<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/X/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
HERITAGE MEDIA CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------------------
4) Date Filed:
------------------------------------------------------------------------
<PAGE>
HERITAGE MEDIA CORPORATION
ONE GALLERIA TOWER
13355 NOEL ROAD, SUITE 1500
DALLAS, TEXAS 75240
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 26, 1996
To the stockholders of
Heritage Media Corporation:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Heritage
Media Corporation (the "Company") will be held at The Westin Hotel Galleria,
13340 Dallas Parkway, Dallas, Texas, on May 16, 1996 at 9:00 A.M., local time,
for the following purposes:
(1) To elect seven directors of the Company;
(2) To approve a change in the Company's state of incorporation from Iowa to
Delaware by means of a merger of the Company with a wholly owned
subsidiary of the Company;
(3) To approve an amendment to the Company's 1987 Stock Option Plan (the
"1987 Plan") to cause the immediate vesting of outstanding options upon
certain transactions;
(4) To approve the 1996 Stock Option Plan (the "1996 Plan"); and
(5) To transact such other business as may properly come before the meeting
or any adjournment thereof.
Holders of shares of the Company's common stock have the right to dissent
from the reincorporation merger and to demand payment for their shares of the
Company's common stock by following the procedures set forth in the applicable
provisions of the Iowa Business Corporation Act. A copy of such provisions is
attached hereto as Exhibit B and summarized under "Reincorporation in Delaware--
Dissenters' Rights" in the accompanying proxy statement.
Only stockholders of record at the close of business on March 29, 1996, are
entitled to notice of, and to vote at, the meeting or any adjournment thereof.
Whether or not you plan to attend the Annual Meeting and regardless of the
number of shares you own, please date, sign and return the enclosed proxy card
in the enclosed envelope (which requires no postage if mailed in the United
States).
By Order of the Board of Directors
Wayne Kern,
SECRETARY
Dallas, Texas
April , 1996
<PAGE>
HERITAGE MEDIA CORPORATION
ONE GALLERIA TOWER
13355 NOEL ROAD, SUITE 1500
DALLAS, TEXAS 75240
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 16, 1996
This Proxy Statement is furnished to stockholders of Heritage Media
Corporation, an Iowa corporation (the "Company"), in connection with the
solicitation of proxies by the Board of Directors of the Company for use at the
Annual Meeting of Stockholders to be held on May 16, 1996, and at any and all
adjournments or postponements thereof. Proxies in the form enclosed will be
voted at the meeting, if properly executed, returned to the Company prior to the
meeting and not revoked. The proxy may be revoked at any time before it is voted
by giving written notice to the Secretary of the Company.
This Proxy Statement and accompanying proxy are first being mailed on or
about April , 1996. The Company's Annual Report covering the year ended
December 31, 1995 is enclosed herewith but does not form any part of the
materials for solicitation of proxies.
ACTION TO BE TAKEN AT THE MEETING
At the Annual Meeting, holders of the Company's Class A Common Stock (the
"Common Stock") will consider and vote (i) for the election as directors of the
Company of Messrs. H. Berry Cash, James S. Cownie, Joseph M. Grant, James M.
Hoak, Clark A. Johnson, Alan R. Kahn and David N. Walthall; (ii) to approve a
change in the Company's state of incorporation from Iowa to Delaware through a
merger with a wholly owned subsidiary of the Company; (iii) to amend the 1987
Plan to cause the immediate vesting of outstanding options upon certain
transactions; (iv) to approve and adopt the 1996 Plan; and (v) to transaction
such other business as may properly come before the Annual Meeting.
Only holders of record of Common Stock at the close of business on March 29,
1996 (the "Record Date") are entitled to notice of, and to vote at, the Annual
Meeting. At the close of business on the Record Date, the Company had issued and
outstanding, and entitled to vote at the Annual Meeting, shares of Common
Stock. Holders of record of Common Stock are entitled to one vote per share on
the matters to be considered at the Annual Meeting.
The presence, either in person or by properly executed proxy, of the holders
of record of a majority of the Common Stock is necessary to constitute a quorum
at the Annual Meeting. The election as a director of each nominee set forth
above requires the affirmative vote of the holders of record of a plurality of
the votes cast at the Annual Meeting. The approval of the change in the
Company's state of incorporation through a merger with a wholly owned subsidiary
requires the vote of a majority of shares outstanding on the Record Date. The
approval of the amendment to the 1987 Plan and the adoption of 1996 Plan
requires the vote of a majority of shares represented at the Annual Meeting.
The accompanying proxy, unless the stockholder otherwise specifies in the
proxy, will be voted (i) for the election as directors of the Company of the
seven nominees set forth above, (ii) for the reincorporation proposal, (iii) for
the amendment to the 1987 Plan, (iv) for the adoption of the 1996 Plan, and (v)
at the discretion of the proxy holders on any other matter that may properly
come before the Annual Meeting or any adjournment thereof. If any other matter
or business is brought before the meeting, the proxy holders may vote the
proxies in their discretion. The directors do not know of any such other matter
or business. Should any nominee for the Board of Directors become unable or
1
<PAGE>
unwilling to accept nomination or election, the proxy holders may vote the
proxies for the election in his stead of any other person the Board of Directors
may recommend. Each nominee has expressed his intention to serve the entire term
for which election is sought.
Where stockholders have appropriately specified how their proxies are to be
voted, they will be voted accordingly. Abstentions and broker non-votes will be
counted toward determining whether a quorum is present at the Annual Meeting.
Votes submitted as abstentions on matters to be voted on at the Annual Meeting
will be counted as votes against such matters. Broker non-votes will not count
for or against the matters to be voted on at the Annual Meeting.
PRINCIPAL STOCKHOLDERS
The following table sets forth certain information as to the beneficial
ownership of the Company's Common Stock as of March 15, 1996 by (i) each person
who is known to beneficially own more than 5% of each such class, (ii) each
director of the Company, (iii) certain named executive officers and (iv) all
officers and directors as a group. Unless otherwise indicated, each of the
persons named below has sole voting and investment power with respect to the
shares of Common Stock beneficially owned by such person. The Company has no
other classes of stock outstanding other than the Common Stock.
<TABLE>
<CAPTION>
NO. OF
SHARES
NAME AND ADDRESS (1)(2) PERCENT
- ----------------------------------------------------------------- ----------- -----------
<S> <C> <C>
James M. Hoak.................................................... 1,089,076(3) 5.8%
13355 Noel Road, Suite 1500
Dallas, Texas 75240
James S. Cownie.................................................. 166,073(4) *
David N. Walthall................................................ 270,236 1.6
Joseph M. Grant.................................................. 8,000 *
Clark A. Johnson................................................. 7,784 *
Alan R. Kahn..................................................... 15,457 *
Wayne W. LoCurto................................................. 63,148(5) *
Michael T. McSweeney............................................. 194,550 1.0
James J. Robinette............................................... -- --
Paul W. Fiddick.................................................. 79,775 *
H. Berry Cash.................................................... -- --
The Equitable Companies Incorporated(6).......................... 958,050 5.4
787 Seventh Avenue
New York, NY 10009
Massachusetts Financial Services Company(7)...................... 975,411 5.5
500 Boylston St.
Boston, MA 02116
Janus Capital Corporation(8)..................................... 1,573,275 8.9
100 Fillmore St.
Suite 300
Denver, CO 80206
All officers and directors as a group (14 persons)............... 2,044,742 11.0
</TABLE>
- ------------------------
* Less than 1%
(1) Includes shares issuable upon exercise of stock options which are vested or
will be vested prior to May 14, 1996.
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(2) Excludes shares allocated to participants' accounts under the Company's
Retirement Savings Plan.
(3) Includes 35,366 shares of Common Stock held by Mr. Hoak's wife and children.
Mr. Hoak disclaims beneficial ownership of such shares.
(4) Includes 32,005 shares of Common Stock held by Mr. Cownie's family and
charitable trust. Mr. Cownie disclaims beneficial ownership of such shares.
(5) Includes 50 shares of Common Stock held by Mr. LoCurto's children. Mr.
LoCurto disclaims beneficial ownership of such shares.
(6) Based on information contained in amended Schedule 13G dated February 9,
1996 filed jointly on behalf of five French mutual insurance companies, 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, and The Equitable Companies Incorporated and their subsidiaries
(the "Equitable Group"). The Equitable Group has sole voting and dispositive
power with respect to 950,550 of the shares indicated and shares dispositive
power with respect to 7,500 of the shares indicated.
(7) Based on information contained in Schedule 13G dated February 12, 1996.
Massachusetts Financial Services has sole voting power over 920,790 shares
and sole dispositive power over 975,411 shares.
(8) Based on information contained in amended Schedule 13G dated February 13,
1996 filed jointly on behalf of Janus Capital Corporation ("Janus Capital"),
Thomas H. Bailey and Janus Venture Fund (the "Janus Group"). Each of Janus
Capital and Janus Venture Fund is a registered investment advisor. Mr.
Bailey owns approximately 12.2% of Janus Capital and serves as President and
Chairman of the Board of Janus Capital and as a result of such stock
ownership and positions may be deemed to exercise control over Janus
Capital. The Janus Group does not have sole dispositive and voting power
with respect to any of the shares indicated and shares voting and
dispositive power with respect to all of the shares indicated.
DIRECTORS AND EXECUTIVE OFFICERS
GENERAL
A brief description of each director and executive officer of the Company is
provided below. Directors hold office until the next annual meeting of the
stockholders or until their successors are elected and qualified. All officers
serve at the discretion of the Board of Directors.
James M. Hoak, 52, has served as Chairman of the Board of the Company since
August 1987. Mr. Hoak has also served as Chairman of Cypress Capital Corporation
(a private investment company) since September 1991, and as Chairman and
President of James M. Hoak & Co. (an investment banking company) and Hoak
Securities Corp. (a securities broker-dealer) since 1995. Mr. Hoak served as
Chairman and Chief Executive Officer of Crown Media, Inc. (a cable television
company) from 1991 to 1995. Mr. Hoak is a director of Airgas, Inc., Midwest
Resources, Inc., Pier 1 Imports, Inc., Sun Coast Industries, Inc. and Texas
Industries, Inc.
David N. Walthall, 50, has served as President, Chief Executive Officer and
a director of the Company since August 1987.
Paul W. Fiddick, 46, has served as Executive Vice President and President,
Radio Group of the Company since August 1987.
Wayne W. LoCurto, 52, has served as an Executive Vice President of the
Company and as President, Actmedia since November 1989.
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Michael T. McSweeney, 59, has served as an Executive Vice President of the
Company since February 1996 upon the acquisition by the Company of DIMAC
Corporation ("DIMAC"). Mr. McSweeney has been the Chief Executive Officer of
DIMAC since 1988 and was the Chairman of the Board of DIMAC from August 1995 to
February 1996. Mr. McSweeney has held various positions with DIMAC since 1988.
James J. Robinette, 62, has served as Executive Vice President and
President, Television Group of the Company since August 1987.
Wayne Kern, 63, has served as Senior Vice President and Secretary of the
Company since 1987. From July 1991 to March 1995, Mr. Kern also served as
Executive Vice President of Crown Media, Inc. From 1985 to 1991, Mr. Kern served
as the Executive or Senior Vice President, General Counsel and Secretary of
Heritage Communications, Inc. ("HCI"), a diversified communications company.
James P. Lehr, 48, has served as Senior Vice President--Chief Accounting and
Administrative Officer since December 1995. From December 1987 to December 1995,
Mr. Lehr served as Vice President - Administration, Controller and Assistant
Secretary of the Company.
Douglas N. Woodrum, 38, has served as Executive Vice President-Chief
Financial Officer since December 1995. From January 1995 to December 1995, Mr.
Woodrum served as Vice President, Finance. From August 1987 to January 1995, Mr.
Woodrum served as Vice President, Development and Treasurer of the Company.
H. Berry Cash, 57, has been a partner of InterWest Partners, a venture
capital firm, since 1986. Mr. Cash also serves as Chairman of the Board of Cyrix
Corporation and serves on the board of directors of ProNet, Inc., Aurora
Electronics, Inc., BenchMarq Microelectronics, AMX Corporation and i2
Technologies, Inc. Mr. Cash was appointed to the Board of Directors in January
1996.
James S. Cownie, 51, has been the Chairman of the corporate partner of New
Heritage Associates (a cable television firm unaffiliated with the Company)
since March 1991. Mr. Cownie was first elected as a director of the Company in
July 1989.
Joseph M. Grant, 57, has served as the Senior Vice President and Chief
Financial Officer of Electronic Data Systems, Inc. (an information technology
company) since December 1990. Mr. Grant has been a director of the Company since
June 1992.
Clark A. Johnson, 65, has served as the Chairman and Chief Executive Officer
of Pier 1 Imports, Inc. (a specialty retailer of home furnishings) since 1988.
Mr. Johnson has been a director of the Company since March 1990. He also serves
as a director of Actava, Inc., Albertson's, Inc., AnaComp, Inc. and Intertan,
Inc.
Alan R. Kahn, 56, is a business consultant and private investor and was
President of Sun Country Industries, Inc. (a beverage distributor) from 1984 to
1988. Mr. Kahn has been a director of the Company since August 1987.
The Board of Directors held 11 meetings in 1995. No director attended fewer
than 75% of the meetings of the Board (and any committees thereof) which they
were required to attend, other than Mr. Grant who attended eight meetings.
COMMITTEES OF THE BOARD OF DIRECTORS
The Executive Committee, comprised of Messrs. Hoak (Chairman), Kahn and
Walthall, is empowered to exercise all authority of the entire Board, subject to
certain exceptions (primarily statutory) relating generally to such matters as
mergers, sales of assets, sales of capital stock, bylaw amendments and changes
to the membership of the Board. The Executive Committee did not meet
independently from the Board of Directors during 1995.
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The Compensation Committee, comprised of Messrs. Cownie, Grant and Kahn, met
once during 1995. Reference is made to the separate report of the Compensation
Committee set forth elsewhere herein.
The Audit Committee, comprised of Messrs. Cownie, Grant, Johnson and Kahn
(Chairman), is empowered to recommend to the Board the appointment of the
Company's independent public accountants and to periodically meet with such
accountants to discuss their fees, audit and non-audit services, and the
internal controls and audit results for the Company. The Audit Committee also is
empowered to meet with the Company's accounting personnel to review accounting
policies and reports. The Audit Committee met once during 1995.
COMPENSATION OF DIRECTORS
Each director who is not an officer or employee of the Company receives, in
addition to the basic annual fee of $15,000, $1,000 per Board meeting (or
committee meeting not in conjunction with a Board meeting) held in person or
$200 if the meeting is held by telephone. Any non-employee director may elect to
defer such fees for later payment with an interest equivalent or invest such
fees in shares of the Company's Common Stock. When first elected, directors who
are not officers or employees of the Company are granted options (vesting in
full after two years of service and expiring ten years after the date of grant)
to acquire 2,000 shares of Common Stock at the fair market value of such stock
on the date of grant. Thereafter, options to purchase an additional 2,000 shares
of Common Stock are granted annually.
SUMMARY OF EXECUTIVE COMPENSATION
The following table sets forth information concerning cash compensation paid
or accrued by the Company during the three years ended December 31, 1995 to or
for the Company's chief executive officer and the four other highest compensated
executive officers of the Company.
<TABLE>
<CAPTION>
SECURITIES
NAME AND PRINCIPAL OTHER ANNUAL UNDERLYING LTIP ALL OTHER
POSITION YEAR SALARY BONUS(1) COMPENSATION(2) OPTIONS/SARS PAYOUTS(3) COMPENSATION(4)
- ------------------ --------- ----------- ----------- ---------------- ------------- ------------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C>
Mr. Walthall 1995 $ 385,000 $ 211,970 -- 50,000 $ 3,000
CEO and Pres. 1994 337,000 269,600 -- 50,000 4,500
1993 300,171 273,151 50,000 4,497
Mr. LoCurto 1995 300,000 110,952 -- 30,000 $ 3,371,500 3,000
Exec. V.P. 1994 275,000 165,000 -- 30,000 4,500
1993 258,889 160,500 20,000 4,497
Mr. Hoak 1995 240,000 82,585 -- 35,000 3,000
Chairman 1994 240,000 120,000 -- 35,000 4,500
1993 240,923 125,794 2,000 4,497
Mr. Robinette 1995 231,000 129,845 -- -- 3,000
Exec. V.P. 1994 210,000 147,000 $ 115,466 -- 4,500
1993 195,089 149,400 -- 4,497
Mr. Fiddick 1995 215,000 99,783 -- 20,000 3,000
Exec. V.P. 1994 193,550 116,130 -- 20,000 4,500
1993 175,019 117,750 14,000 4,497
</TABLE>
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(1) Bonus for 1995 paid in 1996.
(2) Unless otherwise indicated, the dollar value of perquisites and other
personal benefits for each of the named executive officers was less than the
established reporting thresholds. The amount indicated in 1993 for Mr.
Robinette includes $98,941 of moving expenses.
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(3) In 1991, Mr. LoCurto was granted 10,000 units under the Actmedia Stock
Appreciation Rights Plan of 1990. Pursuant to this plan, certain executive
officers of the Company's Actmedia, Inc. subsidiary received grants of
phantom equity units reflecting the fair market value of the common share
equity of Actmedia. Persons who received grants of such units received in
1995 cash or shares of the Company's Common stock in an amount equal to the
difference between the value per unit on December 31, 1994 and the base
value on the date of grant with respect to all vested units. The amount
indicated reflects payments received by Mr. LoCurto for such units.
(4) Amounts reflected represent the Company's contribution to its defined
contribution plan on behalf of the named executive officers.
STOCK OPTIONS
The following table sets forth certain information with respect to the
options granted during the year ended December 31, 1995 to the executive
officers named in the above compensation table:
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
- ------------------------------------------------------------------------------ POTENTIAL REALIZABLE VALUE
PERCENT OF AT ASSUMED ANNUAL RATES OF
TOTAL OPTIONS STOCK PRICE APPRECIATION
OPTIONS GRANTED TO EXERCISE OR FOR OPTION TERM (1)
GRANTED EMPLOYEES IN BASE PRICE EXPIRATION --------------------------
NAME (#) FISCAL YEAR ($/SH) DATE 5%($) 10%($)
- --------------------------- --------- ------------- ----------- ---------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Mr. Walthall............... 50,000 14.1% $ 26.625 12-18-05 $ 786,313 $ 2,040,615
Mr. LoCurto................ 30,000 8.5 26.625 12-18-05 471,788 1,224,369
Mr. Hoak................... 35,000 9.9 26.625 12-18-05 550,419 1,428,431
Mr. Robinette.............. -- N/A N/A N/A N/A N/A
Mr. Fiddick................ 20,000 5.6 $ 26.625 12-18-05 314,525 816,246
</TABLE>
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(1) The assumed annual appreciation rates are disclosed pursuant to the rules of
the Securities and Exchange Commission and are not intended to forecast
future appreciation of the Company's Common Stock.
The following table sets forth certain information with respect to the
options exercised by the executive officers named in the above compensation
table during the year ended December 31, 1995 or held by such persons at
December 31, 1995:
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED IN-THE-
OPTIONS AT DECEMBER 31, MONEY OPTION AT DECEMBER 31,
SHARES 1995 1995 (1)
ACQUIRED ON VALUE -------------------------- ----------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- --------------------------- ------------- ------------- ----------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Mr. Walthall............... -- -- 133,561 100,000 $ 1,867,854 $ 87,500
Mr. LoCurto................ -- -- 61,823 60,000 900,445 52,500
Mr. Hoak................... -- -- 77,920 70,000 1,349,745 61,250
Mr. Robinette.............. -- -- -- -- -- --
Mr. Fiddick................ -- -- 43,275 40,000 632,983 35,000
</TABLE>
- ------------------------
(1) Based upon the closing price of the Common Stock of the Company on December
29, 1995, which price was $26.00 per share.
CERTAIN FILINGS
Under the securities laws of the United States, the Company's directors and
executive officers, and persons who own more than 10% of the Company's Common
Stock, are required to report their
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initial ownership of the Company's Common Stock and any subsequent changes in
that ownership to the Securities and Exchange Commission. Specific due dates
have been established for these reports, and the Company is required to disclose
in this proxy statement any failure to file by these dates. All of these filing
requirements were satisfied during 1995.
REINCORPORATION IN DELAWARE
INTRODUCTION
For the reasons set forth below, the Board of Directors believes that the
best interests of the Company and its stockholders will be served by changing
the state of incorporation of the Company from Iowa to Delaware (the
"Reincorporation Proposal" or the "Proposed Reincorporation"). Stockholders are
urged to read carefully the following sections of this proxy statement,
including the related exhibits referenced below and attached hereto, before
voting on the Reincorporation Proposal. Throughout the proxy statement, the term
the "Company" or "HMC-Iowa" refers to the existing Iowa corporation and the term
"HMC-Delaware" refers to Heritage Media Corporation, a new Delaware corporation
and a wholly owned subsidiary of HMC-Iowa, which is the proposed successor to
HMC-Iowa.
As discussed below, the principal reasons for the proposed reincorporation
are the greater flexibility of Delaware corporate law, the substantial body of
case law interpreting that law and the increased ability of the Company to
attract and retain qualified directors. The Company believes that its
stockholders will benefit from the well established principles of corporate
governance that Delaware law affords. The proposed Delaware Certificate of
Incorporation and Bylaws are substantially similar to those currently in effect
in Iowa.
The Reincorporation Proposal will be effected by merging HMC-Iowa into
HMC-Delaware. Upon completion of the merger, HMC-Iowa will cease to exist and
HMC-Delaware will continue to operate the business of the Company under the name
Heritage Media Corporation.
Pursuant to the Agreement and Plan of Merger, a copy of which is attached
hereto as Exhibit A (the "Merger Agreement"), each outstanding share of HMC-Iowa
common stock will automatically be converted into one share of HMC-Delaware
common stock, $.01 par value, upon the effective date of the merger. Each stock
certificate representing issued and outstanding shares of HMC-Iowa common stock
will continue to represent the same number of shares of common stock of
HMC-Delaware. IT WILL NOT BE NECESSARY FOR STOCKHOLDERS TO EXCHANGE THEIR
EXISTING STOCK CERTIFICATES FOR STOCK CERTIFICATES OF HMC-DELAWARE. However,
stockholders may exchange their certificates if they so choose. The common stock
of HMC-Iowa is listed for trading on the American Stock Exchange and after the
merger HMC-Delaware's common stock will be traded on the American Stock Exchange
under the symbol HTG.
Under Iowa law, the affirmative vote of a majority of the outstanding shares
of common stock of HMC-Iowa is required for approval of the Merger Agreement and
the other terms of the Proposed Reincorporation. See "Vote Required for the
Reincorporation Proposal." The Proposed Reincorporation has been unanimously
approved by HMC-Iowa's Board of Directors. If approved by the stockholders, it
is anticipated that the merger will become effective as soon as practicable (the
"Effective Date") following the Annual Meeting. However, pursuant to the Merger
Agreement, the merger may be abandoned or the Merger Agreement may be amended by
the Board of Directors (except that the principal terms may not be amended
without stockholder approval) either before or after stockholder approval has
been obtained and prior to the Effective Date of the Proposed Reincorporation
if, in the opinion of the Board of Directors of HMC-Iowa, circumstances arise
which make it inadvisable to proceed under the original terms of the Merger
Agreement.
THE BOARD RECOMMENDS A VOTE FOR THE PROPOSED REINCORPORATION IN DELAWARE.
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VOTE REQUIRED FOR THE REINCORPORATION PROPOSAL
Approval of the Reincorporation Proposal, which will also constitute
approval of (i) the Merger Agreement, the Certificate of Incorporation and the
Bylaws of HMC-Delaware and (ii) the assumption of HMC-Iowa's employee benefit
plans and stock option plans by HMC-Delaware, will require the affirmative vote
of the holders of a majority of the outstanding shares of common stock of
HMC-Iowa entitled to vote. The effect of an abstention or a broker non-vote is
the same as that of a vote against the Reincorporation Proposal.
DISSENTERS' RIGHTS
Stockholders of HMC-Iowa will have dissenters' rights with respect to the
merger under the Iowa Business Corporation Act ("IBCA") and will be entitled to
receive the "fair value" of their shares. Under the applicable provisions of the
IBCA, the "fair value" of the shares of Common Stock will be equal to the value
of the shares immediately before the effectuation of the merger, excluding any
appreciation or depreciation in anticipation of the merger. Division XIII of the
IBCA is reprinted in its entirety as Exhibit B to this proxy statement. All
references in the IBCA and in this summary to a "stockholder" are to the record
holder of the shares of Common Stock as to which appraisal rights are asserted.
A person having a beneficial interest in shares of Common Stock that are held of
record in the name of another person, such as a broker or nominee, must act
promptly to cause the record holder to follow the steps summarized below
properly and in a timely manner to perfect whatever dissenters' rights the
beneficial owner may have.
The following discussion is not a complete statement of the law relating to
dissenters' rights and is qualified in its entirety by reference to Exhibit B.
THIS DISCUSSION AND EXHIBIT B SHOULD BE REVIEWED CAREFULLY BY ANY HOLDER WHO
WISHES TO EXERCISE STATUTORY DISSENTERS' RIGHTS OR WHO WISHES TO PRESERVE THE
RIGHT TO DO SO BECAUSE FAILURE STRICTLY TO COMPLY WITH THE PROCEDURES SET FORTH
HEREIN AND THEREIN WILL RESULT IN THE LOSS OF DISSENTERS' RIGHTS.
Each stockholder electing to exercise his dissenter's rights and seek
payment for the fair value of his shares must deliver to the Company, before the
taking of the vote on the merger at the Annual Meeting, a written notice of his
intent to demand payment for his shares of Common Stock. Stockholders should
send this notice to the Secretary of the Company at One Galleria Tower, 13355
Noel Road, Suite 1500, Dallas, Texas 75240. This written notice must be in
addition to and separate from any proxy or vote against the merger. Voting
against, abstaining from voting or failing to vote on the merger will not
constitute a demand for dissenters' rights and payment for shares of Common
Stock within the meaning of the IBCA. Any stockholder electing to demand his
dissenters' rights will not be granted dissenters' rights under the IBCA if such
stockholder has either voted in favor of the merger or consented thereto in
writing (including by granting the proxy solicited by this proxy statement or by
returning a signed proxy without specifying a vote against the merger or a
direction to abstain from such vote).
If the Reincorporation Proposal is approved at the Annual Meeting, the
Company will send a notice within 10 days of the Annual Meeting to all of the
stockholders who have delivered a dissenter's notice to the Company. This notice
will state where the payment demand is to be sent and where and when
certificates for the shares of Common Stock must be deposited. Included in this
notice from the Company will be a form to be completed by the dissenting
stockholder for demanding payment, a statement as to the date of the first
announcement to news media or the stockholders of the terms of the
Reincorporation Proposal and a requirement that the stockholder certify to the
Company that he acquired the shares of Common Stock before that date. In
addition, this notice will set a date by which the Company must receive the
completed form of payment demand from the dissenting stockholder which such date
will not be fewer than 30 days nor more than 60 days after the date of the
Company's notice. A dissenting stockholder must complete and return to the
Company the completed form of payment demand included with the Company's notice
and deposit his shares in accordance with the Company's notice to obtain payment
for his shares.
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Section 490.1325 of the IBCA provides that upon completion of the merger or
the receipt by the Company of a stockholder's form of payment demand, whichever
occurs later, the Company will pay each dissenter who has complied with the
applicable provisions of the IBCA the amount the Company estimates to be the
fair value of the dissenter's shares plus accrued interest. The Company will
also send to the dissenting stockholder along with such payment the following:
(i) the Company's balance sheet for the year ended December 31, 1995 together
with the related income statement and statement of changes in stockholders'
equity; (ii) the latest available interim financial statements; (iii) an
explanation of how interest was calculated; (iv) a statement of the dissenter's
right to demand payment under the applicable provision of the IBCA; and (v) a
copy of Section 490.1325 of the IBCA.
Section 490.1327 of the IBCA provides that a corporation may elect to
withhold payment from a dissenter unless the stockholder was the beneficial
holder of the shares before the date set forth in the Company's notice to
dissenting stockholders as the date of the first announcement to the news media
or to the stockholders of the terms of the Proposed Reincorporation. To the
extent the Company elects to withhold payment under Section 490.1327, the
Company must estimate the fair value of the shares of Common Stock owned by the
dissenting stockholder plus accrued interest and will pay this amount to each
dissenter who agrees to accept it in full satisfaction of the dissenter's
demand.
Under Section 490.1328 of the IBCA, a dissenting stockholder may supply his
own estimate of the fair value of his shares of Common Stock plus interest and
demand payment for such amount less any amount received by him from the Company
under Section 490.1325 of the IBCA or, to the extent applicable, reject the
Company's offer under Section 490.1327 and demand payment. A dissenting
stockholder waives his dissenter's right to demand payment if he fails to notify
the Company of his dissatisfaction of the Company's offer within 30 days after
the Company has made or offered payment for his shares.
If a demand for payment under Section 490.1328 of the IBCA remains
unsettled, the Company may commence a proceeding 60 days after receiving the
payment demand and petition the court to determine the fair value of the shares
of Common Stock owned by the dissenting stockholder. If the Company does not
commence a proceeding, the Company is obligated to pay to the dissenting
stockholders the amounts demanded by them under Section 490.1328 of the IBCA.
The Company will make all dissenting stockholders parties to the proceeding.
Each dissenter made a party to the suit is entitled to judgment for either of
the following: (a) the amount, if any, by which the court finds the fair value
of the dissenter's shares plus interest exceeds the amount paid by the Company
or (b) the fair value, plus interest, of the dissenter's after-acquired shares
for which the Company elected to withhold payment under Section 490.1327 of the
IBCA. The court will assess court costs against the Company except to the extent
the court finds the dissenters acted arbitrarily, vexatiously or not in good
faith.
REINCORPORATION PROPOSAL
The discussion set forth below is qualified in its entirety by reference to
the Merger Agreement, the Certificate of Incorporation of HMC-Delaware and the
Bylaws of HMC-Delaware, copies of which are attached hereto as Exhibit A, C, and
D, respectively.
APPROVAL BY STOCKHOLDERS OF THE PROPOSED REINCORPORATION WILL CONSTITUTE
APPROVAL OF THE MERGER AGREEMENT, THE CERTIFICATE OF INCORPORATION AND THE
BYLAWS OF HMC-DELAWARE.
PRINCIPAL REASONS FOR THE PROPOSED REINCORPORATION
As the Company plans for the future, the Board of Directors and management
believe that it is essential to be able to draw upon well established principles
of corporate governance in making legal and business decisions. The prominence
and predictability of Delaware corporate law provide a reliable foundation on
which the Company's governance decisions can be based, and the Company believes
that stockholders will benefit form the responsiveness of Delaware corporate law
to their needs and to those of the corporation they own.
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PROMINENCE, PREDICTABILITY AND FLEXIBILITY OF DELAWARE LAW. For many years
Delaware has followed a policy of encouraging incorporation in that state and,
in furtherance of that policy, has been a leader in adopting, construing and
implementing comprehensive, flexible corporate laws responsive to the legal and
business needs of corporations organized under its laws. Many corporations have
chosen Delaware initially as a state of incorporation or have subsequently
changed corporate domicile to Delaware in a manner similar to that proposed by
the Company. Because of Delaware's prominence as the state of incorporation for
many major corporations, both the legislature and courts in Delaware have
demonstrated an ability and a willingness to act quickly and effectively to meet
changing business needs. The Delaware courts have developed considerable
expertise in dealing with corporate issues and a substantial body of case law
has developed construing Delaware law and establishing public policies with
respect to corporate legal affairs.
INCREASED ABILITY TO ATTRACT AND RETAIN QUALIFIED DIRECTORS. Both Iowa and
Delaware law permit a corporation to include a provision in its certificate of
incorporation which reduces or limits the monetary liability of directors for
breaches of fiduciary duty in certain circumstances. The Company believes that,
in general, Delaware case law regarding a corporation's ability to limit
director liability is more developed and provides more guidance than Iowa law.
The increasing frequency of claims and litigation directed against directors and
officers has greatly expanded the risks facing directors and officers of
corporations in exercising their respective duties. The amount of time and money
required to respond to such claims and to defend such litigation can be
substantial. It is the Company's desire to reduce these risks to its directors
and officers and to limit situations in which monetary damages can be recovered
against directors so that the Company may continue to attract and retain
qualified directors who otherwise might be unwilling to serve because of the
risks involved.
WELL ESTABLISHED PRINCIPLES OF CORPORATE GOVERNANCE. There is substantial
judicial precedent in the Delaware courts as to the legal principles applicable
to measures that may be taken by a corporation and as to the conduct of the
Board of Directors under the business judgment rule. The Company believes that
its stockholders will benefit form the well established principles of corporate
governance that Delaware law affords.
NO CHANGE IN BOARD MEMBERS, BUSINESS, MANAGEMENT, EMPLOYEE BENEFIT PLANS OR
LOCATION OF PRINCIPAL FACILITIES OF THE COMPANY
The Reincorporation Proposal will effect only a change in the legal domicile
of the Company and certain other changes of a legal nature, certain of which are
described in this proxy statement. The Proposed Reincorporation will NOT result
in any change in the name, business, management, fiscal year, assets or
liabilities (except to the extent of legal and other costs of effecting the
reincorporation) or location of the principal facilities of the Company. The
seven directors who are elected at the Annual Meeting will become the directors
of HMC-Delaware. All employee benefit and stock option plans of HMC-Iowa will be
assumed and continued by HMC-Delaware and each option or right issued pursuant
to such plans will automatically be converted into an option or right to
purchase the same number of shares of HMC-Delaware common stock, at the same
price per share, upon the same terms, and subject to the same conditions.
Stockholders should note that approval of the Reincorporation Proposal will also
constitute approval of the assumption of these plans by HMC-Delaware. Other
employee benefit arrangements of HMC-Iowa will also be continued by HMC-Delaware
upon the terms and subject to the conditions currently in effect. As noted
above, after the merger the shares of common stock of HMC-Delaware will be
traded under the symbol HTG in the American Stock Exchange.
Prior to the Effective Date of the merger, the Company will obtain any
requisite consents to such merger from parties with whom it may have material
contractual arrangements (the "Material Agreements"). As a result, HMC-Iowa's
rights and obligations under such Material Agreements will continue and be
assumed by HMC-Delaware.
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DIFFERENCES BETWEEN HMC-DELAWARE AND HMC-IOWA
HMC-Iowa is incorporated under the laws of the State of Iowa, and
HMC-Delaware is incorporated under the laws of the State of Delaware. The
Company stockholders, whose rights as stockholders are currently governed by
Iowa law and HMC-Iowa's Restated Articles of Incorporation and Bylaws, will
become, upon consummation of the merger, stockholders of HMC-Delaware and their
rights will be governed by Delaware law and HMC-Delaware's Certificate of
Incorporation and Bylaws. Certain differences between the rights of holders of
HMC-Iowa common stock and HMC-Delaware common stock are set forth below.
The following summary does not purport to be a complete statement of the
rights of HMC-Iowa stockholders under applicable Iowa law and HMC-Iowa's
Restated Articles of Incorporation and Bylaws as compared with the rights of
HMC-Delaware stockholders under applicable Delaware law and HMC-Delaware's
Certificate of Incorporation and Bylaws. The summary is qualified in its
entirety by the Delaware General Corporation Law ("DGCL") and the IBCA to which
stockholders are referred. Generally, the provisions of the HMC-Delaware
Certificate of Incorporation and Bylaws are similar to those of the HMC-Iowa
Restated Articles of Incorporation and Bylaws in many respects. The discussion
of the Certificate of Incorporation and Bylaws of HMC-Delaware is qualified by
reference to Exhibits C and D hereto, respectively.
CAPITALIZATION
The Restated Articles of Incorporation of HMC-Iowa currently authorize the
Company to issue up to 40,000,000 shares of Class A Common Stock, $0.01 par
value; 10,000,000 shares of Class C Common Stock, $0.01 par value; and
60,000,000 shares of preferred stock, no par value, of which 400,000 shares has
been designated as Series A Junior Participating Preferred Stock (the "Series A
Preferred"). There are currently no shares of the Company's Class C Common Stock
outstanding. The Certificate of Incorporation of HMC-Delaware eliminates the
different classes of common stock and provides that the Company is authorized to
issue 100,000,000 shares of common stock, $.01 par value, and 10,000,000 shares
of preferred stock, no par value, of which 400,000 shares are designated as
Series A Preferred with the identical rights as the Series A Preferred
designated in HMC-Iowa's Restated Articles of Incorporation. Although the
Certificate of Incorporation of HMC-Delaware increases the authorized number of
shares of common stock as compared to the authorized shares of Class A Common
Stock of HMC-Iowa, the Company has no present intention of using additional
shares of common stock other than in the normal course of its business.
Like HMC-Iowa's Restated Articles of Incorporation, HMC-Delaware's
Certificate of Incorporation provides that the Board of Directors is entitled to
determine the powers, preferences and rights and the qualifications, limitations
or restrictions, of the authorized and unissued preferred stock. Although it has
no present intention of doing so, the Board of Directors, without stockholder
approval, could authorize the additional issuance of preferred stock in the
future upon terms or with any rights, preferences and privileges which could
have the effect of delaying or preventing a change in control of the Company or
modifying the effective rights of holders of the Company's common stock under
either Iowa or Delaware law. The Board of Directors could also utilize such
shares for further financings, possible acquisitions and other uses.
AMENDMENT TO CHARTER AND BYLAWS
Amendments to the HMC-Delaware Certificate of Incorporation generally
require the approval of the holders of a majority of all outstanding shares of
HMC-Delaware common stock (with, in each case, each stockholder being entitled
to one vote for each share so held); provided, however, the HMC-Delaware
Certificate of Incorporation provides that amendments to the Certificate of
Incorporation limiting a director's liability for breaches of fiduciary duties,
prohibiting actions by stockholders except at an annual or special meeting and
providing for indemnification of directors and officers require the affirmative
vote of 2/3rds of the Company's then outstanding shares of capital stock. The
holders of the outstanding shares of a class are entitled to vote as a class on
a proposed amendment if the amendment would alter or change the power,
preferences or special rights of one or more series of
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any class so to affect them adversely. The number of authorized shares of any
such class of stock may be increased or decreased (but not below the number of
shares then outstanding) by the affirmative vote of the holders of a majority of
the stock entitled to vote thereon (without a class a vote) if so provided in
any amendment to the Certificate of Incorporation or resolutions creating such
class of stock.
Amendments to HMC-Iowa's Restated Articles of Incorporation generally
require the approval of a majority of the outstanding shares of HMC-Iowa common
stock. However, in the case of amendments to the HMC-Iowa Restated Articles that
alter or change the powers, preferences or special rights of a class of stock so
as to adversely affect the holders thereof, on certain matters related to the
specific rights of a class or series of capital stock, and on all matters where
a separate class vote is required by Iowa law, the holders of different classes
of stock are entitled to vote as a class, with the result that no such amendment
may be effected without the affirmative vote of the holders of a majority of the
total shares of such class entitled to vote thereon. Matters on which a class
vote is required include amendments to change the authorized number of shares of
such class and to change the par value per shares of such class.
The Bylaws of HMC-Delaware may be amended by the Board of Directors of
HMC-Delaware as provided for in HMC-Delaware's Certificate of Incorporation,
subject to the rights of the stockholders to amend such Bylaws. HMC-Iowa's
Bylaws may be amended by the stockholders or by the Board of Directors of
HMC-Iowa.
APPROVAL OF, AND SPECIAL RIGHTS WITH RESPECT TO, MERGERS OR CONSOLIDATIONS AND
CERTAIN OTHER TRANSACTIONS
Under Delaware law, the approval of the holders of a majority of the
outstanding shares of HMC-Delaware common stock is required to authorize
mergers, consolidations, dissolutions or the sale of all or substantially all of
the property or assets of HMC-Delaware.
Under Iowa law, a merger or consolidation generally requires the affirmative
vote of a majority of all outstanding shares of HMC-Iowa (whether or not such
shares would otherwise have voting rights), and the affirmative vote of a
majority of HMC-Iowa's outstanding shares generally would be required to approve
a sale of all or substantially all of HMC-Iowa's property or assets or a
dissolution, or partial dissolution, of HMC-Iowa. However, under Iowa law, no
vote of stockholders of HMC-Iowa is necessary to authorize a merger if (1) the
plan of merger does not affect any amendments to the articles of incorporation
of the surviving corporation and (2) the number of authorized unissued shares or
treasury shares of any class of the surviving corporation to be issued or
delivered under the plan of merger does not exceed 20% of the shares of the
surviving corporation of the same class outstanding immediately prior to the
effective date of the merger.
CERTAIN ANTI-TAKEOVER PROVISIONS
HMC-Delaware is subject to the provisions of Section 203 of DGCL. That
section provides, with certain exceptions, that a Delaware corporation may not
engage in any of a broad range of business combinations with a person or
affiliate, or associate of such person, who is an "interested stockholder" for a
period of three years from the date that such person became an interested
stockholder unless: (i) the transaction resulting in a person becoming an
interested stockholder, or the business combination, is approved by the board of
directions of the corporation before the person becomes an interested
stockholder; (ii) the interested stockholder acquires 85% or more of the
outstanding voting stock of the corporation in the same transaction that makes
it an interested stockholder (excluding shares owned by persons who are both
officers and directors of the corporation, and shares held by certain employee
stock ownership plans); or (iii) on or after the date the person becomes an
interested stockholder, the business combination is approved by the
corporation's board of directors and by the holders of at least 66 % of the
corporation's outstanding voting stock at an annual or special meeting,
excluding shares owned by the interested stockholder. An "interested
stockholder" is defined as any person that is (i) the owner of 15% or more of
the outstanding voting stock of the corporation or (ii) an
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affiliate or associate of the corporation and was the owner of 15% or more of
the outstanding voting stock of the corporation at any time within the
three-year period immediately prior to the date on which it is sought to be
determined whether such person is an interested stockholder.
HMC-Iowa, as an Iowa corporation, is not subject to Section 203 of DGCL. In
addition, Iowa does not have an anti-takeover statute comparable to Section 203
of DGCL.
The IBCA allows a director, in determining what is in the best interest of a
corporation when considering a tender offer or proposal, to consider the
following community interest factors in addition to consideration of the effects
of any action on stockholders: the effects of the action on the corporation's
employees, suppliers, creditors and customers; the effects of the action on the
communities in which the corporation operates; and the long-term as well as
short-term interests of the corporation and its stockholders, including the
possibility that these interests may be served by the continued independence of
the corporation. If on the basis of these community interest factors the
HMC-Iowa Board of Directors determines that the proposal or action is not in the
best interests of HMC-Iowa, the HMC-Iowa Board may reject the proposal or offer.
If the HMC-Iowa Board of Directors rejects such proposal or offer, the Board is
not obligated to facilitate, to remove any barriers to, or refrain from
impeding, the proposal or offer. Consideration of any or all of the community
interest factors is not a violation of the business judgment rule or of any duty
of the director to the stockholders, or a group of stockholders, even if the
director reasonably determines that a community interest factor outweighs the
financial or other benefits to the corporation or a stockholder or group of
stockholders. The Restated Articles of Incorporation of HMC-Iowa contain a
provision that allows its Board of Directors to consider the foregoing community
interests factors. DGCL and HMC-Delaware's Certificate of Incorporation do not
contain a similar provision.
APPRAISAL RIGHTS
Under Delaware law, appraisal rights are generally available for the shares
of any class or series of stock of HMC-Delaware in a merger or consolidation,
provided that no appraisal rights are available for the shares of any class or
series of stock which, at the record date for the meeting held to approve such
transaction, were either (i) listed on a national security exchange or
designated as a national market system security on an interdealer quotation
system by the National Association of Securities Dealers, Inc. ("NASD") or (ii)
held of record by more than 2,000 stockholders. Even if the shares of any class
or series of stock meet the requirements of clause (i) or (ii) above, appraisal
rights are available for such class or series if the holders thereof receive in
the merger or consolidation anything except: (i) shares of stock of the
corporation surviving or resulting from such merger or consolidation; (ii)
shares of stock of any other corporation which at the effective date of the
merger or consolidation is either listed on a national securities exchange, or
designated as a natural market system security on an interdealer quotation
system by the NASD or held of record by more than 2,000 stockholders; (iii) cash
in lieu of fractional shares; or (iv) any combination of the foregoing. No
appraisal rights are available to stockholders of the surviving corporation if
the merger did not require their approval.
Under Iowa law, the holders of HMC-Iowa capital stock have appraisal rights
in any merger or consolidation, any sale or exchange of all or substantially all
of the property and assets of a corporation otherwise than in the usual and
regular course of its business or any amendment to the articles of incorporation
that materially and adversely affects rights in respect to the dissenter's
shares. Such rights do not apply to stockholders of the surviving corporation in
a merger if (i) articles or incorporation of the surviving corporation will not
differ except in certain minor instances; (ii) each stockholder of the surviving
corporation where shares were outstanding immediately before the effective date
of the merger will hold the same number of shares with identical designations,
preferences, limitations and relative rights immediately after the merger; (iii)
the number of voting shares immediately after the merger, plus the number of
voting shares issuable as a result of the merger, either by conversion of
securities issued pursuant to the merger or the exercise of rights and options
issued pursuant to the merger, will not exceed by more than 20% the total number
of voting shares of the surviving corporation outstanding immediately before the
merger; or (iv) the number of shares that entitle their
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holders to participate without limitation in dividends plus the number of such
participating shares issued pursuant to the merger, either by conversion of
securities issued pursuant to the merger or the exercise of rights and warrants
issued pursuant to the merger, will not exceed by more than 20% of the total
number of participating shares outstanding before the merger.
DIVIDEND SOURCES
Under Delaware law, dividends may be paid by HMC-Delaware out of either (1)
surplus or (2) in case there is no surplus, out of its net profits for the
fiscal year in which the dividend is declared and/or the preceding fiscal year,
except when the capital is diminished to an amount less than the aggregate
amount of the capital represented by issued and outstanding stock having a
preference on the distribution of assets. Delaware law defines surplus as the
excess, at any time, of the net assets of a corporation (determined on a fair
market value, as opposed to historical cost, basis) over its stated capital.
Under Iowa law, dividends may be paid by HMC-Iowa, except when HMC-Iowa is
insolvent or if HMC-Iowa's total assets would be less than the sum of its total
liabilities plus the amount that would be needed, if HMC-Iowa were to be
dissolved at the time of the distribution, to satisfy the preferential rights
upon dissolution of stockholders where preferential rights are superior to those
receiving the distribution. In addition, HMC-Iowa's Bylaws prohibit payment of
dividends based on unrealized appreciation in value or revaluation of HMC-Iowa's
assets.
SPECIAL MEETINGS OF STOCKHOLDER; STOCKHOLDER ACTION BY WRITTEN CONSENT
Under Delaware law, special meetings of the stockholders may be called by
the Board of Directors of such other person as may be authorized by the
certificate of incorporation or the bylaws. Under Iowa law, special meetings of
stockholder may be called by the president, the board of directors, the holders
of not less than 10% of all shares entitled to vote at the meeting, or such
other officers or persons as may be provided in the articles of incorporation or
the bylaws. HMC-Delaware's Bylaws do not permit stockholders to call special
meetings.
Under Delaware law, unless otherwise provided in the certificate of
incorporation, any action which may be taken or is required to be taken at any
annual or special meeting of stockholders, may be taken without a meeting,
without prior notice and without a vote, if a consent in writing, setting forth
the action so taken, is signed by the holders of outstanding stock having not
less than the minimum number of votes that would be necessary to authorize or
take such action at a meeting at which all shares entitled to vote thereon were
present and voted. The HMC-Delaware Certificate of Incorporation does not permit
stockholder action by written consent.
Under Iowa law, actions by stockholders of HMC-Iowa may be taken without a
meeting only if a consent in writing is signed by holders of outstanding shares
having not less than 90% of the votes entitled to be cast at a meeting at which
all shares entitled to vote on the action were present and voted.
LIMITATION OF LIABILITY AND INDEMNIFICATION MATTERS
The HMC-Delaware Certificate of Incorporation and Bylaws contain provisions
which require HMC-Delaware to indemnify officers and directors from and against
costs and expenses incurred in connection with any Indemnifiable Claim (as
defined) under the DGCL, based upon any act, omission, neglect, or breach of
duty that such indemnitee may commit while acting as an officer or director
generally following a determination that final disposition of an Indemnified
Claim has occurred, which final determination shall be made by (i)
HMC-Delaware's Board of Directors acting by a majority vote of a quorum
consisting of disinterested directors, (ii) independent legal counsel in a
written opinion if such a quorum is not obtainable, or even if obtainable in the
event that a quorum of disinterested directors so directs, or (iii) action of
the stockholders of HMC-Delaware. For purposes of these provisions, an
"Indemnifiable Claim" generally will not include any claim based upon the
indemnitee's gaining any improper personal profit or advantage, any claim which
is based upon the indemnitee's knowingly fraudulent, deliberately dishonest or
willful misconduct, or any claim based
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upon (x) the indemnitee's acting other than in good faith and in a manner he or
she reasonably believed to be in or not opposed to the best interests of
HMC-Delaware and (y) in the case of a criminal action or proceeding, the
indemnitee's having no reasonable cause to believe his/her conduct was unlawful.
In addition, HMC-Delaware's Certificate of Incorporation provides that, to
the fullest extent permitted by Delaware Law, HMC-Delaware's directors will not
be liable for monetary damages for breach of the directors' fiduciary duty to
HMC-Delaware and its stockholders. The HMC-Delaware's Certificate of
Incorporation further provides that no amendment or repeal of this provision or
the adoption of any provision in HMC-Delaware's Certificate of Incorporation
inconsistent with this provision will eliminate or reduce the effect of this
provision with respect to any action or proceeding accruing or arising prior to
such amendment, repeal or adoption of an inconsistent provision.
HMC-Iowa's Restated Articles of Incorporation provide that a director of
HMC-Iowa will not be liable to HMC-Iowa or its stockholders for monetary damages
for breach of fiduciary duty as a director, except for liability (1) for any
breach of the director's duty of loyalty to HMC-Iowa or its stockholders, (2)
for acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of the law, (3) for a transaction from which the director
derives an improper personal benefit or (4) in respect of certain unlawful
dividend payments or stock redemptions or repurchases. These provisions further
provide that, if the IBCA is amended to authorize corporate action further
eliminating or limiting personal liability of directors, then the liability of a
director of HMC-Iowa shall be eliminated or limited to the fullest extent
permitted by the IBCA as so amended.
HMC-Iowa's Restated Articles of Incorporation and Bylaws also provide that
officers and directors of HMC-Iowa or persons serving as officers and directors
of another corporation, partnership, joint venture, trust or other enterprise,
shall be indemnified by HMC-Iowa to the fullest extent permitted by the IBCA. In
addition, HMC-Iowa will pay all fees and expenses incurred in connection with
any such preceding, including any compromise settlement if the Board of
Directors by a majority vote by disinterested directors first approves such
settlement.
CERTAIN PROVISIONS RELATING TO COMPLIANCE WITH FCC REGULATIONS
The Restated Articles of Incorporation of HMC-Iowa and the Certificate of
Incorporation of HMC-Delaware contain identical provisions regarding compliance
with certain regulations of the Federal Communications Commission (the "FCC").
So long as the Company or any of its subsidiaries holds authority from the FCC
(or any successor thereto) to operate any television or radio broadcasting
station, if the Company has reason to believe that the ownership, or proposed
ownership, of shares of its capital stock by any stockholder or any person
presenting any shares of capital stock of the Company for transfer into his or
her name may be inconsistent with, or in violation of, any provision of the
Federal Communication Laws (as defined in HMC-Iowa's Restated Articles of
Incorporation and HMC-Delaware Certificate of Incorporation) such stockholder or
proposed transferee, upon request of the Company, is required to furnish
promptly to the Company such information (including, without limitation,
information with respect to citizenship, other ownership interests and
affiliations) as the Company reasonably requests to determine whether the
ownership of, or the exercise of any rights with respect to, shares of capital
stock of the Company by such stockholder or proposed transferee is inconsistent
with, or in violation of, Federal Communication Laws. The Company may refuse to
permit the transfer of shares of its capital stock to such proposed transferee
or may suspend those rights of stock ownership the exercise of which would
result in any inconsistency with, or violation of, the Federal Communication
Laws (including the right to vote and the payment of dividends or other
distributions).
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a discussion of certain federal income tax considerations
that may be relevant to holders of HMC-Iowa common stock who receive
HMC-Delaware common stock in exchange for their HMC-Iowa common stock as a
result of the Proposed Reincorporation. The discussion does not address all of
the tax consequences of the Proposed Reincorporation that may be relevant to
particular
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HMC-Iowa stockholders, such as dealers in securities, or those HMC-Iowa
stockholders who acquired their shares upon the exercise of stock options, nor
does it address the tax consequences to holders of options or warrants to
acquire HMC-Iowa common stock. Furthermore, no foreign, state, or local tax
considerations are addressed herein. IN VIEW OF THE VARYING NATURE OF SUCH TAX
CONSEQUENCES, EACH STOCKHOLDER IS URGED TO CONSULT HIS OR HER OWN TAX ADVISOR AS
TO THE SPECIFIC TAX CONSEQUENCES OF THE PROPOSED REINCORPORATION, INCLUDING THE
APPLICABILITY OF FEDERAL, STATE, LOCAL OR FOREIGN TAX LAWS.
Subject to the limitations, qualifications and exceptions described herein,
and assuming the Proposed Reincorporation qualifies as a reorganization within
the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended
(the "Code"), the following tax consequences generally should result:
(a) No gain or loss should be recognized by holders of HMC-Iowa common
stock upon receipt of HMC-Delaware common stock pursuant to the Proposed
Reincorporation.
(b) The aggregate tax basis of the HMC-Delaware common stock received by
each stockholder in the Proposed Reincorporation should be equal to the
aggregate tax basis of the HMC-Iowa common stock surrendered in exchange
therefor.
(c) The holding period of the HMC-Delaware common stock received by each
stockholder of HMC-Iowa should include the period for which such stockholder
held the HMC-Iowa common stock surrendered in exchange therefor, provided
that such HMC-Iowa common stock was held by the stockholder as a capital
asset at the time of Proposed Reincorporation.
(d) The Company should not recognize gain or loss for federal income tax
purposes as a result of the Proposed Reincorporation, and HMC-Delaware
should succeed, without adjustment, to the federal income tax attributes of
HMC-Iowa.
AMENDMENT TO 1987 PLAN
In 1987, the Company adopted the 1987 Plan which was subsequently amended in
1989 and 1993. At the Annual Meeting, stockholders will be asked to approve an
amendment to the 1987 Plan which would cause the immediate vesting of
outstanding options upon certain "Vesting Events" described below. The 1987 Plan
is attached hereto as Exhibit E, to which reference is made for a complete
statement of the 1987 Plan provisions. The following summary of certain of the
1987 Plan's provisions is qualified, in its entirety, by reference to the
attached 1987 Plan.
Under the 1987 Plan, non-qualified stock options for up to 1,500,000 shares
of Common Stock may be granted to officers, directors and key employees of the
Company and its subsidiaries at a price at least equal to fair market value at
the date of grant, unless waived by the Board of Directors. An optionee may not
receive a grant in excess of 100,000 shares of Common Stock in any calendar
year. Options granted under the 1987 Plan vest in full after two years of
employment and are exercisable for not more than 10 years from the date of
grant.
The 1987 Plan provides for officers and directors who are also Company
employees an exemption from the provisions of Section 16(b) for the grant of
options. Section 16(b) provides for recovery by the Company of profits made by
officers and directors on short-term trading in shares of Common Stock of the
Company. The Company requires the approval of the amendment to the 1987 Plan by
the stockholders at the Annual Meeting in order to continue the exemption from
Section 16(b) for the grant of options.
Stock options granted under the 1987 Plan are not currently entitled to
"incentive stock option" treatment for federal income tax purposes provided by
Section 422 of the Code. An optionee, upon exercise of an option under the 1987
Plan, will realize taxable income equal to the difference between the exercise
price and the fair market value at the time of exercise, and the Company is
entitled to a
16
<PAGE>
corresponding deduction. The foregoing statements are based upon current federal
income tax laws and regulations and are subject to change if the tax laws and
regulations, or interpretations thereof, change.
The proposed amendment to the 1987 Plan would cause the immediate vesting of
outstanding options under the 1987 Plan upon certain events and would give to
optionees under the 1987 Plan this benefit which is provided for in the 1996
Plan. Unless the particular option provides otherwise, options granted under the
1987 Plan will become immediately exercisable and vested in full upon the
occurrence, before the expiration or termination of such option, of any of the
events (a "Vesting Event") listed below:
(a) A sale, transfer or other conveyance of all or substantially all of
the assets of the Company on a consolidated basis;
(b) The acquisition of beneficial ownership, as such term is defined in
Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended
(the "Exchange Act), by any "person" (as such term is used in Sections 13(d)
and 14(d) of the Exchange Act), other than (i) the Company or (ii) James
Hoak and his affiliates, directly or indirectly, of securities representing
50% or more of the total number of votes that may be cast for the election
of directors of the Company; or
(c) The commencement (within the meaning of Rule 14d-2 promulgated under
the Exchange Act) of a "tender offer" for stock of the Company subject to
Section 14(d)(2) of the Exchange Act; or
(d) The failure at any annual or special meeting of the Company's
stockholders following an "election contest" subject to Rule 14a-11
promulgated under the Exchange Act, of any of the persons nominated by the
Company in the proxy material mailed to stockholders by the management of
the Company to win election to seats on the Board of Directors, excluding
only those who die, retire voluntarily, are disabled or are otherwise
disqualified in the interim between their nomination and the date of the
meeting.
There are approximately 100 key employees and executive officers and
approximately five non-employee directors who are eligible to receive grants of
options under the Option Plan. The following indicates the number of options
granted under the 1987 Plan to the executive officers named in the "Summary of
Executive Compensation" table: Mr. Walthall, 233,561 options; Mr. LoCurto,
121,823 options; Mr. Hoak, 147,920 options; Mr. Robinette, 9,207 options; and
Mr. Fiddick, 83,275 options. All current executive officers of the Company as a
group have received 790,816 options, and all current directors who are not
executive officers have received 38,748 options as a group. All employees,
including all current officers who are not executive officers, as a group, have
received 1,023,128 options under the 1987 Plan.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE PROPOSED
AMENDMENT TO THE 1987 PLAN.
APPROVAL AND ADOPTION OF THE 1996 STOCK OPTION PLAN
In January 1996, the Board of Directors adopted the 1996 Plan which provides
for the grant of up to 1,500,000 non-qualified stock options to officers,
directors and key employees of the Company and its subsidiaries. At the Annual
Meeting, stockholders will be asked to approve the 1996 Plan. The 1996 Plan is
attached hereto as Exhibit F, to which reference is made for a complete
statement of the 1996 Plan provisions. The following summary of certain of the
1996 Plan's provisions is qualified, in its entirety, by reference to the
attached 1996 Plan.
17
<PAGE>
PURPOSE. The purpose of the 1996 Plan is to provide certain key employees,
officers and directors of the Company and its subsidiaries with an opportunity
to acquire a stake in the operation and growth of the Company as a means of
assuring their maximum effort and the continued growth the Company.
ADMINISTRATION. The 1996 Plan is administered by the Compensation Committee
or other committee appointed by the Board of Directors (the "Committee"). The
Committee consists of two or more directors, each of whom must be
"disinterested" as defined by Rule 16b-3 of the Exchange Act.
ELIGIBILITY. Any employee (including any officer or director who is an
employee) of the Company or any affiliated corporation or partnership is
eligible to receive options under the 1996 Plan. Any director who is not an
employee of the Company is eligible to receive options under the 1996 Plan.
TERMS OF OPTION GRANTS. Subject to the provisions of the 1996 Plan, the
Committee may award options and determine the number of shares to be covered by
each option, the option price therefor, the term of the option, and the other
conditions and limitations applicable to the exercise of the option. The maximum
number of shares which may be subject to all options awarded to a participant
during any calendar year cannot exceed 200,000. Any option granted under the
1996 Plan is not exercisable after the expiration of ten years from the date the
option is granted. In addition, options granted under the 1996 Plan are
non-transferable by the optionee otherwise than by will or the laws of descent
and/or distribution, and is exercisable, during his lifetime, by him only.
EXERCISE OF OPTIONS. Subject to the provisions of 1996 Plan described under
"Acceleration upon Certain Events" below, an optionee under the 1996 Plan must
remain in the continuous employ of the Company for two years from and after the
date on which the option is granted, or such other and greater period as may be
fixed by the Committee, before he can exercise any part of the option. After the
optionee has remained in the continuous employ of the Company for two years, and
other requirements for the exercise of the option have been met, the option
granted under the 1996 Plan may be exercised as to all of the shares subject to
the option. Payment of the option exercise price can be made in cash, or by
certified or cashier's check payable to the order of the Company; provided,
however, that in lieu of cash an optionee may exercise his option by tendering
to the Company such shares of the Common Stock of the Company owned by him
having a fair market value equal to the cash exercise price applicable to his
option.
ADJUSTMENT UPON CHANGES IN CAPITALIZATION OR MERGER. In the event of a
stock dividend, stock split or combination of shares of Common Stock,
recapitalization or other increase or decrease in the number of issued shares of
Common Stock effected without receipt of consideration by the Company,
appropriate and proportionate adjustment shall be made in (i) the number and
kind of shares of stock in respect of which options may be awarded under the
1996 Plan, (ii) the number and kind of shares of stock or other property subject
to outstanding options, and (iii) the award, exercise or conversion price with
respect to any of the foregoing. Subject to any required action by the
stockholders, if the Company is the surviving corporation in any merger or
consolidation, each outstanding option shall pertain to and apply to the
securities to which a holder of the number of shares of Common Stock subject to
the option would have been entitled.
TAX CONSEQUENCES. Stock options granted under the 1996 Plan are not
currently entitled to "incentive stock option" treatment for federal income tax
purposes provided by Section 422 of the Code. An optionee, upon exercise of an
option under the 1996 Plan, will realize taxable income equal to the difference
between the exercise price and the fair market value at the time of exercise,
and the Company is entitled to a corresponding deduction. The foregoing
statements are based upon current federal income tax laws and regulations and
are subject to change if the tax laws and regulations, or interpretations
thereof, change.
GRANTS TO NON-EMPLOYEE DIRECTORS. Non-employee directors receive automatic
grants of options under the 1996 Plan in accordance with a formula set forth in
the 1996 Plan. On the second Friday in December of each year commencing December
13, 1996, each non-employee director will receive a
18
<PAGE>
grant of an option to purchase 2,000 shares of Common Stock. Options granted to
directors will first become exercisable two years after the date of grant,
subject to the provisions described under "Acceleration upon Certain Events"
below. The term of each option granted to a non-employee director shall be ten
years from its date of grant. The option price of the shares of Common Stock
subject to each option granted to a director shall be the fair market value of
such shares on the date the option is granted. If a director ceases to be a
director of the Company, such director's options will be exercisable by him only
during the six months following the date such person ceases to be a director,
except that if a director dies while serving as a director, such director's
options will be exercisable by his or her executor or administrator or, if not
so exercised, by the legatees or the distributees of his or her estate, only
during the six months following his or her death.
ACCELERATION UPON CERTAIN EVENTS. Unless the particular option provides
otherwise, options granted under the 1996 Plan will become immediately
exercisable and vested in full upon the occurrence, before the expiration or
termination of such option, of any of the Vesting Events described under
"Amendment to 1987 Plan" above.
AMENDMENT AND TERMINATION. The Board of Directors of the Company may amend,
suspend or terminate the 1996 Plan or any portion thereof at any time, provided
that (i) no amendment may be made without stockholder approval if such approval
is necessary to comply with any applicable tax or regulatory requirement,
including any requirements for exemptive relief under Section 16(b) of the
Exchange Act or any successor provision, and (ii) the provisions relating to
grants to directors may not be amended more than once every six months other
than to comport with changes in the Code or ERISA or the rules and regulations
under either thereof. If any amendment, suspension or termination of the 1996
Plan materially and adversely affects the rights of the holder of any award then
outstanding, such amendment, suspension or termination will not be deemed to
alter such rights unless the holder shall consent thereto.
RULE 16B-3. The 1996 Plan provides for officers and directors who are also
Company employees an exemption from the provisions of Section 16(b) for the
grant of options. Section 16(b) provides for recovery by the Company of profits
made by officers and directors on short-term trading in shares of Common Stock
of the Company. The Company requires the approval of the 1996 Plan by the
stockholders at the Annual Meeting in order to continue the exemption from
Section 16(b) for the grant of options.
In connection with the acquisition of DIMAC, the Company granted on February
21, 1996, the date of the consummation of the DIMAC acquisition, to four
officers of DIMAC options under the 1996 Plan to purchase at an aggregate of
shares at $31.10 per share. The exercise price is equal to the average
closing price of the Company's Common Stock for a ten-day trading period ending
on the fifth day preceding the acquisition of DIMAC as set forth in the
acquisition agreement between the Company, a subsidiary of the Company and
DIMAC. In addition, on February 21, 1996, 13 employees of DIMAC were granted
options under the 1996 Plan to purchase an aggregate of shares at $29.75
per share, the closing price of the Company's Common Stock on the date of grant.
All of these options will become immediately exercisable after two years,
subject to the optionee's continued employment with the Company and the
provisions of the 1996 Plan providing for the immediate vesting of the options
upon certain Vesting Events.
There are approximately 100 key employees and executive officers and
approximately five non-employee directors who are eligible to receive grants of
options under the 1996 Plan.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE PROPOSAL TO
APPROVE AND ADOPT THE 1996 PLAN.
19
<PAGE>
STOCK PRICE PERFORMANCE
Set forth below is a line graph indicating the stock price performance of
the Company's Common Stock for the five years ended December 31, 1995, as
contrasted with (i) the Standard & Poor's 500 Stock Index and (ii) a peer group
of publicly traded companies with operations in television and radio
broadcasting and in-store marketing with market capitalizations similar to the
Company's.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
PEER GROUP HERITAGE S&P 500
<S> <C> <C> <C>
12-31-90 100 100 100
12-31-91 100 100 130
12-31-92 124 62 140
12-31-93 208 142 154
12-31-94 232 192 156
12-31-95 340 186 215
</TABLE>
- ------------------------
(1) Assumes $100 invested on December 31, 1990 in Heritage Media Common Stock,
S&P 500 Index and a peer group Index.
(2) Companies comprising the peer group index: Catalina Marketing Corporation;
Citicasters; Clear Channel Communications, Inc.; Granite Broadcasting
Corporation; In-Store Advertising, Inc.; Osborn Communications Corporation;
and Outlet Communications, Inc.
STOCKHOLDERS' PROPOSALS
Any proposals that stockholders of the Company desire to have presented at
the 1997 annual meeting of stockholders must be received by the Company at its
principal executive offices no later than December , 1996.
MISCELLANEOUS
The accompanying proxy is being solicited on behalf of the Board of
Directors of the Company. The expense of preparing, printing and mailing the
form of proxy and the material used in the solicitation thereof will be borne by
the Company. In addition to the use of the mails, proxies may be solicited by
personal interview, telephone and telegram by directors and regular officers and
employees of the Company. Arrangements may also be made with brokerage houses
and other custodians, nominees and fiduciaries for the forwarding of
solicitation material to the beneficial owners of stock held of record by such
persons, and the Company may reimburse them for reasonable out-of-pocket
expenses incurred by them in connection therewith.
20
<PAGE>
Representatives of KPMG Peat Marwick, the Company's independent auditors,
are expected to be present at the Annual Meeting with the opportunity to make a
statement if they desire and to be available to respond to appropriate
questions.
By Order of the Board of Directors
Wayne Kern
SECRETARY
Dallas, Texas
April , 1996
21
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE
The Company's Compensation Committee is empowered to review, and to
recommend to the full Board of Directors, the annual compensation, long term
incentive plans and compensation procedures for all executive officers of the
Company. In carrying out these responsibilities, the Committee evaluates
numerous factors including the Company's financial performance in relation to
the goals established by the Board, the individual contribution of each
executive officer, competitive compensation practices within the industry and
general economic inflationary factors. The base salary component of executive
officer compensation is primarily determined by reference to the individual
contribution of each officer. The annual cash bonus component is based solely
upon the achievement of targeted cash flow levels by the Company or, where
applicable, by specific operating segments of the Company. All targeted cash
flow levels are reviewed and approved by the Compensation Committee at the
beginning of each fiscal year. The level of stock option grants to executive
officers is based upon their performance, relative position and responsibilities
in the Company.
The base salary levels for executive officers of the Company were increased
8% in 1995 over 1994. During 1995, the Company achieved approximately 104% of
targeted cash flows, which represented a 16% increase over the cash flow
achieved in 1994. As a result, annual bonuses, which were based upon specific
formulae relating to cash flow levels, represented approximately 30% of cash
compensation received by the executive officers for 1995. In 1995 the Company
granted options to purchase 155,000 shares of the Company's Common Stock to the
executive officers of the Company. These stock option grants reflected the
improved financial performance of the Company and the achievement of several
operating and financial goals established by the Board.
Mr. Walthall's base salary for fiscal 1995 was $385,000, an increase from
$337,000 in the prior year. The Committee recommended this increase to recognize
Mr. Walthall's contribution toward (i) the 16% increase in cash flow of the
Company in 1994 and (ii) the strengthening of the Company's position in the
marketing services arena. The Committee was also cognizant of the generally
higher level of base salaries paid to chief executive officers of comparable
companies. Mr. Walthall's 1995 bonus which was paid in 1996 represented
approximately 35% of his total cash compensation for 1995 and was based entirely
upon the achievement by the Company of 104% of the targeted cash flow level.
Compensation Committee
James S. Cownie
Alan R. Kahn Joseph M. Grant
22
<PAGE>
EXHIBIT A
AGREEMENT AND PLAN OF MERGER
<PAGE>
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger is executed as of , 1996, by
and between Heritage Media Corporation, an Iowa corporation ("Parent"), and
Heritage Media Corporation, a Delaware corporation ("Subsidiary").
WITNESSETH:
WHEREAS, the authorized capital stock of Subsidiary consists of 100,000,000
shares of Class A Common Stock, $0.01 par value ("Subsidiary Common Stock"), and
60,000,000 shares of Preferred Stock, no par value ("Subsidiary Preferred
Stock"), 400,000 shares of which have been designated Series A Junior
Participating Preferred Stock ("Subsidiary Series A Preferred Stock"), of which
1,000 shares of Subsidiary Common Stock are issued and outstanding and owned by
Parent; and
WHEREAS, the authorized capital stock of Parent consists of 40,000,000
shares of Common Stock, $0.01 par value ("Parent Class A Common Stock"),
10,000,000 shares of Class C Common Stock, $0.01 par value ("Parent Class C
Common Stock"), and 60,000,000 shares of Preferred Stock, no par value ("Parent
Preferred Stock"), 400,000 shares of which have been designated Series A Junior
Participating Preferred Stock ("Parent Series A Preferred Stock"), of which
approximately shares of Parent Class A Common Stock and no shares of
Parent Class C Common Stock, Parent Preferred Stock or Parent Series A Preferred
Stock are issued and outstanding; and
WHEREAS, the respective boards of directors and shareholders of Parent and
Subsidiary deem it to be desirable and in the best interest of the respective
corporations that the two corporations merge into a single corporation (the
"Merger"), and, pursuant to resolutions duly adopted, such boards of directors
and shareholders have approved and adopted this Agreement;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
agreements and covenants contained herein, the parties hereto agree as follows:
ARTICLE I
SECTION 1.1. In accordance with the provisions of the Iowa Business
Corporation Act and the Delaware General Corporation Law at the Effective Time
(defined below) of the Merger, Parent shall be merged into Subsidiary, which
shall be the surviving corporation (in its capacity as such surviving
corporation Subsidiary is hereinafter sometimes referred to as the "Surviving
Corporation," and Parent and Subsidiary are hereinafter sometimes referred to
collectively as the "Constituent Corporations"), and as such Subsidiary shall
continue to be governed by the laws of the State of Delaware.
SECTION 1.2. The Merger shall become effective on such date as the Articles
of Merger, executed, adopted and approved in accordance with the Delaware
General Corporation Law and the Iowa Business Corporation Act, shall have been
filed with the Secretary of State of Delaware and the Secretary of State of
Iowa. The time when the Merger shall become effective is herein called the
"Effective Time." The actions described above shall be conclusive evidence, for
all purposes of this Agreement, of compliance with all conditions precedent.
SECTION 1.3. Except as may otherwise be set forth herein, at the Effective
Time, the corporate existence and identity of Subsidiary, with all its purposes,
powers, franchises, privileges, rights and immunities shall continue under the
laws of the State of Delaware, unaffected and unimpaired by the Merger, and the
corporate existence and identity of Parent, with all its purposes, powers,
franchises, privileges, rights, and immunities shall be merged with and into
Subsidiary and the Surviving Corporation shall be vested fully therewith, and
the separate corporate existence and identity of Parent shall thereafter cease,
except to the extent continued by applicable law. At the Effective Time, the
Surviving Corporation shall have the following rights and obligations:
A-1
<PAGE>
(a) The Surviving Corporation shall have all the rights, privileges,
immunities and powers, and shall be subject to all of the duties and
liabilities, of a corporation organized under the laws of the State of
Delaware.
(b) The Surviving Corporation shall succeed to, without other transfer, and
shall possess and enjoy, all of the rights, privileges, immunities,
powers, purposes and franchises, of both a public and private nature, of
the Constituent Corporations and all property, real, personal and mixed,
and all debts due to either of the Constituent Corporations on whatever
account and all other choses of action, and every other interest of or
belonging to either of the Constituent Corporations shall be deemed to be
transferred to and vested in the Surviving Corporation without further
act or deed, and shall thereafter be the property of the Surviving
Corporation as they were of the respective Constituent Corporations, and
the title to any real estate vested by deed or otherwise in either of
said Constituent Corporations shall not revert or be in any way impaired
by reason of the Merger.
(c) The Surviving Corporation shall thenceforth be responsible and liable
for all debts, liabilities, obligations and duties of either of the
Constituent Corporations, and any claim existing or action or proceeding
pending by or against either Constituent Corporation may be prosecuted as
if the Merger had not occurred, or the Surviving Corporation may be
substituted in its place. Neither the rights of creditors nor any liens
upon the property of either Constituent Corporation shall be impaired by
the Merger.
SECTION 1.4. If at any time the Surviving Corporation shall deem or be
advised that any further transfers, assignments, conveyances, assurances in law
or other acts or things are necessary or desirable to vest or confirm in the
Surviving Corporation the title to any property or assets of either of the
Constituent Corporations, each Constituent Corporation and its proper officers
and directors shall execute and deliver any and all such proper transfers,
assignments, conveyances and assurances in law, and shall do all other acts and
things as are necessary or proper to vest or confirm title to such property and
assets in the Surviving Corporation and to otherwise carry out the purposes and
intent of this Agreement.
ARTICLE II
SECTION 2.1. The Certificate of Incorporation of Subsidiary in effect at
the Effective Time shall constitute the Certificate of Incorporation of the
Surviving Corporation until amended, altered or repealed in the manner provided
by law.
SECTION 2.2. The By-Laws of Subsidiary in effect at the Effective Time
shall be the By-Laws of the Surviving Corporation, until amended, altered or
repealed.
SECTION 2.3. The directors of Parent at the Effective Time shall be the
directors of the Surviving Corporation and shall hold office in accordance with
the By-Laws of the Surviving Corporation until the next annual meeting of
shareholders of the Surviving Corporation or until their respective successors
are elected and qualified.
SECTION 2.4. The officers of Parent at the Effective Time shall be the
officers of the Surviving Corporation and shall hold office subject to the
Bylaws of the Surviving Corporation.
ARTICLE III
SECTION 3.1. At the Effective Time, the manner of exchanging the
outstanding securities of the Constituent Corporations shall be as follows:
(a) Each share of Parent Class A Common Stock outstanding immediately prior
to the Effective Time, except all shares of Parent Class A Common Stock
held by Parent in its treasury, which
A-2
<PAGE>
shall be cancelled and no shares issued in respect thereof, shall, at the
Effective Time, by virtue of the Merger and without action on the part of
the holder thereof, be converted into one share of the Subsidiary Common
Stock.
(b) Each share of Subsidiary Common Stock outstanding immediately prior to
the Effective Time shall, at the Effective Time, by virtue of the Merger
and without any action on the part of the holder thereof, be cancelled
and returned to the status of authorized but unissued stock of the
Surviving Corporation.
(c) Upon the Effective Time, each outstanding option or warrant to purchase
shares of Common Stock of Parent, shall, by virtue of the Merger and
without any action on the part of the holder thereof, be converted into
an option or warrant to purchase at the exercise price in effect
immediately prior to the Effective Time, the same number of shares of
Subsidiary Common Stock.
(d) Each certificate representing shares of the Parent Common Stock shall be
deemed for all corporate purposes to evidence the ownership of an equal
number of shares of Common Stock of the Surviving Corporation and the
holders of such certificates will not be required immediately to
surrender such certificate in exchange for certificate of Common Stock of
the Surviving Corporation. As certificates representing Parent Common
Stock are surrendered for transfer, however, the Surviving Corporation
will cause to be issued certificates representing its Common Stock and,
at any time upon surrender by a holder of certificates representing
shares of Parent Common Stock, the Surviving Corporation will cause to be
issued therefore certificates for an equal number of shares of Subsidiary
Common Stock.
(e) No fractional shares of Subsidiary Common Stock and no certificates or
scrip certificates therefor shall be issued.
(f) All of the shares of Subsidiary Common Stock, when delivered pursuant to
the provisions of this Agreement, shall be validly issued, fully paid and
nonassessable.
ARTICLE IV
SECTION 4.1. This Agreement may be executed by the parties hereto in
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall constitute one instrument.
SECTION 4.2. Subject to applicable law, this Agreement may be amended,
modified or supplemented only by written agreement of Parent and Subsidiary at
any time prior to the Effective Time.
SECTION 4.3. This Agreement may be terminated and abandoned by action of
the Board of Directors of the Parent or the Subsidiary at any time prior to the
Effective Time, whether before or after submission to the shareholders of the
Constituent Corporations, by mutual agreement of the parties hereto; provided,
however, the principal terms of this Agreement may not be amended without
shareholder approval.
A-3
<PAGE>
IN WITNESS WHEREOF, each of the Constituent Corporations has caused this
Agreement to be executed on its behalf by its respective officers hereunto duly
authorized as of the date first above written.
HERITAGE MEDIA CORPORATION
an Iowa corporation
By:
--------------------------------------
David N. Walthall, President
HERITAGE MEDIA CORPORATION
a Delaware corporation
By:
--------------------------------------
David N. Walthall, President
A-4
<PAGE>
EXHIBIT B
DIVISION XIII OF THE
IOWA BUSINESS CORPORATION ACT
<PAGE>
DIVISION XIII
DISSENTERS' RIGHTS
PART A
490.1301 DEFINITIONS FOR DIVISION XIII
In this division:
1. "Beneficial shareholder" means the person who is a beneficial owner
of shares held by a nominee as the record shareholder.
2. "Corporation" means the issuer of the shares held by a dissenter
before the corporate action, or the surviving or acquiring corporation by
merger or share exchange of that issuer.
3. "Dissenter" means a shareholder who is entitled to dissent from
corporate action under section 490.1302 and who exercises that right when
and in the manner required by sections 490.1320 through 490.1328.
4. "Fair Value", with respect to a dissenter's shares, means the value
of the shares immediately before the effectuation of the corporate action to
which the dissenter objects, excluding any appreciation or depreciation in
anticipation of the corporate action unless exclusion would be inequitable.
5. "Interest" means interest from the effective date of the corporate
action until the date of payment, at the average rate currently paid by the
corporation on its principal bank loans or, if none, at a rate that is fair
and equitable under all the circumstances.
6. "Record shareholder" means the person in whose name the shares are
registered in the records of a corporation or the beneficial owner of shares
to the extent of the rights granted by a nominee certificate on file with a
corporation.
7. "Shareholder" means the record shareholder or the beneficial
shareholder.
490.1302 SHAREHOLDERS' RIGHT TO DISSENT
1. A shareholder is entitled to dissent from, and obtain payment of the
fair value of the shareholder's shares in the event of, any of the following
corporate actions:
a. Consummation of a plan of merger to which the corporation is a party
if either of the following apply:
(1) Shareholder approval is required for the merger by section
490.1103 of the articles of incorporation and the shareholder is entitled
to vote on the merger.
(2) The corporation is a subsidiary that is merged with its parent
under section 490.1104.
b. Consummation of a plan of share exchange to which the corporation is
a party as the corporation whose shares will be acquired, if the shareholder
is entitled to vote on the plan.
c. Consummation of a sale or exchange of all, or substantially all, of
the property of the corporation other than in the usual and regular course
of business, if the shareholder is entitled to vote on the sale or exchange,
including a sale in dissolution, but not including a sale pursuant to court
order or a sale for cash pursuant to a plan by which all or substantially
all of the net proceeds of the sale will be distributed to the shareholders
within one year after the date of sale.
d. An amendment of the articles of incorporation that materially and
adversely affects rights in respect of a dissenter's shares because it does
any or all of the following:
(1) Alters or abolishes a preferential right of the shares.
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(2) Creates, alters, or abolishes a right in respect of redemption,
including a provision respecting a sinking fund for the redemption or
repurchase, of the shares.
(3) Alters or abolishes a preemptive right of the holder of the
shares to acquire shares or other securities.
(4) Excludes or limits the right of the shares to vote on any matter,
or to cumulate votes, other than a limitation by dilution through
issuance of shares or other securities with similar voting rights.
(5) Reduces the number of shares owned by the shareholder to a
fraction of a share if the fractional share so created is to be acquired
for cash under section 490.604.
(6) Extends, for the first time after being governed by this chapter,
the period of duration of a corporation organized under chapter 491 or
496A and existing for a period of years on the day preceding the date the
corporation is first governed by this chapter.
e. Any corporate action taken pursuant to a shareholder vote to the
extent the articles of incorporation, bylaws, or a resolution of the board
of directors provides that voting or nonvoting shareholders are entitled to
dissent and obtain payment for their shares.
2. A shareholder entitled to dissent and obtain payment for the
shareholder's shares under this chapter is not entitled to challenge the
corporate action creating the shareholder's entitlement unless the action is
unlawful or fraudulent with respect to the shareholder or the corporation.
490.1303 DISSENT BY NOMINEES AND BENEFICIAL OWNERS
1. A record shareholder may assert dissenters' rights as to fewer than all
the shares registered in that shareholder's name only if the shareholder
dissents with respect to all shares beneficially owned by any one person and
notifies the corporation in writing of the name and address of each person on
whose behalf the shareholder asserts dissenters' rights. The rights of a partial
dissenter under this subsection are determined as if the shares as to which the
shareholder dissents and the shareholder's other shares were registered in the
names of different shareholders.
2. A beneficial shareholder may assert dissenters' rights as to shares held
on the shareholder's behalf only if the shareholder does both of the following:
a. Submits to the corporation the record shareholder's written consent
to the dissent not later than the time the beneficial shareholder asserts
dissenters' rights.
b. Does so with respect to all shares of which the shareholder is the
beneficial shareholder or over which that beneficial shareholder has power
to direct the vote.
PART B
490.1320 NOTICE OF DISSENTERS' RIGHTS
1. If proposed corporate action creating dissenters' rights under section
490.1302 is submitted to a vote at a shareholders' meeting, the meeting notice
must state that shareholders are or may be entitled to assert dissenters' rights
under this part and be accompanied by a copy of this part.
2. If corporate action creating dissenters' rights under section 490.1302
is taken without a vote of shareholders, the corporation shall notify in writing
all shareholders entitled to assert dissenters' rights that the action was taken
and send them the dissenters' notice described in section 490.1322.
490.1321 NOTICE OF INTENT OF DEMAND PAYMENT
1. If proposed corporate action creating dissenters' rights under section
490.1302 is submitted to a vote at a shareholders' meeting, a shareholder who
wishes to assert dissenters' rights must do all of the the following:
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a. Deliver to the corporation before the vote is taken written notice
of the shareholder's intent to demand payment for the shareholder's shares
if the proposed action is effectuated.
b. Not vote the dissenting shareholder's shares in favor of the
proposed action.
2. A shareholder who does not satisfy the requirements of subsection 1, is
not entitled to payment for the shareholder's shares under this part.
490.1322 DISSENTERS' NOTICE
1. If proposed corporate action creating dissenters' rights under section
490.1302 is authorized at a shareholders' meeting, the corporation shall deliver
a written dissenters' notice to all shareholders who satisfied the requirements
of section 490.1321.
2. The dissenters' notice must be sent no later than ten days after the
proposed corporate action is authorized at a shareholders' meeting, or, if the
corporate action is taken without a vote of the shareholders, no later than ten
days after the corporate action is taken, and must do all of the following:
a. State where the payment demand must be sent and where and when
certificates for certificated shares must be deposited.
b. Inform holders of uncertificated shares to what extent transfer of
the shares will be restricted after the payment demand is received.
c. Supply a form for demanding payment that includes the date of the
first announcement to news media or to shareholders of the terms of the
proposed corporate action and requires that the person asserting dissenters'
rights certify whether or not the person acquired beneficial ownership of
the shares before that date.
d. Set a date by which the corporation must receive the payment demand,
which date shall not be fewer than thirty nor more than sixty days after the
date the dissenters' notice is delivered.
e. Be accompanied by a copy of this division.
490.1323 DUTY TO DEMAND PAYMENT
1. A shareholder sent a dissenter's notice described in section 490.1322
must demand payment, certify whether the shareholder acquired beneficial
ownership of the shares before the date required to be set forth in the
dissenter's notice pursuant to section 490.1322, subsection 2, paragraph "c",
and deposit the shareholder's certificates in accordance with the terms of the
notice.
2. The shareholder who demands payment and deposits the shareholder's
shares under subsection 1 retains all other rights of a shareholder until these
rights are canceled or modified by the taking of the proposed corporate action.
3. A shareholder who does not demand payment or deposit the shareholder's
share certificates where required, each by the date set in the dissenters'
notice, is not entitled to payment for the shareholder's shares under this
division.
490.1324 SHARE RESTRICTIONS
1. The corporation may restrict the transfer of uncertificated shares from
the date the demand for their payment is received until the proposed corporate
action is taken or the restrictions released under section 490.1326.
2. The person for whom dissenters' rights are asserted as to uncertificated
shares retains all other rights of a shareholder until these rights are canceled
or modified by the taking of the proposed corporate action.
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490.1325 PAYMENT
1. Except as provided in section 490.1327, at the time the proposed
corporate action is taken, or upon receipt of a payment demand, whichever occurs
later, the corporation shall pay each dissenter who complied with section
490.1323 the amount the corporation estimates to be the fair value of the
dissenter's shares, plus accrued interest.
2. The payment must be accompanied by all of the following:
a. The corporation's balance sheet as of the end of a fiscal year
ending not more than sixteen months before the date of payment, an income
statement for that year, a statement of changes in shareholders' equity for
that year, and the latest available interim financial statements, if any.
b. A statement of the corporation's estimate of the fair value of the
shares.
c. An explanation of how the interest was calculated.
d. A statement of the dissenter's right to demand payment under section
490.1328.
e. A copy of this division.
490.1326 FAILURE TO TAKE ACTION.
1. If the corporation does not take the proposed action within sixty days
after the date set for demanding payment and depositing share certificates, the
corporation shall return the deposited certificates and release the transfer
restrictions imposed on uncertificated shares.
2. If after returning deposited certificates and releasing transfer
restrictions, the corporation takes the proposed action, it must send a new
dissenters' notice under section 490.1322 as if the corporate action was taken
without a vote of the shareholders and repeat the payment demand procedure.
490.1327 AFTER-ACQUIRED SHARES.
1. A corporation may elect to withhold payment required by section 490.1325
from a dissenter unless the dissenter was the beneficial owner of the shares
before the date set forth in the dissenters' notice as the date of the first
announcement to news media or to shareholders of the terms of the proposed
corporate action.
2. To the extent the corporation elects to withhold payment under
subsection 1, after taking the proposed corporate action, it shall estimate the
fair value of the shares, plus accrued interest, and shall pay this amount to
each dissenter who agrees to accept it in full satisfaction of the dissenter's
demand. The corporation shall send with its offer a statement of its estimate of
the fair value of the shares, an explanation of how the interest was calculated,
and a statement of the dissenter's right to demand payment under section
490.1328.
490.1328 PROCEDURE IF SHAREHOLDER DISSATISFIED WITH PAYMENT OR OFFER.
1. A dissenter may notify the corporation in writing of the dissenter's own
estimate of the fair value of the dissenter's shares and amount of interest due,
and demand payment of the dissenter's estimate, less any payment under section
490.1325, or reject the corporation's offer under section 490.1327 and demand
payment of the fair value of the dissenter's shares and interest due, if any of
the following apply:
a. The dissenter believes that the amount paid under section 490.1325
or offered under section 490.1327 is less than the fair value of the
dissenter's shares or that the interest due is incorrectly calculated.
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b. The corporation fails to make payment under section 490.1325 within
sixty days after the date set for demanding payment.
c. The corporation, having failed to take the proposed action, does not
return the deposited certificates or release the transfer restrictions
imposed on uncertificated shares within sixty days after the date set for
demanding payment.
2. A dissenter waives the dissenter's right to demand payment under this
section unless the dissenter notifies the corporation of the dissenter's demand
in writing under subsection 1 within thirty days after the corporation made or
offered payment for the dissenter's shares.
PART C
490.1330 COURT ACTION
1. If a demand for payment under section 490.1328 remains unsettled, the
corporation shall commence a proceeding within sixty days after receiving the
payment demand and petition the court to determine the fair value of the shares
and accrued interest. If the corporation does not commence the proceeding within
the sixty-day period, it shall pay each dissenter whose demand remains unsettled
the amount demanded.
2. The corporation shall commence the proceeding in the district court of
the county where a corporation's principal office or, if none in this state, its
registered office is located. If the corporation is a foreign corporation
without a registered office in this state, it shall commence proceeding in the
county in this state where the registered office of the domestic corporation
merged with or whose shares were acquired by the foreign corporation was
located.
3. The corporation shall make all dissenters, whether or not residents of
this state, whose demands remain unsettled parties to the proceeding as in an
action against their shares and all parties must be served with a copy of the
petition. Nonresidents may be served by registered or certified mail or by
publication as provided by law.
4. The jurisdiction of the court in which the proceeding is commenced under
subsection 2 is plenary and exclusive. The court may appoint one or more persons
as appraisers to receive evidence and recommend decision on the question of fair
value. The appraisers have the powers described in the order appointing them, or
in any amendment to it. The dissenters are entitled to the same discovery rights
as parties in other civil proceedings.
5. Each dissenter made a party to the proceeding is entitled to judgment
for either of the following:
a. The amount, if any, by which the court finds the fair value of the
dissenter's shares, plus interest, exceeds the amount paid by the
corporation.
b. The fair value, plus accrued interest, of the dissenter's
after-acquired shares for which the corporation elected to withhold payment
under section 490.1327.
490.1331 COURT COSTS AND COUNSEL FEES
1. The court in an appraisal proceeding commenced under section 490.1330
shall determine all costs of the proceeding, including the reasonable
compensation and expenses of appraisers appointed by the court. The court shall
assess the costs against the corporation, except that the court may assess costs
against all or some of the dissenters, in amounts the court finds equitable, to
the extent the court finds the dissenters acted arbitrarily, vexatiously, or not
in good faith in demanding payment under section 490.1328.
2. The court may also assess the fees and expenses of counsel and experts
for the respective parties, in amounts the court finds equitable, for either of
the following:
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a. Against the corporation and in favor of any or all dissenters if the
court finds the corporation did not substantially comply with the
requirements of sections 490.1320 through 490.1328.
b. Against either the corporation or a dissenter, in favor of any other
party, if the court finds that the party against whom the fees and expenses
are assessed acted arbitrarily, vexatiously, or not in good faith with
respect to the rights provided by this chapter.
3. If the court finds that the services of counsel for any dissenter were
of substantial benefit to other dissenters similarly situated, and that the fees
for those services should not be assessed against the corporation, the court may
award to these counsel reasonable fees to be paid out of the amounts awarded the
dissenters who were benefited.
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EXHIBIT C
CERTIFICATE OF INCORPORATION OF
HERITAGE MEDIA CORPORATION,
A DELAWARE CORPORATION
<PAGE>
CERTIFICATE OF INCORPORATION
OF
HERITAGE MEDIA CORPORATION
I.
The name of the Corporation is Heritage Media Corporation.
II.
The address of the Corporation's registered office in the State of Delaware
is 1209 Orange Street, City of Wilmington, County of New Castle. The name of its
registered agent at such address is The Corporation Trust Company.
III.
The purpose of the Corporation is to engage in any lawful act or activity
for which corporations may be organized under the General Corporation Law of the
State of Delaware.
IV.
The total number of shares of capital stock that the Corporation shall have
the authority to issue is 100,000,000 shares of Common Stock with a par value of
$0.01 per share, and 60,000,000 shares of Preferred Stock, no par value per
share.
As to the Preferred Stock of the Corporation, 400,000 shares shall be
designated as "Series A Junior Participating Preferred Stock." The Board of
Directors shall have the power to issue any additional shares of Preferred Stock
from time to time in one or more series. The Board of Directors is hereby
authorized to fix or alter from time to time the voting powers and such
designations, preferences and relative, participating, optional or other special
rights of the shares of each such series and the qualifications, limitations or
restrictions of any wholly unissued series of Preferred Stock, and to establish
from time to time the number of shares constituting any such series, or any of
them.
The Board of Directors is further authorized to increase or decrease (but
not below the number of shares of any such series then outstanding) the number
of shares of any series, the number of which was fixed by it, subsequent to the
issue of shares of such series then outstanding, subject to the limitations and
restrictions stated in the resolution of the Board of Directors originally
fixing the number of shares of such series. If the number of shares of any
series is so decreased, then the shares constituting such decrease shall resume
the status which they had prior to the adoption of the resolution originally
fixing the number of shares of such series.
The relative rights, preferences and limitations of the Series A Junior
Participating Preferred Stock are as follows:
Section 1. DESIGNATION AND AMOUNT. The shares of such series shall be
designated as "Series A Junior Participating Preferred Stock: (the "Series A
Preferred Stock") and the number of shares constituting the Series A Preferred
Stock shall be 400,000. Such number of shares may be increased or decreased by
resolution of the Board of Directors; PROVIDED, that no decrease shall reduce
the number of shares of Series A Preferred Stock to a number less than the
number of shares then outstanding plus the number of shares reserved for
issuance upon the exercise of outstanding options, rights or warrants or upon
the conversion of any outstanding securities issued by the Corporation
convertible into Series A Preferred Stock.
Section 2. DIVIDENDS AND DISTRIBUTIONS.
(A) Subject to the rights of the holders of any shares of any series of
Preferred Stock (or any similar stock) ranking prior and superior to the
Series A Preferred Stock with respect to dividends, the holders of shares of
Series A Preferred Stock, in preference to the holders of Common
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Stock of the Corporation, and of any other junior stock, shall be entitled
to receive, when, as and if declared by the Board of Directors out of funds
legally available for the purpose, quarterly dividends payable in cash on
the last business day of November, February, May and August in each year
(each such date being referred to herein as a "Quarterly Dividend Payment
Date"), commencing on the first Quarterly Dividend Payment Date after the
first issuance of a share or fraction of a share of Series A Preferred
Stock, in an amount per share (rounded to the nearest cent) equal to the
greater of (a) $.25 or (b) subject to the provision for adjustment
hereinafter set forth, 100 times the aggregate per share amount of all cash
dividends, and 100 times the aggregate per share amount (payable in kind) of
all non-cash dividends or other distributions, other than a dividend payable
in shares of Common Stock or a subdivision of the outstanding shares of
Common Stock (by reclassification or otherwise), declared on the Common
Stock since the immediately preceding Quarterly Dividend Payment Date, or,
with respect to the first Quarterly Dividend Payment Date, since the first
issuance of any share or fraction of a share of Series A Preferred Stock. In
the event the Corporation shall at any time declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect a subdivision
or combination or consolidation of the outstanding shares of Common Stock
(by reclassification or otherwise than by payment of a dividend in shares of
Common Stock), into a greater or lesser number of shares of Common Stock,
then in each such case the amount to which holders of shares of Series A
Preferred Stock were entitled immediately prior to such event under clause
(b) of the preceding sentence shall be adjusted by multiplying such amount
by a fraction, the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which
is the number of shares of Common Stock that were outstanding immediately
prior to such event.
(B) The Corporation shall declare a dividend or distribution on the
Series A Preferred Stock as provided in paragraph (A) of this Section
immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock); provided that, in
the event no dividend or distribution shall have been declared on the Common
Stock during the period between any Quarterly Dividend Payment Date and the
next subsequent Quarterly Dividend Payment Date, a dividend of $.25 per
share on the Series A Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment date.
(C) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Preferred Stock from the Quarterly Dividend Payment Date
next preceding the date of issue of such shares, unless that date of issue
of such shares is prior to the record date for the first Quarterly Dividend
Payment Date, in which case dividends on such shares shall begin to accrue
from the date of issue of such shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date after the record date for
determination of holders of shares of Series A Preferred Stock entitled to
receive a quarterly dividend and before such Quarterly Dividend Payment
Date, in either of which events such dividends shall begin to accrue and be
cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the shares of Series A
Preferred Stock in an amount less than the total amount of such dividends at
the time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The
Board of Directors may fix a record date for the determination of holders of
shares of Series A Preferred Stock entitled to receive payment of a dividend
or distribution declared thereon, which record date shall be not more than
60 days prior to the date fixed for the payment thereof.
Section 3. VOTING RIGHTS. The holders of shares of Series A Preferred
Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth, each
share of Series A Preferred Stock shall entitle the holder thereof to 100
votes on all matters submitted to a vote of the shareholders of the
Corporation. In the event the Corporation shall at any time declare or pay
any dividend on the Common Stock payable in shares of Common Stock, or
effect a subdivision or
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combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of
Common Stock) into a greater or lesser number of shares of Common Stock,
then in each such case the number of votes per share to which holders of
shares of Series A Preferred Stock were entitled immediately prior to such
event shall be adjusted by multiplying such number by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such
event.
(B) Except as otherwise provided herein, in any other Articles of
Amendment creating a series of Preferred Stock or any similar stock, or by
law, the holders of shares of Series A Preferred Stock and the holders of
shares of Common Stock and any other capital stock of the Corporation having
general voting rights shall vote together as one class on all matters
submitted to a vote of shareholders of the Corporation.
(C) Except as set forth herein, or as otherwise provided by law, holders
of Series A Preferred Stock shall have no special voting rights and their
consent shall not be required (except to the extent they are entitled to
vote with holders of Common Stock as set forth herein) for taking any
corporate action.
Section 4. CERTAIN RESTRICTIONS.
(A) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Preferred Stock as provided in Section 2 are in
arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series A Preferred
Stock outstanding shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends, or may any other distributions, on any
shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred Stock;
(ii) declare or pay dividends, or make any other distributions, on
any shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred
Stock, except dividends paid ratably on the Series A Preferred Stock and
all such parity stock on which dividends are payable or in arrears in
proportion to the total amounts to which the holders of all such shares
are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration shares
of any stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred Stock, provided that
the Corporation may at any time redeem, purchase or otherwise acquire
shares of any stock of the Corporation ranking junior (either as to the
dividends or upon dissolution, liquidation or winding up) to the Series A
Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for consideration any
shares of Series A Preferred Stock, or any shares of stock ranking on a
parity with the Series A Preferred Stock, except in accordance with a
purchase offer made in writing or by publication (as determined by the
Board of Directors) to all holders of such shares upon such terms as the
Board of Directors, after consideration of the respective annual dividend
rates and other relative rights and preferences of the respective Series
and classes, shall determine in good faith will result in fair and
equitable treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the Corporation
to purchase or otherwise acquire for consideration any shares of stock of
the Corporation unless the Corporation could, under paragraph (A) of this
Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
Section 5. REACQUIRED SHARES. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and cancelled promptly after
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the acquisition thereof. All such shares shall upon their cancellation become
authorized but unissued shares of Preferred Stock and may be reissued as part of
a new series of Preferred Stock subject to the conditions and restrictions on
issuance set forth herein, in the Articles or in any other Articles of Amendment
creating a series of Preferred Stock or any similar stock or as otherwise
required by law.
Section 6. LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any liquidation,
dissolution or winding up of the Corporation, no distribution shall be made (1)
to the holders of shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred Stock unless,
prior thereto, the holders of shares of Series A Preferred Stock shall have
received $1 per share, plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of such payment,
provided that the holders of shares of Series A Preferred Stock shall be
entitled to receive an aggregate amount per share, subject to the provision for
adjustment hereinafter set forth, equal to 100 times the aggregate amount to be
distributed per share to holders of shares of Common Stock, or (2) to the
holders of shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred Stock,
except distributions made ratably on the Series A Preferred Stock and all such
parity stock in proportion to the total amounts to which the holders of all such
shares are entitled upon such liquidation, dissolution or winding up. In the
event the Corporation shall at any time declare or pay any dividend on the
Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a great or lesser number of shares of Common Stock, then in each
such case the aggregate amount to which holders of shares of Series A Preferred
Stock were entitled immediately prior to such event under the proviso in clause
(1) of the preceding sentence shall be adjusted by multiplying such amount by a
fraction of the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock there were outstanding immediately prior to
such event.
Section 7. CONSOLIDATION, MERGER, ETC. In case the Corporation shall enter
into any consolidation, merger, combination or other transaction in which the
shares of Common Stock are exchanged for or changed into other stock or
securities, case and/or any other property, then in any such case each share of
Series A Preferred Stock shall at the same time be similarly exchanged or
changed into a amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 100 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is changed or exchanged.
In the event the Corporation shall at any time declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the amount set forth in the preceding sentence with respect to the
exchange or change of shares of Series A Preferred Stock shall be adjusted by
multiplying such amount by a fraction, the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 8. NO REDEMPTION. The shares of Series A Preferred Stock shall not
be redeemable.
Section 9. RANK. The Series A Preferred Stock shall rank, with respect to
the payment of dividends and the distribution of assets, junior to all series of
any other class of the Corporation's Preferred Stock.
Section 10. AMENDMENT. The Certificate shall not be amended in any manner
which would materially alter or change the powers, preferences or special rights
of the Series A Preferred Stock so as to affect them adversely without the
affirmative vote of the holders of at least two-thirds of the outstanding shares
of Series A Preferred Stock, voting together as a single class.
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Section 11. FRACTIONAL SHARES. Series A Preferred Stock may be issued in
fractions of a share which shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Series A Preferred Stock.
V.
The name and mailing address of the incorporator is:
Susan Henderson
Crouch & Hallett, L.L.P.
717 N. Harwood, Suite 1400
Dallas, Texas 75201.
VI.
The number of directors of the Corporation shall be fixed in the manner
provided in the Bylaws of the Corporation, and until changed in the manner
provided in the Bylaws shall be one. The name and mailing address of the person
who is to serve as the sole director until the first annual meeting of
stockholders or until his successor is elected and qualified is as follows:
<TABLE>
<CAPTION>
NAME ADDRESS
- ---------------------- -----------------------------------
<S> <C>
David N. Walthall One Galleria Tower
13355 Noel Road, Suite 1500
Dallas, Texas 75240
</TABLE>
VII.
In furtherance and not in limitation of the powers conferred by statute, the
Board of Directors of the Corporation shall have the power to adopt, amend or
repeal the Bylaws of the Corporation.
VIII.
The Corporation reserves the right to amend, alter, change or repeal any
provision contained in this Certificate of Incorporation, in the manner
prescribed by statute, and all rights conferred upon stockholders herein are
granted subject to this reservation.
IX.
A director of the Corporation shall not, to the fullest extent permitted by
the Delaware General Corporation Law as the same exists or may hereafter be
amended, be liable to the Corporation or its stockholders for monetary damages
for breach of his or her fiduciary duty to the Corporation or its stockholders.
Neither any amendment nor repeal of this Article, nor the adoption of any
provision of the Corporation's Certificate of Incorporation inconsistent with
this Article, shall eliminate or reduce the effect of this Article, in respect
of any manner occurring, or any action or proceeding accruing or arising or
that, but for this Article, would accrue or arise, prior to such amendment,
repeal, or adoption of an inconsistent provision.
X.
No action shall be taken by the stockholders of the Corporation except at an
annual or special meeting of stockholders called in accordance with the Bylaws
and no action shall be taken by the stockholders by written consent in lieu of a
meeting.
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XI.
Except as may otherwise be specifically provided in this Certificate of
Incorporation, no provision of this Certificate of Incorporation is intended by
the Corporation to be construed as limiting, prohibiting, denying or abrogating
any of the general or specific powers or rights conferred under the Delaware
General Corporation Law upon the Corporation, upon its shareholders, bondholders
and security holders, and upon its directors, officers and other corporate
personnel (the "Indemnitee"), including, in particular, the power of the
Corporation to furnish indemnification to directors and officers in the
capacities defined and prescribed by the indemnification as the same are
conferred under the Delaware General Corporation Law. The Corporation shall, to
the fullest extent permitted by the laws of the State of Delaware, including,
but not limited to Section 145 of the General Corporation Law of the State of
Delaware, as the same may be amended and supplemented, indemnify any and all
persons who are serving as officers and directors of the Corporation or who are
serving at the request of the Corporation as a director or officer of another
Corporation, partnership, joint venture, trust or other enterprise, including
service to employee benefit plans (each an "Indemnitee") from and against any
and all acts, omissions, neglect, or breach of duty that the Indemnitee may
commit, omit or suffer while acting in his capacity as a director, officer or
trustee (the "Indemnified Claim"), and the Corporation shall reimburse the
Indemnitee for all reasonable expenses, liabilities or other matters referred to
or covered by said Section incurred in connection with any Indemnifiable Claim
under the Delaware General Corporation Law, based upon any act, omission,
neglect, or breach of duty that such Indemnitee may commit while acting as an
officer, director or trustee following a determination that final disposition of
an Indemnified Claim has occurred, which final determination shall be made by
(i) the Corporation's Board of Directors acting by a majority vote of a quorum
consisting of directors who were not parties to the Indemnifiable Claim, (ii)
independent legal counsel in a written opinion if such a quorum is not
obtainable, or even if obtainable in the event that a quorum of disinterested
directors so directs, (iii) action of the stockholders of the Corporation, or
(iv) a court of competent jurisdiction, provided, that the Corporation shall
reimburse the Indemnitee for all costs and expenses incurred by the Indemnitee
and all such costs and expenses shall be paid by the Corporation in advance of
the final disposition thereof unless (i) the Corporation's board of directors by
a majority vote of a quorum consisting of directors who were not parties to such
action, suit or proceeding, or (ii) if such a quorum is not obtainable or event
if obtainable, a quorum of disinterested directors directs that independent
legal counsel in a written opinion, or (iii) the stockholders of the Corporation
determines that (x) the Indemnitee did not act in good faith and in a manner
that he reasonably believed to be in or not opposed to the best interests of the
Corporation or (y) in the case of any criminal action or proceeding, the
Indemnitee had reasonable cause to believe his conduct was unlawful.
The Indemnitee hereby agrees to repay the Corporation for any costs or
expenses advanced to the Indemnitee if it shall ultimately be determined by a
court of competent jurisdiction in a final, non-appealable adjudication, that
the Indemnitee is not entitled to indemnification under the laws of the State of
Delaware. For purposes of this provision, an "Indemnifiable Claim" generally
shall not include any claim based upon the indemnitee's gaining any improper
personal profit or advantage, any claim which is based upon the Indemnitee's
knowingly fraudulent, deliberately dishonest or willful misconduct, or any claim
based upon (x) the Indemnitee's acting other than in good faith and in a manner
he or she reasonably believed to be in or not opposed to the best interests of
the Corporation and (y), in the case of a criminal action or proceeding, the
Indemnitee's having no reasonable cause to believe his or her conduct was
unlawful.
The indemnification provisions contained in the Delaware General Corporation
Law shall not be deemed exclusive of any other rights to which those indemnified
may be entitled under the Corporation's By-Laws, agreement, resolution of
stockholders or disinterested directors, or otherwise, and shall continue as to
a person who has ceased to be a director or officer, both as to action in his
official capacity and as to action in another capacity while holding such
office, and shall inure to the benefit of the heirs, executors and
administrators of such person.
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XII.
Notwithstanding any other provisions of this Certificate of Incorporation or
any provision of law which might otherwise permit a lesser vote or no vote, but
in addition to any affirmative vote of the holders of the capital stock required
by law or this Certificate of Incorporation, the affirmative vote of the holders
of at least two-thirds of the combined voting power of all of the then
outstanding shares of the Corporation entitled to vote shall be required to
alter, amend or repeal Articles IX, X, and XI or any provision thereof.
XIII.
Section 1. REQUESTS FOR INFORMATION. So long as the Corporation or any of
its subsidiaries holds authority from the Federal Communications Commissions
("FCC") (or any successor thereto) to operate any television or radio
broadcasting station, if the Corporation has reason to believe that the
ownership, or proposed ownership, of shares of capital stock of the Corporation
by any stockholder or any person presenting any shares of capital stock of the
Corporation for transfer into his name (a "proposed Transferee") may be
inconsistent with, or in violation of, any provision of the Federal
Communication Laws (as hereinafter defined) such stockholder or Proposed
Transferee, upon request of the Corporation, shall furnish promptly to the
Corporation such information (including, without limitation, information with
respect to citizenship, other ownership interests and affiliations) as the
Corporation shall reasonably request to determine whether the ownership of, or
the exercise of any rights with respect to, shares of capital stock of the
Corporation by such stockholder or Proposed Transferee is inconsistent with, or
in violation of, the Federal Communication Laws. For purposes of this Article
XI, the term "Federal Communication Laws" shall mean any law of the United
States now or hereafter in effect (and any regulation thereunder) pertaining to
the ownership of, or the exercise of rights of ownership with respect to,
capital stock of corporations holding, directly or indirectly, television or
radio broadcasting station authorizations, including, without limitation, the
Communications Act of 1934, as amended (the "Communications Act"), and
regulations thereunder pertaining to the ownership, or the exercise of the
rights of ownership, of capital stock of corporations holding, directly or
indirectly, television or radio broadcasting station authorizations, by (i)
aliens, as defined in or under the Communications Act, as it may be amended from
time to time, (ii) persons and entities having interests in television or radio
stations, newspapers, national television networks, telephone companies or cable
television systems, or (iii) persons or entities, unilaterally or otherwise,
seeking direct or indirect control of the Corporation, as construed under the
Communications Act, without having obtained any requisite prior Federal
regulatory approval of such control.
Section 2. DENIAL OF RIGHTS; REFUSAL TO TRANSFER. If any stockholder or
Proposed Transferee from whom information is requested should fail to respond to
such request pursuant to Section 1 of this Article or the Corporation shall
conclude that the ownership of , or the exercise of any rights of ownership with
respect to, shares of capital stock of the Corporation by such stockholder or
Proposed Transferee, could result in any inconsistency with or violation of the
Federal Communication Laws, the Corporation may refuse to permit the transfer of
shares of capital stock of the Corporation to such Proposed Transferee or may
suspend those rights of stock ownership the exercise of which would result in
any inconsistency with, or violation of, the Federal Communication Laws
(including the right to vote and the payment of dividends or other
distributions), such refusal of transfer or suspension to remain in effect until
the requested information has been received or until the Corporation has
determined that such transfer, or the exercise of such suspended rights, as the
case may be, is permissible under the Communication Laws; and the Corporation
may exercise any and all appropriate remedies, at law or in equity, in any court
of competent jurisdiction, against any such stockholder or Proposed Transferee,
with a view towards obtaining such information or preventing or curing any
situation which would cause any inconsistency with or violation of any provision
of the Federal Communications Laws.
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The undersigned, being the incorporator named above, for the purpose of
forming a corporation pursuant to the General Corporation Law of the State of
Delaware, does make this certificate, hereby declaring and certifying that this
is her act and deed and the facts herein stated are true, and accordingly has
hereunto set her hand this day of March, 1996.
--------------------------------------
Susan Henderson
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<PAGE>
EXHIBIT D
BY-LAWS OF
HERITAGE MEDIA CORPORATION,
A DELAWARE CORPORATION
<PAGE>
BY-LAWS
OF
HERITAGE MEDIA CORPORATION
(A DELAWARE CORPORATION)
<PAGE>
ARTICLE I
OFFICES
Section 1. REGISTERED OFFICE. The registered office of the Corporation
shall be fixed in the Certificate of Incorporation of the Corporation.
Section 2. OTHER OFFICES. The Corporation may also have offices at such
other place or places, both within and without the State of Delaware, as the
Board of Directors may from time to time determine or the business of the
Corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. TIME AND PLACE OF MEETINGS. All meetings of the stockholders
for the election of directors shall be held at such time and place, either
within or without the State of Delaware, as shall be designated from time to
time by the Board of Directors and stated in the notice of the meeting. Meetings
of stockholders for any other purpose may 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 such date and at such time as shall be designated from time to time by the
Board of Directors and stated in the notice of the meeting, at which meeting the
stockholders shall elect by a plurality vote the number of directors as provided
for herein and shall transact such other business as may properly be brought
before the meeting. As used herein, "Certificate of Incorporation" shall include
any Certificate of Designation of Preferred Stock which may be filed from time
to time by the Corporation.
Section 3. NOTICE OF ANNUAL MEETINGS. Written notice of the annual
meeting, stating the place, date, and hour of the meeting, shall be given to
each stockholder of record entitled to vote at such meeting not less than 10 or
more than 60 days before the date of the meeting.
Section 4. SPECIAL MEETINGS. Special meetings of the stockholders for any
purpose or purposes, unless otherwise prescribed by statute or by the
Certificate of Incorporation, may be called at any time exclusively by the order
of the Board of Directors or by the Chairman of the Board or the Chief Executive
Officer pursuant to a resolution adopted by a majority of the Board of
Directors. Such request shall state the purpose or purposes of the proposed
special meeting. Business transacted at any special meeting of stockholders
shall be limited to the purposes stated in the notice.
Section 5. NOTICE OF SPECIAL MEETINGS. Written notice of a special
meeting, stating the place, date, and hour of the meeting and the purpose or
purposes for which the meeting is called, shall be given to each stockholder of
record entitled to vote at such meeting not less than 10 or more than 60 days
before the date of the meeting.
Section 6. QUORUM. Except as otherwise provided by statute or the
Certificate of Incorporation, the holders of stock having a majority of the
voting power of the stock entitled to be voted thereat, present in person or
represented by proxy, shall constitute a quorum for the transaction of business
at all meetings of the stockholders. If, however, such quorum shall not be
present or represented at any meeting of the stockholders, the stockholders
entitled to vote thereat, present in person or represented by proxy, shall have
power to adjourn the meeting from time to time without notice (other than
announcement at the meeting at which the adjournment is taken of the time and
place of the adjourned 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 notified. If the adjournment is for more than 30 days, or if after
the adjournment a new record date is fixed for the adjourned meeting, notice of
the adjourned meeting shall be given to each stockholder of record entitled to
vote at the meeting.
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Section 7. ORGANIZATION. At each meeting of the stockholders, the Chairman
of the Board, Chief Executive Officer or the President, determined as provided
in Article V of these By-Laws, or if those officers shall be absent therefrom,
another officer of the Corporation chosen as chairman present in person or by
proxy and entitled to vote thereat, or if all the officers of the Corporation
shall be absent therefrom, a stockholder holding of record shares of stock of
the Corporation so chosen, shall act as chairman of the meeting and preside
thereat. The Secretary, or if he shall be absent from such meeting or shall be
required pursuant to the provisions of this Section 7 to act as chairman of such
meeting, the person (who shall be an Assistant Secretary, if an Assistant
Secretary shall be present thereat) whom the chairman of such meeting shall
appoint, shall act as secretary of such meeting and keep the minutes thereof.
Section 8. VOTING. Except as otherwise provided in the Certificate of
Incorporation, each stockholder shall, at each meeting of the stockholders, be
entitled to one vote in person or by proxy for each share of stock of the
Corporation held by him and registered in his name on the books of the
Corporation on the date fixed pursuant to the provisions of Section 5 of Article
VII of these By-Laws as the record date for the determination of stockholders
who shall be entitled to notice of and to vote at such meeting. Shares of its
own stock belonging to the Corporation or to another corporation, if a majority
of the shares entitled to vote in the election of directors of such other
corporation is held directly or indirectly by the Corporation, shall not be
entitled to vote. Any vote by a stockholder may be given at any meeting of the
stockholders by the stockholder entitled thereto, in person or by one or more
agents authorized by written proxy signed by the person and filed with the
secretary of the Corporation. A proxy shall be deemed signed if the
stockholder's name is placed on the proxy (whether by manual signature,
typewriting, telegraphic transmission, telefacsimile or otherwise). No proxy
shall be voted or acted upon after three years from its date, unless said proxy
shall provide for a longer period. Each proxy shall be revocable unless
expressly provided therein to be irrevocable and unless otherwise made
irrevocable by law. At all meetings of the stockholders all matters, except
where other provision is made by law, the Certificate of Incorporation, or these
By-Laws, shall be decided by the vote of a majority of the votes cast by the
stockholders present in person or by proxy and entitled to vote thereat, a
quorum being present. Unless demanded by a stockholder of the Corporation
present in person or by proxy at any meeting of the stockholders and entitled to
vote thereat, or so directed by the chairman of the meeting, the vote thereat on
any question other than the election or removal of directors need not be by
written ballot. Upon a demand of any such stockholder for a vote by written
ballot on any question or at the direction of such chairman that a vote by
written ballot be taken on any question, such vote shall be taken by written
ballot. On a vote by written ballot, each ballot shall be signed by the
stockholder voting, or by his proxy, if there be such proxy, and shall state the
number of shares voted.
Section 9. LIST OF STOCKHOLDERS. It shall be the duty of the Secretary or
other officer of the Corporation who shall have charge of its stock ledger,
either directly or through another officer of the Corporation designated by him
or through a transfer agent appointed by the Board of Directors, to prepare and
make, at least 10 days before every meeting of the stockholders, a complete list
of the stockholders entitled to vote thereat, arranged in alphabetical order,
and showing the address of each stockholder and the number of shares registered
in the name of each stockholder. Such list shall be open to the examination of
any stockholder, for any purpose germane to the meeting, during ordinary
business hours, for a period of at least 10 days before said meeting, either at
a place within the city where said meeting is to be held, which place shall be
specified in the notice of said meeting, or, if not so specified, at the place
where said meeting is to be held. The list shall also be produced and kept at
the time and place of said meeting during the whole time thereof, and may be
inspected by any stockholder of record who shall be present thereat. The stock
ledger shall be the only evidence as to who are the stockholders entitled to
examine the stock ledger, such list or the books of the Corporation, or to vote
in person or by proxy at any meeting of stockholders.
Section 10. INSPECTORS OF VOTES. At each meeting of the stockholders, the
chairman of such meeting may appoint two Inspectors of Votes to act thereat,
unless the Board of Directors shall have
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theretofore made such appointments. Each Inspector of Votes so appointed shall
first subscribe an oath or affirmation faithfully to execute the duties of an
Inspector of Votes at such meeting with strict impartiality and according to the
best of his ability. Such Inspectors of Votes, if any, shall take charge of the
ballots, if any, at such meeting and, after the balloting thereat on any
question, shall count the ballots cast thereon and shall make a report in
writing to the secretary of such meeting of the results thereof. An Inspector of
Votes need not be a stockholder of the Corporation, and any officer of the
Corporation may be an Inspector of Votes on any question other than a vote for
or against his election to any position with the Corporation or on any other
question in which he may be directly interested.
Section 11. ACTIONS WITHOUT A MEETING PROHIBITED. Any action required or
permitted to be taken by the stockholders of the Corporation must be taken at an
annual or special meeting of the stockholders of the Corporation and may not be
taken by any consent in writing, unless otherwise provided by the Certificate of
Incorporation.
ARTICLE III
BOARD OF DIRECTORS
Section 1. POWERS. The business and affairs of the Corporation shall be
managed by its Board of Directors, which shall have and may exercise all such
powers of the Corporation and do all such lawful acts and things as are not by
statute, the Certificate of Incorporation, or these By-Laws directed or required
to be exercised or done by the stockholders.
Section 2. NUMBER, QUALIFICATION, AND TERM OF OFFICE. The number of
directors which shall constitute the whole Board of Directors shall not be less
than one (1) or more than fifteen (15). Within the limits above specified, the
number of directors which shall constitute the whole Board of Directors shall be
determined from time to time exclusively by the Board of Directors pursuant to a
resolution adopted by at least a majority of the directors. Unless otherwise
fixed by resolution of the Board of Directors, the number of directors shall be
the number stated in the Certificate of Incorporation. The number of directors
to be elected at the annual meeting of the stockholders and the term of office
of each director so elected shall be as provided in the Certificate of
Incorporation of the Corporation. Directors shall be elected by a plurality of
the votes of the shares present in person or represented by proxy and entitled
to vote on the election of directors at any annual or special meeting of
stockholders.
Section 3. RESIGNATIONS. Any director may resign at any time by giving
written notice of his resignation to the Corporation. Any such resignation shall
take effect at the time specified therein, or if the time when it shall become
effective shall not be specified therein, then it shall take effect immediately
upon its receipt by the Secretary. Unless otherwise specified therein, the
acceptance of such resignation shall not be necessary to make it effective.
Section 4. REMOVAL OF DIRECTORS. Any director may be removed, either with
or without cause, at any time, by the affirmative vote of a majority in voting
interest of the stockholders of record of the Corporation entitled to vote,
given at an annual meeting or at a special meeting of the stockholders called
for that purpose. The vacancy in the Board of Directors caused by any such
removal shall be filled by the stockholders at such meeting or, if not so
filled, by the Board of Directors as provided in Section 5 of this Article III
and as provided in the Certificate of Incorporation of the Corporation.
Section 5. VACANCIES. Subject to the rights of the holders of any series
of Preferred Stock and unless the Board of Directors otherwise determines, newly
created directorships resulting from any increase in the authorized number of
directors or any vacancies of the Board of Directors resulting from death,
resignation, retirement, disqualification, removal from office or other cause
shall be filled only by a majority vote of the directors then in office, though
less than a quorum, and directors so chosen shall hold office for a term
expiring at the next annual meeting of stockholders and until such director's
successor shall have been duly elected and qualified. No decrease in the numbers
of authorized directors constituting the entire Board of Directors shall shorten
the term of any incumbent director.
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<PAGE>
MEETINGS OF THE BOARD OF DIRECTORS
Section 6. PLACE OF MEETINGS. The Board of Directors of the Corporation
may hold meetings, both regular and special, either within or without the State
of Delaware.
Section 7. ANNUAL MEETINGS. The first meeting of each newly elected Board
of Directors shall be held immediately following the annual meeting of
stockholders, and no notice of such meeting to the newly elected directors shall
be necessary in order legally to constitute the meeting, provided a quorum shall
be present. In the event such meeting is not held immediately following the
annual meeting of stockholders, the meeting may be held at such time and place
as shall be specified in a notice given as hereinafter provided for special
meetings of the Board of Directors, or as shall be specified in a written waiver
signed by all of the directors.
Section 8. REGULAR MEETINGS. Regular meetings of the Board of Directors
may be held without notice at such time and at such place as shall from time to
time be determined by the Board of Directors.
Section 9. SPECIAL MEETINGS; NOTICE. Special meetings of the Board of
Directors may be called by the Chairman of the Board, the President, or the
Secretary on 24 hours' notice to each director, either personally or by
telephone or by mail, telegraph, telex, cable, wireless, or other form of
recorded communication; special meetings shall be called by the Chairman of the
Board, the Chief Executive Officer, the President, or the Secretary in like
manner and on like notice on the written request of two directors. Notice of any
such meeting need not be given to any director, however, if waived by him in
writing or by telegraph, telex, cable, wireless, or other form of recorded
communication, or if he shall be present at such meeting.
Section 10. QUORUM AND MANNER OF ACTING. At all meetings of the Board of
Directors, a majority of the directors at the time in office shall constitute a
quorum for the transaction of business, and the act of a majority of the
directors present at any meeting at which a quorum is present shall be the act
of the Board of Directors, except as may be otherwise specifically provided by
statute or by the Certificate of Incorporation. If a quorum shall not be present
at any meeting of the Board of Directors, the directors present thereat may
adjourn the meeting from time to time, without notice other than announcement at
the meeting, until a quorum shall be present.
Section 11. REMUNERATION. The Board of Directors may at any time and from
time to time by resolution provide that a specified sum shall be paid to any
director of the Corporation, either as his annual remuneration as such director
or member of any committee of the Board of Directors or as remuneration for his
attendance at each meeting of the Board of Directors or any such committee. The
Board of Directors may also likewise provide that the Corporation shall
reimburse each director for any expenses paid by him on account of his
attendance at any meeting. Nothing in this Section 11 shall be construed to
preclude any director from serving the Corporation in any other capacity and
receiving remuneration therefor.
COMMITTEES OF DIRECTORS
Section 12. EXECUTIVE COMMITTEE; HOW CONSTITUTED AND POWERS. The Board of
Directors may in its discretion, by resolution passed by a majority of the whole
Board of Directors, designate an Executive Committee consisting of one or more
of the directors of the Corporation. Subject to the provisions of Section 141 of
the General Corporation Law of the State of Delaware, the Certificate of
Incorporation, and these By-Laws, the Executive Committee shall have and may
exercise, when the Board of Directors is not in session, all the powers and
authority of the Board of Directors in the management of the business and
affairs of the Corporation, and shall have the power to authorize the seal of
the Corporation to be affixed to all papers which may require it; but the
Executive Committee shall not have the power to fill vacancies in the Board of
Directors, the Executive Committee, or any other committee of directors or to
elect or approve officers of the Corporation. The Executive Committee shall have
the power and authority to authorize the issuance of common stock and grant and
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authorize options and other rights with respect to such issuance. The Board of
Directors shall have the power at any time, by resolution passed by a majority
of the whole Board of Directors, to change the membership of the Executive
Committee, to fill all vacancies in it, or to dissolve it, either with or
without cause.
Section 13. ORGANIZATION. The Chairman of the Executive Committee, to be
selected by the Board of Directors, shall act as chairman at all meetings of the
Executive Committee and the Secretary shall act as secretary thereof. In case of
the absence from any meeting of the Executive Committee of the Chairman of the
Executive Committee or the Secretary, the Executive Committee may appoint a
chairman or secretary, as the case may be, of the meeting.
Section 14. MEETINGS. Regular meetings of the Executive Committee, of
which no notice shall be necessary, may be held on such days and at such places,
within or without the State of Delaware, as shall be fixed by resolution adopted
by a majority of the Executive Committee and communicated in writing to all its
members. Special meetings of the Executive Committee shall be held whenever
called by the Chairman of the Executive Committee or a majority of the members
of the Executive Committee then in office. Notice of each special meeting of the
Executive Committee shall be given by mail, telegraph, telex, cable, wireless,
or other form of recorded communication or be delivered personally or by
telephone to each member of the Executive Committee not later than the day
before the day on which such meeting is to be held. Notice of any such meeting
need not be given to any member of the Executive Committee, however, if waived
by him in writing or by telegraph, telex, cable, wireless, or other form of
recorded communication, or if he shall be present at such meeting; and any
meeting of the Executive Committee shall be a legal meeting without any notice
thereof having been given, if all the members of the Executive Committee shall
be present thereat. Subject to the provisions of this Article III, the Executive
Committee, by resolution adopted by a majority of the whole Executive Committee,
shall fix its own rules of procedure.
Section 15. QUORUM AND MANNER OF ACTING. A majority of the Executive
Committee shall constitute a quorum for the transaction of business, and the act
of a majority of those present at a meeting thereof at which a quorum is present
shall be the act of the Executive Committee.
Section 16. OTHER COMMITTEES. The Board of Directors may, by resolution or
resolutions passed by a majority of the whole Board of Directors, designate one
or more other committees consisting of one or more directors of the Corporation,
which, to the extent provided in said resolution or resolutions, shall have and
may exercise, subject to the provisions of Section 141 of the General
Corporation Law of the State of Delaware, the Certificate of Incorporation, and
these By-Laws, the powers and authority of the Board of Directors in the
management of the business and affairs of the Corporation, and shall have the
power to authorize the seal of the Corporation to be affixed to all papers which
may require it; but no such committee shall have the power to fill vacancies in
the Board of Directors, the Executive Committee, or any other committee or in
their respective membership, to appoint or remove officers of the Corporation,
or to authorize the issuance of shares of the capital stock of the Corporation,
except that such a committee may, to the extent provided in said resolutions,
grant and authorize options and other rights with respect to the common stock of
the Corporation pursuant to and in accordance with any plan approved by the
Board of Directors. Such committee or committees shall have such name or names
as may be determined from time to time by resolution adopted by the Board of
Directors. A majority of all the members of any such committee may determine its
action and fix the time and place of its meetings and specify what notice
thereof, if any, shall be given, unless the Board of Directors shall otherwise
provide. The Board of Directors shall have power to change the members of any
such committee at any time to fill vacancies, and to discharge any such
committee, either with or without cause, at any time.
Section 17. ALTERNATE MEMBERS OF COMMITTEES. The Board of Directors may
designate one or more directors as alternate members of the Executive Committee
or any other committee, who may replace any absent or disqualified member at any
meeting of the committee, or if none be so appointed,
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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 of Directors to act at the meeting in the place of
any such absent or disqualified member.
Section 18. MINUTES OF COMMITTEES. Each committee shall keep regular
minutes of its meetings and proceedings and report the same to the Board of
Directors at the next meeting thereof.
GENERAL
Section 19. ACTIONS WITHOUT A MEETING. Unless otherwise restricted by the
Certificate of Incorporation or these By-Laws, any action required or permitted
to be taken at any meeting of the Board of Directors or of any committee thereof
may be taken without a meeting, if all members of the Board of Directors or
committee, as the case may be, consent thereto in writing and the writing or
writings are filed with the minutes of proceedings of the Board of Directors or
the committee.
Section 20. PRESENCE AT MEETINGS BY MEANS OF COMMUNICATIONS
EQUIPMENT. Members of the Board of Directors, or of any committee designated by
the Board of Directors, may participate in a meeting of the Board of Directors
or such committee by means of conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other, and participation in a meeting conducted pursuant to this Section 20
shall constitute presence in person at such meeting.
ARTICLE IV
NOTICES
Section 1. TYPE OF NOTICE. Whenever, under the provisions of any
applicable statute, the Certificate of Incorporation, or these By-Laws, notice
is required to be given to any director or stockholder, it shall not be
construed to mean personal notice, but such notice may be given in writing, in
person or by mail, addressed to such director or stockholder, at his address as
it appears on the records of the Corporation, with postage thereon prepaid, and
such notice shall be deemed to be given at the time when the same shall be
deposited in the United States mail. Notice to directors may also be given in
any manner permitted by Article III hereof and shall be deemed to be given at
the time when first transmitted by the method of communication so permitted.
Section 2. WAIVER OF NOTICE. Whenever any notice is required to be given
under the provisions of any applicable statute, the Certificate of
Incorporation, or 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, and transmission of a waiver
of notice by a director or stockholder by mail, telegraph, telex, cable,
wireless, or other form of recorded communication may constitute such a waiver.
ARTICLE V
OFFICERS
Section 1. ELECTED AND APPOINTED OFFICERS. The elected officers of the
Corporation shall be a President, one or more Vice Presidents, with or without
such descriptive titles as the Board of Directors shall deem appropriate, a
Secretary, and a Treasurer, and, if the Board of Directors so elects, a Chairman
of the Board (who shall be a director) and a Controller. The Board of Directors
or the Executive Committee of the Board of Directors by resolution also may
appoint one or more Assistant Vice Presidents, Assistant Treasurers, Assistant
Secretaries, Assistant Controllers, and such other officers and agents as from
time to time may appear to be necessary or advisable in the conduct of the
affairs of the Corporation.
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Section 2. TIME OF ELECTION OR APPOINTMENT. The Board of Directors at its
annual meeting shall elect or appoint, as the case may be, the officers to fill
the positions designated in or pursuant to Section 1 of this Article V. Officers
of the Corporation may also be elected or appointed, as the case may be, at any
other time.
Section 3. SALARIES OF ELECTED OFFICERS. The salaries of all elected
officers of the Corporation shall be fixed by the Board of Directors.
Section 4. TERM. Each officer of the Corporation shall hold his office
until his successor is duly elected or appointed and qualified or until his
earlier resignation or removal. Any officer may resign at any time upon written
notice to the Corporation. Any officer elected or appointed by the Board of
Directors or the Executive Committee may be removed at any time by the
affirmative vote of a majority of the whole Board of Directors. Any vacancy
occurring in any office of the Corporation by death, resignation, removal, or
otherwise may be filled by the Board of Directors or the appropriate committee
thereof.
Section 5. DUTIES OF THE CHAIRMAN OF THE BOARD. The Chairman of the Board,
if one be elected, shall preside at all meetings of the Board of Directors and
perform such other duties as may be prescribed from time to time by the Board of
Directors, or by the ByLaws. Unless otherwise determined by the Board of
Directors, he shall preside at all meetings of the stockholders, directors and
the Executive Committee meetings, if any. He may sign, with the Secretary or any
other proper officer of the Corporation thereunto authorized by the Board of
Directors, certificates for shares of the Corporation, any deeds, mortgages,
bonds, contracts, or other instruments which the Board of Directors have
authorized to be executed, except in cases where the signing and execution
thereof shall be expressly delegated by the Board of Directors or by these
By-Laws to some other officer or agent of the Corporation or shall be required
by law to be otherwise signed or executed. He shall have the general powers and
duties of management usually vested in the office of chairman of the board of a
corporation and in general shall perform all such other duties incident to the
office of Chairman of the Board and such other duties as may from time to time
be prescribed by the Board of Directors of these By-Laws.
Section 6. DUTIES OF THE PRESIDENT. The President shall be the chief
executive officer of the Corporation and shall in general supervise and control
all of the business and affairs of the Corporation. Unless otherwise determined
by the Board of Directors, he shall preside, in the absence of the Chairman, at
all meetings of the stockholders, directors and the Executive Committee
meetings, if any. He may sign, with the Secretary or any other proper officer of
the Corporation thereunto authorized by the Board of Directors, certificates for
shares of the Corporation, any deeds, mortgages, bonds, contracts, or other
instruments which the Board of Directors has authorized to be executed, except
in cases where the signing and execution thereof shall be expressly delegated by
the Board of Directors of by these Bylaws to some other officer or agent of the
Corporation or shall be required by law to be otherwise signed or executed. He
shall have the general powers and duties of management usually vested in the
office of president of a Corporation and in general shall perform all such other
duties incident to the office of President and such other duties as may from
time to time be prescribed by the Board of Directors or these Bylaws.
Section 7. DUTIES OF VICE PRESIDENTS. In the absence of the President or
in the event of his inability or refusal to act, the Vice President (or in the
event there be more than one Vice President, the Vice Presidents in the order
designated, or in the absence of any designation, then in the order of their
election) shall perform the duties of the President and, when so acting, shall
have all the powers of and be subject to all the restrictions upon the
President. The Vice Presidents shall perform such other duties and have such
other powers as the Board of Directors or the President may from time to time
prescribe.
Section 8. DUTIES OF ASSISTANT VICE PRESIDENTS. In the absence of a Vice
President or in the event of his inability or refusal to act, the Assistant Vice
President (or in the event there shall be more than one, the Assistant Vice
Presidents in the order designated by the Board of Directors, or in the absence
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of any designation, then in the order of their appointment) shall perform the
duties and exercise the powers of that Vice President, and shall perform such
other duties and have such other powers as the Board of Directors, the
President, or the Vice President under whose supervision he is appointed may
from time to time prescribe.
Section 9. DUTIES OF THE SECRETARY. The Secretary shall attend all
meetings of the Board of Directors and all meetings of the stockholders and
record all the proceedings of the meetings of the Corporation and of the Board
of Directors in a book to be kept for that purpose and shall perform like duties
for the Executive Committee or other standing committees when required. He shall
give, or cause to be given, notice of all meetings of the stockholders and
special meetings of the Board of Directors, and shall perform such other duties
as may be prescribed by the Board of Directors or the President, under whose
supervision he shall be. 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 of
Directors may give general authority to any other officer to affix the seal of
the Corporation and to attest the affixing by his signature. The Secretary shall
keep and account for all books, documents, papers, and records of the
Corporation, except those for which some other officer or agent is properly
accountable. He shall have authority to sign stock certificates and shall
generally perform all the duties usually appertaining to the office of the
secretary of a corporation.
Section 10. DUTIES OF ASSISTANT SECRETARIES. In the absence of the
Secretary or in the event of his inability or refusal to act, the Assistant
Secretary (or, if there shall be more than one, the Assistant Secretaries in the
order designated by the Board of Directors, or in the absence of any
designation, then in the order of their appointment) shall perform the duties
and exercise the powers of the Secretary and shall perform such other duties and
have such other powers as the Board of Directors, the President, or the
Secretary may from time to time prescribe.
Section 11. DUTIES OF THE TREASURER. The Treasurer shall have the custody
of the corporate funds and securities and shall keep full and accurate accounts
of receipts and disbursements in books belonging to the Corporation and shall
deposit all moneys and other valuable effects in the name and to the credit of
the Corporation in such depositories as may be designated by the Board of
Directors. He shall disburse the funds of the Corporation as may be ordered by
the Board of Directors, taking proper vouchers for such disbursements, and shall
render to the President and the Board of Directors, at its regular meetings or
when the Board of Directors so requires, an account of all his transactions as
Treasurer and of the financial condition of the Corporation. If required by the
Board of Directors, he shall give the Corporation a bond (which shall be renewed
every six years) in such sum and with such surety or sureties as shall be
satisfactory to the Board of Directors for the faithful performance of the
duties of his office and for the restoration to the Corporation, in case of his
death, resignation, retirement, or removal from office, of all books, papers,
vouchers, money, and other property of whatever kind in his possession or under
his control belonging to the Corporation. The Treasurer shall be under the
supervision of the Vice President in charge of finance, if one is so designated,
and he shall perform such other duties as may be prescribed by the Board of
Directors, the President, or any such Vice President in charge of finance.
Section 12. DUTIES OF ASSISTANT TREASURERS. The Assistant Treasurer or
Assistant Treasurers shall assist the Treasurer, and in the absence of the
Treasurer or in the event of his inability or refusal to act, the Assistant
Treasurer (or in the event there shall be more than one, the Assistant
Treasurers in the order designated by the Board of Directors, or in the absence
of any designation, then in the order of their appointment) shall perform the
duties and exercise the powers of the Treasurer and shall perform such other
duties and have such other powers as the Board of Directors, the President, or
the Treasurer may from time to time prescribe.
Section 13. DUTIES OF THE CONTROLLER. The Controller, if one is appointed,
shall have supervision of the accounting practices of the Corporation and shall
prescribe the duties and powers of any other
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accounting personnel of the Corporation. He shall cause to be maintained an
adequate system of financial control through a program of budgets and
interpretive reports. He shall initiate and enforce measures and procedures
whereby the business of the Corporation shall be conducted with the maximum
efficiency and economy. If required, he shall prepare a monthly report covering
the operating results of the Corporation. The Controller shall be under the
supervision of the Vice President in charge of finance, if one is so designated,
and he shall perform such other duties as may be prescribed by the Board of
Directors, the President, or any such Vice President in charge of finance.
Section 14. DUTIES OF ASSISTANT CONTROLLERS. The Assistant Controller or
Assistant Controllers shall assist the Controller, and in the absence of the
Controller or in the event of his inability or refusal to act, the Assistant
Controller (or, if there shall be more than one, the Assistant Controllers in
the order designated by the Board of Directors, or in the absence of any
designation, then in the order of their appointment) shall perform the duties
and exercise the powers of the Controller and perform such other duties and have
such other powers as the Board of Directors, the President, or the Controller
may from time to time prescribe.
ARTICLE VI
INDEMNIFICATION
Section 1. ACTIONS OTHER THAN BY OR IN THE RIGHT OF THE CORPORATION. The
Corporation shall indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending, or contemplated action, suit, or
proceeding, whether civil, criminal, administrative, or investigative (other
than an action by or in the right of the Corporation), by reason of the fact
that he is or was a director or officer of the Corporation, or is or was serving
at the request of the Corporation as a director or officer of another
corporation, partnership, joint venture, trust, or other enterprise, including
service to employee benefit plans (all of such persons being hereafter referred
to in this Article as a "Corporate Functionary"), against expenses (including
attorneys' fees), judgments, fines, and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit, or proceeding;
provided, however, a Corporate Functionary shall not be indemnified for any
claim based upon the Corporate Functionary's gaining any improper personal
profit or advantage, any claim which is based upon the Corporate Functionary's
knowingly fraudulent, deliberately dishonest or willful misconduct, or any claim
based upon (x) the Corporate Functionary's acting other than in good faith and
in a manner he or she reasonably believed to be in or not opposed to the best
interests of the Corporation and (y), in the case of a criminal action or
proceeding, the Corporate Functionary's having no reasonable cause to believe
his/her conduct was unlawful. The termination of any action, suit, or proceeding
by judgment, order, settlement, or conviction, or upon a plea of NOLO CONTENDERE
or its equivalent, shall not, of itself, create a presumption that the person
did not act in good faith and in a manner which he reasonably believed to be in
or not opposed to the best interests of the Corporation or, with respect to any
criminal action or proceeding, that he had reasonable cause to believe that his
conduct was unlawful.
Section 2. ACTIONS BY OR IN THE RIGHT OF THE CORPORATION. The Corporation
shall indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending, or contemplated action or suit by or in the
right of the Corporation to procure a judgment in its favor by reason of the
fact that he is or was a Corporate Functionary against expenses (including
attorneys' fees) actually and reasonably incurred by him in connection with the
defense or settlement of such action or suit, if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
the Corporation, except that no indemnification shall be made in respect of any
claim, issue, or matter as to which such person shall have been adjudged to be
liable to the Corporation, unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Court of Chancery or such other court
shall deem proper.
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Section 3. DETERMINATION OF RIGHT TO INDEMNIFICATION. Any indemnification
under Sections 1 or 2 of this Article VI (unless ordered by a court) shall be
made by the Corporation only as authorized in the specific case upon a
determination that indemnification of the Corporate Functionary is proper in the
circumstances because he has met the applicable standard of conduct set forth in
Sections 1 or 2 of this Article VI. Such determination shall be made (i) by the
Board of Directors by a majority vote of a quorum consisting of directors who
were not parties to such action, suit, or proceeding, or (ii) if such a quorum
is not obtainable, or, even if obtainable if a quorum of disinterested directors
so directs, by independent legal counsel in a written opinion, or (iii) by the
stockholders.
Section 4. RIGHT TO INDEMNIFICATION. Notwithstanding the other provisions
of this Article VI, to the extent that a Corporate Functionary has been
successful on the merits or otherwise in defense of any action, suit, or
proceeding referred to in Sections 1 or 2 of this Article VI (including the
dismissal of a proceeding without prejudice or the settlement of a proceeding
without admission of liability), or in defense of any claim, issue, or matter
therein, he shall be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection therewith.
Section 5. PREPAID EXPENSES. Expenses incurred in defending a civil or
criminal action, suit, or proceeding shall be paid by the Corporation in advance
of the final disposition of such action, suit, or proceeding, upon receipt of an
undertaking by or on behalf of the Corporate Functionary to repay such amount if
it shall ultimately be determined he is not entitled to be indemnified by the
Corporation as authorized in this Article VI.
Section 6. RIGHT TO INDEMNIFICATION UPON APPLICATION; PROCEDURE UPON
APPLICATION. Any indemnification under Sections 2, 3 and 4, or any advance
under Section 5, of this Article VI shall be made promptly upon, and in any
event within 60 days after, the written request of the Corporate Functionary,
unless with respect to applications under Sections 2, 3 or 5 of this Article VI,
a determination is reasonably and promptly made by the Board of Directors by
majority vote of a quorum consisting of disinterested directors that such
Corporate Functionary acted in a manner set forth in such Sections as to justify
the Corporation in not indemnifying or making an advance of expenses to the
Corporate Functionary. If no quorum of disinterested directors is obtainable,
the Board of Directors shall promptly direct that independent legal counsel
shall decide whether the Corporate Functionary acted in a manner set forth in
such Sections as to justify the Corporation's not indemnifying or making an
advance of expenses to the Corporate Functionary. The right to indemnification
or advance of expenses granted by this Article VI shall be enforceable by the
Corporate Functionary in any court of competent jurisdiction if the Board of
Directors or independent legal counsel denies his claim, in whole or in part, or
if no disposition of such claim is made within 60 days. The expenses of the
Corporate Functionary incurred in connection with successfully establishing his
right to indemnification, in whole or in part, in any such proceeding shall also
be indemnified by the Corporation.
Section 7. INDEMNIFICATION OF OTHERS. The Corporation may indemnify, to
the maximum extent and in the manner permitted by applicable law as the same now
exists or may hereafter be amended, any person (other than directors and
officers) against expenses (including attorneys' fees), judgments, fines, and
amounts paid in settlement actually and reasonably incurred in connection with
any threatened, pending or completed action, suit, or proceeding, in which such
person was or is a party or is threatened to be made a party by reason of the
fact that such person is or was an employee or agent of the Corporation. For
purposes of this Section 7, an "employee" or "agent" of the Corporation (other
than a director or officer) shall mean any person (i) who is or was an employee
or agent of the corporation, (ii) who is or was serving at the request of the
Corporation as an employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, or (iii) who was an employee or agent of a
corporation which was a predecessor corporation of the corporation or of another
enterprise at the request of such predecessor corporation.
Section 8. OTHER RIGHTS AND REMEDIES. The indemnification and advancement
of expenses or provided by or granted pursuant to this Article VI shall not be
deemed exclusive of any other rights to which any person seeking indemnification
and advancement of expenses or may be entitled under any
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by-law, agreement, vote of stockholders or disinterested directors, or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office, and shall, unless otherwise provided
when authorized or ratified, continue as to a person who has ceased to be a
Corporate Functionary and shall inure to the benefit of the heirs, executors,
and administrators of such a person. Any repeal or modification of these by-laws
or relevant provisions of the Delaware General Corporation Law and other
applicable law, if any, shall not affect any then existing rights of a Corporate
Functionary to indemnification or advancement of expenses.
Section 9. INSURANCE. Upon resolution passed by the Board of Directors,
the Corporation may purchase and maintain insurance on behalf of any person who
is or was a director, officer, employee, or
agent of the Corporation, or is or was serving at the request of the Corporation
as a director, officer, employee, or agent of another corporation, partner-ship,
joint venture, trust, or other enterprise against any liability asserted against
him and incurred by him in any such capacity, or arising out of his status as
such, whether or not the Corporation would have the power to indemnify him
against such liability under the provisions of this Article VI.
Section 10. MERGERS. For purposes of this Article VI, references to "the
Corporation" shall include, in addition to the resulting or surviving
corporation, constituent corporations (including any constituent of a
constituent) absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power and authority to indemnify its
directors, officers, employees, or agents, so that any person who is or was a
director, officer, employee, or agent of such constituent corporation or is or
was serving at the request of such constituent corporation as a director,
officer, employee, or agent of another corporation, partnership, joint venture,
trust, or other enterprise shall stand in the same position under the provisions
of this Article VI with respect to the resulting or surviving corporation as he
would have with respect to such constituent corporation if its separate
existence had continued.
Section 11. SAVINGS PROVISION. If this Article VI or any portion hereof
shall be invalidated on any ground by a court of competent jurisdiction, the
Corporation shall nevertheless indemnify each Corporate Functionary as to
expenses (including attorneys' fees), judgments, fines, and amounts paid in
settlement with respect to any action, suit, proceeding, or investigation,
whether civil, criminal, or
administrative, including a grand jury proceeding or action or suit brought by
or in the right of the Corporation, to the full extent permitted by any
applicable portion of this Article VI that shall not have been invalidated.
ARTICLE VII
CERTIFICATES REPRESENTING STOCK
Section 1. RIGHT TO 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 Chairman of the Board, the President, or a Vice President
and by the Secretary or an Assistant Secretary of the Corporation, certifying
the number of shares owned by him in the Corporation. If the Corporation shall
be authorized to issue more than one class of stock or more than one series of
any class, the powers, designations, preferences, and relative, participating,
optional, or other special rights of each class of stock or series thereof and
the qualifications, limitations, or restrictions of such preferences or rights
shall be set forth in full or summarized on the face or back of the certificate
which the Corporation shall issue to represent such class or series of stock;
provided, that, except as otherwise provided in Section 202 of the General
Corporation Law of the State of Delaware, in lieu of the foregoing requirements,
there may be set forth on the face or back of the certificate which the
Corporation shall issue to represent such class or series of stock a statement
that the Corporation will furnish without charge to each stockholder who so
requests the powers, designations, preferences, and relative, participating,
optional, or other special rights of each class of stock or series thereof and
the qualifications, limitations, or restrictions of such preferences or rights.
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Section 2. FACSIMILE SIGNATURES. Any of or all the signatures on the
certificate may be facsimile. In case any officer, transfer agent, or registrar
who has signed or whose facsimile signature has been placed upon a certificate
shall have ceased to be such officer, transfer agent, or registrar before such
certificate is issued, it may be issued by the Corporation with the same effect
as if he were such officer, transfer agent, or registrar at the date of issue.
Section 3. NEW CERTIFICATES. The Board of Directors may direct a new
certificate or certificates to be issued in place of any certificate or
certificates theretofore issued by the Corporation and alleged to have been
lost, stolen, or destroyed, upon the making of an affidavit of that 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 of
Directors may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost, stolen, or destroyed certificate or
certificates, or his legal representative, to advertise the same in such manner
as it shall require or 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
or the issuance of such new certificate.
Section 4. TRANSFERS. Upon surrender to the Corporation or the transfer
agent of the Corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignation, or authority to
transfer, it shall be the duty of the Corporation, subject to any proper
restrictions on transfer, to issue a new certificate to the person entitled
thereto, cancel the old certificate, and record the transaction upon its books.
Section 5. RECORD DATE. The Board of Directors may fix in advance a date,
not preceding the date on which the resolution fixing the record date is
adopted, and
(i) not more than 60 days nor less than 10 days preceding the date of
any meeting of stockholders, as a record date for the determination of the
stockholders entitled to notice of, and to vote at, any such meeting and any
adjournment thereof,
(ii) not more than 10 days after the date on which the resolution fixing
the record date is adopted, as a record date in connection with obtaining a
consent of the stockholders in writing to corporate action without a
meeting, or
(iii) not more than 60 days before the date for payment of any dividend
or distribution, 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,
or the date on which any other lawful action shall be taken, as the record
date for determining the stockholders entitled to receive payment of any
such dividend or distribution, or to receive any such allotment of rights,
or to exercise the rights in respect of any such change, conversion or
exchange of capital stock or other lawful action of the corporation,
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, any such meeting and any adjournment thereof (provided, however,
that the Board of Directors may fix a new record date for an adjourned meeting),
or to give such consent, or to receive payment of such dividend or distribution,
or to receive such allotment of rights, or to exercise such rights, as the case
may be, notwithstanding any transfer of any stock on the books of the
corporation after any such record date fixed as aforesaid.
Section 6. REGISTERED STOCKHOLDERS. The Corporation shall be entitled to
recognize the exclusive right of a person registered on its books as the owner
of shares to receive dividends, and to vote as such owner, and to hold liable
for calls and assessments a person registered on its books as the owner of
shares, and shall not be bound to recognize any equitable or other claim to or
interest in such share or shares on the part of any other person, whether or not
provided by the laws of the State of Delaware.
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ARTICLE VIII
GENERAL PROVISIONS
Section 1. DIVIDENDS. Dividends upon the capital stock of the Corporation,
if any, subject to the provisions of the Certificate of Incorporation, may be
declared by the Board of Directors (but not any committee thereof) at any
regular meeting, pursuant to law. Dividends may be paid in cash, in property, or
in shares of the capital stock, subject to the provisions of the Certificate of
Incorporation.
Section 2. RESERVES. Before payment of any dividend, there may be set
aside out of any funds of the Corporation available for dividends such sum or
sums as the Board of Directors from time to time, in their absolute discretion,
thinks proper as a reserve or reserves to meet contingencies, or for equalizing
dividends, or for repairing or maintaining any property of the Corporation, or
for such other purpose as the Board of Directors shall think conducive to the
interest of the Corporation, and the Board of Directors may modify or abolish
any such reserve in the manner in which it was created.
Section 3. ANNUAL STATEMENT. The Board of Directors shall present at each
annual meeting, and at any special meeting of the stockholders when called for
by vote of the stockholders, a full and clear statement of the business and
condition of the Corporation.
Section 4. CHECKS. All checks or demands for money and promissory notes of
the Corporation shall be signed by such officer or officers or such other person
or persons as the Board of Directors may from time to time prescribe.
Section 5. FISCAL YEAR. The fiscal year of the Corporation shall be
determined by the Board of Directors.
Section 6. CORPORATE SEAL. The corporate seal shall have inscribed thereon
the name of the Corporation. The seal may be used by causing it or a facsimile
thereof to be impressed, affixed, reproduced, or otherwise.
ARTICLE IX
AMENDMENTS
These By-Laws may be altered, amended, or repealed or new By-Laws may be
adopted by the Board of Directors in accordance with the Certificate of
Incorporation and any other requirement specified in these By-Laws.
CERTIFICATION
I, Wayne Kern, Secretary of the Corporation, hereby certify that the
foregoing is a true, accurate and complete copy of the Bylaws of Heritage Media
Corporation adopted by its Board of Directors as of March , 1996.
--------------------------------------
Wayne Kern, Secretary
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EXHIBIT E
1987 STOCK OPTION PLAN
<PAGE>
STOCK OPTION PLAN
OF
HERITAGE MEDIA CORPORATION
WHEREAS, the Board of Directors of the Corporation deems it in the best
interests of the Corporation that certain key employees and officers of the
Corporation and its subsidiaries be given an opportunity to acquire a stake in
the operation and growth of the Corporation, as a means of assuring their
maximum effort and continued association with the Corporation; and
WHEREAS, the Board believes that the Corporation can best obtain these and
other benefits by granting stock options to key employees, officers and
directors designated from time to time, pursuant to this Plan;
NOW, THEREFORE, the Board does hereby adopt this STOCK OPTION PLAN, subject
to approval, within twelve (12) months of the date of adoption, by at least a
majority of the Common Shares voting at a shareholder's meeting, and subject to
any necessary authorizations from any governmental authority.
1. DEFINITIONS
Wherever used herein, the following terms shall have the following meanings,
respectively:
(a) "Plan" shall mean this 1987 Stock Option Plan, as amended.
(b) "Corporation" shall mean Heritage Media Corporation, or any successor
thereof.
(c) "Parent" shall mean any Parent of the Corporation.
(d) "Subsidiary" shall mean any Subsidiary of the Corporation.
(e) "Board" shall mean the Board of Directors of the Corporation.
(f) "Optionee" or "Participant" shall mean any individual designated by the
Board on recommendation by any committee under Paragraph 4 hereof to be
Optionees under the Plan.
(g) "Transferee" means a person who has succeeded to the rights of an
Optionee under the Option as provided in Paragraphs 5(b) and 7(c) hereof.
(h) "Committee" shall mean any Stock Option Committee appointed by the Board
to administer the Plan.
(i) "Eligible Individuals" shall mean any employee, officer or director of
the Corporation or any Parent or Subsidiary, and shall constitute the
class eligible to receive options under the Plan.
2. AUTHORITY TO GRANT OPTIONS
Under this Plan, the Corporation may, from time to time, but in no event
after ten (10) years from the earlier date of the adoption or approval of the
Plan, grant to Eligible Individuals as herein provided, an option or options to
purchase from the Corporation specified amounts of the authorized and unissued
$.01 par value Class A Common Stock of the Corporation, but not to exceed in the
aggregate 1,500,000 Class A shares, subject to adjustment as provided in
Paragraph 8 below. Shares covered by options which lapse or otherwise are not
exercised may be the subject of additional options granted under the Plan. The
Corporation shall at all times while this Plan is in force reserve as authorized
but unissued stock such number of shares of said Class A Common Stock as will be
sufficient to satisfy the requirements of this Plan with respect to stock
subject to being optioned as well as stock subject to options granted but not
exercised.
3. ADMINISTRATION OF PLAN
(a) The Plan may be administered by a Stock Option Committee of such number,
not less than three (3), as may be determined from time to time by the Board.
The Board may also exercise all the
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powers of the Stock Option Committee. No member of the Board or of the Committee
shall be liable for any action or determination made in good faith with respect
to the Plan or any option granted under the Plan.
(b) The Committee shall be appointed by the Board, and subject to removal by
the Board with or without cause. Vacancies on the Committee, however caused,
shall be filled by the Board. The Committee shall establish its own rules (not
inconsistent with the provisions hereof), for its meetings and the performance
of its responsibilities, but it shall select any of its members as Chairman and
one as Secretary, and shall keep written minutes of its meetings and actions, a
copy of which shall be furnished to the Board not later than the time of the
first meeting of the Board subsequent to each such action by the Committee.
Meetings shall be held at such times and places as the Committee may determine.
A majority of the Committee shall constitute a quorum for the transaction of
business. The Committee shall act by majority vote of the quorum present, or by
written consent of a majority of its members.
(c) Options may be recommended for directors who are also members of the
Committee, provided that such recommendations shall be approved by a majority of
the quorum present exclusive of the member-director for whom the recommendation
is being considered.
(d) Subject to the provisions of the Plan, the Committee is authorized to
interpret the Plan, to make, promulgate, amend and rescind rules and regulations
relating to the Plan, and to make all other determinations necessary or
advisable for its administration, and for the accomplishment of the purposes of
the Plan. Interpretation and construction of any provision of the Plan by the
Committee shall be final and conclusive, unless otherwise determined by the
Board.
4. GRANT OF OPTIONS
(a) The Committee shall, from time to time, but in any event not later than
ten (10) years from the date the Plan is adopted by the Board subject to
approval by the shareholders, to wit, but not later than September 1, 1997,
recommend to the Board those Eligible Individuals whom the Committee determines
should be granted options under the Plan, and the number of shares to be
optioned under each grant. Such Eligible Individuals may be persons previously
recommended to receive options under the Plan, or may be persons not previously
so recommended.
(b) From time to time after such recommendations by the Committee (but in
any event not later than the date specified in Paragraph (a) last above), the
Board may select from among those persons recommended by the Committee the
persons who will be granted options under the Plan, and shall determine the
number of shares to be so optioned (not to exceed the number of shares specified
by the Committee for each such person, respectively), and shall determine the
option price at which the shares are to be so offered to the Eligible
Individuals selected, provided that the option price shall not be less than the
market price of the Corporation's stock at the time the option is granted.
5. OPTION AGREEMENT
No option granted hereunder shall be effective for any purpose unless and
until the Optionee has executed a written agreement (the Stock Option
Agreement), with the Corporation with respect to the terms of the option and its
exercise. Such agreement shall be in form and content determined by the
Committee and Board to be necessary in order that the option and its exercise
will be pursuant and subject to this Plan. In this regard, but without
limitation thereto, the Stock Option Agreement shall in its terms include the
following provisions, which are hereby made a part of the Plan:
(a) The option is not exercisable after the expiration of ten (10) years
from the date the option is granted; and
(b) The option is non-transferable by the Optionee otherwise than by will or
the laws of descent and/or distribution, and is exercisable, during his
lifetime, by him only.
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6. EXERCISE OF OPTION
(a) The Optionee shall have remained in the continuous employ or in the
capacity of director of the Corporation or a Parent or Subsidiary for two (2)
years from and after the date on which the option is granted, or such other and
greater period as may be fixed by the Board before he can exercise any part of
the option. Additionally, the Optionee will be exercised only if the Series A
Common Stock, to be acquired pursuant to the exercise of the option, (1) has
been appropriately registered with the Securities and Exchange Commission
pursuant to the Securities Act of 1933 and appropriately registered with the
necessary state securities authorities pursuant to the applicable state "blue
sky" laws, or (2) in the legal opinion of counsel for the Corporation, does not
require registration under the applicable federal and state statutes.
(b) After the Optionee has remained in the continuous employ or in the
capacity of director of the Corporation for two (2) years, and other
requirements for the exercise of the option have been met, the option may be
exercised as to all of the shares subject to the option. No option agreement
entered into by the Corporation shall be considered to impose upon the
Corporation or Parent or Subsidiary any obligation to retain the Optionee in its
employment or in the capacity of director for two (2) years or any other period
of time.
(c) The Stock Option Committee shall, subject to other provisions of this
Plan, fix the manner of exercising the option, in whole or in part. The option
shall be exercised by means of written notice executed by the Optionee or
Transferee and delivered to the Company stating the number of shares to be
purchased. Said notice shall be accompanied by payment in cash, or by certified
or cashier's check payable to the order of the Corporation, of the full purchase
price, in United States dollars; provided, however, that in lieu of cash an
Optionee may exercise his option by tendering to the Corporation, such shares of
the Series A Common Stock of the Corporation, owned by him, having a fair market
value equal to the cash exercise price applicable to his option, with the fair
market value of such stock to be determined in such appropriate manner as may be
provided for by the Committee or as may be required in order to comply with or
conform to the requirements of any applicable or relevant laws or regulations,
or any combination of cash payments and stock tenders as may be acceptable to
the Committee. No shares shall be issued to any Optionee or Transferee until
full payment therefor has been made; nor shall any Optionee or Transferee have
any of the rights of a stockholder of the Corporation under any such Option
until the actual issuance thereunder of shares to the person or person entitled
thereto.
(d) The notice of exercise of the option shall also be accompanied by a
representation and agreement in writing, signed by the person entitled to
exercise the option and/or receive the shares, stating (1) that the shares being
acquired are being acquired in good faith for investment, and not for sale or
distribution, and shall not be pledged or hypothecated, nor sold or transferred,
in the absence of an effective registration statement for the shares under the
Securities Act of 1933, and/or an effective registration statement for the
shares as required by state "blue sky" laws, or an opinion of counsel of the
Company that registration is not required under said Act and "blue sky" laws,
and (2) that the Company may attach to or imprint the shares a legend to that
effect.
(e) Options may be exercised in whole or in part, however, no option shall
be exercised for less than 100 shares unless such exercise shall be for the full
number of shares then purchasable under the option.
7. EMPLOYMENT RELATIONSHIP
(a) Except as provided in Paragraphs (b) and (c) below, and subject to the
provisions of Paragraph 8 below, options may be exercised only while the
Optionee is an employee or director of (1) the Corporation or a Parent or
Subsidiary, or (2) a corporation (or a parent or subsidiary of such corporation)
issuing or assuming a stock option in a transaction pursuant to a corporate
merger, consolidation, acquisition of property or stock, separation,
reorganization, or liquidation, and has been such an employee or director at all
times during the period commencing with the date of granting the option
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and ending on the date of the exercise of the option. Nothing contained in the
Plan or any option granted pursuant to the Plan, however, shall confer upon
employee, director or Optionee any right with respect to continuation of
employment or position of director by the Corporation or a Parent or Subsidiary,
or any other employer, nor modify or interfere in any way with the right of the
Corporation or of such Parent or Subsidiary or other employer to terminate his
employment or position of director at any time.
(b) In the event that an Optionee shall cease to be an employee or director
of the Corporation or Parent or Subsidiary, such Optionee shall have the right,
to exercise the option at any time within three (3) months after such
termination of employment or position of director or if the Optionee is disabled
the Optionee may exercise the option within twelve (12) months after termination
of employment (but not after the expiration of ten (10) years from the date the
option is granted, and only to the extent the Optionee could have exercised such
option on the date he ceased to be an employee.
(c) If the Optionee shall die while an employee or director of the
Corporation or a Parent or Subsidiary and shall not have fully exercised the
option, an option may be exercised, subject to the condition of ten (10) years
from the date it is granted, to the extent that the Optionee's right to exercise
such option has accrued pursuant to Paragraph 6 of the Plan at the time of his
death and had not previously been exercised, at any time within twelve (12)
months after the Optionee's death, by the executors or administrators of the
Optionee or by any person or persons who shall have acquired the option directly
from the Optionee by bequest or inheritance.
8. TRANSFERS AND CAPITAL CHANGES BY CORPORATION
(a) The adoption and approval of this Plan, and the grant of an option
pursuant to the Plan, shall not affect in any way the right or power of the
Corporation to make adjustments, reclassifications, or reorganizations or
changes of its capital or business structure or to merge or to consolidate or to
dissolve, liquidate or sell, or transfer all or any part of its business or
assets. Except as in this Paragraph 8 otherwise provided, the Optionee shall
have no rights by reason of any subdivision or consolidation of shares of stock
of any class, shall not affect, and no adjustment by reason thereof shall be
made with respect to, the number or price of shares of Capital Stock subject to
the option. No provision in this Paragraph 8 shall be deemed to authorize an
extension of the period for the exercise of an option beyond the period of ten
(10) years as provided in Paragraph 5(a) hereof.
(b) Subject to any required action by the stockholders, the number of shares
of Capital Stock covered by each outstanding option, and the price per share
thereof in each option granted under the Plan shall be proportionately adjusted
(but without providing an option for any fractional share) for any increase or
decrease in the number of issued shares of Capital Stock of the Corporation
resulting from a subdivision or consolidation of shares or the payment of a
stock dividend (but only on the Series A Common Stock) or any other increase or
decrease in the number of such shares effected without receipt or consideration
by the Corporation.
(c) Subject to any required action by the stockholders, if the Corporation
shall be the surviving corporation in any merger or consolidation, each
outstanding option shall pertain to and apply to the securities to which a
holder of the number of shares of Series A Common Stock subject to the option
would have been entitled.
(d) A dissolution or liquidation of the Corporation or a merger or
consolidation in which the corporation is not the surviving corporation, shall
cause all options granted hereunder to terminate, subject to the right of the
Board of Directors of the Corporation to accelerate the time within which the
option may be exercised, and except to the extent that another corporation may,
and does, assume and continue the option or substitute its own options.
(e) In the event of a change in the Series A Common Stock of the corporation
as presently constituted, which is limited to a change of all of its authorized
share with par value into the same number of shares with a different par value
or without par value, the shares resulting from any such change shall be deemed
to be the Series A Common Stock within the meaning of the Plan.
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9. TAX CONSEQUENCES
The options which Optionee receives to this Plan are considered
non-statutory stock options for tax purposes. The term "non-statutory" merely
indicates that the particular option plan does not meet the requirements of a
qualified (statutory) stock option plan. Options received under this non-
statutory stock option plan will be taxable as compensation when the option is
exercised since the options themselves will not have a readily ascertainable
market value when granted. The amount taxable at the time of exercise will be
the difference between the option price and the fair market value of the stock
on the date that the option is exercised. The amount, as determined in the
preceding sentence, will be taxed as compensation income at the ordinary tax
rates. When the Optionee later sells the stock, any further appreciation in
value between the date of exercise and the date of sale will be taxed at capital
gains rates.
10. AMENDMENT AND DISCONTINUANCE
The Board may, insofar as permitted by law, change, alter, suspend, or
discontinue this Plan, and accept the surrender of outstanding and unexercised
options under the Plan; the Board may, without the consent of the option
holders, modify the terms of outstanding and unexercised options and may cancel
such options, if such modification or cancellation is deemed necessary by the
Board in connection with any future financing arrangements on behalf of the
Corporation; with the exception of the provisions found elsewhere in the
paragraph, no action may be taken or permitted which will alter or impair the
terms and conditions of any Stock Option Agreement under the Plan without the
written consent of the holders of outstanding and unexercised options.
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EXHIBIT F
1996 STOCK OPTION PLAN
<PAGE>
1996 STOCK OPTION PLAN
OF
HERITAGE MEDIA CORPORATION
WHEREAS, the Board of Directors of the Corporation deems it in the best
interests of the Corporation that certain key employees, officers and directors
of the Corporation and its subsidiaries be given an opportunity to acquire a
stake in the operation and growth of the Corporation, as a means of assuring
their maximum effort and continued association with the Corporation; and
WHEREAS, the Board believes that the Corporation can best obtain these and
other benefits by granting stock options to key employees, officers and
directors designated from time to time pursuant to this Plan; and
WHEREAS, this Plan is intended to comply with Rule 16b-3 under Section 16 of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or any
successor provision ("Rule 16b-3"), and this Plan shall be construed,
interpreted and administered to so comply;
NOW, THEREFORE, the Board does hereby adopt this 1996 STOCK OPTION PLAN,
subject to approval, within 12 months of the date of adoption, by at least a
majority of the shares of the Corporation's capital stock entitled to vote
thereon at a shareholders' meeting.
1. DEFINITIONS.
Wherever used herein, the following terms shall have the following meanings,
respectively:
(a) "Committee" means the Compensation Committee or other committee
appointed by the Board, which shall consist of two or more directors,
each of whom shall be a "disinterested person" within the meaning of Rule
16b-3(c) under the Exchange Act, or any successor provision.
(b) "Board" shall mean the Board of Directors of the Corporation.
(c) "Code" means the Internal Revenue Code of 1986, as amended from time to
time.
(d) "Corporation" shall mean Heritage Media Corporation, or any successor
thereof.
(e) "Eligible Individuals" shall mean any employee, officer or director of
the Corporation or any Parent or Subsidiary as provided in Paragraph 4(a)
of this Plan.
(f) "Fair Market Value" means, with respect to the Common Stock and at any
date, (i) the reported closing price of such stock on the American Stock
Exchange, New York Stock Exchange or other established stock exchange or
the Nasdaq National Market System on such date, or if no sale of such
stock shall have been made on such an exchange or the Nasdaq National
Market System on that date, on the preceding date on which there was such
a sale, (ii) if such stock is not then listed on such an exchange or
quoted on the Nasdaq National Market System, the average of the closing
bid and asked prices per share for such stock in the over-the-counter
market as quoted on the National Association of Securities Dealers, Inc.
Automated Quotation System ("Nasdaq") on such date, or (iii) if such
stock is not then listed on such an exchange or quoted on Nasdaq or the
Nasdaq National Market System, an amount determined in good faith by the
Committee in its sole discretion.
(g) "Non-Employee Director" means a director of the Corporation who is not
an employee of the Corporation or any Parent or Subsidiary of the
Corporation.
(h) "Optionee" or "Participant" shall mean any individual designated by the
Committee to be Optionees under this Plan.
(i) "Parent" shall mean any Parent of the Corporation.
(j) "Plan" shall mean this 1996 Stock Option Plan, as amended.
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(k) "Section 16 Participant" means a Participant subject to Section 16 of
the Exchange Act.
(l) "Subsidiary" means a "subsidiary corporation," whether now or hereafter
existing, as defined in Section 424(f) of the Code or any other entity,
including partnerships, that are owned by the Corporation or any Parent
or Subsidiary.
(m) "Transferee" means a person who has succeeded to the rights of an
Optionee under the Option as provided in Paragraphs 5(b) and 7(b) hereof.
2. AUTHORITY TO GRANT OPTIONS.
Under this Plan, the Corporation may, from time to time, but in no event
after ten (10) years from the earlier date of the adoption or approval of this
Plan, grant to Eligible Individuals as herein provided, an Option or Options to
purchase from the Corporation specified amounts of the authorized and unissued,
$.01 par value, of its Common Stock of the Corporation, but not to exceed in the
aggregate 1,500,000 shares of Common Stock, subject to adjustment as provided in
Paragraph 8 below. Shares covered by Options which lapse or otherwise are not
exercised may be the subject of additional Options granted under this Plan.
3. ADMINISTRATION OF PLAN.
(a) This Plan shall be administered by the Committee. Among other things,
the Committee shall have authority, subject to the terms of this Plan
(including provisions governing participation of Non-Employee Directors),
to grant awards under this Plan and to determine the individuals to whom
and the time or times at which awards may be granted, the type(s) of
award(s) to be granted to such individuals pursuant to this Plan and the
terms and conditions of such awards; provided, however, that the maximum
number of shares which may be subject to all Options awarded to a
Participant during any calendar year may not exceed 200,000 (subject to
adjustment pursuant to Paragraph 8 hereof). All administrative powers may
be delegated by the Committee, except where (i) such powers with respect
to the selection of and determination of awards for Section 16
Participants are required to be exercised by the Committee in order to
enable this Plan to qualify for the exemption provided by Rule 16b-3 or
(ii) such delegation would cause the benefits under this Plan to "covered
employees" within the meaning of Section 162(m) of the Code to not
qualify as performance-based compensation within the meaning of Section
162(m) of the Code and applicable interpretive authority thereunder.
(b) Subject to the provisions contained herein, the Committee shall have
authority to adopt, alter and repeal such administrative rules,
guidelines and practices governing the operation of this Plan as it shall
from time to time consider advisable, to interpret the provisions of this
Plan and any Option Agreement (as hereinafter defined), and to decide all
disputes arising in connection with this Plan. The Committee's decisions
and interpretations shall be final and binding. Any action of the
Committee with respect to the administration of this Plan shall be taken
pursuant to a majority vote or by the unanimous written consent of its
members.
(c) The Corporation shall indemnify and hold harmless each director of the
Corporation and each Committee member for any action or determination
made in good faith with respect to this Plan or any Option Agreement.
4. GRANT OF OPTIONS.
(a) The following individuals shall be eligible to receive awards pursuant
to this Plan as follows:
(i) Any employee (including any officer or director who is an employee)
of the Corporation or any Parent or Subsidiary of the Corporation
shall be eligible to receive Options under this Plan.
(ii) Any Non-Employee Director of the Corporation shall be eligible to
receive Options as set forth in Paragraph 10 hereof.
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(b) Subject to the provisions of this Plan, the Committee may award Options
and determine the number of shares to be covered by each Option, the
Option price therefor, the term of the Option, and the other conditions
and limitations applicable to the exercise of the Option. The terms of
each Option need not be identical, and the Committee need not treat
Participants uniformly. Except as otherwise provided by this Plan or a
particular Option Agreement, any determination with respect to an Option
may be made by the Committee at the time of award or at any time
thereafter.
5. OPTION AGREEMENT.
No Option granted hereunder shall be effective for any purpose unless and
until the Optionee has executed a written agreement (the "Option Agreement"),
with the Corporation with respect to the terms of the Option and its exercise.
Such agreement shall be in form and content determined by the Committee to be
necessary in order that the Option and its exercise will be pursuant and subject
to this Plan and applicable regulatory laws or accounting principles. In this
regard, but without limitation thereto, the Option Agreement shall in its terms
include the following provisions, which are hereby made a part of this Plan:
(a) The Option is not exercisable after the expiration of ten years from the
date the Option is granted; and
(b) The Option is non-transferable by the Optionee otherwise than by will or
the laws of descent and/or distribution, and is exercisable, during his
lifetime, by him only.
6. EXERCISE OF OPTION.
(a) Subject to the provisions of Paragraph 11 hereof, the Optionee shall
have remained in the continuous employ of the Corporation or a Parent or
Subsidiary for two years from and after the date on which the Option is
granted, or such other and greater period as may be fixed by the
Committee, before he can exercise any part of the Option.
(b) Subject to the provisions of Paragraph 11 hereof, after the Optionee has
remained in the continuous employ of the Corporation for two years, and
other requirements for the exercise of the Option have been met, the
Option may be exercised as to all of the shares subject to the Option. No
Option Agreement entered into by the Corporation shall be considered to
impose upon the Corporation or Parent or Subsidiary any obligation to
retain the Optionee in its employment for two years or any other period
of time.
(c) The Committee shall, subject to other provisions of this Plan, fix the
manner of exercising the Option, in whole or in part. The Option shall be
exercised by means of written notice executed by the Optionee and
delivered to the Corporation stating the number of shares to be
purchased. Said notice shall be accompanied by payment in cash, or by
certified or cashier's check payable to the order of the Corporation, of
the full purchase price, in United States dollars; provided, however,
that in lieu of cash an Optionee may exercise his Option by tendering to
the Corporation such shares of the Common Stock of the Corporation owned
by him having a fair market value equal to the cash exercise price
applicable to his Option, with the fair market value of such stock to be
determined in such appropriate manner as may be provided for by the
Committee or as may be required in order to comply with or conform to the
requirements of any applicable or relevant laws or regulations, or any
combination of cash payments and stock tenders as may be acceptable to
the Committee. No shares shall be issued to any Optionee until full
payment therefor has been made.
(d) Options may be exercised in whole or in part, however, no Option shall
be exercised for less than 100 shares unless such exercise shall be for
the full number of shares then purchasable under the Option.
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7. EMPLOYMENT RELATIONSHIP.
(a) In the event that an Optionee shall cease to be an employee of the
Corporation or Parent or Subsidiary, such Optionee shall have the right
to exercise the Option at any time within three months after such
termination of employment or if the Optionee is disabled the Optionee may
exercise the Option within twelve months after termination of employment
(but not after the expiration of ten years from the date the Option is
granted, and only to the extent the Optionee could have exercised such
Option on the date he ceased to be an employee).
(b) If the Optionee shall die while an employee of the Corporation or a
Parent or Subsidiary and shall not have fully exercised the Option, an
Option may be exercised, subject to the condition of ten years from the
date it is granted, to the extent that the Optionee's right to exercise
such Option has accrued pursuant to Paragraph 6 of this Plan at the time
of his death and had not previously been exercised, at any time within
twelve months after the Optionee's death, by the executors or
administrators of the Optionee or by any person or persons who shall have
acquired the Option directly from the Optionee by bequest or inheritance.
8. TRANSFERS AND CAPITAL CHANGES BY CORPORATION.
(a) The adoption and approval of this Plan, and the grant of an Option
pursuant to this Plan, shall not affect in any way the right or power of
the Corporation to make adjustments, reclassifications, or
reorganizations or changes of its capital or business structure or to
merge or to consolidate or to dissolve, liquidate or sell, or transfer
all or any part of its business or assets. Except as in this Paragraph 8
otherwise provided, the Optionee shall have no rights by reason of any
subdivision or consolidation of shares of stock of any class, and no
adjustment by reason thereof shall be made with respect to, the number or
price of shares of Capital Stock subject to the Option. No provision in
this Paragraph 8 shall be deemed to authorize an extension of the period
for the exercise of an Option beyond the period of ten years as provided
in Paragraph 5(a) hereof.
(b) Subject to any required action by the stockholders, if the Corporation
shall be the surviving corporation in any merger or consolidation, each
outstanding Option shall pertain to and apply to the securities to which
a holder of the number of shares of Common Stock subject to the Option
would have been entitled.
(c) In the event of a stock dividend, stock split or combination of shares
of Common Stock, recapitalization or other increase or decrease in the
number of issued shares of Common Stock effected without receipt of
consideration by the Corporation, appropriate and proportionate
adjustment shall be made in (i) the number and kind of shares of stock in
respect of which Options may be awarded under this Plan, (ii) the number
and kind of shares of stock or other property subject to outstanding
Options, and (iii) the award, exercise or conversion price with respect
to any of the foregoing.
9. TAX CONSEQUENCES.
The Options which Optionee receives to this Plan are considered
non-statutory stock options for tax purposes. The term "non-statutory" merely
indicates that the particular option plan does not meet the requirements of a
qualified (statutory) stock option plan. Under the tax laws in effect as of the
date of this Plan, options received under this non-statutory option plan will be
taxable as compensation when the Option is exercised. The amount taxable at the
time of exercise will be the difference between the option price and the fair
market value of the stock on the date that the Option is exercised. The amount,
as determined in the preceding sentence, will be taxed as compensation income at
the ordinary tax rates. When the Optionee later sells the stock, any further
appreciation in value between the date of exercise and the date of sale will be
taxed at capital gains rates, provided the requisite holding period is met.
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<PAGE>
10. NONDISCRETIONARY AWARDS TO NON-EMPLOYEE DIRECTORS.
(a) Notwithstanding any other provision of this Plan, Non-Employee Directors
shall participate in this Plan only to the extent set forth in this
Paragraph 10. The provisions of this Plan
applicable to awards granted or to be granted to Non-Employee Directors
are intended to comply with the provisions of Rule 16b-3(c)(2)(ii) under
the Exchange Act, or any successor provision, and such provisions shall
be construed, interpreted and administered to so comply. The Committee
shall have no authority to take any action, and shall not take any
action, if the authority to take such action, or the taking of such
action, would result in noncompliance with such provisions.
(i) On the second Friday in December of each year commencing December
13, 1996, each Non-Employee Director shall receive a grant of an
Option to purchase 2,000 shares of Common Stock. Options granted to
Non-Employee Directors shall first become exercisable two years after
the date of grant, subject to the provisions of Paragraph 11 hereof.
To the extent Rule 16b-3 is amended so that the Options may be
awarded to Non-Employees Directors at dates to be determined by the
Committee, then the Committee is authorized to select in its
discretion the date for grants of Options to the Non-Employee
Directors.
(ii) The term of each Option granted to a Non-Employee Director shall be
ten years from its date of grant.
(iii) The option price of the shares of Common Stock subject to each
Option granted to a Non-Employee Director shall be the Fair Market
Value of such shares on the date the Option is granted.
(b) If a Non-Employee Director ceases to be a director of the Corporation,
such Non-Employee Director's Options shall be exercisable by him only
during the six months following the date such person ceases to be a
director, except that if a Non-Employee Director dies while serving as a
director, such Non-Employee Director's Options shall be exercisable by
his or her executor or administrator or, if not so exercised, by the
legatees or the distributees of his or her estate, only during the six
months following his or her death.
11. ACCELERATION OF EXERCISABILITY AND VESTING UNDER CERTAIN CIRCUMSTANCES
Notwithstanding any provision in this Plan to the contrary, with regard to
any Option awarded to any Participant, unless the particular Option provides
otherwise, the Option will become immediately exercisable and vested in full
upon the occurrence, before the expiration or termination of such Option or
forfeiture of such shares, of any of the events listed below:
(a) a sale, transfer or other conveyance of all or substantially all of the
assets of the Corporation on a consolidated basis;
(b) the acquisition of beneficial ownership (as such term is defined in Rule
13d-3 promulgated under the Exchange Act) by any "person" (as such term
is used in Sections 13(d) and 14(d) of the Exchange Act), other than (i)
the Corporation or (ii) James Hoak and his affiliates, directly or
indirectly, of securities representing 50% or more of the total number of
votes that may be cast for the election of directors of the Corporation;
or
(c) the commencement (within the meaning of Rule 14d-2 promulgated under the
Exchange Act) of a "tender offer" for stock of the Company subject to
Section 14(d)(2) of the Exchange Act; or
(d) the failure at any annual or special meeting of the Corporation's
stockholders following an "election contest" subject to Rule 14a-11
promulgated under the Exchange Act, of any of the persons nominated by
the Corporation in the proxy material mailed to stockholders by the
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management of the Corporation to win election to seats on the Board,
excluding only those who die, retire voluntarily, are disabled or are
otherwise disqualified in the interim between their nomination and the
date of the meeting.
12. AMENDMENT AND DISCONTINUANCE.
The Committee may amend the terms of any Option theretofore granted,
retroactively or prospectively, but no such amendment shall impair the rights of
any holder without his or her written consent.
13. MISCELLANEOUS
(a) No person shall have any claim or right to be awarded an Option, and the
award of an Option shall not be construed as giving a Participant the
right to continued employment. The Corporation expressly reserves the
right at any time to dismiss a Participant free from any liability or
claim under this Plan, except as expressly provided in the applicable
Option Agreement.
(b) Nothing contained in this Plan shall prevent the Corporation from
adopting other or additional compensation arrangements for its employees
or directors.
(c) Subject to the provisions of the applicable Option Agreement, no
Participant shall have any rights as a stockholder with respect to any
shares of Common Stock to be distributed under this Plan until he or she
becomes the record holder thereof.
(d) The Committee may require, as a condition of receiving shares of Common
Stock issued pursuant to any Option, that a Participant furnish to the
Corporation such written representations and information as the Committee
deems appropriate to permit the Corporation, in light of the existence or
nonexistence of an effective Registration Statement under the Securities
Act of 1933, as amended (the "Securities Act"), to deliver such shares in
compliance with the provisions of the Securities Act.
(e) Notwithstanding any other provision of this Plan, in order to qualify
for the exemption provided by Rule 16b-3, (i) any shares of equity
security received by a Section 16 Participant may not be sold for six
months and one day after the date of award of the Option and (ii) any
Option or other right related to an equity security issued under this
Plan that constitutes a "derivative security" within the meaning of Rule
16b-3(a)(2) under the Exchange Act, or any successor provision, shall not
be transferable other than by will or the laws of descent and
distribution. The Committee shall have no authority to take any action,
and shall not take any action, if the authority to take such action, or
the taking of such action, would disqualify this Plan from the exemption
provided by Rule 16b-3.
(f) This Plan shall become effective upon its approval by the Board, subject
to approval by the stockholders of the Corporation. Prior to such
stockholder approval, awards may be granted under this Plan subject to
such stockholder approval.
(g) The Board may amend, suspend or terminate this Plan or any portion
thereof at any time, provided that (i) no amendment shall be made without
stockholder approval if such approval is necessary to comply with any
applicable tax or regulatory requirement, including any requirements for
exemptive relief under Section 16(b) of the Exchange Act or any successor
provision, and (ii) Paragraph 10 hereof and, as it relates to awards
granted or to be granted to Non-Employee Directors, Paragraph 11 hereof,
may not be amended more than once every six months other than to comport
with changes in the Code or ERISA or the rules and regulations under
either thereof. If any amendment, suspension or termination of this Plan
shall materially and adversely affect the rights of the holder of any
award then outstanding, such amendment, suspension or termination shall
not be deemed to alter such rights unless the holder shall consent
thereto.
F-6
<PAGE>
PROXY
HERITAGE MEDIA CORPORATION
The undersigned hereby (a) acknowledges receipt of the Notice
of Annual Meeting of Stockholders of Heritage Media Corporation
(the "Company") to be held on May 26, 1996, at 9:00 a.m., local
time, and the Proxy Statement in connection therewith, and (b)
appoints David N. Walthall and Douglas N. Woodrum, or each of them,
his proxies, with full power of substitution and revocation, for
and in the name, place and stead of the undersigned, to vote upon
and act with respect to all of the shares of Class A Common Stock
of the Company standing in the name of the undersigned or with
respect to which the undersigned is entitled to vote and act at
said meeting or at any adjournment thereof, and the undersigned
directs that his proxy be voted as follows:
ELECTION OF DIRECTORS / / FOR nominees listed below except as
marked to the contrary below
/ / WITHHOLD AUTHORITY to vote for
all nominees listed below
H. Berry Cash, James S. Cownie, Joseph M. Grant, James M. Hoak,
Clark A. Johnson, Alan R. Kahn and David N. Walthall
INSTRUCTION: To withhold authority to vote for any individual
nominee, write that nominee's name in the space
below.
PROPOSAL TO CHANGE THE COMPANY'S STATE OF INCORPORATION TO THE
STATE OF DELAWARE BY MEANS OF A MERGER WITH A WHOLLY OWNED
SUBSIDIARY:
____FOR ____AGAINST ____ABSTAIN
PROPOSAL TO APPROVE AN AMENDMENT TO THE COMPANY'S 1987 STOCK OPTION
PLAN:
____FOR ____AGAINST ____ABSTAIN
PROPOSAL TO ADOPT THE COMPANY'S 1996 STOCK OPTION PLAN:
____FOR ____AGAINST ____ABSTAIN
<PAGE>
If more than one of the proxies listed on the reverse side
shall be present in person or by substitute at the meeting or any
adjournment thereof, the majority of said proxies so present and
voting, either in person or by substitute, shall exercise all of
the powers hereby given.
THIS PROXY WILL BE VOTED AS SPECIFIED ON THE REVERSE SIDE. IF
NO SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED FOR ALL NOMINEES
FOR DIRECTORS AND FOR THE NAMED PROPOSALS.
The undersigned hereby revokes any proxy or proxies heretofore
given to vote upon or act with respect to such stock and hereby
ratifies and confirms all that said proxies, their substitutes, or
any of them, may lawfully do by virtue hereof.
Dated:_____________________________
___________________________________
Signature
___________________________________
(Signature if held jointly)
Please date the proxy and sign your
name exactly as it appears hereon.
Where there is more than one owner,
each should sign. When signing as
an attorney, administrator,
executor, guardian or trustee,
please add your title as such. If
executed by a corporation, the proxy
should be signed by a duly
authorized officer. Please sign the
proxy and return it promptly whether
or not you expect to attend the
meeting. You may nevertheless vote
in person if you do attend.
