<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT OF SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. 1)
Filed by the Registrant /X/
Filed by the Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/X/ Definitive Additional Materials
/ / Soliciting Material pursuant to 240.14a-11(c) or 240.14a-12
/ / Confidential, for use of the Commission Only (as permitted by Rule
14a-6(e)(2)
RESOURCE GENERAL CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Statement)
- --------------------------------------------------------------------------------
Payment of Filing Fee (Check the appropriate box):
/ / $125 per Exchange Act Rulers 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)(3).
/ / 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 rule 0-11 (Set forth
the amount on which the filing fee is calculated and state how
it was determined):
_______________________________________________________________
(4) Proposed maximum aggregate value of transaction:
_______________________________________________________________
(5) Total fee paid:
_______________________________________________________________
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify 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:
(4) Date Filed:
<PAGE> 2
RESOURCE GENERAL CORPORATION
2365 Scioto Harper Drive
Columbus, Ohio 43204
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 28, 1996
at 5:00 PM
To the Shareholders of
RESOURCE GENERAL CORPORATION
The annual meeting of the shareholders of Resource General Corporation
will be held at 2365 Scioto Harper Drive, Columbus, Ohio 43204 on May 28, 1996
at 5:00 PM for the purpose of Amending the Articles of Incorporation, Amending
the Code of Regulations and electing directors, Robert S. Ryan, Charles T.
Sherman and Howard Daniel Smith for a term of three years and for the
transaction of such other business as may come before the meeting.
The Board of Directors has fixed the close of business on April 28,
1996, as the record date for the determination of shareholders entitled to
notice and to vote at the annual meeting or any adjournment thereof.
By Order of the Board of Directors
of Resource General Corporation
Candace Brownfield, Secretary
May 10, 1996
Columbus, Ohio
- -----------------------------------------------------------------------------
YOUR VOTE IS IMPORTANT
IN ORDER TO ASSURE YOUR REPRESENTATION AT THE MEETING AND TO AVOID THE
POSSIBLE EXPENSE OF ADDITIONAL PROXY SOLICITATION, YOU ARE ASKED TO PLEASE
DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE. IF YOU
ATTEND THE MEETING, THE PROXY WILL NOT BE USED, IF YOU SO REQUEST.
- -----------------------------------------------------------------------------
<PAGE> 3
RESOURCE GENERAL CORPORATION
2365 Scioto Harper Drive
Columbus, Ohio 43204
PROXY STATEMENT
for the
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD THURSDAY, MAY 28, 1996
May 10, 1996
The Annual Meeting of the Shareholders of Resource General Corporation (the
"Company") will be held on May 28, 1996 (the "Annual Meeting"), for the purposes
set forth in the accompanying Notice of Annual Meeting of Shareholders. The
Company expects that this proxy statement and the accompanying form of proxy
will be mailed to each shareholder of record on or about May 10, 1996. This
proxy statement is furnished in connection with the solicitation by the
Company's Board of Directors (the "Board") of proxies to be used at such
meeting and at any adjournment thereof. The Company's Annual Report for the
year ended December 31, 1995, is being mailed to all shareholders together with
this proxy.
Enclosed with this proxy statement is a second proxy statement (the "Special
Meeting Proxy Statement") furnished by the Company in connection with its
solicitation of proxies to be used for the Special Meeting of Shareholders of
the Company to be held on May 28, 1996, and at any adjournment thereof (the
"Special Meeting"). The Company intends to hold the Special Meeting immediately
after the conclusion of the Annual Meeting.
The Special Meeting has been called by the Board of Directors of the Company in
accordance with the Ohio general corporation law as a result of the execution
of two stock purchase agreements (the "Proposed Acquisitions") by certain
officers of PH Hydraulics and Automation, Inc., a wholly-owned subsidiary of
the Company, and other individuals, the consummation of which will give them
more than 50% beneficial ownership of the Company's Common Stock. The Proposed
Acquisitions are described in greater detail in "Proposed Change in Control
Transactions" herein on pages 7, 8 and 9 and in the Special Meeting Proxy
Statement. Under applicable law, the Proposed Acquisitions are subject to
shareholder approval and the Board of Directors has called the Special Meeting
for this purpose.
A proxy for use at the Annual Meeting is enclosed. Any proxy given may be
revoked by a shareholder at any time before it is exercised by filing with the
Company a notice in writing revoking it or by duly executing a proxy bearing a
later date. Proxies also may be revoked by any shareholder present at the
Annual Meeting who expresses a desire to vote his or her shares in person.
Subject to such revocation and except as otherwise stated herein or in the form
of proxy, all proxies duly executed and received prior to, or at the time of,
the Annual Meeting will be voted in accordance with the specifications of the
proxies. If no specification is made, proxies will be voted for the amendments
to the Articles of Incorporation, for the amendments to the Code of Regulations
and the nominees for election of directors set forth herein (see "Amendments"
and "Election of Directors"), and at the discretion of policyholders on all
other matters that may properly be brought before the Annual Meeting or any
adjournment thereof.
OUTSTANDING SHARES AND VOTING RIGHTS
OUTSTANDING SHARES
There were 1,085,820 shares of the Company's Common Stock, issued and
outstanding on April 28, 1996, which date has been set as the record date for
the purpose of determining shareholders entitled to notice of, and to vote at,
the Annual Meeting.
VOTING RIGHTS
On any matter submitted to a shareholder vote, each holder of Common Stock will
be entitled to one vote, in person or by proxy, for each share of Common Stock
registered in his or her name on the books of the Company as of the record
date. Under Ohio law and the Company's Code of Regulations, the aggregate
number of votes entitled to be cast by all stockholders present in person or
represented by proxy at the meeting, whether those shareholders vote for,
against or abstain from voting on any matter, will be counted for purposes of
determining the minimum number of affirmative votes required for approval of
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<PAGE> 4
such matters, and the total number of votes cast for each of these matters will
be counted for purposes of determining whether sufficient votes have been cast.
Abstentions, withheld votes and broker non-votes with respect to a matter by a
shareholder present in person or represented by proxy at the Annual Meeting
will have the same legal effect as a vote against the matter.
CUMULATIVE VOTING
If notice in writing is given by any shareholder to the President, Vice
President, or the Secretary of the Company, not less than forty-eight (48)
hours before the time fixed for the holding of the Meeting, that such
shareholder desires that the voting with respect to the election of directors
shall be cumulative, and if an announcement of the giving of such notice is
made upon the convening of the Meeting by the Chairman or Secretary of the
Meeting, or by or on behalf of the shareholder giving such notice, each
shareholder shall have the right to cumulate such voting power as he possesses
at such election. Under cumulative voting, a shareholder may cast for any one
nominee or distribute among any two or more nominees as the shareholder may
elect, or in the case of proxies as the proxy may elect. In the event of
cumulative voting, the proxy holders designated by the Board of Directors will
distribute the votes or shares subject to proxies they hold so as to elect the
maximum number of nominees for director on the slate intended to be nominated.
The enclosed proxy card does not provide for cumulative voting. If any
shareholder wishes to require cumulative voting for the election of directors,
that shareholder or proxy appointed by the shareholder must follow the
procedure described above, which requires attendance at the meeting by the
shareholder or the proxy holder.
If a shareholder withholds authority to vote for one or more nominees, in the
event of cumulative voting, none of the votes of that shareholder may be
cumulated for such nominee or nominees by the proxy holder.
ELECTION OF DIRECTORS
A slate of three directors is to be elected at the Annual Meeting. The Board
has nominated the persons set forth below for election as directors of the
Company at the Annual Meeting. All of the nominees are currently serving as
directors of the Company. Information concerning the slate and the remaining
members of the Board is set forth in the table on page 4. The Code of
Regulations of the Company provides for a Board of Directors of not less than
three (3) and no more than nine (9) persons. The Code of Regulations further
provides that the number of directors may be fixed from time to time by the
shareholders or directors, but that no reduction in the number of directors
shall remove any director prior to the expiration of his term of office.
NOMINATION OF DIRECTORS
Nomination for the election of directors may be made by the Board or a
committee appointed by the Board or by any shareholder entitled to vote in the
lection of directors generally. A shareholder may nominate one or more persons
for election of director by giving written notice of his or her intent to make
such nomination by personal delivery or by United States Mail, postage
pre-paid, to the Secretary of the Company, not later than the
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<PAGE> 5
DIRECTORS
<TABLE>
<CAPTION>
First Elected
Current Position Or appointed
Name Age with the Company a Director Current Term
---- --- ---------------- - --------------- ------------
<S> <C> <C> <C> <C>
NOMINEES
Robert S. Ryan 73 Director; Acting President of the Company; 1985 1993-1996
Chairman of Executive Committee
Charles T. Sherman 50 Vice President-Operations of the Company; 1987 1993-1996
Director; President of PH Hydraulics
Automation Inc.; member of Finance Committee;
member of Executive Committee
Howard Daniel Smith 63 Director; Chairman of Finance Committee; 1985 1993-1996
member of Executive Committee; member of
Management & Compensation Committee
OTHER DIRECTORS
Bob Binsky 56 Director; member of Finance Committee; 1993 1994-1997
Member of Management & Compensation
Committee
Lyman Brownfield 83 Chairman Emeritus of the Company: Member 1964 1994-1997
of Audit Committee
Donald S. Boston, Jr. 53 Director, Chairman Audit Committee; Member 1991 1995-1998
of Management & Compensation Committee
Richard R. Corna 67 Director; Member of Audit Committee 1985 1995-1998
Terry L. Sanborn 53 Director; Chairman of Management & 1991 1995-1998
Compensation Committee; Member of
Executive Committee
</TABLE>
5
<PAGE> 6
close of business on the seventh day following the date on which shareholders
are first given notice of the meeting at which directors are to be elected.
Each such notice shall set forth: 1) the name and address of the person or
persons to be nominated; 2) a representation that the shareholder is a holder
of record entitled to vote at such meeting and intends to appear in person or
proxy at the meeting to nominate the person or persons specified in the notice;
3) a description of all arrangements or understandings between the shareholder
and each nominee and any other person or persons (naming such person or
persons) pursuant to which the nomination or nominations are to be made by the
shareholder; 4) such information regarding each nominee proposed by the
stockholder as would be required to be included in a proxy statement filed
pursuant to the proxy rules of the Securities & Exchange Commission, had the
nominee been nominated, or intended to be nominated , by the Board; and 5) the
consent of each nominee to serve as a director of the Company, if so elected.
The Chairman of the meeting may refuse to acknowledge the nomination of any
person not made in compliance with the foregoing procedure.
BOARD OF DIRECTORS
The Board held six meetings during the fiscal year ended December 31, 1995.
Prior to August 1988, the directors did not receive compensation as directors.
During 1995, the directors and secretary were paid $425 if they attended Board
Meetings. Committee members were paid $175 for each meeting attended, but
payment is limited to two meetings per quarter. The Board has standing
Committees.
The Audit Committee consists of Donald S. Boston, Jr. (Chairman), Lyman
Brownfield and Richard R. Corna. The Audit Committee's responsibilities
include reviewing potential conflicts of interest, monitoring internal controls
and financial reporting, selecting the Company's independent accountants and
making recommendations concerning these matters to the Board. The Audit
Committee met one time in 1995.
The Compensation Committee consists of Terry L. Sanborn (Chairman), Bob Binsky,
and Robert S. Ryan. The purpose of this committee is to review and report to
the Board on specific compensation matters for officers; and administers the
Company's Employees' Incentive Stock Option Plan (see "Employees' Incentive
Stock Option Plan" on page 7 of this Proxy Statement. This Committee met two
times in 1995. The Compensation Committee was merged with the Management
Committee on September 19, 1995.
BUSINESS EXPERIENCE
BOB BINSKY has been President of TR Sport, Inc. since 1986 and is Executive
Vice President and a Director of Cable Link, Inc. He also serves as a director
of Kahiki Restaurants.
DONALD S. BOSTON, JR. has served as the Administrative Vice President of
Ashland Chemical Company since 1982.
LYMAN BROWNFIELD is an attorney in private practice in Columbus, Ohio. Mr.
Brownfield also serves as a director of Acuere Images, Inc., Hole in One
Incentive Gift Club, Inc. and Wondernet Digital Communications, Inc. He also
served as a director of Piemonte Foods from 1973 to 1995.
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<PAGE> 7
RICHARD R. CORNA retired in 1995 as a general contractor in the construction
industry. He was President of Richard R. Corna Builders, Inc. for 47 years.
ROBERT S. RYAN is a Registered Professional Engineer. Since its founding in
1980, he has been President of Robert S. Ryan & Associates. He also serves as
Acting President of the Company. He is also President, CEO and a director of
USA Fibromyalgia Association.
TERRY L. SANBORN became Vice President of Operations for Medex, Inc. in 1979.
He was promoted to Senior Vice President of Operations in 1991. In 1993 he
assumed the title of Chief Operating Officer of Medex, Inc. Medex is a medical
equipment manufacturer based in Ohio.
CHARLES T. SHERMAN is Vice President of Operations for the Company and
President of PH Hydraulics and Automation, Inc. a wholly owned subsidiary of
the Company. He has served in both positions since 1987.
HOWARD DANIEL SMITH is an architect and real estate developer. He is President
of Smith Associates, an architectural firm since 1981. He is also a director
of Acuere Images, Inc.
CANDACE BROWNFIELD resigned as Secretary of the Company on April 25, 1996.
Formerly an officer of Huntington National Bank, she is the former proprietor
of Troygait Arabian Farms and has acted as a business consultant from 1982 to
the present.
CERTAIN RELATIONSHIPS AND OTHER TRANSACTIONS
To the best of the knowledge and information of Resource, no director or
officer of Resource has any material direct or indirect interest in any
transaction with Resource since December 31, 1994, except those described
below.
To the knowledge of the Company, there is no arrangement of understanding
between any director and any other person or persons pursuant to which such
person was or is to be elected a director of the Company, except that the
present directors and Mr. Brownfield's wife have given irrevocable proxies to
the proxy committee to vote their shares at the Annual Meeting. To the
knowledge of the Company, there is no family relationship between any of the
directors and executive officers, except that Candace Brownfield is the
daughter of Lyman Brownfield.
SHARE HOLDINGS OF DIRECTORS AND OFFICERS
The following table sets forth the number and percentage of the outstanding
shares of Common Stock held by each person who, to the knowledge of the
Company, beneficially owns more than 5% of the outstanding shares of Common
Stock, by each of the Company's directors, nominees and executive officers and
by all of the directors and executive officers of the Company as a group.
Except as set forth in the footnotes to the table, the shareholders have sole
voting and investment power over such shares.
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<PAGE> 8
SHARE HOLDINGS OF DIRECTORS AND OFFICERS
<TABLE>
<CAPTION>
Shares Percent of Shares Under Ownership
of Stock Common Option Deemed Assuming
Beneficially Stock Owned Under Exercise
Name Owned Outstanding SEC Rules Of Options
---- ----------- ----------- ---------- ----------
<S> <C> <C> <C> <C>
Lyman Brownfield, Director 254,056(1) 23.4% 15,000 24.8%
341 S. Third Street Suite 10
Columbus, Ohio 43215
Bob Binsky, Director 139,874 12.9% 20,000 14.7%
1973 Corvair Avenue
Columbus, Ohio 43207
Donald S. Boston, Jr., Director 5,000 0.5% 20,000 2.3%
Richard R. Corna, Director 2,700 0.2% 20,000 2.1%
Robert S. Ryan, Director & Officer 10,056 0.9% 20,000 2.8%
Terry L. Sanborn, Director - 0 - 20,000 1.8%
Charles T. Sherman 83,470(2) 7.7% 19,000 9.4%
Director and Officer
2365 Scioto Harper Drive
Columbus, Ohio 43204
Howard Daniel Smith, Director 9,500 0.9% 20,000 2.7%
Candace Brownfield, Secretary 40,000(3) 3.7% 20,000 5.5%
- ------------------------------------------------------------------------------------------------------
All officers and directors 506,656 50.2% 174,000 66.1%
nine (9) persons, including
those named above
<FN>
(1) Includes 254,056 shares owned beneficially and of record by Mr. Brownfield
of which 200,000 shares are assigned as collateral for a loan) and by Mr.
Brownfield's wife, as to the latter of which he disclaims any beneficial
interest.
(2) Includes 14,220 shares owned by Mr. Sherman's parents.
(3) 20,000 shares were transferred to Charlotte Huddle Trustee on January 2,
1996 for which Ms. Brownfield disclaims any beneficial interest.
</TABLE>
PROPOSED CHANGE IN CONTROL TRANSACTIONS
On April 4, 1996, Bob Binsky, Michael W. Gardner, Theodore P. Schwartz, Charles
T. Sherman and Kenneth J. Warren (the "Purchase Group") filed Schedule 13D
under the Securities Exchange Act of 1934 (the "Schedule 13D") to report the
execution of two stock purchase agreements, the consummation of which will give
the Purchase Group control of the Company. Mr. Schwartz, Mr. Sherman and Mr.
Gardner are executive officers of PH Hydraulics and Automation, Inc., a
wholly-owned subsidiary of the Company, and Mr. Binsky and Mr. Sherman are
directors of the Company. As reported in Schedule 13D, the Purchase Group is an
informal association of individuals whose sole business purpose is the
acquisition of the Common Stock of the Company. The Purchase Group may,
however, form an entity to be the actual purchaser of the Common Stock.
Mr. Schwartz and Mr. Sherman entered into an agreement to purchase 200,000
shares of Common Stock (the "Gillmore Shares") from Paul Gillmore on March 25,
1996, as revised on April 3, 1996 (the "Gillmore Agreement"). The purchase
price for the Gillmore Shares is $1.25 per share for an aggregate purchase
price of $250,000. Forty Thousand of the Gillmore Shares will be purchased with
a down payment of $50,000. The purchase of the remaining Gillmore Shares will
be financed by Mr. Gillmore. Mr. Schwartz and Mr. Sherman will execute a
promissory note payable to Mr. Gillmore providing for repayment of the
remaining $200,000 in sixteen quarterly payments. The quarterly payments will
be $6.250 for the first year, $12,500
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<PAGE> 9
for the second and third years and $18.750 for the fourth year. Interest will
be paid on the unpaid balance of the promissory note at the rate of four
percent per annum. Five Thousand Gillmore Shares will be transferred upon each
quarterly payment in the first year, 10,000 Gillmore Shares will be
transferred upon each quarterly payment in the second and third year and
15,000 Gillmore Shares will be transferred upon each quarterly payment in the
fourth year. Mr. Schwartz and Mr. Sherman have also agreed to grant Mr.
Gillmore an option to purchase 20,000 shares of Common Stock. The voting power
of all of the Gillmore Shares will be transferred to Mr. Schwartz and Mr.
Sherman upon payment of the down payment and execution of the promissory note.
Mr. Schwartz and Mr. Sherman entered into an agreement to purchase 110,000
shares of Common Stock (the "Brownfield Shares") from Lyman Brownfield, Candace
Brownfield and Charlotte Huddle (the "Brownfield Family") on March 28, 1996, as
revised on April 2, 1996 (the "Brownfield Agreement"). The purchase price for
the Brownfield Shares is $1.25 per share for an aggregate purchase price of
$137,500. Twenty Thousand of the Brownfield Shares will be purchased with a
down payment of $25,000. The purchase of the remaining Brownfield Shares will
be financed by the Brownfield Family. Mr. Schwartz and Mr. Sherman will execute
a promissory note payable to the Brownfield Family providing for repayment of
the remaining $112,500 in twenty quarterly payments. The quarterly payments
will be $2,800 for the first year, $5,625 for the second, third and fourth
years and $8,437.50 for the fifth year. Interest will be paid quarterly on the
unpaid balance of the promissory note at the rate of four percent per annum.
Two Thousand Two Hundred Fifty Brownfield Shares will be transferred upon each
quarterly payment in the first year, 4,500 Brownfield Shares will be
transferred upon each quarterly payment in the second, third and fourth years
and 6,750 Brownfield Shares will be transferred upon each quarterly payment in
the fifth year. The voting power of all of the Brownfield Shares will be
transferred to Mr. Schwartz and Mr. Sherman upon payment of the down payment
and execution of the promissory note. Finally, Mr. Brownfield and Ms.
Brownfield have executed an agreement to vote all shares of Common Stock owned
by them, or with respect to which they have the power to vote, in favor of the
Proposed Acquisitions at the Special Meeting.
Notwithstanding the foregoing, to fund the debt due under the Gillmore
Agreement and the Brownfield Agreement, the Purchaser Group is contemplating
the sale of a portion of its Common Stock to an employee Stock ownership plan
to be formed by the Company.
All payments required under the Gillmore Agreement and the Brownfield Agreement
will be financed with the personal funds of the members of the Purchase Group.
Each member of the Purchase Group has verbally agreed to contribute the
percentage of the total payments shown in the following Table required by the
Gillmore Agreement and the Brownfield Agreement and are entitled to receive a
corresponding percentage of the total number of shares purchased.
Total
Member of Principal
Purchase Group Percentage Payments
-------------- ---------- ---------
Bob Binsky 30.080% $116,560
Michael W. Gardner 5.000% $ 19,375
Theodore P. Schwartz 31.665% $122,702
Charles T. Sherman 31.665% $122,702
Kenneth J. Warren 1.590% $ 6,161
-----------------------------------------------------------
TOTALS 100% $387,500
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<PAGE> 10
The following table shows the Common Stock that is currently beneficially owned
by each member of the Purchase Group, the Common Stock that each member of the
Purchase Group has a right to purchase under the Gillmore Agreement and the
Brownfield Agreement and the aggregate shares of Common Stock that each member
of the Purchase Group will own if all the Common Stock is purchased under the
Gillmore Agreement and the Brownfield Agreement. As of April 28, 1996, there
were 1,086,020 shares of Common Stock issued and outstanding. The bottom line
of the table shows the same information for the Purchase Group as a whole.
<TABLE>
<CAPTION>
CURRENTLY BENEFICIALLY RIGHT TO PURCHASE AGGREGATE
OWNED --------------------------- -------------------------
-----------------------
NAME NUMBER PERCENTAGE NUMBER PERCENTAGE NUMBER PERCENTAGE
<S> <C> <C> <C> <C> <C> <C>
Bob Binsky 159,874 14.7% 93,248.0 8.6% 253,122.0 23.3%
Michael W. 1,000 0.1% 15,500.0 1.4% 16,500.0 1.5%
Gardner
Theodore P. 12,848 1.2% 98,161.5 9.1% 111,009.5 10.2%
Schwartz
Charles T. 102,670 9.5% 98,161.5 9.1% 200,831.5 18.5%
Sherman
Kenneth J. 0 0.0% 4,929.0 0.5% 4,929.0 0.5%
Warren
- ------------------------------------------------------------------------------------------------------------------------------
Total 276,392 25.4% 310,000.0 28.5% 586,392.0 54.0%
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The consummation of the transactions contemplated by the Gillmore Agreement and
the Brownfield Agreement is subject to shareholder approval under Section
1701.831 of the Ohio general corporation law (the "Statute"). In accordance
with the Statute, the purchase of the Gillmore Shares and the Brownfield Shares
must be approved by (i) the holders of a majority of the outstanding voting
shares represented at a special shareholders meeting at which a quorum is
present and (ii) the holders of a majority of the portion of outstanding voting
shares represented at such meeting excluding the voting shares owned by the
Purchase Group and certain "interested shares".
The Board of Directors of the Company has called the Special Meeting to be held
immediately after the Annual Meeting on May 28, 1996 to approve or disapprove
of the Proposed Acquisitions. The Special Meeting is described more fully in
the Special Meeting Proxy Statement enclosed with this proxy statement.
EXECUTIVE COMPENSATION
The following table shows the compensation paid to the highest paid executives
for the 1995, 1994 and 1993 fiscal years:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
CASH CASH
NAME POSITION YEAR SALARY ($) BONUS ($)
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Lyman Brownfield President 1995 56,000 0
1994 96,000 0
1993 96,000 0
</TABLE>
9
<PAGE> 11
<TABLE>
<S> <C> <C> <C> <C>
Charles T. Sherman President, PH 1995 103,041 5,000
Hydraulics and 1994 94,333 15,369
Automation, Inc. 1993 96,666 10,000
Robert S. Ryan Acting President 1995 16,684 0
Resource General 1994 0 0
Corporation 1993 0 0
- ---------------------------------------------------------------------------
</TABLE>
No other executive officers of The Company received total compensation in
excess of $100,000 during 1995, 1994 or 1993. Mr. Lyman Brownfield is a
practicing attorney, in which capacity he and his law office were General
Counsel to the Company through July 31, 1995. He was also President with
respect to which the law office provided the necessary space and administrative
support, for legal services and expenses. Mr. Robert S. Ryan became Acting
President effective August 1, 1995.
Proposal No. 2
AMENDMENTS TO THE ARTICLES OF INCORPORATION
The Company proposes to amend the Articles of Incorporation by deleting the
current Article V and replacing it with the proposed Article V and adding a new
Article VII attached as Exhibit A. The amendment to Article V will bring the
Company's conflict of interest provisions into greater uniformity with Ohio
law. The new Article VII will opt-out of Ohio's very generous provisions
regarding mandatory indemnification of directors. These proposed amendments are
described in more detail below.
A. Article V Regarding Directors and Officers Conflict of Interest
Article V contains provisions regarding directors and officers conflict of
interest. Article V in its current form permits a transaction, contract or act
of the corporation to be enforceable notwithstanding the interest (financial or
otherwise) of a director or officer as long as that interest is known to either
(1) the board of directors or (2) a majority of the board. Similarly, an
interested board member may be counted in determining the existence of a quorum
at any meeting of the board and may vote at the meeting to authorize, ratify or
approve any transaction, contract or act.
In contrast, the Ohio general corporation law provides that, except as
otherwise provided in its Articles of Incorporation, in order for a
transaction, contract or act to be enforceable when directors or officers have
a personal interest in the matter under consideration, one of the following
must apply:
1. The material facts of the director's or officer's relationship or
interest are disclosed or are known to all directors and the directors in
good faith reasonably justified by the disclosed facts, authorize the
transaction, contract or act by the affirmative vote of a majority of the
disinterested directors, or
2. The material facts of the director's or officer's relationship or
interest are disclosed or are known to all shareholders entitled to vote
thereon and the transaction, contract or act is specifically approved at a
shareholders meeting by the affirmative vote of a majority of the
disinterested shareholders, or
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<PAGE> 12
3. The transaction, contract or act is fair as to the corporation as of the
time it is authorized or approved by the directors or the shareholders.
The effect of this amendment will be to make the Company, its directors and
officers subject to the Ohio general corporate law regarding conflicts of
interest, which requires potential conflicts of interest to undergo more
scrutiny than the current Article V. The Company believes the proposed Article V
will benefit shareholders by implementing a more rigorous evaluation of
potential conflicts of interest in any transaction, contract or act in which a
director or officer has a relationship or interest.
Proposal No. 3
B. Article VII Regarding Indemnification
Ohio general corporate law provides that, unless an Ohio corporation's
Articles of Incorporation otherwise provide, the corporation is required to
advance expenses to a director that are incurred in defending any action, so
long as the director agrees (i) to repay such advancements if it is proved by
clear and convincing evidence that his actions or failure to act involved an
act or omission undertaken with deliberate intent to cause injury to the
corporation or was undertaken with reckless disregard for the best interests of
the corporation, and (ii) to cooperate with the corporation concerning the
action.
The Company believes it is in the best interest of the shareholders to
opt-out of this mandatory advancement of legal fees and expenses and to leave
discretion with the Company's Board of Directors to determine on a case-by-case
basis whether to advance such fees and expenses to a director based upon the
circumstances of the particular suit at the time. For example, the worst case
scenario is for a director to have engaged in a criminal act (e.g., conversion
of corporate funds) and the corporation being required to advance defense costs
which will only be reimbursed by the director if his wrong doing is proved by
clear and convincing evidence.
The effect of proposed Article VII is to opt-out of the mandatory
advancement of legal fees and expenses for directors required under Ohio law.
The Company believes proposed Article VII will benefit shareholders by granting
the Board of Directors the option of advancing legal fees and expenses in
defending an action which can amount to needless and staggering levels in
certain circumstances.
The Company believes that deleting the current Article V and adding Article
VII to the Articles of Incorporation will not have any anti-takeover impact.
The affirmative vote of the holders of a majority of the outstanding shares
of common stock is required to adopt the amendments to the Articles of
Incorporation to delete the current Article V and replace it with the proposed
Article V and to add the new Article VII. The Board of Directors unanimously
recommends a vote FOR adoption of Proposal Nos. 2 and 3.
AMENDMENTS TO THE CODE OF REGULATIONS
Proposal No. 4
The Company proposes that the stockholders adopt amended and restated Code
of Regulations of the Company in the form attached as Exhibit B. The major
purposes of these amendments are to clarify certain provisions of the Code of
Regulations, to bring them into stricter conformity with Ohio law, and to
reflect the current practice of the Company.
11
<PAGE> 13
The amendments contained within the proposed amended and restated Code of
Regulations are discussed in more detail below. Additions to the Code of
Regulations in Exhibit B are highlighted by bold and capitalized letters in the
proposed amended and restated Code of Regulations. Deletions are marked with
brackets.
A. ARTICLE 1 SECTION 1. ANNUAL MEETINGS.
The Annual Meeting Date is being changed from a fiscal year to a calendar
year to conform to the Company's current practice by adding the word May and
deleting the words "January in each year beginning with the year 1981",
This section will read:
The annual meeting of the shareholders for the election of directors, for
the considerations of the reports to be laid before such meeting, and for the
transaction of such other business as may properly come before such meeting,
shall be held on the first Thursday in May or on such other date as may be fixed
by the Board of Directors.
B. ARTICLE I SECTION 5. QUORUM.
An editorial change is being made to clarify the meaning of the sentence by
adding the words, "who are" in the first sentence after "...then outstanding and
entitled to vote...".
The first part of the first paragraph of this Section will read:
At any meeting of shareholders the holders of a majority of the common
shares of the Company then outstanding and entitled to vote who are present in
person or represented by proxy, shall constitute a quorum for all purposes, but
no action required by law or by the Articles of Incorporation to be authorized
or taken by the...
C. ARTICLE II COMPENSATION OF DIRECTORS.
A change is being made to more fully explain the responsibility of the
Directors by adding the words, "financial or" to this section after "...of those
in office, and irrespective of any...".
The Section will read:
By the affirmative vote of a majority of those in office, and irrespective
of any financial or personal interest of any of them the Directors shall have
authority to establish reasonable compensation, which may include pension,
disability and death benefits, for services to the Company by Directors and
officers, or to delegate such authority to one or more officers or Directors.
D. ARTICLE III SECTION 4. SECRETARY.
Ohio law does not require a seal. Therefore, a change is being made to
eliminate the requirement to keep the seal and the instructions for affixing it
by deleting the words, "...having custody of the seal of the Company and, when
so ordered by the Directors, shall affix the same to any instrument or document
which requires the seal...".
The Section will read:
The Secretary shall: keep books for the transfer of shares and keep the
share certificate book, the stock register and such other books and records as
may be necessary in order to keep an accurate record of shareholders; keep
minutes of all proceedings of the shareholders and Directors; give notices for
the Company; issue and attest all certificates of shares; and in general perform
all the duties usually incident to such office or which may be
12
<PAGE> 14
assigned by the shareholders of Directors.
E. ARTICLE III SECTION 8. CONTRACTS, CHECKS, NOTES AND OTHER INSTRUMENTS.
A change is being made to increase the security of checks. The number of
signatures on each check is being increased to two by adding the words, "at
least two authorized persons." after the words, "...All checks shall be signed
by ... And deleting the phrases, either the President or the Secretary and
without the necessity of countersignature." and "...singly and without necessity
of countersignature, ...".
The Section will read:
All contracts, agreements and notes authorized by the Board of Directors
shall, unless otherwise directed by the Board of Directors or unless otherwise
required by law, be signed by the President or the Secretary. All checks shall
be signed by at least two authorized persons. The Board of Directors may,
however, authorize other officers to sign checks, drafts and orders for the
payment of money, and may designate different combinations of officers and
employees who may, in the name of the Company, execute checks, drafts,
contracts, agreements and other instruments in its behalf.
F. ARTICLE IV SECTION 2. LOST, MUTILATED OR DESTROYED CERTIFICATES.
A change is being made to provide additional reasons for issuing a new
certificate by adding the word "stolen" after, "if any certificate for shares is
lost,...".
The Section will read:
If any certificate for shares is lost, stolen, mutilated or destroyed, the
Board of Directors may authorize the issue of a new certificate in place thereof
upon such terms and conditions as it may deem advisable. The Board of Directors
in its discretion may refuse to issue such new certificates until the Company
has been indemnified to its satisfaction and until it is protected to its
satisfaction by a final order or decree of a court of competent jurisdiction.
G. ARTICLE V SECTION 2. FISCAL YEAR.
The fiscal year is being changed to a calendar year to conform to the
Company's practice by deleting the date, "September 30" and adding the date,
"December 31".
The Section will read:
The fiscal year of the company shall end on December 31 of each year, or on
such other days as may be fixed from time to time by the Board of Directors.
H. ARTICLE V SECTION 3. AMENDMENTS.
A change is being made to clarify how amendments may be made by deleting
the words, "by the writing" and adding the words, "without a meeting by the
written consent...".
The Section will read:
This Code of Regulations or any Article or Section thereof may be adopted,
changed, repealed, or amended without a meeting by the written consent of the
holders of two-thirds of the shares entitled to vote upon such proposal at a
meeting held for that purpose.
The affirmative vote of the holders of a majority of the outstanding shares
of common stock is required to adopt the amended and restated Code of
Regulations. The Board of Directors unanimously recommends a vote FOR adoption
of Proposal No. 4, the amended and restated Code of Regulations.
13
<PAGE> 15
EMPLOYEES' INCENTIVE STOCK OPTION PLAN
At the special meeting of the shareholders held on November 12, 1988, the
shareholders approved an Employees' Incentive Stock Option plan providing
options for 25,000 shares. Options granted to employees under the plan are to
be at the market price on the day of the grant, except that if options are
granted to employees with existing SHARE HOLDINGS of 10% or more, the option
price must be 110% of the then market price. To date, no options have been
granted.
CERTAIN INFORMATION
Greene & Wallace serves as the independent certified public accountant for the
Company. A representative of Greene & Wallace will be present at the Annual
Meeting, will have an opportunity to make a statement, if he so desires, and
will be available to respond to appropriate questions.
SHAREHOLDERS PROPOSALS
Any proposals of shareholders which are intended to be presented at the next
annual meeting of shareholders must be received by the Company at its principal
executive offices by December 2, 1996. Such proposals may be included in next
year's proxy statement if they comply with certain rules and regulations
promulgated by the Securities and Exchange Commission.
EXPENSES OF SOLICITATION
The entire expenses of preparing, assembling, printing and mailing the proxy
form and the form of material used in the solicitation of proxies will be paid
by the Company. The Company does not expect to pay any compensation for the
solicitation of proxies.
OTHER MATTERS
The Board knows of no other matters to be presented at the Annual Meeting. If
any other matter is properly brought before the Annual Meeting, it is the
intention of the persons named in the proxy to vote in their discretion upon
such matters in accordance with their judgement.
You are urged to sign, date and return the enclosed proxy in the envelope
provided. No postage is required if the envelope is mailed within the United
States. If you subsequently
14
<PAGE> 16
decide to attend the Annual Meeting and wish to vote your shares in person, you
may do so. Your cooperation in giving this matter your prompt attention is
appreciated.
BY ORDER OF THE BOARD OF DIRECTORS
CHARLES T. SHERMAN, SECRETARY
15
<PAGE> 17
EXHIBIT A
---------
PROPOSED AMENDMENTS
-------------------
TO
--
ARTICLES OF INCORPORATION
-------------------------
OF
--
RESOURCE GENERAL CORPORATION
----------------------------
The Articles of Incorporation are hereby amended by deleting Article
V, Section C in its entirety and replacing it with the following:
ARTICLE V
C. No person shall be disqualified from being a director of the
corporation because he or she is or may be a party to, and no
director of the corporation shall be disqualified from entering into
any contract or other transaction to which the corporation is or may
be a party. No contract or other transaction to which the corporation
is or may be a party shall be void or voidable for the reason that any
director or officer or other agent of the corporation is a party
thereto, or otherwise has any direct or indirect interest in such
contract or transaction or in any other party thereto, for reason that
any interested director or officer or other agent of the corporation
authorizes or participates in authorization of such contract or
transaction, (a) if the material facts as to such interest are
disclosed or are otherwise known to the Board of Directors at the
time the contract or transaction is authorized and at least a
majority of the disinterested members vote for or otherwise take
action authorizing such contract or transaction even though such
disinterested directors are less than a quorum, or (b) if the contract
or transaction (i) is not less favorable to the corporation than an
arm's length contract or transaction in which no director or officer
or other agent of the corporation has any interest or (ii) is
otherwise fair to the corporation as of the time it is authorized.
Any interested director may be counted in determining the presence of
a quorum at any meeting of the Board of Directors which
authorizes the contract or transaction.
1
<PAGE> 18
The Articles of Incorporation are hereby emended to add an Article VII
ARTICLE VII
The provisions of Section 1701.13(E)(5)(a) of the Ohio Revised Code
or any statute of like tenor or effect which is hereafter enacted
shall not apply to the corporation. The corporation shall, to the
fullest extent not prohibited by any provision of applicable law other
than Section 1701.13(E)(5)(a) of the Ohio Revised Code or any statute
of like tenor or effect which is hereafter enacted, indemnify each
director and officer against any and all costs and expenses (including
attorney fees, judgements, fines, penalties, amounts paid in
settlement and other disbursements) actually and reasonably incurred
by or imposed upon such person in connection with any action, suit,
investigation or proceeding (or any claim or other matter therein),
whether civil, criminal, administrative or otherwise becomes or is
threatened to be made a party by reason of being or at any time having
been, while such a director or officer, an employee or other agent of
the corporation or, at the direction or request of the corporation, a
director, trustee, officer, administrator, manager employee, adviser
or other agent of or fiduciary for any other corporation, partnership,
trust venture or other entity or enterprise including any employee
benefit plan.
The corporation shall indemnify any other person to the extent such
person shall be entitled to indemnification under Ohio law by reason
of being successful on the merits or otherwise in defense of an action
to which such person is named a party by reason of being an employee
or other agent of the corporation, and the corporation may further
indemnify any such person if it is determined on a case by case basis
by the Board of Directors that indemnification is proper in the
specific case.
Notwithstanding anything to the contrary in these Articles of
Incorporation, no person shall be indemnified to the extent, if any,
it is determined by the Board of Directors or by written opinion of
legal counsel designated by the Board of Directors for such purpose
that indemnification is contrary to applicable law.
2
<PAGE> 19
EXHIBIT B
The Code of Regulations of Resource General Corporation is included in this
Exhibit B in its entirety. The proposed changes can be characterized as
additions and deletions. The additions are shown underlined and all CAPITAL
LETTERS. The deletions are shown in brackets. For example, in ARTICLE I
SECTION 1. ANNUAL MEETINGS. there is a statement ...shall be held on the first
Thursday in MAY [January in each year beginning with the year 1981] ...
1
<PAGE> 20
PROPOSED AMENDMENTS TO CODE OF REGULATIONS
OF
RESOURCE GENERAL CORPORATION
ARTICLE I MEETINGS OF SHAREHOLDERS
-----------------------------------
Section 1. ANNUAL MEETINGS.
---------------
The annual meeting of the shareholders for the election of directors,
for the consideration of the reports to be laid before such meeting, and for
the transaction of such other business as may properly come before such
meeting, shall be held on the first Thursday in MAY [January in each year
beginning with the year 1981] or on such other date as may be fixed by the
Board of Directors.
Section 2. SPECIAL MEETINGS.
----------------
Special meetings of the shareholders shall be held whenever called by
any of the following: President, Chairman of the Board, a majority of the
Directors, and persons who hold at least one-quarter of the outstanding common
shares of the Company.
Section 3. PLACE OF MEETINGS.
-----------------
All meetings of shareholders shall be held at the principal office of
the Company in Ohio, unless otherwise provided by a majority of the directors.
Meetings of the shareholders may be held outside of the State of Ohio.
Section 4. NOTICE OF MEETINGS.
------------------
(A) A written notice stating the time, place and purpose
of every meeting of the shareholders shall be given either by personal delivery
or by mail, not less than seven nor more than sixty days before the date of the
meeting to each shareholder of record entitled to notice of the meeting by, or
at the direction of the President or the Secretary of the Company.
If mailed, such notice shall be addressed to the shareholder at his
address as it
1
<PAGE> 21
appears on the records of the Company.
If any meeting is adjourned to another time or place, no further
notice as to such adjourned meeting need be given other than by announcement at
the meeting at which such adjournment is taken.
(B) Upon request in writing delivered either in person or
by registered mail to the President or the Secretary by any persons entitled to
call a meeting of shareholders, such officer shall forthwith cause to be given
to the shareholders entitled thereto notice of a meeting to be held on a date
not less than seven nor more than sixty days after the receipt of such request,
as such officer may fix. If such notice is not given within fifteen days after
the delivery or mailing of such request, the persons calling the meeting may
fix the time of meeting and give notice thereof as provided in Division (A) of
this section, or cause such notice by any designated representative.
(C) Any shareholder, either before or after any meeting,
may waive any notice required to be given by law or under these regulations;
and whenever all of the shareholders entitled to vote shall meet in person or
by proxy and consent to holding a meeting, it shall be valid for all purposes
without call or notice, and at such meeting any action may be taken.
Section 5. QUORUM.
------
At any meeting of shareholders the holders of a majority of the common
shares of the Company then outstanding and entitled to vote WHO ARE present in
person or represented by proxy, shall constitute a quorum for all purposes, but
no action required by law or by the Articles of Incorporation to be authorized
or taken by the holders of a designated proportion of the shares of any
particular class or of each class, may be authorized or taken by a lesser
proportion.
The holders of a majority of the voting shares represented at a meeting,
whether or
2
<PAGE> 22
not a quorum is present, may adjourn such meeting from time to time.
Section 6. SHAREHOLDERS ENTITLED TO VOTING.
-------------------------------
At each meeting of shareholders every shareholder of record of shares
entitled to vote shall be entitled to such number of votes with respect to each
share standing in his name on the books of the Company on each matter properly
submitted to the shareholders for their vote as the Articles of Incorporation
provide.
Section 7. CUMULATIVE VOTING.
-----------------
If notice in writing is given by any shareholder to the President,
Vice President, or the Secretary of the Company, not less that forty-eight
hours before the time fixed for holding a meeting of the shareholders for the
purpose of electing directors, if notice of such meeting shall have been given
at least ten days prior thereto, and otherwise not less than twenty-four hours
before such time that he desires that the voting at such election shall be
cumulative, and if an announcement of the giving of such notice is made upon
the convening of the meeting by the Chairman or Secretary or by or on behalf of
the shareholder giving such notice, each shareholder shall have the right to
cumulate such voting power as he possesses and to give one candidate as many
votes as the number of his votes equals, or to distribute his votes on the same
principle among two or more candidates, as he sees fit.
Section 8. VOTES NECESSARY.
---------------
At all elections of directors, the candidates receiving the greatest
number of votes shall be elected. All other questions shall be determined by a
majority vote of the shares entitled to vote except where a greater number or
proportion is required by the Ohio Revised Code.
Section 9. PROXIES.
-------
At meetings of the shareholders, any record holder of shares as to
which he is entitled to vote may be represented and may vote by a proxy or
proxies appointed by an instrument
3
<PAGE> 23
in writing if such instrument is filed with the Secretary before the person
holding such proxy votes thereunder. No proxy shall be valid after the
expiration of eleven months after the date of its execution, unless the
shareholder executing it shall have specified thereon the length of time it is
to continue in force.
Section 10. ORDER OF BUSINESS.
-----------------
The order of business at all meetings of shareholders shall be
determined by the presiding officer unless otherwise determined by a vote of a
majority in interest of shareholders entitled to vote who are present in person
or represented by proxy at such meeting.
Section 11. ACTION WITHOUT MEETING.
----------------------
Any action which may be taken at any meeting of shareholders may be
taken without a meeting if authorized by a writing signed by all of the holders
of shares who would be entitled to notice of a meeting for such purpose and who
would be entitled to vote thereat.
ARTICLE II DIRECTORS
---------------------
Section 1. POWERS.
------
Except where the law, the Articles, or these Regulations require
action to be authorized or taken by shareholders, all of the authority of the
Company shall be exercised by, or as directed by the Board of Directors.
Without prejudice to the general powers conferred by or implied in the
preceding section, the Directors, acting as a Board, shall have power:
(A) To fix, define and limit the powers and duties of all
officers and to fix the salaries of all officers;
(B) To appoint, and at their discretion, with or without
cause, to remove, or suspend, such subordinate officers, assistants, managers,
agents and employees as the Directors may from time to time deem advisable, and
to determine their duties and fix their
4
<PAGE> 24
compensation;
(C) To require any officer, agent or employee of the
Company to furnish a bond for faithful performance in such amount and with such
sureties as the Board may approve;
(D) To designate a depository or depositories of the
funds of the Company and the officer or officers or other persons who shall be
authorized to sign notes, checks, drafts, contracts, deeds, mortgages, and
other instruments on behalf of the Company;
(E) To appoint and remove transfer agents and/or
registrars for the Company's shares;
(F) To establish such rules and regulations respecting
the issuance and transfer of shares and certificates for shares as the Board of
Directors may consider reasonable.
Section 2. NUMBER OF DIRECTORS.
-------------------
A Board of not less than 3 nor more than 9 shall be chosen by ballot
at the annual meeting of the shareholders or at any meeting held in lieu
thereof as hereinafter provided. One third of the Directors of this company
shall be elected to three (3) year terms by the shareholders, for each
corporate year, which number shall be fixed by vote at the annual meeting of
shareholders for the first election hereunder to be divided into one, two and
three year terms. The shareholders may, at a special meeting held for that
purpose during any such year, increase or decrease the number of Directors as
thus fixed but no reduction of the number of Directors shall have the effect of
shortening the term of any incumbent director. If the number of Directors to be
elected by the shareholders is increased at any such annual meeting or special
meeting of the shareholders, the additional Director(s) may be elected by the
shareholders at such meeting, or in the event the shareholders shall fail to
elect such additional Directors at such meeting, such additional Directors may
be elected as prescribed
5
<PAGE> 25
in Section 4 hereof. At a meeting of shareholders at which Directors are to be
elected, only persons nominated as candidates shall be eligible for election as
Directors.
Except as otherwise provided in Section 3 hereof, each Director shall
hold office for a term of three (3) years and until his successor is duly
elected and qualified. Directors need not be either residents of the State of
Ohio or shareholders of this Company.
Section 3. REMOVAL OF DIRECTORS.
--------------------
All the Directors, or all the Directors of a particular class, or any
individual Director may be removed from office, without assigning any cause, by
the vote of the holders of shares entitling them to exercise a majority of the
voting power for the election of directors; provided, that unless all the
Directors, or all the Directors of a particular class, are removed, no
individual Director shall be removed in case the votes of a sufficient number
of shares are cast against his removal which, if cumulatively voted at an
election of all the Directors, or all the Directors of a particular class, as
the case may be, would be sufficient to elect at least one Director.
Section 4. VACANCIES.
---------
In case of any vacancy among the Directors, including a vacancy caused
by an increase in the number of Directors at a time other than at the annual
meeting, the remaining Directors, though less than a majority of the whole
authorized number of Directors, by an affirmative vote of the majority thereof,
may elect a Director to fill such vacancy to hold office until the next annual
election and until his successor shall be elected.
Section 5. POWER TO ADOPT BY-LAWS.
----------------------
The Board of Directors may adopt and amend from time to time, By-Laws
for its government, consistent with this Code of Regulations, the Articles of
Incorporation, and the laws of Ohio.
Section 6. MEETINGS.
--------
6
<PAGE> 26
After each annual election of Directors, the Directors shall meet as
soon as practicable for the purpose of organization, the election and
appointment of officers and the transaction of other business. The Directors
shall hold such other meetings from time to time as the Directors may deem
necessary, and such meetings as may from time to time be called by the Chairman
of the Board, President, Vice President or any two Directors. Meetings may be
held at the principal office of the Company or at such other place within or
outside the State of Ohio as a majority of the Directors may, from time to
time, determine. The President or Secretary shall give each Director notice of
each meeting of the Directors either by personal delivery or by mail, telegram,
or cablegram at least two days before the meeting. Notice of the time, place
and purpose of any meeting of the directors may be waived by any Director.
Section 7. COMMITTEES.
----------
The Directors may, from time to time, appoint an Executive Committee
or any other committee of the Directors, to consist of not less than three
Directors, and may delegate to any other committee any of the authority of the
Directors, however conferred, other than that of filling vacancies among the
Directors, or in any committee of the Directors. Any such committee shall at
all times act under the direction and control of the Directors and shall make
reports to the Directors of its acts, which reports shall form a part of the
records of the Company.
Section 8. QUORUM.
------
At all meetings of the Directors, a majority of all the Directors then
in office shall constitute a quorum, but less than such majority may adjourn
the meeting of the Directors from time to time, and at any adjourned meeting
any business may be transacted as if the meeting had been held as originally
called. The Action of a majority of Directors present at
7
<PAGE> 27
any meeting at which there is a quorum shall be the act of the Board of
Directors except as other wise may be provided by law, The Articles, or in the
Code of Regulations.
Section 9. COMPENSATION OF DIRECTORS.
-------------------------
By the affirmative vote of a majority of those in office, and
irrespective of any FINANCIAL OR personal interest of any of them, the
Directors shall have authority to establish reasonable compensation, which may
include pension, disability and death benefits, for services to the Company by
Directors and officers, or to delegate such authority to one or more officers
or Directors.
Section 10. INDEMNIFICATION.
---------------
Each Director, officer and employee, whether or not then in office
(and his heirs, executors and administrators) shall be indemnified by the
Company against cost and expenses (including counsel fees) reasonably incurred
by him, and shall be reimbursed by the Company for any such costs or expenses
paid by him, in connection with any action, suit or proceeding to which he may
be made a party by reason of his being or having been a Director, officer or
employee of the Company or by reason of having served at the request of the
Company as a Director, officer or employee of the Company or by reason of his
having served at the request of the Company as a Director or officer of another
company, except in relation to matters as to which he shall be finally adjudged
in such action, suit or proceeding to have been derelict in the performance of
his duty as such director, officer or employee. The foregoing Qualification
shall not prevent a settlement by the Company prior to final adjudication when
such settlement appears to be in the interest of the Company. The foregoing
right of indemnification shall also cover amounts paid by any director, officer
or employee (or his heirs, executors, or administrators) in settlement of any
such action, suit or proceeding if the Company shall have previously given its
written approval thereof, and shall not be exclusive of other rights to which
any director, officer or employee may be
8
<PAGE> 28
entitled as a matter of law.
Section 11. ACTION OF DIRECTORS WITHOUT A MEETING.
-------------------------------------
Any action which may be authorized or taken at a meeting of the Board
of Directors may be authorized or taken without a meeting in a writing or
writings signed by all of the Directors.
ARTICLE III OFFICERS
---------------------
Section 1. EXECUTIVE OFFICERS.
------------------
The executive officers of the Company shall be a Chairman of the
Board, President, one or more Vice Presidents, a Secretary and a Treasurer, and
such other officers and assistant officers as the Directors may, in their
judgement, consider necessary. The same person may hold any two or more
offices of the Company. Officers may be elected at any time, but as soon as is
convenient after a meeting of shareholders at which a majority of Directors are
elected, the Directors shall hold a meeting at which they shall consider the
election of officers.
Section 2. TENURE OF OFFICERS.
------------------
Any officer may be removed, either with or without cause, at any time,
by the affirmative vote of a majority of all the Directors then in office; such
removal, however, shall be without prejudice to the contract rights of the
person so removed, if any.
Section 3. CHAIRMAN OF THE BOARD AND/OR PRESIDENT.
--------------------------------------
The Chairman of the Board and/or President shall be the active
executive officer of the Company and shall exercise supervision over the
business of the Company and over its several officers, subject, however, to the
control of the Board of Directors. He shall preside at all meetings of
shareholders and, in the absence of, or if a Chairman of the Board shall not
have been elected, the President shall preside at meetings of the Board of
Directors. He shall have authority to sign all certificates for shares and all
deeds,
9
<PAGE> 29
mortgages, bonds, contracts, notes and other instruments requiring his
signature; and shall have all the powers and duties prescribed by the General
Corporation Act and such others as the Board of Directors may from time to time
assign him.
Section 4. SECRETARY.
---------
The Secretary shall: keep books for the transfer of shares and keep
the share certificate book, the stock register and such other books and records
as may be necessary in order to keep an accurate record of shareholders; keep
minutes of all proceedings of the shareholders and Directors; give notices for
the Company; [have custody of the seal of the Company and, when so ordered by
the Directors, shall affix the same to any instrument or document which
requires the seal]; issue and attest all certificates of shares; and in general
perform all the duties usually incident to such office or which may be assigned
by the shareholders or Directors.
Section 5. TREASURER.
---------
The Treasurer shall: have the custody and control of all funds and
securities belonging to the Company, except as otherwise provided by the
Directors, and shall be responsible for all monies and other property of the
Company in his custody; keep accurate accounts of the finances of the Company
and hold the books and records open for inspection and examination of the
Directors and any committee of shareholders appointed for such inspection, and
shall present abstracts of said books and records at annual meetings of
shareholders, or any other meetings requested; and perform all the duties
usually incident to such office or which may be assigned by the shareholders or
Directors. He shall give bond in such sum with such security as the Directors
may require, if any, for the faithful performance of his duties.
Section 6. ASSISTANT AND SUBORDINATE OFFICERS.
----------------------------------
The Board of Directors may appoint such assistant and subordinate
officers as it may
10
<PAGE> 30
deem desirable. Each such officer shall hold office during the pleasure of the
Board of Directors, and perform such duties as the Board of directors may
prescribe.
The Board of Directors may, from time to time, authorize any officer
to appoint and remove subordinate officers, to prescribe their authority and
duties, and to fix their compensation.
Section 7. DUTIES OF OFFICERS MAY BE DELEGATED.
-----------------------------------
In the absence of any officer of the Company, or for any other reason
the Board of Directors may deem sufficient, the Board of Directors may
delegate, for the time being, the powers or duties, or any of them of such
officer to any other officer, or to any Director.
Section 8. CONTRACTS, CHECKS, NOTES AND OTHER INSTRUMENTS.
----------------------------------------------
All contracts, agreements and notes authorized by the Board of
Directors shall, unless otherwise directed by the Board of Directors or unless
otherwise required by law, be signed by the President or Secretary. All checks
shall be signed by AT LEAST TWO AUTHORIZED PERSONS. [either the President or
the Secretary and without the necessity of countersignature.] The Board of
Directors may, however, authorize other officers to sign checks, drafts and
orders for the payment of money, (singly and without necessity of
countersignature,) and may designate different combinations of officers and
employees who may, in the name of the Company, execute checks, drafts,
contracts, agreements and other instruments in it behalf.
ARTICLE IV CAPITAL STOCK
-------------------------
Section 1. SHARE CERTIFICATES.
------------------
Certificates for shares, certifying the number of fully-paid shares
owned, shall be issued to each shareholder in such form as shall be approved by
the Board of Directors. Such certificates shall be signed by the President or
a Vice President and by the Secretary or an Assistant Secretary.
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Such certificates for shares shall be transferrable in person or by
attorney, but, except as hereinafter provided and in the case of lost, stolen,
mutilated or destroyed certificates, no transfer of shares shall be entered
upon the records of the Company until the previous certificate, if any, given
for the same, shall have been surrendered and canceled.
Section 2. LOST, MUTILATED OR DESTROYED CERTIFICATES.
------------------------------------------
If any certificate for shares is lost, STOLEN, mutilated or destroyed,
the Board of Directors may authorize the issue of a new certificate in place
thereof upon such terms and conditions as it may deem advisable. The Board of
Directors in its discretion may refuse to issue such new certificates until the
Company has been indemnified to its satisfaction and until it is protected to
its satisfaction by a final order or decree of a court of competent
jurisdiction.
Section 3. REGISTERED SHAREHOLDERS.
------------------------
A person in whose name shares are of record on the books of the
Company shall conclusively be deemed the unqualified owner thereof for all
purposes and to have capacity to exercise all rights of ownership. Neither the
Company nor any transfer agent of the Company shall be bound to recognize any
equitable interest in or claim to such shares on the part of any other person,
whether disclosed upon such certificate or other wise, nor shall they be
obliged to see the execution of any trust or obligation.
ARTICLE V MISCELLANEOUS
------------------------
Section 1. RECORD DATE.
------------
The Directors may fix a date not exceeding sixty days preceding the
date of any meeting of shareholders, the date for the payment of any dividend
or the date for any other corporate action for which a record date is
authorized by law, as record date for the determination of the shareholders
entitled to notice of, and to vote at, any such meetings and any adjournment
thereof, or entitled to receive payment of any such dividend or to
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participate in any such other corporate action, and in such case the
shareholders of record on said date and only such shareholders shall be
entitled to such notice of, and to vote any such meeting and any adjournment
thereof, or to be entitled to receive payment of any such dividend or be
entitled to participate in any such other corporate action.
Section 2. FISCAL YEAR.
------------
The fiscal year of the company shall end on DECEMBER 31 [September 30]
of each year, or on such other days as may be fixed from time to time by the
Board of Directors.
Section 3. AMENDMENTS.
-----------
This Code of Regulations or any Article or Section thereof may be
adopted, changed, repealed, or amended [by the writing] WITHOUT A MEETING BY
THE WRITTEN CONSENT of the holders of two-thirds of the shares entitled to
vote upon such proposal or by the holders of a majority of the shares entitled
to vote upon such proposal at a meeting held for that purpose.
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P R O X Y
RESOURCE GENERAL CORPORATION
2365 Scioto Harper Drive THIS PROXY IS SOLICITED ON BEHALF
Columbus, Ohio 43204 OF THE BOARD OF DIRECTORS
_____________________________________
The undersigned hereby appoints Charles T. Sherman and Candace
Brownfield, and each of them as proxies, each with the power to appoint his
substitute, and hereby authorizes them and each of them to represent and to
vote, as designated below, all of the shares held of record by the undersigned
on April 28, 1996, at the annual meeting of shareholders to be held on May 28,
1996, or any adjournment thereof.
1. ELECTION OF DIRECTORS
FOR ALL NOMINEES listed below: WITHHOLD AUTHORITY
except as marked to to vote for all
the contrary below _____ nominees listed below _____
(INSTRUCTION: To withhold authority to vote for any individual
nominee, strike a line through the nominee's name in the list below.)
Robert S. Ryan, Howard Daniel Smith, Charles T. Sherman
***************************************************************
(REVERSE SIDE OF CARD)
2. PROPOSAL TO AMEND ARTICLE V OF THE ARTICLES OF
INCORPORATION
_____ FOR _____ AGAINST _____ ABSTAIN
3. PROPOSAL TO ADOPT ARTICLE VII OF THE ARTICLES OF
INCORPORATION
_____ FOR _____ AGAINST _____ ABSTAIN
4. PROPOSAL TO AMEND THE CODE OF REGULATIONS
_____ FOR _____ AGAINST _____ ABSTAIN
5. In their discretion, the Proxies are authorized to vote upon such
other business as may properly come before the meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS GIVEN, THE PROXY
WILL BE VOTED FOR THE ELECTION OF THE NOMINEES FOR DIRECTOR, TO AMEND THE
ARTICLES OF INCORPORATION AND AMEND THE CODE OF REGULATIONS.
Please sign exactly as name appears below. When shares are held by
joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please give full corporate name and signed by President or other
authorized officer. If a partnership, please sign partnership name by
authorized person.
Dated ..............................1996
........................................
Signature
........................................
Signature if jointly held
