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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) of the
SECURITIES EXCHANGE ACT OF 1934
April 3, 1996
(Date of earliest event reported)
PS GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware 1-7141 95-2760133
(State or other jurisdiction (Commission file number) (I.R.S. Employer
of incorporation) Identification No.)
4370 La Jolla Village Drive, Suite 1050
San Diego, California 92122
(Address of principal executive offices and zip code)
(619) 642-2999
(Registrant's telephone number)
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ITEM 5. OTHER EVENTS
In connection with the pending holding company reorganization
transaction, PS Group, Inc. (the "Company") has entered into a Restated
Agreement and Plan of Reorganization dated as of January 31, 1996 (the "Restated
Reorganization Agreement"), and has issued a press release dated April 3, 1996.
The Restated Reorganization Agreement is incorporated herein by reference and
attached hereto as Exhibit 2.1. The press release is incorporated herein by
reference and attached hereto as Exhibit 99.1.
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ITEM 7. (C) EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------- -----------
<C> <S>
2.1 Restated Agreement and Plan of Reorganization dated as of January 30,
1996
99.1 Press Release dated April 3, 1996
</TABLE>
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PS GROUP, INC.
(Registrant)
Date: April 3, 1996
By: /s/CHARLES E. RICKERSHAUSER, JR.
--------------------------------
Charles E. Rickershauser, Jr.,
Chairman of the Board and Chief
Executive Officer
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EXHIBIT INDEX
The following exhibits are hereby filed as part of this Form 8-K:
<TABLE>
<CAPTION>
Exhibit Page
Number Description Number
- ------ ----------- ------
<C> <S> <C>
2.1 Restated Agreement and Plan of Reorganization dated
as of January 30, 1996
99.1 Press Release dated April 3, 1996
</TABLE>
<PAGE>
EXHIBIT 2.1
RESTATED AGREEMENT AND PLAN OF
REORGANIZATION BY AND AMONG
PS GROUP, INC., PS GROUP HOLDINGS, INC. AND
PSG MERGER SUBSIDIARY, INC.
<PAGE>
RESTATED AGREEMENT AND PLAN OF REORGANIZATION
THIS RESTATED AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement"), dated
as of January 31, 1996, among PS Group, Inc., a Delaware corporation (the
"Company"), PS Group Holdings, Inc., a Delaware corporation ("Holdings"), and
PSG Merger Subsidiary, Inc., a Delaware corporation ("Merger Sub").
WITNESSETH:
WHEREAS, the Company has an authorized capital stock consisting of
10,500,000 shares of common stock, par value $1.00 per share (the "Company
Common Stock"), of which 6,068,313 shares are issued and outstanding on the
date hereof, and 1,000,000 shares of preferred stock, par value $1.00 per
share, none of which are outstanding on the date hereof; and
WHEREAS, Holdings has an authorized capital stock consisting of 10,500,000
shares of common stock, par value $1.00 per share (the "Holdings Common
Stock"), of which 100 shares are issued and outstanding and are held by the
Company on the date hereof, and 1,000,000 shares of preferred stock, par value
$1.00 per share, none of which are outstanding on the date hereof (the
"Holdings Preferred Stock"); and
WHEREAS, Merger Sub has an authorized capital stock consisting of 100 shares
of common stock (the "Merger Sub Common Stock"), all of which are issued and
outstanding and are held by Holdings on the date hereof; and
WHEREAS, the Company, Holdings and Merger Sub desire to effect a
reorganization of the Company into a holding company structure (the
"Reorganization") by means of the Merger (as defined below), pursuant to which
the Company will become a wholly-owned subsidiary of Holdings and shareholders
of the Company will exchange their shares of Company Common Stock for shares
of Holdings Common Stock; and
WHEREAS, the boards of directors of the Company and Merger Sub each desire
that, to facilitate the Reorganization, Merger Sub merge with and into the
Company (the "Merger") pursuant to Section 251 of the General Corporation Law
of the State of Delaware (the "DGCL") on the terms set forth in this
Agreement, which is intended to constitute, inter alia, an agreement of merger
for the purposes of the DGCL, and the boards of directors of the Company and
Merger Sub have each approved this Agreement; and
WHEREAS, the board of directors of Holdings has approved this Agreement and
authorized Holdings to join and be bound by it; and
WHEREAS, the board of directors of the Company has directed that this
Agreement be submitted to a vote of the Company's stockholders at a special
meeting of stockholders (the "Special Meeting"); and
WHEREAS, Holdings, as the sole stockholder of Merger Sub, and the Company,
as the sole stockholder of Holdings, have each adopted this Agreement;
NOW, THEREFORE, in consideration of the promises and mutual agreements
herein contained, the parties hereto agree as follows, with the intent that
this Agreement amend and restate in its entirety the Agreement and Plan of
Reorganization among the parties dated as of January 31, 1996:
ARTICLE 1: THE MERGER
1.1 The Merger; Effect of Merger. At the Effective Time (as defined in
Section 1.2 below), Merger Sub shall be merged with and into the Company
pursuant to Section 251 of the DGCL, the separate existence of Merger Sub
shall cease, and the Company, as the surviving corporation, shall continue its
corporate existence under the laws of the State of Delaware under the name of
"PS Group, Inc.," all with the effect provided in the
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DGCL. The Company, as the surviving corporation, shall succeed, insofar as
permitted by law, to all rights, assets, liabilities and obligations of Merger
Sub in accordance with the General Corporation Law of the State of Delaware.
1.2 Effective Time. The Effective Time shall be the time at which a duly
executed and certified copy of a Certificate of Merger with respect to the
Merger (the "Certificate of Merger") is filed in the office of the Secretary
of State of Delaware in accordance with the provisions of the DGCL.
1.3 Company Certificate of Incorporation. The restated certificate of
incorporation, as amended, of the Company, as in effect immediately prior to
the Effective Time, shall be and remain the restated certificate of
incorporation, as amended, of the Company, as the surviving corporation,
following the Effective Time until it shall be amended as provided by law.
1.4 Company By-laws. The by-laws of the Company, as in effect immediately
prior to the Effective Time, shall be and remain the bylaws of the Company, as
the surviving corporation, following the Effective Time until the same shall
be altered, amended or repealed.
1.5 The Company's Directors and Officers. The directors and officers,
respectively, of the Company immediately prior to the Effective Time shall
continue as the directors and officers, respectively, of the Company following
the Effective Time, to hold office until the expiration of their current terms
or their prior resignation, removal or death.
1.6 Holdings' Certificate of Incorporation and By-laws. No later than
immediately prior to the Effective Time, Holdings shall cause its Certificate
of Incorporation and Bylaws to read in their entirety substantially as set
forth in Annexes A and B, respectively.
ARTICLE 2: CONVERSION OF SHARES
2.1 Company Common Stock. At the Effective Time, automatically by virtue of
the Merger and without any further action by any of the parties hereto or any
other person, each share of Company Common Stock issued and outstanding or
held in the treasury of the Company immediately prior to the Effective Time
shall be converted into the right to receive one share of Holdings Common
Stock upon compliance with the procedures specified in Article 3 of this
Agreement. No shares of Company Common Stock shall be issued or outstanding
after the Effective Time except as set forth in Section 2.2 below.
2.2 Merger Sub Common Stock. At the Effective Time, automatically by virtue
of the Merger and without any further action by any of the parties hereto or
any other person, each share of Merger Sub Common Stock outstanding
immediately prior to the Effective Time shall be converted into one share of
Company Common Stock and, as a result thereof, Holdings shall become the sole
stockholder of the Company.
2.3 Holdings Common Stock. At the Effective Time, automatically by virtue of
the Merger and without any further action by any of the parties hereto or any
other person, each share of Holdings Common Stock issued and outstanding and
held by the Company immediately prior to the Effective Time shall be cancelled
and cease to be issued or outstanding.
2.4 Stock Option Plans. At the Effective Time, Holdings shall assume and
continue the Company's 1984 Stock Incentive Plan, as amended, and the
Recontek, Inc. 1987 Employment Stock Option Plan (together with the 1984 Stock
Incentive Plan, the "Stock Option Plans"), be substituted as the "Company"
under the terms and provisions of each of the Stock Option Plans and assume
all rights and obligations of the Company under each of the Stock Option Plans
as theretofore in effect and all stock options outstanding thereunder (the
"Outstanding Options"). The Stock Option Plans and the Outstanding Options
shall, pursuant to their terms, thereafter apply to shares of Holdings Common
Stock in the same manner as they theretofore applied to shares of Company
Common Stock. Prior to the Effective Time, the Company shall take such action
with respect to the Stock Option Plans as is appropriate to facilitate
performance of the foregoing provisions of this Section 2.4.
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ARTICLE 3: EXCHANGE OF STOCK CERTIFICATES
3.1 Appointment of Exchange Agent. At or prior to the Effective Time,
Holdings shall appoint a bank or trust company selected by Holdings as
exchange agent ("Exchange Agent") for the purpose of facilitating the exchange
of certificates representing shares of Company Common Stock ("Company
Certificates") for certificates representing shares of Holdings Common Stock
("Holdings Certificates").
3.2 Exchange of Certificates. As soon as practicable after the Effective
Time, the Exchange Agent shall mail to each holder of record of Company
Certificates a form letter of transmittal (which shall specify that delivery
shall be effected, and risk of loss and title to the Company Certificates
shall pass, only upon delivery of the Company Certificates to the Exchange
Agent) and instructions for use in effecting the surrender of the Company
Certificates in exchange for Holdings Certificates. Upon proper surrender of a
Company Certificate for exchange and cancellation to the Exchange Agent,
together with such properly completed letter of transmittal, duly executed,
the holder of such Company Certificate shall be entitled to receive in
exchange therefor a Holdings Certificate representing a number of shares of
Holdings Common Stock equal to the number of shares of Company Common Stock
represented by the surrendered Company Certificate.
3.3 Restriction on Payment of Dividends and Distributions. No dividends or
other distributions declared after the Effective Time with respect to Holdings
Common Stock shall be paid to the holder of any unsurrendered Company
Certificate until the holder thereof shall surrender such Company Certificate
in accordance with Section 3.2. After the surrender of a Company Certificate
in accordance with Section 3.2, the record holder thereof shall be entitled to
receive any such dividends or other distributions, without any interest
thereon, which theretofore had become payable with respect to shares of
Holdings Common Stock represented by such Company Certificate. Notwithstanding
the foregoing, none of Holdings, the Company, the Exchange Agent or any other
person shall be liable to any former holder of shares of Company Common Stock
for any amount properly delivered to a public official pursuant to applicable
abandoned property, escheat or similar laws.
3.4 Issuance of a Holdings Certificate in a Different Name. If any Holdings
Certificate is to be issued in a name other than that in which the Company
Certificate surrendered in exchange therefor is registered, it shall be a
condition of the issuance thereof that the Company Certificate so surrendered
shall be properly endorsed (or accompanied by an appropriate instrument of
transfer) and otherwise in proper form for transfer, and that the person
requesting such exchange shall pay to the Exchange Agent in advance any
transfer or other taxes required by reason of the issuance of a Holdings
Certificate in any name other than that of the registered holder of the
Company Certificate surrendered, or required for any other reason, or shall
establish to the satisfaction of the Exchange Agent that such tax has been
paid or is not payable.
3.5 No Transfers of Company Common Stock after the Effective Time. After the
Effective Time, there shall be no transfers on the stock transfer books of the
Company of the shares of Company Common Stock which were issued and
outstanding immediately prior to the Effective Time. If, after the Effective
Time, Company Certificates representing such shares are presented for
transfer, no transfer shall be effected on the stock transfer books of
Holdings with respect to such shares and no Holdings Certificate shall be
issued representing the shares of Holdings Common Stock exchangeable for such
shares of Company Common Stock unless and until such Company Certificate is
delivered to the Exchange Agent together with properly completed and duly
executed copies of all documents required by Section 3.2 (or such other
documents as are satisfactory to Holdings and the Exchange Agent in their sole
discretion).
3.6 Lost Company Certificates. In the event any Company Certificate shall
have been lost, stolen or destroyed, upon the making of an affidavit of that
fact by the person claiming such Company Certificate to be lost, stolen or
destroyed and, if required by Holdings, the posting by such person of a bond
in such amount as Holdings may determine is reasonably necessary as indemnity
against any claim that may be made against it with respect to such Company
Certificate, the Exchange Agent will issue, in exchange for such lost, stolen,
or destroyed Company Certificate, a Holdings Certificate representing the
shares of Holdings Common Stock deliverable in respect of such Company
Certificate pursuant to this Agreement.
3
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ARTICLE 4: CONDITIONS TO REORGANIZATION
4.1 Conditions to Merger. The consummation of the Reorganization is subject
to the satisfaction, or (to the extent permitted by law) waiver by the
Company, of the following conditions prior to the Effective Time:
(a) Consents. Any consents, approvals or authorizations that the Company
deems necessary or appropriate to be obtained in connection with the
consummation of the Reorganization shall have been obtained;
(b) Stockholder Approval. This Agreement shall have been adopted by the
holders of Company Common Stock in accordance with the DGCL;
(c) Listing. Holdings Common Stock to be issued or reserved for issuance
in connection with the Reorganization shall have been approved for listing,
upon official notice of issuance, by the New York Stock Exchange and the
Pacific Stock Exchange; and
(d) Tax Opinion. The Company shall have received, in form and substance
satisfactory to it, an opinion from Munger, Tolles & Olson with respect to
certain federal income tax effects of the Reorganization and the provisions
of Article XI of Annex A hereto.
ARTICLE 5: AMENDMENT, DEFERRAL AND TERMINATION
5.1 Amendment. Subject to Section 251(d) of the DGCL, the parties hereto, by
mutual consent of their respective boards of directors, may amend this
Agreement prior to the filing of the Certificate of Merger with the Secretary
of State of Delaware.
5.2 Deferral. Consummation of the Reorganization may be deferred by the
board of directors of the Company or any authorized officer of the Company for
a reasonable period of time following the Special Meeting if said board of
directors or authorized officer determines that such deferral would be in the
best interests of the Company and its stockholders.
5.3 Termination. This Agreement may be terminated and the Reorganization may
be abandoned at any time prior to the filing of the Certificate of Merger with
the Secretary of State of Delaware, whether before or after adoption of this
Agreement by the stockholders of the Company, by action of the board of
directors of the Company, if said board of directors determines that the
consummation of the Reorganization would not, for any reason, be in the best
interests of the Company and its stockholders.
ARTICLE 6: MISCELLANEOUS
6.1 Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware.
6.2 Further Assurances. From time to time on and after the Effective Time,
each party hereto agrees that it will execute and deliver or cause to be
executed and delivered all such further assignments, assurances or other
instruments, and shall take or cause to be taken all such further actions, as
may be necessary or desirable to consummate the Reorganization. Merger Sub
hereby authorizes and empowers the Company, as the surviving corporation, to
execute and deliver all such assignments, assurances and other instruments and
to take all such further actions in the name of Merger Sub following the
Effective Time.
6.3 Counterparts. This Agreement may be executed in one or more counterparts
and each such counterpart hereof shall be deemed to be an original instrument
but all such counterparts together shall constitute but one agreement.
6.4 Descriptive Headings. The descriptive headings herein are inserted for
convenience of reference only and are not intended to be part of or to affect
the meaning or interpretation of this Agreement.
4
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IN WITNESS WHEREOF, each of the parties hereto, pursuant to authority duly
granted by its board of directors, has caused this Agreement to be executed by
a duly authorized officer thereof, and has further caused its corporate seal
to be hereunto affixed and attested, as of the date first written above.
PS GROUP, INC.
By
___________________________________
Charles E. Rickershauser, Jr.
Chief Executive Officer
PS GROUP HOLDINGS, INC.
By
___________________________________
Charles E. Rickershauser, Jr.
Chief Executive Officer
PSG MERGER SUBSIDIARY, INC.
By
___________________________________
Charles E. Rickershauser, Jr.
Chief Executive Officer
5
<PAGE>
ANNEX A
RESTATED CERTIFICATE OF
INCORPORATION OF PS GROUP
HOLDINGS, INC. TO BE IN EFFECT
IMMEDIATELY PRIOR TO THE
REORGANIZATION
<PAGE>
RESTATED CERTIFICATE OF INCORPORATION
OF
PS GROUP HOLDINGS, INC.
ARTICLE I
The name of this corporation is PS Group Holdings, Inc.
ARTICLE II
The address of this corporation's registered office in the State of Delaware
is Corporation Trust Center, 1209 Orange Street, in the City of Wilmington,
County of New Castle and the name of its registered agent at such address is
The Corporation Trust Company.
ARTICLE III
The purpose of this corporation is to engage in any lawful act or activity
for which corporations may be organized under the General Corporation Law of
Delaware.
ARTICLE IV
(A) The total number of shares of all classes of capital stock which this
corporation shall have the authority to issue is eleven million five hundred
thousand (11,500,000) shares, of which ten million five hundred thousand
(10,500,000) shares shall be of the par value of $1.00 per share and
designated "Common Stock" and one million (1,000,000) shares shall be of the
par value of $1.00 per share and designated "Preferred Stock".
(B) The Board of Directors is expressly authorized at any time, and from
time to time, to provide for the issuance of shares of Preferred Stock in one
or more series, with such voting powers, full or limited, or without voting
powers, and with such designation, preferences and relative, participating,
optional or other special rights, and qualifications, limitations or
restrictions thereof as shall be stated and expressed in the resolution or
resolutions providing for the issue thereof adopted by the Board of Directors,
and as are not stated and expressed in this Certificate of Incorporation, or
any amendment thereto, including (but without limiting the generality of the
foregoing) the following:
(1) The designation of and number of shares constituting such series;
(2) The dividend rate of such series, the conditions and dates upon which
such dividends shall be payable, the preference or relation which such
dividends shall bear to the dividends payable on any other class or classes
or of any other class of capital stock or series thereof and whether such
dividends shall be cumulative or noncumulative;
(3) Whether the shares of such series shall be subject to redemption by
this corporation, and, if made subject to such redemption, the times,
prices and other terms and conditions of such redemption;
(4) The terms and amount of any sinking fund provided for the purchase or
redemption of the shares of such series;
(5) Whether or not the sales of such series shall be convertible into or
exchangeable for shares of any other class or classes or of any other
series of any class or classes of capital stock of this corporation, and if
provision be made for conversion or exchange, the times, prices, rates,
adjustments, and other terms and conditions of such conversion or exchange;
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(6) Whether or not the shares of such series shall have voting rights, in
addition to the voting rights provided by law, and, if so, the terms and
conditions of such voting rights;
(7) The restrictions, if any, on the issue or reissue of any additional
Preferred Stock; and
(8) The rights of the holders of the shares of such series upon the
dissolution of, or upon the distribution of assets of, this corporation.
ARTICLE V
(A) The number of directors of this corporation shall be fixed and may be
altered from time to time as may be provided in the By-laws. The directors of
this corporation need not be stockholders therein.
(B) The Board of Directors shall be and is divided into three classes, Class
I, Class II and Class III, which shall be as nearly equal in number as
possible. Each director shall serve for a term ending on the date of the third
annual meeting following the annual meeting at which such director was
elected; provided, however, that each initial director in Class I shall hold
office until the annual meeting of stockholders in 1997; each initial director
in Class II shall hold office until the annual meeting of stockholders in
1998; and each initial director in Class III shall hold office until the
annual meeting of stockholders in 1999.
(C) In the event of any increase or decrease in the authorized number of
directors, (i) each director then serving as such shall nevertheless continue
as a director of the class of which he is a member until the expiration of his
current term, or his prior death, retirement, resignation, or removal, and
(ii) the newly created or eliminated directorships resulting from such
increase or decrease shall be apportioned by the Board of Directors among the
three classes of directors so as to maintain such classes as nearly equal as
possible.
(D) Notwithstanding any of the foregoing provisions of this Article, each
director shall serve until his successor is elected and qualified or until his
death, retirement, resignation or removal. Should a vacancy occur or be
created, whether arising through death, resignation or removal of a director
or through an increase in the number of directors of any class, such vacancy
shall be filled by a majority vote of the remaining directors of the class in
which such vacancy occurs, or by the sole remaining director of that class if
only one such director remains, or by the majority vote of the remaining
directors of the other two classes if there be no remaining member of the
class in which the vacancy occurs. A director so elected to fill a vacancy
shall serve for the remainder of the then present term of office of the class
to which he was elected.
ARTICLE VI
All of the powers of this corporation, insofar as the same may be lawfully
vested by this Certificate of Incorporation in the Board of Directors, are
hereby conferred upon the Board of Directors of this corporation. In
furtherance and not in limitation of that power, the Board of Directors shall
have the power to make, adopt, alter, amend and repeal from time to time By-
laws of this corporation, subject to the right of the stockholders entitled to
vote with respect thereto to adopt, alter, amend and repeal By-laws made by
the Board of Directors; provided, however, that By-laws shall not be adopted,
altered, amended or repealed by the stockholders of the corporation except by
the vote of the holders of not less than 66 2/3% of the outstanding shares of
Common Stock.
ARTICLE VII
To the fullest extent permitted by the General Corporation Law of the State
of Delaware as the same exists or may hereafter be amended, a director of the
corporation shall not be liable to the corporation or its stockholders for
monetary damages for breach of fiduciary duty as a director.
Any repeal or modification of this Article shall not result in any liability
for a director with respect to any action or omission occurring prior to such
repeal or modification.
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ARTICLE VIII
Action shall be taken by the stockholders only at annual or special meetings
of stockholders and stockholders may not act by written consent.
ARTICLE IX
(A) Subject to the provisions of any series of Preferred Stock which may at
the time be outstanding, the affirmative vote of the holders of not less than
66 2/3% of the outstanding shares of Common Stock of this corporation, which
shall include the affirmative vote of at least 50% of the outstanding shares
of Common Stock held by stockholders other than a "related person" (as
hereinafter defined), shall be required for the approval or authorization of
any "business combination" (as hereinafter defined) of this corporation with
any related person; provided, however, that such 66 2/3% voting requirement
shall not be applicable if:
(1) The business combination was approved by the Board of Directors of
the corporation either (a) prior to the acquisition by such related person
of the beneficial ownership of 20% or more of the outstanding shares of the
Common Stock of the corporation, or (b) after such acquisition, but only so
long as such related person has sought and obtained the unanimous approval
by the Board of Directors of such acquisition of more than 20% of the
Common Stock prior to such acquisition being consummated; or
(2) The business combination is solely between this corporation and
another corporation, 50% or more of the voting stock of which is owned by
this corporation and none of which is owned by a related person; provided
that each stockholder of this corporation receives the same type of
consideration in such transaction in proportion to his stockholdings; or
(3) All of the following conditions are satisfied:
(a) The cash or fair market value of the property, securities or
other consideration to be received per share by holders of Common Stock
of this corporation in the business combination is not less than the
higher of (i) the highest per share price (including brokerage
commissions, soliciting dealers' fees, dealer-management compensation,
and other expenses, including, but not limited to, costs of newspaper
advertisements, printing expenses and attorneys' fees) paid by such
related person in acquiring any of its holdings of this corporation's
Common Stock or (ii) an amount which bears the same or a greater
percentage relationship to the market price of this corporation's
Common Stock immediately prior to the announcement of such business
combination as the highest per share price determined in (i) above
bears to the market price of this corporation's Common Stock
immediately prior to the commencement of acquisition of this
corporation's Common Stock by such related person, but in no event in
excess of two times the highest per share price determined in (i),
above; and
(b) After becoming a related person and prior to the consummation of
such business combination, (i) such related person shall not have
acquired any newly issued shares of capital stock, directly or
indirectly, from this corporation (except upon conversion of
convertible securities acquired by it prior to becoming a related
person or upon compliance with the provision of this Article IX or as a
result of a pro rata stock dividend or stock split) and (ii) such
related person shall not have received the benefit, directly or
indirectly (except proportionately as a stockholder) of any loans,
advances, guarantees, pledges or other financial assistance or tax
credits provided by this corporation, or made any major changes in this
corporation's business or equity capital structure; and
(c) A proxy statement responsive to the requirements of the
Securities Exchange Act of 1934, whether or not this corporation is
then subject to such requirements, shall be mailed to the public
stockholders of this corporation for the purpose of soliciting
stockholder approval of such business combination and shall contain at
the front thereof, in a prominent place (i) any recommendations as to
the advisability (or inadvisability) of the business combination which
the continuing directors, or any
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outside directors, may choose to state, and (ii) the opinion of a
reputable national investment banking firm as to the fairness (or not)
of the terms of such business combination, from the point of view of
the remaining public stockholders of this corporation (such investment
banking firm to be engaged solely on behalf of the remaining public
stockholders, to be paid a reasonable fee for its services by this
corporation upon receipt of such opinion, to be one of the so-called
major bracket investment banking firms which has not previously been
associated with such related person and, if there are at the time any
such directors, to be selected by a majority of the continuing
directors and outside directors).
(B) For purposes of this Article IX:
(1) The term "business combination" shall mean (a) any merger or
consolidation of this corporation with or into a related person, (b)
any sale, lease, exchange, transfer or other disposition, including
without limitation, a mortgage or any other security device, of all or
any substantial part of the assets of this corporation (including
without limitation any voting securities of a subsidiary) or of a
subsidiary, to a related person, (c) any merger or consolidation of a
related person with or into this corporation or a subsidiary of this
corporation, (d) any sale, lease, exchange, transfer or other
disposition of all or any substantial part of the assets of a related
person to this corporation or a subsidiary of this corporation, (e) the
issuance of any securities of this corporation or a subsidiary of this
corporation to a related person, (f) the acquisition by this
corporation or a subsidiary of this corporation of any securities of a
related person, (g) any reclassification of Common Stock of this
corporation, or any recapitalization involving Common Stock of this
corporation, consummated within five years after a related person
becomes a related person, and (h) any agreement, contract or other
arrangement providing for any of the transactions described in this
definition of business combination;
(2) The term "related person" shall mean and include any individual,
corporation, partnership or other person or entity which, together with
its "affiliates" and "associates" (defined below), "beneficially" owns
(as this term is defined in Rule 13d-3 of the General Rules and
Regulations under the Securities Exchange Act of 1934), in the
aggregate 20% or more of the outstanding shares of the Common Stock of
this corporation, and any "affiliate" or "associate" (as those terms
are defined in Rule 12b-2 under the Securities Exchange Act of 1934) of
any such individual, corporation, partnership or other person or
entity;
(3) The term "substantial part" shall mean more than 10% of the total
assets of the corporation in question, as of the end of its most recent
fiscal year ending prior to the time the determination is being made;
(4) Without limitation, any shares of Common Stock of this
corporation which any related person has the right to acquire pursuant
to any agreement, or upon exercise of conversion rights, warrants or
options, or otherwise, shall be deemed beneficially owned by such
related person;
(5) For the purposes of subparagraph (A)(3) of this Article IX, the
term "other consideration to be received" shall include, without
limitation, Common Stock of this corporation retained by its existing
public stockholders in the event of a business combination with such
related person in which this corporation is the surviving corporation;
and
(6) With respect to any proposed business combination, the term
"continuing director" shall mean a director who was a member of the
Board of Directors of this corporation immediately prior to the time
that any related person involved in the proposed business combination
acquired 20% or more of the outstanding shares of Common Stock of the
corporation, and the term "outside director" shall mean a director who
is not (a) an officer or employee of this corporation or any relative
of an officer or employee, (b) a related person or an officer,
director, employee, associate or affiliate of a related person, or a
relative of any of the foregoing, or (c) a person having a direct or
indirect material business relationship with this corporation.
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ARTICLE X
The provisions set forth in this Article X and in Articles V, VI, VIII, IX
and XI herein may not be repealed or amended in any respect, and no article
imposing cumulative voting in the election of directors may be added, unless
such action is approved by the affirmative vote of the holders of not less
than 66 2/3% of the outstanding shares of Common Stock of this corporation,
subject to the provisions of any series of Preferred Stock which may at the
time be outstanding; provided, however, that if there is a related person (as
defined in Article IX), such 66 2/3% vote must include the affirmative vote of
at least 50% of the outstanding shares of Common Stock held by stockholders
other than the related person; and provided further that, notwithstanding this
Article X, Article XI hereof may be amended or modified by the Board of
Directors as provided in Article XI.
ARTICLE XI
(A) TRANSFER RESTRICTIONS. In order to preserve the net operating loss
carryforwards (including any "net unrealized built-in loss," as defined under
applicable law), capital loss carryforwards, general business credit
carryforwards, alternative minimum tax credit carryforwards and other tax
benefits (collectively, the "Tax Benefits") to which the corporation or any
member of the corporation's "affiliated group" as that term is used in Section
1504 of the Internal Revenue Code of 1986, as amended from time to time, or
any successor statute (collectively, the "Code"), is or becomes entitled prior
to the Expiration Date (as hereinafter defined) pursuant to the Code and the
Treasury Regulations promulgated thereunder, as amended from time to time
("Treasury Regulations") or any applicable state statute, the following
restrictions shall apply until the earlier of (x) the day after the fifteenth
(15th) anniversary of the effective time of the merger of PSG Merger
Subsidiary, Inc. with and into PS Group, Inc. (the "Merger"), (y) the repeal
of Section 382 of the Code if the Board of Directors determines that the
restrictions in this Article XI are no longer necessary for the preservation
of the Tax Benefits, and (z) the beginning of a taxable year of the
corporation to which the Board of Directors determines that no Tax Benefits
may be carried forward, unless the Board of Directors shall fix an earlier or
later date in accordance with Section (E) of this Article XI. (The date on
which the restrictions of this Article XI expire hereunder is sometimes
referred to herein as the "Expiration Date.")
(1) Definitions. For purposes of this Article XI:
(a) "Option" shall have the meaning set forth in Treasury Regulation
Section 1.382-4;
(b) a "Permitted Transferee" shall mean any Person if, and only for
so long as, all of the Stock owned (directly or indirectly) by such
Person was Transferred to such Person by a Preexisting 5-Percent
Shareholder in a Transfer with respect to which the consent of the
Board of Directors was obtained pursuant to the penultimate sentence of
subparagraph (A)(3).
(c) a "Person" shall mean any individual, corporation, estate, trust,
association, company, partnership, joint venture, or similar
organization (including the corporation), or any other entity described
in Treasury Regulation Section 1.382-3(a)(1)(i);
(d) a "Preexisting 5-Percent Shareholder" shall mean (i) Berkshire
Hathaway Inc. or any direct or indirect majority-owned subsidiary of
Berkshire Hathaway Inc.; (ii) J.P. Guerin, Fabienne M. Guerin, the John
Patrick Guerin Trust, the Guerin Family Trust and the J. Patrick Guerin
III Trust; (iii) ESL Partners, L.P.; (iv) Donaldson, Lufkin & Jenrette
Securities Corporation, The Equitable Companies Incorporated, AXA, AXA
Assurances I.A.R.D. Mutuelle, AXA Assurances Vie Mutuelle, Alpha
Assurances I.A.R.D. Mutuelle, Alpha Assurances Vie Mutuelle, Uni Europe
Assurance Mutuelle, or any direct or indirect majority-owned subidiary
of the foregoing; (v) any other Person who establishes, on or before
April 30, 1996, to the satisfaction of the Board of Directors of the
corporation that such Person was a "5-percent shareholder" of PS Group,
Inc. within the meaning of Treasury Regulation Section 1.382-
2T(g)(1)(i) or a "first tier entity" of PS Group, Inc. within the
meaning of Treasury Regulation Section 1.382-2T(f)(9) on February 8,
1996; and (vi) any "5-percent owner" or "higher tier entity" (within
the meaning of Treasury Regulation Section 1.382-2T(f)(10) and 1.382-
2T(f)(14), respectively) of any Person described in clauses (i) through
(v) above;
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(e) a "Prohibited Ownership Percentage" shall mean any Stock
ownership that would cause a Person or Public Group to be a "5-percent
shareholder" of the corporation within the meaning of Treasury
Regulation Section 1.382-2T(g)(1)(i) or (ii); for this purpose, whether
a Person or Public Group would be a "5 percent shareholder" shall be
determined (i) without giving effect to the following provisions:
Treasury Regulation Sections 1.382-2T(g)(2), 1.382-2T(g)(3), 1.382-
2T(h)(2)(iii) and 1.382-2T(h)(6)(iii), (ii) by treating every Person or
Public Group which owns Stock, whether directly or by attribution, as
directly owning such Stock notwithstanding any further attribution of
such Stock to other Persons and notwithstanding Treasury Regulation
Section 1.382-2T(h)(2)(i)(A), (iii) by substituting the term "Person"
in place of "individual" in Treasury Regulation Section 1.382-2T(g)(1),
(iv) by taking into account ownership of Stock at any time during the
"testing period" as defined in Treasury Regulation Section 1.382-
2T(d)(1), and (v) by treating each day during the testing period as if
it were a "testing date" as defined in Treasury Regulation Section
1.382-2T(a)(4)(i); in addition, for the purpose of determining whether
any Person or Public Group has a Prohibited Ownership Percentage as of
any date, the definition of Stock set forth in part (e) of this
subparagraph (A)(1) shall be applied in lieu of the definition in
Treasury Regulation Section 1.382-2T(f)(18), except that any Option
shall be treated as Stock only to the extent treating it as Stock would
cause an increase in ownership of Stock by such Person and such Option
would be deemed exercised pursuant to Treasury Regulations effect for
time to time (disregarding whether treating such Option as exercised
would cause an ownership change);
(f) a "Public Group" shall have the meaning contained in Treasury
Regulation Section 1.382-2T(f)(13), excluding any "direct public group"
with respect to the corporation, as that term is used in Treasury
Regulation Section 1.382-2T(j)(2)(ii);
(g) "Stock" refers to all classes of stock of the corporation, all
Options to acquire stock of the corporation and all other interests
that would be treated as stock in the corporation pursuant to Treasury
Regulation Section 1.382-2T(f)(18)(iii), other than (i) stock described
in Section 1504(a)(4) of the Code and (ii) stock that would be
described in such Section 1504(a)(4) but is not so described solely
because it is entitled to vote as a result of dividend arrearages;
(h) "Transfer" shall mean any conveyance, by any means, of legal or
beneficial ownership (direct or indirect) of shares of Stock, whether
such means are direct or indirect, voluntary or involuntary, including,
without limitation, the transfer of any ownership interest in any
entity that owns (directly or indirectly) shares of Stock (and any
reference in this Article XI to a Transfer of Stock shall include any
Transfer of any interest in any such entity and references to the
Persons to whom Stock is Transferred shall include Persons to whom any
interest in any such entity shall have been Transferred); and
(i) "Transferee" means any Person to whom Stock is Transferred.
(2) Prohibited Transfers. From and after the effective time of the
Merger, no Person shall Transfer any Stock to any other Person to the
extent that such Transfer, if effected: (a) would cause the Transferee or
any Person or Public Group to have a Prohibited Ownership Percentage; (b)
would increase the Stock ownership percentage (determined in accordance
with Section 382 of the Code and the Treasury Regulations thereunder) of
any Transferee or any Person or Public Group having a Prohibited Ownership
Percentage; or (c) would create, under Treasury Regulation Section 1.382-
2T(j)(3)(i), a new "public group" as that term is used in Treasury
Regulation Section 1.382-2T(f)(13); provided, however, that (x) part (c) of
this subparagraph (A)(2) shall not prohibit any Transfer of Stock by (but
not to) a Preexisting 5-Percent Shareholder if such Transfer is not
prohibited by part (a) or (b) of this subparagraph (A)(2) and if such Stock
was acquired by such Preexisting 5-Percent Shareholder in exchange for
shares of stock of PS Group, Inc. that were owned by such Preexisting 5-
Percent Shareholder on February 8, 1996, (y) part (c) of this subparagraph
(A)(2) shall not prohibit any Transfer of Stock by (but not to) a Permitted
Transferee if such Transfer is not prohibited by part (a) or (b) of this
subparagraph (A)(2), and (z) nothing in this Article XI shall prohibit the
Transfer of any interest in any Preexisting 5-Percent Shareholder.
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(3) Board of Directors Consent to Certain Transfers. The Board of
Directors may permit any Transfer of Stock that would otherwise be
prohibited pursuant to subparagraph (A)(2) of this Article XI if
information relating to a specific proposed transaction is presented to the
Board of Directors and the Board of Directors determines that, based on the
facts in existence at the time of such determination, such transaction will
not delay, prevent or otherwise jeopardize the corporation's full
utilization of the Tax Benefits. The Board of Directors may impose any
conditions that it deems reasonable and appropriate in connection with such
a Transfer, including without limitation, restrictions on the ability of
any Transferee to Transfer Stock acquired through such Transfer; provided,
however, that any such restrictions shall be consented to by such
Transferee and the certificates representing such Stock shall include an
appropriate legend. Notwithstanding the foregoing, the Board of Directors
shall consent to any proposed Transfer of Stock by (but not to) a
Preexisting 5-Percent Shareholder that is otherwise prohibited by part (a)
of subparagraph (A)(2) (but is not prohibited by part (b) of subparagraph
(A)(2)) without the imposition of any conditions if the Board of Directors
determines that (i) the Percentage Point Change In Ownership immediately
following such Transfer of Stock would not exceed the Percentage Point
Change In Ownership immediately prior to such Transfer, and (ii) the Stock
to be Transferred was acquired by such Preexisting 5-Percent Shareholder in
exchange for shares of stock of PS Group, Inc. that were owned by such
Preexisting 5-Percent Shareholder on February 8, 1996; provided, however,
such consent shall not constitute consent with respect to any subsequent
Transfer or any Transfer of any other Stock. "Percentage Point Change in
Ownership" shall mean, on any date, the aggregate of the increase
(expressed in terms of percentage points) of the total amount of Stock
owned by each of those "5-percent shareholders" of the corporation (within
the meaning of Treasury Regulation Section 1.382-2T(g)(1)) whose percentage
ownership of Stock has increased as of such date over the lowest percentage
of Stock owned by each such 5-percent shareholder at any time during the
three-year period preceding such date, such determination to be made in
accordance with Treasury Regulation Section 1.382-2T(c) as if such date
were a "testing date."
(4) Waiver of Restrictions. Notwithstanding anything herein to the
contrary, the Board of Directors may waive any of the restrictions
contained in subparagraph (A)(2) of this Article XI in any instance in
which the Board of Directors determines that a waiver would be in the best
interests of the corporation, notwithstanding the effect of such waiver on
the Tax Benefits.
(B) PURPORTED TRANSFER IN VIOLATION OF TRANSFER RESTRICTION. Unless the
approval or waiver of the Board of Directors is obtained as provided in
subparagraphs (A)(3) or (A)(4) of this Article XI, any purported Transfer of
Stock in excess of the shares that could be Transferred to the Transferee
without restriction under subparagraph (A)(2) of this Article XI shall not be
effective to Transfer record, legal, beneficial or any other ownership of such
excess shares (the "Prohibited Shares") to the purported acquiror of any form
of such ownership (the "Purported Acquiror"), who shall not be entitled to any
rights as a stockholder of the corporation with respect to the Prohibited
Shares (including, without limitation, the right to vote or to receive
dividends with respect thereto). Any purported record, beneficial, legal or
other owner of Prohibited Shares shall be deemed to be a "Purported Acquiror"
of such Prohibited Shares. If there is more than one Purported Acquiror with
respect to certain Prohibited Shares (for example, if the Purported Acquiror
of record ownership of such Prohibited Shares is not the Purported Acquiror of
beneficial ownership of such Prohibited Shares), then references to "Purported
Acquiror" shall include any or all of such Purported Acquirors, as
appropriate. Subparagraphs (B)(1) and (B)(2) below shall apply only in the
case of violations of the restrictions contained in parts (a) and (b) of
subparagraph (A)(2) of this Article XI.
(1) Transfer of Prohibited Shares and Prohibited Distributions to Agent.
Upon demand by the corporation, the Purported Acquiror shall transfer or
cause the transfer of any certificate or other evidence of purported
ownership of the Prohibited Shares within the Purported Acquiror's
possession or control, along with any dividends or other distributions paid
by the corporation with respect to the Prohibited Shares that were received
by the Purported Acquiror (the "Prohibited Distributions"), to an agent
designated by the corporation (the "Agent"). The Agent shall sell in an
arms-length transaction (through the New York Stock Exchange, if possible,
but in any event consistent with applicable law) any Prohibited Shares
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transferred to the Agent by the Purported Acquiror. (The proceeds of such
sale shall be referred to as "Sales Proceeds.") If the Purported Acquiror
has sold the Prohibited Shares to an unrelated party in an arms-length
transaction after purportedly acquiring them, the Purported Acquiror shall
be deemed to have sold the Prohibited Shares for the Agent, and in lieu of
transferring the Prohibited Shares and Prohibited Distributions to the
Agent shall transfer to the Agent the Prohibited Distributions and the
proceeds of such sale (the "Resale Proceeds"), except to the extent that
the Agent grants written permission to the Purported Acquiror to retain a
portion of the Resale Proceeds not exceeding the amount that would have
been payable by the Agent to the Purported Acquiror pursuant to
subparagraph (B)(2) below if the Prohibited Shares had been sold by the
Agent rather than by the Purported Acquiror. Any purported Transfer of the
Prohibited Shares by the Purported Acquiror other than a transfer which (a)
is described in the preceding sentences of this subparagraph (B)(1) and (b)
does not itself violate the provisions of this Article XI shall not be
effective to transfer any ownership of the Prohibited Shares.
(2) Allocation of Sale Proceeds, Resale Proceeds and Prohibited
Distributions. The Sale Proceeds or the Resale Proceeds, if applicable,
shall be allocated to the Purported Acquiror up to the following amount:
(a) where applicable, the purported purchase price paid or value of
consideration surrendered by the Purported Acquiror for the Prohibited
Shares, or (b) where the purported Transfer of the Prohibited Shares to the
Purported Acquiror was by gift, inheritance, or any similar purported
Transfer, the fair market value of the Prohibited Shares at the time of
such purported Transfer. Any Resale Proceeds or Sales Proceeds in excess of
the Agent's expenses incurred in performing its duties hereunder and the
amount allocable to the Purported Acquiror pursuant to the preceding
sentence, together with any Prohibited Distributions (such excess amount
and Prohibited Distributions are collectively the "Subject Amounts"), shall
be paid over to an entity designated by the corporation that is described
in Section 501(c)(3) of the Code. In no event shall any such Prohibited
Shares or Subject Amounts inure to the benefit of the corporation or the
Agent, but such amounts may be used to cover expenses incurred by the Agent
in performing its duties hereunder.
(3) Prompt Enforcement Against Purported Acquiror. Within thirty (30)
business days of learning of the purported Transfer of Prohibited Shares to
a Purported Acquiror or a Transfer of Stock which would cause a Person or
Public Group to become a Prohibited Party (as hereinafter defined), the
corporation through its Secretary shall demand that the Purported Acquiror
or the Prohibited Party Group (as hereinafter defined) surrender to the
Agent the certificates representing the Prohibited Shares, or any Resale
Proceeds, and any Prohibited Distributions, and if such surrender is not
made by the Purported Acquiror or Prohibited Party Group within thirty (30)
business days from the date of such demand, the corporation shall institute
legal proceedings to compel such transfer; provided, however, that nothing
in this subparagraph (B)(3) shall preclude the corporation in its
discretion from immediately bringing legal proceedings without a prior
demand, and provided further that failure of the corporation to act within
the time periods set out in this subparagraph (B)(3) shall not constitute a
waiver of any right of the corporation to compel any transfer required by,
or take any action permitted by, this Article XI. Upon a determination by
the Board of Directors that there has been or is threatened a purported
Transfer of Prohibited Shares to a Purported Acquiror or a Transfer of
Stock which would cause a Person or Public Group to become a Prohibited
Party or any other violation of Section (A) of this Article XI, the Board
of Directors may authorize such additional action as it deems advisable to
give effect to the provisions of this Article XI, including, without
limitation, refusing to give effect on the books of the corporation to any
such purported Transfer or instituting proceedings to enjoin any such
purported Transfer.
(4) Other Remedies. In the event that the Board of Directors determines
that a Person proposes to take any action in violation of subparagraph
(A)(2) of this Article XI, or in the event that the Board of Directors
determines after the fact that an action has been taken in violation of
subparagraph (A)(2) of this Article XI, the Board of Directors, subject to
subparagraph (B)(5) of this Article XI, may take such action as it deems
advisable to prevent or to refuse to give effect to any purported Transfer
or other action which would result, or has resulted, in such violation,
including, but not limited to, refusing to give effect to such purported
Transfer or other action on the books of the corporation or instituting
proceedings to enjoin such
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purported Transfer or other action. If any Person shall knowingly violate,
or knowingly cause any other Person under the control of such Person
("Controlled Person") to violate, subparagraph (A)(2) of this Article XI,
then that Person and any Controlled Person shall be jointly and severally
liable for, and shall pay to the corporation, such amount as will, after
taking account of all taxes imposed with respect to the receipt or accrual
of such amount and all costs incurred by the corporation as a result of
such violation, put the corporation in the same financial position as it
would have been in had such violation not occurred.
(5) No Restriction on Settlement of Exchange Transactions. Nothing
contained in this Article XI shall preclude the settlement of any
transaction involving Stock entered into through the facilities of the New
York Stock Exchange, the Pacific Stock Exchange or any other national
securities exchange. The application of the provisions and remedies
described in this Section (B) of this Article XI shall be deemed not to so
preclude any such settlement.
(6) Modification of Remedies For Certain Indirect Transfers. In the event
of any Transfer of Stock which does not involve a transfer of "securities"
of the corporation within the meaning of the Delaware General Corporation
Law, as amended ("Securities"), but which would cause a Person or Public
Group (the "Prohibited Party") to violate a restriction provided for in
part (a) or (b) of subparagraph (A)(2) of this Article XI, the application
of subparagraphs (B)(1) and (B)(2) shall be modified as described in this
subparagraph (B)(6). In such case, the Prohibited Party and/or any Person
or Public Group whose ownership of the corporation's Securities is
attributed to the Prohibited Party pursuant to Section 382 of the Code and
the Treasury Regulations thereunder (collectively, the "Prohibited Party
Group") shall not be required to dispose of any interest which is not a
Security, but shall be deemed to have disposed of, and shall be required to
dispose of, sufficient Securities (which Securities shall be disposed of in
the inverse order in which they were acquired by members of the Prohibited
Party Group), to cause the Prohibited Party, following such disposition,
not to be in violation of part (a) or (b) of subparagraph (A)(2) of this
Article XI. Such disposition shall be deemed to occur simultaneously with
the Transfer giving rise to the application of this provision, and such
number of Securities which are deemed to be disposed of shall be considered
Prohibited Shares and shall be disposed of through the Agent as provided in
subparagraphs (B)(1) and (B)(2) of this Article XI, except that the maximum
aggregate amount payable to the Prohibited Party Group in connection with
such sale shall be the fair market value of the Prohibited Shares at the
time of the Prohibited Transfer.
(C) OBLIGATION TO PROVIDE INFORMATION. The corporation may require as a
condition to the registration of the Transfer of any Stock that the proposed
Transferee furnish to the corporation all information reasonably requested by
the corporation with respect to all the direct or indirect beneficial or legal
ownership of Stock or Options to acquire Stock by the proposed Transferee and
by Persons controlling, or controlled by or under common control with the
proposed Transferee.
(D) LEGENDS. All certificates issued by the corporation evidencing ownership
of shares of Stock of this corporation that are subject to the restrictions on
Transfer contained in this Article XI shall bear a conspicuous legend
referencing the restrictions set forth in this Article XI.
(E) FURTHER ACTIONS. Subject to subparagraph (B)(5) of this Article XI,
nothing contained in this Article XI shall limit the authority of the Board of
Directors to take such other action to the extent permitted by law as it deems
necessary or advisable to protect the corporation in preserving the Tax
Benefits. Without limiting the generality of the foregoing, in the event of a
change in law (including applicable regulations) making one or more of the
following actions necessary or desirable or in the event that the Board of
Directors believes one or more of such actions is in the best interest of the
corporation, the Board of Directors may (1) accelerate or extend the
Expiration Date, (2) modify the definitions of any terms set forth in this
Article XI or (3) conform any provisions of Section (A) of this Article XI to
the extent necessary to make such provisions consistent with the Code and
Treasury Regulations following any changes therein; provided that the Board of
Directors shall determine in writing that such acceleration, extension, change
or modification is reasonably necessary or desirable to preserve the Tax
Benefits or that the continuation of these restrictions is no longer
reasonably
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necessary for the preservation of the Tax Benefits, as the case may be, which
determination may be based upon an opinion of legal counsel to the corporation
and which determination shall be filed with the Secretary of the corporation
and mailed by the Secretary to the stockholders of this corporation within ten
(10) days after the date of any such determination. In addition, the Board of
Directors may, to the extent permitted by law, from time to time establish,
modify, amend or rescind By-laws, regulations and procedures of the
corporation not inconsistent with the express provisions of this Article XI
for purposes of determining whether any acquisition of Stock would jeopardize
the corporation's ability to preserve and use the Tax Benefits, and for the
orderly application, administration and implementation of the provisions of
this Article XI. Such procedures and regulations shall be kept on file with
the Secretary of the corporation and with its transfer agent and shall be made
available for inspection by the public and, upon request, shall be mailed to
any holder of Stock. The Board of Directors of the corporation shall have the
exclusive power and authority to administer this Article XI and to exercise
all rights and powers specifically granted to the Board of Directors or the
corporation, or as may be necessary or advisable in the administration of this
Article XI, including without limitation, the right and power to (1) interpret
the provisions of this Article XI, and (2) make all calculations and
determinations deemed necessary or advisable for the administration of this
Article XI. All such actions, calculations, interpretations and determinations
which are done or made by the Board of Directors in good faith shall be final,
conclusive and binding on the corporation, the Agent, and all other parties;
provided, however, the Board of Directors may delegate all or any portion of
its duties and powers under this Article XI to a committee of the Board of
Directors as it deems necessary or advisable.
(F) BENEFITS OF THIS ARTICLE XI. Nothing in this Article XI shall be
construed to give to any Person other than the corporation or the Agent any
legal or equitable right, remedy or claim under this Article XI. This Article
XI shall be for the sole and exclusive benefit of the corporation and the
Agent.
(G) SEVERABILITY. If any provision of this Article XI or the application of
any such provision to any Person or under any circumstance shall be held
invalid, illegal, or unenforceable in any respect by a court of competent
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision of this Article XI.
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ANNEX B
RESTATED BY-LAWS OF PS GROUP HOLDINGS, INC.
TO BE IN EFFECT IMMEDIATELY
PRIOR TO THE REORGANIZATION
<PAGE>
RESTATED BY-LAWS OF
PS GROUP HOLDINGS, INC.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE
I Offices............................................................ B-1
ARTICLE
II Meetings of Stockholders........................................... B-1
ARTICLE
III Directors.......................................................... B-3
ARTICLE
IV Officers........................................................... B-6
ARTICLE
V Seal............................................................... B-7
ARTICLE
VI Form of Stock Certificate.......................................... B-7
ARTICLE
VII Representation of Shares of Other Corporations..................... B-7
ARTICLE
VIII Transfers of Stock................................................. B-8
ARTICLE
IX Lost, Stolen or Destroyed Certificates............................. B-8
ARTICLE
X Record Date........................................................ B-8
ARTICLE
XI Registered Stockholders............................................ B-8
ARTICLE
XII Fiscal Year........................................................ B-9
ARTICLE
XIII Notices............................................................ B-9
ARTICLE
XIV Amendments......................................................... B-9
ARTICLE
XV Indemnification and Insurance...................................... B-9
</TABLE>
i
<PAGE>
RESTATED BY-LAWS
OF
PS GROUP HOLDINGS, INC.
A DELAWARE CORPORATION
(HEREINAFTER CALLED THE "CORPORATION")
ARTICLE I
OFFICES
SECTION 1. Registered Office. The registered office of this Corporation
shall be in the City of Wilmington, County of New Castle, State of Delaware,
and the name of the resident agent in charge thereof is The Corporation Trust
Company.
SECTION 2. Other Offices. The Corporation may also have offices at such
other places, either within or without the State of Delaware, as the Board of
Directors (the "Board") may from time to time designate or the business of the
Corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
SECTION 1. Place of Meetings. Meetings of stockholders shall be held at such
time and place, within or without the State of Delaware, as shall be stated in
the notice of the meeting or in a duly executed waiver of notice thereof.
SECTION 2. Annual Meetings. Annual meetings of stockholders shall be held on
the fourth Tuesday of May, if not a legal holiday, and if a legal holiday,
then on the next secular day following, at 10:00 a.m., or at such other date
and time set by the Board and stated in the notice of the meeting, at which
the stockholders shall elect a Board, and transact such other business as may
properly be brought before the meeting.
SECTION 3. Special Meetings. Special meetings of stockholders, for any
purpose or purposes, unless otherwise prescribed by applicable law or by the
Certificate of Incorporation, may be called by the Chairman of the Board (or,
if the Board does not appoint a Chairman of the Board, the Chief Executive
Officer) and shall be called by the Chairman of the Board (or, if the Board
does not appoint a Chairman of the Board, the Chief Executive Officer) or
Secretary at the request in writing of a majority of the Board, or if, and
only if, the special meeting is to be called for the purpose of removing a
member of the Board (a "Director") for cause, at the request in writing of
stockholders owning a majority in amount of the entire capital stock of the
Corporation issued and outstanding and entitled to vote. Such request shall
state the purpose or purposes of the proposed meeting and the business
transacted at any such special meeting of stockholders shall be limited to the
purposes set forth in the notice. Stockholders may not request the call of a
special meeting for any purpose other than as provided herein.
SECTION 4. Stockholder Lists. The officer who has charge of the stock ledger
of the Corporation shall prepare and make, at least ten days before every
meeting of stockholders, a complete list of 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.
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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 days prior to the meeting, either at a place within the city
where the meeting is to be held, which place shall be specified in the notice
of the meeting, or at the place of the meeting, and the list shall also be
available at the meeting during the whole time thereof, and may be inspected
by any stockholder who is present.
SECTION 5. Notice of Meetings. Written notice of each meeting of
stockholders, whether annual or special, stating the place, date and hour of
the meeting shall be given to each stockholder entitled to vote at such
meeting not less than ten nor more than sixty days before the date of the
meeting.
SECTION 6. Quorum and Adjournment. The holders of a majority of the stock
issued and outstanding and entitled to vote thereat, present in person or
represented by proxy, shall constitute a quorum for holding all meetings of
stockholders, except as otherwise provided by applicable law or by the
Certificate of Incorporation. If it shall appear that such quorum is not
present or represented at any meeting of stockholders, the Chairman of the
meeting shall have power to adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum shall be present
or represented. At such adjourned meeting at which a quorum shall be present
or represented, any business may be transacted which might have been
transacted at the meeting as originally noticed. The Chairman of the meeting
may determine that a quorum is present based upon any reasonable evidence of
the presence in person or by proxy of stockholders holding a majority of the
outstanding votes, including without limitation, evidence from any record of
stockholders who have signed a register indicating their presence at the
meeting.
SECTION 7. Voting. In all matters, the vote of the holders of a majority of
the capital stock having voting power present in person or represented by
proxy shall decide any question brought before such meeting, unless the
question is one upon which by express provision of applicable law or of the
Certificate of Incorporation, a different vote is required in which case such
express provision shall govern and control the decision of such question.
SECTION 8. Proxies. Each stockholder entitled to vote at a meeting of
stockholders may authorize in writing or by any other means as is provided in
Section 212 of the Delaware General Corporation Law another person or persons
to act for him by proxy, but no proxy shall be voted or acted upon after
eleven months from its date, unless the person executing the proxy specifies
therein the period of time for which it is to continue in force.
SECTION 9. Judges of Election. The Board may appoint a Judge or Judges of
Election for any meeting of stockholders. Such Judges shall decide upon the
qualification of the voters and report the number of shares represented at the
meeting and entitled to vote, shall conduct the voting and accept the votes,
and when the voting is completed shall ascertain and report the number of
shares voted respectively for and against each position upon which a vote is
taken by ballot. The Judges need not be stockholders, and any officer of the
Corporation may be a Judge on any position other than a vote for or against a
proposal in which he shall have a material interest.
SECTION 10. Notice of Stockholder Business. At an annual meeting of the
stockholders, only such business shall be conducted as shall have been brought
before the meeting (a) by or at the direction of the Board or (b) by any
stockholder of the Corporation who complies with the notice procedures set
forth in this Section 10. For business to be properly brought before an annual
meeting by a stockholder, the stockholder must have given timely notice
thereof in writing to the Secretary of the Corporation. To be timely, a
stockholder's notice must be delivered to or mailed and received at the
principal executive offices of the Corporation, not less than 30 days nor more
than 60 days prior to the meeting; provided, however, that in the event that
less than 40 days' notice or prior public disclosure of the date of the
meeting is given or made to stockholders, notice by the stockholder to be
timely must be received not later than the close of business on the 10th day
following the day on which such notice of the date of the annual meeting was
mailed or such public disclosure was made. A stockholder's notice to the
Secretary shall set forth as to each matter the stockholder proposes to bring
before the annual meeting (a) a brief description of the business desired to
be brought before the annual meeting and the reasons for conducting
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such business at the annual meeting, (b) the name and address, as they appear
on the Corporation's books, of the stockholder proposing such business, (c)
the class and number of shares of the Corporation which are beneficially owned
by the stockholder and (d) any material interest of the stockholder in such
business. Notwithstanding anything in the By-laws to the contrary, no business
shall be conducted at an annual meeting except in accordance with the
procedures set forth in this Section 10. The Chairman of an annual meeting
shall, if the facts warrant, determine and declare to the meeting that
business was not properly brought before the meeting in accordance with the
provisions of this Section 10, and if he should so determine, he shall so
declare to the meeting and any such business not properly brought before the
meeting shall not be transacted.
ARTICLE III
DIRECTORS
SECTION 1. Powers. The Board shall have the power to manage or direct the
management of the property, business and affairs of the Corporation, and
except as expressly limited by law, to exercise all of its corporate powers.
The Board may establish procedures and rules, or may authorize the Chairman of
any meeting of stockholders to establish procedures and rules, for the fair
and orderly conduct of any stockholders meeting, including without limitation,
registration of the stockholders attending the meeting, adoption of an agenda,
establishing the order of business at the meeting, recessing and adjourning
the meeting for the purposes of tabulating any votes and receiving the result
thereof, the timing of the opening and closing of the polls, and the physical
layout of the facilities for the meeting.
SECTION 2. Number. The Board shall consist of one or more members in such
number as shall be determined from time to time by resolution of the Board.
Until otherwise determined by such resolution, the Board shall consist of five
members. Directors need not be stockholders, and each Director shall serve
until his successor is elected and qualified or until his death, retirement,
resignation or removal.
SECTION 3. Nominations. Nominations of candidates for election as Directors
of the Corporation may be made by the Board or by any stockholder entitled to
vote at a meeting at which one or more Directors are to be elected (an
"Election Meeting").
Nominations made by the Board shall be made at a meeting of the Board or by
written consent of Directors in lieu of a meeting, not less than thirty days
prior to the date of an Election Meeting. At the request of the Secretary of
the Corporation, each proposed nominee shall provide the Corporation with such
information concerning himself as is required, under the rules of the
Securities and Exchange Commission, to be included in the Corporation's proxy
statement soliciting proxies for his election as a Director.
Not less than thirty days prior to the date of an Election Meeting any
stockholder who intends to make a nomination at the Election Meeting shall
deliver a notice to the Secretary of the Corporation setting forth (i) the
name, age, business address, and residence address of each nominee proposed in
such notice, (ii) the principal occupation or employment of each such nominee,
(iii) the number of shares of capital stock of the Corporation which are
beneficially owned by each such nominee and (iv) such other information
concerning each such nominee as would be required, under the rules of the
Securities and Exchange Commission, in a proxy statement soliciting proxies
for the election of such nominees. Such notice shall include a signed consent
to serve as a Director of the Corporation, if elected, of each such nominee.
In the event that a person is validly designated as a nominee and shall
thereafter become unable or unwilling to stand for election to the Board, the
Board or the stockholder who proposed such nominee, as the case may be, may
designate a substitute nominee.
If the chairman of the Election Meeting determines that a nomination was not
made in accordance with the foregoing procedures, such nomination shall be
void.
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SECTION 4. Class Division and Term. The Board shall be and is divided into
three classes, Class I, Class II, and Class III, which shall be as nearly
equal in number as possible. Each Director shall serve for a term ending on
the date of the third annual meeting following the annual meeting at which
such Director was elected; and until his successor shall have been elected and
qualified; provided, however, that each initial Director in Class I shall hold
office until the annual meeting of stockholders in 1997; each initial Director
in Class II shall hold office until the annual meeting of stockholders in
1998; and each initial Director in Class III shall hold office until the
annual meeting of stockholders in 1999.
In the event of any increase or decrease in the authorized number of
Directors, (i) each Director then serving as such shall nevertheless continue
as a Director of the class of which he is a member until the expiration of his
current term, or his prior death, retirement, resignation or removal, and (ii)
the newly created or eliminated directorships resulting from such increase or
decrease shall be apportioned by the Board among the three classes of
Directors so as to maintain such classes as nearly equal as possible.
SECTION 5. Vacancies and Newly Created Directorships. Any vacancy in the
Board caused by death, resignation, removal or otherwise, or through an
increase in the number of Directors of a class, shall be filled by a majority
vote of the remaining Directors of the class in which such vacancy occurs, or
by the sole remaining Director of that class if only one Director remains, or
by the majority vote of the remaining Directors of the other two classes if
there be no remaining members of the class in which the vacancy occurs. A
Director so elected to fill a vacancy shall serve for the remainder of the
then present term of the office of the class to which he was elected.
SECTION 6. Initial Meeting. The Board shall meet as soon as practicable
after the annual election of Directors and notice of such first meeting shall
not be required.
SECTION 7. Regular Meeting. Regular meetings of the Board shall be held
without call or notice at such time and place as shall from time to time be
fixed by standing resolution of the Board.
SECTION 8. Special Meetings. Special meetings of the Board may be called at
any time, and for any purpose permitted by law, by the Chairman of the Board,
the Chief Executive Officer or by the Secretary on the request (whether
written or oral) of any two members of the Board, which meetings shall be held
at the time and place designated by the person or persons calling the meeting.
Notice of the time and place of any such meetings shall be given to the
Directors by the Secretary, or in case of his absence, refusal or inability to
act, by any other officer. Any such notice may be given by mail, by private
express courier service, by telegraph, by telecopier, by telephone, by
personal service, or by any thereof as to different Directors.
Notice to a Director by mail or by private express courier service shall be
deemed to have been given if addressed to such Director at the address shown
upon the records of the Corporation for such Director (or as may have been
given to the Corporation by such Director for purposes of notice) and
deposited in a United States Post Office or delivered to such private express
courier service, as the case may be, at least forty-eight hours before the
time of the meeting. Any other written notice shall be deemed to have been
given at the time it is personally delivered to the recipient or is delivered
to a common carrier for transmission, or actually transmitted to the recipient
by the person giving the notice by electronic means. Oral notice shall be
deemed to have been given at the time it is communicated, in person or by
telephone or wireless, to the recipient or to a person at the office or home
of the recipient who may reasonably be expected to communicate the notice to
the recipient.
A notice need not specify the purpose of any special meeting of the Board.
Whenever any Director has been absent from any meeting of the Board for which
notice has not been dispensed with, an entry in the minutes of such meeting to
the effect that notice has been duly given shall be conclusive and
incontrovertible evidence that due notice of such meeting was given to such
Director.
SECTION 9. Quorum. At all meetings of the Board a majority of the whole
Board shall be necessary and sufficient to constitute a quorum for the
transaction of business, and the act of a majority of the Directors present at
any meeting at which there is a quorum shall be the act of the Board, except
as may be otherwise specifically
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provided by applicable law or by the Certificate of Incorporation or by these
By-laws. Any meeting of the Board may be adjourned to meet again at a stated
day and hour. Even though no quorum is present, as required in this Section, a
majority of the Directors present at any meeting of the Board, either regular
or special, may adjourn from time to time until a quorum be had, but no later
than the time fixed for the next regular meeting of the Board. Notice of any
adjourned meeting need not be given.
SECTION 10. Fees and Compensation. Each Director and each member of a
committee of the Board shall receive such fees and reimbursement of expenses
incurred on behalf of the Corporation or in attending meetings as the Board
may from time to time determine.
SECTION 11. Meetings by Telephonic Communication. Members of the Board or
any committee thereof may participate in a regular or special meeting of such
Board or committee by means of conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other, if the standing resolutions fixing the time and place of a regular
meeting or if the notice of the time and place of any regular or special
meeting provides for such participation. Participation in a meeting pursuant
to this Section shall constitute presence in person at such meeting.
SECTION 12. Qualification of Directors. No person can be elected a Director
of this Corporation (whether by vote of the stockholders or the Directors) if,
were he or she to be elected a Director, less than a majority of the total
number of Directors would be Outside Directors. If such a person is nominated
for Director, no votes cast for his or her election shall be counted and, for
this purpose, the announcement of the results of any election of Directors,
shall be delayed pending the determination by the Board referred to below. An
Outside Director is a person who is not: (a) an officer or employee of the
Corporation or any relative of an officer or employee; (b) a Related Person
(as that term is defined in Article X of the Corporation's Certificate of
Incorporation) or an officer, director, employee, associate or affiliate of a
Related Person, or a relative of any of the foregoing; or (c) a person having
a direct or indirect material business relationship with the Corporation. The
Board shall be empowered to determine in its sole and absolute discretion
whether a person is or is not an Outside Director within the meaning of the
foregoing.
SECTION 13. Committees. The Board may, by resolution passed by a majority of
the whole Board, designate one or more committees, each committee to consist
of one or more of the Directors of the Corporation. The Board may designate
one or more Directors as alternate members of any committee, who may replace
any absent or disqualified member at any meeting of the committee. In the
absence or disqualification of a member of a committee and if the Board has
not designated one or more alternates (or if such a designation has been made,
in the absence or disqualification of such alternate(s)), the member or
members thereof present at any meeting and not disqualified from voting,
whether or not he or they constitute a quorum, may unanimously appoint another
member of the Board to act at the meeting in the place of any such absent or
disqualified member or alternate. Any such committee, to the extent provided
in the resolution of the Board shall have and may exercise all the powers and
authority of the Board in the management of the business and affairs of the
Corporation, and may authorize the seal of the Corporation to be affixed to
all papers which may require it; but no such committee shall have the power or
authority in reference to amending the Certificate of Incorporation, adopting
an agreement of merger or consolidation, recommending to the stockholders the
sale, lease or exchange of all or substantially all of the Corporation's
property and assets, recommending to the stockholders a dissolution of the
Corporation or a revocation of a dissolution, or amending the By-laws of the
Corporation; and, unless the resolution expressly so provides, no such
committee shall have the power or authority to declare a dividend or to
authorize the issuance of stock.
SECTION 14. Action Without Meetings. Unless otherwise restricted by
applicable law or by the Certificate of Incorporation or by these By-laws, any
action required or permitted to be taken at any meeting of the Board or of any
committee thereof may be taken without meeting if all members of the Board or
of such committee consent thereto in writing as the case may be, and the
writing or writings are filed with the minutes of proceedings of the Board or
committee. Action shall be taken by the stockholders only at annual or special
meetings of stockholders and stockholders may not act by written consent.
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ARTICLE IV
OFFICERS
SECTION 1. Appointment and Salaries. The Board shall appoint the executive
officers who shall include a Chief Executive Officer, one or more Vice
Presidents (one or more of whom may be designated as Executive Vice Presidents
or as Senior Vice Presidents), a Secretary, a Controller, and a Treasurer. The
Board may also appoint a Chairman of the Board and a President and the Board
or the Chief Executive Officer may appoint such other officers (including
Assistant Vice Presidents, Assistant Secretaries, Assistant Treasurers and
Assistant Controllers) as the Board or they may deem necessary or desirable.
The Board shall fix the salaries of all officers appointed by it. Unless
prohibited by applicable law or by the Certificate of Incorporation or by
these By-laws, one person may be elected or appointed to serve in more than
one official capacity.
SECTION 2. Removal and Resignation. Any officer may be removed, either with
or without cause, by the Board or, in the case of an officer not appointed by
the Board by the Chief Executive Officer (or if the Board does not appoint a
Chief Executive Officer, the President). Any officer may resign at any time by
giving notice to the Board or to the Chief Executive Officer (or if the Board
does not appoint a Chief Executive Officer, the President), or to the
Secretary of the Corporation. Any such resignation shall take effect at the
date of receipt of such notice or at any later time specified therein; and,
unless otherwise specified in such notice, the acceptance of the resignation
shall not be necessary to make it effective.
SECTION 3. The Chairman of the Board. The Board may, at its election,
appoint a Chairman of the Board. If such an officer be elected, he shall, if
present, preside at all meetings of the stockholders and of the Board and
shall have such other powers and duties as may from time to time be assigned
to him by the Board.
SECTION 4. The Chief Executive Officer. Subject to such powers, if any, as
may be given by the Board to the Chairman of the Board, if there is such an
officer, the Chief Executive Officer shall be the chief executive officer of
the Corporation with the powers of general manager, and he shall have
supervision over and may exercise general executive powers concerning all of
the operations and business of the Corporation, with the authority from time
to time to delegate to other officers such executive and other powers and
duties as he may deem advisable. If there be no Chairman of the Board or if he
is absent, the Chief Executive Officer shall preside at all meetings of the
stockholders and of the Board, unless the Board appoints another person who
need not be a stockholder, officer or Director of the Corporation, to preside
at a meeting of stockholders.
SECTION 5. The Vice President. In the absence of the Chief Executive Officer
(or, if the Board does not appoint a Chief Executive Officer, the President)
or in the event of his inability or refusal to act, the Vice President (or if
there be more than one Vice President, the Vice Presidents in the order of
their rank or, if of equal rank, then in the order designated by the Board or
the Chief Executive Officer (or, if the Board does not appoint a Chief
Executive Officer, the President) or, in the absence of any designation, then
in the order of their appointment) shall perform the duties of the Chief
Executive Officer (or, if the Board does not appoint a Chief Executive
Officer, the President) and when so acting, shall have all the powers of and
be subject to all the restrictions upon the Chief Executive Officer (or, if
the Board does not appoint a Chief Executive Officer, the President). The rank
of Vice Presidents in descending order shall be Executive Vice President,
Senior Vice President, Vice President, and Assistant Vice President. The Vice
President shall perform such other duties and have such other powers as the
Board may from time to time prescribe.
SECTION 6. The Secretary. The Secretary shall attend all meetings of the
Board and all meetings of the stockholders and record all the proceedings of
the meetings of the Corporation and of the Board in a book to be kept for that
purpose and shall perform like duties for the committees when required. He
shall give, or cause to be given, notice of all meetings of stockholders and
special meetings of the Board. He shall have custody of the corporate seal of
the Corporation and he, or an Assistant Secretary, shall have authority to
affix the same to any instrument requiring it and when so affixed, it may be
attested by his signature or by the signature of such Assistant Secretary. The
Board may give general authority to any other officer to affix the seal of the
Corporation
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and to attest the affixing by his signature. The Secretary shall perform such
other duties and have such other powers as the Board or the Chief Executive
Officer (or, if the Board does not appoint a Chief Executive Officer, the
President) may from time to time prescribe.
SECTION 7. The Treasurer and the Controller. The Treasurer and the
Controller shall each have custody of the corporate funds and securities and
shall keep full and accurate accounts of receipts and disbursements in books
belonging to the Corporation and shall deposit all monies and other valuable
effects in the name and to the credit of the Corporation in such depositories
as may be designated by the Board. Either the Treasurer or the Controller may
disburse the funds of the Corporation as may be ordered by the Board or the
Chief Executive Officer (or, if the Board does not appoint a Chief Executive
Officer, the President), taking proper vouchers for such disbursements, and
shall render to the Board and Chief Executive Officer (or, if the Board does
not appoint a Chief Executive Officer, the President) an account of
transactions and of the financial condition of the Corporation. The Treasurer
and the Controller each shall perform such other duties and have such other
powers as the Board or the Chief Executive Officer (or, if the Board does not
appoint a Chief Executive Officer, the President) may from time to time
prescribe.
SECTION 8. Assistant Officers. An Assistant Officer shall, in the absence of
the officer to whom he is an assistant or in the event of such officers
inability or refusal to act (or, if there be more than one such assistant
officer, the assistant officers in the order designated by the Board or the
Chief Executive Officer (or, if the Board does not appoint a Chief Executive
Officer, the President) or, in the absence of any designation then in the
order of their appointment), perform the duties and exercise the powers of
such officer. An Assistant Officer shall perform such other duties and have
such other powers as the Board or the Chief Executive Officer (or, if the
Board does not appoint a Chief Executive Officer, the President) may from time
to time prescribe.
ARTICLE V
SEAL
It shall not be necessary to the validity of any instrument executed by any
authorized officer or officers of the Corporation, that the execution of such
instrument be evidenced by the corporate seal, and all documents, instruments,
contracts, and writings of all kinds signed on behalf of the Corporation by
any authorized officer or officers thereof shall be as effectual and binding
on the Corporation without the corporate seal, as if the execution of the same
had been evidenced by affixing the corporate seal thereto.
ARTICLE VI
FORM OF STOCK CERTIFICATE
Every holder of stock in the Corporation shall be entitled to have a
certificate signed by, or in the name of, the Corporation by the Chief
Executive Officer or a Vice President, and by the Treasurer or an Assistant
Treasurer, or the Secretary or an Assistant Secretary of the Corporation,
certifying the number of shares owned by him in the Corporation. Any or all of
the signatures on the certificate may be a facsimile. In case any officer,
transfer agent, or registrar who has signed or whose facsimile signature has
been placed upon a certificate shall have ceased to be such officer, transfer
agent or registrar before such certificate is issued, it may be issued by the
Corporation with the same effect as if he were such officer, transfer agent or
registrar at the date of the issue.
ARTICLE VII
REPRESENTATION OF SHARES OF OTHER CORPORATIONS
The Chief Executive Officer or any other officer or officers authorized by
the Board or the Chief Executive Officer are each authorized to vote,
represent, and exercise on behalf of the Corporation all rights incident to
any
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and all shares of any other corporation or corporations standing in the name
of the Corporation. The authority herein granted may be exercised either by
any such officer in person or by any other person authorized so to do by proxy
or power of attorney duly executed by said officer.
ARTICLE VIII
TRANSFERS OF STOCK
Subject to any provisions relating to restrictions on transfer of the
Corporation's shares contained in, or adopted pursuant to, these By-laws or
the Certificate of Incorporation, upon surrender to the Corporation or a
transfer agent of the Corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignment, or authority to
transfer, it shall be the duty of the Corporation to issue a new certificate
to the person entitled thereto, cancel the old certificate, and record the
transaction upon its books.
ARTICLE IX
LOST, STOLEN OR DESTROYED CERTIFICATES
The Board may direct a new certificate or certificates to 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 the fact by the person claiming the certificate of stock to be
lost, stolen or destroyed. When authorizing such issue of a new certificate or
certificates, the Board 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 legal representative, to give the
Corporation a bond in such sum as it may direct as indemnity against any claim
that may be made against the Corporation with respect to the certificate
alleged to have been lost, stolen or destroyed.
ARTICLE X
RECORD DATE
The Board may fix in advance a date, which shall not be more than sixty days
nor less than ten days preceding the date of any meeting of stockholders, or
the date for the payment of any dividend, or the date for the allotment of
rights, or the date when any change or conversion or exchange of capital stock
shall go into effect, as a record date for the determination of stockholders
entitled to notice of, and to vote at, any such meeting and any adjournment
thereof, or entitled to receive payment of any such dividend, or to any such
allotment of rights, or to exercise the rights in respect of any such change,
conversion or exchange of capital stock, and in such case such stockholders,
and only such stockholders as shall be stockholders of record on the date so
fixed shall be entitled to such notice of, and to vote at, such meeting and
any adjournment thereof, or to receive payment of such dividend, or to receive
such allotment of rights, or to exercise such rights, as the case may be, not
withstanding any transfer of any stock on the books of the Corporation after
any such record date fixed as aforesaid.
ARTICLE XI
REGISTERED STOCKHOLDERS
The Corporation shall be entitled to treat the holder of record of any share
or shares of stock as the holder in fact thereof and, accordingly, shall not
be bound to recognize any equitable or other claim to or interest in such
share on the part of any other person, whether or not it shall have express or
other notice thereof, save as expressly provided by applicable law.
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ARTICLE XII
FISCAL YEAR
The fiscal year of the Corporation shall be fixed by resolution of the
Board.
ARTICLE XIII
NOTICES
SECTION 1. Manner of Notice. Whenever under the provisions of the statutes
or of the Certificate of Incorporation or of these By-laws notice is required
to be given to any Director, committee member, officer or stockholder, it
shall not be construed to mean personal notice, but such notice may be given,
in the case of stockholders, in writing, by mail, by depositing the same in
the post office or letterbox, in a postpaid sealed wrapper, addressed to such
stockholder, at such address as appears on the books of the Corporation, or,
in default of other address, to such stockholder at the General Post Office in
the City of Wilmington, Delaware, and, in the case of Directors, committee
members and officers, by telephone, or by mail or by telegram to the last
business address known to the Secretary of the Corporation, and such notice
shall be deemed to be given at the time when the same shall be thus mailed or
telegraphed or telephoned.
SECTION 2. Waiver of Notice. Whenever any notice is required to be given
under the provisions of the statutes or of the Certificate of Incorporation or
of these By-laws, 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 thereto.
ARTICLE XIV
AMENDMENTS
The Board shall have the power to make, adopt, alter, amend and repeal from
time to time By-laws of this Corporation, subject to the right of the
stockholders entitled to vote with respect thereto to adopt, alter, amend, and
repeal By-laws made by the Board; provided, however, that By-laws shall not be
adopted, altered, amended or repealed by the stockholders of the Corporation,
except by the vote of the holders of not less than sixty-six and two-thirds
percent (66-2/3%) of the outstanding shares of Common Stock.
ARTICLE XV
INDEMNIFICATION AND INSURANCE
SECTION 1. Right to Indemnification. Each person who was or is a party or is
threatened to be made a party to or is involved in any action, suit or
proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he or she, or a
person of whom he or she is the legal representative, is or was a Director or
officer of the Corporation or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another corporation
or of a partnership, joint venture, trust or other enterprise, including
service with respect to employee benefit plans, whether the basis of such
proceeding is alleged action or inaction in an official capacity or in any
other capacity while serving as a director, officer, employee or agent, shall
be indemnified and held harmless by the Corporation to the fullest extent
permitted by the laws of Delaware, as the same exist or may hereafter be
amended, against all costs, charges, expenses, liabilities and losses
(including attorneys' fees, judgements, fines, ERISA excise taxes or penalties
and amounts paid or to be paid in settlement) reasonably incurred or suffered
by such person in connection therewith, and such indemnification shall
continue as to a person who has ceased to be a director, officer, employee or
agent and shall inure to the benefit of his or her heirs, executors and
administrators; provided, however, that, except as provided in Section 2
hereof, the Corporation shall indemnify any such person seeking
indemnification
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in connection with a proceeding (or part thereof) initiated by such person
only if such proceeding (or part thereof) was authorized by the Board. The
right to indemnification conferred in this Article shall be a contract right
and shall include the right to be paid by the Corporation the expenses
incurred in defending any such proceeding in advance of its final disposition;
provided, however, that, if the Delaware General Corporation Law requires, the
payment of such expenses incurred by a director or officer in his or her
capacity as a director or officer (and not in any other capacity in which
service was or is rendered by such person while a director or officer,
including, without limitation, service to an employee benefit plan) in advance
of the final disposition of a proceeding shall be made only upon delivery to
the Corporation of an undertaking, by or on behalf of such director or
officer, to repay all amounts so advanced if it shall ultimately be determined
that such director or officer is not entitled to be indemnified under this
Section or otherwise. The Corporation may, by action of its Board, provide
indemnification to employees and agents of the Corporation with the same scope
and effect as the foregoing indemnification of directors and officers.
SECTION 2. Right of Claimant to Bring Suit. If a claim under Section 1 of
this Article is not paid in full by the Corporation within thirty days after a
written claim has been received by the Corporation, the claimant may at any
time thereafter bring suit against the Corporation to recover the unpaid
amount of the claim and, if successful in whole or in part, the claimant shall
be entitled to be paid also the expense of prosecuting such claim. It shall be
a defense to any such action (other than an action brought to enforce a claim
for expenses incurred in defending any proceeding in advance of its final
disposition where the required undertaking, if any is required, has been
tendered to the Corporation) that the claimant has failed to meet a standard
of conduct which makes it permissible under Delaware law for the Corporation
to indemnify the claimant for the amount claimed. Neither the failure of the
Corporation (including its Board, independent legal counsel, or its
stockholders) to have made a determination prior to the commencement of such
action that indemnification of the claimant is permissible in the
circumstances because he or she has met such standard of conduct, nor an
actual determination by the Corporation (including its Board, independent
legal counsel, or its stockholders) that the claimant has not met such
standard of conduct, shall be a defense to the action or create a presumption
that the claimant has failed to meet such standard of conduct.
SECTION 3. Non-Exclusivity of Rights. The right to indemnification and the
payment of expenses incurred in defending a proceeding in advance of its final
disposition conferred in this Article shall not be exclusive of any other
right which any person may have or hereafter acquire under any statute,
provision of the Certificate of Incorporation, bylaw, agreement, vote of
stockholders or disinterested directors or otherwise.
SECTION 4. Insurance. The Corporation may maintain insurance, at its
expense, to protect itself and any director, officer, employee or agent of the
Corporation or another corporation, partnership, joint venture, trust or other
enterprise against any expense, liability, loss, whether or not the
Corporation would have the power to indemnify such person against such
expense, liability or loss under Delaware law.
SECTION 5. Expenses as a Witness. To the extent that any director, officer,
employee or agent of the Corporation is by reason of such position, or a
position with another entity at the request of the Corporation, a witness in
any action, suit or proceeding, he shall be indemnified against all costs and
expenses actually and reasonably incurred by him or her or on his or her
behalf in connection therewith.
SECTION 6. Indemnity Agreements. The Corporation may enter into agreements
with any director, officer, employee or agent of the Corporation providing for
indemnification to the full extent permitted by Delaware law.
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EXHIBIT 99.1
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NEWS RELEASE
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[LOGO OF PS GROUP, INC.
APPEARS HERE]
FOR IMMEDIATE RELEASE
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PS GROUP, INC. SETS DATE FOR ANNUAL
STOCKHOLDER MEETING TO VOTE ON
HOLDING COMPANY REORGANIZATION
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ALSO ANNOUNCES CHANGES IN PROPOSED
TRANSFER RESTRICTIONS APPLICABLE
TO CERTAIN EXISTING 5% STOCKHOLDERS
SAN DIEGO, CA, APRIL 3, 1996 -- PS Group, Inc. (NYSE Symbol: PSG) announced
today that its Board of Directors has set Tuesday, May 28, 1996 as the date of
the Company's 1996 Annual Meeting of Stockholders. The record date for
determining stockholders entitled to vote at the 1996 Annual Meeting was March
29, 1996.
As previously announced on February 9, 1996, at the 1996 Annual Meeting
stockholders will be asked to vote on a proposed holding company reorganization
which, if consummated, will result in PS Group becoming a wholly-owned
subsidiary of a newly-formed Delaware corporation called PS Group Holdings, Inc.
In the proposed reorganization, each share of PS Group will be converted into
one share of PS Group Holdings on a tax-free basis. The common stock of PS
Group Holdings will be listed on the New York and Pacific Stock Exchanges, as is
currently the case with respect to the common stock of PS Group.
The sole purpose of the proposed reorganization is to help preserve PS
Group's substantial net operating loss and investment tax credit carryforwards
and other tax benefits for use in offsetting future taxable income by decreasing
the risk of an "ownership change" for federal income tax purposes. This will be
accomplished by imposing certain restrictions on the transfer of PS Group
Holdings' stock.
As previously reported, certain federal income tax regulations could
severely limit PS Group's tax benefits. These limitations would apply if there
were an "ownership change," as defined by the applicable regulations. Generally
speaking, an "ownership change" occurs whenever, within a
<PAGE>
three-year period, the aggregate ownership of a company's stock by its "five-
percent shareholders" (as defined by the regulations) increases by more than
fifty percentage points. Making the calculation is complex and uncertain. PS
Group believes that no "ownership change" has occurred with respect to it but
that, as of the date of this press release, the aggregate percentage point
increase in the ownership of its stock by its "5-percent shareholders" was in
excess of 35%.
There is a risk that future changes, primarily involving present or future
holders of 5% of more of PS Group's shares, could result in an "ownership
change" as calculated for federal income tax purposes. Generally, PS Group has
no control over purchases or sales by investors who acquire 5% or more of its
shares. However, the reorganization is being proposed to reduce the risk of an
"ownership change" occurring by restricting transfers that would be taken into
consideration in making the relevant calculation.
The Board of Directors of PS Group has approved three changes in the
proposed transfer restrictions to be submitted for stockholders approval at the
1996 Annual Meeting. The first of these changes relates to the identification
of those "preexisting 5-percent shareholders" of PS Group whose shares will be
exempt from certain of the restrictions. As previously announced, PS Group is
aware of four existing 5-percent shareholders who held their shares on February
8, 1996 (the date fixed by the Board for determining status as a "preexisting 5-
percent shareholder" because it was the day before the Company's first public
announcement of the proposed reorganization). These shareholders and their
percentage ownership of PS Group stock as of the record date for the 1996 Annual
Meeting are: Berkshire Hathaway Inc. (19.9%); ESL Partners, L.P. (19.7%);
Donaldson, Lufkin & Jenrette Securities Corporation and certain affiliated
entities (7.7%); and Mr. J.P. Guerin, a member of the Board of PS Group (5.3%).
Since PS Group cannot control transfers of its shares, there may be other
stockholders who held 5% or more of its stock on February 8, 1996 but of whom PS
Group is unaware. Under the originally proposed transfer restrictions, any such
stockholders were to be treated in the same manner as the known "preexisting 5-
percent shareholders" if at any time they satisfied the Board of Directors of PS
Group Holdings that they owned their shares on February 8, 1996. Under one of
the changes announced today, such stockholders will have until April 30, 1996 to
satisfy the Board of Directors of PS Group Holdings (which consists of the same
five individuals who constitute the Board of Directors of PS Group) as to their
ownership of 5% or more of PS Group's stock on February 8. Unless they do so,
their shares will be subject to all of the transfer restrictions if the proposed
reorganization is consummated. PS Group's Board is proposing this change to
enable it, before the consummation of the proposed
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<PAGE>
reorganization, to identify definitively the 5-percent shareholders who will be
eligible for treatment as "preexisting 5-percent shareholders" and to confirm
the currently available information indicating the Company's annual percentage
point ownership change for purposes of the applicable federal income tax
regulations.
The second and third changes announced today relate to those transfers of
shares held by "preexisting 5-percent shareholders" that will be exempt from the
proposed transfer restrictions. As originally announced, the restrictions will
exempt any transfer of such shares that would not result in a new 5-percent
shareholder or increase the ownership percentage of an existing 5-percent
shareholder (in addition, transfers of interests in entities, such as Berkshire
Hathaway, ESL Partners and Donaldson, Lufkin & Jenrette, that are "preexisting
5-percent shareholders," as distinct from transfers of shares of PS Group
Holdings owned by such entities, will not be restricted). Under the second of
the changes announced today, the Board of Directors of PS Group Holdings will be
required to consent unconditionally to transfers by "preexisting 5-percent
shareholders" (but not their permitted transferees) which do not qualify for the
previously-announced exemption but which, in the Board's determination, do not
increase the annual percentage point ownership change nor raise the ownership
level of an existing 5-percent shareholder. Since, in general, this change will
only be applicable to transfers of shares acquired by a "preexisting 5-percent
shareholder" within three years prior to the transfer, to PS Group's knowledge
the shares of PS Group Holdings to be issued to Berkshire Hathaway and Mr.
Guerin will not be transferable under this exception if the proposed
reorganization is consummated, unlike the shares held by ESL Partners and
Donaldson, Lufkin & Jenrette.
Under the third of the changes announced today, when a "pre-existing 5-
percent shareholder" has transferred its shares of PS Group Holdings with the
Board's consent under the above-described exemption to a transferee whose only
shares of PS Group Holdings are the shares so transferred, that permitted
transferee will be able to re-transfer the shares provided the re-transfer would
not result in a new 5-percent shareholder or increase the ownership percentage
of an existing 5-percent shareholder.
PS Group and PS Group Holdings have filed with the Securities and Exchange
Commission an amended preliminary version of the proxy statement/prospectus to
be distributed to stockholders in connection with the 1996 Annual Meeting. That
document is publicly available and includes the revised text of the proposed
transfer restrictions. However, the offering of the shares of common stock of
PS Group Holdings to be issued in the proposed reorganization will be made under
the federal securities laws only pursuant to the definitive
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<PAGE>
version of that document declared effective by the Securities and Exchange
Commission.
The extent of the actual future utilization of PS Group's tax benefits is
subject to inherent uncertainty inasmuch as the utilization depends on the
amount of otherwise-taxable income against which PS Group will be able to
utilize the tax benefits in future years. Accordingly, even though the proposed
reorganization, if consummated, will reduce the risk of an "ownership change"
occurring that could limit PS Group's ability to use the tax benefits, there can
be no assurance that PS Group will have sufficient taxable income in future
years to actually use the tax benefits before they would otherwise expire.
Nevertheless, if the proposed reorganization is consummated, the transfer
restrictions on the shares of PS Group Holdings will remain in effect for at
least fifteen years unless its Board of Directors determines they are no longer
needed to preserve the tax benefits.
This press release may be deemed to contain certain forward-looking
statements with respect to the financial condition of PS Group, Inc. which
involves risks and uncertainties including, but not limited to, the availability
of the tax benefits referred to herein, the amount of otherwise-taxable income
against which such benefits may be offset, and the effect of the proposed
transfer restrictions referred to herein in reducing the risk of a loss of such
benefits. Further information on potential factors which could affect the
financial results of PS Group and, following the proposed reorganization, PS
Group Holdings are included in the filings of PS Group with the Securities and
Exchange Commission.
* * *
CONTACT:
LAWRENCE A. GUSKE DANIEL H. BURCH
PS GROUP, INC. MACKENZIE PARTNERS, INC.
(619)642-2982 (212)929-5748
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