<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. 1)
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/X/ Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
MARK VII, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $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 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/X/ Fee paid previously with preliminary materials.
/ / 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
[Letterhead of Mark VII, Inc.]
April [___], 1996
Dear Shareholder:
On behalf of Mark VII, Inc. (the "Company"), I cordially
invite you to attend the Annual Meeting of Shareholders of the Company to be
held on Wednesday, May 22, 1996 at 10:00 a.m., local time. At the meeting, in
addition to the election of directors, shareholders will be asked to approve
(i) a proposal to change the state of incorporation of the Company from
Missouri to Delaware (the "Reincorporation") and (ii) a proposal to amend the
Company's 1995 Omnibus Stock Incentive Plan (the "1995 Plan").
The members of the Company's Board of Directors have
unanimously determined that the proposals are in the best interest of the
Company and its shareholders and strongly recommend that you vote "FOR" each
proposal. The Reincorporation will allow the Company to take advantage of the
certainty of Delaware law in the conduct of its business and in its planning.
The proposed amendment to the 1995 Plan would make it possible to include all
employees as eligible participants under the 1995 Plan and would incorporate
into the 1995 Plan the Company's existing policy of issuing all stock options
with an exercise price of not less than the fair market value of the Company's
common stock on the date of the grant of such options and not repricing stock
options once they have been granted. The accompanying Proxy Statement
describes these proposals in detail. We urge you to read the accompanying
information carefully.
The Reincorporation requires the affirmative vote of
two-thirds of the Company's shareholders. Accordingly, because the vote of
each shareholder is important, we ask that you sign and return the enclosed
proxy card in the envelope provided, whether or not you now plan to attend the
meeting, so that your shares can be voted according to your wishes. This proxy
will not affect your right to attend and vote at the meeting or to change your
vote at or prior to the meeting.
We appreciate your cooperation and interest in the Company.
Please sign and return your proxy card at your earliest convenience.
Sincerely,
/s/ R.C. Matney
------------------------------------
R.C. Matney
Chairman of the Board, President and
Chief Executive Officer
<PAGE> 3
MARK VII, INC.
965 Ridge Lake Boulevard, Suite 103
Memphis, Tennessee 38120
----------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 22, 1996
----------------------
TO ALL SHAREHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders (the
"Annual Meeting") of Mark VII, Inc., a Missouri corporation (the "Company"),
will be held on Wednesday, the 22nd day of May, 1996, at 10:00 a.m., local
time, at the North River Club Conference Center Board Room, 2500 Yacht Club
Way, Northeast, Tuscaloosa, Alabama, for the following purposes:
(1) To elect the members of the Board of Directors for the ensuing
year or until their successors are duly elected and qualified;
(2) To consider and vote upon a proposal to change the state of
incorporation of the Company from Missouri to Delaware;
(3) To consider and vote upon a proposal to amend the Mark VII,
Inc. 1995 Omnibus Stock Incentive Plan; and
(4) To transact such other business as may properly come before
the meeting or any adjournment or postponement thereof.
The Board of Directors has fixed the close of business on [_______],
1996 as the record date for the determination of the shareholders entitled to
notice of and to vote at the Annual Meeting or any adjournment or postponement
thereof. Only holders of record on such date will be entitled to vote at the
Annual Meeting. A copy of the Proxy Statement relating to the Annual Meeting,
a Form of Proxy and the Company's 1995 Annual Report to Shareholders accompany
this Notice.
BY ORDER OF THE BOARD OF DIRECTORS
JAMES T. GRAVES
Secretary
April [__], 1996.
IMPORTANT-YOUR PROXY IS ENCLOSED
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE COMPLETE,
DATE, SIGN AND MAIL THE ENCLOSED PROXY IN THE ACCOMPANYING RETURN ADDRESSED
ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
<PAGE> 4
MARK VII, INC.
965 Ridge Lake Boulevard, Suite 103
Memphis, Tennessee 38120
-------------------
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 22, 1996
-------------------
PROXY STATEMENT
This Proxy Statement is being furnished in connection with the
solicitation of proxies by and on behalf of the Board of Directors of Mark VII,
Inc., a Missouri corporation (the "Company"), for use at the annual meeting of
shareholders (the "Annual Meeting") to be held on Wednesday, the 22nd day of
May, 1996, at 10:00 a.m., local time, at the North River Club Conference Center
Board Room, 2500 Yacht Club Way, Northeast, Tuscaloosa, Alabama, or any
adjournment or postponement thereof. Shares represented by duly executed
proxies received prior to the Annual Meeting will be voted at the Annual
Meeting. If a shareholder specifies a choice on the form of proxy with respect
to any matter to be acted upon, the shares will be voted in accordance with
such directions. If no choice is specified, shares will be voted "FOR" the
nominees listed on the proxy and in this Proxy Statement, "FOR" the proposal to
change the Company's state of incorporation from Missouri to Delaware (the
"Reincorporation") and "FOR" the proposal to amend the Mark VII, Inc. 1995
Omnibus Stock Incentive Plan (the "1995 Plan"). Any person giving a proxy has
the power to revoke it at any time before it is exercised by giving written
notice to the Secretary of the Company at any time prior to its use or by
attending the Annual Meeting and voting in person (although attendance at the
Annual Meeting will not in and of itself constitute a revocation of such
proxy).
This Proxy Statement and the accompanying form of proxy are being
mailed or given to shareholders on or about April [__], 1996. The Company will
bear all of the costs of solicitation of proxies, including preparation,
assembly, printing and mailing of this Proxy Statement, the form of proxy and
any additional information furnished to shareholders. In addition to the use
of the mails, proxies may be solicited by personal contact, telephone or
telegraph by officers or representatives of the Company or, at the Company's
request, MacKenzie Partners, Inc. ("MacKenzie"). The Company has engaged
MacKenzie to assist in the solicitation of proxies for a fee of $5,000, plus
reimbursement for its reasonable out-of-pocket expenses and for payments made
to brokers and other nominees for their expenses in forwarding soliciting
material. MacKenzie will distribute the Company's proxy materials to
beneficial owners and will request brokerage houses and other custodians,
nominees and fiduciaries to forward such materials to the beneficial owners of
the Company's common stock. No additional compensation will be paid to
directors, officers or other regular employees of the Company for such
services.
Only shareholders of record at the close of business on [_______],
1996 (the "Record Date") will be entitled to notice of, and to vote at, the
Annual Meeting. On the Record Date, the Company had [_________] shares of
common stock, par value $.10 per share, issued and outstanding and entitled to
vote. Each outstanding share of common stock is entitled to one vote on each
matter brought to a vote. The presence, either in person or by properly
executed proxy, of the holders of a majority of the outstanding shares of
common stock entitled to vote at the Annual Meeting is necessary to constitute
a quorum. Abstentions will be counted in determining whether a quorum has been
reached. The affirmative vote of the holders of at least two-thirds of the
shares of common stock entitled to vote at the Annual Meeting is required to
approve the Reincorporation. The affirmative vote of the holders of at least a
majority of the shares of common stock represented in person or by properly
executed proxy and entitled to vote at the Annual Meeting is required (i) to
approve the proposal to amend the 1995 Plan and (ii) for election of each
nominee for director. A vote withheld from a particular nominee will have the
same effect as a vote against such nominee. The Company has been advised by
the National Association of Securities Dealers, Inc. (the "NASD") that the
election of directors and the proposed amendment of the 1995 Plan are
considered "routine" items upon which broker-dealers holding shares in street
name for their customers may vote, in their discretion, on behalf of any
customers who do not furnish voting instructions within ten days of the date
these proxy materials are sent to such customers. Abstentions and broker
non-votes will be considered in determining the number of votes required to
approve the proposed Reincorporation. Consequently, abstentions cast and
broker non-votes as to the proposed Reincorporation will have the same effect
as voting against it. Each of the directors and executive officers of the
Company (who in the aggregate beneficially own, as of the Record Date,
approximately 14.3% of the outstanding common stock) has indicated that he
intends to vote "FOR" the proposed Reincorporation and "FOR" the amendment of
the 1995 Plan.
The Company's shareholders will not have dissenters' rights of
appraisal with respect to the Reincorporation. See "Significant Differences in
Corporation Laws" described in Proposal No. 2 below.
- 2 -
<PAGE> 5
Management does not know of any matters, other than those referred to
in the accompanying Notice of Annual Meeting, which are to come before the
Annual Meeting. If any other matters are properly presented to the Annual
Meeting for action, it is intended that the persons named in the accompanying
form of proxy, or their substitutes, will vote in accordance with their
judgment of the best interests of the Company on such matters.
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth with respect to the common stock as
of April [__], 1996 (unless otherwise indicated): (i) the only persons known
to be beneficial owners of more than five percent of the common stock; (ii)
shares beneficially owned by all directors and nominees for election as a
director of the Company; (iii) shares beneficially owned by the persons named
in the Summary Compensation Table in this Proxy Statement; and (iv) shares
beneficially owned by all directors and executive officers as a group.
Beneficial ownership is direct, and the holders have sole investment power and
sole voting power, unless otherwise indicated.
<TABLE>
<CAPTION>
Number of
Shares and
Nature of
Beneficial Percent
Name and Address of Beneficial Owners (1) Ownership of Class
- ------------------------------------- --------- --------
<S> <C> <C>
Warburg, Pincus Counsellors, Inc.
466 Lexington Avenue
New York, NY 10017 637,000 (2) 13.9%
RCM Capital Management
RCM Limited L.P.
RCM General Corporation
Four Embarcadero Center, Suite 2900
San Francisco, California 94111 483,000 (3) 10.5%
R.C. Matney 465,940 (4) 10.0%
FMR Corp.
82 Devonshire Street
Boston, MA 02109 340,900 (5) 7.4%
Wellington Management Company
75 State Street
Boston, MA 02109 272,000 (6) 5.9%
Dimensional Fund Advisors Inc.
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401 252,200 (7) 5.5%
J. Michael Head 75,718 (8) 1.6%
James T. Graves 65,300 (9) 1.4%
David H. Wedaman 44,371 (10) 1.0%
Douglass Wm. List 13,800 (11) .3%
Robert E. Liss 7,786 (12) .2%
Michael J. Musacchio 6,067 (13) .1%
William E. Greenwood 5,225 (14) .1%
Dr. Jay U. Sterling 5,225 (14) .1%
Thomas J. Fitzgerald 2,150 (15) -
All Executive Officers and Directors as a Group 693,582 (16) 14.3%
(11 persons)
</TABLE>
(1) Unless otherwise indicated, the address is the Company's principal office.
(2) Warburg, Pincus Counsellors, Inc. ("Warburg"), a registered investment
advisor, is deemed to have beneficial ownership of 637,000 shares as of
December 31, 1995, which are owned by numerous investment advisory
clients. Warburg has sole voting power with regard to 446,400 shares,
sole investment power with regard to 637,000 shares and shared voting
power with regard to 85,000 shares. The information as to the beneficial
ownership of Warburg was obtained from the Schedule 13G filed by that
company.
- 3 -
<PAGE> 6
(3) RCM Capital Management ("RCM Capital") is a registered investment advisor,
RCM Limited L.P. ("RCM Limited") is the general partner of RCM Capital and
RCM General Corporation ("RCM General") is the general partner of RCM
Limited. RCM Limited and RCM General are deemed to have beneficial
ownership of securities managed by RCM Capital. As of December 31, 1995,
RCM Capital, RCM Limited and RCM General have sole voting power with
regard to 413,000 shares and sole investment power with regard to 483,000
shares. The information as to the beneficial ownership of RCM Capital,
RCM Limited and RCM General was obtained from the Schedule 13G filed by
those companies.
(4) Includes 335,430 shares owned indirectly through Mr. Matney's living
trust, 45,260 shares owned indirectly through Mr. Matney's individual
retirement account, 80,786 shares issuable pursuant to non-qualified stock
options granted under the Company's 1992 Non-Qualified Stock Option Plan
(the "NQSO Plan") and 4,464 shares issuable pursuant to incentive stock
options granted under the Company's 1986 Incentive Stock Option Plan (the
"ISO Plan").
(5) FMR Corp. ("FMR") is deemed to have beneficial ownership of 340,900 shares
as of December 31, 1995. Fidelity Management & Research Company
("Fidelity"), a wholly-owned subsidiary of FMR and a registered investment
advisor, is the beneficial owner of 160,900 shares and Fidelity Management
Trust Company, a wholly-owned subsidiary of FMR and a bank as defined in
Section 3(a)(6) of the Securities Exchange Act of 1934, is the beneficial
owner of 180,000 shares. FMR has sole voting power with regard to 180,000
shares and sole investment power with regard to 340,900 shares.
Information as to the beneficial ownership of FMR was obtained from the
Schedule 13G filed by that company.
(6) Wellington Management Company ("Wellington"), a registered investment
advisor, is deemed to have beneficial ownership of 272,000 shares as of
December 31, 1995, which are owned by numerous investment advisory
clients. Wellington has shared voting power with regard to 167,000 shares
and shared investment power with regard to 272,000 shares. The
information as to the beneficial ownership of Wellington was obtained from
the Schedule 13G filed by that company.
(7) Dimensional Fund Advisors Inc. ("Dimensional"), a registered investment
advisor, is deemed to have beneficial ownership of 252,200 shares as of
December 31, 1995, all of which shares are held in portfolios of DFA
Investment Dimensions Group Inc., a registered open-end investment
company, or in series of the DFA Investment Trust Company, a Delaware
business trust, or the DFA Group Trust and DFA Participation Group Trust,
investment vehicles for qualified employee benefit plans, all of which
Dimensional serves as investment manager. Dimensional disclaims
beneficial ownership of all such shares. The information as to the
beneficial ownership of Dimensional was obtained from the Schedule 13G
filed by that company.
(8) Includes 4,468 shares owned directly, 14,392 shares issuable pursuant to
incentive stock options granted under the ISO Plan, and 56,858 shares
issuable pursuant to non-qualified stock options granted under the NQSO
Plan. Mr. Head has an obligation to sell 4,468 shares of common stock to
Mr. Thomas F. Laughlin, an employee of the Company, at a price per share
of $5.15, pursuant to a Stock Purchase Agreement, effective June 1, 1985.
Under the terms of the Stock Purchase Agreement, Mr. Head is obligated to
sell the above shares to Mr. Laughlin at any time on or before June 1,
1996, on 30 days' written notice from Mr. Laughlin.
(9) Includes 5,300 shares held in Mr. Graves' individual retirement account
and 60,000 shares issuable pursuant to non-qualified stock options
granted under the NQSO Plan.
(10) Includes 8,500 shares held directly by Mr. Wedaman, 34,500 shares issuable
pursuant to incentive stock options granted under the ISO Plan and 1,371
shares allocated to the Mark VII, Inc. Savings and Investment Plan (the
"SIP Plan") account of Mr. Wedaman. Mr. Wedaman has sole investment power
and shared voting power with respect to the shares allocated to his SIP
Plan account.
(11) Includes 500 shares owned directly, 6,300 shares owned indirectly through
Mr. List's individual retirement account and 7,000 shares issuable
pursuant to non-qualified stock options granted under the NQSO Plan.
(12) Includes 3,750 shares owned directly, 2,800 owned indirectly through Mr.
Liss's individual retirement account, 100 shares owned jointly with Mr.
Liss's wife and 1,136 shares owned indirectly through Mr. Liss's wife's
individual retirement account.
(13) Includes 1,600 shares owned directly and 4,467 shares owned jointly with
Mr. Musacchio's wife.
(14) Includes 225 shares owned directly and 5,000 shares issuable pursuant to
non-qualified stock options granted under the NQSO Plan.
- 4 -
<PAGE> 7
(15) Includes 150 shares owned directly and 2,000 shares issuable pursuant to
non-qualified stock options granted under the 1995 Plan.
(16) Includes 55,356 shares issuable pursuant to incentive stock options
granted under the ISO Plan and 216,644 shares issuable pursuant to
non-qualified stock options granted under the NQSO Plan.
PROPOSAL NO. 1 - ELECTION OF DIRECTORS
The shares represented by the enclosed proxy will be voted,
unless otherwise indicated, for the election of the eight nominees for director
named below. The directors to be elected at the Annual Meeting will serve for
one year or until their successors are duly elected and qualified; provided,
however, if the proposed Reincorporation (Proposal No. 2 in this Proxy
Statement) is approved by the shareholders, the Board of Directors will be
divided into three classes of directors, each class consisting, as nearly as
possible, of one-third of the total number of directors, with each class having
a three-year term (following an initial three-year phase in period). If the
proposed Reincorporation is approved by the shareholders, the Board of
Directors intends to classify the Board as follows: (i) James T. Graves and
Thomas J. Fitzgerald will comprise a class whose term of office will expire in
1997; (ii) J. Michael Head, David H. Wedaman and Dr. Jay U. Sterling will
comprise a class whose term of office will expire in 1998; and (iii) R.C.
Matney, Douglass Wm. List and William E. Greenwood will comprise a class whose
term of office will expire in 1999. In the unanticipated event that any
nominee for director should become unavailable, the Board of Directors, at its
discretion, may designate substitute nominees, in which event such shares will
be voted for such substitute nominees.
MANAGEMENT RECOMMENDS A VOTE FOR THE ELECTION OF THE EIGHT
NOMINEES FOR DIRECTOR NAMED BELOW.
<TABLE>
<CAPTION>
Director Principal Occupation for
Director Since Age Last Five Years and Directorships
- ------------------------ -------- --- ---------------------------------
<S> <C> <C> <C>
R. C. Matney 1989 58 Chairman of the Board of the Company since February 1992 and President and
Chief Executive Officer of the Company since July 1994. From May 1991 until
February 1992, Mr. Matney was President of the Company. Since July 1987,
Mr. Matney has also been Chairman of the Board and Chief Executive Officer
of Mark VII Transportation Company, Inc. ("Mark VII"), the Company's
principal operating subsidiary. From July 1987 to February 1993, he was
also President of Mark VII.
J. Michael Head 1986 42 Executive Vice President, Chief Financial Officer, Treasurer and Assistant
Secretary of the Company since July 1994. President of the Company from
February 1992 to July 1994 and Chief Executive Officer of the Company from
November 1988 to July 1994. From May 1991 to February 1992, Mr. Head served
as Vice Chairman of the Board of the Company.
James T. Graves 1987 61 Secretary of the Company since May 1992, General Counsel of the Company
since March 1993 and Vice Chairman since May 1993. President of Missouri-
Nebraska Express, Inc. ("Mo-Neb"), a subsidiary of the Company, from
September 1991 to May 1993. From July 1981 until September 1991, Mr. Graves
was a partner in the law firm of Clark, Mize and Linville in Salina, Kansas.
David H. Wedaman 1994 38 Executive Vice President of the Company since May 1991 and Chief Operating
Officer, Assistant Secretary and Assistant Treasurer of the Company since
September 1994. President, Chief Operating Officer and Assistant Secretary
of Mark VII since February 1993. From March 1991 to February 1993, he was
Executive Vice President of Mark VII.
</TABLE>
- 5 -
<PAGE> 8
<TABLE>
<S> <C> <C> <C>
Douglass Wm. List (1)(2) 1993 40 Since January 1988, Mr. List has been President of List & Company, Inc., a
management consulting firm in Baltimore, Maryland. Mr. List has also been
President, since 1992, of Railway Engineering Associates, a firm involved in
developing railroad technology. From 1988 to 1992, he was Vice President
and General Manager of Railway Engineering Associates. Mr. List is a
director of Harmon Industries, Inc., a publicly held company headquartered
in Blue Springs, Missouri. Harmon Industries, Inc. is a supplier of
communication and safety-related equipment for railroads worldwide.
William E. Greenwood (2) 1994 57 Mr. Greenwood is currently a self-employed consultant. He served with the
Burlington Northern Railroad Company, the largest railroad in the United
States and the principal subsidiary of Burlington Northern Inc., a publicly
held company headquartered in Fort Worth, Texas, in various capacities from
1963 to 1994, serving as Chief Operating Officer from 1990 to 1994. Mr.
Greenwood is a director of Transcisco Industries, Inc., a publicly held
company headquartered in San Francisco, California. Transcisco Industries,
Inc. is a railcar and industrial services company operating in domestic
railcar maintenance and repair, railcar leasing and management and
international railcar leasing.
Dr. Jay U. Sterling (1)(2) 1995 62 Dr. Sterling has been an Associate Professor of Marketing and Logistics at
the University of Alabama, Tuscaloosa since 1984. Dr. Sterling has a Doctor
of Philosophy ("Ph.D.") degree in marketing and logistics from Michigan
State University. In addition to his teaching responsibilities, he has
performed research and written extensively in the areas of transportation,
distribution and logistics management and has also consulted extensively in
the areas of transportation and logistics management. Prior to obtaining
his Ph.D., Dr. Sterling spent 25 years in industry with Whirlpool
Corporation and The Limited in various logistics related positions.
Thomas J. Fitzgerald (1) 1995 54 Mr. Fitzgerald has a law and transportation consulting practice based in
Lake Forest, Illinois, in which he has been engaged since 1990. In that
capacity he has counseled transportation companies, purchasers of
transportation and government agencies on a variety of projects, including
logistics, marketing, strategic positioning and acquisitions. From 1965 to
1990, he was employed by The Atchison, Topeka and Santa Fe Railway Company
and its affiliates in a series of law and managerial capacities, including
Senior Vice President-Executive Department and Senior Vice President-
Traffic.
</TABLE>
- ---------------------------
(1) Member of the Audit Committee.
(2) Member of the Compensation/Stock Option Committee.
THE BOARD OF DIRECTORS AND BOARD COMMITTEES
The Board of Directors held nine meetings and acted by unanimous
written consent on five separate occasions during 1995.
The Audit Committee consists of Dr. Jay U. Sterling (Chairman of the
committee), Thomas J. Fitzgerald and Douglass Wm. List. The functions of the
Audit Committee are to review significant financial information of the Company,
ascertain the existence of an effective accounting and internal control system,
oversee the audit function and recommend the appointment of independent
auditors for the Company. The Audit Committee held four meetings in 1995. A
representative of the Company's independent auditors was present at those
meetings, as well as at all of the regular Board meetings.
- 6 -
<PAGE> 9
The Compensation/Stock Option Committee consists of Douglass Wm. List
(Chairman of the committee), William E. Greenwood and Dr. Jay U. Sterling.
The Compensation/Stock Option Committee reviews salaries and bonuses of
executive officers and administers employee bonus plans, including grants of
stock options under the 1995 Plan, and other Company compensation programs.
The Compensation/Stock Option Committee held five meetings in 1995.
The Company does not have a standing nominating committee.
All directors attended at least 75% of the total number of meetings
held in 1995 of the Board and committees on which they served.
DIRECTORS' FEES AND RELATED INFORMATION
Until May 17, 1995, each non-employee director was paid an annual
director's fee of $15,000 and received an automatic grant of options to
purchase shares of common stock under the NQSO Plan. Dr. Sterling and Mr.
List, as non-employee directors, each received options to purchase 1,000
shares of common stock at exercise prices of $13.75 and $16.50, respectively,
pursuant to that director compensation plan. Effective with meetings of the
Board of Directors on or after May 17, 1995, a revised compensation plan for
non-employee directors was adopted. Accordingly, non-employee directors are
currently compensated as follows: (i) a $500 per month retainer, with an
additional $250 per month for the chairman of each of the Compensation/Stock
Option Committee and the Audit Committee, (ii) meeting fees of $1,500, $750 and
$500 for each Board, committee and telephonic Board meeting attended,
respectively, (iii) an annual grant of options to purchase 2,000 shares of
common stock pursuant to the 1995 Plan, which options are immediately
exercisable and expire three years from the date of grant, (iv) grants of 75
shares of common stock each quarter pursuant to the 1995 Plan and (v) standard
per diem rate of $1,500 per day spent on Company affairs which are outside of
normal director duties. In addition, the Company has adopted, effective
July 1, 1996, a requirement that each director maintain a minimum shareholding
in Company common stock of 350 shares for each year of service as a director.
If Proposal No. 3 is approved by the shareholders, the grant of 75 shares of
common stock each quarter to each non-employee director under the 1995 Plan
will be increased to 200 shares of common stock each quarter.
EXECUTIVE OFFICERS AND KEY EMPLOYEES
<TABLE>
<CAPTION>
NAME AGE POSITION
- -------------------- --- -------------------------------------------------------------------------------------
<S> <C> <C>
R. C. Matney 58 Chairman of the Board, President and Chief Executive Officer.
James T. Graves 61 Vice Chairman of the Board, General Counsel and Secretary.
J. Michael Head 42 Executive Vice President, Chief Financial Officer, Treasurer and Assistant
Secretary.
David H. Wedaman 38 Executive Vice President, Chief Operating Officer, Assistant Secretary and Assistant
Treasurer; and President of Mark VII.
Philip L. Dunavant 31 Vice President of Finance, Assistant Secretary and Assistant Treasurer since January
1995. From May 1993 to January 1995, he was Assistant Vice President and from May
1989 to May 1993, he was Controller of Mark VII.
Robert E. Liss 44 President/Special Services Division of Mark VII since January 1995; from May 1993 to
January 1995, he was Vice President/Special Services Division of Mark VII; from
December 1992 to May 1993, he was Vice President of Mark VII; from January 1989 to
December 1992, he was Vice President-Intermodal with C. H. Robinson Company, a third
party agent specializing in freight and produce brokerage.
Michael J. Musacchio 44 President/Logistics Services Division of Mark VII since January 1995; from May 1993 to
January 1995, he was Executive Vice President/Logistics Services Division of Mark
VII; from December 1992 to May 1993, he was Vice President of Mark VII; from August 1992
to December 1992, he was an agent with Mark VII; from December 1988 to July 1992, he was
Vice President of Transportation with C. H. Robinson Company.
</TABLE>
- 7 -
<PAGE> 10
Executive officers will be elected annually by the Board of Directors
and will serve until their successors are elected or until resignation or
removal. There are no family relationships among any of the directors or
executive officers.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires
executive officers and directors, and persons who beneficially own more than
ten percent (10%) of the Company's stock, to file initial reports of ownership
and reports of changes in ownership with the Securities and Exchange Commission
(the "SEC") and the NASD. Executive officers, directors and greater than ten
percent (10%) beneficial owners are required by SEC regulations to furnish the
Company with copies of all Section 16(a) forms they file.
Based solely on a review of the copies of such forms furnished to the
Company and written representations from the executive officers and directors,
the Company believes that all Section 16(a) filing requirements applicable to
its executive officers, directors and greater than ten percent (10%) beneficial
owners were met, except for the Form 3 for Mr. Fitzgerald filed on October 17,
1995 reporting his election as a director of the Company on July 19, 1995 and
the Form 5 for Mr. Fitzgerald filed on March ___, 1996 reporting his receipt of
a grant of non-employee director stock options under the 1995 Plan.
EXECUTIVE COMPENSATION
The following table summarizes, for each of the three fiscal years in
the period ended December 31, 1995, the compensation awarded, paid to or earned
by (i) each person who served as the Chief Executive Officer (the "CEO") of the
Company during 1995 and (ii) each of the four most highly compensated executive
officers (other than the CEO) whose total annual salary and bonus exceeded
$100,000 and who served as an executive officer of the Company or its
subsidiaries as of December 31, 1995 (collectively, the "Named Executive
Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Compensation
------------
Securities
Annual Compensation Underlying
-------------------- Options/ All Other
Name and Principal Position Year Salary Bonus SARs(#) Compensation(2)
- ----------------------------- ---- -------- -------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
R.C. Matney, Chairman of 1995 $234,988 $117,500 - $ -
the Board, President and 1994 204,636 115,693 250,000 -
Chief Executive Officer 1993 175,000 - - -
Robert E. Liss, President 1995 126,208 383,243 - -
Special Services Division 1994 125,000 145,452 - -
of Mark VII 1993 125,143 4,000 - -
David H. Wedaman, Executive 1995 177,520 91,875 (1) 40,000 315
Vice President, Chief Operating 1994 135,111 96,250 (1) 7,500 -
Officer and Director; 1993 119,820 60,000 (1) - -
President of Mark VII
Michael J. Musacchio, President 1995 123,388 239,882 - -
Logistics Services Division 1994 120,142 51,686 - -
of Mark VII 1993 120,142 50,000 - -
J. Michael Head, Executive 1995 178,718 3,356 - 713
Vice President, Chief 1994 174,272 - 10,000 700
Financial Officer, Treasurer 1993 181,233 - - 902
and Director
</TABLE>
- ------------
(1) Includes performance bonuses of $70,000, $43,750 and $60,000 and cash
payments pursuant to stock appreciation rights ("SARs") of $21,875, $52,500
and $0 in 1995, 1994 and 1993, respectively.
(2) Includes a Company matching contribution to the SIP Plan (a defined
contribution plan).
- 8 -
<PAGE> 11
The following two tables present information for the last completed
fiscal year relating to (i) grants to and exercises by the Named Executive
Officers of stock options granted pursuant to the NQSO Plan, the ISO Plan and
the 1995 Plan and (ii) holdings at December 31, 1995 by the Named Executive
Officers of unexercised options granted pursuant to the NQSO Plan, the ISO Plan
and the 1995 Plan, and SARs granted pursuant to the Company's Stock
Appreciation Rights Program.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Individual Grants
---------------------------- Potential Realizable Value
Number of % of Total at Assumed Annual Rates
Securities Options/SARs of Stock Price Appreciation
Underlying Granted to Exercise or for Option Term (2)
Options/SARs Employees in Base Price Expiration ----------------------------
Name Granted (#) Fiscal Year ($/Share) Date 5% ($) 10% ($)
-------------------- ------------ ------------- ---------- --------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
David H. Wedaman 40,000 (1) 100% 16.125 12/29/05 $405,637 $1,027,964
</TABLE>
(1) Represents options to purchase 40,000 shares of common stock granted
pursuant to the 1995 Plan. These options become exercisable ratably over
five years beginning December 29, 1996.
(2) The values presented in these two columns are required disclosures under
federal securities laws based on assumed stock price appreciation rates.
THESE ASSUMED APPRECIATION RATES ARE NOT DERIVED FROM THE HISTORIC OR
PROJECTED PRICES OF THE COMPANY'S COMMON STOCK OR RESULTS OF OPERATIONS OR
FINANCIAL CONDITION AND THEY SHOULD NOT BE VIEWED AS A PREDICTION OF
POSSIBLE PRICES FOR THE COMPANY'S COMMON STOCK IN THE FUTURE.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAREND OPTION/SAR VALUES
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the Money
Options/SARs at Options/SARs at
Shares Fiscal Yearend Fiscal Yearend (1)
Acquired On Value ---------------------------- ---------------------------
Name Exercise(#) Realized Exercisable Unexercisable Exercisable Unexercisable
- ---------------- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
R.C. Matney None None 79,250 230,750 $ 444,406 $ 559,344
David H. Wedaman None None 34,500 53,000(2) 399,188 29,250
J. Michael Head None None 65,250 12,000 458,156 94,500
</TABLE>
(1) Based on the yearend market price of $16.125.
(2) Includes 7,000 shares of common stock with respect to which SARs have been
granted.
- 9 -
<PAGE> 12
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT
AND CHANGE-IN-CONTROL ARRANGEMENTS
Each of the Named Executive Officers has an employment contract with
the Company which could result in termination or resignation payments in excess
of $100,000. A summary of the base salary and terms provided in the employment
contracts follows:
<TABLE>
<CAPTION>
Name Base Salary Expiration of Contract
- ----------------- ----------- ----------------------
<S> <C> <C>
R.C. Matney $235,000 April 1, 2002
Robert E. Liss 125,000 30 days' notice by either party(1)
David H. Wedaman 175,000 January 1, 1997
Michael J. Musacchio 125,000 30 days' notice by either party(1)
J. Michael Head 175,000 September 30, 1996(2)
</TABLE>
(1) Subject to the termination payments discussed below.
(2) Upon the expiration of the contract, Mr. Head's employment automatically
continues under the same terms as provided in the contract until such
time as either party provides written notice of termination of
employment.
Each of the contracts provides for payment of the contracted base
salary and benefits after termination as follows:
<TABLE>
<CAPTION>
Event of Termination Pay Subsequent to Termination
----------------------------------- -----------------------------
<S> <C>
Death or Disability One year
Termination by Company, except for cause Remainder of contract term (or one year if
no specified term)
</TABLE>
Under each of the contracts, the Company's obligation is reduced following an
event of termination if the terminated executive becomes employed during the
payment period. Mr. Head's contract also provides for payment of base salary
and benefits for the greater of the remainder of the contract term or one year
after resignation, unless terminated for cause. Mr. Wedaman may be terminated
by the Company for failure to achieve 50% of planned operating income in his
business unit, in which case he will receive his base salary and benefits for
only one year following the date of termination. Each of Messrs. Liss and
Musacchio may be terminated by the Company with no further payments for failure
to achieve pretax profit (as defined in their respective agreements) of
$250,000 in his business unit for any year. If either of Messrs. Liss or
Musacchio is terminated following a year in which $250,000 of pretax profit was
achieved, he will receive the greater of (i) three times his prior year's
compensation or (ii) $1.4 million for Mr. Liss or $1 million (or $1.4 million
if pretax profit exceeded $2 million) for Mr. Musacchio. In the event either
of these two contracts is terminated because pretax profit of $250,000 was not
attained but the respective business unit was profitable, the Company may
extend for up to three years the confidentiality, non-compete and prohibition
against solicitation of employees provisions of the respective agreements by
continuing to pay the base salary and making advance annual payments of
$300,000 for the first year, $300,000 for the second year and $50,000 for the
third year to Mr. Liss and $250,000 for the first year, $200,000 for the second
year and $200,000 for the third year to Mr. Musacchio. The Company may extend
the confidentiality, non-compete and prohibition against solicitation of
employees provisions for up to three years beyond the terms of the contracts of
Messrs. Matney, Wedaman and Head by continuing to pay all base salary, bonuses
and benefits set forth under each of their respective contracts.
BOARD COMPENSATION COMMITTEE REPORT ON
EXECUTIVE COMPENSATION
The Company's executive compensation program is administered by the
Compensation/Stock Option Committee of the Board of Directors (the
"Committee"), which is comprised of three non-employee directors.
The objective of the Company's executive compensation program is to
provide the compensation necessary to attract, motivate and retain dedicated
and talented executives and to provide a link between the success of the
Company's executives and its shareholders. The Committee believes that a
significant portion of the compensation of the Company's executive officers
should be tied to the performance of the Company and, where appropriate, to the
performance of specific business units for which the executives are
responsible. Thus, the program seeks to achieve these objectives through a
combination of annual salaries, performance-based bonuses and stock options.
- 10 -
<PAGE> 13
The Committee reviews its executive compensation program continually to
ensure that the Company's executive officers are being appropriately
compensated in comparison to their respective responsibilities with the
Company, the results of the Company's business operations and compensation paid
to comparable executives at similar companies. The Committee considers several
factors in its review of executive compensation, including: (i) compensation of
executives holding comparable positions of responsibility at transportation
services companies of similar size and type of operation as the Company,
including, Fritz Companies, Inc., Air Express International Corporation, the
Harper Group and Expeditors International of Washington, Inc. (the "Peer
Group"); (ii) each executive's experience and performance history with the
Company and with previous employers and his or her suitability for his or her
present assignment; (iii) each executive's past compensation arrangements with
the Company; (iv) corporate performance; and (v) performance of business units
for which the executive is responsible. The Committee generally does not
consider the performance of the companies that comprise the Peer Group in
establishing executive officers' base salary ranges, although as noted below
under "CEO Compensation", 50% of Mr. Matney's potential annual cash bonus is
directly related to the Company's shareholder return as compared with the
shareholder returns for the Peer Group. The Committee believes that the
Company's executive officers' total compensation is competitive with the
industry, although base salary ranges generally are below the industry median.
In connection with the sale of substantially all of the assets of the
Company's truckload subsidiaries to Swift Transportation Co., Inc. (the "Asset
Sale") completed in 1994, the Committee conducted an extensive review of the
Company's executive compensation program. As a result of this review, the
Company entered into new, or amended existing, employment agreements with its
executive officers as of July 1, 1994, including its CEO.
BASE SALARY
The minimum base salary of each of the Company's executive officers is
established in employment agreements between each such officer and the Company.
The Committee reviews the base salaries of the Company's executives annually
based on the factors described above and recommends adjustments where
appropriate. Based on the Committee's review and in light of the compensation
changes implemented in connection with the Asset Sale, no adjustments were made
to the base salaries of the executive officers as reflected in their respective
employment agreements.
ANNUAL BONUS
The Committee establishes a bonus program for each executive officer that
is designed to implement the Committee's compensation philosophy with respect
to bonus payments. The bonus programs for executives who are in charge of
particular business units are based on the profitability of their respective
business units. In most circumstances, this program is set forth in the
executive's employment agreement.
Mr. Wedaman's bonus program for 1995 was based upon the pretax profit
(computed on the basis of generally accepted accounting principles consistently
applied) earned by his business unit as compared to the annual budget of that
unit. Mr. Wedaman's bonus is payable in increments of 10% of his base salary,
from 40% of his base salary if the pretax profit of his business unit meets
what was budgeted, to 100% of his base salary if the pretax profit of his
business unit is 200% or more of that budgeted. No bonus is payable if the
pretax profit of his business unit is less than 100% of that budgeted, unless
the budget for 1992 of $3.9 million is achieved, in which case his bonus is 25%
of base salary. As reported in the Summary Compensation Table, a bonus of 40%
of his January 1, 1995 level of base salary was paid to Mr. Wedaman based on
attaining the 1995 budget for his business unit.
Each of Messrs. Liss's and Musacchio's employment agreements provide for
an annual bonus of 25% of pretax profit (computed on the basis of generally
accepted accounting principles consistently applied and defined in the
respective agreements) earned by his respective business unit, reduced to 15%
in certain circumstances.
STOCK OPTIONS/SARS
The Committee has the discretion to grant awards of stock options or SARs
to the Company's executive officers. The Committee has not established
performance factors of general application for the grant of stock options or
SAR awards, but instead makes such decisions based on specific issues, as
described below. Based on its review of the executive compensation program and
the fact that stock options were granted to certain officers in connection with
the Asset Sale, no stock options or SARs were granted in 1995 to the executive
officers other than Mr. Wedaman. In order to increase his equity interest in
the Company to a level that the Committee deemed appropriate for his duties,
Mr. Wedaman was granted options to purchase 40,000 shares of the Company's
common stock pursuant to the 1995 Plan at an exercise price equal to $16.125,
the last sale price on December 29, 1995. These options vest over five years
and expire ten years after the date of grant if not exercised by such time.
In 1990, Mr. Wedaman was granted stock appreciation rights with respect
to 7,000 shares of the Company's common stock. The stock appreciation rights
provide for cash payments to holders of the rights for increases in the market
prices of the Company's common stock as of April 1 of each year. The adjusted
base price as of April 1, 1995 was $17.25 per share, resulting in a payment of
$21,875 to Mr. Wedaman under this program in 1995. The base price is adjusted
each April 1 if the market closing price on that date is greater than the
previous base price.
- 11 -
<PAGE> 14
CEO COMPENSATION
As with all executive officers of the Company, the compensation of the
CEO is reviewed by the Committee on a regular basis in comparison to
compensation paid to executives holding comparable positions of responsibility,
including those employed at Peer Group companies. The Committee considers the
same factors when determining CEO compensation as it does when it sets
compensation of the Company's other executive officers. Based on such review,
Mr. Matney's base salary in 1995 remained at the level set at the time of the
Asset Sale. Mr. Matney was not granted any stock options supplemental to those
granted previously in connection with the Asset Sale.
Pursuant to his employment agreement, as amended, Mr. Matney is paid two
annual cash bonuses, neither of which is to exceed half of his base salary.
The first bonus is an amount equal to his base salary multiplied by that
percentage of his base salary by which consolidated income from continuing
operations before income taxes exceeded $5,249,000. For 1995, that percentage
was 53%, resulting in a 50% bonus to Mr. Matney. The base for this calculation
is increased 25% each year. For any fiscal year during which a 25% increase in
consolidated income from continuing operations before income tax is not
attained, this bonus is not paid. The second bonus is an amount equal to his
base salary multiplied by the percentage increase (if any) in the Company's
stock price per share in excess of the increase in the stock price per share of
the Peer Group measured from July 1 to June 30. Thus, approximately 50% of Mr.
Matney's potential bonus is directly related to the Company's shareholder
return as compared with the shareholder returns of the Peer Group. For 1995,
this second bonus computation resulted in no additional bonus for Mr. Matney.
The Committee has not yet adopted a policy with respect to the $1,000,000
limitation of deductibility of executive compensation under Section 162(m) of
the Internal Revenue Code of 1986, as amended, since current compensation
levels fall well below that amount. The Committee does not expect that the
compensation of its executives will reach that threshold in the foreseeable
future.
Douglass Wm. List William E. Greenwood Jay U. Sterling, Ph.D.
PERFORMANCE GRAPH
The following chart compares cumulative total stockholder returns,
assuming the investment of $100 on December 31, 1990: (i) in the Company's
common stock; (ii) in the Nasdaq Stock Market - U.S. Index and (iii) in the
Nasdaq Trucking and Transportation Index. Total return assumes reinvestment of
dividends for the indexes. The Company has never paid dividends on its common
stock and has no plans to do so.
<TABLE>
<CAPTION>
MARK VII, INC. NASDAQ STOCK MARKETS-US NASDAQ TRUCKING & TRANSPORTATION
-------------- ----------------------- --------------------------------
<S> <C> <C> <C>
12/90 100 100 100
12/91 187 161 145
12/92 200 187 178
12/93 313 215 216
12/94 300 210 196
12/95 430 296 223
</TABLE>
The Company will provide to shareholders, without charge, a list of the
component companies in the Nasdaq Trucking and Transportation Index. Requests
for the list should be addressed to Mark VII, Inc., 965 Ridge Lake Boulevard,
Suite 103, Memphis, Tennessee, Attention: Carol Clement, Manager of Financial
Reporting.
- 12 -
<PAGE> 15
PROPOSAL NO. 2 - PROPOSAL TO REINCORPORATE IN DELAWARE
GENERAL
The Board of Directors has unanimously approved, and for the reasons
discussed below, unanimously recommends that the shareholders approve, a change
of the state of incorporation of the Company from Missouri to Delaware.
SHAREHOLDERS ARE URGED TO READ CAREFULLY THE FOLLOWING SECTIONS OF THIS PROXY
STATEMENT, INCLUDING THE RELATED ANNEXES, BEFORE VOTING ON THE PROPOSED
REINCORPORATION. In the following discussion of the proposed Reincorporation,
the term "Mark VII Missouri" refers to the existing Missouri corporation, the
term "Mark VII Delaware" refers to the new Delaware corporation which is the
proposed successor to Mark VII Missouri, and the term "the Company" includes
either or both without regard to the state of incorporation.
The proposed Reincorporation will be effected by merging Mark VII
Missouri into Mark VII Delaware, which was recently incorporated as a
wholly-owned subsidiary of Mark VII Missouri for purposes of the merger, with
Mark VII Delaware as the surviving corporation. In the Reincorporation, all
outstanding shares of the common stock of Mark VII Missouri (the "Mark VII
Missouri Common Stock") will be automatically converted, on a share-for-share
basis, into comparable shares of common stock, par value $.10 per share, of
Mark VII Delaware (the "Mark VII Delaware Common Stock").
The principal purpose of this proposal is to have the Company governed by
Delaware law which offers more certainty than Missouri law with respect to the
conduct of the Company's legal affairs. The proposed Reincorporation will
effect a change in the legal domicile of the Company and other changes of a
legal nature, some of which are described in this Proxy Statement. However,
the Reincorporation will not result in any significant change in the name,
business, management, location of the principal executive offices, assets,
liabilities or net worth of the Company.
The Reincorporation proposal is not being proposed for approval by the
Company's shareholders in order to prevent any known attempt to acquire control
of the Company by means of a merger, tender offer solicitation in opposition to
management or otherwise, to obtain representation on the Board of Directors or
to take any significant action affecting the Company. However, certain effects
of the proposed Reincorporation may be considered to have antitakeover
implications. If the Reincorporation is approved, the Comany will be governed
by the Certificate of Incorporation and Bylaws of Mark VII Delaware which
contain certain provisions not included in the Articles of Incorporation and
Bylaws of Mark VII Missouri that may have an antitakeover effect. These
provisions are: (i) a classified board of directors; (ii) the inability of the
shareholders to remove directors without cause; (iii) advance notice procedures
to nominate candidates for election as directors and to bring proposals before
a shareholders meeting; and (iv) the inability of the shareholders to call a
special meeting of shareholders. These provisions may have the effect of
making it more difficult for an unsolicited acquirer to gain control of the
Company in that it will be more difficult to change the composition of the
Board of Directors and to bring proposals before shareholder meetings. The
Board of Directors has no current intention to propose measures that could have
the effect of discouraging takeovers other than those proposed in this Proxy
Statement. For additional information see "Antitakeover Effects of the
Reincorporation" below.
The affirmative vote of the holders of two-thirds of the issued and
outstanding shares of Mark VII Missouri Common Stock will be required to
approve the Reincorporation. If approved by the shareholders, it is
anticipated the Reincorporation will be completed as soon as practicable after
the Annual Meeting. However, the Reincorporation may be abandoned or delayed,
either before or after shareholder approval, if circumstances arise which, in
the opinion of the Board of Directors, make it inadvisable to proceed.
Dissenters' rights of appraisal will not be available to shareholders of the
Company in connection with the proposed Reincorporation.
PRINCIPAL REASON FOR THE REINCORPORATION
The Board of Directors believes there are benefits to the Company and its
shareholders in changing the state of incorporation of the Company from
Missouri to Delaware and consequently becoming subject to a better known and
more clearly defined body of corporate law which will afford the Company the
flexibility and certainty it needs to operate effectively and efficiently.
Delaware has followed a policy of encouraging incorporation in that state for
many years and, in furtherance of that policy, has adopted comprehensive,
modern and flexible corporate laws which are periodically updated and revised
to meet changing business needs. As a result, many major corporations have
initially chosen Delaware for their domicile or have subsequently
reincorporated in Delaware in a manner similar to that proposed by the Company.
Because Delaware is the state of incorporation for many corporations, the
Delaware judiciary has acquired significant expertise in dealing with corporate
issues, and a substantial number of decisions have been rendered construing
Delaware law and establishing public policies with respect to corporate legal
affairs. As a consequence, Delaware corporate law has been, and is likely to
continue to be, interpreted and explained more thoroughly than is the case with
Missouri corporate law, thus tending to assure a significant measure of
certainty to legal aspects of the conduct of the Company's business and a sound
basis for its planning.
POSSIBLE DISADVANTAGES OF THE REINCORPORATION
Although the Board of Directors unanimously believes that the proposed
Reincorporation is in the best interests of the Company and its shareholders,
it should be noted that Delaware law has been criticized by some commentators
on the grounds that it does not afford minority shareholders the same
substantive rights and protections as are available in a number of other
states. For a comparison of shareholders' rights and the powers of management
under Delaware law and Missouri law, see "Differences In Corporation Laws"
below.
Despite the unanimous belief of the Board of Directors as to the benefits
to shareholders of the Company of the proposed Reincorporation, certain aspects
of the proposed Reincorporation may be disadvantageous to the extent that such
aspects have the effect of discouraging a future takeover attempt that is not
approved by the Board of Directors, but that may be deemed by a majority of the
Company's shareholders to be in their best interests (because, for example, the
possible takeover could cause shareholders to receive a substantial premium for
their shares over their then current market value or over the shareholders'
cost basis in such shares). In addition, to the extent that
- 13 -
<PAGE> 16
the proposed Reincorporation will enable the Board of Directors to resist a
takeover or a change in control of the Company, the Reincorporation could make
it difficult to change the existing Board of Directors and management of the
Company. See "Antitakeover Effects of the Reincorporation" below.
MECHANICS OF THE REINCORPORATION; MERGER AGREEMENT
The proposed Reincorporation will be effected by merging Mark VII
Missouri into Mark VII Delaware (the "Merger"), which is to be effected in
accordance with the terms of an Agreement and Plan of Merger, a copy of which
is attached to this Proxy Statement as Annex A (the "Merger Agreement"). Under
the terms of the Merger Agreement, upon completion of the Merger, (i) Mark VII
Missouri will cease to exist, (ii) Mark VII Delaware will be the surviving
corporation and will operate the business of the Company under the same name,
"Mark VII, Inc.," (iii) the shareholders of Mark VII Missouri automatically
will become the shareholders of Mark VII Delaware, (iv) the shareholders'
rights, as shareholders of Mark VII Delaware and no longer as shareholders of
Mark VII Missouri, will be governed by Delaware law and the Certificate of
Incorporation and Bylaws of Mark VII Delaware, copies of which are attached
hereto as Annex B and Annex C, respectively, (v) all options and rights to
purchase shares of Mark VII Missouri Common Stock automatically will be
converted into options or rights to acquire an equal number of equivalent
shares of Mark VII Delaware Common Stock, (vi) no change will occur in the
physical location, business, management, assets, liabilities or net worth of
the Company and (vii) the incumbent directors and officers of Mark VII Missouri
will serve in their respective capacities as directors and officers of Mark VII
Delaware.
Pursuant to the Merger Agreement, on the effective date of the Merger,
each outstanding share of Mark VII Missouri Common Stock will automatically be
converted into one share of Mark VII Delaware Common Stock. All of the rights,
powers, privileges and limitations of the Mark VII Delaware Common Stock will
be identical to such rights, powers, privileges and limitations currently
existing with respect to each share of Mark VII Missouri Common Stock. Each
outstanding certificate representing shares of Mark VII Missouri Common Stock
will continue to represent the same number of shares of Mark VII Delaware
Common Stock. IT WILL NOT BE NECESSARY FOR SHAREHOLDERS OF THE COMPANY TO
EXCHANGE THEIR EXISTING STOCK CERTIFICATES FOR STOCK CERTIFICATES OF MARK VII
DELAWARE. Shareholders may, however, exchange their certificates if they so
choose. The Mark VII Missouri Common Stock is listed for trading on the Nasdaq
National Market. Before the Merger, the shares of Mark VII Delaware Common
Stock will be prequalified for such listing on the Nasdaq National Market under
the same symbol ("MVII") as the shares of Mark VII Missouri Common Stock are
currently traded on the Nasdaq National Market. After the Merger, shares of
Mark VII Delaware Common Stock will be traded on the Nasdaq National Market
without any interruption having occurred to the trading of the Mark VII
Missouri Common Stock because of the Merger. There are no dividends in arrears
or defaults in principal or interest with respect to any securities of the
Company.
As part of the proposed Reincorporation, Mark VII Delaware will assume
all of the obligations of Mark VII Missouri under the 1995 Plan, the ISO Plan
and the NQSO Plan (collectively, the "Plans"). If the Merger is approved,
outstanding options to purchase Mark VII Missouri Common Stock assumed under
the Plans will be exercisable for equivalent shares of Mark VII Delaware Common
Stock, and all parties having participated in the Plans and holding such
options will be entitled to purchase shares of Mark VII Delaware Common Stock.
As part of the proposed Reincorporation, Mark VII Delaware also will assume all
other employee benefit plans and arrangements of Mark VII Missouri. The
shareholders' approval of the Merger will constitute their approval of the
assumption by Mark VII Delaware of the Plans and all other employee benefit
plans and arrangements of Mark VII Missouri.
The Reincorporation will not result in any change to the daily business
operations of the Company or the present location of the principal executive
offices of the Company. Under generally accepted accounting principles, the
Reincorporation will not result in any gain or loss to Mark VII Missouri or
Mark VII Delaware. The consolidated financial condition and results of
operations of Mark VII Delaware immediately after the Merger will be identical
to that of Mark VII Missouri immediately prior to the Merger. Mark VII
Delaware will succeed to all of the business, operations, properties and assets
of Mark VII Missouri and will assume and become responsible for all of Mark VII
Missouri's liabilities and obligations, without any changes in amounts or
classifications. The Merger will not result in any change in the name,
business, operations, properties, management or capitalization of the Company.
The directors and officers serving Mark VII Missouri in such capacities
immediately prior to the effective date of the Merger will hold the same
offices with Mark VII Delaware immediately after the effective date of the
merger.
In accordance with Missouri law, the affirmative vote of the holders of
at least two-thirds of the outstanding shares of Mark VII Missouri Common Stock
is required for approval of the Merger Agreement and the other terms of the
proposed Reincorporation. Other than this voting provision, there are no
federal or state regulatory requirements with which the Company must comply.
- 14 -
<PAGE> 17
The Merger will be consummated as soon as practicable after the
shareholders approve the Merger Agreement and the other terms of the proposed
Reincorporation. However, pursuant to the provisions of Missouri law and the
Merger Agreement, the Merger may be abandoned or delayed, either before or
after shareholder approval has been obtained, if in the opinion of the Board of
Directors circumstances arise which make proceeding with the Merger
inadvisable.
The discussion set forth below regarding the effects of the Merger on the
rights of the Company's shareholders is qualified in its entirety by reference
to the Merger Agreement, the Certificate of Incorporation of Mark VII Delaware
and the Bylaws of Mark VII Delaware, attached to this Proxy Statement as
Annexes A, B and C, respectively, and by reference to The General and Business
Corporation Law of Missouri ("Missouri Law") and the General Corporation Law of
the State of Delaware ("Delaware Law").
APPROVAL BY SHAREHOLDERS OF THE PROPOSED REINCORPORATION WILL CONSTITUTE
APPROVAL OF THE MERGER AGREEMENT, THE CERTIFICATE OF INCORPORATION OF MARK VII
DELAWARE AND THE BYLAWS OF MARK VII DELAWARE.
SIGNIFICANT DIFFERENCES IN CORPORATION LAWS
As a result of the Reincorporation, shareholders of Mark VII Missouri,
whose rights are currently governed by Missouri Law, will become shareholders
of Mark VII Delaware, with their rights governed by Delaware Law. The statutes
and court decisions with respect to rights of shareholders of corporations
incorporated under the laws of those two jurisdictions reflect a number of
differences.
The following discussion is intended only to highlight certain
significant statutory differences between the rights of holders of Mark VII
Missouri Common Stock as compared to the rights of holders of Mark VII Delaware
Common Stock that will occur if the proposed Reincorporation is approved by the
shareholders. The discussion does not purport to constitute a detailed
comparison of the provisions of Missouri Law and Delaware Law. Shareholders
are referred to those laws for a definitive treatment of the subject.
Certain significant statutory differences between Missouri Law and
Delaware Law which affect the rights of shareholders are as follows:
(1) Shareholder Vote for Mergers and for Dispositions of Assets.
In the area of mergers or other corporate reorganizations, and dispositions of
corporate assets, Delaware Law differs from Missouri Law in a number of
respects. Corporations incorporated under Delaware Law must obtain the
affirmative vote (except as indicated below) of the holders of a majority of
the outstanding shares of the corporation entitled to vote thereon to approve
(i) a merger of the corporation with or into another corporation, (ii) a sale
or other disposition of all, or substantially all, of the corporation's assets
or (iii) a voluntary dissolution of the corporation. In the same situations,
Missouri Law requires the approval of two-thirds of the outstanding shares
entitled to vote thereon. In addition, Delaware Law requires the approval and
recommendation of the board of directors of a corporation for a merger or for a
sale or other disposition of all, or substantially all, of a corporation's
assets. Missouri Law does not require prior board of director approval for
such actions, except for a merger.
Delaware Law does not require a shareholder vote of the surviving
corporation in a merger if (i) the merger agreement does not amend the
existing certificate of incorporation, (ii) each outstanding share of the
surviving corporation before the merger is unchanged, and (iii) the number of
shares to be issued in the merger does not exceed 20% of the shares outstanding
immediately prior to such issuance. Missouri Law has no such exception.
(2) Dissenters' Appraisal Rights. Generally, Missouri Law gives
dissenters' rights of appraisal in more situations than does Delaware Law.
Both Delaware Law and Missouri Law provide such rights to shareholders entitled
to vote in merger transactions (except as indicated below). Missouri Law also
provides for such rights in a sale of all, or substantially all, of the assets
of a corporation, whereas Delaware Law does not.
Delaware Law does not recognize dissenters' rights of appraisal in a
merger or consolidation if the dissenting shares of the corporation are either
listed on a national securities exchange or held of record by more than 2,000
shareholders, or if the corporation is the surviving corporation and no vote of
its shareholders is required, subject to certain exceptions. Missouri Law has
no such exception.
Neither Delaware Law nor Missouri Law provides for dissenters' rights of
appraisal in a merger of a parent corporation into a wholly-owned subsidiary.
Therefore, the shareholders of Mark VII Missouri will not have dissenters'
rights of appraisal with respect to the Merger.
- 15 -
<PAGE> 18
(3) Election of Directors. Under Missouri Law, unless a
corporation's articles of incorporation or bylaws provide otherwise, directors
are elected by a majority vote of the shares entitled to vote thereon and
represented in person or by proxy. Under Delaware Law, unless a corporation's
certificate of incorporation or bylaws provide otherwise, directors are elected
by a plurality (a number greater than those cast for any other candidates) of
the votes cast, in person or by proxy, and entitled to vote thereon. The
Bylaws of Mark VII Delaware provide that shareholder votes in elections of
directors shall be in accordance with Delaware Law. Thus, if the
Reincorporation is approved, directors shall be elected by a plurality of the
votes cast rather than by a majority vote of the shares entitled to vote
thereon and represented in person or by proxy, as is currently the case under
the Bylaws of Mark VII Missouri.
(4) Removal of Directors. Under Missouri Law, unless a
corporation's articles of incorporation or bylaws provide otherwise, a director
may be removed without cause by shareholder vote; provided, however, that if
the shareholders of such corporation have cumulative voting rights in elections
of directors, if less than the entire board is to be removed, no one director
may be removed if the votes cast against his or her removal would be sufficient
to elect him or her if cumulatively voted at an election of the entire board of
directors. Delaware Law differs from Missouri Law only with respect to a
classified board of directors. Under Delaware Law, a director of a corporation
with a classified board of directors can be removed only for cause, unless the
corporation's certificate of incorporation otherwise provides. Missouri law
has no such provision. The Certificate of Incorporation of Mark VII Delaware
provides that directors may be removed only for cause. Thus, if the
Reincorporation is approved by the shareholders of the Company, a director may
only be removed by the shareholders of the Company for cause.
(5) Cumulative Voting. Under Delaware Law, cumulative voting in
the election of directors is not mandatory by statute but is permitted if
included in the corporation's certificate of incorporation. Under Missouri
Law, cumulative voting in the election of directors is mandatory unless
otherwise provided in the corporation's articles of incorporation or bylaws.
Shareholders of Mark VII Missouri do not currently have cumulative voting
rights in elections of directors. This will not change in the Reincorporation
because the Certificate of Incorporation of Mark VII Delaware does not provide
for cumulative voting in the election of directors.
(6) Preemptive Rights. Under Delaware Law, a corporation's
shareholders do not have the preemptive right to acquire additional shares of
the corporation's capital stock, unless such right is expressly granted in the
corporation's certificate of incorporation. Under Missouri Law, a
corporation's shareholders have the preemptive right to acquire additional
shares of the corporation's capital stock, unless such right is limited or
denied by the corporation's articles of incorporation. Shareholders of Mark
VII Missouri do not currently have preemptive rights with respect to additional
issuances of capital stock by the Company. This will not change in the
Reincorporation because the Certificate of Incorporation of Mark VII Delaware
does not provide for preemptive rights for shareholders.
(7) Inspection of Shareholders' List and Books and Records.
Missouri Law provides for an absolute right of inspection by a shareholder of
the shareholders' list and books and records of the corporation. Delaware Law
allows any shareholder to inspect the list of shareholders entitled to vote at
a meeting for any purpose germane to the meeting and to inspect the
shareholders' list and books and records of the corporation for a proper
purpose. The Delaware courts have defined proper purpose as one reasonably
related to such person's interest as a shareholder.
(8) Limitation of Directors' Liability. Delaware Law permits
provisions in a corporation's certificate of incorporation that eliminate or
limit personal liability of directors for monetary damages for fiduciary
breaches of care except where a director breaches a duty of loyalty, fails to
act in good faith, engages in intentional misconduct, knowingly violates a law,
pays an unlawful dividend or approves an illegal stock repurchase, or obtains
an improper personal benefit. Missouri Law does not provide for such
provisions. The Certificate of Incorporation of Mark VII Delaware contains a
provision limiting the personal liability of its directors to the full extent
provided under Delaware Law. It should be noted that, although the Board of
Directors believes the limitation of personal liability of directors will
enhance the ability of the Company to attract and retain outstanding members
for its Board of Directors, there may be an inherent conflict of interest in
the desire of the Board of Directors to have the benefit of such limitation of
personal liability.
(9) Shareholder Action without a Meeting. Under Missouri Law,
shareholders of a corporation may take action without a meeting on any matter
required, or permitted, to be taken at any annual or special meeting, by
written consent of the holders of all of the corporation's outstanding shares
entitled to vote. Under Delaware Law, unless a corporation's certificate of
incorporation provides otherwise, shareholders of a corporation may take action
without a meeting on any matter required, or permitted, to be taken at an
annual or special meeting, by written consent of not less than the holders of
the number of the corporation's outstanding shares entitled to vote that is
required to adopt the action being taken. The Certificate of Incorporation of
Mark VII Delaware provides that shareholders may act without a meeting by
written consent of the holders of all of the corporation's outstanding shares
entitled to vote. This is not a change from the current right of Mark VII
Missouri shareholders to act without a meeting.
(10) Voting Requirements for Business Combinations. Unless a
corporation's certificate of incorporation provides otherwise, under Delaware
Law a corporation is prohibited from engaging in any "business combination"
- 16 -
<PAGE> 19
(defined to include generally any merger or consolidation, any sale, exchange
or other disposition of 10% or more of the aggregate market value of the assets
or stock of the corporation or certain issuances of any stock of the
corporation) with an "interested shareholder" (defined generally as a person
owning 15% or more of the corporation's voting stock) for a period of three
years following the date that such person becomes an interested shareholder.
This three-year moratorium does not apply if certain conditions are met.
Under Missouri Law, a corporation is prohibited from engaging in any
"business combination" (defined to include generally a merger or consolidation,
a sale, exchange or other disposition of 10% or more of the aggregate market
value of all assets or stock of the corporation, any issuance of capital stock
of the corporation amounting to 5% or more of the aggregate market value of all
assets or stock of the corporation, or certain other transactions which have
the effect of disproportionately increasing the share ownership) with an
"interested shareholder" (defined generally as the beneficial owner of at least
20% of the corporation's voting stock) for five years following the date such
person becomes an interested shareholder, unless certain conditions are met.
Neither the Articles of Incorporation or the Bylaws of Mark VII Missouri
nor the Certificate of Incorporation or the Bylaws of Mark VII Delaware address
the voting rights of shareholders in "business combinations". Thus, if the
Reincorporation is approved, voting rights of shareholders with respect to
"business combinations" will be governed by the provisions of Delaware Law
rather than Missouri Law.
(11) Control Share Acquisition Statute. Missouri Law contains a
control share acquisition statute, which generally provides that any person or
group of persons that acquires the power to vote more than specified levels
(one-fifth, one-third or a majority) of the shares of certain Missouri
corporations in transactions not approved by the corporation's board of
directors will not have the right to vote such shares unless voting rights are
granted by the affirmative vote of a majority of shares entitled to vote,
excluding "interested shares." Interested shares generally are those shares
held by the acquiring person, officers of the corporation and employees of the
corporation who are also directors of the corporation.
Delaware Law does not have a control share acquisition statute. Although
the Articles of Incorporation of Mark VII Missouri expressly state that the
Missouri control share acquisition statute does not apply to the Company, it
could become applicable in the future by amendment of the Articles of
Incorporation. If the Reincorporation is approved, however, this provision
will not be available under Delaware Law by amendment of the Certificate of
Incorporation of Mark VII Delaware or otherwise.
DIFFERENCES IN CORPORATE CHARTERS AND BYLAWS
The Certificate of Incorporation and Bylaws of Mark VII Delaware contain
several provisions which are not contained in, or differ from similar
provisions contained in, the Articles of Incorporation and Bylaws of Mark VII
Missouri. These provisions are intended to enhance the stability and
continuity of the management of the Company and to promote orderly and
consistent presentation of matters to be considered at meetings of
shareholders. However, these provisions could also have the effect of
discouraging an unsolicited attempt to gain control of or acquire the Company.
See "Antitakeover Effects of the Reincorporation" below.
(1) Classified Board of Directors. The Articles of Incorporation
of Mark VII Missouri do not currently provide for a classified Board of
Directors. The Certificate of Incorporation of Mark VII Delaware provides for
three classes of directors, with one-third of the directors being elected each
year. If the proposed Reincorporation is approved by the shareholders, the
Board of Directors will be divided into three classes, each class consisting,
as nearly as possible, of one-third of the total number of directors, with each
class having a three-year term. As discussed in Proposal No. 1, if the
Reincorporation is approved, the Board intends to place James T. Graves and
Thomas J. Fitzgerald in a class of directors whose term of office will expire
in 1997, J. Michael Head, David H. Wedaman and Dr. Jay U. Sterling in a class
whose term of office will expire in 1998 and R.C. Matney, Douglass Wm. List and
William E. Greenwood in a class whose term of office will expire in 1999.
(2) Shareholder Power to Call Special Shareholders Meeting. Under
Delaware Law and Missouri Law, special meetings of the shareholders may be
called by the Board of Directors or by such person or persons as may be
authorized by the certificate of incorporation or articles of incorporation, as
the case may be, or by the bylaws. Mark VII Missouri's Bylaws currently
provide that the holders of not less than one-fifth of all the outstanding
shares entitled to vote at a special shareholders meeting have the right to
call such a meeting.
Under the Bylaws of Mark VII Delaware, a special meeting of shareholders
may be called by the President or by the Board of Directors. Thus, if the
Reincorporation is approved, the shareholders will no longer have the right to
call a special meeting of shareholders. This would mean that shareholders
could not force shareholder consideration of a proposal at a special meeting of
shareholders over the opposition of the Board of Directors by calling a special
meeting of the shareholders prior to such time as the Board of Directors
believes such consideration to be appropriate. The Board of Directors believes
the elimination of the right of shareholders to call a special meeting is
important for the proper consideration of shareholder proposals. The Board
believes that it is in the best position to determine those issues which are
properly the subject of a special meeting of shareholders. Although this has
the effect of precluding shareholder consideration of a proposal at a special
meeting of shareholders over opposition of the Board, the Board of Directors
believes that shareholders are provided a full opportunity to make
- 17 -
<PAGE> 20
proper proposals at duly convened shareholder meetings and to request that any
such proposal be presented for consideration to other shareholders in the
Company's annual proxy statement.
(3) Removal of Directors. The Bylaws of Mark VII Missouri
currently provide that a director may be removed without cause by a two-thirds
affirmative shareholder vote. The Certificate of Incorporation of Mark VII
Delaware provides for a classified board of directors. Accordingly, the Bylaws
of Mark VII Delaware provide that directors may be removed only for cause.
(4) Shareholder Nominations for Director and Proposals for Matters
to be Considered at the Annual Meeting. The Bylaws of Mark VII Missouri
currently do not address the issue of shareholder nominations for elections of
directors or shareholder proposals for matters to be considered at the annual
meeting of shareholders. The Bylaws of Mark VII Delaware set forth certain
requirements for shareholders to meet in order to submit nominations for
election of directors or proposals for consideration at the annual meeting of
shareholders. In order to submit a nomination(s) or proposal(s), a shareholder
must notify the Secretary of Mark VII Delaware of such nomination(s) or
proposal(s) not less than sixty 60 days prior to the first anniversary of the
preceding year's annual meeting (with certain exceptions if the annual meeting
to which such nomination(s) or proposal(s) is being submitted is advanced or
delayed). In addition, the notification must contain certain specific
information regarding the shareholder submitting the nomination(s) or
proposal(s) and regarding the person(s) being nominated or the proposal(s)
being submitted. If a special meeting of shareholders is called for the
purpose of electing director(s), shareholder nominations must be submitted not
later than the tenth day following the day on which a public announcement is
first made of the date of the special meeting and of the nominee(s) proposed by
the Board of Directors.
The Board of Directors believes it is important to the orderly conduct of
the annual meeting that these requirements with respect to director nominations
and shareholder proposals be instituted. The advance notice and information
requirement will facilitate full and fair review of each nomination and
proposal by the Company by making available to the Company time to review such
nominations and proposals. The Board believes that full and fair review of
each nomination and proposal is an integral part of corporate governance and is
in the best interests of the Company and its shareholders.
(5) Limitation of Personal Liability of Directors. As discussed
above, Missouri Law does not contain a provision permitting a corporation to
limit the personal liability of its directors. Delaware Law does contain such
a provision and, accordingly, for the reasons discussed above, the Certificate
of Incorporation of Mark VII Delaware includes a provision to limit the
personal liability of the Company's directors to the fullest extent permitted
under Delaware Law. See "Significant Differences in Corporation Laws" above.
(6) Inspection of Shareholders List and Corporate Records. As
discussed in "Significant Differences in Corporation Laws" above, the Bylaws of
Mark VII Missouri currently provide for the absolute right of the Company's
shareholders to inspect the shareholders list prepared for shareholders
meetings and the books and records of the Company for any reason. Under the
Bylaws of Mark VII Delaware, a shareholder will be permitted to inspect the
list of shareholders entitled to vote at a shareholders meeting for any reason
germane to the meeting and to inspect the books and records of the Company for
any reason reasonably related to such shareholder's interest as a shareholder.
ANTITAKEOVER EFFECTS OF THE REINCORPORATION
The Reincorporation proposal is not being proposed for approval by the
Company's shareholders in order to prevent any known attempt to acquire control
of the Company by means of a merger, tender offer solicitation in opposition to
management or otherwise, to obtain representation on the Board of Directors or
to take any significant action affecting the Company. However, certain effects
of the proposed Reincorporation may be considered to have antitakeover
implications. If the Reincorporation is approved, the Company will be governed
by the Certificate of Incorporation and Bylaws of Mark VII Delaware which
contain certain provisions not included in the Articles of Incorporation and
Bylaws of Mark VII Missouri that may have an antitakeover effect. These
provisions are: (i) a classified board of directors; (ii) the inability of the
shareholders to remove directors without cause; (iii) advance notice procedures
to nominate candidates for election as directors and to bring proposals before
a shareholders meeting; and (iv) the inability of the shareholders to call a
special meeting of the shareholders. These provisions may have the effect of
making it more difficult for an unsolicited acquirer to gain control of the
Company in that it will be more difficult to change the composition of the
Board of Directors and to bring proposals before shareholder meetings. The
Board of Directors has no current intention to propose measures that could have
the effect of discouraging takeovers other than those proposed in this Proxy
Statement.
The Board of Directors believes, notwithstanding the possible
antitakeover effects, that there are benefits to the Company and its
shareholders from these provisions in the Certificate of Incorporation and
Bylaws of the Company to the extent that such provisions have the effect of
making it more difficult for a potential acquirer to effect a takeover or
change in control of the Company without management's consent and the consent
of the Company's shareholders. The Board believes that unsolicited takeover
attempts may be unfair or disadvantageous
- 18 -
<PAGE> 21
to the Company and its shareholders because: (i) a non-negotiated takeover bid
may be timed to take advantage of temporarily depressed stock prices; (ii) a
non-negotiated takeover bid may be designed to foreclose or minimize the
possibility of more favorable competing bids; and (iii) a non-negotiated
takeover bid may involve the acquisition of only a controlling interest in the
Company's stock, without affording all shareholders the opportunity to receive
the same economic benefits. By contrast, in a transaction in which an acquirer
must negotiate with an independent board of directors, such board of directors
can and should take account of the underlying and long-term values of the
Company's assets, the possibilities for alternative transactions on more
favorable terms, the anticipated favorable developments in the Company's
business not yet reflected in the stock price and the equality of treatment of
all the Company's shareholders.
(1) Board of Director Classification. The Board of Directors
believes that a classified Board will facilitate continuity and stability of
leadership and policy by assuring that experienced personnel familiar with the
Company and its business will be on the Board at all times. The classification
of the Board of Directors is also intended to prevent precipitous changes in
the composition of the Board and the manner of its selection and, thereby, to
moderate those changes in the Company's policies, business strategies and
operations which the Board of Directors does not deem to be in the best
interests of the Company and its shareholders.
Although the Company knows of no events which would be likely to result
in such a change, the Board of Directors has determined that the use of certain
disruptive and potentially unfair tactics with a pretense to gain control of
corporations make adoption of a classified board a prudent measure for the
protection of the Company's shareholders. The classification of the Board of
Directors makes it a more time consuming process to change the majority control
of the Board of Directors and, thus, reduces the Company's vulnerability to
an unsolicited proposal to do so. The classification of the Board of Directors
is also intended to encourage persons seeking to acquire control of the Company
to initiate such an acquisition through arms'-length negotiations with Company
management and the Board of Directors, who would then be in a position to
negotiate a transaction which is fair to all of the Company's shareholders.
Under the Articles of Incorporation and Bylaws of Mark VII Missouri, it
currently takes one annual meeting to replace a majority of the directors.
Under the Certificate of Incorporation and Bylaws of Mark VII Delaware, it will
take two annual meetings to change the majority of the Company's directors.
This change in the amount of time required to replace a majority of the members
of the Board of Directors is not for the purpose of eliminating the voting
powers of any particular block of common stock or to frustrate accumulations of
such blocks. The Board of Directors believes that it is in the best interest
of the Company and its shareholders to ensure continuity of management despite
the absence of problems with respect to such continuity in the past.
(2) Director Removal for Cause. As discussed in the preceding
section, the Board of Directors believes that a stable management provides
benefits to the Company and its shareholders to the extent that continuity of
management provides continuity of decision making and consequently allows
increased long term planning. Further, a strengthened management structure
will allow the Company to make more efficient use of the experience of current
management and makes it more likely that the Company will not be without
experienced Directors. To this end, and as a function of the classification of
the Board of Directors, if the proposed Reincorporation is approved, directors
of the Company may be removed only for cause.
(3) Advance Notice for Shareholder Nominations and Proposals. The
Board of Directors is aware of an increasing number of shareholders who are
interested in making proposals for nominations for directors and other
businesses at the meetings of public companies, in general. The Board believes
that each such nomination and proposal is an integral part of corporate
governance and that each should receive full and fair review by means of a
process designed to provide each adequate review by the Company. The Board of
Directors believes that there are benefits to the Company and its shareholders
from the advance notice requirements to the extent that this proposal has the
effect of making available to the Company time to review shareholder
nominations and proposals fully. Accordingly, the Reincorporation will require
a shareholder interested in submitting a nomination or proposal to the Company
to notify the Secretary of the Company of such nomination or proposal not less
than sixty (60) days prior to the first anniversary of the preceding year's
annual meeting (with certain exceptions, if the annual meeting to which such
nominations or proposal is being submitted is advanced or delayed), and to
notify the Secretary of a nomination for director not later than the tenth day
following the public announcement of a special meeting called for the purpose
of electing directors. In addition, the notification must contain certain
specific information regarding the shareholder submitting the nomination or
proposal and regarding the person being nominated or the proposal being
submitted. This provision should help promote fully informed shareholder
decisions and the orderly conduct of the annual meeting.
(4) Shareholder Inability to Call a Special Meeting of
Shareholders. The Board of Directors believes the elimination of the right of
shareholders to call a special meeting of shareholders is important for the
proper consideration of shareholder proposals. The Board believes that it is
in the best position to determine those issues which are properly the subject
of a special meeting of shareholders. Although this has the effect of
precluding shareholder consideration of a proposal at a special meeting of
shareholders over opposition of the Board, the Board of Directors believes that
shareholders are provided a full opportunity to make proper proposals at duly
convened shareholder meetings and to request that any such proposal be
presented for consideration to other shareholders in the Company's annual proxy
statement. However, the elimination of the right of shareholders to call a
special meeting of shareholders could have the effect of making it more
difficult to attempt to obtain control of the Company or to acquire the Company
because a proposal to replace the Board of Directors or to acquire the Company
could be delayed until the next annual meeting of shareholders, unless a
special meeting is called by the Board of Directors.
(5) Combined Antitakeover Effects of the Reincorporation. Certain
aspects of the Reincorporation may be disadvantageous to shareholders of the
Company because such aspects may limit the shareholders' flexibility to
determine the composition of the Board of Directors or to make other changes,
even in circumstances where a
- 19 -
<PAGE> 22
majority of the shareholders may be dissatisfied with the performance of the
incumbent directors or otherwise desire to make changes. The provisions may
also discourage future attempts to acquire control of the Company even though a
majority of the shareholders might believe it is in their best interests or in
which they might receive a substantial premium. The provisions may enable the
Board to resist change and otherwise thwart the desires of a majority of the
shareholders. Under Delaware Law, however, the Board has a fiduciary duty to
act in the best interests of shareholders. This duty offsets to a great extent
the potential disadvantages to shareholders of any of the provisions.
FEDERAL TAX CONSEQUENCES OF THE MERGER
The Reincorporation is intended to qualify as a reorganization within the
meaning of Section 368 of the Internal Revenue Code of 1986, as amended (the
"Code"). Provided that the Reincorporation does so qualify under the Code, (i)
no gain or loss will be recognized by holders of Mark VII Missouri Common Stock
upon the receipt of shares of Mark VII Delaware Common Stock, (ii) no gain or
loss will be recognized to Mark VII Missouri or to Mark VII Delaware as a
result of the Reincorporation, (iii) Mark VII Delaware will succeed, without
adjustments, to the tax attributes of Mark VII Missouri, (iv) each shareholder
will have the same basis in the Mark VII Delaware Common Stock received (or
deemed to be received) by such shareholder as such shareholder had in the Mark
VII Missouri Common Stock held by such shareholder immediately prior to the
effective date of the Merger and (v) each shareholder's holding period for the
Mark VII Delaware Common Stock will include the period during which such
shareholder held the corresponding Mark VII Missouri Common Stock, provided the
Mark VII Missouri Common Stock was held as a capital asset at the time of the
merger.
In order for the Reincorporation to qualify as a reorganization under the
Code, certain requirements must be satisfied, including, without limitation,
the so-called "continuity of interest requirement." In order to satisfy the
continuity of interest requirement, holders of Mark VII Missouri Common Stock
must not, pursuant to a plan or intent existing at or prior to the
Reincorporation, dispose of or transfer so much of either (i) shares of Mark
VII Missouri Common Stock in anticipation of the Reincorporation or (ii) shares
of Mark VII Delaware Common Stock to be received in the Reincorporation, such
that the Mark VII Missouri shareholders, as a group, would no longer have a
significant equity interest in the business being conducted by Mark VII
Delaware after the Reincorporation.
VOTE REQUIRED
The affirmative vote of at least two-thirds of the outstanding shares of
common stock of the Company is required for the approval of the proposed
Reincorporation. A vote for the proposal will constitute specific approval of
the Merger Agreement and approval of all other documents, transactions and
proceedings related to the Reincorporation described in this Proxy Statement.
Proxies solicited by management will be voted "FOR" the proposal unless a vote
against the proposal or abstention is specifically indicated.
VOTE OF THE BOARD OF DIRECTORS OF MARK VII MISSOURI
The Board of Directors of Mark VII Missouri, after review of the above
proposal and for the reasons discussed above, unanimously approved the
Reincorporation of Mark VII Missouri to Delaware in the manner set forth above.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL.
- 20 -
<PAGE> 23
PROPOSAL NO. 3 - PROPOSAL TO APPROVE AN AMENDMENT OF THE
1995 OMNIBUS STOCK INCENTIVE PLAN
GENERAL
The Board of Directors has adopted, subject to shareholder approval,
Amendment No. 1 to the 1995 Plan ("Amendment No. 1"). If Amendment No. 1 is
approved by the shareholders, the 1995 Plan will be amended as follows:
(i) the first sentence of Article V will be amended to include
all employees of the Company as eligible participants under the 1995 Plan
rather than only employees who have executive, managerial, supervisory or
professional responsibilities;
(ii) Section 6.2(a) will be amended to provide that (x) the
exercise price set by the Plan Committee (as defined in the 1995 Plan) in
the case of non-qualified stock options shall not be less than 100% of
the Fair Market Value (as defined in the 1995 Plan) of the common stock
on the date of the grant of such non-qualified options, rather than the
current requirement that the exercise price for such non-qualified
options be established at not less than 85% of the Fair Market Value of
the common stock on the date of grant and (y) the exercise price of
stock options shall not be repriced once such options are granted; and
(iii) Section 9.3 will be amended to increase from 75 to 200
the number of shares awarded each quarter as compensation to each
Non-Employee Director (as defined in the 1995 Plan).
The affirmative vote of the holders of a majority of the issued and
outstanding shares of the Company's common stock present in person or
represented by proxy at the Annual Meeting and entitled to vote is required to
approve Amendment No 1.
The full text of the 1995 Plan, as amended by this proposal, is set
forth in Annex D attached to this Proxy Statement and the full text of
Amendment No. 1 is set forth in Annex E attached to this Proxy Statement.
The following summary of the provisions of Amendment No. 1 and the 1995 Plan,
as amended by this proposal, is qualified in its entirety by reference to the
1995 Plan and Amendment No. 1 as set forth in Annex D and Annex E,
respectively.
EFFECTS OF AMENDMENT NO. 1
(1) Increase in Eligible Employees. Article V of the 1995 Plan
currently provides that awards may be granted only to employees of the Company
who have executive, managerial, supervisory or professional responsibilities.
The 1995 Plan was designed to enable such personnel of the Company to acquire
or increase their ownership of the common stock of the Company on reasonable
terms. The opportunity so provided was intended to foster in participants a
strong incentive to put forth maximum effort for the continued success and
growth of the Company, to aide in retaining individuals who put forth such
efforts and to assist in attracting the best available individuals in the
future. Towards these objectives, the 1995 Plan provides for the granting of
stock options, restricted stock awards, performance share awards and other
incentive awards.
The Board of Directors of the Company believes that it is in the best
interests of the Company to include all employees of the Company as eligible
participants under the 1995 Plan. This change would permit the Company to
grant awards under the 1995 Plan to all employees as incentives to work toward
the success of the Company. This change would not add any new "insiders" (as
such term is defined for purposes of Section 16 of the Securities Exchange Act
of 1934, as amended, and the rules promulgated thereunder) as eligible
participants under the 1995 Plan because all such "insiders" are currently
eligible for awards. Furthermore, Amendment No. 1 would not increase the
number of shares of common stock available for awards under the 1995 Plan.
(2) Requirement of Fair Market Value as Lowest Possible Exercise
Price. Section 6.2(a) currently provides that the Plan Committee has the
discretion to grant non-qualified stock options with an exercise price equal to
or greater than 85% of the Fair Market Value of the common stock on the date of
grant of such non-qualified stock options. In addition, Section 6.2(a)
currently does not prohibit the Plan Committee from repricing the exercise
price of stock options subsequent to the date of the grant of such options.
Although not required by the 1995 Plan, the Plan Committee has maintained
a policy that the exercise price for any options to purchase shares of common
stock granted by the Company shall not be less than the Fair Market Value of
the common stock on the date of the grant of such options and that the exercise
price of such options shall not be repriced. If Proposal No. 3 is approved by
the shareholders, the 1995 Plan will provide that no
- 21 -
<PAGE> 24
stock option may be granted with an exercise price less than the Fair Market
Value of the common stock on the date of grant of such option and that the
exercise price of a stock option cannot be repriced once such option is
granted.
(3) Increase in Number of Non-Employee Director Shares. Section
9.3 currently provides for an automatic award of 75 shares of common stock to
each Non-Employee Director of the Company on the last day of each calendar
quarter during which such individual serves as a Non-Employee Director.
The Board of Directors believes that it is in the best interests of the
Company to increase the number of shares automatically granted to each
Non-Employee Director from the current 75 per calendar quarter to 200 per
calendar quarter. The shareholders approved the award of 75 shares of common
stock each calendar quarter to Non-Employee Directors pursuant to the 1995 Plan
as compensation for their services as directors of the Company at the 1995
annual meeting of shareholders of the Company. One of the objectives in
compensating Non-Employee Directors pursuant to the 1995 Plan in shares of
common stock is to link director compensation to shareholder returns. The
recommendation to increase the number of shares awarded each calendar quarter
from 75 to 200 is the result of an overall review by the Board of Directors of
all aspects of the Company's director compensation program. The Board believes
it is important for the long range success of the Company to continue to
attract and retain high quality individuals to serve as Non-Employee Directors
of the Company. The proposed increase in the number of Non-Employee Director
shares of common stock awarded each quarter is viewed by the Company as
important to its ability to maintain a competitive compensation package in
order to continue to attract and retain the most talented and qualified
individuals to serve as Non-Employee Directors.
SUMMARY OF THE 1995 PLAN, AS AMENDED
The 1995 Plan is designed to enable employees of the Company to
acquire or increase their ownership of the common stock of the Company on
reasonable terms. The opportunity so provided is intended to foster in
participants a strong incentive to put forth maximum effort for the continued
success and growth of the Company, to aide in retaining individuals who put
forth such efforts and to assist in attracting the best available individuals
in the future. Towards these objectives, the 1995 Plan provides for the
granting of stock options, restricted stock awards, performance share awards
and other incentive awards.
Administration. The 1995 Plan provides for administration by the
Compensation/Stock Option Committee of the Board, or another committee
designated by the Board, consisting of two or more disinterested directors (the
"Plan Committee"). Members of the Plan Committee may participate in the 1995
Plan, but only to the extent set forth below in the sections titled
"Non-Employee Director Options" and "Non-Employee Director Stock Awards."
Among the powers granted to the Plan Committee are the powers to interpret the
1995 Plan, establish rules and regulations for its operation, select employees
of the Company and its subsidiaries to receive awards and determine the timing,
form, amount and other terms and conditions pertaining to any award.
Eligibility for Participation. Awards may be granted under the 1995
Plan to any or all employees of the Company or a subsidiary of the Company.
Officers shall be employees for this purpose, whether or not they are also
directors. Awards may also be granted to directors who are not employees of
the Company or its subsidiaries, but only to the extent set forth below in the
sections titled "Non-Employee Director Options" and "Non-Employee Director
Stock Awards." The approximate number of employees who are eligible to
participate in the 1995 Plan as of April [___] is [____].
Type of Awards. The Plan provides for the granting of any or all of
the following types of awards: (i) stock options, including non-qualified
stock options and stock options intended to qualify as "incentive stock
options" under Section 422 of the Code, (ii) performance shares, (iii)
restricted common stock, (iv) common stock, and (v) any other incentive award
of, or based on, the Company's common stock which is established by the Plan
Committee and which is consistent with the 1995 Plan's purpose. The awards may
be granted singly, in combination or in tandem as determined by the Plan
Committee.
Amendment of 1995 Plan. The Company, through the Board, may suspend
or terminate the 1995 Plan. In addition, the Board may, from time to time,
amend the 1995 Plan in any manner, but may not, without shareholder approval,
adopt any amendment which would materially increase the aggregate number of
shares of common stock which may be issued under the 1995 Plan (except for
certain antidilution provisions specified in Article X of the 1995 Plan),
materially increase the benefits accruing to Insider Participants (as defined
in the 1995 Plan) or materially modify the 1995 Plan's eligibility
requirements. Notwithstanding the foregoing, certain amendments to the
provisions of the 1995 Plan governing non-employee director awards may not be
amended more than once every six months (even with shareholder approval), other
than to conform with changes in the Code, the Employee Retirement Income
Security Act of 1974, as amended, or the rules and regulations thereunder.
- 22 -
<PAGE> 25
Other Components of the 1995 Plan. The 1995 Plan authorizes the Plan
Committee to grant awards during the period beginning on the date the 1995 Plan
is approved by the shareholders until expiration of the 1995 Plan ten years
after such date. An aggregate of 600,000 shares of common stock is reserved
for use in connection with awards under the 1995 Plan. Any shares of common
stock related to awards which terminate by expiration, forfeiture, cancellation
or otherwise without the issuance of shares of common stock, are settled in
cash in lieu of common stock, or are exchanged in the Plan Committee's
discretion for awards not involving shares of common stock, will again be
available for use in connection with awards under the 1995 Plan.
Stock Options. Under the 1995 Plan, the Plan Committee may grant
awards in the form of options to purchase shares of the Company's common stock
(an "Option"). The Committee will, with regard to each Option, determine the
number of shares subject to the Option, the manner and time of the Option's
exercise, and the exercise price per share of stock subject to the Option. The
exercise price of an Option may, at the discretion of the Plan Committee, be
paid by a participant in cash, shares of the Company's common stock, a
combination thereof, or such other consideration as the Plan Committee may deem
appropriate. The Plan Committee may grant non-qualified options or incentive
stock options which satisfy the applicable requirements of Section 422 of the
Code.
Non-Employee Director Options. The 1995 Plan automatically grants an
option to purchase 2,000 shares of common stock to each person who is a
Non-Employee Director of the company on the date he or she becomes a
Non-Employee Director and, thereafter, on each May 17 occurring in a calendar
year subsequent to the year in which he or she becomes a Non- Employee Director
if he or she continues to serve in such capacity on each such anniversary.
Each Director Option (as defined in the 1995 Plan) is exercisable immediately
with respect to the shares to which it relates. The exercise price per share
shall be equal to the Fair Market Value, which is the last sale price per share
on the Nasdaq Stock Market of one share of common stock on the date the
Director Option is granted. The period within which each such option may be
exercised shall expire three years from the date the option is granted, unless
it expires sooner due to the death of the optionee, or is fully exercised prior
to the end of such three year period. Payment of the option price may be paid
in full in cash or by check, bank draft or money order payable to the order of
the Company concurrently with the exercise of the option. Director Options
shall be forfeited if the directorship of an optionee is terminated on account
of any act of fraud, intentional misrepresentation, embezzlement,
misappropriation or conversion of assets or opportunities of the Company or any
of its subsidiaries.
Performance Shares. The 1995 Plan also allows for the granting of
performance shares. Under the 1995 Plan, "Performance Share Award" means units
which are expressed in terms of common stock of the Company. Such awards will
be contingent upon the attainment over a period to be determined by the Plan
Committee of certain performance objectives. The performance objectives to be
achieved during a performance period and the measure of whether and to what
degree such objectives have been attained will also be determined by the Plan
Committee.
Restricted Stock Awards. The 1995 Plan authorizes the Plan Committee
to grant awards in the form of restricted shares of the Company's common stock
("Restricted Stock Awards"). Such awards will be subject to such terms,
conditions, restrictions and/or limitations, if any, as the Plan Committee
deems appropriate including, but not limited to, restrictions on
transferability and continued employment.
Other Incentive Awards. Under the 1995 Plan, the Plan Committee also
has the discretion to grant other types of awards under which the Company's
common stock is or may in the future be acquired by a participant. Such awards
may include grants of debt securities convertible into or exchangeable for
shares of the Company's common stock upon the attainment of performance goals
or such other conditions as the Plan Committee shall determine.
Non-Employee Director Stock Awards. An award of 200 shares of the
Company's common stock shall be automatically awarded (i) on the last day of
June each year to each person who is a Non-Employee Director on such date and
(ii) on the last day of each subsequent calendar quarter during which such
individual has continued to serve as a Non-Employee Director ("Director Stock
Awards"). An individual who becomes a Non-Employee Director subsequent to May
22, 1996 shall be awarded 200 shares of common stock on the last day of each
calendar quarter during which such individual serves as a Non-Employee
Director.
Other Terms of Awards. Options will be exercisable for, and
Restricted Stock Awards will be made in, common stock of the Company.
Performance Share Awards may be paid in cash, common stock or a combination of
cash and common stock, as the Plan Committee shall determine. If an award is
granted in the form of a Restricted Stock Award, Option or Performance Share
Award, the Plan Committee may include as part of such award an entitlement to
receive dividends or dividend equivalents.
The 1995 Plan provides for the forfeiture of awards under certain
circumstances as determined by the Plan Committee. The 1995 Plan authorizes
the Plan Committee to promulgate administrative guidelines for the purpose
- 23 -
<PAGE> 26
of determining what treatment will be afforded to a participant under the 1995
Plan in the event of his death, disability, retirement or termination for an
approved reason.
Upon granting of any award, the Plan Committee may, by way of an award
notice or otherwise, establish such other terms, conditions, restrictions
and/or limitations governing the granting of such award as are not inconsistent
with the 1995 Plan. In addition, the Plan Committee may modify the terms and
conditions of awards under certain circumstances.
Change of Control Event. Upon the occurrence of a Change of Control
Event (as defined in the 1995 Plan), a participant may be entitled to the
following treatment: (i) all of the participant's outstanding awards would
become immediately vested, fully earned, exercisable, and/or in the case of
Options, converted into stock appreciation rights, as appropriate, and (ii) the
Company would make full payment to each such participant with respect to any
Performance Share Award, stock appreciation right or other incentive award,
deliver certificates to such participant with respect to each Restricted Stock
Award and permit the exercise of Options, respectively, granted to such
participant.
Federal Tax Treatment. Under current federal tax law, the following
are the federal tax consequences generally arising with respect to awards under
the 1995 Plan.
A participant who is granted an incentive stock option does not
realize any taxable income at the time of the grant or at the time of exercise.
Similarly, the Company is not entitled to any deduction at the time of grant or
at the time of exercise. If the participant makes no disposition of the shares
acquired pursuant to an incentive stock option before the later of two years
from the date of grant of such option and one year of the transfer of such
shares to him, any gain or loss realized on a subsequent disposition of the
shares will be treated as a long-term capital gain or loss. Under such
circumstances, the Company will not be entitled to any deduction for federal
income tax purposes. Conversely, if the participant disposes of shares of
common stock acquired pursuant to an incentive stock option before the later of
two years after the date of grant of such option and one year after the
transfer of such shares to him, any gain or loss realized will be treated as
ordinary income and the Company will be entitled to a deduction for federal
income tax purposes.
A participant who is granted a non-qualified stock option does not
have taxable income at the time of grant, but does have taxable income at the
time of exercise equal to the difference between the exercise price of the
shares acquired pursuant to such option and the market value of the shares on
the date of exercise. The Company is entitled to a corresponding deduction for
federal income tax purposes in the same amount.
A participant who has been granted a Performance Share Award will not
realize taxable income at the time of the grant, and the Company will not be
entitled to a deduction at such time. A participant will realize ordinary
income at the time the award is paid and the Company will have a corresponding
deduction.
A participant who has been granted a Restricted Stock Award generally
will not realize taxable income at the time of the grant, and the Company will
not be entitled to a deduction at the time of the grant, assuming that the
restrictions constitute a substantial risk of forfeiture for federal income tax
purposes. When such restrictions lapse, the participant will realize taxable
income in an amount equal to the excess of the fair market value of the shares
at such time over the amount, if any, paid for such shares. The Company will
be entitled to a corresponding deduction. Although a recipient of a Restricted
Stock Award is not normally taxed at the time of grant, such recipient may
elect under Section 83(b) of the Code to pay income tax at that time. In such
a case, the recipient will recognize taxable income in an amount equal to the
excess of the fair market value of the shares at the time of grant over the
amount, if any, paid for such shares. The Company will be entitled to a
corresponding deduction at such time.
The award of an outright grant of non-restricted common stock to a
participant will produce immediate tax consequences for both the participant
and the Company. The participant will be treated as having received taxable
compensation in an amount equal to the then fair market value of the common
stock distributed to him. The Company will receive a corresponding deduction
for the same amount.
OTHER INFORMATION
The last sale price of the Company's common stock reported by the
Nasdaq Stock Market on April [____], 1996 was $__________ per share.
- 24 -
<PAGE> 27
NEW PLAN BENEFITS
<TABLE>
<CAPTION>
1995 Omnibus Stock Incentive Plan
----------------------------------------
Name and Position Value(1) Number of Units
- ------------------------------------ ----- ---------------
<S> <C> <C> <C>
Non-Executive Officer Director Group $56,200 3,200 (2)
0 8,000 (3)
</TABLE>
(1) The value of Director Stock Awards is based on the fair
market value of such stock on the date of the award. See "Non-Employee
Director Stock Awards." The exercise price per share of Director
Options is the fair market value of one share of common stock on
the date of grant which was $16.25. See "Non-Employee Director
Options." The value of Director Options is based on the fair market
value of common stock at year end, $16.125. The dollar values set forth
in this column are based on what such values would have been if
Director Stock Awards and Director Options had been awarded in 1995
under the provisions of the 1995 Plan, as amended by Amendment No. 1.
(2) Based on Director Stock Awards of 200 shares of common stock per
quarter to each of the four Non-Employee Directors.
(3) Based on annual grants of Director Options to purchase 2,000 shares of
common stock to each of the four Non-Employee Directors.
The benefits and amounts that will be received by employees of the
Company who are eligible to participant in the 1995 Plan are not presently
determinable.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Transactions with affiliates of the Company have been and will be made on
terms no less favorable to the Company than could be obtained from unaffiliated
third parties. In addition, the Board has adopted a formal policy of not
entering into transactions with officers or affiliates of the Company unless
the Board makes a specific finding that not to enter into such transaction
would be contrary to the best interests of the Company and its public
shareholders. Any such transactions, including loans, with officers or
affiliates and/or shareholders of the Company require the approval of a
majority of the disinterested directors.
H.B. Oppenheimer, a former director who resigned February 22, 1995,
billed the Company for financial consulting services performed by H. B.
Oppenheimer & Company Incorporated, an investment banking firm of which Mr.
Oppenheimer is President and Chief Executive Officer ("HBOC"). In connection
with the Asset Sale and the concurrent spin-off of the Company's truckload
operations and the related refinancing of the Company's lines of credit and
equipment leases and loans, HBOC received fees of $281,806 in 1995.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
For the Company's 1995 fiscal year, Arthur Andersen LLP audited the
consolidated financial statements of the Company, including reports to the SEC
and others. It is anticipated that representatives of Arthur Andersen LLP will
attend the Annual Meeting, will have the opportunity to make a statement and
will be available to respond to questions by shareholders.
Company management and the Audit Committee of the Board of Directors will
make their recommendation with respect to the method of selection and/or
retention of an independent public accounting firm for the year 1996 at a
meeting of the Board of Directors subsequent to the Annual Meeting of
Shareholders.
- 25 -
<PAGE> 28
SHAREHOLDER PROPOSALS
In the event any shareholder intends to present a proposal at the Annual
Meeting of Shareholders to be held in 1997, such proposal must be received by
the Company, in writing, on or before December [__], 1996, to be considered for
inclusion in the Company's next voting Proxy and Proxy Statement.
BY ORDER OF THE BOARD OF DIRECTORS
JAMES T. GRAVES
Secretary
April [__], 1996
- 26 -
<PAGE> 29
ANNEX A
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (the "Merger Agreement") dated as of
__________________, 1996, by and between MARK VII, INC., a Missouri corporation
("Mark VII Missouri"), and MARK VII, INC., a Delaware corporation and
wholly-owned subsidiary of Mark VII Missouri ("Mark VII Delaware") (Mark VII
Missouri and Mark VII Delaware are referred to herein together as the
"Constituent Corporations").
WHEREAS, pursuant to the provisions of Section 253 of the Delaware
General Corporation Law (the "DGCL") and Section 351.447 of The General and
Business Corporation Law of Missouri (the "MGBCL"), Mark VII Delaware and Mark
VII Missouri desire to merge into a single corporation, with Mark VII Delaware
to be the surviving corporation;
WHEREAS, the respective Board of Directors of each of the foregoing named
corporations have deemed it advisable and in the best interests of said
corporations and their respective stockholders for the purpose of effectuating
the reincorporation of Mark VII Missouri in the State of Delaware that Mark VII
Missouri be merged with and into Mark VII Delaware (the "Merger"), with Mark
VII Delaware to be the surviving corporation pursuant to this Merger Agreement
and applicable law;
WHEREAS, the respective Board of Directors of each of the foregoing named
corporations have duly authorized the execution and delivery of this Merger
Agreement by the President or any Vice President, respectively, of each of said
corporations; and
WHEREAS, Mark VII Delaware is a wholly-owned subsidiary of Mark VII
Missouri.
NOW, THEREFORE, in consideration of the mutual promises and agreements
herein contained, the parties hereto agree as follows:
1. THE MERGER. Upon the terms and subject to the conditions of this
Merger Agreement, and in accordance with the DGCL and the MGBCL, Mark VII
Missouri shall be merged with and into Mark VII Delaware, and the separate
existence of Mark VII Missouri shall cease. Following the Merger, Mark VII
Delaware shall be the surviving corporation and shall be governed by the laws
of the State of Delaware.
2. EFFECTIVE TIME. The Merger shall be effective as of the filing
of Articles of Merger with the Missouri Secretary of State and a Certificate of
Merger with the Delaware Secretary of State in accordance with the relevant
provisions of the DGCL and the MGBCL, respectively (the "Effective Time").
3. EFFECTS OF THE MERGER. At the Effective Time, the Merger shall
have the effects as set forth in Section 259 of the DGCL with respect to Mark
VII Delaware and Section 351.450 of the MGBCL with respect to Mark VII
Missouri. Without limiting the foregoing sentence, as of the Effective Time,
the identity, existence, purposes, powers, objects, franchises, privileges,
rights and immunities of Mark VII Delaware shall continue in effect and
unimpaired by the Merger and Mark VII Delaware shall possess all the rights,
privileges, immunities, powers and franchises, both of a public and a private
nature, and be subject to all the restrictions, disabilities and duties of the
Constituent Corporations, and all property, real, personal and mixed, of and
all debts due to, each of the Constituent Corporations on whatever account, for
stock as well as for all other choses or things in action, or belonging to
either of the Constituent Corporations shall be vested in Mark VII Delaware,
and all and every other interest shall be thereafter the property of Mark VII
Delaware, as they were of the respective 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; provided, however, that all rights of creditors and all liens
upon any property of either of the Constituent Corporations shall be preserved
unimpaired, limited in lien to the property affected by such liens at the
Effective Time, and all debts, liabilities and duties of either of the
Constituent Corporations shall thenceforth attach to Mark VII Delaware and may
be enforced against Mark VII Delaware to the same extent as if said debts,
liabilities and duties had been incurred or contracted by it.
4. CERTIFICATE OF INCORPORATION AND BYLAWS. The Certificate of
Incorporation of Mark VII Delaware, as in effect immediately prior to the
Effective Time, shall be the Certificate of Incorporation of Mark VII Delaware
until the same is altered or amended in accordance with the laws of the State
of Delaware, and the Bylaws of Mark
- 27 -
<PAGE> 30
VII Delaware, as in effect immediately prior to the Effective Time shall be the
Bylaws of Mark VII Delaware until the same are altered or amended in accordance
with the provisions thereof.
5. DIRECTORS AND OFFICERS. The directors and officers of Mark VII
Missouri holding such positions immediately prior to the Effective Time shall
be the directors and officers, respectively, of Mark VII Delaware, until such
time as their terms of office shall expire or they resign, die or are removed
from office.
6. MODE OF EFFECTING THE MERGER. Upon the approval of this Merger
Agreement by the respective Board of Directors of each of the Constituent
Corporations, the Merger Agreement shall be executed by Mark VII Delaware and
Mark VII Missouri. Upon execution of this Merger Agreement, the Merger
Agreement shall be submitted for approval to the stockholders of Mark VII
Missouri. If the terms of this Merger Agreement are so approved in accordance
with the requirements of the MGBCL and the DGCL, respectively, the officers of
each of Mark VII Missouri and Mark VII Delaware shall take such further actions
as the officers shall deem necessary or appropriate to effectuate the purpose
and intent of the Merger, including but not limited to, the filing with the
respective state authorities of all required articles, certificates, or other
documents of merger in such form as required by, and executed in accordance
with, the relevant provisions of the corporation laws of the respective states.
If this Merger Agreement shall not be so approved, it shall, without any
further action by the parties, be cancelled without liability of any party to
the others.
7. ACCOUNTING MATTERS. The assets and liabilities of Mark VII
Missouri, as of the Effective Time, shall be taken up on the books of Mark VII
Delaware in the amounts at which they are carried at that time on the books of
Mark VII Missouri. Differences in accounting procedures of Mark VII Delaware
and Mark VII Missouri shall be reconciled as determined by Mark VII Delaware.
8. CANCELLATION AND CONVERSION OF SHARES. Each share of common
stock, par value $.10 per share, of Mark VII Missouri (the "Missouri Common
Stock") that is issued and outstanding, or held in treasury, immediately prior
to the Effective Time shall automatically, by virtue of the Merger and without
any action on the part of Mark VII Missouri or the holders of such shares, be
converted into and become the same number of fully paid and nonassessable
shares of common stock, par value $.10 per share, of Mark VII Delaware (the
"Delaware Common Stock"). Each share of Delaware Common Stock that is issued
and outstanding, or held in treasury, at the Effective Time shall
automatically, by virtue of the Merger and without any action on the part of
Mark VII Delaware or its sole stockholder, be cancelled and cease to exist and
resume the status of authorized and unissued shares of Delaware Common Stock,
and the sole stockholder of Mark VII Delaware shall receive no consideration in
exchange therefor.
9. STOCK CERTIFICATES. From and after the Effective Time, all of
the outstanding certificates which prior to that time represented shares of
Missouri Common Stock shall be deemed for all purposes to evidence ownership of
and to represent the shares of Delaware Common Stock into which the shares of
such Missouri Common Stock represented by such certificates have been converted
as herein provided. The registered owner on the books and records of Mark VII
Delaware or its transfer agents of any such outstanding stock certificate
shall, until such certificate shall have been surrendered or transferred or
otherwise accounted for to Mark VII Delaware or its transfer agents, have and
be entitled to exercise any voting and other rights with respect to and to
receive any dividend and other distribution upon the shares of Delaware Common
Stock evidenced by such outstanding certificate as above provided.
10. EMPLOYEE BENEFIT PLANS. As of the Effective Time, Mark VII
Delaware hereby assumes all obligations of Mark VII Missouri under any and all
employee benefit plans of Mark VII Missouri in effect as of said date or with
respect to which employee rights or accrued benefits are outstanding as of said
date, and each option to purchase shares of Missouri Common Stock shall be
automatically converted to an option to purchase the same number of shares of
Delaware Common Stock, without any action by Mark VII Delaware or the holder of
such option.
11. FURTHER ASSURANCES. From time to time, as and when required by
Mark VII Delaware or by its successors and assigns, there shall be executed and
delivered on behalf of Mark VII Missouri such deeds and other instruments, and
there shall be taken or caused to be taken by it such further and other action,
as shall be appropriate or necessary in order to vest, perfect or confirm, of
record or otherwise, in Mark VII Delaware the title to and possession of all
property, interests, assets, rights, privileges, immunities, powers, franchises
and authority of Mark VII Missouri, and otherwise to carry out the purposes of
this Merger Agreement, and the officers and directors of Mark VII Delaware are
fully authorized in the name and on behalf of Mark VII Missouri or otherwise to
take any and all such action and to execute and deliver any and all such deeds
and other instruments.
- 28 -
<PAGE> 31
12. AMENDMENT. The parties hereto by mutual consent of their
respective Board of Directors may amend, modify or supplement this Merger
Agreement in such manner as may be agreed upon by them, in writing, at any time
prior to the filing of the Effective Time.
13. TERMINATION. This Merger Agreement may be terminated, and the
Merger and other transactions herein provided for abandoned, at any time prior
to the Effective Time, by action of the Boards of Directors of Mark VII
Delaware and Mark VII Missouri for any reason.
14. CONSENT TO SERVICE OF PROCESS. Mark VII Delaware agrees that it
may be served with process in the State of Missouri in any proceeding for the
enforcement of any obligation of Mark VII Missouri arising prior to the
Effective Time of this Agreement, and shall irrevocably appoint the Missouri
Secretary of State to accept service of process in any suit or other
proceedings as required, and Mark VII Delaware specifies the following to be
the address to which process shall be mailed by the Missouri Secretary of
State:
5310 St. Joseph Avenue
St. Joseph, MO 64502
Attn: James T. Graves, Esq.
15. VALIDITY. The invalidity or enforceability of any provision of
this Merger Agreement shall not affect the validity or enforceability of any
other provisions of this Merger Agreement, which shall remain in full force and
effect.
16. COUNTERPARTS. This Merger Agreement may be executed in
counterparts, each of which when executed shall be deemed to be an original but
both of which taken together shall constitute one and the same document.
17. ENTIRE MERGER AGREEMENT. This Merger Agreement constitutes the
entire agreement between the parties hereto and supersedes all prior agreements
and understandings, both written and oral, among the parties with respect to
the subject matter hereof.
18. GOVERNING LAW. This Merger Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware.
19. PARTIES AND INTERESTS. This Merger Agreement shall be binding
upon and inure solely to the benefit of each party hereto, and, except as may
be provided in this Merger Agreement, nothing in this Merger Agreement,
express or implied, is intended to confer upon any other person any rights or
remedies of any nature whatsoever under or by reason of this Merger Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Merger
Agreement to be executed by their respective officers thereunto duly authorized
as of the day and year first above written.
MARK VII, INC.,
A MISSOURI CORPORATION
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
MARK VII, INC.,
A DELAWARE CORPORATION
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
- 29 -
<PAGE> 32
ANNEX B
CERTIFICATE OF INCORPORATION
OF
MARK VII, INC.
The undersigned, in order to form a corporation pursuant to the
General Corporation Law of the State of Delaware (the "DGCL"), certifies:
FIRST: NAME. The name of the corporation is Mark VII, Inc. (the
"Corporation").
SECOND: REGISTERED OFFICE; AGENT. The Registered Office of the
Corporation in the State of Delaware is located at [1209 Orange Street in the
City of Wilmington, County of New Castle]. The name of its Registered Agent at
such address is [The Corporation Trust Company].
THIRD: PURPOSE. The purpose of the Corporation is to engage in
any lawful act or activity for which corporations may be organized under the
DGCL as presently in effect or as it may hereafter be amended.
FOURTH: CAPITALIZATION. The aggregate number of shares of stock
which the Corporation shall have authority to issue is Ten Million
(10,000,000). All such shares shall be common stock, par value $0.10 per
share, and there shall be no preferences, qualifications, limitations or
restrictions whatsoever, nor any special or relative rights in respect of the
shares.
FIFTH: INCORPORATOR. The name and mailing address of the
incorporator are _________________________, c/o Shook, Hardy & Bacon L.L.P.,
One Kansas City Place, 1200 Main Street, Kansas City, Missouri 64105.
SIXTH: AMENDMENT OF BYLAWS. In furtherance and not in
limitation of the powers conferred by the laws of the State of Delaware, the
Board of Directors of the Corporation is authorized and empowered to make,
alter, amend and repeal the Bylaws of the Corporation in any manner not
inconsistent with the laws of the State of Delaware.
SEVENTH: INDEMNIFICATION. The Corporation shall, to the full
extent permitted by Section 145 of the DGCL as presently in effect or as it may
hereafter be amended, indemnify all persons whom it may indemnify pursuant
thereto and advance expenses of litigation to directors and officers of the
Corporation in accordance with the procedures and limitations set forth in the
Bylaws of the Corporation.
EIGHTH: LIMITATION OF DIRECTORS' LIABILITY. To the fullest
extent permitted by the DGCL as presently in effect or as it may hereafter be
amended, a director of the Corporation (a "Director") shall not be liable to
the Corporation or its stockholders (the "Stockholders") for monetary damages
for breach of fiduciary duty as a Director.
NINTH: COMPROMISES OR ARRANGEMENTS WITH CREDITORS OR
STOCKHOLDERS. Whenever a compromise or arrangement is proposed between the
Corporation and its creditors or any class of them and/or between the
Corporation and its Stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of the Corporation or of any creditor or Stockholder thereof or on the
application of any receiver or receivers appointed for the Corporation under
the provisions of Section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers
appointed for the Corporation under the provisions of Section 279 of Title 8 of
the Delaware Code order a meeting of the creditors or class of creditors,
and/or of the Stockholders or class of Stockholders of the Corporation, as the
case may be, to be summoned in such manner as the said court directs. If a
majority in number representing three-fourths in value of the creditors or
class of creditors, and/or of the Stockholders or class of Stockholders of the
Corporation, as the case may be, agree to any compromise or arrangement and to
any reorganization of the Corporation as a consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application has been made,
be binding on all the creditors or class of creditors, and/or on all the
Stockholders or class of Stockholders, of the Corporation, as the case may be,
and also on the Corporation.
- 30 -
<PAGE> 33
TENTH: AMENDMENT OF CERTIFICATE OF INCORPORATION. The
Corporation reserves the right to amend, alter, change or repeal any provision
contained in this Certificate of Incorporation in the manner now or hereafter
prescribed by law, and all rights and powers conferred herein on Stockholders,
Directors and officers of the Corporation are subject to this reserved power.
ELEVENTH: CLASSIFIED BOARD OF DIRECTORS. The number of
Directors constituting the entire Board of Directors shall be as fixed from
time to time in the manner provided in the Bylaws of the Corporation; provided,
however, that the number of Directors shall not be reduced so as to shorten the
term of any director at the time in office.
The Board of Directors shall be divided into three classes (to be
designated as Class I, Class II and Class III), as nearly equal in numbers as
the then total number of Directors constituting the entire Board of Directors
permits with the term of office of one class expiring each year. At the Annual
Meeting of Stockholders in 1996, Class I Directors shall be elected to hold
office for a term expiring at the next succeeding annual meeting of Directors,
Class II Directors shall be elected to hold office for a term expiring at the
second succeeding annual meeting and Class III Directors shall be elected to
hold office for a term expiring at the third succeeding annual meeting of
Directors. Any vacancies in the Board of Directors for any reason, and any
directorships resulting from any increase in the number of Directors, may be
filled by the Board of Directors, acting by a majority of the Directors then in
office, although less than a quorum, and any Directors so chosen shall hold
office until the next election of the class for which such Directors shall have
been chosen and until their successors shall be elected and qualified. Subject
to the foregoing, at each annual meeting of Stockholders, the successors to the
class of Directors whose term shall then expire shall be elected to hold office
for a term expiring at the third succeeding annual meeting.
TWELFTH: RIGHT OF STOCKHOLDERS TO ACT BY CONSENT. Notwithstanding
anything in the DGCL to the contrary, any action which may be taken at a
meeting of the Stockholders may be taken without a meeting if consents in
writing, setting forth the action so taken, shall be signed by all Stockholders
entitled to vote with respect to the subject matter thereof. Such consents
shall have the same force and effect as a unanimous vote of the Stockholders at
a meeting duly held, and may be stated as such in any certificate filed under
the DGCL.
IN WITNESS WHEREOF, I have executed, signed and acknowledged this
Certificate of Incorporation this _____ day of ________________, 1996.
---------------------------------------
[Name]
Sole Incorporator
- 31 -
<PAGE> 34
ANNEX C
BYLAWS
OF
MARK VII, INC.
(A DELAWARE CORPORATION)
OFFICES
1. Registered Office and Registered Agent. The location of the
registered office and the name of the registered agent of the Corporation in
the State of Delaware shall be as stated in the Certificate of Incorporation or
as determined from time to time by the Board of Directors and on file in the
appropriate public offices of the State of Delaware pursuant to applicable
provisions of law.
2. Corporate Offices. The Corporation may have such other
corporate offices and places of business anywhere within or without the State
of Delaware as the Board of Directors of the Corporation may from time to time
designate or the business of the Corporation may require. The "principal place
of business" or "principal office" or "executive office" of the Corporation
shall be as fixed and designated from time to time by the Board of Directors.
SEAL
3. Corporate Seal. The corporate seal shall have inscribed
thereon the name of the Corporation and the words "Corporate Seal, Delaware."
The corporate seal may be used by causing it, or a facsimile thereof, to be
impressed or affixed or in any manner reproduced.
STOCKHOLDERS' MEETINGS
4. Place of Meetings. All meetings of the stockholders shall be
held at the principal place of business of the Corporation or at such other
place either within or without the State of Delaware as shall be designated
from time to time by the Board of Directors and stated in the notice of the
meeting or in a duly executed waiver of notice thereof.
5. Annual Meetings. An annual meeting of the stockholders of the
Corporation for the election of Directors shall be held on [the second
Wednesday in May of each year, if not a legal holiday, and if a legal holiday,
then on the next business day following, at 10:00 a.m., or at] such [other]
date and time as shall be designated from time to time by the Board of
Directors of the Corporation and stated in the notice of the meeting, at which
meeting the stockholders entitled to vote thereon shall elect directors and
transact such other business as may properly come before the meeting as
provided in Section 20 herein.
6. Special Meetings. Except as otherwise required by law,
special meetings of the stockholders of the Corporation may be called only by
the President of the Corporation or by the Board of Directors of the
Corporation. Special meetings of the stockholders may be held for any purpose
or purposes specified in the notice of meeting, unless otherwise prescribed by
statute or by the Corporation's Certificate of Incorporation. Only such
business shall be conducted at a special meeting as shall have been stated in
the notice of the meeting; provided, however, that if a special meeting is
called for the purpose of electing directors, a stockholder may nominate a
candidate or candidates, subject to compliance with the provisions of
Subsection (c) of Section 20 herein.
The "call" and the "notice" of any such meeting shall be deemed to be
synonymous.
7. Voting. At all meetings of stockholders, every stockholder
having the right to vote shall be entitled to vote in person, or by proxy
appointed by an instrument in writing subscribed by such stockholder and
bearing a date not more than three years prior to said meeting, unless said
instrument shall provide for a longer period; such proxy being filed with the
Secretary of the Corporation prior to or at the time of the meeting. Unless
otherwise provided by the Corporation's Certificate of Incorporation, these
Bylaws or resolutions adopted by the Board of Directors in accordance with the
General Corporation Law of the State of Delaware, each stockholder shall have
one vote for each share of stock entitled to vote at such meeting registered in
his, her or its name on the books of the Corporation. At all meetings of
stockholders, the voting shall be by written ballot, including the election of
Directors. No person shall be admitted to vote any shares of stock belonging
or hypothecated to the Corporation.
- 32 -
<PAGE> 35
8. Quorum. The holders of a majority of the outstanding shares
of stock entitled to vote thereat present in person or represented by proxy,
shall constitute a quorum at all meetings of the stockholders for the
transaction of any business, except as otherwise provided by law, by the
Corporation's Certificate of Incorporation, or by these Bylaws. Shares
represented by a proxy which directs that the shares be voted to abstain or to
withhold a vote on a matter shall be deemed to be represented at the meeting as
to such matter. Except for the election of directors which shall be in
accordance with the Delaware General Corporation Law, every decision of a
majority in amount of shares of stock of such quorum shall be valid as a
corporate act, except in those specific instances in which a larger vote is
required by law or by the Corporation's Certificate of Incorporation or by
these Bylaws. In the event that at any meeting a quorum exists for the
transaction of some business but does not exist for the transaction of other
business, the business as to which a quorum is present may be transacted.
9. Adjournment. If the holders of a majority of the outstanding
shares of stock entitled to vote are not present at a meeting of stockholders,
the holders of a majority of the stock entitled to vote present in person or by
proxy at such meeting shall have the power successively to adjourn the meeting
from time to time to a specified date not longer than ninety (90) days after
such adjournment, without notice to anyone other than announcement at the
meeting (unless the adjournment is for more than thirty (30) days), until a
quorum shall be present in person or by proxy. At such adjourned meeting at
which a quorum shall be present in person or by proxy, any business may be
transacted which might have been transacted at the original meeting which was
adjourned. If the adjournment is for more than thirty (30) days, or if after
adjournment a new record date is fixed for the adjourned meeting, a notice of
the adjourned meeting shall be given to each stockholder of record entitled
vote at the meeting.
10. Stock Ledger. The original or duplicate stock ledger shall be
the only evidence as to who are the stockholders entitled to examine the list
required under Section 11 herein or the books of the Corporation, or to vote in
person or by proxy at any meeting of the stockholders.
11. Stockholders' Lists. The Secretary or Assistant Secretary,
who shall have charge of the stock ledger, shall prepare and make, at least ten
(10) days prior to every meeting of stockholders, a complete list of the
stockholders entitled to vote at the meeting, arranged in alphabetical order,
and showing the address of each stockholder and the number of shares registered
in the name of each stockholder. Such list shall be open to the examination of
any stockholder, for any purpose germane to the meeting, during ordinary
business hours, for a period of at least ten (10) days prior to the meeting, at
a place within the city where the meeting is to be held, which place shall be
specified in the notice of the meeting, or, if not so specified, at the place
where the meeting is to be held. The list shall also be produced and kept at
the time and place of the meeting during the whole time thereof, and may be
inspected by any stockholder who is present. Notwithstanding the foregoing,
failure to comply with the foregoing shall not affect the validity of any
action taken at any such meeting.
12. Registered Stockholders; Exceptions; Stock Ownership Presumed.
The Corporation shall be entitled to treat the holder of any share or shares of
stock of the Corporation, as recorded on the stock ledger or transfer books of
the Corporation, as the holder of record and as the holder and owner in fact
thereof and, accordingly, shall not be required to recognize any equitable or
other claim to or interest in such share(s) on the part of any other person,
firm, partnership, corporation or association, whether or not the Corporation
shall have express or other notice thereof, except as is otherwise expressly
required by law, and the term "stockholder" as used in these Bylaws means one
who is a holder of record of shares of stock of the corporation; provided,
however, that if permitted by law:
(a) shares standing in the name of another corporation,
domestic or foreign, may be voted by such officer, agent or proxy as the bylaws
of such corporation prescribe, or, in the absence of such provision, as the
board of directors of such corporation may determine;
(b) shares standing in the name of a deceased person may
be voted by his or her administrator or executor, either in person or by proxy;
and shares standing in the name of a guardian, curator, or trustee may be voted
by such fiduciary, either in person or by proxy but no guardian, curator, or
trustee shall be entitled, as such fiduciary, to vote shares held by him or her
without a transfer of such shares into his or her name;
(c) shares standing in the name of a receiver may be
voted by such receiver, and shares held by or under the control of a receiver
may be voted by such receiver without the transfer thereof into his or her name
if authority so to do be contained in an appropriate order of the court by
which such receiver was appointed; and
(d) a stockholder whose shares are pledged shall be
entitled to vote such shares until the shares have been transferred of record
into the name of the pledgee, and thereafter the pledgee shall be entitled to
vote the shares so transferred.
13. Notice. Written or printed notice of each meeting of the
stockholders, whether annual or special, stating the place, date and hour of
the meeting, and, in the case of a special meeting, the purpose or purposes
thereof,
- 33 -
<PAGE> 36
shall be given to each stockholder of record of the Corporation entitled to
vote at such meeting and any other stockholder entitled to notice of the
meeting, either personally or by mail, not less than ten (10) days nor more
than sixty (60) days prior to the meeting, by or at the direction of the
President, Secretary or the officers or persons calling the meeting. If
mailed, such notice shall be deemed to be delivered when it is deposited in the
United States mail with postage thereon addressed to the stockholder at his,
her or its address as it appears on the records of the Corporation.
14. Procedure. The order of business and all other matters of
procedure for the proper conduct of the meeting at every meeting of the
stockholders may be determined by the presiding officer. The Chairman of the
Board of Directors, or other person presiding at such meeting, shall appoint
two or more Inspectors of Election to serve at every meeting of the
stockholders at which Directors are to be elected or a vote of the stockholders
is to be taken, which inspectors shall comply with Section 231 of the General
Corporation Law of the State of Delaware.
15. Action Without a Meeting. Stockholders shall be entitled to
act without a meeting in the manner provided in the Corporation's Certificate
of Incorporation.
BOARD OF DIRECTORS
16. Management. The property, business and affairs of the
Corporation shall be managed by or under the direction of a Board of Directors.
As used in these Bylaws, the terms "whole Board" and "whole Board of Directors"
mean the total number of Directors which the Corporation would have if there
were no vacancies. In addition to the powers and authorities by these Bylaws
and the Corporation's Certificate of Incorporation expressly conferred upon it,
the Board of Directors may exercise all such powers of the Corporation, and do
all such lawful acts and things as are not by statute or by the Corporation's
Certificate of Incorporation or by these Bylaws directed or required to be
exercised or done by the stockholders.
17. Number and Classes. The number of Directors constituting the
Board of Directors shall be as determined from time to time by resolution of
the Board of Directors. The Board of Directors shall be divided into three
classes, in accordance with the provisions of the Corporation's Certificate of
Incorporation.
18. Vacancies and Newly Created Directorships. Any vacancies in
the Board of Directors for any reason, and any newly created directorships
resulting from any increase in the number of Directors constituting the Board
of Directors, may be filled by the Board of Directors, acting by a majority of
the Directors then in office, although less than a quorum, and any Directors so
chosen shall hold office until the next election of the class for which such
Directors shall have been chosen and until their respective successors shall be
elected and qualified or until their respective earlier resignation or removal.
No decrease in the number of Directors shall shorten the term of any incumbent
Director.
19. Removal of Directors. Directors may be removed only for cause
by the affirmative vote of the holders of a majority or more of the outstanding
shares of stock of the Corporation entitled to vote generally in the election
of Directors cast at a meeting of stockholders called for that purpose.
20. Nomination of Directors and Presentation of Business at
Stockholder Meetings.
(a) Nominations of persons for election to the Board of
Directors and proposals of business to be considered by the stockholders may be
made at an annual meeting of stockholders (i) pursuant to the Corporation's
notice of meeting, (ii) by or at the direction of the Board of Directors or
(iii) by any stockholder who was a stockholder of record at the time of the
giving of notice provided for in this Section 20, who is entitled to vote
thereon at the meeting and who complied with the notice procedures set forth in
this Section 20.
(b) For nominations of persons for election to the Board
of Directors or other proposals of business to be properly brought before an
annual meeting by a stockholder pursuant to clause (iii) of Subsection (a) of
this Section 20, the stockholder must have given timely notice thereof in
writing to the Secretary of the Corporation. To be timely, a stockholder's
notice shall be delivered to the Secretary at the principal executive offices
of the Corporation not less than sixty (60) days prior to the first anniversary
of the preceding year's annual meeting; provided, however, that in the event
that the date of the annual meeting is advanced by more than thirty (30) days
or delayed by more than sixty (60) days from such anniversary date, notice by
the stockholder to be timely must be so delivered not later than the close of
business on the tenth (10th) day following the date on which public
announcement of the date of such meeting is first made. Such stockholder's
notice shall set forth as to each person whom the stockholder proposed to
nominate for election or reelection as a Director:
- 34 -
<PAGE> 37
(1) the name and address of the stockholder who intends to
make the nomination and of the person or persons to be nominated;
(2) a representation that such stockholder is a holder of
record of stock of the Corporation entitled to vote in the election of
directors at such meeting and intends to appear in person or by proxy at the
meeting to nominate the person or persons specified in the notice;
(3) the name and address of such stockholder, as it appears on
the Corporation's books, and of the beneficial owner (as such term is defined
in Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended
("Exchange Act")), if any, on whose behalf the nomination is made;
(4) the class and number of shares of the Corporation which
are owned beneficially (as such term is defined in Rule 13d-3 promulgated under
the Exchange Act) and of record by the nominating stockholder and each nominee
proposed by such stockholder;
(5) a description of all arrangements or understandings
between the stockholder and each nominee and any other person or persons
(naming such person or persons) pursuant to which the nomination or nominations
are to be made by the stockholder;
(6) such other information regarding each nominee proposed by
such stockholder as would have been required to be included in a proxy
statement filed pursuant to Regulation 14A (17 C.F.R. Section 240.14a-1 et
seq.) as then in effect under the Exchange Act, had the nominee been nominated,
or intended to be nominated, by the Board of Directors; and
(7) the consent of each nominee to serve as a Director of the
Corporation if so elected.
As to any other business that the stockholder proposes to bring before the
meeting, a stockholder's notice to the Secretary shall set forth as to each
matter:
(1) a brief description of the business desired to be brought
before the annual meeting;
(2) a representation that such stockholder is a holder of
record of stock entitled to vote on the business proposed by such stockholder
and intends to appear in person or by proxy at the meeting to present the
proposed business to be brought before the meeting;
(3) the name and address of the stockholder proposing such
business, as it appears on the Corporation's books, and of the beneficial owner
(as such term is defined in Rule 13d-3 promulgated under the Exchange Act), if
any, on whose behalf the business is proposed;
(4) the class and number of shares of the Corporation which
are owned beneficially (as such term is defined in Rule 13d-3 promulgated under
the Exchange Act) and of record by the stockholder;
(5) the reason for conducting such business at the meeting and
any material interest of the stockholder or such beneficial owner in such
business; and
(6) all other information with respect to each such matter as
would have been required to be included in a proxy statement filed pursuant to
Regulation 14A (17 C.F.R. Section 240.14a-1 et seq.) as then in effect under
the Exchange Act, had proxies been solicited by the Board of Directors with
respect thereto.
Notwithstanding anything in this Subsection (b) to the contrary, in the event
that the number of Directors to be elected to the Board of Directors is
increased and there is no public announcement naming all of the nominees for
Director or specifying the size of the increased Board of Directors made by the
Corporation at least forty (40) days prior to the first anniversary of the
preceding year's annual meeting, a stockholder's notice shall also be
considered timely, but only with respect to nominees for any new positions
created by such increase, if it shall be delivered to the Secretary at the
principal office of the Corporation not later than the close of business on the
tenth (10th) day following the day on which such public announcement is first
made by the Corporation.
(c) Only such business shall be conducted at a special
meeting of stockholders as shall have been brought before the meeting pursuant
to the Corporation's notice of meeting. Nominations of persons for election to
the Board of Directors may be made at a special meeting of stockholders with
regard to which the Board of Directors has determined that Directors are to be
elected (i) pursuant to the Corporation's notice of meeting, (ii) by or at the
direction of the Board of Directors, or (iii) by any stockholder who is a
stockholder of record at the time
- 35 -
<PAGE> 38
of the giving of notice provided for in this Section 20, who shall be entitled
to vote for the election of Directors at the meting and who complies with the
notice procedures set forth in the last sentence of this Subsection (c) of this
Section 20. In the event the Corporation calls a special meeting of
stockholders for the purpose of electing one or more Directors to the Board,
any such stockholder may nominate a person or persons (as the case may be) for
election to such position(s) as specified in the Corporation's notice of
meeting, if the stockholder's notice setting forth the information required by
Subsection (b) of this Section 20 shall be delivered to the Secretary at the
principal office of the Corporation not later than the close of business on the
tenth (10th) day following the day on which public announcement is first made
of the date of the special meeting and of the nominees proposed by the Board of
Directors to be elected at such meeting.
(d) Only such persons who are nominated in accordance
with the procedures set forth in this Section 20 shall be eligible to serve as
Directors and only such business shall be conducted at a meeting of
stockholders as shall have been brought before the meeting in accordance with
the procedures set forth in this Section 20. The chairman of the meeting of
stockholders shall have the power and duty to determine whether a nomination or
any business proposed to be brought before the meeting was made in accordance
with the procedures set forth in this Section 20 and, if any proposed
nomination or business is not in compliance with this Section 20, to declare
that such defective nominations or proposal shall be disregarded.
21. Annual Meeting. The Board of Directors shall hold a regular
meeting, to be known as the annual meeting of Directors, immediately following
and at the same place as the annual meeting of stockholders, for the purpose of
electing officers, and for the consideration of any other business that may
properly be brought before the meeting. No notice of the meeting to the
Directors shall be necessary to legally constitute the meeting, provided a
quorum shall be present. If, however, a quorum shall not be present, the
annual meeting of the Board of Directors shall be held at such time and place
as shall be consented to in writing by a majority of the Directors in the same
manner as provided in Section 24 herein with respect to the giving of notice
for special meetings of the Board, except that it shall not be necessary to
state the purpose of the meeting in such notice.
Every Director of the Corporation, upon his or her election,
shall qualify by accepting the office of Director, and his or her attendance
at, or his or her written approval of the minutes of, any meeting of the Board
of Directors subsequent to his or her election shall constitute acceptance of
such office; or he or she may execute such acceptance by a separate writing
which shall be placed in the Corporation's minute book.
22. Regular Meetings. Regular meetings of the Board of Directors
may be held without notice at such times and places, whether within or without
the State of Delaware, as shall from time to time be fixed by resolution
adopted by the whole Board of Directors. Any business may be transacted at a
regular meeting.
23. Special Meetings. Special meetings of the Board of Directors
may be called at any time by the Chairman of the Board or the President of the
Corporation, and shall be called by the Secretary of the Corporation on the
written request of a majority of the Directors in office. The place for the
meeting may be within or without the State of Delaware and shall be as
designated in the notice of the meeting.
24. Notice of Special Meetings. Written or printed notice of each
special meeting of the Board of Directors, stating the place, day and hour of
the meeting and the purpose or purposes thereof, shall be mailed to each
Director addressed to him or her at his or her residence or usual place of
business at least five (5) days before the day on which the meeting is to be
held, or shall be sent to him or her by telegram or telecopy, or delivered to
him or her personally, at least three (3) days before the day on which the
meeting is to be held. If mailed, such notice shall be deemed to be delivered
when it is deposited in the United States mail with postage thereon addressed
to the Director at his or her residence or usual place of business. If given
by telegraph or telecopy, such notice shall be deemed to be delivered when it
is delivered to the telegraph company or acknowledgment of receipt of the
telecopy is received, respectively. The notice may be given by any person
having authority to call the meeting. "Notice" and "call" with respect to such
meetings shall be deemed to be synonymous. Any meeting of the Board of
Directors shall be a legal meeting without any notice thereof having been given
if all Directors are present at such meeting.
25. Meetings by Conference Telephone or Similar Communications
Equipment. Unless otherwise restricted by the Corporation's Certificate of
Incorporation or these Bylaws, members of the Board of Directors, or any
committee designated by the Board, may participate in a meeting of the Board,
or any committee thereof, by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and participation in a meeting by such means shall
constitute presence in person at such meeting.
26. Quorum. A majority of the whole Board of Directors shall
constitute a quorum for the transaction of business, and, except as otherwise
provided in these Bylaws or the Corporation's Certificate of Incorporation, the
- 36 -
<PAGE> 39
vote of a majority of the Directors present at a meeting at which a quorum is
present shall be the act of the Board of Directors.
27. Committees.
(a) Executive Committee. The Board of Directors at the
annual or any regular or special meeting of the Directors may, by resolution
adopted by a majority of the whole Board, designate and elect two or more
Directors to constitute an Executive Committee and appoint one of the Directors
so designated as the chairman of the Executive Committee. Vacancies in the
committee may be filled by the Board of Directors at any meeting thereof. Each
member of the committee shall hold office until his or her successor has been
duly elected, or until his or her resignation or removal from the Executive
Committee by the Board of Directors, or until he or she otherwise ceases to be
a Director. Any member of the Executive Committee may be removed from the
committee by resolution adopted by a majority of the whole Board of Directors.
The compensation, if any, of members of the committee shall be established by
resolution of the Board of Directors.
The Executive Committee shall have, and may exercise, all of
the authority of the Board of Directors in the management of the Corporation,
to the extent provided in the resolution designating such committee.
The Executive Committee shall keep a record of its acts and
proceedings, which shall form a part of the records of the Corporation in the
custody of the Secretary, and all actions of the Executive Committee shall be
reported to the Board of Directors at the next meeting of the Board. The
minute books of the Executive Committee shall at all times be open to the
inspection of any Director.
The Executive Committee shall meet at the call of its chairman
or of any two members of the committee (or if there shall be only one other
member, then at the call of that member). A majority of the Executive
Committee shall constitute a quorum for the transaction of business (or if
there shall only be two members, then both must be present) and the act of a
majority of those present at any meeting at which a quorum is present (or if
there shall be only two members, then they must act unanimously) shall
constitute the act of the committee.
(b) Audit Committee. The Board of Directors at the
annual or any regular or special meeting of the Directors shall, by resolution
adopted by a majority of the whole Board, designate and elect two or more
Directors to constitute an Audit Committee and appoint one of the Directors so
designated as the chairman of the Audit Committee. Membership on the Audit
Committee shall be restricted to those Directors who are independent of the
management of the Corporation and are free from any relationship that, in the
opinion of the Board of Directors, would interfere with the exercise of
independent judgment as a member of the committee. Vacancies in the committee
may be filled by the Board of Directors at any meeting thereof. Each member of
the committee shall hold office until his or her successor has been duly
elected, or until his or her resignation or removal from the Audit Committee by
the Board of Directors, or until he or she otherwise ceases to be a Director.
Any member of the Audit Committee may be removed from the committee by
resolution adopted by a majority of the whole Board of Directors. The
compensation, if any, of members of the committee shall be established by
resolution of the Board of Directors.
The Audit Committee shall be responsible for recommending to
the Board of Directors the appointment or discharge of independent auditors;
reviewing with management of the Corporation and the independent auditors the
terms of engagement of the independent auditors, including the fees, scope and
timing of the audit and any other services rendered by the independent
auditors; reviewing with management of the Corporation and the independent
auditors the Corporation's policies and procedures with respect to internal
auditing, accounting and financial controls; reviewing with management of the
Corporation, the independent statements, audit results and reports and the
recommendations made by any of the auditors with respect to changes in
accounting procedures and internal controls; reviewing the results of studies
of the Corporation's system of internal accounting controls; and performing any
other duties or functions deemed appropriate by the Board of Directors. The
committee shall have the powers and rights necessary or desirable to fulfill
these responsibilities, including the power and right to consult with legal
counsel and to rely upon the opinion of legal counsel. The Audit Committee is
authorized to communicate directly with the Corporation's financial officers
and employees, internal auditors and independent auditors as it deems desirable
and to have the internal auditors or independent auditors perform any
additional procedures as it deems appropriate.
The Audit Committee shall keep a record of its acts and
proceedings, which shall form a part of the records of the Corporation in the
custody of the Secretary, and all actions of the Audit Committee shall be
reported to the Board of Directors at the next meeting of the Board. The
minute books of the Audit Committee shall at all times be open to the
inspection of any Director.
- 37 -
<PAGE> 40
The Audit Committee shall meet at the call of its chairman or
of any two members of the committee (or if there shall be only one other
member, then at the call of that member). A majority of the Audit Committee
shall constitute a quorum for the transaction of business (or if there shall
only be two members, then both must be present) and the act of a majority of
those present at any meeting at which a quorum is present (or if there shall be
only two members, then they must act unanimously) shall constitute the act of
the committee.
(c) Compensation/Stock Option Committee. The Board of
Directors at the annual or any regular or special meeting shall, by resolution
adopted by a majority of the whole Board, designate and elect two or more
Directors to constitute a Compensation/Stock Option Committee. Membership on
the Compensation/Stock Option Committee shall be restricted to disinterested
persons which for this purpose shall mean any Director who, during the time he
or she is a member of the Compensation/Stock Option Committee is not eligible,
and has not at any time within one year prior thereto been eligible, for
selection to participate (other than in a manner as to which the
Compensation/Stock Option Committee has no discretion) in any of the
compensation plans administered by the Compensation/Stock Option Committee.
Vacancies in the committee may be filled by the Board of Directors at any
meeting. Each member of the committee shall hold office until his or her
successor has been duly elected, or until his or her resignation or removal from
the Compensation/Stock Option Committee by the Board of Directors, or until he
or she otherwise ceases to be a Director or a disinterested person. Any member
of the Compensation/Stock Option Committee may be removed by resolution adopted
by a majority of the whole Board of Directors. The compensation, if any, of
the members of the committee shall be established by resolution of the Board of
Directors.
The Compensation/Stock Option Committee shall, from time to
time, recommend to the Board of Directors the compensation and benefits of the
executive officers of the Corporation. The Compensation/Stock Option Committee
shall also make recommendations to the Board of Directors with regard to the
compensation of the Board of Directors and its committees, except the
Compensation/Stock Option Committee.
The Compensation/Stock Option Committee shall keep a record of
its acts and proceedings, which shall form a part of the records of the
Corporation in the custody of the Secretary, and all actions of the
Compensation/Stock Option Committee shall be reported to the Board of Directors
at the next meeting of the Board. The minutes books of the Compensation/Stock
Option Committee shall at all times be open to the inspection of any Director.
The Compensation/Stock Option Committee shall meet at the call
of the chairman of the Compensation/Stock Option Committee or of any two
members of the committee (or if there shall be only one other member, then at
the call of that member). A majority of the Compensation/Stock Option
Committee shall constitute a quorum for the transaction of business (or if
there shall be only two members, then both must be present) and the act of a
majority of those present at any meeting at which a quorum is present (or if
there shall be only two members, then they must act unanimously) shall be the
act of the committee.
(d) Other Committees. The Board of Directors may from
time to time, by resolution or resolutions passed by a majority of the whole
Board, create and appoint other committees with one or more members in addition
to the Executive, Audit and Compensation/Stock Option Committees as it deems
desirable. Each additional committee shall bear the designation, have the
powers and perform any duties, which are not inconsistent with the
Corporation's Certificate of Incorporation or these Bylaws or with Delaware
law, as may be assigned to it by the Board of Directors. The compensation, if
any, of members of any additional committee shall be established by resolution
of the Board of Directors or the Compensation/Stock Option Committee.
Each additional committee shall keep a record of proceedings
and report the same to the Board of Directors to such extent and in such form
as the Board of Directors may require. Unless otherwise provided in the
resolution designating an additional committee, a majority of the members of
any committee may select a chairman of such committee.
(e) Alternate Committee Members. The Board of
Directors, by resolution adopted by a majority of the whole Board, also may
designate one or more additional Directors as alternate members of any
committee to replace any absent or disqualified member at any meeting of that
committee, and at any time may change the membership of any committee or amend
or rescind the resolution designating the committee. In the absence or
disqualification of a member or alternate member of a committee, the member or
members thereof present at any meeting and not disqualified from voting,
whether or not the member or members constitute a quorum, may unanimously
appoint another Director to act at the meeting in the place of any such absent
or disqualified member, provided that the Director so appointed meets any
qualifications stated in these Bylaws or the resolution designating the
committee, or any amendment thereto.
- 38 -
<PAGE> 41
(f) Committee Procedures. Unless otherwise provided in
these Bylaws or in the resolution designating any committee, any committee may
fix its rules or procedures, fix the time and place of its meetings and specify
what notice of meetings, if any, shall be given.
(g) Limitation of Committee Powers. Notwithstanding any
other provision of these Bylaws, no committee of the Board of Directors shall
have the power or authority of the Board of Directors with respect to (i)
recommending an amendment to the Corporation's Certificate of Incorporation,
(ii) approving or recommending to the stockholders any type or form of Business
Combination (as defined in the Delaware General Corporation Law), (iii)
approving or recommending to the stockholders a dissolution of the Corporation
or a revocation of a dissolution, (iv) amending these Bylaws, (v) declaring a
dividend or making any other distribution to the stockholders, (vi) authorizing
the issuance of stock otherwise than pursuant to the grant or exercise of a
stock option under employee stock options of the Corporation or in connection
with a public offering of securities registered under the Securities Act of
1933, or (vii) appointing any member of any committee of the Board of
Directors.
28. Compensation. Directors shall receive compensation and
reimbursement of reasonable expenses as may be fixed or determined from time to
time by the Board of Directors or the Compensation/Stock Option Committee of
the Board of Directors. Members of special or standing committees may also be
allowed compensation and reimbursement for reasonable expenses in connection
with service on the committees as may be fixed from time to time by resolution
of the Board of Directors or the Compensation/Stock Option Committee.
Compensation may be fixed on the basis of meetings attended or on an annual
basis, or both, and may be payable currently or deferred.
29. Resignations. Any Director may resign at any time upon
written notice to the Corporation. Such resignation shall take effect at the
time specified therein or shall take effect upon receipt thereof by the
Corporation if no time is specified therein; and unless otherwise specified
therein, the acceptance of such resignation shall not be necessary to make it
effective.
30. Indemnification of Directors and Officers.
(a) Indemnification in Actions by Third Parties. The
Corporation shall indemnify each person who has been or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative, investigative or
appellate (other than an action by or in the right of the Corporation) by
reason of the fact that such person is or was serving in an Indemnifiable
Capacity against all liabilities and expenses, including, without limitation,
judgments, amounts paid in settlement (provided that such settlement and all
amounts paid in connection therewith are approved in advance by the Corporation
in accordance with Subsection (d) of this Section 30, which approval shall not
be unreasonably withheld or delayed), attorneys' fees, ERISA excise taxes or
penalties, fines and other expenses actually and reasonably incurred by such
person in connection with such action, suit or proceeding (including without
limitation, the investigation, defense, settlement or appeal of such action,
suit or proceeding) if such person acted in good faith and in a manner such
person reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding had no
reasonable cause to believe such person's conduct was unlawful; provided,
however, that the Corporation shall not be required to indemnify or advance
expenses to any such person seeking indemnification or advancement of expenses
in connection with an action, suit or proceeding initiated by such person
(including, without limitation any cross-claim or counterclaim) unless the
initiation of such action, suit or proceeding was authorized by the Board of
Directors of the Corporation or as otherwise provided in Subsection (d) of this
Section 30. The termination of any such action, suit or proceeding by
judgment, order, settlement, conviction or under a plea of nolo contendere or
its equivalent shall not, of itself, create a presumption that the person did
not act in good faith and in a manner which such person reasonably believed to
be in or not opposed to the best interests of the Corporation, and, with
respect to any criminal action or proceeding, that such person had reasonable
cause to believe that such person's conduct was unlawful.
(b) Indemnification in Derivative Action. The
Corporation shall indemnify each person who has been or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding by or in the right of the Corporation to procure a judgment
in its favor by reason of the fact that such person is or was serving in an
Indemnifiable Capacity against amounts paid in settlement thereof (provided
that such settlement and all amounts paid in connection therewith are approved
in advance by the Corporation in accordance with Subsection (d) of this Section
30, which approval shall not be unreasonably withheld or delayed) and all
expenses (including attorneys' fees) actually and reasonably incurred by such
person in connection with the defense or settlement of such action, suit or
proceeding (including, without limitation, the investigation, defense,
settlement or appeal of such action, suit or proceeding) if such person acted
in good faith and in a manner such person reasonably believed to be in or not
opposed to the best interests of the Corporation; provided, however, that no
indemnification under this Subsection (b) shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable for negligence or misconduct in the performance of such person's duty
- 39 -
<PAGE> 42
to the Corporation unless and only to the extent that the court in which the
action, suit or proceeding is brought determines upon application that, despite
the adjudication of liability and in view of all the circumstances of such
case, the person is fairly and reasonably entitled to indemnity for such
expenses which the court shall deem proper.
(c) Indemnification for Success on the Merits or
Otherwise. Notwithstanding the other provisions of this Section 30, to the
extent that a person who is or was serving in an Indemnifiable Capacity has
been successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in Subsections (a) or (b) of this Section 30 (including,
without limitation, the dismissal of any such action, suit or proceeding
without prejudice or, with the prior approval of the Corporation in accordance
with Subsection (d) of this Section 30, the settlement of such action, suit or
proceeding without admission of fault or liability), or in defense of any
claim, issue or matter therein, such person shall be indemnified against any
amounts which may be approved by the Corporation to be paid in settlement of
any such action, suit or proceeding and against expenses (including attorneys'
fees) actually and reasonably incurred by such person in connection therewith.
(d) Determination of Right to Indemnification. Prior to
indemnifying a person pursuant to the provisions of Subsection (a) or (b) of
this Section 30, unless ordered by a court and except as otherwise provided by
Subsection (c) of this Section 30, the Corporation shall determine that such
indemnification is proper in the circumstances because such person has met the
specified standard of conduct entitling such person to indemnification as set
forth under Subsection (a) or (b) of this Section 30. Any determination that a
person shall or shall not be indemnified under the provisions of Subsection (a)
or (b) of this Section 30 shall be made (i) by the Board of Directors by a
majority vote of a quorum consisting of Directors who were not parties to the
action, suit or proceeding, (ii) if such quorum is not obtainable, or even if
obtainable, if a quorum of disinterested Directors so directs, by independent
legal counsel in a written opinion, or (iii) by the stockholders, and such
determination shall be final and binding upon the Corporation.
(e) Advancement of Expenses. Expenses (including
attorneys' fees) actually and reasonably incurred by a person who may be
entitled to indemnification hereunder in defending an action, suit or
proceeding, whether civil, criminal, administrative, investigative or
appellate, shall be paid by the Corporation in advance of the final disposition
of such action, suit or proceeding as authorized by the Board of Directors in
the specific case upon receipt of an undertaking by or on behalf of such person
to repay such amount, unless it shall ultimately be determined that such person
is entitled to indemnification by the Corporation.
(f) Non-Exclusivity. The indemnification and the
advancement of expenses provided by this Section 30 shall not be exclusive of
any other rights to which those seeking indemnification or advancement of
expenses may be entitled under any statute, the Corporation's Certificate of
Incorporation, these Bylaws or any agreement, vote of stockholders or
disinterested directors, policy of insurance or otherwise, both as to action in
their official capacity and as to action in another capacity while holding
their respective offices, and shall not limit in any way any right which the
Corporation may have to make additional indemnifications with respect to the
same or different persons or classes of persons. The indemnification and
advancement of expenses provided by this Section 30 shall continue as to a
person who has ceased to serve in an Indemnifiable Capacity and shall inure to
the benefit of the heirs, executors and administrators of such a person.
(g) Insurance. Upon resolution passed by the Board of
Directors, the Corporation may purchase and maintain insurance on behalf of any
person who is or was serving in an Indemnifiable Capacity against any liability
asserted against such person and incurred by such person in any such capacity,
or arising out of such person's status as such, whether or not the Corporation
would have the power to indemnify such person against such liability under the
provisions of this Section 30.
(h) Definitions. For purposes of this Section 30,
references to:
(A) "the Corporation" shall, if and only if the Board
of Directors so determines, include, in addition to the resulting or surviving
corporation, any constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power and authority to indemnify a
person who serves in an Indemnifiable Capacity so that any person who is or
was serving in an Indemnifiable Capacity as to a constituent corporation shall
stand in the same position under the provisions of this Section 30 with
respect to the resulting or surviving corporation as such person would have
if such person had served the resulting or surviving corporation in the same
capacity;
(B) "Other Enterprise" or "Other Enterprises" shall
include, without limitation, any other corporation, partnership, limited
liability company, joint venture, trust, employee benefit plan or other
enterprise;
(C) "fines" shall include any excise taxes
assessed against a person with respect to an employee benefit plan;
- 40 -
<PAGE> 43
(D) "defense" shall include investigations of any
threatened, pending or completed action, suit or proceeding as well as
appeals thereof and shall also include any defensive assertion of a cross-claim
or counterclaim;
(E) "serving at the request of the Corporation" shall
include any service by a person in an Indemnifiable Capacity which imposes
duties on, or involves services by, such person with respect to an employee
benefit plan, its participants, or beneficiaries; and a person who acted in
good faith and in a manner such person reasonably believed to be in the
interest of the participants and beneficiaries of an employee benefit plan
shall be deemed to have acted in a manner "not opposed to the best interests of
the Corporation" as referred to in this Section 30; and
(F) "Indemnifiable Capacity" shall include service by
a person as a director or officer of the Corporation or, at the Corporation's
request, service by a person as a director, officer, trustee or in any other
comparable position of an Other Enterprise, and may include service by a
person as an employee or agent of the Corporation.
(i) Severability. If any provision of this Section 30
or the application of any such provision to any person or circumstance is
held invalid, illegal or unenforceable for any reason whatsoever, the
remaining provisions of this Section 30 and the application of such provision
to other persons or circumstances shall not be affected thereby and, to the
fullest extent possible, the court findings such provision invalid, illegal
or unenforceable shall modify and construe the provision so as to render it
valid and enforceable as against all persons or entities and to give the
maximum possible protection to persons subject to indemnification hereby
within the bounds of validity, legality and enforceability. Without limiting
the generality of the foregoing, if any person who is or was serving in an
Indemnifiable Capacity is entitled under any provision of this Section 30 to
indemnification by the Corporation for some or a portion of the judgments,
amounts paid in settlement, attorneys' fees, ERISA excise taxes or penalties,
fines or other expenses actually and reasonably incurred by any such person in
connection with any threatened, pending or completed action, suit or proceeding
(including, without limitation, the investigation, defense, settlement or
appeal of such action, suit or proceeding), whether civil, criminal,
administrative, investigative or appellate, but not, however, for all of the
total amount thereof, the Corporation shall nevertheless indemnify such person
for the portion thereof to which such person is entitled.
31. Action Without a Meeting. Unless otherwise
restricted by the Corporation's Certificate of Incorporation or these Bylaws,
any action required or permitted to be taken at any meeting of the Board of
Directors or any committee thereof may be taken without a meeting if written
consent thereto is signed by all members of the Board of Directors or of such
committee, as the case may be, and such written consent is filed with the
minutes of proceedings of the Board of Directors or such committee, as the
case may be.
Officers
32. (a) Officers - Who Shall Constitute. The
officers of the Corporation shall be a Chairman of the Board, a President,
one or more Executive Vice Presidents, one or more Vice Presidents, a
Secretary, a Treasurer, one or more Assistant Secretaries, and one or more
Assistant Treasurers. The Board of Directors shall elect a Chairman of the
Board, a President, a Treasurer and a Secretary at its annual meeting. The
Board then, or from time to time, may also elect one or more of the other
prescribed officers as it may deem advisable, but need not elect any officers
other than a Chairman of the Board, a President, a Treasurer and a Secretary.
The Board may, if it desires, elect or appoint additional officers and
may further identify or describe any one or more of the officers of the
Corporation.
The Chairman of the Board of Directors shall be chosen from among the
Board of Directors, but the other officers of the Corporation need not be
members of the Board of Directors. Any two (2) or more offices may be held by
the same person, except the offices of president and secretary.
An officer shall be deemed qualified when he or she enters upon the
duties of the office to which he or she has been elected or appointed and
furnishes any bond required by the Board of Directors; but the Board may also
require his or her written acceptance and promise faithfully to discharge the
duties of such office.
(b) Term of Office. Each officer of the Corporation
shall hold his or her office at the pleasure of the Board of Directors for such
period of time as the Board may specify at the time of his or her election or
appointment, or until his or her death, resignation or removal by the Board,
whichever first occurs.
(c) Other Agents. The Board from time to time may also
appoint such other agents for the Corporation as it shall deem necessary or
advisable, each of whom shall serve at the pleasure of the Board or for such
period as the Board may specify, and shall exercise such powers, have such
titles and perform such duties
- 41 -
<PAGE> 44
as shall be determined from time to time by the Board or by an officer
empowered by the Board to make such determinations.
(d) Vacancies. If any office becomes vacant by reason
of death, resignation, removal, disqualification or any other reason, or if any
officer of the Corporation, in the judgment of the Board of Directors, is
unable to perform the duties of his or her office for any reason, the Board of
Directors may choose a successor to fill such vacancy or may delegate the
duties of any such vacant office to any other officer or to any Director of the
Corporation for the unexpired portion of the term.
33. The Chairman of the Board. The Chairman of the Board shall
preside at all meetings of the stockholders and Directors at which he or she
may be present and shall have such other duties, powers and authority as may be
prescribed elsewhere in these Bylaws.
The Chairman of the Board may execute all bonds, notes, debentures,
mortgages and other instruments for and in the name of the Corporation, may
cause the corporate seal to be affixed thereto, and may execute all other
instruments for and in the name of the Corporation.
Unless the Board of Directors otherwise provides, the Chairman of the
Board, or any person designated in writing by him or her, shall have full power
and authority on behalf of this Corporation (i) to attend and to vote or take
action at any meeting of the holders of securities of corporations in which
this Corporation may hold securities, and at such meetings shall possess and
may exercise any and all rights and powers incident to being a holder of such
securities, and (ii) to execute and deliver waivers of notice and proxies for
and in the name of the Corporation with respect to any securities held by the
Corporation.
The Chairman of the Board shall, unless the Board otherwise provides,
be ex officio a member of all standing Board committees.
The Board of Directors may delegate such other authority and assign
such additional duties to the Chairman of the Board as it may from time to time
determine.
34. The President. The President shall have such general
executive powers and duties of supervision and management as are usually vested
in the office of the chief executive officer of a corporation and shall be
responsible for the day-to-day management, supervision and administration of
the Corporation.
The President may execute all bonds, notes, debentures, mortgages and
other instruments for and in the name of the Corporation, may cause the
corporate seal to be affixed thereto, and may execute all other instruments for
and in the name of the Corporation.
The President shall perform such other duties as may be specifically
delegated to him or her by the Board of Directors or are conferred by law
exclusively upon him or her, and in the absence, disability, or inability or
refusal to act of the Chairman of the Board, the President shall perform the
duties and exercise the powers of the Chairman of the Board.
35. Executive Vice Presidents and Vice Presidents. In the absence
of the President or in the event of his or her disability, or inability or
refusal to act, any Executive Vice President or Vice President may perform the
duties and exercise the powers of the President until the Board of Directors
otherwise provides. Executive Vice Presidents and Vice Presidents shall
perform such other duties as the Board of Directors may from time to time
prescribe.
36. Secretary and Assistant Secretaries. The Secretary shall
attend all sessions of the Board of Directors and all meetings of the
stockholders, shall prepare minutes of all proceedings at such meetings and
shall preserve them in a minute book of the Corporation. The Secretary shall
perform similar duties for the executive committee and other standing
committees when requested by the Board or any such committee.
The Secretary shall see that all books, records, lists and
information, or duplicates, required to be maintained in Delaware, or
elsewhere, are so maintained.
The Secretary shall keep in safe custody the seal of the Corporation,
and shall have authority to affix the seal to any instrument requiring a
corporate seal and, when so affixed, the Secretary shall attest the seal by his
or her signature. The Board of Directors may give general authority to any
other officer to affix the seal of the Corporation and to attest the affixing
by his or her signature.
- 42 -
<PAGE> 45
The Secretary shall have the general duties, responsibilities and
authorities customarily incident to the office of a secretary of a corporation
and shall perform such other duties and have such other responsibility and
authority as may be prescribed elsewhere in these Bylaws or from time to time
by the Board of Directors or the chief executive officer of the Corporation,
under whose direct supervision he or she shall be.
In the absence of the Secretary or in the event of his or her
disability, or inability or refusal to act, any Assistant Secretary may perform
the duties and exercise the powers of the Secretary until the Board of
Directors of the Corporation otherwise provides. Assistant Secretaries shall
perform such other duties as the Board of Directors may from time to time
prescribe.
37. The Treasurer and Assistant Treasurers. The Treasurer shall
have responsibility for the safekeeping of the funds and securities of the
Corporation, shall keep or cause to be kept full and accurate accounts of
receipts and disbursements in books belonging to the Corporation and shall
keep, or cause to kept, all other books of account and accounting records of
the Corporation. The Treasurer shall deposit or cause to be deposited all
moneys and other valuable effects in the name and to the credit of the
Corporation in such depositories as may be designated by the Board of Directors
or by an officer of the Corporation to whom such authority has been granted by
the Board.
The Treasurer shall disburse, or permit to be disbursed, the funds of
the Corporation as may be ordered, or authorized generally, by the Board of
Directors of the Corporation, and shall render to the president of the
Corporation and the Directors whenever they may require it, an account of all
his or her transactions as Treasurer and of those under his or her
jurisdiction, and of the financial condition of the Corporation.
The Treasurer shall perform such other duties and shall have such
other responsibility and authority as may be prescribed elsewhere in these
Bylaws or from time to time by the Board of Directors.
The Treasurer shall have the general duties, powers and
responsibility customarily incident to the office of a treasurer of a
corporation and shall, unless otherwise provided by the Board, be the chief
financial and accounting officer of the Corporation.
In the absence of the Treasurer or in the event of his or her
disability, or inability or refusal to act, any Assistant Treasurer may perform
the duties and exercise the powers of the Treasurer. Assistant Treasurers
shall perform such other duties and have such other authority as the Board of
Directors may from time to time prescribe.
38. Duties of Officers May be Delegated. If any officer of the
Corporation be absent or unable to act, or for any other reason that the Board
of Directors of the Corporation may deem sufficient, the Board may delegate,
for the time being, some or all of the functions, duties, powers and
responsibilities of any officer to any other officer, or to any other agent or
employee of the Corporation or other responsible person, provided a majority of
the whole Board concurs.
39. Removal and Limitation of Authority. Any officer or agent
elected or appointed by the Board of Directors, and any employee, may be
removed or discharged by the Board, or the authority of such officer, agent or
employee may be limited by the Board, whenever in its judgment the best
interests of the Corporation would be served thereby, but such removal or
discharge or limitation of authority shall be without prejudice to the contract
rights, if any, of the person so removed or discharged or whose authority is
limited.
40. Salaries and Compensation. Salaries and compensation of all
elected officers of the Corporation shall be fixed, increased or decreased by
the Board of Directors, but this power, except as to the salary or compensation
of the Chairman of the Board and the President, may, unless prohibited by law,
be delegated by the Board of Directors to the Chairman of the Board or the
President, or may be delegated to a committee of the Board of Directors.
Salaries and compensation of all other appointed officers, agents and employees
of the Corporation may be fixed, increased or decreased by the Board of
Directors, but until action is taken with respect thereto by the Board of
Directors, the same may be fixed, increased or decreased by the President or
such other officer or officers as may be empowered by the Board of Directors to
do so.
41. Delegation of Authority to Hire, Discharge and Designate
Duties. The Board of Directors of the Corporation from time to time may
delegate to the Chairman of the Board, the President or other officer or
executive employee of the Corporation, authority to hire, discharge and fix and
modify the duties, salary or other compensation of employees of the Corporation
under their jurisdiction, and the Board may delegate to such officer or
executive employee similar authority with respect to obtaining and retaining
for the Corporation the services of attorneys, accountants and other experts.
STOCK
- 43 -
<PAGE> 46
42. Certificates for Shares of Stock. Certificates representing
shares of stock of the Corporation shall be issued in numerical order, and each
stockholder shall be entitled to a certificate signed by, or in the name of the
Corporation by, the Chairman of the Board or the President or a Vice President,
and by the Treasurer or an Assistant Treasurer or the Secretary or an Assistant
Secretary, certifying the number of shares owned by him, her or it. Any of or
all the signatures on such certificate may be a facsimile. In case any
officer, transfer agent or registrar who has signed or whose facsimile
signature has been placed upon a certificate shall have ceased to be such
officer, transfer agent or registrar before such certificate is issued, such
certificate may nevertheless be issued by the Corporation with the same effect
as if such officer, transfer agent or registrar who signed such certificate, or
whose facsimile signature shall have been used thereon, had not ceased to be
such officer, transfer agent or registrar of the Corporation.
43. Transfers of Stock. Transfers of shares of stock of the
Corporation shall be made only upon the stock transfer books of the
Corporation, kept at the office of the Corporation or of a transfer agent
designated to transfer the class of stock, and before a new certificate is
issued the old certificate shall be surrendered for cancellation. Until and
unless the Board appoints some other person, firm or corporation as its
transfer agent (and upon the revocation of any such appointment, thereafter
until a new appointment is similarly made), the Secretary of the Corporation
shall be the transfer agent of the Corporation without the necessity of any
formal action of the Board of Directors, and the Secretary, or any person
designated by him or her, shall perform all of the duties thereof.
44. Registered Stockholders. Only registered stockholders shall
be entitled to be treated by the Corporation as the holders and owners in fact
of the shares standing in their respective names, and the Corporation shall not
be bound to recognize any equitable or other claim to or interest in such
shares on the part of any other person, whether or not it shall have express or
other notice thereof, except as expressly provided by applicable federal law or
by the laws of Delaware.
45. Lost Certificates. The Board of Directors may direct that a
new certificate or certificates representing shares of stock be issued in place
of any certificate or certificates theretofore issued by the Corporation,
alleged to have been lost, stolen or destroyed, upon the making of an affidavit
of that fact by the person claiming the certificate or certificates to be lost,
stolen or destroyed. When authorizing such issue of a replacement certificate
or certificates, the Board of Directors may, in its discretion and as a
condition precedent to the issuance thereof, require the owner of such lost,
stolen or destroyed certificate or certificates, or his, her or its legal
representative, to give the Corporation and its transfer agents and registrars,
if any, a bond in such sum as it may direct to indemnify it against any claim
that may be made against it with respect to the certificate or certificates
alleged to have been lost, stolen or destroyed or with respect to the issuance
of such new certificate or certificates.
46. Regulations. The Board of Directors shall have power and
authority to make all such rules and regulations as it may deem expedient
concerning the issue, transfer, conversion and registration of certificates
representing shares of stock of the Corporation, not inconsistent with the laws
of Delaware, the Corporation's Certificate of Incorporation and these Bylaws.
47. Treasury Stock. All issued and outstanding stock of the
Corporation that may be purchased or otherwise acquired by the Corporation
shall be Treasury Stock, and the Directors of the Corporation shall be vested
with authority to resell said shares for such price and to such person or
persons as the Board of Directors may determine. Such stock shall neither vote
nor participate in dividends while held by the Corporation.
48. Fixing Record Date. In order that the Corporation may
determine the stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, or to express consent to corporate
action in writing without a meeting, or entitled to receive payment of any
dividend or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or exchange of stock
or for the purpose of any other lawful action, the Board of Directors may close
the stock transfer books of the Corporation for a period not exceeding sixty
(60) days preceding the date for payment of any dividend, or the date for such
meeting, or the date when any other action is to take effect; provided,
however, that in lieu of closing the stock transfer books as aforesaid, the
Board of Directors may fix, in advance, a record date, which shall not be more
than sixty (60) days nor less than ten (10) days before the date of such
meeting, nor more than sixty (60) days prior to any other action. A
determination of stockholders of record entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the Board of Directors may fix a new record date for
the adjourned meeting.
- 44 -
<PAGE> 47
DIVIDENDS AND FINANCE
49. Dividends. Dividends upon the outstanding shares of stock of
the Corporation, subject to the provisions of the Certificate of Incorporation
and of any applicable law and of these Bylaws, may be declared by the Board of
Directors at any meeting. Subject to such provisions, dividends may be paid in
cash, in property or in shares of stock of the Corporation.
50. Creation of Reserves. The Directors may set apart out of any
of the funds of the Corporation available for dividends a reserve or reserves
for any proper purpose, or may abolish any such reserve in the manner in which
it was created.
51. Depositories. The moneys of the Corporation shall be
deposited in the name of the Corporation in such bank or banks or other
depositories as the Board of Directors shall designate, and shall be drawn out
only by check signed by persons designated by resolution adopted by the Board
of Directors, except that the Board of Directors may delegate said powers in
the manner hereinafter provided in this Section 51. The Board of Directors may
by resolution authorize an officer or officers of the Corporation to designate
any bank or banks or other depositaries in which moneys of the Corporation may
be deposited, and to designate the persons who may sign checks drawn on any
particular account or accounts of the Corporation, whether created by direct
designation of the Board of Directors or by an authorized officer or officers
as aforesaid.
52. Fiscal Year. The Board of Directors shall have power to fix
and from time to time change the fiscal year of the Corporation. In the
absence of action by the Board of Directors, the fiscal year of the Corporation
shall end each year on the date which the corporation treated as the close of
its first fiscal year, until such time, if any, as the fiscal year shall be
changed by the Board of Directors.
BOOKS AND RECORDS
53. Books, Accounts and Records. The books, accounts and records
of the Corporation, except as may be otherwise required by the laws of the
State of Delaware, may be kept outside of the State of Delaware at such place
or places as the Board of Directors may from time to time determine. The Board
of Directors shall determine whether, to what extent and the conditions upon
which the books, accounts and records of the Corporation, or any of them, shall
be open to the inspection of the stockholders, and no stockholder shall have
any right to inspect any book, account or record of the Corporation, except as
conferred by law or by resolution of the stockholders or Directors.
MISCELLANEOUS
54. Waiver of Notice. Whenever any notice is required to be given
under the provisions of the statutes of Delaware or of the Corporation's
Certificate of Incorporation or of these Bylaws, a waiver thereof in writing,
signed by the person or persons entitled to said notice, whether before or
after the time stated therein, shall be deemed equivalent to notice.
Attendance of a person at a meeting shall constitute a waiver of notice of such
meeting, except when the person attends a meeting for the express purpose of
objecting, at the beginning of the meeting, to the transaction of any business
because the meeting is not lawfully called or convened. Neither the business
to be transacted at, nor the purpose of, any regular or special meeting of the
stockholders, Directors, or members of a committee of Directors need be
specified in any written waiver of notice unless so required by the
Corporation's Certificate of Incorporation or these Bylaws.
55. Contracts. The Board of Directors may authorize any officer
or officers, or agent or agents, to enter into any contract or execute and
deliver any instrument in the name of and on behalf of the Corporation, and
such authority may be general or confined to specific instances.
56. Transaction of Business. The Corporation, or any division or
department into which any of the business or operations of the Corporation may
have been divided, may transact business and execute contracts under its own
corporate name, or, with the approval of the Chairman of the Board or the
President, under its division or department name, a trademark or a tradename.
57. Amendments. These Bylaws may be altered, amended or repealed,
or new bylaws may be adopted, only in the manner provided in the Corporation's
Certificate of Incorporation.
- 45 -
<PAGE> 48
ANNEX D
MARK VII, INC.
1995 OMNIBUS STOCK INCENTIVE PLAN
AS AMENDED BY AMENDMENT NO. 1*
* CHANGES TO THE 1995 OMNIBUS STOCK INCENTIVE PLAN RESULTING FROM AMENDMENT
NO. 1 ARE MARKED HEREIN BY SURROUNDING ASTERISKS AND BRACKETS (*[ ]*).
- 46 -
<PAGE> 49
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE I - PURPOSE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Establishment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II - DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.1 Award . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.2 Award Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.3 Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.4 Change of Control Event . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.5 Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.6 Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.7 Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.8 Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.9 Date of Grant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.10 Director Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.11 Director Stock Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.12 Eligible Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.13 Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.14 Fair Market Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.15 Incentive Stock Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.16 Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.17 Other Incentive Award . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.18 Participant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.19 Performance Share Award . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.20 Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.21 Restricted Stock Award . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.22 Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE III - ADMINISTRATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.1 Administration by Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.2 Committee to Make Rules and Interpret Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.3 Committee Members Ineligible . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE IV - GRANT OF AWARDS; SHARES SUBJECT TO THE PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4.1 Committee to Grant Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4.2 Six-Month Holding Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE V - ELIGIBILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE VI - STOCK OPTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
6.1 Grant of Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
6.2 Conditions of Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
6.3 Options to Non-Employee Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE VII - PERFORMANCE SHARE AWARDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
7.1 Grant of Performance Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
7.2 Conditions of Performance Share Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
</TABLE>
- 47 -
<PAGE> 50
<TABLE>
<S> <C>
ARTICLE VIII - RESTRICTED STOCK AWARDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
8.1 Grant of Restricted Stock Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
8.2 Conditions of Restricted Stock Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE IX - OTHER INCENTIVE AWARDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
9.1 Grant of Other Incentive Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
9.2 Conditions of Other Incentive Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
9.3 Stock Awards to Non-Employee Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE X - STOCK ADJUSTMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE XI - GENERAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
11.1 Amendment or Termination of Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
11.2 Dividends and Dividend Equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
11.3 Termination of Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
11.4 Nonassignability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
11.5 Withholding Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
11.6 Forfeiture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
11.7 Change of Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
11.8 Amendments to Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
11.9 Regulatory Approval and Listings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
11.10 Right to Continued Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
11.11 Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
11.12 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
11.13 Reliance on Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
11.14 Relationship to Other Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
11.15 Compliance with the Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
11.16 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
11.17 Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
11.18 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
</TABLE>
- 48 -
<PAGE> 51
MARK VII, INC.
1995 OMNIBUS STOCK INCENTIVE PLAN
ARTICLE I
PURPOSE
1.1 Purpose. The Plan is designed to enable personnel of the
Corporation to acquire or increase their ownership of Common Stock on
reasonable terms. The opportunity so provided is intended to foster in
participants a strong incentive to put forth maximum effort for the continued
success and growth of the Corporation, to aid in retaining individuals who put
forth such efforts, and to assist in attracting the best available individuals
in the future. So that the appropriate incentive can be provided, the Plan
provides for granting Stock Options, Restricted Stock Awards, Performance
Shares, and/or Other Incentive Awards to employees of the Corporation and its
Subsidiaries on the terms and subject to the conditions set forth in the Plan.
1.2 Establishment. The Plan is effective as of the date it is
approved by the shareholders of the Corporation (the "Effective Date"), and
subject to the provisions of Section 11.1, Awards (as defined in Section 2.1)
may be granted hereunder for a period of ten years after such date.
The Plan shall continue in effect until all matters relating to the
payment of awards and administration of the Plan have been settled.
ARTICLE II
DEFINITIONS
2.1 "Award" means, individually, collectively or in tandem, any
Option, Restricted Stock Award, Performance Share Award, or Other Incentive
Award granted under the Plan by the Committee pursuant to such terms,
conditions, restrictions, and/or limitations, if any, as the Committee may
establish by the Award Notice or otherwise.
2.2 "Award Notice" means any written instrument that establishes
the terms, conditions, restrictions, and/or limitations applicable to an Award
in addition to those established by this Plan and by the Committee's exercise
of its administrative powers.
2.3 "Board" means the Board of Directors of the Corporation.
2.4 "Change of Control Event" means each of the following:
(a) any person or entity is or becomes the beneficial
owner (as defined in the Exchange Act), directly or indirectly, of securities
of the Corporation (excluding securities acquired directly from the Corporation
or its affiliates) representing 25% or more of the combined voting power of the
Corporation's then outstanding securities (other than any beneficial owner of
such percentage or more of such voting power existing as of the Effective
Date); or
(b) during any period of two consecutive years (not
including any period prior to the Effective Date of the Plan), individuals who
at the beginning of such period constitute the Board, and any new director
(other than a director designated by a person or entity who has entered into an
agreement with the Corporation to effect a transaction described in clause (a),
(c) or (d) of this paragraph) whose election by the Board or nomination for
election by the Corporation's shareholders was approved by a vote of at least
two-thirds of the directors then still in office who either were directors at
the beginning of the period or whose election or nomination for election was
previously approved, cease for any reason to constitute a majority thereof; or
(c) the shareholders of the Corporation approve a merger
or consolidation of the Corporation with any other corporation, other than (i)
a merger or consolidation which would result in the voting securities of the
Corporation outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting securities
of the surviving entity), in combination with the ownership of any trustee or
other fiduciary holding securities under an employee benefit plan of the
Corporation, at least 75% of the combined voting power of the voting securities
of the Corporation or such surviving entity outstanding immediately after such
merger or consolidation, or (ii) a merger or consolidation effected to
implement a recapitalization of the Corporation
- 49 -
<PAGE> 52
(or similar transaction) in which no person or entity acquires more than 50% of
the combined voting power of the Corporation's then outstanding securities; or
(d) the shareholders of the Corporation approve a plan
of complete liquidation of the Corporation or an agreement for the sale or
disposition by the Corporation of all or substantially all the Corporation's
assets.
2.5 "Code" means the Internal Revenue Code of 1986, as amended.
Reference in the Plan to any section of the Code shall be deemed to include any
amendments or successor provisions to such section and any regulations under
such section.
2.6 "Committee" means the Stock Option Committee of the Board, or
such other committee designated by the Board, authorized to administer the Plan
under Article III hereof. The Committee shall consist of not less than two
members, each of whom is, and within the 12 months preceding his or her
appointment to the Committee has been, a "disinterested person" within the
meaning of Rule 16b-3 promulgated under Section 16 of the Exchange Act.
2.7 "Common Stock" means the common stock, par value $.10 per
share, of the Corporation, and after substitution, such other stock as shall be
substituted therefor as provided in Article X.
2.8 "Corporation" means Mark VII, Inc.
2.9 "Date of Grant" means the date on which the granting of an
Award is authorized by the Committee or such later date as may be specified by
the Committee in such authorization.
2.10 "Director Options" means non-qualified Options awarded under
Section 6.3 of the Plan.
2.11 "Director Stock Awards" means an Award granted under Section
9.3 of the Plan.
2.12 "Eligible Employee" means any employee of the Corporation or a
Subsidiary who satisfies all of the requirements of Article V.
2.13 "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
2.14 "Fair Market Value" means (A) during any such time as the
Common Stock is not listed upon an established stock exchange or the
NASDAQ/National Market System, the mean between dealer "bid" and "ask" prices
of the Common Stock in the over-the-counter market on the day for which such
value is to be determined, as reported by the National Association of
Securities Dealers, Inc., or (B) during such time as the Common Stock is listed
upon an established stock exchange or exchanges or the NASDAQ/National Market
System, the highest closing price of the Common Stock on such stock exchange or
exchanges or the last sale price on the NASDAQ/National Market System on the
day for which such value is to be determined, or if no sale of the Common Stock
shall have been made on any stock exchange or the NASDAQ/National Market System
that day, on the next preceding day on which there was a sale of such Common
Stock.
2.15 "Incentive Stock Option" means an Option within the meaning of
Section 422 of the Code.
2.16 "Option" means an Award granted under Article VI of the Plan
and includes both non-qualified Options and Incentive Stock Options to purchase
Stock.
2.17 "Other Incentive Award" means an Award granted under Article
IX of the Plan.
2.18 "Participant" means an Eligible Employee of the Corporation or
a Subsidiary to whom an Award has been granted by the Committee under this
Plan.
2.19 "Performance Share Award" means an Award granted under Article
VII of the Plan.
2.20 "Plan" means the Mark VII, Inc. 1995 Omnibus Stock Incentive
Plan.
2.21 "Restricted Stock Award" means an Award granted under Article
VIII of the Plan.
2.22 "Subsidiary" means any corporation of which a majority of the
outstanding voting stock or voting power is beneficially owned directly or
indirectly by the Corporation.
- 50 -
<PAGE> 53
ARTICLE III
ADMINISTRATION
3.1 Administration by Committee. The Committee shall administer
the Plan. Unless otherwise provided in the bylaws of the Corporation or the
resolutions adopted from time to time by the Board establishing the Committee,
the Board may from time to time remove members from, or add members to, the
Committee; vacancies on the Committee, howsoever caused, shall be filled by the
Board. The Committee shall designate one of its members as Chairman. It shall
hold its meetings at such times and places as it may determine. A majority
of its members shall constitute a quorum, and all determinations of the
Committee shall be made by a majority of its members at the time in office.
Any determination reduced to writing and signed by all members shall be fully
as effective as if it had been made by a majority vote at a meeting duly called
and held. The Committee may appoint a Secretary, who need not be a member of
the Committee, and may establish and amend such rules and regulations for the
conduct of its business as it shall deem advisable.
Subject to the provisions of the Plan, the Committee shall have exclusive
power to:
(a) Select the Eligible Employees to participate in the
Plan.
(b) Determine the time or times when Awards will be
made.
(c) Determine the form of an Award, whether a Stock
Option, a Restricted Stock Award, a Performance Share Award, or Other
Incentive Award established by the Committee in accordance with Article
IX below, the number of shares of Common Stock subject to the Award or
with reference to which the Award is determined, all the terms,
conditions (including performance requirements), restrictions and/or
limitations, if any, of an Award, including the time and conditions of
exercise or vesting, and the terms of any Award Notice, which may include
the waiver or amendment of prior terms and conditions or acceleration or
early vesting or payment of an Award under certain circumstances
determined by the Committee.
(d) Determine whether Awards will be granted singly, in
combination or in tandem.
(e) Grant waivers of Plan terms, conditions,
restrictions and limitations.
(f) Accelerate the vesting, exercise, or payment of an
Award or the performance period of an Award when such action or actions
would be in the best interest of the Corporation.
(g) Take any and all other action it deems necessary or
advisable for the proper operation or administration of the Plan.
The Committee shall also have the authority to grant Awards in
replacement of Awards previously granted under this Plan or any other executive
compensation plan of the Corporation or a Subsidiary.
3.2 Committee to Make Rules and Interpret Plan. The Committee
shall have the authority, subject to the provisions of the Plan, to establish,
adopt, or revise such rules and regulations and to make all such determinations
relating to the Plan as it may deem necessary or advisable for the
administration of the Plan. The Committee's interpretation of the Plan or any
Awards granted pursuant thereto and all decisions and determinations by the
Committee with respect to the Plan shall be final, binding, and conclusive on
all parties unless otherwise determined by the Board.
3.3 Committee Members Ineligible. No Committee member shall be
eligible to participate in the Plan except to the extent set forth in Sections
6.3 and 9.3.
ARTICLE IV
GRANT OF AWARDS; SHARES
SUBJECT TO THE PLAN
4.1 Committee to Grant Awards. The Committee may, from time to
time, grant Awards to one or more Eligible Employees, provided, however, that:
- 51 -
<PAGE> 54
(a) Subject to Article X, an aggregate of 600,000 shares
of Common Stock are hereby reserved for use in connection with Awards
under the Plan.
(b) Any shares of Common Stock related to Awards which
terminate by expiration, forfeiture, cancellation, or otherwise without
the issuance of shares of Common Stock, are settled in cash in lieu of
Common Stock, or are exchanged in the Committee's discretion for Awards
not involving Common Stock, shall be available again for grant under the
Plan, so long as the holder of any such Award received no benefits of
Common Stock ownership (including but not limited to dividends) from the
shares of Common Stock related to such Award.
(c) Any shares of Common Stock issued by the Corporation
through the assumption or substitution of outstanding grants from an
acquired company shall reduce the shares available for grants under the
Plan.
(d) Common Stock delivered by the Corporation in payment
of any Award under the Plan may be authorized and unissued Common Stock
or Common Stock held in the treasury of the Corporation or may be
purchased on the open market or by private purchase.
(e) The Committee shall, in its sole discretion,
determine the manner in which fractional shares arising under this Plan
shall be treated.
4.2 Six-Month Holding Period. With respect to Awards granted
hereunder to any person who is, or within the preceding six months was, subject
to the provisions of Section 16 of the Exchange Act (an "Insider Participant"),
each such Award which is an equity security must be held and not transferred by
such Insider Participant for a period of six months from the Date of Grant.
Nothing in this Section 4.2 shall be deemed to prohibit the exercise of Options
within the six month period following the Date of Grant, but the shares of
Common Stock received by an Insider Participant pursuant to the exercise of an
Option must be held and not transferred for a period of six months from the
Date of Grant of the Option so exercised.
ARTICLE V
ELIGIBILITY
*[Awards may be granted under the Plan to any employee of the Corporation
or a Subsidiary.]* Officers shall be employees for this purpose, whether or
not they are also directors. Awards may also be granted to directors who are
not employees of the Corporation or its Subsidiaries ("Non-Employee
Directors"), but only to the extent set forth in Sections 6.3 and 9.3 hereof.
Awards may be granted to Eligible Employees whether or not they have received
prior Awards under the Plan or under any previously adopted plan, and whether
or not they are participants in other benefit plans of the Corporation.
Subject to the provisions of the Plan, the Committee shall, from time to
time, select from the Eligible Employees those to whom Awards shall be granted
and shall determine the type or types of Awards to be made and shall establish
in the related Award Notices the terms, conditions, restrictions and/or
limitations, if any, applicable to the Awards in addition to those set forth in
the Plan and the administrative rules and regulations issued by the Committee.
ARTICLE VI
STOCK OPTIONS
6.1 Grant of Options. The Committee may, from time to time,
subject to the provisions of the Plan and such other terms and conditions as it
may determine, grant Options to Eligible Employees. These Options may be
Incentive Stock Options or non-qualified Options, or a combination of both.
Each grant of an Option shall be evidenced by an Award Notice executed by the
Corporation and the Participant, and shall contain such terms and conditions
and be in such form as the Committee may from time to time approve, subject to
the requirements of Section 6.2.
6.2 Conditions of Options. Each Option so granted shall be
subject to the following conditions:
(a) Exercise price. As limited by Section 6.2(e) below,
each Option shall state the exercise price which shall be set by the
Committee at the Date of Grant, which price shall not, in the case of
non-qualified Options, be less than *[100%]* of the Fair Market Value of
the Common Stock on the Date of Grant. *[Furthermore, the
- 52 -
<PAGE> 55
exercise price of any Option granted pursuant to the provisions of the
Plan may not be increased or decreased at any time after such Option is
granted.]*
(b) Form of payment. The exercise price of an Option
may be paid: (i) in cash or by check, bank draft or money order payable
to the order of the Corporation; (ii) in shares of Common Stock; (iii) a
combination of the foregoing; or (iv) such other consideration as the
Committee may deem appropriate. In addition to the foregoing, subject to
the discretion of the Committee, any Option granted under the Plan may be
exercised by a broker-dealer acting on behalf of a Participant if (A) the
broker-dealer has received from the Participant or the Corporation a
fully- and duly-endorsed agreement evidencing such Option and
instructions signed by the Participant requesting the Corporation to
deliver the shares of Common Stock subject to such Option to the
broker-dealer on behalf of the Participant and specifying the account
into which such shares should be deposited, (B) adequate provision has
been made with respect to the payment of any withholding taxes due upon
such exercise, and (C) the broker-dealer and the Participant have
otherwise complied with Section 220.3(e)(4) of Regulation T, 12 CFR, Part
220 and any successor rules and regulations applicable to such exercise
("Cashless Exercise"); provided, however, that an Insider Participant may
not elect to utilize a Cashless Exercise within six months of the date
the Option is granted (unless death or disability occurs prior to the
expiration of such six-month period), and any such election must be made
during any period beginning on the third business day following the date
of release of a summary statement of the Corporation's quarterly or
annual sales and earnings and ending on the twelfth business day
following such date (the "Window Period"). The Committee shall establish
appropriate methods for accepting Common Stock, and may impose such
conditions as it deems appropriate on the use of such Common Stock in
payment of the exercise price. Common Stock used to exercise an Option
shall be valued at its then Fair Market Value.
(c) Exercise of Options. Options granted under the Plan
shall be exercisable, in whole or in installments, and at such times, and
shall expire at such time, as shall be provided by the Committee in the
Award Notice. Exercise of an Option shall be by written notice stating
the election to exercise in the form and manner determined by the
Committee. Every share of Common Stock acquired through the exercise of
an Option shall be deemed to be fully paid at the time of exercise and
payment of the exercise price.
(d) Other terms and conditions. Among other conditions
that may be imposed by the Committee, if deemed appropriate, are those
relating to: (i) the period or periods and the conditions of
exercisability of any Option; (ii) the minimum periods during which
Participants must be employed by the Corporation or its Subsidiaries, or
must hold Options before they may be exercised; (iii) the minimum periods
during which shares acquired upon exercise must be held before sale or
transfer shall be permitted; (iv) conditions under which such Options or
shares may be subject to forfeiture; and (v) the frequency of exercise or
the minimum or maximum number of shares that may be acquired at any one
time.
(e) Special restrictions relating to Incentive Stock
Options. Options issued in the form of Incentive Stock Options shall, in
addition to being subject to all applicable terms, conditions,
restrictions and/or limitations established by the Committee, comply with
the requirements of Section 422 of the Code (or any successor section
thereto), including, without limitation, the requirement that the
exercise price of an Incentive Stock Option not be less than 100% of the
Fair Market Value of the Common Stock on the Date of Grant, the
requirement that each Incentive Stock Option, unless sooner exercised,
terminated, or cancelled, expire no later than ten years from its Date of
Grant, and the requirement that the aggregate Fair Market Value
(determined on the Date of Grant) of the Common Stock with respect to
which Incentive Stock Options are exercisable for the first time by a
Participant during any calendar year (under this Plan or any other Plan
of the Corporation or any Subsidiary) not exceed $100,000.
(f) Application of funds. The proceeds received by the
Corporation from the sale of Common Stock pursuant to Options will be
used for general corporate purposes.
6.3 Options to Non-Employee Directors. Notwithstanding any other
provision herein, no Options shall be granted hereunder to Non-Employee
Directors other than the Director Options granted pursuant to this Section 6.3.
An option to purchase 2,000 shares of Common Stock shall be automatically
granted on each anniversary of the Effective Date to each person who is a
Non-Employee Director on the Effective Date if he or she continues to serve in
such capacity on each such anniversary. An individual who becomes a
Non-Employee Director subsequent to the Effective Date shall be granted an
option to purchase 2,000 shares of Common Stock on the date he or she becomes
a Non-Employee Director, and on each anniversary of the Effective Date
occurring in a calendar year subsequent to the year in which he or she becomes
a Non-Employee Director if he or she continues to serve in such capacity on
each such anniversary.
Each Director Option shall be evidenced by an Award Notice executed by
the Corporation and the Non-Employee Director, and shall include the following
terms and provisions:
- 53 -
<PAGE> 56
(a) Each Director Option to purchase shares of Common
Stock shall be exercisable immediately (subject to Section 4.2) when the
Director Option is granted. The Option exercise price per share shall be
equal to the Fair Market Value of one share of Common Stock on the date
the Director Option is granted. The period within which each Option may
be exercised shall expire three years from the date the option is granted
(the "Option Period"), unless it expires sooner due to the death or
termination of the directorship of the optionee, or if fully exercised
prior to the end of such three year period. No Director Options shall be
granted hereunder after the ten-year anniversary of the Effective Date.
(b) If the directorship of an optionee is terminated
within the Option Period for any reason other than (i) the death of the
optionee or (ii) on account of any act of fraud, intentional
misrepresentation, embezzlement, misappropriation, or conversion of
assets or opportunities of the Corporation or any of its Subsidiaries,
the Director Option may be exercised, to the extent the optionee was able
to do so at the date of termination of the directorship, within the
Option Period.
(c) If an optionee dies during the Option Period while a
director of the Corporation, or if an optionee dies within three months
of serving as a Non-Employee Director, the Director Option may be
exercised, to the extent the optionee was entitled to exercise such
Option at the date of his or her death, within one year after such death
(if otherwise within the Option Period), by the executor or the
administrator of the estate of the optionee, or by the person or persons
who shall have acquired the Director Option directly from the optionee by
a bequest or an inheritance.
(d) If the directorship of the optionee is terminated
within the Option Period for any of the reasons enumerated in Section
6.3(b)(ii), such Director Options shall automatically terminate as of the
date of termination of such directorship.
(e) Payment of the option price shall be made in full in
cash or by check, bank draft or money order payable to the order of the
Corporation concurrently with the exercise of the option.
(f) Such Director Option shall be nontransferable by the
optionee other than by will or the laws of descent and distribution, and
shall be exercisable during the optionee's lifetime only by the optionee
or the optionee's guardian or legal representative.
ARTICLE VII
PERFORMANCE SHARE AWARDS
7.1 Grant of Performance Shares. Grants of Performance Share
Awards may be made by the Committee to any Eligible Employee during the term of
the Plan. Each Performance Share Award shall represent one share of Common
Stock. Each Performance Share Award shall be evidenced by an Award Notice.
There may be more than one award in existence at any one time for any
Participant and performance periods for separate Performance Share Awards may
differ.
The Performance Shares will be paid out in full or in part on the basis
of performance of the Corporation following the beginning of the Corporation's
fiscal year in which the Performance Share Award is made as hereinafter set
forth. In determining the size of Performance Share Awards, the Committee
shall take into account a Participant's responsibility level, performance,
potential, and cash compensation level, as well as such other considerations as
it deems appropriate. If any Performance Share Award shall be forfeited,
cancelled, or not paid out in full, such Performance Share Award may again be
awarded under the Plan in accordance with Article VII.
- 54 -
<PAGE> 57
7.2 Conditions of Performance Share Awards. A Performance Share
Award shall be subject to the following terms and conditions:
(a) Performance Share Account. Performance Share Awards
shall be credited to a Performance Share account to be maintained for
each holder. Each Performance Share Award shall be deemed to be the
equivalent of one share of Common Stock of the Corporation. A
Performance Share Award under the Plan shall not entitle the holder to
any interest in the Common Stock or to any dividend, voting or other
rights of a shareholder. The value of the Performance Shares in a
holder's Performance Share account at the time of Award or the time of
payment shall be the Fair Market Value at any such time of an equivalent
number of shares of the Common Stock.
(b) Performance Period and Criteria. Performance Shares
shall be contingent upon the attainment during a performance period of
certain performance objectives. The length of the performance period for
each Performance Share Award, the performance objectives to be achieved
during the Performance Share Award period and the measure of whether and
to what degree such objectives have been attained shall be conclusively
determined by the Committee in the exercise of its discretion. The
Committee may revise performance objectives at such times as it deems
appropriate during the Performance Share Award period in order to take
into account or into consideration any unforeseen events or changes in
circumstances; provided, however, that any such revision which is adverse
to the holder of a Performance Share Award shall require the holder's
consent.
(c) Payment of Award. Following the end of the
Performance Share Award period, the holder of a Performance Share Award
shall be entitled to receive payment of an amount based on the
achievement of the performance measures for such Performance Share Award
period. In the event that a recipient of a Performance Share Award is an
Insider Participant, no Performance Share Award shall be payable within
the first six months from the Date of Grant of such Performance Share
Award. The payment to which a holder of a Performance Share Award shall
be entitled at the end of a Performance Share Award period shall be a
dollar amount equal to the Fair Market Value of the number of shares of
Common Stock equal to the number of Performance Shares earned and payable
to such holder.
The Committee may authorize payment of a Performance Share
Award in any combination of cash and Common Stock or all in cash or all
in Common Stock, as it deems appropriate, provided, however, that in the
event a payee is an Insider Participant, no cash payment may be made to
such person except during any period beginning on the third business day
following the date of release of a summary statement of the Corporation's
quarterly or annual sales and earnings and ending on the twelfth business
day following such date. Such shares may include any restrictions on
transfer and forfeiture provisions as the Committee, from time to time,
deems appropriate.
(d) Additional terms and conditions. The Committee may,
by way of the Award Notice or otherwise, determine such other terms,
conditions, restrictions and/or limitations, if any, of any Performance
Share Award, provided they are not inconsistent with the Plan.
ARTICLE VIII
RESTRICTED STOCK AWARDS
8.1 Grant of Restricted Stock Awards. The Committee may grant a
Restricted Stock Award to any Eligible Employee. Restricted Stock Awards shall
be awarded in such number and at such times during the term of the Plan as the
Committee shall determine. Each Restricted Stock Award may be evidenced in
such manner as the Committee deems appropriate, including, without limitation,
book-entry registration or issuance of a stock certificate or certificates, and
by an Award Notice setting forth the terms of such Restricted Stock Award.
- 55 -
<PAGE> 58
8.2 Conditions of Restricted Stock Awards. The grant of a
Restricted Stock Award shall be subject to the following:
(a) Restriction period. Vesting of each Restricted
Stock Award shall require the holder to remain in the employment of the
Corporation or a Subsidiary for a prescribed period (a "Restriction
Period"). The Committee shall determine the Restriction Period or
Periods which shall apply to the shares of Common Stock covered by each
Restricted Stock Award or portion thereof. At the end of the Restriction
Period the restrictions imposed hereunder shall lapse with respect to the
shares of Common Stock covered by the Restricted Stock Award.
(b) Restrictions. The holder of a Restricted Stock
Award may not sell, transfer, pledge, exchange, hypothecate or otherwise
dispose of the shares of Common Stock during the applicable Restriction
Period. The Committee shall impose such other restrictions on any shares
of Common Stock covered by a Restricted Stock Award as it may deem
advisable including, without limitation, restrictions under applicable
Federal or state securities laws, and may legend the certificates
representing Restricted Stock to give appropriate notice of such
restrictions.
(c) Rights as shareholders. During any Restriction
Period, the Committee may, in its discretion, grant to the holder of a
Restricted Stock Award all or any of the rights of a shareholder with
respect to said shares, including, but not by way of limitation, the
right to vote such shares and to receive dividends. If any dividends or
other distributions are paid in shares of Common Stock, all such shares
shall be subject to the same restrictions on transferability as the
shares of Restricted Stock with respect to which they were paid.
ARTICLE IX
OTHER INCENTIVE AWARDS
9.1 Grant of Other Incentive Awards. The Committee may, in its
discretion, grant other types of awards of, or based on, Common Stock. Other
Incentive Awards are limited to awards under which Common Stock is or may in
the future be acquired. Such awards may include grants of debt securities
convertible into or exchangeable for shares of Common Stock upon such
conditions, including attainment of performance goals, as the Committee shall
determine.
9.2 Conditions of Other Incentive Awards. Each grant of an Other
Incentive Award shall be evidenced by an Award Notice executed by the
Corporation and the Participant, and shall contain such terms and conditions
and be in such form as the Committee may from time to time approve. Other
Incentive Awards may not be sold, assigned, transferred, pledged, or encumbered
except as may be provided in the Award Notice, and in no event may be
transferred other than by will or the laws of descent and distribution or be
exercised, during the life of the Participant, other than by the Participant or
the Participant's guardian or legal representative. The recipient of an Other
Incentive Award will have the rights of a shareholder only to the extent, if
any, specified in the Award Notice governing such Other Incentive Award.
9.3 Stock Awards to Non-Employee Directors. An award of *[200]*
shares of Common Stock shall be automatically awarded (i) on the last day of
the calendar quarter in which the Effective Date occurs to each person who is a
Non-Employee Director on such date, and (ii) on the last day of each subsequent
calendar quarter during which such individual has continued to serve as a
Non-Employee Director. An individual who becomes a Non-Employee Director
subsequent to the Effective Date shall be automatically awarded *[200]* shares
of Common Stock on the last day of each calendar quarter during which such
individual serves as a Non-Employee Director.
Each Director Stock Award shall be evidenced by an Award Notice executed
by the Corporation and the Non-Employee Director, and no Director Stock Award
shall be granted hereunder after the ten-year anniversary of the Effective
Date.
- 56 -
<PAGE> 59
ARTICLE X
STOCK ADJUSTMENTS
In the event that the shares of Common Stock, as presently constituted,
shall be changed into or exchanged for a different number or kind of shares of
stock or other securities of the Corporation or of another corporation (whether
by reason of merger, consolidation, recapitalization, reclassification, stock
split, combination of shares or otherwise), or if the number of such shares of
Common Stock shall be increased through the payment of a stock dividend, or a
dividend on the shares of Common Stock or rights or warrants to purchase
securities of the Corporation shall be made, then there shall be substituted
for or added to each share available under and subject to the Plan as provided
in Article IV hereof, and each share theretofore appropriated or thereafter
subject or which may become subject to Performance Share Awards, Options,
Restricted Stock Awards or Other Incentive Awards under the Plan, the number
and kind of shares of stock or other securities into which each outstanding
share of Common Stock shall be so changed or for which each such share shall be
exchanged or to which each such share shall be entitled, as the case may be.
In the event there shall be any other change in the number or kind of the
outstanding shares of Common Stock, or any stock or other securities into which
the Common Stock shall have been changed or for which it shall have been
exchanged, then if the Committee shall, in its sole discretion, determine that
such change equitably requires an adjustment in the shares available under and
subject to the Plan, or in any Award theretofore granted or which may be
granted under the Plan, such adjustments shall be made in accordance with such
determination, except that no adjustment of the number of shares of Common
Stock available under the Plan or to which any Award relates that would
otherwise be required shall be made unless and until such adjustment either by
itself or with other adjustments not previously made would require an increase
or decrease of at least 1% in the number of shares of Common Stock available
under the Plan or to which any Award relates immediately prior to the making of
such adjustment (the "Minimum Adjustment"). Any adjustment representing a
change of less than such minimum amount shall be carried forward and made as
soon as such adjustment together with other adjustments required by this
Article X and not previously made would result in a Minimum Adjustment.
Notwithstanding the foregoing, any adjustment required by this Article X which
otherwise would not result in a Minimum Adjustment shall be made with respect
to shares of Common Stock relating to any Award immediately prior to exercise,
payment or settlement of such Award.
No fractional shares of Common Stock or units of other securities shall
be issued pursuant to any such adjustment, and any fractions resulting from any
such adjustment shall be eliminated in each case by rounding downward to the
nearest whole share.
ARTICLE XI
GENERAL
11.1 Amendment or Termination of Plan. The Board may suspend or
terminate the Plan at any time. In addition, the Board may, from time to time,
amend the Plan in any manner, but may not without shareholder approval adopt
any amendment which would:
(a) increase the aggregate number of shares of Common
Stock available under the Plan (except by operation of Article X);
(b) materially increase the benefits accruing to Insider
Participants under the Plan; or
(c) materially modify the requirements as to eligibility
for participation in the Plan;
provided, that any amendment to the Plan shall require approval of the
shareholders if, in the opinion of counsel to the Corporation, such approval is
required by Section 16(b) or any other section of the Exchange Act, or any
other Federal or state law or any regulations or rules promulgated thereunder.
Notwithstanding the above, the number of
- 57 -
<PAGE> 60
Director Options and Director Stock Awards to be awarded to Non-Employee
Directors pursuant to Sections 6.3 and 9.3, respectively, the number of shares
of Common Stock to be covered by each Director Option and Director Stock Award,
the exercise price per share under each Director Option, when and under what
circumstances each Director Option and Director Stock Award will be granted and
the period within which each Director Option may be exercised, shall not be
amended more than once every six months (even with shareholder approval), other
than to conform with changes in the Code, the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or the rules and regulations
thereunder.
11.2 Dividends and Dividend Equivalents. If an Award is granted in
the form of a Performance Share Award, Restricted Stock Award or an Option, the
Committee may choose, at the time of the grant of such Award or any time
thereafter up to the time of payment of such Award, to include as part of such
Award an entitlement to receive dividends or dividend equivalents subject to
such terms, conditions, restrictions, and/or limitations, if any, as the
Committee may establish. Dividends and dividend equivalents granted hereunder
shall be paid in such form and manner (i.e., lump sum or installments), and at
such time as the Committee shall determine. All dividends or dividend
equivalents which are not paid currently may, at the Committee's discretion,
accrue interest, be reinvested into additional shares of Common Stock or, in
the case of dividends or dividend equivalents credited in connection with a
Performance Share Award, be credited as additional Performance Shares and paid
to the Participant if and when, and to the extent that, payment is made
pursuant to such Performance Share Award.
11.3 Termination of Employment. If a Participant's employment with
the Corporation or a Subsidiary terminates for a reason other than death,
disability, retirement or any approved reason, all unexercised, unearned and/or
unpaid Awards, including, but not by way of limitation, Awards earned but not
yet paid, all unpaid dividends and dividend equivalents, and all interest
accrued on the foregoing, shall be cancelled or forfeited, as the case may be,
unless the Participant's Award Notice provides otherwise. The Committee shall
have the authority to promulgate rules and regulations to (i) determine what
events constitute disability, retirement, or termination for an approved reason
for purposes of the Plan, and (ii) determine the treatment of a Participant
under the Plan in the event of his or her death, disability, retirement, or
termination for an approved reason. Such rules and regulations may include,
without limitation, the method, if any, for prorating a Performance Share
Award, accelerating the vesting of any Options or Restricted Stock Award, or
providing for the exercise of any unexercised Options in the event of a
Participant's death, disability, retirement or termination for an approved
reason.
11.4 Nonassignability. No Options, Performance Share Awards or
other derivative securities (as defined in the rules and regulations
promulgated under Section 16 of the Exchange Act) awarded under the Plan to any
person who is an Insider Participant, shall be subject in any manner to
alienation, anticipation, sale, transfer, assignment, pledge, or encumbrance,
except for transfer by will or the laws of descent and distribution or pursuant
to a qualified domestic relations order as defined by the Code or Title I of
ERISA, or the rules and regulations thereunder. Any attempt to transfer,
assign, pledge, hypothecate or otherwise dispose of, or to subject to
execution, attachment or similar process, any Option, Performance Share Award
or other derivative security, contrary to the provisions hereof, shall be void
and ineffective and shall give no right to any purported transferee.
11.5 Withholding Taxes. The Corporation shall be entitled to
deduct from any payment under the Plan, regardless of the form of such payment,
the amount of all applicable income and employment taxes required by law to be
withheld with respect to such payment or may require the Participant to pay to
it such tax prior to and as a condition of the making of such payment. In
accordance with any applicable administrative guidelines it establishes, the
Committee may allow a Participant to pay the amount of taxes required by law to
be withheld from an Award by withholding from any payment of Common Stock due
as a result of such Award, or by permitting the Participant to deliver to the
Corporation, shares of Common Stock, having a Fair Market Value, on the date of
payment, equal to the amount of such required withholding taxes; provided,
however, that in the event the Participant is an Insider Participant, such an
election may not be made within six months of the date the Award is granted
(unless death or disability of the Participant occurs prior to the expiration
of such six-month period), and must be made either six months prior to the date
of payment or during the window period.
11.6 Forfeiture. If the employment of a Participant is terminated
on account of any act of fraud, intentional misrepresentation, embezzlement,
misappropriation or conversion of assets or opportunities of the Corporation or
any
- 58 -
<PAGE> 61
of its Subsidiaries, any Award granted hereunder, whether and regardless of the
extent to which such Award is vested, earned or exercisable, shall
automatically terminate as of the date of termination of such employment.
11.7 Change of Control. Awards granted under the Plan to any
Participant may, in the discretion of the Committee, provide that (a) such
Awards shall be immediately vested, fully earned, exercisable, and/or, in the
case of Options, converted into stock appreciation rights, as appropriate, upon
a Change of Control Event, and (b) the Corporation shall make full payment to
each such Participant with respect to any Performance Share Award, stock
appreciation right or Other Incentive Award, deliver certificates to such
Participant with respect to each Restricted Stock Award, and permit the
exercise of Options, respectively, granted hereunder to such Participant.
11.8 Amendments to Awards. The Committee may at any time
unilaterally amend the terms of any Award Notice for any Award, whether or not
presently exercisable, earned, paid or vested, to the extent it deems
appropriate; provided, however, that any such amendment which is adverse to the
Participant shall require the Participant's consent.
11.9 Regulatory Approval and Listings. The Corporation shall use
its best efforts to file with the Securities and Exchange Commission as soon as
practicable following the Effective Date, and keep continuously effective and
usable, a Registration Statement on Form S-8 with respect to shares of Common
Stock subject to Awards hereunder. Notwithstanding anything contained in this
Plan to the contrary, the Corporation shall have no obligation to issue or
deliver certificates representing shares of Common Stock evidencing Restricted
Stock Awards or any other Awards relating to shares of Common Stock prior to:
(a) the obtaining of any approval from, or satisfaction
of any waiting period or other condition imposed by, any governmental
agency which the Committee shall, in its sole discretion, determine to be
necessary or advisable;
(b) the admission of such shares to listing on the stock
exchange on which the Common Stock may be listed or the NASDAQ/National
Market System, if listed thereon; and
(c) the completion of any registration or other
qualification of said shares under any state or Federal law or ruling of
any governmental body which the Committee shall, in its sole discretion,
determine to be necessary or advisable.
11.10 Right to Continued Employment. Participation in the Plan
shall not give any Eligible Employee any right to remain in the employ of the
Corporation or any Subsidiary. The Corporation or, in the case of employment
with a Subsidiary, the Subsidiary, reserves the right to terminate any Eligible
Employee at any time. Further, the adoption of this plan shall not be deemed
to give any Eligible Employee or any other individual any right to be selected
as a Participant or to be granted an Award.
11.11 Beneficiaries. Each Participant shall file with the Committee
a written designation of one or more persons as the beneficiary (the
"Beneficiary") who shall be entitled to receive the amount, if any, payable
under the Plan upon his death. A Participant may, from time to time, revoke or
change his Beneficiary designation without the consent of any prior Beneficiary
by filing a new designation with the Committee. The last such designation
received by the Committee shall be controlling; provided, however, that no
designation, or change or revocation thereof, shall be effective unless
received by the Committee prior to the Participant's death, and in no event
shall be effective as of a date prior to such receipt.
If such Beneficiary designation is not in effect at the time of a
Participant's death, or if no designated Beneficiary survives the Participant,
or such designation conflicts with law, the payment of the amount, if any,
payable under the Plan upon his death shall be made to the Participant's
estate. If the Committee is in doubt as to the right of any person to receive
such amount, the Committee may retain such amount, without liability or any
interest thereon, until the rights thereon are determined, or the Committee may
pay such amount into any court of appropriate jurisdiction and such payment
shall be a complete discharge of the liability of the Plan, the Corporation and
the Committee therefor.
- 59 -
<PAGE> 62
11.12 Indemnification. Each person who is or shall have been a
member of the Committee or of the Board shall be indemnified and held harmless
by the Corporation against and from any loss, cost, liability or expense that
may be imposed upon or reasonably incurred by such person in connection with or
resulting from any claim, action, suit, or proceeding to which he or she may be
a party or in which he or she may be involved by reason of any action or
failure to act under the Plan and against and from any and all amounts paid by
such person in satisfaction of judgment in any such action, suit, or proceeding
against such person. He or she shall give the Corporation an opportunity, at
its own expense, to handle and defend the same before he or she undertakes to
handle and defend it on his or her own behalf. The foregoing right of
indemnification shall not be exclusive of any other rights of indemnification
to which such persons may be entitled under the Corporation's Articles of
Incorporation or Bylaws, as a matter of law, or otherwise, or any power that
the Corporation may have to indemnify or hold harmless any such person.
11.13 Reliance on Reports. Each member of the Committee and each
member of the Board shall be fully justified in relying or acting in good faith
upon any report made by the independent public accountants of the Corporation
and its Subsidiaries and upon any other information furnished in connection
with the Plan by any person or persons other than himself. In no event shall
any person who is or shall have been a member of the Committee or of the Board
be liable for any determination made or other action taken or any omission to
act in reliance upon any such report or information or for any action taken,
including the furnishing of information, or failure to act, if in good faith.
11.14 Relationship to Other Benefits. No payment under the Plan
shall be taken into account in determining any benefits under any pension,
retirement, profit sharing, group insurance or other benefit plan of the
Corporation or any Subsidiary.
11.15 Compliance with the Exchange Act. With respect to persons
subject to Section 16 of the Exchange Act, transactions under this Plan are
intended to comply with all applicable conditions of Rule 16b-3 or its
successors under the Exchange Act. To the extent any provision of the Plan or
action by the Committee fails to so comply, it shall be deemed null and void,
to the extent permitted by law and deemed advisable by the Committee.
Moreover, in the event the Plan does not include a provision required by Rule
16b-3 to be stated therein, such provision (other than one relating to
eligibility requirements, or the price and amount of awards) shall be deemed
automatically to be incorporated by reference into the Plan insofar as
Participants subject to Section 16 are concerned.
11.16 Expenses. The expenses of administering the Plan shall be
borne by the Corporation subject to such allocation to its Subsidiaries as it
deems appropriate.
11.17 Construction. Masculine pronouns and other words of masculine
gender shall refer to both men and women. The titles and headings of the
articles and sections in the Plan are for the convenience of reference only,
and in the event of any conflict, the text of the Plan, rather than such titles
or headings, shall control.
11.18 Governing Law. The Plan shall be governed by and construed in
accordance with the laws of the State of Missouri except as superseded by
applicable Federal law.
- 60 -
<PAGE> 63
ANNEX E
AMENDMENT NO. 1 TO THE
MARK VII, INC.
1995 OMNIBUS STOCK INCENTIVE PLAN
THIS AMENDMENT NO. 1 TO THE MARK VII, INC. 1995 OMNIBUS STOCK
INCENTIVE PLAN (the "Amendment") is hereby adopted by MARK VII, INC., a
Missouri corporation (the "Corporation").
WHEREAS, the Corporation presently maintains the Mark VII,
Inc. 1995 Omnibus Stock Incentive Plan (the "Plan");
WHEREAS, the Board of Directors of the Corporation has
determined that it is desirable and in the best interests of the Corporation
and its shareholders to amend the Plan to permit the grant of awards under the
Plan to employees of the Corporation who do not have executive, managerial,
supervisory or professional responsibilities.
WHEREAS, the Board of Directors of the Corporation has
determined that it is desirable and in the best interests of the Corporation
and its shareholders to amend the Plan to provide that the exercise price of
stock options granted under the Plan can not be less than 100% of the Fair
Market Value (as defined in the Plan) of the Company's common stock on the date
of grant of such options and that the exercise price of a stock option may not
be repriced after such option is granted.
WHEREAS, the Board of Directors of the Corporation has
determined that it is desirable and in the best interests of the Corporation
and its shareholders to amend the Plan to increase the number of shares of the
Corporation's common stock automatically granted to non-employee directors of
the Corporation.
NOW, THEREFORE, pursuant to the right of the Corporation to
amend the Plan as set forth in Article XI of the Plan, and contingent upon
shareholder approval, the Plan is hereby amended as follows:
I. Article V of the Plan is hereby amended by deleting the first sentence
thereof in its entirety and replacing it as follows:
"Awards may be granted under the Plan to any employee of the Corporation
or a Subsidiary."
II. Article VI of the Plan is hereby amended by replacing "85%" in
Subsection (a) of Section 6.2 with "100%" and by adding the
following sentence at the end of Subsection (a) of Section 6.2:
"Furthermore, the exercise price of any Option granted pursuant to the
provisions of this Plan may not be increased or decreased at any time
after such Option is granted."
III. Article IX of the Plan is hereby amended by replacing "75" in the first
and second sentences of Section 9.3 with "200".
- 61 -
<PAGE> 64
IN WITNESS WHEREOF, the Corporation has caused this Amendment
to be duly executed on the date set forth below.
MARK VII, INC.
DATE: May 22, 1996 By:------------------------------
Name:----------------------------
Title:---------------------------
- 62 -
<PAGE> 65
Appendix A
MARK VII,INC. PROXY
ANNUAL MEETING OF SHAREHOLDERS
MAY 22, 1996
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints R.C. Matney, James T. Graves and J.
Michael Head, jointly and individually, as Proxies, each with full power of
subscription and hereby authorizes them to represent and to vote, as designated
below, all the shares of common stock of Mark VII, Inc. which the undersigned
would be entitled to vote, as designated below, if personally present at the
Annual Meeting of Shareholders to be held on May 22, 1996, or any adjournment
or postponement thereof.
1. ELECTION OF DIRECTORS
[ ] FOR ALL NOMINEES LISTED BELOW [ ] WITHOUT AUTHORITY
(except as marked to the contrary below) (to vote for all
nominees below)
INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE
STRIKE A LINE THROUGH THE NOMINEE'S NAME.
R.C. MATNEY, J. MICHAEL HEAD, DAVID H. WEDAMAN, JAMES T. GRAVES, DOUGLASS
WM. LIST, WILLIAM E. GREENWOOD, DR. JAY U. STERLING, THOMAS J. FITZGERALD
2. APPROVAL OF THE PROPOSAL TO CHANGE THE STATE OF INCORPORATION OF MARK
VII, INC. FROM MISSOURI TO DELAWARE.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. APPROVAL OF THE PROPOSAL TO AMEND THE MARK VII, INC. 1995 OMNIBUS STOCK
INCENTIVE PLAN.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS GIVEN, THIS PROXY
WILL BE VOTED FOR ALL NOMINEES FOR DIRECTOR, FOR PROPOSAL NO. 2 AND FOR
PROPOSAL NO. 3.
Please date, sign and return this Proxy card by mail. Postage prepaid.
Date: , 1996
------------------------
Signature
---------------------------
Signature
---------------------------
(PLEASE SIGN EXACTLY AS NAME APPEARS
ON STOCK CERTIFICATES. WHERE STOCK IS
REGISTERED JOINTLY, ALL OWNERS MUST
SIGN. CORPORATE OWNERS SHOULD SIGN FULL
CORPORATE NAME BY AN AUTHORIZED PERSON.
EXECUTORS, ADMINISTRATORS, TRUSTEES OR
GUARDIANS SHOULD INDICATE THEIR STATUS
WHEN SIGNING.)
