<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
VALLEY FORGE CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
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<PAGE> 2
VALLEY FORGE CORPORATION
100 SMITH RANCH ROAD, SUITE 326
SAN RAFAEL, CALIFORNIA 94903
NOTICE OF ANNUAL STOCKHOLDERS' MEETING
TO OUR STOCKHOLDERS:
The annual meeting of the stockholders of Valley Forge Corporation, a Georgia
corporation, will be held on June 12, 1997, at 10:00 a.m., Pacific time, at the
offices of the Company, located at 100 Smith Ranch Road, Suite 326, San Rafael,
California 94903. The items of business to be transacted at this meeting are as
follows:
1. Election of the Board of Directors of five people for the ensuing year.
2. Approval and adoption of an Agreement and Plan of Merger for the
Reincorporation of the Company in Delaware.
3. Transaction of such other business as may properly come before the
meeting or any adjournment thereof.
The Board of Directors has specified April 25, 1997, at the close of business as
the record date for the purpose of determining the stockholders who are entitled
to receive notice of and to vote at the annual meeting. A list of the
stockholders entitled to vote at the annual meeting will be available for the
examination of any stockholder at the meeting.
The Proxy Statement for the annual meeting is set forth on the following pages.
So that as many shares as possible may be represented at this meeting, we urge
you to promptly sign, date, and return your proxy in the enclosed,
self-addressed envelope. If you attend the meeting, you may revoke the proxy and
vote your shares in person if you desire to do so.
Sincerely,
Monica J. Burke
Secretary - Treasurer
Dated: May 1, 1997
<PAGE> 3
PROXY STATEMENT OF THE BOARD OF DIRECTORS
FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 12, 1997
GENERAL INFORMATION
This Proxy Statement and the accompanying Proxy and other enclosures are being
mailed beginning May 1, 1997, to holders of common stock of Valley Forge
Corporation, a Georgia Corporation (the "Company"), in connection with the
stockholders' meeting to be held on June 12, 1997, at 10:00 a.m., Pacific
Standard time, at the Company's offices at 100 Smith Ranch Road, Suite 326, San
Rafael, California 94903, or at any adjournment thereof (the "Meeting"). Proxies
are solicited to provide all stockholders of the Company with the opportunity to
vote. Shares may only be voted at the Meeting if the stockholder is present in
person or is represented by a proxy.
COSTS OF SOLICITATION OF PROXIES
The Company will bear the cost of preparing, mailing, and soliciting Proxies. In
addition to solicitations by mail, the directors, officers, and regular
employees of the Company may solicit proxies personally and by telephone,
telegraph, or other means, for which they will receive no compensation in
addition to their normal compensation.
VOTING RIGHTS AND REVOCABILITY OF PROXIES
Only holders of the Company's common stock, par value $.50 per share ("Common
Stock"), of record at the close of business on April 25, 1997, are entitled to
notice of and to vote at the Meeting. Holders of the Common Stock will be
entitled to one vote on all matters properly coming before the Meeting for each
share registered in their names on the record date specified above. On April 25,
1997, ___________ shares of the Company's Common Stock were issued, of which
___________ shares were outstanding and will be entitled to vote at the Meeting
( ____________ shares of Common Stock are treasury shares and are not entitled
to vote). The Company has no other classes of securities issued and outstanding.
On December 6, 1995, the Company's Board of Directors authorized a three-for-two
stock split effected in the form of a 50% stock dividend distributed on March
12, 1996, to shareholders of record on March 1, 1996. Accordingly, unless
otherwise indicated, all information contained in this proxy reflects this stock
split.
The By-Laws of the Company require that a quorum be present at all meetings of
stockholders before the stockholders may conduct business. A quorum consists of
the holders of record of a majority of the shares of Common Stock, issued and
outstanding, entitled to vote at the meeting, and present in person or by proxy.
When a proxy is returned properly signed and dated, the person designated as
proxy shall vote the shares represented by the proxy in accordance with the
stockholder's directions. If a proxy is signed, dated, and returned without
specifying choices on one or more matters presented to the stockholders, the
shares will be voted on such matter or matters as recommended by the Company's
Board of Directors.
Abstentions will be treated as shares present and entitled to vote for purposes
of determining the presence of a quorum. Each stockholder is entitled to one
vote, in person or by proxy, for each share of stock held of record in his or
her name on the books of the Company as of the record date on any matter
submitted to the stockholders. The Company's By-Laws do not authorize cumulative
voting. Approval of Item Two requires the affirmative vote of the holders of a
majority of the shares of Common Stock outstanding and entitled to vote at the
Meeting. Accordingly, abstentions from voting on any matter other than in the
election of directors will have the effect of a vote "AGAINST" the proposal.
A stockholder giving a proxy may revoke it by (i) delivering a written notice of
revocation to the Secretary of the Company at the office of the Company
identified above at any time before the commencement of the Meeting or any
adjournments thereof; (ii) attending the Meeting in person and voting; or (iii)
executing a proxy bearing a date and time later than that of the proxy to be
revoked. Revocation of the proxy will not affect any vote previously taken.
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<PAGE> 4
Brokers and nominees holding Common Stock in "street name" who are members of a
stock exchange are required by the rules of the exchange to transmit this Proxy
Statement to the beneficial owner of the Common Stock and to solicit voting
instructions with respect to the matters submitted to the Shareholders. In the
event any such broker or nominee has not received instructions from the
beneficial owner by the date specified in the statement accompanying such
material, the broker or nominee may give or authorize the giving of a Proxy to
vote such Common Stock on the matters to be considered at the Meeting; provided,
however, that the broker or nominee may not give or authorize the giving of a
Proxy for any matter if it has notice of any contest with respect to any matter,
and, provided, further, that the broker or nominee may not vote the Common Stock
"FOR" any matter which substantially affects the rights or privileges of the
Common Stock without specific instructions from the beneficial owner. If you
hold Common Stock in "street name" and you fail to instruct your broker or
nominee as to how to vote such Common Stock, your broker or nominee may, in its
discretion, vote such Common Stock "FOR" the election of the Board of Directors'
nominees and "FOR" the approval of the Company's reincorporation in the State of
Delaware.
Unless revoked, the shares of Common Stock represented by proxies will be voted
in accordance with the instructions given thereon. In the absence of any
instruction in the Proxy, your shares of Common Stock will be voted in favor (i)
"FOR" the election of the nominees for director set forth herein and (ii) "FOR"
the approval and adoption of an Agreement and Plan of Merger (the "Merger
Agreement") between the Company and VFC Delaware, Inc. ("VCF Delaware"), a newly
formed Delaware corporation and a wholly-owned subsidiary of the Company,
providing for the Reincorporation (the "Reincorporation") of the Company in
Delaware pursuant to a statutory merger of the Company into VFC Delaware.
The Meeting has been called for the purposes set forth in the Notice of Annual
Stockholders' Meeting (the "Notice") to which this Proxy Statement is appended.
The Board of Directors does not anticipate that matters other than those
described in the Notice will be brought before the Meeting for stockholder
action, but if any other matters properly come before the Meeting, votes thereon
will be cast by the proxy holder in accordance with her best judgment.
If a stockholder wishes to give a proxy to someone other than the person
indicated on the accompanying proxy, he must cross out the names appearing on
the proxy and insert the name or names of another person or persons to act as
proxies. The signed proxy must be presented at the Meeting by the person or
persons representing the stockholder.
A copy of the Company's 1996 Annual Report to its stockholders is enclosed
herewith. Stockholders may obtain additional copies of the Annual Report without
charge upon written request to the Company's Secretary at the Company's offices.
ITEM 1. ELECTION OF DIRECTORS
The Company's By-Laws authorize a Board of Directors of nine persons, but at no
time since 1974 have all directors' positions been filled. At the Company's 1996
annual meeting of stockholders, Messrs. Bloom, Desloge, Brining, Dressel, and
Warner were elected.
The Board of Directors has nominated all of its present members for election as
directors for a term of one year or until their successors are elected and
qualified.
All nominees have indicated their willingness to serve and, unless otherwise
specified on the proxy, it is the intention of the proxy holder to vote for the
Nominees listed below. No proxy may be voted for more than five persons. If
events not now known or anticipated make any of the Nominees unable to serve,
the Proxies will be voted at the discretion of the proxy holder. In the election
of directors, the five persons receiving the highest number of votes will be
elected.
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<PAGE> 5
The following sets forth biographical information of the five nominees for
director and of the Executive Officers of the Company:
<TABLE>
<CAPTION>
Year First
Name and Age Principal Occupation Elected Director
------------ -------------------- ----------------
<S> <C> <C>
NOMINEES FOR DIRECTORS:
Martin J. Bloom (66) Co-Chairman of the Board 1983
100 Smith Ranch Road, since July 1984
Suite 326
San Rafael, CA 94903-1994
Theodore P. Desloge, Jr. (57) Co-Chairman of the Board 1983
100 Smith Ranch Road, since July 1984
Suite 326
San Rafael, CA 94903-1994
David R. Brining (54) President, Chief 1981
100 Smith Ranch Road, Executive Officer,
Suite 326 and Director of the
San Rafael, CA 94903-1994 Company since July
1981
Phillip F. Dressel (60) Retired, formerly 1985
100 Smith Ranch Road, President of
Suite 326 Consolidated Flavor
San Rafael, CA 94903-1994 Corporation
Dale J. Warner (74) Retired, formerly a 1983
100 Smith Ranch Road, Director of Gits
Suite 326 Bros. Mfg. Co., a
San Rafael, CA 94903-1994 subsidiary of the
Company
EXECUTIVE OFFICER:
Monica J. Burke (45) Vice President Finance
and Secretary of the
Company
</TABLE>
Mr. Bloom has been a Director of the Company since July 1983, Co-Chairman of the
Board since July 1984, and is a Director for most of the Company's subsidiaries.
He is a past Director and Chairman of the Board of Park `N Fly, Inc., an
operator of off-airport parking services.
Mr. Desloge has been a Director of the Company since July 1983 and Co-Chairman
of the Board since July 1984. He is a past Director and Chairman of the Board of
Park `N Fly, Inc.
Mr. Brining has been President, CEO, and a Director of the Company since 1981.
He has served as a Director or Chairman of each of the Company's subsidiaries
since their acquisition.
Mr. Dressel has been a Director of the Company since 1985. He was Chairman of
the Board and President of Consolidated Flavor Corporation, a privately held
flavoring business located in St. Louis, Missouri.
Mr. Warner has been a Director of the Company since 1983. He was a Director of
Gits Bros. Mfg. Co. for more than six years.
Ms. Burke has served as Vice President Finance and Secretary since November
1988.
None of the directors, nominees for director, or Executive Officers were
selected pursuant to any arrangement or understanding. There are no family
relationships among directors or Executive Officers of the Company, and as of
the date hereof, no directorships are held by any director with a company which
has a class of securities registered pursuant to Section 12 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") or subject to the
requirements of Section 15(d) of the Exchange Act or any company registered as
an investment company under the Investment Company Act of 1940, except for Mr.
Desloge, who is a director of Mississippi Valley Bancshares.
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<PAGE> 6
THE BOARD OF DIRECTORS AND COMMITTEES
The Corporation's Board of Directors met twice during 1996. The Board of
Directors has two committees, the Compensation Committee and the Audit Committee
and does not have a nominating committee. All of the persons who were directors
of the Company during 1996 attended at least 75% of (1) the total number of
Board meetings and (2) the total number of meetings held by all committees on
which they served.
The members of the Audit Committee are Messrs. Brining, Dressel, and Warner. The
Audit Committee met once during 1996. The Audit Committee reviews and reports to
the Board on various auditing and accounting matters, including the annual audit
report from the Company's independent accountants.
The members of the Compensation Committee are Messrs. Bloom, Desloge, and
Dressel. For a description of the functions of the Compensation Committee, see
"Report of the Compensation Committee on Executive Compensation." The Committee
met once during 1996.
SECTION 16(a) BENEFICIAL OWNERSHIP
Under Section 16(a) of the Exchange Act, the Company's directors, Executive
Officers, and any persons holding ten percent or more of Common Stock are
required to report their ownership of Common Stock and any changes in that
ownership to the Securities and Exchange Commission (the "SEC") and to furnish
the Company with copies of such reports. Specific due dates for these reports
have been established and the Company is required to report in this Proxy
Statement any failure to file on a timely basis by such persons. Mr. Dressel was
delinquent in filing a Form 4 for one transaction during 1996.
SECURITY OWNERSHIP
The following table sets forth certain information with respect to the
beneficial ownership of the Common Stock as of April 1, 1997, by (i) each
stockholder known by the Company to own beneficially more than five percent (5%)
of the outstanding Common Stock, (ii) each director of the Company, (iii) the
Company's Chief Executive Officer, (iv) all Executive Officers and directors of
the Company as a group. Except as otherwise indicated below, each of the
entities named in the table has sole voting and investment power with respect to
all shares of Common Stock beneficially owned by such entity as set forth
opposite such entity's name, subject to community property laws where
applicable. No effect has been given to shares reserved for issuance under
outstanding stock options except where otherwise indicated.
<TABLE>
<CAPTION>
Number of Shares
Beneficial Owner Beneficially Owned(1) Percent
---------------- --------------------- -------
<S> <C> <C>
Martin J. Bloom 624,304(2), (3) 23.31%
Theodore P. Desloge, Jr. 665,179(3) 24.83
David R. Brining 262,725(4) 9.67%
Phillip F. Dressel 79,049(5) 2.95%
All directors and officers 1,642,507(6) 60.30%
as a group
FMR Corporation
82 Devonshire Street
Boston, MA 02109 229,200(7) 8.56%
</TABLE>
(1) Except as otherwise noted, each person has sole voting and investment power
with respect to the shares listed subject to community property laws where
applicable.
(2) Does not include 15,000 shares (.56%) owned by Mr. Bloom's wife with respect
to which Mr. Bloom disclaims beneficial ownership.
(3) Includes 126,852 shares owned by Bloom & Desloge Enterprises, Inc., a
corporation in which Messrs. Bloom and Desloge are each 50% stockholders.
Bloom and Desloge Enterprises, Inc. owns a total of 253,704 shares of common
stock.
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<PAGE> 7
(4) Includes options to purchase 37,500 shares at $11.08 per share. Does not
include 1,425 shares (.05%) owned by Mr. Brining's wife with respect to
which Mr. Brining disclaims beneficial ownership.
(5) Represents shares deposited under trust agreements for the benefit of Mr.
Dressel.
(6) Includes options to purchase 6,750 shares at $4.83 per share and 750 shares
at $13.625 per share purchasable by an officer. In addition to the
disclaimed shares described in (2) and (4) above, does not include 5,400
shares (.20%) held in trust by Mr. Warner's wife with respect to which Mr.
Warner disclaims beneficial ownership.
(7) Based solely upon a Schedule 13G dated February 14, 1997. Of the 229,200
shares shown as beneficially owned by FMR Corporation, 229,200 are
beneficially owned by Fidelity Management Research Company ("Fidelity
Research"), a wholly-owned subsidiary of FMR Corporation and investment
advisor of several investment companies. FMR Corporation and its chairman,
Edward C. Johnson 3rd, each has sole power to dispose of the shares owned by
Fidelity Research, but neither FMR Corporation nor Mr. Johnson has the sole
power to vote or to direct the voting of such shares.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
EXECUTIVE OFFICERS' COMPENSATION
The following table shows certain summary information concerning compensation
paid or accrued by the Company to or on behalf of the Company's Chief Executive
Officer and the other named executive officer ("Executive Officers")of the
company whose compensation exceeds $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation
----------------------------------- Long-Term
Name and Fiscal Other Annual Compensation All Other
Principal Position Year Salary Bonus Compensation(1) Options Compensation(2)
- ------------------ ---- ------ ----- --------------- ------- ---------------
<S> <C> <C> <C> <C> <C> <C>
David R. Brining, 1996 $300,067 $ 77,250 $6,203 0 $17,149
CEO(3) 1995 276,317 135,725 6,600 0 17,073
1994 254,817 190,500 5,351 75,000 16,489
Monica J. Burke, 1996 114,583 19,675 0 3,000 13,256
Vice President 1995 109,667 31,500 0 0 13,514
Finance(3) 1994 105,667 40,800 0 0 11,339
</TABLE>
(1) In August, 1987 and incident to the relocation of the corporate headquarters
from St. Louis, Missouri to San Rafael, California, the Company accepted a
$75,000 demand, non-interest bearing note from Mr. Brining. The amounts
included under Other Annual Compensation represent interest calculated at
the prime rate on the demand note.
(2) Represents amounts contributed to the Company's two profit sharing plans.
(3) Mr. Brining and Ms. Burke also serve as officers of each of the Company's
subsidiaries.
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<PAGE> 8
OPTION GRANTS IN 1996
OPTION EXERCISES AND HOLDINGS
<TABLE>
<CAPTION>
Potential
Realizable Value
at Assumed Annual
Rates
of Stock Price
Appreciation
for Option Term
Percent
of
Total Exercise
Named Options Options Price Expiration
Executive Granted Granted per Share Date 5% 10%
- --------- ------- ------- --------- -------------- -- ---
<S> <C> <C> <C> <C> C> <C>
Monica J. Burke 3,000 8% $13.625 March 15, 2003 $17,000 $39,000
All N/A N/A N/A N/A $14,797,000 $34,484,000
Shareholders(1)
</TABLE>
(1)The hypothetical return presented is not intended as a projection of the
future performance of the Company's Common Stock, but rather is provided for
illustrative purposes only.
The following table provides information with respect to the Executive Officers
concerning the exercise of options during the fiscal year ended December 31,
1996, and unexercised options held by the Executive Officers as of December 31,
1996:
Aggregated Option(1) Exercises in Fiscal Year 1996
and Fiscal Year-End Option Values
<TABLE>
<CAPTION>
Value of Unexercised,
Shares Number of Unexercised In the Money
Named Acquired On Value Options Held at Year End Options Held at Year End(2)
Executives Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
---------- -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
David R. Brining 0 $ 0 37,500 37,500 $100,125 $100,125
Monica J. Burke 0 0 6,750 3,000 60,210 375
</TABLE>
(1) The Company has no plans pursuant to which stock appreciation rights (SARs)
may be granted.
(2) Value of unexercised "in the money" options is the difference between the
market price of the Common Stock on December 31, 1996 ($13.75 per share) and
the exercise price of the option, multiplied by the number of shares subject
to the option.
EMPLOYMENT AGREEMENTS
There are no employment contracts or termination agreements with the Executive
Officers.
STOCK OPTIONS
The Board of Directors adopted the Company's 1987 Stock Option Plan on May 29,
1987, which was most recently amended, restated, and approved by the Company's
shareholders at the 1996 Annual Meeting of Shareholders ("Stock Option Plan").
As of April 1, 1997, there were 750,000 shares of common stock reserved for
issuance under the Stock Option Plan, of which 220,875 shares had been issued
upon exercise of options, 256,875 shares were subject to outstanding options,
and 272,250 were available for granting new options.
The purpose of the Plan is to enable the Company to attract, retain and motivate
officers, directors, employees, and independent contractors by providing for or
increasing their proprietary interests in the Company and, in the case of
non-employee directors, to attract such directors and further align their
interests with those of the Company's shareholders by providing for or
increasing their proprietary interests in the Company. The Plan authorizes the
grant of options which qualify as "incentive stock options" ("Incentive Stock
Options") under Section 422 of the Internal Revenue Code of 1986, as amended,
and options which do not qualify as Incentive Stock Options ("Nonqualified Stock
Options").
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<PAGE> 9
The Stock Option Plan is currently administered by the Compensation Committee of
the Company. The Compensation Committee has full power and authority in its
discretion to take any and all action required or permitted to be taken under
the Stock Option Plan, including the selection of participants to whom stock
options may be granted, the determination of the number of shares which may be
covered by stock options, the exercise price, and other terms and conditions
thereof.
If any option granted under the Stock Option Plan shall for any reason expire,
be canceled, or otherwise terminate without having been exercised in full, the
shares not purchased under such option shall again become available for the
Stock Option Plan. Generally, the exercise price of each option is determined by
the Board of Directors or the Compensation Committee and is not less than 100%
of the fair market value of the Common Stock subject to the option on the date
the option is granted. Typically, the purchase price of Common Stock acquired
pursuant to an option shall be paid in cash or check payable to the order of the
Company at the time the option is exercised. In general, no option under the
Stock Option Plan may extend more than ten years from the date of grant.
Except in the case of the Reincorporation, the Stock Option Plan and any option
or portion thereof not exercised will terminate upon the occurrence of a
terminating event, including, but not limited to, a liquidation, reorganization,
merger, or consolidation of the Company with another corporation as a result of
which the Company is not the surviving or resulting corporation, or a sale of
substantially all the assets of the Company to another person, or a reverse
merger in which the Company is the surviving corporation but the shares of the
Company's stock outstanding immediately preceding the merger are converted by
virtue of the merger into other property (a "Triggering Event"). The Committee
shall notify each optionee not less than thirty days prior thereto of the
pendency of a Triggering Event. Upon delivery of such notice, any option
outstanding shall be exercisable in full and not only as to those shares with
respect to which installments, if any, have then accrued, subject, however, to
earlier expiration or termination as provided elsewhere in the Stock Option Plan
and subject to the consummation of the Triggering Event. The Board of Directors
may also suspend or terminate the Stock Option Plan at any time. Unless sooner
terminated, the Stock Option Plan shall terminate ten years from its effective
date, June 12, 1996.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation Committee of the Company establishes, implements, and monitors
general policies regarding compensation for the Company's employees, adopts and
amends employee compensation plans, and approves specific compensation levels
for Executive Officers, including the Executive Officers. Currently, the members
of the Compensation Committee are Martin J. Bloom, Theodore P. Desloge, Jr., and
Phillip F. Dressel. Each member of the Compensation Committee is a non-employee
director of the Company.
Set forth below is a report of the Compensation Committee addressing the
Company's compensation policies for 1996 applicable to the Company's executives,
including the Executive Officers.
The Report of the Compensation Committee on Executive Compensation shall not be
deemed incorporated by reference by any general statement incorporating by
reference this Proxy Statement into any filing under the Securities Act of 1933
(the "Securities Act") or under the Exchange Act, except to the extent that the
Company specifically incorporates this information by reference, and shall not
otherwise be deemed filed under such Acts.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Company's compensation programs reflect the philosophy that executive
compensation levels should be linked to Company performance, yet be competitive
and consistent with that provided to others holding positions of similar
responsibility in the recreational products and manufactured industrial products
industries. The Company's compensation plans are designed to assist the Company
in attracting and retaining qualified employees critical to the Company's
long-term success, while enhancing employees' incentives to perform to their
fullest abilities to increase profitability and thus maximize shareholder value.
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<PAGE> 10
Salary Compensation
The Company pays cash salaries which it believes are competitive with salaries
paid to executives of other companies in the recreational products and
manufactured industrial products industries based upon the individual's
experience and past and potential contribution to the Company.
Mr. Brining's annual base salary was $300,067 for 1996. This amount represents
an increase of $23,750, or 8.6%, over Mr. Brining's base salary for 1995. The
increase was set by the Compensation Committee in June 1996 to maintain
competitive positioning versus comparable companies based on an analysis of
comparable company compensation practices as prepared by outside consultants.
Subsidiary Incentive Compensation
In 1990, as a result of Mr. Brining's recommendation and efforts, the Company
developed and implemented the Subsidiary Incentive Compensation Plan (the "Bonus
Plan") whereby individual compensation is directly linked to the performance of
the Company's subsidiary (the "Subsidiaries" or "Subsidiary"). The Bonus Plan
and the Company's salary deferral 401(k) Plan (the "401(k) Plan"), and the
Company's Profit Sharing Plan (the "Profit Sharing Plan") are the three programs
under which employees of the Company or the Subsidiaries may receive cash
contributions and/or bonuses. The Executive Officers are not eligible to receive
bonuses under this Bonus Plan. However, the Executive Officers are eligible for
bonuses under the Valley Forge Corporate Incentive Compensation Plan (the
"Corporate Bonus Plan").
Valley Forge Corporate Incentive Compensation Plan
The Compensation Committee authorized the payment of bonus compensation in 1996
to Mr. Brining and Ms. Burke based upon the Company's achievement of certain
sales and return on equity objectives set by the Compensation Committee. The
specific bonuses for Mr. Brining and Ms. Burke were 26% and 17%, respectively,
of his and her base salaries.
401(k) Plan
The Company adopted the salary deferral 401(k) Plan in August 1992 which
benefits all employees at the corporate headquarters and certain domestic
subsidiaries in which the Company has an ownership interest in excess of 80%.
The 401(k) Plan is a pretax salary deduction retirement program with a mandatory
matching funds feature. It encourages participants to adopt a regular savings
program to defer part of their pretax compensation to provide security for their
retirement. Employees who meet certain service and length of employment
requirements are eligible to participate. The Company provides matching
contributions of 100% of the employee's own contributions into the 401(k) Plan,
up to 3% of each employee's covered compensation. For 1996, the Company made a
matching contribution of $8,883 for the benefit of the Executive Officers'
401(k) Plan accounts.
Profit Sharing Plan
The Company sponsors a profit sharing plan for the benefit of the corporate
headquarters and two Subsidiaries. The Chief Executive Officer of the Company
makes a discretionary allocation of the compensation amount calculated pursuant
to the Corporate Bonus Plan to be contributed to the Profit Sharing Plan (the
"Profit Sharing Amount") for the benefit of the eligible employees of the
corporate headquarters at the close of the fiscal year. The Profit Sharing
Amount is distributed to eligible employees in proportion primarily to the
employee's base salary of such year. The Company made a profit sharing
contribution of 5.2% of the Executive Officers' aggregate base salary to the
Executive Officers for 1996 from the Profit Sharing Amount.
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<PAGE> 11
Stock-Based Compensation
The Company also believes that stock ownership by directors, officers,
employees, and consultants provides valuable long-term incentives for such
persons who will benefit as the Common Stock price increases and that
stock-based performance compensation arrangements are beneficial in aligning
employees' and stockholders' interests. Further, the Company believes that the
Company's policy of encouraging stock ownership serves an important function in
attracting, retaining, and motivating such persons, and accordingly, in the
growth and success of the Company. To facilitate these objectives, the Company
adopted the Stock Option Plan in 1987, which was most recently amended and
restated in 1996.
Through the Stock Option Plan, stock options have been granted to employees of
the Company, including the Executive Officers. Non-employee directors and
consultants are eligible to participate in the Stock Option Plan, but at the
present time there are no outstanding stock options held by such persons and
none have ever been exercised. The Stock Option Plan is administered by the
Compensation Committee.
Other Compensation
The Executive Officers also participate in the Company's broad-based employee
benefit plans, such as the Company's medical, supplemental disability, and term
life insurance plans.
Currently, the Company's compensation programs described above, including stock
option plans, will not qualify for the exception to the $1,000,000 limit under
Section 162(m) of the Internal Revenue Code on total compensation for named
executives as structured. The Compensation Committee has no plans to revise the
Company's compensation programs to qualify for the exception since the level of
total compensation for each named executive is not currently subject to this
limit nor is it expected to exceed this limit in the foreseeable future.
COMPENSATION COMMITTEE
Martin J. Bloom, Chairman
Theodore P. Desloge, Jr.
Phillip F. Dressel
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Desloge and Mr. Bloom are members of the Compensation Committee and their
compensation arrangements are discussed under Directors' Compensation.
PERFORMANCE GRAPH
The Performance Graph shall not be deemed incorporated by reference by any
general statement incorporating by reference this proxy statement into any
filing under the Securities Act of 1933 or under the Securities Exchange Act of
1934, except to the extent Valley Forge Corporation specifically incorporates
this information by reference, and shall not otherwise be deemed filed under
such Acts.
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The graph below compares the Company's cumulative total shareholder return on
Common Stock with (i) the cumulative total return of the American Stock Exchange
("AMEX") market index; and (ii) the cumulative total return of peer companies
("Peer Group") selected by the Company in good faith(1) over the period from
December 31, 1991 through December 31, 1996. Each member of the Peer Group is a
publicly traded, diversified manufacturing company whose three principal lines
of business match three of the Company's top four principal lines of business,
and whose revenues are less than $1.4 billion. The graph assumes an initial
investment of $100 and reinvestment of dividends. This graph is not necessarily
indicative of future price performance.
PERFORMANCE GRAPH
COMPARES THE CUMULATIVE TOTAL SHAREHOLDER RETURN AMONG VALLEY
FORGE CORPORATION, PEER GROUP INDEX, AND AMEX MARKET INDEX.
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
1991 1992 1993 1994 1995 1996
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Valley Forge $100.00 $135.48 $151.63 $207.48 $202.62 $244.87
Peer Group 100.00 107.35 122.36 144.35 162.07 208.03
AMEX 100.00 101.06 120.78 109.78 138.77 147.65
</TABLE>
DIRECTORS' COMPENSATION
The Company entered into consulting agreements with Messrs. Bloom and Desloge in
1983. Pursuant to the terms of the agreements, Messrs. Bloom and Desloge are to
provide the Company with advice on any corporate acquisitions, retention of
corporate assets, evaluation of key personnel, evaluation of the operations of
subsidiaries, supervision of new product development, and general strategic
planning. The agreements are renewable annually on December 31 with the
consulting fee for the succeeding year set at that time. The Company agreed to a
fee of $75,000 for Mr. Bloom and $50,000 for Mr. Desloge for 1996. The Company
has also retained Mr. Warner in a consulting role for a fee of $8,400 which is
renewable each year. In addition, the Company generally pays directors $500 for
each board meeting attended.
ITEM 2 -- REINCORPORATION IN THE STATE OF DELAWARE
At the Meeting stockholders are being asked to approve the Reincorporation of
the Company in the State of Delaware.
- --------
(1) The Peer Group includes Augat Inc., Bel Fuse Inc., Cherry Corp., Joslyn
Corp., La Barge Inc., Molex Inc., Powell Industries Inc., and Thomas & Betts
Corp. Assumes $100 invested on 12/31/91 in Valley Forge common stock, Peer
Group Companies (weighted by market capitalization), and the American Stock
Exchange index (AMEX). Assumes reinvested dividends. Fiscal year ends
December 31.
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<PAGE> 13
THE REINCORPORATION
GENERAL
The following discussion summarizes certain aspects of the Reincorporation of
the Company in the State of Delaware pursuant to the merger of the Company into
VFC Delaware. This summary does not purport to be complete and is qualified in
its entirety by reference to (i) the Merger Agreement, the form of which is
attached as Exhibit A and is incorporated herein by reference, (ii) the
Certificate of Incorporation of VFC Delaware (the "Delaware Certificate of
Incorporation"), a copy of which is attached as Exhibit B and is incorporated
herein by reference, and (iii) the Bylaws of VFC Delaware (the "Delaware
Bylaws"), a copy of which is attached as Exhibit C and is incorporated herein by
reference. Copies of the Restated Articles of Incorporation (the "Georgia
Articles of Incorporation") and the Restated Bylaws of the Company (the "Georgia
Bylaws") are available for inspection at the principal office of the Company and
copies will be sent to Company stockholders on request.
For reasons set forth in this Proxy Statement, the Board of Directors believes
that the best interests of the Company and its stockholders will be served by
the Reincorporation. Stockholders are urged to read carefully this section of
the Proxy Statement, including the related exhibits, before voting on the
Reincorporation.
VFC Delaware is a wholly-owned subsidiary of the Company formed for the sole
purpose of effecting the Reincorporation. Pursuant to the Merger Agreement, the
Company will be merged with and into VFC Delaware (the "Reincorporation
Merger"). Upon effectiveness of the Reincorporation Merger, the Company will
cease to exist and VFC Delaware will continue to operate the business of the
Company under the name "Valley Forge Corporation."
At the effective time of the Reincorporation Merger, the affairs of the Company
will be governed by the Delaware Certificate of Incorporation, the Delaware
Bylaws and the Delaware General Corporation Law (the "Delaware GCL"), which
differ in certain important respects from the Georgia Articles of Incorporation,
the Georgia Bylaws and the Georgia Business Corporation Code ("GBCC"). See
"Comparison of Stockholders Rights."
Pursuant to the Merger Agreement, each outstanding share of Common Stock will
automatically be converted into one share of common stock of the surviving
corporation (the "Delaware Stock"). Each outstanding certificate representing a
share or shares of Common Stock will continue to represent the same number of
shares of Delaware Stock. IT WILL NOT BE NECESSARY FOR COMPANY STOCKHOLDERS TO
EXCHANGE THEIR EXISTING STOCK CERTIFICATES FOR NEW STOCK CERTIFICATES FOR
DELAWARE STOCK. The Common Stock is listed for trading on the American Stock
Exchange and it is anticipated that, after the Reincorporation Merger, the
Delaware Stock will continue to be traded on that exchange, without
interruption, under the symbol used by the Company prior to the Reincorporation
Merger.
APPROVAL BY COMPANY STOCKHOLDERS OF THE REINCORPORATION WILL CONSTITUTE APPROVAL
OF THE MERGER AGREEMENT, THE DELAWARE CERTIFICATE OF INCORPORATION, THE DELAWARE
BYLAWS AND ALL PROVISIONS THEREOF.
PRINCIPAL REASONS FOR THE REINCORPORATION
For many years Delaware has followed a policy of encouraging incorporation in
that state and, in furtherance of that policy, has been a leader in adopting,
construing and implementing comprehensive, flexible corporation laws responsive
to the legal and business needs of corporations organized thereunder. Many
corporations have initially chosen Delaware for their state of incorporation or
have subsequently changed their corporate domicile to Delaware in a manner
similar to that proposed by the Company. Because of Delaware's prominence as the
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<PAGE> 14
state of incorporation for many major corporations, both the legislature and
courts in Delaware have demonstrated an ability and a willingness to act quickly
and effectively to meet changing business needs. The Delaware courts have
developed considerable expertise in dealing with corporate issues, and a
substantial body of case law has developed construing Delaware corporate law and
establishing public policies with respect to corporate legal affairs.
It is anticipated that Delaware corporate law will continue to be interpreted
and explained in a number of significant court decisions which may provide
greater predictability with respect to the Company's corporate legal affairs.
The Company's Board of Directors believes that the Reincorporation will also
allow the Company to take advantage of the increased flexibility and certain
other features afforded by the Delaware GCL, some of which are not permitted
under the GBCC.
VOTE REQUIRED; DISSENTERS' RIGHTS
Approval of the Reincorporation, which will also constitute approval of the
Merger Agreement, the Delaware Certificate of Incorporation, the Delaware Bylaws
and all provisions thereof, will require the affirmative vote of holders of a
majority of the outstanding shares of Common Stock.
THE COMPANY'S BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED
THE REINCORPORATION AND RECOMMENDS THAT
COMPANY STOCKHOLDERS VOTE "FOR" THE REINCORPORATION
Stockholders of the Company will have no dissenters' rights of appraisal with
respect to the Reincorporation. See "Comparison of Stockholders Rights --
Appraisal Rights."
ANTITAKEOVER IMPLICATIONS
Delaware, like many other states, permits a corporation to adopt a number of
measures, through amendment of the corporate charter or bylaws or otherwise,
which are designed to reduce a corporation's vulnerability to unsolicited
takeover attempts. The Reincorporation is not being proposed in order to prevent
such a change in control, nor is it in response to any present attempt known to
the Company's Board of Directors to acquire control of the Company, obtain
representation on the Company's Board of Directors or take significant action
which affects the Company.
In the discharge of its fiduciary obligations to its stockholders, the Company's
Board of Directors continues to evaluate the Company's vulnerability to
potential unsolicited bidders. In the course of its ongoing evaluation, the
Company's Board of Directors has considered or may consider in the future
certain additional defensive strategies designed to enhance the Board of
Directors' ability to negotiate with an unsolicited bidder. These strategies
include, but are not limited to, the designation and issuance of preferred
stock, the rights and preferences of which are determined by the Company's Board
of Directors. Some of these measures may be implemented under the GBCC. There is
nonetheless substantial judicial precedent in the Delaware courts as to the
legal principles applicable to such defensive measures and as to the conduct of
a board of directors under the business judgment rule with respect to
unsolicited takeover attempts.
Certain effects of the Reincorporation may be considered to have antitakeover
implications. For example, Section 203 of the Delaware GCL restricts certain
"business combinations" with "interested stockholders" for three years following
the date that a person becomes an interested stockholder unless the board of
directors approves the business combination. For a discussion of these and other
differences between the corporation laws of Georgia and Delaware, see
"Comparison of Stockholders Rights."
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<PAGE> 15
POSSIBLE DISADVANTAGES OF REINCORPORATION
Notwithstanding the unanimous belief of the Company's Board of Directors as to
the benefits to the Company and its stockholders of the Reincorporation, some
stockholders may find the Reincorporation to be disadvantageous to the extent
that it has the effect of discouraging a future takeover attempt which is not
approved by the Board of Directors of the Company, but which the majority of the
stockholders may deem to be in their best interests or in which stockholders may
receive a substantial premium for their shares over the then-current market
value or over their cost basis in such shares. As a result of such effects of
the Reincorporation, stockholders who might wish to participate in a tender
offer may not have an opportunity to do so.
It should also be noted that the Delaware GCL has been criticized by some
commentators on the grounds that it does not afford minority stockholders the
same substantive rights and protections as are available in a number of other
states. As discussed below, some changes will occur in the rights of
stockholders following the Reincorporation.
POST-REINCORPORATION OPERATIONS
The Reincorporation will change the legal domicile of the Company and result in
certain other charges of a legal nature, but will not result in any change in
the name, principal executive office, business management, assets or liabilities
of the Company. Pursuant to the Merger Agreement, each option to purchase shares
of Common Stock granted under the Stock Option Plan outstanding immediately
prior to the effective time of the Reincorporation Merger will become an option
to purchase shares of Delaware Stock on the same terms and conditions as existed
immediately prior to the effective time of the Reincorporation Merger, and
future stock options under the Stock Option Plan will be for shares of Delaware
Stock. Other employee benefit arrangements of the Company will also be continued
after the Reincorporation upon the terms and subject to the conditions currently
in effect. Company stockholders should note that approval of the Reincorporation
will also constitute approval of the assumption of the Stock Option Plan.
Upon effectiveness of the Reincorporation Merger, the daily business operations
of the Company and the consolidated financial operations of the Company will
continue. The consolidated financial condition and results of operations of the
Company immediately after consummation of the Reincorporation will be
substantially identical to those of the Company immediately prior to the
Reincorporation. In addition, upon effectiveness of the Reincorporation Merger,
the Board of Directors of the Company will consist of the Board of Directors of
the Company immediately prior to the Reincorporation Merger. The individuals
serving as Executive Officers of the Company will continue to serve in those
positions after the effectiveness of the Reincorporation Merger.
The Reincorporation will take effect on the later of the date upon which the
appropriate filings are made with the Secretary of State of the State of
Delaware and the date the appropriate filings are made with the Secretary of
State of the State of Georgia, which filings will be made as soon as practicable
following stockholder approval of the Reincorporation, subject to the terms and
conditions of the Merger Agreement.
The Merger Agreement provides that the Company's Board of Directors may abandon
the Reincorporation Merger at any time before the effectiveness of the
Reincorporation Merger if the Company's Board of Directors determines that it is
inadvisable for any reason. In addition, the Merger Agreement may be amended
prior to the effective date of the Reincorporation Merger, either before or
after stockholder approval thereof, subject to applicable law. No such amendment
may be made which affects the rights of the Company's stockholders in a manner
which is materially adverse to them unless the amendment has been adopted and
approved by the Company's stockholders.
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<PAGE> 16
PROVISIONS AFFECTING CHANGE IN CONTROL
Certain provisions of the Delaware Certificate of Incorporation and Delaware
Bylaws may delay or make more difficult unsolicited acquisitions or changes of
control of the Company after the Reincorporation. These provisions include (i)
directors having the right to amend the Delaware Bylaws, (ii) the authorization
of 1,000,000 shares of "blank check" Preferred Stock, for which the Board of
Directors may determine the rights and preferences, and issue shares without
further stockholder approval, and (iii) super-majority vote of stockholders
needed to amend provisions of the Delaware Certificate of Incorporation dealing
with the Preferred Stock.
The Georgia Articles of Incorporation authorize 3,000,000 shares of Class A
Stock, which is convertible share for share into Common Stock. The Class A Stock
is entitled to one vote per share on all matters other than election of
directors. The Class A Stock also must approve, by a two-thirds vote, certain
merger transactions. No shares of Class A stock are currently outstanding. The
Company's directors currently have the right to amend the Georgia Bylaws.
COMPARISON OF STOCKHOLDERS' RIGHTS
CORPORATE CASE LAW
It is generally recognized that Delaware has the most extensive, progressive and
well-defined body of corporate case law in the United States. Because many
corporations are incorporated in Delaware, the Delaware judiciary has acquired
considerable expertise in dealing with corporate issues and a substantial number
of decisions have been rendered construing Delaware law and establishing public
policies for Delaware corporations. Although Georgia courts have also rendered
many decisions in the area of corporate law, these cases are not litigated as
frequently in Georgia as they are in Delaware.
GENERAL QUORUM AND VOTING REQUIREMENTS
According to the GBCC, unless a corporation's articles of incorporation or the
GBCC provides otherwise, a majority of the votes entitled to be cast on a
particular matter by a voting group constitutes a quorum of that voting group
for action on that matter. The articles of incorporation or a bylaw adopted
according to the GBCC may provide for a greater or lesser quorum (but not less
than one-third of the votes entitled to be cast) or a greater voting requirement
for stockholders (or voting groups of stockholders) than is provided for in the
GBCC; however, an amendment to the articles of incorporation or bylaws that
changes or deletes a greater quorum or voting requirement must meet the same
quorum requirement and be adopted by the same vote and voting groups required to
take action under the quorum and voting requirements prescribed in the provision
being amended. Unless the articles of incorporation or a bylaw adopted by the
stockholders or the GBCC requires a greater number of affirmative votes, action
on a matter (other than the election of directors) will be approved if the votes
cast favoring the action exceed the votes cast opposing the action. Directors
are elected by a plurality of the votes cast by the shares entitled to vote
unless the articles of incorporation provide otherwise.
The Georgia Bylaws provide that a majority of the shares outstanding and
entitled to vote, present in person or represented by proxy, will constitute a
quorum, and that the affirmative vote of a majority of the shares present and
entitled to vote will be required to approve any matters (unless state corporate
law, the Georgia Articles of Incorporation or another Georgia Bylaw provision
requires a different vote).
Delaware allows a corporation's certificate of incorporation or bylaws to
specify the number of shares and/or the amount of other securities having voting
power, the holders of which shall be present or represented by proxy at any
meeting in order to constitute a quorum for, and the votes that shall be
necessary for the transaction of any business, but the Delaware GCL requires the
quorum to consist of at least one-third of the shares entitled to vote at the
meeting. Absent such specification in the certificate of incorporation or
bylaws, (i)
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<PAGE> 17
a majority of the shares entitled to vote, present in person or represented by
proxy, constitutes a quorum at a stockholders' meeting, and (ii) where a
separate vote by class or classes is required, a majority of the outstanding
shares of such class or classes, present in person or represented by proxy,
constitutes a quorum entitled to take action with respect to a vote on that
matter. The affirmative vote of a majority of the shares present in person or
represented by proxy and entitled to vote will constitute stockholder approval,
except that directors will be elected by a plurality of the votes of the shares
present in person or by proxy and entitled to vote.
The Delaware Bylaws provide that a majority of the shares outstanding and
entitled to vote, present in person or by proxy, will constitute a quorum and,
unless a different vote is required by the Delaware GCL, Delaware Certificate of
Incorporation or another Delaware Bylaw provision, a majority of the shares
entitled to vote and present thereat will be required to approve any matter
brought before the stockholders.
VOTE REQUIRED FOR CERTAIN TRANSACTIONS
In connection with the approval of proposed mergers and share exchanges, the
GBCC generally requires the affirmative vote of a majority of all votes entitled
to be cast on the plan for such transaction by all shares entitled to vote on
the plan, voting as a single group, and the affirmative vote of a majority of
the votes entitled to be cast by holders of shares of each voting group entitled
to vote as a group under the corporation's articles of incorporation. The sale
of all or substantially all of the assets of a corporation must be approved by
the affirmative vote of a majority of all the votes entitled to be cast on the
matter, regardless of voting groups. Stockholders of the surviving corporation
need not approve a merger if the number and kind of shares outstanding
immediately after the merger, plus the number and kind of shares issuable as a
result of the merger, do not exceed the total number and kind of shares of the
surviving corporation authorized by its articles of incorporation immediately
before the merger.
Under the Delaware GCL, a merger, consolidation or sale of all or substantially
all of a corporation's assets generally must be approved by the stockholders of
each constituent corporation by the affirmative vote of the holders of a
majority of the outstanding shares entitled to vote on the transaction.
Stockholders of the surviving corporation need not approve a merger if: (i) the
corporation's certificate of incorporation will not be amended as a result of
the merger; (ii) each share of the corporation's stock outstanding immediately
prior to the effective date of the merger will be an identical outstanding or
treasury share of the corporation after the effective date of the merger; and
(iii) either no shares of the corporation's common stock and no securities
convertible into such stock will be issued pursuant to the merger or the
authorized unissued shares or treasury shares of the corporation's common stock
to be issued pursuant to the merger plus those initially issuable upon
conversion of any other securities to be issued to the merger do not exceed 20%
of the shares of the corporation's common stock outstanding immediately prior to
the effective date of the merger.
Both the Delaware GCL and the GBCC permit corporations to require higher votes
for approval of the transactions described above in their charters or bylaws.
Neither the Delaware Certificate of Incorporation nor the Georgia Articles of
Incorporation require super-majority votes for business combinations
STOCKHOLDER ACTION WITHOUT A MEETING
Under the GBCC, unless a corporation's articles of incorporation provide
otherwise, any action which may be taken at a meeting of the stockholders of a
corporation may be taken without a meeting if such action is taken by all of the
stockholders entitled to vote on such action executing a written consent action.
Under the Delaware GCL, unless a corporation's certificate of incorporation
provides otherwise, any action which may be taken at a meeting of the
stockholders of a corporation may be taken without a meeting by the
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<PAGE> 18
execution of a written consent by the holders of outstanding stock having not
less than the minimum amount of votes necessary to take such action at a meeting
where all stockholders entitled to vote on such action are present.
The Delaware Bylaws contain a provision allowing stockholder action by less than
unanimous written consent.
BUSINESS COMBINATIONS
The provisions of the GBCC regarding transactions with "interested stockholders"
do not apply to a Georgia corporation unless it has affirmatively elected in its
bylaws to be governed by them. The provisions of the GBCC concerning "Business
Combinations with Interested Stockholders" (the "Business Combination
Provisions"), also require certain super-majority votes for transactions with
any "interested stockholders" (generally defined as any person, other than the
corporation or any subsidiary, beneficially owning at least 10% of the voting
stock of the corporation). Repeal or amendment of such a bylaw must be approved
by at least two-thirds of the directors who are not affiliates of the interested
stockholder and by a majority of the votes entitled to be cast by the holders of
shares not beneficially owned by the interested stockholder.
The GBCC's Business Combination Provisions generally prohibit Georgia
corporations from entering into certain business combination transactions with
any "interested stockholder" (generally defined as any person, other than the
corporation or any majority-owned subsidiary, beneficially owning at least 15%
of the voting stock of the corporation) for a period of five years from the time
such stockholder becomes an interested stockholder (the "Determination Date")
unless: (i) the corporation's board of directors has approved the business
combination or the transaction resulting in interested stockholder status prior
to the Determination Date; (ii) the interested stockholder acquires 90% or more
of the outstanding voting stock of the corporation (excluding "affiliated
shares" held by affiliates, subsidiaries or benefit plans) as part of the
transaction in which it becomes an interested stockholder; or (iii) after the
Determination Date, the interested stockholder acquires 90% or more of the
outstanding voting stock of the corporation (excluding affiliated shares) and a
majority of the remaining outstanding voting stock (excluding affiliated shares)
approve the business combination.
The Company has not adopted the Business Combination Provisions of the GBCC.
Unlike the Georgia provisions, section 203 of the Delaware GCL prohibits a
corporation that does not opt out of its provisions from entering into certain
business combination transactions with any interested stockholder for a period
of three years from the time such stockholder becomes an interested stockholder
unless certain super-majority votes are obtained. The prohibition will not apply
if (i) the board of directors has approved either the proposed business
combination or the transaction resulting in interested stockholder status prior
to the Determination Date; (ii) the interested stockholder obtains at least 85%
of the shares not held by such stockholder, the corporation or an affiliate or
the corporation in a single transaction; or (iii) the interested stockholder
obtains the approval of two-thirds of the shares outstanding that are not held
by the interested stockholder.
A Delaware corporation may "opt out" of the requirements of Section 203 of the
Delaware GCL if a majority of the outstanding shares entitled to vote adopt an
amendment to the corporation's certificate of incorporation or bylaws expressly
electing not to be governed by Section 203. Because VFC Delaware has not "opted
out" of Section 203, the Company will be governed by its provisions after the
Reincorporation Merger.
FAIR PRICE PROVISIONS
The GBCC contains fair price provisions that apply to any corporation electing
to be governed by such provisions, but the Company has not so elected. The
Delaware GCL does not contain any specific fair price provisions.
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CONFLICTING INTEREST TRANSACTIONS
The GBCC states that a director has a conflicting interest with respect to a
transaction effected or proposed by the corporation (or any other entity in
which the corporation has a controlling interest) if (i) whether or not the
transaction is brought before the board for action, to the knowledge of the
director at the "time of commitment" (as defined in the GBCC) the director or a
related person is a party to the transaction or has a beneficial financial
interest in or so closely linked to the transaction and of such financial
significance to the director or a related person that it would reasonably be
expected to exert an influence on the director's judgment if he or she were
called upon to vote on the transaction, or (ii) the transaction is brought (or
is of such character and significance to the corporation that it would in the
normal course be brought) before the Board for action, and to the knowledge of
the director at the time of the commitment any of the following persons is
either a party to the transaction or has a beneficial financial interest so
closely linked to the transaction and of such financial significance to such
person that it would reasonably be expected to exert an influence on the
director's judgment if he or she were called upon to vote on the transaction:
(a) an entity (other than the corporation) of which the director is a director,
general partner, agent or employee; (b) a person that controls one or more of
the entities specified in subparagraph (a) above or an entity that is controlled
by, or is under common control with, one or more of the entities specified in
subparagraph (a) above; or (c) an individual who is a general partner, principal
or employer of the director. A director's conflicting interest transaction may
not be enjoined, set aside or give rise to an award of damages or other
sanctions, in an action by a stockholder or by or in the right of the
corporation, on the ground of an interest in the transaction of such director or
any person with whom such director has a personal, economic or other
association, if (i) the transaction receives the affirmative vote of a majority
(but not less than two) of the disinterested directors or a committee thereof
who voted on the transaction after required disclosure to them to the extent the
information is not known by them; (ii) a majority of the votes entitled to be
cast by disinterested stockholders were cast in favor of the transaction after
(A) notice to the stockholders describing the conflicting interest transactions,
(B) disclosure by such director, prior to the stockholders' vote, to the
Secretary of the Company of the number, and identity of the persons holding or
controlling the vote, of all shares that to the knowledge of the director are
beneficially owned (or the voting of which is controlled) by such director or by
a related person of the director, or both, and (C) required disclosure to the
stockholders who voted on the transaction to the extent the required information
was not known by them; or (iii) the transaction, judged in the circumstances at
the time of commitment, is established to have been fair to the corporation. The
provisions of the GBCC that are applicable to directors also apply to officers.
The Delaware GCL states that contracts and transactions between a Delaware
corporation and one or more of its directors or officers, or organizations in
which they serve in such capacities or have a financial interest, will not be
void or voidable solely because such director or officer acts or participates in
a board or committee meeting authorizing the contract or transaction if: (i) the
material facts of the relationship or interest and as to the contract or
transaction are disclosed or known to the Board or committee and the board or
committee in good faith authorizes the contract or transaction by the
affirmative vote of a majority of the disinterested directors (even if the
disinterested directors are less than a quorum); or (ii) the material facts as
to the relationship or interest and as to the contract or transaction are
disclosed or are known to the stockholders entitled to vote thereon and the
contract or transaction is specifically approved in good faith by the
stockholders; or (iii) the contract or transactions is fair to the corporation
as of the time that it is authorized by the Board, a committee thereof or the
stockholders.
APPRAISAL RIGHTS
The GBCC grants stockholders the right to dissent and receive payment of the
fair value of their shares in the event of: (i) amendments to the articles of
incorporation materially and adversely affecting their right or interests as
stockholders; (ii) sales of all or substantially all of the corporation's assets
(unless the sale is pursuant to a court order and the proceeds are distributed
to the stockholders within one year after the sale); or (iii) mergers or share
exchanges on which the stockholders are entitled to vote. This right is not
available when the affected shares are listed on a national securities exchange
or held of record by more than 2,000
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stockholders unless (i) the articles of incorporation or a resolution of the
board of directors approving the transaction provides otherwise or (ii) in a
plan of merger or share exchange, the holders of such shares are required to
accept anything other than shares of the surviving corporation or another
publicly-held corporation listed on a national securities exchange or held of
record by more than 2,000 stockholders, except for cash in lieu of fractional
shares. Stockholders entitled to appraisal rights subsequently receive cash from
the corporation equal to the value of their shares as established by judicial
appraisal.
Under the Delaware GCL, stockholders entitled to vote on a merger or
consolidation have the right to serve upon the corporation a written demand for
appraisal of their shares when the stockholders receive any form of
consideration for their shares other than (i) shares of the surviving
corporation, (ii) shares of any other corporation listed on a national
securities exchange or held of record by more than 2,000 stockholders, or (iii)
cash (or stock and cash) in lieu of fractional shares or any combination
thereof.
SPECIAL MEETINGS OF STOCKHOLDERS
The GBCC permits the board of directors or any person specified in the
corporation's articles of incorporation or bylaws to call special meetings of
stockholders. A special meeting may also be called by the owners of at least
25%, or such greater or lesser percentages as the articles of incorporation or
bylaws provide, of the votes entitled to be cast on any issue proposed to be
considered at the special meeting. Written notice of the time, place and
specific purposes of such meeting must be given by mail to each stockholder
entitled to vote at the meeting not less than 10 nor more than 60 days prior to
the scheduled date of the special meeting, unless such notice is waived as the
bylaws stipulate.
Under the Delaware GCL, special meetings of stockholders may be called by the
board of directors or those persons authorized by the corporation's certificate
of incorporation or bylaws. The provisions of the Delaware GCL regarding notice
of meetings are essentially the same as the provisions of the GBCC.
The Georgia Bylaws state that special meetings of stockholders may be called by
the Board of Directors, the President or the Chairman of the Board of Directors.
The Delaware Bylaws include a similar provision to similarly restrict those
entitled to call a special meeting under the Delaware GCL.
RECORD DATE
Under the GBCC, the record date is to be fixed not more than 70 days before a
meeting, nor more than 70 days prior to any other action. Under the Delaware
GCL, a corporation may fix the record date at not more than 60 nor less than 10
days before a meeting, nor more than 60 days prior to any other action.
STOCKHOLDER LIST
Under the Delaware GCL, the stockholders of a corporation have the right to
examine the list of stockholders entitled to vote during ordinary business
hours, for a period beginning at least 10 days prior to the meeting at the place
where the meeting will be held or, if specified in the notice for the meeting,
at a place in the city where the meeting will be held. Under the GBCC,
stockholders have the right to examine the stockholder list only at the time and
place of the meeting.
DURATION OF PROXY
Under the GBCC, no proxy may be voted after 11 months from its effective date,
unless the proxy provides for a longer period. Under the Delaware GCL, no proxy
may be voted after three years from its date, unless the proxy provides for a
longer period.
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PREEMPTIVE RIGHTS
Both the Delaware GCL and the GBCC do not automatically confer preemptive rights
on stockholders; therefore, stockholders have no preemptive rights unless and
except to the extent the corporation's certificate or articles of incorporation
expressly grant such rights. The Delaware Certificate of Incorporation and
Delaware Bylaws and the Company's Articles of Incorporation and Bylaws are
silent as to preemptive rights.
REMOVAL OF DIRECTORS
Under the GBCC, unless the articles of incorporation provide otherwise, a
corporation's stockholders may remove any director, with or without cause, by
the vote of the holders of a majority of the outstanding shares of the
corporation entitled to vote. If a director is elected by a voting group of
stockholders, only stockholders of that voting group may participate in the vote
to remove him. If cumulative voting is authorized, a director may not be removed
if the number of votes sufficient to elect him under cumulative voting is voted
against his removal. If cumulative voting is not authorized, a director may be
removed only by a majority of the votes entitled to be cast. Directors elected
to staggered terms may be removed only for cause, unless the articles of
incorporation or a bylaw adopted by the stockholders provide otherwise. The
Company's directors do not serve staggered terms.
The Delaware GCL permits any director or the entire board of directors to be
removed, with or without cause, by the holders of a majority of the stock
entitled to vote for directors, except that: (1) directors elected to staggered
terms may be removed only for cause unless the certificate of incorporation
provides otherwise; or (ii) if the corporation's board of directors is elected
by cumulative voting and less than the entire board is to be removed, no
director may be removed without cause if the votes cast against his removal
would be sufficient to elect him if then cumulatively voted at an election of
the entire board of directors, or, if there are classes of directors, at an
election of the class of directors of which he is a part. The Delaware
Certificate of Incorporation does not provide for staggered terms or for
cumulative voting.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Under both the Delaware GCL and the GBCC, a corporation is required to indemnify
a director to the extent that the director has been successful, on the merits or
otherwise, in the defense of any proceeding to which he was a party because of
his status as a director of the corporation. It may indemnify any director or
officer made a party to a proceeding if such director or officer acted in a
manner he believed in good faith to be in or not opposed to the best interests
of the corporation and, in the case of any criminal proceeding, had no
reasonable cause to believe his conduct was unlawful. A corporation may not
indemnify a director in a proceeding by or in the right of the corporation in
which the director is adjudged liable to the corporation unless the court
determines that such indemnification is fair, or (under the GBCC only) in
connection with any other proceeding in which he is adjudged liable on the basis
that he improperly received a personal benefit.
The Delaware Certificate of Incorporation provides that directors and officers
will be indemnified under all circumstances for which indemnification is
permitted under Delaware law. The Articles of Incorporation and Bylaws of the
Company currently require indemnification under all circumstances for which
indemnification is permitted under Georgia law.
Both the Delaware GCL and the GBCC allow a corporation to enter into
indemnification agreements with its officers and directors. The Company intends
to enter into Indemnification Agreements with each of its directors and
Executive Officers, pursuant to which the Company will agree to indemnify each
such individual for any losses suffered due to any investigations, claims or
proceedings brought against such individual because he or she served as a
director or officer of the Company.
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AMENDMENTS TO CERTIFICATE OR ARTICLES OF INCORPORATION
Under the GBCC, the board of directors may amend the articles of incorporation
to take the following actions without obtaining stockholder approval: (i) delete
the names and addresses of the initial directors, initial registered agent or
registered office, (ii) change each issued and unissued authorized share of an
outstanding class of stock into a greater number of whole shares if the
corporation has only shares of that class outstanding, (iii) change the
corporate name, (iv) extend the corporation's duration if it was incorporated at
a time the law required limited duration, or (v) change or eliminate the par
value of each issued and unissued share of an outstanding class if the
corporation has only shares of that class outstanding. Other amendments must be
approved by the board of directors and by the stockholders by a majority of the
votes entitled to be cast on the amendment by each voting group entitled to vote
on the amendment unless the articles of incorporation, the bylaws or another
provision of the GBCC require a higher vote. Class voting on an amendment will
be permitted if the amendment would change the number of authorized shares of a
class (unless the articles of incorporation provide otherwise) or adversely
affect the rights, powers or preferences of the shares of a class.
The Delaware GCL permits a corporation to amend its certificate of incorporation
so long as the amended certificate of incorporation contains only provisions
that could be lawfully and properly included in an original certificate of
incorporation filed at the time the amendment is filed. Amendments must be
adopted by the Board of Directors and approved by a majority of the outstanding
stock entitled to vote thereon and by a majority of the outstanding stock of
each class entitled to vote as a class with respect to the amendment. Class
voting will be permitted when a proposed amendment would increase or decrease
the number or par value of the authorized shares of a class or adversely affect
the powers, preferences or rights of the shares of a class. If, however, the
certificate of incorporation permits the number of authorized shares of a class
to be increased or decreased without the separate approval of the affected
class, such amendment may be approved by the affirmative vote of the holders of
a majority of the stock entitled to vote on the amendment, voting as a single
class. The Delaware Certificate of Incorporation does not modify these
provisions.
AMENDMENTS TO BYLAWS
The GBCC permits a corporation's board of directors to amend, repeal or adopt
bylaws, unless (i) the articles of incorporation reserve this power exclusively
to the stockholders in whole or in part, or (ii) the stockholders, in amending
or repealing a particular bylaw, expressly reserve the power to amend or repeal
that particular bylaw. The stockholders alone may amend, repeal or adopt bylaws
limiting the authority of the board of directors or establishing staggered terms
for directors; in addition, the board of directors may not amend, repeal or
adopt a bylaw fixing a greater stockholder quorum or voting requirement unless
the bylaw relates to the GBCC's business combination or fair practice
provisions. Unless provided otherwise in a corporation's articles of
incorporation or bylaws, a bylaw fixing a greater quorum or voting requirement
for the board of directors may be adopted, amended or repealed by the
affirmative vote of a majority of the votes entitled to be cast by the
stockholders or by a majority of the directors.
Under the Delaware GCL, the power to adopt, amend or repeal bylaws rests with
those stockholders entitled to vote on such matters, provided, however, a
corporation's certificate of incorporation may additionally confer such power
upon the directors. Conferring the power to adopt, amend or repeal bylaws upon
the directors shall not divest, nor shall it limit, the stockholders' power to
adopt, amend or repeal bylaws.
The Delaware Bylaws permit the Board of Directors to amend those Bylaws.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following discussion is a summary of the federal income tax consequences
expected to result to holders of the Common Stock from the receipt of the
Delaware Common Stock in connection with the Reincorporation and reflects the
opinion of Husch & Eppenberger, counsel to the Company. The summary is based on
current
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provisions of the Internal Revenue Code of 1986, as amended (the "Code"),
applicable treasury regulations, judicial authority and administrative rulings
and practice. There can be no assurance that the IRS will not take a contrary
view, and no ruling from the IRS has been or will be sought. Legislative,
judicial or administrative changes or interpretations may be forthcoming that
could alter or modify the statements and conclusions set forth herein. Any such
changes or interpretations may or may not be retroactive and could affect the
tax consequences to holders.
The tax treatment of a Company stockholder may vary depending upon his or her
particular situation. Certain holders (including insurance companies, tax-exempt
organizations, financial institutions or broker-dealers, foreign corporations
and persons who are not citizens or residents of the United States) may be
subject to special rules not discussed below. EACH STOCKHOLDER SHOULD CONSULT
SUCH STOCKHOLDER'S OWN TAX ADVISOR AS TO THE SPECIFIC TAX CONSEQUENCES OF THE
REINCORPORATION ON SUCH STOCKHOLDER, INCLUDING THE APPLICATION AND EFFECT OF
FEDERAL, STATE, LOCAL AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN
SUCH TAX LAWS.
Subject to the limitations, qualifications, and exceptions described herein, and
assuming the Reincorporation qualifies as a reorganization within the meaning of
Section 368(a) of the Code, the following tax consequences generally should
result:
(a) No gain or loss should be recognized by holders of the Common Stock upon
receipt of Delaware Stock pursuant to the Reincorporation;
(b) The aggregate tax basis of the Delaware Stock received by each stockholder
in the Reincorporation should be equal to the aggregate tax basis of Common
Stock exchanged therefor; and
(c) The holding period of the Delaware Stock received by each stockholder of the
Company should include the period for which such stockholder held the Common
Stock exchanged therefor, provided that such Common Stock was held by such
stockholder as a capital asset at the time of the Reincorporation.
The Company has not requested a ruling from the IRS with respect to the federal
income tax consequences of the Reincorporation under the Code. The Company has,
however, received an opinion from legal counsel substantially to the effect that
the Reincorporation will qualify as a reorganization within the meaning of
Section 368(a) of the Code, and as to certain other tax matters (the "Tax
Opinion"). The Tax Opinion will neither bind the IRS nor preclude it from
asserting a contrary position. In addition, the Tax Opinion will be subject to
certain assumptions and qualifications and will be based upon the truth and
accuracy of representatives made by VFC Delaware, the Company and certain
stockholders of the Company. Of particular importance will be assumptions and
representations relating to the requirement (the "continuity of interest"
requirement) that the stockholders of the Company retain, through ownership of
Delaware Stock, a significant equity interest in the Company's business after
the Reincorporation.
A successful IRS challenge to the reorganization status of the Reincorporation
would result in a stockholder recognizing gain or loss with respect to each
share of Common Stock exchanged in the Reincorporation equal to the difference
between that stockholder's basis in such share and the fair market value, as of
the time of the Reincorporation, of Delaware Stock received in exchange
therefor. In such event, a stockholder's aggregate basis in the shares of
Delaware Stock received in the exchange would equal such fair market value, and
such stockholder's holding period for such shares would not include the period
during which such stockholder held Common Stock.
EACH STOCKHOLDER SHOULD CONSULT HIS OR HER TAX ADVISOR WITH RESPECT TO THE TAX
CONSEQUENCES TO HIM OR HER, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL,
FOREIGN AND OTHER TAX LAWS, OF THE REINCORPORATION.
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STOCKHOLDER PROPOSALS
Stockholders are entitled to submit proposals on matters appropriate for
stockholders' action, consistent with regulations of the Securities and Exchange
Commission. Should a stockholder intend to present a proposal at next year's
annual meeting, it must be received by the Secretary of the Company at the
Company's principal office on or before January 2, 1998, in order to be included
in the Company's Proxy Statement and form of proxy relating to that meeting.
OTHER BUSINESS
The Board of Directors knows of no matters to be presented for action at the
Meeting other than as set forth in this Proxy Statement. If other matters
properly do come before the Meeting, the persons named in the accompanying proxy
will vote said proxy in accordance with their judgment. It is important that
proxies be returned promptly. Therefore, stockholders are urged to promptly
sign, date, and return the proxy in the attached stamped and addressed envelope.
Proxies, ballots, and voting tabulations identifying stockholders are secret and
will not be available to anyone, except as actually necessary to meet legal
requirements.
Stockholders may obtain without charge, copies of the Company's annual report on
Form 10-K for the year ended December 31, 1996, and all financial statements and
schedules thereto as filed with the SEC by writing the Company's Secretary, Ms.
Monica J. Burke, 100 Smith Ranch Road, Suite 326, San Rafael, California 94903.
BY ORDER OF THE BOARD OF DIRECTORS
MONICA J. BURKE
SECRETARY - TREASURER
Date: May 1, 1997
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EXHIBIT A
AGREEMENT OF MERGER
THIS AGREEMENT OF MERGER ("Agreement"), dated as of _______________ ,
1997, is entered into between VALLEY FORGE CORPORATION, a Georgia corporation
("VF Georgia"), and VFC DELAWARE, INC., a Delaware corporation ("VF Delaware").
VF Georgia and VF Delaware are hereinafter sometimes collectively referred to as
the "Constituent Corporations."
W I T N E S E T H:
WHEREAS, VF Georgia is a corporation duly organized and existing under the
laws of the State of Georgia;
WHEREAS, VF Delaware is a corporation duly organized and existing under the
laws of the State of Delaware;
WHEREAS, on the date of this Agreement, VF Georgia has authority to issue
18,000,000 shares of capital stock, consisting of: (i) 15,000,0000 shares of
common stock, par value $0.50 per share ("Georgia Common Stock"), _____ of which
shares are issued and outstanding; and (ii) 3,000,000 shares of Class A Stock,
par value $0.50 per share ("Georgia Class A Stock"), ____ of which are issued
and outstanding;
WHEREAS, on the date of this Agreement, VF Delaware has authority to issue
6,000,000 shares of capital stock, consisting of: (i) 5,000,000 shares of Common
Stock, par value $0.50 per share ("Delaware Common Stock"), _____ of which
shares are issued and outstanding and owned by VF Georgia; and (ii) 1,000,000
shares of Preferred Stock, no par value ("Delaware Preferred Stock"), none of
which are issued and outstanding;
WHEREAS, the respective Boards of Directors of VF Georgia and VF Delaware
have determined that it is advisable and in the best interests of each of such
corporations that VF Georgia merge with and into VF Delaware upon the terms and
subject to the conditions set forth in this Agreement for the purpose of
effecting the change of the state of incorporation of VF Georgia from Georgia to
Delaware;
WHEREAS, the respective Boards of Directors of VF Georgia and VF Delaware
have, by resolutions duly adopted, approved this Agreement;
WHEREAS, VF Georgia has approved this Agreement as the sole stockholder of
VF Delaware; and
WHEREAS, the stockholders of VF Georgia have approved this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements and covenants set
forth herein, VF Georgia and VF Delaware hereby agree as follows:
1. MERGER. Subject to the conditions of this Agreement, VF Georgia shall be
merged with and into VF Delaware (the "Merger"), and VF Delaware shall be
the surviving corporation (hereinafter sometimes referred to as the
"Surviving Corporation"). The Merger shall become effective upon the date
and at the time of filing of a copy of this Agreement of Merger with
appropriate certificates of merger, providing for the Merger, with the
Secretary of State of the State of Georgia or an appropriate Certificate of
Merger, providing for the Merger, with the Secretary of State of the State
of Delaware, whichever later occurs (the "Effective Time").
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2. GOVERNING DOCUMENTS. The Certificate of Incorporation of VF Delaware, as in
effect immediately prior to the Effective Time, shall be the Certificate of
Incorporation of the Surviving Corporation without change or amendment
until thereafter amended in accordance with the provisions thereof and
applicable laws, except that the Certificate of Incorporation shall hereby
be amended to change the name of the Surviving Corporation to "Valley Forge
Corporation," and the Bylaws of VF Delaware, as in effect immediately prior
to the Effective Time, shall be the Bylaws of the Surviving Corporation
without change or amendment until thereafter amended in accordance with the
provisions thereof, of the Certificate of Incorporation and applicable law.
3. SUCCESSION. At the Effective Time, the separate corporate existence of VF
Georgia shall cease, and VF Delaware shall possess all the rights,
privileges, powers and franchises of a public and private nature and be
subject to all the restrictions, disabilities and duties of each of the
Constituent Corporations; and all the rights, privileges, powers and
franchises of each of the Constituent Corporations, and all property, real,
personal and mixed, and all debts due to each of the Constituent
Corporations on whatever account, including subscriptions for shares, and
all other choses in action, shall be vested in the Surviving Corporation;
and all property, rights, privileges, powers and franchises, and all and
every other interest shall thereafter effectively be the property of the
Surviving Corporation as they were of the respective Constituent
Corporations, and the title to any real estate vested by deed or otherwise,
in either of such Constituent Corporations shall not revert or be in any
way impaired by reason of the Merger; but all rights of creditors and all
liens upon any property of VF Georgia shall be preserved unimpaired. To the
extent permitted by law, any claim existing or action or proceeding pending
by or against either of the Constituent Corporations may be prosecuted as
if the Merger had not taken place. All debts, liabilities and duties of the
respective Constituent Corporations shall thenceforth attach to the
Surviving Corporation and may be enforced against it to the same extent as
if such debts, liabilities and duties had been incurred or contracted by
it. All corporate acts, plans, policies, agreements, arrangements,
approvals and authorizations of VF Georgia, its stockholders, Board of
Directors and committees thereof, officers and agents which were valid and
effective immediately prior to the Effective Time, shall be taken for all
purposes as the acts, plans, policies, agreements, arrangements, approvals
and authorizations of the Surviving Corporation and shall be as effective
and binding thereon as the same were with respect to VF Georgia. The
employees and agents of VF Georgia shall become the employees and agents of
the Surviving Corporation and continue to be entitled to the same rights
and benefits which they enjoyed as employees and agents of VF Georgia. The
requirements of any plans or agreements of VF Georgia involving the
issuance or purchase by VF Georgia of certain shares of its capital stock
shall be satisfied by the issuance or purchase of a like number and same
class of shares of the Surviving Corporation.
4. DIRECTORS AND OFFICERS. The Directors and Officers of VF Georgia on the
Effective Time shall be and become the sole Directors and Officers, holding
the same titles and positions, of the Surviving Corporation on the
Effective Time, and after the Effective Time shall serve in accordance with
the Bylaws of the Surviving Corporation.
5. FURTHER ASSURANCES. From time to time, as and when required by the
Surviving Corporation or by its successors or assigns, there shall be
executed and delivered on behalf of VF Georgia such deeds and other
instruments, and there shall be taken or caused to be taken by it all such
further and other action, as shall be appropriate, advisable or necessary
in order to vest, perfect or confirm, of record or otherwise, in the
Surviving Corporation the title to and possession of all property,
interests, assets, rights, privileges, immunities, powers, franchises and
authority of VF Georgia, and otherwise to carry out the purposes of this
Agreement, and the officers and directors of the Surviving Corporation are
fully authorized in the name and on behalf of VF Georgia or otherwise, to
take any and all such action and to execute and deliver any and all such
deeds and other instruments.
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6. CONVERSION OF SHARES. At the Effective Time, by virtue of the Merger and
without any action on the part of the holder thereof, each share of Georgia
Common Stock outstanding immediately prior to the Effective Time shall be
changed and converted into and shall be one fully paid and non-assessable
share of Delaware Common Stock.
7. CONDITIONS TO OBLIGATIONS. The obligations of each party to complete the
Merger are subject to the following conditions:
a) VF Georgia Stockholder Approval. The Merger shall have received the
requisite approval of the stockholders of VF Georgia pursuant to the
General Business Corporation Code of the State of Georgia.
b) Approval from Government Agencies. All governmental approvals and
other actions required to effect the Merger and related transactions
shall have been obtained, without conditions or restrictions that the
affected party reasonably considers unduly burdensome.
c) Listing. The Delaware Common Stock shall be listed, or approved for
listing, on the American Stock Exchange.
8. STOCK CERTIFICATES. At and after the Effective Time, all of the outstanding
certificates which, immediately prior to the Effective Time, represented
shares of Georgia Common Stock shall, respectively, be deemed for all
purposes to evidence ownership of, and to represent, shares of Delaware
Common Stock into which the shares of Georgia Common Stock, formerly
represented by such certificates, have been converted as herein provided.
The registered owner on the books and records of the Surviving Corporation
or its transfer agents of any such outstanding stock certificate shall,
until such certificate shall have been surrendered for transfer or
otherwise accounted for to the Surviving Corporation or its transfer
agents, have and be entitled to exercise any voting and other rights with
respect to, and to receive any dividends and other distributions upon, the
shares of Delaware capital stock evidenced by such outstanding certificate
as above provided.
9. OPTIONS AND WARRANTS.
a) Each option to purchase, or other award of shares of, Georgia Common
Stock outstanding immediately prior to the Effective Time, shall, by
virtue of the Merger and without any action on the part of the holder
thereof, be converted into and become an option to purchase, or award
of, the same number of shares of Delaware Common Stock at the same
option price per share, and upon the same terms and subject to the
same conditions as set forth in each of the respective options or
other awards, as in effect at the Effective Time.
b) Each stock purchase warrant providing for the issuance of Georgia
Common Stock outstanding immediately prior to the Effective Time,
shall, by virtue of the Merger and without any action on the part of
the holder thereof, be converted into and become a stock purchase
warrant providing for the issuance of the same number of shares of
Delaware Common Stock at the same exercise price per share, and upon
the same terms and conditions as set forth in each of the respective
stock purchase warrants.
10. OTHER EMPLOYEE BENEFIT PLANS. As of the Effective Time, VF Delaware hereby
assumes all obligations under any and all employee benefit plans of VF
Georgia in effect as of the Effective Time or with respect to which
employee rights or accrued benefits are outstanding as of the Effective
Time.
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11. AMENDMENT. Subject to applicable law, this Agreement may be amended,
modified or supplemented by written agreement of the parties hereto at any
time prior to the Effective Time with respect to any of the terms contained
herein; provided, however, that no such amendment, modification or
supplement not adopted and approved by the stockholders of VF Georgia and
VF Delaware shall affect the rights of either or both of such stockholders
in a manner which is materially adverse to either or both of them.
12. ABANDONMENT. At any time prior to the Effective Time, this Agreement may be
terminated and the Merger may be abandoned by the Board of Directors of VF
Georgia, notwithstanding approval of this Agreement by the stockholder of
VF Delaware or by the stockholders of VF Georgia, or both, if, in the
opinion of the Board of Directors of VF Georgia, circumstances arise which,
in the opinion of such Board of Directors, make the Merger for any reason
inadvisable.
13. COUNTERPARTS. In order to facilitate the filing and recording of this
Agreement, the same may be executed in two or more counterparts, each of
which shall be deemed to be an original and the same agreement.
IN WITNESS WHEREOF, VF Georgia and VF Delaware have caused this Agreement
to be signed by their respective duly authorized officers as of the date first
above written.
VALLEY FORGE CORPORATION: VFC DELAWARE, INC:
By:____________________________ By:____________________________
Name:_________________________ Name:_________________________
Title:__________________________ Title:__________________________
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EXHIBIT B
CERTIFICATE OF INCORPORATION
OF
VFC DELAWARE, INC.
ARTICLE I. NAME.
The name of the corporation is VFC Delaware, Inc. (hereinafter referred to as
the "Corporation").
ARTICLE II. REGISTERED OFFICE AND AGENT.
The name and address of the registered office of the Corporation in the State of
Delaware is the Corporation Trust Company, 1209 Orange Street, Wilmington,
Delaware 19801.
ARTICLE III. NATURE OF BUSINESS.
The nature of the business or purposes to be conducted by the Corporation is to
engage in any lawful act or activity for which corporations may be organized
under the Delaware General Corporation Law.
ARTICLE IV. CAPITAL STOCK.
The Corporation is authorized to issue two classes of capital stock, designated
Common Stock and Preferred Stock. The total number of shares of stock which the
Corporation shall have authority to issue is Six Million (6,000,000) shares,
consisting of Five Million (5,000,000) shares of Common Stock, par value $.50
(the "COMMON STOCK") and One Million (1,000,000) shares of Preferred Stock, no
par value (the "PREFERRED STOCK"). Shares of Common Stock and Preferred Stock
are referred to herein as the "SHARES."
Section 1: COMMON STOCK. A statement of the designations, powers, preferences,
rights, qualifications, limitations and restrictions in respect of the Common
Stock is as follows:
(A) Dividends. The Board of Directors of the Corporation may declare
dividends to be paid to the holders of shares of Common Stock out of funds
legally available for the payment of dividends by declaring an amount per
share as a dividend. When and as dividends or other distributions are
declared, whether payable in cash, in property or in shares of stock of
the Corporation, the holders of Common Stock shall be entitled to share
equally, share for share, in such dividends or other distributions. No
dividends or other distributions shall be declared or paid in shares of
Common Stock or options, warrants or rights to acquire such stock or
securities convertible into or exchangeable for shares of such stock,
except dividends or other distributions payable ratably according to the
number of shares of Common Stock held by the holders thereof, in shares
of, or options, warrants or rights to acquire or securities convertible
into or exchangeable for Common Stock to holders of that class of stock.
(B) Liquidation Rights. Subject to the prior rights of holders of any
shares of stock of the Corporation ranking prior to the Common Stock upon
liquidation, dissolution or winding up (voluntary or otherwise), in the
event of any voluntary or involuntary liquidation, dissolution or winding
up of the affairs of the Corporation, the holders of Common Stock shall be
entitled to share, ratably according to the number of shares of Common
Stock held by them, in all assets of the Corporation available for
distribution to its stockholders.
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(C) Voting Rights. Except as required by applicable law, the holders of
Common Stock shall be entitled to vote on each matter on which the
stockholders of the Corporation shall be entitled to vote, and each holder
of Common Stock shall be entitled to one vote for each share of such stock
held by such holder.
SECTION 2. PREFERRED STOCK. The Board of Directors is authorized, subject to the
limitations prescribed by law and the provisions of this Article IV, to provide
for the issuance of shares of Preferred Stock from time to time in one or more
series, and by filing any certificate of designations required under Section
151(g) of the Delaware General Corporation Law (or its successor statute as in
effect from time to time), to fix or alter the number of shares of any series of
Preferred Stock, and to fix the powers, designations, preferences and relative,
participating, optional or other rights, and the qualifications, limitations or
restrictions granted to or imposed upon the shares of any unissued series of
Preferred Stock. The authority of the Board of Directors with respect to each
series shall include, but not be limited to, the determination of:
(a) the number of shares constituting and the distinctive designation of
such series;
(b) the dividend rights of the shares of such series, including whether
dividends shall be cumulative and, if so, from which date or dates, and the
relative rights of priority, if any, of payment of dividends on shares of
such series:
(c) whether such series shall have voting rights, and, if so, the terms of
such voting rights, including the number of votes per share, the number of
members of the Board of Directors or the percentage of members of the Board
of Directors each class or series of Preferred Stock may be entitled to
elect;
(d) whether such series shall have conversion rights and, if so, the terms
and conditions of such conversion, including provision for adjustment of
the conversion rate in such events as the Board of Directors shall
determine;
(e) whether or not the shares of such series shall be redeemable, and, if
so, the terms and conditions of such redemption, including the date or
dates upon or after which they shall be redeemable, and the amount per
share payable in case of redemption, which amount may vary as the Board of
Directors determines under different conditions and at different redemption
dates;
(f) whether such series shall have a sinking fund for the redemption or
purchase of shares of such series, and, if so, the terms and amount of such
sinking fund;
(g) the rights of the shares of such series in the event of voluntary or
involuntary liquidation, dissolution or winding up of the Corporation, and
the relative rights of priority, if any, of payment of shares of such
series: and
(h) any other relative rights, preferences and limitations of such series.
The Board of Directors may, within the limits and restrictions stated in any
resolution or resolutions of the Board of Directors originally fixing the number
of shares constituting any series, increase or decrease (but not below the
number of shares of such series then outstanding) the number of shares of any
such series subsequent to the issue of shares of that series. shares of
Preferred Stock that are redeemed, purchased or otherwise acquired by the
Corporation may be reissued except as otherwise provided by law or the
applicable certificate of designations.
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ARTICLE V. INCORPORATOR.
The name and mailing address of the incorporator is James V. Stepleton, 100
North Broadway, Suite 1300, St. Louis, Missouri 63102.
ARTICLE VI. BOARD OF DIRECTORS.
SECTION 1. NUMBER OF DIRECTORS. The properties, business and affairs of the
Corporation shall be managed and controlled by a Board of Directors of not less
than three (3) nor more than nine (9) members. Subject to the rights of the
holders of any Preferred Stock then outstanding, the specific number of
directors within such minimum and maximum shall be set forth in the bylaws and
may be changed from time to time by resolution duly adopted by a majority vote
of the entire Board of Directors. Notwithstanding any other provision of this
Article VI, and except as otherwise required by law, whenever the holders of any
one or more series of Preferred Stock or other securities of the Corporation
shall have the right, voting separately as a class, to elect one or more
directors of the Corporation, such directorship or directorships shall be in
addition to the number of directors as determined in the manner provided in the
Bylaws of the Corporation, and, unless otherwise provided by law or by
resolution of the Board of Directors authorizing such series of Preferred Stock
or other securities of the Corporation, the filling of vacancies and other
features of any such directorship shall be governed by the terms of this
Certificate of Incorporation applicable thereto, except that, unless otherwise
provided by law or by resolution of the Board of Directors authorizing such
series of Preferred Stock or other securities of the Corporation, any such
director shall hold office for a term expiring at the next succeeding annual
meeting of stockholders and until such director's successor shall be elected and
qualified, or until such director's death, resignation or removal, whichever
occurs earlier.
SECTION 2. VACANCIES. Any vacancy on the Board of Directors for any reason,
whether arising through death, resignation or removal of a director or through
an increase in the number of directors, shall be filled by a majority vote of
the remaining directors, although less than a quorum, or by a sole remaining
director. The term of office of any director elected to fill such a vacancy
shall expire at the expiration of the term of office in which the vacancy
occurred.
SECTION 3. ELECTIONS. Elections of directors need not be by written ballot
except to the extent provided in the Bylaws of the Corporation.
ARTICLE VII. BYLAWS.
A majority of the Board of Directors is expressly authorized to make, alter,
amend or repeal the Bylaws of the Corporation. The stockholders of the
Corporation may adopt, amend or repeal the Bylaws of the Corporation.
ARTICLE VIII. STOCKHOLDER MEETINGS; BOOKS.
Meetings of stockholders shall be held at such time, on such date and at such
place (within or without the State of Delaware) as provided in the Bylaws of the
Corporation. Any action required or permitted to be taken by the stockholders of
the Corporation may be taken by consent in writing. The books of the Corporation
may be kept, subject to any applicable statutory provision, outside the State of
Delaware at such place or places as may be designated from time to time by the
Board of Directors or in the Bylaws of the Corporation.
ARTICLE IX. DIRECTOR LIABILITY; INDEMNIFICATION.
To the fullest extent permitted by the General Corporation Law of the State of
Delaware as the same exists or may hereafter be amended, a director of the
Corporation shall not be liable to the Corporation or its stockholders for
monetary damages for breach of fiduciary duty as a director. The liability of a
director of the Corporation to the Corporation or its stockholders for monetary
damages shall be eliminated to the fullest
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extent permissible under applicable law in the event it is determined that
Delaware law does not apply. The Corporation is authorized to provide by bylaw,
agreement or otherwise for indemnification of directors, officers, employees and
agents for breach of duty to the Corporation and its stockholders to the fullest
extent permitted by applicable law. Any repeal or modification of this Article
IX shall not result in any liability for a director with respect to any action
or omission occurring prior to such repeal or modification.
ARTICLE X. AMENDMENTS.
The Corporation reserves the right to amend this Certificate of Incorporation in
any manner permitted by the Delaware General Corporation Law and all rights and
powers conferred upon stockholders, directors and officers herein are granted
subject to this reservation. Notwithstanding the foregoing, the provisions set
forth in Articles VI, VIII, IX and this Article X may not be repealed or amended
in any respect, and no other provision may be adopted, amended or repealed which
would have the effect of modifying or permitting the circumvention of the
provisions set forth in Articles VI, VIII, IX and this Article X, unless such
action is approved by the affirmative vote of the holders of not less than 80%
of the outstanding shares of the Corporation entitled to vote on the matter.
IN WITNESS WHEREOF, the undersigned, being the incorporator hereinabove
named for the purpose of forming a corporation to do business both within and
without the State of Delaware, do make and file this Certificate, hereby
declaring under penalties of perjury that it is my act and deed and that the
facts stated herein are true.
-------------------------------
James V. Stepleton
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EXHIBIT C
By-Laws of VFC DELAWARE, INC.
(Incorporated in the State of Delaware)
<PAGE> 34
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I. OFFICE........................................................ 1
Section 1.1 Registered Office................................. 1
Section 1.2 Principal Office.................................. 1
ARTICLE II. MEETINGS OF STOCKHOLDERS..................................... 1
Section 2.1 Annual Meeting.................................... 1
Section 2.2 Special Meetings.................................. 1
Section 2.3 Place and Time of Meetings........................ 1
Section 2.4 Notice of Meetings................................ 1
Section 2.5 Adjournment....................................... 2
Section 2.6 Date for Determining Stockholders
Entitled to Vote................................ 2
Section 2.7 List of Shareholders Entitled to Vote............. 2
Section 2.8 Quorum and Required Vote.......................... 3
Section 2.9 Proxies........................................... 3
Section 2.10 Convening Stockholders Meetings................... 3
Section 2.11 Voting at Meetings................................ 4
Section 2.12 Persons Who May Vote Certain Shares............... 4
Section 2.13 Actions Without Meetings.......................... 4
ARTICLE III. BOARD OF DIRECTORS.......................................... 5
Section 3.1 General Powers.................................... 5
Section 3.2 Number, Term and Election......................... 5
Section 3.3 Removal of Directors.............................. 5
Section 3.4 Regular Meetings.................................. 5
Section 3.5 Special Meetings.................................. 5
Section 3.6 Place of Meetings................................. 6
Section 3.7 Quorum and Required Vote.......................... 6
Section 3.8 Executive Committee............................... 6
Section 3.9 Other Committees.................................. 7
Section 3.10 Compensation...................................... 7
Section 3.11 Actions Without Meetings.......................... 7
ARTICLE IV. OFFICERS..................................................... 7
Section 4.1 General........................................... 7
Section 4.2 Chief Executive Officer........................... 8
Section 4.3 Chairman of the Board............................. 8
Section 4.4 President......................................... 8
Section 4.5 Vice-presidents................................... 8
</TABLE>
-i-
<PAGE> 35
<TABLE>
<S> <C> <C>
Section 4.6 Secretary. ....................................... 8
Section 4.7 Treasurer......................................... 9
Page
----
Section 4.8 Assistant Secretaries and Assistant
Treasurers...................................... 9
Section 4.9 Vacancies. ....................................... 9
ARTICLE V. CAPITAL STOCK................................................. 9
- -------------------------
Section 5.1 Certificates...................................... 9
Section 5.2 Lost, Stolen or Destroyed Certificates............ 10
Section 5.3 Stock Transfers................................... 10
Section 5.4 Closing of Transfer Books......................... 10
Section 5.5 Record Holders of Stock........................... 11
Section 5.6 Dividends......................................... 11
Section 5.7 Treasury Stock.................................... 11
ARTICLE VI. INDEMNIFICATION.............................................. 11
Section 6.1 Liabilities Covered............................... 11
Section 6.2 Advance Payment of Expenses....................... 12
Section 6.3 Insurance......................................... 12
Section 6.4 Consolidations and Mergers........................ 12
Section 6.5 Other Definitions................................. 13
ARTICLE VII. MISCELLANEOUS............................................... 13
Section 7.1 Negotiable Instruments and Contracts.............. 13
Section 7.2 Resignations...................................... 13
Section 7.3 Fiscal year....................................... 13
Section 7.4 Action With Respect to Securities
of Other Corporations........................... 13
Section 7.5 Computation of Time............................... 14
Section 7.6 Waiver of Notice.................................. 14
Section 7.7 Amendments........................................ 14
</TABLE>
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BY-LAWS
ARTICLE I. OFFICE
SECTION 1.1. REGISTERED OFFICE. The registered office of the Corporation,
required by the General Corporation Law of the State of Delaware to be
maintained in the State of Delaware, shall be in care of The Corporation Trust
Company, 1209 Orange Street, Wilmington, Delaware 19801, or such other address
as the Board of Directors of the Corporation may from time to time determine.
SECTION 1.2. PRINCIPAL OFFICE. The principal office of the Corporation shall be
located in San Rafael, State of California. The Corporation may have such other
offices, either within or without the State of Delaware, as the Board of
Directors may designate, or as the business of the Corporation may from time to
time require.
ARTICLE II. MEETINGS OF STOCKHOLDERS
SECTION 2.1. ANNUAL MEETING. An annual meeting of the stockholders, for the
purpose of electing directors and for the transaction of such other business as
may come before the meeting, shall be held on the last Wednesday in the month of
May in each year, beginning with the year 1998, or on such other day within such
month as shall be fixed by the Board of Directors. If the day fixed for the
annual meeting shall be a legal holiday, such meeting shall be held on the next
succeeding business day. If the election of directors shall not be held on the
day designated herein for any annual meeting of the stockholders, or at any
adjournment thereof, the Board of Directors shall cause the election to be held
at a special meeting of the stockholders as soon thereafter as may be
convenient.
SECTION 2.2. SPECIAL MEETINGS. Special meetings of the stockholders, which may
be held for any purpose or purposes, may be called by the Chairman of the Board,
the President, or the Board of Directors.
SECTION 2.3. PLACE AND TIME OF MEETINGS. Meetings of stockholders shall be held
at the principal office of the Corporation or such other place as may be
designated from time to time by the Board of Directors. Such meetings shall be
convened at 10:00 a.m.; provided, however, that the Board of Directors or the
person or persons calling such meeting may fix another reasonable hour for
convening.
SECTION 2.4. NOTICE OF MEETINGS. Unless waived, written or printed notice of
each meeting of stockholders shall be given which shall state the place, day and
hour of the meeting and, in the case of a special meeting, or where otherwise
required by law, the purpose or purposes for which the meeting is called. Such
notice shall be delivered or given not less than ten (10) nor more than sixty
(60) days before the date of the meeting, either personally or by mail, by or at
the direction of the Chairman of the Board, the President, the Secretary, or the
persons calling the meeting, to each stockholder of record entitled to vote at
such meeting. If such notice is given by mail, it shall be deemed delivered when
deposited in the United States mail, postage prepaid, addressed to the
stockholder at his address as it appears on the records of the Corporation.
Attendance of a stockholder at any meeting shall constitute a waiver of notice
of such meeting, except when the stockholder attends a meeting for the express
purpose of objecting, at the beginning of such meeting, to the transaction of
any business thereat because the meeting is not lawfully called or convened.
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SECTION 2.5. ADJOURNMENT. Any meeting of stockholders may adjourn from time to
time to reconvene at the same or some other place, and notice need not be given
of any such adjourned meeting if the time and place thereof are announced at the
meeting at which the adjournment is taken. At the adjourned meeting the
Corporation may transact any business that might have been transacted at the
original meeting. If the adjournment is for more than thirty (30) days, or if
after the adjournment a new record date is fixed for the adjourned meeting, a
notice of the adjourned meeting shall be given to each stockholder of record
entitled to vote at the meeting.
SECTION 2.6. DATE FOR DETERMINING STOCKHOLDERS ENTITLED TO VOTE. The date for
determining the stockholders entitled to vote at a meeting of stockholders shall
be established pursuant to Section 5.4 if action thereunder shall have been
taken to establish the record date; otherwise, only the stockholders who are
stockholders of record at the close of business on the day next preceding the
day upon which notice is given, or, if notice is waived, at the close of
business on the day next preceding the day on which the meeting is held, shall
be entitled to notice of, and to vote at, the meeting and any adjournment of the
meeting.
SECTION 2.7. LIST OF SHAREHOLDERS ENTITLED TO VOTE. The officer who has charge
of the stock ledger of the Corporation shall prepare and make, at least ten (10)
days before every meeting of stockholders, a complete list of the stockholders
entitled to vote at the meeting, arranged in alphabetical order, and showing the
address of each stockholder and the number of shares registered in the name of
each stockholder. Such list shall be open to the examination of any stockholder,
for any purpose germane to the meeting, during ordinary business hours, for a
period of at least ten (10) days prior to the meeting, either at a place within
the city where the meeting is to be held, which place shall be specified in the
notice of the meeting, or, if not so specified, at the place where the meeting
is to be held. The list shall also be produced and kept at the time and place of
the meeting during the whole time thereof, and may be inspected by any
stockholder who is present.
SECTION 2.8. QUORUM AND REQUIRED VOTE. Unless a larger number is provided by
law, the Certificate of Incorporation, or these By-Laws, a majority of the
outstanding shares of stock of the Corporation entitled to vote at such meeting,
represented in person or by proxy, shall constitute a quorum at a meeting of
stockholders and the decision of a majority of those shares represented in
person or by proxy and voting shall be valid as a corporate act. If less than a
majority of the outstanding shares of each class of stock entitled to vote are
represented at any such meeting, a majority of the shares so represented may
adjourn the meeting to a specified date after such adjournment, from time to
time, provided that if any adjournment is to a date more than thirty (30) days
after the date of the meeting or the adjournment thereof, a notice of the
adjourned meeting shall be given to each stockholder of record who was entitled
to vote at the meeting. At such adjourned meeting at which a quorum shall be
present or represented, any business may be transacted that could have been
transacted at the meeting as originally noticed. The stockholders present at a
duly organized meeting may continue to transact business until the adjournment
thereof notwithstanding the subsequent withdrawal of stockholders representing
enough shares to leave less than a quorum.
SECTION 2.9. PROXIES. A stockholder entitled to vote at meeting of stockholders,
or to express consent or dissent to corporate action in writing without a
meeting, may vote or consent either in person or by proxy executed in writing by
the stockholder or by his duly authorized attorney in fact. No proxy shall be
valid after three (3) years from the date of its execution, unless otherwise
provided in the proxy. A duly executed proxy shall be irrevocable if it states
that it is irrevocable and if, and only so long as, it is coupled with an
interest sufficient in law to support an irrevocable power. Proxies shall be
filed with the Secretary of the Corporation before or at the time of such
meeting. A stockholder granting a revocable proxy may revoke the same by (i)
attending in person and voting at the meeting, (ii) filing a written notice of
revocation with the Secretary prior to the meeting, or (iii) executing a proxy
bearing a date and time later than that of the proxy to be revoked.
SECTION 2.10. CONVENING STOCKHOLDERS MEETINGS. The President, or in his absence,
a Vice President, or in the absence of all of the foregoing, any other officer
or any of the persons calling the meeting by a notice given as herein provided
(in the order of seniority of age) shall call meetings of stockholders to order
and act as chairman thereof and determine the order of business thereof.
Notwithstanding the foregoing, the
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stockholders present may elect the chairman of such meeting from among their
members. The Secretary shall act as secretary of all meetings of stockholders
and shall record the proceedings thereof, but in the absence of the Secretary,
or if he is serving as chairman, the chairman may appoint any other person to
act as secretary.
SECTION 2.11. VOTING AT MEETINGS. Except as otherwise provided by law or the
Certificate of Incorporation, every stockholder entitled to vote at a meeting of
stockholders upon a particular question shall have one (1) vote for each share
of common stock standing in his name on the books of the Corporation on the
record date (as determined under Section 2.5 of these By-Laws).
SECTION 2.12. PERSONS WHO MAY VOTE CERTAIN SHARES. Shares standing in the name
of another corporation, domestic or foreign, may be voted by such officer, agent
or proxy as the by-laws of such corporation may prescribe or, in the absence of
a governing provision, as the board of directors of such corporation may
determine. Shares standing in the name of a deceased person may be voted by his
administrator or executor, either in person or by proxy. Shares standing in the
name of a guardian, custodian, curator, or trustee may be voted by such
fiduciary, either in person or by proxy. Shares standing in the name of a
receiver may be voted by such receiver, and shares held by or under the control
of a receiver may be voted by such receiver without the transfer thereof into
his name if authority to do so is contained in an appropriate order of the court
by which such receiver was appointed. A stockholder whose shares are pledged
shall be entitled to vote such shares (i) unless he has expressly empowered the
pledgee to vote thereon and has furnished notice thereof to the Corporation, or
(ii) until the shares have been transferred into the name of the pledgee, in
either of which cases the pledgee or his proxy shall be entitled to represent
and vote the shares so transferred. In all cases described in this section, the
Corporation may require reasonable substantiation of the right of any person to
vote the shares.
SECTION 2.13. ACTIONS WITHOUT MEETINGS. Unless otherwise provided by law or in
the Corporation's Certificate of Incorporation, any action required or permitted
to be taken at any annual or special meeting of stockholders of the Corporation
may be taken without a meeting, without prior notice and without a vote, if a
consent in writing, setting forth the action so taken, shall be signed by the
holders of outstanding stock having not less than the minimum number of votes
that would be necessary to authorize or take such action at a meeting at which
all shares entitled to vote thereon were present and voted. The record date for
determining stockholders entitled to express consent to corporate action in
writing without a meeting, when no prior action of the Board of Directors is
necessary, shall be the day on which the first written consent is expressed.
Prompt notice of the taking of any corporate action without a meeting by less
than unanimous written consent shall be given to those stockholders who have not
consented in writing.
ARTICLE III. BOARD OF DIRECTORS
SECTION 3.1. GENERAL POWERS. The property and business of the Corporation shall
be controlled and managed by the Board of Directors. The Board of Directors may
exercise all powers of the Corporation and do all lawful acts and things as are
not by law, the Certificate of Incorporation, or these By-Laws directed or
required to be exercised or done by the stockholders or some particular officer
of the Corporation.
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SECTION 3.2. NUMBER, TERM AND ELECTION. The number of directors constituting the
full Board of Directors of the Corporation shall be five (5), or such other
number not less than three (3) nor more than nine (9) as may from time to time
be established by amendment of these By-Laws. At the first annual meeting of
stockholders and at each annual meeting thereafter the stockholders entitled to
vote shall elect directors to hold office until the next succeeding annual
meeting. Each director shall hold office for the term for which he is elected
and until his successor shall have been elected and qualified, except as
otherwise provided by law or these By-Laws.
SECTION 3.3. REMOVAL OF DIRECTORS. Any director or the entire Board of Directors
may be removed, with or without cause, by the holders of a majority of the
shares of the Corporation's stock issued and outstanding and entitled to vote at
an election of directors, in the manner and subject to the limitations provided
by law.
SECTION 3.4. REGULAR MEETINGS. The Board of Directors, by resolution fixing the
time and place thereof, shall provide for the holding of a regular meeting or
meetings, which may thereafter be held at the designated time and place without
further notice thereof to the directors.
SECTION 3.5. SPECIAL MEETINGS. Special meetings of the Board of Directors may be
called by or at the request of the Chairman of the Board, the President, the
Secretary or any director. Unless waived, notice of any special meeting, stating
the place, day and hour thereof, which notice need not state the purpose or
purposes for the meeting, shall be given at least three (3) days prior thereto
by the person or one of the persons calling the meeting, either orally, or if in
writing, by hand delivery, mail or telegram, to each director either at the most
recent address which he has furnished the Secretary or at his last known
residence address. If notice is given by mail, such notice shall be deemed to be
delivered when deposited in the United States mail, so addressed, postage
prepaid. If notice is given by telegram, such notice shall be deemed to be
delivered when the telegram is delivered to the telegraph company. Attendance of
a director at any special meeting shall constitute a waiver of notice of such
meeting, except where a director attends a meeting for the express purpose of
objecting, at the beginning of such meeting, to the transaction of any business
thereat because such meeting is not lawfully called or convened.
SECTION 3.6. PLACE OF MEETINGS. Meetings of the Board of Directors or any
committee designated by the Board of Directors may be held at any place either
within or without the State of Delaware. Members of the Board of Directors or of
any committee designated by the Board of Directors may participate in a meeting
of the Board of Directors or of such committee by means of conference telephone
or similar communications equipment whereby all persons participating in the
meeting can hear each other, and participation in a meeting in this manner shall
constitute presence in person at the meeting.
SECTION 3.7. QUORUM AND REQUIRED VOTE. Unless a greater number is required by
law, the Certificate of Incorporation, or these By-Laws, a majority of the full
Board of Directors shall constitute a quorum for the transaction of business and
the vote of the majority of the directors present at a meeting at which a quorum
is present shall be the act of the Board of Directors. In the absence of a
quorum, a majority of the directors present at a meeting, or the director if
only one (1) is present, or the Secretary if no director is present, may adjourn
the meeting which may be held on a subsequent date without further notice,
provided a quorum is present at such adjourned meeting.
SECTION 3.8. EXECUTIVE COMMITTEE. The Board of Directors, by resolution adopted
by a majority of the whole board, may designate two (2) or more directors to
constitute an Executive Committee, which committee, except as provided by law or
by resolution of a majority of the full Board of Directors, shall have and
exercise all authority of the Board of Directors in the management of the
Corporation. Any or all members of the Executive Committee may be removed at any
time, with or without cause, by vote of a majority of the full Board of
Directors. Unless the Board of Directors provides for a greater number, a
majority of the members constituting the full Executive Committee shall be a
quorum and the act of such majority shall be the act of the Executive Committee.
In the absence or disqualification of a member of the Executive Committee, the
other member or members thereof present at a meeting and not disqualified from
voting, whether or not he or they constitute a
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quorum, may unanimously appoint another member of the Board of Directors to act
at the meeting in the place of such absent or disqualified number.
SECTION 3.9. OTHER COMMITTEES. Other committees of two (2) or more members of
the Board of Directors may be established from time to time by the Board of
Directors, by resolution adopted by a majority of the whole board. Such other
committees shall have such purposes and such powers and shall continue for such
terms as the Board of Directors may determine by resolution. The Board of
Directors shall have the power to appoint alternate members of any such
committee, to remove any member thereof and to fill any vacancy therein, and to
designate the chairman of such other committee, provided, however, that in the
absence or disqualification of a member of such committee, the other member or
members thereof present at a meeting and not disqualified from voting, whether
or not he or they constitute a quorum, may unanimously appoint another member of
the Board of Directors to act at the meeting in the place of such absent or
disqualified members. Unless otherwise provided by the Board of Directors, a
majority of the members of such committee shall be a quorum, and the act of a
majority of the members present at a meeting at which a quorum is present shall
be the act of such committee.
SECTION 3.10. COMPENSATION. The Corporation may reimburse each director for the
expenses, if any, incurred by him in attending each meeting of the Board of
Directors or of any committee of the Board of which he is a member, and may pay
such compensation or retainer to the directors as the Board of Directors may
from time to time determine.
SECTION 3.11. ACTIONS WITHOUT MEETINGS. Any action which is required or
permitted to be taken at a meeting of the Board of Directors or of the Executive
Committee or any other committee of the directors, may be taken without a
meeting if consents in writing, setting forth the action so taken, are signed by
all of the members of the Board of Directors or of any such committee, as the
case may be. The consents shall have the same force and effect as a unanimous
vote at a meeting duly held. The Secretary shall file the consents with the
minutes of the meetings of the Board of Directors or of such committee, as the
case may be.
ARTICLE IV. OFFICERS
SECTION 4.1. GENERAL. The principal Executive Officers of the Corporation shall
be a Chairman of the Board, a Chief Executive Officer, a President, one (1) or
more Vice-Presidents (any of whom may be designated with descriptive titles), a
Secretary, and a Treasurer. The Board of Directors may appoint such other
officers and agents (including, but not limited to, one (1) or more Assistant
Vice-Presidents, Assistant Secretaries and Assistant Treasurers), as it shall
deem necessary, who shall have such authority and shall perform such duties as
are set out in these By-Laws or as from time to time shall be prescribed by the
Board of Directors. Any two (2) or more of the aforesaid offices may be filled
by the same person. The Board of Directors, at its first annual meeting and
thereafter from time to time, shall elect the principal Executive Officers and
other officers of the Corporation, who shall serve at the pleasure of the Board
of Directors. Any officer or agent may be removed by the Board of Directors,
with or without cause, whenever in its judgment the best interests of the
Corporation will be served thereby. The Board of Directors shall determine the
salary and other compensation of all officers and agents of the Corporation.
SECTION 4.2. CHIEF EXECUTIVE OFFICER. The Chief Executive Officer of the
Corporation shall have general and active management of the Corporation and
shall see that all orders and resolutions of the Board of Directors are carried
out.
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SECTION 4.3. CHAIRMAN OF THE BOARD. The Chairman of the Board shall preside at
meetings of the Board of Directors. If expressly designated as such by the Board
of Directors, the Chairman of the Board shall be Chief Executive Officer of the
Corporation, with the powers and duties which attend to such position.
SECTION 4.4. PRESIDENT. If no Chairman of the Board is serving, or if the
Chairman of the Board has not been expressly designated Chief Executive Officer,
the President shall be the Chief Executive Officer of the Corporation, with the
powers and duties which attend to such position. If the Chairman of the Board is
Chief Executive Officer, the President shall be the Chief Operating Officer of
the Corporation, being responsible at all times to the Chairman of the Board. If
no Chairman of the Board is serving, or in the absence of the Chairman of the
Board, the President shall preside at meetings of the Board of Directors.
SECTION 4.5. VICE-PRESIDENTS. Vice-Presidents shall perform such duties and
exercise such powers as shall be delegated by the Chief Executive Officer or as
shall be designated by the Board of Directors.
SECTION 4.6. SECRETARY. The Secretary shall attend all meetings of the Board of
Directors and the stockholders, and except as otherwise provided in these
By-Laws, shall act as clerk thereof and record all votes and the minutes of all
proceedings in books kept for that purpose. He shall keep in safe custody the
seal of the Corporation and, when authorized by the Board of Directors, affix
the seal to any instrument requiring the same and, when so ordered, add his
signature as an attestation thereof. He shall give, or cause to be given, a
notice as required of all meetings of the stockholders and of the Board of
Directors; he shall keep or cause to be kept a stock certificate and transfer
book and a list of all the stockholders and their respective addresses and shall
perform such other duties as may be prescribed by the Board of Directors or by
the Chief Executive Officer, under whose supervision he shall be.
SECTION 4.7. TREASURER. The Treasurer shall have the custody of the
Corporation's funds and securities and shall keep or cause to be kept full and
accurate accounts of receipts and disbursements in books belonging to the
Corporation and shall deposit all monies and other valuable effects in the name
and to the credit of the Corporation in such depositaries as may be designated
by the Board of Directors. He shall disburse the funds of the Corporation as may
be ordered by the Board of Directors, taking proper vouchers for such
disbursements and shall render to the President and directors at the regular
meetings of the Board of Directors and to the stockholders at the annual meeting
of the stockholders or whenever the Board of Directors may require it, an
account of all his transactions as the Treasurer and of the financial condition
of the Corporation.
SECTION 4.8. ASSISTANT SECRETARIES AND ASSISTANT TREASURERS. The Assistant
Secretary or Secretaries, if any, shall perform such duties and exercise such
powers as shall be delegated by the Secretary or as shall be designated by the
chief executive officer or by the Board of Directors. An Assistant Secretary
may, in the absence or disability of the Secretary, perform all the duties and
exercise all the powers of the Secretary. The Assistant Treasurer or Treasurers,
if any, shall perform such duties and exercise such powers as shall be delegated
by the Treasurer or as shall be designated by the chief executive officer or by
the Board of Directors. An Assistant Treasurer may, in the absence or disability
of the Treasurer, perform all the duties and exercise all the powers of the
Treasurer.
SECTION 4.9. VACANCIES. If the office of any officer of the Corporation becomes
vacant because of death, resignation, removal or for any other reason or if any
officer of the Corporation is unable to perform the duties of his office for any
reason, the Board of Directors may choose a successor who shall replace such
officer or the Board of Directors may delegate the duties of any such vacant
office to any other officer or to any Director of the Corporation for the
unexpired portion of the term.
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ARTICLE V. CAPITAL STOCK
SECTION 5.1. CERTIFICATES. Every holder of stock in the Corporation shall be
entitled to have a certificate signed by or in the name of the Corporation by
the Chairman of the Board, if he is the Chief Executive Officer, or the
President or a Vice-President, and by the Secretary or an Assistant Secretary or
the Treasurer or an Assistant Treasurer, certifying the number of shares owned
by him. Any of or all of such signatures may be facsimiles. In case any such
officer, transfer agent or registrar who has signed or whose facsimile signature
has been placed on a certificate shall have ceased to be such officer, transfer
agent or registrar before such certificate is issued, such certificate may
nevertheless be issued by the Corporation with the same effect as if such person
were such officer, transfer agent or registrar at the date of issue.
SECTION 5.2. LOST, STOLEN OR DESTROYED CERTIFICATES. The Corporation may issue a
new certificate of stock in the place of any certificate theretofore issued by
it, alleged to have been lost, stolen or destroyed. The Corporation may require
the owner of the lost, stolen or destroyed certificate, or his legal
representative, to give the Corporation a bond sufficient to indemnify it
against any claim that may be made against it on account of the alleged loss,
theft or destruction of any such certificate or the issuance of such new
certificate.
SECTION 5.3. STOCK TRANSFERS. The Corporation shall register transfer of a
certificate of stock, together with the date of such transfer, if such
certificate is (i) delivered and endorsed by the person appearing by the
certificate to be the owner of the shares represented thereby, (ii) delivered
together with a separate document containing a written assignment of the
certificate or a power of attorney to sell, assign, or transfer the same, signed
by the person appearing by the certificate to be the owner of the shares
represented thereby, or (iii) delivered together with a separate document
containing a written assignment of the certificate signed by the trustee in
bankruptcy, receiver, guardian, executor, administrator, custodian, or other
person duly authorized by law (and presenting evidence of such authority
satisfactory to the Corporation) to transfer the certificate on behalf of the
person appearing by the certificate to be the owner of the shares represented
thereby.
SECTION 5.4. CLOSING OF TRANSFER BOOKS. So that the Corporation may determine
the stockholders entitled to notice of or to vote at any meeting of stockholders
or any adjournment thereof, or to express consent to corporate action in writing
without a meeting, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the purpose of any
other lawful action, the Board of Directors may fix, in advance, a record date,
which shall not be more than sixty (60) nor less than ten (10) days before the
date of such meeting, nor more than sixty (60) days prior to any other action.
Only the stockholders who are stockholders of record on the date of closing the
transfer books shall be entitled to notice of, and to vote at, the meeting, or
to express consent in writing to corporate action without a meeting, and any
adjournment thereof, or to receive payment of the dividend or other distribution
or allotment of rights, or to exercise any rights in respect of any change,
conversion or exchange of stock or for the purpose of any other lawful action,
as the case may be, notwithstanding any transfer of any shares on the books of
the Corporation after the date of closing of the transfer books or the record
date fixed as aforesaid.
SECTION 5.5. RECORD HOLDERS OF STOCK. The Corporation shall be entitled to treat
the holder of record of any share or shares of stock as the holder in fact
thereof and accordingly, shall not be bound to recognize any equitable or other
claim to or interest in such share or shares on the part of any other person,
whether or not it shall have express or other notice thereof, save as expressly
provided for by law.
SECTION 5.6. DIVIDENDS. The Board of Directors may declare, and the Corporation
may pay, dividends on its outstanding shares of capital stock in accordance with
law and the Certificate of Incorporation.
SECTION 5.7. TREASURY STOCK. All issued and outstanding stock of the Corporation
that may be purchased or otherwise acquired by the Corporation and not retired
shall be treasury stock, and shall be subject to disposal by action of the Board
of Directors. Such stock shall neither vote nor participate in dividends while
held by the
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Corporation nor be counted for purposes of determining whether a quorum exists
at any meeting of the stockholders.
ARTICLE VI. INDEMNIFICATION
SECTION 6.1. LIABILITIES COVERED. The Corporation
(i) shall indemnify, to the fullest extent permitted by law, any person
who was or is a party (other than a party plaintiff suing on his own
behalf or in the right of the Corporation) or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (including an
action by or in the right of the Corporation), by reason of the fact that
such person is or was or has agreed to become a director or officer of the
Corporation, or is or was serving or has agreed to serve at the request of
the Corporation as a director or officer, of another corporation,
partnership, joint venture, trust or other enterprise, or by reason of any
action alleged to have been taken or omitted in such capacity, in the
manner set forth by the General Corporate Law of the State of Delaware, as
from time to time in effect, and
(ii) may indemnify, to the fullest extent permitted by law, any person who
was or is a party (other than a party plaintiff suing on his own behalf or
in the right of the Corporation) or is threatened to be made a party to
such an action, suit or proceeding by reason of the fact that such person
is or was or has agreed to become an employee or agent of the Corporation,
or is or was serving or has agreed to serve at the request of the
Corporation as an employee or agent of another corporation, partnership,
joint venture, trust, or other enterprise, upon a determination of the
Board of Directors of the Corporation that such person should be
indemnified, against expenses (including attorneys' fees), judgments,
fines, and amounts paid in settlement actually and reasonably incurred by
such person or on such person's behalf in connection with such action,
suit, or proceeding. Any and all indemnification and advancement of
expenses provided by or granted pursuant to this Article of these Bylaws
shall continue as to a person who has ceased to be a director, officer,
employee, or agent and shall inure to the benefit of the heirs, executors,
and administrators of such a person.
The Corporation may also from time to time enter into agreements providing
for indemnification of any such person upon a vote of the shareholders or
upon the vote of a majority of the disinterested directors of the
Corporation, to the fullest extent permitted by law. The indemnification
and advancement of expenses provided by, or granted pursuant to, these
Bylaws shall not be deemed exclusive of any other rights to which those
seeking indemnification or advancement of expenses may be entitled under
any agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office.
SECTION 6.2. ADVANCE PAYMENT OF EXPENSES. Expenses incurred by an officer or
director in defending a civil or criminal action, suit, or proceeding shall be
paid by the corporation in advance of the final disposition of the action, suit,
or proceeding upon receipt of an undertaking by or on behalf of the director or
officer to repay such amount if it shall ultimately be determined that he is not
lawfully entitled to be indemnified by the Corporation. Such expenses incurred
by other employees or agents may be so paid upon such terms and conditions, if
any, as the Board of Directors deems appropriate.
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SECTION 6.3. INSURANCE. The Board of Directors shall have the power to cause the
Corporation to purchase and maintain insurance 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, employee, or
agent of another corporation, partnership, joint venture, trust, 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 these Bylaws.
SECTION 6.4. CONSOLIDATIONS AND MERGERS. For the purpose of this Article VI of
these Bylaws, references to "the Corporation" include all constituent
corporations (including any constituent of a constituent) absorbed in a
consolidation or merger as well as the resulting or surviving corporation so
that any person who is or was a director, officer, employee, or agent of any
such constituent corporation or is or was serving at the request of any such
constituent corporation as a director, officer, employee, or agent of another
corporation, partnership, joint venture, trust, or other enterprise shall stand
in the same position under the provisions of this Article of these Bylaws with
respect to the resulting or surviving corporation as he would have with respect
to such constituent corporation if its separate existence had continued.
SECTION 6.5. OTHER DEFINITIONS. For the purpose of this Article of these Bylaws,
the term "other enterprises" shall include employee benefit plans; the term
"fines" shall include any excise taxes assessed on a person with respect to an
employee benefit plan; and the term "serving at the request of the Corporation"
shall include any service as a director, officer, employee, or agent of the
Corporation which imposes duties on, or involves services by, such director,
officer, employee, or agent with respect to an employee benefit plan, its
participants, or beneficiaries; and a person who acted in good faith and in a
manner he reasonably believed to be in the interests of the participants and
beneficiaries of an employee benefit plan shall be deemed to have acted in a
manner "not opposed to the best interests of the corporation" as referred to in
this Article of these Bylaws.
ARTICLE VII. MISCELLANEOUS
SECTION 7.1. NEGOTIABLE INSTRUMENTS AND CONTRACTS. All checks, drafts, notes,
demands for money and all other commercial paper and contracts and other
obligations of the Corporation shall be executed in such manner and by such
officer or officers or persons as the Board of Directors may from time to time
designate.
SECTION 7.2. RESIGNATIONS. Any director or officer of the Corporation may resign
at any time by giving written notice to the Chief Executive Officer or the
Secretary. Such resignation shall take effect on the date on which the notice
thereof is received or at any later time specified therein, and, unless
otherwise specified herein, the acceptance of such resignation by the
Corporation shall not be necessary to make it effective.
SECTION 7.3. FISCAL YEAR. The Board of Directors shall, by resolution, determine
the fiscal year of the Corporation.
SECTION 7.4. ACTION WITH RESPECT TO SECURITIES OF OTHER CORPORATIONS. Unless
otherwise provided by the Board of Directors, the Chief Executive Officer, or,
if none, the President shall have the power to vote and otherwise act on behalf
of the Corporation, in person or by proxy, at any meeting of the stockholders of
or with respect to any action of the stockholders of any other corporation in
which the Corporation may hold securities, and otherwise to exercise any and all
rights powers which this Corporation may possess by reason of its ownership of
securities in such other corporation.
SECTION 7.5. COMPUTATION OF TIME. In applying any provision of these By-Laws
relating to the number of days prior or subsequent to an event that an act be
done or notice be given, calendar days shall be the basis of the computation of
the time period, excluding the day on which the act is to be done and including
the day of the event to which the act or notice relates.
SECTION 7.6. WAIVER OF NOTICE. Whenever any notice whatever is required to be
given under the
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provisions of the Delaware Corporation Law, the Certificate of Incorporation, or
these By-Laws, a waiver thereof in writing signed by the person or persons
entitled to such notice, whether before or after the time stated therein, shall
be deemed equivalent to the giving of such notice. Except as otherwise required
by law or the Certificate of Incorporation, neither the business to be
transacted at, nor the purpose of, any regular or special meeting of the
stockholders, the Board of Directors, or a committee of directors need be
specified in any written waiver of notice.
SECTION 7.7. AMENDMENTS. The Board of Directors, to the extent permitted by the
Certificate of Incorporation and by law, may, by the affirmative vote of a
majority of the full Board of Directors, alter, amend or repeal these By-Laws.
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VALLEY FORGE CORPORATION PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF VALLEY FORGE
CORPORATION. The undersigned, revoking all previous proxies, hereby appoints
Monica J. Burke as Proxy with the power to appoint her substitute, and hereby
authorizes her to represent and vote, as designated below, all of the shares of
common stock of Valley Forge Corporation (the "Corporation") held of record by
the undersigned on April 25, 1997, at the annual meeting of stockholders to be
held on June 12, 1997, or at any adjournment thereof.
ITEM 1. ELECTION OF DIRECTORS
_____ FOR all nominees listed below (except as marked to the contrary
below).
_____ WITHHOLD AUTHORITY to vote for all nominees listed below.
INSTRUCTIONS: To withhold authority to vote for any nominee, strike a
line through the nominee's name in the list below:
Martin J. Bloom Theodore P. Desloge, Jr.
David R. Brining Phillip F. Dressel Dale J. Warner
ITEM 2. Approval and adoption of an Agreement and Plan of Merger for the
Reincorporation of the Company in Delaware.
______ FOR ______ AGAINST ______ ABSTAIN
In her discretion, the Proxy is authorized to vote upon such other business
as may properly come before the annual meeting or any adjournment thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, DATED, AND RETURNED, WILL BE VOTED IN THE
MANNER DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE,
THIS PROXY WILL BE VOTED FOR ALL THE NOMINEES FOR DIRECTOR DESIGNATED IN ITEM 1
AND FOR ITEM 2.
PLEASE SIGN EXACTLY AS YOUR NAME APPEARS BELOW. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee, or guardian, please give full title as such. If a corporation, please
sign in full corporate name by the President or other authorized officer. If a
partnership, please sign in the partnership name by an authorized partner.
DATED: , 1997
----------------------
-----------------------------------
Signature
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Signature if held jointly
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY
USING THE ENCLOSED ENVELOPE.
