SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14 (a) of the Securities
and Exchange Act Of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6 (e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11 (c) or Rule 14a-12
REINHOLD INDUSTRIES, INC.
------------------------------------------------
(Name of Registrant as Specified in its Charter)
Inapplicable
-----------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rule 14a-6 (i)(1)and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11 (a) (2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
REINHOLD INDUSTRIES, INC.
12827 E. Imperial Highway
Santa Fe Springs, CA 90670
September [ ], 1999
DEAR STOCKHOLDERS:
The Directors and Officers of Reinhold Industries, Inc., cordially invite you to
attend a Special Meeting of Stockholders of the Corporation to be held on
Wednesday, October 20, 1999 at 10:00 a.m., Pacific Time. The meeting will be
held at the offices of the Corporation at 12827 E. Imperial Highway, Santa Fe
Springs, California 90670 for the following purposes:
1. To consider and act upon a proposal to amend the Company's Amended and
Restated Certificate of Incorporation to increase the number of authorized
shares of capital stock of the Corporation from 2,500,000 shares to 50,000,000
shares by (a) increasing the number of authorized shares of Class A New Common
Stock, par value $.01 per share (the "Class A Common Stock" or "Common Stock")
from 2,500,000 shares to 45,000,000 shares, and (b) authorizing a class of
preferred stock, consisting of 5,000,000 authorized shares (the "Preferred
Stock"), for which the Board of Directors will have authority to establish the
rights and preferences of any series prior to the issuance of any such series
and to issue such Preferred Stock in one or more series, without further
approval of stockholders of the Company, and to make such other changes as
described more fully in the accompanying Proxy Statement;
2. To consider and act upon a proposal to amend the Company's Amended and
Restated By-laws to increase the size of the Board of Directors to between three
and ten directors, with the exact number to be determined from time to time by
vote of a majority of the Board of Directors, and to make other changes as
described more fully in the accompanying Proxy Statement;
3. To consider and act upon a proposal to approve and ratify the Company's
Management Agreement with Hammond, Kennedy, Whitney & Company, Inc., a private
equity firm.
4. To transact such other business as may properly be brought before the
meeting or any adjournment thereof.
Only shareholders of record at the close of business on September 1, 1999
will be entitled to notice of and to vote at the meeting.
Reinhold Industries, Inc.
/s/ BRETT R. MEINSEN
BRETT R. MEINSEN
Secretary
Your Proxy Statement and Form of Proxy are enclosed. You are urged to mark,
sign, date and mail the enclosed proxy immediately. By mailing your proxy now
you will not be precluded from attending the meeting. Your proxy is revocable.
In the event you find it convenient to attend the meeting, you may, if you wish,
withdraw your proxy and vote in person.
<PAGE>
REINHOLD INDUSTRIES, INC.
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
Santa Fe Springs, California
September [ ], 1999
To the Stockholders:
NOTICE IS HEREBY GIVEN that the Special Meeting of Stockholders of Reinhold
Industries, Inc., a Delaware corporation ("Reinhold" or the "Company"), will be
held at the offices of Reinhold Industries, Inc. 12827 East Imperial Highway,
Santa Fe Springs, California on October 20, 1999 at 10:00 a.m., local time, for
the following purposes:
1. To consider and act upon a proposal to amend the Company's Amended and
Restated Certificate of Incorporation to increase the number of authorized
shares of capital stock of the Corporation from 2,500,000 shares to 50,000,000
shares by (a) increasing the number of authorized shares of Class A New Common
Stock, par value $.01 per share (the "Class A Common Stock" or "Common Stock")
from 2,500,000 shares to 45,000,000 shares, and (b) authorizing a class of
preferred stock, consisting of 5,000,000 authorized shares (the "Preferred
Stock"), for which the Board of Directors will have authority to establish the
rights and preferences of any series prior to the issuance of any such series
and to issue such Preferred Stock in one or more series, without further
approval of stockholders of the Company, and to make such other changes as
described more fully in the accompanying Proxy Statement;
2. To consider and act upon a proposal to amend the Company's Amended and
Restated By-laws to increase the size of the Board of Directors to between three
and ten directors, with the exact number to be determined from time to time by
vote of a majority of the Board of Directors, and to make other changes as
described more fully in the accompanying Proxy Statement;
3. To consider and act upon a proposal to approve and ratify the Company's
Management Agreement with Hammond, Kennedy, Whitney & Company, Inc., a private
equity firm. and
4. To transact such other business as may properly be brought before the
meeting or any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice. Only stockholders of record at the close of
business on September 1, 1999 are entitled to notice of and to vote at the
meeting.
All stockholders are cordially invited to attend the meeting in person.
However, to assure your representation at the meeting, you are urged to sign and
return the enclosed proxy as promptly as possible in the postage-prepaid
envelope enclosed for that purpose. Any stockholder attending the meeting may
vote in person even if he or she has returned a proxy.
By order of the Board of Directors,
/s/ BRETT R. MEINSEN
BRETT R. MEINSEN
Secretary
THE BOARD OF DIRECTORS SOLICITS THE EXECUTION AND IMMEDIATE RETURN OF THE
ACCOMPANYING PROXY. PLEASE DATE, SIGN AND RETURN THE PROXY IN THE ENCLOSED
ADDRESSED ENVELOPE.
<PAGE>
REINHOLD INDUSTRIES, INC.
12827 EAST IMPERIAL HIGHWAY
SANTA FE SPRINGS, CALIFORNIA 90670
PROXY STATEMENT
Introduction
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Reinhold Industries, Inc. ("Reinhold" or
the "Company") for use at the Special Meeting of Stockholders to be held on
October 20, 1999 and any adjournments or postponements thereof (the "Special
Meeting"). The Special Meeting will be held at the Company's executive offices
located at 12827 East Imperial Highway, Santa Fe Springs, California, at 10:00
a.m. The Notice of Special Meeting, this proxy statement and the accompanying
proxy are being mailed to you on or about September ___, 1999.
At the Special Meeting shareholders will be asked to consider and vote upon
proposals (i) to amend the Company's Amended and Restated Certificate of
Incorporation (the "Certificate of Incorporation"); (ii) amend the Company's
Amended and Restated By-laws (the "By-laws"); and (iii) ratify a management
agreement (the "Management Agreement"), dated June 3, 1999, between the Company
and Hammond, Kennedy, Whitney & Company, Inc., a New York corporation ("HKW" or
"Hammond, Kennedy, Whitney & Company").
The proposed amendment to the Certificate of Incorporation increases the
number of authorized shares of capital stock of the Corporation from 2,500,000
shares to 50,000,000 shares (a) by increasing the number of authorized shares of
Class A New Common Stock, par value $.01 per share (the "Class A Common Stock"
or "Common Stock") from 2,500,000 shares to 45,000,000 shares, and (b) by
authorizing a class of preferred stock, consisting of 5,000,000 authorized
shares (the "Preferred Stock"). The Board of Directors will have authority to
establish the rights and preferences of any series of Preferred Stock prior to
the issuance of any such series and to issue Preferred Stock in one or more
series, without further approval of stockholders of the Company.
The proposed amendment to the By-laws increases the size of the Board
of Directors by authorizing a Board of Directors of between three and ten
directors, with the exact number to be determined from time to time by vote of a
majority of the Board of Directors. The proposed amendment also eliminates from
the Certificate of Incorporation and By-laws references to the Company's former
Class B New Common Stock, par value $.01 per share (the "Class B Common Stock")
and makes other changes as described below.
The Management Agreement engages HKW to advise, consult and represent
Reinhold and its subsidiaries on strategic direction, merger and acquisition
activities and general investment banking matters. In exchange for these
services, Reinhold shall pay to HKW a fee equal to Twenty Thousand Dollars
($20,0000) per month during the term of the Management Agreement. Messrs. Ralph
R. Whitney, Jr. and Andrew McNally, IV, who serve as managing directors of HKW,
are directors of Reinhold.
Voting and Revocability of Proxies
The shares of Class A Common Stock are the only class of voting
securities of Reinhold outstanding. Each share of Class A Common Stock is
entitled to one vote per share on all matters submitted to a vote of the
shareholders. Only shareholders of record on September 1, 1999 will be entitled
to vote at the meeting. The outstanding voting securities of the Company as of
September 1, 1999 consisted of 1,998,956 shares of Class A Common Stock.
Proxies properly executed, duly returned and not revoked will be voted
at the Special Meeting in accordance with the specifications therein. If a
stockholder does not specify on the proxy card how the shares are to be voted,
they will be voted (i) FOR the proposal to amend the Company's Certificate of
Incorporation; (ii) FOR the proposal to amend the Company's By-laws; (iii) FOR
the proposal to ratify the Management Agreement; and (iv) at the discretion of
the proxy holders, either FOR or AGAINST any other matter or business that may
properly come before the meeting. The Board of Directors is not aware of any
such other matter of business.
A stockholder giving a proxy has the power to revoke it at any time
prior to the Special Meeting. If a proxy in the accompanying form is executed
<PAGE>
and returned, it may nevertheless be revoked at any time prior to the exercise
thereof by (i) filing with the Secretary of the Company, at or before the vote
at the Special Meeting, a written notice of revocation bearing a later date than
the proxy; (ii) duly executing a later dated proxy relating to the same shares
and delivering it to the Secretary of the Company before the vote at the Special
Meeting; or (iii) attending the Special Meeting and voting in person (although
attendance at the Special Meeting will not in and of itself constitute a
revocation of a proxy). Any written notice of revocation or subsequent proxy
must be sent so as to be delivered to Reinhold Industries, Inc., 12827 East
Imperial Highway, Santa Fe Springs, California 90670, Attention: Secretary, or
hand-delivered to the Secretary of the Company, in each case at or before the
taking of the vote at the Special Meeting.
At the Special Meeting the holders of shares having a majority of the
voting power of the capital stock of the Company issued and outstanding and
entitled to vote must be present or represented by proxy to constitute a quorum.
Holders of the Common Stock shall each have one vote per share. The Company
intends to include abstentions and broker non-votes as present or represented
for purposes of establishing a quorum for the transaction of business, but to
exclude broker non-votes from the calculation of shares entitled to vote with
respect to any proposal for which authorization to vote was withheld. Proxies
that reflect abstentions will be treated as voted for purposes of determining
the approval of the proposal and will have the same effect as a vote against the
proposal.
BACKGROUND
Reinhold adopted its current Certificate of Incorporation and By-laws
as part of the July 31,1996 reorganization of Keene Corporation under Chapter 11
of the United States Bankruptcy Code. At the time of the reorganization, Keene
Corporation's business operations were conducted primarily through Reinhold,
then a subsidiary of Keene Corporation. Pursuant to the reorganization, Reinhold
merged into Keene Corporation and adopted the current Certificate of
Incorporation. That Certificate of Incorporation authorizes the issuance of
2,500,000 shares of capital stock, consisting of 1,480,000 shares of Class A
Common Stock and 1,020,000 shares of Class B Common Stock. On the effective date
of the reorganization, Reinhold issued all 1,020,000 shares of Class B Common
Stock to the Keene Creditors Trust (the "Trust"), which was established to
administer asbestos claims against Keene Corporation, and issued 978,956 shares
of Class A Common Stock to Keene Corporation's former stockholders. All of Keene
Corporation's previously outstanding Common Stock was canceled in the
reorganization.
The Certificate of Incorporation adopted pursuant to the reorganization
contains certain restrictions on the transfer of the Class A Common Stock and
Class B Common Stock for a period of twenty-five months after the effective date
of the reorganization, which period has now expired. The Certificate of
Incorporation also provides for the automatic conversion of Class B Common Stock
into Class A Common Stock upon the occurrence of certain events, including the
sale or transfer of the Class B Common Stock by the Trust.
On May 21, 1999, the Trust sold 997,475 shares of its Class B Common
Stock representing approximately 49.9% of the outstanding common stock of the
Company. The purchasers were Massachusetts Mutual Life Insurance Company,
MassMutual High Yield Partners II LLC, MassMutual Corporate Value Partners
Limited, Ralph R. Whitney, Jr., Glenn Scolnik, Forrest E. Crisman, Jr., Andrew
McNally, IV and Ward S. McNally (collectively, the "Purchasers"). Messrs.
Whitney, Scolnik, Crisman, A. McNally and W. McNally are directors and/or
officers of HKW. The purchasers also agreed to pay the Trust, on a pro rata
basis, a stock price deficiency payment, on the third anniversary of the
purchase, in an amount by which the market value of the Class A Common Stock
retained by the Trust, on a per share basis, is less than a predetermined value.
The Company has agreed to reimburse the purchasers for any such payments they
make to the Trust. The Company believes any such payment will be immaterial to
the results of operations.
The Company has also agreed that until Massachusetts Mutual Life
Insurance Company, MassMutual High Yield Partners II LLC and MassMutual
Corporate Value Partners collectively own less than five percent of the
outstanding voting stock of the Company, the Company will recommend one person
designated by Massachusetts Mutual Life Insurance Company to be included in the
slate of nominees recommended by the Board of Directors of the Company for
election by stockholders at the Company's annual meeting of the stockholders.
Pursuant to Reinhold's Certificate of Incorporation, upon consummation
of the sale of the Trust's shares, (i) all of the outstanding shares of Class B
Common Stock automatically converted into shares of Class A Common Stock, (ii)
the number of authorized shares of Class A Common Stock automatically increased
by the number of shares of Class B Common Stock so converted, and (iii) the
number of authorized shares of Class B Common Stock decreased by the number of
shares so converted. Accordingly, the Certificate of Incorporation currently
authorizes 2,500,000 shares of capital stock, all consisting of Class A Common
Stock. No other class of capital stock is currently authorized. The amendment
will increase the total number of authorized shares to 50,000,000, consisting of
45,000,000 million shares of the Class A Common Stock and 5,000,000 shares of
Preferred Stock, and additional changes as discussed below.
<PAGE>
PROPOSAL I TO AMEND THE CERTIFICATE OF INCORPORATION
For the reasons set forth below, the Board of Directors believes that
it is in the best interest of the Company and its shareholders to amend
Reinhold's Certificate of Incorporation as discussed below. The purpose of the
amendments is to increase the number of authorized shares of capital stock of
the Corporation from 2,500,000 shares to 50,000,000 shares by (a) increasing the
number of authorized shares of Class A Common Stock from 2,500,000 shares to
45,000,000 shares, and (b) authorizing a class of preferred stock, consisting of
5,000,000 authorized shares (the "Preferred Stock") that authorizes the Board of
Directors to establish the rights and preferences of any series of Preferred
Stock prior to the issuance of any such series and to issue such Preferred Stock
in one or more series, without further approval of stockholders of the Company.
The proposed amendment also eliminates from the Certificate of Incorporation
references to Reinhold's former Class B New Common Stock and makes certain other
changes as discussed below.
The text of the proposed Amended and Restated Certificate of
Incorporation as described in this Proposal to Amend the Certificate of
Incorporation is set forth in Exhibit A attached to this Proxy Statement and is
incorporated by reference herein.
Purpose of the Amendment to the Certificate of Incorporation
Increase in the Number of Authorized Shares of Common Stock. The
primary purpose of the proposed amendment to Article IV of the Certificate of
Incorporation is to increase the number of authorized shares of Reinhold's
capital stock. The additional shares of Class A Common Stock for which
authorization is sought would be identical to the shares of Class A Common Stock
now authorized. The amendment would provide additional authorized shares of
Class A Common Stock that may be used from time to time for corporate purposes
that the Board of Directors may deem desirable, including, without limitation,
stock splits, stock dividends or other distributions, financings, acquisitions,
stock grants, stock options and employee benefit plans. Reinhold has no current
plans with respect to the additional authorized but unissued shares of Class A
Common Stock that will result from the amendment.
Authorization of Preferred Stock. The Certificate of Incorporation
currently does not authorize the Company to issue any class of Preferred Stock.
The proposed amendment to Article IV authorizes a class of Preferred Stock
consisting of 5,000,000 shares and further authorizes the Board of Directors to
issue the Preferred Stock in one or more series and permits the Board of
Directors to establish the rights and preferences of each series of Preferred
Stock prior to the issuance thereof. Accordingly, the terms of the proposed
Preferred Stock, including dividends or interest rates, conversion prices,
voting rights, redemption prices, maturity dates and similar matters will be
determined by the Board of Directors without stockholder approval. The Board of
Directors of the Company will have the broad authority to issue authorized and
unissued shares of Preferred Stock without obtaining approval from the holders
of the Class A Common Stock.
Number of Directors. Article V of the Certificate of Incorporation
currently provides that the Board of Directors shall consist of three members.
The amendment to Article V provides that the number of directors shall be
determined in the manner specified in the By-laws. The proposed amendment to
Reinhold's By-laws, which is discussed further below, provides that the number
of directors shall be determined from time to time by vote of a majority of the
entire Board of Directors, provided that the number may not be less than three
nor more than ten.
Amendment of By-laws. Article VI of the Certificate of Incorporation
currently confers upon the Board of Directors the authority to make, alter,
amend or repeal Reinhold's By-laws, except that any change to Article II of the
By-laws, which pertains to meetings of stockholders, or Article III of the
By-laws, which pertains to the directors, if approved by the Board of Directors,
must be approved by a unanimous vote of the entire board of directors. The
proposed amendment to Article VI of the Certificate of Incorporation expressly
authorizes the Board of Directors to exercise all powers granted to the
directors by law, except as such powers are limited or denied in the Certificate
of Incorporation, as amended, or in the By-laws, and further provides that the
Board of Directors is expressly authorized to make, alter or repeal the By-laws.
Consequently, the amended Certificate of Incorporation will permit a majority of
the Directors to amend Articles II or III of the By-laws by a majority vote of
the directors.
<PAGE>
Elimination of References to Class B Common Stock and Other Changes.
The amendment eliminates references to the former Class B Common Stock and
eliminate references to the restrictions on transfer of Reinhold's capital stock
that have now expired. The amendment also deletes the word, "New," from the
title of the Class A Common Stock and revises Article VII of the Certificate of
Incorporation to clarify that the provisions of the Certificate of Incorporation
relating to indemnification apply to persons who are directors, officers,
employees or agents of or acting in any other capacity.
Possible Effects of the Amendment to the Certificate of Incorporation
Increase the Number of Authorized Common Stock. If the stockholders
approve the proposed amendment to the Certificate of Incorporation, the Company
will have additional authorized but unissued shares of Class A Common Stock that
may be issued without further action or authorization of the stockholders
(except as required by law or the rules of the Nasdaq Stock Market or other
stock exchange on which the Company's securities may then be listed). The
issuance of additional shares of Class A Common Stock would have a dilutive
effect on earnings per share. In addition, the issuance of additional shares of
Common Stock could have a dilutive effect on the voting power of the current
stockholders because they do not have preemptive rights.
Although the Board of Directors is not proposing the authorization of
the additional shares of Class A Common Stock as an "anti-takeover" device, it
is possible that additional shares could be used to discourage a tender offer or
other attempt to gain control of Reinhold. The amendment could, under certain
circumstances, have an "anti-takeover" effect, because it would enable the Board
of Directors to issue shares of the Class A Common Stock to persons who are
opposed to a takeover bid. This could deter transactions that may result in a
change of control of the Company, including transactions in which stockholders
may receive a premium for their shares over the current market prices.
Authorization of Preferred Stock. Because of the broad powers granted
to the Board of Directors to issue shares of Preferred Stock and determine the
rights, preferences and privileges of the holders of such series, the Board
would have the power to issue shares of Preferred Stock in a manner which could
be used as a defensive measure against a hostile takeover or to keep the Board
of Directors in power. However, the Board of Directors has no present plans to
issue shares for such purpose.
Required Vote; Recommendation of the Board of Directors
Affirmative votes of the holders of at least a majority of the
outstanding shares of Class A Common Stock are required to approve the proposed
amendments to Reinhold's Certificate of Incorporation. Under the applicable
provisions of the Delaware General Corporation Law, the Company's stockholders
have no appraisal rights with respect to the proposed amendments. If the
amendments are adopted, they will become effective upon the filing of the
Certificate of Incorporation, as amended, with the Delaware Secretary of State.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE AMENDMENT TO THE CERTIFICATE
OF INCORPORATION.
<PAGE>
PROPOSAL II TO AMEND THE BY-LAWS
For the reasons set forth below, the Board of Directors believes that
it is in the best interests of the Company and its shareholders to amend
Reinhold's By-laws as discussed below. The proposed amendments provide for a
Board of Directors of between three and ten directors, with the exact number
determined from time to time by vote of a majority of the Board of Directors.
The proposed amendments also eliminate from the By-laws references to the
Company's former Class B New Common Stock and make certain other changes as
discussed below.
The text of the proposed Amended and Restated By-laws as described in
this Proposal to Amend the By-laws is set forth in Exhibit B attached to this
Proxy Statement and is incorporated by reference herein.
Reasons For and Effects of Proposed Amendments
Variable Board of Directors. The proposed amendment to Article III,
Section 2 of the By-laws provides that, except as otherwise fixed by or pursuant
to the provisions of the Certificate of Incorporation relating to the rights of
the holders of any class or series of stock having preference over the Class A
Common Stock as to dividends or upon liquidation, the number of directors of
Reinhold shall be determined from time to time by vote of a majority of the
entire Board of Directors, provided that the number thereof may not be less than
three nor more than ten. The purpose of the amendment is to allow for the
expansion of the Board of Directors to accommodate additional well-qualified
directors to serve on Reinhold's Board.
Amendment of By-laws. The proposed amendment to Article III, Section 8
of the By-laws (relating to Quorum and Manner of Acting) authorizes the Board of
Directors to amend Articles II or III of the By-laws without obtaining the
affirmative vote of the entire Board of Directors. The By-laws presently permit
the Board to amend the By-laws, except that any amendment to Articles II or III
requires unanimous vote of the entire board of directors.
The proposed amendment to Article XI of the By-laws (relating to
Amendments) expressly provides that any amendment to the By-laws authorized by
the Board of Directors may be by written consent of the Board. The amendment
provides further flexibility to the Board of Directors to amend the By-laws by
deleting the provision in Article XI that states that no amendment or supplement
adopted by the Board shall vary or conflict with any amendment or supplement
adopted by the stockholders.
Elimination of References to Class B Common Stock and Other Changes.
The amendment also eliminates references in the By-laws to the former Class B
Common Stock and eliminates references to the restrictions transfer of
Reinhold's capital stock that have expired. The amendment also includes certain
other changes to update the By-laws.
The proposed amendment to Reinhold's By-laws is to give effect to the
proposed amendment to the Certificate of Incorporation discussed above and to
provide greater flexibility for the Board of Directors in adopting revisions or
amendments to Reinhold's By-laws without the need to seek shareholder approval
of such changes.
Required Vote; Recommendation of the Board of Directors
Affirmative votes of the holders of at least a majority of the
outstanding shares of Class A Common Stock present in person or represented by
proxy at the Special Meeting are required to approve the proposed amendment to
Reinhold's By-laws. Under the applicable provisions of the Delaware General
Corporation Law, the Company's stockholders have no appraisal rights with
respect to the proposed amendment to the By-laws.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE AMENDMENT TO THE BY-LAWS.
<PAGE>
PROPOSAL III TO RATIFY THE MANAGEMENT AGREEMENT
For the reasons set forth below, the Board of Directors believes it is
in the best interests of the Company and its shareholders to approve and ratify
the Company's Management Agreement with HKW. HKW is a private equity firm with
offices in New York, Chicago and Indianapolis. Messrs. Ralph R. Whitney, Jr. and
Andrew McNally, IV, who serve as managing directors of HKW, are directors of
Reinhold. See, "Background."
Reasons For and Effects of the Management Agreement
Pursuant to the Management Agreement HKW will advise Reinhold and its
subsidiaries on strategic direction and merger and acquisition activities,
including identifying potential acquisition candidates. The Management Agreement
provides that Reinhold agrees to pay HKW a fee equal to Twenty Thousand Dollars
($20,000) per month, payable in monthly installments, during the term of the
Management Agreement. The term of the agreement is two years, and thereafter it
will be automatically renewed for successive one year periods unless either
party notifies the other in writing of its intention to terminate the agreement.
A copy of the Management Agreement is attached to this Proxy Statement as
Exhibit C.
Required Vote; Recommendation of the Board of Directors
Affirmative votes of the holders of at least a majority of the
outstanding shares of Class A Common Stock present in person or represented by
proxy at the Special Meeting are required to approve and ratify the Management
Agreement. Under the applicable provisions of the Delaware General Corporation
Law, the Company's stockholders have no appraisal rights with respect to the
proposed amendment to the By-laws.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION OF THE
MANAGEMENT AGREEMENT.
<PAGE>
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The following table presents information regarding beneficial ownership
of Reinhold Common Stock as of that date by (i) persons known by Reinhold to be
a beneficial owner of 5% or more of Reinhold's issued and outstanding Common
Stock, (ii) each member of the Board of Directors, executive officers, and (iii)
by all directors and officers of Reinhold as a group. The information contained
in this table reflects "beneficial" ownership within the meaning of Rule 13d-3
under the Exchange Act.
Security Ownership of Certain Beneficial Owners and Management
<TABLE>
<CAPTION>
Amount and Nature of Beneficial Percentage of Issued and
Name and Address of Ownership of Reinhold Common Outstanding
Beneficial Owner Stock Common Stock
<S> <C> <C>
Massachusetts Mutual Life 748,106(1) 37.4%
Insurance Company
1295 State Street
Springfield, MA 01111
MassMutual High Yield 314,204 15.7%
Partners II, LLC
1295 State Street
Springfield, MA 01111
MassMutual Corporate Value 119,697 6.0%
Partners Limited
1295 State Street
Springfield, MA 01111
Andrew McNally IV 61,336(2) 3.1%
Ralph R. Whitney, Jr. 45,476 2.3%
Michael T. Furry 11,115 *
Brett R. Meinsen 1,000 *
------- -----
All directors and officers of Reinhold as a 118,927 6.0%
group (4 persons)
<FN>
*The percentage of shares owned does not exceed 1% of the issued and outstanding
Common Stock.
(1) Includes 314,204 shares owned by MassMutual High Yield Partners II LLC
and 119,697 shares owned by MassMutual Corporate Value Partners
Limited, as to which Massachusetts Mutual Life Insurance Company shares
voting and dispositive power but disclaims beneficial ownership.
(2) Includes 46,737 shares owned by Andrew Management IV, L.P. of which Mr.
McNally is the general partner and has sole voting and investment
power.
</FN>
</TABLE>
PROPOSALS BY HOLDERS OF COMMON STOCK
An eligible stockholder who desires to have a qualified proposal
considered for inclusion in the proxy statement for the Company's Annual
Meeting in 2000 must give notice to the Secretary of the Company of the terms
and content of the proposal not later than October 29, 1999. The offices of
Reinhold are located at 12827 East Imperial Hwy, Santa Fe Springs, California,
90670.
<PAGE>
EXPENSES AND OTHER MATTERS
Reinhold will pay the costs of preparing, assembling and mailing this
proxy statement and the material enclosed herewith. Reinhold has requested
brokers, nominees, fiduciaries and other custodians who hold shares of its
Common Stock in their names to solicit proxies from their clients who own such
shares, and Reinhold has agreed to reimburse them for their expenses in so
doing.
Management does not intend to present any further items of business to
the meeting, and knows of no such items that will or may be presented by others.
However, if any other matter properly comes before the meeting, the persons
named in the enclosed proxy form will vote thereon in such manner as they may,
in their discretion, determine.
Shareholders who do not plan to attend the Special Meeting are urged to
complete, date, sign and return the enclosed proxy in the enclosed envelope to
which no postage need be affixed if mailed in the United States. Prompt response
is helpful and your cooperation will be appreciated.
/s/BRETT R. MEINSEN
BRETT R. MEINSEN
Secretary
September [ ], 1999
PLEASE DATE, SIGN AND IMMEDIATELY RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED
ADDRESSED ENVELOPE.
<PAGE>
EXHIBIT A
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION OF
REINHOLD INDUSTRIES, INC.
ARTICLE I
The name of the corporation (the "Corporation") is: Reinhold Industries, Inc.
ARTICLE II
The address of its registered office in the State of Delaware is 1209 Orange
Street in the City of Wilmington, County of New Castle. The name of its
registered agent at such address is The Corporation Trust Company.
ARTICLE III
The nature of the business or purposes to be conducted or promoted by the
Corporation is to engage in any lawful activity for which corporations may be
organized under the General Corporation Law of the State of Delaware (the
"DGCL")
ARTICLE IV
SECTION 1. Capital Stock. The total number of shares of all classes of
capital stock which the Corporation shall have authority to issue is 50,000,000
shares, consisting of 45,000,000 shares of Class A Common Stock, par value $.01
per share ("Common Stock"), and 5,000,000 shares of Preferred Stock ("Preferred
Stock").
SECTION 2. Common Stock.
(a) Subject to any voting rights that may be conferred upon
the holders of any series of the Preferred Stock established by the Board of
Directors pursuant to authority herein provided, and except as otherwise
provided by law, the shares of Common Stock shall entitle the holders thereof to
one vote for each share upon all matters upon which stockholders have the right
to vote.
(b) Subject to any limitations prescribed in this Article IV
and any further limitations prescribed in accordance therewith, and subject to
any prior rights that may be conferred upon the holders of any series of the
Preferred Stock established by the Board of Directors pursuant to authority
herein provided, and except as otherwise provided by law, the holders of shares
of Common Stock shall be entitled to receive when and as declared by the Board
of Directors, out of the assets of the Corporation which are by law available
therefor, pro rata dividends payable either in cash, in property or securities
of the Corporation.
(c) Subject to any prior rights that may be conferred upon the
holders of any series of the Preferred Stock established by the Board of
Directors pursuant to authority herein provided, holders of shares of Common
Stock will be entitled to receive pro rata all of the remaining assets of the
Corporation available for distribution to its stockholders in the event of any
liquidation, dissolution or winding up of the Corporation.
<PAGE>
SECTION 3. Preferred Stock. The Board of Directors is hereby expressly
authorized, by resolution or resolutions, to provide, out of the unissued shares
of Preferred Stock, for one or more series of Preferred Stock. Except as may be
required by law, the shares in any series of Preferred Stock or any shares of
stock of any other class need not be identical. Before any shares of any such
series are issued, the Board of Directors shall fix, and hereby is expressly
empowered to fix, by resolution or resolutions, the following provisions of the
shares thereof:
(a) the designation of such series, the number of shares to
constitute such series and the stated value thereof if different from
the par value thereof;
(b) whether the shares of such series shall have voting
rights, in addition to any voting rights provided by law, and, if so,
the terms of such voting rights, which may be general or limited;
(c) the dividends, if any, payable on such series, whether any
such dividends shall be cumulative, and, if so, from what dates, the
conditions and dates upon which such dividends shall be payable, the
preference or relation which such dividends shall bear to the dividends
payable on any shares of stock of any other class or any other series
of Preferred Stock;
(d) whether the shares of such series shall be subject to
redemption by the Corporation and, if so, the times, prices and other
conditions of such redemption;
(e) the amount or amounts payable upon shares of such series
upon, and the rights of the holders of such series in, the voluntary or
involuntary liquidation, dissolution or winding up, or upon any
distribution of the assets, or the Corporation;
(f) whether the shares of such series shall be subject to the
operation of a retirement or sinking fund and, if so, the extent to and
manner in which any such retirement or sinking fund shall be applied to
the purchase or redemption of the shares of such series for retirement
or other corporate purposes and the terms and provisions relative to
the operation thereof;
(g) whether the shares of such series shall be convertible
into, or exchangeable for, shares of stock of any other class or any
other series of Preferred Stock or any other securities (whether or not
issued by the Corporation) and, if so, the price or prices or the rate
or rates of conversion or exchange and the method, if any, of adjusting
the same, and any other terms and conditions of conversion or exchange;
(h) the limitations and restrictions, if any, to be effective
while any shares of such series are outstanding upon the payment of
dividends or the making of other distributions on, and upon the
purchase, redemption or other acquisition by the Corporation of, the
Common Stock or shares of stock of any other class or any other series
of Preferred Stock;
(i) the conditions or restrictions, if any, upon the creation
of indebtedness of the Corporation or upon the issue of any additional
stock, including additional shares of such series or of any other
series of Preferred Stock or of any other class of stock; and
(j) any other powers, preferences and relative, participating,
optional and other special rights, and any qualifications, limitations
and restrictions thereof.
Except to the extent otherwise expressly required by law (i) no share of
Preferred Stock shall have any voting rights other than those which shall be
fixed by the Board of Directors by resolution pursuant to this Section and (ii)
no shares of Common Stock shall have any voting rights with respect to any
amendment to the terms of any series of Preferred Stock; provided however, that
in the case of this clause (ii) the terms of such series of Preferred Stock, as
so amended, could have been established without any vote of any shares of Common
Stock.
<PAGE>
ARTICLE V
The number of directors on the Board of Directors shall be fixed by, or
determined in the manner specified in, the By-laws.
ARTICLE VI
The Board of Directors is expressly authorized to exercise all powers
granted to the directors by law except as such powers are limited or denied
herein or in the Bylaws of the Corporation. In furtherance of such powers, the
Board of Directors is expressly authorized to make, alter or repeal the Bylaws
of the Corporation.
ARTICLE VII
1. The Corporation shall indemnify to the fullest extent permitted
under and in accordance with the laws of the State of Delaware, as amended from
time to time, 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 by reason of the fact
that he or she is or was a director, officer, employee or agent of or in any
other capacity 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 or her in connection with such action,
suit or proceeding if he or she 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 or her conduct was unlawful.
2. Expenses (including attorneys' fees) incurred in defending any
civil, criminal, administrative or investigative action, suit proceeding shall
(in the case of any action, suit or proceeding against a director of the
Corporation) or may (in the case of any action, suit or proceeding against an
officer, trustee, employee or agent) be paid by the Corporation in advance of
the final disposition of such action, suit or proceeding as authorized by the
Board upon receipt of an undertaking by or on behalf of the indemnified person
to repay such amount if it shall ultimately be determined that he or she is not
entitled to be indemnified by the Corporation as authorized in this paragraph.
3. The indemnification, advancement of expenses and other rights set
forth in this Paragraph shall not be exclusive of any provisions with respect
thereto in the Bylaws or any other contract or agreement between the Corporation
and any officer, director employee or agent of the Corporation.
4. Neither the amendment nor repeal of this Article VII, subparagraphs
1, 2 or 3, nor the adoption of any provision of the Certificate of Incorporation
inconsistent with Article VII, subparagraphs 1, 2 or 3, shall eliminate or
reduce the effect of this Article VII, subparagraphs 1, 2 and 3, in respect of
any matter occurring before such amendment, repeal or adoption of an
inconsistent provision or in respect of any cause of action, suit or claim
relating to any such matter which would have given rise to a right
indemnification or right to receive expenses pursuant to this Article VII,
subparagraphs 1, 2 or 3, if such provision had not been amended or repealed or
if a provision inconsistent therewith had not been so adopted.
<PAGE>
5. No director shall be personally liable to the Corporation or any
stockholder for monetary damages for breach of fiduciary duty as a director,
except for any matter in respect of which such director (A) shall be liable
under Section 174 of the DGCL or any amendment thereto or successor provision
thereto, or (B) shall be liable by reason that, in addition to any and all other
requirement for liability, he or she: (i) shall have breached his or her duty of
loyalty to the Corporation or its stockholders; (ii) shall not have acted in
good faith or, in failing to act, shall not have acted in good faith; (iii)
shall have acted in a manner involving intentional misconduct or knowing
violation of law or, in failing to act, shall have acted in a manner involving
intentional misconduct or a knowing violation of law; or (iv) shall have derived
an improper personal benefit.
If the Delaware General Corporation Law is amended after the date of
incorporation of the Corporation to authorize corporation action further
eliminating or limiting the personal liability of directors, then the liability
of a director of the Corporation shall be eliminated or limited to the fullest
extent permitted by the Delaware General Corporation Law, as so amended.
The Corporation reserves the right to amend, alter, change or repeal
any provision contained in this Restated Certificate of Incorporation in the
manner now or hereafter prescribed by statute.
IN WITNESS WHEREOF, Reinhold Industries , Inc. has caused this
certificate to be signed and attested to this _____ day of ______________, 1999.
Dated: , 1999
ATTEST: REINHOLD INDUSTRIES, INC.
_______________________________ By:______________________________
Secretary Name: Michael T. Furry
Title: President
<PAGE>
EXHIBIT B
AMENDED AND RESTATED BY-LAWS OF
REINHOLD INDUSTRIES, INC.
ARTICLE I
OFFICES
SECTION 1. Delaware Office. The registered office of Reinhold
Industries, Inc. (the "Corporation") within the State of Delaware shall be
maintained at the office of Corporate Trust Company in the City of Welmington,
County of New Castle.
SECTION 2. Other Offices. The Corporation may also have an office or
offices and keep the books and records of the Corporation, except as otherwise
may be required by law, in such other place or places, either within or without,
the State of Delaware, as the Board of Directors of the corporation (the
"Board") may from time to time determine or the business of the Corporation may
require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
SECTION 1. Place of Meetings. All meetings of holders of shares of
capital stock of the Corporation shall be held at the office of the Corporation
in the State of Delaware or at such other place, within or without the State of
Delaware, as may from time to time be fixed by the Board or specified or fixed
in the respective notices or waivers of notice thereof.
SECTION 2. Annual Meetings. An annual meeting of stockholders of the
Corporation for the election of directors and for the transaction of such other
business as may properly come before the meeting (an "Annual Meeting") shall be
held on the first Tuesday of each [________________], or on such other date and
at such time as may be fixed by the Board. If the Annual Meeting shall not be
held on the day designated, the Board shall call a special meeting of
stockholders as soon as practicable for the election of directors.
SECTION 3. Special Meetings. Special meetings of stockholders, unless
otherwise provided by law, may be called at any time by the Board, the President
or stockholders owning, in the aggregate, twenty-five (25%) percent or more of
the outstanding Common Stock of the Corporation. Any such call must specify the
matters to be acted upon at such meeting and only such matters shall be acted
upon thereat.
SECTION 4. Notice of Meetings. Except as otherwise may be required by
law, notice of each meeting of stockholders, whether an Annual Meeting or a
special meeting, shall be in writing, shall state the purpose or purposes of the
meeting, the place, date and hour of the meeting and, unless it is an Annual
Meeting, shall indicate that the notice is being issued by or at the direction
of the person or persons calling the meeting, and a copy thereof shall be
delivered or sent by mail, not less than ten (10) nor more than sixty (60) days
before the date of said meeting, to each stockholder entitled to vote at such
<PAGE>
meeting. If mailed, such notice shall be directed to such stockholder at his
address as it appears on the stock records of the Corporation, unless he shall
have filed with the Secretary a written request that notices to him be mailed to
some other address, in which case it shall be directed to him at such other
address. Notice of an adjourned meeting need not be given if the time and place
to which the meeting is to be adjourned was announced at the meeting at which
the adjournment was taken, unless (i) the adjournment is for more than thirty
(30) days or (ii) the Board shall fix a new record date for such adjourned
meeting after the adjournment.
SECTION 5. Quorum. At each meeting of stockholders of the Corporation,
the holders of shares having majority of the voting power of the capital stock
of the Corporation issued and outstanding and entitled to vote thereat shall be
present or represented by proxy to constitute a quorum for the transaction of
business, except as otherwise provided by law.
SECTION 6. Adjournments. In the absence of a quorum at any meeting of
stockholders or any adjournment or adjournments thereof, holders of shares
having a majority of the voting power of the capital stock present or
represented by proxy at the meeting may adjourn the meeting from time to time
until a quorum shall be present or represented by proxy. At any such adjourned
meeting at which a quorum shall be present or represented by proxy, any business
may be transacted which might have been transacted at the meeting originally
called if a quorum had been present or represented by proxy thereat.
SECTION 7. Voting. Except as otherwise provided in the Certificate of
Incorporation of the Corporation (the "Certificate of Incorporation") at each
meeting of stockholders, every stockholder of the Corporation entitled to vote
shall be entitled to one vote for every share of capital stock standing in his
name on the stock records of the Corporation (i) at the time fixed pursuant
Section 6 of Article VII of these By-Laws as the record date for the
determination of stockholders entitled to vote at such meeting or (ii) if no
such record date shall have been fixed, then at the close of business on the day
next preceding the day on which notice thereof shall be given. At each meeting
of stockholders, all matters shall be decided by a majority of the votes cast at
such meeting by the holders of shares of capital stock present or represented by
proxy and entitled to vote thereon, a quorum being present, except where a
different vote is required by law or the Certificate of Incorporation.
SECTION 8. Inspectors. For each election of directors by the
stockholders and in any other case in which it shall be advisable, in the
opinion of the Board, that the voting upon any matter shall be conducted by
inspectors of election, the Board shall appoint two inspectors of election. If,
for any such election of directors or the voting upon any such other matter, any
inspector appointed by the Board shall be unwilling or unable to serve, or if
the Board shall fail to appoint inspectors, the chairman of the meeting shall
appoint the necessary inspector or inspectors. The inspectors so appointed,
before entering upon the discharge of the duties, shall be sworn faithfully to
execute the duties of inspectors with strict impartiality, and according to the
best of their ability and the oath so taken shall be subscribed by them. Such
inspectors shall determine the number of shares of capital stock of the
Corporation outstanding and the voting power of each of the shares represented
at the meeting, the existence of a quorum, and 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 proper
to conduct the election or vote with fairness to all stockholders on request of
the chairman of the meeting or any stockholder entitled to vote thereat, the
inspectors shall make a report in writing of any challenge, question or matter
determined by them and shall execute a certificate of any fact found by them. No
director or candidate for the office of director shall act as an inspector of
election of directors. Inspectors need not be stockholders.
<PAGE>
ARTICLE III
DIRECTORS
SECTION 1. Powers. The business and affairs of the Corporation shall be
managed by or under the direction of Board. The Board may select one of its
members to be Chairman of the Board. The Chairman of the Board shall, if
present, preside at all meetings of the Board and of the stockholders. If the
Chairman is not present, the members of the Board then present elect one of the
members so present to serve as Acting Chairman.
SECTION 2. Number and Terms. Except as otherwise fixed by or pursuant
to the provisions of the Certificate of Incorporation of the Corporation
relating to the rights of the holders of any class or series of stock having
preference over the Common Stock as to dividends or upon liquidation, the number
of directors of the Corporation shall be determined from time to time by vote of
a majority of the entire Board of Directors, provided that the number thereof
may not be less than three nor more than ten. Directors are elected at each
annual shareholders' meeting and serve for a term expiring at the following
annual shareholders' meeting. A director who has been removed pursuant to
Section 10 of this Article III ceases to serve immediately upon removal;
otherwise, a director whose term has expired continues to serve until a
successor is elected and qualifies or until there is a decrease in the number of
directors.
SECTION 3. Nominations of Directors; Election. Nominations for the
election of directors may be made by the Board by any stockholder entitled to
vote generally in the election of directors who complies with the procedures set
forth in this Section. Directors shall be at least 21 years of age. Directors
need not be stockholders. At each meeting of stockholders for the election of
directors at which a quorum is present, the persons receiving a plurality of the
votes cast shall be elected directors. All nominations by stockholders shall be
made pursuant to timely notice in proper written form to the Secretary of the
Corporation. To be timely, a stockholder notice shall be delivered to or mailed
and received at the principal executive offices of the Corporation not less than
thirty (30) days nor more than sixty (60) days prior to the meeting; provided,
however, that in the event that less than forty (40) days notice or prior public
disclosure of the date of the meeting is given or made to stockholders, notice
by the stockholder to be timely must be received not later than the close of
business on the tenth (10th) day following the day on which such notice of the
date of the meeting was mailed or such public disclosure was made. To be in
proper written form, such stockholders notice shall set forth in writing (i) as
to each person whom the stockholder proposes to nominate for election or
reelection as a director, all information relating to such person that is
required to be disclosed in solicitations of proxies for election of directors,
or is otherwise required, in each case pursuant to Regulation 14A under the
Securities Exchange Act of 1934, as amended, including, without limitation, such
person's written consent to being named in the proxy statement as a nominee and
to serving as a director if elected; and (ii) as to the stockholder giving the
notice, (x) the name and address, as they appear on the Corporations books, of
such stockholder and (y) the class and number of shares of the Corporation which
are beneficially owned by such stockholder. In the event that a stockholder
seeks to nominate one or more directors, the Secretary shall appoint two
inspectors, who shall not be affiliated with the Corporation, to determine
whether a stockholder has complied with this Section 3. If the inspectors shall
determine that a stockholder has not complied with this Section 3, the
inspectors shall direct the chairman of the meeting to declare to the meeting
that a nomination was not made in accordance with the procedures prescribed by
the By-Laws of the Corporation, and the chairman shall so declare to the meeting
and the defective nomination shall be disregarded.
<PAGE>
SECTION 4. Place of Meetings. Meetings of the Board shall be held at
the Corporation's office in the State of Delaware or at such other place, within
or without such State, as the Board may from time to time determine or as shall
be specified or fixed in the notice or waiver of notice of any such meeting.
SECTION 5. Regular Meetings. Regular meetings of the Board shall be
held quarterly in accordance with a yearly meeting schedule as determined by the
Board; or such meetings may be held on such other days and at such other times
as the Board may from time to time determine. Notice of regular meetings of the
Board need not be given except as otherwise required by these By-Laws.
SECTION 6. Special Meetings. Special meetings of the Board may be
called by the Chairman or the President and shall be called by the Secretary at
the request of any two directors.
SECTION 7. Notice of Meetings. Notice of each special meeting of the
Board (and of each regular meeting for which notice shall be required), stating
the time, place and purposes thereof, shall be mailed to each director,
addressed to him or her at his or her residence or usual place of business, or
shall be sent to him or her by telex, cable or telegram so addressed, or shall
be given personally by telephone on twenty-four hours' notice.
SECTION 8. Quorum and Manner of Acting. The presence of at least a
majority of the authorized number of directors shall be necessary and sufficient
to constitute a quorum for the transaction of business at any meeting of the
Board. Except where a different vote is required by law, the Certificate of
Incorporation or these By-Laws, the act of a majority of the directors present
at any meeting at which a quorum shall be present shall be the act of the Board.
Any action required or permitted to be taken by the Board may be taken without a
meeting if all the directors consent in writing to the adoption of a resolution
authorizing the action. The resolution and the written consents thereto by the
directors shall be filed with the minutes of the proceedings of the Board. Any
one or more directors may participate in any meeting of the Board by means of a
conference telephone or similar communications equipment allowing all persons
participating in the meeting to hear each other at the same time. Participation
by such means shall be deemed to constitute presence in person at a meeting of
the Board.
SECTION 9. Resignation. Any director may resign at any time by giving
written notice to the Corporation; provided, however, that written notice to the
Board, the Chairman of the Board, the President or the Secretary shall be deemed
to constitute notice to the Corporation. Such resignation shall take effect upon
receipt of such notice or at any later time specified therein and, unless
otherwise specified therein, acceptance of such resignation shall not be
necessary to make it effective.
SECTION 10. Removal of Directors. To the extent permitted by law, any
director may be removed from office, with or without cause, by the affirmative
vote of such number of shares of Common Stock as would be sufficient to elect
him if then voted at a meeting held to elect the entire Board of Directors.
Notwithstanding the foregoing, and except as otherwise required by law, whenever
the holders of any one or more series of Preferred Stock shall have the right,
voting separately as a class, to elect one or more directors of the Corporation,
the provisions of this Section shall not apply with respect to the director or
directors elected by such holders of Preferred Stock.
<PAGE>
ARTICLE IV
COMMITTEES OF THE BOARD
SECTION 1. Appointment and Powers of Executive Committee. The Board
may, by resolution adopted by the affirmative vote of a majority of the
authorized number of directors, designate an Executive Committee of the Board
which shall consist of such number of members (but not less than three) as the
Board shall determine, one of whom shall be the President. Except as provided by
Delaware law, during the interval between the meetings of the Board, the
Executive Committee shall possess and may exercise all the powers of the Board
in the management and direction of all the business and affairs of the
Corporation (except the matters hereinafter assigned to any other Committee of
the Board), in such manner as the Executive Committee shall deem in the best
interests of the Corporation in all cases in which specific directions shall not
have been given by the Board. A majority of the members of the Executive
Committee shall constitute a quorum for the transaction of business by the
committee and the act of a majority of the members of the committee present at a
meeting at which a quorum shall be present shall be the act of the committee.
Either the President or the Chairman of the Executive Committee may call the
meetings of the Executive Committee.
SECTION 2. Appointment and Powers of Audit Committee. The Board may, by
resolution adopted by the affirmative vote of a majority of the authorized
number of directors, designate an Audit Committee of the Board, which shall
consist of such number of members of the Board as the Board shall determine. The
Audit Committee shall (i) make recommendations to the Board as to the
independent accountants to be appointed by the Board; (ii) review with the
independent accountants the scope of their examination; (iii) receive the
reports of the independent accountants and meet with representatives of such
accountants for the purpose of reviewing and considering questions relating to
their examination and such reports; (iv) review, either directly or through the
independent accountants, the internal accounting and auditing Procedures of the
Corporation; and (v) perform such other functions as may be assigned to it from
time to time by the Board. The Audit Committee may determine its manner of
acting and fix the time and place of its meetings, unless the Board shall
otherwise provide. A majority of the members of the Audit Committee shall
constitute a quorum for the transaction of business by the committee and the act
of a majority of the members of the committee present at a meeting at which a
quorum shall be present shall he the act of the committee.
SECTION 3. Other Committees. The Board may, by resolution adopted by
the affirmative vote of a majority of the authorized number of directors,
designate members of the Board to constitute such other committees of the Board
as the Board may determine. Such committees shall in each case consist of such
number of directors as the Board may determine, and shall have and may exercise,
to the extent permitted by law, such powers as the Board may delegate to them,
in the respective resolution appointing them. Each such committee may determine
its manner of acting and fix the time and place of its meeting, unless the Board
shall otherwise provide. A majority of the members of any such committee shall
constitute a quorum for the transaction of business by the committee and the act
of a majority of the members of such committee present at a meeting at which a
quorum shall be present shall be the act of the committee.
<PAGE>
SECTION 4. Action by Consent; Participation by Telephone or Similar
Equipment. Unless the Board shall otherwise provide, any action required or
permitted to be taken by any committee may be taken without a meeting if all
members of the committee consent in writing to the adoption of a resolution
authorizing the action. The resolution and the written consents thereto by the
members of the committee shall be filed with the minutes of the proceedings of
the committee by means of conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
one another. Participation by such means shall constitute presence in person at
a meeting of the committee.
SECTION 5. Changes in Committees; Resignations. The Board shall have
power, by the affirmative vote of a majority of the authorized number of
directors, at any time, to change the members of, fill vacancies in, or
discharge any committee of Board. Any member of any such committee may resign at
any time by giving notice to the Corporation; provided, however, that notice to
the Board, the Chairman of the Board, President, the chairman of such committee
or the Secretary shall be deemed to constitute notice to the Corporation. Such
resignation shall take effect upon receipt of such notice or at any later time
specific therein; and, unless otherwise specified therein, acceptance of such
resignation shall not be necessary to make it effective. A member of any such
committee may be removed at any time, either with or without cause, by the
affirmative vote of a majority the authorized number of any meeting of the
Board.
ARTICLE V
OFFICERS
SECTION 1. Number and Qualification. The Corporation shall have such
officers as may be necessary or desirable for business of the Corporation. There
shall be elected by the Board persons having the titles and exercising the
duties (as prescribed by the By-Laws or by the Board) of Chairman of the Board,
President, Vice President, Treasurer and Secretary, and such other persons
having such other titles and such other duties as the Board may prescribe. The
same person may hold more than one office. The Chairman of the Board shall be
elected from among the directors. Unless otherwise determined by the Board, the
officers the Corporation shall be elected by the Board at the annual meeting of
the Board, and shall be elected to hold office until the next succeeding annual
meeting of the Board. In the event of the failure to elect officers at such
annual meeting, officers may be elected at any regular or special meeting of the
Board. Each officer shall hold office until his successor has been elected and
qualified, or until his earlier death, resignation or removal.
SECTION 2. Resignations. Any officer may resign at any time by giving
written notice to the Corporation; provided, however, that notice to the Board,
the President, Chairman of or the Secretary shall be deemed to constitute notice
to the Corporation. Such resignation shall take effect upon receipt of such
notice or at any later time specified therein.
SECTION 3. Vacancies. Any vacancy among the officers, whether caused by
death, resignation, removal or any other cause, shall be filled in the manner
prescribed for election or appointment to such office.
<PAGE>
SECTION 4. President. The President shall be the chief executive
officer of the Corporation. The President shall have general and day to day
supervision of the business and affairs of the Corporation. He shall perform the
duties incident to the office of the President and all such other duties and
shall have such other powers as are specified in these By-Laws or as shall be
assigned to or conferred upon him from time to time by the Board by resolution
or in any employment agreement approved by the Board.
SECTION 5. Vice President. Each Vice President shall perform such
duties and exercise such powers as may be assigned to him from time to time by
the Board. In the absence of a President, the duties of a President shall be
performed and his power may be exercised by such Vice President as may be
designated by the President or, failing such designation, such duties shall be
performed and such power may be exercised by each Vice President in the order of
their earliest election to that office; subject in any case to review and
superseding action by the President.
SECTION 6. Treasurer. The Treasurer shall have charge and custody of,
and responsibility for, all funds and securities of the Corporation, shall keep
full and accurate accounts of receipts and disbursements in books belonging to
the Corporation, shall deposit all moneys and other valuables for the credit of
the corporation in such depositories as may be designated pursuant to these
By-Laws, shall receive, and give receipts for, moneys due and payable to the
Corporation from any source whatsoever, shall disburse the funds of the
Corporation and shall render at all regular meetings of the Board, or whenever
the Board may require, an account of all his transactions as Treasurer. He
shall, in general, perform all the duties incident to the office of Treasurer
and all such other duties as may be assigned to him from time to time by the
President or such other officers whom the Treasurer reports.
SECTION 7. Secretary. The Secretary shall, if present, act as secretary
of, and keep the minutes of all meetings of the Board, the Executive Committee
and other committees of the Board and the stockholders in one or more books
provided for the purpose, shall see that all notices are duly given in
accordance with these By-Laws and as required by law, shall be custodian of the
seal of the corporation and shall affix and attest the seal to all documents to
be executed on behalf of the Corporation under its seal. He shall, in general,
perform all the duties incident to the office of Secretary and all such other
duties as may be assigned to him from time to time by the President or such
other officer to whom the secretary reports.
SECTION 8. Additional Officers. The Board may by resolution appoint
such other officers and agents as it may deem appropriate, and such other
officers and agents shall hold their offices for such terms and shall exercise
such powers and perform such duties as may be determined from time to time by
the Board.
SECTION 9. Bonds of Officers. If required by the Board, any officer of
the Corporation shall give a bond for the faithful discharge of his duties in
such amount and with such surety or sureties as the Board may require.
SECTION 10. Salaries. The salaries of all officers and agents of
the Corporation shall be fixed by the Board. No officer shall be prevented from
receiving any such salary by reason of the fact that he or she is also a
director of the Corporation.
<PAGE>
ARTICLE VI
CONTRACTS, CHECKS, LOANS, DEPOSITS, ETC.
SECTION 1. Contracts. The Board may authorize any officer or officers,
agents, in the name and on behalf of the Corporation, to enter into any contract
or to execute and deliver any instrument, which authorization may be general or
confined to specific instances; and, unless so authorized by the Board, no
officer, agent or employee shall have any power or authority to bind the
Corporation by any contract or engagement or to pledge its credit or to render
liable pecuniarily for any purpose or for any amount.
SECTION 2. Checks, etc. All checks, drafts, bills of exchange or other
orders for the Payment of money out of the funds of the corporation, and all
notes or other evidences of indebtedness of the Corporation, shall be signed in
the name and on behalf the Corporation in such manner as shall from time to time
be authorized by the Board, which authorization may be general or confined to
instances.
SECTION 3. Loans. No loan shall be contracted on behalf of the
Corporation, and no negotiable paper shall he issued its name, unless authorized
by the Board, which authorization may be general or confined to specific
instances. All bond debentures, notes and other obligations or evidences of
indebtedness of the Corporation issued for such loans shall be mad executed and
delivered as the Board shall authorize.
SECTION 4. Deposits. All funds of the Corporation not otherwise
employed shall be deposited from time to time for the credit of the Corporation
in such banks, trust companies or other depositories as may be selected by or in
the manner designated by the Board. The Board or designees may make such special
rules and regulations with respect to such bank accounts, not inconsistent with
the provisions of the Certificate of Incorporation or these By-laws, as they may
deem advisable.
ARTICLE VII
CAPITAL STOCK
SECTION 1. Stock Certificate. Each stockholder shall be entitled to
have, in such form as shall be approved by the Board, a certificate or
certificates signed by the Chairman of the Board or the President, and by either
the Treasurer or an Assistant Treasurer or the Secretary or an Assistant
Secretary (except that, when any such certificate is countersigned by a transfer
agent or registered by a registrar other than the Corporation or an employee of
the Corporation, the signatures of any such officers may be facsimiles, engraved
or printed), which may be sealed with the seal of the Corporation (which seal
may be a facsimile, engraved or printed), certifying the number of shares of
capital stock of the Corporation owned by such stockholder. In the event any
officer who has signed or whose facsimile signature has been placed upon any
such certificate shall have ceased to be such officer before such certificate is
issued, such certificate may be issued by the Corporation with the same effect
as if he were such officer at the date of its issue.
SECTION 2. List of Stockholders Entitled to Vote. The officer of the
Corporation who has charge of the stock ledger of the Corporation shall prepare
and make or cause to be prepared or made, at least ten (10) days before every
meeting of stockholders, a complete list of the stockholders entitled to vote at
<PAGE>
the meeting arranged in alphabetical order, and showing the address of each
stockholder and the number of shares of capital stock registered in the name of
each stockholder. Such list shall be open to the examination of any stockholder,
for any purpose germane to the meeting, during ordinary business hours, for a
period of at least ten (10) days prior to the meeting, either at a place within
the city where the meeting is to be held, which place shall be specified in the
notice of the meeting, or, if not so 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
for the duration thereof, and may be inspected by any stockholder of the
Corporation who is present.
SECTION 3. Stock Ledger. The stock ledger of the Corporation shall be
the only evidence as to who are the stockholder entitled to examine the stock
ledger, the list required by Section 2 of this Article VII or the books of the
Corporation, or to vote in person or by proxy at any meeting of stockholders.
SECTION 4. Transfers of Capital Stock. Transfers of shares of capital
stock of the Corporation shall be made only on the stock ledger of the
Corporation by the holder of record thereof, by his attorney thereunto
authorized by power of attorney duly executed and filed with the Secretary of
the Corporation, or by the transfer agent of the Corporation, and only on
surrender of the certificate or certificates representing such shares, properly
endorsed or accompanied by a duly executed stock transfer power. The Board may
make such additional rules and regulations as it may deem advisable concerning
the issue and transfer of certificate representing shares of the capital stock
of the Corporation.
SECTION 5. Lost Certificates. The Board may direct a new certificate to
be issued in place of any certificate theretofore issued by the Corporation
alleged to have been lost, stolen or destroyed, upon the making of an affidavit
of that fact by the person claiming the certificate of stock to be lost, stolen
or destroyed. When authorizing such issue of a new certificate, the Board may,
its discretion and as a condition precedent to the issuance thereof, require the
owner of such lost, stolen or destroyed certificate, or his legal
representative, to give the Corporation a bond in such sum as it may direct as
indemnity against any claim that may be made against the corporation with
respect to the certificate alleged to have been lost, stolen or destroyed.
SECTION 6. Fixing of Record Date. In order that the Corporation may
determine the stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, or entitled to receive payment of any
dividends or other distributions or allotments of any rights, or entitled to
exercise any rights in respect to any change, conversion or exchange of stock or
for the purpose of any other lawful action, the Board may fix, in advance, a
record date, which shall not be more than sixty (60) days nor less than ten (10)
days before the date of such meeting, nor more than sixty (60) days prior to any
other action. A determination of stockholders of record entitled to notice of or
to vote at a meeting of stockholders shall apply to any adjournment of the
meeting; provided, however, that the Board may fix a new record date for the
adjourned meeting.
SECTION 7. Beneficial Owner. 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 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 shares on the part of any other person, whether or not the Corporation
shall have express or other notice thereof, except as otherwise provided by law.
<PAGE>
ARTICLE VIII
FISCAL YEAR
The Corporation's fiscal year shall coincide with the calendar year.
ARTICLE IX
SEAL
The corporate seal shall be in such form as the Board of Directors
shall prescribe.
ARTICLE X
WAIVER OF NOTICE
Whenever any notice is required by law, the Certificate of
Incorporation or these By-Laws to be given to any director, member of a
committee or stockholder, a waiver thereof in writing, signed by the person or
persons entitled to such notice, whether signed before or after the time stated
in such written waiver, shall be deemed equivalent to such notice. Attendance of
a person at a meeting shall constitute a waiver of notice of such meeting,
except when such person attends a meeting for the express purpose of objecting,
at the beginning of the meeting, to the transaction of any business on the
grounds that the meeting is not lawfully called or convened. Neither the
business to be transacted at, nor the purpose of, any meeting of the
stockholders, directors, or members of a committee of Directors need be
specified in any written waiver of notice.
ARTICLE XI
AMENDMENTS
These By-Laws or any of them may be amended or supplemented in any
respect at any time, either (i) at any meeting of stockholders; provided that
any amendment or supplement proposed to be acted upon at any such meeting shall
have been described or referred to in the notice of such meeting; or (ii) by the
written consent of the Board or at any meeting of the Board, provided that any
amendment or supplement proposed to be acted upon at any such meeting shall have
been described or referred to in the notice of such meeting or an announcement
with respect thereto shall have been made at the last previous Board meeting.
<PAGE>
EXHIBIT C
MANAGEMENT AGREEMENT
THIS MANAGEMENT AGREEMENT ("Agreement") is entered into this 3rd day of
June, 1999 (the "Effective Date"), by and between Reinhold Industries, a
Delaware corporation ("Reinhold"), and Hammond, Kennedy, Whitney & Company,
Inc., a New York corporation ("HKW").
RECITAL:
The Board of Directors believes it is in the best interest of Reinhold
to engage HKW to advise, consult and represent Reinhold and its subsidiaries on
strategic direction, merger and acquisition activities and general investment
banking matters on the terms contemplated hereby, and HKW desires to provide
such services as contemplated hereby.
NOW, THEREFORE, in consideration of the premises, the covenants
contained herein, and each act done pursuant thereto, the parties agree as
follows:
1. HKW agrees to advise Reinhold and its subsidiaries on strategic
direction and merger and acquisition activities, including identifying potential
acquisition candidates.
2.Reinhold agrees to pay HKW a fee for HKW's services equal to Twenty Thousand
Dollars ($20,000) per month during the term of this Agreement. Such fee shall
be paid to HKW by Reinhold in monthly installments on or before the fifteenth
day of each month during the term of this Agreement.
3. This Agreement shall commence as of the Effective Date and shall
continue in full force and effect until the second anniversary, and shall
thereafter be automatically renewed for successive one year periods from the
anniversary of the Effective Date unless either party hereto notifies the
other in writing of its intention to terminate the Agreement at least one
hundred twenty (120) days prior to its expiration of the then current term.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the first date set forth above.
REINHOLD INDUSTRIES, INC.
By /s/ Michael T. Furry
Its: President
HAMMOND, KENNEDY, WHITNEY
& COMPANY
By: /s/ Glenn Scolnik
Glenn Scolnik, President
<PAGE>
APPENDIX A
REINHOLD INDUSTRIES, INC.
12827 East Imperial Highway
Santa Fe Springs, CA 90670
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE SPECIAL
MEETING OF SHAREHOLDERS
The undersigned hereby appoints Brett R. Meinsen and Philip H. Milner,
and each of them, the proxies of the undersigned, with power of substitution in
each, to vote all Class A Common Stock of Reinhold Industries, Inc. that the
undersigned is entitled to vote at the Special Meeting of Stockholders of such
Corporation to be held at the offices of Reinhold Industries, Inc., 12827 East
Imperial Highway, Santa Fe Springs, California on Wednesday, October 20, 1999 at
10:00 A.M., Pacific time, and at any adjournments thereof.
1. AMENDMENT OF THE AMENDED AND RESTATED CERTIFICATE OF INCORPORATION.
For [ ] Against [ ] Abstain [ ]
2. AMENDMENT OF THE AMENDED AND RESTATED BY-LAWS.
For [ ] Against [ ] Abstain [ ]
3. RATIFICATION OF THE MANAGEMENT AGREEMENT.
For [ ] Against [ ] Abstain [ ]
(Continued and to be signed on reverse side)
- ----------------------------------------------
(Continued side)
4. In their discretion, such other business as may properly come before the
meeting.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS INSTRUCTED HEREIN BY THE
UNDERSIGNED STOCKHOLDER. IF NO CONTRARY INSTRUCTIONS ARE GIVEN, THIS PROXY WILL
BE VOTED FOR THE PROPOSALS AS SET FORTH IN THE ACCOMPANYING PROXY STATEMENT.
--------------------------------
Date
--------------------------------
Name of Registered Holder
--------------------------------
Signature
--------------------------------
Signature
Joint owners should each sign. When signing as executor, administrator, trustee
or guardian, give your full Title as such.