<PAGE>
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
FILED BY THE REGISTRANT [x]
FILED BY A PARTY OTHER THAN THE REGISTRANT [ ]
CHECK THE APPROPRIATE BOX:
[x] PRELIMINARY PROXY STATEMENT
[ ] DEFINITIVE PROXY STATEMENT
[ ] DEFINITIVE ADDITIONAL MATERIALS
[ ] SOLICITING MATERIAL PURSUANT TO RULE 14a-11(c) OR RULE 14a-12
WITCO CORPORATION
- --------------------------------------------------------------------------------
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
WITCO CORPORATION
- --------------------------------------------------------------------------------
(NAME OF PERSON(S) FILING PROXY STATEMENT)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX);
[x] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(4) and 0-11.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
(1) Title of each class of securities to which transaction applies:
--
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
--
- --------------------------------------------------------------------------------
(3) Per unit price or other-underlying value of transaction computed
pursuant to Exchange Act Rule 0-11.(1)
--
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
--
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount previously paid: --
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.: --
(3) Filing party: --
- --------------------------------------------------------------------------------
<PAGE>
(4) Date Filed: March 3, 1994
- --------------------------------------------------------------------------------
- ------------
(1) Set forth the amount on which the filing fee is calculated and state how it
was determined.
<PAGE>
[LOGO]
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 27, 1994
To our Shareholders:
The Annual Meeting of Shareholders of WITCO CORPORATION (the 'Company')
will be held at The Chase Manhattan Bank, N.A., 410 Park Avenue, 5th Floor, New
York, New York, on Wednesday, April 27, 1994, at 2:00 p.m., for the following
purposes:
1. To elect four directors, each of whom will serve until the Annual
Meeting of Shareholders to be held in 1997 or until their
respective successors are elected and qualify.
2. To approve a proposed amendment to the present Restated Certificate
of Incorporation to authorize indemnification of directors and
officers to the fullest extent permitted by applicable law.
3. To approve a form of indemnification agreement between the Company
and its directors and officers.
4. To approve a proposed amendment and restatement in full of the
Company's present Restated Certificate of Incorporation (with
certain amendments not included in Proposal No. 2).
5. To ratify the appointment of Ernst & Young as the Company's
independent auditors for 1994.
6. To transact such other business as may properly come before the
meeting.
Only shareholders of record on the books of the Company at the close of
business on March 10, 1994 will be entitled to vote at the meeting or any
adjournment thereof.
In order that your shares of stock may be represented at the Annual
Meeting, please date and sign the enclosed proxy card and return it promptly in
the enclosed envelope. If you attend the Annual Meeting, you may vote in person
even though you have previously sent in your proxy card.
A copy of the Company's Annual Report for the year 1993 is enclosed.
By order of the Board of Directors,
Dustan E. McCoy
Vice President,
General Counsel
and Corporate Secretary
New York, New York
March 28, 1994
YOUR VOTE IS IMPORTANT
PLEASE COMPLETE, DATE AND SIGN YOUR PROXY CARD AND
PROMPTLY RETURN IT IN THE ENCLOSED ENVELOPE.
<PAGE>
[LOGO]
WITCO CORPORATION
520 MADISON AVENUE, NEW YORK, N.Y. 10022-4236
------------------------
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 27, 1994
------------------------
This Proxy Statement is furnished to the shareholders of Witco Corporation
(the 'Company') in connection with the solicitation on behalf of the Board of
Directors of proxies to be used at the Annual Meeting of Shareholders to be held
on April 27, 1994 and at any adjournment thereof. This Proxy Statement, with the
accompanying proxy and the Annual Report for 1993, is being mailed to
shareholders on or about March 28, 1994.
TO ASSURE ADEQUATE REPRESENTATION AT THE ANNUAL MEETING, SHAREHOLDERS ARE
REQUESTED TO COMPLETE, SIGN AND RETURN THE ENCLOSED PROXY CARD PROMPTLY IN THE
ENCLOSED POSTAGE PAID ENVELOPE. Only shareholders of record at the close of
business on March 10, 1994 will be entitled to vote at the meeting.
Each share of Common Stock (par value $5 per share) and each share of $2.65
Cumulative Convertible Preferred Stock (par value $1 per share) outstanding at
the close of business on March 10, 1994 will be entitled to one vote at the
meeting and will vote together as one class for all of the stated purposes of
the meeting. As of March 10, 1994, there were outstanding and entitled to vote
at the meeting shares of Common Stock and shares of Preferred
Stock.
Shares of Common Stock held by the trustee under the Witco Corporation
Thrift Savings Plan's Company Stock Fund will be voted by the trustee in
accordance with instructions received from the participants, and if no
instructions are received, such shares will be voted in the same proportion as
shares for which instructions are received from other participants in the plan.
The proxy will be voted in accordance with the instructions of the person
executing the same. In the absence of instructions to the contrary, proxies will
be voted FOR the election of the four nominees for director named herein; FOR
approval of the amendment to the Company's Certificate of Incorporation to
authorize greater indemnification of the Company's directors and officers; FOR
approval of the form of indemnification agreement between the Company and its
directors and officers; FOR approval of the amendment and restatement of the
Company's Certificate of Incorporation; and FOR ratification of the appointment
of Ernst & Young as the Company's independent auditors for 1994.
The proxy is revocable by a shareholder at any time before the exercise
thereof, and the giving of such proxy will not affect the shareholder's right to
vote in person if it is later found to be convenient to attend the meeting.
Abstentions and broker non-votes are each included in the determination of the
number of shares present and voting for the purposes of determining whether a
quorum is present, and each is tabulated separately. In determining whether a
proposal has been approved, abstentions and broker non-votes are not counted as
votes for or against a proposal.
The entire cost of this solicitation will be borne by the Company,
including reimbursement of banks, brokerage firms, custodians, nominees and
fiduciaries for their reasonable expenses in sending proxy materials to the
beneficial owners of stock. Proxies may be solicited personally, by mail, by
telephone or by telegraph, by the directors, officers or other employees of the
Company, without
1
<PAGE>
remuneration other than regular compensation. In addition, the Company has
retained Georgeson & Company Inc. to assist in the solicitation of proxies at a
fee estimated to be $7,000.
At the date of this Proxy Statement, management does not know of any matter
to be brought before the meeting for action other than the matters described in
the Notice of Annual Meeting and matters incident thereto. If any other matters
should come before the meeting, the holders of the proxies will vote and act
with respect to such matters in accordance with their best judgment.
Discretionary authority to do so is conferred by the enclosed proxy.
PROPOSAL 1
ELECTION OF DIRECTORS
The Company has a classified Board of Directors who serve staggered
three-year terms. One class of directors is elected at each Annual Meeting of
Shareholders. At the 1994 Annual Meeting, four nominees will be elected to hold
office until the Annual Meeting of Shareholders to be held in 1997 or until
their successors are elected and qualify.
Unless otherwise specified, the proxies received will be voted FOR the
election of the listed nominees.
The nominees for director, their present principal occupation or employment
as of February 28, 1994, and other positions held during the past five years are
set forth below.
NOMINEES FOR ELECTION AS DIRECTORS SERVING UNTIL THE 1997 ANNUAL MEETING
- --------------------------------------------------------------------------------
[Photograph of Mr. Brinberg is Senior Vice President of BRT
Simeon Brinberg] Realty Trust, Senior Vice President of Georgetown
Partners, Inc. and Vice President of One Liberty
Properties, Inc. He was Counsel to Bachner, Tally,
Polevoy & Misher, independent counsel to Witco,
prior to November 1990. Mr. Brinberg is a member
of Witco's Audit, Nominating and Pension
Committees.
Age 60
SIMEON BRINBERG
Director since 1987
- --------------------------------------------------------------------------------
2
<PAGE>
- --------------------------------------------------------------------------------
[Photograph of Mr. Grant is Chairman of Galen Associates, a
William R. Grant] health care venture firm, and a General Partner of
Galen Partners L.P. Prior to May 1989, he was
Chairman of the Board of New York Life
International Investment Inc., New York, N.Y., an
investment counseling firm (a subsidiary of New
York Life Insurance Co.). He is a Director of
SmithKline Beecham p.l.c., Fluor Corporation, New
York Life Insurance Company, Allergan, Inc. and
Seagull Energy Corp. Mr. Grant is Chairman of
Witco's Organization and Compensation Committee
and a member of the Executive and Nominating
Committees.
Age 69
WILLIAM R. GRANT
Director since 1970
- --------------------------------------------------------------------------------
[Photograph of Mr. Hayden is a Partner of Goldman, Sachs & Co.,
Richard M. Hayden] Investment Bankers, New York, N.Y. He is a member
of Witco's Audit, Finance and Nominating
Committees.
Age 48
RICHARD M. HAYDEN
Director since 1992
- --------------------------------------------------------------------------------
<PAGE>
[Photograph of Mr. Toller is Chairman of the Board and Chief
William R. Toller] Executive Officer, Witco. He was Vice Chairman and
Chief Financial Officer from March 1990 through
September 1990 when he assumed his current
position. Prior to March 1990, Mr. Toller was
Executive Vice President -- Finance and
Administration. He is Chairman of Witco's
Nominating Committee and a member of the Executive
Committee.
Age 63
WILLIAM R. TOLLER
Director since 1987
- --------------------------------------------------------------------------------
3
<PAGE>
DIRECTORS SERVING UNTIL THE 1995 ANNUAL MEETING
- --------------------------------------------------------------------------------
[Photograph of Mr. Ashe is a business consultant. He is a member
William J. Ashe] of Witco's Executive, Finance and Organization and
Compensation Committees.
Age 73
WILLIAM J. ASHE
Director since 1969
- --------------------------------------------------------------------------------
[Photograph of Mr. Burns was Chief Executive Officer of Galen
William G. Burns] Associates and a General Partner of Galen Partners
L.P. from March 1990 to December 1990. Prior to
his retirement in May 1989, he was Vice Chairman
of NYNEX Corporation. He is a Director of New York
Life Insurance Company and Pierpont Funds. He is a
member of Witco's Audit and Organization and
Compensation Committees.
Age 61
WILLIAM G. BURNS
Director since 1986
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
[Photograph of Mr. Mahoney is Vice Chairman and Chief Operating
William E. Mahoney] Officer -- Chemicals, Witco. He was Executive Vice
President -- Chemical Group from June 1989 to
September 1992. Prior to June 1989, he was Group
Vice President -- Chemical Group. He is a member
of Witco's Executive and Pension Committees.
Age 62
WILLIAM E. MAHONEY
Director since 1989
- --------------------------------------------------------------------------------
4
<PAGE>
- --------------------------------------------------------------------------------
[Photograph of Mr. Polite is Chairman and Director of Rotonics
L. John Polite, Jr.] Manufacturing, Inc. (formerly Koala Technologies,
Inc.) in Gardena, CA. Prior to his retirement in
December 1992, he was Chairman of Peridot
Chemicals (New Jersey), Inc. in Clifton, N.J. Mr.
Polite was a business consultant from October 1988
to December 1989. Prior to October 1988, he was
Chairman, President and Chief Executive Officer of
Essex Chemical Corporation in Clifton, N.J. He is
a Director of Peridot Chemicals (New Jersey), Inc.
and Jones Medical Industries, Inc. Mr. Polite is a
member of Witco's Finance and Pension
Committees.
Age 72
L. JOHN POLITE, JR.
Director since 1989
- --------------------------------------------------------------------------------
[Photograph of Mr. Wishnick is a business consultant. He was
William Wishnick] elected Chairman of the Board of Witco in 1964 and
assumed the additional responsibility of Chief
Executive Officer in 1971. He held these positions
until October 1990. Mr. Wishnick is a member of
Witco's Executive, Finance and Pension
Committees.
Age 69
WILLIAM WISHNICK
Director since 1949
- --------------------------------------------------------------------------------
DIRECTORS SERVING UNTIL THE 1996 ANNUAL MEETING:
- --------------------------------------------------------------------------------
[Photograph of Mr. Andreuzzi is Vice Chairman and Chief Operating
Denis Andreuzzi] Officer -- Petroleum, Witco. He was President and
Chief Operating Officer from March 1990 to
September 1992. He was Executive Vice
President -- Petroleum Group from July 1989 to
February 1990. Prior to July 1989, Mr. Andreuzzi
was Executive Vice President -- Commercial
Services. Mr. Andreuzzi is Chairman of Witco's
Executive Committee.
Age 62
DENIS ANDREUZZI
Director since 1984
- --------------------------------------------------------------------------------
5
<PAGE>
- --------------------------------------------------------------------------------
[Photograph of Mr. Hohn is Chairman of the Board and Chief
Harry G. Hohn] Executive Officer of New York Life Insurance
Company, New York, N.Y. Prior to August 1990, he
was Vice Chairman of New York Life Insurance
Company. He is Chairman of Witco's Pension
Committee and a member of the Organization and
Compensation Committee.
Age 61
HARRY G. HOHN
Director since 1989
- --------------------------------------------------------------------------------
[Photograph of Mr. Samuel is a business consultant. Prior to his
Dan J. Samuel] retirement, Mr. Samuel was for many years a senior
executive of the Royal Dutch/Shell Group of
Companies. He is a member of Witco's Audit,
Executive and Organization and Compensation
Committees.
Age 68
DAN J. SAMUEL
Director since 1985
- --------------------------------------------------------------------------------
[Photograph of Mr. Wesson is President of Galen Associates, a
Bruce F. Wesson] health care venture firm, and a General Partner of
Galen Partners L.P. Prior to January 1991, he was
Senior Vice President and Managing Director of
Smith Barney, Harris Upham & Co. Incorporated,
Investment Bankers, New York, N.Y. (a subsidiary
of Primerica Corporation). He is a Director of
Cryolife, Inc. Mr. Wesson is Chairman of Witco's
Finance Committee and a member of the Pension
Committee.
Age 51
BRUCE F. WESSON
Director since 1980
- --------------------------------------------------------------------------------
6
<PAGE>
Henry Sonneborn, a long-time Witco director of 34 years, has reached the
Board's retirement age and will not stand for re-election at the 1994 Annual
Meeting of Shareholders. Mr. Sonneborn was Vice Chairman of the Company at the
time of his retirement in 1983. He diligently and conscientiously served in
various capacities during his 42 year career with Witco. Mr. Sonneborn has also
served on various committees of the Board during his many years as a director
and most recently was Chairman of Witco's Audit Committee and a member of the
Executive and Finance Committees. His experience, advice and guidance have
significantly contributed to the Company's continued growth and success.
OWNERSHIP OF SECURITIES BY DIRECTORS AND OFFICERS
As of February 28, 1994, the directors of the Company and each executive
officer named in the Summary Compensation Table, individually, and all directors
and executive officers of the Company as a group beneficially owned shares of
Common Stock of the Company as follows:
<TABLE>
<CAPTION>
AMOUNT OF BENEFICIAL OWNERSHIP
----------------------------------------
NAME OF DIRECT &
BENEFICIAL INDIRECT EXERCISABLE PERCENT OF
OWNER OWNERSHIP OPTIONS(a) CLASS(b)
- -------------------------------------------------------------------------- --------- ----------- ------------
<S> <C> <C> <C>
Denis Andreuzzi........................................................... 30,016 28,500 less than 1%
William J. Ashe........................................................... 62,972 -- less than 1%
Simeon Brinberg........................................................... 2,200 -- less than 1%
William G. Burns.......................................................... 2,000 -- less than 1%
Seymour Cohen............................................................. 32,751 12,720 less than 1%
Michael D. Fullwood....................................................... 3,441 23,760 less than 1%
William R. Grant.......................................................... 3,374 -- less than 1%
Richard M. Hayden......................................................... 2,000 -- less than 1%
Harry G. Hohn............................................................. 200 -- less than 1%
William E. Mahoney........................................................ 15,141 39,164 less than 1%
L. John Polite, Jr........................................................ 9,000 -- less than 1%
Dan J. Samuel............................................................. 2,200 -- less than 1%
Henry Sonneborn III....................................................... 128,222(c) -- less than 1%
William R. Toller......................................................... 42,934 35,520 less than 1%
Bruce F. Wesson........................................................... 1,500 -- less than 1%
William Wishnick.......................................................... 317,890 -- less than 1%
All directors and executive officers as a group
(a total of 33 individuals including those named above)................. 875,068 291,528 2.3%
</TABLE>
- ------------
The information provided in the above chart as to each director and named
executive officer, individually, and all directors and executive officers as a
group is based on information received from such individuals. However, the
listing of such shares is not necessarily an admission of beneficial ownership
by the person. Unless otherwise indicated in the footnotes below, such
individuals held, together with certain members of their family, sole voting and
investment power over the shares.
(a) Represents options exercisable within 60 days granted under the 1989 and
1992 Stock Option Plans to such persons. The options are exercisable at
prices ranging from $17.3125 to $26.5625. The closing price for Witco
Common Stock on the New York Stock Exchange on February 28, 1994 was
$33.875 per share.
(b) The number of shares of Common Stock outstanding on February 28, 1994 was
50,519,019.
7
<PAGE>
(c) Does not include 13,060 shares owned by a charitable foundation of which
Mr. Sonneborn and his wife are co-trustees and, as co-trustees, share
voting and investment power with three other trustees. Mr. Sonneborn
disclaims beneficial ownership of the Witco shares held by this foundation.
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers to file initial reports of ownership and
reports of changes in ownership of any class of the Company's securities with
the Securities and Exchange Commission. Directors and executive officers are
required to furnish the Company with copies of all Section 16(a) forms that they
file. To the Company's knowledge, based solely on a review of the copies of such
reports furnished to the Company and representations that no other reports were
required, all Section 16(a) filing requirements applicable to its directors and
officers were complied with.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Set forth below is a table indicating those persons whom the management of
the Company believes to be beneficial owners of more than 5% of any class of the
Company's securities as of February 28, 1994. The following information is based
on reports filed with the Company and the Securities and Exchange Commission as
of December 31, 1993 in accordance with Section 13(g) of the Securities Exchange
Act of 1934.
<TABLE>
<CAPTION>
NAME AND ADDRESS SHARES PERCENT
OF BENEFICIAL OWNER BENEFICIALLY OWNED OF CLASS
- -------------------------------------------------------------- ------------------ --------
<S> <C> <C>
Delaware Management Company, Inc. ............................ 4,457,360(1) 8.83%
10 Penn Center Plaza
Philadelphia, PA 19103
Putnam Investments, Inc. ..................................... 2,906,321(2) 5.80%
One Post Office Square
Boston, MA 02109
Wellington Management Company ................................ 2,882,049(3) 5.70%
75 State Street
Boston, MA 02109
</TABLE>
- ------------
(1) Delaware Management Company, Inc. has advised that with respect to such
shares they have (i) sole voting power for 3,472,800 shares and shared
voting power for 53,200 shares and (ii) sole dispositive power for 4,457,360
shares.
(2) Putnam Investments, Inc. has advised that with respect to such shares they
have (i) shared voting power for 53,100 shares and (ii) shared dispositive
power for 2,906,321 shares.
(3) Wellington Management Company has advised that with respect to such shares
they have (i) shared voting power for 538,060 shares and (ii) shared
dispositive power for 2,882,049 shares.
To the best of the Company's knowledge, as of February 28, 1994, no other
person owned more than 5% of the outstanding voting securities of the Company.
8
<PAGE>
OTHER TRANSACTIONS
Mr. Hohn is Chairman of the Board and Chief Executive Officer and Messrs.
Burns and Grant are Directors of New York Life Insurance Company. This firm has
issued guaranteed investment contracts for Witco's Thrift Savings Plan for many
years and is expected to provide similar services during 1994.
Mr. Hayden is a Partner of Goldman, Sachs & Co., Investment Bankers. This
firm has provided investment banking services to the Company for many years and
is expected to continue to provide such services during 1994.
BOARD OF DIRECTORS -- MEETINGS HELD AND COMMITTEES
The Board of Directors held 8 meetings during 1993. Each director attended
75% or more of the meetings of the Board of Directors and Committees of which he
was a member.
The Board of Directors has the following standing committees:
Executive Committee. The Executive Committee has been, and from time to
time is, delegated authority by the Board to exercise the powers of the Board in
matters pertaining to the management of the business (7 meetings during 1993).
Audit Committee. The functions of the Audit Committee include (a)
recommendation to the full Board as to engagement of the Company's independent
auditors, (b) review with the independent auditors the plan and results of the
audit engagement, (c) review the scope and results of the Company's internal
audit procedures, (d) review the independence of the independent auditors, (e)
review the adequacy of the Company's system of internal accounting controls, (f)
review or participate in reviews of matters relating to audit, accounting and
financial statements, (g) review proposed audit fees and other fees of the
independent auditors and (h) review non-audit services performed by the
independent auditors (4 meetings during 1993).
Finance Committee. The functions of the Finance Committee include (a)
recommendation to the Executive Committee or the full Board of proposed
financing or additional equity requirements, (b) review of proposed corporate
forecasts and financial needs, (c) adoption of investment policies for corporate
funds and (d) such other matters affecting the financial well-being of the
Company as the Committee may determine to be appropriate (4 meetings during
1993).
Nominating Committee. The Nominating Committee is responsible for (a)
review of qualifications and recommendations for replacement and/or additional
nominees to the Board of Directors, (b) review and recommendation with regard to
the amount of compensation to be paid to non-employee members of the Board,
including compensation for committee memberships, meeting fees or such other
compensation as may be deemed appropriate, (c) recommendation of policies
regarding directors to the Board and (d) such other duties and responsibilities
as may be delegated to the Nominating Committee by the Board of Directors (1
meeting during 1993).
Organization and Compensation Committee. The functions of the Organization
and Compensation Committee include (a) recommending approval to the full Board
of the remuneration arrangements for employee directors and officers, (b)
recommending the adoption of compensation and benefit plans applicable to
employee directors and officers, (c) the plenary authority in its discretion to
determine the purchase price of the Common Stock issuable upon the exercise of
each option, to determine the employees to whom, and the time or times at which
options shall be granted and the number of shares to be issuable upon the
exercise of each option, to interpret the plans, to prescribe, amend and rescind
rules and provisions relating to plans, to determine the terms and provisions of
9
<PAGE>
the respective option agreements and to make all other determinations deemed
necessary or advisable for the administration of the option plans, (d) reviews
with the Chief Executive Officer of the management and corporate organization
structures, management organization succession plans, performance of officers
and overall compensation policy of the Corporation, (e) reviews and approves for
submission to the Board of Directors election of officers and (f) jointly
reviews with Nominating Committee recommendation for employee members of the
Board of Directors prior to submission to the Board (4 meetings during 1993).
Pension Committee. The Pension Committee is responsible for (a) review of
the pension actuarial reports, (b) review of pension fund performance and (c)
establishment of fund investment policies. In addition, it recommends to the
Executive Committee or the full Board changes in plan benefits, trustees or fund
managers and recommends annual fund contributions to the plans (4 meetings
during 1993).
COMPENSATION OF DIRECTORS
Non-employee directors are paid an annual retainer of $21,000, an
attendance fee of $700 per Board meeting, and reimbursement of travel expenses.
Non-employee directors, who are members of Committees of the Board, receive
additional annual retainers as follows: Executive -- $4,000; Audit -- $3,000;
Finance -- $2,500; Nominating -- $2,500; Organization and
Compensation -- $2,500; and Pension --
$2,500. Any director entitled to receive annual retainers and attendance fees
may elect to defer payment of all or any part of such compensation pursuant to
the Company's Deferred Directors' Fees Plan until, generally, after the
termination of the directors' relationship with the Company or in the event of
death, in which case such deferred compensation will be paid to a beneficiary as
designated.
The Company retained Mr. Wishnick, upon his retirement as Chairman of the
Board and Chief Executive Officer, as an independent consultant for the period
February 1, 1991 through January 31, 1993 at an annual retainer of $100,000. On
October 22, 1992, the Company extended the consultancy agreement with Mr.
Wishnick for the period February 1, 1993 through January 31, 1995 at an annual
retainer of $110,000. Thereafter, the agreement will be automatically extended
for additional terms of one (1) year each unless either party gives ninety (90)
days written notice of its intention not to continue such agreement. In
addition, the Company makes office space and a part-time secretary available for
use by Mr. Wishnick.
EXECUTIVE COMPENSATION
Cash Compensation
The following table shows cash compensation paid, and certain other
compensation paid or accrued for, by the Company during the years ended December
31, 1993, 1992 and 1991, to each of the Company's five most highly compensated
executive officers, including the Chief Executive Officer, in all capacities in
which they served. All individuals included in the table were executive officers
of the Company as of December 31, 1993 and at all times during the periods
shown.
10
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
AWARDS
------------
ANNUAL COMPENSATION SECURITIES
--------------------- UNDERLYING
NAME AND SALARY OPTIONS/ ALL OTHER
PRINCIPAL POSITION YEAR ($) BONUS ($) SAR'S (#)(1) COMPENSATION ($)(2)
- --------------------------------------------------- ---- --------- --------- ------------ -------------------
<S> <C> <C> <C> <C> <C>
William R. Toller 1993 $ 545,000 $ 364,100 97,600 $14,643
Chairman and Chief 1992 498,877 210,000 97,400 17,440
Executive Officer 1991 448,990 331,600 -- 20,125
Denis Andreuzzi 1993 $ 422,300 $ 195,900 62,500 $ 9,015
Vice Chairman and Chief 1992 410,000 130,600 73,200 8,806
Operating Officer -- Petroleum 1991 380,000 246,000 -- 8,607
William E. Mahoney 1993 $ 400,000 $ 204,200 62,500 $12,897
Vice Chairman and Chief 1992 311,250 117,200 42,200 10,682
Operating Officer -- Chemicals 1991 270,000 136,800 -- 10,902
Michael D. Fullwood 1993 $ 275,000 $ 137,800 32,200 $ 7,075
Executive Vice President and 1992 215,000 81,300 22,600 6,450
Chief Financial Officer 1991 172,000 95,100 -- 5,160
Seymour Cohen 1993 $ 226,000 $ 86,800 21,600 $ 6,780
Group Vice President -- 1992 200,000 67,600 22,400 6,000
Chemical Segment 1991 187,000 85,100 -- 5,610
</TABLE>
- ------------
(1) The stock options granted during 1993 and 1992 were granted pursuant to the
1992 Stock Option Plan which does not provide for tandem or stand alone
stock appreciation rights (SAR's). All options have been adjusted to give
effect to the 2-for-1 stock split effective October 5, 1993.
13
<PAGE>
(2) All Other Compensation includes: (i) the Company's contribution on behalf of
the respective executive officer pursuant to the terms of the Company's
Thrift Savings Plan ('Thrift'); (ii) amounts related to the difference
between the statutory value of Group-term Life Insurance ('GLI') coverage,
as determined pursuant to the Internal Revenue Code and Regulations, and the
actual cost of coverage paid for by the employee; and (iii) Mortgage
Interest Differential ('MID') for employees that have relocated at the
Company's request. Such employees are compensated for the difference in
mortgage interest between the old and new mortgage during the first five
years after relocation starting at 100% in the first year and decreasing by
20% in each of the succeeding years. The table below sets forth the
components of All Other Compensation for the above named executive officers:
<TABLE>
<CAPTION>
WILLIAM R. TOLLER DENIS ANDREUZZI WILLIAM E. MAHONEY
----------------------------- ----------------------------- -----------------------------
YEAR THRIFT GLI MID THRIFT GLI MID THRIFT GLI MID
- ----- ------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1993 $7,075 $7,568 -- $7,075 $1,940 -- $7,004 $5,893 --
1992 6,866 7,501 $3,073 6,866 1,940 -- 6,866 3,816 --
1991 6,667 6,697 6,761 6,667 1,940 -- 6,667 1,230 $3,005
<CAPTION>
MICHAEL D. FULLWOOD SEYMOUR COHEN
---------------------------- -----------------------------
YEAR THRIFT GLI MID THRIFT GLI MID
- ----- ------ ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
1993 $7,075 -- -- $6,780 -- --
1992 6,450 -- -- 6,000 -- --
1991 5,160 -- -- 5,610 -- --
</TABLE>
Stock Option Grants
The following table provides certain information concerning the grant of
options during the year ended December 31, 1993 to the executive officers named
11
<PAGE>
in the Summary Compensation Table. In addition, hypothetical gains or spreads,
calculated based on assumed rates of annually compounded stock price
appreciation of 5% and 10% over the term of the option, have been included in
the table.
OPTION GRANTS DURING THE YEAR ENDED DECEMBER 31, 1993
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS (1)(2)
--------------------------------------------------- POTENTIAL REALIZABLE VALUE AT
NUMBER OF % OF TOTAL ASSUMED ANNUAL RATES
SECURITIES OPTIONS OF STOCK PRICE APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OR OPTION TERM
OPTIONS EMPLOYEES BASE PRICE EXPIRATION ----------------------------------
NAME GRANTED (#) IN FISCAL YEAR ($/SHARE) (3) DATE 5% 10%
- ----------------------- ----------- -------------- ------------- ---------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
William R. Toller...... 97,600 14.09% $ 26.5625 6/9/03 $ 1,630,409 $ 4,131,777
Denis Andreuzzi........ 62,500 9.02% $ 26.5625 6/9/03 $ 1,044,063 $ 2,645,862
William E. Mahoney..... 62,500 9.02% $ 26.5625 6/9/03 $ 1,044,063 $ 2,645,862
Michael D. Fullwood.... 32,200 4.65% $ 26.5625 6/9/03 $ 537,901 $ 1,363,148
Seymour Cohen.......... 21,600 3.12% $ 26.5625 6/9/03 $ 360,828 $ 914,410
</TABLE>
- ------------
(1) Each option was granted on June 9, 1993 to purchase shares of the Company's
$5.00 par value Common Stock. The exercise price represents the fair market
value of the Company's Common Stock on the date of grant. Option amounts and
prices have been adjusted to reflect the 2-for-1 stock split effective
October 5, 1993. Twenty percent of the shares subject to the options become
exercisable one year from the date of grant and 20% become exercisable on
each of the four succeeding anniversaries, provided the optionee continues
to be employed by the Company or any of its subsidiaries. Only those options
exercisable as of the date of the optionee's termination may be exercised
during the 90 day period following such termination date; however, upon
termination by (i) early or normal retirement, (ii) death or (iii)
disability any option not then exercisable shall become immediately
exercisable and shall be exercisable during the three year period following
such termination; provided that in no event shall options be exercisable
after the expiration of 10 years
from the date of grant. The actual value an optionee receives is dependent
on future stock market conditions and there can be no assurance that the
amounts reflected in the right hand columns of the table will actually be
realized. No gain to the optionee is possible without an appreciation in
stock value which will benefit all shareholders commensurately.
(2) The options were granted pursuant to the 1992 Stock Option Plan which does
not provide for tandem or stand alone stock appreciation rights.
(3) Payment for shares of Common Stock of the Company upon exercise of a stock
option may be made in cash, or in such other form of consideration, as
deemed appropriate by the Committee (including cashless exercise
procedures), or shares of Common Stock, or a combination of cash and shares
of Common Stock.
Stock Option Exercises
The following table provides information regarding stock option exercises
by the named executive officers during the year ended December 31, 1993,
including the aggregate value realized on the date of exercise. In addition,
unexercised stock options (both exercisable and unexercisable) as of December
31, 1993, as well as the value of in-the-money unexercised options (i.e. options
which had a positive spread between the exercise price and the fair market value
of the Company's Common Stock as of December 31, 1993) have been included in the
table. All unexercised options included in the table were in-the-money as of
December 31, 1993. Option amounts have been adjusted to reflect the 2-for-1
stock split effective October 5, 1993. The closing price of the Company's Common
Stock on the New York Stock Exchange on December 31, 1993 was $31.875.
12
<PAGE>
AGGREGATED OPTION EXERCISES IN THE YEAR ENDED DECEMBER 31, 1993
AND YEAR-END OPTION VALUES
YEAR-END VALUE -- $31.875
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
SHARES UNDERLYING UNEXERCISED OPTIONS VALUE OF UNEXERCISED IN-THE-
ACQUIRED ON AT YEAR-END (#) MONEY OPTIONS AT YEAR-END
EXERCISE VALUE ------------------------------ ------------------------------
NAME (#) REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------------------- ----------- --------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
William R. Toller.................... 35,480 $ 344,538 -0- 191,520 -0- $ 1,569,660
Denis Andreuzzi...................... 30,640 $ 284,250 -0- 137,060 -0- $ 1,179,911
William E. Mahoney................... 5,776 $ 75,810 14,664 108,260 $ 179,257 $ 861,261
Michael D. Fullwood.................. 11,400 $ 91,812 10,920 56,680 $ 140,660 $ 454,103
Seymour Cohen........................ 12,880 $ 102,760 -0- 47,920 -0- $ 425,235
</TABLE>
Certain Benefit Plans
Defined Benefit Pension Plan
The Company currently has a qualified, non-contributory defined benefit
plan, the Witco Corporation Retirement Plan, which covers executive officers and
non-bargaining employees. Contributions to the pension plan in respect of any
person are not and cannot be separately or individually calculated. The
aggregate contribution to the plan is approximately 3.26% of the total
remuneration of plan participants covered by such plan. The remuneration covered
by the plan represents the base salary plus commissions. Effective January 1,
1994, the plan was amended to change the pension formula.
Under the pension plan, a normal retirement benefit is based on (a) 1.5% of
the individual's final average earnings (average base salary for the five years
preceding retirement using 1992 base salary for years prior to 1992) multiplied
by years of credited service, reduced by (b) 1.5% of the individual's Social
Security benefit at retirement multiplied by years of credited service (to a
maximum of 50% of the Social Security benefit). Pension benefits will not be
less than the amount accrued as of December 31, 1993 under the pre-amended plan.
The following table sets forth estimated annual retirement benefits, on a
straight life annuity basis for the executive officers named in the Summary
Compensation Table upon retirement at age 65, assuming 1993 remuneration
continues unchanged and based on the provisions of the pension plan in effect as
of December 31, 1993:
<TABLE>
<CAPTION>
ESTIMATED ANNUAL
RETIREMENT
BENEFIT
-----------------
<S> <C>
William R. Toller................................................... $ 109,670
Denis Andreuzzi..................................................... $ 198,046
William E. Mahoney.................................................. $ 98,461
Michael D. Fullwood................................................. $ 100,902
Seymour Cohen....................................................... $ 93,005
</TABLE>
The maximum annual benefit which may be paid to any individual from the
plan's trust fund is limited by the Internal Revenue Code of 1986, as amended
(the 'Code'). The Code also limits the amount of compensation that can be used
13
<PAGE>
to determine this annual benefit. To the extent that the amount determined under
the pension formula exceeds these limitations, any excess will be paid by the
Company through the Excess Benefit and Compensation Cap Plan of Witco
Corporation ('Excess Plan'). For 1994 the annual benefit limit payable under the
plans' trust is $118,800. The compensation limit for 1994 is $150,000.
Supplemental Executive Retirement Plan
The Company has a Supplemental Executive Retirement Plan and participants
in the plan are or have been corporate officers selected by the Board of
Directors. The Supplemental Plan supplements coverage under the Company's
pension plan and provides a participant or his named beneficiary, who retires at
or after age 65, with 50% of his average base salary plus bonuses (averaged over
three years preceding retirement) less amounts paid under the pension plan, the
Excess Plan and 50% of Social Security benefit.
In the event of death, the Company will pay a benefit to the executive's
beneficiary.
In the event of the actual or constructive termination of employment of a
participant within three years after a change in control, as defined in the
Supplemental Plan, he will be entitled to a lump-sum payable in cash equal to
three times his average total pay (averaged over five years) less $1.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the fiscal year ended December 31, 1993, the Organization and
Compensation Committee (the 'Committee') was composed of Messrs. Ashe, Burns,
Grant, Hohn and Samuel. All members of the Committee participated in decisions
related to compensation of the Company's executive officers.
Prior to his retirement in May 1986, Mr. Ashe was President and Chief
Operating Officer of the Company.
Mr. Hohn is Chairman of the Board and Chief Executive Officer of New York
Life Insurance Company. This firm has provided services to the Company for many
years and may provide services during 1994.
No executive officer of the Company served as a director or member of a
compensation committee of another entity, one of whose executive officers served
as a director or on the Committee of the Company.
REPORT OF THE ORGANIZATION AND COMPENSATION COMMITTEE
This report describes the role of the Organization and Compensation
Committee and provides an overview of the Company's executive compensation
philosophy. The report also describes how the executive compensation program was
administered in 1993 with specific emphasis on the Committee's decisions
affecting the compensation of the chief executive officer.
THE COMMITTEE'S ROLE
The Committee reviews and approves each element of the Company's executive
compensation program and periodically assesses the effectiveness of the program
as a whole. This program covers the chief executive officer, the four other
named executive officers, and all other executive officers of the Company.
Specifically, the Committee approves the salaries of all executive officers,
cash awards under the Company's Officers' Annual Incentive Program, the grant of
14
<PAGE>
stock options under the Stock Option Plan, and the provision of any special
benefits or perquisites, which in keeping with longstanding company policy, are
limited to the use of company cars and certain directly related expenses, to
executive officers. In addition to approving salaries and grants for individual
executive officers, the Committee also reviews the aggregate expenditure of
funds for cash incentives, the aggregate allocation of shares for proposed Stock
Option Plans, and the ongoing operation of the executive compensation program
described above.
To carry out its responsibilities, the Committee's five non-employee
directors met 4 times during 1993. Activities of the Committee included the
review of the Company's various incentive programs and assessment of the
competitiveness of the overall compensation program.
OBJECTIVES OF THE EXECUTIVE COMPENSATION PROGRAM
The two principal objectives of the Company's executive compensation
program are to:
-- Provide competitive total compensation opportunities that will
serve to attract, retain and motivate talented executives who can
achieve the long-term financial and strategic goals of the Company
and produce increased value for shareholders.
-- Provide a comprehensive compensation program which emphasizes the
pay-for-performance philosophy of the Company by integrating
executive compensation with short and long-term performance goals
of the Company and its key business units and rewarding each
executive's individual initiative and achievements.
With respect to the first objective, the Committee regularly reviews
information derived from various sources, including proxy statements, industry
surveys, and external compensation consultants. It is the Committee's intention
to set total compensation opportunity levels which are competitive with a
comparison group of chemical and petroleum product companies and other major
publicly-traded
companies of similar size and complexity (the 'Comparison Group') because the
Committee believes that the relevant market for executive talent is broader than
those companies against which it directly competes. Thus, the companies included
in the Comparison Group are not the same as the companies represented in the
published industry indexes in the Comparison of Five-Year Cumulative Total
Return graph included in this Proxy Statement.
The Committee examines specific salary and incentive target recommendations
for each executive officer based on the requirements, responsibilities, and
specific goals for each position. In general, it is the Committee's intention to
provide total compensation opportunities that approximate median compensation
levels of the Comparison Group when the Company is operating at fully acceptable
levels of performance.
With respect to the second objective, the Company's executive compensation
programs are designed to place a significant portion of the total compensation
opportunity at risk. The two principal incentive programs of the Company, the
Officers' Annual Incentive Program ('OAIP') and the Stock Option Plan ('SOP'),
use different performance measures and periods, but both create a variable
opportunity which links compensation to performance.
It is the general intention of the Committee to attempt to assure that
executive compensation will meet the requirements for deductibility under
Section 162(m) of the Code. That new provision establishes a limit on the
deductibility of annual compensation for certain executive officers which
exceeds $1,000,000. The Committee has directed the Company's management to
review executive compensation
15
<PAGE>
arrangements and employee benefit plans with a view to determining the
procedures and changes necessary to comply with proposed regulations recently
released by the U.S. Department of the Treasury which interpret this new Code
provision. However, the Committee reserves the right, under appropriate
circumstances and where merited by individual performance, to nevertheless
authorize compensation payments which may not, in a specific case, be fully
deductible by the Company.
OVERVIEW OF EXECUTIVE COMPENSATION AND 1993 COMMITTEE ACTIONS
As indicated above, the Company's executive compensation program has three
principal components: base salary, annual cash incentives under the OAIP, and
stock options under the SOP. The Committee's decisions and actions during 1993
with respect to each of these components are discussed below.
THE BASE SALARY PROGRAM
The base salary program is intended to provide base salary levels that are
externally competitive, internally equitable, and reflect each individual's
performance and contribution to the Company. Each year, a budget for merit
increases for individual performance is adopted after reviewing a number of
surveys on trends in salary planning and budgeting. In addition, the current
salary of each executive officer is compared to salary surveys and proxy data
for similar positions having approximately the same scope of responsibility.
Each executive officer's pay is then reviewed within the context of the total
merit increase budget and an appraisal of each executive officer's individual
performance to arrive at merit increase determinations. In 1993, merit increases
for individual executive officers of the Company ranged from 0% to 10% of base
salary producing an average merit increase of 5.6% for all executive officers of
the Company. This analysis is necessarily a subjective process which utilizes no
specific
weighting or formula with respect to the described factors in determining the
base salaries of executive officers.
THE OFFICERS' ANNUAL INCENTIVE PROGRAM
The OAIP provides for annual cash incentive compensation which uses
different performance measures for different executive officer positions. Bonus
awards are paid under the OAIP only if performance exceeds a predetermined
performance target reflecting minimally acceptable performance. The minimum or
threshold payout, which is 50% of the target payout, is set at 80% of the
performance target and if actual results fall short of this threshold no
incentive compensation is paid to executive officers. Target payouts under the
plan are made if fully acceptable performance is achieved. Maximum payouts can
exceed target payouts by 50% or more if outstanding levels of performance are
achieved.
For Management Committee members (which include four of the five named
executive officers, one of whom is the chief executive officer), the most
important performance criterion is the achievement of an earnings per share
('EPS') target. An annual EPS target is recommended by the Committee and
approved annually by the entire Board for strategic and financial planning
purposes. By setting EPS targets at near record levels, the Committee assures
that executive pay is truly at risk and that compensation will bear a strong
relationship to corporate performance. Primary EPS (the primary performance
measure for OAIP awards for Management Committee members) is adjusted by a
'supplementary performance multiplier' determined by the Committee. The
multiplier, which can increase or decrease the basic award by up to 20% is
intended to reflect the Committee's subjective assessment of the Management
Committee's performance as a team in areas that may not be fully
16
<PAGE>
reflected in EPS results. These areas include the strategic positioning of the
Company, the quality of the Company's products, social and environmental
responsibility initiatives, and the efficient use of capital. All of the named
executive officers are Management Committee members except for Mr. Cohen, who is
included in the group discussed immediately below.
For Mr. Cohen and other executive officers having direct responsibility for
the profitability of a business unit, the primary performance measure is the
operating income for their assigned business units. Operating income targets for
each business unit are consistent with and contribute to the Company's overall
EPS target. Awards for this group are adjusted by two multipliers, both of which
can increase or decrease the basic award by 20%. One is based on the Company's
overall EPS performance and the other is based on personal performance factors
which may not be reflected in financial results. For executive officers having
staff responsibilities, the basic performance measure is EPS. Basic awards can
be increased or decreased up to 30% to reflect personal performance factors and
contributions.
For the 1993 OAIP bonus awards, EPS results were adjusted by the Committee
to reflect that certain charges did not pertain to the operating performance of
the Company in that year. On this basis, EPS performance fell below the target
level of performance (which would generate target basic awards), but exceeded
the threshold level of performance (which would generate minimum basic awards
under the plan). In addition, operating income for each of the various business
units of the Company was insufficient to meet operating income targets but did
exceed the threshold level of performance necessary to trigger minimum OAIP
awards.
STOCK OPTION PLAN
The SOP is designed to reward executive officers and other key employees
directly for appreciation in the long-term price of the Company's stock. The
plan directly links the compensation of executive officers to gains by the
shareholders and encourages executive officers to adopt a strong stakeholder
orientation in their work. The SOP also places what can be a significant element
of compensation at risk because the options have no value unless there is
appreciation over time in the value of Company stock.
In 1992 shareholders approved the 1992 Stock Option Plan for Employees (the
'Plan'), which replaced all earlier stock option plans in effect. The Plan
enables the Committee to grant both incentive stock options (as defined under
Section 422 of the Code) and non-qualified stock options. Stock options are the
only form of long-term incentive compensation currently used by the Company.
However, the Committee periodically assesses the relative merits of alternative
approaches to long-term incentives and may at some future time introduce other
long-term incentives to either supplement or replace stock options.
17
<PAGE>
The Committee generally intends to grant stock options annually to all
executive officers based on factors similar to those used to determine base
salary and annual bonus amounts, including a review of the practices, grant
levels, and grant values of the Comparison Group. The total amount of stock
options granted to any particular executive is targeted to provide a median
level of expected value as compared to the prevailing practices of the
Comparison Group. In the event of poor corporate performance, the Committee has
the discretion to reduce the target award levels or to elect not to award stock
options.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
In determining the appropriate level of total compensation for Mr. Toller,
the Company's chief executive officer, the Committee reviewed the internal
compensation levels of the Company, total compensation packages provided to
other chief executive officers in the Comparison Group and the Company's short
and long-term financial and strategic performance.
In determining Mr. Toller's 1993 base salary and merit increase, the
Committee took into account the Company's success in integrating the Schering
Acquisition into the existing corporate structure, the Company's continued
expansion of its global manufacturing and marketing presence, and increases in
the Company's total level of sales and return on equity. In addition, the
Committee considered Mr. Toller's outstanding individual performance, including
his contributions to the continuing success and increased value of the Company,
his social and environmental leadership and a comparison of base salaries of
other chief executive officers in the Comparison Group. On this basis, the
Committee awarded Mr. Toller a base salary of $545,000, including a merit
increase of 9.0%.
The Committee also approved an OAIP award of $364,100 for Mr. Toller for
performance in 1993. This award was based on the Company's EPS performance,
which fell below the target level of performance but exceeded the threshold
level of performance thus generating minimum basic awards under the plan. This
award was supplemented by the Committee's assessment of the overall success of
the Management Committee in achieving various non-financial goals of the Company
referred to above.
In addition, on June 9, 1993 the Committee approved a stock option grant of
97,600 shares to Mr. Toller pursuant to the provisions of the Plan. The
Committee believes that this award will further serve to place Mr. Toller's
compensation at risk while providing the potential for significant gain only if
the Company's shareholders also participate in an appreciation in their
investment. In determining the total
amount of options to be granted to Mr. Toller, the Committee assessed grant
values provided to other chief executive officers in the Comparison Group, the
success of the Company in achieving its financial and strategic performance
goals in 1993 and the individual performance of Mr. Toller during 1993.
SUMMARY
The Committee believes that the executive compensation program continues to
attract and retain the executive resources needed to maximize shareholder
returns. The emphasis on compensation incentives, which address both long-term
and annual performance as well as both financial and stock performance, ensures
that the program functions in the best interests of the Company's shareholders.
SUBMITTED BY THE ORGANIZATION AND COMPENSATION COMMITTEE OF THE BOARD OF
DIRECTORS:
<TABLE>
<S> <C>
William R. Grant, Chairman Harry G. Hohn
William J. Ashe Dan J. Samuel
William G. Burns
</TABLE>
18
<PAGE>
PERFORMANCE GRAPH
The following chart compares the yearly percentage change in the cumulative
total shareholder return on the Company's Common Stock during the five fiscal
years ended December 31, 1993 with the cumulative total return on the S&P 500
Stock Index and the S&P Chemicals and Specialty Chemicals Indices. The year-end
investment values are shown beneath the graph.
WITCO CORPORATION
COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN:
S&P 500, S&P CHEMICALS, S&P SPECIALTY CHEMICALS
VALUE OF $100 INVESTED ON DECEMBER 31, 1988
[PERFORMANCE GRAPH]
S&P CHEMICALS $100 $130 $112 $147 $162 $181
S&P SPECIALTY CHEMICALS $100 $143 $148 $221 $234 $265
WITCO $100 $115 $ 97 $139 $172 $226
S&P 500 $100 $132 $127 $166 $179 $197
Companies in indices weighted by market
capitalization; indexed to 100 at 12/31/88.
All dividends reinvested over period.
The Stock Price Performance Graph above and the foregoing Organization and
Compensation Committee Report shall not be deemed incorporated by reference by
any general statement incorporating by reference this proxy statement into any
filing under the Securities Act of 1933 or under the Securities Exchange Act of
1934, except to the extent Witco Corporation specifically incorporates this
information by reference, and shall not otherwise be deemed filed under such
Acts.
19
<PAGE>
PROPOSAL 2
APPROVAL OF AMENDMENT TO THE
COMPANY'S RESTATED CERTIFICATE OF INCORPORATION
REGARDING INDEMNIFICATION OF DIRECTORS AND OFFICERS
GENERAL
On March 1, 1994, the Board of Directors of the Company unanimously adopted
an amendment to Article XI of the present Restated Certificate of Incorporation,
as amended (the 'Restated Certificate'). The Company's shareholders are being
asked to approve this amendment to the present Article XI of the Restated
Certificate with respect to indemnification of directors, officers and certain
other persons. The Board of Directors considers it to be in the best interests
of the Company and its shareholders to indemnify such persons to the fullest
extent permitted by applicable law. Approval of the proposed amendment requires
the affirmative vote of a majority of the outstanding shares of the Company.
SUMMARY OF PURPOSE AND EFFECTS OF THE PROPOSED CHANGES
The Board has determined that it would be advisable to amend the provisions
of the Company's present Restated Certificate which address the rights of
directors, officers, employees and agents to indemnification by the Company
under certain circumstances. While these provisions of the Restated Certificate
presently mandate the basic protection for such individuals that is available
under the Delaware General Corporation Law (the 'Delaware Law'), which is
applicable to the Company, the Board believes it to be desirable to include a
fuller statement in the Company's certificate of incorporation of the rights of
directors, officers, employees and agents of the Company to indemnification by
the Company in certain circumstances.
The Board of Directors has approved an amendment to present Article XI of
the Restated Certificate with respect to indemnification of directors, officers
and certain other persons. The proposed amendment would revise and restate
Article XI as set forth in full in Exhibit A to this Proxy Statement. The full
text of present Article XI is set forth in Exhibit B to this Proxy Statement.
Due to the expense of defending lawsuits, the frequency with which
unwarranted litigation is brought against directors and the inevitable
uncertainties with respect to the application of the business judgment rule to
particular facts and circumstances, directors have traditionally relied for
protection on indemnity from the corporation they serve. The Delaware Law
recognizes that adequate indemnity provisions are often a condition of an
individual's willingness to serve as a director or officer of a Delaware
corporation. Existing Article XI currently provides for indemnification of
certain persons, including directors and officers, in accordance with Delaware
law. However, the Board of Directors considers it to be in the best interests of
the Company and its shareholders to indemnify such persons to the fullest extent
permitted by applicable law, and to set forth the specific terms of such
indemnification as permitted by applicable law in the Restated Certificate and
to provide certain procedural mechanisms to indemnified parties that are not
addressed by the Delaware Law. In addition, the Board considers it desirable
that the Company's certificate of incorporation expressly provide that the
Company may procure insurance for this purpose. The Board believes that the
Company should take every possible step to ensure that the Company will continue
to be able to attract the best possible directors and officers. The primary
purpose of the proposed amendment is to supplement the existing provisions in
20
<PAGE>
the Restated Certificate to ensure that the Company will continue to be able to
attract individuals of the highest quality and ability to serve as its directors
and officers.
Paragraph (a) of proposed new Article XI states that each person who was or
is made a party to, is threatened to be made a party or is otherwise involved
in, any threatened, pending or completed action, suit or proceeding by reason of
the fact that he or she is or was a director or officer of the Company (or was
serving at the request of the Company as a director, officer, employee or agent
of another entity) shall, except in certain limited circumstances, be
indemnified and held harmless by the Company to the full extent authorized by
applicable law, as in effect (or, to the extent authority for indemnification is
broadened, as it may be amended) against all expense, liability or loss
(including attorneys' fees, judgments, fines, excise taxes or penalties and
amounts to be paid in settlement) reasonably incurred by such person in
connection therewith. Present Article XI provides mandatory indemnification to
employees and agents as well as to directors and officers. The Board of
Directors believes that, except as otherwise required by law, it is preferable
to extend indemnification to employees and agents only upon specific
authorization by the Board.
Paragraph (b) of proposed Article XI expressly provides that the Company
shall pay the expenses incurred by a director or officer in defending the
proceedings specified above in advance of their final disposition, provided that
such payment shall only be made upon delivery to the Company by the indemnified
party of an undertaking to repay all amounts so advanced if it shall ultimately
be determined that the person receiving such payment is not entitled to be
indemnified under Article XI or otherwise.
Paragraph (c) of proposed Article XI provides that the right to
indemnification and the payment of expenses incurred in defending a proceeding
in advance of its final disposition conferred in Article XI shall not be
exclusive of any other right which any person may have or acquire under statute,
provision of the Company's Restated Certificate or its Bylaws, or otherwise. In
addition, Paragraph (c) provides that the rights conferred thereby shall be
contract rights.
Paragraph (d) of proposed Article XI provides that a person indemnified
under Article XI may bring suit against the Company to recover unpaid amounts
claimed thereunder and that if such suit is successful, the expense of bringing
such suit shall be reimbursed by the Company. Paragraph (d) further provides
that, while it is a defense to such a suit that the person claiming
indemnification has not met the applicable standards of conduct making
indemnification permissible under applicable law, the burden of proving the
defense shall be on the Company, and neither the failure of the Company to have
made a determination that indemnification is proper, nor an actual determination
by the Company that the claimant has not met the applicable standard of conduct,
shall be a defense to the action or create a presumption that the claimant has
not met the applicable standard of conduct.
Paragraph (e) of proposed Article XI specifically provides that the Company
may maintain insurance, at its expense, to protect itself and any of its
directors, officers, employees or agents against any expense, liability or loss,
whether or not the Company would have the power to indemnify such person against
such expense, liability or loss under applicable law.
Paragraph (h) of proposed Article XI authorizes the Company to enter into
indemnification agreements similar to those described in Proposal 3. If Proposal
2 is not approved by the shareholders, the Company may still enter into
indemnification agreements with its directors or officers if Proposal 3 is
approved by the shareholders.
21
<PAGE>
Paragraph (j) of proposed Article XI authorizes the Company to grant rights
to indemnification and advancement of expenses to any employee or agent of the
Company to the extent authorized by the Board of Directors.
The provisions of proposed Article XI supplement and expand upon the
current provisions of present Article XI of the Restated Certificate in several
respects. Paragraph (b) makes advances of expenses incurred in defending a
proceeding mandatory, provided that the person seeking such advances furnishes
an undertaking to the Company to repay all amounts so advanced if it shall be
determined by a final adjudication that the person receiving such expenses is
not entitled to be indemnified. Paragraph (c) provides that the right to
indemnification is a contract right; the current provisions do not so provide
specifically. As described above, Paragraph (d) also expressly provides that any
person claiming indemnification may sue the Company for payment of amounts due,
that the Company in such case will have the burden of proving that the claimant
has not met the standards of conduct which make it permissible to indemnify the
person for the amount claimed under the Delaware Law (except in the case of a
claim for advancement of expenses, where the required undertaking has been
tendered, in which case it shall be a defense that the person has not met the
applicable standards of care) and that neither the failure by the Company to
have made a determination that indemnification is proper, nor an actual
determination by the Company that the claimant has not met the applicable
standard of conduct, is a defense to the action or creates a presumption that
the claimant has not met the applicable standard of conduct.
The Board of Directors recommends a vote FOR approval of the proposed
amendment to the Company's Restated Certificate of Incorporation regarding
indemnification of directors and officers.
PROPOSAL 3
APPROVAL OF FORM OF
PROPOSED INDEMNIFICATION AGREEMENT
GENERAL
The Company's shareholders are being asked to approve a form of
indemnification agreement (the 'Indemnification Agreement') which the Company
proposes to enter into with each of its current directors and officers. The
proposal would also authorize the Company, subject to approval by the Board of
Directors, to enter into a similar Indemnification Agreement with any future
director or officer of the Company and with any person who serves as a director
or officer of any other corporation at the request of the Company. Approval of
this proposal requires the affirmative vote of a majority of the shares voting
on the proposal.
Although the Company believes that the following description provides a
fair summary of the material terms of the Indemnification Agreement, the
description is qualified in its entirety by the text of the form of
Indemnification Agreement, which is attached to this Proxy Statement as Exhibit
C.
PURPOSE OF THE INDEMNIFICATION AGREEMENT
The Indemnification Agreement is a response to the increasing hazard of
litigation directed against directors or officers of publicly-held companies,
and the escalating costs incurred in such litigation. Although the Company has
not experienced difficulty in retaining its current directors and officers, the
Board of Directors believes that the Indemnification Agreement will serve the
best interests of the
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Company and its shareholders by strengthening the Company's ability to attract
and retain knowledgeable, experienced persons to serve as directors or officers
in the future.
The Indemnification Agreement is intended to complement the indemnity and
protection available to directors and officers under the Delaware Law and the
Company's Restated Certificate of Incorporation and Bylaws, and to provide for
indemnification of the Company's directors or officers to the fullest extent
permitted by applicable law.
As of the date of this Proxy Statement, there was no pending litigation or
proceeding involving a director or officer of the Company with respect to which
indemnification under the form of Indemnification Agreement would be required or
permitted.
The Indemnification Agreement will represent a contractual obligation of
the Company that cannot be unilaterally altered. Approval of the proposed form
of Indemnification Agreement may reduce the likelihood of derivative litigation
against directors or officers and may discourage or deter shareholders or
management from bringing a lawsuit against directors or officers for breach of
their duty, even though such an action, if successful, might otherwise have
benefited the Company and its shareholders.
EXISTING PROTECTION
Delaware Statutes and the Company's Bylaws. The Delaware Law provides a
statutory framework for indemnification of a director or officer who has been or
is threatened to be made a party to any legal proceeding by reason of such
director's or officer's service to the Company. The Delaware Law provides that
indemnification shall be made to any director or officer who has been successful
'on the merits or otherwise' with respect to the defense of any such proceeding,
but does not require indemnification in any other circumstance. The Delaware Law
permits the Company to advance expenses incurred in the defense of such a
proceeding if the indemnified director or officer provides the Company with an
undertaking to repay such sums if it is later determined that such director or
officer was not entitled to indemnification. Finally, the Delaware Law permits
the Company to procure insurance on behalf of its directors and officers against
any liability asserted against or incurred by a director or officer, even if the
Company would not otherwise have the power under applicable law to indemnify the
director or officer for such expenses.
Statutory Limitation of Directors' Liability. The Company's Restated
Certificate of Incorporation provides that, to the fullest extent permitted
under the Delaware Law, no director shall be personally liable to the Company or
its shareholders for monetary damages for breach of fiduciary duty as a
director.
Directors' and Officers' Liability Insurance. Insurance traditionally has
provided additional protection to directors and officers by covering expenses of
litigation and judgments in a wide range of cases, even if an insured company
would be prohibited from directly indemnifying its directors and officers. There
can be no assurance, however, that adequate coverage will be available at
reasonable cost. Accordingly, the Board of Directors believes that it serves the
Company's best interest to supplement any coverage which the Company may
maintain in the future by agreeing by contract to indemnify directors or
officers to the fullest extent permitted under applicable law.
SUMMARY OF THE FORM OF INDEMNIFICATION AGREEMENT
The proposed form of Indemnification Agreement is based on the provisions
of the Delaware Law, which are contained primarily in Section 145 of the
Delaware Law ('Section 145'). The form of
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Indemnification Agreement provides generally that the Company will to the
fullest extent permitted by law indemnify the officer or director against
expense arising from any event or occurrence related to the fact that such
person is or was serving as an officer or director of the Company (or of another
entity at the Company's request). The form of Indemnification Agreement is
intended to provide broader indemnification than that which is specifically
provided by Section 145. Under the form of Indemnification Agreement,
indemnification claims may result in a significant additional expense to the
Company.
The form of Indemnification Agreement sets forth a number of substantive
and procedural matters, which are not covered or are covered in less detail in
Section 145, including the following:
Advancement of Expenses. The form of Indemnification Agreement provides
that litigation expenses shall be advanced to an indemnified party at such
party's request. However, if and to the extent the Reviewing Party determines,
in accordance with the procedures described below, that the indemnified party
would not be permitted to be so indemnified under applicable law, the Company is
entitled to reimbursement from the indemnified party. Section 145 provides that
such expenses may be advanced against an undertaking delivered to the Company by
the indemnified party to repay the amount advanced if it is ultimately
determined that such party is not entitled to indemnification for such expenses.
Procedure to Enforce Rights. In the event the indemnified party has not
received full indemnification within thirty days after making appropriate
demands for such indemnification, the form of Indemnification Agreement allows
the indemnified party to enforce its indemnification rights by commencing
litigation in an appropriate court in the State of New York. Section 145 does
not set forth a procedure for enforcing a party's right to indemnification.
Prohibited Indemnification. The form of Indemnification Agreement provides
that no indemnification shall be paid by the Company (i) on account of any
proceeding in which judgment is rendered against the indemnified party for an
accounting of profits made from the purchase or sale by the indemnified party of
securities of the Company pursuant to Section 16(b) of the Securities Exchange
Act of 1934, as amended, or similar provisions of any federal, state or local
laws, or (ii) if the indemnified party is found to have committed gross
negligence or reckless disregard of his or her fiduciary obligations under the
Delaware Law.
Reviewing Party. The form of Indemnification Agreement provides for a party
to review the indemnified party's rights to indemnification after a written
demand has been made for such indemnification. Prior to a Change in Control (as
defined in the Indemnification Agreement), the reviewing party shall be any
appropriate person or body consisting of a member or members of the Board of
Directors or any other person or body appointed by the Board of Directors who is
not a party to the proceeding at issue. After a Change in Control, the reviewing
party shall be independent counsel selected by the indemnified party and
approved by the Company (which approval shall not be unreasonably withheld).
Section 145 requires a finding by a majority vote of disinterested directors,
independent legal counsel or the shareholders that the applicable standard of
conduct has been met.
Establishment of Trust Fund for Benefit of Indemnified Party. The form of
Indemnification Agreement provides that if there is a Change in Control, the
Company shall, upon written request of the indemnified party, create a trust
fund for the benefit of the indemnified party and shall, upon written request of
the indemnified party, fund the trust to satisfy reasonably anticipated expenses
relating to indemnification under the Indemnification Agreement.
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Retroactivity. The form of Indemnification Agreement by its terms is deemed
to have been in effect during all periods that the indemnified party has been a
director or officer of the Company, regardless of the date each such agreement
was executed.
EFFECT OF SHAREHOLDER APPROVAL
Section 144 of the Delaware Law provides that no contract between a
corporation and one or more of its directors or officers is either void or
voidable because such person or persons are parties to such contract if: (i) the
material facts as to such director's or officer's interest and as to the
contract or transaction are disclosed or known to the Board of Directors and the
Board of Directors in good faith authorizes the transaction by the affirmative
vote of a majority of the disinterested directors, even though the disinterested
directors constitute less than a quorum; (ii) the material facts as to the
director's or officer's interest and as to the contract or transaction are
disclosed or known to the shareholders entitled to vote thereon and such
contract or transaction is specifically approved in good faith by a vote of the
shareholders; or (iii) the contract or transaction is fair to the Company as of
the time it is authorized, approved or ratified by the Board of Directors or the
shareholders. If the contract has not been so approved, the contract is not void
or voidable if the person asserting the validity of the contract sustains the
burden of proving that the contract was just and reasonable to the Company at
the time it was authorized.
Although the Company believes that the form of Indemnification Agreement is
just and reasonable to the Company, and that shareholder approval may not
therefore be required to ensure enforceability of the Indemnification Agreement,
the Company believes that it is appropriate to submit the form of
Indemnification Agreement to the shareholders for their consideration. If the
form of Indemnification Agreement is approved by the shareholders, the Company's
shareholders may not later assert a claim that the Indemnification Agreement is
invalid due to improper authorization. However, the shareholders may challenge
the validity of the Indemnification Agreement on other grounds. If the form of
Indemnification Agreement is not approved by the shareholders, the Company will
reconsider the implementation of such agreements. It such agreements are
implemented in the absence of shareholder approval, the invalidity of such
agreements could thereafter be asserted by any shareholder. In such an instance,
the person asserting the validity of the contract would bear the burden of
proving that they were just and reasonable to the Company at the time they were
authorized.
The Board of Directors recommends a vote FOR the approval of the proposed
form of Indemnification Agreement.
PROPOSAL 4
APPROVAL OF PROPOSED AMENDMENT AND RESTATEMENT
OF COMPANY'S CERTIFICATE OF INCORPORATION
The Board of Directors has also approved the adoption of a new Restated
Certificate of Incorporation for the Company. The Board of Directors has
declared it advisable and in the best interests of the Company and its
shareholders to restate in full the present Restated Certificate. The new
Restated Certificate of Incorporation seeks to clarify, integrate and streamline
the present provisions of the charter, add the amendment described under
Proposal 2, if approved by shareholders and make certain other amendments,
including the deletion of obsolete language. The text of the new Restated
Certificate of Incorporation as proposed to be adopted (the 'Restated
Certificate of
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Incorporation') is annexed to this Proxy Statement as Exhibit A. The Restated
Certificate as presently in effect was amended most recently in 1988. In
accordance with the provisions of the Delaware Law, the present Restated
Certificate as amended may be restated in full. For the reasons described below,
the Board of Directors believes that it would be desirable and appropriate to do
so. As set forth in Exhibit A, the new Restated Certificate of Incorporation
would, among other matters, include the provisions set forth in Proposal 2 in
this Proxy Statement. Approval of the proposed amendment and restatement of the
Company's Certificate of Incorporation requires the affirmative vote of a
majority of the outstanding shares of the Company.
On March 1, 1994, the Board of Directors approved several amendments to the
present Restated Certificate. Article III of the Restated Certificate currently
provides a detailed list of the objects and purposes of the Company. The
proposed amendment to the Restated Certificate would replace this obsolete
language with a statement that the purpose of the Company is to engage in any
lawful act or activity for which a corporation may be organized under Delaware
Law.
This proposed amendment would serve two purposes: (i) it will remove
obsolete language from the Restated Certificate and replace it with more modern
language, and (ii) it will allow the Company more flexibility in the activities
it is allowed to engage in. While the Company currently has no plans to expand
its operations from producing quality specialty chemical and petroleum products,
the proposed amendment will allow the Company to diversify its operations in the
future without seeking shareholder approval should the Board of Directors
determine that such diversification is necessary or appropriate. The proposed
new Restated Certificate of Incorporation would also (i) correct several
typographical errors contained in the Restated Certificate and (ii) renumber
various sections and cross-references.
The current Restated Certificate has been amended 16 times since its last
restatement on December 26, 1979. A simplified and corrected Restated
Certificate of Incorporation as described above is desirable to avoid ambiguity
and to make the Company's charter setting forth the basic rights and privileges
of shareholders readily accessible and understandable for all. In those
instances where a certified copy of the Company's Certificate of Incorporation
is required to be delivered, a single instrument (rather than 17 separate
documents) can be delivered. In addition, the Board considers that setting forth
the amendment proposed in Proposal 2, if adopted by shareholders, in a fully
integrated, restated certificate of incorporation is appropriate and in the best
interests of the Company and its shareholders.
The Board of Directors recommends a vote FOR approval of the proposed
amendment and restatement of the Company's Certificate of Incorporation.
PROPOSAL 5
PROPOSED RATIFICATION OF APPOINTMENT
OF INDEPENDENT AUDITORS
The Board of Directors has appointed Ernst & Young as the independent
auditors to examine the accounts of the Company for the 1994 fiscal year. Ernst
& Young has been serving the Company in this capacity for many years. In the
event that ratification of this selection of auditors is not approved by the
affirmative vote of a majority of the shares voting on the proposal, the
selection of independent auditors will be reconsidered by the Board of
Directors.
A member of Ernst & Young is expected to be in attendance at the Annual
Meeting with the opportunity to make a statement and respond to questions.
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The Board of Directors recommends a vote FOR ratification of the
appointment of Ernst & Young as the Company's independent auditors.
SHAREHOLDER PROPOSALS
If any shareholder intends to present a proposal to the Company for
inclusion in its proxy statement relating to the annual meeting of shareholders
to be held in April 1995, or wishes to recommend nominees to the Board of
Directors, such proposal, in writing and addressed to the Secretary, must be
received by the Company no later than November 28, 1994. A shareholder may bring
other business before an annual meeting by giving written notice of such
proposed business, either by personal delivery or by United States mail, either
certified or registered, return receipt requested, to the Secretary of the
corporation at least ninety days prior to the anniversary date of the last
annual meeting held or not later than ten days after notice of public disclosure
of the date of the annual meeting is given or made to shareholders, whichever
date is earlier. Such notice shall set forth as to each item of business the
shareholder proposes to bring before the annual meeting (i) a brief description
of such item of business and the reasons for conducting it at the meeting and,
in the event that such item of business includes a proposal to amend either the
certificate of incorporation of the corporation or the by-laws, the language of
the proposed amendment, (ii) the name and address of the shareholder proposing
such item of business, (iii) a representation that the shareholder is a holder
of record of stock of the corporation entitled to vote at such meeting having a
market value of at least one thousand dollars and intends to appear in person or
by proxy at the meeting to propose such item of business, and (iv) any material
interest of the shareholder in such item of business. Only business which has
been properly brought before an annual meeting of shareholders in accordance
with the by-laws shall be conducted at such meeting, and the Chairman of such
meeting may refuse to permit any business to be brought before such meeting
which has not been properly brought before it in accordance with the by-laws.
By order of the Board of Directors,
Dustan E. McCoy
Vice President,
General Counsel
and Corporate Secretary
March 28, 1994
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EXHIBIT A
RESTATED
CERTIFICATE OF INCORPORATION
OF
WITCO CORPORATION
Witco Corporation, a corporation organized and existing under the laws of
the State of Delaware, hereby certifies as follows:
1. The name of the Corporation is Witco Corporation. Witco Corporation was
originally incorporated under the name 'Witkem, Inc.', which was changed by
merger to 'Witco Chemical Company, Inc.' which was changed by amendment to the
Articles of Incorporation to 'Witco Chemical Corporation', which was changed by
amendment to the Articles of Incorporation to the present name. The original
Certificate of Incorporation of Witkem, Inc. was filed with the Secretary of
State of the State of Delaware on June 12, 1958.
2. This Restated Certificate of Incorporation amends and restates the
provisions of the restated Certificate of Incorporation of this corporation as
heretofore amended or supplemented.
3. The text of the Restated Certificate of Incorporation as heretofore
amended or supplemented is hereby amended and restated to read in its entirety
as follows:
ARTICLE I
The name of the corporation (which is hereinafter referred to as the
'Company') is Witco Corporation.
ARTICLE II
The registered office of the Company is to be located at 1209 Orange
Street, in the City of Wilmington, in the County of New Castle, in the State of
Delaware. The name of its registered agent at that address is The Corporation
Trust Company.
ARTICLE III
The purpose of the Company is to engage in any lawful act or activity for
which corporations may be organized under the General Corporation Law of
Delaware.
ARTICLE IV
The aggregate number of shares which the Company shall have authority to
issue is 108,314,386 divided into classes as follows: 14,386 shares shall be
$2.65 Cumulative Convertible Preferred Stock, $1.00 par value per share;
8,300,000 shares shall be Series Preferred Stock, without par value; 100,000,000
shares shall be Common Stock, $5.00 par value per share.
The following is a statement of the designations and the powers,
preferences and rights of the classes of the stock of the Company:
$2.65 Cumulative Convertible Preferred Stock.
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1. Dividends. The holders of the $2.65 Cumulative Convertible Preferred
Stock (hereinafter referred to as the '$2.65 Preferred Stock'), in preference to
the holders of Series Preferred Stock and Common Stock, shall be entitled to
receive as and when declared by the Board of Directors, out of the assets of the
Company which are by law available for the payment of dividends, cumulative cash
dividends at, but not exceeding, the rate of $2.65 per share per annum, payable
quarterly on the tenth day of January, April, July and October. Dividends upon
the $2.65 Preferred Stock shall be cumulative so that, if in respect of any past
quarter-yearly dividend period full dividends upon the outstanding $2.65
Preferred Stock shall not have been paid, the deficiency shall be fully paid or
set apart for payment before any dividend shall be declared and paid or set
apart for payment upon the Series Preferred Stock or the Common Stock and before
any assets available for the payment of dividends shall be paid or set apart for
the purchase of any shares of Series Preferred Stock or Common Stock.
2. Redemption. The $2.65 Preferred Stock may be redeemed in whole or in
part by the Company at any time on or after July 10, 1971. The sums payable upon
redemption (in addition to accrued and unpaid dividends up to and including the
date fixed for redemption) shall be $67.00 per share if redeemed during the
first year following July 10, 1971, $66.50 per share if redeemed during the
second year and $66.00 per share if redeemed during the third and following
years. If less than all outstanding shares of the $2.65 Preferred Stock are to
be redeemed, the shares to be redeemed shall be chosen by lot or pro rata in
such manner as the Board of Directors may determine; provided, however, that if
full cumulative dividends shall not have been paid or declared and set apart for
payment for all quarterly dividend periods up to and including the current
dividend period, then the Company shall not call for redemption any shares of
the $2.65 Preferred Stock unless either (a) all shares of the $2.65 Preferred
Stock then outstanding are called for simultaneous redemption, or (b) if less
than all shares of the $2.65 Preferred Stock outstanding are called for
redemption at any time, the number of shares called for redemption from each
registered holder at that time shall be that number which bears the same
proportion to the total number of shares of the $2.65 Preferred Stock then
outstanding, except that in so determining the number of shares called,
fractions of less than one-half share shall be disregarded and fractions of more
than one-half share be treated as one whole share.
Not less than 30 nor more than 60 days prior to the date fixed for
redemption, a notice specifying the time and place thereof shall be given by
mail to the holders of record of the shares of $2.65 Preferred Stock to be
redeemed at their respective addresses as the same shall appear on the stock
books of the Company, but no failure to mail such notice, nor any defect therein
or in the mailing thereof, shall affect the validity of the redemption except as
to the holder to whom the Company has failed to mail said notice or as to whom
the notice was defective. From and after the date fixed in such notice as the
date of redemption, unless default be made by the Company in providing funds
sufficient for the payment of the redemption price, all dividends upon the
shares thereby called for redemption shall cease to accrue, and all rights of
the holders thereof as stockholders of the Company shall cease and terminate
except the right to receive payment of the redemption price, but without
interest thereon.
At any time after notice of redemption has been given, the Company may
deposit the aggregate redemption price in trust with any Transfer Agent for the
$2.65 Preferred Stock, named in such notice, for payment on the date fixed for
redemption to the holders of the shares so to be redeemed, upon surrender of the
certificates for such shares. Upon such redemption date, all dividends on the
shares called for redemption shall cease to accrue, and all rights of the
holders thereof as stockholders of the Company shall cease and terminate, except
the right to receive the redemption price from such Transfer Agent, without
interest thereon, and the shares represented thereby shall no longer be deemed
to be outstanding. In the event the holder of any such shares of the $2.65
Preferred Stock shall not, within six
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years after the redemption date, claim the amount deposited for the redemption
thereof, the depositary shall, upon demand, pay over to the Company such
unclaimed amount. Any moneys so deposited by the Company which shall not be
required for redemption because of the exercise of any right of conversion or
exchange subsequent to the date of the deposit shall be repaid to the Company
forthwith. Any interest accrued on any funds deposited with the depositary shall
belong to the Company and shall be paid to it from time to time on demand.
The Company may purchase from time to time, all or part of the $2.65
Preferred Stock, except that after July 10, 1971, the price at which such
purchase may be effected shall not exceed the then applicable redemption price;
provided, however, that if the Company shall be in default in the payment of any
dividend on the $2.65 Preferred Stock, it shall not purchase any shares of $2.65
Preferred Stock except pursuant to an offer made to each holder thereof to
purchase from him that number of shares which bears the same proportion to the
total number of shares registered in the name of such holder as the number of
shares of $2.65 Preferred Stock then outstanding, except that in determining the
number of shares to be purchased from each holder, fractions of less than
one-half share shall be disregarded and fractions of more than one-half share
shall be treated as one whole share.
3. Liquidation. The $2.65 Preferred Stock shall be preferred over the
Series Preferred Stock and Common Stock as herein provided as to both earnings
and assets of the Company.
The amounts which the holders of the $2.65 Preferred Stock shall be
entitled to receive (in addition to accrued and unpaid dividends) in the event
of any voluntary liquidation, dissolution, or winding up of the affairs of the
Company, before any distribution may be made to the holders of Series Preferred
Stock or Common Stock, shall be $67.00 per share until July 10, 1971 and
thereafter the amounts specified in the preceding paragraph 2 for redemption.
The holders of the $2.65 Preferred Stock shall be entitled to receive $66.00 per
share (in addition to accrued and unpaid dividends) in the event of an
involuntary liquidation, dissolution or winding up of the Company. In the event
that the assets of the Company available for distribution to the holders of the
$2.65 Preferred Stock shall not be sufficient to make in full the payments
herein required to be made, such assets shall be distributed to the holders of
the $2.65 Preferred Stock in proportion to the amounts payable hereunder with
respect to each share thereof.
After payment or provisions for payment of the debts and other liabilities
of the Company and the preferential amounts due the holders of the $2.65
Preferred Stock, the holders of Series Preferred Stock and/or Common Stock shall
be entitled to share, in accordance with the terms of this Article IV and any
resolution adopted by the Board of Directors with respect to the Series
Preferred Stock, in the remaining assets of the Company to the exclusion of the
holders of the $2.65 Preferred Stock.
Neither the merger or consolidation of the Company into or with another
corporation nor the merger or consolidation of any other corporation into or
with the Company, nor the sale, lease or conveyance of all or part of its
assets, shall be deemed to be a liquidation, dissolution or winding up of the
Company within the meaning of this paragraph 3.
4. Conversion. The $2.65 Preferred Stock shall be convertible, at the
option of the respective holders thereof, into shares of Common Stock of the
Company at a conversion rate (subject to adjustment as hereinafter provided) of
1.66 shares of Common Stock for each share of $2.65 Preferred Stock provided,
however, that as to any share of $2.65 Preferred Stock called for redemption,
the right of conversion shall terminate at the close of business on the fifth
day preceding the date fixed for redemption.
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Any holder of $2.65 Preferred Stock electing to convert shall deposit the
certificates representing the shares to be converted at the office of any
Transfer Agent for the $2.65 Preferred Stock, with the form of written request
for conversion duly endorsed on such certificates. The conversion right shall be
deemed to have been exercised at the date on which the certificates for the
$2.65 Preferred Stock, with the request for conversion duly endorsed thereon,
shall have been so deposited, and the person entitled to receive the Common
Stock issuable upon such conversion shall be treated for all purposes as the
record holder of such Common Stock on said date; provided, however, that the
conversion right in respect of any certificate so deposited after the close of
business on any day shall not be deemed to have been exercised until the next
succeeding business day. The Company shall not be required, in connection with
any such conversion, to issue a fraction of a share of its Common Stock in order
to deliver a stock certificate representing a fraction thereof, but in lieu
thereof, the Company may make a cash payment equal to such fraction multiplied
by the market price of the Common Stock determined as hereafter set forth. The
market price of the Common Stock for the purpose of computing payment to be made
for fractional shares shall be the closing sales price (or if there were no
sales, the closing bid price) on the principal stock exchange on which the
Common Stock is listed or, if the Common Stock is not so listed, the closing bid
price on the New York over-the-counter market; such price shall be determined as
of the close of business on the last full business day of each week and such
price so determined shall continue in effect during the next succeeding week.
As soon as practicable after the date of conversion of any $2.65 Preferred
Stock into Common Stock, the Company shall deliver to the person entitled
thereto, at the office of the Transfer Agent for the $2.65 Preferred Stock at
which such $2.65 Preferred Stock shall have been presented for conversion,
certificates representing shares of Common Stock, and the cash, if any, to which
such person shall be entitled on such conversion. The Company, as a condition to
the exercise of any right of conversion, may require the payment of a sum equal
to any transfer tax or other governmental charge (but not including any tax
payable upon the issue of stock deliverable upon such conversion) that may be
imposed or required by law upon any transfer incidental or prior thereto, or the
submission of proper proof that the same has been paid.
The conversion rate at any time in effect hereunder shall be adjusted in
any of the following cases:
(i) In case the Company shall at any time issue any of its Common
Stock in subdivision of outstanding Common Stock, by reclassification, or
otherwise, the conversion rate then in effect shall be increased
proportionately, and in like manner, in the case of any combination of
Common Stock, by reclassification or otherwise, the conversion rate then in
effect shall be proportionately decreased.
(ii) In case the Company shall pay a dividend or make a distribution
upon its Common Stock, in Common Stock, then in each such case, from and
after the record date for determining the stockholders entitled to receive
such dividend or distribution, the conversion rate then in effect shall be
increased in proportion to the increase in the number of outstanding shares
of Common Stock through such stock dividend or distribution.
(iii)No adjustment of the conversion rate shall be made by reason of
the issuance of Common Stock in exchange for cash, property or services.
(iv) In case of any capital reorganization or any reclassification of
the capital stock of the Company or in case of the consolidation or merger
of the Company with or into another corporation or the conveyance of all or
substantially all of the assets of the Company to another corporation, each
share of the $2.65 Preferred Stock shall thereafter be convertible into the
number
A-4
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of shares of stock or other securities or property to which a holder of the
number of shares of Common Stock of the Company deliverable upon conversion
of such share of the $2.65 Preferred Stock would have been entitled upon
such reorganization, reclassification, consolidation, merger or conveyance;
and, in any such case, appropriate adjustment (as determined by the Board
of Directors) shall be made in the application of the provisions herein set
forth with respect to the rights and interest thereafter of the holders of
the $2.65 Preferred Stock, to the end that the provisions set forth herein
(including provisions with respect to adjustments of the conversion rate)
shall thereafter be applicable, as nearly as reasonably may be, in relation
to any shares of stock or other property thereafter deliverable upon the
conversion of the shares of the $2.65 Preferred Stock.
(v) No adjustment is to be made upon conversion of the $2.65 Preferred
Stock for accrued and unpaid dividends thereon or for dividends upon the
Common Stock issuable upon such conversion.
Whenever the conversion rate is required to be adjusted as provided herein,
the Company shall forthwith compute the adjusted conversion rate and shall
prepare a certificate setting forth such adjusted conversion rate and showing in
detail the facts upon which such adjustment is based. Such certificate shall
forthwith be filed with the Transfer Agent or Agents for the $2.65 Preferred
Stock and thereafter, until further adjusted, the adjusted conversion rate shall
be as set forth in said certificate, provided that the computation of the
adjusted conversion rate shall be reviewed at least annually by the independent
public accountants regularly employed by the Company and said accountants shall
file a corrected certificate, if required, with the Transfer Agent or Agents.
The Company shall cause the Transfer Agent or Agents for the $2.65 Preferred
Stock to mail to the holders thereof, at the time of each quarterly dividend
payment, a statement setting forth the adjustments, if any, made in the
conversion rate and not theretofore reported to such holders, and the reasons
for such adjustment.
In case at any time:
(i) the Company shall make any distribution (other than cash dividends
or dividends payable in shares of its Common Stock) to the holders of its
Common Stock; or
(ii) the Company shall offer for subscription pro rata to the holders
of its Common Stock any additional shares of any class or any other rights;
then, and in any one or more of said cases, the Company shall cause at
least 20 days' prior notice to be mailed to the Transfer Agents for the
$2.65 Preferred Stock and for the Common Stock and to the holders of record
of the $2.65 Preferred Stock of the date on which the books of the Company
shall close, or a record be taken for such distribution or subscription
rights. Such notice shall also specify the date as of which holders of
Common Stock of record shall participate in said distribution or
subscription rights.
So long as any shares of the $2.65 Preferred Stock remain outstanding and
the holders thereof have the right to convert said shares, the Company will at
all times reserve from its authorized Common Stock a sufficient number of shares
to provide for such conversions. As a condition precedent to the taking of any
action which would cause an adjustment reducing the conversion price below the
then par value of the shares of Common Stock issuable upon conversion of the
$2.65 Preferred Stock, the Company will take such corporate action as may be
necessary in order that it may validly and legally issue fully paid and
non-assessable shares of such Common Stock at such adjusted conversion price.
Any share of $2.65 Preferred Stock which shall have been converted into
Common Stock or acquired by the Company through redemption shall be cancelled
and not reissued.
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5. Voting Rights. Each holder of $2.65 Preferred Stock shall be entitled to
one vote for each share held, and except as otherwise provided herein or by law,
the $2.65 Preferred Stock and Common Stock (and any other capital stock of the
Company at the time entitled thereto) shall vote together as one class, except
that while holders of $2.65 Preferred Stock, voting as a class, are entitled to
elect two directors as hereinafter provided, they shall not be entitled to
participate with the Common Stock (or any other capital stock as aforesaid) in
the election of any other directors.
If and whenever dividends on the $2.65 Preferred Stock shall be in arrears
and such arrears shall aggregate an amount at least equal to six quarterly
dividends upon such stock, then in such event, the holders of the $2.65
Preferred Stock, voting separately as a class, shall be entitled, at the next
annual meeting of the stockholders or at a special meeting held in place
thereof, or at a special meeting of the holders of the $2.65 Preferred Stock
called as hereinafter provided, to elect two directors. Whenever all arrears in
dividends on the $2.65 Preferred Stock then outstanding shall have been paid and
dividends thereon for the current quarterly period shall have been paid or
declared and a sum sufficient for the payment thereof set aside, then the right
of the holders of the $2.65 Preferred Stock to elect such number of directors
shall cease, but subject always to the same provisions for the vesting of such
voting rights in the case of any similar future arrearages in dividends.
At any time after such voting power shall have so vested in the $2.65
Preferred Stock, the Secretary of the Company may, and upon the written request
of the holders of record of 20% or more in amount of the $2.65 Preferred Stock
then outstanding, addressed to him at the principal office of the Company shall,
call a special meeting of the holders of the $2.65 Preferred Stock for the
election of the directors to be elected by them as hereinafter provided, to be
held within 30 days after such call and at the place and upon the notice
provided by law and in the By-laws for the holding of meetings of stockholders;
provided, however, that the Secretary shall not be required to call such special
meeting in the case of any such request received less than 90 days before the
date fixed for any annual meeting of stockholders. If any such special meeting
required to be called as above provided shall not be called by the Secretary
within 30 days after receipt of any such request, then the holders of record of
20% or more in amount of the $2.65 Preferred Stock then outstanding may
designate in writing one of their number to call such meeting, and the person so
designated may call such meeting to be held at the place and upon the notice
above provided, and for that purpose shall have access to the stock ledger of
the Company. The Company shall pay the reasonable expenses of calling and
holding any such special meeting. No such special meeting and no adjournment
thereof shall be held on a date later than 30 days before the annual meeting of
the stockholders or a special meeting held in place thereof next succeeding the
time when the holders of the $2.65 Preferred Stock become entitled to elect
directors as above provided.
If any such special meeting shall be called as above provided and if the
holders of at least 35% of the $2.65 Preferred Stock then outstanding shall be
present or represented by proxy at such meeting or any adjournment thereof,
then, by vote of the holders of at least a majority of the $2.65 Preferred Stock
present or so represented at such meeting, the then authorized number of
directors of the Company shall be increased by two, and at such meeting, the
holders of the $2.65 Preferred Stock shall be entitled to elect the additional
directors so provided for, but any director so elected shall not hold office
beyond the annual meeting of the stockholders or special meeting held in place
thereof next succeeding the time when the holders of the $2.65 Preferred Stock
become entitled to elect directors as above provided. Whenever the holders of
the $2.65 Preferred Stock shall be divested of special voting power as above
provided, the terms of office of all persons elected as directors by the holders
of the $2.65 Preferred Stock as a class shall forthwith terminate, and the
authorized number of directors of the Company shall
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be reduced accordingly. Any director elected by the $2.65 Preferred Stock may be
removed by, and shall not be removed except by, the vote of the holders of
record of the majority of the outstanding shares of $2.65 Preferred Stock,
voting separately as a class, at a meeting of the stockholders, or of the
holders of shares of $2.65 Preferred Stock, called for the purpose. So long as a
default in preferred dividends shall exist (a) any vacancy in the office of a
director elected by the $2.65 Preferred Stock may be filled (except as provided
in the following clause (b)) by an instrument signed by the remaining director
elected by such class of stock and filed with the Company, and (b) in the case
of the removal of any such directors, the vacancy may be filled by the vote of
the holders of a majority of the outstanding $2.65 Preferred Stock, voting
separately as a class, at the same meeting at which such removal shall be voted.
6. Limitations. So long as any shares of $2.65 Preferred Stock are
outstanding the Company shall not, by amendment to its Certificate of
Incorporation or By-laws or by merger or consolidation or in any other manner:
(i) increase the authorized amount of $2.65 Preferred Stock without
the affirmative vote of the holders of at least a majority of the $2.65
Preferred Stock then outstanding; or
(ii) create any class of stock ranking on a parity with or ranking
prior to the $2.65 Preferred Stock either as to dividends or distribution
of assets in liquidation, or change the preferences, powers, rights or
limitations with respect to the $2.65 Preferred Stock in any material
respect prejudicial to the holders thereof, without the affirmative vote of
the holders of at least two thirds of the $2.65 Preferred Stock at the time
outstanding.
Series Preferred Stock
Rights, Restrictions, etc. to be Determined by the Board of Directors. The
Series Preferred Stock may be issued, from time to time, in one or more series
as authorized by the Board of Directors. Prior to issuance of a series, the
Board of Directors by resolution shall designate that series to distinguish it
from other series and classes of stock of the Company, shall specify the number
of shares to be included in the series, and shall fix the terms, rights,
restrictions and qualifications of the shares of the series, including any
preferences, voting powers, dividend rights and redemption, sinking fund and
conversion rights. Subject to the express terms of any other series of Series
Preferred Stock outstanding at the time, the Board of Directors may increase or
decrease the number of shares or alter the designation or classify or reclassify
any unissued shares of a particular series of Series Preferred Stock by fixing
or altering in any or more respects from time to time before issuing the shares
any terms, rights, restrictions and qualifications of the shares.
Common Stock
1. Dividends. After the requirements with respect to preferential dividends
upon the $2.65 Preferred Stock and Series Preferred Stock, have been met, the
holders of the Common Stock shall be entitled to receive such dividends as may
be declared from time to time by the Board of Directors.
2. Voting Rights. Each holder of Common Stock shall be entitled to one vote
for each share held and, except as otherwise provided herein or by law, the
Common Stock and the $2.65 Preferred Stock (and any other capital stock of the
Company at the time entitled thereto) shall vote together as a class.
3. Regarding Pre-emptive Rights. No stockholder shall be entitled as a
matter of right to subscribe for, purchase or receive any shares of the stock or
any rights or options of the Company which it may issue or sell whether out of
the number of shares now or hereafter authorized to be issued at any time
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or out of the shares of the stock of the Company acquired by it after the
issuance thereof, nor shall any stockholder be entitled as a matter of right to
purchase or subscribe for or receive any bonds, debentures or other obligations
which the Company may issue or sell that shall be convertible into or
exchangeable for stock or to which shall be attached or appertain any warrant or
warrants or other instrument or instruments that shall confer upon the holder or
owner of such obligation the right to subscribe for or purchase from the Company
any shares of its stock. All such additional issues of stock, rights, options,
or of bonds, debentures or other obligations convertible into or exchangeable
for stock or to which warrants shall be attached or appertain or which shall
confer upon the holder the right to subscribe for or purchase any shares of
stock may (to the extent permitted by law) be issued and disposed of by the
Board of Directors to such persons and upon such terms as in their absolute
discretion they may deem advisable.
ARTICLE V
The minimum amount of capital with which the Company will commence business
is $1,000.
ARTICLE VI
The Company is to have perpetual existence.
ARTICLE VII
The private property of the stockholders shall not be subject to the
payment of corporate debts to any extent whatsoever.
ARTICLE VIII
1. The number of Directors of the Company shall be not less than twelve or
more than 18 persons. The exact number of directors within the minimum and
maximum limitations specified in the preceding sentence shall be fixed from time
to time by the Board of Directors pursuant to a resolution adopted by a majority
of the entire Board of Directors. At the 1983 annual meeting of stockholders,
the directors shall be divided into three classes, as nearly equal in number as
possible, with the term of office of the first class to expire at the 1984
annual meeting of stockholders, the term of office of the second class to expire
at the 1985 annual meeting of stockholders and the term of office of the third
class to expire at the 1986 annual meeting of stockholders. At each annual
meeting of stockholders following such initial classification and election,
directors elected to succeed those directors whose terms expire shall be elected
for a term of office to expire at the third succeeding annual meeting of
stockholders after their election.
2. Subject to the rights of the holders of any series of preferred stock
then outstanding, newly created directorships resulting from any increase in the
authorized number of directors or any vacancies in the Board of Directors
resulting from death, resignation, retirement, disqualification, removal from
office or other cause shall be filled by a majority vote of the directors then
in office, although less than a quorum, and directors so chosen shall hold
office for a term expiring at the annual meeting of stockholders at which the
term of the class to which they have been elected expires. If the number of
directors is changed any increase or decrease shall be apportioned among the
classes so as to maintain the number of directors in each class as nearly equal
as possible. No decrease in the number of directors constituting the Board of
Directors shall shorten the term of any incumbent director.
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3. Any director, or the entire Board of Directors may be removed from
office at any time, but only for cause and only by the affirmative vote of the
holders of at least 80% of the voting power of all of the shares of the Company
entitled to vote for the election of directors.
4. Notwithstanding the foregoing, whenever the holders of any class of
stock (other than Common Stock) issued by the Company shall have the right,
voting as a class or otherwise, to elect directors, the then authorized number
of directors of the Company shall be increased by the number of additional
directors to be elected.
5. In furtherance, and not in limitation of the powers conferred by law,
the Board of Directors are expressly authorized:
(i) To make, alter, amend or repeal the By-Laws of the Company and
subject to Articles XV and XVI herein stockholders of the Company shall
have the power to alter, amend or repeal By-Laws made by the Board of
Directors.
(ii) To remove at any time any officer elected or appointed by the
Board of Directors by such vote of the Board of Directors as may be
provided for in the By-Laws. Any other officer of the Company may be
removed at any time by a vote of the Board of Directors, or by any
committee or superior officer upon whom such power of removal may be
conferred by the By-Laws or by the vote of the Board of Directors.
(iii) To determine whether any, and if any, what part, of the annual
net profits of the Company or of its net assets in excess of its capital
shall be declared in dividends and paid to the stockholders, and to direct
and determine the use and disposition of any such annual net profits or net
assets in excess of capital.
(iv) To fix from time to time the amount of the profits of the Company
to be reserved as working capital or for any other lawful purpose.
(v) To establish bonus, profit sharing, stock option, retirement, or
other types of incentive or compensation plans for the employees (including
directors and officers) of the Company and to fix the amount of the profits
to be distributed or shared and to determine the persons to participate in
any such plans and the amounts of their respective participations.
(vi) From time to time to determine whether and to what extent, and at
what time and places and under what conditions and regulations the accounts
and books of the Company (other than the stock ledger), or any of them,
shall be open to the inspection of the stockholders; and no stockholder
shall have any right to inspect any account or book or document of the
Company, except as conferred by statute or authorized by the Board of
Directors or by a resolution of the stockholders.
(vii) To authorize, and cause to be executed, mortgages and liens upon
the real and personal property of the Company.
ARTICLE IX
No contract or other transaction between the Company and any other
corporation and no other act of the Company with relation to any other
corporation shall, in the absence of fraud, in any way be invalidated or
otherwise affected by the fact that any one or more of the directors of the
Company are pecuniarily or otherwise interested in, or are directors or officers
of, such other corporation. Any director of the Company individually, or any
firm or association of which any director may be a
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member, may be party to, or may be pecuniarily or otherwise interested in, any
contract or transaction of the Company, provided that the fact the he
individually or as a member of such firm or association is such a party or so
interested shall be disclosed or shall have been known to the Board of Directors
or a majority of such members thereof as shall be present at any meeting of the
Board of Directors at which action upon any such contract or transaction shall
be taken; and any director of the Company who is also a director or officer of
such other corporation or who is such a party or so interested may be counted in
determining the existence of a quorum at any meeting of the Board of Directors
which shall authorize any such contract or transaction, and may vote thereat to
authorize any such contract or transaction, with like force and effect as if he
were not such director or officer of such other corporation or not so
interested. Any director of the Company may vote upon any contract or other
transaction between the Company and any subsidiary or affiliated corporation
without regard to the fact that he is also a director of such subsidiary or
affiliated corporation.
Any contract, transaction or act of the Company or of the directors, which
shall be ratified at any annual meeting of the stockholders of the Company, or
at any special meeting called for such purpose, shall, in so far as permitted by
law or by the Certificate of Incorporation of the Company, be as valid and as
binding as though ratified by every stockholder of the Company; provided,
however, that any failure of the stockholders to approve or ratify any such
contract, transaction or act, when and if submitted, shall not be deemed in any
way to invalidate the same or deprive the Company, its directors, officers or
employees, of its or their right to proceed with such contract, transaction or
act.
ARTICLE X
Each officer, director, or member of any committee designated by the Board
of Directors shall, in the performance of his duties, be fully protected in
relying in good faith upon the books of account or reports made to the Company
by any of its officials or by an independent public accountant or by an
appraiser selected with reasonable care by the Board of Directors or by any such
committee or in relying in good faith upon other records of the Company.
ARTICLE XI
(a) The Company shall indemnify and hold harmless, to the fullest extent
now or hereafter permitted by applicable law as the same exists or may hereafter
be amended (but, in the case of any such amendment, only to the extent that such
amendment permits the Company to provide broader indemnification rights than
said law permitted the Company to provide prior to such amendment), each
director or officer (including each former director or officer) of the Company
who was or is made a party to or a witness in or is threatened to be made a
party to or a witness in, or is otherwise involved in, any threatened, pending
or completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (hereinafter referred to as a 'Proceeding'), by reason of the
fact that such person is or was a director, officer, employee, or agent of the
Company or is or was serving at the request of the Company as a director,
officer, employee, or agent of another corporation, partnership, joint venture,
trust or other enterprise, including service with respect to employee benefit
plans (hereinafter referred to as a 'Representative'), whether the basis of such
Proceeding is alleged action or failure to take action in an official capacity
as a Representative or in any other capacity while serving as a Representative,
against any and all expenses (including attorneys' fees and disbursements),
liabilities, (including judgments, fines, excise taxes and penalties imposed
under or in connection with obligations under the Employee Retirement Income
Securities Act of 1974, as amended), amounts paid
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in settlement, and amounts expended in seeking indemnification granted to such
person under applicable law, the bylaws or any agreement with the Company,
actually and reasonably incurred by such persons in connection with such
Proceeding.
(b) The Company shall pay expenses (including attorneys' fees and
disbursements) incurred by a director or officer (including each former director
or officer) of the Company in connection with the investigation, defense,
settlement or appeal of any Proceeding to which such person is a party to or a
witness in or is threatened to be made a party to or a witness in, or is
otherwise involved in, regarding such person's service as a Representative in
advance of the final disposition of such Proceeding. The expenses incurred by
such director or officer in his capacity as a Representative of the Company
shall be paid by the Company in advance of the final disposition of such
Proceeding only upon receipt by the Company of an undertaking by or on behalf of
such person to repay all amounts advanced if it shall be determined ultimately
that such person is not entitled to be indemnified under this Article XI or
otherwise.
(c) The rights of indemnification and advancement of expenses provided by
this Article XI shall not be deemed exclusive of any other rights to which any
person seeking indemnification or advancement of expenses may have or hereafter
be entitled under any statute, provision of the Restated Certificate of
Incorporation or Bylaws of the Company, agreement, vote of stockholders or
disinterested directors, or otherwise, both as to action in such person's
official capacity and as to action in another capacity while holding such office
or position, and shall continue as to a person who has ceased to be a
Representative of the Company and shall inure to the benefit of the heirs,
executors and administrators of such person. The rights conferred in this
Article XI shall be contract rights.
(d) If any claim under this Article XI is not paid in full by the Company
within 30 days after a written claim has been received by the Company, the
claimant may at any time thereafter bring suit against the Company to recover
the unpaid amount of the claim and, if such suit is not frivolous or brought in
bad faith, the claimant shall be entitled to be also paid the expense of
prosecuting such claims. It shall be a defense to any such action (other than an
action brought to enforce a claim for expenses incurred in defending any
Proceeding in advance of its final disposition where the required undertaking,
if any, has been tendered to the Company) that the claimant has not met the
standards of conduct that make it permissible under applicable law for the
Company to indemnify the claimant for the amount claimed, but the burden of
providing such defense shall be on the Company. Neither the failure of the
Company (including the Board, independent legal counsel, or its stockholders) to
have made a determination prior to the commencement of such action that
indemnification of the claimant is proper in the circumstances because the
claimant has met the applicable standard of conduct set forth in applicable law,
nor an actual determination by the Company (including the Board, independent
legal counsel, or its stockholders) that the claimant has not met such
applicable standard of conduct, shall be a defense to the action or create a
presumption that claimant has not met the applicable standard of conduct.
(e) The Company may purchase and maintain insurance on behalf of any
Representative, employee or agent of the Company against any liability asserted
against or incurred by such person in any capacity, whether or not the Company
would have the power to indemnify such person against such liability under the
provisions of this Article XI.
(f) The Board, without approval of the stockholders, shall have the power
to borrow money on behalf of the Company, including the power to pledge the
assets of the Company, from time to time to
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discharge the Company's obligations with respect to indemnification, the
advancement and reimbursement of expenses, and the purchase and maintenance of
insurance referred to in this Article XI.
(g) For purposes of this Article, references to the 'Company' shall
include, in addition to the resulting corporations, any constituent corporation
(including any constituent of a constituent) absorbed in a consolidation or
merger which, if its separate existence had continued, would have had power and
authority to indemnify its Representatives so that any person who is or was a
Representative of such constituent corporation shall stand in the same position
under this Article XI with respect to the resulting or surviving corporation as
he would have with respect to such constituent corporation if its separate
existence had continued.
(h) The Board is authorized to enter into a contract with any
Representative, employee or agent of the Company providing for indemnification
rights equivalent to or, if the Board so determines, greater than, those
provided for in this Article XI.
(i) Any amendment, repeal or modification of any provision of this Article
XI by the stockholders or the directors of the Company shall not adversely
affect any right of protection of a Representative of the Company under this
Article XI existing at the time of such amendment, repeal or modification.
(j) The Company may, to the extent authorized from time to time by the
Board of Directors, grant rights to indemnification and to the advancement of
expenses to any employee or agent of the Company to the fullest extent of the
provisions of this Article with respect to the indemnification and advancement
of expenses of directors and officers of the Company.
(k) A director of the Company shall not be personally liable to the Company
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 Company or its stockholders, (ii) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of
law, (iii) for a stock repurchase which is illegal under Section 174 of the
General Corporation Law of the State of Delaware or (iv) for any transaction
from which the director derived an improper personal benefit. If the Delaware
General Corporation Law hereafter is amended to authorize the further
elimination or limitation of the liability of directors, then the liability of a
director of the Company, in addition to the limitation on personal liability
provided herein, shall be limited to the fullest extent permitted by the amended
Delaware General Corporation Law. Any repeal or modification of this paragraph
by the stockholders of the Company shall be prospective only, and shall not
adversely affect any limitation on the personal liability of a director of the
Company existing at the time of such repeal or modification.
ARTICLE XII
Both the stockholders and the directors of the Company may hold their
meetings and the Company may have an office or offices in such place or places
outside of the State of Delaware as the By-laws may provide and the Company may
keep its books outside of the State of Delaware except as otherwise provided by
law.
ARTICLE XIII
Any action required or permitted to be taken by the stockholders of the
Company must be effected at a duly called annual or special meeting of
stockholders of the Company and may not be effected by any consent in writing by
such stockholders. Special meetings of stockholders of the Company may be
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called only by the Board of Directors pursuant to a resolution approved by a
majority of the entire Board of Directors.
ARTICLE XIV
(a) 1. In addition to any affirmative vote required by law, and except as
otherwise expressly provided in paragraph (b) of this Article:
(A) any merger or consolidation of the Company or any Subsidiary (as
hereinafter defined) with or into (i) any Interested Stockholder (as
hereinafter defined) or (ii) any other corporation (whether or not itself
an Interested Stockholder) which, after such merger or consolidation, would
be an Affiliate (as hereinafter defined) of an Interested Stockholder, or
(B) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition (in one transaction or a series of related transactions) to or
with any Interested Stockholder or any Affiliate of any Interested
Stockholder of any assets of the Company or any Subsidiary having an
aggregate fair market value of $1,000,000 or more, or
(C) the issuance or transfer by the Company or any Subsidiary (in one
transaction or a series of related transactions) of any securities of the
Company or any Subsidiary to any Interested Stockholder or any Affiliate of
any Interested Stockholder in exchange for cash, securities or other
property (or a combination thereof) having an aggregate fair market value
of $1,000,000 or more, or
(D) the adoption of any plan or proposal for the liquidation of
dissolution of the Company, or
(E) any reclassification of securities (including any reverse stock
split), or recapitalization of the Company or any merger or consolidation
of the Company with any of its Subsidiaries or any similar transaction
(whether or not with or into or otherwise involving an Interested
Stockholder) which has the effect, directly or indirectly, of increasing
the proportionate share of the outstanding shares of any class of equity or
convertible securities of the Company or any Subsidiary which is directly
or indirectly owned by any Interested Stockholder or any Affiliate of any
Interested Stockholder,
shall require the affirmative vote of the holders of at least 80% of the
outstanding shares of stock of the Company entitled to vote generally in the
election of directors, considered for the purpose of this Article as one class
('Voting Shares'). Such affirmative vote shall be required notwithstanding the
fact that no vote may be required, or that some lesser percentage may be
specified, by law or in any agreement with any national securities exchange or
otherwise.
2. The term 'business combination' as used in this Article shall mean any
transaction which is referred to in any one or more of clauses (A) through (E)
of Section 1 of this paragraph (a).
(b) The provisions of paragraph (a) of this Article shall not be applicable
to any particular business combination, and such business combination shall
require only such affirmative vote as is required by law and any other
provisions of this Certificate of Incorporation, if either (1) such business
combination has been approved by a majority of the Continuing Directors (as
hereinafter defined) or (2) the aggregate amount of the cash and fair market
value of consideration other than cash to be received per share by holders of
Common Stock in such business combination shall be in the same form and of the
same kind as the consideration paid by the Interested Stockholder in acquiring
the initial 10% of the Common Stock owned by it and shall be at least equal to
the highest per share price (including
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brokerage commission, transfer taxes and soliciting dealers' fees and after
giving effect to appropriate adjustments for any recapitalizations and for any
stock splits, stock dividends and like distributions) paid by such Interested
Stockholder for any shares of Common Stock acquired by it prior to the business
combination; and the aggregate amount of cash to be received per share by the
holders of any class preferred stock in such business combination is the greater
of (i) the highest per share price paid by the Interested Stockholder in
acquiring any shares of such preferred stock or (ii) the highest preferential
amount per share to which the holders of such class of preferred stock are
entitled in the event of a voluntary or involuntary liquidation of the Company.
(c) For the purposes of this Article XIV:
1. A 'person' shall mean any individual, firm, corporation or other
entity.
2. 'Interested Stockholder' shall mean, in respect of any business
combination, any person (other than the Company or any Subsidiary) who or
which, as of the record date for the determination of stockholders entitled
to notice of and to vote on such business combination, or immediately prior
to the consummation of any such transaction,
(A) is the beneficial owner, directly or indirectly, of more than
10% of the Voting Shares, or
(B) is an Affiliate of the Company and at any time within two years
prior thereto was the beneficial owner, directly or indirectly, of not
less than 10% of the then outstanding Voting Shares, or
(C) is an assignee of or has otherwise succeeded to any shares of
capital stock of the Company which were at any time within two years
prior thereto beneficially owned by any Interested Stockholder, and such
assignment or succession shall have occurred in the course of a
transaction or series of transactions not involving a public offering
within the meaning of the Securities Act of 1933.
3. A person shall be the 'beneficial owner' of the Voting Shares:
(A) which such person or any of its Affiliates and Associates (as
hereinafter defined) beneficially own, directly or indirectly, or
(B) which such person or any of its Affiliates or Associates has
(i) the rights to acquire (whether such right is exercisable immediately
or only after the passage of time), pursuant to any agreement,
arrangement or understanding or upon the exercise of conversion rights,
exchange rights, warrants or options, or otherwise, or (ii) the rights
to vote pursuant to any agreement, arrangement or understanding, or
(C) which are beneficially owned, directly or indirectly, by any
other person, with which such first mentioned person or any of its
Affiliates or Associates has any agreement, arrangement or understanding
for the purpose of acquiring, holding, voting or disposing of any shares
of capital stock of the Company.
4. The outstanding Voting Shares shall include shares deemed owned
through applications of Section 3 above but shall not include any other
Voting Shares which may be issuable pursuant to any agreement, or upon
exercise of conversion rights, warrants or options, or otherwise.
5. 'Affiliate' and 'Associate' shall have the respective meanings
given those terms in Rule 12b-2 of the General Rules and Regulations under
the Securities Exchange Act of 1934, as in effect on March 1, 1983.
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6. 'Subsidiary' means any corporation of which a majority of any class
of equity security (as defined in Rule 3all-1 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as in effect on
March 1, 1983) is owned, directly or indirectly, by the Company, provided,
however, that for the purposes of the definition of Interested Stockholder
set forth in Section 2 of this subparagraph c, the term 'Subsidiary' shall
mean only a corporation of which a majority of each class of equity
security is owned, directly or indirectly by the Company.
7. 'Continuing Director' means any member of the Board of Directors of
the Company who is unaffiliated with an Interested Stockholder and was a
member of the Board prior to the time that an Interested Stockholder became
an Interested Stockholder, and any successor of a Continuing Director who
is unaffiliated with the Interested Stockholder and is recommended to
succeed a Continuing Director by a majority of the Continuing Directors
then on the Board.
(d) A majority of the directors shall have the power and duty to determine
for the purposes of this Article, on the basis of information known to them, (1)
the number of Voting Shares beneficially owned by any person, (2) whether a
person is an Affiliate or Associate of another, (3) whether a person has an
agreement, arrangement or understanding with another as to the matters referred
to in Section 3 of paragraph (c), or (4) whether the assets subject to any
business combination or the consideration received for the issuance or transfer
of securities by the Company or any Subsidiary has an aggregate fair market
value of $1,000,000 or more.
(e) Nothing contained in this Article shall be construed to relieve any
Interested Stockholder from any fiduciary obligation imposed by law.
ARTICLE XV
The provisions set forth in Article VIII, Article XIII, Article XIV,
Article XV and Article XVI herein may not be repealed or amended in any respect,
and the Company's By-laws may not be amended by stockholders, unless such action
is approved by the affirmative vote of the holders of not less than 80% of the
voting power of all shares of stock of the Company entitled to vote in the
election of directors, considered for purposes of this Article XV as one class.
The voting requirements contained in Article VIII, Article XIII, Article XIV,
Article XV, and Article XVI herein shall be in addition to the voting
requirements imposed by law, other provisions of this Certificate of
Incorporation or any Certificate of Designation of Preferences filed with
respect to Series Preferred Stock. The By-laws of the Company may be altered,
amended or repealed by the Board of Directors at any regular or special meeting
of the Board of Directors.
ARTICLE XVI
The Company reserves the right to amend, alter, change or repeal any
provision contained in this Certificate of Incorporation, in the manner now or
hereafter prescribed by the laws of the State of Delaware and all rights
conferred on stockholders herein are granted subject to this reservation.
Notwithstanding the foregoing, the provisions set forth in Article VIII, Article
XIII, Article XIV, Article XV and Article XVI, may not be repealed or amended in
any respect unless such repeal or amendment is approved as specified in Article
XV herein.
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NOTES
1. Articles I and II will be unchanged from the present Restated
Certificate of Incorporation.
2. Present Article III would be deleted in its entirety and replaced
with new Article III if Proposal 4 is approved by the stockholders. For the
text of present Article III proposed to be deleted see Exhibit C.
3. Articles IV through X will be unchanged from the present Restated
Certificate of Incorporation except for the correction of typographical
errors, and the renumbering of the paragraphs of Articles IV and VIII.
4. Paragraphs (a) through (h) of present Article XI will be deleted in
their entirety and replaced with the text of new Article XI and paragraph
(i) of present Article XI will be relettered as paragraph (j) if Proposal 2
is approved by the stockholders. For the text of paragraphs (a) through (h)
of present Article XI proposed to be deleted and replaced with new Article
XI, see Exhibit C.
5. Articles XII through XVI will be unchanged from the present
Restated Certificate of Incorporation.
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EXHIBIT B
ARTICLE III AND ARTICLE XI OF
PRESENT CERTIFICATE OF INCORPORATION
ARTICLE III
The nature of the business of the Company and the objects and purposes
proposed to be transacted, promoted, or carried on by it, are as follows,
to-wit:
(a) To manufacture, produce, prepare, make, refine, distill, reduce,
compound, treat, buy, sell, at wholesale or retail, import and export,
transport, distribute, market and generally deal in and with alkalis,
chemicals, chemical products, pigments, colors, dyes, oils, reagents and
all by-products, allied products and compounds of every kind and
description including amorphous carbon, carbon black, gas black, and gas
graphite and the allied products and by-products thereof produced,
processed, treated or manufactured by burning, heating, cracking or
consuming natural gas or any other material, or by any chemical, mechanical
or other process.
(b) To explore, prospect, drill and mine for, to produce, prepare,
gather, manufacture, process, treat, refine, distill and adapt, to purchase
or in any manner acquire, and to sell, transport, distribute, handle, store
and generally deal in and with, petroleum and other oils, gas (natural,
artificial and mixed), and vegetable substances, mineral and volatile
substances, asphalt, bitumen and bituminous substances of every kind and
character for any and all purposes whatsoever, and any and all products,
by-products and residual products thereof or therefrom; to purchase or
otherwise acquire, sink, drill, develop, maintain, own, use, operate, sell,
lease, mortgage, otherwise dispose of, and generally deal with, oil and gas
wells, structures and equipment of all kinds, and to utilize, buy, sell,
deal with and prepare for market any and all of the products thereof and
therefrom; and to engage in, transact and carry on a general oil, gas and
gasoline business in all its branches, and any and all other trades,
businesses and occupations necessary or convenient in connection therewith
or in connection with any other business of the corporation, or incidental,
applicable, contributory or allied thereto.
(c) To establish and maintain an oil and/or gas business with
authority to contract for the lease and purchase of the right to prospect
for, develop and use coal and other minerals, petroleum and gas; also the
right to erect, build and own all necessary oil tanks, cars and pipes
necessary for the operation of the business of the same.
(d) To acquire by purchase, lease or otherwise, to own, hold and
maintain, and to mortgage, pledge, lease, sell or otherwise dispose of, oil
and gas lands, leases, royalties, and permits, lands and real estate of all
kinds, and the oil, gas and mineral rights and interests in lands; to
produce therefrom oil, gas and other volatile or mineral substances, and to
develop, operate, dispose of or in any way use the said leases, royalties,
permits, lands, and the oil, gas and mineral rights and interest therein;
to develop such lands, leases, rights and interests by, and to enter into,
acquire, carry out and execute contracts for, drilling wells and
installation of plants, machinery and appliances, and to dispose of the
products therefrom either as a raw product or otherwise, and to refine and
reduce said products and to prepare said products for market, and to
manufacture from said products and any and all marketable commodities.
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(e) To store, buy, sell, refine, manufacture and deal in oil, gas,
salt, brine, and other mineral solutions and liquified minerals; also sand
and clay for the manufacture and sale of clay products; and the production
of oil and gas; to prospect for and produce oil and gas and to own and hold
land, leases and other properties for that purpose and engage in the oil
and gas producing business; to own and operate refineries, casing and
treating plants, sale offices, warehouses, docks, ships, tank cars, and
vehicles necessary in the conduct of its business; to own and operate
private pipe lines in and about its refineries, fields, or stations in the
conduct of its own business.
(f) To manufacture, acquire, buy, hold, sell and dispose of in any
lawful manner, and generally deal in and with goods, wares, merchandise and
commodities of any and every class and description, and all articles used
or useful in connection therewith, and all other property of whatsoever
kind and nature, suitable, necessary, useful or advisable in connection
with any of the objects hereinabove or hereinafter set forth.
(g) To manufacture, produce, buy, sell and deal in minerals and
chemicals of every description, organic and inorganic, natural or
synthetic, in the form of raw materials, intermediates, or finished
products and any other related products whatsoever and by-products derived
from the manufacture thereof and products to be made therefrom, and to do
all things and to acquire real and personal property of all kinds necessary
or incident thereto, including the acquisition, leasing, developing,
operating, and dealing in mines and mineral claims and properties.
(h) To engage in research, exploration, laboratory and development
work relating to any substance, compound or mixture, now known or which may
hereafter be known, discovered or developed, and to perfect, develop,
manufacture, use, apply and generally deal in any such substance, compound
or mixture.
(i) To erect, purchase, sell, lease, manage, occupy and improve
buildings and to do and perform all things needful and lawful for the
holding, development and improvement of the same for residence, trade and
business purposes; to buy, own operate, improve, lease and occupy lands and
buildings for hotels, restaurants, apartment houses, dwelling houses,
hospitals and business structures of all kinds, for the accommodation of
the public and of individuals.
(j) To transact any mining or manufacturing business, and to purchase
and sell real and personal property, goods, wares and merchandise used for
such business.
(k) To purchase or otherwise acquire, lease, assign, mortgage, pledge
or otherwise dispose of any trade names, trade-marks, concessions,
inventions, formulae, improvements, processes of any nature whatsoever,
copyrights, and letters patent of the United States and of foreign
countries, and to accept and grant licenses thereunder.
(l) To subscribe or cause to be subscribed for, and to purchase or
otherwise acquire, hold for investment, sell, assign, transfer, mortgage,
pledge, exchange, distribute or otherwise dispose of the whole or any part
of the shares of the capital stock, bonds, coupons, mortgages, deeds of
trust, debentures, securities, obligations, notes and other evidences of
indebtedness of any corporation, stock company or association, now or
hereafter existing, and whether created by or under the laws of the State
of Delaware, or otherwise; and while owner of any of said shares of capital
stock or bonds or other property to exercise all the rights, powers and
privileges of ownership of every kind and description, including the right
to vote thereon, with power to designate some person for that purpose from
time to time to the same extent as natural persons might or could do.
(m) To purchase, hold, sell and reissue the shares of its own capital
stock.
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(n) To endorse, guarantee and secure the payment and satisfaction of
the principal of and interest on or evidenced by bonds, coupons, mortgages,
deeds of trust, debentures, obligations or evidences of indebtedness of
other corporations; to guarantee and secure the payment or satisfaction of
the par or stated value of or dividends on shares of the capital stock of
other corporations; to assume the whole or any part of the liabilities,
existing or prospective, of any person, corporation, firm or association;
and to aid in any manner any other person or corporation with which it has
business dealings, or whose stock, bonds, or other obligations are held or
are in any manner guaranteed by the Company, and to do any other acts and
things for the preservation, protection, improvement, or enhancement of the
value of such stock, bonds, or other obligations.
(o) Without in any particular limiting any of the objects and powers
of the Company, it is hereby expressly declared and provided that the
Company shall have power to do all things hereinbefore enumerated, and also
to issue or exchange stocks, bonds and other obligations in payment for
property purchased or acquired by it, or for any other object in or about
its business; to borrow money without limit; to mortgage or pledge its
franchise, real or personal property, income and profits accruing to it,
any stocks, bonds or other obligations, or any property which may be owned
or acquired by it, and to secure any bonds to other obligations by it
issued or incurred.
(p) To carry on any business whatsoever which the Company may deem
proper or convenient in connection with any of the foregoing purposes or
otherwise, or which may be calculated, directly or indirectly, to promote
the interests of the Company or to enhance the value of its property; to
conduct its business in the State of Delaware, in other States, in the
District of Columbia, in the territories and colonies of the United States,
and in foreign countries; and to hold, purchase, mortgage and convey real
and personal property, either in or out of the State of Delaware upon
corporations formed under the act pursuant to and under which the Company
is formed.
The objects and purposes specified in the foregoing clauses shall, except
when otherwise expressed, be in no wise limited or restricted by reference to,
or inference from, the terms of any other clause in this Agreement, but the
objects and purposes specified in each of the foregoing clauses of this Article
shall be regarded as independent objects and purposes.
ARTICLE XI
(a) The Company shall have power to indemnify any person who was or is a
party or is threatened to be made party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal administrative or
investigative (other than an action by or in the right of the Company) by reason
of the fact that he is or was a director, officer, employee or agent of the
Company, or is or was serving at the request of the Company as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him in connection with such action, suit or proceeding if he acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the Company, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. In this
connection, the termination of any action, suit or proceeding by judgment,
order, settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the person did not
act in good faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the Company, and with respect to any criminal
action or proceedings, had reasonable cause to believe that his conduct was
unlawful.
B-3
<PAGE>
(b) The Company shall have power to indemnify any person who was or is a
party or is threatened to be made party to any threatened, pending or completed
action or suit by or in the right of the Company to procure a judgment in its
favor by reason of the fact that he is or was a director, officer, employee or
agent of the Company, or is or was serving at the request of the Company as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the Company
and except that no indemnification shall be made in respect of any claim, issue
or matter as to which such person shall have been adjudged to be liable to the
Company unless and only to the extent that the Court of Chancery or the court in
which such action or suit was brought shall determine upon application that,
despite the adjudication or liability but in view of all the circumstances of
the case, such person is fairly and reasonably entitled to indemnity for such
expenses which the Court of Chancery or such other court shall deem proper.
(c) To the extent that a director, officer, employee or agent of the
Company has been successful on the merits or otherwise in defense of any action,
suit or proceeding referred to in subsections (a) and (b), or in defense of any
claim, issue or matter therein, he shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
(d) Any indemnification under subsections (a) and (b) (unless ordered by a
court) shall be made by the Company only as authorized in the specific case upon
a determination that indemnification of the director, officer, employee or agent
is proper in the circumstances because he has met the applicable standard of
conduct set forth in subsections (a) and (b). Such determination shall be made
(1) by the board of directors by a majority vote of a quorum consisting of
directors who were not parties to such action, suit or proceeding, or (2) if
such a quorum is not obtainable, or, even if obtainable a quorum of
disinterested directors so directs, by independent legal counsel in a written
opinion, or (3) by the stockholders.
(e) Expenses incurred by an officer or director in defending a civil or
criminal action, suit or proceeding may be paid by the Company in advance of the
final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of the director, officer or employee or agent to
repay such amount if it shall ultimately be determined that he is not entitled
to be indemnified by the Company as authorized in this section. Such expenses
incurred by other employees and agents may be so paid upon such terms and
conditions, if any, as the board of directors deems appropriate.
(f) The indemnification and advancement of expenses provided by or granted
pursuant to the provision of this section shall not be deemed exclusive of any
other rights to which those seeking indemnification or advancement of expenses
may be entitled under any by-law, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in his official capacity
and as to action in another capacity while holding such office.
(g) The Company shall have the power to purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee or agent of the
Company, or is or was serving at the request of the Company as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise against any liability asserted against him and
incurred by him in any such capacity, or arising out of his status as such,
whether or not the Company would have the power to indemnify him against such
liability under the provisions of this section.
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(h) The indemnification and advancement of expenses provided by, or granted
pursuant to, this Article XI shall, unless otherwise provided when authorized or
ratified, continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such person.
(i) A director of the Company shall not be personally liable to the Company
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 Company or its stockholders, (ii) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of
law, (iii) for a stock repurchase which is illegal under Section 174 of the
General Corporation Law of the State of Delaware or (iv) for any transaction
from which the director derived an improper personal benefit. If the Delaware
General Corporation Law hereafter is amended to authorize the further
elimination or limitation of the liability of directors, then the liability of a
director of the Company, in addition to the limitation on personal liability
provided herein, shall be limited to the fullest extent permitted by the amended
Delaware General Corporation Law. Any repeal or modification of this paragraph
by the stockholders of the Company shall be prospective only, and shall not
adversely affect any limitation on the personal liability of a director of the
Company existing at the time of such repeal or modification.
B-5
<PAGE>
EXHIBIT C
INDEMNIFICATION AGREEMENT DATED AS OF
, 19 ,
BETWEEN WITCO CORPORATION, A DELAWARE CORPORATION (THE 'COMPANY'),
AND ('INDEMNITEE').
It is essential to the Company to retain and attract as directors and
officers the most capable persons available. It is becoming increasingly more
difficult for companies to attract the most qualified and experienced people to
serve as directors and officers because of the tendency in the United States of
increasing litigation and other challenges by stockholders and others against
directors and officers of companies. In recognition of Indemnitee's need for
substantial protection against personal liability in order to enhance
Indemnitee's continued and effective service to the Company, and in order to
induce Indemnitee to provide such services to the Company as a director or
officer, the Company wishes to provide in this Agreement for the indemification
of and the advancing of expenses to Indemnitee to the fullest extent (whether
partial or complete) permitted by law and as set forth in this Agreement,
whether or not insurance is maintained to provide coverage for Indemnitee.
NOW THEREFORE, in consideration of the foregoing and of Indemnitee's
continued service to the Company and intending to be legally bound hereby, the
parties agree as follows:
1. Certain Definitions. Whenever used in this Agreement, the following
words and phrases shall have the following meanings:
'Board' shall mean the Board of Directors of the Company.
'Change in Control' shall be deemed to have occurred if (i) any
'person' (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended), other than a trustee or
other fiduciary holding securities under an employee benefit plan of the
Company is or becomes the 'Beneficial Owner' (as defined in Rule 13d-3
under said Act), directly or indirectly, of securities of the Company
representing 20% or more of the total voting power represented by the
Company's then outstanding Voting Securities (a '20% Interest'), (ii)
during any period of two consecutive years, individuals who at the
beginning of such period constitute the Board and any new director whose
election by the Board or nomination for election by the Company's
stockholders was approved by a vote of at least two-thirds ( 2/3) of the
directors then still in office who either were directors at the
beginning of the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute a majority
thereof, (iii) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than a
merger or consolidation that would result in the Voting Securities of
the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into
Voting Securities of the surviving entity) at least 80% of the total
voting power represented by the Voting Securities of the Company or such
surviving entity outstanding immediately after such merger or
consolidation, or (iv) the stockholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or
disposition by the Company (in one transaction or a series of
transactions) of all or substantially all of the Company's assets.
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'Expenses' shall mean any expense, liability or loss, including
attorneys' fees, judgments, fines, ERISA excise taxes and penalties,
amounts paid or to be paid in settlement, any interest, assessments, or
other charges imposed thereon, and any federal, state, local, or foreign
taxes imposed as a result of the actual or deemed receipt of any
payments under this Agreement, paid or incurred in connection with
investigating, defending, being a witness in, or participating in
(including on appeal), or preparing for any of the foregoing, any
Proceeding relating to any Indemnifiable Event.
'Indemnifiable Event' shall mean any event or occurrence that takes
place either prior to or after the execution of this Agreement, related
to the fact that Indemnitee is or was a director or an officer of the
Company, or while a director or officer is or was serving at the request
of the Company as a director, officer, employee, trustee, agent, or
fiduciary of another foreign or domestic corporation, partnership, joint
venture, employee benefit plan, trust, or other enterprise, or was a
director, officer, employee, or agent of a foreign or domestic
corporation that was a predecessor corporation of the Company or of
another enterprise at the request of such predecessor corporation, or
related to anything done or not done by Indemnitee in any such capacity,
whether or not the basis of the Proceeding is alleged action in an
official capacity as a director, officer, employee, or agent or in any
other capacity while serving as a director, officer, employee, or agent
of the Company, as described above.
'Independent Counsel' shall mean the person or body appointed in
connection with Section 3.
'Proceeding' shall mean any threatened, pending, or completed
action, suit, or proceeding (including an action by or in the right of
the Company) or any inquiry, hearing, or investigation, whether
conducted by the Company, a stockholder or bond holder of the Company, a
governmental body, or any other party, that Indemnitee in good faith
believes might lead to the institution of any such action, suit, or
proceeding, whether civil, criminal, administrative, investigative, or
other.
'Reviewing Party' shall mean the person or body appointed in
accordance with Section 3.
'Voting Securities' shall mean any securities of the Company that
vote generally in the election of directors.
2. Agreement to Indemnify.
(a) General Agreement. In the event Indemnitee was, is, or becomes a
party to or witness or other participant in, or is threatened to be made a
party to or witness or other participant in, a Proceeding by reason of (or
arising out of) an Indemnifiable Event, the Company shall indemnify
Indemnitee from and against any and all Expenses to the fullest extent
permitted by law applicable to the Indemnifiable Event, or as the same may
exist currently or may hereafter be amended or interpreted (but in the case
of any such subsequent amendments or interpretations, only to the extent
that such amendments or interpretations permit the Company to provide
broader indemnification rights than were permitted prior thereto). The
parties hereto intend that this Agreement shall provide for indemnification
in excess of that expressly permitted by statute, including, without
limitation, any indemnification provided by the Company's Certificate of
Incorporation, its By-laws, vote of its stockholders or disinterested
directors, or applicable law.
(b) Initiation of Proceeding. Notwithstanding anything in this
Agreement to the contrary, Indemnitee shall not be entitled to
indemnification pursuant to this Agreement in connection with
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any Proceeding initiated by Indemnitee against the Company or any director
or officer of the Company unless (i) the Company has joined in or the Board
has consented to the initiation of such Proceeding; (ii) the Proceeding is
one to enforce indemnification rights under Section 5 hereof; or (iii) the
Proceeding is instituted after a Change in Control (other than a Change in
Control approved by a majority of the directors on the Board who were
directors immediately prior to such Change in Control) and Independent
Counsel has approved its initiation.
(c) Expense Advances. If so requested by Indemnitee, the Company shall
advance (within ten business days of such request) any and all Expenses to
Indemnitee (an 'Expense Advance'); provided that, if and to the extent the
Reviewing Party determines that Indemnitee would not be permitted to be so
indemnified under applicable law, the Company shall be entitled to be
reimbursed by Indemnitee (who hereby agrees to reimburse the Company) for
all such amounts theretofore paid in connection with the Proceeding then in
question. If Indemnitee has commenced or commences legal proceedings in a
court of competent jurisdiction to secure a determination that Indemnitee
should be indemnified under applicable law, as provided in Section 4, any
determination made by the Reviewing Party that Indemnitee would not be
permitted to be indemnified under applicable law shall not be binding and
Indemnitee shall not be required to reimburse the Company for any Expense
Advance until a final judicial determination is made with respect thereto
(as to which all rights of appeal therefrom have been exhausted or have
lapsed). Indemnitee's obligation to reimburse the Company for Expense
Advances shall be unsecured and no interest shall be charged thereon.
(d) Mandatory Indemnification. Notwithstanding any other provision of
this Agreement, to the extent that Indemnitee has been successful on the
merits in defense of any Proceeding relating in whole or in part to an
Indemnifiable Event or in defense of any issue or matter therein,
Indemnitee shall be indemnified against all Expenses incurred in connection
therewith.
(e) Partial Indemnification. If Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for some or a
portion of Expenses, but not, however, for the total amount thereof, the
Company shall nevertheless indemnify Indemnitee for the portion thereof to
which Indemnitee is entitled.
(f) Prohibited Indemnification. No indemnification pursuant to this
Agreement shall be paid by the Company on account of any Proceeding in
which judgment is rendered against Indemnitee for an account of profits
made from the purchase or sale by Indemnitee of securities of the Company
pursuant to the provisions of Section 16(b) of the Securities Exchange Act
of 1934, as amended, or similar provisions of any federal, state, or local
laws, or in the event Indemnitee is found in the applicable Proceeding to
have committed gross negligence or reckless disregard of his or her
fiduciary obligations under Delaware law.
3. Reviewing Party.
Prior to any Change in Control, the Reviewing Party shall be any
appropriate person or body consisting of a member or members of the Board
or any other person or body appointed by the Board who is not a party to
the Proceeding at issue; after a Change in Control, the Reviewing Party
shall be the Independent Counsel referred to below. With respect to all
matters arising after a Change in Control (other than a Change in Control
approved by a majority of directors on the Board who were directors
immediately prior to such Change in Control) concerning the rights of
Indemnitee to indemnity payments and Expense Advances under this Agreement
or any other agreement or under applicable law or the Company's Articles of
Incorporation or By-laws now or
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hereafter in effect relating to indemnification for Indemnifiable Events,
the Company shall seek advice only from Independent Counsel selected by
Indemnitee and approved by the Company (which approval shall not be
unreasonably withheld), and who has not otherwise performed services for
the Company or the Indemnitee (other than in connection with
indemnification matters) within the last five years. The Independent
Counsel shall not include any person who, under the applicable standards of
professional conduct then prevailing, would have a conflict of interest in
representing either the Company or Indemnitee in an action to determine
Indemnitee's rights under this Agreement. Such counsel, among other things,
shall render its written opinion to the Company and Indemnitee as to
whether and to what extent the Indemnitee should be permitted to be
indemnified under applicable law. The Company agrees to pay the reasonable
fees of the Independent Counsel and to indemnify fully such counsel against
any and all expenses (including attorneys' fees), claims, liabilities, loss
and damages arising out of or relating to this Agreement or the engagement
of Independent Counsel pursuant hereto.
4. Indemnification Process and Appeal.
(a) Indemnification Payment. Indemnitee shall be entitled to
indemnification of Expenses, and shall receive payment thereof, from the
Company in accordance with this Agreement as soon as practicable after
Indemnitee has made written demand on the Company for indemnification,
unless the Reviewing Party has given a written opinion to the Company that
Indemnitee is not entitled to indemnification under applicable law.
(b) Suit to Enforce Rights. Regardless of any action by the Reviewing
Party, if Indemnitee has not received full indemnification within thirty
days after making a demand in accordance with Section 4(a), Indemnitee
shall have the right to enforce its indemnification rights under this
Agreement commencing litigation in any court in the State of [New York]
having subject matter jurisdiction thereof and in which venue is proper
seeking an initial determination by the court or challenging any
determination by the Reviewing Party or any aspect thereof. The Company
hereby consents to service of process and to appear in any such proceeding.
Any determination by the Reviewing Party not challenged by the Indemnitee
shall be binding on the Company and Indemnitee. The remedy provided for in
this Section 4 shall be in addition to any other remedies available to
Indemnitee in law or equity.
(c) Defense to Indemnification, Burden of Proof, and Presumptions. It
shall be a defense to any action brought by Indemnitee against the Company
to enforce this Agreement (other than an action brought to enforce a claim
for Expenses incurred in defending a Proceeding in advance of its final
disposition that it is not permissible under applicable law or under this
Agreement for the Company to indemnify Indemnitee for the amount claimed.
In connection with any such action or any determination by the Reviewing
Party or otherwise as to whether Indemnitee is entitled to be indemnified
hereunder, the burden of proving such a defense or determination shall be
on the Company. Neither the failure of the Reviewing Party or the Company
(including its Board, independent legal counsel, or its stockholders) to
have made a determination prior to the commencement of such action by
Indemnitee that indemnification of the claimant is proper under the
circumstances because he has met the standard of conduct set forth in
applicable law, nor an actual determination by the Reviewing Party or
Company (including its Board, independent legal counsel, or its
stockholders) that the Indemnitee had not met such applicable standard of
conduct, shall be a defense to the action or create a presumption that the
Indemnitee has not met the applicable standard of conduct. For purposes of
this Agreement, the termination of any claim,
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action, suit, or proceeding, by judgment, order, settlement (whether with
or without court approval), conviction, or upon a plea of nolo contendere,
or its equivalent, shall not create a presumption that Indemnitee did not
meet any particular standard of conduct or have any particular belief or
that a court has determined that indemnification is not permitted by
applicable law.
5. Indemnification for Expenses Incurred in Enforcing Rights.
The Company shall indemnify Indemnitee against any and all Expenses
that are incurred by Indemnitee in connection with any action brought by
Indemnitee for (i) indemnification of Expenses by the Company under this
Agreement or any other agreement or under applicable law or the Company's
Articles of Incorporation or By-laws now or hereafter in effect relating to
indemnification for Indemnifiable Events, and/or (ii) recovery under
directors' and officers' liability insurance policies maintained by the
Company, but only in the event that Indemnitee ultimately is determined to
be entitled to such indemnification or insurance recovery, as the case may
be. In addition, the Company shall, if so requested by Indemnitee, advance
the foregoing Expenses to Indemnitee, subject to and in accordance with
Section 2(c).
6. Notification and Defense of Proceeding.
(a) Notice. Promptly after receipt by Indemnitee of notice of the
commencement of any Proceeding, Indemnitee will, if a claim in respect
thereof is to be made against the Company under this Agreement, notify the
Company of the commencement thereof; but the omission so to notify the
Company will not relieve it from any liability that it may have to
Indemnitee, except as provided in Section 6(c).
(b) Defense. With respect to any Proceeding as to which Indemnitee
notifies the Company of the commencement thereof, the Company will be
entitled to participate in the Proceeding at its own expense and except as
otherwise provided below, to the extent the Company so wishes, it may
assume the defense thereof with counsel reasonably satisfactory to
Indemnitee. After notice from the Company to Indemnitee of its election to
assume the defense of any Proceeding, the Company will not be liable to
Indemnitee under this Agreement or otherwise for any Expenses subsequently
incurred by Indemnitee under this Agreement except as otherwise provided
below. Indemnitee shall have the right to employ his own counsel in such
Proceeding, but all Expenses related thereto incurred after notice from the
Company of its assumption of the defense shall be at Indemnitee's expense
unless: (i) the employment of counsel by Indemnitee has been authorized by
the Company, (ii) Indemnitee has reasonably determined that there may be a
conflict of interest between Indemnitee and the Company in the defense of
the Proceeding and such determination has been affirmed by any then
existing Independent Counsel, (iii) after a Change in Control (other than a
Change in Control approved by a majority of the directors on the Board who
were directors immediately prior to such Change in Control), the employment
of counsel by Indemnitee has been approved by the Independent Counsel, or
(iv) the Company shall not in fact have employed counsel to assume the
defense of such Proceeding, in each of which case all Expenses of the
Proceeding shall be borne by the Company. The Company shall not be entitled
to assume the defense of any Proceeding brought by or on behalf of the
Company or as to which Indemnitee shall have made the determination
provided for in (ii) above.
(c) Settlement of Claims. The Company shall not be liable to indemnify
Indemnitee under this Agreement or otherwise for any amounts paid in
settlement of any Proceeding effected without the Company's written
consent, provided, however, that if a Change in Control has occurred (other
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than a Change in Control approved by a majority of the directors on the
Board who were directors immediately prior to such Change in Control), the
Company shall be liable for indemnification of Indemnitee for amounts paid
in settlement if the Independent Counsel has approved the settlement. The
Company shall not settle any Proceeding in any manner that would impose any
penalty or limitation on Indemnitee without Indemnitee's written consent.
Neither the Company nor Indemnitee will unreasonably withhold their consent
to any proposed settlement. The Company shall not be liable to indemnify
Indemnitee under this Agreement with regard to any judicial award if the
Company was not given a reasonable and timely opportunity, at its expense,
to participate in the defense of such action; the Company's liability
hereunder shall not be excused if participation in the Proceeding by the
Company was barred by this Agreement.
7. Establishment of Trust.
In the event of a Change in Control (other than a Change in Control
approved by a majority of the directors on the Board who were directors
immediately prior to such Change in Control) the Company shall, upon
written request by Indemnitee, create a Trust for the benefit of Indemnitee
and from time to time upon written request of Indemnitee shall fund the
Trust in an amount sufficient to satisfy any and all Expenses reasonably
anticipated at the time of each such request to be incurred in connection
with investigating, preparing for, participating in, and/or defending any
Proceeding relating to an Indemnifiable Event. The amount or amounts to be
deposited in the Trust pursuant to the foregoing funding obligation shall
be determined by the Reviewing Party. The terms of the Trust shall provide
that (i) the Trust shall not be revoked or the principal thereof invaded,
without the written consent of Indemnitee, (ii) the Trustee shall advance,
within ten business days of a request by Indemnitee, any and all Expenses
to Indemnitee (and Indemnitee hereby agrees to reimburse the Trust under
the same circumstances for which Indemnitee would be required to reimburse
the Company under Section 2(c) of this Agreement), (iii) the Trust shall
continue to be funded by the Company in accordance with the funding
obligation set forth above, (iv) the Trustee shall promptly pay to
Indemnitee all amounts for which Indemnitee shall be entitled to
indemnification pursuant to this Agreement or otherwise, and (v) all
unexpended funds in the Trust shall revert to the Company upon a final
determination by the Reviewing Party or a court of competent jurisdiction,
as the case may be, that Indemnitee has been fully indemnified under the
terms of this Agreement. The Trustee shall be chosen by Indemnitee. Nothing
in this Section 7 shall relieve the Company of any of its obligations under
this Agreement. All income earned on the assets held in the Trust shall be
reported as income by the Company for federal, state, local, and foreign
tax purposes. The Company shall pay all costs of establishing and
maintaining the Trust, and shall indemnify the Trustee against any and all
expenses (including attorneys' fees), claims, liabilities, loss, and
damages arising out of or relating to this Agreement or the establishment
and maintenance of the Trust.
8. Non-Exclusivity.
The rights of Indemnitee hereunder shall be in addition to any other
rights Indemnitee may have under the Company's Certificate of
Incorporation, By-laws, applicable law, or otherwise. To the extent that a
change in applicable law (whether by statute or judicial decision) permits
greater indemnification by agreement than would be afforded currently under
the Company's Certificate of Incorporation, By-laws, applicable law, or
this Agreement, it is the intent of the parties that Indemnitee enjoy by
this Agreement the greater benefits so afforded by such change.
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9. Liability Insurance.
To the extent the Company maintains an insurance policy or policies
providing directors' and officers' liability insurance, Indemnitee shall be
covered by such policy or policies, in accordance with its or their terms,
to the maximum extent of the coverage available for any Company director or
officer.
10. Period of Limitations.
No legal action shall be brought and no cause of action shall be
asserted by or on behalf of the Company or any affiliate of the Company
against Indemnitee, Indemnitee's spouse, heirs, executors, or personal or
legal representatives after the expiration of two years from the date of
accrual of such cause of action, or such longer period as may be required
by state law under the circumstances. Any claim or cause of action of the
Company or its affiliates shall be extinguished and deemed released unless
asserted by the timely filing of a legal action within such period;
provided, however, that if any shorter period of limitations is otherwise
applicable to any such cause of action, the shorter period shall govern.
11. Retroactivity.
This Agreement shall be deemed to have been in effect during all
periods that Indemnitee was an officer or director of the Company,
regardless of the date of this Agreement.
12. Amendment of this Agreement.
No supplement, modification, or amendment of this Agreement shall be
binding unless executed in writing by both of the parties hereto. No waiver
of any of the provisions of this Agreement shall be binding unless in the
form of a writing signed by the party against whom enforcement of the
waiver is sought, and no such waiver shall operate as a waiver of any other
provisions hereof (whether or not similar), nor shall such waiver
constitute a continuing waiver. Except as specifically provided herein, no
failure to exercise or any delay in exercising any right or remedy
hereunder shall constitute a waiver thereof.
13. Subrogation.
In the event of payment under this Agreement, the Company shall be
subrogated to the extent of such payment to all of the rights of recovery
of Indemnitee, who shall execute all papers reasonably required and shall
do everything that may be reasonably necessary to secure such rights,
including the execution of such documents necessary to enable the Company
effectively to bring suit to enforce such rights.
14. No Duplication of Payments.
The Company shall not be liable under this Agreement to make any
payment in connection with any claim made against Indemnitee to the extent
Indemnitee has otherwise received payment (under any insurance policy,
By-law, or otherwise) of the amounts otherwise indemnifiable hereunder.
15. Binding Effect.
This Agreement shall be binding upon and inure to the benefit of and
be enforceable by the parties hereto and their respective successors
(including any direct or indirect successor by purchase, merger,
consolidation, or otherwise to all or substantially all of the business
and/or assets of the Company), assigns, spouses, heirs, and personal and
legal representatives. The Company
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shall require and cause any successor (whether direct or indirect by
purchase, merger, consolidation, or otherwise) to all, substantially all,
or a substantial part, of the business and/or assets of the Company, by
written agreement in form and substance satisfactory to Indemnitee,
expressly to assume and agree to perform this Agreement in the same manner
and to the same extent that the Company would be required to perform if no
such succession had taken place. The indemnification provided under this
Agreement shall continue as to Indemnitee for any action taken or not taken
while serving in an indemnified capacity pertaining to an Indemnifiable
Event even though he may have ceased to serve in such capacity at the time
of any Proceeding.
16. Severability.
If any provision (or portion thereof) of this Agreement shall be held
by a court of competent jurisdiction to be invalid, void, or otherwise
unenforceable, the remaining provisions shall remain enforceable to the
fullest extent permitted by law. Furthermore, to the fullest extent
possible, the provisions of this Agreement (including, without limitation,
each portion of this Agreement containing a provision held to be invalid,
void, or otherwise unenforceable, that is not itself invalid, void or
unenforceable) shall be construed so as to give effect to the intent
manifested by the provision held invalid, void, or unenforceable.
17. Governing Law.
This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Delaware applicable to contracts
made and to be performed in such State without giving effect to the
principles of conflicts of laws.
18. Notices.
All notices, demands, and other communications required or permitted
hereunder shall be made in writing and shall be deemed to have been duly
given if delivered by hand, against receipt, or mailed, postage prepaid,
certified or registered mail, return receipt requested, and addressed as
follows:
COMPANY: WITCO CORPORATION
ATTENTION: Chairman of the Board
One American Lane
Greenwich, CT 06831
With copy to: WITCO CORPORATION
ATTENTION: General Counsel
One American Lane
Greenwich, CT 06831
INDEMNITEE:
Notice of change of address shall be effective only when done in accordance
with this Section. All notices complying with this Section shall be deemed to
have been received on the earlier of the date of delivery or on the third
business day after mailing.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and
as of the day and year first above written.
WITCO CORPORATION,
By ..................................
NAME:
TITLE:
[INDEMNITEE]
By ..................................
NAME:
TITLE:
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