<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Quarterly Report on
FORM 10-Q
(Mark one)
(X) Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended June 30, 1995
-------------
(_) Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from _______ to _______
Commission File Number 1-7463
JACOBS ENGINEERING GROUP INC.
--------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Delaware 95-4081636
--------------------------------------------------------------------------------
(State of incorporation) (I.R.S. employer identification number)
251 South Lake Avenue, Pasadena, California 91101
--------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
(818) 449 - 2171
--------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check-mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days:
(X) YES - (_) NO
Number of shares of common stock outstanding at August 9, 1995: 25,324,465
Page 1
<PAGE>
JACOBS ENGINEERING GROUP INC.
INDEX TO FORM 10-Q
<TABLE>
<CAPTION>
Page No.
--------------------------------------------------------------------------
<S> <C>
Part I - Financial Information
Item 1. Financial Statements:
Consolidated Condensed Balance
Sheets as of June 30, 1995
and September 30, 1994 3
Consolidated Condensed Statements
of Income for the Three Months
and Nine Months Ended June 30,
1995 and 1994 4
Consolidated Condensed Statements of
Cash Flows for the Nine Months
Ended June 30, 1995 and 1994 5
Notes to Consolidated Condensed
Financial Statements 6-7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 8-10
Part II - Other Information
Item 6. Exhibits and Reports on Form 8-K 11
Signatures 12
</TABLE>
Page 2
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
AT JUNE 30, 1995 AND SEPTEMBER 30, 1994
(UNAUDITED)
<TABLE>
<CAPTION>
1995 1994
------------ ------------
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 30,125,200 $ 45,611,600
Marketable securities 2,768,200 2,896,900
Receivables 294,977,100 288,095,200
Deferred income taxes 28,517,100 27,546,100
Prepaid expenses and other 3,022,500 3,334,800
----------------------------------------------- ------------ ------------
Total current assets 359,410,100 367,484,600
----------------------------------------------- ------------ ------------
Property, Equipment and
Improvements, Net 78,708,800 60,002,700
----------------------------------------------- ------------ ------------
Other Noncurrent Assets:
Goodwill, net 37,836,600 38,641,200
Other 45,224,500 38,235,700
----------------------------------------------- ------------ ------------
Total other noncurrent assets 83,061,100 76,876,900
----------------------------------------------- ------------ ------------
$521,180,000 $504,364,200
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Notes payable $ 15,813,400 $ 9,238,100
Accounts payable 69,924,200 93,117,100
Accrued liabilities 99,339,700 102,205,600
Customers' advances in excess
of related revenues 60,126,000 47,369,300
Income taxes payable 7,826,300 8,469,600
Deferred income taxes 1,027,700 1,027,700
----------------------------------------------- ------------ ------------
Total current liabilities 254,057,300 261,427,400
----------------------------------------------- ------------ ------------
Long-term Debt 18,067,500 25,000,000
----------------------------------------------- ------------ ------------
Deferred Gains on Real Estate Transactions 2,050,000 2,665,000
----------------------------------------------- ------------ ------------
Other Deferred Liabilities 20,075,800 14,838,500
----------------------------------------------- ------------ ------------
Commitments and Contingencies
-----------------------------------------------
Stockholders' Equity:
Capital stock:
Preferred stock, $1 par value,
authorized - 1,000,000 shares,
issued and outstanding - none - -
Common stock, $1 par value,
authorized - 60,000,000 shares,
issued and outstanding -
25,320,647 and 25,094,874 shares,
respectively 25,320,700 25,094,900
Additional paid-in capital 41,018,300 37,251,400
Retained earnings 159,240,700 136,205,600
Other 1,349,700 1,881,400
----------------------------------------------- ------------ ------------
Total stockholders' equity 226,929,400 200,433,300
----------------------------------------------- ------------ ------------
$521,180,000 $504,364,200
============ ============
</TABLE>
See the accompanying notes.
Page 3
<PAGE>
JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
For the Three Months For the Nine Months
Ended June 30, Ended June 30,
-------------------------------- ---------------------------------
1995 1994 1995 1994
------------ ---------------- --------------- ---------------
<S> <C> <C> <C> <C>
Revenues $444,625,800 $263,768,300 $1,253,727,900 $797,024,300
----------------------------- ------------ ------------ -------------- ------------
Costs and Expenses:
Direct costs of contracts 395,005,000 227,162,500 1,114,528,300 691,750,000
Selling, general and
administrative expenses 35,543,400 24,606,800 101,063,900 69,649,300
Interest (income)
expense, net 168,200 (194,000) 200,100 (409,900)
Other (income)
expense, net - 147,700 (565,000) (520,800)
----------------------------- ------------ ------------ -------------- ------------
430,716,600 251,723,000 1,215,227,300 760,468,600
------------ ------------ -------------- ------------
Income before taxes 13,909,200 12,045,300 38,500,600 36,555,700
----------------------------- ------------ ------------ -------------- ------------
Provision for Income Taxes 5,507,200 4,770,300 15,246,600 14,700,700
----------------------------- ------------ ------------ -------------- ------------
Net Income $ 8,402,000 $ 7,275,000 $ 23,254,000 $ 21,855,000
============================= ============ ============ ============== ============
Net Income Per Share $.33 $.29 $.92 $.87
============================= ============ ============ ============== ============
</TABLE>
See the accompanying notes.
Page 4
<PAGE>
JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED JUNE 30, 1995 AND 1994
(UNAUDITED)
<TABLE>
<CAPTION>
1995 1994
------------- -------------
<S> <C> <C>
Cash Flows from Operating Activities:
Net income $ 23,254,000 $ 21,855,000
Adjustments to reconcile net income
to net cash flows from operations:
Depreciation and amortization 11,172,900 8,775,100
Amortization of deferred gains (615,000) (724,700)
Gains on disposals of property,
equipment and other assets 22,400 (1,057,800)
Changes in assets and liabilities, net:
Receivables (7,288,200) (19,470,600)
Prepaid expenses and other 325,300 (123,800)
Accounts payable (23,254,100) (6,716,500)
Accrued liabilities 2,321,200 (5,775,300)
Customers' advances 12,681,100 3,487,500
Income taxes payable (666,300) (3,184,800)
Deferred income taxes (971,000) (958,000)
-------------------------------------------------- ------------ ------------
Net cash provided (used) 16,982,300 (3,893,900)
-------------------------------------------------- ------------ ------------
Cash Flows from Investing Activities:
Additions to property and equipment, net
of disposals (28,075,400) (19,246,100)
Net increase in other noncurrent assets (3,997,000) (3,606,000)
Proceeds from sales of marketable
securities, net of purchases 128,700 17,521,400
Net increase in investments (2,570,800) (5,000,200)
Other, net - 255,200
-------------------------------------------------- ------------ ------------
Net cash used (34,514,500) (10,075,700)
-------------------------------------------------- ------------ ------------
Cash Flows from Financing Activities:
Exercise of stock options 3,386,400 4,246,700
Bank borrowings (repayments), net (935,200) 2,863,400
Other, net (505,100) -
-------------------------------------------------- ------------ ------------
Net cash provided 1,946,100 7,110,100
-------------------------------------------------- ------------ ------------
Effect of Exchange Rate Changes 99,700 248,800
-------------------------------------------------- ------------ ------------
Decrease in Cash and Cash Equivalents (15,486,400) (6,610,700)
Cash and Cash Equivalents at the Beginning
of the Period 45,611,600 20,515,000
-------------------------------------------------- ------------ ------------
Cash and Cash Equivalents at the End
of the Period $ 30,125,200 $ 13,904,300
================================================== ============ ============
</TABLE>
See the accompanying notes.
Page 5
<PAGE>
JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
JUNE 30, 1995
1. The accompanying consolidated condensed financial statements and financial
information included herein have been prepared by the Company, without
audit, pursuant to the interim period reporting requirements of Form 10-Q.
Consequently, certain information and note disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. Readers of this
report should refer to the consolidated financial statements and the notes
thereto incorporated into the Company's latest Annual Report on Form 10-K.
In the opinion of the Company, the accompanying unaudited consolidated
condensed financial statements contain all adjustments (consisting of only
normal recurring adjustments) necessary for the fair presentation of its
consolidated financial position at June 30, 1995 and September 30, 1994,
its consolidated results of operations for the three months and nine months
ended June 30, 1995 and 1994, and its consolidated cash flows for the nine
months ended June 30, 1995 and 1994.
The Company's interim results of operations are not necessarily indicative
of the results to be expected for the full year.
2. Included in receivables at June 30, 1995 and September 30, 1994 were
unbilled amounts totalling $69,169,700 and $70,252,200, respectively.
3. Property, equipment and improvements are stated at cost and consisted of
the following at June 30, 1995 and September 30, 1994:
<TABLE>
<CAPTION>
June 30, September 30,
1995 1994
------------ -------------
<S> <C> <C>
Land $ 10,666,000 $ 6,963,600
Buildings 38,909,100 24,549,500
Equipment 82,583,500 74,687,100
Leasehold improvements 13,026,500 11,948,800
------------------------------------------ ------------ ------------
145,185,100 118,149,000
Less - accumulated depreciation
and amortization 66,476,300 58,146,300
------------------------------------------ ------------ ------------
$ 78,708,800 $ 60,002,700
============ ============
</TABLE>
Page 6
<PAGE>
JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
JUNE 30, 1995
4. Other assets consisted of the following at June 30, 1995 and September 30,
1994:
<TABLE>
<CAPTION>
June 30, September 30,
1995 1994
------------ -------------
<S> <C> <C>
Prepaid pension costs $11,596,600 $11,378,800
Cash surrender value of life
insurance policies 16,311,200 11,676,700
Investments 11,095,700 8,202,100
Miscellaneous 6,221,000 6,978,100
----------- -----------
$45,224,500 $38,235,700
=========== ===========
</TABLE>
5. During the nine months ended June 30, 1995 and 1994, the Company made cash
payments of approximately $1,468,100 and $435,600, respectively, for
interest and approximately $16,284,300 and $17,600,900, respectively, for
income taxes.
6. Net income per share for the three and nine months ended June 30, 1995 and
1994 has been computed based upon the weighted average number of shares of
common stock and, if dilutive, common stock equivalents outstanding as
follows:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
June 30, June 30,
----------------------- -----------------------
1995 1994 1995 1994
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Average number of
shares of common
stock outstanding 25,268,900 24,971,300 25,155,100 24,874,900
Average number of
shares of common
stock equivalents
outstanding 143,700 151,300 126,800 260,600
---------- ---------- ---------- ----------
25,412,600 25,122,600 25,281,900 25,135,500
========== ========== ========== ==========
</TABLE>
Page 7
<PAGE>
JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
JUNE 30, 1995
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
The following discussion should be read in conjunction with management's
discussion and analysis of financial condition and results of operations
incorporated by reference into the Company's latest Annual Report on Form 10-K.
Results of Operations
---------------------
Revenues for the three months ended June 30, 1995 (the "third quarter of fiscal
1995") were $444.6 million; this was $180.9 million more than the amount for the
three months ended June 30, 1994 (the "third quarter of fiscal 1994"). Most of
the increase was attributable to the operations of Jacobs - Sirrine Engineers
(the operating division formerly known as CRS Sirrine Engineers) and CRSS
Constructors, two businesses the Company acquired during the fourth quarter of
fiscal 1994 (together, the "CRSS acquisition"). Revenues from engineering
services for the third quarter of fiscal 1995 increased 26.4% as compared to the
third quarter of fiscal 1994. The Company billed approximately 3.0 million
professional services hours to projects during the third quarter of fiscal 1995;
this was 0.8 million more hours than were billed during the corresponding period
last year. Revenues from construction and maintenance services for the third
quarter of fiscal 1995 were 95.3% higher as compared to the third quarter of
fiscal 1994.
For the nine months ended June 30, 1995, revenues totaled $1,253.7 million; this
was $456.7 million more than the amount for the nine months ended June 30, 1994.
Most of the increase was attributable to the CRSS acquisition. Revenues from
engineering services for the nine months ended June 30, 1995 were 32.8% higher
than the amount for the corresponding period last year. The Company billed
approximately 8.8 million professional services hours to projects during the
nine months ended June 30, 1995; this was 2.1 million more hours than were
billed during the corresponding period last year. Revenues from construction
and maintenance services for the nine months ended June 30, 1995 were 71.9%
higher as compared to the corresponding period last year.
As a percent of revenues, direct costs of contracts were 88.8% for the third
quarter of fiscal 1995, as compared to 86.1% for the third quarter of fiscal
1994. The percentage relationship between direct costs of contracts and
revenues will fluctuate between reporting periods depending on a variety of
factors including the mix of business during the reporting periods being
compared, as well as the level of margins earned from the various services
provided by the Company. In general, the increase in this percentage
relationship during the current quarter as compared to the corresponding period
last year was due to a higher level of construction and maintenance services
relative to engineering services.
For the nine months ended June 30, 1995, direct costs of contracts were 88.9% of
revenues, as compared to 86.8% for the nine months ended June 30, 1994. The
increase in this percentage relationship during the current nine-month period as
compared to the corresponding period last year was also due primarily to the
effects of an increasing portion of the Company's total business volume coming
from construction and maintenance services relative to engineering services.
Page 8
<PAGE>
JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
JUNE 30, 1995
Selling, general and administrative ("SG & A") expenses for the third quarter of
fiscal 1995 totalled $35.5 million; this was $10.9 million more than the amount
for the third quarter of fiscal 1994. Most of the increase was attributable to
the SG & A expenses of the operations associated with the CRSS acquisition. For
the nine months ended June 30, 1995, SG & A expenses were $101.1 million; this
was $31.4 million more than the amount for the nine months ended June 30, 1994.
Most of the increase was attributable to the CRSS acquisition. Also
contributing to the increase was slightly higher levels of S,G & A spending by
the other operations of the Company in support of an increased level of business
activity in the current fiscal year as compared to last year.
The Company's operating profit (defined as income before taxes, other income,
net and interest income, net) was $14.1 million for the third quarter of fiscal
1995; this was $2.1 million more than the amount for the third quarter of fiscal
1994. For the nine months ended June 30, 1995, the Company's operating profit
totalled $38.1 million; this was $2.5 million more than the amount for the
corresponding period last year. Generally, operating profits have not
increased in line with revenues because the increase in revenues was due
primarily to higher construction and maintenance activities, which have a higher
portion of pass-through costs. Although the Company continues to workoff
contracts awarded to it over the past year which have very competitively-bid fee
arrangements, engineering services activities during the third quarter of fiscal
1995 generated higher profit margins as compared to the third quarter of fiscal
1994.
Interest expense, net was $0.2 million for both the third quarter of fiscal 1995
as well as the nine months ended June 30, 1995. This compares to net interest
income of $0.2 million and $0.4 million for the third quarter of fiscal 1994 and
the nine months ended June 30, 1994, respectively. The shift from having net
interest income last year to net interest expense this year was due primarily to
the long-term debt incurred last year in connection with the CRSS acquisition.
Also contributing to the change was increased bank borrowings by the Company's
foreign subsidiaries to fund increased working capital requirements.
Backlog Information
-------------------
The following table summarizes the Company's backlog at the dates indicated (in
millions):
<TABLE>
<CAPTION>
June 30, 1995 June 30, 1994
------------- -------------
<S> <C> <C>
Engineering services backlog $ 862.8 $ 714.6
Total backlog 2,563.0 1,970.0
</TABLE>
Page 9
<PAGE>
JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
JUNE 30, 1995
Liquidity and Capital Resources
-------------------------------
The Company's cash and cash equivalents decreased $15.5 million during the nine
months ended June 30, 1995. This compares to a net decrease of $6.6 million
during the corresponding period last year. The current year decrease in cash
and cash equivalents was comprised of cash used in investing activities ($34.5
million), offset in part by cash provided by operations ($17.0 million),
financing activities ($1.9 million) and the effects of exchange rate changes
($0.1 million).
Operations contributed $17.0 million of cash and cash equivalents during the
nine months ended June 30, 1995. This compares to a net use of cash of $3.9
million during the nine months ended June 30, 1994. The $20.9 million increase
in cash provided by operations, as compared to last year, was due primarily to a
$1.4 million increase in net income, a $2.4 million increase in depreciation and
amortization expense, and the timing of cash receipts and payments on
receivables, and accrued liabilities and payables, respectively.
The Company's investing activities used $34.5 million of cash and cash
equivalents during the nine months ended June 30, 1995. This compares to a net
use of cash of $10.1 million for the nine months ended June 30, 1994. The
Company's sales (net of purchases) of marketable securities and investments
generated $15.0 million less cash in the current year as compared to last year.
Also contributing to the variance was an increase of $8.8 million in additions
to property and equipment (net of disposals). Most of the increase in property
and equipment was attributable to the purchase of the Company's offices in
Dublin, Ireland. The purchase price for the property (known locally as "Merrion
House") totalled (Irish) (Pounds)11.3 million (including costs of the
transaction). The Company was previously a tenant in Merrion House.
Cash flows from financing activities contributed $1.9 million in cash and cash
equivalents during the nine months ended June 30, 1995. This compares to net
contributions of $7.1 million during the nine months ended June 30, 1994. Most
of the variance was due to reduced bank borrowings during the current fiscal
year as compared to last year. During the nine months ended June 30, 1995, the
Company paid-off in full all amounts outstanding under its $45.0 million
revolving credit agreement, which was negotiated primarily to finance the CRSS
acquisition. This long-term debt was replaced in part, however, by a five-year
mortgage loan taken in connection with the purchase of Merrion House. Also
contributing to the reduction in cash provided by financing activities during
the current fiscal period as compared to last year was a reduction in cash
provided by the exercise of stock options.
The Company believes it has adequate capital resources to fund its operations
for the remainder of 1995 and beyond. At June 30, 1995, the Company's short-
term committed credit facilities totaled $44.0 million through banks in the U.S.
and the U.K., against which $15.8 million was outstanding at that date.
Page 10
<PAGE>
JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
June 30, 1995
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits (all are being filed herewith):
3.1 Certificate of Incorporation of Jacobs Engineering Group
Inc., as amended.
3.2 Bylaws of Jacobs Engineering Group Inc., as amended.
4.4 Rights Agreement dated as of December 20, 1990 by and between
Jacobs Engineering Group Inc. and First Interstate Bank, Ltd.
as Rights Agent.
10.1 The Jacobs Engineering Group Inc. 1981 Executive Incentive
Plan (As Amended and Restated).
10.2 The Jacobs Engineering Group Inc. Incentive Bonus Plan for
Officers and Key Managers.
10.3 Agreement dated as of November 30, 1993, and Agreement dated
as of November 30, 1994, between Jacobs Engineering Group
Inc. and Joseph J. Jacobs.
10.4 The Executive Security Program of Jacobs Engineering Group
Inc.
10.9 The Jacobs Engineering Group Inc. 1989 Employee Stock
Purchase Plan.
10.10 Form of Indemnification Agreement entered into between
the Registrant and its officers and directors.
27. Financial Data Schedule.
(b) Reports on Form 8-K:
Not applicable.
Page 11
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
JACOBS ENGINEERING GROUP INC.
s/n John W. Prosser, Jr.
___________________________
John W. Prosser, Jr.
Senior Vice President, Finance
and Administration and Treasurer
Date: August 9, 1995
Page 12
<PAGE>
EXHIBIT 3.1
[COMPOSITE CONFORMED COPY]
CERTIFICATE OF INCORPORATION
OF
JACOBS ENGINEERING GROUP INC.
[as amended]
1. The name of the Corporation is JACOBS ENGINEERING GROUP INC.
2. The name and address of the registered agent of the Corporation in the
State of Delaware is The Corporation Trust Company, 1209 Orange Street,
Wilmington, New Castle County, Delaware 19801.
3. The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of Delaware.
4. The name and mailing address of the incorporator of the Corporation is
as follows:
<TABLE>
<CAPTION>
Name Mailing Address
<S> <C>
Joseph J. Jacobs 251 South Lake Avenue
Pasadena, California 91101
</TABLE>
5. (a) The Corporation is authorized to issue two classes of capital
stock, designated Common Stock and Preferred Stock. The total amount of
authorized capital stock of the Corporation is 61,000,000 shares, divided into
60,000,000 shares of Common Stock, par value $1.00 per share, and 1,000,000
shares of Preferred Stock, par value $1.00 per share.
(b) The Preferred Stock may be issued in one or more series. The Board of
Directors is hereby authorized to issue the share of Preferred Stock in such
series and to fix from time to time before issuance the number of shares to be
included in any series and the designation, relative powers, preferences and
rights and qualifications, limitations or restriction of all shares of such
series. The authority of the Board of Directors with respect to each series
shall include, without limiting the generality of the foregoing, the
determination of any or all of the following:
(1) the number of shares of any series and the designation to
distinguish the shares of such series from the shares of all other series;
(2) the voting powers, if any, and whether such voting powers are
full or limited, in any such series;
(3) the redemption provisions, if any, applicable to such series,
including the redemption price or prices to be paid;
(4) whether dividends, if any, shall be cumulative or noncumulative,
the dividend rate, or method of determining the dividend rate, of such
series, and the dates and preferences of dividends on such series;
<PAGE>
(5) the rights of such series upon the voluntary or involuntary
dissolution of, or upon any distribution of the assets of, the Corporation;
(6) the provisions, if any, pursuant to which the shares of such
series are convertible into, or exchangeable for, shares of any other class
or classes or of any other services of the same or any other class or
classes of stock, or any other security, of the Corporation or any other
corporation, and the price or prices or the rates of exchange applicable
thereto;
(7) the right, if any, to subscribe for or to purchase any securities
of the Corporation or any other corporation;
(8) the provisions, if any, of a sinking fund applicable to such
series; and
(9) any other relative, participating, optional or other special
powers, preferences, rights, qualifications, limitations or restrictions
thereof;
all as shall be determined from time to time by the Board of Directors and shall
be stated in a resolution or resolutions providing for the issuance of such
Preferred Stock (a "Preferred Stock Designation").
(c) The number of authorized shares of Preferred Stock may be increased or
decreased (but not below the number of shares then outstanding) by the
affirmative vote of the holders of not less the 75% of the total voting power of
all outstanding securities of the Corporation then entitled to vote generally in
the election of directors, considered for this purpose as one class.
(d) Expect as may be provided by the Board of Directors in a Preferred
Stock Designation or by law,
(i) dividends may be declared and paid or set apart from payment upon
the Common Stock out of any assets or funds of the Corporation legally
available for the payment of dividends;
(ii) the holders of Common Stock shall have the exclusive right to
vote for the election of directors and on all other matters requiring
stockholder action, each share being entitled to one vote; and
(iii) upon the voluntary or involuntary liquidation, dissolution or
winding up of the Corporation, the net assets of the Corporation shall be
distributed pro rata to the holders of the Common Stock in accordance with
their respective rights and interests.
(e) The Corporation shall be entitled to treat the person in whose name
any share of its stock is registered as the owner thereof for all purposes, and
shall not be bound to recognize any equitable or other claim to, or interest in,
such share on the part of any other person, whether or not the Corporation shall
have notice thereof, except as expressly provided by applicable law.
6. In furtherance and not in limitation of the powers conferred by
statute, the Board of Directors is expressly authorized to make, repeal, alter,
amend and rescind the Bylaws of the Corporation.
2
<PAGE>
7. Bylaws shall not be made, repealed, altered, amended or rescinded by
the stockholders of the Corporation except by the affirmative vote of the
holders of not less than 75% of the total voting power of all outstanding
securities of the Corporation then entitled to vote generally in the election of
directors, considered for purposes of this Article 7 as one class.
8. The business and affairs of the Corporation shall be managed by or
under the direction of a Board of Directors consisting of not less than three
directors or more than twenty-one directors, the exact number of directors to be
determined from time to time by resolution adopted by affirmative vote of a
majority of the entire Board of Directors. The directors shall be divided into
three classes, designated Class I, Class II and Class III. Each class shall
consist, as nearly as may be possible, of one-third of the total number of
directors constituting the entire Board of Directors. At the 1987 annual
meeting of stockholders, Class I directors shall be elected for a one-year term,
Class II directors for a two-year term and Class III directors for a three-year
term. At each succeeding annual meeting of stockholders beginning in 1988,
successors to the class of directors whose term expires at the annual meeting
shall be elected for a three-year term. 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, and
any additional director of any class elected to fill a vacancy resulting form an
increase in such class shall hold office for a term that shall coincide with the
remaining term of that class, but in no case will a decrease in the number of
directors shorten the term of any incumbent director. A director shall hold
office until the annual meeting for the year in which his term expires and until
his successor shall be elected and shall qualify, subject, however, to prior
death, resignation, retirement, disqualification or removal from office. Any
vacancy on the Board of Directors that results from an increase in the number of
directors may be filled by a majority of the Board of Directors then in office,
provided that a quorum is present, and any other vacancy occurring in the Board
of Directors may be filled by a majority of the directors then in office, even
if less than a quorum, or by a sole remaining director. Any director elected to
fill a vacancy not resulting from an increase in the number of directors shall
have the same remaining term as that of his predecessor.
Notwithstanding the foregoing, whenever the holders of any one or more
classes or series of preferred stock issued by the Corporation shall have the
right, voting separately by class or series, to elect directors at an annual or
special meeting of stockholders, the election, term of office, filling of
vacancies and other features of such directorships shall be governed by the
terms of this Certificate of Incorporation applicable thereto, and such
directors so elected shall not be divided into classes pursuant to this Article
8 unless expressly provided by such terms.
Notwithstanding the rule that the three classes shall be as nearly equal in
number of directors as possible, in the event of any change in the authorized
number of directors each director then continuing to serve as such shall
nevertheless continue as a director of the class in which he is a member until
expiration of his current term, or his prior death, resignation or removal. If
any newly created directorship may, consistent with the rule that the three
classes shall be as nearly equal in number of directors as possible, be
allocated to one or two or more classes, the Board shall allocate it to that of
the available class whose term of office is due to expire at the earliest date
following such allocation.
During any period when the holders of any Preferred Stock or any one or
more series thereof, voting as a class, shall be entitled to elect a specified
number of directors, by reason of dividend arrearages or other provisions giving
them the right to do so, then and during such time as such right
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continues (1) the then otherwise authorized number of directors shall be
increased by such specified number of directors, and the holders of such
Preferred Stock or such series thereof, voting as a class, shall be entitled to
elect the additional directors so provided for, pursuant to the provisions of
such Preferred Stock or series; (2) each such additional director shall serve
for such term, and have such voting powers, as shall be stated in the provisions
pertaining to such Preferred Stock or series; and (3) whenever the holders of
any such Preferred Stock or series thereof are divested of such rights to elect
a specified number of directors, voting as a class, pursuant to the provisions
of such Preferred Stock or series, the terms of office of all directors elected
by the holders of such Preferred Stock or series, voting as a class, pursuant to
such provisions, or elected to fill any vacancies resulting from the death,
resignation or removal of directors so elected by the holders of such Preferred
Stock or series, shall forthwith terminate and the authorized number of
directors shall be reduced accordingly.
9. Subject to any rights granted in a Preferred Stock Designation to any
series of Preferred Stock, any action required to permitted to be taken by the
stockholders of the Corporation must be effected at an annual or special meeting
of stockholders of the Corporation and may not be effected by any consent in
writing of such stockholders.
10. No vote at any meeting of stockholders need be by written ballot
unless the Board of Directors, in its discretion, or the officer of the
Corporation presiding at the meeting, in his discretion, specifically directs
the use of a written ballot.
11. Special meetings of the stockholders of the Corporation for any
purpose or purposes may be called at anytime by the Board of Directors or by a
committee of the Board of Directors that has been duly designated by the Board
of Directors and whose powers and authority, as provided in a resolution of the
Board of Directors or in the Bylaws of the Corporation, include the power to
call such meetings or by the Chairman of the Board of Directors, but such
special meetings may not be called by any other person or person; provided,
however, that, if and to the extent that any special meeting of the stockholders
may be called by any other person or persons specified in any provisions of any
certificate filed under Section 151(g) of the Delaware General Corporation Law
(or its successor statute as in effect from time to time hereunder), then such
special meeting may also be called by the person or persons, in the manner, at
the times and for the purposes so specified.
12. Meetings of stockholders may be held within or without the State of
Delaware, as the Bylaws of the Corporation may provide. The books of the
Corporation may be kept (subject to any provision contained in applicable law)
outside the State of Delaware at such place as may be designated from time to
time by the Board of Directors or the Bylaws of the Corporation.
13. Whenever a compromise or arrangement is proposed between the
Corporation and its creditors or any class of them and/or between the
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of the Corporation or any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for the Corporation under the
provision of Section 291 of Title 8 of the Delaware General Corporation Law or
on the application of trustees in dissolution or of any receiver or receivers
appointed for the Corporation under the provisions of Section 279 of Title 8 of
the Delaware General Corporation Law, order a meeting of the creditors or class
of creditors, and/or of the stockholders or class of stockholders of this
Corporation, as the case may be, to be summoned in such manner as the said court
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directs. If a majority in number representing three-fourths in value of the
creditors or class of creditors, and/or of the stockholders or class of
stockholders of the Corporation, as the case may be, agree to any compromise or
arrangement and to any reorganization of the Corporation as a consequence of
such compromise or arrangement, the said compromise or arrangement and the said
reorganization shall, if sanctioned by the court to which said application has
been made, be binding on all the creditors or class of creditors, and/or on all
the stockholders or class of stockholders, of the Corporation, as the case may
be, and also on the Corporation.
14. To the fullest extent permitted by the Delaware General Corporation
Law as the same exists or may hereafter be amended, a director of this
Corporation shall not be personally liable to the corporation or its
shareholders for monetary damages for breach of fiduciary duty as a director,
except that this Article 14 shall not eliminate or limit a director's liability
(i) for any breach of the director's duty of loyalty to the Corporation or its
shareholders, (ii) for acts or omissions that are not in good faith or that
involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the Delaware General Corporation Law, or (iv) for any transaction
from which the director derived an improper personal benefit. If the Delaware
General Corporation Law is hereafter amended to authorize corporate action
further eliminating or limiting the personal liability of directors, then the
liability of a director of the Corporation shall be eliminated or limited to the
fullest extent permitted by the Delaware General Corporation Law, as so amended
from time to time.
Any repeal or modification of this Article 14 shall not increase the
personal liability of any director of this Corporation for any act or occurrence
taking place prior to such repeal or modification or otherwise adversely affect
any right or protection of a director of the Corporation existing at the time of
such repeal or modification.
The provisions of this Article 14 shall not be deemed to limit or preclude
indemnification of a director by the Corporation for any liability of a director
that has not been eliminated by the provisions of this Article 14.
15. The Corporation shall indemnify to the fullest extent authorized or
permitted by law any person made, or threatened to be made, a party to any
action or proceeding (whether civil or criminal or otherwise) by reason of the
fact that he, his testator or intestate, is or was a director or officer of the
Corporation or by reason of the fact that such director or officer, at the
request of the Corporation, is or was serving any other corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise, in
any capacity. Nothing contained herein shall affect any rights to
indemnification to which employees other than directors and officers may be
entitled by law, a contract to which the Corporation is a party or a bylaw of
the Corporation.
16. No contract or other transaction between the Corporation or any other
person, firm or corporation and no other act of the Corporation shall, in the
absence of fraud, in any way be affected or invalidated by the fact that any of
the directors of the Corporation are pecuniarily or otherwise interested in, or
are directors or officers of, such other person, firm or corporation. Any
director of the Corporation individually or any firm or corporation of which any
director may be an officer, director or shareholder, partner or owner, may be a
party to, or may be pecuniarily or otherwise interested in, any contract or
transaction of the Corporation, provided that the fact that he individually or
such firm or corporation is so interested shall be disclosed or shall have been
known to the Board of Directors or a
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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. Any director of the Corporation who is also an officer, director or
shareholder, partner or owner of such other person, firm or corporation or who
is 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 contractor transaction
with like force and effect as if he were not such officer, director or
shareholder, partner or owner of such other person, firm or corporation or not
so interested. Any director of the Corporation may vote upon any contract or
other transaction between the Corporation 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 Corporation or of the directors
that is ratified by a majority of a quorum of the stockholders of the
Corporation at any annual meeting, or at any special meeting called for such
purpose, shall, insofar as permitted by law or by the Certificate of
Incorporation of the Corporation, be as valid and as a binding as though
ratified by every stockholder of the Corporation; 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 Corporation, its directors, officers or employees of its or
their right to proceed with such contract, transaction or act.
17. Notwithstanding any other vote that may be required under applicable
law, and in addition thereto, the affirmative vote of holders of not less than
two-thirds of the total voting power of all outstanding securities entitled to
vote in the ordinary election of directors of the Corporation voting together as
a single class, shall be required:
(a) To adopt any agreement for, or to approve, the merger or
consolidation of this Corporation with or into any other corporation except
for mergers for which no stockholder vote is required under Section 253 of
the Delaware General Corporation Law or any successor section;
(b) To authorize any sale, lease, transfer, exchange, mortgage,
pledge or other disposition to any other corporation, person or entity of
all or substantially all of the assets of this Corporation;
(c) To authorize the issuance or transfer by this Corporation of any
voting securities of this Corporation in exchange or payment for the
securities or assets of any other corporation, person or entity if such
authorization is otherwise required by law or by any agreement between this
Corporation and any national securities exchange or by any other agreement
to which this Corporation is a party; or
(d) To adopt a plan or proposal for the liquidation or dissolution of
this Corporation.
18. Notwithstanding anything to the contrary in this Certificate of
Incorporation, the provisions set forth in this Article 18 and in Articles 6, 8,
9, 11, 14, 15 and 17 may not be repealed, amended or otherwise modified directly
or indirectly in any respect (whether by amendment of this Certificate of
Incorporation or the Bylaws of the Corporation or otherwise) and the provisions
of Article 7 may not be repealed, amended or otherwise modified directly or
indirectly (whether by amendment of this Certificate
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of Incorporation or the Bylaws of the Corporation or otherwise) in any respect
that would reduce or diminish in any manner any requirement set forth in such
Articles for stockholder or director approval of any matter described therein;
provided, however, that any of the foregoing Articles may be repealed or amended
in any respect if such repeal or amendment is approved by such vote as may be
required under applicable law and in addition thereto by the affirmative vote of
the holders, voting together as a single class, if not less than two-thirds
(2/3) of the total voting power of all outstanding securities that are entitled
to vote in the ordinary election of directors of the Corporation.
19. The Corporation reserves the right to amend, alter, change or repeal
any provision contained in this Certificate of Incorporation in the manner now
or hereafter prescribed by statute, and all rights conferred on stockholders
herein are granted subject to this reservation. Notwithstanding the foregoing,
the provisions set forth in Articles 6, 7, 8, 9, 11, 14, 15 and 17 may not be
repealed or amended in any respect unless such repeal or amendment is in
conformity with Article 18 of this Certificate of Incorporation.
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EXHIBIT 3.2
BYLAWS OF
JACOBS ENGINEERING GROUP INC.
(A DELAWARE CORPORATION)
(COMPOSITE CONFORMED COPY)
ARTICLE I.
OFFICES
SECTION 1.01 REGISTERED OFFICE. The registered office of Jacobs
Engineering Group Inc. (hereinafter called the "Corporation") in the State of
Delaware shall be at 1209 Orange Street, Wilmington, and the name of the
registered agent at that address shall be The Corporation Trust Company.
SECTION 1.02 PRINCIPAL OFFICE. The principal office for the transaction of
the business of the Corporation shall be at 251 South Lake Avenue, Pasadena,
California. The Board of Directors (hereinafter called the "Board") is hereby
granted full power and authority to change said principal office from one
location to another.
SECTION 1.03 OTHER OFFICES. The Corporation may also have an office or
offices at such other place or places, either within or without the State of
Delaware, as the Board may from time to time determine or as the business of the
Corporation may require.
ARTICLE II.
MEETINGS OF STOCKHOLDERS
SECTION 2.01 ANNUAL MEETINGS. Annual meetings of the stockholders of the
Corporation for the purpose of electing directors and for the transaction of
such other proper business as may come before such meetings shall be held on the
second Tuesday in February of each year if not a legal holiday, and if a legal
holiday, then on the next business day following, at 3:30 P.M., or at such other
time or date as the Board shall determine by resolution.
SECTION 2.02 SPECIAL MEETINGS. Special meetings of the stockholders for
any purpose or purposes may be called by the Board, by a committee of the Board
that has been duly designated by the Board and whose powers and authority, as
provided in a resolution of the Board or in these Bylaws, include the power to
call such meetings or by the Chairman of the Board. Unless otherwise prescribed
by statute or by the Certificate of Incorporation, special meetings may not be
called by any other person or persons. No business may be transacted at any
special meeting of stockholders other than such business as may be designated in
the notice calling such meeting.
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SECTION 2.03 PLACE OF MEETINGS. All meetings of the stockholders shall be
held at such places, within or without the State of Delaware, as may from time
to time be designated by the person or persons calling the respective meeting
and specified in the respective notices or waivers of notice thereof.
SECTION 2.04 RECORD DATE FOR STOCKHOLDER NOTICE; VOTING; GIVING CONSENTS.
In order that the Corporation may determine the stockholders entitled to notice
of or to vote at any meeting of stockholders or any adjournment thereof, or
entitled to express consent to corporate action in writing without a meeting, or
entitled to receive payment of any dividend or other distribution or allotment
of any rights, or entitled to exercise any rights in respect of any change,
conversion or exchange of stock or for the purpose of any other lawful action,
the Board may fix, in advance, a record date, which shall not be more than sixty
(60) nor less than ten (10) days before the date of such meeting, nor more than
sixty (60) nor less than ten (10) days prior to any other action.
If the Board does not so fix a record date:
(i) The record date for determining stockholders entitled to notice of
or to vote at a meeting of stockholders shall be at the close of business
on the day next preceding the day on which notice is given, or, if notice
is waived, at the close of business on the day next preceding the day on
which the meeting is held.
(ii) The record date for determining stockholders for any other
purpose shall be at the day on which the first written consent is
expressed.
(iii) The record date for determining stockholders for any other
purpose shall be at the close of business on the day on which the Board
adopts the resolution relating thereto.
A determination of stockholders of record entitled to notice of or to vote
at a meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the Board may fix a new record date for the adjourned
meeting.
SECTION 2.05 NOTICE OF MEETINGS. Except as otherwise required by law,
notice of each meeting of the stockholders, whether annual or special, shall be
given not less than twenty (20) nor more than sixty (60) days before the date of
the meeting to each stockholder of record entitled to vote at such meeting by
delivering a typewritten or printed notice thereof to him personally, or by
depositing such notice in the United States mail, in a postage prepaid envelope,
directed to him at his post office address furnished by him to the Secretary of
the Corporation for such purpose or, if he shall not have furnished to the
Secretary of the Corporation his address for such purpose, then at his post
office address last known to the Secretary, or by transmitting a notice thereof
to him at such address by telegraph, cable, or wireless. Except as otherwise
expressly required by law, no publication of any notice of a meeting of the
stockholders shall be required. Every notice of a meeting of the stockholders
shall state the
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place, date and hour of the meeting, and, in the case of a special meeting,
shall also state the purpose or purposes for which the meeting is called.
Notice of any meeting of stockholders shall not be required to be given to any
stockholder who shall have waived such notice and such notice shall be deemed
waived by any stockholders who shall attend such meeting in person or by proxy,
except as for stockholders who shall attend such meeting for the express purpose
of objecting, at the beginning of the meeting, to the transaction of any
business because the meeting is not lawfully called or convened. Except as
otherwise expressly required by law, notice of any adjourned meeting of the
stockholders need not be given if the time and place thereof are announced at
the meeting at which the adjournment is taken.
SECTION 2.06 ADVANCE NOTICE OF STOCKHOLDER NOMINEES. Only persons who are
nominated in accordance with the procedures set forth in this Section 2.06 shall
be eligible for election as Directors. Nominations of persons for election to
the Board of the Corporation may be made at a meeting of stockholders by or at
the direction of the Board or by any stockholder of the Corporation entitled to
vote in the election of Directors at the meeting who complies with the notice
procedures set forth in this Section 2.06. Such nominations, other than those
made by or at the direction of the Board, shall be made pursuant to timely
notice in writing to the Secretary of the Corporation. To be timely, a
stockholder's notice shall be delivered to or mailed and received at the
principal executive offices of the Corporation not less than 60 days nor more
than 90 days prior to the meeting; provided, however, that in the event that
less than 70 days' notice or prior public disclosure of the date of the meeting
is given or made to stockholders, notice by the stockholder to be timely must be
so received not later than the close of business on the 10th day following the
day on which such notice of the date of the meeting was mailed or such public
disclosure was made. Such stockholder's notice shall set forth (a) as to each
person whom the stockholder proposed to nominate for election or re-election a
Director, (i) the name, age, business address and residence address of such
person, (ii) the principal occupation or employment of such person, (iii) the
class and number of shares of the Corporation which are beneficially owned by
such person and (iv) any other information relating to such person that is
required to be disclosed in solicitations of proxies for election of Directors,
or is otherwise required, in each case pursuant to Regulation 14A under the
Securities Exchange Act of 1934, as amended (including without limitation such
persons' written consent to being named in the proxy statement, if any, as a
nominee and to serving as a Director if elected); and (b) as to the stockholder
giving the notice (i) the name and address, as they appear on the Corporation's
books, of such stockholder and (ii) the class and number of shares of the
Corporation that are beneficially owned by such stockholder. At the request of
the Board any person nominated by the Board for election as a Director shall
furnish to the Secretary of the Corporation that information required to be set
forth in a stockholder's notice of nomination which pertains to the nominee. No
person shall be eligible for election as a Director of the Corporation unless
nominated in accordance with the procedures set forth in this Section 2.06. The
Chairman of the meeting shall, if the facts warrant, determine and declare to
the meeting that a nomination was not made in accordance with the procedures
prescribed by the bylaws, and if he should so determine, he shall so declare to
the meeting and the defective nomination shall be disregarded.
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SECTION 2.07 QUORUM. Except in the case of any meeting for the election of
directors summarily ordered as provided by law, the holders of record of a
majority in voting interest of the shares of stock of the Corporation entitled
to be voted thereat, present in person or by proxy, shall constitute a quorum
for the transaction of business at any meeting of the stockholders of the
Corporation or any adjournment thereof. In the absence of a quorum at any
meeting or any adjournment thereof, a majority in voting interest of the
stockholders present in person or by proxy and entitled to vote thereat or, in
the absence therefrom of all the stockholders, any officer entitled to preside
at, or to act as secretary of, such meeting may adjourn such meeting from time
to time. At any such adjourned meeting at which a quorum is present any
business may be transacted that might have been transacted at the meeting as
originally called.
SECTION 2.08 VOTING.
(a) Each stockholder shall, at each meeting of the stockholders, be
entitled to vote in person or by proxy each share or fractional share of the
stock of the Corporation that has voting rights on the matter in question and
that has been held by him and registered in his name on the books of the
Corporation:
(i) on the date fixed pursuant to Section 6.05 of these Bylaws as the
record date for the determination of stockholders entitled to notice of and
to vote at such meeting, or
(ii) if no such record date shall have been so fixed, then (a) at the
close of business on the day next preceding the day on which notice of the
meeting shall be given or (b) if notice of the meeting shall be waived, at
the close of business on the day next preceding the day on which the
meeting shall be held.
(b) Shares of its own stock belonging to the Corporation or to another
corporation, if a majority of the shares entitled to vote in the election of
directors in such other corporation is held, directly or indirectly, by the
Corporation, shall neither be entitled to vote nor be counted for quorum
purposes. Persons holding stock of the Corporation in a fiduciary capacity
shall be entitled to vote such stock. Persons whose stock is pledged shall be
entitled to vote, unless in the transfer by the pledgor on the books of the
Corporation he shall have expressly empowered the pledgee to vote thereon, in
which case only the pledgee, or his proxy, may represent such stock and vote
thereon. Stock having voting power standing of record in the names of two or
more persons, whether fiduciaries, members of a partnership, joint tenants,
tenants in common, tenants by the entirety or otherwise, or with respect to
which two or more persons have the same fiduciary relationship, shall be voted
in accordance with the provisions of the General Corporation Law of the State of
Delaware.
(c) Any such voting rights may be exercised by the stockholder entitled
thereto in person or by his proxy appointed by an instrument in writing,
subscribed by such stockholder or by his attorney thereunto authorized and
delivered to the secretary of the meeting; provided, however, that no proxy
shall be voted or acted upon after three years from its date unless said proxy
shall
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provide for a longer period. The attendance at any meeting of a stockholder who
may theretofore have given a proxy shall not have the effect of revoking the
same unless he shall in writing so notify the secretary of the meeting prior to
the voting of the proxy. At any meeting of the stockholders all matters, except
as otherwise provided by the Certificate of Incorporation, in these Bylaws or by
law, shall be decided by the vote of a majority of the shares present in person
or by proxy and entitled to vote thereat and thereon, a quorum being present.
The vote at any meetings of the stockholders on any question need not be by
ballot, unless so directed by the chairman of the meeting. On a vote by ballot
each ballot shall be signed by the stockholder voting, or by his proxy, if there
be such proxy, and it shall state the number of shares voted.
SECTION 2.09 LIST OF STOCKHOLDERS. The Secretary of the Corporation shall
prepare and make, at least ten (10) days before every meeting of stockholders, a
complete list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each stockholder and the number
of shares registered in the name of each stockholder. Such list shall be open
to the examination of any stockholder for any purpose germane to the meeting
during ordinary business hours, for a period of at least ten (10) days prior to
the meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held. The list shall also be
produced and kept at the time and place of the meeting during the duration
thereof, and may be inspected by any stockholder who is present. Such list
shall presumptively determine the identity of the stockholders entitled to
notice of and to vote at the meeting and the number of shares held by each of
them.
SECTION 2.10 JUDGES. If at any meeting of the stockholders a vote by
written ballot shall be taken on any question, the chairman of such meeting may
appoint a judge or judges to act with respect to such vote. Each judge so
appointed shall first subscribe an oath faithfully to execute the duties of a
judge at such meeting with strict impartiality and according to the best of his
ability. Such judges shall decide upon the qualification of the voters and
shall report the number of shares represented at the meeting and entitled to
vote on such question, shall conduct and accept the votes, and, when the voting
is completed, shall ascertain and report the number of shares voted respectively
for and against the question. Reports of judges shall be in writing and
subscribed and delivered by them to the Secretary of the Corporation. The
judges need not be stockholders of the Corporation, and any officer of the
Corporation may be a judge on any question other than a vote for or against a
proposal in which he shall have a material interest.
SECTION 2.11 ACTION WITHOUT A MEETING NOT PERMITTED. No action shall be
taken by the stockholders except at an annual or special meeting of
stockholders. The power of the stockholders to consent in writing without a
meeting to the taking of any action is specifically denied.
SECTION 2.12 CONDUCT OF MEETINGS OF STOCKHOLDERS. Subject to the
following, meetings of stockholders generally shall follow accepted rules of
parliamentary procedure.
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(a) The chairman of the meeting shall have absolute authority over matters
of procedure and there shall be no appeal from the ruling of the chairman. If
the chairman, in his absolute discretion, deems it advisable to dispense with
the rules of parliamentary procedure as to any one meeting of stockholders or
part thereof, the chairman shall so state and shall clearly state the rules
under which the meeting or appropriate part thereof shall be conducted.
(b) If disorder should arise that prevents continuation of the legitimate
business of the meeting, the chairman may quit the chair and announce the
adjournment of the meeting; and, upon his so doing, the meeting shall be
immediately adjourned.
(c) The chairman may ask or require that anyone not a bona fide stockholder
or proxy leave the meeting.
(d) A resolution or motion shall be considered for vote only if proposed by
a stockholder or duly authorized proxy and seconded by an individual who is a
stockholder or a duly authorized proxy, other than the individual who proposed
the resolution or motion.
ARTICLE III.
BOARD OF DIRECTORS
SECTION 3.01 GENERAL POWERS. The property, business and affairs of the
Corporation shall be managed by the Board.
SECTION 3.02 NUMBER AND TERM OF OFFICE. The authorized number of directors
shall be eleven (11) until changed by a duly adopted amendment to this bylaw.
Each of the directors of the Corporation shall hold office until his successor
shall have been duly elected and shall qualify or until he shall resign or shall
have been removed in the manner hereinafter provided.
SECTION 3.03 ELECTION OF DIRECTORS. The directors shall be elected by the
stockholders of the Corporation, and at each election the persons receiving the
greatest number of votes, up to the number of directors then to be elected,
shall be the persons then elected. The election of directors is subject to any
provisions contained in the Certificate of Incorporation relating thereto,
including any provisions for cumulative voting.
SECTION 3.04 RESIGNATIONS. Any director of the Corporation may resign at
any time by giving written notice to the Board or to the Secretary of the
Corporation. Any such resignation shall take effect at the time specified
therein, or, if the time be not specified, it shall take effect immediately upon
its receipt; and unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.
SECTION 3.05 VACANCIES. Except as otherwise provided in the Certificate of
Incorporation, any vacancy in the Board, whether because of death, resignation,
disqualification, an increase in the number of directors, or any other cause,
may be filled by vote of the majority
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of the remaining directors, although less than a quorum. Each director so
chosen to fill a vacancy shall hold office until his successor shall have been
elected and shall qualify or until he shall resign or shall have been removed in
the manner hereinafter provided.
SECTION 3.06 PLACE OF MEETING. The Board may hold any of its meetings at
such place or places within or without the State of Delaware as the Board may
from time to time by resolution designate or as shall be designated by the
person or persons calling the meeting or in the notice or a waiver of notice of
any such meeting. Directors may participate in any regular or special meeting
of the Board by means of conference telephone or similar communications
equipment pursuant to which all persons participating in the meeting of the
Board can hear each other, and such participation shall constitute presence in
person at such meeting.
SECTION 3.07 FIRST MEETING. The Board shall meet as soon as practicable
after each annual election of directors and notice of such first meeting shall
not be required.
SECTION 3.08 REGULAR MEETINGS. Regular meetings of the Board may be held
at such times as the Board may from time to time by resolution determine. If
any day fixed for a regular meeting shall be a legal holiday at the place where
the meeting is to be held, then the meeting shall be held at the same hour and
place on the next succeeding business day not a legal holiday. Except as
provided by law, notice of regular meetings need not be given.
SECTION 3.09 SPECIAL MEETINGS. Special meetings of the Board may be called
by the Chairman of the Board of Directors or the President and shall be called
by the President or Secretary on the written request of two directors. Notice
of all special meetings of the Board shall be given to each director at such
director's address as it appears on the records of the Corporation, as follows:
(a) by first-class mail, postage prepaid, deposited in the United
States mail in the city where the principal office of the Corporation is
located at least five (5) days before the date of such meeting; or
(b) by telegram, charges prepaid, such notice to be delivered to the
telegraph company in the city of the principal office of the Corporation at
least forty-eight (48) hours before the time of holding such meeting; or
(c) by personal delivery at least twenty four (24) hours prior to the
time of holding such meeting.
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Such notice may be waived by any director and any meeting shall be a
legal meeting without notice having been given if all the directors shall be
present thereat or if those not present shall, either before or after the
meeting, sign a written waiver of notice of, or a consent to, such meeting or
shall after the meeting sign the approval of the minutes thereof. All such
waivers, consents or approvals shall be filed with the corporate records or be
made a part of the minutes of the meeting.
SECTION 3.10 QUORUM AND MANNER OF ACTING. Except as otherwise provided in
the Certificate of Incorporation or these Bylaws or by law, the presence of a
majority of the total number of directors then in office shall be required to
constitute a quorum for the transaction of business at any meeting of the Board.
Except as otherwise provided in the Certificate of Incorporation or these Bylaws
or by law, all matters shall be decided at any such meeting, a quorum being
present, by the affirmative votes of a majority of the directors present. In
the absence of a quorum, a majority of directors present at any meeting may
adjourn the same from time to time until a quorum shall be present. Notice of
any adjourned meeting need not be given. The directors shall act only as a
Board, and the individual directors shall have no power as such.
SECTION 3.11 ACTION BY CONSENT. Any action required or permitted to be
taken at any meeting of the Board or of any committee thereof may be taken
without a meeting if a written consent thereto is signed by all members of the
Board or of such committee, as the case may be, and such written consent is
filed with the minutes of proceedings of the Board or committee.
SECTION 3.12 MANIFESTATION OF DISSENT. A director of the Corporation who
is present at a meeting of the Board at which action on any corporate matter is
taken shall be presumed to have assented to the action taken unless his dissent
shall be entered in the minutes of the meeting or unless he shall file his
written dissent to such action with the person acting as the secretary of the
meeting before the adjournment thereof or shall forward such dissent by
registered mail to the Secretary of the Corporation immediately after the
adjournment of the meeting. Such right to dissent shall not apply to a director
who voted in favor of such action.
SECTION 3.13 COMPENSATION. The directors shall receive only such
compensation for their services as directors as may be allowed by resolution of
the Board. The Board may also provide that the Corporation shall reimburse each
such director for any expense incurred by him on account of his attendance at
any meetings of the Board or Committees of the Board. Neither the payment of
such compensation nor the reimbursement of such expenses shall be construed to
preclude any director from serving the Corporation or its subsidiaries in any
other capacity and receiving compensation therefor.
SECTION 3.14 EXECUTIVE COMMITTEE. There may be an Executive Committee of
three or more directors appointed by the Board, who may meet at stated times, or
on notice to all members of such Committee by any of their own number, during
the intervals between the
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meetings of the Board; they shall advise and aid the officers of the Corporation
in all matters concerning its interests and the management of its business, and
generally perform such duties and exercise such powers as may be directed or
delegated by the Board from time to time. To the full extent permitted by law,
the Board may delegate to such Committee authority to exercise all the powers of
the Board while the Board is not in session. Vacancies in the members of the
Committee shall be filled by the Board at a regular meeting or at a special
meeting for that purpose. The Executive Committee shall keep written minutes of
its meeting and report the same to the Board when required. The provisions of
Sections 3.08, 3.09 and 3.11 of these Bylaws shall apply, mutatis
mutandis, to any Executive Committee of the Board.
SECTION 3.15 EMERGENCY MANAGEMENT COMMITTEE. The Board of Directors, by
resolution, may provide for an Emergency Management Committee and appoint
members or designate the manner in which membership of the Committee shall be
determined. The emergency powers granted hereunder shall be operative during
any emergency resulting from an attack on the United States or during any
nuclear or atomic disaster or during the existence of any catastrophe, or other
similar emergency condition, as a result of which a quorum of the Board of
Directors or a standing committee thereof cannot readily be convened for action
(an "emergency condition"). Said Committee shall have and may exercise all of
the powers of the Board of Directors in the management of the business and
affairs of the Corporation. It shall act only during such emergency condition
and so long as the number of Directors able to act shall have been reduced to
fewer than five, and until a Board of Directors has been elected by the
stockholders. Such Committee shall meet as promptly as possible after the
commencement of such an emergency condition as would activate the Committee and
at such subsequent time or times as it may designate until a Board of Directors
has been duly elected. Such Committee shall as the first order of business
elect an Emergency Executive Committee from among its members and a chairman
thereof, who shall be the chief executive officer of the Corporation. Such
Executive Committee shall function in the same manner and possess the same
powers as the Executive Committee of the Board of Directors, as provided in
Article III of these Bylaws, and shall have as many members as shall be provided
by resolution of the Board. Such Committees shall make their own rules of
procedure except to the extent otherwise provided by resolution of the Board. A
majority of the members of the Committees able to act shall constitute a quorum.
The physical presence of a member shall not be required if his vote on an action
to be taken can be obtained by available means of communication. Any vacancy
occurring in said Committees caused by resignation, death or other incapacity
may be filled by a majority of the remaining members of the Emergency Management
Committee and any member so chosen shall serve until a Board of Directors has
been duly elected.
SECTION 3.16 OTHER COMMITTEES. The Board may, by resolution passed by a
majority of the whole Board, designate one or more other committees, each such
committee to consist of one or more of the directors of the Corporation. To the
full extent permitted by law, any such committee shall have and may exercise
such powers and authority as the Board may designate in such resolution.
Vacancies in the membership of a committee shall be filled by the Board at a
regular meeting or a special meeting for that purpose. Any such committee shall
keep written minutes of its meetings and report the same to the Board when
required. The
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provisions of Sections 3.08, 3.09, 3.10, 3.11 and 3.12 of these Bylaws shall
apply, mutatis mutandis, to any such committee of the Board.
ARTICLE IV.
OFFICERS
SECTION 4.01 NUMBER. The officers of the Corporation shall be a Chairman
of the Board, a President, one or more Vice Presidents, a Secretary and a
Treasurer. The Chief Executive Officer of the Corporation shall be such officer
as the Board shall from time to time designate. The Board may also elect one or
more Assistant Secretaries and Assistant Treasurers. A person may hold more
than one office providing the duties thereof can be consistently performed by
the same person.
SECTION 4.02 OTHER OFFICERS. The Board may appoint such other officers as
it shall deem necessary who shall hold their offices for such terms and shall
exercise such powers and perform such duties as shall be determined from time to
time by the Board.
SECTION 4.03 ELECTION. Each of the officers of the Corporation, except
such officers as may be appointed in accordance with the provisions of Section
4.02 or Section 4.05 of this Article, shall be chosen annually by the Board and
shall hold his office until he shall resign or shall be removed or otherwise
disqualified to serve, or his successor shall be elected and qualified.
SECTION 4.04 SALARIES. The salaries of all officers of the Corporation
shall be fixed by the Board.
SECTION 4.05 REMOVAL; VACANCIES. Subject to the express provisions of a
contract authorized by the Board, any officer may be removed, either with or
without cause, at any time by the Board or by any officer upon whom such power
of removal may be conferred by the Board. Any vacancy occurring in any office
of the Corporation shall be filled by the Board.
SECTION 4.06 THE CHAIRMAN OF THE BOARD. The Chairman of the Board shall
preside at all meetings of the stockholders and directors and shall have such
other powers and duties as may be prescribed by the Board or by applicable law.
He shall be an ex-officio member of standing committees, if so provided in the
resolutions of the Board appointing the members of such committees.
SECTION 4.07 THE VICE CHAIRMAN OF THE BOARD. In the absence of the
Chairman of the Board the Vice Chairman of the Board, if there be such an
officer, shall have all the powers and shall exercise all the duties of the
Chairman of the Board.
SECTION 4.08 THE PRESIDENT. The President shall be the managing officer of
the Corporation. Subject to the control of the Board, the President shall have
general supervision,
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control and management of the affairs and business of the Corporation, and
general charge and supervision of all officers, agents and employees of the
Corporation; shall see that all orders and resolutions of the Board are carried
into effect; shall, in the absence of the Chairman of the Board and Vice
Chairman of the Board, preside at all meetings of the stockholders and the
Board; and in general shall exercise all powers and perform all duties incident
to the office of President and managing officer of the Corporation and such
other powers and duties as may from time to time be assigned to him by the Board
or as may be prescribed in these Bylaws.
The President may execute bonds, mortgages and other contracts requiring a
seal, under the seal of the Corporation, except where required or permitted by
law to be otherwise signed and executed and except where the signing and
execution thereof shall be expressly delegated by the Board to some other
officer or agent of the Corporation.
The President shall be an ex-officio member of standing committees, if so
provided in the resolutions of the Board appointing the members of such
committees.
SECTION 4.09 THE VICE PRESIDENTS. In the absence of the President or in
the event of his inability or refusal to act, the Vice President (or in the
event there be more than one Vice President, the Vice Presidents in the order
designated, or in the absence of any designation, then in the order of their
election) shall perform the duties of the President, and when so acting, shall
have all the powers of and be subject to all the restrictions upon the
President. The Vice Presidents shall perform such other duties and have such
other powers as the Board or the President may from time to time prescribe.
SECTION 4.10 THE SECRETARY AND ASSISTANT SECRETARY. The Secretary shall
attend all meetings of the Board and all meetings of the stockholders and record
all the proceedings of the meetings of the Corporation and of the Board in a
book to be kept for that purpose and shall perform like duties for the standing
and special committees of the Board when required. He shall give, or cause to
be given, notice of all meetings of the stockholders and special meetings of the
Board, and shall perform such other duties as may be prescribed by the Board or
President, under whose supervision he shall act. He shall have custody of the
corporate seal of the Corporation and he, or an assistant secretary, shall have
authority to affix the same to an instrument requiring it and, when so affixed,
it may be attested by his signature or by the signature of such assistant
secretary. The Board may give general authority to any other officer to affix
the seal of the Corporation and to attest the affixing of his signature.
The assistant secretary, or if there be more than one, the assistant
secretaries in the order determined by the Board (or if there be no such
determination, then in the order of their election), shall, in the absence of
the Secretary or in the event of his inability or his refusal to act, perform
the duties and exercise the powers of the Secretary and shall perform such other
duties and have such other powers as the Board may from time to time prescribe.
SECTION 4.11 THE TREASURER. The Treasurer shall be the chief financial
officer of the Corporation and may be referred to by that title shall have the
custody of the corporate funds
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and securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the Corporation and shall deposit all moneys
and other valuable effects in the name and to the credit of the Corporation in
such depositories as may be designated by the Board.
The Treasurer shall disburse the funds of the Corporation as may be ordered
by the Board, making proper vouchers for such disbursements, and shall render to
the President and the Board, at its regular meetings, or when the Board so
requires, an account of all his transactions as Treasurer and of the financial
condition of the Corporation.
If required by the Board, the Treasurer shall give the Corporation a bond
in such sum and with such surety as shall be satisfactory to the Board for the
faithful performance of the duties of his office and for the restoration to the
Corporation, in case of his death, resignation, retirement or removal from
office, of all books, papers, vouchers, money and other property of whatever
kind in his possession or under his control belonging to the Corporation.
SECTION 4.12 THE ASSISTANT TREASURER. The assistant treasurer, or if there
be more than one, the assistant treasurers in the order determined by the Board
(or if there be no such determination, then in the order of their election),
shall, in the absence of the Treasurer or in the event of his inability or
refusal to act, perform the duties and exercise the powers of the Treasurer and
shall perform such other duties and have such other powers as the Board may from
time to time prescribe.
ARTICLE V.
CONTRACTS, CHECKS, DRAFTS, BANK ACCOUNTS, ETC.
SECTION 5.01 CHECKS, DRAFTS, ETC. All checks, drafts or other orders for
payment of money, notes or other evidence of indebtedness payable by the
Corporation shall be signed by such person or persons and in such manner as,
from time to time, shall be determined by resolution of the Board. Each such
person or persons shall give such bond, if any, as the Board may require.
SECTION 5.02 DEPOSITS. All funds of the Corporation not otherwise employed
shall be deposited from time to time to the credit of the Corporation in such
banks, trust companies or other depositories as the Board may select, or as may
be selected by any officer or officers, assistant or assistants, agent or
agents, or attorney or attorneys of the Corporation to whom such power shall
have been delegated by the Board. For the purpose of deposit and for the
purpose of collection for the account of the Corporation, the President, any
Vice President or the Treasurer (or any other officer or officers, assistant or
assistants, agent or agents, or attorney or attorneys of the Corporation who
shall from time to time be determined by the Board) may endorse, assign and
deliver checks, drafts and other orders for the payment of money which are
payable to the order of the Corporation.
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SECTION 5.03 GENERAL AND SPECIAL BANK ACCOUNTS. The Board may from time to
time authorize the opening and keeping of general and special bank accounts with
such banks, trust companies or other depositories as the Board may select or as
may be selected by any officer or officers, assistant or assistants, agent or
agents, or attorney or attorneys of the Corporation to whom such power shall
have been delegated by the Board. The Board may make such special rules and
regulations with respect to such bank accounts, not inconsistent with the
provisions of these Bylaws, as it may deem expedient.
ARTICLE VI.
SHARES AND THEIR TRANSFER
SECTION 6.01 CERTIFICATES FOR STOCK. Every owner of stock of the
Corporation shall be entitled to have a certificate or certificates, to be in
such form as the Board shall prescribe, certifying the number and class of
shares of the stock of the Corporation owned by him. The certificates
representing shares of such stock shall be numbered in the order in which they
shall be issued and shall be signed in the name of the Corporation by the
Chairman, Vice Chairman or President or a Vice President, and by the Secretary
or an Assistant Secretary or the Treasurer or an Assistant Treasurer. Any of or
all of the signatures on the certificates may be a facsimile. In case any
officer, transfer agent or registrar who has signed, or whose facsimile
signature has been placed upon, any such certificate shall have ceased to be
such officer, transfer agent or registrar before such certificate is issued,
such certificate may nevertheless be issued by the Corporation with the same
effect as though the person who signed such certificate, or whose facsimile
signature has been placed upon, any such certificate shall have ceased to be
such officer, transfer agent or registrar before such certificate is issued,
such certificate may nevertheless be issued by the Corporation with the same
effect as though the person who signed such certificate, or whose facsimile
signature shall have been placed thereupon, were such officer, transfer agent or
registrar at the date of issue. A record shall be kept of the respective names
of the persons, firms or corporations owning the stock represented by such
certificates, the number and class of shares represented by such certificates,
respectively, and the respective dates thereof, and in case of cancellation, the
respective dates of cancellation. Every certificate surrendered to the
Corporation for exchange or transfer shall be cancelled, and no new certificate
or certificates shall be issued in exchange for any existing certificate until
such existing certificate shall have been so cancelled, except in cases provided
for in Section 6.04.
SECTION 6.02 TRANSFERS OF STOCK. Transfers of shares of stock of the
Corporation shall be registered on the books of the Corporation or a transfer
agent appointed as provided in Section 6.03, only upon surrender of the
certificate or certificates for such shares properly endorsed by the registered
holder thereof, or by his attorney thereunto authorized by power of attorney
duly executed, and the payment of all taxes thereon. The person in whose name
shares of stock stand on the books of the Corporation shall be deemed the owner
thereof for all purpose as regards the Corporation. Whenever any transfer of
shares shall be made for collateral security, and not absolutely, such fact
shall be so expressed in the entry of transfer if, when the
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certificate or certificates shall be presented to the Corporation for
registration of transfer, both the transferor and the transferee request the
Corporation to do so.
SECTION 6.03 REGULATIONS. The Board may make such rules and regulations as
it may deem expedient, not inconsistent with these Bylaws, concerning the issue,
transfer and registration of certificates for shares of the stock of the
Corporation. It may appoint, or authorize any officer or officers to appoint,
one or more transfer clerks or one or more transfer agents and one or more
registrars, and may require all certificates for stock to bear the signature or
signatures of any of them.
SECTION 6.04 LOST, STOLEN, DESTROYED, AND MUTILATED CERTIFICATES. In any
case of loss, theft, destruction or mutilation of any certificate of stock,
another may be issued in its place upon proof of such loss, theft, destruction
or mutilation and upon the giving of a bond of indemnity to the Corporation in
such form and in such sums as the Board may direct; provided, however, that a
new certificate may be issued without requiring any bond when, in the judgment
of the Board, it is proper so to do.
SECTION 6.05 FIXING DATE FOR DETERMINATION OF STOCKHOLDERS OF RECORD. In
order that the Corporation may determine the stockholders entitled to notice of
or to vote at any meeting of stockholders or any adjournment thereof, or
entitled to receive payment of any dividend or other distribution or allotment
of any rights, or entitled to exercise any rights in respect of any other
change, conversion or exchange of stock or for the purpose of any other lawful
action, the Board may fix, in advance, a record date, which shall not be more
than sixty (60) nor less than twenty (20) days before the date of such meeting,
nor more than sixty (60) days prior to any other action. If in any case
involving the determination of stockholders for any purpose other than notice of
or voting at a meeting of stockholders the Board shall not fix such a record
date, the record date for determining stockholders for such purpose shall be the
close of business on the day on which the Board shall adopt the resolution
relating thereto. A determination of stockholders entitled to notice of or to
vote at a meeting of stockholders shall apply to any adjournment of such
meeting; provided, however, that the Board may fix a new record date for the
adjourned meeting.
ARTICLE VII.
INDEMNIFICATION
SECTION 7.01 ACTIONS OTHER THAN BY OR IN THE RIGHT OF THE CORPORATION. The
Corporation shall indemnify any person who was or is a party or is threatened to
be made a 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 Corporation) by reason of the fact that he
is or was a director, officer, employee or agent of the Corporation, or is or
was serving at the request of the Corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise or as a member of any committee or similar body, against expenses
(including attorneys' fees), judgments, fines
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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 Corporation, and, with respect to any criminal action or proceeding, had
no reasonable cause to believe his conduct was unlawful. 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
Corporation, and, with respect to any criminal action or proceeding, that he had
reasonable cause to believe that his conduct was unlawful.
SECTION 7.02 ACTIONS BY OR IN THE RIGHT OF THE CORPORATION. The
Corporation shall indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action or suit by or in
the right of the Corporation 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
Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, or as a member of any committee or similar
body, 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 Corporation, 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 Corporation
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 of 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.
SECTION 7.03 DETERMINATION OF RIGHT OF INDEMNIFICATION. Any
indemnification under Section 7.01 or 7.02 (unless ordered by a court) shall be
made by the Corporation 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 Sections 7.01 and 7.02. Such determination shall be made
(i) by the Board by a majority vote of a quorum consisting of directors who were
not parties to such action, suit or proceeding, or (ii) 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 (iii) by the
stockholders.
SECTION 7.04 INDEMNIFICATION AGAINST EXPENSES OF SUCCESSFUL PARTY.
Notwithstanding the other provisions of this Article, to the extent that a
director, officer, employee or agent of the Corporation has been successful on
the merits or otherwise in defense of any action, suit or proceeding referred to
in Section 7.01 or 7.02, 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.
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SECTION 7.05 ADVANCE OF EXPENSES. Expenses incurred in defending a civil
or criminal action, suit or proceeding may be paid by the Corporation in advance
of the final disposition of such action, suit or proceeding as authorized by the
Board upon receipt of an undertaking by or on behalf of the director or officer,
to repay such amount if it shall ultimately be determined that he is not
entitled to be indemnified by the Corporation as authorized in this Article.
Such expenses incurred by other employees and agents may be so paid upon such
terms and conditions, if any, as the Board deems appropriate.
SECTION 7.06 OTHER RIGHTS AND REMEDIES. The benefits provided by this
Article shall not be deemed exclusive of any other rights to which those seeking
indemnification may be entitled under any statute, Bylaw, 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, and shall 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 a person.
SECTION 7.07 INSURANCE. Upon resolution passed by the Board, the
Corporation may purchase and maintain insurance on behalf of any person who is
or was a director, officer, employee or agent of the Corporation, or is or was
serving at the request of the Corporation as a director, officer, employee or
agent of another corporation, 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
Corporation would have the power to indemnify him or hold him harmless against
such liability under the provisions of this Article.
SECTION 7.08 CONSTITUENT CORPORATIONS. For the purposes of this Article,
references to "the Corporation" include all constituent corporations absorbed in
a consolidation or merger as well as the resulting or surviving corporation, and
shall also include without limitation Jacobs Engineering Group Inc., a
California corporation, so that any person who is or was a director, officer,
employee or agent of such a constituent corporation or is or was serving at the
request of such constituent corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise shall stand in the same position under the provisions of this Article
with respect to the resulting or surviving corporation as he would if he had
served the resulting or surviving corporation in the same capacity.
SECTION 7.09 EMPLOYEE BENEFIT PLANS. For purposes of this Article,
references to "other enterprises" shall include employee benefit plans, and
references to "serving at the request of the Corporation" shall include any
service as a director, officer, employee or agent of the Corporation that
imposes a duty on, or involves services by, such director, officer, employee or
agent with respect to an employee benefit plan, its participants or
beneficiaries.
SECTION 7.10 BROADEST LAWFUL INDEMNIFICATION. In addition to the
foregoing, the Corporation shall, to the broadest and maximum extent permitted
by Delaware law, as the same exists from time to time (but, in case of any
amendment to or change in Delaware law, only to
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the extent that such amendment or change permits the Corporation to provide
broader rights of indemnification than is permitted to the Corporation prior to
such amendment or change), indemnify each person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative by
reason of the fact that he is or was a director or officer of the Corporation,
or is or was serving at the request of the Corporation as a director, officer,
employee 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 than is permitted to the
Corporation prior to such amendment or change), pay to such person any and all
expenses (including attorneys' fees) incurred in defending or settling any such
action, suit or proceeding in advance of the final disposition of such action,
suit or proceeding upon receipt of an undertaking by or on behalf of the
director or officer, to repay such amount if it shall ultimately be determined
by a final judgment or other final adjudication that he is not entitled to be
indemnified by the Corporation as authorized in this Section 7.10. The first
sentence of this Section 7.10 to the contrary notwithstanding, the Corporation
shall not indemnify any such person with respect to any of the following
matters: (i) remuneration paid to such person if it shall be determined by a
final judgment or other final adjudication that such remuneration was in
violation of law; or (ii) any accounting of profits made from the purchase or
sale by such person of the Corporation's securities within the meaning of
Section 16(b) of the Securities Exchange Act of 1934 and amendments thereto or
similar provisions of any federal, state or local statutory law; or (iii)
actions brought about or contributed to by the dishonesty of such person, if a
final judgment or other final adjudication adverse to such person establishes
that acts of active and deliberate dishonesty were committed or attempted by
such person with actual dishonest purpose and intent and were material to the
adjudication; or (iv) actions based on or attributable to such person having
gained any personal profit or advantage to which he was not entitled, in the
event that a final judgment or other final adjudication adverse to such person
establishes that such person in fact gained such personal profit or other
advantage to which he was not entitled; or (v) any matter in respect of which a
final decision by a court with competent jurisdiction shall determine that
indemnification is unlawful; provided, however, that the Corporation shall
perform its obligations under the second sentence of this Section 7.10 on behalf
of such person until such time as it shall be ultimately determined by a final
judgment or other final adjudication that he is not entitled to be indemnified
by the Corporation as authorized by the first sentence of this Section 7.10 by
virtue of any of the preceding clauses (i), (ii), (iii), (iv) or (v).
SECTION 7.11 INDEMNITY FUND. Upon resolution passed by the Board, the
Corporation may establish a trust or other designated account, grant a security
interest or use other means (including, without limitation, a letter of credit),
to ensure the payment of any or all of its obligations arising under this
Article VII and/or any agreements that may be entered into between the
Corporation and its officers and directors from time to time.
SECTION 7.12 SEVERABILITY. If any part of this Article VII shall be found,
in any action, suit or proceeding or appeal therefrom or in any other
circumstances or as to any particular
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officer, director, employee or agent to be unenforceable, ineffective or invalid
for any reason, the enforceability, effect and validity of the remaining parts
or of such parts in other circumstances shall not be affected, except as
otherwise required by applicable law.
SECTION 7.13 AMENDMENTS. The foregoing provisions of this Article VII
shall be deemed to constitute an agreement between the Corporation and each of
the persons entitled to indemnification hereunder, for as long as such
provisions remain in effect. Any amendment to the foregoing provisions of this
Article VII which limits or otherwise adversely affects the scope of
indemnification or rights of any such persons hereunder shall, as to such
persons, apply only to claims arising, or causes of action based on actions or
events occurring, after such amendment and delivery of notice of such amendment
is given to the person or persons so affected. Until notice of such amendment
is given to the person or persons whose rights hereunder are adversely affected,
such amendment shall have no effect on such rights of such persons hereunder.
Any person entitled to indemnification under the foregoing provisions of this
Article VII shall as to any act or omission occurring prior to the date of
receipt of such notice, be entitled to indemnification to the same extent as had
such provisions continued as Bylaws of the Corporation without such amendment.
ARTICLE VIII.
MISCELLANEOUS
SECTION 8.01 SEAL. The Board shall provide a corporate seal, which shall
be in the form of a circle and shall bear the name of the Corporation and words
and figures showing that the Corporation was incorporated in the State of
Delaware and the year of incorporation.
SECTION 8.02 WAIVER OF NOTICES. Whenever notice is required to be given by
these Bylaws or the Certificate of Incorporation or by law, the person entitled
to said notice may waive such notice in writing, either before or after the time
stated therein, and such waiver shall be deemed equivalent to notice.
SECTION 8.03 FISCAL YEAR. The fiscal year of the Corporation shall begin
the first day of October in each year.
SECTION 8.04 AMENDMENTS. Subject to the provisions of the Certificate of
Incorporation, these Bylaws and applicable law, these Bylaws or any of them may
be amended or repealed and new Bylaws may be adopted (a) by the Board, by vote
of a majority of the number of directors then in office or (b) by the vote of
the holders of not less than seventy-five (75%) percent of the total voting
power of all outstanding shares of voting stock of the Corporation in an annual
meeting of stockholders, without previous notice, or at any special meeting of
stockholders, provided that notice of such proposed amendment, repeal or
adoption is given in the notice of special meeting. Subject to the provisions
of the Certificate of Incorporation, any Bylaws adopted or amended by the
stockholders may be amended or repealed by the Board or the stockholders.
18
<PAGE>
SECTION 8.05 VOTING STOCK. Unless otherwise ordered by the Board, the
Chairman of the Board, the President and each Vice President shall have full
power and authority on behalf of the Corporation to attend and to act and vote
at any meeting of the stockholders of any corporation in which the Corporation
may hold stock and at any such meeting shall possess and may exercise any and
all rights and powers that are incident to the ownership of such stock and which
as the owner thereof the Corporation may have possessed and exercised if
present. The Board by resolution from time to time may confer like powers upon
any other person or persons.
19
<PAGE>
EXHIBIT 4.4
RIGHTS AGREEMENT
dated as of December 20, 1990
by and between
JACOBS ENGINEERING GROUP INC.
and
FIRST INTERSTATE BANK, LTD.
as Rights Agent
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Section Page
------- ----
<S> <C>
1 Certain Definitions................................. 1
2 Appointment of Rights Agent......................... 7
3 Issuance of Right Certificates...................... 7
4 Form of Right Certificates.......................... 9
5 Countersignature and Registration................... 9
6 Transfer, Split Up, Combination and
Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen
Right Certificates.................................. 10
7 Exercise of Rights.................................. 11
8 Cancellation and Destruction of
Right Certificates.................................. 13
9 Reservation and Availability of
Capital Stock....................................... 13
10 Securities Record Date.............................. 14
11 Adjustment of Exercise Price,
Number of Shares Issuable Upon Exercise of
Rights or Number of Rights.......................... 14
12 Certificate of Adjusted Exercise Price or
Number of Shares Issuable Upon Exercise
of Rights........................................... 20
13 Consolidation, Merger, or Sale or Transfer
of Assets or Earning Power.......................... 21
14 Fractional Rights and Fractional Shares............. 23
15 Rights of Action.................................... 24
16 Agreement of Right Holders.......................... 25
17 Right Holder and Right Certificate
Holder Not Deemed a Stockholder..................... 25
18 Concerning the Rights Agent......................... 25
</TABLE>
(i)
<PAGE>
TABLE OF CONTENTS
-----------------
(continued)
<TABLE>
<CAPTION>
Section Page
------- ----
<S> <C>
19 Merger or Consolidation or Change
of Name of Rights Agent ............................ 26
20 Duties of Rights Agent ............................. 26
21 Change of Rights Agent ............................. 28
22 Issuance of New Right Certificates ................. 29
23 Redemption of Rights ............................... 29
24 Exchange of Rights ................................. 30
25 Notice of Certain Events ........................... 31
26 Notices ............................................ 32
27 Supplements and Amendments ......................... 33
28 Certain Covenants .................................. 33
29 Successors ......................................... 34
30 Benefits of this Agreement ......................... 34
31 Severability ....................................... 34
32 Governing Law ...................................... 34
33 Counterparts ....................................... 34
34 Descriptive Headings ............................... 34
</TABLE>
(ii)
<PAGE>
TABLE OF EXHIBITS
-----------------
Exhibit A -- Form of Certificate of Designations
Exhibit B -- Form of Right Certificate
Exhibit C -- Form of Summary of the Rights
(iii)
<PAGE>
TABLE OF DEFINED TERMS
----------------------
<TABLE>
<CAPTION>
Term Defined Page Section
------------ ---- -------
<S> <C> <C>
Adjustment Shares 15 11(a)(ii)
Affiliate 1 1(a)
Agreement 1 Introduction
Associate 1 1(a)
Beneficially Own 1 1(b)
Beneficial Owner 1 1(b)
Business Day 3 1(c)
Close of Business 3 1(d)
Closing Price 4 1(e)
Common Share 3 1(f)
Common Share Equivalent 15 11(a)(iii)
Company (Jacobs Engineering Group Inc.) 1 Introduction
Company (following a Section 13(a) Event) 22 13(a)(iii)
Current Market Price 4 1(g)
Distribution Date 7 3(a)
Exchange Act 4 1(i)
Exchange Ratio 30 24(a)
Exempt Person 4 1(j)
Exercise Price 11 7(c)
Expiration Date 5 1(l)
Independent Director 5 l(m)
NASDAQ 3 1(e)
Person 5 1(n)
</TABLE>
(iv)
<PAGE>
TABLE OF DEFINED TERMS
----------------------
(continued)
<TABLE>
<CAPTION>
Term Defined Page Section
------------ ---- -------
<S> <C> <C>
Preferred Share 5 1(o)
Preferred Share Equivalent 16 11(b)
Record Date 1 Recital
Redemption Date 5 l(q)
Redemption Price 30 23(a)
Right 1 Recital
Rights Agent 1 Introduction
Section 11(a)(ii) Event 15 11(a)(ii)
Section 13(a) Event 21 13(a)
Securities Act 6 1(u)
Subsidiary 6 l(v)
Surviving Person 21 13(a)
Trading Day 6 l(w)
Unavailable Adjustment Shares 15 11(a)(iii)
Unavailable Exchange Shares 31 24(c)
Voting Share 6 1(x)
15% Ownership Date 6 1(y)
15% Stockholder 6 l(z)
</TABLE>
(v)
<PAGE>
RIGHTS AGREEMENT
This Rights Agreement ("Agreement") is made and entered into as of the
20th day of December, 1990 by and between Jacobs Engineering Group Inc., a
Delaware corporation (the "Company"), and First Interstate Bank, Ltd. (the
"Rights Agent").
WHEREAS, the Board of Directors of the Company has authorized and
declared a dividend of one preferred stock purchase right (a "Right") for each
Common Share (as hereinafter defined) of the Company, which dividend is payable
on January 4, 1991 (the "Record Date") to the holders of record of Common Shares
as of the Close of Business (as hereinafter defined) on such date;
WHEREAS, the Board of Directors of the Company has further authorized
and directed the issuance of one (subject to adjustment of such number as
provided in this Agreement) Right for (A) each Common Share that shall be issued
by the Company at any time after the Record Date and prior to the earliest of
the date of the first Section 11(a)(ii) Event, the date of the first Section
13(a) Event, the Redemption Date or the Expiration Date (as such terms are
hereinafter defined), and (B) each Common Share that shall be issued by the
Company at any time on or after the earlier of the date of the first Section
11(a)(ii) Event or the date of the first Section 13(a) Event and prior to the
earlier of the Redemption Date or the Expiration Date pursuant to the exercise
of conversion rights, exchange rights, rights (other than Rights), warrants or
options that shall have been issued or granted prior to the earlier of the date
of the first Section 11(a)(ii) Event or the date of the first Section 13(a)
Event, unless the Board of Directors shall provide otherwise at the time of the
issuance or grant of such conversion rights, exchange rights, rights (other than
Rights), warrants or options; and
WHEREAS, in connection with the matters referred to herein, the
Company desires to appoint the Rights Agent to act on behalf of the Company for
the benefit of the holders of Rights, and the Rights Agent is willing so to act;
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual agreements set forth herein, and for the benefit of the holders of
Rights, the parties hereto hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
-------------------
following terms have the meanings indicated:
(a) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 promulgated under the Exchange Act, as in
effect on the date hereof.
(b)(i) A Person shall be deemed the "Beneficial Owner" of and shall be
deemed to "Beneficially Own":
<PAGE>
(A) any securities that such Person or any of such Person's Affiliates
or Associates beneficially owns, directly or indirectly, for purposes of
Section 13(d) of the Exchange Act and Rule 13d-3 promulgated under the
Exchange Act, in each case as in effect on the date hereof;
(B) any securities that such Person or any of such Person's Affiliates
or Associates has the right to acquire (whether such right is exercisable
immediately, or only after the passage of time, compliance with regulatory
requirements, the fulfillment of a condition, or otherwise) pursuant to any
agreement, arrangement or understanding, or upon the exercise of conversion
rights, exchange rights, rights (other than the Rights), warrants or
options, or otherwise, provided that a Person shall not be deemed the
Beneficial Owner of, or to Beneficially Own, securities tendered pursuant
to a tender offer or exchange offer made by or on behalf of such Person or
any of such Person's Affiliates or Associates until such tendered
securities are accepted for purchase or exchange;
(C) any securities that such Person or any such Person's Affiliates or
Associates has the right to vote, alone or in concert with others, pursuant
to any agreement, arrangement or understanding, provided that a Person
shall not be deemed the Beneficial Owner of, or to Beneficially Own, any
security if the agreement, arrangement or understanding to vote such
security (1) arises solely from a revocable proxy given to such Person or
any of such Person's Affiliates or Associates in response to a public proxy
solicitation made pursuant to and in accordance with the applicable rules
and regulations of the Exchange Act, and (2) is not also then reportable on
Schedule 13D under the Exchange Act (or any comparable or successor
report);
(D) any securities that are Beneficially Owned, directly or
indirectly, by any other Person with which such Person or any of such
Person's Affiliates or Associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting (other than
voting pursuant to a revocable proxy as described in the proviso to Section
l(b)(i)(C) hereof) or disposing of any securities of the Company; and
(E) on any day on or after the Distribution Date, all Rights that
prior to such date were represented by certificates for Common Shares that
such Person Beneficially Owns on such day.
(ii) Notwithstanding anything to the contrary in this Section l(b), a
Person engaged in business as an underwriter of securities shall not be deemed
to be the Beneficial Owner of, or to Beneficially Own, any securities acquired
through such
2
<PAGE>
Person's participation in good faith in a firm commitment underwriting
until the expiration of 40 days after the date of such acquisition.
(iii) Jacobs Family Foundation, Inc., a California nonprofit public
benefit corporation, Dr. Joseph J. Jacobs, Violet J. Jacobs and each
currently existing trust, plan or other entity or vehicle established by
Dr. Joseph J. Jacobs, solely or jointly with Violet J. Jacobs, for the
benefit of Dr. Joseph J. Jacobs, Violet J. Jacobs or any lineal descendent
of the parents of Dr. Joseph J. Jacobs, are each conclusively deemed to be
an Affiliate, on the date hereof, of each of Dr. Joseph J. Jacobs, Violet
J. Jacobs, Jacobs Family Foundation, Inc. and each such trust, plan or
other entity or vehicle. Notwithstanding anything to the contrary in this
Section l(b), any Person who is not an Affiliate, director or member of
Jacobs Family Foundation, Inc. on the date hereof and subsequently becomes
a director and/or member of Jacobs Family Foundation, Inc. shall not be
deemed to Beneficially Own any Voting Shares that are Beneficially, Owned
by Jacobs Family Foundation, Inc., and Jacobs Family Foundation, Inc. shall
not be deemed to Beneficially Own any Voting Shares that are Beneficially
Owned by such Person, solely by reason of such Person being such a director
and/or member.
(c) "Business Day" shall mean any day other than A Saturday, a Sunday
or a day on which banking institutions in the States of New York or California
are authorized or obligated by law or executive order to close.
(d) "Close of Business" on any given date shall mean 5:00 o'clock
p.m., Los Angeles time, on such date; provided, however, that if such date is
not a Business Day, it shall mean 5:00 o'clock p.m., Los Angeles time, on the
next succeeding Business Day.
(e) "Closing Price" of a stock or other security on any day shall be
the last sale price, regular way, per share of such stock or unit of such other
security on such day or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if such stock or other security is not listed or admitted to trading on the New
York Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which such stock or other security is listed or admitted
to trading or, if such stock or other security is not listed or admitted to
trading on any national securities exchange, the last quoted price or, if not so
quoted, the average of the high bid and low asked prices in the over-the-counter
market, as reported by the National Association of Securities Dealers, Inc.
Automated Quotations System ("NASDAQ") or such other system then in use or, if
3
<PAGE>
on any such date such stock or other security is not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker that makes a market in such stock or other security
and that is selected by the Board of Directors of the Company.
(f) "Common Share" shall mean one share of the Common Stock, par value
$1.00 per share, of the Company, unless used with reference to a Person other
than the Company, in which case it shall mean one share of the class of common
stock of such Person having the greatest voting power per share or, if such
Person is a Subsidiary of another Person, one Common Share of the Person that
ultimately controls such Person.
(g) "Current Market Price" per share of a stock or unit of any other
security on any date shall mean the average of the daily Closing Prices of such
stock or other security for the 30 consecutive Trading Days through and
including the Trading Day immediately preceding the date in question; provided,
however, that if any event shall have caused the Closing Price on any Trading
Day during such 30-day period not to be fully comparable with the Closing Price
on the date in question (or, if no Closing Price is available on the date in
question, on the Trading Day immediately preceding the date in question), then
each such noncomparable Closing Price so used shall be appropriately adjusted by
the Board of Directors in order to make the Closing Price on each Trading Day
during the period used for the determination of the Current Market Price fully
comparable with the Closing Price on such date in question (or, if applicable,
the immediately preceding Trading Day). "Current Market Price" per share of any
stock or unit of such other security that is not publicly held or so listed or
traded, and "Current Market Price" of any other property, shall mean the fair
value per share of such stock or unit of such other security, or the fair value
of such other property, respectively, as determined in good faith by the Board
of Directors of the Company based upon such appraisals or valuation reports of
such independent experts as the Board of Directors shall in good faith determine
appropriate, which determination shall be described in a statement filed by the
Company with the Rights Agent.
(h) "Distribution Date" shall have the meaning ascribed to it in
Section 3 hereof.
(i) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(j) "Exempt Person" shall mean the Company, any wholly-owned
Subsidiary of the Company, any employee benefit plan of the Company or of a
Subsidiary of the Company, and any Person holding Voting Shares for or pursuant
to the terms of any such employee benefit plan.
(k) "Exercise Price" shall have the meaning ascribed to it in Section
7(c) hereof.
4
<PAGE>
(l) "Expiration Date" shall mean December 20, 2000.
(m) "Independent Director" shall mean any director of the Company who
(i) became a director of the Company prior to the 15% Ownership Date or (ii)
became a director of the Company on or after the 15% Ownership Date, was
recommended to become a director of the Company by a majority of the Independent
Directors then in office and is not (A) a 15% Stockholder or an Affiliate or
Associate of a 15% Stockholder, (B) an officer, director or employee of such 15%
Stockholder, Affiliate or Associate, or (C) a relative or nominee of any of the
foregoing. For purposes of this subsection (m), a director shall be deemed to be
a "nominee" of a Person referred to in clause (ii) above if such director was
elected to the Board of Directors of the Company by a vote of stockholders in
which such director failed to receive the affirmative majority of the votes cast
by Persons other than such Person and such Person's Affiliates and Associates.
Whenever this Agreement requires or allows action to be taken by a majority of
the Independent Directors, with or without the concurrence of a specified
minimum number of Independent Directors, if necessary for such action to be
valid under applicable law, such action may be taken by the Board of Directors
or a duly authorized committee thereof, provided that the number of Independent
Directors who are members of the Board of Directors or of such committee and who
vote in favor of such action constitutes a majority of the Independent Directors
then in office and equals or exceeds any such specified minimum number of
Independent Directors.
(n) "Person" shall mean any individual, firm, partnership,
corporation, association, group (as such term is used in Rule 13d-5 promulgated
under the Exchange Act as in effect on the date hereof) or other entity, and
shall include any successor (by merger or otherwise) of such entity.
(o) "Preferred Share" shall mean one share of the Series A Junior
Participating Cumulative Preferred Stock, par value $1.00 per share, of the
Company, which shall have the rights and preferences set forth in the form of
Certificate of Designations attached hereto as Exhibit A.
(p) "Record Date" shall have the meaning ascribed to it in the
recitals hereto.
(q) "Redemption Date" shall mean the date of the action of a majority,
but not less than three, of the Independent Directors directing the Company to
redeem the Rights pursuant to Section 23(a) hereof or exchange the Rights
pursuant to Section 24(a) hereof.
(r) "Redemption Price" shall have the meaning ascribed to it in
Section 23(a) hereof.
(s) "Section 11(a)(ii) Event" shall have the meaning ascribed to it in
Section 11(a)(ii) hereof.
(t) "Section 13(a) Event" shall have the meaning ascribed to it in
Section 13(a) hereof.
5
<PAGE>
(u) "Securities Act" shall mean the Securities Act of 1933, as
amended.
(v) "Subsidiary" of any Person shall mean any corporation or other
Person of which equity securities or equity interests representing a majority of
the voting power are owned, directly or indirectly, or which is effectively
controlled, by such Person.
(w) "Trading Day" shall mean, as to any stock or other security, a day
on which the principal national securities exchange on which such stock or other
security is listed or admitted to trading is open for the transaction of
business or, if such stock or other security is not listed or admitted to
trading on any national securities exchange, a Business Day.
(x) "Voting Share" shall mean (i) a Common Share of the Company and
(ii) any other share of capital stock of the Company entitled to vote generally
in the election of directors or entitled to vote together with the Common Shares
in respect of any merger, consolidation, sale of all or substantially all of the
Company's assets, liquidation, dissolution or winding up. References in this
Agreement to a percentage or portion of the outstanding Voting Shares shall be
deemed a reference to the percentage or portion of the total votes entitled to
be cast by the holders of the outstanding Voting Shares.
(y) "15% Ownership Date" shall mean the first date of public
announcement (which, for purposes of this definition, shall include, without
limitation, a report filed pursuant to Section 13(d) of the Exchange Act) by the
Company or a 15% Stockholder containing the facts by virtue of which a Person
has become a 15% Stockholder.
(z) "15% Stockholder" shall mean any Person that, together with all
Affiliates and Associates of such Person, hereafter acquires Beneficial
Ownership of, in the aggregate, a number of Voting Shares of the Company equal
to 1% or more of the Voting Shares then outstanding and thereupon or thereafter
Beneficially Owns 15% or more of the Voting Shares of the Company then
outstanding; provided, however, that the term "15% Stockholder" shall not
include: (i) an Exempt Person; or (ii) any Person if such Person would not
otherwise be a 15% Stockholder but for a reduction in the number of outstanding
Voting Shares resulting from a stock repurchase program or other similar plan of
the Company or from a self tender offer of the Company, which plan or tender
offer commenced on or after the date hereof, provided, however, that the term
"15% Stockholder" shall include s6'ch Person from and after the first date upon
which (A) such Person, since the date of the commencement of such plan or tender
offer, shall have acquired Beneficial Ownership of, in the aggregate, a number
of Voting Shares of the Company equal to 1% or more of the Voting Shares of the
Company then outstanding and (B) such Person, together with all Affiliates and
Associates of such Person, shall Beneficially Own 15% or more of the Voting
Shares of the Company then outstanding. In
6
<PAGE>
calculating the percentage of the outstanding Voting Shares that are
Beneficially Owned by a Person for purposes of this subsection (z), Voting
Shares that are Beneficially Owned by such Person shall be deemed outstanding,
and Voting Shares that are not Beneficially Owned by such Person and that are
subject to issuance upon the exercise or conversion of outstanding conversion
rights, exchange rights, rights (other than Rights), warrants or options shall
not be deemed outstanding. Any determination made by the Independent Directors
as to whether any Person is or is not a 15% Stockholder shall be conclusive and
binding upon all holders of Rights.
Section 2. Appointment 0f Rights Agent. The Company hereby appoints
---------------------------
the Rights Agent to act as agent for the Company and the holders of Rights in
accordance with the terms and conditions hereof, and the Rights Agent hereby
accepts such appointment. The Company may from time to time appoint such co-
Rights Agents as it may deem necessary or desirable.
Section 3. Issuance of Right Certificates.
------------------------------
(a) "Distribution Date" shall mean the date, after the date hereof,
that is the earliest of (i) the tenth Business Day (or such later day as shall
be designated by a majority, but not less than three, of the Independent
Directors) following the date of the commencement of, or the first public
announcement of the intent of any Person, other than an Exempt Person, to
commence, a tender offer or exchange offer, the consummation of which would
cause any Person to become a 15% Stockholder, (ii) the date of the first
Section 11(a)(ii) Event or (iii) the date of the first Section 13(a) Event.
(b) Until the Distribution Date, (i) the Rights shall be represented
by certificates for Common Shares (all of which certificates for Common Shares
shall be deemed to be Right Certificates) and not by separate Right
Certificates, (ii) the record holder of the Common Shares represented by each of
such certificates shall be the record holder of the Rights represented thereby
and (iii) the Rights shall be transferable only in connection with the transfer
of Common Shares. Until the earliest of the Distribution Date, the Redemption
Date or the Expiration Date, the surrender for transfer of such certificates for
Common Shares shall also constitute the surrender for transfer of the Rights
represented thereby.
(c) As soon as practicable after the Distribution Date, and after
notification by the Company, the Rights Agent shall send by first-class,
postage-prepaid mail to each record holder of Common Shares, as of the Close of
Business on the Distribution Date, at the address of such holder shown on the
records of the Company, a Right Certificate substantially in the form of Exhibit
B hereto representing one Right for each Common Share so held. From and after
the Distribution Date, the Rights shall be represented solely by such Right
Certificates and may only be transferred by the transfer of such Right
Certificates, and the holders of such Right
7
<PAGE>
Certificates, as listed in the records of the Company or any transfer agent or
registrar for such Rights, shall be the record holders of such Rights.
(d) As soon as practicable after the Record Date, the Company shall
send a copy of a Summary of the Rights in substantially the form attached hereto
as Exhibit C by first-class, postage-prepaid mail to each record holder of
Common Shares as of the Close of Business on the Record Date at the address of
such holder shown on the records of the Company.
(e) Certificates for Common Shares issued at any time after the Record
Date and prior to the earliest of the Distribution Date, the Redemption Date or
the Expiration Date, shall have impressed on, printed on, written on or
otherwise affixed to them the following legend:
This certificate also represents Rights that entitle the
holder hereof to certain rights as set forth in a Rights
Agreement dated as of December 20, 1990 by and between the
Corporation and First Interstate Bank, Ltd., as Rights Agent
(the "Rights Agreement"), the terms and conditions of which
are hereby incorporated herein by reference and a copy of
which is on file at the principal executive offices of the
Corporation. Under certain circumstances specified in the
Rights Agreement, such Rights will be represented by
separate certificates and will no longer be represented by
this certificate. Under certain circumstances specified in
the Rights Agreement, Rights beneficially owned by certain
persons may become null and void. The Corporation will mail
to the record holder of this certificate a copy of the
Rights Agreement without charge promptly following receipt
of a written request therefor.
(f) Certificates for Common Shares issued at any time on or after the
Distribution Date and prior to the earlier of the Redemption Date or the
Expiration Date shall have impressed on, printed on, written on or otherwise
affixed to them the following legend:
This certificate does not represent any Right issued pursuant to the terms
of a Rights Agreement dated as of December 20, 1990 by and between the
Corporation and First Interstate Bank, Ltd., as Rights Agent.
(g) In the event that at any time on or after the earlier of the date
of the first Section 11(a)(ii) Event or the date of the first Section 13(a)
Event and prior to the earlier of the Redemption Date or the Expiration Date,
the Company shall issue any Common Shares pursuant to the exercise of conversion
rights, exchange
8
<PAGE>
rights, rights (other than Rights), warrants or options that shall have been
issued or granted prior to the earlier of the date of the first Section
11(a)(ii) Event or the date of the first Section 13(a) Event, then, unless the
Board of Directors of the Company shall have provided otherwise at the time of
the issuance or grant of such conversion rights, exchange rights, rights (other
than Rights), warrants or options, the Rights Agent shall, as soon as
practicable after the date of such event, send by first-class, postage-prepaid
mail to the record holder of such Common Shares, at the address of such holder
as shown on the records of the Company, a Right Certificate substantially in the
form of Exhibit B hereto representing one Right for each Common Share so issued.
(h) Notwithstanding the foregoing provisions of this Section 3, the
Rights Agent shall not send any Right Certificate to any 15% Stockholder or any
of its Affiliates or Associates or to any Person if the Rights held by such
Person are Beneficially Owned by a 15% Stockholder or any of its Affiliates or
Associates. Any determination made by a majority of the Independent Directors as
to whether any Common Shares are or were Beneficially Owned at any time by a 15%
Stockholder or an Affiliate or Associate of a 15% Stockholder shall be
conclusive and binding upon all holders of Rights.
Section 4. Form of Right Certificates. The Right Certificates and the
--------------------------
form of assignment, including certificate, and the form of election to purchase,
including certificate, printed on the reverse thereof, when, as and if issued,
shall be substantially the same as Exhibit B hereto, and may have such marks of
identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not inconsistent
with the provisions of this Agreement, or as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange upon which the Rights or the securities
of the Company issuable upon exercise of the Rights may from time to time be
listed, or to conform to usage. Subject to Section 22 hereof, Right
Certificates, whenever issued, that are issued in respect of Common Shares that
were issued and outstanding as of the Close of Business on the Distribution
Date, shall be dated as of the Distribution Date.
Section 5. Countersignature and Registration.
---------------------------------
(a) The Right Certificates shall be executed on behalf of the Company
by its Chairman of the Board, its Vice Chairman of the Board, its President or
any Vice President, either manually or by facsimile signature, and may have
affixed thereto the Company's seal or a facsimile thereof attested by its
Secretary or any Assistant Secretary, either manually or by facsimile signature.
The Right Certificates shall be manually countersigned by the Rights Agent and
shall not be valid for any purpose unless so countersigned. In case any officer
of the Company who shall have signed any of the Right Certificates shall cease
to be such officer of the Company before
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countersignature by the Rights Agent and issuance and delivery by the Company,
such Right Certificates may nevertheless be countersigned by the Rights Agent
and issued and delivered by the Company with the same force and effect as though
the person who signed such Right Certificates had not ceased to be such officer
of the Company. Any Right Certificate may be signed on behalf of the Company by
any person who at the actual date of such execution shall be a proper officer of
the Company to sign such Right Certificate, even though such person was not such
an officer at the date of the execution of this Agreement.
(b) Following the Distribution Date, the Rights Agent shall keep or
cause to be kept at its principal offices books for registration and transfer of
the Right Certificates issued hereunder. Such books shall show the names and
addresses of the respective holders of Right Certificates, the number of Rights
represented on its face by each Right Certificate and the date of each Right
Certificate.
Section 6. Transfer, Split Up, Combination and Exchange of Right
-----------------------------------------------------
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.
---------------------------------------------------------------------
(a) Subject to the provisions of Sections 6(c), 7(d) and 14 hereof, at
any time after the Close of Business on the Distribution Date, and so long as
the Rights represented thereby remain outstanding, any one or more Right
Certificates may be transferred, split up, combined or exchanged for one or more
Right Certificates representing the same aggregate number of Rights as the Right
Certificates surrendered. Any registered holder desiring to transfer, split up,
combine or exchange one or more Right Certificates shall make such request in
writing delivered to the Rights Agent, and shall surrender the Right
Certificates to be transferred, split up, combined or exchanged at the office of
the Rights Agent with the form of assignment, including certificate, on the
reverse side thereof completed and duly executed, with signature guaranteed.
Thereupon, the Rights Agent shall countersign and deliver to the person entitled
thereto one or more Right Certificates, as so requested. The Company may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer, split up, combination or exchange of
Right Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Right Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them and, at the Company's request,
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
such Right Certificate if mutilated, the Company shall issue and deliver to the
Rights Agent for delivery to the record holder of such Right Certificate a new
Right Certificate of
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like tenor in lieu of such lost, stolen, destroyed or mutilated Right
Certificate.
(c) Notwithstanding anything to the contrary in this Section 6, the
Rights Agent shall not countersign and deliver a Right Certificate to any Person
if such Right Certificate represents, or would represent when held by such
Person, Rights that had become or would become null and void pursuant to Section
7(d) hereof.
Section 7. Exercise of Rights.
------------------
(a) Until the Distribution Date, no Right may be exercised.
(b) Subject to Section 7(d) and (g) hereof and the other provisions of
this Agreement, at any time after the Close of Business on the Distribution Date
and prior to the Close of Business on the earlier of the Redemption Date or the
Expiration Date, the registered holder of any Right Certificate may exercise the
Rights represented thereby in whole or in part upon surrender of such Right
Certificate, with the form of election to purchase, including certificate, on
the reverse side thereof completed and duly executed, with signature guaranteed,
to the Rights Agent at the office of the Rights Agent at Stock Transfer
Department, First Interstate Bank, Ltd., 2661 West Agoura Road, Calabasas,
California 91302, together with payment of the Exercise Price for each Right
exercised. Upon the exercise of an exercisable Right and payment of the Exercise
Price in accordance with the provisions of this Agreement, the holder of such
Right shall be entitled to receive, subject to adjustment as provided herein,
one one-hundredth of a Preferred Share (or, following the occurrence of a
Section 11(a)(ii) Event or a Section 13(a) Event, Common Shares and/or other
securities).
(c) The Exercise Price for the exercise of each Right shall initially
be $90 and shall be payable in lawful money of the United States of America in
accordance with Section 7(f) hereof. The Exercise Price and the number of
Preferred Shares (or, following the occurrence of a Section 11(a)(ii) Event or a
Section 13(a) Event, Common Shares and/or other securities) to be acquired upon
exercise of a Right shall be subject to adjustment from time to time as provided
in Sections 7(e), 11 and 13 hereof and the other provisions of this Agreement.
(d) Notwithstanding anything in this Agreement to the contrary, from
and after the earlier of the date of the first Section 11(a)(ii) Event or the
date of the first Section 13(a) Event, any Rights that are or were Beneficially
Owned by a 15% Stockholder or any Affiliate or Associate of a 15% Stockholder at
any time on or after the Distribution Date shall be null and void, and for all
purposes of this Agreement such Rights shall thereafter be deemed not to be
outstanding, and any holder of such Rights (whether or not such holder is a 15%
Stockholder or an Affiliate or Associate of a 15% Stockholder) shall thereafter
have no right to exercise or exchange such Rights.
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<PAGE>
(e) Prior to the Distribution Date, if a majority, but not less than
three, of the Independent Directors shall have determined that such action
adequately protects the interests of the holders of Rights, the Company may, in
its discretion, substitute for all or any portion of the Preferred Shares that
would otherwise be issuable (after the Close of Business on the Distribution
Date) upon the exercise of each Right and payment of the Exercise Price, (i)
cash, (ii) other equity securities of the Company, (iii) debt securities of the
Company, (iv) other property or (v) any combination of the foregoing, in each
case having an aggregate Current Market Price equal to the aggregate Current
Market Price of the Preferred Shares for which substitution is made. Subject to
Section 7(d) hereof, in the event that the Company takes any action pursuant to
this Section 7(e), such action shall apply uniformly to all outstanding Rights.
(f) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase, including certificate, completed
and duly executed, with signature guaranteed, accompanied by payment of the
Exercise Price for each Right to be exercised and an amount equal to any
applicable transfer tax required to be paid by the holder of such Right
Certificate in accordance with Section 9 hereof by certified check or cashier's
check payable to the order of the Company, the Rights Agent shall thereupon
promptly (i) requisition from the transfer agent of the Preferred Shares (or,
following the occurrence of a Section 11(a)(ii) Event or a Section 13(a) Event,
Common Shares and/or securities), certificates for the number of Preferred
Shares (or such other securities) to be purchased, and the Company hereby
irrevocably authorizes such transfer agent to comply with all such requests,
and/or, as provided in Section 14 hereof, requisition from the depositary agent
described therein depositary receipts representing such number of one-hundredths
of a Preferred Share (or such other securities) as are to be purchased (in which
case certificates for the Preferred Shares (or such other securities)
represented by such receipts shall be deposited by the transfer agent with such
depositary agent) and the Company hereby directs such depositary agent to comply
with such request, (ii) when appropriate, requisition from the Company the
amount of cash to be paid in lieu of issuance of fractional Preferred Shares (or
such other securities) in accordance with Section 14 hereof, (iii) after receipt
of such certificates, depositary receipts or cash, cause the same to be
delivered to or upon the order of the registered holder of such Right
Certificate, registered in such name or names as may be designated by such
holder and (iv) when appropriate, after receipt thereof, deliver such cash to or
upon the order of the registered holder of such Right Certificate.
(g) Notwithstanding the foregoing provisions of this Section 7, the
exercisability of the Rights shall be suspended for such period as shall
reasonably be necessary for the Company to register under the Securities Act and
any applicable securities law of any jurisdiction the Preferred Shares to be
issued pursuant to the exercise of the Rights; provided, however, that nothing
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<PAGE>
contained in this Section 7 shall relieve the Company of its obligations under
Section 9(c) hereof.
(h) In case the registered holder of any Right Certificate shall
exercise less than all of the Rights represented thereby, a new Right
Certificate representing Rights equivalent to the Rights remaining unexercised
shall be issued by the Rights Agent to the registered holder of such Right
Certificate or to such holder's duly authorized assigns, subject to the
provisions of Section 14 hereof.
Section 8. Cancellation and Destruction Of Right Certificates. All
--------------------------------------------------
Right Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in canceled form,
or, if surrendered to the Rights Agent, shall be canceled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
this Agreement. The Company shall deliver to the Rights Agent for cancellation
and retirement, and the Rights Agent shall so cancel and retire, any other Right
Certificate purchased or acquired by the Company otherwise than upon the
exercise thereof. The Rights Agent shall deliver all canceled Right Certificates
to the Company or shall, at the written request of the Company, destroy such
canceled Right Certificates, and in such case shall deliver a certificate of
destruction thereof to the Company.
Section 9. Reservation and Availability of Capital Stock.
---------------------------------------------
(a) Subject to Section 7(e) hereof, the Company shall cause to be
reserved and kept available out of its authorized and unissued equity securities
(or out of its authorized and issued equity securities held in its treasury),
the number of such equity securities that will from time to time be sufficient
to permit the exercise in full of all outstanding Rights.
(b) In the event that any securities issuable upon exercise of the
Rights are listed on any national securities exchange, the Company shall use its
best efforts, from and after such time as the Rights become exercisable, to
cause all such securities issued or reserved for such issuance to be listed on
such exchange upon official notice of issuance upon such exercise.
(c) If necessary to permit the issuance of securities upon exercise of
the Rights, the Company shall use its best efforts, from and after the
Distribution Date, to register such securities under the Securities Act and any
applicable securities laws and to keep such registration effective until the
earlier of the Redemption Date or the Expiration Date.
(d) The Company shall take all such action as may be necessary to
ensure that all securities delivered upon exercise of the Rights shall, at the
time of delivery of the certificates for such securities (subject to payment of
the Exercise Price), be duly
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<PAGE>
and validly authorized and issued and fully paid and nonassessable securities.
(e) The Company shall pay when due and payable any and all federal and
state transfer taxes and charges that may be payable in respect of the issuance
or delivery of the Right Certificates or of any securities upon the exercise of
Rights. The Company shall not, however, be required to pay any transfer tax that
may be payable in respect of any transfer or delivery of a Right Certificate to
a Person other than, or the issuance or delivery of a certificate for securities
in respect of a name other than that of, the registered holder of the Right
Certificate representing Rights surrendered for exercise, or to issue or deliver
any certificate for securities upon the exercise of any Right until any such tax
shall have been paid (any such tax being payable by the holder of such Right
Certificate at the time of surrender) or until it has been established to the
Company's satisfaction that no such tax is due.
(f) With respect to the Common Shares and/or other securities issuable
pursuant to Section 11(a)(ii) and (iii) hereof, the foregoing covenants shall be
applicable only upon and following the occurrence of a Section 11(a)(ii) Event.
Section 10. Securities Record Date. Each person in whose name any
----------------------
certificate for securities of the Company is issued upon the exercise of Rights
shall for all purposes be deemed to have become the holder of record of the
securities represented thereby on, and such certificate shall be dated, the date
upon which the Right Certificate representing such Rights was duly surrendered
and payment of the Exercise Price (and any applicable transfer taxes) was made;
provided, however, that if the date of such surrender and payment is a date upon
which the securities transfer books of the Company are closed, such person shall
be deemed to have become the record holder of such securities on, and such
certificate shall be dated, the next succeeding Business Day on which the
securities transfer books of the Company are open.
Section 11. Adjustment of Exercise Price, Number of Shares Issuable
-------------------------------------------------------
Upon Exercise of Rights or Number of Rights. The Exercise Price, the number and
-------------------------------------------
kind of securities that may be purchased upon exercise of a Right and the number
of Rights outstanding are subject to adjustment from time to time as provided in
this Section 11.
(a)(i) In the event that the Company shall at any time after the Close
of Business on the Record Date and prior to the Close of Business on the
earlier of the Redemption Date or the Expiration Date (A) declare or pay
any dividend on the Preferred Shares payable in Preferred Shares or Voting
Shares, (B) subdivide the outstanding Preferred Shares, (C) combine the
outstanding Preferred Shares into a smaller number of Preferred Shares or
(D) issue Preferred Shares or Voting Shares in a reclassification of the
Preferred Shares (including any such
14
<PAGE>
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), then, and upon each such
event, the number and kind of Preferred Shares or other securities issuable upon
the exercise of a Right on the date of such event shall be proportionately
adjusted so that the holder of any Right exercised on or after such date shall
be entitled to receive, upon the exercise thereof and payment of the Exercise
Price, the aggregate number and kind of Preferred Shares or other securities or
other property, as the case may be, that, if such Right had been exercised
immediately prior to such date and at a time when such Right was exercisable and
the transfer books of the Company were open, such holder would have owned upon
such exercise and would have been entitled to receive by virtue of such
dividend, subdivision, combination or reclassification. If an event occurs that
would require an adjustment under both this Section 11(a)(i) and Section
11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be
in addition to, and shall be made prior to, any adjustment required pursuant to
Section 11(a)(ii) hereof.
(ii) In the event (a "Section 11(a)(ii) Event") that a 15% Ownership Date
shall have occurred and neither the Redemption Date nor the Expiration Date
shall have occurred prior to the tenth Business Day following such 15% Ownership
Date, then, and upon each such event, proper provision shall be made so that
except as provided in Section 7(d) hereof, each holder of a Right shall
thereafter have the right to receive, upon the exercise thereof in accordance
with the terms of this Agreement and payment of the then current Exercise Price,
in lieu of the securities or other property otherwise purchasable upon such
exercise, such number of Common Shares of the Company as shall equal the result
obtained by multiplying the then current Exercise Price by the then number of
one-hundredths of a Preferred Share for which a Right was exercisable (or, if
the Distribution Date shall not have occurred prior to the date of such Section
11(a)(ii) Event, the number of one-hundredths of a Preferred Share for which a
Right would have been exercisable if the Distribution Date had occurred on the
Business Day immediately preceding the date of such Section 11(a)(ii) Event)
immediately prior to such Section 11(a)(ii) Event, and dividing that product by
50% of the Current Market Price (determined pursuant to Section 11(d) hereof) of
a Common Share on the date of occurrence of the relevant Section 11(a)(ii) Event
(such number of shares being hereinafter referred to as the "Adjustment
Shares"). Successive adjustments shall be made pursuant to this paragraph each
time a Section 11(a)(ii) Event occurs.
(iii) In the event that on the date of a Section 11(a)(ii) Event the
aggregate number of Common Shares that are authorized by the Company's
Certificate of Incorporation but not outstanding or reserved for issuance for
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<PAGE>
purposes other than upon exercise of the Rights is less than the aggregate
number of Adjustment Shares thereafter issuable upon the exercise in full
of the Rights in accordance with Section 11(a)(ii) hereof (the excess of
such number of Adjustment Shares over and above such number of Common
Shares being hereinafter referred to as the "Unavailable Adjustment
Shares"), then, and upon each such event, the Company shall substitute for
the pro rata portion of the Unavailable Adjustment Shares that would
otherwise be issuable thereafter upon the exercise of each Right and
payment of the Exercise Price, (A) cash, (B) other equity securities of the
Company (including, without limitation, shares of preferred stock of the
Company or units of such shares having the same Current Market Price as one
Common Share (a "Common Share Equivalent")), (C) debt securities of the
Company, (D) other property or (E) any combination of the foregoing, in
each case having an aggregate Current Market Price equal to the aggregate
Current Market Price of the Unavailable Adjustment Shares for which
substitution is made. Subject to Section 7(d) hereof, in the event that the
Company takes any action pursuant to this Section 11(a)(iii), such action
shall apply uniformly to all outstanding Rights.
(b) In the event that the Company shall, at any time after the Close
of Business on the Record Date and prior to the Close of Business on the earlier
of the Redemption Date or the Expiration Date, fix a record date prior to the
earlier of the Redemption Date or the Expiration Date for the issuance of
rights, options or warrants to all holders of Preferred Shares entitling them
initially to subscribe for or purchase Preferred Shares (or shares having the
same rights, privileges and preferences as the Preferred Shares ("Preferred
Share Equivalents")) or securities convertible into Preferred Shares or
Preferred Share Equivalents, at a price per Preferred Share or Preferred Share
Equivalent (or having a conversion price per share, if a security convertible
into Preferred Shares or Preferred Share Equivalents) less than the Current
Market Price per Preferred Share on such record date, then, and upon each such
event, the Exercise Price to be in effect after such record date shall be
determined by multiplying the Exercise Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be equal to the sum of
the number of Preferred Shares outstanding on such record date plus the number
of Preferred Shares that the aggregate offering price of the total number of
Preferred Shares and/or Preferred Share Equivalents to be so offered (and/or the
aggregate initial conversion price of the convertible securities to be so
offered) would purchase at such Current Market Price, and the denominator of
which shall be equal to the number of Preferred Shares outstanding on such
record date plus the number of additional Preferred Shares and/or Preferred
Share Equivalents to be offered for subscription or purchase (or into which the
convertible securities to be so offered are initially convertible); provided,
however, that if such rights, options or warrants are not exercisable
immediately upon issuance but become exercisable only upon the occurrence of a
specified event or the passage of a
16
<PAGE>
specified period of time, then the adjustment to the Exercise Price shall be
made and become effective only upon the occurrence of such event or such passage
of time, and such adjustment shall be made as if the record date for the
issuance of such rights, options or warrants had been the business day
immediately preceding the date upon which such rights, options or warrants
became exercisable. Preferred Shares owned by or held for the account of the
Company shall not be deemed outstanding for the purpose of any such computation.
Such adjustment to the Exercise Price shall be made successively whenever such a
record date is fixed, and in the event that such rights or warrants are not so
issued, the Exercise Price shall be adjusted to be the Exercise Price that would
then be in effect if such record date had not been fixed.
(c) In the event that the Company shall, at any time after the Close
of Business on the Record Date and prior to the Close of Business on the earlier
of the Redemption Date or the Expiration Date, fix a record date for the making
of a distribution to all holders of the Preferred Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the surviving corporation) of securities or assets (other than a
distribution of securities for which an adjustment is required under Section
11(a)(i) or (b) hereof or a regular quarterly cash dividend), then the Exercise
Price to be in effect after such record date shall be determined by multiplying
the Exercise Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be equal to the excess of the Current
Market Price per Preferred Share on such record date over and above the fair
market value of the portion of the securities or assets to be so distributed
with respect to one Preferred Share, and the denominator of which shall be equal
to such Current Market Price per Preferred Share. Such adjustments shall be made
successively whenever such a record date is fixed, and in the event that such a
distribution is not so made, the Exercise Price shall be adjusted to be the
Exercise Price that would then be in effect if such record date had not been
fixed.
(d) For the purpose of any computation under this Section 11, if the
Preferred Shares are not publicly held or traded, the "Current Market Price" per
Preferred Share shall be conclusively deemed to be the Current Market Price per
Common Share multiplied by 100.
(e) No adjustment in the Exercise Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in the Exercise
Price; provided, however, that any adjustments that by reason of this Section
11(e) are not required to be made shall be cumulated and taken into account in
any subsequent adjustment. All calculations under this Section 11 shall be made
to the nearest cent or to the nearest one-thousandth of a Common Share or other
share or one-millionth of a Preferred Share, as the case may be.
17
<PAGE>
(f) If, as a result of an adjustment made pursuant to Section 11(a)
hereof, the holder of any Right thereafter exercised shall become entitled to
receive any securities of the Company other than Preferred Shares, the number of
such other securities so receivable upon exercise of any Right shall be subject
to adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to Preferred Shares contained in this
Section 11, and the other provisions of this Agreement with respect to Preferred
Shares shall apply on like terms to any such other securities.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Exercise Price hereunder shall represent the right to
purchase, at the adjusted Exercise Price, the number of one-hundredths of a
Preferred Share purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided
in Section 11(i) below, upon each adjustment of the Exercise Price as a result
of the calculations made in Sections 11(b) and (c) hereof, each Right
outstanding immediately prior to the making of such adjustment shall thereafter
represent the right to purchase, at the adjusted Exercise Price, that number of
one-hundredths of a Preferred Share (calculated to the nearest one-millionth of
a Preferred Share) obtained by multiplying (i) the number of one-hundredths of a
Preferred Share purchasable upon the exercise of one Right immediately prior to
such adjustment of the Exercise Price by (ii) the Exercise Price in effect
immediately prior to such adjustment, and dividing the product so obtained by
the Exercise Price in effect immediately after such adjustment.
(i) The Company may elect, on or after the date of any adjustment of
the Exercise Price, to adjust the number of Rights instead of making any
adjustment in the number of Preferred Shares purchasable upon the exercise of a
Right. Each of the Rights outstanding after such adjustment of the number of
Rights shall be exercisable for the number of one-hundredths of a Preferred
Share for which a Right was exercisable immediately prior to such adjustment.
Each Right held of record prior to such adjustment of the number of Rights shall
become that number of Rights (calculated to the nearest one one-thousandth of a
Right) obtained by dividing the Exercise Price in effect immediately prior to
the adjustment of the Exercise Price by the Exercise Price in effect immediately
after such adjustment of the Exercise Price. The Company shall make a public
announcement of its election to adjust the number of Rights pursuant to this
Section 11(i), indicating the record date for the adjustment and, if known at
the time, the amount of the adjustment to be made. Such record date may be the
date on which the Exercise Price is adjusted or any day thereafter, but, if
separate Right Certificates have been issued, it shall be at least 10 days after
the date of such public announcement. If separate Right Certificates have been
issued, upon each adjustment of the number of
18
<PAGE>
Rights pursuant to this Section 11(i), the Company shall, as promptly as
practicable, cause to be distributed to holders of record of Right Certificates
on such record date Right Certificates representing, subject to Section 14
hereof, the additional Rights to which such holders shall be entitled as a
result of such adjustment or, at the option of the Company, cause to be
distributed to such holders of record in substitution and replacement for the
Right Certificates held by such holders prior to the date of such adjustment,
and upon surrender thereof if required by the Company, new Right Certificates
representing all the Rights to which such holders shall be entitled after such
adjustment. Right Certificates to be so distributed shall be issued, executed
and countersigned in the manner provided for herein (and may bear, at the option
of the Company, the adjusted Exercise Price) and shall be registered in the
names of the holders of record of Right Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in the Exercise Price or
the number of one-hundredths of a Preferred Share issuable upon the exercise of
one Right, the Right Certificates theretofore and thereafter issued may continue
to express the Exercise Price per one one-hundredth of a Preferred Share and the
number of Preferred Shares issuable upon the exercise of one Right that were
expressed in the initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Exercise Price below one one-hundredth of the then par value, if any, of the
Preferred Shares issuable upon exercise of the Rights, the Company shall take
any corporate action that may, in the advice or opinion of its counsel, be
necessary in order that the Company may validly and legally issue fully paid and
nonassessable one one-hundredths of a Preferred Share at such adjusted Exercise
Price.
(1) In any case in which this Section 11 shall require that an
adjustment in the Exercise Price be made effective as of a record date for a
specified event, the Company may elect to defer, until the occurrence of such
event, the issuance to the holder of any Right exercised after such record date
of the number of one-hundredths of a Preferred Share and other capital stock or
securities of the Company, if any, issuable upon such exercise over and above
the number of one-hundredths of a Preferred Share and other capital stock or
securities of the Company, if any, issuable upon such exercise on the basis of
the Exercise Price in effect prior to such adjustment; provided, however, that
the Company shall deliver to such holder a due bill or other appropriate
instrument representing such holder's right to receive such additional shares
upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such further adjustments in the number of one-
hundredths of a Preferred Share
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<PAGE>
that may be purchased upon exercise of one Right, and such further adjustments
in the Exercise Price, in addition to those adjustments expressly required by
this Section 11, as and to the extent that it in its sole discretion shall
determine to be advisable in order that any (i) consolidation or subdivision of
the Preferred Shares, (ii) issuance wholly for cash of any Preferred Shares at
less than the Current Market Price thereof, (iii) issuance wholly for cash of
Preferred Shares or securities that by their terms are convertible into or
exchangeable for Preferred Shares, (iv) dividends on Preferred Shares payable in
Preferred Shares or (v) issuance of rights, options or warrants referred to
Section 11(b) hereof, hereafter made by the Company to holders of its Preferred
Shares shall not be taxable to such stockholders.
(n) In the event that the Company shall, at any time after the Close
of Business on the Record Date and prior to the Close of Business on the
earliest of the date of the first Section 11(a)(ii) Event, the date of the first
Section 13(a) Event, the Redemption Date or the Expiration Date, (i) pay any
dividend on the Common Shares payable in Common Shares, (ii) subdivide the
outstanding Common Shares, (iii) combine the outstanding Common Shares into a
smaller number of Common Shares or (iv) issue Common Shares in a
reclassification of the Common Shares (including any such reclassification in
connection with a consolidation or merger in which the Company is the continuing
or surviving corporation), then, and upon each such event, the number of
Preferred Shares issuable upon the exercise of a Right on the date of such event
shall be adjusted so that the holder of any Right exercised on or after the date
of such event shall be entitled to receive, upon the exercise thereof and
payment of the Exercise Price, such number of one-hundredths of a Preferred
Share as shall equal the result obtained by multiplying the number of one-
hundredths of a Preferred Share for which a Right was exercisable (or, if the
Distribution Date shall not have occurred prior to the date of such event, the
number of one-hundredths of a Preferred Share for which a Right would have been
exercisable if the Distribution Date had occurred on the Business Day
immediately preceding the date of such event) immediately prior to such event by
a fraction, the numerator of which shall be equal to the number of Common Shares
outstanding immediately prior to such event and the denominator of which shall
be equal to the number of Common Shares outstanding immediately after such
event. Successive adjustments shall be made pursuant to this Section 11(n) each
time such a dividend is paid or such a subdivision, combination or
reclassification is effected. If an event occurs that would require an
adjustment under both this Section 11(n) and Section 11(a)(ii) hereof, the
adjustment provided for in this Section 11(n) shall be in addition to, and shall
be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
Section 12. Certificate of Adjusted Exercise Price or Number of Shares
---------------------------------------------------------
Issuable Upon Exercise Of Rights. Whenever an adjustment is made as provided in
--------------------------------
Section 11 hereof, the Company shall promptly (a) prepare a certificate setting
forth such
20
<PAGE>
adjustment and a brief statement of the facts giving rise to such adjustment,
(b) file with the Rights Agent and with each transfer agent for the securities
issuable upon exercise of the Rights a copy of such certificate and (c) mail a
brief summary thereof to each holder of Rights in accordance with Section 25
hereof. Notwithstanding the foregoing sentence, the failure of the Company to
make such certification or to give such notice shall not affect the validity or
the force and effect of such adjustment. Any adjustment to be made pursuant to
Sections 11 or 13 hereof shall be effective as of the date of the event giving
rise to such adjustment.
Section 13. Consolidation, Merger, or Sale or Transfer of Assets or
-------------------------------------------------------
Earning Power.
-------------
(a) In the event (a "Section 13(a) Event") that, at any time on or
after the 15% Ownership Date and prior to the earlier of the Redemption Date or
the Expiration Date, (1) the Company shall, directly or indirectly, consolidate
with or merge with and into any other Person and the Company shall not be the
continuing or surviving corporation in such consolidation or merger, (2) any
Person shall, directly or indirectly, consolidate with or merge with and into
the Company and the Company shall be the continuing or surviving corporation in
such merger and, in connection with such merger, all or part of the Common
Shares shall be changed into or exchanged for stock or other securities of any
Person or cash or any other property, or (3) the Company and/or any one or more
of its Subsidiaries shall, directly or indirectly, sell or otherwise transfer,
in one or more transactions (other than transactions in the ordinary course of
business), assets or earning power aggregating more than 50% of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to any
Person or Persons other than the Company or one or more of its wholly owned
Subsidiaries (such Persons, together with the Persons described in clauses (1)
and (2) above shall be collectively referred to in this Section 13 as the
"Surviving Person"), then, and in each such case, proper provision shall be made
so that:
(i) except as provided in Section 7(d) hereof, each holder of a
Right shall thereafter have the right to receive, upon the exercise thereof
in accordance with the terms of this Agreement and payment of the then
current Exercise Price, in lieu of the securities or other property
otherwise purchasable upon such exercise, such number of validly authorized
and issued, fully paid and nonassessable Common Shares of the Surviving
Person as shall be equal to a fraction, the numerator of which is the
product of the then current Exercise Price multiplied by the number of one-
hundredths of a Preferred Share purchasable upon the exercise of one Right
immediately prior to the first Section 13(a) Event (or, if the Distribution
Date shall not have occurred prior to the date of such Section 13(a) Event,
the number of one-hundredths of a Preferred Share that would have been so
purchasable if the Distribution Date had occurred on the Business Day
immediately preceding the date of such Section 13(a) Event, or,'if a
Section 11(a)(ii) Event has
21
<PAGE>
occurred prior to such Section 13(a) Event, the product of the number of
one-hundredths of a Preferred Share purchasable upon the exercise of a
Right (or, if the Distribution Date shall not have occurred prior to the
date of such Section 11(a)(ii) Event, the number of one-hundredths of a
Preferred Share that would have been so purchasable if the Distribution
Date had occurred on the Business Day immediately preceding the date of
such Section 11(a)(ii) Event) immediately prior to such Section 11(a)(ii)
Event, multiplied by the Exercise Price in effect immediately prior to such
Section 11(a)(ii) Event), and the denominator of which is 50% of the
Current Market Price per Common Share of the Surviving Person on the date
of consummation of such Section 13(a) Event;
(ii) the Surviving Person shall thereafter be liable for and shall
assume, by virtue of such consolidation, merger, sale or transfer, all the
obligations and duties of the Company pursuant to this Agreement;
(iii) the term, "Company," shall thereafter be deemed to refer to
the Surviving Person; and
(iv) the Surviving Person shall take such steps (including, but not
limited to, the reservation of a sufficient number of its Common Shares in
accordance with Section 9 hereof) in connection with such consummation as
may be necessary to ensure that the provisions hereof shall thereafter be
applicable to its Common Shares thereafter deliverable upon the exercise of
Rights.
(b) Notwithstanding the foregoing, if the Section 13(a) Event is the
sale or transfer in one or more transactions of assets or earning power
aggregating more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole), but less than 100% thereof, then each Person
acquiring all or a portion thereof shall assume the obligations of the Company
as to a fraction of each of the Rights equal to the fraction of the assets of
the Company and its Subsidiaries (taken as a whole) acquired by such Person, and
the obligations of the Company as to the remaining fraction of each of the
Rights shall continue to be the obligations of the Company.
(c) The Company shall not consummate a Section 13(a) Event unless
prior thereto the Company and the Surviving Person shall have executed and
delivered to the Rights Agent a supplemental agreement confirming that such
Surviving Person shall, upon consummation of such Section 13(a) Event, assume
this Agreement in accordance with Section 13 hereof, that all rights of first
refusal or preemptive rights in respect of the issuance of Common Shares of such
Surviving Person upon exercise of outstanding Rights have been waived and that
such Section 13(a) Event shall not result in a default by such Surviving Person
under this Agreement, and further providing that, as soon as practicable after
the date of consummation of such Section 13(a) Event, such Surviving Person
shall:
22
<PAGE>
(i) prepare and file a registration statement under the
Securities Act with respect to the Rights and the securities purchasable
upon exercise of the Rights on an appropriate form, use its best efforts to
cause such registration statement to become effective as soon as
practicable after such filing, use its best efforts to cause such
registration statement to remain effective (with a prospectus at all times
meeting the requirements of the Securities Act) until the Expiration Date,
and similarly comply with all applicable state securities laws;
(ii) use its best efforts to list (or continue the listing of) the
Rights and the Common Shares of the Surviving Person purchasable upon
exercise of the Rights on a national securities exchange, or use its best
efforts to cause the Rights and such Common Shares to meet the eligibility
requirements for quotation on NASDAQ; and
(iii) deliver to holders of the Rights historical financial
statements for such Surviving Person that comply in all respects with the
requirements for registration on Form 10 (or any successor form) under the
Exchange Act.
(d) In the event that at any time after the occurrence of a Section
11(a)(ii) Event some or all of the Rights shall not have been exercised pursuant
to Section 11 hereof prior to the date of a Section 13(a) Event, such Rights
shall thereafter be exercisable only in the manner described in Section 13(a)
hereof. In the event that a Section 11(a)(ii) Event occurs on or after the date
of a Section 13(a) Event, Rights shall not be exercisable pursuant to Section 11
hereof but shall instead be exercisable pursuant to, and only pursuant to, this
Section 13.
(e) The provisions of this Section 13 shall apply to each successive
merger, consolidation, sale or other transfer constituting a Section 13(a)
Event.
Section 14. Fractional Rights and Fractional Shares.
---------------------------------------
(a) The Company shall not be required to issue fractions of Rights or
to distribute Right Certificates that represent fractional Rights. If the
Company shall determine not to issue such fractional Rights, the Company shall
pay to the registered holders of the Right Certificates with respect to which
such fractional Rights would otherwise be issuable, at the time such fractional
Rights would otherwise have been issued as provided herein, an amount in cash
equal to the same fraction of the Current Market Price of a whole Right on the
Business Day immediately prior to the date upon which such fractional Rights
would otherwise have been issuable.
(b) The Company shall not be required to issue fractions of Common
Shares or Preferred Shares (other than fractions that are integral multiples of
one one-hundredth of a Preferred Share) upon exercise of Rights, or to
distribute certificates that represent
23
<PAGE>
fractional Common Shares or Preferred Shares (other than fractions that are
integral multiples of one one-hundredth of a Preferred Share). Fractions of
Preferred Shares in integral multiples of one one-hundredth of a Preferred Share
may, at the election of the Company, be represented by depositary receipts,
pursuant to an appropriate agreement between the Company and a depositary
selected by it, provided that such agreement shall provide that the holders of
such depositary receipts shall have all the rights, privileges and preferences
to which they are entitled as beneficial owners of Preferred Shares. If the
Company shall determine not to issue fractional Common Shares or Preferred
Shares (or depositary receipts in lieu of Preferred Shares), the Company shall
pay to the registered holders of Right Certificates with respect to which such
fractional Common Shares or Preferred Shares would otherwise be issuable, at the
time such Rights are exercised as provided herein, an amount in cash equal to
the same fraction of the Current Market Price of a whole Common Share or
Preferred Share, as the case may be. For purposes of this Section 14(b), the
Current Market Price of a whole Common Share or Preferred Share shall be the
Closing Price per share for the Trading Day immediately prior to the date of
such exercise.
(c) The holder of a Right, by the acceptance of such Right, expressly
waives such holder's right to receive any fractional Rights or any fractional
Common Shares or Preferred Shares upon exercise of such Right, except as
permitted by this Section 14.
Section 15. Rights Of Action. All rights of action in respect of this
----------------
Agreement, except the rights of action given to the Rights Agent under Section
18 hereof, are vested in the respective registered holders of the Right
Certificates and certificates for Common Shares representing Rights, and any
registered holder of any Right Certificate or of such certificate for Common
Shares, without the consent of the Rights Agent or of the holder of any other
Right Certificate or any other certificate for Common Shares may, in such
holder's own behalf and for such holder's own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, such holder's right to exercise the
Rights represented by such Right Certificate or by such certificate for Common
Shares in the manner provided in such Certificate and in this Agreement. Without
limiting the foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an adequate
remedy at law for any breach of this Agreement and shall be entitled to specific
performance, and injunctive relief against actual or threatened violations, of
the obligations of any Person under this Agreement.
Section 16. Agreement of Right Holders. Every holder of a Right, by
--------------------------
accepting the same, consents and agrees with the Company and the Rights Agent
and every other holder of a Right that:
24
<PAGE>
(a) prior to the Distribution Date, the Rights shall be represented by
certificates for Common Shares registered in the name of the holders of such
Common Shares (which certificates for Common Shares shall also constitute Right
Certificates), and each such Right shall be transferable only in connection with
the transfer of such Common Shares;
(b) after the Distribution Date, the Right Certificates shall only be
transferable on the registry books of the Rights Agent if surrendered at the
principal office of the Rights Agent, duly endorsed or accompanied by a proper
instrument of transfer; and
(c) the Company and the Rights Agent may deem and treat the person in
whose name the Right Certificate is registered as the absolute owner thereof and
of the Rights represented thereby (notwithstanding any notations of ownership or
writing on the Right Certificate by anyone other than the Company or the Rights
Agent) for all purposes whatsoever, and neither the Company nor the Rights Agent
shall be affected by any notice to the contrary.
Section 17. Right Holder and Right Certificate Ho1der Not Deemed a
------------------------------------------------------
Stockholder. No holder, as such, of any Right or Right Certificate shall be
-----------
entitled to vote, receive dividends or be deemed for any purpose the holder of
the securities of the Company that may at any time be issuable upon the exercise
of the Rights represented thereby, nor shall anything contained herein or in any
Right Certificate be construed to confer upon the holder of any Right or Right
Certificate, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, to give or withhold consent to any
corporate action, to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 25 hereof), or to receive dividends
or subscription rights, or otherwise, in each case until such Right or the
Rights represented by such Right Certificate shall have been exercised in
accordance with the provisions hereof.
Section 18. Concerning the Rights Agent.
---------------------------
(a) The Company agrees to pay to the Rights Agent as compensation for
all services rendered by it hereunder reasonable and customary fees and
expenses. The Company also agrees to indemnify the Rights Agent for, and to hold
it harmless against, any loss, liability, or expense, incurred without
negligence, bad faith or willful misconduct on the part of the Rights Agent, for
anything done or omitted by the Rights Agent in connection with the acceptance
and administration of this Agreement, including the costs and expenses of
defending against any claim of liability.
(b) The Rights Agent shall be protected and shall incur no liability
for or in respect of any action taken, suffered or omitted by it in connection
with its administration of this Agreement in
25
<PAGE>
reliance upon any Right Certificate or certificate for the Preferred Shares or
Common Shares or for other securities of the Company, instrument of assignment
or transfer, power of attorney, endorsement, affidavit, letter, notice,
direction, consent, certificate, statement, or other paper or document believed
by it to be genuine and to be signed, executed and, where necessary, verified or
acknowledged, by the proper person or persons, or otherwise upon the advice of
its counsel as set forth in Section 20 hereof.
Section 19. Merger or Consolidation or Chance of Name of Rights Agent.
---------------------------------------------------------
(a) Any corporation into which the Rights Agent or any successor
Rights Agent may be.merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights Agent
or any successor Rights Agent shall be a party, or any corporation succeeding to
the corporate trust or stock transfer business of the Rights Agent or any
successor Rights Agent, shall be the successor to the Rights Agent under this
Agreement without the execution or filing of any paper or any further act on the
part of any of the parties hereto, provided that such corporation would be
eligible for appointment as a successor Rights Agent under the provisions of
Section 21 hereof. If, at the time such successor Rights Agent shall succeed to
the agency created by this Agreement, any of the Right Certificates shall have
been countersigned but not delivered, any such successor Rights Agent may adopt
the countersignature of the predecessor Rights Agent and deliver such Right
Certificates so countersigned; and if at that time any of the Right Certificates
shall not have been countersigned, any successor Rights Agent may countersign
such Right Certificates either in the name of the predecessor Rights Agent or in
the name of the successor Rights Agent; and in all such cases such Right
Certificates shall have the full force provided in such Right Certificates, and
in this Agreement.
(b) If at any time the name of the Rights Agent shall be changed, and
at such time any of the Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Right Certificates so countersigned; and if at that time any of the
Right Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in its changed
name; and in all such cases such Right Certificates shall have the full force
provided in such Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
----------------------
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance of the Rights, shall be bound:
26
<PAGE>
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the advice or opinion of such counsel shall be
full and complete authorization and protection to the Rights Agent as to any
action taken or omitted by it in good faith and in accordance with such advice
or opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any 15% Stockholder) be proved
or established by the Company prior to taking or suffering any action hereunder,
such fact or matter (unless other evidence in respect thereof be herein
specifically prescribed) may be deemed to be conclusively proved and established
by a certificate signed by any one of the Chairman of the Board, the Vice
Chairman of the Board, the President, any Vice President, the Treasurer or the
Secretary of the Company and delivered to the Rights Agent; and such certificate
shall be full authorization to the Rights Agent for any action taken or suffered
in good faith by it under the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder to the Company and any
other Person only for its own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement, or in the Right
Certificates (except its countersignature thereof), or be required to verify the
same, but all such statements and recitals are and shall be deemed to have been
made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect
of the validity of this Agreement or the execution and delivery hereof (except
the due authorization, execution and delivery hereof by the Rights Agent) or in
respect of the validity or execution of any Right Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by the
Company of any covenant or condition contained in this Agreement or in any Right
Certificate; nor shall it be responsible for any change in the exercisability of
the Rights (including any Rights becoming null and void pursuant to Section 7(d)
hereof) or any adjustment in the terms of the Rights (including the manner,
method or amount thereof) provided for in Sections 7, 11, 13 and 23 hereof, or
the ascertaining of the existence of facts that would require any such change or
adjustment (except with respect to the exercise of Rights represented by Right
Certificates after actual notice that such change or adjustment is required);
nor shall it by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any Preferred Shares or
Common Shares or other securities to be issued pursuant to this Agreement or any
Right Certificate, or as to whether any Preferred Shares or
27
<PAGE>
Common Shares or other securities will, when issued, be validly authorized and
issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman of the Board, the Vice Chairman, the President, any Vice
President, the Secretary, any Assistant Secretary or the Treasurer of the
Company, and to apply to such officers for advice or instructions in connection
with its duties, and it shall not be liable for any action taken or suffered to
be taken by it in good faith in accordance with instructions of any such
officer.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not the Rights
Agent under this Agreement. Nothing herein shall preclude the Rights Agent from
acting in any other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct, provided that reasonable care was exercised in the
selection and continued employment thereof.
Section 21. Change of Rights Agent. The Rights Agent or any successor
----------------------
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing mailed to the Company and to each transfer agent
of the Common Shares and Preferred Shares by registered or certified mail, and
to the holders of the Right Certificates by first-class mail. The Company may
remove the Rights Agent or any successor Rights Agent upon 30 days' notice in
writing, mailed to the Rights Agent or successor Rights Agent, as the case may
be, and to each transfer agent of the Common Shares and Preferred Shares by
registered or certified mail, and to the holders of the Right Certificates by
first-class mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting as such, the Company shall appoint a
successor
28
<PAGE>
to the Rights Agent. If the Company shall fail to make such appointment within a
period of 30 days after giving notice of such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Right Certificate (who shall,
with such notice, submit such holder's Right Certificate for inspection by the
Company), then the Company shall become the Rights Agent and the registered
holder of any Right Certificate may apply to any court of competent jurisdiction
for the appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be a corporation organized
and doing business under the laws of the United States or of the States of New
York or California (or of any other state of the United States so long as such
corporation is authorized to do business as a banking institution in the States
of New York or California), in good standing, having a principal office in New
York or California, that is authorized under such laws to exercise corporate
trust or stock transfer powers and is subject to supervision or examination by
federal or state authority and that has at the time of its appointment as Rights
Agent a combined capital and surplus of at least $50,000,000. After appointment,
the successor Rights Agent shall be vested with the same powers, rights, duties
and responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and transfer
to the successor Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary for
the purpose of this Agreement and so that the successor Rights Agent may
appropriately act as Rights Agent hereunder. Not later than the effective date
of any such appointment, the Company shall file notice thereof in writing with
the predecessor Rights Agent and each transfer agent of the Common Shares and
Preferred Shares, and mail a notice thereof in writing to the registered holders
of the Right Certificates. Failure to give any notice provided for in this
Section 21, however, or any defect therein, shall not affect the legality or
validity of the resignation or removal of the Rights Agent or the appointment of
the successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates. Notwithstanding any of
----------------------------------
the provisions of this Agreement or of the Right Certificates to the contrary,
the Company may, at its option, issue new Right Certificates in such form as may
be approved by the Board of Directors in order to reflect any adjustment or
change in the Exercise Price and the number or kind or class of shares or other
securities or property purchasable upon exercise of the Rights in accordance
with the provisions of this Agreement.
Section 23. Redemption of Rights.
--------------------
(a) Until the earliest of (i) the date of the first Section 11(a)(ii)
Event, (ii) the date of the first Section 13(a) Event or (iii) the Expiration
Date, a majority, but not less than
29
<PAGE>
three, of the Independent Directors may, at their option, direct the Company to
redeem all, but not less than all, of the then outstanding Rights at a
redemption price of $.01 per Right, as such redemption price shall be
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (the "Redemption Price"), and the
Company shall so redeem the Rights.
(b) Immediately upon the action of a majority, but not less than
three, of the Independent Directors directing the Company to redeem the Rights
pursuant to subsection (a) of this Section 23, or at such time and date
thereafter as they may specify, and without any further action and without any
notice, the right to exercise Rights shall terminate and the only right
thereafter of the holders of Rights shall be to receive the Redemption Price.
Within 10 Business Days after the date of such action, the Company shall give
notice of such redemption to the holders of Rights by mailing such notice to all
holders of Rights at their last addresses as they appear upon the registry books
of the Rights Agent or, if prior to the Distribution Date, on the registry books
of the transfer agent for the Common Shares. Any notice that is mailed in the
manner herein provided shall be deemed given, whether or not the holder receives
such notice, but neither the failure to give any such notice nor any defect
therein shall affect the legality or validity of such redemption. Each such
notice of redemption shall state the method by which the payment of the
Redemption Price will be made. Neither the Company nor any of its Affiliates or
Associates may, directly or indirectly, redeem, acquire or purchase for value
any Rights in any manner other than that specifically set forth in Section 24
hereof or in this Section 23, and other than in connection with the purchase of
Common Shares prior to the earlier of the date of the first Section 11(a)(ii)
Event or the date of the first Section 13(a) Event.
(c) The Company may, at its option, pay the Redemption Price in cash,
Common Shares, Preferred Shares, other equity securities of the Company, debt
securities of the Company, other property or any combination of the foregoing,
in each case having an aggregate Current Market Price on the Redemption Date
equal to the Redemption Price.
Section 24. Exchange Of Rights.
------------------
(a) At any time after the 15% Ownership Date and prior to the first
date thereafter upon which a 15% Stockholder, together with all Affiliates and
Associates of such 15% Stockholder, shall be the Beneficial Owner of 50% or more
of the Voting Shares then outstanding, a majority, but not less than three, of
the Independent Directors may, at their option, direct the Company to exchange
all, but not less than all, of the then outstanding Rights for Common Shares at
an exchange ratio of one Common Share per Right, as such exchange ratio shall be
appropriately adjusted to reflect any stock
30
<PAGE>
split, stock dividend, or similar transaction involving Preferred Shares or
Common Shares that occurs after the date hereof (the "Exchange Ratio"), and the
Company shall so exchange the Rights.
(b) Immediately upon the action of a majority, but not less than
three, of the Independent Directors directing the Company to exchange the Rights
pursuant to subsection (a) of this Section 24, or at such time and date
thereafter as they may specify, and without any further action and without any
notice, the right to exercise Rights shall terminate and the only right
thereafter of the holder of a Right shall be to receive a number of Common
Shares equal to the Exchange Ratio. Within 10 Business Days after the date of
such action, the Company shall give notice of such exchange to the holders of
Rights by mailing such notice to all holders of Rights at their last addresses
as they appear upon the registry books of the Rights Agent or, if prior to the
Distribution Date, on the registry books of the transfer agent for the Common
Shares. Any notice that is mailed in the manner herein provided shall be deemed
given, whether or not the holder receives such notice, but neither the failure
to give any such notice nor any defect therein shall affect the legality or
validity of such exchange. Each such notice of exchange shall state the method
by which the Rights will be exchanged for Common Shares. Neither the Company nor
any of its Affiliates or Associates may, directly or indirectly, redeem, acquire
or purchase for value any Rights in any manner other than that specifically set
forth in Section 23 hereof or in this Section 24, and other than in connection
with the purchase of Common Shares prior to the earlier of the date of the first
Section 11(a)(ii) Event or the date of the first Section 13(a) Event.
(c) Notwithstanding the foregoing, in the event that the aggregate
number of Common Shares that are authorized by the Company's Certificate of
Incorporation but not outstanding or reserved for issuance for purposes other
than upon exercise or exchange of the Rights is less than the aggregate number
of Common Shares issuable upon the exchange of the Rights in accordance with
this Section 24 (the excess of such number of authorized Common Shares over and
above such number of issuable Common Shares being hereinafter referred to as the
"Unavailable Exchange Shares"), then the Company shall substitute for the pro
rata portion of the Unavailable Exchange Shares that would otherwise be issuable
upon the exchange of the Rights in accordance with this Section 24, (i) cash,
(ii) other equity securities of the Company (including, without limitation,
Common Share Equivalents), (iii) debt securities of the Company, (iv) other
property or (v) any combination of the foregoing, in each case having an
aggregate Current Market Price equal to the aggregate Current Market Price of
the Unavailable Exchange Shares for which substitution is made. Subject to
Section 7(d) hereof, in the event that the Company takes any action pursuant to
this Section 24, such action shall apply uniformly to all outstanding Rights.
31
<PAGE>
Section 25. Notice of Certain Events.
------------------------
(a) In the event that the Company shall propose (i) to declare or pay
any dividend payable on or make any distribution with respect to its Common
Shares or Preferred Shares (other than a regular quarterly cash dividend), (ii)
to offer to the holders of its Common Shares or Preferred Shares options, rights
or warrants to subscribe for or to purchase any additional shares thereof or
shares of stock of any class or any other securities, rights or options, (iii)
to effect any reclassification of its Common Shares or Preferred Shares (other
than a reclassification involving only the subdivision of outstanding shares),
(iv) to effect any consolidation or merger with or into, or to effect any sale
or other transfer (or to permit one or more of its Subsidiaries to effect any
sale or other transfer), in one or more transactions, of more than 50% of the
assets or earning power of the Company and its Subsidiaries (taken as a whole)
to, any other Person or Persons, or (v) to effect the liquidation, dissolution
or winding up of the Company, then and in each such case, the Company shall give
to each holder of a Right Certificate, in accordance with Section 26 hereof, a
notice of such proposed action, that shall.specify the record date for the
purpose of such dividend or distribution, or the date upon which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution or winding up is to take place and the date of participation therein
by the holders of record of the Common Shares or Preferred Shares, if any such
date is to be fixed, and such notice shall be so given in the case of any action
covered by clause (i) or (ii) above at least 20 days prior to the record date
for determining holders of the Common Shares or Preferred Shares for purposes of
such action, and in the case of any such other action, at least 20 days prior to
the date of the taking of such proposed action or the date of participation
therein by the holders of the Common Shares or Preferred Shares, whichever date
shall be the earlier. The failure to give the notice required by this Section 25
or any defect therein shall not affect the legality or validity of the action
taken by the Company or the vote upon any such action.
(b) As soon as practicable after the occurrence of each Section
11(a)(ii) Event and each Section 13(a) Event, the Company shall give to each
holder of a Right Certificate, in accordance with Section 26 hereof, a notice of
the occurrence of such event, specifying the event and the consequences of the
event to holders of Rights under Sections 11 and 13 hereof.
Section 26. Notices. Notices or demands authorized by this Agreement
-------
to be given or made by the Rights Agent or by the holder of any Right
Certificate to or on the Company shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
32
<PAGE>
Jacobs Engineering Group Inc.
251 South Lake Avenue
Pasadena, California 91101
Attention: Chief Executive Officer
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Right Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Company) to the principal office of the Rights
Agent as follows:
First Interstate Bank, Ltd.
707 Wilshire Boulevard, Wll-2
Los Angeles, California 90017
Attention: Stock Transfer Department
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
Section 27. Supplements and Amendments.
--------------------------
(a) A majority, but not less than three, of the Independent Directors
may, from time to time, without the approval of any holders of Rights, direct
the Company and the Rights Agent to supplement or amend any provision of this
Agreement in any manner, whether or not such supplement or amendment is adverse
to any holder of Rights, and the Company and the Rights Agent shall so
supplement or amend such provision; provided, however, that from and after the
earliest of (i) the date of the first Section 11(a)(ii) Event, (ii) the date of
the first Section 13(a) Event, (iii) the Redemption Date or (iv) the Expiration
Date, this Agreement shall not be supplemented or amended in any manner that
would materially and adversely affect any holder of outstanding Rights other
than a 15% Stockholder or a Surviving Person.
(b) From and after the earlier of the date of the first Section
11(a)(ii) Event or the date of the first Section 13(a) Event and prior to the
earlier of the Redemption Date or the Expiration Date, the Company shall not
effect any amendment to the Certificate of Designations for the Preferred Shares
that would materially and adversely affect the rights, privileges or preferences
of the Preferred Shares without the prior approval of the holders of two-thirds
or more of the then outstanding Rights.
Section 28. Certain Covenants. Subject to Section 27 hereof and the
-----------------
other provisions of this Agreement, from and after
33
<PAGE>
the earlier of the date of the first Section 11(a)(ii) Event or the date of the
first Section 13(a) Event and prior to the earlier of the Redemption Date or the
Expiration Date, the Company shall not (a) issue or sell, or permit any
Subsidiary to issue or sell, to a 15% Stockholder or a Surviving Person, or any
Affiliate or Associate of a 15% Stockholder or a Surviving Person, or any Person
holding Voting Shares of the Company that are Beneficially Owned by a 15%
Stockholder or a Surviving Person, (i) any rights, options, warrants or
convertible securities on terms similar to, or that materially adversely affect
the value of, the Rights or (ii) Preferred Shares, Common Shares or shares of
any other class of capital stock, if such sale is intended to or would
materially adversely affect the value of the Rights, or (b) take any other
action that is intended to or.would materially adversely affect the value of the
Rights.
Section 29. Successors. All the covenants and provisions of this
----------
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 30. Benefits of this Agreement. Nothing in this Agreement
--------------------------
shall be construed to give to any Person other than the Company, the Rights
Agent, the registered holders of the Right Certificates (other than those
representing Rights that have become null and void) and the certificates for
Common Shares representing Rights (other than those Rights that have become null
and void) any legal or equitable right, remedy or claim under this Agreement,
and this Agreement shall be for the sole and exclusive benefit of the Company,
the Rights Agent, such registered holders of Right Certificates and such
certificates for Common Shares representing Rights.
Section 31. Severability. If any term, provision, covenant or
------------
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
Section 32. Governing Law. This Agreement and each Right Certificate
-------------
issued hereunder shall be deemed to be a contract made under the laws of the
State of Delaware and for all purposes shall be governed by and construed in
accordance with the laws of such state applicable to contracts made and
performed entirely within such state.
Section 33. Counterparts. This Agreement may be executed in any number
------------
of counterparts and each such counterpart shall for all purposes be deemed to be
an original and all such counterparts shall together constitute but one and the
same instrument.
34
<PAGE>
Section 34. Descriptive Headings. Descriptive headings of the several
--------------------
sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
Attest: JACOBS ENGINEERING GROUP INC.
By /s/ William C. Markley, III By /s/ John W. Prosser, Jr.
------------------------------ -------------------------------
Name: William C. Markley, III Name: John W. Prosser, Jr.
Title: Assistant Secretary Title: Senior Vice President
Finance & Administration
and Treasurer
Attest: FIRST INTERSTATE BANK, LTD.
By /s/ Barbara J. Mauer By /s/ Joseph Cannata
------------------------------ -------------------------------
Name: Barbara J. Mauer Name: Joseph Cannata
Title: Assistant Vice President Title: Assistant Vice President
5181N
Exhibit A -- 5182N
Exhibit B -- 5183N
Exhibit C -- 5184N
35
<PAGE>
Exhibit A
---------
CERTIFICATE OF DESIGNATIONS
OF
SERIES A JUNIOR PARTICIPATING CUMULATIVE PREFERRED STOCK
$1.00 Par Value
of
JACOBS ENGINEERING GROUP INC.
Pursuant to Section 151 of the General Corporation
Law of the State of Delaware
WE, [Name], [Title], and [Name], [Title], of Jacobs Engineering Group
Inc., a corporation organized and existing under the General Corporation Law of
the State of Delaware, in accordance with the provisions of Section 103 thereof,
DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors
by the Certificate of Incorporation of the Corporation, the Board of Directors
on December 20, 1990 adopted the following resolution Creating a series of One
Hundred Twenty-Five Thousand (125,000) shares of Preferred Stock, par value
$1.00 per share, designated as Series A Junior Participating Cumulative
Preferred Stock:
RESOLVED, that pursuant to the authority vested in the Board of
Directors of this Corporation in accordance with the provisions of its
Certificate of Incorporation, a-series of Preferred Stock of the Corporation be,
and it hereby is, created, and that the designation and amount thereof and the
voting powers, preferences and relative, participating, optional and other
special rights of the shares of such series, and the qualifications, limitations
or restrictions thereof, are as follows:
Section 1. Designation and Amount. The shares of such series shall be
----------------------
designated as Series A Junior Participating Cumulative Preferred Stock, par
value $1.00 per share (the "Series A Preferred Stock"), and the number of shares
constituting such series shall be One Hundred Twenty-Five Thousand (125,000).
Section 2. Dividends and Distributions.
---------------------------
(a) The holders of shares of Series A Preferred Stock, in preference
to the holders of shares of Common Stock, $1.00 per share, of the Corporation
(the "Common Stock") and of any other junior stock of the Corporation that may
be outstanding, shall be entitled to receive, when, as and if declared by the
Board of Directors out of funds legally available for the purpose, quarterly
dividends payable in cash on the tenth day of January,
<PAGE>
April, July and September in each year (each such date being referred to herein
as a "Quarterly Dividend Payment Date"), commencing on the first Quarterly
Dividend Payment Date after the first issuance of a share or fraction of a share
of Series A Preferred Stock, in an amount per share (rounded to the nearest
cent) equal to the greater of (i) $.25 per share ($1.00 per annum), or (ii)
subject to the provision for adjustment hereinafter set forth, 100 times the
aggregate per share amount of all cash dividends, and 100 times the aggregate
per share amount (payable in kind) of all non-cash dividends or other
distributions, other than a dividend payable in shares of Common Stock, or a
subdivision of the outstanding shares of Common Stock (by reclassification or
otherwise), declared on the Common Stock since the immediately preceding
Quarterly Dividend Payment Date or, with respect to the first Quarterly Dividend
Payment Date, since the first issuance of any share or fraction of a share of
Series A Preferred Stock. In the event that the Corporation shall at any time
declare or pay any dividend on Common Stock payable in shares of Common Stock,
or effect a subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise) into a greater or
lesser number of shares of Common Stock, then and in each such event, the amount
to which the holder of each share of Series A Preferred Stock was entitled
immediately prior to such event under clause (ii) of the preceding sentence
shall be adjusted by multiplying such amount by a fraction, the numerator of
which is the number of shares of Common Stock outstanding immediately after such
event, and the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
(b) The Corporation shall declare a dividend or distribution on the
Series A Preferred Stock as provided in paragraph (a) of this Section 2
immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock); provided, however,
that in the event no dividend or distribution shall have been declared on the
Common Stock during the period between any Quarterly Dividend Payment Date and
the next subsequent Quarterly Dividend Payment Date, a dividend of $.25 per
share ($1.00 per annum) on the Series A Preferred Stock shall nevertheless be
payable on such subsequent Quarterly Dividend Payment Date.
(c) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issue of such shares of Series A Preferred Stock, unless
the date of issue of such shares is prior to the record date for the first
Quarterly Dividend Payment Date, in which case dividends on such shares shall
begin to accrue from the date of issue of such shares, or unless the date of
issue is a Quarterly Dividend Payment Date or is a date after the record date
for the determination of holders of shares of Series A Preferred Stock entitled
to receive a quarterly dividend and before such Quarterly Dividend Payment Date,
in either of which cases such dividends shall begin to
2
<PAGE>
accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but
unpaid dividends shall cumulate but shall not bear interest. Dividends paid on
the shares of Series A Preferred Stock in an amount less than the total amount
of such dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such shares at the time
outstanding. The Board of Directors may fix a record date for the determination
of holders of shares of Series A Preferred Stock entitled to receive payment of
a dividend or distribution declared thereon, which record date shall be not more
than 60 days prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series A Preferred
-------------
Stock shall have the following voting rights:
(a) Each share of Series A Preferred Stock shall entitle the holder
thereof to 100 votes (and each one one-hundredth of a share of Series A
Preferred Stock shall entitle the holder thereof to one vote) on all matters
submitted to a vote of the stockholders of the Corporation. In the event that
the Corporation shall at any time declare or pay any dividend on Common Stock
payable in shares of Common Stock or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then and in each such event,
the number of votes per share to which holders of shares of Series A Preferred
Stock were entitled immediately prior to such event shall be adjusted by
multiplying such number by a fraction, the numerator of which is the number of
shares of Common Stock outstanding immediately after such event, and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(b) Except as otherwise provided in the Certificate of Incorporation
of the Corporation or herein or by law, the holders of shares of Series A
Preferred Stock and the holders of shares of Common Stock shall vote together as
one class on all matters submitted to a vote of stockholders of the Corporation.
(c) In addition, the holders of shares of Series A Preferred Stock
shall have the following special voting rights:
(i) In the event that at any time dividends on Series A Preferred
Stock, whenever accrued and whether or not consecutive, shall not have been
paid or declared and a sum sufficient for the payment thereof set aside, in
an amount equivalent to six quarterly dividends on all shares of Series A
Preferred Stock at the time outstanding, then and in each such event, the
holders of shares of Series A Preferred Stock and each other series of
preferred stock now or hereafter issued that shall be accorded such class
voting right by the Board of Directors and that shall have the right to
elect three directors as the result of a prior or
3
<PAGE>
subsequent default in payment of dividends on such series (each such other
series being hereinafter called "Other Series of Preferred Stock"), voting
separately as a class without regard to series, shall be entitled to elect three
directors at the next annual meeting of stockholders of the Corporation, in
addition to the directors to be elected by the holders of all shares of the
Corporation entitled to vote for the election of directors, and the holders of
all shares (including the Series A Preferred Stock) otherwise entitled to vote
for directors, voting separately as a class, shall be entitled to elect the
remaining members of the Board of Directors, provided that the Series A
Preferred Stock and each Other Series of Preferred Stock, voting as a class,
shall not have the right to elect more than three directors. Such special voting
right of the holders of shares of Series A Preferred Stock may be exercised
until all dividends in default on the Series A Preferred Stock shall have been
paid in full or declared and funds sufficient therefor set aside, and when so
paid or provided for, such special voting right of the holders of shares of
Series A Preferred Stock shall cease, but subject always to the same provisions
for the vesting of such special voting rights in the event of any such future
dividend default or defaults.
(ii) At any time after such special voting rights shall have so vested
in the holders of shares of Series A Preferred Stock, the Secretary of the
Corporation may, and upon the written request of the holders of record of 10% or
more in number of the shares of Series A Preferred Stock and each Other Series
of Preferred Stock then outstanding addressed to the Secretary at the principal
executive office of the Corporation shall, call a special meeting of the holders
of shares of Preferred Stock so entitled to vote, for the election of the
directors to be elected by them as herein provided, to be held within 60 days
after such call and at the place and upon the notice provided by law and in the
Bylaws for the holding of meetings of stockholders; provided, however, that the
Secretary shall not be required to call such special meeting in the case of any
such request received less than 90 days before the date fixed for any annual
meeting of stockholders, and if in such case such special meeting is not called
or held, the holders of shares of Preferred Stock so entitled to vote shall be
entitled to exercise the special voting rights provided in this paragraph at
such annual meeting. If any such special meeting required to be called as above
provided shall not be called by the Secretary within 30 days after receipt of
any such request, then the holders of record of 10% or more in number of the
shares of Series A Preferred Stock and each Other Series of Preferred Stock then
outstanding may designate in writing one of their number to call such meeting,
and the person so designated may, at the expense of the Corporation, call such
meeting to be held at the place and upon the notice given by such person, and
for that purpose shall have access to the stock books of the
4
<PAGE>
Corporation. No such special meeting and no adjournment thereof shall be held on
a date later than 60 days before the annual meeting of stockholders. If, at any
meeting so called or at any annual meeting held while the holders of shares of
Series A Preferred Stock have the special voting rights provided for in this
paragraph, the holders of not less than 40% of the aggregate voting power of
Series A Preferred Stock and each Other Series of Preferred Stock then
outstanding are present in person or by proxy, which percentage shall be
sufficient to constitute a quorum for the election of additional directors as
herein provided, the then authorized number of directors of the Corporation
shall be increased by three, as of the time of such special meeting or the time
of the first such annual meeting held while such holders have special voting
rights and-such quorum is present, and the holders of shares of Series A
Preferred Stock and each Other Series of Preferred Stock, voting as a class,
shall be entitled to elect the additional directors so provided for. If the
directors of the Corporation are then divided into classes under provisions of
the Certificate of Incorporation of the Corporation or the Bylaws, the three
additional directors shall be members of those respective classes of directors
in which a vacancy is created as a result of such increase in the authorized
number of directors. If the foregoing expansion of the size of the Board of
Directors shall not be valid under applicable law, then the holders of shares of
Series A Preferred Stock and of each Other Series of Preferred Stock, voting as
a class, shall be entitled, at the meeting of stockholders at which they would
otherwise have voted, to elect directors to fill any then existing vacancies on
the Board of Directors, and shall additionally be entitled, at such meeting and
each subsequent meeting of stockholders at which directors are elected, to elect
all of the directors then being elected until by such class vote three members
of the Board of Directors have been so elected.
(iii) Upon the election at such meeting by the holders of shares of
Series A Preferred Stock and each Other Series of Preferred Stock, voting as a
class, of the directors they are entitled so to elect, the persons so elected,
together with such persons as may be directors or as may have been elected as
directors by the holders of all shares (including Series A Preferred Stock)
otherwise entitled to vote for directors, shall constitute the duly elected
directors of the Corporation. The additional directors so elected by holders of
shares of Series A Preferred Stock and each Other Series of Preferred Stock,
voting as a class, shall serve until the next annual meeting or until their
respective successors shall be elected and qualified, or if any such director is
a member of a class of directors under provisions dividing the directors into
classes, each such director shall serve until the annual meeting at which the
term of office of such director's class shall expire or until such director's
successor shall be elected and shall qualify, and at each
5
<PAGE>
subsequent meeting of stockholders at which the directorship of any director
elected by the vote of holders of shares of Series A Preferred Stock and each
Other Series of Preferred Stock under the special voting rights set forth in
this paragraph is up for election, said special class voting rights shall apply
in the reelection of such director or in the election of such director's
successor; provided, however, that whenever the holders of shares of Series A
Preferred Stock and each Other Series of Preferred Stock shall be divested of
the special rights to elect three directors as above provided, the terms of
office of all persons elected as directors by the holders of shares of Series A
Preferred Stock and each Other Series of Preferred Stock, voting as a class, or
elected to fill any vacancies resulting from the death, resignation, or removal
of directors so elected by the holders of shares of Series A Preferred Stock and
each Other Series of Preferred Stock, shall forthwith terminate (and the number
of directors shall be reduced accordingly).
(iv) If, at any time after a special meeting of stockholders or an
annual meeting of stockholders at which the holders of shares of Series A
Preferred Stock and each Other Series of Preferred Stock, voting as a class,
have elected directors as provided above, and while the holders of shares of
Series A Preferred Stock and each Other Series of Preferred Stock shall be
entitled so to elect three directors, the number of directors who have been
elected by the holders of shares of Series A Preferred Stock and each Other
Series of Preferred Stock (or who by reason of one or more resignations, deaths
or removals have succeeded any directors so elected) shall by reason of
resignation, death or removal be less than three but at least one, the vacancy
in the directors so elected by the holders of shares of the Series A Preferred
Stock and each Other Series of Preferred Stock may be filled by the remaining
director or directors elected by such holders. In the event that such election
shall not occur within 30 days after such vacancy arises, or in the event that
there shall not be incumbent at least one director so elected by such holders,
the Secretary of the Corporation may, and upon the written request of the
holders of record of 10% or more in number of the shares of Series A Preferred
Stock and each Other Series of Preferred Stock then outstanding addressed to the
Secretary at the principal office of the Corporation shall, call a special
meeting of the holders of shares of Series A Preferred Stock and each Other
Series of Preferred Stock so entitled to vote, for an election to fill such
vacancy or vacancies, to be held within 60 days after such call and at the place
and upon the notice provided by law and in the Bylaws for the holding of
meetings of stockholders; provided, however, that the Secretary shall not be
required to call such special meeting in the case of any such request received
less than 90 days before the date fixed for any annual meeting of stockholders,
and if in such case such special meeting is not called, the holders of shares of
6
<PAGE>
Preferred Stock so entitled to vote shall be entitled to fill such vacancy
or vacancies at such annual meeting. If any such special meeting required
to be called as above provided shall not be called by the Secretary within
30 days after receipt of any such request, then the holders of record of
10% or more in number of the shares of Series A Preferred Stock and each
Other Series of Preferred Stock then outstanding may designate in writing
one of their number to call such meeting, and the person so designated may,
at the expense of the Corporation, call such meeting to be held at the
place and upon the notice above provided, and for that purpose shall have
access to the stock books of the Corporation; no such special meeting and
no adjournment thereof shall be held on a date later than 60 days before
the annual meeting of stockholders.
(d) Nothing herein Shall prevent the directors or stockholders from
taking any action to increase the number of authorized shares of Series A
Preferred Stock, or increasing the number of authorized shares of Preferred
Stock of the same class as the Series A Preferred Stock or the number of
authorized shares of Common Stock, or changing the par value of the Common Stock
or Preferred Stock, or issuing options, warrants or rights to any class of stock
of the Corporation as authorized by the Certificate of Incorporation of the
Corporation, as it may hereafter be amended.
(e) Except as set forth herein, holders of shares of Series A
Preferred Stock shall have no special voting rights and their consent shall not
be required (except to the extent they are entitled to vote as set forth in the
Certificate of Incorporation of the Corporation or herein or by law) for taking
any corporate action.
Section 4. Certain Restrictions.
--------------------
(a) Whenever any dividends or other distributions payable on the
Series A Preferred Stock as provided in Section 2 hereof are in arrears,
thereafter and until all accrued and unpaid dividends and distributions, whether
or not declared, on shares of Series A Preferred Stock outstanding shall have
been paid in full, the Corporation shall not, directly or indirectly:
(i) declare or pay dividends on, or make any other distributions
with respect to, any shares of stock ranking junior (either as to dividends
or upon liquidation, dissolution or winding up) to the Series A Preferred
Stock;
(ii) declare or pay dividends on, or make any other distributions
with respect to, any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Series A
Preferred Stock, except dividends paid ratably on shares of the Series A
Preferred Stock and all such parity stock on which dividends
7
<PAGE>
are payable or in arrears in proportion to the total amounts to which the
holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration
shares of any stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred Stock,
provided that the Corporation may at any time redeem, purchase or otherwise
acquire shares of any such junior stock in exchange for shares of any stock
of the Corporation ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Series A Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any shares
of Series A Preferred Stock, or any shares of stock ranking on a parity
with the Series A Preferred Stock, except in accordance with a purchase
offer made in writing or by publication (as determined by the Board of
Directors) to all holders of such shares upon such terms as the Board of
Directors, after consideration of the respective annual dividend rates and
other relative rights and preferences of the respective series and classes,
shall determine in good faith will result in fair and equitable treatment
among the respective series or classes.
(b) The Corporation shall not permit any subsidiary of the Corporation
to purchase or otherwise acquire for consideration, directly or indirectly, any
shares of stock of the Corporation unless the Corporation could, under paragraph
(a) of this Section 4, purchase or otherwise acquire such shares at such time
and in such manner.
Section 5. Reacquired Shares. Any shares of Series A Preferred Stock
-----------------
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
preferred stock, without designation as to series, and may be reissued as part
of any series of preferred stock created by resolution or resolutions of the
Board of Directors (including Series A Preferred Stock), subject to the
conditions and restrictions on issuance set forth herein.
Section 6. Liquidation, Dissolution or Winding Up. Upon any
--------------------------------------
liquidation, dissolution or winding up of the Corporation, no distribution shall
be made to:
(a) the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series A
Preferred Stock unless, prior thereto, the holders of shares of Series A
Preferred Stock shall have received the greater of (i) $1.00 per share ($.01 per
one one-hundredth of a share), plus an amount equal to accrued and
8
<PAGE>
unpaid dividends and distributions thereon, whether or not declared, to the date
of such payment, or (ii) an aggregate amount per share, subject to the provision
for adjustment hereinafter set forth, equal to 100 times the aggregate amount to
be distributed per share to holders of shares of Common Stock; or
(b) the holders of shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Series A
Preferred Stock, except distributions made ratably on the Series A Preferred
Stock and all other such parity stock in proportion to the total amounts to
which the holders of all such shares are entitled upon such liquidation,
dissolution or winding up.
In the event that the Corporation shall at any time declare or pay any dividend
on Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise) into a greater or lesser number of shares of
Common Stock, then and in each such event, the aggregate amount to which the
holder of each share of Series A Preferred Stock was entitled immediately prior
to such event under the proviso in clause (a) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction, the numerator of which is the
number of shares of Common Stock outstanding immediately after such event, and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. In the event that the
---------------------------
Corporation shall enter into any consolidation, merger, combination or other
transaction in which the shares of Common Stock are exchanged for or changed
into other stock or securities, cash and/or any other property, or otherwise
changed, then and in each such event, the shares of Series A Preferred Stock
shall at the same time be similarly exchanged or changed in an amount per share
(subject to the provision for adjustment hereinafter set forth) equal to 100
times the aggregate amount of stock, securities, cash and/or any other property
(payable in kind), as the case may be, into which or for which each share of
Common Stock is changed or exchanged. In the event that the Corporation shall at
any time declare or pay any dividend on Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise) into a
greater or lesser number of shares of Common Stock, then and in each such event,
the amount set forth in the preceding sentence with respect to the exchange or
change of shares of Series A Preferred Stock shall be adjusted by multiplying
such amount by a fraction, the numerator of which is the number of shares of
Common Stock outstanding immediately after such event, and the denominator of
which is the number of shares of Common Stock that were outstanding immediately
prior to such event.
9
<PAGE>
Section 8. No Redemption. The shares of Series A Preferred Stock shall
-------------
not be redeemable. Notwithstanding the foregoing, the Corporation may acquire
shares of Series A Preferred Stock in any other manner permitted by law, the
Certificate of Incorporation of the Corporation or herein.
Section 9. Rank. Unless otherwise provided in the Certificate of
----
Incorporation of the Corporation or a Certificate of Designations relating to a
subsequent series of preferred stock of the Corporation, the Series A Preferred
Stock shall rank junior to all other series of the Corporation's preferred stock
as to the payment of dividends and the distribution of assets on liquidation,
dissolution or winding up, and senior to the Common Stock of the Corporation.
Section 10. Amendment. The Certificate of Incorporation of the
---------
Corporation shall not be amended in any manner that would materially and
adversely alter or change the powers, preferences or special rights of the
Series A Preferred Stock without the affirmative vote of the holders of at least
two-thirds of the outstanding shares of Series A Preferred Stock, voting
together as a single series.
Section 11. Fractional Shares. Series A Preferred Stock may be issued
-----------------
in fractions of a share (in one one-hundredths (1/100) of a share and integral
multiples thereof) that shall entitle the holder thereof, in proportion to such
holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and have the benefit of all other rights of holders
of shares of Series A Preferred Stock.
IN WITNESS WHEREOF, we have executed and subscribed this Certificate
and do affirm the foregoing as true under the penalties of perjury this______
day of _____________, 1990.
______________________________________
[Name]
[Title]
Attest:
______________________________
[Name]
[Title]
5182N
Rights Agreement -- 5181N
10
<PAGE>
Exhibit B
---------
FORM OF
RIGHT CERTIFICATE
Certificate No. R-_____ _____ Rights
NOT EXERCISABLE AFTER DECEMBER 20, 2000 OR EARLIER IF
REDEEMED OR EXCHANGED. THE RIGHTS ARE SUBJECT TO REDEMPTION
AND EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
UNDER CERTAIN CIRCUMSTANCES SPECIFIED IN THE RIGHTS
AGREEMENT, RIGHTS BENEFICIALLY OWNED BY CERTAIN PERSONS OR
ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND
VOID.
Right Certificate
JACOBS ENGINEERING GROUP INC.
This certifies that _______________________________, or registered
assigns, is the registered owner of the number of Rights set forth above, each
of which entitles the owner thereof, subject to the terms and conditions of a
Rights Agreement (the "Rights Agreement") dated as of December 20, 1990 by and
between Jacobs Engineering Group Inc., aDelaware corporation (the "Company"),
and First Interstate Bank, Ltd. (the "Rights Agent"), to purchase from the
Company at any time prior to the earlier of the Redemption Date (as such term is
defined in the Rights Agreement) or 5:00 o'clock p.m., Los Angeles time, on
December 20, 2000, at the office or agency of the Rights Agent at 2661 West
Agoura Road, Calabasas, California 91302, Attention: Stock Transfer Department,
or at the office of its successor as Rights Agent, one one-hundredth of a fully
paid and nonassessable share of Series A Junior Participating Cumulative
Preferred Stock, par value $1.00 per share, of the Company (a "Preferred
Share"), or, in certain circumstances, other securities or other property, at a
purchase price of $90 per one one-hundredth of a Preferred Share (the "Exercise
Price"), upon presentation and surrender of this Right Certificate with the Form
of Election to Purchase, including Certificate, on the reverse side hereof
completed and duly executed, with signature guaranteed.
The number of Rights represented by this Right Certificate and the
Exercise Price set forth above are the number of Rights and the Exercise Price
as of December 20, 1990, based upon the Preferred Shares as constituted on such
date. As provided in the Rights Agreement, the Exercise Price and the number of
Preferred Shares or other securities or other property that may be purchased
upon the exercise of the Rights represented by this Right Certificate are
subject to modification and adjustment upon the occurrence of certain events.
The Rights Agreement contains a full description of the rights,
limitations of rights, obligations, duties and immunities of the Rights Agent,
the Company and the holders of Right
<PAGE>
Certificates. This Right Certificate is subject to all the terms and conditions
of the Rights Agreement, which terms and conditions are hereby incorporated
herein by reference and made a part hereof. Copies of the Rights Agreement are
on file at the principal executive offices of the Company and the above-
mentioned offices of the Rights Agent.
This Right Certificate, with or without other Right Certificates, upon
presentation and surrender at the above-mentioned offices of the Rights Agent,
with the Form of Assignment, including Certificate, on the reverse side hereof
completed and duly executed, with signature guaranteed, may be exchanged for
another Right Certificate or Right Certificates of like tenor and date
representing Rights entitling the holder thereof to purchase a like aggregate
number of Preferred Shares or, in certain circumstances, other securities or
other property, as the Rights represented by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be entitled to
receive, upon the surrender hereof with the Form of Election to Purchase,
including Certificate, on the reverse side hereof completed and duly executed,
with signature guaranteed, another Right Certificate or Right Certificates for
the number of whole Rights not exercised. Subject to the provisions of the
Rights Agreement, the Rights represented by this Right Certificate may be
redeemed by the Company, at its option, at a redemption price of $.01 per Right
or, upon the occurrence of certain events, the Company, at its option, may
exchange such Rights for fully paid and nonassessable shares of Common Stock,
par value $1.00 per share, of the Company at an exchange ratio of one share per
Right, which exchange ratio is subject to adjustment upon the occurrence of
certain events.
No fractional securities shall be issued upon the exercise of any
Right or Rights represented hereby (other than fractions of Preferred Shares
that are integral multiples of one one-hundredth of a Preferred Share, that may,
at the option of the Company, be represented by depositary receipts), but in
lieu thereof, a cash payment shall be made, as provided in the Rights Agreement.
No holder of this Right Certificate, as such, shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of the
Preferred Shares or other securities of the Company that may at any time be
issuable on the exercise hereof, nor shall anything contained herein be
construed to confer upon the holder hereof, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting stockholders (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, until the Right or
Rights represented by this Right Certificate shall have been exercised as
provided in the Rights Agreement.
2
<PAGE>
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal. Dated as of ___________.
Attest: JACOBS ENGINEERING GROUP INC.
By_________________________ By__________________________
Name: Name:
Title: Title:
Countersigned:
FIRST INTERSTATE BANK, LTD.
By_________________________
Name:
Title:
3
<PAGE>
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
------------------
(To be executed by the registered holder if such holder
desires to transfer any or all of the Rights
represented by this Right Certificate)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
________________________________________________________________________________
_______________________________________________________________________________,
(Name, address and social security or other
identifying number of transferee)
____________________________________ (____________) of the Rights represented by
this Right Certificate, together with all right, title and interest in and to
said Rights, and hereby irrevocably constitutes and appoints __________________
attorney to transfer said Rights on the books of Jacobs Engineering Group Inc.
with full power of substitution.
Dated: ____________________, 19__ ___________________________________
(Signature)
Signature Guaranteed:
Certificate
-----------
(to be completed, if true)
The undersigned hereby certifies that the Rights represented by this
Right Certificate are not Beneficially Owned by a 15% Stockholder or an
Affiliate or Associate of a 15% Stockholder (as such capitalized terms are
defined in the Rights Agreement).
Dated: ____________________, 19__ ___________________________________
(Signature)
Signature Guaranteed:
4
<PAGE>
Form of Reverse Side of Right Certificate
(continued)
NOTICE
The signatures to the foregoing Assignment and the foregoing
Certificate, if applicable, must correspond to the name as written upon the face
of this Right Certificate in every particular, without alteration or enlargement
or any change whatsoever, and must be guaranteed by a member firm of a
registered national securities exchange, a member of the National Association of
Securities Dealers, Inc., or a commercial bank or trust company having an office
or correspondent in the United States.
In the event that the foregoing Certificate is not duly executed, with
signature guaranteed, the Company may deem the Rights represented by this Right
Certificate to be Beneficially Owned by a 15% Stockholder or an Affiliate or
Associate of a 15% Stockholder (as such capitalized terms are defined in the
Rights Agreement), and not issue any Right Certificate or Right Certificates in
exchange for this Right Certificate.
5
<PAGE>
Form of Reverse Side of Right Certificate
(continued)
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed by the registered holder if such holder
desires to exercise any or all of the Rights
represented by this Right Certificate)
To Jacobs Engineering Group Inc.:
The undersigned hereby irrevocably elects to exercise ________________
________________ (__________) of the Rights represented by this Right
Certificate to purchase the following:
(Check one of the following boxes)
[_] the Preferred Shares or other securities or property issuable upon the
exercise of said number of Rights pursuant to Section 7(c) of the Rights
Agreement.
[_] the shares of the Common Stock, par value $1.00 per share, of the Company,
or other securities or property issuable upon the exercise of said number
of Rights pursuant to Section 11(a)(ii) of the Rights Agreement.
[_] the securities issuable upon the exercise of said number of Rights pursuant
to Section 13(a) of the Rights Agreement.
The undersigned hereby requests that any such property and a
certificate for any such securities be issued in the name of and delivered to:
________________________________________________________________________________
________________________________________________________________________________
(Name, address and social security or other
identifying number of issuee)
The undersigned hereby further requests that if said number of Rights
shall not be all the Rights represented by this Right Certificate, a new Right
Certificate for the remaining balance of such Rights be issued in the name of
and delivered to:
________________________________________________________________________________
________________________________________________________________________________
(Name, address and social security or other
identifying number of issuee)
Dated: __________________, 19__ _______________________________
(Signature)
Signature Guaranteed:
6
<PAGE>
Form of Reverse Side of Right Certificate
(continued)
Certificate
-----------
(to be completed, if true)
The undersigned hereby certifies that the Rights represented by this
Right Certificate are not Beneficially Owned by a 15% Stockholder or an
Affiliate or Associate of a 15% Stockholder (as such capitalized terms are
defined in the Rights Agreement).
Dated: ________________________, 19__ ___________________________________
(Signature)
Signature Guaranteed:
NOTICE
The signatures to the foregoing Assignment and the foregoing
Certificate, if applicable, must correspond to the name as written upon the face
of this Right Certificate in every particular, without alteration or enlargement
or any change whatsoever, and must be guaranteed by a member firm of a
registered national securities exchange, a member of the National Association of
Securities Dealers, Inc., or a commercial bank or trust company having an office
or correspondent in the United States.
In the event that the foregoing Certificate is not duly executed, with
signature guaranteed, the Company may deem the Rights represented by this Right
Certificate to be Beneficially Owned by a 15% Stockholder or an Affiliate or
Associate of a 15% Stockholder (as such capitalized terms are defined in the
Rights Agreement), and not issue any property or certificate for securities upon
the exercise of this Right Certificate or issue any new Right Certificate for
any remaining balance of unexercised Rights represented by this Right
Certificate.
5183N
Rights Agreement -- 5181N
7
<PAGE>
Exhibit C
---------
FORM OF
SUMMARY OF THE RIGHTS
On December 20, 1990, the Board of Directors of Jacobs Engineering
Group Inc. (the "Company") authorized and declared a dividend of one preferred
stock purchase right (a "Right") for each share of common stock, par value $1.00
per share, of the Company (the "Common Shares"). The dividend is payable on
January 4, 1991 (the "Record Date") to the holders of record of Common Shares as
of the close of business on such date.
The following is a brief description of the Rights. It is intended to
provide a general description only and is subject to the detailed terms and
conditions of a Rights Agreement (the "Rights Agreement") dated as of December
20, 1990 by and between the Company and First Interstate Bank, Ltd., as Rights
Agent (the "Rights Agent").
1. Common Share Certificates Representing Rights.
---------------------------------------------
Until the Distribution Date (as defined in Section 2 below), (a) the
Rights shall not be exercisable, (b) the Rights shall be attached to and trade
only together with the Common Shares and (c) the stock certificates representing
Common Shares Shall also represent the Rights attached to such Common Shares.
Common Share certificates issued after the Record Date and prior to the
Distribution Date shall contain a notation incorporating the Rights Agreement by
reference.
2. Distribution Date.
-----------------
The "Distribution Date" is the earliest of (a) the tenth business day
following the date of the first public announcement that any person (other than
the Company or certain related entities) has become the beneficial owner of 15%
or more of the then outstanding Common Shares (such person is a "15%
Stockholder" and the date of such public announcement is the "15% Ownership
Date"), (b) the tenth business day (or such later day as shall be designated by
a majority, but not less than three, of the independent directors) following the
date of the commencement of, Or the announcement of an intention to make, a
tender offer or exchange offer, the consummation of which would cause any person
to become a 15% Stockholder or (c) the first date, on or after the 15% Ownership
Date, upon which the Company is acquired in a merger Or other business
combination in which the Company is not the Surviving corporation or in which
the outstanding Common Shares are changed into or exchanged for stock or assets
of another person, or upon which 50% or more of the Company's consolidated
assets or earning power are sold (other than in transactions in the ordinary
course of business).
<PAGE>
In calculating the percentage of outstanding Common Shares that are
beneficially owned by any person, such person shall be deemed to beneficially
own any Common Shares issuable upon the exercise, exchange or conversion of any
options, warrants or other securities beneficially owned by such person;
provided, however, that such Common Shares shall not be deemed outstanding for
the purpose of calculating the percentage of Common Shares that are beneficially
owned by any other person. Notwithstanding the foregoing, if any person is the
beneficial owner of at least 15% of the outstanding Common Shares on the date of
the Rights Agreement, or thereafter becomes the beneficial owner of at least 15%
of the outstanding Common Shares as a result of any increase in the number of
Common Shares issuable upon the exercise, exchange or conversion of outstanding
securities, or any decrease in the number of outstanding Common Shares resulting
from any stock repurchase plan or self tender offer of the Company, then such
person shall not be deemed a "15% Stockholder" until such person thereafter
acquires beneficial ownership of, in the aggregate, a number of additional
Common Shares equal to 1% or more of the then outstanding Common Shares.
The Rights Agreement provides that (x) Dr. Joseph J. Jacobs and
certain related persons and entities, including Jacobs Family Foundation, Inc.,
are each conclusively deemed to beneficially own each other's Common Shares, and
(y) any person who is not an affiliate or director of Jacobs Family Foundation,
Inc. on December 20, 1990 and subsequently becomes a director shall not be
deemed to beneficially own any Common Shares that are beneficially owned by
Jacobs Family Foundation, Inc., and Jacobs Family Foundation, Inc. shall not be
deemed to beneficially own any Common Shares that are beneficially owned by such
person, solely by reason of such person being such a director. Under the
beneficial ownership definitions of the Rights Agreement, Dr. Jacobs is deemed
to own 28.0% of the outstanding Common Shares of the Company. However, under the
provisions of the Rights Agreement, Dr. Jacobs would not be deemed to be a "15%
Stockholder" unless and until he acquires a number of additional Common Shares
equal to 1% or more of the then outstanding Common Shares.
By reason of the beneficial ownership provisions of the rules and
regulations of the Securities and Exchange Commission governing proxy
statements, the Proxy Statement of the Company dated January 9, 1991 states that
Mr. Siggi B. Wilzig may be deemed to be the beneficial owner of 18.0% of the
outstanding Common Shares by reason of his relationships with Wilshire Oil
Company of Texas and The Trustcompany Bancorporation. Under the beneficial
ownership definitions of the Rights Agreement, Mr. Wilzig is conclusively
presumed to own beneficially the shares
DFM4/EXH.C 2.
<PAGE>
owned by Wilshire Oil Company of Texas and The Trustcompany Bancorporation.
Although no mention of Mr. Wilzig, Wilshire Oil Company of Texas or The
Trustcompany Bancorporation is made in the Rights Agreement, if Mr. Wilzig, The
Trustcompany Bancorporation or Wilshire Oil Company of Texas should acquire a
number of additional Common Shares equal to 1% or more of the outstanding Common
Shares, then Mr. Wilzig would be deemed to be a "15% Stockholder".
Upon the close of business on the Distribution Date, the Rights shall
separate from the Common Shares, Right certificates shall be issued and the
Rights shall become exercisable to purchase Preferred Shares as described in
Section 5 below.
3. Issuance of Right Certificates.
------------------------------
As soon as practicable following the Distribution Date, separate
certificates representing only Rights shall be mailed to the holders of record
of Common Shares as of the close of business on the Distribution Date, and such
separate Right certificates alone shall represent such Rights from and after the
Distribution Date.
4. Expiration of Rights.
--------------------
The Rights shall expire on December 20, 2000, unless earlier redeemed
or exchanged.
5. Exercise of Rights.
------------------
Unless the Rights have expired or been redeemed or exchanged, they may
be exercised, at the option of the holders, pursuant to paragraphs (a), (b) or
(c) below. No Right may be exercised more than once or pursuant to more than one
of such paragraphs. From and after the first event of the type described in
paragraphs (b) or (c) below, each Right that is beneficially owned by a 15%
Stockholder or that was attached to a Common Share that is subject to an option
beneficially owned by a 15% Stockholder shall be void.
(a) Right to Purchase Preferred Shares. From and after the close of
----------------------------------
business on the Distribution Date, each Right (other than a Right that has
become void) shall be exercisable to purchase one one-hundredth of a share of
Series A Junior Participating Cumulative Preferred Stock, par value $1.00 per
share, of the Company (the "Preferred Shares"), at an exercise price of $90 (the
"Exercise Price"). Prior to the Distribution Date, the Company may substitute
for all or any portion of the Preferred Shares that would otherwise be issuable
upon exercise
DFM/EXH.C 3.
<PAGE>
of the Rights, cash, assets or other securities having the same aggregate value
as such Preferred Shares. The Preferred Shares are nonredeemable and, unless
otherwise provided in connection with the creation of a subsequent series of
preferred stock, are subordinate to any other series of the Company's preferred
Stock, whether issued before or after the issuance of the Preferred Shares. The
Preferred Shares may not be issued except upon exercise of Rights. The holder of
a Preferred Share is entitled to receive when, as and if declared, the greater
of (i) cash and non-cash dividends in an amount equal to 100 times the dividends
declared on each Common Share or (ii) a preferential annual dividend of $1.00
per Preferred Share ($.01 per one one-hundredth of a Preferred Share). In the
event of liquidation, the holders of Preferred Shares shall be entitled to
receive a liquidation payment in an amount equal to the greater of (1) $1.00 per
Preferred Share ($.01 per one one-hundredth of a Preferred Share), plus all
accrued and unpaid dividends and distributions on the Preferred Shares, or (2)
an amount equal to 100 times the aggregate amount to be distributed per Common
Share. Each Preferred Share has 100 votes, voting together with the Common
Shares. In the event of any merger, consolidation or other transaction in which
Common Shares are exchanged, the holder of a Preferred Share shall be entitled
to receive 100 times the amount received per Common Share. The rights of the
Preferred Shares as to dividends, voting and liquidation preferences are
protected by antidilution provisions. It is anticipated that the value of one
one-hundredth of a Preferred Share should approximate the value of one Common
Share.
(b) Right to Purchase Common Shares of the Company. From and after the
----------------------------------------------
close of business on the tenth business day following the 15% Ownership Date,
each Right (other than a Right that has become void) shall be exercisable to
purchase, at the Exercise Price (initially $90), Common Shares with a market
value equal to two times the Exercise Price. If the Company does not have
sufficient Common Shares available for all Rights to be exercised, the Company
shall substitute for all or any portion of the Common Shares that would
otherwise be issuable upon the exercise of the Rights, cash, assets or other
securities having the same aggregate value as such Common Shares.
(c) Right to Purchase Common Stock of a Successor Corporation. If, on
---------------------------------------------------------
or after the 15% Ownership Date, (i) the Company is acquired in a merger or
other business combination in which the Company is not the surviving
corporation, (ii) the Company is the surviving corporation in a merger or other
business combination in which all or part of the outstanding Common Shares are
changed into or exchanged for stock or assets of another person or (iii) 50% or
more of the Company's consolidated assets or earning power are sold (other than
in
DFM4/EXH.C 4.
<PAGE>
transactions in the ordinary course of business), then each Right (other than a
Right that has become void) Shall thereafter be exercisable to purchase, at the
Exercise Price (initially $90), shares of common stock of the surviving
corporation or purchaser, respectively, with an aggregate market value equal to
two times the Exercise Price.
6. Adjustments to Prevent Dilution.
-------------------------------
The Exercise Price, the number of outstanding Rights and the number of
Preferred Shares or Common Shares issuable upon exercise of the Rights are
subject to adjustment from time to time as set forth in the Rights Agreement in
order to prevent dilution.
7. Cash Paid Instead of Issuing Fractional Securities.
--------------------------------------------------
With certain exceptions, no adjustment in the Exercise Price shall be
required until cumulative adjustments require an adjustment of at least 1%. No
fractional securities shall be issued upon exercise of a Right (other than
fractions of Preferred Shares that are integral multiples of one one-hundredth
of a Preferred Share and that may, at the election of the Company, be evidenced
by depositary receipts) and in lieu thereof, an adjustment in cash shall be made
based on the market price of such Securities on the last trading date prior to
the date of exercise.
8. Redemption.
----------
At any time prior to the earlier of (a) the tenth business day
following the 15% Ownership Date or (b) the first event of the type described in
Section 5(c) above, a majority, but not less than three, of the independent
directors may, at their option, direct the Company to redeem the Rights in
whole, but not in part, at a price of $.01 per Right (the "Redemption Price"),
and the Company shall so redeem the Rights. Immediately upon such action by the
independent directors (the date of such action is the "Redemption Date"), the
right to exercise Rights shall terminate and the only right of the holders of
Rights thereafter shall be to receive the Redemption Price.
9. Exchange.
--------
At any time after the 15% Ownership Date and prior to the first date
thereafter upon which a 15% Stockholder shall be the beneficial owner of 50% or
more of the outstanding Common Shares, a majority, but not less than three, of
the independent directors may, at their option, direct the Company to exchange
all, but not less than all, of the then outstanding Rights for
DFM4/EXH.C 5.
<PAGE>
Common Shares at an exchange ratio of one Common Share per Right (the "Exchange
Ratio"), and the Company shall so exchange the Rights. Immediately upon such
action by the independent directors, the right to exercise Rights shall
terminate and the only right of the holders of Rights thereafter shall be to
receive a number of Common Shares equal to the Exchange Ratio.
10. Stockholder Rights Prior to Exercise.
------------------------------------
Until a Right is exercised, the holder thereof, as such, shall have no
rights as a stockholder of the Company (other than rights resulting from such
holder's ownership of Common Shares), including, without limitation, the right
to vote or to receive dividends.
11. Amendment of Rights Agreement.
-----------------------------
A majority, but not less than three, of the independent directors may,
from time to time, without the approval of any holder of Rights, direct the
Company and the Rights Agent to supplement or amend any provision of the Rights
Agreement in any manner, whether or not such supplement or amendment is adverse
to any holder of Rights, and the Company and the Rights Agent shall so
supplement or amend such provision; provided, however, that from and after the
earliest of (a) the tenth business day following the 15% Ownership Date, (b) the
first event of the type described in Section 5(c) above, or (c) the Redemption
Date, the Rights Agreement shall not be supplemented or amended in any manner
that would materially and adversely affect any holder of outstanding Rights.
DFM4/EXH.C 6.
<PAGE>
EXHIBIT 10.1
JACOBS ENGINEERING GROUP INC.
1981 Executive Incentive Plan
(As Amended and Restated)
March 25, 1993
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
1. Purpose .................................................. 1
2. Definitions .............................................. 1
3. Shares of Capital Stock Subject to the Plan .............. 3
4. Administration of the Plan ............................... 3
5. Eligibility for Incentive Award .......................... 4
6. Issuance of Restricted Stock and Forfeiture Restrictions . 5
7. Options .................................................. 6
8. Stock Appreciation Rights ................................ 9
9. Adjustment Provisions .................................... 11
10. Change in Control ........................................ 12
11. Outside Director Stock Options ........................... 13
(a) Applicable Provisions of the Plan .................... 13
(b) Definitions .......................................... 13
(c) Grant of Options to Outside Directors ................ 14
(i) Eligibility ................................... 14
(ii) Appointment Grants ............................ 14
(iii) Annual Grants ................................. 14
(d) Terms of Outside Director Options .................... 14
(i) Option Agreement .............................. 14
(ii) Option Price .................................. 14
(iii) Exercisability ................................ 15
(e) Exercise of Options .................................. 16
(i) Persons Eligible to Exercise .................. 16
(ii) Manner of Exercise ............................ 16
(iii) Rights as a Shareholder ....................... 18
(iv) Conditions to Issuance of Stock Certificates .. 18
(f) Adjustment Provisions ................................ 18
(g) Other Provisions ..................................... 19
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
(i) Outside Director Options not Transferable ..... 19
(ii) Effective Date ................................ 19
12. General Provisions ........................................ 19
13. Amendment, Suspension and Termination of Plan ............. 21
14. Termination of The Plan ................................... 21
</TABLE>
iii
<PAGE>
JACOBS ENGINEERING GROUP INC.
1981 EXECUTIVE INCENTIVE PLAN
(As Amended and Restated)
March 25, 1993
1. Purpose. The purpose of the Jacobs Engineering Group Inc. 1981
Executive Incentive Plan is to secure for the Corporation and its stockholders
the benefits which accrue by providing officers, directors and key employees of
the Corporation who will be responsible for the future growth and success of the
Corporation the benefits arising from capital stock ownership, realization of
capital stock appreciation, or both. The Plan evidences a conviction that, by
providing such opportunities for officers, directors and policy making
employees, the Corporation can instill a sense of personal involvement in the
continued development and financial success of the Corporation and can encourage
them to remain with and devote their best efforts to the business of the
Corporation, thereby advancing the interests of the Corporation and its
stockholders.
2. Definitions. Unless the context clearly indicates otherwise, the
following terms, when used in this Plan, shall have the meanings set forth in
this Paragraph 2.
"Affiliate" means any corporation controlling, controlled by, or under
common control with the Corporation.
"Board of Directors" shall mean the Board of Directors of the
Corporation.
"Capital Stock" shall mean the common stock, $1.00 par value, of the
Corporation or such other class of shares or other securities as may be
applicable pursuant to the provisions of Paragraph 9.
"Committee" shall mean the Compensation and Benefits Committee or
other committee appointed by the Board of Directors to administer the Plan
pursuant Paragraph 4. The Board of Directors may, from time to time, remove
members from, or add members to, the Committee. Vacancies on the Committee,
however caused, shall be filled only by the Board of Directors.
"Corporation" shall mean Jacobs Engineering Group Inc.
"Employee" shall mean any employee of the Corporation, or of any of
its present or future parent or subsidiary corporations, or a corporation or a
parent or subsidiary corporation of such corporation issuing or assuming an
Option in
1
<PAGE>
a transaction to which Section 425(a) of the Internal Revenue Code applies,
whether such employee is so employed at the time this Plan is adopted or becomes
so employed subsequent to the adoption of this Plan.
"Fair Market Value" shall mean the closing price of the Capital Stock
on the composite transactions report of the national securities exchange on
which the Common Stock is then listed for the day on which the value is
determined. If such date is a Saturday, Sunday, legal holiday or other date on
which such exchange is closed, then the fair market value shall be determined as
the closing price on the first immediately preceding trading date.
"Incentive Award" shall mean an Option, Stock Appreciation Right or
Restricted stock granted under the Plan.
"Incentive Stock Option" shall mean an option as defined under Section
422 of the Internal Revenue Code and regulations thereunder.
"Insider" shall mean an Optionee who is required to file reports
pursuant to Section 16(a) of the 1934 Act.
"1934 Act" shall mean the Securities Exchange Act of 1934, as amended.
"Nonqualified Stock Option" shall mean an Option that is not an
Incentive Stock Option.
"Option" shall mean an option granted under the Plan to purchase
shares of Capital Stock.
"Optionee" shall mean any person to whom an Option is granted under
the Plan.
"Parent corporation" and "subsidiary corporation" shall have the
meanings assigned to them in Sections 425(e) and 425(f) of the Internal Revenue
Code.
"Plan" shall mean the Jacobs Engineering Group Inc. 1981 Executive
Incentive Plan as set forth herein and as amended from time to time.
"Restricted Stock" shall mean shares of Capital Stock granted pursuant
to Paragraph 6 of the Plan.
"Stock Appreciation Right" shall mean a right, granted pursuant to
Paragraph 8 of the Plan, to receive a number of shares of Capital Stock or, in
the discretion of the Committee, an amount of cash or a combination of shares
and cash, in either
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event based on an increase in the Fair Market Value of the shares subject to the
right.
"Tax Date" shall mean the date as of which any federal, state, local
or foreign tax is required to be withheld from an Optionee in connection with
the exercise of an Option or the sale or other disposition of Capital Stock
acquired upon the exercise of an Option.
3. Shares of Capital Stock Subject to the Plan.
(a) Subject to the provisions of subparagraph (c) of this
Paragraph 3 and Paragraph 9, the aggregate number of shares of capital Stock
which may be issued or transferred pursuant to Incentive Awards under the Plan
shall not exceed 3,048,900.
(b) The shares to be delivered under the Plan shall be made
available, at the discretion of the Board of Directors, either from authorized
but unissued shares of Capital Stock or previously issued shares reacquired by
the Corporation, including shares purchased in the open market.
(c) If any shares of Capital Stock subject to an Option are not
issued or transferred and cease to be issuable or transferable for any reason,
or if any shares of Restricted Stock granted under the Plan are forfeited to the
Corporation pursuant to the restrictions imposed on such shares in conformity
with the Plan, the shares not so issued or transferred and the shares so
forfeited shall no longer be charged against the limitation provided for in
Paragraph 3(a) and may again be made subject to Incentive Awards. However,
shares as to which an Option has been surrendered in connection with the
exercise of a related Stock Appreciation Right shall not again be available for
the grant of any further Incentive Awards.
4. Administration of the Plan.
(a) All provisions of the Plan except the provisions of Paragraph
11 shall be administered by a committee (the "Committee") appointed by the Board
of Directors of the Corporation (the "Board") from among its members and shall
be comprised of not less than three (3) members of the Board. Unless and until
its members are not qualified to serve on the Committee pursuant to the
provisions of the Plan, the Compensation and Benefits Committee of the Board
shall function as the Committee. Members of the Committee shall be members of
the Board who are not eligible to participate under the Plan or any other plan
of the Corporation or its Affiliates authorizing discretionary grants or awards
of stock, stock options or stock appreciation rights and who have not been
eligible to so participate for at least one (1) year prior to service as a
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member of the Committee. Eligibility requirements for members of the Committee
shall comply with Rule 16b-3 promulgated pursuant to the Securities Exchange Act
of 1934, as amended (the "1934 Act") or any successor rule or regulation. No
person, other than a member of the Committee, shall have any discretion
concerning decisions regarding the Plan except as otherwise set forth in this
Plan or as may be required by applicable law. The Committee shall determine the
key employees of the Corporation and its Affiliates (including officers, whether
or not they are directors) to whom, and the type of Incentive Award, the time or
times at which, Incentive Awards will be granted, the number of shares to be
subject to each Incentive Award, the duration of each Incentive Award, the time
or times within which the Incentive Award may be exercised, the cancellation of
the Incentive Award (with the consent of the holder thereof) and the other
conditions of the grant of the Incentive Award. The provisions and conditions
of the Incentive Awards need not be the same with respect to each Employee or
with respect to each Incentive Award. In making such determinations the
Committee may take into account the nature of the services rendered by the
respective employees, their present and potential contributions to the
Corporation's success and such other factors as the Committee in its discretion
shall deem relevant.
(b) The Committee shall have and may exercise such powers and
authority of the Board of Directors as may be necessary or appropriate for the
Committee to carry out its functions as described in the Plan, and any reference
in the Plan to any specific power or authority of the Committee shall not
derogate from the foregoing. Subject to the express provisions of the Plan, the
Committee shall also have authority to interpret the Plan, to prescribe, amend
and rescind rules and regulations relating to it, to determine the terms and
provisions of the respective Incentive Award agreements (which need not be
identical) and to make all other determinations necessary or advisable for the
administration of the Plan.
(c) The Committee shall select one of its members as its chairman
and shall hold its meetings at such times and places as it may determine. A
majority of its members shall constitute a quorum and all determinations of the
Committee shall be made by a majority of its members.
5. Eligibility for Incentive Award.
(a) The Committee shall determine and designate from time to time
those Employees of the Corporation and its subsidiary corporations who are to be
granted Incentive Awards. Incentive Awards may be granted only to salaried
officers or other salaried key employees of the Corporation and its subsidiary
corporations, but may be granted the same Employee on more than one occasion.
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<PAGE>
(b) Incentive Awards may be granted in the following forms:
(i) Restricted Stock, in accordance with Paragraph 6,
(ii) an Option, in accordance with Paragraph 7,
(iii) a Stock Appreciation Right, in accordance with Paragraph
8, or
(iv) a combination of one or more of the foregoing.
6. Issuance of Restricted Stock and Forfeiture Restrictions. An
Incentive Award in the form of shares of Restricted Stock may be issued to an
Employee under this Paragraph 6 from time to time as determined by the
Committee. The shares of Restricted Stock so issued to an Employee shall not be
sold, exchanged, transferred, pledged, hypothecated or otherwise disposed of,
and in the event of termination of the Employee's employment with the
Corporation for any reason (including death, unless the Committee in its sole
discretion deems to terminate the Forfeiture Restrictions following the death of
such Employee), the Employee shall be obligated, for no consideration, to
forfeit and surrender such shares (to the extent then subject to the Forfeiture
Restrictions) to the Corporation. The restrictions against disposition and the
obligation to forfeit and surrender shares to the Corporation are herein
referred to as "Forfeiture Restrictions", and the shares which are then subject
to the Forfeiture Restrictions are herein sometimes referred to as "Restricted
Stock." Certificates representing Restricted Stock shall be appropriately
legended to reflect the Forfeiture Restrictions.
The Forfeiture Restrictions with respect to Restricted Stock issued to
an employee under this Paragraph 6 shall lapse and be of no further force and
effect upon the expiration of the period of time fixed by the Committee upon the
issuance of such Restricted Stock; provided, however, that restrictions shall
not be removed sooner than as provided in the following schedule:
Time From Date Stock Free of
of Grant Restrictions
-------------- -------------
After 1st Year 20%
After 2nd Year 40%
After 3rd Year 60%
After 4th Year 80%
After 5th Year 100%
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In order to enforce the restrictions imposed upon shares of Restricted
Stock, the Committee may require any Employee to enter into an escrow agreement
providing that the certificates representing such shares of Restricted Stock
shall remain in the physical custody of an escrow holder until any or all of the
restrictions imposed pursuant to the Plan expire or shall have been removed.
All of the foregoing restrictions regarding shares of Restricted Stock
shall be evidenced by a written agreement from the purchaser of such shares
containing such terms and conditions, not inconsistent with the Plan, as the
Committee shall approve.
7. Options. An Incentive Award in the form of an Option shall be
subject to the following provisions:
(a) The day on which the Committee approves the granting of an
Option shall be considered as the date on which such Option is granted.
(b) The purchase price of each share of Capital Stock under each
Option shall not be less than 85% of the Fair Market Value of a share of Capital
Stock on the date on which the Option is granted.
(c) The Option shall not be transferable otherwise than by will or
by the laws of descent and distribution or pursuant to a qualified domestic
relations order as defined by the Internal Revenue Code of 1986, as amended, or
Title I of the Employee Retirement Income Security Act and may be exercised
solely by the Employee to whom granted or his duly appointed guardian or
personal representative, except as provided in Section 7(e), in the event of
such person's death.
(d) Each Option shall be subject to the condition that it shall
not be exercisable unless and until the Optionee shall have remained in the
employ of the Corporation for at least one year after the date on which the
Option is granted. An Option shall be exercisable after the end of the first
year following such granting date in accordance with such exercise schedule and
within such normal expiration date or dates (subject to earlier termination
dates as provided in the Plan) as the Committee may in its sole discretion
determine and provide in such Option. In no event, however, shall an Option be
exercisable after the expiration of the tenth year following the date on which
the option is granted.
(e) The Option shall terminate if and when the Optionee ceases to
be an Employee of the Corporation, except as follows:
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<PAGE>
(i) If an Optionee is permanently and totally disabled within
the meaning of Sections 422(c)(6) and 22(e)(3) of the Internal Revenue Code, or
dies while employed by the Corporation or while the Option theretofore granted
to him was exercisable by him in accordance with subparagraph (ii) below after
his retirement or the termination of his employment other than for cause, such
Option may be exercised (for not more than the number of shares as to which the
Optionee might have exercised his Option at the time of such disability or
death) by the Optionee in the event of disability and by the beneficiary in the
event of death who is designated pursuant to Paragraph 12(f) or, in the absence
of such designation or if no such beneficiary survives the Optionee, by such
person or persons as shall have acquired the Optionee's rights under the Option
by will or by the laws of descent and distribution, at any time (A) prior to the
normal expiration date provided for in such Option, in the event such normal
expiration date is less than one year following the date of disability or death,
or (B) within such one year, in the event that such normal expiration date is
more than one year following such date of disability or death.
(ii) If an Optionee retires or if his employment with the
Corporation is terminated for any reason other than by death, permanent
disability or termination for cause, the Option may be exercised (for not more
than the number of shares as to which the Optionee might have exercised his
Option on the date of his retirement or the date on which his employment was
terminated) at any time prior to the earlier of (A) the normal expiration date
provided for in such Option in the event such normal expiration date is less
than three months following the date of such retirement or termination, or (B)
within three months after such retirement or termination of employment in the
event that such normal expiration date is more than three months following the
date of such retirement or termination of employment. If an Optionee is
dismissed for cause, for which the Committee shall be the sole judge, his Option
shall expire forthwith. The Committee may determine that, for the purpose of the
Plan, an Optionee who is on a leave of absence will be considered as still in
the employ of the Corporation, provided that an Option shall be exercisable
during a leave of absence only as to the number of shares to which it was
exercisable at the commencement of such leave of absence, and provided that the
Optionee would still be considered an employee under Sections 421 and 422A of
the Internal Revenue Code and regulations thereunder.
(f) An Optionee electing to exercise an Option shall give written
notice to the Corporation of such election and of the number of shares he has
elected to purchase and shall at
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<PAGE>
the time of exercise tender the full purchase price of the shares he has elected
to purchase. The purchase price shall be payable in full in cash or its
equivalent acceptable to the Corporation. In the discretion of the Corporation,
which discretion may be exercised by the Committee, the purchase price may be
paid by the assignment and delivery to the Corporation of shares of Capital
Stock of the Corporation or a combination of cash and such shares equal in value
to the Option exercise price. Any shares so assigned and delivered to the
Corporation in payment or partial payment of the purchase price shall be valued
at their Fair Market Value on the Option exercise date.
(g) In the discretion of the Corporation, which discretion may be
exercised by the Committee, all or any portion of any federal, state, local or
foreign taxes required to be withheld from an Optionee with respect to the
exercise of an Option or the sale or other disposition of any Capital Stock
acquired upon the exercise of an Option may be satisfied by the Optionee's
electing one of the following:
(i) Optionee's delivery to the Corporation of Capital Stock with
a Fair Market Value on the Tax Date equal to the amount of withholding
taxes so to be satisfied; or
(ii) Corporation's withholding from the shares of Capital Stock
that would otherwise be delivered upon exercise of an Option shares of
Capital Stock with a Fair Market Value on the Tax Date equal to the amount
of withholding taxes so to be satisfied.
The foregoing means of satisfying an Optionee's obligation to pay withholding
taxes are subject to the following additional rules and restrictions:
(y) In no event may the amount of withholding taxes to be
satisfied pursuant to this Section 7(g) exceed the total taxes payable
by the Optionee with respect to the Option exercise or early
disposition of shares acquired under an Option, computed at the
maximum rates applicable to such Optionee at the time of such
election.
(z) Each election to use Capital Stock to satisfy a
withholding tax obligation must (A) be in a written instrument signed
by the Optionee and stating the number of shares to be withheld or
surrendered or a formula pursuant to which such number may be
determined, and (B) be irrevocable.
The Committee shall adopt such rules and policies as may be required to enable
Insiders to use Capital Stock to satisfy
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<PAGE>
withholding requirements in compliance with Rule 16b-3 of the Securities
Exchange Commission and any successor rules and the interpretations of such
rules adopted by the Securities Exchange Commission.
(h) The Corporation may grant Nonqualified Stock Options or
Incentive Stock Options. All Incentive Stock Options granted under this Plan
shall comply in all respects with Section 422 of the Internal Revenue Code of
1986, as amended, and with any successor section thereto and all regulations and
rulings thereunder. Each written instrument evidencing an Incentive Stock Option
shall designate it as such; if a written instrument evidencing an Option does
not contain such a designation, then it shall not evidence an Incentive Stock
Option.
(i) To the extent an Option is exercised, any related Stock
Appreciation Right shall be proportionately reduced by a number of shares equal
to the shares with respect to which the Option is exercised.
(j) Each Option shall be evidenced by a written instrument
containing such terms and conditions, not inconsistent with the Plan, as the
Committee shall approve.
8. Stock Appreciation Rights.
(a) The day on which the Committee approves the granting of a
Stock Appreciation Right shall be considered as the date on which such Stock
Appreciation Right is granted.
(b) A Stock Appreciation Right may be granted in connection with
any Option granted under the Plan, either at the time of the grant of such
Option or at any time thereafter during the term of the Option, subject to
Paragraph 13 of the Plan.
(c) A Stock Appreciation Right shall entitle the holder of the
related Option, upon exercise of the Stock Appreciation Right, to surrender such
Option, or any portion thereof, to the extent unexercised in respect of the
number of shares as to which such Stock Appreciation Right is exercised, and to
receive payment of an amount computed pursuant to Paragraph 8(d)(ii). Such
Option shall, to the extent so surrendered, thereupon cease to be exercisable.
(d) A Stock Appreciation Right shall be subject to the following
terms and conditions and to such other terms and conditions, consistent with the
terms of the Plan, as the Committee may deem advisable:
(i) Subject to the second and third sentences of this
subparagraph (i), a Stock Appreciation Right shall be exercisable at such
time or times, and only
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<PAGE>
to the extent, that the related Option is exercisable and shall not be
transferable except to the extent that such related Option may be. Such
Stock Appreciation Right shall be exercisable by the holder thereof (or by
such other person entitled to exercise the related option pursuant to
Paragraph 7 of the Plan). The Committee may impose such conditions on
exercise of a Stock Appreciation Right as may be required to satisfy the
requirements of Rule 16b-3 under the Securities Exchange Act of 1934 (or
any other comparable provisions in effect at that time).
(ii) Upon exercise of a Stock Appreciation Right, the holder
thereof shall be entitled to receive payment of an amount determined by
multiplying:
(A) the difference obtained by subtracting the purchase
price of a share of Capital Stock specified in such related Option
from the Fair Market Value of a share of Capital Stock on the date of
exercise on such Stock Appreciation Right, by
(B) the number of shares with respect to which such Stock
Appreciation Right shall have been exercised.
(iii) Payment of the amount determined under subparagraph
(d)(ii) above shall be made solely in whole shares of Capital Stock valued
at their Fair Market Value on the date of exercise of the Stock
Appreciation Right (in the event that the division of such amount by such
Fair Market Value per share results in a fractional share, no such
fractional share shall be delivered, and the number of shares to be
delivered shall be founded to the next lower whole number, without any
payment or other adjustment for any fraction in excess of such whole
number), or alternatively, in the sole discretion of the Committee, solely,
in cash, or in such combination of cash and such whole shares as the
Committee, in its sole discretion, may deem advisable.
(e) In the event that a Stock Appreciation Right is exercised, any
shares of Capital Stock delivered as to the whole or part of the payment on such
exercise (i) may be authorized unissued or reacquired shares of Capital Stock,
(ii) shall be deemed allocated from the shares as to which the related Option is
surrendered in connection with such exercise, and (iii) shall not be separately
charged against the maximum limitation set forth in Paragraph 3(a).
(f) Each Stock Appreciation Right shall be evidenced by a written
instrument containing such terms and
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<PAGE>
conditions, not inconsistent with the Plan, as the Committee shall approve.
9. Adjustment Provisions.
(a) Subject to the provisions of Paragraph 9(b), if the outstanding
shares of Capital Stock of the Corporation are increased, decreased or exchanged
for a different number or kind of shares or other securities, or if additional
shares or new or different shares or other securities are distributed in respect
of such shares of Capital Stock or other securities, through merger,
consolidation, sale of all or substantially all of the property of the
Corporation, reorganization, recapitalization, reclassification, stock dividend,
stock split, reverse stock split or other distribution in respect of such shares
of Capital Stock or other securities, an appropriate and proportionate
adjustment shall be made in (i) the maximum number and kind of securities
provided in Paragraph 3(a) of the Plan, (ii) the number and kind of shares or
other securities subject to then outstanding Options and Stock Appreciation
Rights, (iii) the price for each share or other unit of any other securities
subject to such Options, but without change in the aggregate purchase price as
to which such Options remain exercisable, and (iv) the number and kind of shares
or other securities then subject to restrictions pursuant to Paragraph 6 of the
Plan.
(b) Upon the dissolution or liquidation of the Corporation or upon a
reorganization, merger or consolidation of the Corporation with one or more
corporations as a result of which the Corporation is not the surviving
corporation, or upon the sale of all or substantially all the property of the
Corporation, all Options and Stock Appreciation Rights then outstanding under
the Plan shall be fully vested and exercisable and the Forfeiture Restrictions
imposed by Paragraph 6 on Restricted Stock shall lapse unless provisions are
made in connection with such transaction for the continuance of this Plan and
the assumption or the substitution for such Incentive Awards of new options or
stock appreciation rights or restricted stock, as applicable, covering the stock
of a successor employer corporation, or a parent or subsidiary thereof, with
appropriate adjustments as to the number and kind of shares and prices.
(c) Adjustments under this Paragraph 9 shall be made by the Committee,
subject to the approval of the Board of Directors, whose determination as to
what adjustments shall be made, and the extent thereof, shall be final, binding
and conclusive. No fractional interests shall be issued under the Plan on
account of any such adjustment.
10. Change in Control. If the employment of the holder of an
Incentive Award with the Corporation and/or its Affiliates shall be terminated
for any reason within three years
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<PAGE>
following a Change in Control, then all Options and Stock Appreciation Rights
held by such holder shall be fully vested and exercisable and the Forfeiture
Provisions imposed by Paragraph 6 on Restricted Stock shall lapse.
A "Change in Control" shall mean a change in control of a nature that
would be required to be reported in response to item 6(e) of Schedule 14A of
Regulation 14A promulgated under the 1934 Act as in effect on November 21, 1991,
provided that such a Change in Control shall be deemed to have occurred at such
time as (i) any "person" (as that term is used in Sections 13(d) and 14(d)(2) of
the 1934 Act), is or becomes the "beneficial owner" (as defined in Rule 13d-3
under the 1934 Act) directly or indirectly, of securities representing 25% or
more of the combined voting power for election of directors of the then
outstanding securities of the Corporation or any successor of the Corporation;
(ii) during any period of two (2) consecutive years or less, individuals who at
the beginning of such period constituted the Board of Directors of the
Corporation cease, for any reason, to constitute at least a majority of the
Board of Directors, unless the election or nomination for election of each new
director was approved by a vote of at least two-thirds of the directors then
still in office who were directors at the beginning of the period; (iii) the
shareholders of the Corporation approve any merger or consolidation as a result
of which the Stock shall be changed, converted or exchanged (other than a merger
with a wholly-owned subsidiary of the Corporation) or any liquidation of the
Corporation or any sale or other disposition of 50% or more of the assets or
earning power of the Corporation; or (iv) the shareholders of the Corporation
approve any merger or consolidation to which the Corporation is a party as a
result of which the persons who were shareholders of the Corporation immediately
prior to the effective date of the merger or consolidation shall have beneficial
ownership of less than 50% of the combined voting power for election of
directors of the surviving corporation following the effective date of such
merger or consolidation; provided, however, that no Change in Control shall be
deemed to have occurred if, prior to such time as a Change in Control would
otherwise be deemed to have occurred, the Board of Directors determines
otherwise.
11. Outside Director Stock Options.
(a) Applicable Provisions of the Plan. All provisions of this Plan
shall apply to the Outside Director Options provided for in this Paragraph 11,
except the following provisions, which shall not be applicable thereto:
(i) The definition of "Fair Market Value" in Paragraph 2.
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(ii) Paragraphs 4 (Administration of the Plan), Paragraph 5
(Eligibility for Incentive Award), Paragraph 6 (Issuance of Restrictive
Stock and Forfeiture Restrictions), Paragraph 7 (Options), Paragraph 8
(Stock Appreciation Rights), Subparagraphs (a) and (c) of Paragraph 9
(Adjustment Provisions), Paragraph 10 (Change in Control) and Paragraph 12
(General Conditions).
(b) Definitions. The following terms, when used in this Paragraph 11,
shall have the meanings set forth in this Subparagraph 11(b):
"Disabled" shall mean an Outside Director's inability to perform the
duties of a director of the Corporation by reason of a mental or physical
impairment. The following shall constitute conclusive proof that an
Outside Director is disabled:
(1) The appointment by a court of competent jurisdiction of a
guardian or conservator of the person or estate of an Outside
Director; or
(2) An Outside Director's failure to attend any meetings of the
Board during a period of six months.
"Fair Market Value" shall mean the average closing price of the
Capital Stock on the composite transactions report of the National
Securities Exchange on which the Capital Stock is then listed for the ten
trading days ending on the second trading day prior to the date on which an
Option is granted pursuant to this Paragraph 11.
"Outside Director" shall mean a member of the Board of Directors who
is not also an employee of the Corporation or any of its subsidiaries.
"Outside Director Option" shall mean an Option granted pursuant to
this Paragraph 11.
"Retirement" shall mean resignation from the Board of Directors after
a Director has attained the age of 70 years with a minimum of five years of
service on the Board of Directors.
(c) Grant of Options to Outside Directors.
(i) Eligibility. All Outside Directors shall receive Options
pursuant to this Paragraph 11, but they shall not be eligible to receive
any Incentive Awards pursuant to Paragraphs 6, 7 or 8 of this Plan.
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<PAGE>
(ii) Appointment Grants. All persons who are Outside Directors
on the date when this Paragraph 11 is adopted by the Board of Directors
shall receive an initial grant of an Outside Director Option to purchase
2,000 shares of Capital Stock (the "Appointment Grant") on the first day of
the month following the date of adoption of this Paragraph 11. Outside
Directors who first become Directors after such adoption shall receive an
Appointment Grant on the first day of the month following the date upon
which they are elected to the Board of Directors.
(iii) Annual Grants. All Outside Directors shall also receive
annually on each first day of March following their receipt of their
Appointment Grant an Option to purchase 1,000 shares of Capital Stock.
(iv) Outside Director Options may not be granted for more than
100,000 shares of the Capital Stock reserved for the Plan by Paragraph 3(a)
of the Plan, adjusted as provided by Paragraph 9 of the Plan.
(d) Terms of Outside Director Options.
(i) Option Agreement. Each Outside Director Option shall be
evidenced by a written instrument containing such terms and conditions, not
inconsistent with this Paragraph 11 and the other applicable provisions of
the Plan, as the Corporation deems appropriate.
(ii) Option Price. The price of the shares of Capital Stock
subject to each Outside Director Option shall be 100% of the Fair Market
Value of such shares on the date such Option is granted but, if the price
as so determined is less than 85% of the closing price of the Capital Stock
as reported in the composite transactions report of the National Securities
Exchange on which the Capital Stock is then listed for the date of grant,
then such purchase price shall be 85% of such closing price.
(iii) Exercisability.
(A) No Outside Director Option may be exercised in whole or
in part until one year following the date upon which the Option is
granted;
(B) Subject to the provisions of Subparagraphs 11(d)(iii)(A)
and 11(f)(ii), which shall at all times preempt the provisions of this
Subparagraph 11(d)(iii)(B), an installment of 25% of each Outside
Director Option shall become exercisable one year following the date
of grant, with additional installments of 25% becoming exercisable on
each
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<PAGE>
anniversary date of the grant, so that all Options are fully
exercisable at the end of four years from the date of grant.
(C) No installment of an Outside Director Stock Option that
has not become exercisable on the date on which the holder thereof
ceases to be a director of the Corporation for any reason shall
thereafter become exercisable by such holder or his successors and
assigns.
(iv) Expiration of Outside Director Options. No Outside
Director Option may be exercised after the first to occur of the
following events:
(A) The expiration of one year from the date of the
Optionee's death; or
(B) Except in the case of an Optionee who is disabled,
or an Optionee's retirement, the expiration of three months from
the earlier of the date of the Optionee's resignation from or
replacement on the Board of Directors unless the Optionee dies
within said three-month period, in which case the limitation in
Subparagraph 11(d)(iv)(A) shall apply; or
(C) In the case of an Optionee who is disabled, the
expiration of one year from the date of the Optionee's
resignation from or replacement on the Board of Directors by
reason of such disability, unless the Optionee dies within said
one-year period, in which case the limitation in Subparagraph
11(d)(iv)(A) shall apply; or
(D) In the case of the retirement of an Optionee, the
expiration of one year from the date of the Optionee's
retirement, unless the Optionee dies within said one-year period,
in which case the limitation in Subparagraph 11(d)(iv)(A) shall
apply.
No Outside Director Option may be exercised to any extent by anyone
after the expiration of ten years from the date the Option was
granted.
(e) Exercise of Options.
(i) Persons Eligible to Exercise. Outside Director Options may
not be transferred by an Optionee other than by will or the laws of descent
and distribution or pursuant to a qualified domestic relations order as
defined
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<PAGE>
in the Internal Revenue Code of 1986, as amended, Title I of the Employee
Retirement Income Security Act or the rules thereunder. After the death of
the Optionee, any exercisable portion of such Option may, prior to the time
when such portion becomes unexercisable under the provisions of
Subparagraph 11(d)(iv), above, be exercised by the Optionee's personal
representative or by any person empowered to do so under court order, by
will or the laws of descent and distribution.
(ii) Manner of Exercise. An Outside Director Option, or any
exercisable portion thereof, may be exercised solely by delivery to the
Corporation of all of the following prior to the time when such Option or
portion thereof becomes unexercisable under Subparagraph 11(d)(iv):
(A) Notice in writing signed by the Optionee or other person
then entitled to exercise such Option or portion, stating that such
Option or portion is exercised; and
(B) Either:
(x) Full payment (in cash or by check) for the shares
with respect to which such Option or portion is thereby
exercised; or
(y) Vested shares of the Capital Stock of the
Corporation owned by the Optionee, duly endorsed for transfer to
the Corporation, with a Fair Market Value on the date of delivery
equal to the aggregate purchase price of the shares with respect
to which such Option or portion is thereby exercised; or
(z) Any combination of the consideration provided in
the foregoing subsections (x) and (y); and
(C) In the event the Outside Director Option or a portion
thereof is being exercised pursuant to subparagraph 11(e)(i) by any
person or persons other than the Optionee to whom it was originally
granted, appropriate proof, reasonably satisfactory to the
Corporation, of the authority of such person or persons to exercise
the Option or such portion thereof.
(D) If income tax withholding on the exercise of an Outside
Director Stock Option is required, then all or any portion of any
federal, state, local or foreign taxes required to be withheld
16
<PAGE>
from an Optionee with respect to the exercise of such Option may be
satisfied by the Optionee's electing one of the following:
(x) Optionee's delivery to the Corporation of Capital
Stock with a Fair Market Value on the Tax Date equal to the
amount of withholding taxes so to be satisfied; or
(y) Corporation's withholding from the shares of
Capital Stock that would otherwise be delivered upon exercise of
such Option shares of Capital Stock with a Fair Market Value on
the Tax Date equal to the amount of withholding taxes so to be
satisfied.
The foregoing means of satisfying an Optionee's obligation to pay
withholding taxes are subject to the following additional rules and
restrictions:
(I) In no event may the amount of withholding
taxes to be satisfied pursuant to this Clause (D) exceed the
total taxes payable by the Optionee with respect to the
Option exercise, computed at the maximum rates applicable to
such Optionee at the time of such election.
(II) Each election to use Capital Stock to satisfy
a withholding tax obligation must either (A) be in a written
instrument signed by the Optionee and stating the number of
shares to be withheld or surrendered or a formula pursuant
to which such number may be determined and be irrevocable;
or (B) otherwise be made in compliance with the Rules and
Regulations of the Securities and Exchange Commission under
the '34 Act relating to such elections, as from time to time
in effect.
In no event shall the Corporation be required to issue fractional shares,
and an Option may not be exercised for fewer than 100 shares.
(iii) Rights as a Shareholder. A holder of an Outside Director
Option shall not be, and shall not have any of the rights or privileges of,
a shareholder of the Corporation with respect to any shares of Capital
Stock purchasable upon the exercise of such Option unless and until such
Option shall have been exercised and a
17
<PAGE>
certificate or certificates evidencing such shares shall have been issued
by the Corporation to such holder.
(iv) Conditions to Issuance of Stock Certificates. The
Corporation shall not be required to issue or deliver any certificate or
certificates for shares of stock purchased upon the exercise of any Option
or portion thereof unless and until all legal requirements applicable to
such issuance or delivery have, in the opinion of counsel to the
Corporation, been complied with. In connection with any such issuance or
transfer, the person acquiring the shares shall, if requested by the
Corporation, give assurances satisfactory to such counsel in respect of
such matters as such counsel may deem desirable to assure compliance with
all applicable legal requirements.
(f) Adjustment Provisions.
(i) If the outstanding shares of Capital Stock of the Corporation
are increased, decreased or exchanged for a different number or kind of
shares or other securities, of if additional shares or new or different
shares or other securities are distributed in respect of such shares of
Capital Stock or other securities, through merger, consolidation, sale of
all or substantially all of the property of the Corporation,
reorganization, recapitalization, reclassification, stock dividend, stock
split, reverse stock split or other distribution in respect of such shares
of Capital Stock or other securities, there shall be an appropriate and
proportionate adjustment in
(x) the maximum number and kind of securities provided
in Subparagraph (c)(iv) of this Paragraph 11;
(y) the number and kind of securities and the option
price per share as provided in the unexercised portion of all
outstanding Outside Director Options, but without change in the
aggregate purchase price as to which such Options remain
exercisable; but
(z) there shall be no adjustment to the number of
shares to be granted to Outside Directors pursuant to
Subparagraphs (c)(ii) or (c)(iii) of this Paragraph 11.
(ii) Upon the dissolution or liquidation of the Corporation or
upon a reorganization, merger or consolidation of the Corporation with one
or more corporations as a result of which the Corporation is not the
surviving corporation, or upon the sale of all or
18
<PAGE>
substantially all the property of the Corporation, all Outside Director
Options then outstanding shall be fully vested and exercisable.
(g) Other Provisions.
(i) Outside Director Options not Transferable. No Outside
Director Option or interest or right therein or part thereof shall be
subject to or liable for the debts, contracts or engagements of the
Optionee or the Optionee's successors in interest, as the case may be, or
shall be subject to disposition by transfer, alienation, anticipation,
pledge, encumbrance, assignment or any other means whether such disposition
be voluntary or involuntary or by operation of law by judgment, levy,
attachment, garnishment or any other legal or equitable proceedings
(including bankruptcy), and any attempted disposition thereof shall be null
and void and of no effect; provided, however, that nothing in this
Subparagraph 11(g) shall prevent transfers by will or by the applicable
laws of descent and distribution. All Outside Director Stock Options are
intended to be non-qualified (non-statutory) stock options.
(ii) Effective Date. This Paragraph 11 shall become effective
immediately upon its adoption by the Board of Directors, but no Outside
Director Option may be exercised until six months and one day following
approval of this Paragraph 11 by the shareholders of the Corporation within
12 months after the date upon which the Board of Directors shall have
adopted the same.
12. General Provisions.
(a) With respect to any shares of Capital Stock issued or transferred
under any provisions of the Plan, such shares may be issued or transferred
subject to such conditions, in addition to those specifically provided in the
Plan, as the Committee may direct.
(b) Nothing in the Plan or in any instrument executed pursuant thereto
shall confer upon any Employee any right to continue in the employ of the
Corporation or shall affect the right of the Corporation to terminate the
employment of any Employee with or without cause.
(c) No shares of Capital Stock shall be issued or transferred pursuant
to an Incentive Award unless and until all legal requirements applicable to such
issuance or transfer have, in the opinion of counsel to the Corporation, been
complied with. In connection with any such issuance or transfer, the person
acquiring the shares shall, if requested by the Corporation, give
19
<PAGE>
assurances satisfactory to counsel to the Corporation in respect of such matters
as the Corporation may deem desirable to assure compliance with all applicable
legal requirements.
(d) No Employee (individually or as a member of a group), and no
beneficiary or other person claiming under or through such Employee, shall have
any right, title or interest in or to any shares of Capital Stock allocated or
reserved for the purpose of the Plan or subject to any Incentive Award except as
to such shares of Capital Stock, if any, as shall have been issued or
transferred to such Employee.
(e) The Corporation may make such provisions as it may deem
appropriate for the withholding of any taxes which the Corporation or a
subsidiary corporation determines it is required to withhold in connection with
any Incentive Awards.
(f) No Incentive Award and no right under the Plan, contingent or
otherwise, shall be assignable or subject to any encumbrance, pledge or charge
of any nature except that, under such rules and regulations as the Committee may
establish pursuant to the terms of the Plan, a beneficiary may be designated in
respect of an Incentive Award in the event of the death of the holder of such
Incentive Award and except, also, that if such beneficiary is the executor or
administrator of the estate of the holder of such Incentive Award, any rights in
respect of such Incentive Award may be transferred to the person or persons or
entity (including a trust) entitled thereto under the will of the holder of such
Incentive Award or, in the case of intestacy, under the laws relating to
intestacy.
(g) Nothing in the Plan is intended to be a substitute for, or to
preclude or limit the establishment or a continuance of, any other plan,
practice or arrangement for the payment of compensation or benefits to employees
generally, or to any class or group of employees, which the Corporation now has
or may hereafter lawfully put into effect, including, without limitation, any
retirement, pension, insurance, stock purchase, incentive compensation or bonus
plan.
13. Amendment, Suspension and Termination of Plan. The Board may
terminate the Plan, in whole or in part, may suspend the Plan, in whole or in
part, from time to time and may amend the Plan from time to time, including the
adoption of amendments deemed necessary or desirable to qualify the Incentive
Awards under the laws of various countries (including tax laws) and under rules
and regulations promulgated by the Securities and Exchange Commission (the
"SEC") with respect to employees who are subject to the provisions of Section 16
of the 1934 Act, or to correct any defect or supply an omission or reconcile any
inconsistency in the Plan or in any Incentive Award granted thereunder, without
the approval of the stockholders of the
20
<PAGE>
Corporation; provided, however, that no action shall be taken without the
approval of the stockholders of the Corporation to increase the number of shares
of Stock on which Incentive Awards may be granted, or materially increase the
benefits accruing to participants under the Plan, materially modify the
requirements as to eligibility for participation in the Plan, withdraw
administration from the Committee, or permit any person while a member of the
Committee to be eligible to receive, other than pursuant to a non-discretionary
formula plan, a grant or award of a stock option, a stock appreciation right or
other equity security of the Corporation or to amend Paragraph 11 of the Plan in
any respect; and, provided, further, that Paragraph 11 may not be amended more
often than once every six months other than to comport with changes in the
Internal Revenue Code, the Employee Retirement Income Security Act or the rules
thereunder. Without limiting the foregoing, the Board of Directors or the
Committee may make amendments applicable or inapplicable only to Insiders.
No amendment or termination or modification of the Plan shall in any
manner affect any Incentive Award theretofore granted without the consent of the
holder thereof, except that the Committee may amend or modify the Plan in a
manner that does affect Incentive Awards theretofore granted upon a finding by
the Committee that such amendment or modifications is in the best interest of
holders of outstanding Incentive Awards affected thereby.
This Plan is intended to comply with all applicable requirements of
Rule 16b-3 or its successors under the 1934 Act, insofar as Insiders are covered
thereby. To the extent any provision of the Plan does not so comply and cannot
for any reason be amended by the Board so as to comply, the provision shall, to
the extent permitted by law and deemed advisable by the Committee, be deemed
null and void with respect to such Insiders.
14. Termination of The Plan. Unless previously terminated by the
Board of Directors, the Plan shall terminate on January 1, 1999, and no
Restricted Stock may be issued, and no Option or Stock Appreciation Right may be
granted, under the Plan thereafter, but such termination shall not affect any
Incentive Award theretofore issued or granted.
21
<PAGE>
Exhibit 10.2
JACOBS ENGINEERING GROUP INC.
INCENTIVE BONUS PLAN
FOR OFFICERS AND KEY MANAGERS
Summary of the Program
The Jacobs Engineering Group Inc. Incentive Bonus Plan for Officers and Key
Managers (the "Bonus Plan") is designed to cover all officers and key managers
of Jacobs Engineering Group Inc. (the "Company") and its subsidiaries. Key
managers are normally defined as management level personnel who do not normally
receive overtime compensation and who have been approved for participation by
the President of the Company and the Chairman of the Board of Directors of the
Company.
Each year a bonus pool will be determined by formula. The Compensation Committee
may designate up to 5 percent of the pool to be set aside to fund charitable
and/or civic activities. Contributions to such charities and/or civic activities
from this fund shall be determined by a committee consisting of the Chairman of
the Board, President and Chief Financial Officer and shall be in the interests
of the Company and its officers and employees. From the pool, 70 percent, less
the amount designated above for charitable and/or civic activities, will be
allocated to participants in the Bonus Plan, and 30 percent will be reserved for
distribution to nonparticipating employees who have made an outstanding
contribution during the year. The allocation of the participant's portion of the
pool will be 50 percent by formula and 50 percent at the sole discretion of the
President and the Chairman. The allocation of the nonparticipant's portion of
the pool is at the sole and complete discretion of the President and Chairman of
the Board.
Bonuses will be paid in three annual installments unless the Company and the
participant involved mutually agree to a different arrangement. The first
installment will be paid approximately three months after the close of the first
fiscal year to which it pertains. A participant must be employed by the Company
or one of its subsidiaries at the time each installment is paid since it is the
intention of the Bonus Plan that the bonus is not only for services performed in
a particular year, but also for services to be rendered in the years when future
installments are to be paid. In other words, the bonus reflects a recognition of
services rendered and to be rendered. If an employee is a participant in the
Bonus Plan for less than a full year, the measure of his bonus will be
chronologically prorated.
Bonus Pool Formula
The bonus pool would be established as a percentage of pretax earnings above a
preset trigger point. The trigger will be established by the Board of Directors
at the beginning of each fiscal year. The trigger point for 1995 has been set at
12 percent of the Company's consolidated net worth at the middle of the fiscal
year. Once the trigger point is reached, the bonus pool would accrue at 20
percent of pretax income in excess of the trigger point. When pretax earnings
reach two times the trigger point, the
<PAGE>
Jacobs Engineering Group Inc.
Incentive Bonus Plan
Page 2 of 2
accrual would increase to 25 percent of pretax income in excess of two times the
trigger point. The percentage rate used for calculating the trigger point will
be established each year based on economic and market conditions in effect at
that time.
Allocation of Bonus Pool
Thirty percent of the bonus pool will be reserved for nonparticipants in the
Bonus Plan. The balance of the pool will be allocated to the Bonus Plan
participants, 50 percent based on their weighted salary (see table below) versus
the total weighted salaries of all participants of the Bonus Plan and 50 percent
at the sole discretion of the President and Chairman. The weighted salaries will
be determined by multiplying the salary earned while a participant in the Bonus
Plan times the following weighting factors:
Level Weighting Factor
-------------------- -------------------
Executive Officers 4
Group and Senior Officers 3
Other Officers 2
Managers 1
If a participant moves from one level to another during the year, the different
weighting factors would be applied to the salary earned at each level
Modification and Termination
This Bonus Plan is provided at the discretion of Jacobs Engineering Group Inc.
Nothing in the Bonus Plan shall be construed as creating an employment
relationship between any participant and the Company and its subsidiaries. The
Company has the exclusive right to modify the Bonus Plan, in whole or in part,
or to terminate the Bonus Plan entirely. The Company has the exclusive right to
administer the Bonus Plan, to interpret it, and to decide any and all matters
arising thereunder.
<PAGE>
EXHIBIT 10.3
------------
AGREEMENT
---------
This agreement is made as of the 30th day of November, 1993, between JACOBS
ENGINEERING GROUP INC., a Delaware corporation ("Company") and JOSEPH J. JACOBS
("Jacobs").
1. Effective October 1, 1993, Jacobs is to receive annual base
compensation at the rate of $425,000 per year. This compensation is partly in
recognition of past services for which Jacobs was undercompensated and for
future services in light of his standing and contributions to the success and
expansion of the Company. Company acknowledges that among the significant
contributions Jacobs has made to the business acquisitions for the Company. It
is expected that Jacobs will continue to perform this service. No separate or
extra compensation is to be paid Jacobs for any "finder" or service of like kind
whether Jacobs serves as a consultant or otherwise. Jacobs agrees to use his
best efforts to perform such service at the request of Company.
2. Payments hereunder shall be for a term of five years ending on
September 30, 1998. Payments shall be made no less often than annually as the
payor and payee may agree. For as long as Jacobs serves as an employee of the
Company, the compensation is deemed to be base salary. For such period as he
may act as a consultant to the Company and therefore as an independent
contractor, the payments shall be deemed to be made to him as an independent
contractor.
Page 1 of 7
<PAGE>
Should Jacobs die before the end of the term of this agreement, payment
shall continue to be made as though they were payments for a consultant. Jacobs
reserves the right to designate the successor payee in the event of his death.
In other words, payments shall continue for the term hereof whether Jacobs is
alive or not. Jacobs hereby designates his wife, Violet J. Jacobs, as the payee
from and after his death but upon the understanding that he may freely change
the designation during his lifetime. In the event he does not and Violet J.
Jacobs is not alive to receive the payments, then such payments otherwise
payable to the designee of Jacobs shall go to the trustee of Jacobs Family Trust
U/D/T dated October 13, 1980, as amended.
3. Nothing herein shall be deemed to affect the right of the Board of
Directors of the Company to have complete control over the duties Jacobs is to
perform either as an employee or as a consultant. It is contemplated that for as
long as Jacobs is able and willing to serve as Chairman of the Board of the
Company, then he may serve in that capacity. However he shall have no right to
such office should the board of directors in the future designate that he not be
an officer or employee of the Company.
4. Jacobs shall continue to serve substantially as he has in the past as
Chairman of the Board of the Company with such duties and responsibilities as he
currently has or as the board of directors may hereafter determine.
Page 2 of 7
<PAGE>
5. It is understood that Jacobs has served as a director of Polytechnic
Institute of New York, Genetics Institute and other entities. The Company does
not require Jacobs to serve in any outside capacity of the sort above-described
but consents to such service as long as it does not materially interfere with
his duties as they may be prescribed by the Board of Directors of the Company or
be in contravention of the non-competition provisions of this agreement.
6. Jacobs agrees to provide services as an employee of the Company and
also as a consultant to the Company in the event that he ceases to be an
employee. As a consultant, he will represent the Company in community and public
affairs, in the promotion of business expansion and good will, and in
undertaking special assignments for the Company or its board of directors in
keeping with his standing in the industry and community.
7. While he is an employee, Jacobs shall be entitled to participate in any
bonus plan which may be designed for the benefit of Company executives provided
however that his bonus, if any, is to be determined as to amount and timing by
the Compensation Committee or otherwise if so determined by the board of
directors.
For the year ended September 30, 1993, such bonus has been determined
to be $130,000.
8. Jacobs agrees to maintain club memberships in such clubs as he deems to
be appropriate to his performance hereunder.
Page 3 of 7
<PAGE>
Such club memberships presently include Annandale Country Club, California Club,
and others. He shall solely be responsible for the payment of dues to such
clubs. However, the Company agrees to reimburse him for direct expense
reasonably incurred by him in the pursuit of his business responsibilities
hereunder. Such reimbursement shall be made upon proof offered by Jacobs
satisfactory to the Company that the expense was incurred in the interests of
the Company.
9. Either as an employee or as a consultant, Jacobs shall continue to be
entitled to be a beneficiary of such medical or other benefit programs as are
made available to senior management officials. This shall include life insurance
and health benefits and shall apply, to the extent feasible, to his service
either as a employee or as a consultant.
10. The Company shall provide outside office and secretarial services to
Jacobs during such time as he may be a consultant.
11. During the term of this agreement, Jacobs shall not, without the prior
written consent of the Company, engage directly or indirectly (including by way
of example only, as an owner, greater than 5% shareholder, principal creditor,
partner, venturer, representative, employee or agent), nor have any direct or
indirect interest, in any business which competes with the Company or any of its
subsidiaries in any area of the world in which the Company or such subsidiary
engages in business during the term of this
Page 4 of 7
<PAGE>
agreement.
Jacobs shall not, directly or indirectly, disclose to any third person
any confidential records or information, or trade secrets relating to the
Company's business, nor shall Jacobs use such information except to discharge
his obligations hereunder or as otherwise permitted by the Company so long as
such information is not in the public domain. Breach by Jacobs of the terms
hereof shall entitle the Company to terminate compensation hereunder and to
obtain any and all other relief or remedies to which it is entitled at law or in
equity. The effectiveness and enforceability of the provisions of this paragraph
shall survive termination of this agreement.
12. As and when Jacobs becomes designated as consultant, it is the intent
of the parties hereto that the relationship of Jacobs and the Company shall be
that of independent contractors and not that of employer and employee.
Consultant shall at all times be responsible for the payment of all income and
other taxes due or arising out of the relationship created hereby.
13. The rights and duties of Jacobs hereunder shall not be assignable
without the consent of the Company. This agreement shall be binding upon and
shall inure to the benefit of any successor, heir, administrator or assignee of
any party hereto, any such successor being deemed substituted for such party
under the terms of this agreement. In the case of the Company, the term
"successor" as used herein shall include any person, firm,
Page 5 of 7
<PAGE>
corporation or other business entity which at any time, by merger, purchase or
otherwise, acquires all or substantially all of the assets or business of the
Company.
14. With respect to the matters specified herein, this agreement contains
the entire agreement between the parties and supersedes all prior oral and
written agreements, understandings and commitments between the parties. This
agreement shall not affect the provisions of any other compensation, retirement,
or other benefit programs of the Company to which Jacobs is presently a party or
of which he is now a beneficiary. No amendments to this agreement may be made
except by a writing signed by both parties.
15. Any notice or demand required or permitted to be given under this
agreement shall be in writing and shall be deemed effective upon the personal
delivery thereof if delivered or, if mailed, forty-eight hours after having been
deposited in the United States mail in Los Angeles County, postage prepaid and
addressed in the case of the Company to its then principal place of business,
presently 251 South Lake Avenue, Pasadena, California 91101-3063, and in the
case of Jacobs to the address set forth after his signature hereto. Either party
may change the address to which such notices are to be addressed by giving the
other party notice in the manner herein set forth.
16. To the full extent controllable by stipulation of the parties, this
agreement shall be interpreted and enforced under California law.
Page 6 of 7
<PAGE>
In WITNESS WHEREOF, the Company has caused this agreement to be executed by
its duly authorized representatives and Jacobs has affixed his signature, as of
the date first above written.
JOSEPH J. JACOBS
("Jacobs")
/s/ Joseph J. Jacobs
--------------------------------
251 S. Lake Ave.
Pasadena, California 91101
JACOBS ENGINEERING GROUP INC.
("Company")
By: /s/ Noel G. Watson
--------------------------------
Noel G. Watson,
President
By: /s/ John W. Prosser, Jr.,
--------------------------------
John W. Prosser, Jr.,
Senior Vice President,
Finance and Administration
Page 7 of 7
<PAGE>
AGREEMENT
---------
This agreement is made as of the 30th day of November, 1994, between JACOBS
ENGINEERING GROUP, INC. a Delaware corporation ("Company") and JOSEPH J. JACOBS
("Jacobs").
In accordance with previous practice, the term for the ending of the
November 30, 1993 employment agreement between the parties is extended from
September 30, 1998 to September 30, 1999. All of the other provisions of the
agreement shall remain in force.
IN WITNESS WHEREOF, the Company has caused this agreement to be executed by
its duly authorized representatives and Jacobs has affixed his signature, as of
the date first above written.
JOSEPH J. JACOBS
("Jacobs")
/s/ Joseph J. Jacobs
------------------------------------
251 S. Lake Ave.
Pasadena, California 91101
JACOBS ENGINEERING GROUP INC.
("Company")
By /s/ Noel G. Watson
----------------------------------
Noel G. Watson,
President
By: /s/ John W. Prosser, Jr.
---------------------------------
John W. Prosser, Jr.,
Senior Vice President,
Finance and Administration
<PAGE>
EXHIBIT 10.4
EXECUTIVE SECURITY PROGRAM
--------------------------
OF
--
JACOBS ENGINEERING GROUP INC.
-----------------------------
<PAGE>
EXECUTIVE SECURITY PROGRAM OF
-----------------------------
JACOBS ENGINEERING GROUP INC.
-----------------------------
Table of Contents
-----------------
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE I
DEFINITIONS AND CONSTRUCTION
1.1 Definitions I-1
1.2 Construction I-2
ARTICLE II
ELIGIBILITY AND PARTICIPATION
2.1 Eligibility II-1
2.2 Participation II-1
ARTICLE III
DEATH BENEFIT
3.1 Amount and Payment of Death Benefit III-1
3.2 Amount of Participant Salary Deferrals and Payments III-1
3.3 Time and Manner of Deferring Salary III-2
3.4 Participant Salary Deferrals and Payments - III-2
Use and Forfeitability
3.5 Waiver of Participant Payments III-2
ARTICLE IV
RETIREMENT BENEFIT
4.1 Normal Retirement IV-1
4.2 Early Retirement IV-1
4.3 Late Retirement IV-1
4.4 Termination of Participation IV-1
4.5 Re-employment After Retirement IV-1
4.6 Death IV-1
4.7 Accrual of Retirement Benefit IV-2
4.8 Forfeitability of Retirement Benefit IV-2
ARTICLE V
BENEFICIARY V-1
ARTICLE VI
LEAVE OF ABSENCE VI-1
ARTICLE VII
SOURCE OF BENEFITS
7.1 Benefits Payable from General Assets VII-1
7.2 Investments to Facilitate Payment of Benefits VII-1
7.3 Ownership of Insurance Contract VII-1
7.4 Company Obligation VII-1
</TABLE>
i
<PAGE>
<TABLE>
<S> <C>
ARTICLE VIII
TERMINATION OF EMPLOYMENT VII-1
ARTICLE IX
TERMINATION OF PARTICIPATION IX-1
ARTICLE X
TERMINATIONS, AMENDMENT, MODIFICATION
OR SUPPLEMENT OF PLAN
10.1 Termination X-1
10.2 Rights and Obligation Upon Termination X-1
ARTICLE XI
OTHER BENEFITS AND AGREEMENTS X1-1
ARTICLE XII
RESTRICTION ON ALIENATION OF BENEFITS XII-1
ARTICLE XIII
ADMINISTRATION OF THIS PROGRAM XIII-1
13.1 Appointment of Committee XIII-1
13.2 Committee Officials XIII-1
13.3 Committee Action XIII-1
13.4 Committee Rules and Powers - General XIII-1
13.5 Reliance on Certificates, etc. XIII-1
13.6 Liability of Committee XIII-2
13.7 Determination of Benefits XIII-2
13.8 Information to Committee XIII-2
13.9 Manner and Time of Payment of Benefits XIII-2
ARTICLE XIV
ADOPTION OF PLAN BY SUBSIDIARY, AFFILIATED
OR ASSOCIATED COMPANIES XIV-1
ARTICLE XV
MISCELLANEOUS
15.1 Execution of Receipts and Releases XV-1
15.2 No Guarantee of Interests XV-1
15.3 Company Records XV-1
15.4 Evidence XV-1
15.5 Notice XV-1
15.6 Change of Address XV-1
15.7 Effect of Provisions XV-1
15.8 Headings XV-1
15.9 Governing Law XV-2
</TABLE>
ii
<PAGE>
EXECUTIVE SECURITY PROGRAM
--------------------------
OF
--
JACOBS ENGINEERING GROUP INC.
-----------------------------
PURPOSE
The purpose of the Executive Security Program of JACOBS ENGINEERING GROUP
INC. and its subsidiaries is to provide specified benefits to a select group of
management and highly compensated employees who contribute materially to the
continued growth, development and future business success of JACOBS ENGINEERING
GROUP INC. and its subsidiaries. It is the intention of JACOBS ENGINEERING GROUP
INC. that this program and the individual plans established hereunder be
administered as unfunded welfare benefit plans established and maintained for a
select group of management or highly compensated employees.
ARTICLE I
DEFINITIONS AND CONSTRUCTION
----------------------------
1.1 Definitions. For purpose of this Program, the following phrases or
------------
terms shall have the indicated meanings unless otherwise clearly apparent from
the context.
(a) "Beneficiary" shall mean the person or persons or the estate of a
-----------
Participant entitled to receive any benefits under a Plan Agreement entered
into in accordance with the terms of this Program.
(b) "Board of Directors" shall mean the Board of Directors of JACOBS
------------------
ENGINEERING GROUP INC. unless otherwise indicated or the context otherwise
requires.
(c) "Committee" shall mean the Administrative Committee appointed to
---------
manage and administer the Program and individual Plan Agreements in
accordance with the provisions of Article XIV hereof.
(d) "Company" shall mean JACOBS ENGINEERING GROUP INC.
-------
(e) "Employee" shall mean any person who is in the regular fulltime
--------
employment of the company, as determined by the personnel rules and
practices of the Company or the subsidiary. The term does not include
persons who are retained by the Company solely as consultants.
(f) "Participant" shall mean an Employee who is selected and elects to
-----------
participate in the program through the execution of a Plan agreement in
accordance with the provisions of ARTICLE II.
(g) "Plan Agreement" shall mean the form of written agreement,
---------------
attached hereto as Annex I, which is entered into by and between the
Company and an Employee selected to become a Participant as a condition to
participation in the Program.
(h) "Program" shall mean the Executive Security Program of JACOBS
-------
ENGINEERING GROUP INC. as embodied herein and as amended from time to time.
I-1
<PAGE>
(i) "Retirement" and "Retire" shall mean severance of employment with
---------- ------
the company at or after the attainment of age fifty-five (55) with at least
one year participation.
1.2 Construction. The masculine gender when used herein shall be deemed to
------------
include the feminine gender, and the singular may include the plural unless the
context clearly indicated to the contrary. The words "hereof," "herein,"
"hereunder," and other similar compounds of the word "here" shall mean and refer
to the entire Program and not to any particular provision or section. Whenever
tne words "Article" or "Section" are used in this Program, or a cross-reference
to an "Article" or "Section" is made, the Article or Section referred to shall
be an Article or Section of this Program unless otherwise specified.
________________
End of Article l
I-2
<PAGE>
ARTICLE II
ELIGIBILITY AND PARTICIPATION
-----------------------------
2.1 Eligibility. In order to be eligible for participation in the Program,
-----------
an Employee must be selected by the Committee in the year preceding the year in
which the Employee is eligible to participate in each succeeding year thereafter
as hereinafter provided. The Committee, in its sole and absolute discretion,
shall determine eligibility for participation in accordance with the purposes of
the Program.
2.2 Participation. An Employee, having been selected to participate in
-------------
this Program by the Committee, shall, as a condition to participation, complete
and return to the Committee a duly executed Plan Agreement electing to
participate in the Program and agreeing to the terms and conditions thereof. The
executed Plan Agreement must be filed with the Committee at least ten (1O) days
prior to the first day of the year with respect to which the election to
participate pertains.
2.3 Participation During a Period of Disability. In the event that a
-------------------------------------------
Participant is disabled and is incapable of executing a Plan Agreement for the
forthcoming year, such Participant's Plan Agreement for the year in which the
Participant became disabled shall remain in force and effect for purpose of
receipt of benefits pursuant to Articles III and IV and payments of
contributions pursuant to Article VI, until such time as Participant executes a
new Plan Agreement.
_________________
End of Article II
II-1
<PAGE>
ARTICLE III
DEATH BENEFIT
-------------
3.1 Amount and Payment of Death Benefit. In the event a Participant dies
-----------------------------------
before retiring and the Program is in effect at the time, the Company will pay
or cause to be paid a Death Benefit (herein so called) to such Participant's
Beneficiary in the amount or amounts set forth in his Plan Agreement and as
therein specified, commencing on the first day of the month following the date
of such Participant's death, or as otherwise specified in his Plan Agreement.
Notwithstanding the immediately preceding paragraph of this Section 3.1, the
Company will pay or cause to be paid the Death Benefit specified therein only
if:
(a) At the time of the Participant's death prior to retirement, such
Participant was an Employee, or was on authorized leave of absence, and all
salary deferrals and payments required to be made by such Participant under 3.2
et. seq. have been made, or such salary deferrals or payments were waived
--------
pursuant to Section 3.5 because of such Participant's total disability:
(b) The Participant's Plan Agreement had been kept in force
throughout the period commencing on the date of such Plan Agreement and ending
on the date of his death; and
(c) The Participant's death was due to causes other than suicide
within one (1) year of the date of his Plan Agreement.
3.2 Amount of Participant Salary Deferral and Payments. Each Participant
--------------------------------------------------
shall defer an amount of his monthly compensation in the amounts and at such
times as determined by the Committee, depending upon the amount of Death Benefit
selected in a Participant's Plan Agreement (as such amount may be changed, from
time to time, by amendment of the Plan Agreement). In the event that a
Participant is authorized to take a leave of absence from employment or is
disabled, the Participant shall be required to make payments to the Company in
accordance with Article VI in order to maintain his Plan Agreement in force,
except as provided in Section 3.5. A Participant's obligation to defer an amount
of his monthly compensation in accordance with this Section 3.2 or to make the
payments required by Articles VI shall be stated in his Plan Agreement, shall
commence on the date his Plan Agreement becomes effective, and shall continue
thereafter during the term of his Plan Agreement or until the earlier of such
Participant's death, Retirement, or attainment of age sixty-five (65). A
Participant shall have the right to increase or decrease the amount of his Death
Benefit initially selected by him by amending his plan Agreement in accordance
with the rules adopted by the Committee for this purpose.
III-1
<PAGE>
3.3 Time and Manner of Deferring Salary or Making Payments. A Participant
------------------------------------------------------
shall, in his Plan Agreement, authorize the Company to defer a monthly amount of
such Participant's salary equal to the amount stated in Section 3.2. A
Participant who is on an authorized leave of absence or is disabled shall make
the payments required in Article VI at such time and in such manner as the
Company shall provide; provided, however, that the Participant shall continue to
make such payments during any period in which a portion of his salary is not
being deferred or such payments have not been waived pursuant to Section 3.5.
3.4 Participant Salary Deferrals and Payments - Use and Forfeitability.
------------------------------------------------------------------
The amount of each Participant's salary deferred pursuant to Section 3.2 and 3.3
shall be and remain solely the property of the Company and the amount collected
by the Company pursuant to section 3.2 and 3.3 from each Participant who is on
an authorized leave of absence or disabled shall be and become solely the
property of the Company, and a Participant shall have no right thereto, nor
shall the Company be obligated to use such amounts in any specific manner.
Except as provided in Article IV, if a Participant's death occurs under
circumstances other than those specified in Section 3.1, no benefit shall be
payable hereunder or under his Plan Agreement to his Beneficiary or any other
person or entity on his behalf, and any payments made by such Participant under
Sections 3.2 and 3.3 shall be forfeited.
3.5 Waiver of Participant Salary Deferral or Payments. If a Participant
-------------------------------------------------
becomes totally disabled before attaining age sixty-five, and if such total
disability continues for more than three (3) months, such Participant shall not
be required to defer a portion of his salary pursuant to Sections 3.2 and 3.3 or
make the payments provided for in Sections 3.2 or 3.3, beginning with the fourth
month following the date of such total disability, nor thereafter for as long as
such total disability continues.
The Company will be obligated to waive such required deferral arrangement or
payments only if:
(a) Such Disability is due to causes other than illegal or criminal
acts of the Participant, or intentionally self-caused acts;
(b) The Participant was an Employee at the time he became totally
disabled (or was then on authorized leave of absence) and made all payments
required herein;
(c) The Participant's Plan Agreement has been kept in force until
such time.
If, during this waiver period, a Participant attains the age of 65 and thereupon
Retires, or if he shall Retire before attaining age 65, or if he shall Retire
after attaining age 65, the Retirement Benefit provided in Article IV will be
paid.
III-2
<PAGE>
The determination of what constitutes total disability and the removal thereof
for purposes of this Article III, shall be made by the Committee, in its sole
and absolute discretion, and such determination shall be conclusive.
Notwithstanding the preceding provisions of this Section 3.5, the Company will
not be obligated to waive Participant salary deferral or payments under Sections
3.2 and 3.3 for any reason in the case of an Employee who initially becomes a
Participant after attaining age fifty-five (55).
_________________
End of Article III
III-3
<PAGE>
ARTICLE IV
RETIREMENT BENEFIT
------------------
4.1 Normal Retirement. If a Participant has remained an Employee until age
-----------------
65 and shall then Retire, and if this Participant has completed one year of
participation in the Plan, and if this Program and his Plan Agreement have been
kept in force, the Company wi11 pay or cause to be paid to such Participant, as
a Retirement Benefit (herein so called), the amount per month specified in his
Plan Agreement, commencing on the first day of the month following such
Participant's retirement, or as otherwise specified in his Plan Agreement.
4.2 Early Retirement. In the event a Participant shall retire prior to
----------------
attaining age 65 but after attaining age 55, and if this Program and his Plan
Agreement have been kept in force, and if the Participant has completed one year
of participation in the Plan, such Participant shall be entitled to a Retirement
Benefit in an actuarially reduced amount, as determined by the Committee in its
sole and absolute discretion, commencing on the first day of the month following
such Retirement, or, if so provided in such Participant's Plan Agreement,
commencing at a later date which shall not be subsequent to the first day of the
calendar month after the Participant attains age 65.
4.3 Late Retirement. In the event a Participant shall retire after
---------------
attaining age 65, and if this Program and his Plan Agreement have been kept in
force, and if the Participant has completed one year of participation in the
Plan, the Company will pay or cause to be paid to such Participant, as a
Retirement Benefit, the amount per month specified in his Plan Agreement,
commencing on the first day of the month following such participant's
retirement, or as otherwise specified in his Plan Agreement. In the event there
is no Amount of Retirement After Age 65 Benefit specified in his Plan Agreement,
such Participant shall be entitled to receive an actuarially increased benefit
as determined by the Committee in its sole and absolute discretion.
4.4 Termination of Participation. In the event a Participant ceases to
----------------------------
participate in the Program before attaining age 65, and would otherwise be
entitled to an early retirement benefit, the payment of such benefit shall not
commence until the participant shall formally retire from the Company and no
death benefit shall be paid to his beneficiary under Article III.
4.5 Re-employment After Retirement. In the event a Participant retires
------------------------------
from the Company and receives retirement benefit payments, such payments shall
cease to be paid if the Participant returns to active employment with the
Company. The Retirement Benefit payments then remaining unpaid to such
participant shall be paid upon his subsequent retirement from the Company in
accordance with the payment schedule pursuant to which payments are made under
Sections 4.1,4.2, and 4.3.
4.6 Death. If a Participant shall die after becoming entitled to a
-----
Retirement Benefit, (whether the Retirement is before, on, or after the
attainment of age 65, but before the total amount payable to such Participant as
a Retirement Benefit has been paid, the Retirement Benefit payments then
remaining unpaid to such Participant shall be paid to such Participant's
Beneficiary, in accordance with the payment schedule pursuant to which payments
are made under Section 4.2 and 4.3.
IV-1
<PAGE>
If a Participant shall die under the circumstances specified in the preceding
paragraphs of this Section 4.6, then no Death Benefit shall be paid to his
Beneficiary under Article III, but such Beneficiary shall receive his Retirement
Benefit payments as set forth in the preceding paragraphs of this Section 4.6.
4.7 Accrual of Retirement Benefit. Notwithstanding any provision contained
-----------------------------
herein which may imply or specify to the contrary, no portion of the
Participant's Retirement Benefit shall accrue to him prior to the date that he
first satisfies the requirements for Retirement hereunder.
4.8 Forfeitability of Retirement Benefit. Notwithstanding any provision
------------------------------------
contained herein which may imply or specify to the contrary, a Participant's
right to receive a Retirement Benefit under this Program and his Plan Agreement
shall be forfeitable at all times prior to the date that he first satisfies the
requirements for Retirement hereunder.
________________
End of Article IV
IV-2
<PAGE>
ARTICLE V
BENEFICIARY
-----------
A Participant shall designate his Beneficiary to receive benefits under the
Program and his Plan Agreement by completing the appropriate space in the Plan
Agreement. If more than one Beneficiary is named, the shares and/or precedence
of each Beneficiary shall be indicated. As a condition co any married
Participant designating a Beneficiary other than his spouse, the Committee may
require the spouse's consent. A Participant shall have the right to change the
Beneficiary by submitting to the Committee a change of Beneficiary in the form
attached as Annex II hereof; provided, however, that no change of Beneficiary
shall be effective until acknowledge in writing by the Committee. If the Company
has any doubt as to the proper Beneficiary to receive payments hereunder, the
Company shall have the right to withhold such payments until the matter is
finally adjudicated. Any payment made by the Company in good faith and in
accordance with the provisions of this Program and a Participant's Plan
Agreement shall fully discharge the Company from all further obligations with
respect to such payments.
_______________
End of Article V
V-1
<PAGE>
ARTICLE VI
LEAVE OF ABSENCE
----------------
6.1 Required Payments. If a Participant is authorized by the Company for
-----------------
any reason, including military, medical, or other, to take a leave of absence
from employment, such Participant shall be required to make monthly payments in
order to maintain his Plan Agreement in force. Such required monthly payments
shall be an amount equal to the amount of the Participant's monthly compensation
that is to be deferred under the' terms of his Plan Agreement. A Participant
required to make payments under this Section 6.1 shall continue making such
required payments until the earlier of (i) the date he returns to work following
a leave of absence, (ii) the date such payments are waived pursuant to Section
3.5, or (iii) the effective date that he enters into a new Plan Agreement. If a
Participant's monthly payments are waived pursuant to Section 3.5 and
subsequently the Participant returns to work, he shall be required to resume
making monthly payments, in the amount specified above, to the Company until he
executes a new Plan Agreement, in order to maintain his Plan Agreement in force
in accordance with Section 2.3.
6.2 Failure to Make Required Payments. Failure to make payments required
---------------------------------
by Section 6.1 shall cause Participant's Plan Agreement to terminate without the
necessity of any notice from either party to the other. From and after such
termination, neither party shall have any further obligation to the other party
under this Program or such Plan Agreement.
_______________
End of Article VI
VI-1
<PAGE>
ARTICLE VII
SOURCE OF BENEFITS
------------------
7.1 Benefits Payable from General Assets. Amounts payable hereunder shall
------------------------------------
be paid exclusively from the general assets of the Company, and no person
entitled to payments hereunder shall have any claim, right, security interest,
or other interest in any fund, trust, account, insurance contract, or asset of
the Company which may be looked to for such payment. The Company's liability for
the payment of benefits hereunder shall be evidenced only by this Program and
each Plan Agreement entered into between the Company and a Participant.
7.2 Investments to Facilitate Payment of Benefits. Although the Company is
---------------------------------------------
not obligated to invest in any specific asset or fund, or purchase any insurance
contract, in order to provide the means for the payment of any liabilities under
this Program, the Company may elect to do so and, in such event, no Participant
shall have any interest whatever in such asset, fund, or insurance contract. In
the event the Company elects to purchase insurance contracts on the life of a
Participant as a means for making, offsetting, or contributing to any payment,
in full or in part, which may become due and payable by the Company under this
Program or a Participant's Plan Agreement, such Participant agrees to cooperate
in the securing of life insurance on his life by furnishing such information as
the Company and the insurance carrier may require, including the results and
reports of previous Company and other insurance carrier physical examinations,
taking such additional physical examinations as may be requested, and taking any
other action which may be requested by the Company and the insurance carrier to
obtain such insurance coverage. If a Participant does not cooperate in the
securing of such life insurance, or if the Company for any reason is unable to
obtain life insurance in the requested amount on the life of the Participant,
the Company shall have no further obligation to such Participant under this
Program, and such Participant's Plan Agreement shall terminate. If the insurance
carrier shall charge a rate other than standard to insure a Participant, then
such Participant shall defer an additional amount of his monthly compensation or
pay the Company an additional amount, as the case may be, in an amount equal to
the additional charge by reason of such rating.
7.3 Ownership of Insurance Contracts. The Company shall be the sole owner
--------------------------------
of any insurance contract or contracts acquired on the life of a Participant,
with all incidents of ownership therein, including, but not limited to, the
right to cash and loan values, dividends, if any, death benefits, and the right
of termination thereof, and a Participant shall have no interest whatsoever in
such contract or contracts, if any, and shall exercise none of the incidents of
ownership thereof.
7.4 Company Obligation. The Company shall have no obligation of any nature
------------------
whatsoever to a Participant under this Program or a Participant's Plan
Agreement, except as otherwise expressly provided herein and in such Plan
Agreement, if the Company purchases life insurance on a Participant's life
pursuant to this Program and the circumstance of the Participant's death
preclude payment of death proceeds under the insurance contract.
_______________
End of Article VII
VII-1
<PAGE>
ARTICLE VIII
TERMINATION OF EMPLOYMENT
-------------------------
Neither this Program nor a Participant's Plan Agreement, either singly or
collectively, in any way obligate the Company, or any subsidiary of the Company,
to continue the employment of a Participant with the Company, or any subsidiary
of the Company, nor does either limit the right of the Company, or any
subsidiary of the Company, at any time and for any reason to terminate the
Participant's employment. Termination of a Participant's employment with the
Company, or any subsidiary of the Company, for any reason, whether by action of
the Company, subsidiary, or Participant, shall immediately terminate his
participation in this Program and his Plan Agreement, and all further obligation
of either party thereunder, except as provided in Article 4.2. In no event shall
this Program or a Plan Agreement, either singly or collectively, by their terms
or implications constitute an employment contract of any nature whatsoever
between the Company, or any subsidiary, and a Participant.
________________
End of Article VIII
VIII-1
<PAGE>
ARTICLE IX
TERMINATION OF PARTICIPATION
----------------------------
A Participant reserves the right to terminate his participation in this
Program and his Plan Agreement at his election at any time by giving the Company
written notice of such termination.
_______________
End of Article IX
IX-1
<PAGE>
ARTICLE X
TERMINATIONS, AMENDMENT, MODIFICATION OR
----------------------------------------
SUPPLEMENT OF PLAN
------------------
10.1 Termination. The Company reserves the right to terminate, amend,
-----------
modify or supplement this Program, wholly or partially, and from time to time,
at any time. The Company likewise reserves the right to terminate, amend,
modify, or supplement any Plan Agreement, wholly or partially, from time to
time. Such right to terminate, amend, modify, or supplement this Program or any
Plan Agreement shall be exercised for the Company by the Committee; provided,
however, that:
(a) No action to terminate this Program or a Plan Agreement shall
be taken except upon written notice to each Participant to be affected
thereby, which notice shall be given not less than 30 days prior to such
action; and
(b) The Committee shall take no action to terminate this Program or
a Plan Agreement with respect to a Participant or his Beneficiary after the
payment of any benefit in accordance with Article III or Article IV has
commenced but has not been completed.
10.2 Rights and Obligations Upon Termination. Upon the termination of this
---------------------------------------
Program or any Plan Agreements, by either the Committee or a Participant in
accordance with the provisions for such termination, neither this Program nor
the Plan Agreement shall be of any further force and effect, and no party shall
have any further obligation under either this Program or any Plan Agreement so
terminated.
_______________
End of Article X
X-1
<PAGE>
ARTICLE XI
OTHER BENEFITS AND AGREEMENTS
-----------------------------
The benefits provided for a Participant and his Beneficiary hereunder and
under such Participant's Plan Agreement are in addition to any other benefits
available to such Participant under any other program or plan of the Company for
its employees, and, except as may otherwise be expressly provided for, this
Program and Plan Agreements entered into hereunder shall supplement and shall
not supersede, modify, or amend any other program or plan of the Company or a
Participant. Moreover, benefits under this Program and Plan Agreements entered
into hereunder shall not be considered compensation for the purpose of computing
contributions or benefits under any plan maintained by the Company, or any of
its subsidiaries, which is qualified under section 401 (a) of the Internal
Revenue Code of 1954, as amended.
_______________
End of Article XI
XI-l
<PAGE>
ARTICLE XII
RESTRICTION ON ALIENATION OF BENEFITS
-------------------------------------
No right or benefit under this Program or a Plan Agreement shall be subject
to anticipation, alienation, sale, assignment, pledge, encumbrance, or charge,
and any attempt to anticipate, alienate, sell, assign, pledge, encumber, or
charge the same shall be void. No right or benefit hereunder or under any Plan
Agreement shall in any manner be liable for or subject to the debts, contracts,
liabilities, or torts of the person entitled to such benefit. If any Participant
or Beneficiary under this Program or a Plan Agreement should become bankrupt or
attempt to anticipate, alienate, sell, assign, pledge, encumber, or charge any
right to a benefit hereunder or under any Plan Agreement, then such right or
benefit shall, in the sole and absolute discretion of the Committee, cease; and
in such event, the Committee may hold or apply the same or any part thereof for
the benefit of such Participant or Beneficiary, his spouse, children, or other
dependents, or any of them, in such manner and in such portion as the Committee,
in its sole and absolute discretion, may deem proper.
_______________
End of Article XII
XII-1
<PAGE>
ARTICLE XIII
ADMINISTRATION OF THIS PROGRAM
------------------------------
13.1 Appointment of Committee. The general administration of this Program,
------------------------
and any Plan Agreements executed hereunder, as well as construction and
interpretation thereof, shall be vested in the Committee, the number and members
of which shall be designated and appointed from time to time by, and shall serve
at the pleasure of, the Board of Directors. Any such member of the Committee may
resign by notice in writing filled with the secretary of the Committee.
Vacancies shall be filled promptly by the Board of Directors. Each person
appointed a member of the Committee shall signify his acceptance by filing a
written acceptance with the secretary of the Committee.
13.2 Committee Officials. The Board of Directors may designate one of the
-------------------
members of the Committee as chairman and may appoint a secretary who need not be
a member of the Committee. The secretary shall keep minutes of the Committee's
proceedings and all date, records and documents relating to the Committee's
administration of this Program and any Plan Agreements executed hereunder. The
Committee may appoint from its number such subcommittees with such powers as the
Committee shall determine and may authorize one or more of its members or any
agent to execute or deliver any instrument or make any payment on behalf of the
Committee.
13.3 Committee Action. All resolutions or other actions taken by the
----------------
Committee shall be by the vote of a majority of those members present at a
meeting at which a majority of the members are present, or in writing by all the
members at the time in office if they act without a meeting.
13.4 Committee Rules and Powers - General. Subject to the provisions of
------------------------------------
this Program, the Committee shall from time to time establish rules, forms, and
procedures for the administration of this Program, including Plan Agreements.
Except as herein otherwise expressly provided, the Committee shall have the
exclusive right to interpret this Program and any Plan Agreements, and to decide
any and all matters arising thereunder or in connection with the administration
of this Program and any Plan Agreements, and it shall endeavor to act, whether
by general rules or by particular decisions, so as not to discriminate in favor
of or against any person. The Committee shall have the exclusive right to
determine (i) total disability with respect to a Participant and (ii) the degree
thereof, either or both determinations to be made on the basis of such medical
and/or other evidence that the Committee, in its sole and absolute discretion,
may require. Such decisions, actions, and records of the Committee shall be
conclusive and binding upon the Company and all persons having or claiming to
have any right or interest in or under this Program.
13.5 Reliance on Certificates, etc. The members of the Committee and the
-----------------------------
officers and directors of the Company shall be entitled to rely on all
certificates and reports made by any duly appointed accountants, and on all
opinions given by any duly appointed legal counsel. Such legal counsel may be
counsel for the Company.
XIII-1
<PAGE>
13.6 Liability of Committee. No member of the Committee shall be liable
----------------------
for any act or omission of any other member of the Committee, or for any act or
omission on his own part, excepting only his own willful misconduct. The Company
shall indemnify and save harmless each member of the Committee against any and
all expenses and liabilities arising out of his membership on the Committee,
excepting only expenses and liabilities arising out of his own willful
misconduct. Expenses against which a member of the Committee shall be
indemnified hereunder shall include, without limitation, the amount of any
settlement or judgment, costs, counsel fees, and related charges reasonably
incurred in connection with a claim asserted, or a proceeding bought, or
settlement thereof. The foregoing right of indemnification shall be in addition
to any other rights to which any such member may be entitled a a matter of law.
13.7 Determination of Benefits. In addition to the powers hereinabove
-------------------------
specified, the Committee shall have the power to compute and certify, under this
Program and any Plan Agreement, the amount and kind of benefits from time to
time payable to Participants and their Beneficiaries, and to authorize all
disbursements for such purposes.
13.8 Information to Committee. To enable the Committee to perform its
------------------------
functions, the Company shall supply full and timely information to the Committee
on all matters relating to the compensation of all Participants, their
retirement, death or other cause for termination of employment, and such other
pertinent facts as the Committee may require.
13.9 Manner and Time of Payment of Benefits. The Committee shall have the
--------------------------------------
power, in its sole and absolute discretion, to change the manner and time of
payment of benefits to be made to a Participant or his Beneficiary from that set
forth in the Participant's Plan Agreement if requested to do so by such
Participant or Beneficiary.
_______________
End of Article XIII
XIII-2
<PAGE>
ARTICLE XIV
ADOPTION OF PLAN BY SUBSIDIARY,
-------------------------------
AFFILIATED OR ASSOCIATED COMPANIES
----------------------------------
Any corporation which is a wholly owned subsidiary of the Company may, with
the approval of the Board of Directors of the Company, adopt this Plan and
thereby come within the definition of Company in Article I hereof.
_______________
End of Article XIV
XIV-1
<PAGE>
ARTICLE XV
MISCELLANEOUS
-------------
15.1 Execution of Receipts and Releases. Any payment to any Participant, a
----------------------------------
Participant's legal representative, or Beneficiary in accordance with the
provisions of this Program or any Plan Agreement executed hereunder shall, to
the extent thereof, be in full satisfaction of all claims hereunder against the
Company. The Company may require such Participant, legal representative, or
Beneficiary, as a condition precedent to such payment, to execute a receipt and
release therefor in such form as it may determine.
15.2 No Guarantee of Interest. Neither the Committee not any of its
------------------------
members guarantees the payment of any amounts which may be or becomes due to any
person or entity under this Program or any Plan Agreement executed hereunder.
The liability of the Company to make any payment under this Program or any Plan
Agreement executed hereunder is limited to the then available assets of the
Company.
15.3 Company Records. Records of the Company as to a Participant's
---------------
employment, termination of employment and the reason therefor, reemployment,
authorized leaves of absence, and compensation shall be conclusive on all
persons and entities, unless determined to be incorrect.
15.4 Evidence. Evidence required by anyone under this Program and any Plan
--------
Agreement executed hereunder may be by certificate, affidavit, document, or
other information which the person or entity acting on it considers pertinent
and reliable, and signed, made, or presented by the proper party or parties.
15.5 Notice. Any notice which shall be or may be given under this Program
------
or a Plan Agreement executed hereunder shall be in writing and shall be mailed
by United States mail, postage prepaid. If notice is to be given to the Company,
such notice shall be addressed to the Company, at 251 S. Lake Avenue, Pasadena,
CA 911 01, marked to the attention of the Secretary, Administrative Committee,
Executive Security Plan; or, if notice to a Participant, addressed to the
address shown on such Participant's Plan Agreement.
15.6 Change of Address. Any party may, from time to time, change the
-----------------
address to which notices shall be mailed by giving written notice of such new
address.
15.7 Effect of Provisions. The provisions of this Program and of any Plan
--------------------
Agreement executed hereunder shall be binding upon the Company and its
successors and assigns, and upon a Participant, his Beneficiary, assigns, heirs,
executors, and administrators.
15.8 Headings. The titles and headings of Articles and Sections are
--------
included for convenience of reference only and are not to be considered in the
construction of the provisions hereof or any Plan Agreement executed hereunder.
XV-1
<PAGE>
15.9 Governing Law. All questions arising with respect to this Program and
-------------
any Plan Agreement executed hereunder shall be determined by reference to the
laws of the State of California, as in effect at the time of their adoption and
execution, respectively.
Signed this 14 day of February, 1983.
-- -------- ----
JACOBS ENGINEERING GROUP INC.
[ STAMP OF APPROVAL LEGAL APPEARS HERE ] By /s/ David D Myers
-------------------------------
President
ATTEST:
/s/ Robert J Shapiro
----------------------------
Secretary
(SEAL)
XV-2
<PAGE>
EXHIBIT 10.9
JACOBS ENGINEERING GROUP INC.
1989 EMPLOYEE STOCK PURCHASE PLAN
(As Amended and Restated)
February 21, 1992
1. Purposes of the Plan.
This Employee Stock Purchase Plan (the "Plan") is intended to encourage
stock ownership by employees of Jacobs Engineering Group Inc. (the "Company")
and certain subsidiaries of the Company. The Plan is intended to qualify as an
employee stock purchase plan under Section 423 of the Internal Revenue Code.
2. Administration.
The Plan shall be administered by a committee (the "Committee")
appointed by the Board of Directors of the Company (the "Board") from among its
members and shall be comprised of not less than three (3) members of the Board.
Unless and until its members are not qualified to serve on the Committee
pursuant to the provisions of the Plan, the Compensation and Benefits Committee
of the Board shall function as the Committee. Members of the Committee shall be
members of the Board who are not eligible to participate under the Plan or any
other plan of the Company or its affiliates authorizing discretionary grants or
awards of stock, stock options or stock appreciation rights and who have not
been eligible to so participate for at least one (1) year prior to service as an
administrator of the Plan. Eligibility requirements for members of the
Committee shall comply with Rule 16b-3 promulgated pursuant to the Securities
Exchange Act of 1934, as amended (the "1934 Act") or any successor rule or
regulation. No person, other than members of the Committee, shall have any
discretion concerning decisions regarding the Plan except as otherwise provided
in this Plan. The Committee is authorized to construe and interpret the Plan,
to define the terms used herein, to prescribe, amend and rescind rules and
regulations for the administration of the Plan, and to take any other action in
connection with the administration of the Plan and options granted hereunder
that it deems proper.
3. Grant of Options.
The Company shall grant to all eligible employees options to purchase
Common Stock of the Company in accordance with this Plan. All employees granted
options under the Plan shall have the same rights and privileges.
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An option may be granted effective only on the first day of a six-
month election period referred to in Paragraph 5 of the Plan. No option shall
be treated as granted prior to the first day of such election period.
4. Eligible Employees.
The employees eligible to receive options under the Plan shall be all
employees of the Company and all corporations that now are or hereafter become
domestic United States subsidiary corporations (as defined in Section 425(f) of
the Internal Revenue Code) and all employees of any foreign subsidiary
corporation designated from time to time by the Board of Directors. The Board
of Directors of the Company may change the designation of participating
subsidiaries at any time.
However, options shall not be granted to employees who normally work
fewer than 20 hours each week, employees who normally work five or fewer months
during the fiscal year of the Company, and employees who have completed less
than one year of service with the Company or a participating subsidiary of the
Company.
Employees of companies that have become subsidiaries by reason of
having been acquired by the Company or a subsidiary and companies that have been
merged with the Company or a subsidiary shall receive credit for the time they
have worked for such acquired or merged company.
Any employee who would own more than five percent of the Common Stock
in the Company immediately after an option under this Plan is granted shall also
be excluded from eligibility. Stock that the employee may purchase under all
outstanding stock options granted to him by the Company shall be treated as
stock owned by the employee for such purposes, even though the option is not
presently exercisable.
5. Exercise of Option
The employee may exercise the option to acquire the stock by
completing a Payroll Deduction Authorization Form in such form as shall have
been approved from time to time by the Committee. The election to exercise the
option shall be effective for a six month election period. The six-month
election periods shall be from September 1 to February 28/29, and from March 1
to August 31 of each year. The election shall be irrevocable.
In no event may an option be exercised later than the period of time
specified in Section 423(b)(7)(B) of the Internal
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Revenue Code. The option shall be treated as exercised on the last day of the
six-month election period.
6. Payment of Purchase Price.
If an employee exercises an option to purchase stock of the Company
under the Plan, the employee shall pay for the stock with after-tax salary
reduction contributions. The Company shall reduce an employee's salary or wages
by any integral percentage from 2% to 15% of basic compensation. The employee's
basic compensation shall include only regular fixed basic compensation, and
shall not include any bonus, overtime payment, contribution to an employee
benefit plan or other similar payment or contribution.
The employee shall specify the amount of salary reduction on the
Payroll Deduction Authorization Form referred to above. The salary reduction
contributions shall continue throughout the six-month election period.
As soon as practical after the end of the six-month election period, the
Company shall issue to the eligible employees who have exercised their options
Common Stock of the Company at the discounted prices specified in Paragraph 8 of
this Plan. The number of shares purchased shall be based upon the aggregate
amount of salary reduction contributions during the six-month election period.
No interest shall accrue on the salary reduction contributions prior to purchase
of the Common Stock.
7. Fractional Shares.
The Committee shall not purchase fractional shares. In the event that
the amount of salary reduction contributions of any employee is not exactly
equal to the purchase price for a whole number of shares, then any excess amount
shall be used to purchase additional shares of Common Stock during the next six-
month election period, or refunded to the employee without interest in the event
that the employee does not elect to purchase Common Stock during the next six-
month election period.
8. Purchase Price.
The purchase price for the Common Stock shall be the lower of (a) 90%
of the fair market value of the Common Stock on the first day of a six-month
election period for which an option has been exercised, or (b) 90% of the fair
market value of the Common Stock on the last day of such election period. In no
event shall the purchase price be less than the price specified in Section
423(b)(6) of the Internal Revenue Code.
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The fair market value for such purposes shall be the closing price of the
Common Stock on the composite transactions report of the national securities
exchange on which the Common Stock is then listed for the day on which the value
is to be determined. If such date is a Saturday, Sunday, legal holiday or other
date on which such exchange is closed, then the fair market value shall be
determined as the closing price on the first immediately preceding trading date.
9. Stock Subject to the Plan.
The total number of shares of Common Stock authorized to be issued
under this Plan is one million (1,000,000) shares, subject to adjustment as
provided in Paragraph 17. These shares may be authorized but unissued shares,
or issued shares which have been reacquired by the Company from any person.
10. Maximum Amount of Option Stock.
The maximum fair market value of Common Stock which an employee may
accrue the right to purchase under the Plan and any other employee stock
purchase plan of the Company or any subsidiary in any calendar year may not
exceed $25,000. The fair market value of the Common Stock for such purposes
shall be determined on the date that each option is granted (on the first day of
each six-month election period).
The maximum number of shares that an employee may purchase for any
six-month election period shall be determined on the first day of the election
period. The maximum number shall be determined by dividing 15 percent of total
salary or wages to be earned by each employee during the six-month election
period (based on the assumption that the employee's basic compensation does not
change after the first day of the election period) by an amount equal to 90% of
the fair market value of the Common Stock on the first day of the election
period. Any excess withholdings shall be used to buy Common Stock during the
next six-month election period or refunded to the employee without interest in
the event the employee does not elect to purchase Common Stock during the next
six-month election period.
11. Restrictions on Transferability.
An employee may not transfer an option other than by will or the laws
of descent and distribution or pursuant to a qualified domestic relations order
as defined by the Internal Revenue Code of 1986, as amended, or Title I of the
Employee Retirement Income Security Act. Only the employee may exercise an
option during his lifetime.
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12. Termination of Employment.
In the event that an eligible employee ceases to be employed by the
Company or a participating subsidiary for any reason, including death,
disability, retirement or voluntary or involuntary termination, then the
employee's rights under the Plan shall terminate. The Company shall refund to
the employee without interest the salary reduction contributions made by the
employee during the election period in which termination occurs.
13. Rights as a Stockholder.
No employee shall have any rights as a stockholder as to shares being
purchased during any six-month election period until after the end of a six-
month election period when the Common Stock has actually been issued to the
employee. No adjustment shall be made or additional amount paid as a result of
dividends or other rights for which the record date is prior to the date of such
issuance.
14. Listing, Registration and Qualification of Shares
The issuance of Common Stock under this Plan shall be subject to
applicable securities and other laws, including listing of the Common Stock on
all stock exchanges on which the Common Stock may be, from time to time, listed
and the registration of the Common Stock and options under the Securities Act of
1933.
15. Term of the Plan.
The term of the Plan shall be for a period of 10 years commencing on
March 1, 1989 and ending on February 28, 1999.
16. Amendments.
The Board may terminate the Plan, in whole or in part, may suspend
the Plan, in whole or in part, from time to time and may amend the Plan from
time to time, including the adoption of amendments deemed necessary or desirable
to qualify the Plan under the laws of various countries (including tax laws) and
under rules and regulations promulgated by the Securities and Exchange
Commission (the "SEC") with respect to employees who are subject to the
provisions of Section 16 of the 1934 Act, or to correct any defect or supply an
omission or reconcile any inconsistency in the Plan or in any option granted
thereunder, without the approval of the stockholders of the Company; provided,
however, that no action shall be taken without the approval of the stockholders
of the Company to increase the number of shares of Stock on which options may be
granted, or materially increase the benefits accruing to participants under the
Plan, or materially modify the requirements as to eligibility
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for participation in the Plan, or withdraw administration from the Committee, or
permit any person while a member of the Committee to be eligible to receive,
other than pursuant to a non-discretionary formula plan, a grant or award of a
stock option, a stock appreciation right or other equity security of the
Company. Without limiting the foregoing, the Committee may make amendments or
adopt rules and procedures applicable or inapplicable only to participants who
are subject to Section 16 of the 1934 Act.
No amendment or termination or modification of the Plan shall in any
manner affect any option theretofore granted without the consent of the
optionee, except that the Committee may amend or modify the Plan in a manner
that does affect options theretofore granted upon a finding by the Committee
that such amendment or modifications is in the best interest of holders of
outstanding options affected thereby.
This Plan is intended to comply with all applicable requirements of
Rule 16b-3 or its successors under the 1934 Act, insofar as participants subject
to Section 16 of that Act are concerned. To the extent any provision of the
Plan does not so comply, and cannot for any reason be amended by the Board, the
provision shall, to the extent permitted by law and deemed advisable by the
Committee, be deemed null and void with respect to such participants.
17. Adjustments for Changes in Common Stock.
In the event of any stock split, stock dividend, recapitalization,
merger, consolidation, reorganization or other similar event, the Board shall
make appropriate and proportionate adjustments, including the substitution and
issuance of shares in any successor corporation for Common Stock of the Company
to be issued under the Plan, to the maximum number of shares subject to the
Plan, and the price per share subject to outstanding options.
18. Miscellaneous.
This Plan is subject to all of the requirements of Section 423 of the
Internal Revenue Code and the regulations thereunder.
This Plan shall not confer any right on an employee to continue in the
employment of the Company or any subsidiary or division of the Company.
The Company shall not be obligated to issue any shares of Common Stock
under the Plan unless and until there has been compliance with such laws and
regulations as the Company deems applicable.
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EXHIBIT 10.10
INDEMNIFICATION AGREEMENT
THIS AGREEMENT is made this ______ day of ___________________ between
JACOBS ENGINEERING GROUP INC., a "Delaware corporation (the "Company'), and
______________________________("Indemnitee").
R E C I T A L S
A. The Company is aware that competent and experienced persons are
increasingly reluctant to serve as directors or officers of corporations unless
they are protected by comprehensive liability insurance or indemnification, due
to increased exposure to litigation costs and risks resulting from their service
to such corporations, and due to the fact that the exposure frequently bears no
reasonable relationship to the compensation of such directors and officers;
B. The statutes and judicial decisions regarding the duties of directors
and officers are often difficult to apply, ambiguous, or conflicting, and
therefore fall to provide such directors and officers with adequate, reliable
knowledge of legal risks to which they are exposed or information regarding the
proper course of action to take;
C. Plaintiffs often seek damages in such large amounts, and the costs of
litigation may be so enormous (whether or not the case is meritorious), that the
defense and/or settlement of such litigation is often beyond the personal
resources of officers and directors;
D. The Company believes that it is unfair for its directors and officers
to assume the risks of huge judgments and other expenses which may occur in
cases in which the director or officer received no personal profit and in cases
where the director or officer was not culpable;
E. The Company recognizes that the issues in controversy in litigation
against a director or officer of a corporation such as the Company or a
subsidiary of the Company are often related to the knowledge, motives and intent
of such director or officer, that he is usually the only witness with knowledge
of the essential facts and exculpating circumstances regarding such matters, and
that the long period of time which usually elapses before the trial or other
disposition of such litigation often extends beyond the time that the director
or officer can reasonably recall such matters; and may extend beyond the normal
time for retirement for such director or officer with the result that he, after
retirement or in the event of his death, his spouse, heirs, executors or
administrators, may be faced with limited ability and undue hardship in
maintaining an adequate defense, which may discourage such a director or officer
from serving in that position.
F. Based upon their experience as business managers, the Board of
Directors of the Company (the "Board") has concluded that, to retain and attract
talented and experienced individuals to serve as officers and directors of the
Company and to encourage such individuals to take the business risks necessary
for the success of the Company, it is necessary for the Company to contractually
indemnify its officers and directors and to assume for itself maximum liability
for expenses and damages in
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connection with claims against such officers and directors in connection with
their service to the Company, and has further concluded that the failure to
provide such contractual indemnification could result in great harm to the
Company and its shareholders;
G. Section 145 of the General Corporation Law of Delaware, under which
the Company is organized, ("Section 145") empowers the Company to indemnify its
officers, directors, employees and agents by agreement and to indemnify persons
who serve, at the request of the Company, as the directors, officers, employees
or agents of other corporations or enterprises, and expressly provides that the
indemnification provided by Section 145 is not exclusive;
H. The Company, has after reasonable investigation, determined that the
liability insurance coverage available to the Company as of the date hereof is
inadequate and unreasonably expensive. The Company believes, therefore, that the
interests of its shareholders would best be served by a combination of such
insurance as the Company may obtain, or request a subsidiary to obtain, pursuant
to its obligations hereunder and the indemnification by the Company of the
directors and officers of the Company and its subsidiaries;
I. The Company desires and has requested the Indemnitee to serve or
continue to serve as a director or officer of the Company of one or more of its
subsidiaries free from undue concern for claims for damages arising out of or
related to such services to the Company; and
J. The Indemnitee is willing to serve, or to continue to serve, the
Company and/or such subsidiaries, provided that he or she is furnished the
indemnity provided for herein.
NOW, THEREFORE, in consideration of Indemnitee's continued service after
the date hereof the parties hereto agree as follows:
1. INDEMNIFICATION
(a) Third Party Proceedings. The Company shall indemnify Indemnitee if
Indemnitee is or was a 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 Indemnitee is or was a director or officer of the Company, or any
subsidiary of the Company, by reason of any action or inaction on the part of
Indemnitee while an officer or director or by reason of the fact that Indemnitee
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 (if such settlement is approved in advance by the
Company, which approval shall not be unreasonably withheld) actually and
reasonably incurred by Indemnitee in connection with such action, suit or
proceeding if Indemnitee acted in good faith and in a manner that Indemnitee
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 Indemnitee's conduct was unlawful. 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
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a presumption that Indemnitee did not act in good faith and in a manner that
Indemnitee 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
reasonable cause to believe that Indemnitee's conduct was unlawful.
(b) Proceedings by or in the Right of the Company. The Company shall
indemnify Indemnitee if indemnitee was or is a party or is threatened to be made
a party to any threatened, pending or completed action or suit by or in the
right of the Company or any subsidiary of the Company to procure a judgment in
its favor by reason of the fact that Indemnitee is or was a director or officer
of the Company, or any subsidiary of the Company, by reason of any action or
inaction on the part of Indemnitee while an officer or director or by reason of
the fact that Indemnitee 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)
and amounts paid in settlement actually and reasonably incurred by Indemnitee in
connection with the defense or settlement of such action or suit if Indemnitee
acted in good faith and in a manner that Indemnitee 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 Indemnitee shall have been adjudged to be liable to the Company unless and
only to the extent that the Court of Chancery of the State of Delaware or the
court in which such action or suit was brought shall determine upon application
that, despite the adjudication of liability but in view of all the circumstances
of the case, Indemnitee is fairly and reasonably entitled to indemnity for such
expenses which the Court of Chancery of the State of Delaware or such other
court shall deem proper.
(c) MANDATORY PAYMENT OF EXPENSES. To the extent that Indemnitee has been
successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in Subsections (a) and (b) of this Section 1 or the
defense of any claim, issue or matter therein, Indemnitee shall be indemnffied
against expenses (including attorneys' fees) actually and reasonably incurred by
Indemnitee in connection therewith.
2. AGREEMENT TO SERVE. In consideration of the protection afforded by
this Agreement, if Indemnitee is a director of the Company, he or she agrees to
serve at least for the balance of the current term as a director and not to
resign voluntarily during such period without the written consent of a majority
of the Board of Directors. if Indemnitee is an officer of the Company not
serving under an employment contract, he or she agrees to serve in such capacity
at least for the balance of the current fiscal year of the Company and not to
resign voluntarily during such period without the written consent of a majority
of the Board of Directors. Following the applicable period set forth above,
Indemnitee agrees to continue to serve in such capacity at the will of the
Company (or under separate agreement, if such agreement exists) so long as he is
duly appointed or elected and qualified in accordance with the applicable
provisions of the Bylaws of the Company or any subsidiary of the Company or
until such time as he or she tenders his or her resignation in writing. Nothing
contained in this Agreement is intended to create any right to continued
employment of Indemnitee.
3. EXPENSES; INDEMNIFICATION PROCEDURE.
(a) Advancement of Expenses. The Company shall advance all expenses
incurred by Indemnitee in connection with the investigation, defense, settlement
or appeal of any civil or criminal action, suit or proceeding referenced in
Section 1 (a) or (b) hereof. Indemnitee hereby undertakes to repay such amounts
advanced only if, and to the extent that, it shall ultimately be determined that
Indemnitee is not entitled to be
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indemnified by the Company as authorized hereby. The advances to be made
hereunder shall be paid by the Company to Indemnitee within twenty (20) days
following delivery of a written request therefor by Indemnitee to the Company.
(b) Notice/Cooperation by Indemnitee. Indemnitee shall, as a condition
precedent to his or her right to be indemnffied under this Agreement, give the
Company notice in writing pursuant to Section 14, below, as soon as practicable
of any claim made against Indemnitee for which indemnification will or could be
sought under this Agreement. Notice shall be deemed received on the third
business day after the date postmarked if sent by domestic certified or
registered mail, properly addressed; otherwise notice shall be deemed received
when such notice shall actually be received by the Company. In addition,
Indemnitee shall give the Company such information and cooperation as it may
reasonably require and as shall be within Indemnitee's power.
(c) Procedure. Any indemnification and advances provided for in Section 1
and this Section 3 shall be made no later than forty-five (45) days after
receipt of the written request of Indemnitee. If a claim under this Agreement,
under any statute, or under any provision of the Company's Certificate of
Incorporation or Bylaws providing for indemnification, is not paid in full by
the Company within forty-five (45) days after a written request for payment
thereof has first been received by the Company, then Indemnitee may, but need
not, at any time thereafter bring an action against the Company to recover the
unpaid amount of the claim, and, subject to Section 13 of this Agreement,
Indemnitee shall also be entitled to be paid for the expenses (including
attorneys' fees) of bringing such action. It shall be a defense to any such
action (other than an action brought to enforce a claim for expenses incurred in
connection with any action, suit or proceeding in advance of its final
disposition) that Indemnitee has not met the standards of conduct which make it
permissible under applicable law for the Company to indemnify Indemnitee for the
amount claimed, but the burden of proving such defense shall be on the Company,
and Indemnitee shall be entitled to receive interim payments of expenses
pursuant to Subsection 3(a) unless and until such defense may be finally
adjudicated by court order or judgment from which no further right of appeal
exists. It is the parties' intention that, if the Company contests Indemnitee's
right to indemnification, the question of Indemnitee's right to indemnification
shall be for the court to decide, and neither the failure of the Company
(including its Board of Directors, any committee or subgroup of the Board of
Directors, independent legal counsel, or its stockholders) to have made a
determination that indemnification of Indemnitee is proper in the circumstances
because Indemnitee has met the applicable standard of conduct required by
applicable law, nor an actual determination by the Company (including its Board
of Directors, independent legal counsel, or its stockholders) that Indemnitee
has not met such applicable standard of conduct, shall create a presumption that
Indemnitee has or has not met the applicable standard of conduct.
(d) Notice to Insurers. If, at the time of the receipt of a notice of a
claim pursuant to Section 3(b) hereof, the Company has directors and officers
liability insurance in effect, the Company shall give prompt notice of the
commencement of such proceeding to the insurers in accordance with the
procedures set forth in the respective policies. The Company shall thereafter
take all necessary or desirable action to cause such insurers to pay, on behalf
of the Indemnitee, all amounts payable as a result of such proceeding in
accordance with the terms of such policies.
(e) Selection of Counsel. In the event the Company shall be obligated
under Section 3(a) hereof to pay the expenses of any proceeding against
Indemnitee, the Company, if appropriate, shall be entitled to assume the defense
of such proceeding,
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with counsel approved by Indemnitee, upon the delivery to Indemnitee of written
notice of its election so to do. After delivery of such notice, approval of such
counsel by Indemnitee and the retention of such counsel by the Company, the
Company will not be liable to Indemnitee under this Agreement for any fees of
counsel subsequently incurred by Indemnitee with respect to the same proceeding,
provided that (i) Indemnitee shall have the right to employ his or her counsel
in any such proceeding at Indemnitee's expense; and (ii) if (A) the employment
of counsel by Indemnitee has been previously authorized by the Company, (B)
Indemnitee shall have reasonably concluded that there may be a conflict of
interest between the Company and Indemnitee in the conduct of any such defense
or (C) the Company shall not, in fact, have employed counsel to assume the
defense of such proceeding, then the fees and expenses of Indemnitee's counsel
shall be at the expense of the Company.
4. ADDITIONAL INDEMNIFICATION RIGHTS; NONEXCLUSIVITY.
(a) Scope. Notwithstanding any other provision of this Agreement, the
Company hereby agrees to indemnify Indemnitee to the fullest extent permitted by
law, notwithstanding that such indemnification is not specifically authorized by
the other provisions of this Agreement, the Company's Certificate of
Incorporation, the Company's Bylaws or by statute. In the event of any change,
after the date of this Agreement, in any applicable law, statute, or rule which
expands the right of a Delaware corporation to indemnify a member of its board
of directors or an officer, such changes shall be, ipso facto, within the
purview of Indemnitee's rights and Company's obligations under this Agreement.
In the event of any change in any applicable law, statute or rule which narrows
the right of a Delaware corporation to indemnify a member of its board of
directors or an officer, such changes, to the extent not otherwise required by
such law, statute or rule to be applied to this Agreement shall have no effect
on this Agreement or the parties' rights and obligations hereunder.
(b) Nonexclusivity. The indemnification provided by this Agreement shall
not be deemed exclusive of any rights to which Indemnitee may be entitled under
the Company's Certificate of Incorporation, its Bylaws, any agreement, any vote
of stockholders or disinterested directors, the General Corporation Law of the
State of Delaware, or otherwise, both as to action in Indemnitee's official
capacity and as to action in another capacity while holding such office. The
indemnification provided under this Agreement shall continue as to Indemnitee
for any action taken or not taken while serving in an indemnffied capacity even
though he or she may have ceased to serve in such capacity at the time of any
action, suit or other covered proceeding.
5. PARTIAL INDEMNIFICATION. If Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for some or a
portion of the expenses, judgments, fines or penalties actually and reasonably
incurred by him or her in the investigation, defense, appeal or settlement of
any civil or criminal action, suit or proceeding, but not, however, for the
total amount thereof, the Company shall nevertheless indemnify Indemnitee for
the portion of such expenses, judgments, fines or penalties to which Indemnitee
is entitled.
6. MUTUAL ACKNOWLEDGMENT. Both the Company and Indemnitee acknowledge
that in certain instances, federal law or public policy may override applicable
state law and prohibit the Company from indemnifying its directors and officers
under this Agreement or otherwise. For example, the Company and Indemnitee
acknowledge that the Securities and Exchange Commission has taken the position
that indemnification is not permissible for liabilities arising under certain
federal securities laws, and federal legislation prohibits indemnification for
certain ERISA violations.
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Indemnitee understands and acknowledges that the Company has undertaken or may
be required in the future to undertake with the SEC to submit the question of
indemnification to a court in certain circumstances for a determination of the
Company's right under public policy to indemnify Indemnitee.
7. DIRECTORS AND OFFICERS LIABILITY INSURANCE. The Company shall, from
time to time, make the good faith determination whether or not it is practicable
for the Company to obtain and maintain a policy or policies of insurance with
reputable insurance companies providing the officers and directors of the
Company with coverage for losses from wrongful acts, or to ensure the Company's
performance of its indemnification obligations under this Agreement. Among other
considerations, the Company will weigh the costs of obtaining such insurance
coverage against the protection afforded by such coverage. In all policies of
directors and officers liability insurance, Indemnitee shall be named as an
insured in such a manner as to provide Indemnitee the same rights and benefits
as are accorded to the most favorably insured of the Company's directors, if the
Indemnitee is a director; or of the Company's officers, if Indemnitee is not a
director of the Company but is an officer. Notwithstanding the foregoing, the
Company shall have no obligation to obtain or maintain such insurance if the
Company determines in good faith that such insurance is not reasonably
available, if the premium costs for such insurance are disproportionate to the
amount of coverage provided, if the coverage provided by such insurance is
limited by exclusions so as to provide an insufficient benefit, or if Indemnitee
is covered by similar insurance maintained by a parent or subsidiary of the
Company.
8. SEVERABILITY. Nothing in this Agreement is intended to require or
shall be construed as requiring the Company to do or fail to do any act in
violation of applicable law. The Company's inability, pursuant to court order,
to perform its obligations under this Agreement shall not constitute a breach of
this Agreement. The provisions of this Agreement shall be severable as provided
in this Section 8. if this Agreement or any portion hereof shall be invalidated
on any ground by any court of competent jurisdiction, then the Company shall
nevertheless indemnify Indemnitee to the fullest extent permitted by any
applicable portion of this Agreement that shall not have been invalidated, and
the balance of this Agreement not so invalidated shall be enforceable in
accordance with its terms.
9. EXCEPTIONS. Any other provision herein to the contrary
notwithstanding, the Company shall not be obligated pursuant to the terms of
this Agreement:
(a) Claims Initiated by Indemnitee. To indemnify or advance expenses to
Indemnitee with respect to proceedings or claims initiated or brought
voluntarily by Indemnitee and not by way of defense, except with respect to
proceedings brought to establish or enforce a right to indemnification under
this Agreement or any other statute or law or otherwise as required under
Section 145 of the Delaware General Corporation Law, but such indemnification or
advancement of expenses may be provided by the Company in specific cases if the
Board of Directors finds it to be appropriate;
(b) Lack of Good Faith. To indemnify Indemnitee for any expenses incurred
by the Indemnitee with respect to any proceeding instituted by Indemnitee to
enforce or interpret this Agreement, if a court of competent jurisdiction
determines that each of the material assertions made by the Indemnitee in such
proceedings was not made in good faith or was frivolous;
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(c) Insured Claims. To indemnify Indemnitee for expenses or liabilities of
any type whatsoever (including, but not limited to, judgments, fines, ERISA
excise taxes or penalties, and amounts paid in settlements) which have been paid
directly to Indemnitee by an insurance carrier under a policy of directors' and
officers' liability insurance maintained by the Company; and
(d) Claims Under Section 16(b). To indemnify Indemnitee for expenses or
the payment of profits arising from the purchase and sale by Indemnitee of
securities in violation of Section 16(b) of the Securities Exchange Act of 1934,
as amended, or any similar successor statute.
10. CONSTRUCTION OF CERTAIN PHRASES.
(a) For purposes of this Agreement, references to the "Company' shall
include, in addition to the resulting corporation, any constituent corporation
(including any constituent of a constituent) absorbed in a consolidation or
merger that, if its separate existence had continued, would have had power and
authority to indemnify its directors and officers, so that, if Indemnitee is or
was a director or officer of such constituent corporation, or is or was serving
at the request of such constituent corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise, then Indemnitee shall stand in the same position under the
provisions of this Agreement with respect to the resulting or surviving
corporation as Indemnitee would have with respect to such constituent
corporation if its separate existence had continued.
(b) For purposes of this Agreement, references to 'other enterprises"
shall include employee benefit plans; references to 'fines' shall include any
excise taxes assessed on Indemnitee with respect to an employee benefit plan;
and references to "serving at the request of the Company' shall include any
service as a director, officer, employee or agent of the Company which imposes
duties on, or involves services by, such director, officer, employee or agent
with respect to an employee benefit plan, its participants or beneficiaries; and
if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed
to be in the interest of the participants and beneficiaries of an employee
benefit plan, Indemnitee shall be deemed to have acted in a manner 'not opposed
to the best interests of the Company' as referred to in this Agreement.
11. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original.
12. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
Company and its successors and assigns, and shall inure to the benefit of
Indemnitee and Indemnitee's estate, heirs, legal representatives and assigns.
13. ATTORNEYS' FEES. In the event that any action is instituted by
Indemnitee under this Agreement to enforce or interpret any of the terms hereof,
Indemnitee shall be entitled to be paid all court costs and expenses, including
reasonable attorneys' fees, incurred by Indemnitee with respect to such action,
unless as a part of such action, the court of competent jurisdiction determines
that each of the material assertions made by Indemnitee as a basis for such
action were not made in good faith or were frivolous. In the event of an action
instituted by or in the name of the Company under this Agreement or to enforce
or interpret any of the terms of this Agreement, Indemnitee shall be entitled to
be paid all court costs and expenses, including attorneys' fees, incurred by
Indemnitee in defense of such action (including with respect
-7-
<PAGE>
to Indemnitee's counterclaims and cross-claims made in such action), unless as a
part of such action the court determines that each of Indemnitee's material
defenses to such action were made in bad faith or were frivolous.
14. NOTICE. All notice, requests, demands and other communications under
this Agreement shall be in writing and shall be deemed duly given (i) if
delivered by hand and receipted for by the party addressee on the date of such
receipt, or (ii) if mailed by domestic certified or registered mail with postage
prepaid, on the third business day after the date postmarked. Addresses for
notice to either party are as shown on the signature page of this Agreement, or
as subsequently modified by written notice.
15. CONSENT TO JURISDICTION. The Company and Indemnitee each hereby
irrevocably consent to the jurisdiction of the courts of the State of Delaware
for all purposes in connection with any action or proceeding which arises out of
or relates to this Agreement and agree that any action instituted under this
Agreement shall be brought only in the state courts of the State of Delaware,
16. CHOICE OF LAW. This Agreement shall be governed by and its provisions
construed in accordance with the laws of the State of Delaware, as applied to
contracts between Delaware residents entered into and to be performed entirely
within Delaware.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
JACOBS ENGINEERING GROUP INC.
ATTEST: By: __________________________
_________________________________ Its: __________________________
Secretary
251 South Lake Avenue
Pasadena, California 91101
(SEAL)
AGREED TO AND ACCEPTED:
INDEMNITEE:
_________________________________
_________________________________
_________________________________
(Address)
-8-
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0
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