AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON January 28 ,2000
REGISTRATION NO. 333-
==============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------------------------------
SOVEREIGN SPECIALTY CHEMICALS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 36-4176637
(State or other (I.R.S. Employer
jurisdiction of incorporation Identification Number)
or organization)
225 West Washington Street
Suite 2200
Chicago, Illinois 60606
SOVEREIGN SPECIALTY CHEMICALS, INC.
EMPLOYEE STOCK PURCHASE PLAN
(Full title of the plans)
JOHN R. MELLETT
VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
SOVEREIGN SPECIALTY CHEMICALS, INC.
225 WEST WASHINGTON STREET
SUITE 2200
CHICAGO, ILLINOIS 60606
(312) 419-7100
(Name, address, and telephone number of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
===========================================================================================================================
PROPOSED
MAXIMUM PROPOSED
OFFERING MAXIMUM
TITLE OF SECURITIES AMOUNT TO BE PRICE PER AGGREGATE AMOUNT OF
TO BE REGISTERED REGISTERED (1) SHARE OFFERING PRICE REGISTRATION FEE
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $.01 per share 20,000 shares $100.00 $2,000,000 $528.00
===========================================================================================================================
<FN>
(1) Plus such additional number of shares as may be required in the event
of a stock dividend, stock split, recapitalization or other similar
event in accordance with Rule 416 of the Securities Act of 1933, as
amended (the "Securities Act").
</FN>
</TABLE>
<PAGE>
PART I
EXPLANATORY NOTE
This Form S-8 Registration Statement relates to 20,000 shares of
voting common stock of Sovereign Specialty Chemicals, Inc., par value $.01
per share (the "Common Stock"), which may be issued under our Employee
Stock Purchase Plan (the "ESPP").
The documents containing information specified by Part I of this
Registration Statement will be sent or given to participants in the ESPP as
specified in Rule 428(b)(1) promulgated by the Securities and Exchange
Commission under the Securities Act. Such document(s) are not required to
be filed with the SEC but constitute (along with the documents incorporated
by reference into this Registration Statement pursuant to Item 3 of Part II
hereof) a prospectus that meets the requirements of Section 10(a) of the
Securities Act.
References to "the Company" shall mean Sovereign Specialty Chemicals,
Inc., a Delaware corporation.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any document we file
at the SEC's public reference rooms in Washington, D.C., New York, NY and
Chicago, IL. Please call the SEC at 1-800-SEC-0330 for further information
on the public reference rooms. Our SEC filings are also available to the
public from the SEC's web site at http://www.sec.gov.
The SEC allows us to "incorporate by reference" information into
this Registration Statement, which means that we can disclose important
information to you by referring you to another document filed separately
with the SEC. The information incorporated by reference is considered to be
part of this Registration Statement, and later information that we file
with the SEC will automatically update this Registration Statement. We
incorporate by reference the following documents listed below and any
future filings made with the SEC under Sections 13(a), 13(c), 14 or 15(d)
of the Securities Exchange Act of 1934, as amended, prior to the
termination of the offering:
(a) Our Annual Report on Form 10-K for the fiscal year ended December
31, 1998, filed with the SEC on March 30, 1999, which includes
our audited financial statements for the fiscal year ended
December 31, 1998;
(b) Our Quarterly Reports on Forms 10-Q for the fiscal quarters ended
March 31, 1999, June 30, 1999 and September 30, 1999, filed with
the SEC on May 14, 1999, August 13, 1999 and November 15, 1999,
respectively;
(c) Our Current Reports on Form 8-K filed with the SEC on November
29, 1999 and Form 8-K/A filed with the SEC on January 13, 2000;
and
(d) Our Registration Statement on Form S-4 filed with the SEC on
November 3, 1997, as amended on Forms S-4/A filed with the SEC on
April 3, 1998, April 27, 1998 and April 29, 1998.
Item 4. Description of Securities
General. The Amended and Restated Certificate of Incorporation of the
Company (the "Certificate") authorizes the issuance of 2,700,000 shares of
Common Stock, and 2,100,000 shares of non-voting common stock, par value
$0.01 per share. As of January 21, 2000, there were 1,436,239 shares of
Common Stock and 730,182 shares of non-voting common stock outstanding. The
ESPP provides for the issuance of 20,000 shares of Common Stock.
Voting Rights. Holders of shares of Common Stock are generally
entitled to one vote per share. On any matter on which the holders of
Common Stock and non-voting common stock are entitled to vote, both classes
of common stock will vote together as a single class, and each holder of
non-voting common stock will be entitled to one vote per share.
Notwithstanding the foregoing, holders of non-voting common stock will be
entitled to vote as a separate class on any amendment, repeal or
modification of any provisions of the Certificate that adversely affects
the powers, preferences or special rights of holders of non-voting common
stock (and does not affect holders of Common Stock in a similar manner). In
addition, the following actions require the affirmative vote or written
consent of the holders of at least a majority of the outstanding shares of
Common Stock or non-voting common stock combined: (i) any increase,
reduction or other change in the authorized number of shares of either
class, (ii) the authorization of any new series or class of the Company's
stock senior to or on a parity with the current classes of common stock,
(iii) increases in the authorized shares of any such series or class and
(iv) any amendment to the Certificate that adversely affects the rights of
the Common Stock and non-voting common stock.
Dividends. Holders of Common Stock and non-voting common stock are
entitled to receive such dividends or other distributions as may be
declared thereon by the Board of Directors of the Company from time to time
out of the funds or assets legally available for such dividends and
distributions. Any dividends or other distributions declared or paid by the
Company will be declared or paid pro rata, on a share-for-share basis, on
the Common Stock and the non-voting common stock.
Conversion. Under certain circumstances, holders of non-voting common
stock may convert such stock into Common Stock on a share-for-share basis
(and vice versa).
Liquidation. In the event of any liquidation, dissolution or winding
up of the Company, the holders of Common Stock and non-voting common stock
shall be entitled to share pro rata, on a share-for-share basis, in all
assets of the Company available for distribution to its stockholders.
Adjustment. If the Company in any manner subdivides or combines the
outstanding shares of either class of common stock, then the outstanding
shares of the other class of common stock will be subdivided or combined,
as the case may be, to the same extent and other appropriate adjustments
will be made.
Item 5. Interests of Named Experts and Counsel
Certain legal matters with respect to the validity of the Common Stock
offered by this Registration Statement will be passed upon for the Company
by Fried, Frank, Harris, Shriver & Jacobson (a partnership including
professional corporations). A partnership in which partners of Fried,
Frank, Harris, Shriver & Jacobson are partners is a shareholder of the
Company.
Item 6. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law (the "DGCL")
provides that a corporation may indemnify directors and officers as well as
other employees and individuals against expenses (including attorneys'
fees), judgments, fines, and amounts paid in settlement in connection with
specified actions, suits and proceedings, whether civil, criminal,
administrative, or investigative (other than action by or in the right of
the corporation--a "derivative action"), if they acted in good faith and in
a manner they reasonably believed to be in or not opposed to the best
interests of the corporation and, with respect to any criminal action or
proceeding, had no reasonable cause to believe their conduct was unlawful.
A similar standard is applicable in the case of derivative actions, except
that indemnification only extends to expenses (including attorneys' fees)
incurred in connection with the defense or settlement of such action, and
the statute requires court approval before there can be any indemnification
where the person seeking indemnification has been found liable to the
corporation. The statute provides that it is not exclusive of other
indemnification that may be granted by a corporation's certificate of
incorporation, bylaws, disinterested director vote, stockholder vote,
agreement, or otherwise.
The DGCL further authorizes a Delaware corporation to purchase and
maintain insurance on behalf of any person who is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of
another corporation or enterprise, against any liability asserted against
him and incurred by him in any such capacity, arising out of his status as
such, whether or not the corporation would otherwise have the power to
indemnify him under Section 145.
The By-Laws of the Company provide that the Company shall indemnify,
to the fullest extent permitted by the DGCL, any person who was or is a
party or is threatened to be made a party to or is involved in any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative by reason of the fact that he or
she is or was a director or officer of the Company, or is or was serving at
the request of the Company as a director, officer or member of another
corporation, against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding and that such
indemnification will continue as to an indemnitee who has ceased to be a
director or officer. The By-Laws of the Company further provide that any
employee or agent of the Company, or any person serving at the request of
the Company will be indemnified in the same manner as a director or officer
of the Company.
The By-Laws of the Company provide that the Company may purchase and
maintain insurance on its own behalf and on behalf of any person who is or
was a director, officer, employee, fiduciary, or agent of the Company or
was serving at the request of the Company as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise against any liability asserted against him or her and incurred
by him or her in any such capacity, whether or not the Company would have
the power to indemnify such person against such liability under its
By-Laws.
We have obtained an indemnification insurance policy insuring our
directors and officers against certain liabilities they may incur in their
capacity as directors and officers. Under these policies, the insurer, on
our behalf, may also pay amounts for which we have granted indemnification
to the directors or officers.
Item 7. Exemption from Registration Claimed
Not applicable.
<PAGE>
Item 8. Exhibits
EXHIBIT NO. DESCRIPTION OF EXHIBIT
- ----------- ----------------------
4.1* Certificate of Amended and Restated Certificate of
Incorporation of the Company
4.2* By-Laws of the Company as amended on December 27, 1999
4.3* Sovereign Specialty Chemicals, Inc. Employee Stock
Purchase Plan
4.4* Form of Sovereign Specialty Chemicals, Inc. Employee
Subscription Agreement
4.5* Form of Sovereign Specialty Chemicals, Inc. Management
Subscription Agreement
4.6 Shareholders Agreement, dated as of December 29, 1999,
by and among Sovereign Specialty Chemicals, Inc., SSCI
Investors LLC and the shareholders listed on Schedule 1
thereto, previously filed as Exhibit 99.1 to the
Company's Current Report on Form 8-K/A on January 13,
2000, and incorporated herein by reference
5.1* Opinion of Fried, Frank, Harris, Shriver & Jacobson
23.1 Consent of Fried, Frank, Harris, Shriver & Jacobson
(included in Exhibit 5.1)
23.2* Consent of Ernst & Young LLP (independent public
accountants)
- -------------------------
* Filed herewith.
<PAGE>
Item 9. Undertakings
The Company hereby undertakes:
(a) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of this Registration Statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in this Registration Statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in this
Registration Statement or any material change to such information
in this Registration Statement;
provided, however, that paragraphs (i) and (ii) do not apply if the
information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or
furnished to the Commission by the Company pursuant to Section 13 or
Section 15(d) of the Exchange Act that are incorporated by reference
in this Registration Statement.
(b) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(c) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.
(d) That, for the purpose of determining any liability under the
Securities Act, each filing of the Company's annual report pursuant to
Section 13(a) or Section 15(d) of the Exchange Act that is
incorporated by reference in this Registration Statement shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the Company pursuant to the provisions described in Item 6 of
this Registration Statement, or otherwise, the Company has been advised
that in the opinion of the Commission such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Company of expenses incurred or
paid by a director, officer or controlling person of the Company in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being registered, the Company will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it meets all of
the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the city of Chicago, State of Illinois on
January 26, 2000.
Sovereign Specialty Chemicals, Inc.
/s/ John R. Mellett
---------------------------------
By: John R. Mellett
Vice President and
Chief Financial Officer
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS:
That the undersigned officers and directors of Sovereign Specialty
Chemicals, Inc., a Delaware corporation, do hereby constitute and appoint
Robert B. Covalt, John R. Mellett, Thomas P. Salice, and Christine Smith,
and each of them, as his or her true and lawful attorney-in-fact and agent
with full power of substitution and resubstitution, for him in his or her
name, place and stead, in any and all capacities, to sign any and all
amendments to this Registration Statement and any additional registration
statements pursuant to Instruction E to Form S-8 and any and all documents
in connection therewith, and to file the same, with all exhibits thereto,
and all documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he or she might or could do in person, and hereby ratifies,
approves and confirms all that his or her said attorney-in-fact and agent,
or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, each of the undersigned has executed this Power of
Attorney as of the date indicated.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed below by the following persons in the capacities
and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ Robert B. Covalt Chairman of the Board, Chief January 26, 2000
- ------------------------- Executive Officer and President
Robert B. Covalt
/s/ John R. Mellett Vice-President and Chief January 26, 2000
- ------------------------- Financial Officer
John R. Mellett
/s/ John Garcia Director January 26, 2000
- -------------------------
John Garcia
/s/ John D. Macomber Director January 26, 2000
- -------------------------
John D. Macomber
/s/ Robert H. Malott Director January 26, 2000
- -------------------------
Robert H. Malott
/s/ Thomas P. Salice Director January 26, 2000
- -------------------------
Thomas P. Salice
/s/ Norman E. Wells, Jr. Director January 26, 2000
- -------------------------
Norman E. Wells, Jr.
<PAGE>
Index to Exhibits
EXHIBIT NO. DESCRIPTION OF EXHIBIT
- ----------- ----------------------
4.1* Certificate of Amended and Restated Certificate of
Incorporation of the Company
4.2* By-Laws of the Company as amended on December 27, 1999
4.3* Sovereign Specialty Chemicals, Inc. Employee Stock
Purchase Plan
4.4* Form of Sovereign Specialty Chemicals, Inc. Employee
Subscription Agreement
4.5* Form of Sovereign Specialty Chemicals, Inc. Management
Subscription Agreement
4.6 Shareholders Agreement, dated as of December 29, 1999,
by and among Sovereign Specialty Chemicals, Inc., SSCI
Investors LLC and the shareholders listed on Schedule 1
thereto, previously filed as Exhibit 99.1 to the
Company's Current Report on Form 8-K/A on January 13,
2000, and incorporated herein by reference
5.1* Opinion of Fried, Frank, Harris, Shriver & Jacobson
23.1 Consent of Fried, Frank, Harris, Shriver & Jacobson
(included in Exhibit 5.1)
23.2* Consent of Ernst & Young LLP (independent public
accountants)
- -------------------------
* Filed herewith.
EXHIBIT 4.1
CERTIFICATE OF
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
SOVEREIGN SPECIALTY CHEMICALS, INC.
SOVEREIGN SPECIALTY CHEMICALS, INC. (hereinafter called the
"corporation"), a corporation organized and existing under and by virtue of
the General Corporation Law of the State of Delaware, does hereby certify:
FIRST: The present name of the corporation is SOVEREIGN SPECIALTY
CHEMICALS, INC., which is the name under which the corporation was
originally incorporated; and the date of filing the original certificate of
incorporation of the corporation with the Secretary of State of the State
of Delaware is July 29, 1997.
SECOND: The certificate of incorporation of the corporation is hereby
amended by striking out Article Four thereof and by substituting in lieu
thereof a new Article Four which is set forth in the Amended and Restated
Certificate of Incorporation hereinafter provided for.
THIRD: The provisions of the certificate of incorporation of the
corporation as heretofore amended and/or supplemented, and as herein
amended, are hereby restated and integrated into the single instrument
which is hereinafter set forth, and which is entitled Amended and Restated
Certificate of Incorporation of SOVEREIGN SPECIALTY CHEMICALS, INC.,
without any further amendment other than the amendment herein certified and
without any discrepancy between the provisions of the certificate of
incorporation as heretofore amended and supplemented and the provisions of
the said single instrument hereinafter set forth.
FOURTH: The amendment and the restatement of the certificate of
incorporation herein certified have been duly adopted by the stockholders
in accordance with the provisions of Sections 228, 242, and 245 of the
General Corporation Law of the State of Delaware.
FIFTH: The certificate of incorporation of the corporation, as amended
and restated herein, shall at the effective time of this Amended and
Restated Certificate of Incorporation, read as set forth in EXHIBIT A.
Executed on this 28th day of December, 1999
SOVEREIGN SPECIALTY CHEMICALS, INC.
By: /s/ Robert B. Covalt
-------------------------------
Name: Robert B. Covalt
Its: Chief Executive Officer and President
<PAGE>
Exhibit A
AMENDED AND RESTATED
--------------------
ARTICLES OF INCORPORATION
-------------------------
OF
--
SOVEREIGN SPECIALTY CHEMICALS, INC.
-----------------------------------
ARTICLE ONE
-----------
The name of the Corporation is Sovereign Specialty Chemicals,
Inc.
ARTICLE TWO
-----------
The address of the Corporation's registered office in the State
of Delaware is the Corporation Trust Center, 1209 Orange Street, in the
City of Wilmington, County of New Castle. The name of its registered agent
at such address is The Corporation Trust Company.
ARTICLE THREE
-------------
The nature of the business or purposes to be conducted or
promoted is to engage in any lawful act or activity for which corporations
may be organized under the General Corporation Law of the State of
Delaware.
ARTICLE FOUR
------------
The total number of shares of capital stock which the Corporation
shall have authority to issue is 4,800,000 shares consisting of 2,700,000
shares of Common Stock, par value $0.01 per share ("Common Stock"), and
2,100,000 shares of Non-Voting Common Stock, par value $0.01 per share
("Non-Voting Common Stock" and together with the Common Stock, "Common
Shares").
Immediately upon the effectiveness of this Amended and Restated
Certificate of Incorporation, each outstanding share of the Corporation's
Class A Common Stock, par value $0.01 per share, and each outstanding share
of the Corporation's Class B Common Stock, par value $0.01 per share, shall
each without further action by the Corporation or the holder thereof be
reclassified, changed and converted into 1,469.418 shares of Common Stock
and 730.182 shares of Non-Voting Common Stock.
Common Shares.
- -------------
A statement of the designations, powers, preferences, rights,
qualifications, limitations and restrictions in respect of the Common
Shares is as follows:
(A) Dividends. The Board of Directors of the Corporation may
cause dividends to be paid to the holders of shares of Common Stock or
Non-Voting Common Stock out of funds legally available for the payment of
dividends by declaring an amount per share as a dividend. When and as
dividends or other distributions are declared, whether payable in cash, in
property or in shares of stock of the Corporation, other than in shares of
Common Stock or Non-Voting Common Stock, the holders of Common Stock and
the holders of Non-Voting Common Stock shall be entitled to share equally,
share for share, in such dividends or other distributions. No dividends or
other distributions shall be declared or paid in shares of Common Stock or
Non-Voting Common Stock or options, warrants or rights to acquire such
stock or securities convertible into or exchangeable for shares of such
stock, except dividends or other distributions payable ratably according to
the number of shares of Common Stock and Non-Voting Common Stock held by
them, in shares of, or options, warrants or rights to acquire or securities
convertible into or exchangeable for, Common Stock to holders of that class
of stock and Non-Voting Common Stock to holders of that class of stock.
(B) Liquidation Rights. In the event of any voluntary or
involuntary liquidation, dissolution or winding up of the affairs of the
Corporation, the holders of Common Shares shall be entitled to share,
ratably according to the number of shares of Common Stock and Non-Voting
Common Stock held by them, in all assets of the Corporation available for
distribution to its stockholders.
(C) Voting Rights. (1) Except as otherwise provided in this
Certificate of Incorporation or required by applicable law, the holders of
Common Stock shall be entitled to vote on each matter on which the
stockholders of the Corporation shall be entitled to vote, and each holder
of Common Stock shall be entitled to one vote for each share of such stock
held by such holder.
(2) The holders of Non-Voting Common Stock shall not have any
voting rights except as otherwise provided in this Certificate of
Incorporation or required by applicable law and except that such holders
shall be entitled to vote as a separate class on any amendment to this
paragraph (C)(2) and on any amendment, repeal or modification of any
provision of this Certificate of Incorporation to the extent that it
adversely affects the powers, preferences or special rights of holders of
Non-Voting Common Stock (and does not affect the powers, preferences or
special rights of holders of Common Stock in a substantially similar
manner). In the event that any amendment, repeal or modification of any
provision of this Certificate of Incorporation adversely affects the
powers, preferences or special rights of both the holders of Common Stock
and the holders of Non-Voting Common Stock in a substantially similar
manner, voting with respect to such matter will be governed by paragraph
(C)(4) below.
(3) Except as otherwise provided in paragraph (C)(2) above, on
any matter on which the holders of Common Stock and the holders of
Non-Voting Common Stock are entitled to vote, both classes of Common Shares
entitled to vote shall vote together as a single class, and each holder of
Common Shares entitled to vote shall be entitled to one vote for each share
of Common Stock and one vote for each share of Non-Voting Common Stock held
by such holder.
(4) In addition to any affirmative vote required by law or by
this Certificate of Incorporation, the affirmative vote or written consent
of only the holders of not less than a majority of the then outstanding
shares of both classes of Common Shares, voting together as a single class,
shall be required for any of the following actions: (i) any increase,
reduction or other change in the authorized number of shares of any class
of Common Shares, (ii) the authorization of any new series or class of
stock of the Corporation senior to or on a parity with Common Shares with
respect to the payment of dividends or the distribution of assets on
liquidation, and increases in the authorized shares of any such series or
class, and (iii) any amendment to the Certificate of Incorporation that
adversely affects the rights of the Common Stock and the Non-Voting Common
Stock. The affirmative vote or written consent specified in the preceding
sentence shall be required notwithstanding the fact that no vote may be
required, or that a lesser percentage vote may be specified, by law, by the
By-Laws of the Corporation or otherwise.
(D) Conversion. (1) Upon compliance with the provisions of
paragraph (D)(3) below, any stockholder shall be entitled to convert, at
any time and from time to time, any or all of the shares of Common Stock
held by such stockholder into the same number of shares of Non-Voting
Common Stock.
(2) Upon compliance with the provisions of paragraph (D)(3)
below, any stockholder shall be entitled to convert, at any time and from
time to time, any and all shares of Non-Voting Common Stock held by such
stockholder into the same number of shares of Common Stock; provided,
however, that no holder of any shares of Non-Voting Common Stock shall be
entitled to convert any such shares into shares of Common Stock, to the
extent that, as a result of such conversion, such holder and its
Affiliates, directly or indirectly, would own, control or have the power to
vote a greater number of shares of Common Stock or other securities of any
kind issued by the Corporation than such holder and its Affiliates shall be
permitted to own, control or have the power to vote under any law,
regulation, rule or other requirement of any governmental authority at the
time applicable to such holder or its Affiliates. As used in this
Certificate of Incorporation, the term "Affiliate" shall mean with respect
to any individual, partnership, joint venture, corporation, limited
liability company, association, trust, or any other entity or organization,
including a government or political subdivision or an agency or
instrumentality thereof (a "Person"), any other Person directly or
indirectly controlling, controlled by or under common control with such
Person. For the purpose of this definition, the term "control" (including
with correlative meanings, the terms "controlling", "controlled by" and
"under common control with"), as used with respect to any Person, shall
mean the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of such Person, whether
through the ownership of voting securities or by contract or otherwise.
(3)(a) Each conversion of Common Shares of the Corporation into
another class of Common Shares of the Corporation shall be effected by the
surrender of the certificate(s) evidencing the shares of the class of stock
to be converted (the "Converting Shares") at the principal office of the
Corporation (or such other office or agency of the Corporation as the
Corporation may designate by notice in writing to the holders of Common
Shares) at any time during its usual business hours, together with written
notice by the holder of such Converting Shares, (i) stating that the holder
desires to convert the Converting Shares or a specified number of such
Converting Shares, evidenced by such certificate(s) into an equal number of
shares of the class into which such shares may be converted (the "Converted
Shares"), and (ii) giving the name(s) (with addresses) and denominations in
which the certificate(s) evidencing the Converted Shares shall be issued,
and instructions for the delivery thereof. The Corporation shall promptly
notify each Regulated Stockholder (as defined below) of record of its
receipt of such notice. Except as otherwise provided in paragraph
(D)(3)(b), upon receipt of the notice described in the first sentence of
this paragraph (D)(3)(a), together with the certificate(s) evidencing the
Converting Shares, the Corporation shall be obligated to, and shall, issue
and deliver in accordance with such instructions the certificate(s)
evidencing the Converted Shares issuable upon such conversion and a
certificate (which shall contain such legends, if any, as were set forth on
the surrendered certificate(s)) representing any shares which were
represented by the certificate(s) surrendered to the Corporation in
connection with such conversion but which were not Converting Shares and,
therefore, were not converted; provided, however, that if such conversion
is subject to paragraph (D)(3)(d) below, the Corporation shall not issue
said certificate(s) until the expiration of the Deferral Period referred to
therein. Such conversion, to the extent permitted by law, shall be deemed
to have been effected as of the close of business on the date on which such
certificate(s) shall have been surrendered and such written notice shall
have been received by the Corporation, and at such time the rights of the
holder of such Converting Shares as such holder shall cease (except that in
the case of a conversion subject to paragraph (D)(3)(d) below, the
conversion shall be deemed effective upon expiration of the Deferral Period
referred to therein), and the person(s) in whose name or names any
certificate(s) evidencing the Converted Shares are to be issued upon such
conversion shall be deemed to have become the holder(s) of record of the
Converted Shares. The term "Regulated Stockholder" shall mean any
stockholder that is subject to the provisions of Regulation Y of the Board
of Governors of the Federal Reserve System (12 C.F.R. Part 225) or any
successor to such regulation ("Regulation Y").
(b) Notwithstanding any provision of paragraph (D)(3)(a) to the
contrary, the Corporation shall not be required to record the conversion
of, and no holder of shares shall be entitled to convert, shares of
Non-Voting Common Stock into shares of Common Stock unless such conversion
is permitted under applicable law; provided, however, that the Corporation
shall be entitled to rely without independent verification upon the
representation of any holder that the conversion of shares by such holder
is permitted under applicable law, and in no event shall the Corporation be
liable to any such holder or any third party arising from any such
conversion whether or not permitted by applicable law.
(c) Upon the issuance of the Converted Shares in accordance with
this paragraph (D), such shares shall be deemed to be duly authorized,
validly issued, fully paid and non-assessable.
(d) The Corporation shall not convert or directly or indirectly
redeem, purchase or otherwise acquire any shares of Common Stock or take
any other action affecting the voting rights of such shares, if such action
will increase the percentage of outstanding voting securities owned or
controlled by any Regulated Stockholder (other than the stockholder which
requested that the Corporation take such action, or which otherwise waives
in writing its rights under this paragraph (D)) unless the Corporation
gives written notice (the "First Notice") of such action to each such
Regulated Stockholder. The Corporation will defer making any conversion,
redemption, purchase or other acquisition or taking any such other action
for a period of 30 days (the "Deferral Period") after giving the First
Notice in order to allow each such Regulated Stockholder to determine
whether it wishes to convert or take any other action with respect to the
Common Shares it owns, controls or has the power to vote, and if any such
Regulated Stockholder then elects to convert any shares of Common Stock, it
shall notify the Corporation in writing within 20 days of the issuance of
the First Notice, in which case the Corporation (i) shall promptly notify
from time to time each other Regulated Stockholder holding shares of each
proposed conversion and the proposed transactions, and (ii) effect the
conversion requested by all Regulated Stockholders in response to the
notices issued pursuant to this paragraph (D)(3)(d) at the end of the
Deferral Period or as soon thereafter as is reasonably practicable.
Notwithstanding the foregoing, at any time at which any shares of Common
Stock or Non-Voting Common Stock are held by a Regulated Stockholder which
is subject to the provisions of Regulation Y, the Corporation will not,
without first giving such Regulated Stockholder 30 days prior written
notice, directly or indirectly redeem, purchase, acquire or take any other
action affecting outstanding shares of Common Stock or Non-Voting Common
Stock if such action will increase above 4.9% the percentage of any class
of voting securities of the Corporation, or increase above 24.9% the
percentage of outstanding Common Stock or Non-Voting Common Stock, owned,
held or controlled by any Regulated Stockholder and its Affiliates (other
than a stockholder which waives in writing its rights under this paragraph
(D)).
(e) The Corporation will at all times reserve and keep available
out of its authorized but unissued shares of Common Stock and Non-Voting
Common Stock or its treasury shares, solely for the purpose of issuance
upon conversion of shares of Common Stock and Non-Voting Common Stock, such
number of shares of such class as shall then be issuable upon the
conversion of all outstanding shares of Common Stock and Non-Voting Common
Stock.
(f) The issue of certificates evidencing shares of any class of
Common Shares upon conversion of shares of any other class of Common Shares
shall be made without charge to the holders of such shares for any issue
tax in respect thereof or other cost incurred by the Corporation in
connection with such conversion; provided, however, the Corporation shall
not be required to pay any tax that may be payable in respect of any
transfer involved in the issuance and delivery of any certificate in a name
other than that of the holder of the Common Shares converted.
(4) If the Corporation shall in any manner subdivide (by stock
split, stock dividend or otherwise) or combine (by reverse stock split or
otherwise) the outstanding shares of the Common Stock or the Non-Voting
Common Stock, the outstanding shares of each other class of Common Shares
shall be proportionately subdivided or combined, as the case may be, and
effective provision shall be made for the protection of all conversion
rights hereunder. In case of any reorganization, reclassification or change
of shares of Common Stock or Non-Voting Common Stock (other than a change
in par value, or from par value to no par value as a result of a
subdivision or combination), or in case of any consolidation of the
Corporation with one or more other corporations or a merger of the
Corporation with another corporation (other than a consolidation or merger
in which the Corporation is the continuing corporation and which does not
result in any reclassification or change of outstanding shares of Common
Stock or Non-Voting Common Stock), or in case of any sale, lease or other
disposition to another corporation (other than a wholly-owned subsidiary of
the Corporation) of all or substantially all the assets of the Corporation,
each holder of Common Shares, irrespective of class, shall have the right
at any time thereafter, so long as the conversion right hereunder with
respect to such Common Shares would exist had such event not occurred, to
convert such shares into the kind and amount of shares of stock and other
securities and property (including cash) receivable upon such
reorganization, reclassification, change, consolidation, merger, sale,
lease or other disposition by a holder of the number of shares of the class
of Common Shares into which such Common Shares might have been converted
immediately prior to such reorganization, reclassification, change,
consolidation, merger, sale, lease or other disposition. In the event of
such a reorganization, reclassification, change, consolidation, merger,
sale, lease or other disposition, effective provision shall be made in the
certificate of incorporation of the resulting or surviving corporation or
otherwise for the protection of the conversion rights of the Common Shares
of each class that shall be applicable, as nearly as reasonably may be, to
any such other shares of stock and other securities and property
deliverable upon conversion of Common Shares into which such Common Shares
might have been converted immediately prior to such event. The Corporation
shall use commercially reasonable efforts (taking into account all of the
facts and circumstances it considers appropriate at the time) not to engage
in any merger, consolidation or recapitalization pursuant to which any
holder of shares of Non-Voting Common Stock would be required to take (i)
any voting securities which would cause such holder to violate any law,
regulation or other requirement of any governmental body applicable to such
holder, or (ii) any securities convertible into voting securities which if
such conversion took place would cause such holder to violate any law,
regulation or other requirement of any governmental body applicable to such
holder other than securities which are specifically provided to be
convertible only in the event that such conversion may occur without any
such violation. In the event that, after using commercially reasonable
efforts to put in place alternative arrangements to a merger, consolidation
or recapitalization which would cause the violations referred to in the
preceding sentence to occur, the Corporation determines that such a merger,
consolidation or recapitalization is to be consummated, the Corporation
shall give each holder of shares of Non-Voting Common Stock not less than
30 days prior written notice of such merger, consolidation or
recapitalization and upon the request of such holder, the Corporation shall
use commercially reasonable efforts to assist such holder in selling all or
any portion of such holder's stock or other securities of the Corporation
or any successor to the Corporation.
ARTICLE FIVE
------------
The name and mailing address of the sole incorporator are as
follows:
NAME MAILING ADDRESS
---- ---------------
Maureen L. Maher 200 East Randolph Drive
Suite 5700
Chicago, IL 60601
ARTICLE SIX
-----------
The corporation is to have perpetual existence.
ARTICLE SEVEN
-------------
In furtherance and not in limitation of the powers conferred by
statute, the board of directors of the corporation is expressly authorized
to make, alter or repeal the by-laws of the corporation.
ARTICLE EIGHT
-------------
Meetings of stockholders may be held within or without the State
of Delaware, as the by-laws of the corporation may provide. The books of
the corporation may be kept outside the State of Delaware at such place or
places as may be designated from time to time by the board of directors or
in the by-laws of the corporation. Election of directors need not be by
written ballot unless the by-laws of the corporation so provide.
ARTICLE NINE
------------
To the fullest extent permitted by the General Corporation Law of
the State of Delaware as the same exists or may hereafter be amended, a
director of this corporation shall not be liable to the corporation or its
stockholders for monetary damages for a breach of fiduciary duty as a
director. Any repeal or modification of this ARTICLE NINE shall not
adversely affect any right or protection of a director of the corporation
existing at the time of such repeal or modification.
ARTICLE TEN
-----------
The corporation expressly elects not to be governed by Section
203 of the General Corporation Law of the State of Delaware.
ARTICLE ELEVEN
--------------
The corporation reserves the right to amend, alter, change or
repeal any provision contained in this certificate of incorporation in the
manner now or hereafter prescribed herein and by the laws of the State of
Delaware, and all rights conferred upon stockholders herein are granted
subject to this reservation.
EXHIBIT 4.2
BY-LAWS
OF
SOVEREIGN SPECIALTY CHEMICALS, INC.
A Delaware Corporation,
As Amended on December 27, 1999
ARTICLE I
---------
OFFICES
-------
Section 1. Registered Office. The registered office of the Corporation
in the State of Delaware shall be located at 1013 Centre Road, in the City
of Wilmington, Delaware, County of New Castle. The name of the
Corporation's registered agent at such address shall be Corporation Service
Company. The registered office and/or registered agent of the Corporation
may be changed from time to time by action of the board of directors.
Section 2. Other Offices. The Corporation 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.
ARTICLE II
----------
MEETINGS OF STOCKHOLDERS
------------------------
Section 1. Place and Time of Meetings. An annual meeting of the
stockholders shall be held each year within one hundred eighty (180) days
after the close of the immediately preceding fiscal year of the Corporation
for the purpose of electing directors and conducting such other proper
business as may come before the meeting. The date, time and place of the
annual meeting shall be determined by the Chairman of the Board of the
Corporation; provided, that if the Chairman of the Board does not act, the
board of directors shall determine the date, time and place of such
meeting.
Section 2. Special Meetings. Special meetings of stockholders may be
called for any purpose and may be held at such time and place, within or
without the State of Delaware, as shall be stated in a notice of meeting or
in a duly executed waiver of notice thereof. Such meetings may be called at
any time by the board of directors or the Chairman of the Board and shall
be called by the Chairman of the Board upon the written request of holders
of shares entitled to cast not less than fifty percent of the votes at the
meeting. Such written request shall state the purpose or purposes of the
meeting and shall be delivered to the Chairman of the Board. On such
written request, the Chairman of the Board shall fix a date and time for
such meeting within two days of the date requested for such meeting in such
written request.
Section 3. Place of Meetings. The board of directors may designate any
place, either within or without the State of Delaware, as the place of
meeting for any annual meeting or for any special meeting called by the
board of directors. If no designation is made, or if a special meeting be
otherwise called, the place of meeting shall be the principal executive
office of the Corporation.
Section 4. Notice. Whenever stockholders are required or permitted to
take action at a meeting, written or printed notice stating the place,
date, time, and, in the case of special meetings, the purpose or purposes,
of such meeting, shall be given to each stockholder entitled to vote at
such meeting not less than ten (10) nor more than sixty (60) days before
the date of the meeting. All such notices shall be delivered, either
personally or by mail, by or at the direction of the board of directors,
the Chairman of the Board, the President or the Secretary, and if mailed,
such notice shall be deemed to be delivered when deposited in the United
States mail, postage prepaid, addressed to the stockholder at his, her or
its address as the same appears on the records of the Corporation.
Attendance of a person at a meeting shall constitute a waiver of notice of
such meeting, except when the person attends 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.
Section 5. Stockholders List. The officer having charge of the stock
ledger of the Corporation shall make, at least ten (10) days before every
meeting of the stockholders, a complete list of the stockholders entitled
to vote at such 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 so specified, at the
place where the meeting is to be held. The list shall also be produced and
kept at the time and place of the meeting during the whole time thereof,
and may be inspected by any stockholder who is present.
Section 6. Quorum. The holders of a majority of the outstanding shares
of capital stock, present in person or represented by proxy, shall
constitute a quorum at all meetings of the stockholders, except as
otherwise provided by statute or by the certificate of incorporation. If a
quorum is not present, the holders of a majority of the shares present in
person or represented by proxy at the meeting, and entitled to vote at the
meeting, may adjourn the meeting to another time and/or place. When a
quorum is once present to commence a meeting of stockholders, it is not
broken by the subsequent withdrawal of any stockholders or their proxies.
When a quorum is once present to commence a meeting of stockholders, it is
not broken by the subsequent withdrawal of any stockholder or their
proxies.
Section 7. Adjourned Meetings. When a meeting is adjourned to another
time and 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.
Section 8. Vote Required. When a quorum is present, the affirmative
vote of the majority of shares present in person or represented by proxy at
the meeting and entitled to vote on the subject matter shall be the act of
the stockholders, unless the question is one upon which by express
provisions of an applicable law or of the certificate of incorporation a
different vote is required, in which case such express provision shall
govern and control the decision of such question.
Section 9. Voting Rights. Except as otherwise provided by the General
Corporation Law of the State of Delaware or by the certificate of
incorporation of the Corporation or any amendments thereto and subject to
Section 3 of Article VI hereof, every stockholder shall at every meeting of
the stockholders be entitled to one vote in person or by proxy for each
share of common stock held by such stockholder.
Section 10. Proxies. Each stockholder entitled to vote at a meeting of
stockholders or to express consent or dissent to corporate action in
writing without a meeting may authorize another person or persons to act
for him or her by proxy, but no such proxy shall be voted or acted upon
after three (3) years from its date, unless the proxy provides for a longer
period. At each meeting of the stockholders, and before any voting
commences, all proxies filed at or before the meeting shall be submitted to
and examined by the Secretary or a person designated by the Secretary, and
no shares may be represented or voted under a proxy that has been found to
be invalid or irregular. A duly executed proxy shall be irrevocable if it
states that it is irrevocable and if, and only as long as, it is coupled
with an interest sufficient in law to support an irrevocable power. A proxy
may be made irrevocable regardless of whether the interest with which it is
coupled is an interest in the stock itself or an interest in the
Corporation generally. Any proxy is suspended when the person executing the
proxy is present at a meeting of stockholders and elects to vote, except
that when such proxy is coupled with an interest and the fact of the
interest appears on the face of the proxy, the agent named in the proxy
shall have all voting and other rights referred to in the proxy,
notwithstanding the presence of the person executing the proxy.
Section 11. Action by Written Consent. Unless otherwise provided in
the certificate of incorporation, any action required to be taken at any
annual or special meeting of stockholders of the Corporation or any action
which may be taken at any annual or special meeting of such 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 and
bearing the dates of signature of the stockholders who signed the consent
or consents, shall be signed by the holders of outstanding stock having not
less than the minimum number of votes that would be necessary to authorize
or take such action at a meeting at which all shares entitled to vote
thereon were present and voted and shall be delivered to the Corporation by
delivery to its registered office in the state of Delaware, or the
Corporation's principal place of business, or an officer or agent of the
Corporation having custody of the book or books in which proceedings of
meetings of the stockholders are recorded. Delivery made to the
Corporation's registered office shall be by hand or by certified or
registered mail, return receipt requested. All consents properly delivered
in accordance with this section shall be deemed to be recorded when so
delivered. 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 as required by this section,
written consents signed by the holders of a sufficient number of shares to
take such corporate action are so recorded. 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. Any action taken pursuant to such written consent or consents of
the stockholders shall have the same force and effect as if taken by the
stockholders at a meeting thereof.
ARTICLE III
-----------
DIRECTORS
---------
Section 1. General Powers. The business and affairs of the Corporation
shall be managed by or under the direction of the board of directors.
Section 2. Number, Election and Term of Office. The number of
directors which shall constitute the first board shall be three (3).
Thereafter, the number of directors shall be established from time to time
by resolution of the board. The 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 in the election of directors. The directors
shall be elected in this manner at the annul meeting of the stockholders,
except as provided in, Section 4 of this Article III. Each director elected
shall hold office until a successor is duly elected and qualified or until
his or her earlier death, resignation or removal as hereinafter provided.
Section 3. Removal and Resignation. Any director or the entire board
of directors may be removed at any time, with or without cause, by the
holders of a majority of the shares then entitled to vote at an election of
directors. Whenever the holders of any class or series are entitled to
elect one or more directors by the provisions of the Corporation's
certificate of incorporation, the provisions of this section shall apply,
in respect to the removal without cause of a director or directors so
elected, to the vote of the holders of the outstanding shares of that class
or series and not to the vote of the outstanding shares as a whole.
Section 4. Vacancies. Vacancies and newly created directorships
resulting from any increase in the authorized number of directors may be
filled by the affirmative vote of a majority of the directors then in
office, although less than a quorum, and any director so elected to fill
any such vacancy or newly created directorship shall hold office until his
successor is elected and qualified or until his earlier resignation or
removal.
Section 5. Annual Meetings. The annual meeting of each newly elected
board of directors shall be held without other notice than this by-law
immediately after, and at the same place as, the annual meeting of
stockholders.
Section 6. Other Meetings and Notice. Regular meetings, other than the
annual meeting, of the board of directors may be held without notice at
such time and at such place as shall from time to time be determined by
resolution of the board. Special meetings of the board of directors may be
called by or at the request of the Chairman of the Board on at least
twenty-four (24) hours notice to each director, either personally, by
telephone, by mail, or by telegraph; in like manner and on like notice the
Chairman of the Board must call a special meeting on the written request of
at least one of the directors.
Section 7. Quorum, Required Vote and Adjournment. A majority of the
total number of directors shall constitute a quorum for the transaction of
business. The vote of a majority of directors present at a meeting at which
a quorum is present shall be the act of the board of directors. If a quorum
shall not be present at any meeting of the board of directors, the
directors present thereat may adjourn the meeting from time to time,
without notice other than announcement at the meeting, until a quorum shall
be present.
Section 8. Committees. The board of directors may, by resolution
passed by a majority of the whole board, designate one or more committees,
each committee to consist of one or more of the directors of the
Corporation, which to the extent provided in such resolution or these
By-laws shall have and may exercise the powers of the board of directors in
the management and affairs of the Corporation except as otherwise limited
by law. 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. Such committee or
committees shall have such name or names as may be determined from time to
time by resolution adopted by the board of directors. Each committee shall
keep regular minutes of its meetings and report the same to the board of
directors when required.
Section 9. Committee Rules. Each committee of the board of directors
may fix its own rules of procedure and shall hold its meetings as provided
by such rules, except as may otherwise be provided by a resolution of the
board of directors designating such committee. In the event that a member
and that member's alternate, if alternates are designated by the board of
directors as provided in Section 8 of this Article III, of such committee
is or are absent or disqualified, the member or members thereof present at
any meeting and not disqualified from voting, whether or not such member or
members constitute a quorum, may unanimously appoint another member of the
board of directors to act at the meeting in place of any such absent or
disqualified member.
Section 10. Communications Equipment. Members of the board of
directors or any committee thereof may participate in and act at any
meeting of such board or committee through the use of a conference
telephone or other communications equipment by means of which all persons
participating in the meeting can hear each other, and participation in the
meeting pursuant to this section shall constitute presence in person at the
meeting.
Section 11. Waiver of Notice and Presumption of Assent. Any member of
the board of directors or any committee thereof who is present at a meeting
shall be conclusively presumed to have waived notice of such meeting except
when such member attends 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. Such member shall be
conclusively presumed to have assented to any action taken unless his or
her dissent shall be entered in the minutes of the meeting or unless his or
her written dissent to such action shall be filed with the person acting as
the secretary of the meeting before the adjournment thereof or shall be
forwarded by registered mail to the Secretary of the Corporation
immediately after the adjournment of the meeting. Such right to dissent
shall not apply to any member who voted in favor of such action.
Section 12. Action by Written Consent. Unless otherwise restricted by
the certificate of incorporation, 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 or
committee, as the case may be, consent thereto in writing, and the writing
or writings are filed with the minutes of proceedings of the board or
committee.
ARTICLE IV
----------
OFFICERS
--------
Section 1. Number. The officers of the Corporation shall be elected by
the board of directors and shall consist of a Chairman of the Board, a
President and Chief Executive Officer, a President, a Chief Financial
Officer, one or more Vice-Presidents, a Treasurer, a Secretary, and such
other officers and assistant officers as may be deemed necessary or
desirable by the board of directors. Any number of offices may be held by
the same person. In its discretion, the board of directors may choose not
to fill any office for any period as it may deem advisable, except that the
offices of Chairman of the Board and President and Chief Executive Officer
shall be filled as expeditiously as possible.
Section 2. Election and Term of Office. The officers of the
Corporation shall be elected annually by the board of directors at its
first meeting held after each annual meeting of stockholders or as soon
thereafter as conveniently may be. Vacancies may be filled or new offices
created and filled at any meeting of the board of directors. Each officer
shall hold office until a successor is duly elected and qualified or until
his or her earlier death, resignation or removal as hereinafter provided.
Section 3. Removal. Any officer or agent elected by the board of
directors may be removed by the board of directors whenever in its judgment
the best interests of the Corporation would be served thereby, but such
removal shall be without prejudice to the contract rights, if any, of the
person so removed.
Section 4. Vacancies. Any vacancy occurring in any office because of
death, resignation, removal, disqualification or otherwise, may be filled
by the board of directors for the unexpired portion of the term by the
board of directors then in office.
Section 5. Compensation. Compensation of all officers shall be fixed
by the board of directors, and no officer shall be prevented from receiving
such compensation by virtue of his or her also being a director of the
corporation.
Section 6. Chairman of the Board. The Chairman of the Board shall be
the chief executive officer of the corporation, and shall have the powers
and perform the duties incident to that position. Subject to the powers of
the board of directors, he or she shall be in the general and active charge
of the entire business and affairs of the corporation, and shall be its
chief policy making officer. He or she shall preside at all meetings of the
board of directors and stockholders and shall have such other powers and
perform such other duties as may be prescribed by the board of directors or
provided in these By-laws. Whenever the President and Chief Executive
Officer is unable to serve, by reason of sickness, absence or otherwise,
the Chairman of the Board shall perform all the duties and responsibilities
and exercise all the powers of the President and Chief Executive Officer.
Section 7. President and Chief Executive Officer. The President and
Chief Executive Officer shall, subject to the powers of the board of
directors and the Chairman of the Board, have general charge of the
business, affairs and property of the corporation, and control over its
officers, agents and employees; and shall see that all orders and
resolutions of the board of directors are carried into effect. The
President and Chief Executive Officer shall execute bonds, mortgages and
other contracts requiring a seal under the seal of the corporation, except
where required or permitted by law to be otherwise signed and executed and
except where the signing and execution thereof shall be expressly delegated
by the board of directors to some other officer or agent of the
corporation. The President and Chief Executive Officer shall have such
other powers and perform such other duties as may be prescribed by the
Chairman of the Board or the board of directors or as may be provided in
these By-laws.
Section 8. Chief Financial Officer. The Chief Financial Officer of the
Corporation shall, under the direction of the Chairman of the Board, be
responsible for all financial and accounting matters of the Corporation.
The Chief Financial Officer shall have such other powers and perform such
other duties as may be prescribed by the Chairman of the Board or the board
of directors or as may be provided in these By-laws.
Section 9. Vice-Presidents. The Vice-President, or if there shall be
more than one, the Vice-Presidents in the order determined by the board of
directors, shall, in the absence or disability of the President, act with
all of the powers and be subject to all the restrictions of the President.
The Vice-Presidents shall also perform such other duties and have such
other powers as the board of directors, the Chairman of the Board or these
Bylaws may, from time to time, prescribe.
Section 10. The Secretary and Assistant Secretaries. The Secretary
shall attend all meetings of the board of directors, all meetings of the
committees thereof and all meetings of the stockholders and record all the
proceedings of the meetings in a book or books to be kept for that purpose.
Under the Chairman of the Board's supervision, the Secretary shall give, or
cause to be given, all notices required to be given by these By-laws or by
law; shall have such powers and perform such duties as the board of
directors, the Chairman of the Board or these By-laws may, from time to
time, prescribe; and shall have custody of the corporate seal of the
Corporation. The Secretary, or an Assistant Secretary, shall have authority
to affix the corporate seal to any instrument requiring it and when so
affixed, it may be attested by his or her signature or by the signature of
such Assistant Secretary. The board of directors may give general authority
to any other officer to affix the seal of the Corporation and to attest the
affixing by his or her signature. The Assistant Secretary, or if there be
more than one, the Assistant Secretaries in the order determined by the
board of directors, shall, in the absence or disability of the Secretary,
perform the duties and exercise the powers of the Secretary and shall
perform such other duties and have such other powers as the board of
directors, the Chairman of the Board or the Secretary may, from time to
time, prescribe.
Section 11. The Treasurer and Assistant Treasurer. The Treasurer shall
have the custody of the corporate funds and securities; shall keep full and
accurate accounts of receipts and disbursements in books belonging to the
Corporation; shall deposit all monies and other valuable effects in the
name and to the credit of the Corporation as may be ordered by the board of
directors; shall cause the funds of the Corporation to be disbursed when
such disbursements have been duly authorized, taking proper vouchers for
such disbursements; and shall render to the Chairman of the Board and the
board of directors at its regular meeting or when the board of directors so
requires, an account of the Corporation; shall have such powers and perform
such duties as the board of directors, the Chairman of the Board or these
By-laws may, from time to time, prescribe. If required by the board of
directors, the Treasurer shall give the Corporation a bond (which shall be
rendered every six (6) years) in such sums and with such surety or sureties
as shall be satisfactory to the board of directors for the faithful
performance of the duties of the office of Treasurer and for the
restoration to the Corporation, in case of death, resignation, retirement,
or removal from office, of all books, papers, vouchers, money, and other
property of whatever kind in the possession or under the control of the
Treasurer belonging to the Corporation. The Assistant Treasurer, or if
there shall be more than one, the Assistant Treasurers in the order
determined by the board of directors, shall in the absence or disability of
the Treasurer, perform the duties and exercise the powers of the Treasurer.
The Assistant Treasurers shall perform such other duties and have such
other powers as the board of directors, the and Chairman of the Board or
Treasurer may, from time to time, prescribe.
Section 12. Other Officers, Assistant Officers and Agents. Officers,
assistant officers and agents, if any, other than those whose duties are
provided for in these Bylaws, shall have such authority and perform such
duties as may from time to time be prescribed by resolution of the board of
directors.
Section 13. Absence or Disability of Officers. In the case of the
absence or disability of any officer of the Corporation and of any person
hereby authorized to act in such officer's place during such officer's
absence or disability, the board of directors may by resolution delegate
the powers and duties of such officer to any other officer or to any
director, or to any other person whom it may select.
ARTICLE V
---------
INDEMNIFICATION OF OFFICERS, DIRECTORS AND OTHERS
-------------------------------------------------
Section 1. Nature of Indemnity. Each person who was or is made a party
or is threatened to be made a party to or is involved in any action, suit
or proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he or she, or a
person of whom he or she is the legal representative, is or was a director
or officer, of the Corporation or is or was serving at the request of the
Corporation as a director, officer, employee, fiduciary, or agent of
another Corporation or of a partnership, joint venture, trust or other
enterprise, shall be indemnified and held harmless by the Corporation to
the fullest extent which it is empowered to do so unless prohibited from
doing so by the General Corporation Law of the State of Delaware, as the
same exists or may hereafter be amended (but, in the case of any such
amendment, only to the extent that such amendment permits the Corporation
to provide broader indemnification rights than said law permitted the
Corporation to provide prior to such amendment) against all expense,
liability and loss (including attorneys' fees actually and reasonably
incurred by such person in connection with such proceeding) and such
indemnification shall inure to the benefit of his or her heirs, executors
and administrators; provided, however, that, except as provided in Section
2 hereof, the Corporation shall indemnify any such person seeking
indemnification in connection with a proceeding initiated by such person
only if such proceeding was authorized by the board of directors of the
Corporation. The right to indemnification conferred in this Article V shall
be a contract right and, subject to Sections 2 and 5 hereof, shall include
the right to be paid by the Corporation the expenses incurred in defending
any such proceeding in advance of its final disposition. The Corporation
may, by action of its board of directors, provide indemnification to
employees and agents of the Corporation with the same scope and effect as
the foregoing indemnification of directors and officers.
Section 2. Procedure for Indemnification of Directors and Officers.
Any indemnification of a director or officer of the Corporation under
Section 1 of this Article V or advance of expenses under Section 5 of this
Article V shall be made promptly, and in any event within thirty (30) days,
upon the written request of the director or officer. If a determination by
the Corporation that the director or officer is entitled to indemnification
pursuant to this Article V is required, and the Corporation fails to
respond within sixty (60) days to a written request for indemnity, the
Corporation shall be deemed to have approved the request. If the
Corporation denies a written request for indemnification or advancing of
expenses, in whole or in part, or if payment in full pursuant to such
request is not made within thirty (30) days, the right to indemnification
or advances as granted by this Article V shall be enforceable by the
director or officer in any court of competent jurisdiction. Such person's
costs and expenses incurred in connection with successfully establishing
his or her right to indemnification, in whole or in part, in any such
action shall also be indemnified by the Corporation. It shall be a defense
to any such action (other than an action brought to enforce a claim for
expenses incurred in defending any proceeding in advance of its final
disposition where the required undertaking, if any, has been tendered to
the Corporation) that the claimant has not met the standards of conduct
which make it permissible under the General Corporation Law of the State of
Delaware for the Corporation to indemnify the claimant for the amount
claimed, but the burden of such defense shall be on the Corporation.
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 or she has met
the applicable standard of conduct set forth in the General Corporation Law
of the State of Delaware, 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 the
claimant has not met the applicable standard of conduct.
Section 3. Article Not Exclusive. The rights to indemnification and
the payment of expenses incurred in defending a proceeding in advance of
its final disposition conferred in this Article V shall not be exclusive of
any other right which any person may have or hereafter acquire under any
statute, provision of the certificate of incorporation, by-law, agreement,
vote of stockholders or disinterested directors or otherwise.
Section 4. Insurance. The Corporation may purchase and maintain
insurance on its own behalf and on behalf of any person who is or was a
director, officer, employee, fiduciary, or agent of the Corporation or was
serving at the request of the Corporation as a director, officer, employee
or agent of another Corporation, partnership, joint venture, trust or other
enterprise against any liability asserted against him or her and incurred
by him or her in any such capacity, whether or not the Corporation would
have the power to indemnify such person against such liability under this
Article V.
Section 5. Expenses. Expenses incurred by any person described in
Section 1 of this Article V in defending a proceeding shall be paid by the
Corporation in advance of such proceeding's final disposition unless
otherwise determined by the board of directors in the specific case upon
receipt of an undertaking by or on behalf of the director or officer to
repay such amount if it shall ultimately be determined that he or she is
not entitled to be indemnified by the Corporation. Such expenses incurred
by other employees and agents may be so paid upon such terms and
conditions, if any, as the board of directors deems appropriate.
Section 6. Employees and Agents. Persons who are not covered by the
foregoing provisions of this Article V and who are or were employees or
agents of the Corporation, or who are or were serving at the request of the
Corporation as employees or agents of another Corporation, partnership,
joint venture, trust or other enterprise, may be indemnified to the extent
authorized at any time or from time to time by the board of directors.
Section 7. Contract Rights. The provisions of this Article V shall be
deemed to be a contract right between the Corporation and each director or
officer who serves in any such capacity at any time while this Article V
and the relevant provisions of the General Corporation Law of the State of
Delaware or other applicable law are in effect, and any repeal or
modification of this Article V or any such law shall not affect any rights
or obligations then existing with respect to any state of facts or
proceeding then existing.
Section 8. Merger or Consolidation. For purposes of this Article V,
references to "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 this Article V with respect to the
resulting or surviving Corporation as he or she would have with respect to
such constituent Corporation if its separate existence had continued.
ARTICLE VI
----------
CERTIFICATES OF STOCK
---------------------
Section 1. Form. 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, the President and Chief Executive
Officer, the Chief Financial Officer or a Vice-President and the Secretary
or an Assistant Secretary of the Corporation, certifying the number of
shares owned by such holder in the Corporation. If such a certificate is
countersigned (1) by a transfer agent or an assistant transfer agent other
than the Corporation or its employee or (2) by a registrar, other than the
Corporation or its employee, the signature of any such Chairman of the
Board, President and Chief Executive Officer, Chief Financial Officer,
Vice-President, Secretary, or Assistant Secretary may be facsimiles. In
case any officer or officers who have signed, or whose facsimile signature
or signatures have been used on, any such certificate or certificates shall
cease to be such officer or officers of the Corporation whether because of
death, resignation or otherwise before such certificate or certificates
have been delivered by the Corporation, such certificate or certificates
may nevertheless be issued and delivered as though the person or persons
who signed such certificate or certificates or whose facsimile signature or
signatures have been used thereon had not ceased to be such officer or
officers of the Corporation. All certificates for shares shall be
consecutively numbered or otherwise identified. The name of the person to
whom the shares represented thereby are issued, with the number of shares
and date of issue, shall be entered on the books of the Corporation. Shares
of stock of the Corporation shall only be transferred on the books of the
Corporation by the holder of record thereof or by such holders attorney
duly authorized in writing, upon surrender to the Corporation of the
certificate or certificates for such shares endorsed by the appropriate
person or persons, with such evidence of the authenticity of such
endorsement, transfer, authorization, and other matters as the Corporation
may reasonably require, and accompanied by all necessary stock transfer
stamps. In that event, it shall be the duty of the Corporation to issue a
new certificate to the person entitled thereto, cancel the old certificate
or certificates, and record the transaction on its books. The board of
directors may appoint a bank or trust company organized under the laws of
the United States or any state thereof to act as its transfer agent or
registrar, or both in connection with the transfer of any class or series
of securities of the Corporation.
Section 2. Lost Certificates. The board of directors may direct a new
certificate or certificates to be issued in place of any certificate or
certificates previously 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. When authorizing such issue of a new certificate or
certificates, the board of directors may, in its discretion and as a
condition precedent to the issuance thereof, require the owner of such
lost, stolen, or destroyed certificate or certificates, or his or her legal
representative, to give the Corporation a bond sufficient to indemnify the
Corporation against any claim that may be made against the Corporation on
account of the loss, theft or destruction of any such certificate or the
issuance of such new certificate.
Section 3. Fixing a Record Date for Stockholder Meetings. 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 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 the close of business on the next day
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.
Section 4. Fixing a Record Date for Action by Written Consent. 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 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 directors is required by statute, 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 the
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 statute, 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.
Section 5. Fixing a Record Date for Other Purposes. In order that the
Corporation may determine the stockholders entitled to receive payment of
any dividend or other distribution or allotment or any rights or the
stockholders entitled to exercise any rights in respect of any change,
conversion or exchange of stock, or for the purposes of any other lawful
action, the board of directors may fix 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.
Section 6. Registered Stockholders. Prior to the surrender to the
Corporation of the certificate or certificates for a share or shares of
stock with a request to record the transfer of such share or shares, the
Corporation may treat the registered owner as the person entitled to
receive dividends, to vote, to receive notifications, and otherwise to
exercise all the rights and powers of an owner. The Corporation 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.
Section 7. Subscriptions for Stock. Unless otherwise provided for in
the subscription agreement, subscriptions for shares shall be paid in full
at such time, or in such installments and at such times, as shall be
determined by the board of directors. Any call made by the board of
directors for payment on subscriptions shall be uniform as to all shares of
the same class or as to all shares of the same series. In case of default
in the payment of any installment or call when such payment is due, the
Corporation may proceed to collect the amount due in the same manner as any
debt due the Corporation.
ARTICLE VII
-----------
GENERAL PROVISIONS
------------------
Section 1. 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 at any regular or special
meeting, pursuant to law. Dividends may be paid in cash, in property, or in
shares of the capital stock, subject to the provisions of the certificate
of incorporation. 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 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 any other purpose and the directors may modify or abolish
any such reserve in the manner in which it was created.
Section 2. Checks, Drafts or Orders. All checks, drafts, or other
orders for the payment of money by or to the Corporation and all notes and
other evidences of indebtedness issued in the name of the Corporation shall
be signed by such officer or officers, agent or agents of the Corporation,
and in such manner, as shall be determined by resolution of the board of
directors or a duly authorized committee thereof.
Section 3. Contracts. The board of directors may authorize any officer
or officers, or any agent or agents, of the Corporation to enter into any
contract or to execute and deliver any instrument in the name of and on
behalf of the Corporation, and such authority may be general or confined to
specific instances.
Section 4. Loans. 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 subsidiary, including any officer or employee who is
a director of the Corporation or its subsidiary, whenever, in the judgment
of the directors, such loan, guaranty or assistance may reasonably be
expected to benefit the Corporation. The loan, guaranty 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, without
limitation, a pledge of shares of stock of the Corporation. Nothing in this
section contained shall be deemed to deny, limit or restrict the powers of
guaranty or warranty of the Corporation at common law or under any statute.
Section 5. Fiscal Year. The fiscal year of the Corporation shall be
fixed by resolution of the board of directors.
Section 6. Corporate Seal. The board of directors shall provide a
corporate seal which shall be in the form of a circle and shall have
inscribed thereon the name of the Corporation and the words "Corporate
Seal, Delaware". The seal may be used by causing it or a facsimile thereof
to be impressed or affixed or reproduced or otherwise.
Section 7. Voting Securities Owned By Corporation. Voting securities
in any other corporation held by the Corporation shall be voted by the
President and Chief Executive Officer, unless the board of directors
specifically confers authority to vote with respect thereto, which
authority may be general or confined to specific instances. upon some other
person or officer. Any person authorized to vote securities shall have the
power to appoint proxies, with general power of substitution.
Section 8. Inspection of Books and Records. Any stockholder of record,
in person or by attorney or other agent, shall, upon written demand under
oath stating the purpose thereof, have the right during the usual hours for
business to inspect for any proper purpose the Corporation's stock ledger,
a list of its stockholders, and its other books and records, and to make
copies or extracts therefrom. A proper purpose shall mean any purpose
reasonably related to such person's interest as a stockholder. In every
instance where an attorney or other agent shall be the person who seeks the
right to inspection, the demand under oath shall be accompanied by a power
of attorney or such other writing which authorizes the attorney or other
agent to so act on behalf of the stockholder. The demand under oath shall
be directed to the Corporation at its registered office in the State Of
Delaware or at its principal place of business.
Section 9. Section Headings. Section headings in these By-laws are for
convenience of reference only and shall not be given any substantive effect
in limiting or otherwise construing any provision herein.
Section 10. Inconsistent Provisions. In the event that any provision
of these Bylaws is or becomes inconsistent with any provision of the
certificate of incorporation, the General Corporation Law of the State of
Delaware or any other applicable law, the provision of these By-laws shall
not be given any effect to the extent of such inconsistency but shall
otherwise be given full force and effect.
ARTICLE VIII
------------
AMENDMENTS
----------
These By-laws may be amended, altered, or repealed and new By-laws
adopted at any meeting of the stockholders by a majority vote.
EXHIBIT 4.3
SOVEREIGN SPECIALTY CHEMICALS, INC.
EMPLOYEE STOCK PURCHASE PLAN
1. Name. This plan shall be known as the SOVEREIGN SPECIALTY
CHEMICALS, INC. EMPLOYEE STOCK PURCHASE PLAN (the "Plan").
2. Purpose. The Plan is intended to encourage participation in
the ownership and economic progress of Sovereign Specialty Chemicals, Inc.
(the "Company") by offering employees the opportunity to purchase shares of
the Company's common stock, par value $0.01 per share (the "Common Stock").
3. Administration. The Plan shall be administered by the
Compensation Committee (the "Committee") of the Board of Directors of the
Company (the "Board"), provided, however, that duties shall be administered
by the Board, and all references herein to the Committee shall be deemed to
reference the Board. Subject to the express provisions of the plan, the
Committee shall have the discretion (i) to construe and interpret the Plan,
(ii) to prescribe, amend or rescind rules and regulations relating to the
administration of the Plan and (iii) to make all other determinations
necessary or advisable for the administration of the Plan, including,
without limitation, who shall participate in the Plan, how many shares
shall be sold to each participant and the price at which shares shall be
sold under the Plan. In the absence of the Committee, the Board may take
actions reserved for the Committee hereunder.
4. Stock Subject to Plan. The stock to be offered under the Plan
shall be an aggregate of 20,000 shares of Common Stock. If the outstanding
Common Stock is increased, decreased, or changed into, or exchanged for a
different number or kind of shares or securities of the Company through
reorganization, merger, recapitalization, reclassification, stock split,
stock consolidation or similar transaction, an appropriate and
proportionate adjustment shall be made in the number and kind of shares
which may be sold under the Plan.
5. Price and Payment. The purchase price for the Common Stock
issued pursuant to stock purchase rights awarded under the Plan shall be as
determined by the Committee. Employees who are awarded the right to
purchase shares under the Plan shall pay the purchase price for such shares
by check.
6. Stock Subscription Agreement. Any person who purchases Common
Stock pursuant to the Plan shall enter into a Subscription Agreement with
the Company in substantially the form of Exhibit A or Exhibit B hereto or
any other form approved by the Committee.
7. Amendment and Termination. The Committee may, at any time,
suspend, amend or terminate the Plan; provided, however, that no
suspension, amendment or termination hereof shall amend, alter or impair
any rights or obligations with respect to any Stock previously granted
under the Plan. Unless terminated earlier, this Plan shall terminate on
April 30, 2000.
Dated: January 26, 2000
EXHIBIT 4.4
SOVEREIGN SPECIALTY CHEMICALS, INC.
EMPLOYEE SUBSCRIPTION AGREEMENT
AGREEMENT dated as of [_______], 2000 by and between Sovereign
Specialty Chemicals, Inc., a Delaware corporation (the "Corporation"), and
________ (the "Subscriber").
Section 1. Agreement to Sell and Purchase Securities. Subscriber
agrees to purchase [______] shares of the common stock, par value $0.01 per
share (the "Voting Common Stock"), of the Corporation, at a purchase price
of $100.00 per share. The shares of the Voting Common Stock to be purchased
by the Subscriber pursuant to this Agreement, and the shares of the
non-voting common stock, par value $0.01 per share (the "Non-Voting Common
Stock"), of the Corporation received by the Subscriber upon the voluntary
conversion of his Voting Common Stock in accordance with the Corporation's
Amended and Restated Articles of Incorporation, are referred to as the
"Shares."
Section 2. Closing. The delivery of the Shares to the Subscriber
shall take place at a closing (the "Closing") on ________, 2000 or at such
other date as the Corporation and the Subscriber may agree in writing. The
Subscriber shall pay for the Shares by check or by such other form of
payment acceptable to the Corporation so that at Closing, the Corporation
can deliver the Shares against receipt of cleared funds. The time and date
at and upon which the Closing occurs is herein called the "Closing Date."
Section 3. Representations and Warranties of Subscriber. The
Subscriber for himself represents, warrants and agrees that:
(a) The Subscriber is acquiring the Shares to be acquired by him
hereunder for his own account, for investment and not with a view to the
sale or distribution thereof, nor with any present intention of
distributing or selling the same. Except as expressly provided in this
Agreement, the Subscriber will have no right to Transfer the Shares and
must bear the economic risk of the Subscriber's investment for an
indefinite period of time. There is not now and there may never be any
public market for the Shares. For the purposes of this Agreement,
"Transfer" shall mean any sale, transfer, assignment, exchange, grant of a
participation in, gift, hypothecation, encumbrance, pledge or other
disposition by testamentary bequest, inter vivos transfer or otherwise of
any securities or any interests therein, whether direct or indirect.
(b) The Subscriber is a citizen or resident of the United States
of America and has entered into this Agreement within the United States of
America.
Section 4. Management Fees. The Subscriber hereby acknowledges
and agrees that SSCI Investors LLC ("Investors"), the majority shareholder
of the Corporation, or its affiliates will receive management and other
fees and expenses from the Corporation.
Section 5. Transfer Provisions. The Subscriber and Corporation
agree that the Subscriber is entitled to certain tag along rights, is
subject to certain obligations to Transfer his Shares under certain
circumstances (including termination of employment and certain sales by
Investors) and is subject to certain restrictions on his ability to
Transfer his Shares, all of which are described in Exhibit A.
Section 6. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware without
regard to its rules of conflict of laws. The Subscriber hereby irrevocably
and unconditionally consents to submit to the exclusive jurisdiction of the
courts of the State of Delaware and of the United States of America located
in the State of Delaware for any litigation arising out of or relating to
this Agreement and the transactions contemplated hereby (and agrees not to
commence any litigation relating thereto except in such courts), waives any
objection to the laying of venue of any such litigation in such Delaware
courts and agrees not to plead or claim that such litigation brought in any
such Delaware court has been brought in an inconvenient forum.
Section 7. Assignment; Binding Effect; Third Party Beneficiaries.
Neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by either of the parties hereto (whether by
operation of law or otherwise) without the prior written consent of the
other party. Subject to the preceding sentence, this Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and assigns. Investors and its affiliates are third
party beneficiaries under this Agreement. Notwithstanding anything
contained in this Agreement to the contrary, nothing in this Agreement
(other than as set forth in the preceding sentence), express or implied, is
intended to confer on any person other than the parties hereto or their
respective heirs, successors, executors, administrators and assigns any
rights, remedies, obligations or liabilities under or by reason of this
Agreement.
Section 8. Entire Agreement. This Agreement constitutes the
entire agreement among the parties with respect to the subject matter
hereof and supersede all prior agreements and understandings (oral and
written) among the parties with respect thereto.
Section 9. Incorporation of Exhibit. Exhibit A hereto is hereby
incorporated herein and made a part hereof for all purposes as if fully set
forth herein.
Section 10. 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 otherwise 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.
Section 11. Termination. The provisions of Sections 3, 4 and 5 of
Exhibit A shall terminate and shall cease to be binding on the parties
hereto upon the initial public offering ("IPO") of Shares registered under
the U.S. Securities Act of 1933, as amended, whether by the Corporation or
by shareholders.
<PAGE>
IN WITNESS WHEREOF, this Agreement has been duly executed as of
the date first above written.
SOVEREIGN SPECIALTY CHEMICALS, INC.
By:
--------------------------------
Name:
Title:
Address for Notices:
Suite 2200
225 West Washington Street
Chicago, IL 60606
Attn: Chief Financial Officer
SUBSCRIBER
-----------------------------------
[Name]
Subscriber's Address for Notices:
-----------------------------------
-----------------------------------
-----------------------------------
Subscriber's Taxpayer I.D. No:
-----------------------------------
AGREED WITH RESPECT TO
SECTION 4 OF EXHIBIT A:
SSCI INVESTORS LLC
By: SSCI Investors Inc.
By:
-------------------------
Name:
Title:
Address for Notices:
65 East 55th Street
New York, NY 10022
Attn: General Counsel
<PAGE>
Exhibit A
Transfer Provisions
Section 1. Transfer Restrictions. (a) The Subscriber shall not
Transfer all or part of any Shares owned of record by him in violation of
the provisions of this Section. Any Transfer in violation of the provisions
of this Section shall have no effect and be null and void.
(b) So long as such restriction is applicable hereunder or by
law, each of the certificates representing the Shares held by the
Subscriber hereto shall be stamped with the following legend:
THESE SHARES ARE SUBJECT TO CERTAIN LIMITATIONS ON
TRANSFER AND TO CERTAIN VOTING AGREEMENTS AND
OBLIGATIONS AS ARE SET FORTH IN A SUBSCRIPTION
AGREEMENT WITH SOVEREIGN SPECIALTY CHEMICALS, INC.,
INCLUDING, BUT NOT LIMITED TO, RESTRICTIONS ON THEIR
SALE, TRANSFER, PLEDGE OR OTHER DISPOSITION AND VOTING
OBLIGATIONS TO EFFECT CERTAIN TRANSACTIONS. A COPY OF
SUCH AGREEMENT IS ON FILE WITH THE SECRETARY OF
SOVEREIGN SPECIALTY CHEMICALS, INC. SUCH TRANSFER
RESTRICTIONS AND VOTING OBLIGATIONS SHALL BE BINDING ON
FUTURE TRANSFEREES AND HOLDERS.
(c) The Subscriber, by acceptance of the Shares, agrees, prior to
any offer to sell, sale or other disposition or Transfer of part or all of
the Shares, to give written notice to the Corporation of his intention to
effect such sale or other disposition or Transfer. Each such notice shall
describe the manner and circumstances of the proposed sale or other
disposition or Transfer in sufficient detail. The Corporation will advise
the Subscriber within 10 Business Days after submission of such notice,
whether he is entitled to so Transfer the securities. If such holder is
entitled to so Transfer, he shall submit the certificate representing the
Shares to the Corporation in proper form for Transfer and accompanied by
appropriate instruments of Transfer. Such certificate shall also be
accompanied by an undertaking in writing by the transferee to be bound by
all the terms of this Agreement. Each certificate thus transferred (and
each of the stock certificates evidencing any untransferred balance of the
securities evidenced by such certificate) shall bear the restrictive legend
set forth in Section 1(b) of this Exhibit A, unless such legend is not
required by this Agreement. For the purposes of this Agreement, "Business
Day" shall mean a day that is not a Saturday, a Sunday or a day on which
banking institutions in New York, New York are not required to open.
(d) Except as permitted by Section 3, 4 or 5 of this Exhibit A,
the Subscriber shall not, at any time from the date hereof until the
earlier of (x) the IPO and (y) the fifth anniversary of the date of this
Agreement, without the consent of the Corporation and Investors, Transfer
any Shares owned by him ("Restricted Shares").
(e) Notwithstanding any provision to the contrary contained in
this Agreement and upon compliance with Section 1(c) of this Exhibit A:
(i) The Subscriber may Transfer Restricted Shares to: (1) a
spouse or any lineal ancestor or descendant; (2) the trustee or trustees of
a trust or trusts at any time established for the primary benefit of the
Subscriber or the spouse or any lineal ancestor or descendant of the
Subscriber, provided that each and every trustee who may vote any
Restricted Shares shall be the Subscriber or a person referred to in this
paragraph (e)(i) or a bank or trust company; and (3) a partnership or
partnerships, all of the general and limited partners of which are the
Subscriber and/or one or more of the persons referred to with respect to
the Subscriber in this paragraph (e) (other than a bank or trust company);
provided that (x) any such trust or partnership shall have no terms
inconsistent with the obligations of the Subscriber under this Agreement,
and (y) as a condition of Transfer, any Permitted Transferee shall execute
and deliver to the Corporation an agreement in form and substance
reasonably satisfactory to the Corporation pursuant to which the Permitted
Transferee agrees to be bound by all of the provisions of this Agreement.
If any Restricted Shares are transferred to a Permitted Transferee, such
Permitted Transferee shall take and hold such Restricted Shares, and such
Restricted Shares shall be, subject to this Agreement and to the rights,
obligations and restrictions provided herein with respect to the original
Subscriber of such Restricted Shares as of the date of this Agreement, as
if such Permitted Transferee were such original Subscriber.
(ii) Any Transfer of Restricted Shares otherwise permitted
by this paragraph (e) shall not be made unless in compliance with all
applicable laws, including, without limitation, the securities laws of the
United States of America and the states thereof.
(iii) For purposes of this Agreement, "Permitted Transferee"
shall mean any Person to whom Shares are Transferred by the Subscriber or
any previous Permitted Transferees, excluding any Shares Transferred
pursuant to Section 3 or 4 of this Exhibit A and excluding any Shares sold
after the consummation of an IPO in compliance with this Section.
(f) No purported Transfer of any Restricted Share or any share
certificate bearing the legend set forth in Section 1(b) of this Exhibit A
in violation of this Agreement shall be of any force or effect, and no such
Transfer shall be made or recorded on the books of the Corporation.
Section 2. Holdback. Each holder of Shares agrees that, if
requested by the Corporation or the managing underwriters, if any, in
writing, he will not directly or indirectly (x) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant for the sale
of or otherwise dispose of or transfer any shares of Voting or Non-Voting
Common Stock or securities convertible into or exchangeable or exercisable
for shares of Voting or Non-Voting Common Stock or (y) Transfer any Shares
in any manner or during any period required by the managing underwriters.
Requests under this section need not be uniformly applied to all
shareholders.
Section 3. Take Along Rights. If, prior to an IPO, Investors, any
affiliate of Investors, or any officer, director, employee, participant,
shareholder or member of Investors, or any affiliate thereof (together, the
"Investors Parties") desire to Transfer or exchange directly or indirectly
(by merger or otherwise), at least 50% of the shares of Voting and
Non-Voting Common Stock beneficially owned by the Investors Parties (any
such transaction being referred to herein as an "Exit Sale") to any person
who is not an affiliate of the transferring Investors Party or an Affiliate
of Investors, Investors may require, pursuant to a written notice delivered
to the Subscriber at least 20 days prior to the closing of the proposed
Exit Sale, that the Subscriber sell to the prospective purchaser,
concurrently with and on the terms (including price) and subject to the
conditions of the Exit Sale, up to that number of Shares owned by the
Subscriber as shall equal the product of (x) a fraction, the numerator of
which is the number of shares of Voting and Non-Voting Common Stock held by
the Investors Parties proposed to be transferred in the Exit Sale and the
denominator of which is the number of shares of Voting and Non-Voting
Common Stock owned by the Investors Parties, and (y) the number of Shares
owned by the Subscriber. If the Investors Parties propose the Transfer of
all or substantially all of the assets or business, (whether by merger,
sale or otherwise) of the Corporation, then Investors and the Corporation
shall have the right to require the Subscriber to take promptly all action
necessary or appropriate (including voting their Shares in favor of such
transaction) in order to effect such transaction. The Subscriber covenants
and agrees that it shall take such actions as are necessary to consummate
the transactions contemplated by this paragraph.
Section 4. Tag Along Rights. If, prior to an IPO, the Investors
Parties desire to Transfer (other than Transfer to any other Investors
Party or Related Party (as defined below)), directly or indirectly, shares
of Voting or Non-Voting Common Stock, the Investors Parties shall provide
the Subscriber with written notice (the "Tag Along Notice") (which may, but
need not be, incorporated into the notice required pursuant to Section 3 of
this Exhibit A) setting forth:
(i) the number of shares of common stock proposed to be
Transferred;
(ii) the identity of the prospective purchaser;
(iii) all material terms and conditions of such proposed
transaction; and
(iv) that the party transferring shares of common stock
requiring a tag-along notice (the "Transferring Party") is offering the
Subscriber (the "Non-Transferring Party") the right to participate in such
Transfer on a pro rata basis on the same terms and conditions as are
applicable to the Transferring Party, provided that the Investors Parties
may Transfer (x) up to 15% of the shares of Voting and Non-Voting Common
Stock beneficially owned by them in the aggregate as of the Closing Date
without complying with this Section 4 and (y) to other Investors Parties or
the Related Parties. This Section 4 shall not apply to any redemption or
Transfer of shares of Voting or Non-Voting Common Stock made in connection
with any employee stock purchase plans. Tag-Along rights shall not apply,
and the 15% computation referred to in the preceding clause (x) shall
exclude, shares of Voting and Non-Voting Common Stock sold to employees of
the Corporation by any Investors Party or its affiliates within 365 days
after the date hereof.
Within 10 Business Days following the delivery of the Tag
Along Notice, the Non-Transferring Party shall, by notice in writing to the
Transferring Party, have the opportunity to sell to the prospective
purchaser (upon the same terms and conditions as the Transferring Party) up
to that number of Shares owned by such Non-Transferring Party as shall
equal the product of (x) a fraction, the numerator of which is the number
of Shares owned by the Non-Transferring Party as of the date of such
proposed sale and the denominator of which is the aggregate number of
shares of Voting and Non-Voting Common Stock owned as of the date of such
Tag Along Notice by Investors Parties and the Non-Transferring Party and
any other participating person, and (y) the number of shares of Voting and
Non-Voting Common Stock proposed to be sold. The amount of shares of Voting
and Non-Voting Common Stock to be sold by the Transferring Party shall be
reduced if and to the extent necessary to provide for such sale of Shares
by the Non-Transferring Party. If the Non-Transferring Party does not elect
to participate in such sale within the 10 Business Day period referred to
above, the Transferring Party shall be entitled to consummate such sale
without the participation of the Non-Transferring Party.
For the purposes of this Agreement, "Related Party" with
respect to any person shall mean, as of the time of any Transfer, (i) any
person or entity that, directly or indirectly, through one or more
intermediaries, has voting control of, or is under common voting control
with, or is controlled by such person, (ii) with respect to individuals,
such individual's spouse, parents, children, siblings and/or grandchildren,
and (iii) a trust, corporation, partnership or other entity, whose
beneficiaries, shareholders, partners, or owners, or other persons or
entities holding a controlling interest in which, consist solely of such
person and/or such other persons or entities referred to in the immediately
preceding clauses (i) or (ii).
Section 5. Certain Consequences of Termination of Subscriber's
Employment. (a) If at any time the Subscriber shall cease to be employed by
the Corporation or any subsidiary thereof as a result of a Termination by
the Corporation for Cause (as defined below), the Corporation shall have
the right (a "Call Option") to purchase all but not less than all of the
Shares owned by the Subscriber and his Permitted Transferees at an
aggregate price equal to the lower of the (i) price paid by the Subscriber
pursuant to this Agreement or (ii) Fair Market Value of the Shares to be
purchased on the date of the Call Notice (the "Applicable Valuation Date").
For the purposes of this Agreement, "Termination by the
Corporation for Cause": means termination by the Corporation or any of its
subsidiaries or affiliates of the Subscriber's employment for: (i)
misappropriation of any significant monies or significant assets or
properties of the Corporation or any of its subsidiaries, (ii) conviction
of a felony or a crime involving moral turpitude, (iii) substantial and
repeated failure to comply with directions of the Chief Executive Officer
of the Corporation or other superior of the Subscriber or the board of
directors of the Corporation or any of its subsidiaries or affiliates, (iv)
gross negligence or willful misconduct, (v) chronic alcoholism or drug
addiction together with the Subscriber's refusal to cooperate with or
participate in counseling and/or treatment of same or (vi) any willful
action or inaction of the Subscriber which, in the reasonable opinion of
the Corporation, constitutes dereliction (willful neglect or willful
abandonment of assigned duties), or a material breach of any policy or rule
of the Corporation or any of its subsidiaries. For the purposes of this
Agreement, "Fair Market Value" shall be determined by the Corporation in
good faith.
(b) If at any time the Subscriber shall cease to be employed by
the Corporation or any subsidiary thereof other than as a result of a
Termination by the Corporation for Cause, the Corporation shall have the
right, to purchase all but not less than all the Shares owned by the
Subscriber or his Permitted Transferees at a price equal to the Fair Market
Value on the Applicable Valuation Date of the Shares to be purchased.
(c) If the Corporation desires to exercise a Call Option, it
shall give written notice thereof (a "Call Option Notice") to the
Subscriber and the Permitted Transferees of the Subscriber within 60 days
of the occurrence of the event giving rise to such Call Option; such Call
Option shall expire if such notice is not given within such period. The
Subscriber and the Permitted Transferees of the Subscriber shall deliver to
the Corporation certificates representing the Shares, free and clear of all
claims, liens, or encumbrances, together with blank stock powers, duly
executed with all signature guarantees at a closing at the principal office
of the Corporation on the seventh day after the Call Option Notice has been
given to the Subscriber. The proceeds from the purchase of the Shares
pursuant to the Call Option shall be paid by check, which shall be
delivered to the Subscriber at the closing of such purchase.
EXHIBIT 4.5
SOVEREIGN SPECIALTY CHEMICALS, INC.
MANAGEMENT SUBSCRIPTION AGREEMENT
AGREEMENT dated as of [_______], 2000 by and between Sovereign
Specialty Chemicals, Inc., a Delaware corporation (the "Corporation"), and
________ (the "Subscriber").
Section 1. Agreement to Sell and Purchase Securities. Subscriber
agrees to purchase [______] shares of the common stock, par value $0.01 per
share, of the Corporation (the "Common Stock"), at a purchase price of
$100.00 per share. The shares of Common Stock to be purchased by the
Subscriber pursuant to this Agreement are referred to as the "Shares."
Section 2. Closing. The delivery of the Shares to the Subscriber
shall take place at a closing (the "Closing") on ________, 2000 or at such
other date as the Corporation and the Subscriber may agree in writing. The
Subscriber shall pay for the Shares by check or by such other form of
payment acceptable to the Corporation so that at Closing, the Corporation
can deliver the Shares against receipt of cleared funds. The time and date
at and upon which the Closing occurs is herein called the "Closing Date."
Section 3. Representations and Warranties of Subscriber. The
Subscriber for himself represents, warrants and agrees that:
(a) The Subscriber is acquiring the Shares to be acquired by him
hereunder for his own account, for investment and not with a view to the
sale or distribution thereof, nor with any present intention of
distributing or selling the same. Except as expressly provided in the
Shareholders Agreement, dated December 29, 1999 (the "Shareholders
Agreement"), by and among the Corporation, SSCI Investors LLC ("Investors")
and the other parties thereto, the Subscriber will have no right to
Transfer the Shares and must bear the economic risk of the Subscriber's
investment for an indefinite period of time. There is not now and there may
never be any public market for the Shares. For the purposes of this
Agreement, "Transfer" shall mean any sale, transfer, assignment, exchange,
grant of a participation in, gift, hypothecation, encumbrance, pledge or
other disposition by testamentary bequest, inter vivos transfer or
otherwise of any securities or any interests therein, whether direct or
indirect.
(b) The Subscriber is a citizen or resident of the United States
of America and has entered into this Agreement within the United States of
America.
Section 4. Management Fees. The Subscriber hereby acknowledges
and agrees that Investors, the majority shareholder of the Corporation, or
its affiliates will receive management and other fees and expenses from the
Corporation.
Section 5. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware without
regard to its rules of conflict of laws. The Subscriber hereby irrevocably
and unconditionally consents to submit to the exclusive jurisdiction of the
courts of the State of Delaware and of the United States of America located
in the State of Delaware for any litigation arising out of or relating to
this Agreement and the transactions contemplated hereby (and agrees not to
commence any litigation relating thereto except in such courts), waives any
objection to the laying of venue of any such litigation in such Delaware
courts and agrees not to plead or claim that such litigation brought in any
such Delaware court has been brought in an inconvenient forum.
Section 6. Assignment; Binding Effect; Third Party Beneficiaries.
Neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by either of the parties hereto (whether by
operation of law or otherwise) without the prior written consent of the
other party. Subject to the preceding sentence, this Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and assigns. Investors and its affiliates are third
party beneficiaries under this Agreement. Notwithstanding anything
contained in this Agreement to the contrary, nothing in this Agreement
(other than as set forth in the preceding sentence), express or implied, is
intended to confer on any person other than the parties hereto or their
respective heirs, successors, executors, administrators and assigns any
rights, remedies, obligations or liabilities under or by reason of this
Agreement.
Section 7. Acknowledgement; Entire Agreement. The Subscriber
acknowledges and agrees that the Shares purchased pursuant to this
Agreement are subject to the Shareholders Agreement. This Agreement and the
Shareholders Agreement constitute the entire agreement among the parties
with respect to the subject matter hereof and supersede all prior
agreements and understandings (oral and written) among the parties with
respect thereto.
Section 8. 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 otherwise 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.
<PAGE>
IN WITNESS WHEREOF, this Agreement has been duly executed as of
the date first above written.
SOVEREIGN SPECIALTY
CHEMICALS, INC.
By:
------------------------------
Name:
Title:
SUBSCRIBER
---------------------------------
[Name]
Subscriber's Address for Notices:
---------------------------------
---------------------------------
---------------------------------
Subscriber's Taxpayer I.D. No:
---------------------------------
EXHIBIT 5.1
January 28, 2000
Sovereign Specialty Chemicals, Inc.
225 West Washington Street
Suite 2200
Chicago, Illinois 60606
RE: REGISTRATION STATEMENT ON FORM S-8
Ladies and Gentlemen:
We are acting as special counsel to Sovereign Specialty
Chemicals, Inc., a Delaware corporation (the "Company"), in connection with
the Registration Statement on Form S-8 (the "Registration Statement")
relating to 20,000 shares (the "Shares") of voting common stock, par value
$.01 per share, of the Company, issuable pursuant to the Company's Employee
Stock Purchase Plan (the "Plan"). With your permission, all assumptions and
statements of reliance herein have been made without any independent
investigation or verification on our part except to the extent otherwise
expressly stated, and we express no opinion with respect to the subject
matter or accuracy of such assumptions or items relied upon.
In connection with this opinion, we have (i) investigated such
questions of law, (ii) examined originals or certified, conformed or
reproduction copies of such agreements, instruments, documents and records
of the Company, such certificates of public officials and such other
documents, and (iii) received such information from officers and
representatives of the Company as we have deemed necessary or appropriate
for the purposes of this opinion. In all such examinations, we have assumed
the legal capacity of all natural persons, the genuineness of all
signatures, the authenticity of original and certified documents, and the
conformity to original or certified copies of all copies submitted to us as
conformed or reproduction copies. As to various questions of fact relevant
to such opinion, we have relied upon, and assume the accuracy of,
certificates and oral or written statements and other information of or
from representatives of the Company and others.
Based upon the foregoing, and subject to the limitations,
qualifications and assumptions set forth herein, we are of the opinion that
the Shares, when issued, paid for (with the consideration received by the
Company being not less than the par value thereof) and delivered in
accordance with the Plan, will be validly issued, fully paid and
non-assessable.
The opinion expressed herein is limited to the General
Corporation Law of the State of Delaware, as currently in effect. The
opinion expressed herein is given as of the date hereof, and we undertake
no obligation to supplement this letter if any applicable laws change after
the date hereof, if we become aware of any facts that might change the
opinions expressed herein after the date hereof or for any other reason.
We hereby consent to the filing of this opinion as an exhibit to
the Registration Statement on Form S-8 relating to the registration of the
Shares. In giving this consent, we do not admit that we are in the category
of persons whose consent is required under Section 7 of the Securities Act
of 1933, as amended.
Very truly yours,
FRIED, FRANK, HARRIS, SHRIVER & JACOBSON
By: /s/ Timothy E. Peterson
-------------------------------------
Timothy E. Peterson
Exhibit 23.2
Consent of Ernst & Young LLP, Independent Auditors
We consent to the incorporation by reference in the Registration Statement
(Form S-8 No. 333- ) pertaining to the Employee Stock Purchase Plan of
Sovereign Specialty Chemicals, Inc. of our report dated March 15, 1999,
with respect to the consolidated financial statements and schedule of
Sovereign Specialty Chemicals, Inc. included in the 10-K for the year ended
December 31, 1998.
ERNST & YOUNG LLP
Chicago, Illinois
January 28, 2000
