date) against payment of the redemption price

(including all accrued and unpaid dividends up to the redemption date).  From

and after the making of such deposit, the shares of Series A Junior Preferred

Stock so designated for redemption shall not be deemed to be outstanding for

any purpose whatsoever and the rights of the holders of such shares shall be

limited to the right to receive the redemption price of such shares (including

all accrued and unpaid dividends up to the redemption date), without interest,

upon surrender of the certificates representing the same to the Corporation at

said office of such bank or trust company.  Any interest accrued on such funds

shall be paid to the Corporation from time to time.  Any moneys so deposited

which shall remain unclaimed by the holders of such Series A Junior Preferred

Stock at the end of two years after the redemption date shall be returned by

such bank or trust company to the Corporation, after which the holders of the

Series A Junior Preferred Stock shall have no further interest in such moneys,

except as unsecured creditors of the Corporation.

 

                 (d)      Reissuances.  Shares of Series A Junior Preferred

Stock which have been issued and acquired in any manner, including shares

purchased or redeemed or exchanged, shall (upon compliance with any applicable

provisions of the laws of the State of Delaware) have the status of authorized

and unissued shares of the class of Preferred Stock undesignated as to series

and may be redesignated and reissued as part of any series of Preferred Stock;

provided, however, that no such issued and reacquired shares of Series A Junior

Preferred Stock shall be reissued or sold as Series A Junior Preferred Stock

unless reissued as a stock dividend on shares of Series A Junior Preferred

Stock.

 

                 4.       Voting Rights.

 

                 (a)      No General Voting Rights.  The holders of the Series

A Junior Preferred Stock shall not, except as required by law or as otherwise

set forth herein, have any right or power to vote on any question or in any

proceeding or to be represented at, or to receive notice of, any meeting of the

Corporation's stockholders.  On any matters on which the holders of the Series

A Junior Preferred Stock shall be entitled to vote, they shall be entitled to

one vote for each share held.

 

                 (b)      Right to Elect Directors.  In case at any time (i)

the equivalent of six or more full quarterly dividends (whether consecutive or

not) on the Series A Junior Preferred Stock shall be in arrears or (ii) the

Corporation shall have failed to discharge the

 

                                     19

<PAGE>   25

 

Series A Junior Mandatory Redemption Obligation of shares of Series A Junior

Preferred Stock as set forth in Section E(3)(a) hereof, then during the period

(the "Voting Period") commencing with such time and ending with the time when

(i) all arrears in dividends on the Series A Junior Preferred Stock shall have

been paid and the full dividend on the Series A Junior Preferred Stock for the

then current Quarterly Dividend Period shall have been paid or declared and set

apart for payment or (ii) the Corporation shall have redeemed all shares of the

Series A Junior Preferred Stock as set forth in Section E(3)(a) hereof, as the

case may be, at any meeting of the stockholders of the Corporation held for the

election of directors during the Voting Period, the holders of a majority of

the outstanding shares of Series A Junior Preferred Stock represented in person

or by proxy at said meeting shall be entitled, as a class, to the exclusion of

the holders of all other classes or series of stock of the Corporation, to

elect one (1) director of the Corporation.  During any Voting Period, the Board

of Directors of the Corporation shall be expanded to include such additional

director to comply with this Section E(4)(b).  The remaining directors shall be

elected by the other series, class or classes of stock entitled to vote

therefor, at each meeting of stockholders held for the purpose of electing

directors.

 

                 (c)      Special Meeting.  At any time when the voting rights

set forth in Section E(4)(b) hereof with respect to the election of a director

shall have vested in the holders of Series A Junior Preferred Stock and if such

right shall not already have been initially exercised, a proper officer of the

Corporation shall, upon the written request of any holder of record of Series A

Junior Preferred Stock then outstanding, addressed to the Secretary of the

Corporation, call a special meeting of holders of Series A Junior Preferred

Stock.  Such meeting shall be held at the earliest practicable date upon  the

notice required for annual meetings of stockholders at the place for holding

annual meetings of stockholders of the Corporation or, if none, at a place

designated by the Secretary of the Corporation.  If such meeting shall not be

called by the proper officers of the Corporation within 30 days after the

personal service of such written request upon the Secretary of the Corporation,

or within 30 days after mailing the same within the United States, by

registered mail, addressed to the Secretary of the Corporation at its principal

office (such mailing to be evidenced by the registry receipt issued by the

postal authorities), then the holders of record of 10% of the shares of Series

A Junior Preferred Stock then outstanding may designate in writing a holder of

Series A Junior Preferred Stock to call such meeting at the expense of the

Corporation, and such meeting may be called by such person so designated upon

the notice required for annual meetings of stockholders and shall be held at

the same place as is elsewhere provided in this Section E(4)(c).  Any holder of

Series A Junior Preferred Stock which would be entitled to vote at such meeting

shall have access to the stock ledger books of the Corporation for the purpose

of causing a meeting of the stockholders to be called pursuant to the

provisions of this Section E(4)(c).  Notwithstanding the other provisions of

this Section E(4)(c), however, no such special meeting shall be called which

will be held during a period within 90 days immediately preceding the date

fixed for the next annual meeting of stockholders.  In lieu of a meeting of the

holders of Series A Junior Preferred Stock, called as provided above, the

holders of Series A Junior Preferred Stock may act during any Voting Period by

written consent pursuant to Section 228 of the General Corporation Law.

 

                                     20

<PAGE>   26

 

                 (d)      Quorum.  At any meeting held for the purpose of

electing directors at which the holders of Series A Junior Preferred Stock

shall have the right to elect a director as provided herein, the presence in

person or by proxy of the holders of at least one-third of the then outstanding

shares of Series A Junior Preferred Stock shall be required and be sufficient

to constitute a quorum of such series for the election of directors by such

series.  At any such meeting or adjournment thereof (i) the absence of a quorum

of the holders of Series A Junior Preferred Stock shall not prevent the

election of directors other than those to be elected by the holders of stock of

such series and the absence of a quorum or quorums of holders of capital stock

entitled to elect such other directors shall not prevent the election of

directors to be elected by the holders of the Series A Junior Preferred Stock

and (ii) in the absence of a quorum of the holders of any class or series of

stock entitled to vote for the election of directors, a majority of the holders

present in person or by proxy of such class or series shall have the power to

adjourn the meeting for the election of directors which the holders of such

class or series are entitled to elect, from time to time without notice (except

as required by law) other than announcement at the meeting, until a quorum

shall be present.

 

                 (e)      Term of Office of Directors; Vacancy.  Any director

who shall have been elected by holders of Series A Junior Preferred Stock may

be removed at any time during a Voting Period, either for or without cause, by

and only by the affirmative vote of the holders of record of a majority of the

outstanding shares of Series A Junior Preferred Stock given at a special

meeting of such stockholders called for such purpose (or by written consent

without a meeting), and any vacancy thereby created may be filled during such

Voting Period by the holders of Series A Junior Preferred Stock present in

person or represented by proxy at such meeting.  Any director elected by

holders of Series A Junior Preferred Stock who dies, resigns or otherwise

ceases to be a director shall be replaced by the affirmative vote of the

holders of record of a majority of the outstanding shares of Series A Junior

Preferred Stock at a special meeting of stockholders called for that purpose

(or by written consent without a meeting).  At the end of the Voting Period,

the holders of Series A Junior Preferred Stock shall be automatically divested

of all voting power vested in them under this subsection (e) but subject always

to the subsequent vesting hereunder of voting power in the holders of Series A

Junior Preferred Stock in the event of (i) any similar cumulated arrearage in

payment of quarterly dividends occurring thereafter or (ii) the subsequent

failure of the Corporation to make the Series A Junior Mandatory Redemption

Obligation.  The term of all directors elected pursuant to the provisions of

this subsection (e) shall in all events expire at the end of the Voting Period

and upon such expiration the number of directors constituting the Board of

Directors shall, without further action, be reduced by one (1), subject always

to the increase of the number of directors pursuant to Section E(4)(b) hereof

in case of the future right of the holders of Series A Junior Preferred Stock

to elect directors as provided herein.

 

                 (f)      Actions Not Materially Adverse.  (i) The creation,

authorization or issuance of any shares of any equity securities of the

Corporation with which the Series A Junior Preferred Stock ranks prior, or

which rank on a parity with the Senior Preferred Stock, or to which the Senior

Preferred Stock is junior, whether with respect to dividends or upon

liquidation, dissolution or otherwise (all such securities collectively

referred to as "Additional Securities"), or the creation, authorization or

issuance of any obligation or

 

                                     21

<PAGE>   27

 

security convertible into or evidencing the right to purchase any Additional

Securities, (ii) the creation of any indebtedness of any kind of the

Corporation, or (iii) the increase or decrease in the amount of authorized

capital stock of any class, including the Preferred Stock, or series thereof

except the Series A Junior Preferred Stock, or any increase, decrease or change

in the par value of any such class other than the Preferred Stock, shall not

require the consent of the holders of Series A Junior Preferred Stock and shall

not be deemed to affect materially and adversely the rights, preferences,

privileges and voting rights of shares of Series A Junior Preferred Stock.

 

                 (g)      Issuance of Additional Shares of Series A Junior

Preferred Stock.  Except as provided in Section E(2)(a) hereof with respect to

the payment of dividends on shares of Series A Junior Preferred Stock in

additional shares of such stock, the Corporation shall not issue any additional

shares of Series A Junior Preferred Stock without the consent (given in person

or by proxy, either by written consent pursuant to Section 228 of the General

Corporation Law or by a vote at a special meeting of stockholders called for

such purpose or at any annual meeting of stockholders, with the holders of

Series A Junior Preferred Stock voting as a class and each share of such stock

having one vote) of the holders of the majority of outstanding shares of Series

A Junior Preferred Stock.

 

                 5.       Liquidation Preference.

 

                 (a)      Priority of Series A Junior Preferred Stock in Event

of Liquidation or Dissolution.  In the event of any liquidation, dissolution,

or winding up of the affairs of the Corporation, whether voluntary or

otherwise, after payment or provision for payment of the debts and other

liabilities of the Corporation, the holders of the Series A Junior Preferred

Stock shall be entitled to receive, out of the remaining net assets of the

Corporation, the amount of one hundred dollars ($100.00) in cash for each share

of Series A Junior Preferred Stock (the "Series A Liquidation Preference"),

plus an amount equal to all dividends accrued and unpaid on each such share up

to the date fixed for distribution, before any distribution shall be made to

the holders of the Common Stock, the Series B Junior Preferred Stock or any

other capital stock ranking (as to any such distribution) junior to the Series

A Junior Preferred Stock.  In the event of any involuntary or voluntary

liquidation, dissolution or winding up of the affairs of the Corporation, the

Corporation by resolution of its Board of Directors shall (subject to Section

E(7)(b) hereof), to the extent of any Legally Available Funds, declare a

dividend on the Series A Junior Preferred Stock payable before any distribution

is made to any holder of any Series B Preferred Stock or Common Stock or any

other stock of the Corporation ranking junior to the Series A Junior Preferred

Stock as to liquidation, dissolution or winding up, in an amount equal to any

accrued and unpaid dividends on the Series A Junior Preferred Stock as of such

date and if the Corporation does not have sufficient Legally Available Funds to

declare and pay all dividends accrued at the time of such liquidation, any

remaining accrued and unpaid dividends shall be added to the Series A

Liquidation Preference to be received by the holders of the Series A Junior

Preferred Stock for such Series A Junior Preferred Stock.  Except as otherwise

provided in this Section E(5), holders of Series A Junior Preferred Stock shall

not be entitled to any distribution in the event of liquidation, dissolution or

winding up of the affairs of the Corporation.

 

                                     22

 

<PAGE>   28

 

 

                 (b)      Merger Not Liquidation.  For the purposes of this

Section E(5), neither the voluntary sale, lease, conveyance, exchange or

transfer (for cash, shares of stock, securities or other consideration) of all

or substantially all the property or assets of the Corporation, nor the

consolidation or merger of the Corporation with one or more other corporations,

shall be deemed to be a liquidation, dissolution or winding up, voluntary or

involuntary, unless such voluntary sale, lease, conveyance, exchange or

transfer shall be in connection with a plan of liquidation, dissolution or

winding up of the Corporation.

 

                 (c)      Fractional Shares.  The Liquidation Preference with

respect to each outstanding fractional share of Series A Junior Preferred Stock

shall be equal to a ratably proportionate amount of the Liquidation preference

with respect to each outstanding share of Series A Junior Preferred Stock.

 

                 6.       No Conversion of Series A Junior Preferred Stock.

The Series A Junior Preferred Stock shall not be convertible or exchangeable.

 

                 7.       Limitations.

 

                 (a)      Rank.  With respect to rights to receive dividends,

mandatory redemption payments and distributions upon liquidation, dissolution

or winding up of the Corporation, the Series A Junior Preferred Stock shall

rank prior to all other stock of the Corporation outstanding at the time of

issuance of the Series A Junior Preferred Stock, except the Senior Preferred

Stock.  Series A Junior Preferred Stock shall be subject to the creation of

Junior Securities (as defined below) and, as described in Section E(4)(f)

hereof, securities which rank on a parity with the Senior Preferred Stock or to

which the Senior Preferred Stock is junior.

 

                 (b)      Payments on Junior Securities and Parity Securities.

So long as any shares of Series A Junior Preferred Stock are outstanding, the

Corporation shall not declare, pay or set apart for payment any dividend on the

Common Stock, the Series B Junior Preferred Stock or any other capital stock of

the Corporation ranking junior to Series A Junior Preferred Stock as to

dividends or liquidation rights (collectively, "Junior Securities") or any

other capital stock of the Corporation ranking on a parity with the Series A

Junior Preferred Stock as to dividends or liquidation rights (collectively,

"Parity Securities") or make any payment on account of, or set apart for

payment money for a sinking or other similar fund for, the purchase, redemption

(whether optional or mandatory) or other retirement of, any of the Junior

Securities or Parity Securities or any warrants, rights, calls or options

exercisable for or convertible into any of the Junior Securities or Parity

Securities, or make any distribution in respect thereof, either directly or

indirectly, whether in cash, obligations or shares of the Corporation or the

property thereof (other than (i) dividends, distributions, redemptions, sinking

funds or other similar obligations to be satisfied pro rata (based on aggregate

liquidation value) between Parity Securities and the Series A Junior Preferred

Stock, (ii) distributions or dividends in Junior Securities to the holders of

Junior Securities and (iii) the repurchase of Junior Securities from certain of

the Corporation's or its subsidiaries' officers and key employees, upon the

death, disability, voluntary or involuntary termination of any such persons),

and shall not permit any corporation or other entity directly

 

 

                                     23

<PAGE>   29

 

or indirectly controlled by the Corporation to purchase or redeem any of the

Junior Securities or Parity Securities or any warrants, rights, calls or

options exercisable for or convertible into any of the Junior Securities or

Parity Securities; provided, however, that with respect to dividends and

distributions, payments may be made or amounts set aside for payment of

dividends on the Junior Securities or Parity Securities if prior to or

concurrently with such payment or setting apart for payment, all accrued and

unpaid dividends on shares of the Series A Junior Preferred Stock not paid on

the dates provided for in Section E(2)(a) hereof shall have been or shall be

paid.

 

                 F.       Terms of Series B Junior Preferred Stock.

 

                 1.       Designation; Number of Shares.  The following is a

statement of the designations, powers, preferences and the relative

participating, optional or other special rights and the qualifications,

limitations or restrictions of a series of Preferred Stock to be designated as

"Series B Junior Redeemable Preferred Stock due 2001" (as used herein and in

Sections D and E hereof, the "Series B Junior Preferred Stock").  The number of

shares of Series B Junior Preferred Stock authorized for issuance hereby is

450,000.  The definitions of terms defined in this Section F are applicable

only to this Section F, unless the context otherwise requires.

 

                 2.       Dividends.

 

                 (a)      Rate.  The holders of the shares of Series B Junior

Preferred Stock shall be entitled to receive, when, as and if declared by the

Board of Directors, out of Legally Available Funds cumulative dividends on each

share of Series B Junior Preferred Stock for each Quarterly Dividend Period (as

defined below) at the annual rate of 12% ($12.00) per share, and no more.  Such

dividends shall be payable in equal quarterly payments on April 15, July 15,

October 15, and January 15, in each year (each a "Dividend Payment Date"),

commencing April 15, 1988.  Each period from January 15 through the next April

15, from April 15 through the next July 15, from July 15 through the next

October 15, or from October 15 through the next January 15, as the case may be,

is hereinafter referred to as a "Quarterly Dividend Period," provided that the

first Quarterly Dividend Period shall mean the period commencing the day shares

of Series B Junior Preferred Stock are originally issued and ending on April

15, 1988.  Each of such quarterly dividends (whether payable in cash or stock)

shall be fully cumulative and shall accrue (whether or not declared), without

interest from the first day of the applicable Quarterly Dividend Period.  Each

such dividend shall be paid to the holders of record of shares of Series B

Junior Preferred Stock as they appear on the stock register of the Corporation

on such record date as shall be fixed by the Board of Directors of the

Corporation or a duly authorized committee thereof, which date shall be not

more than 60 days nor less than 10 days preceding the Dividend Payment Date

relating thereto.  At the option of the Corporation, all dividends may be paid,

in lieu of cash, in additional shares of Series B Junior Preferred Stock (based

on the Liquidation Preference thereof).  The Corporation may issue fractional

shares in connection with the declaration and payment of any dividend paid in

additional shares of Series B Junior Preferred Stock.

 

                                     24

<PAGE>   30

 

                 (b)      Computation.  Dividends payable on the Series B

Junior Preferred Stock shall be computed on the basis of a 360-day year of

twelve 30-day months and, if payable for a period that is less than a full

Quarterly Dividend Period, the actual number of days elapsed in the period for

which payable.

 

                 3.       Redemption of Series B Junior Preferred Stock.

 

                 (a)      Mandatory Redemption.  As a mandatory redemption for

the retirement of the shares of Series B Junior Preferred Stock, the

Corporation shall, subject to any applicable contractual restrictions, redeem,

out of Legally Available Funds, on July 15, 2001, if any such shares remain

outstanding, all such shares issued, at the redemption price of 100% of the

Series B Liquidation Preference (as defined in Section F(5)(a) hereof).

Immediately prior to authorizing or making such redemption with respect to the

Series B Junior Preferred Stock, the Corporation, by resolution of its Board of

Directors shall, to the extent of any Legally Available Funds, declare a

dividend on the Series B Junior Preferred Stock payable on the redemption date

in an amount equal to any accrued and unpaid dividends on the Series B Junior

Preferred Stock as of such date and, if the Corporation does not have

sufficient Legally Available Funds to declare and pay all dividends accrued at

the time of such redemption, any remaining accrued and unpaid dividends shall

be added to the redemption price.

 

                 If the Corporation shall fail to discharge its obligation to

redeem all of the outstanding shares of Series B Junior Preferred Stock

required to be redeemed pursuant to this Section F(3)(a) (the "Series B Junior

Mandatory Redemption Obligation"), the Series B Junior Mandatory Redemption

Obligation shall be discharged as soon as the Corporation is able to discharge

such Series B Junior Mandatory Redemption Obligation.

 

                 (b)      Optional Redemption.  Subject to contractual or other

restrictions of the Corporation to the contrary, the Series B Junior Preferred

Stock shall be redeemable, in whole or in part (subject to the next succeeding

paragraph), out of Legally Available Funds, at the option of the Corporation by

resolution of its Board of Directors, at a redemption price per share of $100.

Immediately prior to authorizing or making any such redemption with respect to

the Series B Junior Preferred Stock, the Corporation, by resolution of its

Board of Directors shall, to the extent of any Legally Available Funds, declare

a dividend on the Series B Junior Preferred Stock payable on the redemption

date in an amount equal to any accrued and unpaid dividends on the Series B

Junior Preferred Stock as of such date and if the Corporation does not have

sufficient Legally Available Funds as of the date such redemption is authorized

to declare and pay all dividends accrued at the time of such redemption, any

remaining accrued and unpaid dividends shall be added to the redemption price.

 

                 Unless the full cumulative dividends on all outstanding shares

of Series B Junior Preferred Stock shall have been paid or contemporaneously

are declared and paid for all past dividend periods (or included in the

redemption price), the Corporation may not redeem only part of the outstanding

shares of Series B Junior Preferred Stock pursuant to the first paragraph of

this subsection (b).

 

                                     25

 

 

<PAGE>   31

 

 

                 (c)      Notice of Redemption.  At least 30 days but not more

than 60 days prior to the date fixed for the redemption of shares of the Series

B Junior Preferred Stock pursuant to Section F(3)(a) of F(3)(b) above, a

written notice shall be mailed to each holder of record of shares of Series B

Junior Preferred Stock to be redeemed in a postage prepaid envelope addressed

to such holder at his post office address as shown on the records of the

Corporation, notifying such holder of the election of the Corporation to redeem

such shares, stating the date fixed for redemption thereof (hereinafter

referred to as the redemption date) and calling upon such holder to surrender

to the Corporation on the redemption date at the place designated in such

notice his certificate or certificates representing the number of shares

specified in such notice of redemption, provided, however, that no failure to

give such notice nor any defect therein shall affect the validity of the

proceeding for the redemption of any shares of Series B Junior Preferred Stock

to be redeemed except as to the holder to whom the Corporation has failed to

give said notice or except as to the holder whose notice was defective.  On the

redemption date each holder of shares of Series B Junior Preferred Stock to be

redeemed shall present and surrender his certificate or certificates for such

shares to the Corporation at the place designated in such notice and thereupon

the redemption price of such shares shall be paid to or on the order of the

person whose name appears on such certificate or certificates as the owner

thereof and each surrendered certificate shall be cancelled.  In case less than

all the shares represented by such certificate are redeemed, a new certificate

shall be issued representing the unredeemed shares.  From and after the

redemption date (unless default shall be made by the Corporation in payment of

the redemption price) all dividends on the shares of Series B Junior Preferred

Stock designated for redemption in such notice shall cease to accrue and all

rights of the holders thereof as stockholders of the Corporation, except the

right to receive the redemption price thereof (including all accrued and unpaid

dividends up to the redemption date) upon the surrender of certificates

representing the same, shall cease and terminate and such shares shall not

thereafter be transferred (except with the consent of the Corporation) on the

books of the Corporation and such states shall not be deemed to be outstanding

for any purpose whatsoever.  At its election, the Corporation prior to the

redemption date may deposit the redemption price (including all accrued and

unpaid dividends up to the redemption date) of the shares of Series B Junior

Preferred Stock so called for redemption in trust for the holders thereof with

a bank or trust company having capital, surplus and undivided profits

aggregating not less than $50,000,000 in The Borough of Manhattan, City and

State of New York, in which case such notice to the holders of the Series B

Junior Preferred Stock to be redeemed shall state the date of such deposit,

shall specify the office of such bank or trust company as the place of payment

of the redemption price and shall call upon such holders to surrender the

certificates representing such shares at such price on or after the date fixed

in such redemption notice (which shall not be later than the redemption date)

against payment of the redemption price (including all accrued and unpaid

dividends up to the redemption date).  From and after the making of such

deposit, the shares of Series B Junior Preferred Stock so designated for

redemption shall not be deemed to be outstanding for any purpose whatsoever and

the rights of the holders of such shares shall be limited to the right to

receive the redemption price of such shares (including all accrued and unpaid

dividends up to the redemption date), without interest, upon surrender of the

certificates representing the same to the Corporation at said office of such

bank or trust company.  Any interest accrued on such funds shall be paid to the

Corporation from time to time.  Any moneys so deposited which

 

                                     26

<PAGE>   32

 

shall remain unclaimed by the holders of such Series B Junior Preferred Stock

at the end of two years after the redemption date shall be returned by such

bank or trust company to the Corporation, after which the holders of the Series

B Junior Preferred Stock shall have no further interest in such moneys, except

as unsecured creditors of the Corporation.

 

                 (d)      Reissuances.  Shares of Series B Junior Preferred

Stock which have been issued and acquired in any manner, including shares

purchased or redeemed or exchanged, shall (upon compliance with any applicable

provisions of the laws of the State of Delaware) have the status of authorized

and unissued shares of the class of Preferred Stock undesignated as to series

and may be redesignated and reissued as part of any series of Preferred Stock;

provided, however, that no such issued and reacquired shares of Series B Junior

Preferred Stock shall be reissued or sold as Series B Junior Preferred Stock

unless reissued as a stock dividend on shares of Series B Junior Preferred

Stock.

 

                 4.       Voting Rights.

 

                 (a)      No General Voting Rights.  The holders of the Series

B Junior Preferred Stock shall not, except as required by law or as otherwise

set forth herein, have any right or power to vote on any question or in any

proceeding or to be represented at, or to receive notice of, any meeting of the

Corporation's stockholders.  On any matters on which the holders of the Series

B Junior Preferred Stock shall be entitled to vote, they shall be entitled to

one vote for each share held.

 

                 (b)      Right to Elect Directors.  In case at any time (i)

the equivalent of six or more full quarterly dividends (whether consecutive or

not) on the Series B Junior Preferred Stock shall be in arrears or (ii) the

Corporation shall have failed to discharge a Series B Junior Mandatory

Redemption Obligation of shares of Series B Junior Preferred Stock as set forth

in Section F(3)(a) hereof, then during the period (the "Voting Period")

commencing with such time and ending with the time when (i) all arrears in

dividends on the Series B Junior Preferred Stock shall have been paid and the

full dividend on the Series B Junior Preferred Stock for the then current

Quarterly Dividend Period shall have been paid or declared and set apart for

payment or (ii) the Corporation shall have redeemed all shares of the Series B

Junior Preferred Stock as set forth in Section F(3)(a) hereof, as the case may

be, at any meeting of the stockholders of the Corporation held for the election

of directors during the Voting Period, the holders of a majority of the

outstanding shares of Series B Junior Preferred Stock represented in person or

by proxy at said meeting shall be entitled, as a class, to the exclusion of the

holders of all other classes or series of stock of the Corporation, to elect

one (1) director of the Corporation.  During any Voting Period, the Board of

Directors of the Corporation shall be expanded to include such additional

director to comply with this Section F(4)(b).  The remaining directors shall be

elected by the other series, class or classes of stock entitled to vote

therefor, at each meeting of stockholders held for the purpose of electing

directors.

 

                 (c)      Special Meeting. At any time when the voting rights

set forth in Section F(4)(b) with respect to the election of a director shall

have vested in the holders of Series B Junior Preferred Stock and if such right

shall not already have been initially

 

                                     27

 

<PAGE>   33

 

exercised, a proper officer of the Corporation shall, upon the written request

of any holder of record of Series B Junior Preferred Stock then outstanding,

addressed to the Secretary of the Corporation, call a special meeting of

holders of Series B Junior Preferred Stock.  Such meeting shall be held at the

earliest practicable date upon the notice required for annual meetings of

stockbrokers at the place for holding annual meetings of stockholders of the

Corporation of, if none, at a place designated by the Secretary of the

Corporation.  If such meeting shall not be called by the proper officers of the

Corporation within 30 days after the personal service of such written request

upon the Secretary of the Corporation, or within 30 days after mailing the same

within the United States, by registered mail, addressed to the Secretary of the

Corporation at its principal office (such mailing to be evidenced by the

registry receipt issued by the postal authorities), then the holders of record

of 10% of the shares of Series B Junior Preferred Stock then outstanding may

designate in writing a holder of Series B Junior Preferred Stock to call such

meeting at the expense of the Corporation, and such meeting may be called by

such person so designated upon the notice required for annual meetings of

stockholders and shall be held at the same place as is elsewhere provided in

this Section F(4)(c).  Any holders of Series B Junior Preferred Stock which

would be entitled to vote at such meeting shall have access to the stock ledger

books of the Corporation for the purpose of causing a meeting of the

stockholders to be called pursuant to the provisions of this Section F(4)(c).

Notwithstanding the other provisions of this Section F(4)(c), however, no such

special meeting shall be called which will be held during a period within 90

days immediately preceding the date fixed for the next annual meeting of

stockholders.  In lieu of a meeting of the holders of Series B Junior Preferred

Stock, called as provided above, the holders of Series B Junior Preferred Stock

may act during any Voting Period by written consent pursuant to Section 228 of

the General Corporation Law.

 

                 (d)      Quorum.  At any meeting held for the purpose of

electing a director at which the holders of Series B Junior Preferred Stock

shall have the right to elect directors as provided herein, the presence in

person or by proxy of the holders of at least one-third of the then outstanding

shares of Series B Junior Preferred Stock shall be required and be sufficient

to constitute a quorum of such series for the election of directors by such

series.  At any such meeting or adjournment thereof (i) the absence of a quorum

of the holders of Series B Junior Preferred Stock shall not prevent the

election of directors other than those to be elected by the holders of stock of

such series and the absence of a quorum or quorums of holders of capital stock

entitled to elect such other directors shall not prevent the election of

directors to be elected by the holders of the Series B Junior Preferred Stock

and (ii) in the absence of a quorum of the holders of any class or series of

stock entitled to vote for the election of directors, a majority of the holders

present in person or by proxy of such class or series shall have the power to

adjourn the meeting for the election of directors which the holders of such

class or series are entitled to elect, from time to time without notice (except

as required by law) other than announcement at the meeting, until a quorum

shall be present.

 

                 (e)      Term of Office of Director; Vacancy.  Any director

who shall have been elected by holders of Series B Junior Preferred Stock may

be removed at any time during a Voting Period, either for or without cause, by

and only by the affirmative vote of the holders of record of a majority of the

outstanding shares of Series B Junior Preferred Stock given at a special

meeting of such stockholders called for such purpose (or by written

 

 

                                  28

 

<PAGE>   34

 

consent without a meeting), and any vacancy thereby created may be filled

during such Voting Period by the holders of Series B Junior Preferred Stock

present in person or represented by proxy at such meeting.  Any director

elected by holders of Series B Junior Preferred Stock who dies, resigns or

otherwise ceases to be a director shall be replaced by the affirmative vote of

the holders of record of a majority of the outstanding shares of Series B

Junior Preferred Stock at a special meeting of stockholders called for that

purpose (or by written consent without a meeting).  At the end of the Voting

Period, the holders of Series B Junior Preferred Stock shall be automatically

divested of all voting power vested in them under this subsection (e) but

subject always to the subsequent vesting hereunder of voting power in the

holders of Series B Junior Preferred Stock in the event of (i) any similar

cumulated arrearage in payment of quarterly dividends occurring thereafter or

(ii) the subsequent failure of the Corporation to make the Series B Junior

Mandatory Redemption Obligation.  The term of the director elected pursuant to

the provisions of this subsection (e) shall in all events expire at the end of

the Voting Period and upon such expiration the number of directors constituting

the Board of Directors shall, without further action, be reduced by one (1),

subject always to the increase of the number of directors pursuant to Section

F(4)(b) hereof in case of the future right of the holders of Series B Junior

Preferred Stock to elect directors as provided herein.

 

                 (f)      Action Not Materially Adverse.  (i) The creation,

authorization or issuance of any shares of any equity securities of the

Corporation with which the Series B Junior Preferred Stock ranks prior, or on a

parity, or junior, whether with respect to dividends or upon liquidation,

dissolution, or otherwise (all such securities collectively referred to as

"Additional Securities"), or the creation, authorization or issuance of any

obligation or security convertible into or evidencing the right to purchase any

Additional Securities, (ii) the creation of any indebtedness of any kind of the

Corporation, or (iii) the increase or decrease in the amount of authorized

capital stock of any class, including the Preferred Stock, or any increase,

decrease or change in the par value of any such class other than the Preferred

Stock, shall not require the consent of the holders of Series B Junior

Preferred Stock and shall not be deemed to affect materially and adversely the

rights, preferences, privileges and voting rights of shares of Series B Junior

Preferred Stock.

 

                 5.       Liquidation Preference.

 

                 (a)      Priority of Series B Junior Preferred Stock in Event

of Liquidation or Dissolution.  In the event of any liquidation, dissolution,

or winding up of the affairs of the Corporation, whether voluntary or

otherwise, after payment or provision for payment of the debts and other

liabilities of the Corporation, the holders of the Series B Junior Preferred

Stock shall be entitled to receive, out of the remaining net assets of the

Corporation, the amount of one hundred dollars ($100.00) in cash for each share

of Series B Junior Preferred Stock (the "Series B Liquidation Preference"),

plus an amount equal to all dividends accrued and unpaid on each such share up

to the date fixed for distribution, before any distribution shall be made to

the holders of the Common Stock or any other capital stock ranking (as to any

such distribution) junior to the Series B Junior Preferred Stock.  In the event

of any involuntary or voluntary liquidation, dissolution or winding up of the

affairs of the Corporation, the Corporation by resolution of its Board of

Directors shall (subject to Section

 

                                     29

<PAGE>   35

 

F(7)(b) hereof), to the extent of any Legally Available Funds, declare a

dividend on the Series B Junior Preferred Stock payable before any distribution

is made to any holder of Common Stock or any other stock of the Corporation

ranking junior to the Series B Junior Preferred Stock as to the liquidation,

dissolution or winding up, in an amount equal to any accrued and unpaid

dividends on the Series B Junior Preferred Stock as of such date and if the

Corporation does not have sufficient Legally Available Funds to declare and pay

all dividends accrued at the time of such liquidation, any remaining accrued

and unpaid dividends shall be added to the Series B Liquidation Preference to

be received by the holders of the Series B Junior Preferred Stock for such

Series B Junior Preferred Stock.  Except as otherwise provided in this Section

F(5), holders of Series B Junior Preferred Stock shall not be entitled to any

distribution in the event of liquidation, dissolution or winding up of the

affairs of the Corporation.

 

                 (b)      Merger Not Liquidation.  For the purposes of this

Section F(5), neither the voluntary sale, lease, conveyance, exchange or

transfer (for cash, shares of stock, securities or other consideration) of all

or substantially all the property or assets of the Corporation, nor the

consolidation or merger of the Corporation with one or more other corporations,

shall be deemed to be a liquidation, dissolution or winding up, voluntary or

involuntary, unless such voluntary sale, lease, conveyance, exchange or

transfer shall be in connection with a plan of liquidation, dissolution or

winding up of the Corporation.

 

                 (c)      Fractional Shares.  The Liquidation Preference with

respect to each outstanding fractional share of Series B Junior Preferred Stock

shall be equal to a ratably proportionate amount of the Liquidation Preference

with respect to each outstanding share of Series B Junior Preferred Stock.

 

                 6.       No Conversion or Exchange of Series B Junior

Preferred Stock.  The Series B Junior Preferred Stock shall not be convertible

or exchangeable.

 

                 7.       Limitations.

 

                 (a)      Rank.  With respect to rights to receive dividends,

mandatory redemption payments and distributions upon liquidation, dissolution

or winding up of the Corporation, the Series B Junior Preferred Stock shall

rank prior to all other capital stock of the Corporation outstanding at the

time of issuance of the Series B Junior Preferred Stock except the Senior

Preferred Stock and the Series A Junior Preferred Stock.  The Series B Junior

Preferred Stock shall be subject to the creation of Junior Securities, Parity

Securities (each as defined below), and additional securities to which the

Series B Junior Preferred Stock shall be junior, whether with respect to the

right to receive dividends, mandatory redemption payments and distributions

upon liquidation, dissolution or winding up of the Corporation.

 

                 (b)      Payments on Junior Securities and Parity Securities.

So long as any shares of Series B Junior Preferred Stock are outstanding, the

Corporation shall not declare, pay or set apart for payment any dividend on the

Common Stock or any other capital stock of the Corporation ranking junior to

the Series B Junior Preferred Stock as to dividends or

 

                                     30

<PAGE>   36

 

liquidation rights (collectively, "Junior Securities") or any other capital

stock of the Corporation ranking on a parity with the Series B Junior Preferred

Stock as to dividends or liquidation rights (collectively, "Parity Securities")

or make any payment on account of, or set apart for payment money for a sinking

or other similar fund for, the purchase, redemption (whether optional or

mandatory) or other retirement of, any of the Junior Securities or Parity

Securities or any warrants, rights, calls or options exercisable for or

convertible into any of the Junior Securities or Parity Securities, or make any

distribution in respect thereof, either directly or indirectly, whether in

cash, obligations or shares of the Corporation or the property thereof (other

than (i) dividends, distributions, redemptions, sinking funds or other similar

obligations to be satisfied pro rata (based on aggregate liquidation value)

between Parity Securities and the Series E Junior Preferred Stock, (ii)

distributions or dividends in Junior Securities to the holders of Junior

Securities and (iii) the repurchase of Junior Securities from certain of the

Corporation's or its subsidiaries' officers and key employees, upon the death,

disability, voluntary or involuntary termination of any such persons), and

shall not permit any corporation or other entity directly or indirectly

controlled by the Corporation to purchase or redeem any of the Junior

Securities or Parity Securities or any warrants, rights, calls or options

exercisable for or convertible into any of the Junior Securities or Parity

Securities; provided, however, that with respect to dividends and

distributions, payment may be made or amounts set aside for payment of

dividends on the Junior Securities or Parity Securities if prior to or

concurrently with such payment or setting apart for payment, all accrued and

unpaid dividends on shares of the Series B Junior Preferred Stock not paid on

the dates provided for in Section F(2)(a) hereof shall have been or shall be

paid.

 

                                   ARTICLE V

                              AMENDMENT OF BY-LAWS

 

                 In furtherance and not in limitation of the powers conferred

by statute, the Board of Directors is expressly authorized to make, alter or

repeal the By-Laws of the Corporation.

 

                                   ARTICLE VI

                             ELECTION OF DIRECTORS

 

 Election of directors need not be by written ballot unless the By-Laws of the

Corporation shall so provide.

 

                                  ARTICLE VIII

                      DIRECTOR LIABILITY; INDEMNIFICATION

 

                 A director of the 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 breach 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 General Corporation

Law, as the same exists or hereafter may be amended, or (iv) for any

transaction from which

 

                                     31

<PAGE>   37

 

the director derived an improper personal benefit.  If the General Corporation

Law hereafter is amended to authorize the further elimination or limitation of

the liability of the directors, then the liability of a director shall be

eliminated or limited to the fullest extent permitted by the amended General

Corporation Law.  In addition to the limitation on personal liability of

directors provided herein, the Corporation shall, to the fullest extent

permitted by the General Corporation Law:  (x) indemnify its officers and

directors and (y) advance expenses incurred by such officers or directors in

relation to any action, suit or proceeding.  Any repeal or modification of this

paragraph by the stockholders of the Corporation shall be prospective only, and

shall not adversely affect any limitation on the personal liability or right to

indemnification or advancement of expenses hereunder existing at the time of

such repeal or modification.

 

                 IN WITNESS WHEREOF, HI, INC., has caused its corporate seal to

be hereto affixed and this certificate to be signed by Michael T. Tokarz, its

President, and attested by Clifton S. Robbins, its Secretary, this 21st day of

January, 1988.

 

 

 

                                                  ______________________________

                                                    MICHAEL T. TOKARZ, President

 

[Seal]

 

ATTEST:

 

___________________________

Clifton S. Robbins

 

                                     32

</TEXT>

</DOCUMENT>

<DOCUMENT>

<TYPE>EX-10.9(A)

<SEQUENCE>3

<DESCRIPTION>MANAGEMENT COMPENSATION PLAN

<TEXT>

 

<PAGE>   1

                                                                EXHIBIT 10.9(a)

 

                                IDEX CORPORATION

                              NORTHBROOK, ILLINOIS

 

                  IDEX MANAGEMENT INCENTIVE COMPENSATION PLAN

                               FOR KEY EMPLOYEES

                           EFFECTIVE JANUARY 1, 1996

 

 

 

 1.      The purpose of this Plan is to provide incentive and reward to "key

      employees" who contribute to the profits of the enterprise by their

      invention, ability, industry, loyalty or exceptional service, through

      making them participants in that success.  As herein used, the word "key

      employees" shall be understood to include corporate officers, key

      Executive Office managerial employees, presidents, and other executives

      employed in the divisions and subsidiaries (operating units), generally

      those reporting to an operating unit president or other key managerial or

      professional employees, engaged in capacities of special responsibility

      and trust in the development, conduct, or management of the operating

      unit who may from time to time in the manner herein set forth be deemed

      and determined by the Board of Directors of the Corporation to be "key

      employees" for a particular year.

 

 2.      Full power and authority to construe, interpret and administer this

      Plan shall be vested in the Board of Directors of the Corporation.

      However, the day-to-day administration of the Plan shall be the

      responsibility of the senior management of the Corporation, and the Board

      of Directors shall rely on the senior management for recommendations for

      awards and interpretation when necessary.  Decisions of the Board shall

      be final, conclusive, and binding upon all parties, including the

      Corporation, the stockholders, and the employees.

 

 3.      An employee shall be eligible for consideration for extra

      compensation if he/she is an employee of the Corporation or a subsidiary,

      and, except for leaves of absence, has continuously been such

      an employee for more than one year, and remains an employee as of the

      last day of the fiscal year.

 

<PAGE>   2

 

      No employee whose compensation under a contract of employment or

      otherwise is  determined in whole or in part on a commission basis, and

      no person who is compensated on the basis of a fee or retainer, as

      distinguished from salary, shall be eligible for extra compensation for  

      the period during which his/her compensation is so determined.

 

 4.      Subject to the provisions of this Plan, the Board of Directors shall

      have full discretion in making extra compensation awards, but it shall

      make no award without first considering the recommendations of the

      Compensation Committee.

 

 5.      Extra compensation awards with respect to any one fiscal year (the

      "award year") shall be made as soon as feasible after the close of such

      fiscal year.  At the time of adoption of this Plan, the Corporation's

      fiscal year is the calendar year.  So far as possible, such awards shall

      be made and the beneficiaries shall be notified thereof prior to February

      28 of the year following the award year.  In the event of a change in the

      Corporation's fiscal year, this Plan shall apply, with pro-rata

      adjustments, to any intermediate period not consisting of twelve months

      and shall then apply to each fiscal year following.

 

 6.      Extra compensation awards for any year shall be payable in cash and the

      amount of cash payable at the time of the award shall be paid forthwith

      to each beneficiary.

 

 7.      The amount awarded to a "key employee" under the Plan shall be

      determined in accordance with the following Plan description:

 

   a. PERFORMANCE MEASUREMENT

 

         Performance will be measured using 1) five factors which will measure

      the quantifiable dimensions of business management performance and are

      relevant to the IDEX environment, and 2) performance against qualitative

      goals, which are in the long-run interests of the Corporation.

 

 

                                                                            2.

<PAGE>   3

       The five quantitative factors will measure:

       1)   performance against the original forecast for

            profit dollars before tax, interest on net assets, and     

            Executive Office charges;

 

 

       2)   actual results versus the original forecast for return on average

            net assets employed;

 

 

       3)   actual return on average net assets employed versus a target

            return set by senior management of the Corporation;

 

 

       4)   actual average working capital per sales dollar versus the

            original forecast for average working capital per sales dollar; and

 

 

       5)   actual average working capital per sales dollar versus a target

            return set by senior management of the Corporation.  EXHIBIT I

            illustrates the makeup of the annual bonus by type of performance

            measurement criteria.

 

         The originally forecasted profit, return on net assets employed, and

      average working capital per sales dollar will be as called for in the

      annual business plan, as accepted by senior management of IDEX

      Corporation, and the target return on assets employed and working capital

      per sales dollar will be established by senior management of IDEX

      Corporation.  The working capital per sales dollar shall be computed on

      the basis of the 13-month average amount of working capital per dollar of

      sales for the fiscal year.  Operating unit management will be notified of

      the target return and target working capital per sales dollar by March 31

      each year.

 

         Qualitative performance will normally be measured through a

      retrospective look at the achievements of the operating unit and specific

      accomplishments of the bonus plan participant.  The qualitative portion

      of the bonus may also be used to adjust bonuses under special

      circumstances, such as windfalls or special achievement under adverse

      circumstances.

 

 

 

                                                                           3.

<PAGE>   4

 

     b. LEVELS OF PERFORMANCE AND PAYOUT LEVELS

        1) Quantitative Portion of Plan

              EXHIBIT II shows an illustrative relationship between the

           percentage of target incentive compensation to be paid under the

           quantitative portion of the Plan and the performance attainment

           level under the factors shown in EXHIBIT I (Bonus Percent at the

           Performance Level).  The payout percentage will be based on a

           percentage of goals achieved.  At the 100% performance level, the

           target level of quantitative bonus will be paid.  At the 60%

           performance level, 20% of the target quantitative bonus will be     

           paid, and no bonus will be payable under the quantitative portion of

           the Plan below the 60% threshold.  At 150% of the performance level,

           the maximum bonus of 200% of the targeted amount will be payable

           under the quantitative portion of the Plan.

 

              The weighting of awards under the quantitative portion of the

           Plan (Weighting Factor) will be 1/5 on attaining profit dollars

           against original forecast, 1/5 on attaining return on net assets

           employed against original forecast, 1/5 on attaining return on net

           assets employed against the target established by senior management,

           1/5 on attaining working capital per sales dollar against the

           original forecast, and 1/5 on attaining average working capital per

           sales dollar against the corporate target.

 

              Quantitative performance under the Plan shall be given a 50%

           weighting, while qualitative performance as described in Section 2)

           below will receive a 50% weighting.

 

              The Target Incentive Amount times the Weighting Factor times

           the Bonus Percent at the Performance Level shown on EXHIBIT II

           equals the amount of bonus earned for each performance      

           measurement factor.  The sum of these amounts for each of the five

           quantitative factors equals the total bonus to be paid under the

           quantitative portion of the Plan.

 

                                                                           4.

<PAGE>   5

     2) Qualitative Portion of the Plan

           Determination of the bonus payable under the qualitative portion    

        of the Plan will be made by totaling the individual scores for each

        qualitative factor considered (see Section 7.e.), and dividing the

        total by the number of qualitative factors.  This gives an average

        qualitative score.  The average qualitative score will then be

        converted to a bonus as a percent of target using the following table:

 

 

                                           Qualitative Bonus

                  If Overall Average        as a Percentage

                  Qualitative Score Is    of Target Will Be

                  --------------------  ----------------------

 

                          0                         0%

                          1                         0%

                          2                        40%

                          3                        60%

                          4                        80%

                          5                       100%

                          6                       120%

                          7                       140%

                          8                       160%

                          9                       180%

                         10                       200%

 

 

           The bonus percentage determined above will be multiplied by the    

        weighting factor for the qualitative portion of the Plan.

 

     c. TOTAL BONUS

           The total bonus is the sum of the quantitative bonus, weighted by

        the 50% factor, and the qualitative bonus, weighted by the 50% factor.

        For example, quantitative performance at 110% of target generates a

        payout at the 120% of target level, one half of which is 60%.  A

        qualitative ranking of 7 results in a bonus as a percent of target of

        140%, one half of which is 70%.  The total bonus as a percent of target

        in this case would be 60% plus 70%, or a total of 130%.

 

 

                                                                           5.

<PAGE>   6

 

 

           Target Incentive Amounts and Maximum Incentive Amounts, as

        percentages of the salaries of the participants as of the beginning of

        the fiscal year, are shown in EXHIBIT III.

 

     d. QUANTITATIVE CRITERIA

        1) Profit Dollars Versus Original Forecast

              For measuring divisional results, the Profit Dollars goal shall

           mean the profit before tax and before parent charges and/or charges

           for interest on net assets employed, as contained in the operating

           unit's annual business plan prepared in accordance with Corporation

           policy and   accepted by senior management of IDEX Corporation.

           This plan is often referred to as the "Original Forecast".  The

           actual Profit Dollars for the year shall be the profit before tax

           and before parent charges and/or interest on net assets as reported

           in the operating unit's financial statements for the appropriate

           full fiscal year, with appropriate adjustments resulting from

           Executive Office review and year-end audit.

 

        2) Return on Net Assets Employed Versus Original Forecast

              Return on net assets employed shall be calculated as follows:

                   Profit Dollars (as defined in d.1) above)

                   divided by Net Assets Employed (as defined below).

 

              Net Assets Employed shall mean the average total assets less  

           the total current liabilities, excluding reserves for federal income

           taxes and intercompany balances with the Executive Office, as

           reported on the appropriate balance sheets.  The average shall be

           calculated by adding the net assets employed as of the beginning of

           the fiscal year with the net assets employed as of the end of each

           of the twelve months during the fiscal year and dividing the total

           by thirteen.

 

 

 

                                                                           6.

<PAGE>   7

           For measuring operating unit results, the return on assets employed

        goal shall be as determined from financial schedules contained in

        the operating unit's annual business plan ("Original Forecast") and the

        actual return shall be calculated from actual monthly financial

        statements of the operating unit, including appropriate adjustments

        resulting from Executive Office review and year-end audit.

 

     3) Return on Net Assets Employed Versus Target Established

        by Corporation

       

           Actual Return on Net Assets Employed for this purpose will be

        identical to that calculated in ITEM 2 immediately above.  The target

        with which actual results will be compared will be established by

        senior  management of the Corporation on an operating unit-by-operating

        unit basis, and operating unit presidents will be notified of the

        amount of the target by March 31 of each year.  In establishing the

        target, senior management will consider a number of factors for each

        operating unit, including, but not limited to, market position, amount

        of assets required given the type of business, actual historical

        performance, anticipated performance, and other factors.  The target

        return will not represent what senior management considers to be

        optimal or even acceptable  performance in many instances.  Rather, it

        represents the rate of return that senior management believes the

        operating unit should be capable of achieving given its operating

        environment, and the needs of the Corporation.

 

     4) Average Working Capital Per Sales Dollar Versus Original

        Forecast

           Actual Working Capital shall be computed by determining the amount of

        current assets less current liabilities, excluding income tax reserves

        and intercompany balances with the Executive Office, as shown on the

        appropriate balance sheets.  The Average Working Capital shall

        be computed by adding the Working Capital as of the beginning of the

        fiscal year with the Working Capital as of the end of each of the

        twelve months during the fiscal year and dividing the total by

        thirteen.

 

 

                                                                           7.

<PAGE>   8

     5) Average Working Capital Per Sales Dollar Versus Corporate

        Target

           Average Working Capital per sales dollar versus the Corporate target

        shall be computed as in ITEM 4 above, except that actual working

        capital per sales dollar shall be compared with a target amount of

        working capital per sales dollar as established by senior corporate

        management.  Operating unit presidents will be notified of the target

        by March 31 each year.

 

  e. TYPICAL QUALITATIVE CONSIDERATIONS

    

        Among factors which will be considered in determining qualitative

     performance under the Plan are the following:

     -  The ability to set realistic goals and accomplish those goals

     -  Timely and appropriate reaction to factors which could not reasonably

        be foreseen at the beginning of the year

     -  Improvement of employee productivity and human resources development

     -  Achievement of milestones against long-term product development goals

     -  Maintenance or improvement of market share

     -  Evaluation and development of a business strategy for future growth

     -  Product excellence

     -  Customer perception of the business

     -  Development of manufacturing processes

     -  Business systems development

     -  "Fleetfootedness"

 

             Each of the applicable qualitative factors are rated based on the

        scale on the reverse side of the Performance Measurement Worksheet

        in Exhibit IV.  All ratings must be in even numbers in order to

        facilitate definitive decisions and gradations of relative performance

        levels for each factor.

 

 

                                                                         8.

 

<PAGE>   9

           In early October of each performance year, each MICP participant

        shall individually rate their division on each qualitative factor.  The

        President of each operating unit shall then convene a meeting of the

        MICP participants to discuss the individual ratings and determine a

        consensus operating unit rating for each factor and the total average

        qualitative rating.  These ratings shall be forwarded to the President,

        IDEX and Senior Vice President - Operations by October 15 of the

        performance year.

 

           The respective Vice President - Group Executive, and Senior

        Corporate Officers designated by the President of IDEX, will also

        independently rate the qualitative criteria for each division without

        having reviewed the ratings from the operating units, and then will

        meet to review their ratings and the division consensus ratings in

        order to determine the final rating for each factor and a final total

        average qualitative rating for each division.

 

     f. SPECIAL ADJUSTMENTS

           In special circumstances, awards to specific individuals may be

        adjusted positively or negatively to reflect individual performance,

        which substantially affected the operating unit's results.  However,

        these adjustments will be made very infrequently and on the basis of

        very unusual performance.

 

 8.        If a beneficiary dies, his/her unpaid and undelivered extra

        compensation awards, if any, shall be paid out and delivered in

        accordance with the terms specified in such awards to his/her legal

        representatives or to the persons entitled thereto as determined by a

        court of competent jurisdiction.  Such unpaid and  undelivered extra

        compensation awards, if any, may be paid out and delivered as may be

        determined by the Committee in its discretion subject to the approval

        of the Board of Directors.

 

 

 

                                                                          9.

 

<PAGE>   10

 9.     This Plan was effective as of January 22, 1988, and was amended as

     of January 1, 1996.  While, as in the past, it is contemplated that       

     extra compensation will be awarded annually, the Board of Directors shall

     have the right from time to time to modify or suspend this Plan.

 

10.     Present and future members of the Board of Directors of the Corporation,

     as such and as members of the Compensation Committee, shall be entitled to

     the protection given them under the indemnification provisions of the

     By-Laws of the Corporation.

 

11.     Forms used to calculate performance under the Plan are attached as

     EXHIBIT IV - Performance Measurement Worksheets, and EXHIBIT V -

     Individual Incentive Award Worksheet.

 

12.     Computations described herein apply to participants employed in the

     individual operating units of the Company.  Executive Office participants

     shall generally have their extra compensation computed on the basis of

     weighted average performance of the operating subsidiaries, and shall also

     be eligible for the special individual adjustments described in 7.f.

     above.

 

 

 

                                                                           10.

<PAGE>   11

                                                                       EXHIBIT I

 

                                IDEX CORPORATION

 

                     MANAGEMENT INCENTIVE COMPENSATION PLAN

                        PERFORMANCE MEASUREMENT CRITERIA

 

 

 

 

            FACTOR                            % OF TOTAL CONSIDERATION

- -----------------------------------------------------------------------------

  Actual Profit Dollars vs.

      Original Forecast                            

 

             10%                                        

- -------------------------------------

 Actual Return on Net Assets

 Employed vs. Original Target

 

             10%

- -------------------------------------

 Actual Return on Net Assets                        QUANTITATIVE

Employed vs. Corporate Target

 

             10%                                        50%

- -------------------------------------

   Actual Average Working

 Capital Per Sales Dollar vs.

      Original Forecast

 

             10%

- -------------------------------------

Actual Average Working Capital

     Per Sales Dollar vs.

       Corporate Target

 

             10%

- -----------------------------------------------------------------------------

 Individual and Business Unit

 Performance Measurement Factors

 Including Long-term Objectives

   (e.g. Product development

   benchmarks, market share

   growth, business strategy                        QUALITATIVE

  planning, specific regulatory                                

      compliance systems                                50%    

  development, human resources

  development, and the ability

  to both set and accomplish

      realistic goals)                                 

                                                       

             50%                                       

 

 

<PAGE>   12

                                                                    EXHIBIT II

 

 

                               IDEX CORPORATION

                                     

                      ILLUSTRATION OF EXTRA COMPENSATION

                     IN RELATION TO LEVEL OF PERFORMANCE

            UNDER QUANTITATIVE PORTION OF EXTRA COMPENSATION PLAN

 

 

 

                 CHART OF BONUS PERCENTAGES EARNED FOR VARIOUS

                             LEVELS OF PERFORMANCE

 

 

 

ACTUAL PERFORMANCE % TARGET                    BONUS PERCENT OF TARGET BONUS

 

          0  to 59.9%                                           0%

         60  to 64.9%                                          20%

         65  to 69.9%                                          30%

         70  to 74.9%                                          40%

         75  to 79.9%                                          50%

         80  to 84.9%                                          60%

         85  to 89.9%                                          70%

         90  to 94.9%                                          80%

         95  to 99.9%                                          90%

        100 to 104.9%                                         100%

        105 to 109.9%                                         110%

        110 to 114.9%                                         120%

        115 to 119.9%                                         130%

        120 to 124.9%                                         140%

        125 to 129.9%                                         150%

        130 to 134.9%                                         160%

        135 to 139.9%                                         170%

        140 to 144.9%                                         180%

        145 to 149.9%                                         190%

        150 and above                                         200%

 

 

<PAGE>   13

                                                                     EXHIBIT III

 

                                IDEX CORPORATION

 

                        BONUS TARGETS AND BONUS MAXIMUMS

                       AS RELATED TO SALARY GRADE LEVELS

 

                                OPERATING UNITS

 

 

 

SALARY LEVEL                 TARGET BONUS                  MAXIMUM BONUS

 

     24                          57%                            114%

 

     23                          54%                            108%

 

     22                          50%                            100%

 

     21                          45%                             90%

 

     20                          38%                             76%

 

     19                          34%                             68%

 

     18                          28%                             56%

 

     17                          24%                             48%

 

     16                          20%                             40%

 

     15                          17%                             34%

 

     14                          15%                             30%

<PAGE>   14

                                                                       EXHIBIT V

 

                                IDEX CORPORATION

 

                     MANAGEMENT INCENTIVE COMPENSATION PLAN

                      INDIVIDUAL INCENTIVE AWARD WORKSHEET

 

 

NAME:       _____________________    PRIOR AWARDS:     19____     $________

 

 

TITLE:      _____________________                      19____     $________

 

                                    

LOCATION:   _____________________                      19____     $________

 

 

PAY GRADE:  _____________________

 

 

INDIVIDUAL BONUS CALCULATION:

 

     (a)   Base pay                                             $________

 

     (b)   Target bonus % of pay for salary grade               $________

 

     (c)   Target bonus dollars (a x b)                         $________

 

     (d)   Total bonus % target per divisional

           performance measurement worksheet                    $________

 

     (e)   Actual individual bonus award (c x d)                $________

 

 

NOTE:   Special Adjustment Awards may be applied only in very unusual and

        infrequent circumstances, reflecting positive or negative performance

        by the individual which substantially affected the division's results.

 

        Describe, if applicable:

 

 

<PAGE>   15

                                                                  EXHIBIT IV

 

 

                   MANAGEMENT INCENTIVE COMPENSATION PLAN

                      PERFORMANCE MEASUREMENT WORKSHEET

 

 

                                                            INITIAL     DATE

                                                          -----------  ------

                       

OPERATING UNIT                           PREPARED BY:

                  ------------------                      -----------  ------

 

FISCAL YEAR ENDING                       REVIEWED BY: (1)

                  ------------------                      -----------  ------

 

                                         REVIEWED BY: (2)

                                                          -----------  ------

 

                                                                      Bonus %

PART I - QUANTITATIVE CRITERIA                                        Target   

                                                                      -------  

A. PROFIT DOLLARS % ORIGINAL FORECAST

 

   1.  Actual Profit Dollars             $

                                          --------------

   2.  Original Forecast Profit Dollars  $

                                          --------------                      

   3.  Actual % Original Forecast                       %

                                          -------------- 

   4.  Bonus % Target (1)                               % x 10% =             %

                                          --------------                -----

 

  

B. RETURN ON NET ASSETS % ORIGINAL FORECAST              

   ----------------------------------------

                             Actual   Forecast            

                             ------   --------            

   1.  Average Net Assets  $          $                               

                             ------     --------                       

   2.  Profit Dollars      $          $ 

                             ------     --------                      

   3.  Profit % Net Assets          %            %

                             ------     --------                    

   4.  Actual % Forecast                         %

                                        --------

   5.  Bonus % Target (1)                        %        x 10% =             %

                                        --------                        -----

 

C. RETURN ON NET ASSETS % CORPORATE TARGET

   ---------------------------------------

   1.  Actual Return on Net                           

          Assets (from B.3. above)               %    

                                        --------      

   2.  Corporate Established                         

          Target Return on Net Assets            %   

                                        --------     

   3.  Actual % Target                           %

                                        --------     

   4.  Bonus % Target (1)                        %        x 10% =             %

                                        --------                        -----

 

D. WORKING CAPITAL PER SALES DOLLAR % FORECAST

   -------------------------------------------

   1.  Actual Average Working Capital

          Per Sales Dollar %                     %

                                        --------

   2.  Original Forecast Average

          Working Capital Per Sales   

          Dollar                                 %                    

                                        --------

   3.  Actual % Target                           %

                                        --------

   4.  Bonus % Target (1)                        %        x 10% =             %

                                        --------                        -----

 

E. WORKING CAPITAL PER SALES DOLLAR % CORPORATE TARGET

   ---------------------------------------------------

   1.  Actual Average Working Capital

          Per Sales Dollar                       %

                                        --------

   2.  Corporate Target Amount                   %

                                        --------

   3.  Actual % Corporate Target                 %

                                        --------

   4.  Bonus % Target (1)                        %        x 10% =             %

                                        --------                        -----

 

   TOTAL QUANTITATIVE BONUS                                                   %

                                                                        =====

 

 

 

 

 

 

 

 

 

 

PART II - QUALITATIVE CRITERIA               Operating     Group            

- ------------------------------                  Unit        Exec.       Final

                                              ---------     -----       -----

 

A. Ability to set and achieve           

   realistic goals                            ---------     -----       -----  

                                                

B. Timely and appropriate reaction    

   to factors not reasonably foreseen      

   at the beginning of the year               ---------     -----       -----

 

C. Improvement of employee productivity 

   and human resources development            ---------     -----       -----

                                                

D. Achievement of milestones against  

   long-term product development goals        ---------     -----       -----

                                                 

E. Maintenance or improvement of      

   market share                               ---------     -----       -----

                                                

F. Evaluation and development of a    

   business strategy for corporate    

   growth                                     ---------     -----       -----

                                                

G. Product excellence                         ---------     -----       -----

 

H. Customer perception of the business        ---------     -----       -----

                                                

I. Development of manufacturing       

   processes                                  ---------     -----       -----

                                                 

J. Business systems development               ---------     -----       -----

                                                

K. Fleet-footedness                           ---------     -----       -----

                                                

L. Other important business

   considerations (list):                             

 

   -------------------------------------      ---------     -----       -----

 

   -------------------------------------      ---------     -----       -----

 

   -------------------------------------      ---------     -----       -----

                                   TOTAL    

                                              ---------     -----       -----

 

   AVERAGE QUALITATIVE RANKING               

                                              ---------     -----       -----

   QUALITATIVE BONUS & TARGET (1)                      %         %           %

                                              ---------     -----       -----

   QUALITATIVE BONUS & TOTAL BONUS            x      .5    x   .5      x   .5

                                              =========     =====       =====

   TOTAL QUALITATIVE BONUS                             %         %           %

                                              =========     =====       =====

 

PART III - TOTAL BONUS PERCENT OF TARGET BONUS NOTES:

 

   (A) TOTAL QUANTITATIVE BONUS                %

                                     ---------

   (B) TOTAL QUALITATIVE BONUS                 %

                                     ---------

   TOTAL BONUS % TARGET [(A)+(B)]              %

                                     ---------

 

NOTES:

 

(1) Use chart on reverse side to convert to bonus % target.       1/1/96

 

 

 

<PAGE>   16

 

 

 

                                IDEX CORPORATION

 

                     MANAGEMENT INCENTIVE COMPENSATION PLAN

 

                 CHART OF BONUS PERCENTAGES EARNED FOR VARIOUS

                             LEVELS OF PERFORMANCE

 

 

 

ACTUAL PERFORMANCE % TARGET                    BONUS PERCENT OF TARGET BONUS

 

          0  to 59.9%                                           0%

         60  to 64.9%                                          20%

         65  to 69.9%                                          30%

         70  to 74.9%                                          40%

         75  to 79.9%                                          50%

         80  to 84.9%                                          60%

         85  to 89.9%                                          70%

         90  to 94.9%                                          80%

         95  to 99.9%                                          90%

        100 to 104.9%                                         100%

        105 to 109.9%                                         110%

        110 to 114.9%                                         120%

        115 to 119.9%                                         130%

        120 to 124.9%                                         140%

        125 to 129.9%                                         150%

        130 to 134.9%                                         160%

        135 to 139.9%                                         170%

        140 to 144.9%                                         180%

        145 to 149.9%                                         190%

        150 and above                                         200%

 

                         ______________________________

 

                    INDIVIDUAL QUALITATIVE CRITERIA RATINGS

 

 SCALE                             RATING

 -----  -----------------------------------------------------------------

 

   0    Unacceptable level of performance

   2    Intermediate level of performance - Low

   4    Meets standard level of performance - Low Side

   6    Meets standard level of performance - High Side

   8    Intermediate level of performance - High

  10    Difficult to see how the performance level could have been better

 

 

                     QUALITATIVE BONUS % TARGET CONVERSION

 

          Overall Average                         Quantitative

         Qualitative Rating                      Bonus % Target

         ------------------                      --------------

 

                  0                                     0

                  1                                     0

                  2                                    40

                  3                                    60

                  4                                    80

                  5                                   100

                  6                                   120

                  7                                   140

                  8                                   160

                  9                                   180

                 10                                   200

</TEXT>

</DOCUMENT>

<DOCUMENT>

<TYPE>EX-10.18

<SEQUENCE>4

<DESCRIPTION>1996 STOCK PLAN FOR OFFICERS OF IDEX

<TEXT>

 

<PAGE>   1

                                                                   EXHIBIT 10.18

 

 

                                1996 STOCK PLAN

                        FOR OFFICERS OF IDEX CORPORATION

 

      IDEX CORPORATION, a corporation organized under the laws of the State of

Delaware, hereby adopts this 1996 Stock Plan for Officers of IDEX Corporation.

The purposes of this Plan are as follows:

 

      (1) To further the growth, development and financial success of the

Company by providing additional incentives to certain of its Officers who have

been or will be given responsibility for the management or administration of the

Company's business affairs, by assisting them to become owners of the Company's

Common Stock and thus to benefit directly from its growth, development and

financial success.

 

      (2) To enable the Company to obtain and retain the services of the type of

professional, technical and managerial employees considered essential to the

long-range success of the Company by providing and offering them an opportunity

to become owners of the Company's Common Stock under options and/or deferred

compensation awards (pursuant to this Plan and any Deferred Compensation Plans

that permit deferrals into accounts payable in Common Stock).

 

                                   ARTICLE I

 

                                  DEFINITIONS

 

      Whenever the following terms are used in this Plan, they shall have the

meaning specified below unless the context clearly indicates to the contrary.

The singular shall include the plural, where the context so indicates.

 

SECTION 1.1 -- BOARD

 

      "Board" shall mean the Board of Directors of the Company.

 

SECTION 1.2 -- CODE

 

      "Code" shall mean the Internal Revenue Code of 1986, as amended.

 

SECTION 1.3 -- COMMITTEE

 

      "Committee" shall mean the Compensation Committee of the Board, appointed

as provided in Section 7.1.

 

SECTION 1.4 -- COMMON STOCK

 

      "Common Stock" shall mean the common stock, par value $.01 per share, of

the Company.

 

SECTION 1.5 -- COMPANY

 

      "Company" shall mean IDEX Corporation.

 

                                       1

<PAGE>   2

 

SECTION 1.6 -- DEFERRAL DATE

 

      "Deferral Date" shall mean, in connection with any Deferred Compensation

Unit, the date on which any deferred compensation with respect thereto would

have been paid if no deferral election had been made.

 

SECTION 1.7 -- DEFERRED COMPENSATION PLANS

 

      "Deferred Compensation Plans" shall mean any deferred compensation plan

adopted by the Company or any Parent Corporation or any Subsidiary that permits

deferrals into accounts payable in Common Stock upon distribution thereof and in

which any Officer is eligible to participate.

 

SECTION 1.8 -- DEFERRED COMPENSATION UNITS

 

      "Deferred Compensation Units" shall mean the right of a Grantee to receive

distributions of deferred compensation pursuant to any Deferred Compensation

Plan in the form of Common Stock, determined in accordance with the terms of

such Deferred Compensation Plan and Article VI of this Plan and based on the

Fair Market Value on the Deferral Date.

 

SECTION 1.9 -- DIRECTOR

 

      "Director" shall mean a member of the Board.

 

SECTION 1.10 -- DIVIDEND EQUIVALENTS

 

      "Dividend Equivalents" shall mean Deferred Compensation Units equal to

(i)(a) the cash dividend paid on one share of Common Stock, multiplied by (b)

the number of Deferred Compensation Units credited to the account of any Grantee

as of each applicable dividend record date, divided by (ii) the Fair Market

Value on the related dividend payment date.

 

SECTION 1.11 -- EMPLOYEE

 

      "Employee" shall mean any employee (as defined in accordance with the

regulations and revenue rulings then applicable under Section 3401(c) of the

Code) of the Company, or of any corporation which is then a Parent Corporation

or a Subsidiary, whether such employee is so employed at the time this Plan is

adopted or becomes so employed subsequent to the adoption of this Plan.

 

SECTION 1.12 -- EXCHANGE ACT

 

      "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.

 

SECTION 1.13 -- FAIR MARKET VALUE

 

      "Fair Market Value" shall mean the fair market value of a share of the

Common Stock as of a given date measured as (i) the closing price of a share of

the Common Stock on the principal exchange on which shares of the Common Stock

are then trading, if any, on the day previous to such date, or, if shares were

not traded on the day previous to such date, then on the next preceding trading

day during which a sale occurred; or (ii) if such Common Stock is not traded on

an exchange but is quoted on NASDAQ or a successor quotation system, (1) the

last sales price (if the Common Stock is then listed as a National Market Issue

under the NASD National Market System) or (2) the mean between the closing

representative bid and asked prices (in all other

 

                                       2

<PAGE>   3

 

cases) for the Common Stock on the day previous to such date as reported by

NASDAQ or such successor quotation system; or (iii) if such Common Stock is not

publicly traded on an exchange and not quoted on NASDAQ or a successor quotation

system, the mean between the closing bid and asked prices for the Common Stock,

on the day previous to such date, as determined in good faith by the Committee;

or (iv) if the Common Stock is not publicly traded, the fair market value

established by the Committee acting in good faith.

 

SECTION 1.14 -- GRANTEE

 

      "Grantee" shall mean an Officer to whom Deferred Compensation Units are

awarded pursuant to this Plan.

 

SECTION 1.15 -- INCENTIVE STOCK OPTION

 

      "Incentive Stock Option" shall mean an Option which conforms to the

applicable provisions of Section 422 of the Code and which is designated as an

Incentive Stock Option by the Committee.

 

SECTION 1.16 -- NON-QUALIFIED OPTION

 

      "Non-Qualified Option" shall mean an Option which is not designated as an

Incentive Stock Option by the Committee.

 

SECTION 1.17 -- OFFICER

 

      "Officer" shall mean an officer of the Company, as defined in Rule

16a-l(f) under the Exchange Act, as such Rule may be amended in the future.

 

SECTION 1.18 -- OPTION

 

      "Option" shall mean a stock option granted under Article III of this Plan.

An Option granted under this Plan shall, as determined by the Committee, be

either a Non-Qualified Option or an Incentive Stock Option.

 

SECTION 1.19 -- OPTIONEE

 

      "Optionee" shall mean an Employee to whom an Option is granted under the

Plan.

 

SECTION 1.20 -- PARENT CORPORATION

 

      "Parent Corporation" shall mean any corporation in an unbroken chain of

corporations ending with the Company if each of the corporations other than the

Company then owns stock possessing 50% or more of the total combined voting

power of all classes of stock in one of the other corporations in such chain.

 

SECTION 1.21 -- PLAN

 

      "Plan" shall mean this 1996 Stock Plan for Officers of IDEX Corporation.

 

SECTION 1.22 -- RULE 16B-3

 

      "Rule 16b-3" shall mean that certain Rule 16b-3 under the Exchange Act, as

such Rule may be amended in the future.

 

                                       3

<PAGE>   4

 

SECTION 1.23 -- SECRETARY

 

      "Secretary" shall mean the Secretary of the Company.

 

SECTION 1.24 -- SECURITIES ACT

 

      "Securities Act" shall mean the Securities Act of 1933, as amended.

 

SECTION 1.25 -- SUBSIDIARY

 

      "Subsidiary" shall mean any corporation in an unbroken chain of

corporations beginning with the Company if each of the corporations other than

the last corporation in the unbroken chain then owns stock possessing 50% or

more of the total combined voting power of all classes of stock in one of the

other corporations in such chain.

 

SECTION 1.26 -- TERMINATION OF EMPLOYMENT

 

      "Termination of Employment" shall mean (unless otherwise specified in any

applicable Deferred Compensation Plan) the time (which in the absence of any

other determination by the Committee, shall be deemed to be the last day

actually worked by the Optionee or Grantee) when the employee-employer

relationship between the Optionee or Grantee and the Company, a Parent

Corporation or a Subsidiary is terminated for any reason, with or without cause,

including, but not by way of limitation, a termination by resignation,

discharge, death or retirement, but excluding terminations where there is a

simultaneous reemployment by the Company, a Parent Corporation or a Subsidiary.

The Committee, in its absolute discretion, shall determine the effect of all

other matters and questions relating to Termination of Employment, including,

but not by way of limitation, the question of whether a Termination of

Employment resulted from a discharge for good cause, and all questions of

whether particular leaves of absence constitute Terminations of Employment;

provided, however, that, with respect to Incentive Stock Options, a leave of

absence shall constitute a Termination of Employment if, and to the extent that,

such leave of absence interrupts employment for the purposes of Section

422(a)(2) of the Code and the then applicable regulations and revenue rulings

under said Section.

 

                                   ARTICLE II

 

                               GENERAL CONDITIONS

 

SECTION 2.1 -- SHARES SUBJECT TO PLAN

 

      The shares of stock subject to Options and awards of Deferred Compensation

Units shall be shares of the Common Stock. The aggregate number of such shares

which may be issued upon exercise of Options and distributed pursuant to

Deferred Compensation Units under the Plan shall not exceed 1,000,000 shares (of

which no more than 400,000 shares may be issued pursuant to Deferred

Compensation Units). Furthermore, the maximum number of shares of Common Stock

which may be subject to Options granted or Deferred Compensation Units issued

under the Plan to any individual in any calendar year shall not exceed 200,000,

and the method of counting such shares shall conform to any requirements

applicable to performance-based compensation under Section 162(m) of the Code.

The shares of Common Stock issuable upon exercise of such Options or upon

distributions with respect to any such Deferred Compensation Units may be either

previously authorized and unissued shares or treasury shares.

 

 

                                       4

<PAGE>   5

 

SECTION 2.2 -- UNEXERCISED OPTIONS AND UNDISTRIBUTED SHARES

 

      If any Option expires or is cancelled without having been fully exercised,