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EXHIBIT (a)(11)
MEMORANDUM
To: HOLDERS OF STOCK OPTIONS ISSUED PRIOR TO JANUARY 1, 2000
UNDER THE CAREERBUILDER, INC. STOCK INCENTIVE PLANS
Date: AUGUST 9, 2000
Re: NOTICE REGARDING TREATMENT OF STOCK OPTIONS
________________________________________________________________________________
Our records indicate that you are a holder of an option or options (each
a "Company Stock Option"), pursuant to the Net Start, Inc. Stock Option Plan or
the CareerBuilder, Inc. 1999 Stock Incentive Plan, to purchase shares of
CareerBuilder common stock, par value $.001 per share ("CareerBuilder Common
Stock"). Set forth below is a summary of the treatment of Company Stock Options
issued prior to January 1, 2000 pursuant to the Agreement and Plan of Merger
dated as of July 16, 2000 (the "Merger Agreement") among CareerBuilder, Inc.
("CareerBuilder"), Career Holdings, Inc., a corporation formed by Tribune
Company and KnightRidder.com, Inc. ("Career Holdings"), and CB Acquisition
Corp., a wholly owned subsidiary of Career Holdings ("CB Acquisition"). A
separate memorandum will be sent to holders of Company Stock Options issued on
or after January 1, 2000 discussing the terms upon which such holders will
receive substitute Career Holdings stock options in cancellation of such Company
Stock Options.
Section 1. The Merger
Pursuant to the Merger Agreement, CB Acquisition has commenced an offer
to purchase all outstanding shares of CareerBuilder Common Stock for $8.00 per
share in cash, without interest thereon (the "Offer Price"). Following
consummation of the Offer, CB Acquisition will be merged (the "Merger") with and
into CareerBuilder, with CareerBuilder as the surviving corporation in the
Merger, following the satisfaction or waiver of conditions to the Merger
contained in the Merger Agreement. If you hold Company Stock Options that are
currently exercisable, you may exercise them and tender your shares in the
Offer. The Offer is scheduled to expire at midnight on August 21, 2000.
Following the consummation of the Merger, each share of CareerBuilder Common
Stock outstanding immediately prior to the effective time of the Merger (the
"Effective Time") will be converted into the right to receive the Offer Price.
Section 2. Treatment in the Merger of CareerBuilder Options Granted Prior to
January 1, 2000
a) Options granted prior to January 1, 2000 with an exercise price
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less than $4.00 per share of CareerBuilder Common Stock
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Immediately after the Effective Time, pursuant to the Merger Agreement
each outstanding Company Stock Option that was granted prior to January 1, 2000
with an exercise price that is less than $4.00 per share, whether or not then
exercisable, will be cancelled in
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consideration for which you will be entitled to receive a cash payment from
CareerBuilder equal to (A) the product of (1) the number of shares of
CareerBuilder Common Stock subject to such Company Stock Option immediately
prior to the Effective Time and (2) the excess, if any, of the Offer Price over
the exercise price per share of CareerBuilder Common Stock purchasable under
such Company Stock Option, minus (B) all applicable federal, state and local
taxes required to be withheld in respect of such payment. Such amount will be
paid as soon as reasonably practicable following the Effective Time. The receipt
of consideration contemplated by this Section 2(a) will be deemed a release of
any and all rights you had or may have had in respect thereof. The treatment of
the Company Stock Options granted prior to January 1, 2000 with an exercise
price less than $4.00 per share is automatic and no election or other action on
your part is necessary.
Example: You will receive in consideration for the cancellation
of all (but not less than all) of your Company Stock
Options which are granted prior to January 1, 2000 with
an exercise price less than $4.00 per share, an amount
in cash determined as follows:
The positive difference of the Offer Price ($8.00)
minus the exercise price per share of such Company
Stock Options
X
The number of shares subject to such Company Stock
Options
For example, if you have a Company Stock Option for
3,000 shares of CareerBuilder Common Stock with an
exercise price of $3.00 per share, then you would
receive $15,000 cash (minus all applicable federal,
state and local taxes required to be withheld in
respect of such payment), calculated as follows:
$8.00 - $3.00 = $5.00
$5.00 x 3,000 = $15,000
b) Options granted prior to January 1, 2000 with an exercise price equal
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to or in excess of $4.00 per share of CareerBuilder Common Stock
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Each holder of an outstanding Company Stock Option granted prior to January
1, 2000 with an exercise price that is equal to or in excess of $4.00 per share
of CareerBuilder Common Stock may elect in writing, by completing the attached
Option Holder Election Form ("Election Form") and returning it to Jamie McCarthy
as provided in Section 2(c) below not later than August 15, 2000, that such
option be treated as described in this Section 2(b).
If you do not complete and return the attached Election Form or do not
elect to have your Company Stock Options granted prior to January 1, 2000 with
an exercise price greater than or equal to $4.00 per share treated as provided
in this Section 2(b), then such
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Company Stock Options will be treated as provided in Section 2(a) above. If the
exercise price of your Company Stock Options equals or exceeds $8.00 per share,
you will not have the right to receive any consideration (cash or Substitute
Stock Options (as defined below)) unless you complete the attached Election Form
and elect the treatment of your Company Stock Options as described in this
Section 2(b).
If you complete and return the attached Election Form electing to have your
Company Stock Options treated in accordance with this Section 2(b), the Company
Stock Options will be cancelled immediately after the Effective Time, in
consideration for which you will be entitled to receive (A) a cash payment from
CareerBuilder equal to (1) the product of one-third of the number of shares
subject to such Company Stock Option immediately prior to the Effective Time,
rounded up to the nearest whole share, and $4.00, minus (2) all applicable
federal, state and local taxes required to be withheld in respect of such
payment, and (B) a stock option to purchase shares of common stock of Career
Holdings (each a "Substitute Stock Option") equal in number to two-thirds of the
shares subject to such Company Stock Option immediately prior to the Effective
Time, rounded down to the nearest whole share, at an exercise price per share
equal to the fair market value of a share of Career Holdings common stock at the
Effective Time. The Substitute Stock Options will be granted under the terms of
a stock option plan to be adopted by Career Holdings. One-half of each such
Substitute Stock Option will become vested and exercisable on the first
anniversary of the Effective Time and the remainder of such Substitute Stock
Option will become exercisable on the second anniversary of the Effective Time,
provided that you remain employed by CareerBuilder or Career Holdings on the
date of each such anniversary. Such Substitute Stock Options will in all other
respects be subject to substantially the same terms and conditions that were
applicable to the related Company Stock Options immediately prior to the
Effective Time. However, shares of Career Holdings common stock purchased upon
the exercise of each Substitute Stock Option will, for so long as Career
Holdings common stock is not traded on an established stock exchange or national
market system, be subject to a right of repurchase by Career Holdings at their
fair market value under such conditions as Career Holdings shall deem
appropriate. The cash amounts payable pursuant to this Section 2(b) will be
paid as soon as reasonably practicable following the Effective Time. If you
surrender your Company Stock Options in exchange for the consideration
contemplated by this Section 2(b), you will be deemed to have released any and
all rights that you had or may have had in respect of your Company Stock
Options.
Example of Election To Receive Cash and Convert
Company Stock Options to Substitute Stock Options
Cash Portion If so requested pursuant to the attached Election Form,
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you will receive in consideration for the cancellation of all (but not
less than all) of your Company Stock Options which were granted prior
to January 1, 2000 with an exercise price equal to or in excess of
$4.00 per share, an amount in cash determined as follows:
$4.00
X
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one-third the number of shares subject to such Company Stock Options
(rounded up to the nearest whole share)
For example, if you have a Company Stock Option for 3,000 shares of
CareerBuilder Common Stock with an exercise price of $5.00 per share,
then you would receive $4,000 cash (less any applicable taxes),
calculated as follows:
3,000 shares x 1/3 = 1,000
1,000 x $4.00 = $4,000
Substitute Stock Option Portion The number of shares of Career
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Holdings common stock subject to such Substitute Stock Option will
equal:
the number of shares of CareerBuilder Common Stock
subject to such Company Stock Option
X
two-thirds (rounded down to the nearest whole
share)
3,000 x 2/3 = 2,000 shares
The exercise price of such Substitute Stock Option will equal the fair
market value of a share of Career Holdings common stock at the
Effective Time.
EACH SUBSTITUTE STOCK OPTION SHALL BE ISSUED PURSUANT TO A STOCK OPTION PLAN TO
BE ADOPTED BY CAREER HOLDINGS. A COPY OF THE CAREER HOLDINGS STOCK OPTION PLAN
WILL BE DELIVERED TO EACH RECIPIENT OF SUBSTITUTE STOCK OPTIONS AT THE TIME OF
ISSUANCE OF SUCH STOCK OPTIONS.
THERE IS CURRENTLY NO PUBLIC MARKET FOR SHARES OF CAREER HOLDINGS AND THERE CAN
BE NO GUARANTEE THAT SUCH A MARKET WILL DEVELOP. THE SHARES TO BE ISSUED UPON
EXERCISE OF SUBSTITUTE STOCK OPTIONS WILL BE "RESTRICTED SECURITIES" WITHIN THE
MEANING OF THE SECURITIES ACT OF 1933 AND MAY NOT BE SOLD WITHOUT REGISTRATION
UNDER THE SECURITIES ACT OF 1933 AND APPLICABLE STATE SECURITIES LAWS OR AN
APPLICABLE EXEMPTION THEREFROM.
CAREER HOLDINGS HAS NO FINANCIAL OR OPERATING HISTORY AND ANY INVESTMENT IN
CAREER HOLDINGS IS A SPECULATIVE INVESTMENT WHICH INVOLVES A HIGH DEGREE OF RISK
OF LOSS BY THE HOLDER OF ALL OF HIS OR HER INVESTMENT.
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Example of Not Electing Treatment under Section 2(b)
If no timely or proper election is made with respect to any Company
Stock Option issued prior to January 1, 2000 with an exercise price
equal to or in excess of $4.00 per share of CareerBuilder Common Stock
pursuant to the attached Election Form, then you will be deemed to
have elected the treatment described in Section 2(a) above, and at the
Effective Time your Company Stock Option will cease to represent a
right to acquire shares of CareerBuilder Common Stock and will
automatically be converted into cash (to the extent the exercise price
is less than $8.00), as specified in Section 2(a) of this memo. Unless
the treatment set forth in Section 2(b) is elected by returning the
attached Election Form on or before August 15, 2000, you will not have
the right to receive any cash if the exercise price of your Company
Stock Option equals or exceeds $8.00.
c) Completing the Stock Option Election Form
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Make sure that you complete the Election Form and deliver it prior to
August 15, 2000 to Jamie McCarthy, at CareerBuilder's offices at 10780 Parkridge
Boulevard, Suite 200, Reston, Virginia 20191. Your election must be received
by Mr. McCarthy on or before August 15, 2000. Such request shall be IRREVOCABLE
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unless the Merger Agreement is terminated before the Effective Time, in which
case no action will be taken regarding your Company Stock Options. Following
the Effective Time, CareerBuilder will deliver to each option holder the cash
amount (if applicable) due to such holder. Remember, if you fail or decline to
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make timely and proper notice of an election to receive cash and Substitute
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Stock Options, your Company Stock Options will be treated as provided in Section
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2(a) above and you will receive cash only to the extent the exercise price of
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your Company Stock Option is less than $8.00.
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The Merger is subject to the fulfillment of certain conditions set forth in
the Merger Agreement. If you have any questions regarding this memorandum,
please contact Jamie McCarthy at (703) 259-5754 or Deb Tucker at (703) 259-5706.
Section 3. General Information Only
The information provided in this memorandum is a general description of the
treatment of certain Company Stock Options in the Merger Agreement. Additional
information with respect to the treatment of Company Stock Options is contained
in the Tender Offer Statement on Schedule TO filed by Career Holdings with the
Securities and Exchange Commission ("SEC") on July 25, 2000, as amended (the
"Schedule TO"), and the Solicitation/Recommendation Statement on Schedule 14D-9
filed by CareerBuilder with the SEC on July 25, 2000, as amended (the "Schedule
14D-9"). Copies of the Schedule TO and the Schedule 14D-9 are publicly
available at the SEC's Web site at http://www.sec.gov and may also be obtained
by contacting CareerBuilder at 10780 Parkridge Boulevard, Suite 200, Reston,
Virginia 20191, Attention: Jamie McCarthy.
Career Holdings is a newly formed corporation organized in connection with
the Offer and the Merger. The form of Amended and Restated Certificate of
Incorporation and Amended
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and Restated By-Laws of Career Holdings to be effective after the Effective Time
are attached hereto as Annex I and Annex II, respectively. It is expected that
after the Effective Time Career Holdings will initially have outstanding capital
stock consisting of approximately 33,108,000 shares of common stock, $.01 par
value per share ("Career Holdings Common Stock"). Initially, the Career Holdings
Common Stock will be held by Tribune Company, KnightRidder.com, Inc., Robert J.
McGovern and James A. Winchester (the "Initial Stockholders"). The amended and
restated stockholders agreement and the registration rights agreement to be
entered into by the Initial Stockholders setting forth certain rights of and
restrictions on their shares of Career Holdings Common Stock are described in
and filed as exhibits to the Schedule TO and are incorporated herein by
reference. Holders of Company Stock Options who will receive Substitute Stock
Options are urged to read the Amended and Restated Certificate of Incorporation,
Amended and Restated By-Laws, amended and restated stockholders agreement and
registration rights agreement and the other information contained in the
Schedule TO and the Schedule 14D-9 carefully.
Please refer to the option plans as well as your option agreement available
on the AST website (www.aststockplan.com) and/or your employment offer letter
for information specific to you. In evaluating your decision whether to make an
election as described in Section 2(b), you should not assume that the
description above will provide you with all facts necessary to evaluate the
situation. You are advised to consult with your personal legal, financial and
tax advisors regarding possible implications of your elections hereunder.
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CAREEBUILDER, INC.
OPTION HOLDER ELECTION FORM
**To be completed only by holders of options to purchase CareerBuilder, Inc.
Common Stock that were granted prior to January 1, 2000 with an exercise price
equal to or in excess of $4.00 per share. All of your Company Stock Options in
a category will be treated in accordance with the election made hereunder,
unless you submit multiple Option Holder Election Forms.
[_] I elect the treatment described in Section 2(b)
I, _________________________, hereby irrevocably elect to receive cash and
options to purchase common stock of Career Holdings, Inc. in exchange for the
cancellation of any options to purchase CareerBuilder Common Stock that were
granted prior to January 1, 2000 with an exercise price equal to or in excess of
$4.00 per share that I hold as of the effective date of the merger pursuant to
the Agreement and Plan of Merger dated July 16, 2000 by and among CareerBuilder,
Inc., Career Holdings, Inc. and CB Acquisition Corp., all as described in the
attached memorandum dated August 9, 2000.
[_] I, _________________________, hereby irrevocably elect to receive a cash
payment from CareerBuilder equal to (A) the product of (1) the number of shares
of CareerBuilder Common Stock subject to such Company Stock Option immediately
prior to the Effective Time and (2) the excess of the Offer Price over the
exercise price per share of Company Stock purchasable under such Company Stock
Option, minus (B) all applicable federal, state and local taxes required to be
withheld in respect of such payment.
I have read and understand the attached memorandum dated August 9, 2000, which
describes my election rights hereunder. I acknowledge that I have been advised
to consult with a personal legal, financial and tax advisor with respect to this
election.
________________________________________ _____________
Signature Date
________________________________________ _____________
Social Security or Taxpayer I.D. Number Number of shares of CareerBuilder
Common Stock subject to options
granted prior to January 1, 2000 with
an exercise price equal to or in
excess of $4.00 per share
Mailing Address: ______________________________________
_____________________________________
______________________________________
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Instructions:
(1) Print your full name, address and Social Security or Taxpayer I.D. Number
as well as the number of shares of CareerBuilder Common Stock subject to
options granted to you prior to January 1, 2000 with an exercise price
equal to or in excess of $4.00 per share in the indicated space above.
(2) Please complete, sign, date and return this form to: CareerBuilder, Inc.
(Facsimiles are acceptable) Attention: Jamie
McCarthy
10780 Parkridge
Boulevard
Suite 200
Reston, VA 20191
Fax: 703-259-5715
THIS FORM MUST BE RECEIVED BY AUGUST 15, 2000, IN ORDER TO ELECT THE TREATMENT
DESCRIBED IN SECTION 2(B) AND RECEIVE CASH AND OPTIONS TO PURCHASE CAREER
HOLDINGS, INC. COMMON STOCK IN CONNECTION WITH THE CLOSING OF THE MERGER. IF
YOUR ELECTION IS NOT RECEIVED BY AUGUST 15, 2000 OR YOU RETURN THIS ELECTION
FORM WITHOUT CHECKING EITHER BOX ABOVE, YOU WILL BE DEEMED TO HAVE ELECTED THE
TREATMENT DESCRIBED IN SECTION 2(A) AND NONE OF YOUR CAREERBUILDER OPTIONS WILL
BE EXCHANGED FOR CAREER HOLDINGS OPTIONS AND ALL OF YOUR OPTIONS WILL BE
CONVERTED INTO CASH (TO THE EXTENT THE EXERCISE PRICE IS LESS THAN $8.00) PER
SHARE.
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ANNEX I
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
CAREER HOLDINGS, INC.
FIRST: The name of the corporation (which is hereinafter referred to
as the "Corporation") is Career Holdings, Inc.
SECOND: The address of the Corporation's registered office in the
State of Delaware is The Corporation Trust Company, The Corporation Trust
Center, 1209 Orange Street, in the City of Wilmington, County of New Castle.
THIRD: The purpose of the Corporation is to engage in any lawful act
or activity for which corporations may be organized under the General
Corporation Law of Delaware.
FOURTH: The total number of shares of all classes of capital stock
which the Corporation shall have the authority to issue is 77,800,000 shares of
common stock with a par value of $.01 per share.
FIFTH: In furtherance and not in limitation of the powers conferred
by statute, the Board of Directors is expressly authorized to make, alter or
repeal the By-laws of the Corporation, subject to any specific limitation on
such power contained in any By-laws adopted by the stockholders. Elections of
directors need not be by written ballot unless the By-laws of the Corporation so
provide.
SIXTH: A director of the Corporation shall not be personally liable
to the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach of the
director's duty of loyalty to the Corporation or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the General Corporation Law
of Delaware, or (iv) for any transaction from which the director derived an
improper personal benefit. If the General Corporation Law of Delaware is
amended to authorize corporate action further eliminating or limiting the
personal liability of directors, then the liability of a director of the
Corporation shall be eliminated or limited to the fullest extent permitted by
the General Corporation Law of Delaware, as so amended. Any repeal or
modification of this Article Seventh by the stockholders of the Corporation
shall not adversely affect any right or protection of a director of the
Corporation existing at the time of such repeal or modification.
SEVENTH: Each person who is or was a director or officer of the
Corporation, and each person who serves or served at the request of the
Corporation as a director or officer of another enterprise, shall be indemnified
by the Corporation in accordance with, and to the fullest extent authorized by,
the General Corporation Law of Delaware as it may be in effect from time to
time.
THE UNDERSIGNED, being the President of the Corporation, has executed
this Amended and Restated Certificate of Incorporation on August __, 2000.
By: __________________________
Name:
Title:
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ANNEX II
AMENDED AND RESTATED
BY-LAWS
OF
CAREER HOLDINGS, INC.
ARTICLE I
Stockholders Meetings
Section 1.1 Annual Meetings. An annual meeting of stockholders shall
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be held for the election of directors at such date, time and place as may be
fixed by resolution of the Board of Directors from time to time.
Section 1.2 Special Meetings. Special meetings of stockholders for
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any purpose or purposes may be called at any time only by the Chairman of the
Board, if any, the President, the Board of Directors or by a committee of the
Board of Directors authorized to call such meetings, and by no other person.
The business transacted at a special meeting of stockholders shall be limited to
the purpose or purposes for which such meeting is called, except as otherwise
determined by the Board of Directors or the chairman of the meeting.
Section 1.3 Notice of Meetings. A written notice of each annual or
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special meeting of stockholders shall be given stating the place, date and time
of the meeting, and, in the case of a special meeting, the purpose or purposes
for which the meeting is called. Unless otherwise provided by law, the
Certificate of Incorporation or these By-laws, such notice of meeting shall be
given not less than ten nor more than sixty days before the date of the meeting
to each stockholder of record entitled to vote at such meeting. If mailed, such
notice shall be deemed to be given when deposited in the mail, postage prepaid,
directed to the stockholder at such stockholder's address as it appears on the
records of the Corporation.
Section 1.4 Adjournments. Any annual or special meeting of
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stockholders may be adjourned from time to time to reconvene at the same or some
other place, and notice need not be given of any such adjourned meeting if the
date, time and place thereof are announced at the meeting at which the
adjournment is taken. At the adjourned meeting any business may be transacted
which might have been transacted at the original meeting. If the adjournment is
for more than 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 adjourned meeting in
accordance with Section 1.3.
Section 1.5 Quorum. Except as otherwise provided by law, the
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Certificate of Incorporation or these By-laws, the presence in person or by
proxy of the holders of stock having a majority of the votes which could be cast
by the holders of all outstanding stock entitled to vote at the meeting shall
constitute a quorum at each meeting of stockholders. In the absence of a
quorum, the stockholders so present may, by the affirmative vote of the holders
of stock having a majority of the votes which could be cast by all such holders,
adjourn the meeting from time to
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time in the manner provided in Section 1.4 of these By-laws until a quorum is
present. If a quorum is present when a meeting is convened, the subsequent
withdrawal of stockholders, even though less than a quorum remains, shall not
affect the ability of the remaining stockholders lawfully to transact business.
Section 1.6 Organization. Meetings of stockholders shall be presided
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over by the Chairman of the Board, if any, or if there is none or in his or her
absence, by the President, or in his or her absence, by a chairman designated by
the Board of Directors, or in the absence of such designation by a chairman
chosen at the meeting. The Secretary shall act as secretary of the meeting, but
in his or her absence the chairman of the meeting may appoint any person to act
as secretary of the meeting.
Section 1.7 Voting. (a) Except as otherwise provided by the
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Certificate of Incorporation, each stockholder entitled to vote at any meeting
of stockholders shall be entitled to one vote for each share of stock held by
such stockholder which has voting power on the matter in question.
(b) Voting at meetings of stockholders need not be by written ballot
unless as determined by the holders of stock having a majority of the votes
which could be cast by the holders of all outstanding stock entitled to vote
which are present in person or by proxy at such meeting. Unless otherwise
provided in the Certificate of Incorporation, directors shall be elected by a
plurality of the votes cast in the election of directors. Each other question
shall, unless otherwise provided by law, the Certificate of Incorporation or
these By-laws, be decided by the vote of the holders of stock having a majority
of the votes which could be cast by the holders of all stock entitled to vote on
such question which are present in person or by proxy at the meeting.
(c) Stock of the Corporation standing in the name of another
corporation and entitled to vote may be voted by such officer, agent or proxy as
the by-laws or other internal regulations of such other corporation may
prescribe or, in the absence of such provision, as the board of directors or
comparable body of such other corporation may determine.
(d) Stock of the Corporation standing in the name of a deceased
person, a minor, an incompetent or a debtor in a case under Title 11, United
States Code, and entitled to vote may be voted by an administrator, executor,
guardian, conservator, debtor-in-possession or trustee, as the case may be,
either in person or by proxy, without transfer of such shares into the name of
the official or other person so voting.
(e) A stockholder whose voting stock of the Corporation is pledged
shall be entitled to vote such stock unless on the transfer records of the
Corporation the pledgor has expressly empowered the pledgee to vote such shares,
in which case only the pledgee, or such pledgee's proxy, may represent such
shares and vote thereon.
(f) If voting stock is held of record in the names of two or more
persons, whether fiduciaries, members of a partnership, joint tenants, tenants
in common, tenants by the entirety or otherwise, or if two or more persons have
the same fiduciary relationship respecting the same shares, unless the
Secretary is given written notice to the contrary and is furnished with a copy
of the instrument or order appointing them or creating the relationship wherein
it is so
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provided, their acts with respect to voting shall have the following effect: (i)
if only one votes, such act binds all; (ii) if more than one vote, the act of
the majority so voting binds all; and (iii) if more than one votes, but the vote
is evenly split on any particular matter each faction may vote such stock
proportionally, or any person voting the shares, or a beneficiary, if any, may
apply to the Court of Chancery of the State of Delaware or such other court as
may have jurisdiction to appoint an additional person to act with the persons so
voting the stock, which shall then be voted as determined by a majority of such
persons and the person appointed by the Court. If the instrument so filed shows
that any such tenancy is held in unequal interests, a majority or even split for
the purpose of this subsection shall be a majority or even split in interest.
(g) Stock of the Corporation belonging to the Corporation, or to
another corporation a majority of the shares entitled to vote in the election of
directors of which are held by the Corporation, shall not be voted at any
meeting of stockholders and shall not be counted in the total number of
outstanding shares for the purpose of determining whether a quorum is present.
Nothing in this Section 1.7 shall limit the right of the Corporation to vote
shares of stock of the Corporation held by it in a fiduciary capacity.
Section 1.8 Proxies. (a) Each stockholder entitled to vote at a
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meeting of stockholders may authorize another person or persons to act for such
stockholder by proxy filed with the Secretary before or at the time of the
meeting. No such proxy shall be voted or acted upon after three years from its
date, unless the proxy provides for a longer period. 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 stockholder may revoke any proxy which is not irrevocable
by attending the meeting and voting in person or by filing with the Secretary an
instrument in writing revoking the proxy or another duly executed proxy bearing
a later date.
(b) A stockholder may authorize another person or persons to act for
such stockholder as proxy (i) by executing a writing authorizing such person or
persons to act as such, which execution may be accomplished by such stockholder
or such stockholder's authorized officer, director, partner, employee or agent
(or, if the stock is held in a trust or estate, by a trustee, executor or
administrator thereof) signing such writing or causing his or her signature to
be affixed to such writing by any reasonable means, including, but not limited
to, facsimile signature, or (ii) by transmitting or authorizing the transmission
of a telegram, cablegram or other means of electronic transmission (a
"Transmission") to the person who will be the holder of the proxy or to a proxy
solicitation firm, proxy support service organization or like agent duly
authorized by the person who will be the holder of the proxy to receive such
Transmission; provided that any such Transmission must either set forth or be
submitted with information from which it can be determined that such
Transmission was authorized by such stockholder.
(c) The Secretary or such other person or persons as shall be
appointed from time to time by the Board of Directors shall examine
Transmissions to determine if they are valid. If it is determined a
Transmission is valid, the person or persons making that determination shall
specify the information upon which such person or persons relied. Any copy,
facsimile telecommunication or other reliable reproduction of such a writing or
Transmission may be substituted or used in lieu of the original writing or
Transmission for any and all purposes for which the original writing or
Transmission could be used; provided that such
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copy, facsimile telecommunication or other reproduction shall be a complete
reproduction of the entire original writing or Transmission.
Section 1.9 Fixing Date of Determination of Stockholders of Record.
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(a) In order that the corporation may determine the stockholders entitled (i)
to notice of or to vote at any meeting of stockholders or any adjournment
thereof, (ii) to express consent to corporate action in writing without a
meeting, (iii) to receive payment of any dividend or other distribution or
allotment of any rights, (iv) to exercise any rights in respect of any change,
conversion or exchange of stock or (v) to take, receive or participate in any
other action, the Board of Directors may fix a record date, which shall not be
earlier than the date upon which the resolution fixing the record date is
adopted by the Board of Directors and which (1) in the case of a determination
of stockholders entitled to notice of or to vote at any meeting of stockholders
or adjournment thereof, shall, unless otherwise required by law, be not more
than 60 nor less than ten days before the date of such meeting; (2) in the case
of a determination of stockholders entitled to express consent to corporate
action in writing without a meeting, shall be not more than ten days after the
date upon which the resolution fixing the record date is adopted by the Board of
Directors; and (3) in the case of any other action, shall be not more than 60
days before such action.
(b) If no record date is fixed, (i) the record date for determining
stockholders entitled to notice of or to vote at a meeting of stockholders shall
be at the close of business on the day next preceding the day on which notice is
given, or, if notice is waived, at the close of business on the day next
preceding the day on which the meeting is held; (ii) the record date for
determining stockholders entitled to express consent to corporate action in
writing without a meeting when no prior action of the Board of Directors is
required by law, shall be the first date on which a signed written consent
setting forth the action taken or proposed to be taken is delivered to the
corporation in accordance with applicable law, or, if prior action by the Board
of Directors is required by law, shall be at the close of business on the day on
which the Board of Directors adopts the resolution taking such prior action; and
(iii) the record date for determining stockholders for any other purpose shall
be at the close of business on the day on which the Board of Directors adopts
the resolution relating thereto.
(c) 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, but the Board of Directors may fix a new record date for the adjourned
meeting.
Section 1.10 List of Stockholders Entitled to Vote. The Secretary
-------------------------------------
shall prepare, at least ten days before every meeting of stockholders, a
complete list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address 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 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 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. The stock ledger shall be the only evidence as
to who are the stockholders entitled to
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examine the stock ledger, the list of stockholders or the books of the
corporation, or to vote in person or by proxy at any meeting of stockholders.
Section 1.11 Action By Consent of Stockholders. (a) Unless the
---------------------------------
power of stockholders to act by consent without a meeting is restricted or
eliminated by the Certificate of Incorporation, any action required or permitted
to be taken at any annual or special meeting of stockholders may be taken
without a meeting, without prior notice and without a vote, if a consent in
writing, setting forth the action so taken, is 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 on such action were present and voted.
(b) Every written consent shall bear the date of signature of each
stockholder (or his, her or its proxy) signing such consent. Prompt notice of
the taking of corporate action without a meeting of stockholders by less than
unanimous written consent shall be given to those stockholders who have not
consented in writing. All such written consents shall be delivered to the
Corporation at its registered office in the State of Delaware, at its principal
place of business or to the Secretary. Delivery made to the Corporation's
registered office shall be by hand or by certified or registered mail, return
receipt requested. No written consent shall be effective to authorize or take
the corporate action referred to therein unless, within 60 days of the earliest
dated written consent delivered to the Corporation in the manner required by
this Section 1.11, written consents signed by a sufficient number of persons to
authorize or take such action are delivered to the Corporation at its registered
office in the State of Delaware, at its principal place of business or to the
Secretary. All such written consents shall be filed with the minutes of
proceedings of the stockholders, and actions authorized or taken under such
written consents shall have the same force and effect as those authorized or
taken pursuant to a vote of the stockholders at an annual or special meeting.
ARTICLE II
Board of Directors
Section 2.1 Number. The Board of Directors shall initially consist
------
of two directors. Thereafter, the Board of Directors shall consist of one or
more directors as may from time to time be determined by resolution of the Board
of Directors.
Section 2.2 Election; Resignation; Vacancies. (a) Unless the
--------------------------------
certificate of incorporation or an amendment to these By-laws adopted by the
stockholders provides for a Board of Directors divided into two or three
classes, at each annual meeting of stockholders the stockholders shall elect
directors each of whom shall hold office until the next annual meeting of
stockholders and the election and qualification of his or her successor, or
until his or her earlier death, resignation or removal. If the Board of
Directors is divided into classes, at each annual meeting at which the term of
office of a class of directors expires, the stockholders shall elect directors
of such class each to hold office until the annual meeting at which the terms of
office of such class of directors expire and the election and qualification of
his or her successor, or until his or her earlier death, resignation or removal.
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(b) Any director may resign at any time by giving written notice to
the Chairman of the Board, if any, the President or the Secretary. Unless
otherwise stated in a notice of resignation, it shall take effect when received
by the officer to whom it is directed, without any need for its acceptance.
(c) Any newly created directorship occurring in the Board of
Directors may be filled by a majority of the remaining directors, although less
than a quorum, or by a plurality of the votes cast in the election of directors
at a meeting of stockholders. Any vacancy occurring in the Board of Directors
shall be filled by the stockholder that designated the vacating director;
provided, however, that any vacancy occurring in the Board of Directors created
-------- -------
upon the resignation or removal of an Outside Director (as defined in the
Amended and Restated Stockholders' Agreement of even date herewith) shall be
filled by the appointment of a director by the Management Stockholders (as
defined in the Amended and Restated Stockholders' Agreement of even date
herewith), subject to the unanimous approval of the Institutional Stockholders
(as defined in the Amended and Restated Stockholders' Agreement of even date
herewith). Each director elected to replace a former director shall hold office
until the expiration of the term of office of the director whom he or she has
replaced and the election and qualification of his or her successor, or until
his or her earlier death, resignation or removal. A director elected to fill a
newly created directorship shall serve until the next annual meeting of
stockholders (or, if the Board of Directors is divided into classes, the annual
meeting at which the terms of office of the class of directors to which he or
she is assigned expire) and the election and qualification of his or her
successor, or until his or her earlier death, resignation or removal.
Section 2.3 Regular Meetings. A regular annual meeting of the Board
----------------
of Directors shall be held, without call or notice, immediately after and at the
same place as the annual meeting of stockholders, for the purpose of organizing
the Board of Directors, electing officers and transacting any other business
that may properly come before such meeting. If the stockholders shall elect the
directors by written consent of stockholders as permitted by Section 1.11 of
these By-laws, a special meeting of the Board of Directors shall be called as
soon as practicable after such election for the purposes described in the
preceding sentence. Additional regular meetings of the Board of Directors may
be held without call or notice at such times as shall be fixed by resolution of
the Board of Directors.
Section 2.4 Special Meetings. Special meetings of the Board of
----------------
Directors may be called by the Chairman of the Board, if any, the President, the
Secretary, or by any member of the Board of Directors. Notice of a special
meeting of the Board of Directors shall be given by the person or persons
calling the meeting at least twenty-four hours before the special meeting. The
purpose or purposes of a special meeting need not be stated in the call or
notice.
Section 2.5 Organization. Meetings of the Board of Directors shall
------------
be presided over by the Chairman of the Board, if any, or if there is none or in
his or her absence, by the President, or in his or her absence by a chairman
chosen at the meeting. The Secretary shall act as secretary of the meeting, but
in his or her absence the chairman of the meeting may appoint any person to act
as secretary of the meeting. A majority of the directors present at a meeting,
whether or not they constitute a quorum, may adjourn such meeting to any other
date, time or place without notice other than announcement at the meeting.
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Section 2.6 Quorum; Vote Required for Action. At all meetings of the
--------------------------------
Board of Directors a majority of the whole Board of Directors shall constitute a
quorum for the transaction of business. Unless the Certificate of Incorporation
or these By-laws otherwise provide, the vote of a majority of the directors
present at a meeting at which a quorum is present shall be the act of the Board
of Directors.
Section 2.7 Committees. The Board of Directors may, by resolution
----------
passed by a majority of the whole Board of Directors, which majority must
include both of the directors designated by the Institutional Stockholders (as
defined in the Amended and Restated Stockholders' Agreement of even date
herewith), designate one or more committees, each committee to consist of one or
more directors of the Corporation. 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. In the absence or
disqualification of a member of the committee, the member or members present at
any meeting and not disqualified from voting, whether or not 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. Any such committee,
to the extent permitted by law and provided in the resolution of the Board of
Directors designating such committee, or an amendment to such resolution, shall
have and may exercise all the powers and authority of the Board of Directors in
the management of the business and affairs of the Corporation, and may authorize
the seal of the Corporation to be affixed to all papers which may require it.
Section 2.8 Telephonic Meetings. Directors, or any committee of
-------------------
directors designated by the Board of Directors, may participate in a meeting of
the Board of Directors or such committee by means of conference telephone or
similar communications equipment by means of which all persons participating in
the meeting can hear each other, and participation in a meeting pursuant to this
Section 2.8 shall constitute presence in person at such meeting.
Section 2.9 Informal Action by Directors. Unless otherwise
----------------------------
restricted by the Certificate of Incorporation or these By-laws, any action
required or permitted to be taken at any meeting of the Board of Directors, or
of any committee thereof, may be taken without a meeting if all members of the
Board of Directors or such committee, as the case may be, consent thereto in
writing (which may be in counterparts), and the written consent or consents are
filed with the minutes of proceedings of the Board of Directors or such
committee.
Section 2.10 Committee Rules. Unless the Board of Directors
---------------
otherwise provides, each committee designated by the Board of Directors may
make, alter and repeal rules for the conduct of its business. In the absence of
such rules each committee shall conduct its business in the same manner as the
Board of Directors conducts its business pursuant to this Article II of these
By-laws.
Section 2.11 Reliance upon Records. Every director, and every member
---------------------
of any committee of the Board of Directors, shall, in the performance of his or
her duties, be fully protected in relying in good faith upon the records of the
Corporation and upon such information, opinions, reports or statements presented
to the Corporation by any of its officers or employees, or committees of the
Board of Directors, or by any other person as to matters the director or member
reasonably believes are within such other person's professional or expert
competence
7
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and who has been selected with reasonable care by or on behalf of the
Corporation, including, but not limited to, such records, information, opinions,
reports or statements as to the value and amount of the assets, liabilities
and/or net profits of the Corporation, or any other facts pertinent to the
existence and amount of surplus or other funds from which dividends might
properly be declared and paid, or with which the Corporation's capital stock
might properly be purchased or redeemed.
Section 2.12 Interested Directors. A director who is directly or
--------------------
indirectly a party to a contract or transaction with the Corporation, or is a
director or officer of or has a financial interest in any other corporation,
partnership, association or other organization which is a party to a contract or
transaction with the Corporation, may be counted in determining whether a quorum
is present at any meeting of the Board of Directors or a committee thereof at
which such contract or transaction is considered or authorized, and such
director may participate in such meeting and vote on such authorization to the
extent permitted by applicable law, including Section 144 of the General
Corporation Law of the State of Delaware.
Section 2.13 Compensation. Unless otherwise restricted by the
------------
Certificate of Incorporation, the Board of Directors shall have the authority to
fix the compensation of directors. The directors shall be paid their reasonable
expenses, if any, of attendance at each meeting of the Board of Directors or a
committee thereof and may be paid a fixed sum for attendance at each such
meeting and an annual retainer or salary for services as a director or committee
member. No such payment shall preclude any director from serving the
Corporation in any other capacity and receiving compensation therefor.
Section 2.14 Presumption of Assent. Unless otherwise provided by the
---------------------
laws of the State of Delaware, a director who is present at a meeting of the
Board of Directors or a committee thereof at which action is taken on any matter
shall be presumed to have assented to the action taken unless his or her dissent
shall be entered in the minutes of such meeting or unless he or she shall file
his or her written dissent to such action with the person acting as secretary of
such meeting before the adjournment thereof or shall forward such dissent by
registered mail to the Secretary immediately after the adjournment of such
meeting. Such right to dissent shall not apply to a director who voted in favor
of such action.
ARTICLE III
Officers
Section 3.1 Executive Officers; Election; Qualification; Term of
----------------------------------------------------
Office. The Board of Directors shall elect a President and may, if it so
------
determines, elect a Chairman of the Board from among its members. The Board of
Directors shall also elect a Secretary and may elect one or more Vice
Presidents, one or more Assistant Secretaries, a Treasurer and one or more
Assistant Treasurers. Any number of offices may be held by the same person.
Each officer shall hold office until his or her successor is elected and
qualified or until his or her earlier death, resignation or removal.
Section 3.2 Resignation; Removal; Vacancies. Any officer may resign
-------------------------------
at any time by giving written notice to the Chairman of the Board, if any, the
President or the Secretary. Unless otherwise stated in a notice of resignation,
it shall take effect when received by the officer
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to whom it is directed, without any need for its acceptance. The Board of
Directors may remove any officer with or without cause at any time, but such
removal shall be without prejudice to the contractual rights of such officer, if
any, with the Corporation. A vacancy occurring in any office of the Corporation
may be filled for the unexpired portion of the term thereof by the Board of
Directors at any regular or special meeting.
Section 3.3 Powers and Duties of Executive Officers. The officers of
---------------------------------------
the Corporation shall have such powers and duties in the management of the
Corporation as may be prescribed by the Board of Directors and, to the extent
not so provided, as generally pertain to their respective offices, subject to
the control of the Board of Directors. The Board of Directors may require any
officer, agent or employee to give security for the faithful performance of his
or her duties.
Section 3.4 Chief Executive Officer. Unless the Board of Directors
-----------------------
elects a Chairman of the Board who is designated as such, the President shall be
the Chief Executive Officer of the Corporation and shall in general supervise
and control all of the business affairs of the Corporation, subject to the
direction of the Board of Directors. The President may execute, in the name and
on behalf of the Corporation, any deeds, mortgages, bonds, contracts or other
instruments which the Board of Directors or a committee thereof has authorized
to be executed, except in cases where the execution shall have been expressly
delegated by the Board of Directors or a committee thereof to some other officer
or agent of the corporation.
Section 3.5 Secretary. In addition to such other duties, if any, as
---------
may be assigned to the Secretary by the Board of Directors, the Chairman of the
Board, if any, or the President, the Secretary shall (i) keep the minutes of
proceedings of the stockholders, the Board of Directors and any committee of the
Board of Directors in one or more books provided for that purpose; (ii) see that
all notices are duly given in accordance with the provisions of these By-laws or
as required by law; (iii) be the custodian of the records and seal of the
Corporation; (iv) affix or cause to be affixed the seal of the Corporation or a
facsimile thereof, and attest the seal by his or her signature, to all
certificates for shares of stock of the Corporation and to all other documents
the execution of which under seal is authorized by the Board of Directors; and
(v) unless such duties have been delegated by the Board of Directors to a
transfer agent of the Corporation, keep or cause to be kept a register of the
name and address of each stockholder, as the same shall be furnished to the
Secretary by such stockholder, and have general charge of the stock transfer
records of the Corporation.
ARTICLE IV
Stock Certificates and Transfers
Section 4.1 Certificate. Every holder of stock shall be entitled to
-----------
have a certificate signed by or in the name of the Corporation by the Chairman
of the Board, if any, or the President or a Vice President, and by the Secretary
or an Assistant Secretary, of the Corporation, certifying the number of shares
owned by such stockholder in the Corporation. Any of or all the signatures on
the certificate may be facsimile. In case any officer, transfer agent, or
registrar who has signed or whose facsimile signature has been placed upon a
certificate shall have ceased to be such officer, transfer agent or registrar
before such certificate is issued, it
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may be issued by the Corporation with the same effect as if such officer,
transfer agent, or registrar continued to be such at the date of issue.
Section 4.2 Lost, Stolen or Destroyed Certificates; Issuance of New
-------------------------------------------------------
Certificates. The Corporation may issue a new certificate for stock in the
------------
place of any certificate theretofore issued by it, alleged to have been lost,
stolen or destroyed, and the Corporation may require the owner of the lost,
stolen or destroyed certificate, or such stockholder's legal representative, to
give the Corporation a bond sufficient to indemnify it against any claim that
may be made against it on account of the alleged loss, theft or destruction of
any such certificate or the issuance of such new certificate.
Section 4.3 Transfers of Stock. Upon surrender to the Corporation or
------------------
the transfer agent of the Corporation of a certificate for stock of the
Corporation duly endorsed or accompanied by proper evidence of succession,
assignment or authority to transfer or, if the relevant stock certificate is
claimed to have been lost, stolen or destroyed, upon compliance with the
provisions of Section 4.2 of these By-laws, and upon payment of applicable taxes
with respect to such transfer, and in compliance with any restrictions on
transfer applicable to such stock certificate or the shares represented thereby
of which the Corporation shall have notice and subject to such rules and
regulations as the Board of Directors may from time to time deem advisable
concerning the transfer and registration of stock certificates, the Corporation
shall issue a new certificate or certificates for such stock to the person
entitled thereto, cancel the old certificate and record the transaction upon its
books. Transfers of stock shall be made only on the books of the Corporation by
the registered holder thereof or by such holder's attorney or successor duly
authorized as evidenced by documents filed with the Secretary or transfer agent
of the Corporation. Whenever any transfer of stock shall be made for collateral
security, and not absolutely, it shall be so expressed in the entry of transfer
if, when the certificate or certificates representing such stock are presented
to the Corporation for transfer, both the transferor and transferee request the
Corporation to do so.
Section 4.4 Stockholders of Record. The Corporation shall be
----------------------
entitled to treat the holder of record of any stock of the Corporation as the
holder thereof and shall not be bound to recognize any equitable or other claim
to or interest in such stock on the part of any other person, whether or not it
shall have express or other notice thereof, except as otherwise required by the
laws of the State of Delaware.
ARTICLE V
Notices
Section 5.1 Manner of Notice. Except as otherwise provided by law,
----------------
the Certificate of Incorporation or these By-laws, whenever notice is required
to be given to any stockholder, director or member of any committee of the Board
of Directors, such notice may be given by personal delivery or by depositing it,
in a sealed envelope, in the United States mails, first class, postage prepaid,
addressed, or by delivering it to a telegraph company, charges prepaid, for
transmission, or by transmitting it via telecopier, to such stockholder,
director or member, either at the address of such stockholder, director or
member as it appears on the records of the Corporation or, in the case of such a
director or member, at his or her business address; and such notice shall be
deemed to be given at the time when it is thus personally
10
<PAGE>
delivered, deposited, delivered or transmitted, as the case may be. Such
requirement for notice shall also be deemed satisfied, except in the case of
stockholder meetings, if actual notice is received orally or by other writing by
the person entitled thereto as far in advance of the event with respect to which
notice is being given as the minimum notice period required by law or these By-
laws.
Section 5.2 Dispensation with Notice. (a) Whenever notice is
------------------------
required to be given by law, the Certificate of Incorporation or these By-laws
to any stockholder to whom (i) notice of two consecutive annual meetings of
stockholders, and all notices of meetings of stockholders or of the taking of
action by stockholders by written consent without a meeting to such stockholder
during the period between such two consecutive annual meetings, or (ii) all, and
at least two, payments (if sent by first class mail) of dividends or interest on
securities of the Corporation during a 12-month period, have been mailed
addressed to such stockholder at the address of such stockholder as shown on the
records of the Corporation and have been returned undeliverable, the giving of
such notice to such stockholder shall not be required. Any action or meeting
which shall be taken or held without notice to such stockholder shall have the
same force and effect as if such notice had been duly given. If any such
stockholder shall deliver to the Corporation a written notice setting forth the
then current address of such stockholder, the requirement that notice be given
to such stockholder shall be reinstated.
(b) Whenever notice is required to be given by law, the Certificate
of Incorporation or these By-laws to any person with whom communication is
unlawful, the giving of such notice to such person shall not be required, and
there shall be no duty to apply to any governmental authority or agency for a
license or permit to give such notice to such person. Any action or meeting
which shall be taken or held without notice to any such person with whom
communication is unlawful shall have the same force and effect as if such notice
had been duly given.
Section 5.3 Waivers of Notice. Any written waiver of notice, signed
-----------------
by the person entitled to notice, whether before or after the time stated
therein, shall be deemed equivalent to notice. Attendance of a person at a
meeting shall constitute a waiver of notice of such meeting, except when the
person attends a meeting for the express purpose of objecting, at the beginning
of the meeting, to the transaction of any business because the meeting is not
lawfully called or convened. Neither the business to be transacted at, nor the
purpose of any regular special meeting of the stockholders, directors, or
members of a committee or directors need be specified in any written waiver of
notice.
ARTICLE VI
Indemnification
Section 6.1 Right to Indemnification. (a) The Corporation shall
------------------------
indemnify and hold harmless, to the fullest extent permitted by law as in effect
on the date of adoption of these By-laws or as it may thereafter be amended, any
person who was or is made or is threatened to be made a party or is otherwise
involved in any action, suit or proceeding, whether civil, criminal,
administrative or investigative (a "proceeding") by reason of the fact that he
or she, or a person for whom he or she is the legal representative, 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
11
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director, officer, employee or agent of another corporation, partnership, joint
venture or other enterprise, against any and all liability and loss (including
judgments, fines, penalties and amounts paid in settlement) suffered or incurred
and expenses reasonably incurred by such person; provided that any standard of
conduct applicable to whether a director or officer may be indemnified shall be
equally applicable to an employee or agent under this Article VI. The
Corporation shall not be required to indemnify a person in connection with a
proceeding initiated by such person, including a counterclaim or crossclaim,
unless the proceeding was authorized by the Board of Directors.
(b) For purposes of this Article VI: (i) any reference to "other
enterprise" shall include all plans, programs, policies, agreements, contracts
and payroll practices and related trusts for the benefit of or relating to
employees of the Corporation and its related entities ("employee benefit
plans"); (ii) any reference to "fines", "penalties", "liability" and "expenses"
shall include any excise taxes, penalties, claims, liabilities and reasonable
expenses (including reasonable legal fees and related expenses) assessed against
or incurred by a person with respect to any employee benefit plan; (iii) any
reference to "serving at the request of the Corporation" shall include any
service as a director, officer, employee or agent of the Corporation or trustee
or administrator of any employee benefit plan which imposes duties on, or
involves services by, such director, officer, employee or agent with respect to
an employee benefit plan, its participants, beneficiaries, fiduciaries,
administrators and service providers; (iv) any reference to serving at the
request of the Corporation as a director, officer, employee or agent of a
partnership or trust shall include service as a partner or trustee; and (v) a
person who acted in good faith and in a manner he or she reasonably believed to
be in the interest of the participants and beneficiaries of an employee benefit
plan shall be deemed to have acted in a manner "not opposed to the best
interests of the Corporation" for purposes of this Article VI.
Section 6.2 Prepayment of Expenses. The Corporation may pay or
----------------------
reimburse the reasonable expenses incurred in defending any proceeding in
advance of its final disposition if the Corporation has received in advance an
undertaking by the person receiving such payment or reimbursement to repay all
amounts advanced if it should be ultimately determined that he or she is not
entitled to be indemnified under this Article VI or otherwise. The Corporation
may require security for any such undertaking.
Section 6.3 Claims. If a claim for indemnification or payment of
------
expenses under this Article VI is not paid in full within 60 days after a
written claim therefor has been received by the Corporation, the claimant may
file suit to recover the unpaid amount of such claim and, if successful in whole
or in part, shall be entitled to be paid the expense of prosecuting such claim.
In any such action the Corporation shall have the burden of proving that the
claimant was not entitled to the requested indemnification or payment of
expenses under applicable law.
Section 6.4 Non-Exclusivity of Rights. The rights conferred on any
-------------------------
person by this Article VI shall not be exclusive of any other rights which such
person may have or hereafter acquire under any statute, provision of the
Certificate of Incorporation, these By-laws, agreement, vote of stockholders or
disinterested directors or otherwise.
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Section 6.5 Other Indemnification. The Corporation's obligation, if
---------------------
any, to indemnify any person who was or is serving at its request as a director,
officer, employee, partner or agent of another corporation, partnership, joint
venture or other enterprise shall be reduced by any amount such person may
collect as indemnification from such other corporation, partnership, joint
venture or other enterprise.
Section 6.6 Amendment or Repeal. Any repeal or modification of the
-------------------
foregoing provisions of this Article VI shall not adversely affect any right or
protection hereunder of any person in respect of any act or omission occurring
prior to the time of such repeal or modification.
ARTICLE VII
General
Section 7.1 Fiscal year. The fiscal year of the Corporation shall
-----------
begin on the first Monday after the last Sunday in December of each year and end
on the last Sunday in the following December.
Section 7.2 Seal. The corporate seal shall have the name of the
----
Corporation inscribed thereon and shall be in such form as may be approved from
time to time by the Board of Directors.
Section 7.3 Form of Records. Any records maintained by the
---------------
Corporation in the regular course of its business, including its stock ledger,
books of account, and minute books, may be kept on, or be in the form of, punch
cards, magnetic tape, photographs, microphotographs, or any other information
storage device, provided that the records so kept can be converted into clearly
legible form within a reasonable time. The Corporation shall so convert any
records so kept upon the request of any person entitled to inspect the same.
Section 7.4 Amendment of By-laws. These By-laws may be altered or
--------------------
repealed, and new By-laws made, by the Board of Directors, but the stockholders
may make additional By-laws and may alter and repeal any By-laws whether adopted
by them or otherwise.
Section 7.5 Conflicts. In the event of a conflict between any
---------
provision of these By-laws the provisions of the Amended and Restated
Stockholders' Agreement of even date herewith, the provisions of the Amended and
Restated Stockholders' Agreement shall govern.
* * * * * * * * *
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MEMORARANDUM
To: HOLDERS OF STOCK OPTIONS ISSUED ON OR AFTER JANUARY 1, 2000 UNDER THE
CAREERBUILDER, INC. STOCK INCENTIVE PLANS
Date: AUGUST 11, 2000
Re: NOTICE REGARDING TREATMENT OF STOCK OPTIONS
______________________________________________________________________________
Our records indicate that you are a holder of an option or options
(each a "Company Stock Option"), pursuant to the CareerBuilder, Inc. 1999 Stock
Incentive Plan, to purchase shares of CareerBuilder, Inc. common stock, par
value $.001 per share ("CareerBuilder Common Stock"). Set forth below is a
summary of the treatment of Company Stock Options issued on or after January 1,
2000 pursuant to the Agreement and Plan of Merger dated as of July 16, 2000 (the
"Merger Agreement") among CareerBuilder, Inc. ("CareerBuilder"), Career
Holdings, Inc., a corporation formed by Tribune Company and KnightRidder.com,
Inc. ("Career Holdings"), and CB Acquisition Corp., a wholly owned subsidiary of
Career Holdings ("CB Acquisition"). Please refer to the previously delivered
memorandum summarizing the treatment of Company Stock Options issued prior to
January 1, 2000 for information about the treatment of those Company Stock
Options.
Section 1. The Merger
Pursuant to the Merger Agreement, CB Acquisition has commenced an
offer to purchase all outstanding shares of CareerBuilder Common Stock (the
"Offer") for $8.00 per share in cash, without interest thereon (the "Offer
Price"). Following consummation of the Offer, CB Acquisition will be merged
(the "Merger") with and into CareerBuilder, with CareerBuilder as the surviving
corporation in the Merger, following the satisfaction or waiver of conditions to
the Merger contained in the Merger Agreement. The Offer is scheduled to expire
at midnight on August 21, 2000. Following the consummation of the Merger, each
share of CareerBuilder Common Stock outstanding immediately prior to the
effective time of the Merger (the "Effective Time") will be converted into the
right to receive the Offer Price.
Section 2. Options Granted on or After January 1, 2000
Immediately after the Effective Time, each outstanding Company Stock
Option that was granted on or after January 1, 2000 will automatically convert
into an option to purchase shares of common stock of Career Holdings (each a
"Substitute Stock Option") equal in number to the shares subject to such Company
Stock Option immediately prior to the Effective Time. Such Substitute Stock
Options will be issued pursuant to a stock option plan to be adopted by Career
Holdings and will be subject to substantially the same terms and conditions that
were applicable to the related Company Stock Option immediately prior to the
Effective Time, including the vesting and exercise conditions then applicable to
such Company Stock Option, without regard to the transactions contemplated by
the Merger Agreement. However, shares of common stock of Career Holdings
purchased upon the exercise of each Substitute Stock Option will, for so
<PAGE>
long as such common stock is not traded on an established stock exchange or
national market system, be subject to a right of repurchase by Career Holdings
at their fair market value under such conditions as Career Holdings shall deem
appropriate.
EACH SUBSTITUTE STOCK OPTION SHALL BE ISSUED PURSUANT TO A STOCK OPTION PLAN TO
BE ADOPTED BY CAREER HOLDINGS. A COPY OF THE CAREER HOLDINGS STOCK OPTION PLAN
WILL BE DELIVERED TO EACH RECIPIENT OF SUBSTITUTE STOCK OPTIONS AT THE TIME OF
ISSUANCE OF SUCH STOCK OPTIONS.
THERE IS CURRENTLY NO PUBLIC MARKET FOR SHARES OF CAREER HOLDINGS AND THERE CAN
BE NO GUARANTEE THAT SUCH A MARKET WILL DEVELOP. THE SHARES TO BE ISSUED UPON
EXERCISE OF SUBSTITUTE STOCK OPTIONS WILL BE "RESTRICTED SECURITIES" WITHIN THE
MEANING OF THE SECURITIES ACT OF 1933 AND MAY NOT BE SOLD WITHOUT REGISTRATION
UNDER THE SECURITIES ACT OF 1933 AND APPLICABLE STATE SECURITIES LAWS OR AN
APPLICABLE EXEMPTION THEREFROM.
CAREER HOLDINGS HAS NO FINANCIAL OR OPERATING HISTORY AND ANY INVESTMENT IN
CAREER HOLDINGS IS A SPECULATIVE INVESTMENT WHICH INVOLVES A HIGH DEGREE OF RISK
OF LOSS BY THE HOLDER OF ALL OF HIS OR HER INVESTMENT.
Section 3. General Information Only
The information provided in this memorandum is a general description of the
treatment of certain Company Stock Options in the Merger. Additional
information with respect to the treatment of Company Stock Options is contained
in the Tender Offer Statement on Schedule TO filed by Career Holdings with the
Securities and Exchange Commission ("SEC") on July 25, 2000, as amended (the
"Schedule TO"), and the Solicitation/Recommendation Statement on Schedule 14D-9
filed by CareerBuilder with the SEC on July 25, 2000, as amended (the "Schedule
14D-9"). Copies of the Schedule TO and the Schedule 14D-9 are publicly
available at the SEC's Web site at http://www.sec.gov and may also be obtained
by contacting CareerBuilder at 10780 Parkridge Boulevard, Suite 200, Reston,
Virginia 20191, Attention: Jamie McCarthy. Career Holdings is a newly formed
corporation organized in connection with the Offer and the Merger. The form of
Amended and Restated Certificate of Incorporation and Amended and Restated By-
Laws of Career Holdings to be effective after the Effective Time are attached
hereto as Annex I and Annex II, respectively. It is expected that after the
Effective Time Career Holdings will initially have outstanding capital stock
consisting of approximately 33,108,000 shares of common stock, $.01 par value
per share ("Career Holdings Common Stock"). Initially, the Career Holdings
Common Stock will be held by Tribune Company, KnightRidder.com, Inc., Robert J.
McGovern and James A. Winchester (the "Initial Stockholders"). The amended and
restated stockholders agreement and the registration rights agreement to be
entered into by the Initial Stockholders setting forth certain rights of and
restrictions on their shares of Career Holdings Common Stock are described in
and filed as exhibits to the Schedule TO and are incorporated herein by
reference. Holders of Company Stock Options who will receive Substitute Stock
Options are urged to read the Amended and Restated Certificate of
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<PAGE>
Incorporation, Amended and Restated By-Laws, amended and restated stockholders
agreement and registration rights agreement and the other information contained
in the Schedule TO and the Schedule 14D-9 carefully.
Please refer to the option plans as well as your option agreement available
on the AST website (www.aststockplan.com) and/or your employment offer letter
for information specific to you.
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<PAGE>
Annex I
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
CAREER HOLDINGS, INC.
FIRST: The name of the corporation (which is hereinafter referred to
as the "Corporation") is Career Holdings, Inc.
SECOND: The address of the Corporation's registered office in the
State of Delaware is The Corporation Trust Company, The Corporation Trust
Center, 1209 Orange Street, in the City of Wilmington, County of New Castle.
THIRD: The purpose of the Corporation is to engage in any lawful act
or activity for which corporations may be organized under the General
Corporation Law of Delaware.
FOURTH: The total number of shares of all classes of capital stock
which the Corporation shall have the authority to issue is 77,800,000 shares of
common stock with a par value of $.01 per share.
FIFTH: In furtherance and not in limitation of the powers conferred
by statute, the Board of Directors is expressly authorized to make, alter or
repeal the By-laws of the Corporation, subject to any specific limitation on
such power contained in any By-laws adopted by the stockholders. Elections of
directors need not be by written ballot unless the By-laws of the Corporation so
provide.
SIXTH: A director of the Corporation shall not be personally liable
to the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach of the
director's duty of loyalty to the Corporation or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the General Corporation Law
of Delaware, or (iv) for any transaction from which the director derived an
improper personal benefit. If the General Corporation Law of Delaware is
amended to authorize corporate action further eliminating or limiting the
personal liability of directors, then the liability of a director of the
Corporation shall be eliminated or limited to the fullest extent permitted by
the General Corporation Law of Delaware, as so amended. Any repeal or
modification of this Article Seventh by the stockholders of the Corporation
shall not adversely affect any right or protection of a director of the
Corporation existing at the time of such repeal or modification.
SEVENTH: Each person who is or was a director or officer of the
Corporation, and each person who serves or served at the request of the
Corporation as a director or officer of another enterprise, shall be indemnified
by the Corporation in accordance with, and to the fullest extent authorized by,
the General Corporation Law of Delaware as it may be in effect from time to
time.
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<PAGE>
THE UNDERSIGNED, being the President of the Corporation, has executed
this Amended and Restated Certificate of Incorporation on August __, 2000.
By: __________________________
Name:
Title:
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<PAGE>
Annex II
AMENDED AND RESTATED
BY-LAWS
OF
CAREER HOLDINGS, INC.
ARTICLE I
Stockholders Meetings
Section 1.1 Annual Meetings. An annual meeting of stockholders shall be held
---------------
for the election of directors at such date, time and place as may be fixed by
resolution of the Board of Directors from time to time.
Section 1.2 Special Meetings. Special meetings of stockholders for any
----------------
purpose or purposes may be called at any time only by the Chairman of the Board,
if any, the President, the Board of Directors or by a committee of the Board of
Directors authorized to call such meetings, and by no other person. The
business transacted at a special meeting of stockholders shall be limited to the
purpose or purposes for which such meeting is called, except as otherwise
determined by the Board of Directors or the chairman of the meeting.
Section 1.3 Notice of Meetings. A written notice of each annual or special
------------------
meeting of stockholders shall be given stating the place, date and time of the
meeting, and, in the case of a special meeting, the purpose or purposes for
which the meeting is called. Unless otherwise provided by law, the Certificate
of Incorporation or these By-laws, such notice of meeting shall be given not
less than ten nor more than sixty days before the date of the meeting to each
stockholder of record entitled to vote at such meeting. If mailed, such notice
shall be deemed to be given when deposited in the mail, postage prepaid,
directed to the stockholder at such stockholder's address as it appears on the
records of the Corporation.
Section 1.4 Adjournments. Any annual or special meeting of stockholders may
------------
be adjourned from time to time to reconvene at the same or some other place, and
notice need not be given of any such adjourned meeting if the date, time and
place thereof are announced at the meeting at which the adjournment is taken.
At the adjourned meeting any business may be transacted which might have been
transacted at the original meeting. If the adjournment is for more than 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 adjourned meeting in accordance with Section 1.3.
Section 1.5 Quorum. Except as otherwise provided by law, the Certificate of
------
Incorporation or these By-laws, the presence in person or by proxy of the
holders of stock having a majority of the votes which could be cast by the
holders of all outstanding stock entitled to vote at the meeting shall
constitute a quorum at each meeting of stockholders. In the absence of a
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quorum, the stockholders so present may, by the affirmative vote of the holders
of stock having a majority of the votes which could be cast by all such holders,
adjourn the meeting from time to time in the manner provided in Section 1.4 of
these By-laws until a quorum is present. If a quorum is present when a meeting
is convened, the subsequent withdrawal of stockholders, even though less than a
quorum remains, shall not affect the ability of the remaining stockholders
lawfully to transact business.
Section 1.6 Organization. Meetings of stockholders shall be presided over by
------------
the Chairman of the Board, if any, or if there is none or in his or her absence,
by the President, or in his or her absence, by a chairman designated by the
Board of Directors, or in the absence of such designation by a chairman chosen
at the meeting. The Secretary shall act as secretary of the meeting, but in his
or her absence the chairman of the meeting may appoint any person to act as
secretary of the meeting.
Section 1.7 Voting. (a) Except as otherwise provided by the Certificate of
------
Incorporation, each stockholder entitled to vote at any meeting of stockholders
shall be entitled to one vote for each share of stock held by such stockholder
which has voting power on the matter in question.
(b) Voting at meetings of stockholders need not be by written ballot
unless as determined by the holders of stock having a majority of the votes
which could be cast by the holders of all outstanding stock entitled to vote
which are present in person or by proxy at such meeting. Unless otherwise
provided in the Certificate of Incorporation, directors shall be elected by a
plurality of the votes cast in the election of directors. Each other question
shall, unless otherwise provided by law, the Certificate of Incorporation or
these By-laws, be decided by the vote of the holders of stock having a majority
of the votes which could be cast by the holders of all stock entitled to vote on
such question which are present in person or by proxy at the meeting.
(c) Stock of the Corporation standing in the name of another
corporation and entitled to vote may be voted by such officer, agent or proxy as
the by-laws or other internal regulations of such other corporation may
prescribe or, in the absence of such provision, as the board of directors or
comparable body of such other corporation may determine.
(d) Stock of the Corporation standing in the name of a deceased
person, a minor, an incompetent or a debtor in a case under Title 11, United
States Code, and entitled to vote may be voted by an administrator, executor,
guardian, conservator, debtor-in-possession or trustee, as the case may be,
either in person or by proxy, without transfer of such shares into the name of
the official or other person so voting.
(e) A stockholder whose voting stock of the Corporation is pledged
shall be entitled to vote such stock unless on the transfer records of the
Corporation the pledgor has expressly empowered the pledgee to vote such shares,
in which case only the pledgee, or such pledgee's proxy, may represent such
shares and vote thereon.
(f) If voting stock is held of record in the names of two or more
persons, whether fiduciaries, members of a partnership, joint tenants, tenants
in common, tenants by the entirety or otherwise, or if two or more persons have
the same fiduciary relationship respecting
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<PAGE>
the same shares, unless the Secretary is given written notice to the contrary
and is furnished with a copy of the instrument or order appointing them or
creating the relationship wherein it is so provided, their acts with respect to
voting shall have the following effect: (i) if only one votes, such act binds
all; (ii) if more than one vote, the act of the majority so voting binds all;
and (iii) if more than one votes, but the vote is evenly split on any particular
matter each faction may vote such stock proportionally, or any person voting the
shares, or a beneficiary, if any, may apply to the Court of Chancery of the
State of Delaware or such other court as may have jurisdiction to appoint an
additional person to act with the persons so voting the stock, which shall then
be voted as determined by a majority of such persons and the person appointed by
the Court. If the instrument so filed shows that any such tenancy is held in
unequal interests, a majority or even split for the purpose of this subsection
shall be a majority or even split in interest.
(g) Stock of the Corporation belonging to the Corporation, or to
another corporation a majority of the shares entitled to vote in the election of
directors of which are held by the Corporation, shall not be voted at any
meeting of stockholders and shall not be counted in the total number of
outstanding shares for the purpose of determining whether a quorum is present.
Nothing in this Section 1.7 shall limit the right of the Corporation to vote
shares of stock of the Corporation held by it in a fiduciary capacity.
Section 1.8 Proxies. (a) Each stockholder entitled to vote at a meeting of
-------
stockholders may authorize another person or persons to act for such stockholder
by proxy filed with the Secretary before or at the time of the meeting. No such
proxy shall be voted or acted upon after three years from its date, unless the
proxy provides for a longer period. 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
stockholder may revoke any proxy which is not irrevocable by attending the
meeting and voting in person or by filing with the Secretary an instrument in
writing revoking the proxy or another duly executed proxy bearing a later date.
(b) A stockholder may authorize another person or persons to act for
such stockholder as proxy (i) by executing a writing authorizing such person or
persons to act as such, which execution may be accomplished by such stockholder
or such stockholder's authorized officer, director, partner, employee or agent
(or, if the stock is held in a trust or estate, by a trustee, executor or
administrator thereof) signing such writing or causing his or her signature to
be affixed to such writing by any reasonable means, including, but not limited
to, facsimile signature, or (ii) by transmitting or authorizing the transmission
of a telegram, cablegram or other means of electronic transmission (a
"Transmission") to the person who will be the holder of the proxy or to a proxy
solicitation firm, proxy support service organization or like agent duly
authorized by the person who will be the holder of the proxy to receive such
Transmission; provided that any such Transmission must either set forth or be
submitted with information from which it can be determined that such
Transmission was authorized by such stockholder.
(c) The Secretary or such other person or persons as shall be
appointed from time to time by the Board of Directors shall examine
Transmissions to determine if they are valid. If it is determined a
Transmission is valid, the person or persons making that determination shall
specify the information upon which such person or persons relied. Any copy,
facsimile telecommunication or other reliable reproduction of such a writing or
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<PAGE>
Transmission may be substituted or used in lieu of the original writing or
Transmission for any and all purposes for which the original writing or
Transmission could be used; provided that such copy, facsimile telecommunication
or other reproduction shall be a complete reproduction of the entire original
writing or Transmission.
Section 1.9 Fixing Date of Determination of Stockholders of Record. (a) In
------------------------------------------------------
order that the corporation may determine the stockholders entitled (i) to notice
of or to vote at any meeting of stockholders or any adjournment thereof, (ii) to
express consent to corporate action in writing without a meeting, (iii) to
receive payment of any dividend or other distribution or allotment of any
rights, (iv) to exercise any rights in respect of any change, conversion or
exchange of stock or (v) to take, receive or participate in any other action,
the Board of Directors may fix a record date, which shall not be earlier than
the date upon which the resolution fixing the record date is adopted by the
Board of Directors and which (1) in the case of a determination of stockholders
entitled to notice of or to vote at any meeting of stockholders or adjournment
thereof, shall, unless otherwise required by law, be not more than 60 nor less
than ten days before the date of such meeting; (2) in the case of a
determination of stockholders entitled to express consent to corporate action in
writing without a meeting, shall be not more than ten days after the date upon
which the resolution fixing the record date is adopted by the Board of
Directors; and (3) in the case of any other action, shall be not more than 60
days before such action.
(b) If no record date is fixed, (i) the record date for determining
stockholders entitled to notice of or to vote at a meeting of stockholders shall
be at the close of business on the day next preceding the day on which notice is
given, or, if notice is waived, at the close of business on the day next
preceding the day on which the meeting is held; (ii) the record date for
determining stockholders entitled to express consent to corporate action in
writing without a meeting when no prior action of the Board of Directors is
required by law, shall be the first date on which a signed written consent
setting forth the action taken or proposed to be taken is delivered to the
corporation in accordance with applicable law, or, if prior action by the Board
of Directors is required by law, shall be at the close of business on the day on
which the Board of Directors adopts the resolution taking such prior action; and
(iii) the record date for determining stockholders for any other purpose shall
be at the close of business on the day on which the Board of Directors adopts
the resolution relating thereto.
(c) 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, but the Board of Directors may fix a new record date for the adjourned
meeting.
Section 1.10 List of Stockholders Entitled to Vote. The Secretary shall
-------------------------------------
prepare, at least ten days before every meeting of stockholders, a complete list
of the stockholders entitled to vote at the meeting, arranged in alphabetical
order, and showing the address 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 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 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. The stock ledger shall be the only evidence as to
who are the stockholders entitled to
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<PAGE>
examine the stock ledger, the list of stockholders or the books of the
corporation, or to vote in person or by proxy at any meeting of stockholders.
Section 1.11 Action By Consent of Stockholders. (a) Unless the power of
---------------------------------
stockholders to act by consent without a meeting is restricted or eliminated by
the Certificate of Incorporation, any action required or permitted to be taken
at any annual or special meeting of stockholders may be taken without a meeting,
without prior notice and without a vote, if a consent in writing, setting forth
the action so taken, is 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 on such
action were present and voted.
(b) Every written consent shall bear the date of signature of each
stockholder (or his, her or its proxy) signing such consent. Prompt notice of
the taking of corporate action without a meeting of stockholders by less than
unanimous written consent shall be given to those stockholders who have not
consented in writing. All such written consents shall be delivered to the
Corporation at its registered office in the State of Delaware, at its principal
place of business or to the Secretary. Delivery made to the Corporation's
registered office shall be by hand or by certified or registered mail, return
receipt requested. No written consent shall be effective to authorize or take
the corporate action referred to therein unless, within 60 days of the earliest
dated written consent delivered to the Corporation in the manner required by
this Section 1.11, written consents signed by a sufficient number of persons to
authorize or take such action are delivered to the Corporation at its registered
office in the State of Delaware, at its principal place of business or to the
Secretary. All such written consents shall be filed with the minutes of
proceedings of the stockholders, and actions authorized or taken under such
written consents shall have the same force and effect as those authorized or
taken pursuant to a vote of the stockholders at an annual or special meeting.
ARTICLE II
Board of Directors
Section 2.1 Number. The Board of Directors shall initially consist of two
------
directors. Thereafter, the Board of Directors shall consist of one or more
directors as may from time to time be determined by resolution of the Board of
Directors.
Section 2.2 Election; Resignation; Vacancies. (a) Unless the certificate of
--------------------------------
incorporation or an amendment to these By-laws adopted by the stockholders
provides for a Board of Directors divided into two or three classes, at each
annual meeting of stockholders the stockholders shall elect directors each of
whom shall hold office until the next annual meeting of stockholders and the
election and qualification of his or her successor, or until his or her earlier
death, resignation or removal. If the Board of Directors is divided into
classes, at each annual meeting at which the term of office of a class of
directors expires, the stockholders shall elect directors of such class each to
hold office until the annual meeting at which the terms of office of such class
of directors expire and the election and qualification of his or her successor,
or until his or her earlier death, resignation or removal.
(b) Any director may resign at any time by giving written notice to
the Chairman of the Board, if any, the President or the Secretary. Unless
otherwise stated in a notice
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<PAGE>
of resignation, it shall take effect when received by the officer to whom it is
directed, without any need for its acceptance.
(c) Any newly created directorship occurring in the Board of
Directors may be filled by a majority of the remaining directors, although less
than a quorum, or by a plurality of the votes cast in the election of directors
at a meeting of stockholders. Any vacancy occurring in the Board of Directors
shall be filled by the stockholder that designated the vacating director;
provided however, that any vacancy occurring in the Board of Directors created
-------- -------
upon the resignation or removal of an Outside Director (as defined in the
Amended and Restated Stockholders' Agreement of even date herewith) shall be
filled by the appointment of a director by the Management Stockholders (as
defined in the Amended and Restated Stockholders' Agreement of even date
herewith), subject to the unanimous approval of the Institutional Stockholders
(as defined in the Amended and Restated Stockholders' Agreement of even date
herewith). Each director elected to replace a former director shall hold office
until the expiration of the term of office of the director whom he or she has
replaced and the election and qualification of his or her successor, or until
his or her earlier death, resignation or removal. A director elected to fill a
newly created directorship shall serve until the next annual meeting of
stockholders (or, if the Board of Directors is divided into classes, the annual
meeting at which the terms of office of the class of directors to which he or
she is assigned expire) and the election and qualification of his or her
successor, or until his or her earlier death, resignation or removal.
Section 2.3 Regular Meetings. A regular annual meeting of the Board of
----------------
Directors shall be held, without call or notice, immediately after and at the
same place as the annual meeting of stockholders, for the purpose of organizing
the Board of Directors, electing officers and transacting any other business
that may properly come before such meeting. If the stockholders shall elect the
directors by written consent of stockholders as permitted by Section 1.11 of
these By-laws, a special meeting of the Board of Directors shall be called as
soon as practicable after such election for the purposes described in the
preceding sentence. Additional regular meetings of the Board of Directors may
be held without call or notice at such times as shall be fixed by resolution of
the Board of Directors.
Section 2.4 Special Meetings. Special meetings of the Board of Directors may
----------------
be called by the Chairman of the Board, if any, the President, the Secretary, or
by any member of the Board of Directors. Notice of a special meeting of the
Board of Directors shall be given by the person or persons calling the meeting
at least twenty-four hours before the special meeting. The purpose or purposes
of a special meeting need not be stated in the call or notice.
Section 2.5 Organization. Meetings of the Board of Directors shall be
------------
presided over by the Chairman of the Board, if any, or if there is none or in
his or her absence, by the President, or in his or her absence by a chairman
chosen at the meeting. The Secretary shall act as secretary of the meeting, but
in his or her absence the chairman of the meeting may appoint any person to act
as secretary of the meeting. A majority of the directors present at a meeting,
whether or not they constitute a quorum, may adjourn such meeting to any other
date, time or place without notice other than announcement at the meeting.
Section 2.6 Quorum; Vote Required for Action. At all meetings of the Board
--------------------------------
of Directors a majority of the whole Board of Directors shall constitute a
quorum for the transaction of
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business. Unless the Certificate of Incorporation or these By-laws otherwise
provide, the vote of a majority of the directors present at a meeting at which a
quorum is present shall be the act of the Board of Directors.
Section 2.7 Committees. The Board of Directors may, by resolution passed by
----------
a majority of the whole Board of Directors, which majority must include both of
the directors designated by the Institutional Stockholders (as defined in the
Amended and Restated Stockholders' Agreement of even date herewith), designate
one or more committees, each committee to consist of one or more directors of
the Corporation. 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. In the absence or disqualification of a
member of the committee, the member or members present at any meeting and not
disqualified from voting, whether or not 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. Any such committee, to the extent permitted
by law and provided in the resolution of the Board of Directors designating such
committee, or an amendment to such resolution, shall have and may exercise all
the powers and authority of the Board of Directors in the management of the
business and affairs of the Corporation, and may authorize the seal of the
Corporation to be affixed to all papers which may require it.
Section 2.8 Telephonic Meetings. Directors, or any committee of directors
-------------------
designated by the Board of Directors, may participate in a meeting of the Board
of Directors or such committee by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and participation in a meeting pursuant to this
Section 2.8 shall constitute presence in person at such meeting.
Section 2.9 Informal Action by Directors. Unless otherwise restricted by the
----------------------------
Certificate of Incorporation or these By-laws, any action required or permitted
to be taken at any meeting of the Board of Directors, or of any committee
thereof, may be taken without a meeting if all members of the Board of Directors
or such committee, as the case may be, consent thereto in writing (which may be
in counterparts), and the written consent or consents are filed with the minutes
of proceedings of the Board of Directors or such committee.
Section 2.10 Committee Rules. Unless the Board of Directors otherwise
---------------
provides, each committee designated by the Board of Directors may make, alter
and repeal rules for the conduct of its business. In the absence of such rules
each committee shall conduct its business in the same manner as the Board of
Directors conducts its business pursuant to this Article II of these By-laws.
Section 2.11 Reliance upon Records. Every director, and every member of any
---------------------
committee of the Board of Directors, shall, in the performance of his or her
duties, be fully protected in relying in good faith upon the records of the
Corporation and upon such information, opinions, reports or statements presented
to the Corporation by any of its officers or employees, or committees of the
Board of Directors, or by any other person as to matters the director or member
reasonably believes are within such other person's professional or expert
competence and who has been selected with reasonable care by or on behalf of the
Corporation, including, but not limited to, such records, information, opinions,
reports or statements as to the value and
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amount of the assets, liabilities and/or net profits of the Corporation, or any
other facts pertinent to the existence and amount of surplus or other funds from
which dividends might properly be declared and paid, or with which the
Corporation's capital stock might properly be purchased or redeemed.
Section 2.12 Interested Directors. A director who is directly or indirectly a
--------------------
party to a contract or transaction with the Corporation, or is a director or
officer of or has a financial interest in any other corporation, partnership,
association or other organization which is a party to a contract or transaction
with the Corporation, may be counted in determining whether a quorum is present
at any meeting of the Board of Directors or a committee thereof at which such
contract or transaction is considered or authorized, and such director may
participate in such meeting and vote on such authorization to the extent
permitted by applicable law, including Section 144 of the General Corporation
Law of the State of Delaware.
Section 2.13 Compensation. Unless otherwise restricted by the Certificate of
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Incorporation, the Board of Directors shall have the authority to fix the
compensation of directors. The directors shall be paid their reasonable
expenses, if any, of attendance at each meeting of the Board of Directors or a
committee thereof and may be paid a fixed sum for attendance at each such
meeting and an annual retainer or salary for services as a director or committee
member. No such payment shall preclude any director from serving the
Corporation in any other capacity and receiving compensation therefor.
Section 2.14 Presumption of Assent. Unless otherwise provided by the laws of
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the State of Delaware, a director who is present at a meeting of the Board of
Directors or a committee thereof at which action is taken on any matter shall be
presumed to have assented to the action taken unless his or her dissent shall be
entered in the minutes of such meeting or unless he or she shall file his or her
written dissent to such action with the person acting as secretary of such
meeting before the adjournment thereof or shall forward such dissent by
registered mail to the Secretary immediately after the adjournment of such
meeting. Such right to dissent shall not apply to a director who voted in favor
of such action.
ARTICLE III
Officers
Section 3.1 Executive Officers; Election; Qualification; Term of Office. The
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Board of Directors shall elect a President and may, if it so determines, elect a
Chairman of the Board from among its members. The Board of Directors shall also
elect a Secretary and may elect one or more Vice Presidents, one or more
Assistant Secretaries, a Treasurer and one or more Assistant Treasurers. Any
number of offices may be held by the same person. Each officer shall hold
office until his or her successor is elected and qualified or until his or her
earlier death, resignation or removal.
Section 3.2 Resignation; Removal; Vacancies. Any officer may resign at any
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time by giving written notice to the Chairman of the Board, if any, the
President or the Secretary. Unless otherwise stated in a notice of resignation,
it shall take effect when received by the officer to whom it is directed,
without any need for its acceptance. The Board of Directors may remove any
officer with or without cause at any time, but such removal shall be without
prejudice to the
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contractual rights of such officer, if any, with the Corporation. A vacancy
occurring in any office of the Corporation may be filled for the unexpired
portion of the term thereof by the Board of Directors at any regular or special
meeting.
Section 3.3 Powers and Duties of Executive Officers. The officers of the
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Corporation shall have such powers and duties in the management of the
Corporation as may be prescribed by the Board of Directors and, to the extent
not so provided, as generally pertain to their respective offices, subject to
the control of the Board of Directors. The Board of Directors may require any
officer, agent or employee to give security for the faithful performance of his
or her duties.
Section 3.4 Chief Executive Officer. Unless the Board of Directors elects a
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Chairman of the Board who is designated as such, the President shall be the
Chief Executive Officer of the Corporation and shall in general supervise and
control all of the business affairs of the Corporation, subject to the direction
of the Board of Directors. The President may execute, in the name and on behalf
of the Corporation, any deeds, mortgages, bonds, contracts or other instruments
which the Board of Directors or a committee thereof has authorized to be
executed, except in cases where the execution shall have been expressly
delegated by the Board of Directors or a committee thereof to some other officer
or agent of the corporation.
Section 3.5 Secretary. In addition to such other duties, if any, as may be
---------
assigned to the Secretary by the Board of Directors, the Chairman of the Board,
if any, or the President, the Secretary shall (i) keep the minutes of
proceedings of the stockholders, the Board of Directors and any committee of the
Board of Directors in one or more books provided for that purpose; (ii) see that
all notices are duly given in accordance with the provisions of these By-laws or
as required by law; (iii) be the custodian of the records and seal of the
Corporation; (iv) affix or cause to be affixed the seal of the Corporation or a
facsimile thereof, and attest the seal by his or her signature, to all
certificates for shares of stock of the Corporation and to all other documents
the execution of which under seal is authorized by the Board of Directors; and
(v) unless such duties have been delegated by the Board of Directors to a
transfer agent of the Corporation, keep or cause to be kept a register of the
name and address of each stockholder, as the same shall be furnished to the
Secretary by such stockholder, and have general charge of the stock transfer
records of the Corporation.
ARTICLE IV
Stock Certificates and Transfers
Section 4.1 Certificate. Every holder of stock shall be entitled to have a
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certificate signed by or in the name of the Corporation by the Chairman of the
Board, if any, or the President or a Vice President, and by the Secretary or an
Assistant Secretary, of the Corporation, certifying the number of shares owned
by such stockholder in the Corporation. Any of or all the signatures on the
certificate may be facsimile. In case any officer, transfer agent, or registrar
who has signed or whose facsimile signature has been placed upon a certificate
shall have ceased to be such officer, transfer agent or registrar before such
certificate is issued, it may be issued by the Corporation with the same effect
as if such officer, transfer agent, or registrar continued to be such at the
date of issue.
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Section 4.2 Lost, Stolen or Destroyed Certificates; Issuance of New
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Certificates. The Corporation may issue a new certificate for stock in the
------------
place of any certificate theretofore issued by it, alleged to have been lost,
stolen or destroyed, and the Corporation may require the owner of the lost,
stolen or destroyed certificate, or such stockholder's legal representative, to
give the Corporation a bond sufficient to indemnify it against any claim that
may be made against it on account of the alleged loss, theft or destruction of
any such certificate or the issuance of such new certificate.
Section 4.3 Transfers of Stock. Upon surrender to the Corporation or the
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transfer agent of the Corporation of a certificate for stock of the Corporation
duly endorsed or accompanied by proper evidence of succession, assignment or
authority to transfer or, if the relevant stock certificate is claimed to have
been lost, stolen or destroyed, upon compliance with the provisions of Section
4.2 of these By-laws, and upon payment of applicable taxes with respect to such
transfer, and in compliance with any restrictions on transfer applicable to such
stock certificate or the shares represented thereby of which the Corporation
shall have notice and subject to such rules and regulations as the Board of
Directors may from time to time deem advisable concerning the transfer and
registration of stock certificates, the Corporation shall issue a new
certificate or certificates for such stock to the person entitled thereto,
cancel the old certificate and record the transaction upon its books. Transfers
of stock shall be made only on the books of the Corporation by the registered
holder thereof or by such holder's attorney or successor duly authorized as
evidenced by documents filed with the Secretary or transfer agent of the
Corporation. Whenever any transfer of stock shall be made for collateral
security, and not absolutely, it shall be so expressed in the entry of transfer
if, when the certificate or certificates representing such stock are presented
to the Corporation for transfer, both the transferor and transferee request the
Corporation to do so.
Section 4.4 Stockholders of Record. The Corporation shall be entitled to
----------------------
treat the holder of record of any stock of the Corporation as the holder thereof
and shall not be bound to recognize any equitable or other claim to or interest
in such stock on the part of any other person, whether or not it shall have
express or other notice thereof, except as otherwise required by the laws of the
State of Delaware.
ARTICLE V
Notices
Section 5.1 Manner of Notice. Except as otherwise provided by law, the
----------------
Certificate of Incorporation or these By-laws, whenever notice is required to be
given to any stockholder, director or member of any committee of the Board of
Directors, such notice may be given by personal delivery or by depositing it, in
a sealed envelope, in the United States mails, first class, postage prepaid,
addressed, or by delivering it to a telegraph company, charges prepaid, for
transmission, or by transmitting it via telecopier, to such stockholder,
director or member, either at the address of such stockholder, director or
member as it appears on the records of the Corporation or, in the case of such a
director or member, at his or her business address; and such notice shall be
deemed to be given at the time when it is thus personally delivered, deposited,
delivered or transmitted, as the case may be. Such requirement for notice shall
also be deemed satisfied, except in the case of stockholder meetings, if actual
notice is received orally or by other
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writing by the person entitled thereto as far in advance of the event with
respect to which notice is being given as the minimum notice period required by
law or these By-laws.
Section 5.2 Dispensation with Notice. (a) Whenever notice is required to be
------------------------
given by law, the Certificate of Incorporation or these By-laws to any
stockholder to whom (i) notice of two consecutive annual meetings of
stockholders, and all notices of meetings of stockholders or of the taking of
action by stockholders by written consent without a meeting to such stockholder
during the period between such two consecutive annual meetings, or (ii) all, and
at least two, payments (if sent by first class mail) of dividends or interest on
securities of the Corporation during a 12-month period, have been mailed
addressed to such stockholder at the address of such stockholder as shown on the
records of the Corporation and have been returned undeliverable, the giving of
such notice to such stockholder shall not be required. Any action or meeting
which shall be taken or held without notice to such stockholder shall have the
same force and effect as if such notice had been duly given. If any such
stockholder shall deliver to the Corporation a written notice setting forth the
then current address of such stockholder, the requirement that notice be given
to such stockholder shall be reinstated.
(b) Whenever notice is required to be given by law, the Certificate
of Incorporation or these By-laws to any person with whom communication is
unlawful, the giving of such notice to such person shall not be required, and
there shall be no duty to apply to any governmental authority or agency for a
license or permit to give such notice to such person. Any action or meeting
which shall be taken or held without notice to any such person with whom
communication is unlawful shall have the same force and effect as if such notice
had been duly given.
Section 5.3 Waivers of Notice. Any written waiver of notice, signed by the
-----------------
person entitled to notice, whether before or after the time stated therein,
shall be deemed equivalent to notice. Attendance of a person at a meeting shall
constitute a waiver of notice of such meeting, except when the person attends a
meeting for the express purpose of objecting, at the beginning of the meeting,
to the transaction of any business because the meeting is not lawfully called or
convened. Neither the business to be transacted at, nor the purpose of any
regular special meeting of the stockholders, directors, or members of a
committee or directors need be specified in any written waiver of notice.
ARTICLE VI
Indemnification
Section 6.1 Right to Indemnification. (a) The Corporation shall indemnify
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and hold harmless, to the fullest extent permitted by law as in effect on the
date of adoption of these By-laws or as it may thereafter be amended, any person
who was or is made or is threatened to be made a party or is otherwise involved
in any action, suit or proceeding, whether civil, criminal, administrative or
investigative (a "proceeding") by reason of the fact that he or she, or a person
for whom he or she is the legal representative, is or was a director, officer,
employee or agent of the Corporation or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture or other enterprise, against any and all liability
and loss (including judgments, fines, penalties and amounts paid in settlement)
suffered or incurred and expenses reasonably incurred by such person; provided
that
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any standard of conduct applicable to whether a director or officer may be
indemnified shall be equally applicable to an employee or agent under this
Article VI. The Corporation shall not be required to indemnify a person in
connection with a proceeding initiated by such person, including a counterclaim
or crossclaim, unless the proceeding was authorized by the Board of Directors.
(b) For purposes of this Article VI: (i) any reference to "other
enterprise" shall include all plans, programs, policies, agreements, contracts
and payroll practices and related trusts for the benefit of or relating to
employees of the Corporation and its related entities ("employee benefit
plans"); (ii) any reference to "fines", "penalties", "liability" and "expenses"
shall include any excise taxes, penalties, claims, liabilities and reasonable
expenses (including reasonable legal fees and related expenses) assessed against
or incurred by a person with respect to any employee benefit plan; (iii) any
reference to "serving at the request of the Corporation" shall include any
service as a director, officer, employee or agent of the Corporation or trustee
or administrator of any employee benefit plan which imposes duties on, or
involves services by, such director, officer, employee or agent with respect to
an employee benefit plan, its participants, beneficiaries, fiduciaries,
administrators and service providers; (iv) any reference to serving at the
request of the Corporation as a director, officer, employee or agent of a
partnership or trust shall include service as a partner or trustee; and (v) a
person who acted in good faith and in a manner he or she reasonably believed to
be in the interest of the participants and beneficiaries of an employee benefit
plan shall be deemed to have acted in a manner "not opposed to the best
interests of the Corporation" for purposes of this Article VI.
Section 6.2 Prepayment of Expenses. The Corporation may pay or reimburse the
----------------------
reasonable expenses incurred in defending any proceeding in advance of its final
disposition if the Corporation has received in advance an undertaking by the
person receiving such payment or reimbursement to repay all amounts advanced if
it should be ultimately determined that he or she is not entitled to be
indemnified under this Article VI or otherwise. The Corporation may require
security for any such undertaking.
Section 6.3 Claims. If a claim for indemnification or payment of expenses
------
under this Article VI is not paid in full within 60 days after a written claim
therefor has been received by the Corporation, the claimant may file suit to
recover the unpaid amount of such claim and, if successful in whole or in part,
shall be entitled to be paid the expense of prosecuting such claim. In any such
action the Corporation shall have the burden of proving that the claimant was
not entitled to the requested indemnification or payment of expenses under
applicable law.
Section 6.4 Non-Exclusivity of Rights. The rights conferred on any person by
-------------------------
this Article VI shall not be exclusive of any other rights which such person may
have or hereafter acquire under any statute, provision of the Certificate of
Incorporation, these By-laws, agreement, vote of stockholders or disinterested
directors or otherwise.
Section 6.5 Other Indemnification. The Corporation's obligation, if any, to
---------------------
indemnify any person who was or is serving at its request as a director,
officer, employee, partner or agent of another corporation, partnership, joint
venture or other enterprise shall be reduced by any amount such person may
collect as indemnification from such other corporation, partnership, joint
venture or other enterprise.
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Section 6.6 Amendment or Repeal. Any repeal or modification of the foregoing
-------------------
provisions of this Article VI shall not adversely affect any right or protection
hereunder of any person in respect of any act or omission occurring prior to the
time of such repeal or modification.
ARTICLE VII
General
Section 7.1 Fiscal Year. The fiscal year of the Corporation shall begin on
-----------
the first Monday after the last Sunday in December of each year and end on the
last Sunday in the following December.
Section 7.2 Seal. The corporate seal shall have the name of the Corporation
----
inscribed thereon and shall be in such form as may be approved from time to time
by the Board of Directors.
Section 7.3 Form of Records. Any records maintained by the Corporation in
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the regular course of its business, including its stock ledger, books of
account, and minute books, may be kept on, or be in the form of, punch cards,
magnetic tape, photographs, microphotographs, or any other information storage
device, provided that the records so kept can be converted into clearly legible
form within a reasonable time. The Corporation shall so convert any records so
kept upon the request of any person entitled to inspect the same.
Section 7.4 Amendment of By-laws. These By-laws may be altered or repealed,
--------------------
and new By-laws made, by the Board of Directors, but the stockholders may make
additional By-laws and may alter and repeal any By-laws whether adopted by them
or otherwise.
Section 7.5 Conflicts. In the event of a conflict between any provision of
---------
these By-laws the provisions of the Amended and Restated Stockholders' Agreement
of even date herewith, the provisions of the Amended and Restated Stockholders'
Agreement shall govern.
* * * * * * * * *
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