<PAGE> 1
As filed with the Securities and Exchange Commission on August 20, 1998
Registration No. 333-_______
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------------
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
DXP ENTERPRISES, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
TEXAS 76-0509661
(State or other jurisdiction of (I.R.S Employer Identification No.)
incorporation or organization)
580 WESTLAKE PARK BOULEVARD, SUITE
1100 77079
HOUSTON, TEXAS
(Address of Principal Executive Offices) (Zip Code)
</TABLE>
DXP ENTERPRISES, INC. LONG-TERM INCENTIVE PLAN, AS AMENDED
(Full title of the plan)
DAVID R. LITTLE
CHAIRMAN OF THE BOARD, PRESIDENT AND CHIEF EXECUTIVE OFFICER
DXP ENTERPRISES, INC.
580 WESTLAKE PARK BOULEVARD, SUITE 1100
HOUSTON, TEXAS 77079
(Name and address of agent for service)
281/531-4214
(Telephone number, including area code, of agent for service)
Copy to:
Fulbright & Jaworski L.L.P.
1301 McKinney, Suite 5100
Houston, Texas 77010
(713) 651-5151
Attention: Laura J. McMahon
----------------------------
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box.[x]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===============================================================================================================================
Title of securities to be Amount to be Proposed maximum Proposed maximum Amount of
registered registered offering price per share(1) aggregate offering price(1) registration fee
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par
value 330,000 $8.75 $2,887,500 $852
===============================================================================================================================
</TABLE>
(1) Estimated in accordance with Rule 457(c) and (h) solely for the
purpose of calculating the registration fee on the basis of the
average of the high and low prices of the Common Stock as reported by
the Nasdaq Stock Market on August 17, 1998.
(2) Includes an indeterminable number of shares of Common Stock issuable
as a result of the anti-dilution provisions of the DXP Enterprises,
Inc. Long-Term Incentive Plan, as amended.
================================================================================
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
a. The following documents are hereby incorporated by
reference in this Registration Statement:
1. The Annual Report on Form 10-K for the year
ended December 31, 1997 of DXP Enterprises, Inc., a Texas corporation (the
"Registrant"), filed February 26, 1998 with the Securities and Exchange
Commission (the "Commission").
2. The Quarterly Report on Form 10-Q for the
quarter ended March 31, 1998 of the Registrant, filed May 14, 1998 with the
Commission, as amended by Amendment No. 1 to Form 10-Q on Form 10-Q/A, filed
May 22, 1998 with the Commission.
3. The Quarterly Report on Form 10-Q for the
quarter ended June 30, 1998 of the Registrant, filed August 10, 1998 with the
Commission.
4. The description of the Registrant's common
stock, $.01 par value (the "Common Stock"), contained in a registration
statement on Form 8-A filed with the Commission on October 9, 1996, including
any amendment or report filed for the purpose of updating such description.
b. All documents filed by the Registrant pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as
amended, subsequent to the date of the filing hereof and prior to the filing of
a post-effective amendment which indicates that all securities offered have
been sold or which deregisters all securities then remaining unsold, shall be
deemed to be incorporated by reference in this Registration Statement and to be
a part hereof from the date of filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article 2.01-1 of the Texas Business Corporation Act ("TBCA")
provides that a corporation may indemnify any director or officer who was, is
or is threatened to be made a named defendant or respondent in a proceeding
because he is or was a director or officer, provided that the director or
officer (i) conducted himself in good faith, (ii) reasonably believed (a) in
the case of conduct in his official capacity, that his conduct was in the
corporation's best interests or (b) in all other cases, that his conduct was at
least not opposed to the corporations's best interests and (iii) in the case of
any criminal proceeding, had no reasonable cause to believe his conduct was
unlawful. Subject to certain exceptions, a director or officer may not be
indemnified if the person is found liable to the corporation or if the person
is found liable on the basis that he improperly received a personal benefit.
Under Texas law, reasonable expenses incurred by a director or officer may be
paid or reimbursed by the corporation in advance of a final disposition of the
proceeding after the corporation receives a written affirmation by the director
or officer of his good faith belief that he has met the standard of conduct
necessary for indemnification and a written undertaking by or on behalf of the
director or officer to repay the amount if it is ultimately determined that the
director or officer is not entitled to indemnification by the corporation.
Texas law requires a corporation to indemnify an officer or director against
reasonable expenses incurred in connection with a proceeding in which he is
named a defendant or respondent because he is or was a director or officer if
he is wholly successful in defense of the proceeding.
II-1
<PAGE> 3
Texas law also permits a corporation to purchase and maintain
insurance or another arrangement on behalf of any person who is or was a
director or officer against any liability asserted against him and incurred by
him in such a capacity or arising out of his status as such a person, whether
or not the corporation would have the power to indemnify him against that
liability under Article 2.02-1 of the TBCA.
The Company's Restated Articles of Incorporation, as amended,
and Bylaws provide for indemnification of its officers and directors, and the
advancement to them of expenses in connection with proceedings and claims, to
the fullest extent permitted under the TBCA. Such indemnification may be made
even though directors and officers would not otherwise be entitled to
indemnification under other provisions of the Company's Bylaws.
The above discussion of the TBCA and the Company's Restated
Articles of Incorporation, as amended and Bylaws is not intended to be
exhaustive and is qualified in its entirety by such statute, the Restated
Articles of Incorporation and Bylaws, respectively.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers or persons controlling
the Registrant pursuant to the foregoing provisions, the Registrant has been
informed that in the opinion of the Commission such indemnification is against
public policy as expressed in the Securities Act and therefore is
unenforceable.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
4.1 -- Restated Articles of Incorporation, as amended.
4.2 -- Bylaws (incorporated by reference to Exhibit
3.2 to the Registrant's Registration Statement
on Form S-4 (Reg. No. 333-10021), filed with
the Commission on August 12, 1996).
4.3 -- Form of Common Stock Certificate.
4.4 -- DXP Enterprises, Inc. Long Term Incentive Plan,
as amended.
5.1 -- Opinion of Fulbright & Jaworski L.L.P.
23.1 -- Consent of Arthur Andersen LLP.
23.2 -- Consent of Fulbright & Jaworski, L.L.P.
(included in Exhibit 5.1).
24.1 -- Powers of Attorney (contained on page II-4).
ITEM 9. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration
Statement:
(i) To include any prospectus required by Section
10 (a)(3) of the Securities Act of 1933, as amended
(the "Securities Act");
(ii) To reflect in the prospectus any facts or
events arising after the effective date of this
Registration Statement (or the most recent
post-effective amendment hereof) which, individually or
in the aggregate, represent a fundamental change in the
II-2
<PAGE> 4
information set forth in this Registration Statement.
Notwithstanding the foregoing, any increase or decrease
in volume of securities offered (if the total dollar
value of securities offered would not exceed that which
was registered) and any deviation from the low or high
end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no
more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of
Registration Fee" table in the effective registration
statement; and
(iii) To include any material information with
respect to the plan of distribution not previously
disclosed in this Registration Statement or any
material change to such information in this
Registration Statement;
Provided, however, that paragraphs (i) and (ii) do not
apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed with or furnished to the Securities and
Exchange Commission by the Registrant pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), that are incorporated by reference in this
Registration Statement.
(2) That, for the purpose of determining any liability
under the Securities Act, each such post-effective amendment
shall be deemed to be a new registration statement relating to
the securities offered herein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in this Registration Statement
shall be deemed to be a new registration statement relating to the securities
offered herein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
II-3
<PAGE> 5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Houston, State of Texas, on the 20th day of
August, 1998.
DXP Enterprises, Inc.
By: /s/ DAVID R. LITTLE
--------------------------------------
David R. Little
Chairman of the Board, President and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints David R. Little and Gary A. Allcorn, and
each of them, his true and lawful attorney-in-fact and agent, with full power
of substitution and resubstitution, for him and in his name, place and stead,
in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same
and all exhibits thereto, and all documents in connection therewith, with the
Securities and Exchange Commission, granting said attorney-in-fact and agent,
and each of them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done in and about the premises, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorney-in-fact and agent or either of
them, or their or his substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ DAVID R. LITTLE Chairman of the Board, President, Chief August 20, 1998
- -------------------------------------------- Executive Officer and Director (Principal
David R. Little Executive Officer)
/s/ JERRY J. JONES Director August 20, 1998
- --------------------------------------------
Jerry J. Jones
/s/ GARY A. ALLCORN Senior Vice President/Finance and Chief August 20, 1998
- -------------------------------------------- Financial Officer (Principal Financial and
Gary A. Allcorn Accounting Officer)
/s/ CLETUS DAVIS Director August 20, 1998
- --------------------------------------------
Cletus Davis
Director August , 1998
- --------------------------------------------
Kenneth H. Miller
/s/ THOMAS V. ORR Director August 20, 1998
- --------------------------------------------
Thomas V. Orr
</TABLE>
II-4
<PAGE> 6
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION
<S> <C>
*4.1 Restated Articles of Incorporation, as amended.
4.2 Bylaws (incorporated by reference to Exhibit 3.2 to the
Registrant's Registration Statement on Form S-4 (Reg. No.
333-10021), filed with the Commission on August 12,
1996).
*4.3 Form of Common Stock Certificate.
*4.4 DXP Enterprises, Inc. Long Term Incentive Plan, as amended.
*5.1 Opinion of Fulbright & Jaworski L.L.P.
*23.1 Consent of Arthur Andersen LLP.
*23.2 Consent of Fulbright & Jaworski L.L.P. (included in Exhibit 5.1).
*24.1 Powers of Attorney (contained on page II-4).
</TABLE>
-------------------
*Filed herewith
<PAGE> 1
EXHIBIT 4.1
ARTICLES OF AMENDMENT
TO THE
RESTATED ARTICLES OF INCORPORATION
OF
DXP ENTERPRISES, INC.
Pursuant to the provisions of Article 4.04 of the Texas Business
Corporation Act, the undersigned corporation adopts the following Articles of
Amendment to its Restated Articles of Incorporation, as amended
ARTICLE ONE
The name of the corporation is DXP Enterprises, Inc.
ARTICLE TWO
The following amendments to the Restated Articles of Incorporation, as
amended, were adopted by the shareholders of the corporation on July 6, 1998.
1. The following amendment alters or changes the second paragraph of
Article Four of the Restated Articles of Incorporation, as amended, which
paragraph is amended and restated in its entirety as follows:
"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 closing price per share for the
shares of the Common Stock on the Nasdaq National Market ("Nasdaq"), as reported
by Nasdaq, on the date on which this amendment becomes effective."
2. The following amendment alters or changes paragraph (B)(3)(d)(i) of
Article Four of the Restated Articles of Incorporation, as amended, which
paragraph is amended and restated in its entirety 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 28 shares of Common Stock. The
right to receive the converted shares requires delivery to the office of the
Corporation or its transfer agent
<PAGE> 2
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."
ARTICLE THREE
The number of shares of the corporation outstanding at the time of such
adoption was 8,296,194 and the number of shares entitled to vote thereon was
8,296,194 (representing 8,280,169.5 votes).
The designation and number of outstanding shares of each class or
series entitled to vote thereon as a class were as follows:
<TABLE>
<CAPTION>
Number of Shares (Votes) Outstanding
Class or Series and Entitled to Vote as a Class
- ----------------------------------------- ------------------------------------
<S> <C>
Common Stock, $.01 par value 8,278,389 shares (8,278,389 votes)
Series B Preferred Stock, $1.00 par 15,000 shares (1,500 votes)
value
</TABLE>
ARTICLE FOUR
The number of shares voted for such amendments was 6,962,806
(representing 6,946,949.8 votes), and the number of shares voted against such
amendments was 20,343 (representing 20,343 votes).
The number of shares of each class or series entitled to vote as a
class or series voted for or against such amendments was as follows:
<TABLE>
<CAPTION>
Number of Shares (Votes) Voted
Class or Series For Against
- ----------------------------------------- ------------------------------------
<S> <C> <C>
Common Stock, $.01 par value 6,945,188 shares 20,343 shares
(6,945,188 votes) (20,343 votes)
Series B Preferred Stock, $1.00 par 15,000 shares 0 shares
value (1,500 votes) (0 votes)
</TABLE>
-2-
<PAGE> 3
Dated: July 6, 1998.
DXP ENTERPRISES, INC.
By:/s/ DAVID R. LITTLE
----------------------------------
David R. Little
President
-3-
<PAGE> 4
ARTICLES OF AMENDMENT
TO THE
RESTATED ARTICLES OF INCORPORATION
OF
INDEX, INC.
Pursuant to the provisions of Article 4.04 of the Texas Business
Corporation Act, the undersigned corporation adopts the following Articles of
Amendment to its Restated Articles of Incorporation:
ARTICLE ONE
The name of the corporation is Index, Inc.
ARTICLE TWO
The following amendments to the Restated Articles of Incorporation
were adopted by the shareholders of the corporation on May 6, 1997.
1. The following amendment alters or changes Article I which is
amended and restated in its entirety as follows:
"ARTICLE I
The name of the corporation is DXP Enterprises, Inc."
2. The following amendment alters or changes the first paragraph of
Article IV, which paragraph is amended and restated in its entirety 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
<PAGE> 5
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:"
3. The following amendment alters or changes paragraph (B)(3)(d)(i)
of Article Four of the original Restated Articles of Incorporation, which
paragraph is amended and restated in its entirety 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."
ARTICLE THREE
The number of shares of the corporation outstanding at the time of
such adoption was 12,098,154 and the number of shares entitled to vote thereon
was 12,098,154 (representing 12,081,972.9 votes)
ARTICLE FOUR
The holders of at least 8,126,384 votes entitled to be cast in respect
of the shares outstanding and entitled to vote on said amendment have signed a
consent in writing adopting said amendment, which is the vote required by the
Company's Restated Articles of Incorporation for the adoption of said
amendment, pursuant to Article 2.28(D) of the Texas Business Corporation Act.
Dated: May 6, 1997.
INDEX, INC.
By: /s/ DAVID R. LITTLE
-------------------------------
David R. Little
President
-2-
<PAGE> 6
ARTICLES OF CORRECTION
Pursuant to Article 1302-7.01 of the Texas Revised Civil Statutes, the
undersigned corporation hereby submits the following Articles of Correction:
1. The name of the corporation is Index, Inc.
2, The instrument to be corrected is the Restated Articles of
Incorporation (the "Restated Articles") filed with the Secretary of State of
the State of Texas on August 12, 1996.
3. Sections B(3)(d) (entitled "Voting"), B(3)(e) and B(3)(f) of
Article IV of the Restated Articles are erroneously numbered; such Sections
should be numbered B(3)(e), B(3)(f) and B(3)(g), respectively. Additionally,
Sections B(3)(d) (entitled "Voting") and B(3)(e) of Article IV of the Restated
Articles contain erroneous references to Series A Preferred Stock; such
references should be to Series B Preferred Stock.
4. Sections B(3)(d) (entitled "Voting"), B(3)(e) and B(3)(f) of
Article IV of the Restated Articles are hereby corrected to read as follows:
"(e) Voting. Each share of Series B Preferred Stock shall entitle
the holder thereof to one-tenth (1/10) of one vote on each matter
presented to the shareholders generally voting as a single class with
the Common Stock and any other class or series of stock having similar
voting rights. The holders of the Series B Preferred Stock shall not
be entitled to vote as a class on any matter except as required by
law."
"(f) Exclusion of Other Rights. Unless otherwise required by law,
the shares of Series B Preferred Stock shall not have any powers,
preferences, or relative, participating, option or other special
rights other than those specifically set forth herein."
"(g) Stated Value. The stated value of the Series B Preferred
Stock is $100 per share, all of which shall be allocated to the stated
capital of the Corporation."
INDEX, INC.
Date: September 17, 1996 By: /s/ DAVID R. LITTLE
------------------------
David R. Little
Chairman and
Chief Executive Officer
<PAGE> 7
RESTATED ARTICLES OF INCORPORATION
OF
INDEX, INC.
ARTICLE ONE
Index, Inc., pursuant to the provisions of Article 4.07 of the Texas
Business Corporation Act, hereby adopts restated articles of incorporation
which accurately copy the articles of incorporation and all amendments thereto
that are in effect to date and as further amended by such restated articles of
incorporation as hereinafter set forth and which contain no other change in any
provision thereof.
ARTICLE TWO
The articles of incorporation of the corporation are amended by the
restated articles of incorporation as follows:
The total number of shares of stock of all classes which the
Corporation shall have authority to issue has been increased from 102,000,000
shares to 110,000,000 shares. Further, the designated Common Stock, Preferred
Stock and Convertible Preferred Stock have each been designated as a series.
ARTICLE THREE
Each such amendment made by the restated articles of incorporation has
been effected in conformity with the provisions of the Texas Business
Corporation Act and such restated articles of incorporation and each such
amendment made by the restated articles of incorporation were duly adopted by
the shareholders of the corporation on the 2nd day of August, 1996.
ARTICLE FOUR
The number of shares outstanding was 100, and the number of shares
entitled to vote on the restated articles of incorporation as so amended was
100. All of the shareholders have signed a written consent to the adoption of
such restated articles of incorporation as so amended pursuant to Article 9.10
and any written notice required by Article 9.10 has been given.
ARTICLE FIVE
The articles of incorporation and all amendments and supplements
thereto are hereby superseded by the following restated articles of
incorporation which accurately copy the entire text thereof and as amended as
above set forth:
ARTICLE I
Name
The name of the Corporation is Index, Inc. (the "Corporation").
<PAGE> 8
ARTICLE II
Duration
The period of its duration is perpetual.
ARTICLE III
Purpose
The purpose or purposes for which the Corporation is organized is the
transaction of any or all lawful business for which corporations may be
incorporated under the Act.
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 of $.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"). 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:
A. Common Stock.
1. Dividends. Subject to any rights of the Preferred Stock or
any series thereof and the conditions set forth in paragraph B of this Article
IV or in any resolution of the Board of Directors of the Corporation providing
for the issuance of any series of Preferred Stock, the holders of the Common
Stock shall be entitled to receive, when, as and if declared by the Board of
Directors, out of funds legally available therefor, dividends payable in cash,
stock or otherwise.
2. Voting Rights. Each holder of Common Stock shall be entitled
to one vote for each share held on each matter presented to shareholders
generally. Notwithstanding the foregoing, the Corporation may, without the
approval or consent of any holder of the Common Stock, amend these Articles of
Incorporation in any manner that would solely effect changes in the
preferences, limitations and relative rights of one or more series of stock of
the corporation which has been established pursuant to the authority granted
the Board of Directors of the corporation pursuant to paragraph B of this
Section 2 if (x) such amendment is approved by the holders of a majority of the
outstanding shares of the series of stock so affected and (y) the preferences,
limitations and relative rights of such series after giving effect to such
amendment and of any new series that may be established as a result of a
reclassification of such series are, in each case, no greater than those
preferences, limitations and rights permitted to be fixed and determined by the
Board of Directors of the corporation with respect to the establishment of any
new series of shares pursuant to the authority granted the Board of Directors
of the corporation in these Articles of Incorporation.
B. Preferred Stock.
1. Authorized Shares. The Preferred Stock may be divided into
and issued in one or more series. Of the 10,000,000 authorized shares of
Preferred Stock, (i) 1,000,000 shares have been designated as Series A
Preferred Stock (the "Series A Preferred Stock"), (ii) 1,000,000 shares have
been designated as Series B Convertible Preferred Stock (the "Series B
Preferred Stock") and (iii) 8,000,000 shares are available for future
designation as provided herein.
2. Series A Preferred Stock
-2-
<PAGE> 9
The holders of the Series A Preferred Stock shall have the
following rights and preferences:
(a) Dividends. The holders of Series A Preferred Stock shall not
as a matter of right be entitled to be paid or receive or have declared or set
apart for such Series A Preferred Stock, any dividends or distributions of the
Corporation in respect thereof.
(b) Liquidation, Dissolution and Winding Up. In the event of any
voluntary or involuntary liquidation, dissolution or winding up of the affairs
of the Corporation, the holders of the Series A Preferred Stock shall be
entitled to receive $100.00 in cash and no more for each share of Series A
Preferred Stock held by them, before any distribution of the assets of the
Corporation shall be made to the holders of any other outstanding shares of the
Corporation, unless funds necessary for such payment shall have been set aside
in trust for the account of the holders of outstanding shares of Series A
Preferred Stock so as to be and continue to be available therefor. The holders
of shares of Series A Preferred Stock shall be entitled to no further
participation in any distribution of the assets of the Corporation. If upon
such liquidation, dissolution or winding up, the assets of the Corporation
distributable as aforesaid among the holders of shares of Series A Preferred
Stock are insufficient to permit the payment to holders of Series A Preferred
Stock of $100.00 per share then the assets of the Corporation shall be
distributed to the holders of shares of Preferred Stock ratably according to
their respective shares until they shall have received the full amount to which
they would otherwise be so entitled.
(c) Redemption. No shares of Series A Preferred Stock shall be
callable or redeemable by the Corporation. Any shares of Series A Preferred
Stock purchased or otherwise acquired by the Corporation shall have the status
of treasury shares of Preferred Stock until such time as such shares are
cancelled pursuant to the provisions of the Act.
(d) Voting. Each share of Series A Preferred Stock shall entitle
the holder thereof to one-tenth (1/10) of one vote on each matter presented to
shareholders generally voting as a single class with the Common Stock and any
other class or series of stock having similar voting rights. The holders of
the Series A Preferred Stock shall not be entitled to vote as a class on any
matter except as required by law.
(e) Exclusion of Other Rights. Unless otherwise required by law,
the shares of Series A Preferred Stock shall not have any powers, preferences,
or relative, participating, option or other special rights other than those
specifically set forth herein.
3. Series B Preferred Stock
The holders of the Series B Preferred Stock shall have the
following rights and preferences:
(a) Dividends. The holders of the Series B Preferred Stock shall
be entitled to receive dividends out of any funds legally available for that
purpose at the annual rate of six percent (6%) per annum of the stated value
and no more. These dividends are payable in cash monthly on the last day of
each month. The first dividend, after the issuance of such shares, shall be
payable on the last day of the month of issuance. Dividends will accrue from
the date the shares of Series B Preferred Stock are issued and are considered
to accrue from day to day, whether or not earned or declared. The dividends
will be payable before any dividends are paid, declared, or set apart for any
other capital stock of the Corporation. Dividends are cumulative so that if
for any dividend period the dividends on the outstanding Series B Preferred
Stock are not paid or declared and set apart, the deficiency shall be fully
paid or
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<PAGE> 10
declared and set apart for payment, without interest, before any distribution
(by dividend or otherwise) is paid on, declared, or set apart for any other
capital stock of the Corporation. The holders of shares of Series B Preferred
Stock shall not be entitled to receive any other dividends or distributions.
(b) Liquidation, Dissolution and Winding Up. Subject to the
rights of the holders of the Series A Preferred Stock, in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the affairs
of the Corporation, the holders of outstanding shares of Series B Preferred
Stock shall be entitled to receive $100.00 in cash for each share, before any
distribution of the assets of the Corporation shall be made to the holders of
any other class or series of shares of the Corporation unless funds necessary
for such payment shall have been set aside in trust for the account of the
holders of outstanding shares of Series B Preferred Stock so as to be and
continue to be available therefor. If upon such liquidation, dissolution or
winding up, the assets of the Corporation distributable as aforesaid among the
holders of shares of Series B Preferred Stock are insufficient to permit the
payment to the holders of outstanding shares of Series B Preferred Stock of
$100.00 per share, then the assets of the Corporation shall be distributed to
the holders of outstanding shares of Series B Preferred Stock ratably according
to their respective shares until they shall have received the full amount to
which they would otherwise be so entitled. The holders of the Series B
Preferred Stock shall also be entitled to participate on a pro rata basis
(based on the outstanding number of shares) in any distributions made to the
holders of the Common Stock or other class or series of stock that is entitled
to distributions upon satisfaction of all shares entitled to preferred
distribution.
(c) Redemption.
(i) The Corporation, at the option of the Board of
Directors, may at any time five (5) years from the date of initial issuance
redeem the whole, or any part, of the outstanding shares of Series B Preferred
Stock by paying $100.00 per share plus all dividends accrued, unpaid, and
accumulated as provided in this Article through and including the redemption
date and by giving to each record holder of Series B Preferred Stock, at his or
her last known address as shown in the Corporation's records, at least twenty
but not more than sixty days' notice. This redemption notice may be delivered
either in person or in writing, by mail, postage prepaid and must state the
shares to be redeemed, along with the date and plan of redemption, the
redemption price, and the place where the shareholders may obtain payment of
the redemption price on surrendering their share certificates. If only a part
of the outstanding shares of Series B Preferred Stock shares are redeemed,
redemption will be pro rata. No shares of Series B Preferred Stock may be
redeemed unless all accrued dividends on all outstanding shares of Series B
Preferred Stock shares have been paid for all past dividend periods and full
dividends for the current period, except those to be redeemed, have been paid
or declared and set apart for payment. On or after the date fixed for
redemption, each holder of shares called for redemption must, unless the
shareholder has previously exercised the option to convert the holder's shares
of Series B Preferred Stock as provided herein, surrender to the Corporation
the certificate for the shares at the place designated in the redemption notice
and will then be entitled to receive payment of the redemption price. If fewer
than all the shares represented by any surrendered certificate are redeemed, a
new certificate for the unredeemed shares will be issued. If the redemption
notice is duly given and sufficient funds are available to pay all monies
herein required on the date fixed for redemption, then, whether or not the
certificates representing the shares to be redeemed are surrendered, all rights
with respect to the shares shall terminate on the date fixed for redemption,
except for the holders' right to receive the redemption price, without
interest, on surrendering their certificates.
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<PAGE> 11
(ii) Shares are considered redeemed, and dividends on them
cease to accrue after the date fixed for redemption, if, on or before any date
fixed for redemption of the shares of Series B Preferred Stock as provided
herein, the Corporation deposits as a trust fund with any bank or trust company
a sum sufficient to redeem, on the date fixed for redemption, with irrevocable
instructions and authority to the bank or trust company (a) to publish the
redemption notice (or to complete publication already begun), and (b) to pay,
on and after the date fixed for redemption or before that date, the redemption
price of the shares to their holders when they surrender their certificates.
The deposit is considered to constitute full payment of the shares to their
holders, and from the date of the deposit the shares will no longer be
considered outstanding. Moreover, the holders of the shares will cease to be
shareholders with respect to the shares and will have no rights with respect to
the shares, except to receive from the bank or trust company payment of the
redemption price of the shares (without interest) on surrendering of the
certificates unless the shares are converted to Common Stock, as provided
herein. Any money so deposited on account of the redemption price of Series B
Preferred Stock share which are converted after the deposit is made must be
repaid immediately to the Corporation on conversion of the Series B Preferred
Stock.
(iii) Share of Series B Preferred Stock redeemed by the
Corporation shall be restored to the status of authorized but unissued shares.
(d) Conversion.
(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 112 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 Company or its transfer agent of
the notice and the duly endorsed certificate(s).
(ii) Neither fractional shares nor scrip or other
certificates representing the shares may be issued by the Corporation on
conversion of shares of Series B Preferred Stock, but the Corporation must pay
in lieu thereof the full value in cash to the holders who would be entitled to
receive the fractional shares but for this provision.
(iii) The Corporation must at all time reserve out of its
authorized but unissued shares of Common Stock the full number of shares
deliverable on conversion of all shares hereunder from time to time
outstanding. Said shares are reserved solely for the purpose of satisfying the
conversion requirements.
(iv) The number of shares and securities or other property
issuable upon the conversion of the Series Preferred Stock shall be subject to
adjustment from time to time in the event of any reclassification of the Common
Stock, the issuance of any stock dividend or stock split in respect of the
Common Stock, share exchange involving the Common Stock or other similar
transaction so that the holders of the Series B Preferred Stock shall be
entitle to receive on conversion of the shares of Series B Preferred Stock that
number of shares and other securities or property that a holder of a share of
Common Stock received in such reclassification, stock dividend, stock split,
share exchange or similar transaction. Such adjustments shall be determined by
the Board of Directors of the Corporation, whose determination shall be final
and conclusive. Such adjustments shall be made for successive transactions.
-5-
<PAGE> 12
(d) Voting. Each share of Series A Preferred Stock shall entitle
the holder thereof to one-tenth (1/10) of one vote on each matter presented to
shareholders generally voting as a single class with the Common Stock and any
other class or series of stock having similar voting rights. The holders of
the Series A Preferred Stock shall not be entitled to vote as a class on any
matter except as required by law.
(e) Exclusion of Other Rights. Unless otherwise required by law,
the shares of Series A Preferred Stock shall not have any powers, preferences,
or relative, participating, option or other special rights other than those
specifically set forth herein.
(f) Stated Value. The stated value of the Series B Preferred
Stock is $100 per share, all of which shall be allocated to the stated capital
of the Corporation.
4. Future Designations
Subject to the provisions of paragraph A of this Article IV, the Board
of Directors of the Corporation is hereby vested with authority from time to
time to establish and designate such series of Preferred Stock from the
authorized but unissued shares of Preferred Stock as it may deem desirable, and
within the limitations prescribed by law or set forth herein, to fix and
determine the relative rights and preferences of the shares of any series so
established. The Board of Directors shall exercise such authority by the
adoption of a resolution or resolutions as prescribed by law, setting forth the
designation of the series and fixing and determining the relative rights and
preferences thereof or so much thereof as shall not be fixed and determined
herein. The Board of Directors may increase or decrease the number of shares of
a series by adopting a resolution fixing and determining the new number of
shares of each series in which the number of shares is increased or decreased;
provided, however, no decrease may reduce the number of shares within a series
to less than the number of shares within such series that are then issued.
C. Provisions Applicable to All Stock.
1. Voting Rights. The holders of a majority of the shares of the
Corporation's stock of any class entitled to vote, represented in person or by
proxy, shall constitute a quorum at a meeting of shareholders. Subject to the
provisions of paragraph A of this Article IV, the vote of the holders of a
majority of the shares entitled to vote and represented at a meeting at which a
quorum is present shall be the act of the shareholders' meeting, except with
respect to certain actions, which require the affirmative vote of the holders
of a majority of the outstanding shares of the Corporation unless any class of
stock of the Corporation is entitled to vote as a class thereon, in which event
the action shall be approved upon the affirmative vote of the holders of a
majority of the outstanding shares within each class entitled to vote as a
class thereon as well as a majority of the outstanding shares. No shareholder
of the Corporation shall have the right of cumulative voting at any election of
directors or upon any other matter.
2. Preemptive Rights. No holder of securities of the Corporation
shall be entitled as a matter of right, preemptive or otherwise, to subscribe
for or purchase any securities of the Corporation now or hereafter authorized
to be issued, or securities held in the treasury of the Corporation, whether
issued or sold for cash or other consideration or as a share dividend or
otherwise. Any such securities may be issued or disposed of by the Board of
Directors to such persons and on such terms as in its discretion it shall deem
advisable.
ARTICLE V
Majority Vote for Approval of Certain Actions
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<PAGE> 13
If, with respect to any matter for which the affirmative vote or
concurrence of the shareholders of the Corporation is required, any provision
of the Texas Business Corporation Act, as the same may be amended from time to
time, would, but for this Article V, require the affirmative vote or
concurrence of the holders of shares having more than a majority of the votes
entitled to vote on such matter, or of any class or series thereof, the
affirmative vote or concurrence of the holders of shares having only a majority
of the votes entitled to vote on such matter, or of any class or series
thereof, shall be required with respect to any such matter.
ARTICLE VI
Written Consents
Except for the election of directors of the Corporation, who when
elected by shareholders shall be elected at either an annual or special meeting
of shareholders called for such purpose, any action required to, or which may,
be taken at any annual or special meeting of shareholders may be taken without
a meeting, without prior notice and without a vote, if a consent or consents in
writing, setting forth the action so taken, shall be signed by the holder or
holders of shares having not less than the minimum number of votes that would
be necessary to take such action at a meeting at which the holders of all
shares entitled to vote on the action were present and voted.
ARTICLE VII
Commencement of Business
The Corporation will not commence business until it has received for
the issuance of its shares consideration of the value of One Thousand
($1,000.00) Dollars consisting of money, labor done, or property actually
received.
ARTICLE VIII
Registered Office and Agent
The street address of its initial registered office is 5555 San
Felipe, 17th Floor, Houston, Texas 77056 and the name of its initial registered
agent at such address is Gary A. Messersmith.
ARTICLE IX
Directors
(A) Number of Directors. The business and affairs of the
Corporation shall be managed by or be under the direction of the Board of
Directors of the Corporation. The number of Directors constituting the initial
Board of Directors is one (1). The number of Directors of the Corporation may
from time to time be changed in accordance with the Bylaws of the Corporation
and the Act.
(B) Name and Address of Director. The name of the person who is to
serve as Director until the first annual meeting of the shareholders, or until
his successor is elected and qualified is DAVID R. LITTLE and his address is
580 Westlake Park Blvd., Suite 1100, Houston, Texas 77079
(C) Directors Liability. No director of the Corporation shall be
liable to the Corporation or any of its shareholders for monetary damages for
an act or omission in the director's capacity as a director, except that this
Article IX shall not authorize the elimination or limitation of liability of a
director of the Corporation to the extent the director is found liable for: (i)
a breach of such director's duty of loyalty to the Corporation or its
shareholders;
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<PAGE> 14
(ii) an act or omission not in good faith that constitutes a breach of duty of
such director to the Corporation or an act or omission that involves
intentional misconduct or a knowing violation of the law; (iii) a transaction
from which such director received an improper benefit, whether or not the
benefit resulted from an action taken within the scope of the director's
office; or (iv) an act or omission for which the liability of a director is
expressly provided by an applicable statute.
ARTICLE X
Limitation of Liability of Directors
A. No director of the Corporation shall be liable to the
Corporation or any of its shareholders for monetary damages for an act or
omission in the director's capacity as a director, except that this Article
VIII shall not authorize the elimination or limitation of liability of a
director of the Corporation to the extent the director is found liable for: (i)
a breach of such director's duty of loyalty to the Corporation or its
shareholders; (ii) an act or omission not in good faith that constitutes a
breach of duty of such director to the Corporation or an act or omission that
involves intentional misconduct or a knowing violation of the law; (iii) a
transaction from which such director received an improper benefit, whether or
not the benefit resulted from an action taken within the scope of the
director's office; or (iv) an act or omission for which the liability of a
director is expressly provided by an applicable statute.
B. If the Texas Business Corporation Act, the Texas Miscellaneous
Corporation Laws Act or any other applicable Texas statute hereafter is amended
to authorize the further elimination or limitation of the liability of
directors of the Corporation, then the liability of a director of the
Corporation shall be limited to the fullest extent permitted by the Texas
Business Corporation Act, the Texas Miscellaneous Corporation Laws Act and such
other applicable Texas statute, as so amended, and such limitation of liability
shall be in addition to, and not in lieu of, the limitation on the liability of
a director of the Corporation provided by the foregoing provisions of this
Article VIII.
C. Any repeal of or amendment to this Article VIII shall be
prospective only and shall not adversely affect any limitation on the liability
of a director of the Corporation existing at the time of such repeal or
amendment.
ARTICLE XI
Indemnification of Officers and Directors
(A) Indemnification of Directors. To the fullest extent permitted by
Section B and Section E of Article 2.02-1 of the Act, the Corporation shall
indemnify each person who was, is, or is threatened to be made a named
defendant or respondent in a proceeding because the person is or was a director
of the Corporation, and this provision for indemnification shall be deemed to
constitute authorization of such indemnification in the manner required by
Section G of said Article 2.02-1 of the Act.
(B) Expenses of a Defendant. To the fullest extent permitted by
Section K of Article 2.02-1 of the Act, reasonable expenses incurred by a
director of the Corporation who was, is, or is threatened to be made a named
defendant or respondent in a proceeding shall be paid or reimbursed by the
Corporation, in advance of the final disposition of such proceeding, after the
Corporation receives a written affirmation by the director of his good faith
belief that he has met the standard of conduct necessary for indemnification by
the Corporation and the Corporation receives a written undertaking by or behalf
of the director to repay the amount paid or reimbursed if it is ultimately
determined that he has not met that standard or if it is ultimately determined
that indemnification of the director against expenses incurred by him
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<PAGE> 15
in connection with that proceeding is otherwise prohibited by said Article
2.02-1 of the Act. This provision for payment or reimbursement shall be deemed
to constitute authorization of such payment or reimbursement as provided by
said Section K of Article 2.02-1 of the Act.
(C) Officers. Pursuant to Section O of Article 2.02-1 of the Act,
the Corporation shall indemnify and advance expenses to an officer of the
Corporation to the same extent that the Corporation shall indemnify and pay or
reimburse expenses to directors of the Corporation as set forth in subsections
(A) and (B) hereinabove.
(D) Expenses of a Witness. To the fullest extent permitted by
Section N of Article 2.02-1 of the Act, the Corporation shall pay or reimburse
expenses incurred by a director or officer in connection with his appearance as
a witness or other participation, only in his capacity as a director or officer
of the Corporation, in a proceeding at a time when he is not a named defendant
or respondent in the proceeding as set out therein.
(E) Other. In addition to the foregoing, the Corporation hereby
adopts all other terms, provisions and authorizations of Article 2.02-1 of the
Act, not in conflict with subsections (A), (B), (C) and (d) hereinabove,
including but not limited to Sections H, I, J and O of said Article 2.02-1 of
the Act. It is the intention of the Corporation to provide the maximum
indemnification allowed by law to its directors and officers and to make
mandatory in all instances any permissive provisions of Article 2.02-1 of the
Act for the benefit of the Corporation's directors and officers.
(F) Insurance. The Corporation shall have power to purchase and
maintain insurance or another arrangement on behalf of any person who is or was
a director, officer, employee or agent of the Corporation, or is or was serving
at the request of the Corporation as a director, officer, partner, venturer,
proprietor, trustee, employee, agent, or similar functionary of another
corporation, partnership, joint venture, sole proprietorship, trust, employee
benefit plan or other enterprise against any liability asserted against him and
incurred by him in any such capacity, or arising out of his status as such,
whether or not the Corporation would have the power to indemnify him against
such liability under the provisions of this Article or the Act.
(G) Amendment of this Article. No amendment or repeal of this
Article shall apply to or have any affect on the indemnification or
reimbursement of any director or officer of the Corporation for or with respect
to any such indemnification or reimbursement on the part of such director or
officer for events covered by such indemnification or reimbursement occurring
prior to such amendment or repeal.
(H) Amendment of the Act. In the event any provision of the Act set
out in this Article is amended, altered or repealed in any way, then any such
amendment, alteration or repeal shall be incorporated herein without the
necessity of any further action by the corporation upon the effective date of
such action.
ARTICLE XII
Amendment of Bylaws
The shareholders of the Corporation hereby delegate to the Board of
Directors the power to adopt, alter, amend or repeal the Bylaws of the
Corporation. Such power shall be vested exclusively in the Board of Directors
and shall not be exercised by the shareholders.
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<PAGE> 16
ARTICLE XIII
Power to Call Special Shareholders' Meetings
Special meetings of the shareholders of the Corporation may be called
by the President of the Corporation, the Board of Directors or holders of not
less than thirty (30%) percent of all the shares entitled to vote at the
proposed special meeting of the shareholders.
ARTICLE XIV
Amendments
The Corporation reserves the right to amend, alter, change or repeal
any provision contained in these Articles of Incorporation or in its Bylaws in
the manner now or hereafter prescribed by the Act or these Articles of
Incorporation, and all rights conferred on shareholders herein are granted
subject to this reservation.
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<PAGE> 17
Executed this the 12th day of August, 1996.
INDEX, INC.
By: /s/ DAVID R. LITTLE
----------------------------------
Name: David R. Little
--------------------------------
Title: Chairman & CEO
-------------------------------
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<PAGE> 1
EXHIBIT 4.3
COMMON STOCK COMMON STOCK
ORGANIZED UNDER THE
LAWS OF THE STATE OF TEXAS
NUMBER DXP ENTERPRISES, INC. SHARES
XC-
CUSIP 233377 40 7
SEE REVERSE FOR CERTAIN DEFINITIONS
THIS CERTIFIES THAT
is the owner of
FULLY PAID AND NON-ASSESSABLE SHARES OF COMMON STOCK,
PAR VALUE $.01 PER SHARE, OF
DXP Enterprises, Inc., transferable on the books of the Corporation by the
holder hereof in person or by a duly authorized attorney upon surrender of this
certificate properly endorsed. This certificate is not valid until
countersigned by the Transfer Agent and registered by the Registrar.
Witness the facsimile seal of the Corporation and the facsimile
signatures of its duly authorized Officers.
Dated:
/s/ DAVID R. LITTLE Countersigned and Registered
President American Stock Transfer & Trust Company
[SEAL]
Transfer Agent and Registrar
/s/ GARY A. ALLCORN By
Secretary Authorized Signature
<PAGE> 2
DXP ENTERPRISES, INC
The corporation will furnish to the record holder hereof without charge
upon written request at its principal place of business or registered office a
statement contained in its Restated Articles of Incorporation, as amended, on
file in the office of the Secretary of State of the State of Texas of all the
designations, preferences, limitations and relative rights of the shares of
each class and series of shares of the corporation authorized to be issued, and
the authority of the board of directors to fix and determine the designations,
preferences, limitations and relative rights of subsequent series.
The corporation will furnish to the record holder hereof without charge
upon request to the corporation at its principal place of business or registered
office a statement of the denial of preemptive rights contained in its Restated
Articles of Incorporation, as amended, on file in the office of the Secretary of
State of the State of Texas.
The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
TEN ENT - as tenants by the ------ --------
entireties (Cust) (Minor)
JT TEN - as joint tenants with Uniform Gifts to Minors
right of survivorship Act
and not as tenants
in common ------------------
(State)
Additional abbreviations may also be used though not in the above list.
For Value Received, hereby sell, assign and transfer unto
--------
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
[ ]
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE OF ASSIGNEE)
----------------------------------------------------------------------------
Shares
----------------------------------------------------------------------
of the Common Stock represented by the within certificate, and do hereby
irrevocably constitute and appoint
----------------------------------------------------------------------------
Attorney,
----------------------------------------------------------------------
----------------------------------------------------------------------------
to transfer the said shares on the books of the within-named Corporation
with full power of substitution in the premises.
X
-------------------------------------------
NOTICE: THE SIGNATURE(S) TO THIS
ASSIGNMENT MUST CORRESPOND WITH
THE NAME(S) AS WRITTEN UPON THE
FACE OF THE CERTIFICATE IN EVERY
PARTICULAR, WITHOUT ALTERATION
OR ENLARGEMENT OR ANY CHANGE
WHATEVER.
X
-------------------------------------------
------------------------------------------
ALL GUARANTEES MUST BE MADE BY A FINANCIAL
INSTITUTION (SUCH AS A BANK OR BROKER)
WHICH IS A PARTICIPANT IN THE SECURITIES
TRANSFER AGENTS MEDALLION PROGRAM
("STAMP"), THE NEW YORK STOCK EXCHANGE,
INC. MEDALLION SIGNATURE PROGRAM ("MSP"),
OR THE STOCK EXCHANGES MEDALLION PROGRAM
("SEMP") AND MUST NOT BE DATED. GUARANTEES
BY A NOTARY PUBLIC ARE NOT ACCEPTABLE.
------------------------------------------
<PAGE> 1
EXHIBIT 4.4
INDEX, INC.
LONG-TERM INCENTIVE PLAN
ARTICLE I: GENERAL
SECTION 1.1 Purpose of the Plan. The Long-Term Incentive Plan (the
"Plan") of Index, Inc. (the "Company") is intended to advance the best interests
of the Company, its subsidiaries and its shareholders in order to attract,
retain and motivate key employees by providing them with additional incentives
through (i) the grant of options ("Options") to purchase shares of Common Stock,
par value $.01 per share, of the Company ("Common Stock"), (ii) the grant of
stock appreciation rights ("Stock Appreciation Rights"), (iii) the award of
shares of restricted Common Stock ("Restricted Stock") and (iv) the award of
units payable in cash or shares of Common Stock based on performance
("Performance Awards"), thereby increasing the personal stake of such key
employees in the continued success and growth of the Company.
SECTION 1.2 Administration of the Plan. (a) The Plan shall be
administered by the Board of Directors of the Company or the compensation
committee of the Board of Directors or other designated committee of the Board
of Directors of the Company (the "Board of Directors") which shall consist of at
least two Outside Directors (the Board of Directors or such committee being
hereinafter referred to as the "Committee"). The Committee shall have authority
to interpret conclusively the provisions of the Plan, to adopt such rules and
regulations for carrying out the Plan as it may deem advisable, to decide
conclusively all questions of fact arising in the application of the Plan, to
establish performance criteria in respect of Awards (as defined herein) under
the Plan, to certify that Plan requirements have been met for any participant in
the Plan, to submit such matters as it may deem advisable to the Company's
shareholders for their approval, and to make all other determinations and take
all other actions necessary or desirable for the administration of the Plan. The
Committee is expressly authorized to adopt rules and regulations limiting or
eliminating its discretion in respect of certain matters as it may deem
advisable to comply with or obtain preferential treatment under any applicable
tax or other law rule, or regulation. All decisions and acts of the Committee
shall be final and binding upon all affected Plan participants.
For purposes of this Plan, "Outside Director" shall mean a nonemployee
director of the Company who is a "Non-Employee Director" within the meaning of
Rule 16b-3 under the Securities Exchange Act of 1934, as amended (the "Exchange
Act").
(b) The Committee shall designate the eligible employees, if any, to be
granted Awards and the type and amount of such Awards and the time when Awards
will be granted. All Awards granted under the Plan shall be on the terms and
subject to the conditions determined by the Committee consistent with the Plan.
SECTION 1.3 Eligible Participants. Key employees, including officers,
of the Company and its subsidiaries (all such subsidiaries being referred to as
"Subsidiaries") shall be eligible for Awards under the Plan.
<PAGE> 2
SECTION 1.4 Awards Under the Plan. Awards to key employees may be in
the form of (i) Options, (ii) Stock Appreciation Rights, which may be issued
independent of or in tandem with Options, (iii) shares of Restricted Stock, (iv)
Performance Awards, or (v) any combination of the foregoing (collectively,
"Awards").
SECTION 1.5 Shares Subject to the Plan. Initially, the aggregate number
of shares of Common Stock that may be issued under the Plan shall be 800,000. In
addition, as of January 1 of each year the Plan is in effect, if the total
number of shares of Common Stock issued and outstanding, not including any
shares issued under the Plan, exceeds the total number of shares of Common Stock
issued and outstanding as of January 1 of the preceding year (or, for 1996, as
of the effective date of the merger (the "Effective Date") of a wholly owned
subsidiary of the Company with SEPCO Industries, Inc. (the "Sepco Merger")
assuming all shares issued pursuant to the Sepco Merger and the proposed merger
of a subsidiary of the Company with and into Newman Communications, Inc are
issued), the number of shares available will be increased by an amount such that
the total number of shares that may be issued under the Plan shall be increased
by an amount such that the total number of shares of Common Stock available for
issuance under the Plan equals 5% of the total number of shares of Common Stock
outstanding, not including any shares issued under the Plan. Shares distributed
pursuant to the Plan may consist of authorized but unissued shares or treasury
shares of the Company, as shall be determined from time to time by the Board of
Directors.
If any Award under the Plan shall expire, terminate or be cancelled
(including cancellation upon an Option holder's exercise of a related Stock
Appreciation Right) for any reason without having been exercised in full, or if
any Award shall be forfeited to the Company, the unexercised or forfeited Award
shall not count against the above limits and shall again become available for
Awards under the Plan (unless the holder of such Award received dividends or
other economic benefits with respect to such Award, which dividends or other
economic benefits are not forfeited, in which case the Award shall count against
the above limits). Shares of Common Stock equal in number to the shares
surrendered in payment of the option price, and shares of Common Stock which are
withheld in order to satisfy Federal, state or local tax liability, shall count
against the above limits. Only the number of shares of Common Stock actually
issued upon exercise of a Stock Appreciation Right shall count against the above
limits, and any shares which were estimated to be used for such purposes and
were not in fact so used shall again become available for Awards under the Plan.
Cash exercises of Stock Appreciation Rights and cash settlement of other Awards
will not count against the above limits.
The aggregate number of shares of Common Stock subject to Options or
Stock Appreciation Rights that may be granted to any one participant in any one
year under the Plan shall be 400,000. The aggregate number of shares of Common
Stock that may be granted to any one participant in any one year in respect of
Restricted Stock shall be 400,000. The aggregate number of shares of Common
Stock that may be received by any one participant in any one year in respect of
a Performance Award shall be 400,000 and the aggregate amount of cash that may
be received by any one participant in any one year in respect to a Performance
Award shall be $500,000.
The total number of Awards (or portions thereof) settled in cash under
the Plan, based on the number of shares covered by such Awards (e.g., 100 shares
for a Stock Appreciation Right with respect to 100 shares), shall not exceed a
number equal to (i) the number of shares
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<PAGE> 3
initially available for issuance under the Plan plus (ii) the number of shares
that have become available for issuance under the Plan pursuant to the first
paragraph of this Section 1.5.
The aggregate number of shares of Common Stock that are available under
the Plan for Options granted in accordance with Section 2.4(i) ("ISOs") is
800,000, subject to adjustments as provided in Section 5.2 of the Plan.
SECTION 1.6 Other Compensation Programs. Nothing contained in the Plan
shall be construed to preempt or limit the authority of the Board of Directors
to exercise its corporate rights and powers, including, but not by way of
limitation, the right of the Board of Directors (i) to grant incentive awards
for proper corporate purposes otherwise than under the Plan to any employee,
officer, director or other person or entity or (ii) to grant incentive awards
to, or assume incentive awards of, any person or entity in connection with the
acquisition (whether by purchase, lease, merger, consolidation or otherwise) of
the business or assets (in whole or in part) of any person or entity.
ARTICLE II: STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
SECTION 2.1 Terms and Conditions of Options. Subject to the following
provisions, all Options granted under the Plan to employees of the Company and
its Subsidiaries shall be in such form and shall have such terms and conditions
as the Committee, in its discretion, may from time to time determine consistent
with the Plan.
(a) Option Price. The option price per share shall be determined by the
Committee, except that in the case of an Option granted in accordance with
Section 2.4(i) the option price per share shall not be less than the fair market
value of a share of Common Stock (as determined by the Committee) on the date
the Option is granted (other than in the case of substitute or assumed Options
to the extent required to qualify such Options for preferential tax treatment
under the Code as in effect at the time of such grant).
(b) Term of Option. The term of an Option shall be determined by the
Committee, except that in the case of an ISO the term of the Option shall not
exceed ten years from the date of grant, and, notwithstanding any other
provision of this Plan, no Option shall be exercised after the expiration of its
term.
(c) Exercise of Options. Options shall be exercisable at such time or
times and subject to such terms and conditions as the Committee shall specify in
the Option grant. Unless the Option grant specifies otherwise, the Committee
shall have discretion at any time to accelerate such time or times and otherwise
waive or amend any conditions in respect of all or any portion of the Options
held by any optionee. An Option may be exercised in accordance with its terms as
to any or all shares purchasable thereunder.
(d) Payment for Shares. The Committee may authorize payment for shares
as to which an Option is exercised to be made in cash, shares of Common Stock, a
combination thereof, by "cashless exercise" or in such other manner as the
Committee in its discretion may provide.
(e) Shareholder Rights. The holder of an Option shall, as such, have
none of the rights of a shareholder.
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(f) Termination of Employment. The Committee shall have discretion to
specify in the Option grant, or, with the consent of the optionee, an amendment
thereof, provisions with respect to the period, not extending beyond the term of
the Option, during which the Option may be exercised following the optionee's
termination of employment.
SECTION 2.2 Stock Appreciation Rights in Tandem with Options. (a) The
Committee may, either at the time of grant of an Option or at any time during
the term of the Option, grant Stock Appreciation Rights ("Tandem SARs") with
respect to all or any portion of the shares of Common Stock covered by such
Option. A Tandem SAR may be exercised at any time the Option to which it relates
is then exercisable, but only to the extent the Option to which it relates is
exercisable, and shall be subject to the conditions applicable to such Option.
When a Tandem SAR is exercised, the Option to which it relates shall cease to be
exercisable to the extent of the number of shares with respect to which the
Tandem SAR is exercised. Similarly, when an Option is exercised, the Tandem SARs
relating to the shares covered by such Option exercise shall terminate. Any
Tandem SAR which is outstanding on the last day of the term of the related
Option (as determined pursuant to Section 2.1(b)) shall be automatically
exercised on such date for cash without any action by the optionee.
(b) Upon exercise of a Tandem SAR, the holder shall receive, for each
share with respect to which the Tandem SAR is exercised, an amount (the
"Appreciation") equal to the difference between the option price per share of
the Option to which the Tandem SAR relates and the fair market value (as
determined by the Committee) of a share of Common Stock on the date of exercise
of the Tandem SAR. The Appreciation shall be payable in cash, Common Stock, or a
combination of both, at the option of the Committee, and shall be paid within 30
days of the exercise of the Tandem SAR.
SECTION 2.3 Stock Appreciation Rights Independent of Options. Subject
to the following provisions, all Stock Appreciation Rights granted independent
of Options ("Independent SARs") under the Plan to employees of the Company and
its Subsidiaries shall be in such form and shall have such terms and conditions
as the Committee, in its discretion, may from time to time determine consistent
with the Plan.
(a) Exercise Price. The exercise price per share shall be determined by
the Committee on the date the Independent SAR is granted.
(b) Term of Independent SAR. The term of an Independent SAR shall be
determined by the Committee, and, notwithstanding any other provision of this
Plan, no Independent SAR shall be exercised after the expiration of its term.
(c) Exercise of Independent SARs. Independent SARs shall be exercisable
at such time or times and subject to such terms and conditions as the Committee
shall specify in the Independent SAR grant. Unless the Independent SAR grant
specifies otherwise, the Committee shall have discretion at any time to
accelerate such time or times and otherwise waive or amend any conditions in
respect of all or any portion of the Independent SARs held by any participant.
Upon exercise of an Independent SAR, the holder shall receive, for each share
specified in the Independent SAR grant, an amount (the "Appreciation") equal to
the difference between the exercise price per share specified in the Independent
SAR grant and the fair market value (as determined by the Committee) of a share
of Common Stock on the date of exercise of the Independent SAR. The Appreciation
shall be payable in cash, Common Stock,
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<PAGE> 5
or a combination of both, at the option of the Committee, and shall be paid
within 30 days of the exercise of the Independent SAR.
(d) Shareholder Rights. The holder of an Independent SAR shall, as
such, have none of the rights of a shareholder.
(e) Termination of Employment. The Committee shall have discretion to
specify in the Independent SAR grant, or, with the consent of the holder, an
amendment thereof, provisions with respect to the period, not extending beyond
the term of the Independent SAR, during which the Independent SAR may be
exercised following the holder's termination of employment.
SECTION 2.4 Statutory Options. Subject to the limitations on Option
terms set forth in Section 2.1, the Committee shall have the authority to grant
(i) ISOs within the meaning of Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code"), and (ii) Options containing such terms and conditions
as shall be required to qualify such Options for preferential tax treatment
under the Code as in effect at the time of such grant, including, if then
applicable, limits with respect to minimum exercise price, duration and amounts
and special limitations applicable to any individual who, at the time the Option
is granted, owns stock possessing more than 10% of the total combined voting
power of all classes of stock of the Company or any affiliate. Options granted
pursuant to this Section 2.4 may contain such other terms and conditions
permitted by Article II of this Plan as the Committee, in its discretion, may
from time to time determine (including, without limitation, provision for Stock
Appreciation Rights), to the extent that such terms and conditions do not cause
the Options to lose their preferential tax treatment. If an Option intended to
be an ISO ceases or is otherwise not eligible to be an ISO, such Option (or
portion thereof necessary to maintain the status of the remaining portion of the
Option as an ISO) shall remain valid but be treated as an Option other than an
ISO.
SECTION 2.5 Change of Control. Notwithstanding the exercisability
schedule governing any Option or Stock Appreciation Right, upon the occurrence
of a Change of Control (as defined in Section 5.9) all Options and Stock
Appreciation Rights outstanding at the time of such Change of Control and held
by participants who are employees of the Company or its subsidiaries at the time
of such Change of Control shall (unless specifically provided otherwise in the
grant thereof) become immediately exercisable and, unless the participant agrees
otherwise in writing, remain exercisable for three years (but not beyond the
term of the Option or Stock Appreciation Right) after the employee's termination
of employment for any reason other than termination by the Company or a
subsidiary of the Company for dishonesty, conviction of a felony, wilful
unauthorized disclosure of confidential information or wilful refusal to perform
the duties of such employee's position or positions with the Company or such
subsidiary (termination for "cause"); provided that this Section 2.5 shall not
apply to Awards granted to a participant if, in connection with a Change of
Control pursuant to clause (1) of Section 5.9, such participant is the Person or
forms part of the Person specified in such clause (1).
ARTICLE III: RESTRICTED STOCK
SECTION 3.1 Terms and Conditions of Restricted Stock Awards. Subject to
the following provisions, all Awards of Restricted Stock under the Plan to
employees of the Company and
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<PAGE> 6
its Subsidiaries shall be in such form and shall have such terms and conditions
as the Committee, in its discretion, may from time to time determine consistent
with the Plan.
(a) Restricted Stock Award. The Restricted Stock Award shall specify
the number of shares of Restricted Stock to be awarded, the price, if any, to be
paid by the recipient of the Restricted Stock, and the date or dates on which
the Restricted Stock will vest. The vesting and number of shares of Restricted
Stock may be conditioned upon the completion of a specified period of service
with the Company or its Subsidiaries, upon the attainment of specified
performance objectives, or upon such other criteria as the Committee may
determine in accordance with the provisions hereof. Performance objectives will
be based on increases in share prices, operating income, margin, sales increases
on a Company wide, division, product line or other basis, net income before or
after taxes or before or after extraordinary charges, completions of successful
acquisitions, implementation of strategic expansions, net income or cash flow
thresholds, return on common equity or any combination of the foregoing.
(b) Restrictions on Transfer. Stock certificates representing the
Restricted Stock granted to an employee may be registered in the employee's name
or held by the Company prior to the achievement of certain criteria. Such
certificates shall either be held by the Company on behalf of the employee, or
delivered to the employee bearing a legend to restrict transfer of the
certificate until the Restricted Stock has vested, as determined by the
Committee. The Committee shall determine whether the employee shall have the
right to vote and/or receive dividends on the Restricted Stock before it has
vested. No share of Restricted Stock may be sold, transferred, assigned, or
pledged by the employee until such share has vested in accordance with the terms
of the Restricted Stock Award. Unless the grant of a Restricted Stock Award
specifies otherwise, in the event of an employee's termination of employment
before all the employee's Restricted Stock has vested, or in the event other
conditions to the vesting of Restricted Stock have not been satisfied prior to
any deadline for the satisfaction of such conditions set forth in the Award, the
shares of Restricted Stock that have not vested shall be forfeited and any
purchase price paid by the employee shall be returned to the employee. At the
time Restricted Stock vests (and, if the employee has been issued legended
certificates of Restricted Stock, upon the return of such certificates to the
Company), a certificate for such vested shares shall be delivered to the
employee or the employee's estate, free of all restrictions.
(c) Accelerated Vesting. Notwithstanding the vesting conditions set
forth in the Restricted Stock Award, (i) unless the Restricted Stock grant
specifies otherwise, the Committee may in its discretion at any time accelerate
the vesting of Restricted Stock or otherwise waive or amend any conditions of a
grant of Restricted Stock, and (ii) all shares of Restricted Stock shall vest
upon a Change of Control of the Company; provided that clause (ii) above shall
not apply to Awards granted to a participant if, in connection with a Change of
Control pursuant to clause (1) of Section 5.9, such participant is the Person or
forms part of the Person specified in such clause (1).
ARTICLE IV: PERFORMANCE AWARDS
SECTION 4.1 Terms and Conditions of Performance Awards. The Committee
shall be authorized to grant Performance Awards, which are payable in stock,
cash or a combination thereof, at the discretion of the Committee.
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<PAGE> 7
(a) Performance Period. The Committee shall establish with respect to
each Performance Award a performance period over which the performance goal of
such Performance Award shall be measured. The performance period for a
Performance Award shall be established prior to the time such Performance Award
is granted and may overlap with performance periods relating to other
Performance Awards granted hereunder to the same employee.
(b) Performance Objectives. The Committee shall establish a minimum
level of acceptable achievement for the holder at the time of each Award. Each
Performance Award shall be contingent upon future performances and achievement
of objectives described either in terms of Company-wide performance or in terms
that are related to performance of the employee or of the division, subsidiary,
department or function within the Company in which the employee is employed. The
Committee shall have the authority to establish the specific performance
objectives and measures applicable to such objectives. Such objectives, however,
shall be based on increases in share prices, operating income, margin, sales
increases on a Company wide, division, product line or other basis, net income
before or after taxes or before or after extraordinary charges, completions of
successful acquisitions, implementation of strategic expansions, net income or
cash flow thresholds, return on common equity or any combination of the
foregoing.
(c) Size, Frequency and Vesting. The Committee shall have the authority
to determine at the time of the Award the maximum value of a Performance Award,
the frequency of Awards and the date or dates when Awards vest.
(d) Payment. Following the end of each performance period, the holder
of each Performance Award will be entitled to receive payment of an amount, not
exceeding the maximum value of the Performance Award, based on the achievement
of the performance measures for such performance period, as determined by the
Committee. If at the end of the performance period the specified objectives have
been attained, the employee shall be deemed to have fully earned the Performance
Award. If the employee exceeds the specified minimum level of acceptable
achievement but does not fully attain such objectives, the employee shall be
deemed to have partly earned the Performance Award, and shall become entitled to
receive a portion of the total Award, as determined by the Committee. If a
Performance Award is granted after the start of a performance period, the Award
shall be reduced to reflect the portion of the performance period during which
the Award was in effect. Unless the Award specifies otherwise, including
restrictions in order to satisfy the conditions under Section 162(m) of the
Code, the Committee may adjust the payment of Awards or the performance
objectives if events occur or circumstances arise which would cause a particular
payment or set of performance objectives to be inappropriate, as determined by
the Committee.
(e) Termination of Employment. A recipient of a Performance Award who,
by reason of death, disability or retirement, terminates employment before the
end of the applicable performance period shall be entitled to receive, to the
extent earned, a portion of the Award which is proportional to the portion of
the performance period during which the employee was employed. A recipient of a
Performance Award who terminates employment for any other reason shall not be
entitled to any part of the Award unless the Committee determines otherwise;
however, the Committee may in no event pay the employee more than that portion
of the Award which is proportional to his or her period of actual service.
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<PAGE> 8
(f) Accelerated Vesting. Notwithstanding the vesting conditions set
forth in a Performance Award, (i) unless the Award specifies otherwise, the
Committee may in its discretion at any time accelerate vesting of the Award or
otherwise waive or amend any conditions (including but not limited to
performance objectives) in respect of a Performance Award, and (ii) all
Performance Awards shall vest upon a Change of Control of the Company. In
addition, each participant in the Plan shall receive the maximum Performance
Award he or she could have earned for the proportionate part of the performance
period prior to the Change of Control, and shall retain the right to earn any
additional portion of his or her Award if he or she remains in the Company's
employ. However, clause (ii) above shall not apply to Awards granted to a
participant if, in connection with a Change of Control pursuant to clause (1) of
Section 5.9, such participant is the Person or forms part of the Person
specified in such clause (1).
(g) Shareholder Rights. The holder of a Performance Award shall, as
such, have none of the rights of a shareholder.
ARTICLE V: ADDITIONAL PROVISIONS
SECTION 5.1 General Restrictions. Each Award under the Plan shall be
subject to the requirement that, if at any time the Committee shall determine
that (i) the listing, registration or qualification of the shares of Common
Stock subject or related thereto upon any securities exchange or under any state
or Federal law, or (ii) the consent or approval of any government regulatory
body, or (iii) an agreement by the recipient of an Award with respect to the
disposition of shares of Common Stock, is necessary or desirable (in connection
with any requirement or interpretation of any Federal or state securities law,
rule or regulation) as a condition of, or in connection with, the granting of
such Award or the issuance, purchase or delivery of shares of Common Stock
thereunder, such Award may not be consummated in whole or in part unless such
listing, registration, qualification, consent, approval or agreement shall have
been effected or obtained free of any conditions not acceptable to the
Committee.
SECTION 5.2 Adjustments for Changes in Capitalization. In the event of
any stock dividends, stock splits, recapitalizations, combinations, exchanges of
shares, mergers, consolidation, liquidations, split-ups, split-offs, spin-offs,
or other similar changes in capitalization, or any distribution to shareholders,
including a rights offering, other than regular cash dividends, changes in the
outstanding stock of the Company by reason of any increase or decrease in the
number of issued shares of Common Stock resulting from a split-up or
consolidation of shares or any similar capital adjustment or the payment of any
stock dividend, any share repurchase at a price in excess of the market price of
the Common Stock at the time such repurchase is announced or other increase or
decrease in the number of such shares, the Committee shall make appropriate
adjustment in the number and kind of shares authorized by the Plan (including
shares available for ISOs), in the number, price or kind of shares covered by
the Awards and in any outstanding Awards under the Plan; provided, however, that
no such adjustment shall increase the aggregate value of any outstanding Award.
In the event of any adjustment in the number of shares covered by any
Award, any fractional shares resulting from such adjustment shall be disregarded
and each such Award shall cover only the number of full shares resulting from
such adjustment.
SECTION 5.3 Amendments. (a) The Board of Directors may at any time and
from time to time and in any respect amend or modify the Plan.
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<PAGE> 9
(b) The Committee shall have the authority to amend any Award to
include any provision which, at the time of such amendment, is authorized under
the terms of the Plan; however, no outstanding Award may be revoked or altered
in a manner unfavorable to the holder without the written consent of the holder.
SECTION 5.4 Cancellation of Awards. Any Award granted under the Plan
may be cancelled at any time with the consent of the holder and a new Award may
be granted to such holder in lieu thereof, which Award may, in the discretion of
the Committee, be on more favorable terms and conditions than the cancelled
Award.
SECTION 5.5 Withholding. Whenever the Company proposes or is required
to issue or transfer shares of Common Stock under the Plan, the Company shall
have the right to require the holder to pay an amount in cash or to retain or
sell without notice, or demand surrender of, shares of Common Stock in value
sufficient to satisfy any Federal, state or local withholding tax liability
("Withholding Tax") prior to the delivery of any certificate for such shares (or
remainder of shares if Common Stock is retained to satisfy such tax liability).
Whenever under the Plan payments are to be made in cash, such payments shall be
net of an amount sufficient to satisfy any Federal, state or local withholding
tax liability.
Whenever Common Stock is so retained or surrendered to satisfy
Withholding Tax, the value of shares of Common Stock so retained or surrendered
shall be determined by the Committee, and the value of shares of Common Stock so
sold shall be the net proceeds (after deduction of commissions) received by the
Company from such sale, as determined by the Committee.
SECTION 5.6 Non-assignability. Except as expressly provided in the
Plan, no Award under the Plan shall be assignable or transferable by the holder
thereof except by will or by the laws of descent and distribution. During the
life of the holder, Awards under the Plan shall be exercisable only by such
holder or by the guardian or legal representative of such holder.
SECTION 5.7 Non-uniform Determinations. Determinations by the Committee
under the Plan (including, without limitation, determinations of the persons to
receive Awards; the form, amount and timing of such Awards; the terms and
provisions of such Awards and the agreements evidencing same; and provisions
with respect to termination of employment) need not be uniform and may be made
by it selectively among persons who receive, or are eligible to receive, Awards
under the Plan, whether or not such persons are similarly situated.
SECTION 5.8 No Guarantee of Employment. The grant of an Award under the
Plan shall not constitute an assurance of continued employment for any period or
any obligation of the Board of Directors to nominate any director for reelection
by the Company's shareholders.
SECTION 5.9 Change of Control. A "Change of Control" shall be deemed to
have occurred if:
(1) any Person (as defined below), other than a Designated
Person, is or becomes the Beneficial Owner (as defined below) of
securities of the Company representing 35% or more of the Voting Power
(as defined below);
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(2) there shall occur a change in the composition of a
majority of the Board of Directors within any period of four
consecutive years which change shall not have been approved by a
majority of the Board of Directors as constituted immediately prior to
the commencement of such period;
(3) at any meeting of the shareholders of the Company called
for the purpose of electing directors, more than one of the persons
nominated by the Board of Directors for election as directors shall
fail to be elected; or
(4) the shareholders of the Company approve a merger,
consolidation, sale of substantially all assets or other reorganization
of the Company, other than a reincorporation, in which the Company does
not survive.
For purposes of this Section 5.9, (i) "Person" shall have the meaning
set forth in Sections 3(a)(9) and 13(d)(3) of the Securities Exchange Act of
1934, as in effect on August 15, 1996, (ii) "Beneficial Owner" shall have the
meaning set forth in Rules 13d-3 and 13d-5 promulgated under the Exchange Act on
August 15, 1996; (iii) "Voting Power" shall mean the voting power of the
outstanding securities of the Company having the right under ordinary
circumstances to vote at an election of the Board of Directors; and (iv)
"Designated Person" shall mean any Person who at the Effective Date is a
Beneficial Owner of 10% or more of the Common Stock or whose Beneficial
Ownership of securities is solely the result of such Person acquiring securities
as an underwriter in an underwritten public offering of such securities.
SECTION 5.10 Duration and Termination. (a) The Plan shall be of
unlimited duration. Notwithstanding the foregoing, no ISO (within the meaning of
Section 422 of the Code) shall be granted under the Plan ten (10) years after
the effective date of the Plan, but Awards granted prior to such date may extend
beyond such date, and the terms of this Plan shall continue to apply to all
Awards granted hereunder.
(b) The Board of Directors may suspend, discontinue or terminate the
Plan at any time. Such action shall not impair any of the rights of any holder
of any Award outstanding on the date of the Plan's suspension, discontinuance or
termination without the holder's written consent.
SECTION 5.11 Effective Date. The Plan shall be effective as of August
12, 1996, subject to the consummation of the Sepco Merger.
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AMENDMENT
TO
INDEX, INC.
LONG-TERM INCENTIVE PLAN
ADOPTED BY THE COMPENSATION COMMITTEE MAY 12, 1997
SECTION 1.5 of the Index, Inc. Long-Term Incentive Plan is hereby
amended and restated in its entirety as follows:
SECTION 1.5 Shares Subject to the Plan. Initially, the
aggregate number of shares of Common Stock that may be issued under the
Plan shall be 400,000. In addition, as of January 1 of each year the
Plan is in effect, if the total number of shares of Common Stock issued
and outstanding, not including any shares issued under the Plan,
exceeds the total number of shares of Common Stock issued and
outstanding as of January 1 of the preceding year (or, for 1996, as of
the effective date of the merger (the "Effective Date") of a wholly
owned subsidiary of the Company with SEPCO Industries, Inc. (the "Sepco
Merger") assuming all shares issued pursuant to the Sepco Merger and
the proposed merger of a subsidiary of the Company with and into Newman
Communications, Inc are issued), the number of shares available will be
increased by an amount such that the total number of shares that may be
issued under the Plan shall be increased by an amount such that the
total number of shares of Common Stock available for issuance under the
Plan equals 5% of the total number of shares of Common Stock
outstanding, not including any shares issued under the Plan. Shares
distributed pursuant to the Plan may consist of authorized but unissued
shares or treasury shares of the Company, as shall be determined from
time to time by the Board of Directors.
If any Award under the Plan shall expire, terminate or be
cancelled (including cancellation upon an Option holder's exercise of a
related Stock Appreciation Right) for any reason without having been
exercised in full, or if any Award shall be forfeited to the Company,
the unexercised or forfeited Award shall not count against the above
limits and shall again become available for Awards under the Plan
(unless the holder of such Award received dividends or other economic
benefits with respect to such Award, which dividends or other economic
benefits are not forfeited, in which case the Award shall count against
the above limits). Shares of Common Stock equal in number to the shares
surrendered in payment of the option price, and shares of Common Stock
which are withheld in order to satisfy Federal, state or local tax
liability, shall count against the above limits. Only the number of
shares of Common Stock actually issued upon exercise of a Stock
Appreciation Right shall count against the above limits, and any shares
which were estimated to be used for such purposes and were not in fact
so used shall again become available for Awards under the Plan. Cash
exercises of Stock Appreciation Rights and cash settlement of other
Awards will not count against the above limits.
The aggregate number of shares of Common Stock subject to
Options or Stock Appreciation Rights that may be granted to any one
participant in any one year under the Plan shall be 200,000. The
aggregate number of shares of Common Stock that may be granted to any
one participant in any one year in
<PAGE> 12
respect of Restricted Stock shall be 200,000. The aggregate number of
shares of Common Stock that may be received by any one participant in
any one year in respect of a Performance Award shall be 200,000 and the
aggregate amount of cash that may be received by any one participant in
any one year in respect to a Performance Award shall be $500,000.
The total number of Awards (or portions thereof) settled in
cash under the Plan, based on the number of shares covered by such
Awards (e.g., 100 shares for a Stock Appreciation Right with respect to
100 shares), shall not exceed a number equal to (i) the number of
shares initially available for issuance under the Plan plus (ii) the
number of shares that have become available for issuance under the Plan
pursuant to the first paragraph of this Section 1.5.
The aggregate number of shares of Common Stock that are
available under the Plan for Options granted in accordance with Section
2.4(i) ("ISOs") is 400,000, subject to adjustments as provided in
Section 5.2 of the Plan.
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AMENDMENT
TO
INDEX, INC.
LONG-TERM INCENTIVE PLAN
ADOPTED BY THE BOARD OF DIRECTORS JANUARY 8, 1998
The first sentence of Section 1.5 of the Index, Inc. Long-Term
Incentive Plan is hereby replaced and amended to read as follows:
SECTION 1.5 Shares Subject to the Plan. The aggregate number
of shares of Common Stock that may be issued under the Plan shall be
660,000, of which 260,000 shares may not be issued pursuant to stock
options intended to qualify as incentive stock options within the
meaning of Section 422(b) of the Internal Revenue Code of 1986, as
amended, or pursuant to awards granted to executive officers of the
Company.
<PAGE> 14
Amendment
to
Index, Inc.
Long-Term Incentive Plan
Adopted by the Board of Directors July 6, 1998
1. The name of the Index, Inc. Long-Term Incentive Plan, as amended
(the "Plan") is hereby changed to the DXP Enterprises, Inc. Long-Term Incentive
Plan.
2. Section 1.1 of the Plan is hereby amended and restated in its
entirety as follows:
SECTION 1.1 Purpose of the Plan. The Long-Term Incentive Plan
(the "Plan") of DXP Enterprises, Inc. (the "Company") is intended to
advance the best interests of the Company, its subsidiaries and its
shareholders in order to attract, retain and motivate key employees by
providing them with additional incentives through (i) the grant of
options ("Options") to purchase shares of Common Stock, par value $.01
per share, of the Company ("Common Stock"), (ii) the grant of stock
appreciation rights ("Stock Appreciation Rights"), (iii) the award of
shares of restricted Common Stock ("Restricted Stock") and (iv) the
award of units payable in cash or shares of Common Stock based on
performance ("Performance Awards"), thereby increasing the personal
stake of such key employees in the continued success and growth of the
Company.
<PAGE> 15
AMENDMENT
TO
DXP ENTERPRISES, INC.
LONG-TERM INCENTIVE PLAN
ADOPTED BY THE COMPENSATION COMMITTEE JULY 17, 1998
Section 1.5 of the DXP Enterprises, Inc. Long-Term Incentive Plan, as
amended, is hereby amended and restated in its entirety as follows:
SECTION 1.5 Shares Subject to the Plan. The aggregate number
of shares of Common Stock that may be issued under the Plan shall be
330,000, of which 130,000 shares may not be issued pursuant to stock
options intended to qualify as incentive stock options within the
meaning of Section 422(b) of the Internal Revenue Code of 1986, as
amended, or pursuant to awards granted to executive officers of the
Company. In addition, as of January 1 of each year the Plan is in
effect, if the total number of shares of Common Stock issued and
outstanding, not including any shares issued under the Plan, exceeds
the total number of shares of Common Stock issued and outstanding as of
January 1 of the preceding year (or, for 1996, as of the effective date
of the merger (the "Effective Date") of a wholly owned subsidiary of
the Company with SEPCO Industries, Inc. (the "Sepco Merger") assuming
all shares issued pursuant to the Sepco Merger and the proposed merger
of a subsidiary of the Company with and into Newman Communications,
Inc. are issued), the number of shares available will be increased by
an amount such that the total number of shares that may be issued under
the Plan shall be increased by an amount such that the total number of
shares of Common Stock available for issuance under the Plan equals 5%
of the total number of shares of Common Stock outstanding, not
including any shares issued under the Plan. Shares distributed pursuant
to the Plan may consist of authorized but unissued shares or treasury
shares of the Company, as shall be determined from time to time by the
Board of Directors.
If any Award under the Plan shall expire, terminate or be
cancelled (including cancellation upon an Option holder's exercise of a
related Stock Appreciation Right) for any reason without having been
exercised in full, or if any Award shall be forfeited to the Company,
the unexercised or forfeited Award shall not count against the above
limits and shall again become available for Awards under the Plan
(unless the holder of such Award received dividends or other economic
benefits with respect to such Award, which dividends or other economic
benefits are not forfeited, in which case the Award shall count against
the above limits). Shares of Common Stock equal in number to the shares
surrendered in payment of the option price, and shares of Common Stock
which are withheld in order to satisfy Federal, state or local tax
liability, shall count against the above limits. Only the number of
shares of Common Stock actually issued upon exercise of a Stock
Appreciation Right shall count against the above limits, and any shares
which were estimated to be used for such purposes and were not in fact
so used shall again become available for Awards under the Plan. Cash
exercises of Stock Appreciation Rights and cash settlement of other
Awards will not count against the above limits.
<PAGE> 16
The aggregate number of shares of Common Stock subject to
Options or Stock Appreciation Rights that may be granted to any one
participant in any one year under the Plan shall be 100,000. The
aggregate number of shares of Common Stock that may be granted to any
one participant in any one year in respect of Restricted Stock shall be
100,000. The aggregate number of shares of Common Stock that may be
received by any one participant in any one year in respect of a
Performance Award shall be 100,000 and the aggregate amount of cash
that may be received by any one participant in any one year in respect
to a Performance Award shall be $500,000.
The total number of Awards (or portions thereof) settled in
cash under the Plan, based on the number of shares covered by such
Awards (e.g., 100 shares for a Stock Appreciation Right with respect to
100 shares), shall not exceed a number equal to (i) the number of
shares initially available for issuance under the Plan plus (ii) the
number of shares that have become available for issuance under the Plan
pursuant to the first paragraph of this Section 1.5.
The aggregate number of shares of Common Stock that are
available under the Plan for Options granted in accordance with Section
2.4(i) ("ISOs") is 200,000, subject to adjustments as provided in
Section 5.2 of the Plan.
-2-
<PAGE> 1
EXHIBIT 5.1
[FULBRIGHT & JAWORSKI L.L.P. LETTERHEAD]
August 20, 1998
DXP Enterprises, Inc.
580 Westlake Park Boulevard, Suite 1100
Houston, Texas 77079
Ladies and Gentlemen:
We have acted as counsel for DXP Enterprises, Inc., a Texas
corporation (the "Company"), in connection with the registration under the
Securities Act of 1933, as amended, of 330,000 shares of the Company's common
stock, $.01 par value (the "Shares"), to be offered upon the terms and subject
to the conditions set forth in the DXP Enterprises, Inc. Long-Term Incentive
Plan, as amended (the "Plan").
In connection therewith, we have examined originals or copies
certified or otherwise identified to our satisfaction, of the Restated Articles
of Incorporation, as amended, of the Company, the Bylaws of the Company, the
Plan, records of relevant corporate proceedings with respect to the offering of
the Shares and such other documents and instruments as we have deemed necessary
or appropriate for the expression of the opinions contained herein. We have
also reviewed the Company's Registration Statement on Form S-8 to be filed with
the Securities and Exchange Commission with respect to the Shares (the
"Registration Statement").
We have assumed the authenticity and completeness of all records,
certificates and other instruments submitted to us as originals, the conformity
to original documents of all records, certificates and other instruments
submitted to us as copies, the authenticity and completeness of the originals
of those records, certificates and other instruments submitted to us as copies
and the correctness of all statements of fact contained in all records,
certificates and other instruments that we have examined.
Based on the foregoing and having regard for such legal
considerations as we have deemed relevant, we are of the opinion that the
Shares have been duly authorized and, when issued in accordance with the terms
of the Plan, will be validly issued, fully paid and non-assessable.
The opinions expressed herein are limited exclusively to laws of
the State of Texas and the federal laws of the United States of America, to the
extent applicable.
We hereby consent to the filing of this opinion as an exhibit to
the Registration Statement.
Very truly yours,
/s/ FULBRIGHT & JAWORSKI L.L.P.
Fulbright & Jaworski L.L.P.
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference into the DXP Enterprises, Inc. Registration
Statement on Form S-8 of our report dated January 30, 1998, included in DXP
Enterprise Inc.'s Annual Report on Form 10-K for the year ended December 31,
1997.
ARTHUR ANDERSEN LLP
Houston, Texas
August 20, 1998
