<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] Confidential, for Use of the Commission Only (as permitted by Rule 14a-
6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 204.14a-12
SUBURBAN OSTOMY SUPPLY CO., INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
--------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
--------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act
Rule 0-11: (Set forth the amount on which the filing fee is calculated and
state how it was determined.)
--------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
--------------------------------------------------------------------------
5) Total fee paid:
--------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
--------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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<PAGE>
SUBURBAN OSTOMY SUPPLY CO., INC.
NOTICE OF THE 1997 SPECIAL MEETING IN LIEU OF
ANNUAL MEETING OF STOCKHOLDERS
FEBRUARY 19, 1997
To the Stockholders:
The 1997 Special Meeting in Lieu of Annual Meeting of the Stockholders of
SUBURBAN OSTOMY SUPPLY CO., INC. will be held on Wednesday, February 19, 1997,
at 10:00 a.m. at the offices of Hutchins, Wheeler & Dittmar, 101 Federal
Street, Boston, Massachusetts, for the following purposes:
1. To elect Joseph F. Trustey as a Director, to serve for a term of three
years.
2. To amend the Company's Bylaws to change the date on which the
Company's annual meeting of stockholders shall be held to the second
Wednesday in February each year.
3. To consider and act upon any other business which may properly come
before the meeting.
The Board of Directors has fixed the close of business on January 15, 1997,
as the record date for the meeting. All stockholders of record on that date
are entitled to notice of and to vote at the meeting.
PLEASE COMPLETE AND RETURN THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED,
WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE MEETING IN PERSON.
By order of the Board of Directors
STEPHEN N. ASCHETTINO, Clerk
Holliston, Massachusetts
January 17, 1997
<PAGE>
SUBURBAN OSTOMY SUPPLY CO., INC.
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Suburban Ostomy Supply Co., Inc. (the
"Corporation"), for use at the 1997 Special Meeting in lieu of Annual Meeting
of Stockholders to be held on Wednesday, February 19, 1997, at the time and
place set forth in the notice of the meeting, and at any adjournments thereof.
The approximate date on which this Proxy Statement and form of proxy are first
being sent to stockholders is on or about January 15, 1997.
If the enclosed proxy is properly executed and returned, it will be voted in
the manner directed by the stockholders. If no instructions are specified with
respect to any particular matter to be acted upon, proxies will be voted in
favor thereof. Any person giving the enclosed form of proxy has the power to
revoke it by voting in person at the meeting, or by giving written notice of
revocation to the Clerk of the Corporation at any time before the proxy is
exercised.
The holders of a majority in interest of all Common Stock issued,
outstanding, and entitled to vote are required to be present in person, or be
represented by proxy at the Meeting in order to constitute a quorum for the
transaction of business. The election of the nominee for Director will be
decided by plurality vote. The affirmative vote of the holders of at least a
majority of the shares of Common Stock voting in person or by proxy at the
meeting are required to approve all other matters listed in the notice of
meeting.
The Corporation will bear the cost of the solicitation. It is expected that
the solicitation will be made primarily by mail, but regular employees or
representatives of the Corporation (none of whom will receive any extra
compensation for their activities) may also solicit proxies by telephone,
telegraph, and in person, and arrange for brokerage houses and other
custodians, nominees, and fiduciaries to send proxies and proxy materials to
their principals at the expense of the Corporation.
The Corporation's principal executive offices are located at 75 October Hill
Road, Holliston, Massachusetts 01746, telephone number (508) 429-1000.
1
<PAGE>
RECORD DATE AND VOTING SECURITIES
Only stockholders of record at the close of business on January 15, 1997,
are entitled to notice of and to vote at the meeting. On that date, the
Corporation had, outstanding and entitled to vote, 10,415,750 shares of Common
Stock, no par value per share. Each outstanding share of the Corporation's
Common Stock entitles the record holder to one vote.
ELECTION OF DIRECTORS
Pursuant to the Restated Articles of Organization of the Corporation, as
amended, and Massachusetts law, the Board of Directors is divided into three
classes, with each class as nearly equal in number as possible. One class is
elected each year for a term of three years. It is proposed that the nominee
listed below, whose term expires at this meeting, be elected to serve a term
of three years and until his successor is duly elected and qualified, or until
he sooner dies, resigns, or is removed. The Corporation presently has a Board
of Directors of four members.
The persons named in the accompanying proxy will vote, unless authority is
withheld, for the election of the nominees named below. In the event that the
nominee(s) should become unavailable for election, which is not anticipated,
the persons named in the accompanying proxy will vote for such substitute
nominee(s) as the Board of Directors may recommend. The nominee is not related
to any Executive Officer of the Corporation or its subsidiaries.
Nominees. Set forth below is the nominee for election as Director and
certain information about him.
<TABLE>
<CAPTION>
YEAR FIRST
ELECTED A POSITION WITH THE CORPORATION OR PRINCIPAL
NAME OF NOMINEE AGE DIRECTOR OCCUPATION DURING THE PAST FIVE YEARS
--------------- --- ---------- ------------------------------------------
<S> <C> <C> <C>
Nominated for a term
ending in 2000:
Joseph F. Trustey....... 34 1995 General Partner of Summit Partners, a
venture capital firm since January
1996. Vice President of Summit
Partners from December 1994 until
January 1996. Prior to that, strategy
consultant with Bain & Co., Inc.
</TABLE>
Other Directors. Set forth below are the Corporation's other directors and
certain information about them.
<TABLE>
<CAPTION>
YEAR FIRST
ELECTED A POSITION WITH THE CORPORATION OR PRINCIPAL
NAME OF NOMINEE AGE DIRECTOR OCCUPATION DURING THE PAST FIVE YEARS
--------------- --- ---------- ------------------------------------------
<S> <C> <C> <C>
Serving a term ending in
1998:
Donald H. Benovitz...... 55 1987 President and Chief Operating Officer
of the Company since 1987
Serving a term ending in
1999:
Herbert P. Gray......... 62 1977 Chairman of the Board of Directors and
Chief Executive Officer of the Company
since 1979
Martin J. Mannion....... 37 1995 General Partner of Summit Partners
since 1987. Director of numerous
private companies.
</TABLE>
2
<PAGE>
INFORMATION CONCERNING THE BOARD OF DIRECTORS
During fiscal 1996, there were four meetings of the Board of Directors of
the Corporation. All of the Directors attended at least 75% of the aggregate
of (i) the total number of meetings of the Board of Directors and (ii) the
total number of meetings held by committees of the Board of Directors on which
they served. The Board of Directors does not have a nominating committee.
The Audit Committee of the Board of Directors reviews, with the
Corporation's independent auditors, the scope of the audit for the year, the
results of the audit when completed, and the independent auditors' fees for
services performed. The Audit Committee also recommends independent auditors
to the Board of Directors and reviews, with management, various matters
related to its internal accounting controls. The present members of the Audit
Committee are Martin J. Mannion and Joseph F. Trustey, both of whom became
members of the Audit Committee in June 1996. The Audit Committee was formed in
1996 in anticipation of the Corporation's initial public offering.
SECURITY OWNERSHIP OF PRINCIPAL HOLDERS OF
VOTING SECURITIES, DIRECTORS, AND OFFICERS
The following information is furnished as of January 15, 1997 with respect
to Common Stock of the Corporation beneficially owned, within the meaning of
Rule 13d-3, by any person who is known by the Corporation to be the beneficial
owner of more than five percent of any class of voting securities of the
Corporation, by all Directors of the Corporation and nominees, by all
executive officers of the Corporation and by all Directors and executive
officers of the Corporation as a group. Unless otherwise indicated, the named
individuals held sole voting and investment power over the shares listed
below.
<TABLE>
<CAPTION>
NAME AND ADDRESS OF BENEFICIAL OWNER AND AMOUNT AND NATURE OF PERCENT
NAME OF DIRECTOR(8) TITLE OF CLASS BENEFICIAL OWNERSHIP OF CLASS
- ---------------------------------------- -------------- -------------------- --------
<S> <C> <C> <C>
Herbert P. Gray(1)................ Common Stock 715,627 6.5%
Donald H. Benovitz(2)............. Common Stock 320,329 3.1%
Stephen N. Aschettino(3).......... Common Stock 98,161 *
Patrick Bohan(4).................. Common Stock 129,166 1.2%
John Manos(5)..................... Common Stock 51,061 *
Martin J. Mannion(6).............. Common Stock 3,937,831 37.8%
Joseph F. Trustey(6).............. Common Stock 3,937,831
All Directors and officers as a
group (10 persons)............... Common Stock 5,135,875(7) 49.1%
========= ====
</TABLE>
- --------
* Less than 1.0%
(1) Includes options currently exercisable to purchase 61,993 shares of Common
Stock and 33,634 shares as to which the beneficial owner has voting power as
trustee for two separate trusts.
(2) Includes options currently exercisable to purchase 41,329 shares of Common
Stock and 33,634 shares as to which the beneficial owner has investment
power as trustee for two separate trusts..
(3) Includes options currently exercisable to purchase 51,661 shares of Common
Stock.
(4) Includes options currently exercisable to purchase 82,666 shares of Common
Stock.
(5) Includes options currently exercisable to purchase 7,745 shares of Common
Stock.
(6) Reflect the shares held by Summit Ventures III, L.P., Summit Investors II,
L.P. and Summit Subordinated Debt Fund, L.P., in each of which this
beneficial owner is a general partner. The beneficial owner disclaims
beneficial ownership of these shares.
(7) Included in this figure are 23,234 shares purchasable by certain officers
and Directors under options presently exercisable.
(8) The address of each beneficial owner is Suburban Ostomy Supply Co., Inc.,
75 October Hill Road, Holliston, MA 01746.
3
<PAGE>
BOARD OF DIRECTORS
REPORT ON EXECUTIVE COMPENSATION
The Corporation's executive compensation is supervised by the Board of
Directors. Compensation paid to the Corporation's executive officers is
intended to reflect the responsibility associated with each executive's
position, the past performance of the specific executive, the goals of
management, and the profitability of the Corporation.
Executive compensation is designed to be competitive within the wholesale
distribution industry and other companies of comparable size and in order to
attract and retain talented and motivated individuals in key positions.
Compensation in any particular case may vary from any industry average on the
basis of annual and long-term Corporation performance, as well as individual
performance. The Board of Directors will exercise its discretion to set
compensation where, in its judgment, external or individual circumstances
warrant it. The compensation of Mr. Gray, Chief Executive Officer of the
Corporation, was based upon an employment agreement between the Corporation
and Mr. Gray. Although Mr. Gray's compensation is not directly tied to any
particular measurement of the financial performance of the Corporation during
the Corporation's fiscal year, the Board of Directors does exercise discretion
in assessing the Corporation's performance and adjusting the compensation of
the Chief Executive Officer accordingly.
The Corporation utilizes a compensation system comprised of base salaries,
annual bonuses, and stock option awards.
The Board of Directors reviews executive officer compensation annually.
Executive officers are eligible to receive annual cash bonuses upon
achievement of predetermined performance targets.
The Board of Directors may award stock options under the Corporation's 1995
Stock Option Plan to executive officers and their employees of the
Corporation. Stock options under each of these plans are designed to provide
incentive to the Corporation's employees to increase the market value of the
Corporation's stock, thus linking corporate performance and stockholder value
to executive compensation.
1995 Stock Option Plan. The 1995 Plan provides for the granting of
"incentive stock options," as defined in Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code"), and non-qualified stock options, each
in such amounts, on such terms, and to such officers and other employees of
the Corporation as the administrators of the 1995 Plan, in accordance with the
terms of the 1995 Plan, may select. The 1995 Plan is administered by the Board
of Directors. A total of 665,570 shares of Common Stock are reserved for
issuance pursuant to the 1995 Plan. As of January 15, 1997, options to
purchase an aggregate of 620,000 shares of Common Stock have been granted to
five executive officers of the Corporation, two of whom are directors of the
Corporation, at an exercise price of $.81 per share. In addition, options to
purchase an aggregate of 29,450 shares of Common Stock have been granted to a
number of employees of the Corporation, none of whom are directors of the
Corporation, at an exercise price of $1.62 per share. These options vest 20%
per year for the first two years after grant and at 12% per year thereafter,
and are intended to be "incentive stock options," as defined in Section 422 of
the Code.
The 1995 Plan will terminate on July 3, 2005, but the Board of Directors
may, at any time, terminate, modify, or amend the 1995 Plan; provided,
however, that the Board of Directors may not, without the approval of the
Stockholders of the Corporation, increase the maximum number of shares for
which options may be granted, change the designation of the class of persons
eligible to receive options under the 1995 Plan, or make any other change in
the 1995 Plan which requires stockholder approval under applicable law or
regulations.
BOARD OF DIRECTORS
Herbert P. Gray
Donald H. Benovitz
Martin J. Mannion
Joseph F. Trustey
4
<PAGE>
BOARD OF DIRECTORS INTERLOCKS
AND INSIDER PARTICIPATION
Messrs. Gray, Benovitz, Mannion and Trustey served as members of the Board
of Directors during all of fiscal 1996 and participated in Board of Directors'
deliberations on executive compensation. Mr. Gray served as Chief Executive
Officer and Chairman of the Board of the Corporation during fiscal 1996.
Neither Mr. Mannion nor Mr. Trustey was an officer or employee of the
Corporation or any of its subsidiaries during fiscal 1996.
EXECUTIVE OFFICERS OF THE CORPORATION
Information required by Item 7(b) of Schedule 14A with respect to executive
officers of the Corporation is set forth below. The executive officers of the
Corporation are elected annually by the Board of Directors and hold office
until their successors are elected and qualified, or until their earlier
removal or resignation.
Herbert P. Gray, 62, has been the Chairman of the Board and Chief Executive
Officer of the Corporation since 1979.
Donald H. Benovitz, 55, has been the President and Chief Operating Officer
of the Corporation since 1987. Prior to his employment with the Corporation,
Mr. Benovitz worked for Medi-Mart Drug Stores, a regional drug store chain,
serving in various capacities, including Vice President of Corporate Pharmacy
Operations and President.
Stephen N. Aschettino, 47, has been the Vice President and Chief Financial
Officer of the Corporation since 1991 and Vice President, Treasurer and Clerk
since 1992. Prior to that time he served as Vice President and General manager
for Woodcraft Supply Company, a national direct marketer and distributor of
specialty woodworking tools and equipment.
Patrick Bohan, 40, joined the Corporation as Vice President of Sales and
Marketing in 1990. Prior to that time, he was Vice President of Sales and
Marketing for H. L. Moore, a national direct marketing wholesaler of
pharmaceuticals, over-the-counter and home health care products.
John Manos, 40, has been the Vice President of MIS and Operations of the
Corporation since 1992. Prior to that time, Mr. Manos served as Director of
management Information Systems at National Medical Care, a division of W. R.
Grace.
5
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth all compensation awarded to, earned by or
paid to the Corporation's Chief Executive Officer and each of the
Corporation's executive officers (other than the Chief Executive Officer)
whose total annual salary and bonus exceeded $100,000 for all services
rendered in all capacities to the Corporation and its subsidiaries for the
Corporation's three fiscal years ended August 31, 1996.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
-------------------------------------- ------------
SECURITIES ALL OTHER
FISCAL OTHER ANNUAL UNDERLYING COMPENSATION
NAME YEAR SALARY ($) BONUS ($) COMPENSATION OPTIONS (#) ($)(1)
---- ------ ---------- --------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Herbert P. Gray......... 1996 150,000(2) 60,000 2,393 -- --
1995 324,722(2) -- -- 186,000 --
1994 366,000(2) 54,000 -- -- --
Donald B. Benovitz...... 1996 195,000(2) 78,000 1,081 -- --
1995 192,907(2) -- -- 124,000 --
1994 195,000(2) 1,836,695 -- -- --
Stephen N. Aschettino... 1996 115,000 71,000 -- -- --
1995 115,000 -- -- 115,000 --
1994 115,000 385,079 -- -- --
Patrick Bohan........... 1996 130,000 52,000 -- -- --
1995 130,000 -- -- -- --
1994 130,000 440,459 -- -- --
John G. Manos........... 1996 100,000 50,000 -- -- --
1995 100,000 300,000(3) -- -- --
1994 93,462 83,695 -- -- --
</TABLE>
- --------
(1) Does not include other benefits that did not exceed inthe aggregate
$50,000 or 10% of total annual salary and bonus reported for the named
executive officer.
(2) Does not include compensation paid to the spouses of Messrs. Gray and
Benovitz, each of whom is an employee of the Company.
(3) Bonus paid by the Company to Mr. Manos at the time of the Company's July
3, 1995 Recapitalization with proceeds from capital contributions from
certain stockholders.
The Company made no grant of options to purchase its common stock to any of
its officers or directors during fiscal 1996.
OPTION GRANTS IN LAST FISCAL YEAR
There were no option grants in fiscal 1996 to the named executive officers.
6
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST
FISCAL YEAR AND 8/31/96 OPTION VALUES
The following table provides information on the value of the named executive
officer's option exercises in fiscal 1996 and unexercised options as of August
31, 1996.
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF IN-THE-MONEY
OPTIONS AT 8/31/96 OPTIONS AT 8/31/96(1)
------------------------- -------------------------
SHARES
ACQUIRED VALUE
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
John Manos ............. 7,750
Vice President of MIS 15,500 $260,167 12,927 118,823 $144,654 $1,329,629
</TABLE>
- --------
(1) Value of unexercised stock options represents the difference between the
exercise price of the stock options and an assumed market price at $12.00
per share on August 31, 1996.
AMENDMENT OF BYLAWS
There will be presented at the meeting a proposal to amend the Corporation's
Amended and Restated Bylaws ("Bylaws") in order to change the date on which
the Annual Meeting of Stockholders is held each year from the second Wednesday
in December to the second Wednesday in February. The Board of Directors has
approved and adopted the amendment to the Bylaws, subject to stockholder
approval. The Board of Directors recommends that the stockholders approve the
amendment to the Bylaws. The affirmative vote of the holders of at least a
majority of the Corporation's common stock voting in person or by proxy at the
meeting will be required for such approval.
7
<PAGE>
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has appointed Arthur Andersen LLP as independent
auditors to examine the consolidated financial statements of the Corporation
and its subsidiaries for the fiscal year ending August 31, 1996.
The Board of Directors engaged Arthur Andersen LLP, certified public
accountants, as independent auditors to examine the consolidated financial
statements of the Corporation and its subsidiaries for the fiscal year ending
August 31, 1996. A representative of Arthur Andersen LLP is expected to be
present at the meeting and will have the opportunity to make a statement, if
he or she so desires, and to respond to appropriate questions.
COMPLIANCE WITH SECTION 16(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's officers and Directors, and persons owning more than 10% of the
outstanding Common Stock of the Corporation, to file reports of ownership and
changes in ownership with the Securities and Exchange Commission. Officers,
Directors, and greater than 10% holders of Common Stock are required, by SEC
regulation to furnish the Corporation with copies of all Section 16(a) forms
they file.
Based solely on copies of such forms furnished, as provided above, the
Corporation believes that during fiscal 1996, there was compliance with all
Section 16(a) filing requirements applicable to its officers, Directors and
owners of greater than 10% of its Common Stock.
DEADLINES FOR SUBMISSION OF
STOCKHOLDER PROPOSALS
Under regulations adopted by the Securities and Exchange Commission, any
proposal submitted for inclusion in the Corporation's Proxy Statement relating
to the Annual Meeting of Stockholders to be held in 1998 must be received at
the Corporation's principal executive offices in Holliston, Massachusetts, on
or before December 16, 1997. Receipt by the Corporation of any such proposal
from a qualified stockholder in a timely manner will not ensure its inclusion
in the proxy material because there are other requirements in the proxy rules
for such inclusion.
OTHER MATTERS
Management knows of no matters that properly may be and are likely to be
brought before the meeting other than the matters discussed herein. However,
if any other matters properly come before the meeting, the persons named in
the enclosed proxy will vote in accordance with their best judgment.
The cost of this solicitation will be borne by the Corporation. It is
expected that the solicitation will be made primarily by mail, but regular
employees or representatives of the Corporation (none of whom will receive any
extra compensation for their activities) also may solicit proxies by
telephone, telegraph, and in person, and arrange for brokerage houses and
other custodians, nominees, and fiduciaries to send proxies and proxy material
to their principals, at the expense of the Corporation.
10-K REPORT
THE CORPORATION WILL PROVIDE EACH BENEFICIAL OWNER OF ITS SECURITIES WITH A
COPY OF AN ANNUAL REPORT ON FORM 10-K, INCLUDING THE FINANCIAL STATEMENTS AND
SCHEDULES THERETO, REQUIRED TO BE FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION FOR THE CORPORATION'S MOST RECENT FISCAL YEAR, WITHOUT CHARGE, UPON
RECEIPT OF A WRITTEN REQUEST FROM SUCH PERSON. SUCH REQUEST SHOULD BE SENT TO
STEPHEN N. ASCHETTINO, CHIEF FINANCIAL OFFICER, SUBURBAN OSTOMY SUPPLY CO.,
INC., 75 OCTOBER HILL ROAD, HOLLISTON, MASSACHUSETTS 01746.
8
<PAGE>
VOTING PROXIES
The Board of Directors recommends an affirmative vote on all proposals
specified. Proxies will be voted as specified. If signed proxies are returned
without specifying an affirmative or negative vote on any proposal, the shares
represented by such proxies will be voted in favor of the Board of Directors'
recommendations.
By order of the Board of Directors
Stephen N. Aschettino
Holliston, Massachusetts
January 17, 1997
9
<PAGE>
AMENDED AND RESTATED
BY-LAWS
-------
OF
SUBURBAN OSTOMY SUPPLY CO., INC.
--------------------------------
<PAGE>
Effective October 10, 1996
BY-LAWS
-------
of
SUBURBAN OSTOMY SUPPLY CO., INC.
--------------------------------
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
-------
<S> <C> <C>
ARTICLE 1 Articles of Organization 1
ARTICLE 2 Fiscal Year 1
ARTICLE 3 Meetings of Stockholders
Section 3.1 Annual Meeting 1
Section 3.2 Special Meeting 3
Section 3.3 Place of Meeting 4
Section 3.4 Notice of Meetings 4
Section 3.5 Quorum 4
Section 3.6 Action without Meeting 5
Section 3.7 Proxies and Voting 5
ARTICLE 4 Directors
Section 4.1 Enumeration, Election and Term of Office 6
Section 4.2 Powers 8
Section 4.3 Meetings of Directors 8
Section 4.4 Quorum of Directors 9
Section 4.5 Consent in Lieu of Meeting and Participation in
Meetings by Communications Equipment 9
Section 4.6 Committees 10
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
ARTICLE 5 Officers
Section 5.1 Enumeration, Election and Term of Office 10
Section 5.2 President and Chairman of the Board 11
Section 5.3 Treasurer and Assistant Treasurer 11
Section 5.4 Clerk and Assistant Clerk 12
Section 5.5 Secretary of the Board and Assistant Secretary 12
Section 5.6 Temporary Clerk and Temporary Secretary 13
Section 5.7 Other Powers and Duties 13
ARTICLE 6 Resignations, Removals and Vacancies
Section 6.1 Resignations 13
Section 6.2 Removals 14
Section 6.3 Vacancies 15
ARTICLE 7 Indemnification of Directors and Others
Section 7.1 Definitions 16
Section 7.2 Right to Indemnification 16
Section 7.3 Indemnification Not Available 17
Section 7.4 Compromise or Settlement 17
Section 7.5 Advances 17
Section 7.6 Not Exclusive 17
Section 7.7 Insurance 17
ARTICLE 8 Stock
Section 8.1 Stock Authorized 18
Section 8.2 Issue of Authorized and Unissued Capital Stock 18
Section 8.3 Certificates of Stock 18
Section 8.4 Replacement Certificate 19
Section 8.5 Transfers 19
Section 8.6 Record Date 20
ARTICLE 9 Miscellaneous Provisions
Section 9.1 Execution of Papers 21
Section 9.2 Voting of Securities 21
Section 9.3 Corporate Seal 22
Section 9.4 Corporate Records 22
ARTICLE 10 Amendments 22
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C> <C>
ARTICLE 11 Control Share Acquisitions
Section 11.1 Redemption of Acquired Shares 23
Section 11.2 No Appraisal Rights 24
</TABLE>
iii
<PAGE>
AMENDED AND RESTATED BY-LAWS
----------------------------
of
SUBURBAN OSTOMY SUPPLY CO., INC.
--------------------------------
ARTICLE 1
---------
Articles of Organization
------------------------
The name and purposes of the Corporation shall be as set forth in the
Articles of Organization. These By-Laws, the powers of the Corporation and its
Directors and stockholders, and all matters concerning the conduct and
regulation of the business of the Corporation, shall be subject to such
provisions in regard thereto, if any, as are set forth in the Articles of
Organization. All references in these By-Laws to the Articles of Organization
shall be construed to mean the Articles of Organization of the Corporation as
from time to time amended or restated.
ARTICLE 2
---------
Fiscal Year
-----------
Except as from time to time otherwise determined by the Directors, the
fiscal year of the Corporation shall be the twelve months ending on the Saturday
nearest to August 31.
ARTICLE 3
---------
Meetings of Stockholders
------------------------
Section 3.1 Annual Meeting
----------- --------------
The Annual Meeting of the Stockholders shall be held at 2:00 o'clock
P.M. on the second Wednesday of February in each year. Purposes for which an
Annual Meeting is to be held, additional to those prescribed by law and these
By-Laws, may be specified by the President or by the Directors.
<PAGE>
If such Annual Meeting has not been held on the day herein provided
therefor, a Special Meeting of the Stockholders in Lieu of the Annual Meeting
may be held, and any business transacted or elections held at such Special
Meeting shall have the same effect as if transacted or held at the Annual
Meeting, and in such case all references to these By-Laws, except in this
Section 3.1, to the Annual Meeting of the Stockholders shall be deemed to refer
to such Special Meeting. Any such Special Meeting shall be called, and the
purposes thereof shall be specified in the Call, as provided in Section 3.2 of
this Article 3.
To be properly brought before the meeting, business must be of a
nature that is appropriate for consideration at an Annual Meeting and must be
(i) specified in the Notice of meeting (or any supplement thereto) given by or
at the direction of the Board of Directors, (ii) otherwise properly brought
before the meeting by or at the direction of the Board of Directors, or (iii)
otherwise properly brought before the meeting by a stockholder. In addition to
any other applicable requirements, for business to be properly brought before
the Annual Meeting by a stockholder, the stockholder must have given timely
Notice thereof in writing to the Clerk of the Corporation. To be timely, each
such Notice must be given either by personal delivery or by United States mail,
postage prepaid, to the Clerk of the Corporation not later than (1) with respect
to a matter to be brought before an Annual Meeting of Stockholders or Special
Meeting of Stockholders in Lieu of the Annual Meeting, sixty (60) days prior to
the date set forth in the By-Laws for the Annual Meeting and (2) with respect to
a matter to be brought before a Special Meeting of the stockholders not in lieu
of an Annual Meeting, the close of business on the tenth (10th) day following
the date on which Notice of such meeting is first given to stockholders. The
Notice shall set forth (i) information concerning the stockholder, including his
or her name and address;
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(ii) a representation that the stockholder is entitled to vote at such meeting
and intends to appear in person or by proxy at the meeting to present the matter
specified in the Notice; and (iii) such other information as would be required
to be included in a proxy statement soliciting proxies for the presentation of
such matter to the meeting.
Notwithstanding anything in these By-Laws to the contrary, no business
shall be transacted at the Annual Meeting except in accordance with the
procedures set forth in this Section; provided, however, that nothing in this
Section shall be deemed to preclude discussion by any stockholder of any
business properly brought before the Annual Meeting in accordance with these By-
Laws.
Section 3.2 Special Meeting
----------- ---------------
A Special Meeting of the Stockholders may be called at any time by the
President, the Chairman or by a majority of the Directors acting by vote or by
written instrument or instruments signed by them. Such Call shall state the
time, place, and purposes of the meeting.
Section 3.3 Place of Meeting
----------- ----------------
All meetings of the stockholders shall be held at the principal office
of the Corporation in Massachusetts, unless a different place within
Massachusetts or, if permitted by the Articles of Organization, elsewhere within
the United States is designated by the President, or by a majority of the
Directors acting by vote or by written instrument or instruments signed by them.
Any adjourned session of any meeting of the stockholders shall be held at such
place within Massachusetts or, if permitted by the Articles of Organization,
elsewhere within the United States as is designated in the vote of adjournment.
3
<PAGE>
Section 3.4 Notice of Meeting
----------- ------------------
A written Notice of the place, date and hour of all meetings of
stockholders stating the purposes of the meeting shall be given at least seven
(7) days before the meeting to each stockholder entitled to vote thereat, by
leaving such Notice with him or at his residence or usual place of business, or
by mailing, postage prepaid, and addressed to such stockholder at his address as
it appears in the records of the Corporation. Such Notice shall be given by the
Clerk, or in the case of the death, absence, incapacity or refusal of the Clerk,
by any other officer or by a person designated either by the Clerk, by the
person or persons calling the meeting or by the Board of Directors. Whenever
Notice of a meeting is required to be given to a stockholder under any provision
of law, of the Articles of Organization, or of these By-Laws, a written Waiver
thereof, executed before or after the meeting by such stockholder or his
attorney thereunto authorized, and filed with the records of the meeting, shall
be deemed equivalent to such Notice.
Section 3.5 Quorum
----------- ------
At any meeting of the stockholders, a quorum for the election of any
Director or for the consideration of any question shall consist of a majority in
interest of all stock issued, outstanding and entitled to vote at such election
or upon such question, respectively, except that if two or more classes of stock
are entitled to vote as separate classes for the election of any Director or
upon any question, then in the case of each such class a quorum for the election
of any Director or for the consideration of such question shall consist of a
majority in interest of all stock of that class issued, outstanding and entitled
to vote thereon. Stock owned by the Corporation, if any, shall be disregarded
in determining any quorum.
4
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Whether or not a quorum is present, any meeting may be adjourned from time to
time by a majority of the votes properly cast upon the question, and the meeting
may be held as adjourned without further notice. When a quorum for an election
is present at any meeting, a plurality of the votes properly cast for any office
shall elect such office.
When a quorum for the consideration of a question is
present at any meeting, a majority of the votes properly cast upon the question
shall decide the question; except that if two or more classes of stock are
entitled to vote as separate classes upon such question, then in the case of
each such class a majority of the votes of such class properly cast upon the
question shall decide the vote of that class upon the question; and except in
any case where a larger vote is required by law or by the Articles of
Organization.
Section 3.6 Action without Meeting
----------- ----------------------
Any action required or permitted to be taken at any meeting of the
stockholders may be taken without a meeting if all stockholders entitled to vote
on the matter consent to the action in writing and the written Consents are
filed with the records of the meetings of stockholders. Such Consents shall be
treated for all purposes as a vote at a meeting.
Section 3.7 Proxies and Voting
----------- ------------------
Except as may otherwise be provided in the Articles of Organization,
stockholders entitled to vote shall have one vote for each share of stock
entitled to vote owned by them. Stockholders entitled to vote may vote in
person or by proxy. No proxy dated more than six (6) months before the meeting
named therein shall be valid and no proxy shall be valid after the final
adjournment of such meeting. A proxy with respect to stock held in the name of
two or more persons shall be valid if executed by any one of them unless at or
prior to the exercise of the proxy the Corporation receives specific written
notice to the contrary from any one of them. A proxy
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purporting to be executed by or on behalf of a stockholder shall be deemed valid
unless challenged at or prior to its exercise and the burden of proving
invalidity shall rest on the challenger. Proxies shall be filed with the Clerk,
or person performing the duties of clerk, at the meeting, or any adjournment
thereof, before being voted.
The Corporation shall not, directly or indirectly, vote upon any
share of its own stock.
ARTICLE 4
---------
Directors
---------
Section 4.1 Enumeration, Election and Term of Office
----------- ----------------------------------------
The business and affairs of the Corporation shall be managed under the
direction of a Board of Directors consisting of not fewer than three (3)
Directors, the exact number to be determined from time to time by resolution
adopted by the affirmative vote of a majority of the entire Board of Directors,
such Board of Directors to be divided into such classes and elected by such
stockholders as have the right to vote thereon, for such terms as are provided
in the Articles of Organization. Each director shall hold office until his
successor shall have been elected and qualified, subject to Article 6 of these
By-Laws. Whenever used in these By-Laws, the phrase "entire Board of Directors"
shall mean that number of Directors fixed by the most recent resolution adopted
pursuant to the preceding sentence prior to the date as of which a determination
of the number of Directors then constituting the entire Board of Directors shall
be relevant for any purpose under these By-Laws. Subject to the foregoing
limitations and the requirements of the Articles of Organization, the Board of
Directors may be enlarged by the stockholders at any meeting or by the
affirmative vote of a majority of the entire Board of Directors then in office.
6
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Nominations for the election of Directors may be made by the Board of
Directors or a committee appointed by the Board of Directors or by any
stockholder entitled to vote generally in the election of Directors. However,
any stockholder entitled to vote generally in the election of Directors may
nominate one or more persons for election as Directors at a meeting only if
written Notice of such stockholder's intent to make such nomination or
nominations has been given, either by personal delivery or by United States
mail, postage prepaid, to the Clerk of the Corporation not later than (1) with
respect to an election to be held at an Annual Meeting of Stockholders or
Special Meeting in Lieu of an Annual Meeting, sixty (60) days prior to the date
for the Annual Meeting set forth in the By-laws and (2) with respect to an
election to be held at a Special Meeting of Stockholders not in lieu of an
Annual Meeting, the close of business on the tenth (10th) day following the date
on which notice of such meeting is first given to stockholders. Each such Notice
to the Clerk shall set forth (i) the name and addresses of the stockholder and
his or her nominees; (ii) a representation that the stockholder is entitled to
vote at such meeting and intends to appear in person or by proxy at the meeting
to nominate the person or persons specified in the notice; (iii) a description
of all arrangements or understandings between the stockholder and each such
nominee; (iv) such other information as would be required to be included in a
proxy statement soliciting proxies for the election of the nominees of such
stockholder; and (v) the consent of each nominee to serve as a Director of the
Corporation if so elected. The Corporation may require any proposed nominee to
furnish such other information as may reasonably be required by the Corporation
to determine the eligibility of such proposed nominee to serve as a Director of
the corporation. The presiding officer of the meeting may, if the facts
warrant, determine that a nomination was not made in accordance with the
foregoing
7
<PAGE>
procedure, and if he should so determine, he shall so declare to the meeting and
the defective nomination shall be disregarded.
No Director need be a stockholder. Any election of Directors by the
stockholders shall be by ballot if so requested by any stockholder entitled to
vote thereon.
Section 4.2 Powers
----------- ------
The business of the Corporation shall be managed by the Board of
Directors, which shall exercise all the powers of the Corporation except as
otherwise required by law, by the Articles of Organization or by these By-Laws.
In the event of one or more vacancies in the Board of Directors, the remaining
Directors, if at least two (2) Directors still remain in office, may exercise
the powers of the full Board until such vacancy or vacancies are filled.
Section 4.3 Meetings of Directors
----------- ---------------------
Regular meetings of the Directors may be held without notice at such
places and at such times as may be fixed from time to time by the Directors. A
regular meeting of the Directors may be held without notice immediately
following the Annual Meeting of Stockholders or any Special Meeting held in lieu
thereof.
Special meetings of Directors may be called by the Chairman of the
Board, the President, the Treasurer or any two (2) or more Directors, or if
there shall be less than three (3) Directors by any one (1) Director, and shall
be held at such time and place as specified in the Call. Reasonable notice of
each special meeting of the Directors shall be given to each Director. Such
notice may be given by the Secretary or Assistant Secretary of the Board, the
Clerk or any Assistant Clerk or by the officer or one of the Directors calling
the meeting. Notice to a Director shall in any case be sufficient if sent by
telegram at least forty-eight (48) hours or by mail at least
8
<PAGE>
ninety-six (96) hours before the meeting addressed to him at his usual or last
known business or residence address, or if given to him at least forty-eight
(48) hours before the meeting in person or by telephone or by handing him a
written Notice. Notice of a meeting need not be given to any Director if a
written Waiver of Notice, executed by him before or after the meeting, is filed
with the records of the meeting, or to any Director who attends the meeting
without protesting prior thereto or at its commencement the lack of notice to
him. A Notice or Waiver of Notice need not specify the purposes of the meeting.
Section 4.4 Quorum of Directors
----------- -------------------
At any meeting of the Directors, a quorum for any election or for the
consideration of any question shall consist of a majority of the Directors then
in office. Whether or not a quorum is present any meeting may be adjourned from
time to time by a majority of the votes properly cast upon the question, and the
meeting may be held as adjourned without further Notice. When a quorum is
present at any meeting, the votes of a majority of the Directors present shall
be requisite and sufficient for election to any office and shall decide any
question brought before such meeting, except in any case where a larger vote is
required by law, by the Articles of Organization or by these By-Laws.
Section 4.5 Consent in Lieu of Meeting and Participation in
----------- -----------------------------------------------
Meetings by Communications Equipment
------------------------------------
Any action required or permitted to be taken at any meeting of the
Board of Directors may be taken without a meeting if all the Directors consent
to the action in writing and the written Consents are filed with the records of
the meetings of the Directors. Such Consents shall be treated for all purposes
as a vote of the Directors at a meeting.
9
<PAGE>
Members of the Board of Directors or any Committee designated thereby
may participate in a meeting of such Board or Committee by means of a conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other at the same time and
participation by such means shall constitute presence in person at a meeting.
Section 4.6 Committees
----------- ----------
By vote of a majority of the Directors then in office, the Directors
may elect from their own number an Executive Committee or other Committees and
may by like vote delegate to any such Committee some or all of their powers
except those which by law may not be delegated.
ARTICLE 5
---------
Officers
--------
Section 5.1 Enumeration, Election and Term of Office
----------- ----------------------------------------
The officers of the Corporation shall include a President, a Treasurer
and a Clerk, who shall be chosen by the Directors at their first meeting
following the Annual Meeting of the Stockholders. Each of them shall hold his
office until the next annual election to the office which he holds and until his
successor is chosen and qualified or until he sooner dies, resigns, is removed
or becomes disqualified.
The Directors may choose one of their number to be Chairman of the
Board and determine his powers, duties and term of office. The Directors may at
any time appoint such other officers, including one or more Vice Presidents,
Assistant Treasurers, Assistant Clerks, a Secretary of the Board and an
Assistant Secretary of the Board as they deem wise, and may determine their
respective powers, duties and terms of office.
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<PAGE>
No officer need be a stockholder or a Director except that the
Chairman of the Board shall be a Director. The same person may hold more than
one office, except that no person shall be both President and Clerk.
Section 5.2 President and Chairman of the Board
----------- -----------------------------------
The President shall be the Chief Executive Officer of the Corporation
and, subject to the control and direction of the Directors, shall have general
supervision and control of the business of the Corporation. He shall preside at
all meetings of the stockholders at which he is present, and, if he is a
Director, at all meetings of the Directors if there shall be no Chairman of the
Board or in the absence of the Chairman of the Board.
If there shall be a Chairman of the Board, he shall make his counsel
available to the other officers of the Corporation, and shall have such other
duties and powers as may from time to time be conferred on him by the Directors.
He shall preside at all meetings of the Directors at which he is present, and,
in the absence of the President, at all meetings of stockholders.
Section 5.3 Treasurer and Assistant Treasurer
----------- ---------------------------------
The Treasurer shall have the custody of the funds and valuable books
and papers of the Corporation, except such as are directed by these By-Laws to
be kept by the Clerk or by the Secretary of the Board. He shall perform all
other duties usually incident to his office, and shall be at all times subject
to the control and direction of the Directors. If required by the Directors, he
shall give bond in such form and amount and with such sureties as shall be
determined by the Directors.
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If the Treasurer is absent or unavailable, any Assistant Treasurer
shall have the duties and powers of Treasurer and shall have such further duties
and powers as the Directors shall from time to time determine.
Section 5.4 Clerk and Assistant Clerk
----------- -------------------------
If the Corporation shall not have a resident agent appointed pursuant
to law, the Clerk shall be a resident of the Commonwealth of Massachusetts. The
Clerk shall record all proceedings of the stockholders in a book to be kept
therefor. In case a Secretary of the Board is not elected, the Clerk shall also
record all proceedings of the Directors in a book to be kept therefor.
If the Corporation shall not have a transfer agent, the Clerk shall
also keep or cause to be kept the stock and transfer records of the Corporation,
which shall contain the names of all stockholders and the record address and the
amount of stock held by each.
If the Clerk is absent or unavailable, any Assistant Clerk shall have
the duties and powers of the Clerk and shall have such further duties and powers
as the Directors shall from time to time determine.
Section 5.5 Secretary of the Board and Assistant Secretary
----------- ----------------------------------------------
If a Secretary of the Board is elected, he shall record all
proceedings of the Directors in a book to be kept therefor.
If the Secretary of the Board is absent or unavailable, any Assistant
Secretary shall have the duties and powers of the Secretary and shall have such
further duties and powers as the Directors shall from time to time determine.
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<PAGE>
If no Secretary or Assistant Secretary has been elected, or if, having
been elected, no Secretary or Assistant Secretary is present at a meeting of the
Directors, the Clerk or an Assistant Clerk shall record the proceedings of the
Directors.
Section 5.6 Temporary Clerk and Temporary Secretary
----------- ---------------------------------------
If no Clerk or Assistant Clerk shall be present at any meeting of
stockholders, or if no Secretary, Assistant Secretary, Clerk or Assistant Clerk
shall be present at any meeting of the Directors, the person presiding at the
meeting shall designate a Temporary Clerk or Secretary to perform the duties of
Clerk or Secretary.
Section 5.7 Other Powers and Duties
----------- -----------------------
Each officer shall, subject to these By-Laws and to the control and
direction of the Directors, have in addition to the duties and powers
specifically set forth in these By-Laws, such duties and powers specifically set
forth in these By-Laws, such duties and powers as are customarily incident to
his office and such additional duties and powers as the Directors may from time
to time determine.
ARTICLE 6
---------
Resignations, Removals and Vacancies
------------------------------------
Section 6.1 Resignations
----------- ------------
Any Director or officer may resign at any time by delivering his
resignation in writing to the President or the Clerk or to a meeting of the
Directors. Such resignation shall take effect at such time as is specified
therein, or if no such time is so specified, then upon delivery thereof to the
President or the Clerk or to a meeting of the Directors.
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Section 6.2 Removals
----------- --------
Directors, including Directors elected by the Directors to fill
vacancies in the Board, may be removed from office (a) with cause by vote of the
holders of a majority of the shares issued and outstanding and entitled to vote
generally in the election of Directors; (b) with or without cause by vote of the
holders of at least 80% of the votes entitled to be cast by the holders of all
shares of the Corporation entitled to vote generally in the election of
Directors, voting together as a single class; (c) with cause by vote of a
majority of the Directors then in office; or (d) without cause by vote of at
least 80% of the Directors then in office (including the Director to be removed
in calculating said percentage); provided that the Directors of a class elected
by a particular class of stockholders may be removed only by vote of the holders
of a majority of the shares of such class.
The Directors may terminate or modify the authority of any agent or
employee. The Directors may remove any officer from office with or without
assignment of cause by vote of a majority of the Directors then in office.
If cause is assigned for removal of any Director or officer, such
Director or officer may be removed only after a reasonable notice and
opportunity to be heard before the body proposing to remove him.
No Director or officer who resigns or is removed shall have any right
to any compensation as such Director or officer for any period following his
resignation or removal, or any right to damages on account of such removal
whether his compensation be by the month or by the year or otherwise; provided,
however, that the foregoing provision shall not prevent such Director or
14
<PAGE>
officer from obtaining damages for breach of any contract of employment legally
binding upon the Corporation.
Section 6.3 Vacancies
----------- ---------
Any vacancy in the Board of Directors, including a vacancy resulting
from an enlargement of the Board, may be filled by the Directors by vote of a
majority of the remaining Directors then in office, though less than a quorum,
or by the stockholders at a meeting called for the purpose provided that any
vacancy created by the stockholders may be filled by the stockholders at the
same meeting. Any Director elected in accordance with the preceding sentence
shall hold office for the remainder of the full term of the class of Directors
in which the new Directorship was created or the vacancy occurred and until such
Directors' successor shall have been elected and qualified or until he sooner
dies, resigns, is removed or becomes disqualified.
If the office of any officer becomes vacant, the Directors may choose
or appoint a successor by vote of a majority of the Directors present at the
meeting at which such choice or appointment is made.
Each such successor shall hold office for the unexpired term of his
predecessor and until his successor shall be chosen or appointed and qualified,
or until he sooner dies, resigns, is removed or becomes disqualified.
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ARTICLE 7
---------
Indemnification of Directors and Others
---------------------------------------
Section 7.1 Definitions
----------- -----------
For purposes of this Article 7:
(a) "Director/officer" means any person who is serving or has served
as a Director, officer, employee or other agent of the Corporation appointed or
elected by the Board of Directors or the stockholders of the Corporation, or who
is serving or has served at the request of the Corporation as a Director,
officer, trustee, principal, partner, employee or other agent of any other
corporation.
(b) "Proceeding" means any action, suit or proceeding, civil or
criminal, brought or threatened in or before any court, tribunal, administrative
or legislative body or agency.
(c) "Expense" means any fine or penalty, and any liability fixed by a
judgment, order, decree or award in a Proceeding and any professional fees and
other disbursements reasonably incurred in connection with a Proceeding.
Section 7.2 Right to Indemnification
----------- ------------------------
Except as limited by law or as provided in Sections 7.3 and 7.4 of
this Article 7, each Director/officer (and his heirs and personal
representatives) shall be indemnified by the Corporation against all Expenses
incurred by him in connection with each Proceeding in which he is involved as a
result of his serving or having served as a Director/officer.
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Section 7.3 Indemnification not Available
----------- -----------------------------
No indemnification shall be provided to a Director/officer with
respect to a Proceeding as to which it shall have been adjudicated that he did
not act in good faith in the reasonable belief that his action was in the best
interests of the Corporation.
Section 7.4 Compromise or Settlement
----------- ------------------------
In the event that a Proceeding is compromised or settled so as to
impose any liability or obligation on a Director/officer or upon the
Corporation, no indemnification shall be provided as to said Director/officer
with respect to such Proceeding if such Director/officer shall have been
adjudicated not to have acted in good faith in the reasonable belief that his
action was in the best interests of the Corporation.
Section 7.5 Advances
----------- --------
The Corporation shall pay sums on account of indemnification in
advance of a final disposition of a Proceeding, upon receipt of an undertaking
by the Director/officer to repay such sums if it is subsequently established
that he is not entitled to indemnification pursuant to Sections 7.3 and 7.4
hereof, which undertaking may be accepted without reference to the financial
ability of such person to make repayment.
Section 7.6 Not Exclusive
----------- -------------
Nothing in this Article 7 shall limit any lawful rights to
indemnification existing independently of this Article 7.
Section 7.7 Insurance
----------- ---------
The provisions of this Article 7 shall not limit the power of the
Board of Directors to authorize the purchase and maintenance of insurance on
behalf of any Director/officer against
17
<PAGE>
any Expense, whether or not the Corporation would have the power to indemnify
him against such Expense under this Article 7.
ARTICLE 8
---------
Stock
-----
Section 8.1 Stock Authorized
----------- ----------------
The total number of shares and the par value, if any, of each class of
stock which the Corporation is authorized to issue, and if more than one class
is authorized, the descriptions, preferences, voting powers, qualifications and
special and relative rights and privileges as to each class and any series
thereof, shall be as stated in the Articles of Organization.
Section 8.2 Issue of Authorized Unissued Capital Stock
----------- ------------------------------------------
Any unissued capital stock from time to time authorized under the
Articles of Organization and Amendments thereto may be issued by vote of the
Directors. No stock shall be issued unless the cash, so far as due, or the
property, services or expenses for which it was authorized to be issued, has
been actually received or incurred by, or conveyed or rendered to, the
Corporation, or is in its possession as surplus.
Section 8.3 Certificates of Stock
----------- ---------------------
Each stockholder shall be entitled to a certificate in such form as
may be prescribed from time to time by the Directors or stockholders, stating
the number and the class and the designation of the series, if any, of the
shares held by him. Such certificate shall be signed by the President or a Vice
President and by the Treasurer or an Assistant Treasurer. Such signatures may
be facsimiles if the certificate is signed by a transfer agent, or by a
registrar, other than a Director, officer or employee of the Corporation. In
case any officer who has signed or whose
18
<PAGE>
facsimile signature has been placed on such certificate shall have ceased to be
such officer before such certificate is issued, it may be issued by the
Corporation with the same effect as if he were such officer at the time of its
issue.
Every certificate issued by the Corporation for shares of stock at a
time when such shares are subject to any restrictions on transfer pursuant to
the Articles of Organization, the By-Laws or any agreement to which the
Corporation is a party shall have the restriction noted conspicuously on the
certificate and shall also set forth on the face or back of the certificate
either the full text of the restriction, or a statement of the existence of such
restriction and a statement that the Corporation will furnish a copy thereof to
the holder of such certificate upon written request and without charge. Every
stock certificate issued by the Corporation at a time when it is authorized to
issue more than one class or series of stock shall set forth upon the face or
back of the certificate either the full text of the preferences, voting powers,
qualifications and special and relative rights of the shares of each class and
series, if any, authorized to be issued, as set forth in the Articles of
Organization, or a statement of the existence of such preferences, powers,
qualifications and rights and a statement that the Corporation will furnish a
copy thereof to the holder of such certificate upon written request and without
charge.
Section 8.4 Replacement Certificate
----------- -----------------------
In case of the alleged loss or destruction or the mutilation of a
certificate of stock, a new certificate may be issued in place thereof, upon
such conditions as the Directors may determine.
Section 8.5 Transfers
----------- ---------
Subject to the restrictions, if any, imposed by the Articles of
Organization, the By-Laws or any agreement to which the Corporation is a party,
shares of stock shall be transferred on the
19
<PAGE>
books of the Corporation only by the surrender to the Corporation or its
transfer agent of the certificate representing such shares properly endorsed or
accompanied by a written assignment of such shares or by a written power of
attorney to sell, assign or transfer such shares, properly executed, with
necessary transfer stamps affixed, and with such proof that the endorsement,
assignment or power of attorney is genuine and effective as the Corporation or
its transfer agent may reasonably require. Except as may otherwise be required
by law, the Corporation shall be entitled to treat the record holder of stock as
shown on its books as the owner of such stock for all purposes, including the
payment of dividends and the right to vote with respect thereto, regardless of
any transfer, pledge or other disposition of such stock, until the shares have
been transferred on the books of the Corporation in accordance with the
requirements of these By-Laws. It shall be the duty of each stockholder to
notify the Corporation of his post office address.
Section 8.6 Record Date
----------- -----------
The Directors may fix in advance a time, which shall be not more than
sixty (60) days before the date of any meeting of stockholders or the date for
the payment of any dividend or the making of any distribution to stockholders or
the last day on which the consent or dissent of stockholders may be effectively
expressed for any purpose, as the record date for determining the stockholders
having the right to notice of and to vote at such meeting and any adjournment
thereof or the right to receive such dividend or distribution or the right to
give such consent or dissent, and in such case only stockholders of record on
such date shall have such right, notwithstanding any transfer of stock on the
books of the Corporation after the record date; or
20
<PAGE>
without fixing such record date the Directors may for any of such purposes close
the transfer books for all or any part of such period.
If no record date is fixed and the transfer books are not closed:
(1) The record date for determining stockholders having the right
to notice of or to vote at a meeting of stockholders shall be at the
close of business on the day next preceding the day on which notice is
given.
(2) The record date for determining stockholders for any other
purpose shall be at the close of business on the day on which the
Board of Directors acts with respect thereto.
ARTICLE 9
---------
Miscellaneous Provisions
------------------------
Section 9.1 Execution of Papers
----------- -------------------
All deeds, leases, transfers, contracts, bonds, notes, releases,
checks, drafts and other obligations authorized to be executed on behalf of the
Corporation shall be signed by the President or the Treasurer except as the
Directors may generally or in particular cases otherwise determine.
Section 9.2 Voting of Securities
----------- --------------------
Except as the Directors may generally or in particular cases otherwise
determine, the President or the Treasurer may, on behalf of the Corporation (i)
waive Notice of any meeting of stockholders or shareholders of any other
corporation, or of any association, trust or firm, of which any securities are
held by this Corporation; (ii) appoint any person or persons to act as proxy or
attorney-in-fact for the Corporation, with or without substitution, at any such
meeting;
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<PAGE>
and (iii) execute instruments of Consent to stockholder or shareholder action
taken without a meeting.
Section 9.3 Corporate Seal
----------- --------------
The seal of the Corporation shall be a circular die with the name of
the Corporation, the word "Massachusetts" and the year of its incorporation cut
or engraved thereon, or shall be in such other form as the Board of Directors or
the stockholder may from time to time determine.
Section 9.4 Corporate Records
----------- -----------------
The original, or attested copies, of the Articles of Organization, By-
Laws, and the records of all meetings of incorporators and stockholders, and the
stock and transfer records, which shall contain the names of all stockholders
and the record address and the amount of stock held by each, shall be kept in
Massachusetts for inspection by the stockholders at the principal office of the
Corporation or at an office of the Clerk, or if the Corporation shall have a
transfer agent or a resident agent, at an office of either of them. Said
copies and records need not all be kept in the same office.
ARTICLE 10
----------
Amendments
----------
These By-Laws may be altered, amended or repealed or new by-laws
enacted by the affirmative vote of a majority of the entire Board of Directors
(if notice of the proposed alteration or amendment is contained in the Notice of
the meeting at which such vote is taken or if all Directors are present) or at
any regular meeting of the stockholders (or at any special meeting thereof duly
called for that purpose) by the affirmative vote of a majority of the shares
22
<PAGE>
represented and entitled to vote at such meeting (if notice of the proposed
alteration or amendment is contained in the Notice of such meeting).
Notwithstanding anything contained in the preceding paragraph of this
Article 10 to the contrary, either (i) the affirmative vote of the holders of at
least eighty (80%) percent of the votes entitled to be cast by the holders of
all shares of the Corporation entitled to vote generally in the election of
Directors, voting together as a single class, or (ii) the affirmative vote of a
majority of the entire Board of Directors with the concurring vote of a majority
of the Continuing Directors, voting separately and as a subclass of Directors,
shall be required to alter, amend or repeal or adopt any provision inconsistent
with, Section 3.1, Section 3.2, Section 3.6, Section 4.1 and this paragraph of
this Article 10. For purposes of this Article 10, the term "Continuing
Director" shall have the meaning ascribed to it in Article 6 of the Articles of
Organization of the Corporation.
ARTICLE 11
----------
Control Share Acquisitions
--------------------------
Section 11.1 Redemption of Acquired Shares
------------ -----------------------------
In the event of a control share acquisition to which Chapter 110D of
the General Laws of Massachusetts is applicable, the Corporation may, at the
option of the Corporation but without requiring the agreement of the person who
has made a control share acquisition, redeem all but not less than all shares
acquired in such control share acquisition, from such person for the fair value
of such shares if:
(i) No control acquisition statement has been delivered; or
23
<PAGE>
(ii) A control acquisition statement has been delivered and
voting rights were not authorized for such shares by the stockholders
in accordance with the provisions of Section 5 of Chapter 110D of the
General Laws of Massachusetts
Notice of such redemption shall be given by the Corporation not later
than sixty (60) days after the date on which the stockholders voted not to
authorize voting rights for the shares to be redeemed, or if no control share
acquisition statement has been delivered prior to the date on which notice of
redemption is given by the Corporation, sixty (60) days after the first day on
which the Board of Directors of the Corporation has actual knowledge of such
control share acquisition.
For purposes of this Section 11.1, fair value shall be determined as
of the date on which the stockholders voted not to authorize voting rights for
the shares to be redeemed, or, if no control acquisition statement is delivered,
as of the date on which the Corporation determines to make a redemption under
this Section 11.1. Such value shall be determined in accordance with procedures
adopted by the Board of Directors and without regard to the effect of the denial
of voting rights under the provisions of Section 5 of Chapter 110D of the
General Laws of Massachusetts.
Section 11.2 No Appraisal Rights
------------ -------------------
Unless otherwise provided by the Articles of Organization, no
shareholder shall be entitled to demand or receive payment for his stock nor to
an appraisal in accordance with the provisions of Section 86-98, inclusive, of
Chapter 156B of the General Laws of Massachusetts in connection with the
authorization of voting rights for shares acquired by another shareholder in a
24
<PAGE>
control share acquisition in accordance with the provisions of Section 5 of
Chapter 110D of the General Laws of Massachusetts.
25
<PAGE>
<TABLE>
<CAPTION>
[X] PLEASE MARK VOTES AS IN THIS EXAMPLE
<S> <C> <C>
With-
1. Election of Director: For hold 2. In their discretion, the proxies are authorized to vote upon
such business as may properly come before the meeting.
Nominees: Joseph F. Trustey [_] [_] For With-
hold
With-
2. Amendment of Bylaws For hold [_] [_]
[_] [_]
</TABLE>
<TABLE>
<CAPTION>
RECORD DATE SHARES:
<S> <C> <C>
I plan to attend in person [_]
I do not plan to attend in person [_]
Please be sure to sign and date this Proxy. Date:_______ Mark box at right if comments or address change
have been noted on the reverse side of this card [_]
Shareholder sign here______________Co-owner sign here______________
</TABLE>
DETACH CARD
SUBURBAN OSTOMY SUPPLY CO., INC.
DEAR STOCKHOLDER:
PLEASE TAKE NOTE OF THE IMPORTANT INFORMATION ENCLOSED with this Proxy
ballot. There are some issues related to the management and operation of
your Company that require your attention and approval. These are
discussed in detail in the enclosed proxy materials.
Your vote counts, and you are strongly encouraged to exercise your right to
vote your shares.
Please mark the boxes on the proxy card to indicate how your shares shall
be voted. Then sign the card, detach it and return your proxy vote in the
enclosed postage paid envelope.
Your vote must be received prior to the 1997 Special Meeting in Lieu of
Annual Meeting of Stockholders, February 19, 1997.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
Suburban Ostomy Supply Co., Inc.
<PAGE>
PROXY PROXY
SUBURBAN OSTOMY SUPPLY CO., INC.
1997 SPECIAL MEETING IN LIEU OF ANNUAL MEETING OF STOCKHOLDERS
FEBRUARY 19, 19967
The undersigned hereby appoints Donald H. Benovitz and Stephen N. Aschettino,
and each of them, with full power and substitution, proxies to represent the
undersigned at the 1997 Special Meeting of Stockholders of Suburban Ostomy
Supply Co., Inc. to be held on February 19, 1997 at 10:00 a.m., at the offices
of Hutchins, Wheeler & Dittmar, 101 Federal Street, Boston, Massachusetts, and
at any adjournment or adjournments thereof, to vote in the name and place of the
undersigned, with all powers which the undersigned would possess if personally
present, all the shares of SUBURBAN OSTOMY SUPPLY CO., INC. standing in the name
of the undersigned upon such business as may properly come before the meeting.
THIS PROXY IS SOLICITED ON BEHALF OF DIRECTORS. THE BOARD RECOMMENDS AN
AFFIRMATIVE VOTE ON ALL PROPOSALS SPECIFIED. SHARES WILL BE VOTED AS SPECIFIED.
IF NO SPECIFICATION IS MADE, THE SHARES REPRESENTED WILL BE VOTED FOR THE
ELECTION OF THE DIRECTORS AS SET FORTH IN THE PROXY STATEMENT.
PLEASE VOTE, DATE, AND SIGN ON OTHER SIDE AND RETURN PROMPTLY IN ENCLOSED
ENVELOPE
Please sign exactly as your name(s) appear(s) on the Proxy. When shares are
held by joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other authorized
officer. If a partnership, please sign in partnership name by authorized person
HAS YOUR ADDRESS CHANGED? DO YOU HAVE COMMENTS?
__________________________ _____________________________
__________________________ _____________________________
__________________________ _____________________________
