<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:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
RASTEROPS
-------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
-------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
5) Total fee paid:
------------------------------------------------------------------------
/X/ Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------------------
4) Date Filed:
------------------------------------------------------------------------
<PAGE>
[LOGO]
2500 WALSH AVENUE
SANTA CLARA, CA 95051
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
------------------------
OCTOBER 24, 1995
TO THE SHAREHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of RasterOps,
a California corporation (the "Company"), will be held on Tuesday, October 24,
1995, at 9:00 a.m. local time, at the Company's offices at 2500 Walsh Avenue,
Santa Clara, California 95051, for the following purposes:
1. To elect Directors to serve until the next annual meeting and until
their successors have been duly elected and qualified;
2. To approve an amendment to the Company's Articles of Incorporation to
increase the number of authorized shares of Common Stock to 25,000,000
shares;
3. To approve a change in the Company's state of incorporation from
California to Delaware by means of a merger of the Company with a wholly
owned subsidiary of the Company;
4. To approve an amendment to the Amended 1988 Incentive Stock Plan to
increase the number of shares of Common Stock authorized for issuance
thereunder by 515,000;
5. To approve an amendment to the Company's Amended and Restated 1991
Director Option Plan to increase the number of shares of Common Stock
authorized for issuance thereunder by 100,000;
6. To approve an amendment to the Company's Amended and Restated 1991
Director Option Plan to provide for a one-time grant of an option to
purchase 25,000 shares of Common Stock to any non-employee who acts as
Chairman of the Board of Directors of the Company;
7. To ratify the appointment of Price Waterhouse LLP as independent
accountants of the Company for the fiscal year ending June 29, 1996; and
8. To transact such other business as may properly come before the meeting
or any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only shareholders of record at the close of business on August 25, 1995 are
entitled to notice of and to vote at the meeting.
All shareholders are cordially invited to attend the meeting in person.
However, to assure your representation at the meeting, you are urged to mark,
sign, date and return the enclosed proxy card as promptly as possible in the
postage-prepaid envelope enclosed for that purpose. Any shareholder attending
the meeting may vote in person even if he or she returned a proxy.
Sincerely,
[SIG]
R. John Curson
SECRETARY
Santa Clara, California
September 27, 1995
IMPORTANT: WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE REQUESTED TO
COMPLETE AND PROMPTLY RETURN THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED
<PAGE>
RASTEROPS
------------------------
PROXY STATEMENT
------------------------
SEPTEMBER 27, 1995
GENERAL
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of RasterOps, a California corporation (the
"Company"), for use at the Annual Meeting of Shareholders of the Company (the
"Annual Meeting") to be held on Tuesday, October 24, 1995, at 9:00 a.m. local
time, at the Company's offices at 2500 Walsh Avenue, Santa Clara, California
95051, and at any adjournment or adjournments thereof.
At the Annual Meeting, the Shareholders of the Company (the "Shareholders")
will be asked to elect six (6) directors, to amend the Company's Articles of
Incorporation to increase the number of authorized shares of Common Stock (the
"Common Stock") to 25,000,000, to approve a change in the Company's state of
incorporation through a merger with a wholly owned subsidiary of the Company, to
amend the Amended 1988 Incentive Stock Plan to increase the number of shares
reserved thereunder by 515,000, to amend the Amended and Restated 1991 Director
Option Plan to increase the number of shares reserved thereunder by 100,000, to
amend the Company's Amended and Restated 1991 Director Option Plan to provide
for a one-time grant of an option to purchase 25,000 shares of Common Stock to
any non-employee who acts as the Chairman of the Board of Directors of the
Company, to ratify the appointment of Price Waterhouse LLP as the Company's
independent accountants for the fiscal year ending June 29, 1996, and to
transact such other business as may properly come before the meeting. All
proxies that are properly completed, signed and returned to the Company prior to
the Annual Meeting will be voted.
Any proxy given by a Shareholder may be revoked at any time before it is
exercised by filing with the Secretary of the Company an instrument revoking it,
by duly executed proxy bearing a later date, or by such Shareholder attending
the Annual Meeting and expressing a desire to vote his or her shares in person.
This Proxy Statement and the accompanying form of Proxy are being mailed to the
Shareholders on or about September 27, 1995.
The Board of Directors has fixed the close of business on August 25, 1995,
as the record date for the determination of Shareholders entitled to vote at the
Annual Meeting and any adjournment or adjournments thereof. At the close of
business on the record date there were outstanding 12,395,545 shares of Common
Stock, no par value, of the Company held of record by 343 Shareholders. Holders
of shares of Common Stock on the record date are entitled to one vote for each
share held. The presence at the Annual Meeting, either in person or by proxy, of
the holders of a majority of the outstanding shares entitled to vote shall
constitute a quorum for the transaction of business. If a choice is specified in
the proxy as to the manner in which it is to be voted, the persons acting under
the proxy will vote the shares of Common Stock represented thereby in accordance
with such choice. If no choice is specified, the shares will be voted FOR the
Directors nominated, FOR the increase in the authorized number of shares of
Common Stock, FOR the reincorporation of the Company in Delaware, FOR the
increase in the number of shares reserved under the Amended 1988 Incentive Stock
Plan, FOR the increase in the number of shares reserved for issuance under the
Amended and Restated 1991 Director Option Plan, FOR the amendment to the
Company's 1991 Director Option Plan, FOR the appointment of Price Waterhouse LLP
as independent accountants for the fiscal year ending June 29, 1996, and in the
discretion of the proxy holders as to any other matter properly to come before
the meeting.
<PAGE>
In the event that sufficient votes in favor of proposals are not received by
the date of the Annual Meeting, persons named as proxies may propose one or more
adjournments of the Annual Meeting to permit further solicitation of proxies.
Any such adjournment will require the affirmative vote of the holders of a
majority of the outstanding shares present in person or by proxy at the Annual
Meeting.
The cost of preparing, assembling, printing and mailing the Proxy Statement,
the Notice of Annual Meeting of Shareholders and the enclosed form of Proxy, as
well as the cost of soliciting proxies relating to the Annual Meeting, will be
borne by the Company. The Company will request banks, brokers, dealers and
voting trustees or other nominees to solicit their customers who are owners of
shares listed of record and names of nominees, and will reimburse them for
reasonable out-of-pocket expenses of such solicitations. The original
solicitation of proxies by mail may be supplemented by telephone, telegram and
personal solicitation by officers and other regular employees of the Company.
2
<PAGE>
PROPOSAL ONE
ELECTION OF DIRECTORS
NOMINEES
The Bylaws of the Company presently provide that the authorized number of
Directors shall be between five and nine. At the Annual Meeting, six (6)
Directors will be elected to serve until the next Annual Meeting and until their
successors are elected and qualified. The Company intends to nominate for
election as Directors the six (6) persons named below, all of whom are incumbent
Directors. All of these nominees have indicated that they are able and willing
to serve as Directors. In the event that any nominee of the Company is unable or
declines to serve as a Director at the time of the Annual Meeting, the proxies
will be voted for any nominee who shall be designated by the present Board of
Directors to fill the vacancy. In the event that additional persons are
nominated for election as Directors, the proxy holders intend to vote all
proxies received by them in such a manner in accordance with cumulative voting
as will assure the election of as many of the nominees listed below as possible,
and, in such event, the specific nominees to be voted for will be determined by
the proxy holders.
Each of the six (6) nominees for Director who receives the greatest number
of votes will be elected. A Shareholder may, prior to the vote being taken,
indicate his or her intention to cumulate votes. In such a case, each
Shareholder would be entitled to that number of votes as equals the number of
shares of Common Stock held by such Shareholder multiplied by six (6) and would
be entitled to allocate those votes to any one or more nominees for Director in
the Shareholder's discretion. Each of the six (6) nominees for Director who
received the greatest number of votes would be elected. In any case, abstentions
and broker non-votes are not considered in elections for Director.
Unless otherwise instructed, the proxy holders intend to vote the shares of
Common Stock represented by the proxies in favor of the election of these
nominees.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE
ELECTION OF THE SIX NOMINEES FOR DIRECTOR.
INFORMATION CONCERNING NOMINEES
The Company's nominees are listed below together with their ages and
positions with the Company prior to the Annual Meeting:
<TABLE>
<CAPTION>
NAME AGE POSITION WITH THE COMPANY
- --------------------------- --- ---------------------------------------------
<S> <C> <C>
Walter W. Bregman (1)(2) 61 Chairman of the Board
Louis J. Doctor 37 President, Chief Executive Officer and
Director
Gordon E. Eubanks, Jr. (2) 50 Director
William H. McAleer (2) 44 Director
Kieth E. Sorenson 47 Director
Conrad J. Wredberg (1) 54 Director
<FN>
- ------------------------
(1) Audit Committee member
(2) Compensation Committee member
</TABLE>
All Directors are elected at the Annual Meeting of Shareholders to serve
until the following Annual Meeting and until their successors are duly elected
and have been qualified. There is no family relationship among any officers or
Directors.
3
<PAGE>
Mr. Bregman has been a Director of RasterOps since July 1991 and Chairman of
the Board since December 1994. He has been Chairman and Co-CEO of S&B
Enterprises, a consulting firm, since March 1988, and since December 1992 has
been President and CEO of Golf Scientific, Inc., a company that produces and
sells golf instructional equipment. From July 1985 until June 1987, he was
President and owner of the Cormorant Beach Club. Prior to July 1985, he served
as President of International Playtex Inc. He is also a director of Symantec,
Inc.
Mr. Doctor has been President and Chief Executive Officer since he joined
the Company in October 1994. Prior to joining RasterOps, he was President of The
Arbor Group since May 1994, a company that offers corporate clients strategic
services in the technology arena. He also held positions of Executive Vice
President and Vice President of Business Development at SuperMac Technology,
Inc. from June 1991 to April 1994. In March 1981, Mr. Doctor co-founded Raster
Technologies, a manufacturer of high-end graphics and imaging systems, and
served as its President until January 1989. Mr. Doctor was an independent
consultant from January 1989 to 1991.
Mr. Eubanks is currently President and CEO of Symantec Corporation, a
leading developer of application and utility software for PC and Macintosh
computers. Previously, he was Vice President of Digital Research, Inc.'s
commercial systems division. Mr. Eubanks then founded C&E Software, which merged
with Symantec in 1983. In 1985, he created Turner Hall Publishing, a division of
Symantec devoted to publishing third-party software. Mr. Eubanks is a former
President of the Software Publishers Association.
Mr. McAleer is currently President of E-LIANCE PARTNERS which provides
capital funding and transaction advisory services. From April 1988 to October
1994, he was with Aldus Corporation where he most recently held the position of
Vice President of Finance, Chief Financial Officer and Secretary. At Aldus, Mr.
McAleer was responsible for finance, legal and business development activities,
including the Company's merger with Adobe Systems. Prior to joining Aldus, he
was Vice President of Finance and Administration with Ecova Corporation until
April 1988 and also served as Vice President and Corporate Controller for Westin
Hotels.
Mr. Sorenson, a founder of the Company, has served as a Director since June
1987. He also served as Chairman of the Board from June 1987 until December
1994, as Chief Executive Officer from June 1987 until September 1993 and as
President from June 1987 until April 1993. Mr. Sorenson has been a partner with
Sorenson, Thomas & Co., an investment management firm since February. From
September 1979 to June 1987, Mr. Sorenson was employed by Ramtek Corporation
("Ramtek"), a manufacturer of computer graphic systems, where he most recently
held the position of Vice President of Engineering and Product Development.
Mr. Wredberg has been a Director of RasterOps since October 1992. In April
1995, he became President of Transmission Systems Business Division of the Broad
Band Communications Group of Scientific Atlanta, Inc. Previously, he had been
President and General Manager of American Microsystems, Inc. ("AMI") for eight
years. He joined AMI in 1985 as Vice President of Manufacturing and became
Senior Vice President of Operations in 1986. Prior to his joining AMI, Mr.
Wredberg worked at Mostek Corporation, a subsidiary of United Technologies
Corporation, where he most recently held the position of Vice President of
Quality Assurance.
4
<PAGE>
PROPOSAL TWO
INCREASE IN AUTHORIZED COMMON STOCK
The Board of Directors determined in September 1995 that it is in the best
interest of the Company and its Shareholders to amend the Articles of
Incorporation to increase the number of authorized shares of Common Stock to
25,000,000. The Articles of Incorporation currently provide that the number of
shares of Common Stock available for issuance by the Company is 15,000,000.
The proposal to increase the number of authorized shares of Common Stock is
being made to provide greater flexibility to the Company. The Board of
Directors, without seeking shareholder approval, could authorize the issuance of
additional shares of Common Stock in the future which could have the effect of
delaying or preventing a change in control of the Company. In addition, the
increase in the authorized number of shares would enable the Board of Directors
to utilize such shares for further financings, possible acquisitions and other
uses, any of which could have a dilutive effect on the Company's current
shareholders. However, the Company has no plans to issue any additional shares
outside the ordinary course of its business.
The affirmative vote of the holders of a majority of shares represented, in
person or by proxy, and voting at the Annual Meeting (which shares voting
affirmatively also constitute at least a majority of the required quorum) will
be required to approve the above-proposed amendment to the Articles of
Incorporation. If this proposal is approved, the authorized Common Stock of the
Company will be 25,000,000. Abstentions will be counted toward the number of
shares represented and voting at the meeting.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR APPROVAL OF
THE INCREASE IN THE AUTHORIZED SHARES OF COMMON STOCK.
PROPOSAL THREE
REINCORPORATION IN DELAWARE
INTRODUCTION
For the reasons set forth below, the Board of Directors believes that the
best interests of the Company and its shareholders will be served by changing
the state of incorporation of the Company from California to Delaware (the
"Reincorporation Proposal" or the "Proposed Reincorporation"). SHAREHOLDERS 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 "RasterOps" refers to the existing California corporation and
the term "Truevision" refers to Truevision, Inc., a new Delaware corporation and
a wholly owned subsidiary of RasterOps, which is the proposed successor to
RasterOps.
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, the increased ability of the Company to attract
and retain qualified directors and the ability to change the corporate name to
"Truevision, Inc." The Company believes that its shareholders will benefit from
the well established principles of corporate governance that Delaware law
affords. Although Delaware law provides the opportunity for the Board of
Directors to adopt various mechanisms which may enhance the Board's ability to
negotiate favorable terms for the shareholders in the event of an unsolicited
takeover attempt, the proposed Delaware Certificate of Incorporation and Bylaws
are substantially similar to those currently in effect in California. The
Reincorporation Proposal is not being proposed in order to prevent an
unsolicited takeover attempt, and the Board of Directors is not aware of any
present attempt to acquire control of the Company, obtain representation on the
Board of Directors or take significant action that affects the Company.
The Reincorporation Proposal will be effected by merging RasterOps into
Truevision. Upon completion of the merger, RasterOps will cease to exist and
Truevision will continue to operate the business of the Company under the name
Truevision, Inc.
5
<PAGE>
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
RasterOps Common Stock, no par value, will automatically be converted into one
share of Truevision Common Stock, $0.001 par value, upon the effective date of
the merger. Each stock certificate representing issued and outstanding shares of
RasterOps Common Stock will continue to represent the same number of shares of
Common Stock of Truevision. IT WILL NOT BE NECESSARY FOR SHAREHOLDERS TO
EXCHANGE THEIR EXISTING STOCK CERTIFICATES FOR STOCK CERTIFICATES OF TRUEVISION.
However, shareholders may exchange their certificates if they so choose. The
Common Stock of RasterOps is listed for trading on the Nasdaq National Market,
and after the merger Truevision's Common Stock will be traded on the Nasdaq
National Market under the symbol TRUV.
Under California law, the affirmative vote of a majority of the outstanding
shares of Common Stock of RasterOps 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 RasterOps' Board of Directors. If approved by the
shareholders, it is anticipated that the merger will become effective as soon as
practicable (the "Effective Date") following the Annual Meeting of Shareholders.
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 shareholder approval) either before
or after shareholder approval has been obtained and prior to the Effective Date
of the Proposed Reincorporation if, in the opinion of the Board of Directors of
RasterOps, circumstances arise which make it inadvisable to proceed under the
original terms of the Merger Agreement. Shareholders of RasterOps will have no
dissenters' rights of appraisal with respect to the merger.
The discussion set forth below is qualified in its entirety by reference to
the Merger Agreement, the Certificate of Incorporation of Truevision (the
"Certificate of Incorporation"), the Bylaws of Truevision and the form of
Indemnification Agreements to be entered into by and between Truevision and each
of its officers and directors, copies of which are attached hereto as Exhibits
A, B, C and D, respectively.
APPROVAL BY SHAREHOLDERS OF THE PROPOSED REINCORPORATION WILL CONSTITUTE
APPROVAL OF THE MERGER AGREEMENT, THE CERTIFICATE OF INCORPORATION AND THE
BYLAWS OF TRUEVISION, AND THE FORM OF INDEMNIFICATION AGREEMENTS AND ALL
PROVISIONS THEREOF.
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 Truevision, (ii) the assumption of RasterOps' employee benefit plans
and stock option and employee stock purchase plans by Truevision and (iii)
indemnification agreements with Truevision's officers and directors to afford
such persons indemnification by the Company to the fullest extent permitted by
Delaware law, will require the affirmative vote of the holders of a majority of
the outstanding shares of Common Stock of RasterOps entitled to vote.
THE BOARD RECOMMENDS A VOTE FOR THE PROPOSED REINCORPORATION IN DELAWARE.
THE EFFECT OF AN ABSTENTION OR A BROKER NON-VOTE IS THE SAME AS THAT OF A VOTE
AGAINST THE REINCORPORATION PROPOSAL.
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 shareholders will benefit from the responsiveness of Delaware corporate law
to their needs and to those of the corporation they own.
6
<PAGE>
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
California 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 law provides greater protection to directors
than California law and that Delaware case law regarding a corporation's ability
to limit director liability is more developed and provides more guidance than
California 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 shareholders will benefit from the well established principles of corporate
governance that Delaware law affords.
CHANGE IN CORPORATE NAME. The Company has decided that it is appropriate to
change its corporate name to "Truevision, Inc." to reflect the increased
emphasis the Company has placed on its Truevision product line. The Company will
be able to effect this change through the merger of RasterOps and Truevision.
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, the corporate name 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 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 six directors who are elected at the Annual Meeting of
Shareholders will become the directors of Truevision. All employee benefit,
stock option and employee stock purchase plans of RasterOps will be assumed and
continued by Truevision, 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 Truevision Common Stock, at the same price per share, upon
the same terms, and subject to the same conditions. Shareholders should note
that approval of the Reincorporation Proposal will also constitute approval of
the assumption of these plans by Truevision. Other employee benefit arrangements
of RasterOps will also be continued by Truevision upon the terms and subject to
the conditions currently in effect. As noted above, after the merger the shares
of Common Stock of Truevision will be traded under the symbol TRUV in the Nasdaq
National Market.
7
<PAGE>
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, RasterOps'
rights and obligations under such Material Agreements will continue and be
assumed by Truevision.
ANTITAKEOVER IMPLICATIONS
Delaware, like many other states, permits a corporation to adopt a number of
measures through amendment of the corporate charter or bylaws or otherwise,
which measures are designed to reduce a corporation's vulnerability to
unsolicited takeover attempts. The Reincorporation Proposal is not being
proposed in order to prevent such a change in control, and the Board of
Directors is not aware of any present attempt to acquire control of the Company
or to obtain representation on the Board of Directors.
In the discharge of its fiduciary obligations to its shareholders, the Board
of Directors has evaluated the Company's vulnerability to potential unsolicited
bidders. In the course of such evaluation, the Board of Directors of the Company
has considered or may consider in the future certain defensive strategies
designed to enhance the Board's ability to negotiate with an unsolicited bidder.
These strategies include, but are not limited to, the adoption of a severance
plan for its management and key employees which becomes effective upon the
occurrence of a change in control of the Company and the authorization of
preferred stock, the rights and preferences of which may be determined by the
Board of Directors. Each of these measures has been implemented by RasterOps
under California law and will be assumed or a corresponding arrangement will be
provided for by Truevision under Delaware law.
Certain effects of the Reincorporation Proposal may be considered to have
antitakeover implications. Section 203 of the Delaware General Corporation Law,
from which Truevision does not intend to opt out, restricts certain "business
combinations" with "interested stockholders" for three years following the date
that a person becomes an interested stockholder, unless the Board of Directors
approves the business combination. See "Significant Differences Between the
Corporation Laws of California and Delaware -- Shareholder Approval of Certain
Business Combinations". Other measures permitted under Delaware law that the
Company is not implementing as part of the Proposed Reincorporation include the
establishment of a staggered board of directors, the elimination of cumulative
voting, the elimination of the right of stockholders controlling at least ten
percent (10%) of the voting shares to call a special meeting of stockholders and
elimination of the right to remove a director other than for cause. It should
also be noted that elimination of cumulative voting and the establishment of a
classified board of directors also can be undertaken under California law in
certain circumstances. For a detailed discussion of all of the changes which
will be implemented as part of the Proposed Reincorporation, see "The Charters
and Bylaws of RasterOps and Truevision" and "Indemnification and Limitation of
Liability" below. For a discussion of these and other differences between the
laws of California and Delaware, see "Significant Differences Between the
Corporation Laws of California and Delaware" below.
The Board of Directors believes that unsolicited takeover attempts may be
unfair or disadvantageous to the Company and its shareholders because: (i) a
non-negotiated takeover bid may be timed to take advantage of temporarily
depressed stock prices; (ii) a non-negotiated takeover bid may be designed to
foreclose or minimize the possibility of more favorable competing bids or
alternative transactions; (iii) a non-negotiated takeover bid may involve the
acquisition of only a controlling interest in the corporation's stock, without
affording all shareholders the opportunity to receive the same economic
benefits; and (iv) certain of the Company's Material Agreements provide that
they may not be assigned pursuant to a transaction which results in a "change of
control" of the Company without the prior written consent of the licensor or
other contracting party.
By contrast, in a transaction in which an acquiror must negotiate with an
independent board of directors, the board can and should take account of the
underlying and long-term values of the Company's business, technology and other
assets, the possibilities for alternative transactions on
8
<PAGE>
more favorable terms, possible advantages from a tax-free reorganization,
anticipated favorable developments in the Company's business not yet reflected
in the stock price and equality of treatment of all shareholders.
Despite the belief of the Board of Directors as to the benefits to
shareholders of the Reincorporation Proposal, it may be disadvantageous to the
extent that it has the effect of discouraging a future takeover attempt which is
not approved by the Board of Directors, but which a majority of the shareholders
may deem to be in their best interests or in which shareholders may receive a
substantial premium for their shares over the then current market value or over
their cost basis in such shares. As a result of such effects of the
Reincorporation Proposal, shareholders who might wish to participate in a tender
offer may not have an opportunity to do so. In addition, to the extent that such
provisions enable the Board of Directors to resist a takeover or a change in
control of the Company, such provisions could make it more difficult to change
the existing Board of Directors and management.
THE CHARTERS AND BYLAWS OF RASTEROPS AND TRUEVISION
The provisions of the Truevision Certificate of Incorporation and Bylaws are
similar to those of the RasterOps Articles of Incorporation and Bylaws in many
respects. However, the Reincorporation Proposal includes the implementation of
certain provisions in the Truevision Certificate of Incorporation and Bylaws
which alter the rights of shareholders and the powers of management. These
provisions have antitakeover implications and are described in detail below.
Approval by shareholders of the Proposed Reincorporation will constitute an
approval of the inclusion in the Truevision Certificate of Incorporation and
Bylaws of each of the provisions described below. In addition, Truevision could
implement certain other changes by amendment of its Certificate of Incorporation
or Bylaws, although amendments to the Certificate of Incorporation would be
effective only upon approval of the stockholders. For a discussion of such
changes, see "Significant Differences Between the Corporation Laws of California
and Delaware." This discussion of the Certificate of Incorporation and Bylaws of
Truevision is qualified by reference to Exhibits B and C hereto, respectively.
The Articles of Incorporation of RasterOps currently authorize the Company
to issue up to 15,000,000 shares of Common Stock, no par value, and 2,000,000
shares of Preferred Stock, no par value. The Certificate of Incorporation of
Truevision provides that such company will have 25,000,000 authorized shares of
Common Stock, $.001 par value, and 2,000,000 shares of Preferred Stock, $.001
par value. Like RasterOps' Articles of Incorporation, Truevision'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 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
California or Delaware law. The Board of Directors could also utilize such
shares for further financings, possible acquisitions and other uses.
MONETARY LIABILITY OF DIRECTORS. The Articles of Incorporation of RasterOps
and the Certificate of Incorporation of Truevision both provide for the
elimination of personal monetary liability of directors to the fullest extent
permissible under law. The provision eliminating monetary liability of directors
set forth in the Truevision Certificate of Incorporation is potentially more
expansive than the corresponding provision in the RasterOps Articles of
Incorporation, in that the former incorporates future amendments to Delaware law
with respect to the elimination of such liability. For a more detailed
explanation of the foregoing, see "Significant Differences Between the
Corporation Laws of California and Delaware -- Indemnification and Limitation of
Liability."
SIZE OF THE BOARD OF DIRECTORS. The Bylaws of Truevision provide for a
Board of Directors ranging from five to nine members, which will originally
consist of six directors. The Bylaws of RasterOps provide for a Board of
Directors ranging from five to nine members, and as of the date of the Annual
Meeting of Shareholders, the exact number will be set at six directors. Under
California law, although
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changes in the number of directors, in general, must be approved by a majority
of the outstanding shares, the Board of Directors may fix the exact number of
directors within a stated range set forth in the articles of incorporation or
bylaws, if the stated ranges have been approved by the shareholders. Delaware
law permits the board of directors acting alone, to change the authorized number
of directors by amendment to the bylaws, unless the directors are not authorized
to amend the bylaws or the number of directors is fixed in the certificate of
incorporation (in which case a change in the number of directors may be made
only by amendment to the certificate of incorporation following approval of such
change by the stockholders). The Truevision Certificate of Incorporation
provides that the number of directors will be as specified in the Bylaws and
authorizes the Board of Directors to adopt, alter, amend or repeal the Bylaws.
Following the Proposed Reincorporation, the Board of Directors of Truevision
could amend the Bylaws to change the size of the Board of Directors from six
directors without further stockholder approval. If the Reincorporation Proposal
is approved, the six directors of RasterOps who are elected at the Annual
Meeting of Shareholders will continue as the six directors of Truevision after
the Proposed Reincorporation is consummated.
CUMULATIVE VOTING FOR DIRECTORS. Under California law, if any shareholder
has given notice of an intention to cumulate votes for the election of
directors, any other shareholder of the corporation is also entitled to cumulate
his or her votes at such election. Cumulative voting provides that each share of
stock normally having one vote is entitled to a number of votes equal to the
number of directors to be elected. A shareholder may then cast all such votes
for a single candidate or may allocate them among as many candidates as the
shareholder may choose. In the absence of cumulative voting, the holders of the
majority of the shares present or represented at a meeting in which directors
are to be elected would have the power to elect all the directors to be elected
at such meeting, and no person could be elected without the support of holders
of the majority of shares present or represented at such meeting. Elimination of
cumulative voting could make it more difficult for a minority shareholder
adverse to a majority of the shareholders to obtain representation on the
Company's Board of Directors. California corporations whose stock is listed on a
national Stock exchange or whose stock is held by 800 shareholders and included
in the Nasdaq National Market (a "Listed Company") can also eliminate cumulative
voting with shareholder approval. The Company does not currently qualify as a
Listed Company. Under Delaware law, cumulative voting in the election of
directors is not mandatory, but is a permitted option. The Truevision
Certificate of Incorporation provides for cumulative voting rights.
POWER TO CALL SPECIAL SHAREHOLDERS' MEETINGS. Under California law, a
special meeting of shareholders may be called by the board of directors, the
chairman of the board, the president, the holders of shares entitled to cast not
less than 10% of the votes at such meeting and such additional persons as are
authorized by the articles of incorporation or the bylaws. Under Delaware law, a
special meeting of stockholders may be called by the board of directors or any
other person authorized to do so in the certificate of incorporation or the
bylaws. The Bylaws of Truevision currently authorize the Board of Directors, the
Chairman of the Board, the President and the holders of not less than ten
percent (10%) of the shares entitled to vote to call a special meeting of
stockholders. Therefore, no substantive change is contemplated in this
provision. Although the Board of Directors could in the future amend the
Company's Bylaws without stockholder approval, there is no current intention to
do so.
FILLING VACANCIES ON THE BOARD OF DIRECTORS. Under California law, any
vacancy on the board of directors other than one created by removal of a
director may be filled by the Board. If the number of directors is less than a
quorum, a vacancy may be filled by the unanimous written consent of the
directors then in office, by the affirmative vote of a majority of the directors
at a meeting held pursuant to notice or waivers of notice or by a sole remaining
director. A vacancy created by removal of a director may be filled by the board
only if so authorized by a corporation's articles of incorporation or by a bylaw
approved by the corporation's shareholders. RasterOps' Articles of Incorporation
and Bylaws do not permit directors to fill vacancies created by removal of a
director by the shareholders. Under Delaware law, vacancies and newly created
directorships may be filled by a majority of the directors then in office (even
though less than a quorum) or by a sole remaining director, unless
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otherwise provided in the certificate of incorporation or bylaws (or unless the
certificate of incorporation directs that a particular class of stock is to
elect such director(s), in which case a majority of the directors elected by
such class, or a sole remaining director so elected, shall fill such vacancy or
newly created directorship). The Bylaws of Truevision provide, consistent with
the Bylaws of RasterOps, that any vacancy created by the removal of a director
by the stockholders of Truevision may be filled only by the stockholders.
Following the Proposed Reincorporation, the Board of Directors of Truevision
could, although it has no current intention to do so, amend the Bylaws to
provide that directors may fill any vacancy created by removal of directors by
the stockholders.
LOANS TO OFFICERS AND EMPLOYEES. Under California law, any loan or guaranty
to or for the benefit of a director or officer of the corporation or its parent
requires approval of the shareholders unless such loan or guaranty is provided
under a plan approved by shareholders owning a majority of the outstanding
shares of the corporation. However, under California law, shareholders of any
corporation with 100 or more shareholders of record, such as the Company, may
approve a bylaw authorizing the board of directors alone to approve loans or
guaranties to or on behalf of officers (whether or not such officers are
directors) if the board determines that any such loan or guaranty may reasonably
be expected to benefit the corporation. Pursuant to the Truevision Bylaws and in
accordance with Delaware law, Truevision may make loans to, guarantee the
obligations of or otherwise assist its officers or other employees and those of
its subsidiaries (including directors who are also officers or employees) when
such action, in the judgment of the directors, may reasonably be expected to
benefit the corporation.
VOTING BY BALLOT. California law provides that the election of directors
may proceed in the manner described in a corporation's bylaws. RasterOps' Bylaws
provide that the election of directors at a shareholders' meeting may be by
voice vote or ballot, unless prior to such vote a shareholder demands a vote by
ballot, in which case such vote must be by ballot. Under Delaware law, the right
to vote by written ballot may be restricted if so provided in the Certificate of
Incorporation. The Bylaws of Truevision do not address election by ballot, but
the Certificate of Incorporation of Truevision, consistent with RasterOps'
Bylaws, provides that if a stockholder specifically demands election of
directors by ballot (or if the Bylaws provide that elections shall be by ballot)
then elections shall be held by ballot. Stockholders of Truevision may therefore
continue to demand election by ballot, unless and until the Certificate of
Incorporation is amended, which amendment would require a majority stockholder
vote. It may be more difficult for a stockholder to contest the outcome of a
vote that has not been conducted by written ballot.
SIGNIFICANT DIFFERENCES BETWEEN THE CORPORATION LAWS OF CALIFORNIA AND DELAWARE
The corporation laws of California and Delaware differ in many respects.
Although all the differences are not set forth in this Proxy Statement, certain
provisions, which could materially affect the rights of shareholders, are
discussed below.
STOCKHOLDER APPROVAL OF CERTAIN BUSINESS COMBINATIONS. In recent years, a
number of states have adopted special laws designed to make certain kinds of
"unfriendly" corporate takeovers, or other transactions involving a corporation
and one or more of its significant shareholders, more difficult. Under Section
203 of the Delaware General Corporation Law, certain "business combinations"
with "interested stockholders" of Delaware corporations are subject to a
three-year moratorium unless specified conditions are met.
Section 203 prohibits a Delaware corporation from engaging in a "business
combination" with an "interested stockholder" for three years following the date
that such person or entity becomes an interested stockholder. With certain
exceptions, an interested stockholder is a person or entity who or which owns,
individually or with or through certain other persons or entities, fifteen
percent (15%) or more of the corporation's outstanding voting stock (including
any rights to acquire stock pursuant to an option, warrant, agreement,
arrangement or understanding, or upon the exercise of conversion or exchange
rights, and stock with respect to which the person has voting rights only), or
is an affiliate or
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associate of the corporation and was the owner, individually or with or through
certain other persons or entities, of fifteen percent (15%) or more of such
voting stock at any time within the previous three years, or is an affiliate or
associate of any of the foregoing.
For purposes of Section 203, the term "business combination" is defined
broadly to include mergers with or caused by the interested stockholder; sales
or other dispositions to the interested stockholder (except proportionately with
the corporation's other stockholders) of assets of the corporation or a direct
or indirect majority-owned subsidiary equal in aggregate market value to ten
percent (10%) or more of the aggregate market value of either the corporation's
consolidated assets or all of its outstanding stock; the issuance or transfer by
the corporation or a direct or indirect majority-owned subsidiary of stock of
the corporation or such subsidiary to the interested stockholder (except for
certain transfers in a conversion or exchange or a pro rata distribution or
certain other transactions, none of which increase the interested stockholder's
proportionate ownership of any class or series of the corporation's or such
subsidiary's stock or of the corporation's voting stock); or receipt by the
interested stockholder (except proportionately as a stockholder), directly or
indirectly, of any loans, advances, guarantees, pledges or other financial
benefits provided by or through the corporation or a subsidiary.
The three-year moratorium imposed on business combinations of Section 203
does not apply if: (i) prior to the date on which such stockholder becomes an
interested stockholder the board of directors of the subject corporation
approves either the business combination or the transaction that resulted in the
person or entity becoming an interested stockholder; (ii) upon consummation of
the transaction that made him or her an interested stockholder, the interested
stockholder owns at least eighty-five percent (85%) of the corporation's voting
stock outstanding at the time the transaction commenced (excluding from the
eighty-five percent (85%) calculation shares owned by directors who are also
officers of the subject corporation and shares held by employee stock plans that
do not give employee participants the right to decide confidentially whether to
accept a tender or exchange offer); or (iii) on or after the date such person or
entity becomes an interested stockholder, the board approves the business
combination and it is also approved at a stockholder meeting by sixty-six and
two-thirds percent (66 2/3%) of the outstanding voting stock not owned by the
interested stockholder.
Section 203 only applies to certain publicly held corporations that have a
class of voting stock that is (i) listed on a national securities exchange, (ii)
quoted on an interdealer quotation system of a registered national securities
association such as the Nasdaq National Market or (iii) held of record by more
than 2,000 stockholders. Although a Delaware corporation to which Section 203
applies may elect not to be governed by Section 203, Truevision does not intend
to so elect and thus will be governed by Section 203.
The Company believes that Section 203 will encourage any potential acquiror
to negotiate with the Company's Board of Directors. Section 203 also might have
the effect of limiting the ability of a potential acquiror to make a two-tiered
bid for Truevision in which all stockholders would not be treated equally.
Shareholders should note, however, that the application of Section 203 to
Truevision will confer upon the Board the power to reject a proposed business
combination in certain circumstances, even though a potential acquiror may be
offering a substantial premium for Truevision's shares over the then-current
market price. Section 203 would also discourage certain potential acquirors
unwilling to comply with its provisions. See "Shareholder Voting" herein.
California law requires that holders of nonredeemable common stock receive
nonredeemable common stock in a merger of the corporation with the holder of
more than fifty percent (50%) but less than ninety percent (90%) of such common
stock or its affiliate unless all of the holders of such common stock consent to
the transaction. This provision of California law may have the effect of making
a "cash-out" merger by a majority shareholder more difficult to accomplish.
Although Delaware law does not parallel California law in this respect, under
some circumstances Section 203 does provide similar protection against coercive
two-tiered bids for a corporation in which the stockholders are not treated
equally.
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REMOVAL OF DIRECTORS. Under California law, any director or the entire
board of directors may be removed, with or without cause, with the approval of a
majority of the outstanding shares entitled to vote; however, no individual
director may be removed (unless the entire board is removed) if the number of
votes cast against such removal would be sufficient to elect the director under
cumulative voting. Under Delaware law, a director of a corporation that does not
have a classified board of directors or cumulative voting may be removed with or
without cause with the approval of a majority of the outstanding shares entitled
to vote at an election of directors. In the case of a Delaware corporation
having cumulative voting, if less than the entire board is to be removed, a
director may not be removed without cause if the number of shares voted against
such removal would be sufficient to elect the director under cumulative voting.
A director of a corporation with a classified board of directors may be removed
only for cause, unless the certificate of incorporation otherwise provides. The
Certificate of Incorporation of Truevision does not provide for a classified
board of directors but does provide for cumulative voting. As a result, and
similar to applicable California law, Truevision directors may not be removed
without cause if the number of shares voted against such removal would be
sufficient to elect the director under cumulative voting.
CLASSIFIED BOARD OF DIRECTORS. A classified board is one on which a certain
number, but not all, of the directors are elected on a rotating basis each year.
This method of electing directors makes changes in the composition of the board
of directors more difficult, and thus a potential change in control of a
corporation a lengthier and more difficult process. Under California law, a
Listed Company may also provide for a classified board of directors by adopting
amendments to its articles of incorporation or bylaws, which amendments must be
approved by the shareholders. The Board of Directors believes RasterOps does not
currently qualify as a Listed Company able to adopt a classified board of
directors. Delaware law permits, but does not require, a classified board of
directors, pursuant to which the directors can be divided into as many as three
classes with staggered terms of office, with only one class of directors
standing for election each year. The Truevision Certificate of Incorporation and
Bylaws do not provide for a classified board, and Truevision presently does not
intend to propose establishment of a classified board. The establishment of a
classified board following the Proposed Reincorporation would require the
approval of the stockholders of Truevision.
INDEMNIFICATION AND LIMITATION OF LIABILITY. California and Delaware have
similar laws respecting indemnification by a corporation of its officers,
directors, employees and other agents. The laws of both states also permit, with
certain exceptions, a corporation to adopt charter provisions eliminating the
liability of a director to the corporation or its shareholders for monetary
damages for breach of the director's fiduciary duty. There are nonetheless
certain differences between the laws of the two states respecting
indemnification and limitation of liability.
The Articles of Incorporation of RasterOps eliminate the liability of
directors to the corporation to the fullest extent permissible under California
law. California law does not permit the elimination of monetary liability where
such liability is based on: (a) intentional misconduct or knowing and culpable
violation of law; (b) acts or omissions that a director believes to be contrary
to the best interests of the corporation or its shareholders, or that involve
the absence of good faith on the part of the director; (c) receipt of an
improper personal benefit; (d) acts or omissions that show reckless disregard
for the director's duty to the corporation or its shareholders, where the
director in the ordinary course of performing a director's duties should be
aware of a risk of serious injury to the corporation or its shareholders; (e)
acts or omissions that constitute an unexcused pattern of inattention that
amounts to an abdication of the director's duty to the corporation and its
shareholders; (f) transactions between the corporation and a director who has a
material financial interest in such transaction; and (g) liability for improper
distributions, loans or guarantees.
The Certificate of Incorporation of Truevision also eliminates the liability
of directors to the corporation or its stockholders for monetary damages for
breach of fiduciary duty as a director to the fullest extent permissible under
Delaware law, as such law exists currently or as it may be amended in the
future. Under Delaware law, such provision may not eliminate or limit director
monetary liability for: (a) breaches of the director's duty of loyalty to the
corporation or its stockholders; (b) acts or
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omissions not in good faith or involving intentional misconduct or knowing
violations of law; (c) the payment of unlawful dividends or unlawful stock
repurchases or redemptions; or (d) transactions in which the director received
an improper personal benefit. Such limitation of liability provisions also may
not limit a director's liability for violation of, or otherwise relieve
Truevision or its directors from the necessity of complying with federal or
state securities laws, or affect the availability of non-monetary remedies such
as injunctive relief or rescission.
California law permits indemnification of expenses incurred in derivative or
third-party actions, except that with respect to derivative actions (a) no
indemnification may be made when a person is adjudged liable to the corporation
in the performance of that person's duty to the corporation and its shareholders
unless a court determines such person is entitled to indemnity for expenses, and
then such indemnification may be made only to the extent that such court shall
determine and (b) no indemnification may be made without court approval in
respect of amounts paid or expenses incurred in settling or otherwise disposing
of a pending action or amounts incurred in defending a pending action that is
settled or otherwise disposed of without court approval.
California law requires indemnification when the individual has defended
successfully the action on the merits while Delaware law requires
indemnification relating to a successful defense on the merits or otherwise.
Delaware law generally permits indemnification of expenses, including attorneys'
fees, actually and reasonably incurred in the defense or settlement of a
derivative or third-party action, provided there is a determination by a
majority vote of a disinterested quorum of the directors, by independent legal
counsel or by a majority vote of a quorum of the stockholders that the person
seeking indemnification acted in good faith and in a manner reasonably believed
to be in or (in contrast to California law) not opposed to the best interests of
the corporation. Without court approval, however, no indemnification may be made
in respect of any derivative action in which such person is adjudged liable for
negligence or misconduct in the performance of his or her duty to the
corporation. Delaware law requires indemnification of expenses when the
individual being indemnified has successfully defended any action, claim, issue,
or matter therein, on the merits or otherwise.
Expenses incurred by an officer or director in defending an action may be
paid in advance, under Delaware law and California law, if such director or
officer undertakes to repay such amounts if it is ultimately determined that he
or she is not entitled to indemnification. In addition, the laws of both states
authorize a corporation's purchase of indemnity insurance for the benefit of its
officers, directors, employees and agents whether or not the corporation would
have the power to indemnify against the liability covered by the policy.
California law permits a California corporation to provide rights to
indemnification beyond those provided therein to the extent such additional
indemnification is authorized in the corporation's articles of incorporation.
Thus, if so authorized, rights to indemnification may be provided pursuant to
agreements or bylaw provisions which make mandatory the permissive
indemnification provided by California law. Under California law, there are two
limitations on such additional rights to indemnification: (i) such
indemnification is not permitted for acts, omissions or transactions from which
a director of a California corporation may not be relieved of personal
liability, as described above and (ii) such indemnification is not permitted in
circumstances where California law expressly prohibits indemnification, as
described above. RasterOps' Articles of Incorporation permit indemnification
beyond that expressly mandated by the California Corporations Code and limit
director monetary liability to the extent permitted by California law. RasterOps
has entered into indemnification agreements with its officers and directors.
Delaware law also permits a Delaware corporation to provide indemnification
in excess of that provided by statute. By contrast to California law, Delaware
law does not require authorizing provisions in the certificate of incorporation
and does not contain express prohibitions on indemnification in certain
circumstances; limitations on indemnification may be imposed by a court,
however, based on principles of public policy.
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A provision of Delaware law states that the indemnification provided by
statute shall not be deemed exclusive of any other rights under any bylaw,
agreement, vote of stockholders or disinterested directors or otherwise. If the
Proposed Reincorporation is approved, Truevision will enter into indemnification
agreements with the officers and directors substantially in the form attached
hereto as Exhibit D to provide for indemnification of officers and directors and
advancement of expenses to the maximum extent permitted by Delaware law, and a
vote in favor of the Proposed Reincorporation is also approval of such
indemnification agreements. Among other things, the indemnification agreements
will include within their purview future changes in Delaware law that expand the
permissible scope of indemnification of directors and officers of Delaware
corporations.
INSPECTION OF SHAREHOLDER LIST. Both California and Delaware law allow any
shareholder to inspect the shareholder list for a purpose reasonably related to
such person's interest as a shareholder. California law provides, in addition,
for an absolute right to inspect and copy the corporation's shareholder list by
persons holding an aggregate of five percent (5%) or more of the corporation's
voting shares, or shareholders holding an aggregate of one percent (1%) or more
of such shares who have filed a Schedule 14B with the SEC in connection with a
contested election of directors. The latter provision has not been amended in
response to the elimination of Schedule 14B under the revised proxy rules. Under
California law, such absolute inspection rights also apply to a corporation
formed under the laws of any other state if its principal executive offices are
in California or if it customarily holds meetings of its board in California.
However, such absolute inspection rights do not apply to a corporation that
qualifies as a Listed Company. Delaware law also provides for inspection rights
as to a list of stockholders entitled to vote at a meeting within a ten day
period preceding a stockholders' meeting for any purpose germane to the meeting.
However, Delaware law contains no provisions comparable to the absolute right of
inspection provided by California law to certain shareholders.
DIVIDENDS AND REPURCHASES OF SHARES. California law dispenses with the
concepts of par value of shares as well as statutory definitions of capital,
surplus and the like. The concepts of par value, capital and surplus exist under
Delaware law. Truevision's authorized Common Stock and Preferred Stock will each
have a $0.001 par value per share.
Under California law, a corporation may not make any distribution (including
dividends, whether in cash or other property, and repurchases of its shares,
other than repurchases of its shares issued under employee stock plans
contemplated by Section 408 of the California Corporations Code) unless either
(i) the corporation's retained earnings immediately prior to the proposed
distribution equal or exceed the amount of the proposed distribution or (ii)
immediately after giving effect to such distribution, the corporation's assets
(exclusive of goodwill, capitalized research and development expenses and
deferred charges) would be at least equal to 1 1/4 times its liabilities (not
including deferred taxes, deferred income and other deferred credits), and the
corporation's current assets would be at least equal to its currently
liabilities (or 1 1/4 times its current liabilities if the average pre-tax and
pre-interest expense earnings for the preceding two fiscal years were less than
the average interest expense for such years). Such tests are applied to
California corporations on a consolidated basis.
Delaware law permits a corporation to declare and pay dividends out of
surplus or, if there is no surplus, out of net profits for the fiscal year in
which the dividend is declared and/or for the preceding fiscal year as long as
the amount of capital of the corporation following the declaration and payment
of the dividend is not less than the aggregate amount of the capital represented
by the issued and outstanding stock of all classes having a preference upon the
distribution of assets. In addition, Delaware law generally provides that a
corporation may redeem or repurchase its shares only if the capital of the
corporation is not impaired and such redemption or repurchase would not impair
the capital of the corporation.
To date, the Company has not paid any cash dividends on its outstanding
shares and does not anticipate doing so for the foreseeable future.
SHAREHOLDER VOTING. Both California and Delaware law generally require that
a majority of the shareholders of both acquiring and target corporations approve
statutory mergers. Delaware law does
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not require a stockholder vote of the surviving corporation in a merger (unless
the corporation provides otherwise in its certificate of incorporation) if (a)
the merger agreement does not amend the existing certificate of incorporation,
(b) each share of the stock of the surviving corporation outstanding immediately
before the effective date of the merger is an identical outstanding or treasury
share after the merger and (c) either no shares of common stock of the surviving
corporation and no shares, securities or obligations convertible into such stock
are to be issued or delivered under the plan of merger, or the authorized
unissued shares or the treasury shares of common stock of the surviving
corporation to be issued or delivered under the plan of merger plus those
initially issuable upon conversion of any other shares, securities or
obligations to be issued or delivered under such plan do not exceed twenty
percent (20%) of the shares of common stock of such constituent corporation
outstanding immediately prior to the effective date of the merger. California
law contains a similar exception to its voting requirements for reorganizations
where shareholders or the corporation itself, or both, immediately prior to the
reorganization will own immediately after the reorganization equity securities
constituting more than five-sixths of the voting power of the surviving or
acquiring corporation or its parent entity.
Both California law and Delaware law also require that a sale of all or
substantially all of the assets of a corporation be approved by a majority of
the outstanding voting shares of the corporation transferring such assets.
With certain exceptions, California law also requires that mergers,
reorganizations, certain sales of assets and similar transactions be approved by
a majority vote of each class of shares outstanding. In contrast, Delaware law
generally does not require class voting, except in certain transactions
involving an amendment to the certificate of incorporation that adversely
affects a specific class of shares. As a result, shareholder approval of such
transactions may be easier to obtain under Delaware law for companies which have
more than one class of shares outstanding.
California law also requires that holders of nonredeemable common stock
receive nonredeemable common stock in a merger of the corporation with the
holder of more than fifty percent (50%) but less than ninety percent (90%) of
such common stock or its affiliate unless all of the holders of such common
stock consent to the transaction. This provision of California law may have the
effect of making a "cash-out" merger by a majority shareholder more difficult to
accomplish. Although Delaware law does not parallel California law in this
respect, under some circumstances Section 203 does provide similar protection
against coercive two-tiered bids for a corporation in which the stockholders are
not treated equally. See "Significant Differences Between the Corporation Laws
of California and Delaware -- Stockholder Approval of Certain Business
Combinations."
California law provides that, except in certain circumstances, when a tender
offer or a proposal for a reorganization or for a sale of assets is made by an
interested party (generally a controlling or managing person of the target
corporation), an affirmative opinion in writing as to the fairness of the
consideration to be paid to the shareholders must be delivered to shareholders.
This fairness opinion requirement does not apply to a corporation that does not
have shares held of record by at least 100 persons, or to a transaction that has
been qualified under California state securities laws. Furthermore, if a tender
of shares or vote is sought pursuant to an interested party's proposal and a
later proposal is made by another party at least ten days prior to the date of
acceptance of the interested party proposal, the shareholders must be informed
of the later offer and be afforded a reasonable opportunity to withdraw any
vote, consent or proxy, or to withdraw any tendered shares. Delaware law has no
comparable provision.
INTERESTED DIRECTOR TRANSACTIONS. Under both California and Delaware law,
certain contracts or transactions in which one or more of a corporation's
directors has an interest are not void or voidable because of such interest
provided that certain conditions, such as obtaining the required approval and
fulfilling the requirements of good faith and full disclosure, are met. With
certain exceptions, the conditions are similar under California and Delaware
law. Under California and Delaware law, (a) either the shareholders or the board
of directors must approve any such contract or transaction
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after full disclosure of the material facts, and, in the case of board approval,
the contract or transaction must also be "just and reasonable" (in California)
or "fair" (in Delaware) to the corporation or (b) the contract or transaction
must have been just and reasonable or fair as to the corporation at the time it
was approved. In the latter case, California law explicitly places the burden of
proof on the interested director. Under California law, if shareholder approval
is sought, the interested director is not entitled to vote his shares at a
shareholder meeting with respect to any action regarding such contract or
transaction. If board approval is sought, the contract or transaction must be
approved by a majority vote of a quorum of the directors, without counting the
vote of any interested directors (except that interested directors may be
counted for purposes of establishing a quorum). Under Delaware law, if board
approval is sought, the contract or transaction must be approved by a majority
of the disinterested directors (even if the disinterested directors are less
than a quorum). Therefore, certain transactions that the Board of Directors of
RasterOps might not be able to approve because of the number of interested
directors, could be approved by a majority of the disinterested directors of
Truevision, although less than a majority of a quorum. The Company is not aware
of any plans to propose any transaction involving directors of the Company that
could not be so approved under California law but could be so approved under
Delaware law.
SHAREHOLDER DERIVATIVE SUITS. California law provides that a shareholder
bringing a derivative action on behalf of a corporation need not have been a
shareholder at the time of the transaction in question, provided that certain
tests are met. Under Delaware law, a stockholder may bring a derivative action
on behalf of the corporation only if the stockholder was a stockholder of the
corporation at the time of the transaction in question or if his or her stock
thereafter devolved upon him or her by operation of law. California law also
provides that the corporation or the defendant in a derivative suit may make a
motion to the court for an order requiring the plaintiff shareholder to furnish
a security bond. Delaware does not have a similar bonding requirement.
APPRAISAL RIGHTS. Under both California and Delaware law, a shareholder of
a corporation participating in certain major corporate transactions may, under
varying circumstances, be entitled to appraisal rights pursuant to which such
shareholder may receive cash in the amount of the fair market value of his or
her shares in lieu of the consideration he or she would otherwise receive in the
transaction. Under Delaware law, such fair market value is determined exclusive
of any element of value arising from the accomplishment or expectation of the
merger or consolidation, and such appraisal rights are not available (a) with
respect to the sale, lease or exchange of all or substantially all of the assets
of a corporation, (b) with respect to a merger or consolidation by a corporation
the shares of which are either listed on a national securities exchange or are
held of record by more than 2,000 holders if such stockholders receive only
shares of the surviving corporation or shares of any other corporation that are
either listed on a national securities exchange or held of record by more than
2,000 holders, plus cash in lieu of fractional shares of such corporations or
(c) to stockholders of a corporation surviving a merger if no vote of the
stockholders of the surviving corporation is required to approve the merger
under certain provisions of Delaware law.
The limitations on the availability of appraisal rights under California law
are different from those under Delaware law. Shareholders of a California
corporation whose shares are listed on a national securities exchange or on a
list of over-the-counter margin stocks (typically including Nasdaq National
Market stocks) issued by the Board of Governors of the Federal Reserve System
generally do not have such appraisal rights unless the holders of at least five
percent (5%) of the class of outstanding shares claim the right or the
corporation or any law restricts the transfer of such shares. Appraisal rights
are also unavailable if the shareholders of a corporation or the corporation
itself, or both, immediately prior to the reorganization will own immediately
after the reorganization equity securities constituting more than five-sixths of
the voting power of the surviving or acquiring corporation or its parent entity
(as will be the case in the Reincorporation Proposal). Appraisal or dissenters'
rights are, therefore, not available to shareholders of RasterOps with respect
to the Reincorporation Proposal. California law generally affords appraisal
rights in sale of asset reorganizations.
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DISSOLUTION. Under California law, shareholders holding fifty percent (50%)
or more of the total voting power may authorize a corporation's dissolution,
with or without the approval of the corporation's board of directors, and this
right may not be modified by the articles of incorporation. Under Delaware law,
unless the board of directors approves the proposal to dissolve, the dissolution
must be approved by all the stockholders entitled to vote thereon. Only if the
dissolution is initially approved by the board of directors may it be approved
by a simple majority of the outstanding shares of the corporation's stock
entitled to vote. In the event of such a board-initiated dissolution, Delaware
law allows a Delaware corporation to include in its certificate of incorporation
a supermajority (greater than a simple majority) voting requirement in
connection with dissolutions. Truevision's Certificate of Incorporation contains
no such supermajority voting requirement, however, and a majority of the
outstanding shares entitled to vote, voting at a meeting at which a quorum is
present, would be sufficient to approve a dissolution of Truevision that had
previously been approved by its Board of Directors.
APPLICATION OF THE GENERAL CORPORATION LAW OF CALIFORNIA TO DELAWARE
CORPORATIONS
Under Section 2115 of the California General Corporation Law, certain
foreign corporations (i.e., corporations not organized under California law) are
placed in a special category if they have characteristics of ownership and
operation which indicate that they have significant contacts with California. So
long as a Delaware or other foreign corporation is in this special category, and
it does not qualify for one of the statutory exemptions, it is subject to a
number of key provisions of the California General Corporation Law applicable to
corporations incorporated in California. Among the more important provisions are
those relating to the election and removal of directors, cumulative voting,
classified boards of directors, director duty of care standards, standards of
liability and indemnification of directors, distributions, dividends and
repurchases of shares, shareholder meetings, approval of certain corporate
transactions, dissenters and appraisal rights and inspection of corporate
records. See "Significant Differences Between the Corporation Laws of California
and Delaware" above.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a discussion of certain federal income tax considerations
that may be relevant to holders of RasterOps Common Stock who receive Truevision
Common Stock in exchange for their RasterOps 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
RasterOps shareholders, such as dealers in securities, or those RasterOps
shareholders 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 RasterOps Common Stock. Furthermore, no foreign, state, or local tax
considerations are addressed herein. IN VIEW OF THE VARYING NATURE OF SUCH TAX
CONSEQUENCES, EACH SHAREHOLDER 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 RasterOps Common
Stock upon receipt of Truevision Common Stock pursuant to the Proposed
Reincorporation;
(b) The aggregate tax basis of the Truevision Common Stock received by
each shareholder in the Proposed Reincorporation should be equal to the
aggregate tax basis of the RasterOps Common Stock surrendered in exchange
therefor; and
(c) The holding period of the Truevision Common Stock received by each
shareholder of RasterOps should include the period for which such
shareholder held the RasterOps Common Stock surrendered in exchange
therefor, provided that such RasterOps Common Stock was held by the
shareholder as a capital asset at the time of Proposed Reincorporation.
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(d) The Company should not recognize gain or loss for federal income tax
purposes as a result of the Proposed Reincorporation, and Truevision should
succeed, without adjustment, to the federal income tax attributes of
RasterOps.
The Company has not requested a ruling from the Internal Revenue Service
(the "IRS") with respect to the federal income tax consequences of the Proposed
Reincorporation under the Code. The Company will, however, receive an opinion
from legal counsel substantially to the effect that the Proposed Reincorporation
will qualify as a reorganization within the meaning of Section 368(a) of the
Code (the "Tax Opinion"). The Tax Opinion will neither bind the IRS nor preclude
it from asserting a contrary position. In addition, the Tax Opinion will be
subject to certain assumptions and qualifications and will be based upon the
truth and accuracy of representations made by Truevision and RasterOps.
PROPOSAL FOUR
AMENDMENT OF THE AMENDED 1988 INCENTIVE STOCK PLAN
The Company's Amended 1988 Incentive Stock Plan (the "Option Plan"), was
approved by the Board of Directors in February 1988 and by the Shareholders in
December 1988. Amendments increasing the number of shares reserved for issuance
under the Option Plan were adopted by the Board of Directors and ratified by the
Shareholders in each of 1989, 1990, 1991, 1992, 1993 and 1994, increasing the
number of shares reserved for issuance thereunder to a total of 2,526,300
shares.
In September 1995, the Board approved an amendment increasing the number of
shares reserved for issuance under the Option Plan by an additional 515,000
shares, for an aggregate of 3,041,300 shares reserved for issuance under the
Option Plan. The Shareholders are requested to approve this amendment to the
Option Plan.
As of August 25, 1995 options to purchase 577,043 shares had been exercised,
options to purchase 1,523,710 shares held by 161 optionees were outstanding at a
weighted average per share exercise price of $3.792 per share and 425,547 shares
remained available for future grants under the Option Plan (not including the
proposed additional shares).
The affirmative vote of the holders of a majority of the shares represented,
in person or by proxy, and voting at the Annual Meeting (which shares voting
affirmatively also constitute at least a majority of the required quorum) will
be required to approve the amendment to the Option Plan. Abstentions will be
counted toward the number of shares represented and voting at the meeting.
Broker non-votes will be disregarded.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE
AMENDMENT TO THE AMENDED 1988 INCENTIVE STOCK PLAN.
SUMMARY OF THE AMENDED 1988 INCENTIVE STOCK PLAN
GENERAL. The Amended 1988 Incentive Stock Plan gives the Board, or a
committee which the Board appoints, authority to grant options to purchase
Common Stock and stock purchase rights. Options granted under the Option Plan
may be either "incentive stock options" as defined in Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"), or nonstatutory stock
options, at the discretion of the Board or its committee.
PURPOSES. The purposes of the Option Plan are to attract and retain the
best available personnel for the Company, to provide additional incentive to the
employees of the Company and to promote the success of the Company's business.
ADMINISTRATION. The Option Plan is administered by the Board or a committee
of the Board in compliance with Rule 16b-3 so as to qualify the Option Plan for
exemption from Section 16(b) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act").
ELIGIBILITY. The Option Plan provides that stock options and stock purchase
rights may be granted to employees (including officers and directors who are
also employees) and consultants of the
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Company and its parent or subsidiaries. Incentive stock options may be granted
only to employees. The Board or a committee of the Board selects the
participants and determines the number of shares to be subject to each stock
option or stock purchase right.
EXERCISE PRICE. The per share exercise price for shares issued pursuant to
options or stock purchase rights granted under the Option Plan is determined by
the Board or its committee and must not be less than 100% of the fair market
value of the Common Stock, in the case of incentive stock options, and 85% of
the fair market value of the Common Stock, in the case of nonstatutory stock
options or stock purchase rights, on the date of the grant. Fair market value
per share is the closing price as reported on the Nasdaq National Market on the
date of grant. Incentive and nonstatutory stock options granted to Shareholders
owning more than 10% of the Company's outstanding stock are subject to the
additional restriction that the exercise price must be at least 110% of the fair
market value on the date of grant.
OPTIONS. Each option is evidenced by a written agreement between the
Company and the person to whom such option is granted. The Board or its
committee determines the terms of the options granted under the Option Plan.
Each option shall be designated either an incentive stock option or a
nonstatutory stock option except that, to the extent that the aggregate fair
market value of the shares with respect to which options designated as incentive
stock options are exercisable for the first time by an optionee during any
calendar year (under all plans of the Company) exceeds $100,000, such excess
options shall be treated as nonstatutory stock options. Options granted before
November 1988 typically vest ratably each month over a three-year period, and
options granted after November 1988 typically vest 25% after one year and
ratably each month over the next three years. Pursuant to the Option Plan,
options may be subject to the following additional terms and conditions.
(a) TERM OF OPTIONS. The term of each option granted under the Option
Plan is ten years from the date of grant in the case of incentive stock
options and ten years and one day in the case of nonstatutory options,
unless a shorter period is provided in the stock option agreement. However,
options granted to an optionee who, at the time of the grant, owns stock
representing more than ten percent (10%) of the Company's outstanding stock,
expire five years from the date of grant in the case of incentive stock
options and five years and one day from the date of grant in the case of
nonstatutory options.
(b) EXERCISE OF OPTION. The Optionee must earn the right to exercise
the option by continuing to work for the Company. The Board or a committee
of the Board may determine when options are exercisable.
An option is exercised by giving written notice of exercise to the
Company specifying the number of full shares of Common Stock to be purchased
and tendering payment of the purchase price to the Company. The method of
payment of the exercise price of the shares purchased upon exercise of an
option is determined by the Board or its committee.
(c) TERMINATION OF EMPLOYMENT. If an optionee's employment or
consulting relationship with the Company is terminated for any reason other
than death or permanent disability, options outstanding under the Option
Plan may be exercised within 30 days (or such other period of time as
determined by the Board, not to exceed certain limits) after the date of
such termination to the extent the options were exercisable on the date of
termination.
(d) DISABILITY. If an optionee's employment by the Company terminates
because of total and permanent disability, options outstanding under the
Option Plan may be exercised within six months (or such other period of time
as determined by the Board not to exceed certain limits, but in no event
later than the date of expiration of the term of such option) after
termination to the extent such options were exercisable at the date of
termination.
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(e) DEATH OF OPTIONEE. If an optionee should die while employed by the
Company, options may be exercised at any time within six months (or such
other period of time as determined by the Board not to exceed certain
limits, but in no event later than the date of expiration of the term of
such option) after death to the extent the options were exercisable at the
date of death.
STOCK PURCHASE RIGHTS. Each stock purchase right is evidenced by a written
agreement between the Company and the person to whom such right is granted. The
board or its committee determines the terms relating to the right, including the
time within which such person must accept the offer to purchase, which shall in
no event exceed six months from the date of grant. Unless the Board determines
otherwise, the Company will have a right to repurchase shares in the event of
termination of the purchaser's employment. Such repurchase right will lapse at a
rate determined by the Board.
OTHER PROVISIONS. The option or stock purchase right may contain other
terms, provisions and conditions not inconsistent with the Option Plan as may be
determined by the Board or its committee.
NON-TRANSFERABILITY OF OPTIONS AND STOCK PURCHASE RIGHTS. The options and
stock purchase rights may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the laws of
descent or distribution and may be exercised, during the lifetime of the
optionee or purchaser, only by such optionee or purchaser.
ADJUSTMENT UPON CHANGES IN CAPITALIZATION OR MERGER. In the event any
change is made in the Company's capitalization, such as a stock split or reverse
stock split, appropriate adjustment shall be made to the purchase price and to
the number of shares subject to the stock option or stock purchase right. In the
event of the proposed dissolution or liquidation of the Company, all options
will terminate immediately prior to the consummation of such action, unless
otherwise provided by the Board. In the event of a proposed sale of all or
substantially all of the assets of the Company, or the merger of the Company
with or into another corporation, the successor corporation shall assume all
outstanding options or substitute new options therefor. If the successor
corporation refuses to assume or substitute for outstanding options, the Board
shall provide for the exercisability of such options to accelerate in full.
AMENDMENT AND TERMINATION OF THE OPTION PLAN. The Board may amend or
terminate the Option Plan from time to time in such respects as the Board may
deem advisable without approval of the Shareholders; provided, however, that
Shareholder approval of amendments to the Option Plan shall only be required to
the extent necessary to comply with Rule 16b-3 or Section 422 of the Code (or
any other applicable law or regulation).
In any event, the Option Plan shall terminate in 1998. Any options or stock
purchase rights outstanding under the Option Plan at the time of its termination
shall remain outstanding until they expire by their terms.
TAX INFORMATION
Options granted under the Option Plan may be either "incentive stock
options," as defined in Section 422 of the Code, or nonstatutory options.
An optionee who is granted an incentive stock option will not recognize
taxable income either at the time the option is granted or upon its exercise,
although the exercise may subject the optionee to the alternative minimum tax.
Upon the sale or exchange of the shares more than two years after grant of the
option and one year after exercising the option, any gain or loss will be
treated as long-term capital gain or loss. If these holding periods are not
satisfied, the optionee will recognize ordinary income at the time of sale or
exchange equal to the difference between the exercise price and the lower of (i)
the fair market value of the shares at the date of the option exercise or (ii)
the sale price of the shares. A different rule for measuring ordinary income
upon such a premature disposition may apply if the optionee is also an officer,
director, or 10% Shareholder of the Company. The Company will be entitled to a
deduction in the same amount as the ordinary income recognized by the optionee.
Any
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gain or loss recognized on such a premature disposition of the shares in excess
of the amount treated as ordinary income will be characterized as long-term or
short-term capital gain or loss, depending on the holding period.
All other options which do not qualify as incentive stock options are
referred to as nonstatutory options. An optionee will not recognize any taxable
income at the time he or she is granted a nonstatutory option. However, upon its
exercise, the optionee will recognize taxable income generally measured as the
excess of the then fair market value of the shares purchased over the purchase
price. Any taxable income recognized in connection with an option exercise by an
optionee who is also an employee of the Company will be subject to tax
withholding by the Company. Upon resale of such shares by the optionee, any
difference between the sales price and the optionee's purchase price, to the
extent not recognized as taxable income as described above, will be treated as
long-term or short-term capital gain or loss, depending on the holding period.
The Company will be entitled to a tax deduction in the same amount as the
ordinary income recognized by the optionee with respect to shares acquired upon
exercise of a nonstatutory option.
The foregoing summary of the effects of federal income taxation upon the
participant and the Company with respect to the purchase of shares under the
Option Plan does not purport to be complete, and reference should be made to the
applicable provisions of the Code. In addition, this summary does not discuss
the tax implications of an optionee's death or the provisions of the income tax
laws of any municipality, state or foreign country in which the participant may
reside.
PROPOSAL FIVE
APPROVAL OF THE AMENDMENT TO
THE AMENDED AND RESTATED 1991 DIRECTOR OPTION PLAN
In September 1995, the Board approved an amendment increasing the number of
shares reserved for issuance under the Amended and Restated 1991 Director Option
Plan (the "Director Option Plan") by an additional 100,000 shares, for an
aggregate of 250,000 shares reserved for issuance under the Director Option
Plan. The Shareholders are requested to approve this amendment to the Director
Option Plan.
As of August 25, 1995 no options to purchase shares had been exercised,
options to purchase 105,000 shares held by six (6) optionees were outstanding at
a weighted average per share exercise price of $5.37 per share and 45,000 shares
remained available for future grants under the Director Option Plan (not
including the proposed additional shares).
The affirmative vote of the holders of a majority of the shares represented
in person or by proxy and voting at the Annual Meeting (which shares voting
affirmatively also constitute at least a majority of the required quorum) will
be required to approve the amendment to the Director Option Plan. Abstentions
will be counted toward the number of shares represented and voting at the
meeting. Broker non-votes will be disregarded.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE
AMENDMENT TO THE AMENDED AND RESTATED 1991 DIRECTOR OPTION PLAN.
Each of the non-employee Directors of the Company has a personal interest in
the approval by the Shareholders of the proposed amendment to the Director
Option Plan, as such amendment will result in additional options to purchase
shares which may be granted to non-employee Directors under the Director Option
Plan.
SUMMARY OF THE DIRECTOR OPTION PLAN
The Director Option Plan was originally adopted by the Board of Directors in
July 1991 and was subsequently amended by the Board in October 1991 for the
purpose of granting new options to non-employee directors upon the surrender and
cancellation of options with higher exercise prices previously granted to such
non-employee directors in July 1991. The Director Option Plan was again
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amended by the Board in July 1992 to provide for the automatic annual grant of
an option to purchase 2,500 shares on the date of the Company's Annual Meeting
of Shareholders (the "Annual Meeting") to each non-employee director who is a
member of the Board immediately before such Annual Meeting and remains a member
of the Board immediately after such Annual Meeting, for so long as such director
remains a member of the Board, in lieu of a prior quadrennial grant of an option
to purchase 10,000 shares, and an amendment for the purpose of granting new
options to non-employee directors with exercise prices of $11.25 per share upon
the surrender and cancellation of options with exercise prices of $13.50 per
share previously granted to such non-employee directors in October 1991.
The essential features of the Director Option Plan are outlined below.
PURPOSE. The purposes of the Director Option Plan are to attract and retain
the best available personnel for service as directors of the Company, to provide
additional incentive to the non-employee directors and to encourage their
continued service on the Board.
ADMINISTRATION. The Director Option Plan is designed to work automatically
and not to require administration. However, to the extent administration is
necessary, it will be provided by the board of Directors of the Company. The
interpretation and construction of any provision of the Director Option Plan by
the Board shall be final and conclusive.
ELIGIBILITY FOR AND EXERCISABILITY OF OPTIONS. The Director Option Plan
provides for the grant of nonstatutory stock options to non-employee directors
of the Company. Under the terms of the plan as amended by the Board in October
1991, (i) non-employee directors who were members of the Board on July 25, 1991
("Current Outside Directors") received an option on such date to purchase 10,000
shares of Common Stock, which options were to become exercisable at the rate of
25% per year for four years following July 1, 1991, (ii) each non-employee
director who becomes a member of the Board after July 25, 1991, will receive an
option on the date that such director first becomes a member of the Board to
purchase 10,000 shares of Common Stock, which option shall become exercisable at
the rate of 25% per year for four years following the date of grant and (iii)
each non-employee director who is a member of the Board immediately before the
Company's Annual Meeting (as defined above) and remains a member of the Board
immediately after such Annual Meeting, shall receive on the date of the Annual
Meeting, for so long as such non-employee director remains a member of the
Board, an additional option to purchase 2,500 shares of Common Stock subject to
four year vesting from the date of grant similar to the vesting provisions set
forth above.
In accordance with the terms of the plan as originally adopted by the Board
in July 1991, each of the Current Outside Directors (Messrs. Bregman, Kidd,
Sarlo and Tompkins) received an option (an "Initial Stock Option") on July 26,
1991, to purchase 10,000 shares of Common Stock on July 26, 1991, as reported on
the Nasdaq National Market). Following a decline in the price of the Company's
Common Stock that occurred soon after the grants of the Initial Stock Options,
the Board approved an amendment to the Plan on October 14, 1991 (the "First
Amendment") for the purpose of granting new options to the Current Outside
Directors with exercise prices equal to the fair market value of the Company's
Common Stock on such dates (which exercise prices are less than the exercise
prices of the Initial Stock Options). In accordance with the terms of the First
Amendment, each Current Outside Director received on October 14, 1991, an option
(a "Second Stock Option") to purchase 10,000 shares of Common Stock, which
option becomes exercisable at the rate of 25% per year for four years following
July 1, 1991, at an exercise price of $13.50 per share (the closing price of the
Company's Common Stock on October 14, 1991, as reported on the Nasdaq National
Market). Upon issuance of the Second Stock Options, the Initial Stock Options
were canceled. Except as set forth in this paragraph, all provisions of the plan
as adopted by the Board in July 1991 remained in full force and effect following
the First Amendment. In July 1992, the Board of Directors repriced certain
options which had been previously granted by the Company, including all options
that had been granted under the Director Option Plan at exercise prices above
$11.25 such that the new exercise price of such options is $11.25 (the closing
price of the Company's Common Stock on July 22, 1992, as reported on the Nasdaq
National Market).
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TERMS OF OPTIONS. Options granted under the Director Option Plan have a
term of ten years. Each option is evidenced by a director option agreement
between the Company and the director to whom such option is granted.
Rule 16b-3. Options granted to directors must comply with the applicable
provisions of Rule 16b-3 or any successor thereto and shall contain such
additional conditions or restrictions as may be required thereunder to qualify
for the maximum exemption from Section 16 of the Exchange Act with respect to
Director Option Plan transactions.
CONSIDERATION. The consideration to be paid for shares to be issued upon
exercise of an option, including the method of payment, shall be determined by
the board and may consist entirely of (i) cash, (ii) check or (iii) such other
consideration and method of payment for the issuance of shares as approved by
the Board to the extent permitted under applicable law.
OPTION PRICE. The option price under the Director Option Plan is 100% of
the fair market value of the Company's Common Stock on the date of grant. Fair
market value per share is the closing price as reported on the Nasdaq National
Market System on the date of grant.
TERMINATION OF STATUS AS A DIRECTOR THROUGH DEATH, DISABILITY OR
OTHERWISE. Under the Director Option Plan, in the event an optionee ceases to
serve as a director of the Company for any reason other than death or total and
permanent disability, an option may thereafter be exercised, to the extent it
was exercisable at the date of such termination, for six months. If an
optionee's service as a director of the Company is terminated as a result of the
optionee's permanent and total disability, the option will be exercisable for 12
months following such termination, but only to the extent it was exercisable at
the date of termination. If an optionee's services as a director of the Company
is terminated by reason of the optionee's death, the option will be exercisable
by the optionee's estate or successor for twelve months following death, but
only to the extent it was exercisable at the date of death. However, in no event
may an option be exercised once its term has expired.
NONTRANSFERABILITY OF OPTIONS. Options granted pursuant to the Director
Option Plan are nontransferable by the optionee, other than by will or by the
laws of descent and distribution, and may be exercised, during the lifetime of
the optionee, only by the optionee.
ADJUSTMENT UPON CHANGES IN CAPITALIZATION OR MERGER. In the event any
change is made in the Company's capitalization, such as stock split or reverse
stock split, appropriate adjustment shall be made to the purchase price and to
the number of shares subject to the stock option. In the event of the proposed
dissolution or liquidation of the Company, all options will terminate
immediately prior to the consummation of such action. The Board shall declare
that all stock options shall terminate as of such date and give each optionee
the right to exercise his stock option as to all of the stock subject to the
option, including shares as to which the stock option would not otherwise be
exercisable. Under the Director Option Plan as currently in effect, in the event
of a proposed sale of all or substantially all of the assets of the Company, or
the merger of the Company with or into another corporation, the successor
corporation shall assume all outstanding options or substitute new options
therefor. However, if such successor corporation or a parent or subsidiary of
such successor corporation does not assume or substitute an equivalent option,
then the optionee shall have the right to exercise the option as to all stock
subject to the option, including shares as to which the option would not
otherwise be exercisable. In the event that the proposed amendment to the
Director Option Plan that is being submitted to the Shareholders hereby is
approved, certain mergers or sales of all or substantially all of the assets of
the Company will result in acceleration of the exercisability of the option, as
more fully set forth above.
AMENDMENT AND TERMINATION. The Board may amend, alter, suspend or
discontinue the Director Option Plan at any time, but such amendment,
alteration, suspension or discontinuation shall not adversely affect any stock
option then outstanding under the Director Option Plan, without the
24
<PAGE>
consent of the holder of such option. To the extent necessary and desirable to
comply with Rule 16b-3 (or any other applicable law or regulation), the Company
shall obtain Shareholder approval of any amendment to the Director Option Plan
in such a manner and to such a degree as required.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS. The following is a brief summary
of the federal income tax consequences of transactions under the Director Option
Plan based on federal securities and income tax laws currently in effect. This
summary is not intended to be exhaustive and does not describe foreign, state or
local tax consequences.
Options granted under the Director Option Plan are nonstatutory options.
Because the optionee is a director of the Company, the date of taxation (and the
date of measurement of taxable ordinary income) may be deferred unless the
optionee files an election under Section 83(b) of the Code. Otherwise the
federal income taxation will be the same as described for nonstatutory stock
options in the Amended 1988 Incentive Stock Plan portion of this Proxy
Statement. See the discussion of nonstatutory stock options under "Proposal Four
- -- Amendment of the Amended 1988 Incentive Stock Plan -- Tax Information."
DIRECTOR OPTION GRANTS IN FISCAL YEAR 1995. In fiscal year ended July 1,
1995, non-employee directors of the Company, as a group, received options to
purchase 62,500 shares of the Company's Common Stock (including 25,000 shares
subject to Shareholder approval of Proposal Six below).
PROPOSAL SIX
APPROVAL OF THE AMENDMENT TO THE
AMENDED AND RESTATED 1991 DIRECTOR OPTION PLAN
At the Annual Meeting, the Shareholders are being asked to approve an
amendment to the Company's Amended and Restated 1991 Director Option Plan (the
"Director Option Plan") to provide for a one-time automatic grant of an option
to purchase 25,000 shares of Common Stock to non-employee directors who become
the Chairman of the Board on or after December 16, 1994.
The proposed amendment was approved by the Board of Directors on January 26,
1995 (with Mr. Bregman, the current Chairman of the Board, abstaining). Mr.
Bregman became Chairman of the Board on December 16, 1994 and therefore received
an option to purchase 25,000 shares of Common Stock at an exercise price equal
to the fair market value of the Common Stock on December 16, 1994 ($2.25 per
share), which will become effective on Shareholder approval.
As of August 25, 1995, options to purchase 105,000 shares had been granted
with a weighted average per share exercise price of $5.37, and zero shares had
been exercised under the Director Option Plan.
The affirmative vote of the holders of a majority of the shares represented
in person or by proxy and voting at the Annual Meeting (which shares voting
affirmatively also constitute at least a majority of the required quorum) will
be required to approve the amendment to the Director Option Plan. Abstentions
will be counted toward the number of shares represented and voting at the
meeting. Broker non-votes will be disregarded.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE
AMENDMENT TO THE 1991 DIRECTOR OPTION PLAN.
Each of the non-employee Directors of the Company has a personal interest in
the approval by the Shareholders of the proposed amendment to the Director
Option Plan, as such amendment could result in such non-employee directors being
granted such option if such non-employee directors become the Chairman of the
Board of Directors. Mr. Bregman has a personal interest in the approval by the
Shareholders of the proposed amendment to the Director Option Plan, as such
amendment would result in Mr. Bregman receiving an Option as set forth above.
25
<PAGE>
PROPOSAL SEVEN
RATIFICATION OF THE APPOINTMENT OF PRICE WATERHOUSE LLP
AS INDEPENDENT ACCOUNTANTS FOR THE
FISCAL YEAR ENDING JUNE 29, 1996
Price Waterhouse LLP has been the independent accountants for the Company
since 1988 and, upon recommendation of the Audit Committee, their appointment as
independent accountants for the 1996 fiscal year has been approved by the Board
of Directors, subject to ratification by the Shareholders.
Shareholder ratification of the selection of Price Waterhouse LLP as the
Company's independent accountants is not required by the Company's Bylaws or
otherwise. However, the Board is submitting the selection of Price Waterhouse
LLP to the Shareholders for ratification as a matter of good corporate practice.
If the Shareholders fail to ratify the selection, the Audit Committee and the
Board of Directors will reconsider whether or not to retain that firm. Even if
the selection is ratified, the Audit Committee and the Board in their discretion
may direct the appointment of different independent accountants at any time
during the year if they determine that such a change would be in the best
interests of the Company and its Shareholders.
The affirmative vote of the holders of a majority of the shares represented,
in person or by proxy, and voting at the Annual Meeting will be required to
ratify the appointment of Price Waterhouse LLP. Abstentions will be counted
toward the number of shares represented and voting at the meeting. Broker
non-votes will be disregarded.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR
RATIFICATION OF THE APPOINTMENT OF PRICE WATERHOUSE LLP AS THE COMPANY'S
INDEPENDENT ACCOUNTANTS FOR THE FISCAL YEAR ENDING JUNE 29, 1996.
Representatives of Price Waterhouse LLP are expected to be present at the
meeting and will be given an opportunity to make a statement, if they so desire,
and to answer appropriate questions.
26
<PAGE>
MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors of the Company held a total of eleven (11) meetings
during fiscal year 1995. No director attended fewer than 75% of the aggregate of
all meetings of the Board of Directors, or its committees on which he served,
during the time each director was a member of the Board of Directors. The Board
of Directors has an Audit Committee and a Compensation Committee. It does not
have a Nominating Committee or a committee performing the functions of a
Nominating Committee.
The Audit Committee currently consists of Walter W. Bregman and Conrad J.
Wredberg. The members of the Audit Committee during fiscal year 1995 were Walter
W. Bregman, Daniel D. Tompkins, Jr. and Conrad J. Wredberg. The Audit Committee
met four (4) times during fiscal year 1995. The Audit Committee approves the
engagement of the Company's independent accountants and services to be performed
by such independent accountants and reviews the Company's accounting principles
and its system of internal accounting controls.
The Compensation Committee currently consists of Walter W. Bregman, Gordon
Eubanks, Jr. and William H. McAleer. The members of the Compensation Committee
during fiscal year 1995 were Walter W. Bregman, Daniel D. Tompkins, Jr. and,
beginning January 1995, Kieth E. Sorenson. The Compensation Committee met five
(5) times during fiscal year 1995. The Compensation Committee reviews and
approves the Company's executive compensation policy, makes recommendations
concerning the Company's employee benefit policies and approves salaries of and
bonuses and option grants to employees, including officers and eligible
directors.
COMPENSATION OF DIRECTORS
Directors who are not currently receiving compensation as officers or
employees of the Company or any of its affiliates are paid a fee of $1,500 per
meeting of the Board of Directors, plus reasonable expenses pertaining to their
service as directors. These fees are not paid for telephonic meetings of the
Board of Directors. In addition, all non-employee directors of the Company
participate in the 1991 Director Option Plan.
27
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock as of August 25, 1995 by (i) each person
who is known by the Company to be the beneficial owner of more than 5% of the
Company's Common Stock, (ii) each of the Company's Directors, the Chief
Executive Officer, three other highly compensated executive officers for fiscal
year 1995 and two highly paid former executive officers of the Company who
received compensation during fiscal year 1995, and (iii) all Directors and
executive officers as a group.
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY PERCENT
NAME OF BENEFICIAL OWNER OWNED (1) OF CLASS
- --------------------------------------------- ------------ --------
<S> <C> <C>
Scitex Corporation Ltd. (2) 3,354,645 24.1%
P.O. Box 330
46103 Herzlia B, Israel
Entities affiliated with 21st Century 930,900 7.4%
Communications Partners, L.P. (3)
767 Fifth Avenue
45th Floor
New York, New York 10153
Louis J. Doctor (4) 192,622 1.5%
Carl C. Calabria (5) 162,188 1.3%
R. John Curson 0 *
Robert J. O'Brien (6) 20,000 *
Paul J. Smith (7) 75,863 *
Michael R. O'Leary (8) 0 *
Walter W. Bregman (9) 25,350 *
Gordon E. Eubanks, Jr. (10) 0 *
William H. McAleer (11) 3,500 *
Kieth E. Sorenson 5,588 *
Daniel D. Tompkins (12) 50,337 *
Conrad J. Wredberg (13) 8,125 *
All executive officers and directors as a
group
(19 persons) (4)(5)(7)(9)(12)(13)(14) 569,990 4.5%
<FN>
- ------------------------
* Less than one percent (1%).
(1) Except as indicated in other notes to this table, each Shareholder listed
has sole voting and dispositive power with respect to the shares
beneficially owned, subject to applicable community property laws. As
required by regulations adopted by the Securities and Exchange Commission,
the calculations assume that the shares of Common Stock subject to options
or warrants or convertible securities that are exercisable or convertible
within sixty (60) days of August 25, 1995 are outstanding with respect to
the Shareholder who owns such options or warrants or convertible
securities, but not with respect to any other Shareholder.
(2) Includes 1,534,645 shares of Common Stock reserved or to be reserved for
issuance upon the exercise of a warrant.
(3) Includes shares held of record by 21st Century Communications Partners,
L.P. (631,175, including a warrant to purchase 126,235 shares), 21st
Century T-E Partners, L.P. (214,750, including a warrant to purchase 42,950
shares) and 21st Century Communications Foreign Partners, L.P. (84,975,
including a warrant to purchase 16,995).
(4) Includes 140,000 shares of Common Stock issuable pursuant to warrant
exercisable within 60 days.
(5) Includes 42,188 shares of Common Stock issuable pursuant to options
exercisable within 60 days.
</TABLE>
28
<PAGE>
<TABLE>
<S> <C>
(6) Mr. O'Brien commenced employment on December 12, 1994.
(7) Includes 67,333 shares of Common Stock issuable pursuant to options
exercisable within 60 days.
(8) Mr. O'Leary commenced employment on July 1, 1994 and ceased on December 30,
1994.
(9) Includes 9,375 shares of Common Stock issuable pursuant to options
exercisable within 60 days.
(10) Mr. Eubanks, Jr. became a Director effective January 26, 1995.
(11) Mr. McAleer became a Director effective January 26, 1995.
(12) Includes 9,375 shares of Common Stock issuable pursuant to options
exercisable within 60 days.
(13) Includes 5,625 shares of Common Stock issuable pursuant to options
exercisable within 60 days.
(14) Includes 299,313 shares of Common Stock issuable pursuant to options
exercisable within 60 days.
</TABLE>
29
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Mr. Wredberg, a Director of the Company, also served during a portion of the
fiscal year ending July 1, 1995 as president of AMI, which is a vendor of
various parts used by the Company in the manufacture of its products. Aggregate
sales to the Company by AMI during the fiscal year ended July 1, 1995 were
approximately $605,000.
Scitex became a five (5) percent shareholder of the Company pursuant to the
terms of a Private Placement Agreement (the "Private Placement Agreement")
between the Company and Scitex dated as of June 7, 1993, pursuant to which the
Company (i) issued and sold to Scitex 1,250,000 shares of the Company's Common
Stock at a purchase price of $8.00 per share, and (ii) granted to Scitex a
warrant (the "Warrant") to purchase additional shares of the Company's Common
Stock at a purchase price of $9.00 per share. The Warrant has a three year term
and allows Scitex to purchase an amount of the Company's Common Stock which,
when aggregated with all other Common Stock of the Company purchased by Scitex
directly from the Company, does not exceed 19.99% of the issued and outstanding
Common Stock of the Company at the time of such exercise. Based on the Company's
capitalization on August 25, 1995, Scitex would be entitled to purchase up to
1,534,645 shares of the Company's Common Stock pursuant to the exercise of the
Warrant. Scitex was also a purchaser of certain products manufactured by the
Company during the last completed fiscal year. Pursuant to the Private Placement
Agreement, the Company has also agreed to negotiate in good faith toward a
program of strategic cooperation with Scitex. Aggregate sales to Scitex by the
Company during the fiscal year ended July 1, 1995 were approximately $1,244,000.
30
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The Summary Compensation Table is intended to provide an easily understood
overview of executive compensation. The three-year table is designed to enable
Shareholders to understand clearly compensation for the last fiscal year and to
identify trends in the Company's compensation of its top managers. The Summary
Compensation Table includes individual compensation information on the Chief
Executive Officer, three other highly paid executive officers for fiscal year
1995 and two highly paid former executive officers of the Company who received
compensation during fiscal year 1995.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM COMPENSATION
----------------------------------------------- ------------------------------
OTHER ANNUAL ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) COMPENSATION ($)(1) OPTIONS (#) COMPENSATION ($)
- ---------------------------------------- ---- ---------- ------------ ------------------- ----------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Louis J. Doctor (2) 1995 124,052 0 1,000 400,000(3) 0
President & CEO 1994 0 0 0 0 0
1993 0 0 0 0 0
Carl C. Calabria 1995 157,250 0 1,000 150,000 39,369(5)
Sr. V.P. Engineering 1994 167,623 0 0 15,000 11,051(5)
1993 132,227 2,902(4) 0 50,000 0
R. John Curson 1995 140,000 0 4,000 140,000(6) 0
Sr. V.P. & CFO 1994 93,949 0 5,250 80,000 0
1993 0 0 0 0 0
Robert J. O'Brien (7) 1995 72,417 20,000(8) 19,750 100,000 0
Sr. V.P. Worldwide Sales 1994 0 0 0 0 0
1993 0 0 0 0 0
Inactive Former Executive (9)
Officers:
Paul J. Smith 1995 55,000 0 2,250 0 178,913
Former President & CEO 1994 220,000 0 9,000 30,000 0
1993 51,756 0 2,075 100,000 0
Michael R. O'Leary (10) 1995 70,833 0 3,000 50,000 36,223(11)
Former V.P. Sales 1994 0 0 0 0 0
1993 0 0 0 0 0
<FN>
- ------------------------
Footnotes:
(1) Represents in part an auto allowance for Mr. Curson, Mr. O'Brien, Mr. Smith
and Mr. O'Leary. Also represents 401(k) Company match for Mr. Doctor, Mr.
Calabria and Mr. O'Brien. The Company match began January 1, 1995 and is
$1,000.00 per individual.
(2) Mr. Doctor commenced employment with the Company on October 10, 1994.
(3) Issued warrant for 400,000 shares.
(4) Bonus amount is reported for the fiscal year in which earned and without
regard to when paid.
(5) Represents relocation allowance.
(6) Stock options of 80,000 shares were surrendered on November 10, 1994. A new
grant was issued for 140,000 shares on November 10, 1994.
(7) Mr. O'Brien commenced employment with the Company on December 12, 1994.
(8) Represents a bonus for accepting employment.
(9) Represents vacation payout of $13,913 and severance pay of $165,000.
(10) Mr. O'Leary commenced employment with the Company on July 1, 1994 and
terminated his employment relationship on December 30, 1994.
(11) Represents vacation payout of $2,890 and severance pay of $33,333.
</TABLE>
31
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
All stock options granted in the last fiscal year to the Chief Executive
Officer, three other highly paid executive officers for fiscal year 1995 and two
highly paid former executive officers who received compensation during fiscal
year 1995 are disclosed in the following table. This table discloses, for each
named executive, the gain or "spread" that would be realized if the options were
exercised on the expiration date, assuming that the Company's stock had
appreciated at the level indicated, compounded annually over the life of the
options.
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE
AT ASSUMED ANNUAL
INDIVIDUAL GRANTS RATES OF STOCK
---------------------------------------------------------- PRICE APPRECIATION
% OF TOTAL FOR OPTION
OPTIONS OPTIONS GRANTED TERMS (2)
GRANTED TO EMPLOYEES IN EXERCISE OR BASE EXPIRATION ------------------
NAME (#)(1) FISCAL YEAR PRICE ($/SH) DATE 5% ($) 10% ($)
- --------------------- ------- ----------------- ---------------- ---------- ------- ---------
<S> <C> <C> <C> <C> <C> <C>
Louis J. Doctor 400,000 23.7 $2.75 11/10/04 691,784 1,753,116
Carl C. Calabria 150,000 8.9 $2.75 11/10/04 259,419 657,419
R. John Curson 140,000 8.3 $2.75 11/10/04 242,124 613,591
Robert J. O'Brien 100,000 5.9 $2.75 11/10/04 172,946 438,279
Paul J. Smith 0 0 -- -- 0 0
Michael R. O'Leary 50,000 3.0 $3.75 08/02/04 117,918 298,827
<FN>
- ------------------------
Footnotes:
(1) Stock options are granted with an exercise price equal to the fair market
value of the Company's Common Stock on date of grant. Options under the
Company's 1988 Stock Option Plan generally become exercisable 25% one year
after issuance and 1/48th each month thereafter for 36 months. The term of
each option granted is the earlier of (i) ten years or (ii) 30 days after
termination of the holder. Mr. Doctor was granted a warrant to purchase
400,000 Shares of the Company's Common Stock. One hundred thousand of such
shares became exercisable on January 1, 1995. The remaining shares will
become exercisable at a rate of 6,666.67 per month, such that the warrant
will be fully exercisable on October 1, 1998.
(2) The 5% and 10% assumed rates of appreciation are derived from the rules of
the Securities and Exchange Commission and do not represent the Company's
estimate or projection of the future Common Stock price. In addition, the
price of the Company's Common Stock has to date appreciated significantly
beyond these levels, from $2.75 to $3.75 at the date the options were
granted to $9.50 on September 6, 1995. Current realizable value therefore
exceeds the amounts set forth above.
</TABLE>
32
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST
FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
This table discloses the aggregate dollar value realized upon exercise of
stock options in the last fiscal year by the Chief Executive Officer, three
other highly paid executive officers and two highly paid former executive
officers who received compensation during fiscal year 1995. For each named
executive, the table also includes the total number of unexercised options and
the aggregate dollar value of in-the-money unexercised options held at the end
of the last completed fiscal year, separately identifying the exercisable and
unexercisable options.
<TABLE>
<CAPTION>
NUMBER OF OPTIONS VALUE OF IN-THE-MONEY
OUTSTANDING OPTIONS AS OF JULY 1,
AS OF JULY 1, 1995 1995(1)
SHARES ACQUIRED -------------------------- --------------------------
NAME ON EXERCISE(#) VALUE REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ----------------------- ----------------- ----------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Louis J. Doctor (2) 0 0 140,000 260,000 420,000 780,000
Carl C. Calabria 0 0 39,480 175,520 2,539 456,836
R. John Curson 0 0 0 140,000 0 420,000
Robert J. O'Brien 0 0 0 100,000 0 300,000
Paul J. Smith 0 0 62,167 10,333 52,396 8,541
Michael R. O'Leary 0 0 0 0 0 0
<FN>
- ------------------------
(1) Valuations above for unexercised in-the-money options are based on the
difference between the option price and fair market value at July 1, 1995
($5.75 per share). Accordingly, an option is reported as having zero value
if the exercise price of the option equaled or exceeded the fair market
value of the Company's Common Stock at July 1, 1995. Since July 1, 1995,
the price per share of the Company's Common Stock has appreciated further
(to $9.50 per share on September 6, 1995). The actual values of
in-the-money options are therefore greater than those reflected above.
(2) Mr. Doctor was granted a warrant to purchase 400,000 Shares of the
Company's Common Stock. One hundred thousand of such shares became
exercisable on January 1, 1995. The remaining shares will become
exercisable at a rate of 6,666.67 per month, such that the warrant will be
fully exercisable on October 1, 1998.
</TABLE>
33
<PAGE>
RASTEROPS
TEN-YEAR OPTION REPRICINGS
<TABLE>
<CAPTION>
LENGTH OF
NUMBER OF ORIGINAL
SECURITIES MARKET PRICE OPTION TERM
UNDERLYING OF STOCK AT EXERCISE PRICE NEW REMAINING AT
OPTIONS TIME OF AT TIME OF EXERCISE DATE OF
NAME DATE REPRICED REPRICING REPRICING PRICE ($) REPRICING
- ------------------------- -------- ---------- ------------ -------------- --------- --------------
<S> <C> <C> <C> <C> <C> <C>
R. John Curson 11/10/94 60,000 2.750 7.625 2.750 9 yrs 28 days
11/10/94 20,000 2.750 5.125 2.750 9 yrs 182 days
Kieth E. Sorenson (1) 7/22/92 50,000 11.250 13.000 11.250 8 yrs 102 days
7/22/92 40,000 11.250 14.750 11.250 9 yrs 87 days
Suzanne W. Crocker (2) 7/22/92 25,000 11.250 12.000 11.250 9 yrs 123 days
Clement R. Confessore (3) 7/22/92 25,000 11.250 16.250 11.250 9 yrs 260 days
Amanda Pike (4) 10/14/91 50,000 13.500 22.750 13.500 9 yrs 131 days
Kent L. Robertson (5) 7/22/92 75,000 11.250 16.250 11.250 9 yrs 260 days
David Seltzer (6) 7/22/92 7,000 11.250 17.750 11.250 9 yrs 265 days
David Smith (7) 7/22/92 50,000 11.250 13.000 11.250 8 yrs 102 days
7/22/92 40,000 11.250 14.750 11.250 9 yrs 87 days
William E. Hansen (8) 7/22/92 10,000 11.250 13.000 11.250 8 yrs 102 days
7/22/92 5,000 11.250 14.750 11.250 9 yrs 87 days
Michael Maietta (9) 7/22/92 10,000 11.250 13.000 11.250 8 yrs 102 days
7/22/92 5,000 11.250 14.750 11.250 9 yrs 87 days
Susan Saul (10) 7/22/92 10,000 11.250 13.000 11.250 8 yrs 102 days
Perry Sarensen (11) 7/22/92 7,000 11.250 13.000 11.250 8 yrs 102 days
<FN>
- ------------------------
(1) Mr. Sorenson served as President at the time of repricing.
(2) Ms. Crocker served as Vice President of Marketing and Communications at the
time of repricing.
(3) Mr. Confessore served as Vice President of Operations at the time of
repricing.
(4) Ms. Pike served as Vice President of Marketing at the time of repricing.
(5) Mr. Robertson served as Executive Vice President, Chief Financial Officer
and Secretary at the time of repricing.
(6) Mr. Seltzer served as Controller at the time of repricing.
(7) Mr. Smith served as Vice President of Engineering at the time of repricing.
(8) Mr. Hansen served as Vice President of Materials Management at the time of
repricing.
(9) Mr. Maietta served as Vice President of Product Engineering at the time of
repricing.
(10) Ms. Saul served as Vice President of International Sales at the time of
repricing.
(11) Mr. Sarensen served as Director of Technical Support at the time of
repricing.
</TABLE>
34
<PAGE>
EMPLOYMENT AGREEMENTS
MR. LOUIS J. DOCTOR
In connection with RasterOps' employment of Mr. Doctor, the Company has
agreed to pay Mr. Doctor $170,000 per year and has agreed to grant Mr. Doctor a
warrant to purchase 400,000 shares of the Company's Common Stock (the
"Warrant"). One hundred thousand shares subject to the Warrant became
exercisable on January 1, 1995 and the remaining shares will become exercisable
at a rate of 6,666.67 shares per month thereafter such that the Warrant will be
fully exercisable on October 1, 1998. Upon a change of control of the Company,
the vesting period will accelerate and the warrant will thereupon become fully
exercisable. In addition, the Company has agreed that upon the occurrence of
such event, if Mr. Doctor becomes subject to the "golden parachute" provisions
of the Code by virtue of such change in control, the Company will reimburse Mr.
Doctor for any additional taxes owed upon the exercise of the Warrant.
MR. PAUL J. SMITH
The Company has an agreement with Mr. Smith which provided for his
employment at will, for a period ending on the earlier of (i) April 7, 1996, or
(ii) the date on which a notice of termination was tendered by either Mr. Smith
or the Company. Such notice was tendered on October 10, 1994. The agreement
provides for an initial annual base salary of $220,000, such performance bonuses
as the Board of Directors shall authorize, and participation in the employee
benefit plans and executive compensation programs maintained by the Company
which are applicable to other key executives of the Company. In the event of a
change in control of the Company, the unvested portion of any stock option held
by Mr. Smith under the Company's stock option plans will automatically
accelerate and Mr. Smith will have the right to exercise all or any portion of
such options, in addition to any portion of the options exercisable prior to
such event. For purposes of the agreement, a change of control is defined in a
substantially identical manner to the definition of change of control included
in the proposed amendment to the Director Option Plan. Pursuant to the
agreement, Mr. Smith has been retained as a consultant at his base salary and
benefits at the time of his departure until the earlier of (a) the date on which
Mr. Smith secures full-time employment, (b) 12 months from the date of
termination, or (c) a breach by Mr. Smith of certain obligations under the
agreement.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No current member of the Compensation Committee is an officer or employee of
the Company.
35
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
INTRODUCTION
During the fiscal year 1995, the Compensation Committee of the Board of
Directors consisted of Messrs. Bregman, Tompkins and, since January 1995,
Sorenson. All of the members of the Committee were outside Directors during
fiscal year 1995. The Compensation Committee establishes the general
compensation policies for the Company's executive officers.
PHILOSOPHY
The Compensation Committee believes that the Company must provide the
executive officers of the Company with compensation competitive with peer
companies to attract and retain experienced employees critical to the success of
the Company in meeting its performance and strategic objectives and to maximize
shareholder value. The Compensation Committee believes that the compensation of
the executive officers, including the Chief Executive Officer, should be related
to the Company's long-term performance. With respect to Section 162(m) of the
Code (which limits deductibility of executive compensation exceeding $1 million
per individual per year unless certain conditions are met), the Amended 1988
Incentive Stock Plan currently qualifies for a temporary exemption from Section
162(m), and the Company currently intends to take steps to secure a permanent
exemption. The Company has not taken any steps to qualify any other compensation
plans for exemptions from Section 162(m), although it has entered into an
agreement with its Chief Executive Officer to compensate him in the event he is
adversely affected by Section 162(m). See "Compensation of Chief Executive
Officer," below. The Compensation Committee will continue to evaluate its other
compensation plans in light of Section 162(m).
COMPENSATION PLANS
For executive officers, compensation is comprised of three elements: Base
Compensation, Cash Incentive Compensation and Long-term Incentive Compensation.
BASE COMPENSATION is established by reviewing the salaries of executive
officers of comparable-sized peer companies, the Company's financial performance
during the past year and individual performance of the executives during the
past year. The Company generally attempts to compensate its executive officers
at or above the amounts paid to employees with similar levels of responsibility
at comparably-sized peer companies. Factors relating to the Company's financial
performance that may be relevant to increasing or decreasing base salary include
revenues and earnings. Factors relating to individual performance that are
assessed in setting base compensation vary based on particular duties and areas
of responsibility of the individual officer. The establishment of base
compensation involves a subjective assessment and weighing of the foregoing
criteria and is not based on any specific formula.
To implement the Compensation Committee's philosophy of rewarding the
Company's executive officers based upon the long-term performance of the
Company, during fiscal year 1995, the Compensation Committee offered to award
additional incentive stock options to those executive officers who agreed to a
reduction in their base compensation. The Compensation Committee believes that
reorienting the compensation package received by the Company's executive
officers toward the long-term success of the Company is in the best interests of
the Company and its Shareholders. In fiscal 1995, the Compensation Committee
agreed to adjust the price of an executive officer's stock options from $7.625
and $5.125 to $2.750. The Committee discussed the alternatives available to it,
including providing for additional options, and determined that the repricing
was in the best interests of the shareholders.
CASH INCENTIVE COMPENSATION is directly related to the Company's achievement
of revenue and earnings goals. Early in each fiscal year, the Compensation
Committee establishes specified targets, generally with respect to revenues and
earnings and in certain cases with respect to the items based on a particular
executive officer's duties and areas of responsibility, and provides for bonuses
to be paid
36
<PAGE>
based on the Company's performance against such targets. During fiscal 1995,
because the Company did not meet a minimum established earnings level, no cash
incentive payments were made to executives.
LONG-TERM INCENTIVE COMPENSATION is comprised of stock options which is the
Company's only long-term compensation element. This program is intended to
provide additional incentives to the executive officers to maximize shareholder
value. All options are granted at the current market price and utilize vesting
periods which encourage executive officers to remain with the Company. Equity
compensation is granted based on the Compensation Committee's judgment in each
case based on the individual circumstances of each executive officer.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
Mr. Doctor was hired as the Company's Chief Executive Officer ("CEO") during
fiscal 1995, and his compensation was established based on the above factors.
Mr. Doctor's base salary ($170,000 per year) was set approximately at the level
consistent with other Chief Executive Officers at comparatively-sized, peer
companies. In addition and consistent with the Compensation Committee's
philosophy, Mr. Doctor was granted a warrant to purchase 400,000 shares of
Common Stock in order to orient his compensation package toward the increase of
Shareholder value rather than predominantly base salary. In connection with the
grant of the warrant, the Compensation Committee approved a provision in Mr.
Doctor's employment agreement obligating the Company to reimburse Mr. Doctor for
any additional taxes owed by Mr. Doctor beyond ordinary income taxes.
THE MEMBERS OF THE COMPENSATION COMMITTEE FOR FISCAL YEAR 1995
Walter W. Bregman
Daniel D. Tompkins, Jr.
Kieth E. Sorenson
(From January 1995)
37
<PAGE>
PERFORMANCE GRAPH
The Securities and Exchange Commission requires a comparison on an indexed
basis of cumulative total shareholder return for the Company, a relevant broad
equity market index and a published industry or line-of-business index.
Cumulative total shareholder return represents share value appreciation assuming
dividend reinvestment. The Common Stock of the Company is traded on the Nasdaq
National Market. Set forth below is a graph comparing cumulative total
shareholder return for the last five (5) fiscal years (commencing June 30, 1990)
on the Company's Common Stock, the Nasdaq(US) Index and the Hambrecht & Quist
Technology Index.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
RASTEROPS H&Q TECHNOLOGY NASDAQ
<S> <C> <C> <C>
6/30/90 100 100 100
6/30/91 111.84 100.60 105.89
6/30/92 63.16 114.31 127.25
6/30/93 48.03 139.66 159.99
6/30/94 23.03 141.70 161.61
7/1/95 30.26 237.29 215.33
</TABLE>
38
<PAGE>
MISCELLANEOUS
SHAREHOLDER PROPOSALS
Shareholder proposals complying with the applicable rules under the
Securities and Exchange Act of 1934 intended to be presented at the 1996 Annual
Meeting of Shareholders of the Company must be received by the Company by May
25, 1996 to be eligible for inclusion in the Company's proxy materials for such
meeting. Such proposals should be directed to the attention of R. John Curson,
Chief Financial Officer, RasterOps, 2500 Walsh Avenue, Santa Clara, California
95051.
OTHER BUSINESS
The Board of Directors is not aware of any other business to be presented at
the Annual Meeting. If any other matters should properly come before the
meeting, it is intended that the persons named in the accompanying form of Proxy
will vote such proxy in accordance with their best judgment on such matters.
SECTION 16 FILINGS
The Company believes that its officers, directors and five percent
shareholders complied with all Section 16(a) filing requirements applicable to
such officers, directors and five percent shareholders during fiscal year 1995
with the exception that Mr. William Carter, who was hired on April 17, 1995,
filed his Form 3 on May 8, 1995 and Mr. William McAleer filed an amended Form 3
in September 1995 indicating he owned 3,500 shares of the Company's Common Stock
prior to joining the Board of Directors in March 1995.
1995 ANNUAL REPORT TO SHAREHOLDERS AND 1995 ANNUAL REPORT ON FORM 10-K
A copy of the 1995 Annual Report to Shareholders accompanies this Proxy
Statement. RasterOps' Annual Report on Form 10-K for the year ended July 1,
1995, as filed with the Securities and Exchange Commission, containing full
audited financial statements and financial statement schedule also accompanies
this Proxy Statement.
BY ORDER OF THE BOARD OF DIRECTORS.
Santa Clara, California
September 27, 1995
39
<PAGE>
PROXY RASTEROPS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder of RASTEROPS (the "Company") acknowledges
receipt of the Notice of Annual Meeting of Shareholders and the Proxy Statement
each dated September 27, 1995, and the undersigned revokes all prior proxies and
appoints Louis J. Doctor and R. John Curson or either of them, proxies for the
undersigned to vote all shares of Common Stock of the Company which the
undersigned would be entitled to vote at the Annual Meeting of Shareholders to
be held at the Company's offices at 2500 Walsh Avenue, Santa Clara, California
95051 at 9:00 a.m. on October 24, 1995, and at any postponement or adjournment
thereof, and instructs said proxies to vote as follows:
<TABLE>
<S> <C> <C> <C>
1. ELECTION OF DIRECTORS FOR all nominees listed below WITHHOLD AUTHORITY
(EXCEPT AS MARKED TO THE CONTRARY TO VOTE FOR ALL NOMINEES LISTED
BELOW) / / BELOW / /
Walter W. Bregman, Louis J. Doctor, Gordon E. Eubanks, Jr., William H. McAleer,
Kieth E. Sorenson and Conrad J. Wredberg
2. AMENDMENT TO ARTICLES OF INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED SHARES TO 25,000,000.
/ / FOR / / AGAINST / / ABSTAIN
3. APPROVAL OF REINCORPORATION OF THE COMPANY IN DELAWARE.
/ / FOR / / AGAINST / / ABSTAIN
4. AMENDMENT TO THE 1988 STOCK INCENTIVE PLAN TO INCREASE THE NUMBER OF SHARES AVAILABLE THEREUNDER BY
515,000.
/ / FOR / / AGAINST / / ABSTAIN
5. AMENDMENT TO THE AMENDED AND RESTATED 1991 DIRECTOR OPTION PLAN TO INCREASE THE NUMBER OF SHARES
AVAILABLE THEREUNDER BY 100,000.
/ / FOR / / AGAINST / / ABSTAIN
6. AMENDMENT TO THE AMENDED AND RESTATED 1991 DIRECTOR OPTION PLAN TO PROVIDE FOR ONE-TIME GRANTS OF
OPTIONS TO PURCHASE 25,000 SHARES OF COMMON STOCK TO NON-EMPLOYEE DIRECTORS WHO ACT AS CHAIRMAN OF THE
BOARD OF DIRECTORS FOR THE COMPANY.
/ / FOR / / AGAINST / / ABSTAIN
7. RATIFICATION OF THE APPOINTMENT OF PRICE WATERHOUSE LLP AS INDEPENDENT ACCOUNTANTS FOR THE FISCAL YEAR
ENDING JUNE 29, 1996.
/ / FOR / / AGAINST / / ABSTAIN
8. In their discretion, the proxies are authorized to vote upon such other business as may properly come
before the meeting.
/ / GRANT / / WITHHOLD
</TABLE>
<PAGE>
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR PROPOSALS 1, 2, 3, 4, 5, 6 AND 7 AND IN THE DISCRETION OF THE
PROXIES AS TO OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
Dated: __________________, 199_
_______________________________
Signature
_______________________________
Signature if held jointly
(This Proxy should be dated and
signed by the shareholder
exactly as his/her name is
printed at the left and
returned properly in the
enclosed envelope. A person
signing as an executor,
administrator, trustee or
guardian should so indicate and
specify his/her title. If a
corporation, please sign in
full corporate name by
President or other authorized
officer. If a partnership,
please sign in partnership name
by authorized person. Joint
owners each should sign.)
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE
<PAGE>
AGREEMENT AND PLAN OF MERGER
OF TRUEVISION, INC.,
A DELAWARE CORPORATION,
AND
RASTEROPS,
A CALIFORNIA CORPORATION
THIS AGREEMENT AND PLAN OF MERGER dated as of _________, 1995 (the
"Agreement") is between Truevision, Inc., a Delaware corporation ("Truevision"),
and RasterOps, a California corporation ("RasterOps"). Truevision and RasterOps
are sometimes referred to herein as the "Constituent Corporations."
R E C I T A L S
A. Truevision is a corporation duly organized and existing under the laws
of the State of Delaware and has an authorized capital of 27,000,000 shares,
25,000,000 of which are designated "Common Stock," $0.001 par value, and
2,000,000 of which are designated "Preferred Stock," $0.001 par value. As of
the date hereof, 100 shares of Common Stock were issued and outstanding, all of
which were held by RasterOps and no shares of Preferred Stock were issued and
outstanding.
B. RasterOps is a corporation duly organized and existing under the laws
of the State of California and has an authorized capital of 17,000,000 shares,
15,000,000 of which are designated "Common Stock," no par value, and 2,000,000
of which are designated "Preferred Stock," no par value. As of August 25, 1995,
12,395,545 shares of Common Stock and no shares of Preferred Stock were issued
and outstanding.
C. The Board of Directors of RasterOps has determined that, for the
purpose of effecting the reincorporation of RasterOps in the State of Delaware,
it is advisable and in the best interests of RasterOps and its shareholders that
RasterOps merge with and into Truevision upon the terms and conditions herein
provided.
D. The respective Boards of Directors of Truevision and RasterOps have
approved this Agreement and have directed that this Agreement be submitted to a
vote of their respective sole stockholder and shareholders, and executed by the
undersigned officers.
NOW, THEREFORE, in consideration of the mutual agreements and covenants set
forth herein, Truevision and RasterOps hereby agree, subject to the terms and
conditions hereinafter set forth, as follows:
I. MERGER
1.1 MERGER. In accordance with the provisions of this Agreement, the
Delaware General Corporation Law and the California General Corporation Law,
RasterOps shall be merged with and into Truevision (the "Merger"), the separate
existence of RasterOps shall cease and Truevision shall survive the Merger and
shall continue to be governed by the laws of the State of Delaware, and
Truevision shall be, and is herein sometimes referred to as, the "Surviving
Corporation," and the name of the Surviving Corporation shall be Truevision,
Inc.
1.2 FILING AND EFFECTIVENESS. The Merger shall become effective when the
following actions shall have been completed:
(a) This Agreement and Merger shall have been adopted and approved by
the stockholders of each Constituent Corporation in accordance with the
requirements of the Delaware General Corporation Law and the California
Corporations Code;
<PAGE>
(b) All of the conditions precedent to the consummation of the Merger
specified in this Agreement shall have been satisfied or duly waived by the
party entitled to satisfaction thereof; and
(c) An executed Certificate of Merger or an executed counterpart of
this Agreement meeting the requirements of the Delaware General Corporation Law
shall have been filed with the Secretary of State of the State of Delaware.
The date and time when the Merger shall become effective, as aforesaid, is
herein called the "Effective Date of the Merger."
1.3 EFFECT OF THE MERGER. Upon the Effective Date of the Merger, the
separate existence of RasterOps shall cease and Truevision, as the Surviving
Corporation (i) shall continue to possess all of its assets, rights, powers and
property as constituted immediately prior to the Effective Date of the Merger,
(ii) shall be subject to all actions previously taken by its and RasterOps'
Board of Directors, (iii) shall succeed, without other transfer, to all of the
assets, rights, powers and property of RasterOps in the manner more fully set
forth in Section 259 of the Delaware General Corporation Law, (iv) shall
continue to be subject to all of the debts, liabilities and obligations of
Truevision as constituted immediately prior to the Effective Date of the Merger,
and (v) shall succeed, without other transfer, to all of the debts, liabilities
and obligations of RasterOps in the same manner as if Truevision had itself
incurred them, all as more fully provided under the applicable provisions of the
Delaware General Corporation Law and the California Corporations Code.
II. CHARTER DOCUMENTS, DIRECTORS AND OFFICERS
2.1 CERTIFICATE OF INCORPORATION. The Certificate of Incorporation of
Truevision as in effect immediately prior to the Effective Date of the Merger
shall continue in full force and effect as the Certificate of Incorporation of
the Surviving Corporation until duly amended in accordance with the provisions
thereof and applicable law.
2.2 BYLAWS. The Bylaws of Truevision as in effect immediately prior to
the Effective Date of the Merger shall continue in full force and effect as the
Bylaws of the Surviving Corporation until duly amended in accordance with the
provisions thereof and applicable law.
2.3 DIRECTORS AND OFFICERS. The directors and officers of RasterOps
immediately prior to the Effective Date of the Merger shall be the directors and
officers of the Surviving Corporation until their successors shall have been
duly elected and qualified or until as otherwise provided by law, or the
Certificate of Incorporation of the Surviving Corporation or the Bylaws of the
Surviving Corporation.
III. MANNER OF CONVERSION OF STOCK
3.1 RASTEROPS COMMON STOCK. Upon the Effective Date of the Merger, each
share of RasterOps Common Stock issued and outstanding immediately prior thereto
shall, by virtue of the Merger and without any action by the Constituent
Corporations, the holder of such shares or any other person, be converted into
and exchanged for one (1) fully paid and nonassessable share of Common Stock,
$0.001 par value, of the Surviving Corporation.
3.2 RASTEROPS OPTIONS AND CONVERTIBLE SECURITIES.
(a) Upon the Effective Date of the Merger, the Surviving Corporation
shall assume the obligations of RasterOps under the warrants to purchase Common
Stock then outstanding, the option plans and all other employee benefit plans
of RasterOps. Each outstanding and unexercised option, or other right to
purchase, or security convertible into, RasterOps Common Stock (a "Right") shall
become an option, or right to purchase or a security convertible into the
Surviving Corporation's Common Stock on the basis of one (1) share of the
Surviving Corporation's Common Stock for each share of RasterOps Common Stock
issuable pursuant to any such Right, on the same terms and conditions and at an
exercise price per share equal to the exercise price applicable to any such
RasterOps Right at the Effective Date of the
-2-
<PAGE>
Merger. This Section 3.2(a) shall not apply to outstanding shares of RasterOps
Common Stock. Such Common Stock is subject to Section 3.1 hereof.
(b) A number of shares of the Surviving Corporation's Common Stock
shall be reserved for issuance upon the exercise of options and convertible
securities equal to the number of shares of RasterOps Common Stock so reserved
immediately prior to the Effective Date of the Merger.
3.3 TRUEVISION COMMON STOCK. Upon the Effective Date of the Merger, each
share of Common Stock, $0.001 par value, of Truevision issued and outstanding
immediately prior thereto shall, by virtue of the Merger and without any action
by Truevision, the holder of such shares or any other person, be canceled and
returned to the status of authorized but unissued shares.
3.4 EXCHANGE OF CERTIFICATES. After the Effective Date of the Merger,
each holder of an outstanding certificate representing shares of RasterOps
Common Stock may, at such stockholder's option, surrender the same for
cancellation to First Interstate Bank, as exchange agent (the "Exchange Agent"),
and each such holder shall be entitled to receive in exchange therefor a
certificate or certificates representing the number of shares of the Surviving
Corporation's Common Stock into which the surrendered shares were converted as
herein provided. Unless and until so surrendered, each outstanding certificate
theretofore representing shares of RasterOps Common Stock shall be deemed for
all purposes to represent the number of shares of the Surviving Corporation's
Common Stock into which such shares of RasterOps Common Stock were converted in
the Merger.
The registered owner on the books and records of the Surviving Corporation
or the Exchange Agent of any such outstanding certificate shall, until such
certificate shall have been surrendered for transfer or conversion or otherwise
accounted for to the Surviving Corporation or the Exchange Agent, have and be
entitled to exercise any voting and other rights with respect to and to receive
dividends and other distributions upon the shares of Common Stock of the
Surviving Corporation represented by such outstanding certificate as provided
above.
Each certificate representing Common Stock of the Surviving Corporation so
issued in the Merger shall bear the same legends, if any, with respect to the
restrictions on transferability as the certificates of RasterOps so converted
and given in exchange therefore, unless otherwise determined by the Board of
Directors of the Surviving Corporation in compliance with applicable laws, or
other such additional legends as agreed upon by the holder and the Surviving
Corporation.
If any certificate for shares of Truevision stock is to be issued in a name
other than that in which the certificate surrendered in exchange therefor is
registered, it shall be a condition of issuance thereof that the certificate so
surrendered shall be properly endorsed and otherwise in proper form for
transfer, that such transfer otherwise be proper and comply with applicable
securities laws and that the person requesting such transfer pay to the Exchange
Agent any transfer or other taxes payable by reason of issuance of such new
certificate in a name other than that of the registered holder of the
certificate surrendered or establish to the satisfaction of Truevision that such
tax has been paid or is not payable.
IV. GENERAL
4.1 COVENANTS OF TRUEVISION. Truevision covenants and agrees that it
will, on or before the Effective Date of the Merger:
(a) qualify a subsidiary to do business as a foreign corporation in
the State of California and in connection therewith irrevocably appoint an agent
for service of process as required under the provisions of Section 2105 of the
California General Corporation Law;
(b) file any and all documents with the California Franchise Tax
Board necessary for the assumption by Truevision of all of the franchise tax
liabilities of RasterOps; and
-3-
<PAGE>
(c) take such other actions as may be required by the California
General Corporation Law.
4.2 FURTHER ASSURANCES. From time to time, as and when required by
Truevision or by its successors or assigns, there shall be executed and
delivered on behalf of RasterOps such deeds and other instruments, and there
shall be taken or caused to be taken by it such further and other actions as
shall be appropriate or necessary in order to vest or perfect in or conform of
record or otherwise by Truevision the title to and possession of all the
property, interests, assets, rights, privileges, immunities, powers, franchises
and authority of RasterOps and otherwise to carry out the purposes of this
Agreement, and the officers and directors of Truevision are fully authorized in
the name and on behalf of RasterOps or otherwise to take any and all such action
and to execute and deliver any and all such deeds and other instruments.
4.3 ABANDONMENT. At any time before the Effective Date of the Merger,
this Agreement may be terminated and the Merger may be abandoned for any reason
whatsoever by the Board of Directors of either RasterOps or of Truevision, or of
both, notwithstanding the approval of this Agreement by the shareholders of
RasterOps or by the sole stockholder of Truevision, or by both.
4.4 AMENDMENT. The Boards of Directors of the Constituent Corporations
may amend this Agreement at any time prior to the filing of this Agreement (or
certificate in lieu thereof) with the Secretaries of State of the States of
Delaware and California, provided that an amendment made subsequent to the
adoption of this Agreement by the stockholders of either Constituent Corporation
shall not: (a) alter or change the amount or kind of shares, securities, cash,
property and/or rights to be received in exchange for or on conversion of all or
any of the shares of any class or series thereof of such Constituent
Corporation; (b) alter or change any term of the Certificate of Incorporation of
the Surviving Corporation to be effected by the Merger; or (c) alter or change
any of the terms and conditions of this Agreement if such alteration or change
would adversely affect the holders of any class or series of capital stock of
any Constituent Corporation.
4.5 REGISTERED OFFICE. The registered office of the Surviving Corporation
in the State of Delaware is 1209 Orange Street, Wilmington, Delaware 19801,
County of New Castle and The Corporation Trust Company is the registered agent
of the Surviving Corporation at such address.
4.6 AGREEMENT. Executed copies of this Agreement will be on file at the
principal place of business of the Surviving Corporation at 2500 Walsh Avenue,
Santa Clara, California 95051 and copies thereof will be furnished to any
stockholder of either Constituent Corporation, upon request and without cost.
4.7 GOVERNING LAW. This Agreement shall in all respects be construed,
interpreted and enforced in accordance with and governed by the laws of the
State of Delaware and, so far as applicable, the merger provisions of the
California General Corporation Law.
4.8 COUNTERPARTS. In order to facilitate the filing and recording of this
Agreement, the same may be executed in any number of counterparts, each of which
shall be deemed to be an original and all of which together shall constitute one
and the same instrument.
-4-
<PAGE>
IN WITNESS WHEREOF, this Agreement having first been approved by the
resolutions of the Board of Directors of Truevision, Inc., a Delaware
corporation, and RasterOps, a California corporation, is hereby executed on
behalf of each of such two corporations and attested by their respective
officers thereunto duly authorized.
TRUEVISION, INC.,
a Delaware corporation
By:
---------------------------------------
Louis J. Doctor
President and Chief Executive Officer
ATTEST:
- -----------------------------------
R. John Curson
Senior Vice President, Chief
Financial Officer and Secretary
RASTEROPS,
a California corporation
By:
---------------------------------------
Louis J. Doctor
President and Chief Executive Officer
ATTEST:
- -----------------------------------
R. John Curson
Senior Vice President, Chief
Financial Officer and Secretary
-5-
<PAGE>
CERTIFICATE OF INCORPORATION
OF
TRUEVISION, INC.
ARTICLE I
The name of this corporation is Truevision, Inc. (the "Corporation").
ARTICLE II
The address of the Corporation's registered office in the State of Delaware
is 1209 Orange Street, Wilmington, Delaware 19801, County of New Castle. The
name of its registered agent at such address is The Corporation Trust Company.
ARTICLE III
The nature of the business or purposes to be conducted or promoted by the
Corporation is to engage in any lawful act or activity for which corporations
may be organized under the General Corporation Law of Delaware.
ARTICLE IV
The Corporation is authorized to issue two classes of stock to be
designated, respectively, Preferred Stock, par value $.001 per share
("Preferred"), and Common Stock, par value $.001 per share ("Common"). The
total number of shares of Common that the Corporation shall have authority to
issue is 25,000,000. The total number of shares of Preferred that the
Corporation shall have authority to issue is 2,000,000. The Preferred Stock may
be issued from time to time in one or more series.
The Corporation shall from time to time in accordance with the laws of the
State of Delaware increase the authorized amount of its Common if at any time
the number of Common shares remaining unissued and available for issuance shall
not be sufficient to permit conversion of the Preferred.
The Board of Directors is hereby authorized, subject to limitations
prescribed by law and the provisions of this Article IV, to provide for the
issuance of the shares of Preferred in one or more series, and by filing a
certificate pursuant to the General Corporation Law of the State of Delaware, to
establish from time to time the number of shares to be included in each such
series, and to fix the designation, powers, preferences, and rights of the
shares of each such series and the qualifications, limitations or restrictions
thereof.
The authority of the Board with respect to each series shall include, but
not be limited to, determination of the following:
A. The number of shares constituting that series and the distinctive
designation of that series;
B. The dividend rate on the shares of that series, whether dividends
shall be cumulative, and, if so, from which date or dates, and the relative
rights of priority, if any, of payment of dividends on shares of that series;
<PAGE>
C. Whether that series shall have the voting rights in addition to
the voting rights provided by law, and, if so, the terms of such voting rights;
D. Whether that series shall have conversion privileges, and, if so,
the terms and conditions of such privileges, including provision for adjustment
of the conversion rate in such events as the Board of Directors shall determine;
E. Whether or not the shares of that series shall be redeemable,
and, if so, the terms and conditions of such redemption, including the date or
dates upon or after which they shall be redeemable, and the amount per share
payable in case of redemption, which amount may vary under different conditions
and at different redemption rates;
F. Whether that series shall have a sinking fund for the redemption
or purchase of shares of that series, and, if so, the terms and the amount of
such sinking funds;
G. The rights of the shares of that series in the event of voluntary
or involuntary liquidation, dissolution or winding up of the Corporation, and
the relative rights of priority, if any, of payment of shares of that series;
and
H. Any other relative rights, preferences and limitations of that
series.
ARTICLE V
The Corporation is to have perpetual existence.
ARTICLE VI
For the management of the business and for the conduct of the affairs of
the Corporation, and in further definition, limitation and regulation of the
powers of the Corporation, of its directors and of its stockholders or any class
thereof, as the case may be, it is further provided that:
A. The management of the business and the conduct of the affairs of the
Corporation shall be vested in its Board of Directors. The number of directors
which shall constitute the whole Board of Directors shall be determined as set
forth in the Bylaws of the Corporation.
Each director shall serve until his or her successor is duly elected and
qualified or until his or her death, resignation, or removal. No decrease in
the number of directors constituting the Board of Directors shall shorten the
term of any incumbent director.
B. In furtherance and not in limitation of the powers conferred by the
laws of the State of Delaware, the Board of Directors is expressly authorized to
make, alter, amend, or repeal the Bylaws of the Corporation.
C. The directors of the Corporation need not be elected by written ballot
unless a stockholder demands election by written ballot at a meeting of
stockholders and before voting begins, or unless the Bylaws of the Corporation
so provide.
-2-
<PAGE>
ARTICLE VII
At the election of directors of the Corporation, each holder of stock of
any class or series shall be entitled to cumulative voting rights as to the
directors to be elected by each class or series in accordance with the
provisions of Section 214 of the General Corporation Law of the State of
Delaware.
ARTICLE VIII
The name and mailing address of the incorporator are as follows:
Mark L. Reinstra
Wilson, Sonsini, Goodrich & Rosati
650 Page Mill Road
Palo Alto, California 94304-1050
ARTICLE IX
The Corporation reserves the right to amend, alter, change, or repeal any
provision contained in this Certificate of Incorporation, in the manner now or
hereafter prescribed by the laws of the State of Delaware, and all rights
conferred herein are granted subject to this reservation.
ARTICLE X
A. To the fullest extent permitted by the Delaware General Corporation
Law as the same exists or as may hereafter be amended, no director of the
Corporation shall be personally liable to the Corporation or its stockholders
for monetary damages for breach of fiduciary duty as a director.
B. 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 matter 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.
ARTICLE XI
Meetings of stockholders may be held within or without the State of
Delaware, as the Bylaws may provide. The books of the Corporation may be kept
(subject to any provision contained in the laws of the State of Delaware)
outside of the State of Delaware at such place or places as may be designated
from time to time by the Board of Directors or in the Bylaws of the Corporation.
-3-
<PAGE>
The undersigned incorporator hereby acknowledges that the foregoing
Certificate of Incorporation is his act and deed and that the facts stated
herein are true.
Dated: October __, 1995 -----------------------------------
Mark L. Reinstra
Incorporator
-4-
<PAGE>
BYLAWS
OF
TRUEVISION, INC.
(A DELAWARE CORPORATION)
<PAGE>
BYLAWS OF
TRUEVISION, INC.
(a Delaware corporation)
TABLE OF CONTENTS
Page
ARTICLE I - CORPORATE OFFICES. . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 REGISTERED OFFICE. . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 OTHER OFFICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II - MEETINGS OF STOCKHOLDERS. . . . . . . . . . . . . . . . . . . . . 1
2.1 PLACE OF MEETINGS. . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.2 ANNUAL MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.3 SPECIAL MEETING. . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.4 NOTICE OF STOCKHOLDERS' MEETINGS . . . . . . . . . . . . . . . . . . 2
2.5 MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE . . . . . . . . . . . . 2
2.6 QUORUM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.7 ADJOURNED MEETING; NOTICE. . . . . . . . . . . . . . . . . . . . . . 3
2.8 VOTING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.9 STOCKHOLDER ACTION BY WRITTEN CONSENT WITHOUT
A MEETING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.10 RECORD DATE FOR STOCKHOLDER NOTICE; VOTING . . . . . . . . . . . . . 4
2.11 PROXIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.12 ORGANIZATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.13 LIST OF STOCKHOLDERS ENTITLED TO VOTE. . . . . . . . . . . . . . . . 5
ARTICLE III - DIRECTORS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.1 POWERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.2 NUMBER OF DIRECTORS. . . . . . . . . . . . . . . . . . . . . . . . . 5
3.3 ELECTION AND TERM OF OFFICE OF DIRECTORS . . . . . . . . . . . . . . 5
3.4 RESIGNATION AND VACANCIES. . . . . . . . . . . . . . . . . . . . . . 6
3.5 REMOVAL OF DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . 7
3.6 PLACE OF MEETINGS; MEETINGS BY TELEPHONE . . . . . . . . . . . . . . 7
3.7 REGULAR MEETINGS . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.8 SPECIAL MEETINGS; NOTICE . . . . . . . . . . . . . . . . . . . . . . 7
3.9 QUORUM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.10 WAIVER OF NOTICE . . . . . . . . . . . . . . . . . . . . . . . . . . 8
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<PAGE>
TABLE OF CONTENTS
(Continued)
3.11 ADJOURNMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.12 NOTICE OF ADJOURNMENT. . . . . . . . . . . . . . . . . . . . . . . . 8
3.13 BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING. . . . . . . . . . 8
3.14 FEES AND COMPENSATION OF DIRECTORS . . . . . . . . . . . . . . . . . 9
3.15 APPROVAL OF LOANS TO OFFICERS. . . . . . . . . . . . . . . . . . . . 9
3.16 SOLE DIRECTOR PROVIDED BY CERTIFICATE OF INCORPORATION . . . . . . . 9
ARTICLE IV - COMMITTEES. . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.1 COMMITTEES OF DIRECTORS. . . . . . . . . . . . . . . . . . . . . . . 9
4.2 MEETINGS AND ACTION OF COMMITTEES. . . . . . . . . . . . . . . . . .10
4.3 COMMITTEE MINUTES. . . . . . . . . . . . . . . . . . . . . . . . . .10
ARTICLE V - OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
5.1 OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
5.2 ELECTION OF OFFICERS . . . . . . . . . . . . . . . . . . . . . . . .11
5.3 SUBORDINATE OFFICERS . . . . . . . . . . . . . . . . . . . . . . . .11
5.4 REMOVAL AND RESIGNATION OF OFFICERS. . . . . . . . . . . . . . . . .11
5.5 VACANCIES IN OFFICES . . . . . . . . . . . . . . . . . . . . . . . .11
5.6 CHAIRMAN OF THE BOARD. . . . . . . . . . . . . . . . . . . . . . . .12
5.7 PRESIDENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
5.8 VICE PRESIDENTS. . . . . . . . . . . . . . . . . . . . . . . . . . .12
5.9 SECRETARY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
5.10 CHIEF FINANCIAL OFFICER. . . . . . . . . . . . . . . . . . . . . . .13
5.11 ASSISTANT SECRETARY. . . . . . . . . . . . . . . . . . . . . . . . .13
5.12 ADMINISTRATIVE OFFICERS. . . . . . . . . . . . . . . . . . . . . . .13
5.13 AUTHORITY AND DUTIES OF OFFICERS . . . . . . . . . . . . . . . . . .14
ARTICLE VI - INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES
AND OTHER AGENTS. . . . . . . . . . . . . . . . . . . . . . .14
6.1 INDEMNIFICATION OF DIRECTORS AND OFFICERS. . . . . . . . . . . . . .14
6.2 INDEMNIFICATION OF OTHERS. . . . . . . . . . . . . . . . . . . . . .15
6.3 INSURANCE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
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<PAGE>
TABLE OF CONTENTS
(Continued)
ARTICLE VII - RECORDS AND REPORTS. . . . . . . . . . . . . . . . . . . . . . .15
7.1 MAINTENANCE AND INSPECTION OF RECORDS. . . . . . . . . . . . . . . .15
7.2 INSPECTION BY DIRECTORS. . . . . . . . . . . . . . . . . . . . . . .16
7.3 ANNUAL STATEMENT TO STOCKHOLDERS . . . . . . . . . . . . . . . . . .16
7.4 REPRESENTATION OF SHARES OF OTHER CORPORATIONS . . . . . . . . . . .16
7.5 CERTIFICATION AND INSPECTION OF BYLAWS . . . . . . . . . . . . . . .16
ARTICLE VIII - GENERAL MATTERS . . . . . . . . . . . . . . . . . . . . . . . .16
8.1 RECORD DATE FOR PURPOSES OTHER THAN NOTICE
AND VOTING . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
8.2 CHECKS; DRAFTS; EVIDENCES OF INDEBTEDNESS. . . . . . . . . . . . . .17
8.3 CORPORATE CONTRACTS AND INSTRUMENTS: HOW EXECUTED . . . . . . . . .17
8.4 STOCK CERTIFICATES; TRANSFER; PARTLY PAID SHARES . . . . . . . . . .17
8.5 SPECIAL DESIGNATION ON CERTIFICATES. . . . . . . . . . . . . . . . .18
8.6 LOST CERTIFICATES. . . . . . . . . . . . . . . . . . . . . . . . . .18
8.7 TRANSFER AGENTS AND REGISTRARS . . . . . . . . . . . . . . . . . . .19
8.8 CONSTRUCTION; DEFINITIONS. . . . . . . . . . . . . . . . . . . . . .19
ARTICLE IX - AMENDMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . .19
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<PAGE>
BYLAWS
OF
TRUEVISION, INC.
(a Delaware corporation)
ARTICLE I.
CORPORATE OFFICES
A. REGISTERED OFFICE
The registered office of the corporation shall be fixed in the certificate
of incorporation of the corporation.
B. OTHER OFFICES
The board of directors may at any time establish branch or subordinate
offices at any place or places where the corporation is qualified to do
business.
ARTICLE II.
MEETINGS OF STOCKHOLDERS
A. PLACE OF MEETINGS
Meetings of stockholders shall be held at any place within or outside the
State of Delaware designated by the board of directors. In the absence of any
such designation, stockholders' meetings shall be held at the principal
executive office of the corporation.
B. ANNUAL MEETING
The annual meeting of stockholders shall be held each year on a date and
at a time designated by the board of directors. In the absence of such
designation, the annual meeting of stockholders shall be held on the second
Tuesday in November in each year at 10:00 a.m. However, if such day falls on a
legal holiday, then the meeting shall be held at the same time and place on the
next succeeding full business day. At the meeting, directors shall be elected,
and any other proper business may be transacted.
C. SPECIAL MEETING
A special meeting of the stockholders may be called at any time by the
board of directors, or by the chairman of the board, or by the president, or by
one or more stockholders holding shares in the
<PAGE>
aggregate entitled to cast not less than ten percent (10%) of the votes of all
shares of stock owned by stockholders entitled to vote at that meeting.
If a special meeting is called by any person or persons other than the
board of directors or the president or the chairman of the board, then the
request shall be in writing, specifying the time of such meeting and the general
nature of the business proposed to be transacted, and shall be delivered
personally or sent by registered mail or by telegraphic or other facsimile
transmission to the chairman of the board, the president, any vice president or
the secretary of the corporation. The officer receiving the request shall cause
notice to be promptly given to the stockholders entitled to vote, in accordance
with the provisions of Sections 2.4 and 2.5 of these bylaws, that a meeting will
be held at the time requested by the person or persons calling the meeting, so
long as that time is not less than thirty-five (35) nor more than sixty (60)
days after the receipt of the request. If the notice is not given within twenty
(20) days after receipt of the request, then the person or persons requesting
the meeting may give the notice. Nothing contained in this paragraph of this
Section 2.3 shall be construed as limiting, fixing or affecting the time when a
meeting of stockholders called by action of the board of directors may be held.
2.4 NOTICE OF STOCKHOLDERS' MEETINGS
All notices of meetings of stockholders shall be sent or otherwise given
in accordance with Section 2.5 of these bylaws not less than ten (10) nor more
than sixty (60) days before the date of the meeting. The notice shall specify
the place, date and hour of the meeting and (i) in the case of a special
meeting, the purpose or purposes for which the meeting is called (no business
other than that specified in the notice may be transacted) or (ii) in the case
of the annual meeting, those matters which the board of directors, at the time
of giving the notice, intends to present for action by the stockholders (but any
proper matter may be presented at the meeting for such action). The notice of
any meeting at which directors are to be elected shall include the name of any
nominee or nominees who, at the time of the notice, the board intends to present
for election.
2.5 MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE
Written notice of any meeting of stockholders shall be given either
personally or by first-class mail or by telegraphic or other written
communication. Notices not personally delivered shall be sent charges prepaid
and shall be addressed to the stockholder at the address of that stockholder
appearing on the books of the corporation or given by the stockholder to the
corporation for the purpose of notice. Notice shall be deemed to have been
given at the time when delivered personally or deposited in the mail or sent by
telegram or other means of written communication.
An affidavit of the mailing or other means of giving any notice of any
stockholders' meeting, executed by the secretary, assistant secretary or any
transfer agent of the corporation giving the notice, shall be prima facie
evidence of the giving of such notice.
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<PAGE>
2.6 QUORUM
The holders of a majority in voting power of the stock issued and
outstanding and entitled to vote thereat, present in person or represented by
proxy, shall constitute a quorum at all meetings of the stockholders for the
transaction of business except as otherwise provided by statute or by the
certificate of incorporation. If, however, such quorum is not present or
represented at any meeting of the stockholders, then either (i) the chairman of
the meeting or (ii) the stockholders entitled to vote thereat, present in person
or represented by proxy, shall have power to adjourn the meeting in accordance
with Section 2.7 of these bylaws.
When a quorum is present at any meeting, the vote of the holders of a
majority of the stock having voting power present in person or represented by
proxy shall decide any question brought before such meeting, unless the question
is one upon which, by express provision of the laws of the State of Delaware or
of the certificate of incorporation or these bylaws, a different vote is
required, in which case such express provision shall govern and control the
decision of the question.
If a quorum be initially present, the stockholders may continue to
transact business until adjournment, notwithstanding the withdrawal of enough
stockholders to leave less than a quorum, if any action taken is approved by a
majority of the stockholders initially constituting the quorum.
2.7 ADJOURNED MEETING; NOTICE
When a meeting is adjourned to another time and place, unless these bylaws
otherwise require, notice need not be given of the adjourned meeting if the time
and place thereof are announced at the meeting at which the adjournment is
taken. At the adjourned meeting the corporation may transact any business that
might have been transacted at the original meeting. If the adjournment is for
more than thirty (30) days, or if after the adjournment a new record date is
fixed for the adjourned meeting, a notice of the adjourned meeting shall be
given to each stockholder of record entitled to vote at the meeting.
2.8 VOTING
The stockholders entitled to vote at any meeting of stockholders shall be
determined in accordance with the provisions of Section 2.10 of these bylaws,
subject to the provisions of Sections 217 and 218 of the General Corporation Law
of Delaware (relating to voting rights of fiduciaries, pledgors and joint
owners, and to voting trusts and other voting agreements).
Except as may be otherwise provided in the certificate of incorporation or
these bylaws, each stockholder shall be entitled to one vote for each share of
capital stock held by such stockholder.
2.9 STOCKHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING
Any action required or permitted 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 or consents in writing setting forth the action so
taken, shall be signed by the holders of outstanding stock having not less than
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<PAGE>
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. Such consents shall be delivered to the corporation by delivery to
it registered office in the state of Delaware, its principal place of business,
or an officer or agent of the corporation having custody of the book in which
proceedings of meetings of stockholders are recorded. Delivery made to a
corporation's registered office shall be by hand or by certified or registered
mail, return receipt requested.
2.10 RECORD DATE FOR STOCKHOLDER NOTICE; VOTING
For purposes of determining the stockholders entitled to notice of any
meeting or to vote thereat, the board of directors may fix, in advance, a record
date, which shall not precede the date upon which the resolution fixing the
record date is adopted by the board of directors and which shall not be more
than sixty (60) days nor less than ten (10) days before the date of any such
meeting, and in such event only stockholders of record on the date so fixed are
entitled to notice and to vote, notwithstanding any transfer of any shares on
the books of the corporation after the record date.
If the board of directors does not so fix a record date, the record date
for determining stockholders entitled to notice of or to vote at a meeting of
stockholders shall be at the close of business on the business day next
preceding the day on which notice is given, or, if notice is waived, at the
close of business on the business day next preceding the day on which the
meeting is held.
A determination of stockholders of record entitled to notice of or to vote
at a meeting of stockholders shall apply to any adjournment of the meeting
unless the board of directors fixes a new record date for the adjourned meeting,
but the board of directors shall fix a new record date if the meeting is
adjourned for more than thirty (30) days from the date set for the original
meeting.
The record date for any other purpose shall be as provided in Section 8.1
of these bylaws.
2.11 PROXIES
Every person entitled to vote for directors, or on any other matter, shall
have the right to do so either in person or by one or more agents authorized by
a written proxy signed by the person and filed with the secretary of the
corporation, but no such proxy shall be voted or acted upon after three (3)
years from its date, unless the proxy provides for a longer period. 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) by the stockholder or the stockholder's attorney-in-fact. The
revocability of a proxy that states on its face that it is irrevocable shall be
governed by the provisions of Section 212(e) of the General Corporation Law of
Delaware.
2.12 ORGANIZATION
The president, or in the absence of the president, the chairman of the
board, shall call the meeting of the stockholders to order, and shall act as
chairman of the meeting. In the absence of the president, the chairman of the
board, and all of the vice presidents, the stockholders shall appoint a chairman
for
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<PAGE>
such meeting. The chairman of any meeting of stockholders shall determine the
order of business and the procedures at the meeting, including such matters as
the regulation of the manner of voting and the conduct of business. The
secretary of the corporation shall act as secretary of all meetings of the
stockholders, but in the absence of the secretary at any meeting of the
stockholders, the chairman of the meeting may appoint any person to act as
secretary of the meeting.
2.13 LIST OF STOCKHOLDERS ENTITLED TO VOTE
The officer who has charge of the stock ledger of the corporation shall
prepare and make, at least ten (10) days before every meeting of stockholders, a
complete list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each stockholder and the number
of shares registered in the name of each stockholder. Such list shall be open
to the examination of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least ten (10) days prior to
the meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held. The list shall also be
produced and kept at the time and place of the meeting during the whole time
thereof, and may be inspected by any stockholder who is present.
ARTICLE III.
DIRECTORS
3.1 POWERS
Subject to the provisions of the General Corporation Law of Delaware and
to any limitations in the certificate of incorporation or these bylaws relating
to action required to be approved by the stockholders or by the outstanding
shares, the business and affairs of the corporation shall be managed and all
corporate powers shall be exercised by or under the direction of the board of
directors.
3.2 NUMBER OF DIRECTORS
The board of directors shall consist of between five (5) and nine (9)
members and shall initially be set at seven (7) members. The number of
directors may be changed by an amendment to this bylaw, duly adopted by the
board of directors or by the stockholders, or by a duly adopted amendment to the
certificate of incorporation.
3.3 ELECTION AND TERM OF OFFICE OF DIRECTORS
Except as provided in Section 3.4 of these bylaws, directors shall be
elected at each annual meeting of stockholders to hold office until the next
annual meeting. Each director, including a director elected or appointed to fill
a vacancy, shall hold office until the expiration of the term for which elected
and until a successor has been elected and qualified.
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<PAGE>
1.4 RESIGNATION AND VACANCIES
Any director may resign effective on giving written notice to the chairman
of the board, the president, the secretary or the board of directors, unless the
notice specifies a later time for that resignation to become effective. If the
resignation of a director is effective at a future time, the board of directors
may elect a successor to take office when the resignation becomes effective.
Vacancies in the board of directors may be filled by a majority of the
remaining directors, even if less than a quorum, or by a sole remaining
director; however, a vacancy created by the removal of a director by the vote of
the stockholders or by court order may be filled only by the affirmative vote of
a majority of the shares represented and voting at a duly held meeting at which
a quorum is present (which shares voting affirmatively also constitute a
majority of the required quorum). Each director so elected shall hold office
until the next annual meeting of the stockholders and until a successor has been
elected and qualified.
Unless otherwise provided in the certificate of incorporation or these
bylaws:
(i) Vacancies and newly created directorships resulting from any
increase in the authorized number of directors elected by all of the
stockholders having the right to vote as a single class may be filled by a
majority of the directors then in office, although less than a quorum, or by a
sole remaining director.
(ii) Whenever the holders of any class or classes of stock or series
thereof are entitled to elect one or more directors by the provisions of the
certificate of incorporation, vacancies and newly created directorships of such
class or classes or series may be filled by a majority of the directors elected
by such class or classes or series thereof then in office, or by a sole
remaining director so elected.
If at any time, by reason of death or resignation or other cause, the
corporation should have no directors in office, then any officer or any
stockholder or an executor, administrator, trustee or guardian of a stockholder,
or other fiduciary entrusted with like responsibility for the person or estate
of a stockholder, may call a special meeting of stockholders in accordance with
the provisions of the certificate of incorporation or these bylaws, or may apply
to the Court of Chancery for a decree summarily ordering an election as provided
in Section 211 of the General Corporation Law of Delaware.
If, at the time of filling any vacancy or any newly created directorship,
the directors then in office constitute less than a majority of the whole board
(as constituted immediately prior to any such increase), then the Court of
Chancery may, upon application of any stockholder or stockholders holding at
least ten (10) percent of the total number of the shares at the time outstanding
having the right to vote for such directors, summarily order an election to be
held to fill any such vacancies or newly created directorships, or to replace
the directors chosen by the directors then in office as aforesaid, which
election shall be governed by the provisions of Section 211 of the General
Corporation Law of Delaware as far as applicable.
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<PAGE>
3.5 REMOVAL OF DIRECTORS
Unless otherwise restricted by statute, by the certificate of incorporation
or by these bylaws, any director or the entire board of directors may be
removed, with or without cause, by the holders of a majority of the shares then
entitled to vote at an election of directors; provided, however, that, if and so
long as stockholders of the corporation are entitled to cumulative voting, if
less than the entire board is to be removed, no director may be removed without
cause if the votes cast against his removal would be sufficient to elect him if
then cumulatively voted at an election of the entire board of directors.
3.6 PLACE OF MEETINGS; MEETINGS BY TELEPHONE
Regular meetings of the board of directors may be held at any place within
or outside the State of Delaware that has been designated from time to time by
resolution of the board. In the absence of such a designation, regular meetings
shall be held at the principal executive office of the corporation. Special
meetings of the board may be held at any place within or outside the State of
Delaware that has been designated in the notice of the meeting or, if not stated
in the notice or if there is no notice, at the principal executive office of the
corporation.
Any meeting of the board, regular or special, may be held by conference
telephone or similar communication equipment, so long as all directors
participating in the meeting can hear one another; and all such participating
directors shall be deemed to be present in person at the meeting.
3.7 REGULAR MEETINGS
Regular meetings of the board of directors may be held without notice at
such time as shall from time to time be determined by the board of directors.
If any regular meeting day shall fall on a legal holiday, then the meeting shall
be held at the same time and place on the next succeeding full business day.
3.8 SPECIAL MEETINGS; NOTICE
Special meetings of the board of directors for any purpose or purposes may
be called at any time by the chairman of the board, the president, any vice
president, the secretary or any two directors.
Notice of the time and place of special meetings shall be delivered
personally or by telephone to each director or sent by first-class mail,
telecopy or telegram, charges prepaid, addressed to each director at that
director's address as it is shown on the records of the corporation. If the
notice is mailed, it shall be deposited in the United States mail at least four
(4) days before the time of the holding of the meeting. If the notice is
delivered personally or by telephone, telecopy or telegram, it shall be
delivered personally or by telephone or to the telegraph company at least forty-
eight (48) hours before the time of the holding of the meeting. Any oral notice
given personally or by telephone may be communicated either to the director or
to a person at the office of the director who the person giving the notice has
reason to believe will promptly communicate it to the director. The notice need
not specify the purpose or the place of the meeting, if the meeting is to be
held at the principal executive office of the corporation.
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<PAGE>
3.9 QUORUM
A majority of the authorized number of directors shall constitute a quorum
for the transaction of business, except to adjourn as provided in Section 3.10
of these bylaws. Every act or decision done or made by a majority of the
directors present at a duly held meeting at which a quorum is present shall be
regarded as the act of the board of directors, subject to the provisions of the
certificate of incorporation and applicable law.
A meeting at which a quorum is initially present may continue to transact
business notwithstanding the withdrawal of directors, if any action taken is
approved by at least a majority of the quorum for that meeting.
3.10 WAIVER OF NOTICE
Notice of a meeting need not be given to any director (i) who signs a
waiver of notice, whether before or after the meeting, or (ii) who attends the
meeting other than for the express purposed of objecting at the beginning of the
meeting to the transaction of any business because the meeting is not lawfully
called or convened. All such waivers shall be filed with the corporate records
or made part of the minutes of the meeting. A waiver of notice need not specify
the purpose of any regular or special meeting of the board of directors.
3.11 ADJOURNMENT
A majority of the directors present, whether or not constituting a quorum,
may adjourn any meeting of the board to another time and place.
3.12 NOTICE OF ADJOURNMENT
Notice of the time and place of holding an adjourned meeting of the board
need not be given unless the meeting is adjourned for more than twenty-four (24)
hours. If the meeting is adjourned for more than twenty-four (24) hours, then
notice of the time and place of the adjourned meeting shall be given before the
adjourned meeting takes place, in the manner specified in Section 3.8 of these
bylaws, to the directors who were not present at the time of the adjournment.
3.13 BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING
Any action required or permitted to be taken by the board of directors may
be taken without a meeting, provided that all members of the board individually
or collectively consent in writing to that action. Such action by written
consent shall have the same force and effect as a unanimous vote of the board of
directors. Such written consent and any counterparts thereof shall be filed with
the minutes of the proceedings of the board of directors.
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<PAGE>
3.14 FEES AND COMPENSATION OF DIRECTORS
Directors and members of committees may receive such compensation, if any,
for their services and such reimbursement of expenses as may be fixed or
determined by resolution of the board of directors. This Section 3.14 shall not
be construed to preclude any director from serving the corporation in any other
capacity as an officer, agent, employee or otherwise and receiving compensation
for those services.
3.15 APPROVAL OF LOANS TO OFFICERS
The corporation may lend money to, or guarantee any obligation of, or
otherwise assist any officer or other employee of the corporation or any of its
subsidiaries, including any officer or employee who is a director of the
corporation or any of its subsidiaries, whenever, in the judgment of the
directors, such loan, guaranty or assistance may reasonably be expected to
benefit the corporation. The loan, guaranty or other assistance may be with or
without interest and may be unsecured, or secured in such manner as the board of
directors shall approve, including, without limitation, a pledge of shares of
stock of the corporation. Nothing contained in this section shall be deemed to
deny, limit or restrict the powers of guaranty or warranty of the corporation at
common law or under any statute.
3.16 SOLE DIRECTOR PROVIDED BY CERTIFICATE OF INCORPORATION
In the event only one director is required by these bylaws or the
certificate of incorporation, then any reference herein to notices, waivers,
consents, meetings or other actions by a majority or quorum of the directors
shall be deemed to refer to such notice, waiver, etc., by such sole director,
who shall have all the rights and duties and shall be entitled to exercise all
of the powers and shall assume all the responsibilities otherwise herein
described as given to the board of directors.
ARTICLE IV
COMMITTEES
4.1 COMMITTEES OF DIRECTORS
The board of directors may, by resolution adopted by a majority of the
authorized number of directors, designate one (1) or more committees, each
consisting of two or more directors, to serve at the pleasure of the board. The
board may designate one (1) or more directors as alternate members of any
committee, who may replace any absent or disqualified member at any meeting of
the committee. The appointment of members or alternate members of a committee
requires the vote of a majority of the authorized number of directors. Any
committee, to the extent provided in the resolution of the board, shall have and
may exercise all the powers and authority of the board, but no such committee
shall have the power or authority to (i) amend the certificate of incorporation
(except that a committee may, to the extent authorized in the resolution or
resolutions providing for the issuance of shares of stock adopted by the board
of directors as provided in Section 151(a) of the General Corporation Law of
Delaware, fix
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the designations and any of the preferences or rights of such shares relating to
dividends, redemption, dissolution, any distribution of assets of the
corporation or the conversion into, or the exchange of such shares for, shares
of any other class or classes or any other series of the same or any other class
or classes of stock of the corporation), (ii) adopt an agreement of merger or
consolidation under Sections 251 or 252 of the General Corporation Law of
Delaware, (iii) recommend to the stockholders the sale, lease or exchange of all
or substantially all of the corporation's property and assets, (iv) recommend to
the stockholders a dissolution of the corporation or a revocation of a
dissolution or (v) amend the bylaws of the corporation; and, unless the board
resolution establishing the committee, the bylaws or the certificate of
incorporation expressly so provide, no such committee shall have the power or
authority to declare a dividend, to authorize the issuance of stock, or to adopt
a certificate of ownership and merger pursuant to Section 253 of the General
Corporation Law of Delaware.
4.2 MEETINGS AND ACTION OF COMMITTEES
Meetings and actions of committees shall be governed by, and held and taken
in accordance with, the following provisions of Article III of these bylaws:
Section 3.6 (place of meetings; meetings by telephone), Section 3.7 (regular
meetings), Section 3.8 (special meetings; notice), Section 3.9 (quorum),
Section 3.10 (waiver of notice), Section 3.11 (adjournment), Section 3.12
(notice of adjournment) and Section 3.13 (board action by written consent
without meeting), with such changes in the context of those bylaws as are
necessary to substitute the committee and its members for the board of directors
and its members; provided, however, that the time of regular meetings of
committees may be determined either by resolution of the board of directors or
by resolution of the committee, that special meetings of committees may also be
called by resolution of the board of directors, and that notice of special
meetings of committees shall also be given to all alternate members, who shall
have the right to attend all meetings of the committee. The board of directors
may adopt rules for the government of any committee not inconsistent with the
provisions of these bylaws.
4.3 COMMITTEE MINUTES
Each committee shall keep regular minutes of its meetings and report the
same to the board of directors when required.
ARTICLE V
OFFICERS
5.1 OFFICERS
The Corporate Officers of the corporation shall be a president, a secretary
and a chief financial officer. The corporation may also have, at the discretion
of the board of directors, a chairman of the board, one or more vice presidents
(however denominated), one or more assistant secretaries, a treasurer and one or
more assistant treasurers, and such other officers as may be appointed in
accordance with the provisions of Section 5.3 of these bylaws. Any number of
offices may be held by the same person.
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In addition to the Corporate Officers of the Company described above, there
may also be such Administrative Officers of the corporation as may be designated
and appointed from time to time by the president of the corporation in
accordance with the provisions of Section 5.12 of these bylaws.
5.2 ELECTION OF OFFICERS
The Corporate Officers of the corporation, except such officers as may be
appointed in accordance with the provisions of Section 5.3 or Section 5.5 of
these bylaws, shall be chosen by the board of directors, subject to the rights,
if any, of an officer under any contract of employment, and shall hold their
respective offices for such terms as the board of directors may from time to
time determine.
5.3 SUBORDINATE OFFICERS
The board of directors may appoint, or may empower the president to
appoint, such other Corporate Officers as the business of the corporation may
require, each of whom shall hold office for such period, have such power and
authority, and perform such duties as are provided in these bylaws or as the
board of directors may from time to time determine.
The president may from time to time designate and appoint Administrative
Officers of the corporation in accordance with the provisions of Section 5.12 of
these bylaws.
5.4 REMOVAL AND RESIGNATION OF OFFICERS
Subject to the rights, if any, of a Corporate Officer under any contract of
employment, any Corporate Officer may be removed, either with or without cause,
by the board of directors at any regular or special meeting of the board or,
except in case of a Corporate Officer chosen by the board of directors, by any
Corporate Officer upon whom such power of removal may be conferred by the board
of directors.
Any Corporate Officer may resign at any time by giving written notice to
the corporation. Any resignation shall take effect at the date of the receipt
of that notice or at any later time specified in that notice; and, unless
otherwise specified in that notice, the acceptance of the resignation shall not
be necessary to make it effective. Any resignation is without prejudice to the
rights, if any, of the corporation under any contract to which the Corporate
Officer is a party.
Any Administrative Officer designated and appointed by the president may be
removed, either with or without cause, at any time by the president. Any
Administrative Officer may resign at any time by giving written notice to the
president or to the secretary of the corporation.
5.5 VACANCIES IN OFFICES
A vacancy in any office because of death, resignation, removal,
disqualification or any other cause shall be filled in the manner prescribed in
these bylaws for regular appointments to that office.
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5.6 CHAIRMAN OF THE BOARD
The chairman of the board, if such an officer be elected, shall, if
present, preside at meetings of the board of directors and exercise such other
powers and perform such other duties as may from time to time be assigned to him
by the board of directors or as may be prescribed by these bylaws. If there is
no president, then the chairman of the board shall also be the chief executive
officer of the corporation and shall have the powers and duties prescribed in
Section 5.7 of these bylaws.
5.7 PRESIDENT
Subject to such supervisory powers, if any, as may be given by the board of
directors to the chairman of the board, if there be such an officer, the
president shall be the chief executive officer of the corporation and shall,
subject to the control of the board of directors, have general supervision,
direction and control of the business and the officers of the corporation. He
or she shall preside at all meetings of the stockholders and, in the absence or
nonexistence of a chairman of the board, at all meetings of the board of
directors. He or she shall have the general powers and duties of management
usually vested in the office of president of a corporation, and shall have such
other powers and perform such other duties as may be prescribed by the board of
directors or these bylaws.
5.8 VICE PRESIDENTS
In the absence or disability of the president, and if there is no chairman
of the board, the vice presidents, if any, in order of their rank as fixed by
the board of directors or, if not ranked, a vice president designated by the
board of directors, shall perform all 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 have such other powers and
perform such other duties as from time to time may be prescribed for them
respectively by the board of directors, these bylaws, the president or the
chairman of the board.
5.9 SECRETARY
The secretary shall keep or cause to be kept, at the principal executive
office of the corporation or such other place as the board of directors may
direct, a book of minutes of all meetings and actions of the board of directors,
committees of directors and stockholders. The minutes shall show the time and
place of each meeting, whether regular or special (and, if special, how
authorized and the notice given), the names of those present at directors'
meetings or committee meetings, the number of shares present or represented at
stockholders' meetings and the proceedings thereof.
The secretary shall keep, or cause to be kept, at the principal executive
office of the corporation or at the office of the corporation's transfer agent
or registrar, as determined by resolution of the board of directors, a share
register or a duplicate share register, showing the names of all stockholders
and their addresses, the number and classes of shares held by each, the number
and date of certificates evidencing such shares and the number and date of
cancellation of every certificate surrendered for cancellation.
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The secretary shall give, or cause to be given, notice of all meetings of
the stockholders and of the board of directors required to be given by law or by
these bylaws. He or she shall keep the seal of the corporation, if one be
adopted, in safe custody and shall have such other powers and perform such other
duties as may be prescribed by the board of directors or by these bylaws.
5.10 CHIEF FINANCIAL OFFICER
The chief financial officer shall keep and maintain, or cause to be kept
and maintained, adequate and correct books and records of accounts of the
properties and business transactions of the corporation, including accounts of
its assets, liabilities, receipts, disbursements, gains, losses, capital,
retained earnings and shares. The books of account shall at all reasonable
times be open to inspection by any director for a purpose reasonably related to
his position as a director.
The chief financial officer shall deposit all money and other valuables in
the name and to the credit of the corporation with such depositaries as may be
designated by the board of directors. He or she shall disburse the funds of the
corporation as may be ordered by the board of directors, shall render to the
president and directors, whenever they request it, an account of all of his or
her transactions as chief financial officer and of the financial condition of
the corporation, and shall have such other powers and perform such other duties
as may be prescribed by the board of directors or these bylaws.
5.11 ASSISTANT SECRETARY
The assistant secretary, if any, or, if there is more than one, the
assistant secretaries in the order determined by the board of directors (or if
there be no such determination, then in the order of their election) shall, in
the absence of the secretary or in the event of his or her inability or refusal
to act, 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
may from time to time prescribe.
5.12 ADMINISTRATIVE OFFICERS
In addition to the Corporate Officers of the corporation as provided in
Section 5.1 of these bylaws and such subordinate Corporate Officers as may be
appointed in accordance with Section 5.3 of these bylaws, there may also be such
Administrative Officers of the corporation as may be designated and appointed
from time to time by the president of the corporation. Administrative Officers
shall perform such duties and have such powers as from time to time may be
determined by the president or the board of directors in order to assist the
Corporate Officers in the furtherance of their duties. In the performance of
such duties and the exercise of such powers, however, such Administrative
Officers shall have limited authority to act on behalf of the corporation as the
board of directors shall establish, including but not limited to limitations on
the dollar amount and on the scope of agreements or commitments that may be made
by such Administrative Officers on behalf of the corporation, which limitations
may not be exceeded by such individuals or altered by the president without
further approval by the board of directors.
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5.13 AUTHORITY AND DUTIES OF OFFICERS
In addition to the foregoing powers, authority and duties, all officers of
the corporation shall respectively have such authority and powers and perform
such duties in the management of the business of the corporation as may be
designated from time to time by the board of directors.
ARTICLE VI.
INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES
AND OTHER AGENTS
6.1 INDEMNIFICATION OF DIRECTORS AND OFFICERS
The corporation shall, to the maximum extent and in the manner permitted by
the General Corporation Law of Delaware as the same now exists or may hereafter
be amended, indemnify any person 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 a director or officer
of the corporation. For purposes of this Section 6.1, a "director" or "officer"
of the corporation shall mean any person (i) who is or was a director or officer
of the corporation, (ii) who 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, or (iii) who was a director or officer of a
corporation which was a predecessor corporation of the corporation or of another
enterprise at the request of such predecessor corporation.
The corporation shall be required to indemnify a director or officer in
connection with an action, suit, or proceeding (or part thereof) initiated by
such director or officer only if the initiation of such action, suit, or
proceeding (or part thereof) by the director or officer was authorized by the
Board of Directors of the corporation.
The corporation shall pay the expenses (including attorney's fees) incurred
by a director or officer of the corporation entitled to indemnification
hereunder in defending any action, suit or proceeding referred to in this
Section 6.1 in advance of its final disposition; provided, however, that payment
of expenses incurred by a director or officer of the corporation in advance of
the final disposition of such action, suit or proceeding shall be made only upon
receipt of an undertaking by the director or officer to repay all amounts
advanced if it should ultimately be determined that the director of officer is
not entitled to be indemnified under this Section 6.1 or otherwise.
The rights conferred on any person by this Article shall not be exclusive
of any other rights which such person may have or hereafter acquire under any
statute, provision of the corporation's Certificate of Incorporation, these
bylaws, agreement, vote of the stockholders or disinterested directors or
otherwise.
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Any repeal or modification of the foregoing provisions of this Article
shall not adversely affect any right or protection hereunder of any person in
respect of any act or omission occurring prior to the time of such repeal or
modification.
6.2 INDEMNIFICATION OF OTHERS
The corporation shall have the power, to the maximum extent and in the
manner permitted by the General Corporation Law of Delaware as the same now
exists or may hereafter be amended, to indemnify 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 6.2, 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.
6.3 INSURANCE
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, partnership, joint venture, trust or
other enterprise against any liability asserted against him or her and incurred
by him or her in any such capacity, or arising out of his or her status as such,
whether or not the corporation would have the power to indemnify him or her
against such liability under the provisions of the General Corporation Law of
Delaware.
ARTICLE VII
RECORDS AND REPORTS
7.1 MAINTENANCE AND INSPECTION OF RECORDS
The corporation shall, either at its principal executive office or at such
place or places as designated by the board of directors, keep a record of its
stockholders listing their names and addresses and the number and class of
shares held by each stockholder, a copy of these bylaws as amended to date,
accounting books and other records of its business and properties.
Any stockholder of record, in person or by attorney or other agent, shall,
upon written demand under oath stating the purpose thereof, have the right
during the usual hours for business to inspect for any proper purpose the
corporation's stock ledger, a list of its stockholders, and its other books and
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records and to make copies or extracts therefrom. A proper purpose shall mean a
purpose reasonably related to such person's interest as a stockholder. In every
instance where an attorney or other agent is the person who seeks the right to
inspection, the demand under oath shall be accompanied by a power of attorney or
such other writing that authorizes the attorney or other agent to so act on
behalf of the stockholder. The demand under oath shall be directed to the
corporation at its registered office in Delaware or at its principal place of
business.
7.2 INSPECTION BY DIRECTORS
Any director shall have the right to examine the corporation's stock
ledger, a list of its stockholders and its other books and records for a purpose
reasonably related to his or her position as a director.
7.3 ANNUAL STATEMENT TO STOCKHOLDERS
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.
7.4 REPRESENTATION OF SHARES OF OTHER CORPORATIONS
The chairman of the board, if any, the president, any vice president, the
chief financial officer, the secretary or any assistant secretary of this
corporation, or any other person authorized by the board of directors or the
president or a vice president, is authorized to vote, represent and exercise on
behalf of this corporation all rights incident to any and all shares of the
stock of any other corporation or corporations standing in the name of this
corporation. The authority herein granted may be exercised either by such
person directly or by any other person authorized to do so by proxy or power of
attorney duly executed by such person having the authority.
7.5 CERTIFICATION AND INSPECTION OF BYLAWS
The original or a copy of these bylaws, as amended or otherwise altered to
date, certified by the secretary, shall be kept at the corporation's principal
executive office and shall be open to inspection by the stockholders of the
corporation, at all reasonable times during office hours.
ARTICLE VIII.
GENERAL MATTERS
8.1 RECORD DATE FOR PURPOSES OTHER THAN NOTICE AND VOTING
For purposes of determining the stockholders entitled to receive payment of
any dividend or other distribution or allotment of any rights or the
stockholders entitled to exercise any rights in respect of any
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change, conversion or exchange of stock, or for the purpose of any other lawful
action, the board of directors may fix, in advance, a record date, which shall
not precede the date upon which the resolution fixing the record date is adopted
and which shall not be more than sixty (60) days nor less than ten (10) days
before any such action. In that case, only stockholders of record at the close
of business on the date so fixed are entitled to receive the dividend,
distribution or allotment of rights, or to exercise such rights, as the case may
be, notwithstanding any transfer of any shares on the books of the corporation
after the record date so fixed, except as otherwise provided by law.
If the board of directors does not so fix a record date, then the record
date for determining stockholders for any such purpose shall be at the close of
business on the day on which the board of directors adopts the applicable
resolution.
8.2 CHECKS; DRAFTS; EVIDENCES OF INDEBTEDNESS
From time to time, the board of directors shall determine by resolution
which person or persons may sign or endorse all checks, drafts, other orders for
payment of money, notes or other evidences of indebtedness that are issued in
the name of or payable to the corporation, and only the persons so authorized
shall sign or endorse those instruments.
8.3 CORPORATE CONTRACTS AND INSTRUMENTS: HOW EXECUTED
The board of directors, except as otherwise provided in these bylaws, may
authorize and empower any officer or officers, or agent or agents, to enter into
any contract or execute any instrument in the name of and on behalf of the
corporation; such power and authority may be general or confined to specific
instances. Unless so authorized or ratified by the board of directors or within
the agency power of an officer, no officer, agent or employee shall have any
power or authority to bind the corporation by any contract or engagement or to
pledge its credit or to render it liable for any purpose or for any amount.
8.4 STOCK CERTIFICATES; TRANSFER; PARTLY PAID SHARES
The shares of the corporation shall be represented by certificates,
provided that the board of directors of the corporation may provide by
resolution or resolutions that some or all of any or all classes or series of
its stock shall be uncertificated shares. Any such resolution shall not apply
to shares represented by a certificate until such certificate is surrendered to
the corporation. Notwithstanding the adoption of such a resolution by the board
of directors, every holder of stock represented by certificates and, upon
request, every holder of uncertificated shares, shall be entitled to have a
certificate signed by, or in the name of the corporation by, the chairman or
vice-chairman of the board of directors, or the president or vice-president, and
by the treasurer or an assistant treasurer, or the secretary or an assistant
secretary of such corporation representing the number of shares registered in
certificate form. Any or all of the signatures on the certificate may be a
facsimile. In case any officer, transfer agent or registrar who has signed or
whose facsimile signature has been placed upon a certificate has 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 or she were such
officer, transfer agent or registrar at the date of issue.
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Certificates for shares shall be of such form and device as the board of
directors may designate and shall state the name of the record holder of the
shares represented thereby; its number; date of issuance; the number of shares
for which it is issued; a summary statement or reference to the powers,
designations, preferences or other special rights of such stock and the
qualifications, limitations or restrictions of such preferences and/or rights,
if any; a statement or summary of liens, if any; a conspicuous notice of
restrictions upon transfer or registration of transfer, if any; a statement as
to any applicable voting trust agreement; if the shares be assessable, or, if
assessments are collectible by personal action, a plain statement of such facts.
Upon surrender to the secretary or transfer agent of the corporation of a
certificate for shares duly endorsed or accompanied by proper evidence of
succession, assignment or authority to transfer, it shall be the duty of the
corporation to issue a new certificate to the person entitled thereto, cancel
the old certificate and record the transaction upon its books.
The corporation may issue the whole or any part of its shares as partly
paid and subject to call for the remainder of the consideration to be paid
therefor. Upon the face or back of each stock certificate issued to represent
any such partly paid shares, or upon the books and records of the corporation in
the case of uncertificated partly paid shares, the total amount of the
consideration to be paid therefor and the amount paid thereon shall be stated.
Upon the declaration of any dividend on fully paid shares, the corporation shall
declare a dividend upon partly paid shares of the same class, but only upon the
basis of the percentage of the consideration actually paid thereon.
8.5 SPECIAL DESIGNATION ON CERTIFICATES
If the corporation is authorized to issue more than one class of stock or
more than one series of any class, then the powers, the designations, the
preferences and the relative, participating, optional or other special rights of
each class of stock or series thereof and the qualifications, limitations or
restrictions of such preferences and/or rights shall be set forth in full or
summarized on the face or back of the certificate that the corporation shall
issue to represent such class or series of stock; provided, however, that,
except as otherwise provided in Section 202 of the General Corporation Law of
Delaware, in lieu of the foregoing requirements there may be set forth on the
face or back of the certificate that 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, the designations,
the preferences and the relative, participating, optional or other special
rights of each class of stock or series thereof and the qualifications,
limitations or restrictions of such preferences and/or rights.
8.6 LOST CERTIFICATES
Except as provided in this Section 8.6, no new certificates for shares
shall be issued to replace a previously issued certificate unless the latter is
surrendered to the corporation and cancelled at the same time. The board of
directors may, in case any share certificate or certificate for any other
security is lost, stolen or destroyed, authorize the issuance of replacement
certificates on such terms and conditions as the board may require; the board
may require indemnification of the corporation secured by a bond or other
adequate security sufficient to protect the corporation against any claim that
may be made against
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it, including any expense or liability, on account of the alleged loss, theft or
destruction of the certificate or the issuance of the replacement certificate.
G. TRANSFER AGENTS AND REGISTRARS
The board of directors may appoint one or more transfer agents or transfer
clerks, and one or more registrars, each of which shall be an incorporated bank
or trust company -- either domestic or foreign, who shall be appointed at such
times and places as the requirements of the corporation may necessitate and the
board of directors may designate.
H. CONSTRUCTION; DEFINITIONS
Unless the context requires otherwise, the general provisions, rules of
construction and definitions in the General Corporation Law of Delaware shall
govern the construction of these bylaws. Without limiting the generality of
this provision, as used in these bylaws, the singular number includes the
plural, the plural number includes the singular, and the term "person" includes
both an entity and a natural person.
ARTICLE IX.
AMENDMENTS
The original or other bylaws of the corporation may be adopted, amended or
repealed by the stockholders entitled to vote or by the board of directors of
the corporation. The fact that such power has been so conferred upon the
directors shall not divest the stockholders of the power, nor limit their power
to adopt, amend or repeal bylaws.
Whenever an amendment or new bylaw is adopted, it shall be copied in the
book of bylaws with the original bylaws, in the appropriate place. If any bylaw
is repealed, the fact of repeal with the date of the meeting at which the repeal
was enacted or the filing of the operative written consent(s) shall be stated in
said book.
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<PAGE>
TRUEVISION, INC.
INDEMNIFICATION AGREEMENT
This Indemnification Agreement ("Agreement") is effective as of
___________, 1995 by and between Truevision, Inc., a Delaware corporation (the
"Company"), and ________________________ ("Indemnitee").
WHEREAS, RasterOps, a California corporation ("RasterOps"), and Indemnitee
are parties to an indemnification agreement;
WHEREAS, RasterOps has determined to effect a reincorporation into Delaware
through a merger with the Company with the Company being the surviving
corporation;
WHEREAS, the Company desires to attract and retain the services of highly
qualified individuals, such as Indemnitee to serve the Company and its related
entities;
WHEREAS, to induce Indemnitee to continue to provide services to the
Company, the Company wishes to provide for the indemnification of, and the
advancement of expenses to, Indemnitee to the maximum extent permitted by law;
WHEREAS, the Company and Indemnitee recognize the continued difficulty in
obtaining liability insurance for the Company's directors, officers, employees,
agent and fiduciaries, the significant increases in the cost of such insurance
and the general reductions in the coverage of such insurance;
WHEREAS, the Company and the Indemnitee further recognize the substantial
increase in corporate litigation in general, subjecting directors, officers,
employees, agent and fiduciaries to expensive litigation risks at the same time
as the availability and coverage of liability insurance has been severely
limited;
WHEREAS, in connection with the Company's reincorporation, the Company and
Indemnitee desire to continue to have in place the additional protection
provided by an indemnification agreement providing for the indemnification and
advancement of expenses to the Indemnitee to the maximum extent permitted by
Delaware law; and
WHEREAS, in view of the considerations set forth above, the Company desires
that Indemnitee shall be indemnified and advanced expenses by the Company as set
forth herein.
NOW, THEREFORE, the Company and Indemnitee hereby agree as set forth below.
1. CERTAIN DEFINITIONS.
(a) "Change in Control" shall mean, and shall be deemed to have
occurred if, on or after the date of this Agreement, (i) any "person" (as such
term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934,
as amended), other than a trustee or other fiduciary holding securities
<PAGE>
under an employee benefit plan of the Company acting in such capacity or a
corporation owned directly or indirectly by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the Company,
becomes the "beneficial owner" (as defined in Rule 13d-3 under said Act),
directly or indirectly, of securities of the Company representing more than 50%
of the total voting power represented by the Company's then outstanding Voting
Securities, (ii) during any period of two consecutive years, individuals who at
the beginning of such period constitute the Board of Directors of the Company
and any new director whose election by the Board of Directors or nomination for
election by the Company's stockholders was approved by a vote of at least two
thirds (2/3) of the directors then still in office who either were directors at
the beginning of the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute a majority thereof,
(iii) the stockholders of the Company approve a merger or consolidation of the
Company with any other corporation other than a merger or consolidation which
would result in the Voting Securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or by
being converted into Voting Securities of the surviving entity) at least 80% of
the total voting power represented by the Voting Securities of the Company or
such surviving entity outstanding immediately after such merger or
consolidation, or (iv) the stockholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or disposition
by the Company of (in one transaction or a series of related transactions) all
or substantially all of the Company's assets.
(b) "Claim" shall mean with respect to a Covered Event: any
threatened, pending or completed action, suit, proceeding or alternative dispute
resolution mechanism, or any hearing, inquiry or investigation that Indemnitee
in good faith believes might lead to the institution of any such action, suit,
proceeding or alternative dispute resolution mechanism, whether civil, criminal,
administrative, investigative or other.
(c) References to the "Company" shall include, in addition to
Truevision, Inc., any constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger to which Truevision (or any
of its wholly owned subsidiaries) is a party which, if its separate existence
had continued, would have had power and authority to indemnify its directors,
officers, employees, agents or fiduciaries, so that if Indemnitee is or was a
director, officer, employee, agent or fiduciary of such constituent corporation,
or is or was serving at the request of such constituent corporation as a
director, officer, employee, agent or fiduciary of another corporation,
partnership, joint venture, employee benefit plan, trust or other enterprise,
Indemnitee shall stand in the same position under the provisions of this
Agreement with respect to the resulting or surviving corporation as Indemnitee
would have with respect to such constituent corporation if its separate
existence had continued.
(d) "Covered Event" shall mean any event or occurrence related to the
fact that Indemnitee is or was a director, officer, employee, agent or fiduciary
of the Company, or any subsidiary of the Company, or is or was serving at the
request of the Company as a director, officer, employee, agent or fiduciary of
another corporation, partnership, joint venture, trust or other enterprise, or
by reason of any action or inaction on the part of Indemnitee while serving in
such capacity.
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(e) "Expenses" shall mean any and all expenses (including attorneys'
fees and all other costs, expenses and obligations incurred in connection with
investigating, defending, being a witness in or participating in (including on
appeal), or preparing to defend, to be a witness in or to participate in, any
action, suit, proceeding, alternative dispute resolution mechanism, hearing,
inquiry or investigation), judgments, fines, penalties and amounts paid in
settlement (if such settlement is approved in advance by the Company, which
approval shall not be unreasonably withheld) of any Claim and any federal,
state, local or foreign taxes imposed on the Indemnitee as a result of the
actual or deemed receipt of any payments under this Agreement.
(f) "Expense Advance" shall mean a payment to Indemnitee pursuant to
Section 3 of Expenses in advance of the settlement of or final judgement in any
action, suit, proceeding or alternative dispute resolution mechanism, hearing,
inquiry or investigation which constitutes a Claim.
(g) "Independent Legal Counsel" shall mean an attorney or firm of
attorneys, selected in accordance with the provisions of Section 2(d) hereof,
who shall not have otherwise performed services for the Company or Indemnitee
within the last three years (other than with respect to matters concerning the
rights of Indemnitee under this Agreement, or of other Indemnitees under similar
indemnity agreements).
(h) References to "other enterprises" shall include employee benefit
plans; references to "fines" shall include any excise taxes assessed on
Indemnitee with respect to an employee benefit plan; and references to "serving
at the request of the Company" shall include any service as a director, officer,
employee, agent or fiduciary of the Company which imposes duties on, or involves
services by, such director, officer, employee, agent or fiduciary with respect
to an employee benefit plan, its participants or its beneficiaries; and if
Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to
be in the interest of the participants and beneficiaries of an employee benefit
plan, Indemnitee shall be deemed to have acted in a manner "not opposed to the
best interests of the Company" as referred to in this Agreement.
(i) "Reviewing Party" shall mean, subject to the provisions of
Section 2(d), any person or body appointed by the Board of Directors in
accordance with applicable law to review the Company's obligations hereunder and
under applicable law, which may include a member or members of the Company's
Board of Directors, Independent Legal Counsel or any other person or body not a
party to the particular Claim for which Indemnitee is seeking indemnification.
(j) "Section" refers to a section of this Agreement unless otherwise
indicated.
(k) "Voting Securities" shall mean any securities of the Company that
vote generally in the election of directors.
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2. INDEMNIFICATION.
(a) INDEMNIFICATION OF EXPENSES. Subject to the provisions of
Section 2(b) below, the Company shall indemnify Indemnitee for Expenses to the
fullest extent permitted by law if Indemnitee was or is or becomes a party to or
witness or other participant in, or is threatened to be made a party to or
witness or other participant in, any Claim (whether by reason of or arising in
part out of a Covered Event), including all interest, assessments and other
charges paid or payable in connection with or in respect of such Expenses.
(b) REVIEW OF INDEMNIFICATION OBLIGATIONS. Notwithstanding the
foregoing, in the event any Reviewing Party shall have determined (in a written
opinion, in any case in which Independent Legal Counsel is the Reviewing Party)
that Indemnitee is not entitled to be indemnified hereunder under applicable
law, (i) the Company shall have no further obligation under Section 2(a) to make
any payments to Indemnitee not made prior to such determination by such
Reviewing Party, and (ii) the Company shall be entitled to be reimbursed by
Indemnitee (who hereby agrees to reimburse the Company) for all Expenses
theretofore paid to Indemnitee to which Indemnitee is not entitled hereunder
under applicable law; PROVIDED, HOWEVER, that if Indemnitee has commenced or
thereafter commences legal proceedings in a court of competent jurisdiction to
secure a determination that Indemnitee is entitled to be indemnified hereunder
under applicable law, any determination made by any Reviewing Party that
Indemnitee is not entitled to be indemnified hereunder under applicable law
shall not be binding and Indemnitee shall not be required to reimburse the
Company for any Expenses theretofore paid in indemnifying Indemnitee until a
final judicial determination is made with respect thereto (as to which all
rights of appeal therefrom have been exhausted or lapsed). Indemnitee's
obligation to reimburse the Company for any Expenses shall be unsecured and no
interest shall be charged thereon.
(c) INDEMNITEE RIGHTS ON UNFAVORABLE DETERMINATION; BINDING EFFECT.
If any Reviewing Party determines that Indemnitee substantively is not entitled
to be indemnified hereunder in whole or in part under applicable law, Indemnitee
shall have the right to commence litigation seeking an initial determination by
the court or challenging any such determination by such Reviewing Party or any
aspect thereof, including the legal or factual bases therefor, and, subject to
the provisions of Section 15, the Company hereby consents to service of process
and to appear in any such proceeding. Absent such litigation, any determination
by any Reviewing Party shall be conclusive and binding on the Company and
Indemnitee.
(d) SELECTION OF REVIEWING PARTY; CHANGE IN CONTROL. If there has
not been a Change in Control, any Reviewing Party shall be selected by the Board
of Directors, and if there has been such a Change in Control (other than a
Change in Control which has been approved by a majority of the Company's Board
of Directors who were directors immediately prior to such Change in Control),
any Reviewing Party with respect to all matters thereafter arising concerning
the rights of Indemnitee to indemnification of Expenses under this Agreement or
any other agreement or under the Company's Certificate of Incorporation or
Bylaws as now or hereafter in effect, or under any other applicable law, if
desired by Indemnitee, shall be Independent Legal Counsel selected by Indemnitee
and approved by the Company (which approval shall not be unreasonably withheld).
Such counsel, among other things, shall render its written opinion to the
Company and Indemnitee as to whether and to what extent
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Indemnitee would be entitled to be indemnified hereunder under applicable law
and the Company agrees to abide by such opinion. The Company agrees to pay the
reasonable fees of the Independent Legal Counsel referred to above and to
indemnify fully such counsel against any and all expenses (including attorneys'
fees), claims, liabilities and damages arising out of or relating to this
Agreement or its engagement pursuant hereto. Notwithstanding any other
provision of this Agreement, the Company shall not be required to pay Expenses
of more than one Independent Legal Counsel in connection with all matters
concerning a single Indemnitee, and such Independent Legal Counsel shall be the
Independent Legal Counsel for any or all other Indemnitees unless (i) the
employment of separate counsel by one or more Indemnitees has been previously
authorized by the Company in writing, or (ii) an Indemnitee shall have provided
to the Company a written statement that such Indemnitee has reasonably concluded
that there may be a conflict of interest between such Indemnitee and the other
Indemnitees with respect to the matters arising under this Agreement.
(e) MANDATORY PAYMENT OF EXPENSES. Notwithstanding any other
provision of this Agreement other than Section 10 hereof, to the extent that
Indemnitee has been successful on the merits or otherwise, including, without
limitation, the dismissal of an action without prejudice, in defense of any
Claim, Indemnitee shall be indemnified against all Expenses incurred by
Indemnitee in connection therewith.
3. EXPENSE ADVANCES.
(a) OBLIGATION TO MAKE EXPENSE ADVANCES. Upon receipt of a written
undertaking by or on behalf of the Indemnitee to repay such amounts if it shall
ultimately be determined that the Indemnitee is not entitled to be indemnified
therefore by the Company hereunder under applicable law, the Company shall make
Expense Advances to Indemnitee.
(b) FORM OF UNDERTAKING. Any obligation to repay any Expense
Advances hereunder pursuant to a written undertaking by the Indemnitee shall be
unsecured and no interest shall be charged thereon.
(c) DETERMINATION OF REASONABLE EXPENSE ADVANCES. The parties agree
that for the purposes of any Expense Advance for which Indemnitee has made
written demand to the Company in accordance with this Agreement, all Expenses
included in such Expense Advance that are certified by affidavit of Indemnitee's
counsel as being reasonable shall be presumed conclusively to be reasonable.
4. PROCEDURES FOR INDEMNIFICATION AND EXPENSE ADVANCES.
(a) TIMING OF PAYMENTS. All payments of Expenses (including without
limitation Expense Advances) by the Company to the Indemnitee pursuant to this
Agreement shall be made to the fullest extent permitted by law as soon as
practicable after written demand by Indemnitee therefor is presented to the
Company, but in no event later than thirty (30) business days after such written
demand by Indemnitee is presented to the Company, except in the case of Expense
Advances, which shall be made no later than ten (10) business days after such
written demand by Indemnitee is presented to the Company.
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(b) NOTICE/COOPERATION BY INDEMNITEE. Indemnitee shall, as a
condition precedent to Indemnitee's right to be indemnified or Indemnitee's
right to receive Expense Advances under this Agreement, give the Company notice
in writing as soon as practicable of any Claim made against Indemnitee for which
indemnification will or could be sought under this Agreement. Notice to the
Company shall be directed to the Chief Executive Officer of the Company at the
address shown on the signature page of this Agreement (or such other address as
the Company shall designate in writing to Indemnitee). In addition, Indemnitee
shall give the Company such information and cooperation as it may reasonably
require and as shall be within Indemnitee's power.
(c) NO PRESUMPTIONS; BURDEN OF PROOF. For purposes of this
Agreement, the termination of any Claim by judgment, order, settlement (whether
with or without court approval) or conviction, or upon a plea of NOLO
CONTENDERE, or its equivalent, shall not create a presumption that Indemnitee
did not meet any particular standard of conduct or have any particular belief or
that a court has determined that indemnification is not permitted by this
Agreement or applicable law. In addition, neither the failure of any Reviewing
Party to have made a determination as to whether Indemnitee has met any
particular standard of conduct or had any particular belief, nor an actual
determination by any Reviewing Party that Indemnitee has not met such standard
of conduct or did not have such belief, prior to the commencement of legal
proceedings by Indemnitee to secure a judicial determination that Indemnitee
should be indemnified under this Agreement under applicable law, shall be a
defense to Indemnitee's claim or create a presumption that Indemnitee has not
met any particular standard of conduct or did not have any particular belief.
In connection with any determination by any Reviewing Party or otherwise as to
whether the Indemnitee is entitled to be indemnified hereunder under applicable
law, the burden of proof shall be on the Company to establish that Indemnitee is
not so entitled.
(d) NOTICE TO INSURERS. If, at the time of the receipt by the
Company of a notice of a Claim pursuant to Section 4(b) hereof, the Company has
liability insurance in effect which may cover such Claim, the Company shall give
prompt notice of the commencement of such Claim to the insurers in accordance
with the procedures set forth in the respective policies. The Company shall
thereafter take all necessary or desirable action to cause such insurers to pay,
on behalf of the Indemnitee, all amounts payable as a result of such Claim in
accordance with the terms of such policies.
(e) SELECTION OF COUNSEL. In the event the Company shall be
obligated hereunder to provide indemnification for or make any Expense Advances
with respect to the Expenses of any Claim, the Company, if appropriate, shall be
entitled to assume the defense of such Claim with counsel approved by Indemnitee
(which approval shall not be unreasonably withheld) upon the delivery to
Indemnitee of written notice of the Company's election to do so. After delivery
of such notice, approval of such counsel by Indemnitee and the retention of such
counsel by the Company, the Company will not be liable to Indemnitee under this
Agreement for any fees or expenses of separate counsel subsequently retained by
or on behalf of Indemnitee with respect to the same Claim; provided that,
(i) Indemnitee shall have the right to employ Indemnitee's separate counsel in
any such Claim at Indemnitee's expense and (ii) if (A) the employment of
separate counsel by Indemnitee has been previously authorized by the Company,
(B) Indemnitee shall have reasonably concluded that there may be a conflict of
interest between the Company and Indemnitee in the conduct of any such defense,
or (C) the Company shall not continue to
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retain such counsel to defend such Claim, then the fees and expenses of
Indemnitee's separate counsel shall be Expenses for which Indemnitee may receive
indemnification or Expense Advances hereunder.
5. ADDITIONAL INDEMNIFICATION RIGHTS; NONEXCLUSIVITY.
(a) SCOPE. The Company hereby agrees to indemnify the Indemnitee to
the fullest extent permitted by law, notwithstanding that such indemnification
is not specifically authorized by the other provisions of this Agreement, the
Company's Certificate of Incorporation, the Company's Bylaws or by statute. In
the event of any change after the date of this Agreement in any applicable law,
statute or rule which expands the right of a Delaware corporation to indemnify a
member of its board of directors or an officer, employee, agent or fiduciary, it
is the intent of the parties hereto that Indemnitee shall enjoy by this
Agreement the greater benefits afforded by such change. In the event of any
change in any applicable law, statute or rule which narrows the right of a
Delaware corporation to indemnify a member of its board of directors or an
officer, employee, agent or fiduciary, such change, to the extent not otherwise
required by such law, statute or rule to be applied to this Agreement, shall
have no effect on this Agreement or the parties' rights and obligations
hereunder except as set forth in Section 10(a) hereof.
(b) NONEXCLUSIVITY. The indemnification and the payment of Expense
Advances provided by this Agreement shall be in addition to any rights to which
Indemnitee may be entitled under the Company's Certificate of Incorporation, its
Bylaws, any other agreement, any vote of stockholders or disinterested
directors, the General Corporation Law of the State of Delaware, or otherwise.
The indemnification and the payment of Expense Advances provided under this
Agreement shall continue as to Indemnitee for any action taken or not taken
while serving in an indemnified capacity even though subsequent thereto
Indemnitee may have ceased to serve in such capacity.
6. NO DUPLICATION OF PAYMENTS. The Company shall not be liable under
this Agreement to make any payment in connection with any Claim made against
Indemnitee to the extent Indemnitee has otherwise actually received payment
(under any insurance policy, provision of the Company's Certificate of
Incorporation, Bylaws or otherwise) of the amounts otherwise payable hereunder.
7. PARTIAL INDEMNIFICATION. If Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for some or a
portion of Expenses incurred in connection with any Claim, but not, however, for
all of the total amount thereof, the Company shall nevertheless indemnify
Indemnitee for the portion of such Expenses to which Indemnitee is entitled.
8. MUTUAL ACKNOWLEDGEMENT. Both the Company and Indemnitee acknowledge
that in certain instances, federal law or applicable public policy may prohibit
the Company from indemnifying its directors, officers, employees, agents or
fiduciaries under this Agreement or otherwise. Indemnitee understands and
acknowledges that the Company has undertaken or may be required in the future to
undertake with the Securities and Exchange Commission to submit the question of
indemnification to a court in certain circumstances for a determination of the
Company's right under public policy to indemnify Indemnitee.
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9. LIABILITY INSURANCE. To the extent the Company maintains liability
insurance applicable to directors, officers, employees, agents or fiduciaries,
Indemnitee shall be covered by such policies in such a manner as to provide
Indemnitee the same rights and benefits as are provided to the most favorably
insured of the Company's directors, if Indemnitee is a director; or of the
Company's officers, if Indemnitee is not a director of the Company but is an
officer; or of the Company's key employees, agents or fiduciaries, if Indemnitee
is not an officer or director but is a key employee, agent or fiduciary.
10. EXCEPTIONS. Notwithstanding any other provision of this Agreement,
the Company shall not be obligated pursuant to the terms of this Agreement:
(a) EXCLUDED ACTION OR OMISSIONS. To indemnify or make Expense
Advances to Indemnitee with respect to Claims arising out of acts, omissions or
transactions for which Indemnitee is prohibited from receiving indemnification
under applicable law.
(b) CLAIMS INITIATED BY INDEMNITEE. To indemnify or make Expense
Advances to Indemnitee with respect to Claims initiated or brought voluntarily
by Indemnitee and not by way of defense, counterclaim or crossclaim, except
(i) with respect to actions or proceedings brought to establish or enforce a
right to indemnification under this Agreement or any other agreement or
insurance policy or under the Company's Certificate of Incorporation or Bylaws
now or hereafter in effect relating to Claims for Covered Events, (ii) in
specific cases if the Board of Directors has approved the initiation or bringing
of such Claim, or (iii) as otherwise required under Section 145 of the Delaware
General Corporation Law, regardless of whether Indemnitee ultimately is
determined to be entitled to such indemnification, Expense Advances, or
insurance recovery, as the case may be.
(c) LACK OF GOOD FAITH. To indemnify Indemnitee for any Expenses
incurred by the Indemnitee with respect to any action instituted (i) by
Indemnitee to enforce or interpret this Agreement, if a court having
jurisdiction over such action determines as provided in Section 13 that each of
the material assertions made by the Indemnitee as a basis for such action was
not made in good faith or was frivolous, or (ii) by or in the name of the
Company to enforce or interpret this Agreement, if a court having jurisdiction
over such action determines as provided in Section 13 that each of the material
defenses asserted by Indemnitee in such action was made in bad faith or was
frivolous.
(d) CLAIMS UNDER SECTION 16(b). To indemnify Indemnitee for Expenses
and the payment of profits arising from the purchase and sale by Indemnitee of
securities in violation of Section 16(b) of the Securities Exchange Act of 1934,
as amended, or any similar successor statute.
11. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original.
12. BINDING EFFECT; SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the parties
hereto and their respective successors, assigns (including any direct or
indirect successor by purchase, merger, consolidation or otherwise to all or
substantially all of the business or assets of the Company), spouse, heirs and
personal and legal representatives. The Company shall require and cause any
successor (whether direct or indirect, and whether by
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purchase, merger, consolidation or otherwise) to all, substantially all, or a
substantial part, of the business or assets of the Company, by written agreement
in form and substance satisfactory to Indemnitee, expressly to assume and agree
to perform this Agreement in the same manner and to the same extent that the
Company would be required to perform if no such succession had taken place.
This Agreement shall continue in effect regardless of whether Indemnitee
continues to serve as a director, officer, employee, agent or fiduciary (as
applicable) of the Company or of any other enterprise at the Company's request.
13. EXPENSES INCURRED IN ACTION RELATING TO ENFORCEMENT OR INTERPRETATION.
In the event that any action is instituted by Indemnitee under this Agreement or
under any liability insurance policies maintained by the Company to enforce or
interpret any of the terms hereof or thereof, Indemnitee shall be entitled to be
indemnified for all Expenses incurred by Indemnitee with respect to such action
(including without limitation attorneys' fees), regardless of whether Indemnitee
is ultimately successful in such action, unless as a part of such action a court
having jurisdiction over such action makes a final judicial determination (as to
which all rights of appeal therefrom have been exhausted or lapsed) that each of
the material assertions made by Indemnitee as a basis for such action was not
made in good faith or was frivolous; provided, however, that until such final
judicial determination is made, Indemnitee shall be entitled under Section 3 to
receive payment of Expense Advances hereunder with respect to such action. In
the event of an action instituted by or in the name of the Company under this
Agreement to enforce or interpret any of the terms of this Agreement, Indemnitee
shall be entitled to be indemnified for all Expenses incurred by Indemnitee in
defense of such action (including without limitation costs and expenses incurred
with respect to Indemnitee's counterclaims and cross-claims made in such
action), unless as a part of such action a court having jurisdiction over such
action makes a final judicial determination (as to which all rights of appeal
therefrom have been exhausted or lapsed) that each of the material defenses
asserted by Indemnitee in such action was made in bad faith or was frivolous;
provided, however, that until such final judicial determination is made,
Indemnitee shall be entitled under Section 3 to receive payment of Expense
Advances hereunder with respect to such action.
14. PERIOD OF LIMITATIONS. No legal action shall be brought and no cause
of action shall be asserted by or in the right of the Company against
Indemnitee, Indemnitee's estate, spouse, heirs, executors or personal or legal
representatives after the expiration of two years from the date of accrual of
such cause of action, and any claim or cause of action of the Company shall be
extinguished and deemed released unless asserted by the timely filing of a legal
action within such two year period; PROVIDED, HOWEVER, that if any shorter
period of limitations is otherwise applicable to any such cause of action, such
shorter period shall govern.
15. NOTICE. All notices, requests, demands and other communications under
this Agreement shall be in writing and shall be deemed duly given (i) if
delivered by hand and signed for by the party addressed, on the date of such
delivery, or (ii) if mailed by domestic certified or registered mail with
postage prepaid, on the third business day after the date postmarked. Addresses
for notice to either party are as shown on the signature page of this Agreement,
or as subsequently modified by written notice.
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16. CONSENT TO JURISDICTION. The Company and Indemnitee each hereby
irrevocably consent to the jurisdiction of the courts of the State of Delaware
for all purposes in connection with any action or proceeding which arises out of
or relates to this Agreement and agree that any action instituted under this
Agreement shall be commenced, prosecuted and continued only in the Court of
Chancery of the State of Delaware in and for New Castle County, which shall be
the exclusive and only proper forum for adjudicating such a claim.
17. SEVERABILITY. The provisions of this Agreement shall be severable in
the event that any of the provisions hereof (including any provision within a
single section, paragraph or sentence) are held by a court of competent
jurisdiction to be invalid, void or otherwise unenforceable, and the remaining
provisions shall remain enforceable to the fullest extent permitted by law.
Furthermore, to the fullest extent possible, the provisions of this Agreement
(including without limitation each portion of this Agreement containing any
provision held to be invalid, void or otherwise unenforceable, that is not
itself invalid, void or unenforceable) shall be construed so as to give effect
to the intent manifested by the provision held invalid, illegal or
unenforceable.
18. CHOICE OF LAW. This Agreement, and all rights, remedies, liabilities,
powers and duties of the parties to this Agreement, shall be governed by and
construed in accordance with the laws of the State of Delaware as applied to
contracts between Delaware residents entered into and to be performed entirely
in the State of Delaware without regard to principles of conflicts of laws.
19. SUBROGATION. In the event of payment under this Agreement, the
Company shall be subrogated to the extent of such payment to all of the rights
of recovery of Indemnitee, who shall execute all documents required and shall do
all acts that may be necessary to secure such rights and to enable the Company
effectively to bring suit to enforce such rights.
20. AMENDMENT AND TERMINATION. No amendment, modification, termination or
cancellation of this Agreement shall be effective unless it is in writing signed
by both the parties hereto. No waiver of any of the provisions of this
Agreement shall be deemed to be or shall constitute a waiver of any other
provisions hereof (whether or not similar), nor shall such waiver constitute a
continuing waiver.
21. INTEGRATION AND ENTIRE AGREEMENT. This Agreement sets forth the
entire understanding between the parties hereto and supersedes and merges all
previous written and oral negotiations, commitments, understandings and
agreements relating to the subject matter hereof between the parties hereto.
22. NO CONSTRUCTION AS EMPLOYMENT AGREEMENT. Nothing contained in this
Agreement shall be construed as giving Indemnitee any right to be retained in
the employ of the Company or any of its subsidiaries or affiliated entities.
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IN WITNESS WHEREOF, the parties hereto have executed this Indemnification
Agreement as of the date first above written.
TRUEVISION, INC.
By:
--------------------------------
Name:
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Title:
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Address: 2500 Walsh Avenue
Santa Calra, CA 95051
AGREED TO AND ACCEPTED
INDEMNITEE:
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(signature)
-----------------------------------
Name
-----------------------------------
Address
-----------------------------------
-----------------------------------
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