As filed with the Securities and
Exchange Commission on July 8, 1999 Registration No. 333-____
________________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
_______________________
PRIORITY HEALTHCARE CORPORATION
(Exact name of registrant as specified in its charter)
INDIANA 35-1927379
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
285 WEST CENTRAL PARKWAY 32714
ALTAMONTE SPRINGS, FLORIDA (Zip Code)
(Address of Principal Executive Offices)
PRIORITY HEALTHCARE CORPORATION
1997 STOCK OPTION AND INCENTIVE PLAN
(Full title of the plans)
ROBERT L. MYERS
PRESIDENT AND CHIEF EXECUTIVE OFFICER
285 WEST CENTRAL PARKWAY, ALTAMONTE SPRINGS, FLORIDA 32714
(Name and address of agent for service)
(407) 869-7001
(Telephone number, including area code, of agent for service)
COPY TO:
JAMES A. ASCHLEMAN
BAKER & DANIELS
300 NORTH MERIDIAN STREET, SUITE 2700
INDIANAPOLIS, INDIANA 46204
(317) 237-0300
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
TITLE OF AMOUNT TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
SECURITIES REGISTERED (1) OFFERING PRICE AGGREGATE OFFERING REGISTRATION
TO BE REGISTERED PER SHARE (2) OFFERING PRICE (2) FEE
<S> <C> <C> <C> <C>
Class B Common Stock, 1,000,000 $36.875 (3) $36,875,000 (3) $10,251.25
$0.01 par value
</TABLE>
(1)Pursuant to Rule 416(c) under the Securities Act of 1933 (the
"Securities Act"), this Registration Statement also registers additional
shares of Class B Common Stock as may be offered or issued to prevent
dilution resulting from stock splits, stock dividends and similar
transactions.
(2)It is impracticable to state the maximum offering price. Shares offered
pursuant to incentive stock options granted under the 1997 Stock Option
and Incentive Plan are to be offered at not less than the fair market
value of one share of Class B Common Stock of Priority Healthcare
Corporation on the date the options are granted.
(3)Estimated solely for purposes of calculating the registration fee and
computed in accordance with Rule 457(c) and (h) under the Securities Act
using the average of the high and low sale prices of the Class B Common
Stock as reported by the NASDAQ National Market System on July 2, 1999,
which was $36.875 per share.
<PAGE>
The Registrant's Registration Statement on Form S-8 (Registration No.
333-61479) is incorporated herein by reference.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all of
the requirements for filing on Form S-8 and has duly caused this
registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Altamonte Springs, State of
Florida, on July 6, 1999.
PRIORITY HEALTHCARE CORPORATION
By: /S/ ROBERT L. MYERS
Robert L. Myers
President and
Chief Executive Officer
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in their respective
capacities and on the respective dates indicated opposite their names.
Each person whose signature appears below hereby authorizes each of William
E. Bindley and Robert L. Myers, each with full power of substitution, to
execute in the name and on behalf of such person any post-effective
amendment to this Registration Statement and to file the same, with
exhibits thereto, and other documents in connection therewith, making such
changes in this Registration Statement as the registrant deems appropriate,
and appoints each of William E. Bindley and Robert L. Myers, each with full
power of substitution, attorney-in-fact to sign any amendment and any post-
effective amendment to this Registration Statement and to file the same,
with exhibits thereto, and other documents in connection therewith.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/S/ WILLIAM E. BINDLEY Chairman of the Board July 6, 1999
William E. Bindley
/S/ ROBERT L. MYERS President, Chief Executive July 6, 1999
Robert L. Myers Officer and Director
(Principal Executive Officer)
/S/ DONALD J. PERFETTO Vice President, Chief Financial July 6, 1999
Donald J. Perfetto Officer, Treasurer and Director
(Principal Financial and
Accounting Officer)
/S/ MICHAEL D. MCCORMICK Director July 6, 1999
Michael D. McCormick
/S/ THOMAS J. SALENTINE Director July 6, 1999
Thomas J. Salentine
/S/ RICHARD W. ROBERSON Director July 6, 1999
Richard W. Roberson
/S/ REBECCA M. SHANAHAN Director July 6, 1999
</TABLE>
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit DESCRIPTION
NO. OF EXHIBIT
<S> <C> <C>
4.1 Restated Articles of Incorporation of the Registrant.
4.2 By-Laws of the Registrant, as amended to date. (The
copy of this Exhibit filed as Exhibit 3-B to the
Company's Annual Report on Form 10-K for the year ended
December 31, 1998 is incorporated herein by reference.)
4.3 (i) Priority Healthcare Corporation 1997 Stock Option and
Incentive Plan. (The copy of this Exhibit filed as
Exhibit 10-C to the Company's Registration Statement on
Form S-1 (Registration No. 333-34463) is incorporated
herein by reference.)
(ii) First Amendment to the Priority Healthcare Corporation
1997 Stock Option and Incentive Plan. (The copy of
this Exhibit filed as Exhibit 10-C(ii) to the Company's
Quarterly Report on Form 10-Q for the quarter ended
September 30, 1998 is incorporated herein by
reference.)
(iii) Second Amendment to the Priority Healthcare Corporation
1997 Stock Option and Incentive Plan.
5 Opinion of Baker & Daniels, counsel for Registrant, as
to the legality of the securities being registered.
23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of Baker & Daniels (included in the Baker &
Daniels Opinion filed as Exhibit 5).
24 Powers of Attorney (included on the Signature Page of
the Registration Statement).
</TABLE>
EXHIBIT 4.1
RESTATED ARTICLES OF INCORPORATION
OF
PRIORITY HEALTHCARE CORPORATION
Priority Healthcare Corporation (hereinafter referred to as the
"Corporation"), desiring to amend and restate its Articles of Incorporation
effective as of the date Articles of Restatement are submitted to the
Indiana Secretary of State for approval, pursuant to the provisions of the
Indiana Business Corporation Law (hereinafter referred to as the
"Corporation Law"), submits the following Restated Articles of
Incorporation:
ARTICLE I
NAME
The name of the Corporation is Priority Healthcare Corporation.
ARTICLE II
PURPOSES AND POWERS
SECTION 2.1. PURPOSES OF THE CORPORATION. The purposes for which the
Corporation is formed are (a) to engage in the general business of the
distribution and sale of medical products and pharmaceuticals, directly or
indirectly through one or more subsidiaries, and to carry on such
activities of every kind or nature as may be allied or incidental to such
general business, and (b) to engage in the transaction of any or all lawful
business for which corporations may now or hereafter be incorporated under
the Corporation Law.
SECTION 2.2. POWERS OF THE CORPORATION. The Corporation shall have
(a) all powers now or hereafter authorized by or vested in corporations
pursuant to the provisions of the Corporation Law, (b) all powers now or
hereafter vested in corporations by common law or any other statute or act,
and (c) all powers authorized by or vested in the Corporation by the
provisions of these Restated Articles of Incorporation or by the provisions
of its By-Laws as from time to time in effect.
ARTICLE III
TERM OF EXISTENCE
The period during which the Corporation shall continue is perpetual.
ARTICLE IV
REGISTERED OFFICE AND AGENT
The street address of the Corporation's registered office at the time
of adoption of these Restated Articles of Incorporation is 10333 North
Meridian Street, Indianapolis, Indiana 46290, and the name of its Resident
Agent at such office at the time of adoption of these Restated Articles of
Incorporation is Michael D. McCormick.
ARTICLE V
AUTHORIZED SHARES
SECTION 5.1. AUTHORIZED CLASSES AND NUMBER OF SHARES. The total
number of shares which the Corporation has authority to issue shall be
60,000,000 shares, consisting of 15,000,000 shares of Class A Common Stock,
$0.01 par value per share (the "Class A Common Stock"), 40,000,000 shares
of Class B Common Stock, $0.01 par value per share (the "Class B Common
Stock"), and 5,000,000 shares of Preferred Stock, without par value (the
"Preferred Stock"). The Class A Common Stock and the Class B Common Stock
are collectively referred to herein as the "Common Stock."
SECTION 5.2. GENERAL TERMS OF ALL SHARES. The Corporation shall have
the power to acquire (by purchase, redemption, or otherwise), hold, own,
pledge, sell, transfer, assign, reissue, cancel, or otherwise dispose of
the shares of the Corporation in the manner and to the extent now or
hereafter permitted by the laws of the State of Indiana (but such power
shall not imply an obligation on the part of the owner or holder of any
share to sell or otherwise transfer such share to the Corporation),
including the power to purchase, redeem, or otherwise acquire the
Corporation's own shares, directly or indirectly, and without pro rata
treatment of the owners or holders of any class or series of shares,
unless, after giving effect thereto, the Corporation would not be able to
pay its debts as they become due in the usual course of business or the
Corporation's total assets would be less than its total liabilities (and
without regard to any amounts that would be needed, if the Corporation were
to be dissolved at the time of the purchase, redemption, or other
acquisition, to satisfy the preferential rights upon dissolution of
shareholders whose preferential rights are superior to those of the holders
of the shares of the Corporation being purchased, redeemed, or otherwise
acquired, unless otherwise expressly provided with respect to a series of
Preferred Stock in the provisions of these Restated Articles of
Incorporation adopted by the Board of Directors pursuant to Section 5.5
hereof describing the terms of such series). Shares of the Corporation
purchased, redeemed, or otherwise acquired by it shall constitute
authorized but unissued shares, unless prior to any such purchase,
redemption, or other acquisition, or within thirty (30) days thereafter,
the Board of Directors adopts a resolution providing that such shares
constitute authorized and issued but not outstanding shares.
The Board of Directors of the Corporation may dispose of, issue, and
sell shares in accordance with, and in such amounts as may be permitted by,
the laws of the State of Indiana and the provisions of these Restated
Articles of Incorporation and for such consideration, at such price or
prices, at such time or times and upon such terms and conditions (including
the privilege of selectively repurchasing the same) as the Board of
Directors of the Corporation shall determine, without the authorization or
approval by any shareholders of the Corporation. Shares may be disposed
of, issued, and sold to such persons, firms, or corporations as the Board
of Directors may determine, without any preemptive or other right on the
part of the owners or holders of other shares of the Corporation of any
class or kind to acquire such shares by reason of their ownership of such
other shares.
The Corporation shall have the power to declare and pay dividends or
other distributions upon the issued and outstanding shares of the
Corporation, subject to the limitation that a dividend or other
distribution may not be made if, after giving it effect, the Corporation
would not be able to pay its debts as they become due in the usual course
of business or the Corporation's total assets would be less than its total
liabilities (and without regard to any amounts that would be needed, if the
Corporation were to be dissolved at the time of the dividend or other
distribution, to satisfy the preferential rights upon dissolution of
shareholders whose preferential rights are superior to those of the holders
of shares receiving the dividend or other distribution, unless otherwise
expressly provided with respect to a series of Preferred Stock in the
provisions of these Restated Articles of Incorporation adopted by the Board
of Directors pursuant to Section 5.5 hereof describing the terms of such
series). Except as otherwise provided in Section 5.4, the Corporation
shall have the power to issue shares of one class or series as a share
dividend or other distribution in respect of that class or series or one or
more other classes or series.
SECTION 5.3. VOTING RIGHTS OF SHARES.
(a) COMMON STOCK. Except as otherwise provided by the Corporation Law
and subject to such shareholder disclosure and recognition procedures
(which may include voting prohibition sanctions) as the Corporation may by
action of its Board of Directors establish, shares of Common Stock have
unlimited voting rights. Shares of Class A Common Stock shall, when
validly issued by the Corporation, entitle the holder thereof to three (3)
votes per share on all matters submitted to a vote of the shareholders of
the Corporation. Shares of Class B Common Stock shall, when validly issued
by the Corporation, entitle the holder thereof to one (1) vote per share on
all matters submitted to a vote of the shareholders of the Corporation.
Except as required by the Corporation Law, holders of Common Stock shall
vote together as a single voting group on all matters submitted to a vote
of shareholders. Shares of Common Stock shall not have cumulative voting
rights.
(b) PREFERRED STOCK. Except as required by the Corporation Law or by
the provisions of these Restated Articles of Incorporation adopted by the
Board of Directors pursuant to Section 5.5 hereof describing the terms of
the Preferred Stock or a series thereof, the holders of Preferred Stock
shall have no voting rights or powers. Shares of Preferred Stock shall,
when validly issued by the Corporation, entitle the record holder thereof
to vote as and on such matters, but only as and on such matters, as the
holders thereof are entitled to vote under the Corporation Law or under the
provisions of these Restated Articles of Incorporation adopted by the Board
of Directors pursuant to Section 5.5 hereof describing the terms of the
Preferred Stock or a series thereof (which provisions may provide for
special, conditional, limited, or unlimited voting rights, including
multiple or fractional votes per share, or for no right to vote, except to
the extent required by the Corporation Law) and subject to such shareholder
disclosure and recognition procedures (which may include voting prohibition
sanctions) as the Corporation may by action of the Board of Directors
establish.
SECTION 5.4. OTHER TERMS OF COMMON STOCK.
(a) DISTRIBUTIONS.
(1) Except with respect to voting rights as provided in Section 5.3
hereof, shares of Class A Common Stock and Class B Common Stock shall
be equal in every respect insofar as their relationship to the
Corporation is concerned, but such equality of rights shall not imply
equality of treatment as to redemption or other acquisition of shares
by the Corporation.
(2) Subject to the rights of the holders of any outstanding
Preferred Stock issued under Section 5.5 hereof, the holders of Class
A Common Stock and Class B Common Stock shall be entitled to share
ratably in such dividends or other distributions (other than
purchases, redemptions, or other acquisitions of shares by the
Corporation), if any, as are declared and paid from time to time at
the discretion of the Board of Directors, but only if at the same
time equal dividends are paid on outstanding shares of each class of
Common Stock. The Corporation shall not distribute to all holders of
Class A Common Stock or Class B Common Stock evidences of its
indebtedness or assets (excluding cash dividends or other
distributions to the extent permitted by or rights or warrants to
subscribe for or purchase securities issued by the Corporation or
property of the Corporation), without making the same distribution to
holders of outstanding shares of each class of Common Stock. In case
of any capital reorganization of the Corporation, or the
consolidation or merger of the Corporation with or into another
corporation, or a statutory share exchange, or the sale, transfer or
other disposition of all or substantially all of the property, assets
or business of the Corporation then, in each such case, each
outstanding share of Class A Common Stock and Class B Common Stock
shall receive the same treatment. Notwithstanding the foregoing, any
dividend or distribution payable in shares of Common Stock shall be
payable only in shares of Class A Common Stock to the holders of
Class A Common Stock and in shares of Class B Common Stock to the
holders of Class B Common Stock.
(3) In the event of any liquidation, dissolution or winding up of
the Corporation, whether voluntarily or involuntarily, after payment
shall have been made to the holders of the Preferred Stock of the
full amount to which they shall be entitled under this Article V, the
holders of Class A Common Stock and Class B Common Stock shall be
entitled, to the exclusion of the holders of the Preferred Stock of
any and all series, to share, ratably according to the number of
shares held by them, in all remaining assets of the Corporation
available for distribution to its shareholders.
(4) The Corporation may not subdivide outstanding shares of Class A
Common Stock or Class B Common Stock, combine its outstanding shares
of Class A Common Stock or Class B Common Stock into a smaller number
of shares, or issue by reclassification of shares of Class A Common
Stock or Class B Common Stock any shares of the Corporation other
than shares of Common Stock without making the same adjustment to
each class of Common Stock.
(b) CONVERSION OF CLASS A COMMON STOCK TO CLASS B COMMON STOCK.
(1) Any holder of shares of Class A Common Stock may request to
convert any or all of its shares of Class A Common Stock into shares
of Class B Common Stock at any time. Each share of Class A Common
Stock so requested to be converted shall be converted into one (1)
share of Class B Common Stock. Such conversion shall be effective at
the time of the receipt by the Corporation or any transfer agent for
the Class B Common Stock of a written request for conversion from the
holder of the shares of Class A Common Stock to be converted.
(2) Each share of Class A Common Stock shall automatically convert
into one (1) share of Class B Common Stock if such share is sold,
pledged or assigned or otherwise transferred in any transaction other
than: (i) a dividend or other distribution of shares of Class A
Common Stock by Bindley Western Industries, Inc. to its shareholders;
or (ii) a sale, pledge, assignment or other transfer to a Permitted
Transferee. The term Permitted Transferee shall include: (i) a
member of the immediate family of the transferor; (ii) a trust,
corporation or other entity formed for the benefit of or controlled
by the transferor or members of the immediate family of the
transferor; or (iii) a private foundation, charitable trust or
grantor retained annuity trust created by the transferor. The
Corporation shall be the final arbiter of any questions concerning
the application of the foregoing provisions.
(3) The outstanding shares of Class A Common Stock to be converted
into Class B Common Stock shall be so converted without any further
action by the holders of such shares and shall occur whether or not
the certificates representing such shares are surrendered to the
Corporation; PROVIDED, HOWEVER, that the Corporation shall not be
obligated to issue certificates evidencing the shares of Class B
Common Stock issued upon such conversion unless certificates
evidencing the shares of Class A Common Stock so converted are either
delivered to the Corporation, as hereinafter provided, or the holder
notifies the Corporation that such certificates have been lost,
stolen or destroyed and executes an agreement satisfactory to the
Corporation to indemnify the Corporation and the transfer agent from
any loss incurred by it in connection therewith. Upon the conversion
of any shares of Class A Common Stock, the holder of such shares
shall surrender the certificates representing such shares at the
office of the Corporation (or at such other office or offices, if
any, as the Board of Directors of the Corporation may designate).
Thereupon, there shall be issued and delivered to such holder a
certificate or certificates for the number of shares of Class B
Common Stock into which such shares of Class A Common Stock were
converted and a certificate or certificates for any remaining shares
of Class A Common Stock not so converted.
(4) All shares of Class A Common Stock which are converted into
shares of Class B Common Stock as provided herein shall be retired
and canceled and shall not be reissued, and the Corporation shall
from time to time take such appropriate action as may be necessary to
reduce the number of its authorized shares of Class A Common Stock
accordingly.
(5) The Corporation will at all times reserve and keep available
out of its authorized but unissued shares of Class B Common Stock,
solely for the purpose of issuance upon the conversion of Class A
Common Stock, such number of shares of Class B Common Stock as shall
then be issuable upon the conversion of all then outstanding shares
of Class A Common Stock.
(6) The issuance of certificates for Class B Common Stock upon
conversion of Class A Common Stock will be made without charge to the
holders of such shares for any issuance tax in respect thereof or
other cost incurred by the Corporation in connection with such
conversion and the related issuance of Class B Common Stock; PROVIDED
that the Corporation shall not be required to pay any tax which may
be payable in respect of any transfer involved in the issuance and
delivery of any certificate of Class B Common Stock in a name other
than that of the holder of the Class A Common Stock converted.
SECTION 5.5. OTHER TERMS OF PREFERRED STOCK.
(a) Preferred Stock may be issued from time to time in one or more
series, each such series to have such distinctive designation and such
preferences, limitations, and relative voting and other rights as shall be
set forth in these Restated Articles of Incorporation. Subject to the
requirements of the Corporation Law and subject to all other provisions of
these Restated Articles of Incorporation, the Board of Directors of the
Corporation may create one or more series of Preferred Stock and may
determine the preferences, limitations, and relative voting and other
rights of one or more series of Preferred Stock before the issuance of any
shares of that series by the adoption of an amendment to these Restated
Articles of Incorporation that specifies the terms of the series of
Preferred Stock. All shares of a series of Preferred Stock must have
preferences, limitations, and relative voting and other rights identical
with those of other shares of the same series and, if the description of
the series set forth in these Restated Articles of Incorporation so
provides, no series of Preferred Stock need have preferences, limitations,
or relative voting or other rights identical with those of any other series
of Preferred Stock.
Before issuing any shares of a series of Preferred Stock, the Board of
Directors shall adopt an amendment to these Restated Articles of
Incorporation, which shall be effective without any shareholder approval or
other action, that sets forth the preferences, limitations, and relative
voting and other rights of the series, and authority is hereby expressly
vested in the Board of Directors, by such amendment:
(1) To fix the distinctive designation of such series and the
number of shares which shall constitute such series, which number may
be increased or decreased (but not below the number of shares thereof
then outstanding) from time to time by action of the Board of
Directors;
(2) To fix the voting rights of such series, which may consist
of special, conditional, limited, or unlimited voting rights,
including multiple or fractional votes per share, or no right to vote
(except to the extent required by the Corporation Law);
(3) To fix the dividend or distribution rights of such series
and the manner of calculating the amount and time for payment of
dividends or distributions, including, but not limited to:
(A) the dividend rate, if any, of such series;
(B) any limitations, restrictions, or conditions
on the payment of dividends or other distributions,
including whether dividends or other distributions
shall be noncumulative or cumulative or partially
cumulative and, if so, from which date or dates;
(C) the relative rights of priority, if any, of
payment of dividends or other distributions on shares
of that series in relation to Common Stock and shares
of any other series of Preferred Stock; and
(D) the form of dividends or other distributions,
which may be payable at the option of the Corporation,
the shareholder, or another person (and in such case to
prescribe the terms and conditions of exercising such
option), or upon the occurrence of a designated event
in cash, indebtedness, stock or other securities or
other property, or in any combination thereof,
and to make provisions, in the case of dividends or other
distributions payable in stock or other securities, for adjustment of
the dividend or distribution rate in such events as the Board of
Directors shall determine;
(4) To fix the price or prices at which, and the terms and
conditions on which, the shares of such series may be redeemed or
converted, which may be
(A) at the option of the Corporation, the
shareholder, or another person or upon the occurrence
of a designated event;
(B) for cash, indebtedness, securities, or other
property or any combination thereof; and
(C) in a designated amount or in an amount
determined in accordance with a designated formula or
by reference to extrinsic data or events;
(5) To fix the amount or amounts payable upon the shares of
such series in the event of any liquidation, dissolution, or winding
up of the Corporation and the relative rights of priority, if any, of
payment upon shares of such series in relation to Common Stock and
shares of any other series of special shares; and to determine
whether or not any such preferential rights upon dissolution need be
considered in determining whether or not the Corporation may make
dividends, repurchases, or other distributions;
(6) To determine whether or not the shares of such series
shall be entitled to the benefit of a sinking fund to be applied to
the purchase or redemption of such series and, if so entitled, the
amount of such fund and the manner of its application;
(7) To determine whether or not the issue of any additional
shares of such series or of any other series in addition to such
series shall be subject to restrictions in addition to restrictions,
if any, on the issue of additional shares imposed in the provisions
of these Restated Articles of Incorporation fixing the terms of any
outstanding series of Preferred Stock theretofore issued pursuant to
this Section 5.5 and, if subject to additional restrictions, the
extent of such additional restrictions; and
(8) Generally to fix the other preferences or rights, and any
qualifications, limitations, or restrictions of such preferences or
rights, of such series to the full extent permitted by the
Corporation Law; provided, however, that no such preferences, rights,
qualifications, limitations, or restrictions shall be in conflict
with these Restated Articles of Incorporation or any amendment
hereof.
(b) Shares of Preferred Stock of any series that have been
redeemed (whether through the operation of a sinking fund or otherwise) or
purchased by the Corporation, or which, if convertible, have been converted
into shares of the Corporation of any other class or series, may be
reissued as a part of such series or of any other series of Preferred
Stock, subject to such limitations (if any) as may be fixed by the Board of
Directors with respect to such series of Preferred Stock in accordance with
subsection (a) of this Section 5.5.
ARTICLE VI
DIRECTORS
SECTION 6.1. NUMBER. The Board of Directors at the time of
adoption of these Restated Articles of Incorporation is composed of four
(4) members, which number may be changed from time to time by amendment to
the By-Laws. Whenever the By-Laws provide that the number of Directors
shall be three (3) or more, the By-Laws may also provide for staggering the
terms of the members of the Board of Directors by dividing the total number
of Directors into three (3) groups (with each group containing one-third
(1/3) of the total, as near as may be) whose terms of office expire at
different times.
Notwithstanding the first sentence of this Section 6.1, any
amendment to the By-Laws that would effect:
(a) any increase in the number of Directors over such number
as then in effect,
(b) any reduction in the number of Directors below such number
as then in effect, or
(c) any elimination or modification of the groups or terms of
office of the Directors as the By-Laws then in effect may provide,
shall also be approved by the affirmative vote of a majority of the entire
number of Directors of the Corporation who then qualify as Continuing
Directors with respect to all Related Persons (as such terms are defined
for purposes of Article VIII hereof).
SECTION 6.2. QUALIFICATIONS. Directors need not be shareholders
of the Corporation or residents of this or any other state in the United
States.
SECTION 6.3. VACANCIES. Vacancies occurring in the Board of
Directors shall be filled in the manner provided in the By-Laws or, if the
By-Laws do not provide for the filling of vacancies, in the manner provided
by the Corporation Law. The By-Laws may also provide that in certain
circumstances specified therein, vacancies occurring in the Board of
Directors may be filled by vote of the shareholders at a special meeting
called for that purpose or at the next annual meeting of shareholders.
SECTION 6.4. LIABILITY OF DIRECTORS. A Director's
responsibility to the Corporation shall be limited to discharging his
duties as a Director, including his duties as a member of any committee of
the Board of Directors upon which he may serve, in good faith, with the
care an ordinarily prudent person in a like position would exercise under
similar circumstances, and in a manner the Director reasonably believes to
be in the best interests of the Corporation, all based on the facts then
known to the Director.
In discharging his duties, a Director is entitled to rely on
information, opinions, reports, or statements, including financial
statements and other financial data, if prepared or presented by:
(a) One (1) or more officers or employees of the Corporation
whom the Director reasonably believes to be reliable and competent in
the matters presented;
(b) Legal counsel, public accountants, or other persons as to
matters the Director reasonably believes are within such person's
professional or expert competence; or
(c) A committee of the Board of which the Director is not a
member if the Director reasonably believes the Committee merits
confidence;
but a Director is not acting in good faith if the Director has knowledge
concerning the matter in question that makes reliance otherwise permitted
by this Section 6.4 unwarranted.
A Director shall not be liable for any action taken as a
Director, or any failure to take any action, unless (a) the Director has
breached or failed to perform the duties of the Director's office in
compliance with this Section 6.4, and (b) the breach or failure to perform
constitutes willful misconduct or recklessness.
SECTION 6.5. FACTORS TO BE CONSIDERED BY BOARD. In determining
whether to take or refrain from taking any action with respect to any
matter, including making or declining to make any recommendation to
shareholders of the Corporation, the Board of Directors may, in its
discretion, consider both the short term and long term best interests of
the Corporation (including the possibility that these interests may be best
served by the continued independence of the Corporation), taking into
account, and weighing as the Directors deem appropriate, the social and
economic effects thereof on the Corporation's present and future employees,
suppliers and customers of the Corporation and its subsidiaries, the
communities in which offices or other facilities of the Corporation are
located, and any other factors the Directors consider pertinent.
SECTION 6.6. REMOVAL OF DIRECTORS. Any or all of the members of
the Board of Directors may be removed, for good cause, only at a meeting of
the shareholders called expressly for that purpose, by the affirmative vote
of the holders of outstanding shares representing at least sixty-six and
two-thirds percent (66-2/3%) of all the votes then entitled to be cast at
an election of Directors. Directors may not be removed in the absence of
good cause.
SECTION 6.7. ELECTION OF DIRECTORS BY HOLDERS OF PREFERRED
STOCK. The holders of one (1) or more series of Preferred Stock may be
entitled to elect all or a specified number of Directors, but only to the
extent and subject to limitations as may be set forth in the provisions of
these Restated Articles of Incorporation adopted by the Board of Directors
pursuant to Section 5.5 hereof describing the terms of the series of
Preferred Stock.
ARTICLE VII
Provisions for Regulation of Business
AND CONDUCT OF AFFAIRS OF CORPORATION
SECTION 7.1. MEETINGS OF SHAREHOLDERS. Meetings of the
shareholders of the Corporation shall be held at such time and at such
place, either within or without the State of Indiana, as may be stated in
or fixed in accordance with the By-Laws of the Corporation and specified in
the respective notices or waivers of notice of any such meetings.
SECTION 7.2. SPECIAL MEETINGS OF SHAREHOLDERS. Special meetings
of the shareholders, for any purpose or purposes, unless otherwise
prescribed by the Corporation Law, may be called at any time by the Board
of Directors or the officers authorized to do so by the By-Laws and shall
be called by the Board of Directors if the Secretary of the Corporation
receives one (1) or more written, dated, and signed demands for a special
meeting, describing in reasonable detail the purpose or purposes for which
it is to be held, from the holders of shares representing at least twenty-
five percent (25%) of all the votes entitled to be cast on any issue
proposed to be considered at the proposed special meeting; provided,
however, that any such demand(s) delivered to the Secretary at any time at
which the Corporation has more than 50 shareholders must be properly
delivered by the holders of shares representing at least eighty percent
(80%) of all the votes entitled to be cast on any issue proposed to be
considered at the proposed special meeting. If the Secretary receives one
(1) or more proper written demands for a special meeting of shareholders,
the Board of Directors may set a record date for determining shareholders
entitled to make such demand.
SECTION 7.3. MEETINGS OF DIRECTORS. Meetings of the Board of
Directors of the Corporation shall be held at such place, either within or
without the State of Indiana, as may be authorized by the By-Laws and
specified in the respective notices or waivers of notice of any such
meetings or otherwise specified by the Board of Directors. Unless the By-
Laws provide otherwise, (a) regular meetings of the Board of Directors may
be held without notice of the date, time, place, or purpose of the meeting
and (b) the notice for a special meeting need not describe the purpose or
purposes of the special meeting.
SECTION 7.4. ACTION WITHOUT MEETING. Any action required or
permitted to be taken at any meeting of the Board of Directors or
shareholders, or of any committee of such Board, may be taken without a
meeting, if the action is taken by all members of the Board or all
shareholders entitled to vote on the action, or by all members of such
committee, as the case may be. The action must be evidenced by one (1) or
more written consents describing the action taken, signed by each Director,
or all the shareholders entitled to vote on the action, or by each member
of such committee, as the case may be, and, in the case of action by the
Board of Directors or a committee thereof, included in the minutes or filed
with the corporate records reflecting the action taken or, in the case of
action by the shareholders, delivered to the Corporation for inclusion in
the minutes or filing with the corporate records. Action taken under this
Section 7.4 is effective when the last Director, shareholder, or committee
member, as the case may be, signs the consent, unless the consent specifies
a different prior or subsequent effective date, in which case the action is
effective on or as of the specified date. Such consent shall have the same
effect as a unanimous vote of all members of the Board, or all
shareholders, or all members of the committee, as the case may be, and may
be described as such in any document.
SECTION 7.5. BY-LAWS. The Board of Directors shall have the
exclusive power to make, alter, amend, or repeal, or to waive provisions
of, the By-Laws of the Corporation by the affirmative vote of a majority of
the entire number of Directors at the time, except as expressly provided in
Section 6.1 hereof and as provided by the Corporation Law. All provisions
for the regulation of the business and management of the affairs of the
Corporation not stated in these Restated Articles of Incorporation shall be
stated in the By-Laws. The Board of Directors may adopt Emergency By-Laws
of the Corporation and shall have the exclusive power (except as may
otherwise be provided therein) to make, alter, amend, or repeal, or to
waive provisions of, the Emergency By-Laws by the affirmative vote of both
(a) a majority of the entire number of Directors at the time and (b) a
majority of the entire number of Directors who then qualify as Continuing
Directors with respect to all Related Persons (as such terms are defined
for purposes for Article VIII hereof).
SECTION 7.6. INTEREST OF DIRECTORS.
(a) A conflict of interest transaction is a transaction
with the Corporation in which a Director of the Corporation has a direct or
indirect interest. A conflict of interest transaction is not voidable by
the Corporation solely because of the Director's interest in the
transaction if any one (1) of the following is true:
(1) The material facts of the transaction and the Director's
interest were disclosed or known to the Board of Directors or a
committee of the Board of Directors and the Board of Directors or
committee authorized, approved, or ratified the transaction.
(2) The material facts of the transaction and the Director's
interest were disclosed or known to the shareholders entitled to vote
and they authorized, approved, or ratified the transaction.
(3) The transaction was fair to the Corporation.
(b) For purposes of this Section 7.6, a Director of the
Corporation has an indirect interest in a transaction if:
(1) Another entity in which the Director has a material
financial interest or in which the Director is a general partner is a
party to the transaction; or
(2) Another entity of which the Director is a director,
officer, or trustee is a party to the transaction and the transaction
is, or is required to be, considered by the Board of Directors of the
Corporation.
(c) For purposes of Section 7.6(a)(1), a conflict of interest
transaction is authorized, approved, or ratified if it receives the
affirmative vote of a majority of the Directors on the Board of Directors
(or on the committee) who have no direct or indirect interest in the
transaction, but a transaction may not be authorized, approved, or ratified
under this section by a single Director. If a majority of the Directors
who have no direct or indirect interest in the transaction vote to
authorize, approve, or ratify the transaction, a quorum shall be deemed
present for the purpose of taking action under this Section 7.6. The
presence of, or a vote cast by, a Director with a direct or indirect
interest in the transaction does not affect the validity of any action
taken under Section 7.6(a)(1), if the transaction is otherwise authorized,
approved, or ratified as provided in such subsection.
(d) For purposes of Section 7.6(a)(2), a conflict of interest
transaction is authorized, approved, or ratified if it receives the
affirmative vote of the holders of shares representing a majority of the
votes entitled to be cast. Shares owned by or voted under the control of a
Director who has a direct or indirect interest in the transaction, and
shares owned by or voted under the control of an entity described in
Section 7.6(b), may be counted in such a vote of shareholders.
SECTION 7.7. NONLIABILITY OF SHAREHOLDERS. Shareholders of the
Corporation are not personally liable for the acts or debts of the
Corporation, nor is private property of shareholders subject to the payment
of corporate debts.
SECTION 7.8. INDEMNIFICATION OF OFFICERS, DIRECTORS, AND OTHER
ELIGIBLE PERSONS.
(a) To the extent not inconsistent with applicable law, every
Eligible Person shall be indemnified by the Corporation against all
Liability and reasonable Expense that may be incurred by him in connection
with or resulting from any Claim, (1) if such Eligible Person is Wholly
Successful with respect to the Claim, or (2) if not Wholly Successful, then
if such Eligible Person is determined, as provided in either Section 7.8(f)
or 7.8(g), to have acted in good faith, in what he reasonably believed to
be the best interests of the Corporation or at least not opposed to its
best interests and, in addition, with respect to any criminal claim is
determined to have had reasonable cause to believe that his conduct was
lawful or had no reasonable cause to believe that his conduct was unlawful.
The termination of any Claim, by judgment, order, settlement (whether with
or without court approval), or conviction or upon a plea of guilty or of
nolo contendere, or its equivalent, shall not create a presumption that an
Eligible Person did not meet the standards of conduct set forth in clause
(2) of this subsection (a). The actions of an Eligible Person with respect
to an employee benefit plan subject to the Employee Retirement Income
Security Act of 1974 shall be deemed to have been taken in what the
Eligible Person reasonably believed to be the best interests of the
Corporation or at least not opposed to its best interests if the Eligible
Person reasonably believed he was acting in conformity with the
requirements of such Act or he reasonably believed his actions to be in the
interests of the participants in or beneficiaries of the plan.
(b) The term "Claim" as used in this Section 7.8 shall include
every pending, threatened, or completed claim, action, suit, or proceeding
and all appeals thereof (whether brought by or in the right of this
Corporation or any other corporation or otherwise), civil, criminal,
administrative, or investigative, formal or informal, in which an Eligible
Person may become involved, as a party or otherwise:
(1) by reason of his being or having been an Eligible Person,
or
(2) by reason of any action taken or not taken by him in his
capacity as an Eligible Person, whether or not he continued in such
capacity at the time such Liability or Expense shall have been
incurred.
(c) The term "Eligible Person" as used in this Section 7.8 shall
mean every person (and the estate, heirs, and personal representatives of
such 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, agent, or fiduciary of another foreign or
domestic corporation, partnership, joint venture, trust, employee benefit
plan, or other organization or entity, whether for profit or not. An
Eligible Person shall also be considered to have been serving an employee
benefit plan at the request of the Corporation if his duties to the
Corporation also imposed duties on, or otherwise involved services by, him
to the plan or to participants in or beneficiaries of the plan.
(d) The terms "Liability" and "Expense" as used in this Section
7.8 shall include, but shall not be limited to, counsel fees and
disbursements and amounts of judgments, fines, or penalties against
(including excise taxes assessed with respect to an employee benefit plan),
and amounts paid in settlement by or on behalf of an Eligible Person.
(e) The term "Wholly Successful" as used in this Section 7.8
shall mean (1) termination of any claim against the Eligible Person in
question without any finding of liability or guilt against him, (2)
approval by a court, with knowledge of the indemnity herein provided, of a
settlement of any Claim, or (3) the expiration of a reasonable period of
time after the making or threatened making of any Claim without the
institution of the same, without any payment or promise made to induce a
settlement.
(f) Every Eligible Person claiming indemnification hereunder
(other than one who has been Wholly Successful with respect to any Claim)
shall be entitled to indemnification (1) if special independent legal
counsel, which may be regular counsel of the Corporation, or other
disinterested person or persons, in either case selected by the Board of
Directors, whether or not a disinterested quorum exists (such counsel or
person or persons being hereinafter called the "Referee"), shall deliver to
the Corporation a written finding that such Eligible Person has met the
standards of conduct set forth in Section 7.8(a)(2), and (2) if the Board
of Directors, acting upon such written finding, so determines. The Board
of Directors shall, if an Eligible Person is found to be entitled to
indemnification pursuant to the preceding sentence, also determine the
reasonableness of the Eligible Person's Expenses. The Eligible Person
claiming indemnification shall, if requested, appear before the Referee,
answer questions that the Referee deems relevant and shall be given ample
opportunity to present to the Referee evidence upon which he relies for
indemnification. The Corporation shall, at the request of the Referee,
make available facts, opinions, or other evidence in any way relevant to
the Referee's findings that are within the possession or control of the
Corporation.
(g) If an Eligible Person claiming indemnification pursuant to
Section 7.8(f) is found not to be entitled thereto, or if the Board of
Directors fails to select a Referee under Section 7.8(f) within a
reasonable amount of time following a written request of an Eligible Person
for the selection of a Referee, or if the Referee or the Board of Directors
fails to make a determination under Section 7.8(f) within a reasonable
amount of time following the selection of a Referee, the Eligible Person
may apply for indemnification with respect to a Claim to a court of
competent jurisdiction, including a court in which the Claim is pending
against the Eligible Person. On receipt of an application, the court,
after giving notice to the Corporation and giving the Corporation ample
opportunity to present to the court any information or evidence relating to
the claim for indemnification that the Corporation deems appropriate, may
order indemnification if it determines that the Eligible Person is entitled
to indemnification with respect to the Claim because such Eligible Person
met the standards of conduct set forth in Section 7.8(a)(2). If the court
determines that the Eligible Person is entitled to indemnification, the
court shall also determine the reasonableness of the Eligible Person's
Expenses.
(h) The rights of indemnification provided in this Section 7.8
shall be in addition to any rights to which any Eligible Person may
otherwise be entitled. Irrespective of the provisions of this Section 7.8,
the Board of Directors may, at any time and from time to time, (1) approve
indemnification of any Eligible Person to the full extent permitted by the
provisions of applicable law at the time in effect, whether on account of
past or future transactions, and (2) authorize the Corporation to purchase
and maintain insurance on behalf of any Eligible Person 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.
(i) Expenses incurred by an Eligible Person with respect to any
Claim may be advanced by the Corporation (by action of the Board of
Directors, whether or not a disinterested quorum exists) prior to the final
disposition thereof upon receipt of an undertaking by or on behalf of the
Eligible Person to repay such amount unless he is determined to be entitled
to indemnification.
(j) The provisions of this Section 7.8 shall be deemed to be a
contract between the Corporation and each Eligible Person, and an Eligible
Person's rights hereunder shall not be diminished or otherwise adversely
affected by any repeal, amendment, or modification of this Section 7.8 that
occurs subsequent to such person becoming an Eligible Person.
(k) The provisions of this Section 7.8 shall be applicable to
Claims made or commenced after the adoption hereof, whether arising from
acts or omissions to act occurring before or after the adoption hereof.
ARTICLE VIII
APPROVAL OF BUSINESS COMBINATIONS
SECTION 8.1. SUPERMAJORITY VOTE. Except as provided in Sections
8.2 and 8.3 hereof, neither the Corporation nor its Subsidiaries, if any,
shall become a party to any Business Combination with a Related Person
without the prior affirmative vote at a meeting of the Corporation's
shareholders:
(a) Of not less than sixty-six and two-thirds percent (66-
2/3%) of all the votes entitled to be cast by the holders of the
outstanding shares of all classes of Voting Stock of the Corporation
considered for purposes of this Article VIII as a single class, and
(b) Of an Independent Majority of Shareholders.
Such favorable votes shall be in addition to any shareholder vote
which would be required without reference to this Section 8.1 and shall be
required notwithstanding the fact that no vote may be required, or that
some lesser percentage may be specified by law or elsewhere in these
Restated Articles of Incorporation or the By-Laws of the Corporation or
otherwise.
SECTION 8.2. FAIR PRICE EXCEPTION. The provisions of Section
8.1 of this Article VIII shall not apply to a Business Combination if all
of the conditions set forth in subsections (a) through (d) are satisfied.
(a) The fair market value of the property, securities, or
other consideration to be received per share by holders of each class
or series of capital stock of the Corporation in the Business
Combination is not less, as of the date of the consummation of the
Business Combination (the "Consummation Date"), than the higher of
the following: (1) the highest per share price (with appropriate
adjustments for recapitalizations and for stock splits, stock
dividends, and like distributions), including brokerage commissions
and solicitation fees paid by the Related Person in acquiring any of
its holdings, of such class or series of capital stock within the
two-year period immediately prior to the first public announcement of
the proposed Business Combination ("Announcement Date") plus interest
compounded annually from the date that the Related Person became a
Related Person (the "Determination Date"), or if later from a date
two years before the Consummation Date, through the Consummation
Date, at the rate publicly announced as the "prime rate" of interest
of Citibank, N.A. (or of such other major bank headquartered in New
York as may be selected by a majority of the Continuing Directors)
from time to time in effect, less the aggregate amount of any cash
dividends paid and the fair market value of any dividends paid in
other than cash on each share of such stock from the date from which
interest accrues under the preceding clause through the Consummation
Date up to but not exceeding the amount of interest so payable per
share; OR (2) the fair market value per share of such class or series
on the Announcement Date as determined by the highest closing sale
price during the 30-day period immediately preceding the Announcement
Date if such stock is listed on a securities exchange registered
under the Securities Exchange Act of 1934 or, if such stock is not
listed on any such exchange, the highest closing bid quotation with
respect to such stock during the 30-day period preceding the
Announcement Date on the National Association of Securities Dealers,
Inc. Automated Quotation System or any similar system then in use, or
if no such quotations are available, the fair market value of such
stock immediately prior to the first public announcement of the
proposed Business Combination as determined by the Continuing
Directors in good faith. In the event of a Business Combination upon
the consummation of which the Corporation would be the surviving
corporation or company or would continue to exist (unless it is
provided, contemplated, or intended that as part of such Business
Combination or within one year after consummation thereof a plan of
liquidation or dissolution of the Corporation will be effected), the
term "other consideration to be received" shall include (without
limitation) Common Stock and/or the shares of any other class of
stock retained by shareholders of the Corporation other than Related
Persons who are parties to such Business Combination;
(b) The consideration to be received in such Business
Combination by holders of each class or series of capital stock of
the Corporation other than the Related Person involved shall, except
to the extent that a shareholder agrees otherwise as to all or part
of the shares which he or she owns, be in the same form and of the
same kind as the consideration paid by the Related Person in
acquiring the majority of the shares of capital stock of such class
or series already Beneficially Owned by it;
(c) After such Related Person became a Related Person and
prior to the consummation of such Business Combination: (1) such
Related Person shall have taken steps to ensure that the Board of
Directors of the Corporation included at all times representation by
Continuing Directors proportionate to the ratio that the number of
shares of Voting Stock of the Corporation from time to time owned by
shareholders who are not Related Persons bears to all shares of
Voting Stock of the Corporation outstanding at the time in question
(with a Continuing Director to occupy any resulting fractional
position among the Directors); (2) such Related Person shall not have
acquired from the Corporation, directly or indirectly, any shares of
the Corporation (except upon conversion of convertible securities
acquired by it prior to becoming a Related Person or as a result of a
pro rata stock dividend, stock split, or division of shares or in a
transaction which satisfied all applicable requirements of this
Article VIII); (3) such Related Person shall not have acquired any
additional shares of Voting Stock of the Corporation or securities
convertible into or exchangeable for shares of Voting Stock except as
a part of the transaction which resulted in such Related Person's
becoming a Related Person; and (4) such Related Person shall not have
received the benefit, directly or indirectly (except proportionately
as a shareholder), of any loans, advances, guarantees, pledges, or
other financial assistance or tax credits provided by the Corporation
or any Subsidiary, or made any major change in the Corporation's
business or equity capital structure or entered into any contract,
arrangement, or understanding with the Corporation except any such
change, contract, arrangement, or understanding as may have been
approved by the favorable vote of not less than a majority of the
Continuing Directors of the Corporation; and
(d) A proxy or information statement complying with the
requirements of the Securities Exchange Act of 1934 and the rules and
regulations of the Securities and Exchange Commission thereunder, as
then in force for corporations subject to the requirements of Section
14 of such Act (even if the Corporation is not otherwise subject to
Section 14 of such Act), shall have been mailed to all holders of
shares of the Corporation's capital stock entitled to vote with
respect to such Business Combination. Such proxy or information
statement shall contain on the face page thereof, in a prominent
place, any recommendations as to the advisability (or inadvisability)
of the Business Combination which the Continuing Directors, or any of
them, may have furnished in writing and, if deemed advisable by a
majority of the Continuing Directors, a fair summary of an opinion of
a reputable investment banking firm addressed to the Corporation as
to the fairness (or lack of fairness) of the terms of such Business
Combination from the point of view of the holders of shares of Voting
Stock other than any Related Person (such investment banking firm to
be selected by a majority of the Continuing Directors, to be
furnished with all information it reasonably requests, and to be paid
a reasonable fee for its services upon receipt by the Corporation of
such opinion).
SECTION 8.3. DIRECTOR APPROVAL EXCEPTION. The provisions of
Section 8.1 hereof shall not apply to a Business Combination if:
(a) The Directors, by a favorable vote of not less than two-
thirds (2/3) of the Directors who then qualify as Continuing
Directors, (1) have expressly approved a memorandum of understanding
with the Related Person with respect to the Business Combination
prior to the time that the Related Person became a Related Person and
the Business Combination is effected on substantially the same terms
and conditions as are provided by the memorandum of understanding, or
(2) have otherwise approved the Business Combination; or
(b) The Business Combination is solely between the Corporation
and another corporation, one hundred percent (100%) of the Voting
Stock of which is owned directly or indirectly by the Corporation.
SECTION 8.4. DEFINITIONS. For purposes of this Article VIII:
(a) A "Business Combination" means:
(1) The sale, exchange, lease, transfer, or other
disposition to or with a Related Person or any
Affiliate or Associate of such Related Person by the
Corporation or any Subsidiaries (in a single
transaction or a Series of Related Transactions) of all
or substantially all, or any Substantial Part, of its
or their assets or businesses (including, without
limitation, securities issued by a Subsidiary, if any);
(2) The purchase, exchange, lease, or other
acquisition by the Corporation or any Subsidiaries (in
a single transaction or a Series of Related
Transactions) of all or substantially all, or any
Substantial Part, of the assets or business of a
Related Person or any Affiliate or Associate of such
Related Person;
(3) Any merger or consolidation of the Corporation
or any Subsidiary thereof into or with a Related Person
or any Affiliate or Associate of such Related Person or
into or with another Person which, after such merger or
consolidation, would be an Affiliate or an Associate of
a Related Person, in each case irrespective of which
Person is the surviving entity in such merger or
consolidation;
(4) Any reclassification of securities,
recapitalization, or other transaction (other than a
redemption in accordance with the terms of the security
redeemed) which has the effect, directly or indirectly,
of increasing the proportionate amount of shares of
Voting Stock of the Corporation or any Subsidiary
thereof which are Beneficially Owned by a Related
Person, or any partial or complete liquidation,
spinoff, splitoff, or splitup of the Corporation or any
Subsidiary thereof; provided, however, that this
Section 8.4(a)(4) shall not relate to any transaction
that has been approved by a majority of the Continuing
Directors; or
(5) The acquisition upon the issuance thereof of
Beneficial Ownership by a Related Person of shares of
Voting Stock or securities convertible into shares of
Voting Stock or any voting securities or securities
convertible into voting securities of any Subsidiary of
the Corporation, or the acquisition upon the issuance
thereof of Beneficial Ownership by a Related Person of
any rights, warrants, or options to acquire any of the
foregoing or any combination of the foregoing shares of
Voting Stock or voting securities of a Subsidiary, if
any.
(b) A "Series of Related Transactions" shall be deemed to
include not only a series of transactions with the same Related
Person, but also a series of separate transactions with a Related
Person or any Affiliate or Associate of such Related Person.
(c) A "Person" shall mean any individual, firm, corporation,
or other entity and any partnership, syndicate, or other group.
(d) "Related Person" shall mean any Person (other than the
Corporation or any Subsidiary of the Corporation or the Continuing
Directors, singly or as a group) who or that at any time described in
the last sentence of the penultimate paragraph of this subsection
(d):
(1) is the Beneficial Owner, directly or
indirectly, of more than ten percent (10%) of the
voting power of the outstanding shares of Voting Stock
and who has not been the Beneficial Owner, directly or
indirectly, of more than ten percent (10%) of the
voting power of the outstanding shares of Voting Stock
for a continuous period of two years prior to the date
in question; or
(2) is an Affiliate of the Corporation and at any
time within the two-year period immediately prior to
the date in question (but not continuously during such
two-year period) was the Beneficial Owner, directly or
indirectly, of ten percent (10%) or more of the voting
power of the then outstanding shares of Voting Stock;
or
(3) is an assignee of or has otherwise succeeded
to any shares of the Voting Stock which were at any
time within the two-year period immediately prior to
the date in question beneficially owned by any Related
Person, if such assignment or succession shall have
occurred in the course of a transaction or series of
transactions not involving a public offering within the
meaning of the Securities Act of 1933, as amended.
A Related Person shall be deemed to have acquired a share of
the Corporation at the time when such Related Person became the
Beneficial Owner thereof. For the purposes of determining whether a
Person is the Beneficial Owner of ten percent (10%) or more of the
voting power of the then outstanding Voting Stock, the outstanding
Voting Stock shall be deemed to include any Voting Stock that may be
issuable to such Person pursuant to a right to acquire such Voting
Stock and that is therefore deemed to be Beneficially Owned by such
Person pursuant to Section 8.4(e)(2)(A). A Person who is a Related
Person at (1) the time any definitive agreement relating to a
Business Combination is entered into, (2) the record date for the
determination of shareholders entitled to notice of and to vote on a
Business Combination, or (3) the time immediately prior to the
consummation of a Business Combination shall be deemed a Related
Person.
A Related Person shall not include the Board of Directors of
the Corporation acting as a group. In addition, a Related Person
shall not include any Person who possesses more than twenty percent
(20%) of the voting power of the outstanding shares of Voting Stock
of the Corporation or of Bindley Western Industries, Inc. at the time
of filing these Restated Articles of Incorporation.
(e) A Person shall be a "Beneficial Owner" of any shares of
Voting Stock:
(1) which such Person or any of its Affiliates or
Associates beneficially owns, directly or indirectly;
or
(2) which such Person or any of its Affiliates or
Associates has (A) the right to acquire (whether such
right is exercisable immediately or only after the
passage of time), pursuant to any agreement,
arrangement, or understanding or upon the exercise of
conversion rights, exchange rights, warrants, or
options, or otherwise, or (B) the right to vote
pursuant to any agreement, arrangement, or
understanding; or
(3) which are beneficially owned, directly or
indirectly, by any other Person with which such Person
or any of its Affiliates or Associates has any
agreement, arrangement, or understanding for the
purpose of acquiring, holding, voting, or disposing of
any shares of Voting Stock.
(f) An "Affiliate" of, or a person Affiliated with, a specific
Person means a Person that directly, or indirectly through one or
more intermediaries, controls, or is controlled by, or is under
common control with, the Person specified.
(g) The term "Associate" used to indicate a relationship with
any Person, means (1) any corporation or organization (other than
this Corporation or a majority-owned Subsidiary of this Corporation)
of which such Person is an officer or partner or is, directly or
indirectly, the Beneficial Owner of five percent (5%) or more of any
class of equity securities, (2) any trust or other estate in which
such Person has a substantial beneficial interest or as to which such
Person serves as trustee or in a similar fiduciary capacity, (3) any
relative or spouse of such Person, or any relative of such spouse,
who has the same home as such Person, or (4) any investment company
registered under the Investment Company Act of 1940, as amended, for
which such Person or any Affiliate of such Person serves as
investment adviser.
(h) "Subsidiary" means any corporation of which a majority of
any class of equity security is owned, directly or indirectly, by the
Corporation; provided, however, that for the purposes of the
definition of Related Person set forth in Section 8.4(d) hereof, the
term "Subsidiary" shall mean only a corporation of which a majority
of each class of equity security is owned, directly or indirectly, by
the Corporation.
(i) "Continuing Director" means any member of the Board of
Directors of the Corporation (the "Board") who is not associated with
the Related Person and was a member of the Board prior to the time
that the Related Person became a Related Person, and any successor of
a Continuing Director who is not associated with the Related Person
and is recommended to succeed a Continuing Director by not less than
two-thirds of the Continuing Directors then on the Board.
(j) "Independent Majority of Shareholders" shall mean the
holders of the outstanding shares of Voting Stock representing a
majority of all the votes entitled to be cast by all shares of Voting
Stock other than shares Beneficially Owned or controlled, directly or
indirectly, by a Related Person.
(k) "Voting Stock" shall mean all outstanding shares of
capital stock of the Corporation or another corporation entitled to
vote generally on the election of Directors, and each reference to a
proportion of shares of Voting Stock shall refer to such proportion
of the total number of votes (taking into account any multiple votes
per share) entitled to be cast by such shares.
(l) "Substantial Part" means properties and assets involved in
any single transaction or a Series of Related Transactions having an
aggregate fair market value of more than ten percent (10%) of the
total consolidated assets of the Person in question as determined
immediately prior to such transaction or Series of Related
Transactions.
SECTION 8.5. DIRECTOR DETERMINATIONS. A majority of the
Continuing Directors shall have the power to determine for the purposes of
this Article VIII, on the basis of information known to them: (a) the
number of shares of Voting Stock of which any Person is the Beneficial
Owner, (b) whether a Person is an Affiliate or Associate of another, (c)
whether a Person has an agreement, arrangement, or understanding with
another as to the matters referred to in the definition of "Beneficial
Owner," (d) whether the assets subject to any Business Combination
constitute a Substantial Part, (e) whether two or more transactions
constitute a Series of Related Transactions, and (f) such other matters
with respect to which a determination is required under this Article VIII.
SECTION 8.6. AMENDMENT OF ARTICLE VIII OR CERTAIN OTHER
PROVISIONS. Any amendment, change, or repeal of this Article VIII, or of
Sections 6.1, 6.6, 7.2 or 9.2, or any other amendment of these Restated
Articles of Incorporation which would have the effect of modifying or
permitting circumvention of this Article VIII or such other provisions of
these Restated Articles of Incorporation, shall require the affirmative
vote, at a meeting of shareholders of the Corporation:
(a) Of at least sixty-six and two-thirds percent (66-2/3%) of
the votes entitled to be cast by the holders of the outstanding
shares of all classes of Voting Stock of the Corporation considered
for purposes of this Article VIII as a single class; and
(b) Of an Independent Majority of Shareholders;
Provided, however, that this Section 8.6 shall not apply to, and such vote
shall not be required for, any such amendment, change, or repeal
recommended to shareholders by the favorable vote of not less than two-
thirds (2/3) of the Directors who then qualify as Continuing Directors with
respect to all Related Persons and any such amendment, change, or repeal so
recommended shall require only the vote, if any, required under the
applicable provisions of the Corporation Law.
SECTION 8.7. FIDUCIARY OBLIGATIONS UNAFFECTED. Nothing in this
Article VIII shall be construed to relieve any Related Person from any
fiduciary duty imposed by law.
SECTION 8.8. ARTICLE VIII NONEXCLUSIVE. The provisions of this
Article VIII are nonexclusive and are in addition to any other provisions
of law or these Restated Articles of Incorporation or the By-Laws of the
Corporation relating to Business Combinations, Related Persons, or similar
matters.
ARTICLE IX
MISCELLANEOUS PROVISIONS
SECTION 9.1. AMENDMENT OR REPEAL. Except as otherwise expressly
provided for in these Restated Articles of Incorporation, the Corporation
shall be deemed, for all purposes, to have reserved the right to amend,
alter, change, or repeal any provision contained in these Restated Articles
of Incorporation to the extent and in the manner now or hereafter permitted
or prescribed by statute, and all rights herein conferred upon shareholders
are granted subject to such reservation.
SECTION 9.2. REDEMPTION OF SHARES ACQUIRED IN CONTROL SHARE
ACQUISITIONS. If and whenever the provisions of IC 23-1-42 apply to the
Corporation, it is authorized to redeem its securities pursuant to IC 23-1-
42-10.
SECTION 9.3. CAPTIONS. The captions of the Articles and
Sections of these Restated Articles of Incorporation have been inserted for
convenience of reference only and do not in any way define, limit,
construe, or describe the scope or intent of any Article or Section hereof.
EXHIBIT 4.3(III)
SECOND AMENDMENT TO
PRIORITY HEALTHCARE CORPORATION
1997 STOCK OPTION AND INCENTIVE PLAN
WHEREAS, the Board of Directors of Priority Healthcare Corporation (the
"Company") adopted the Priority Healthcare Corporation 1997 Stock Option
and Incentive Plan (the "Plan") on August 25, 1997; and
WHEREAS, the Plan was approved by the then sole shareholder of the
Company on August 25, 1997, and further approved by the shareholders of the
Company for purposes of Section 162(m) of the Internal Revenue Code of
1986, as amended, on May 21, 1998; and
WHEREAS, the Plan was first amended by the Board of Directors of the
Company in certain respects not requiring shareholder approval, effective
as of September 15, 1998; and
WHEREAS, the Company now desires to further amend the Plan.
NOW, THEREFORE, the Plan is hereby amended as follows:
1. Section 5 of the Plan is hereby amended to read in its entirety as
follows:
5. SHARES SUBJECT TO PLAN. Subject to adjustment by the operation
of Section 11 hereof, the maximum number of Shares with respect to
which Awards may be made under the Plan is 2,250,000 Shares. The
number of Shares which may be granted under the Plan to any
Participant during any calendar year of the Plan under all forms of
Awards shall not exceed 300,000 Shares. The Shares with respect to
which Awards may be made under the Plan may either be authorized and
unissued shares or unissued shares heretofore or hereafter reacquired
and held as treasury shares. With respect to any Option which
terminates or is surrendered for cancellation or with respect to
Restricted Stock which is forfeited, new Awards may be granted under
the Plan with respect to the number of Shares as to which such
termination or forfeiture has occurred.
2. This Second Amendment to the Plan shall become effective upon its
approval by the Board of Directors and shareholders of the Company.
APPROVED BY THE BOARD OF DIRECTORS OF
PRIORITY HEALTHCARE CORPORATION AS OF
FEBRUARY 25, 1999
APPROVED BY THE SHAREHOLDERS OF PRIORITY
HEALTHCARE CORPORATION AS OF MAY 10, 1999
EXHIBIT 5
BAKER & DANIELS
300 NORTH MERIDIAN STREET
SUITE 2700
INDIANAPOLIS, INDIANA 46204
(317) 237-0300
July 6, 1999
Priority Healthcare Corporation
285 West Central Parkway
Altamonte Springs, Florida 32714
Re: Registration Statement on Form S-8
Ladies and Gentlemen:
We have acted as counsel to Priority Healthcare Corporation, an Indiana
corporation (the "Company"), in connection with the preparation and filing
with the Securities and Exchange Commission (the "Commission") of the
Company's Registration Statement on Form S-8 (the "Registration Statement")
under the Securities Act of 1933 (the "Act"), registering the offer and
sale of up to 1,000,000 additional shares of the Company's Class B Common
Stock, $0.01 par value (the "Class B Shares"), pursuant to the Company's
1997 Stock Option and Incentive Plan, as amended to date (the "Plan").
In so acting, we have examined and relied upon the originals, or copies
certified or otherwise identified to our satisfaction, of such records,
documents and other instruments as in our judgment are necessary or
appropriate to enable us to render the opinion expressed below.
Based on the foregoing, we are of the opinion that the Class B Shares
have been duly authorized and, when the Registration Statement shall have
become effective and the Class B Shares have been issued in accordance with
the Plan, the Class B Shares will be validly issued, fully paid and
nonassessable.
Our opinion expressed above is limited to the federal law of the United
States and the law of the State of Indiana.
<PAGE>
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving such consent, we do not thereby concede
that we are within the category of persons whose consent is required under
Section 7 of the Act or the Rules and Regulations of the Commission
thereunder.
Very truly yours,
/s/ BAKER & DANIELS
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated February 19, 1999, which appears
on page 39 of Priority Healthcare Corporation's Annual Report on Form 10-K
for the year ended December 31, 1998.
/s/ PricewaterhouseCoopers LLP
Indianapolis, Indiana
July 6, 1999
