SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
[X] Filed by Registrant
[ ] Filed by a Party other than the Registrant
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
TRIANGLE IMAGING GROUP, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Harold S. Fischer, President
(NAME OF PERSON(S) FILING THE PROXY STATEMENT)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] 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
-----------------------------------------------------------------------
- ----------
(1) Set forth the amount on which the filing fee is calculated and state
how it was determined.
[ ] 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 date of its filing.
1) Amount Previously Paid:
N/A
--------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
N/A
--------------------------------------------------------------
3) Filing Party:
N/A
--------------------------------------------------------------
4) Date Filed:
N/A
--------------------------------------------------------------
<PAGE>
TRIANGLE IMAGING GROUP, INC.
1800 N.W. 49TH STREET, SUITE 100
FORT LAUDERDALE, FLORIDA 33309
----------------------------------------
April 29, 1999
Dear Fellow Shareholders,
It is no secret that to thrive, businesses must change. Change brought myself
and other members of your management team to control of your Company. But as
dramatic as that change might have been, it pales before the potential presented
by the evolutionary changes we have begun to make. With our present management
team, and our proposed Board of Directors, we are on a well-defined mission to
make Triangle a leader - a leader in innovation, a leader in excellence, a
leader in software and services for the Mortgage Banking and Credit Reporting
industries.
Our evolution is taking many forms. We have re-committed ourselves to investment
in Research and Development. We have aggressively pursued the best possible
personnel. And we have laid the groundwork for the release of our software
products to the Internet. Merging with the information superhighway will
instantly make our products and services more accessible to the industry, and
dramatically expand the horizons of our business opportunities.
We have also made some important logistic moves. In February 1999, the Company
relocated its corporate headquarters to a central location in Fort Lauderdale,
Florida. As a result, our operations have become more streamlined and efficient.
This has also allowed us to eliminate redundant positions, thereby reducing
overhead.
With stability returning to management, and our commitment to excellence
re-energized, our experienced sales force is enjoying success, generating new
sales of software and services. In addition, the Company is in the final stages
of negotiating several long term contracts which, when completed, will
significantly add to our profitability.
Our plan for the future is ambitious, and our path toward it well-planned. And
our financial fortunes will demonstrate this. We are anticipating that results
for the first quarter of 1999 will show a return to profitability, and expect
that profitability will increase over the subsequent periods. These are exciting
times for your Company.
I would like to thank our shareholders, our customers, and our employees for the
support given us through the recent past. It has helped us to turn the trend,
and will help us achieve our goals in 1999.
Sincerely,
/s/HAROLD S. FISCHER
- ---------------------------
Harold S. Fischer
President and Director
3
<PAGE>
TRIANGLE IMAGING GROUP, INC.
1800 N.W. 49TH STREET, SUITE 100
FORT LAUDERDALE, FLORIDA 33309
----------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 27, 1999
----------------------------------------
TO THE SHAREHOLDERS OF TRIANGLE IMAGING GROUP, INC.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders (the
"Annual Meeting") of Triangle Imaging Group, Inc., a Florida corporation (the
"Company"), will be held on May 27, 1999, at Travelodge, 1500 West Commercial
Boulevard, Fort Lauderdale, Florida 33309 at 10 a.m., Eastern Daylight Time, and
thereafter as it may from time to time be adjourned, for the purposes stated
below.
1. To elect three (3) directors to the Board of the Company for a
one (1) year term;
2. To approve the adoption of the Company's 1999 Incentive Plan;
3. To amend the Company's Articles of Incorporation to (a) change
the Company's name to "@ebs, inc.," and (b) enable the
Company's Board of Director's to establish the preferences,
limitations and relative rights with respect to any class of
unissued shares of capital stock.
4. To change the Company's state of incorporation from Florida to
Delaware by means of a merger of the Company with and into a
wholly-owned Delaware subsidiary;
5. To ratify certain prior changes to the Company's capital
structure; and
6. To transact such other business as may properly come before
the Annual Meeting or any adjournments thereof.
All Shareholders are cordially invited to attend the Annual Meeting.
Only those Shareholders of record at the close of business on April 20, 1999 are
entitled to notice of and to vote at the Annual Meeting and any adjournments
thereof. A complete list of shareholders entitled to vote at the Annual Meeting
will be available at the Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
April 29, 1999 Charles D. Winslow, Chairman of the Board
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE DATE AND SIGN THE
ENCLOSED FORM OF PROXY AND MAIL IT PROMPTLY IN THE ENCLOSED ENVELOPE TO AMERICAN
STOCK TRANSFER & TRUST COMPANY, 40 WALL STREET, NEW YORK, NEW YORK 10005.
<PAGE>
TRIANGLE IMAGING GROUP, INC.
1800 N.W. 49TH STREET, SUITE 100
FORT LAUDERDALE, FLORIDA 33309
PROXY STATEMENT
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Triangle Imaging Group, Inc., a Florida
corporation (the "Company"), for use at the annual meeting of the Company's
Shareholders to be held on May 27, 1999 at Travelodge, 1500 West Commercial
Boulevard, Fort Lauderdale, Florida 33309, at 10 a.m., local time, and at any
adjournments thereof (the "Annual Meeting").
The Annual Meeting has been called to consider and take action on the
following proposals: (i) to elect three (3) directors to the Board of Directors
of the Company for a one (1) year term, (ii) to approve the adoption of the
Company's 1999 Incentive Plan, (iii) to amend the Company's Articles of
Incorporation (the "Charter Amendment") to (a) change the Company's name to
"@ebs, inc.," and (b) enable the Company's Board of Director's to establish the
preferences, limitations and relative rights with respect to any unissued shares
of capital stock, (iv) to change the Company's state of incorporation from
Florida to Delaware by means of a merger of the Company with and into a
wholly-owned Delaware subsidiary (the "Reincorporation Merger"), (v) to ratify
certain prior changes to the Company's capital structure (the "Ratification"),
and (vi) to transact such other business as may properly come before the Annual
Meeting or any adjournments thereof. The Board of Directors knows of no other
matters to be presented for action at the Annual Meeting. However, if any other
matters properly come before the Annual Meeting, the persons named in the proxy
will vote on such other matters and/or for other nominees in accordance with
their best judgment. THE COMPANY'S BOARD OF DIRECTORS RECOMMENDS THAT THE
SHAREHOLDERS VOTE IN FAVOR OF EACH OF THE PROPOSALS. Only holders of record of
Common Stock at the close of business on April 20, 1999 (the "Record Date") will
be entitled to vote at the Annual Meeting.
The principal executive offices of the Company are located at 1800 N.W.
49th Street, Suite 100, Fort Lauderdale, Florida 33309 and its telephone number
is (954) 229-5100. The approximate date on which this Proxy Statement, the proxy
card and other accompanying materials are first being sent or given to
Shareholders is April 27, 1999. The Company's Annual Report on Form 10-KSB for
the fiscal year ended December 31, 1998, including audited financial statements,
is being sent to Shareholders together with this Proxy Statement and is
incorporated herein by reference. It is recommended that each Shareholder review
the Company's Annual Report.
INFORMATION CONCERNING SOLICITATION AND VOTING
As of the Record Date, there were outstanding 14,143,791 shares of
Common Stock held by approximately 975 holders of record and 1,118 beneficial
owners. Only holders of shares of Common Stock on the Record Date will be
entitled to vote at the Annual Meeting. The holders of Common Stock are entitled
4
<PAGE>
to one vote on all matters presented at the meeting for each share held of
record. The presence in person or by proxy of holders of record of a majority of
the shares outstanding and entitled to vote as of the Record Date shall be
required for a quorum to transact business at the Annual Meeting. If a quorum
should not be present, the Annual Meeting may be adjourned until a quorum is
obtained. The nominees to be elected as a Director named in Proposal 1 must
receive a plurality of the eligible votes cast at the Annual Meeting with
respect to such Proposal. The adoption of the Company's 1999 Incentive Plan
described in Proposal 2 must be approved by a majority of the votes cast with
respect to such proposal. Each of (a) the Charter Amendment described in
Proposal 3, (b) the Reincorporation Merger described in Proposal 4, and (c) the
Ratification described in Proposal 5, must be approved by a majority of the
votes entitled to be cast with respect to such proposals. Abstentions and broker
non-votes will have no effect with respect to Proposals 1, 2 and 5, and will
have the effect of a "no" vote with respect to Proposals 3 and 4. BROKERS WHO
HOLD SHARES IN STREET NAME MAY VOTE ON BEHALF OF BENEFICIAL OWNERS WITH RESPECT
TO PROPOSAL 1. The approval of all other matters to be considered at the Annual
Meeting requires the affirmative vote of a majority of the eligible votes cast
at the Annual Meeting on such matters.
The expense of preparing, printing and mailing this Proxy Statement,
exhibits and the proxies solicited hereby will be borne by the Company which the
Company anticipates costing less than $15,000. In addition to the use of the
mails, proxies may be solicited by officers and directors and regular employees
of the Company, without additional remuneration, by personal interviews,
telephone, telegraph or facsimile transmission. The Company will also request
brokerage firms, nominees, custodians and fiduciaries to forward proxy materials
to the beneficial owners of shares of capital stock held of record and will
provide reimbursements for the cost of forwarding the material in accordance
with customary charges.
Proxies given by Shareholders of record for use at the Annual Meeting
may be revoked at any time prior to the exercise of the powers conferred. In
addition to revocation in any other manner permitted by law, Shareholders of
record giving a proxy may revoke the proxy by an instrument in writing, executed
by the Stockholder or his attorney authorized in writing or, if the Stockholder
is a corporation, under its corporate seal, by an officer or attorney thereof
duly authorized, and deposited either at the corporate headquarters of the
Company at any time up to and including the last business day preceding the day
of the Annual Meeting, or any adjournment thereof, at which the proxy is to be
used, or with the chairman of such Annual Meeting on the day of the Annual
Meeting or adjournment thereof, and upon either of such deposits the proxy is
revoked.
ALL PROXIES RECEIVED WILL BE VOTED IN ACCORDANCE WITH THE CHOICES
SPECIFIED ON SUCH PROXIES. PROXIES WILL BE VOTED IN FAVOR OF A PROPOSAL IF NO
CONTRARY SPECIFICATION IS MADE. ALL VALID PROXIES OBTAINED WILL BE VOTED AT THE
DISCRETION OF THE BOARD OF DIRECTORS WITH RESPECT TO ANY OTHER BUSINESS THAT MAY
COME BEFORE THE ANNUAL MEETING.
None of the matters to be acted on at the Annual Meeting give rise to
any statutory right of a Stockholder to dissent and obtain the appraisal of or
payment for such Stockholder's shares.
5
<PAGE>
PROPOSAL ONE
TO ELECT THREE DIRECTORS TO SERVE FOR ONE YEAR AND UNTIL THEIR SUCCESSORS HAVE
BEEN DULY ELECTED AND QUALIFIED
Under the By-Laws of the Company (the "By-Laws"), the Board of
Directors of the Company is required to be comprised of a minimum of three (3)
directors and a maximum of seven (7) directors, subject to which limitation the
number of directors may be fixed from time to time by action of the shareholders
or of the directors, with all directors elected by the shareholders each year at
the annual shareholders meeting. The Company's board presently consists of three
(3) directors whose terms expire at the Annual Meeting. Officers are elected
annually by and serve at the discretion of the Board of Directors.
The Board has nominated three (3) candidates to serve as directors all
of whom are currently directors. The names and biographical summaries of the
three (3) persons who have been nominated by the Board of Directors to stand for
re-election at the Annual Meeting have been provided below for your information.
Management has proposed that these persons be elected at the Annual Meeting to
serve until the next annual meeting of shareholders. The Proxies will be voted
for the election of the three (3) nominees listed below as directors of the
Company unless otherwise specified on the form provided. The vote of a majority
of the capital stock, present and constituting a quorum at the Annual Meeting,
will be necessary to elect the directors listed below. If, for any reasons, any
of the nominees shall be unable or unwilling to serve, the Proxies will be voted
for a substitute nominee who will be designated by the Board of Directors at the
Annual Meeting. Shareholders may abstain from voting by marking the appropriate
boxes on the enclosed Proxy. Abstentions shall be counted separately and shall
be used for purposes of calculating the existence of a quorum.
BIOGRAPHICAL SUMMARIES OF NOMINEES FOR THE BOARD OF DIRECTORS
HAROLD S. FISCHER has served as President of the Company since April 1997,
President of EBS since January 1997, President of QCC since February 1998 and as
a director of the Company since April 1997. From June 1995 to December 1996, Mr.
Fischer was the President of Turnkey Solutions, Inc., a marketing media
replication and logistics firm. Previously, Mr. Fischer served as Vice President
with Wang Laboratories, Inc. from December 1990 to May 1995 and as a President
of the Commercial Systems Division of Unisys Corporation from June 1988 through
December 1990. Mr. Fischer has held various executive responsibilities with the
Unisys Corporation in his 30 year tenure there.
J. ALAN LINDAUER has served as a director of the Company since October 1998. Mr.
Lindauer has served as a director since July 1993 and as Chairman of the
Executive Committee since December of 1993 of Waterside Capital Corporation, a
Virginia-based Small Business Investment Company. Mr. Lindauer has occupied the
position of President and Chief Executive Officer of Waterside Capital
Corporation since March 1994. Since 1986, Mr. Lindauer has been President of
JTL, Inc., a business consulting firm. Mr. Lindauer is a Certified Management
Consultant. Mr. Lindauer is a director of the following publicly-traded
companies: (i) Avery Communications, Inc., a long distance telecommunications
billing services company; (ii) Branch Bank & Trust of Virginia, a commercial
bank; and (iii) Netplex Group, Inc., a computer systems integration company.
6
<PAGE>
CHARLES D. WINSLOW has served as a member of the Board of Directors since April,
1998 and as its Chairman since December, 1998. Prior to his retirement in 1996,
Mr. Winslow spent thirty-four years with Andersen Consulting, twenty-five of
them as a partner. He managed the Columbus, Ohio consulting practice for several
years, and performed the same duties in their Tokyo office for the five years of
its major expansion. Among the major executive positions he held in the firm was
Managing Partner of the Worldwide Industry Program, and most recently, Worldwide
Managing Partner of Change Management.
All directors hold office until the next annual meeting of shareholders
and the election and qualification of their successors. Officers are elected
annually by the Board of Directors and, subject to existing employment
agreements, serve at the discretion of the Board.
Directors do not receive compensation from the Company for their
participation as members of the Board of Directors. All directors are reimbursed
by the Company for expenses incurred in attending directors' meetings.
There are no family relationships among any of such persons, except
that Harold S. Fischer and the spouse of Charles D. Winslow are second cousins.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE ELECTION
OF MESSRS. HAROLD S. FISCHER, J. ALAN LINDAUER AND CHARLES D. WINSLOW AS
DIRECTORS OF THE COMPANY. UNLESS OTHERWISE INSTRUCTED OR UNLESS AUTHORITY TO
VOTE IS WITHHELD, THE ENCLOSED PROXY WILL BE VOTED FOR THE ELECTION OF THE ABOVE
LISTED NOMINEES.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors met seven (7) times during the fiscal year ended
December 31, 1998. No incumbent Director attended fewer than 75% of the total
number of Board of Directors meetings occurring after his election as a director
of the Company. The Board of Directors does not have any standing committees.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
On December 23, 1998, the Company filed a registration statement on
Form 8-A registering the Company's common stock pursuant to Section 12(g) of the
Securities Exchange Act of 1934 (the "Exchange Act"). Following the filing of
the Form 8-A, the Company became subject to Section 16(a) of the Exchange Act
which requires the Company's directors and executive 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 initial reports
of ownership and reports of changes in ownership of common stock and other
equity securities of the Company. Officers, directors and greater than ten
percent shareholders are required by SEC regulation to furnish the Company with
copies of all Section 16(a) forms they file. No such reports were required to be
filed by the Company's officers, directors and greater than ten percent
beneficial owners during the year ended December 31, 1998.
7
<PAGE>
DIRECTORS AND EXECUTIVE OFFICERS
In addition to the Biographical Summaries of the Nominees for the Board
of Directors above, certain information concerning the present Executive
Officers of the Company is set forth below:
GREGORY J. SEMINACK has been the Company's Vice President of Finance since
August, 1998. From 1987 to July 1998, Mr. Seminack was employed with Unysis
Corporation holding various financial and business management positions, most
recently as Director of Finance having Profit and Loss Statement and Balance
Sheet responsibility for a $250 million division that sells and delivers
computer services and system integration projects.
REBECCA B. WALZAK has been the Vice President and General Manager of EBS
Consulting Services since February 1998. From May 1994 to February 1998, Ms.
Walzak was with Chase Manhattan Mortgage Corp. in the position of First Vice
President - Quality Assurance. Previously, Ms. Walzak was with Prudential Home
Mortgage's Quality Control program from 1985 to May 1994 as Regulatory,
Compliance and Quality Control Officer. Ms. Walzak currently serves as an
executive board member of the Mortgage Bankers Association Quality Assurance
Committee.
PATRICK J. HANEY has served as Executive Vice President of QuickCREDIT Corp.
since June, 1998. From 1996-1998, Mr. Haney was employed with Cellular
Technology Services as Vice President of International Sales. From 1983 to 1996,
Mr. Haney worked for Lotus Systems, Inc. where he held many managerial positions
and was Director of the Southern Region when he left. Mr. Haney has in excess of
thirty years of experience in software/hardware sales and Management.
8
<PAGE>
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
SUMMARY COMPENSATION TABLE
The following table shows all the cash compensation paid or to be paid
by the Company to the Chief Executive Officer, and all officers who received in
excess of $100,000 in annual salary and bonus, for the fiscal years ended
December 31, 1998, 1997 and 1996:
<TABLE>
<CAPTION>
Long Term Compensation
---------------------------------
Annual Compensation Awards Payouts
------------------------------------------------------------------------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Restricted LTIP All Other
Name and Other Annual Stock Options/ Payouts Compensation
Principal Position Year Salary($) Bonus($) Compensation($) Awards SARs(#) ($) ($)
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Vito A. Bellezza(1), 1998 $154,500 $ 30,000 $ 28,040(2) -0- 500,000(3) -0- -0-
CEO
1997 $120,000 $ 33,000 $ -0- -0- 200,000(3) -0- -0-
1996 $ 10,000 -- -- -- -- -- --
Harold S. Fischer, 1998 $154,500 $ 30,000 $ 9,600(4) -0- 50,000 -0- -0-
President
1997 $120,000 $ 23,000 $ -0- -0- 200,000(5) -0- -0-
William R. Daniels 1998 $ 94,000 $ 12,500 $ -0- -0- -0- -0- -0-
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
1. Mr. Bellezza`s employment with the Company terminated in March 1999.
2. Housing and automobile allowance paid by the Company on Mr.Bellezza's behalf.
3. Such options were cancelled in March 1999.
4. Automobile expenses paid by the Company.
5. Options exercisable at $.875 until October 31, 2002.
The following table sets forth certain information with respect to
options granted during the last fiscal year to the Company's Executive Officers
named in the above Summary Compensation Table.
<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
(a) (b) (c) (d) (e)
% of Total Options
Number of Securities Options/SARs
Granted
Underlying Option/ to Employees in Exercise or Base Expiration
Name SARs Granted (#) Fiscal Year Price (# Share) Date
- ------------------------ ----------------------- ----------------------- ----------------------- -----------------------
<S> <C> <C> <C> <C>
Vito A. Bellezza 500,000(1) 25.9% $1.875 3/13/03
Harold S. Fischer 500,000 25.9% $1.875 3/13/03
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
1. Such Options were cancelled in March 1999.
9
<PAGE>
The following table sets forth certain information with respect to
options exercised during the fiscal year ended December 31, 1998, by the
Company's Executive Officers named in the Summary Compensation Table, and with
respect to unexercised options held by such person at the end of the fiscal year
ended December 31, 1998.
<TABLE>
<CAPTION>
AGGREGATE OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION/SAR VALUES
(a) (b) (c) (d) (e)
----------------------------------------------------------
Number of Value of
Securities Underlying Unexercised
Unexercised Options/ In-the-Money
SARs at FY-End (#) Options/SARs at
Shares Acquired Value Exercisable/ FY-End Exercisable/
on Exercise (#) Realized ($) Unexercisable Unexercisable
-----------------------------------------------------------------------------------------------
Name
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Vito A. Bellezza 0 0 1,500,000/0(2) $1,912,500/0
Harold S. Fischer 0 0 700,000/0 $ 100,000/0
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
(1) Based upon a closing price of $1.375 per share of the Company's Common Stock
as reported by the OTC Bulletin Board for December 31, 1998.
(2) Certain options held by Mr. Bellezza may be subject to cancellation in the
event that the Company's Board of Directors determines that such securities were
not validly issued or Mr. Bellezza is determined to be liable for damages caused
to the Company.
EMPLOYMENT AGREEMENTS
As of January 7, 1998, the Company entered into a two (2) year
employment agreement with Vito Bellezza. The agreement provided for Mr. Bellezza
to receive a salary of $156,000 per annum during the first year and an annual
increase as determined in the discretion of the Board of Directors. The
agreement also provides for the payment of a quarterly bonus in cash to Mr.
Bellezza based upon the Company achieving certain quarterly profit targets. In
addition, Mr. Bellezza was also granted the right to purchase ten percent (10%)
of the outstanding Common Stock of EBS if EBS (i) files for an initial public
offering, (ii) is acquired by another company, (iii) in the event of the death
of Mr. Bellezza or (iv) Mr. Bellezza terminates his employment with the Company.
Mr. Bellezza was also entitled to reimbursement of business expenses including a
car allowance of $800 per month. Mr. Bellezza was terminated for "cause" under
his employment agreement in March, 1999.
As of January 7, 1998, the Company entered into a two (2) year
employment agreement with Harold S. Fischer, pursuant to which Mr. Fischer
serves as the Company's President. The agreement provides for Mr. Fischer to
receive a salary of $156,000 per annum during the first year and an annual
increase as determined in the discretion of the Board of Directors. The
agreement also provides for the payment of a quarterly bonus in cash to Mr.
Fischer based upon the Company achieving certain quarterly profit targets. In
addition, Mr. Fischer has been granted the right to purchase ten percent (10%)
of the outstanding Common Stock of EBS if EBS (i) files an initial public
offering, (ii) is acquired by another company, (iii) in the event of the death
10
<PAGE>
of Mr. Fischer or (iv) Mr. Fischer terminates his employment with the Company.
Mr. Fischer is also entitled to reimbursement of business expenses including a
car allowance of $800 per month.
DESCRIPTION OF THE OPTION PLANS
As of December 17, 1997, the Board of Directors of the Company adopted
the 1997 Employee Stock Option Plan (the "Employee Plan"), and the 1997 Officers
and Directors Stock Option Plan (the "Officers and Directors Plan", together
with the Employee Plan, the "Option Plans"). The purpose of the Option Plans is
to provide a means whereby selected employees, officers, and directors of the
Company, or of any parent or subsidiary thereof, may be granted incentive stock
options and/or nonqualified stock options to purchase shares of Common Stock in
order to attract and retain the services or advice of such employees, officers,
and directors and to provide additional incentive for such persons to exert
maximum efforts for the success of the Company and its affiliates by encouraging
stock ownership in the Company. The description of the Option Plans set forth
below is qualified in its entirety by reference to the full text of each of the
Option Plans.
The maximum number of shares of Common Stock with respect to which
awards may be granted pursuant to the Employee Plan and Officers and Directors
Plan was initially 300,000 shares and 600,000 shares, respectively. On July 30,
1998, the Board reserved an additional 50,000 shares for issuance pursuant to
the Employee Plan and an additional 350,000 shares for issuance pursuant to the
Officers and Directors Plan and amended said plans to reflect the same. On
October 5, 1998, the Board of Directors reserved an additional 1,150,000 shares
for issuance pursuant to the Officers and Directors Plan and amended said plan
to reflect the additional shares. Shares issuable under the Option Plans may be
either treasury shares or authorized but unissued shares, or shares purchased on
the open market and shall include shares representing the unexercised portion of
Options granted under the Plans which expire or terminate without being
exercised in full. The number of shares available for issuance will be subject
to adjustment to prevent dilution in the event of stock splits, stock dividends
or other changes in the capitalization of the Company.
Subject to compliance with Rule 16b-3 of the Securities Exchange Act of
1934, the Plan shall be administered by the Board of Directors of the Company
(the "Board") or, in the event the Board shall appoint and/or authorize a
committee, such as the Compensation Committee, of two or more members of the
Board to administer the Plan, by such committee. The administrator of the Plan
shall hereinafter be referred to as the "Plan Administrator". Except for the
terms and conditions explicitly set forth herein, the Plan Administrator shall
have the authority, in its discretion, to determine all matters relating to the
options to be granted under the Plan, including, without limitation, selection
of whether an option will be an incentive stock option or a nonqualified stock
option, selection of the individuals to be granted options, the number of shares
to be subject to each option, the exercise price per share, the timing of grants
and all other terms and conditions of the options.
Options granted under the Option Plans may be "incentive stock options"
("Incentive Options") within the meaning of Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code"), or stock options which are not incentive
stock options ("Non-Incentive Options" and, collectively with Incentive Options,
hereinafter referred to as "Options"). Each Option may be exercised in whole or
11
<PAGE>
in part; provided, that only whole shares may be issued pursuant to the exercise
of any Option. Subject to any other terms and conditions herein, the Plan
Administrator may provide that an Option may not be exercised in whole or in
part for a stated period or periods of time during which such Option is
outstanding; provided, that the Plan Administrator may rescind, modify, or waive
any such limitation (including by the acceleration of the vesting schedule upon
a change in control of the Company) at any time and from time to time after the
grant date thereof. During an Optionee's lifetime, any Incentive Options granted
under the Plan are personal to such Optionee and are exercisable solely by such
Optionee.
Payment for shares of Common Stock purchased upon exercise of an Option
granted under either of the Plans must be made in full in cash at the time of
such exercise; provided, however, that the Plan Administrator can determine at
the time the Option is granted in the case of Incentive Options, or at any time
before exercise in the case of Nonincentive Options, that additional forms of
payment will be permitted. To the extent permitted by the Plan Administrator and
applicable laws and regulations (including, without limitation, federal tax and
securities laws and regulations and state corporate law), an option may be
exercised by:
(a) delivery of shares of Common Stock of the Company held by
an Optionee having a fair market value equal to the exercise price, such fair
market value to be determined in good faith by the Plan Administrator;
(b) delivery of a properly executed Notice of Exercise,
together with irrevocable instructions to a broker, all in accordance with the
regulations of the Federal Reserve Board, to promptly deliver to the Company the
amount of sale or loan proceeds to pay the exercise price and any federal,
state, or local withholding tax obligations that may arise in connection with
the exercise; or
(c) delivery of a properly executed Notice of Exercise,
together with instructions to the Company to withhold from the shares of Common
Stock that would otherwise be issued upon exercise that number of shares of
Common Stock having a fair market value equal to the option exercise price.
Upon a Change in Control of the Company, any award carrying a right to
exercise that was not previously exercisable shall become fully exercisable, the
restrictions, deferral limitations and forfeiture conditions applicable to any
other award granted shall lapse and any performance conditions imposed with
respect to awards shall be deemed to be fully achieved.
Awards under the Option Plans may not be transferred, pledged,
mortgaged, hypothecated or otherwise encumbered other than by will or under the
laws of descent and distribution.
The Board may amend, alter, suspend, discontinue or terminate the
Option Plans at any time, except that the Board may not increase the number of
shares subject to the Plan, unless such increase is due to a reclassification or
increase or decrease in the number of the issued shares of the Company's Common
Stock, or reduce the option exercise price below 85% of fair market value of the
shares subject to the option at the time the option was granted. In addition, no
amendment to, or alteration, suspension, discontinuation or termination of the
Option Plans may materially impair the rights of any participant with respect to
any award without such participant's consent. Unless terminated earlier by
12
<PAGE>
action of the Board of Directors, the Employee Plan and the Officer and Director
Plan shall terminate ten (10) years and five (5) years, respectively, after
adoption by the shareholders.
See "Proposal Two" for summary of the 1999 Incentive Plan.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth information as of the Record Date with
respect to the beneficial ownership of the outstanding shares of the Company's
Common Stock by (i) each person known by the Company to beneficially own five
percent (5%) or more of the outstanding shares; (ii) the Company's officers and
directors; and (iii) the Company's officers and directors as a group.
<TABLE>
<CAPTION>
Name and Address of Shares of Common Stock
Beneficial Owner(1) Beneficially Owned(2) Percent of Class(3)
- ------------------- --------------------- -------------------
<S> <C> <C>
Vito A. Bellezza(4) 5,242,136(5) 33.5%
Harold S. Fischer(6) 2,991,500(7) 20.2%
J. Alan Lindauer(8) 500,000(9) 3.5%
Charles D. Winslow(10) 150,000(11) 1.1%
Greg Seminack(12) 75,000(13) *
Rebecca Walzak(14) 17,000 *
Patrick J. Haney(15) 54,200(16) *
All Officers and Directors 3,787,700(7)(9)(11)(13)(16) 25.8%
as a Group (6 persons)
</TABLE>
- ----------
* represents less than 1% of the total number of shares of the Company's
Common Stock outstanding
1. Unless noted otherwise, the address for such person is c/o Triangle
Imaging Group, Inc., 1800 NW 49th Street, Suite 100, Ft. Lauderdale, FL
33309.
2. Unless noted otherwise, all shares indicated as beneficially owned are
held of record by and the right to vote and transfer such shares lies
with the person indicated. A person is deemed to be a beneficial owner
of any securities of which that person has the right to acquire
beneficial ownership within sixty (60) days.
3. Calculated based upon 14,143,791 shares of common stock outstanding on
April 20, 1999.
4. Mr. Bellezza was the Chairman of the Board of the Company until
December 1998 and Chief Executive Officer of the Company, EBS and QCC
until March 1999.
5. Includes (i) 485,500 shares held of record by Judith Bellezza (a/k/a
Judith Klotz), Mr. Bellezza's wife, (ii) 1,500,000 shares of Common
Stock allegedly issuable upon the exercise of stock options at exercise
prices ranging from $.05 to $.20 per share, and (iii) 211,636 believed
to be owned by DeltaCap Corporation, a company believed to be
beneficially owned by Mr. Bellezza. The beneficial ownership of the
Company's securities by Mr. Bellezza is unclear to the Company because
of (i) Mr. Bellezza's failure to file appropriate documents indicating
his beneficial ownership of the Company's securities with the
Securities and Exchange Commission and (ii) a pending investigation by
the Board of Directors assessing the validity of the Company's
securities issued to Mr. Bellezza, Ms. Bellezza and Omnicap
Corporation.
6. Mr. Fischer is a director and President of the Company, EBS and QCC.
7. Includes (i) 291,500 shares of Common Stock owned by Mr. Fischer's
wife, and (ii) 700,000 shares of Common Stock issuable upon the
exercise of stock options at exercise prices ranging from $.875 to
$1.875 per share. Mr. Fischer disclaims the beneficial ownership of
6,368,454 shares of Common Stock held by certain stockholders of the
Company, each of whom have agreed pursuant to the terms of a
stockholders agreement to vote in favor of the directors nominated by
Mr. Fischer. See "Stockholders Agreement."
8. Mr. Lindauer is a director of the Company.
13
<PAGE>
9. Includes 500,000 shares of Common Stock held by Waterside Capital
Corporation. Mr. Lindauer is the President and Chief Executive Officer
of Waterside Capital Corporation.
10. Mr. Winslow is a director of the Company.
11. Includes 50,000 shares of Common Stock issuable upon the exercise of
stock options at an exercise price of $2.50 per share.
12. Mr. Seminack is the Company's Vice President of Finance.
13. Includes 75,000 shares of Common Stock issuable upon the exercise of
stock options at an exercise price of $3.00 per share.
14. Ms. Walzak is the Company's Vice President of Consulting.
15. Mr. Haney is the Executive Vice President of QCC.
16. Includes 25,000 shares of Common Stock issuable upon the exercise of
stock options exercisable at an exercise price of $2.50 per share.
STOCKHOLDERS AGREEMENT
As of April 16, 1999, shareholders of the Company beneficially holding
an aggregate of 6,368,454 shares of Common Stock, or 45.7% of the total number
of shares outstanding, entered into a Stockholders Agreement pursuant to which
the participating shareholders (the "Participating Shareholders") agreed to
certain matters pertaining to the governance of the Company and the
circumstances under which the shares held by the Participating Shareholders may
be sold or transferred. The Participating Shareholders agreed, among other
things, that (i) at any annual or special meeting of stockholders called for the
purpose of voting on the election of directors, or by consensual action of
stockholders with respect to the election of directors, the Participating
Stockholders will vote the shares of the Company's Common Stock held thereby in
favor of the directors nominated by Harold S. Fischer, the Company's President,
and (ii) except for certain permitted transfers, each Participating Shareholder
will not sell or transfer shares of the Company's Common Stock held thereby
without first granting the Company and then the other Participating Shareholders
with a right of first offer. Although the Company is not a party to the
Stockholders Agreement, certain members of management are Participating
Shareholders, including Harold S. Fischer, the Company's President.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On August 22, 1995, the Company allegedly issued 10,000 shares of Class
A Convertible Preferred Stock to Vito Bellezza, the Company's former Chairman of
the Board and Chief Executive Officer, in exchange for the payment of $10,000.
The shares of Class A Convertible Stock were allegedly convertible into an
aggregate of 1,500,000 shares of the Company's Common Stock. On March 23, 1998,
the Company issued 1,500,000 shares of Common Stock to Mr. Bellezza in exchange
for the cancellation of the 10,000 shares of Class A Convertible Preferred
Stock.
On October 31, 1995, the Company issued 720,000 shares of Common Stock
to Mr. Bellezza allegedly for consulting fees and expenses incurred by him and
280,000 shares of Common Stock to Omnicap Corp., a corporation controlled by Mr.
Bellezza, allegedly for satisfaction of rent and other services provided by
Omnicap.
On November 15, 1995, the Company issued 100,000 shares of Common Stock
to Mr. Bellezza allegedly for services rendered to the Company without
compensation during 1995.
14
<PAGE>
On September 4, 1996, the Company issued 350,000 shares of Common Stock
to Mr. Bellezza allegedly as compensation for settling an outstanding lawsuit
against the Company.
On October 31, 1996, the Company issued 275,000 shares of Common Stock
to Mr. Bellezza allegedly for services rendered to the Company without
compensation during 1996.
On January 23, 1997, in exchange for an investment of $100,000 made by
Mr. Bellezza, the Company issued (i) a subordinated note in the amount of
$50,000, (ii) options to purchase 1,000,000 shares of the Company's Common Stock
at an exercise price of $.05 per share, and (iii) options to purchase 500,000
shares of the Company's Common Stock at $.20 per share.
On October 30, 1997, the Company issued to each of Messrs. Bellezza and
Harold S. Fischer options under the Officers and Directors Stock Option Plan in
the amount of 200,000 shares exercisable for a period of five years at $.875 per
share. Mr. Bellezza's options terminated when his employment with the Company
terminated in March 1999.
During 1997, the Company issued an aggregate of 2,283,000 shares of
Common Stock to the Company's President and Director, Harold S. Fischer and his
wife for the consideration of $743,700.
On March 13, 1998, the Company issued options to purchase 500,000
shares of Common Stock at an exercise price of $1.875 per share to each of Vito
Bellezza and Harold S. Fischer. Mr. Bellezza's options terminated when his
employment with the Company terminated in March 1999.
On October 15, 1998, the Company entered into a Series C Preferred
Stock Purchase Agreement (the "Purchase Agreement") with Waterside Capital
Corporation, a small business investment company ("Waterside"), pursuant to
which the Company has agreed to issue 1,500 shares of the Company's Series C
Preferred Stock and a Warrant exercisable for shares of the Company's Common
Stock (the "Warrant") in exchange for the investment of $1,500,000. The Purchase
Agreement requires that the Company use the proceeds from the transaction to
repay a portion of that certain promissory note issued by the Company to the
former owners of Engineered Business Systems, Inc., a wholly owned subsidiary of
the Company, repay trade payables and for working capital purposes. The Company
is also obligated under the terms of the Purchase Agreement to cause a nominee
of Waterside to be elected to the Board of Directors of the Company which
obligation has been satisfied by the appointment of Mr. J. Alan Lindauer to the
Board of Directors. In light of the fact that the Company was not able to
lawfully assign rights and preferences to a class of preferred stock under its
existing Articles of Incorporation, the Company issued to Waterside a promissory
note in the aggregate principal amount of $1,500,000 (the "Note") in lieu of
issuing shares of the Company's Series C Preferred Stock at the closing. The
Note bears interest at the rate of 14% per annum; provided however, that should
the Company issue to Waterside the shares of the Company's Series C Preferred
Stock purchased pursuant to the Purchase Agreement prior to January 15, 1998,
all of the Company's obligations under the Note shall terminate and no principal
and interest shall be due and payable to Waterside. To date, the Company has not
issued the shares of Series C Preferred Stock to Waterside. See "Proposal Three"
regarding an amendment to the Company's Articles of Incorporation authorizing
the issuance of preferred stock with specific rights and preferences.
15
<PAGE>
Upon issuance of the Company's Series C Preferred Stock, the holders
thereof will have the right (i) to receive a liquidation payment of $1,000 per
share plus accrued unpaid dividends, (ii) to receive a quarterly cash dividend
of $31.25 per share, (iii) to vote with respect to certain matters which
adversely effect the holder of Series C Preferred Stock, (iv) to elect one
member to the Board of Directors of the Company, and (v) to require the Company
to redeem the shares of Series C Preferred Stock commencing as of October 15,
2003 at a price of $1,500 per share. In addition, the Company may not (a) issue
any shares of capital stock with rights pari passu with, or superior to, the
Series C Preferred Stock or (b) redeem under certain circumstances shares of
capital stock ranking junior to the Series C Preferred Stock, without the prior
written consent of the holders of a majority of the Series C Preferred shares.
The Warrant entitled the holder to purchase up to the greater of (i)
500,000 shares of the Company's Common Stock or (ii) 1% of the shares of the
Company's Common Stock outstanding on a fully diluted basis. The Warrant was
exercisable at any time prior to October 15, 2005. In connection with the
settlement of a pending legal proceeding brought by Waterside against the
Company, the exercise price of the Warrant was reduced to $.05 per share. The
Warrant was exercised in full in April 1999.
On April 15 1998, the Company issued options to purchase 50,000 shares
of Common Stock to Charles D. Winslow, the Company's Chairman of the Board, at
an exercise price of $2.50 per share.
PROPOSAL TWO
ADOPTION OF THE 1999 INCENTIVE PLAN
As of March 10, 1999 the Board of Directors of the Company, subject to
approval of the Company's shareholders, adopted the 1999 Incentive Plan
(hereinafter called the "1999 Plan"). The 1999 Plan has been adopted for the
purpose of attracting and retaining persons of ability as directors, employees
or consultants or advisors of the Company. and its subsidiaries, motivate and
reward good performance, encourage such employees to continue to exert their
best efforts on behalf of the Company and its subsidiaries and provide
opportunities for stock ownership by such employees in order to increase their
proprietary interest in the Company by providing incentive awards to key
employees, whose responsibilities and decisions directly affect the performance
of the Company and its subsidiaries. A copy of the 1999 Plan is attached as
Annex A to this Proxy Statement and the description of the 1999 Plan set forth
below is qualified in its entirety by reference to the full text of the 1999
Plan.
DESCRIPTION OF THE 1999 PLAN
As of March 10, 1999 the Board of Directors of the Company, subject to
approval of the Company's shareholders, adopted the 1999 Incentive Plan
(hereinafter called the "1999 Plan"). The 1999 Plan has been adopted for the
purpose of attracting and retaining persons of ability as directors, employees
or consultants or advisors of the Company. and its subsidiaries, motivate and
reward good performance, encourage such employees to continue to exert their
best efforts on behalf of the Company and its subsidiaries and provide
opportunities for stock ownership by such employees in order to increase their
16
<PAGE>
proprietary interest in the Company by providing incentive awards to key
employees, whose responsibilities and decisions directly affect the performance
of the Company and its subsidiaries.
The maximum number of shares of Common Stock with respect to which
awards may be granted pursuant to the 1999 Plan is initially 4,000,000 shares.
Shares issuable under the 1999 Plan may be either treasury shares or authorized
but unissued shares. The number of shares available for issuance will be subject
to adjustment to prevent dilution in the event of stock splits, stock dividends
or other changes in the capitalization of the Company.
Subject to compliance with Rule 16b-3 of the Securities Exchange Act of
1934, the Plan shall be administered by the Board of Directors of the Company
(the "Board") or, in the event the Board shall appoint and/or authorize a
committee, such as the Compensation Committee, of two or more members of the
Board to administer the Plan, by such committee. The administrator of the Plan
shall hereinafter be referred to as the "Plan Administrator". Except for the
terms and conditions explicitly set forth herein, the Plan Administrator shall
have the authority, in its discretion, to determine all matters relating to the
options to be granted under the Plan, including, without limitation, selection
of whether an option will be an incentive stock option or a nonqualified stock
option, selection of the individuals to be granted options, the number of shares
to be subject to each option, the exercise price per share, the timing of grants
and all other terms and conditions of the options.
The Plan Administrator can determine at the time the option is granted
in the case of incentive stock options, or at any time before exercise in the
case of nonqualified stock options, that additional forms of payment will be
permitted. To the extent permitted by the Plan Administrator and applicable laws
and regulations (including, without limitation, federal tax and securities laws
and regulations and state corporate law), an option may be exercised by:
(a) delivery of shares of Common Stock of the Company held by
an Optionee having a fair market value equal to the exercise price, such fair
market value to be determined in good faith by the Plan Administrator;
(b) delivery of a properly executed Notice of Exercise,
together with irrevocable instructions to a broker, all in accordance with the
regulations of the Federal Reserve Board, to promptly deliver to the Company the
amount of sale or loan proceeds to pay the exercise price and any federal,
state, or local withholding tax obligations that may arise in connection with
the exercise; or
(c) delivery of a properly executed Notice of Exercise,
together with instructions to the Company to withhold from the shares of Common
Stock that would otherwise be issued upon exercise that number of shares of
Common Stock having a fair market value equal to the option exercise price.
Upon a Change in Control of the Company, any award carrying a right to
exercise that was not previously exercisable shall become fully exercisable, the
restrictions, deferral limitations and forfeiture conditions applicable to any
other award granted shall lapse and any performance conditions imposed with
respect to awards shall be deemed to be fully achieved.
17
<PAGE>
Awards under the 1999 Plan may not be transferred, pledged, mortgaged,
hypothecated or otherwise encumbered other than by will or under the laws of
descent and distribution, except that the Committee may permit transfers of
awards for estate planning purposes if, and to the extent, such transfers do not
cause a participant who is then subject to Section 16 of the Exchange Act to
lose the benefit of the exemption under Rule 16b-3 for such transactions.
The Board may amend, alter, suspend, discontinue or terminate the 1999
Plan at any time, except that any such action shall be subject to stockholder
approval at the annual meeting next following such Board action if such
stockholder approval is required by federal or state law or regulation or the
rules of any exchange or automated quotation system on which the Common Stock
may then be listed or quoted, or if the Board of Directors otherwise determines
to submit such action for stockholder approval. In addition, no amendment,
alteration, suspension, discontinuation or termination to the 1999 Plan may
materially impair the rights of any participant with respect to any award
without such participant's consent. Unless terminated earlier by action of the
Board of Directors, the 1999 Plan shall terminate ten (10) years after adoption
by the shareholders.
TYPES OF AWARDS
STOCK OPTIONS. Options granted under the 1999 Plan may be "incentive
stock options" ("Incentive Options") within the meaning of Section 422 of the
Code or stock options which are not incentive stock options ("Non-Incentive
Options" and, collectively with Incentive Options, hereinafter referred to as
"Options") will be granted, the number of shares subject to each Option granted,
the prices at which Options may be exercised (which in the case of an Incentive
Option shall not be less than the Fair Market Value of shares of Common Stock on
the date of grant), whether an Option will be an Incentive Option or a
Non-Incentive Option, the time or times and the extent to which Options may be
exercised and all other terms and conditions of Options will be determined by
the Committee.
Each Incentive Option shall terminate no later than ten (10) years from
the date of grant, except as provided below with respect to Incentive Options
granted to 10% Stockholders (as hereinafter defined). Each Non-Incentive Option
shall terminate not later than ten (10) years and one day from the date of
grant. The exercise price at which the shares may be purchased incident to an
Incentive Option may not be less than the Fair Market Value of shares of Common
Stock at the time the Option is granted, except as provided below with respect
to Incentive Options granted to 10% Stockholders.
The exercise price of an Incentive Option granted to a person possessing
more than 10% of the total combined voting power of all shares of stock of the
Company or a parent or subsidiary of the Company ("10% Stockholder") shall in no
event be less than 110% of the Fair Market Value of the shares of the Common
Stock at the time the Incentive Option is granted. The term of an Incentive
Option granted to a 10% Stockholder shall not exceed five (5) years from the
date of grant.
The exercise price of the shares to be purchased pursuant to each
Option shall be paid (i) in full in cash, (ii) by delivery (i.e., surrender) of
shares of the Company's Common Stock owned by the optionee at the time of the
18
<PAGE>
exercise of the Option, (iii) in such other consideration as the Committee deem
appropriate, or (iv) if any combination of cash, surrender of share or such
other consideration having a total value equal to the purchase price.
STOCK APPRECIATION RIGHTS. The Committee is authorized to grant stock
appreciation rights ("SARs") under the 1999 Plan on the same basis as it may
grant an Option. SARs are a form of award whereby the Company calculates the
amount of a cash payment to be made to an award recipient based upon an increase
in the market value of a fixed number shares of Common Stock during a
pre-determined period of time. SARs may be granted alone or in combination with
either an Incentive Option or a Non-Incentive Option. The Committee may
determine the number of shares of common stock that shall be used to determine
the value of the SAR and the time or times during which the SAR may be
exercised. The exercise of an SAR may be conditioned by the Committee upon the
satisfaction of certain events, performance of the recipient of other criteria.
RESTRICTED AND DEFERRED STOCK. An award of restricted stock or deferred
stock may be granted under the 1999 Plan. Restricted stock is subject to
restrictions on transferability and other restrictions as may be imposed by the
Committee at the time of grant. In the event that the holder of restricted stock
ceases to be employed by the Company during the applicable restrictive period,
restricted stock that is at the time subject to restrictions shall be forfeited
and reacquired by the Company. Except as otherwise provided by the Committee at
the time of grant, a holder of restricted stock shall have all the rights of a
stockholder including and receive other distribution, without limitation, the
right to vote restricted stock and the right to recover dividends thereon. An
award of deferred stock is an award that provides for the issuance of stock upon
expiration of a deferral period established by the Committee. Except as
otherwise determined by the Committee, upon termination of employment of the
recipient of the award during the applicable deferral period, all stock that is
at the time subject to deferral shall be forfeited. Until such time as the stock
which is the subject of the award is unissued, the recipient of the award has no
rights as a stockholder.
PERFORMANCE UNITS. Performance Units may be granted by the Committee to
individuals or groups of individuals participating under the 1999 Plan.
Performance Units are tied to the successful completion of certain performance
driven Company goals during a given period of time and will be assigned a dollar
value by the Committee. Upon the satisfactory attainment of the goal identified
by the Committee during the period prescribed for its completion, the
participant or participants reaching such goal shall be entitled to a payment in
settlement of each Performance Unite earned by such participant. Certain
adjustments to the amount of the cash payment, if any, to be made incident to a
grant of Performance Units may be made by the Committee in the event a
participant ceases to be employed by the Company during the performance period
or upon the occurrence of a significant event that causes the attainment of the
prescribed goal more or less likely to occur during the performance period. Each
Performance Unit may be paid in whole shares of Common Stock, including
restricted stock and deferred stock, or cash, or in any combination of Common
Stock and cash.
LOANS AND SUPPLEMENTAL CASH PAYMENTS. The Committee may provide for
supplemental cash payments and loans to participants in the 1999 Plan in
connection with awards granted under the 1999 Plan. The Committee shall specify
the terms and conditions of such payments, provided that in the case of
supplemental cash payments the amount of such payment shall not exceed (i) in
the case of an Option, the excess of the fair market value of the shares of
19
<PAGE>
Common Stock on the date of exercise over the option price, or (ii) in the case
of award of an SAR, Performance Unit, Restricted Stock or Deferred Stock, the
value of the shares of Common Stock and other consideration issued in payment of
such award. In the case of loans, any such loan shall be evidenced by a written
loan agreement or other instrument setting forth all terms and conditions of the
loan.
RECOMMENDATION OF BOARD OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE 1999 PLAN.
UNLESS MARKED TO THE CONTRARY, PROXIES RECEIVED FROM SHAREHOLDERS WILL BE VOTED
IN FAVOR OF THE PROPOSED 1999 PLAN.
PROPOSAL THREE
20
<PAGE>
AMENDMENT OF THE ARTICLES OF INCORPORATION
The shareholders of the Company are being asked to approve the Charter
Amendment which will (a) change the Company's name to "@ebs, inc.," and (b)
enable the Company's Board of Director's to establish the preferences,
limitations and relative rights with respect to any unissued shares of capital
stock which may be considered a modification or exchange of securities invoking
the requirements of Item 12 of Rule 14a-101 of the Securities Exchange Act of
1934. In compliance therewith, the Company has attached hereto its Annual Report
on Form 10-KSB for the year ended December 31, 1998 which is incorporated by
reference herein.
The Board of Directors believes that it would be in the best interests
of both the Company and its shareholders to effect the Charter Amendment which
has been adopted by the Board of Directors, subject to approval of the Company's
shareholders. Approval will require the affirmative vote of the holders of a
majority of the outstanding shares of Common Stock. The Board of Directors
reserves the right, notwithstanding stockholder approval and without further
action by the shareholders, not to proceed with the Charter Amendment, if, at
any time prior to filing the amendment with the Secretary of State of the State
of Florida, the Board of Directors, in its sole discretion, determines that the
Charter Amendment is no longer in the best interests of the Company and its
shareholders.
NAME CHANGE
The Company's present name, Triangle Imaging Group, Inc., was chosen by
the Company in April 1995 to reflect the Company's imaging technology and the
business it was then pursuing with respect to aircraft inspections. Since that
time, the Company has changed its business and operations by acquiring
Engineered Business Systems, Inc. in December 1996 and forming QuickCredit
Corporation as a wholly owned subsidiary in February 1998. Given that the
Company, through its wholly owned subsidiaries, creates software and provides
services to the mortgage lending and credit agency industries, the Board of
Directors has determined it to be in the best interests of the Company to change
its name to one which the Company hopes will enhance a new name will foster
goodwill with the public and existing and potential customers. Accordingly, the
Board of directors and management of the Company believe that by changing its
name to "@ebs inc.", the public and customers will become better informed as to
the nature of the Company's business and the industry in which the Company
operates.
BOARD ESTABLISHED PREFERENCES, LIMITATIONS AND RIGHTS FOR PREFERRED STOCK
The Board of Directors has approved, subject to stockholder approval,
an amendment to the Company's Articles of Incorporation authorizing the Board of
Directors to issue shares of capital stock with preferences, limitations and
rights as established by the Board of Directors. Absent such an amendment to the
Company's Articles of Incorporation, the Board may not issue shares of capital
stock with specifies preferences, limitations and rights without prior
stockholder approval. The provisions to be included in such amendment are often
referred to as "blank check" provisions, as they give the Board of Directors the
flexibility, at any time or from time to time, without further shareholder
approval, to create one or more series of Preferred Stock and to determine the
preferences, limitations and relative rights of each such series, including but
21
<PAGE>
not limited to (i) the number of shares, (ii) dividend rights, (iii) voting
rights, (iv) conversion privileges, (v) redemption provisions, (vi) sinking fund
provisions, (vii) rights upon liquidation, dissolution or winding up of the
Company and (viii) other preferences, limitations and relative rights of such
series.
The Board of Directors believes that permitting the Board to authorize
the issuance of up to 1,000,000 shares of "blank check" Preferred Stock provides
the Company with the flexibility to address potential future financing needs by
creating a series of Preferred Stock customized to meet the needs of any
particular transaction and to market conditions. The Company also could issue
Preferred Stock for other corporate purposes, such as to implement joint
ventures or to make acquisitions. Except for the issuance of 1,000 shares of
Series C Preferred Stock to be issued to Waterside Capital Corporations
("Waterside") as described below, the Company is not currently considering the
issuance of Preferred Stock for such financing or transactional purposes and has
no present intention to issue any series of Preferred Stock. The Board and
management believe that the Company should have the flexibility to issue
Preferred Stock, along with its ability to issue debt and/or additional shares
of Common Stock. The Preferred Stock may be issued at such times, to such
persons and for such consideration as the Board may determine to be in the
Company's best interests without further shareholder approval, except as
otherwise required by statute, stock exchange rules, if applicable, or the
Company's loan documents, if applicable.
If any series of Preferred Stock authorized by the Board provides for
dividends, such dividends, when and as declared by the Board of Directors out of
any funds legally available therefor, may be cumulative and may have a
preference over the Common Stock as to the payment of such dividends. In
addition, if any series of Preferred Stock authorized by the Board so provides,
in the event of any dissolution, liquidation or winding up of the Company,
whether voluntary or involuntary, the holders of each such series of the then
outstanding Preferred Stock may be entitled to receive, prior to the
distribution of any assets or funds to the holders of Common Stock, a
liquidation preference established by the Board of Directors, together with all
accumulated and unpaid dividends. Depending upon the consideration paid for
Preferred Stock, the liquidation preference of Preferred Stock and other
matters, the issuance of Preferred Stock could therefore result in a reduction
in the assets available for distribution to the holders of Common Stock in the
event of liquidation of the Company. Holders of Common Stock do not have any
preemptive rights to acquire Preferred Stock or any other securities of the
Company.
The proposal to authorize "blank check" Preferred Stock is not designed
to deter or to prevent a change in control; however, under certain
circumstances, the Company could use the additional shares of Preferred Stock to
create voting impediments or to frustrate persons seeking to effect a takeover
or otherwise gain control of the Company and thereby to protect the continuity
of the Company's management. The Company could also privately place such shares
with purchasers who might favor the Board of Directors in opposing a hostile
takeover bid, although the Company has no present intention to do so.
THE WATERSIDE TRANSACTION
On October 15, 1998, the Company entered into a Series C Preferred
Stock Purchase Agreement (the "Purchase Agreement") with Waterside Capital
22
<PAGE>
Corporation, a small business investment company ("Waterside"), pursuant to
which the Company has agreed to issue 1,500 shares of the Company's Series C
Preferred Stock and a Warrant exercisable for shares of the Company's Common
Stock (the "Warrant") in exchange for the investment of $1,500,000. In light of
the fact that the Company was at the time not able to lawfully assign
preferences, limitations and rights to a class of preferred stock under its
existing Articles of Incorporation, the Company issued to Waterside a promissory
note in the aggregate principal amount of $1,500,000 (the "Note") in lieu of
issuing one thousand (1,000) shares of the Company's Series C Preferred Stock at
the closing. The Note bears interest at the rate of 14% per annum; provided
however, that should the Company issue to Waterside the shares of the Company's
Series C Preferred Stock purchased pursuant to the Purchase Agreement, all of
the Company's obligations under the Note shall terminate. Each of the Company's
subsidiaries have guaranteed the Company's obligations under the Note.
Upon the approval of the Charter Amendment, it is anticipated that the
Company will issue to Waterside shares of the Company's Series C Preferred
Stock. Holders of the Series C Preferred Stock will have the right (i) to
receive a liquidation payment of $1,000 per share plus accrued unpaid dividends,
(ii) to receive a quarterly cash dividend of $31.25 per share, (iii) to vote
with respect to certain matters which adversely effect the holder of Series C
Preferred Stock, (iv) to elect one member to the Board of Directors of the
Company, and (v) to require the Company to redeem the shares of Series C
Preferred Stock commencing as of October 15, 2003 at a price of $1,500 per
share. In addition, the Company may not (a) issue any shares of capital stock
with rights pari passu with, or superior to, the Series C Preferred Stock or (b)
redeem under certain circumstances shares of capital stock ranking junior to the
Series C Preferred Stock, without the prior written consent of the holders of a
majority of the Series C Preferred shares.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE
FOREGOING CHARTER AMENDMENT.
PROPOSAL FOUR
REINCORPORATION IN THE STATE OF DELAWARE
GENERAL
For the reasons set forth below, the Board of Directors believes that
the best interests of the Company and its shareholders will be served by
changing the state of incorporation of the Company from Florida to Delaware (the
"Reincorporation"). Shareholders are urged to read carefully the following
sections of this Proxy Statement, including the related exhibits, before voting
on the Reincorporation. Throughout this Proxy Statement, the term "Company"
refers to the existing Florida corporation and the term "Triangle Delaware"
refers to the new Delaware corporation, a wholly-owned subsidiary of the
Company, that was formed by the Company in preparation for the Reincorporation
and is the proposed successor to the Company.
The Reincorporation will be effected by merging the Company into
Triangle Delaware (the "Merger"), which is to be effected in accordance with the
terms of an Agreement and Plan of Merger, a form of which is attached hereto as
Annex B (the "Merger Agreement").
23
<PAGE>
Upon completion of the Merger, (i) the Company will cease to exist, (ii)
Triangle Delaware will continue to operate the business of the Company under the
name "@ebs inc.," (iii) the shareholders of the Company's Common Stock
automatically will become the shareholders of Triangle Delaware, (iv) the
shareholders will have rights, as shareholders of Triangle Delaware and no
longer as shareholders of the Company and will be governed by Delaware law and
Triangle Delaware's Certificate of Incorporation and By-laws rather than by
Florida law and the existing Certificate of Incorporation and By-laws of the
Company, (v) warrants and options to purchase shares of the Company's Common
Stock automatically will be converted into warrants or options to acquire an
equal number of equivalent shares of Triangle Delaware's Common Stock, and (vi)
no change will occur in the physical location, business, management, assets,
liabilities or net worth of the Company.
The shareholders' approval of the Reincorporation Merger will
constitute their approval of all of the provisions of Triangle Delaware's
Certificate of Incorporation and Triangle Delaware's By-laws, including those
provisions relating to the limitation of director liability and expanded scope
of indemnification of directors, officers and key employees under Delaware law,
and including those provisions having "anti-takeover" implications, which may be
significant to the Company and its shareholders in the future. The governance of
Triangle Delaware by Delaware law, Triangle Delaware's Certificate of
Incorporation and Triangle Delaware's By-laws will or may in the future alter
certain rights of the shareholders.
Pursuant to the Merger Agreement, each outstanding share of Company
Common Stock, $.001 par value, automatically will be converted pro-rata into one
share of Triangle Delaware Common Stock, $.001 par value, upon the Effective
Date (as defined below). Each stock certificate representing issued and
outstanding shares of Company Common Stock will continue to represent the same
proportionate number of shares of Common Stock of Triangle Delaware. IT WILL BE
NECESSARY FOR SHAREHOLDERS TO EXCHANGE THEIR EXISTING COMPANY STOCK CERTIFICATES
FOR TRIANGLE DELAWARE STOCK CERTIFICATES.
Under Florida law, the affirmative vote of the holders of at least a
majority of the outstanding shares of Common Stock of the Company is required
for approval of the Merger and the other terms of the Reincorporation Merger.
The Reincorporation Merger has been approved unanimously by the Company's Board
of Directors. If approved by the shareholders, and if certain other conditions
set forth in the Merger Agreement are satisfied, the Reincorporation Merger will
become effective upon the filing of the Merger Agreement and related
documentation with both Delaware's and Florida's respective Secretary of State
(the "Effective Date"). The Board of Directors intends that the Reincorporation
Merger be consummated as soon as practicable following the Annual Meeting of
Shareholders. Nonetheless, the Merger Agreement allows for the Board of
Directors to abandon or postpone the Reincorporation or to amend the Merger
Agreement (except that the principal terms may not be amended without
shareholder approval) either before or after the shareholders' approval has been
obtained and before the Effective Date, if circumstances arise causing the Board
of Directors to deem either such action advisable.
The discussion set forth below is qualified in its entirety by
reference to the Merger Agreement, the Certificate of Incorporation of Triangle
24
<PAGE>
Delaware (the "Certificate of Incorporation") and the By-laws of Triangle
Delaware ("By-Laws"), a copy of each of which is attached hereto as Annex B, C
and D, respectively.
REASONS FOR AND ADVANTAGES OF REINCORPORATION IN DELAWARE
The proposal to reincorporate in Delaware is made for several reasons.
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 corporations 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 corporations, thereby providing greater predictability with respect to
legal affairs.
The differences between the corporate law of Delaware and Florida allow
Delaware corporations greater latitude of corporate action. In the opinion of
management, such latitude affords Delaware corporations more opportunities to
raise capital. The procedures and degree of shareholder approval required for
Delaware corporations for the authorization of additional shares of stock, and
for approval of certain mergers and other transactions, present fewer practical
impediments to the capital raising process than those which apply to Florida
corporations. For example, a Delaware corporation has greater flexibility in
declaring dividends, which can aid a corporation in marketing various classes or
series of dividend paying securities. Under Delaware law, dividends may be paid
out of surplus, or if there is no surplus, out of net profits from the
corporation's previous fiscal year or the fiscal year in which the dividend is
declared, or both, so long as there remains in the stated capital account an
amount equal to the par value represented by all shares of the corporation's
stock, if any, having a preference upon the distribution of assets. Under
Florida law, dividends may be paid by the corporation unless after giving effect
to the distribution, the corporation would not be able to pay its debts as they
come due in the usual course of business, or the corporation's total assets
would be less than the sum of its total liabilities, plus (unless the
corporation's articles of incorporation permit otherwise) amounts payable in
dissolution to holders of shares carrying a liquidation preference over the
class of shares to which a dividend is declared. These and other differences
between the corporate law of Florida and Delaware corporate laws are more fully
explained below in the section entitled "Summary of Significant Differences
between Delaware and Florida Corporate Laws."
In management's opinion, underwriters and other members of the
financial services industry may be more willing and better able to assist in
capital raising programs for corporations having the greater flexibility
reflected in the examples mentioned.
In addition, Delaware law permits a corporation to adopt a number of
measures, through amendment of the corporation's certificate of incorporation or
bylaws or otherwise, designed to reduce a corporation's vulnerability to
unsolicited takeover attempts. There is substantial judicial precedent in the
Delaware courts as to the legal principles applicable to such defensive measures
with respect to the conduct of the Board of Directors under the business
judgment rule with respect to unsolicited takeover attempts. The Company's
current Articles of Incorporation do not include such "antitakeover" provisions.
25
<PAGE>
The Board of Directors has no present intention following the Reincorporation to
amend the Certificate of Incorporation of Delaware or the Bylaws of
Triangle-Delaware to include any additional provisions which might deter an
unsolicited takeover attempt. However, in the discharge of its fiduciary
obligations to the shareholders, the Board of Directors may consider in the
future certain antitakeover strategies which may enhance the Board of Directors'
ability to negotiate with an unsolicited bidder. Further, Section 203 of the
Delaware General Corporation Law provides certain protections not available
under Florida laws. See "Summary of Significant Differences Between Delaware and
Florida Corporate Laws Which Would Affect Triangle-Delaware Business
Combinations with Substantial Shareholders."
DISADVANTAGE OF REINCORPORATION IN DELAWARE
Despite the belief of the Board of Directors of the Company as to the
benefits or advantages of reincorporation in Delaware, some shareholders may
find the Reincorporation Merger disadvantageous for several reasons. As
discussed below, Delaware law, unlike Florida law, contains a statutory
provision intended to discourage certain takeover attempts of Delaware
corporations which are not approved by the Board of Directors. This
anti-takeover provision could have the effect of lessening the possibility that
shareholders of Triangle-Delaware would be able to receive a premium above
market value for their shares in the event of a takeover. This provision could
also have an adverse effect on the market value of the shares of
Triangle-Delaware Stock. To the extent that this provision may restrict or
discourage takeover attempts, it may render less likely a takeover opposed by
the Company's Board of Directors and may make removal of the Board of Directors
or management less likely as well.
As discussed below, the Certificate of Incorporation of
Triangle-Delaware will contain a provision limiting director liability under
certain circumstances, and the Bylaws of Triangle-Delaware will contain
provisions relating to indemnification of directors and officers. The inclusion
of these provisions could operate to the potential disadvantage of the
shareholders of Triangle-Delaware. For example, their inclusion may have the
effect of reducing the likelihood of Triangle-Delaware's recovering monetary
damages from directors as a result of derivative litigation against directors
for breach of their duty of care, even though such an action, if successful,
might otherwise have benefited Triangle-Delaware and its shareholders. In
addition, if the Reincorporation Merger is effected and the limitation on
liability provision is part of the Certificate of Incorporation of
Triangle-Delaware, the shareholders of Triangle-Delaware will forego potential
causes of action for breach of duty of care involving grossly negligent business
decisions, including those relating to attempts to change control of
Triangle-Delaware.
SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN DELAWARE AND FLORIDA CORPORATE LAWS
The following is a brief summary of certain material ways in which
Florida and Delaware corporate laws differ and does not purport to be a complete
statement of such laws.
BUSINESS COMBINATIONS WITH SUBSTANTIAL SHAREHOLDERS. Delaware law
contains a statutory provision which is intended to curb abusive takeovers of
Delaware corporations. Section 203 of the Delaware General Corporation Law
addresses the problem by preventing certain business combinations of the
corporation with interested shareholders within three years after such
shareholders become interested. Section 203 provides, with certain exceptions,
26
<PAGE>
that a Delaware corporation may not engage in any of a broad range of business
combinations with a person or an affiliate, or associate of such person, who is
an "interested shareholder" for a period of three (3) years from the date that
such person became an interested shareholder unless: (i) the transaction
resulting in a person becoming an interested shareholder, or the business
combination, is approved by the Board of Directors of the corporation before the
person becomes an interested shareholder; (ii) the interested shareholder
acquired 85% or more of the outstanding voting stock of the corporation in the
same transaction that makes such person an interested shareholder (excluding
shares owned by persons who are both officers and directors of the corporation,
and shares held by certain employee stock ownership plans); or (iii) on or after
the date the person becomes an interested shareholder, the business combination
is approved by the corporation's board of directors and by the holders of at
least 66-2/3% of the corporation's outstanding voting stock at an annual or
special meeting, excluding shares owned by the interested shareholder. Under
Section 203, an "interested shareholder" is defined as any person who is: (i)
the owner of fifteen percent (15%) or more of the outstanding voting stock of
the corporation or (ii) an affiliate or associate of the corporation and who was
the owner of fifteen percent (15%) or more of the outstanding voting stock of
the corporation at any time within the three (3) year period immediately prior
to the date on which it is sought to be determined whether such person is an
interested shareholder.
Florida law provides for certain "anti-takeover" protections against
persons who acquire or intend to acquire 20% or more of the voting power of
certain Florida corporations, defined by statute as "issuing public
corporations." However, in order to fall within the definition of an "issuing
public corporation," the Florida corporation must have (i) its principal place
of business, principal office or substantial assets within the State of Florida,
and (ii) either more than 10% of its shareholders resident in the State of
Florida, more than 10% of its shares owned by Florida residents or at least
1,000 Florida resident shareholders (with shares held by banks, brokers or
nominees disregarded for the purpose of calculating such percentage).
A corporation may, at its option, exclude itself from the coverage of
Section 203 of the Delaware General Corporation Law by amending its certificate
of incorporation or bylaws by action of its shareholders to exempt itself from
coverage, provided that such bylaw or certificate of incorporation amendment
shall not become effective until twelve (12) months after the date it is
adopted. The Company has not adopted such a provision to the Certificate of
Incorporation. It is not anticipated that the Board of Directors of
Triangle-Delaware will seek shareholder approval to "opt out" of the operation
of this provision.
MERGER WITH SUBSIDIARY. Under Delaware law, a parent corporation may
merge into a subsidiary and a subsidiary may merge into its parent, without
shareholder approval, where such parent corporation owns at least 90% of the
outstanding shares of each class of capital stock of its subsidiary. Florida law
permits such a merger of a subsidiary without shareholder approval if 80% of
each class of capital stock of the subsidiary is owned by the parent
corporation.
DIVIDENDS. Delaware law provides that the corporation may pay dividends
out of surplus, out the corporation's net profits for the preceding fiscal year,
or both, provided that there remains in the stated capital account an amount
equal to the par value represented by all shares of the corporation's stock
having a distribution preference. Florida law provides that dividends may be
paid, unless after giving effect to such distribution, the corporation would not
27
<PAGE>
be able to pay its debts as they come due in the usual course of business, or
the corporation's total assets would be less than the sum of its total
liabilities, plus (unless the corporation's articles of incorporation permit
otherwise) the amount needed to satisfy preferential distributions.
PROXIES. Under Delaware law, a proxy executed by a shareholder will
remain valid for a period of three years unless the proxy provides for a longer
period. Under Florida law, a proxy is effective only for a period of 11 months
unless otherwise provided in the proxy.
CONSIDERATION FOR STOCK. Under Delaware law, a corporation may accept
as consideration for its stock a combination of cash, property or past services
in an amount not less than the par value of the shares being issued, and a
secured promissory note or other binding obligation executed by the subscriber
for any balance, the total of which must equal at least the par value of the
issued stock, as determined by the board of directors. Under Florida law, a
corporation may issue its capital stock only in return for certain tangible or
intangible property or benefit to the corporation, including cash, promissory
notes, services performed, promises to perform services evidenced by a written
contract, and other securities of the corporation. Shares may be issued for less
than par value.
LIABILITY OF DIRECTORS. Delaware law permits a Delaware corporation to
include in its certificate of incorporation a provision which eliminates or
limits the personal liability of a director to the corporation or its
shareholders for monetary damages for breach of fiduciary duties as a director.
However, no such provision may eliminate or limit the liability of a director:
(i) for any breach of the director's duty of loyalty to the corporation or its
shareholders; (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law; (iii) for declaration of
unlawful dividends or illegal redemptions or stock repurchases; or (iv) for any
transaction from which the director derived an improper personal benefit. The
proposed Certificate of Incorporation includes such a provision. Under Florida
law, a director is not personally liable for monetary damages to any person for
his actions as a director unless the director breached his duties by way of (i)
a criminal violation, unless the director has reasonable cause to believe his
conduct was lawful or had no reasonable cause to believe his conduct was
unlawful; (ii) a transaction from which the director derived an improper
personal benefit; (iii) declaration of unlawful distributions; (iv) in a
derivative action, conscious disregard by the director for the best interests of
the corporation or willful misconduct by the director; or (v) in a third party
action, recklessness or actions or omissions committed in bad faith or with
malicious purpose or in a manner exhibiting wanton and willful disregard of
human rights, safety or property.
SPECIAL MEETINGS OF SHAREHOLDERS. Under Delaware law, a special meeting
of shareholders may be called by the corporation's board of directors or by such
persons as may be authorized by the corporation's certificate of incorporation
or bylaws. The proposed Bylaws of Triangle-Delaware provide that a special
meeting may be called by the Chairman of the Board of Directors, the President,
majority of the Board of Directors or 10% of the shareholders of record of all
shares entitled to vote.
Florida law provides that a special meeting of shareholders may 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
28
<PAGE>
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 may require
a higher percentage of votes, up to a maximum of 50% to call a special meeting
of shareholders. The Company's current Articles of Incorporation do not include
any such provision.
COMMITTEES OF THE BOARD OF DIRECTORS. Florida and Delaware law both
provide that the board of directors may delegate certain of their duties to one
or more committees elected by a majority of the board. A Delaware corporation
can delegate to a committee of the board of directors, among other things, the
responsibility of nominating candidates for election to the office of director,
to fill vacancies on the board of directors, and to reduce earned or capital
surplus and authorize the acquisition of the corporation's own stock. Moreover,
if either the corporation's certificate of incorporation or bylaws, or the
resolution of the board of directors creating the committee so permits, a
committee of the board of directors may declare dividends and authorize the
issuance of stock. Florida law places more limitations on the types of
activities that can be delegated to committees of the board. Under Florida law,
a committee of the board of directors may not approve or recommend to
shareholders actions or proposals required to be approved by the shareholders,
fill a vacancy on the board, adopt, amend or repeal the bylaws, authorize the
issuance of stock, or authorize the reacquisition of the corporation's own
stock.
VOTE REQUIRED FOR MERGERS. Florida law 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 Florida
law, 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 of incorporation before the merger;
and (ii) 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 a
similar provision requiring shareholder approval in the case of the disposition
of assets or a merger or a share exchange. However, with respect to mergers
which do not require the vote of the corporation's shareholders, Delaware law,
unlike Florida law, also requires that either (i) no shares of common stock of
the surviving corporation and no shares, securities or obligations convertible
into such stock are to be issued or delivered under the plan of merger or (ii)
the authorized unissued shares or the treasury shares of common stock of the
surviving corporation to be issued or delivered under the plan of merger, plus
those initially issuable upon conversion of any other shares, securities or
obligations to be issued or delivered under such plan, do not exceed 20% of the
shares of common stock of such constituent corporation outstanding immediately
prior to the effective date of the merger.
DISSENTER'S RIGHTS. Delaware law provides that dissenting shareholders
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 shareholders 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 shareholders 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 shareholders.
29
<PAGE>
Florida law 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
Delaware Law for mergers); and (iii) amendments to the articles of incorporation
that may adversely affect the rights or preferences of shareholders.
The shares of the Company are not presently listed on a national
securities exchange and, as of April 20, 1999, were held by approximately 967
shareholders of record.
CORPORATE ACTION WITHOUT A SHAREHOLDER MEETING. Delaware and Florida
law both permit corporate action without a meeting of shareholders 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 or articles of incorporation, respectively, expressly provide
otherwise. In the event such proposed corporate action is taken without a
meeting by less than the unanimous written consent of shareholders, Delaware law
requires that prompt notice of the taking of such action be sent to those
shareholders who have not consented in writing. Florida law provides that such
notice must be given within ten (10) days of the date such shareholder
authorization is granted. Neither the Company's current Articles of
Incorporation nor the proposed Certificate of Incorporation includes any such
contrary provision.
CERTAIN ANTI-TAKEOVER REQUIREMENTS. The proposed Certificate of
Incorporation adopts certain measures (the "Measures") which are intended to
protect the Company's shareholders by rendering it more difficult for a person
or persons to obtain control of the Company without cooperation of the Company's
management. Such Measures are often referred to as "anti-takeover" provisions.
The Company's current Articles of Incorporation and Bylaws do not include many
of such anti-takeover provisions. The anti-takeover provisions include an
advance notice requirement for any shareholder proposals or nominations for the
election of a director. The proposed Certificate of Incorporation does not
include provisions for a staggered board of directors or cumulative voting.
The proposed Certificate of Incorporation provides that any shareholder
proposals and nominations for the election of directors be delivered to the
Company no less than ninety (90) days nor more than one hundred twenty (120)
days in advance of the first anniversary of the Company's annual meeting held in
the prior year, provided, however, in the event the Company shall not have had
an annual meeting in the prior year, such notice shall be delivered no less than
ninety (90) days nor more than one hundred twenty (120) days in advance of May
15 of the current year. Such shareholder nominations must contain (i) as to each
person whom the shareholder proposed to nominate for election or re-election as
a director at the annual meeting (a) the name, age, business address and
residence address of the proposed nominee, (b) the principal occupation or
employment of the proposed nominee, (c) the class and number of shares of
capital stock of the Company which are beneficially owned by the proposed
nominee, and (d) any other information relating to the proposed nominee that is
required to be disclosed in solicitations for proxies for election of directors
pursuant to Rule 14a under the 1934 Act; and (ii) as to the shareholder giving
30
<PAGE>
notice of nominees for election at the annual meeting, (a) the name and record
address of the shareholder, and (b) the class and number of shares of capital
stock of the Company which are beneficially owned by the shareholder.
The inclusion of such "anti-takeover" provisions in the Certificate of
Incorporation may delay, deter or prevent a takeover of the Company which the
shareholders may consider to be in their best interests, thereby possibly
depriving holders of the Company's securities of certain opportunities to sell
or otherwise dispose of their securities at above-market prices, or limit the
ability of shareholders to remove incumbent directors as readily as the
shareholders may consider to be in their best interests.
The proposed Certificate of Incorporation authorizes the issuance of up
to 1,000,000 shares of Preferred Stock by the Board of Directors, without any
further vote or action by the Company's shareholders, in one or more series and
authorizes the Board of Directors to determine the designations, powers,
preferences, and relative, participating, optional or other rights thereof,
including without limitation, the dividend rate (and whether dividends are
cumulative), conversion rights, voting rights, rights and terms of redemption,
redemption price and liquidation preference. Although the Company has no current
plans to issue any Preferred Stock (other than the 1,000 shares of Series C
Preferred Stock to Waterside), the rights of the holders of shares of Common
Stock would be subject to, and may be adversely affected by, the rights of the
holders of any Preferred Stock that may be issued in the future. Issuance of
Preferred Stock could have the effect of delaying, deterring or preventing a
change in control of the Company, including the imposition of various procedural
and other requirements that could make it more difficult for holders of Common
Stock to effect certain corporate actions, including the ability to replace
incumbent directors and to accomplish transactions opposed by the incumbent
Board of Directors.
The Measures are not being proposed in response to any present attempt,
known by the Board of Directors of the Company to acquire control of the
Company, to obtain representation on the Company's Board of Directors or to take
significant corporate action, including the proposed Agreement of Merger.
Rather, management believes that in connection with the approval of the
transactions contemplated by the Agreement of Merger, the Measures are prudent
and in the best interests of the Company and its shareholders and should be
adopted for their protection. The Board of Directors further believes that the
present is an appropriate time to adopt the proposed Measures, since they would
lessen the likelihood that the Company would be required to incur significant
expense and might be subject to substantial disruption in connection with such
an attempt.
The Board of Directors does not have any current plans to seek
shareholder approval of any amendments to, or make changes in, the Company's
charter documents that may be deemed to have "anti-takeover" implications,
except as described in this Proxy Statement or as set forth in the Certificate
of Incorporation and revised Bylaws.
FEDERAL INCOME TAX CONSEQUENCES
The following description of federal income tax consequences is based
on the Internal Revenue Code of 1986, as amended (the "Code"), and applicable
Treasury regulations promulgated thereunder, judicial authority and current
administrative rulings and practices as in effect on the date of this Proxy
31
<PAGE>
Statement. This discussion should not be considered tax or investment advice,
and the tax consequences of the reverse stock split may not be the same for all
shareholders. In particular, this discussion does not address the tax treatment
of special classes of shareholders, such as banks, insurance companies,
tax-exempt entities and foreign persons. Shareholders desiring to know their
individual federal, state, local and foreign tax consequences should consult
their own tax advisors.
The Reincorporation Merger is intended to qualify as a tax-free
reorganization under Section 368(a)(1)(F) or 368(a)(1)(A) of the Code. Assuming
such tax treatment, no taxable income, gain, or loss will be recognized by the
Company or the shareholders as a result of the exchange of shares of Common
Stock for shares of Triangle-Delaware Stock upon consummation of the
transaction.
The combination and change of each share of the Company's Common Stock
into one share of Triangle-Delaware Stock will be a tax-free transaction, and
the holding period and tax basis of Common Stock will be carried over to a
portion of Triangle-Delaware Stock received in exchange therefor.
SECURITIES ACT CONSEQUENCES
The shares of Triangle-Delaware Stock to be issued in exchange for
shares of Common Stock are not being registered under the Securities Act of
1933, as amended (the "1933 Act"). In that regard, Triangle-Delaware is relying
on Rule 145(a)(2) under the 1933 Act, which provides that a merger which has "as
its sole purpose" a change in the domicile of a corporation does not involve the
sale of securities for purposes of the 1933 Act, and on interpretations of the
Rule by the Securities and Exchange Commission (the "Commission") which indicate
that the making of certain changes in the surviving corporation's charter
documents which could otherwise be made only with the approval of the
shareholders of either corporation does not render Rule 145(a)(2) inapplicable.
After the Reincorporation Merger, Triangle-Delaware will be a
publicly-held company, Triangle-Delaware Stock will be listed for trading in the
over-the-counter Bulletin Board market, and Triangle-Delaware will file periodic
reports and other documents with the Commission and provide to its shareholders
the same types of information that the Company has previously filed and
provided. Shareholders whose Common Stock is freely tradeable before the
Reincorporation Merger will have freely tradeable shares of Triangle-Delaware
Stock. Shareholders holding restricted shares of Common Stock will have shares
of Triangle-Delaware Stock which are subject to the same restrictions on
transfer as those to which their present shares of Common Stock are subject, and
their stock certificates, if surrendered for replacement certificates
representing shares of Triangle-Delaware Stock, will bear the same restrictive
legend as appears on their present stock certificates. For purposes of computing
compliance with the holding period requirement of Rule 144 under the 1933 Act,
shareholders will be deemed to have acquired their shares of Triangle-Delaware
Stock on the date they acquired their shares of Common Stock. In summary,
Triangle-Delaware and its shareholders will be in the same respective positions
under the federal securities laws after the Reincorporation Merger as were the
Company and the shareholders prior to the Reincorporation Merger.
32
<PAGE>
DISSENTERS' RIGHTS OF APPRAISAL
The shareholders of the Company are not entitled to exercise
dissenters' rights of appraisal under the Florida Business Corporation Act (the
"FBCA").
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE PROPOSAL TO CHANGE
THE STATE OF INCORPORATION OF THE COMPANY FROM FLORIDA TO DELAWARE BY MEANS OF A
MERGER OF THE COMPANY WITH AND INTO A WHOLLY-OWNED DELAWARE SUBSIDIARY. UNLESS
MARKED TO THE CONTRARY, PROXIES RECEIVED FROM SHAREHOLDERS WILL BE VOTED IN
FAVOR OF THE PROPOSAL.
PROPOSAL FIVE
RATIFICATION OF PRIOR CHANGES
For capital raising purposes, future acquisitions and general
corporate record keeping, the Board of Directors of the Company instructed the
corporate officers to undertake a review of the capital structure of the Company
to determine whether the necessary lawful actions were taken to effect changes
to the Company's authorized capital. The Board of Directors determined, upon the
advice of the Company's General Counsel and outside legal advisors to submit
each of the historic changes to the Company's authorized capital for
ratification by the Company's shareholders. It is not presently anticipated that
the Company will issue any securities in the near future as a result of the
ratification of historic changes to the Company's authorized capital.
A review of the corporate records of the Company and the Company's
files maintained by the Secretary of State of Florida and the Company's transfer
agent revealed the following reclassifications of the Company's Common Stock and
amendments to the Company's Articles of Incorporation, all of which have been
ratified by the Board of Directors. The Company recommends that the Company's
shareholders approve and the following reclassifications to the Company's Common
Stock are amendments to the Company's Articles of Incorporation are hereby:
RECLASSIFICATION OF COMPANY COMMON STOCK
AND AMENDMENTS TO THE COMPANY'S ARTICLES OF INCORPORATION
DATE FILED SUMMARY OF AMENDMENT
September 22, 1988 Increased number of authorized shares
of Common Stock from 50,000,000
shares to 750,000,000 shares
November 18, 1988 Changed name of the Company from
Benefit Performances of America, Inc.
to Triangle Group, Inc.
July 17, 1989 Decreased number of authorized shares
of Common Stock from 750,000,000
shares to 75,000,000 shares and
effected a 1-for-10 reverse stock
split with respect to the shares of
Common Stock outstanding
33
<PAGE>
September 27, 1989 Decreased the number of authorized
shares of Common Stock from
75,000,000 shares to 10,714,286
shares and effected a 1-for-7 reverse
stock split with respect to the
shares of Common Stock outstanding
April 12, 1995 Changed name of the Company from
Triangle Group, Inc. to Triangle
Imaging Group, Inc.
April 24, 1995 Increased the number of authorized
shares of Common Stock from
10,714,286 shares to 50,000,000
shares and authorized 1,000,000
shares of "blank check" preferred
stock and effected a 1-for-10 reverse
stock split with respect to the
shares of Common Stock outstanding
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE
RATIFICATION OF PRIOR CHANGES TO THE COMPANY'S CAPITAL STRUCTURE.
34
<PAGE>
STOCKHOLDER PROPOSALS AND SUBMISSIONS
If any Stockholder wishes to present a proposal for inclusion in the proxy
materials to be solicited by the Company's Board of Directors with respect to
the 2000 Annual Meeting of Shareholders, that proposal must be presented to the
Company's secretary prior to February 1, 2000.
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE ANNUAL MEETING, PLEASE SIGN AND
RETURN THE ENCLOSED PROXY PROMPTLY. YOUR VOTE IS IMPORTANT. IF YOU ARE A
STOCKHOLDER OF RECORD AND ATTEND THE ANNUAL MEETING AND WISH TO VOTE IN PERSON,
YOU MAY WITHDRAW YOUR PROXY AT ANY TIME PRIOR TO THE VOTE.
TRIANGLE IMAGING GROUP, INC.
April 28, 1999
By: /s/ CHARLES D. WINSLOW
--------------------------------------------------
Charles D. Winslow, Chairman of the Board
36
<PAGE>
ANNEX A
TRIANGLE IMAGING GROUP, INC.
1999 INCENTIVE PLAN
3
<PAGE>
TRIANGLE IMAGING GROUP, INC.
1999 INCENTIVE PLAN
EFFECTIVE DATE: MARCH 10, 1999
<PAGE>
TRIANGLE IMAGING GROUP, INC.
1999 INCENTIVE PLAN
EFFECTIVE: MARCH 10, 1999
Table of Contents
SECTION PAGE
1. Purpose and Amendment.......................................1
2. Definitions.................................................1
3. Shares Subject to the Plan..................................3
4. Grant of Awards and Award Agreements........................3
5. Stock Options and Stock Appreciation Rights.................4
6. Performance Units...........................................6
7. Restricted Stock............................................7
8. Deferred Stock..............................................7
9. Certificates for Awards of Stock............................8
10. Loans and Supplemental Cash Payments........................9
11. Beneficiary.................................................9
12. Administration of the Plan.................................10
13. Amendment or Discontinuance................................10
14. Adjustments in Event of Change in
Common Stock.............................................11
15. Change in Control..........................................11
16. Miscellaneous..............................................12
<PAGE>
TRIANGLE IMAGING GROUP, INC.
1999 INCENTIVE PLAN
EFFECTIVE DATE: MARCH 10, 1999
1. Purpose and Amendment
The Triangle Imaging Group, Inc. 1999 Incentive Plan has been adopted
for the purpose of attracting and retaining persons of ability as directors,
employees or consultants or advisors of Triangle Imaging Group, Inc. and its
subsidiaries, motivate and reward good performance, encourage such employees to
continue to exert their best efforts on behalf of the Company and its
subsidiaries and provide opportunities for stock ownership by such employees in
order to increase their proprietary interest in the Company by providing
incentive awards to Key Employees (as hereinafter defined), whose
responsibilities and decisions directly affect the performance of the Company
and its subsidiaries. Such incentive awards may, in the discretion of the Board
or Committee, consist of common stock of the Company (subject to such
restrictions as the Board or Committee may determine or as provided herein),
performance units or stock appreciation rights payable in such stock or cash, or
incentive or nonqualified stock options to purchase such stock, or any
combination of the foregoing, together with supplemental cash payments, all as
the Board or Committee may determine.
2. Definitions
When used herein, the following terms shall have the following
meanings:
"Award" means an award granted to any Eligible Participant or Key
Employee in accordance with the provisions of the Plan in the form of Options,
SARS, Restricted Stock, Deferred Stock or Performance Units, or any combination
of the foregoing.
"Beneficiary" means the beneficiary or beneficiaries designated pursuant
to Section 11 to receive the amount, if any, payable under the Plan upon the
death of an Eligible Participant or Key Employee.
"Board" means the Board of Directors of the Company.
"Change in Control" means the happening of any of the following:
(A) receipt by the Company of a report on Schedule 13D filed
with the Securities and Exchange Commission pursuant to Section 13(d) of
the Securities Exchange Act of 1934 (the "1934 Act") disclosing that any
person, group (other than a group reporting beneficial ownership
pursuant to a stockholders' agreement, voting rights agreement or
similar instrument which instrument aggregates voting control solely for
the purpose of the election of directors of the Company), corporation or
other entity (other than the Company, a wholly-owned subsidiary of the
Company, or a present stockholder of the Company for whom a Schedule 13D
has been filed) is the beneficial owner, directly or indirectly, of 20
percent or more of the outstanding stock of the Company;
(B) the purchase, after the date hereof, by any person (as
defined in Section 13(d) of the 1934 Act), corporation or other entity
other than the Company or a wholly-owned subsidiary of the Company, of
shares pursuant to a tender or exchange offer to acquire any stock of
the Company (or securities convertible into stock) for cash, securities
or any other consideration, provided that, after consummation of the
offer, such person, group, corporation or other entity is the beneficial
owner (as defined in Rule 13d-3 under the 1934 Act), directly or
indirectly, of 20 percent or more of the outstanding stock of the
<PAGE>
Company (calculated as provided in paragraph (d) of Rule 13d-3 under the
1934 Act in the case of rights to acquire stock);
(C) approval by the stockholders of the Company of any (i)
consolidation or merger of the Company in which the Company is not the
continuing or surviving corporation or pursuant to which shares of stock
of the Company would be converted into cash, securities or other
property, other than a consolidation or merger of the Company in which
holders of its common stock immediately prior to the consolidation or
merger have substantially the same proportionate ownership of common
stock of the surviving corporation immediately after the consolidation
or merger as immediately before, or (ii) sale, lease, exchange or other
transfer (in one transaction or a series of related transactions) of all
or substantially all the assets of the Company; or
(D) a change in the majority of the members of the Board of
Directors within a 12-month period unless the election or nomination for
election by the Company's stockholders of each new director was approved
by the vote of two-thirds of the directors then still in office who were
in office at the beginning of the 12-month period.
"Code" means the Internal Revenue Code of 1986, as now in effect or as
hereafter amended. (All citations to sections of the Code are to such sections
as they may from time to time be amended or renumbered.)
"Committee" means Harold S. Fischer, Director, and Charles D. Winslow,
Chairman, unless and until such other directors are appointed by the Board
pursuant to Section 12. If Messrs. Fischer and Winslow are removed from the
Committee by the Board and no new Committee members are appointed by the Board,
the Board shall function as and in place of the Committee.
"Company" means Triangle Imaging Group, Inc. and its successors and
assigns.
"Deferred Stock" means Stock credited to an Eligible Participant or Key
Employee under the Plan subject to the requirements of Section 8 and such other
restrictions as the Committee deems appropriate or desirable.
"Eligible Participant(s)" shall mean directors, officers, Key Employees
of the Company and its subsidiaries, consultants, advisors and other persons who
may not otherwise be eligible to receive qualified incentive stock options under
Section 422 of the Code.
"Fair Market Value" means, as of any date, the closing price of the
Common Stock as reported by the Nasdaq OTC Bulletin Board, the Nasdaq National
Market, the Nasdaq Small Cap Market, the American Stock Exchange or any national
stock exchange on which the Stock is listed, if applicable, or, if no sales of
Stock have taken place on such date, the closing price on the most recent
preceding date on which selling prices were quoted; PROVIDED, HOWEVER, that at
the time of grant of any Award other than an incentive stock option, the
Committee, in its sole discretion, may elect to determine Fair Market Value for
all purposes under the Plan with respect to such Award, based on the average of
the closing prices, as of the date of determination and a period of up to twenty
(20) trading days immediately preceding such date.
"Key Employee" means an officer or other key employee of any
Participating Company who, in the judgment of the Committee, is responsible for
or contributes to the management, growth or profitability of the business of any
Participating Company.
"Option" means an option to purchase Stock, including Restricted Stock
or Deferred Stock, if the Committee so determines, subject to the applicable
2
<PAGE>
provisions of Section 5 and awarded in accordance with the terms of the Plan and
which may be an incentive stock option qualified under Section 422 of the Code
or a nonqualified stock option.
"Participating Company" means the Company or any subsidiary or other
affiliate of the Company; PROVIDED, HOWEVER, for incentive stock options only,
"Participating Company" means the Company or any corporation which at the time
such option is granted under the Plan qualifies as a subsidiary of the Company
under the definition of "subsidiary corporation" contained in Section 425(f) of
the Code.
"Non-Employee Director" shall mean each such person who is a member of
the Board of Directors of the Company but who is not a full-time employee of the
Company.
"Performance Unit" means a performance unit subject to the requirements
of Section 6 and awarded in accordance with the terms of the Plan.
"Plan" means the Triangle Imaging Group, Inc. 1999 Incentive Plan, as
the same may be amended, administered or interpreted from time to time.
"Restricted Stock" means Stock delivered under the Plan subject to the
requirements of Section 7 and such other restrictions as the Committee deems
appropriate or desirable.
"SAR" means a stock appreciation right subject to the appropriate
requirements under Section 5 and awarded in accordance with the terms of the
Plan.
"Stock" means the $.001 par value common stock of the Company.
"Total Disability" means the complete and permanent inability of an
Eligible Participant or Key Employee to perform all of his or her duties under
the terms of his or her employment, service or contractual arrangement, with any
Participating Company, as determined by the Committee upon the basis of such
evidence, including independent medical reports and data, as the Committee deems
appropriate or necessary.
3. Shares Subject to the Plan
The aggregate number of shares of Stock which may be awarded under the
Plan or subject to purchase by exercising an Option shall not exceed four
million (4,000,000) shares. Such shares shall be made available from authorized
and unissued shares of the Company's Stock. The Committee may, in its
discretion, decide to award other securities issued by the Company that are
convertible into Stock or make such other securities subject to purchase by an
Option, in which event the maximum number of shares of Stock into which such
other securities may be converted shall be used in applying the aggregate share
limit under this Section 3 and all provisions of the Plan relating to Stock
shall apply with full force and effect with respect to such convertible
securities. If, for any reason, any shares of Stock awarded or subject to
purchase by exercising an Option under the Plan are not delivered or are
reacquired by the Company, for reasons including, but not limited to, a
forfeiture of Restricted Stock or Deferred Stock or termination, expiration or a
cancellation with the consent of a participant of an Option, SAR or a
Performance Unit, such shares of Stock shall again become available for award
under the Plan.
3
<PAGE>
4. Grant of Awards and Award Agreements
(a) Subject to the provisions of the Plan, the Committee shall, (i)
determine and designate from time to time those Eligible Participants and Key
Employees or groups of Eligible Participants and Key Employees to whom Awards
are to be granted; (ii) determine the form or forms of Award to be granted to
any Eligible Participant or Key Employee; (iii) determine the amount or number
of shares of Stock, including Restricted Stock or Deferred Stock if the
Committee so determines, subject to each Award; (iv) determine the terms and
conditions of each Award; (v) determine whether and to what extent Eligible
Participants and Key Employees shall be allowed or required to defer receipt of
any Awards or other amounts payable under the Plan to the occurrence of a
specified date or event; PROVIDED, HOWEVER, that no Award shall be granted after
the expiration of ten years from the effective date of the Plan.
(b) Each Award granted under the Plan shall be evidenced by a written
Award Agreement, in a form approved by the Committee. Such agreement shall be
subject to and incorporate the express terms and conditions, if any, required
under the Plan or as required by the Committee for the form of Award granted and
such other terms and conditions as the Committee may specify.
5. Stock Options and Stock Appreciation Rights
(a) With respect to Options and SARS, the Committee shall (i) authorize
the grant of incentive stock options, nonqualified stock options, SARs or a
combination of incentive stock options, nonqualified stock options and SARS;
(ii) determine the number of shares of Stock subject to each Option or the
number of shares of Stock that shall be used to determine the value of an SAR;
(iii) determine whether such Stock shall be Restricted Stock or Deferred Stock,
in the Committee's discretion, (iv) determine the time or times when and the
manner in which each Option shall be exercisable and the duration of the
exercise period; and (v) determine whether or not all or part of each Option may
be canceled by the exercise of an SAR; PROVIDED, HOWEVER, that (A) no Option
shall be granted after the expiration of ten years from the effective date of
the Plan and (B) the aggregate Fair Market Value (determined as of the date an
Option is granted) of the Stock (disregarding any restrictions in the case of
Restricted Stock) for which incentive stock options granted to any Key Employee
under this Plan may first become exercisable in any calendar year shall not
exceed $100,000.
(b) The exercise period for a nonqualified stock option shall not exceed
ten years and one day from the date of grant, and the exercise period for an
incentive stock option or SAR, including any extension which the Committee may
from time to time decide to grant, shall not exceed ten years from the date of
grant; PROVIDED, HOWEVER, that, in the case of an incentive stock option granted
to a Key Employee who, at the time of grant, owns stock possessing more than ten
percent of the total combined voting power of all classes of stock of the
Company (a "Ten Percent Stockholder"), such period, including extensions, shall
not exceed five years from the date of grant.
(c) The Option or SAR price per share shall be determined by the
Committee at the time any Option is granted and shall be not less than (i) in
the case of incentive stock options and any tandem SARs, 100% of the Fair Market
Value, or (ii) in the case of an Option granted to a Ten Percent Stockholder,
110% of the Fair Market Value.
(d) No part of any Option or SAR may be exercised until (i) the Eligible
Participant or Key Employee who has been granted the Award shall have remained
in the employ or service of a Participating Company for such period, if any,
after the date on which the Option or SAR is granted, as the Committee may
specify, or (ii) achievement of such performance or other criteria, if any, by
the Eligible Participant or Key Employee, the Company or any subsidiary,
affiliate or division of the Company, as the Committee may specify, and the
Committee may further require exercisability in installments.
4
<PAGE>
(e) Subject to Section 10(c), except as otherwise provided in the Plan,
the purchase price of the shares as to which an Option shall be exercised shall
be paid to the Company at the time of exercise either in cash or in such other
consideration as the Committee deems appropriate, including Stock or the
cancellation of Options then exercisable (i.e., a "cashless exercise"), having a
total fair market value, as determined by the Committee, equal to the purchase
price, or a combination of cash and such other consideration having a total fair
market value, as so determined, equal to the purchase.
(f) (i) If a Key Employee who has been granted an Option or SAR dies
(A) while an employee of any Participating Company, or (B) within three months
after termination of his or her employment because of his or her Total
Disability, his or her Options or SARs may be exercised, to the extent that the
Key Employee shall have been entitled to do so on the date of his or her death
or such termination of employment, by the person or persons to whom the rights
under the option or SAR pass by will, or if no such person has such right, by
his or her executors or administrators, at any time, or from time to time,
within 12 months after the date of death or within such other period, and
subject to such terms and conditions as the Committee may specify, but not later
than the expiration date specified in Section 5(b) above.
(ii) If the Key Employee's employment by any Participating Company
terminates because of his or her Total Disability and such participant has not
died within the following three months, he or she may exercise his or her
Options or SARS, to the extent that he or she shall have been entitled to do so
at the date of the termination of his or her employment, at any time, or from
time to time, within 12 months after the date of the termination of his or her
employment within such other period, and subject to such terms and conditions as
the Committee may specify, but not later than the expiration date specified in
Section 5(b) above.
(iii) If the Key Employee's employment terminates for any other
reason, other than for "cause" pursuant to any employment or compensation
agreement, he or she may exercise his or her Options or SARs to the extent that
he or she shall have been entitled to do so at the date of the termination of
his or her employment, at any time, or from time to time, within sixty (60) days
after the date of the termination of his or her employment or within such other
period, and subject to such terms and conditions as the Committee may specify,
but not later than the expiration date specified in Section 5(b) above. If the
Key Employee's employment terminates for "cause" pursuant to any employment or
compensation agreement, the Options or SARs granted to such individual shall
cease to be exercisable by him or her on the day immediately preceding the date
of termination.
(g) No Option or SAR granted under the Plan shall be transferable other
than by will or by the laws of descent and distribution. During the lifetime of
the optionee, an Option shall be exercisable only by him or her.
(h) With respect to an incentive stock option, the Committee shall
specify such terms and provisions as the Committee may determine to be necessary
or desirable in order to qualify such Option as an incentive stock option within
the meaning of Section 422 of the Code.
(i) Upon exercise of an SAR, the Eligible Participant or Key Employee
shall be entitled, subject to such terms and conditions as the Committee may
specify, to receive upon exercise thereof all or a portion of the excess of (i)
the Fair Market Value of a specified number of shares of Stock at the time of
exercise, as determined by the Committee, over (ii) a specified amount which
shall not, subject to Section 5(j), be less than the Fair Market Value of such
specified number of shares of Stock at the time the SAR is granted. Upon
exercise of an SAR, payment of such excess shall be made as the Committee shall
specify at the time of the grant of an SAR or otherwise (A) in cash, (B) through
the issuance or transfer of whole shares of Stock, including Restricted Stock or
Deferred Stock, with a Fair Market Value, disregarding any restrictions in the
5
<PAGE>
case of Restricted Stock or Deferred Stock, at such time equal to any such
excess, or (C) a combination of cash and shares of Stock with a combined fair
market value at such time equal to any such excess, all as determined by the
Committee; PROVIDED, HOWEVER, a fractional share of Stock shall be paid in cash
equal to the Fair Market Value of the fractional share of Stock, disregarding
any restrictions in the case of Restricted Stock or Deferred Stock, at such
time. If the full amount of such value is not paid in Stock, then the shares of
Stock representing such portion of the value of the SAR not paid in Stock shall
again become available for award under the Plan.
(j) If the Award granted to an Eligible Participant or Key Employee
allows such person to elect to cancel all or any portion of an unexercised
option by exercising a related SAR, then the Option price per share of Stock
shall be used as the specified price in Section 5(i), to determine the value of
the SAR upon such exercise, and, in the event of the exercise of such SAR, the
Company's obligation in respect of such Option or such portion thereof will be
discharged by payment of the SAR so exercised. In the event of such a
cancellation, the number of shares as to which such Option was canceled shall
again become available for award under the Plan less the number of shares
received by the optionee upon such cancellation. Any such SAR shall be
transferable only by will or by the laws of descent and distribution. During the
lifetime of the optionee, such SAR shall be exercisable only by him or her.
6. Performance Units
(a) The Committee shall determine a performance period (the "Performance
Period") of one or more years and shall determine the performance objectives for
grants of Performance Units. Performance objectives may vary from participant to
participant and shall be based upon such performance criteria or combination of
factors as the Committee may deem appropriate, including, but not limited to,
minimum earnings per share, return on equity or performance by a subsidiary or
division of the Company. Performance Periods may overlap and participants may
participate simultaneously with respect to Performance Units for which different
Performance Periods are prescribed.
(b) At the beginning of a Performance Period, the Committee shall
determine for each participant or group of participants eligible for Performance
Units with respect to that Performance Period the range of dollar values, if
any, which may be fixed or may vary in accordance with such performance or other
criteria specified by the Committee, which shall be paid to a participant as an
Award if the relevant measure of Company performance for the Performance Period
is met.
(c) If during the course of a Performance Period there shall occur a
significant event or events (a "Significant Event") as determined by the
Committee, including, but not limited to, a reorganization of the Company, which
the Committee expects to have a substantial effect on a performance objective
during such period, the Committee may revise such objective.
(d) If an Eligible Participant or Key Employee terminates service with
all Participating Companies during a Performance Period because of death, Total
Disability, retirement on or after age 65, or at an earlier age with the consent
of the Company, or a Significant Event, as determined by the Committee, that
Eligible Participant or Key Employee shall be entitled to payment in settlement
of each Performance Unit for which the Performance Period was prescribed (i)
based upon the performance objectives satisfied at the end of such period and
(ii) prorated for the portion of the Performance Period during which the
Eligible Participant or Key Employee was employed or retained by any
Participating Company; PROVIDED, HOWEVER, the Committee may provide for an
earlier payment in settlement of such Performance Unit in such amount or amounts
and under such terms and conditions as the Committee deems appropriate or
desirable with the consent of the Eligible Participant or Key Employee. If an
Eligible Participant or Key Employee terminates service with all Participating
6
<PAGE>
Companies during a Performance Period for any other reason, such Eligible
Participant or Key Employee shall not be entitled to any payment with respect to
that Performance Period unless the Committee shall otherwise determine.
(e) Each Performance Unit may be paid in whole shares of Stock,
including Restricted Stock or Deferred Stock (together with any cash
representing fractional shares of Stock), or cash, or a combination of Stock and
cash either as a lump sum payment or in annual installments, all as the
Committee shall determine, at the time of grant of the Performance Unit or
otherwise, commencing as soon as practicable after the end of the relevant
Performance Period. If and to the extent the full value of a Performance Unit is
not paid in Stock, then the shares of Stock representing the portion of the
value of the Performance Unit not paid in Stock shall again become available for
award under the Plan.
7. Restricted Stock
(a) Restricted Stock may be received by an Eligible Participant or Key
Employee either as an Award or as the result of an exercise of an Option or SAR
or as payment for a Performance Unit. Restricted Stock shall be subject to a
restriction period (after which restrictions shall lapse) which shall mean a
period commencing on the date the Award is granted and ending on such date or
upon the achievement of such performance or other criteria as the Committee
shall determine (the "Restriction Period"). The Committee may provide for the
lapse of restrictions in installments where deemed appropriate.
(b) Except as otherwise provided in this Section 7, no shares of
Restricted Stock received by an Eligible Participant or Key Employee shall be
sold, exchanged, transferred, pledged, hypothecated or otherwise disposed of
during the Restriction Period; PROVIDED, HOWEVER, the Restriction Period for any
recipient of Restricted Stock shall expire and all restrictions on shares of
Restricted Stock shall lapse upon the recipient's death, Total Disability,
retirement on or after age 65 or an earlier age with the consent of the Company,
or upon a Significant Event, as determined by the Committee.
(c) Except as otherwise provided in Section 7(b) above, if an Eligible
Participant or Key Employee terminates employment or service with all
Participating Companies for any reason before the expiration of the Restriction
Period, all shares of Restricted Stock still subject to restriction shall,
unless the Committee otherwise determines, be forfeited by the recipient and
shall be reacquired by the Company, and, in the case of Restricted Stock
purchased through the exercise of an Option, the Company shall refund the
purchase price paid on the exercise of the Option. Upon such forfeiture, such
forfeited shares of Restricted Stock shall again become available for award
under the Plan.
(d) The Committee may require, under such terms and conditions as it
deems appropriate or desirable, that the certificates for Restricted Stock
delivered under the Plan be held in custody by a bank or other institution, or
that the Company may itself hold such shares in custody until the Restriction
Period expires or until restrictions thereon otherwise lapse, and may require,
as a condition of any receipt of Restricted Stock, that the recipient shall have
delivered a stock power endorsed in blank relating to the Restricted Stock.
(e) Nothing in this Section 7 shall preclude a recipient of Restricted
Stock from exchanging any shares of Restricted Stock subject to the restrictions
contained herein for any other shares of Stock that are similarly restricted.
8. Deferred Stock
(a) Deferred Stock may be credited to an Eligible Participant or Key
Employee either as an Award or as the result of an exercise of an Option or SAR
or as payment for a Performance Unit.
7
<PAGE>
Deferred Stock shall be subject to a deferral period which shall mean a period
commencing on the date the Award is granted and ending on such date or upon the
achievement of such performance or other criteria as the Committee shall
determine (the "Deferral Period"). The Committee may provide for the expiration
of the Deferral Period in installments where deemed appropriate.
(b) Except as otherwise provided in this Section 8, no Deferred Stock
awarded hereunder shall be sold, exchanged, transferred, pledged, hypothecated
or otherwise disposed of during the Deferral Period; provided, HOWEVER, the
Deferral Period shall expire upon the recipient's death, Total Disability,
retirement on or after age 65 or an earlier age with the consent of the Company,
or upon a Significant Event, as determined by the Committee.
(c) At the expiration of the Deferral Period, the recipient of Deferred
Stock shall be entitled to receive a certificate pursuant to Section 9 for the
number of shares of Stock equal to the number of shares of Deferred Stock
credited on his or her behalf.
(d) Except as otherwise provided in Section 8(b), if an Eligible
Participant or Key Employee terminates employment or service with all
Participating Companies for any reason before the expiration of the Deferral
Period, all shares of Deferred Stock shall, unless the Committee otherwise
determines, be forfeited by the Key Employee or Eligible Participant, and, in
the case of Deferred Stock purchased through the exercise of an Option, the
Company shall refund the purchase price paid on the exercise of the Option. Upon
such forfeiture, such forfeited shares of Deferred Stock shall again become
available for award under the Plan.
9. Certificates for Awards of Stock
(a) Subject to Section 7(d), each Eligible Participant or Key Employee
entitled to receive shares of Stock under the Plan shall be issued a certificate
for such shares. Such certificate shall be registered in the name of the
Eligible Participant or Key Employee and shall bear an appropriate legend
reciting the terms, conditions and restrictions, if any, applicable to such
shares and shall be subject to appropriate stop-transfer orders.
(b) The Company shall not be required to issue or deliver any
certificates for shares of Stock prior to (i) the listing of such shares on any
stock exchange or quotation system on which the Stock may then be listed and
(ii) the completion of any registration or qualification of such shares under
any Federal or state law, or any ruling or regulation of any government body
which the Company shall, in its sole discretion, determine to be necessary or
advisable.
(c) All certificates for shares of Stock delivered under the Plan shall
also be subject to such stop-transfer orders and other restrictions as the
Committee may deem advisable under the rules, regulations and other requirements
of the Securities and Exchange Commission, any stock exchange or quotation
system upon which the Stock is then listed and any applicable Federal or state
securities laws; and the Committee may cause a legend or legends to be placed on
any such certificates to make appropriate reference to such restrictions. The
foregoing provisions of this Section 9(c) shall not be effective if and to the
extent that the shares of Stock delivered under the Plan are covered by an
effective and current registration statement under the Securities Act of 1933,
or if and so long as the Committee determines that application of such
provisions is no longer required or desirable. In making such determination, the
Committee may rely upon an opinion of counsel for the Company.
(d) Except for the restrictions on Restricted Stock or Deferred Stock
under Sections 7 and 8, each Eligible Participant or Key Employee who receives
an award of Stock shall have all of the rights of a stockholder with respect to
such shares, including the right to vote the shares and receive dividends and
other distributions. No Eligible Participant or Key Employee awarded an Option,
an SAR, Performance Unit or Deferred Stock shall have any right as a stockholder
8
<PAGE>
with respect to any shares subject to such Award prior to the date of issuance
to him or her of a certificate or certificates for such shares, except as
otherwise provided under Section 8 with respect to Deferred Stock.
10. Loans and Supplemental Cash Payments
(a) The Committee may provide for supplemental cash payments or loans to
Eligible Participants or Key Employees at such time and in such manner as the
Committee may determine in connection with Awards granted under the Plan.
(b) Supplemental cash payments shall be subject to such terms and
conditions as the Committee may specify; PROVIDED, HOWEVER, in no event shall
the amount of such payment exceed (i) in the case of an Option, the excess of
the Fair Market Value of the shares of Stock, disregarding any restrictions in
the case of Restricted Stock or Deferred Stock, purchased through the Option on
the date of exercise over the option price, or (ii) in the case of an Award of
an SAR, Performance Unit, Restricted Stock or Deferred Stock, the value of the
shares of Stock and other consideration issued in payment of such Award; and
PROVIDED, HOWEVER, in the case of an incentive stock option, no supplemental
cash payment shall be made if it would disqualify such option under Section 422
of the Code.
(c) In the case of loans, any such loan shall be evidenced by a written
loan agreement or other instrument in such form and with such terms and
conditions, including, without limitation, provisions for interest, payment
schedules, collateral, forgiveness, events of default or acceleration of such
loans or parts thereof, as the Committee shall specify; PROVIDED, HOWEVER, that
in the case of an incentive stock option, the interest rate set by the Committee
under such an arrangement shall be no lower than that required to avoid the
imputation of unstated interest under the Code and the Committee shall specify
no such term or condition that would result in such option failing to qualify as
an incentive stock option.
11. Beneficiary
(a) Each Eligible Participant or Key Employee, as the case may be, shall
file with the Committee a written designation, signed by the Eligible
Participant or Key Employee, of one or more persons as the Beneficiary who shall
be entitled to receive the Award, if any, payable under the Plan upon his or her
death, and the designation may name one or more persons as contingent
Beneficiaries. An Eligible Participant or Key Employee may from time to time
revoke or change his or her Beneficiary designation without the consent of any
prior Beneficiary by filing a new designation with the Committee. The last such
designation received by the Committee shall be controlling; PROVIDED, HOWEVER,
that no designation, or change or revocation thereof, shall be effective unless
received by the Committee prior to the Eligible Participant's or Key Employee's
death, and in no event shall it be effective as of a date prior to such receipt.
Any such designation, or revocation or change of such designation, shall be in
such form and manner as the Committee shall determine.
(b) If no such Beneficiary designation is in effect at the time of an
Eligible Participant's or Key Employee's death, or if no designated Beneficiary
survives the Eligible Participant or Key Employee or if such Beneficiary is not
located by the Committee within one year of the death of the Eligible
Participant or Key Employee or if such designation conflicts with law, such
person's estate shall be entitled to receive the Award, if any, payable under
the Plan upon his or her death. If the Committee is in doubt as to the right of
any person to receive such Award, the Company may retain such Award, without
liability for any interest thereon, until the Committee determines the rights
thereto, or the Company may pay such Award into any court of appropriate
jurisdiction and such payment shall be a complete discharge of the liability of
the Company therefor.
9
<PAGE>
12. Administration of the Plan
(a) The Plan shall be administered by a Committee composed of two or
more persons, as appointed by the Board and serving at the Board's pleasure, but
unless and until the Committee is actually appointed by the Board, the Board
shall function as and in place of the Committee
(b) All decisions, determinations or actions of the Committee made or
taken pursuant to grants of authority under the Plan shall be made or taken in
the sole discretion of the Committee and shall be final, conclusive and binding
on all persons for all purposes.
(c) The Committee shall have full power, discretion and authority to
interpret, construe, act and administer the Plan and any part thereof, and its
interpretations and constructions thereof and actions taken thereunder shall be
final, conclusive and binding on all persons for all purposes.
(d) The Committee's decisions and determinations under the Plan need not
be uniform and may be made selectively among participants in the Plan, whether
or not such participants are similarly situated.
(e) The Committee shall keep minutes of its actions under the Plan. The
act of a majority of the members present at a meeting duly called and held shall
be the act of the Committee. Any decision or determination reduced to writing
and signed by all members of the Committee shall be fully as effective as if
made by unanimous vote at a meeting duly called and held.
(f) The Committee may employ such legal counsel, including, without
limitation, independent legal counsel and counsel regularly employed by the
Company, consultants and agents as the Committee may deem appropriate for the
administration of the Plan and may rely upon any opinion received from any such
counsel or consultant and any computations received from any such consultant or
agent. All expenses incurred by the Committee in interpreting and administering
the Plan, including, expenses and professional fees, shall be paid by the
Company.
(g) No member or former member of the Committee or the Board shall be
liable for any action or determination made in good faith with respect to the
Plan or any Award granted under it. Each member or former member of the
Committee or the Board shall be indemnified and held harmless by the Company
against all costs or expenses (including counsel fees) or liabilities (including
any sum paid in settlement of a claim with the approval of the Board) arising
out of any act or omission to act in connection with the Plan unless arising out
of such member's own fraud or bad faith. Such indemnification shall be in
addition to any rights of indemnification the members or former members may have
as Directors or under the Bylaws of the Company.
13. Amendment or Discontinuance
The Board may at any time amend or terminate the Plan. The Plan may also
be amended by the Committee, provided that all such amendments shall be reported
to the Board. No amendment shall, without approval by a majority of the
Company's stockholders, (i) alter the group of persons eligible for qualified
incentive stock options under the Plan, or (ii) increase the maximum number of
shares of Stock which are available for Awards under the Plan. No amendment or
termination shall retroactively impair the rights of any person with respect to
an Award. On or after the occurrence of a Change in Control, the Plan may not be
amended or terminated until all payments required by Section 15 are made.
10
<PAGE>
14. Adjustments in Event of Change in Common Stock
In the event of any recapitalization, reclassification, split-up or
consolidation of shares of Stock, merger or consolidation of the Company or sale
by the Company of all or a substantial portion of its assets, or other event
which could distort the implementation of the Plan or the realization of its
objectives, the Committee may make such appropriate adjustments in the Stock
subject to Awards, including Stock subject to purchase by an Option, or the
terms, conditions or restrictions on Stock or Awards as the Committee deems
equitable; PROVIDED, HOWEVER, that no such adjustments shall be made on or after
the occurrence of a Change in Control without the affected participant's
consent.
15. Change in Control
Notwithstanding anything else herein to the contrary, as soon as
practicable after the occurrence of a Change in Control, if any, the following
shall occur:
(a) All participants in the Plan may, regardless of whether still an
employee of any Participating Company or a director of the Company, elect to
cancel all or any portion of any Option no later than 90 days after the Change
in Control, in which event the Company shall pay to such electing participant,
an amount in cash equal to the excess, if any, of the Current Market Value (as
defined below) of the shares of Stock, including Restricted Stock or Deferred
Stock, subject to the Option or the portion thereof so canceled over the option
or purchase price for such shares; PROVIDED, HOWEVER, that, if the participant
is no longer an employee or in the service of any Participating Company, the
Option is exercisable at the time of the Change in Control.
(b) All Performance Periods shall end and the Company shall pay each
participant an amount in cash equal to the value of such participant's
Performance Units, if any, based upon the Stock's Current Market Value, in full
settlement of such Performance Units.
(c) All Restriction Periods shall end and the Company shall pay each
participant an amount in cash equal to the Current Market Value of the
Restricted Stock held by, or on behalf of, each participant in exchange for such
Restricted Stock.
(d) All Deferral Periods shall end and the Company shall pay to each
participant an amount in cash equal to the Current Market Value of the number of
shares of Deferred Stock credited to such participant in full settlement of such
Deferred Stock.
(e) The Company shall pay to each participant the full amount, if any,
deferred by such participant under the Plan which is not Performance Units,
Restricted Stock or Deferred Stock.
(f) The Company may reduce the amount due any participant under this
Section by the unpaid balance, if any, of the principal and accrued and unpaid
interest of any loans to such participant under Section 10.
(g) For purposes of this Section 15, "Current Market Value" means the
highest Closing Price (defined below) during the period (the "Reference Period')
commencing 30 days prior to the Change in Control and ending 30 days after the
Change in Control; provided, that if the Change in Control occurs as a result of
a tender offer or exchange offer, or a merger, purchase of assets or stock or
other transaction approved by stockholders of the Company, Current Market Value
shall mean the higher of (i) the highest Closing Price during the Reference
Period or (ii) the highest price paid per share pursuant to such tender offer,
exchange offer or transaction. The "Closing Price" on any day during the
Reference Price means the closing price per share of Stock based upon sales
transactions on the national stock exchange or other recognized quotation
service (including the Nasdaq OTC Bulletin Board) that day.
11
<PAGE>
16. Miscellaneous
(a) Nothing in this Plan or any Award granted hereunder shall confer
upon any employee any right to continue in the employ of any Participating
Company or interfere in any way with the right of any Participating Company to
terminate his or her employment at any time.
(b) No Award payable under the Plan shall be deemed salary or
compensation for the purpose of computing benefits under any employee benefit
plan or other arrangement of any Participating Company for the benefit of its
employees unless the Company shall determine otherwise.
(c) No participant shall have any claim to an Award until it is actually
granted under the Plan. To the extent that any person acquires a right to
receive payments from the Company under this Plan, such right shall be no
greater than the right of an unsecured general creditor of the Company. All
payments of awards provided for under the Plan shall be paid in cash from the
general funds of the Company; PROVIDED, HOWEVER, that such payments shall be
reduced by the amount of any payments made to the participant or his or her
dependents, beneficiaries or estate from any trust or special or separate fund
established by the Company to assure such payments. The Company shall not be
required to establish a special or separate fund or other segregation of assets
to assure such payments, and, if the Company shall make any investments to aid
it in meeting its obligations hereunder, the participant shall have no right,
title or interest whatever in or to any such investments except as may otherwise
be expressly provided in a separate written instrument relating to such
investments. Nothing contained in this Plan, and no action taken pursuant to its
provisions, shall create or be construed to create a trust of any kind between
the Company and any participant. To the extent that any participant acquires a
right to receive payments from the Company hereunder, such right shall be no
greater than the right of an unsecured creditor of the Company.
(d) Absence on leave approved by a duly constituted officer of the
Company shall not be considered interruption or termination of employment for
any purposes of the Plan; PROVIDED, HOWEVER, that no Award may be granted to an
employee while he or she is absent on leave.
(e) If the Committee shall find that any person to whom any Award, or
portion thereof, is payable under the Plan is unable to care for his or her
affairs because of illness or accident, or is a minor, then any payment due him
or her (unless a prior claim therefor has been made by a duly appointed legal
representative) may, if the Committee so directs the Company, be paid to his or
her spouse, a child, a relative, an institution maintaining or having custody of
such person, or any other person deemed by the Committee to be a proper
recipient on behalf of such person otherwise entitled to payment. Any such
payment shall be a complete discharge of the liability of the Company therefor.
(f) The right of any person to any Award payable under the Plan may not
be assigned, transferred, pledged or encumbered, either voluntarily or by
operation of law, except as provided in Section 11 with respect to the
designation of a Beneficiary or as may otherwise be required by law
(g) Copies of the Plan and all amendments, administrative rules and
procedures and interpretations shall be made available to all participants at
all reasonable times at the Company's headquarters.
(h) The Committee may cause to be made, as a condition precedent to the
payment of any Award, or otherwise, appropriate arrangements with the
participant or his or her Beneficiary, for the withholding of any federal,
state, local or foreign taxes.
12
<PAGE>
(i) The Plan and the grant of Awards shall be subject to all applicable
federal and state laws, rules and regulations and to such approvals by any
government or regulatory agency as may be required.
(j) All elections, designations, requests, notices, instructions and
other communications from an Eligible Participant or Key Employee, Beneficiary
or other person to the Committee, required or permitted under the Plan, shall be
in such form as is prescribed from time to time by the Committee and shall be
mailed by first class mail or delivered to such location as shall be specified
by the Committee.
(k) The terms of the Plan shall be binding upon the Company and its
successors and assigns. (l) Captions preceding the sections hereof are
inserted solely as a matter of convenience and in no
way define or limit the scope or intent of any provision hereof.
13
<PAGE>
ANNEX B
AGREEMENT AND PLAN OF MERGER
<PAGE>
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT OF MERGER (the "Agreement"), dated as of ___________,
1999, is entered into by and between Triangle Imaging Group, Inc., a Florida
corporation ("Triangle Florida") and [ ] Corporation (Delaware), a Delaware
corporation ("Triangle Delaware").
W I T N E S S E T H:
WHEREAS, Triangle Florida is a corporation duly organized and existing
under the laws of the State of Florida;
WHEREAS, the respective Boards of Directors of Triangle Florida and
Triangle Delaware have determined that it is advisable and in the best interests
of each of such corporations that Triangle Florida merge with and into Triangle
Delaware (the "Merger") upon the terms and subject to the conditions set forth
in this Agreement for the purpose of effecting the change of the state of
incorporation of Triangle Florida from Florida to Delaware;
WHEREAS, the respective Boards of Directors of Triangle Florida and
Triangle Delaware have, by resolutions duly adopted, approved this Agreement,
subject to the approval of the shareholders of each of Triangle Delaware and
Triangle Florida; and
WHEREAS, this Agreement is intended as a tax free plan of
reorganization within the meaning of Section 368 of the Internal Revenue Code;
NOW, THEREFORE, in consideration of the mutual agreements and covenants
set forth herein, Triangle Florida and Triangle Delaware hereby agree as
follows:
1. MERGER. Triangle Florida shall be merged with and into Triangle
Delaware and Triangle Delaware shall be the surviving corporation (hereinafter
sometimes referred to as the "Surviving Corporation"). The Merger shall become
effective upon the date and time when this Agreement is made effective in
accordance with applicable law (the "Effective Time").
2. GOVERNING DOCUMENTS; EXECUTIVE OFFICERS AND DIRECTORS. The
Certificate of Incorporation of Triangle Delaware, from and after 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 laws. The Bylaws of Triangle Delaware from and
after the Effective Time, shall be the Bylaws of the Surviving Corporation
without change or amendment until thereafter amended in accordance with the
provisions thereof, or the Certificate of Incorporation of the Surviving
Corporation and applicable laws. The executive officers, directors and members
of committees of the Board of Directors of Triangle Delaware, as of the
Effective Time, shall become the executive officers, directors and members of
committees of the Board of Directors of the Surviving Corporation, from and
after the Effective Time, until their respective successors have been duly
elected and qualify, unless they earlier die, resign or are removed.
<PAGE>
3. SUCCESSION. At the Effective Time, the separate corporate existence
of Triangle Florida shall cease, and Triangle Delaware shall possess all the
rights, privileges, powers and franchises of a public and private nature of
Triangle Florida; and all property, real, personal and mixed, and all debts due
to Triangle on whatever account, as well as for share subscriptions as all other
things in action belonging to Triangle Florida, shall be vested in the Surviving
Corporation; and all property, rights, privileges, powers and franchises, and
all and every interest shall be thereafter as effectually the property of the
Surviving Corporation as they were of Triangle Florida, and the title to any
real estate vested by deed or otherwise in TRIANGLE Florida shall not revert or
be in any way impaired by reason of the Merger; but all rights of creditors and
all liens upon any property of Triangle Florida shall be preserved unimpaired,
and all debts, liabilities and duties of Triangle Florida shall thenceforth
attach to the Surviving Corporation and may be enforced against it to the same
extent as if such debts, liabilities and duties had been incurred or contracted
by it. All corporate acts, plans, policies, agreements, arrangements, approvals
and authorizations of Triangle Florida its shareholders, Board of Directors and
committees thereof, officers and agents which were valid and effective
immediately prior to the Effective Time, shall be taken for all purposes as the
acts, plans, policies, agreements, approvals and authorizations of the Surviving
Corporation and shall be as effective and binding thereon as the same were with
respect to Triangle Florida. The employees and agents of Triangle Florida shall
become the employees and agents of the Surviving Corporation and continue to be
entitled to the same rights and benefits which they enjoyed as employees and
agents of Triangle Florida. The requirements of any plans or agreements of
Triangle Florida involving the issuance or purchase by Triangle Florida of
certain shares of its capital stock shall be satisfied by the issuance or
purchase of a like number of shares of the Surviving Corporation.
4. 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 Triangle Florida 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 confirm, of record or otherwise, in the Surviving Corporation the
title to and possession of all property, interests, assets, rights, privileges,
immunities, powers, franchises and authority of Triangle Florida, and otherwise
to carry out the purposes of this Agreement, and the officers and directors of
the Surviving Corporation are fully authorized in the name and on behalf of
Triangle Florida or otherwise, to take any and all such action and to execute
and deliver any and all such deeds and other instruments.
5. CONVERSION OF SHARES. At the Effective Time, by virtue of the
Merger and without any action on the part of the holder thereof:
(a) each share of the common stock, par value $.001 per share (the
"Triangle Florida Common Stock") of Triangle Florida outstanding immediately
prior to the Effective Time shall be changed and converted into and shall be one
fully paid and nonassessable share of common stock, par value $.01 per share
(the "Triangle Delaware Common Stock") of Triangle Delaware and no fractional
shares shall be issued and fractions of half or more shall be rounded to a whole
share and fractions of less than half shall be disregarded, such that the issued
2
<PAGE>
and outstanding capital stock of Triangle Delaware resulting from the conversion
of the capital stock of Triangle Florida upon the Effective Time shall be equal
to the number of shares of Common Stock at that time; and
(b) As of the Effective Time, Triangle Delaware hereby assumes all
obligations under any and all employee benefit plans of Triangle Florida in
effect as of the Effective Time or with respect to which employee rights or
accrued benefits are outstanding as of the Effective Time and shall continue the
stock option plans of Triangle Florida. Each outstanding and unexercised option,
warrant or other right to purchase, or security convertible into Triangle
Florida Common Stock shall become an option, warrant or right to purchase, or a
security convertible into the Surviving Corporation's Common Stock on the basis
of one share of the Surviving Corporation's Common Stock for each share of
Triangle Florida Common Stock issuable pursuant to any such option, warrant or
stock purchase right or convertible security, on the same terms and conditions
and at an exercise or conversion price per share equal to the exercise or
conversion price per share applicable to any such Triangle Florida option,
warrant, stock purchase right or other convertible security at the Effective
Time.
A number of shares of the Surviving Corporation's Common Stock shall be
reserved for issuance upon the exercise of options, warrants, stock purchase
rights and convertible securities equal to the number of shares of Triangle
Florida Common Stock so reserved immediately prior to the Effective Time.
(c) the shares of Triangle Delaware Common Stock presently issued and
outstanding in the name of Triangle Florida shall be canceled and retired and
resume the status of authorized and unissued shares of Triangle Delaware Common
Stock, and no shares of Triangle Delaware Common Stock or other securities of
Triangle Florida shall be issued in respect thereof.
6. STOCK CERTIFICATES. As of and after the Effective Time, all of the
outstanding certificates which, immediately prior to the Effective Time,
represented shares of Triangle Florida Common Stock shall be deemed for all
purposes to evidence ownership of, and to represent, shares of Triangle Delaware
Common Stock into which the shares of Triangle Florida Common Stock formerly
represented by such certificates, have been converted as herein provided. The
registered owner on the books and records of the Surviving Corporation or its
transfer agents of any such outstanding stock certificate shall, until such
certificate shall have been surrendered for transfer or otherwise accounted for
to the Surviving Corporation or its transfer agents, 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 Triangle Delaware Common
Stock evidenced by such outstanding certificate as above provided.
7. SHAREHOLDER APPROVAL. This Agreement has been approved by Triangle
Florida under Section 607.1103 of the Florida Business Corporation Act by the
shareholders representing in excess of 50% of the issued and outstanding voting
securities of Triangle Florida. This Agreement has been approved by Triangle
Delaware under Section 253 of the General Corporation Law of the State of
Delaware. The signature of Triangle Florida on this Agreement shall constitute
its written consent as sole shareholder of Triangle Delaware, to this Agreement
and the Merger.
3
<PAGE>
8. AMENDMENT. To the full extent permitted by applicable law, this
Agreement may be amended, modified or supplemented by written agreement of the
parties hereto, either before or after approval of the shareholders of the
constituent corporations and at any time prior to the Effective Time with
respect to any of the terms contained herein.
9. ABANDONMENT. At any time prior to the Effective Time, this
Agreement may be terminated and the Merger may be abandoned by the Boards of
Directors of Triangle Florida or Triangle Delaware, notwithstanding approval of
this Agreement by the shareholders of Triangle Delaware or by the shareholders
of Triangle Florida, or both, if, in the opinion of either of the Boards of
Directors of Triangle Florida or Triangle Delaware, circumstances arise which in
the opinion of such Boards of Directors, make the Merger for any reason
inadvisable.
10. COUNTERPARTS. In order to facilitate the filing and recording of
this Agreement, the same may be executed in two or more counterparts, each of
which shall be deemed to be an original and the same agreement.
11. FLORIDA APPOINTMENT. Triangle Delaware 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 Triangle Florida or Triangle
Delaware arising from the Merger. Triangle Delaware 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 Florida to Triangle Delaware at .
12. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.
4
<PAGE>
IN WITNESS WHEREOF, Triangle Florida and Triangle Delaware have caused
this Agreement to be executed and delivered at ___________________ by their
respective duly authorized officers as of the date first above written.
TRIANGLE IMAGING GROUP, INC.
a Florida corporation
By:_________________________________
Harold S. Fischer
President
a Delaware corporation
By:_________________________________
Harold S. Fischer
President
5
<PAGE>
ANNEX C
"________________"
CERTIFICATE OF INCORPORATION
<PAGE>
_____________ CORPORATION
The undersigned, a natural person, for the purpose of organizing a
corporation for conducting the business and promoting the purpose hereinafter
state, under the provisions and subject to the requirements of the laws of the
State of Delaware (particularly Chapter 1, Title 8 of the Delaware Code and acts
amendatory thereof and supplemental thereto, and known, identified, and referred
to as the "General Corporation Law of the State of Delaware"), hereby certifies:
FIRST: The name of the corporation is Corporation.
SECOND: The address of the registered office of the Corporation in the
State of Delaware shall be at Corporation Trust Center, 1209 Orange Street, City
of Wilmington, County of New Castle, Delaware 19801. The name and address of the
Corporation's registered agent in the State of Delaware is The Corporation Trust
Company, 1209 Orange Street, City of Wilmington, County of New Castle, Delaware
19801.
THIRD: The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may now or hereafter be organized under the
General Corporation Law of the State of Delaware.
FOURTH: 1. The total number of shares of stock which the Corporation
shall have authority to issue is Fifty One Million (51,000,000) shares,
consisting of Fifty Million (50,000,000) shares of Common Stock, par value $.001
per share (the "Common Stock"), and One Million (1,000,000) shares of Preferred
Stock, par value $.001 per share (the "Preferred Stock").
2. Shares of Preferred Stock may be issued from time to time
in one or more series as may be established from time to time by resolution of
the Board of Directors of the Corporation (the "Board of Directors"), each of
which series shall consist of such number of shares and have such distinctive
designation or title as shall be fixed by resolution of the Board of Directors
prior to the issuance of any shares of such series. Each such class or series of
Preferred Stock shall have such voting powers, full or limited, or no voting
powers, and such preferences and relative, participating, optional or other
special rights and such qualifications, limitations or restrictions thereof, as
shall be stated in such resolution of the Board of Directors providing for the
issuance of such series of Preferred Stock. The Board of Directors is further
authorized to increase or decrease (but not below the number of shares of such
class or series then outstanding) the number of shares of any series subsequent
to the issuance of shares of that series.
FIFTH: In furtherance and not in limitation of the powers conferred by
statute and subject to Article Sixth hereof, the Board of Directors is expressly
authorized to adopt, repeal, rescind, alter or amend in any respect the Bylaws
of the Corporation (the "Bylaws").
SIXTH: Notwithstanding Article Fifth hereof, the Bylaws may be adopted,
rescinded, altered or amended in any respect by the shareholders of the
Corporation, but only by the affirmative vote of the holders of not less than a
<PAGE>
majority of the voting power of all outstanding shares of voting stock
regardless of class and voting together as a single voting class.
SEVENTH: The business and affairs of the Corporation shall be managed
by and under the direction of the Board of Directors. Except as may otherwise be
provided pursuant to Section 2 of Article Fourth hereof in connection with
rights to elect additional directors under specified circumstances which may be
granted to the holders of any series of Preferred Stock, the exact number of
directors of the Corporation shall be determined from time to time by a Bylaw or
Amendment thereto provided that the number of directors shall not be reduced to
less than three (3), except that there need be only as many directors as there
are shareholders in the event that the outstanding shares are held of record by
fewer than three (3) shareholders. Elections of directors need not be by written
ballot unless the Bylaws of the Corporation shall so provide.
EIGHTH: Each director shall serve until his successor is elected and
qualified or until his death, resignation or removal; no decrease in the
authorized number of directors shall shorten the term of any incumbent director;
and additional directors, elected pursuant to Section 2 of Article Fourth hereof
in connection with rights to elect such additional directors under specified
circumstances which may be granted to the holders of any series of Preferred
Stock, shall not be included in any class, but shall serve for such term or
terms and pursuant to such other provisions as are specified in the resolution
of the Board of Directors establishing such series. Any stockholder proposals
and nominations for the election of a director by a stockholder shall be
delivered to the Corporate Secretary of the Corporation no less than ninety (90)
days nor more than one hundred twenty (120) days in advance of the first
anniversary of the Company's annual meeting held in the prior year, provided,
however, in the event the Company shall not have had an annual meeting in the
prior year, such notice shall be delivered no less than ninety (90) days nor
more than one hundred twenty (120) days in advance of May 15 of the current
year. Such stockholder nominations must contain (a) as to each person whom the
stockholder proposes to nominate for election or re-election as a director at
the annual meeting: (w) the name, age, business address and residence address of
the proposed nominee, (x) the principal occupation or employment or the proposed
nominee, (y) the class and number of shares of capital stock of the Corporation
which are beneficially owned by the proposed nominee, and (z) any other
information relating to the proposed nominee that is required to be disclosed in
solicitations for proxies for election of directors pursuant to Rule 14a under
the Securities Exchange Act of 1934, as amended; and (b) as to the stockholder
giving notice of nominees for election at the annual meeting, (x) the name and
record address of the stockholder, and (y) the class and number of shares of
capital stock of the Corporation which are beneficially owned by the
stockholder.
NINTH: Except as may otherwise be provided pursuant to Section 2 of
Article Fourth hereof in connection with rights to elect additional directors
under specified circumstances which may be granted to the holders of any series
of Preferred Stock, newly created directorships resulting from any increase in
the number of directors, or any vacancies on the Board of Directors resulting
from death, resignation, removal or other causes, shall be filled solely by the
affirmative vote of a majority of the remaining directors then in office, even
though less than a quorum of the Board of Directors. Any director elected in
accordance with the preceding sentence shall hold office for the remainder of
the full term of the class of directors in which the new directorship was
created or the vacancy occurred and until such director's successor shall have
been elected and qualified or until such director's death, resignation or
removal, whichever first occurs.
2
<PAGE>
TENTH: Except for such additional directors as may be elected by the
holders of any series of Preferred Stock pursuant to the terms thereof
established by a resolution of the Board of Directors pursuant to Article Fourth
hereof, any director may be removed from office with or without cause and only
by the affirmative vote of the holders of not less than 50% of the voting power
of all outstanding shares of voting stock entitled to vote in connection with
the election of such director regardless of class and voting together as a
single voting class.
ELEVENTH: Meetings of shareholders of the Corporation may be held
within or without the State of Delaware, as the Bylaws may provide. The books of
the Corporation may be kept (subject to any provision of applicable law) outside
the State of Delaware at such place or places as may be designated from time to
time by the Board of Directors or in the Bylaws.
TWELFTH: For the purposes of this Certificate of Incorporation, the
terms "affiliate," "associate," "control," "interested stockholder," "owner,"
"person" and "voting stock" shall have the meanings set forth in Section 203(c)
of the Delaware General Corporation Law.
THIRTEENTH: The Corporation reserves the right to adopt, repeal,
rescind, alter or amend in any respect any provision contained in this
Certificate in the manner now or hereafter prescribed by applicable law, and all
rights conferred on shareholders herein are granted subject to this reservation.
FOURTEENTH: No director of the Corporation shall be liable to the
Corporation or its shareholders for monetary damages for breach of fiduciary
duty as a director, except for liability (a) for any breach of the director's
duty of loyalty to the Corporation or its shareholders, (b) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (c) under Section 174 of the Delaware General Corporation Law,
or (d) for any transaction from which the director derived an improper personal
benefit. If the Delaware General Corporation Law hereafter is amended to
authorize the further elimination or limitation of the liability of directors,
then the liability of a director of the Corporation, in addition to the
limitation on personal liability provided herein, shall be limited to the
fullest extent permitted by the amended Delaware General Corporation Law. Any
repeal or modification of this Section by the shareholders of the Corporation
shall be prospective only and shall not adversely affect any limitation on the
personal liability of a director of the Corporation existing at the time of such
repeal or modification.
FIFTEENTH: No contract or other transaction of the Corporation with any
other person, firm or corporation, or in which this corporation is interested,
shall be affected or invalidated by: (a) the fact that any one or more of the
directors or officers of the Corporation is interested in or is a director or
officer of such other firm or corporation; or, (b) the fact that any director or
officer of the Corporation, individually or jointly with others, may be a party
to or may be interested in any such contract or transaction, so long as the
contract or transaction is authorized, approved or ratified at a meeting of the
Board of Directors by sufficient vote thereon by directors not interested
therein, to which such fact of relationship or interest has been disclosed, or
the contract or transaction has been approved or ratified by vote or written
3
<PAGE>
consent of the shareholders entitled to vote, to whom such fact of relationship
or interest has been disclosed, or so long as the contract or transaction is
fair and reasonable to the Corporation. Each person who may become a director or
officer of the Corporation is hereby relieved from any liability that might
otherwise arise by reason of his contracting with the Corporation for the
benefit of himself or any firm or corporation in which he may in any way be
interested.
[ ___________________________]
By:__________________________
Harold S. Fischer
4
<PAGE>
ANNEX D
"_________________"
BY-LAWS
<PAGE>
BYLAWS
OF
[___________]CORPORATION
(A DELAWARE CORPORATION)
The following are the Bylaws of [Triangle] (Delaware), a Delaware
corporation (the "Corporation"), effective as of _______, 1998, after approval
by the Corporation's Board of Directors and shareholders:
ARTICLE I
OFFICES
SECTION 1.01. PRINCIPAL EXECUTIVE OFFICE. The principal executive
office of the Corporation shall be located at 1800 NW 49th Street, Suite 100,
Fort Lauderdale, FL 33309. The Board of Directors of the Corporation (the "Board
of Directors") may change the location of said principal executive office.
SECTION 1.02. OTHER OFFICES. The Corporation may also have an office or
offices at such other place or places, either within or without the State of
Delaware, as the Board of Directors may from time to time determine or as the
business of the Corporation may require.
ARTICLE II
MEETINGS OF SHAREHOLDERS
SECTION 2.01. ANNUAL MEETINGS. The annual meeting of shareholders of
the Corporation shall be held at a date and at such time as the Board of
Directors shall determine. At each annual meeting of shareholders, directors
shall be elected in accordance with the provisions of Section 3.03 hereof and
any other proper business may be transacted.
SECTION 2.02. SPECIAL MEETINGS. Special meetings of shareholders for
any purpose or purposes may be called at any time by a majority of the Board of
Directors, by the Chairman of the Board, the President or by holders of not less
than ten percent (10%) of the voting power of all outstanding shares of voting
stock regardless of class and voting together as a single voting class. The term
"voting stock" as used in these Bylaws shall have the meaning set forth in
Section 203(c) of the Delaware General Corporation Law. Special meetings may not
be called by any other person or persons. Each special meeting shall be held at
such date and time as is requested by the person or persons calling the meeting,
within the limits fixed by law.
<PAGE>
SECTION 2.03. PLACE OF MEETINGS. Each annual or special meeting of
shareholders shall be held at such location as may be determined by the Board of
Directors or, if no such determination is made, at such place as may be
determined by the Chairman of the Board. If no location is so determined, any
annual or special meeting shall be held at the principal executive office of the
Corporation.
SECTION 2.04. NOTICE OF MEETINGS. Written notice of each annual or
special meeting of shareholders stating the date and time when, and the place
where, it is to be held shall be delivered either personally or by mail to
shareholders entitled to vote at such meeting not less than ten (10) nor more
than sixty (60) days before the date of the meeting. The purpose or purposes for
which the meeting is called may, in the case of an annual meeting, and shall, in
the case of a special meeting, also be stated. If mailed, such notice shall be
directed to a stockholder at his address as it shall appear on the stock books
of the Corporation, unless he shall have filed with the Secretary of the
Corporation a written request that notices intended for him be mailed to some
other address, in which case such notice shall be mailed to the address
designated in such request.
SECTION 2.05. CONDUCT OF MEETINGS. All annual and special meetings of
shareholders shall be conducted in accordance with such rules and procedures as
the Board of Directors may determine subject to the requirements of applicable
law and, as to matters not governed by such rules and procedures, as the
chairman of such meeting shall determine. The chairman of any annual or special
meeting of shareholders shall be the Chairman of the Board. The Secretary, or in
the absence of the Secretary, a person designated by the Chairman of the Board,
shall act as secretary of the meeting.
SECTION 2.06. QUORUM. At any meeting of shareholders of the
Corporation, the presence, in person or by proxy, of the holders of record of a
majority of the shares then issued and outstanding and entitled to vote at the
meeting shall constitute a quorum for the transaction of business; PROVIDED,
HOWEVER, that this Section 2.06 shall not affect any different requirement which
may exist under statute, pursuant to the rights of any authorized class or
series of stock, or under the Certificate of Incorporation of the Corporation,
as amended or restated from time to time (the "Certificate"), for the vote
necessary for the adoption of any measure governed thereby.
In the absence of a quorum, the shareholders present in person or by
proxy, by majority vote and without further notice, may adjourn the meeting from
time to time until a quorum is attained. At any reconvened meeting following
such adjournment at which a quorum shall be present, any business may be
transacted which might have been transacted at the meeting as originally
notified.
SECTION 2.07. VOTES REQUIRED. The affirmative vote of a majority of the
shares present in person or represented by proxy at a duly called meeting of
shareholders of the Corporation, at which a quorum is present and entitled to
vote on the subject matter, shall be sufficient to take or authorize action upon
any matter which may properly come before the meeting, except that the election
of directors shall be by plurality vote, unless the vote of a greater or
different number thereof is required by statute, by the rights of any authorized
class of stock or by the Certificate.
2
<PAGE>
Unless the Certificate or a resolution of the Board of Directors
adopted in connection with the issuance of shares of any class or series of
stock provides for a greater or lesser number of votes per share, or limits or
denies voting rights, each outstanding share of stock, regardless of class or
series, shall be entitled to one (l) vote on each matter submitted to a vote at
a meeting of shareholders.
SECTION 2.08. PROXIES. A stockholder may vote the shares owned of
record by him either in person or by proxy executed in writing (which shall
include writings sent by telex, telegraph, cable or facsimile transmission) by
the stockholder himself or by his duly authorized attorney-in-fact. No proxy
shall be valid after three (3) years from its date, unless the proxy provides
for a longer period. Each proxy shall be in writing, subscribed by the
stockholder or his duly authorized attorney-in-fact, and dated, but it need not
be sealed, witnessed or acknowledged.
SECTION 2.09. ACTION BY WRITTEN CONSENT. Any action that may be taken
at any annual or special meeting of shareholders may be taken without a meeting,
without prior notice and without a vote, if a consent in writing, setting forth
the action so taken, shall be signed by the holders of outstanding stock having
not less than the minimum number of votes that would be necessary to authorize
or take such action at a meeting at which all shares entitled to vote thereon
were present and voted. Notice of the taking of such action shall be given
promptly to each stockholder that would have been entitled to vote thereon at a
meeting of shareholders and that did not consent thereto in writing.
SECTION 2.10. LIST OF SHAREHOLDERS. The Secretary of the Corporation
shall prepare and make (or cause to be prepared and made), at least ten (10)
days before every meeting of shareholders, a complete list of the shareholders
entitled to vote at the meeting, arranged in alphabetical order and showing the
address of, and the number of shares registered in the name of, each
stockholder. Such list shall be open to the examination of any stockholder, for
any purpose germane to the meeting, during ordinary business hours, for a period
of at least ten (10) days prior to the meeting, either at a place within the
city where the meeting is to be held, which place shall be specified in the
notice of the meeting, or, if not so specified, at the place where the meeting
is to be held. The list shall also be produced and kept at the time and place of
the meeting during the duration thereof, and may be inspected by any stockholder
who is present.
SECTION 2.11. INSPECTORS OF ELECTION. In advance of any meeting of
shareholders, the Board of Directors may appoint Inspectors of Election to act
at such meeting or at any adjournment or adjournments thereof. If such
Inspectors are not so appointed or fail or refuse to act, the chairman of any
such meeting may (and, upon the demand of any stockholder or stockholder's
proxy, shall) make such an appointment.
The number of Inspectors of Election shall be one (1) or three (3). If
there are three (3) Inspectors of Election, the decision, act or certificate of
a majority shall be effective and shall represent the decision, act or
certificate of all. No such Inspector need be a stockholder of the Corporation.
Subject to any provisions of the Certificate of Incorporation, the
Inspectors of Election shall determine the number of shares outstanding, the
3
<PAGE>
voting power of each, the shares represented at the meeting, the existence of a
quorum and the authenticity, validity and effect of proxies; they shall receive
votes, ballots or consents, hear and determine all challenges and questions in
any way arising in connection with the right to vote, count and tabulate all
votes or consents, determine when the polls shall close and determine the
result; and finally, they shall do such acts as may be proper to conduct the
election or vote with fairness to all shareholders. On request, the Inspectors
shall make a report in writing to the secretary of the meeting concerning any
challenge, question or other matter as may have been determined by them and
shall execute and deliver to such secretary a certificate of any fact found by
them.
SECTION 2.13 NOTICE OF STOCKHOLDER ACTION. Any stockholder proposal or
nomination for the election of a director by a stockholder shall be delivered to
the Corporate Secretary of the Corporation no less than ninety (90) days nor
more than one hundred twenty (120) days in advance of the first anniversary of
the Company's annual meeting held in the prior year, provided, however, in the
event the Company shall not have had an annual meeting in the prior year, such
notice shall be delivered no less than ninety (90) days nor more than one
hundred twenty (120) days in advance of May 15 of the current year. Such
stockholder nominations must contain (a) as to each person whom the stockholder
proposes to nominate for election or re-election as a director at the annual
meeting: (w) the name, age, business address and residence address of the
proposed nominee, (x) the principal occupation or employment or the proposed
nominee, (y) the class and number of shares of capital stock of the Corporation
which are beneficially owned by the proposed nominee, and (z) any other
information relating to the proposed nominee that is required to be disclosed in
solicitations for proxies for election of directors pursuant to Rule 14a under
the Securities Exchange Act of 1934, as amended; and (b) as to the stockholder
giving notice of nominees for election at the annual meeting, (x) the name and
record address of the stockholder, and (y) the class and number of shares of
capital stock of the Corporation which are beneficially owned by the
stockholder.
ARTICLE III
DIRECTORS
SECTION 3.01. POWERS. The business and affairs of the Corporation shall
be managed by and be under the direction of the Board of Directors. The Board of
Directors shall exercise all the powers of the Corporation, except those that
are conferred upon or reserved to the shareholders by statute, the Certificate
of Incorporation or these Bylaws.
SECTION 3.02. NUMBER. The number of directors shall be fixed from time
to time by resolution of the Board of Directors but shall not be less than three
(3) nor more than nine (9).
SECTION 3.03. ELECTION AND TERM OF OFFICE. Each director shall serve
until his successor is elected and qualified or until his death, resignation or
removal, no decrease in the authorized number of directors shall shorten the
term of any incumbent director, and additional directors elected in connection
with rights to elect such additional directors under specified circumstances
which may be granted to the holders of any series of Preferred Stock shall not
be included in any class, but shall serve for such term or terms and pursuant to
4
<PAGE>
such other provisions as are specified in the resolution of the Board of
Directors establishing such series.
SECTION 3.04. ELECTION OF CHAIRMAN OF THE BOARD. At the organizational
meeting immediately following the annual meeting of shareholders, the directors
shall elect a Chairman of the Board from among the directors who shall hold
office until the corresponding meeting of the Board of Directors in the next
year and until his successor shall have been elected or until his earlier
resignation or removal. Any vacancy in such office may be filled for the
unexpired portion of the term in the same manner by the Board of Directors at
any regular or special meeting.
SECTION 3.05. REMOVAL. Any director may be removed from office only as
provided in the Certificate of Incorporation.
SECTION 3.06. VACANCIES AND ADDITIONAL DIRECTORSHIPS. Newly created
directorships resulting from death, resignation, disqualification, removal or
other cause shall be filled solely by the affirmative vote of a majority of the
remaining directors then in office, even though less than a quorum of the Board
of Directors. Any director elected in accordance with the preceding sentence
shall hold office for the remainder of the full term of the class of directors
in which the new directorship was created or the vacancy occurred and until such
director's successor shall have been elected and qualified. No decrease in the
number of directors constituting the Board of Directors shall shorten the term
of any incumbent director.
SECTION 3.07. REGULAR AND SPECIAL MEETINGS. Regular meetings of the
Board of Directors shall be held immediately following the annual meeting of the
shareholders; without call at such time as shall from time to time be fixed by
the Board of Directors; and as called by the Chairman of the Board in accordance
with applicable law.
Special meetings of the Board of Directors shall be held upon call by
or at the direction of the Chairman of the Board, the President or any two (2)
directors, except that when the Board of Directors consists of one (1) director,
then the one director may call a special meeting. Except as otherwise required
by law, notice of each special meeting shall be mailed to each director,
addressed to him at his residence or usual place of business, at least three
days before the day on which the meeting is to be held, or shall be sent to him
at such place by telex, telegram, cable, facsimile transmission or telephoned or
delivered to him personally, not later than the day before the day on which the
meeting is to be held. Such notice shall state the time and place of such
meeting, but need not state the purpose or purposes thereof, unless otherwise
required by law, the Certificate of Incorporation or these Bylaws ("Bylaws").
Notice of any meeting need not be given to any director who shall
attend such meeting in person (except when the person attends a meeting for the
express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened) or who shall waive notice thereof, before or after such meeting, in a
signed writing.
SECTION 3.08. QUORUM. At all meetings of the Board of Directors, a
majority of the fixed number of directors shall constitute a quorum for the
transaction of business, except that when the Board of Directors consists of one
(1) director, then the one director shall constitute a quorum.
5
<PAGE>
In the absence of a quorum, the directors present, by majority vote and
without notice other than by announcement, may adjourn the meeting from time to
time until a quorum shall be present. At any reconvened meeting following such
an adjournment at which a quorum shall be present, any business may be
transacted which might have been transacted at the meeting as originally
notified.
SECTION 3.09. VOTES REQUIRED. Except as otherwise provided by
applicable law or by the Certificate of Incorporation, the vote of a majority of
the directors present at a meeting duly held at which a quorum is present shall
be sufficient to pass any measure.
SECTION 3.10. PLACE AND CONDUCT OF MEETINGS. Each regular meeting and
special meeting of the Board of Directors shall be held at a location determined
as follows: The Board of Directors may designate any place, within or without
the State of Delaware, for the holding of any meeting. If no such designation is
made: (a) any meeting called by a majority of the directors shall be held at
such location, within the county of the Corporation's principal executive
office, as the directors calling the meeting shall designate; and (b) any other
meeting shall be held at such location, within the county of the Corporation's
principal executive office, as the Chairman of the Board may designate or, in
the absence of such designation, at the Corporation's principal executive
office. Subject to the requirements of applicable law, all regular and special
meetings of the Board of Directors shall be conducted in accordance with such
rules and procedures as the Board of Directors may approve and, as to matters
not governed by such rules and procedures, as the chairman of such meeting shall
determine. The chairman of any regular or special meeting shall be the Chairman
of the Board, or, in his absence, a person designated by the Board of Directors.
The Secretary, or, in the absence of the Secretary, a person designated by the
chairman of the meeting, shall act as secretary of the meeting.
SECTION 3.11. FEES AND COMPENSATION. Directors shall be paid such
compensation as may be fixed from time to time by resolution of the Board of
Directors: (a) for their usual and contemplated services as directors; (b) for
their services as members of committees appointed by the Board of Directors,
including attendance at committee meetings as well as services which may be
required when committee members must consult with management staff; and (c) for
extraordinary services as directors or as members of committees appointed by the
Board of Directors, over and above those services for which compensation is
fixed pursuant to items (a) and (b) in this Section 3.11. Compensation may be in
the form of an annual retainer fee or a fee for attendance at meetings, or both,
or in such other form or on such basis as the resolutions of the Board of
Directors shall fix. Directors shall be reimbursed for all reasonable expenses
incurred by them in attending meetings of the Board of Directors and committees
appointed by the Board of Directors and in performing compensable extraordinary
services. Nothing contained herein shall be construed to preclude any director
from serving the Corporation in any other capacity, such as an officer, agent,
employee, consultant or otherwise, and receiving compensation therefor.
SECTION 3.12. COMMITTEES OF THE BOARD OF DIRECTORS. To the full extent
permitted by applicable law, the Board of Directors may from time to time
establish committees, including, but not limited to, standing or special
6
<PAGE>
committees and an executive committee with authority and responsibility for
bookkeeping, with authority to act as signatories on Corporation bank or similar
accounts and with authority to choose attorneys for the Corporation and direct
litigation strategy, which shall have such duties and powers as are authorized
by these Bylaws or by the Board of Directors. Committee members, and the
chairman of each committee, shall be appointed by the Board of Directors. The
Chairman of the Board, in conjunction with the several committee chairmen, shall
make recommendations to the Board of Directors for its final action concerning
members to be appointed to the several committees of the Board of Directors. Any
member of any committee may be removed at any time with or without cause by the
Board of Directors. Vacancies which occur on any committee shall be filled by a
resolution of the Board of Directors. If any vacancy shall occur in any
committee by reason of death, resignation, disqualification, removal or
otherwise, the remaining members of such committee, so long as a quorum is
present, may continue to act until such vacancy is filled by the Board of
Directors. The Board of Directors may, by resolution, at any time deemed
desirable, discontinue any standing or special committee. Members of standing
committees, and their chairmen, shall be elected yearly at the regular meeting
of the Board of Directors which is held immediately following the annual meeting
of shareholders. The provisions of Sections 3.07, 3.08, 3.09 and 3.10 of these
Bylaws shall apply, MUTATIS MUTANDIS, to any such Committee of the Board of
Directors.
ARTICLE IV
OFFICERS
SECTION 4.01. DESIGNATION, ELECTION AND TERM OF OFFICE. The Corporation
shall have a Chairman of the Board, a President, Treasurer, such senior vice
presidents and vice presidents as the Board of Directors deems appropriate, a
Secretary and such other officers as the Board of Directors may deem
appropriate. These officers shall be elected annually by the Board of Directors
at the organizational meeting immediately following the annual meeting of
shareholders, and each such officer shall hold office until the corresponding
meeting of the Board of Directors in the next year and until his successor shall
have been elected and qualified or until his earlier resignation, death or
removal. Any vacancy in any of the above offices may be filled for the unexpired
portion of the term by the Board of Directors at any regular or special meeting.
SECTION 4.02. CHAIRMAN OF THE BOARD. The Chairman of the Board of
Directors shall preside at all meetings of the directors and shall have such
other powers and duties as may from time to time be assigned to him by the Board
of Directors.
SECTION 4.03. PRESIDENT. The President shall be the chief executive
officer of the Corporation and shall, subject to the power of the Board of
Directors, have general supervision, direction and control of the business and
affairs of the Corporation. He shall preside at all meetings of the shareholders
and, in the absence of the Chairman of the Board, at all meetings of the
directors. He shall have the general powers and duties of management usually
vested in the office of president of a corporation, and shall have such other
duties as may be assigned to him from time to time by the Board of Directors.
7
<PAGE>
SECTION 4.04. TREASURER. The Treasurer shall keep and maintain, or
cause to be kept and maintained, adequate and correct books and records of
account of the properties and business transactions of the Corporation,
including accounts of its assets, liabilities, receipts, disbursements, gains,
losses, capital, retained earnings and shares. The books of account shall at all
reasonable times be open to inspection by the directors.
The Treasurer shall deposit all moneys and other valuables in the name
and to the credit of the Corporation with such depositaries as may be designated
by the Board of Directors. He shall disburse the funds of the Corporation as may
be ordered by the Board of Directors, shall render to the President and
directors, whenever they request it, an account of all of his transactions as
the Treasurer and of the financial condition of the Corporation, and shall have
such other powers and perform such other duties as may be prescribed by the
Board of Directors or the Bylaws.
SECTION 4.05. SECRETARY. The Secretary shall keep the minutes of the
meetings of the shareholders, the Board of Directors and all committees. He
shall be the custodian of the corporate seal and shall affix it to all documents
which he is authorized by law or the Board of Directors to sign and seal. He
also shall perform such other duties as may be assigned to him from time to time
by the Board of Directors or the Chairman of the Board or President.
SECTION 4.06. ASSISTANT OFFICERS. The President may appoint one or more
assistant secretaries and such other assistant officers as the business of the
Corporation may require, each of whom shall hold office for such period, have
such authority and perform such duties as may be specified from time to time by
the President.
SECTION 4.07. WHEN DUTIES OF AN OFFICER MAY BE DELEGATED. In the case
of absence or disability of an officer of the Corporation or for any other
reason that may seem sufficient to the Board of Directors, the Board of
Directors or any officer designated by it, or the President, may, for the time
of the absence or disability, delegate such officer's duties and powers to any
other officer of the Corporation.
SECTION 4.08. OFFICERS HOLDING TWO OR MORE OFFICES. The same person may
hold any two (2) or more of the above-mentioned offices.
SECTION 4.09. COMPENSATION. The Board of Directors shall have the power
to fix the compensation of all officers and employees of the Corporation.
SECTION 4.10. RESIGNATIONS. Any officer may resign at any time by
giving written notice to the Board of Directors, to the President, or to the
Secretary of the Corporation. Any such resignation shall take effect at the time
specified therein unless otherwise determined by the Board of Directors. The
acceptance of a resignation by the Corporation shall not be necessary to make it
effective.
SECTION 4.11. REMOVAL. Any officer of the Corporation may be removed,
with or without cause, by the affirmative vote of a majority of the entire Board
of Directors. Any assistant officer of the Corporation may be removed, with or
without cause, by the President or by the Board of Directors.
8
<PAGE>
ARTICLE V
INDEMNIFICATION OF DIRECTORS, OFFICERS
EMPLOYEES END OTHER CORPORATE AGENTS
SECTION 5.01. ACTION, ETC. OTHER THAN BY OR IN THE RIGHT OF THE
CORPORATION. The Corporation shall indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Corporation) by reason of the
fact that he is or was a director, officer, employee or agent of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee, trustee or agent of another corporation,
partnership, joint venture, trust or other enterprise (all such persons being
referred to hereinafter as an "Agent"), against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the Corporation, and with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of NOLO CONTENDERE or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the Corporation, and, with respect to any criminal action or
proceeding, that he had reasonable cause to believe that his conduct was
unlawful.
SECTION 5.02. ACTION, ETC., BY OR IN THE RIGHT OF THE CORPORATION. The
Corporation shall indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action or suit by or in
the right of the Corporation to procure a judgment in its favor by reason of the
fact that he is or was an Agent against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Corporation, except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the Corporation by a court of competent jurisdiction, after exhaustion
of all appeals therefrom, unless and only to the extent that the court in which
such action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which such court shall deem proper.
SECTION 5.03. DETERMINATION OF RIGHT OF INDEMNIFICATION. Any
indemnification under Sections 5.01 or 5.02 (unless ordered by a court) shall be
made by the Corporation only as authorized in the specific case upon a
determination that indemnification of the Agent is proper in the circumstances
because the Agent has met the applicable standard of conduct set forth in
Sections 5.01 and 5.02 hereof, which determination is made (a) by the Board of
Directors, by a majority vote of a quorum consisting of directors who were not
parties to such action, suit or proceeding, or (b) if such a quorum is not
obtainable, or, even if obtainable, if a quorum of disinterested directors so
directs, by independent legal counsel in a written opinion, or (c) by the
shareholders.
9
<PAGE>
SECTION 5.04. INDEMNIFICATION AGAINST EXPENSES OF SUCCESSFUL PARTY.
Notwithstanding the other provisions of this Article V, to the extent that an
Agent has been successful on the merits or otherwise, including the dismissal of
an action without prejudice or the settlement of an action without admission of
liability, in defense of any action, suit or proceeding referred to in Sections
5.01 or 5.02 hereof, or in defense of any claim, issue or matter therein, such
Agent shall be indemnified against expenses, including attorneys' fees actually
and reasonably incurred by such Agent in connection therewith.
SECTION 5.05. ADVANCES OF EXPENSES. Except as limited by Section 5.06
of this Article V, expenses incurred by an Agent in defending any civil or
criminal action, suit, or proceeding shall be paid by the Corporation in advance
of the final disposition of such action, suit or proceeding, if the Agent shall
undertake to repay such amount if it shall ultimately be determined that such
person is not entitled to be indemnified as authorized in this Article V.
Notwithstanding the foregoing, no advance shall be made by the Corporation if a
determination is reasonably and promptly made by the Board of Directors by a
majority vote of a quorum of disinterested directors, or (if such a quorum is
not obtainable or, even if obtainable, a quorum of disinterested directors so
directs) by independent legal counsel in a written opinion, that, based upon the
facts known to the Board of Directors or counsel at the time such determination
is made, such person acted in bad faith and in a manner that such person did not
believe to be in or not opposed to the best interest of the Corporation, or,
with respect to any criminal proceeding, that such person believed or had
reasonable cause to believe his conduct was unlawful.
SECTION 5.06. RIGHT OF AGENT TO INDEMNIFICATION UPON APPLICATION;
PROCEDURE UPON APPLICATION. Any indemnification or advance under this Article V
shall be made promptly, and in any event within ninety days, upon the written
request of the Agent, unless a determination shall be made in the manner set
forth in the second sentence of Subsection 5.05 hereof that such Agent acted in
a manner set forth therein so as to justify the Corporation's not indemnifying
or making an advance to the Agent. The right to indemnification or advances as
granted by this Article V shall be enforceable by the Agent in any court of
competent jurisdiction, if the Board of Directors or independent legal counsel
denies the claim, in whole or in part, or if no disposition of such claim is
made within ninety (90) days. The Agent's expenses incurred in connection with
successfully establishing his right to indemnification, in whole or in part, in
any such proceeding shall also be indemnified by the Corporation.
SECTION 5.07. OTHER RIGHTS AND REMEDIES. The indemnification and
advancement of expenses provided by, or granted pursuant to, this Article V
shall not be deemed exclusive of any other rights to which an Agent seeking
indemnification or advancement of expenses may be entitled under any Bylaw,
agreement, vote of shareholders or disinterested directors or otherwise, both as
to action in his official capacity and as to action in another capacity while
holding such office, and shall, unless otherwise provided when authorized or
ratified, continue as to a person who has ceased to be an Agent and shall inure
to the benefit of the heirs, executors and administrators of such a person. All
rights to indemnification under this Article V shall be deemed to be provided by
10
<PAGE>
a contract between the Corporation and the Agent who serves in such capacity at
any time while these Bylaws and other relevant provisions of the Delaware
General Corporation Law and other applicable law, if any, are in effect. Any
repeal or modification thereof shall not affect any rights or obligations then
existing.
SECTION 5.08. INSURANCE. Upon resolution passed by the Board of
Directors, the Corporation may purchase and maintain insurance on behalf of any
person who is or was an Agent against any liability asserted against him and
incurred by him in any such capacity, or arising out of his status as such,
whether or not the Corporation would have the power to indemnify him against
such liability under the provisions of this Article V.
SECTION 5.09. CONSTITUENT CORPORATIONS. For the purposes of this
Article V, references to "the Corporation" shall include, in addition to the
resulting corporation, all constituent corporations (including all constituents
of constituents) absorbed in a consolidation or merger as well as the resulting
or surviving corporation, which, if the separate existence of such constituent
corporation had continued, would have had power and authority to indemnify its
Agents, so that any Agent of such constituent corporation shall stand in the
same position under the provisions of the Article V with respect to the
resulting or surviving corporation as that Agent would have with respect to such
constituent corporation if its separate existence had continued.
SECTION 5.10. OTHER ENTERPRISES, FINES, AND SERVING AT CORPORATION'S
REQUEST. For purposes of this Article V, references to "other enterprises" shall
include employee benefit plans; references to "fines" shall include any excise
taxes assessed on a person with respect to any employee benefit plan; and
references to "serving at the request of the Corporation" shall include any
service as a director, officer, employee or agent of the Corporation which
imposes duties on, or involves services by, such director, officer, employee or
agent with respect to any employee benefit plan, its participants or
beneficiaries; and a person who acted in good faith and in a manner he
reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the Corporation" as referred to in this Article
V.
SECTION 5.11. SAVINGS CLAUSE. If this Article V or any portion thereof
shall be invalidated on any ground by any court of competent jurisdiction, then
the Corporation shall nevertheless indemnify each Agent as to expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
with respect to any action, suit or proceeding, whether civil, criminal,
administrative or investigative, and whether internal or external, including a
grand jury proceeding and an action or suit brought by or in the right of the
Corporation, to the full extent permitted by any applicable portion of this
Article V that shall not have been invalidated, or by any other applicable law.
11
<PAGE>
ARTICLE VI
STOCK
SECTION 6.01. CERTIFICATES. Except as otherwise provided by law, each
stockholder shall be entitled to a certificate or certificates which shall
represent and certify the number and class (and series, if appropriate) of
shares of stock owned by him in the Corporation. Each certificate shall be
signed in the name of the Corporation by the Chairman of the Board or a
Vice-Chairman of the Board or the President or a Vice President, together with
the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant
Secretary. Any or all of the signatures on any certificate may be a facsimile.
In case any officer, transfer agent or registrar who has signed or whose
facsimile signature has been placed upon a certificate shall have ceased to be
such officer, transfer agent or registrar before such certificate is issued, it
may be issued by the Corporation with the same effect as if such person were
such officer, transfer agent or registrar at the date of issue.
SECTION 6.02. TRANSFER OF SHARES. Shares of stock shall be transferable
on the books of the Corporation only by the holder thereof, in person or by his
duly authorized attorney, upon the surrender of the certificate representing the
shares to be transferred, properly endorsed, to the Corporation's transfer
agent, if the Corporation has a transfer agent, or to the Corporation's
registrar, if the Corporation has a registrar, or to the Secretary, if the
Corporation has neither a transfer agent nor a registrar. The Board of Directors
shall have power and authority to make such other rules and regulations
concerning the issue, transfer and registration of certificates of the
Corporation's stock as it may deem expedient.
SECTION 6.03. TRANSFER AGENTS AND REGISTRARS. The Corporation may have
one or more transfer agents and one or more registrars of its stock whose
respective duties the Board of Directors or the Secretary may, from time to
time, define. No certificate of stock shall be valid until countersigned by a
transfer agent, if the Corporation has a transfer agent, or until registered by
a registrar, if the Corporation has a registrar. The duties of transfer agent
and registrar may be combined.
SECTION 6.04. STOCK LEDGERS. Original or duplicate stock ledgers,
containing the names and addresses of the shareholders of the Corporation and
the number of shares of each class of stock held by them, shall be kept at the
principal executive office of the Corporation or at the office of its transfer
agent or registrar.
SECTION 6.05. RECORD DATES. The Board of Directors may fix, in advance,
a date as the record date for the purpose of determining shareholders entitled
to notice of, or to vote at, any meeting of shareholders or any adjournment
thereof, or shareholders entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock, or in order to make a
determination of shareholders for any other proper purpose. Such date in any
case shall be not more than sixty (60) days, and in case of a meeting of
shareholders, not less than ten (10) days, prior to the date on which the
particular action requiring such determination of shareholders is to be taken.
Only those shareholders of record on the date so fixed shall be entitled to any
of the foregoing rights, notwithstanding the transfer of any such stock on the
books of the Corporation after any such record date fixed by the Board of
Directors.
<PAGE>
TRIANGLE IMAGING GROUP, INC. PROXY
TRIANGLE IMAGING GROUP, INC.
THIS PROXY IS BEING SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
PLEASE CLEARLY INDICATE A RESPONSE BY CHECKING EITHER THE PROXY (THE "PROXY")
[FOR] OR [AGAINST] BOX NEXT TO EACH OF THE THREE (3) PROPOSALS
THE UNDERSIGNED HEREBY APPOINT(S) MR. HAROLD S. FISCHER WITH
THE POWER OF SUBSTITUTION AND RESUBSTITUTION TO VOTE ANY AND ALL SHARES OF
CAPITAL STOCK OF TRIANGLE IMAGING GROUP, INC. (THE "COMPANY") WHICH THE
UNDERSIGNED WOULD BE ENTITLED TO VOTE AS FULLY AS THE UNDERSIGNED COULD DO IF
PERSONALLY PRESENT AT THE ANNUAL MEETING OF THE COMPANY, TO BE HELD ON MAY 27,
1999, AT 10:00 A.M. LOCAL TIME, AND AT ANY ADJOURNMENTS THEREOF, HEREBY REVOKING
ANY PRIOR PROXIES TO VOTE SAID STOCK, UPON THE FOLLOWING ITEMS MORE FULLY
DESCRIBED IN THE NOTICE OF ANY PROXY STATEMENT FOR THE ANNUAL MEETING (RECEIPT
OF WHICH IS HEREBY ACKNOWLEDGED):
1. ELECTION OF DIRECTORS
VOTE
[ ] FOR ALL NOMINEES LIST BELOW EXCEPT AS MARKED TO THE
CONTRARY BELOW
[ ] WITHHOLD AUTHORITY TO VOTE FOR ALL NOMINEES LISTED
BELOW (INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR
ANY INDIVIDUAL NOMINEE STRIKE A LINE THROUGH THE
NOMINEE'S NAME BELOW.)
ABSTAIN
CHARLES D. WINSLOW, HAROLD S. FISCHER AND J. ALAN LINDAUER
2. ADOPTION OF THE 1998 INCENTIVE PLAN
[ ] FOR THE ADOPTION OF THE 1999 INCENTIVE PLAN
[ ] AGAINST THE ADOPTION OF THE 1999 INCENTIVE PLAN
[ ] ABSTAIN
1
<PAGE>
3. AMENDMENT OF THE COMPANY'S ARTICLES OF INCORPORATION.
VOTE
[ ] FOR THE AMENDMENT OF THE COMPANY'S ARTICLES OF
INCORPORATION
[ ] AGAINST THE AMENDMENT OF THE COMPANY'S ARTICLES OF
INCORPORATION
[ ] ABSTAIN
4. REINCORPORATION IN THE STATE OF DELAWARE.
VOTE
[ ] FOR THE REINCORPORATION IN THE STATE OF DELAWARE
[ ] AGAINST THE REINCORPORATION IN THE STATE OF DELAWARE
[ ] ABSTAIN
5. RATIFICATION OF CERTAIN CHANGES TO THE COMPANY'S CAPITAL
STRUCTURE.
[ ] FOR THE RATIFICATION OF CERTAIN CHANGES
[ ] AGAINST THE RATIFICATION OF CERTAIN CHANGES
[ ] ABSTAIN
THIS PROXY WILL BE VOTED AS SPECIFIED ABOVE; UNLESS OTHERWISE
INDICATED, THIS PROXY WILL BE VOTED FOR ELECTION OF THE THREE (3) NOMINEES NAMED
IN ITEM 1, THE ADOPTION OF THE 1999 INCENTIVE PLAN IN ITEM 2, THE AMENDMENT OF
THE COMPANY'S ARTICLES OF INCORPORATION IN ITEM 3, THE REINCORPORATION OF THE
COMPANY IN DELAWARE IN ITEM 4 AND THE RATIFICATION OF CERTAIN CHANGES TO THE
COMPANY'S CAPITAL STRUCTURE IN ITEM 5.
IN HIS DISCRETION, THE PROXY IS AUTHORIZED TO VOTE UPON SUCH
OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
2
<PAGE>
PLEASE MARK, SIGN DATE AND RETURN THIS PROXY PROMPTLY USING
THE ACCOMPANYING POSTAGE PRE-PAID ENVELOPE. THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS OF TRIANGLE IMAGING GROUP, INC.
DATED:
-------------------
---------------------------
SIGNATURE
---------------------------
SIGNATURE IF JOINTLY OWNED:
---------------------------
PRINT NAME:
PLEASE SIGN EXACTLY AS THE
NAME APPEARS ON YOUR STOCK CERTIFICATE. WHEN SHARES OF CAPITAL STOCK ARE HELD BY
JOINT TENANTS, BOTH SHOULD SIGN. WHEN SIGNING AS ATTORNEY, EXECUTOR,
ADMINISTRATOR, TRUSTEE, GUARDIAN, OR CORPORATE OFFICER, PLEASE INCLUDE FULL
TITLE AS SUCH. IF THE SHARES OF CAPITAL STOCK ARE OWNED BY A CORPORATION, SIGN
IN THE FULL CORPORATE NAME BY AN AUTHORIZED OFFICER. IF THE SHARES OF CAPITAL
STOCK ARE OWNED BY A PARTNERSHIP, SIGN IN THE NAME OF THE PARTNERSHIP BY AN
AUTHORIZED OFFICER.
PLEASE MARK, DATE, SIGN AND RETURN THIS PROXY PROMPTLY
IN THE ENCLOSED ENVELOPE
3
