<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
American Body Armor & Equipment, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
N/A
- --------------------------------------------------------------------------------
(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>
American Body Armor & Equipment, Inc.
191 Nassau Place Road
Yulee, Florida 32097
July 1, 1996
To Our Shareholders:
On behalf of your Company's Board of Directors, I cordially invite you to
attend the Annual Meeting of Shareholders to be held on Tuesday, July 16, 1996,
at 10:00 A.M., New York City time, at The Metropolitan Club, 1 East 60th Street,
New York, New York 10022.
The accompanying Notice of Meeting and Proxy Statement cover the details of
the matters to be presented.
A copy of the 1995 Annual Report is included with this mailing.
REGARDLESS OF WHETHER YOU PLAN TO ATTEND THE MEETING, I URGE THAT YOU
PARTICIPATE BY COMPLETING AND RETURNING YOUR PROXY AS SOON AS POSSIBLE. YOUR
VOTE IS IMPORTANT AND WILL BE GREATLY APPRECIATED. YOU MAY REVOKE YOUR PROXY AND
VOTE IN PERSON IF YOU DECIDE TO ATTEND THE MEETING.
Cordially,
AMERICAN BODY ARMOR & EQUIPMENT, INC.
Jonathan M. Spiller
President and
Chief Executive Officer
JMS/ksh
<PAGE>
AMERICAN BODY ARMOR & EQUIPMENT, INC.
191 NASSAU PLACE ROAD
YULEE, FLORIDA 32097
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be Held on July 16, 1996
To Our Shareholders:
You are cordially invited to attend the Annual Meeting of Shareholders of
American Body Armor & Equipment, Inc., a Florida corporation (the "Company"), to
be held on Tuesday, July 16, 1996, at The Metropolitan Club, 1 East 60th Street,
New York, New York 10022, at 10:00 A.M., New York City time, or any adjournment
or postponement thereof (the "Meeting"), for the following purposes:
1. To elect six directors.
2. To consider and vote upon a proposal to change the name of the
Company to "Armor Holdings, Inc."
3. To consider and vote upon a proposal to reincorporate the Company
under the laws of the State of Delaware by means of a merger of
the Company with and into a newly formed wholly-owned subsidiary
incorporated in the State of Delaware, as described in the
accompanying Proxy Statement.
4. To consider and vote upon a proposal to increase the number of
shares of the Company's authorized common stock to 50,000,000
shares.
5. To consider and vote upon a proposal to create a series of
preferred stock with such rights, privileges and preferences as
the Board of Directors may determine from time to time.
<PAGE>
6. To consider and vote upon a proposal to adopt the Company's 1996
Stock Option Plan.
7. To consider and vote upon a proposal to adopt the Company's 1996
Non-Employee Directors Stock Option Plan.
8. To consider and vote upon a resolution ratifying the appointment
of Deloitte & Touche LLP as the Company's independent auditors
for the fiscal year ending December 31, 1996.
In addition to the matters enumerated above, the Company shall also
transact such other business as may properly come before the Meeting. Only
holders of record of the Company's Common Stock, par value $.03 per share, at
the close of business on June 17, 1996 will be entitled to notice of and to vote
at the Meeting.
YOUR VOTE IS IMPORTANT. PLEASE SIGN AND DATE THE ENCLOSED PROXY CARD AND
RETURN IT PROMPTLY IN THE ENCLOSED RETURN ENVELOPE, WHETHER OR NOT YOU EXPECT TO
ATTEND THE MEETING. YOU MAY REVOKE YOUR PROXY AND VOTE IN PERSON IF YOU DECIDE
TO ATTEND THE MEETING.
Carol T. Burke
Secretary
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AMERICAN BODY ARMOR & EQUIPMENT, INC.
191 NASSAU PLACE ROAD
YULEE, FLORIDA 32097
PROXY STATEMENT
Annual Meeting Of Shareholders
To Be Held on July 16, 1996
----------
INTRODUCTION
PROXY SOLICITATION AND GENERAL INFORMATION
This Proxy Statement and the enclosed form of proxy (the "Proxy Card") are
being furnished to the holders of Common Stock, par value $.03 per share (the
"Common Stock"), of American Body Armor & Equipment, Inc., a Florida corporation
(the "Company" or "ABA"), in connection with the solicitation of proxies by the
Board of Directors of the Company for use at the Annual Meeting of Shareholders
to be held on July 16, 1996, at The Metropolitan Club, 1 East 60th Street, New
York, New York 10022, at 10:00 A.M., New York City time, and at any adjournment
or postponement thereof (the "Meeting"). This Proxy Statement and the Proxy Card
are first being sent to shareholders on or about July 1 , 1996.
At the Meeting, holders of Common Stock (the "Shareholders") will be asked:
1. To elect six directors.
2. To consider and vote upon a proposal to change the name of the
Company to "Armor Holdings, Inc."
3. To consider and vote upon a proposal to reincorporate the Company
under the laws of the State of Delaware by means of a merger of
the Company with and into a newly formed wholly-owned subsidiary
incorporated in the State of Delaware, as described herein (the
"Reincorporation").
<PAGE>
4. To consider and vote upon a proposal to increase the number of
shares of the Company's authorized Common Stock to 50,000,000
shares.
5. To consider and vote upon a proposal to create a series of
preferred stock with such rights, privileges and preferences as
the Board of Directors may determine from time to time.
6. To consider and vote upon a proposal to adopt the Company's 1996
Stock Option Plan (the "1996 Plan").
7. To consider and vote upon a proposal to adopt the Company's 1996
Non-Employee Directors Stock Option Plan (the "1996 Directors
Plan").
8. To consider and vote upon a resolution ratifying the appointment
of Deloitte & Touche LLP as the Company's independent auditors
for the fiscal year ending December 31, 1996 ("Fiscal 1996").
In addition to the matters enumerated above, the Shareholders will also be
asked to transact such other business as may properly come before the Meeting.
The Board of Directors has fixed the close of business on June 17, 1996, as
the record date for the determination of Shareholders entitled to notice of and
to vote at the Meeting. Each such Shareholder will be entitled to one vote for
each share of Common Stock held on all matters to come before the Meeting and
may vote in person or by proxy authorized in writing.
Shareholders are requested to complete, sign, date and promptly return the
Proxy Card in the enclosed envelope. Common Stock represented by properly
executed proxies received by the Company and not revoked will be voted at the
Meeting in accordance with instructions contained therein. If the Proxy Card is
signed and returned without instructions, the shares will be voted FOR the
election of each nominee for director named herein (Proposal No. 1) and FOR
Proposal Nos. 2, 3, 4, 5, 6, 7 and 8. A Shareholder who so desires may revoke
his proxy at any time before it is voted at the Meeting by delivering written
notice to the Company (attention: Corporate Secretary), by duly executing a
proxy bearing a later date or by casting a ballot at the Meeting. Attendance at
the Meeting will not in and of itself constitute a revocation of a proxy.
The Board of Directors knows of no other matters that are to be brought
before the Meeting other than as set forth in the Notice of Meeting. If any
other matters properly come before the Meeting, the persons named in the
enclosed form of proxy or their substitutes will vote in accordance with their
best judgment on such matters.
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THE MEETING
The Meeting will be held on Tuesday, July 16, 1996, at 10:00 A.M., New York
City time, at The Metropolitan Club, 1 East 60th Street, New York, New York
10022.
Record Date; Shares Outstanding And Entitled To Vote
Only Shareholders as of the close of business on June 17, 1996 (the "Record
Date") are entitled to notice of and to vote at the Meeting. As of the Record
Date, there were 6,812,490 shares of Common Stock outstanding and entitled to
vote, with each share entitled to one vote. See "SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT -- CHANGES IN CONTROL" for a discussion
of the conversion of the Preferred Stock.
Required Votes
A plurality of the votes cast by the holders of shares of Common Stock
present in person or by proxy at the Meeting at which a quorum is present is
required for the election of a nominee for director. The approval and adoption
of Proposal Nos. 2, 4, 5, 6, 7 and 8 requires the affirmative vote of the
holders of a majority of the outstanding shares of Common Stock present or
represented by proxy and voting at a shareholders meeting at which a quorum is
present. The approval and adoption of Proposal No. 3 requires the
affirmative vote of the holders of a majority of the outstanding shares of
Common Stock entitled to vote on said Proposal at a meeting of shareholders.
Abstentions and broker non-votes will have the legal effect of a vote against
Proposal Nos. 2, 3, 4 and 5. Abstentions will have the legal effect of a
vote against Proposal Nos. 6, 7 and 8. With respect to a broker non-vote on
Proposal Nos. 6, 7 and 8, such shares will not be considered present at the
Meeting and (since they will not be counted in respect of the matter) the broker
non-votes will have the practical effect of reducing the number of affirmative
votes required to achieve a majority vote for the matter by reducing the total
number of shares from which the majority is calculated.
The directors and officers of the Company (collectively "Management") own,
in the aggregate, approximately 85.9% of the outstanding shares of the Company's
Common Stock and have indicated their intention to vote for each director
nominee and for all other proposals described in this Proxy Statement. As such,
because Management owns approximately 85.9% of the Company's outstanding shares
of Common Stock, it is virtually assured that each of the nominees for director
will be elected and each of the other proposals described herein will be
adopted.
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<PAGE>
Proxy Solicitation
The Company will bear the costs of the solicitation of proxies for the
Meeting. In addition, directors, officers and employees of the Company may
solicit proxies from Shareholders by mail, telephone, telegram, personal
interview or otherwise. Such directors, officers and employees will not receive
additional compensation but may be reimbursed for out-of-pocket expenses in
connection with such solicitation. Brokers, nominees, fiduciaries and other
custodians have been requested to forward soliciting material to the beneficial
owners of Common Stock held of record by them and such custodians will be
reimbursed for their reasonable expenses.
Independent Accountants
The Company has been advised that representatives of Deloitte & Touche LLP,
the Company's independent accountants for the fiscal year ended December 31,
1995, the Company's most recently completed fiscal year ("Fiscal 1995"), will
attend the Meeting, will have an opportunity to make a statement if they desire
to do so and will be available to respond to appropriate questions.
SECURITY OWNERSHIP
OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information, as of June 17, 1996, to
the knowledge of the Company, regarding the beneficial ownership of Common
Stock, which is the Company's only class of outstanding voting securities, by:
(i) each Shareholder who owns more than 5% of the outstanding Common Stock of
the Company; (ii) each director; (iii) each of the named executive officers of
the Company; and (iv) all directors and executive officers of the Company as a
group. The information set forth in the table and accompanying footnotes has
been furnished by the named beneficial owners. Since the table and accompanying
footnotes reflect beneficial ownership determined pursuant to the applicable
rules of the Securities and Exchange Commission, the information is not
necessarily indicative of beneficial ownership for any other purpose.
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<PAGE>
================================================================================
Name and Address Common Stock No. of
of Beneficial Owner Shares Beneficially Owned % of Class
================================================================================
Warren B. Kanders (1) and
Kanders Florida Holdings, Inc. 4,525,178 (1) 66.4%
c/o American Body Armor & Equipment, Inc.
191 Nassau Place Road
Yulee, FL 32097
- --------------------------------------------------------------------------------
Jonathan M. Spiller
c/o American Body Armor & Equipment, Inc. 740,205 (2) 10.9%
191 Nassau Place Road
Yulee, FL 32097
- --------------------------------------------------------------------------------
Richmont Capital Partners I, L.P. 700,000 (3) 10.3%
4300 Westgrove Drive
Dallas, TX 75248
- --------------------------------------------------------------------------------
J. Michael Elliott
c/o American Body Armor & Equipment, Inc. 189,000 (4) 2.8%
191 Nassau Place Road
Yulee, FL 32097
- --------------------------------------------------------------------------------
Burtt R. Ehrlich
c/o American Body Armor & Equipment, Inc. 182,300 (5) 2.7%
191 Nassau Place Road
Yulee, FL 32097
- --------------------------------------------------------------------------------
Nicholas Sokolow
c/o American Body Armor & Equipment, Inc. 122,500 (6) 1.8%
191 Nassau Place Road
Yulee, FL 32097
- --------------------------------------------------------------------------------
Richard T. Bistrong
c/o American Body Armor & Equipment, Inc. 50,000 (7) .73%
191 Nassau Place Road
Yulee, FL 32097
- --------------------------------------------------------------------------------
Thomas W. Strauss
c/o American Body Armor & Equipment, Inc. 40,000 (8) .59%
191 Nassau Place Road
Yulee, FL 32097
- --------------------------------------------------------------------------------
Richard C. Bartlett
c/o American Body Armor & Equipment, Inc. 0 (9) 0%
191 Nassau Place Road
Yulee, FL 32097
- --------------------------------------------------------------------------------
Executive Officers and Directors as a Group 5,849,183 (1)(2)(4)(5) 85.9%
(8 Individuals) (6)(7)(8)(9)
================================================================================
(1) Represents 4,524,178 shares owned by Kanders Florida Holdings, Inc.
("KFH"), which are deemed to be beneficially owned by Warren B. Kanders
because he is the sole shareholder and sole director of KFH. Of the shares
listed, Mr. Kanders owns 29,141 shares individually.
(2) Includes 432,000 stock options granted to Mr. Spiller under the terms of
his previous employment agreement, which was executed on January 1, 1994
but which was mutually terminated by Mr. Spiller and the Company and
superseded by a new employment agreement executed on January 18, 1996, and
18,000 shares granted to Mr. Spiller pursuant to the Company's 1994
Incentive Stock Plan. Such options are fully
5
<PAGE>
vested but unexercised. Also includes a maximum of 50,000 stock options,
subject to reduction, awarded to Mr. Spiller on January 19, 1996. These
options are fully vested but unexercised. Of the 740,205 shares listed,
690,105 are subject to a three year lock-up agreement by and among Mr.
Spiller and KFH. Pursuant to the terms of a letter agreement, dated January
18, 1996 (the "Letter Agreement"), Mr. Spiller agreed that he will not,
directly or indirectly, without the prior written consent of KFH, offer to
sell, sell, grant any options for the sale of, assign, transfer, pledge,
hypothecate or otherwise encumber or dispose of such shares of Common Stock
of the Company or securities convertible into, exercisable or exchangeable
for or evidencing any right to purchase or subscribe for, such shares of
Common Stock of the Company or dispose of any beneficial interest therein
for a period of three years from January 18, 1996, except as provided in
such Letter Agreement. KFH and Mr. Spiller entered into an agreement, dated
as of January 18, 1996, pursuant to which KFH granted a beneficial
ownership interest in 316,823 shares of Common Stock of the Company owned
by KFH. Such agreement provides that, in the event that KFH sells at least
452,604 shares of Common Stock of the Company in a single transaction, then
Mr. Spiller shall have the option to either (i) pay to KFH an amount equal
to the Spiller Acquisition Cost (as defined in such agreement), in which
event Mr. Spiller will be entitled to receive stock certificates
representing such 316,823 shares of Common Stock, or (ii) receive the net
proceeds relating to 316,823 shares of Common Stock that are the subject of
the sale by KFH, reduced by the Spiller Acquisition Cost relating to such
shares of Common Stock so sold by KFH. In the event that KFH does not sell
at least 452,604 shares of Common Stock as described above, then Mr.
Spiller's rights to the 316,823 shares of Common Stock shall vest on
January 18, 1999; provided, however, that, at such time, Mr. Spiller is the
President and Chief Executive Officer of the Company and his Employment
Agreement with the Company, dated as of January 18, 1996, is in full force
and effect and Mr. Spiller is not in breach thereof; and, provided,
further, that if Mr. Spiller's Employment Agreement with the Company is
terminated due to his death or disability, or without cause, prior to
January 18, 1999, then a pro-rata portion of such 316,823 shares of Common
Stock, based upon the number of months elapsed from January 18, 1996 in
relation to 36 months, shall vest to Mr. Spiller. Unless sooner acquired by
Mr. Spiller as hereinabove described, Mr. Spiller shall have the right to
acquire any such vested shares of Common Stock pursuant to such agreement
on January 18, 2001 upon payment by Spiller to KFH of the Spiller
Acquisition Cost relating to such shares.
(3) Represents the number of shares deemed to be beneficially owned by Richmont
Capital Partners I, L.P. ("Richmont"), upon conversion of $3,000,000
principal amount of convertible subordinated notes into Common Stock at a
conversion rate of $5.00 per share. Also includes 100,000 stock options
granted to Richmont which are fully vested but unexercised pursuant to that
certain option granted by the Company to Richmont dated May 15, 1996 (the
"Richmont Option"), entitling Richmont to purchase up to 300,000 shares of
Common Stock. Of the 300,000 options granted, 100,000 are fully vested but
unexercised, and 100,000 become fully vested on each of May 15, 1997 and
May 15, 1998. The Richmont Option expires after 5:00 P.M., Eastern Time, on
May 15, 2006.
(4) Includes 138,000 stock options granted to Mr. Elliott under the terms of
his previous employment agreement, which was executed on January 1, 1994
but which was mutually terminated by Mr. Elliott and the Company and
superseded by a new employment agreement executed on January 18, 1996, and
30,000 stock options granted to Mr. Elliott pursuant to the Company's 1994
Incentive Stock Plan. Such options are fully vested but unexercised. All of
the shares listed are subject to a three year lock-up agreement, by and
among Mr. Elliott and KFH (the "Elliott Lock-Up"). Pursuant to the Elliott
Lock-Up, Mr. Elliott agreed that he will not, directly or indirectly,
without the prior written consent of KFH, offer to sell, sell, grant any
options for the sale of, assign, transfer, pledge, hypothecate or otherwise
encumber or dispose of any shares of Common Stock of the Company or
securities convertible into, exercisable or exchangeable for or evidencing
any right to purchase or subscribe for any shares of Common Stock of the
Company or dispose of any beneficial interest therein for a period of three
years from January 18, 1996, except as provided in such agreement.
(5) Includes 10,000 shares owned by Mr. Ehrlich's children and 20,600 held in
trust for the benefit of his children, of which Mr. Ehrlich's spouse is
trustee, of which he disclaims beneficial ownership. Also includes 400
shares owned by Mr. Ehrlich's spouse's individual retirement account, of
which Mr. Ehrlich disclaims beneficial ownership. Also includes 50,000
shares which are deemed to be beneficially owned by Mr. Ehrlich upon
conversion of $250,000 principal amount of convertible subordinated notes
into Common Stock at a conversion rate of $5.00 per share. Excludes 75,000
stock options granted to Mr. Ehrlich under the terms of the 1996
Non-Employee Directors Stock Option Plan (the "1996 Directors Plan"),
subject to Shareholder approval of such plan. Such options were granted to
Mr. Ehrlich upon his initial election to the Board of Directors on January
18, 1996, subject to Shareholder approval of the 1996 Directors Plan, at an
exercise price of $3.75 per share, the closing trading price of the
Company's Common Stock on the National Association of Securities Dealers
Automated Quotation System ("NASDAQ"), on January 18, 1996. Such options
vest in three equal annual installments on January 18, 1997, 1998 and 1999.
For a description of the 1996 Directors Plan, see "Proposal No. 8 --
Adoption of the 1996 Non-Employee Directors Stock Option Plan." Of the
182,300 shares listed, 100,000 shares are subject to a three year lock-up
agreement by and among Mr. Ehrlich and KFH (the "Ehrlich Lock-Up").
Pursuant to the Ehrlich Lock-Up, Mr. Ehrlich agreed that he will not,
directly or indirectly, without the prior written consent of KFH, offer to
sell, sell, grant any options for the sale of, assign, transfer, pledge,
hypothecate or otherwise encumber or dispose of any shares of Common Stock
of the Company or securities convertible into, exercisable or exchangeable
for or evidencing any right to purchase or subscribe for any shares of
Common Stock of the Company or dispose of any beneficial interest therein
for a period of three years from January 18, 1996, except as provided in
such agreement.
(6) Represents 100,000 shares owned by S.T. Investors Fund, LLC ("STI"), a
limited liability company of which Mr. Sokolow is a member and 20,000
shares owned by Mr. Sokolow's children, of which he disclaims beneficial
ownership. Excludes 75,000 stock options granted to Mr. Sokolow under the
terms of the 1996 Directors Plan, subject to Shareholder approval of such
plan. Such options were granted to Mr. Sokolow upon his initial election to
the Board of Directors on January 18, 1996, subject to Shareholder approval
of the 1996 Directors Plan, at an exercise price of $3.75 per share, the
closing trading price of the Company's Common Stock on NASDAQ on January
18, 1996. Such options vest in three equal annual installments on January
18, 1997, 1998 and 1999. For a description of the 1996 Directors Plan, see
"Proposal No. 8 -- Adoption of the 1996 Non-Employee Directors Stock Option
Plan." Of the 122,500 shares listed, 100,000 shares are subject to a
three year lock-up agreement, by and among STI and KFH (the "STI Lock-Up").
Pursuant to the STI Lock-Up, STI agreed that it will not, directly or
indirectly, without the prior written consent of KFH, offer to sell, sell,
grant any options for the sale of, assign, transfer, pledge, hypothecate or
otherwise encumber or dispose of any shares of Common Stock of the Company
or securities convertible into,
6
<PAGE>
exercisable or exchangeable for or evidencing any right to purchase or
subscribe for any shares of Common Stock of the Company or dispose of any
beneficial interest therein for a period of three years from January 18,
1996, except as provided in such agreement.
(7) Includes 50,000 stock options granted to Mr. Bistrong under the terms of
his previous employment agreement, which was executed on February 5, 1995
but which was mutually terminated by Mr. Bistrong and the Company and
superseded by a new employment agreement executed on January 18, 1996. Such
options are fully vested but unexercised. All of the shares listed are
subject to a three year lock-up agreement, by and among Mr. Bistrong and
KFH (the "Bistrong Lock-Up"). Pursuant to the Bistrong Lock-Up, Mr.
Bistrong agreed that he will not, directly or indirectly, without the prior
written consent of KFH, offer to sell, sell, grant any options for the sale
of, assign, transfer, pledge, hypothecate or otherwise encumber or dispose
of any shares of Common Stock of the Company or securities convertible
into, exercisable or exchangeable for or evidencing any right to purchase
or subscribe for any shares of Common Stock of the Company or dispose of
any beneficial interest therein for a period of three years from January
18, 1996, except as provided in such agreement.
(8) Represents the number of shares deemed to be beneficially owned by Mr.
Strauss, upon conversion of $200,000 principal amount of convertible
subordinated notes into Common Stock at a conversion rate of $5.00 per
share. Excludes 75,000 stock options granted to Mr. Strauss under the terms
of the 1996 Directors Plan, subject to Shareholder approval of such plan.
Such options were granted to Mr. Strauss upon his initial election to the
Board of Directors on May 13, 1996, subject to Shareholder approval of the
1996 Directors Plan, at an exercise price of $7.50 per share, the closing
trading price of the Company's Common Stock on the American Stock Exchange
on May 13, 1996. Such options vest in three equal annual installments on
May 13, 1997, 1998 and 1999. For a description of the 1996 Directors Plan,
see "Proposal No. 8 -- Adoption of the 1996 Non-Employee Directors Stock
Option Plan."
(9) Mr. Bartlett does not own any shares individually. Mr. Bartlett is Chairman
of the Board of Directors of The Richmont Group, whose subsidiary, Richmont
Capital Partners I, L.P., is the beneficial owner of 700,000 shares of
Common Stock.
Changes in Control
Since the beginning of Fiscal 1995, the Company has undergone a change in
control in connection with the purchase by Kanders Florida Holdings, Inc.
("KFH") and other investors (the "Investors") of all of the capital stock of the
Company owned by Clark Schwebel, Inc. ("Clark Schwebel"), a supplier of raw
materials to the Company, and Hexcel Corporation as of January 18, 1996 (the
"Purchase"). See "CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS-TRANSACTIONS
WITH MANAGEMENT AND OTHERS" for a discussion of the Company's transactions with
Clark Schwebel. Prior to the closing of the Purchase (the "Closing"), at a
meeting held on January 18, 1996, the then existing Board of Directors, which
consisted of Jonathan M. Spiller, Julius Lasnick, Gardner F. Davis, John Innes
and Robert Sullivan, authorized the officers of the Company to take such actions
as the officers deemed necessary, prudent and appropriate to facilitate the
Purchase by KFH and the Investors. Following such action, Messrs. Lasnick,
Davis, Innes and Sullivan conditionally resigned from the Board of Directors,
effective upon the Closing. Such resignations were conditioned upon the
occurrence of the Closing. Contemporaneously with the tendering by Messrs.
Lasnick, Davis, Innes and Sullivan of their conditional resignations, the Board
of Directors appointed Warren B. Kanders ("Kanders"), who was elected Chairman
of the Board of Directors, Burtt R. Ehrlich ("Ehrlich") and Nicholas Sokolow
("Sokolow"), to the vacancies to be created by such resignations. Kanders is the
sole shareholder and sole director of KFH. Ehrlich is a Trustee of the Reserve
Private Equity Series of mutual funds and a Director of the Cater Allen family
of mutual funds. Sokolow, a senior partner in the law firm of Sokolow, Dunaud,
Mercadier & Carreras, is a member of S.T. Investors Fund, LLC. Upon assuming
office, Messrs. Kanders, Ehrlich and Sokolow constituted a majority of the Board
of Directors.
The shares of Common Stock of the Company acquired by KFH were paid for out
of KFH's working capital funds. KFH acquired an aggregate of 2,880,217 shares of
the Company's Common Stock and an aggregate of 1,131,075 shares of the Company's
3% Convertible, $1.00 stated value Preferred Stock (the "Old Preferred Stock"),
for an aggregate purchase price of $3,190,000, of which an aggregate of
$2,340,000 was
7
<PAGE>
paid in cash. The remaining $850,000 of the purchase price was paid by
promissory notes. To secure the payment of the promissory notes, KFH pledged to
Springs Industries, Inc. ("Springs"), the parent corporation of Clark Schwebel,
900,000 shares of the Company's Common Stock. Contemporaneously with the
Purchase by KFH, Mr. Kanders individually acquired 28,141 shares of the
Company's Common Stock. Mr. Kanders acquired an additional 1,000 shares of
Common Stock upon the listing of the Company's Common Stock on the American
Stock Exchange ("AMEX") on March 18, 1996.
Upon assuming their positions, the newly constituted Board of Directors of
the Company elected to require the holders of the Company's Old Preferred Stock
to convert such shares to Common Stock at 110% of the aggregate stated value of
the Old Preferred Stock, at a conversion price of $.77 per share (fair market
value as determined by an independent valuation firm), as required by the
Company's Amended and Restated Articles of Incorporation (the "Charter"). All
shares of the Company's Old Preferred Stock were deemed to have been converted
upon such election by the Board of Directors.
Following the Closing, and assuming the conversion of the shares of the Old
Preferred Stock owned by KFH, KFH and Mr. Kanders collectively owned 4,524,178
of the total outstanding shares of Common Stock of the Company, which holdings
constituted approximately 66.3% of the total outstanding shares of Common Stock
of the Company.
As of the Record Date, KFH and Mr. Kanders owned 4,525,178 of the total
outstanding shares of Common Stock of the Company, which holdings constitute
approximately 66.4% of the total outstanding shares of Common Stock of the
Company. Management of the Company owns, in the aggregate, approximately 85.9%
of the total outstanding shares of the Company's Common Stock and have indicated
their intention to vote for the election of each of the nominees for director
and the approval and adoption of each of the Proposals presented in this Proxy
Statement. Therefore, election of each of the nominees for director and the
adoption of each of the Proposals discussed herein is virtually assured.
No further changes in control of the Company are currently contemplated.
The Company is not aware of any material proceedings to which any director,
executive officer or affiliate of the Company or any security holder, including
any owner of record or beneficially of more than 5% of any class of the
Company's voting securities, is a party adverse to the Company or has a material
interest adverse to the Company.
The Company is not aware of any material pending legal proceedings, other
than ordinary routine litigation incidental to the business of the Company, to
which any director or officer of the Company is a party or of which any of their
property is the subject.
8
<PAGE>
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The Company's Charter provides that the Company shall have at least three
and no more than fifteen directors. The Amended and Restated Bylaws of the
Company (the "Bylaws") grant the power to fix from time to time the number of
directors within such minimum and maximum to the Board of Directors. Currently,
the number of directors is fixed at six. The Board of Directors has presently
determined that there will be six directors for the ensuing year. At the
Meeting, six directors are to be elected to serve until the next Annual Meeting
of Shareholders or until their successors are duly elected and qualified.
The persons named in the enclosed form of proxy have advised that, unless
contrary instructions are received, they intend to vote FOR the election of the
nominees named in the following table, all of whom are currently directors of
the Company. The Board of Directors does not expect that any of the nominees
will be unavailable for election as a director.
The following information concerning the nominees is as of the Record Date.
Positions Director
Name Age and Office Since
- ---- --- ---------- -----
Warren B. Kanders (1)(2) 38 Chairman of the Board of 1996
Directors
Jonathan M. Spiller 44 Director, Chief Executive 1991
Officer and President
Burtt R. Ehrlich (1)(2) 56 Director 1996
Nicholas Sokolow (1)(2) 46 Director 1996
Thomas W. Strauss 53 Director 1996
Richard C. Bartlett 61 Director 1996
(1) Member of Audit Committee
(2) Member of Compensation Committee
Directors of the Company are elected annually at the Annual Meeting of
Shareholders. Their respective terms of office continue until the next Annual
Meeting of Shareholders and until their successors have been elected and
qualified in accordance with the Company's Bylaws. There are no family
relationships among any of the directors or executive officers of the Company.
9
<PAGE>
Warren B. Kanders
Warren B. Kanders was elected Chairman of the Board of Directors on January
18, 1996. Mr. Kanders has also served as Vice Chairman of the Board of Directors
of Benson Eyecare Corporation, a New York Stock Exchange listed company, since
October 1992. Mr. Kanders was the President and a Director of Pembridge
Holdings, Inc. from June 1992 to March 1993. Mr. Kanders is also a Director of
Eyecare Products plc, a United Kingdom public company listed on the London Stock
Exchange. Since 1990, Mr. Kanders has been President of Kanders and Company,
Inc., an investment management company. From 1987 to 1990, Mr. Kanders was the
founder and Managing Director of Great Pacific Capital, Inc., which provided
investment management advice to the Jim Pattison Group, one of Canada's largest
privately-owned companies. From 1983 to 1987, Mr. Kanders was Vice President
and Director of U.S. Mergers and Acquisitions for Orion Royal Bank Limited, a
merchant bank wholly-owned by the Royal Bank of Canada. Mr. Kanders also serves
as Trustee and Chairman of the Investment Committee of Choate Rosemary Hall
School, Wallingford, Connecticut. Mr. Kanders received a B.A. degree in
Economics from Brown University.
Jonathan M. Spiller
Jonathan M. Spiller has been a Director of the Company since July 1991 and
is the Company's President and Chief Executive Officer. Mr. Spiller became
President of the Company in June 1991, and has served as its Chief Executive
Officer since September 21, 1993. Mr. Spiller formerly served as the Company's
Chief Operating Officer from June 1991 to September 1993, when he was named
Chief Executive Officer. Mr. Spiller is a certified public accountant and was
previously a partner in the international accounting firm of Deloitte & Touche
LLP, where he spent a total of eighteen years, most recently as a partner in the
Capital Markets Group, where he was responsible for international transactions.
From March 1988 to July 1989, Mr. Spiller was the Senior Vice President and
Chief Financial Officer of Hunter Environmental Services, Inc., a large publicly
held company in the environmental field. Mr. Spiller received a B.S. degree in
Economics from the University of Wales and is a Fellow of the Institute of
Chartered Accountants in England and Wales. For additional information
concerning Mr. Spiller, See "EXECUTIVE OFFICERS-INVOLVEMENT IN CERTAIN LEGAL
PROCEEDINGS".
Burtt R. Ehrlich
Burtt R. Ehrlich was elected a Director of the Company on January 18, 1996.
Mr. Ehrlich previously served as a Director of Benson Eyecare Corporation, a New
York Stock Exchange listed company, from its inception in 1986 to 1995, and as
its Chairman and Chief Operating Officer from 1986 until October 1992. Mr.
Ehrlich is a Trustee of the Reserve Private Equity Series of mutual funds and a
Director of the Cater Allen family of mutual funds in the United Kingdom. He is
also a former Treasurer and Trustee of the Carnegie Council on Ethics and
International Affairs, and a former Trustee of the Buckingham Browne and Nichols
10
<PAGE>
School. Mr. Ehrlich received a B.A. degree from Columbia College and an M.B.A.
from Columbia University Graduate School of Business.
Nicholas Sokolow
Nicholas Sokolow was elected a Director of the Company on January 18, 1996.
Mr. Sokolow is a senior partner in the law firm of Sokolow, Dunaud, Mercadier &
Carreras. From June 1973 until October 1994, Mr. Sokolow was an associate and
partner with the international law firm of Coudert Brothers. Mr. Sokolow is also
a Director of Rexel, Inc., a New York Stock Exchange listed company. Mr.
Sokolow, who is a member of the Paris Bar, received his education from the Paris
School of Law, Institute of Political Sciences-Business Administration and the
University of Michigan.
Thomas W. Strauss
Thomas W. Strauss was elected a Director of the Company on May 13, 1996.
Mr. Strauss is a Principal with Ramius Capital Group, a privately held
investment management firm. Prior to joining Ramius Capital, Mr. Strauss was
Co-Chairman of Granite Capital International Group.
From 1963 to 1991, Mr. Strauss was with Salomon Brothers Inc. He was
admitted as a General Partner in 1972 and was appointed to the Executive
Committee in 1981. In 1986, Mr. Strauss became President of Salomon Brothers
Inc. and a Vice Chairman and member of the Board of Directors of Salomon Inc,
the holding company of Salomon Brothers Inc., and Phibro Energy, Inc. As
President, he had a special focus on the International Investment Banking and
High Yield activities of the Firm. Prior to becoming President, he was
responsible for the U.S. Government, Money Market and Foreign Exchange
Departments.
Mr. Strauss is a former member of the Boards of Governors of AMEX, the
Chicago Mercantile Exchange, the Public Securities Association, the Securities
Industry Association and a former member of the U.S. Japan Business-Council. He
is a past President of the Association of Primary Dealers in U.S. Government
Securities.
Mr. Strauss currently serves as a member of the Boards of Trustees of The
Mount Sinai Medical Center, Riverdale Country School, the Board of Overseers of
the School of Arts & Sciences of the University of Pennsylvania, the Advisory
Board of Randall's Island Sports Foundation and The Corporation of the Hurricane
Island Outward Bound School. Mr. Strauss received a B.A. degree in Economics
from the University of Pennsylvania. For additional information concerning Mr.
Strauss, See "INFORMATION CONCERNING MEETINGS OF THE BOARD OF DIRECTORS AND
BOARD COMMITTEES AND DIRECTOR COMPENSATION-INVOLVEMENT IN CERTAIN LEGAL
PROCEEDINGS."
11
<PAGE>
Richard C. Bartlett
Richard C. Bartlett was elected a Director of the Company on May 13, 1996.
Mr. Bartlett is the Vice Chairman of Mary Kay Holding Corporation and the
Chairman of The Richmont Group. Prior to being named Vice Chairman of Mary Kay
Holding Corporation in January 1993, Mr. Bartlett served as President and Chief
Operating Officer of Mary Kay Inc. from 1987 through 1992. Mr. Bartlett joined
Mary Kay in 1973 and became an officer in 1976. He has served on the Board of
Directors of Mary Kay Inc. from 1979 to 1995.
Prior to being named Chairman of the Board of The Richmont Group in 1995,
Mr. Bartlett served as Chief Executive Officer from 1994 to 1995. The Richmont
Group is a holding company comprised of six companies doing business in seven
countries. The Richmont companies' portfolio businesses includes, but is not
limited to, financial services, apparel, sporting goods and restaurant chains.
Mr. Bartlett is a former Chairman of the U.S. Direct Selling Education
Foundation ("US DSEF") and the U.S. Direct Selling Association. He currently
serves on the Boards of Directors of both organizations, as well as on the
executive committee of the US DSEF. Mr. Bartlett is Chairman and a Trustee of
The Nature Conservancy of Texas. He also serves on the Board of the Better
Business Bureau of Metropolitan Dallas, Inc., and is a member of the World
Economic Forum, the National Center for Policy Analysis, The Conference Board
and the Academy of Marketing Science. He also serves on the advisory boards of
the Positive Employee Practices Institute, the Center for Retailing Studies at
Texas A&M University, the Center for Retailing Education and Research at the
College of Business Administration at the University of Florida, the Department
of Range, Wildlife, and Fisheries Management at Texas Tech University, the
advisory council of the University of Texas Press and the global board of
advisors for The Economist Group's Crossborder Monitor.
Mr. Bartlett received a B.S. degree in Communications from the University
of Florida, Gainesville.
Vote Required
The nominees for directors who receive a plurality of the votes cast by the
holders of the outstanding Common Stock entitled to vote at the Meeting at which
a quorum is present will be elected to the Board of Directors.
Recommendation of the Board of Directors
The Board of Directors recommends a vote FOR each of the above-named
director nominees.
12
<PAGE>
INFORMATION CONCERNING MEETINGS OF THE BOARD OF
DIRECTORS AND BOARD COMMITTEES AND DIRECTOR COMPENSATION
During Fiscal 1995, the Board of Directors held seven meetings. The Board
of Directors has standing Audit and Compensation Committees. During Fiscal 1995,
all of the directors then in office attended at least 75% of the total number of
meetings of the Board of Directors and the Committees of the Board of Directors
on which they served. The Audit and Compensation Committees do not meet on a
regular basis, but only as circumstances require. The Board of Directors does
not have a nominating committee. The usual functions of such a committee are
performed by the entire Board of Directors.
Audit Committee
The functions of the Audit Committee are to recommend to the Board of
Directors the appointment of independent auditors for the Company, to analyze
the reports and recommendations of such auditors and to review internal audit
procedures and controls. During Fiscal 1995, the Audit Committee met three
times. Prior to the Closing and before their resignations from the Board of
Directors became effective, Messrs. Lasnick, Gardner, Innes and Sullivan
constituted all of the members of the Audit Committee. The Audit Committee
currently consists of Messrs. Ehrlich (Chairman), Kanders and Sokolow.
Compensation Committee
The functions of the Compensation Committee are to recommend to the Board
of Directors the compensation and benefits of the Company's executive officers
and other key managerial personnel. In this regard, the Compensation Committee
administers and recommends to the Board of Directors awards pursuant to the
Company's restricted stock and incentive stock plans. Following the Meeting, if
the stock option plans presented in Proposal Nos. 7 and 8 are approved and
adopted by the Shareholders, an option committee of the Board of Directors (the
"Option Committee") will be established which will administer such stock option
plans. The Option Committee shall consist of two or more members of the Board of
Directors, each of whom shall be a "disinterested person" within the meaning of
Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). During Fiscal 1995, the Compensation Committee met three
times. Prior to the Closing and before their resignations from the Board of
Directors became effective, Messrs. Lasnick, Gardner, Innes and Sullivan
constituted all of the members of the Compensation Committee. The Compensation
Committee currently consists of Messrs. Sokolow (Chairman), Kanders and Ehrlich.
Compensation of Directors
During Fiscal 1995, each non-Management director (an "Outside Director")
was entitled to receive, pursuant to the terms of the Company's 1994 Outside
Directors' Stock Plan (the "Outside Directors Stock Plan"), which was
implemented in 1994 following the approval of the Shareholders at the 1994
annual meeting, an annual retainer of $5,000 plus $1,000 for
13
<PAGE>
attendance at each special meeting of the Board of Directors. Additionally, the
Chairman of the Audit Committee of the Board of Directors was entitled to $1,000
for each Committee meeting. Under the terms of the Outside Directors' Stock
Plan, which will be discontinued to the extent that no additional awards will be
granted under said plan if the Shareholders approve Proposal No. 7, Outside
Directors' fees may be paid either in cash or stock.
Involvement in Certain Legal Proceedings
Except as hereinafter provided with respect to Mr. Strauss, a director
nominee, and as hereinafter provided in "EXECUTIVE OFFICERS-INVOLVEMENT IN
CERTAIN LEGAL PROCEEDINGS" with respect to Mr. Spiller and J. Michael Elliott,
the Vice President-Operations of the Company, no director, director nominee,
executive officer, promoter or control person has, within the last five years:
(i) had a bankruptcy petition filed by or against any business of which such
person was a general partner or executive officer either at the time of the
bankruptcy or within two years prior to that time; (ii) been convicted in a
criminal proceeding or is currently subject to a pending criminal proceeding
(excluding traffic violations or similar misdemeanors); (iii) been subject to
any order, judgment or decree, not subsequently reversed, suspended or vacated,
of any court of competent jurisdiction, permanently or temporarily enjoining,
barring, suspending or otherwise limiting his involvement in any type of
business, securities or banking activities; (iv) been found by a court of
competent jurisdiction (in a civil action), the Securities and Exchange
Commission (the "SEC") or the Commodity Futures Trading Commission to have
violated a federal or state securities or commodities law, and the judgment has
not been reversed, suspended or vacated.
On December 3, 1992, without admitting or denying any liability, Mr.
Strauss, a director nominee, consented to an order of the SEC under which he was
suspended from associating with any broker, dealer, municipal securities dealer,
investment company or investment advisor for a period of six (6) months, and
paid a civil penalty of $75,000. The central claim in these proceedings was that
as President of Salomon Brothers Inc ("Salomon"), Mr. Strauss delayed in
reporting an unauthorized bid by the head of Salomon's Government Trading Desk
who reported to one of Mr. Strauss' subordinates. Mr. Strauss has maintained
that he reported the unauthorized bid both to Salomon's Chief Executive Officer
and General Counsel immediately upon learning of the unauthorized bid.
EXECUTIVE OFFICERS
Set forth below is certain information, as of the Record Date, concerning
the Company's executive officers. Each of the persons identified below will
continue to serve in such capacity until the next meeting of the Board of
Directors appointing officers and until a successor is duly elected and
qualified. Each of the persons listed below has consented to serve in the
capacities set forth beside their respective names. For biographical information
concerning Mr. Spiller, see "Proposal No. 1 - Election of Directors".
14
<PAGE>
Executive
Officer
Name Age Position Since
- ---- --- -------- -----
Jonathan M. Spiller 44 President and Chief Executive 1991
Officer
Richard T. Bistrong 33 Vice President - 1995
Sales and Marketing
Carol T. Burke 34 Vice President - Finance and 1995
Secretary
J. Michael Elliott 44 Vice President-Operations 1993
Richard T. Bistrong
Mr. Bistrong has been the Company's Vice President of Sales and Marketing
since February 1995, when he joined the Company. He is responsible for managing
and directing all efforts and activities of the Company's domestic sales staff.
Mr. Bistrong is also responsible for the development and support of all
distributor relationships. Prior to joining the Company, Mr. Bistrong held the
position of Director of Retail Operations for Fechheimer Brothers Company, a
wholly-owned subsidiary of Berkshire Hathaway, for a period of two years. From
1986 to 1992, Mr. Bistrong was the Executive Vice President of Point Blank Body
Armor where he was responsible for the domestic sales organization. Mr. Bistrong
has a B.A. degree in Political Science from the University of Rochester and a
Masters of Arts degree in Foreign Affairs from the University of Virginia.
Carol T. Burke
Ms. Burke has been the Vice President of Finance of the Company since
January 1996 and its Secretary since March 4, 1996. Ms. Burke joined the Company
as Controller in January 1995. She oversees and directs all treasury, budgeting
and accounting activities for the Company. Ms. Burke is also responsible for the
analysis of general economic, business and financial conditions and their impact
on the Company's policies and operations. Ms. Burke, who is a certified public
accountant, previously spent over five years with the Walt Disney organization
as a Senior Finance Manager where she worked in both Orlando and at the Euro
Disney operation in France. Prior to that time, Ms. Burke served as a Senior
Auditor for Arthur Andersen & Co. Ms. Burke has a B.S. degree in both Accounting
and Management Science from the University of South Carolina.
J. Michael Elliott
Mr. Elliott has been a Vice President of the Company since October 1991.
Mr. Elliott also previously served as the Secretary of the Company. He is
responsible for manufacturing (including quality control) and all of the
technical aspects of product development. Mr. Elliott is actively involved in
the marketing of the Company's Explosive Ordnance Disposal products (EOD) and in
sales to the United States military. Mr. Elliott has a B.S. degree in Industrial
15
<PAGE>
Technology from California State University and has significant background in
the industry. Mr. Elliott previously served as Executive Vice-President at
O'Gara Coachworks, Vice President of Operations of Protective Materials Company
from 1986 to 1990, and from 1990 until October 1991 when he joined the Company,
Mr. Elliott was Vice President and Chief Operating Officer of Wes-Pine
Woodworking, Inc., a window manufacturing company located in Massachusetts.
Involvement in Certain Legal Proceedings
Messrs. Spiller and Elliott were employed by and served in similar
positions with the Company at the time the Company filed for Chapter 11
bankruptcy protection in May 1992 through the confirmation on September 20, 1993
of the Company's Third Amended and Restated Plan of Reorganization (the "Plan of
Reorganization"), by the United States Bankruptcy Court, Middle District of
Florida, Jacksonville Division (the "Bankruptcy Court").
16
<PAGE>
EXECUTIVE COMPENSATION
Compensation of Executive Officers
The following table sets forth all compensation, in excess of $100,000,
paid to the Company's Chief Executive Officer and the four other most highly
compensated executive officers of the Company for the fiscal years 1995, 1994
and 1993. The Company paid no compensation to its executive officers under any
long term compensation or retirement plans during the last three years. The
incremental cost of certain incidental personal benefits does not exceed the
lesser of $50,000 or 10% of compensation for any named executive officer of the
Company.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
Long Term
Annual Compensation Compensation
----------------
Awards
- -----------------------------------------------------------------------------------------
(a) (b) (c) (d) (g) (i)
- -----------------------------------------------------------------------------------------
Securities All Other
Name and Underlying Compen-
Principal Salary Bonus Options/SARs sation
Position Year ($) ($) (#) ($)
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Jonathan M. Spiller 1995 $160,000 $ 21,000 18,000 $5,775(1)
President and Chief 1994 $140,000 $ 62,000 432,000 --
Executive Officer 1993 $137,801 -- -- --
- -----------------------------------------------------------------------------------------
Richard T. Bistrong 1995 $120,000 $105,000 50,000 --
Vice President-Sales 1994 -- -- -- --
and Marketing 1993 -- -- -- --
- -----------------------------------------------------------------------------------------
J. Michael Elliott 1995 $100,000 $ 7,000 30,000 $9,660(2)
Vice President- 1994 $ 90,010 $ 27,000 138,000 --
Operations 1993 $ 85,020 -- -- --
- -----------------------------------------------------------------------------------------
</TABLE>
(1) Represents the dollar value of 7,500 Common Stock grants awarded to Mr.
Spiller in December 1995. They became fully vested on January 19, 1996.
(2) Represents the dollar value of 12,000 Common Stock grants awarded to Mr.
Elliott pursuant to the terms of his previous employment agreement, which
was executed on January 1, 1994 but which was mutually terminated by Mr.
Elliott and the Company and superseded by a new employment agreement
executed on January 18, 1996. 4,000 of such grants became fully vested in
June 1995, and the additional 8,000 grants became fully vested on January
19, 1996.
17
<PAGE>
OPTION/SAR GRANTS TABLE
The following table summarizes individual grants of stock options (whether or
not in tandem with stock appreciation rights ("SARs")), and freestanding SARs
made during Fiscal 1995, the Company's most recently completed fiscal year, to
each of the named executive officers.
STOCK OPTION/SAR GRANTS IN LAST FISCAL YEAR
Individual Grants
================================================================================
Number of % of Total
Securities Options/SARs Exercise or Expiration
Underlying Granted to Base Price Date
Options/SARs Employees in ($/share)
Name Granted (#) Fiscal Year
- --------------------------------------------------------------------------------
Jonathan M. Spiller 18,000 12.5% $.97 3/28/2005
President and Chief
Executive Officer
- --------------------------------------------------------------------------------
Richard T. Bistrong 50,000 34.8% $.97 2/6/2005
Vice President-Sales
and Marketing
- --------------------------------------------------------------------------------
J. Michael Elliott 30,000 20.9% $.97 3/28/2005
Vice President - Operations
================================================================================
(1) Stock option grants consist of stock options granted in Fiscal 1995,
pursuant to the Company's 1994 Incentive Stock Plan, all of which are fully
vested but are not exercisable until the expiration of the respective named
executive's employment agreement.
18
<PAGE>
OPTION/SAR EXERCISES AND
FISCAL YEAR-END OPTION/SAR VALUE TABLE
The following table summarizes information concerning each exercise of
stock options (or tandem SARs) and freestanding SARs made during Fiscal 1995,
the Company's most recently completed fiscal year, to each of the named
executive officers, and the fiscal year-end value of unexercised options and
SARs. No options were exercised in Fiscal 1995.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
============================================================================================
(a) (b) (c) (d) (e)
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options/SARs at Options/SARs
FY-End (#) at FY-End ($)
Shares Acquired Exercisable (E)/ Exercisable
Name on Exercise (#) Value Realized Unexercisable (U) (E)/
($) Unexercisable
(U)
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Jonathan M. Spiller -0- -0- 324,000(E) -0-(E)
President and Chief Executive 126,000(U) -0-(U)
Officer
- --------------------------------------------------------------------------------------------
Richard T. Bistrong -0- -0- -0- (E) -0-(E)
Vice President-Sales and 50,000(U) -0-(U)
Marketing
- --------------------------------------------------------------------------------------------
J. Michael Elliott -0- -0- 103,500(E) -0-(E)
Vice President - Operations 64,500(U) -0-(U)
============================================================================================
</TABLE>
Pension/Long-Term Compensation Arrangements
The Company has no pension arrangements or other long-term compensation
plans for its executive officers or other employees.
Employment Agreements
Set forth below are descriptions of the Company's employment agreements
with Messrs. Spiller, Elliott and Bistrong. No employment agreement has been
entered into between Ms. Burke and the Company.
19
<PAGE>
Jonathan M. Spiller
Mr. Spiller's employment agreement, dated as of January 18, 1996, provides
that he will serve as the President and Chief Executive Officer of the Company
for an initial term expiring January 17, 1999, at a base salary of $160,000 per
annum. In addition to his base salary, Mr. Spiller shall also be entitled to a
yearly bonus during the term of his employment agreement. The bonus shall be
based upon the Company's earnings before interest and taxes. Mr. Spiller will
also be entitled, at the sole and absolute discretion of the Compensation
Committee of the Board of Directors, to participate in the Company's incentive
stock plan and other bonus plans adopted by the Company. Eligibility to
participate in the Company's incentive stock plan shall be based upon, among
other things, the performance of Mr. Spiller and the Company. As part of his
compensation package, the Company provides Mr. Spiller with other benefits
commensurate with his position, as more fully set forth in his employment
agreement. Mr. Spiller's employment with the Company shall continue, unless
earlier terminated by Mr. Spiller or due to Mr. Spiller's death or disability or
by the Company, for successive one year periods, on terms to be mutually agreed
upon by the Company and Mr. Spiller.
Richard T. Bistrong
Mr. Bistrong's employment agreement, dated as of January 18, 1996, provides
that he will serve as Vice President-Sales and Marketing of the Company for an
initial term expiring January 17, 1999, at a base salary of $120,000 per annum.
Mr. Bistrong shall also be entitled to a yearly bonus during the term of his
employment agreement. The bonus shall be based upon the Company's earnings
before interest and taxes. In addition to his base salary and bonus, Mr.
Bistrong is entitled to receive non-qualified options to purchase 21,250 shares
of the Company's Common Stock and incentive stock options to purchase 28,750
shares of the Company's Common Stock, in each case at an exercise price of $.97
per share of Common Stock. These options are exercisable for a period of eight
years from the date of the grant, and all of such options vest on January 18,
1999. The vesting of the options may be accelerated on a pro rata basis in the
event of the occurrence of certain events. Pursuant to his employment agreement,
Mr. Bistrong will also be entitled, at the sole and absolute discretion of the
Compensation Committee of the Board of Directors, to participate in the
Company's incentive stock plan and other bonus plans adopted by the Company.
Eligibility to participate in the Company's incentive stock plan shall be based
upon, among other things, the performance of Mr. Bistrong and the Company. As
part of his compensation package, the Company provides Mr. Bistrong other
benefits commensurate with his position, as more fully set forth in his
employment agreement. Mr. Bistrong's employment with the Company shall continue,
unless earlier terminated by Mr. Bistrong or due to Mr. Bistrong's death or
disability or by the Company, for successive one year periods, on terms to be
mutually agreed upon by the Company and Mr. Bistrong.
J. Michael Elliott
Mr. Elliott's employment agreement, dated as of January 18, 1996, provides
that he will serve as Vice President-Operations of the Company for an initial
term expiring
20
<PAGE>
January 17, 1997, at a base salary of $100,000 per annum. Mr. Elliott shall also
be entitled to a yearly bonus during the term of his employment agreement. The
bonus shall be based upon the Company's earnings before interest and taxes. In
addition to his base salary and bonus, Mr. Elliott is entitled to receive
non-qualified options to purchase 8,500 shares of the Company's Common Stock and
incentive stock options to purchase 11,500 shares of the Company's Common Stock,
in each case at an exercise price of $.97 per share of Common Stock. These
options are exercisable for a period of eight years from the date of the grant,
and all of such options vest on January 18, 1999. The vesting of the options may
be accelerated on a pro rata basis in the event of the occurrence of certain
events. Pursuant to his employment agreement, Mr. Elliott will also be entitled,
at the sole and absolute discretion of the Compensation Committee of the Board
of Directors, to participate in the Company's incentive stock plan and other
bonus plans adopted by the Company. Eligibility to participate in the Company's
incentive stock plan shall be based upon, among other things, the performance of
Mr. Elliott and the Company. As part of his compensation package, the Company
provides Mr. Elliott with other benefits commensurate with his position, as more
fully set forth in his employment agreement. At the Company's option, Mr.
Elliott's employment with the Company shall continue, unless earlier terminated
by Mr. Elliott or due to Mr. Elliott's death or disability or by the Company,
for one two year period, on the same terms and conditions. Following the two
year renewal, the employment of Mr. Elliott shall automatically continue for
successive one year periods on terms to be mutually agreed upon by the Company
and Mr. Elliott.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Transactions With Management And Others
The Company has historically purchased substantially all of the ballistic
resistant fabric used in the manufacture of its products from Clark Schwebel, a
subsidiary of Springs and a former holder of 45.7% of the Company's outstanding
capital stock. KFH purchased all of the capital stock of the Company owned by
Clark Schwebel on January 18, 1996. The Company's purchases from Clark Schwebel
totalled approximately $5.1 million, $4.6 million and $3.9 million in fiscal
years 1995, 1994 and 1993, respectively, and were made in the normal course of
business at prices which the Company believes were competitive with other
available sources for such materials.
Other than as described above, there have not been, nor are there any
currently proposed transactions, or any series of similar transactions, since
the beginning of Fiscal 1995, to which the Company was or is to be a party, in
which the amount involved exceeds $60,000 and in which any director, executive
officer, security holder or any member of the immediate family of any of the
foregoing persons had, or will have, a direct or indirect material interest.
Since the beginning of Fiscal 1995, no director or executive officer of the
Company, nor any member of their immediate family or any affiliate thereof is,
has become or was indebted to the Company in an amount in excess of $60,000.
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Subsidiaries
The Company is not a subsidiary of any other corporation, partnership,
limited liability company or other entity. If Proposal No. 3 is approved by the
Shareholders, the Company will be reincorporated in the State of Delaware
through the merger of the Company with and into a wholly-owned subsidiary
created for such purpose.
PROPOSAL NO. 2
CHANGE OF THE COMPANY'S NAME
On March 4, 1996, the Company's Board of Directors unanimously approved,
subject to Shareholder approval, a change of the Company's name to "Armor
Holdings, Inc." Management believes that the change of the Company's name is
appropriate in light of the nature of its business and Proposal No. 3.
If Proposal No. 3 (Reincorporation of the Company into Delaware) is
approved, the name change will be effected by virtue of the merger described in
Proposal No. 3. If this Proposal is approved by the Shareholders, but Proposal
No. 3 is not approved by the Shareholders, the Charter will be amended to delete
Article I in its entirety and replace the same with the following:
"ARTICLE I.
The name of the corporation shall be Armor Holdings,
Inc., and the address of the principal office and
mailing address of the corporation is at 191 Nassau
Place Road, Yulee, Florida 32097"
Vote Required
The affirmative vote of the holders of a majority of the outstanding shares
of the Company's Common Stock present or represented by proxy and voting at a
shareholders meeting at which a quorum is present is required to approve this
Proposal No. 2.
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Recommendation of the Board of Directors
The Board of Directors believes that the proposed change in the name of the
Company to Armor Holdings, Inc. is in the best interests of the Company, and for
that reason, the Board of Directors recommends that the Shareholders vote FOR
Proposal No. 2 on the Proxy Card.
PROPOSAL NO. 3
REINCORPORATION IN DELAWARE
General
On March 4, 1996, the Board of Directors unanimously approved, and
recommends for Shareholder approval, the change of the Company's state of
incorporation from Florida to Delaware (the "Reincorporation"). The transaction
will not result in any change in the business, management, assets, liabilities
or net worth of the Company. Reincorporation in Delaware will allow the Company
to take advantage of certain provisions of the corporate laws of Delaware. The
purposes and effects of the proposed transaction are summarized below.
In order to effect the Company's Reincorporation in Delaware, the Company
will be merged with and into Armor Holdings, Inc. ("Armor Holdings"), a newly
formed, wholly-owned subsidiary of the Company incorporated in Delaware.
Following the Reincorporation, Armor Holdings will qualify to conduct business
in Florida as a foreign corporation. Armor Holdings has not engaged in any
activities except in connection with the proposed transaction. The mailing
address of its principal executive offices and its telephone number are the same
as those of the Company. As part of its approval and recommendation of the
Company's Reincorporation in Delaware, the Board of Directors has approved, and
recommends to the Shareholders for their adoption and approval, an Agreement and
Plan of Merger (the "Reincorporation Agreement") pursuant to which the Company
will be merged with and into Armor Holdings. The full texts of the
Reincorporation Agreement and the Certificate of Incorporation (the "Armor
Holdings Certificate of Incorporation") and Bylaws (the "Armor Holdings Bylaws")
of the successor Delaware company under which the Company's business would be
conducted after the Reincorporation are set forth as Appendices A, B and C,
respectively, hereto. The discussion contained in this Proxy Statement is
qualified in its entirety by reference to such Appendices.
In the following discussion of the proposed Reincorporation, the term
"Company" includes either or both, the Company and Armor Holdings as the context
may require, without regard to the state of incorporation.
Upon Shareholder approval of the Reincorporation and the receipt by the
Company of any required third party consents to the Reincorporation, including,
but not limited to, the
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consent of the Bankruptcy Court, if required, and upon the filing of appropriate
certificates of merger by the Secretaries of State of the States of Florida and
Delaware, the Company will be merged with and into Armor Holdings pursuant to
the Reincorporation Agreement, resulting in a change in the Company's state of
incorporation from Florida to Delaware. The Company will then be subject to the
Delaware General Corporation Law ("DGCL") and the Armor Holdings Certificate of
Incorporation and the Armor Holdings Bylaws set forth as Appendix B and Appendix
C, respectively. The effectiveness of the Reincorporation and the merger
contemplated to result therefrom is conditioned upon the filing by both the
Company and Armor Holdings of Articles of Merger with the State of Florida and a
Certificate of Merger with the State of Delaware. Upon the effective time of the
Reincorporation, each outstanding share of Common Stock and each share of Common
Stock held in the treasury of the Company will be automatically converted into
one share of Common Stock of Armor Holdings. Outstanding options to purchase
shares of Common Stock will be converted automatically into options to purchase
the same number of shares of Common Stock of Armor Holdings. Each employee stock
plan and any other employee benefit plan to which the Company is a party,
whether or not such plan relates to the Common Stock, will be assumed by Armor
Holdings and, to the extent any such plan provides for the issuance or purchase
of Common Stock, it will be deemed to provide for the issuance or purchase of
shares of Common Stock of Armor Holdings.
IT WILL NOT BE NECESSARY FOR SHAREHOLDERS OF THE COMPANY TO EXCHANGE THEIR
EXISTING STOCK CERTIFICATES FOR CERTIFICATES OF ARMOR HOLDINGS; OUTSTANDING
STOCK CERTIFICATES OF THE COMPANY SHOULD NOT BE DESTROYED OR SENT TO THE
COMPANY. The Common Stock of the Company will continue to be traded on AMEX,
which will consider the existing stock certificates as constituting "good
delivery" in transactions subsequent to the Reincorporation.
Principal Reasons For Changing The Company's State Of Incorporation
The Board of Directors of the Company believes that the Reincorporation
will provide flexibility for both the management and business of the Company.
Delaware is recognized both domestically and internationally as a favorable
legal and regulatory environment within which to operate. Such an environment
will enhance the Company's operations and its ability to effect acquisitions and
other transactions. For many years, Delaware has followed a policy of
encouraging incorporation in that state and, in furtherance of that policy, has
adopted comprehensive, modern and flexible corporate laws which are periodically
updated and revised to meet changing business needs. As a result, many major
companies have initially chosen Delaware for their domicile or have subsequently
reincorporated in Delaware. 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 Delaware companies, thereby providing greater predictability with
respect to corporate legal affairs.
Delaware law is more familiar to lenders and investors, and therefore may
provide the Company with a more favorable legal environment in which to seek
additional financing. Because Delaware corporate law is more predictable and
familiar to lenders and investors than
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is Florida corporate law, and because Delaware courts have substantially greater
experience in handling matters of a corporate nature, the Board of Directors
believes that changing the Company's domicile from Florida to Delaware would
make the Company more attractive to new and existing shareholders, lenders and
investors. The Board of Directors also believes that the Reincorporation will
provide flexibility for both the management and business of the resulting
Company.
The Board of Directors has determined that the most practical and
economical means of reincorporating the Company in the State of Delaware would
be through a reincorporation merger of the Company with and into a wholly-owned
subsidiary of the Company incorporated in Delaware for such purpose. Merger with
a wholly-owned subsidiary is the usual means of reincorporation in another
jurisdiction, since it is inexpensive to accomplish and will qualify as a
tax-free reorganization. Since a reincorporation merger is the usual and most
practical and economical means of reincorporating the Company in Delaware, it
was the only alternative considered by the Board of Directors.
Dissenters' Rights
The Shareholders of the Company will not have dissenters' rights in
connection with the Reincorporation and the merger to occur pursuant thereto.
Dissenters' rights are not available under the FBCA to shareholders if, on the
record date fixed to determine the shareholders entitled to vote at the meeting
of shareholders at which such action is to be acted upon, the shares were listed
on a national securities exchange. The Common Stock of the Company is listed on
AMEX.
Effects On The Company
Upon the effective date of the Reincorporation, the business and internal
affairs of the Company will be governed by the DGCL. The Armor Holdings
Certificate of Incorporation provides greater limitations on the personal
liability of directors to the Company and its Shareholders and expanded
indemnification provisions. The Reincorporation will not result in a change in
the business, assets and liabilities of the Company. If the Reincorporation
Agreement is approved, the Board of Directors of the Company will be comprised
of the same six members elected at the Meeting to comprise the Company's Board
of Directors. The directors elected in connection with the current Proposal No.
1 for election of Company directors will serve until the next annual meeting of
the Shareholders of the Company, or until their respective successors are
elected and qualified. The Armor Holdings Bylaws will continue to allow a
minimum of three and a maximum of fifteen directors, as provided for currently
in the Company's Charter and Bylaws. Armor Holdings will also have the same
executive officers as did the Company prior to the Reincorporation.
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Capitalization
The Armor Holdings Certificate of Incorporation authorizes the issuance of
50,000,000 shares of common stock, par value $.01 per share, and creates a
series of preferred stock, with a corresponding right conferred upon the Board
of Directors to set the dividend, voting, conversion and liquidation rights as
well as such redemption or sinking fund provisions of such preferred stock as
the Board may from time to time determine. Currently, the Company is authorized
to issue (i) 15,000,000 shares of Common Stock, par value $.03 per share, of
which 6,812,490 are outstanding, and (ii) 1,700,000 shares of Old Preferred
Stock. There are no shares of Old Preferred Stock available for issuance because
all of such shares were issued in connection with the Company's Plan of
Reorganization and subsequently redeemed or converted to shares of Common Stock.
The Reincorporation into Delaware will have an effect on the capital
structure of the Company. The change in the par value of the Common Stock from
$.03 per share to $.01 per share will result in a reduction in the capital
account of the Company and an increase in its additional paid-in capital
account. The preferred stock authorized in the Armor Holdings Certificate of
Incorporation will not have an effect on the Company's capital structure until
such time as the Board of Directors elects to issue such shares.
COMPARATIVE RIGHTS OF SHAREHOLDERS
Upon the effective date of the Reincorporation, holders of the Common Stock
will become holders of Armor Holdings common stock and the rights of former
Company Shareholders will be governed by the Armor Holdings Certificate of
Incorporation, the Armor Holdings Bylaws and the DGCL.
Shareholders should note the following significant differences between the
DGCL and the Florida Business Corporation Act (the "FBCA") as they affect the
rights of shareholders. The following comparison of the DGCL and the Armor
Holdings Certificate of Incorporation and the Armor Holdings Bylaws, on the one
hand, and the FBCA and the Company's existing Charter and Bylaws, on the other,
is not intended to be complete and is qualified in its entirety by reference to
the Armor Holdings Certificate of Incorporation and the Armor Holdings Bylaws
and the Company's Charter and Bylaws. Copies of the Armor Holdings Certificate
of Incorporation and the Armor Holdings Bylaws are attached hereto as Appendix B
and C, respectively. Copies of the Company's existing Charter and Bylaws are
available for inspection at the offices of the Company and copies will be sent
to the holders of the Common Stock upon written or telephone request.
Distributions To Shareholders
A Delaware corporation may pay dividends out of surplus or, if there is no
surplus, out of net profits for the fiscal year in which declared or for the
preceding fiscal year. A Florida
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corporation may make distributions to shareholders as long as, after giving
effect to such distribution, the corporation will be able to pay its debts as
they become due in the usual course of business and the corporation's total
assets will not be less than the sum of its total liabilities plus (unless the
articles of incorporation permit otherwise) the amount that would be needed, if
the corporation were to be dissolved at the time of the distribution, to satisfy
the preferential rights upon dissolution of shareholders whose preferential
rights are superior to those receiving the distribution.
Business Combinations
The FBCA and the DGCL have "Control-Share Acquisition" and "Business
Combination" statutes, respectively, which are designed to encourage potential
acquirers of publicly traded corporations to obtain the consent and approval of
the proposed target's Board of Directors prior to commencing a tender offer for
the target company's shares. This encouragement is accomplished by prohibiting
or restricting acquirers from undertaking many post-acquisition financial
restructuring alternatives.
Both the FBCA and the DGCL permit a corporation to opt out of the
Control-Share Acquisition statute and the Business Combination statute,
respectively. The Company has opted out of the Florida Control-Share Acquisition
statute, and therefore is not governed by the provisions contained therein.
Armor Holdings would be governed by the Business Combination statute of the
DGCL.
Liability and Indemnification of Directors, Officers and Employees
The DGCL and the FBCA both have provisions and limitations regarding
directors' liability and indemnification by a corporation of its directors,
officers and employees.
The DGCL permits a Delaware corporation to include in its certificate of
incorporation a provision which eliminates or limits the personal liability of a
director to the corporation or its shareholders for monetary damages for breach
of fiduciary duties as a director; provided, however, that no such provision may
eliminate or limit the liability of a director: (i) for any breach of the
director's duty of loyalty to the corporation or its shareholders; (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law; (iii) for declaration of unlawful dividends or illegal
redemptions or stock repurchases; or (iv) for any transaction from which the
director derived an improper personal benefit. The Armor Holdings Certificate of
Incorporation includes such a provision.
Under the DGCL, a director or officer may, in general, be indemnified by
the corporation if he or she has acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the best interests of the
corporation and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his or her conduct was unlawful. No indemnification
is permitted if the person is adjudged liable to the corporation in a derivative
suit unless the court determines that indemnification would be appropriate.
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Under the FBCA, a director is not personally liable for monetary damages to
any person for his actions as a director unless the director breached his duties
by way of: (i) a criminal violation, unless the director has reasonable cause to
believe his conduct was lawful or had no reasonable cause to believe his conduct
was unlawful; (ii) a transaction from which the director derived an improper
personal benefit; (iii) declaration of unlawful distributions; (iv) in a
derivative action, conscious disregard by the director for the best interests of
the corporation or willful misconduct by the director; or (v) in a third party
action, recklessness or actions or omissions committed in bad faith or with
malicious purpose or in a manner exhibiting wanton and willful disregard of
human rights, safety or property.
Under the FBCA, a corporation has the power to indemnify any director,
officer, employee or agent of the corporation against liability incurred in
connection with any proceeding, including any appeal, if the director acted in
good faith and in a manner he reasonably believed to be in, or not opposed to,
the best interests of the corporation and, with respect to any criminal action
or proceeding, he had no reasonable cause to believe his conduct was unlawful.
No indemnification is permitted if the person is adjudged liable unless the
court determines that in view of all of the circumstances of the case,
indemnification would be proper. In addition, no indemnification is permitted
for criminal violations (unless the director, officer, employee or agent had
reasonable cause to believe his conduct was lawful or had no reasonable cause to
believe his conduct was unlawful), transactions in which the director or officer
derived an improper personal benefit, declaration of unlawful dividends or, in
derivative actions, willful misconduct or conscious disregard for the best
interests of the corporation.
As a result of the additional limitations on the liability of directors and
the additional indemnification that would be afforded by the Company to its
directors, officers and employees under the DGCL if the Reincorporation is
approved, the directors of the Company may benefit personally from the approval
of this Proposal No. 3.
Calling A Special Meeting Of Shareholders
Under the DGCL, a special meeting of shareholders can be called by the
corporation's board of directors or by such person or persons as may be
authorized by the corporation's certificate of incorporation or bylaws. The
Armor Holdings Certificate of Incorporation does not authorize any person to
call a special meeting of shareholders. The Armor Holdings Bylaws, however,
provide that a special meeting may be called by the Chairman of the Board of
Directors, the President, a majority of the Board of Directors or a majority of
the shareholders of record of all shares entitled to vote.
The FBCA provides that a special meeting of shareholders can be called by:
(i) a corporation's board of directors; (ii) the persons authorized by the
articles of incorporation or bylaws; or (iii) the holders of not less than 10%
of all votes entitled to be cast on any issue to be considered at the proposed
special meeting. A corporation's articles of incorporation can require a higher
percentage of votes, up to a maximum of 50%, to call a special meeting of
shareholders. The Company's Charter does not include any such provision. The
Bylaws of the
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Company do, however, provide that a special meeting of Shareholders may be
called by the President or a majority of the Board of Directors.
Amendments To Bylaws
Under the DGCL, directors can amend the bylaws of a corporation only if
such right is expressly conferred upon the directors in its certificate of
incorporation. Under the FBCA, a corporation's board of directors may amend or
repeal the bylaws unless such power is expressly reserved to the shareholders in
the articles of incorporation or the FBCA or the shareholders expressly provide,
in amending or repealing all or any part of the bylaws, that the board of
directors may not amend or repeal the affected bylaws. The Armor Holdings
Certificate of Incorporation permits the Board of Directors to adopt, alter or
amend the Armor Holdings Bylaws. The Company's Charter provides the Board of
Directors with the authority to adopt, alter or amend the Bylaws.
Merger With Subsidiary
Under the DGCL, a parent corporation may merge into a subsidiary and a
subsidiary may merge into its parent, without shareholder approval, where such
parent corporation owns at least 90% of the outstanding shares of each class of
capital stock of its subsidiary. The FBCA permits such a merger of a subsidiary
without shareholder approval if 80% of each class of capital stock of the
subsidiary is owned by the parent corporation.
Removal Of Directors; Filling Vacancies On The Board Of Directors
Under the DGCL, any director or the entire board of directors generally may
be removed, with or without cause, by the holders of a majority of the shares
entitled to vote at an election of directors. Under the FBCA, shareholders may
remove one or more directors with or without cause, unless the articles of
incorporation provide that directors may be removed only with cause, at a
meeting of the shareholders called expressly, at least in part, for that
purpose. The Company's Charter does not refer to removal of directors.
Therefore, any member of the Company's Board of Directors may be removed with or
without cause.
Under the Armor Holdings Bylaws, newly created directorships resulting from
any increase in the number of directors or any vacancies on the Board of
Directors may be filled by the affirmative vote of a majority of the directors
then in office. In addition, the Armor Holdings Bylaws provide that the
directors elected to fill vacancies on the Board of Directors will hold office
until the next election of directors.
The Company's existing Bylaws provide that vacancies on the Board of
Directors will be filled by a majority vote of the remaining members of the
Board of Directors.
Regardless of whether the Reincorporation is effected, there will be no
vacancies on the Board of Directors of either Armor Holdings or the Company, as
the Armor Holdings Certificate of Incorporation and the Company's Charter each
provide for a minimum of three and
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a maximum of fifteen directors, and all such directorships shall be filled by
Messrs. Kanders, Spiller, Ehrlich, Sokolow, Strauss and Bartlett.
Amendment Or Repeal Of The Certificate
Under the DGCL, unless the certificate of incorporation otherwise provides,
amendments of the certificate of incorporation generally require the approval of
the holders of a majority of the outstanding stock entitled to vote thereon, and
if the amendment would increase or decrease the number of authorized shares of
any class or series or the par value of such shares or would adversely affect
the rights, powers or preferences of such class or series, a majority of the
outstanding stock of such class or series also would have to approve the
amendment. The Armor Holdings Certificate of Incorporation does not provide
otherwise.
Except with regard to minor amendments, all amendments to the articles of
incorporation of a Florida corporation must be approved by a majority of all the
votes entitled to be cast by each voting group, unless the articles require a
greater or lesser vote. The Company's Charter does not provide for a greater or
lesser vote.
Vote Required For Mergers
The FBCA provides that the sale, lease, exchange or disposal of all, or
substantially all, of the assets of a Florida corporation, not in the ordinary
course of business, as well as any merger, consolidation or share exchange,
generally must be recommended by the Board of Directors and approved by a vote
of a majority of the shares of each class of the stock of the corporation
entitled to vote on such matters. Under the FBCA, the vote of the shareholders
of a corporation surviving a merger is not required if: (i) the articles of
incorporation of the surviving corporation will not substantially differ from
its articles before the merger; and (ii) and each shareholder of the surviving
corporation before the effective date will hold the same number of shares, with
identical designations, preferences, limitations and relative rights immediately
after the merger. The DGCL has a similar provision requiring shareholder
approval in the case of the disposition of assets or a merger or a share
exchange.
Dissenters' Rights in Mergers
Under both the DGCL and the FBCA, a shareholder of a corporation
participating in certain merger transactions may, under certain circumstances,
receive cash in the amount of the fair market value of his or her shares (as
determined by a court) in lieu of the consideration he or she would otherwise
receive in the merger. Unless a corporation's certificate of incorporation
provides otherwise, the DGCL does not require that such dissenters' rights of
appraisal be afforded to shareholders with respect to: (i) a merger or
consolidation by a corporation the shares of which are either listed on a
national securities exchange or designated as a national market security on an
interdealer quotation system by the National Association of Securities Dealers,
Inc. or widely held (by at least 2,000 shareholders), if the shareholders of
such corporation receive only shares of the surviving corporation or of such a
listed or widely held corporation; or (ii) those shareholders who are the
shareholders of a corporation surviving
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a merger if no vote of such shareholder is required because, among other things,
the number of shares to be issued in the merger plus those initially issuable
upon conversion of any other securities to be issued or delivered pursuant to
such merger does not exceed 20% of the shares of the surviving corporation
outstanding immediately prior to the merger (if certain other conditions are
met).
Unless a corporation's articles of incorporation provide otherwise, the
FBCA does not require that dissenters' rights be afforded to holders of shares
which, on the record date fixed to determine the shareholders entitled to vote
at the meeting of shareholders at which such action is to be acted upon, were
listed on a national securities exchange.
Stock Redemptions and Repurchases
Both Delaware and Florida corporations may generally purchase or redeem
their own shares of capital stock. Under the DGCL, a Delaware corporation may
purchase or redeem its own shares of capital stock except when the capital of
the corporation is impaired or when such purchase or redemption would cause any
impairment of the capital of the corporation. Subject to any restrictions
imposed by its articles of incorporation (the Company's Charter contains no such
restriction), a Florida corporation may make distributions to shareholders as
long as, after giving effect to such distribution: (i) the corporation would be
able to pay its debts as they become due in the usual course of business; and
(ii) the corporation's total assets would not be less than the sum of its total
liabilities plus, unless the articles of incorporation permit otherwise, (which
the Company's Charter does not) the amount that would be needed if the
corporation were to be dissolved at the time of the distribution to satisfy the
preferential rights upon dissolution of shareholders whose preferential rights
are superior to those receiving the distribution (the Company currently has no
shares authorized or outstanding with such preferential rights).
Shareholder Records
Under both the DGCL and the FBCA, any Shareholder with a proper purpose may
inspect and copy the books, records and stockholder lists of the Company.
Corporate Action Without A Shareholder Meeting
The DGCL and the FBCA both permit corporate action without a meeting of
shareholders upon the written consent of the holders of that number of shares
necessary to authorize the proposed corporate action being taken, unless the
certificate of incorporation or articles of incorporation, respectively,
expressly provide otherwise. In the event such proposed corporate action is
taken without a meeting by less than the unanimous written consent of
shareholders, the DGCL requires that prompt notice of the taking of such action
be sent to those shareholders who have not consented in writing. The FBCA
provides that such notice must be given within ten days of the date such
shareholder authorization is granted.
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Rights And Options
The DGCL and the FBCA do not require shareholder approval of rights or
option plans, although various other applicable legal requirements, such as the
rules of the SEC, may make shareholder approval of certain rights or option
plans necessary or desirable.
PURPOSES AND EFFECTS OF CERTAIN PROVISIONS OF THE
CERTIFICATE OF INCORPORATION AND BYLAWS OF ARMOR HOLDINGS
Limitation Of Director, Officer and Employee Liability
The Armor Holdings Certificate of Incorporation contains a provision in
Article Ninth that provides for the indemnification by the Company of any person
who was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of the
Company) by reason of the fact that he is or was a director, officer, employee
or agent of the Company, or is or was serving at the request of the Company as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in, or not opposed
to, the best interests of the Company, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful. The
Armor Holdings Certificate of Incorporation also provides that the Company shall
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action or suit by or in the right of the
Company to procure a judgment in its favor by reason of the fact that he is or
was a director, officer, employee or agent of the Company, or is or was serving
at the request of the Company as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against expenses (including attorneys' fees) actually and reasonably incurred by
him in connection with the defense or settlement of such action or suit if he
acted in good faith and in manner he reasonably believed to be in or not opposed
to the best interests of the Company. As they relate to directors, these two
provisions eliminate a director's liability for monetary damages for breaches of
fiduciary duty of care, subject to certain exceptions described below (the
"Liability Provisions").
The Delaware legislature enacted an amendment to the DGCL in 1985 allowing
provisions such as the Liability Provisions as a response to changes in the
market for directors' liability insurance. The proliferation of shareholder
derivative and class action suits for breaches of directors' fiduciary duties
has in large part made it difficult to obtain liability insurance. Thus, the
Delaware legislature amended the DGCL in order to maintain qualified and able
directors to govern companies. While the Company has not experienced difficulty
in attracting and retaining qualified and able persons to serve on the Company's
Board of Directors, the ability to attract and retain qualified directors is
often contingent upon a corporation's ability to
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indemnify such persons against certain liabilities. For this reason, among
others, the Company wishes to avail itself of the broader indemnification
provisions contained in the DGCL so that it may continue to attract and retain
qualified directors.
The Liability Provisions do not relieve a director of monetary liability
for breaches of the duty of loyalty, acts or omissions not in good faith or
involving intentional misconduct or knowing violations of law, the unlawful
repurchase or redemption of stock or payment of unlawful dividends or any
transaction from which a director derives an improper personal benefit. Thus,
liability for monetary damages will still exist under the Liability Provisions
if liability is based upon one of these grounds. The Liability Provisions will
have no effect on the availability of equitable remedies, such as an injunction
or rescission for the breach of a director's fiduciary duty, and will in no way
limit or otherwise affect liability for violation of the federal securities
laws.
The Liability Provisions do not eliminate the liability of directors of the
Company for monetary damages arising out of the directors' breach of their
fiduciary duty of care. The duty of care refers to the fiduciary duty of
directors to be sufficiently diligent and careful in considering a transaction
or taking or refusing to take some corporate action. Liability for a breach of
the duty of care arises when directors have failed to exercise sufficient care
in reaching decisions and otherwise attending to their responsibilities as
directors. The Liability Provisions do not eliminate the duty of care; they only
eliminate monetary damage awards occasioned by a breach of that duty in certain
circumstances. Thus a breach of the duty of care remains a valid basis for a
suit seeking to stop a proposed transaction from occurring. After the
transaction has occurred, however, except in certain limited circumstances, the
shareholders would no longer have a claim for monetary damages based on a breach
of the duty of care even if that breach involved gross negligence on the part of
the directors.
The indemnification provided by the Liability Provisions and the limitation
on the personal liability of a director to its shareholders for monetary damages
for violations of a director's fiduciary duty of care provided by the Liability
Provisions extend only so far as is legally permitted. If the DGCL is amended to
permit broader indemnification rights, the protection afforded to directors and
officers of the Company by the Liability Provisions will be expanded to the
fullest extent authorized by the DGCL, as so amended, without further
shareholder action. Similarly, if the DGCL is amended to permit the further
elimination or limitation of the personal liability of directors for breaches of
fiduciary duties, then the liability of directors shall be eliminated or limited
to the fullest extent authorized by the DGCL.
The Company believes that the indemnification provisions described above,
together with the limitation of directors' liability provided for by the Armor
Holdings Certificate of Incorporation, will ensure that the Shareholders will
continue to benefit from the services of qualified directors and officers.
Notwithstanding the foregoing, under certain circumstances, because of such
indemnification provisions, the Company may in the future be obligated to incur
additional expense in indemnifying its officers and directors, which may affect
the Company's future profitability. In addition, Shareholders should note that
limitations on directors' liability may have the effect of reducing the
likelihood of derivative litigation against directors and may
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<PAGE>
also discourage or deter Shareholders or Management from bringing a lawsuit
against directors for breach of their fiduciary duty of care, even though such
an action, if successful, might otherwise have benefitted the Company and its
Shareholders. Furthermore, because of the limitation of a director's liability,
the Company's Shareholders will lose the right to maintain certain causes of
action in the future that exist under common law, including a Shareholder's
right on behalf of himself or the Company to recover monetary damages against
directors for negligence or gross negligence.
Accounting Treatment of Reincorporation
Federal Tax Consequences
It is the Company's belief that the merger which will take place in
connection with the Reincorporation will, under current law, constitute a
tax-free reorganization under Section 368 of the Internal Revenue Code of 1986,
as amended (the "Code"). However, no ruling has been, or is expected to be
requested from, the Internal Revenue Service (the "IRS") and no opinion of
counsel or of any other tax advisor has been obtained, nor will such an opinion
be requested, by the Company as to the tax consequences of the Reincorporation.
Since no ruling has been, or will be, obtained, no assurance can be given that
the IRS will agree with the Company's conclusions with respect to the tax-free
nature of the Reincorporation, or that a challenge by the IRS, if made, will not
be successful.
Assuming that the Reincorporation and the merger resulting therefrom
constitute a tax-free reorganization, there will be no adverse federal income
tax consequences to the Company or its Shareholders because no gain or loss will
be recognized to the Company or Armor Holdings as a result of the
Reincorporation. Shareholders will have the same tax basis in the shares of
Armor Holdings received in this transaction as the basis in the shares of the
Company exchanged therefor, and the holding period of the shares of Armor
Holdings will include the period during which the shares of the Company were
held, provided such shares of the Company were held as capital assets on the
effective date of the Reincorporation.
The foregoing summary of federal income tax consequences is included for
general information only and does not address the federal income tax
consequences to all Shareholders, including those who acquired shares of Common
Stock pursuant to the exercise of employee stock options or otherwise as
compensation and those subject to the alternative minimum tax. In view of the
individual nature of tax consequences, Shareholders are urged to consult their
own tax advisors as to the specific tax consequences of the Reincorporation,
including the application and effect of state, local and foreign income and
other tax laws.
Amendment
The Reincorporation Agreement may be amended, modified or supplemented
prior to the effective time of the Reincorporation upon the approval of the
Board of Directors of the Company and Armor Holdings. However, no amendment,
modification or supplement may be made after the adoption of the Reincorporation
Agreement by the Shareholders of the Company which changes the Reincorporation
Agreement in a way which, in the judgment of the Board of
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<PAGE>
Directors of the Company, would have a material adverse effect on the
Shareholders of the Company, unless such amendment, modification or supplement
is approved by such Shareholders.
Termination
The Reincorporation Agreement provides that the Board of Directors of the
Company may terminate the Reincorporation Agreement and abandon the merger
contemplated thereby at any time prior to its effective time, whether before or
after approval by the Shareholders of the Company, if: (i) the Reincorporation
shall not have received the requisite approval of the Shareholders of the
Company; (ii) the Board of Directors of the Company determines for any reason in
its sole judgment that the consummation of the transaction would be inadvisable
or not in the best interests of the Company and its Shareholders; or (iii) the
Company shall not have received all required third party consents, including,
but not limited to, the consent of the Bankruptcy Court, if required, and the
Board of Directors determines that such failure will have a material adverse
effect on the Company if the Reincorporation is consummated.
Vote Required
The affirmative vote of the holders of a majority of the outstanding shares
of the Company's Common Stock is required for the approval of the
Reincorporation of the Company under the FBCA.
Recommendation Of The Board Of Directors
The Board of Directors has adopted and recommends a vote FOR Proposal No. 3
on the Proxy Card.
PROPOSAL NO. 4
AMENDMENT TO CHARTER
TO INCREASE AUTHORIZED COMMON STOCK
On March 4, 1996 the Board of Directors unanimously approved and recommends
that the Company's Shareholders consider and approve an amendment to Article IV
of the Company's Charter that would increase the number of authorized shares of
the Company's Common Stock from 15,000,000 shares to 50,000,000 shares. If
Proposal No. 3 is approved by the Shareholders and all required third party
consents related thereto are obtained, upon appropriate further action taken by
the Board of Directors and executive officers of the Company, the increase in
the number of authorized shares of Common Stock will happen automatically, as
the Certificate of Incorporation of Armor Holdings, the wholly-owned subsidiary
of the Company into which the Company proposes to merge pursuant to Proposal No.
3, will permit the surviving corporation to issue 50,000,000 shares of common
stock. The Armor Holdings Certificate of Incorporation will become the charter
of the entity surviving the merger of Armor Holdings and the Company.
As of the Record Date, the Company had 6,812,490 shares of Common Stock
outstanding. In addition, as of the Record Date, 1,314,981 shares of Common
Stock were reserved for issuance upon conversion of all outstanding stock
options.
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Accordingly, as of the Record Date there were an aggregate of 6,872,529
authorized shares of Common Stock unissued, unreserved for issuance and
otherwise available for issue by the Company.
The proposed increase in the authorized Common Stock has been recommended
by the Board of Directors to assure that an adequate supply of authorized,
unissued shares is available for general corporate needs and to provide the
Board of Directors with the necessary flexibility to issue stock in connection
with acquisitions, merger transactions or financings without the expense and
delay incidental to obtaining Shareholder approval of an amendment to the
Charter at the time of such action, except as may be required for a particular
issuance by applicable law or by the rules of any stock exchange on which the
Company's securities may then be listed. The additional authorized shares of
Common Stock may be used for such purposes as raising additional capital or the
financing of an acquisition or business combination. Such shares would, however,
be available for issuance without further action by the Shareholders, unless
required by applicable law.
The additional shares of Common Stock for which authorization is sought
would be identical to the shares of the Common Stock of the Company now
authorized, except that the par value of all shares of the Company's Common
Stock, both issued and outstanding and unissued, will be changed to $.01 per
share. Holders of Common Stock do not have preemptive rights to subscribe for
additional securities which may be issued by the Company. The issuance of
additional shares of Common Stock may, among other things, have a dilutive
effect on the earnings per share and on the equity and voting power of existing
holders of Common Stock and may adversely affect the market price of the Common
Stock.
Although the Board of Directors has no present intention of issuing
additional shares for such purposes, the proposed increase in the number of
authorized shares of Common Stock could enable the Board of Directors to render
more difficult or discourage an attempt by another person or entity to obtain
control of the Company. Such additional shares could be issued by the Board of
Directors in a public or private sale, merger or similar transaction, increasing
the number of outstanding shares and thereby diluting the equity interest and
voting power of a party attempting to obtain control of the Company. The
increase in the authorized shares of Common Stock has not, however, been
proposed for an anti-takeover-related purpose and the Company has no knowledge
of any current efforts to obtain control of the Company or to effect large
accumulations of its Common Stock. Certain provisions of the Bylaws of both the
Company and Armor Holdings relating to the calling of special shareholders
meetings could also have the effect of deterring takeover attempts because of
the procedural provisions contained therein.
This Proposal No. 4 is not part of any plan by the Company to adopt a
series of amendments to its Charter or Bylaws so as to render the takeover of
the Company more difficult. Moreover, the Company is not submitting this
Proposal to enable it to frustrate any efforts by another party to acquire a
controlling interest or to seek representation on the Board of Directors.
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<PAGE>
The Board of Directors believes that the proposed amendment to Article IV
of the Charter will provide several long-term advantages to the Company and its
Shareholders. The passage of this Proposal might enable the Company to pursue
acquisitions or enter into transactions which the Board of Directors believes
provide the potential for growth and profit. If additional authorized shares are
available, transactions dependent upon the issuance of additional shares will be
less likely to be undermined by delays and uncertainties occasioned by the need
to obtain Shareholder authorization to provide for the shares necessary to
consummate such transactions. The consummation of such transactions do not
generally require the approval of Shareholders, however where the issuance of
additional shares of Common Stock could, in the aggregate, equal or exceed 20%
of the then outstanding shares of Common Stock of the Company, Shareholder
approval is required. The ability to issue shares, as the Board of Directors
determines from time to time to be in the Company's best interests, will also
permit the Company to avoid the extra expenses which would be incurred in
holding special Shareholders meetings solely to approve an increase in the
number of shares which the Company has the authority to issue.
If this Proposal and Proposal No. 5 are adopted, the Charter will be
amended to delete Article IV in its entirety and replace the same with the
following:
"ARTICLE IV.
The total number of shares of capital stock which the
corporation shall have authority to issue is Fifty-Five
Million (55,000,000) shares of the par value of one cent
($.01) each, divided into (a) Fifty Million (50,000,000)
shares of common stock (the "Common Stock") and (b) Five
Million (5,000,000) shares of preferred stock (the
"Preferred Stock"). There is hereby expressly vested in the
Board of Directors the authority to fix in the resolution or
resolutions providing for the issue of each series of
Preferred Stock, the voting power and the designations,
preferences and relative, participating, optional or
other rights of each such series, and the qualifications,
limitations or restrictions thereof. Shares of Preferred
Stock may be issued from time to time in one or more series
as may from time to time be determined by the Board of
Directors, each such series to be distinctly designated.
However, if Proposal No. 3 is adopted, the increase in the authorized
shares of Common Stock will happen without the need for an amendment to the
Charter as the Certificate of Incorporation of Armor Holdings authorizes
55,000,000 shares of capital stock, divided into 50,000,000 shares of Common
Stock and 5,000,000 shares of Preferred Stock. The shares of Common Stock
authorized by Armor Holdings will be the same as the Common Stock of the
Company, except that the par value would change from $.03 per share to $.01 per
share.
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Market Price Data
The Common Stock of the Company is traded on AMEX under the symbol "ABE".
On June 27, 1996, the last full trading date prior to the printing and
mailing of this Proxy Statement, the reported closing price for the Common Stock
on AMEX was $7.875. Shareholders are urged to obtain the current market
quotation for the shares of the Company's Common Stock.
Vote Required
The affirmative vote of the holders of a majority of the outstanding shares
of the Company's Common Stock present or represented by proxy and voting at a
shareholders meeting at which a quorum is present is required to approve this
Proposal No. 4.
Recommendation of the Board of Directors
The Board of Directors has adopted and recommends that the Shareholders
vote FOR Proposal No. 4 on the Proxy Card.
PROPOSAL NO. 5
AMENDMENT TO THE CHARTER
TO AUTHORIZE SERIES OF PREFERRED STOCK
On March 4, 1996 the Board of Directors unanimously approved and recommends
that the Company's Shareholders consider and approve an amendment to Article IV
of the Company's Charter that would authorize a series of preferred stock, par
value $.01 per share, with the right conferred upon the Board of Directors to
set the dividend, voting, conversion, liquidation and other rights as well as
such redemption or sinking fund provisions and the qualifications, limitations
and restrictions with respect thereto of such preferred stock as they may
determine from time to time (the "New Preferred Stock"). If the Shareholders
approve this Proposal No. 5, the number of shares of New Preferred Stock
available for issuance would be 5,000,000 shares. If Proposal No. 3 is approved
by the Shareholders and all required third party consents related thereto are
obtained, upon appropriate further action taken by the Board of Directors and
executive officers of the Company, the creation of the New Preferred Stock will
happen automatically, as the Certificate of Incorporation of Armor Holdings, the
wholly-owned subsidiary of the Company into which the Company proposes to merge
pursuant to Proposal No. 3, provides for the creation of the New Preferred
Stock. The Armor Holdings Certificate of Incorporation will become the charter
of the entity surviving the merger of Armor Holdings and the Company.
Under its existing Charter, the Company is authorized to issue 1,700,000
shares of 3% Convertible, $1.00 stated value Preferred Stock (the "Old Preferred
Stock"). Such shares of Old Preferred Stock, which were issued as part of the
Company's Plan of Reorganization and
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<PAGE>
subsequently redeemed or converted to shares of Common Stock, are governed by
certain rights and preferences contained in the Charter which may not
accommodate the Company's future needs. As of the Record Date, the Company had
no shares of Old Preferred Stock outstanding. In addition, as of the close of
business on the Record Date, there were no shares of Old Preferred Stock
reserved for issuance upon conversion of outstanding stock options under the
Company's existing stock option plans or upon the exercise of certain conversion
rights under other agreements which have been entered into by the Company.
The creation of the New Preferred Stock has been recommended by the Board
of Directors to assure that an adequate supply of authorized, unissued shares is
available for general corporate needs and to provide the Board of Directors with
the necessary flexibility to issue preferred stock in connection with
acquisitions, merger transactions or financings without the expense and delay
incidental to obtaining shareholder approval of an amendment to the Charter at
the time of such action, except as may be required for a particular issuance by
applicable law or by the rules of any stock exchange on which the Company's
securities may then be listed. Although the New Preferred Stock may be used for
such purposes as raising additional capital or the financing of an acquisition
or business combination, the Company currently has no plans or arrangements
related to the issuance of any of the New Preferred Stock proposed to be
authorized by the amendment to the Charter. Such shares would, however, be
available for issuance without further action by the Shareholders, unless
required by applicable law. There is no public trading market for the Old
Preferred Stock, nor would there be a public trading market for the New
Preferred Stock until such time as: (i) a registration statement with respect to
such shares filed by the Company with the SEC under the Securities Act of 1933,
as amended (the "Securities Act"), or the Exchange Act becomes effective; and
(ii) such shares become listed on a national securities exchange or on the
National Association of Securities Dealers Automated Quotation system
("NASDAQ"). The Company does not presently contemplate registering the shares of
New Preferred Stock under the Securities Act or the Exchange Act.
The shares of New Preferred Stock for which authorization is sought would
not be identical to the shares of the Old Preferred Stock of the Company now
authorized. If authorized, the New Preferred Stock may be issued in one or more
series, the terms of which may be determined at the time of issuance by the
Board of Directors, without further action by the Shareholders, and may include
voting rights (including the right to vote as a series on particular matters),
preferences as to dividends and liquidation, conversion and redemption rights
and sinking fund provisions. All shares of Old Preferred Stock were issued
pursuant to the Plan of Reorganization and subsequently redeemed or converted to
shares of Common Stock. Consequently, there are no shares of Old Preferred Stock
issued and outstanding nor are such shares available for reissuance. The
issuance of any New Preferred Stock could affect the rights of the holders of
Common Stock and therefore reduce the value of the Common Stock and make it less
likely that holders of Common Stock would receive a premium upon a sale of their
shares of Common Stock. In particular, specific rights granted to future holders
of New Preferred Stock could be issued to restrict the Company's ability to
merge with or sell its assets to a third party, which could have the effect of
delaying or preventing a change of control of the Company and may adversely
affect the rights of holders of Common Stock.
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<PAGE>
This Proposal No. 5 is not part of any plan by the Company to adopt a
series of amendments to its Charter or Bylaws so as to render the takeover of
the Company more difficult. Moreover, the Company is not submitting this
Proposal to enable it to frustrate any efforts by another party to acquire a
controlling interest or to seek representation on the Board of Directors.
The Board of Directors believes that the proposed amendment to Article IV
of the Charter will provide several long-term advantages to the Company and its
Shareholders. The passage of this Proposal might enable the Company to pursue
acquisitions or enter into transactions which the Board of Directors believes
provide the potential for growth and profit. If the shares of New Preferred
Stock are available, transactions dependent upon the issuance of preferred stock
will be less likely to be undermined by delays and uncertainties occasioned by
the need to obtain Shareholder authorization for the New Preferred Stock prior
to consummation of such transactions. The consummation of such transactions do
not generally require the approval of Shareholders, however where the issuance
of shares of New Preferred Stock which are convertible into shares of Common
Stock could result in an increase of 20% or more of the then outstanding shares
of Common Stock, Shareholder approval is required. The ability to issue shares
of preferred stock, as the Board of Directors determines from time to time to be
in the Company's best interests, will also permit the Company to avoid the extra
expenses which would be incurred in holding special Shareholders meetings solely
to approve the creation of one or more series of preferred stock.
If this Proposal and Proposal No. 4 are adopted, the Charter will be
amended to delete Article IV in its entirety and replace the same with the
following:
"ARTICLE IV.
The total number of shares of capital stock which the
corporation shall have authority to issue is Fifty-Five
Million (55,000,000) shares of the par value of one cent
($.01) each, divided into (a) Fifty Million (50,000,000)
shares of common stock (the "Common Stock") and (b) Five
Million (5,000,000) shares of preferred stock (the
"Preferred Stock"). There is hereby expressly vested in the
Board of Directors the authority to fix in the resolution or
resolutions providing for the issue of each series of
Preferred Stock, the voting power and the designations,
preferences and relative, participating, optional or
other rights of each such series, and the qualifications,
limitations or restrictions thereof. Shares of Preferred
Stock may be issued from time to time in one or more series
as may from time to time be determined by the Board of
Directors, each such series to be distinctly designated.
However, if Proposal No. 3 is adopted, the authorization of the New
Preferred Stock will happen without the need for an amendment to the Charter as
the Certificate of Incorporation
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of Armor Holdings authorizes 55,000,000 shares of capital stock, divided into
50,000,000 shares of Common Stock and 5,000,000 shares of Preferred Stock having
identical powers, designations, preferences, rights, limitations and
restrictions as the New Preferred Stock.
Market Price Data
There is no public trading market for the Old Preferred Stock of the
Company, nor will there be a public trading market for the New Preferred Stock
until such time as: (i) a registration statement with respect to such shares
filed by the Company with the SEC under the Securities Act or the Exchange Act
becomes effective; and (ii) such shares become listed on a national securities
exchange or on NASDAQ. The Company does not presently contemplate registering
the shares of New Preferred Stock under the Securities Act or the Exchange Act.
The Company's Common Stock is traded on AMEX under the symbol "ABE".
Vote Required
The affirmative vote of the holders of a majority of the outstanding shares
of the Company's Common Stock present or represented by proxy and voting at a
shareholders meeting at which a quorum is present is required to approve this
Proposal No. 5.
Recommendation of the Board of Directors
The Board of Directors has adopted and recommends that the Shareholders
vote FOR Proposal No. 5 on the Proxy Card.
PROPOSAL NO. 6
ADOPTION OF THE 1996 STOCK OPTION PLAN
At the Meeting, Shareholders will be asked to consider and act upon a
proposal to adopt the Company's 1996 Stock Option Plan (the "1996 Plan").
1996 Stock Option Plan
On March 4, 1996, the Board of Directors of the Company adopted the 1996
Plan, subject to Shareholder approval at the Meeting. The Board of Directors
believes that stock options and other stock-based awards are desirable (1) as an
effective incentive for participating key employees, consultants and Directors
(collectively, "Participants") to use their judgment, initiative and efforts to
ensure the successful conduct of the Company's business, (2) to further align
such Participants' interests with those of the Company's Shareholders by
providing an opportunity to increase their stock ownership and (3) to encourage
such Participants to remain in the service of the Company. Pursuant to the 1996
Plan, Participants may be granted stock options ("Options"), which may be
incentive stock options ("Incentive Options") or non-qualified
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<PAGE>
stock options ("Non-Qualified Options"). The following description of the 1996
Plan is not intended to be complete and is qualified in its entirety by the
complete text of the 1996 Plan set forth in Appendix D to this Proxy Statement.
If the 1996 Plan is approved by Shareholders, the total number of Options
authorized under the 1996 Plan will be 1,500,000 shares (which number is subject
to adjustment in the event of stock dividends, stock splits and other similar
events) of the Company's Common Stock. To the extent that Options granted under
the 1996 Plan expire or terminate without having been exercised, the shares of
the Company's Common Stock covered by such Options will again become available
for award.
If the 1996 Plan is approved by Shareholders, an option committee of the
Board of Directors (the "Option Committee") will be created by the Board of
Directors following the Meeting, which will have authority to administer the
1996 Plan although, under certain conditions, the Board of Directors shall have
the power to administer the 1996 Plan. The Option Committee must consist of no
fewer than two members, each of whom is a "disinterested person" within the
meaning of Rule 16b-3 of the Exchange Act. The Option Committee will have the
authority to determine the employees to whom Options will be granted, the time
when such Options shall be granted, the number of shares which shall be subject
to each Option (subject to certain limitations in the case of Incentive
Options), the purchase price or exercise price of each Option (no less than 100%
of fair market value for Incentive Options), the period(s) during which such
Options shall be exercisable (whether in whole or in part) (no more than ten
years for Incentive Options) and the other terms and provisions thereof.
Generally, Options may be granted only to employees employed and consultants
engaged by the Company or of any subsidiary corporation or parent corporation of
the Company. Directors who are also employees of the Company are also eligible
to participate. Consultants are eligible to receive awards of Non-Qualified
Options, but are not eligible to receive Incentive Options. No person who owns,
directly or indirectly, at the time of the granting of an Incentive Option to
him, 10% or more of the total combined voting power of all classes of stock of
the Company will be eligible to receive any Incentive Options under the 1996
Plan unless the option price is at least 110% of the fair market value of the
Common Stock subject to the option, determined on the date of grant.
Common Stock purchased on the exercise of Options may be paid for in cash
or by certified check, or with shares of the Company's Common Stock (if
permitted by the terms of the Option and by applicable law) or by payment on
such terms as the Option Committee shall determine.
The Option Committee shall have the option at any time to suspend or
terminate the 1996 Plan, if such plan is approved by the Shareholders, provided
that rights and obligations under any Option granted while the 1996 Plan was in
effect may not be altered or impaired by suspension or termination of the 1996
Plan, except with the consent of the holder thereof.
The Board of Directors or the Option Committee, as the case may be, shall
have the right, from time to time, to amend the 1996 Plan, provided that no
amendment shall be made
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without the approval of the Shareholders to the extent required by Rule 16b-3 or
for the exception for performance-based compensation under Section 162(m) of the
Internal Revenue Code of 1986, as amended (the "Code"), that will: (i) increase
the total number of shares reserved for Options under the 1996 Plan (other than
an increase resulting from certain adjustments); (ii) reduce the exercise price
of any Option granted thereunder; (iii) modify the provisions of the 1996 Plan
relating to eligibility; or (iv) materially increase the benefits accruing to
participants under the 1996 Plan or extend the maximum option period thereunder.
The Board of Directors or the Option Committee, as the case may be, shall be
authorized to amend the 1996 Plan and the Options granted thereunder to permit
the Incentive Options granted thereunder to qualify as incentive stock options
within the meaning of Section 422 of the Code.
In the event of any change in the outstanding shares of the Company's
Common Stock (through events such as a stock split, stock dividend,
recapitalization of the Company or other like change in its capital structure),
the Option Committee will make such adjustment to each outstanding Option that
it, in its sole discretion, deems appropriate, subject to the provisions of
Section 424(a) of the Code as to Incentive Options. It is intended that
Incentive Options granted under the 1996 Plan will meet the definitional
requirements of Section 422(b) of the Code for "incentive stock options."
Under the Code, an employee generally is not subject to regular income tax
upon the grant or exercise of an Incentive Option if, subsequent to its
exercise, the employee holds the stock received for the longer of two years from
the date of the grant or one year from the date of exercise (the "Required
Holding Period"). Upon the sale of such stock subsequent to the Required Holding
Period, the difference, if any, between the amount realized from the sale and
the tax basis to the employee will be taxed as long-term capital gain or loss
(provided that such stock was held by the employee as a capital asset at such
time).
In general, if an employee: (i) exercises an Incentive Option by delivering
stock previously acquired pursuant to the exercise of an Incentive Option before
the end of the Required Holding Period applicable to such stock; or (ii) after
exercising an Incentive Option, disposes of the stock so acquired before the end
of the Required Holding Period (i.e., in either case, makes a "disqualifying
disposition"), such employee would be deemed in receipt of ordinary income in
the year of the disqualifying disposition in an amount equal to the excess of
the fair market value of the stock at the date of exercise over the exercise
price. However, if the disposition of the stock is a sale or exchange with
respect to which a loss, if sustained, would be recognized to such employee, and
if the sale proceeds are less than the fair market value of the stock on the
date of exercise of the Incentive Option, the employee's ordinary income would
be limited to the excess, if any, of the amount realized on such disposition
over the tax basis of such stock. If the amount realized upon a taxable
disposition of the stock exceeds the fair market value of the stock on the date
of exercise, the excess would be treated as short-term or long-term capital
gain, depending on the applicable holding period on the disposition date
(provided that such stock was held by the employee as a capital asset at such
time).
A deduction is not allowed to the Company for federal income tax purposes
with respect to the grant or exercise of an Incentive Option or the disposition,
after the Required
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Holding Period, of stock acquired upon exercise. In the event of a disqualifying
disposition, a federal income tax deduction will be allowed to the Company in an
amount equal to the ordinary income taxable to the employee, provided that such
amount constitutes an ordinary and necessary business expense to the Company and
is reasonable.
For purposes of computing whether an employee is subject to any alternative
minimum tax liability, an employee who exercises an Incentive Option generally
would be required to increase alternative minimum taxable income, and compute
the tax basis in the stock so acquired, in the same manner as if the optionee
had exercised a Non-Qualified Option.
A participant who receives a Non-Qualified Option will not recognize any
taxable income upon the grant of such Non-Qualified Option. In general, upon
exercise of a Non-Qualified Option, a participant will be treated as having
received ordinary income in an amount equal to the excess of the fair market
value of the stock at the time of exercise over the exercise price.
Any holder of a Non-Qualified Option who is subject to the reporting
requirements of Section 16(a) of the Exchange Act should consult his tax advisor
as to whether the timing of income recognition is deferred for any period
following exercise of such Non-Qualified Option (i.e., the "Deferral Period").
Absent a written election filed with the IRS within thirty days after the date
of exercise pursuant to Section 83(b) of the Code to include in income, as of
the exercise date, the excess of the fair market value of the stock on the
exercise date over the exercise price, recognition of income by the holder will
be deferred until the expiration of the Deferral Period, if any.
If approved by the Shareholders, the 1996 Plan will not be qualified under
the provisions of Section 401(a) of the Code and will not be subject to any of
the provisions of the Employee Retirement Income Security Act of 1974, as
amended.
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New Plan Benefits
The following table sets forth the stock options that the individuals and
groups referred to below will be eligible to receive in 1996 under the 1996 Plan
if the 1996 Plan is approved by the Shareholders at the Meeting.
Name and Position 1996 Stock Option Plan
Dollar Value ($) Number of Units
---------------- ---------------
Jonathan M. Spiller, (1) (1)
President and Chief Executive Officer......
Richard T. Bistrong, (1) (1)
Vice President - Sales and Marketing.......
Carol T. Burke, (1) (1)
Vice President - Finance and Secretary.....
J. Michael Elliott,
Vice President - Operations.............. (1) (1)
Executive Group.............................. (1) (1)
Non-Executive Director Group................. (2) (2)
Non-Executive Officer Employee Group......... (1) (1)
- ----------
(1) The grant of Options under the 1996 Plan is entirely within the discretion
of the Option Committee. The Company cannot determine the nature, amount or
the dollar value of awards that will be made in the future.
(2) Not eligible for participation.
Vote Required
The affirmative vote of holders of a majority of the outstanding shares of
Common Stock present or represented by proxy and voting at a shareholders
meeting at which a quorum is present is required for the ratification of the
1996 Plan.
Recommendation of the Board of Directors
The Board of Directors has adopted and recommends that the Shareholders
vote FOR Proposal No. 6 on the Proxy Card.
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PROPOSAL NO. 7
ADOPTION OF THE 1996 NON-EMPLOYEE DIRECTORS
STOCK OPTION PLAN
There will be presented to the Meeting a proposal to adopt the 1996
Non-Employee Directors Stock Option Plan (the "1996 Directors Plan"). The 1996
Directors Plan will replace the 1994 Outside Directors Stock Plan, which is
being discontinued for purposes of granting further options. The 1996 Directors
Plan is intended to benefit the Company and its shareholders by allowing those
members of the Board of Directors of the Company who are neither current nor
former employees of the Company to increase their financial stake in the Company
through ownership of Common Stock, thus underscoring the directors' mutual
interest with shareholders in increasing the long-term value of the Company's
stock.
On March 4, 1996, the Board of Directors of the Company adopted the 1996
Directors Plan. Primary aspects of the 1996 Directors Plan, the text of which is
set forth in Appendix E, are as follows.
General Information
Participation in the 1996 Directors Plan would be limited to members of the
Board of Directors who are not current or former employees of the Company or any
of its subsidiaries ("Non-Employee Directors"). After the election of six
directors at the Meeting, there will be five Non-Employee Directors.
Stock Option Grant
The 1996 Directors Plan is a formula plan pursuant to which non-qualified
options to acquire 75,000 shares of the Company's Common Stock will be
automatically granted to each Non-Employee Director upon the date of his or her
initial election or appointment to the Board of Directors in consideration for
service as a Director. There are 300,000 shares of Common Stock reserved for
issuance under the 1996 Directors Plan. Under the 1996 Directors Plan's formula,
the exercise price for all 75,000 options granted to each Non-Employee Director
under the 1996 Directors Plan will be the closing price on the date of the grant
of the Company's Common Stock as quoted on the composite tape of AMEX, or on
such exchange as the Company's Common Stock may then be trading. Of the 75,000
options granted to each Non-Employee Director, options to acquire 25,000 shares
become exercisable upon each of the first three anniversary dates following the
date of the grant and all 75,000 options granted to each Non-Employee Director
shall expire ten years from the date of grant. The exercise price must be paid
in cash. If, on the day of the grant, counsel for the Company determines, in
her/his sole discretion, that the Company is in possession of material,
undisclosed information that would prevent it from issuing securities, then the
grant of options to Non-Employee Directors will be suspended until the second
day after public dissemination of the information (or the first trading day
thereafter). The amount, pricing and other terms of the grant will remain as set
forth in the
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1996 Directors Plan, with the exercise price of the option to be determined in
accordance with the formula on the date the option is finally granted.
Cessation of Service
Upon retirement, a Non-Employee Director's options will continue to become
exercisable and must be exercised by the earlier of (i) 36 months following the
date of retirement or (ii) the expiration of the applicable option period, or
such options shall be forfeited. Upon a Non-Employee Director's disability or
death, those options held by the Non-Employee Director for at least one year
prior to the date of death or the date of cessation of service following
disability shall become immediately exercisable; the Non-Employee Director or
his/her legal representatives or heirs must exercise such options by the earlier
of (i) 6 months or 36 months from the date of cessation of service due to
disability or death, respectively, as the case may be, or (ii) the expiration of
the applicable option period, or such options shall be forfeited. Should an
individual cease to serve as a Non-Employee Director for any reason other than
retirement, disability, death or cause, he/she will have 90 days within which to
exercise only those options which were exercisable as of the date he/she ceased
to serve as a director.
Federal Income Tax Consequences
The grant of a non-qualified stock option will not result in income for the
grantee or in a deduction for the Company. The exercise of a stock option would
result in ordinary income for the grantee and a deduction for the Company
measured by the difference between the option price and the fair market value of
the shares received at the time of exercise.
Other Information
Upon their initial election to the Board of Directors on January 18, 1996,
each of Messrs. Ehrlich and Sokolow, both of whom are Non-Employee Directors,
were granted 75,000 stock options pursuant to the terms of the 1996 Directors
Plan, subject to shareholder approval of such plan. Such options vest in three
equal annual installments on January 18, 1997, 1998 and 1999, at an exercise
price of $3.75 per share, the closing trading price of the Company's Common
Stock on NASDAQ on January 18, 1996.
Upon his initial election to the Board of Directors on May 13, 1996, Mr.
Strauss, a Non-Employee Director, was granted 75,000 stock options pursuant to
the terms of the 1996 Directors Plan, subject to shareholder approval of such
plan. Such options vest in three equal annual installments on May 13, 1997, 1998
and 1999, at an exercise price of $7.50 per share, the closing trading price of
the Company's Common Stock on AMEX on May 13, 1996.
The 1996 Directors Plan will become effective on approval of the Company's
Shareholders and will terminate, for purposes of granting further options, on
December 31, 2006 unless terminated earlier by the Board of Directors or
extended by the Board with the approval of Shareholders.
Pursuant to the 1994 Outside Directors Stock Plan, Non-Employee Directors
are currently compensated for their services as directors. For a description of
such compensation, see "INFORMATION CONCERNING MEETINGS OF THE BOARD OF
DIRECTORS AND BOARD COMMITTEES AND DIRECTOR COMPENSATION -- COMPENSATION OF
DIRECTORS". As of June 27, 1996 the last full trading date prior to the printing
and mailing of this Proxy Statement, the reported closing price of the Company's
Common Stock on AMEX was $7.875.
New Plan Benefits
The following table sets forth the stock options that the individuals and
groups referred to below are eligible to receive in 1996 if the 1996 Directors
Plan is approved by the
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Shareholders at the Meeting. Executive officers and employee-directors of the
Company are not eligible to participate in the 1996 Directors Plan.
Name and Position 1996 Non-Employee Directors
Stock Option Plan
Dollar Value ($) Number of Units
---------------- ---------------
Warren B. Kanders,
Chairman, Board of Directors............... ------- (1) 0 (1)
Jonathan M. Spiller,
Director, Chief Executive Officer and
President ............................... ------- (2) 0 (2)
Burtt R. Ehrlich,
Director................................... 281,250 (3) 75,000
Nicholas Sokolow
Director................................... 281,250 (3) 75,000
Thomas W. Strauss
Director................................... 562,500 (4) 75,000
Richard C. Bartlett
Director................................... ------- (1) 0 (1)
Non-Executive Director Group................... 1,125,000 225,000
Non-Executive Officer Employee Group........... ------- (2) ---(2)
- ----------
(1) Messrs. Kanders and Bartlett have voluntarily renounced their eligibility
to participate in the 1996 Directors Plan.
(2) Not eligible for participation.
(3) Dollar value is based upon the closing trading price of the Company's
Common Stock on NASDAQ on January 18, 1996, the date of Messrs. Ehrlich and
Sokolow's initial election to the Board of Directors. On such date, the
closing trading price was $3.75 per share. The dollar value of future
awards to persons elected to the Board of Directors who qualify as
Non-Employee Directors is dependent upon the future share price of the
Company's Common Stock. If the shareholders approve the 1996 Directors
Plan, such options will vest in three equal annual installments to each of
Messrs. Ehrlich and Sokolow on January 18, 1997, 1998 and 1999.
(4) Dollar value is based upon the closing trading price of the Company's
Common Stock on AMEX on May 13, 1996, the date of Mr. Strauss' initial
election to the Board of Directors. On such date, the closing trading price
was $7.50 per share. The dollar value of future awards to person elected to
the Board of Directors who qualify as Non-Employee Directors is dependent
upon the future share price of the Company's Common Stock. If the
Shareholders approve the 1996 Directors Plan, such options will vest in
three equal annual installments on May 13, 1997, 1998 and 1999.
Vote Required
The affirmative vote of holders of a majority of the outstanding shares of
Common Stock present or represented by proxy and voting at a shareholders
meeting at which a quorum is present is required for the ratification of the
1996 Directors Plan.
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Recommendation of the Board of Directors
The Board of Directors has adopted and recommends that the Shareholders
vote FOR Proposal No. 7 on the Proxy Card.
PROPOSAL NO. 8
RATIFICATION OF APPOINTMENT OF PUBLIC ACCOUNTANTS
Upon the recommendation of the Audit Committee of the Board of Directors,
the Board has appointed Deloitte & Touche LLP as independent certified public
accountants for the Company to audit the consolidated financial statements of
the Company and its subsidiaries for the fiscal year ending December 31, 1996
("Fiscal 1996"). Deloitte & Touche LLP has acted in this capacity since 1990.
The Company's Board of Directors recommends the ratification of the
appointment of Deloitte & Touche LLP as independent certified public accountants
for the Company to audit the financial statements of the Company for Fiscal
1996. If a majority of the Shareholders voting at the Meeting at which a quorum
is present, in person or by proxy, should not approve such appointment, the
Audit Committee and the Board of Directors of the Company will reconsider the
appointment of independent certified public accountants.
Vote Required
The affirmative vote of holders of a majority of the outstanding shares of
Common Stock present and voting at a Meeting at which a quorum is present is
required for the reappointment of Deloitte & Touche LLP as the Company's
independent certified public accountants for Fiscal 1996.
Recommendation of the Board of Directors
The Board of Directors recommends that the Shareholders reappoint Deloitte
& Touche LLP as independent certified public accountants of the Company for the
Fiscal 1996 by voting FOR Proposal No. 8 on the Proxy Card.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors does not
intend to present any other matter for action at the Meeting other than as set
forth in the Notice of Annual Meeting and this Proxy Statement. If any other
matters properly come before the Meeting, it
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is intended that the shares represented by the proxies will be voted, in the
absence of contrary instructions, in the discretion of the persons named in the
proxy.
COMPLIANCE WITH SECTION 16(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Exchange Act requires the Company's directors and
executive officers and any persons who own more than 10% of the Company's
capital stock to file with the SEC (and, if such security is listed on a
national securities exchange, with such exchange), various reports as to
ownership of such capital stock. Such persons are required by SEC regulations to
furnish the Company with copies of all Section 16(a) forms they file.
Based solely upon reports and representations submitted by the directors,
executive officers and holders of more than 10% of the Company's capital stock,
all Forms 3, 4 and 5 showing ownership of and changes of ownership in the
Company's capital stock during Fiscal 1995 were timely filed with the SEC and
NASDAQ, except that Richard T. Bistrong, Vice President-Sales and Marketing of
the Company, and Carol T. Burke, Vice President-Finance and Secretary of the
Company, both of whom had previously been awarded stock options which should
have been reported currently on Form 3 upon their becoming executive officers of
the Company on June 9, 1995, instead filed a Form 5 for Fiscal 1995 reporting
their beneficial ownership of shares underlying such stock options.
ANNUAL REPORT
A copy of the Company's 1995 Annual Report to Shareholders accompanies this
Proxy Statement. Any Shareholder who has not received a copy of the 1995 Annual
Report to Shareholders and wishes to do so should contact the Company's
Corporate Secretary by mail at the address set forth on the notice of annual
meeting or by telephone at (904) 261-4035.
The Company will provide, without charge, to each Shareholder as of the
Record Date, on the written request of the Shareholder, a copy of the Company's
Annual Report on Form 10-KSB and all amendments thereto for the year ended
December 31, 1995, including the financial statements and schedules, as filed
with the SEC. Shareholders should direct the written request to the Company's
Corporate Secretary at c/o American Body Armor & Equipment, Inc., 191 Nassau
Place Road, Yulee, Florida 32097.
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PROPOSALS BY SHAREHOLDERS
Any proposal of a Shareholder intended to be presented at the Annual
Meeting of Shareholders to be held in 1997 must be received by the Company no
later than February 21, 1997 to be considered for inclusion in the Proxy
Statement and form of proxy for the 1997 annual meeting. Proposals must comply
with Rule 14a-8 promulgated by the Securities and Exchange Commission pursuant
to the Exchange Act.
FOR THE BOARD OF DIRECTORS
CAROL T. BURKE
Secretary
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This Proxy is Solicited by the Board of Directors of
American Body Armor & Equipment, Inc.
----------
ANNUAL MEETING
July 16, 1996
The undersigned hereby appoints Jonathan M. Spiller and Warren B. Kanders as
proxies to represent the undersigned, with full power of substitution, at the
Annual Meeting of Shareholders of American Body Armor & Equipment, Inc., to be
held on July 16, 1996 at 10:00 A.M., New York City time, at The Metropolitan
Club, 1 East 60th Street, New York, New York 10022, and at any adjournments and
postponements thereof:
1. ELECTION OF __ FOR all nominees listed below
DIRECTORS (except as marked to the contrary below)
__ WITHHOLD AUTHORITY to vote for all nominees listed below
Warren B. Kanders Burtt R. Ehrlich Thomas W. Strauss
Jonathan M. Spiller Nicholas Sokolow Richard C. Bartlett
INSTRUCTION: To withhold authority to vote for any individual nominee,
strike a line through or otherwise strike the nominee's name
in the list above.
2. To consider and vote upon a proposal to change the name of the Company to
"Armor Holdings, Inc."
|_| FOR |_| AGAINST |_| WITHHOLD AUTHORITY TO VOTE
3. To consider and act upon a proposal to reincorporate the Company under the
laws of the State of Delaware by means of a merger of the Company into a
newly formed wholly-owned subsidiary incorporated in the State of Delaware
(the "Reincorporation").
|_| FOR |_| AGAINST |_| WITHHOLD AUTHORITY TO VOTE
4. To consider and vote upon a proposal to increase the number of shares of
Common Stock which the Company shall have the authority to issue to
50,000,000.
|_| FOR |_| AGAINST |_| WITHHOLD AUTHORITY TO VOTE
5. To consider and vote upon a proposal to authorize a series of preferred
stock with such rights, privileges and preferences as the Board of
Directors shall from time to time determine.
|_| FOR |_| AGAINST |_| WITHHOLD AUTHORITY TO VOTE
6. To consider and vote upon a proposal to adopt the Company's 1996 Stock
Option Plan (the "1996 Plan").
|_| FOR |_| AGAINST |_| WITHHOLD AUTHORITY TO VOTE
<PAGE>
7. To consider and vote upon a proposal to adopt the Company's 1996
Non-Employee Directors Stock Option Plan (the "1996 Directors Plan").
|_| FOR |_| AGAINST |_| WITHHOLD AUTHORITY TO VOTE
8. To consider and vote upon a resolution ratifying the selection of
Deloitte & Touche LLP as the Company's independent certified public
accountants for the fiscal year ending December 31, 1996.
|_| FOR |_| AGAINST |_| WITHHOLD AUTHORITY TO VOTE
In their discretion, the Proxies are authorized to vote upon such other
business that may properly come before the meeting.
THIS BALLOT, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. UNLESS OTHERWISE SPECIFIED, THE SHARES WILL BE
VOTED "FOR" EACH PROPOSAL.
Dated:________________ _______________________________ _______________________
Signatures of Shareholder(s)
NOTE: Signature should agree with name on stock certificate as printed thereon.
Executors, administrators, trustees and other fiduciaries should so
indicate when signing.
PLEASE DATE, SIGN AND RETURN THIS PROXY. THANK YOU.
<PAGE>
APPENDIX A
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of July __, 1996 (the "Merger
Agreement"), between American Body Armor & Equipment, Inc., a Florida
corporation ("ABA") and Armor Holdings, Inc., a Delaware corporation and a
wholly-owned subsidiary of ABA ("Armor Holdings").
W I T N E S S E T H
WHEREAS, on the date hereof, ABA has authority to issue 15,000,000 shares
of Common Stock, par value of $.03 per share (the "ABA Common Stock"), of which
there are 6,825,835 shares outstanding and no shares held in treasury, and
1,700,000 shares of 3% Convertible $1.00 stated value Preferred Stock, of which
there are no shares issued and outstanding and no shares held in treasury;
WHEREAS, on the date hereof, Armor Holdings has authority to issue
50,000,000 shares of Common Stock, par value $.01 per share (the "Armor Holdings
Common Stock"), of which there are no shares issued and outstanding and no
shares held in treasury, and 5,000,000 shares of preferred stock, of which there
are no shares issued and outstanding and no shares held in treasury.
WHEREAS, the respective Boards of Directors of ABA and Armor Holdings have
determined that it is advisable and in the best interests of each of such
corporations that ABA merge with and into Armor Holdings upon the terms and
subject to the conditions set forth herein for the purpose of effecting the
change of the state of incorporation of ABA from the State of Florida to the
State of Delaware;
WHEREAS, the Board of Directors of ABA has by resolutions duly adopted and
approved this Merger Agreement;
WHEREAS, ABA has approved this Merger Agreement in its capacity as the
sole stockholder of Armor Holdings; and
WHEREAS, the Board of Directors of ABA has directed that this Merger
Agreement be submitted to a vote of its shareholders at the annual meeting of
shareholders to be held on July 16, 1996, or at any and all adjournments and
postponements thereof;
NOW, THEREFORE, in consideration of the mutual agreements and covenants
herein contained, ABA and Armor Holdings hereby agree as follows:
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Section 1. Merger. ABA shall be merged with and into Armor Holdings (the
"Merger"), and Armor Holdings shall be the surviving corporation (hereinafter
sometimes referred to as the "Surviving Corporation"). The Merger shall become
effective upon the date and time of filing of appropriate articles of merger,
providing for the Merger, with the Secretary of State of the State of Florida
and an appropriate certificate of ownership and merger, providing for the
Merger, with the Secretary of State of the State of Delaware, whichever later
occurs (the "Effective Time").
Section 2. Governing Documents. The Certificate of Incorporation of Armor
Holdings, as in effect immediately prior to the Effective Time, shall be the
Certificate of Incorporation of the Surviving Corporation without change or
amendment until thereafter amended in accordance with the provisions thereof and
applicable law. The Bylaws of Armor Holdings, as in effect immediately prior to
the Effective Time, shall be the Bylaws of the Surviving Corporation without
change or amendment until thereafter amended in accordance with the provisions
thereof, the Certificate of Incorporation of the Surviving Corporation and
applicable law.
Section 3. Succession. At the Effective Time, the separate corporate
existence of ABA shall cease, and Armor Holdings shall succeed to all of the
assets and properties (whether real, personal or mixed), rights, privileges,
franchises, immunities and powers of ABA, and Armor Holdings shall assume and be
subject to all of the duties, liabilities, obligations and restrictions of every
kind and description of ABA, including, without limitation, all outstanding
indebtedness of ABA, all in the manner and as more fully set forth in Section
259 of the General Corporation Law of the State of Delaware.
Section 4. Directors. The directors and the members of the various
committees of the Board of Directors of ABA immediately prior to the Effective
Time shall be the directors and members of such committees of the Surviving
Corporation at and after the Effective Time to serve until the expiration of
their respective terms and until their successors are duly elected and
qualified.
Section 5. Officers. The officers of ABA immediately preceding the
Effective Time shall be the officers of the Surviving Corporation at and after
the Effective Time until their successors are duly elected and qualified.
Section 6. Further Assurances. From time to time, as and when required by
the Surviving Corporation or by its successors or assigns, there shall be
executed and delivered on behalf of ABA such deeds and other instruments, and
there shall be taken or caused to be taken by it all such further and other
action, as shall be appropriate, advisable or necessary in order to vest,
perfect or conform, of record or otherwise, in the Surviving Corporation, the
title to and lien of all property, interests, assets, rights, privileges,
immunities, powers, franchises and authority of ABA, and otherwise to carry out
the purposes of this Merger Agreement, and the officers and directors of the
Surviving Corporation are fully authorized, in the name and on
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behalf of ABA or otherwise, to take any and all such action and to execute and
deliver any and all such deeds and other instruments.
Section 7. Conversion of Securities. At the Effective Time, by virtue of
the Merger and without any action on the part of the holder thereof:
(a) each share of ABA Common Stock issued and outstanding
immediately prior to the Effective Time shall be changed and converted into and
shall be one fully paid and nonassessable share of Armor Holdings Common Stock;
(b) each share of ABA Common Stock held in the treasury of ABA
immediately prior to the Effective Time shall be automatically converted into
one share of Armor Holdings Common Stock, which shares shall continue to be
retained and held by the Surviving Corporation in the treasury thereof;
(c) each option, warrant, purchase right, unit or other security of
ABA issued and outstanding immediately prior to the Effective Time shall be
changed and converted into and shall be an identical security of Armor Holdings,
and the same number of shares of Armor Holdings Common Stock shall be reserved
for purposes of the exercise of such options, warrants, purchase rights, units
or other securities as is equal to the number of shares of ABA Common Stock so
reserved as of the Effective Time; and
(d) each share of Armor Holdings Common Stock issued and outstanding
in the name of ABA immediately prior to the Effective Time shall be canceled and
retired and resume the status of authorized and unissued shares of Armor
Holdings Common Stock, and no shares of Armor Holdings Common Stock or other
securities of Armor Holdings shall be issued in respect thereof.
Section 8. Employee Option and Benefit Plans. Each option or other right
to purchase or otherwise acquire shares of ABA Common Stock granted under any
employee option, stock purchase or other benefit plan of ABA (collectively, the
"Plans") which is outstanding immediately prior to the Effective Time shall, by
virtue of the Merger and without any action on the part of the holder thereof,
be converted into and become an option or right to acquire (and Armor Holdings
hereby assumes the obligation to deliver) the same number of shares of Armor
Holdings Common Stock, at the same price per share, and upon the same terms, and
subject to the same conditions, as set forth in the respective Plan as in effect
immediately prior to the Effective Time. The same number of shares of Armor
Holdings Common Stock shall be reserved for purposes of the Plans as is equal to
the number of shares of ABA Common Stock so reserved immediately prior to the
Effective Time. Armor Holdings hereby assumes, as of the Effective Time, (i) the
Plans and all obligations of ABA under the Plans, including the outstanding
options, stock purchase rights or awards or portions thereof granted pursuant to
the Plans and the right to grant additional options and stock purchase right
thereunder and (ii) all
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obligations of ABA under all other benefit plans in effect as of the Effective
Time with respect to which employee rights or accrued benefits are outstanding
as of the Effective Time.
Section 9. Dividends and Distributions. In the event that any dividend or
other distribution shall hereafter be declared by the Board of Directors of ABA
in respect of the outstanding shares of ABA Common Stock payable subsequent to
the Effective Time, the obligation to make payment of such dividend or other
distribution shall, by virtue of the Merger, become the obligation of the
Surviving Corporation and shall be satisfied in the manner specified in such
declaration, except that, to the extent such dividend or other distributions
shall have been declared payable in whole or in part in shares of ABA Common
Stock, the Surviving Corporation shall issue, in place thereof, to the persons
entitled thereto, the identical number of shares of Armor Holdings Common Stock.
Section 10. Conditions to the Merger. The consummation of the Merger and
the other transactions herein provided are subject to the following conditions:
(a) receipt prior to the Effective Time of the requisite approval of
the Merger by the holders of ABA Common Stock pursuant to the Florida Business
Corporation Act; and
(b) receipt by ABA of any required third party consents, including,
but not limited to, if required, the consent of the United States Bankruptcy
Court, Middle District of Florida, Jacksonville Division.
Section 11. Certificates. At and after the Effective Time all of the
outstanding certificates which immediately prior thereto represented shares of
ABA Common Stock or warrants, units or other securities of ABA shall be deemed
for all purposes to evidence ownership of and to represent the shares of Armor
Holdings Common Stock or warrants, units or other securities of Armor Holdings,
as the case may be, into which the shares of ABA Common Stock or warrants, units
or other securities of ABA represented by such certificates have been converted
as herein provided and shall be so registered on the books and records of the
Surviving Corporation or its transfer agent. The registered owner of any such
outstanding certificate shall, until such certificate shall have been
surrendered for transfer or otherwise accounted for to the Surviving Corporation
or its transfer agent, have and be entitled to exercise any voting and other
rights with respect to, and to receive any dividends and other distributions
upon, the shares of Armor Holdings Common Stock or warrants, units or other
securities of Armor Holdings, as the case may be, evidenced by such outstanding
certificate, as above provided.
Section 12. Amendment. The parties hereto may amend, modify or supplement
this Merger Agreement prior to the Effective Time; provided, however, that no
amendment, modification or supplement may be made after the adoption of this
Merger Agreement by the shareholders of ABA which changes this Merger Agreement
in a way which, in the judgment
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of the Board of Directors of ABA, would have a material adverse effect on the
shareholders of ABA, unless such amendment, modification or supplement is
approved by such shareholders.
Section 13. Termination. This Merger Agreement may be terminated, and the
Merger and the other transactions provided for herein may be abandoned, at any
time prior to the Effective Time, whether before or after approval of this
Merger Agreement by the shareholders of ABA, by action of the Board of Directors
of ABA if:
(a) the condition specified in Section 10 hereof shall not have been
satisfied or waived;
(b) the Board of Directors of ABA determines for any reason, in its
sole judgment and discretion, that the consummation of the Merger would be
inadvisable or not in the best interests of ABA and its shareholders; or
(c) ABA fails to obtain all required third party consents and the
Board of Directors of ABA determines that such failure will have a material
adverse effect on the Company if the merger is consummated.
Section 14. Counterparts. This Merger Agreement may be executed in one or
more counterparts, and each such counterpart hereof shall be deemed to be an
original instrument, but all such counterparts together shall constitute but one
agreement.
Section 15. Descriptive Headings. The descriptive headings herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Merger Agreement.
Section 16. Florida Appointment. The Surviving Corporation hereby agrees
that it may be served with process in the State of Florida in any action or
special proceeding for enforcement of any liability or obligation of ABA or the
Surviving Corporation arising from the Merger. The Surviving Corporation
appoints the Secretary of State of the State of Florida as its agent to accept
service of process in any such suit or other proceeding and a copy of such
process shall be mailed by the Secretary of State of the State of Florida to the
Surviving Corporation at 191 Nassau Place Road, Yulee, Florida 32097 Attention:
Mr. Jonathan M. Spiller, President.
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Section 17. Governing Law. This Merger Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware.
IN WITNESS WHEREOF, ABA and Armor Holdings have caused this Merger
Agreement to be executed and delivered as of the date first above written.
AMERICAN BODY ARMOR & EQUIPMENT, INC.
a Florida corporation
By: ___________________________________
Name:______________________________
Title:_______________________________
ARMOR HOLDINGS, INC.
a Delaware corporation
By: ____________________________________
Name:______________________________
Title:_______________________________
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<PAGE>
APPENDIX B
CERTIFICATE OF INCORPORATION
OF
ARMOR HOLDINGS, INC.
The undersigned, a natural person, for the purpose of organizing a
corporation for conducting the business and promoting the purposes hereinafter
stated, under the provisions and subject to the requirements of the laws of the
State of Delaware (particularly Chapter 1, Title 8 of the Delaware Code and the
acts amendatory thereof and supplemental thereto, and known, identified and
referred to as the "General Corporation Law of the State of Delaware" or the
"General Corporation Law"), hereby certifies that:
FIRST: The name of the corporation (hereinafter referred to as the
"Corporation") is:
Armor Holdings, Inc.
SECOND: The address, including street, number, city and county, of the
registered office of the Corporation in the State of Delaware is 32 Loockerman
Square, Suite L-100, City of Dover, 19904, County of Kent; and the name of the
registered agent of the Corporation in the State of Delaware is The
Prentice-Hall Corporation System, Inc.
THIRD: The purpose of the Corporation is to engage in any lawful act or
activity for which Corporations may be organized under the General Corporation
Law of the State of Delaware.
FOURTH: The total number of shares of capital stock which the corporation
shall have authority to issue is Fifty-Five Million (55,000,000) shares of the
par value of one cent ($.01) each, divided into (a) Fifty Million (50,000,000)
shares of common stock (the "Common Stock") and (b) Five Million (5,000,000)
shares of preferred stock (the "Preferred Stock"). There is hereby expressly
vested in the Board of Directors the authority to fix in the resolution or
resolutions providing for the issue of each series of Preferred Stock, the
voting power and the designations, preferences and relative, participating,
optional or other rights of each such series, and the qualifications,
limitations or restrictions thereof. Shares of Preferred Stock may be issued
from time to time in one or more series as may from time to time be determined
by the Board of Directors, each such series to be distinctly designated.
FIFTH: The name and the mailing address of the incorporator is as follows:
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NAME MAILING ADDRESS
---- ---------------
c/o Kane Kessler, P.C.
Robert L. Lawrence 1350 Avenue of the Americas, 26th Fl.
New York, New York 10019
SIXTH: The Corporation is to have perpetual existence.
SEVENTH: Whenever a compromise or arrangement is proposed between this
Corporation and its creditors or any class of them and/or between this
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this Corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this Corporation under
the provisions of Section 291 of Title 8 of the Delaware Code or on the
application of any receiver or receivers appointed for this Corporation under
Section 279 of Title 8 of the Delaware Code order a meeting of the creditors or
class of creditors, and/or of the stockholders or class of stockholders of this
Corporation, as the case may be, to be summoned in such manner as the said court
directs. If a majority in number representing three-fourths in value of the
creditors or class of creditors, and/or the stockholders or class of
stockholders of this Corporation, as the case may be, agree to any compromise or
arrangement and to any reorganization of this Corporation as a consequence of
such compromise or arrangement, the said compromise or arrangement and the said
reorganization shall, if sanctioned by the court to which the said application
has been made, be binding on all the creditors or class of creditors, and/or on
all the stockholders or class of stockholders of this Corporation, as the case
may be, and also on this Corporation.
EIGHTH: 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 and of its directors and of its stockholders or
any class thereof, as the case may be, it is further provided:
1. 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 not be
less than three (3) nor more than fifteen (15) as fixed by, or in the
manner provided in, the Bylaws. The phrase "whole Board" and the phrase
"total number of directors" shall be deemed to have the same meaning to
wit, the total number of directors which the Corporation would have if
there were no vacancies. No election of directors need be by written
ballot.
2. After the original or other Bylaws of the Corporation have been
adopted, amended, or repealed, as the case may be, in accordance with the
provisions of Section 109 of the General Corporation Law of the State of
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Delaware, and, after the Corporation has received any payment for any of
its stock, the power to adopt, amend, or repeal the Bylaws of the
Corporation may be exercised by the Board of Directors of the Corporation;
provided, however, that any provision for the classification of Directors
of the Corporation for staggered terms pursuant to the provisions of
subsection (d) of Section 141 of the General Corporation Law of the State
of Delaware shall be set forth in an initial Bylaw or in a Bylaw adopted by
the stockholders entitled to vote of the Corporation unless provisions for
such classification shall be set forth in this Certificate of
Incorporation.
3. Whenever the Corporation shall be authorized to issue only one
class of stock, each outstanding share shall entitle the holder thereof to
notice of, and the right to vote at, any meeting of stockholders. Whenever
the Corporation shall be authorized to issue more than one class of stock,
no outstanding share of any class of stock which is denied voting power
under the provisions of the certificate of incorporation shall entitle the
holder thereof to the right to vote at any meeting of stockholders except
as the provisions of paragraph (2) of subsection (b) of Section 242 of the
General Corporation Law of the State of Delaware shall otherwise require;
provided, that no share of any such class which is otherwise denied voting
power shall entitle the holder thereof to vote upon the increase or
decrease in the number of authorized shares of said class.
NINTH: (1) The Corporation shall indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Corporation) by
reason of the fact that he is or was a director, 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 expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in, or not opposed
to, the best interests of the Corporation, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his conduct was
unlawful. The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the person seeking
indemnification did not act in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of the Corporation, and,
with respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful. The right to indemnification conferred
upon such persons by this Article NINTH shall be a contract right.
(2) The Corporation shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the Corporation to procure a judgment in its favor by
reason of the fact that he is or was a 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 expenses (including attorneys' fees)
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actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Corporation and except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the Corporation unless and only to the extent that the Court of
Chancery of the State of Delaware or the court in which such action or suit was
brought shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which the Court of
Chancery or such other court shall deem proper.
(3) To the extent that a director, officer, employee or agent of the
Corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in Sections (1) and (2) of this Article
NINTH, or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith.
(4) Any indemnification under Sections (1) and (2) of this Article NINTH
(unless ordered by a court) shall be made by the Corporation only as authorized
in the specific case upon a determination that indemnification of the director,
officer, employee or agent is proper in the circumstances because he has met the
applicable standard of conduct set forth in such Sections (1) and (2). Such
determination shall be made (a) by the Board of Directors of the Corporation by
a majority vote of a quorum consisting of directors who were not parties to such
action, suit or proceeding, or (b) if such a quorum is not obtainable, or, even
if obtainable, a quorum of disinterested directors so directs, by independent
legal counsel in a written opinion, or (c) by the stockholders of the
Corporation.
(5) Expenses (including attorneys' fees) incurred by an officer or director
in defending any civil, criminal, administrative or investigative action, suit
or proceeding may be paid by the Corporation in advance of the final disposition
of such action, suit or proceeding upon receipt of an undertaking by or on
behalf of such director or officer at the commencement of such action, suit or
proceeding to repay such amount if it shall ultimately be determined that he is
not entitled to be indemnified by the Corporation authorized in this Article
NINTH. Such expenses (including attorneys' fees) incurred by other employees and
agents may be so paid upon such terms and conditions, if any, as the Board of
Directors of the Corporation deems appropriate.
(6) The indemnification and advancement of expenses provided by, or granted
pursuant to, the other sections of this Article NINTH shall not be deemed
exclusive of any other rights to which those seeking indemnification or
advancement of expenses may be entitled under law, by-law, agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in an
official capacity and as to action in another capacity while holding such
office.
(7) 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
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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 and incurred by him in any
such capacity, or arising out of his status as such, whether or not the
Corporation would have the power to indemnify him against such liability under
the provisions of Section 145 of the General Corporation Law.
(8) For purposes of this Article NINTH, references to "the Corporation"
shall include, in addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued, would
have had power and authority to indemnify its directors, officers, employees or
agents so that any person who is or was a director, officer, employee or agent
of such constituent corporation, or is or was serving at the request of such
constituent corporation, as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, shall stand
in the same position under the provisions of this Article NINTH with respect to
the resulting or surviving corporation as he would have with respect to such
consistent corporation if its separate existence had continued.
(9) For purposes of this Article NINTH, references to "other enterprises"
shall include employee benefit plans; references to "fines" shall include any
excise taxes assessed on a person with respect to an employee benefit plan; and
references to "serving at the request of the Corporation" shall include any
service as a director, officer, employee or agent of the Corporation which
imposes duties on, or involves service by, such director, officer, employee or
agent with respect to any employee benefit plan, its participants or
beneficiaries; and a person who acted in good faith and in a manner he
reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the Corporation" as referred to in this Article
NINTH.
(10) The indemnification and advance of expenses provided by, or granted
pursuant to, this Article NINTH shall, unless otherwise provided when authorized
or ratified, continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such a person.
TENTH: From time to time any of the provisions of this Certificate of
Incorporation may be amended, altered or repealed, and other provisions
authorized by the laws of the State of Delaware at the time in force may be
added or inserted in the manner and at the time prescribed by said laws, and all
rights at any time conferred upon the stockholders of the
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Corporation by this Certificate of Incorporation are granted subject to the
provisions of this Article TENTH.
Signed on July __, 1996.
----------------------------------
ROBERT L. LAWRENCE, Incorporator
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APPENDIX C
BYLAWS
OF
ARMOR HOLDINGS, INC.
ARTICLE I
Stockholders
SECTION 1. Annual Meetings. Subject to change by resolution of the Board of
Directors, the annual meeting of the stockholders of the Corporation for the
purpose of electing directors and for the transaction of such other business as
may be brought before the meeting shall be held on a date fixed, from time to
time, by the Board of Directors of the Corporation, and each successive annual
meeting shall be held on a date within thirteen months after the date of the
preceding annual meeting. The meeting may be held at such time and such place
within or without the State of Delaware as shall be fixed by the Board of
Directors and stated in the notice of the meeting.
SECTION 2. Special Meetings. Special meetings of the stockholders may be
called at any time by the President, a majority of the Board of Directors or the
Chairman of the Board or by a majority of the stockholders of record of all
shares entitled to vote. Special meetings shall be held on the date and at the
time and place either within or without the State of Delaware as specified in
the notice thereof
SECTION 3. Notice of Meetings. Except as otherwise expressly required by
law or the Certificate of Incorporation of the Corporation, written notice
stating the place and time of the meeting and the purpose or purposes of such
meeting shall be given by the Secretary to each stockholder entitled to vote
thereat at his address as it appears on the records of the Corporation not less
than ten nor more than sixty days prior to the meeting. Notice of any meeting of
stockholders shall not be required to be given to any stockholder who shall
attend such meeting in person or by proxy; and if any stockholder shall, in
person or by attorney hereunto duly authorized, waive notice of any meeting, in
writing or by telephone or facsimile, whether before or after such meeting be
held, the notice thereof need not be given to him. The attendance of any
stockholder at a meeting, in person or by proxy, without protesting prior to the
conclusion of the meeting the lack of notice of such meeting, shall constitute a
waiver of notice by him. Notice of any adjourned meeting of stockholders need
not be given except as provided in Section 5 of this Article I.
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SECTION 4. Quorum. Subject to the provisions of law in respect of the vote
that shall be required for a specific action, the number of shares the holders
of which shall be present or represented by proxy at any meeting of stockholders
in order to constitute a quorum for the transaction of any business shall be at
least a majority of all the shares issued and outstanding and entitled to vote
at such meeting. Where a separate vote by a class or classes is required, a
majority of the outstanding shares of such class or classes, present in person
or represented by proxy, shall constitute a quorum entitled to take action with
respect to that vote on that matter and the affirmative vote of the majority of
shares of such class or classes present in person or represented by proxy at the
meeting shall be the act of such class.
SECTION 5. Adjournment. At any meeting of stockholders, whether or not
there shall be a quorum present, the holders of a majority of the shares voting
at the meeting, whether present in person at the meeting or represented by proxy
at the meeting, may adjourn the meeting from time to time. Except as provided by
law, notice of such adjourned meeting need not be given otherwise than by
announcement of the time and place of such adjourned meeting at the meeting at
which the adjournment is taken. At any adjourned meeting at which a quorum shall
be present, any business may be transacted which might have been transacted at
the meeting as originally called.
SECTION 6. Organization. The Chairman of the Board or, in his absence or
non-election, the Vice Chairman or, in his absence or non-election, the
President or, in the absence of both the foregoing officers, a Vice President
shall call meetings of the stockholders to order and shall act as Chairman of
such meetings. In the absence of all of the foregoing officers, holders of a
majority in number of the shares of the capital stock of the Corporation present
in person or represented by proxy and entitled to vote at such meeting shall
elect a Chairman, who may be the Secretary of the Corporation. The Secretary of
the Corporation shall act as secretary of all meetings of the stockholders; but
in the absence of the Secretary, the Chairman may appoint any person to act as
secretary of the meeting.
SECTION 7. Voting. Each stockholder shall, except as otherwise provided by
law or by the Certificate of Incorporation, at every meeting of the stockholders
be entitled to one vote in person or by proxy for each share of capital stock
entitled to vote held by such stockholder, but no proxy shall be voted on after
three years from its date, unless said proxy provides for a longer period. Every
proxy must be signed by the stockholder or by his attorney-in-fact, and shall be
filed with the Inspectors of Election, if any, prior to being voted upon.
Directors shall be elected by a plurality of the votes of the shares present in
person or represented by proxy at the meeting and entitled to vote on the
election of directors. Any other action shall be authorized by a vote of a
majority of the votes cast except where the General Corporation Law prescribes a
different percentage of votes and/or a different exercise of voting power, and
except as may be otherwise prescribed by the provisions of the Certificate of
Incorporation and these Bylaws. In the election of directors, and for any other
action, voting need not be by ballot, unless the Board of
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Directors in its discretion, or the officer of the Corporation presiding at a
meeting of stockholders, in his or her discretion, may require that any votes
cast at such meeting shall be cast by written ballot.
SECTION 8. Stockholders List. The officer of the Corporation who has charge
of the stock ledger of the Corporation shall prepare and make a complete list of
the stockholders entitled to vote at any meeting of stockholders, arranged in
alphabetical order with the address of each and the number of shares held by
each, shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
ten days prior to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the notice of the
meeting, or, 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 thereof and may be inspected by any stockholder who is present.
The stock ledger of the Corporation shall be the only evidence as to who are the
stockholders entitled to examine the ledger, the list required by this Section 8
of Article I or the books of the Corporation, or to vote in person or by proxy
at any meeting of stockholders.
SECTION 9. Addresses of Stockholders. Each stockholder shall designate to
the Secretary of the Corporation an address at which notices of meetings and all
other corporate notices may be served upon or mailed to him, and if any
stockholder shall fail to designate such address, corporate notices may be
served upon him by mail directed to him at his last known post office address.
SECTION 10. Inspectors of Election. The Board of Directors may at any time
appoint one or more persons to serve as Inspectors of Election at the next
succeeding annual meeting of stockholders or at any other meeting or meetings
and the Board of Directors may at any time fill any vacancy in the office of
Inspector. If the Board of Directors fails to appoint Inspectors, or if any
Inspector appointed be absent or refuses to act, or if his office becomes vacant
and be not filled by the Board of Directors, the Chairman of any meeting of the
stockholders may appoint one or more temporary Inspectors for such meeting. Each
Inspector, if any, before entering upon the discharge of his duties, shall take
and sign an oath faithfully to execute the duties of inspectors at such meeting
with strict impartiality and according to the best of his ability. The
Inspectors, if any, shall determine the number of shares of stock outstanding
and the voting power of each, the shares of stock represented at the meeting,
the existence of a quorum, the validity and effect of proxies, and shall receive
votes, ballots, or consents, hear and determine all challenges and questions
arising in connection with the right to vote, count and tabulate all votes,
ballots, or consents, determine the result, and do such acts as are proper to
conduct the election or vote with fairness to all stockholders. On request of
the person presiding at the meeting, the Inspector or Inspectors, if any, shall
make a report in writing of any challenge, question, or matter determined by him
or them and execute a certificate of any fact found by him or them. Except as
otherwise required by subsection (e) of Section 231 of the General Corporation
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Law, the provisions of that Section shall not apply to the corporation. All
proxies shall be filed with the Inspectors of Election of the meeting before
being voted upon.
SECTION 11. Action by Consent. Unless otherwise provided in the Certificate
of Incorporation, any action required to be taken at any meeting of
stockholders, or any action which may be taken at any meeting of such
stockholders, may be taken without a meeting, without prior notice and without a
vote if a consent in writing, setting forth the action so taken, shall be signed
by the holders of all of the outstanding voting stock of the Corporation. In
addition, any action required by the General Corporation Law to be taken at any
annual or special meeting of stockholders, or any action which may be taken at
any annual or special meeting of stockholders, may be taken without a meeting,
without prior notice and without a vote, if a consent in writing, setting forth
the action so taken, shall be signed by the holders of outstanding stock having
not less than the minimum number of votes that would be necessary to authorize
or take such action at a meeting at which all shares entitled to vote thereon
were present and voted. Prompt notice of the taking of the corporate action
without a meeting by less than unanimous written consent shall be given to those
stockholders who have not consented in writing. Action taken pursuant to this
paragraph shall be subject to the provisions of Section 228 of the General
Corporation Law.
ARTICLE II
Board of Directors
SECTION 1. General Powers. The property, affairs and business of the
Corporation shall be managed by or under the direction of the Board of
Directors. The Board of Directors shall have the power and authority to
authorize the officers of the Corporation to enter into such agreements as the
Board of Directors shall deem appropriate, including the power and authority to
authorize the seal of the Corporation to be affixed to all papers that may
require it.
SECTION 2. Number, Qualification and Term of Office. The initial number of
directors shall consist of six (6) persons. Thereafter, the number of directors
may be fixed from time to time by action of the Board of Directors within the
maximum and minimum limits provided by the Certificate of Incorporation.
Directors need not be stockholders. The directors shall be elected at the annual
meeting of stockholders except as otherwise provided for filling vacancies. Each
director shall hold office for the term for which he is appointed or elected and
until his successor shall have been elected and shall qualify, or until his
death or until he shall resign or shall have been removed in the manner
hereinafter provided. Directors need not be elected by ballot, except upon
demand of any stockholder. The Chairman of the Board, if one be elected, and the
Vice Chairman of the Board, if one be elected, shall be chosen from among the
directors. The number of
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directors may be increased or decreased by action of the stockholders or of the
directors.
SECTION 3. Chairman of the Board. The Chairman of the Board, if any, shall
preside, if present, at all meetings of the stockholders and at all meetings of
the Board of Directors and shall perform such other duties and have such other
powers as from time to time may be assigned by the Board of Directors or
prescribed by these Bylaws.
SECTION 4. Vice Chairman of the Board. The Vice Chairman of the Board, if
any, shall, at the request of the Chairman of the Board or in his absence or
disability, perform the duties of the Chairman of the Board and when so acting
shall, have all the powers of, and be subject to all restrictions upon, the
Chairman of the Board and shall perform such other duties and have such other
powers as from time to time may be assigned to him by the Chairman of the Board
or prescribed by these Bylaws.
SECTION 5. Quorum and Manner of Action. Except as otherwise provided by law
or these Bylaws, a majority of the entire Board of Directors shall be required
to constitute a quorum for the transaction of business at any meeting, except
when a vacancy or vacancies prevents such majority, whereupon a majority of the
directors in office shall constitute a quorum, provided that such majority shall
constitute at least one-half of the whole Board. The act of a majority of a
quorum of the Board of Directors shall be the act of the Board of Directors. In
the absence of a quorum, a majority of the directors present may adjourn any
meeting from time to time until a quorum be had. Notice of any adjourned meeting
need not be given. The directors shall act only as a board and individual
directors shall have no power as such. In the event that the Board of Directors
shall be unable to take action on any matter because of a deadlock, upon the
motion of any director the matter shall be submitted to a vote of the
stockholders. Any action so approved by a majority vote of the stockholders
shall be the action of the Board of Directors, however, any director who voted
against the action taken by the stockholders prior to the submission of such
matter to the stockholders may, within ten days following such stockholder vote,
dissent in writing to such action to the Secretary of the Corporation, who shall
enter such dissent in the minutes of the Corporation.
SECTION 6. Place of Meetings; Etc. The Board of Directors may hold its
meetings, have one or more offices and keep the books and records of the
Corporation at such place or places within or without the State of Delaware as
the Board may from time to time determine or as shall be specified or fixed in
the respective notices or waivers of notice thereof.
SECTION 7. Regular Meetings. A regular meeting of the Board of Directors
shall be held for the election of officers and the transaction of other business
as soon as practicable after each annual meeting of stockholders, and other
regular meetings of said Board shall be held at such times and places as said
Board shall direct. No notice shall
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be required for any regular meeting of the Board of Directors but a copy of
every resolution fixing or changing the time or place of regular meetings shall
be mailed to every director at least three days before the first meeting held in
pursuance thereof.
SECTION 8. Special Meetings. Special meetings of the Board of Directors may
be called by the Chairman of the Board, the President, or any one Director. The
Secretary or any Assistant Secretary shall give notice of the time and place of
each special meeting by mailing a written notice of the same to each director at
his last known post office address at least three business days before the
meeting or by causing the same to be delivered personally or to be transmitted
by telecopier, overnight mail, telegraph, cable, wireless, telephone or orally
at least twenty-four hours before the meeting to each director. In the event the
Secretary or Assistant Secretary shall fail to give the notice of a special
meeting called in accordance with this Section 8, the person who called such
meeting shall be empowered to give notice of such meeting in accordance with the
immediately preceding sentence.
SECTION 9. Action by Consent. Any action required or permitted to be taken
at any meeting of the Board or of any committee thereof may be taken without a
meeting, if a written consent thereto is signed by all members of the Board or
of such committee, as the case may be, and such written consent is filed with
the minutes of proceedings of the Board or committee.
SECTION 10. Organization. At each meeting of the Board of Directors, the
Chairman of the Board or in his absence, the Vice Chairman of the Board, or in
his absence, the President, or in his absence or non-election, a director chosen
by a majority of the directors present shall act as Chairman. The Secretary or,
in his absence, an Assistant Secretary or, in the absence of both the Secretary
and an Assistant Secretary, any person appointed by the Chairman shall act as
secretary of the meeting.
SECTION 11. Resignations. Any director of the Corporation may resign at any
time by giving written notice to the Board of Directors, the President or the
Secretary of the Corporation. The resignation of any director shall take effect
at the time specified therein, and unless otherwise specified therein, the
acceptance of such resignation shall not be necessary to make it effective
SECTION 12. Removal of Directors. Except as otherwise provided by law, any
director or the entire Board of Directors may be removed, with or without cause,
by the affirmative vote of the holders of a majority of the shares then entitled
to vote at an election of directors.
SECTION 13. Vacancies. Any vacancy in the Board of Directors caused by
death, resignation, removal, disqualification, an increase in the number of
directors or any other cause shall be filled by a majority of the directors then
in office,
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though less than a quorum, or by a sole remaining director, and the directors so
chosen shall hold office until the next annual election of directors and until
their successors are duly elected and qualified, or until their earlier
resignation or removal.
SECTION 14. Compensation of Directors. Directors may receive such
reasonable sums for their services and expenses as may be directed by resolution
of the Board; provided that nothing herein contained shall be construed to
preclude any director from serving the Corporation in any other capacity and
receiving compensation therefor. Members of special or standing committees may
be allowed like compensation for their services and expenses.
SECTION 15. Committees. By resolution or resolutions passed by a majority
of the whole Board at any meeting of the Board of Directors, the directors may
designate one or more committees of the Board of Directors, each committee to
consist of two or more directors. To the extent provided in said resolution or
resolutions, unless otherwise provided by law, such committee or committees
shall have and may exercise all of the powers of the Board of Directors in the
management of the business and affairs of the Corporation, including the power
and authority to authorize the seal of the Corporation to be affixed to all
papers that may require it. No committee, however, shall have the power to
declare dividends or to authorize the issuance of shares of capital stock of the
Corporation. Further, the Board of Directors may designate one or more directors
as alternate members of a committee who may replace an absent or disqualified
member at any meeting. If an alternative member of a committee is not selected
by the Board of Directors, and in the absence or disqualification of a member of
a committee, the member or members thereof present at any meeting and not
disqualified from voting, whether or not he or they constitute a quorum, may
unanimously appoint another member of the Board of Directors to act at the
meeting in the place of any such absent or disqualified member. A committee may
make such rules for the conduct of its business and may appoint such committees
and assistants as it shall from time to time deem necessary. A majority of the
members of a committee shall constitute a quorum for the transaction of business
of such committee. Regular meetings of a committee shall be held at such times
as such committee shall from time to time by resolution determine. No notice
shall be required for any regular meeting of a committee but a copy of every
resolution fixing or changing the time or place of regular meetings shall be
mailed to every member of such committee at least three days before the first
meeting held in pursuance thereof. Special meetings of a committee may be called
by the Chairman of such committee or the Secretary of such committee, or any two
members thereof. The Secretary of the Corporation or the Secretary of such
committee shall give notice of the time and place of each special meeting by
mail at least two days before such meeting or by telegraph, cable, wireless,
telephone or orally at least twenty-four hours before the meeting to each member
of such committee
SECTION 16. Participation in Meetings. Members of the Board of Directors or
of any committee may participate in any meeting of the Board or committee,
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as the case may be, by means of conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other, and such participation shall constitute presence in person at such
meeting.
SECTION 17. Interested Directors. No contract or transaction between the
Corporation and one or more of its directors or officers, or between the
Corporation and any other corporation, partnership, association, or other
organization in which one or more of its directors or officers are directors or
officers, or have a financial interest, shall be void or voidable solely for
this reason, or solely because the director or officer is present at or
participates in the meeting of the Board of Directors or committee thereof which
authorizes the contract or transaction, or solely because his or their votes are
counted by such purpose if (i) the material facts as to his or their
relationship or interest and as to the contract or transaction are disclosed or
are known to the Board of Directors or the committee, and the Board of Directors
or the committee in good faith authorizes the contract or transaction by the
affirmative votes of a majority of the disinterested directors, even though the
disinterested directors be less than a quorum; or (ii) the material facts to his
or their relationship or interest and as to the contract or transaction are
disclosed or are known to the stockholders entitled to vote thereon, and the
contract or transaction is specifically approved in good faith by vote of the
stockholders; or (iii) the contract or transaction is fair as to the Corporation
as of the time it is authorized, approved or ratified, by the Board of
Directors, a committee thereof or the stockholders. Common or interested
directors may be counted in determining the presence of a quorum at a meeting of
the Board of Directors or of a committee which authorizes the contract or
transaction.
ARTICLE III
Officers
SECTION 1. Number. The officers of the Corporation shall consist of a
President, a Treasurer and a Secretary and, if deemed necessary, expedient or
desirable by the Board of Directors, a Chairman of the Board, a Vice-Chairman of
the Board, an Executive Vice President and one or more other Vice-Presidents. In
addition, the Board may elect one or more Vice Presidents and such other
officers as may be appointed in accordance with the provisions of Section 3 of
this Article III. Any number of offices may be held by the same person, as the
directors may determine. Except as may otherwise be provided in the resolutions
of the Board of Directors choosing him, no officer other than the Chairman or
Vice-Chairman of the Board, if any, need be a director.
SECTION 2. Election, Term of Office and Qualification. The officers shall
be elected annually by the Board of Directors at their first meeting after each
annual meeting of the stockholders of the Corporation. Each officer, except such
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officers as may be appointed in accordance with the provisions of Section 3 of
this Article, shall hold office until his successor shall have been duly elected
and qualified, or until his death or until he shall have resigned or shall have
become disqualified or shall have been removed in the manner hereinafter
Provided.
SECTION 3. Subordinate Officers. The Board of Directors or the President
may from time to time appoint such other officers, including one or more
Assistant Treasurers and one or more Assistant Secretaries, and such agents and
employees of the Corporation as may be deemed necessary or desirable. Such
officers, agents and employees shall hold office for such period and upon such
terms and conditions, have such authority and perform such duties as in these
Bylaws provided or as the Board of Directors or the President may from time to
time prescribe. The Board of Directors or the President may from time to time
authorize any officer to appoint and remove agents and employees and to
prescribe the powers and duties thereof.
SECTION 4. Removal. Any officer may be removed, either with or without
cause, by the affirmative vote of a majority of the Board of Directors
SECTION 5. Resignations. Any officer may resign at any time by giving
written notice to the Board of Directors, the President or the Secretary. Any
such resignation shall take effect at the date of receipt of such notice or at
any later time specified therein; and unless otherwise specified therein, the
acceptance of such resignation shall not be necessary to make it effective.
SECTION 6. Vacancies. A vacancy in any office because of death,
resignation, removal, disqualification or any other cause shall be filled for
the unexpired portion of the term in the manner prescribed in these Bylaws for
regular election or appointment to such office.
SECTION 7. President. The President shall be the Chief Executive Officer of
the Corporation and shall have general direction of the affairs of the
Corporation and general supervision over its several officers, subject, however,
to the control of the Board of Directors, and in general shall perform such
duties and, subject to the other provisions of these Bylaws, have such powers
incident to the office of President and perform such other duties and have such
other powers as from time to time may be assigned to him by the Board of
Directors.
SECTION 8. Vice Presidents. A Vice President may sign with the Treasurer or
an Assistant Treasurer or the Secretary or an Assistant Secretary certificates
of stock of the Corporation and shall have such other powers and shall perform
such other duties as from time to time may be assigned to him by the Board of
Directors or the President or prescribed by these Bylaws.
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SECTION 9. Secretary. The Secretary shall keep or cause to be kept, in
books provided for the purpose, the minutes of the meetings of the stockholders,
the Board of Directors and any committee when so required, shall see that all
notices are duly given in accordance with the provisions of these Bylaws and as
required by law, shall be custodian of the records and the seal of the
Corporation and see that the seal is affixed to all documents, the execution of
which on behalf of the Corporation under its seal is duly authorized in
accordance with the provisions of these Bylaws, shall keep or cause to be kept a
register of the post office address of each stockholder, may sign with the
Chairman of the Board, the President or any Vice President certificates of stock
of the Corporation, and in general shall perform such duties and have such
powers incident to the office of Secretary and shall perform such other duties
and have such other powers as from time to time may be assigned to him by the
Board of Directors or the President or prescribed by these Bylaws.
SECTION 10. Assistant Secretaries. Any Assistant Secretary shall, at the
request of the Secretary or in his absence or disability, perform the duties of
the Secretary and when so acting shall have all the powers of, and be subject to
all the restrictions upon, the Secretary and shall perform such other duties and
have such other powers as from time to time may be assigned to him by the
President, the Secretary or the Board of Directors or prescribed by these
Bylaws.
SECTION 11. Chief Financial Officer. The Chief Financial Officer shall be
responsible to the Board of Directors and the President for all financial
control and internal audit of the Corporation and its subsidiaries. He shall
perform such other duties as may be assigned to him by the Board of Directors,
the President or prescribed by these Bylaws.
SECTION 12. Treasurer. The Treasurer shall have charge and custody of, and
be responsible for, all funds and securities of the Corporation, and deposit all
such funds in the name of the Corporation in such banks, trust companies or
other depositaries as shall be selected in accordance with the provisions of
these Bylaws, shall at all reasonable times exhibit his books of account and
records, and cause to be exhibited the books of account and records of any
corporation controlled by the Corporation to any of the directors of the
Corporation upon application during business hours at the office of the
Corporation, or such other corporation, where such books and records are kept,
shall, if called upon to do so, receive and give receipts for monies due and
payable to the Corporation from any source whatsoever, may sign with the
Chairman of the Board, the President or any Vice President certificates of stock
of the Corporation, and in general shall perform such duties and have such
powers incident to the office of Treasurer and such other duties and have such
other powers as from time to time may be assigned to him by the Board of
Directors or the President or prescribed by these Bylaws.
SECTION 13. Assistant Treasurers. Any Assistant Treasurer shall, at the
request of the Treasurer or in his absence or disability, perform the duties of
the
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Treasurer and when so acting shall have all the powers of, and be subject to all
the restrictions upon, the Treasurer and shall perform such duties and have such
other powers as from time to time may be assigned to him by the President, the
Treasurer or the Board of Directors or prescribed by these Bylaws.
SECTION 14. Other Officers. Such officers as the Board of Directors may
choose shall perform such duties and have such powers as may be appropriate to
such officer or as from time to time may be assigned to them by the Board of
Directors. The Board of Directors may delegate to any other officer of the
Corporation the power to choose such other officers and to prescribe their
respective duties and powers.
SECTION 15. Salaries. The salaries of the officers shall be fixed from time
to time by the Board of Directors. No officer shall be prevented from receiving
such salary by reason of the fact that he is also a director of the Corporation.
SECTION 16. Authority of Officers. The officers of the Corporation shall
have such duties and authority as set forth in these Bylaws and as shall be
determined from time to time by the Board of Directors.
ARTICLE IV
Shares and Their Transfer
SECTION 1. Certificates of Stock. Certificates for shares of the capital
stock of the Corporation shall be in such form not inconsistent with law as
shall be approved by the Board of Directors. They shall be numbered in order of
their issue and shall be signed by the Chairman of the Board or the President or
any Vice President and the Treasurer or any Assistant Treasurer, or the
Secretary or any Assistant Secretary of the Corporation, and the seal of the
Corporation shall be affixed thereto. Any of or all the signatures on the
certificate may be a facsimile. In case any officer, transfer agent or registrar
who shall have signed or whose facsimile signature shall have been placed upon
any such certificate or certificates shall cease to be such officer or officers
of the Corporation, whether because of death, resignation or otherwise, before
such certificate or certificates shall have been delivered by the Corporation,
such certificate or certificates may nevertheless be adopted by the Corporation
and be issued and delivered as though the person or persons who signed such
certificate or certificates or whose facsimile signature shall have been used
thereon had not ceased to be such officer or officers of the Corporation.
SECTION 2. Uncertificated Shares. Subject to any conditions imposed by the
General Corporation Law, 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
the
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stock of the Corporation shall be uncertificated shares. Within a reasonable
time after the issuance or transfer of any uncertificated shares, the
Corporation shall send to the registered owner thereof any written notice
prescribed by the General Corporation Law.
SECTION 3. Fractional Share Interests. The Corporation may, but shall not
be required to, issue fractions of a share. If the Corporation does not issue
fractions of a share, it shall (1) arrange for the disposition of fractional
interests by those entitled thereto, (2) pay in cash the fair value of fractions
of a share as of the time when those entitled to receive such fractions are
determined, or (3) issue scrip or warrants in registered form (either
represented by a certificate or uncertificated) or bearer form (represented by a
certificate) which shall entitle the holder to receive a full share upon the
surrender of such scrip or warrants aggregating a full share. A certificate for
a fractional share or an uncertificated fractional share shall, but scrip or
warrants shall not unless otherwise provided therein, entitle the holder to
exercise voting rights, to receive dividends thereon, and to participate in any
of the assets of the Corporation in the event of liquidation. The Board of
Directors may cause scrip or warrants to be issued subject to the conditions
that they shall become void if not exchanged for certificates representing the
full shares or uncertificated full shares before a specified date, or subject to
the conditions that the shares for which scrip or warrants are exchangeable may
be sold by the Corporation and the proceeds thereof distributed to the holders
of scrip or warrants, or subject to any other conditions which the Board of
Directors may impose.
SECTION 4. Transfer of Stock. Transfer of shares of the capital stock of
the Corporation shall be made only on the books of the Corporation by the holder
thereof, or by his attorney hereunto authorized by a power of attorney duly
executed and filed with the Secretary of the Corporation, or a transfer agent of
the Corporation, if any, on surrender of the certificate or certificates for
such shares properly endorsed. A person in whose name shares of stock stand on
the books of the Corporation shall be deemed the owner thereof as regards the
Corporation, and the Corporation shall not be bound to recognize any equitable
or other claim to or interest in such shares on the part of any other person,
whether or not it shall have express or other notice thereof, except as
otherwise provided by the laws of the State of Delaware.
SECTION 5. Lost, Destroyed and Mutilated Certificates. The holder of any
stock issued by the Corporation shall immediately notify the Corporation of any
loss, destruction or mutilation of the certificate therefor or the failure to
receive a certificate of stock issued by the Corporation, and the Board of
Directors or the Secretary of the Corporation may, in its or his discretion,
cause to be issued to such holder a new certificate or certificates of stock,
upon compliance with such rules, regulations and/or procedures as may be
prescribed or have been prescribed by the Board of Directors with respect to the
issuance of new certificates in lieu of such lost, destroyed or mutilated
certificate or certificates of stock issued by the Corporation which are not
received, including
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reasonable indemnification to indemnify it against any claim that may be made
against it on account of the alleged loss, theft or destruction of any such
certificate or the issuance of such new certificate.
SECTION 6. Transfer Agent and Registrar; Regulations. The Corporation
shall, if and whenever the Board of Directors shall so determine, maintain one
or more transfer offices or agencies, each in the charge of a transfer agent
designated by the Board of Directors, where the shares of the capital stock of
the Corporation shall be directly transferable, and also one or more registry
offices, each in the charge of a registrar designated by the Board of Directors,
where such shares of stock shall be registered, and no certificate for shares of
the capital stock of the Corporation, in respect of which a Registrar and/or
Transfer Agent shall have been designated, shall be valid unless countersigned
by such Transfer Agent and registered by such Registrar, if any. The Board of
Directors shall also make such additional rules and regulations as it may deem
expedient concerning the issue, transfer and registration of certificates for
shares of the capital stock of the Corporation.
SECTION 7. Fixing Date for Determination of Stockholders of Record. In
order that the Corporation may determine the stockholders entitled to notice of
or to vote at any meeting of stockholders or any adjournment thereof, to express
consent to corporate action in writing without a meeting, to receive payment of
any dividend or other distribution or allotment of any rights, to exercise any
rights in respect of any change, conversion or exchange of stock or for the
purpose of any other lawful action, the Board of Directors may fix, in advance,
a record date which shall not be more than sixty nor less than ten days before
the date of such meeting, nor more than sixty days prior to any other action,
and only such stockholders as shall be stockholders of record of the date so
fixed shall be entitled to such notice of and to vote at such meeting and any
adjournment thereof, to express consent to any such corporate action to receive
payment of such dividend or to receive such allotment of rights, or to exercise
such rights, as the case may be, notwithstanding any transfer of any stock on
the books of the Corporation after any such record date fixed as aforesaid. If
the stock transfer books are to be closed for the purpose of determining
stockholders entitled to notice of or to vote at a meeting in the case of a
merger or consolidation, the books shall be closed at least twenty days before
such meeting.
SECTION 8. Beneficial Owners. The Corporation shall be entitled to
recognize the exclusive right of a person registered on its books as the owner
of shares to receive dividends, and to vote as such owner, and to hold liable
for calls and assessments a person registered on its books as the owner of
shares, and shall not be bound to recognize any equitable or other claim to or
interest in such share or shares on the part of any other person, whether or not
it shall have express or other notice thereof, except as otherwise provided by
law.
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ARTICLE V
General Provisions
SECTION 1. Fiscal Year. The fiscal year of the Corporation shall end on
such date of each year as shall be determined by the Board of Directors of the
Corporation.
SECTION 2. Waivers of Notice. Whenever any notice of any nature is required
by law, the provisions of the Certificate of Incorporation or these Bylaws to be
given, a waiver thereof in writing, signed by the person or persons entitled to
said notice, whether before or after the time stated therein, shall be deemed
equivalent thereto.
SECTION 3. Qualifying in Foreign Jurisdiction. The Board of Directors shall
have the power at any time and from time to time to take or cause to be taken
any and all measures which they may deem necessary for qualification to do
business as a foreign corporation in any one or more foreign jurisdictions and
for withdraw; therefrom
SECTION 4. Registered Office. The registered office of the Corporation
shall be in the City of Dover, County of Kent, State of Delaware.
SECTION 5. Other Offices. The Corporation may also have offices at such
other places, both within and without the State of Delaware as the Board of
Directors may from time to time determine.
SECTION 6. Proxies. Except as otherwise provided in these Bylaws or in the
Certificate of Incorporation of the Corporation, and unless otherwise provided
by resolution of the Board of Directors, the Chairman of the Board may appoint
from time to time an attorney or attorneys, or agent or agents, of the
Corporation, on behalf and in the name of the Corporation, to cast the votes
which the Corporation may be entitled to cast as a stockholder or otherwise in
any other corporation any of whose stock or other securities may be held by the
Corporation, at meetings of the holders of the stock or other securities of such
other corporation, or to consent in writing to any action by such other
corporation, and may instruct the person or persons so appointed as to the
manner of casting such votes or giving such consent, and may execute or cause to
be executed on behalf and in the name of the Corporation and under its corporate
seal, or otherwise, all such written proxies or other instruments as he may deem
necessary or proper in the premises.
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SECTION 7. Seal. The Board of Directors shall provide a suitable seal
containing the name of the Corporation, which seal shall be in the charge of the
Secretary and which may be used by causing it or a facsimile thereof to be
impressed or affixed or reproduced or otherwise. If and when so directed by the
Board of Directors, a duplicate of the seal may be kept and be used by an
officer of the Corporation designated by the Board.
SECTION 8. Dividends. Dividends upon the capital stock of the Corporation,
subject to the provisions of the Certificate of Incorporation, if any, may be
declared by the Board of Directors at any regular or special meeting, and may be
paid in cash, in property, or in shares of the capital stock. Before payment of
any dividend, there may be set aside out of any funds of the Corporation
available for dividends such sum or sums as the Board of Directors from time to
time in its absolute discretion, deems proper as a reserve or reserves to meet
contingencies, or for equalizing dividends, or for repairing or maintaining any
property of the Corporation, or for any proper purpose, and the Board of
Directors may modify or abolish any such reserve.
SECTION 9. Disbursements. All checks or demands for money and notes of the
Corporation shall be signed by such officer or officers or such other person or
persons at the Board of Directors may from time to time designate.
ARTICLE VI
Amendments
These Bylaws may be altered, amended or repealed, in whole or in part, or
new Bylaws may be adopted by either the stockholders or by the Board of
Directors, provided, however, that notice of such alteration, amendment, repeal
or adoption of new Bylaws be contained in the notice of such meeting of
stockholders or Board of Directors, as the case may be. All such amendments must
be approved by either the holders of a majority of the outstanding capital stock
entitled to vote thereon or by a majority of the entire Board of Directors then
in office.
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APPENDIX D
AMERICAN BODY ARMOR & EQUIPMENT, INC.
1996 STOCK OPTION PLAN
I. PURPOSE
American Body Armor & Equipment, Inc. (the "Company") desires to afford
certain of its key employees and consultants and the key employees and
consultants of any subsidiary corporation or parent corporation of the Company
now existing or hereafter formed or acquired who are responsible for the
continued growth of the Company an opportunity to acquire a proprietary interest
in the Company, and thus to create in such key employees and consultants an
increased interest in and a greater concern for the welfare of the Company and
its subsidiaries.
The Company, by means of this 1996 Stock Option Plan (the "Plan"), seeks to
retain the services of key employees and consultants (sometimes hereinafter
collectively, "Participants") and to enable the Company to attract and retain
persons of competence.
The stock options ("Options") offered pursuant to the Plan are a matter of
separate inducement and are not in lieu of any salary or other compensation for
the services of any key employee or consultant.
The Options granted under the Plan are intended to be either incentive
stock options ("Incentive Options") within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"), or options that do not
meet the requirements for Incentive Options ("Non-Qualified Options"), but the
Company makes no warranty as to the qualification of any Option as an Incentive
Option.
II. AMOUNT OF STOCK SUBJECT TO THE PLAN
AND OTHER LIMITATIONS
(a) The total number of shares of common stock of the Company which may be
purchased or acquired pursuant to the exercise of Options granted under the Plan
shall not exceed, in the aggregate, 1,500,000 shares of the authorized common
stock, $.01 par value per share, of the Company (the "Shares"), such number
subject to adjustment as provided in Article XI hereof. Shares that are the
subject of Options shall be counted only once in determining
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whether the maximum number of Shares that may be purchased or awarded under the
Plan has been exceeded.
(b) Shares acquired under the Plan may be either authorized but unissued
Shares or Shares of issued stock held in the Company's treasury, or both, at the
discretion of the Company. If and to the extent that Options granted under the
Plan expire or terminate without having been exercised, the Shares covered by
such expired or terminated Options shall again become available for award under
the Plan.
Except as provided in Articles XVIII and XXI, the Company may, from time to
time during the period beginning on the date of the adoption of the Plan by the
Company (the "Effective Date") and ending on the date which is ten (10) years
from the Effective Date (the "Termination Date"), grant to certain Participants
(as hereinafter defined) of the Company, or of any subsidiary corporation or
parent corporation of the Company now existing or hereafter formed or acquired,
Incentive Options and/or Non-Qualified Options under the terms hereinafter set
forth.
As used in the Plan, the terms "subsidiary corporation" and "parent
corporation" shall mean, respectively, a corporation coming within the
definition of such terms contained in Sections 424(f) and 424(e) of the Code.
III. ADMINISTRATION
The board of directors of the Company (the "Board of Directors") shall
designate from among its members an option committee (the "Committee") to
administer the Plan. The Committee shall consist of two or more members of the
Board of Directors, each of whom shall be a "disinterested person" within the
meaning of Rule 16b-3 (or any successor rule or regulation) ("Rule 16b-3")
promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange
Act") and each of whom shall be an "outside director" in accordance with Section
162(m) of the Code. Pursuant to Rule 16b-3, promulgated under the Exchange Act,
in order for a director to be eligible to receive benefits under a plan, a
director must not, during the one (1) year period prior to serving as a plan
administrator, have been granted or awarded equity securities pursuant to any
plan of an issuer, except through participation in formula grants, ongoing
broad-based employee plans and elections to receive annual directors' fees in
securities of the issuer. A majority of the members of the Committee shall
constitute a quorum, and the act of a majority of the members of the Committee
shall be the act of the Committee. Any member of the Committee may be removed at
any time, either with or without cause, by resolution adopted by the Board of
Directors, and any vacancy on the Committee at any time may be filled by
resolution adopted by the Board of Directors.
Any or all powers and functions of the Committee may be exercised at any
time
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and from time to time by the Board of Directors; provided, however, that all of
the members of the Board of Directors are "disinterested persons" within the
meaning of Rule 16b-3 (or any successor rule or regulation) promulgated under
the Exchange Act.
Subject to the express provisions of the Plan, the Board of Directors or
the Committee, as the case may be, shall have authority, in its discretion, to
determine the Participants to whom Options shall be granted, the time when such
Options shall be granted, the number of Shares which shall be subject to each
Option, the purchase price or exercise price of each Option, the period(s)
during which such Options shall be exercisable (whether in whole or in part) and
the other terms and provisions thereof (which need not be identical).
Subject to the express provisions of the Plan, the Board of Directors or
the Committee, as the case may be, also shall have authority to construe the
Plan and the Options granted thereunder, to amend the Plan and the Options
thereunder, to prescribe, amend and rescind rules and regulations relating to
the Plan, to determine the terms and provisions of the Options (which need not
be identical) granted thereunder and to make all other determinations necessary
or advisable for administering the Plan. The Board of Directors or the
Committee, as the case may be, also shall have the authority to require, in its
discretion, as a condition of the granting of any such Option, that the
Participants agree (i) not to sell or otherwise dispose of Shares acquired
pursuant to the exercise of such Option for a period of six (6) months following
the date of the acquisition of such Option and (ii) that in the event of
termination of employment of such employee or the engagement of such consultant,
as the case may be, other than as a result of dismissal without cause, such
Participant will not, for a period to be fixed at the time of the grant of the
Option, enter into any other employment or consulting arrangement or participate
directly or indirectly in any other business or enterprise which is competitive
with the business of the Company or any subsidiary corporation or parent
corporation of the Company, or enter into any employment in which such employee
or consultant, as the case may be, will be called upon to utilize special
knowledge obtained through employment with or retention by the Company or any
subsidiary corporation or parent corporation thereof. In no event will a
Participant who is subject to the reporting requirements of Section 16(a) of the
Exchange Act be entitled to sell or otherwise dispose of any Shares acquired
pursuant to exercise of any such Options for a period of six (6) months from the
date of the acquisition of such Options.
The determination of the Board of Directors or the Committee, as the case
may be, on matters referred to in this Article III shall be conclusive.
The Board of Directors or the Committee, as the case may be, may employ
such legal counsel, consultants and agents as it may deem desirable for the
administration of the Plan and may rely upon any opinion or computation received
from any such legal counsel, consultant or agent. Expenses incurred by the Board
of Directors or the Committee, as the case may be, in the engagement of such
counsel, consultant or agent shall be paid by the Company. No member or former
member of the Board of Directors or the Committee shall be liable for any action
or determination made in good faith with respect to the Plan or any award of
Options granted hereunder.
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IV. ELIGIBILITY
Options may be granted only to employees employed and consultants engaged
by the Company or of any subsidiary corporation or parent corporation of the
Company (such employees and consultants hereinafter at times collectively
referred to as the "Participants"), except as hereinafter provided, and shall
not be granted to any director who is not also an employee of the Company. Any
director who is a member of the Committee shall be ineligible to receive an
Option. In addition, any director who during the one (1) year period prior to
serving as a plan administrator, was granted Options pursuant to the Plan, will,
in accordance with Rule 16b-3, as promulgated under the Exchange Act, be
ineligible to receive an Option, unless his participation was limited solely to
participation in formula grants, an on-going broad-based employee plan or the
election to receive annual directors' fees in securities of the Company.
Incentive Stock Options shall not be granted to consultants.
The Plan does not create a right in any Participant to participate in the
Plan, to become or remain an employee of the Company, nor does it create a right
in any Participant to have any Options granted to him or her.
V. OPTION PRICE AND PAYMENT
The price for each Share purchasable under any Non-Qualified Option granted
hereunder shall be such amount as the Board of Directors or the Committee, as
the case may be, shall deem appropriate, but in no event less than the par value
of a Share of common stock.
The price for each Share purchasable under any Incentive Option granted
hereunder shall be such amount as the Board of Directors or the Committee, as
the case may be, shall, in its best judgment, determine to be not less than one
hundred per cent (100%) of the fair market value per Share at the date the
Option is granted; provided, however, that in the case of an Incentive Option
granted to a person who, at the time such Option is granted, owns shares of the
Company or any subsidiary corporation or parent corporation of the Company which
possess more than ten per cent (10%) of the total combined voting power of all
classes of shares of the Company or of any subsidiary corporation or parent
corporation of the Company, the purchase price for each Share shall be such
amount as the Board of Directors or the Committee, as the case may be, in its
best judgment, shall determine to be not less than one hundred ten per cent
(110%) of the fair market value per Share at the date the Option is granted. In
determining stock ownership of a Participant for any purposes under the Plan,
the rules of Section 424(d) of the Code shall be applied, and the Board of
Directors or the Committee, as the case may be, may rely on representations of
fact made to it by the Participant and believed by it to be true.
If the Shares are listed on a national securities exchange in the United
States on any date on which the fair market value per Share is to be determined,
the fair market value per Share shall be deemed to be the average of the high
and low quotations at which such Shares
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are sold on such national securities exchange on the date such Option is
granted. If the Shares are listed on a national securities exchange in the
United States on such date, but the Shares are not traded on such date, or such
national securities exchange is not open for business on such date, the fair
market value per Share shall be determined as of the closest preceding date on
which such exchange shall have been open for business and the Shares were
traded. If the Shares are listed on more than one national securities exchange
in the United States on the date on which the fair market value per Share is to
be determined, the Board of Directors or the Committee, as the case may be,
shall determine which national securities exchange shall be used for the purpose
of determining the fair market value per Share.
For purposes of this Plan, the determination by the Board of Directors or
the Committee, as the case may be, of the fair market value of a Share shall be
conclusive.
Upon the exercise of an Option granted hereunder, the Company shall cause
the purchased Shares to be issued only when it shall have received the full
purchase price for the Shares in cash or by certified check or such other
arrangement for the satisfaction of the full purchase price as the Committee may
determine to the extent permitted by applicable law, including but not limited
to, by delivering to the Company shares of common stock of the Company (in
proper form for transfer and accompanied by all requisite stock transfer tax
stamps or cash in lieu thereof) owned by such holder free and clear of all liens
and encumbrances having a fair market value equal to the exercise price
applicable to that portion of the Option being exercised by the delivery of such
Shares. The fair market value of the stock so delivered shall be determined by
the Committee, in its sole discretion, as of the date immediately preceding the
date on which the Option is exercised, or as may be required in order to comply
with or to conform to the requirements of any applicable laws or regulations.
VI. USE OF PROCEEDS
The cash proceeds of the sale of Shares pursuant to the Plan are to be
added to the general funds of the Company and used for its general corporate
purposes as the Board of Directors shall determine.
VII. TERM OF OPTIONS AND LIMITATIONS ON THE RIGHT OF EXERCISE
Any Option shall be exercisable at such times, in such amounts and during
such period or periods as the Board of Directors or the Committee, as the case
may be, shall determine at the date of the grant of such Option; provided,
however, that an Incentive Option shall not be exercisable after the expiration
of ten (10) years from the date such Option is granted; and provided further
that, in the case of an Incentive Option granted to a person who, at the time
such Option is granted, owns stock of the Company or any subsidiary corporation
or parent corporation of the Company possessing more than ten per cent (10%) of
the total
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combined voting power of all classes of stock of the Company or of any
subsidiary corporation or parent corporation of the Company, such Option shall
not be exercisable after the expiration of five (5) years from the date such
Option is granted.
Except to the extent otherwise provided under the Code, to the extent that
the aggregate fair market value of stock for which Incentive Options are
exercisable for the first time by a Participant during any calendar year (under
all stock option plans of the Company or of any parent corporation or subsidiary
corporation of the Company) exceeds one hundred thousand dollars ($100,000),
such Options shall be treated as Non-Qualified Options. For purposes of this
limitation, (i) the fair market value of stock is determined as of the time the
Option is granted, and (ii) the limitation will be applied by taking into
account Options in the order in which they were granted.
Subject to the provisions of Article XVII, the Board of Directors or the
Committee, as the case may be, shall have the right to accelerate, in whole or
in part, from time to time, conditionally or unconditionally, rights to exercise
any Option granted hereunder.
To the extent that an Option is not exercised within the period of
exercisability specified therein, it shall expire as to the then unexercised
part.
In no event shall an Option granted hereunder be exercised for a fraction
of a Share.
The Committee may at any time on behalf of the Company offer to buy out an
Option previously granted, based on such terms and conditions as the Committee
shall establish and communicate to the Participant at the time that such offer
is made.
VIII. EXERCISE OF OPTIONS
Options granted under the Plan shall be exercised by the optionee as to all
or part of the Shares covered thereby by the giving of written notice of the
exercise thereof to the Corporate Secretary of the Company at the principal
business office of the Company, specifying the number of shares to be purchased
and specifying a business day not more than fifteen (15) days from the date such
notice is given for the payment of the purchase price against delivery of the
Shares being purchased. Subject to the terms of Articles XIII, XV, and XVI, the
Company shall cause certificates for the Shares so purchased to be delivered to
the optionee at the principal business office of the Company, against payment of
the full purchase price, on the date specified in the notice of exercise.
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IX. NON-TRANSFERABILITY OF OPTIONS
No Option granted hereunder shall be transferable, whether by operation of
law or otherwise, and any Option granted hereunder shall be exercisable, during
the lifetime of the holder, only by such holder.
X. TERMINATION OF EMPLOYMENT
Upon termination of the employment of any Participant with the Company and
all subsidiary corporations and parent corporations of the Company, an Option
previously granted to the Participant, unless otherwise specified by the Board
of Directors or the Committee, as the case may be, shall, to the extent not
theretofore exercised, terminate and become null and void, provided that:
(a) if the Participant shall die while in the employ of such corporation
or during either the three (3) month or one (1) year period, whichever
is applicable, specified in clause (b) below and at a time when such
Participant was entitled to exercise an Option as herein provided, the
legal representative of such Participant, or such person who acquired
such Option by bequest or inheritance or by reason of the death of the
Participant, may, not later than one (1) year from the date of death,
but in no event later than the expiration of the stated term of such
Option, exercise such Option, to the extent not theretofore exercised,
in respect of any or all of such number of Shares as specified by the
Board of Directors or the Committee, as the case may be, in such
Option; and
(b) if the employment of any Participant to whom such Option shall have
been granted shall terminate by reason of the Participant's retirement
(at such age or upon such conditions as shall be specified by the
Board of Directors), disability (as defined in Section 22(e)(3) of the
Code) or dismissal by the employer other than for "cause" (as defined
below), and while such Participant is entitled to exercise such Option
as herein provided, such Participant shall have the right to exercise
such Option so granted, to the extent not theretofore exercised, in
respect of any or all of such number of Shares as specified by the
Board of Directors or the Committee, as the case may be, in such
Option, at any time up to and including (i) three (3) months after the
date of such termination of employment in the case of termination by
reason of retirement or dismissal other than for cause, and (ii) one
(1) year after the date of termination of employment in the case of
termination by reason of retirement or disability. Notwithstanding
anything to the foregoing to the contrary contained herein, upon the
termination without cause of any
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Participant who has been granted Non-Qualified Options pursuant to the
Plan, the Board of Directors or the Committee, as the case may be,
shall have the right, in their sole discretion (only with respect to
Non-Qualified Options granted pursuant to the Plan), to either (i)
accelerate the time period during which a Participant may exercise all
or a part of any such Option previously granted and/or (ii) extend the
time period in which such Participant may exercise such Option, to a
period of up to one (1) year after the date of such Participant's
termination without cause.
In no event, however, shall any person be entitled to exercise any Option
after the expiration of the period of exercisability of such Option as specified
therein.
If the Participant voluntarily terminates his or her employment, other than
by reason of his/her retirement, or is discharged for cause, any Option granted
hereunder shall, unless otherwise specified by the Board of Directors or the
Committee, as the case may be, forthwith terminate with respect to any
unexercised portion thereof.
If an Option granted hereunder shall be exercised by the legal
representative of a deceased or disabled Participant or former Participant, or
by a person who acquired an Option granted hereunder by bequest or inheritance
or by reason of death of any Participant or former Participant, written notice
of such exercise shall be accompanied by a certified copy of letters
testamentary or equivalent proof of the right of such legal representative or
other person to exercise such Option.
For the purposes of the Plan, the term "for cause" shall mean (i) with
respect to a Participant who is party to a written agreement with, or,
alternatively, participates in a compensation or benefit plan of the Company or
a subsidiary corporation or parent corporation of the Company, which agreement
or plan contains a definition of "for cause" or "cause" (or words of like
import) for purposes of termination of employment thereunder by the Company or
such subsidiary corporation or parent corporation of the Company, "for cause" or
"cause" as defined in the most recent of such agreements or plans, or (ii) in
all other cases, as determined by the Board of Directors or the Committee, as
the case may be, in its sole discretion, (a) the willful commission by a
Participant of a criminal or other act that causes or probably will cause
substantial economic damage to the Company or a subsidiary corporation or parent
corporation of the Company or substantial injury to the business reputation of
the Company or a subsidiary corporation or parent corporation of the Company;
(b) the commission by a Participant of an act of fraud in the performance of
such Participant's duties on behalf of the Company or a subsidiary corporation
or parent corporation of the Company; or (c) the continuing willful failure of a
Participant to perform the duties of such Participant to the Company or a
subsidiary corporation or parent corporation of the Company (other than such
failure resulting from the Participant's incapacity due to physical or mental
illness) after written notice thereof (specifying the particulars thereof in
reasonable detail) and a reasonable opportunity to be heard and cure such
failure are given to the Participant by the Board of Directors. For purposes of
the Plan, no act, or failure to act, on the Participant's part shall be
considered "willful" unless done or omitted to be done by the Participant not in
good faith and
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without reasonable belief that the Participant's action or omission was in the
best interest of the Company or a subsidiary corporation or parent corporation
of the Company.
For the purposes of the Plan, an employment relationship shall be deemed to
exist between an individual and a corporation if, at the time of the
determination, the individual was an "employee" of such corporation for purposes
of Section 422(a) of the Code. If an individual is on military, sick leave or
other bona fide leave of absence, such individual shall be considered an
"employee" for purposes of the exercise of an Option and shall be entitled to
exercise such Option during such leave if the period of such leave does not
exceed ninety (90) days, or, if longer, so long as the individual's right to
reemployment with the corporation granting the option (or a related corporation)
is guaranteed either by statute or by contract. If the period of leave exceeds
ninety (90) days, the employment relationship shall be deemed to have terminated
on the ninety-first (91st) day of such leave, unless the individual's right to
reemployment is guaranteed by statute or contract.
A termination of employment shall not be deemed to occur by reason of (i)
the transfer of a Participant from employment by the Company to employment by a
subsidiary corporation or a parent corporation of the Company, or (ii) the
transfer of a Participant from employment by a subsidiary corporation or a
parent corporation of the Company to employment by the Company or by another
subsidiary corporation or parent corporation of the Company.
In the event of the complete liquidation or dissolution of a subsidiary
corporation, or in the event that such corporation ceases to be a subsidiary
corporation, any unexercised Options theretofore granted to any person employed
by such subsidiary corporation will be deemed cancelled unless such person is
employed by the Company or by any parent corporation or another subsidiary
corporation after the occurrence of such event. In the event an Option is to be
cancelled pursuant to the provisions of the previous sentence, notice of such
cancellation will be given to each Participant holding unexercised Options and
such holder will have the right to exercise such Options in full (without regard
to any limitation set forth or imposed pursuant to Article VII) during the
thirty (30) day period following notice of such cancellation.
XI. ADJUSTMENT OF SHARES; EFFECT OF CERTAIN TRANSACTIONS
In the event of any change in the outstanding Shares through merger,
consolidation, reorganization, recapitalization, stock dividend, stock split,
split-up, split-off, spin-off, combination of shares, exchange of shares, or
other like change in capital structure of the Company, the Board of Directors or
the Committee, as the case may be, shall make such adjustment to each
outstanding Option that it, in its sole discretion, deems appropriate. The term
"Shares" after any such change shall refer to the securities, cash and/or
property then receivable upon exercise of an Option. In addition, in the event
of any such change, the Board of Directors or the Committee, as the case may be,
shall make any further adjustment as may be appropriate to the maximum number of
Shares which may be acquired under the Plan pursuant to the exercise of Options,
the maximum number of Shares which may be so acquired
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by one Participant and the number of Shares and price per Share subject to
outstanding Options as shall be equitable to prevent dilution or enlargement of
rights under such Options, and the determination of the Board of Directors as to
these matters shall be conclusive. Notwithstanding the foregoing, (i) each such
adjustment with respect to an Incentive Option shall comply with the rules of
Section 424(a) of the Code, and (ii) in no event shall any adjustment be made
which would render any Incentive Option granted hereunder to be other than an
"incentive stock option" for purposes of Section 422 of the Code.
XII. RIGHT TO TERMINATE EMPLOYMENT
The Plan shall not impose any obligation on the Company or on any
subsidiary corporation or parent corporation thereof to continue the employment
of any holder of Options and it shall not impose any obligation on the part of
any holder of Options to remain in the employ of the Company or of any
subsidiary corporation or parent corporation thereof.
XIII. PURCHASE FOR INVESTMENT
Except as hereinafter provided, the Board of Directors or the Committee, as
the case may be, may require a Participant, as a condition upon exercise of any
Option granted hereunder, to execute and deliver to the Company (a) stock powers
with respect to Shares underlying a particular Option and required to be held by
a custodian, and (b) a written statement, in form satisfactory to the Board of
Directors or the Committee, as the case may be, in which the Participant
represents and warrants that Shares are being acquired for such person's own
account for investment only and not with a view to the resale or distribution
thereof. The Participant shall, at the request of the Board of Directors or the
Committee, as the case may be, be required to represent and warrant in writing
that any subsequent resale or distribution of Shares by the Participant shall be
made only pursuant to either (i) a Registration Statement on an appropriate form
under the Securities Act of 1933, as amended (the "Securities Act"), which
Registration Statement has become effective and is current with regard to the
Shares being sold, or (ii) a specific exemption from the registration
requirements of the Securities Act, but in claiming such exemption the
Participant shall, prior to any offer of sale or sale of such Shares, obtain a
prior favorable written opinion of counsel, in form and substance satisfactory
to counsel for the Company, as to the application of such exemption thereto. The
foregoing restriction shall not apply to (i) issuances by the Company so long as
the Shares being issued are registered under the Securities Act and a prospectus
in respect thereof is current, or (ii) re-offerings of Shares by affiliates of
the Company (as defined in Rule 405 or any successor rule or regulation
promulgated under the Securities Act) if the Shares being re-offered are
registered under the Securities Act and a prospectus in respect thereof is
current.
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XIV. ISSUE OF CERTIFICATES, LEGENDS, PAYMENT OF EXPENSES
Upon any exercise of an Option which may be granted hereunder and, in the
case of an Option, payment of the purchase price, a certificate or certificates
for the Shares shall be issued by the Company in the name of the person
exercising the Option and shall be delivered to or upon the order of such
person.
The Company may endorse such legend or legends upon the certificates for
Shares issued pursuant to the Plan and may issue such "stop transfer"
instructions to its transfer agent in respect of such Shares as, in its
discretion, it determines to be necessary or appropriate to (i) prevent a
violation of, or to perfect an exemption from, the registration requirements of
the Securities Act, (ii) implement the provisions of the Plan and any agreement
between the Company and the optionee or grantee with respect to such Shares, or
(iii) permit the Company to determine the occurrence of a disqualifying
disposition, as described in Section 421(b) of the Code, of Shares transferred
upon exercise of an Incentive Option granted under the Plan.
The Company shall pay all issue or transfer taxes with respect to the
issuance or transfer of Shares, as well as all fees and expenses necessarily
incurred by the Company in connection with such issuance or transfer, except
fees and expenses which may be necessitated by the filing or amending of a
Registration Statement under the Securities Act, which fees and expenses shall
be borne by the recipient of the Shares, unless such Registration Statement
under the Securities Act has been filed by the Company for its own corporate
purposes (and the Company so states) in which event the recipient of the Shares
shall bear only such fees and expenses as are attributable solely to the
inclusion of the Shares he or she receives in the Registration Statement.
All Shares issued as provided herein shall be fully paid and non-assessable
to the extent permitted by law.
XV. WITHHOLDING TAXES
The Company may require a Participant, if applicable, exercising a
Non-Qualified Option granted hereunder, or disposing of Shares acquired pursuant
to the exercise of an Incentive Option in a disqualifying disposition (within
the meaning of Section 421(b) of the Code), to reimburse the corporation that
employs such Participant for any taxes required by any government to be withheld
or otherwise deducted and paid by such corporation in respect of the issuance or
disposition of such Shares. In lieu thereof, the corporation that employs such
Participant shall have the right to withhold the amount of such taxes from any
other sums due or to become due from such corporation to the Participant upon
such terms and conditions as the Board of Directors shall prescribe. The
corporation that employs such Participant may, in its discretion, hold the stock
certificate to which such Participant is entitled upon the exercise of an Option
as security for the payment of such withholding tax liability, until cash
sufficient
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to pay that liability has been accumulated. In addition, at any time that the
Company becomes subject to a withholding obligation under applicable law with
respect to the exercise of a Non-Qualified Option (the "Tax Date"), except as
set forth below, a holder of a Non-Qualified Option may elect to satisfy, in
whole or in part, the holder's related personal tax liabilities (an "Election")
by (i) directing the Company to withhold from Shares issuable in the related
exercises either a specified number of Shares or Shares having a specified value
(in each case not in excess of the related personal tax liabilities), (ii)
tendering Shares previously issued pursuant to the exercise of an Option or
other Shares of the Company's common stock owned by the holder, or (iii)
combining any or all of the foregoing options in any fashion. An Election shall
be irrevocable. The withheld Shares and other Shares tendered in payment shall
be valued at their fair market value (determined in accordance with the
principles set forth in Article V of the Plan) on the Tax Date. The Board of
Directors or the Committee, as the case may be, may disapprove of any Election,
suspend or terminate the right to make Elections or provide that the right to
make Elections shall not apply to particular Shares or exercises. The Board of
Directors or the Committee, as the case may be, may impose any additional
conditions or restrictions on the right to make an Election as it shall deem
appropriate.
XVI. LISTING OF SHARES AND RELATED MATTERS
The Board of Directors or the Committee, as the case may be, may delay any
award, issuance or delivery of Shares if it determines that listing,
registration or qualification of Shares or the consent or approval of any
governmental regulatory body is necessary or desirable as a condition of, or in
connection with, the sale or purchase of Shares under the Plan, until such
listing, registration, qualification, consent or approval shall have been
effected or obtained, or otherwise provided for, free of any conditions not
acceptable to the Board of Directors or the Committee, as the case may be.
XVII. AMENDMENT OF THE PLAN
The Board of Directors or the Committee, as the case may be, may, from time
to time, amend the Plan, provided that no amendment shall be made, without the
approval of the stockholders of the Company, to the extent required by Rule
16b-3 or for the exception for performance-based compensation under Section
162(m) of the Code, that will (i) increase the total number of Shares reserved
for Options under the Plan (other than an increase resulting from an adjustment
provided for in Article XI), (ii) reduce the exercise price of any Option
granted hereunder, (iii) modify the provisions of the Plan relating to
eligibility, or (iv) materially increase the benefits accruing to Participants
under the Plan or extend the maximum option period under Section VII. The Board
of Directors or the Committee, as the case may be, shall be authorized to amend
the Plan and the Options granted thereunder to permit the Incentive Options
granted thereunder to qualify as incentive stock options within the meaning of
Section 422 of the Code. The rights and obligations under any Option granted
before amendment of the
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Plan or any unexercised portion of such Option shall not be adversely affected
by amendment of the Plan or Option without the consent of the holder of such
Option.
XVIII. TERMINATION OR SUSPENSION OF THE PLAN
The Board of Directors or the Committee, as the case may be, may at any
time suspend or terminate the Plan. The Plan, unless sooner terminated under
Article XXI or by action of the Board of Directors, shall terminate at the close
of business on the Termination Date. Options may not be granted while the Plan
is suspended or after it is terminated. Rights and obligations under any Option
granted while the Plan is in effect shall not be altered or impaired by
suspension or termination of the Plan, except upon the consent of the person to
whom the Option was granted. The power of the Board of Directors to construe and
administer any Options granted prior to the termination or suspension of the
Plan under Article III nevertheless shall continue after such termination or
during such suspension.
XIX. GOVERNING LAW
The Plan and such Options as may be granted thereunder and all related
matters shall be governed by, and construed and enforced in accordance with, the
laws of the State of Florida from time to time obtaining or such other
jurisdiction as the Company may become reincorporated under.
XX. PARTIAL INVALIDITY
The invalidity or illegibility of any provision hereof shall not be deemed
to affect the validity of any other provision.
XXI. EFFECTIVE DATE
The Plan shall become effective upon its approval by the Shareholders of
the Company.
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APPENDIX E
AMERICAN BODY ARMOR & EQUIPMENT, INC.
1996 NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN
The 1996 Non-Employee Directors Stock Option Plan (the "Plan") is
established to attract, retain and compensate for service as members of the
Board of Directors of American Body Armor & Equipment, Inc. (the "Company")
highly qualified individuals who are not current or former employees of the
Company and to enable them to increase their ownership in the Company's Common
Stock. The Plan will be beneficial to the Company and its shareholders since it
will allow these directors to have a greater personal financial stake in the
Company through the ownership of Company stock, in addition to underscoring
their common interest with shareholders in increasing the value of the Company
stock longer term.
1. Eligibility
All members of the Company's Board of Directors who are not current or
former employees of the Company or any of its subsidiaries ("Non-Employee
Directors") are eligible to participate in the Plan.
2. Options
Only nonqualified stock options ("NQSOs") may be granted under the Plan.
Grants shall be evidenced by Option Agreements in form promulgated by the Board
of Directors from time to time.
3. Shares Available
a) Number of Shares Available: There is hereby reserved for issuance under
the Plan 300,000 shares of Company Common Stock, par value $.01 per share, which
may be authorized but unissued shares, treasury shares, or shares purchased on
the open market.
b) Recapitalization Adjustment: In the event of a reorganization,
recapitalization, stock split, stock dividend, combination of shares, merger,
consolidation, rights offering, or any other change in the corporate structure
or shares of the Company, adjustments in the number and kind of shares
authorized by the Plan, in the number and kind of shares covered by, and in the
option price of outstanding NQSOs under the Plan shall be made if, and in the
same manner as, such adjustments are made to NQSOs issued under the Company's
1996 Stock Option Plan.
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4. Annual Grant of Nonqualified Stock Options
Upon each Non-Employee Director's initial election or appointment to the
Board of Directors, such Non-Employee Director shall automatically receive NQSOs
covering 75,000 shares of the Company's Common Stock. Notwithstanding the
foregoing, if, on that day, counsel for the Company determines, in her/his sole
discretion, that the Company is in possession of material, undisclosed
information about the Company, then the grant of NQSOs to Non-Employee Directors
shall be suspended until the second day after public dissemination of such
information and the price, exercisability date and option period shall then be
determined by reference to such later date. If Company Common Stock is not
traded on the American Stock Exchange or on such exchange as such stock may then
be trading on any date a grant would otherwise be awarded, then the grant shall
be made the next day thereafter that Company Common Stock is so traded.
5. Option Price
The price of all 75,000 NQSOs granted to each Non-Employee Director under
the Plan shall be the closing price on the date of the grant of the Company's
Common Stock as quoted on the composite tape of the American Stock Exchange or
of such exchange upon which the Company's Common Stock may then currently be
trading.
6. Option Period
Except as otherwise provided herein, of the 75,000 NQSOs granted to each
Non-Employee Director under the Plan, NQSOs covering 25,000 shares shall become
exercisable upon each of the first three anniversary dates following the date of
the grant and all 75,000 NQSOs granted to each Non-Employee Director shall
expire ten years after the date of the grant ("Option Period").
7. Payment
The NQSO price shall be paid in cash in U.S. dollars at the time the NQSO
is exercised.
8. Cessation of Service
Upon cessation of service as a Non-Employee Director (for reasons other
than retirement, death, disability or "cause"), only those NQSOs immediately
exercisable at the date of cessation of service shall be exercisable by the
grantee. Such NQSOs must be exercised within ninety days of cessation of service
(but in no event after the expiration of the Option Period) or they shall be
forfeited.
(a) Retirement
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If a grantee ceases service as a Non-Employee Director and is at least age
65 with ten or more years of service or age 70 with five or more years of
service, then any of his/her outstanding NQSOs shall continue to become
exercisable. All outstanding NQSOs must be exercised by the earlier of (i)
thirty-six (36) months following the date of such cessation of service or (ii)
the expiration of the Option Period, or such NQSOs shall be forfeited.
(b) Disability
If a grantee ceases service as a Non-Employee Director on account of
disability, then those of his/her NQSOs which had been held for at least twelve
(12) months on the date of cessation of service shall become immediately
exercisable. All NQSOs which became exercisable upon cessation of service
following disability and those NQSOs which were exercisable on the date of such
termination of employment following disability must be exercised by the earlier
of (i) six (6) months following the date of such cessation of service or (ii)
the expiration of the Option Period, or such NQSOs shall be forfeited.
"Disability" shall mean total and permanent disability as defined in
Section 22(e)(3) of the Internal Revenue Code of 1986, as amended.
(c) Death
Upon the death of a grantee, those NQSOs which had been held for at least
twelve months at date of death shall become immediately exercisable upon death.
The NQSOs which become exercisable upon the date of death and those NQSOs which
were exercisable on the date of death may be exercised by the grantee's legal
representatives or heirs by the earlier of (i) thirty-six (36) months from the
date of death or (ii) the expiration of the Option Period; if not exercised by
the earlier of (i) or (ii), such NQSOs shall be forfeited.
(d) Cause
Upon removal of a Non-Employee Director, failure to stand for reelection or
failure to be renominated for "cause," or if the Company obtains or discovers
information after termination of service of a Non-Employee Director that would
have justified his/her removal for cause during such directorship, all
outstanding Options granted to such Non-Employee Director pursuant to this Plan
shall, upon giving written notice thereof by the Company, shall immediately
terminate and shall be null and void.
"Cause" shall mean an act or a failure to act that constitutes "cause" for
removal of a director under applicable Delaware law.
9. Administration and Amendment of the Plan
The Plan shall be administered by the Option Committee of the Board of
Directors of the Company. The Plan may be terminated or amended by the Board of
Directors as it deems
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advisable. However, an amendment revising the price, date of exercisability,
option period of, or amount of shares under a NQSO shall not be made more
frequently than every six (6) months unless necessary to comply with applicable
laws or regulations. No amendment may revoke or alter in a manner unfavorable to
the grantees any NQSOs then outstanding, nor may the Board of Directors amend
the Plan without shareholder approval where the absence of such approval would
cause the Plan to fail to comply with Rule 16b-3 under the Securities Exchange
Act of 1934 (the "Act"), or any other requirement of applicable law or
regulation. A NQSO may not be granted under the Plan after December 31, 2006 but
NQSOs granted prior to that date shall continue to become exercisable and may be
exercised according to their terms.
10. Non-transferability
No NQSO granted under the Plan is transferable other than by will or the
laws of descent and distribution. During the grantee's lifetime, a NQSO may only
be exercised by the grantee or the grantee's guardian or legal representative.
11. Compliance with SEC Regulations
It is the Company's intent that the Plan comply in all respects with Rule
16b-3 of the Act, and any regulations promulgated thereunder. If any provision
of the Plan is later found not to be in compliance with the Rule, the provision
shall be deemed null and void. All grants and exercises of NQSOs under the Plan
shall be executed in accordance with the requirements of Section 16 of the Act,
as amended, and any regulations promulgated thereunder.
12. Disinterested Person Status
Notwithstanding anything contained herein to the contrary, neither the
Board of Directors nor any person designated to assist the Board of Directors in
the administration of the Plan may take any action which would cause any
Non-Employee Director of the Company to cease to be a "disinterested person" for
purposes of Rule 16b-3 with regard to this Plan or any other stock option or
other equity plan of the Company. In particular, to the extent required as
aforesaid, the Board of Directors shall not have any discretion as to:
(i) the selection of Non-Employee Directors who are eligible to
receive awards of Stock Options;
(ii) the number of Stock Options awarded to any Non-Employee Director.
13. Restrictions on Delivery and Sale of Shares
Each award granted under the Plan is subject to the condition that if at
anytime the Option Committee, in its discretion, shall determine that the
listing, registration or qualification of the stock covered by such award upon
any securities exchange or under any state
E-4
<PAGE>
or federal law is necessary or desirable as a condition of or in connection with
the granting of such award or the purchase or delivery of stock thereunder, the
delivery of any or all shares pursuant to such award may be withheld unless and
until such listing, registration or qualification shall have been effected. If a
registration statement is not in effect under the Securities Act of 1933 or any
applicable state securities laws with respect to the shares of stock purchasable
or otherwise deliverable under awards then outstanding, the Option Committee may
require, as a condition of any delivery of stock pursuant to the award a written
representation, from the recipient, that such shares are being acquired for
investment and not with a view to distribution and agreeing that the stock will
not be disposed of except pursuant to an effective registration statement,
unless the Company shall have received an opinion of counsel that such
disposition is exempt from such requirement under the Securities Act of 1933 and
any applicable state securities laws. The Company may endorse on certificates
representing shares delivered pursuant to an award such legends referring to the
foregoing representations or restrictions or any applicable restrictions
applicable on resale as the Company, in its discretion, shall deem appropriate.
14. Miscellaneous
Except as provided in the Plan, no Non-Employee Director shall have any
claim or right to be granted a NQSO under the Plan. Neither the Plan nor any
action thereunder shall be construed as giving any director any right to be
retained in the service of the Company.
15. Effective Date
The Plan shall be effective on such date as shareholder approval is
obtained.
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<PAGE>
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF
AMERICAN BODY ARMOR & EQUIPMENT, INC.
----------------------------------------------------
ANNUAL MEETING
JULY 16, 1996
The undersigned hereby appoints Jonathan M. Spiller and Warren B. Kanders as
proxies to represent the undersigned, with full power of substitution, at the
Annual Meeting of Shareholders of American Body Armor & Equipment, Inc., to be
held on July 16, 1996 at 10:00 A.M., New York City time, at The Metropolitan
Club, 1 East 60th Street, New York, New York 10022, and at any adjournments and
postponements thereof:
<PAGE>
/x/ Please mark your votes as in this example.
1. Election of FOR
Directors. ALL NOMINEES WITHHOLD
LISTED BELOW AUTHORITY
(EXCEPT AS TO VOTE FOR
MARKED TO THE ALL NOMINEES
CONTRARY BELOW) LISTED BELOW
/ / / /
NOMINEES: Warren B. Kanders, Jonathan M. Spiller, Burtt R. Ehrlich, Nicholas
Sokolow, Thomas W. Strauss, Richard C. Bartlett
For, except vote withheld for the following nominee(s):
_______________________________________________________________
WITHHOLD
AUTHORITY
FOR AGAINST TO VOTE
2. To consider and vote upon a proposal to change
the name of the Company to 'Armor Holdings, Inc.' / / / / / /
3. To consider and act upon a proposal to
reincorporate the Company under the laws of the / / / / / /
State of Delaware by means of a merger of the
Company into a newly formed wholly-owned
subsidiary incorporated in the State of Delaware
(the 'Reincorporation').
4. To consider and vote upon a proposal to increase
the number of shares of Common Stock which the / / / / / /
Company shall have the authority to issue to
50,000,000.
5. To consider and vote upon a proposal to authorize
a series of preferred stock with such rights, / / / / / /
privileges and preferences as the Board of
Directors shall from time to time determine.
6. To consider and vote upon a proposal to adopt the
Company's 1996 Stock Option Plan (the '1996 / / / / / /
Plan').
7. To consider and vote upon a proposal to adopt the
Company's 1996 Non-Employee Directors Stock / / / / / /
Option Plan (the '1996 Directors Plan').
8. To consider and vote upon a resolution ratifying
the selection of Deloitte & Touche LLP as the / / / / / /
Company's independent certified public
accountants for the fiscal year ending December
31, 1996.
THIS BALLOT, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. UNLESS OTHERWISE SPECIFIED, THE SHARES WILL BE
VOTED 'FOR' EACH PROPOSAL.
IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS
THAT MAY PROPERLY COME BEFORE THE MEETING.
Dated: ______________________ _______________________________________________
Signature of Shareholder(s)
NOTE: Signature should agree with name on stock certificate as printed thereon.
Executors, administrators, trustees and other fiduciaries should so
indicate when signing.
PLEASE DATE, SIGN AND RETURN THIS PROXY. THANK YOU.
