As filed with the Securities and Exchange Commission on June 26, 1997
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported): June 4, 1997
ELXSI Corporation
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(Exact name of Registrant as specified in its charter)
Delaware 0-11877 77-0151523
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(State of Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
4209 Vineland Road, Suite J-1, Orlando, Florida 32811
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (407) 849-1090
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Item 5. Other Events.
Rights Plan. On June 4, 1997, ELXSI Corporation (the "Company") entered
into a Rights Agreement, dated as of June 4, 1997 (the "Rights Agreement"), with
Continental Stock Transfer & Trust Company, as Rights Agent, and thereby put
into effect a "Rights Plan" previously adopted by the Board of Directors.
Pursuant to the Rights Agreement, the Board of Directors declared a dividend of
one right ("Right") for each share of Common Stock of the Company outstanding at
the opening of business on June 16, 1997. All shares of Common Stock of the
Company issued on or after such date will also have one attached Right. The
Rights have been registered under the Securities Exchange Act of 1934, as
amended, under a Form 8-A Registration Statement filed by the Company on June
10, 1997. Such Registration Statement includes a description of the Rights and
was filed with a conformed copy of the Rights Agreement, which is incorporated
herein by reference as Exhibit 4.17.
Bylaw Amendments. At the Company's 1997 Annual Meeting of Stockholders,
stockholders approved the addition of a new Article XV (Transfer Restrictions)
to the Company's Bylaws. Subsequent thereto, the Board of Directors of the
Company adopted certain other amendments to the Company's Bylaws, as follows:
(1) Section 6 (Special Meetings) of the Company's Bylaws was modified; (2) new
Section 13A (Counting Written Consents; Inspectors) was added; (3) new Section
13B (Notice of and Record Date for Stockholder Consents; Solicitation Period)
was added; (4) new Section 14A (Nominations for Directors) was added; (5) new
Section 14B (Business at Stockholder Meetings) was added; (6) Section 41 (now
titled Indemnification of Officers, Directors, Employees and other Agents) was
modified; and (7) certain other conforming changes to the Company's Bylaws were
made. A copy of Company's Bylaws as amended to date (including as aforesaid) is
filed herewith as Exhibit 3.3.
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Item 7(c) Exhibits.
Exhibit Number Description of Exhibit
3.3 Bylaws of the Company
4.17 Rights Agreement, dated as of June 4, 1997, between the
Company and Continental Stock Transfer & Trust Company, as
Rights Agent (incorporated herein by reference to Exhibit
4.17 to the Company's Form 8-A Registration Statement
filed June 10, 1997 (File No. 0- 11877)).
20.1 Form of Press Release of the Company, dated June 4, 1997,
regarding Rights Agreement and certain Bylaw amendments.
20.2 Form of Letter to the Company's stockholders describing
the Rights, dated June 20, 1997, together with
accompanying "Summary of Rights".
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SIGNATURE
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 hereunto duly authorized.
ELXSI CORPORATION
Dated: June 24, 1997 By:/s/ Alexander M. Milley
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Alexander M. Milley
President
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Exhibit 3.3
BYLAWS
OF
ELXSI CORPORATION
(as amended through June 23, 1997)
<PAGE>
INDEX*
ARTICLE I
Offices
Section 1. Registered Office............................................. 1
Section 2. Other Offices................................................. 1
ARTICLE II
Corporate Seal
Section 3. Corporate Seal................................................ 1
ARTICLE III
Stockholders' Meetings
Section 4. Place of Meetings............................................. 1
Section 5. Annual Meeting................................................ 1
Section 6. Special Meetings.............................................. 2
Section 7. Notice of Meetings............................................ 2
Section 8. Quorum........................................................ 2
Section 9. Adjournment and Notice of Adjourned Meetings.................. 2
Section 10. Voting Rights................................................. 3
Section 11. Joint Owners of Stock......................................... 3
Section 12. List of Stockholders.......................................... 3
Section 13. Action without Meeting........................................ 3
Section 13A. Counting Written Consents; Inspectors......................... 4
Section 13B. Notice of and Record Date for Stockholder Consents;
Solicitation Period......................................... 5
Section 14. Organization.................................................. 5
Section 14A. Nominations for Directors..................................... 6
Section 14B. Business at Stockholder Meetings.............................. 6
ARTICLE IV
Directors
Section 15. Number and Term of Office..................................... 7
Section 16. Powers........................................................ 7
Section 17. Vacancies..................................................... 7
Section 18. Resignation................................................... 8
Section 19. Removal....................................................... 8
Section 20. Meetings...................................................... 8
(a) Annual Meetings........................................ 8
(b) Regular Meetings....................................... 8
(c) Special Meetings....................................... 8
(d) Telephone Meetings..................................... 9
(e) Notice of Meetings..................................... 9
(f) Waiver of Notice....................................... 9
Section 21. Quorum and Voting............................................. 9
(a) Quorum................................................. 9
(b) Majority Vote.......................................... 9
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* This Index, and the covering page, do not form a part of these Bylaws.
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Section 22. Action Without Meeting........................................ 9
Section 23. Fees and Compensation......................................... 10
Section 24. Committees.................................................... 10
(a) Executive Committee.................................... 10
(b) Other Committees....................................... 10
(c) Term................................................... 10
(d) Meetings.............................................. 11
Section 25. Organization.................................................. 11
ARTICLE V
Officers
Section 26. Officers Designated........................................... 11
Section 27. Tenure and Duties of Officers................................. 12
(a) General................................................ 12
(b) Duties of Chairman of the Board of Directors........... 12
(c) Duties of President.................................... 12
(d) Duties of Vice Presidents.............................. 12
(e) Duties of Secretary.................................... 12
(f) Duties of Treasurer.................................... 13
Section 28. Resignations.................................................. 13
Section 29. Removal....................................................... 13
ARTICLE VI
Execution of Corporate Instruments and of Voting Securities
Owned by the Corporation
Section 30. Execution of Corporate Instruments............................ 13
Section 31. Voting of Securities Owned by the Corporation................. 14
ARTICLE VII
Shares of Stock
Section 32. Form and Execution of Certificates............................ 14
Section 33. Lost Certificates............................................. 14
Section 34. Transfers..................................................... 15
Section 35. Fixing Record Dates........................................... 15
Section 36. Registered Stockholders....................................... 15
ARTICLE VIII
Other Securities of the Corporation
Section 37. Execution of Other Securities................................. 15
ARTICLE IX
Dividends
Section 38. Declaration of Dividends...................................... 16
Section 39. Dividend Reserve.............................................. 16
ARTICLE X
Fiscal Year
Section 40. Fiscal Year................................................... 16
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ARTICLE XI
Indemnification of Officers, Directors, Employees and Other Agents
Section 41. Indemnification of Officers, Directors, Employees
and other Agents........................................... 17
(a) Officers and Directors. ............................... 17
(b) Employees and Other Agents............................. 17
(c) Good Faith............................................. 17
(d) Expenses. ............................................. 17
(e) Enforcement............................................ 18
(f) Non-Exclusivity of Rights.............................. 18
(g) Survival of Rights..................................... 18
(h) Insurance.............................................. 18
(i) Amendments............................................. 18
(j) Savings Clause......................................... 19
(k) Certain Definitions.................................... 19
ARTICLE XII
Notices
Section 42. Notices....................................................... 20
(a) Notice to Stockholders................................. 20
(b) Notice to Directors. .................................. 20
(c) Address Unknown........................................ 20
(d) Affidavit of Mailing. ................................. 20
(e) Time Notices Deemed Given.............................. 20
(f) Methods of Notice...................................... 20
(g) Failure to Receive Notices. ........................... 20
(h) Notice to Person with Whom Communication is Unlawful... 21
ARTICLE XIII
Amendments
Section 43. Amendments. ................................................. 21
ARTICLE XIV
Loans of Officers and Others
Section 44. Certain Corporate Loans and Guaranties........................ 21
ARTICLE XV
Transfer Restrictions
Section 45. Certain Definitions........................................... 21
"Corporation Securities"............................... 22
"Percentage Stock Ownership" .......................... 22
"Five-Percent Stockholder"............................. 22
"Person" .............................................. 22
"Prohibited Transfer".................................. 22
"Restriction Release Date"............................. 22
"Tax Benefits"......................................... 22
"Transfer"............................................. 22
"Treasury Regulationss.1.382".......................... 22
Section 46. Restrictions.................................................. 22
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Section 47. Certain Exceptions............................................ 23
Section 48. Treatment of Excess Securities................................ 23
Section 49. Legends; Board Determinations................................. 24
Section 50. Supremacy..................................................... 25
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BYLAWS
OF
ELXSI CORPORATION
(a Delaware corporation)
ARTICLE I
OFFICES
SECTION 1. Registered Office.
The registered office of the corporation in the State of Delaware shall
be in the City of Dover, County of Kent.
SECTION 2. Other Offices.
The corporation shall also have and maintain an office or principal
place of business at such place as may be fixed by the Board of Directors, and
may also have offices at such other places, both within and without the State of
Delaware as the Board of Directors may from time to time determine or the
business of the corporation may require.
ARTICLE II
CORPORATE SEAL
SECTION 3. Corporate Seal.
The corporate seal shall consist of a die bearing the name of the
corporation and the inscription, "Corporate Seal-Delaware." Said seal may be
used by causing it or a facsimile thereof to be impressed or affixed or
reproduced or otherwise.
ARTICLE III
STOCKHOLDERS' MEETINGS
SECTION 4. Place of Meetings.
Meetings of the stockholders of the corporation shall be held at such
place, either within or without the State of Delaware, as may be designated from
time to time by the Board of Directors, or, if not so designated, then at the
office of the corporation required to be maintained pursuant to Section 2
hereof.
SECTION 5. Annual Meeting.
The annual meeting of the stockholders of the corporation for the
purpose of election of Directors and for such other business as may lawfully
come before it shall be held on such date and at such time as may be designated
from time to time by the Board of Directors.
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SECTION 6. Special Meetings.
Special meetings of the stockholders of the corporation may be called,
for any purpose or purposes, by the President or the Board of Directors at any
time.
SECTION 7. Notice of Meetings.
Except as otherwise provided by law or the Certificate of Incorporation,
written notice of each meeting of stockholders shall be given not less than ten
(10) nor more than sixty (60) days before the date of the meeting to each
stockholder entitled to vote at such meeting, such notice to specify the place,
date and hour and purpose or purposes of the meeting. Notice of the time, place
and purpose of any meeting of stockholders may be waived in writing, signed by
the person entitled to notice thereof, either before or after such meeting, and
will be waived by any stockholder by his attendance thereat in person or by
proxy, except when the stockholder attends a meeting for the express purpose of
objecting, at the beginning of the meeting, to the transaction of any business
because the meeting is not lawfully called or convened. Any stockholder so
waiving notice of such meeting shall be bound by the proceedings of any such
meeting in all respects as if due notice thereof had been given.
SECTION 8. Quorum.
At all meetings of stockholders, except where otherwise provided by
statute or by the Certificate of Incorporation, or by these Bylaws, the
presence, in person or by proxy duly authorized, of the holders of a majority of
the outstanding shares of stock entitled to vote shall constitute a quorum for
the transaction of business. Any shares, the voting of which at said meeting has
been enjoined, or which for any reason cannot be lawfully voted at such meeting,
shall not be counted to determine a quorum at such meeting. In the absence of a
quorum any meeting of stockholders may be adjourned, from time to time, by vote
of the holders of a majority of the shares represented thereat, but no other
business shall be transacted at such meeting. The stockholders present at a duly
called or convened meeting, at which a quorum is present, may continue to
transact business until adjournment, notwithstanding the withdrawal of enough
stockholders to leave less than a quorum. Except as otherwise provided by law,
the Certificate of Incorporation or these Bylaws, all action taken by the
holders of a majority of the voting power represented at any meeting at which
quorum is present shall be valid and binding upon the corporation.
SECTION 9. Adjournment and Notice of Adjourned Meetings.
Any meeting of stockholders, whether annual or special, may be adjourned
from time to time by the vote of a majority of the shares, the holders of which
are present either in person or by proxy. When a meeting is adjourned to another
time or place, notice need not be given of the adjourned meeting if the time and
place thereof are announced at the meeting at which the adjournment is taken. At
the adjourned meeting the corporation may transact any business which might have
been transacted at the original meeting. If the adjournment is for more than
thirty (30) days, or if after the adjournment a new record date is fixed for the
adjourned meeting, a notice of the adjourned meeting shall be given to each
stockholder of record entitled to vote at the meeting.
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SECTION 10. Voting Rights.
For the purpose of determining those stockholders entitled to vote at
any meeting of the stockholders, except as otherwise provided by law, only
persons in whose names shares stand on the stock records of the corporation on
the record date, as provided in Section 12 of these Bylaws, shall be entitled to
vote at any meeting of stockholders. Every person entitled to vote or execute
consents shall have the right to do so either in person or by an agent or agents
authorized by a written proxy executed by such person or his duly authorized
agent, which proxy shall be filed with the Secretary at or before the meeting at
which it is to be used. An agent so appointed need not be a stockholder. No
proxy shall be voted on after three (3) years from its date of creation unless
the proxy provides for a longer period. All elections of Directors shall be by
written ballot, unless otherwise provided in the Certificate of Incorporation.
SECTION 11. Joint Owners of Stock.
If shares or other securities having voting power stand of record in the
names of two (2) or more persons, whether fiduciaries, members of a partnership,
joint tenants, tenants in common, tenants by the entirety, or otherwise, or if
two (2) or more persons have the same fiduciary relationship respecting the same
shares, unless the Secretary is given written notice to the contrary and is
furnished with a copy of the instrument or order appointing them or creating the
relationship wherein it is so provided, their acts with respect to voting shall
have the following effect: (a) if only one (1) votes, his act binds all; (b) if
more than one (1) votes, the act of the majority so voting binds all; (c) if
more than one (1) votes, but the vote is evenly split on any particular matter,
each faction may vote the securities in question proportionally, or may apply to
the Delaware Court of Chancery for relief as provided in the General Corporation
Law of Delaware, Section 217(b). If the instrument filed with the Secretary
shows that any such tenancy is held in unequal interests, a majority or
even-split for the purpose of this subsection (c) shall be a majority or
even-split in interest.
SECTION 12. List of Stockholders.
The Secretary shall prepare and make, at least ten (10) days before
every meeting of stockholders, a complete list of the stockholders entitled to
vote at said meeting, arranged in alphabetical order, showing the address of
each stockholder and the number of shares registered in the name of each
stockholder. Such list shall be open to the examination of any stockholder, for
any purpose germane to the meeting, during ordinary business hours, for a period
of at least ten (10) days prior to the meeting, either at a place within the
city where the meeting is to be held, which place shall be specified in the
notice of the meeting, or, if not specified, at the place where the meeting is
to be held. The list shall be produced and kept at the time and place of meeting
during the whole time thereof, and may be inspected by any stockholder who is
present.
SECTION 13. Action without Meeting.
Unless otherwise provided in the Certificate of Incorporation, any
action required by statute to be taken at any annual or special meeting of the
stockholders, or any action which may be taken at any annual or special meeting
of the stockholders, may be taken without
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a meeting, without prior notice (except as otherwise provided in Section 13B
hereof) and without a vote, if a consent in writing, setting forth the action so
taken, shall be signed by the holders of outstanding stock having not less than
the minimum number of votes that would be necessary to authorize or take such
action at a meeting at which all shares entitled to vote thereon were present
and voted. Prompt notice of the taking of the corporate action without a meeting
by less than unanimous written consent shall be given to those stockholders who
have not consented in writing.
SECTION 13A. Counting Written Consents; Inspectors.
(a) Within three (3) business days after the later of (x) the
fixing by the Board of Directors of a record date for any proposed
stockholder action or consent to be taken in writing in lieu of a
meeting ("Stockholder Consent") and (y) any such record date established
in any other manner, the Secretary or other officers of the corporation
shall engage a firm of independent inspectors of election ("Consent
Inspectors") for the purpose of performing a ministerial review of the
validity of any such proposed Stockholder Consent and revocations
thereof. The cost of retaining such Consent Inspectors shall be borne by
the corporation.
(b) Stockholder Consent forms and revocations thereof shall be
delivered to the Consent Inspectors upon receipt by (i) the corporation,
(ii) the stockholder or stockholders soliciting Stockholder Consents or
soliciting revocations of Stockholder Consents (the "Soliciting
Stockholder"), or (iii) the proxy solicitors or other authorized agents
of the corporation or the Soliciting Stockholder. As soon as Stockholder
Consents and revocations thereof are received, the Consent Inspectors
shall review the same and shall maintain a count of the number of valid
and unrevoked Stockholder Consents. The Consent Inspectors shall keep
such count confidential and, except as set forth below, shall not reveal
the count to the corporation, the Soliciting Stockholder, their
respective representatives or any other person or entity. As soon as
practicable (I) upon the request of the corporation or the Soliciting
Stockholder, and (II) after the earlier to occur of (x) the expiration
of the solicitation period with respect to the particular Stockholder
Consent and (y) the date on which the particular Stockholder Consent
shall appear (to the Consent Inspectors) to have received the valid and
unrevoked signatures of the requisite number of stockholders to become
effective, the Consent Inspectors shall issue a preliminary report to
the corporation and the Soliciting Stockholder stating: (A) the number
of valid Stockholder Consents; (B) the number of valid revocations of
Stockholder Consents; (C) the number of valid and unrevoked Stockholder
Consents; (D) the number of invalid Stockholder Consents; (E) the number
of invalid revocations of Stockholder Consents; and (F) based thereon,
whether the requisite number of valid and unrevoked Stockholder Consents
has been obtained to authorize or take the action(s) specified therein.
(c) Unless the corporation and the Soliciting Stockholder shall
agree to a shorter or longer period, the corporation and the Soliciting
Stockholder shall have 48 hours after the delivery of the preliminary
report of the Consent Inspectors pursuant to clause "(II)" of the
foregoing paragraph (b) to review the Stockholder Consents and
revocations thereof and to advise the Consent Inspectors and opposing
party in writing as to whether they intend to challenge such preliminary
report. If no such
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written notice of an intention to challenge such preliminary report is
received within 48 hours of its issuance by the Consent Inspectors, the
Consent Inspectors shall issue to the corporation and the Soliciting
Stockholder their final report containing the information called for in
clauses "(A)" through "(E)" of the foregoing paragraph (b) and, based
thereon, a certification as to whether the requisite number of valid and
unrevoked Stockholder Consents has been obtained to authorize or take
the action(s) specified therein. If the corporation or the Soliciting
Stockholder issue written notice of an intention to challenge the
Consent Inspectors' preliminary report within 48 hours after its
issuance, a challenge session shall be scheduled by the Consent
Inspectors as promptly as practicable. A transcript of the challenge
session shall be recorded by a certified court reporter or other person
agreed upon by the corporation and the Soliciting Stockholder. Following
the completion of the challenge session, the Consent Inspectors shall as
promptly as practicable issue their final report to the corporation and
the Soliciting Stockholder, which report shall contain (i) the
information included in the most recent preliminary report, (ii) all
changes in the vote totals as a result of the challenge session, and
(iii) based thereon, a certification as to whether the requisite number
of valid and unrevoked Stockholder Consents has been obtained to
authorize or take the action(s) specified therein. A copy of any final
report of the Consent Inspectors shall be included in the minute books
of the corporation.
SECTION 13B. Notice of and Record Date for Stockholder Consents;
Solicitation Period.
Before there may be commenced any solicitation of Stockholder Consents
by any Soliciting Stockholder, such Soliciting Stockholder (or an authorized
agent thereof) shall deliver notice in writing of its intention to do so to the
Secretary, which notice shall also set forth: (i) the name(s) and address(es) of
such Soliciting Stockholder, (ii) the specific text of the Stockholder Consents
proposed to be disseminated or published, (iii) the proposed date or dates on
which such Soliciting Stockholder intends to solicit such Stockholder Consents
and/or deliver Stockholder Consents to the corporation, and (iv) a
representation that each such Soliciting Stockholder is a stockholder of the
corporation entitled to execute and deliver Stockholder Consents as of the date
of such notice and stating the number of shares of stock of the corporation
owned of record and beneficially by each such Soliciting Stockholder as of such
date. Within five (5) business days after the receipt by the corporation of such
a notice, the Board of Directors may, but shall not be required to: (A) subject
to Section 213(b) of the Delaware General Corporation Law, establish a record
date to determine the stockholders entitled to execute (and revoke) such
Stockholder Consents, and (B) in such event, establish the time period during
which such Stockholder Consents (and revocations thereof) may be solicited. No
Stockholder Consent shall be valid beyond the earlier to expire of (x) such
solicitation period so established (if any) or (y) 60 days after the date of the
earliest Stockholder Consent delivered to the corporation in the manner provided
in Section 228(c) of the Delaware General Corporation Law.
SECTION 14. Organization.
At every meeting of stockholders, the Chairman of the Board of
Directors, or, if a Chairman has not been appointed or is absent, the President,
or, if the President is absent, the most senior Vice President present, or in
the absence of any such officer, a chairman of the meeting chosen by a majority
in interest of the stockholders entitled to vote, present in
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person or by proxy, shall act as chairman. The Secretary, or, in his absence, an
Assistant Secretary directed to do so by the President, shall act as secretary
of the meeting.
SECTION 14A. Nominations for Directors.
Nominations of nominees for election to the Board of Directors at a
meeting of the stockholders may be made (i) by the Board of Directors, (ii) on
behalf of the Board of Directors by any nominating or other authorized committee
appointed by the Board of Directors, (iii) by the Chairman of such meeting or
(iv) subject to the provisions of this Section 14A, at a meeting of stockholders
being held for that purpose by any stockholder of the corporation entitled to
vote for the election of directors at such meeting. Such nominations, other than
those made by or on behalf of the Board or by the Chairman of the meeting, shall
be made by notice in writing delivered to the Secretary, and received by him not
less than thirty nor more than sixty days prior to the meeting of the
stockholders called for the election of directors; provided, however, that if
less than thirty-five days' notice of the meeting is given to stockholders, such
nomination shall be delivered as prescribed hereinabove to the Secretary not
later than the close of business on the seventh day following the day on which
the notice of meeting was mailed. Each such notice shall set forth or include:
(i) the name, age, business address and, if known, the residence address of each
nominee proposed in such notice; (ii) the principal occupation or employment of
each such nominee; (iii) the number of shares of stock of the corporation which
are held of record and beneficially by each such nominee and nominating
stockholder; (iv) a representation and undertaking of such nominating
stockholder that it is, and at the meeting will be, entitled to vote for the
election of directors and that such stockholder intends to appear (in person or
by proxy) at such meeting to nominate each such nominee; (v) the written consent
of each such nominee to serve as a director of the corporation if elected; and
(vi) any information not required pursuant to any of the foregoing clauses
concerning the nominee or nominating stockholder that would be required to be
disclosed pursuant to Regulation 14A and/or Schedule 14A under the Securities
Exchange Act of 1934, as amended, assuming for this purpose that such nominee or
nominating stockholder was soliciting proxies for the election of each such
nominee at a meeting of the stockholders of the corporation. If the facts
warrant and the Board of Directors or an authorized committee thereof or the
Chairman of the meeting determines that a nomination was not made in accordance
with the foregoing procedures, the nomination shall be void and not allowed.
SECTION 14B. Business at Stockholder Meetings.
The business and proposals to be considered or voted upon at a meeting
of the stockholders may be offered (i) by the Board of Directors, (ii) on behalf
of the Board of Directors by any authorized committee appointed by the Board of
Directors, (iii) by the Chairman of the meeting or (iv) subject to the
provisions of this Section 14B, at such meeting by any stockholder of the
corporation entitled to vote on such proposals at such meeting. Such business
and proposals, other than those offered by or on behalf of the Board or by the
Chairman of the meeting, shall be made by notice in writing delivered to the
Secretary, and received by him not less than thirty nor more than sixty days
prior to the meeting of the stockholders; provided, however, that if less than
thirty-five days' notice of the meeting is given to stockholders, notice of such
business and/or proposal shall be delivered as prescribed hereinabove to the
Secretary not later than the close of business on the seventh day following the
day on which the notice of meeting was mailed; and provided
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further, however, that such notice shall not be required with respect to any
stockholder proposal that is included in the Corporation's proxy materials in
accordance with Regulation 14A under the Securities Exchange Act of 1934, as
amended. Each such notice shall set forth or include: (i) the general nature of
each item of business that the proposing stockholder intends to bring before the
meeting; (ii) if any specific proposal is to be offered for a vote of the
stockholders, the text of the resolution or resolutions which the proposing
stockholder contemplates to offer to be voted upon; (iii) the number of shares
of stock of the corporation which are held of record and beneficially by such
proposing stockholder; (iv) a representation and undertaking of such proposing
stockholder that it is, and at the meeting will be, entitled to vote on such
proposals and that such stockholder intends to appear (in person or by proxy) at
such meeting to offer each such item of business and each such proposal; and (v)
any information not required pursuant to any of the foregoing clauses concerning
each such item of business and each such proposal that would be required to be
disclosed pursuant to Regulation 14A and/or Schedule 14A under the Securities
Exchange Act of 1934, as amended, assuming for this purpose that such proposing
stockholder was soliciting proxies for the adoption of such proposals at a
meeting of the stockholders of the corporation. If the facts warrant and the
Board of Directors or an authorized committee thereof or the Chairman of the
meeting determines that a proposal was not made in accordance with the foregoing
procedures, the proposal shall be void and not allowed.
ARTICLE IV
DIRECTORS
SECTION 15. Number and Term of Office.
The authorized number of directors of the corporation shall be fixed
from time to time by the Board of Directors either by a resolution or an
amendment to these Bylaws duly adopted by the Board of Directors. The number of
Directors presently authorized is seven (7). Except as provided in Section 17,
the Directors shall be elected by the stockholders at their annual meeting in
each year and shall hold office until the next annual meeting and until their
successors shall be duly elected and qualified. Directors need not be
stockholders unless so required by the Certificate of Incorporation. If for any
cause, the Directors shall not have been elected at an annual meeting, they may
be elected as soon thereafter as convenient at a special meeting of the
stockholders called for that purpose in the manner provided in these Bylaws.
SECTION 16. Powers.
The powers of the corporation shall be exercised, its business conducted
and its property controlled by the Board of Directors, except as may be
otherwise provided by statute or by the Certificate of Incorporation.
SECTION 17. Vacancies.
Unless otherwise provided in the Certificate of Incorporation, vacancies
and newly created directorships resulting from any increase in the authorized
number of Directors may be filled by a majority of the Directors then in office,
although less than a quorum, or by a sole remaining Director, and each Director
so elected shall hold office for the unexpired portion of the term of the
Director whose place shall be vacant and until his successor shall
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have been duly elected and qualified. A vacancy in the Board of Directors shall
be deemed to exist under this Section 17 in the case of the death, removal or
resignation of any Director, or if the stockholders fail at any meeting of
stockholders at which Directors are to be elected (including any meeting
referred to in Section 19 below) to elect the number of Directors then
constituting the whole Board of Directors.
SECTION 18. Resignation.
Any Director may resign at any time by delivering his written
resignation to the Secretary, such resignation to specify whether it will be
effective at a particular time, upon receipt by the Secretary or at the pleasure
of the Board of Directors. If no such specification is made, it shall be deemed
effective at the pleasure of the Board of Directors. When one or more Directors
shall resign from the Board of Directors, effective at a future date, a majority
of the Directors then in the office, including those who have so resigned, shall
have power to fill such vacancy or vacancies, the vote thereon to take effect
when such resignation or resignations shall become effective, and each Director
so chosen shall hold office for the unexpired portion of the term of the
Director whose place shall be vacated and until his successor shall have been
duly elected and qualified.
SECTION 19. Removal.
At a special meeting of stockholders called for the purpose in the
manner hereinabove provided, the Board of Directors, or any individual Director,
may be removed from office, with or without cause, and a new Director or
Directors elected by a vote of stockholders holding a majority of the
outstanding shares entitled to vote at an election of Directors; provided,
however, that if less than the entire Board of Directors is to be removed, no
Director may be removed without cause if the votes cast against his removal
would be sufficient to elect him if then cumulatively voted at an election of
the entire Board of Directors.
SECTION 20. Meetings.
(a) Annual Meetings. The annual meeting of the Board of Directors
shall be held immediately after the annual meeting of stockholders and
at the place where such meeting is held. No notice of an annual meeting
of the Board of Directors shall be necessary and such meeting shall be
held for the purpose of electing officers and transacting such other
business as may lawfully come before it.
(b) Regular Meetings. Except as hereinafter otherwise provided,
regular meetings of the Board of Directors shall be held in the office
of the corporation required to be maintained pursuant to Section 2
hereof. Unless otherwise restricted by the Certificate of Incorporation,
regular meetings of the Board of Directors may also be held at any place
within or without the State of Delaware which has been designated by
resolution of the Board of Directors or the written consent of all
Directors.
(c) Special Meetings. Unless otherwise restricted by the
Certificate of Incorporation, special meetings of the Board of Directors
may be held at any time
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and place within or without the State of Delaware whenever called by the
President or a majority of the Directors.
(d) Telephone Meetings. Any member of the Board of Directors, or
of any committee thereof, may participate in a meeting by means of
conference telephone or similar communications equipment by means of
which all persons participating in the meeting can hear each other, and
participation in a meeting by such means shall constitute presence in
person at such meeting.
(e) Notice of Meetings. Written notice of the time and place of
all regular and special meetings of the Board of Directors shall be
given at least one (1) day before the date of the meeting. Notice of any
meeting may be waived in writing at any time before or after the meeting
and will be waived by any Director by attendance thereat, except when
the Director attends the 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.
(f) Waiver of Notice. The transaction of all business at any
meeting of the Board of Directors, or any committee thereof, however
called or noticed, or wherever held, shall be as valid as though had at
a meeting duly held after regular call and notice, if a quorum be
present and if, either before or after the meeting, each of the
Directors not present shall sign a written waiver of notice, or a
consent to holding such meeting, or an approval of the minutes thereof.
All such waivers, consents or approvals shall be filed with the
corporate records or made a part of the minutes of the meeting.
SECTION 21. Quorum and Voting.
(a) Quorum. Unless the Certificate of Incorporation requires a
greater number, a quorum of the Board of Directors shall consist of a
majority of the exact number of Directors fixed from time to time in
accordance with Section 15 of these Bylaws, but not less than one (1);
provided, however, at any meeting whether a quorum be present or
otherwise, a majority of the Directors present may adjourn from time to
time until the time fixed for the next regular meeting of the Board of
Directors, without notice other than by announcement at the meeting.
(b) Majority Vote. At each meeting of the Board of Directors at
which a quorum is present all questions and business shall be determined
by a vote of a majority of the Directors present, unless a different
vote be required by law, the Certificate of Incorporation or these
Bylaws.
SECTION 22. Action without Meeting.
Unless otherwise restricted by the Certificate of Incorporation or these
Bylaws, any action required or permitted to be taken at any meeting of the Board
of Directors or of any committee thereof may be taken without a meeting, if all
members of the Board of Directors or committee, as the case may be, consent
thereto in writing, and such writing or writings are filed with the minutes of
proceedings of the Board of Directors or committee.
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SECTION 23. Fees and Compensation.
Directors shall not receive any stated salary for their services as
Directors, but by resolution of the Board of Directors a fixed fee, with or
without expense of attendance, may be allowed for attendance at each meeting and
at each meeting of any committee of the Board of Directors. Nothing herein
contained shall be construed to preclude any Director from serving the
corporation in any other capacity as an officer, agent, employee, or otherwise
and receiving compensation therefor.
SECTION 24. Committees.
(a) Executive Committee. The Board of Directors may by resolution
passed by a majority of the whole Board of Directors, appoint an
Executive Committee to consist of one (1) or more members of the Board
of Directors. The Executive Committee, to the extent permitted by law
and specifically granted by the Board of Directors, shall have and may
exercise when the Board of Directors is not in session all powers of the
Board of Directors in the management of the business and affairs of the
corporation, including, without limitation, the power and authority to
declare a dividend or to authorize the issuance of stock, except such
committee shall not have the power or authority to amend the Certificate
of Incorporation, to adopt an agreement of merger or consolidation, to
recommend to the stockholders the sale, lease or exchange of all or
substantially all of the corporation's property and assets, to recommend
to the stockholders of the corporation a dissolution of the corporation
or a revocation of a dissolution or to amend these Bylaws.
(b) Other Committees. The Board of Directors may, by resolution
passed by a majority of the whole Board of Directors, from time to time
appoint such other committees as may be permitted by law. Such other
committees appointed by the Board of Directors shall consist of one (1)
or more members of the Board of Directors, and shall have such powers
and perform such duties as may be prescribed by the resolution or
resolutions creating such committees, but in no event shall such
committee have the powers denied to the Executive Committee in these
Bylaws.
(c) Term. The members of all committees of the Board of Directors
shall serve a term coexistent with that of the Board of Directors which
shall have appointed such committee. The Board of Directors, subject to
the provisions of subsections (a) or (b) of this Section 24, may at any
time increase or decrease the number of members of a committee or
terminate the existence of a committee. The membership of a committee
member shall terminate on the date of his death or voluntary
resignation. The Board of Directors may at any time for any reason
remove any individual committee member and the Board of Directors may
fill any committee vacancy created by death, resignation, removal or
increase in the number of members of the committee. The Board of
Directors may designate one or more Directors as alternate members of
any committee, who may replace any absent or disqualified member at any
meeting of the committee, and, in addition, in the absence or
disqualification of any member of a committee, the member or members
thereof present at any meeting and not disqualified from voting, whether
or not he or they constitute a quorum, may unanimously appoint another
member of the Board
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or Directors to act at the meeting in the place of any such absent or
disqualified member.
(d) Meetings. Unless the Board of Directors shall otherwise
provide, regular meetings of the Executive Committee or any other
committee appointed pursuant to this Section 24 shall be held at such
times and places as are determined by the Board of Directors, or by any
such committee, and when notice thereof has been given to each member of
such committee, no further notice of such regular meetings need be given
thereafter. Special meetings of any such committee may be held at the
principal office of the corporation required to be maintained pursuant
to Section 2 hereof, or at any place which has been designated from time
to time by resolution of such committee or by written consent of all
members thereof, and may be called by any Director who is a member of
such committee, upon written notice to the members of such committee of
the time and place of such special meeting given in the manner provided
for the giving of written notice to members of the Board of Directors of
the time and place of special meetings of the Board of Directors. Notice
of any special meeting of any committee may be waived in writing at any
time before or after the meeting and will be waived by any Director by
attendance thereat, except when the Director attends such special
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. A majority of the authorized number of
members of any such committee shall constitute a quorum for the
transaction of business, and the act of a majority of those present at
any meeting at which a quorum is present shall be the act of such
committee.
SECTION 25. Organization.
At every meeting of the Directors, the Chairman of the Board of
Directors, or, if a Chairman has not been appointed or is absent, the President,
or if the President is absent, the most senior Vice President, or, in the
absence of any such officer, a chairman of the meeting chosen by a majority of
the Directors present, shall preside over the meeting. The Secretary, or in his
absence, an Assistant Secretary directed to do so by the President, shall act as
secretary of the meeting.
ARTICLE V
OFFICERS
SECTION 26. Officers Designated.
The officers of the corporation shall be the Chairman of the Board of
Directors, the President, one or more Vice Presidents, the Secretary and the
Treasurer, all of whom shall be elected at the annual meeting of the Board of
Directors. The order of the seniority of the Vice Presidents shall be in the
order of their nomination, unless otherwise determined by the Board of
Directors. The Board of Directors may also appoint one or more Assistant
Secretaries, Assistant Treasurers, and such other officers and agents with such
powers and duties as it shall deem necessary. The Board of Directors may assign
such additional titles to one or more of the officers as it shall deem
appropriate. Any one person may hold any number of offices of the corporation at
any one time unless specifically prohibited therefrom
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by law. The salaries and other compensation of the officers of the corporation
shall be fixed by or in the manner designated by the Board of Directors.
SECTION 27. Tenure and Duties of Officers.
(a) General. All officers shall hold office at the pleasure of
the Board of Directors and until their successors shall have been duly
elected and qualified, unless sooner removed. Any officer elected or
appointed by the Board of Directors may be removed at any time by the
Board of Directors. If the office of any officer becomes vacant for any
reason, the vacancy may be filled by the Board of Directors.
(b) Duties of Chairman of the Board of Directors. The Chairman of
the Board of Directors, when present, shall preside at all meetings of
the shareholders and the Board of Directors. The Chairman of the Board
of Directors shall perform other duties commonly incident to his office
and shall also perform such other duties and have such other powers as
the Board of Directors shall designate from time to time.
(c) Duties of President. The President shall preside at all
meetings of the shareholders and at all meetings of the Board of
Directors, unless the Chairman of the Board of Directors has been
appointed and is present. The President shall be the chief executive
officer of the corporation and shall, subject to the control of the
Board of Directors, have general supervision, direction and control of
the business and officers of the corporation. The President shall
perform other duties commonly incident to his office and shall also
perform such other duties and have such other powers as the Board of
Directors shall designate from time to time.
(d) Duties of Vice Presidents. The Vice Presidents, in the order
of their seniority, may assume and perform the duties of the President
in the absence or disability of the President or whenever the office of
President is vacant. The Vice Presidents shall perform other duties
commonly incident of their office and shall also perform such other
duties and have such other powers as the Board of Directors or the
President shall designate from time to time.
(e) Duties of Secretary. The Secretary shall attend all meetings
of the stockholders and of the Board of Directors, and shall record acts
and proceedings thereof in the minute book of the corporation. The
Secretary shall give notice in conformity with these Bylaws of all
meetings of the stockholders, and of all meetings of the Board of
Directors and any committee thereof requiring notice. The Secretary
shall perform all other duties given him in these Bylaws and other
duties commonly incident to his office and shall also perform such other
duties and have such other powers as the Board of Directors shall
designate from time to time. The President may direct any Assistant
Secretary to assume and perform the duties of the Secretary in the
absence or disability of the Secretary, and each Assistant Secretary
shall perform other duties commonly incident to his office and shall
also perform such other duties and have such other powers as the Board
of Directors or the President shall designate from time to time.
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(f) Duties of Treasurer. The Treasurer shall keep or cause to be
kept the books of account of the corporation in a thorough and proper
manner, and shall render statements of the financial affairs of the
corporation in such form and as often as required by the Board of
Directors or the President. The Treasurer, subject to the order of the
Board of Directors, shall have the custody of all funds and securities
of the corporation. The Treasurer shall perform other duties commonly
incident to his office and shall also perform such other duties and have
such other powers as the Board of Directors or the President shall
designate from time to time. The President may direct any Assistant
Treasurer to assume and perform the duties of the Treasurer in the
absence or disability of the Treasurer, and each Assistant Treasurer
shall perform other duties commonly incident to his office and shall
also perform such other duties and have such other powers as the Board
of Directors or the President shall designate from time to time.
SECTION 28. Resignations.
Any officer may resign at any time by giving written notice to the Board
of Directors or to the President or to the Secretary. Any such resignation shall
be effective when received by the person or persons to whom such notice is
given, unless a later time is specified therein, in which event the resignation
shall become effective at such later time. Unless otherwise specified in such
notice, the acceptance of any such resignation shall not be necessary to make it
effective.
SECTION 29. Removal.
Any officer may be removed from office at any time, either with or
without cause, by the vote or written consent of a majority of the Directors in
office at the time, or by any committee or superior officers upon whom such
power of removal may have been conferred by the Board of Directors.
ARTICLE VI
EXECUTION OF CORPORATE INSTRUMENTS AND OF VOTING SECURITIES
OWNED BY THE CORPORATION
SECTION 30. Execution of Corporate Instruments.
The Board of Directors may, in its discretion, determine the method and
designate the signatory officer or officers, or other person or persons, to
execute on behalf of the corporation any corporate instrument or document, or to
sign on behalf of the corporation the corporate name without limitation, or to
enter into contracts on behalf of the corporation, except where otherwise
provided by law or these Bylaws, and such execution or signature shall be
binding upon the corporation.
Unless otherwise specifically determined by the Board of Directors or
otherwise required by law, promissory notes, deeds of trust, mortgages and other
evidences of indebtedness of the corporation, and other corporate instruments or
documents requiring the corporate seal, and certificates of shares of stock
owned by the corporation, shall be executed, signed or endorsed by the Chairman
of the Board of Directors, or the President or any Vice President, and by the
Secretary or Treasurer or any Assistant Secretary or
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Assistant Treasurer. All other instruments and documents requiring the corporate
signature, but not requiring the corporate seal, may be executed as aforesaid or
in such other manner as may be directed by the Board of Directors.
All checks and drafts drawn on banks or other depositaries on funds to
the credit of the corporation or in special accounts of the corporation shall be
signed by such person or persons as the Board of Directors shall authorize so to
do.
SECTION 31. Voting of Securities Owned by the Corporation.
All stock and other securities of other corporations owned or held by
the corporation for itself, or for other parties in any capacity, shall be
voted, and all proxies with respect thereto shall be executed, by the person
authorized so to do by resolution of the Board of Directors, or, in the absence
of such authorization, by the Chairman of the Board of Directors, the President,
or any Vice President.
ARTICLE VII
SHARES OF STOCK
SECTION 32. Form and Execution of Certificates.
Certificates for the shares of stock of the corporation shall be in such
form as is consistent with the Certificate of Incorporation and applicable law.
Every holder of stock in the corporation shall be entitled to have a certificate
signed by or in the name of the corporation by the Chairman of the Board of
Directors, or the President or any Vice President and by the Treasurer or
Assistant Treasurer or the Secretary or Assistant Secretary, certifying the
number of shares owned by him in the corporation. Where such certificate is
countersigned by a transfer agent other than the corporation or its employee, or
by a registrar other than the corporation or its employee, any other signature
on the certificate may be a facsimile. In case any officer, transfer agent, or
registrar who has signed or whose facsimile signature has been placed upon a
certificate shall have ceased to be such officer, transfer agent, or registrar
before such certificate is issued, it may be issued with the same effect as if
he were such officer, transfer agent, or registrar at the date of issue.
SECTION 33. Lost Certificates.
A new certificate or certificates shall be issued in place of any
certificate or certificates theretofore issued by the corporation alleged to
have been lost, stolen, or destroyed, upon the making of an affidavit of that
fact by the person claiming the certificate of stock to be lost, stolen or
destroyed. The corporation may require, as a condition precedent to the issuance
of a new certificate or certificates, the owner of such lost, stolen, or
destroyed certificate or certificates, or his legal representative, to advertise
the same in such manner as it shall require or to give the corporation a surety
bond in such form and amount as it may direct as indemnity against any claim
that may be made against the corporation with respect to the certificate alleged
to have been lost, stolen, or destroyed.
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SECTION 34. Transfers.
Transfers of record of shares of stock of the corporation shall be made
only upon its books by the holders thereof, in person or by attorney duly
authorized, and upon the surrender of a properly endorsed certificate or
certificates for a like number of shares.
SECTION 35. Fixing Record Dates.
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 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 of Directors 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) days prior to any other action. If no record
date is fixed: (a) 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; (b) the record date for determining stockholders
entitled to express consent to corporate action in writing without a meeting,
when no prior action by the Board of Directors is necessary, shall be the day on
which the first written consent is expressed; and (c) the record date for
determining stockholders for any other purpose shall be at the close of business
on the day on which the Board of Directors adopts the resolution relating
thereto. A determination of stockholders of record entitled to notice of or to
vote at a meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the Board of Directors may fix a new record date for the
adjourned meeting.
SECTION 36. Registered Stockholders.
The corporation shall be entitled to recognize the exclusive right of a
person registered on its books as the owner of shares to receive dividends, and
to vote as such owner, and shall not be bound to recognize any equitable or
other claim to or interest in such share or shares on the part of any other
person whether or not it shall have express or other notice thereof, except as
otherwise provided by the laws of Delaware.
ARTICLE VIII
OTHER SECURITIES OF THE CORPORATION
SECTION 37. Execution of Other Securities.
All bonds, debentures and other corporate securities of the corporation,
other than stock certificates, may be signed by the Chairman of the Board of
Directors, the President or any Vice President, or such other person as may be
authorized by the Board of Directors, and the corporate seal impressed thereon
or a facsimile of such seal imprinted thereon and attested by the signature of
the Secretary or an Assistant Secretary, or the Treasurer or an Assistant
Treasurer; provided, however, that where any such bond, debenture or other
corporate security shall be authenticated by the manual signature of a trustee
under an indenture pursuant to which such bond, debenture or other corporate
security shall be
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issued, the signatures of the persons signing and attesting the corporate seal
on such bond, debenture or other corporate security may be the imprinted
facsimile of the signatures of such persons. Interest coupons appertaining to
any such bond, debenture or other corporate security, authenticated by a trustee
as aforesaid, shall be signed by the Treasurer or an Assistant Treasurer of the
corporation or such other person as may be authorized by the Board of Directors,
or bear imprinted thereon the facsimile signature of such person. In case any
officer who shall have signed or attested any bond, debenture or other corporate
security, or whose facsimile signature shall appear thereon or on any such
interest coupon, shall have ceased to be such officer before the bond, debenture
or other corporate security so signed or attested shall have been delivered,
such bond, debenture or other corporate security nevertheless may be adopted by
the corporation and issued and delivered as though the person who signed the
same or whose facsimile signature shall have been used thereon had not ceased to
be such officer of the corporation.
ARTICLE IX
DIVIDENDS
SECTION 38. Declaration of Dividends.
Dividends upon the capital stock of the corporation, subject to the
provisions of the Certificate of Incorporation, if any, may be declared by the
Board of Directors pursuant to law at any regular or special meeting. Dividends
may be paid in cash, in property, or in shares of the capital stock, subject to
the provisions of the Certificate of Incorporation.
SECTION 39. Dividend Reserve.
Before payment of any dividend, there may be set aside out of any funds
of the corporation available for dividends such sum or sums as the Board of
Directors from time to time, in their absolute discretion, think proper as a
reserve or reserves to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the corporation, or for such other
purpose as the Board of Directors shall think conducive to the interests of the
corporation, and the Board of Directors may modify or abolish any such reserve
in the manner in which it was created.
ARTICLE X
FISCAL YEAR
SECTION 40. Fiscal Year.
Unless otherwise fixed by resolution of the Board of Directors, the
fiscal year of the corporation shall end on the Sunday closest to the last day
of the month of December of each year.
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ARTICLE XI
INDEMNIFICATION OF OFFICERS, DIRECTORS, EMPLOYEES AND OTHER AGENTS
SECTION 41. Indemnification of Officers, Directors, Employees and Other
Agents.
(a) Officers and Directors. The corporation shall indemnify its
officers and Directors to the fullest extent permitted by the Delaware
General Corporation Law; provided, however, that in the event such law
is amended after the effective date of the most recent amendments to
this Article XI (being May 22, 1997) to provide narrower rights to
indemnification than are then available hereunder, such amendment shall
not apply to alleged actions or omissions which precede the effective
date of such amendment.
(b) Employees and Other Agents. The corporation shall have the
power to indemnify its employees and other agents to the fullest extent
permitted by the Delaware General Corporation Law.
(c) Good Faith.
(1) For purposes of any determination under this Bylaw, an
officer or Director shall be deemed to have 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, to have had no reasonable cause to
believe that his conduct was unlawful, if his action is based on
the records or books of account of the corporation or another
enterprise, or on information supplied to him by the officers of
the corporation or another enterprise in the course of their
duties, or on the advice of legal counsel for the corporation or
another enterprise or on information or records given or reports
made to the corporation or another enterprise by an independent
certified public accountant or by an appraiser or other expert
selected with reasonable care by the corporation or another
enterprise.
(2) The termination of any 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 proceeding,
that he had reasonable cause to believe that his conduct was
unlawful.
(3) The provisions of this paragraph (c) shall not be
deemed to be exclusive or to limit in any way the circumstances
in which a person may be deemed to have met the applicable
standard of conduct set forth by the Delaware General Corporation
Law.
(d) Expenses. The corporation shall advance, prior to the final
disposition of any proceeding, promptly following request therefor, all
expenses incurred by any officer or Director in connection with such
proceeding.
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(e) Enforcement. Without the necessity of entering into an
express contract, all rights to indemnification and advances under this
Bylaw shall be deemed to be contractual rights and be effective to the
same extent and as if provided for in a contract between the corporation
and the officer or Director who serves in such capacity at any time
while this Bylaw and other relevant provisions of the Delaware General
Corporation Law and other applicable law, if any, are in effect. Any
right to indemnification or advances granted by this Bylaw to a officer
or Director shall be enforceable by or on behalf of the person holding
such right in any court of competent jurisdiction if (i) the claim for
indemnification or advances is denied, in whole or in part, or (ii) no
disposition of such claim is made within ninety (90) days of request
therefor. The claimant in such enforcement action, if successful in
whole or in part, shall be entitled to be paid also the expense of
prosecuting his claim. 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 proceeding in advance of its final disposition to
which the claimant is entitled (hereunder or otherwise)) that the
claimant has not met the standards of conduct which make it permissible
under the Delaware General Corporation Law for the corporation to
indemnify the claimant for the amount claimed. Neither the failure of
the corporation (including its Board of Directors, independent legal
counsel or its stockholders) to have made a determination prior to the
commencement of such action that indemnification of the claimant is
proper in the circumstances because he has met the applicable standard
of conduct set forth in the Delaware General Corporation Law, nor an
actual determination by the corporation (including its Board of
Directors, independent legal counsel or its stockholders) that the
claimant has not met such applicable standard of conduct, shall be a
defense to the action or create a presumption that claimant has not met
the applicable standard of conduct.
(f) Non-Exclusivity of Rights. The rights conferred on any person
by this Bylaw shall not be exclusive of any other right which such
person may have or hereafter acquire under any statute, provision of the
Certificate of the Incorporation, bylaws, 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 office. the corporation is specifically authorized to enter into
individual contracts with any or all of its Directors, officer,
employees or agents respecting indemnification and advances to the
fullest extent permitted by the Delaware General Corporation Law.
(g) Survival of Rights. The rights conferred on any person by
this Bylaw shall continue as to a person who has ceased to be a
Director, officer, employee or other agent and shall inure to the
benefit of the heirs, executors and administrative of such a person.
(h) Insurance. To the fullest extent permitted by the Delaware
General Corporation Law, the corporation, upon approval by the Board of
Directors, may purchase insurance on behalf of any person required or
permitted to be indemnified pursuant to this Bylaw.
(i) Amendments. Any repeal or modification of this Bylaw shall
only be prospective and shall not effect the rights under this Bylaw in
effect at the time of the
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alleged occurrence of any action or omission to act that is the cause of
any proceeding against any agent of the corporation.
(j) Savings Clause. If this Bylaw or any portion hereof shall be
invalidated on any ground by any court of competent jurisdiction, then
the corporation shall nevertheless indemnify each agent to the full
extent permitted by any applicable
portion of this Bylaw that shall not have been invalidated, or by any
other applicable law.
(k) Certain Definitions. For the purposes of this Bylaw, the
following definitions shall apply:
(1) The term "proceeding" shall be broadly construed and
shall include, without limitation, the investigation,
preparation, prosecution, defense, settlement and appeal of any
threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative.
(2) The term "expenses" shall be broadly construed and
shall include, without limitation, court costs, attorneys' fees,
witness fees, fines, amounts paid in settlement or judgment and
any other costs and expenses of any nature or kind incurred in
connection with any proceeding.
(3) The term "the corporation" shall include, in addition
of the resulting corporation, any constituent corporation
(including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had
continued, would have had power and authority to indemnify its
directors, officers, and employees or agents, so that any person
who is or was a director, officer, employee or agent of such
constituent corporation, or is or was serving at the request of
such constituent corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust
or other enterprise, shall stand in the same position under the
provisions of this Bylaw with respect to the resulting or
surviving corporation as he would have with respect to such
constituent corporation if its separate existence had continued.
(4) References to a "director," "officer," "employee", or
"agent" of the corporation shall include, without limitation,
situations where such person is serving at the request of the
corporation as a director, officer, employee, trustee or agent of
another corporation, partnership, joint venture, trust or other
enterprise.
(5) References to "other enterprises" shall include
employee benefit plans; references to "fines" shall include any
excise taxes assessed on a person with respect of an employee
benefit plan; and references to "serving at the request of the
corporation" shall include any services as a director, officer,
employee or agent of the corporation 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 a person who acted in good faith and in a
manner he reasonably believed to be in the
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interest of the participants and beneficiaries of an employee
benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the corporation" as referred to
in this Bylaw.
ARTICLE XII
NOTICES
SECTION 42. Notices.
(a) Notice to Stockholders. Whenever, under any provisions of
these Bylaws, notice is required to be given to any stockholder, it
shall be given in writing, timely and duly deposited in the United
States mail, postage prepaid, and addressed to his last known post
office address as shown by the stock record of the corporation or its
transfer agent.
(b) Notice to Directors. Any notice required to be given to any
Director may be given by the method stated in subsection (a), or by
telegram, except that such notice other than one which is delivered
personally shall be sent to such address as such Director shall have
filed in writing with the Secretary, or, in the absence of such filing,
to the last known post office address of such Director.
(c) Address Unknown. If no address of a stockholder or Director
be known, notice may be sent to the office of the corporation required
to be maintained pursuant to Section 2 hereof.
(d) Affidavit of Mailing. An affidavit of mailing, executed by a
duly authorized and competent employee of the corporation or its
transfer agent appointed with respect to the class of stock affected,
specifying the name and address or the names and addresses of the
stockholder or stockholders, or Director or Directors, to whom any such
notice or notices was or were given, and the time and method of giving
the same, shall be conclusive evidence of the statements therein
contained.
(e) Time Notices Deemed Given. All notices given by mail, as
above provided, shall be deemed to have been given as at the time of
mailing and all notices given by telegram shall be deemed to have been
given as at the sending time recorded by the telegraph company
transmitting the notices.
(f) Methods of Notice. It shall not be necessary that the same
method of giving notice be employed in respect of all Directors, but one
permissible method may be employed in respect of any one or more, and
any other permissible method or methods may be employed in respect of
any other or others.
(g) Failure to Receive Notices. The period of limitation of time
within which any stockholder may exercise any option or right, or enjoy
any privilege or benefit, or be required to act, or within which any
Director may exercise any power or right, or enjoy any privilege,
pursuant to any notice sent him in the manner above provided, shall not
be affected or extended in any manner by the failure of such stockholder
or such Director to receive such notice.
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(h) Notice to Person with Whom Communication is Unlawful.
Whenever notice is required to be given, under any provision of law or
of the Certificate of Incorporation or Bylaws of the corporation, to any
person with whom communication is unlawful, the giving of such notice to
such person shall not be required and there shall be no duty to apply to
any governmental authority or agency for a license or permit to give
such notice to such person. Any action or meeting which shall be taken
or held without notice to any such person with whom communication is
unlawful shall have the same force and effect as if such notice had been
duly given. In the event that the action taken by the corporation is
such as to require the filing of a certificate under any provision of
the Delaware General Corporation Law, the certificate shall state, if
such is the fact and if notice is required, that notice was given to all
persons entitled to receive notice except such persons with whom
communication is unlawful.
ARTICLE XIII
AMENDMENTS
SECTION 43. Amendments.
These Bylaws may be repealed, altered or amended or new Bylaws adopted
by the stockholders. The Board of Directors shall also have the authority, if
such authority is conferred upon the Board of Directors by the Certificate of
Incorporation, to repeal, alter or amend these Bylaws or adopt new Bylaws
(including, without limitation, the amendment of any Bylaw setting forth the
number of Directors who shall constitute the whole Board of Directors) subject
to the power of the stockholders to change or repeal such Bylaws and provided
that the Board of Directors shall not make or alter any Bylaws fixing the
qualifications, classifications, term of office or compensation of Directors.
ARTICLE XIV
LOANS OF OFFICERS AND OTHERS
SECTION 44. Certain Corporate Loans and Guaranties.
If the corporation has outstanding shares held of record by 100 or more
persons on the date of approval by the Board of Directors, the corporation may
make loans of money or property to, or guarantee the obligations of, any officer
of the corporation or its parent or any subsidiary, whether or not a director of
the corporation or its parent or any subsidiary, or adopt an employee benefit
plan or plans authorizing such loans or guaranties, upon the approval of the
Board of Directors alone, by a vote sufficient without counting the vote of any
interested director or directors, if the Board of Directors determines that such
a loan or guaranty or plan may reasonably be expected to benefit the
corporation.
ARTICLE XV
TRANSFER RESTRICTIONS
SECTION 45. Certain Definitions.
As used in this Article XV, the following terms have the following
respective meanings.
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"Corporation Securities" means: (i) shares of common stock of the
corporation, (ii) shares of preferred stock of the Corporation, (iii) warrants,
rights or options (within the meaning of Treasury Regulation
ss.1.382-2T(h)(4)(v)) to purchase stock of the corporation, and (iv) any other
interests that would be treated as "stock" of the corporation pursuant to
Treasury Regulations ss.1.382-2T(f)(18).
"Percentage Stock Ownership" means percentage stock ownership as
determined in accordance with Treasury Regulations ss.1.382-2T(g), (h), (j), and
(k).
"Five-Percent Stockholder" means a Person or group of Persons
that is identified as a "5-percent shareholder" of the corporation pursuant to
Treasury Regulations ss.1.382- 2T(g)(1).
"Person" means an individual, corporation, estate, trust,
association, company, limited liability company, partnership, limited liability
partnership, joint venture or other organization.
"Prohibited Transfer" means any purported Transfer of Corporation
Securities to the extent that such Transfer is prohibited and void under this
Article XV.
"Restriction Release Date" means the earliest of: (i) December
31, 2005, (ii) the effective date of repeal of Section 382 and Section 383 of
the Internal Revenue Code of 1986, as amended (the "Code") (and any comparable
successor provision) ("Section 382" and "Section 383"); (iii) the beginning of a
taxable year of the corporation (or any successor thereof) to which no Tax
Benefits may be carried forward; and (iv) the effective date of any express
general repeal or other general discontinuance of the effectiveness of this
Article XV by the Board of Directors of the Corporation (or an authorized
committee thereof), as conclusively evidenced by a resolution adopted thereby.
"Tax Benefits" means the net operating loss carryforwards,
capital loss carryforwards, general business credit carryforwards, alternative
minimum tax credit carryforwards and foreign tax credit carryforwards, as well
as any "net unrealized built-in loss" within the meaning of Section 382 and
Section 383, of the corporation or any direct or indirect subsidiary thereof.
"Transfer" means any direct or indirect sale, transfer,
assignment, conveyance, pledge, or other disposition. A Transfer also shall
include the creation or grant of an option (within the meaning of Treasury
Regulation ss.1.382-2T(h)(4)(v)). A Transfer shall not include an issuance or
grant of Corporation Securities by the corporation.
"Treasury Regulation ss.1.382" means the applicable income tax
regulation promulgated under Section 382, and any successor regulations.
References to any subsection of such regulations include references to any
successor subsection thereof.
SECTION 46. Restrictions.
Any attempted Transfer of Corporation Securities prior to the
Restriction Release Date, and any attempted Transfer of Corporation Securities
pursuant to an agreement entered into prior to the Restriction Release Date,
shall be prohibited and void ab initio to
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the extent that, as a result of such Transfer (or any series of Transfers of
which such Transfer is a part), either: (1) any Person or group of Persons shall
become a Five-Percent Stockholder, or (2) the Percentage Stock Ownership
interest in the corporation of any Five- Percent Stockholder shall be increased.
SECTION 47. Certain Exceptions.
The restrictions set forth in Section 46 of these Bylaws shall not apply
to an attempted Transfer if the transferor or the transferee obtains the
approval of the Board of Directors of the corporation (or an authorized
committee thereof). As a condition to granting its approval, the Board of
Directions (or such committee) may, in its discretion, require an opinion of
counsel selected by the Board of Directors (or such committee) that the Transfer
shall not result in the application of any limitation under Section 382 or
Section 383 on the use of the Tax Benefits.
SECTION 48. Treatment of Excess Securities.
(a) No employee or agent of the corporation shall record any
Prohibited Transfer, and the purported transferee of such a Prohibited
Transfer (the "Purported Transferee") shall not be recognized as a
stockholder of the corporation for any purpose whatsoever in respect of
the Corporation Securities which are the subject of the Prohibited
Transfer (the "Excess Securities"). Until the Excess Securities are
acquired by another Person in a Transfer that is not a Prohibited
Transfer, the Purported Transferee shall not be entitled with respect to
such Excess Securities to any rights of stockholders of the corporation,
including without limitation, the right to vote such Excess Securities
and to receive dividends or distributions, whether liquidating or
otherwise, in respect thereof, if any. Once the Excess Securities have
been acquired in a Transfer that is not a Prohibited Transfer, the
Corporation Securities shall cease to be Excess Securities.
(b) If the Board of Directors of the Corporation (or an
authorized committee thereof) determines that a Transfer of Corporation
Securities constitutes a Prohibited Transfer then, upon written demand
by the corporation, the Purported Transferee shall transfer or cause to
be transferred any certificate or other evidence of ownership of the
Excess Securities within the Purported Transferee's possession or
control, together with any dividends or other distributions that were
received by the Purported Transferee from the corporation with respect
to the Excess Securities ("Prohibited Distributions"), to an agent
designated by the Board of Directors (or an authorized committee
thereof) (the "Agent"). The Agent shall thereupon sell to a buyer or
buyers, which may include the corporation, the Excess Securities
transferred to it in or more arm's-length transactions (in The NASDAQ
Stock Market, if possible); provided, however, that the Agent shall
effect such sale or sales in an orderly fashion and shall not be
required to effect any such sale within any specific time frame if, in
the Agent's discretion, such sale or sales would disrupt the market for
the Corporation Securities or otherwise would adversely affect the value
of the Corporation Securities. If the Purported Transferee has resold
the Excess Securities before receiving the corporation's demand to
surrender the Excess Securities to the Agent, the Purported Transferee
shall be deemed to have sold the Excess Securities for the Agent, and
shall be required to transfer to the Agent any Prohibited
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Distributions and the proceeds of such sale, except to the extent that
the Agent grants written permission to the purported Transferee to
retain a portion of such sales proceeds not exceeding the amount that
the Purported Transferee would have received from the Agent pursuant to
Section 48(c) of these Bylaws if the Agent (rather than the Purported
Transferee) had resold the Excess Securities.
(c) The Agent shall apply any proceeds of a sale by it of Excess
Securities and, if the Purported Transferee had previously resold the
Excess Securities, any amounts received by it from a Purported
Transferee, as follows: (1) first, such amount shall be paid to the
Agent to the extent necessary to cover its costs and expenses incurred
in connection with its duties hereunder; (2) second, any remaining
amounts shall be paid to the Purported Transferee, up to the amount paid
by the Purported Transferee for the Excess Securities (or, if the
attempted Transfer to the Purported Transferee was by gift, inheritance
or similar Transfer, the fair market value of the Excess Securities,
calculated on the basis of the closing market price for the applicable
Corporation Securities on the day before such attempted Transfer, of the
Excess Securities), which amount (or fair market value), if uncertain or
in dispute, shall be determined in good faith by the Board of Directors
of the Corporation (or an authorized committee thereof); and (3) third,
any remaining amounts shall be paid to one or more organizations
qualifying under Section 501(c)(3) of the Code (and any comparable
successor provision) ("Section 501(c)(3)") selected by the Board of
Directors (or an authorized committee thereof). The recourse of any
Purported Transferee in respect of any Prohibited Transfer shall be
limited to the amount payable to the Purported Transferee pursuant to
clause (2) of the preceding sentence. In no event shall the proceeds of
any sale of Excess Securities pursuant to this Article XV inure to the
benefit of the corporation.
(d) If the Purported Transferee fails to surrender the Excess
Securities or the proceeds of a sale thereof to the Agent within thirty
business days from the date on which the corporation makes a demand
pursuant to paragraph Section 48(b) of these Bylaws, then the
corporation may institute legal proceedings to compel the surrender.
(e) The corporation shall make the demand described in Section
48(b) of these Bylaws within thirty days of the date on which the Board
of Directors (or an authorized committee thereof) determines that the
attempted Transfer would result in Excess Securities; provided, however,
that if the corporation makes such demand at a later date, the
provisions of this Article IV shall apply nonetheless.
SECTION 49. Legends; Board Determinations.
(a) All certificates representing Corporation Securities issued
after the effectiveness of this Article XV (including issued upon
transfer of outstanding Corporation Securities) shall bear a conspicuous
legend as follows:
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"THE TRANSFER OF THE SECURITIES REPRESENTED
HEREBY IS SUBJECT TO RESTRICTIONS PURSUANT
TO ARTICLE XV OF THE BYLAWS OF ELXSI
CORPORATION, WHICH ARTICLE XV IS REPRINTED
IN ITS ENTIRETY ON THIS CERTIFICATE."
(b) The Board of Directions of the corporation (or an authorized
committee thereof) shall have the full power and authority to determine
all matters necessary to determine compliance with Article XV of these
Bylaws, including without limitation: (1) whether to generally repeal or
otherwise generally discontinue of the effectiveness of this Article XV,
and thereby to adopt a Restriction Release Date, as contemplated by
clause (iv) of the definition thereof in Section 45 of these Bylaws; (2)
whether a new Five-Percent Stockholder would be required to be
identified in certain circumstances, (3) whether a Transfer is a
Prohibited Transfer, (4) the Percentage Stock Ownership in the
corporation of any Five-Percent Stockholder, (5) whether a particular
right or instrument constitutes or represents a Corporation Security,
(6) the amount (or fair market value) due to a Purported Transferee
pursuant to clause (2) of Section 48(c) of these Bylaws, and (7) any
other matters which the Board of Directors (or an authorized committee
thereof) determines to be relevant; and the good faith determination of
the Board of Directors (or an authorized committee thereof) on such
matters shall be conclusive and binding for all the purposes of this
Article XV and these Bylaws.
SECTION 50. Supremacy.
In the event of any conflict between the provisions of this Article XV
and any other provision of these Bylaws, the provisions of this Article XV shall
control.
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Exhibit 20.1
ELXSI ADOPTS
STOCK PURCHASE RIGHTS PLAN;
STOCKHOLDERS APPROVE BYLAW AMENDMENTS
ORLANDO, Florida -- June 4, 1997 -- ELXSI Corporation ("ELXSI" or the "Company")
today announced that its Board of Directors has adopted a new stock purchase
rights plan ("Rights Plan").
Alexander M. Milley, the Company's Chairman, President and Chief Executive
Officer, stated that "The Rights Plan is designed to help assure that all of
ELXSI's stockholders receive fair and equal treatment in the event of a proposed
takeover, and to guard against partial and 'creeping' tender offers,
squeeze-outs and other abusive tactics to gain control of the Company."
The Board has declared a dividend of one right ("Right") for each share of ELXSI
Common Stock outstanding on June 16, 1997, and all shares of Common Stock issued
on or after that date will have one attached Right. The Rights will become
exercisable only if a person or group acquires 15% or more of the outstanding
Common Stock or announces a tender or exchange offer which would result in a
person or group owning 15% or more of the outstanding Common Stock. Each Right
will initially entitle the holder to purchase one share of Common Stock at an
exercise price of $25.00. However, once a person or group acquires 15% or more
of the Common Stock, each Right (other than such person's or group's Rights,
which will become void) will entitle the holder to purchase, at the $25.00
exercise price, ELXSI Common Stock having a market value equal to twice that
price. The Rights will have a similar effect if after they become exercisable
the Company merges or effects certain other transactions.
Mr. Milley and certain related persons beneficially own approximately 23% of the
outstanding Common Stock, and the Rights Plan provides that he and such other
persons may acquire up to 35% (or an additional 12%) of the outstanding Common
Stock without causing the Rights to become exercisable.
In certain circumstances, the Rights may be redeemed by the Company at a
redemption price of $.001 per Right. If not redeemed, they will expire on June
15, 2007.
A summary of the Rights Plan will be provided to ELXSI stockholders on or
shortly after the June 16, 1997 record date.
* * *
In a separate development, the Company also announced today that, at its recent
annual meeting, stockholders approved bylaw amendments designed to help Company
preserve its ability to utilize its net operating loss carryforwards ("NOLs")
for federal income tax purposes. Under these amendments, which were first
proposed in ELXSI's most recent Proxy Statement, any attempted transfer of
Common Stock (and certain other Company equity securities) to a person or group
who owns, or who would own as a result of such transfer, 5% or more of the
Common Stock (and such other equity securities) will be prohibited unless
approved by the Board of Directors (or an authorized committee). These
restrictions will generally be in effect until the NOLs no longer provide tax
benefits to the Company.
Mr. Milley stated that "ELXSI's NOLs are an important corporate asset, and with
the support of our stockholders we have now taken an important step toward
protecting their value."
* * *
Currently, ELXSI owns and operates 53 Bickford's, five Abdow's and one Howard
Johnson's restaurant. ELXSI also owns Cues, of Orlando, Florida, the nation's
leading manufacturer of video inspection and repair equipment serving the
wastewater and environmental industries.
ELXSI's Common Stock is traded in The NASDAQ Stock Market, under the symbol
ELXS. Contact: Kevin P. Lynch, ELXSI Corporation, (617) 782-4010, ext. 3002.
<PAGE>
Exhibit 20.2
[ELXSI Corporation Letterhead]
June 20, 1997
Rights Plan
Dear Fellow Stockholders:
We are pleased to announce that the Board of Directors of ELXSI
Corporation ("ELXSI" or the "Company") has adopted a new stock purchase rights
plan (the "Rights Plan"), established under the terms of a Rights Agreement,
dated as of June 4, 1997, between the Company and its transfer agent,
Continental Stock Transfer & Trust Company, as Rights Agent. In accordance with
that Agreement, the Board has declared a dividend of one right ("Right") for
each share of ELXSI Common Stock outstanding at the opening of business on June
16, 1997. The attached Summary of Rights document provides certain key
information about the Rights Plan and Rights. Please read it carefully.
The Rights Plan is intended to help assure that all of the Company's
stockholders receive fair and equal treatment in the event of a proposed
takeover, and to guard against partial and 'creeping' tender offers,
squeeze-outs and other coercive tactics to gain control of ELXSI. It is not
intended, nor will it operate, to prevent an acquisition of the Company that
your Board determines to be in the best interest of stockholders. Moreover, in
the event that a takeover proposal should be announced by a third party, the
Rights Plan will help to create a more balanced atmosphere in which the Board
can exercise its duties and consider other options that may available, including
maintaining the Company's independence, restructuring its capital, negotiating
with the bidder to improve terms or finding a more favorable transaction with
another company. The Rights Plan will not interfere with any merger or other
business combination approved by the Board of Directors.
One overriding objective of the adoption of the Rights Plan is to see
that the excellent progress we have made so far in building fundamental value in
the business continues. We are pleased with what we have achieved to date, but
feel that there is still much to accomplish. Your Board of Directors believes
that the adoption of the Rights Plan will permit ELXSI to continue to implement
the strategies necessary to reach these goals.
Sincerely,
Alexander M. Milley
Chairman of the Board
President & CEO
<PAGE>
ELXSI CORPORATION
(the "Company")
Rights Agreement, dated as of June 4, 1997
Summary of Rights
Issuance The Rights are being distributed as a dividend
on each share of Common Stock of the Company
outstanding at the opening of business on June
16, 1997.
Purchase Price Each Right entitles the registered holder
to purchase from the Company one share of Common
Stock at a price of $25.00 per Right (the
"Purchase Price"), subject to adjustment.
Exercisability The Rights detach and become exercisable upon
the earlier of:
(1) ten business days after the first public
announcement that a person or group of
affiliated or associated persons (an
"Acquiring Person") has acquired beneficial
ownership of 15% or more of the Company's
outstanding Common Stock (the "Stock
Acquisition Date"), or
(2) ten business days (or a later date as is
determined by the Board in accordance with
the Rights Agreement) after the
commencement of a tender offer or exchange
offer that would result in a person or
group beneficially owning 15% or more of
the Company's outstanding Common Stock.
Transferability The Rights are not detachable and not separately
transferable from the Company's Common Stock
until they become exercisable.
"Flip-In" Triggering Events If any person becomes an Acquiring Person by
acquiring beneficial ownership of 15% or more of
the Company's Common Stock, each outstanding
Right will "flip in" and become a right to buy
at the Purchase Price that number of shares of
Common Stock of the Company that will have a
market value of two times the Purchase Price.
Notwithstanding the foregoing, all Rights that
are beneficially owned by any Acquiring Person
(and its affiliates and associates) will be null
and void upon the occurrence of a Flip-In
Triggering Event.
Acquiring Person Exception Alexander M. Milley and other "Milley Group
Members" under the Rights Agreement, such as
family members
<PAGE>
2
and affiliated companies, shall not become
Acquiring Persons unless such persons shall have
in the aggregate acquired beneficial ownership
of 35% or more of the Company's Common Stock
(which percentage approximates the Milley Group
Members' current ownership position plus an
additional approximately 12%).
"Flip-Over" Triggering Events If: (1) the Company is acquired in a merger or
other business combination transaction and the
Company does not survive, or the Company merges,
consolidates or engages in a share exchange with
another person and does survive but all or part
of its stock is changed, or (2) 50% or more of
the Company's assets or earning power is sold or
transferred, then each outstanding Right will
"flip over" and become a right to buy at the
Purchase Price that number of shares of Common
Stock of the acquiring company that will have a
market value of two times the Purchase Price.
Redemption At any time until ten business days following
the Stock Acquisition Date, the Company may
redeem the Rights in whole, but not in part, at
a price of $.001 per Right. However, if there
has been a change in a majority of the Board as
a result of a proxy contest, and a person who
was a participant in the contest has indicated
an intention to become an Acquiring Person or to
cause a Triggering Event (an "Adverse Change of
Control"), then the redemption of the Rights
will require the approval of a majority of the
"Continuing Directors" of the Company.
Exchange Option After a person becomes an Acquiring Person (but
before such Acquiring Person owns 50% or more of
the outstanding Common Stock), the Company, by
action of a majority of the Continuing Directors
in office at the time, may permit each Right
(other than those owned by an Acquiring Person)
to be exchanged, without payment of the Purchase
Price, for one share of Common Stock. The
aggregate dilutive effect on an Acquiring Person
upon exchange of the Rights is somewhat less
than the dilutive effect of a normal exercise of
the Rights.
<PAGE>
3
Amendment In general, until the Rights become exercisable
the terms of the Rights Agreement may be amended
or supplemented without the approval of any
holders of the Rights. Amendments of the Rights
Agreement after there has been an Adverse Change
of Control or a Triggering Event will require
the approval of a majority of the Continuing
Directors of the Company and generally may not
"adversely affect" the interests of the holders
of Rights (other than Acquiring Persons and the
affiliates and associates thereof).
Voting The Rights have no voting power.
Dividends The Rights have no rights to dividends.
Term Ten years
Miscellaneous The Rights Agreement provides that the Company
may not enter into any transactions, agreements
or arrangements intended to counteract the
protective provisions of the Rights.
* * *
Dated: June 1997
<PAGE>
