<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [ X ]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary proxy statement
[ X ] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
AMERICAN BUSINESS COMPUTERS CORPORATION
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
GARY T. SALHANY, TREASURER
(NAME OF PERSON(S) FILING PROXY STATEMENT)
Payment of filing fee (Check the appropriate box):
[ X ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(j)(2)
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
N/A
(2) Aggregate number of securities to which transaction applies:
N/A
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:(1)
N/A
(4) Proposed maximum aggregate value of transaction:
N/A
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount Previously Paid:
N/A
(2) Form, schedule or registration statement no.:
------------------
(3) Filing party:
--------------------------------------------------
(4) Date filed:
----------------------------------------------------
[FN]
(1) Set forth the amount on which the filing fee is calculated and state how it
was determined.
<PAGE> 2
AMERICAN BUSINESS COMPUTERS CORPORATION
451 KENNEDY ROAD, AKRON, OHIO 44305
------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MARCH 1, 1996
-----------------------------------------------------------------------------
To The Shareholders Of American Business Computers Corporation:
You are hereby notified that the 1995 Annual Meeting of Shareholders (the
"Meeting") of American Business Computers Corporation (the "Company") will be
held at Sheraton Suites, 1989 Front Street, Cuyahoga Falls, Ohio , on Friday,
March 1, 1996, at 1:00 p.m. local time, for the following purposes:
1. To elect five (5) Directors to serve until the 1996 annual
meeting of shareholders or until their successors are elected
and qualified;
2. To consider and vote upon the adoption of the Company's 1995
Stock Option Plan;
3. To consider and vote upon the change of the Company's name to
"ABC Dispensing Technologies, Inc.";
4. To consider and vote upon an increase in the number of shares
of the Company's authorized common stock to 50,000,000 shares;
5. To consider and vote upon the reincorporation of the Company
under the laws of the State of Delaware by means of a merger of
the Company into a newly formed, wholly-owned subsidiary
incorporated in the State of Delaware (the "Merger"); and
6. To consider and transact such other business as may properly
come before the meeting or any adjournment.
The Board of Directors has fixed the close of business on January 10, 1996 as
the record date for the determination of shareholders entitled to notice of,
and to vote at, the Meeting. Accordingly, only shareholders of record on such
date will be entitled to vote by attending in person or by Proxy. A list of
such shareholders will be made available for examination at the offices of the
Company, at least ten (10) days prior to the Meeting.
Dissenting Shareholders that comply with the applicable provisions of the
Florida Business Corporation Act (the "Dissenters' Statute") are entitled to
receive payment of the fair value for their shares of the Company's Common
Stock if the Merger is consummated. A copy of the Dissenters' Statute is
attached as Exhibit E for your information.
Your attention is directed to the accompanying Proxy Statement for further
information regarding each proposal to be considered.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE,
DATE, SIGN AND RETURN THE PROXY CARD IN THE ENCLOSED POSTAGE-
PREPAID ENVELOPE TO ASSURE REPRESENTATION OF YOUR SHARES AND A
QUORUM AT THE MEETING. YOU MAY REVOKE YOUR PROXY AT ANY TIME
BEFORE IT IS VOTED BY PROVIDING WRITTEN NOTICE TO THE COMPANY
BEFORE THE MEETING OR BY ATTENDING THE MEETING AND VOTING.
By Order of the Board of Directors
William Lerner, Secretary
Akron, Ohio, January 30, 1996
Please mail your proxy promptly.
<PAGE> 3
AMERICAN BUSINESS COMPUTERS CORPORATION
451 KENNEDY ROAD
AKRON, OHIO 44305
- -------------------------------------------------------------------------------
PROXY STATEMENT
1995 ANNUAL MEETING OF SHAREHOLDERS
OF
AMERICAN BUSINESS COMPUTERS CORPORATION
TO BE HELD MARCH 1, 1996
- -------------------------------------------------------------------------------
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors of American Business Computers Corporation (the
"Company") of proxies to be voted at the 1995 Annual Meeting of Shareholders
(the "Meeting") to be held at Sheraton Suites, 1989, Front Street, Cuyahoga
Falls, Ohio, on Friday, March 1, 1996, at 1:00 p.m. local time, or at any
adjournment, for the purposes set forth in the accompanying Notice of Annual
Meeting of Shareholders.
The approximate date of the mailing of this Proxy Statement and
accompanying proxy is January 30, 1996. A shareholder who submits a proxy on
the accompanying form has the power to revoke it by written notice of
revocation received by the Secretary at the Company at any time before the
Meeting. Although a Shareholder may have turned in a proxy prior to the
Meeting, such a shareholder may, nevertheless, attend the meeting, revoke his
proxy and vote in person. All properly executed proxies will be voted as
specified in the proxy. Unless authority to vote is withheld or a contrary
choice is specified, proxies will be voted in favor of the proposals set forth
in the accompanying Notice of Annual Meeting of Shareholders.
A proxy for use in connection with the Meeting is enclosed.
Shareholders who execute proxies retain the right to revoke them before they
are voted. A proxy may be revoked by submission of a later dated proxy, by
submission of a written statement signed by the shareholder whose proxy is
being revoked or by voting in person at the Meeting. If mailed, the later
dated proxy or the written revocation must be received by the Company at its
corporate offices at or prior to the Meeting. A proxy, when executed and not
so revoked, will be voted as specified by the shareholder.
If because of a disability you will need auxiliary aids or services to
attend the Meeting, please contact the Secretary of the Company prior to the
Meeting.
Officers and employees of the Company may, by letter, telephone, or in
person, request the return of proxies. The cost of this solicitation will be
paid by the Company. The Company will reimburse brokerage houses, custodians,
nominees, and others for reasonable expenses in connection with this
solicitation.
1
<PAGE> 4
The Company has 16,692,493 shares of the Company's common stock (the
"Common Stock") outstanding and entitled to vote as of the record date, January
10, 1996. Shareholders of record, at the close of business on that date, will
be the only persons to receive notice of, and to be entitled to vote, at the
Meeting or any adjournment of the Meeting. Holders of common stock are
entitled to one vote per share on all matters to be brought before the Meeting.
For purposes of counting votes, abstentions will be treated as shares that are
present and entitled to vote for purposes of determining the presence of a
quorum, but as unvoted for purposes of determining the approval of any proposal
by the shareholders. If a broker or nominee indicates that it does not have
discretionary authority to vote on a proposal as to certain shares, those
shares will be counted for general quorum purposes but will not be considered
as present and entitled to vote with respect to such proposals.
The presence, in person or by proxy, of the holders of a majority of
the outstanding shares of common stock entitled to vote at the Meeting is
necessary to constitute a quorum at the Meeting. Business at the Meeting will
be conducted in accordance with the procedures determined by the Chairman of
the Meeting and will be limited to matters properly brought before the Meeting
pursuant to the procedures prescribed in the Company's By-Laws.
PROPOSAL NO. 1 - ELECTION OF FIVE DIRECTORS
The By-Laws of the Company provide for a Board of Directors consisting
of up to nine members. The Board of Directors currently has four members. At
the meeting, five individuals will be elected to serve as directors until the
next annual meeting of shareholders, and until their successors are elected and
qualified. The Board of Directors has nominated five individuals, four of whom
comprise the current Board of Directors. In the event all such nominees are
elected, the Board will have four vacancies. Board members are elected
annually by shareholders; however, vacancies may be filled at any time by the
existing Board of Directors. The Board may fill some of these four vacancies
prior to the next annual meeting.
Unless a shareholder withholds authority, a properly signed and dated
proxy will be voted for the election of the persons named below. If a duly
executed and dated proxy is returned without instructions, it will be voted for
the five nominees proposed below. Management has no reason to believe that any
of the nominees will not be a candidate or will be unable to serve as a
director. However, in the event any nominee is not a candidate or is unable or
unwilling to serve as a director at the time of the election, unless the
shareholder withholds authority from voting, the proxy will be voted for any
nominee who shall be designated by the present Board of Directors to fill such
vacancy.
2
<PAGE> 5
The names and biographical summaries of the five persons who have been
nominated to stand for election at the Meeting are:
<TABLE>
<CAPTION>
NAME AGE PRINCIPAL OCCUPATION OF EMPLOYMENT
- ---- --- ----------------------------------
<S> <C> <C>
Robert A. Cutting 48 President, Chief Executive Officer and
Director of the Company
Herbert L. Luxenburg 61 President and Chief Executive Officer of
University Inn and Days Inn of Kent, Ohio;
Director of the Company
C. Rand Michaels 58 Vice Chairman of Lomak Petroleum, Inc.;
Director of the Company
Herbert M. Pearlman 62 Chairman of Seitel, Inc. and several other
companies (see below); Chairman of the Company
John E. Stieglitz 64 President of Conspectus, Inc.; Director of
several other companies (see below)
</TABLE>
ROBERT A. CUTTING has been a Director of the Company since August 3, 1993. Mr.
Cutting has been Chief Executive Officer of the Company since May 1993 and
President of the Company since April 1990. Mr. Cutting has been President of
the Company's wholly-owned subsidiary, ABCC, Inc., since September 1986.
HERBERT L. LUXENBURG has been a Director of the Company since September 1988.
Mr. Luxenburg has been a proprietor in the hospitality industry since 1965 and
is President and Chief Executive Officer of both the University Inn and Days
Inn of Kent, Ohio.
C. RAND MICHAELS has been a Director of the Company since September 1986. Mr.
Michaels is Vice Chairman of Lomak Petroleum, Inc., a public corporation
engaged in exploration for, and in the development and production of, crude oil
and natural gas. Mr. Michaels has held executive positions with Lomak since
1976. Mr. Michaels also serves as a Director of Lynx Exploration, Inc., an oil
and gas exploration company.
HERBERT M. PEARLMAN has been a Director of the Company since May 1994. Mr.
Pearlman has extensive experience in helping companies develop and execute
strategic plans for future growth. Mr. Pearlman serves as Chairman of several
public and private companies, including: Seitel, Inc., ("Seitel"), a
diversified energy company, InterSystems, Inc. ("InterSystems"), a provider of
specialty industrial equipment and processing, Helm Resources, Inc. ("Helm"), a
holding company with diversified business interests, and Unapix Entertainment,
Inc., a multimedia-entertainment marketing and distribution company.
3
<PAGE> 6
JOHN E. STIEGLITZ has been President of Conspectus, Inc., a privately held
company engaged in providing services in the area of executive recruitment
since 1976. Mr. Stieglitz is a Director of Seitel, Helm and InterSystems.
BOARD MEETINGS, COMMITTEES AND COMPENSATION
Board Meetings
- --------------
The Company's Board of Directors held three meetings during the fiscal
year ended April 29, 1995. All Directors attended 75% or more of the total
number of Board and applicable committee meetings. The Board has Compensation,
Audit and Stock Option committees.
Committees
- ----------
The COMPENSATION COMMITTEE members were Herbert L. Luxenburg and
Steven P. Smolev during fiscal 1995. The Compensation Committee held one
meeting during fiscal 1995; both members attended the meeting. The
Compensation Committee is responsible for the review and recommendation of
officer and key employee compensation and benefit programs. Messrs. Luxenburg
and Smolev were replaced as Compensation Committee members on August 1, 1995 by
Herbert M. Pearlman.
The AUDIT COMMITTEE members were C. Rand Michaels and Robert A. Cutting
during fiscal 1995. The Audit Committee held one meeting during fiscal 1995;
both members attended the meeting. The Audit Committee is responsible for the
review of SEC reports, public financial releases, and independent audit
results. Mr. Cutting was replaced as an Audit Committee member on August 1,
1995 by Herbert L. Luxenburg
The STOCK OPTION COMMITTEE members were Joseph W. Shannon and Robert A.
Cutting during fiscal 1995. Mr. Shannon resigned from the Stock Option
Committee on September 8, 1994. The Stock Option Committee held nine meetings
during fiscal 1995. Mr. Shannon attended the only two meetings held prior to
his resignation. Mr. Cutting attended all nine meetings. The Stock Option
Committee is responsible for administering the Company's existing stock option
plans.
Directors' Compensation
- -----------------------
Directors were not compensated for service as Directors or to attend
any meetings, including meetings of any committees or sub-committees. All
Directors were reimbursed for their expenses in connection with the meetings.
4
<PAGE> 7
IDENTIFICATION OF EXECUTIVE OFFICERS
The Company's executive officers are elected annually at the first
meeting of the Board of Directors following each annual shareholders' meeting.
The Company's executive officers as of December 1, 1995 are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- --- --------
<S> <C> <C>
Herbert M. Pearlman 62 Chairman
Robert A. Cutting 48 President and Chief Executive Officer
Gary T. Salhany 41 Treasurer and Chief Financial Officer
William Lerner 62 Secretary
</TABLE>
INFORMATION ABOUT MESSRS. PEARLMAN AND CUTTING IS SET FORTH IN THE BOARD OF
DIRECTORS SECTION OF THIS PROXY STATEMENT.
GARY T. SALHANY, CPA, MBA, has served as Treasurer of the Company since August
1986. He served as Secretary of the Company from September 1988 to September
1994.
WILLIAM LERNER has served as Secretary of the Company since September 1994.
Mr. Lerner is an attorney engaged in the private practice of Law. From May
1990 until December 1990, he was General Counsel to Hon Development Company, a
California real estate development company. Mr. Lerner has been a director of
Seitel since July 1984, a director of Rent-Way, Inc., the owner of a chain of
retail stores in the rental-purchase industry, and a director of Co-Counsel,
Inc., a provider of contract part-time lawyers and paralegals to law firms and
corporations.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE
ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors, officers and persons who own more than ten percent (10%)
of a registered class of the Company's equity securities to file with the
Securities and Exchange Commission ("SEC") and NASDAQ initial reports of
ownership and reports to changes of ownership of Common Stock and other equity
securities of the Company. Officers, directors and greater than ten percent
(10%) shareholders are required by SEC regulation to furnish the Company with
copies of all Section 16(a) forms they file. Based solely upon its review of
copies of the forms received by it, or on written representations from
reporting persons, the Company believes that there were no late filings on
Forms 3, 4 or 5, or unreported transactions, during fiscal 1995.
5
<PAGE> 8
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth a summary of the fiscal years ended
April 29, 1995, April 30, 1994 and April 30, 1993 of the compensation of the
Company's Chief Executive Officer in fiscal 1995. No disclosure is provided as
to compensation by the Company to other executive officers of the Company since
the compensation paid to each such executive officer was less than $100,000 in
the fiscal year ended April 29, 1995.
<TABLE>
<CAPTION>
Long Term
Compensation
Annual Compensation Awards
------------------- ------------
Name and Principal Fiscal Salary Bonus Other Annual Options All Other
Position Year Compensation (# of Compensation
($) (1) shares) ($) (2)
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Robert A. Cutting 1995 $115,846 -0- - -0- $490
President and 1994 $99,616 - - -0- $732
Chief Executive Officer 1993 $90,000 - - 11,837 $645
(1) Perquisites for each of the three fiscal years did not exceed
10% of Mr. Cutting's salary and bonus combined.
(2) These amounts represent the Company's matching contributions
for Mr. Cutting's account in the Company's 401-(K) retirement plan.
</TABLE>
BOARD COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
Compensation Committee members were Herbert L. Luxenburg and Steven P.
Smolev during fiscal 1995. In determining the compensation to be paid to the
Company's executive officers in fiscal 1995, the Compensation Committee
employed compensation policies designed to align the compensation with the
Company's overall business strategy, values and management initiatives. These
policies are intended to reward executives for long-term strategic management
and the enhancement of shareholder value, support a performance-oriented
environment that rewards achievement of internal Company goals and recognizes
the Company's performance compared to performance levels of comparable
companies in the industry, and attract and retain executives whose abilities
are critical to the long-term success and competitiveness of the Company.
6
<PAGE> 9
The key components of executive officer compensation are: (1) salary,
which is based on factors such as the individual officer's level of
responsibility and comparisons to similar positions in the Company and
comparable companies in the industry, (2) cash bonus awards, which are based on
individual performance, (3) stock option awards, which are intended to increase
the interest in the long-term success of the Company as measured by the share
price and book value per share; and (4) and stock awards.
Based on the above factors, the compensation of Robert A. Cutting, the
Company's President and Chief Executive Officer, was increased from $99,616 in
1994 to $115,846 in 1995. No cash bonuses were issued during fiscal 1995.
RESPECTFULLY SUBMITTED Compensation Committee
Herbert L. Luxenburg
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
No members of the Compensation Committee are employees or former
employees of the Company.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
The following graph shows the cumulative return experienced by the
holders of Common Stock during the period from April 29, 1990 through April 28,
1995 as compared to the NASDAQ Stock Market Index (U.S. Companies) and the
total return of domestic issuers having the same Standard Industrial
Classification Industry Group Number as the Company (SIC 355) and traded on the
NASDAQ Stock Market Index. Such yearly percentage change has been measured by
dividing, (i) the sum of (a) the amount of dividends for the measurement
period, assuming dividend reinvestment and (b) the difference between the price
per share at the end and at the beginning of the measurement period, by (ii)
the price per share at the beginning of the measurement period.
The graph assumes the investment of $100 on April 29, 1990 in the
Common Stock and each of the indices, and the reinvestment of all dividends
paid during the period.
7
<PAGE> 10
Comparison of Five Year-Cumulative Total Returns
Performance Graph for
American Business Computers Corporation
Prepared by the Center for Research in Security Prices
Produced on 11/22/95 including data to 04/28/95
<TABLE>
<CAPTION>
CRSP Total Returns Index for: 04/30/90 04/30/91 04/30/92 04/30/93 04/29/94 04/28/95
- ----------------------------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
American Business Computers Corporation 100.0 124.6 23.5 32.2 21.8 47.9
Nasdaq Stock Market (US Companies) 100.0 118.8 144.1 165.7 184.4 214.4
NASDAQ Stocks (SIC 3550-3559 US Companies) 100.0 104.6 118.2 216.6 405.6 596.0
Special Industry Machinery, Execpt
Metalworking Machinery
NOTES:
A. The lines represent monthly index levels derived from compounded daily returns that include all dividends.
B. The indexes are reweighted daily, using the market capitalization on the previous trading day.
C. If the monthly interval, based on the fiscal year-end, is not a trading day, the preceding trading day is used.
D. The index level for all series was set to $100.0 on 4/30/90.
E. No trading activity recorded on 07/09/90 for American Business Computers Corporation.
</TABLE>
8
<PAGE> 11
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information as of December 1,
1995, with respect to the Common Stock held by the only person who owns of
record, or is known by the Company to own beneficially, more than five percent
(5%) of any class of securities:
<TABLE>
<CAPTION>
NUMBER OF SHARES
NAME AND ADDRESS OF OF COMMON STOCK PERCENT
BENEFICIAL OWNERSHIP BENEFICIALLY OWNED (1) OF CLASS
- -------------------- ---------------------- --------
<S> <C> <C>
The Pepsi-Cola Company, 1,500,000(2) 8.7%
a division of PepsiCo, Inc.
Intersection of Routes 100 & 35
Somers, New York 10589
</TABLE>
- ----------------
(1) Pursuant to Rule 13d-3 under the Securities Exchange Act of 1934,
as amended, beneficial ownership of a security consists of sole or
shared voting power (including the power to vote or direct the vote) and/or
sole or shared investment power (including the power to dispose or direct
its disposition) with respect to a security, whether through a contract,
arrangement, understanding, relationship or otherwise. Unless otherwise
indicated herein, each person has sole power to vote or dispose or direct
the disposition of the shares owned beneficially.
(2) Includes 500,000 shares of common stock which The Pepsi-Cola
Company has the right to acquire within sixty (60) days upon the exercise
of common stock purchase warrants granted by the Company on November 15,
1995.
SECURITY OWNERSHIP OF DIRECTORS AND MANAGEMENT
The following table sets forth certain information as of December 1,
1995, except as noted, regarding the Common Stock held by Directors and the
Chief Executive Officer of the Company, including each nominee for election as
a Director and all directors and executive officers as a group:
<TABLE>
<CAPTION>
NUMBER OF SHARES
OF COMMON STOCK PERCENT
NAME AND BENEFICIAL OWNERSHIP BENEFICIALLY OWNED OF CLASS
- ----------------------------- ------------------ --------
<S> <C> <C>
Robert A. Cutting, President, Chief
Executive Officer and Director 238,037(1) *
Herbert L. Luxenburg, Director 202,500(2) *
C. Rand Michaels, Director 65,000(2) *
</TABLE>
9
<PAGE> 12
<TABLE>
<S> <C> <C>
Herbert M. Pearlman, Director 657,500(3) *
John E. Stieglitz, nominee
for election as Director 0 *
Directors (including nominees) and
Officers as a Group (7 Persons) 1,264,402(4) 7.2%
</TABLE>
* The percentage of shares beneficially owned by any of these directors or
nominees does not exceed one percent of the class so owned.
(1) Robert A. Cutting retains common stock purchase warrants to purchase
56,000 shares of Common Stock at the exercise price of $2.00 per share, all
of which are exercisable within 60 days. These warrants expire between
August 17, 1999 and September 13, 1999. Mr. Cutting also retains common
stock purchase warrants to purchase 100,000 shares of Common Stock at the
exercise price of $3.00 per share all of which are exercisable within 60
days. These warrants expire August 1, 2000.
(2) Herbert L. Luxenburg and C. Rand Michaels each retain stock option
rights to purchase 65,000 shares of Common Stock under the Company's 1990
Non-Qualified Stock Option Plan, all of which are exercisable within 60
days. For each Director, 25,000 stock options are exercisable at $3.25 per
share and 40,000 stock options are exercisable at $1.25 per share. Mr.
Luxenburg also retains common stock purchase warrants to purchase 50,000
shares of Common Stock at the exercise price of $2.00 per share, all of
which are exercisable within 60 days and 12,500 shares of Common Stock at
the exercise price of $2.00 per share, all of which are exercisable within
60 days. These warrants expire on August 17, 1999 and June 1, 1998,
respectively.
(3) Herbert M. Pearlman owns warrants to purchase 530,000 shares of Common
Stock for services rendered as Director of the Company. 150,000 of the
warrants were issued at $1.25 per share and 100,000 of the warrants were
issued $3.25 per share. All of these warrants expire on May 27, 1999 and
are exercisable within 60 days. 80,000 of the warrants were issued at
$2.00 per share and 200,000 of the warrants were issued at $3.00 per share.
These warrants expire on August 17, 1999 and August 1, 2000, respectively
and all of which are exercisable within 60 days.
(4) Directors and Officers as a group retain stock option rights to
purchase 175,365 shares under the 1990 Non-Qualified Stock Option Plan and
warrants to purchase 773,500 shares of Common Stock.
10
<PAGE> 13
CERTAIN TRANSACTIONS INVOLVING MANAGEMENT
In June 1994, the Company purchased its headquarters facility in Akron,
Ohio for $490,000 from Joseph W. Shannon, who at the time was Chairman of the
Company's Board of Directors. The purchase price was based on an appraisal of
the property done by Spalding/Emig Company.
The Company is considering obtaining a loan from The Mezzanine
Financial Fund, L.P. ("Mezzanine") in a principal amount of $500,000 (the
"Loan"). The Loan would be used for general working capital purposes. The
Loan would mature in three years and bear an interest rate of 18% per annum.
The terms of the Loan require a $100,000 repayment of principal on each of the
first and second anniversaries of the closing of the Loan. Mezzanine at its
option may convert the principal amount of the Loan into Common Stock at a
price of $3.00 per share, or, if the entire Loan is converted, 167,000 shares
of Common Stock (including standard anti-dilution provisions). In
consideration for providing the Loan, Mezzanine will receive a five (5) year
warrant to acquire shares of Common Stock at a price equal to the lower of
seventy percent (70%) of the 30-day average trading price prior to closing of
the Loan and $2.50 (the "Price"). The number of shares subject to the warrant
will be determined by dividing the Price into an amount equal to 10% of the
average annual Loan balance multiplied by the number of years the Loan is
outstanding (the "Warrant Fee"). At Mezzanine's election, all or any part of
the Warrant Fee may be put to the Company upon repayment of the Loan for
payment in cash in the amount equal to 70% of such Warrant Fee, paid in equal
monthly payments over the same number of months that the Loan was outstanding.
Additionally, Mezzanine shall receive a closing fee equal to 2% of the amount
of the Loan and reimbursement for expenses associated with the making of the
Loan.
Herbert M. Pearlman, Chairman of the Board of Directors of the Company,
is a director, officer and principal stockholder of the general partner of
Mezzanine. Mr. Pearlman is also Chairman, chief executive officer and a
principal stockholder of Helm, a publicly traded company which holds an
approximately 14% equity stake in Mezzanine.
Pursuant to an arrangement with Intersystems, a company in which Mr.
Pearlman is Chairman and in which Mr. Pearlman has a significant equity
interest, the Company receives certain shareholder relations services from an
employee of Intersystems in return for which the Company reimburses
Intersystems for one-third of the salary and other expenses allocated to such
employee. During fiscal 1995, the aggregate amount paid by the Company
pursuant to this arrangement was approximately $18,033. Pursuant to this
arrangement, the Company currently pays approximately $3,500 per month to
Intersystems.
11
<PAGE> 14
Pursuant to an arrangement with Helm, the Company has agreed to be
responsible for 25% of Mr. Pearlman's allocated overhead expenses associated
with the office space maintained by Helm. During fiscal 1995, the aggregate
amount of the Company paid to Helm pursuant to this arrangement was
approximately $41,075. The Company continues to pay Helm approximately $5,300
per month pursuant to this arrangement.
VOTE REQUIRED
The Directors shall be elected by a plurality of the votes cast by the
holders of shares entitled to vote at the Meeting. Each shareholder has the
right to cast one vote for each nominee for Director, but not to cumulate votes
for any director.
RECOMMENDATION OF THE BOARD OF DIRECTORS
The Board of Directors recommends that the shareholders vote FOR its
nominees for directors.
PROPOSAL NO. 2
APPROVAL OF THE 1995 STOCK OPTION PLAN
On December 11, 1995 the Board of Directors of the Company unanimously
adopted the 1995 Stock Option Plan (the "1995 Plan"), subject to the approval
of the Company's shareholders, a copy of which is attached as Exhibit A to this
Proxy Statement. The 1995 Plan will not become effective unless it is approved
by the holders of a majority of the shares of Common Stock present and voted in
person or represented by proxy at the Meeting.
The purpose of the 1995 Plan, which terminates in the year 2005, is to
attract and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to the employees, directors and
consultants of the Company to exert their utmost effort to improve the business
and increase the assets of the Company by providing them the opportunity to
acquire Common Stock through the exercise of stock options and to promote the
success of the Company's business.
The 1995 Plan authorizes the granting of options to acquire an
aggregate of 750,000 shares of the Common Stock. Such options may be either
"incentive stock options", as defined in Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code"), or "non-qualified stock options". The
shares available for issuance upon exercise of outstanding options will be
increased or decreased according to any reclassification, recapitalization,
stock split, stock dividend or other such subdivision or combination of Common
Stock. As of December 31, 1995, the Company had 49 employees eligible to
participate in the 1995 Plan. The following discussion of the principle
features and effects of the 1995 Plan is qualified in its entirety by reference
to the text of the 1995 Plan attached as Exhibit A to this Proxy Statement.
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ADMINISTRATION.
The Company's Board of Directors currently administers the 1995 Plan.
The 1995 Plan provides that the Board may appoint a stock option committee
consisting of not less than two members of the Board of Directors to administer
the 1995 Plan. Each member of the Stock Option Committee will be a
"disinterested person" as defined in, and if required under, Rule 16b-3 of the
Securities Exchange Act of 1934, as amended. The Board of Directors, or a
stock option committee appointed by the Board, determines the individuals who
will be granted options, and, subject to the provisions of the 1995 Plan, the
number of options each individual will receive, the option price per share and
the exercise period for each option. If and when appointed, the stock option
committee shall continue to serve until otherwise directed by the Board of
Directors, who may decide to remove all members of the Committee and thereafter
resume administration of the 1995 Plan.
ELIGIBILITY.
Officers, and other regular, full-time employees of the Company will be
eligible to receive incentive stock options under the 1995 Plan. Consultants
and employee directors and other regular full-time, salaried employees of the
Company will be eligible to receive non-qualified stock options under the 1995
Plan. Members of the stock option committee or the Board of Directors, in the
absence of the appointment of a stock option committee, are not eligible for
option grants under the 1995 Plan; provided that if Rule 16b-3 of the
Securities Exchange Act of 1934, as amended, is amended such that it does not
require plan administrators to be ineligible under a qualified plan, no such
ineligibility of plan administrators under the 1995 Plan shall be required.
The number of shares of Common Stock which may be subject to options
granted under the 1995 Plan is 750,000. Shares subject to options which are no
longer exercisable shall thereafter become available for issuance under the
1995 Plan pursuant to the grant of new options.
Any employee who owns ten percent or more of the total combined voting
power of all classes of the Company's capital stock shall be eligible to
receive incentive stock options only under limited circumstances.
EXERCISE PRICE OF OPTIONS.
Incentive stock options granted pursuant to the 1995 Plan must have an
exercise price equal to the fair market value of the Common Stock at the time
the option is granted. If granted to an individual who owns more than ten
percent of the combined voting power of all classes of the Company's voting
stock or the voting stock of any parent or subsidiary of the Company at the
date of grant, the exercise price must be at least 110% of the fair market
value.
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Under the terms of the 1995 Plan, the aggregate fair market value of the stock
with respect to which incentive stock options are exercisable for the first
time by such individual during any calendar year shall not exceed $100,000.
Non-qualified stock options may be granted at less than the fair market value
of the Common Stock. "Fair market value" is determined by the Board or the
stock option committee based on the average of the bid and asked price of the
Common Stock on the date of grant. On December 31, 1995, the average NASDAQ
bid and asked price of the Common Stock, as traded was $2.75. Any monies
received by the Company from the exercise of options will be used for working
capital.
TERMS.
All options available to be granted under the 1995 Plan must be granted
by December 1, 2005. The stock option committee or, in the absence of a stock
option committee, the Board of Directors, will determine the actual term of the
options but no option will be exercisable after the expiration of ten years
from the date of grant. No incentive stock option granted to an employee who
owns more than ten percent of the combined voting power of all the outstanding
classes of stock in the Company may be exercised after five years from the date
of the grant.
All options granted pursuant to the 1995 Plan shall not be transferable
except by will or by the laws of descent and distribution.
EXERCISE OF OPTIONS.
Incentive stock options granted to employees under the 1995 Plan may be
exercised only by the employee during his employment with the Company or for
the period of thirty (30) days (or such other period of time not exceeding
three months as determined by the Board) after voluntary termination or for a
period of three (3) months (or such other period of time not exceeding one year
as determined by the Board) if the employee ceased employment because of
permanent and total disability within the meaning of Section 422 (e)(3) of the
Code. Such incentive stock options may, however, be exercised by the
employee's estate, or by any person who acquired the right to exercise such
options by bequest or inheritance from the employee for a period of twelve
months from the date of the employee's death. If such options shall by their
terms sooner expire, such options shall not be extended as a result of the
employee's death. Options granted under the 1995 Plan need not be exercised in
the order in which they are granted. Non-qualified stock options granted under
the 1995 Plan have no exercise limitations other than that they be exercised
within ten years from the date of grant or as otherwise specified in an option
granted by the stock option committee.
With the exception of the consideration received by the Company upon
the exercise of the options granted under the 1995 Plan, no consideration is
received by the Company for the granting of any options.
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FEDERAL INCOME TAX CONSEQUENCES RELATING TO INCENTIVE STOCK OPTIONS.
Certain options granted under the 1995 Plan are intended to qualify as
"incentive stock options" within the meaning of Section 422 of the Code. Set
forth below is a general summary of certain of the principal Federal income tax
consequences to participants and the Company of incentive stock options granted
under the 1995 Plan.
An employee to whom an incentive stock option is granted pursuant to
the 1995 Plan will not recognize any compensation income, and the Company will
not recognize any compensation deduction, at the time an incentive stock option
is granted or at the time an incentive stock option is exercised. In the year
of exercise, however, the amount by which the fair market value of the Common
Stock exceeds the option price will constitute a tax preference item under the
alternative minimum tax. If the employee incurs minimum tax in the year of
exercise, however, he should qualify for the credit for prior year minimum tax
liability in the first future year he has regular tax liability.
In order to obtain incentive stock option treatment for Federal income
tax purposes upon the subsequent sale (or other disposition) by the optionee of
the shares of Common Stock received upon exercise of the option, the sale (or
other disposition) must not occur within two years from the date the option was
granted nor within one year after the issuance of such shares upon exercise of
the option (the "ISO holding period requirements"). If the ISO holding period
requirements are satisfied, on the subsequent sale (or other disposition) by
the optionee of the shares of Common Stock received upon the exercise of an
option, the optionee generally will recognize income from the sale of a capital
asset equal to the difference, if any, between the proceeds realized from the
sale (or other disposition) and the amount paid as the exercise price of the
option. Alternatively, if the ISO holding period requirements are not
satisfied, on the subsequent sale (or other disposition) by the optionee of the
shares of Common Stock received upon the exercise of the option, the optionee
generally will recognize income taxable as compensation (and the Company will
recognize a compensation deduction) in an amount equal to the lesser of (a) the
difference, if any, between the fair market value of the shares on the date of
exercise and the amount paid as the exercise price of the option or (b) the
difference, if any, between the proceeds realized from the sale or other
disposition and the amount paid as the exercise price of the option. Any
additional gain realized on such sale or disposition (in addition to the
compensation income referred to above) would give rise to income from the sale
of a capital asset and be taxed accordingly.
FEDERAL INCOME TAX CONSEQUENCES RELATING TO NON-QUALIFIED STOCK OPTIONS.
The non-qualifying stock options which may be granted under the 1995
Plan are not intended to qualify as incentive stock options within the meaning
of Section 422 of the Code. An individual to whom a non-qualifying stock
option is granted pursuant to the 1995 Plan will generally not recognize any
compensation income, and the Company will not realize any compensation
deduction, at the time the non qualifying stock option is
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granted. In the year of exercise, however, the optionee generally will realize
income taxable as compensation (and the Company will realize a compensation
deduction) in an amount equal to the difference, if any, between the fair market
value of the shares on the date of exercise and the amount paid as the exercise
price of the option.
The tax basis of the shares of Common Stock received by the optionee
upon exercise will be equal to the amount paid as the exercise price plus the
amount, if any, includable in his gross income as compensation income. The
holding period for the shares will commence on the date of exercise.
On the subsequent sale (or other disposition) by the optionee of the
shares of Common Stock received upon the exercise of the option, any gain
realized on such sale or disposition would give rise to income from the sale of
a capital asset and taxed accordingly.
AMENDMENTS AND DISCONTINUANCE OF THE 1995 PLAN.
The 1995 Plan can be amended, suspended or terminated at any time by
action of the Company's Board of Directors except that no amendment to the 1995
Plan can be made without prior Shareholder approval where such amendment would
(i) increase by more than 10% the total number of shares of stock which may be
purchased under the 1995 Plan by officers, directors or persons beneficially
owning 10% or more of the Company's Common Stock, (ii) materially modify the
eligibility requirements of the 1995 Plan or (iii) materially increase the
benefits accruing to participants under the 1995 Plan.
OPTION GRANTS TO DIRECTORS, OFFICERS AND EMPLOYEES.
As of the date of this Proxy Statement, no stock options have been
granted to any of the Company's executive officers or employees under the 1995
Plan and any such grants in the future are not readily determinable at this
time. The amount, timing and other terms of any stock option grant under the
1995 Plan will be determined by the Board, or a Stock Option Committee
appointed by the Board, and will depend upon a variety of factors including,
without limitation, the relative contribution of the Optionee to the Company's
operations.
Vote Required.
The affirmative vote of holders of a majority of the issued and
outstanding shares of Common Stock of the Company present, or represented by
proxy, and voted at the Meeting, is required for approval of the 1995 Plan.
Recommendation of the Board of Directors.
The Board of Directors recommends that the Shareholders vote FOR the
approval of the 1995 Plan.
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PROPOSAL NO. 3
CHANGE OF THE COMPANY'S NAME
On December 11, 1995, the Company's Board of Directors unanimously
approved, subject to shareholder approval, a change of the Company's name to
"ABC Dispensing Technologies, Inc.". Management believes that the change of
the Company's name is appropriate in light of the nature of its business.
If Proposal 5 (reincorporation of the Company into Delaware) is
approved, the name change will be affected by virtue of the merger described in
Proposal No. 5. If Proposal No. 5 is not approved by the shareholders but if
this Proposal is approved by the shareholders, an amendment to the Company's
articles of incorporation will be filed in a form similar to that attached as
Exhibit C, to effect the name change as promptly as practicable.
VOTE REQUIRED
The affirmative vote of a majority of the outstanding shares of Common
Stock is necessary for the approval of this Proposal 3.
RECOMMENDATION OF THE BOARD OF DIRECTORS
The Board of Directors recommends that shareholders vote "FOR" the
proposal to change the Company's name.
PROPOSAL NO. 4
AMENDMENT TO CERTIFICATE OF INCORPORATION
TO INCREASE AUTHORIZED CAPITAL STOCK
On December 1, 1995, the Board of Directors unanimously approved and
recommends that the Company's shareholders consider and approve an amendment to
Article III of the Company's Articles of Incorporation (the "Charter") that
would increase the number of authorized shares of the Company's Common Stock
from 20,000,000 shares to 50,000,000 shares.
At December 1, 1995, the Company had 16,672,493 shares of Common Stock
issued and outstanding. In addition, as of the close of business on December
1, 1995, 2,922,759 shares of Common Stock were reserved for issuance upon
conversion of outstanding stock option agreements under the Company's existing
stock option plans and upon the exercise of certain conversion rights under
other agreements which have been entered into by the Company. Accordingly, on
December 1, 1995,
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there was an aggregate of 404,748 authorized shares of Common Stock unissued,
unreserved for issuance and otherwise available for issue by the Company. The
Charter does not authorize the Company to issue preferred stock.
The proposed increase in the authorized Common Stock has been
recommended by the Board of Directors to assure that an adequate supply of
authorized, unissued shares is available for general corporate needs and to
provide the Board the necessary flexibility to issue Common Stock in connection
with acquisitions, merger transactions or financings without the expense and
delay incidental to obtaining shareholder approval of any amendment to the
Charter at the time of such action, except as may be required for a particular
issuance by applicable law or by the rules of any stock exchange on which the
Company's securities may then be listed. While the additional authorized
shares of Common Stock may be used for such purposes as raising additional
capital or the financing of an acquisition or business combination, the Company
currently has no plans or arrangements related to the issuance of any of its
currently available authorized but unissued Common Stock or any of the
additional shares of Common Stock proposed to be authorized by the amendment to
the Charter. Such shares would, however, be available for issuance without
further action by the shareholders, unless required by applicable law. The
Common Stock is traded in the over-the-counter market in the NASDAQ Small Cap
System which does not impose shareholder approval requirements for an increase
in the number of outstanding shares of the Common Stock.
The additional shares of Common Stock for which authorization is sought
would be identical to the shares of the Common Stock of the Company now
authorized. Holders of Common Stock do not have preemptive rights to subscribe
for additional securities which may be issued by the Company. The issuance of
additional shares of Common Stock may, among other things, have a dilutive
effect on the earning per share and on the equity and voting power of existing
holders of Common Stock and may adversely affect the market price of the Common
Stock.
Although the Board of Directors has no present intention of issuing
additional shares for such purposes, the proposed increase in the number of
authorized shares of Common Stock could enable the Board of Directors to render
more difficult or discourage an attempt by another person or entity to obtain
control of the Company. Such additional shares could be issued by the Board in
a public or private sale, merger or similar transaction, increasing the number
of outstanding shares and thereby diluting the equity interest and voting power
of a party attempting to obtain control of the Company. The increase in the
authorized shares of Common Stock has not, however, been proposed for an
anti-takeover-related purpose and the Board of Directors and Management has no
knowledge of any current efforts to obtain control of the Company or to effect
large accumulations of its Common Stock.
The Charter does not provide for cumulative voting. As a result, in
order to be ensured of representation on the Board, a shareholder must control
the votes of a majority of the shares present and voting at a shareholder's
meeting at which a quorum is present
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The lack of cumulative voting requires an entity seeking a takeover to acquire a
substantially greater number of shares to ensure representation on the Board
than would otherwise be necessary were cumulative voting available.
Certain provisions of the Company's By-Laws could also have the effect
of deterring takeover attempts because of the procedural provisions contained
therein. The By-Laws provide that special shareholder meetings may be called
only by the President of the Company, or by a majority of the Board of
Directors. In addition, except as otherwise required by law, the By-Laws limit
the business that may be transacted at a special meeting of shareholders to the
matters specified in the notice of such special meeting.
The Proposal is not part of any plan by the Management to adopt a
series of amendments to its Charter or By-Laws so as to render the takeover of
the Company more difficult. Moreover, the Company is not submitting this
Proposal to enable it to frustrate any efforts by another party to acquire a
controlling interest or to seek Board representation.
The Company believes that the proposed amendment to Article III of the
Charter will provide several long-term advantages to the Company and its
shareholders. The passage of the Proposal might enable the Company to pursue
acquisitions or enter into transactions which Management believes provide the
potential for growth and profit. If additional authorized shares are
available, transactions dependent upon the issuance of additional shares will
be less likely to be undermined by delays and uncertainties occasioned by the
need to obtain shareholder authorization prior to consummation of such
transactions. The ability to issue shares, as deemed in the Company's best
interests by the Board, will also permit the Company to avoid the expenses
which are incurred in holding certain shareholders meetings.
If the Proposal is adopted, the Charter will be amended to delete
Article III in its entirety and replace same with the following:
"THIRD": The aggregate number of shares of capital stock which the
Corporation shall have the authority to issue is 50,000,000 shares of common
stock at $.01 par value per share."
However, if Proposal 5 is adopted, the increased and authorized shares
of Common Stock will happen without the need for an amendment to the Charter as
the certificate of incorporation of the entity into which the Company will be
merged pursuant to such Proposal will have authorized 50,000,000 shares of
Common Stock $.01 per share par value.
VOTE REQUIRED
The affirmative of the holders of a majority of the issued and
outstanding shares is required to approve this Proposal 4.
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RECOMMENDATION OF THE BOARD OF DIRECTORS
The Board of Directors recommends that the shareholders vote FOR the
proposed increase in the authorized capital stock of the Company.
MARKET PRICE DATA
The Common Stock is traded in the over-the-counter market and are
currently traded in the NASDAQ System under the symbol "ABCC". On January 10,
1996, the last full trading date prior to the printing and mailing of this
Proxy Statement, the reported closing high and low bid price for the Common
Stock on the NASDAQ System was $2.625 and $2.625, respectively. Shareholders
are urged to obtain current market quotations for the shares of the Company's
Common Stock.
PROPOSAL NO. 5
REINCORPORATION IN DELAWARE
GENERAL.
The Board of Directors has unanimously approved, and recommends for
shareholder approval, the change of the Company's state of incorporation from
Florida to Delaware. The transaction will not result in any change in the
business, management, assets, liabilities or net worth of the Company.
Reincorporation in Delaware will allow the Company to take advantage of certain
provisions of the corporate laws of Delaware. The purposes and effects of the
proposed transaction are summarized below.
In order to effect the Company's reincorporation in Delaware, the
Company will be merged into ABC Dispensing Technologies, Inc. ("ADT"), a newly
formed, wholly-owned subsidiary of the Company incorporated in Delaware. ADT
has not engaged in any activities except in connection with the proposed
transaction. The mailing address of its principal executive offices and its
telephone number are the same as those of the Company. As part of its approval
and recommendations of the Company's reincorporation in Delaware, the Board has
approved, and recommends to the Stockholders for their adoption and approval,
an Agreement and Plan of Merger (the "Reincorporation Agreement") pursuant to
which the Company will be merged with and into ADT. The full texts of the
Reincorporation Agreement and the Certificate of Incorporation and By-Laws of
the successor Delaware company under which the Company's business would be
conducted after the merger are set forth as Exhibits B, C and D, respectively,
hereto. The discussion contained in this Proxy Statement is qualified in its
entirety by reference to such Exhibits.
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In the following discussion of the proposed reincorporation, the term
"Company" includes either or both, American Business Computers Corporation
("ABCC") and ADT as the context may require, without regard to the state of
incorporation.
Upon shareholder approval of the reincorporation, and upon approval of
appropriate certificates of merger by the Secretaries of State of the States
of Florida and Delaware, ABCC will be merged with and into ADT pursuant to the
Reincorporation Agreement, resulting in a change in the Company's state of
incorporation. The Company will then be subject to the Delaware General
Corporation Law ("DGCL") and the Certificate of Incorporation and By-laws set
forth as Exhibit C and Exhibit D, respectively. Upon the effective time of the
reincorporation, each outstanding share of Common Stock and each share of
Common Stock held in the treasury of ABCC automatically will be converted into
one share of common stock of ADT. Outstanding options to purchase shares of
Common Stock will be converted into options to purchase the same number of
shares of Common Stock of ADT. Each employee stock plan and any other employee
benefit plan to which ABCC is a party, whether or not such plan relates to the
Common Stock, will be assumed by ADT and, to the extent any such plan provides
for the issuance or purchase of Common Stock, it will be deemed to provide for
the issuance or purchase of shares of common stock of ADT.
IT WILL NOT BE NECESSARY FOR STOCKHOLDERS OF THE COMPANY TO EXCHANGE
THEIR EXISTING STOCK CERTIFICATES FOR CERTIFICATES OF ADT; OUTSTANDING STOCK
CERTIFICATES OF ABCC SHOULD NOT BE DESTROYED OR SENT TO THE COMPANY. The common
stock of the Company will continue to be traded on the "Pink Sheets" and the
"OTC Bulletin Board" will consider the exiting stock certificates as
constituting "good delivery" in transactions subsequent to the reincorporation.
PRINCIPAL REASONS FOR CHANGING THE COMPANY'S STATE OF
INCORPORATION.
The Company's Board of Directors believes that the reincorporation will
provide flexibility for both the management and business of the Company.
Delaware is a favorable legal and regulatory environment in which to
operate. For many years, Delaware has followed a policy of encouraging
incorporation in that state and, in furtherance of that policy, has adopted
comprehensive, modern and flexible corporate laws which are periodically
updated and revised to meet changing business needs. As a result, many major
companies have initially chosen Delaware for their domicile or have
subsequently reincorporated in Delaware. The Delaware courts have developed
considerable expertise in dealing with corporate issues, and a substantial body
of case law has developed construing Delaware law and establishing public
policies with respect to Delaware companies thereby providing greater
predictability with respect to corporate legal affairs.
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Delaware law is more familiar to lenders and investors, and therefore
may provide the Company a more favorable legal environment in which to seek
additional financing. Because Delaware corporate law is more predictable and
familiar to lenders and investors than is Florida corporate law, and because
Delaware courts have substantially greater experience in handling matters of a
corporate nature, the Board of Directors believes that changing the Company's
domicile from Florida to Delaware would make the Company more attractive to new
and existing shareholders, lenders and investors. The Board of Directors and
Management believe that the Merger will provide flexibility for both the
management and business of the resulting Company. As a Delaware company, the
Company would qualify for the provisions of Section 203 of the DGCL (the
"Delaware Business Combinations Statute"), which regulates certain business
combinations between a company and an "Interested Stockholder" thereof.
The Board of Directors has determined that the most practical and
economical means of reincorporating the Company in the State of Delaware would
be through a reincorporation merger of the Company with and into a wholly-owned
subsidiary of the Company incorporated in Delaware. Merger with a wholly-owned
subsidiary is the usual means of reincorporation in another jurisdiction, since
it is inexpensive to accomplish and will qualify as a tax-free reorganization.
Since a reincorporation merger is the usual and most practical and economical
means of reincorporating the Company in Delaware, it was the only alternative
considered by the Board of Directors. While the reincorporation proposal is
not being recommended in response to any specific effort of which the Company
is aware to accumulate the Company's shares or to obtain control of the
Company, the Board believes that the provisions of the Delaware Business
Combinations Statute will enhance the Board's ability to assure more equitable
treatment of the Company's shareholders in the event of a possible takeover
attempt. For a description of the Delaware Business Combinations Statute, see
"The Delaware Business Combinations Statute," below.
THE DELAWARE BUSINESS COMBINATIONS STATUTE.
The Delaware Business Combinations Statute prohibits certain
transactions between a Delaware company and an "Interested Stockholder," which
is defined as a person (including such person's affiliates and associates) that
is directly or indirectly a beneficial owner of 15% or more of the voting power
of the outstanding voting stock of a Delaware company and such person's
affiliates and associates. This provision prohibits certain business
combinations (defined broadly to include mergers, consolidations, sales or other
dispositions of assets having an aggregate value in excess of 10% of the
consolidated assets of a company, and certain transactions that would increase
the Interested Stockholder's proportionate share ownership in a company) between
an Interested Stockholder and a company for a period of three years after the
date the Interested Shareholder acquired its stock, unless (i) the business
combination is approved by such company's board of directors prior to the date
the Interested Stockholder acquired its shares, (ii) the Interested Shareholder
acquired at least 85% of the voting stock of such company in the transaction in
which it became an Interested Stockholder, or (iii) the
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business combination is approved by a majority of the board of directors and the
affirmative vote of two-thirds of the votes entitled to be cast by disinterested
Stockholders at an annual or special meeting.
If the reincorporation is consummated, the Delaware Business
Combinations Statute will apply to the Company. The effect of the application
of the Delaware Business Combinations Statute would be to reduce the likelihood
of situations in which the Company may be forced to accept a proposal for the
takeover of the Company without ample time to evaluate the proposal and
appropriate alternatives and to encourage anyone contemplating a transaction
with the Company to negotiate directly with the Company on a fair and equitable
basis. The application of the Delaware Business Combinations Statute could make
more difficult or discourage a tender offer for the Common Stock or the
completion of a "second step" merger by a holder of a substantial block of the
Common Stock, irrespective of whether such action might be perceived by
stockholders holding a majority of the Common Stock to be beneficial to the
Company and its stockholders.
The application of the Delaware Business Combinations Statute could
adversely affect the ability of stockholders to benefit from certain
transactions which are opposed by the Board or by stockholders owning 15% of
the Common Stock, even if the price offered in such transactions represents a
premium over the then current market price of the Common Stock. To the extent
that the Board's disapproval of a proposed transaction discourages
establishment of a controlling stock interest, the position of the Board and
current management may be strengthened, thereby assisting those persons in
retaining their positions.
On balance, however, the Board believes that the Company's becoming
subject to the provisions of the Delaware Business Combinations Statute will be
in the best interests of the Company and its shareholders. In recent years
there have been a number of surprise takeovers of publicly owned companies.
These transactions have occurred through tender offers or other sudden purchases
of a substantial number of outstanding shares. Frequently, these tender offers
and other share purchases have been followed by a merger or other form of
complete acquisition of the target company by the purchaser without any
negotiations with the Board of Directors of the target company. Such a "second
step" business combination automatically eliminates minority interests in the
target company, often for less valuable consideration per share than was paid in
the purchaser's original tender offer or market purchases. In other instances, a
purchaser has used its controlling interest to effect other transactions having
an adverse impact on the target company and its shareholders. The protections
afforded by the Delaware Business Combinations Statute will increase the
likelihood that anyone contemplating a transaction with the Company would
negotiate directly with the Company in advance. The Board believes that it is in
a better position than the individual stockholders of the Company to negotiate
effectively for an adequate price for all the Stockholders, since the Board is
likely to be more knowledgeable than any individual Stockholder in assessing the
business and prospects of the Company.
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EFFECTS ON THE COMPANY.
The business and internal affairs of the Company will be governed by
Delaware law. ADT's Certificate of Incorporation and By-Laws will change the
current capital structure of the Company (see "Capitalization" below), provide
for greater limitations on the personal liability of directors to the Company
and its stockholders, provide expanded indemnification provisions, require that
Stockholders desiring to submit nominees for election as directors or to
introduce business at an annual meeting comply with certain notice provisions,
and will allow the Board of Directors of the Company, in addition to the
stockholders, to adopt, amend or repeal the By-Laws. The reincorporation will
not result in any change in the business, management, assets, liabilities or
net worth of the Company. If the Reincorporation Agreement is approved, the
Board of Directors of the Company will be comprised of the same five members
elected at the Meeting to comprise the Company's Board of Directors. The
directors elected in connection with the current Proposal for election of
Company directors will serve until the next Annual Meeting of the Stockholders
of the Company, until their respective successors are elected and qualified.
The By-Laws of ADT allow a maximum of 9 directors. ADT will also have the same
executive officers as did the Company prior to the reincorporation.
The Board of Directors has carefully considered the potential adverse
effects of being subject to the Delaware Business Combinations Statute
described above and has unanimously concluded that the adverse effects are
substantially outweighed by the increased protection which the statute will
afford the Company and its stockholders.
CAPITALIZATION.
The Certificate of Incorporation of ADT authorizes the issuance of
50,000,000 shares of common stock, par value $.01 per share. Currently ABCC is
authorized to issue 20,000,000 shares of common stock, par value $.01 per
share.
The reincorporation into Delaware will have the effect of increasing
the authorized Common Stock of the Company from 20,000,000 to 50,000,000
shares. For a discussion regarding the reasons for the increase in the
authorized number of shares of Common Stock, see Proposal No. 4 "Amendment to
Certificate of Incorporation to Increase Authorized Capital Stock" herein.
COMPARATIVE RIGHTS OF SHAREHOLDERS
Upon consummation of the Merger, holders of the Common Stock will
become holders of ADT Common Stock and the rights of former Company
shareholders will be governed by ADT's Certificate of Incorporation, ADT's
By-Laws and the DGCL.
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Shareholders should note the following significant differences between
the DGCL and the Florida Business Corporation Act (the "FBCA") as they affect
the rights of shareholders. The following comparison of the DGCL and ADT's
Certificate of Incorporation and By-Laws, on the one hand, and the FBCA and the
Company's Articles of Incorporation and By-Laws, on the other, is not intended
to be complete and is qualified in its entirety by reference to ADT's
Certificate of Incorporation and By-Laws and the Company's Articles of
Incorporation and By-Laws. Copies of ADT's Certificate of Incorporation and
By-Laws are attached hereto as Exhibits C and D, respectively. Copies of the
Company's Articles of Incorporation and By-Laws are available for inspection at
the offices of the Company and copies will be sent to the holders of the Common
Stock upon request.
DISTRIBUTIONS TO SHAREHOLDERS
A Delaware corporation may pay dividends out of surplus or, if there is
no surplus, out of net profits for the fiscal year in which declared or for the
preceding fiscal year. A Florida corporation may make distributions to
shareholders as long as, after giving effect to such distribution, the
corporation will be able to pay its debts as they become due in the usual
course of business and the corporation's total assets will not be less than the
sum of its total liabilities plus (unless the articles of incorporation permit
otherwise) the amount that would be needed, if the corporation were to be
dissolved at the time of the distribution, to satisfy the preferential rights
upon dissolution of shareholders whose preferential rights are superior to
those receiving the distribution.
DISSENTER'S RIGHTS
The DGCL provides that dissenting stockholders who follow prescribed
statutory procedures are entitled to appraisal rights in the case of a merger
of a corporation, except that such rights are not provided when (i) no vote of
the stockholders is required for the merger or (ii) shares of the corporation
are listed on a national securities exchange or held by more than 2,000
stockholders and are to be exchanged solely for shares of stock of another
corporation which are listed on a national securities exchange or held by more
than 2,000 stockholders.
The FBCA provides appraisal rights in connection with (i) a merger,
except that such rights are not provided when (a) no vote of the shareholders
is required for the merger or (b) shares of the corporation are listed on a
national securities exchange, traded on the Nasdaq National Market System, or
held of record by fewer than 2,000 shareholders; (ii) a sale of substantially
all the assets of a corporation (with similar restrictions as provided under
the DGCL for mergers); (iii) amendments to the articles of incorporation that
may adversely affect the rights or preferences of shareholders; and (iv) a
Control Share Acquisition (as described below).
The shares of the Company are not presently listed on a national
securities exchange and, as of December 31, 1995, were held by approximately
750 shareholders of record.
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STATE TAKEOVER LAWS
The Delaware Business Combinations Statute is described above. (See
"The Delaware Business Combination Statute").
Section 607.0901 of the FBCA, informally known as the "Fair Price
Statute," provides that the approval of the holders of two-thirds of the voting
shares of a company, other than the shares owned by an Interested Stockholder
(as hereinafter defined) would be required in order to effectuate certain
transactions, including, without limitation, a merger, sale of assets, sale of
shares and reclassification of securities involving a corporation and an
Interested Shareholder (an "Affiliated Transaction"). An "Interested
Shareholder" is defined under the FBCA as the beneficial owner of more than 10%
of the voting shares outstanding. The foregoing special voting requirement is
in addition to the vote required by any other provision of the FBCA or a
corporation's articles of incorporation.
The special voting requirement does not apply in any of the following
four circumstances: (i) the Affiliated Transaction is approved by a majority of
the corporation's disinterested directors; (ii) the Interested Shareholder has
beneficially owned 80% of the corporation's voting shares for five years; (iii)
the Interested Shareholder beneficially owns 90% of the corporation's voting
shares; or (iv) all of the following conditions are met: (A) the cash and fair
value of other consideration to be paid per share to all holders of voting
shares equals the highest per share price calculated pursuant to various
methods set forth in Section 607.091 of the FBCA, (B) the consideration to be
paid in the Affiliated Transaction is in the same form as previously paid by
the Interested Shareholder, and (C) during the portion of the three years
preceding the announcement date that the Interested Shareholder has been an
Interested Shareholder, except as approved by a majority of the disinterested
directors, there shall have been no default in payment of preferred stock
dividends, no decrease in common stock dividends, no increase in the voting
shares owned by the Interested Shareholder, and no benefit to the Interested
Shareholder from loans, guaranties or other financial assistance or tax
advantages provided by the corporation.
A corporation may "opt out" of the provisions of Section 607.0901 by
electing to do so in its original articles of incorporation or by adopting an
amendment to its articles of incorporation or bylaws opting out and having such
amendment approved by the holders of a majority of the voting shares not held
by the Interested Shareholder, its affiliates or associates. The amendment
will not be effective until 18 months after such vote, and will not apply to
any Affiliated Transaction with someone who is an Interested Shareholder on or
prior to the effective date of the Amendment. The Company has not opted out of
the provisions of Section 607.0901.
A person who inadvertently becomes an Interested Shareholder (for
example, as a result of a corporation's repurchase of some of its shares) may
promptly divest himself of enough stock to go below the 10% threshold so that no
special vote would apply to a
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transaction with that shareholder, so long as such person has not otherwise been
an Interested Shareholder within the five years preceding the first public
announcement of the transaction.
Section 607.0902 of the FBCA, informally known as the "Florida Control
Share Acquisition Statute," provides that the voting rights to be accorded
Control Shares (as defined below) of a Florida corporation that has (i) 100 or
more shareholders, (ii) its principal place of business, its principal office,
or substantial assets in Florida and (iii) either (A) more than 10% of its
shareholders residing in Florida, (B) more than 10% of its shares owned by
Florida residents, or (C) 1,000 shareholders residing in Florida, must be
approved by a majority of each class of voting securities of the corporation,
excluding those shares held by interested persons, before the Control Shares
will be granted any voting rights.
"Control Shares" are defined in the FBCA to be shares acquired in a
Control Share Acquisition (as defined below) that, when added to all other
shares of the issuing corporation owned by such person, would entitle such
person to exercise, either directly or indirectly, voting power within any of
the following ranges: (a) 20% or more but less than 33% of all voting power of
the corporation's voting securities, (b) 33% or more but less than a majority
of all voting power of the corporation's voting securities, or (c) a majority
or more of all of the voting power of the corporation's voting securities. A
"Control Share Acquisition" is defined in the FBCA as an acquisition, either
directly or indirectly, by any person of ownership of, or the power to direct
the exercise of voting power with respect to, outstanding Control Shares.
Section 607.0902 also states that, if provided in the articles of incorporation
or bylaws of a corporation prior to their acquisition, Control Shares may be
redeemed by the corporation for fair value in certain circumstances. Finally,
unless otherwise provided in a corporation's articles of incorporation or
bylaws prior to a Control Share Acquisition, in the event Control Shares are
accorded full voting rights and the acquiring person has acquired Control
Shares with a majority or more of all voting power, all Shareholders shall have
dissenters' rights. Neither the Company's Articles of Incorporation nor
By-Laws provide otherwise.
Section 607.0902 further provides that, in certain circumstances, an
acquisition of shares that otherwise would be governed by its provisions does
not constitute a Control Share Acquisition. Among such circumstances are
acquisitions of shares approved by the corporation's board of directors and
mergers effected in compliance with the applicable provisions of the FBCA, if
the corporation is a party to the agreement of merger.
LIMITATION ON DIRECTOR'S LIABILITY
In accordance with the DGCL, ADT's Certificate of Incorporation
provides that the directors of the Company shall not be personally liable to
the Company or its stockholders for monetary damages for breach of fiduciary
duty as a director except (i) for any breach of the director's duty of loyalty
to the Company and its stockholders; (ii) for acts or omissions not in good
faith or which
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involve intentional misconduct, or knowing violations of law; (iii) under
Section 174 of the DGCL, which relates to unlawful payments of dividends and
unlawful stock repurchases and redemptions; or (iv) for any transaction from
which the director derived an improper personal benefit. This provision does
not eliminate a director's fiduciary duties; it merely eliminates the
possibility of damage awards against a director personally which may be
occasioned by certain unintentional breaches (including situations that may
involve grossly negligent business decisions) by the director of those duties.
The provisions have no effect on the availability of equitable remedies, such as
injunctive relief or rescission, which might be necessitated by a director's
breach of his or her fiduciary duties. However, equitable remedies may not be
available as a practical matter where transactions (such as merger transactions)
have already been consummated. The inclusion of this provision in ADT's
Certificate of Incorporation may have the effect of reducing the likelihood of
derivative litigation against directors, and may discourage or deter
stockholders or management from bringing a lawsuit against directors for breach
of their duty of care, even though such an action, if successful, might
otherwise have benefited the Company and its stockholders.
The FBCA provides that directors of a corporation will not be
personally liable for monetary damages for breach of their fiduciary duty as
directors, except in certain specified circumstances. Those circumstances
involve either: (i) a violation of the criminal law; (ii) a transaction from
which the director derived an improper personal benefit; (iii) an unlawful
payment of a dividend or unlawful stock repurchase or redemption; (iv) in a
derivative proceeding or one by or in the right of a shareholder, conscious
disregard for the best interests of the corporation or willful misconduct; or
(v) in a proceeding by or in the right of someone other than the corporation or
a shareholder, recklessness or an act or omission that was committed in bad
faith, with malicious purpose or in a manner exhibiting wanton and willful
disregard of human rights, safety or property.
CALLING A SPECIAL MEETING OF SHAREHOLDERS
Under the DGCL, a special meeting of shareholders can be called by the
corporation's Board of Directors or by such person or persons as may be
authorized by the corporation's certificate of incorporation or bylaws. ADT's
Certificate of Incorporation does not authorize any person to call a special
meeting of shareholders. ADT's Bylaws, however, provide that a special meeting
may be called by the Chairman of the Board, deputy chairman (if any), president
or the Board.
The FBCA provides that a special meeting of shareholders can be called
by (i) a corporation's Board of Directors; (ii) the persons authorized by the
articles of incorporation or bylaws; or (iii) the holders of not less than 10%
of all votes entitled to be cast on any issue to be considered at the proposed
special meeting. A corporation's articles of incorporation can require a
higher percentage of votes, up to a maximum of 50% to call a special meeting of
shareholders. ABCC's Articles of Incorporation do not include any such
provision.
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AMENDMENTS TO BYLAWS
Under the DGCL, directors can amend the bylaws of a corporation only if
such right is expressly conferred upon the directors in its certificate of
incorporation. ADT's Certificate of Incorporation provides its directors with
such authority. Under the FBCA, a corporation's board of directors may amend
or repeal the bylaws unless such power is expressly reserved to the
shareholders in the articles of incorporation or the FBCA or the shareholders
expressly provide, in amending or repealing all or any part of the bylaws, that
the board of directors may not amend or repeal the affected bylaws.
MERGER WITH SUBSIDIARY
Under the DGCL, a parent corporation may merge into itself, without
shareholder approval, a subsidiary of which it owns at least 90% of the
outstanding shares of each class of stock. The FBCA permits such a merger of a
subsidiary without shareholder approval if 80% of each class of stock of the
subsidiary is owned by the parent corporation.
REMOVAL OF DIRECTORS; FILING VACANCIES ON THE BOARD OF DIRECTORS.
Under Delaware law, any director or the entire board of directors
generally may be removed, with or without cause, by the holders of a majority
of the shares entitled to vote at an election of directors. Under the FBCA,
shareholders may remove one or more directors with or without cause, unless the
articles of incorporation provide that directors may be removed only with
cause, at a meeting of the shareholders called expressly for that purpose.
ABCC's Articles of Incorporation do not refer to removal of Directors.
Under the ADT By-Laws, newly created directorships resulting from any
increase in the number of directors or any vacancies on the Board of Directors
may be filled by the affirmative vote of a majority of the directors then in
office. In addition, the ADT By-laws provide that the directors elected to
fill vacancies on the Board of Directors will serve for the unexpired portion
of the term of the director whose place has been filled, and a director elected
by the Board of Directors of the ADT to fill a newly created directorship
resulting from an increase in the number of directors will hold office until
the next election of directors.
The ABCC By-laws provide that vacancies on the Board of Directors will
be filled by a majority vote of the Board of Directors or by a vote of
shareholders.
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AMENDMENT OR REPEAL OF THE CERTIFICATE.
Under Delaware law, unless the certificate of incorporation otherwise
provides, amendments of the certificate of incorporation generally require the
approval of the holders of a majority of the outstanding stock entitled to vote
thereon, and if the amendment would increase or decrease the number of
authorized shares of any class or series or the par value of such shares or
would adversely affect the rights, powers or preferences of such class or
series, a majority of the outstanding stock of such class or series also would
have to approve the amendment. The ADT certificate does not provide otherwise.
Except with regard to minor amendments, all amendments to the Articles
of Incorporation of a Florida corporation must be approved by the majority of
all the votes entitled to be cast by that voting group, unless the Articles
require a greater or lesser vote. The ABCC Articles do not provide otherwise.
VOTE REQUIRED FOR MERGERS.
The FBCA provides that the sale, lease, exchange or disposal of all, or
substantially all, of the assets of a Florida corporation, not in the ordinary
course of business, as well as any merger, consolidation or share exchange,
generally must be recommended by the Board of Directors and approved by a vote
of a majority of the shares of each class of the stock of the corporation
entitled to vote on such matters. Under the FBCA, the vote of the shareholders
of a corporation surviving a merger is not required if: (i) the articles of
incorporation of the surviving corporation will not substantially differ from
its articles before the merger; and (ii) and each shareholder of the surviving
corporation before the effective date will hold the same number of shares, with
identical designations, preferences, limitations and relative rights
immediately after the merger. Delaware law has similar provision for
stockholder approval required in the case of the disposition of assets or a
merger or a share exchange.
STOCK REPURCHASES.
Both Delaware and Florida corporations may generally purchase or redeem
their own shares of capital stock.
SHAREHOLDER RECORDS.
Under Florida and Delaware law, any Shareholder with a proper purpose
may demand inspection.
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CORPORATE ACTION WITHOUT A SHAREHOLDER MEETING.
Delaware law permits corporate action without a meeting of Stockholders
upon the written consent of the holders of that number of shares necessary to
authorize the proposed corporate action being taken, unless the certificate of
incorporation expressly provides otherwise. There is no such provision in the
ADT Certificate of Incorporation. The FBCA and ABCC's By-Laws provide for
similar shareholder actions without a meeting.
RIGHTS AND OPTIONS.
Delaware and Florida law does not require shareholder approval of such
plans, although various other applicable legal requirements, such as rules of
the Securities and Exchange Commission, may make shareholder approval of
certain rights or option plans necessary or desirable.
PURPOSES AND EFFECTS OF CERTAIN PROVISIONS OF THE CERTIFICATE OF INCORPORATION
AND BY-LAWS OF ADT
The ADT Certificate of Incorporation contains several provisions that
may have an anti-takeover impact and may make tender offer, proxy contests and
certain mergers more difficult. These include provisions (i) providing for the
amendment of the Company By-Laws by the Board of Directors of the Company or by
the action of 66% of the total voting power of all shares of stock entitled
to vote in the election of directors; and (ii) providing that only a majority
of the Board of Directors of the Company or a committee appointed by the Board
of Directors of the Company for such purpose may call a special meeting of
stockholders. The ADT By-Laws contain additional provisions that may have an
anti-takeover impact by making proxy contests more difficult. The ADT By-Laws
contain restrictions on the procedures by which stockholders may nominate
persons for election to the Board of Directors and the procedures by which
stockholders may properly bring business before annual meetings of
stockholders.
LIMITATION OF DIRECTORS' LIABILITY.
The ADT Certificate of Incorporation contains a provision Article SIXTH
that eliminates a director's liability for monetary damage for breaches of
fiduciary duty of care, subject to certain exceptions described below (the
"Liability Provision").
The Delaware legislature enacted an amendment to the DGCL in 1985
allowing provisions such as the Liability Provision as a response to changes in
the market for directors' liability insurance. The proliferation of shareholder
derivative and class action suits for breaches of directors' fiduciary duties
has in large part made it difficult to obtain liability insurance. Thus, the
Delaware legislature amended the DGCL in order to maintain qualified and able
directors to govern companies.
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The Liability Provision does not relieve a director of monetary
liability for breaches of the duty of loyalty, acts or omissions not in good
faith or involving intentional misconduct or knowing violations of law, the
unlawful repurchase or redemption of stock or payment of unlawful dividends or
any transaction from which a director derives an improper personal benefit.
Thus, liability for monetary damages will still exist under the Liability
Provision if liability is based upon one of these grounds. The Liability
Provision will have no effect on the availability of equitable remedies, such
as an injunction or rescission for the breach of a director's fiduciary duty,
and will in no way limit or otherwise affect liability for violation of the
federal securities laws.
The Liability Provision does not eliminate the liability of directors
of the Company for monetary damages arising out of the directors' breach of
their fiduciary duty of care. The duty of care refers to the fiduciary duty of
directors to be sufficiently diligent and careful in considering a transaction
or taking or refusing to take some corporate action. Liability for a breach of
the duty of care arises when directors have failed to exercise sufficient care
in reaching decisions and otherwise attending to their responsibilities as
directors. The Liability Provision does not eliminate the duty of care; it only
eliminates monetary damage awards occasioned by a breach of that duty in
certain circumstances. Thus a breach of the duty of care remains a valid basis
for a suit seeking to stop a proposed transaction from occurring. After the
transaction has occurred, however, the stockholders would no longer have a
claim for monetary damages based on a breach of the duty of care even if that
breach involved gross negligence on the part of the directors.
The Liability Provision's coverage extends only so far as is legally
permitted. If the courts or the Delaware legislature narrow or expand the
coverage of the amendment to the DGCL, the Liability Provision will likewise be
narrowed or expanded without further stockholder action. Under present law,
however, any subsequent change to the actual wording of the Liability Provision
will require a stockholder vote, notwithstanding new legislation or
interpretations.
In the event that a stockholder desires to commence a derivative or
class action suit against a director for violation of his or her fiduciary duty
of care, the Liability Provision of the ADT Certificate of Incorporation
provides that monetary damages will not be payable by the director, subject to
the exceptions set forth above, even if such violation is proved. This means
that directors will not be liable for monetary damages for grossly negligent
business decisions, including decisions taken in connection with merger
proposals, negotiations and other substantive matters affecting the Company and
its stockholders, unless one of the exceptions set forth in the
statute applies.
AMENDMENT OF THE BY-LAWS AND CERTAIN PROVISIONS OF THE CERTIFICATE OF
INCORPORATION OF ADT.
The provisions requiring the affirmative vote of the holders of 66% or
more of the total voting power of all shares of stock entitled to vote in the
election of directors to amend certain provisions of the ADT Certificate of
Incorporation (including the provisions relating to the number, term and
removal of directors) and any provision of the ADT By-laws will make it more
difficult
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for Stockholders to make changes in the ADT Certificate of Incorporation and ADT
By-Laws, including changes designed to facilitate the exercise of control over
the Company. The requirement for a 66% stockholder vote will enable the holders
of a minority of the Company's stock to prevent the holders of a majority or
more of the stock from amending such provisions of the ADT Certificate of
Incorporation and ADT By-Laws. In addition, the requirement for a 66% vote may
be difficult to obtain because at least 66% of the Company's outstanding voting
stock must be present or represented by proxy at any meeting at which any such
amendment is proposed and must vote in favor of the amendment.
The ADT Certificate of Incorporation also provides that the directors
as well as the Stockholders have the right to amend the ADT By-Laws. Article
TENTH of the ADT Certificate of Incorporation expressly authorizes the Board of
Directors to make, alter, or repeal the ADT By-Laws.
THE SHAREHOLDER MEETING PROVISION.
The ADT Certificate of Incorporation Article ELEVENTH and the ADT
By-Laws Article 11 provide that stockholders of the Company may not call a
special meeting of stockholders (the "Stockholder Meeting Provision").
The Stockholder Meeting Provision may make it more difficult for
Stockholders to take actions which require a meeting of Stockholders unless the
Company's Board of Directors or a Committee of the Company's Board of Directors
calls such a meeting. The Company's Board of Directors believes that it is in
the best position to determine those issues which are properly the subject of a
special meeting of Stockholders. Although the Stockholder Meeting Provision has
the effect of delaying Stockholder consideration of a proposal over opposition
of the Company's Board of Directors, the Company's Board of Directors believes
that Stockholders are provided a full opportunity to make proper proposals at
duly convened Shareholder meetings and to request that any such proposal be
presented for consideration to other Stockholders in the Company's annual proxy
statement.
Under Delaware law, special meetings of Stockholders of a Company may
be called by the Company's board of directors or by such persons as may be
authorized by a Company's certificate of Incorporation or By-laws.
FEDERAL TAX CONSEQUENCES.
In the opinion of Robinson, St. John & Wayne, special Counsel to the
Company, the merger which will take place in connection with the
Reincorporation should, under current law, constitute a tax-free reorganization
under Section 368 of the Internal Revenue Code of 1986, as amended (the
"Code"). In rendering such opinion, such counsel has relied upon
representations contained in
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certificates of the Company. No ruling has been or is expected to be requested
from the Internal Revenue Service ("IRS") as to the tax consequences of such
merger. Since no ruling has been obtained, no assurance can be given that the
IRS will agree with the conclusions of counsel or that a challenge by the IRS,
if made, will not be successful.
Assuming that the reincorporation constitutes a tax-free
reorganization, the federal income tax consequences to the Company and its
stockholders are as follows: No gain or loss will be recognized to ABCC or ADT
as a result of this transaction. No gain or loss will be recognized to
shareholders who exchange their ABCC shares solely for ADT shares.
Stockholders will have the same tax basis in the shares of ADT received in this
transaction as the basis in the shares of ABCC exchanged therefor, and the
holding period of the shares of ADT will include the period during which the
shares of ABCC were held, provided such shares of ABCC were held as capital
assets on the effective date of the reincorporation.
The foregoing summary of federal income tax consequences is included
for general information only and does not address the federal income tax
consequences to all holders, including those who acquired shares of Common
Stock pursuant to the exercise of employee stock options or otherwise as
compensation and those subject to the alternative minimum tax. In view of the
individual nature of tax consequences, shareholders are urged to consult their
own tax advisors as to the specific tax consequences of the reincorporation,
including the application and effect of state, local and foreign income and
other tax laws.
AMENDMENT.
The Reincorporation Agreement may be amended, modified or supplemented
prior to the effective time of the reincorporation upon the approval of the
Board of Directors of ABCC and ADT. However, no amendment, modification or
supplement may be made after the adoption of the Reincorporation Agreement by
the shareholders of ABCC which changes the Reincorporation Agreement in a way
which, in the judgment of the Board of Directors of ABCC, would have a material
adverse effect on the shareholders of ABCC, unless such amendment, modification
or supplement is approved by such shareholders.
TERMINATION.
The Reincorporation Agreement provides that the Board of Directors of
ABCC may terminate the Reincorporation Agreement and abandon the merger
contemplated thereby at any time prior to its effective time, whether before or
after approval by the shareholders of ABCC, if (i) the reincorporation shall
not have received the requisite approval of the shareholders of ABCC or (ii)
the Board of Directors of ABCC determines for any reason in its sole judgment
that the consummation of the transaction would be inadvisable or not in the
best interests of ABCC and its shareholders.
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VOTE REQUIRED.
The affirmative vote of holders of a majority of the issued and
outstanding shares of Common Stock entitled to vote thereon at the Meeting is
required for the ratification of the reincorporation of the Company under the
laws of State of Delaware. Under certain conditions, and by complying with
the specific procedures required by statute and described herein, shareholders
of the Company will have the right to dissent from the Merger, in which event,
if the Merger is consummated, they may be entitled to receive in cash the fair
value of their shares of Common Stock. See "Dissenters' Rights" below.
Recommendation of the Board of Directors.
The Board of Directors recommends a vote FOR the ratification of the
reincorporation of the Company under the laws of the State of Delaware.
DISSENTERS' RIGHTS
The shareholders of ABCC are entitled to exercise dissenters' rights of
appraisal under Sections 607.1301, 607.1302 and 607.1320 of the FBCA ("FBCA"),
(the "Dissenters' Statute"). The dissenters' rights available are summarized
below. The following summary is not intended to be a complete statement of
such rights. The preservation and exercise of dissenters' rights are
conditioned on strict adherence to the applicable provisions of the FBCA and
shareholders of ABCC who desire to exercise dissenters' rights should consult
and study carefully the provisions contained in the Dissenters' Statute and seek
the advice of legal counsel in connection with any decision with respect to the
exercise of dissenters' rights.
Under the Dissenters' Statute, Shareholders have the right to dissent
from adoption of the Reincorporation Agreement and demand payment of the fair
value of their shares. In order to properly exercise this right, each
dissenting ABCC shareholder (i) must give ABCC a written notice of his or her
intent to dissent from the proposal to approve the Reincorporation Agreement
and demand payment for his or her shares if the Merger is effectuated BEFORE
THE VOTE ON THE MERGER AGREEMENT IS TAKEN AT THE ANNUAL MEETING and (ii) MUST
NOT VOTE IN FAVOR OF THE MERGER AGREEMENT. Merely voting against the Merger or
abstaining from voting on the Merger will not satisfy the foregoing
requirements. Any dissenting shareholder who fails to satisfy the foregoing
requirements as they apply to his or her shares will not be entitled to payment
for his or her shares and will be bound by the terms of the Reincorporation
Agreement.
The Company shall deliver a copy of the Dissenters' Statute to each
shareholder simultaneously with a request for his written consent to approve
the Merger or, if such request is not made, within 10 days after the Company
received written consents without a meeting from the requisite number of
Shareholders necessary to authorize the action.
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If the proposed action is approved by the required vote of the Shareholders, the
Company will mail a further notice of such approval to all Shareholders who
delivered a notice of intent to demand payment and refrained from voting in
favor of the proposed action. Within 20 days after the Company delivers the
written notice of the approval to Shareholders, any shareholder who elects to
dissent shall file with the Company a notice of such election, stating his name
and address, the number of shares as to which he dissents and a demand for
payment of the fair value of his shares, and such shareholder shall file an
election to dissent and deposit his certificates [for certificated shares] with
the Company simultaneously with the filing of the election to dissent. A
shareholder who fails to file his notice of election to dissent within the
20-day period will forfeit his dissenters' rights.
Within 10 days after the later to occur of (i) the expiration of the
20-day period in which Shareholders may file their notices of election to
dissent, or (ii) the consummation of the Merger, but in no event later than 90
days from the date the Shareholders approve the transaction, the Company must
make a written offer to each dissenting shareholder, who has filed his notice of
election to dissent within the 20-day period, to pay an amount the Company
estimates to be the fair value for such shares. The Company's written offer
must be accompanied by its most recent balance sheet (the date of which must be
within 12 months of the date of the offer) and a profit and loss statement for
the 12-month period ended on the date of the balance sheet. The dissenting
shareholder shall have 30 days following the Company's offer to accept the
offer. If the offer is accepted, the Company shall pay the agreed to value for
the shares within 90 days of its making the offer, following which the
dissenting shareholder shall cease to have an interest in the shares.
If the Company fails to make its offer within the prescribed period, or
if it makes an offer and the dissenting shareholder fails to accept the same
within the 30 day acceptance period, then the Company, within 30 days after
receipt of a written demand from any dissenting shareholder which is given
within 60 days after the date of the consummation of the Merger, will have the
option to file (within such 60 day period) an action in the appropriate court
in the county where the registered office of the Company is located requesting
that the court determine the fair value of the shares. If the Company fails to
institute the court proceeding, any dissenting shareholder may do so in the
name of the Company. The judgment of the court will be plenary and exclusive
and all dissenters who are made parties will be entitled, after a hearing
without a jury, to judgment for the amount the court determines is the fair
value of the shares which, at the discretion of the court, may include
interest.
While costs and expenses of an appraisal proceeding will generally be
borne by the Company, the court has equitable powers to assess any part of the
costs against all or some of the dissenters who are parties whose action in
failing to accept the Company's offer the court finds to be arbitrary,
vexatious or not in good faith. The court has similar equitable powers to
allocate among the parties the fees and expenses of appraisers appointed by the
court, but not the fees and expenses of counsel or experts employed by any
party.
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THE PROVISIONS OF THE FBCA REGARDING DISSENTERS' RIGHTS ARE TECHNICAL
AND COMPLEX AND ANY ABCC SHAREHOLDER CONTEMPLATING THE EXERCISE OF SUCH RIGHTS
IS URGED TO CONSULT WITH HIS OR HER LEGAL COUNSEL. A COPY OF THE DISSENTERS'
STATUTE IS ATTACHED HERETO AS EXHIBIT E.
INDEPENDENT AUDITORS
The Company's auditors for the fiscal year ended April 29, 1995 were
Ernst & Young, independent certified public accountants. Representatives of
Ernst & Young are expected to be present at the Annual Meeting of Shareholders
and to be available to answer appropriate questions from shareholders.
SHAREHOLDER PROPOSAL
A shareholder of the Company who wishes to present a proposal for
action at the Company's 1996 Annual Meeting of Shareholders must submit such
proposal to the Company, and such proposal must be received by the Company by a
reasonable time before the Company mails its proxy in connection with its 1996
Annual Meeting of Shareholders.
OTHER MATTERS
Management is not aware of any other matters that may come before the
meeting. However, if additional matters come before the meeting, proxies will
be voted at the discretion of the proxy holders.
ANNUAL REPORT
The Annual Report on Form 10-K for the 1995 fiscal year accompanies
this Proxy Statement in the initial mailing to shareholders. The Form 10-K is
not to be regarded as Proxy solicitation material.
William Lerner, Secretary
Akron, Ohio
January 30, 1996
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EXHIBIT A
AMERICAN BUSINESS COMPUTERS CORPORATION
1995 STOCK OPTION PLAN
1. PURPOSES. The purposes of this 1995 Stock Option Plan (the "Plan") are to
attract and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to the Directors and Employees
of the Company or its subsidiaries (as defined in Section 2 below) to whom
Option's may be granted under this Plan, and to promote the success of the
Company's business.
Options granted hereunder may be either "incentive stock options", as
defined in Section 422 of the Internal Revenue Code of 1986, as amended
("ISO's"), or "Non-ISO's", at the discretion of the Board and as reflected in
the terms of the written option agreement.
The Plan is not intended as an agreement or promise of employment.
Neither the Plan, nor any Option granted pursuant to the Plan, shall confer on
any person any right to continue in the employ of the Company. The right of the
Company to terminate an Employee is not limited by the Plan, nor by any Option
granted pursuant to the Plan, unless such right is specifically described by
the terms of any such Option.
2. DEFINITIONS. As used herein, the following definitions shall apply:
(a) "BOARD" shall mean the Committee, if one has been appointed, or
the Board of Directors of the Company, if no Committee is appointed.
(b) "CODE" shall mean the Internal Revenue Code of 1986, as amended.
(c) "COMMITTEE" shall mean the Committee appointed under Section
4(a) hereof, or, in the absence of such appointment, the Board of Directors of
the Company.
(d) "COMMON STOCK" shall mean the Common Stock of the Company.
(e) "COMPANY" shall mean American Business Computers Corporation, a
Florida corporation.
(f) "CONTINUOUS SERVICE OR CONTINUOUS STATUS AS AN EMPLOYEE" shall
mean the absence of any interruption or termination of service as an Employee
or Director. Continuous Status as an
<PAGE> 41
Employee or Director shall not be considered interrupted in the case of sick
leave, military leave, or any other leave of absence approved by the Board.
(g) "DIRECTOR" shall mean any person serving on the Board of
Directors.
(h) "EMPLOYEE" shall mean any person, including officers and
directors, employed by the Company or any Parent or Subsidiary of the Company.
The payment of a director's fee by the Company shall not be sufficient to
constitute "employment" by the Company.
(i) "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934,
as amended.
(j) "FAIR MARKET VALUE" shall mean the closing bid price of the
Company's Common Stock as reported on the National Association of Securities
Dealers Automated Quotation ("NASDAQ") System (or if the Common Stock is not
traded on the NASDAQ system, on the Exchange, Quotation System or Electronic
Bulletin Board which reports or quotes the closing prices for a share of the
Company's Common Stock) for any date (or, if no shares of Common Stock are
traded on such date, for the immediately preceding date on which shares of
Common Stock were traded) as reported in the WALL STREET JOURNAL (or if the
WALL STREET JOURNAL no longer reports such price, any newspaper, trade journal
or quotation service selected by the Committee); or, if no such price quotation
is available, the price which the Committee acting in good faith determines
through any reasonable valuation method that a share of Common Stock might
change hands between a willing buyer and a willing seller, neither being under
any compulsion to buy or to sell and both having reasonable knowledge of the
relevant facts.
(k) "INCENTIVE STOCK OPTION" shall mean an Option intended to
qualify as an incentive stock option within the meaning of Section 422 of the
Code.
(l) "NON-ISO" shall mean an Option granted under the Plan to
purchase stock which is not intended by the Committee to satisfy the
requirements of Section 422 of the Code.
(m) "OPTION" shall mean a stock option granted pursuant to the Plan.
(n) "OPTION PRICE" shall mean the price per Option Share at which
an Option may be exercised.
(o) "OPTIONED STOCK" shall mean the Common Stock subject to an
Option.
(p) "OPTIONEE" shall mean an Employee, Consultant or Director who
receives an Option.
(q) "PARENT" shall mean a "parent corporation", whether now or
hereafter existing, as defined in Section 424(e) of the Code.
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<PAGE> 42
(r) "PLAN" shall mean this American Business Computers Corporation
1995 Stock Option Plan, as amended from time to time.
(s) "RULE 16b-3" shall mean Rule 16b-3 of the General Rules and
Regulations under the Exchange Act.
(t) "SHARE" shall mean a share of the Common Stock, as adjusted in
accordance with Section 11 of the Plan.
(u) "SUBSIDIARY" shall mean a "subsidiary corporation", whether now
or hereafter existing, as defined in Section 424(f) of the Code.
(v) "TEN PERCENT SHAREHOLDER" shall mean a person who owns (after
taking into account the attribution rules of Section 424(d) of the Code) more
than ten percent (10%) of the total combined voting power of all classes of
stock of the Company or a Subsidiary.
3. STOCK AUTHORIZED.
Subject to the provisions of Section 11 of the Plan, the maximum aggregate
number of shares which may be Optioned and sold under the Plan is SEVEN HUNDRED
FIFTY THOUSAND (750,000) shares of authorized, but unissued, or reacquired no
par value Common Stock.
If an Option should expire or become unexercisable for any reason without
having been exercised in full, the unpurchased Shares which were subject
thereto shall, unless the Plan shall have been terminated, become available for
further grant under the Plan.
4. ADMINISTRATION.
(a) PROCEDURE. The Plan shall be administered by a Committee of not less
than two members of the Board of Directors (the "Committee") to be designated
by the Board of Directors of the Company. No member of the Committee shall be
eligible at any time during his or her tenure to receive Options under the
Plan. In addition, no member of the Committee shall have received any Options
under the Plan during the one (1) year period prior to his or her tenure on the
Committee. A majority vote of the members of the Committee shall be required
for all of its actions. The provisions of the immediately preceding two
sentences shall not be applicable to the extent Rule 16b-3 is amended such that
similar requirements are no longer applicable for the exemption offered
thereunder.
A majority of the entire Committee shall constitute a quorum, and the
action of the majority of the Committee members present at any meeting at which
a quorum is present shall be the action of the Committee. All decisions,
determinations, and interpretations of the Committee shall be final and
conclusive on all persons affected thereby and shall, as to Incentive Stock
Options, be consistent with Section 422 of the Code. The Committee shall have
all of the powers and duties set forth
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<PAGE> 43
herein, as well as such additional powers and duties as the Board of Directors
may delegate to it; provided, however, that the Board of Directors expressly
retains the right in its sole discretion (i) to elect and to replace the
members of the Committee, and (ii) to terminate or amend this Plan in any
manner consistent with applicable law. The Board of Directors may from time to
time elect members of the Committee in substitution for and in addition to
members previously elected, may fill vacancies in the Committee, however
caused, and may discharge the Committee. Duly authorized actions of the
Committee shall constitute actions of the Board of Directors for the purpose of
this Plan and the administration thereof. Notwithstanding anything to the
contrary contained herein unless the last sentence of the first paragraph of
Section 4(a) is applicable, no member of the Committee shall serve as such
under this Plan unless such person is a "disinterested person" within the
meaning of Rule 16b-3(c)(2)(i) of the Exchange Act.
(b) POWERS OF THE COMMITTEE. Subject to the provisions of the Plan, the
Committee shall have the authority, in its discretion: (i) to grant Incentive
Stock Options, in accordance with Section 422 of the Code, or to grant
"Non-ISO's"; (ii) to determine the Fair Market Value of the Common Stock; (iii)
to determine the exercise price per share of Options to be granted which
exercise price shall be determined in accordance with Section 8(a) of the Plan;
(iv) to determine the Employees and Directors to whom, and the time or times at
which, Options shall be granted and the number of Shares to be represented by
each Option; (v) to interpret the Plan; (vi) to prescribe, amend and rescind
rules and regulations relating to the Plan; (vii) to determine the terms and
provisions of each Option granted (which need not be identical) and, with the
consent of the holder thereof, modify or amend each Option; (viii) to
accelerate or defer (with the consent of the Optionee) the exercise date of any
Option; (ix) to authorize any person to execute on behalf of the Company any
instrument required to effectuate the grant of an Option previously granted by
the Board; and (x) to make all other determinations deemed necessary or
advisable for the administration of the Plan.
(c) Notwithstanding anything herein to the contrary, no Employee, officer
or Director of the Company or its Parent or Subsidiary shall, as a member of
the Committee or otherwise, have any vote with regard to any option granted to
himself, including, but not limited to:
(i) the time at which any such Option shall be granted;
(ii) the number of Shares covered by any such Option;
(iii) the time or times at which, or the period during which, any
such Option may be exercised or whether it may be exercised in whole or in
installments;
(iv) the provisions of the agreement relating to any such Option; and
(v) the Option Price of Shares subject to an Option granted to him
or her.
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<PAGE> 44
(d) EFFECT OF THE COMMITTEE'S DECISION. All decisions, determinations
and interpretations of the Committee shall be final and binding on all
Optionees and any other holders of any Options granted under the Plan.
5. ELIGIBILITY. Options may be granted only to Employees and to Directors who
are not serving on the Committee, except to the extent provided in the last
sentence of the first paragraph of Section 4(a). Any Employee or Director who
has been granted an Option may, if he is otherwise eligible, be granted an
additional Option or Options.
Each grant of an Option shall be evidenced by an Option Agreement, and
each Option Agreement shall (1) specify whether the Option is an Incentive
Stock Option or a Non-ISO and (2) incorporate such other terms and conditions
as the Committee acting in its absolute discretion deems consistent with the
terms of this Plan, including, without limitation, a restriction on the number
of shares of stock subject to the Option which first become exercisable during
any calendar year.
To the extent that the aggregate Fair Market Value of the stock of the
Company subject to Incentive Stock Options granted to any Optionee which first
become exercisable in any calendar year exceeds $ 100,000, such Options shall
be treated as Non-ISO's. This $100,000 limitation shall be administered in
accordance with the rules under Section 422(d) of the Code.
6. EFFECTIVE DATE AND TERM OF PLAN. The effective date of this Plan
("Effective Date") shall be the date it is adopted by the Board, provided the
shareholders of the Company (acting at a duly called meeting of such
shareholders) approve this Plan within twelve (12) months after such Effective
Date. The effectiveness of Options granted under this Plan prior to the date
such shareholder approval is obtained shall be contingent on such shareholder
approval.
Subject to the provisions of Section 13 hereof, no Option shall be granted
under this Plan on or after the earlier of
(1) the tenth anniversary of the Effective Date of this Plan in which
event the Plan otherwise thereafter shall continue in effect until all
outstanding Options shall have been surrendered or exercised in full or no
longer are exercisable, or
(2) the date on which all of the Common Stock reserved for issuance under
Section 3 of this Plan has (as a result of the exercise or expiration of
Options granted under this Plan) has been issued no longer is available for use
under this Plan, in which event the Plan also shall terminate on such date.
7. TERM OF OPTION. An Option shall expire on the date specified in such
Option, which date shall not be later than the tenth anniversary of the date on
which the Option was granted, except that if any Employee or Director, at any
time an Incentive Stock Option is granted to him, owns stock representing more
than ten
5
<PAGE> 45
percent of the total combined voting power of all such classes of
Common Stock, by reason of the ownership of such classes of stock, directly or
indirectly, by or for any brother, sister, spouse, ancestor or lineal
descendant of such Employee or Director, or by or for any corporation,
partnership, state or trust of which such Employee or Director is a
shareholder, partner or beneficiary), the incentive Stock Option granted him
shall not be exercisable after the expiration of five years from the date of
grant or such earlier expiration as provided in the particular Option
agreement.
8. EXERCISE PRICE AND CONSIDERATION.
(a) The Option Price for the Shares to be issued pursuant to exercise of
an Option shall be such price as is determined by the Committee, but shall be
subject to the following:
(i) In the case of an Incentive Stock Option
(A) granted to an Employee who, immediately before the grant of
such Incentive Stock Option, owns stock (considering attribution under Section
424(d) of the Code) representing more than ten percent (10%) of the voting
power of all classes of stock of the Company or any Parent or Subsidiary, the
Option Price shall be no less than 110% of the Fair Market Value per Share on
the date of grant.
(B) granted to an Employee, the per share exercise price shall
be no less than one hundred percent (100%) of the Fair Market Value per Share
on the date of grant.
(ii) In the case of an Option granted on or after the effective date
of registration of any class of equity security of the Company pursuant to
Section 12 of the Exchange Act and prior to six months after the termination of
such registration, the per Share exercise price shall be no less than one
hundred percent (100%) of the Fair Market Value per Share on the date of grant.
(b) The consideration to be paid for the Shares to be issued upon
exercise of an Option, including the method of payment, shall be determined by
the Board and may consist entirely of cash, check, promissory note, other
Shares of Common Stock having a fair market value on the date of surrender
equal to the aggregate exercise price of the Shares as to which said option
shall be exercised, by conversion of Shares (in the manner provided in the
succeeding sentence), or any combination of such methods of payment, or such
other consideration and method of payment for the issuance of Shares to the
extent permitted under Florida Law. If the optionee desires to pay for the
Optioned Shares, in whole or in part, by conversion of Shares, Optionee shall
be entitled to receive that number of Shares equal to the quotient obtained by
dividing [(A-B)(x)] by (A) where:
(A) = the Fair Market Value of one Share of Common Stock on the date
of conversion.
(B) = the Option Price for one Share of Common Stock subject to an
Option.
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<PAGE> 46
(X) = the Number of Shares of Common Stock issuable upon exercise of
the Option if exercised for cash;
provided, that if the above calculation results in a negative number, then no
Shares shall be issued or issuable upon conversion of the Option. Any payment
made in Shares of the Company's Common Stock shall be treated as equal to the
Fair Market Value of such Common Stock on the date the properly endorsed
certificate for such Common Stock is delivered to the Committee (or its
delegate).
9. EXERCISE OF OPTION.
(a) PROCEDURE FOR EXERCISE; RIGHTS AS A SHAREHOLDER. Any Option
granted hereunder shall be exercisable at such times and under such conditions
as determined by the Committee, including performance criteria with respect to
the Company and/or the Optionee, and as shall be permissible under the terms of
the Plan.
An Option may not be exercised for a fraction of a Share.
An Option shall be deemed to be exercised when written notice of such
exercise has been given to the Company in accordance with the terms of the
Option by the person entitled to exercise the Option and fill payment for the
Shares with respect to which the Option is exercised has been received by the
Company. Full payment may, as authorized by the Board, consist of any
consideration and method of payment allowable under Section 8(b) of the Plan.
Until the issuance, which in no event will be delayed more than thirty (30)
days from the date of the exercise of the Option (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company), of the stock certificate evidencing such Shares, no
right to vote or receive dividends or any other rights as a shareholder shall
exist with respect to the Optioned Stock, notwithstanding the exercise of the
Option. No adjustment will be made for a dividend or other right for which the
record date is prior to the date the stock certificate is issued, except as
provided in the Plan.
Exercise of an Option in any manner shall result in a decrease in the
number of Shares which thereafter may be available, both for purposes of the
Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised.
(b) TERMINATION OF SERVICE AS AN EMPLOYEE OR DIRECTOR. If the
Continuous Service of any Employee or Director terminates, he may, but only
within (30) days (or such other period of time not exceeding three (3) months
as is determined by the Committee) after the date he ceases to be an Employee
or Director of the Company, exercise his Option to the extent that he was
entitled to exercise it as of the date of such termination. To the extent that
he was not entitled to exercise the Option at the date of such termination, or
if he does not exercise such Option (which he was entitled to exercise) within
the time specified herein, the Option shall terminate.
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<PAGE> 47
(c) Notwithstanding the provisions of Section 9(b) above, in the
event an Employee or Director is unable to continue his Continued Service with
the Company as a result of his total and permanent disability (as defined in
Section 105(d)(4) of the Code, as amended), he may, but only within three (3)
months (or such other period of time not exceeding twelve (12) months as is
determined by the Committee) from the date of disability, exercise his Option
to the extent he was entitled to exercise it at the date of such disability.
To the extent that he was not entitled to exercise the Option at the date of
disability, or if he does not exercise such Option (which he was entitled to
exercise) within the time specified herein, the Option shall terminate.
(d) DEATH OF OPTIONEE. In the event of the death of an Optionee:
(i) during the term of the Optionee who is at the time of his death
an Employee or Director of the Company and who shall have been in Continuous
Status as an Employee or Director since the date of grant of the Option, the
Option may be exercised, at any time within twelve (12) months following the
date of death, by the Optionee's estate or by a person who acquired the right
to exercise the Option by bequest or inheritance, but only to the extent of the
right to exercise that would have accrued had the Optionee continued living one
(1) month after the date of death; or
(ii) within thirty (30) days (or such other period of time not
exceeding three (3) months as is determined by the Committee) after the
termination of Continuous Status as an Employee or Director, the Option may be
exercised, at any time within three (3) months following the date of death, by
the Optionee's estate or by a person who acquired the right to exercise the
Option by bequest or inheritance, but only to the extent of the right to
exercise that had accrued at the date of termination.
10. NON-TRANSFERABILITY OF OPTIONS. The Option may not be sold, pledged,
assigned, hypothecated, transferred, or disposed of in any manner other than by
will or by the laws of descent or distribution and may be exercised, during the
lifetime of the Optionee, only by the Optionee.
11. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION OR MERGER. Subject to
any required action by the shareholders of the Company, the number of shares of
Common Stock covered by each outstanding Option, and the number of shares of
Common Stock which have been authorized for issuance under the Plan but as to
which no Options have yet been granted or which have been returned to the Plan
upon cancellation or expiration of an Option, as well as the price per share of
Common Stock covered by each such outstanding Option, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split or the payment of a stock dividend with
respect to the Common Stock or any other increase or decrease in the number of
issued shares of Common Stock effected without receipt of consideration by the
Company; provided, however, that conversion of any convertible securities of
the Company shall not be deemed to have been "effected without receipt of
consideration." Such adjustment shall be made by the Board, whose determination
in that respect shall be final, binding and conclusive. Except as expressly
provided herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason
8
<PAGE> 48
thereof shall be made with respect to, the number or price of shares of Common
Stock subject to an Option.
In the event of the proposed dissolution or liquidation of the Company, or
in the event of a proposed sale of all or substantially all of the assets of
the Company, or the merger of the Company with or into another corporation, the
Option will terminate immediately prior to the consummation of such proposed
action, unless otherwise provided by the Board. The Board may, in the exercise
of its sole discretion in such instances, declare that any Option shall
terminate as of a date fixed by the Board and give each Optionee the right to
exercise his Option as to all or any part of the Optioned Stock, including
Shares as to which the Option would not otherwise be exercisable.
12. TIME FOR GRANTING OPTIONS. The date of grant of an Option shall, for all
purposes, be the date on which the Board makes the determination granting such
Option. Notice of the determination shall be given to each Employee to whom an
Option is so granted within a reasonable time after the date of such grant.
13. AMENDMENT AND TERMINATION OF THE PLAN. (a) The Board may amend or
terminate the Plan from time to time in such respects as the Board may deem
advisable; provided that, the following revisions or amendments shall require
approval of the holders of a majority of the outstanding shares of the Company
entitled to vote:
(i) any material increase in the number of Shares subject to the Plan,
other than in connection with an adjustment under Section 11 of the Plan; or
(ii) if shareholder approval of such amendment is required for continued
compliance with Rule 16b-3 or Section 422 of the Code.
(b) SHAREHOLDER APPROVAL. Any amendment requiring shareholder approval
under Section 13(a) of the Plan shall be solicited as described in Section
17(a) of the Plan.
(c) EFFECT OF AMENDMENT OR TERMINATION. Any such amendment or
termination of the Plan shall not affect Options already granted and such
Options shall remain in full force and effect as if this Plan had not been
amended or terminated, unless mutually agreed otherwise between the Optionee
and the Board, which agreement must be in writing and signed by the Optionee
and the Company.
14. CONDITIONS UPON ISSUANCE OF SHARES. Shares shall not be issued pursuant
to the exercise of an Option unless the exercise of such Option and the
issuance and delivery of such Shares pursuant thereto shall comply with all
relevant provisions of law, including, without limitation, the Securities Act
of 1933, as amended, the Exchange Act, the rules and regulations promulgated
thereunder, and the requirements of any stock exchange upon which the Shares
may then be listed, and shall be further subject to the approval of counsel for
the Company with respect to such compliance.
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<PAGE> 49
As a condition to the exercise of an Option, the Company may require the
person exercising such Option to represent and warrant at the time of any such
exercise that the Shares are being purchased only for investment and without
any present intention to sell or distribute such Shares if, in the opinion of
counsel for the Company, such a representation is required by any of the
aforementioned relevant provisions of law.
15. RESERVATION OF SHARES. The Company, during the term of this Plan, will at
all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
Inability of the Company to obtain authority from any regulatory body
having jurisdiction, which authority is deemed by the Company's counsel to be
necessary to the lawful issuance and sale of any Shares hereunder, shall
relieve the Company of any liability in respect of the failure to issue or sell
such Shares as to which such requisite authority shall not have been obtained.
16. OPTION AGREEMENT. Options shall be evidenced by written Option agreements
in such form as the Committee shall approve.
17. SHAREHOLDER APPROVAL. Continuance of the Plan shall be subject to
approval by the shareholders of the Company within twelve months before or
after the date the Plan is adopted. If such shareholder approval is obtained
at a duly held shareholders' meeting, it may be obtained by the affirmative
vote of the holders of a majority of the outstanding shares of the Company
present or represented and entitled to vote thereon. The approval of such
shareholders of the Company shall be (1) solicited substantially in accordance
with Section 14(a) of the Exchange Act and the rules and regulations
promulgated thereunder, or (2) solicited after the Company has furnished in
writing to the holders entitled to vote substantially the same information
concerning the Plan as that which would be required by the rules and
regulations in effect under Section 14(a) of the Exchange Act at the time such
information is furnished.
If such shareholder approval is obtained by written consent in the absence
of a Shareholders' Meeting, it must be obtained by the written consent of all
shareholders of the Company who would have been entitled to cast the minimum
number of votes which would be necessary to authorize such action at a meeting
at which all Shareholders entitled to vote thereon were present and voting.
18. MISCELLANEOUS PROVISIONS. An Optionee shall have no rights as a
shareholder with respect to any Shares covered by his Option until the date of
the issuance of a stock certificate to him for such shares.
19. OTHER PROVISIONS. The stock option agreement authorized under the Plan
shall contain such other provisions, including, without limitation,
restrictions upon the exercise of the Option, as the Committee shall deem
advisable. Any such stock option agreement shall contain such limitations and
restrictions upon the exercise of the Option as shall be necessary in order
that such option will be an Incentive Stock Option as defined in Section 422 of
the Code.
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<PAGE> 50
20. INDEMNIFICATION OF COMMITTEE. In addition to such other rights of
indemnification as they may have as Directors or as members of the Committee,
the members of the Committee shall be indemnified by the Company against the
reasonable expenses, including attorneys' fees actually and necessarily
incurred in connection with the defense of any action, suit or proceeding, or
in connection with any appeal therein, to which they or any of them may be a
party by reason of any action taken or failure to act under or in connection
with the Plan or any Option granted thereunder, and against all amounts paid by
them in settlement thereof (provided such settlement is approved by independent
legal counsel selected by the Company) or paid by them in satisfaction of a
judgment in any such action, suit or proceeding, except in relation to matters
as to which it shall be adjudged in such action, suit or proceeding that such
Board member is liable for negligence or misconduct in the performance of his
duties; provided that within 60 days after institution of any such action, suit
or proceeding a Board member shall in writing offer the Company the
opportunity, at its own expense, to handle and defend the same.
21. APPLICATION OF FUNDS. The proceeds received by the Company from the sale
of Common Stock pursuant to Options will be used for general corporate
purposes.
22. NO OBLIGATION TO EXERCISE OPTION. The granting of an Option shall impose
no obligation upon the Optionee to exercise such Option.
23. OTHER COMPENSATION PLANS. The adoption of the Plan shall not affect any
other stock option or incentive or other compensation plans in effect for the
Company or any Subsidiary, nor shall the Plan preclude the Company from
establishing any other forms of incentive or other compensation for employees
and directors of the Company or any Subsidiary.
24. SINGULAR, PLURAL; GENDER. Whenever used herein, nouns in the singular
shall include the plural, and the masculine pronoun shall include the feminine
gender.
25. HEADINGS, ETC., NO PART OF PLAN. Headings of Articles and Sections hereof
are inserted for convenience and reference; they constitute no part of the
Plan.
26. GOVERNING LAW. The Plan shall be governed by and construed in accordance
with the laws of the State of Delaware, except to the extent preempted by
Federal law. The Plan is intended to comply with Rule 16b-3. Any provisions
inconsistent with Rule 16b-3 shall be inoperative and shall not affect the
validity of the Plan, unless the Board of Directors shall expressly resolve
that the Plan is no longer intended to comply with Rule 16b-3.
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EXHIBIT B
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of December __, 1995 (the "Merger
Agreement"), between American Business Computers Corporation, a Florida
corporation ("ABCC") and ABC Dispensing Technologies, Inc., a Delaware
corporation and a wholly-owned subsidiary of ABCC ("Dispensing")
W I T N E S S E T H
WHEREAS, on the date hereof, ABCC has authority to issue 20,000,000 shares
of Common Stock, par value $.01 per share (the "ABCC Common Stock"), of which
16,672,493 shares are issued and outstanding and no shares are held in
treasury;
WHEREAS, on the date hereof Dispensing has authority to issue 50,000,000
shares of Common Stock, par value $.01 per share (the "Dispensing Common
Stock"), of which -0- shares are issued and outstanding and no shares are
held in treasury.
WHEREAS, the respective Boards of Directors of ABCC and Dispensing have
determined that it is advisable and in the best interests of each of such
corporation that ABCC merge with and into Dispensing upon the terms and
subject to the conditions set forth herein for the purpose of effecting the
change of the state of incorporation of ABCC from the State of Florida to the
State of Delaware;
WHEREAS, the Board of Directors of ABCC has by resolutions duly adopted
and approved this Merger Agreement;
WHEREAS, ABCC has approved this Merger Agreement in its capacity as the
sole stockholder of Dispensing; and
WHEREAS, the Board of Directors of ABCC has directed that this Merger
Agreement be submitted to a vote of its shareholders at the annual meeting of
shareholders to be held on February 9, 1996, or at any and all adjournments
thereof;
NOW, THEREFORE, in consideration of the mutual agreements and covenants
herein contained, ABCC and Dispensing hereby agree as follows:
Section 1. Merger. ABCC shall be merged with and into Dispensing (the
"Merger"), and Dispensing shall be the surviving corporation (hereinafter
sometimes referred to as the "Surviving Corporation"). The Merger shall
become effective upon the date and time of filing of appropriate articles of
merger, providing for the Merger, with the Secretary of State of the State of
Florida and
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an appropriate certificate of ownership and merger, providing for the Merger,
with the Secretary of State of the State of Delaware, whichever later occurs
(the "Effective Time").
Section 2. Governing Documents. The Certificate of Incorporation of
Dispensing, as in effect immediately prior to the Effective Time, shall be the
Certificate of Incorporation of the Surviving Corporation without change or
amendment until thereafter amended in accordance with the provisions thereof
and applicable law. The By-laws of Dispensing, as in effect immediately prior
to the Effective Time, shall be the By-laws of the Surviving Corporation
without change or amendment until thereafter amended in accordance with the
provisions thereof, the Certificate of Incorporation of the Surviving
Corporation and applicable law.
Section 3. Succession. At the Effective Time, the separate corporate
existence of ABCC shall cease, and Dispensing shall succeed to all of the
assets and property (whether real, personal or mixed), rights, privileges,
franchises, immunities and powers of ABCC, and Dispensing shall assume and be
subject to all of the duties, liabilities, obligations and restrictions of
every kind and description of ABCC, including, without limitation, all
outstanding indebtedness of ABCC, all in the manner and as more fully set forth
in Section 259 of the General Corporation Law of the State of Delaware.
Section 4. Directors. The directors and the members of the various
committees of the Board of Directors of ABCC immediately prior to the Effective
Time shall be the directors and members of such committees of the Surviving
Corporation at and after the Effective Time to serve until the expiration of
their respective terms and until their successors are duly elected and
qualified.
Section 5. Officers. The officers of ABCC immediately preceding the
Effective Time shall be the officers of the Surviving Corporation at and alter
the Effective Time until their successors are duly elected and qualified.
Section 6. Further Assurances. From time to time, as and when required
by the Surviving Corporation or by its successors or assigns, there shall be
executed and delivered on behalf of ABCC such deeds and other instruments, and
there shall be taken or caused to be taken by it all such further and other
action, as shall be appropriate, advisable or necessary in order to vest,
perfect or conform, of record or otherwise, in the Surviving Corporation, the
title to and lien of all property, interests, assets, rights, privileges,
immunities, powers, franchises and authority of ABCC, and otherwise to carry
out the purposes of this Merger Agreement, and the officers and directors of
the Surviving Corporation are fully authorized, in the name and on behalf of
ABCC or otherwise, to take any and all such action and to execute and deliver
any and all such deeds and other instruments.
Section 7. Conversion of Securities. At the Effective Time, by virtue of
the Merger and without any action on the part of the holder thereof:
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(a) each share of ABCC Common Stock issued and outstanding
immediately prior to the Effective Time shall, except as provided in Section 8
hereof, be changed and converted into and shall be one fully paid and
nonassessable share of Dispensing Common Stock;
(b) each share of ABCC Common Stock held in the treasury of ABCC
immediately prior to the Effective Time shall be automatically converted into
one share of Dispensing Common Stock, which shares shall continue to be
retained and held by the Surviving Corporation in the treasury thereof;
(c) each option, warrant, purchase right, unit or other security of
ABCC issued and outstanding immediately prior to the Effective Time shall be
changed and converted into and shall be an identical security of Dispensing,
and the same number of shares of Dispensing Common Stock shall be reserved for
purposes of the exercise of such options, warrants, purchase rights, units or
other securities as is equal to the number of shares of ABCC Common Stock so
reserved as of the Effective Time; and
(d) each share of Dispensing Common Stock issued and outstanding in
the name of ABCC immediately prior to the Effective Time shall be canceled and
retired and resume the status of authorized and unissued shares of Dispensing
Common Stock, and no shares of Dispensing Common Stock or other securities of
Dispensing shall be issued in respect thereof.
Section 8. Dissenting Shareholders. Notwithstanding the provisions of
Section 7(a) hereof, any outstanding shares of ABCC Common Stock held by a
shareholder who shall have elected to dissent from the Merger and who shall
have exercised and perfected appraisal rights with respect to such shares in
accordance with Section 607.1320 of the Florida Business Corporation Act (a
"Dissenting Stockholder") shall not be converted into shares of Dispensing
Common Stock as a result of the Merger, but Dissenting Stockholders shall be
entitled to receive in lieu thereof only such consideration as shall be
provided in such Section 607.1320, except that shares of ABCC Common Stock
outstanding immediately prior to the Effective Time and held by a Dissenting
Stockholder who shall thereafter withdraw his election to dissent from the
Merger or lose his right to dissent from the Merger as provided in such Section
607.1320 shall be deemed converted, as of the Effective Time, into such number
of shares of Dispensing Common Stock as such holder otherwise would have been
entitled to receive as a result of the Merger.
Section 9. Employee Option and Benefit Plans. Each option or other right
to purchase or otherwise acquire shares of ABCC Common Stock granted under any
employee option, stock purchase or other benefit plan of ABCC (collectively,
the "Plans") which is outstanding immediately prior to the Effective Time
shall, by virtue of the Merger and without any action on the part of the holder
thereof, be converted into and become an option or right to acquire (and
Dispensing hereby assumes the obligation to deliver) the same number of shares
of Dispensing Common Stock, at the same price per share, and upon the same
terms, and subject to the same conditions, as set forth in the respective Plan
as in effect immediately prior to the Effective Time. The same number of shares
of Dispensing Common Stock shall be reserved for purposes of the Plans as is
equal to the number of
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shares of ABCC Common Stock so reserved immediately prior to the Effective
Time. Dispensing hereby assumes, as of the Effective Time, (i) the Plans and
all obligations of ABCC under the Plans, including the outstanding options,
stock purchase rights or awards or portions thereof granted pursuant to the
Plans and the right to grant additional options and stock purchase rights
thereunder and (ii) all obligations of ABCC under all other benefit plans in
effect as of the Effective Time with respect to which employee rights or
accrued benefits are outstanding as of the Effective Time.
Section 10. Dividend and Distributions. In the event that any dividend
or other distribution shall hereafter be declared by the Board of Directors of
ABCC in respect of the outstanding shares of ABCC Common Stock payable
subsequent to the Effective Time, the obligation to make payment of such
dividend or other distribution shall, by virtue of the Merger, become the
obligation of the Surviving Corporation and shall be satisfied in the manner
specified in such declaration, except that, to the extent such dividend or
other distributions shall have been declared payable in whole or in part in
shares of ABCC Common Stock, the Surviving Corporation shall issue, in place
thereof, to the persons entitled thereto, the identical number of shares of
Dispensing Common Stock.
Section 11. Condition to the Merger. The consummation of the Merger and
the other transactions herein provided is subject to receipt prior to the
Effective Time of the requisite approval of the Merger by the holders of ABCC
Common Stock pursuant to the Florida Business Corporation Law.
Section 12. Certificates. At and after the Effective Time all of the
outstanding certificates which immediately prior thereto represented shares of
ABCC Common Stock or warrants, units or other securities of ABCC shall be
deemed for all purposes to evidence ownership of and to represent the shares of
Dispensing Common Stock or warrants, units or other securities of Dispensing,
as the case may be, into which the shares of ABCC Common Stock or warrants,
units or other securities of ABCC represented by such certificates have been
converted as herein provided and shall be so registered on the books and
records of the Surviving Corporation or its transfer agent. The registered
owner of any such outstanding certificate shall, until such certificate shall
have been surrendered for transfer or otherwise accounted for to the Surviving
Corporation or its transfer agent, have and be entitled to exercise any voting
and other rights with respect to, and to receive any dividends and other
distributions upon, the shares of Dispensing Common Stock or warrants, units or
other securities of Dispensing, as the case may be, evidenced by such
outstanding certificate, as above provided.
Section 13. Amendment. The parties hereto may amend, modify or
supplement this Merger Agreement prior to the Effective Time; provided,
however, that no amendment, modification or supplement may be made after the
adoption of this Merger Agreement by the shareholders of ABCC which changes
this Merger Agreement in a way which, in the judgment of the Board of Directors
of ABCC, would have a material adverse effect on the shareholders of ABCC,
unless such amendment, modification or supplement is approved by such
shareholders.
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Section 14. Termination. This Merger Agreement may be terminated, and
the Merger and the other transactions provided for herein may be abandoned, at
any time prior to the Effective Time, whether before or after approval of this
Merger Agreement by the shareholders of ABCC, by action of the Board of
Directors of ABCC if:
(a) the condition specified in Section 11 hereof shall not have been
satisfied or waived; or
(b) the Board of Directors of ABCC determines for any reason, in its
sole judgment and discretion, that the consummation of the Merger would be
inadvisable or not in the best interests of ABCC and its shareholders.
Section 15. Counterparts. This Merger Agreement may be executed in one
or more counterparts, and each such counterpart hereof shall be deemed to be an
original instrument, but all such counterparts together shall constitute but
one agreement.
Section 16. Descriptive Headings. The descriptive headings herein are
inserted for convenience of reference only and are not intended to be part of
or to affect the meaning or Interpretation of this Merger Agreement.
Section 17. Florida Appointment. The Surviving Corporation hereby agrees
that it may be served with process in the State of Florida in any action or
special proceeding for enforcement of any liability or obligation of ABCC or
the Surviving Corporation arising from the Merger. The Surviving Corporation
appoints the Secretary of State of the State of Florida as its agent to accept
service of process in any such suit or other proceeding and a copy of such
process shall be mailed by the Secretary of State of the State of Florida to
the Surviving Corporation at 451 Kennedy Road, Akron, Ohio 44305, Attention:
Mr. William Lerner, Secretary.
Section 18. Governing Law. This Merger Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware.
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EXHIBIT C
CERTIFICATE OF INCORPORATION
OF
ABC DISPENSING TECHNOLOGIES, INC.
FIRST: The name of the corporation is ABC Dispensing Technologies,
Inc. (the "Corporation").
SECOND: The address of the Corporation's registered office in
the State of Delaware is c/o CT Corporation System, 1209 Orange Street,
Wilmington, Delaware 19801. The name of the Corporation's registered agent
at that address is CT Corporation System.
THIRD: The nature of the business or purposes to be conducted or
promoted by the Corporation is to engage in any lawful act or activity for
which corporations may be organized under the General Corporation Law of the
State of Delaware, as it may be amended from time to time (the "GCL"),
exclusive of any act or activity requiring the consent or approval of any
state official, department, board, agency or other body without such consent
or approval first obtained.
FOURTH: The total number of shares that the Corporation has
authority to issue is Fifty Million (50,000,000) shares of Common Stock, par
value $.01 per share.
FIFTH: A. The business and affairs of the Corporation shall be
managed by or under the direction of a board of directors consisting of not
fewer than three (3) nor more than nine (9) directors, the exact number of
directors to be determined from time to time by resolution adopted by
affirmative vote of a majority of the entire board of directors.
<PAGE> 57
B. Any director may be removed from office only by the
affirmative vote of at least sixty-six and two-thirds percent (66-2/3%) of
the combined voting power of the then outstanding shares of all classes and
series of stock of the Corporation entitled to vote generally in the election
of directors (the "Voting Stock"), voting together as a single class (it
being understood that for the purposes of this Article FIFTH (B), each share
of the Voting Stock shall be entitled to one vote.
Notwithstanding anything contained in this Certificate of
Incorporation to the contrary, and in addition to any other vote required by
law, the affirmative vote of at least sixty-six and two-thirds percent
(66-2/3%) of the combined voting power of the Voting Stock, voting together
as a single class, shall be required to alter, amend, or repeal, or adopt any
provision inconsistent with this Article FIFTH (B).
SIXTH: A director of the Corporation shall not be liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except to the extent such exemption from liability or
limitation thereof is not permitted under the GCL.
If, after the date this Certificate of Incorporation became effective
under the GCL, the GCL is amended to authorize corporate action further
eliminating or limiting the personal liability of directors, then the
liability of a director of the Corporation shall be eliminated or limited to
the fullest extent permitted by the GCL, as so amended from time to time.
Any repeal or modification of the foregoing paragraph shall not
adversely affect any right or protection of a director of the Corporation
existing hereunder with respect to any act or omission occurring prior to
such repeal or modification.
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The provisions of this Article SIXTH shall not be deemed to limit or
preclude indemnification of a director by the Corporation for any liability
of a director that has not been eliminated by the provisions of this Article
SIXTH.
SEVENTH: Every person who was or is a party or is threatened to be
made a party to or is involved in any threatened, pending or completed
action, suit, or proceeding, whether civil, criminal, administrative or
investigative ("Proceeding"), by reason of the fact that he or she or a
person of whom he or she is the legal representative is or was a director or
officer of the Corporation or is or was serving at the request of the
Corporation as a director or officer of another corporation, or as its
representative in a partnership, joint venture, trust, employee benefit plan,
or other enterprise, shall he indemnified and held harmless by the
Corporation, and the Corporation shall advance expenses to such person, to
the fullest extent legally permissible under the GCL, against all expenses,
liabilities and losses (including attorneys' fees, judgments, fines and
amounts paid in settlement) reasonably incurred or suffered by him or her in
connection therewith. Nothing contained herein shall affect any rights to
indemnification to which employees other than directors and officers may be
entitled by law. No amendment or repeal of this Article SEVENTH shall apply
to or have any effect on any right to indemnification provided hereunder with
respect to any acts or omissions occurring prior to such amendment or repeal.
The right of indemnification shall be a contract right that may be enforced
in any manner desired by such person. The right of indemnification shall not
be exclusive of any other right that such directors, officers or
representatives may have or hereafter acquire and, without limiting the
generality of such statement, they shall he entitled to their respective
rights of indemnification under any By-laws, agreement, vote of stockholders,
provision of law or otherwise, as well as their rights under this Article.
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Notwithstanding any other provision of this Article SEVENTH, no person shall
he entitled to indemnification or advancement of expenses under this Article
with respect to any Proceeding, or any claim therein, brought or made by him
or her against the Corporation, unless such Proceeding or claim is approved
by the board of directors of the Corporation.
The board of directors may adopt By-laws from time to time with
respect to indemnification to provide at all time the fullest indemnification
permitted by the GCL, and may cause the Corporation to purchase and maintain
insurance, at the Corporation's expense, on behalf of any person who is or
was a director, officer, employee or agent of the Corporation, or is or was
serving at the request of the Corporation as a director or officer of another
corporation, or as its representative in a partnership, joint venture, trust
or other enterprise against any liability asserted against such person and
incurred in any such capacity or arising out of such status, whether or not
the Corporation would have the power to indemnify such person against such
liability. The Corporation may also create a trust fund, grant a security
interest and/or use other means (including, but not limited to, letters of
credit, surety bonds and/or other similar arrangements), as well as enter
into contracts providing indemnification to the full extent authorized or
permitted by law and including as part thereof provisions with respect to
any or all of the foregoing, to ensure the payment of such amounts as may
become necessary to effect indemnification as provided therein, or elsewhere.
EIGHTH: The name and mailing address of the incorporator is as
follows:
<TABLE>
<CAPTION>
NAME MAILING ADDRESS
---- ---------------
<S> <C>
Lee A. Albanese, Esq. Robinson, St. John & Wayne
Two Penn Plaza East
Newark, New Jersey 07105
</TABLE>
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<PAGE> 60
NINTH: Except as otherwise provided herein, the holders of the
Common Stock may not act without a meeting. The By-laws of the Corporation
shall not be made, repealed, altered, amended or rescinded by the
stockholders of the Corporation except at an annual or special meeting of
stockholders by the vote, in addition to any other vote required by law, of
the holders of record of not less than sixty-six and two-thirds percent
(66-2/3%) of the total voting power of the Voting Stock, considered for
purposes of this Article NINTH as one class.
TENTH: In furtherance and not in limitation of the powers
conferred by statute, the board of directors of the Corporation is expressly
authorized to make, alter or repeal the By-laws of the Corporation.
ELEVENTH: Special meetings of the stockholders of the Corporation for
any purpose or purposes may be called at any time by the board of directors
or by a committee of the board of directors that has been duly designated by
the board of directors and whose powers and authority, as provided in a
resolution of the board of directors or in the By-laws of the Corporation,
include the power to call such meetings. Special meetings of the stockholders
of the Corporation may not he called by any other person or persons.
TWELFTH: Elections of directors need not be by written ballot unless
the By-laws of the Corporation shall so provide. Meetings of stockholders may
be held within or without the State of Delaware, as the By-laws may provide.
The books of the Corporation may be kept (subject to any provisions of
applicable law) outside the State of Delaware at such place or places as may
be designated from time to time by the Corporation's board of directors or in
the By-laws of the Corporation.
THIRTEENTH: The board of directors, when evaluating any (a) tender
offer
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or invitation for tenders, or proposal to make a tender offer or request or
invitation for tenders, by another party, for any equity security of the
Corporation or (b) proposal or offer by another party to (i) merge or
consolidate the Corporation or any subsidiary with another corporation, (ii)
purchase or otherwise acquire all or a substantial portion of the properties
or assets of the Corporation or any subsidiary, or sell or otherwise dispose of
to the Corporation or any subsidiary all or a substantial portion of the
properties or assets of such other party or (iii) liquidate, dissolve,
reclassify the securities of, declare an extraordinary dividend of,
recapitalize or reorganize the Corporation, shall take into account all factors
that the board of directors deems relevant, including, without limitation, to
the extent so deemed relevant, the potential impact on employees, customers,
suppliers, partners, joint venturers and other constituents of the Corporation
and the communities in which the Corporation operates.
FOURTEENTH: The provisions set forth in this Article FOURTEENTH
and in Articles FIFTH (B) (dealing with removal of directors), NINTH (dealing
with the alteration of By-laws by the stockholders) and ELEVENTH (dealing
with special meetings of the stockholders) herein may not be repealed or
amended in any respect, and no article imposing cumulative voting in the
election of directors may be added, unless such action is approved by the
affirmative vote of the holders of record of not less than sixty-six and
two-thirds percent (66-2/3%) of the Voting Stock, considered for purposes of
this Article FOURTEENTH as one class. The voting requirements contained in
Article FIFTH (B), Article NINTH and this Article FOURTEENTH shall be in
addition to the voting requirements imposed by law other provisions of this
Certificate of Incorporation.
FIFTEENTH: The Corporation reserves the right to amend, alter,
change or repeal any provision contained in this Certificate of
Incorporation, in the manner now or hereafter
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prescribed by statute, and all rights conferred upon stockholders herein are
granted subject to this reservation. Notwithstanding the foregoing, the
provisions set forth in Articles FIFTH (B), NINTH, ELEVENTH and FOURTEENTH may
not be repealed or amended in any respect unless such repeal or amendment is
approved as specified in Article FOURTEENTH herein.
<PAGE> 63
EXHIBIT D
BY-LAWS
OF
ABC DISPENSING TECHNOLOGIES, INC.
ARTICLE I
OFFICES
SECTION 1.01. PRINCIPAL OFFICE. The registered office of the Corporation
shall be c/o CT Corporation System, 1209 Orange Street, Wilmington, Delaware
19801. The name of the Corporation's registered agent is CT Corporation
System.
SECTION 1.02. OTHER OFFICES. The Corporation may have offices also at
the other places within and without the State of Delaware as the board of
directors may from time to time determine or as the business of the
Corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
SECTION 2.01. PLACE OF MEETINGS. Meetings of stockholders shall be held
at the place, within or without the State of Delaware, as shall be designated
from time to time by the board of directors.
SECTION 2.02. ANNUAL MEETINGS. Annual meetings of stockholders shall,
unless otherwise provided by the board of directors, be held on the first
Thursday of the fifth full month following the end of each fiscal year of the
Corporation, if not a legal holiday, and if a legal holiday, then on the next
full business day following, at 10:00 am., at which time they shall elect a
board of directors and transact the other business as may properly be brought
before the meeting.
SECTION 2.03. BUSINESS CONDUCTED AT ANNUAL MEETINGS. Notwithstanding
anything in these By-laws to the contrary, no business shall be conducted at
an annual meeting of the stockholders except in accordance with the
procedures hereinafter set forth in this Section 2.03; provided, however,
that nothing in this Section 2.03 shall be deemed to preclude discussion by
any shareholder of any business properly brought before the annual meeting in
accordance with said procedures.
<PAGE> 64
At an annual meeting of the stockholders, only such business shall be
conducted as shall have been properly brought before the meeting. To be
properly brought before an annual meeting, business must be (1) specified in
the notice of meeting (or any supplement thereto) given by or at the
direction of the board of directors, (2) otherwise properly brought before
the meeting by or at the direction of the board of directors, or (3)
otherwise properly brought before the meeting by a shareholder. In addition
to any other applicable requirements, for business to be properly brought
before an annual meeting by a shareholder, the shareholder must have given
timely notice thereof in writing to the Secretary of the Corporation. To be
timely, a shareholder's notice must be delivered to or mailed and received at
the principal executive offices of the Corporation not less than forty (40)
days nor more than sixty (60) days prior to the meeting as originally
scheduled; provided, however, that in the event that less than forty (40)
days' notice or prior public disclosure of the date of the meeting is given
or made to stockholders, notice by the shareholder to be timely must be so
received not later than the close of business on the tenth (10th) day
following the day on which such notice of the date of the annual meeting was
mailed or such public disclosure was made. Any adjournment(s) or
postponement(s) of the original meeting whereby the meeting will reconvene
within thirty (30) days from the original date shall be deemed for purposes
of notice to be a continuation of the original meeting and no business may be
brought before any such reconvened meeting unless timely notice of such
business was given to the Secretary of the Corporation for the meeting as
originally scheduled. A shareholder's notice to the Secretary shall set
forth as to each matter the shareholder proposes to bring before the annual
meeting (i) a brief description of the business desired to be brought before
the annual meeting and the reasons for conducting such business at the annual
meeting, (ii) the name and record address of the shareholder proposing such
business, (iii) the class and number of shares of the Corporation that are
beneficially owned by the shareholder, and (iv) any material interest of the
shareholder in such business.
The Chairman of an annual meeting shall, if the facts warrant, determine
and declare to the meeting that business was not properly brought before the
meeting in accordance with the provisions of this Section 2.03, and if he or
she should so determine, he or she shall so declare to the meeting and any
such business not properly brought before the meeting shall not be
transacted.
SECTION 2.04. NOMINATIONS FOR DIRECTORS. Notwithstanding anything in
these By-laws to the contrary, only persons who are nominated in accordance
with the procedures hereinafter set forth in this Section 2.04 shall be
eligible for election as directors of the Corporation.
Nominations of persons for election to the board of directors of the
Corporation may be made at a meeting of stockholders only (1) by or at the
direction of the board of directors or (2) by any shareholder of the
Corporation entitled to vote for the election of directors at the meeting who
complies with the notice procedures set forth in this Section 2.04. Such
nominations, other than those made by or at the direction of the board of
directors, shall be made pursuant to timely notice in writing to the
Secretary of the Corporation. To be timely, a shareholder's notice shall be
delivered to or mailed and received at the principal executive offices of the
Corporation not less than forty (40) days nor more than sixty (60) days prior
to the meeting; provided, however, that in the event that less than forty
(40) days' notice or prior public disclosure of the date of the meeting is
given or made to
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<PAGE> 65
stockholders, notice by the shareholder to be timely must be so received not
later than the close of business on the tenth (10th) day following the day on
which such notice of the date of the meeting was mailed or such public
disclosure was made. Any adjournment(s) or postponement(s) of the original
meeting whereby the meeting will reconvene within thirty (30) days from the
original date shall be deemed for purposes of notice to be a continuation of
the original meeting and no nominations by a shareholder of persons to be
elected directors of the Corporation may be made at any such reconvened meeting
other than a notice that was timely for the meeting on the date originally
scheduled. Such shareholder's notice shall set forth (i) as to each person
whom the shareholder proposes to nominate for election or reelection as a
director, all information relating to such person that is required to be
disclosed in solicitations of proxies for election of directors, or is
otherwise required, in each case pursuant to Regulation 14A under the
Securities Exchange Act of 1934, as amended, or any successor regulation
thereto (including such person's written consent to being named in the proxy
statement as a nominee and to serving as a director if elected), and (ii) as to
the shareholder giving the notice (A) the name and address, as they appear on
the Corporation's books, of such shareholder, and (B) the class and number of
shares of the Corporation which are beneficially owned by such shareholder. At
the request of the board of directors, any person nominated by the board of
directors for election as a director shall finish to the Secretary of the
Corporation that information required to be set forth in a shareholder's notice
of nomination which pertains to the nominee.
SECTION 2.05. SPECIAL MEETINGS.
(a) Special meetings of the stockholders of the Corporation for any
purpose or purposes may be called at any time by the board of directors, by a
committee of the board of directors that has been duly designated by the
board of directors and whose powers and authority, as provided in a
resolution of the board of directors, include the power to call such
meetings, or by that person designated by the board of directors as the chief
executive officer. Special meetings of the stockholders of the Corporation
may not be called by any other person or persons.
(b) At any time, upon written request to the secretary of the
Corporation by any person or persons authorized to call a special meeting of
stockholders, which written request shall state the purposes for the special
meeting, the secretary of the Corporation shall set the place, date and time
of the special meeting and shall deliver notice of the special meeting in
accordance with Section 4.01 hereof. If the secretary fails to set the
place, date and time of the meeting or deliver the notice, the person calling
the meeting may do so.
(c) Business transacted at any special meeting of stockholders shall
be limited to the purposes stated in the notice.
SECTION 2.06. NOTICE AND PURPOSE OF MEETINGS; WAIVER. Written notice
stating the place, date and time of meetings of stockholders and, in case of
a special meeting of stockholders, the purpose or purposes for which the
meeting is called, shall be delivered to each shareholder of record entitled
to vote at the meeting at his or her address of record, at least ten (10) but
not more than sixty
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(60) days prior to the date of the meeting. If mailed, the notice shall be
deemed to be delivered when deposited in the United States mail, postage
prepaid, directed to the shareholder at his or her address as it appears on the
records of the Corporation.
SECTION 2.07. VOTING LIST, RIGHT TO EXAMINE. The officer who has charge
of the stock ledger of the Corporation shall prepare and make, at least ten
(10) days before every meeting of stockholders, a complete list of the
stockholders entitled to vote at the meeting, arranged in alphabetical order
with the address of and the number of voting shares registered in the name of
each. The list shall be open for ten (10) days to the examination of any
shareholder, for any purpose germane to the meeting, during ordinary business
hours, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of meeting, or, if not so
specified, at the place where the meeting is to be held, and shall be
produced and kept at the time and place of the meeting during the whole time
thereof, and may be inspected by any shareholder who is present.
SECTION 2.08. ADJOURNMENTS. Any meeting of stockholders, annual or
special may adjourn from time to time to reconvene at the same or some other
place, and notice need not be given of any such adjourned meeting if the 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
that might have been transacted at the original meeting. If the adjournment
is for more than thirty days, or if after the adjournment a new record date
is set for the adjourned meeting, a notice of the adjourned meeting shall be
given to each shareholder of record entitled to vote at the meeting.
SECTION 2.09. QUORUM. Except as otherwise provided by law, the
Certificate of Incorporation or these By-laws, at each meeting of
stockholders the presence in person or by proxy of the holders of shares of
stock having a majority of the votes that could be cast by the holders of all
outstanding shares of stock entitled to vote at the meeting shall be
necessary and sufficient to constitute a quorum. In the absence of a quorum,
the stockholders so present may, by majority vote, adjourn the meeting from
time to time in the manner provided in Section 2 of these By-laws until a
quorum shall attend. Shares of its own stock belonging to the Corporation or
to another corporation, if a majority of the shares entitled to vote in the
election of directors of such other corporation is held, directly or
indirectly, by the Corporation, shall neither be entitled to vote nor be
counted for quorum purposes; provided, however, that the foregoing shall not
limit the right of the Corporation to vote stock, including but not limited
to its own stock held by it in a fiduciary capacity.
SECTION 2.10. VOTING.
(a) When a quorum is present at any meeting, the affirmative vote of
the holders of shares of stock having a majority of the votes that could be
cast by the holders of all shares of stock entitled to vote that are present
at a meeting, either in person or by proxy, shall decide any question brought
before the meeting, unless the question is one upon which by express
provision of the statutes, the Certificate of Incorporation or these By-laws
a different vote is required, in which case the express provision shall
govern and control the decision of the question.
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(b) Subject to the provisions of the Certificate of Incorporation,
each shareholder entitled to vote at any meeting of stockholders shall be
entitled to one vote for each share of the capital stock having voting power
held by the shareholder.
(c) Each shareholder entitled to vote at a meeting of stockholders
may authorize another person or persons to act for him or her by proxy, but
no such proxy shall be voted or acted upon after three (3) years from its
date, unless the proxy provides for a longer period. A duly executed proxy
shall be irrevocable if it states that it is irrevocable and if, and only as
long as, it is coupled with an interest sufficient in law to support an
irrevocable power. A shareholder may revoke any proxy which is not
irrevocable by attending the meeting and voting in person or by filing an
instrument in writing revoking the proxy or another duly executed proxy
bearing a later date with the secretary of the Corporation.
(d) The vote on any matter, including the election of directors,
need not be by written ballot.
SECTION 2.11. JUDGES OF ELECTION.
(a) Before any meeting of stockholders, the board of directors may
appoint judges of election, who need not be stockholders, to act at that
meeting or any adjournment thereof. If judges of election are not so
appointed, the chairman of the meeting shall appoint judges of election upon
the demand of any shareholder or his or her proxy present at the meeting and
before voting begins. The number of judges of election shall be either one
(1) or, upon demand of a shareholder, three (3). If there are three (3)
judges of election, the decision, act or certification of a majority of those
judges shall be effective in all respects as the decision, act or
certification of all.
(b) No person who is a candidate for an office to which the election
relates may act as a judge of election.
(c) In case any person appointed as a judge of election fails to
appear or fails or refuses to act, the vacancy may be filled by appointment
made by the board of directors before the meeting is convened, or by the
chairman of the meeting during a meeting.
(d) If judges of election are appointed pursuant to this Section
2.11, they shall determine the number of shares outstanding and the voting
power of each, the shares represented at the meeting, the existence of a
quorum, the authenticity, and the validity and effect of proxies. The judges
of election shall also receive votes or ballots, hear and determine all
challenges and questions in any way arising in connection with the right to
vote, count and tabulate all Votes, determine the result, and do those other
acts as may be proper to conduct and tally the vote or election with fairness
to all stockholders.
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(e) On request of the chairman of the meeting or of any shareholder
or his or her proxy, the judges of election shall make a report in writing of
any challenge or question or matter determined by them, and execute a
certificate setting forth any fact found by them.
ARTICLE III
Board of Directors
SECTION 3.01. POWERS. The business and affairs of the Corporation shall
be managed by or under the direction of its board of directors which shall
exercise all the powers of the Corporation and do all the lawful acts and
things as are not by statute or by the certificate of incorporation or by
these By-laws directed or required to be exercised or done by the
stockholders.
SECTION 3.02. NUMBER, TERM OF OFFICE AND VACANCIES. Subject to the
provisions of the Certificate of Incorporation, the board of directors shall
consist of not fewer than three (3) nor more than nine (9) members. The
number of directors may be increased or decreased from time to time by
resolution of the majority of the entire board of directors. At each annual
meeting, the stockholders shall elect directors each of whom shall hold
office for a term of one year or until his or her successor is elected or
qualified. Any director may resign at any time upon written notice to the
Corporation. Any newly created directorship or any vacancy occurring in the
board of directors for any cause may be filled by a majority of the remaining
members of the board of directors, although such majority is less than a
quorum, and each director so elected shall hold office until the expiration
of the term of office of the director whom he or she has replaced or until
his or her successor is elected and qualified.
Any director may be removed from office only by the affirmative vote of at
least sixty-six and two-thirds percent (66-2/3%) of the combined voting power
of the then outstanding shares of all classes and series of stock of the
Corporation entitled to vote generally in the election of directors ("Voting
Stock"), voting together as a single class.
SECTION 3.03. ANNUAL ORGANIZATIONAL MEETING. The first meeting of each
newly elected board of directors shall be held within thirty (30) days after
the adjournment of the annual meeting of stockholders. No notice of the
meeting shall need be given to the directors in order legally to constitute
the meeting, provided a quorum shall be present and provided the
organizational meeting is held generally at the time and at the place of the
meeting of stockholders at which the board of directors were elected. In the
event the meeting is not so held, the meeting may be held at the time and
place as shall be specified in a notice given as hereinafter provided for
special meetings of the board of directors.
SECTION 3.04. REGULAR AND SPECIAL MEETINGS. The board of directors of
the Corporation or any committee thereof may hold meetings, both regular and
special, either within or without the State of Delaware. Regular meetings of
the board of directors may be held without notice at the time and at the
place as shall from time to time be determined by the board of directors.
Special meetings
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of the board of directors may be called by the chief executive officer, or such
other officer as may be designated by the board of directors. The chief
executive officer, or such other officer as may be designated by the board of
directors, or the secretary shall call a special meeting upon the request of
any two directors. If given personally, by telephone facsimile or telegram,
the notice shall be given at least the day prior to the meeting. Notice may be
given by mail if it is mailed at least three days before the meeting.
SECTION 3.05. QUORUM; INTERESTED DIRECTORS.
(a) At meetings of the board of directors, a majority of the
directors shall constitute a quorum for the transaction of business and the
act of a majority of the directors present at any meeting at which there is a
quorum shall be the act of the board of directors. If a quorum shall not be
present at any meeting of the board of directors, the directors present
thereat may adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present.
(b) No contract or transaction shall be void or voidable solely
because the contract or transaction is between the Corporation and one or
more of its directors or officers, or between the Corporation and any other
corporation, partnership, association, or other organization in which one or
more of its directors or officers are directors or officers, or have a
financial interest; nor shall any contract or transaction be void or voidable
solely because the director or officer is present at or participates in the
meeting of the board of directors or committee thereof which authorize the
contract or transaction, or solely because his, her or their votes are
counted for the purpose, if:
(1) the material facts as to his or her relationship or
interest and as to the contract or transaction are disclosed or are known to
the board of directors or the committee, and the board of directors or
committee in good faith authorizes the contract or transaction by the
affirmative vote of a majority of the disinterested directors, even though
the disinterested directors be less than a quorum; or
(2) the material facts as to his or her relationship or
interest and as to the contract or transaction are disclosed or are known to
the stockholders entitled to vote thereon, and the contract or transaction is
specifically approved in good faith by vote of the stockholders; or
(3) the contract or transaction if fair as to the Corporation
as of the time it is authorized, approved or ratified, by the board of
directors, a committee thereof, or the stockholders.
(c) Common or interested directors may be counted in determining the
presence of a quorum at a meeting of the board of directors or of a committee
which authorize the contract or transaction.
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SECTION 3.06. COMMITTEES.
(a) The board of directors may, by resolution passed by a majority
of the whole board, designate one or more committees of the board of
directors, each committee to consist of one or more of the directors of the
Corporation, which, to the extent provided by law and in the resolution,
shall have and may exercise the powers of the board of directors in the
management of the business and affairs of the Corporation. The committee or
committees shall have the name or names as may be determined from time to
time by resolution adopted by the board of directors.
(b) Unless the board of directors designates one or more directors
as alternate members of any committee, who may replace an absent or
disqualified member at any meeting of the committee, the members of any
committee present at any meeting and not disqualified from voting may,
whether or not they constitute a quorum, unanimously appoint another member
of the board of directors to act at the meeting in the place of any absent or
disqualified member of the committee. At meetings of any committee, a
majority of the members or alternate members of the committee shall
constitute a quorum for the transaction of business and the act of a majority
of members or alternate members present at any meeting at which there is a
quorum shall be the act of the committee.
(c) The committees shall keep regular minutes of their proceedings.
SECTION 3.07. ACTION OF DIRECTORS IN LIEU OF MEETING. 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 a written consent
thereto is signed by all members of the board or of the committee, as the
case may be, and the written consent is filed with the minutes of proceedings
of the board or committee.
SECTION 3.08. ATTENDANCE VIA TELECOMMUNICATIONS. The members of the
board of directors or any committee thereof may participate in a meeting of
the board or committee by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other. The participation shall constitute presence in
person at the meeting for the purpose of determining a quorum and for voting.
SECTION 3.09. COMPENSATION. The directors may be paid their expenses of
attendance at each meeting of the board of directors and may be paid a fixed
sum for attendance at each meeting of the board of directors or a stated
salary as director. No payment shall preclude any director from serving the
Corporation in any other capacity and receiving compensation therefor.
Members of special or standing committees may be allowed like reimbursement
and compensation for attending committee meetings.
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ARTICLE IV
NOTICE - WAIVERS - MEETINGS
SECTION 4.01. NOTICE, WHAT CONSTITUTES. Whenever written notice is
required to he given to any person under the provisions of the Certificate of
Incorporation, these By-laws, or the General Corporation Law of the State of
Delaware, as amended from time to time (the "GCL"), it may be given to that
person, either personally or by sending a copy thereof through the mail, or
by telegraph, charges prepaid or by facsimile to his or her address appearing
on the books of the Corporation, or supplied by him or her in writing to the
Corporation for the purpose of notice. Except as otherwise expressly set
forth in the Certificate of Incorporation, these By-laws, or the GCL, if the
notice is sent by mail, it shall be deemed to have been given to the person
entitled thereto when deposited in the United States mail, postage prepaid,
return receipt requested, or, if sent by telegraph, twenty-four (24) hours
after it is deposited with a telegraph office for transmission to the person
entitled thereto, or, if sent by facsimile, twelve (12) hours after it has
been transmitted to the person, as the applicable case may be.
SECTION 4.02. WAIVER OF NOTICE.
(a) Whenever any written notice is required to be given under the
provisions of the Certificate of Incorporation, these By-laws, or the GCL, a
waiver thereof in writing, signed by the person or persons entitled to the
notice, whether before or after the time stated herein, shall be deemed
equivalent to the giving of the notice.
(b) Attendance of a person (in the case of a shareholder, either in
person or by proxy) at any meeting shall constitute a waiver of notice of the
meeting, except when a person attends a meeting for the express purpose of
objecting to the beginning of the meeting to the transaction of any business
because the meeting is not lawfully called or convened.
ARTICLE V
OFFICERS
SECTION 5.01. NUMBER, QUALIFICATIONS AND RESIGNATION. The officers of
the Corporation shall be chosen by the board of directors at its first
meeting, and thereafter after each annual meeting of stockholders. The
officers to be elected shall include a president, a vice president, a
secretary and a treasurer. The board of directors may also choose a chief
executive officer and one or more vice presidents and additional officers or
assistant officers as it may deem advisable. Any number of offices may be
held by the same person, except the offices of president and secretary.
Officers may, but need not, be directors or stockholders of the Corporation.
The board of directors may elect from its membership a chairman of the board
of directors and a vice chairman of the board of directors who shall be
officers of the Corporation.
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SECTION 5.02. TERM OF OFFICE. The officers of the Corporation shall hold
office at the pleasure of the board of directors. Each officer shall hold
his or her office until his or her successor is elected and qualified or
until his or her earlier resignation or removal. Any officer may resign at
any time upon written notice to the Corporation. Any officer elected or
appointed by the board of directors maybe removed at any time by the board of
directors, with or without cause. Any vacancy occurring in any office of the
Corporation by death, resignation, removal or otherwise shall be filled by
the board of directors.
SECTION 5.03. SUBORDINATE OFFICERS, COMMITTEES AND AGENTS. The board of
directors may elect any other officers and appoint any committees, employees
or other agents as it desires who shall hold their offices for the terms and
shall exercise the powers and perform the duties as shall be determined from
time to time by the board to be required by the business of the Corporation.
The directors may delegate to any officer or committee the power to elect
subordinate officers and retain or appoint employees or other agents.
SECTION 5.04. THE PRESIDENT. Unless the board of directors has
designated a chief executive officer pursuant to Section 5.10 hereof, the
president shall be the chief executive officer of the Corporation, shall
preside at all meetings of stockholders and of the board of directors, shall
have general and active management of the business of the Corporation and
shall see that all orders and resolutions of the board of directors are
carried into effect. The president shall execute on behalf of the
Corporation and may affix the seal or cause the seal to be affixed to all
instruments requiring the execution, except to the extent the signing and
execution thereof shall be expressly delegated by the board of directors to
some other officer or agent of the Corporation.
SECTION 5.05. THE VICE PRESIDENT. The vice president or vice presidents,
as the case may be, shall act under the direction of the president and in the
absence or disability of the president shall perform the duties and exercise
the powers of the president. They shall perform the other duties and have
the other powers as the president or the board of directors may from time to
time prescribe. The board of directors may designate one or more executive
vice presidents or may otherwise specify the order of seniority of the vice
presidents; and in that event, the duties and powers of the president shall
descend to the vice presidents in the specified order of seniority.
SECTION 5.06. THE SECRETARY. The secretary shall act under the direction
of the president. Subject to the direction of the president, the secretary
shall attend all meetings of the board of directors and all meetings of
stockholders and record the meetings in a book to be kept for that purpose
and shall perform like duties for the committees designated by the board of
directors when required. The secretary shall give, or cause to be given,
notice of all meetings of stockholders and special meetings of the board of
directors, and shall perform the other duties as may be prescribed by the
president or the board of directors. The secretary shall keep in safe
custody the seal of the Corporation and cause it to be affixed to any
instrument requiring it.
SECTION 5.07. THE ASSISTANT SECRETARIES. The assistant secretaries in
the order of their seniority, unless otherwise determined by the president or
the board of directors, shall, in the absence
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or disability of the secretary, perform the duties and exercise the powers of
the secretary. They shall perform the other duties and have the other powers
as the president or the board of directors may from time to time prescribe.
SECTION 5.08. THE TREASURER. The treasurer shall act under the direction
of the president. Subject to the direction of the president, the treasurer
shall have the custody of the corporate funds and securities and shall keep
full and accurate accounts of receipts and disbursements in books belonging
to the Corporation and shall deposit all moneys and other valuable effects in
the name and to the credit of the Corporation in the depositories as may be
designated by the board of directors. The treasurer shall disburse the funds
of the Corporation as may be ordered by the president or the board of
directors, taking proper vouchers for the disbursements, and shall render to
the president and the board of directors, at its regular meetings, or when
the board of directors so requires, an account of all his or her transactions
as treasurer and of the financial condition of the Corporation.
SECTION 5.09. THE ASSISTANT TREASURERS. The assistant treasurers in the
order of their seniority, unless otherwise determined by the president or the
board of directors, shall, in the absence or disability of the treasurer,
perform the duties and exercise the powers of the treasurer. They shall
perform the other duties and have the other powers as the president or the
board of directors may from time to time prescribe.
SECTION 5.10. THE CHIEF EXECUTIVE OFFICER. The board of directors may
designate a chief executive officer who shall perform all other duties as
from time to time may be requested of him by the board of directors. In the
absence of the designation, the president shall serve as the chief executive
officer.
ARTICLE VI
CERTIFICATES OF STOCK
SECTION 6.01. ISSUANCE. The interest of each shareholder in the
Corporation shall be evidenced by certificates for shares of stock. The
share certificates of the Corporation shall be numbered and registered in the
share ledger and transfer books of the Corporation as they are issued. They
shall be signed by the president or a vice president and by the secretary or
an assistant secretary or the treasurer or an assistant treasurer, and may
bear the corporate seal, which may be a facsimile, engraved or imprinted.
Any or all of the signatures on the certificate may be a facsimile. In case
any officer who has signed or whose facsimile signature has been placed upon
any share certificate shall cease to be an officer because of death,
resignation or otherwise before the certificate is issued, it may be issued
by the Corporation with the same effect as if the officer had not ceased to
be an officer because of death, resignation or otherwise as of the date of
its issue.
SECTION 6.02. SUBSCRIPTIONS FOR SHARES. Unless the subscription
agreement provides otherwise, subscriptions for shares, regardless of the
time when they are made, shall be paid at that
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time as shall be specified by the board of directors. All calls for payments
on subscriptions shall carry the same terms with regard to all shares of the
same class.
SECTION 6.03. TRANSFERS. Transfers of shares of the capital stock of the
Corporation shall be made on the books of the Corporation by the registered
owner thereof, or by his or her duly authorized attorney, with a transfer
clerk or transfer agent appointed as provided in Section 6.07 hereof, and
upon surrender of the certificate or certificates for the shares properly
endorsed and with all taxes thereon paid.
SECTION 6.04. SHARE CERTIFICATE. Certificates for shares of the
Corporation shall be in the form provided by statute and approved by the
board of directors. The share record books and the blank share certificate
books shall be kept by the secretary of the Corporation or by any agency
designated by the board of directors for that purpose. Every certificate
exchanged or returned to the Corporation shall be marked "Cancelled," with
the date of cancellation noted thereon.
SECTION 6.05. RECORD HOLDER OF SHARES. The Corporation shall be entitled
to treat the person in whose name any share or shares of the Corporation
stand on the books of the Corporation as the absolute owner thereof, and
shall not be bound to recognize any equitable or other claim to, or interest
in, the share or shares on the part of any other person.
SECTION 6.06. LOST, DESTROYED, MUTILATED OR STOLEN CERTIFICATES. The
holder of any shares of the Corporation shall immediately notify the
Corporation of any loss, destruction, mutilation or theft of the certificate
therefor, and the board of directors may, in its discretion, cause a new
certificate or certificates to be issued to him, in case of mutilation of the
certificate, upon the surrender of the mutilated certificate, or, in case of
loss, destruction or theft of the certificate, upon satisfactory proof of the
loss, destruction or theft, and, if the board of directors shall so
determine, the submission of a properly executed lost security affidavit and
indemnity agreement, or the deposit of a bond in the form and in the sum, and
with the surety or sureties, as the board of directors directs.
SECTION 6.07. TRANSFER AGENT AND REGISTRAR. The board of directors may
appoint one (1) or more transfer agents or transfer clerks and one (1) or
more registrars, and may require all certificates for shares to bear the
signature or signatures of any of them.
SECTION 6.08. RECORD DATE. 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 distribution of
stock or for the carrying on of any other lawful action, the board of
directors may set a record date, which record date shall not precede the date
upon which the resolution filing the record date is adopted by the board of
directors and which record date: (a) in the case of determination of
stockholders entitled to vote at any meeting of stockholders or adjournment
thereof, shall, unless otherwise required by law, not be more than sixty (60)
nor less than ten (10) days before the date of such meeting; (b) in the case
of determination of stockholders
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entitled to express consent to corporate action in writing without a meeting,
shall not be more than ten (10) days from the date upon which the resolution
fixing the record date is adopted by the board of directors; and (c) in the
case of any other action, shall not be more than sixty days prior to such other
action. If no record date is fixed; (x) 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; (y) the record date for
determining stockholders entitled to express consent to corporate action in
writing without a meeting when no prior action of the board of directors is
required by law, shall be the first date on which a signed written consent
setting forth the action taken or proposed to be taken is delivered to the
corporation in accordance with applicable law, or, if prior action by the board
of directors is required by law, shall be at the close of business on the day
on which the board of directors adopts the resolution taking such prior action;
and (z) 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.
ARTICLE VII
INDEMNIFICATION
SECTION 7.01. GENERAL. The Corporation shall indemnify, and advance
Expenses to Indemnitee to the fullest extent permitted by the GCL and as
provided in this Article. However, if this Article conflicts with the
Delaware General Corporation Law, or limits in any way the extent the
Corporation shall indemnify and advance Expenses to an Indemnitee pursuant to
the Delaware General Corporation Law, then the Delaware General Corporation
Law and the Certificate of Incorporation in effect at that time shall
control. (Capitalized terms used in this Article are defined in Section 7.12
hereof unless defined elsewhere herein.)
SECTION 7.02. PROCEEDINGS OTHER THAN PROCEEDINGS BY OR IN THE RIGHT OF
THE CORPORATION. Indemnitee shall be entitled to the rights of
indemnification provided in this Section 7.02 if, by reason of his or her
Corporate Status, he or she is, or is threatened to be made, a party to any
threatened, pending or completed Proceeding, other than a Proceeding by or in
the right of the Corporation. Pursuant to this Section 7.02, Indemnitee
shall be indemnified against Expenses, judgments, penalties, fines and
amounts paid in settlement actually and reasonably incurred by him or on his
or her behalf in connection with the Proceeding or any claim, issue or matter
therein, if he or she acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal Proceeding, had no reasonable
cause to believe his or her conduct was unlawful.
SECTION 7.03. PROCEEDINGS BY OR IN THE RIGHT OF THE CORPORATION.
Indemnitee shall be entitled to the rights of indemnification provided in
this Section 7.03 if, by reason of his or her
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Corporate Status, he or she is, or is threatened to be made, a party to any
threatened, pending or completed Proceeding brought by or in the right of the
Corporation to procure a judgment in its favor. Pursuant to this Section,
Indemnitee shall be indemnified against Expenses actually and reasonably
incurred by him or her or on his or her behalf in connection with the
proceeding if he or she acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the best interests of the
Corporation. Notwithstanding the foregoing, no indemnification against the
Expenses shall be made in respect of any claim, issue or matter in the
Proceeding as to which Indemnitee shall have been adjudged to be liable to the
Corporation if applicable law prohibits the indemnification; provided, however,
that, if applicable law so permits, indemnification against Expenses shall
nevertheless be made by the Corporation in the event if and only to the extent
that the Court of Chancery of the State of Delaware, or the court in which the
proceeding shall have been brought or is pending, shall determine.
SECTION 7.04. INDEMNIFICATION FOR EXPENSES OF A PARTY WHO IS WHOLLY OR
PARTLY SUCCESSFUL. Notwithstanding any other provision of this Article, to
the extent that Indemnitee is, by reason of his or her Corporate Status, a
party to and is successful, on the merits or otherwise, in any Proceeding, he
or she shall be indemnified against all Expenses actually and reasonably
incurred by him or her or on his or her behalf in connection therewith. If
Indemnitee is not wholly successful in the Proceeding but is successful, on
the merits or otherwise, as to one or more but less than all claims, issues
or matters in the Proceeding, the Corporation shall indemnify Indemnitee
against all Expenses actually and reasonably incurred by him or her or on his
or her behalf in connection with each successfully resolved claim, issue or
matter. For purposes of this Section 7.04 and without limitation, the
termination of any claim, issue or matter in the proceeding by dismissal with
or without prejudice, shall be deemed to be a successful result as to the
claim, issue or matter.
SECTION 7.05. INDEMNIFICATION FOR EXPENSES OF A WITNESS. Notwithstanding
any other provision of this Article, to the extent that Indemnitee is, by
reason of his or her Corporate Status, a witness in any Proceeding, he or she
shall be indemnified against all Expenses actually and reasonably incurred by
him or her or on his or her behalf in connection therewith.
SECTION 7.06. ADVANCEMENT OF EXPENSES. The Corporation shall advance all
reasonable Expenses incurred by or on behalf of Indemnitee in connection with
any Proceeding within twenty (20) days after the receipt by the Corporation
of a statement or statements from Indemnitee requesting the advance or
advances from time to time, whether prior to or after final disposition of
the Proceeding. The statement or statements shall reasonably evidence the
Expenses incurred by Indemnitee and shall include or be preceded or
accompanied by an undertaking by or on behalf of Indemnitee to repay any
Expenses advanced in the event Independent Counsel or the board of directors,
as the case may be, shall reasonably determine that Indemnitee is not
entitled to be indemnified against the Expenses pursuant to Section 7.07(a)
hereof.
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SECTION 7.07. PROCEDURE FOR DETERMINATION OF ENTITLEMENT OF
INDEMNIFICATION.
(a) To obtain indemnification under this Article, Indemnitee shall
submit to the Corporation a written request, including therein or therewith
the documentation and information as is reasonably available to Indemnitee
and is reasonably necessary to determine whether and to what extent
Indemnitee is entitled to indemnification. The secretary of the Corporation
shall, promptly upon receipt of the a request for indemnification, advise the
board of directors in writing that Indemnitee has requested indemnification.
(b) Upon written request by Indemnitee for indemnification pursuant
to the first sentence of Section 7.07(a) hereof, a determination, if required
by applicable law, with respect to Indemnitee's entitlement thereto shall be
made in the specific case in the following manner:
(1) if a Change in Control shall have occurred, by Independent
Counsel (unless Indemnitee shall request that the determination be made by
the board of directors or the stockholders, in which case by the person or
persons or in the manner provided for in clauses (2) or (3) of this Section
7.07(b)) in a written opinion to the board of directors, a copy of which
shall be delivered to Indemnitee;
(2) if a Change of Control shall not have occurred, (A) by the
board of directors upon a majority vote of a quorum consisting of
Disinterested Directors, or (B) if a quorum of the Board of Directors
consisting of Disinterested Directors is not obtainable or, even if
obtainable, the quorum of Disinterested Directors so directs, by Independent
Counsel in a written opinion to the Board of Directors, a copy of which shall
be delivered to Indemnitee or (C) by the stockholders of the Corporation; or
(3) as provided in Section 7.07(c) of this Article.
If it is so determined that Indemnitee is entitled to indemnification,
payment to Indemnitee shall be made within ten (10) days after the
determination. Indemnitee shall cooperate with the person, persons or entity
making the determination with respect to Indemnitee's entitlement to
indemnification, including providing to the person, persons or entity upon
reasonable advance request any documentation or information which is not
privileged or otherwise protected from disclosure and which is reasonably
available to Indemnitee and reasonably necessary to the determination. Any
costs or expenses (including attorneys' fees and disbursements) incurred by
Indemnitee in so cooperating with the person, persons or entity making the
determination shall be borne by the Corporation (irrespective of the
determination as to Indemnitee's entitlement to indemnification) and the
Corporation hereby agrees to indemnify and hold Indemnitee harmless
therefrom.
(c) In the event the determination of entitlement to indemnification
is to be made by Independent Counsel pursuant to Section 7.07(b) hereof, the
Independent Counsel shall be selected as provided in this Section 7.07(c):
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(1) If a Change of Control shall not have occurred, the
Independent Counsel shall be selected by the board of directors, and the
Corporation shall give written notice to Indemnitee advising him of the
identity of the Independent Counsel so selected.
(2) If a Change of Control shall have occurred, the Independent
Counsel shall be selected by Indemnitee (unless Indemnitee shall request that
the selection be made by the board of directors, in which event the preceding
sentence shall apply), and Indemnitee shall give written notice to the
Corporation advising it of the identity of the Independent Counsel so
selected.
(3) In either event, Indemnitee or the Corporation, as the case
may be, may, within 7 days after the written notice of selection shall have
been given, deliver to the Corporation or to Indemnitee, as the case may be,
a written objection to the selection. The objection may be asserted only on
the ground that the Independent Counsel so selected does not meet the
requirements of "Independent Counsel" as defined in Section 7.12 hereof, and
the objection shall set forth with particularity the factual basis of the
assertion. If the written objection is made, the Independent Counsel so
selected may not serve as Independent Counsel unless and until court has
determined that the objection is without merit.
(4) If, within twenty (20) days after submission by Indemnitee
of a written request for indemnification pursuant to Section 7.07(a) hereof,
no Independent Counsel shall have been selected or that Independent Counsel
selected has been objected to by the other party, either the Corporation or
Indemnitee may petition the Court of Chancery of the State of Delaware or
other court of competent jurisdiction for the appointment as Independent
Counsel of a person selected by the Court or by the other person as the Court
shall designate, and/or for resolution of any objection which shall have been
made by the Corporation or Indemnitee to the other's selection of Independent
Counsel and the person so appointed or the person with respect to whom an
objection is so resolved shall act as Independent Counsel under Section
7.07(b) hereof.
The Corporation shall pay any and all reasonable fees and expenses of
Independent Counsel incurred by the Independent Counsel in connection with
acting pursuant to Section 7.07(b) hereof, and the Corporation shall pay all
reasonable fees and expenses incident to the procedures of this Section
7.07(c), regardless of the manner in which the Independent Counsel was
selected or appointed. Upon the due commencement of any judicial proceeding
or arbitration pursuant to Section 7.09 hereof, Independent Counsel shall be
discharged and relieved of any further responsibility in such capacity
(subject to the applicable standards of professional conduct then
prevailing).
SECTION 7.08. PRESUMPTIONS AND EFFECT OF CERTAIN PROCEEDINGS.
(a) If a Change of Control shall have occurred, in making a
determination with respect to entitlement to indemnification hereunder, the
person, persons or entity making the determination shall presume that
Indemnitee is entitled to indemnification under this Article if Indemnitee
has submitted a request for indemnification in accordance with Section
7.07(a) hereof,
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and the Corporation shall have the burden of proof to overcome that presumption
in connection with the making by any person, persons or entity of any
determination contrary to that presumption.
(b) If the person, persons or entity empowered or selected under
Section 7.07 hereof to determine whether Indemnitee is entitled to
indemnification shall not have made the determination within sixty (60) days
after receipt by the Corporation of the request therefor, the requisite
determination of entitlement to indemnification shall be deemed to have been
made and Indemnitee shall be entitled to the indemnification, absent (1) a
misstatement by Indemnitee of a material fact, or an omission of a material
fact necessary to make Indemnitee's statement not materially misleading, in
connection with the request for indemnification, or (2) a prohibition of the
indemnification under applicable law; provided, however, that the sixty (60)
day period may be extended for a reasonable time, not to exceed an additional
thirty (30) days, if the person, persons or entity making the determination
with respect to entitlement to indemnification in good faith requires the
additional time for the obtaining or evaluating of documentation and/or
information relating thereto.
The foregoing provisions of this Section 7.08(b) shall not apply:
(1) if the determination of entitlement to indemnification is
to be made by the stockholders pursuant to Section 7.07(b) hereof and if (A)
within 15 days after receipt by the Corporation of the request for the
determination the board of directors has resolved to submit the determination
to the stockholders for their consideration at an annual meeting thereof to
be held within seventy-five (75) days after the receipt and the determination
is made thereat, or (B) a special meeting of stockholders is called within
fifteen (15) days after the receipt for the purpose of making the
determination, the meeting is held for the purpose within sixty (60) days
after having been so called and the determination is made thereat; or
(2) if the determination of entitlement to indemnification is
to be made by Independent Counsel pursuant to Section 7.07(b) hereof.
(c) The termination of any Proceeding or of any claim, issue or
matter therein by judgment, order, settlement or conviction, or upon a plea
of nolo contendere or its equivalent, shall not (except as otherwise
expressly provided in this Section) of itself adversely affect the right of
Indemnitee to indemnification or create a presumption that Indemnitee did not
act in good faith and in a manner that he or she reasonably believed to be in
or not opposed to the best interests of the Corporation or, with respect to
any criminal Proceeding, that Indemnitee had reasonable cause to believe that
his or her conduct was unlawful.
SECTION 7.09. REMEDIES OF INDEMNITEE.
(a) Indemnitee shall be entitled to an adjudication in an
appropriate court of the State of Delaware, or in any other court of
competent jurisdiction, of his or her entitlement to the indemnification or
advancement of Expenses upon the occurrence of the following:
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(1) a determination is made pursuant to Section 7.07(b) hereof
that Indemnitee is not entitled to indemnification under this Article;
(2) advancement of Expenses is not timely made pursuant to
Section 7.06 hereof;
(3) the determination of entitlement to indemnification is to
be made by Independent Counsel pursuant to Section 7.07(b) and the
determination shall not have been made and delivered in a written opinion
within twenty (20) days after receipt by the Corporation of the request for
indemnification;
(4) payment of indemnification is not made pursuant to section
7.04 within ten (10) days after receipt by the Corporation of a written
request therefor; or
(5) payment of indemnification is not made within ten (10) days
after a determination has been made that Indemnitee is entitled to
indemnification or the determination is deemed to have been made pursuant to
Section 7.08.
Alternatively, Indemnitee, at his or her option, may seek an award in
arbitration to be conducted by a single arbitrator pursuant to the rules of
the American Arbitration Association. Indemnitee shall commence the
proceeding seeking an adjudication or any award in arbitration within 10 days
following the date on which Indemnitee first has the right to commence the
proceeding pursuant to this Section 7.09. The Corporation shall not oppose
Indemnitee's right to seek any adjudication or award in arbitration.
(b) In the event that a determination shall have been made pursuant
to Section 7.07 that Indemnitee is not entitled to indemnification, any
judicial proceeding or arbitration commenced pursuant to this Section 7.09
shall be conducted in all respects as a de novo trial, or arbitration, on the
merits and Indemnitee shall not be prejudiced by reason of that adverse
determination. If a Change of Control shall have occurred, the Corporation
shall have the burden of proving that Indemnitee is not entitled to
indemnification or advancement of Expenses as the case may be, in any
judicial proceeding or arbitration commenced pursuant to this Section 7.09.
(c) If a determination shall have been made or deemed to have been
made pursuant to Sections 7.07 or 7.05 that Indemnitee is entitled to
indemnification, the Corporation shall be bound by the determination in any
judicial proceeding or arbitration commenced pursuant to this Section 7.09,
absent (1) a misstatement by Indemnitee of a material fact, or any omission
of a material fact necessary to make Indemnitee's statement not materially
misleading, in connection with the request for indemnification, or (2) a
prohibition of the indemnification under applicable law.
(d) The Corporation shall be precluded from asserting in any
judicial proceeding or arbitration commenced pursuant to this Section 7.09
that the procedures and presumptions of this
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Article are not valid, binding and enforceable and shall stipulate in any court
or before any arbitrator that the Corporation is bound by all the provisions of
this Article.
(e) In the event that Indemnitee, pursuant to this Section 7.09,
seeks a judicial adjudication of or an award in arbitration to enforce his or
her rights under or to recover damages for breach of this Article, Indemnitee
shall be entitled to recover from the Corporation, and shall be indemnified
by the Corporation against, any and all expenses (of the types described in
the definition of Expenses in Section 7.12) actually and reasonably incurred
by him or her in the judicial adjudication or arbitration, but only if he or
she prevails therein. If it shall be determined in said judicial
adjudication or arbitration that Indemnitee is entitled to receive part but
not all of the indemnification or advancement of expenses sought, the
expenses incurred by Indemnitee in connection with the judicial adjudication
or arbitration shall be appropriately prorated.
SECTION 7.10. NON-EXCLUSIVITY; SURVIVAL OF RIGHTS; INSURANCE;
SUBROGATION.
(a) The rights of indemnification and to receive advancement of
Expenses as provided by this Article shall not be deemed exclusive of any
other rights to which Indemnitee may at any time be entitled under applicable
law, the certificate of incorporation, these By-laws, any agreement, a vote
of stockholders or a resolution of directors, or otherwise. No amendment,
alteration or repeal of this Article or of any provision hereof shall be
effective as to any Indemnitee with respect to any action taken or omitted by
the Indemnitee in his or her Corporate Status prior to the amendment,
alteration or repeal. The provisions of this Article shall continue as to
any Indemnitee whose Corporate Status has ceased and shall inure to the
benefit of his or her heirs, executors and administrators.
(b) To the extent that the Corporation maintains an insurance policy
or policies providing liability insurance for directors, officers, employees,
agents or fiduciaries of the Corporation or of any other corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise
which the person serves at the request of the Corporation, Indemnitee shall
be covered by the policy or policies in accordance with its or their terms to
the maximum extent of the coverage available for any director, officer,
employee or agent under the policy or policies.
(c) In the event of any payment under this Article, the Corporation
shall be subrogated to the extent of the payment to all of the rights of
recovery of Indemnitee, who shall execute all papers required and take all
action necessary to secure the rights, including execution of such documents
as are necessary to enable the Corporation to bring suit to enforce the
rights.
(d) The Corporation shall not be liable under this Article to make
any payment of amounts otherwise indemnifiable hereunder if and to the extent
that Indemnitee has otherwise actually received the payment under any
insurance policy, contract, agreement or otherwise.
SECTION 7.11. CERTAIN PERSONS NOT ENTITLED TO INDEMNIFICATION OR
ADVANCEMENT OF EXPENSES. Notwithstanding any other provision of this
Article, no person shall be entitled to
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indemnification or advancement of Expenses under this Article with respect to
any Proceeding, or any claim therein, brought or made by him or her against the
Corporation.
SECTION 7.12. DEFINITIONS. FOR PURPOSES OF THESE BY-LAWS:
(a) "Change in Control" means a change in control of the Corporation
occurring after the Effective Date of a nature that would be required to be
reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or in
response to any similar item on any similar schedule or form) promulgated
under the Securities Exchange Act of 14 (the "Act"), whether or not the
Corporation is then subject to the reporting requirement; provided, however,
that, without limitation, a Change in Control shall be deemed to have
occurred if after the Effective Date (1) any "person" or "groups" (as the
terms are used in Sections 13(d) and 14(d) of the Act) is or becomes the
"beneficial owner" (as defined in Rule l3d-3 under the Act), directly or
indirectly, of securities of the Corporation representing more than ten
percent (10%) of the combined voting power of the Corporation's then
outstanding securities without the prior approval of at least two-thirds of
the members of the board of directors in office immediately prior to the
person attaining the percentage interest; (2) the Corporation is a party to a
merger, consolidation, sale of assets or other reorganization, or a proxy
contest, as a consequence of which members of the board of directors in
office immediately prior to the transaction or event constitute less than a
majority of the board of directors thereafter; or (3) during any period of
two (2) consecutive years, individuals who at the beginning of the period
constituted the board of directors (including for this purpose any new
director whose election or nomination for election by the Corporation's
stockholders was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who were directors at the beginning of the
period) cease for any reason to constitute at least a majority of the board
of directors.
(b) "Corporate Status" means the status of a person who is or was a
director or officer, of the Corporation or of any other corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise
that the person is or was serving at the written request of the Corporation.
(c) "Disinterested Director" means a director of the Corporation who
is not and was not a party to the Proceeding in respect of which
indemnification is sought by Indemnitee.
(d) "Effective Date" means the date that American Business Computers
Corporation was merged with and into the Corporation.
(e) "Expenses" shall include all reasonable attorneys' fees,
retainers, court costs, transcript costs, fees of experts, witness fees,
travel expenses, duplicating costs, printing and binding costs, telephone
charges, postage, delivery service fees, and all other disbursements or
expenses of the types customarily incurred in connection with prosecuting,
defending, preparing to prosecute or defend, investigating, or being or
preparing to be a witness in a Proceeding.
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(f) "Indemnitee" includes any person who is, or is threatened to be
made, a witness in or a party to any Proceeding as described in Sections
7.02, 7.03, 7.04 or 7.05 by reason of his or her Corporate Status.
(g) "Independent Counsel" means a law firm, or a member of a law
firm, that is experienced in matters of corporation law and neither presently
is, nor in the past five (5) years has been, retained to represent: (1) the
Corporation or Indemnitee in any matter material to either the party, or (2)
any other party to the Proceeding giving rise to a claim for indemnification
hereunder. Notwithstanding the foregoing, the term "Independent Counsel"
shall not include any person who, under the applicable standards of
professional conduct then prevailing, would have a conflict of interest in
representing either the Corporation or Indemnitee in any action to determine
Indemnitee's rights under this Article.
(h) "Proceeding" includes any action, suit, arbitration, alternate
dispute resolution mechanism, investigation, administrative hearing or any
other proceeding whether civil, criminal, administrative or investigative,
except one initiated by an Indemnitee pursuant to this Article to enforce his
or her rights under this Article.
ARTICLE VIII
AMENDMENTS
SECTION 8.01. AMENDMENTS BY STOCKHOLDERS. Subject to the provisions of
the Certificate of Incorporation, the By-laws may be repealed, altered,
amended or rescinded by the stockholders at any annual or special meeting of
stockholders by the vote of the holders of record of not less than sixty-six
and two-thirds percent (66-2/3%) of the total voting power of all shares of
stock entitled to vote in the election of directors, considered for the
purpose of this Section 8.01 as one class.
SECTION 8.02. AMENDMENTS BY DIRECTORS. The board of directors may
repeal, alter, amend or rescind these By-laws, including By-laws adopted by
the stockholders.
ARTICLE IX
Miscellaneous
SECTION 9.01. RESERVES. There may be set aside out of any funds of the
Corporation available for dividends such sum or sums as the 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 the purchase of
additional property, or for any other purpose as the directors shall think
conducive to the interest of the Corporation, and the directors may modify or
abolish any reserve.
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SECTION 9.02. AUTHORIZED SIGNER. All checks or demands for money and
notes of the Corporation shall be signed by the officer or officers or the
other person or persons as the board of directors may from time to time
designate by resolution.
SECTION 9.03. FISCAL YEAR. The fiscal year of the Corporation shall be
fixed by resolution of the board of directors.
SECTION 9.04. CORPORATION SEAL. The corporate seal shall have inscribed
thereon the name of the Corporation, the year of its organization and the
words "Corporate Seal, Delaware." The seal may be used by causing it or a
facsimile thereof to be impressed, affixed or in any other manner reproduced.
SECTION 9.05. SEVERABILITY. If any provision of these By-laws shall be
held to be invalid, illegal or unenforceable for any reason whatsoever, the
validity, legality and enforceability of the remaining provisions of these
By-laws shall not in any way be affected or impaired thereby and to the
fullest extent possible, the provisions of these By-laws shall be construed
so as to give effect to the intent manifested by the provision held invalid,
illegal or unenforceable.
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EXHIBIT E
FLORIDA BUSINESS CORPORATION ACT
DISSENTERS' RIGHTS
607.1301 DISSENTER'S RIGHT; DEFINITIONS. The following definitions
apply to sec 607.1302 and sec 607.1320:
(1) "Corporation" means the issuer of the shares held by a
dissenting shareholder before the corporate action or the surviving or
acquiring corporation by merger or share exchange of that issuer.
(2) "Fair Value," with respect to a dissenter's shares, means the
value of the shares as of the close of business on the day prior to the
shareholders' authorization date, excluding any appreciation or depreciation
in anticipation of the corporate action unless exclusion would be
inequitable.
(3) "Shareholders' authorization date" means the date on which the
shareholders' vote authorizing the proposed action was taken, the date on
which the corporation received written consents without a meeting from the
requisite number of shareholders in order to authorize the action, or, in the
case of a merger pursuant to sec 607.1104, the day prior to the date on which a
copy of the plan of merger was mailed to each shareholder of record of the
subsidiary corporation.
607.1302 RIGHT OF SHAREHOLDER TO DISSENT. (1) Any shareholder of a
corporation has the right to dissent from, and obtain payment of the fair
value of his shares in the event of, any of the following corporate actions:
(a) Consummation of a plan of merger to which the corporation is a
party:
1. If the shareholder is entitled to vote on the merger, or
2. If the corporation is a subsidiary that is merged with its
parent under sec 607.1104, and the shareholders would have been entitled to vote
on action taken, except for the applicability of sec 607.1104;
(b) Consummation of a sale or exchange of all, or substantially all,
of the property of the corporation, other than in the usual and regular
course of business, if the shareholder is entitled to vote on the sale or
exchange pursuant to sec 607.1202, including, a sale in dissolution but not
including a sale pursuant to court order or a sale for cash pursuant to a
plan by which all or substantially all of the net proceeds of the sale will
be distributed to the shareholders within 1 year after the date of sale;
<PAGE> 86
(c) As provided in sec 607.0902(11), the approval of a control share
acquisition;
(d) Consummation of a plan of share exchange to which the
corporation is a party as the corporation the shares of which will be
acquired, if the shareholder is entitled to vote on the plan;
(e) Any amendment of the articles of incorporation if the
shareholder is entitled to vote on the amendment and if such amendment would
adversely affect such shareholder by:
1. Altering or abolishing any preemptive rights attached to any of
his shares;
2. Altering or abolishing the voting rights pertaining to any of
his shares, except as such rights may be affected by the voting rights of new
shares then being authorized of any existing or new class or series of
shares;
3. Effecting an exchange, cancellation, or reclassification of any
of his shares, when such exchange, cancellation, or reclassification would
alter or abolish his voting rights or alter his percentage of equity in the
corporation, or effecting a reduction or cancellation of accrued dividends or
other arrearages in respect to such shares;
4. Reducing the stated redemption price of any of his redeemable
shares, altering or abolishing any provision relating to any sinking fund for
the redemption or purchase of any of his shares, or making any of his shares
subject to redemption when they are not otherwise redeemable;
5. Making noncumulative, in whole or in part, dividends of any of
his preferred shares which had theretofore been cumulative;
6. Reducing the stated dividend preference of any of its preferred
shares; or
7. Reducing any stated preferential amount payable on any of his
preferred shares upon voluntary or involuntary liquidation; or
(f) Any corporate action taken, to the extent the articles of
incorporation provide that a voting or nonvoting shareholder is entitled to
dissent and obtain payment for his shares.
(2) A shareholder dissenting from any amendment specified in
paragraph (1)(e) has the right to dissent only as to those of his shares
which are adversely affected by the amendment.
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(3) A shareholder may dissent as to less than all the shares
registered in his name. In that event, his rights shall be determined as if
the shares as to which he has dissented and his other shares were registered
in the names of different shareholders.
(4) Unless the articles of incorporation otherwise provide,
this section does not apply with respect to a plan of merger or share
exchange or a proposed sale or exchange of property, to the holders of shares
of any class or series which, on the record date fixed to determine the
shareholders entitled to vote at the meeting of shareholders at which such
action is to be acted upon or to consent to any such action without a
meeting, were either registered on a national securities exchange or
designated as a national market systems security on an interdealer quotation
system by the National Association of Securities Dealers, Inc. or held of
record by not fewer than 2,000 shareholders.
(5) A shareholder entitled to dissent and obtain payment for
his shares under this section may not challenge the corporate action creating
his entitlement unless the action is unlawful or fraudulent with respect to
the shareholder or the corporation.
607.1320 PROCEDURE FOR EXERCISE OF DISSENTERS' RIGHTS. - (1)(a) If a
proposed corporate action creating dissenters' rights under sec 607.1302 is
submitted to a vote at a shareholders' meeting, the meeting notice shall
state that shareholders are or may be entitled to assert dissenters' rights
and be accompanied by a copy of sec 607.1301, sec 607.1302, and sec 607.1320. A
shareholder who wishes to assert dissenters' rights shall:
1. Deliver to the corporation before the vote is taken written
notice of his intent to demand payment for his shares if the proposed action
is effectuated, and
2. Not vote his shares in favor of the proposed action. A proxy or
vote against the proposed action does not constitute such a notice of intent
to demand payment.
(b) If proposed corporation action creating dissenters' rights under
sec 607.1302 is effectuated by written consent without a meeting, the
corporation shall deliver a copy of sec 607.1301, sec 607.1302, and sec
607.1320 to each shareholder simultaneously with any request for his written
consent or, if such a request is not made, within 10 days after the date the
corporation received written consents without a meeting from the requisite
number of shareholders necessary to authorize the action.
(2) Within 10 days after the shareholders' authorization date, the
corporation shall give written notice of such authorization or consent or
adoption of the plan of merger, as the case may be, to each shareholder who
filed a notice of intent to demand payment for his shares pursuant to
paragraph (1)(a) or, in the case of action authorized by written consent to
each shareholder, excepting any who voted for, or consented in writing to,
the proposed action.
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(3) Within 20 days after the giving of notice to him, any
shareholder who elects to dissent shall file with the corporation a notice of
such election, stating his name and address, the number, classes, and series
of shares as to which he dissents, and a demand for payment of the fair value
of his shares. Any shareholder failing to file such election to dissent
within the period set forth shall be bound by the terms of the proposed
corporate action. Any shareholder filing an election to dissent shall
deposit his certificates for certificated shares with the corporation
simultaneously with the filing of the election to dissent. The corporation
may restrict the transfer of uncertificated shares from the date the
shareholder's election to dissent is filed with the corporation.
(4) Upon filing a notice of election to dissent, the shareholder
shall thereafter be entitled only to payment as provided in this section and
shall not be entitled to vote or to exercise any other rights of a
shareholder. A notice of election may be withdrawn in writing by the
shareholder at any time before an offer is made by the corporation, as
provided in subsection (5), to pay for his shares. After such offer, no such
notice of election may be withdrawn unless the corporation consents thereto.
However, the right of such shareholder to be paid the fair value of his
shares shall cease, and he shall be reinstated to have all his rights as a
shareholder as of the filing of his notice of election, including any
intervening preemptive rights and the right to payment of any intervening
dividend or other distribution or, if any such rights have expired or any
such dividend or distribution other than in cash has been completed, in lieu
thereof, at the election of the corporation, the fair value thereof in cash
as determined by the board as of the time of such expiration or completion,
but without prejudice otherwise to any corporate proceedings that may have
been taken in the interim, if:
(a) Such demand is withdrawn as provided in this section;
(b) The proposed corporate action is abandoned or rescinded or the
shareholders revoke the authority to effect such action;
(c) No demand or petition for the determination of fair value by a
court has been made or filed within the time provided in this section; or
(d) A court of competent jurisdiction determines that such
shareholder is not entitled to the relief provided by this section.
(5) Within 10 days after the expiration of the period in which
shareholders may file their notices of election to dissent, or within 10 days
after such corporate action is effected, whichever is later (but in no case
later than 90 days from the shareholders' authorization date), the
corporation shall make a written offer to each dissenting shareholder who has
made demand as provided in this section to pay an amount the corporation
estimates to be the fair value for such shares. If the corporate action has
not been consummated before the expiration of the 90-day period after the
shareholders' authorization date, the offer may be made conditional upon the
consummation of such action. Such notice and offer shall be accompanied by:
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(a) A balance sheet of the corporation, the shares of which the
dissenting shareholder holds, as of the latest available date and not more
than 12 months prior to the making of such offer; and
(b) A profit and loss statement of such corporation for the 12-month
period ended on the date of such balance sheet or, if the corporation was not
in existence throughout such 12-month period, for the portion thereof during
which it was in existence.
(6) If within 30 days after the making of such offer any shareholder
accepts the same, payment for his share shall be made within 90 days after
the making of such offer or the consummation of the proposed action,
whichever is later. Upon payment of the agreed value, the dissenting
shareholder shall cease to have any interest in such shares.
(7) If the corporation fails to make such offer within the period
specified therefor in subsection (5) or if it makes the offer and any
dissenting shareholder or shareholders fail to accept the same within the
period of 30 days thereafter, then the corporation, within 30 days after
receipt of written demand from any dissenting shareholder given within 60
days after the date on which such corporate action was effected, shall, or at
its election at any time within such period of 60 days may, file an action in
any court of competent jurisdiction in the county in this state where the
registered office of the corporation is located requesting that the fair
value of such shares be determined. The court shall also determine whether
each dissenting shareholder, as to whom the corporation requests the court to
make such determination, is entitled to receive payment for his shares. If
the corporation fails to institute the proceeding as herein provided, any
dissenting shareholder may do so in the name of the corporation. All
dissenting shareholders (whether or not residents of this state), other than
shareholders who have agreed with the corporation as to the value of their
shares, shall be made parties to the proceeding as an action against their
shares. The corporation shall serve a copy of the initial pleading in such
proceeding upon each dissenting shareholder who is a resident of this state
in the manner provided by law for the service of a summons and complaint and
upon each nonresident dissenting shareholder either by registered or
certified mail and publication or in such other manner as is permitted by
law. The jurisdiction of the court is plenary and exclusive. All
shareholders who are proper parties to the proceeding are entitled to
judgment against the corporation for the amount of the fair value of their
shares. The court may, if it so elects, appoint one or more persons as
appraisers to receive evidence and recommend a decision on the question of
fair value. The appraisers shall have such power and authority as is
specified in the order of their appointment or an amendment thereof. The
corporation shall pay each dissenting shareholder the amount found to be due
him within 10 days after final determination of the proceeding. Upon payment
of the judgment, the dissenting shareholder shall cease to have any interest
in such shares.
(8) The judgment may at the discretion of the court, include a fair
rate of interest, to be determined by the court.
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(9) The costs and expenses of any such proceeding shall be
determined by the court and shall be assessed against the corporation, but
all or any part of such costs and expenses may be apportioned and assessed as
the court deems equitable against any or all of the dissenting shareholders
who are parties to the proceeding to whom the corporation has made an offer
to pay for the shares, if the court finds that the action of such
shareholders in failing to accept such offer was arbitrary, vexatious, or not
in good faith. Such expenses shall include reasonable compensation for, and
reasonable expenses of, the appraisers, but shall exclude the fees and
expenses of counsel for, and experts employed by, any party. If the fair
value of the shares, as determined, materially exceeds the amount which the
corporation offered to pay therefor or if no offer was made, the court in its
discretion may award to any shareholder who is a party to the proceeding such
sum as the court determines to be reasonable compensation to any attorney or
expert employed by the shareholder in the proceeding.
(10) Shares acquired by a corporation pursuant to payment of the
agreed value thereof or pursuant to payment of the judgment entered therefor,
as provided in this section, may be held and disposed of by such corporation
as authorized but unissued shares of the corporation, except that, in the
case of a merger, they may be held and disposed of as the plan of merger
otherwise provides. The shares of the surviving corporation into which the
shares of such dissenting shareholders would have been converted had they
assented to the merger shall have the status of authorized but unissued
shares of the surviving corporation. (Last amended by Ch. 93-281, L. '93,
eff. 5-15-93).
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PROXY
AMERICAN BUSINESS COMPUTERS CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Robert A. Cutting and William Lerner, and
each of them, as proxies of the undersigned, with full power of substitution,
to represent and to vote at the Annual Meeting of Stockholders to be held at
Sheraton Suites, 1989 Front Street, Cuyahoga Falls, Ohio, on March 1, 1996, and
any adjournment or postponement thereof, and thereat to vote all shares of
Common Stock of AMERICAN BUSINESS COMPUTERS CORPORATION, held by the
undersigned which the undersigned would be entitled to vote if personally
present, with respect to the matters described on the reverse side of this
proxy card:
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
[ X ] PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE.
WITHHOLD
FOR all nominees AUTHORITY
listed at right to vote for nominee(s) NOMINEES: Robert A. Cutting
Herbert L. Luxenburg
1. ELECTION [ ] [ ] C. Rand Michaels
OF Herbert M. Pearlman
DIRECTORS John E. Stieglitz
INSTRUCTIONS: To withhold your vote for any
individual nominee(s), write the name of the
person(s) for whom your vote is withheld on
the line immediately below.
- -----------------------------------
FOR AGAINST ABSTAIN
2. Approve the Company's 1995 Stock Option [ ] [ ] [ ]
Plan.
3. Approve change of the Company's Name to [ ] [ ] [ ]
"ABC Dispensing Technologies, Inc."
4. Approve Increase in Number of Company's [ ] [ ] [ ]
Authorized Common Stock to 50,000,000
Shares.
5. Approve Reincorporation of Company by [ ] [ ] [ ]
Means of Merger into a Newly Formed,
Wholly-Owned Subsidiary Incorporated in
the State of Delaware.
6. In their discretion, upon such other as may properly come before
the Annual Meeting or any adjournment.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED. IF NO DIRECTION IS MADE, THE SHARES WILL BE VOTED "FOR" THE
ELECTION OF THE LISTED NOMINEES FOR DIRECTOR AND "FOR" PROPOSALS 1, 2, 3, 4,
AND 5.
PLEASE SIGN, DATE AND RETURN THIS PROXY IN THE ENCLOSED ENVELOPE.
SIGNATURE ____________________ __________________________ Dated __________ 1996
SIGNATURE IF JOINTLY OWNED DATED
NOTE: Please sign your name exactly as it appears hereon. When signing as
attorney-in-fact, executor, administrator, trustee or guardian, please add
your title as such. When signing as joint tenants, all parties in the
joint tenancy must sign. If signer is a corporation, please sign in full
corporate name by duly authorized officer or officers and affix the
corporate seal.
