<PAGE>1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material pursuant to Rule 14a-11(c) or Rule 14a-12
_______________________________VWR Corporation__________________________
(Name of Registrant as Specified In Its Charter)
________________________________________________________________________
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-
6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
1) Title of each class of securities to which transaction applies:
________________________________________________________________
2) Aggregate number of securities to which transaction applies:
________________________________________________________________
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:_/
________________________________________________________________
4) Proposed maximum aggregate value of transaction:
________________________________________________________________
_/ 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 the
date of its filing.
1) Amount Previously Paid:
_____________________________________________
2) Form, Schedule or Registration Statement No.:
_____________________________________________
3) Filing Party:
_____________________________________________
4) Date Filed:
_____________________________________________
<PAGE>2
VWR CORPORATION
Dear Shareholder:
You are cordially invited to attend the VWR Corporation Annual Meeting of
Shareholders to be held at The Sheraton Great Valley Hotel, 707 Lancaster Pike,
Frazer, Pennsylvania, on May 5, 1994, at 11:00 a.m. At the Meeting, we will
report on the operations of the Corporation and respond to any questions you
may have.
Your Board of Directors recommends that you vote to re-elect three Directors
whose terms of office will expire this year, change the State of Incorporation
to Pennsylvania and ratify the selection of Ernst & Young as our independent
auditors. These matters are described more fully in the formal notice of
annual meeting and proxy statement which appear on the following pages.
YOUR VOTE IS VERY IMPORTANT. Whether or not you plan to attend the Meeting, it
is important that your shares be represented. Therefore, I urge you to sign,
date, and promptly return the enclosed proxy in the enclosed postage paid
envelope. If you attend the Meeting, you will, of course, have the privilege
of voting in person.
I look forward to greeting you personally; and on behalf of the Board of
Directors and management of the Corporation, I would like to express our
appreciation for your interest in VWR Corporation.
Sincerely,
BY (SIGNATURE)
JERROLD B. HARRIS
PRESIDENT AND CHIEF EXECUTIVE OFFICER
West Chester, Pennsylvania
March 31, 1994
<PAGE>3
VWR CORPORATION
---------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
----------------------------------------
TO THE SHAREHOLDERS:
The Annual Meeting of Shareholders of VWR Corporation will be held at The
Sheraton Great Valley Hotel, 707 Lancaster Pike, Frazer, Pennsylvania, on May
5, 1994, at 11:00 a.m. for the following purposes:
1. To elect three Directors.
2. To vote upon a proposal to change the State of Incorporation from
Delaware to Pennsylvania.
3. To ratify the selection of Ernst & Young as independent auditors
for the year ending December 31, 1994.
4. To transact such other business as may properly come before the
Meeting.
Only shareholders of record at the close of business on March 15, 1994, are
entitled to notice of, and to vote at, this meeting.
BY ORDER OF THE BOARD OF DIRECTORS
BY (SIGNATURE)
WALTER S. SOBON
VICE PRESIDENT FINANCE
CORPORATE SECRETARY
West Chester, Pennsylvania
March 31, 1994
Each shareholder is urged to sign and return promptly the accompanying proxy in
the enclosed envelope to which no postage need be affixed if mailed in the
United States.
<PAGE>4
VWR CORPORATION
CORPORATE OFFICES
1310 GOSHEN PARKWAY
WEST CHESTER, PENNSYLVANIA 19380
--------------------------
PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 5, 1994
----------------------
This proxy statement and accompanying proxy, which are being mailed to
shareholders on or about March 31, 1994, are furnished in connection with the
solicitation of proxies on behalf of the Board of Directors of VWR Corporation
(the "Corporation," "Company" or "VWR") to be voted at the Annual Meeting of
Shareholders of the Corporation to be held at 11:00 a.m. on May 5, 1994 at The
Sheraton Great Valley Hotel, 707 Lancaster Pike, Frazer, Pennsylvania, for the
purposes set forth in the accompanying Notice of Annual Meeting of
Shareholders. Shareholders who execute proxies retain the right to revoke them
at any time before they are voted. A proxy may be revoked by written notice to
the Secretary of the Corporation at 1310 Goshen Parkway, West Chester,
Pennsylvania 19380; by submission of a proxy with a later date; or by a request
in person to return the executed proxy. The Company has engaged Corporate
Investor Communications, Inc. in the solicitation of proxies for a fee of
approximately $5,000. The cost of solicitation of proxies is to be borne by
the Corporation.
Shareholders of record at the close of business on March 15, 1994, will be
entitled to vote at the meeting on the basis of one vote for each share of
Common Stock held. On March 15, 1994, there were 11,020,849 shares of Common
Stock outstanding.
In the election of directors, assuming a quorum is present, the three nominees
receiving the highest number of votes cast at the Meeting will be elected
directors. Approval of the proposed amendment to the Corporation's change in
State of Incorporation requires the affirmative vote of a majority of the
outstanding shares of the Company's Common Stock. Ratification of the
selection of Ernst & Young as independent auditors requires the affirmative
vote of a majority of shares present in person or by proxy and entitled to
vote. If a proxy is marked as "withhold authority" or "abstain" on any matter,
or if specific instructions are given that no vote be cast on any specific
matter (a "specified non-vote"), the shares represented by such proxy will not
be voted on such matter. Accordingly, abstentions and broker and other
specified non-votes will have the same effect as casting a vote against the
proposed amendment to the State of Incorporation. Abstentions will have the
effect of a negative vote on the ratification of Ernst & Young as independent
auditors, but a specified non-vote will have no effect on the outcome of that
specific matter.
<PAGE>5
ELECTION OF DIRECTORS
Your Corporation has a classified Board of nine Directors. Directors are
elected for terms of three years in classes of three. This year, Messrs.
Curtis P. Lindley, Edward A. McGrath, Jr., and N. Stewart Rogers, all of whom
are current Directors, have been nominated to be re-elected for a term which
expires in 1997. The Board of Directors recommends a vote FOR their re-
election, and unless you indicate otherwise, your signed proxy will be voted
for the election of these nominees.
The Board of Directors expects that each of the nominees will be available for
election; but if any of them is not a candidate at the time the election
occurs, it is intended that such proxy will be voted for the election of
another nominee to be designated to fill any such vacancy by the Nominating
Committee of the Board of Directors of the Corporation.
Nominees for Re-election
- ------------------------
CURTIS P. LINDLEY -- Mr. Lindley, 69, retired, was Chairman of the Board of
Directors of PENWEST, Ltd. ("Penwest"), a manufacturer of specialty
carbohydrate chemicals and flavor and food additive products, from 1987 to
1990. He served as Chairman and Chief Executive Officer of PENWEST from 1984
to 1987. He is Chairman of the Board of Directors of The Ostrom Company. Mr.
Lindley is also a Director of Univar Corporation ("Univar"), a distributor of
industrial chemicals. Mr. Lindley has been a Director of the Corporation since
1986.
EDWARD A. MCGRATH, JR. -- Mr. McGrath, 63, has been President and Chief
Executive Officer of Graybar Electric Company, Inc. ("Graybar"), an electrical
distributor, since 1989. He was the Executive Vice President of Graybar from
1988 to 1989. From 1979 to 1988, he was Vice President of Operations of
Graybar. Mr. McGrath is a Director of Graybar and The Boatmen's National Bank
of St. Louis. Mr. McGrath has been a Director of the Corporation since 1992.
N. STEWART ROGERS -- Mr. Rogers, 64, has been Chairman of the Board of
Directors of PENWEST since February, 1990. He was Senior Vice President of
Univar from 1971 to 1991. He is a Director of Univar, John Fluke Mfg. Co.,
Inc., and U.S. Bancorp. Mr. Rogers is the brother of Robert S. Rogers, a
Director of the Corporation, and brother-in-law of James H. Wiborg, a Director,
Chairman, and Chief Strategist of the Corporation. Mr. Rogers has been a
Director of the Corporation since 1986.
Continuing Directors -- Term Expires in 1995
- --------------------------------------------
JERROLD B. HARRIS -- Mr. Harris, 51, was elected President and Chief Executive
Officer of VWR effective March 1, 1990. He was Executive Vice President and
Chief Operating Officer of the Corporation from 1988 to 1990. From 1983 to
1988, Mr. Harris was President of VWR Scientific, Inc. He is a Director of
Momentum Corporation ("Momentum"), a distributor of photographic and graphic
arts equipment and supplies. Mr. Harris has been a Director of the Corporation
since 1988.
<PAGE>6
DONALD P. NIELSEN -- Mr. Nielsen, 55, retired, was founder, President, Chief
Executive Officer, and Chairman of Hazleton Corporation, a biological and
chemical research and testing company, headquartered in Herndon, Virginia. Mr.
Nielsen is also Chairman of the Board of Bob Walsh Enterprises, Inc. and DiaCom
Technologies, Inc. Mr. Nielsen has been a Director of the Corporation since
1988.
JAMES H. WIBORG -- Mr. Wiborg, 69, is Chairman of the Board and Chief
Strategist for the Corporation. He was elected Vice Chairman of the Board and
Chief Strategist of Momentum effective March 1, 1990. Since August, 1990, Mr.
Wiborg has served as Chairman of Univar. From 1986 to August, 1990, he served
Univar as Chairman of the Board and Chief Strategist. Mr. Wiborg is also a
Director of Seafirst Corporation, Seattle First National Bank, PACCAR, Inc.,
and PENWEST. Mr. Wiborg is the brother-in-law of N. Stewart Rogers and Robert
S. Rogers, Directors of the Corporation. Mr. Wiborg has been a Director of the
Corporation since 1986.
Continuing Directors -- Term Expires in 1996
- --------------------------------------------
JAMES W. BERNARD -- Mr. Bernard, 56, has been President and Chief Executive
Officer of Univar since 1986. He was appointed Chairman of Univar Europe's
Supervisory Board on August 23, 1991. Mr. Bernard is a Director of Univar and
Van Waters & Rogers, LTD. Mr. Bernard has been a Director of the Corporation
since 1988.
RICHARD E. ENGEBRECHT -- Mr. Engebrecht, 67, is Chairman of the Board of
Momentum. He was also President, and Chief Executive Officer of Momentum from
March 1, 1990 through December 31, 1992. He was President and Chief Executive
Officer of VWR from 1986 to 1990. He resigned as an officer of VWR effective
March 1, 1990. He is a Director of Momentum, Eldec Corporation, PENWEST, and
Univar. Mr. Engebrecht has been a Director of the Corporation since 1986.
ROBERT S. ROGERS -- Mr. Rogers, 70, has been President of Lands-West, Inc.,
recreational real estate developers, since 1978. Mr. Rogers is also a Director
of Univar. Mr. Rogers is the brother of N. Stewart Rogers, a Director of the
Corporation, and brother-in-law of James H. Wiborg, a Director, Chairman, and
Chief Strategist of the Corporation. Mr. Rogers has been a Director of the
Corporation since 1986.
<PAGE>7
<TABLE>
<CAPTION>
OWNERSHIP OF VWR CORPORATION STOCK
Amount and Nature of Beneficial
Ownership of Common Stock Percent of Class as
Directors as of January 31, 1994 (1) of January 31, 1994
- -------- --------------------------- --------------------
<S> <C> <C>
NOMINEES FOR RE-ELECTION
Curtis P. Lindley 218,331 (2) 1.95%
Edward A. McGrath, Jr. 3,351 .03%
N. Stewart Rogers 366,049 (3)(4) 3.27%
CONTINUING DIRECTORS-
TERM EXPIRES IN 1995:
Jerrold B. Harris 204,840 (5) 1.83%
Donald P. Nielsen 24,551 0.22%
James H. Wiborg 478,174 (6) 4.28%
CONTINUING DIRECTORS-
TERM EXPIRES IN 1996
James W. Bernard 87,491 (7) 0.78%
Richard E. Engebrecht 107,916 0.97%
Robert S. Rogers 157,955 (8) 1.41%
Certain
Executive Officers
- ------------------
Walter S. Sobon 20,652 (9) 0.18%
Richard H. Serafin 8,133 (10) 0.07%
Joseph A. Panozzo 14,084 (11) 0.13%
Paul J. Nowak 7,411 (12) 0.07%
Certain Beneficial
Owners
- ------------------
Mitchell Hutchins
Institutional Investors, Inc.
1285 Avenue of the Americas
New York, New York 10019 671,518 6.01%
- --------------------------------------------------------------------------
</TABLE>
(1) Except as otherwise indicated, beneficial ownership represents sole voting
and sole investment power with respect to $1.00 par value Common Stock, the
Corporation's only outstanding class of stock.
(2) Mr. Lindley disclaims any beneficial interest in 4,372 shares (included in
the amounts shown in the above table) owned by his spouse.
(3) Mr. N. Stewart Rogers shares voting and investment power over 32,745
shares (included in the amounts shown in the above table) held in a trust for
the benefit of his mother.
<PAGE>8
(4) Mr. N. Stewart Rogers is a trustee of a trust for grandchildren which
holds 4,000 shares (included in the amounts shown in the above table).
(5) Includes 36,257 shares which Mr. Harris had the right to acquire within 60
days of January 31, 1994 through the exercise of options. Also includes 35,538
shares acquired under benefit plans for which beneficial ownership is based
upon sole voting power.
(6) Mr. Wiborg disclaims any beneficial interest in 150,000 shares (included
in the amounts shown in the above table) owned by his spouse. Mr. Wiborg is
also a trustee of two trusts owning 69,337 shares (included in the amounts
shown in the above table). Mr. Wiborg disclaims beneficial interest in the
shares owned by these trusts.
(7) Mr. Bernard disclaims any beneficial interest in an additional 40,000
shares (included in the amounts shown in the above table) owned by his spouse.
(8) Mr. Robert S. Rogers disclaims any beneficial interest in an additional
17,394 shares (included in the amounts shown in the above table) owned by his
spouse.
(9) Includes 8,000 shares which Mr. Sobon had the right to acquire within 60
days of January 31, 1994 through the exercise of options. Also includes 3,790
shares acquired under benefit plans for which beneficial ownership is based
upon sole voting power.
(10) Includes 2,498 shares acquired under benefit plans for which beneficial
ownership is based upon sole voting power.
(11) Includes 4,900 shares which Mr. Panozzo had the right to acquire within 60
days of January 31, 1994 through the exercise of options. Also includes 1,411
shares acquired under benefit plans for which beneficial ownership is based
upon sole voting power.
(12) Includes 4,522 shares which Mr. Nowak had the right to acquire within 60
days of January 31, 1994 through the exercise of options. Also includes 2,594
shares acquired under benefit plans for which beneficial ownership is based
upon sole voting power.
As of January 31, 1994, all Directors and executive officers of VWR Corporation
as a group (14 persons), beneficially owned shares totalling 1,698,938 or
15.19% of the Common Stock outstanding. Members of the group shared voting
and/or investment power with other persons as to 106,082 of such shares or .95%
of the Common Stock outstanding.
Section 16(a) of the Securities Exchange Act of 1934, as amended requires the
Company's directors, executive officers and holders of more than 10% of the
Company's Common Stock to file with the Commission initial reports of ownership
and reports of changes in ownership of Common Stock and other equity securities
of the Company. The Company believes that all parties subject to Section 16(a)
complied with the filing requirements during the year ended December 31, 1993
with the following exceptions: Joseph A. Panozzo, Senior Vice President,
reported one grant of restricted stock late on an amended Form 3 and one stock
option grant late on a subsequently filed Form 4; Paul J. Nowak, Senior Vice
President, reported one stock option grant late on a subsequently filed Form 4;
Robert S. Rogers, Director, reported one sale of stock late on a subsequently
<PAGE>9
filed Form 4; and Donald P. Nielsen, Director, reported one purchase of stock
late on a subsequently filed Form 4.
FEES TO DIRECTORS AND COMMITTEES OF THE BOARD
Each Non-employee Director receives for services an annual retainer of $10,000
(payable in shares of restricted stock), fees of $1,000 for attending Board of
Directors meetings ($2,500 if the meeting is held outside a Director's state of
residence), fees of $500 for attending Board Committee meetings, and, when
applicable, reimbursement of travel expenses in connection with meetings. Each
member of the Executive Committee receives an annual retainer of $2,000 and the
Chairman of each standing Committee of the Board receives an annual retainer of
$2,000.
Mr. Wiborg, as Chairman of the Board and Chief Strategist, had a Consulting
Services Agreement which provided for a base retainer of $75,000 in 1993
(including Directors' annual retainer) and a variable retainer or bonus
determined by the Board of Directors. No variable retainer or bonus was paid
to him in 1993.
The Corporation's Board of Directors has standing Audit/Pension, Compensation,
Executive, and Nominating Committees. The members of each Committee with
responsibility for the year ended December 31, 1993 and the functions performed
thereby are outlined below:
Messrs. Lindley, McGrath, Nielsen, N. S. Rogers, and R. S. Rogers are members
of the AUDIT/PENSION COMMITTEE of which Mr. N. S. Rogers is Chairman. The
Audit/Pension Committee has responsibility for recommending to the Board of
Directors the firm of independent auditors to be retained by the Corporation;
reviewing with the Corporation's auditors the scope of the audit; reviewing and
recommending corporate accounting policies to the Board of Directors; reviewing
reports of independent auditors as to the adequacy of the Corporation's
accounting system, controls, and other matters; and reviewing areas of possible
conflicts of interest and sensitive payments. The Committee also has the
responsibility of establishing investment policy and selecting the trustee of
the funds of the VWR Corporation Retirement Plan; reviewing and making
recommendations to the Board of Directors with respect to the performance of
any third parties responsible for the administration and for the investment of
funds; reviewing the annual reports for the VWR Corporation Retirement Plan;
and establishing and administering systems of periodic reporting.
Messrs. Bernard, Engebrecht, McGrath, and Wiborg are members of the
COMPENSATION COMMITTEE of which Mr. Wiborg is Chairman. The Compensation
Committee has the responsibility for recommending compensation of executive
officers; establishing bonus criteria; reviewing annually the operation of all
compensation and benefit practices and salary administration procedures;
consulting with the Pension Committee regarding the pension cost effects of
trends in compensation; recommending benefit levels in the Corporation's
retirement program; and recommending Directors' fees.
Messrs. Engebrecht, Harris, and Wiborg are members of the EXECUTIVE COMMITTEE
of which Mr. Wiborg is Chairman. The Executive Committee has the authority to
exercise all the power of the Board of Directors between meetings of the Board
of Directors, except to the extent limited by law and certain other exceptions
specified in the enabling resolution.
<PAGE>10
Messrs. Bernard, Engebrecht, N. S. Rogers, and Harris (Ex-Officio) are members
of the NOMINATING COMMITTEE of which Mr. Bernard is the Chairman. The
Nominating Committee has the responsibility of receiving, reviewing, and
maintaining files of individuals qualified to be recommended as nominees for
election as Directors; reviewing annually the capability of each incumbent
Director to continue to serve as Director; recommending a list of individuals
to the Board of Directors for nomination for election to the Board of
Directors; and recommending individuals for appointment as new committees may
be created or as replacement committees are required.
Shareholder nominations to the Board of Directors must be made in accordance
with the procedures set forth in the Bylaws of the Corporation, which require,
among other things, that nominations must be received not less than 120 days
prior to the date which corresponds to the date on which the Corporation mailed
its proxy statement for the previous year's Annual Meeting of Shareholders.
Article IX of the Certificate of Incorporation would allow Disinterested
Directors or persons beneficially owning shares of Voting Stock having a Market
Price of $250,000 or more, when cumulative voting was in effect as a result of
the existence of a 40% shareholder (as defined in the Certificate of
Incorporation), to nominate one or more candidates for election as a Director
and to have information relating to such nominees included in the Corporation's
proxy statement.
The Audit/Pension Committee met two times, the Compensation Committee two
times, the Executive Committee three times, and the entire Board of Directors
four times during 1993.
EXECUTIVE COMPENSATION
Report of Compensation Committee
The Corporation's executive compensation program is administered by the
Compensation Committee ("Committee"), which is composed of four independent,
non-employee directors. Following review and approval by the Committee, all
issues pertaining to executive compensation are submitted to the full Board of
Directors for ratification.
Since its spin off from Univar Corporation in 1986, the Corporation has
maintained the philosophy that compensation of its executive officers
(including its chief executive officer) and management should be directly and
materially linked to value creation for shareholders. The objective is that
the largest component of an executive's compensation is the annual incentive
bonus, which rewards executives for meeting financial targets based on the
relationship of the Corporation's return on capital to its cost of capital.
The Corporation's executive compensation program consists of four components:
base salary, annual incentive bonus, long-term equity based incentive
compensation, and the Corporation's contributions to various savings and stock
ownership programs. The Committee has not yet deemed it necessary to consider
the possible tax effect on the Corporation, under the federal Revenue
Reconciliation Act of 1993, of annual compensation exceeding $1 million paid to
any individual.
Base Salary
Base salary is designed to be competitive, although generally conservative as
compared to equivalent positions at comparable companies, such as those that
are included in the Wholesale Trade Distributors Index shown in the Performance
<PAGE>11
Graph on page 15, below. Since 1986, the Corporation's philosophy is to place
a relatively greater emphasis on the annual incentive components of
compensation.
Annual Incentive Compensation Plan
The Corporation's Executive Bonus Plan (the "Bonus Plan") provides annual cash
and incentive stock awards, which are based upon the relationship of the
Corporation's return on "invested capital" to its "cost of capital" (as both
terms are defined in the Bonus Plan). Each year the Committee approves bonus
targets by salary grade. The Corporation determines an individual's potential
bonus award by multiplying that person's target bonus by a factor which is
calculated using the percentage which the Corporation's return on invested
capital bears to its cost of capital. No bonuses are earned if the
Corporation's return on invested capital is less than 60% of its cost of
capital. The potential awards may then be adjusted (from zero to 1.5 times the
potential award) by an assessment of the executive's performance, which is
determined by the Chief Executive Officer based on subjective factors and is
subject to the Committee's approval. The Committee assesses the Chief
Executive Officer's performance.
For 1993, the Corporation's pre-tax cost of capital as calculated in accordance
with the Bonus Plan was 15.2%.
In accordance with the Bonus Plan, bonus awards are paid as follows: an award
up to 150% of a participant's target bonus is paid in cash; any portion of the
award in excess of 150% but less than 200% of target is paid in restricted
stock. The Bonus Plan does not take into consideration an executive officer's
current stock ownership and options. For 1993 all bonuses were paid in cash in
accordance with the Bonus Plan.
Long-Term Incentive Plan
In addition to the Bonus Plan, executives may be awarded additional stock
incentives (incentive stock options, non-qualified stock options, and
restricted stock awards) under the 1986 Long Term Incentive Plan (LTIP)
approved by the shareholders. Such stock awards generally vest over four years
and are intended to align an executive's interests with those of shareholders.
Stock options are awarded with an exercise price equal to the fair market value
at the date of grant and are not repriced. Options generally vest over a seven
year period. The Corporation will periodically grant additional stock awards
to provide continuing incentives for future performance. Such awards are
recommended by the Chief Executive Officer and are subject to Committee
approval. The size of previous awards and the number of options held are
considered by the Committee, but are not determinative. During 1993, in
accordance with these policies, the Committee granted stock options to two
executive officers of the Corporation. The restricted stock awards made in
1993 and shown in the Summary Compensation Table, below, were made pursuant to
the Bonus Plan as awards for 1992.
Other Plans
The Corporation maintains a 401(k) savings plan and an Employee Stock Ownership
Plan (ESOP). Under the 401(k) Plan, the Corporation contributes, in VWR stock
only, up to 50% of the first 3% of each employee's earnings as a matching
contribution, which is invested entirely in VWR common stock. Under the ESOP,
<PAGE>12
the Corporation allocates VWR common stock evenly among all eligible
participants, irrespective of salary or position in the Corporation. The ESOP
shares vest equally over an employment period of five years, at which point the
employee is vested 100% in the plan.
Chief Executive Officer Compensation
The Committee's objective is to correlate Mr. Harris' remuneration with the
performance of the Corporation. The Committee believes Mr. Harris' base salary
is average as compared with the salaries of chief executive officers of
comparable companies such as those included in the Wholesale Trade Distributors
Index referred to above. The Committee did not increase Mr. Harris' base
salary for 1993 from its 1992 level. Mr. Harris also participates in the same
Bonus Plan applicable to the other named executive officers, and his bonus for
1993 was determined under the Bonus Plan, as described above. Mr. Harris'
performance rating reduced his potential award in 1993, as the Corporation's
goals were not achieved in their entirety.
The Compensation Committee
James H. Wiborg, Chairman
James W. Bernard
Richard E. Engebrecht
Edward A. McGrath, Jr.
Compensation Committee Interlocks and Insider Participation
Mr. Harris, President and Chief Executive Officer of the Corporation served as
a Director of Momentum whose Chairman of the Board, Mr. Engebrecht, served on
the Corporation's Compensation Committee for 1993.
Summary Compensation Table
The Summary Compensation Table includes individual compensation information on
the Chief Executive Officer and the four other most highly-paid executive
officers, for services rendered in all capacities for the three fiscal years
ended December 31, 1993.
<PAGE>13
<TABLE>
<CAPTION> Long Term
Compensation
Annual ------------------------
Compensation Restricted
Name and ----------------- Stock Stock All Other
Principal Position Year Salary($) Bonus($) Awards($)(1) Options(#) Compensation($)(2)
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Jerrold B. Harris 1993 $275,004 $138,922 $14,771
President and Chief 1992 287,697 275,886 $279,869 11,191
Executive Officer 1991 266,695 353,665 81,788 11,581
Walter S. Sobon 1993 149,170 53,906 13,449
Vice President 1992 146,503 126,607 48,819 13,440
Finance and Chief 1991 131,214 121,739 10,972 13,675
Financial Officer
Richard H. Serafin 1993 133,320 36,460 16,040
Vice President 1992 133,811 85,634 18,188 15,791
Information Systems 1991(3) 88,971 61,202 11,452
and Chief Information
Officer
Joseph A. Panozzo 1993 140,040 61,992 13,000 13,558
Senior Vice 1992 120,670 100,507 9,357 13,786
President
Paul J. Nowak 1993 115,020 36,460 10,000 13,651
Senior Vice 1992 103,603 51,865 2,972 12,888
President
</TABLE>
(1) The following named executive officers held restricted stock in the
indicated aggregate amounts and values as of December 31, 1993: Mr. Harris,
18,407 shares, $223,185 value; Mr. Sobon, 3,226 shares, $39,118 value; Mr.
Serafin, 853 shares, $10,340 value; Mr. Panozzo, 439 shares, $5,320 value; Mr.
Nowak, 140 shares, $1,691 value. Dividends are paid on restricted stock.
All restricted stock awards granted to the named executives by the Corporation
vest at a rate of 25% per annum from the date of grant. The following named
executive officers were granted restricted stock awards in the indicated year
and amounts: Mr. Harris, 17,492 shares in 1992, 6,414 shares in 1991; Mr.
Sobon, 3,051 shares in 1992, 860 shares in 1991; Mr. Serafin, 1,137 shares in
1992; Mr. Panozzo, 585 shares in 1992; Mr. Nowak, 186 shares in 1992.
(2) Includes Company matching contributions to the Inve$tor Tax Savings
Investment Plan and Company automobile allowance. The following named
executive officers received Company automobile benefits: Mr. Harris, $13,313
in 1993, $9,035 in 1992, and $6,688 in 1991: Mr. Sobon, $13,313 in 1993, 1992,
and 1991: Mr. Serafin, $13,313 in 1993 and 1992, and $9,984 in 1991: Mr.
Panozzo, $13,422 in 1993 and $12,658 in 1992: Mr. Nowak, $13,313 in 1993 and
$12,853 in 1992.
(3) Mr. Serafin joined the Company on April 1, 1991.
<PAGE>14
The following table contains information concerning the grant of stock options
made during fiscal 1993 under the Company's LTIP to the Named Executive
Officers:
Option Grants in Last Fiscal Year
---------------------------------
Potential realizable
value at assumed
annual rates of stock
price appreciation
Individual Grants for option term (3)
- -------------------------------------------------------- ---------------------
% to
Total
Options
Granted
to
Employees Exercise
Options in Price
Granted Fiscal ($/Share) Expiration
Name (#) (1) Year (2) Date 5%($) 10%($)
- -------------------------------------------------------------------------------
Joseph Panozzo 13,000 27.1% $16.00 Feb. 24, 2003 $130,810 $331,500
Paul Nowak 10,000 20.8% 16.00 Feb. 24, 2003 100,623 255,000
(1) Options have a ten-year term and vest over five years at a rate of 20% per
annum beginning February 25, 1996. In accordance with change-in-control
acceleration provisions, options vest immediately upon the approval by the
Company's shareholders of a merger, plan of exchange, sale of substantially all
of the Company's assets, or plan of liquidation. Options are exercisable no
later than twelve months following the termination of the Optionee's employment
or in the event of death or disability. In the event an Optionee is terminated
with cause, all options would expire upon such termination date.
(2) The exercise price is the market price of the Company's common stock on the
date the options were granted.
(3) Assumed annual rates of stock price appreciation are set by the Securities
and Exchange Commission and are not a forecast of future appreciation, if any,
of the Company's common stock. The actual realizable value depends on the
market value of the Company's common stock on the exercise date, and no gain to
the Optionee is possible without an increase in the price of the stock. All
assumed values are pre-tax and do not include dividends.
Aggregated Option Exercises in Last Fiscal Year
and FY-End Option Values
The following summary table details stock option exercises for named executive
officers during 1993, including the aggregate value of gains on the date of
exercise. In addition, this table includes the number of shares covered by
both exercisable and unexercisable stock options as of December 31, 1993, and
the values for "in-the-money" options, which represent the positive spread
between the exercise price of any such existing stock options and the year-end
price of Common Stock.
<PAGE>15
<TABLE>
<CAPTION> Value of Unexercised
Number of Unexercised In-The-Money Options
Options at FY-End(#) at FY-End ($)
------------------------ --------------------------
Shares Acquired Value
Name on Exercise(#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
- -------------------------------------- ------------------------- --------------------------
<S> <C> <C> <C> <C> <C> <C>
Harris ------ ------ 22,257 58,725 $93,448 $258,766
Sobon ------ ------ 4,000 16,000 17,360 69,440
Serafin ------ ------ 10,000 41,400
Panozzo ------ ------ 2,900 21,000 10,644 34,720
Nowak ------ ------ 2,522 18,000 9,819 34,720
</TABLE>
Performance Graph
Comparison of Five Year Cumulative Total Return among VWR Corporation, Media
General Composite Index and a Wholesale Trade Distributors Index.
<TABLE>
<CAPTION>
Measurement Period Media General Wholesale Trade
(Fiscal Year Covered) VWR Corp Composite Index* Distributors Index**
- --------------------- -------- ---------------- ------------------
<S> <C> <C> <C>
Measurement Pt-12/31/88 $100 $100 $100
FYE 12/31/89 87 119 125
FYE 12/31/90 109 104 116
FYE 12/31/91 156 149 150
FYE 12/31/92 222 164 156
FYE 12/31/93 206 190 179
</TABLE>
The performance graph reflects the March, 1990 distribution by the Corporation
to its shareholders of all of the Common Stock of Momentum then owned by the
Corporation.
* The Media General Composite Index is a broad market index of 7,000 NASDAQ,
NYSE and AMEX issues.
** This index consists of Wholesale Trade Distributors: Durable Goods (Standard
Industry Code 50) and Non-Durable goods (Standard Industry Code 51), and has
been prepared by and is available from Media General, P.O. Box 85333, Richmond,
VA, 23293.
Defined Benefit Retirement Plan
The table below shows the estimated annual benefits payable on retirement under
the VWR Corporation Retirement Plan ("Plan") to persons in specified
remuneration and years-of-service classifications. The table applies to
benefits payable on or after January 1, 1994. The retirement benefits shown
are based upon retirement at normal retirement age.
<PAGE>16
<TABLE>
<CAPTION>
Highest Average Annual
Compensation During Any
Consecutive Five Years of Service
Years of Employment 15 20 25 30 35
- ---------------------- ----------------------------------------------------
<S> <C> <C> <C> <C> <C>
$100,000 $ 23,978 $ 31,970 $ 39,963 $ 47,955 $ 52,751
150,000 37,103 49,470 61,838 74,205 81,626
200,000 50,228 66,970 83,713 100,455 110,501
250,000 63,353 84,470 105,588 126,705 139,376
300,000 76,478 101,670 127,463 152,955 168,251
350,000 89,603 119,470 149,338 179,205 197,126
400,000 102,728 136,970 171,213 205,455 226,001
450,000 115,853 154,470 193,088 231,705 254,876
500,000 128,978 171,970 214,963 257,955 283,751
550,000 142,103 189,470 236,838 284,205 312,626
600,000 155,228 206,970 258,713 310,455 341,501
</TABLE>
With certain exceptions, Section 415 of the Internal Revenue Code currently
limits pensions which may be paid under plans qualified under the Internal
Revenue Code to an annual benefit of $118,800. Additionally, Section 401 of
the Internal Revenue Code limits compensation which must be taken into account
in providing benefits under qualified plans to an annual limit of $150,000.
The Board of Directors, upon the recommendation of the Compensation Committee,
has authorized the establishment of supplemental benefits for executive
officers to whom the limit of Section 415 and 401 applies, or will apply in the
future so that these executive officers will obtain retirement benefits
comparable to other retirement plan participants not impacted by the Section
415 and 401 limits.
Under the terms of the spin-off agreement with Momentum, the Corporation has
agreed to pay two-thirds of all amounts payable to Richard E. Engebrecht under
the Supplemental Benefits Plan and Momentum will pay the remaining one-third.
The Corporation has guaranteed payment of the one-third payable by Momentum and
likewise, Momentum has guaranteed payment of the two-thirds payable by the
Corporation.
Compensation of executive officers covered by the Plan would include salaries
and bonuses as reported in the "Executive Compensation" table. The following
are the approximate years of credited service (rounded to the nearest year) of
the persons named in that table under the Plan: J. Harris, 30; W. Sobon, 5; R.
Serafin, 3; J. Panozzo, 5; P. Nowak, 16.
Compensation of all non-executive officer employees covered by the Plan would
include salaries, commissions, and bonuses. All regular, full-time employees
not members of a collective bargaining unit (except for bargaining units
participating in all Corporation benefits), are eligible to participate in the
Plan.
<PAGE>17
Agreements With Certain Officers
The Board of Directors has approved change of control agreements (the
"Agreements") between the Corporation and each of its current executive
officers, namely J. Harris, W. Sobon, R. Serafin, J. Panozzo, and P. Nowak
(the "Executives"). Each Agreement provides that the Executive will receive
compensation for up to 24 months if his employment is terminated (voluntarily
or involuntarily) for any reason other than gross misconduct, death,
disability, or reaching age 65, provided such termination occurs within 24
months after certain defined events which might lead to a change in control of
the Corporation. The compensation will be paid at a rate equal to the
Executive's current salary and target bonus. The compensation is subject to a
minimum annual rate of not less than the Executive's average compensation for
the preceding three calendar years, and is subject to reduction if the
aggregate present value of all payments would exceed three times the
Executive's "annualized includable compensation," as defined in Section 280G of
the Internal Revenue Code, for the Executive's most recent five taxable years.
The Executive will also continue to have "employee" status for the 24 month
period and will be entitled to retain most employee benefits and rights during
this period.
The estimated aggregate amounts presently payable in the event of a change of
control (assuming each officer receives payments for the maximum 24 month
period) would be: J. Harris $1,366,000, W. Sobon $543,000, R. Serafin
$387,000, J. Panozzo $474,000, and P. Nowak $310,000. The foregoing does not
include the value of any employee benefits which might be payable to the
officer during the 24 month period.
Although the Corporation believes that the compensation or other benefits
payable or vesting upon the Executive's termination should not constitute
"golden parachute payments" under the Internal Revenue Code, the Agreements do
provide for indemnification against excise taxes payable by the Executive in
the event of such a determination. The Corporation may cease payments in the
event the Executive breaches certain non-competition or confidentiality
covenants. The Corporation also has the right to terminate the Agreements upon
a one-year notice, except as to rights accruing as a result of an event which
has triggered the change of control provisions of the Agreements. The Board of
Directors believes that the terms and conditions of the Agreements are in the
best interest of the Corporation.
PROPOSAL TO REINCORPORATE IN PENNSYLVANIA
General
The shareholders are being asked to approve a change in the state of
incorporation of the Corporation from Delaware to Pennsylvania. The
proposed reincorporation will be accomplished by means of a merger (the
"Merger") of the Corporation with and into a newly-formed Pennsylvania
corporation, VWR New Corp., which is a wholly-owned subsidiary of the
Corporation (the "Pennsylvania Corporation"). The Merger will be
effected pursuant to the terms of an Agreement and Plan of Merger which
the shareholders are being asked to adopt, a copy of which is attached
as Exhibit A to this proxy statement (the "Merger Agreement").
In accordance with the Merger Agreement, each share of the Corporation's
Common Stock will be automatically converted into a corresponding share
<PAGE>18
of Common Stock of the Pennsylvania Corporation. After the Merger, the
capital structure of the Pennsylvania Corporation will be identical to
the present capital structure of the Corporation. See "Conversion of
Shares," below.
Upon consummation of the Merger, the separate existence of the
Corporation will terminate and the Pennsylvania Corporation will succeed
to and engage in the Corporation's business. The Merger will have no
effect on the conduct of the daily business operations of the
Corporation, the location of its principal executive offices, or its
management. See "No Change in Business Plan, Management, Assets...,"
page 19.
The internal affairs of the Pennsylvania Corporation will be governed by
the Articles of Incorporation (the "New Articles") and the Bylaws (the
"New Bylaws") of the Pennsylvania Corporation and by Pennsylvania law.
The New Articles and the New Bylaws, which appear herein as attachments
to Exhibit A, the Merger Agreement, do not differ substantively from the
current Certificate of Incorporation and Bylaws of the Corporation. See
"Charter and Bylaws," page 19.
Principal Reasons for the Reincorporation
A principal reason for the reincorporation is to reduce the
Corporation's state tax liability. This liability will be reduced by
approximately $70,000 per year as a result of the change to a
Pennsylvania corporate domicile.
In addition, the Corporation will be conforming its legal residence to
its actual residence. At the time of its incorporation in Delaware in
1986, the Corporation's executive offices were located in Washington.
The primary reason for incorporating in Delaware versus Washington was
to take advantage of the modern and less restrictive provisions of the
Delaware Corporation Law ("DGCL"). In 1989, the Corporation moved its
headquarters from Washington to Pennsylvania. At this time,
Pennsylvania was in the process of significantly modernizing its
business corporation law. Pennsylvania's new Business Corporation Law
of 1988, as amended in 1990 ("PBCL"), is designed to afford
Pennsylvania-domiciled corporations substantial operating flexibility
and other advantages over the DGCL. As a result, the primary
motivations for a corporation headquartered in Pennsylvania to be
incorporated in Delaware have been largely eliminated.
The Board of Directors of the Corporation believes that, in view of the
annual tax savings to the Corporation, the relocation of the
Corporation's principal executive offices to Pennsylvania in 1989, and
the modernization of the PBCL in recent years, the best interests of the
Corporation and its shareholders will be served by changing the
Corporation's state of incorporation from Delaware to Pennsylvania.
Conversion of Shares
At the time the Merger becomes effective, each outstanding share of
Common Stock of the Corporation, par value $1.00 per share, will
automatically be converted on a one-for-one basis into Common Shares,
par value $1.00 per share, of the Pennsylvania Corporation. Such
<PAGE>19
conversion of shares will not result in any change in the present
ownership of shares of stock of the Corporation. All shares of the
Corporation's Common Stock held in its treasury will be cancelled.
After the Merger, certificates that previously represented shares of
Corporation Common Stock will be deemed to represent an equal number of
Common Shares of the Pennsylvania Corporation. Certificates that
previously represented Corporation Common Stock will be replaced by
certificates representing Common Shares of the Pennsylvania Corporation
only when submitted to the transfer agent with a request that they be so
replaced or when they are presented for transfer.
IT WILL NOT BE NECESSARY FOR THE SHAREHOLDERS OF THE CORPORATION TO
EXCHANGE THEIR EXISTING CERTIFICATES FOR NEW CERTIFICATES REPRESENTING
COMMON SHARES OF THE PENNSYLVANIA CORPORATION.
Corporation Employee Benefit Plans
The Corporation's Retirement Plan, ESOP, Investor Tax Savings Plan and
all other employee benefit plans will not be changed in any material
respect by the Merger. For example, the options to acquire Corporation
Common Stock under the Corporation's 1986 Long-Term Incentive Stock Plan
which are outstanding immediately prior to the Merger will be converted
into options to purchase the same number of Common Shares of the
Pennsylvania Corporation on the same terms and conditions as those in
effect immediately prior to the Merger, and future options granted under
such plans will be for Common Shares of the Pennsylvania Corporation.
Trading of Pennsylvania Corporation Common Shares
After the Merger, the Pennsylvania Corporation will be a publicly held
company, its Common Shares will be quoted on the NASDAQ National Market
System (which quotation is a condition of the Merger) and it will file
with the SEC and provide to its shareholders the same type of
information that the Corporation has previously filed and provided.
Shareholders whose Corporation stock is fully tradable before the Merger
will receive freely tradable Pennsylvania Corporation shares.
Shareholders holding restricted stock of the Corporation will receive
share certificates of the Pennsylvania Corporation bearing the same
restrictive legend as appears on their present stock certificates, and
their shares in the Pennsylvania Corporation will be subject to the same
restrictions on transfer as those to which their present shares of stock
in the Corporation are subject. For purposes of computing compliance
with the holding period of Rule 144, shareholders will be deemed to have
acquired their shares in the Pennsylvania Corporation on the date they
acquired their shares in the Corporation. In summary, the Pennsylvania
Corporation and its shareholders will be in the same respective position
under the federal securities laws after the Merger as were the
Corporation and its stockholders prior to the Merger.
No Change in Business Plan, Management, Assets, Liabilities or Net Worth
The proposed reincorporation will not result in any change in the
business, assets, liabilities or net worth of the Corporation. Upon
completion of the Merger, the name of the Corporation will continue to
be VWR Corporation. After the Merger, the Board of Directors of the
<PAGE>20
Pennsylvania Corporation will be comprised of those persons elected to
the Board of Directors of the Corporation at the 1994 Annual Meeting of
Shareholders and the other members of the Corporation's Board whose
terms of office do not expire at the 1994 Annual Meeting. The persons
then holding office as directors of the Corporation will continue to
hold such office as directors of the Pennsylvania Corporation for the
same terms for which they would otherwise serve as directors of the
Corporation.
The persons who currently serve as executive officers of the Corporation
will serve as executive officers of the Pennsylvania Corporation after
the Merger.
Effective Date
The Merger will take effect on the date specified in Articles of Merger
to be filed with the Department of State of the Commonwealth of
Pennsylvania, which date is anticipated to be as soon as practicable
following the adoption and approval of the Merger Agreement by the
shareholders of the Corporation, subject to the terms and conditions of
the Merger Agreement.
Amendments, Deferral or Termination of the Merger Agreement
The Merger Agreement provides that the Boards of Directors of the
Corporation and the Pennsylvania Corporation may amend, modify or
supplement the Merger Agreement prior to or after approval of the Merger
by the shareholders of the Corporation, but not later than the Effective
Date, except that no such amendment, modification or supplement may be
made which is not approved by such shareholders if, in the judgment of
the Board of Directors of the Corporation, it would have a materially
adverse effect upon the rights of such shareholders.
The Merger Agreement also provides that the Board of Directors of the
Corporation may terminate and abandon the Merger or may defer its
consummation for a reasonable period, notwithstanding shareholder
approval, if in the opinion of the Board of Directors such action would
be in the best interests of the Corporation and its shareholders.
Certain Federal Income Tax Consequences
It is a condition to the consummation of the Merger that the Corporation
receive an opinion of tax counsel satisfactory to the Corporation to the
effect that, on the basis of facts and assumptions set forth in such
opinion, for federal income tax purposes:
1. no gain or loss will be recognized by the Corporation, the
Pennsylvania Corporation or shareholders of the Corporation by reason of
the consummation of the Merger;
2. each shareholder's tax basis in the Pennsylvania Corporation Common
Stock into which his or her Corporation Common Stock is converted will
be the same as the tax basis of the Corporation Common Stock held by the
shareholder immediately prior to the consummation of the Merger; and
<PAGE>21
3. a shareholder who holds Corporation Common Stock as a capital asset
will include in his or her holding period for the Pennsylvania
Corporation Common Stock the period during which the shareholder held
the Corporation Common Stock converted into such Pennsylvania
Corporation Common Stock.
No information is provided herein as to the state, local or foreign tax
consequences of the Merger. The federal income tax discussion set forth
above is for general information only. EACH SHAREHOLDER IS URGED TO
CONSULT HIS OR HER OWN TAX ADVISOR AS TO THESE AND ANY OTHER TAX
CONSEQUENCES OF THE MERGER.
Accounting Treatment
For financial reporting purposes, the Merger will be accounted for as a
pooling of interests. Accordingly, the Pennsylvania Corporation will
succeed to all of the financial attributes of the Corporation.
Federal and State Regulatory Requirements
There are no federal or state regulatory requirements with which the
Corporation must comply, or federal or state approvals which must be
obtained by the Corporation in connection with the Merger.
Charter and Bylaws
Upon effecting the reincorporation, the New Articles and New Bylaws of
the Pennsylvania Corporation will be substantially identical to the
existing Certificate of Incorporation and Bylaws of the Corporation,
except for certain technical changes, such as substituting references to
the "DGCL" with references to the "PBCL," and changes triggered by
differences in the corporation statutes of the two states, as discussed
below. For an example of such changes, see "Certain Differences Between
the Corporation Statutes of Delaware and Pennsylvania -
Indemnification", below.
Certain Differences Between the Corporation Statutes of Delaware and
Pennsylvania
Although the DGCL and the PBCL are similar in many respects, there are a
number of differences between the two statutes which should be carefully
considered by the shareholders in evaluating the proposed Merger. The
following summary, which sets forth certain material differences between
the two statutes, does not purport to be a complete statement of all
differences between the DGCL and the PBCL, nor does it purport to be a
complete statement of the provisions of the two statutes which it
compares.
All statements contained in the following summary are qualified in their
entirety by the laws of Delaware and Pennsylvania and reference is made
to those laws for a complete statement of their provisions. Among the
more significant differences affecting the rights, obligations and
relationships between a corporation and its shareholders are the
following:
<PAGE>22
Fiduciary Duties of Directors. Both Delaware and Pennsylvania law
provide that the board of directors has the ultimate responsibility for
managing the business and affairs of a corporation. In discharging this
function, directors owe fiduciary duties of care and loyalty to the
corporation and to its shareholders.
Delaware courts have held that the duty of care requires the directors
to exercise an informed business judgment. An informed business
judgment means that the directors have informed themselves of all
material information reasonable available to them. Delaware courts have
also imposed a heightened standard of conduct upon directors in matters
involving a contest for control of the corporation.
Similar to Delaware law, Pennsylvania law requires that directors
perform their duties in good faith, in a manner they reasonably believe
to be in the best interests of the corporation, and with such care,
including reasonable inquiry, skill and diligence, as a person of
ordinary prudence would use under similar circumstances. The PBCL,
however, contains a provision specifically permitting (not requiring)
directors, in discharging their duties, to consider the effects of any
action taken by them upon any or all affected groups (including, e.g.
shareholders, employees, customers and certain communities) as well as
all other pertinent factors. Furthermore, unlike Delaware law, the PBCL
expressly makes clear that a director has no greater obligation to
justify, or higher burden of proof with respect to, any act relating to
an actual or potential take-over of the corporation than he or she has
with respect to any other act as a director.
Limitation of Director Liability. Both Delaware and Pennsylvania
law permit a corporation's certificate or articles of incorporation to
limit a director's exposure to monetary liability for breach of
fiduciary duty.
The Corporation's Certificate of Incorporation currently eliminates a
director's personal liability for monetary damages to the fullest extent
permitted by Delaware law. Pursuant to Delaware law, this means that a
director presently has no monetary liability except for liability for
(i) breach of the duty of loyalty, (ii) acts or omissions not in good
faith or constituting intentional misconduct or knowing violation of the
law, (iii) declaration of an improper dividend or an improper redemption
of stock, or (iv) any transaction from which the director derived an
improper personal benefit.
Similarly, the New Articles will eliminate a director's liability to the
fullest extent permitted by Pennsylvania law. Pursuant to Pennsylvania
law, this means that a director will have no monetary liability for any
action taken or omitted unless (i) the director breached or failed to
perform his or her duties and (ii) the breach or failure to perform
constitutes self-dealing, willful misconduct or recklessness. Under
Pennsylvania law, a director will also remain personally liable where
the responsibility or liability is pursuant to any criminal statute or
is for the payment of taxes under local, State or Federal law.
Indemnification. The Corporation's Bylaws presently require
indemnification of its directors and officers to the fullest extent
<PAGE>23
permitted under Delaware law. The New Bylaws provide for such
indemnification to the fullest extent permitted by Pennsylvania law.
Both Delaware and Pennsylvania law permit a corporation to indemnify any
person involved in a third party action by reason of his being an
officer or director of the corporation, against expenses, judgments,
fines and settlement amounts paid in such third party action (and
against expenses incurred in any derivative action), if such person
acted in good faith and reasonably believed that his actions were in or
not opposed to the best interests of the corporation and, with respect
to any criminal proceeding, had no reasonable cause to believe that his
conduct was unlawful. Furthermore, both states' laws provide that a
corporation may advance expenses incurred in defending any action upon
receipt of an undertaking by the person to repay the amount advanced if
it is ultimately determined that he is not entitled to indemnification.
In general, no indemnification for expenses in derivative actions is
permitted under either state law where the person has been adjudged
liable to the corporation, unless a court finds him entitled to such
indemnification. If, however, the person has been successful in
defending a third party or derivative action, indemnification for
expenses incurred is mandatory under both states' laws.
In both states the statutory provisions for indemnification are non-
exclusive with respect to any other rights, such as contractual rights
(and, in the case of a Pennsylvania corporation, under a bylaw or vote
of shareholders or disinterested directors), to which a person seeking
indemnification may be entitled. Unlike Delaware law, however,
Pennsylvania law expressly permits such contractual or other rights to
provide for indemnification against judgments and settlements paid in a
derivative action unless a court determines that the act or omission
giving rise to the claim for indemnification constituted willful
misconduct or recklessness. The New Bylaws incorporate this broader
right to indemnification in the context of derivative actions.
Poison Pills and Anti-takeover Laws. Pennsylvania law explicitly
approves poison pills, such as the Corporation's existing Shareholder
Rights Agreement adopted in May 20, 1988 (the "Rights Plan"), but
specific plans will probably still be subject to evaluation on a case-
by-case basis. In that regard, differences between Delaware's and
Pennsylvania's court systems and legal precedents may affect the outcome
of any legal challenge to the Rights Plan. See "Case Law and Court
Systems," page 26. The Rights Plan was primarily written to meet the
standards established in Delaware case law.
Chapter 25 of the PBCL contains certain "anti-takeover" provisions which
apply to a registered corporation, such as the Corporation, unless the
registered corporation elects not to be governed by such provisions.
The Corporation has elected not to be governed by such provisions and,
following the Merger, will continue to be governed by the anti-takeover
provisions currently set forth in its Certificate of Incorporation,
which provisions have been replicated in the New Articles. Accordingly,
the New Articles contain a section which expressly opts out of the
following Pennsylvania anti-takeover provisions: (i) the "control
transactions" provision, which provides for mandatory shareholder notice
of the acquisition of 20% of the voting power of a Pennsylvania
corporation and provides shareholders with the opportunity to demand
<PAGE>24
"fair value" for their shares upon acquisition of voting power, (ii) the
"business combination" provision, which limits a corporation from
engaging in any merger or business combination with an interested
shareholder unless certain conditions have been met, (iii) the "control
share" provision, which limits the voting power of shareholders owning
20% or more of a corporation's voting stock, and (iv) the "disgorgement
provision," which permits a corporation to recover profits resulting
from the sale of shares in certain situations, including those where an
individual or group attempts to acquire at least 20% of the
corporation's voting shares.
Amendments to Charter. Under Delaware law, amending the
Certificate of Incorporation of the Corporation (except those portions
relating to transactions with 20% (or more) stockholders and purchases
from 5% (or more) stockholders, for which super-majority provisions are
set forth in the Certificate of Incorporation and are contained in the
New Articles) requires the approval of the holders of a majority of the
shares entitled to vote. Pennsylvania law only requires the affirmative
vote of a majority of the votes actually cast on a proposed amendment,
unless the articles require a greater percentage, which the New Articles
do not, except for the supermajority provisions referenced above.
Pennsylvania law also eliminates the need for shareholder approval of
certain non-material amendments to the articles of incorporation (such
as a change in the corporate name) and eliminates the need for class
votes in order to change the par value of, or decrease the number of
authorized shares of, any class of stock. Thus, any future amendment of
the Corporation's charter (except for amendments to the super-majority
provisions described above) will be made somewhat easier under
Pennsylvania law.
Mergers and Other Fundamental Transactions. Under Delaware law,
fundamental corporate transactions (such as mergers, sales of all or
substantially all of the corporation's assets, dissolutions, etc.)
require the approval of the holders of a majority of the shares of the
Corporation. Pennsylvania law reduces the approval threshold to a
majority of the votes actually cast by the shareholders at the meeting.
Delaware and Pennsylvania laws each permit a corporation to increase the
minimum percentage vote required above the statutory minimums described
above and thus the provisions of the Corporation's current Certificate
of Incorporation that establish increased voting requirements (e.g. for
transactions with a 20% or more shareholder or purchases of Corporation
shares from a 5% or more shareholder) will also be included in the New
Articles.
Dividends. Delaware law permits dividends to be paid out of (i)
surplus (the excess of net assets of the corporation over capital) or
(ii) net profits for the current or immediately preceding fiscal year,
unless the net assets are less than the capital of any outstanding
preferred stock. Pennsylvania law permits the payment of dividends
unless they would render the corporation insolvent, meaning either (i)
the corporation would be unable to pay its debts as they become due in
the ordinary course of business, or (ii) the total assets of the
corporation would be less than the sum of its total liabilities plus the
amount that would be needed upon dissolution of the corporation to pay
the holders of shares having a liquidation preference.
<PAGE>25
Stock Repurchases. Under Delaware law, a corporation may not
purchase or redeem its own shares when the capital of the corporation is
impaired or when such purchase or redemption would cause an impairment
of the capital of the corporation. A Delaware corporation may, however,
purchase or redeem out of capital any of its preferred shares if such
shares will be retired upon acquisition thereby reducing the capital of
the corporation. In contrast, Pennsylvania law permits a corporation to
redeem any and all classes of its shares and treats such redemption or
repurchase like a dividend, subject to the same limitations described
above.
Voting Rights. Under Delaware law cumulative voting is only
permitted if expressly authorized in a corporation's charter. The
Certificate of Incorporation of the Corporation does not authorize
cumulative voting. Under Pennsylvania law, however, shareholders
automatically have cumulative voting rights unless the Pennsylvania
charter provides otherwise. Therefore, in order to maintain the status
quo, the New Articles state expressly that shareholders do not have
cumulative voting rights.
Appraisal or Dissenters' Rights. The rights of stockholders to
demand payment in cash by a corporation of the fair value of their
shares under certain circumstances are called appraisal rights under the
DGCL and dissenters' rights under the PBCL. Delaware law does not
afford appraisal rights to holders of shares which are either listed on
a national securities exchange, quoted on NASDAQ National Market System
or held of record by more than 2,000 stockholders, unless the plan of
merger or consolidation converts such shares into anything other than
stock of the surviving corporation (such as the Pennsylvania Corporation
in the case of the Merger) or stock of another corporation which is
either listed on a national securities exchange, quoted on NASDAQ or
held of record by more than 2,000 stockholders. For this reason,
shareholders of the Corporation will not have appraisal rights in
connection with the Merger.
Pennsylvania law is substantially the same as Delaware law regarding
appraisal rights, except that (i) Pennsylvania law affords appraisal
rights to holders of shares quoted on NASDAQ and (ii) where shares whose
rights are to be determined are listed on a national exchange or held of
record by more than 2,000 shareholders, dissenters' rights will
nevertheless be available under Pennsylvania law unless the plan
converts such shares into stock of the surviving or new corporation. As
a result of the Merger, the shareholders of the Pennsylvania Corporation
will have dissenters' rights with respect to certain corporate actions,
including mergers, consolidations or share exchanges, which they did not
have as shareholders of the Corporation.
The definition of "fair value" in payment for shares upon exercise of
appraisal or dissenters' rights is substantially identical under both
states' laws. Any valuation methods may be used which are generally
acceptable in the financial community.
APPRAISAL RIGHTS ARE NOT AVAILABLE TO HOLDERS OF THE CORPORATION COMMON
STOCK WITH RESPECT TO THE MERGER OF THE CORPORATION INTO THE
PENNSYLVANIA CORPORATION.
<PAGE>26
Amendments to By-laws. Under Delaware law, if the certificate of
incorporation confers on the board of directors the power to amend the
bylaws, as does the Corporation's Certificate of Incorporation, the DGCL
does not limit the power of the board to make changes in the bylaws.
Under Pennsylvania law, however, the board's power to adopt or amend
bylaw provisions on specified subjects is limited absent a contrary
provision in the articles. In order to maintain the existing power of
the Corporation's board to amend its bylaws, the New Articles expressly
authorize the board to amend the New Bylaws, including in circumstances
otherwise reserved by the PBCL exclusively to the shareholders.
Under Delaware law, a corporation's by-laws may be amended by the
stockholders at any annual meeting, without the need to obtain the
consent of the Board of Directors or to give prior notice that such
action would be taken at the meeting. Pennsylvania law is more
restrictive to shareholders, as it requires that a copy of any proposed
amendment to the by-laws, or a summary thereof, be included with the
notice of the meeting at which the shareholders wish to amend a
Pennsylvania corporation's by-laws. This difference in the two laws
will not initially affect the shareholders of the Corporation since both
the Bylaws of the Corporation and New Bylaws of the Pennsylvania
Corporation require that shareholders provide advance notice of any
matter they wish to submit to a vote of shareholders at any annual or
special meeting.
Action by Written Consent. Delaware law permits a majority of
shareholders to consent in writing to any action without a meeting,
unless the certificate of incorporation prohibits such written consent,
as does the Certificate of Incorporation of the Corporation.
Pennsylvania law also permits shareholder action by majority written
consent, but only in the case of a registered corporation where the
articles specifically authorize less than unanimous consent. To remain
consistent, the New Articles contain a prohibition against shareholder
action by written consent identical to that contained in the
Corporation's Certificate of Incorporation.
Case Law and Court Systems. There is a substantial body of case
law in Delaware interpreting the corporation laws of that state. A
comparable body of judicial interpretations does not exist in
Pennsylvania. Delaware also has established a system of Chancery Courts
to adjudicate matters arising under its corporation law. Pennsylvania
is considering but has not yet established an equivalent court system.
As a result of these factors there may be less certainty as to the
outcome of matters governed by Pennsylvania corporation law or by the
charter of Pennsylvania (and therefore it may be more difficult to
obtain legal guidance as to such matters) than would be the case under
Delaware law.
Special Meetings of Shareholders. Both Delaware and Pennsylvania laws
permit a special meeting of the shareholders to be called by the board
of directors or such other person as may be authorized by the
Corporation's charter or bylaws. Pennsylvania law, however, explicitly
states that shareholders of a registered corporation shall not have a
statutory right to call special meetings. Both the Certificate of
Incorporation of the Corporation and the New Articles provide that
special meetings of the shareholders may only be called by the board.
<PAGE>27
Annual Meeting of Shareholders. Under Delaware law, if the annual
meeting for the election of directors is not held on the designated date
the directors are required to cause such meeting to be held as soon
thereafter as may be convenient. If they fail to do so for a period of
30 days after the designated date, or if no date has been designated,
for a period of 13 months after the organization of the corporation or
after its annual meeting, the Court of Chancery may summarily order a
meeting to be held upon application of any shareholder or director.
Under Pennsylvania law, if the annual meeting of shareholders for
election of directors is not called and held within six months after the
designated time, any shareholder may call such meeting at any time
thereafter without application to any court.
Vote Required
Approval of the Merger Agreement requires the affirmative vote of a
majority of the outstanding shares of the Corporation's Common Stock.
The Board of Directors recommends that you vote FOR the proposed the
Merger. Unless otherwise directed, proxies will be voted FOR approval
of the Merger.
SELECTION OF INDEPENDENT AUDITORS
The Board of Directors will request that the shareholders ratify its selection
of Ernst & Young as independent auditors for the Corporation for the year
ending December 31, 1994. If the shareholders do not ratify the selection of
Ernst & Young, another firm of independent auditors will be selected as
independent auditors by the Board of Directors. Representatives of Ernst &
Young will be present at the Annual Meeting and will be available to respond to
appropriate questions. They will also have the opportunity to make a statement
if they desire to do so.
The Board of Directors recommends a vote FOR this selection.
PROPOSALS OF SECURITY HOLDERS
Under Securities and Exchange Commission rules and the Corporation's Bylaws,
certain shareholder proposals may be included in the Corporation's proxy
statement. Any Shareholder desiring to have such a proposal included in the
Corporation's proxy statement for the Annual Meeting to be held in 1995 must
cause a proposal in full compliance with Rule 14a-8 under the Securities
Exchange Act of 1934 to be received by the Corporation not later than December
2, 1994. The timing and procedure with respect to the submission by
shareholders of nominees for Directors are discussed in this Proxy Statement
under the caption "FEES TO DIRECTORS AND COMMITTEES OF THE BOARD."
OTHER BUSINESS
The Board of Directors has no knowledge of any other business to be acted
upon at this meeting. However, if any other business is presented at the
meeting, proxies will be voted in accordance with the judgment of the
person or persons voting such proxies.
<PAGE>28
BY ORDER OF THE BOARD OF DIRECTORS
BY (SIGNATURE)
WALTER S. SOBON
VICE PRESIDENT FINANCE
CORPORATE SECRETARY
<PAGE>29 Exhibit A
AGREEMENT AND PLAN OF MERGER
BETWEEN
VWR CORPORATION
(a Delaware corporation)
AND VWR NEW CORP.
(a Pennsylvania corporation)
AGREEMENT AND PLAN OF MERGER ("Agreement"), dated as of ___________,
1994, made by and between VWR CORPORATION, a Delaware corporation
("VWR"), and VWR NEW CORP., a Pennsylvania corporation and wholly owned
subsidiary of VWR ("Newco"), (which corporations are sometimes
hereinafter collectively called the "Constituent Corporations").
WITNESSETH:
WHEREAS, VWR has authority to issue 31,000,000 shares of capital stock,
consisting of 30,000,000 shares of Common Stock, par value $1.00 per
share, and 1,000,000 shares of Preferred Stock, par value $1.00 per
share (collectively, the "VWR Capital Stock"); and
WHEREAS, Newco on the Effective Date (as hereinafter defined) will have
the authority to issue 31,000,000 shares of capital stock, consisting of
30,000,000 shares of Common Stock, par value $1.00 per share, and
1,000,000 shares of Preferred Stock, par value $1.00 per share
(collectively, the "Newco Capital Stock"); and
WHEREAS, the Board of Directors of each of the Constituent Corporations
deems it advisable and in the best interests of each of the Constituent
Corporations and its shareholder or stockholders that VWR be merged with
and into Newco as permitted by the General Corporation Law of the State
of Delaware ("GCL") and the Business Corporation Law of 1988 of the
Commonwealth of Pennsylvania ("BCL") under and pursuant to the terms and
conditions hereinafter set forth; and
WHEREAS, the Board of Directors of each of the Constituent Corporations
has approved this agreement and directed that this Agreement be
submitted to its stockholders or shareholder;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements and covenants herein contained and in accordance with the
applicable provisions of the GCL and the BCL, the parties hereto have
agreed and covenanted, and do hereby agree and covenant, as follows:
ARTICLE I
THE MERGER, THE SURVIVING CORPORATION AND
THE EFFECTIVE DATE
1. As soon as practicable following the fulfillment (or waiver, to the
extent permitted therein) of the conditions specified in Article IV
hereof, taking into consideration the closing of accounting periods, VWR
shall be merged with and into Newco (the "Merger") and Newco shall
survive the Merger.
<PAGE>30
2. The date on which the Merger occurs and becomes effective is
hereinafter called the Effective Date. The Merger shall occur and be
effective on the hour and on the date set forth as the effective date in
Articles of Merger incorporating this Agreement filed in the Department
of State of the Commonwealth of Pennsylvania as provided in Subchapter
19C (relating to merger, consolidation, share exchanges and sale of
assets) of the BCL, if prior thereto a duly certified, executed and
acknowledged copy of this Agreement or certificate of merger with
respect thereto has been filed with the Secretary of State of Delaware
as provided in Sections 103 and 252 of the GCL.
3. Newco, as the surviving corporation (the "Surviving Corporation"),
shall continue its corporate existence under the laws of the
Commonwealth of Pennsylvania. On the Effective Date, the separate
existence and corporate organization of VWR, except insofar as it may be
continued by operation of law, shall be terminated and cease.
ARTICLE II
ARTICLES OF INCORPORATION, BYLAWS, DIRECTORS AND
OFFICERS OF THE SURVIVING CORPORATION
1. The Articles of Incorporation of Newco on the Effective Date, in the
form set forth in Attachment I hereto, shall be the Articles of
Incorporation of the Surviving Corporation, until amended or repealed in
accordance with the provisions thereof and of applicable law. Following
the Merger, the Surviving Corporation shall operate under the name "VWR
Corporation."
2. The Bylaws of Newco on the Effective Date, in the form set forth in
Attachment II hereto, shall on the Effective Date become and be the
Bylaws of the Surviving Corporation, until amended or repealed in
accordance with the provisions thereof, of the Articles of Incorporation
and of applicable law.
3. The directors and officers of VWR on the Effective Date will be the
directors and officers, respectively, of Newco on and after the
Effective Date until expiration of their current terms and until their
successors are elected and qualify, or their prior resignation, removal
or death, subject to the Articles of Incorporation and Bylaws of Newco.
ARTICLE III
TREATMENT OF SHARES OF EACH OF THE
CONSTITUENT CORPORATIONS
1. On the Effective Date:
(a) each share of Common Stock of VWR, par value $1.00 per
share, outstanding immediately prior to the Merger shall, by virtue of
the Merger and without any action on the part of the holder thereof, be
converted into and become one share of Newco Common Stock, par value
$1.00 per share;
(b) each share of Newco Capital Stock outstanding immediately
prior to the Merger shall cease to exist and be cancelled;
<PAGE>31
(c) each share of VWR Capital Stock issued and held in the
treasury of VWR on the Effective Date shall be cancelled, and no shares
of stock or other securities of Newco shall be issuable with respect
thereto;
(d) each option outstanding under the VWR 1986 Long Term
Incentive Stock Plan immediately prior to the Merger shall, by virtue of
the Merger and without any action on the part of the holder thereof, be
converted into and become an option to purchase the same number of
shares of Newco Common Stock at the same price and otherwise upon the
same terms and conditions; and
(e) Each right to purchase a share of Common Stock of VWR,
par value $1.00 per share, shall, by virtue of the Merger and without
any action on the part of the holder thereof, be converted into and
become a right to purchase a share of Newco Common Stock, par value
$1.00 per share, at the same price and otherwise under the same terms
and conditions as contained in the Rights Agreement dated as of May 20,
1988 between VWR and First Interstate Bank of Washington, N.A.
2. Certificates representing shares of Newco Capital Stock outstanding
immediately prior to the Merger shall be cancelled. No certificates for
shares of Newco Capital Stock will be issued to holders of any of the
shares of VWR Capital Stock upon the Merger. Certificates representing
shares of VWR Capital Stock (other than certificates representing shares
which are cancelled pursuant to Section 1(c) of this Article III) shall
upon the Merger be deemed for all purposes to represent an equal number
of shares of the same class and series of Newco Capital Stock. After
the Effective Date, whenever certificates which formerly represented
shares of VWR Capital Stock are presented for exchange or registration
of transfer, Newco will cause to be issued in respect thereof
certificates representing an equal number of shares of Newco Capital
Stock of the same class and series.
ARTICLE IV
CONDITIONS, DEFERRAL, TERMINATION AND AMENDMENT
1. The obligation of VWR and Newco to effect the transactions
contemplated hereby is subject to satisfaction of the following
conditions (any or all of which may be waived by VWR and Newco in their
sole discretion to the extent permitted by law):
(a) VWR as sole shareholder of Newco shall have approved this
Agreement in accordance with the BCL;
(b) the stockholders of VWR entitled to vote thereon shall
have adopted this Agreement at a meeting thereof duly held in accordance
with GCL;
(c) the Newco Common Stock to be issued in the Merger or
reserved for issuance shall have been approved for quotation on NASDAQ
National Market System, subject to official notice of issuance;
(d) VWR shall have received an opinion of its tax counsel,
satisfactory to VWR and substantially to the effect that, for federal
<PAGE>32
income tax purposes (i) no gain or loss will be recognized by VWR, Newco
or the stockholders of VWR by reason of the consummation of the Merger,
(ii) each VWR stockholder's tax basis in Newco Capital Stock into which
his or her VWR Capital Stock is converted will be the same as the tax
basis of the VWR Capital Stock held by such stockholder immediately
prior to consummation of the Merger and (iii) a VWR stockholder who
holds VWR Capital Stock as a capital asset will include in his holding
period for the Newco Capital Stock the period during which he held the
VWR Capital Stock converted into such Newco Capital Stock; and
(e) a duly certified, executed and acknowledged copy to this
Agreement or certificate of merger with respect thereto shall have been
filed with the Secretary of State of Delaware in accordance with
Sections 103 and 252 of the GCL.
2. Consummation of the Merger may be deferred by the Board of Directors
of VWR for a reasonable period of time, not later than December 31,
1994, if the Board determines that deferral would be in the best
interests of VWR and its stockholders.
3. (a) This Agreement may be terminated by the Board of
Directors of VWR or Newco at any time before or after the adoption and
approval thereof by the shareholder of Newco or the stockholders of VWR
or both, but not later than the Effective Date. In the event of a
termination after Articles of Merger have been filed in the Department
of State of the Commonwealth of Pennsylvania and before the Effective
Date, a timely statement of termination may be filed in the Department
of State by the terminating corporation.
(b)In the event of termination of this Agreement as above
provided, this Agreement shall become wholly void and of no effect, and
there shall be no liability on the part of either Constituent
Corporation or its Board of Directors or its stockholders or shareholder
except as provided in Section 4 of this Article IV.
4. If the Merger becomes effective, the Surviving Corporation shall
assume and pay all expenses in connection therewith not theretofore paid
by the respective parties. If for any reason the Merger shall not
become effective, VWR shall pay all expenses incurred in connection with
all the proceedings taken in respect of this Agreement or relating
thereto.
5. The parties hereto, by mutual consent of their respective Boards of
Directors, may amend, modify or supplement this Agreement in such manner
as may be agreed upon by them in writing at any time before or after
adoption and approval of this Agreement by the shareholder of Newco and
stockholders of VWR, but not later than the Effective Date, except that
no such amendment, modification or supplement not adopted and approved
by the shareholder of Newco and the stockholders of VWR shall affect the
rights of such shareholder or stockholders in a manner which is
materially adverse to them, in the sole judgment of the Board of
Directors of VWR.
<PAGE>33
ARTICLE V
TRANSFER OF ASSETS AND LIABILITIES
1. On the Effective Date, the rights, privileges, powers and
franchises, both of a public as well as of a private nature, of each of
the Constituent Corporations shall be vested in and possessed by the
Surviving Corporation, subject to all the disabilities, duties and
restrictions of or upon each of the Constituent Corporations; and all
the rights, privileges, powers and franchises of each of the Constituent
Corporations, and all property, real, personal and mixed, and all debts
due to each of the Constituent Corporations on whatever account, as well
for stock subscriptions and all things in action or belonging to each of
the Constituent Corporations shall be transferred to and vested in the
Surviving Corporation; and all property, rights, privileges, powers and
franchises, and all and every other interest, shall be thereafter as
effectually the property of the Surviving Corporation as they were of
the Constituent Corporations, and the title to any real estate vested by
deed or otherwise in either of the Constituent Corporations 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 either of the
Constituent Corporations shall be preserved unimpaired, and all debts,
liabilities and duties of each of the Constituent Corporations shall
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.
2. The parties hereto agree that from time to time and as and when
requested by the Surviving Corporation, or by its successors or assigns,
to the extent permitted by law, the officers and directors of VWR and of
the Surviving Corporation are fully authorized in the name or VWR or
otherwise to execute and deliver all such deeds, assignments,
confirmations, assurances and other instruments and to take or cause to
be taken all such further action as the Surviving Corporation may deem
necessary or desirable in order to vest, perfect, confirm in or assure
the Surviving Corporation title to and possession of all of said
property, rights, privileges, powers and franchises and otherwise to
carry out the intent and purposes of this Agreement.
ARTICLE VI
MISCELLANEOUS
For the convenience of the parties and to facilitate any filing and
recording of this Agreement, any number of counterparts hereof may be
executed, each of which shall be deemed to be an original of this
Agreement but all of which together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, each of the parties to this Agreement, pursuant to
the approval and authority duly given by resolutions adopted by its
Board of Directors, has caused these presents to be executed by its
President or a Vice President and its corporate seal affixed and
attested to by its Secretary or an Assistant Secretary, all as of the
day and year first above written.
<PAGE>34
VWR NEW CORP.
(a Pennsylvania corporation)
(Corporate Seal)
By: ___________________________
President
ATTEST:
By: _______________________
Secretary
VWR CORPORATION
(a Delaware corporation)
(Corporate Seal)
By: __________________________
President
ATTEST:
By: ______________________
Secretary
<PAGE>35 Exhibit A
Attachment 1
AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
VWR NEW CORP.
VWR NEW CORP. (the "Corporation"), a corporation organized and existing
under the laws of the Commonwealth of Pennsylvania, hereby certifies as
follows:
A. The name of the Corporation is VWR New Corp. The address of the
registered office of the Corporation in the Commonwealth of Pennsylvania
is 1310 Goshen Parkway, West Chester, Chester County, Pennsylvania 19380
B. The Corporation was incorporated under the Pennsylvania Business
Corporation Law of 1988 on February 10, 1994.
C. These Amended and Restated Articles of Incorporation were duly
adopted by unanimous written consent of the Corporation's Board of
Directors and written consent of its sole shareholder in accordance with
Sections 1727(b) and 1766(a) of the Pennsylvania Business Corporation
Law of 1988.
D. Pursuant to Section 1915 of the Pennsylvania Business Corporation
Law of 1988, the provisions of the Corporation's original Articles of
Incorporation are hereby amended, restated and superseded in their
entirety as follows:
ARTICLE I
The name of the Corporation is VWR Corporation
ARTICLE II
The address of the registered office of the Corporation in the
Commonwealth of Pennsylvania is 1310 Goshen Parkway, West Chester,
Chester County, Pennsylvania 19380.
ARTICLE III
The purpose of the Corporation is to create the maximum continuing rate
of value growth through long-term profit on invested capital and the
growth of that capital.
To accomplish this purpose, the Board of Directors, management and
employees of the Corporation will strive to:
- - Properly select business opportunities versus risk;
- - Develop and maintain strategic direction for all business segments;
- - Develop and maintain superior management and organizational
structures;
- - Encourage employee involvement in the business process;
<PAGE>36
- - Provide all employees the opportunity of a value growth environment of
good employment, training, advancement and recognition of their
achievements;
- - Create market understanding of the intrinsic values so created;
- - Conduct its business legally and ethically within the free enterprise
system as a responsible corporate citizen.
In carrying out this purpose, the Corporation is authorized to engage in
any lawful act or activity for which corporations may be organized under
the Pennsylvania Business Corporation Law of 1988.
ARTICLE IV
The total number of shares of all classes of stock which this
Corporation shall have authority to issue is 31,000,000 shares to be
divided into two classes consisting of 30,000,000 common shares, par
value $1.00 per share (hereinafter designated "Common Shares") and
1,000,000 preferred shares, par value $1.00 per share (hereinafter
designated "Preferred Shares"). The Common Shares shall have one vote
for each share. The Preferred Shares shall have such full or limited or
no voting rights as shall be stated and expressed in the resolution or
resolutions of the Board of Directors of this Corporation providing for
the issuance of such shares pursuant to authority vested in it by the
provisions of its Articles of Incorporation.
The Preferred Shares may be issued in one or more classes or series
within a class and each such class or series may have such full or
limited or no voting rights, and such designations, preferences, and
relative participating, optional, or other special rights and
qualifications, limitations, or restrictions thereof as shall be stated
and expressed in a resolution or resolutions providing for the issuance
of such Preferred Shares adopted by the Board of Directors pursuant to
the authority hereby granted.
The Preferred Shares may have voting rights, designations, preferences,
and relative participating, optional, or other special rights and
qualifications, limitations or restrictions which negate or supersede
the provisions of Article VIII hereof (so long as the resolution or
resolutions which provided for the issuance of the same are approved by
the unanimous vote of the Board of Directors).
ARTICLE V
Except as otherwise provided in Section 3 of Article IX, shareholders
shall not have cumulative voting rights in the election of directors.
ARTICLE VI
The provisions of Section 2538(a) and of Subchapters E, F, G and H of
Chapter 25 of the Pennsylvania Business Corporation Law of 1988 (15 Pa.
C.S.), as amended, and any corresponding provisions of succeeding law,
shall not be applicable to the Corporation.
<PAGE>37
ARTICLE VII
1. For purposes of these Articles, the following defined terms shall
have the meanings set forth below. All references in these Articles to
statutes, rules or regulations shall include a reference to said
statutes, rules or regulations as currently in effect or hereafter
amended.
(a) The terms "Affiliate" or "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 promulgated and
issued under the Securities Exchange Act of 1934.
(b) The terms "Beneficial Owner" and correlative terms shall
have the meanings ascribed to them in Rule 13d-3 and related
interpretive releases promulgated and issued under the Securities
Exchange Act of 1934. Without limitation, a Person shall be a
"Beneficial Owner" of any Voting Stock:
(1) which such Person or any of its Affiliates or
Associates Beneficially Owns, directly or indirectly; or
(2) which such Person or any of its Affiliates or
Associates has (a) the right to acquire (whether such right is
exercisable immediately or only after the passage of time), pursuant to
any agreement, arrangement or understanding or upon the exercise of
conversion rights, exchange rights, warrants or options, or otherwise,
or (b) the right to vote pursuant to any agreement, arrangement or
understanding; or
(3) which are Beneficially Owned, directly or
indirectly, by any other Person with which such Person or any of its
Affiliates or Associates has any agreement, arrangement or understanding
for the purpose of acquiring, holding, voting or disposing of any shares
of Voting Stock.
(c) The terms "Board of Directors" and the "Board" mean the
group of individuals elected by the shareholders as directors of the
Corporation or appointed by the directors then on the board to fill a
vacancy on the Board.
(d) The term "Common Shares" shall mean the common shares of
the Corporation as authorized pursuant to Article IV.
(e) The term "Disinterested Director" means any member of the
Board of Directors who is not an Affiliate of any 5%, 20% or 40%
Shareholder, and was a member of the Board prior to the time that any
5%, 20% or 40% Shareholder achieved such status, and any successor of a
Disinterested Director who is not an Affiliate of any 5%, 20% or 40%
Shareholder and is recommended to succeed a Disinterested Director by a
majority of Disinterested Directors then on the Board.
(f) The term "Fair Market Value" means: (1) in the case of
shares, the Market Price, and (2) in the case of property other than
cash or shares, the fair market value of such property on the date in
question as determined by the Board in good faith.
<PAGE>38
(g) The term "5% Shareholder" shall mean any Person (other
than the Corporation or any Subsidiary) who or which:
(1) is the Beneficial Owner, directly or indirectly, of
5% or more of the Voting Power of the outstanding Voting Shares; or
(2) is an Affiliate of the Corporation and at any time
within the two-year period immediately prior to the date in question was
the Beneficial Owner, directly or indirectly, of 5% or more of the
Voting Power of the then outstanding Voting Shares; or
(3) is an assignee of or has otherwise succeeded to any
Voting Shares which were, at any time within the two-year period
immediately prior to the date in question, Beneficially Owned by any 5%
Shareholder, if such assignment or succession shall have occurred in the
course of a transaction or series of transactions not involving a public
offering within the meaning of the Securities Act of 1933; provided,
however, any Person who has Beneficially Owned all his, her or its
Voting Shares for two years or more shall not be deemed a 5%
Shareholder.
(h) The term "40% Shareholder" shall mean any Person (other
than the Corporation or any Subsidiary) who or which:
(1) is the Beneficial Owner, directly or indirectly, of
40% or more of the Voting Power of the outstanding Voting Shares; or
(2) is an Affiliate of the Corporation and at any time
within the two-year period immediately prior to the date in question was
the Beneficial Owner, directly or indirectly, of 40% or more of the
Voting Power of the then outstanding Voting Shares; or
(3) is an assignee of or has otherwise succeeded to any
Voting Shares which were at any time within the two-year period
immediately prior to the date in question Beneficially Owned by any 40%
Shareholder, if such assignment or succession shall have occurred in the
course of a transaction or series of transactions not involving a public
offering within the meaning of the Securities Act of 1933.
(i) The term "Major Transaction" shall mean (1) any merger or
consolidation of this Corporation or a Subsidiary with or into a 20%
Shareholder, (2) any sale, lease, exchange, transfer or other
disposition, including without limitation, a mortgage or any other
security device, of all or any Substantial Part of the assets of this
Corporation (including without limitation any securities of a
Subsidiary) or of a Subsidiary, to a 20% Shareholder, (3) any merger or
consolidation of a 20% Shareholder with or into this Corporation or a
Subsidiary, (4) any sale, lease, exchange, transfer or other disposition
of all or any Substantial Part of the assets of a 20% Shareholder to the
Corporation or a Subsidiary, (5) the issuance of any securities of this
Corporation or a Subsidiary to a 20% Shareholder, (6) the acquisition by
this Corporation or a Subsidiary of any securities of a 20% Shareholder,
(7) any reclassification of Voting Shares of this Corporation, or any
recapitalization involving Voting Shares of this Corporation, proposed
by a 20% Shareholder within five years after such 20% Shareholder became
a 20% Shareholder, (8) any loan or other extension of credit by the
<PAGE>39
Corporation or a Subsidiary to a 20% Shareholder or any guarantees by
the Corporation or a Subsidiary of any loan or other extension of credit
by any Person to a 20% Shareholder, and (9) any agreement, contract or
other arrangement providing for any of the transactions described in
this definition of Major Transaction.
(j) The term "Market Price" means: the last closing sale
price immediately preceding the time in question of one of the shares in
question on the Composite Tape for New York Stock Exchange-Listed
Stocks, or, if such shares are not quoted on the Composite Tape, on the
New York Stock Exchange, or, if such shares are not listed on such
Exchange, on the principal United States securities exchange registered
under the Securities Exchange Act of 1934, on which such shares are
listed, or, if such shares are not listed on any such exchange, the last
closing bid quotation with respect to one of such shares immediately
<PAGE 38>
preceding the time in question of the National Association of Securities
Dealer, Inc. Automated Quotation System or any system then in use (or
any other system of reporting or ascertaining quotations then
available), or if such shares are not so quoted, the fair market value
at the time in question of one of such shares as determined by the Board
in good faith.
(k) The term "other consideration to be received" shall, for
the purposes of subparagraph 1(b) of Article VIII, include, without
limitation, Voting Shares of the Corporation retained by its existing
public shareholders in the event of a Major Transaction which is a
merger or consolidation in which the Corporation is the surviving
corporation.
(l) The term "Person" shall mean and include any individual,
corporation, partnership or other person or entity and each member of
any "Person" as such term is defined in Section 13(d)(3) of the
Securities Exchange Act of 1934.
(m) "Subsidiary" means any corporation of which a majority of
any class of equity security is owned, directly or indirectly, by the
Corporation; provided, however, that for the purposes of the
definitions of 5%, 20% or 40% Shareholder, the term "Subsidiary" shall
mean only a corporation of which a majority of the Voting Power of its
capital stock entitled to vote generally in the election of directors is
owned, directly or indirectly, by the Corporation.
(n) The term "20% Shareholder" shall mean any Person (other
then the Corporation or any Subsidiary) who or which is the Beneficial
Owner, directly or indirectly, of 20% or more of the Voting Power of the
outstanding Voting Shares.
(o) The term "Substantial Part" shall mean more than ten
percent of the total assets of the Person or entity in question, as of
the end of its most recent fiscal year ending prior to the time the
determination is being made.
(p) The term "Voting Power" shall mean, with respect to a
share of capital stock, the number of votes that such share is entitled
<PAGE>40
to cast (disregarding the effect of cumulative voting, if applicable) at
the time in question and, in the case of a convertible security,
computing such voting power by reference to the greatest number of votes
such security is entitled to in the converted or unconverted status.
(q) The term "Voting Shares" shall mean all Common Shares and
any other shares entitled to vote for the election of Directors of the
Corporation.
2. For the purposes of determining whether a person is a 5%, 20% or 40%
Shareholder pursuant to these Articles, the number of Voting Shares
deemed to be outstanding shall include shares deemed owned through
application of subparagraph 1(b) of this Article VII but shall not
include any other Voting Shares which may be issuable pursuant to any
agreement, arrangement or understanding, or upon exercise of conversion
rights, warrants or options, or otherwise.
3. A majority of the Disinterested Directors of the Corporation shall
have the power and duty to determine for the purposes of these Articles,
on the basis of information known to them after reasonable inquiry,
(a) whether a Person is a 5%, 20% or 40% Shareholder, (b) the number of
Voting Shares Beneficially Owned by any Person, (c) whether a Person is
an Affiliate or an Associate of another Person, and (d) whether a
transaction or a series of transactions constitutes a Major Transaction
or one of the transactions specified in Section 2 of Article IX hereof.
The good faith determination of a majority of the Disinterested
Directors shall be conclusive and binding for all purposes of these
Articles.
4. Nothing contained in these Articles shall be construed to relieve
any 5%, 20% or 40% Shareholder from any fiduciary obligation imposed by
law.
5. It shall be the duty of any 5%, 20% or 40% Shareholder:
(a) to give or cause to be given written notice to the
Corporation, immediately upon becoming a 5%, 20% or 40% Shareholder, of
such Person's status as a 5%, 20% or 40% Shareholder and of such other
information as the Corporation may reasonably require with respect to
identifying all owners and amount of ownership of the outstanding Voting
Shares of which such 5%, 20% or 40% Shareholder is a Beneficial Owner,
and
(b) to notify the Corporation promptly in writing of any
change in the information provided in subparagraph (a) of this
Section 5; provided, however, that the failure of a 5%, 20% or 40%
Shareholder to comply with the provisions of this Section 5 shall not in
any way be construed to prevent the Corporation from enforcing other
provisions of these Articles.
ARTICLE VIII
1. Subject to the provisions of any series of Preferred Shares which
may at the time be outstanding, any Major Transaction shall require the
affirmative vote of the holders of not less than 80% of the Voting Power
<PAGE>41
of the outstanding Voting Shares of the Corporation, which shall include
the affirmative vote of at least 50% of the Voting Power of the
outstanding Voting Shares held by shareholders other than the 20%
Shareholder involved in such Major Transaction, provided however that
such voting requirement shall not be applicable if:
(a) The Major Transaction was approved by the Board either
(i) prior to the 20% Shareholder involved in the Major Transaction
having become a 20% Shareholder, or (ii) after such 20% Shareholder
became such but only if the 20% Shareholder has sought and obtained the
unanimous approval by the Board of such 20% Shareholder's acquisition of
20% or more of the outstanding Voting Shares prior to such acquisition
being consummated; or
(b) The Major Transaction involves solely the Corporation and
a Subsidiary none of whose stock is Beneficially Owned by a 20%
Shareholder (other than Beneficial Ownership arising solely because of
control of the Corporation); provided that each shareholder of the
Corporation receives the same type of consideration in such transaction
in proportion to his shareholdings; or
(c) Prior to becoming a 20% Shareholder, such 20% Shareholder
made a tender offer for Voting Shares which: (i) conformed in all
respects to federal laws and regulations governing such a transaction
whether or not the Corporation or such shares were then regulated by or
registered under said laws, (ii) committed such 20% Shareholder to take
all shares tendered if it took any shares, and (iii) resulted in such
20% Shareholder acquiring at least 75% of the Voting Power of the
outstanding Voting Shares held by Persons other than such 20%
Shareholder.
ARTICLE IX
1. Any purchase by the Corporation of Voting Shares from a 5%
Shareholder, other than pursuant to an offer to the holders of all of
the outstanding Voting Shares of the same class as those so purchased,
at a per share price in excess of the Market Price at the time of such
purchase of the shares so purchased, shall require the affirmative vote
of the holders of that amount of the Voting Power of the Voting Shares
equal to the sum of (i) the Voting Power of the Voting Shares of which
the 5% Shareholder is the Beneficial Owner and (ii) a majority of the
Voting Power of the remaining outstanding Voting Shares, voting together
as a single class.
2. In addition to any affirmative vote required by law or these
Articles of Incorporation:
(a) any merger or consolidation of the Corporation or any
Subsidiary with (1) any 5% Shareholder or (2) any other corporation
(whether or not itself a 5% Shareholder) which is, or after such merger
or consolidation would be, an Affiliate of a 5% Shareholder; or
(b) any sale, lease, exchange, mortgage, pledge, transfer or
other disposition (in one transaction or a series of transactions) to or
with any 5% Shareholder or any Affiliate of any 5% Shareholder of any
<PAGE>42
assets of the Corporation or any Subsidiary having an aggregate Fair
Market Value of $2,000,000 or more; or
(c) the issuance or transfer by the Corporation or any
Subsidiary (in one transaction or a series of transactions) of any
securities of the Corporation or any Subsidiary having an aggregate Fair
Market Value of $2,000,000 or more to any 5% Shareholder or any
Affiliate of any 5% Shareholder in exchange for cash, securities or
other property (or a combination thereof); or
(d) the adoption of any plan or proposal for the liquidation
or dissolution of the Corporation proposed by or on behalf of a 5%
Shareholder or any Affiliate of any 5% Shareholder; or
(e) any reclassification of securities (including any reverse
stock split), or recapitalization of the Corporation, or any merger or
consolidation of the Corporation with any of its Subsidiaries or any
other transaction (whether or not with or into or otherwise involving a
5% Shareholder) which has the effect, directly or indirectly, of
<PAGE 41>
increasing the proportionate share of the outstanding shares of any
class of equity or convertible securities of the Corporation or any
Subsidiary which is directly or indirectly owned by any 5% Shareholder
or any Affiliate of any 5% Shareholder;
shall require either (a) the approval of a majority of the Disinterested
Directors or (b) the affirmative vote of the holders of that amount of
Voting Power of the Voting Shares equal to the sum of (1) the Voting
Power of the Voting Shares of which the 5% Shareholder is the Beneficial
Owner and (2) a majority of the Voting Power of the remaining
outstanding Voting Shares, voting together as a single class; provided,
however, that no such vote shall be required for (i) the purchase by the
Corporation of Voting Shares from a 5% Shareholder unless such vote is
required by Section 1 of this Article IX, or (ii) any transaction with a
5% Shareholder who is also a 20% Shareholder as defined in Article VII
and to which the provisions of Article VIII apply and are complied with.
3. At any election of directors of the Corporation on or after the date
on which any Person becomes a 40% Shareholder, and until such time as
there is no longer any 40% Shareholder, there shall be cumulative voting
for the election of directors so that any holder of shares of Voting
Stock entitled to vote in such election shall be entitled to as many
votes as shall equal the number of directors to be elected multiplied by
the number of votes to which such shareholder's shares would be entitled
except for the provisions of this Section 3, and such shareholder may
cast all of such votes for a single director, or distribute such votes
among as many candidates as such shareholder sees fit. In any such
election of directors, one or more candidates for the Board may be
nominated by a majority of the Disinterested Directors or by any Person
who is the Beneficial Owner of Voting Shares having a Market Price of
$250,000 or more. With respect to any candidates nominated by a
majority of the Disinterested Directors or by any Person who is the
Beneficial Owner of Voting Shares having a Market Price of $250,000 or
more, there shall be included in any proxy statement or other
communication with respect to such election to be sent to holders of
Voting Shares by the Corporation during the period in which there is a
<PAGE>43
40% Shareholder, at the expense of the Corporation, descriptions and
other statements of or with respect to such candidates submitted by them
or on their behalf, which shall receive equal space, coverage and
treatment as is received by candidates nominated by the Board or
management of the Corporation provided that such information is received
on a timely basis and complies with applicable federal and state
securities laws.
ARTICLE X
1. The number of Directors of the Corporation shall be specified in the
Bylaws, and such number may from time to time be increased or decreased
in such manner as may be prescribed in the Bylaws, provided the number
of Directors of the Corporation shall not be less than three (3) so long
as the Corporation has only one shareholder and not less than seven (7)
otherwise.
2. On or before the date on which the Corporation first has more than
one shareholder, Directors shall be classified with respect to the time
for which they shall severally hold office by dividing them into three
<PAGE 42>
classes, as nearly equal in number as possible. One class shall serve
for a term of office to expire at the 1995 Annual Meeting of
Shareholders. A second class shall serve for a term of office to expire
at the 1996 Annual Meeting of Shareholders. A third class shall serve
for a term of office to expire at the 1997 Annual Meeting of
Shareholders. At each Annual Meeting of Shareholders beginning with the
1995 Annual Meeting, the class of Directors then being elected shall be
elected to hold office for a term of office to expire at the third
succeeding Annual Meeting of Shareholders after their election. Each
Director shall hold office for the term for which elected and until his
successor shall have been elected and qualified.
3. Any Director, any class of Directors, or the entire Board of
Directors may be removed from office as a Director at any time (a) for
cause, at a duly called meeting of shareholders, by the affirmative vote
of shareholders owning shares representing at least eighty percent (80%)
of the votes which all shareholders would be entitled to cast at an
Annual Election of Directors or (b) without cause, at a duly called
meeting of shareholders, by the affirmative vote which satisfies the
requirements of Article XII applicable to an amendment, modification, or
repeal of certain of these Articles.
4. Vacancies in the Board of Directors, including vacancies resulting
from an increase in the number of Directors, shall be filled only by a
majority of the Disinterested Directors then in office, though less than
a quorum, or by the sole Disinterested Director. All Directors elected
to fill vacancies shall hold office for a term expiring at the annual
meeting of shareholders at which the term of the class to which they
have been elected expires. No decrease in the number of Directors
constituting the Board of Directors shall shorten the term of any
incumbent Director.
<PAGE>44
ARTICLE XI
Any action by shareholders of the Corporation shall only be taken at a
meeting of shareholders and no action may be taken by written consent of
shareholders entitled to vote upon such action.
ARTICLE XII
The provisions set forth in this Article XII and in Articles III, VII,
VIII, IX, X and XI herein may not be repealed or amended in any respect,
unless such action is approved by the affirmative vote of the holders of
not less than 80% of the outstanding Voting Shares of the Corporation,
subject to the provisions of any class or series of Preferred Shares
which may at the time be outstanding, provided, however, that if there
is a shareholder of the Corporation which is a 20% Shareholder, such 80%
vote must include the affirmative vote of at least 50% of the
outstanding Voting Shares held by shareholders other than the 20%
Shareholder.
ARTICLE XIII
All corporate powers shall be exercised by the Board of Directors except
as otherwise provided by law or these Articles of Incorporation. The
directors shall have the full authority conferred by law upon the
shareholders of the Corporation to make and to alter or amend the
Bylaws, including in circumstances otherwise reserved by statute
exclusively to the shareholders, except that no alteration or amendment
to the Bylaws or replacement thereof shall be made except upon the
majority vote of Directors, including the affirmative vote of at least
one director from each class specified in Article X.
ARTICLE XIV
To the fullest extent permitted by law, a director of this Corporation
shall not be personally liable, as such, for monetary damages for any
action taken or for any failure to take any action.
IN WITNESS WHEREOF, the Corporation has caused these Amended and
Restated Articles of Incorporation to be executed and attested to this
_____ day of _______, 1994.
VWR NEW CORP.
By:___________________________
ATTEST:
____________________________
Secretary
<PAGE>45 Exhibit A
Attachment 2
AMENDED AND RESTATED BYLAWS
OF
VWR CORPORATION
(a Pennsylvania corporation)
ARTICLE I
CAPITAL SHARES
1.1 Share Certificates
Share certificates of the Corporation shall be in such form as the Board
of Directors may from time to time prescribe. Every share certificate
shall be signed by officers designated by the Board of Directors and
sealed with the corporate seal. All certificates shall be countersigned
by a transfer agent and a registrar of the Corporation. Any and all
signatures on any such certificate and the corporate seal upon any such
certificate may be 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 he were such officer, transfer
agent, or registrar at the date of issue.
1.2 Transfer of Shares
The shares of the Corporation shall be transferable on its books, or
other appropriate records, kept for such purpose by the holder thereof
in person, or by his duly authorized attorney, upon surrender and
cancellation of his certificates, properly endorsed, accompanied by
authority to transfer. Upon surrender, as above provided, of a share
certificate, a new share certificate for such aggregate number of shares
as equals the aggregate number of shares represented by the surrendered
share certificate shall be issued to the parties entitled thereto.
1.3 Holders of Shares of Record
The Corporation shall be entitled to treat the holder of record of any
share or shares of the Corporation as the holder in fact thereof and
shall not be bound to recognize any claim to, or interest in, such
shares on the part of any other person, whether or not the Corporation
shall have expressed or given other notice thereof.
1.4 Rules and Regulations Concerning the Issue, Transfer, and
Registration of Share Certificates
The Board of Directors of the Corporation shall have powers and
authority to make all such rules and regulations as the Board may deem
proper or expedient concerning the issue, transfer and registration of
share certificates for shares of the Corporation. The Board of
Directors shall have powers and authority to appoint from time to time
one (1), or more than one, transfer agent and one (1), or more than one,
registrar of shares of the Corporation to be properly countersigned,
and/or otherwise properly authenticated, by such transfer agent or
registrar.
<PAGE>46
ARTICLE II
MEETINGS OF SHAREHOLDERS
2.1 Place of Meetings of Shareholders
The annual meetings of shareholders of the Corporation shall be held at
such place as the Board of Directors may from time to time designate.
The time and place of the meeting shall be stated in the Notice to
Shareholders.
2.2 Annual Meetings of Shareholders - Time - Business
The annual meeting of the shareholders of the Corporation for the
election of directors and for the transaction of any such other business
as properly may be submitted to such annual meeting shall be held at the
hour and on the date designated by the Board of Directors or the
Executive Committee of the Board of Directors; such date to be within
180 days of the end of the fiscal year.
Any and all business pertaining to the affairs of the Corporation may be
transacted at any such annual meeting of its shareholders, or at any
adjournment thereof, except only to the extent otherwise expressly
prescribed by the laws of the Commonwealth of Pennsylvania.
2.3 Special Meetings of Shareholders
Special meetings of the shareholders of the Corporation may be called at
any time by the Board of Directors.
2.4 Quorum at Shareholders' Meetings
The holders of record of a majority of the issued and outstanding shares
of the Corporation present in person or represented by proxy at the
shareholders meeting and entitled to vote thereat shall constitute a
quorum for the transaction of business at any such meeting, except as
may otherwise be provided by law; but if there be less than a quorum
present at any such meeting, the holders of a majority of the shares so
present or represented at such meeting may adjourn the meeting from time
to time.
2.5 Notice of Annual or Special Meetings of Shareholders
Either the Secretary, or an Assistant Secretary, of the Corporation
shall give written notice of the time and place of any annual or special
meeting of the shareholders of the Corporation to all shareholders
entitled to vote at such meeting, which notice shall be mailed to each
shareholder at his address of record at least ten (10) days prior to the
date on which the meeting is to be held. Notice of any special meeting
shall state in general terms the purpose for which the meeting is to be
held.
2.6 Voting List of Shareholders and Fixing of Record Date for Voting
and for Other Purposes
The Secretary of the Corporation shall prepare and make, at least ten
(10) days before every meeting of shareholders, a complete list of the
<PAGE>47
shareholders entitled to vote at such meeting arranged in alphabetical
order and showing the address of each shareholder and the number of
shares registered in the name of each shareholder. Such list shall be
open, for said period of ten (10) days at the office of the Corporation,
to the examination of any shareholder for any purpose germane to the
meeting and shall be produced and kept at the time and place of such
meeting during the whole time thereof, and subject to the inspection of
any shareholder who may be present. The share ledger shall be the only
evidence as to who are shareholders entitled to examine such list or the
books of the Corporation, or to vote in person or by proxy at such
meeting.
The Board of Directors shall fix a record date for the determination of
those entitled to notice of, and to vote at, any shareholders' meeting.
The Board of Directors is authorized to fix a record date for
determination of the shareholders entitled to receive payment of any
dividend, or any allotment of rights, or to exercise any such rights in
respect of any change, conversion, or exchange of capital shares, or the
obtaining of the consent of shareholders for any purpose. Only such
shareholders as shall be shareholders of record on a date so fixed shall
be entitled to notice of, and to vote at, such shareholders' meeting, or
to receive payment of any such dividend, or to receive such allotment of
rights, or to exercise such rights, or to give such consent,
notwithstanding any transfer of any shares on the books of the
Corporation after any such record date fixed as aforesaid.
2.7 Officers of Meetings of Shareholders
The officer designated by the Board of Directors as Chief Executive
Officer (or in his absence, the officer designated by the Board of
Directors as Chief Operating Officer) may call any meeting of
shareholders to order and shall be the Chairman thereof. If the
Chairman of the Board of Directors and the President are absent from any
such meeting, then the Vice Chairman of the Board of Directors shall be
the Chairman thereof and shall preside at such meeting. The Secretary
of the Corporation, if present at any meeting of its shareholders, shall
act as the Secretary of such meeting. If the Secretary is absent from
any such meeting, the Chairman of such meeting may appoint a Secretary
for the meeting.
2.8 Proper Business for Shareholders' Meetings
At any annual or special meeting of the shareholders of the Corporation,
only business or other proposals properly brought before the meeting may
be transacted. To be properly brought before an annual or special
meeting, business or other proposals must be (i) specified in the notice
of the meeting (or any supplement thereto) given by or at the direction
of the Board of Directors, (ii) otherwise properly brought before the
meeting by a shareholder. For business to be properly brought before an
annual meeting by a shareholder, written notice thereof must have been
received by the Secretary of the Corporation from such shareholder not
less than 120 days prior to the date corresponding to the date on which
the Corporation mailed its proxy statement in connection with its
previous year's annual meeting of shareholders. For business to be
properly brought before a special meeting by a shareholder, or in the
event the date of the annual meeting has been changed by more than 30
<PAGE>48
calendar days from the date contemplated at the time of the previous
year's proxy statement, notice by the shareholder to be timely must be
received by the Secretary of the Corporation not later than the close of
business on the 10th day following the earlier of the day on which
notice of the date of the scheduled meeting was mailed or the day on
which public disclosure of such date was made.
Any such notice by a shareholder shall set forth as to each matter the
shareholder proposes to bring before the meeting (i) a brief description
of the business desired to be brought before the meeting, the reasons
for conducting such business at the meeting, and the language of the
proposal, (ii) the name and address of the shareholder proposing such
business, (iii) a representation that the shareholder is a holder of
record of shares of the Corporation entitled to vote at such meeting,
and (iv) any material interest of the shareholder in such business. Any
such notice to the Corporation shall also comply with all applicable
provisions of Regulation 14A under the Securities Exchange Act of 1934.
No business shall be conducted at any meeting of shareholders except in
accordance with this paragraph, and the Chairman of any meeting of
shareholders and the Board of Directors may refuse to permit any
business to be brought before the meeting without compliance with the
foregoing procedures.
ARTICLE III
DIRECTORS
3.1 Number of Directors
The authorized number of directors of the Corporation shall be not less
than seven nor more than fifteen (15). The Board of Directors, by
resolution, shall fix the number of directors to constitute the whole
Board of Directors of the Corporation, within the above limits, which
number shall prevail until a resolution is adopted by the Board of
Directors prescribing a different number of directors to be the
authorized number of directors of the Corporation.
3.2 Qualifications of Directors
No director of the Corporation need be a shareholder therein. Each
director of the Corporation shall be eligible to serve as follows:
3.2.1 Any director who has served as President or Chairman of the Board
of Directors of the Corporation shall be eligible to serve as director
until the regular meeting of the Board of Directors immediately
following his 75th birthday.
3.2.2 Any director who is, at the time of either of the events
mentioned herein, a full-time employee of the Corporation or one of its
subsidiaries shall not be eligible to serve after his 65th birthday or
his retirement, whichever event is earlier, except as provided in (.1)
of this Section 3.2.
3.2.3 Any director other than one of the classes referred to in (.1)
and (.2) of this Section 3.2 shall be eligible to serve until the
regular meeting of the Board of Directors immediately following his 75th
birthday.
<PAGE>49
3.3 Election of Directors - Terms of Office
3.3.1 The shareholders shall, at their annual meeting held each year,
elect the class of directors of the Corporation as set forth in the
Corporation's Articles of Incorporation.
3.3.2 Contemporaneously with a director's election or appointment to
the Board, the director shall execute and deliver to the Secretary of
the Corporation a letter of resignation which shall provide that it
shall automatically become effective only (1) on or after the first
meeting of the Board of Directors following such director's 72nd
birthday and (2) upon recommendation by the Nominating Committee of the
Board of Directors to the entire Board, and the approval of such
recommendation by a majority of the Disinterested Directors (as such
term is defined in the Corporation's Articles of Incorporation) that
such director is no longer capable of serving as a member of the Board
of Directors because of the director's health, availability to serve, or
such other factors deemed relevant by the Nominating Committee to a
determination of such director's qualifications to be director of the
Corporation.
3.4 Failure to Elect Directors at Annual Meeting of the Shareholders
If the class of directors of the Corporation up for election at the
annual meeting shall not be elected as herein provided at the annual
meeting in any year of the shareholders of the Corporation, or at any
adjournment of such annual meeting, then, in such event, this
Corporation shall not for that reason be dissolved, but its directors at
the time shall be deemed lawful directors of the Corporation for all
purposes and shall continue to hold office as directors until their
successors, respectively, are duly elected and qualified.
3.5 Authority of the Board of Directors
The business of the Corporation shall be managed by its Board of
Directors, and such Board shall have and exercise full powers and
authority in the management, control, regulation, and conduct of the
property, interests, business transactions, and affairs of the
Corporation; provided, however, that the Executive Committee of the
Board of Directors of the Corporation may exercise the powers and
authority of such Board pursuant, but subject to (a) the limitations in
Section 1731 of the Pennsylvania Business Corporation Law of 1988 and
(b) such restrictions imposed by the Board of Directors pursuant to
Section 4.1 hereof. The Board of Directors, at the first meeting of the
Board held after the Annual Meeting of Shareholders, shall elect a
Chairman, and may elect a Vice Chairman, of the Board of Directors.
3.6 Action by the Board of Directors or Any of Its Committees without a
Meeting or by Telephone
Any action required or permitted to be taken at any meeting of the Board
of Directors, or of any committee of said Board, may be taken without a
meeting if a written consent thereto is signed by all members of the
Board or of such committee, as the case may be, and such written consent
is filed with the minutes of said Board or of said committee. Members
of the Board of Directors, or of any committee of said Board, may
<PAGE>50
participate in a meeting of such Board or committee by means of
conference telephone or similar communications equipment by means of
which all persons participating in the meeting can hear each other, and
such participation in a meeting shall constitute presence in person at
such meeting.
3.7 Regular Meetings of the Board of Directors
Meetings of the Board of Directors of the Corporation may be held at its
corporate offices or at such other place or places as may be authorized
by such Board. Such Board shall also fix the time or times of such
regular meetings. No notice of any regularly scheduled meeting need be
given. The Chairman of the Board or the President may change the time
and place of any regular meeting by giving reasonable notice thereof, in
writing or by telephone, not later than twenty-four (24) hours before
the time originally fixed for such meeting. The Chairman of the Board
shall act as Chairman of the meetings; but in his absence, the President
shall act as Chairman. The Secretary of the Corporation shall act as
Secretary of the meetings; but in his absence, the Chairman of the
meeting shall appoint a Secretary of the meeting.
3.8 Special Meetings of the Board of Directors
Meetings of the Board of Directors of the Corporation may be held from
time to time on written call thereof by the Chairman of the Board of
Directors or the President made at any time at his own instance and
discretion or on call thereof made by such number of its directors as
equals a majority of this whole Board of Directors at the time. Any
special meeting of the Board of Directors may be held at such time or at
such place designated in said call. The time, place, and purpose of any
special meeting of the Board of Directors to be held pursuant to call
and notice shall be stated both in the call and the notice thereof, and
no business other than that stated in such notice shall be transacted,
or acted upon, at such special meeting. Reasonable notice of a special
meeting shall be given, in writing or by telephone, by the person or
persons calling the meeting not later than seventy-two (72) hours prior
to the time set for the meeting; provided that the minimum notice period
shall be twenty-four (24) hours in the event of a tender or exchange
offer to purchase securities of the Corporation. Any special meeting of
the Board of Directors may be held at any time without previous call, or
previous notice thereof, if all directors of the Corporation either
attend such meeting, or consent in writing thereto, or if each director
not present at such meeting waives notice thereof. Any and all business
and matters pertaining to the affairs of the Corporation may be
considered, transacted, and acted on at any special meeting so held
without previous call or previous notice.
3.9 Quorum of Directors
A majority of the members of the Board of Directors as constituted for
the time being shall constitute a quorum for the transaction of
business, but less than a quorum may adjourn any meeting from time to
time until a quorum is present and without further notice being given.
3.10 Waiver of Notice of Meetings of the Board of Directors
<PAGE>51
Any director of the Corporation may waive in writing, at any time, any
notice of any meeting of the Board of Directors, or of any committee of
said Board, as may be provided by the laws of the Commonwealth of
Pennsylvania or by the Bylaws of the Corporation; and a written waiver
thereof signed by any director entitled to such notice, whether before
or after the time stated therein, shall be deemed equivalent to such
notice legally given to such director.
3.11 Fees to the Directors for Attending Meetings of the Board of
Directors
The directors of the Corporation shall be entitled, as directors, to
receive an annual fee for service as directors and an attendance fee for
meetings of the Board of Directors and for meetings of committees of the
Board of Directors. Said fees shall be payable in the amounts and under
provisions prescribed from time to time by resolution of the Board of
Directors, and the Corporation is hereby authorized to pay such fees to
each of its directors; provided, however, that no director of the
Corporation shall be entitled to said fees if at the time he is
otherwise employed by the Corporation at a regular monthly or annual
salary as a full-time employee.
3.12 Director Nominations
Nominations of candidates for election as directors at any meeting of
shareholders may be made (i) by a majority of the Board of Directors,
(ii) by a majority of a duly authorized committee of the Board, (iii) if
the shareholders are, at the time, entitled to cumulate their votes in
the election of directors in accordance with Article IX of the Articles
of Incorporation of the Corporation by a majority of the "Disinterested
Directors," or (iv) by any "Person" who is the "Beneficial Owner" of
"Voting Shares" having a "Market Value" of $250,000 or more (as said
terms are defined in the Articles of Incorporation). Only persons
nominated in accordance with the procedures set forth in this Section
3.12 shall be eligible for election as directors at a shareholders'
meeting.
Nominations, other than those made by the Board of Directors, the
Disinterested Directors, or a duly authorized committee of the Board,
shall be made pursuant to timely notice in writing to the Secretary of
the Corporation as set forth in this Section 3.12. To be timely, a
shareholder's notice shall be received by the Secretary of the
Corporation not less than 120 days prior to the date corresponding to
the date on which the Corporation mailed its proxy statement in
connection with the previous year's annual meeting of shareholders;
PROVIDED, HOWEVER, that if the date of the annual meeting has been
changed by more than 30 calendar days from the date contemplated at the
time of the previous year's proxy statement, notice by the shareholder
to be timely must be received by the Secretary of the Corporation not
later than the close of business on the 10th day following the earlier
of the day on which notice of the date of the scheduled meeting was
mailed or the day on which public disclosure of (such date) was made.
Such shareholder's notice shall set forth as to each person whom the
shareholder proposes to nominate for election or re-election as a
director, and as to the shareholder giving the notice (i) the name, age,
business address, and residence address of such person, (ii) the
<PAGE>52
principal occupation or employment of such person, (iii) the class and
number of shares of the Corporation which are beneficially owned by such
person on the date of such shareholder notice, and (iv) any other
information relating to such person that is required to be disclosed in
solicitations of proxies with respect to nominees for election as
directors, pursuant to Regulation 14A under the Securities Exchange Act
of 1934 as amended.
No person shall be elected as a director of the Corporation unless
nominated in accordance with the procedures set forth in this Section
3.12. Ballots bearing the names of all the persons who have been
nominated for election as directors at a shareholders' meeting in
accordance with the procedures set forth in this Section 3.12 shall be
provided for use at the shareholders' meeting.
The Board of Directors may reject any nomination by a shareholder not
timely made in accordance with the requirements of this Section 3.12.
If the Board of Directors, or a designated committee thereof, determines
that the information provided in a shareholder's notice does not satisfy
the informational requirements of this Section in any material respect,
the Secretary of the Corporation shall promptly notify such shareholder
of the deficiency in the notice. The shareholder shall have an
opportunity to cure the deficiency by providing additional information
to the Secretary within such period of time not to exceed five (5) days
from the date such deficiency notice is given to the shareholder as the
Board of Directors or such committee shall reasonably determine. If the
deficiency is not cured within such period, or if the Board of Directors
or such committee reasonably determines that the additional information
provided by the shareholder, together with information previously
provided, does not satisfy the requirements of this Section in any
material respect, then the Board of Directors may reject such
shareholder's nomination. The Secretary of the Corporation shall notify
a shareholder in writing whether his nomination has been made in
accordance with the time and information requirements of this Section.
Notwithstanding the procedure set forth in this paragraph, if neither
the Board of Directors nor such committee makes a determination as to
the validity of any nominations by a shareholder, the presiding officer
of the meeting shall determine and declare at the meeting whether a
nomination was made in accordance with the terms of this Section. If
the presiding officer determines that a nomination was made in
accordance with the terms of this Section, he shall so declare at the
meeting and ballots shall be provided for use at the meeting with
respect to such nominee. If the presiding officer determines that a
nomination was not made in accordance with the terms of this Section, he
shall so declare at the meeting and the defective nominations shall be
disregarded.
3.13 Rights Agreement
Notwithstanding any of the foregoing, any action stated in the Rights
Agreement between this Corporation and the First Jersey National Bank,
dated as of May 20, 1988, as such agreement may be amended from time to
time (the "Rights Agreement") to be taken by the Board of Directors
after a Person has become an Acquiring Person shall require the presence
in office of Continuing Directors and the concurrence of a majority of
<PAGE>53
the Continuing Directors. Capitalized terms in this Section shall have
the meanings indicated in the Rights Agreement.
ARTICLE IV
EXECUTIVE COMMITTEE AND OTHER
COMMITTEES OF THE BOARD OF DIRECTORS
4.1 Executive Committee - Authority
The Board of Directors shall each year, by resolution passed by the
majority of the whole Board of Directors, designate two (2) or more of
its number to constitute an Executive Committee which, to the extent
provided in such resolution, shall have and exercise the powers and
authority of said Board in the management of the business of the
Corporation.
4.2 Other Committees
The Board of Directors may, by resolution passed by a majority of the
whole Board, appoint one (1) or more other committees to consist of one
or more directors. Any such committee shall have such powers as is
given to it by the resolution creating it.
4.3 Appointment of Chairmen of Committees
The Board of Directors shall appoint the Chairman of each committee of
the Board of Directors.
4.4 Quorum
At all meetings of any committee of the Board, a majority of the members
of such committee shall constitute a quorum for the transaction of
business; provided, however, that two (2) directors shall constitute a
quorum for any committee comprised of four (4) members. The act of the
majority of the directors present at any meeting of any committee at
which there is a quorum present shall be the act of such committee,
except as may be otherwise specifically provided by statute or by the
Corporation's Articles of Incorporation.
4.5 Notices
Notice of the time and place of any meeting of any committee of the
Board shall be given in writing or by telephone by the person or persons
calling the meeting not less than twenty-four (24) hours prior to the
time set for the meeting.
ARTICLE V
OFFICERS AND THEIR POWERS AND DUTIES
5.1 Authorized Officers
The officers of the Corporation shall consist of a Chairman, a
President, one (1) or more Vice Presidents (who may be designated as
Vice Presidents, Senior Vice Presidents, or Executive Vice Presidents),
a Secretary, and a Treasurer. The Corporation may have such additional
officers (hereinafter in the Bylaws of the Corporation sometimes
referred to as "additional officers") as its Board of Directors may deem
<PAGE>54
necessary for its business and may appoint from time to time. The Board
of Directors may designate one (1) of the officers as the Chief
Financial Officer of the Corporation.
The Board of Directors at any meeting of the Board may fill a vacancy in
any office.
The officers of the Corporation shall be elected at the first director's
meeting held after the annual election of directors, and they shall
serve until the next annual election of officers, subject to the right
of the Board of Directors to remove any officer at any time.
The Board of Directors, by resolution duly adopted at any meeting
thereof duly held, may authorize and direct that any office of the
Corporation, except the offices of Chairman, President, Treasurer and
Secretary, may be left unfilled for any such period of time as the Board
may fix in such resolution.
5.2 Qualifications of Officers
No officer of the Corporation need be a shareholder therein. No officer
of the Corporation, except the President, need be a director.
5.3 Powers and Duties of Officers
The respective officers of the Corporation, subject, always, to control
by its Board of Directors, shall have such powers and authority and
perform such duties in the management and conduct of its property,
business, and affairs as from time to time may be prescribed with
respect to such officers respectively, by and under any Section of its
Bylaws, by resolution of the Board of Directors or by the Chief
Executive Officer.
The Board of Directors may, by appointment, designate either the
Chairman or the President as the Chief Executive Officer of the
Corporation and either of said officers as the Chief Operating Officer
of the Corporation.
5.4 Powers and Duties of the Chief Executive Officer and the Chief
Operating Officer
The Chief Executive Officer of the Corporation shall have general charge
and supervision of the business of the Corporation and shall see that
all orders and resolutions of the Board of Directors and of the
Executive Committee are carried out. The Chief Executive Officer shall
designate the duties of all officers of the Corporation, which
designations shall be subject to review by the Board of Directors;
provided, however, that the specific duties assigned to the Chief
Executive Officer, the Chief Operating Officer and the Secretary shall
not be changed except by amendment to these Bylaws and/or by resolution
of the Board of Directors, as appropriate.
The Chief Operating Officer of the Corporation shall have general
supervisory authority and responsibility for the day-to-day operations
of the Corporation.
<PAGE>55
In the event of the death of either of the Chief Executive Officer or
the Chief Operating Officer or the permanent disability preventing such
officer from performing his duties, all officers normally reporting to
such deceased or disabled officer shall report to the Executive
Committee. The Chairman of the Board, President, Chairman of the
Executive Committee, or Vice Chairman of the Board shall call a meeting
of the Board to be held within twenty (20) days of the date of such
death or disability for the purpose of electing a new Chief Executive
Officer or Chief Operating Officer, as the case may be.
Either the Chief Executive Officer or the Chief Operating Officer may
sign in the name of the Corporation all instruments required to be
signed by the Corporation in the ordinary course of its business. Each
such officer shall perform such other duties as may be assigned to him
by the Board of Directors or by these Bylaws.
5.5 Compensation to Officers
The Board of Directors shall have the authority (a) to fix the
compensation, whether in the form of salary or otherwise, of all
officers and employees of the Corporation, either specifically or by
formula applicable to particular classes of officers or employees and
(b) to authorize officers of the Corporation to fix the compensation of
subordinate employees. The Board of Directors shall have authority to
appoint a Compensation Committee and may delegate to such committee
authority to review the compensation of all employees of the Corporation
and its subsidiaries. The Compensation Committee may also be authorized
to make recommendations to the Board with respect to compensation of the
Corporate Officers. The Board of Directors may adopt the
recommendations of the Compensation Committee, which recommendations
shall be attached to the original minutes of the meeting of the Board at
which such recommendations are adopted.
ARTICLE VI
INDEMNITY OF DIRECTORS, OFFICERS, AND OTHER PERSONS
6.1 Right to Indemnification
Each person who was or is made a party or is threatened to be made a
party to or is involved (including, without limitation, as a witness) in
any threatened, pending, or completed action, suit, or proceeding,
whether civil, derivative, criminal, administrative, or investigative (a
"proceeding"), by reason of the fact that he or she is or was a director
or officer of the Corporation or, being or having been such a director
or officer, he or she or a person of whom he or she is a legal
representative, is or was serving at the request of the Corporation as a
director, officer, partner, trustee, employee, or agent of another
corporation or of a partnership, joint venture, trust, or other
enterprise, including service with respect to employee benefit plans,
whether the basis of such proceeding is alleged action or inaction in an
official capacity as a director, officer, partner, trustee, employee, or
agent or in any other capacity while serving as a director, officer,
partner, trustee, employee, or agent, shall be indemnified and held
harmless by the Corporation to the fullest extent not prohibited by the
Pennsylvania Business Corporation Law of 1988, public policy, or other
<PAGE>56
applicable law (including binding regulations and orders of, and
undertakings or other commitments with, any governmental entity or
agency) as the same exists or may hereafter be amended (but, in the case
of any such amendment, only to the extent that such amendment permits
the Corporation to provide broader indemnification rights than said law
permitted the Corporation to provide prior to such amendment), against
all expense, liability, and loss (including attorneys' fees, judgments,
fines, ERISA excise taxes, or penalties and amounts paid or to be paid
in settlement) actually and reasonably incurred or suffered by such
person in connection therewith. The right to indemnification granted in
this Section 6.1 shall be a contract right and shall include the right
to be paid by the Corporation the expenses incurred in defending any
proceeding in advance of its final disposition; provided, however, that
the payment of such expenses in advance of the final disposition of a
proceeding shall be made only upon delivery to the Corporation of an
undertaking, by or on behalf of such director or officer, to repay all
amounts so advanced if it shall ultimately be determined (including the
final resolution of any suit brought pursuant to Section 6.2) that such
director or officer is not entitled to be indemnified under this Section
6.1 or otherwise. The indemnification granted in this Section 6.1 shall
continue as to a person who has ceased to be a director, officer,
partner, trustee, employee, or agent, and shall inure to the benefit of
his or her heirs, executors, and administrators; provided, however, that
except as provided in Section 6.2 of this Article with respect to
proceedings seeking to enforce rights to indemnification, the
Corporation shall indemnify any such person seeking indemnification in
connection with a proceeding (or part thereof) initiated by such person
only if such proceeding (or part thereof) was authorized by the Board of
Directors of the Corporation.
6.2 Right of Claimant to Bring Suit
If a claim under Section 6.1 of this Article is not paid in full by the
Corporation within sixty (60) days after a written claim has been
received by the Corporation, except in the case of a claim for expenses
incurred in defending a proceeding in advance of its final disposition,
in which case the applicable period shall be twenty (20) days, the
claimant may at any time thereafter bring an action against the
Corporation to recover the unpaid amount of the claim and, to the extent
successful in whole or in part, the claimant shall be entitled to be
paid also the expense of prosecuting such claim. The claimant shall be
presumed to be entitled to indemnification under this Article upon
submission of a written claim (and, in an action brought to enforce a
claim for expenses incurred in defending any proceeding in advance of
its final disposition, upon tender of any required undertaking) and
thereafter the Corporation shall have the burden of proof to overcome
the presumption that the claimant is so entitled. Neither the failure
of the Corporation (including its Board of Directors, independent legal
counsel, or its shareholders) to have made a determination prior to the
commencement of such action that indemnification of the claimant is
proper in the circumstances nor an actual determination by the
Corporation (including its Board of Directors, independent legal
counsel, or its shareholders) that the claimant is not entitled to
indemnification shall be a defense to the action or create a presumption
that the claimant is not so entitled. If an action is brought pursuant
to this Section, a final non-appealable order in such action shall
<PAGE>57
constitute the ultimate determination of the claimant's right to
indemnification.
6.3 Non-exclusivity of Rights
The right to indemnification and the payment of expenses incurred in
defending a proceeding in advance of its final disposition granted in
this Article shall not be exclusive of any other right which any person
may have or hereafter acquire under any statute, provision of the
Articles of Incorporation, or these Bylaws, agreement, vote of
shareholders, or disinterested directors, or otherwise. The Corporation
shall have the express right to grant additional indemnity without
seeking further approval by the shareholders. All applicable indemnity
provisions and any applicable law shall be interpreted and applied so as
to provide a claimant with the broadest but non-duplicative indemnity to
which he or she is entitled.
6.4 Insurance, Contracts and Funding
The Corporation may maintain insurance, at its expense, to protect
itself and any director, officer, partner, trustee, employee, or agent
of the Corporation or another corporation, partnership, joint venture,
trust, or other enterprise against any expense, liability, or loss,
whether or not the Corporation would have the power to indemnify such
person against such expense, liability, or loss under the Pennsylvania
Business Corporation Law of 1988. The Corporation may enter into
contracts granting indemnity to any director or officer of the
Corporation and may create a trust fund, grant a security interest, or
use other means (including, without limitation, a letter of credit) to
secure or ensure the payment of such amounts as may be necessary to
effect indemnification.
6.5 Indemnification of Employees and Agents of the Corporation
The Corporation may, by action of its Board of Directors from time to
time, provide indemnification and pay expenses in advance of the final
disposition of a proceeding to employees and agents of the Corporation
with respect to the indemnification and advancement of expenses of
directors and officers of the Corporation or pursuant to rights granted
pursuant to, or provided by, the Pennsylvania Business Corporation Law
of 1988 or otherwise.
6.6 Partial Indemnification
If a claimant is entitled to indemnification by the Corporation for some
or a portion of expenses, liabilities, or losses actually and reasonably
incurred by claimant in an investigation, defense, appeal, or settlement
but not, however, for the total amount thereof, the Corporation shall
nevertheless indemnify claimant for the portion of such expenses,
liabilities, or losses to which claimant is entitled.
6.7 Successors and Assigns
All obligations of the Corporation to indemnify any director or officer
shall be (i) binding upon all successors and assigns of the Corporation
(including any transferee of all or substantially all of its assets and
<PAGE>58
any successor by merger or otherwise by operation of law) and
(ii) binding on and inure to the benefit of the spouse, heirs, personal
representatives and estate of the director or officer. The Corporation
shall not effect any sale of substantially all of its assets, merger,
consolidation, or other reorganization unless the surviving entity
agrees in writing to assume all such obligations of the Corporation.
ARTICLE VII
MISCELLANEOUS
7.1 Corporate Seal
The corporate seal of the Corporation shall be a seal consisting of two
(2) concentric circles, in the outer of which circles shall appear and
be inscribed the following words, to wit: "VWR CORPORATION
PENNSYLVANIA," and in the inner of which circles shall appear and be
inscribed the following words and figures, to wit: "CORPORATE SEAL
1994;" and such seal, as impressed on the margin thereof, shall be the
corporate seal of the Corporation until altered or replaced pursuant to
the following proviso to this Section 7.1; provided, however, that at
any time, and from time to time, such seal may be altered or a new
corporate seal for the Corporation may be authorized and adopted, at the
pleasure of its Board of Directors, by resolution duly adopted by such
Board at any meeting thereof duly held.
7.2 Fiscal Year
The fiscal year of the Corporation shall begin on January 1 and end
December 31 of each year.
7.3 Amendments
The Bylaws of the Corporation may be amended, altered, or repealed, in
whole or in part, or new Bylaws may be made for the Corporation from
time to time by the affirmative vote of the majority of its whole Board
of Directors, including the affirmative vote of at least one (1)
director of each class, at any meeting of such Board duly held, subject
to the right and power of the shareholders of the Corporation to change
or repeal such Bylaws.
7.4 Severability
In the event that any provision of these Bylaws is determined by a court
to require the Corporation to do or to fail to do an act which is in
violation of applicable law, such provision shall be limited or modified
in its application to the minimum extent necessary to avoid a violation
of law and, as so limited or modified, such provision and the balance of
these Bylaws shall remain in full force and effect.
---------------------------------
Secretary
<PAGE>59
SECRETARY'S CERTIFICATE
The undersigned, Walter S. Sobon, Secretary of VWR Corporation, a
Delaware corporation (the "Company"), does hereby certify that the
foregoing Agreement has been adopted, at a meeting duly called and held,
by at least a majority of the outstanding stock of the Company entitled
to vote thereon.
- -------------------------------------------
Secretary
<PAGE>60
PROXY
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints James H. Wiborg
Jerrold B. Harris, and Walter S. Sobon, or any and
each of them, each with full power of substitution
VWR CORPORATION and revocation, as Proxies to vote, as designated
below, all shares of Common Stock of VWR
1310 GOSHEN PARKWAY Corporation which the undersigned would be
WEST CHESTER, PA 19380 entitled to vote if personally present at the
Annual Meeting of the Corporation to be held at
The Sheraton Great Valley Hotel, 707 Lancaster
Pike, Frazer, Pennsylvania, on May 5, 1994 and at
any adjournment thereof
1. Election of Directors
FOR all nominees listed______ WITHHOLD_______
below (except as marked AUTHORITY
to the contrary below)* to vote for
all nominees
listed below
Curtis P. Lindley, N. Stewart Rogers, Edward A. McGrath, Jr.
*INSTRUCTIONS: To withhold authority to vote for any individual nominee, write
that nominee's name on the space provided below.
_______________________________________________________________________________
2. PROPOSAL: Change the State of Incorporation from Delaware to Pennsylvania.
FOR ____ AGAINST ____ ABSTAIN ____
3. PROPOSAL: Ratification of the selection of Ernst & Young as independent
auditors for the year ending December 31, 1994.
FOR ____ AGAINST ____ ABSTAIN ____
4. To vote in their discretion upon such other business as may properly come
before the meeting.
<PAGE>61
Please Do Not Fold Please Date and Sign on Reverse Side
- -------------------------------------------------------------------------------
This Proxy when properly executed will be voted in the manner directed
herein by the undersigned shareholders. If no direction is made, this Proxy
will be voted FOR the election of the three (3) Directors nominated by the
Board, FOR Proposals 2 and 3 and, in the Proxies' discretion, upon such other
business as may properly come before the meeting (provided, however, that if,
prior to the election, any such nominee shall become unable to serve, the
Proxies may vote for such other persons as may be nominated). The undersigned
hereby revokes any proxy or proxies hertofore given to vote at said Annual
Meeting or any adjournment thereof.
Please sign exactly as name appears below. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee, or guardian, please give your full title as such. If a corporation,
please sign in full corporate name by President or other authorized officer.
If a partnership, please sign in partnership name by authorized person.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
DATED ______________________________, 1994
__________________________________________
Signature
__________________________________________
Signature, if held jointly
<PAGE>0
<DOCUMENT HEADER>
<DOCUMENT DESCRIPTION>COVER LETTER
<DOCUMENT TYPE>3
COUNT 1
<PAGE>1
March 15, 1994
Securities & Exchange Commission
Att'n: EDGAR Filer Support
450 Fifth Street
Washington, D.C. 20549
Re: PRELIMINARY 14A
VWR CORPORATION
Commission File No.: 0-14139
Gentlemen:
Pursuant to Rule 14a-6 of the Securities Exchange Act of 1934, definitive
copies of the Corporation's Notice of Annual Meeting of Shareholders, Proxy
Statement for Annual Meeting of Shareholders, and Form of Proxy are herewith
filed with the Commission.
The filing fee of $125.00 was wired to the Securities and Exchange Commission
lockbox at the Mellon Bank. The Company expects to mail definitive proxy
materials to the Commission no later than concurrently with their mailing to
the Company's Securities holders on or about March 31, 1994.
Very Truly Yours
s/WALTER S. SOBON
--------------------------------
WALTER S. SOBON
EOFEOFEOF
