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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Date of Report (Date of earliest event reported): September 23, 1997
BUILDING MATERIALS HOLDING CORPORATION
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 000-19335 91-1834269
(State or Other Jurisdiction (Commission File (I.R.S. Employer
of Incorporation or Organization) Number) Identification Number)
ONE MARKET PLAZA
STEUART TOWER #2650
SAN FRANCISCO, CALIFORNIA 94105
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (415) 227-1650
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ITEM 5. OTHER EVENTS
Building Materials Holding Corporation, a Delaware corporation (the
"Registrant") is a recently formed holding company which was organized to
provide its predecessor and principal subsidiary, BMC West Corporation, a
Delaware corporation ("BMC West"), with a holding company organizational
structure that can accommodate future growth from internal operations,
acquisitions or joint ventures, broaden the alternatives available for future
financing and generally provide for greater administrative and operational
flexibility.
On September 23, 1997, the holding company organizational structure was
effected by a merger conducted pursuant to Section 251(g) of the Delaware
General Corporation Law (the "Merger"), which provides for the formation of a
holding company structure without a vote of the stockholders of BMC West. In
the Merger, BMC West Merger Corporation, a Delaware corporation, merged with and
into BMC West, with BMC West as the surviving corporation. Prior to the
Merger, BMC West Merger Corporation was a direct, wholly-owned subsidiary of the
Registrant, which was a direct, wholly-owned subsidiary of BMC West organized
for the purpose of implementing the holding company organizational structure.
By virtue of the Merger, BMC West became a direct, wholly-owned subsidiary of
the Registrant, and all of BMC West's outstanding capital stock was converted,
on a share for share basis, into capital stock of the Registrant. As a result,
each stockholder of BMC West became the owner of an identical number of shares
of capital stock of the Registrant. Additionally, each outstanding option to
purchase shares of BMC West's common stock was automatically converted into an
option to purchase, upon the same terms and conditions, an identical number of
shares of the Registrant's common stock.
Also, in connection with the Merger, BMC West terminated the rights to
purchase shares of its Series C Junior Participating Cumulative Preferred Stock
that were issued to holders of BMC West's common stock pursuant to the Rights
Agreement, dated as of August 3, 1993, between BMC West and American Stock
Transfer and Trust Company, as Rights Agent (the "Old Rights Agreement"), in
accordance with the terms and conditions of the Old Rights Agreement. The
Registrant has entered into a new Rights Agreement (the "New Rights Agreement"),
pursuant to which holders of the Registrant's common stock will receive one
right to purchase the Registrant's Series C Junior Participating Cumulative
Preferred Stock for each share of the Registrant's common stock owned (a "New
Right"). Until the occurrence of certain events specified in the New Rights
Agreement, the New Rights will be represented by the outstanding shares of the
Registrant's common stock in respect of which the New Rights are issued, are not
transferable separately from the associated shares of the Registrant's common
stock, and are automatically transferred upon transfer of the associated common
stock.
The conversion of shares of capital stock in the Merger occurred without an
exchange of certificates. Accordingly, certificates formerly representing
shares of outstanding capital stock of BMC West are deemed to represent shares
of capital stock of the Registrant.
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ITEM 7(c). EXHIBITS
Exhibit No. Description
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2.1 Agreement and Plan of Merger, dated September 23, 1997,
by and among the Registrant, BMC West Corporation and
BMC West Merger Corporation
3.(i)1 Amended Certificate of Incorporation, filed with the
office of the Secretary of State of the State of
Delaware on September 23, 1997
3.(ii)1 By-laws of the Registrant
4.1 Rights Agreement, dated September 19, 1997, by and
between the Registrant and American Stock Transfer and
Trust Company
99.1 Press Release issued September 23, 1997
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated as of September 23, 1997.
BUILDING MATERIALS HOLDING CORPORATION
By: /s/ Ellis C. Goebel
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Ellis C. Goebel
Senior Vice President-Finance and Treasurer
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EXHIBIT INDEX
SEQUENTIALLY
NUMBERED
EXHIBIT NO. DOCUMENT PAGE
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2.1 Agreement and Plan of Merger, dated
September 23, 1997, by and among the
Registrant, BMC West Corporation and BMC
West Merger Corporation
3.(i)1 Amended Certificate of Incorporation, filed
with the office of the Secretary of State
of the State of Delaware on September 23, 1997
3.(ii)1 By-laws of the Registrant
4.1 Rights Agreement, dated September 19, 1997,
by and between the Registrant and American
Stock Transfer and Trust Company
Exhibit 99.1 Press Release issued September 23, 1997
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of September 23,
1997, by and among BMC West Corporation, a Delaware corporation ("Parent"),
Building Materials Holding Corporation, a Delaware corporation and a wholly
owned subsidiary of Parent ("Holdings"), and BMC West Merger Corporation, a
Delaware corporation and a wholly owned subsidiary of Holdings ("Merger
Subsidiary").
RECITALS
WHEREAS, the Board of Directors of Parent has determined it to be in the
best interests of Parent to effect a restructuring whereby Parent will become
the wholly owned subsidiary of a new holding company; and
WHEREAS, it is intended that the holding company structure be effected
without a vote of Parent's stockholders pursuant to and in accordance with
Section 251(g) of the Delaware General Corporation Law (the "DGCL"); and
WHEREAS, the Boards of Directors of Parent, Holdings and Merger Subsidiary,
and Holdings acting as the sole stockholder of Merger Subsidiary, have approved
the merger of Merger Subsidiary with and into Parent (the "Merger"); and
WHEREAS, for Federal income tax purposes, it is intended that the Merger
shall qualify as a reorganization under the provisions of Section 368(a) of the
Internal Revenue Code of 1986, as amended, and the rules and regulations
promulgated thereunder; and
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements contained in this Agreement, the parties hereto agree
as follows:
AGREEMENT
ARTICLE I
THE MERGER
SECTION 1.01. THE MERGER. (a) Upon the terms and subject to the conditions
set forth in this Agreement, and in accordance with Section 251(g) and other
applicable provisions of the DGCL, Merger Subsidiary shall be merged with and
into Parent at the Effective Time (as defined in Section 1.02). Following the
Effective Time, the separate corporate existence of Merger Subsidiary shall
cease and Parent shall continue as the surviving corporation as a wholly owned
subsidiary of Holdings (the "Surviving Corporation") and shall succeed to and
assume all the rights and obligations of Merger Subsidiary in accordance with
the DGCL.
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(b) At the Effective Time, by virtue of the Merger and without any action
on the part of Parent, Holdings, Merger Subsidiary or the holders of any
securities of Parent, Holdings or Merger Subsidiary, (i) each issued and
outstanding share of Parent's common stock, par value $0.001 per share ("Parent
Common Stock"), together with the associated Parent Right (as defined below),
shall be converted into one share of Holdings' common stock, par value $0.001
per share ("Holdings Common Stock), having the same designations, rights,
powers, preferences, qualifications, limitations and restrictions as the
converted share of Parent Common Stock,(ii) each issued and outstanding share of
Parent's preferred stock, par value $0.001 per share ("Parent Preferred Stock"),
shall be converted into one share of Holdings' preferred stock, par value $0.001
per share, having the same designations, rights, powers, preferences,
qualifications, limitations and restrictions as the converted share of Parent
Preferred Stock; and (iii) each issued and outstanding option to purchase shares
of Parent Common Stock (each a "Parent Stock Option") shall be converted into an
option to purchase the same number of shares of Holdings Common Stock on the
same terms and conditions as the converted Parent Stock Option. For purposes of
this Agreement, "Parent Right" means one preferred stock purchase right issued
to holders of Parent Common Stock pursuant to that certain Rights Agreement,
dated as of August 3, 1993, by and between Parent and American Stock Transfer
and Trust Company (the "Parent Rights Agreement").
SECTION 1.02. EFFECTIVE TIME. To effectuate the Merger, on a date on
which the parties agree, the parties shall file a certificate of merger or other
appropriate documents (in any such case, the "Certificate of Merger") executed
in accordance with the relevant provisions of the DGCL and shall make all other
filings or recordings required under the DGCL to effectuate fully the Merger.
The Merger shall become effective at such time as the Certificate of Merger is
duly filed with the Delaware Secretary of State, or at such other time as Parent
and Merger Subsidiary shall agree should be specified in the Certificate of
Merger (the time the Merger becomes effective being hereinafter referred to as
the "Effective Time").
SECTION 1.03. EFFECTS OF THE MERGER. The Merger shall have the effects
set forth in Section 259 of the DGCL.
SECTION 1.04. CERTIFICATE OF INCORPORATION AND BY-LAWS.
(a) Substantially concurrently with the filing of the Merger Certificate,
Parent and Holdings shall cause to be filed (i) the restated certificate of
incorporation of Parent in the form attached hereto as Exhibit A.1, which shall
be the certificate of incorporation of the Surviving Corporation until
thereafter changed or amended as provided therein or by applicable law, and
(ii) the restated certificate of incorporation of Holdings in the form attached
hereto as Exhibit A.2.
(b) The restated by-laws of Parent, in the form attached hereto as
Exhibit B.1, shall be the by-laws of the Surviving Corporation, and the restated
by-laws of Holdings, in the form attached hereto as Exhibit B.2, shall be the
by-laws of Holdings from and
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after the Effective Time, in each case until thereafter changed or amended as
provided therein or by applicable law.
SECTION 1.05. DIRECTORS. The directors of Parent immediately prior to the
Effective Time shall become the directors of the Surviving Corporation, until
the earlier of their resignation or removal or until their respective successors
are duly appointed or elected, as the case may be, in accordance with the
certificate of incorporation of the Surviving Corporation and applicable law.
SECTION 1.06. OFFICERS. The officers of Parent immediately prior to the
Effective Time shall be the officers of the Surviving Corporation, until the
earlier of their resignation or removal or until their respective successors are
duly appointed or elected and qualified, as the case may be, in accordance with
the certificate of incorporation of the Surviving Corporation and applicable
law.
ARTICLE II
CERTAIN COVENANTS
SECTION 2.01. TERMINATION OF EXISTING AND ADOPTION OF NEW RIGHTS PLAN.
Prior to the Effective Time, (a) Parent shall take all actions necessary to
terminate the Parent Rights Agreement and the Parent Rights at the Effective
Time; and (b) Holdings shall enter into a Rights Agreement with substantially
the same terms as the Parent Rights Agreement (the "Holdings Rights Agreement").
SECTION 2.02. ADOPTION OF STOCK OPTION PLANS. At the Effective Time,
Holdings shall adopt as its own stock option plans each of the stock option
plans of Parent in effect immediately prior to the Effective Time.
SECTION 2.03. ISSUANCE OF RIGHTS UNDER HOLDINGS RIGHTS AGREEMENT. As soon
as practicable after the date which is 10 days after the Effective Time,
Holdings shall cause to be issued the preferred stock purchase rights to holders
of Holdings Common Stock pursuant to the terms and conditions more fully set
forth in the Holdings Rights Agreement.
ARTICLE III
GENERAL PROVISIONS
SECTION 3.01. INTERPRETATION. When a reference is made in this Agreement
to an Article, Section, subsection, Exhibit or Schedule, such reference shall be
to an Article or Section, subsection of, or an Exhibit or Schedule to, this
Agreement unless otherwise indicated. Whenever the words "include", "includes"
and "including" are used in this Agreement, they shall be deemed to be followed
by the words "without limitation". The words "hereof", "herein" and "hereunder"
and words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of
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this Agreement. Headings of the Articles and Sections of this Agreement are for
the convenience of reference only, and shall be given no substantive or
interpretive effect whatsoever. All terms defined in this Agreement shall have
the defined meanings when used in any certificate or other document made or
delivered pursuant hereto unless otherwise defined therein. The definitions
contained in this Agreement are applicable to the singular as well as the plural
forms of such terms and to the masculine as well as to the feminine and neuter
genders of such term. The Exhibits attached hereto are hereby incorporated
herein and made a part hereof for all purposes, as if fully set forth herein.
SECTION 3.02. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties.
SECTION 3.03. NO THIRD-PARTY BENEFICIARIES. This Agreement (including the
documents and instruments referred to herein) is not intended to confer upon any
person other than the parties any rights or remedies.
SECTION 3.04. GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof.
SECTION 3.05. SEVERABILITY. Any term or provision of this Agreement which
is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of
this Agreement is so broad as to be unenforceable, the provision shall be
interpreted to be only so broad as is enforceable.
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IN WITNESS WHEREOF, Parent, Holdings and Merger Subsidiary have caused this
Agreement to be signed by their respective officers thereunto duly authorized,
all as of the date first written above.
BMC WEST CORPORATION
By:
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Name: Donald S. Hendrickson
Title: President and Chief Executive Officer
BUILDING MATERIALS HOLDING CORPORATION
By:
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Name: Robert E. Mellor
Title: President and Chief Executive Officer
BMC WEST MERGER CORPORATION
By:
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Name: Donald S. Hendrickson
Title: Sole Director
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EXHIBIT A.2
TO AGREEMENT AND
PLAN OF MERGER
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RESTATED
CERTIFICATE OF INCORPORATION
OF
BUILDING MATERIALS HOLDING CORPORATION
---------------------------------
Building Materials Holding Corporation, a corporation organized under the
laws of the State of Delaware, hereby certifies as follows:
1. The original certificate of incorporation of Building Materials Holding
Corporation was filed with the Secretary of State of Delaware on April 14, 1997.
2. This Restated Certificate of Incorporation amends and restates the
provisions of the Certificate of Incorporation of Building Materials Holding
Corporation and has been duly adopted pursuant to Sections 242 and 245 of
the General Corporation Law of the State of Delaware.
3. The text of the Certificate of Incorporation of Building Materials
Holding Corporation is hereby amended and restated to read in its entirety as
follows:
FIRST: The name of the corporation (hereinafter called the "Corporation")
is Building Materials Holding Corporation.
SECOND: The address, including street, number, city, and county, of
registered office of the Corporation in the State of Delaware is 1013 Centre
Road Street, in the City of Wilmington County of New Castle; and the name of
the registered agent of the Corporation in the State of Delaware at such
address is Prentice-Hall Corporation System, Inc.
THIRD: The purpose of the Corporation is to engage in any lawful or
activity for which corporations may be organized under the General Corporation
Law of the State of Delaware.
FOURTH: The total number of shares of capital stock which the Corporation
is authorized to issue is Twenty-Two Million. Two Million (2,000,000) shares
shall be Preferred Stock, each having a par value of one-tenth cent ($.001).
Twenty Million (20,000,000) shares shall be Common Stock, each having a par
value of one-tenth cent ($.001). The Preferred Stock may be issued from time to
time in one or more series. The Board of Directors is authorized, by filing a
certificate pursuant to the applicable law of the State of Delaware (a
"Preferred Stock Designation"), to establish from time to time the number of
shares to be included in each such series, and to fix the designation, powers,
preferences and rights of the shares of each such series
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and the qualifications, limitations or restrictions thereof, including but
not limited to the fixing or alteration of the dividend rights, dividend rate,
conversion rights, voting rights, rights and terms of redemption (including
sinking fund provisions), the redemption price or prices, and the liquidation
preferences of any wholly unissued series of Preferred Stock; and to increase or
decrease the number of shares of any series subsequent to the issue of shares of
that series, but not below the number of shares of such series then outstanding.
In case the number of shares of any series shall be so decreased, the shares
constituting such decrease shall resume the status which they had prior to the
adoption of the resolution originally fixing the number of shares of such
series.
No share or shares of any class or series of Preferred Stock acquired by
the corporation by reason of redemption, purchase, conversion or otherwise shall
be reissued as part of such class or series, and the Board of Directors is
authorized, pursuant to Section 243 of the Delaware General Corporation Law, to
retire any such share or shares. The retirement of any such share or shares
shall not reduce the total authorized number of shares of Preferred Stock.
The first series of Preferred Stock shall consist of Forty Thousand One
Hundred Fifty (40,150) shares designated Class A Senior Preferred Stock (the
"Class A Preferred Stock"). The second series of Preferred Stock shall consist
of Fifty Thousand (50,000) shares designated Class B Senior Preferred Stock (the
"Class B Preferred Stock"). The third series of Preferred Stock shall consist
of One Hundred Fifty Thousand (150,000) shares designated Class C Junior
Participating Cumulative Preferred Stock (the "Series C Preferred Stock").
The rights, preferences, privileges and restrictions granted to or imposed
upon the Common Stock and the Preferred Stock are as follows:
L. DIVIDENDS AND DISTRIBUTIONS.
(a) COMMON STOCK. No distribution (as defined below) shall be made
to the holders of Common Stock so long as any shares of Preferred Stock are
outstanding or any accrued dividends thereon remain unpaid. As used in
this Section 1(a), "distribution" means the transfer of cash, obligations
of the Corporation or property without consideration or at less than fair
market value (but in such event only to the extent of the shortfall),
whether by way of dividend or otherwise (except a dividend in shares of the
Corporation) or the purchase or redemption of shares of the Corporation for
cash, obligations of the Corporation or property, including any such
transfer, purchase or redemption by a subsidiary of the Corporation, but
excluding repurchase of shares of employees of the Corporation or of any
affiliate thereof upon termination of their employment with the Corporation
and all affiliates thereof or otherwise pursuant to agreements providing
for the right of said repurchase between the Corporation and such persons
at a price not higher than the original purchase price of such stock or the
then current book value.
(b) CLASS A PREFERRED STOCK. No dividends shall accrue or be payable
on the Class A Preferred Stock prior to January l, 1993. The holders of
any outstanding shares of Class A Preferred Stock shall be entitled to
receive, and there shall accrue and become
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payable, on December 31 in each calendar year commencing with 1993 in which
such shares are outstanding at June 30 of such year, an annual dividend in
an amount equal to $6.00 per share and no more, payable out of funds
legally available therefor, at the election of the Board of Directors,
either in cash or in shares of Class A Preferred Stock having an aggregate
liquidation preference equal to the amount of the dividend. Any dividend
on Class A Preferred Stock not paid (in a form permitted or required by
this paragraph(b)) shall cumulate, whether or not funds were legally
available therefor.
(c) CLASS B PREFERRED STOCK. No dividends will accrue or be payable
on the Class B Preferred Stock prior to December 31, 1993. If in any year
thereafter the Corporation for any reason does not redeem all or any
portion of the Class B Preferred Stock pursuant to Section 3(a)(iv), a
dividend shall accrue and be payable on the Series B Preferred Stock in
accordance with the terms of this paragraph 1(c). For purposes of
calculating the amount of the dividend payable on the Class B Preferred
Stock, if any, the Corporation shall maintain a record of the total number
of shares which it has not redeemed pursuant to Section 3(a)(iv) and which
it has not subsequently redeemed pursuant to Section 3(a)(i)(B)
(collectively the "Deferred Redemption Shares"). The dividend shall accrue
and be payable quarterly on May 2, August 2, November 2 and February 2 of
each year commencing on May 2, 1994 (each a "Dividend Date") out of funds
legally available therefor to the holder of record of the Class B Preferred
Stock on each such Dividend Date. The amount of the dividend per share, if
any, for a particular Dividend Date shall be equal to (x) the product of
(i) the number of Deferred Redemption Shares on such Dividend Date and
(ii) $3.75, divided by (y) the number of shares of Class B Preferred Stock
outstanding on such Dividend Date. Any dividends on Class B Preferred
Stock not paid (in a form permitted or required by this paragraph (c))
shall cumulate, whether or not funds were legally available therefor.
(d) (i) SERIES C PREFERRED STOCK. The holders of shares of Series C
Preferred Stock, in preference to the holders of shares of Common Stock and
of any other junior stock of the Corporation that may be outstanding, shall
be entitled to receive, when, as and if declared by the Board of Directors
out of funds legally available for the purpose, quarterly dividends payable
in cash on the tenth day of January, April, July and October in each year
(each such date being referred to herein as a "Quarterly Dividend Payment
Date"), commencing on the first Quarterly Dividend Payment Date after the
first issuance of a share or fraction of a share of Series C Preferred
Stock, in an amount per share (rounded to the nearest cent) equal to the
greater of (i) $.25 per share ($1.00 per annum), or (ii) subject to the
provision for adjustment hereinafter set forth, 100 times the aggregate per
share amount of all cash dividends, and 100 times the aggregate per share
amount (payable in kind) of all non-cash dividends or other distributions,
other than a dividend payable in shares of Common Stock or a subdivision or
combination or
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consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise), declared on the Common Stock since the
immediately preceding Quarterly Dividend Payment Date, or, with respect to
the first Quarterly Dividend Payment Date, since the first issuance of any
share or fraction of a share of Series C Preferred Stock. In the event
that the Corporation shall at any time declare or pay any dividend on
Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise) into a greater or lesser number of shares of
Common Stock, then and in each such event, the amount to which the holder
of each share of Series C Preferred Stock was entitled immediately prior to
such event under clause (ii) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction, the numerator of which is the number
of shares of Common Stock outstanding immediately after such event, and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(ii) The Corporation shall declare a dividend or distribution
on the Series C Preferred Stock as provided in paragraph (d)(i) of this
Section 1 contemporaneously with any declaration of a dividend or
distribution on the Common Stock (other than a dividend payable in shares
of Common Stock); provided, however, that in the event no dividend or
distribution shall have been declared on the Common Stock during the period
between any Quarterly Dividend Payment Date and the next subsequent
Quarterly Dividend Payment Date, a dividend of $.25 per share ($1.00 per
annum) on the Series C Preferred Stock shall nevertheless be payable on
such subsequent Quarterly Dividend Payment Date.
(iii) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series C Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares of Series C
Preferred Stock, unless the date of issue of such shares is prior to the
record date for the first Quarterly Dividend Payment Date, in which cash
dividends on such shares shall begin to accrue from the date of issue of
such shares, or unless the date of issue is a Quarterly Dividend Payment
Date or is a date after the record date for the determination of holders of
shares of Series C Preferred Stock entitled to receive a quarterly dividend
and before such Quarterly Dividend Payment Date, in either of which cases
such dividends shall begin to accrue and be cumulative from such Quarterly
Dividend Payment Date. Accrued but unpaid dividends shall cumulate but
shall not bear interest. Dividends paid on the shares of Series C
Preferred Stock in an amount less than the total amount of such dividends
at the time accrued and payable on such shares shall be allocated pro rata
on a share-by-share basis among all such shares at the time outstanding.
The Board of Directors may fix a record date for the determination of
holders of shares of Series C Preferred Stock entitled to receive payment
of a dividend or distribution declared thereon, which record date shall be
not more than 60 days prior to the date fixed for the payment thereof.
2. PREFERENCE ON LIQUIDATION.
(a) CLASS A AND CLASS B PREFERRED STOCK.
(i) LIQUIDATION AMOUNT. In the event of any liquidation,
dissolution or winding up of the Corporation, the holders of shares of
Class A Preferred Stock or Class B Preferred Stock then outstanding shall
be entitled to be paid out of the assets of the Corporation available for
distribution to its stockholders' whether from capital, surplus or
earnings, before any payment shall be made in respect of Common Stock the
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amount of One Hundred Dollars ($100) per share for each share of Class A
Preferred Stock or Class B Preferred Stock then held by them, plus all
accrued and unpaid dividends thereon to the date fixed for distribution.
After setting apart or paying in full the preferential amounts due the
holders of record of the issued and outstanding Class A Preferred Stock and
Class B Preferred Stock, the Corporation's remaining equity (whether stated
capital or surplus), if any, shall, subject to Section 2(b), be distributed
exclusively to the holders of record of the issued and outstanding Common
Stock. If upon liquidation, dissolution or winding up of the Corporation,
the assets of the Corporation available for distribution to its
stockholders shall be insufficient to pay the holders of the Preferred
Stock the full preferential amounts to which they shall be entitled, such
assets as are available shall be distributed (pro rata, if necessary) first
to the holders of Class A Preferred Stock, and any assets remaining after
payment in full of the preferential amount on the Class A Preferred Stock
shall be distributed pro rata to the holders of the Class B Preferred
Stock.
(ii) MERGER OR SALE OF ASSETS. The merger or consolidation of
the Corporation into or with another corporation, or the sale of all or
substantially all of the assets of the Corporation, shall not be deemed to
be a liquidation, dissolution or winding up of the Corporation as those
terms are used in paragraph (a); provided, however, that nothing in this
clause (ii) shall be interpreted to lessen any rights granted to holders of
Class A Preferred Stock and Class B Preferred Stock in Section 4(a)(ii)
hereof.
(b) SERIES C PREFERRED STOCK.
(i) LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any
liquidation, dissolution or winding up of the Corporation, no distribution
shall be made to:
(A) the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or
winding up) to the Series C Preferred Stock unless, prior
thereto, the holders of shares of Series C Preferred Stock shall
have received the greater of (1) $1.00 per share ($.01 per one
one-hundredth of a share), plus an amount equal to accrued and
unpaid dividends and distributions thereon, whether or not
declared, to the date of such payment, or (2) an aggregate amount
per share, subject to the provision for adjustment hereinafter
set forth, equal to 100 times the aggregate amount to be
distributed per share to holders of shares of Common Stock; or
(B) the holders of shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or
winding up) with the Series C Preferred Stock, except
distributions made ratably on the Series C Preferred Stock and
all other such parity stock in proportion to the total amounts to
which the holders of all such shares are entitled upon such
liquidation, dissolution or winding up.
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In the event that the Corporation shall at any time declare or pay any
dividend on Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of
Common Stock (by reclassification or otherwise) into a greater or lesser
number of shares of Common Stock, then and in each such event, the
aggregate amount to which the holder of each shares of Series C Preferred
Stock was entitled immediately prior to such event under the proviso in
clause (A) of the preceding sentence shall be adjusted by multiplying such
amount by a fraction, the numerator of which is the number of shares of
Common Stock outstanding immediately after such event, and the denominator
of which is the number of shares of Common Stock that were outstanding
immediately prior to such event.
(ii) RANK. Unless otherwise provided in this Certificate of
Incorporation or a Certificate of Designation relating to a subsequent
series of Preferred Stock, the Series C Preferred Stock shall rank junior
to all other series of Preferred Stock as to the payment of dividends and
the distribution of assets on liquidation, dissolution or winding up, and
senior to the Common Stock.
3. REDEMPTION.
(a) CLASS A AND CLASS B PREFERRED STOCK.
(i) REDEMPTION AT THE OPTION OF THE CORPORATION.
(A) Subject to the provisions of Section 3(a)(vi), the
Corporation may at any time it may lawfully do so, at the option
of the Board of Directors, redeem the Class A Preferred Stock or
Class B Preferred Stock in whole or in part by paying in cash
therefor One Hundred Dollars ($100) for each share of Class A
Preferred Stock or Class B Preferred Stock, as the case may be,
together with all accrued and unpaid dividends on each such share
(the "Preferred Stock Redemption Price"); and
(B) So long as any Deferred Redemption Shares (as
defined in Section 1(c) hereof) exist, the Corporation may, at
any time it may lawfully do so, at the option of the Board of
Directors, redeem any amount of Class B Preferred Stock not in
excess of the number of Deferred Redemption Shares calculated
immediately before such redemption at the Preferred Stock
Redemption Price. Any redemption of Class B Preferred Stock made
pursuant to this Section 3(a)(i)(B) need not comply with the
first sentence of Section 3(a)(vii). The Notice of Optional
Redemption required by Section 3(a)(vi) in respect of stock
redeemed pursuant to this Section 3(a)(i)(B) shall specifically
state the redemption is being made pursuant to this
Section 3(a)(i)(B).
(ii) MANDATORY REDEMPTION OF CLASS A PREFERRED STOCK IN 1993.
Between January 1, 1993 and May l, 1993 (both inclusive), the Corporation
shall redeem all of the outstanding Class A Preferred Stock, or so much of
the outstanding Class A
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Preferred Stock as may be legally redeemed by paying in cash therefor the
Preferred Stock Redemption Price plus interest, if any, accrued thereon (at
the rate announced by Bank of America NT & SA from time to time as its
Reference Rate) from January 31, 1993 through May l, 1993 (or, if sooner,
the payment date), subject to the following limitations:
(A) The redemption (including interest) shall be
required only to the extent, if any, that the corporation's
Stockholders Equity (as defined below) at December 3l, 1992 was
greater than the difference between (1) $l7,000,000 and (2) the
total dollar amount paid to redeem any Class A Preferred Stock
and Class B Preferred Stock on or prior to December 31, 1992
pursuant to Section 3(a)(i)(A); and
(B) The redemption shall be required only to the
extent, if any, it is permitted by the terms of the Acquisition
Financing Agreements (as defined below).
(iii) MANDATORY REDEMPTION OF CLASS A PREFERRED STOCK AFTER
1993. If all of the Class A Preferred Stock is not redeemed by May 1,
1993, then, between January l and May l (both inclusive) in each year
thereafter, the Corporation shall redeem Ten Thousand (10,000) shares (or
such lesser amount as is then outstanding) of Class A Preferred Stock or so
much thereof as may legally be redeemed, in cash at the Preferred Stock
Redemption Price plus interest, if any, accrued thereon (at the rate
announced by Bank of America NT & SA from time to time as its Reference
Rate) from January 31 through May l of the year of the redemption (or, if
sooner, the payment date), subject to the following limitations:
(A) The redemption (including interest) provided for
in this Section 3(a)(iii) for a particular year shall be required
only to the extent, if any, that the Corporation's Stockholders
Equity as of December 31 of the immediately preceding year shall
exceed the sum of (1) $12,000,000 and (2) the aggregate
liquidation preference of all Class A Preferred Stock and Class B
Preferred Stock outstanding on January l of such year less
$1,000,000 (or such lesser liquidation preference as applies to
all Class A Preferred Stock then outstanding); and
(B) The redemption shall be required only to the
extent, if any, it is permitted by the terms of the Acquisition
Financing Agreements.
(iv) MANDATORY REDEMPTION OF SERIES B PREFERRED STOCK. Between
January l and May 1 (both inclusive) of each year from 1994 to 1997
(inclusive), the Corporation shall redeem Ten Thousand (10,000) shares (or
such lesser amount as is then outstanding) of the Class B Preferred Stock,
or so much thereof as may legally be redeemed, in cash at the Preferred
Stock Redemption Price plus interest, if any, accrued thereon (at the rate
announced by Bank of America NT & SA from time to time as its Reference
Rate) from January 31 through May l of the year of the redemption (or, if
sooner, the payment date), subject to the following limitations:
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(A) The redemption (including interest) provided for
in this Section 3(a)(iv) for a particular year shall be required
only to the extent, if any, that the Corporation's Stockholders
Equity as of December 31 of the immediately preceding year shall
exceed the sum of (1) $15,000,000 and (2) the aggregate
liquidation preference of all Class A Preferred Stock and Class B
Preferred Stock outstanding on January l of such year less
$1,000,000 (or such lesser liquidation preference as applies to
all Class B Preferred Stock then outstanding);
(B) The redemption shall be required only to the
extent, if any, it is permitted by the terms of the Acquisition
Financing Agreements;
(C) No redemption shall be required if the ratio of
(1) the Corporation's EBIT for the preceding calendar
year to
(2) the Corporation's Senior Debt Service for the
preceding calendar year is below 150%; provided that, if
such ratio is greater than 150% but less than 200% and if
all of the other conditions to mandatory redemption set
forth in this Section 3(a)(iv) are satisfied, the
Corporation may by written notice given to the holder of
the Class B Preferred Stock on or before May 1 of such
year elect not to redeem all or any portion of the Class B
Preferred Stock then required to be redeemed pursuant to
this Section 3(a)(iv). The giving of such notice shall
create Deferred Redemption Shares as defined in
Section 1(c) and give rise to a dividend obligation in
respect of the Class B Preferred Stock which shall accrue
and be payable in accordance with Section 1(c); and
(D) The redemption shall be required only to the
extent, if any, it will not reduce
(1) the amount of funds available for borrowing under
the Corporation's revolving loan agreements, plus
(2) the cumulative amount of Business Expansion Debt
theretofore drawn under such revolving loan agreements,
minus
(3) the outstanding principal amount of the term loans
under the Acquisition Financing Agreements,
below $6,500,000.
(v) MANDATORY REDEMPTION OF ALL CLASS A AND CLASS B PREFERRED
STOCK. Notwithstanding anything to the contrary in this Section 2, on
December 31, 1997
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the Corporation shall redeem in cash, out of any funds legally available
therefor, all outstanding shares of Class A and Class B Preferred Stock at
the Preferred Stock Redemption Price.
(vi) NOTICE OF OPTIONAL REDEMPTION. Notice of any redemption
pursuant to Section 3 (a)(i) shall be given by certified or registered
mail, postage prepaid, to the holders of record of the Class A Preferred
Stock and/or Class B Preferred Stock to be redeemed at least 15 but no more
than 30 days prior to the proposed date for redemption, such notice to be
addressed to each such stockholder at the address of such holder given to
the Corporation for the purposes of notice, or if no such address appears
or is so given, at the place where the principal office of the Corporation
is located. Such notice shall state the date fixed for redemption, the
number of shares to be redeemed and the redemption price per share and
shall call upon such holder to surrender to the Corporation on said date at
the place designated in the notice such holder's certificate or
certificates representing the shares to be redeemed. On or after the date
fixed for redemption and stated in such notice, each holder of shares of
Class A Preferred Stock and/or Class B Preferred Stock notified of the
redemption shall surrender the certificate(s) evidencing such shares to the
Corporation at the place designated in such notice and shall thereupon be
entitled to receive payment of the redemption price. If less than all the
shares represented by any such surrendered certificate(s) are redeemed, a
new certificate shall be issued representing the unredeemed shares. If
such notice of redemption shall have been duly given, and if on the date
fixed for redemption funds necessary for the redemption shall be available
therefor, then, as to any certificates evidencing any Class A Preferred
Stock and Class B Preferred Stock so called for redemption and not
surrendered, all rights of the holders of such shares so called for
redemption and not surrendered shall cease with respect to such shares,
except only the right of the holders to receive the redemption price
without interest upon surrender of their certificates therefor.
(vii) PARTIAL REDEMPTION. In the case of the redemption of a
part only of the outstanding Class A or Preferred Stock or Class B
Preferred Stock under Section 3(a)(i)(A), the Corporation shall redeem the
Class A Preferred Stock and Class B Preferred Stock then outstanding on a
pro rata basis (rounded to the nearest whole share). If Class A Preferred
Stock or Class B Preferred Stock is held by more than one holder and less
than all the outstanding shares of such class are to be redeemed, the
amount to be redeemed shall be allocated (rounded to the nearest whole
share) among the holders of such class pro rata in accordance with the
amount held by each.
(b) NO REDEMPTION OF SERIES C PREFERRED STOCK. The shares of
Series C Preferred Stock shall not be redeemable. Notwithstanding the
foregoing, the Corporation may acquire shares of Series C Preferred Stock
in any other manner permitted by law or this Certificate of Incorporation.
Any shares of Series C Preferred Stock purchased or otherwise acquired by
the Corporation in any manner whatsoever shall be retired and cancelled
promptly after the acquisition thereof. All such shares shall upon their
cancellation become authorized but unissued shares of Preferred Stock,
without designation as to series, and may be reissued as part of any series
of Preferred Stock
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created by resolution or resolutions of the Board of Directors (including
Series C Preferred Stock), subject to the conditions and restrictions on
issuance set forth herein.
4. VOTING.
(a) CLASS A AND CLASS B PREFERRED STOCK. The holders of the Class A
Preferred Stock or Class B Preferred Stock shall not be entitled to vote
for directors of the Corporation or upon any matter submitted to a vote of
stockholders, except that:
(i) Any amendment of this Certificate of Incorporation or the
Bylaws of the Corporation which adversely affects the rights, preferences,
privileges and restrictions granted to or imposed upon the Class A
Preferred Stock or Class B Preferred Stock in a manner different than its
effect upon other capital stock of the Corporation, shall not be adopted
without the vote of the holder(s) of two-thirds of the Class A Preferred
Stock or Class B Preferred Stock affected by such amendment then
outstanding.
(ii) Any increase in the authorized number of shares of any
class or series of Preferred Stock or any authorization or designation of a
class or series of Preferred Stock on a parity with the Class B Preferred
Stock shall not be adopted without the vote of the holder(s) of two-thirds
of the Class B Preferred Stock then outstanding.
(iii) Any authorization or designation of any equity security
which is senior to the Class B Preferred Stock shall not be adopted without
the vote of the holder(s) of two-thirds of the Class B Preferred Stock then
outstanding.
(iv) In the event that for any reason the Corporation does not
redeem all or any portion of the Class B Preferred Stock pursuant to
Section 3(a)(iv), the holder(s) of Class B Preferred Stock, voting as a
separate class, shall have the right to elect two (2) members of the Board
of Directors, with such right commencing at the time of the failure to
redeem and remaining in effect until the date upon which the Corporation
has redeemed all Deferred Redemption Shares (as defined in Section 1(c)).
(v) Such holders shall have the right to vote to the extent
required by the Delaware General Corporation Law.
(b) SERIES C PREFERRED STOCK. The holders of shares of Series C
Preferred Stock shall have the following voting rights:
(i) Each share of Series C Preferred Stock shall entitle the
holder thereof to 100 votes (and each one one-hundredth of a share of
Series C Preferred Stock shall entitle the holder thereof to one vote) on
all matters submitted to a vote of the stockholders of the Corporation. In
the event that the Corporation shall at any time declare or pay any
dividend on Common Stock payable in shares of Common Stock or effect a
subdivision or combination or consolidation of the outstanding shares of
Common Stock (by reclassification or otherwise than by payment of a
dividend in shares of Common Stock) into a greater or lesser number of
shares of Common Stock, then and in each such event, the number of votes
per share to which holders of shares of Series C
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<PAGE>
Preferred Stock were entitled immediately prior to such event shall be
adjusted by multiplying such number by a fraction, the numerator of which
is the number of shares of Common Stock outstanding immediately after such
event, and the denominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event.
(ii) Except as otherwise provided in this Certificate of
Incorporation or herein or by law, the holders of shares of Series C
Preferred Stock and the holders of shares of Common Stock shall vote
together as one class on all matters submitted to a vote of the
stockholders of the Corporation.
(iii) In addition, the holders of shares of Series C Preferred
Stock shall have the following special voting rights:
(A) In the event that at any time dividends on
Series C Preferred Stock, whenever accrued and whether or not
consecutive, shall not have been paid or declared and a sum
sufficient for the payment thereof set aside, in an amount
equivalent to six quarterly dividends on all shares of Series C
Preferred Stock at the time outstanding, then and in each such
event, the holders of shares of Series C Preferred Stock and each
other series of Preferred Stock now or hereafter issued that
shall be accorded such class voting right by the Board of
Directors and that shall have the right to elect two directors as
the result of a prior or subsequent default in payment of
dividends on such series (each such other series being
hereinafter called "Other Series of Preferred Stock"), voting
separately as a class without regard to series, shall be entitled
to elect two directors at the next annual meeting or a special
meeting called for such purpose, in addition to the directors to
be elected by the holders of all shares of the Corporation
entitled to vote for the election of directors. The remainder of
the board shall be elected by the holders of all shares
(including the Series C Preferred Stock and each Other Series of
Preferred Stock) of the Corporation entitled to vote for the
election of directors; provided, however, that the Series C
Preferred Stock and each Other Series of Preferred Stock, voting
as a class, shall not have the right to elect more than one-third
of the directors pursuant to the provisions of this
subsection (b)(iii)(A). Such special voting right of the holders
of shares of Series C Preferred Stock may be exercised until all
dividends in default on the Series C Preferred Stock shall have
been paid in full or declared and funds sufficient therefor set
aside, and when so paid or provided for, such special voting
right of the holders of shares of Series C Preferred Stock shall
cease, but subject always to the same provisions for the vesting
of such special voting rights in the event of any such future
dividend default or defaults. The provisions of this
subsection (b)(iii)(A) shall be in addition to, and shall not
affect, any other rights that the holders of any Other Series of
Preferred Stock may hold with respect to the election of
directors. In the event that the provisions of this
subsection (b)(iii)(A) are
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<PAGE>
triggered, the authorized number of directors of the Corporation
shall be increased to such number as is necessary to effect the
voting rights set forth in this subsection (b)(iii)(A)
(B) At any time after such special voting rights shall
have so vested in the holders of shares of Series C Preferred
Stock, the Secretary of the Corporation may, and upon the written
request of the holders of record of 10% or more of the shares of
Series C Preferred Stock and each Other Series of Preferred Stock
then outstanding addressed to the Corporation shall, call a
special meeting of the holders of all shares of the Corporation
entitled to vote, for the election of directors to be elected as
herein provided, to be held within 60 days after such call and at
the place and upon the notice provided by law and in the Bylaws
for the holding of meetings of stockholders; provided, however,
that the Secretary shall not be required to call such special
meeting in the case of any such request received less than
90 days before the date fixed for any annual meeting of
stockholders, and if in such case such special meeting is not
called or held, the holders of shares of Series C Preferred Stock
so entitled to vote shall be entitled to exercise the special
voting rights provided in this paragraph at such annual meeting.
No such special meeting and no adjournment thereof shall be held
on a date later than 60 days before the annual meeting of
stockholders. If, at any meeting so called shares of Series C
Preferred Stock have the special voting rights provided for in
this paragraph, the holders of not less than 40% of the aggregate
voting power of Series C Preferred Stock and each Other Series of
Preferred Stock then outstanding are present in person or by
proxy, such percentage shall be sufficient to constitute a quorum
for the election of the two directors as herein provided.
(C) Upon the election at such meeting by the holders
of shares of Series C Preferred Stock and each Other Series of
Preferred Stock, voting as a class, of the directors they are
entitled so to elect, the persons so elected, together with such
persons as may be directors or as may have been elected as
directors by the holders of all shares (including Series C
Preferred Stock and each Other Series of Preferred Stock)
otherwise entitled to vote for directors, shall constitute the
duly elected directors of the Corporation. The directors so
elected by holders of shares of Series C Preferred Stock and each
Other Series of Preferred Stock, voting as a class, shall serve
until the next annual meeting or until their respective
successors shall be elected and qualified, or if any such
director is a member of a class of directors under provisions
dividing the directors into classes, each such director shall
serve until the annual meeting at which the term of office of
such director's class shall expire or until such director's
successor shall be elected and shall qualify, and at each
subsequent meeting of stockholders at which the directorship of
any director elected by the vote of holders of shares of Series C
Preferred
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<PAGE>
Stock and each Other Series of Preferred Stock under the special
voting rights set forth in this paragraph is up for election,
said special class voting rights shall apply in the reelection of
such director or in the election of such directors successor;
provided, however, that whenever the holders of shares of Series
C Preferred Stock and each Other Series of Preferred Stock shall
be divested of the special rights to elect two directors as above
provided, the terms of office of all persons elected as directors
by the holders of shares of Series C Preferred Stock and each
Other Series of Preferred Stock, voting as a class, shall
forthwith terminate, and two directors shall be elected by the
holders of all shares (including the Series C Preferred Stock and
each Other Series of Preferred Stock) to fill their positions.
(D) If, at any time after a special meeting of
stockholders or an annual meeting of stockholders at which the
holders of shares of Series C Preferred Stock and each Other
Series of Preferred Stock, voting as a class, have elected
directors as provided above, and while the holders of shares of
Series C Preferred Stock and each Other Series of Preferred Stock
shall be entitled so to elect two directors, the number of
directors who have been elected by the holders of shares of
Series C Preferred Stock and each Other Series of Preferred Stock
(or who by reason of one or more resignations, deaths or removals
have succeeded any directors so elected) shall by reasons of
resignation, death or removal be less than two but at least one,
the vacancy in the directors so elected by the holders of shares
of the Series C Preferred Stock and each Other Series of
Preferred Stock may be filled by the remaining director elected
by such holders. In the event that such election shall not occur
within 30 days after such vacancy arises, or in the event that
there shall not be incumbent one director so elected by such
holders, the Secretary of the Corporation may, and upon the
written request of the holders of record of 10% or more of the
shares of Series C Preferred Stock and each Other Series of
Preferred Stock then outstanding addressed to the Secretary at
the principal office of the Corporation shall, call a special
meeting of the holders of shares of Series C Preferred Stock and
each Other Series of Preferred Stock so entitled to vote, for an
election to fill such vacancy or vacancies, to be held within
60 days after such call and at the place and upon the notice
provided by law and in the Bylaws for the holding of meetings of
stockholders; provided, however, that the Secretary shall not be
required to call such special meeting of stockholders, and if in
such case such special meeting is not called, the holders of
shares of Series C Preferred Stock so entitled to vote shall be
entitled to fill such vacancy or vacancies at such annual
meeting. If any such special meeting required to be called as
above provided shall not be called by the Secretary within
30 days after receipt of any such request, the holders of record
of 10% or more of the shares of Series C Preferred Stock and each
Other Series of Preferred Stock then outstanding may designate in
writing one of their number to call such
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<PAGE>
meeting, and the person so designated may, at the expense of the
Corporation, call such meeting to be held at the place and upon
the notice above provided, and for that purpose shall have access
to the stock books of the Corporation; no such special meeting
and no adjournment thereof shall be held on a date later than
60 days before the annual meeting of stockholders.
(iv) Nothing herein shall prevent the directors or stockholders
from taking any action to increase the number of authorized shares of
Series C Preferred Stock, or increasing the number of authorized shares of
Preferred Stock of the same class as the Series C Preferred Stock or the
number of authorized shares of Common Stock, or changing the par value of
the Common Stock or Preferred Stock, or issuing options, warrants or rights
to any class of stock of the Corporation as authorized by this Certificate
of Incorporation, as it may hereafter be amended.
(v) Except as set forth herein, holders of shares of Series C
Preferred Stock shall have no special voting rights and their consent shall
not be required (except to the extent they are entitled to vote as set
forth in this Certificate of Incorporation or by law) for taking any
corporate action.
5. CONVERSION RIGHTS OF CLASS A PREFERRED STOCK.
(a) CONVERSION OF CLASS A PREFERRED STOCK. Upon or at any time after
the effective date of a registration statement for the initial offering of
the Corporation's Common Stock to the general public, each holder of
Class A Preferred Stock which was not redeemed on or before such effective
date may, upon surrender of the certificates therefor at the principal
office of the Corporation, convert any or all of such holder's Class A
Preferred Stock into a number of fully paid and non-assessable shares of
Common Stock of the Corporation equal to (x) $100 multiplied by the number
of shares of Class A Preferred Stock to be converted, divided by (y) the
price to the public in such offering, in case the Conversion Date (as
defined below) is such effective date, or, in the case of a later
Conversion Date, the closing price as publicly reported on the principal
established public market for the Common Stock on the Conversion Date (or,
if the Conversion Date is not a trading day, the last prior trading day)
or, if no such closing price was publicly reported for such day or last
trading day, the mean of the asked and bid prices publicly reported on the
principal established public market on such day or last trading day.
Notwithstanding anything in this Section 5, any conversion right shall be
suspended for the period when no conversion price can be determined
pursuant to the preceding sentence.
(b) PROCEDURE FOR CONVERSION. Before any holder of Class A Preferred
Stock shall be entitled to convert the same into shares of Common Stock he
shall surrender the certificate or certificates therefor, duly endorsed in
blank or accompanied by forms appropriate for transfer, at the principal
office of the Corporation and shall give written notice to the Corporation
at its principal office that he elects to convert the same and shall state
in writing therein the name or names in which he wishes a certificate or
certificates
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for shares of Common Stock to be issued. The Corporation shall, as soon as
practicable thereafter, issue and deliver at such office to such holder of
Class A Preferred Stock or to his nominee or nominees, certificates for the
number of full shares of Common Stock to which he shall be entitled. Upon
conversion, no fractional shares shall be issued and in lieu thereof the
Corporation shall pay in cash the fair market value of such fraction as
determined by the Board of Directors. Such conversion shall be deemed to
have been made immediately prior to the close of business on the date of
such surrender of the Class A Preferred Stock to be converted (such time
being herein called the "Conversion Date"), and the person or persons
entitled to receive the shares of Common Stock issuable upon conversion
shall be treated for all purposes as the record holder or holders of such
shares of Common Stock on the Conversion Date.
(c) MERGERS, CONSOLIDATIONS OR SALES OF ASSETS. (i) In the event of
a merger or consolidation of the Corporation with or into another
corporation, or the sale of all or substantially all of the Corporation's
properties and assets to any other person, then, as a part of such merger,
consolidation or sale, provision shall be made so that the holders of the
Class A Preferred Stock shall thereafter be entitled to receive upon
conversion thereof, when and as such conversion right arises, the number of
shares of stock or other securities or property of the Corporation, or of
the successor corporation resulting from such merger or consolidation or
sale to which a holder of Common Stock deliverable upon conversion would
have been entitled on such merger, consolidation, or sale. Nothing in this
Section 5(c) shall diminish the voting rights of the Class A Preferred
Stock or Class B Preferred Stock provided for in Section 4(a)(ii).
(d) NOTICE OF RECORD DATE. If, at any time after the Class A
Preferred Stock has become convertible under this Section 5, there is any
capital reorganization of the Corporation, any reclassification or
recapitalization of the capital stock of the Corporation or any transfer of
all or substantially all of the assets of the Corporation to any other
person, any consolidation or merger, or any voluntary or involuntary
dissolution, liquidation or winding up of the Corporation, the Corporation
shall mail to each holder of Class A Preferred Stock at least 30 days prior
to the record date specified therein, a notice specifying (1) the date on
which any such transaction is expected to become effective, and (2) the
time, if any, that is to be fixed, as to when the holders of record of
Common Stock (or other securities) shall be entitled to exchange their
shares of Common Stock (or other securities) for securities or other
property deliverable upon the consummation of such transaction. Nothing in
this Section 5(d) shall impair the voting rights of the Class A Preferred
Stock or Class B Preferred Stock provided in Section 4(a)(ii).
(e) RESERVATION OF STOCK ISSUABLE UPON CONVERSION. If the Class A
Preferred Stock becomes convertible under this Section 5, the Corporation
shall at all times reserve and keep available out of its authorized but
unissued shares of Common Stock, solely for the purpose of effecting the
conversion of the Class A Preferred Stock, such number of its shares of
Common Stock as shall from time to time be sufficient to effect the
conversion of all outstanding shares of Class A Preferred Stock; and if at
any time the number of authorized but unissued shares of Common Stock shall
not be sufficient to effect the conversion of all outstanding shares of
Class A Preferred Stock, the Corporation will take
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<PAGE>
such corporate action as may be necessary to increase its authorized but
unissued shares of Common Stock to such number of shares as shall be
sufficient for such purposes.
6. CERTAIN DEFINED TERMS.
As used in this Article FOURTH, the following terms have the meanings
indicated:
ACQUISITION FINANCING AGREEMENTS--the agreements and other instruments
by which the Corporation or any of its assets are bound and which were entered
into or created (i) at or before the closing of the Purchase Agreement in
connection with its borrowing of money for the payment of the "Purchase Price"
under the Purchase Agreement and for its working capital and other funding
needs, or (ii) in connection with any refinancing of the debt described in
clause (i) on terms not more burdensome on the Class A Preferred Stock or
Class B Preferred Stock, in the aggregate, than the terms applicable under
clause (i).
BUSINESS EXPANSION DEBT--any indebtedness incurred by the Corporation
or its subsidiaries in connection with the acquisition of one or more businesses
other than those financed by the Acquisition Financing Agreements, or to
increase the number of separate locations at which the Corporation conducts
material sales or production operations (other than any merely temporary
location or any location within 100 miles of another location being disposed of,
deactivated or put to another use at substantially the same time). For purposes
of allocating indebtedness between Business Expansion Debt and other kinds of
indebtedness, amounts borrowed on a term basis for such purposes shall be
considered as outstanding Business Expansion Debt in the amount borrowed less
any subsequent repayments of such term debt. In the case of term debt, part of
which was incurred for such purposes and part of which was incurred for other
purposes but which is otherwise homogeneous, repayments shall be allocated pro
rata with the aggregate amounts originally borrowed for such purposes and for
other purposes.
EBIT--for any year, the consolidated net earnings of the Corporation
and its subsidiaries before deduction of interest, original issue discount, debt
issuance expense amortization and income tax expense, all determined in
accordance with generally accepted accounting principles consistently applied,
as set forth on the Corporation's audited annual financial statements.
SENIOR DEBT SERVICE--for any year, the aggregate amount payable in
such year by the Corporation and its subsidiaries on a consolidated basis on
account of principal of and interest on obligations incurred for the borrowing
of money or the deferred purchase price (or capitalized leases) of any property
with an original term of more than one year, other than (in each case) Business
Expansion Debt.
STOCKHOLDERS EQUITY--at any date, the consolidated stockholders equity
(both Class A Preferred Stock and Class B Preferred Stock and Common Stock) of
the Corporation and its subsidiaries, all determined in accordance with
generally accepted accounting principles consistently applied, as set forth on
the Corporation's audited annual financial statements.
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<PAGE>
7. CERTAIN ADDITIONAL PROVISIONS OF SERIES C PREFERRED STOCK.
(a) CERTAIN RESTRICTIONS.
(i) Whenever any dividends or other distributions payable on
the Series C Preferred Stock as provided in Section 1 hereof are in
arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series C Preferred
Stock outstanding shall have been paid in full, the Corporation shall not,
directly or indirectly:
(A) declare or pay dividends on, or make any other
distributions with respect to, any shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or
winding up) to the Series C Preferred Stock;
(B) declare or pay dividends on, or make any other
distributions with respect to, any shares of stock ranking on a
parity (either as to dividends or upon liquidation, dissolution
or winding up) with the Series C Preferred Stock, except
dividends paid ratably on shares on the Series C Preferred Stock
and all such parity stock on which dividends are payable or in
arrears in proportion to the total amounts to which the holders
of all such shares are then entitled;
(C) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) with
the Series C Preferred Stock, provided that the Corporation may
at any time redeem, purchase or otherwise acquire shares of any
such junior stock in exchange for shares of any stock of the
Corporation ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Series C Preferred
Stock; or
(D) purchase or otherwise acquire for consideration
any shares of Series C Preferred Stock, or any shares of stock
ranking on a parity with the Series C Preferred Stock, except in
accordance with a purchase offer made in writing or by
publication (as determined by the Board of Directors) to all
holders of such shares upon such terms as the Board of Directors,
after consideration of the respective annual dividend rates and
other relative rights and preferences of the respective Series
and classes, shall determine in good faith will result in fair
and equitable treatment among the respective series or classes.
(ii) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration, directly or
indirectly, any shares of stock of the Corporation unless the Corporation
could, under paragraph (i) of this Section 7(a), purchase or otherwise
acquire such shares at such time and in such manner.
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(b) AMENDMENT. This Certificate of Incorporation shall not be
amended in any manner that would materially and adversely alter or change
the powers, preference or special rights of the Series C Preferred Stock
without the affirmative vote of the holders of at least two-thirds of he
outstanding shares of Series C Preferred Stock, voting together as a single
series.
(c) FRACTIONAL SHARES. Series C Preferred Stock may be issued in
fractions of a share (in one one-hundredths (1/100) of a share and integral
multiples thereof) that shall entitle the holder thereof, in proportion to
such holder's fractional shares, to exercise voting rights, receive
dividends, participate in distributions and have the benefit of all other
rights of holders of shares of Series C Preferred Stock.
FIFTH: The Corporation is to have perpetual existence.
SIXTH: Whenever a compromise or arrangement is proposed between this
Corporation and its creditors or any class of them and/or between this
Corporation and its stockholders or any class of them any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this Corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this Corporation under
the provisions of section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers appointed
for this Corporation under the provisions of section 279 of Title 8 of the
Delaware Code order a meeting of the creditors or class of creditors, and/or of
the stockholders or class of stockholders of this Corporation, as the case may
be, to be summoned in such manner as the said court directs. If a majority in
number representing three-fourths in value of the creditors or class of
creditors, and/or of the stockholders or class of stockholders of this
Corporation, as the case may be, agree to any compromise or arrangement and to
any reorganization of this Corporation as consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application has been made,
be binding on all the creditors or class of creditors, and/or on all the
stockholders or class of stockholders, of this Corporation, as the case may be,
and also on this Corporation.
SEVENTH: For the management of the business and for the conduct of the
affairs of the Corporation, and in further definition, limitation and regulation
of the powers of the Corporation and of its directors and of its stockholders or
any class thereof, as the case may be, it is further provided:
l. The management of the business and the conduct of the affairs of
the Corporation shall be vested in its Board of Directors. The number of
directors which shall constitute the whole Board of Directors shall be
fixed by, or in the manner provided in, the By-Laws. The phrase "whole
Board" and the phrase "total number of directors" shall be deemed to have
the same meaning, to wit, the total number of directors which the
Corporation would have if there were no vacancies. No election of
directors need be by written ballot.
2. After the original or other By-Laws of the Corporation have been
adopted, amended, or repealed, as the case may be, in accordance with the
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provisions of Section 109 of the General Corporation Law of the State of
Delaware, and, after the Corporation has received any payment for any of
its stock, the power to adopt, amend, or repeal the By-Laws of the
Corporation may be exercised by the Board of Directors of the Corporation;
provided however, that any provision for the classification of directors of
the Corporation for staggered terms pursuant to the provisions of
subsection (d) of Section 141 of the General Corporation Law of the State
of Delaware shall be set forth in an initial By-Law or in a By-Law adopted
by the stockholders entitled to vote of the Corporation unless provisions
for such classification shall be set forth in this Certificate of
Incorporation.
3. Whenever the Corporation shall be authorized to issue only one
class of stock, each outstanding share shall entitle the holder thereof to
notice of, and the right to vote at, any meeting of stockholders. Whenever
the Corporation shall be authorized to issue more than one class of stock,
no outstanding share of any class of stock which is denied voting power
under the provisions of the Certificate of Incorporation shall title the
holder thereof to the right to vote at any meeting of stockholders except
as the provisions of paragraph (2) of subsection (b) of section 242 of the
General Corporation Law of the State of Delaware shall otherwise require;
provided, that no share of any such class which is otherwise denied voting
power shall entitle the holder thereof to vote upon she increase or
decrease in the number of authorized shares of said class.
EIGHTH: The personal liability of the directors of the Corporation is
hereby eliminated to the fullest extent permitted by paragraph (7) of
subsection (b) of Section 102 of the General Corporation Law of the State of
Delaware, as the same may be amended and supplemented.
NINTH: Following registration of any of the classes of equity securities
of the Corporation pursuant to the provisions of the Securities Exchange Act of
1934, as amended, no action shall be taken by the stockholders of the
Corporation except at an annual or special meeting of stockholders called in
accordance with the Bylaws and no action shall be taken by the stockholders by
written consent.
TENTH: From time to time any of the provisions of this Certificate of
Incorporation may be amended, altered or repealed, and other provisions
authorized by the laws of the State of Delaware at the time in force may be
added or inserted in the manner and at the time prescribed by said laws, and all
rights at any time conferred upon the stockholders of the Corporation by this
Certificate of Incorporation are granted subject to the provisions of this
Article TENTH.
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IN WITNESS WHEREOF, Building Materials Holding Corporation has caused its
corporate seal to be affixed hereto and this restated certificate of
incorporation to be signed by its President and attested by its Secretary, on
this 23 day of September, 1997.
BUILDING MATERIALS HOLDING
CORPORATION
By:
------------------------------------------
Name: Robert E. Mellor
Title: President and Chief Executive Officer
(SEAL)
Attest:
- ------------------------------
Name: Paul S. Street
Title: Secretary
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EXHIBIT B.2
TO AGREEMENT AND
PLAN OF MERGER
----------------
AMENDED AND RESTATED
BYLAWS
OF
BUILDING MATERIALS HOLDING CORPORATION
(A DELAWARE CORPORATION)
<PAGE>
TABLE OF CONTENTS
PAGE(S)
-------
AMENDED AND RESTATED BYLAWS OF BMC HOLDINGS, INC.. . . . . . . . . . . . .1
ARTICLE I - OFFICES. . . . . . . . . . . . . . . . . . . . . . . . . . . .1
Section 1. Registered Office.. . . . . . . . . . . . . . . . . . . .1
Section 2. Other Offices.. . . . . . . . . . . . . . . . . . . . . .1
ARTICLE II - CORPORATE SEAL. . . . . . . . . . . . . . . . . . . . . . . .1
Section 3. Corporate Seal. . . . . . . . . . . . . . . . . . . . . .1
ARTICLE III - STOCKHOLDERS' MEETINGS . . . . . . . . . . . . . . . . . . .1
Section 4. Place of Meetings.. . . . . . . . . . . . . . . . . . . .1
Section 5. Annual Meeting. . . . . . . . . . . . . . . . . . . . . .2
Section 6. Special Meetings. . . . . . . . . . . . . . . . . . . . .3
Section 7. Notice of Meetings. . . . . . . . . . . . . . . . . . . .4
Section 8. Quorum. . . . . . . . . . . . . . . . . . . . . . . . . .4
Section 9. Adjournment and Notice of Adjourned Meetings. . . . . . .5
Section 10. Voting Rights. . . . . . . . . . . . . . . . . . . . . .5
Section 11. Beneficial Owners of Stock.. . . . . . . . . . . . . . .5
Section 12. List of Stockholders.. . . . . . . . . . . . . . . . . .6
Section 13. Action Without Meeting.. . . . . . . . . . . . . . . . .6
Section 14. Organization.. . . . . . . . . . . . . . . . . . . . . .7
ARTICLE IV - DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . . .7
Section 15. Number and Term of Office. . . . . . . . . . . . . . . .7
Section 16. Powers.. . . . . . . . . . . . . . . . . . . . . . . . .8
Section 17. Vacancies. . . . . . . . . . . . . . . . . . . . . . . .8
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Section 18. Resignation. . . . . . . . . . . . . . . . . . . . . . .8
Section 19. Removal. . . . . . . . . . . . . . . . . . . . . . . . .8
Section 20. Meetings.. . . . . . . . . . . . . . . . . . . . . . . .9
Section 21. Quorum and Voting. . . . . . . . . . . . . . . . . . . 10
Section 22. Action Without Meeting.. . . . . . . . . . . . . . . . 10
Section 23. Fees and Compensation. . . . . . . . . . . . . . . . . 10
Section 24. Committees.. . . . . . . . . . . . . . . . . . . . . . 10
Section 25. Organization.. . . . . . . . . . . . . . . . . . . . . 12
ARTICLE V - OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 26. Officers Designated. . . . . . . . . . . . . . . . . . 12
Section 27. Tenure and Duties of Officers. . . . . . . . . . . . . 12
Section 28. Delegation of Authority. . . . . . . . . . . . . . . . 13
Section 29. Resignations.. . . . . . . . . . . . . . . . . . . . . 14
Section 30. Removal. . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE VI - EXECUTION OF CORPORATE INSTRUMENTS AND
VOTING OF SECURITIES OWNED BY THE CORPORATION . . . . . . . . . . . 14
Section 31. Execution of Corporate Instruments.. . . . . . . . . . 14
Section 32. Voting of Securities Owned by the Corporation. . . . . 15
ARTICLE VII - SHARES OF STOCK. . . . . . . . . . . . . . . . . . . . . . 15
Section 33. Form and Execution of Certificates.. . . . . . . . . . 15
Section 34. Lost Certificates. . . . . . . . . . . . . . . . . . . 15
Section 35. Transfers. . . . . . . . . . . . . . . . . . . . . . . 16
Section 36. Fixing Record Dates. . . . . . . . . . . . . . . . . . 16
Section 37. Registered Stockholders. . . . . . . . . . . . . . . . 17
ARTICLE VIII - OTHER SECURITIES OF THE CORPORATION . . . . . . . . . . . 17
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Section 38. Execution of Other Securities. . . . . . . . . . . . . 17
ARTICLE IX - DIVIDENDS . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 39. Declaration of Dividends.. . . . . . . . . . . . . . . 18
Section 40. Dividend Reserve.. . . . . . . . . . . . . . . . . . . 18
ARTICLE X - FISCAL YEAR. . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 41. Fiscal Year. . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE XI - INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . 18
Section 42. Indemnification of Directors, Officers,
Employees and Other Agents.. . . . . . . . . . . . . . . . . . 18
ARTICLE XII - NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 43. Notices. . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE XIII - AMENDMENTS. . . . . . . . . . . . . . . . . . . . . . . . 23
Section 44. Amendments.. . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE XIV LOANS TO OFFICERS. . . . . . . . . . . . . . . . . . . . . . 23
Section 45. Loans to Officers. . . . . . . . . . . . . . . . . . . 23
iii
<PAGE>
AMENDED AND RESTATED
BYLAWS
OF
BUILDING MATERIALS HOLDING CORPORATION
(a Delaware corporation)
ARTICLE I - OFFICES
SECTION 1. REGISTERED OFFICE.
The registered office of the corporation shall be in the City of Dover,
County of Kent. (Del. Code Ann., tit. B, Section 131).
SECTION 2. OTHER OFFICES.
The corporation shall also have and maintain an office or principal place
of business in San Francisco, California at such place as may be fixed by the
Board of Directors, and may also have offices at such other places both within
and without the State of Delaware as the Board of Directors may from time to
time determine or the business of the corporation may require. (Del. Code Ann.
tit. 8, Section 122(S)).
ARTICLE II - CORPORATE SEAL
SECTION 3. CORPORATE SEAL.
The corporate seal shall consist of a die bearing the name of the
corporation and the inscription, "Corporate Seal-Delaware." Said seal may be
used by causing it or a facsimile thereof to be impressed or affixed or
reproduced or otherwise. (Del. Code Ann., tit. 8, Section 122(3)).
ARTICLE III - STOCKHOLDERS' MEETINGS
SECTION 4. PLACE OF MEETINGS.
Meetings of the stockholders of the corporation shall be held at such
place, either within or without the State of Delaware, as may be designated from
time to time by the Board of Directors, or, if not so designated, then at the
office of the corporation required to be maintained pursuant to Section 2
hereof. (Del. Code Ann., tit. 8, Section 211(a)).
<PAGE>
SECTION 5. ANNUAL MEETING.
(a) The annual meeting of the stockholders of the corporation, for the
purpose of election of Directors and for such other business as may lawfully
come before it, shall be held on such date and at such time as may be designated
from time to time by the Board of Directors. (Del. Code Ann. tit. 8, Section
211(b)).
(b) At an annual meeting of the stockholders, only such business shall be
conducted as shall have been properly brought before the meeting. To be
properly brought before an annual meeting, business must be: (A) specified in
the notice of meeting (or any supplement thereto) given by or at the direction
of the Board of Directors, (B) otherwise properly brought before the meeting by
or at the direction of the Board of Directors, or (C) otherwise properly brought
before the meeting by a stockholder. For business to be properly brought before
an annual meeting by a stockholder, the stockholder must have given timely
notice thereof in writing to the Secretary of the corporation. To be timely, a
stockholder's notice must be delivered to or mailed and received at the
principal executive offices of the corporation not less than one hundred twenty
(120) calendar days in advance of the date of the corporation's proxy statement
released to stockholders in connection with the previous year's annual meeting
of stockholders; provided, however, that in the event that no annual meeting was
held in the previous year or the date of the annual meeting has been changed by
more than thirty (30) days from the date contemplated at the time of the
previous year's proxy statement, notice by the stockholder to be timely must be
so received a reasonable time before the solicitation is made. A stockholder's
notice to the Secretary shall set forth as to each matter the stockholder
proposes to bring before the annual meeting: (i) a brief description of the
business desired to be brought before the annual meeting and the reasons for
conducting such business at the annual meeting, (ii) the name and address, as
they appear on the corporation's books, of the stockholder proposing such
business, (iii) the class and number of shares of the corporation which are
beneficially owned by the stockholder, (iv) any material interest of the
stockholder in such business and (v) any other information that is required to
be provided by the stockholder pursuant to Regulation 14A under the Securities
Exchange Act of 1934, as amended, in his capacity as a proponent to a
stockholder proposal. Notwithstanding the foregoing, in order to include
information with respect to a stockholder proposal in the proxy statement and
form of proxy for a stockholder's meeting, stockholders must provide notice as
required by the regulations promulgated under the Securities and Exchange Act of
1934, as amended. Notwithstanding anything in these Bylaws to the contrary, no
business shall be conducted at any annual meeting except in accordance with the
procedures set forth in this paragraph (b). The chairman of the annual meeting
shall, if the facts warrant, determine and declare at the meeting that business
was not properly brought before the meeting and in accordance with the
provisions of this paragraph (b), and, if he should so determine, he shall so
declare at the meeting that any such business not properly brought before the
meeting shall not be transacted. (Del. Code Ann., tit. 8, Section 211(b)).
(c) Only persons who are nominated in accordance with the procedures set
forth in this paragraph (c) shall be eligible for election as Directors.
Nominations of persons for election to the Board of Directors of the corporation
may be made at a meeting of stockholders by or at the direction of the Board of
Directors or by any stockholder of the corporation entitled to vote in
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<PAGE>
the election of Directors at the meeting who complies with the notice procedures
set forth in this paragraph (c). Such nominations, other than those made by or
at the direction of the Board of Directors, shall be made pursuant to timely
notice in writing to the Secretary of the corporation in accordance with the
provisions of paragraph (b) of this Section 5. Such stockholder's notice shall
set forth (i) as to each person, if any, whom the stockholder proposes to
nominate for election or re-election as a Director: (A) the name, age, business
address and residence address of such person, (B) the principal occupation or
employment of such person, (C) the class and number of shares of the corporation
which are beneficially owned by such person, (D) a description of all
arrangements or understandings between the stockholder and each nominee and any
other person or persons (naming such person or persons) pursuant to which the
nominations are to be made by the stockholder, and (E) any other information
relating to such person that is required to be disclosed in solicitations of
proxies for election of Directors, or is otherwise required, in each case
pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended
(including without limitation such person's written consent to being named in
the proxy statement, if any, as a nominee and to serving as a Director if
elected); and (ii) as to such stockholder giving notice, the information
required to be provided pursuant to paragraph (b) of this Section 5. At the
request of the Board of Directors, any person nominated by a stockholder for
election as a Director shall furnish to the Secretary of the corporation that
information required to be set forth in the stockholder's notice of nomination
which pertains to the nominee. No person shall be eligible for election as a
Director of the corporation unless nominated in accordance with the procedures
set forth in this paragraph (c). The chairman of the meeting shall, if the
facts warrant, determine and declare at the meeting that a nomination was not
made in accordance with the procedures prescribed by these Bylaws, and if he
should so determine, he shall so declare at the meeting and the defective
nomination shall be disregarded. (Del. Code Ann., tit. 8, Sections 212, 214).
SECTION 6. SPECIAL MEETINGS.
(a) Special meetings of the stockholders of the corporation may be called,
for any purpose or purposes, by (i) the Chairman of the Board, (ii) the
president, (iii) the Board of Directors pursuant to a resolution adopted by a
majority of the total number of authorized directors (whether or not there exist
any vacancies in previously authorized directorships at the time any such
resolution is presented to the Board for adoption) or (iv) by the holders of
shares entitled to cast not less than ten percent (10%) of the votes at the
meeting, and shall be held at such place, on such date, and at such time as they
or he shall fix; provided however, that following registration of any of the
classes of equity securities of the corporation pursuant to the provisions of
the Securities Exchange Act of 1934, as amended special meetings of the
stockholders may only be called by the Board of Directors pursuant to a
resolution adopted by a majority of the total number of authorized Directors.
(b) If a special meeting is called by any person or persons other than the
Board of Directors, the request shall be in writing, specifying the time of such
meeting and the general nature of the business proposed to be transacted, and
shall be delivered personally or sent by registered mail or by telegraphic or
other facsimile transmission to the Chairman of the Board, the President, or the
Secretary of the corporation. No business may be transacted at such special
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<PAGE>
meeting otherwise than specified in such notice. The officer receiving the
request shall cause notice to be promptly given to the stockholders entitled to
vote, in accordance with the provisions of Section 7 of these Bylaws, that a
meeting will be held not less than thirty-five (35) nor more than sixty (60)
days after the receipt of the request. If the notice is not given within twenty
(20) days after the receipt of the request, the person or persons requesting the
meeting may give the notice. Nothing contained in this paragraph (b) shall be
construed as limiting, fixing, or affecting the time when a meeting of
stockholders called by action of the Board of Directors may be held.
SECTION 7. NOTICE OF MEETINGS.
Except as otherwise provided by law or the Certificate of Incorporation,
written notice of each meeting of stockholders shall be given not less than ten
(10) nor more than sixty (60) days before the date of the meeting to each
stockholder entitled to vote at such meeting, such notice to specify the place,
date and hour and purpose or purposes of the meeting. Notice of the time, place
and purpose of any meeting of stockholders may be waived in writing, signed by
the person entitled to notice thereof, either before or after such meeting, and
will be waived by any stockholder by his attendance thereat in person or by
proxy, except when the stockholder attends a meeting for the express purpose of
objecting, at the beginning of the meeting, to the transaction of any business
because the meeting is not lawfully called or convened. Any stockholder so
waiving notice of such meeting shall be bound by the proceedings of any such
meeting in all respects as if due notice thereof had been given. (Del. Code
Ann., tit. 8, Sections 222, 229).
SECTION 8. QUORUM.
At all meetings of stockholders, except where otherwise provided by statute
or by the Certificate of Incorporation, or by these Bylaws, the presence, in
person or by proxy duly authorized of the holders of a majority of the
outstanding shares of stock entitled to vote shall constitute a quorum for the
transaction of business. Any shares, the voting of which at said meeting has
been enjoined, or which for any reason cannot be lawfully voted at such meeting,
shall not be counted to determine a quorum at such meeting. In the absence of a
quorum any meeting of stockholders may be adjourned, from time to time, either
by the chairman of the meeting or by vote of the holders of a majority of the
shares represented thereat, but no other business shall be transacted at such
meeting. The stockholders present at a duly called or convened meeting, at
which a quorum is present, may continue to transact business until adjournment,
notwithstanding the withdrawal of enough stockholders to leave less than a
quorum. Except as otherwise provided by law, the Certificate of Incorporation
or these Bylaws, all action taken by the holders of a majority of the voting
power represented at any meeting at which a quorum is present shall be valid and
binding upon the corporation; provided, however, that Directors shall be elected
by a plurality of the votes of the shares present in person or represented by
proxy at the meeting and entitled to vote on the election of Directors. Where a
separate vote by a class or classes is required, a majority of the outstanding
shares of such class or classes, present in person or represented by proxy,
shall constitute a quorum entitled to take action with respect to that vote on
that matter and the affirmative vote of the majority (plurality,
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in the case of the election of Directors) of shares of such class or classes
present in person or represented by proxy at the meeting shall be the act of
such class. (Del. Code Ann., tit. 8, Section 216).
SECTION 9. ADJOURNMENT AND NOTICE OF ADJOURNED MEETINGS.
Any meeting of stockholders, whether annual or special, may be adjourned
from time to time either by the chairman of the meeting or by the vote of a
majority of the shares represented thereat. When a meeting is adjourned to
another time or place, notice need not be given of the 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 which
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. (Del. Code
Ann., tit. 8, Section 222(c)).
SECTION 10. VOTING RIGHTS.
For the purpose of determining those stockholders entitled to vote at any
meeting of the stockholders, except as otherwise provided by law, only persons
in whose names shares stand on the stock records of the corporation on the
record date, as provided in Section 12 of these Bylaws, shall be entitled to
vote at any meeting of stockholders. Except as may be otherwise provided in the
Certificate of Incorporation or these Bylaws, each stockholder shall be entitled
to one vote for each share of capital stock held by such stockholder. Every
person entitled to vote or execute consents shall have the right to do so either
in person or by an agent or agents authorized by a written proxy executed by
such person or his duly authorized agent, which proxy shall be filed with the
Secretary at or before the meeting at which it is to be used. An agent so
appointed need not be a stockholder. No proxy shall be voted after three (3)
years from its date of creation unless the proxy provides for a longer period.
All elections of Directors shall be by written ballot unless otherwise provided
in the Certificate of Incorporation. (Del. Code Ann., tit. 8, Sections 211(e),
212(b)).
SECTION 11. BENEFICIAL OWNERS OF STOCK.
(a) If shares or other securities having voting power stand of record in
the names of two (2) or more persons, whether fiduciaries, members of a
partnership, joint tenants, tenants in common tenants by the entirety, or
otherwise, or if two (2) or more persons have the same fiduciary relationship
respecting the same shares, unless the Secretary is given written notice to the
contrary and is furnished with a copy of the instrument or order appointing them
or creating the relationship wherein it is so provided, their acts with respect
to voting shall have the following effect: (a) if only one (l) votes, his act
binds all; (b) if more than one (1) votes, the act of the majority so voting
binds all; (c) if more than one (l) votes, but the vote is evenly split on any
particular matter, each faction may vote the securities in question
proportionally, or may apply to the Delaware Court of Chancery for relief as
provided in the General Corporation Law of Delaware, Section 217 (b). If the
instrument filed with the Secretary shows that any such tenancy is held in
unequal interests, a majority or even-split for the purpose of this subsection
(c) shall be a majority or even-split in interest. (Del. Code Ann., tit. 8,
Section 217(b)).
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(b) Persons holding stock in a fiduciary capacity shall be entitled to
vote the shares so held. Persons whose stock is pledged shall be entitled to
vote, unless in the transfer by the pledgor on the books of the corporation he
has expressly empowered the pledgee to vote thereon, in which case only the
pledgee, or his proxy, may represent such stock and vote thereon. (Del. Code
Ann., tit. 8, Section 217(a)).
SECTION 12. LIST OF STOCKHOLDERS.
The Secretary shall prepare and make, at least ten (10) days before every
meeting of stockholders, a complete list of the stockholders entitled to vote at
said meeting, arranged in alphabetical order, 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 specified, at the place where the meeting is to be held.
The list shall be produced and kept at the time and place of meeting during the
whole time thereof, and may be inspected by any stockholder who is present.
(Del. Code Ann., tit. 8, Section 219(a)).
SECTION 13. ACTION WITHOUT MEETING.
(a) Any action required by statute to be taken at any annual or special
meeting of the stockholders, or any action which may be taken at any annual or
special meeting of the stockholders, may be taken without a meeting, without
prior notice and without a vote, if a consent or consents in writing, setting
forth the action so taken, are 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.
(b) Every written consent shall bear the date of signature of each
stockholder who signs the consent, and no written consent shall be effective to
take the corporate action referred to therein unless, within sixty (60) days of
the earliest dated consent delivered to the Corporation in the manner herein
required, written consents signed by a sufficient number of stockholders to take
action are delivered to the corporation by delivery to its registered office in
the State of Delaware, its principal place of business or an officer or agent of
the corporation having custody of the book in which proceedings of meetings of
stockholders are recorded. Delivery made to a corporation's registered office
shall be by hand or by certified or registered mail, return receipt requested.
(Del. Code Ann., tit. 8, Section 228).
(c) Prompt notice of the taking of the corporate action without a meeting
by less than unanimous written consent shall be given to those stockholders who
have not consented in writing. If the action which is consented to is such as
would have required the filing of a certificate under any section of the General
Corporation Law of Delaware if such action had been voted on by stockholders at
a meeting thereof, then the certificate filed under such section shall state, in
lieu of any statement required by such section concerning any vote of
stockholders, that
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written notice and written consent have been given as provided in Section 228 of
the General Corporation Law of Delaware.
(d) Notwithstanding the foregoing, if so provided in the Certificate of
Incorporation of the corporation, no such action by written consent may be taken
following the effectiveness of the registration of any class of securities of
the corporation under the Securities Exchange Act of 1934, as amended.
SECTION 14. ORGANIZATION.
(a) At every meeting of stockholders, the Chairman of the Board of
Directors, or, if a Chairman has not been appointed or is absent, the president,
or in the absence of any such officer, a chairman of the meeting chosen by a
majority in interest of the stockholders entitled to vote, present in person or
by proxy, shall act as chairman. The Secretary, or, in his absence, an
Assistant Secretary directed to do so by the president, shall act as secretary
of the meeting.
(b) The Board of Directors of the corporation shall be entitled to make
such rules or regulations for the conduct of meetings of stockholders as it
shall deem necessary, appropriate or convenient. Subject to such rules and
regulations of the Board of Directors, if any, the chairman of the meeting shall
have the right and authority to prescribe such rules, regulations and procedures
and to do all such acts as, in the judgment of such chairman, are necessary,
appropriate or convenient for the proper conduct of the meeting, including,
without limitation, establishing an agenda or order of business for the meeting,
rules and procedures for maintaining order at the meeting and the safety of
those present, limitations on participation in such meeting to stockholders of
record of the corporation and their duly authorized and constituted proxies, and
such other persons as the chairman shall permit, restrictions on entry to the
meeting after the time fixed for the commencement thereof, limitations on the
time allotted to questions or comments by participants and regulation of the
opening and closing of the polls for balloting on matters which are to be voted
on by ballot. Unless, and to the extent determined by the Board of Directors or
the chairman of the meeting, meetings of stockholders shall not be required to
be held in accordance with rules of parliamentary procedure.
ARTICLE IV - DIRECTORS
SECTION 15. NUMBER AND TERM OF OFFICE.
The number of Directors which shall constitute the whole of the Board of
Directors shall be from five (5) to nine (9) persons with the exact number to be
determined from time to time by the Board of Directors. The maximum and minimum
number of authorized Directors may be modified from time to time by amendment of
this Section 15 in accordance with the provisions of Section 44 hereof. Except
as provided in Section 17, the Directors shall be elected by the stockholders at
their annual meeting in each year and shall hold office until the next annual
meeting and until their successors shall be duly elected and qualified.
Directors need not be stockholders unless so required by the Certificate of
Incorporation. If for any cause, the Directors shall not have been elected at
an annual meeting, they may be elected as soon thereafter as convenient at a
special meeting of the stockholders called for that purpose in the manner
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provided in these Bylaws. No reduction of the authorized number of Directors
shall have the effect of removing any Director before the Director's term of
office expires unless such removal is made pursuant to the provisions of Section
19 hereof. (Del. Code Ann., tit. 8, Sections 141(b), 211(b), (c)).
SECTION 16. POWERS.
The powers of the corporation shall be exercised, its business conducted
and its property controlled by the Board of Directors, except as may be
otherwise provided by statute or by the Certificate of Incorporation (Del. Code
Ann., tit. 8, Section 141(a)).
SECTION 17. VACANCIES.
Unless otherwise provided in the Certificate of Incorporation, vacancies
and newly created directorships resulting from any increase in the authorized
number of Directors may be filled by a majority of the Directors then in office,
although less than a quorum, or by a sole remaining Director, and each Director
so elected shall hold office for the unexpired portion of the term of the
Director whose place shall be vacant and until his successor shall have been
duly elected and qualified. A vacancy in the Board of Directors shall be deemed
to exist under this Section 17 in the case of the death, removal or resignation
of any Director, or if the stockholders fail at any meeting of stockholders at
which Directors are to be elected (including any meeting referred to in Section
19 below) to elect the number of Directors then constituting the whole Board of
Directors. (Del. Code Ann., tit. 8, Section 223(a), (b)).
SECTION 18. RESIGNATION.
Any Director may resign at any time by delivering his written resignation
to the Secretary, such resignation to specify whether it will be effective at a
particular time, upon receipt by the Secretary or at the pleasure of the Board
of Directors. If no such specification is made, it shall be deemed effective at
the pleasure of the Board of Directors. When one or more Directors shall resign
from the Board of Directors, effective at a future date, a majority of the
Directors then in office, including those who have so resigned, shall have power
to fill such vacancy or vacancies, the vote thereon to take effect when such
resignation or resignations shall become effective, and each Director so chosen
shall hold office for the unexpired portion of the term of the Director whose
place shall be vacated and until his successor shall have been duly elected and
qualified. (Del. Code Ann., tit. 8, Sections 141(b), 223(d)).
SECTION 19. REMOVAL.
At a special meeting of stockholders called for the purpose in the manner
hereinabove provided, subject to any limitations imposed by law or the
Certificate of Incorporation, the Board of Directors, or any individual
Director, may be removed from office, with or without cause and a new Director
or Directors elected by a vote of stockholders holding a majority of the
outstanding shares entitled to vote at an election of Directors. (Del. Code
Ann., tit. 8, Section 141(k)).
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SECTION 20. MEETINGS.
(a) ANNUAL MEETINGS. The annual meeting of the Board of Directors shall
be held immediately after the annual meeting of stockholders and at the place
where such meeting is held. No notice of an annual meeting of the Board of
Directors shall be necessary and such meeting shall be held for the purpose of
electing officers and transacting such other business as may lawfully come
before it.
(b) REGULAR MEETINGS. Except as herein after otherwise provided, regular
meetings of the Board of Directors shall be held in the office of the
corporation required to be maintained pursuant to Section 2 hereof. Unless
otherwise restricted by the Certificate of Incorporation, regular meetings of
the Board of Directors may also be held at any place within or without the State
of Delaware which has been determined by the Board of Directors. (Del. Code
Ann., tit. 8, Section 141(g)).
(c) SPECIAL MEETINGS. Unless otherwise restricted by the Certificate of
Incorporation, special meetings of the Board of Directors may be held at any
time and place within or without the State of Delaware whenever called by the
Chairman, president or a majority of the Directors. (Del. Code Ann., tit. 8,
Section 141(g)).
(d) TELEPHONE MEETINGS. Any member of the Board of Directors, or of any
committee thereof, may participate in a meeting by means of conference telephone
or similar communications equipment by means of which all persons participating
in the meeting can hear each other, and participation in a meeting by such means
shall constitute presence in person at such meeting. (Del. Code Ann., tit. 8,
Section 141(i)).
(e) NOTICE OF MEETINGS. Written notice of the time and place of all
special meetings of the Board of Directors shall be given at least one (1) day
before the date of the meeting. Notice of any meeting may be waived in writing
at any time before or after the meeting and will be waived by any Director by
attendance thereat, except when the Director attends the meeting for the express
purpose of objecting, at the beginning of the meeting, to the transaction of any
business because the meeting is not lawfully called or convened. (Del. Code
Ann., tit. 8, Section 229).
(f) WAIVER OF NOTICE. The transaction of all business at any meeting of
the Board of Directors, or any committee thereof however called or noticed, or
wherever held, shall be as valid as though had at a meeting duly held after
regular call and notice, if a quorum be present and if, either before or after
the meeting, each of the Directors not present shall sign a written waiver of
notice, or a consent to holding such meeting, or an approval of the minutes
thereof. Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the Board of Directors need be specified in any
written waiver of notice or consent unless so required by the Certificate of
Incorporation or these Bylaws. All such waivers, consents or approvals shall be
filed with the corporate records or made a part of the minutes of the meeting.
(Del. Code Ann., tit. 8, Section 229).
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SECTION 21. QUORUM AND VOTING.
(a) Unless the Certificate of Incorporation requires a greater number and
except with respect to indemnification questions arising under Section 42
hereof, for which a quorum shall be one-third of the exact number of Directors
fixed from time to time in accordance with Section 15 hereof, but not less than
one (1), a quorum of the Board of Directors shall consist of a majority of the
exact number of Directors fixed from time to time in accordance with Section 15
of these Bylaws, but not less than one (1); provided, however, at any meeting
whether a quorum be present or otherwise, a majority of the Directors present
may adjourn from time to time until the time fixed for the next regular meeting
of the Board of Directors, without notice other than by announcement at the
meeting. (Del. Code Ann., tit. 8, Section 141(b)).
(b) At each meeting of the Board of Directors at which a quorum is present
all questions and business shall be determined by a vote of a majority of the
Directors present, unless a different vote be required by law, the Certificate
of Incorporation or these Bylaws. (Del. Code Ann., tit. 8, Section 141(b)).
SECTION 22. ACTION WITHOUT MEETING.
Unless otherwise restricted by the Certificate of Incorporation or these
Bylaws, any action required or permitted to be taken at any meeting of the Board
of Directors or of any committee thereof may be taken without a meeting, if all
members of the Board of Directors or committee, as the case may be, consent
thereto in writing, and such writing or writings are filed with the minutes of
proceedings of the Board of Directors or committee. (Del. Code Ann., tit. 8,
Section 141(f)).
SECTION 23. FEES AND COMPENSATION.
Directors shall be entitled to such compensation for their services as may
be approved by the Board of Directors including, if so approved, by resolution
of the Board of Directors, a fixed sum and expenses of attendance, if any, for
attendance at each regular or special meeting of the Board of Directors and at
any meeting of a committee of the Board of Directors. Nothing herein contained
shall be construed to preclude any Director from serving the corporation in any
other capacity as an officer, agent, employee, or otherwise and receiving
compensation therefor. (Del. Code Ann., tit. 8, Section 141(h)).
SECTION 24. COMMITTEES.
(a) Executive Committee. The Board of Directors may by resolution passed
by a majority of the whole Board of Directors, appoint an Executive Committee to
consist of one (l) or more members of the Board of Directors. The Executive
Committee, to the extent permitted by law and specifically granted by the Board
of Directors, shall have and may exercise when the Board of Directors is not in
session all powers of the Board of Directors in the management of the business
and affairs of the corporation, including, without limitation, the power and
authority to declare a dividend or to authorize the issuance of stock, except
such committee shall not have the power or authority to amend the Certificate of
Incorporation, to adopt an agreement of
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merger or consolidation, to recommend to the stockholders the sale, lease or
exchange of all or substantially all of the corporation's property and assets,
to recommend to the stockholders of the corporation a dissolution of the
corporation or a revocation of a dissolution or to amend these Bylaws. (Del.
Code Ann., tit. 8, Section 141(c)).
(b) OTHER COMMITTEES. The Board of Directors may, by resolution passed by
a majority of the whole Board of Directors, from time to time appoint such other
committees as may be permitted by law. Such other committees appointed by the
Board of Directors shall consist of one (l) or more members of the Board of
Directors, and shall have such powers and perform such duties as may be
prescribed by the resolution or resolutions creating such committees, but in no
event shall such committee have the powers denied to the Executive Committee in
these Bylaws. (Del. Code Ann., tit. 8, Section 141(c)).
(c) TERM. The members of all committees of the Board of Directors shall
serve a term coexistent with that of the Board of Directors which shall have
appointed such committee. The Board of Directors, subject to the provisions of
subsections (a) or (b) of this Section 24, may at any time increase or decrease
the number of members of a committee or terminate the existence of a committee.
The membership of a committee member shall terminate on the date of his death or
voluntary resignation from the committee or from the Board of Directors. The
Board of Directors may at any time for any reason remove any individual
committee member and the Board of Directors may fill any committee vacancy
created by death, resignation, removal or increase in the number of members of
the committee. The Board of Directors may designate one or more Directors as
alternate members of any committee, who may replace any absent or disqualified
member at any meeting of the committee, and, in addition, in the absence or
disqualification of any member of a committee, the member or members thereof
present at any 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 any such absent or disqualified
member. (Del. Code Ann., tit. 8, Section 141(c)).
(d) MEETINGS. Unless the Board of Directors shall otherwise provide,
regular meetings of the Executive Committee or any other committee appointed
pursuant to this Section 24 shall be held at such times and places as are
determined by the Board of Directors, or by any such committee, and when notice
thereof has been given to each member of such committee, no further notice of
such regular meetings need be given thereafter. Special meetings of any such
committee may be held at any place which has been determined from time to time
by such committee, and may be called by any Director who is a member of such
committee, upon written notice to the members of such committee of the time and
place of such special meeting given in the manner provided for the giving of
written notice to members of the Board of Directors of the time and place of
special meetings of the Board of Directors. Notice of any special meeting of
any committee may be waived in writing at any time before or after the meeting
and will be waived by any Director by attendance thereat, except when the
Director attends such special meeting for the express purpose of objecting, at
the beginning of the meeting, to the transaction of any business because the
meeting is not lawfully called or convened. A majority of the authorized number
of members of any such committee shall constitute a quorum for the
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transaction of business, and the act of a majority of those present at any
meeting at which a quorum is present shall be the act of such committee. (Del.
Code Ann., tit. 8, Sections 141(c), 229).
SECTION 25. ORGANIZATION.
At every meeting of the Directors, the Chairman of the Board of Directors,
or, if a Chairman has not been appointed or is absent, the President, or if the
President is absent, a chairman of the meeting chosen by a majority of the
Directors present, shall preside over the meeting. The Secretary, or in his
absence, an Assistant Secretary directed to do so by the President, shall act as
secretary of the meeting.
ARTICLE V - OFFICERS
SECTION 26. OFFICERS DESIGNATED.
The officers of the corporation shall be the Chairman of the Board of
Directors, the President, one or more Vice Presidents, the Secretary and the
Chief Financial Officer or Treasurer, all of whom shall be elected at the annual
organizational meeting of the Board of Directors. The order of the seniority of
the Vice Presidents shall be in the order of their nomination, unless otherwise
determined by the Board of Directors. The Board of Directors may also appoint
one or more Assistant Secretaries, Assistant Treasurers, and such other officers
and agents with such powers and duties as it shall deem necessary. The Board of
Directors may assign such additional titles to one or more of the officers as it
shall deem appropriate. Any one person may hold any number of offices of the
corporation at any one time unless specifically prohibited therefrom by law.
The salaries and other compensation of the officers of the corporation shall be
fixed by or in the manner designated by the Board of Directors. (Del. Code
Ann., tit. 8, Sections 122(5), 142(a), (b)).
SECTION 27. TENURE AND DUTIES OF OFFICERS.
(a) GENERAL. All officers shall hold office at the pleasure of the Board
of Directors and until their successors shall have been duly elected and
qualified, unless sooner removed. Any officer elected or appointed by the Board
of Directors may be removed at any time by the Board of Directors. If the
office of any officer becomes vacant for any reason, the vacancy may be filled
by the Board of Directors. (Del. Code Ann., tit. 8, Section 141(b), (e)).
(b) DUTIES OF CHAIRMAN OF THE BOARD OF DIRECTORS. The Chairman of the
Board of Directors, when present, shall preside at all meetings of the
stockholders and the Board of Directors. The Chairman of the Board of Directors
shall perform other duties commonly incident to his office and shall also
perform such other duties and have such other powers as the Board of Directors
shall designate from time to time. If there is no President, then the Chairman
of the Board of Directors shall also serve as the Chief Executive Officer of the
corporation and shall have the powers and duties prescribed in paragraph (c) of
this Section 27. (Del. Code Ann., tit. 8, Section 142(a)).
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(c) DUTIES OF PRESIDENT. The President shall preside at all meetings of
the stockholders and at all meetings of the Board of Directors, unless the
Chairman of the Board of Directors has been appointed and is present. The
President shall be the Chief Executive Officer of the corporation and shall,
subject to the control of the Board of Directors, have general supervision,
direction and control of the business and officers of the corporation. The
President shall perform other duties commonly incident to his office and shall
also perform such other duties and have such other powers as the Board of
Directors shall designate from time to time. (Del. Code Ann., tit. 8, Section
142(a)).
(d) DUTIES OF VICE PRESIDENTS. The Vice Presidents, as designated by the
Board of Directors may assume and perform the duties of the President in the
absence or disability of the President or whenever the office of President is
vacant. The Vice Presidents shall perform other duties commonly incident to
their office and shall also perform such other duties and have such other powers
as the Board of Directors or the President shall designate from time to time.
(Del. Code Ann., tit. 8, Section 142(a)).
(e) DUTIES OF SECRETARY. The Secretary shall attend all meetings of the
stockholders and of the Board of Directors, and shall record all acts and
proceedings thereof in the minute book of the corporation. The Secretary shall
give notice in conformity with these Bylaws of all meetings of the stockholders,
and of all meetings of the Board of Directors and any committee thereof
requiring notice. The Secretary shall perform all other duties given him in
these Bylaws and other duties commonly incident to his office and shall also
perform such other duties and have such other powers as the Board of Directors
shall designate from time to time. The President may direct any Assistant
Secretary to assume and perform the duties of the Secretary in the absence or
disability of the Secretary, and each Assistant Secretary shall perform other
duties commonly incident to his office and shall also perform such other duties
and have such other powers as the Board of Directors or the President shall
designate from time to time. (Del. Code Ann., tit. 8, Section 142(a)).
(f) DUTIES OF TREASURER. The Treasurer, subject to the order of the Board
of Directors, shall have the custody of all funds and securities of the
corporation. The Treasurer shall perform other duties commonly incident to his
office and shall also perform such other duties and have such other powers as
the Board of Directors or the President shall designate from time to time. The
President may direct any Assistant Treasurer to assume and perform the duties of
the Treasurer in the absence or disability of the Treasurer, and each Assistant
Treasurer shall perform other duties commonly incident to his office and shall
also perform such other duties and have such other powers as the Board of
Directors or the president shall designate from time to time. (Del. Code Ann.,
tit. 8, Section 142(a)).
(g) DUTIES OF CONTROLLER. The Controller shall keep or cause to be kept
the books of account of the corporation in a thorough and proper manner, and
shall render statements of the financial affairs of the corporation in such form
and as often as required by the Board of Directors or the President. The
Controller shall perform other duties commonly incident to his office and shall
also perform such other duties and have such other duties and have such other
powers as he Board of Directors or the President shall designate from time to
time. The
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president may direct any Assistant Controller to assume and perform the duties
of the Controller in absence or disability of the Controller, and each Assistant
Controller shall perform other duties commonly incident to his office and shall
also perform such other duties and have such other powers as the Board of
Directors or the president shall designate form time to time.
SECTION 28. DELEGATION OF AUTHORITY.
The Board of Directors may from time to time delegate the powers or duties
of any officer to any other officer or agent, notwithstanding any provision
hereof.
SECTION 29. RESIGNATIONS.
Any officer may resign at any time by giving written notice to the Board of
Directors or to the President or to the Secretary. Any such resignation shall
be effective when received by the person or persons to whom such notice is
given, unless a later time is specified therein, in which event the resignation
shall become effective at such later time. Unless otherwise specified in such
notice, the acceptance of any such resignation shall not be necessary to make it
effective. Any resignation shall be without prejudice to the rights, if any, of
the corporation under any contract with the resigning officer. (Del. Code Ann.,
tit. 8, Section 142(b)).
SECTION 30. REMOVAL.
Any officer may be removed from office at any time, either with or without
cause, by the vote or written consent of a majority of the Directors in office
at the time, or by any committee or superior officers upon whom such power of
removal may have been conferred by the Board of Directors.
ARTICLE VI - EXECUTION OF CORPORATE INSTRUMENTS AND
VOTING OF SECURITIES OWNED BY THE CORPORATION
SECTION 31. EXECUTION OF CORPORATE INSTRUMENTS.
The Board of Directors may, in its discretion, determine the method and
designate the signatory officer or officers, or other person or persons, to
execute on behalf of the corporation any corporate instrument or document, or to
sign on behalf of the corporation the corporate name without limitation, or to
enter into contracts on behalf of the corporation, except where otherwise
provided by law or these Bylaws, and such execution or signature shall be
binding upon the corporation. (Del. Code Ann., tit. 8, Sections 103(a), 142(a),
158).
Unless otherwise specifically determined by the Board of Directors or
otherwise required by law, promissory notes, deeds of trust, mortgages and other
evidences of indebtedness of the corporation, and other corporate instruments or
documents requiring the corporate seal, and certificates of shares of stock
owned by the corporation, shall be executed, signed or endorsed by the Chairman
of the Board of Directors or the President. All other instruments and documents
requiring the corporate signature, but not requiring the corporate seal, may be
executed as
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aforesaid or in such other manner as may be directed by the Board of Directors.
(Del. Code Ann., tit. 8, Sections 103 (a), 142(a), 158).
All checks and drafts drawn on banks or other depositories on funds to the
credit of the corporation or in special accounts of the corporation shall be
signed by such person or persons as the Board of Directors shall authorize so to
do.
Unless authorized or ratified by the Board of Directors or within the
agency power of an officer, no officer, agent or employee shall have any power
or authority to bind the corporation by any contract or engagement or to pledge
its credit or to render it liable for any purpose or for any amount. (Del. Code
Ann., tit. 8, Sections 103(a), 142(a), 158).
SECTION 32. VOTING OF SECURITIES OWNED BY THE CORPORATION.
All stock and other securities of other corporations owned or held by the
corporation for itself, or for other parties in any capacity, shall be voted,
and all proxies with respect thereto shall be executed, by the person authorized
so to do by resolution of the Board of Directors, or, in the absence of such
authorization, by the Chairman of the Board of Directors or the President.
(Del. Code Ann. tit. 8, Section 123).
ARTICLE VII - SHARES OF STOCK
SECTION 33. FORM AND EXECUTION OF CERTIFICATES.
Certificates for the shares of stock of the corporation shall be in such
form as is consistent with the Certificate of Incorporation and applicable law.
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 of
Directors or the President or the Secretary or Assistant Secretary, certifying
the number of shares owned by him in the corporation. Where such certificate is
countersigned by a transfer agent other than the corporation or its employee, or
by a registrar other than the corporation or its employee, any other signature
on the certificate may be a facsimile. In case any officer, transfer agent, or
registrar who has signed or whose facsimile signature has been placed upon a
certificate shall have ceased to be such officer, transfer agent, or registrar
before such certificate is issued, it may be issued with the same effect as if
he were such officer transfer agent, or registrar at the date of issue. Each
certificate shall state upon the face or back thereof, in full or in summary,
all of the designations preferences, limitations, restrictions on transfer and
relative rights of the shares authorized to be issued. (Del. Code Ann. tit. 8,
Section 158).
SECTION 34. LOST CERTIFICATES.
A new certificate or certificates shall be issued in place of any
certificate or certificates theretofore issued by the corporation alleged to
have been lost, stolen, or destroyed, upon the making of an affidavit of that
fact by the person claiming the certificate of stock to be lost, stolen, or
destroyed. The corporation may require, as a condition precedent to the
issuance of a new certificate or certificates the owner of such lost, stolen, or
destroyed certificate or certificates, or his legal representative, to advertise
the same in such manner as it shall require or
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to give the corporation a surety bond in such form and amount as it may direct
as indemnity against any claim that may be made against the corporation with
respect to the certificate alleged to have been lost, stolen, or destroyed.
(Del. Code Ann., tit. 8, Section 167).
SECTION 35. TRANSFERS.
(a) Transfers of record of shares of stock of the corporation shall be
made only upon its books by the holders thereof, in person or by attorney duly
authorized, and upon the surrender of a properly endorsed certificate or
certificates for a like number of shares. (Del. Code Ann., tit. 8, Section 201,
tit. 6, Section 8-401(1)).
(b) The corporation shall have power to enter into and perform any
agreement with any number of stockholders of any one or more classes of stock of
the corporation to restrict the transfer of shares of stock of the corporation
of any one or more classes owned by such stockholders in any manner not
prohibited by the General Corporation Law of Delaware. (Del. Code Ann., tit. 8,
Section 160 (a)).
SECTION 36. FIXING RECORD DATES.
(a) In order that the Corporation may determine the stockholders entitled
to notice of or to vote at any meeting of stockholders or any adjournment
thereof, the Board of Directors may fix, in advance, a record date, which record
date shall not precede the date upon which the resolution fixing the record date
is adopted by the Board of Directors, and which record date shall not be more
than sixty (60) nor less than ten (10) days before the date of such meeting. If
no record date is fixed by the Board of Directors, the record date for
determining stockholders entitled to notice of or to vote at a meeting of
stockholders shall be at the close of business on the day next preceding the day
on which notice is given, or if notice is waived, at the close of business on
the day next preceding the day on which the meeting is held. A determination of
stockholders of record entitled to notice of or to vote at a meeting of
stockholders shall apply to any adjournment of the meeting; provided, however,
that the Board of Directors may fix a new record date for the adjourned meeting.
(b) In order that the Corporation may determine the stockholders entitled
to consent to corporate action in writing without a meeting, the Board of
Directors may fix, in advance, a record date which record date shall not precede
the date upon which the resolution fixing the record date is adopted by the
Board of Directors, and which date shall not be more than ten (10) days after
the date upon which the resolution fixing the record date is adopted by the
Board of Directors. If no record date has been fixed by the Board of Directors,
the record date for determining stockholders entitled to consent to corporate
action in writing without a meeting, when no prior action by the Board of
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Directors is required by law, shall be the first date on which a signed written
consent setting forth the action taken or proposed to be taken is delivered to
the Corporation by delivery to its registered office in the State of Delaware,
its principal place of business or an officer or agent of the Corporation having
custody of the book in which proceedings of meetings of stockholders are
recorded. Delivery made to a Corporation's registered office shall be by hand
or by certified or registered mail, return receipt requested. If no record date
has been fixed by the Board of Directors and prior action by the Board of
Directors is required by law, the record date for determining stockholders
entitled to consent to corporate action in writing without a meeting shall be at
the close of business on the day on which the Board of Directors adopts the
resolution taking such prior action.
(c) In order that the corporation may determine the stockholders entitled
to receive payment of any dividend or other distribution or allotment of any
rights or the stockholders 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 record
date shall not precede the date upon which the resolution fixing the record date
is adopted, and which record date shall be not more than sixty (60) days prior
to such action. If no record date is fixed, the record date for determining
stockholders for any such purpose shall be at the close of business on the day
on which the Board of Directors adopts the resolution relating thereto. (Del.
Code Ann., tit. 8, Section 213).
SECTION 37. REGISTERED STOCKHOLDERS.
The corporation shall be entitled to recognize the exclusive right of a
person registered on its books as the owner of shares to receive dividends, and
to vote as such owner, and 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, except as
otherwise provided by the laws of Delaware. (Del. Code Ann., tit. 8, Sections
213(a), 219).
ARTICLE VIII - OTHER SECURITIES OF THE CORPORATION
SECTION 38. EXECUTION OF OTHER SECURITIES.
All bonds, debentures and other corporate securities of the corporation,
other than stock certificates (covered in Section 33), may be signed by the
Chairman of the Board of Directors, the President, or such other person as may
be authorized by the Board of Directors, and the corporate seal impressed
thereon or a facsimile of such seal imprinted thereon and attested by the
signature of the Secretary or an Assistant Secretary, or the Chief Financial
Officer or Treasurer or an Assistant Treasurer; provided, however, that where
any such bond, debenture or other corporate security shall be authenticated by
the manual signature of a trustee under an indenture pursuant to which such
bond, debenture or other corporate security shall be issued, the signatures of
the persons signing and attesting the corporate seal on such bond, debenture or
other corporate security may be the imprinted facsimile of the signatures of
such persons. Interest coupons appertaining to any such bond, debenture or
other corporate security authenticated by a trustee as aforesaid, shall be
signed by the Treasurer or an Assistant Treasurer of the corporation or such
other person as may be authorized by the Board of Directors, or bear imprinted
thereon the facsimile signature of such person. In case any officer who shall
have signed or attested any bond, debenture or other corporate security, or
whose facsimile signature shall appear thereon or on any such interest coupon,
shall have ceased to be such officer before the bond, debenture or other
corporate security so signed or attested shall have been delivered, such bond
debenture or other corporate security nevertheless may be adopted by the
corporation and issued and delivered as though the person who signed the same or
whose facsimile signature shall have been used thereon had not ceased to be such
officer of the corporation.
17
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ARTICLE IX - DIVIDENDS
SECTION 39. DECLARATION OF DIVIDENDS.
Dividends upon the capital stock of the corporation, subject to the
provisions of the Certificate of Incorporation, if any, may be declared by the
Board of Directors pursuant to law at any regular or special meeting. Dividends
may be paid in cash, in property, or in shares of the capital stock, subject to
the provisions of the Certificate of Incorporation. (Del. Code Ann. tit. 8,
Sections 170, 173).
SECTION 40. DIVIDEND RESERVE.
Before payment of any dividend, there may be set aside out of any funds of
the corporation available for dividends such sum or sums as the Board of
Directors from time to time, in their absolute discretion, think proper as a
reserve or reserves to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the corporation, or for such other
purpose as the Board of Directors shall think conducive to the interests of the
corporation, and the Board of Directors may modify or abolish any such reserve
in the manner in which it was created. (Del. Code Ann., tit. 8, Section 171).
ARTICLE X - FISCAL YEAR
SECTION 41. FISCAL YEAR.
The fiscal year of the corporation shall be fixed by resolution of the
Board of Directors.
ARTICLE XI - INDEMNIFICATION
SECTION 42. INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES AND OTHER AGENTS.
(a) Directors and Executive Officers. The corporation shall indemnify its
Directors and executive officers to the fullest extent not prohibited by the
Delaware General Corporation Law; PROVIDED, HOWEVER, that the corporation may
limit the extent of such indemnification by individual contracts with its
Directors and executive officers; and, PROVIDED, FURTHER, that the corporation
shall not be required to indemnify any Director or executive officer in
connection with any proceeding (or part thereof) initiated by such person or any
proceeding by such person against the corporation or its Directors, officers,
employees or other agents unless (i) such indemnification is expressly required
to be made by law, (ii) the proceeding was authorized by the Board of Directors
of the corporation or (iii) such indemnification is provided by the corporation,
in its sole discretion, pursuant to the powers vested in the corporation under
the Delaware General Corporation Law.
(b) OTHER OFFICERS, EMPLOYEES AND OTHER AGENTS. The corporation shall
have power to indemnify its other officers, employees and other agents as set
forth in the Delaware General Corporation Law.
(c) GOOD FAITH.
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(l) For purposes of any determination under this Bylaw, a Director or
executive officer shall be deemed to have acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, to have had
no reasonable cause to believe that his conduct was unlawful, if his action is
based on information, opinions, reports and statements including financial
statements and other financial data, in each case prepared or presented by:
(i) one or more officers or employees of the corporation whom
the Director or executive officer believed to be reliable and competent in the
matters presented;
(ii) counsel, independent accountants or other persons as to
matters which the Director or executive officer believed to be within such
person's professional competence; and
(iii) with respect to a Director, a committee of the Board
upon which such Director does not serve, as to matters within such Committee's
designated authority, which committee the Director believes to merit confidence;
so long as, in each case, the Director or executive officer acts without
knowledge that would cause such reliance to be unwarranted.
(2) The termination of any proceeding by judgment, order, settlement,
conviction or upon a plea of nolo contendere or its equivalent shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal proceeding, that
he had reasonable cause to believe that his conduct was unlawful.
(3) The provisions of this paragraph (c) shall not be deemed to be
exclusive or to limit in any way the circumstances in which a person may be
deemed to have met the applicable standard of conduct set forth by the Delaware
General Corporation Law.
(d) EXPENSES. The corporation shall advance, prior to the final
disposition of any proceeding, promptly following request therefor, all expenses
incurred by any Director or executive officer in connection with such proceeding
upon receipt of an undertaking by or on behalf of such person to repay said
amounts if it should be determined ultimately that such person is not entitled
to be indemnified under this Bylaw or otherwise.
Notwithstanding the foregoing, unless otherwise determined pursuant to
paragraph (e) of this Bylaw, no advance shall be made by the corporation if a
determination is reasonably and promptly made (1) by the Board of Directors by a
majority vote of a quorum consisting of Directors who were not parties to the
proceeding, or (2) if such quorum is not obtainable, or, even if obtainable, a
quorum of disinterested directors so directs, by independent legal counsel in a
written opinion, that the facts known to the decision making party at the time
such determination is made demonstrate clearly and convincingly that such person
acted in bad faith or in a manner that such person did not believe to be in or
not opposed to the best interests of the corporation.
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<PAGE>
(e) ENFORCEMENT. Without the necessity of entering into an express
contract, all rights to indemnification and advances to Directors and executive
officers under this Bylaw shall be deemed to be contractual rights and be
effective to the same extent and as if provided for in a contract between the
corporation and the Director or executive officer. Any right to indemnification
or advances granted by this Bylaw to a Director or executive officer shall be
enforceable by or on behalf of the person holding such right in any court of
competent jurisdiction if (i) the claim for indemnification or advances is
denied, in whole or in part, or (ii) no disposition of such claim is made within
ninety (90) days of request therefor. The claimant in such enforcement action,
if successful in whole or in part, shall be entitled to be paid also the expense
of prosecuting his claim. The corporation shall be entitled to raise as a
defense to any such action that the claimant has not met the standards of
conduct that make it permissible under the Delaware General Corporation Law for
the corporation to indemnify the claimant for the amount claimed. Neither the
failure of the corporation (including its Board of Directors, independent legal
counsel or its stockholders) to have made a determination prior to the
commencement of such action that indemnification of the claimant is proper in
the circumstances because he has met the applicable standard of conduct set
forth in the Delaware General Corporation Law, nor an actual determination by
the corporation (including its Board of Directors, independent legal counsel or
its stockholders) that the claimant has not met such applicable standard of
conduct, shall be a defense to the action or create a presumption that claimant
has not met the applicable standard of conduct.
(f) NON-EXCLUSIVITY OF RIGHTS. The rights conferred on any person by this
Bylaw shall not be exclusive of any other right which such person may have or
hereafter acquire under any statute, provision of the Certificate of
Incorporation, Bylaws, 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 office. The corporation is
specifically authorized to enter into individual contracts with any or all of
its Directors, officers, employees or agents respecting indemnification and
advances, to the fullest extent not prohibited by the Delaware General
Corporation Law.
(g) SURVIVAL OF RIGHTS. The rights conferred on any person by this Bylaw
shall continue as to a person who has ceased to be a Director, officer, employee
or other agent and shall inure to the benefit of the heirs, executors and
administrators of such a person.
(h) INSURANCE. To the fullest extent permitted by the Delaware General
Corporation Law, the corporation, upon approval by the Board of Directors, may
Purchase insurance on behalf of any person required or permitted to be
indemnified pursuant to this Bylaw.
(i) AMENDMENTS. Any repeal or modification of this Bylaw shall only be
prospective and shall not affect the rights under this Bylaw in effect at the
time of the alleged occurrence of any action or omission to act that is the
cause of any proceeding against any agent of the corporation.
(j) SAVING CLAUSE. If this Bylaw or any portion hereof shall be
invalidated on any ground by any court of competent jurisdiction, then the
corporation shall nevertheless indemnify
20
<PAGE>
each Director and executive officer to the full extent not prohibited by any
applicable portion of this Bylaw that shall not have been invalidated, or by any
other applicable law.
(k) CERTAIN DEFINITIONS. for the purposes of this Bylaw, the following
definitions shall apply:
(l) The term "proceeding" shall be broadly construed and shall
include without limitation, the investigation, preparation, prosecution,
defense, settlement, arbitration and appeal of, and the giving of testimony in,
any threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative.
(2) The term "expenses" shall be broadly construed and shall include,
without limitation, court costs, attorneys' fees, witness fees, fines, amounts
paid in settlement or judgment and any other costs and expenses of any nature or
kind incurred in connection with any proceeding.
(3) The term the "corporation" shall include, in addition to the
resulting corporation, any constituent corporation (including any constituent of
a constituent) absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power and authority to indemnify its
directors, officers, and employees or agents, so that any person who is or was a
director, officer, employee or agent of such constituent corporation, or is or
was serving at the request of 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 Bylaw with respect to the resulting or surviving corporation as he would
have with respect to such constituent corporation if its separate existence had
continued.
(4) References to a "director," "officer," "employee," or "agent" of
the corporation shall include, without limitation, situations where such person
is serving at the request of the corporation as a director, officer, employee,
trustee or agent of another corporation, partnership, joint venture, trust or
other enterprise.
(5) References to "other enterprises" shall include employee benefit
plans; references to "fines" shall include any excise taxes assessed on a person
with respect to an employee benefit plan; and references to "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 interest
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 Bylaw.
21
<PAGE>
ARTICLE XII - NOTICES
SECTION 43. NOTICES.
(a) NOTICE TO STOCKHOLDERS. Whenever, under any provisions of these
Bylaws, notice is required to be given to any stockholder, it shall be given in
writing, timely and duly deposited in the United States mail, postage prepaid,
and addressed to his last known post office address as shown by the stock record
of the corporation or its transfer agent. (Del. Code Ann., tit. 8, Section
222).
(b) NOTICE TO DIRECTORS. Any notice required to be given to any Director
may be given by the method stated in subsection (a), or by facsimile, telex or
telegram, except that such notice other than one which is delivered personally
shall be sent to such address as such Director shall have filed in writing with
the Secretary, or, in the absence of such filing, to the last known post office
address of such Director.
(c) ADDRESS UNKNOWN. If no address of a stockholder or Director be known,
notice may be sent to the office of the corporation required to be maintained
pursuant to Section 2 hereof.
(d) AFFIDAVIT OF MAILING. An affidavit of mailing, executed by a duly
authorized and competent employee of the corporation or its transfer agent
appointed with respect to the class of stock affected, specifying the name and
address or the names and addresses of the stockholder or stockholders, or
Director or Directors, to whom any such notice or notices was or were given, and
the time and method of giving the same, shall be conclusive evidence of the
statements therein contained. (Del. Code Ann., tit. 8, Section 222).
(e) TIME NOTICES DEEMED GIVEN. All notices given by mail, as above
provided, shall be deemed to have been given as at the time of mailing and all
notices given by facsimile, telex or telegram shall be deemed to have been given
as of the sending time recorded at time of transmission.
(f) METHODS OF NOTICE. It shall not be necessary that the same method of
giving notice be employed in respect of all Directors, but one permissible
method may be employed in respect of any one or more, and any other permissible
method or methods may be employed in respect of any other or others.
(g) FAILURE TO RECEIVE NOTICE. The period or limitation of time within
which any stockholder may exercise any option or right or enjoy any privilege or
benefit, or be required to act, or within which any Director may exercise any
power or right, or enjoy any privilege, pursuant to any notice sent him in the
manner above provided, shall not be affected or extended in any manner by the
failure of such stockholder or such Director to receive such notice.
(h) NOTICE TO PERSON WITH WHOM COMMUNICATION IS UNLAWFUL. Whenever notice
is required to be given, under any provision of law or of the Certificate of
Incorporation or Bylaws of the corporation, to any person with whom
communication is unlawful, the giving of such notice to such person shall not be
required and there shall be no duty to apply to any
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governmental authority or agency for a license or permit to give such notice to
such person. Any action or meeting which shall be taken or held without notice
to any such person with whom communication is unlawful shall have the same force
and effect as if such notice had been duly given. In the event that the action
taken by the corporation is such as to require the filing of a certificate under
any provision of the Delaware General Corporation Law, the certificate shall
state, if such is the fact and if notice is required, that notice was given to
all persons entitled to receive notice except such persons with whom
communication is unlawful.
(i) NOTICE TO PERSON WITH UNDELIVERABLE ADDRESS. Whenever notice is
required to be given, under any provision of law or the Certificate of
Incorporation or Bylaws of the corporation, to any stockholder to whom (i)
notice of two consecutive annual meetings, and all notices of meetings or of the
taking of action by written consent without a meeting to such person during the
period between such two consecutive annual meetings, or (ii) all, and at least
two, payments (if sent by first class mail) of dividends or interest on
securities during a twelve month period, have been mailed addressed to such
person at his address as shown on the records of the Corporation and have been
returned undeliverable, the giving of such notice to such person shall not be
required. Any action or meeting which shall be taken or held without notice to
such person shall have the same force and effect as if such notice had been duly
given. If any such person shall deliver to the corporation a written notice
setting forth his then current address, the requirement that notice be given to
such person shall be reinstated. In the event that the action taken by the
corporation is such as to require the filing of a certificate under any
provision of the Delaware General Corporation Law, the certificate need not
state that notice was not given to persons to whom notice was not required to be
given pursuant to this paragraph. (Del. Code Ann., tit. 8, Section 230).
ARTICLE XIII - AMENDMENTS
SECTION 44. AMENDMENTS.
Except as otherwise set forth in paragraph (i) of Section 42 of these
Bylaws, these Bylaws may be amended or repealed and new Bylaws adopted by the
stockholders entitled to vote. The Board of Directors shall also have the
power, unless such power is expressly prohibited by the Certificate of
Incorporation, to adopt, amend or repeal Bylaws (including, without limitation,
the amendment of any Bylaw setting forth the number of Directors who shall
constitute the whole Board of Directors). (Del. Code Ann. tit. 8, Sections
109(a), 122(6)).
ARTICLE XIV - LOANS TO OFFICERS
SECTION 45. LOANS TO OFFICERS.
The corporation may lend money to, or guarantee any obligation of, or
otherwise assist any officer or other employee of the corporation or of its
subsidiaries, including any officer or employee who is a Director of the
corporation or its subsidiaries, whenever, in the judgment of the Board of
Directors, such loan, guarantee or assistance may reasonably be expected to
benefit the corporation. The loan, guarantee or other assistance may be with or
without interest and may be unsecured, or secured in such manner as the Board of
Directors shall approve, including,
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without limitation, a pledge of shares of stock of the corporation. Nothing in
this Section 45 shall be deemed to deny, limit or restrict the powers of
guaranty or warranty of the corporation at common law or under any statute.
(Del. Code Ann., tit. 8, Section 143).
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<PAGE>
RIGHTS AGREEMENT
DATED AS OF SEPTEMBER 19, 1997
BY AND BETWEEN
BUILDING MATERIALS HOLDING CORPORATION
AND
AMERICAN STOCK TRANSFER
AND TRUST COMPANY
AS RIGHTS AGENT
<PAGE>
TABLE OF CONTENTS
SECTION PAGE
- ------- ----
1 Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . 1
2 Appointment of Rights Agent . . . . . . . . . . . . . . . . . . . 8
3 Issuance of Right Certificates. . . . . . . . . . . . . . . . . . 8
4 Form of Right Certificates. . . . . . . . . . . . . . . . . . . . 10
5 Countersignature and Registration . . . . . . . . . . . . . . . . 11
6 Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates. . . . . . . . . . . . . . . . . . . . . . . . . . . 11
7 Exercise of Rights. . . . . . . . . . . . . . . . . . . . . . . . 12
8 Cancellation and Destruction of Right Certificates. . . . . . . . 15
9 Reservation and Availability of Capital Stock . . . . . . . . . . 15
10 Securities Record Date. . . . . . . . . . . . . . . . . . . . . . 16
11 Adjustment of Exercise Price, Number of Shares Issuable Upon
Exercise of Rights or Number of Rights. . . . . . . . . . . . . . 16
12 Certificate of Adjusted Exercise Price or Number of Shares
Issuable Upon Exercise of Rights. . . . . . . . . . . . . . . . . 23
13 Consolidation, Merger, or Sale or Transfer of Assets or
Earning Power . . . . . . . . . . . . . . . . . . . . . . . . . . 24
14 Fractional Rights and Fractional Shares . . . . . . . . . . . . . 27
15 Rights of Action. . . . . . . . . . . . . . . . . . . . . . . . . 28
16 Agreement of Right Holders. . . . . . . . . . . . . . . . . . . . 28
(i)
<PAGE>
17 Right Holder and Right Certificate Holder Not Deemed a
Stockholder . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
(ii)
<PAGE>
TABLE OF CONTENTS
(continued)
18 Concerning the Rights Agent . . . . . . . . . . . . . . . . . . . 29
19 Merger or Consolidation or Change of Name of Rights Agent . . . . 30
20 Duties of Rights Agent. . . . . . . . . . . . . . . . . . . . . . 30
21 Change of Rights Agent. . . . . . . . . . . . . . . . . . . . . . 32
22 Issuance of New Right Certificates. . . . . . . . . . . . . . . . 33
23 Redemption of Rights. . . . . . . . . . . . . . . . . . . . . . . 34
24 Exchange of Rights. . . . . . . . . . . . . . . . . . . . . . . . 35
25 Certain Cash Tender Offers. . . . . . . . . . . . . . . . . . . . 36
26 Notice of Certain Events. . . . . . . . . . . . . . . . . . . . . 39
27 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
28 Supplements and Amendments. . . . . . . . . . . . . . . . . . . . 40
29 Certain Covenants . . . . . . . . . . . . . . . . . . . . . . . . 41
30 Successors. . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
31 Benefits of this Agreement. . . . . . . . . . . . . . . . . . . . 41
32 Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . 41
33 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . 42
34 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . 42
35 Descriptive Headings. . . . . . . . . . . . . . . . . . . . . . . 42
(iii)
<PAGE>
TABLE OF EXHIBITS
Exhibit A -- Form of Certificate of Designation
Exhibit B -- Form of Right Certificate
Exhibit C -- Form of Summary of the Rights
(iv)
<PAGE>
TABLE OF DEFINED TERMS
TERM DEFINED PAGE SECTION
- ------------ ---- -------
Adjustment Shares 18 11(a)(ii)
Affiliate 2 1(a)
Agreement 1 Introduction
Associate 2 1(a)
Beneficially Own 2 1(b)
Beneficial Owner 2 1(b)
Business Day 3 1(c)
Cash Tender Offer Proposal 3 1(d)
Close of Business 3 1(e)
Closing Price 4 1(f)
Common Share 4 1(g)
Common Share Equivalent 18 11(a)(iii)
Company (Building Materials
Holding Corporation) 1 Introduction
Company (following a Section
13(a) Event) 25 13(a)(iii)
Current Market Price 4 1(h)
Distribution Date 8 3(a)
Exchange Act 5 1(j)
Exchange Ratio 35 24(a)
Exercise Price 13 7(c)
Expiration Date 5 1(l)
(v)
<PAGE>
Fair Offer 37 25(b)
Fairness Opinion 36 25(a)
Independent Director 5 1(m)
(vi)
<PAGE>
TABLE OF DEFINED TERMS
(CONTINUED)
TERM DEFINED PAGE SECTION
- ------------ ---- -------
NASDAQ 4 1(f)
Person 6 1(n)
Preferred Share 6 1(o)
Preferred Share Equivalent 18 11(b)
Proposal Date 37 25(a)
Prospective Offeror 3 1(d)
Record Date 1 Recital
Redemption Date 6 1(q)
Redemption Price 34 23(a)
Resolution 36 25(a)
Right 1 Recital
Rights Agent l Introduction
Section 11(a)(ii) Event 17 11(a)(ii)
Section 13(a) Event 24 13(a)
Securities Act 6 1(u)
Special Meeting 36 25(a)
Subsidiary 6 1(v)
Surviving Person 24 13(a)
Trading Day 6 1(w)
Unavailable Adjustment Shares 18 11(a)(iii)
Unavailable Exchange Shares 36 24(c)
Voting Share 6 1(x)
(vii)
<PAGE>
15% Ownership Date 7 1(y)
15% Stockholder 7 1(z)
(viii)
<PAGE>
RIGHTS AGREEMENT
This Rights Agreement (this "Agreement") is made and entered into as
of the 19 day of September, 1997 by and between Building Materials
Holding Corporation, a Delaware corporation (the "Company"), and American Stock
Transfer and Trust Company (the "Rights Agent").
WHEREAS, the Board of Directors of the Company has authorized and
declared a dividend of one preferred stock purchase right (a "Right") for each
Common Share (as hereinafter defined) of the Company, which dividend is payable
on October 2, 1997 (the "Record Date") to the holders of record of
Common Shares as of the Close of Business (as hereinafter defined) on such date;
WHEREAS, the Board of Directors of the Company has further authorized
and directed the issuance of one (subject to adjustment of such number as
provided in this Agreement) Right for (A) each Common Share that shall be
outstanding at any time after the Record Date and prior to the earliest of the
date of the first Section 11(a)(ii) Event, the date of the first Section 13(a)
Event, the Redemption Date or the Expiration Date (as such terms are hereinafter
defined), and (B) each Common Share that shall be issued by the Company at any
time on or after the earlier of the date of the first Section 11(a)(ii) Event or
the date of the first Section 13(a) Event and prior to the earlier of the
Redemption Date or the Expiration Date pursuant to the exercise of conversion
rights, exchange rights, rights (other than Rights), warrants or options that
shall have been issued or granted prior to the earlier of the date of the first
Section 11(a)(ii) Event or the date of the first Section 13(a) Event, unless the
Board of Directors shall provide otherwise at the time of the issuance or grant
of such conversion rights, exchange rights, rights (other than Rights), warrants
or options; and
WHEREAS, in connection with the matters referred to herein, the
Company desires to appoint the Rights Agent to act on behalf of the Company for
the benefit of the holders of Rights, and the Rights Agent is willing so to act;
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual agreements set forth herein, and for the benefit of the holders of
Rights, the parties hereto hereby agree as follows:
Section 1. CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms have the meanings indicated below:
1
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(a) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 promulgated under the Exchange Act, as in
effect on the date hereof.
(b) A Person shall be deemed the "Beneficial Owner" of and shall be
deemed to "Beneficially Own":
(i) any securities that such Person or any of such Person's
Affiliates or Associates beneficially owns, directly or indirectly, for
purposes of Section 13(d) of the Exchange Act and Rule 13d-3 promulgated
under the Exchange Act, in each case as in effect on the date hereof;
(ii) any securities that such Person or any of such Person's
Affiliates or Associates has the right to acquire (whether such right is
exercisable immediately, or only after the passage of time, compliance with
regulatory requirements, the fulfillment of a condition, or otherwise)
pursuant to any agreement, arrangement or understanding, or upon the
exercise of conversion rights, exchange rights, rights (other than the
Rights), warrants or options, or otherwise, provided that a Person shall
not be deemed the Beneficial Owner of, or to Beneficially Own, securities
tendered pursuant to a tender offer or exchange offer made by or on behalf
of such Person or any of such Person's Affiliates or Associates until such
tendered securities are accepted for purchase or exchange;
(iii) any securities that such Person or any such Person's
Affiliates or Associates has the right to vote, alone or in concert with
others, pursuant to any agreement, arrangement or understanding, provided
that a Person shall not be deemed the Beneficial Owner of, or to
Beneficially Own, any security if the agreement, arrangement or
understanding to vote such security (A) arises solely from a revocable
proxy given to such Person or any of such Person's Affiliates or Associates
in response to a public proxy solicitation made pursuant to and in
accordance with the applicable rules and regulations of the Exchange Act,
and (B) is not also then reportable on Schedule 13D under the Exchange Act
(or any comparable or successor report);
(iv) any securities that are Beneficially Owned, directly or
indirectly, by any other Person with which such Person or any of such
Person's Affiliates or Associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding,
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voting (other than voting pursuant to a revocable proxy as described in the
proviso to Section 1(b)(iii) hereof) or disposing of any securities of the
Company; and
(v) on any day on or after the Distribution Date, all Rights
that prior to such date were represented by certificates for Common Shares
that such Person Beneficially Owns on such day.
Notwithstanding anything to the contrary in this Section 1(b), a
Person engaged in business as an underwriter of securities shall not be deemed
to be the Beneficial Owner of, or to Beneficially Own, any securities acquired
through such Person's participation in good faith in a firm commitment
underwriting until the expiration of forty (40) days after the date of such
acquisition.
(c) "Business Day" shall mean any day other than a Saturday, a Sunday
or a day on which banking institutions in the State of New York are authorized
or obligated by law or executive order to close.
(d) "Cash Tender Offer Proposal" shall mean a written proposal
delivered to the Company by any Person (a "Prospective Offeror"), which
proposal:
(i) is for a tender offer for any and all of the outstanding
Voting Shares held by any Person other than such Prospective Offeror or its
Affiliates or Associates for cash at the same price;
(ii) states that such Prospective Offeror has obtained firm
written financing commitments from recognized institutional financing
sources, and/or has on hand cash or cash equivalents, for the full amount
of all financing necessary to consummate the acquisition of Voting Shares
described in such Cash Tender Offer Proposal and is accompanied by
reasonable evidence of the foregoing; and
(iii) contains the written agreement of the Prospective Offeror to
pay (or share with any other Prospective Offeror) the Company's costs of
any Special Meeting (as such term is defined in Section 25 hereof), other
than the Company's costs of preparing and mailing proxy material for its
own solicitation.
(e) "Close of Business" on any given date shall mean 5:00 o'clock
p.m., New York time, on such date; provided, however, that if such date is not a
Business Day,
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it shall mean 5:00 o'clock p.m., New York time, on the next succeeding Business
Day.
(f) "Closing Price" of a stock or other security on any day shall be
the last sale price, regular way, per share of such stock or unit of such other
security on such day or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if such stock or other security is not listed or admitted to trading on the New
York Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which such stock or other security is listed or admitted
to trading or, if such stock or other security is not listed or admitted to
trading on any national securities exchange, the last quoted price or, if not so
quoted, the average of the high bid and low asked prices in the over-the-counter
market, as reported by the National Association of Securities Dealers, Inc.
Automated Quotations System ("NASDAQ") or such other system then in use or, if
on any such date such stock or other security is not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker that makes a market in such stock or other security
and that is selected by the Board of Directors of the Company.
(g) "Common Share" shall mean one share of the Common Stock, par
value $.001 per share, of the Company, unless used with reference to a Person
other than the Company, in which case it shall mean one share of the class of
common stock of such Person having the greatest voting power per share or, if
such Person is a Subsidiary of another Person, one Common Share of the Person
that ultimately controls such Person.
(h) "Continuing Director" shall mean (i) any member of the Board of
Directors of the Company, while such person is a member of the Board, who is not
a 15% Stockholder, or an Affiliate or Associate of a 15% Stockholder, or a
representative or nominee of a 15% Stockholder or of any such Affiliate or
Associate and was a member of the Board prior to the 15% Ownership Date, and
(ii) any successor of a Continuing Director, while such successor is a member of
the Board, who is not a 15% Stockholder, or an Affiliate or Associate of a 15%
Stockholder, or representative or nominee of a 15% Stockholder or of any such
Affiliate or Associate, and is
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recommended or elected to succeed the Continuing Director by a majority of the
Continuing Directors.
(i) "Current Market Price" per share of any stock or unit of any
other security on any date shall mean the average of the daily Closing Prices of
such stock or other security for the 30 consecutive Trading Days through and
including the Trading Day immediately preceding the date in question; provided,
however, that if any event shall have caused the Closing Price on any Trading
Day during such 30-day period not to be fully comparable with the Closing Price
on the date in question (or, if no Closing Price is available on the date in
question, on the Trading Day immediately preceding the date in question), then
each such noncomparable Closing Price so used shall be appropriately adjusted by
the Board of Directors in order to make the Closing Price on each Trading Day
during the period used for the determination of the Current Market Price fully
comparable with the Closing Price on such date in question (or, if applicable,
the immediately preceding Trading Day). "Current Market Price" per share of any
stock or unit of such other security that is not publicly held or so listed or
traded, and "Current Market Price" of any other property, shall mean the fair
value per share of such stock or unit of such other security, or the fair value
of such other property, respectively, as determined in good faith by the Board
of Directors of the Company based upon such appraisals or valuation reports of
such independent experts as the Board of Directors shall in good faith determine
appropriate, which determination shall be described in a statement filed by the
Company with the Rights Agent.
(j) "Distribution Date" shall have the meaning ascribed to it in
Section 3 hereof.
(k) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(l) "Exercise Price" shall have the meaning ascribed to it in Section
7(c) hereof.
(m) "Expiration Date" shall mean September 22, 2007.
(n) "Independent Director" shall mean any director of the Company who
(i) became a director of the Company prior to the 15% Ownership Date or (ii)
became a director of the Company on or after the 15% Ownership Date, was
recommended to become a director of the Company by a majority of the Independent
Directors then in office and is not (A) a 15% Stockholder or an Affiliate or
Associate of a 15% Stockholder, (B) an officer, director or employee of
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such 15% Stockholder, Affiliate or Associate, or (C) a relative or nominee of
any of the foregoing. For purposes of this subsection (n), a director shall be
deemed to be a "nominee" of a Person referred to in clause (ii) above if such
director was elected to the Board of Directors of the Company by a vote of
stockholders in which such director failed to receive the affirmative majority
of the votes cast by Persons other than such Person and such Person's Affiliates
and Associates. Whenever this Agreement requires or allows action to be taken
by a majority of the Independent Directors, with or without the concurrence of a
specified minimum number of Independent Directors, if necessary for such action
to be valid under applicable law, such action may be taken by the Board of
Directors or a duly authorized committee thereof, provided that the number of
Independent Directors who are members of the Board of Directors or of such
committee and who vote in favor of such action constitutes a majority of the
Independent Directors then in office and equals or exceeds any such specified
minimum number of Independent Directors.
(o) "Person" shall mean any individual, firm, partnership,
corporation, association, group (as such term is used in Rule 13d-5 promulgated
under the Exchange Act as in effect on the date hereof) or other entity, and
shall include any successor (by merger or otherwise) of such entity.
(p) "Preferred Share" shall mean one share of the Series C Junior
Participating Cumulative Preferred Stock, par value $.001 per share, of the
Company, which shall have the rights and preferences set forth in the Company's
Restated Certificate of Incorporation in the form attached hereto as Exhibit A.
(q) "Record Date" shall have the meaning ascribed to it in the
recitals hereto.
(r) "Redemption Date" shall mean the date of the action of a
majority, but not less than three, of the Independent Directors directing the
Company to redeem the Rights pursuant to Section 23(a) hereof or exchange the
Rights pursuant to Section 24(a) hereof.
(s) "Redemption Price" shall have the meaning ascribed to it in
Section 23(a) hereof.
(t) "Section 11(a)(ii) Event" shall have the meaning ascribed to it
in Section 11(a)(ii) hereof.
(u) "Section 13(a) Event" shall have the meaning ascribed to it in
Section 13(a) hereof.
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(v) "Securities Act" shall mean the Securities Act of 1933, as
amended.
(w) "Subsidiary" of any Person shall mean any corporation or other
Person of which equity securities or equity interests representing a majority of
the voting power are owned, directly or indirectly, or which is effectively
controlled, by such Person.
(x) "Trading Day" shall mean, as to any stock or other security, a
day on which the principal national securities exchange on which such stock or
other security is listed or admitted to trading is open for the transaction of
business or, if such stock or other security is not listed or admitted to
trading on any national securities exchange, a Business Day.
(y) "Voting Share" shall mean (i) a Common Share and (ii) any other
share of capital stock of the Company entitled to vote generally in the election
of directors or entitled to vote together with the Common Shares in respect of
any merger, consolidation, sale of all or substantially all of the Company's
assets, liquidation, dissolution or winding up. References in this Agreement to
a percentage or portion of the outstanding Voting Shares shall be deemed a
reference to the percentage or portion of the total votes entitled to be cast by
the holders of the outstanding Voting Shares.
(z) "15% Ownership Date" shall mean the first date of public
announcement (which, for purposes of this definition, shall include, without
limitation, a report filed pursuant to Section 13(d) of the Exchange Act) by the
Company or a 15% Stockholder containing the facts by virtue of which a Person
has become a 15% Stockholder.
(aa) "15% Stockholder" shall mean any Person that, together with all
Affiliates and Associates of such Person, without the prior approval of a
majority of the Continuing Directors, hereafter acquires Beneficial Ownership
of, in the aggregate, in one or more transactions, a number of Voting Shares of
the Company equal to 1% or more of the Voting Shares then outstanding and
thereupon or thereafter Beneficially Owns 15% or more of the Voting Shares of
the Company then outstanding; provided, however, that the term "15% Stockholder"
shall not include: (i) the Company, any wholly owned Subsidiary of the Company,
any employee benefit plan of the Company or of a Subsidiary of the Company, or
any Person holding Voting Shares for or pursuant to the terms of any such
employee benefit plan; or (ii) any Person if such Person would not otherwise be
a 15% Stockholder but for a reduction in the number of outstanding Voting Shares
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resulting from a stock repurchase program or other similar plan of the Company
or from a self tender offer of the Company, which plan or tender offer commenced
on or after the date hereof, provided, however, that the term "15% Stockholder"
shall include such Person from and after the first date upon which (A) such
Person, since the date of the commencement of such plan or tender offer, shall
have acquired Beneficial Ownership of, in the aggregate,in one or more
transactions, a number of Voting Shares of the Company equal to 1% or more of
the Voting Shares of the Company then outstanding and (B) such Person, together
with all Affiliates and Associates of such Person, shall Beneficially Own 15% or
more of the Voting Shares of the Company then outstanding. In calculating the
percentage of the outstanding Voting Shares that are Beneficially Owned by a
Person for purposes of this subsection (aa), Voting Shares that are Beneficially
Owned by such Person shall be deemed outstanding, and Voting Shares that are not
Beneficially Owned by such Person and that are subject to issuance upon the
exercise or conversion of outstanding conversion rights, exchange rights, rights
(other than Rights), warrants or options shall not be deemed outstanding. Any
determination made by the Independent Directors as to whether any Person is or
is not a 15% Stockholder shall be conclusive and binding upon all holders of
Rights.
Section 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints
the Rights Agent to act as agent for the Company and the holders of Rights in
accordance with the terms and conditions hereof, and the Rights Agent hereby
accepts such appointment. The Company may from time to time appoint such
co-Rights Agents as it may deem necessary or desirable.
Section 3. ISSUANCE OF RIGHT CERTIFICATES.
(a) "Distribution Date" shall mean the date, after the date hereof,
that is the earliest of (i) the tenth Business Day (or such later day as shall
be designated by a majority, but not less than three, of the Independent
Directors) following the date of the commencement of, or the first public
announcement of the intent of any Person (other than the Company, any wholly
owned Subsidiary of the Company, any employee benefit plan of the Company or of
any Subsidiary of the Company, or any Person holding Common Shares for or
pursuant to the terms of any such employee benefit plan) to commence, a tender
offer or exchange offer (other than a Fair Offer, as defined in Section 25
hereof), the consummation of which would cause any Person to become a 15%
Stockholder, (ii) the date of the first Section 11(a) (ii) Event or (iii) the
date of the first Section 13(a) Event.
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(b) Until the Distribution Date, (i) the Rights shall be represented
by certificates for Common Shares (all of which certificates for Common Shares
shall be deemed to be Right Certificates) and not by separate Right
Certificates, (ii) the record holder of the Common Shares represented by each of
such certificates shall be the record holder of the Rights represented thereby
and (iii) the Rights shall be transferable only in connection with the transfer
of Common Shares. Until the earliest of the Distribution Date, the Redemption
Date or the Expiration Date, the surrender for transfer of such certificates for
Common Shares shall also constitute the surrender for transfer of the Rights
represented thereby.
(c) As soon as practicable after the Distribution Date, and after
notification by the Company, the Rights Agent shall send by first-class,
postage-prepaid mail to each record holder of Common Shares, as of the Close of
Business on the Distribution Date, at the address of such holder shown on the
records of the Company, a Right Certificate substantially in the form of Exhibit
B hereto representing one Right for each Common Share so held. From and after
the Distribution Date, the Rights shall be represented solely by such Right
Certificates and may only be transferred by the transfer of such Right
Certificates, and the holders of such Right Certificates, as listed in the
records of the Company or any transfer agent or registrar for such Rights, shall
be the record holders of such Rights.
(d) As soon as practicable after the Record Date, the Company shall
send a copy of a Summary of the Rights in substantially the form attached hereto
as Exhibit C by first-class, postage-prepaid mail to each record holder of
Common Shares as of the Close of Business on the Record Date at the address of
such holder shown on the records of the Company.
(e) Certificates for Common Shares issued at any time after the
Record Date and prior to the earliest of the Distribution Date, the Redemption
Date or the Expiration Date, shall have impressed on, printed on, written on or
otherwise affixed to them the following legend:
This certificate also represents Rights that entitle the holder
hereof to certain rights as set forth in the Rights Agreement
dated as of September 19, 1997 by and between the
Corporation and American Stock Transfer and Trust Company, as
Rights Agent (the "Rights Agreement"), the terms and conditions
of which are hereby incorporated herein by reference and a copy
of which is on
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file at the principal executive offices of the Corporation. Under
certain circumstances specified in the Rights Agreement, such Rights
will be represented by separate certificates and will no longer be
represented by this certificate. Under certain circumstances
specified in the Rights Agreement, Rights beneficially owned by
certain persons may become null and void. The Corporation will mail
to the record holder of this certificate a copy of the Rights
Agreement without charge promptly following receipt of a written
request therefor.
(f) Certificates for Common Shares issued at any time on or after the
Distribution Date and prior to the earlier of the Redemption Date or the
Expiration Date shall have impressed on, printed on, written on or otherwise
affixed to them the following legend:
This certificate does not represent any Right issued pursuant to
the terms of the Rights Agreement dated as of September 19, 1997
by and between the Corporation and American Stock Transfer
and Trust Company, as Rights Agent.
(g) In the event that at any time on or after the earlier of the date
of the first Section 11(a)(ii) Event or the date of the first Section 13(a)
Event and prior to the earlier of the Redemption Date or the Expiration Date,
the Company shall issue any Common Shares pursuant to the exercise of conversion
rights, exchange rights, rights (other than Rights), warrants or options that
shall have been issued or granted prior to the earlier of the date of the first
Section 1l(a)(ii) Event or the date of the first Section 13(a) Event, then,
unless the Board of Directors of the Company shall have provided otherwise at
the time of the issuance or grant of such conversion rights, exchange rights,
rights (other than Rights), warrants or options, the Rights Agent shall, as soon
as practicable after the date of such event, send by first-class,
postage-prepaid mail to the record holder of such Common Shares, at the address
of such holder as shown on the records of the Company, a Right Certificate
substantially in the form of Exhibit B hereto representing one Right for each
Common Share so issued.
(h) Notwithstanding the foregoing provisions of this Section 3, the
Rights Agent shall not send any Right Certificate to any 15% Stockholder or any
of its Affiliates or Associates or to any Person if the Rights held by such
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Person are Beneficially Owned by a 15% Stockholder or any of its Affiliates or
Associates. Any determination made by a majority of the Independent Directors
as to whether any Common Shares are or were Beneficially Owned at any time by a
15% Stockholder or an Affiliate or Associate of a 15% Stockholder shall be
conclusive and binding upon all holders of Rights.
Section 4. FORM OF RIGHT CERTIFICATES. The Right Certificates and
the form of assignment, including certificate, and the form of election to
purchase, including certificate, printed on the reverse thereof, when, as and if
issued, shall be substantially the same as Exhibit B hereto, and may have such
marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange upon which the
Rights or the securities of the Company issuable upon exercise of the Rights may
from time to time be listed, or to conform to usage. Subject to Section 22
hereof, Right Certificates, whenever issued, that are issued in respect of
Common Shares that were issued and outstanding as of the Close of Business on
the Distribution Date, shall be dated as of the Distribution Date.
Section 5. COUNTERSIGNATURE AND REGISTRATION.
(a) The Right Certificates shall be executed on behalf of the Company
by its Chairman of the Board, its Vice Chairman of the Board, its President or
any Vice President, either manually or by facsimile signature, and may have
affixed thereto the Company's seal or a facsimile thereof attested by its
Secretary or any Assistant Secretary, either manually or by facsimile signature.
The Right Certificates shall be manually countersigned by the Rights Agent and
shall not be valid for any purpose unless so countersigned. In case any officer
of the Company who shall have signed any of the Right Certificates shall cease
to be such officer of the Company before countersignature by the Rights Agent
and issuance and delivery by the Company, such Right Certificates may
nevertheless be countersigned by the Rights Agent and issued and delivered by
the Company with the same force and effect as though the person who signed such
Right Certificates had not ceased to be such officer of the Company. Any Right
Certificate may be signed on behalf of the Company by any person who at the
actual date of such execution shall be a proper officer of the Company to sign
such Right Certificate, even though such person was not such an officer at the
date of the execution of this Agreement.
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(b) Following the Distribution Date, the Rights Agent shall keep or
cause to be kept at its principal offices books for registration and transfer of
the Right Certificates issued hereunder. Such books shall show the names and
addresses of the respective holders of Right Certificates, the number of Rights
represented on its face by each Right Certificate and the date of each Right
Certificate.
Section 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT
CERTIFICATES: MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES.
(a) Subject to the provisions of Sections 6(c), 7(d) and 14 hereof,
at any time after the Close of Business on the Distribution Date, and so long as
the Rights represented thereby remain outstanding, any one or more Right
Certificates may be transferred, split up, combined or exchanged for one or more
Right Certificates representing the same aggregate number of Rights as the Right
Certificates surrendered. Any registered holder desiring to transfer, split up,
combine or exchange one or more Right Certificates shall make such request in
writing delivered to the Rights Agent, and shall surrender the Right
Certificates to be transferred, split up, combined or exchanged at the office of
the Rights Agent with the form of assignment, including certificate, on the
reverse side thereof completed and duly executed, with signature guaranteed.
Thereupon, the Rights Agent shall countersign and deliver to the person entitled
thereto one or more Right Certificates, as so requested. The Company may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer, split up, combination or
exchange of Right Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Right Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them and, at the Company's request,
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
such Right Certificate if mutilated, the Company shall issue and deliver to the
Rights Agent for delivery to the record holder of such Right Certificate a new
Right Certificate of like tenor in lieu of such lost, stolen, destroyed or
mutilated Right Certificate.
(c) Notwithstanding anything to the contrary in this Section 6, the
Rights Agent shall not countersign and deliver a Right Certificate to any Person
if such Right
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Certificate represents, or would represent when held by such Person, Rights that
had become or would become null and void pursuant to Section 7(d) hereof.
Section 7. EXERCISE OF RIGHTS.
(a) Until the Distribution Date, no Right may be exercised.
(b) Subject to Sections 7(d) and (g) hereof and the other provisions
of this Agreement, at any time after the Close of Business on the Distribution
Date and prior to the Close of Business on the earlier of the Redemption Date or
the Expiration Date, the registered holder of any Right Certificate may exercise
the Rights represented thereby in whole or in part upon surrender of such Right
Certificate, with the form of election to purchase, including certificate, on
the reverse side thereof completed and duly executed, with signature guaranteed,
to the Rights Agent at the office of the Rights Agent at 40 Wall Street, 46th
Floor, New York, New York 10005, together with payment of the Exercise Price
for each Right exercised. Upon the exercise of an exercisable Right and payment
of the Exercise Price in accordance with the provisions of this Agreement, the
holder of such Right shall be entitled to receive, subject to adjustment as
provided herein, one one-hundredth of a Preferred Share (or, following the
occurrence of a Section 11(a)(ii) Event or a Section 13(a) Event, Common Shares
and/or other securities).
(c) The Exercise Price for the exercise of each Right shall initially
be $33.33 and shall be payable in lawful money of the United States of America
in accordance with Section 7(f) hereof. The Exercise Price and the number of
Preferred Shares (or, following the occurrence of a Section ll(a)(ii) Event or a
Section 13(a) Event, Common Shares and/or other securities) to be acquired upon
exercise of a Right shall be subject to adjustment from time to time as provided
in Sections 7(e), 11 and 13 hereof and the other provisions of this Agreement.
(d) Notwithstanding anything in this Agreement to the contrary, from
and after the earlier of the date of the first Section 11(a)(ii) Event or the
date of the first Section 13(a) Event, any Rights that are or were Beneficially
Owned by a 15% Stockholder or any Affiliate or Associate of a 15% Stockholder at
any time on or after the Distribution Date shall be null and void, and for all
purposes of this Agreement such Rights shall thereafter be deemed not to be
outstanding, and any holder of such Rights (whether or not such holder is a 15%
Stockholder or an Affiliate or Associate of a 15% Stockholder) shall
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thereafter have no right to exercise or exchange such Rights.
(e) Prior to the Distribution Date, if a majority, but not less than
three, of the Independent Directors shall have determined that such action
adequately protects the interests of the holders of Rights, the Company may, in
its discretion, substitute for all or any portion of the Preferred Shares that
would otherwise be issuable (after the Close of Business on the Distribution
Date) upon the exercise of each Right and payment of the Exercise Price, (i)
cash, (ii) other equity securities of the Company, (iii) debt securities of the
Company, (iv) other property or (v) any combination of the foregoing, in each
case having an aggregate Current Market Price equal to the aggregate Current
Market Price of the Preferred Shares for which substitution is made. Subject to
Section 7(d) hereof, in the event that the Company takes any action pursuant to
this Section 7(e), such action shall apply uniformly to all outstanding Rights.
(f) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase, including certificate, completed
and duly executed, with signature guaranteed, accompanied by payment of the
Exercise Price for each Right to be exercised and an amount equal to any
applicable transfer tax required to be paid by the holder of such Right
Certificate in accordance with Section 9 hereof by certified check or cashier's
check payable to the order of the Company, the Rights Agent shall thereupon
promptly (i) requisition from the transfer agent of the Preferred Shares (or,
following the occurrence of a Section 11(a)(ii) Event or a Section 13(a) Event,
Common Shares and/or securities), certificates for the number of Preferred
Shares (or such other securities) to be purchased, and the Company hereby
irrevocably authorizes such transfer agent to comply with all such requests,
and/or, as provided in Section 14 hereof, requisition from the depositary agent
described therein depositary receipts representing such number of one-hundredths
of a Preferred Share (or such other securities) as are to be purchased (in which
case certificates for the Preferred Shares (or such other securities)
represented by such receipts shall be deposited by the transfer agent with such
depositary agent) and the Company hereby directs such depositary agent to comply
with such request, (ii) when appropriate, requisition from the Company the
amount of cash to be paid in lieu of issuance of fractional Preferred Shares (or
such other securities) in accordance with Section 14 hereof, (iii) after receipt
of such certificates, depositary receipts or cash, cause the same to be
delivered to or upon the order of the registered holder of such Right
Certificate, registered in such name or
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names as may be designated by such holder and (iv) when appropriate, after
receipt thereof, deliver such cash to or upon the order of the registered holder
of such Right Certificate.
(g) Notwithstanding the foregoing provisions of this Section 7, the
exercisability of the Rights shall be suspended for such period as shall
reasonably be necessary for the Company to register under the Securities Act and
any applicable securities law of any jurisdiction the Preferred Shares to be
issued pursuant to the exercise of the Rights; provided, however, that nothing
contained in this Section 7 shall relieve the Company of its obligations under
Section 9(c) hereof.
(h) In case the registered holder of any Right Certificate shall
exercise less than all of the Rights represented thereby, a new Right
Certificate representing Rights equivalent to the Rights remaining unexercised
shall be issued by the Rights Agent to the registered holder of such Right
Certificate or to such holder's duly authorized assigns, subject to the
provisions of Section 14 hereof.
Section 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES. All
Right Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in canceled form,
or, if surrendered to the Rights Agent, shall be canceled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
this Agreement. The Company shall deliver to the Rights Agent for cancellation
and retirement, and the Rights Agent shall so cancel and retire, any other Right
Certificate purchased or acquired by the Company otherwise than upon the
exercise thereof. The Rights Agent shall deliver all canceled Right
Certificates to the Company or shall, at the written request of the Company,
destroy such canceled Right Certificates, and in such case shall deliver a
certificate of destruction thereof to the Company.
Section 9. RESERVATION AND AVAILABILITY OF CAPITAL STOCK.
(a) Subject to Section 7(e) hereof, the Company shall cause to be
reserved and kept available out of its authorized and unissued equity securities
(or out of its authorized and issued equity securities held in its treasury),
the number of such equity securities that will from time to time be sufficient
to permit the exercise in full of all outstanding Rights.
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(b) In the event that any securities issuable upon exercise of the
Rights are listed on any national securities exchange, the Company shall use its
best efforts, from and after such time as the Rights become exercisable, to
cause all such securities issued or reserved for such issuance to be listed on
such exchange upon official notice of issuance upon such exercise.
(c) If necessary to permit the issuance of securities upon exercise
of the Rights, the Company shall use its best efforts, from and after the
Distribution Date, to register such securities under the Securities Act and any
applicable securities laws and to keep such registration effective until the
earlier of the Redemption Date or the Expiration Date.
(d) The Company shall take all such action as may be necessary to
ensure that all securities delivered upon exercise of the Rights shall, at the
time of delivery of the certificates for such securities (subject to payment of
the Exercise Price), be duly and validly authorized and issued and fully paid
and nonassessable securities.
(e) The Company shall pay when due and payable any and all federal
and state transfer taxes and charges that may be payable in respect of the
issuance or delivery of the Right Certificates or of any securities upon the
exercise of Rights. The Company shall not, however, be required to pay any
transfer tax that may be payable in respect of any transfer or delivery of a
Right Certificate to a Person other than, or the issuance or delivery of a
certificate for securities in respect of a name other than that of, the
registered holder of the Right Certificate representing Rights surrendered for
exercise, or to issue or deliver any certificate for securities upon the
exercise of any Right until any such tax shall have been paid (any such tax
being payable by the holder of such Right Certificate at the time of surrender)
or until it has been established to the Company's satisfaction that no such tax
is due.
(f) With respect to the Common Shares and/or other securities
issuable pursuant to Section 11(a)(ii) and (iii) hereof, the foregoing covenants
shall be applicable only upon and following the occurrence of a Section
11(a)(ii) Event.
Section 10. SECURITIES RECORD DATE. Each person in whose name any
certificate for securities of the Company is issued upon the exercise of Rights
shall for all purposes be deemed to have become the holder of record of the
securities represented thereby on, and such certificate shall be dated, the date
upon which the Right Certificate
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representing such Rights was duly surrendered and payment of the Exercise Price
(and any applicable transfer taxes) was made; provided, however, that if the
date of such surrender and payment is a date upon which the securities transfer
books of the Company are closed, such person shall be deemed to have become the
record holder of such securities on, and such certificate shall be dated, the
next succeeding Business Day on which the securities transfer books of the
Company are open.
Section 11. ADJUSTMENT OF EXERCISE PRICE, NUMBER OF SHARES ISSUABLE
UPON EXERCISE OF RIGHTS OR NUMBER OF RIGHTS. The Exercise Price, the number and
kind of securities that may be purchased upon exercise of a Right and the number
of Rights outstanding are subject to adjustment from time to time as provided in
this Section 11.
(a)(i) In the event that the Company shall at any time after
the Close of Business on the Record Date and prior to the Close of Business
on the earlier of the Redemption Date or the Expiration Date (A) declare or
pay any dividend on the Preferred Shares payable in Preferred Shares or
Voting Shares, (B) subdivide the outstanding Preferred Shares, (C) combine
the outstanding Preferred Shares into a smaller number of Preferred Shares
or (D) issue Preferred Shares or Voting Shares in a reclassification of the
Preferred Shares (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or surviving
corporation), then, and upon each such event, the number and kind of
Preferred Shares or other securities issuable upon the exercise of a Right
on the date of such event shall be proportionately adjusted so that the
holder of any Right exercised on or after such date shall be entitled to
receive, upon the exercise thereof and payment of the Exercise Price, the
aggregate number and kind of Preferred Shares or other securities or other
property, as the case may be, that, if such Right had been exercised
immediately prior to such date and at a time when such Right was
exercisable and the transfer books of the Company were open, such holder
would have owned upon such exercise and would have been entitled to receive
by virtue of such dividend, subdivision, combination or reclassification.
If an event occurs that would require an adjustment under both this Section
11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this
Section 11(a)(i) shall be in addition to, and shall be made prior to, any
adjustment required pursuant to Section 11(a)(ii) hereof.
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(ii) In the event (a "Section 11(a)(ii) Event") that a 15%
Ownership Date shall have occurred and neither the Redemption Date nor the
Expiration Date shall have occurred prior to the tenth Business Day
following such 15% Ownership Date, then, and upon each such event, proper
provision shall be made so that except as provided in Section 7(d) hereof,
each holder of a Right shall thereafter have the right to receive, upon the
exercise thereof in accordance with the terms of this Agreement and payment
of the then current Exercise Price, in lieu of the securities or other
property otherwise purchasable upon such exercise, such number of Common
Shares of the Company as shall equal the result obtained by multiplying the
then current Exercise Price by the then number of one-hundredths of a
Preferred Share for which a Right was exercisable (or, if the Distribution
Date shall not have occurred prior to the date of such Section 11(a)(ii)
Event, the number of one-hundredths of a Preferred Share for which a Right
would have been exercisable if the Distribution Date had occurred on the
Business Day immediately preceding the date of such Section 11(a)(ii)
Event) immediately prior to such Section 11(a)(ii) Event, and dividing that
product by 50% of the Current Market Price (determined pursuant to Section
11(d) hereof) of a Common Share on the date of occurrence of the relevant
Section 11(a)(ii) Event (such number of shares being hereinafter referred
to as the "Adjustment Shares"). Successive adjustments shall be made
pursuant to this paragraph each time a Section 11(a)(ii) Event occurs.
(iii) In the event that on the date of a Section 11(a)(ii)
Event the aggregate number of Common Shares that are authorized by the
Company's Certificate of Incorporation but not outstanding or reserved for
issuance for purposes other than upon exercise of the Rights is less than
the aggregate number of Adjustment Shares thereafter issuable upon the
exercise in full of the Rights in accordance with Section 11(a)(ii) hereof
(the excess of such number of Adjustment Shares over and above such number
of Common Shares being hereinafter referred to as the "Unavailable
Adjustment Shares"), then, and upon each such event, the Company shall
substitute for the pro rata portion of the Unavailable Adjustment Shares
that would otherwise be issuable thereafter upon the exercise of each Right
and payment of the Exercise Price, (A) cash, (B) other equity securities of
the Company (including, without limitation, shares of preferred stock of
the Company or units of such shares having the same Current Market Price as
one Common Share (a "Common Share
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Equivalent")), (C) debt securities of the Company, (D) other property or
(E) any combination of the foregoing, in each case having an aggregate
Current Market Price equal to the aggregate Current Market Price of the
Unavailable Adjustment Shares for which substitution is made. Subject to
Section 7(d) hereof, in the event that the Company takes any action
pursuant to this Section 11(a)(iii), such action shall apply uniformly to
all outstanding Rights.
(b) In the event that the Company shall, at any time after the Close
of Business on the Record Date and prior to the Close of Business on the earlier
of the Redemption Date or the Expiration Date, fix a record date prior to the
earlier of the Redemption Date or the Expiration Date for the issuance of
rights, options or warrants to all holders of Preferred Shares entitling them
initially to subscribe for or purchase Preferred Shares (or shares having the
same rights, privileges and preferences as the Preferred Shares ("Preferred
Share Equivalents")) or securities convertible into Preferred Shares or
Preferred Share Equivalents, at a price per Preferred Share or Preferred Share
Equivalent (or having a conversion price per share, if a security convertible
into Preferred Shares or Preferred Share Equivalents) less than the Current
Market Price per Preferred Share on such record date, then, and upon each such
event, the Exercise Price to be in effect after such record date shall be
determined by multiplying the Exercise Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be equal to the sum of
the number of Preferred Shares outstanding on such record date plus the number
of Preferred Shares that the aggregate offering price of the total number of
Preferred Shares and/or Preferred Share Equivalents to be so offered (and/or the
aggregate initial conversion price of the convertible securities to be so
offered) would purchase at such Current Market Price, and the denominator of
which shall be equal to the number of Preferred Shares outstanding on such
record date plus the number of additional Preferred Shares and/or Preferred
Share Equivalents to be offered for subscription or purchase (or into which the
convertible securities to be so offered are initially convertible); provided,
however, that if such rights, options or warrants are not exercisable
immediately upon issuance but become exercisable only upon the occurrence of a
specified event or the passage of a specified period of time, then the
adjustment to the Exercise Price shall be made and become effective only upon
the occurrence of such event or such passage of time, and such adjustment shall
be made as if the record date for the issuance of such rights, options or
warrants had been the Business Day immediately preceding the date upon which
such rights, options or warrants became
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exercisable. Preferred Shares owned by or held for the account of the Company
shall not be deemed outstanding for the purpose of any such computation. Such
adjustment to the Exercise Price shall be made successively whenever such a
record date is fixed, and in the event that such rights or warrants are not so
issued, the Exercise Price shall be adjusted to be the Exercise Price that would
then be in effect if such record date had not been fixed.
(c) In the event that the Company shall, at any time after the Close
of Business on the Record Date and prior to the Close of Business on the earlier
of the Redemption Date or the Expiration Date, fix a record date for the making
of a distribution to all holders of the Preferred Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the surviving corporation) of securities or assets (other than a
distribution of securities for which an adjustment is required under Section
11(a)(i) or (b) hereof or a regular quarterly cash dividend), then the Exercise
Price to be in effect after such record date shall be determined by multiplying
the Exercise Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be equal to the excess of the Current
Market Price per Preferred Share on such record date over and above the fair
market value of the portion of the securities or assets to be so distributed
with respect to one Preferred Share, and the denominator of which shall be equal
to such Current Market Price per Preferred Share. Such adjustments shall be
made successively whenever such a record date is fixed, and in the event that
such a distribution is not so made, the Exercise Price shall be adjusted to be
the Exercise Price that would then be in effect if such record date had not been
fixed.
(d) For the purpose of any computation under this Section 11, if the
Preferred Shares are not publicly held or traded, the "Current Market Price" per
Preferred Share shall be conclusively deemed to be the Current Market Price per
Common Share multiplied by 100.
(e) No adjustment in the Exercise Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in the Exercise
Price; provided, however, that any adjustments that by reason of this Section
11(e) are not required to be made shall be cumulated and taken into account in
any subsequent adjustment. All calculations under this Section 11 shall be made
to the nearest cent or to the nearest one-thousandth of a Common Share or other
share or one-millionth of a Preferred Share, as the case may be.
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(f) If, as a result of an adjustment made pursuant to Section 11(a)
hereof, the holder of any Right thereafter exercised shall become entitled to
receive any securities of the Company other than Preferred Shares, the number of
such other securities so receivable upon exercise of any Right shall be subject
to adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to Preferred Shares contained in this
Section 11, and the other provisions of this Agreement with respect to Preferred
Shares shall apply on like terms to any such other securities.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Exercise Price hereunder shall represent the right to
purchase, at the adjusted Exercise Price, the number of one-hundredths of a
Preferred Share purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided
in Section 11(i) below, upon each adjustment of the Exercise Price as a result
of the calculations made in Sections 11(b) and (c) hereof, each Right
outstanding immediately prior to the making of such adjustment shall thereafter
represent the right to purchase, at the adjusted Exercise Price, that number of
one-hundredths of a Preferred Share (calculated to the nearest one-millionth of
a Preferred Share) obtained by multiplying (i) the number of one-hundredths of a
Preferred Share purchasable upon the exercise of one Right immediately prior to
such adjustment of the Exercise Price by (ii) the Exercise Price in effect
immediately prior to such adjustment, and dividing the product so obtained by
the Exercise Price in effect immediately after such adjustment.
(i) The Company may elect, on or after the date of any adjustment of
the Exercise Price, to adjust the number of Rights instead of making any
adjustment in the number of Preferred Shares purchasable upon the exercise of a
Right. Each of the Rights outstanding after such adjustment of the number of
Rights shall be exercisable for the number of one-hundredths of a Preferred
Share for which a Right was exercisable immediately prior to such adjustment.
Each Right held of record prior to such adjustment of the number of Rights shall
become that number of Rights (calculated to the nearest one one-thousandth of a
Right) obtained by dividing the Exercise Price in effect immediately prior to
the adjustment of the Exercise Price by the Exercise Price in effect immediately
after such adjustment of the Exercise Price. The Company shall make a
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public announcement of its election to adjust the number of Rights pursuant to
this Section 11(i), indicating the record date for the adjustment and, if known
at the time, the amount of the adjustment to be made. Such record date may be
the date on which the Exercise Price is adjusted or any day thereafter, but, if
separate Right Certificates have been issued, it shall be at least 10 days after
the date of such public announcement. If separate Right Certificates have been
issued, upon each adjustment of the number of Rights pursuant to this Section
11(i), the Company shall, as promptly as practicable, cause to be distributed to
holders of record of Right Certificates on such record date Right Certificates
representing, subject to Section 14 hereof, the additional Rights to which such
holders shall be entitled as a result of such adjustment or, at the option of
the Company, cause to be distributed to such holders of record in substitution
and replacement for the Right Certificates held by such holders prior to the
date of such adjustment, and upon surrender thereof if required by the Company,
new Right Certificates representing all the Rights to which such holders shall
be entitled after such adjustment. Right Certificates to be so distributed
shall be issued, executed and countersigned in the manner provided for herein
(and may bear, at the option of the Company, the adjusted Exercise Price) and
shall be registered in the names of the holders of record of Right Certificates
on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Exercise Price or
the number of one-hundredths of a Preferred Share issuable upon the exercise of
one Right, the Right Certificates theretofore and thereafter issued may continue
to express the Exercise Price per one one-hundredth of a Preferred Share and the
number of Preferred Shares issuable upon the exercise of one Right that were
expressed in the initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Exercise Price below one one-hundredth of the then par value, if any, of the
Preferred Shares issuable upon exercise of the Rights, the Company shall take
any corporate action that may, in the advice or opinion of its counsel, be
necessary in order that the Company may validly and legally issue fully paid and
nonassessable one one-hundredths of a Preferred Share at such adjusted Exercise
Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Exercise Price be made effective as of a record date for a
specified event, the Company may elect to defer, until the occurrence of such
event, the issuance to the holder of any Right exercised
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after such record date of the number of one-hundredths of a Preferred Share and
other capital stock or securities of the Company, if any, issuable upon such
exercise over and above the number of one-hundredths of a Preferred Share and
other capital stock or securities of the Company, if any, issuable upon such
exercise on the basis of the Exercise Price in effect prior to such adjustment;
provided, however, that the Company shall deliver to such holder a due bill or
other appropriate instrument representing such holder's right to receive such
additional shares upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such further adjustments in the number of
one-hundredths of a Preferred Share that may be purchased upon exercise of one
Right, and such further adjustments in the Exercise Price, in addition to those
adjustments expressly required by this Section 11, as and to the extent that it
in its sole discretion shall determine to be advisable in order that any (i)
consolidation or subdivision of the Preferred Shares, (ii) issuance wholly for
cash of any Preferred Shares at less than the Current Market Price thereof,
(iii) issuance wholly for cash of Preferred Shares or securities that by their
terms are convertible into or exchangeable for Preferred Shares, (iv) dividends
on Preferred Shares payable in Preferred Shares or (v) issuance of rights,
options or warrants referred to Section 11(b) hereof, hereafter made by the
Company to holders of its Preferred Shares shall not be taxable to such
stockholders.
(n) In the event that the Company shall, at any time after the Close
of Business on the Record Date and prior to the Close of Business on the
earliest of the date of the first Section 11(a)(ii) Event, the date of the first
Section 13(a) Event, the Redemption Date or the Expiration Date, (i) pay any
dividend on the Common Shares payable in Common Shares, (ii) subdivide the
outstanding Common Shares, (iii) combine the outstanding Common Shares into a
smaller number of Common Shares or (iv) issue Common Shares in a
reclassification of the Common Shares (including any such reclassification in
connection with a consolidation or merger in which the Company is the continuing
or surviving corporation), then, and upon each such event, the Exercise Price to
be in effect after such event shall be determined by multiplying the Exercise
Price in effect immediately prior to such event by a fraction, the numerator of
which shall be equal to the number of Common Shares outstanding immediately
prior to such event and the denominator of which shall be equal to the number of
Common Shares outstanding immediately after such event. Successive adjustments
shall be made pursuant to this Section 11(n) each time such a
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dividend is paid or such a subdivision, combination or reclassification is
effected. If an event occurs that would require an adjustment under both this
Section 11(n) and Section 11(a)(ii) hereof, the adjustment provided for in this
Section 11(n) shall be in addition to, and shall be made prior to, any
adjustment required pursuant to Section 11(a)(ii) hereof.
Section 12. CERTIFICATE OF ADJUSTED EXERCISE PRICE OR NUMBER OF
SHARES ISSUABLE UPON EXERCISE OF RIGHTS. Whenever an adjustment is made as
provided in Section 11 hereof, the Company shall promptly (a) prepare a
certificate setting forth such adjustment and a brief statement of the facts
giving rise to such adjustment, (b) file with the Rights Agent and with each
transfer agent for the securities issuable upon exercise of the Rights a copy of
such certificate and (c) mail a brief summary thereof to each holder of Rights
in accordance with Section 26 hereof. Notwithstanding the foregoing sentence,
the failure of the Company to make such certification or to give such notice
shall not affect the validity or the force and effect of such adjustment. Any
adjustment to be made pursuant to Section 11 or 13 hereof shall be effective as
of the date of the event giving rise to such adjustment.
Section 13. CONSOLIDATION, MERGER, OR SALE OR TRANSFER OF ASSETS OR
EARNING POWER.
(a) In the event (a "Section 13(a) Event") that, at any time on or
after the 15% Ownership Date and prior to the earlier of the Redemption Date or
the Expiration Date, (1) the Company shall, directly or indirectly, consolidate
with or merge with and into any other Person and the Company shall not be the
continuing or surviving corporation in such consolidation or merger, (2) any
Person shall, directly or indirectly, consolidate with or merge with and into
the Company and the Company shall be the continuing or surviving corporation in
such merger and, in connection with such merger, all or part of the Common
Shares shall be changed into or exchanged for stock or other securities of any
Person or cash or any other property, or (3) the Company and/or any one or more
of its Subsidiaries shall directly or indirectly, sell or otherwise transfer, in
one or more transactions (other than transactions in the ordinary course of
business), assets or earning power aggregating more than 50% of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to any
Person or Persons other than the Company or one or more of its wholly owned
Subsidiaries (such Persons, together with the Persons described in clauses (1)
and (2) above shall be collectively referred to in this Section 13 as the
"Surviving Person"),
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then, and in each such case, proper provision shall be made so that:
(i) except as provided in Section 7(d) hereof, each holder of a
Right shall thereafter have the right to receive, upon the exercise thereof
in accordance with the terms of this Agreement and payment of the then
current Exercise Price, in lieu of the securities or other property
otherwise purchasable upon such exercise, such number of validly authorized
and issued, fully paid and nonassessable Common Shares of the Surviving
Person as shall be equal to a fraction, the numerator of which is the
product of the then current Exercise Price multiplied by the number of
one-hundredths of a Preferred Share purchasable upon the exercise of one
Right immediately prior to the first Section 13(a) Event (or, if the
Distribution Date shall not have occurred prior to the date of such Section
13(a) Event, the number of one-hundredths of a Preferred Share that would
have been so purchasable if the Distribution Date had occurred on the
Business Day immediately preceding the date of such Section 13(a) Event,
or, if a Section 11(a)(ii) Event has occurred prior to such Section 13(a)
Event, the product of the number of one-hundredths of a Preferred Share
purchasable upon the exercise of a Right (or, if the Distribution Date
shall not have occurred prior to the date of such Section 11(a)(ii) Event,
the number of one-hundredths of a Preferred Share that would have been so
purchasable if the Distribution Date had occurred on the Business Day
immediately preceding the date of such Section 11(a)(ii) Event) immediately
prior to such Section 11(a)(ii) Event, multiplied by the Exercise Price in
effect immediately prior to such Section 11(a)(ii) Event), and the
denominator of which is 50% of the Current Market Price per Common Share of
the Surviving Person on the date of consummation of such Section 13(a)
Event;
(ii) the Surviving Person shall thereafter be liable for and
shall assume, by virtue of such consolidation, merger, sale or transfer,
all the obligations and duties of the Company pursuant to this Agreement;
(iii) the term, "Company," shall thereafter be deemed to refer
to the Surviving Person; and
(iv) the Surviving Person shall take such steps (including,
but not limited to, the reservation of a sufficient number of its Common
Shares in accordance with Section 9 hereof) in connection with
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such consummation as may be necessary to ensure that the provisions hereof
shall thereafter be applicable to its Common Shares thereafter deliverable
upon the exercise of Rights.
(b) Notwithstanding the foregoing, if the Section 13(a) Event is the
sale or transfer in one or more transactions of assets or earning power
aggregating more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole), but less than 100% thereof, then each Person
acquiring all or a portion thereof shall assume the obligations of the Company
as to a fraction of each of the Rights equal to the fraction of the assets of
the Company and its Subsidiaries (taken as a whole) acquired by such Person, and
the obligations of the Company as to the remaining fraction of each of the
Rights shall continue to be the obligations of the Company.
(c) The Company shall not consummate a Section 13(a) Event unless
prior thereto the Company and the Surviving Person shall have executed and
delivered to the Rights Agent a supplemental agreement confirming that such
Surviving Person shall, upon consummation of such Section 13(a) Event, assume
this Agreement in accordance with Section 13 hereof, that all rights of first
refusal or preemptive rights in respect of the issuance of Common Shares of such
Surviving Person upon exercise of outstanding Rights have been waived and that
such Section 13(a) Event shall not result in a default by such Surviving Person
under this Agreement, and further providing that, as soon as practicable after
the date of consummation of such Section 13(a) Event, such Surviving Person
shall:
(i) prepare and file a registration statement under the
Securities Act with respect to the Rights and the securities purchasable
upon exercise of the Rights on an appropriate form, use its best efforts to
cause such registration statement to become effective as soon as
practicable after such filing, use its best efforts to cause such
registration statement to remain effective (with a prospectus at all times
meeting the requirements of the Securities Act) until the Expiration Date,
and similarly comply with all applicable state securities laws;
(ii) use its best efforts to list (or continue the listing of)
the Rights and the Common Shares of the Surviving Person purchasable upon
exercise of the Rights on a national securities exchange, or use its best
efforts to cause the Rights and such Common Shares to meet the eligibility
requirements for quotation on NASDAQ; and
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(iii) deliver to holders of the Rights historical financial
statements for such Surviving Person that comply in all respects with the
requirements for registration on Form 10 (or any successor form) under the
Exchange Act.
(d) In the event that at any time after the occurrence of a Section
11(a)(ii) Event some or all of the Rights shall not have been exercised pursuant
to Section 11 hereof prior to the date of a Section 13(a) Event, such Rights
shall thereafter be exercisable only in the manner described in Section 13(a)
hereof. In the event that a Section 11(a)(ii) Event occurs on or after the date
of a Section 13(a) Event, Rights shall not be exercisable pursuant to Section 11
hereof but shall instead be exercisable pursuant to, and only pursuant to, this
Section 13.
(e) The provisions of this Section 13 shall apply to each successive
merger, consolidation, sale or other transfer constituting a Section 13(a)
Event.
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions of Rights or
to distribute Right Certificates that represent fractional Rights. If the
Company shall determine not to issue such fractional Rights, the Company shall
pay to the registered holders of the Right Certificates with respect to which
such fractional Rights would otherwise be issuable, at the time such fractional
Rights would otherwise have been issued as provided herein, an amount in cash
equal to the same fraction of the Current Market Price of a whole Right on the
Business Day immediately prior to the date upon which such fractional Rights
would otherwise have been issuable.
(b) The Company shall not be required to issue fractions of Common
Shares or Preferred Shares (other than fractions that are integral multiples of
one one-hundredth of a Preferred Share) upon exercise of Rights, or to
distribute certificates that represent fractional Common Shares or Preferred
Shares (other than fractions that are integral multiples of one one-hundredth of
a Preferred Share). Fractions of Preferred Shares in integral multiples of one
one-hundredth of a Preferred Share may, at the election of the Company, be
represented by depositary receipts, pursuant to an appropriate agreement between
the Company and a depositary selected by it, provided that such agreement shall
provide that the holders of such depositary receipts shall have all the rights,
privileges and
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preferences to which they are entitled as beneficial owners of Preferred Shares.
If the Company shall determine not to issue fractional Common Shares or
Preferred Shares (or depositary receipts in lieu of Preferred Shares), the
Company shall pay to the registered holders of Right Certificates with respect
to which such fractional Common Shares or Preferred Shares would otherwise be
issuable, at the time such Rights are exercised as provided herein, an amount in
cash equal to the same fraction of the Current Market Price of a whole Common
Share or Preferred Share, as the case may be. For purposes of this Section
14(b), the Current Market Price of a whole Common Share or Preferred Share shall
be the Closing Price per share for the Trading Day immediately prior to the date
of such exercise.
(c) The holder of a Right, by the acceptance of such Right, expressly
waives such holder's right to receive any fractional Rights or any fractional
Common Shares or Preferred Shares upon exercise of such Right, except as
permitted by this Section 14.
Section 15. RIGHTS OF ACTION. All rights of action in respect of
this Agreement, except the rights of action given to the Rights Agent under
Section 18 hereof, are vested in the respective registered holders of the Right
Certificates and certificates for Common Shares representing Rights, and any
registered holder of any Right Certificate or of such certificate for Common
Shares, without the consent of the Rights Agent or of the holder of any other
Right Certificate or any other certificate for Common Shares may, on such
holder's own behalf and for such holder's own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, such holder's right to exercise the
Rights represented by such Right Certificate or by such certificate for Common
Shares in the manner provided in such Certificate and in this Agreement. Without
limiting the foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an adequate
remedy at law for any breach of this Agreement and shall be entitled to specific
performance, and injunctive relief against actual or threatened violations, of
the obligations of any Person under this Agreement.
Section 16. AGREEMENT OF RIGHT HOLDERS. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and every other holder of a Right that:
(a) prior to the Distribution Date, the Rights shall be represented
by certificates for Common Shares
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registered in the name of the holders of such Common Shares (which
certificates for Common Shares shall also constitute Right Certificates), and
each such Right shall be transferable only in connection with the transfer of
such Common Shares;
(b) after the Distribution Date, the Right Certificates shall only be
transferable on the registry books of the Rights Agent if surrendered at the
principal office of the Rights Agent, duly endorsed or accompanied by a proper
instrument of transfer; and
(c) the Company and the Rights Agent may deem and treat the person in
whose name the Right Certificate is registered as the absolute owner thereof and
of the Rights represented thereby (notwithstanding any notations of ownership or
writing on the Right Certificate by anyone other than the Company or the Rights
Agent) for all purposes whatsoever, and neither the Company nor the Rights Agent
shall be affected by any notice to the contrary.
Section 17. RIGHT HOLDER AND RIGHT CERTIFICATE HOLDER NOT DEEMED A
STOCKHOLDER. No holder, as such, of any Right or Right Certificate shall be
entitled to vote, receive dividends or be deemed for any purpose the holder of
the securities of the Company that may at any time be issuable upon the exercise
of the Rights represented thereby, nor shall anything contained herein or in any
Right Certificate be construed to confer upon the holder of any Right or Right
Certificate, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, to give or withhold consent to any
corporate action, to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 26 hereof), or to receive dividends
or subscription rights, or otherwise, in each case until such Right or the
Rights represented by such Right Certificate shall have been exercised in
accordance with the provisions hereof.
Section 18. CONCERNING THE RIGHTS AGENT.
(a) The Company agrees to pay to the Rights Agent as compensation for
all services rendered by it hereunder reasonable and customary fees and
expenses. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, or expense, incurred without
negligence, bad faith or willful misconduct on the part of the Rights Agent, for
anything done or omitted by the Rights Agent in connection with the acceptance
and administration of this Agreement, including
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the costs and expenses of defending against any claim of liability.
(b) The Rights Agent shall be protected and shall incur no liability
for or in respect of any action taken, suffered or omitted by it in connection
with its administration of this Agreement in reliance upon any Right Certificate
or certificate for the Preferred Shares or Common Shares or for other securities
of the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement, or other paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by the proper
person or persons, or otherwise upon the advice of its counsel as set forth in
Section 20 hereof.
Section 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS
AGENT.
(a) Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights Agent
or any successor Rights Agent shall be a party, or any corporation succeeding to
the corporate trust or stock transfer business of the Rights Agent or any
successor Rights Agent, shall be the successor to the Rights Agent under this
Agreement without the execution or filing of any paper or any further act on the
part of any of the parties hereto, provided that such corporation would be
eligible for appointment as a successor Rights Agent under the provisions of
Section 21 hereof. If, at the time such successor Rights Agent shall succeed to
the agency created by this Agreement, any of the Right Certificates shall have
been countersigned but not delivered, any such successor Rights Agent may adopt
the countersignature of the predecessor Rights Agent and deliver such Right
Certificates so countersigned; and if at that time any of the Right Certificates
shall not have been countersigned, any successor Rights Agent may countersign
such Right Certificates either in the name of the predecessor Rights Agent or in
the name of the successor Rights Agent; and in all such cases such Right
Certificates shall have the full force provided in such Right Certificates, and
in this Agreement.
(b) If at any time the name of the Rights Agent shall be changed, and
at such time any of the Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Right Certificates so countersigned; and if at that time any of the
Right
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Certificates shall not have been countersigned, the Rights Agent may countersign
such Right Certificates either in its prior name or in its changed name; and in
all such cases such Right Certificates shall have the full force provided in
such Right Certificates and in this Agreement.
Section 20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance of the Rights, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the advice or opinion of such counsel shall be
full and complete authorization and protection to the Rights Agent as to any
action taken or omitted by it in good faith and in accordance with such advice
or opinion.
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent shall deem it necessary or desirable that any fact or matter be
proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman of the Board, the
Vice Chairman of the Board, the President, any Vice President, the Treasurer or
the Secretary of the Company and delivered to the Rights Agent; and such
certificate shall be full authorization to the Rights Agent for any action taken
or suffered in good faith by it under the provisions of this Agreement in
reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company and any
other Person only for its own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement, or in the Right
Certificates (except its countersignature thereof), or be required to verify the
same, but all such statements and recitals are and shall be deemed to have been
made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect
of the validity of this Agreement or the execution and delivery hereof (except
the due authorization, execution and delivery hereof by the Rights Agent) or in
respect of the validity or execution of any Right Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by the
Company of any
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covenant or condition contained in this Agreement or in any Right Certificate;
nor shall it be responsible for any change in the exercisability of the Rights
(including any Rights becoming null and void pursuant to Section 7(d) hereof) or
any adjustment in the terms of the Rights (including the manner, method or
amount thereof) provided for in Sections 7, 11, 13 and 23 hereof, or the
ascertaining of the existence of facts that would require any such change or
adjustment (except with respect to the exercise of Rights represented by Right
Certificates after actual notice that such change or adjustment is required);
nor shall it by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any Preferred Shares or
Common Shares or other securities to be issued pursuant to this Agreement or any
Right Certificate, or as to whether any Preferred Shares or Common Shares or
other securities will, when issued, be validly authorized and issued, fully paid
and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman of the Board, the Vice Chairman, the President, any Vice
President, the Secretary, any Assistant Secretary or the Treasurer of the
Company, and to apply to such officers for advice or instructions in connection
with its duties, and it shall not be liable for any action taken or suffered to
be taken by it in good faith in accordance with instructions of any such
officer.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not the Rights
Agent under this Agreement. Nothing herein shall preclude the Rights Agent from
acting in any other capacity for the Company or for any other Person.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys
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or agents, and the Rights Agent shall not be answerable or accountable for any
act, default, neglect or misconduct of any such attorneys or agents or for any
loss to the Company resulting from any such act, default, neglect or misconduct,
provided that reasonable care was exercised in the selection and continued
employment thereof.
Section 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon 30 days' notice in writing mailed to the Company and to each
transfer agent of the Common Shares and Preferred Shares by registered or
certified mail, and to the holders of the Right Certificates by first-class
mail. The Company may remove the Rights Agent or any successor Rights Agent
upon 30 days' notice in writing, mailed to the Rights Agent or successor Rights
Agent, as the case may be, and to each transfer agent of the Common Shares and
Preferred Shares by registered or certified mail, and to the holders of the
Right Certificates by first-class mail. If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting as such, the Company shall
appoint a successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of 30 days after giving notice of such removal or
after it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of a Right Certificate
(who shall, with such notice, submit such holder's Right Certificate for
inspection by the Company), then the Company shall become the Rights Agent and
the registered holder of any Right Certificate may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent. Any successor
Rights Agent, whether appointed by the Company or by such a court, shall be a
corporation organized and doing business under the laws of the United States or
of the State of New York (or of any other state of the United States so long as
such corporation is authorized to do business as a banking institution in the
State of New York), in good standing, having a principal office in New York,
that is authorized under such laws to exercise corporate trust or stock transfer
powers and is subject to supervision or examination by federal or state
authority and that has at the time of its appointment as Rights Agent a combined
capital and surplus of at least $50,000,000. After appointment, the successor
Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and transfer
to the successor Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary for
the purpose of this
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Agreement and so that the successor Rights Agent may appropriately act as Rights
Agent hereunder. Not later than the effective date of any such appointment, the
Company shall file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Common Shares and Preferred Shares, and mail a
notice thereof in writing to the registered holders of the Right Certificates.
Failure to give any notice provided for in this Section 21, however, or any
defect therein, shall not affect the legality or validity of the resignation or
removal of the Rights Agent or the appointment of the successor Rights Agent, as
the case may be.
Section 22. ISSUANCE OF NEW RIGHT CERTIFICATES. Notwithstanding any
of the provisions of this Agreement or of the Right Certificates to the
contrary, the Company may, at its option, issue new Right Certificates in such
form as may be approved by the Board of Directors in order to reflect any
adjustment or change in the Exercise Price and the number or kind or class of
shares or other securities or property purchasable upon exercise of the Rights
in accordance with the provisions of this Agreement.
Section 23. REDEMPTION OF RIGHTS.
(a) Until the earliest of (i) the date of the first Section 11(a)(ii)
Event, (ii) the date of the first Section 13(a) Event or (iii) the Expiration
Date, a majority, but not less than three, of the Independent Directors may, at
their option, direct the Company to redeem all, but not less than all, of the
then outstanding Rights at a redemption price of $.0067 per Right, as such
redemption price shall be appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date hereof (the
"Redemption Price"), and the Company shall so redeem the Rights.
(b) Immediately upon the action of a majority, but not less than
three, of the Independent Directors directing the Company to redeem the Rights
pursuant to subsection (a) of this Section 23, or at such time and date
thereafter as they may specify, and without any further action and without any
notice, the right to exercise Rights shall terminate and the only right
thereafter of the holders of Rights shall be to receive the Redemption Price.
Within 10 Business Days after the date of such action, the Company shall give
notice of such redemption to the holders of Rights by mailing such notice to all
holders of Rights at their last addresses as they appear upon the registry books
of the Rights Agent or, if prior to the Distribution Date, on the registry books
of the transfer agent for the Common Shares. Any notice that is mailed in the
manner herein
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provided shall be deemed given, whether or not the holder receives such notice,
but neither the failure to give any such notice nor any defect therein shall
affect the legality or validity of such redemption. Each such notice of
redemption shall state the method by which the payment of the Redemption Price
will be made. Neither the Company nor any of its Affiliates or Associates may,
directly or indirectly, redeem, acquire or purchase for value any Rights in any
manner other than that specifically set forth in Section 24 hereof or in this
Section 23, and other than in connection with the purchase of Common Shares
prior to the earlier of the date of the first Section 11(a)(ii) Event or the
date of the first Section 13(a) Event.
(c) The Company may, at its option, pay the Redemption Price in cash,
Common Shares, Preferred Shares, other equity securities of the Company, debt
securities of the Company, other property or any combination of the foregoing,
in each case having an aggregate Current Market Price on the Redemption Date
equal to the Redemption Price.
Section 24. EXCHANGE OF RIGHTS.
(a) At any time after the 15% Ownership Date and prior to the first
date thereafter upon which a 15% Stockholder, together with all Affiliates and
Associates of such 15% Stockholder, shall be the Beneficial Owner of 50% or more
of the Voting Shares then outstanding, a majority, but not less than three, of
the Independent Directors may, at their option, direct the Company to exchange
all, but not less than all, of the then outstanding Rights for Common Shares at
an exchange ratio of one Common Share per Right, as such exchange ratio shall be
appropriately adjusted to reflect any stock split, stock dividend, or similar
transaction involving Preferred Shares or Common Shares that occurs after the
date hereof (the "Exchange Ratio"), and the Company shall so exchange the
Rights.
(b) Immediately upon the action of a majority, but not less than
three, of the Independent Directors directing the Company to exchange the Rights
pursuant to subsection (a) of this Section 24, or at such time and date
thereafter as they may specify, and without any further action and without any
notice, the right to exercise Rights shall terminate and the only right
thereafter of the holder of a Right shall be to receive a number of Common
Shares equal to the Exchange Ratio. Within 10 Business Days after the date of
such action, the Company shall give notice of such exchange to the holders of
Rights by mailing such notice to all holders of Rights at their last addresses
as they appear upon the registry books of the Rights Agent or, if prior to the
Distribution Date, on the registry books of
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the transfer agent for the Common Shares. Any notice that is mailed in the
manner herein provided shall be deemed given, whether or not the holder receives
such notice, but neither the failure to give any such notice nor any defect
therein shall affect the legality or validity of such exchange. Each such
notice of exchange shall state the method by which the Rights will be exchanged
for Common Shares. Neither the Company nor any of its Affiliates or Associates
may, directly or indirectly, redeem, acquire or purchase for value any Rights in
any manner other than that specifically set forth in Section 23 hereof or in
this Section 24, and other than in connection with the purchase of Common Shares
prior to the earlier of the date of the first Section 11(a)(ii) Event or the
date of the first Section 13(a) Event.
(c) Notwithstanding the foregoing, in the event that the aggregate
number of Common Shares that are authorized by the Company's Certificate of
Incorporation but not outstanding or reserved for issuance for purposes other
than upon exercise or exchange of the Rights is less than the aggregate number
of Common Shares issuable upon the exchange of the Rights in accordance with
this Section 24 (the excess of such number of authorized Common Shares over and
above such number of issuable Common Shares being hereinafter referred to as the
"Unavailable Exchange Shares"), then the Company shall substitute for the pro
rata portion of the Unavailable Exchange Shares that would otherwise be issuable
upon the exchange of the Rights in accordance with this Section 24, (i) cash,
(ii) other equity securities of the Company (including, without limitation,
Common Share Equivalents), (iii) debt securities of the Company, (iv) other
property or (v) any combination of the foregoing, in each case having an
aggregate Current Market Price equal to the aggregate Current Market Price of
the Unavailable Exchange Shares for which substitution is made. Subject to
Section 7(d) hereof, in the event that the Company takes any action pursuant to
this Section 24, such action shall apply uniformly to all outstanding Rights.
Section 25. CERTAIN CASH TENDER OFFERS.
(a) In the event that, at any time prior to the first date upon which
the Rights shall have become nonredeemable as provided in Section 23 hereof and
nonexchangeable as provided in Section 24 hereof, the Company shall receive a
Cash Tender Offer Proposal from any Prospective Offeror, a majority of the
Independent Directors of the Company shall, within 15 Business Days thereafter,
at their option, either (i) engage a nationally recognized investment banking
firm to render an opinion as to whether the price per Voting Share in cash to be
paid to the holders
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of Voting Shares pursuant to such Cash Tender Offer Proposal is fair and
adequate (the "Fairness Opinion"), which Fairness Opinion shall be delivered to
the Board of Directors within 20 Business Days after such engagement, or (ii)
call a special meeting of stockholders (the "Special Meeting") for the purpose
of voting on a precatory resolution requesting the Board of Directors to accept
such Cash Tender Offer Proposal as such Cash Tender Offer Proposal may be
amended or revised by such Prospective Offeror from time to time to increase the
price per Voting Share in cash to be paid to the holders of Voting Shares (the
"Resolution"). The Special Meeting, if any, shall be held on a date selected by
a majority of the Independent Directors, which date shall be not less than 90
nor more than 120 days after the later of the date such Cash Tender Offer
Proposal is received by the Company (the "Proposal Date") or the date of any
previously scheduled meeting of stockholders to be held within 60 days after the
Proposal Date; provided, however, that if (x) such other meeting shall have been
called for the purpose of voting on a precatory resolution with respect to
another Cash Tender Offer Proposal and (y) the Proposal Date shall be not later
than 15 days after the date such other Cash Tender Offer Proposal was received
by the Company, then both the Resolution and such other resolution shall be
voted on at such meeting and such meeting shall be deemed to be the Special
Meeting. A majority of the Independent Directors shall set a date for
determining the stockholders of record entitled to notice of and to vote at the
Special Meeting, if any, in accordance with the Company's Certificate of
Incorporation and Bylaws and with applicable law. At the request of the
Prospective Offeror, the Company shall include in any proxy soliciting material
prepared by it in connection with the Special Meeting, if any, proxy soliciting
material submitted by the Prospective Offeror; provided, however, that the
Prospective Offeror shall by written agreement with the Company contained in or
delivered with such request have indemnified the Company against any and all
liabilities resulting from any misstatements, misleading statements and
omissions contained in the Prospective Offeror's proxy soliciting material and
shall have agreed to pay the Company's incremental costs incurred as a result of
including such material in the Company's proxy soliciting material.
(b) In the event that (x) the Fairness Opinion states that the price
per Voting Share to be paid in cash to the holders of Voting Shares pursuant to
the Cash Tender Offer Proposal is fair and adequate or (y) at the Special
Meeting the Resolution receives the affirmative vote of the majority of the
Voting Shares outstanding as of the record date of the Special Meeting and not
Beneficially Owned on
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such day by the Prospective Offeror or any of its Affiliates or Associates,
then, subject to Section 25(c) below, proper provision shall be made in order
that upon the consummation of any tender offer (provided that such tender offer
is consummated prior to the 60th day following the date of such event, or prior
to such later day upon which a suspension of operation pursuant to Section 25(c)
below shall terminate) pursuant to which the Prospective Offeror offers to
purchase and purchases any and all of the Voting Shares held by Persons other
than the Prospective Offeror and its Affiliates and Associates at a price per
Voting Share in cash equal to or greater than the price per Voting Share
provided in the Cash Tender Offer Proposal (a "Fair Offer"), (i) each previously
unexercised Right that has not become nonredeemable as provided in Section 23
hereof shall be redeemed in accordance with Section 23 hereof, effective
immediately prior to the consummation of such tender offer, (ii) the acquisition
of Common Shares pursuant to such tender offer shall not be taken into account
in determining whether the 15% Ownership Date has or has not occurred, and (iii)
neither the commencement of, nor the first public announcement of the intent of
such Person to commence, such tender offer shall be taken into account in
determining whether the Distribution Date has or has not occurred. The
redemption of Rights pursuant to this Section 25 shall not in any way affect the
exercisability of such Rights prior to the effective time of such redemption.
(c) Notwithstanding Section 25(b) above, in the event that a majority
of the Independent Directors determine that such action is in the best interests
of the stockholders of the Company, they may, at any time prior to the
consummation of the tender offer referred to in the first sentence of Section
25(b) above, suspend the operation of clauses (i) and (ii) in such sentence for
a period of time not to exceed 120 days, such suspension to be effective upon
the date of the first public announcement thereof.
(d) Nothing contained in this Section 25 shall be deemed to be in
derogation of the obligation of the Board of Directors of the Company to
exercise its fiduciary duty. Without limiting the foregoing, nothing contained
herein shall be construed to suggest or imply that the Board of Directors shall
not be entitled to reject any Cash Tender Offer Proposal, or to recommend that
holders of Voting Shares reject any Cash Tender Offer Proposal, or to take any
other action (including, without limitation, the commencement, prosecution,
defense or settlement of any litigation or the submission of additional or
alternative Cash Tender Offer Proposals or other proposals to the Special
Meeting) with respect to any Cash Tender Offer Proposal or any tender offer that
the Board of Directors
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believes is necessary or appropriate in the exercise of such fiduciary duty.
(e) Nothing is this Section 25 shall be construed as limiting or
prohibiting the Company or any Prospective Offeror from proposing or engaging in
any acquisition, disposition or other transfer of any securities of the Company,
any merger or consolidation involving the Company, any sale or other transfer of
assets of the Company, any liquidation, dissolution or winding up of the
Company, any other business combination or other transaction, or any other
action; provided, however, that the holders of Rights shall have the rights set
forth in this Agreement with respect to any such acquisition, disposition,
transfer, merger, consolidation, sale, liquidation, dissolution, winding up,
business combination, transaction or action.
Section 26. NOTICE OF CERTAIN EVENTS.
(a) In the event that the Company shall propose (i) to declare or pay
any dividend payable on or make any distribution with respect to its Common
Shares or Preferred Shares (other than a regular quarterly cash dividend), (ii)
to offer to the holders of its Common Shares or Preferred Shares options, rights
or warrants to subscribe for or to purchase any additional shares thereof or
shares of stock of any class or any other securities, rights or options, (iii)
to effect any reclassification of its Common Shares or Preferred Shares (other
than a reclassification involving only the subdivision of outstanding shares),
(iv) to effect any consolidation or merger with or into, or to effect any sale
or other transfer (or to permit one or more of its Subsidiaries to effect any
sale or other transfer), in one or more transactions, of more than 50% of the
assets or earning power of the Company and its Subsidiaries (taken as a whole)
to, any other Person or Persons, or (v) to effect the liquidation, dissolution
or winding up of the Company, then and in each such case, the Company shall give
to each holder of a Right Certificate, in accordance with Section 27 hereof, a
notice of such proposed action, that shall specify the record date for the
purpose of such dividend or distribution, or the date upon which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution or winding up is to take place and the date of participation therein
by the holders of record of the Common Shares or Preferred Shares, if any such
date is to be fixed, and such notice shall be so given in the case of any action
covered by clause (i) or (ii) above at least 20 days prior to the record date
for determining holders of the Common Shares or Preferred Shares for purposes of
such action, and in the case of any such other action, at least 20 days prior to
the date of the
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taking of such proposed action or the date of participation therein by the
holders of the Common Shares or Preferred Shares, whichever date shall be the
earlier. The failure to give the notice required by this Section 26 or any
defect therein shall not affect the legality or validity of the action taken by
the Company or the vote upon any such action.
(b) As soon as practicable after the occurrence of each Section
11(a)(ii) Event and each Section 13(a) Event, the Company shall give to each
holder of a Right Certificate, in accordance with Section 27 hereof, a notice of
the occurrence of such event, specifying the event and the consequences of the
event to holders of Rights under Section 11 or 13 hereof.
Section 27. NOTICES. Notices or demands authorized by this Agreement
to be given or made by the Rights Agent or by the holder of any Right
Certificate to or on the Company shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
Building Materials Holding Corporation
San Francisco
Attention: Paul S. Street,
Secretary
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Right Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Company) to the principal office of the Rights
Agent as follows:
American Stock Transfer and Trust Company
40 Wall Street, 46th Floor
New York, New York 10005
Attention: President
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
Section 28. SUPPLEMENTS AND AMENDMENTS.
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(a) A majority, but not less than three, of the Independent Directors
may, from time to time, without the approval of any holders of Rights, direct
the Company and the Rights Agent to supplement or amend any provision of this
Agreement in any manner, whether or not such supplement or amendment is adverse
to any holder of Rights, and the Company and the Rights Agent shall so
supplement or amend such provision; provided, however, that from and after the
earliest of (i) the date of the first Section 11(a)(ii) Event, (ii) the date of
the first Section 13(a) Event, (iii) the Redemption Date or (iv) the Expiration
Date, this Agreement shall not be supplemented or amended in any manner that
would materially and adversely affect any holder of outstanding Rights other
than a 15% Stockholder or a Surviving Person.
(b) From and after the earlier of the date of the first Section
11(a)(ii) Event or the date of the first Section 13(a) Event and prior to the
earlier of the Redemption Date or the Expiration Date, the Company shall not
effect any amendment to the provisions of its Certificate of Incorporation
relating to the Preferred Shares that would materially and adversely affect the
rights, privileges or preferences of the Preferred Shares without the prior
approval of the holders of two-thirds or more of the then outstanding Rights.
Section 29. CERTAIN COVENANTS. Subject to Section 28 hereof and the
other provisions of this Agreement, from and after the earlier of the date of
the first Section 11(a)(ii) Event or the date of the first Section 13(a) Event
and prior to the earlier of the Redemption Date or the Expiration Date, the
Company shall not (a) issue or sell, or permit any Subsidiary to issue or sell,
to a 15% Stockholder or a Surviving Person, or any Affiliate or Associate of a
15% Stockholder or a Surviving Person, or any Person holding Voting Shares of
the Company that are Beneficially Owned by a 15% Stockholder or a Surviving
Person, (i) any rights, options, warrants or convertible securities on terms
similar to, or that materially adversely affect the value of, the Rights or (ii)
Preferred Shares, Common Shares or shares of any other class of capital stock of
the Company, if such sale is intended to or would materially adversely affect
the value of the Rights, or (b) take any other action that is intended to or
would materially adversely affect the value of the Rights.
Section 30. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
41
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Section 31. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement
shall be construed to give to any Person other than the Company, the Rights
Agent, the registered holders of the Right Certificates (other than those
representing Rights that have become null and void) and the certificates for
Common Shares representing Rights (other than those Rights that have become null
and void) any legal or equitable right, remedy or claim under this Agreement,
and this Agreement shall be for the sole and exclusive benefit of the Company,
the Rights Agent, such registered holders of Right Certificates and such
certificates for Common Shares representing Rights.
Section 32. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
Section 33. GOVERNING LAW. This Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of Delaware and for all purposes shall be governed by and construed in
accordance with the laws of such state applicable to contracts made and
performed entirely within such state.
Section 34. COUNTERPARTS. This Agreement may be executed in any
number of counterparts and each such counterpart shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
Section 35. DESCRIPTIVE HEADINGS. Descriptive headings of the
several sections of this Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
Attest: BUILDING MATERIALS HOLDING
CORPORATION
By By
----------------------- ----------------------------
Name: Paul S. Street Name: Robert E. Mellor
Title: Secretary Title: President
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Attest: AMERICAN STOCK TRANSFER AND
TRUST COMPANY
By By
----------------------- ------------------------
Name: Name:
----------------- ------------------
Title: [Secretary or Title: [President or
Assistant Secretary] Vice President]
43
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FOR IMMEDIATE RELEASE..September 23, 1997
For more information, contact:
Ellis C. Goebel
Senior Vice President Finance & Treasurer
Building Materials Holding Corporation
(208) 331-4410
BMC WEST COMPLETES HOLDING COMPANY REORGANIZATION;
NEW ENTITY FILES COMMON STOCK SHELF REGISTRATION
BOISE, IDAHO...BMC West Corporation, a leading distributor and retailer of
building materials in the western United States, is now a wholly owned
subsidiary of Building Materials Holding Corporation following completion of the
previously announced holding company reorganization and merger. As part of that
change, BMC West shareholders now hold stock in the parent company which will
begin trading on September 24, 1997, on the Nasdaq National market under the
symbol BMHC.
"We are pleased to have the reorganization completed," said Robert E.
Mellor, president and chief executive officer of Building Materials Holding
Corporation. The intent to form a holding company structure was announced
earlier this year.
According to Mellor, the new structure allows the company to centralize its
financial and administrative responsibilities at the holding company level as it
prepares to participate in the consolidation of the contractor focused building
materials distribution industry. As a wholly owned subsidiary, BMC West
continues its emphasis on individual customer and market needs in 10 Western
states.
<PAGE>
"Outstanding shares of BMC West common stock were automatically exchanged
on a share-for-share basis into shares of Building Materials Holding
Corporation," said Mellor. No action is required by stockholders in connection
with the change in corporate structure.
As part of the reorganization, Building Materials Holding Corporation
adopted a rights agreement substantially similar to one that existed under the
former BMC West corporate structure. Under the agreement, the company declared
a dividend of one preferred share purchase right for each outstanding share of
common stock to holders of record as of October 2, 1997. Each right entitles
the holder, under certain conditions outlined in the agreement dated September
19, 1997, to purchase a share of Class C Preferred Stock.
The company also announced that it will file a shelf registration on Form
S-4 tomorrow with the Securities and Exchange Commission. The filing requests
permission to issue up to 1 million shares of common stock for use in future
acquisitions.
Mellor said the additional shares will provide management with increased
flexibility in structuring future transactions.
