<PAGE> 1
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 Section 240.14a-11(c) or Section
240.14a-12
INDEX, 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: N/A
2. Aggregate number of securities to which transaction applies:
N/A
3. Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11: N/A
4. Proposed maximum aggregate value of transaction: N/A
5. Total fee paid: N/A
[ ] 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: N/A
2. Form, Schedule or Registration Statement No.: N/A
3. Filing Party: N/A
4. Date Filed: N/A
<PAGE> 2
INDEX, INC.
580 WESTLAKE PARK BOULEVARD, SUITE 1100
HOUSTON, TEXAS 77079
---------------------
CONSENT STATEMENT
---------------------
April 30, 1997
This Consent Statement is being furnished to the holders of Common Stock,
par value $.01 per share ("Common Stock"), Series A Preferred Stock, par value
$1.00 per share ("Series A Preferred Stock"), and Series B Preferred Stock, par
value $1.00 per share ("Series B Preferred Stock"), of Index, Inc., a Texas
corporation (the "Company"), in connection with a solicitation of consents by
the Board of Directors of the Company for adoption of amendments to the Restated
Articles of Incorporation of the Company (the "Articles of Incorporation"), that
would effect (i) a change in the Company's name (the "Name Change Amendment")
and (ii) a two-to-one reverse split of the issued and outstanding shares of
Common Stock (the "Reverse Stock Split Amendment").
Adoption of each of the Name Change Amendment and the Reverse Stock Split
Amendment requires the affirmative consent of the holders of a majority of the
votes of the shares of Common Stock, Series A Preferred Stock and Series B
Preferred Stock, voting as a single class, outstanding as of April 21, 1997 (the
"Record Date"). As of the Record Date, the Company had outstanding 12,079,975
shares of Common Stock, 3,366 shares of Series A Preferred Stock and 16,800
shares of Series B Preferred Stock. Each outstanding share of Common Stock will
be entitled to one vote and each outstanding share of Series A Preferred Stock
and Series B Preferred Stock will be entitled to one-tenth of a vote on each of
the Name Change Amendment and the Reverse Stock Split Amendment. See "Voting".
A shareholder who executes and returns a consent may revoke it at any time
before the Company's receipt of the requisite number of consents for adoption of
the Name Change Amendment or the Reverse Stock Split Amendment by returning a
consent bearing a later date or by giving written notice of revocation to the
Secretary of the Company at the address set forth above prior to the Company's
receipt of the requisite consents for adoption of the effective date of the Name
Change Amendment or the Reverse Stock Split Amendment, as applicable. No consent
will be effective unless the Company has received the requisite consents from
the holders of Common Stock, Series A Preferred Stock and Series B Preferred
Stock as of the Record Date for adoption of the Name Change Amendment or the
Reverse Stock Split Amendment, as the case may be.
This Consent Statement and the enclosed forms of consent will be mailed on
or about April 30, 1997 to shareholders of record on the Record Date. The
Company will bear the cost of solicitation of consents by the Board of
Directors, including charges and expenses of brokerage firms, banks and others
for forwarding solicitation material to beneficial owners. In addition to the
use of the mails, consents may be solicited by officers and employees of the
Company, without remuneration, by personal contact, telephone or telecopy.
Upon filing with and acceptance by the Secretary of State of Texas, each of
the Name Change Amendment and the Reverse Stock Split Amendment will become
effective. Such filing will be made as promptly as practicable after the date
upon which requisite consents for adoption of each of the Name Change Amendment
and the Reverse Stock Split Amendment from the holders of Common Stock, Series A
Preferred Stock and Series B Preferred Stock are received. To assure that each
of the Name Change Amendment and the Reverse Stock Split Amendment is adopted
and made effective in a timely manner, the Company requests that it receive
executed consents no later than May 12, 1997. If the Company has not received
the requisite consents for adoption of each of the Name Change Amendment and the
Reverse Stock Split Amendment by May 12, 1997, it will accept consents received
after such date and consents received prior to such date will be valid, subject
to the right of the shareholder executing such consent to revoke such consent
and subject to applicable law.
<PAGE> 3
PURPOSE AND DESCRIPTION OF AMENDMENTS
The Board of Directors is proposing the Name Change Amendment to change the
name of the Company to "DXP Enterprises, Inc." and the Reverse Stock Split
Amendment to effect a reclassification of the Common Stock by converting each
outstanding share of Common Stock to one-half of one share.
NAME CHANGE AMENDMENT
Summary and Purpose. The purpose of the name change is to provide the
Company with a more distinctive name. The Company was incorporated under the
name of Index, Inc., which the Board of Directors believes does not distinguish
the Company from many other corporations that, in whole or part, have the same
name. The Board of Directors is proposing the Amendment to change the Company's
name to DXP Enterprises, Inc., which the Company believes is more distinctive
and better reflects its business.
The text of the Name Change Amendment is set forth in the proposed
resolutions contained in the Name Change Consent that accompanies this Consent
Statement.
The Board of Directors has approved, and directed that the same be
presented to the shareholders of the Company for their approval, the Name Change
Amendment.
Description and Effect. The proposed name change would be effected through
the Name Change Amendment, which would become effective upon filing with and
acceptance by the Secretary of State of Texas. The text of the Name Change
Amendment is set forth in the resolutions contained in the Name Change Consent
that accompanies this Consent Statement and incorporated by reference herein.
Upon effectiveness of the Name Change Amendment, the Company's name would
be "DXP Enterprises, Inc."
THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE NAME CHANGE AMENDMENT
AND RECOMMENDS THAT SHAREHOLDERS EXECUTE AND DELIVER A NAME CHANGE CONSENT FOR
ADOPTION OF THE NAME CHANGE AMENDMENT.
REVERSE STOCK SPLIT AMENDMENT
Summary and Purpose. On December 4, 1996, the Company effected a
reorganization of its current wholly-owned subsidiary, SEPCO Industries, Inc.
("Sepco"), and a merger of one of its wholly-owned subsidiaries with and into
Newman Communications Corporation ("Newman"). In connection with the
reorganization and merger, the former shareholders of Sepco and Newman received
the right to exchange their certificates formerly representing shares of common
stock of Sepco and Newman, respectively, for an aggregate of 15,986,394 shares
of Common Stock and the Company qualified the Common Stock for trading on the
OTC Bulletin Board of the National Association of Securities Dealers, Inc.
Although the Company achieved its goal of establishing a public market for the
Common Stock, the Common Stock has been trading at a price that the Company
believes is detrimental to future expansion, financing and securing a listing of
the Common Stock on the Nasdaq SmallCap Market. The Company currently is
considering an acquisition program in which all or a part of the purchase price
for businesses to be acquired may be paid in shares of Common Stock. While there
can be no assurance that any acquisitions will be consummated or as to the terms
or timing thereof or that the Common Stock will be approved for listing on the
Nasdaq SmallCap Market, critical steps in the Company's efforts in these regards
are reducing the total number of outstanding shares of Common Stock to a level
that is comparable to other public companies of similar size and nature and
achieving the minimum listing qualifications for the Nasdaq SmallCap Market.
The text of the Reverse Stock Split Amendment is set forth in the proposed
resolutions contained in the Reverse Stock Split Consent that accompanies this
Consent Statement.
In furtherance of this goal, the Board of Directors has approved, and
directed that the same be presented to the shareholders of the Company for their
approval, the Reverse Stock Split Amendment, which would effect a two-to-one
reverse stock split. The Reverse Stock Split Amendment would also authorize the
purchase by the Company of fractional shares resulting from the reverse stock
split.
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<PAGE> 4
The proposed reverse stock split would be effected through the Reverse
Stock Split Amendment, which would become effective upon filing with and
acceptance by the Secretary of State of Texas. The text of the Reverse Stock
Split Amendment and the procedures for settling fractional share interests are
set forth in the resolutions contained in the Reverse Stock Split Consent that
accompanies this Consent Statement and incorporated by reference herein.
Description and Effect. The Articles of Incorporation currently authorize
the issuance of 110,000,000 shares of capital stock, consisting of 100,000,000
shares of Common Stock, and 10,000,000 shares of preferred stock, $1.00 par
value per share, of which 1,000,000 have been designated Series A Preferred
Stock and 1,000,000 have been designated Series B Preferred Stock. At April 21,
1997, the Company had outstanding 12,079,975 shares of Common Stock, 3,366
shares of Series A Preferred Stock and 16,800 shares of Series B Preferred
Stock. In addition, as of such date, the Company had reserved 7,278,400 shares
of Common Stock for issuance upon conversion or exercise of various outstanding
securities of the Company and approximately 3,900,000 shares of Common Stock
reserved for issuance to the former shareholders of Sepco and Newman who have
not yet surrendered their certificates formerly representing shares of common
stock of Sepco and Newman.
Upon effectiveness of the Reverse Stock Split Amendment, one new share of
Common Stock will be exchanged for every two shares of Common Stock outstanding
as of the date on which the Reverse Stock Split Amendment is filed with the
Secretary of State of Texas (the "Effective Date"). Based on information as of
the Record Date, it is anticipated that the number of shares of Common Stock
that would be outstanding on the Effective Date is approximately 6,039,987. In
addition, it is expected that 5,551,597 shares of Common Stock will be reserved
for issuance upon the conversion or exercise of various of the Company's other
outstanding securities (convertible preferred stock and options), and
approximately 2 million shares of Common Stock will be reserved for issuance to
remaining holders of certificates formerly representing shares of common stock
of Sepco and Newman, leaving a total of approximately 86.4 million shares of
Common Stock available for future issuances.
No fractional shares of new Common Stock will be issued for any fractional
new share interest. Rather, each shareholder who would otherwise receive a
fractional new share of Common Stock as a result of the Amendment will receive
an amount of cash equal to the average of the closing sale price of a share of
Common Stock on the OTC Bulletin Board during the 20 trading days immediately
preceding the Effective Date multiplied by the number of shares of Common Stock
held by such holder that would otherwise have been exchanged for such fractional
interest. Because the price of the Common Stock fluctuates, the amount to be
paid for fractional shares cannot be determined until such date and may be
greater or less than the price on the date that any shareholder executes his
consent. It currently is estimated that the cost to the Company of purchasing
fractional shares will be not more than $2,400.
If the Reverse Stock Split Amendment is approved, the Company will notify
shareholders of the filing of the Reverse Stock Split Amendment with the
Secretary of State of Texas and will furnish shareholders of record as of the
close of business on the Effective Date with a Letter of Transmittal for use in
exchanging certificates. The shareholders of the Company, promptly after the
Reverse Stock Split Amendment becomes effective, will be required to mail their
certificates representing their shares of Common Stock of the Company to the
Exchange Agent named in the Letter of Transmittal so that a new stock
certificate giving effect to the reverse stock split (and the name change, if
approved) may be issued and proceeds of the settlement of fractional interests
delivered promptly.
It is not expected that the interests of any shareholders will be
eliminated pursuant to the reverse stock split. Fractional interests settled by
the Company are expected to aggregate approximately 50 shares, or less than one
percent, of those outstanding as of the Record Date. Shares no longer
outstanding as a result of the fractional share settlement procedure will be
returned to authorized but unissued shares of Common Stock.
Certain Considerations. After giving effect to the settlement of fractional
shares of Common Stock, there will be no material differences between those
securities outstanding prior to the Reverse Stock Split Amendment and those to
be outstanding after the Reverse Stock Split Amendment is effected. The Reverse
Stock Split Amendment will, however, result in an adjustment to the conversion
ratio of the Series B
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<PAGE> 5
Preferred Stock. Specifically, pursuant to the Articles of Incorporation and as
reflected in the Amendment, the conversion ratio of the Series B Preferred Stock
will be adjusted so that such shares will be convertible into such number of
shares of Common Stock that a holder of such shares of Series B Preferred Stock
would have been entitled to receive in the reclassification if such shares of
Series B Preferred Stock were to have been converted into Common Stock
immediately prior to the reclassification. Pursuant to such adjustment, upon
effectiveness of the Amendment, each share of Series B Preferred Stock will be
convertible into 56 shares of Common Stock. Similar adjustments will be made to
the exercise provisions of the Company's outstanding options.
The Reverse Stock Split Amendment also will have the effect of reducing the
number of shares held by shareholders who currently hold less than 200 shares of
Common Stock to a number less than 100. Because selling costs for shares in lots
of less than 100 are typically higher on a per share basis than for lots of 100
shares or more, the amendment could result in increased selling costs to such
shareholders. In addition, because lots of less than 100 shares are often
required to be bundled with other shares for resale, shareholders who hold less
than 100 shares after the effectiveness of the Reverse Stock Split Amendment may
have a more difficult time in disposing of their shares of Common Stock.
In the reverse stock split, cash proceeds received from the settlement of
fractional shares may result in a shareholder realizing taxable gain or loss to
the extent of the difference between such proceeds and the cost or other basis
applicable to the fractional shares. No officer, director, associate or
affiliate of the Company is expected to derive any material benefit from the
reverse stock split other than the benefits that might be enjoyed by any other
person holding the same number of shares.
THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE REVERSE STOCK SPLIT
AMENDMENT, AND THE REVERSE STOCK SPLIT CONTEMPLATED THEREBY, AND RECOMMENDS THAT
SHAREHOLDERS EXECUTE AND DELIVER A REVERSE STOCK SPLIT CONSENT FOR ADOPTION OF
THE REVERSE STOCK SPLIT AMENDMENT.
VOTING
The affirmative consent of the holders of a majority of the votes of the
shares of Common Stock, Series A Preferred Stock and Series B Preferred Stock
outstanding as of the Record Date, voting as a single class, is necessary for
approval of each of the Name Change Amendment and the Reverse Stock Split
Amendment. UNLESS OTHERWISE PROVIDED, CONSENTS THAT ARE RECEIVED WILL BE
CONSIDERED CONSENTS FOR ADOPTION OF EACH OF THE NAME CHANGE AMENDMENT AND THE
REVERSE STOCK SPLIT AMENDMENT, AS APPLICABLE.
David R. Little, a director and officer of the Company, and Gary A.
Allcorn, an officer of the Company, have advised the Company that they intend to
execute consents for adoption of the Name Change Amendment and the Reverse Stock
Split Amendment with respect to the 8,315,452 shares of Common Stock and 15,000
shares of Series B Preferred Stock beneficially owned by them. See "Security
Ownership of Certain Beneficial Owners and Management". Except as otherwise set
forth in this Consent Statement, no other person has any substantial interest in
the adoption of the Name Change Amendment or the Reverse Stock Split Amendment.
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<PAGE> 6
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of the Record Date, with
respect to (i) persons known to the Company to be beneficial holders of five
percent or more of either the outstanding shares of Common Stock, Series A
Preferred Stock or Series B Preferred Stock, (ii) named executive officers and
directors of the Company and (iii) all executive officers and directors of the
Company as a group.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP(2)
-------------------------------------------------------
SERIES A SERIES B
NAME AND ADDRESS OF COMMON PREFERRED PREFERRED
BENEFICIAL OWNER(1) STOCK % STOCK % STOCK %
------------------- ---------- ---- --------- ---- --------- ----
<S> <C> <C> <C> <C> <C> <C>
Gary A. Allcorn(3)......................... 8,988,723 50.9 -- -- 15,000 89.3
580 Westlake Park Blvd., Suite 1100
Houston, Texas 77079
David R. Little(4)......................... 4,286,729 22.4 -- -- -- --
580 Westlake Park Blvd., Suite 1100
Houston, Texas 77079
Bryan H. Wimberly(5)....................... 1,673,013 10.4 -- -- -- --
580 Westlake Park Blvd., Suite 1100
Houston, Texas 77079
Jerry J. Jones(6).......................... 1,439,963 8.3 -- -- -- --
580 Westlake Park Blvd., Suite 1100
Houston, Texas 77079
SEPCO Industries, Inc. Employee............ 3,825,194 24.1 1,870 55.5 -- --
Stock Ownership Plan
c/o River Oaks Trust Company, Trustee
2001 Kirby
Houston, Texas 77210
Denny Lawrence(7).......................... 201,600 1.2 -- -- 1,800 10.7
Route 1, Box 265-B
Farmerville, Louisiana 71241
Nelvin F. Luke(8).......................... 229,691 1.4 374 11.1 -- --
225 Newman Avenue
Jefferson, Louisiana 70121
Norman O. Schenk(9)........................ 160,050 1.0 374 11.1 -- --
4415 Waynesboro
Houston, Texas 77035
Donald E. Tefertiller(10).................. 186,168 1.2 374 11.1 -- --
4425 Congressional Drive
Corpus Christi, Texas 78413
Ernest E. Herbert(11)...................... 94,140 * 187 5.6 -- --
57 Coronado Avenue
Kenner, Louisiana
Charles E. Jacob(12)....................... 95,769 * 187 5.6 -- --
P.O. Box 57
Maypearl, Texas 76064
Thomas V. Orr.............................. 16,000 * -- -- -- --
Director(13)
Kenneth H. Miller.......................... 16,000 * -- -- -- --
Director(14)
Cletus Davis............................... 16,000 * -- -- -- --
Director(15)
All executive officers, directors and
nominees as a group (7 persons)(16)...... 16,436,428 72.9 -- -- 15,000 89.3
</TABLE>
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<PAGE> 7
- ---------------
* Less than 1%.
(1) Each beneficial owner's percentage ownership is determined by assuming that
options, warrants and other convertible securities that are held by such
person (but not those held by any other person) and that are exercisable or
convertible within 60 days have been exercised or converted. An aggregate
of approximately 83,000 shares of Common Stock issuable upon surrender of
certificates formerly representing shares of capital stock of Sepco and
Newman were not included in the determination of each beneficial owner's
percentage ownership. The SEPCO Industries, Inc. Employee Stock Ownership
Plan (the "Sepco ESOP") has not yet surrendered its certificates formerly
representing shares of Sepco capital stock; however, the percentage of
beneficial ownership of each person named in the table above was determined
by assuming that an aggregate of 3,825,194 shares of Common Stock issuable
upon surrender of such certificates had been issued and outstanding as of
the Record Date.
(2) Unless otherwise noted, the Company believes that all persons named in the
above table have sole voting and investment power with respect to all
shares of Common Stock, Series A Preferred Stock and Series B Preferred
Stock beneficially owned by them.
(3) Includes 6,851,184 shares of Common Stock and 15,000 shares of Series B
Preferred Stock owned by the Kacey Joyce, Andrea Rae and Nicholas David
Little 1988 Trust (the "Trusts") for which Mr. Allcorn serves as trustee.
Because of this relationship, Mr. Allcorn may be deemed to the beneficial
owner of such shares and the 1,680,000 shares of Common Stock issuable upon
conversion of the 15,000 shares of Series B Preferred Stock held by the
Trusts. Also includes 80,000 shares of Common Stock issuable upon exercise
of an option and 28,739 shares of Common Stock held of record by the Sepco
ESOP, for Mr. Allcorn's account.
(4) Includes 3,200,000 shares of Common Stock issuable to Mr. Little upon
exercise of an option and 161,829 shares of Common Stock held of record by
the Sepco ESOP for Mr. Little's account.
(5) Includes 201,600 shares of Common Stock owned of record by a trust of which
Mr. Wimberly is one-third beneficiary and 195,200 shares of Common Stock
issuable upon exercise of an option granted to Mr. Wimberly. Also includes
34,613 shares of Common Stock held by the Sepco ESOP for Mr. Wimberly's
account.
(6) Includes 1,436,800 shares of Common Stock issuable upon exercise of an
option granted to Mr. Jones and 3,163 shares of Common Stock held by the
Sepco ESOP for Mr. Jones's account.
(7) Includes 201,600 shares of Common Stock issuable upon conversion of shares
of Series B Preferred Stock.
(8) Includes 16,000 shares of Common Stock issuable upon exercise of an option
and 90,491 shares of Common Stock held of record by the Sepco ESOP for Mr.
Luke's account.
(9) Includes 36,580 shares of Common Stock held of record by the Sepco ESOP for
Mr. Schenk's account.
(10) Includes 16,000 shares of Common Stock issuable upon exercise of an option
and 46,968 shares of Common Stock held of record by the Sepco ESOP for Mr.
Tefertiller's account.
(11) Includes 47,140 shares of Common Stock held of record by the Sepco ESOP for
Mr. Herbert's account.
(12) Includes 33,369 shares of Common Stock held of record by the Sepco ESOP for
Mr. Jacob's account.
(13) Includes 16,000 shares of Common Stock issuable upon exercise of an option.
(14) Includes 16,000 shares of Common Stock issuable upon exercise of an option.
(15) Includes 16,000 shares of Common Stock issuable upon exercise of an option.
(16) See notes (3) through (6) and (13) through (15).
By Order of the Board of Directors,
/s/ GARY A. ALLCORN
Gary A. Allcorn
Secretary
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<PAGE> 8
NAME CHANGE CONSENT
INDEX, INC.
CONSENT OF SHAREHOLDER
IN LIEU OF SPECIAL MEETING
Pursuant to Article 9.10 of the Texas Business Corporation Act, the
undersigned, being the holder of the number of shares of capital stock of Index,
Inc., a Texas corporation (the "Company"), set forth opposite his name below and
in lieu of a special meeting of the shareholders, does hereby adopt the
following resolutions:
RESOLVED, that the Board of Directors of the Company is hereby
authorized to cause to be filed Articles of Amendment to the Company's
Restated Articles of Incorporation amending Article One as follows:
"ARTICLE ONE
The name of the corporation is DXP Enterprises, Inc."
RESOLVED, that the Board of Directors of the Company is hereby
authorized and directed to adopt any or all changes to the bylaws of the
Company, and the officers of the Company are hereby authorized and directed
to do all things and execute and file all documents, including amendments
to the Company's Restated Articles of Incorporation, which in their sole
judgment are deemed to be necessary and proper to carry out the intent of
the foregoing resolutions.
Executed this day of , 1997.
SHAREHOLDER
------------------------------------
(Signature)
------------------------------------
(Printed Name) (Number of Shares)
* IMPORTANT: The signature on this Consent must correspond with the name(s) as
written on the face of the certificate(s) representing the shares of stock of
Index, Inc. held by such stockholder. When signing as trustee, executor,
attorney or guardian, please give the full title as it appears on the
certificate(s).
<PAGE> 9
REVERSE STOCK SPLIT CONSENT
INDEX, INC.
CONSENT OF SHAREHOLDER
IN LIEU OF SPECIAL MEETING
Pursuant to Article 9.10 of the Texas Business Corporation Act, the
undersigned, being the holder of the number of shares of capital stock of Index,
Inc., a Texas corporation (the "Company"), set forth opposite his name below and
in lieu of a special meeting of the shareholders, does hereby adopt the
following resolutions:
RESOLVED, that the Board of Directors of the Company is hereby
authorized to cause to be filed Articles of Amendment to the Company's
Restated Articles of Incorporation amending the first paragraph and
paragraph (B)(3)(d)(i) of Article IV as follows:
"ARTICLE IV
Capital Stock
The total number of shares of stock of all classes which the
Corporation shall have the authority to issue is 110,000,000, of which
100,000,000 shares of the par value $.01 each shall be designated common
stock ("Common Stock") and 10,000,000 shares of the par value of $1.00
each shall be designated serial preferred stock ("Preferred Stock").
At the effective time of this amendment, each share of Common Stock
issued and outstanding immediately prior to the effective time shall
automatically be changed and converted, without any action on the part
of the holder thereof, into one-half of a share of Common Stock and, in
lieu of fractional interests in shares of Common Stock of the
Corporation, each holder whose aggregate holdings of shares of Common
Stock prior to the effective time of this amendment amounted to a number
not evenly divisible by two, shall be entitled to receive for such
fractional interest, and at the effective time of this amendment any
such fractional interest in shares of Common Stock of the Corporation
shall be converted into the right to receive, upon the surrender of the
stock certificates formerly representing shares of Common Stock of the
Corporation, an amount in cash equal to the average closing price per
share for the shares of the Common Stock on the OTC Bulletin Board of
the National Association of Securities Dealers, Inc. (the "NASD"), as
reported by the NASD, for the 20 trading days immediately preceding the
date on which this amendment becomes effective.
A statement of all of the powers, preferences and rights, and the
qualifications, limitations or restrictions thereof in respect of the
Common Stock and the Preferred Stock is as follows:"
"(i) At any time prior to the redemption of any share of Series
B Preferred Stock, the holder of such shares of Series B Preferred
Stock shall have the right to convert such share into 56 shares of
Common Stock. The right to receive the converted shares requires
delivery to the office of the Corporation or its transfer agent of
the shareholder's written notice stating the number of shares the
shareholder is electing to convert. Said notice shall be accompanied
by the surrender of the Series B Preferred Stock certificate or
certificates, duly endorsed to the Corporation. The date of
conversion shall be the date of receipt by the Corporation or its
transfer agent of the notice and the duly endorsed certificate or
certificates."
RESOLVED, that the Board of Directors of the Company is hereby
authorized to implement the following procedures in connection with the
reclassification of the Company's Common Stock, $.01 par value per share
("Old Stock"), from the number of shares issued and outstanding immediately
prior to the effectiveness of the amendment referred to in the foregoing
resolutions to the number of issued and outstanding shares of Common Stock,
$.01 par value per share ("New Stock") that will result from such
amendment:
<PAGE> 10
1. Immediately upon effectiveness of the amendment to the Company's
Restated Articles of Incorporation authorizing the reverse stock split,
every two shares of Old Stock outstanding shall be converted into one share
of fully-paid and non-assessable New Stock, subject to the required
settlement of fractional shares. The Company shall issue one share of New
Stock for every two shares of Old Stock outstanding, and shall pay cash in
lieu of any fraction of a New Share which any shareholder would otherwise
receive. The settlement amount for such fractional shares shall be based
upon the average closing price per share for the shares of the Old Stock on
the OTC Bulletin Board of the National Association of Securities Dealers,
Inc. (the "NASD"), as reported by the NASD, for the 20 trading days
immediately preceding the date of the filling of the amendment. From and
after the date the amendment becomes effective, certificates representing
shares of Old Stock shall be deemed to represent only the right to receive
shares of New Stock and cash in lieu of any fractional share of New Stock
to which an individual shareholder would be entitled.
2. Shareholders and the Company (except with respect to treasury
shares) shall be required to deliver the certificates representing their
shares of the Old Stock outstanding immediately prior to the time the
amendment becomes effective, upon which the Company shall, through its
Exchange Agent, issue a certificate representing such shareholder's shares
of New Stock, and shall deliver a check for the amount necessary to pay
such shareholder for any fraction of a whole share of New Stock.
RESOLVED, that the Board of Directors of the Company is hereby
authorized to adopt a resolution adjusting the capital accounts of the
Company as, in their judgment, shall be in the best interests of the
Company in light of the adoption of the foregoing resolutions; and
RESOLVED, that the Board of Directors of the Company is hereby
authorized and directed to adopt any or all changes to the bylaws of the
Company, and the officers of the Company are hereby authorized and directed
to do all things and execute and file all documents, including amendments
to the Company's Restated Articles of Incorporation, which in their sole
judgment are deemed to be necessary and proper to carry out the intent of
the foregoing resolutions.
Executed this day of , 1997.
SHAREHOLDER
------------------------------------
(Signature)
------------------------------------
(Printed Name) (Number of Shares)
* IMPORTANT: The signature on this Consent must correspond with the name(s) as
written on the face of the certificate(s) representing the shares of stock of
Index, Inc. held by such stockholder. When signing as trustee, executor,
attorney or guardian, please give the full title as it appears on the
certificate(s).
2
