<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. )
Filed by 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 Materials Pursuant to Rule 14a-11(c) or Rule 14a-12
BARRA, INC.
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
----------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on
which the filing fee is calculated and state how it was
determined):
----------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------------
5) Total fee paid:
----------------------------------------------------------------
[ ] Fee paid previously with preliminary materials:
-----------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
----------------------------------------------------------------
2) Form, Schedule or Registration Statement No:
----------------------------------------------------------------
3) Filing Party:
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4) Date Filed:
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<PAGE>
BARRA, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
June 25, 1998
TO THE SHAREHOLDERS:
NOTICE IS HEREBY GIVEN that the 1998 Annual Meeting of Shareholders of BARRA,
Inc., a California corporation (the "Company"), will be held at 2100 Milvia
Street, Berkeley, California 94704, on Wednesday, August 5, 1998, at 2:00 p.m.
local time, for the following purposes:
1. To elect directors to serve for the ensuing year and until their successors
are duly elected and qualified. Management's slate of directors is
A. George Battle, John F. Casey, M. Blair Hull, Norman J. Laboe, Ronald J.
Lanstein and Andrew Rudd.
2. To approve a Merger Agreement providing for the merger of the Company into
a wholly-owned Delaware subsidiary for the purpose of changing the state of
incorporation of the Company from California to Delaware and effecting
certain changes in the charter and the Bylaws of the Company, as discussed
in the attached Proxy Statement.
3. To approve a proposal to increase the Company's authorized number of shares
of Common Stock from 40,000,000 to 75,000,000.
4. To ratify the selection of Deloitte & Touche LLP as independent auditors of
the Company for the fiscal year ended March 31, 1999.
5. To transact such other business as may properly come before the meeting or
any adjournment thereof.
Only shareholders of record at the close of business on June 8, 1998 are
entitled to notice of and to vote at the meeting. The transfer books will not
be closed.
All shareholders are cordially invited to attend the meeting in person. Whether
or not you plan to attend the meeting, please mark, sign and date the enclosed
proxy and return it as promptly as possible in the envelope enclosed for that
purpose to assure representation of your shares and a quorum at the meeting.
Any shareholder attending the meeting may vote in person even if such
shareholder has returned a proxy.
By Order of the Board of Directors
/s/ Andrew Rudd
- ------------------------------
Andrew Rudd
Chairman of the Board and Chief Executive Officer
Berkeley, California
June 25, 1998
<PAGE>
BARRA, INC.
2100 MILVIA STREET
BERKELEY, CALIFORNIA 94704
PROXY STATEMENT
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
The enclosed Proxy is solicited on behalf of BARRA, Inc., a California
corporation (the "Company" or "BARRA"), for use at the Annual Meeting of
Shareholders to be held Wednesday, August 5, 1998 at 2:00 p.m., local time, or
at any adjournment thereof, for the purposes set forth herein and in the
accompanying Notice of Annual Meeting of Shareholders. The Annual Meeting will
be held at the principal executive offices of BARRA, located at 2100 Milvia
Street, Berkeley, California 94704. The telephone number at that address is
(510) 548-5442.
These proxy solicitation materials were mailed on or about June 25, 1998,
together with BARRA's Annual Report on Form 10-K for the fiscal year ended
March 31, 1998, to all shareholders entitled to vote at the Annual Meeting.
RECORD DATE
Shareholders of record at the close of business on June 8, 1998 are entitled to
notice of, and to vote at, the Annual Meeting. At the record date, 13,777,061
shares of the Company's Common Stock, no par value, were issued and outstanding.
REVOCABILITY OF PROXIES
Any person giving a proxy pursuant to this solicitation may revoke such proxy at
any time before its use by delivering to the Company a written notice of
revocation or a duly executed proxy bearing a later date or by attending the
Annual Meeting and voting in person.
VOTING
The shares represented by the proxies received will be voted as you direct. If
you give no direction, the shares will be voted as recommended by the Board of
Directors.
Every shareholder voting for the election of directors may cumulate such
shareholder's votes and give one candidate a number of votes equal to the number
of directors to be elected multiplied by the number of shares held by such
shareholder, or distribute the shareholder's votes on the same principle among
as many candidates as the shareholder may select, up to the number of directors
to be elected. However, no shareholder shall be entitled to cumulate votes
unless the name of the candidate or candidates for whom such votes are proposed
to be cast has been placed in nomination prior to the voting and the
shareholder, or any other shareholder, has given notice at the Annual Meeting
prior to the voting of the intention to cumulate the shareholder's votes. On all
other matters, each share of Common Stock has one vote.
If a shareholder abstains from voting as to any matter, or if a broker returns a
"non-vote" proxy as to any matter (indicating a lack of authority to vote on
such matter), then the shares held by such shareholder or broker will be deemed
present at the meeting for purposes of determining a quorum but will not be
counted for purposes of calculating the vote with respect to such matter.
Notwithstanding the foregoing, because shareholder approval under California law
requires the affirmative vote of at least a majority of that number of shares
needed to constitute a quorum, in certain instances an abstention or broker
non-vote can have the same effect as a negative vote.
SOLICITATION
The Company will bear the entire cost of solicitation, including the
preparation, assembly, printing and mailing of this Proxy Statement, the Proxy
and any additional soliciting materials sent to shareholders. The Company may
reimburse brokerage firms and other persons representing beneficial owners of
shares for their expenses in forwarding solicitation materials to such
beneficial owners. Proxies may also be solicited by certain of the Company's
directors, officers and regular employees, without additional compensation,
personally or by telephone or facsimile. Except as described above, the Company
does not currently intend to solicit proxies other than by mail.
<PAGE>
DEADLINE FOR RECEIPT OF SHAREHOLDER PROPOSALS FOR 1999 ANNUAL MEETING
Shareholder proposals intended to be considered at the 1999 Annual Meeting of
Shareholders must be received by the Company no later than February 26, 1999.
Such proposals may be included in next year's proxy statement if they comply
with certain rules and regulations promulgated by the Securities and Exchange
Commission ("SEC").
STOCK SPLIT
Unless the context otherwise requires, all share and per share amounts contained
in this Proxy Statement are adjusted to reflect a 3-for-2 stock split of the
Company's Common Stock made payable on October 13, 1997 to shareholders of
record as of September 22, 1997.
PROPOSAL NO. 1 - ELECTION OF DIRECTORS
NOMINEES
The Company's Bylaws provide that the Board of Directors shall be comprised of
between four (4) and seven (7) persons, with the exact number to be fixed by the
Board of Directors or shareholders. The currently authorized number of
directors is six (6). A board of six (6) directors is to be elected at the
Annual Meeting. Unless otherwise instructed, the proxy holders will vote the
proxies received by them for the six (6) nominees named below, all of whom are
currently directors of the Company.
The Company is not aware of any nominee who will be unable or will decline to
serve as a director. In the event that any such nominee is unable or declines
to serve as a director at the time of the Annual Meeting, the proxies will be
voted for any nominee who shall be designated by the present Board of Directors
to fill the vacancy. In the event that additional persons are nominated for
election as directors, the proxy holders intend to vote all proxies received by
them in such a manner in accordance with cumulative voting as will assure the
election of as many of the nominees listed below as possible, and, in such
event, the specific nominees to be voted for will be determined by the proxy
holders. The six (6) candidates receiving the highest number of affirmative
votes of the shares voting at the Annual Meeting will be elected directors of
the Company. The term of office of each person elected as a director will
continue until the next Annual Meeting of Shareholders or until such time as his
successor has been duly elected and qualified.
The names of the Company's nominees for director and certain information about
them are set forth below.
<TABLE>
<CAPTION>
NAME OF NOMINEE AGE PRINCIPAL OCCUPATION DIRECTOR SINCE
- --------------- --- -------------------- --------------
<S> <C> <C> <C>
A. George Battle(1)(2) 54 Senior Fellow, Aspen Institute and Retired Managing 1996
Partner of Market Development, Andersen Consulting
John F. Casey 55 Chairman of BARRA RogersCasey, Inc., an indirect 1996
wholly owned subsidiary of BARRA
M. Blair Hull(1)(2)(3) 55 Managing Principal of Hull Trading Company, L.L.C. 1992
Norman J. Laboe(3) 59 Of Counsel to Mackenzie & Albritton, LLP 1986
Ronald J. Lanstein(1)(2) 64 Vice Chairman of the Board of BARRA 1986
Andrew Rudd(3) 48 Chairman of the Board and Chief Executive Officer 1986
of BARRA
</TABLE>
- -------------------------
(1) Member of Audit Committee.
(2) Member of Compensation Committee.
(3) Member of Nominating Committee.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE SLATE OF
DIRECTORS PROPOSED BY THE BOARD OF DIRECTORS.
BUSINESS EXPERIENCE OF THE DIRECTORS
A. GEORGE BATTLE became a director of the Company in May 1996. Mr. Battle joined
the Company's Audit Committee and Compensation Committee in July 1996.
Mr. Battle served from 1968 until his retirement in June 1995 in various roles
of
2
<PAGE>
increasing responsibility with Andersen Consulting. At the time of his
retirement from Andersen Consulting, Mr. Battle was Managing Partner of Market
Development. He was also a member of Andersen Consulting's Executive Committee,
Global Management Council and Partner Income Committee. Prior to his position
as Managing Partner of Market Development, he served as Managing Partner of
North American Planning and Operations. Mr. Battle holds a B.A. in Economics
with highest distinction from Dartmouth College and an M.B.A. from the Stanford
Business School where he held McCarthy and University Fellowships. He is
currently a Senior Fellow at the Aspen Institute and a member of the boards of
directors of PeopleSoft, Inc., Fair Isaac Company, Masters Select Equity
Fund and Masters Select International Fund.
JOHN F. CASEY became a director of the Company following its acquisition of
Rogers, Casey & Associates, Inc. ("RogersCasey"), a wholly owned subsidiary
of BARRA, in July 1996. Mr. Casey has been associated with RogersCasey, an
investment consulting and special assets advisory firm, since its inception
in 1976. Mr. Casey served as President and Chief Executive Officer of
RogersCasey from 1989 until April 1998, when he became Chairman of BARRA
RogersCasey, Inc., a subsidiary of RogersCasey. Prior to founding
RogersCasey, he worked at Dreher Rogers & Associates, was founder of
investment manager research at Paine, Webber, Jackson & Curtis and served as
Director and manager of research at Callan Associates. Mr. Casey holds a
B.A. from Milton College.
M. BLAIR HULL has been a member of the Board of Directors of the Company since
July 1992. Mr. Hull also joined the Company's Audit Committee and Compensation
Committee in July 1992, and its Nominating Committee in April 1993. Mr. Hull is
the founder and Managing Principal of Hull Trading Company, L.L.C. Mr. Hull is
a member of the Illinois Institute of Technology's Financial Markets and Trading
Board of Advisors and is a member of the Advisory Committee of the Financial
Markets Research Center at Vanderbilt University. Mr. Hull became a market
maker and member of the Pacific Stock Exchange in 1977 and has been a member of
the CBOE since 1980. Mr. Hull also serves on the Board of Directors of Options
Clearing Corporation and the Cincinnati Stock Exchange. Mr. Hull holds an
M.B.A. from Santa Clara University.
NORMAN J. LABOE has served as a Director of the Company since September 1986 and
as a member of the Company's Nominating Committee since April 1993. He also
served on the Company's Audit Committee from February 1992 to July 1996. Since
April 1994, Mr. Laboe has been of counsel to the law firm of Mackenzie &
Albritton, LLP, where he specializes in corporate, securities and intellectual
property matters. From 1971 to April 1994, Mr. Laboe was a partner in the law
firm of Graham & James in San Francisco, California. Mr. Laboe graduated from
the University of Minnesota with degrees in business administration and law.
RONALD J. LANSTEIN has been associated with the Company and its predecessors
since 1978. Mr. Lanstein became Vice Chairman of the Company's Board of
Directors on November 16, 1993. Prior to that and until his retirement in
December 1993, Mr. Lanstein served as the Chief Financial Officer and a Vice
President of the Company. Mr. Lanstein has also served as a member of the
Company's Board of Directors since 1986, as a member of the Company's Audit
Committee since February 1992 and as a member of the Company's Compensation
Committee since January 1994. Mr. Lanstein holds an M.A. in Economics from the
University of California, Berkeley.
ANDREW RUDD has been associated with the Company and its predecessors since
1975. Dr. Rudd has served as the Chief Executive Officer of the Company and its
predecessors since 1984, as a member of the Board of Directors of the Company
since 1986 and as its Chairman since 1992. Dr. Rudd served on the Company's
Compensation Committee from July 1992 to January 1994 and on its Nominating
Committee since April 1993. Dr. Rudd also served as President of the Company
and its predecessors from 1984 to 1992. Between 1977 and 1982, Dr. Rudd was a
professor of finance and operations research at Cornell University in Ithaca,
New York. He holds a Ph.D. in Operations Research from the University of
California, Berkeley.
There are no family relationships among any of the directors or executive
officers of the Company. The members of the Board of Directors who are not
employees of the Company are reimbursed for expenses incurred in traveling to
meetings and receive $2,000 for each scheduled quarterly meeting and $500 for
each special meeting of the Board of Directors and its committees as
compensation for their services as directors. In addition, each director who
has been granted options to purchase the Company's Common Stock ("Directors
Options") pursuant to the BARRA, Inc. Directors Option Plan (the "Directors
Option Plan") is automatically granted on each anniversary date following the
initial grant of his or her Directors Options, so long as such director is
then in office, Directors Options to purchase 2,000 shares of Common Stock. All
Directors Options granted pursuant to such automatic granting provisions
are immediately exercisable, non-statutory options.
BOARD MEETINGS AND COMMITTEES
The Board of Directors of the Company held seven (7) meetings during the fiscal
year ended March 31, 1998. The Board of Directors has an Audit Committee, a
Compensation Committee and a Nominating Committee. During the fiscal year ended
March 31, 1998, each director attended or participated in 75% or more of the
aggregate of (i) all meetings of the Board of Directors held during the period
in which such director served and (ii) all meetings of committees of the Board
on which such director served.
3
<PAGE>
The Audit Committee of the Board of Directors currently consists of
Messrs. Battle, Hull and Lanstein. The Audit Committee recommends the
engagement of independent auditors, consults with the independent auditors
regarding the scope of annual audits and reviews the Company's system of
internal accounting controls. The Audit Committee met three (3) times during
the fiscal year ended March 31, 1998.
The Compensation Committee of the Board of Directors currently consists of
Messrs. Battle, Hull and Lanstein. The Compensation Committee ratifies the
compensation paid by the Company to its executive officers, administers,
grants options to purchase the Company's Common Stock ("Options") pursuant to
the BARRA, Inc. Stock Option Plan (the "Option Plan"), grants Directors
Options pursuant to the Directors Option Plan and administers the BARRA, Inc.
1996 Employee Stock Purchase Plan (the "ESPP") and the Rogers, Casey &
Associates, Inc. 1992 Stock Option Plan (the "RCA Plan"). The Compensation
Committee met four (4) times during the fiscal year ended March 31, 1998.
The Board of Directors has established a Nominating Committee to review and
recommend candidates for election to the Board of Directors. The Nominating
Committee consists of Messrs. Hull, Laboe and Rudd, but is not currently an
active committee and did not meet during the fiscal year ended March 31, 1998.
In the event that security holders of the Company recommend candidates to the
Board of Directors, it is expected that the full Board of Directors, not the
Nominating Committee, will consider such recommendations.
PRINCIPAL SHAREHOLDERS AND SHARE OWNERSHIP BY MANAGEMENT
The following table sets forth certain information known to the Company relating
to the beneficial ownership of the Company's Common Stock by (i) each person who
is known by the Company to be the beneficial owner of more than 5% of the
outstanding shares of Common Stock, (ii) each executive officer named in the
tables set forth under "Executive Compensation," (iii) each director, and
(iv) all executive officers and directors as a group, as of June 8, 1998:
<TABLE>
<CAPTION>
Number of
Name Address Shares Owned(1) Percent(2)
- ---- ------- --------------- ----------
<S> <C> <C> <C>
Andrew Rudd(3) c/o BARRA, Inc. 2,839,998 20.56%
2100 Milvia Street
Berkeley, California 94704
Edward D. Baker 395 Hampton Road 1,006,950 7.31%
Piedmont, California 94611
Ronald J. Lanstein(4) N/A 540,750 3.92%
C.E. Beckers(5) N/A 536,844 3.88%
Kamal Duggirala(6) N/A 518,100 3.74%
John F. Casey(7) N/A 301,983 2.19%
Ronald N. Kahn(8) N/A 111,620 *
Claes Lekander(9) N/A 105,120 *
A. George Battle(10) N/A 19,750 *
M. Blair Hull(11) N/A 35,000 *
Norman J. Laboe(12) N/A 12,500 *
All executive officers and N/A 5,571,127 38.81%
directors as a group
(15 persons)(13)
</TABLE>
- -------------------------
* Less than 1.0%.
(1) Except as indicated in the chart and its related footnotes and pursuant to
applicable community property laws, the Company believes that all persons
named in the table have sole voting and investment power with respect to
all shares of Common Stock beneficially owned by them.
4
<PAGE>
(2) Percentage of shares of Common Stock beneficially owned is based on a total
of 13,777,061 shares of Common Stock outstanding as of June 8, 1998 plus
securities deemed outstanding pursuant to the Option Plan and the Directors
Option Plan that are currently exercisable or that will become exercisable
within 60 days of June 8, 1998 for the percentage computed for each person
or group listed in the table. There are no options to purchase Common
Stock pursuant to the ESPP or the RCA Plan that are held by any person or
group listed in the table and that will become exercisable within 60 days
of June 8, 1998.
(3) Of the 2,839,998 shares of Common Stock beneficially owned by Dr. Rudd,
2,644,250 shares are held of record by the Rudd Family Trust, dated
September 12, 1997, which was formed for the benefit of Dr. Rudd and his
wife Virginia Rudd, each of whom are trustees of the Rudd Family Trust,
and for the benefit of certain other members of the Rudd family, 37,500
shares are issuable pursuant to the exercise of Options granted to
Dr. Rudd pursuant to the Option Plan that are currently exercisable or that
will become exercisable within 60 days after June 8, 1998, 72,300 shares
are held in the Cann 1997 Trust, dated January 10, 1997, which was formed
for the benefit of Dr. Rudd's four children with Dr. Rudd's brother and
brother-in-law as trustees, 48,448 shares are held in trust under the
California Uniform Transfers to Minors Act for Dr. Rudd's four children,
and 37,500 shares are held in the Rudd Family Foundation with Dr. Rudd and
his wife acting as trustees thereof. Dr. Rudd has disclaimed
beneficial ownership of the 72,300 shares held in the Cann 1997 Trust and
the 48,448 shares held in the California Uniform Transfers to Minors Act
for the benefit of his children.
(4) Includes 1,500 shares issuable pursuant to the exercise of Options granted
to Mr. Lanstein pursuant to the Option Plan and 3,500 shares issuable
pursuant to the exercise of Directors Options granted to Mr. Lanstein
pursuant to the Directors Option Plan that are currently exercisable or
that will become exercisable within 60 days after June 8, 1998. All of the
shares of Common Stock attributed to Mr. Lanstein are held of record by him
with his wife in joint tenancy with right of survivorship.
(5) Of the 536,785 shares of Common Stock beneficially owned by Dr. Beckers,
457,500 are held of record by Dr. Beckers and his wife in joint tenancy
with right of survivorship, 685 shares are held of record solely by Dr.
Beckers and 78,600 shares are issuable pursuant to the exercise of Options
granted to Dr. Beckers pursuant to the Option Plan that are currently
exercisable or that will become exercisable within 60 days after June 8,
1998.
(6) Of the 518,100 shares of Common Stock beneficially owned by Mr. Duggirala,
105,000 shares are held of record by Mr. Duggirala, 352,500 shares are held
by Mr. Duggirala and his wife in joint tenancy with right of survivorship,
and 60,600 shares are issuable pursuant to the exercise of Options granted
pursuant to the Option Plan that are currently exercisable or that will
become exercisable within 60 days after June 8, 1998.
(7) Of the 301,983 shares of Common Stock listed, 200,793 are held of record
and beneficially owned by Mr. Casey and 101,190 are held of record and
beneficially owned by Bridget A. Casey, Mr. Casey's wife. 75,000 shares
held of record and beneficially owned by Mr. Casey have been pledged by
Mr. Casey as security (the "Pledge") for a loan made to him by Royal Bank
of Canada ("RBC"). The Pledge is part of an arrangement between Mr. Casey
and RBC, which provides him with liquidity without giving up title or the
voting rights to the 75,000 shares. The 75,000 shares are subject to a
Cashless European Style Collar Option, which expires on January 15, 1999
and which involved the purchase by Mr. Casey of a protective put option on
the 75,000 shares with a strike price of $17.8234 per share and the sale by
him of a call option on the 75,000 shares with a strike price of $21.50096
per share, which fully offset the premium due on the put option.
(8) Of the 111,620 shares of Common Stock beneficially owned by Dr. Kahn,
30,000 shares are held of record by Dr. Kahn, 81,320 shares are issuable
pursuant to the exercise of Options granted to Dr. Kahn pursuant to the
Option Plan that are currently exercisable or that will become exercisable
within 60 days after June 8, 1998, and 300 shares are held in trusts
established under the California Uniform Transfers to Minors Act for
Dr. Kahn's two children. Dr. Kahn has disclaimed beneficial ownership of
the shares held in trust for his children.
(9) Of the 105,120 share of Common Stock beneficially owned by Mr. Lekander,
900 shares are held in trusts established under the California Uniform
Transfers to Minors Act for Mr. Lekander's niece and two nephews, and
82,620 shares are issuable pursuant to the exercise of Options granted to
Mr. Lekander pursuant to the Option Plan that are currently exercisable or
that will become exercisable within 60 days after June 8, 1998.
5
<PAGE>
(10) Includes 1,500 shares issuable pursuant to the exercise of Options granted
to Mr. Battle pursuant to the Option Plan and 3,500 shares issuable
pursuant to the exercise of Directors Options granted to Mr. Battle
pursuant to the Directors Option Plan that are currently exercisable or
that will become exercisable within 60 days after June 8, 1998. Of the
19,750 shares of Common Stock beneficially owned by Mr. Battle, 14,000 are
held of record by Mr. Battle and 750 shares are held in the Daniel KW
Battle Trust, which was formed in 1996 for the benefit of Mr. Battle's son
with Mr. Battle as trustee. Mr. Battle has disclaimed beneficial
ownership of the shares held in trust for his son.
(11) Of the 35,000 shares of Common Stock beneficially owned by Mr. Hull, 15,000
shares are held of record by Mr. Hull and 15,000 shares are held of record
by Mr. Hull and his ex-wife in joint tenancy with right of survivorship.
In addition, the 35,000 shares listed include 1,500 shares issuable
pursuant to the exercise of Options granted to Mr. Hull pursuant to the
Option Plan and 3,500 shares issuable pursuant to the exercise of Directors
Options granted to Mr. Hull pursuant to the Directors Option Plan that are
currently exercisable or that will become exercisable within 60 days after
June 8, 1998.
(12) Includes 1,500 shares issuable pursuant to the exercise of Options granted
to Mr. Laboe pursuant to the Option Plan and 3,500 shares issuable pursuant
to the exercise of Directors Options granted to Mr. Laboe pursuant to the
Directors Option Plan that are currently exercisable or that will become
exercisable within 60 days after June 8, 1998.
(13) Includes 564,680 shares issuable pursuant to the exercise of Options
granted pursuant to the Option Plan and 14,000 shares issuable pursuant to
the exercise of Directors Options granted pursuant to the Directors Option
Plan that are currently exercisable or that will become exercisable within
60 days after June 8, 1998.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), requires the Company's directors and executive officers, and persons who
own more than ten percent (10%) of a registered class of the Company's equity
securities, to file with the SEC initial reports of ownership and reports of
changes in ownership of Common Stock and other equity securities of the Company.
Officers, directors and greater than ten percent beneficial owners are required
by SEC regulation to furnish the Company with copies of all reports they file
under Section 16(a).
To the Company's knowledge, based solely on its review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, all Section 16(a) filing requirements applicable to its
executive officers, directors and greater than ten percent beneficial owners
were complied with during the fiscal year ended March 31, 1998, except that
(i) a Form 3 was filed late reporting the ownership of 1,752,350 shares of
Common Stock of the Company beneficially owned by the Rudd Family Trust and
Virginia Rudd, a co-trustee of the Rudd Family Trust, when such shares of Common
Stock of the Company beneficially owned by Andrew Rudd were transferred to the
Rudd Family Trust on October 1, 1997, (ii) a Form 4 was filed late reporting the
open market sale of 10,000 shares of Common Stock of the Company by Ronald J.
Lanstein on May 15, 1997 and (iii) a Form 5 was filed disclosing a late report
of the private transfer of 10,000 shares of Common Stock of the Company by A.
George Battle effective as of October 6, 1997.
6
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table provides certain summary information concerning compensation
paid or accrued by the Company to or on behalf of the Company's Chief Executive
Officer and each of the four (4) other most highly compensated executive
officers (collectively, the "Named Officers") of the Company (determined as of
the end of the last fiscal year), during the fiscal years ended March 31, 1996,
1997 and 1998:
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
-------------------------- LONG TERM
ANNUAL COMPENSATION(1) COMPENSATION
------------------------------------------------------- -------------
OTHER SHARES
NAME AND ANNUAL UNDERLYING
PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION($) OPTIONS(#)(2)
- ------------------ ---- --------- -------- --------------- -------------
<S> <C> <C> <C> <C> <C>
Andrew Rudd 1998 225,000 367,500 N/A 37,500
Chairman and Chief 1997 225,000 525,000 N/A 0
Executive Officer 1996 225,000 375,000 N/A 22,500
C.E. Beckers(3) 1998 165,510 281,250 N/A 32,250
President of BARRA 1997 188,234 375,000 N/A 0
International, Ltd. 1996 185,920 275,000 N/A 15,000
Kamal Duggirala 1998 175,000 281,250 N/A 32,250
President 1997 175,000 375,000 N/A 0
1996 168,750 250,000 N/A 52,500
Ronald N. Kahn 1998 175,000 200,000 N/A 5,000
Vice President and 1997 175,000 200,000 N/A 22,500
Director of Research 1996 166,250 120,000 N/A 7,050
Claes Lekander 1998 160,000 250,000 N/A 20,000
Vice President and Director 1997 160,000 190,000 N/A 22,500
of Equity Manager Services 1996 160,000 125,000 N/A 0
</TABLE>
- -------------------------
(1) Includes amounts deferred under the Company's 401(k) Plan.
(2) All "Options" granted to date under the Option Plan are non-statutory
options.
(3) A portion of Dr. Beckers' cash compensation is not paid in U.S. Dollars.
For this Compensation Table, that portion of Dr. Beckers' cash compensation
has been converted into U.S. Dollars at applicable month-end exchange
rates.
7
<PAGE>
STOCK OPTION GRANT
The table set forth below contains information concerning grants of Options to
the Named Officers during the fiscal year ended March 31, 1998:
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
--------------------------------- Potential Realizable
Value at Assumed
Annual Rates of Stock
Price Appreciation for
Individual Grants Option Term(1)
------------------------------------------------------------- ---------------------------
Number of % of Total
Shares Options
Underlying Granted to Exercise
Options Employees in Price(3) Expiration
Name Granted(#)(2) Fiscal Year ($/share) Date 5%($) 10%($)
- ---- ------------- ------------ --------- ---------- ------- ---------
<S> <C> <C> <C> <C> <C> <C>
Andrew Rudd(4) 37,500 6.75 18.3333 04/24/02 110,178 319,072
C.E. Beckers(5) 32,250 5.80 22.6667 08/01/07 459,719 1,174,057
Kamal Duggirala(5) 32,250 5.80 22.6667 08/01/07 459,723 1,165,027
Ronald N. Kahn(6) 5,000 0.90 26.2500 01/30/08 82,542 209,178
Claes Lekander(6) 20,000 3.60 26.2500 01/30/08 330,167 836,714
</TABLE>
- -------------------------
(1) Gains are reported net of the Option exercise price but before taxes
associated with exercise. These amounts represent certain assumed rates of
appreciation of 5% and 10% only. Actual gains, if any, on Option exercises
are dependent on future performance of the Common Stock, as well as the
optionee's continued employment through the vesting period.
(2) The Options each become exercisable in five equal annual installments
beginning on the first anniversary of the date of the grant. Except for
the Options granted to Dr. Rudd (which expire five years from the date of
grant), all Options expire ten years and a day from the date of grant.
(3) The exercise price of each Option is based upon the midpoint between the
bid and ask prices of the Company's Common Stock as quoted on The Nasdaq
National Market System ("NASDAQ") on the date of the grant, or if NASDAQ is
closed on the date of grant, the next day that NASDAQ is open, or if no
such prices are quoted on NASDAQ on the date of grant, on the last
preceding date on which such prices were quoted on NASDAQ ("FMV"). Except
for all of the Options granted to Dr. Rudd (which were granted with an
exercise price of 110% of FMV), all other Options granted to Named Officers
were granted with an exercise price of 100% of FMV.
(4) Options listed were granted on April 24, 1997.
(5) Options listed were granted on July 31, 1997.
(6) Options listed were granted on January 29, 1998.
8
<PAGE>
OPTION EXERCISES AND YEAR-END HOLDINGS
The following table provides information with respect to the Named Officers
concerning the exercise of Options during the last fiscal year and unexercised
Options held as of March 31, 1998 (the end of the Company's last fiscal year):
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
-----------------------------------------------
Number of Shares Value of Unexercised
Underlying Unexercised In-the-Money
Options at Fiscal Options at Fiscal
Year End(#) Year End($)(1)
---------------------------- ----------------------------
Shares
Acquired on Value
Name Exercise(#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- ----------- ----------- ------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Andrew Rudd 85,500 2,109,613 -- 102,000 -- 1,892,389
C.E. Beckers -- -- 54,900 63,600 1,278,350 917,648
Kamal Duggirala -- -- 44,400 74,100 947,600 1,034,649
Ronald N. Kahn -- -- 86,610 36,590 1,898,446 514,186
Claes Lekander -- -- 81,210 49,490 1,798,946 501,686
</TABLE>
- ------------------------
(1) Based on the closing price of a share of Common Stock of $28.50 as reported
on NASDAQ on such date less the exercise price.
COMPENSATION COMMITTEE INTERLOCKS, INSIDER PARTICIPATION AND OTHER TRANSACTIONS
During the fiscal year ended March 31, 1998, the Compensation Committee of the
Board of Directors was comprised of Messrs. Battle, Hull and Lanstein, who are
each members of the Company's Board of Directors and who are not currently
executive officers of the Company.
During the fiscal year ended March 31, 1998, actions concerning executive
compensation were deliberated and taken by the entire Board of Directors of the
Company, as well as by the Compensation Committee. Of the Company's executive
officers during the fiscal year ended March 31, 1998, Dr. Rudd and Mr. Casey
participated, as members of the Board of Directors, in deliberations by the
Board of Directors concerning certain executive compensation for the fiscal year
ended March 31, 1998.
On April 15, 1994, Norman J. Laboe, a director of the Company, became of counsel
to the law firm of Mackenzie & Albritton, LLP, which received an aggregate of
approximately $167,500 in fees and expenses from the Company during the fiscal
year ended March 31, 1998 and which has also been retained by the Company during
the current fiscal year. Prior to that Mr. Laboe was a partner of Graham &
James, which was and is currently retained by the Company.
M. Blair Hull, a director of the Company, is the Managing Principal of Hull
Trading Company LLC ("Hull Trading"). During the fiscal year ended March 31,
1998, BARRA and its affiliates received an aggregate of approximately $205,500
in revenue from certain proprietary software and related data licensed to Hull
Trading and its affiliates.
A. George Battle provides certain consulting services from time to time as
requested by the Company. During the fiscal year ended March 31, 1998, Mr.
Battle received an aggregate of approximately $37,959 in fees and expenses from
the Company in connection with such consulting services.
On January 31, 1997, Messrs. Battle, Lanstein, Laboe and Hull (none of whom
are employees of the Company or its subsidiaries) were each granted Options
to purchase 7,500 shares of Common Stock at an exercise price of $17.83333
(100% of FMV). The Options each become exercisable in five equal annual
installments beginning on the first anniversary date of the grant. All
Options expire ten years and a day from the date of grant. Effective as of
April 24, 1997, Messrs. Battle, Lanstein, Laboe and Hull were each granted
Directors Options under the Directors Option Plan to purchase 7,500 shares of
Common Stock at an exercise price of $16.6667 (100% of FMV). Such Directors
Options each become exercisable in five equal annual installments beginning
on the first anniversary date of the grant. In addition, effective as of
April 24, 1998, Messrs. Battle, Lanstein, Laboe and Hull were each granted
Directors Options pursuant to certain automatic granting provisions of the
Directors Option Plan to
9
<PAGE>
purchase 2,000 shares of Common Stock at an exercise price of $26.719 (100%
of FMV), and all of such Directors Options are each immediately exercisable.
All such Directors Options are non-statutory options and expire ten years and
a day from the date of grant.
On July 24, 1996, BARRA consummated a definitive Agreement of Merger and Plan
of Reorganization (the "RCA Merger Agreement") with RogersCasey. Pursuant to
the RCA Merger Agreement, BARRA issued 722,046 shares of its Common Stock and
options for the purchase of 45,386 shares of its Common Stock pursuant to the
RCA Plan in return for all of the issued and outstanding capital stock of
RogersCasey. On July 25, 1996, BARRA increased the size of its Board of
Directors from five (5) to six (6) and elected John F. Casey to fill the
newly created position, pursuant to an understanding between BARRA and
RogersCasey. Prior to BARRA's cancellation of the policy in December 1997,
RogersCasey had paid approximately $4,000 per year in premiums on a life
insurance policy for Mr. Casey which included a death benefit of $1,000,000
that would have been payable to Mr. Casey's wife.
REPORT OF THE COMPENSATION COMMITTEE AND
OF THE BOARD OF DIRECTORS ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors (the "Compensation
Committee") is currently comprised of three (3) members of the Board of
Directors and is responsible for evaluating the Company's executive
compensation philosophies and monitoring and approving base salary and
incentive compensation programs for executive management, including Option
Plan awards and payouts under the Company's annual cash bonus plan. In
general, a committee of the Company's senior management (the "Executive
Committee") provides recommendations to the Compensation Committee regarding:
(a) the aggregate amount to be awarded under the Company's incentive
compensation programs; (b) the base salaries and bonuses for all executive
officers other than the Chief Executive Officer and (c) Option Plan awards
for all employees These recommendations are based upon the compensation
philosophies articulated below, which have been adopted by the Compensation
Committee. For the fiscal year ended March 31, 1998, the Executive Committee
was comprised of Andrew Rudd, Kamal Duggirala, Robert L. Honeycutt and James
D. Kirsner, the Company's Chief Executive Officer, President, Chief Operating
Officer and Chief Financial Officer, respectively, C.E. Beckers, the
President of BARRA International, Ltd., the Company's wholly-owned
subsidiary, and Andrew Huddart, the head of the Company's Investment Data
Products Division.
All determinations regarding the base salary and bonus of the Company's Chief
Executive Officer are made by the Compensation Committee and approved by the
Board of Directors. The overall amount to be awarded under BARRA's annual bonus
program is also ratified by the Company's Board of Directors.
The Company's compensation philosophy continues to recognize that there is a
strong link between executive compensation, the value received by shareholders
and the need to maintain a compensation program which will enable the Company to
attract, retain, incent and reward executive officers who are likely to
contribute to the long term success of BARRA. That philosophy involves the
following three forms of compensation:
1. BASE SALARIES. The base salaries of all of BARRA's executive officers,
including its Chief Executive Officer, are established on the basis of the
qualifications and experience of the individual executive. Historically, the
base salaries of BARRA executives have been kept below the levels of salaries
for comparable positions with other entities with the annual bonus program
providing the necessary equalizing factor. Most executive base salaries have
not been adjusted during the past two or more fiscal years and the executive
base salaries remain well below market levels. Base salaries are reviewed
annually and adjustments, if any, are effective in July.
2. MANAGEMENT BONUS PROGRAM. The Company's annual bonus plan has historically
provided substantial rewards for individual executive officers and, along with
such executives' base salary, has been designed so that each individual
officer's overall compensation is competitive and commensurate with individual
qualitative performance and the value returned to the Company and its
shareholders as a result of such performance. In general, short-term cash
incentives are based on the Company's performance targets, business area or
departmental performance and individual performance. The awards made for the
fiscal year ended March 31, 1998 to the Company's executive officers reflect
that: (a) the Company's consolidated after tax net income, excluding one-time
acquisition charges for fiscal 1998, increased 22% over the net income of the
previous year, and was consistent with, but did not exceed, the plan for the
year; (b) the after tax return on beginning shareholders' equity for fiscal 1998
was 37%, and (c) the price of the Company's Common Stock increased from $18.00
per share at March 31, 1997 to $28.50 per share at March 31, 1998, an increase
of 58%.
3. STOCK OPTION AWARDS. Long-term incentives in the form of Option Plan
awards recognize on-going contributions by the Company's senior and middle
management to augmenting BARRA's value. Accordingly, these awards are primarily
based upon executive position within the Company and relative base salary, but
also depend upon sustained levels of performance over time.
10
<PAGE>
BOARD OF DIRECTORS
A. George Battle* John F. Casey M. Blair Hull*
Norman J. Laboe Ronald J. Lanstein* Andrew Rudd
- -------------------------
* Member of the Compensation Committee
PERFORMANCE GRAPH
Set forth below is a graph indicating cumulative monthly return* (determined at
the end of each month) for the five-year period ended March 31, 1998 on $100
invested alternatively in the Company's Common Stock, the Frank Russell 2000
Index and the Nasdaq Computer & Data Processing Index on March 31, 1993.
<TABLE>
<CAPTION>
Measurement Period FRANK RUSSELL NASDAQ COMPUTER &
(Fiscal Year Covered) BARRA, INC. 2000 INDEX DATA PROCESSING INDEX
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Measurement Pt-03/31/98 $100 $100 $100
FYE 03/31/94 $ 89 $111 $102
FYE 03/31/95 $111 $117 $138
FYE 03/31/96 $210 $151 $196
FYE 03/31/97 $300 $158 $214
FYE 03/31/98 $475 $230 $374
</TABLE>
- -------------------------
*Total return assumes reinvestment of dividends.
PROPOSAL NO. 2 - REINCORPORATION IN STATE OF DELAWARE
INTRODUCTION
On April 23, 1998, the Board of Directors unanimously approved a proposal to
change the Company's state of incorporation from the State of California to
the State of Delaware (the "Reincorporation Proposal" or the "Proposed
Reincorporation"). For the reasons set forth below, the Board of Directors
believes that the best interests of the Company and its shareholders will be
served by changing the state of incorporation of the Company from California
to Delaware. SHAREHOLDERS ARE URGED TO READ CAREFULLY THE FOLLOWING SECTIONS
OF THIS PROXY STATEMENT, INCLUDING THE RELATED EXHIBITS REFERENCED BELOW AND
ATTACHED TO THIS PROXY STATEMENT, BEFORE VOTING ON THE REINCORPORATION
PROPOSAL. Throughout the Proxy Statement, the terms "the Company" and "BARRA
California" refer to the existing California corporation and the term "BARRA
Delaware" refers to BARRA (DE), Inc., a Delaware corporation which is a
wholly-owned subsidiary of BARRA California and the proposed successor to
BARRA California.
As discussed below, the principal reasons for the Proposed Reincorporation
are the greater flexibility of Delaware corporate law, the substantial body
of case law interpreting that law and the increased ability of the Company to
attract and
11
<PAGE>
retain qualified directors. The Company believes that its shareholders will
benefit from the well established principles of corporate governance that
Delaware law affords. Except for (a) the increase in the Company's authorized
number of shares of Common Stock (assuming shareholder approval of Proposal
No. 3 to this Proxy Statement), (b) the change in the par value per share of
Common Stock from no par value per share to $.0001 per share, (c) the
elimination of shareholder action by written consent, (d) the elimination of
the right of shareholders controlling at least ten percent (10%) of the
voting shares to call a special meeting of the shareholders, (e) the
elimination of the right of shareholders to cumulate their votes and (f)
changes that are dictated by the application of Delaware law, the proposed
BARRA Delaware Certificate of Incorporation and Bylaws are substantially
similar to those currently adopted by BARRA California. See "Significant
Differences Between the Charter Documents and Bylaws of BARRA California and
BARRA Delaware" below. The Reincorporation Proposal is not in response to any
present attempt known to the Board of Directors to acquire control of the
Company, obtain representation of the Board of Directors or take significant
action that affects the Company.
The Proposed Reincorporation would be accomplished through the merger (the
"Merger") of the Company with and into BARRA Delaware pursuant to an
Agreement and Plan of Merger (the "Merger Agreement"), a copy of which is
attached as Exhibit A to this Proxy Statement. The Proposed Reincorporation
will not result in any change in the Company's business, assets or
liabilities, will not cause its corporate headquarters to be moved and will
not result in any relocation of management or other employees. Upon
completion of the Merger, BARRA California will cease to exist and BARRA
Delaware will continue to operate the business of the Company under the name
"BARRA, Inc."
On the effective date of the Proposed Reincorporation, each outstanding share
of Common Stock of the Company will automatically convert into one share of
Common Stock of BARRA Delaware and shareholders of the Company will
automatically become stockholders of BARRA Delaware. Shares of BARRA
Delaware's Common Stock will not have preemptive rights and will not be
subject to assessment. All shares of BARRA Delaware's Common Stock to be
issued in the reincorporation will be fully paid and nonassessable. As
holders of stock in a Delaware corporation, the BARRA Delaware stockholders
will have the rights provided by Delaware law, BARRA Delaware's Certificate
of Incorporation and BARRA Delaware's Bylaws. See "Significant Differences
Between the Corporation Laws of California and Delaware" below.
In addition, each outstanding option or other right to acquire shares of
Common Stock of the Company will be converted into an option, warrant or
right to acquire an equal number of shares of Common Stock of BARRA Delaware,
under the same terms and conditions as the original options, warrants or
rights. All of the Company's employee benefit and option plans, including the
Option Plan, the ESPP, the Directors Option Plan and the RCA Plan will be
adopted and continued by BARRA Delaware following the Proposed
Reincorporation. Shareholders should recognize that approval of the Proposed
Reincorporation will constitute approval of the adoption and assumption of
those plans by BARRA Delaware.
As of the effective date of the Proposed Reincorporation, BARRA Delaware will
enter into new indemnification agreements with each of its directors and
certain of its officers in the form attached to this Proxy Statement as
Exhibit D (the "BARRA Delaware Indemnification Agreements"), and such
agreements will be governed by Delaware law. See "Significant Differences
Between the Corporation Laws of California and Delaware -Indemnification and
Limitation of Liability" below. Shareholders should recognize that approval
of the Proposed Reincorporation will constitute approval of the BARRA
Delaware Indemnification Agreements.
The Common Stock of BARRA California is authorized for quotation on NASDAQ,
and after the Merger BARRA Delaware's Common Stock will continue to be traded
on NASDAQ without interruption under the same symbol ("BARZ") as the shares
of BARRA California Common Stock are traded thereunder prior to the Merger.
BARRA California currently has effective registration statements under the
Securities Act of 1933, as amended, under which shares of BARRA California
Common Stock are issuable upon the exercise of stock options granted under
the Option Plan, the Directors Option Plan, the ESPP and the RCA Plan. The
Company intends to file amendments to such registration statements to
continue the registration of shares of BARRA Delaware Common Stock issuable
under such plans.
Each outstanding certificate representing shares of Company Common Stock will
continue to represent the same number of shares of BARRA Delaware's Common
Stock until submitted to BARRA Delaware at the time of next transfer by the
shareholder. IT WILL NOT BE NECESSARY FOR SHAREHOLDERS OF THE COMPANY TO
EXCHANGE THEIR EXISTING STOCK CERTIFICATES FOR STOCK CERTIFICATES OF BARRA
DELAWARE.
Chase Mellon Shareholder Services, L.L.C., which is the transfer agent and
registrar for BARRA California, will act as transfer agent and registrar for
BARRA Delaware.
Under California law, the affirmative vote of a majority of the outstanding
shares of Common Stock of BARRA California is required for approval of the
Merger Agreement and the other terms of the Proposed Reincorporation. The
Proposed Reincorporation has been unanimously approved by BARRA California's
Board of Directors. If approved by the shareholders, it is anticipated that
the Merger will become effective as soon as practicable (the "Effective
Date") following the Annual Meeting. However, pursuant to the Merger
Agreement, the Merger may be abandoned or the Merger Agreement
12
<PAGE>
may be amended by the Board of Directors (except that the principal terms may
not be amended without shareholder approval) either before or after shareholder
approval has been obtained and prior to the Effective Date of the Proposed
Reincorporation if, in the opinion of the Board of Directors of either company,
circumstances arise which make it inadvisable to proceed under the original
terms of the Merger Agreement. Shareholders of BARRA California will have no
dissenters' rights of appraisal with respect to the Merger.
The discussion set forth below is qualified in its entirety by reference to
the Merger Agreement, the Certificate of Incorporation of BARRA Delaware (the
"BARRA Delaware Certificate of Incorporation"), the Bylaws of BARRA Delaware
(the "BARRA Delaware Bylaws") and the BARRA Delaware Indemnification
Agreements, the forms of which are attached hereto as Exhibits A, B, C and D,
respectively.
APPROVAL BY SHAREHOLDERS OF THE PROPOSED REINCORPORATION WILL CONSTITUTE
APPROVAL OF THE MERGER AGREEMENT, THE BARRA DELAWARE CERTIFICATE OF
INCORPORATION, THE BARRA DELAWARE BYLAWS, THE BARRA DELAWARE INDEMNIFICATION
AGREEMENTS AND THE ASSUMPTION OF BARRA CALIFORNIA'S EMPLOYEE BENEFIT AND
OPTION PLANS, INCLUDING, WITHOUT LIMITATION, THE OPTION PLAN, THE ESPP, THE
DIRECTORS OPTION PLAN AND THE RCA PLAN BY BARRA DELAWARE.
PRINCIPAL REASONS FOR THE PROPOSED REINCORPORATION
As the Company plans for the future, the Board of Directors and management
believe that it is essential to be able to draw upon well established principles
of corporate governance in making legal and business decisions. The prominence
and predictability of Delaware corporate law provide a reliable foundation on
which the Company's governance decisions can be based and the Company believes
that shareholders will benefit from the responsiveness of Delaware corporate law
to their needs and to those of the corporation they own.
PROMINENCE, PREDICTABILITY AND FLEXIBILITY OF DELAWARE LAW. For many years
Delaware has followed a policy of encouraging incorporation in that state
and, in furtherance of that policy, has been a leader in adopting, construing
and implementing comprehensive, flexible corporate laws responsive to the
legal and business needs of corporations organized under its laws. Many
corporations have chosen Delaware initially as a state of incorporation or
have subsequently changed corporate domicile to Delaware in a manner similar
to that proposed by the Company. Because of Delaware's prominence as the
state of incorporation for many major corporations, both the legislature and
courts in Delaware have demonstrated an ability and a willingness to act
quickly and effectively to meet changing business needs. The Delaware courts
have developed considerable expertise in dealing with corporate issues and a
substantial body of case law has developed construing Delaware law and
establishing public policies with respect to corporate legal affairs.
WELL ESTABLISHED PRINCIPLES OF CORPORATE GOVERNANCE. There is substantial
judicial precedent in the Delaware courts as to the legal principles
applicable to measures that may be taken by a corporation and as to the
conduct of the Board of Directors under the business judgment rule. The
Company believes that its shareholders will benefit from the well established
principles of corporate governance that Delaware law affords.
INCREASED ABILITY TO ATTRACT AND RETAIN QUALIFIED DIRECTORS. Both California
and Delaware law permit a corporation to include a provision in its charter
document which reduces or limits the monetary liability of directors for
breaches of fiduciary duty in certain circumstances. The increasing frequency
of claims and litigation directed against directors and officers has greatly
expanded the risks facing directors and officers of corporations in
exercising their respective duties. The amount of time and money required to
respond to such claims and to defend such litigation can be substantial. It
is the Company's desire to reduce these risks to its directors and officers
and to limit situations in which monetary damages can be recovered against
directors so that the Company may continue to attract and retain qualified
directors who otherwise might be unwilling to serve because of the risks
involved. The Company believes that, in general, Delaware law provides
greater protection to directors than California law and that Delaware case
law regarding a corporation's ability to limit director liability is more
developed and provides more guidance than California law.
NO CHANGE IN THE NAME, BOARD MEMBERS, BUSINESS, MANAGEMENT, EMPLOYEE PLANS OR
LOCATION OF CORPORATE HEADQUARTERS OF THE COMPANY
In connection with the Proposed Reincorporation, the authorized number of shares
of the Company's Common Stock will be increased from 40,000,000 to 75,000,000,
subject to shareholder approval of Proposal No. 3. If the Reincorporation
Proposal is approved by the shareholders but the proposed Amendment is not
adopted, the number of authorized shares of Common Stock set forth in the
Delaware Certificate of Incorporation will be 40,000,000. In addition, the
Proposed Reincorporation will effect a change in the legal domicile of the
Company and certain other changes of a legal nature, certain of which are
described in this Proxy Statement. The Proposed Reincorporation will NOT result
in any change in the name, business, management, fiscal year, employee plans,
assets or liabilities (except to the extent of legal and other
13
<PAGE>
costs of affecting the reincorporation) or location of the corporate
headquarters of the Company. The six (6) directors who are elected at the Annual
Meeting will become the directors of BARRA Delaware. All employee benefit and
option plans of BARRA California, including, without limitation, the Option
Plan, the ESPP, the Directors Option Plan and the RCA Plan will be assumed and
continued by BARRA Delaware. Each option or right issued pursuant to such plans
will automatically be converted into an option or right to purchase the same
number of shares of Common Stock of BARRA Delaware, at the same price per share,
upon the same terms, and subject to the same conditions. Shareholders should
note that approval of the Reincorporation Proposal will also constitute approval
of the assumption of these plans by BARRA Delaware. Other employee benefit
arrangements of BARRA California will also be continued by BARRA Delaware upon
the terms and subject to the conditions currently in effect. As noted above,
after the Merger the shares of Common Stock of BARRA Delaware will continue to
be traded, without interruption, in the same principal market and under the same
symbol ("BARZ") as the shares of Common Stock of BARRA California are traded
under prior to the Merger.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The Merger provided for in the Merger Agreement is intended to be a tax free
reorganization under the Internal Revenue Code of 1986, as amended. Assuming
the Merger qualifies as a reorganization, no gain or loss will be recognized
to the holders of capital stock of the Company as a result of consummation of
the Proposed Reincorporation, and no gain or loss will be recognized by the
Company or BARRA Delaware. Each former holder of capital stock of the Company
will have the same basis in the capital stock of BARRA Delaware received by
such holder pursuant to the Proposed Reincorporation as such holder has in
the capital stock of the Company held by such holder at the time of
consummation of the Merger. Each shareholder's holding period with respect to
BARRA Delaware's capital stock will include the period during which such
holder held the corresponding Company capital stock, provided the latter was
held by such holder as a capital asset at the time of consummation of the
Merger. The Company has not obtained a ruling from the Internal Revenue
Service or an opinion of legal or tax counsel with respect to the
consequences of the Proposed Reincorporation.
The foregoing is only a summary of certain federal income tax consequences.
SHAREHOLDERS SHOULD CONSULT THEIR OWN TAX ADVISERS REGARDING THE SPECIFIC TAX
CONSEQUENCES TO THEM OF THE MERGER AND THE PROPOSED REINCORPORATION,
INCLUDING THE APPLICABILITY OF THE LAW OF ANY LOCAL, STATE, FOREIGN OR OTHER
JURISDICTION.
SIGNIFICANT DIFFERENCES BETWEEN THE CHARTER DOCUMENTS AND BYLAWS OF BARRA
CALIFORNIA AND BARRA DELAWARE
SHAREHOLDER ACTION BY WRITTEN CONSENT. Under California and Delaware law,
unless specifically prohibited by the articles or certificate of
incorporation, shareholders may take action by written consent in lieu of a
shareholder meeting by the written consent of the holders of at least the
number of shares necessary to authorize or take such action at a meeting at
which all shares entitled to vote thereon were present and voted. California
and Delaware law permit a corporation to eliminate the ability of
shareholders to act by written consent in its articles or certificate of
incorporation. Unlike BARRA California's current Articles of Incorporation
and Bylaws, the proposed BARRA Delaware Certificate of Incorporation and
BARRA Delaware Bylaws eliminate this ability. Elimination of the ability of
stockholders to act by written consent could lengthen the amount of time
required to take stockholder actions because certain actions by written
consent are not subject to the minimum notice requirement of a stockholders'
meeting. The elimination of the ability of stockholders to act by written
consent, however, could have the effect of deterring hostile takeover
attempts. Without the ability of stockholders to act by written consent, a
holder or group of holders controlling a majority in interest of BARRA
Delaware's capital stock wishing, for example, to amend the BARRA Delaware
Bylaws or remove directors would have to call a stockholders' meeting and
wait the notice periods determined by the Board of Directors pursuant to the
BARRA Delaware Bylaws prior to taking any such action. In connection with its
evaluation of the Proposed Reincorporation, the Board of Directors has
determined that it is important that it be able to give advance notice of and
consideration to any action to be voted on by shareholders, and that all
shareholders be able to discuss at a meeting matters which may affect their
rights. Accordingly, the BARRA Delaware Certificate of Incorporation and the
BARRA Delaware Bylaws do not permit actions by written consent of
stockholders. Therefore, after the Proposed Reincorporation, stockholders
will no longer have the right to execute an action by written consent.
ABILITY OF SHAREHOLDERS TO CALL SPECIAL MEETINGS. California law and the
BARRA California Bylaws permit holders of 10% of the outstanding voting
securities of a company to call a special meeting of shareholders. Delaware
law does not require that stockholders be allowed to call a special meeting
of stockholders. Elimination of the right of shareholders to call a special
meeting would eliminate a shareholder's ability to force shareholder
consideration of a proposal over the opposition of the Board of Directors by
calling a special meeting of shareholders prior to such time as the board
believed such consideration to be appropriate. For example, proposed
amendments to the Bylaws or removal of directors for cause could, if the
Board of Directors so desired, be delayed until the next annual meeting of
shareholders. The business permitted to be conducted at any special meeting
of shareholders would be limited to the business brought before the meeting
by the Board of Directors or by the person that called the special meeting.
14
<PAGE>
Shareholders should recognize that elimination of the procedure for
shareholders to call special meetings may render more difficult, discourage
or delay a merger, proxy contest or the assumption of control of the Company
by a large shareholder or group of shareholders. To the extent that this
provision enables the Board of Directors to resist a takeover or change in
control, it may be more difficult to remove the existing Board of Directors
and management. This increased ability to resist a takeover or change in
control of the Company could be beneficial to shareholders if used by the
Board of Directors and management to discourage or delay insufficient offers
and/or to negotiate superior offers than may otherwise be obtainable.
The BARRA Delaware Bylaws provide that special meetings of stockholders may
be called only by the President, the Board of Directors or the Chairman of
the Board of Directors. Therefore, after the Proposed Reincorporation,
stockholders will not be permitted to call a special meeting of stockholders.
CUMULATIVE VOTING. Under California law, if any shareholder has given notice
of an intention to cumulate votes for the election of directors, any other
shareholder of the corporation is also entitled to cumulate his or her votes
at such election. Cumulative voting provides that each share of stock
normally having one vote is entitled to a number of votes equal to the number
of directors to be elected. A shareholder may then cast all such votes for a
single candidate or may allocate them among as many candidates as the
shareholder may choose. In the absence of cumulative voting, the holders of
the majority of the shares present or represented at a meeting in which
directors are to be elected would have the power to elect all the directors
to be elected at such meeting, and no person could be elected without the
support of holders of the majority of shares present or represented at such
meeting. Elimination of cumulative voting could make it more difficult for a
minority shareholder adverse to a majority of the shareholders to obtain
representation on the Company's Board of Directors. California corporations
whose stock is listed on a national stock exchange or quoted on an
interdealer quotation system of a registered national securities association
can also eliminate cumulative voting with shareholder approval. The Company
qualifies as such a company but has not sought shareholder approval to
eliminate cumulative voting. Under Delaware law, cumulative voting in the
election of directors is not mandatory, but is a permitted option. The BARRA
Delaware Certificate of Incorporation does not provide for cumulative voting
rights. Therefore, after the Proposed Reincorporation, stockholders will no
longer have cumulative voting rights.
INCREASE IN NUMBER OF AUTHORIZED SHARES OF COMMON STOCK. The Company's
Articles of Incorporation currently authorizes the Company to issue up to
40,000,000 shares of Common Stock. As discussed below under Proposal No. 3,
the Board of Directors has adopted, subject to shareholder approval, a
resolution to increase the number of authorized shares of Common Stock to
75,000,000. If such proposal is approved by the shareholders, the BARRA
Delaware Certificate of Incorporation will set the number of shares of Common
Stock at 75,000,000. If the Reincorporation Proposal is approved by the
shareholders but Proposal No. 3 regarding the increase in authorized shares
of Common Stock is not approved, the BARRA Delaware Certificate of
Incorporation will set the number of shares of Common Stock at 40,000,000.
See "Proposal No. 3 - Increase in the Number of Authorized Shares of Common
Stock."
PAR VALUE OF SHARES OF CAPITAL STOCK. The shares of the Company's Common
Stock and Preferred Stock are currently without par value. Under Delaware
law, a corporation may issue stock with a specified par value or stock
without par value. The BARRA Delaware Certificate of Incorporation provides
that shares of BARRA Delaware Common Stock and Preferred Stock shall have a
par value of $.0001 per share. The BARRA Delaware Certificate of
Incorporation is required to be filed with the Delaware Secretary of State
and, in connection therewith, an initial filing fee is assessed based upon,
among other things, whether or not a corporation's stock has a par value and,
if so, the amount of such par value. A par value of $.0001 per share has been
designated for shares of BARRA Delaware Common Stock and Preferred Stock in
order to reduce the amount of the initial filing fee that would otherwise be
required if the BARRA Delaware Common Stock and Preferred Stock had no par
value at their current authorized levels.
SIGNIFICANT DIFFERENCES BETWEEN THE CORPORATION LAWS OF CALIFORNIA AND DELAWARE
The corporation laws of California and Delaware differ in many respects.
Although all the differences are not set forth in this Proxy Statement,
certain provisions, which could materially affect the rights of shareholders,
are discussed below.
INSPECTION OF SHAREHOLDER LIST. Both California and Delaware law allow any
shareholder to inspect the shareholder list for a purpose reasonably related
to such person's interest as a shareholder. California law provides, in
addition, for an absolute right to inspect and copy the corporation's
shareholder list by persons holding an aggregate of five percent (5%) or more
of the corporation's voting shares, or shareholders holding an aggregate of
one percent (1%) or more of such shares who have filed a Schedule 14B with
the Securities and Exchange Commission in connection with a contested
election of directors. The latter provision has not been amended in response
to the elimination of Schedule 14B under the revised proxy rules. Under
California law, such absolute inspection rights also apply to a corporation
formed under the laws of any other state if its principal executive offices
are in California or if it customarily holds meetings of its board in
California. Delaware law also provides for inspection rights as to a list of
stockholders entitled to vote at a meeting within a ten-day period preceding
a stockholders' meeting for any purpose germane to the meeting. However,
Delaware law contains no provisions comparable to the absolute right of
inspection provided by California law to certain shareholders.
DIVIDENDS AND REPURCHASES OF SHARES. California law dispenses with the
concepts of par value of shares as well as statutory definitions of capital,
surplus and the like. The concepts of par value, capital and surplus exist
under Delaware law.
Under California law, a corporation may not make any distribution (including
dividends, whether in cash or other property, and repurchases of its shares,
other than repurchases of its shares issued under employee stock plans
contemplated by Section 408 of the California Corporation Code) unless either
(i) the corporation's retained earnings immediately prior to the proposed
distribution equal or exceed the amount of the proposed distribution or (ii)
immediately after giving effect to
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such distribution, the corporation's assets (exclusive of goodwill, capitalized
research and development expenses and deferred charges) would be at least equal
to 1 1/4 times its liabilities (not including deferred taxes, deferred income
and other deferred credits), and the corporation's current assets would be at
least equal to its current liabilities (or 1 1/4 times its current liabilities
if the average pre-tax and pre-interest expense earnings for the preceding two
(2) fiscal years were less than the average interest expense for such years).
Such tests are applied to California corporations on a consolidated basis.
Delaware law permits a corporation to declare and pay dividends out of
surplus or, if there is no surplus, out of net profits for the fiscal year in
which the dividend is declared and/or for the preceding fiscal year as long
as the amount of capital of the corporation following the declaration and
payment of the dividend is not less than the aggregate amount of the capital
represented by the issued and outstanding stock of all classes having a
preference upon the distribution of assets. In addition, Delaware law
generally provides that a corporation may redeem or repurchase its shares
only if the capital of the corporation is not impaired and such redemption or
repurchase would not impair the capital of the corporation.
To date, the Company has not paid any cash dividends on its outstanding
shares and does not anticipate doing so for the foreseeable future.
SHAREHOLDER VOTING. Both California and Delaware law generally require that a
majority of the shareholders of both the acquiring and target corporations
approve statutory mergers. Delaware law does not require a stockholder vote
of the surviving corporation in a merger (unless the corporation provides
otherwise in its certificate of incorporation) if (a) the merger agreement
does not amend the existing certificate of incorporation; (b) each share of
the stock of the surviving corporation outstanding immediately before the
effective date of the merger is an identical outstanding or treasury share
after the merger; and (c) either no shares of Common Stock of the surviving
corporation and no shares, securities or obligations convertible into such
stock are to be issued or delivered under the plan of merger, or the
authorized unissued shares or the treasury shares of Common Stock of the
surviving corporation to be issued or delivered under the plan of merger plus
those initially issuable upon conversion of any other shares, securities or
obligations to be issued or delivered under such plan do not exceed twenty
percent (20%) of the shares of Common Stock of such constituent corporation
outstanding immediately prior to the effective date of the merger. California
law contains a similar exception to its voting requirements for
reorganizations where shareholders or the corporation itself, or both,
immediately prior to the reorganization will own immediately after the
reorganization equity securities constituting more than five-sixths of the
voting power of the surviving or acquiring corporation or its parent entity.
Both California law and Delaware law also require that a sale of all or
substantially all of the assets of a corporation be approved by a majority of
the outstanding voting shares of the corporation transferring such assets.
With certain exceptions, California law also requires that mergers,
reorganizations, certain sales of assets and similar transactions be approved
by a majority vote of each class of shares outstanding. In contrast, Delaware
law generally does not require class voting, except in certain transactions
involving an amendment to the certificate of incorporation that adversely
affects a specific class of shares. As a result, shareholder approval of such
transactions may be easier to obtain under Delaware law for companies which
have more than one class of shares outstanding.
California law also requires that holders of nonredeemable Common Stock
receive nonredeemable Common Stock in a merger of the corporation with the
holder of more than fifty percent (50%) but less than ninety percent (90%) of
such Common Stock or its affiliate unless all of the holders of such Common
Stock consent to the transaction. This provision of California law may have
the effect of making a "cash-out" merger by a majority shareholder more
difficult to accomplish. Although Delaware law does not parallel California
law in this respect, under some circumstances Section 203 does provide
similar protection against coercive two-tiered bids for a corporation in
which the stockholders are not treated equally. See "-- Shareholder Approval
of Certain Business Combinations" herein.
California law provides that, except in certain circumstances, when a tender
offer or a proposal for a reorganization or for a sale of assets is made by
an interested party (generally a controlling or managing person of the target
corporation), an affirmative opinion in writing as to the fairness of the
consideration to be paid to the shareholders must be delivered to
shareholders. This fairness opinion requirement does not apply to a
corporation that does not have shares held of record by at least 100 persons,
or to a transaction that has been qualified under California state securities
laws. Furthermore, if a tender of shares or vote is sought pursuant to an
interested party's proposal and a later proposal is made by another party at
least ten (10) days prior to the date of acceptance of the interested party
proposal, the shareholders must be informed of the later offer and be
afforded a reasonable opportunity to withdraw any vote, consent or proxy, or
to withdraw any tendered shares. Delaware law has no comparable provision.
INTERESTED DIRECTOR TRANSACTIONS. Under both California and Delaware law
certain contracts or transactions in which one or more of a corporation's
directors has an interest are not void or voidable because of such interest
provided that certain conditions, such as obtaining the required approval and
fulfilling the requirements of good faith and full disclosure are met. With
certain exceptions, the conditions are similar under California and Delaware
law. Under California and Delaware law, (a) either the shareholders or the
board of directors must approve any such contract or transaction after full
disclosure of the
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material facts, and, in the case of board approval, the contract or transaction
must also be "just and reasonable" (in California) or "fair" (in Delaware) to
the corporation; or (b) the contract or transaction must have been just and
reasonable or fair as to the corporation at the time it was approved. In the
latter case, California law explicitly places the burden of proof on the
interested director. Under California law, if shareholder approval is sought,
the interested director is not entitled to vote his shares at a shareholder
meeting with respect to any action regarding such contract or transaction. If
board approval is sought, the contract or transaction must be approved by a
majority vote of a quorum of the directors, without counting the vote of any
interested directors (except that interested directors may be counted for
purposes of establishing a quorum). Under Delaware law, if board approval is
sought, the contract or transaction must be approved by a majority of the
disinterested directors (even if the disinterested directors are less than a
quorum). Therefore, certain transactions that the Board of Directors of BARRA
California might not be able to approve because of the number of interested
directors, could be approved by a majority of the disinterested directors of
BARRA Delaware, although less than a majority of a quorum.
SHAREHOLDER DERIVATIVE SUITS. California law provides that a shareholder
bringing a derivative action on behalf of a corporation need not have been a
shareholder at the time of the transaction in question, provided that certain
tests are met. Under Delaware law, a stockholder may bring a derivative
action on behalf of the corporation only if the stockholder was a stockholder
of the corporation at the time of the transaction in question or if his or
her stock thereafter devolved upon him or her by operation of law. California
law also provides that the corporation or the defendant in a derivative suit
may make a motion to the court for an order requiring the plaintiff
shareholder to furnish a security bond. Delaware does not have a similar
bonding requirement.
APPRAISAL RIGHTS. Under both California and Delaware law, a shareholder of a
corporation participating in certain major corporate transactions may, under
varying circumstances, be entitled to appraisal rights pursuant to which such
shareholder may receive cash in the amount of the fair market value of his or
her shares in lieu of the consideration he or she would otherwise receive in
the transaction. Under Delaware law, such fair market value is determined
exclusive of any element of value arising from the accomplishment or
expectation of the merger or consolidation, and such appraisal rights are not
available (a) with respect to the sale, lease or exchange of all or
substantially all of the assets of a corporation; (b) with respect to a
merger or consolidation by a corporation the shares of which are either
listed on a national securities exchange or are held of record by more than
2,000 holders if such stockholders receive only shares of the surviving
corporation or shares of any other corporation that are either listed on a
national securities exchange or held of record by more than 2,000 holders,
plus cash in lieu of fractional shares of such corporations; or (c) to
stockholders of a corporation surviving a merger if no vote of the
stockholders of the surviving corporation is required to approve the merger
under certain provisions of Delaware law.
The limitations on the availability of appraisal rights under California law
are different from those under Delaware law. Shareholders of a California
corporation whose shares are listed on a national securities exchange or on a
list of over-the-counter margin stocks issued by the Board of Governors of
the Federal Reserve System generally do not have such appraisal rights unless
the holders of at least five percent (5%) of the class of outstanding shares
claim the right or the corporation or any law restricts the transfer of such
shares. Appraisal rights are also unavailable if the shareholders of a
corporation or the corporation itself, or both, immediately prior to the
reorganization will own immediately after the reorganization equity
securities constituting more than five-sixths of the voting power of the
surviving or acquiring corporation or its parent entity (as will be the case
in the Reincorporation Proposal). Appraisal or dissenters' rights are,
therefore, not available to shareholders of BARRA California with respect to
the Reincorporation Proposal. California law generally affords appraisal
rights in sale of asset reorganizations.
DISSOLUTION. Under California law, shareholders holding fifty percent (50%)
or more of the total voting power may authorize a corporation's dissolution,
with or without the approval of the corporation's board of directors, and
this right may not be modified by the articles of incorporation. Under
Delaware law, unless the board of directors approves the proposal to
dissolve, the dissolution must be approved by all the stockholders entitled
to vote thereon. Only if the dissolution is initially approved by the board
of directors may it be approved by a simple majority of the outstanding
shares of the corporation's stock entitled to vote. In the event of such a
board-initiated dissolution, Delaware law allows a Delaware corporation to
include in its certificate of incorporation a supermajority (greater than a
simple majority) voting requirement in connection with dissolution. BARRA
Delaware Certificate of Incorporation contains no such supermajority voting
requirement, however, and a majority of the outstanding shares entitled to
vote, voting at a meeting at which a quorum is present, would be sufficient
to approve a dissolution of BARRA Delaware that had previously been approved
by its Board of Directors.
SHAREHOLDER APPROVAL OF CERTAIN BUSINESS COMBINATIONS. In recent years, a
number of states have adopted special laws designed to make certain kinds of
"unfriendly" corporate takeovers, or other transactions involving a
corporation and one or more of its significant shareholders, more difficult.
Under Section 203 of the Delaware General Corporation Law, certain "business
combinations" with "interested stockholders" of Delaware corporations are
subject to a three-year moratorium unless specified conditions are met.
Section 203 prohibits a Delaware corporation from engaging in a "business
combination" with an "interested stockholder" for three (3) years following
the date that such person or entity becomes an interested stockholder. With
certain
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exceptions, an interested stockholder is a person or entity who or which owns
individually or with or through certain other persons or entities, fifteen
percent (15%) or more of the corporation's outstanding voting stock (including
any rights to acquire stock pursuant to an option, warrant, agreement,
arrangement or understanding, or upon the exercise of conversion or exchange
rights, and stock with respect to which the person has voting rights only), or
is an affiliate or associate of the corporation and was the owner, individually
or with or through certain other persons or entities, of fifteen percent (15%)
or more of such voting stock at any time within the previous three (3) years, or
is an affiliate or associate of any of the foregoing.
For purposes of Section 203, the term "business combination" is defined
broadly to include mergers with or caused by the interested stockholder;
sales or other dispositions to the interested stockholder (except
proportionately with the corporation's other stockholders) of assets of the
corporation or a direct or indirect majority-owned subsidiary equal in
aggregate market value to ten percent (10%) or more of the aggregate market
value of either the corporation's consolidated assets or all of its
outstanding stock; the issuance or transfer by the corporation or a direct or
indirect majority-owned subsidiary of stock of the corporation or such
subsidiary to the interested stockholder (except for certain transfers in a
conversion or exchange or a pro rata distribution or certain other
transactions, none of which increase the interested stockholder's
proportionate ownership of any class or series of the corporation's or such
subsidiary's stock or of the corporation's voting stock); or receipt by the
interested stockholder (except proportionately as a stockholder), directly or
indirectly, of any loans, advances, guarantee, pledges or other financial
benefits provided by or through the corporation or a subsidiary.
The three-year moratorium imposed on business combinations of Section 203
does not apply if: (i) prior to the date on which such stockholder becomes an
interested stockholder the board of directors approves either the business
combination or the transaction that resulted in the person or entity becoming
an interested stockholder; (ii) upon consummation of the transaction that
made him or her an interested stockholder, the interested stockholder owns at
least eighty-five percent (85%) of the corporation's voting stock outstanding
at the time the transaction commenced (excluding from the eighty-five percent
(85%) calculation shares owned by directors who are also officers of the
target corporation and shares held by employee stock plans that do not give
employee participants the right to decide confidentially whether to accept a
tender or exchange offer); or (iii) on or after the date such person or
entity becomes an interested stockholder, the board approved the business
combination and it is also approved at a stockholder meeting by sixty-six and
two-thirds percent (66 2/3%) of the outstanding voting stock not owned by the
interested stockholder.
Section 203 will encourage any potential acquiror to negotiate with the
Company's Board of Directors. Section 203 also might have the effect of
limiting the ability of a potential acquiror to make a two-tiered bid for
BARRA Delaware in which all stockholders would not be treated equally.
Shareholders should note, however, that the application of Section 203 to
BARRA Delaware will confer upon the Board the power to reject a proposed
business combination in certain circumstances, even though a potential
acquiror may be offering a substantial premium for BARRA Delaware's shares
over the then current market price. Section 203 would also discourage certain
potential acquirors unwilling to comply with its provisions. See "--
Shareholder Voting" herein. Although a Delaware corporation to which Section
203 applies may elect not to be governed by Section 203, BARRA Delaware does
not intend to so elect and thus will be governed by Section 203.
INDEMNIFICATION AND LIMITATION OF LIABILITY. California and Delaware have
similar laws respecting indemnification by a corporation of its officers,
directors, employees and other agents. The laws of both states also permit
corporations to adopt a provision in their articles or certificate of
incorporation eliminating the liability of a director to the corporation or
its shareholders for monetary damages for breach of the director's fiduciary
duty of care. There are nonetheless certain differences between the laws of
the two states respecting indemnification and limitation of liability. In
general, Delaware law is somewhat broader in allowing corporations to
indemnify and limit the liability of corporate agents, which, among other
things, support Delaware corporations in attracting and retaining outside
directors.
California law does not permit the elimination of monetary liability where
such liability is based on: (a) intentional misconduct or knowing and
culpable violation of law; (b) acts or omissions that a director believes to
be contrary to the best interests of the corporation or its shareholders, or
that involve the absence of good faith on the part of the director; (c)
receipt of an improper personal benefit; (d) acts or omissions that show
reckless disregard for the director's duty to the corporation or its
shareholders where the director in the ordinary course of performing a
director's duties should be aware of a risk of serious injury to the
corporation or its shareholders; (e) acts or omissions that constitute an
unexcused pattern of inattention that amounts to an abdication of the
director's duty to the corporation and its shareholders; (f) interested
transactions between the corporation and a director in which a director has a
material financial interest; or (g) liability for improper distributions,
loans or guarantees.
Delaware law does not permit the elimination of monetary liability for (a)
breaches of the director's duty of loyalty to the corporation or its
shareholders; (b) acts or omissions not in good faith or involving
intentional misconduct or knowing violations of law; (c) the payment of
unlawful dividends or unlawful stock repurchases or redemptions; or (d)
transactions in which the director received an improper personal benefit.
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California law permits indemnification of expenses incurred in derivative or
third-party actions, except that with respect to derivative actions (a) no
indemnification may be made without court approval when a person is adjudged
liable to the corporation in the performance of that person's duty to the
corporation and its shareholders, unless a court determines such person is
entitled to indemnity for expenses, and then such indemnification may be made
only to the extent that such court shall determine, and (b) no
indemnification may be made without court approval in respect of amounts paid
or expenses incurred in settling or otherwise disposing of a threatened or
pending action or amounts incurred in defending a pending action which is
settled or otherwise disposed of without court approval.
Indemnification is permitted by California law only for acts taken in good
faith and believed to be in the best interests of the corporation and its
shareholders, as determined by a majority vote of a disinterested quorum of
the directors, independent legal counsel (if a quorum of independent
directors is not obtainable), a majority vote of a quorum of the shareholders
(excluding shares owned by the indemnified party), or the court handling the
action. California law requires indemnification when the individual has
successfully defended the action on the merits as opposed to Delaware law
which requires indemnification where there has been a successful defense,
whether on the merits or otherwise.
Delaware law generally permits indemnification of expenses incurred in the
defense or settlement of a derivative or third-party action, provided there
is a determination by a disinterested quorum of the directors, by independent
legal counsel or by a majority vote of a quorum of the stockholders that the
person seeking indemnification acted in good faith and in a manner reasonably
believed to be in, or (in contrast to California law) not opposed to, the
best interests of the corporation. Without court approval, however, no
indemnification may be made in respect of any derivative action in which such
person is adjudged liable for negligence or misconduct in the performance of
such person's duty to the corporation.
Each of California and Delaware law allow for the entering of indemnification
agreements which may provide for indemnification arrangements beyond those
specifically authorized by applicable statute as long as they are not
contrary to the policies underlying such statute. In this connection, BARRA
California entered into indemnification agreements with certain of its
officers and its directors providing for indemnification in accordance with
California law, as well as certain procedures for such indemnification and
for the advancement of expenses (other than actual amounts paid in
settlement) in connection with the investigation, defense, settlement or
appeal of any proceeding subject to such indemnification agreement. Such
advances are repayable by the officer or director to the extent the subject
conduct is later determined not to be indemnifiable. Similar indemnification
agreements are allowed under Delaware law and the broader indemnification
allowed in Delaware could also result in the greater allowance of expenses
advancement.
BARRA Delaware plans to enter into the BARRA Delaware Indemnification
Agreements with certain of its officers and its directors upon completion of
the Proposed Reincorporation in the form attached as Exhibit D to this Proxy
Statement. If the Proposed Reincorporation is approved, the BARRA Delaware
Indemnification Agreements will be deemed approved by the Company's
shareholders. Thus, a vote in favor of the Proposed Reincorporation will also
represent a vote approving the BARRA Delaware Indemnification Agreements. The
BARRA Delaware Indemnification Agreements provide for the indemnification of
a named director or officer beyond that which is specifically authorized by
applicable statute, including advancement of expenses, in connection with any
proceeding subject to the BARRA Delaware Indemnification Agreements.
Although the law in this regard is not certain, shareholders who vote in
favor of the Proposed Reincorporation, and thereby approve the BARRA Delaware
Indemnification Agreements, may be prevented from challenging the validity of
such agreements in a subsequent court proceeding.
ANTITAKEOVER IMPLICATIONS
Delaware, like many other states, permits a corporation to adopt a number of
measures, through amendment of the corporate charter or bylaws or otherwise,
that are designed to reduce a corporation's vulnerability to unsolicited
takeover attempts. The Reincorporation Proposal is not being proposed in
response to any present attempt known to the Board of Directors to acquire
control of the Company or to obtain representation on the Board of Directors.
In the discharge of its fiduciary obligations to its shareholders, the Board
of Directors has evaluated the Company's vulnerability to potential
unsolicited bidders. Although not presently proposed or included in the BARRA
Delaware Certificate of Incorporation or BARRA Delaware Bylaws, Delaware law
would allow the future inclusion of certain other provisions not permitted
under California law. Such provisions, subject to stockholder approval if
later proposed by the Board of Directors, would provide for greater
continuity, stability and independence of the Board of Directors. The
Company could also adopt shareholder rights plans, sometimes referred to as
"poison pills," which typically take the form of an issuance of a dividend to
shareholders of rights to acquire shares of the Company or an acquiring
corporation at less than half their fair market value. The Company's adoption
of such a shareholder rights plan would not require stockholder approval. In
addition, certain other provisions designed to discourage non-negotiated
takeover attempts, particularly those involving unequal treatment of the
Company's shareholders, could later be adopted. The Company could also enter
into severance agreements for its management and key employees which become
effective upon the occurrence of a change in
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control of the Company. None of these measures has been implemented by BARRA
California under California law and none has been provided for by BARRA Delaware
under Delaware law.
Certain effects of the Reincorporation Proposal may also be considered to
have antitakeover implications as a result of certain differences between the
charter documents of BARRA California and BARRA Delaware as well as certain
differences between the laws of the two states. For a discussion of these and
other differences, see "Significant Differences Between the Charter Documents
and Bylaws of BARRA California and BARRA Delaware" and "Significant
Differences Between the Corporation Laws of California and Delaware" above.
The antitakeover effects of the Reincorporation Proposal may be
disadvantageous to the extent that they discourage a future takeover attempt
which is not approved by the Board of Directors, but which a majority of the
shareholders may deem to be in their best interests or in which shareholders
may receive a substantial premium for their shares over the then current
market value or over their cost basis in such shares. As a result of such
effects of the Reincorporation Proposal, shareholders who might wish to
participate in a tender offer may not have an opportunity to do so. In
addition, to the extent that such provisions enable the Board of Directors to
resist a takeover or a change in control of the Company, they could make it
more difficult to change the existing Board of Directors and management.
Despite any disadvantages of the possible antitakeover effects of the
Reincorporation Proposal, the Board of Directors believes that unsolicited
takeover attempts may be unfair or disadvantageous to the Company and its
shareholders because: (i) a non-negotiated takeover bid may be timed to take
advantage of temporarily depressed stock prices; (ii) a non-negotiated
takeover bid may be designed to foreclose or minimize the possibility of more
favorable competing bids or alternative transactions; (iii) a non-negotiated
takeover bid may involve the acquisition of only a controlling interest in
the corporation's stock, without affording all shareholders the opportunity
to receive the same economic benefits; and (iv) certain of the Company's
contractual arrangements may provide that they may not be assigned pursuant
to a transaction which results in a "change of control" of the Company
without the prior written consent of the other contracting party.
By contrast, in a transaction in which an acquiror must negotiate with an
independent board of directors, the board can and should take account of the
underlying and long-term values of the Company's business, technology and
other assets, the possibilities for alternative transactions on more
favorable terms, possible advantages from a tax-free reorganization,
anticipated favorable developments in the Company's business not yet
reflected in the stock price and equality of treatment of all shareholders.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE PROPOSED
REINCORPORATION IN DELAWARE.
PROPOSAL NO. 3 - INCREASE IN THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
INTRODUCTION
Article III of BARRA California's Articles of Incorporation (the "Articles")
currently authorizes the Company to issue up to 40,000,000 shares of Common
Stock. The Board of Directors has adopted, subject to shareholder approval, a
resolution to increase the number of authorized shares of Common Stock to
75,000,000.
Proposal No. 2, the Reincorporation Proposal, would authorize a change in the
Company's state of incorporation from California to Delaware. The success or
failure of the Reincorporation Proposal will not affect the outcome of the
vote on this Proposal No. 3, except that if both this Proposal No. 3 and the
Reincorporation Proposal are approved and the Merger is not abandoned by the
Board of Directors, in lieu of any amendment to the Articles the number of
shares authorized in the BARRA Delaware Certificate of Incorporation will be
fixed at 75,000,000 from the outset. Accordingly, references herein to the
"Amendment" shall include, as applicable, such amendment to Article III of
the Articles or the statement of authorized shares in Article IV of the BARRA
Delaware Certificate of Incorporation, as applicable. If the Reincorporation
Proposal is approved by the shareholders but the proposed Amendment is not
adopted, the number of authorized shares of Common Stock set forth in the
Delaware Certificate of Incorporation will be 40,000,000.
The additional shares of Common Stock to be authorized by adoption of the
proposed Amendment would have rights identical to those associated with the
Company's currently authorized and outstanding shares of Common Stock unless
there is a subsequent determination by the Board of Directors that the
proposed Amendment is not in the best interests of the Company and its
shareholders. Although the Board believes as of the date of this Proxy
Statement that the proposed Amendment is advisable, the proposed Amendment
may be abandoned by the Board at any time before, during or after the Annual
Meeting and prior to filing the proposed Amendment to the Articles or the
proposed filing of the BARRA Delaware Certificate of Incorporation, as
applicable.
20
<PAGE>
PURPOSE OF THE PROPOSED AMENDMENT
As of June 8, 1998, the Company had a total of 13,777,061 issued and
outstanding shares of Common Stock, out of the 40,000,000 shares currently
authorized for issuance under Article III. The Company believes that it is
important to retain a significant reserve of authorized but unissued Common
Stock that could be used to raise additional capital. Although at present the
Board of Directors has no plans to approve future issuances of additional
shares of Common Stock, it desires to have such shares available to provide
additional flexibility to use its capital stock for business and financial
purposes in the future. The additional shares may be used, without further
shareholder approval, for various purposes including, without limitation,
issuing additional dividends in the form of stock splits, raising capital,
providing equity incentives to employees, officers or directors, establishing
strategic relationships with other companies, and expanding the Company's
business or product lines through the acquisition of other businesses.
TEXT OF THE PROPOSED AMENDMENT
Under the proposed Amendment, if the Reincorporation Proposal is adopted, the
first two sentences of Article IV of the BARRA Delaware Certificate of
Incorporation would read as follows:
"This Corporation is authorized to issue two classes of shares of
stock which shall be known as Common Stock and Preferred Stock. The
total number of shares of Common Stock which this Corporation is
authorized to issue is seventy-five million (75,000,000) shares,
par value $.0001 per share, and the total number of shares of
Preferred Stock which this Corporation is authorized to issue is
ten million (10,000,000) shares, par value $.0001 per share."
Under the proposed Amendment, if the Reincorporation Proposal is NOT adopted,
the first two sentences of Article III of the Articles would read as follows:
"This Corporation is authorized to issue two classes of shares of
stock which shall be known as Common Stock and Preferred Stock. The
total number of shares of Common Stock which this Corporation is
authorized to issue is seventy-five million (75,000,000) shares, no
par value, and the total number of shares of Preferred Stock which
this Corporation is authorized to issue is ten million (10,000,000)
shares, no par value."
EFFECTS OF THE PROPOSED AMENDMENT
Adoption of the proposed Amendment and issuance of the Common Stock would not
affect the rights of the holders of currently outstanding Common Stock of the
Company, except for the dilutive effects resulting from increasing the number
of shares of the Company's Common Stock outstanding (when and if such
additional shares are actually issued). If the Amendment is adopted, it will
become effective either (a) upon the filing of a Certificate of Amendment of
the Company's Articles of Incorporation with the Secretary of State of the
State of California if Proposal No. 2, the Reincorporation Proposal, is not
also approved by the shareholders or if the Merger is abandoned by the Board
of Directors, or (b) upon the effectiveness of the Reincorporation Proposal,
if approved, as provided in the BARRA Delaware Certificate of Incorporation
attached hereto as Exhibit B.
Except in connection with the Company's employee benefit and stock option
plans, the Board of Directors currently has no immediate plans,
understandings, agreements, arrangements, or commitments for the issuance of
additional shares of Common Stock and no holder of Common Stock has any
preemptive right with respect to the Common Stock. Thus, should the Board of
Directors elect to issue additional shares of Common Stock, existing
shareholders would not have any preferential rights to purchase such shares.
If the proposed Amendment is adopted, 35,000,000 additional shares of Common
Stock of the Company will be available for issuance at the discretion of the
Board of Directors, except that certain large issuances of shares may require
shareholder approval in accordance with applicable state law and the
requirements of NASDAQ. Certain stock-based employment benefit plans may
require shareholder approval in order to obtain desirable treatment under tax
or securities laws and accounting regulations.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE PROPOSED
INCREASE IN THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK.
PROPOSAL NO. 4 - RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Board of Directors has selected Deloitte & Touche LLP as the independent
auditors of the Company for the fiscal year ending March 31, 1999. The
selection of the independent auditors will be submitted to the shareholders for
ratification at the Annual Meeting. In the event that ratification by the
shareholders of the selection of Deloitte & Touche LLP as the Company's
independent auditors is not obtained, the Board of Directors will reconsider
such selection. Deloitte & Touche LLP has audited the Company's financial
statements since 1986. Its representatives are expected to be present at the
Annual Meeting, will have the opportunity to make a statement if they so desire,
and will be available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE
RATIFICATION OF THE SELECTION OF DELOITTE & TOUCHE.
21
<PAGE>
CERTAIN FINANCIAL INFORMATION
The following information is presented in Part II of the Company's Annual
Report on Form 10-K and is incorporated by this reference into this Proxy
Statement: (a) Management's Discussion and Analysis of Financial Condition
and Results of Operations, (b) complete consolidated Balance Sheets as of
March 31, 1998 and 1997, related consolidated Statements of Income,
Shareholders Equity and Cash Flows for each of the three years in the period
ended March 31, 1998 and notes thereto, (c) the report of Deloitte & Touche
LLP regarding the complete consolidated Financial Statements and (d) changes
in and Disagreements with Accountants on Accounting and financial Disclosure.
Each statement made in this Proxy Statement containing any form of the words
"expect," "believe," "anticipate," "forward" or "future" is a forward-looking
statement that may involve a number of risk factors and uncertainties. Among
other factors that could cause actual results to differ materially are the
following: changes in the Code or ERISA, the loss of a large single revenue
source, and changes in the business conditions and other changes in the
Company's industry that could affect the value of the Company's stock.
Further information and potential risk factors that could affect the
Company's financial results are included in the Company's Annual Report on
Form 10-K for the fiscal year ended March 31, 1998.
OTHER BUSINESS
The Company currently knows of no other matters to be submitted at the Annual
Meeting. If any other matters properly come before the Annual Meeting, it is
the intention of the persons named in the enclosed form of Proxy to vote the
shares they represent as the Board of Directors may recommend.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Andrew Rudd
- ------------------------------
Andrew Rudd
Chairman of the Board and Chief Executive Officer
June 25, 1998
<PAGE>
EXHIBIT A
AGREEMENT AND PLAN OF MERGER
OF
BARRA (DE), INC.
(A DELAWARE CORPORATION)
AND
BARRA, INC.
(A CALIFORNIA CORPORATION)
THIS AGREEMENT AND PLAN OF MERGER dated as of ________, 1998 (this
"Agreement"), is between BARRA (DE), Inc., a Delaware corporation ("BARRA
Delaware"), and BARRA, Inc., a California corporation ("BARRA California"),
BARRA Delaware and BARRA California are sometimes referred to herein as the
"Constituent Corporations."
RECITALS
A. BARRA California is a corporation duly organized and existing under
the laws of the State of California and has an authorized capital stock of Fifty
Million (50,000,000) shares. The number of shares of preferred stock authorized
to be issued is Ten Million (10,000,000), no par value. The number of shares of
common stock authorized to be issued is Forty Million (40,000,000), no par value
(the "BARRA California Common Stock").
B. BARRA Delaware is a corporation duly organized and existing under
the laws of the State of Delaware and has a total authorized capital stock of
Eighty Five Million (85,000,000) shares. The number of shares of preferred
stock authorized to be issued is Ten Million (10,000,000), par value $.0001
per share. The number of shares of common stock authorized to be issued is
Seventy Five Million (75,000,000), par value $.0001 per share (the "BARRA
Delaware Common Stock").
C. The Board of Directors of BARRA California has determined that, for
the purpose of effecting the reincorporation of BARRA California in the State of
Delaware, it is advisable and in the best interests of BARRA California that
BARRA California merge with and into BARRA Delaware upon the terms and
conditions herein provided.
D. The respective Boards of Directors of BARRA Delaware and BARRA
California have approved this Agreement and have directed that this Agreement be
submitted to a vote of their respective stockholders and executed by the
undersigned officers.
E. BARRA Delaware is a wholly-owned subsidiary of BARRA California.
NOW, THEREFORE, in consideration of the mutual agreements and covenants set
forth herein, BARRA Delaware and BARRA California hereby agree, subject to the
terms and conditions hereinafter set forth, as follows:
I. MERGER
1.1 MERGER. In accordance with the provisions of this Agreement, the
Delaware General Corporation Law and the General Corporation Law of the State of
California, BARRA California shall be merged with and into BARRA Delaware (the
"Merger"), the separate existence of BARRA California shall cease and BARRA
Delaware
<PAGE>
shall be, and is herein sometimes referred to as, the "Surviving Corporation,"
and the Surviving Corporation shall be renamed BARRA, Inc..
1.2 FILING AND EFFECTIVENESS. The Merger shall not become effective until
the following actions shall be completed:
(a) This Agreement and the Merger shall have been adopted and
approved by the shareholders of BARRA California and the sole stockholder
of BARRA Delaware in accordance with the requirements of the Delaware
General Corporation Law and the General Corporation Law of the State of
California;
(b) All of the conditions precedent to the consummation of the Merger
specified in this Agreement shall have been satisfied or duly waived by the
party entitled to satisfaction thereof;
(c) An executed Certificate of Merger or an executed counterpart of
this Agreement meeting the requirements of the Delaware General Corporation
Law shall have been filed with the Secretary of State of the State of
Delaware; and
(d) An executed counterpart of this Agreement, together with any
and all other necessary documents and instruments meeting the
requirements of the General Corporation Law of the State of California,
shall have been filed with the Secretary of State of the State of
California.
This Agreement and the Merger shall become effective upon the filing of
an executed Certificate of Merger or an executed counterpart of this Agreement
with the Secretary of State of the State of Delaware.
1.3 EFFECT OF THE MERGER. Upon the Effective Date of the Merger, the
separate existence of BARRA California shall cease and BARRA Delaware, as the
Surviving Corporation, (i) shall continue to possess all of its assets, rights,
powers and property as constituted immediately prior to the Effective Date of
the Merger, (ii) shall be subject to all actions previously taken by its and
BARRA California's Board of Directors, (iii) shall succeed, without other
transfer, to all of the assets, rights, powers and property of BARRA California
in the manner more fully set forth in Section 259 of the General Corporation Law
of the State of Delaware, (iv) shall continue to be subject to all of the debts,
liabilities and obligations of BARRA Delaware as constituted immediately prior
to the Effective Date of the Merger, and (v) shall succeed, without other
transfer, to all of the debts, liabilities and obligations of BARRA California
in the same manner as if BARRA Delaware had itself incurred them, all as more
fully provided under the applicable provisions of the General Corporation Law of
the State of Delaware and the General Corporation Law of the State of
California.
II. CHARTER DOCUMENTS, DIRECTORS AND OFFICERS
2.1 CERTIFICATE OF INCORPORATION. Except as otherwise provided in
Section 1.1, the Certificate of Incorporation of BARRA Delaware as in effect
immediately prior to the Effective Date of the Merger shall continue in full
force and effect as the Certificate of Incorporation of the Surviving
Corporation until duly amended in accordance with the provisions thereof and
applicable law.
2.2 BYLAWS. The Bylaws of BARRA Delaware as in effect immediately prior
to the Effective Date of the Merger shall continue in full force and effect as
the Bylaws of the Surviving Corporation until duly amended in accordance with
the provisions thereof and applicable law.
2.3 DIRECTORS AND OFFICERS. (a) Pursuant to the Certificate of
Incorporation and the Bylaws of the Surviving Corporation, the Board of
Directors of the Surviving Corporation shall consist of six (6) members.
The directors of BARRA California immediately prior to the Effective Date
of the Merger shall become the directors of the Surviving Corporation and such
individuals shall serve as directors of the Surviving Corporation on and
after the Effective Date until their successors shall have been duly elected
and qualified or until as otherwise provided by law, the Certificate of
Incorporation of the Surviving Corporation or the Bylaws of the Surviving
Corporation.
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<PAGE>
(b) The officers of BARRA California immediately prior to the Effective
Date of the Merger shall become the officers of the Surviving Corporation on and
after the Effective Date until their successors shall have been duly elected and
qualified or until as otherwise provided by law, the Certificate of
Incorporation of the Surviving Corporation or the Bylaws of the Surviving
Corporation.
III. MANNER OF CONVERSION OF STOCK
3.1 BARRA CALIFORNIA COMMON STOCK. Upon the Effective Date of the Merger,
each share of BARRA California Common Stock issued and outstanding immediately
prior thereto shall by virtue of the Merger and without any action by the
Constituent Corporations, the holder of such share or any other person, be
converted into and exchanged for one (1) fully paid and nonassessable share of
BARRA Delaware Common Stock.
3.2 BARRA DELAWARE COMMON STOCK. Upon the Effective Date of the Merger,
each share of BARRA Delaware Common Stock issued and outstanding immediately
prior thereto shall, by virtue of the Merger and without any action by BARRA
Delaware, the holder of such shares or any other person, be cancelled and
returned to the status of authorized but unissued shares.
3.3 BARRA CALIFORNIA OPTIONS, WARRANTS AND STOCK PURCHASE RIGHTS.
(a)Upon the Effective Date of the Merger, the Surviving Corporation shall
assume and continue all of BARRA California's stock option and purchase plans in
existence at the Effective Date, including but not limited to the BARRA, Inc.
Stock Option Plan, the BARRA, Inc. 1996 Employee Stock Purchase Plan, the BARRA,
Inc. Directors Option Plan and the 401(k) Employee Savings Plan.
(a) Each outstanding and unexercised option, warrant or other right to
purchase shares of BARRA California Common Stock shall become an option, warrant
or right to purchase the Surviving Corporation's Common Stock on the basis of
one (1) share of BARRA Delaware Common Stock for each share of BARRA California
Common Stock issuable pursuant to any such option, warrant or stock purchase
right on the same terms and conditions and at an exercise price per share equal
to the exercise price per share applicable to any such BARRA California option,
warrant or stock purchase right at the Effective Date of the Merger. A number of
shares of BARRA Delaware Common Stock shall be reserved for issuance upon the
exercise of options, warrants and stock purchase rights equal to the number of
shares of BARRA California Common Stock so reserved immediately prior to the
Effective Date of the Merger.
3.4 EMPLOYEE BENEFIT PLANS. On the Effective Date, the Surviving
Corporation shall assume all obligations of BARRA California under any and all
employee benefit plans in effect as of the Effective Date with respect to which
employee rights or accrued benefits are outstanding as of such time, including,
but not limited to, the BARRA, Inc. Stock Option Plan, the BARRA, Inc. 1996
Employee Stock Purchase Plan, the BARRA, Inc. Directors Option Plan, the Rogers,
Casey & Associates, Inc. 1992 Stock Option Plan and the 401(k) Employee Savings
Plan. On the Effective Date, the Surviving Corporation shall adopt and continue
in effect all such employee benefit plans upon the same terms and conditions as
were in effect immediately prior to the Merger.
3.5 EXCHANGE OF CERTIFICATES. After the Effective Date of the Merger,
each holder of an outstanding certificate representing shares of BARRA
California Common Stock may be asked to surrender the same for cancellation to
an exchange agent, whose name will be delivered to such holders prior to any
requested exchange (the "Exchange Agent"), and each such holder shall be
entitled to receive in exchange therefor a certificate or certificates
representing the number of shares of BARRA Delaware Common Stock into which the
surrendered shares were converted as herein provided. Until so surrendered, each
outstanding certificate theretofore representing shares of BARRA California
Common Stock shall be deemed for all purposes to represent the number of shares
of BARRA Delaware Common Stock into which such shares of BARRA California Common
Stock were converted in the Merger.
The registered owner on the books and records of the Surviving Corporation
or the Exchange Agent of any such outstanding certificate shall, until such
certificate shall have been surrendered for transfer or conversion or otherwise
accounted for to the Surviving Corporation or the Exchange Agent, have and be
entitled to exercise any
A-3
<PAGE>
voting and other rights with respect to and to receive dividends and other
distributions upon the shares of BARRA Delaware Common Stock represented by such
outstanding certificate as provided above.
Each certificate representing BARRA Delaware Common Stock so issued in the
Merger shall bear the same legends, if any, with respect to the restrictions on
transferability as the certificates representing shares of BARRA California
Common Stock so converted and given in exchange therefore, unless otherwise
determined by the Board of Directors of the Surviving Corporation in compliance
with applicable laws, or other such additional legends as agreed upon by the
holder and the Surviving Corporation.
If any certificate for shares of BARRA Delaware Common Stock is to be
issued in a name other than that in which the certificate surrendered in
exchange therefor is registered, it shall be a condition of issuance thereof
that the certificate so surrendered shall be properly endorsed and otherwise in
proper form for transfer, that such transfer otherwise be proper and comply with
applicable securities laws and that the person requesting such transfer pay to
the Exchange Agent any transfer or other taxes payable by reason of issuance of
such new certificate in a name other than that of the registered holder of the
certificate surrendered or establish to the satisfaction of BARRA Delaware that
such tax has been paid or is not payable.
No action need be taken by holders of BARRA California Common Stock to
exchange their certificates for shares of BARRA Delaware Common Stock; this will
be accomplished at the time of the next transfer by the shareholder.
Certificates for shares of BARRA California Common Stock will automatically
represent an equal number of shares of BARRA Delaware Common Stock upon the
Effective Date of the Merger.
IV. GENERAL
4.1 COVENANTS OF BARRA DELAWARE. BARRA Delaware covenants and agrees that
it will, on or before the Effective Date of the Merger:
4.1.1 Qualify to do business as a foreign corporation in the State
of California and each other jurisdiction in which BARRA California is qualified
to do business in such jurisdiction.
4.1.2 File any and all documents with the California Franchise Tax
Board necessary for the assumption by BARRA Delaware of all of the franchise tax
liabilities of BARRA California.
4.1.3 Take such other actions as may be required by the General
Corporation Law of the State of California.
4.2 FURTHER ASSURANCES. From time to time, as and when required by BARRA
Delaware or by its successors or assigns, there shall be executed and delivered
on behalf of BARRA California such deeds and other instruments, and there shall
be taken or caused to be taken by it such further and other actions as shall be
appropriate or necessary in order to vest or perfect in or conform of record or
otherwise by BARRA Delaware the title to and possession of all the property,
interests, assets, rights, privileges, immunities, powers, franchises and
authority of BARRA California and otherwise to carry out the purposes of this
Agreement, and the officers and directors of BARRA Delaware are fully authorized
in the name and on behalf of BARRA California or otherwise to take any and all
such action and to execute and deliver any and all such deeds and other
instruments.
4.3 ABANDONMENT. At any time before the Effective Date of the Merger,
this Agreement may be terminated and the Merger may be abandoned for any reason
whatsoever by the Board of Directors of either BARRA California or of BARRA
Delaware, or of both, notwithstanding the approval of this Agreement by the
shareholders of BARRA California.
4.4 AMENDMENT. The Boards of Directors of the Constituent Corporations
may amend this Agreement at any time prior to the filing of this Agreement (or
certificate in lieu thereof) with the Secretary of State of the State of
Delaware, provided that an amendment made subsequent to the adoption of this
Agreement by the stockholder or shareholders of either Constituent Corporation
shall not: (1) alter or change the amount or kind of shares, securities, cash,
property and/or rights to be received in exchange for or on conversion of all or
any of the shares of any class or series thereof of such Constituent
Corporation, (2) alter or change any term of the Certificate of Incorporation of
the
A-4
<PAGE>
Surviving Corporation to be effected by the Merger or (3) alter or change any of
the terms and conditions of this Agreement if such alteration or change would
adversely affect the holders of any class or series of capital stock of any
Constituent Corporation.
4.5 REGISTERED OFFICE. The registered office of the Surviving Corporation
in the State of Delaware is 1209 Orange Street, City of Wilmington, County of
New Castle and the registered agent of the Surviving Corporation at such address
is The Corporation Trust Company.
4.6 AGREEMENT. Executed copies of this Agreement will be on file at the
principal place of business of the Surviving Corporation at 2100 Milvia Street,
Berkeley, California 94704, and copies thereof will be furnished to any
stockholder or shareholder of either Constituent Corporation, upon request and
without cost.
4.7 GOVERNING LAW. This Agreement shall in all respects be construed,
interpreted and enforced in accordance with and governed by the laws of the
State of Delaware and, so far as applicable, the merger provisions of the
General Corporation Law of the State of California.
4.8 COUNTERPARTS. In order to facilitate the filing and recording of this
Agreement, the same may be executed in any number of counterparts, each of which
shall be deemed to be an original and all of which together shall constitute one
and the same instrument.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
A-5
<PAGE>
IN WITNESS WHEREOF, this Agreement having first been approved by the
resolutions of the Boards of Directors of BARRA (DE), Inc., a Delaware
corporation, and BARRA, Inc., a California corporation, is hereby executed on
behalf of each of such two corporations and attested by their respective
officers thereunto duly authorized.
BARRA (DE), INC.,
a Delaware corporation
By:
-------------------------------------
ATTEST:
- ---------------------------
BARRA, INC.,
a California corporation
By:
-------------------------------------
ATTEST:
- ---------------------------
[COUNTERPART SIGNATURE PAGE
TO AGREEMENT AND PLAN OF MERGER]
A-6
<PAGE>
EXHIBIT B
CERTIFICATE OF INCORPORATION
OF
BARRA (DE), INC.
BARRA (DE), Inc., a corporation organized and existing under the laws of the
State of Delaware, hereby certifies as follows:
I
The name of this corporation is BARRA (DE), Inc. (the "Corporation").
II
The purpose of this Corporation is to engage in any lawful act or
activity for which a corporation may be organized under the General Corporation
Law of the State of Delaware.
III
The address of the registered office of this Corporation in the state
of Delaware is 1209 Orange Street, City of Wilmington, County of New Castle.
The name of its registered agent at such address is The Corporation Trust
Company.
IV
This Corporation is authorized to issue two classes of shares of
stock which shall be known as Common Stock and Preferred Stock. The total
number of shares of Common Stock which this Corporation is authorized to
issue is seventy-five million (75,000,000) shares, par value $.0001 per
share, and the total number of shares of Preferred Stock which this
Corporation is authorized to issue is ten million (10,000,000) shares, par
value $.0001 per share.
The designations, powers, preferences and relative, participating,
optional or other special rights of, and the qualifications, limitations and
restrictions upon, each class of stock shall be as follows:
Preferred Stock may be issued from time to time in one or more series,
each of such series to have such terms as stated or expressed herein and in the
resolution or resolutions providing for the issue of such series adopted by the
Board of Directors of the Corporation as hereinafter provided. Any shares of
Preferred Stock which may be redeemed, purchased or acquired by the Corporation
may be reissued except as otherwise provided by law or by action of the Board of
Directors. Different series of Preferred Stock shall not be construed to
constitute different classes of shares for the purpose of voting by class unless
expressly provided or required by law.
<PAGE>
Authority is hereby expressly granted to the Board of Directors of the
Corporation from time to time to issue the Preferred Stock in one or more
series, by resolution or resolutions providing for the issue of the shares
thereof, to determine and fix such voting powers, full or limited, or no voting
powers, and such designations, preferences and relative, participating, optional
or other special rights, and qualifications, limitations or restrictions
thereof, including without limitation thereof, dividend rights, conversion
rights, redemption privileges and liquidation preferences, as shall be stated
and expressed in such resolutions, all to the full extent now or hereafter
permitted by the General Corporation Law of the State of Delaware. The Board of
Directors of the Corporation shall have the power to set the number of shares of
any such series and to increase or reduce such number (but not below the number
of shares of such series then outstanding). No vote of the holders of the
Common Stock or Preferred Stock of the Corporation shall, unless otherwise
required by law or provided in the resolutions creating any particular series of
Preferred Stock, be a prerequisite to the issuance of any shares of any series
of the Preferred Stock authorized by and complying with the conditions of this
Certificate of Incorporation.
V
No action required to be taken or that may be taken at any annual
or special meeting of the stockholders of the Corporation may be taken
without a meeting, and the power of stockholders to consent in writing,
without a meeting, to the taking of any action is specifically denied.
VI
The liability of the directors of this Corporation for monetary
damages shall be eliminated to the fullest extent permissible under Delaware
law.
VII
No action required to be taken or that may be taken at any annual
or special meeting of the stockholders of this corporation may be taken
without a meeting, and the power of stockholders to consent in writing,
without a meeting, to the taking of any action is specifically denied.
VIII
This Corporation is authorized to provide indemnification of agents
(as defined in Section 145 of the General Corporation Law of the State of
Delaware) for breach of duty to this Corporation and its stockholders through
bylaw provisions or through agreements with the agents, or both, in excess of
the indemnification otherwise permitted by Section 145 of the General
Corporations Law of the State of Delaware, subject to the limits on such
excess indemnification created by applicable Delaware law (statutory or
nonstatutory), with respect to actions for breach of duty to this
Corporation, its stockholders, and others.
IX
The name and mailing address of the incorporator is:
David M. Niebauer
Graham & James LLP
One Maritime Plaza, Suite 300
San Francisco, CA 94111-3492
The undersigned incorporator hereby acknowledges that the foregoing
Certificate of Incorporation is his act and deed and that the facts stated
herein are true.
Dated: June 16, 1998
/s/ David M. Niebauer
------------------------------------
David M. Niebauer, Incorporator
B-2
<PAGE>
EXHIBIT C
BYLAWS
OF
BARRA (DE), INC.
ARTICLE I - OFFICES
Section 1.1 Principal Office. The Board of Directors shall fix the
location of the principal executive office of the corporation at any place
within or outside the State of Delaware. If the principal executive office is
located outside this State, the Board of Directors shall fix and designate a
principal business office in the State of Delaware.
Section 1.2 Other Offices. The Board of Directors may at any time
establish branch or subordinate offices at any place or places where the
corporation is qualified to do business.
ARTICLE II - STOCKHOLDERS
Section 2.1 Place of Meetings. Meetings of stockholders shall be held
at any place designated by the Board of Directors. In the absence of
designation, stockholders' meetings shall be held at the principal executive
office of the corporation.
Section 2.1A Chairman and Secretary of Stockholder Meetings. The
chairman of the board shall preside at each meeting of the stockholders. In the
absence or disability of the chairman of the board, the meeting shall be chaired
by an officer of the corporation in the following order: president, executive
vice president, senior vice president and vice president. In the absence of all
such officers, a person chosen by the vote of a majority in interest of the
stockholders present in person or represented by proxy and entitled to vote
thereat shall act as chairman. The secretary or in his/her absence an assistant
secretary or in the absence of the secretary and all assistant secretaries a
person whom the chairman of the meeting shall appoint shall act as secretary of
the meeting and keep a record of the proceedings thereof.
Section 2.1B Regulation and Conduct of Stockholder Meetings. The Board
of Directors of the corporation shall be entitled to make such rules or
regulations for the conduct of meetings of the stockholders as it shall deem
necessary, appropriate or convenient. Subject to such rules and regulations of
the Board of Directors, if any, the chairman of the meeting shall have the right
and authority to prescribe such rules, regulations and procedures and to do all
such acts as in the judgment of such chairman, are necessary, appropriate or
convenient for the proper conduct of the meeting, including, without limitation,
establishing an agenda or order of business for the meeting, rules and
procedures for maintaining order at the meeting and for the safety of those
present, limitations on participation in such meeting to stockholders of record
of the corporation and their duly authorized and constituted proxies, and such
other persons as the chairman shall permit, restrictions on entry into the
meeting after the time fixed for commencement thereof, limitations on the time
allotted to questions or comments by participants and regulation of the opening
and closing of the polls for balloting on matters which are to be voted on by
ballot, unless, and to the extent determined by the Board of Directors or the
chairman of the meeting, meetings of the stockholders shall not be required to
be held in accordance with the rules of parliamentary procedure.
Section 2.2 Annual Meeting. The annual meeting of stockholders shall be
held during the first week of August in each year at 2:00 p.m. on such day
during that week as shall be chosen by the Board of Directors; provided,
however, that if (a) the Board of Directors fails to select a day during the
first week of August, the annual meeting of the stockholders shall be held on
the first Tuesday of August; and if (b) this day falls on a legal holiday, then
the meeting shall be held at the same time and place on the next succeeding
business day. At the annual meeting directors shall be elected and any other
proper business may be transacted.
Section 2.3 Special Meetings. Special meetings of the stockholders may
be called for any purpose at any time by the president, the Board of Directors
or the chairman of the board. If a special meeting is called by any
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person or persons other than the Board of Directors, a written request to notice
the meeting, specifying the time of the meeting and the general nature of the
business to be transacted, shall be delivered personally or sent by registered
mail or by telegraphic or other facsimile transmission to the corporation. The
officer receiving the request shall cause notice to be given promptly to the
stockholders entitled to vote, in accordance with the provisions of Section 2.4,
that a meeting will be held at the time requested by the person or persons
calling the meeting, not less than thirty-five (35) nor more than sixty (60)
days after the receipt of the request. If the notice is not given within twenty
(20) days after receipt of the request, the person or persons requesting the
meeting may give the notice.
Section 2.4 Notice of Meetings. Notice of meetings of the stockholders
of the corporation shall be given in writing to each stockholder entitled to
vote, either personally or by first-class mail or other means of written
communication, addressed to the stockholder at the stockholder's address
appearing on the books of the corporation or given by the stockholder to the
corporation for the purpose of notice. Such notice shall be sent not less than
ten (10) nor more than sixty (60) days before the meeting. Said notice shall
state the place, date and hour of the meeting and (a) in the case of special
meetings, the general nature of the business to be transacted, and no other
business may be transacted, or (b) in the case of annual meetings, those matters
which the Board of Directors, at the time of the mailing of the notice, intends
to present for action by the stockholders, and (c) in the case of any meeting at
which directors are to be elected, the names of the nominees intended at the
time of the mailing of the notice to be presented by the board for election.
Notice shall be deemed to have been given at the time when delivered personally
or deposited in the mail or sent by telegram or other means of written
communication.
Section 2.5 Waiver of Notice or Consent by Absent Stockholders. The
transactions of any meeting of stockholders, however called and noticed, shall
be as valid as though done at a meeting duly held after regular call and notice,
if a quorum is present either in person or by proxy, and if, either before or
after the meeting, each of the persons entitled to vote at the meeting, not
present in person or by proxy, signs a written waiver of notice or a consent to
the holding of the meeting or an approval of the minutes thereof. All such
waivers, consents and approvals shall be filed with the corporate records or
made a part of the minutes of the meeting.
Section 2.6 Quorum. The presence in person or by proxy of the holders
of a majority of the shares of stock entitled to vote shall constitute a quorum
at a meeting of the stockholders for the transaction of business. The
stockholders present at a duly called or held meeting at which a quorum is
present may continue to transact business until adjournment notwithstanding the
withdrawal of enough stockholders to leave less than a quorum, if any action
taken (other than adjournment) is approved by at least a majority of the shares
of stock required to constitute a quorum. Any stockholders' meeting, whether or
not a quorum is present, may be adjourned from time to time by the vote of a
majority of the shares represented in person or by proxy at that meeting, and in
the absence of a quorum no other business may be transacted at such meeting,
except as provided above. When any stockholders' meeting is adjourned for
thirty (30) days or more or, if after the adjournment, a new record date is
fixed for the adjourned meeting, notice of the adjourned meeting shall be given
to each stockholder entitled to vote at the adjourned meeting in accordance with
the provisions of Section 2.4.
Section 2.7 Voting.
(a) Procedures. The stockholders entitled to vote at any
meeting of stockholders shall be determined in accordance with the provisions of
Section 2.9, and subject to Sections 217 and 218 of the General Corporation Law
of the State of Delaware. The stockholders' vote may be by voice vote or by
ballot; provided, however, that any election for directors must be by ballot if
demanded by any stockholder at the meeting and before the voting has begun.
Except as provided in Section 2.6 or in this Section 2.7, the affirmative vote
of the majority of the shares of stock represented and voting at a duly held
meeting at which a quorum is present (which shares of stock voting affirmatively
also constitute at least a majority of the required Quorum) shall be the act of
the stockholders. Stockholders may not cumulate their votes.
(b) Proxies. Every person entitled to vote shall have the right
to do so either in person or by written proxy signed by such person and filed
with the secretary of the corporation. A proxy shall be deemed signed if the
stockholder's name is placed on the proxy, (whether by manual signature,
typewriting, telegraphic transmission, or otherwise) by the stockholder or the
stockholder's attorney-in-fact. A validly executed proxy which does not state
that it is irrevocable shall continue in full force and effect unless (i)
revoked by the
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person executing it prior to the vote pursuant to that proxy by a writing
delivered to the corporation stating that the proxy is revoked, or by a
subsequent proxy executed by, or attendance at the meeting and voting in person
by, the person executing the proxy; or (ii) written notice of the death or
incapacity of the maker of that proxy is received by the corporation before the
vote pursuant to that proxy is counted; provided, however, that no proxy shall
be valid after the expiration of three (3) months from the date of the proxy
unless otherwise provided in the proxy.
Section 2.8 Action Without Meeting. No action required to be taken or
that may be taken at any annual or special meeting of the stockholders of the
corporation may be taken without a meeting, and the power of stockholders to
consent in writing, without a meeting, to the taking of any action is
specifically denied.
Section 2.9 Record Date.
(a) Established by the Board of Directors. In order that the
corporation may determine the stockholders entitled to notice of, or to vote at,
any meeting or entitled to receive payment of any dividend or other distribution
or allotment of any rights, or entitled to exercise any rights in respect of any
other lawful action, the Board of Directors may fix, in advance, a record date,
which shall not be more than sixty (60) nor less than ten (10) days before the
date of such meeting, nor more than sixty (60) days prior to any other action.
(b) Established by Operation of Law. If no record date is
fixed:
(i) the record date for determining stockholders entitled
to notice of, or to vote at, a meeting of stockholders shall be at the close of
business on the business day next preceding the day on which notice is given or,
if the notice is waived, at the close of business on the business day next
preceding the day on which the meeting is held;
(ii) the record date for determining stockholders entitled
to give consent to corporate action in writing without a meeting, when no prior
action by the Board of Directors has been taken, shall be the day on which the
first written consent is given; and
(iii) the record date for any other purpose shall be at
the close of business on the day on which the Board of Directors adopts the
resolution relating thereto, or the sixtieth (60th) day prior to the date of
such other action, whichever is later.
(c) Effect of Determination of Record Date. Stockholders of
record at the close of business on the record date are entitled to notice and to
vote, or to receive the dividend, distribution or allotment of rights, or to
exercise the rights, as the case may be, notwithstanding any transfer of any
shares of stock on the books of the corporation after the record date, except as
otherwise provided by agreement or in the General Corporation Law of the State
of Delaware.
ARTICLE III - DIRECTORS
Section 3.1 Powers. Subject to the provisions of the General
Corporation Law of the State of Delaware and to any limitations in the
Certificate of Incorporation or these Bylaws requiring stockholder authorization
or approval of a particular action, the business and affairs of the corporation
shall be managed, and all corporate powers shall be exercised, by or under the
direction of the Board of Directors. The Board of Directors may delegate the
management of day-to-day operation of the business of the corporation to a
management company or other person; provided, however, that the business and
affairs of the corporation shall be managed, and all corporate powers shall be
exercised, under the ultimate direction of the Board of Directors.
Section 3.2 Number and Qualification of Directors. The authorized
number of directors of this corporation shall be not less than four (4) persons
and not more than seven (7), until changed by an amendment to the Certificate of
Incorporation, or by an amendment to this Section 3.2, adopted by approval of a
majority of the outstanding shares entitled to vote. The exact number of
directors shall be fixed at six (6), until changed, within the limits specified
above, by the amendment to this Section 3.2 adopted by the Board of Directors or
a majority of the
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outstanding shares entitled to vote; provided, however, that an amendment to the
articles or this Section 3.2 reducing either the fixed number or the minimum
number of directors to a number less than five (5) cannot be adopted if the
votes cast against its adoption at a meeting or the shares of stock not
consenting in the case of an action by written consent are equal to more than
sixteen and two-thirds percent (16-2/3%) of the outstanding shares of stock
entitled to vote. The directors need not be stockholders of this corporation.
Section 3.3 Nomination, Election and Term of Office.
(a) Nominations. Nominations for the election of directors may
be made by the Board of Directors or by any stockholder entitled to vote for the
election of directors. Any stockholder entitled to vote for the election of
directors at a meeting may nominate persons for election as directors only if
written notice of such stockholder's intent is given, either by personal
delivery or by United States mail, postage prepaid, to the Secretary of the
corporation not later than (i) with respect to an election to be held at an
annual meeting of the stockholders, 90 days in advance of such meeting, and (ii)
with respect to an election to be held at a special meeting of the stockholders
for the election of directors, the close of business on the seventh day
following the date on which notice of such meeting was first given to
stockholders. Each such notice shall set forth: (A) the name and address of
the stockholder who intends to make the nomination and of the person or persons
to be nominated, (B) a representation that such stockholder is a holder of
record of stock of the corporation, entitled to vote at such meeting, and
intends to appear in person or by proxy at the meeting to nominate the person or
persons specified in the notice, (C) a description of all arrangements or
understandings between such stockholder and each nominee and any other person or
persons (naming such person or persons) pursuant to which the nomination or
nominations are to be made by such stockholder, (D) such other information
regarding each nominee proposed by such stockholder as would have been required
to be included in a proxy statement filed pursuant to the proxy rules of the
Securities and Exchange Commission had each nominee been nominated, or intended
to be nominated, by the Board of Directors, and (E) the consent of each nominee
to serve as a director of the corporation, if elected. The chairman of a
stockholders' meeting may refuse to acknowledge the nomination of any person not
made in compliance with the foregoing procedure.
(b) Election and Term of Office. Pursuant to the provisions of
Section 2.7, the directors shall be elected at the annual meeting of the
stockholders and shall hold office until the next annual meeting. Subject to
the provisions of Sections 3.5 and 3.6, each director shall hold office until
the expiration of the term for which elected and until a successor has been
elected and qualified.
Section 3.4 Vacancies. Except for a vacancy created by the removal of a
director, vacancies in the Board of Directors may be filled by a majority of the
remaining directors, whether or not less than a quorum, or by a sole remaining
director, and each director so elected shall hold office until the next annual
meeting of the stockholders and until a successor has been elected. The
stockholders shall elect a director or directors to fill any vacancy created by
removal, and the stockholders may elect a director or directors at any time to
fill a vacancy not filled by the directors.
Section 3.5 Resignation. Any director may resign effective upon giving
written notice to the chairman of the board, the president, the secretary or the
Board of Directors, unless the notice specifies a later time for that
resignation to become effective. If the resignation is effective at a future
time, a successor may be elected to take office when the resignation becomes
effective.
Section 3.6 Removal. The Board of Directors may declare vacant the
office of a director who has been declared of unsound mind by order of court, or
who has been convicted of a felony. Any or all of the directors may be removed
without cause by an affirmative vote of a majority of the outstanding shares of
stock entitled to vote at an election of directors.
Section 3.7 Place of Meetings. Meetings of the Board of Directors may
be held at any place which has been designated in the notice of the meeting, or,
if not stated in the notice or there is no notice, designated in the Bylaws or
by resolution of the Board of Directors. In the absence of designation,
meetings shall be held at the principal executive office of the corporation.
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Section 3.8 Regular Meetings. Immediately following, and at the same
place as, each annual meeting of stockholders, the Board of Directors shall hold
without call or notice other than this bylaw a regular meeting for the purposes
of organization, election of officers and the transaction of other business.
Other regular meetings of the Board of Directors shall be held without notice at
such time as from time to time may be fixed by the Board of Directors.
Section 3.9 Special Meetings; Notice. Special meetings of the Board of
Directors may be called at any time by the chairman of the board or the
president or any vice president or the secretary or any two directors. Notice
of the time and place of all special meetings shall be given to each director by
any of the following means:
(a) By personal delivery, or by telephone or telegraph at least
48 hours prior to the time of the meeting; or
(b) By first-class mail, postage prepaid, at least four days
prior to the time of the meeting.
Section 3.10 Waiver of Notice. The transactions of any meeting of the
Board of Directors, however called and noticed and wherever held, are as valid
as though had at a meeting duly held after regular call and notice, if a quorum
is present and if, either before or after the meeting, each of the directors not
present signs a written waiver of notice or a consent to holding the meeting or
an approval of the minutes thereof. All such waivers, consents and approvals
shall be filed with the corporate records or made a part of the minutes of the
meeting. Notice of a meeting shall also be deemed waived by any director who
attends the meeting without protesting before or at its commencement the lack of
notice.
Section 3.11 Participation by Telephone. Members of the Board of
Directors may participate in a meeting through use of conference telephone or
similar communications equipment, as long as all members participating in such
meeting can hear one another. Participation in a meeting pursuant hereto
constitutes presence in person at such meeting.
Section 3.12 Quorum and Action at Meeting. A majority of the authorized
number of directors shall constitute a quorum for the transaction of business.
Subject to the provisions of the General Corporation Law of the State of
Delaware, every act or decision done or made by a majority of the directors
present at a meeting duly held at which a quorum is present is the act of the
Board of Directors. A meeting at which a quorum is initially present may
continue to transact business notwithstanding the withdrawal of directors, if
any action taken is approved by the required quorum for that meeting.
Section 3.13 Action Without Meeting. Any action required or permitted to
be taken by the Board of Directors may be taken without a meeting, if all
members of the board individually or collectively consent in writing to the
action. Such written consent or consents shall be filed with the minutes of the
board. Actions by written consent shall have the same force and effect as a
unanimous vote of the directors.
Section 3.14 Committees. The Board of Directors may, by resolution
adopted by a majority of the authorized number of directors, designate one or
more committees, each consisting of one or more directors and each of which, to
the extent provided in the resolution and as limited by the General Corporation
Law of the State of Delaware, shall have all the authority of the Board of
Directors. Further, the board may designate one or more directors as alternate
members of any committee, who may replace any absent member at any meeting of
the committee. Each committee shall serve at the pleasure of the board.
Section 3.15 Meetings and Action of Committees. Meetings and action of
committees shall be governed by, and held and taken in accordance with, the
provisions of Article III of these Bylaws, with such changes in the context of
these Bylaws as are necessary to substitute the committee and its members for
the Board of Directors and its members, except that the time for regular
meetings of committees may be determined either by resolution of the Board of
Directors or by resolution of the committee. Special meetings of committees may
also be called by resolution of the Board of Directors. Notice of special
meetings of committees shall also be given to all alternate members, who shall
have the right to attend all meetings of the committee. Minutes shall be kept
of each
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meeting of any committee and shall be filed with the corporate records. The
Board of Directors may adopt such other rules for the governance of any
committee as are not inconsistent with the provisions of these Bylaws.
Section 3.16 Compensation and Expenses of Directors. Directors and
members of committees shall not receive compensation for their services or
reimbursement for their expenses except in amounts fixed or determined by
resolution of the Board of Directors. This Section 3.16 shall not be construed
to preclude any director from serving the corporation in any other capacity as
an officer, agent, employee or otherwise, and receiving compensation for those
services.
ARTICLE IV - OFFICERS
Section 4.1 Officers. The officers of the corporation shall be a chief
executive officer or a president, a chief financial officer or a treasurer, and
a secretary, all of whom shall be chosen by and serve at the pleasure of the
Board of Directors. The corporation may also have, at the discretion of the
Board of Directors, a chairman of the board, a chief operating officer, one or
more vice presidents and such other officers as may be deemed expedient for the
proper conduct of the business of the corporation, each of whom shall have such
authority and shall perform such duties as the Board of Directors may from time
to time determine. One person may hold two or more offices.
Section 4.2 Removal and Resignation. Subject to the rights, if any, of
an officer under any contract of employment, any officer may be removed at any
time, with or without cause, by the Board of Directors. Any officer may resign
at any time by giving written notice to the corporation without prejudice to the
rights, if any, of the corporation under any contract to which the officer is a
party. Any resignation shall take effect at the date of the receipt of the
notice or at any later time specified in the notice, and unless otherwise
specified in the notice, the acceptance of the resignation shall not be
necessary to make it effective.
Section 4.3 Chairman of the Board. The Board of Directors may elect a
chairman, who shall preside, if present, at all board meetings and, pursuant to
the provisions of Section 2.1A of Article II of these Bylaws, all stockholder
meetings and shall exercise and perform such other powers and duties as may be
assigned from time to time by the Board of Directors.
Section 4.3A Chief Executive Officer. The corporation's chief executive
officer, subject to the control of the Board of Directors, shall have the
general supervision, direction, and control over the corporation's business and
its officers. In addition to the general powers and duties of the chief
executive officer, such officer shall have all such other powers and duties as
prescribed by the Board of Directors and the Bylaws. In the event that the
corporation does not elect a president, the chief executive officer shall
exercise the powers and duties of the president enumerated in Section 4.4 of the
Bylaws.
Section 4.4 President. Except to the extent that these Bylaws or the
Board of Directors assign specific powers and duties to the chairman of the
board or the chief executive officer, the president shall be the corporation's
acting manager and, subject to the control of the Board of Directors, shall be
responsible for the quotidian supervision, direction, and control of the
corporation's business. In the absence or disability of the chairman of the
board and chief executive officer, the chairman of the board and chief executive
officer's duties and responsibilities shall be carried out by the president. In
addition to the general powers and duties of the president, such officer shall
have all such other powers and duties as prescribed by the Board of Directors
and the Bylaws.
Section 4.4A Chief Operating Officer. Subject to the control of the
Board of Directors, the chairman of the board, the chief executive officer and
the president, the chief operating officer shall be the corporation's acting
operations manager and shall be responsible for the quotidian operation of the
corporation's business. In addition to the general powers and duties of the
chief operating officer, such officer shall have all such other powers and
duties as prescribed by the Board of Directors and the Bylaws.
Section 4.5 Vice-Presidents. In the absence or disability of the
president, the vice-presidents, if any, in order of their rank as fixed by the
Board of Directors or, if not ranged, a vice-president designated by the Board
of Directors, shall perform all the duties of the president, and when so acting
shall have all the powers of, and be
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subject to all the restrictions upon, the president. The vice-presidents shall
have such other powers and perform such other duties as from time to time may be
prescribed for them respectively by the Board of Directors, the chairman of the
board or the president.
Section 4.6 Secretary. The secretary shall keep a book of minutes of
all meetings and actions of directors, committees of directors and stockholders.
The minutes of each meeting shall state the time and place that it was held and
such other information as shall be necessary to determine the actions taken
thereat and whether the meeting was held in accordance with the law and these
Bylaws. The secretary shall keep at the corporation's principal executive
office, or at the office of its transfer agent or registrar, a stock register
showing the names and addresses of all stockholders and the number and class of
shares of stock held by each. The secretary shall give notice of all meetings
of stockholders, directors and committees required to be given by these Bylaws.
The secretary shall keep the seal of the corporation in safe custody and shall
have such other powers and perform such other duties as may be prescribed by the
Board of Directors, the chairman of the board or the president.
Section 4.7 Chief Financial Officer. The chief financial officer shall
have the custody of all moneys and securities of the corporation and shall keep
regular books of account. The chief financial officer shall disburse the funds
of the corporation in payment of the just demands against the corporation or as
may be ordered by the Board of Directors, taking proper vouchers for such
disbursements, and shall render to the Board of Directors from time to time as
may be required by the Board of Directors, an account of all transactions as
chief financial officer and of the financial condition of the corporation. The
chief financial officer shall perform all duties incident to the office or which
are properly required by the Board of Directors, the chairman of the board or
the president.
Section 4.8 Salaries. The salaries of the officers may be fixed from
time to time by the Board of Directors, and no officer shall be prevented from
receiving such salary by reason of the fact that the officer is also a director
of the corporation.
ARTICLE V - MISCELLANEOUS
Section 5.1 Records and Inspection Rights. The corporation shall keep
such records (including stockholders' lists, accounting books, minutes of
meetings and other records) as are required by the General Corporation Law of
the State of Delaware, and these records shall be open to inspection by the
directors and stockholders of the corporation to the extent permitted by the
General Corporation Law of the State of Delaware.
Section 5.2 Checks, Drafts, Evidences of Indebtedness. All checks,
drafts or other orders for payment of money, notes or other evidences of
indebtedness, issued in the name of, or payable to, the corporation, shall be
signed or endorsed by such person or persons and in such manner as, from time to
time, shall be determined by resolution of the Board of Directors.
Section 5.3 Execution of Corporate Contracts and Instruments. Subject
to restrictions on contracts and transactions involving directors and officers,
as provided by Section 144 of the General Corporation Law of the State of
Delaware, the Board of Directors may authorize any officer or officers or agent
or agents, or appoint an attorney or attorneys-in-fact, to enter into any
contract or execute any instrument in the name of, and on behalf of, the
corporation, and this authority may be general or confined to specific
instances; and unless so authorized or appointed, or unless afterwards ratified
by the Board of Directors, no officer, agent or employee shall have any power or
authority to bind the corporation by any contract or engagement or to pledge its
credit or to render it liable for any purpose or for any amount.
Section 5.4 Certificates for Shares. Every holder of shares of stock in
the corporation shall be entitled to have a certificate signed in the name of
the corporation by the chairman of the board or the president or a
vice-president and by the chief financial officer or the secretary or an
assistant secretary, certifying the number of shares of stock and the class or
series of shares of stock owned by the stockholder. Any or all of the
signatures on the certificate may be facsimile. In case any officer, transfer
agent or registrar who has signed or whose facsimile signature has been placed
upon a certificate shall have ceased to be such officer, transfer agent or
registrar before
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such certificate is issued, it may be issued by the corporation with the same
effect as if such person were an officer, transfer agent or registrar at the
date of issue.
Section 5.5 Lost, Stolen or Destroyed Certificates. The corporation may
issue a new stock certificate or a new certificate for any other security in the
place of any certificate theretofore issued by it, alleged to have been lost,
stolen or destroyed, and the corporation may require the owner of the lost,
stolen or destroyed certificate or the owner's legal representative to give the
corporation a bond (or other adequate security) sufficient to indemnify it
against any claim that may be made against it (including any expense or
liability) on account of the alleged loss, theft or destruction of any such
certificate or the issuance of such new certificate.
Section 5.6 Corporate Seal. The corporation may have a corporate seal
in such form as shall be prescribed and adopted by the Board of Directors.
Section 5.7 Indemnification of Corporate Agents. The corporation shall
indemnify each of its agents against expenses, judgments, fines, settlements and
other amounts, actually and reasonably incurred by such person by reason of such
person's having been made or having been threatened to be made a party to a
proceeding to the fullest extent permissible by the provisions of Section 145 of
the General Corporation Law of the State of Delaware, and the corporation shall
advance the expenses reasonably expected to be incurred by such agent in
defending any such proceeding upon receipt of the undertaking required by
subdivision (f) of such Section. The terms "agent", "proceeding" and "expenses"
used in this Section 5.7 shall have the same contextual meaning as such terms in
said Section 145. The corporation may purchase and maintain insurance on behalf
of any agent of the corporation against any liability asserted against, or
incurred by, the agent in such capacity or arising out of the agent's status as
such, whether or not the corporation would have the power to indemnify the agent
against that liability under the provisions of Section 145 of the General
Corporation Law of the State of Delaware.
ARTICLE VI - AMENDMENTS
Section 6.1 Amendment by Stockholders. New bylaws may be adopted or
these Bylaws may be amended or repealed by the affirmative vote of a majority of
the outstanding shares of stock entitled to vote, except as otherwise provided
by law or by the Certificate of Incorporation.
Section 6.2 Amendment by Directors. Subject to the right of
stockholders as provided in Section 6.1, bylaws other than a bylaw or amendment
thereof changing the maximum or minimum number of authorized directors or
changing from a variable to a fixed number of directors or vice versa may be
adopted, amended or repealed by the Board of Directors.
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CERTIFICATE OF SECRETARY
I, the undersigned, certify that I am the presently elected and acting
Secretary of BARRA (DE), Inc., a Delaware corporation (the "Corporation"), and
that the above bylaws, consisting of nine (9) pages including, this page,
are the Bylaws of the Corporation, as amended and adopted by resolution of the
Board of Directors of the Corporation on June 16, 1998.
Dated: June 16, 1998 /s/ Maria Hekker
Executed: Berkeley, California --------------------------------
Maria Hekker, Secretary
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EXHIBIT D
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (this "Agreement") is made effective as of
________________ between BARRA, Inc., a Delaware corporation (the
"Corporation"), and _____________________ ("Indemnitee") .
RECITALS:
A. Indemnitee, a _____________________ of BARRA, Inc., performs a
valuable service in such capacity for BARRA, Inc. and its subsidiaries and
affiliates (the "Corporation"); and
B. The stockholders of the Corporation have adopted a Certificate of
Incorporation (the "Certificate of Incorporation") and Bylaws (the "Bylaws")
providing for the indemnification of the officers, directors, agents and
employees of the Corporation to the maximum extent authorized by Section 145 of
the Delaware Corporations Code, as amended (the "Code"); and
C. The Certificate of Incorporation, Bylaws and the Code, by their
non-exclusive nature, permit contracts between the Corporation and its officers
and directors with respect to indemnification of such individuals; and
D. In accordance with the authorization as provided by the Code, the
Corporation has purchased and presently maintains a policy or policies of
Directors and Officers Liability Insurance ("D & O Insurance"), covering certain
liabilities which may be incurred by its directors and officers; in the
performance of their duties in such capacity; and
E. As a result of developments affecting the terms, scope and
availability of D & O Insurance there exists general uncertainty as to the
extent of protection afforded Indemnitee by such D & O Insurance and by
indemnification provisions under the Code, the Certificate and the Bylaws; and
F. In order to induce Indemnitee to continue to serve in his or her
current capacity with the Corporation, the Corporation has determined and agreed
to enter into this contract with Indemnitee;
NOW, THEREFORE, in consideration of Indemnitee's continued service on and
after the date hereof, the parties hereto agree as follows:
1. INDEMNIFICATION OF INDEMNITEE. The Corporation hereby agrees to hold
harmless and indemnify Indemnitee to the fullest extent authorized by the
provisions of the Code, as may be amended from time to time.
2. ADDITIONAL INDEMNITY. Subject only to the exclusions set forth in
Section 3 hereof, the Corporation hereby further agrees to hold harmless and
indemnify Indemnitee:
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(a) against any and all expenses (including attorneys' fees), witness
fees, judgments, fines, amounts paid in settlement and other amounts
actually and reasonably incurred by Indemnitee in connection with any
threatened, pending or completed action, suit or proceeding whether civil,
criminal administrative or investigative (including an action by or in the
right of the Corporation) to which Indemnitee is, was or at any time
becomes a party, or is threatened to be made a party, by reason of the fact
that Indemnitee is, was or at any time becomes a director, officer,
employee or agent of the Corporation, or is or was serving or at any time
serves at the request of the Corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise; and
(b) otherwise to the fullest extent as may be provided to Indemnitee
by the Corporation under the provisions of the Certificate of
Incorporation, the Bylaws and the Code.
3. LIMITATIONS ON ADDITIONAL INDEMNITY. No indemnity pursuant to
Section 2 hereof shall be paid by the Corporation:
(a) except to the extent the aggregate of losses to be indemnified
thereunder exceeds the sum of such losses for which Indemnitee is
indemnified pursuant to Section 1 hereof;
(b) in respect to remuneration paid to Indemnitee if it shall be
determined by a final judgment or other final adjudication that such
remuneration was in violation of law;
(c) on account of any suit in which judgment is rendered against
Indemnitee for an accounting of profits made from the purchase or sale by
Indemnitee of securities of the Corporation pursuant to the provisions of
Section 16(b) of the Securities Exchange Act of 1934 and amendments thereto
or similar provisions of any federal, state or local statutory law;
(d) on account of Indemnitee's conduct which is finally adjudged to
have been knowingly fraudulent or deliberately dishonest, or to constitute
willful misconduct;
(e) on account of Indemnitee's conduct which is the subject of an
action, suit or proceeding described in Section 7(c)(ii) hereof;
(f) on account of any action, claim or proceeding (other than a
proceeding referred to in Section 8(b) hereof) initiated by Indemnitee
unless such action, claim or proceeding was authorized in the specific case
by action of the Board of Directors;
(g) if a final decision by a Court having jurisdiction in the matter
shall determine that such indemnification is not lawful (and, in this
respect, both the Corporation and Indemnitee have been advised that the
Securities and Exchange Commission believes that indemnification for
liabilities arising under the federal securities laws is against public
policy and is, therefore, unenforceable and that claims for
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indemnification should be submitted to appropriate courts for adjudication,
and that federal legislation prohibits indemnification for certain ERISA
violations).
4. CONTRIBUTION. If the indemnification provided in Sections 1 and 2
hereof is unavailable by reason of a Court decision described in Section 3(g)
hereof based on grounds other than any of those set forth in paragraphs (b)
through (f) of Section 3 hereof, then in respect of any threatened, pending or
completed action, suit or proceeding in which the Corporation is jointly liable
with Indemnitee (or would be if joined in such action, suit or proceeding), the
Corporation shall contribute to the amount of expenses (including attorneys'
fees), judgments, fines, amounts paid in settlement and other amounts actually
and reasonably incurred and paid or payable by Indemnitee in such proportion as
is appropriate to reflect (i) the relative benefits received by the Corporation
on the one hand and Indemnitee on the other hand from the transaction from which
such action, suit or proceeding arose, and (ii) the relative fault of the
Corporation on the one hand and of Indemnitee on the other in connection with
the events which resulted in such expenses, judgments, fines or settlement
amounts, as well as any other relevant equitable considerations. The relative
fault of the Corporation on the one hand and of Indemnitee on the other shall be
determined by reference to, among other things, the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent the
circumstances resulting in such expenses, judgments, fines or settlement
amounts. The Corporation agrees that it would not be just and equitable if
contribution pursuant to this Section 4 were determined by pro rata allocation
or any other method of allocation which does not take account of the foregoing
equitable considerations.
5. CONTINUATION OF OBLIGATIONS. All agreements and obligations of the
Corporation contained herein shall continue during the period Indemnitee is 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, employee benefit plan or
other enterprise) and shall continue thereafter so long as Indemnitee shall be
subject to any possible claim or threatened, pending or completed action, suit
or proceeding, whether civil, criminal or investigative, by reason of the fact
that Indemnitee was serving in any such capacity referred to herein.
6. NOTIFICATION AND DEFENSE OF CLAIM. As soon as practicable after
receipt by Indemnitee of notice of the commencement of any action, suit or
proceeding, Indemnitee will, if a claim in respect thereof is to be made against
the Corporation under this Agreement, notify the Corporation of the commencement
thereof; but the omission so to notify the Corporation will not relieve it from
any liability which it may have to Indemnitee otherwise than under this
Agreement. With respect to any such action, suit or proceeding as to which
Indemnitee notifies the Corporation of the commencement thereof:
(a) the Corporation will be entitled to participate therein at its
own expense;
(b) except as otherwise provided below, to the extent that it may
wish, the Corporation jointly with any other indemnifying party similarly
notified will be entitled to assume the defense thereof, with counsel
reasonably satisfactory to Indemnitee. After
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notice from the Corporation to Indemnitee of its election so as to assume
the defense thereof, the Corporation will not be liable to Indemnitee under
this Agreement for any legal or other expenses subsequently incurred by
Indemnitee in connection with the defense thereof other than reasonable
costs of investigation or as otherwise provided below. Indemnitee shall
have the right to employ its counsel in such action, suit or proceeding but
the fees and expenses of such counsel incurred after notice from the
Corporation of its assumption of the defense thereof shall be at the
expense of Indemnitee unless (i) the employment of counsel by Indemnitee
has been authorized by the Corporation, (ii) Indemnitee shall have
reasonably concluded that there may be a conflict of interest between the
Corporation and Indemnitee in the conduct of the defense of such action or
(iii) the Corporation shall not in fact have employed counsel to assume the
defense of such action, in each of which cases the fees and expenses of
Indemnitee's separate counsel shall be at the expense of the Corporation.
The Corporation shall not be entitled to assume the defense of any action,
suit or proceeding brought by or on behalf of the Corporation or as to
which Indemnitee shall have made the conclusion provided for in 6(b)(ii)
above; and
(c) the Corporation shall not be liable to indemnify Indemnitee under
this Agreement for any amounts paid in settlement of any action or claim
effected without its written consent. The Corporation shall be permitted to
settle any action except that it shall not settle any action or claim in
any manner which would impose any penalty or limitation on Indemnitee
without Indemnitee's written consent. Neither the Corporation nor
Indemnitee will unreasonably withhold its consent to any proposed
settlement.
7. ADVANCEMENT AND REPAYMENT OF EXPENSES.
(a) The Corporation shall advance to Indemnitee, prior to any final
disposition of any threatened or pending action, suit or proceeding,
whether civil, criminal, administrative or investigative, any and all
reasonable expenses (including legal fees and expenses) incurred in
investigating or defending any such action, suit or proceeding within
ten (10) days after receiving copies of invoices presented to Indemnitee
for such expenses.
(b) Indemnitee agrees that Indemnitee will reimburse the Corporation
for all reasonable expenses paid by the Corporation in defending any civil
or criminal action, suit or proceeding against Indemnitee in the event and
only to the extent it shall be ultimately determined by a final judicial
decision (from which there is no right of appeal) that Indemnitee is not
entitled, under the provisions of the Code, the Certificate of
Incorporation, the Bylaws, this Agreement or otherwise, to be indemnified
by the Corporation for such expenses.
(c) Notwithstanding the foregoing, the Corporation shall not be
required to advance such expenses to Indemnitee if Indemnitee (i) commences
any action, suit or proceeding as a plaintiff unless such advance is
specifically approved by a majority of the Board of Directors or (ii) is a
party to an action, suit or proceeding brought by the
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Corporation and approved by a majority of the Board which alleges willful
misappropriation of corporate assets by Indemnitee, disclosure of
confidential information in violation of Indemnitee's fiduciary or
contractual obligations to the Corporation, or any other willful and
deliberate breach in bad faith of Indemnitee's duty to the Corporation or
its shareholders.
8. ENFORCEMENT.
(a) the Corporation expressly confirms and agrees that it has entered
into this Agreement and assumed the obligations imposed on the Corporation
hereby in order to induce Indemnitee to continue providing his or her
services to the Corporation, and acknowledges that Indemnitee is relying
upon this Agreement in continuing such services.
(b) In the event Indemnitee is required to bring any action to
enforce rights or to collect moneys due under this Agreement and is
successful in such action, the Corporation shall reimburse Indemnitee for
all of Indemnitee's reasonable fees and expenses in bringing and pursuing
such action.
9. SUBROGATION. In the event of payment under this Agreement, the
Corporation shall be subrogated to the extent of such payment to all of the
rights of recovery of Indemnitee, who shall execute all documents required and
shall do all acts that may be necessary to secure such rights and to enable the
Corporation effectively to bring suit to enforce such rights.
10. NON-EXCLUSIVITY OF RIGHTS. The rights conferred on Indemnitee by this
Agreement shall not be exclusive of any other right which Indemnitee may have or
hereafter acquire under any statute, provision of the Certificate of
Incorporation or Bylaws, insurance policy, agreement, vote of stockholders or
directors, or otherwise, both as to action in his official capacity and as to
action in another capacity while holding office.
11. PARTIAL INDEMNIFICATION. If Indemnitee is entitled under any
provision of this Agreement to indemnification by the Corporation for some or a
portion of the expenses, judgments, fines or penalties actually or reasonably
incurred by Indemnitee in the investigation, defense, appeal or settlement of
any proceeding but not, however, for the total amount thereof, the Corporation
shall nevertheless indemnify Indemnitee for the portion of such expenses,
judgments, fines or penalties to which Indemnitee is entitled.
12. SURVIVAL OF RIGHTS; DEFINITION OF CORPORATION. The rights conferred
on Indemnitee by this Agreement shall continue after Indemnitee has ceased to be
a director, officer, employee or other agent of the Corporation and shall inure
to the benefit of Indemnitee's heirs, estate, personal representatives,
executors, administrators and assigns. For purposes of this Agreement,
references to the "Corporation" shall include, (i) in addition to the resulting
corporation, any constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger; and (ii) any subsidiary of
the Corporation.
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13. NO PROMISE OF EMPLOYMENT. Notwithstanding any other provision herein
to the contrary, the Corporation does not intend this Agreement to be construed
in any way as a contract of employment or a promise of continuing employment for
the Indemnitee.
14. SEPARABILITY. Each of the provisions of this Agreement is a separate
and distinct agreement and independent of the others, so that if any or all of
the provisions hereof shall be held to be invalid or unenforceable for any
reason, such invalidity or unenforceability shall not affect the validity or
enforceability of the other provisions hereof or the obligation of the
Corporation to indemnify the Indemnitee to the full extent provided by the
Certificate of Incorporation, Bylaws or the Code.
15. GOVERNING LAW. This Agreement shall be interpreted and enforced in
accordance with the laws of the State of Delaware, without regard to the
principles of conflicts of laws thereof.
16. BINDING EFFECT. This Agreement shall be binding upon Indemnitee and
upon the Corporation, its successors and assigns, and shall inure to the benefit
of Indemnitee and his or her heirs, estate, personal representatives, executors,
administrators and assigns and to the benefit of the Corporation, its successors
and assigns.
17. AMENDMENT AND TERMINATION. No amendment, modification, termination or
cancellation of this Agreement shall be effective unless in writing signed by
both parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and as of
the day and year first above written.
CORPORATION:
BARRA, INC.
a Delaware corporation
By:
---------------------------------
Andrew Rudd
Chairman of the Board and
Chief Executive Officer
INDEMNITEE:
------------------------------------
Name:
Title:
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BARRA, INC. - PROXY
ANNUAL MEETING
AUGUST 5, 1998
THIS PROXY IS SOLICITED BY AND ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Andrew Rudd, Ronald J. Lanstein and Norman J.
Laboe, or any of them, each with full power of substitution, the lawful
attorneys and proxies of the undersigned to vote all of the shares of Common
Stock of BARRA, Inc. which the undersigned shall be entitled to vote at the
Annual Meeting of the Shareholders to be held at BARRA, Inc., 2100 Milvia
Street, Berkeley, CA 94704, on Wednesday, August 5, 1998 at 2:00 p.m., local
time, and at any adjournments and postponements thereof, with all the powers
the undersigned would possess if personally present, upon matters noted
below. The shares represented by this Proxy shall be voted as follows:
(CONTINUED, AND TO BE MARKED, DATED AND SIGNED, ON THE OTHER SIDE)
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1. To elect as Directors of BARRA, Inc. the nominees listed below:
/ / FOR all nominees listed below / / WITHHOLD AUTHORITY
to vote for all the nominees
listed below
A. George Battle, John F. Casey, M. Blair Hull, Norman J. Laboe, Ronald J.
Lanstein, Andrew Rudd
NOTE: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A
LINE THROUGH THAT NOMINEE'S NAME. UNLESS THE AUTHORITY TO VOTE FOR ALL THE
FOREGOING NOMINEES IS WITHHELD, THIS PROXY WILL BE DEEMED TO CONFER
AUTHORITY FOR EVERY NOMINEE WHOSE NAME IS NOT STRUCK.
2. To approve the change in the state of incorporation of BARRA, Inc.
from the State of California to the State of Delaware.
FOR / / AGAINST / / ABSTAIN / /
3. To approve the increase in the number of authorized shares of Common
Stock of BARRA, Inc. from 40,000,000 to 75,000,000.
FOR / / AGAINST / / ABSTAIN / /
4. To ratify the appointment of Deloitte & Touche LLP as the Independent
Auditors of BARRA, Inc. for the fiscal year ending March 31, 1999.
FOR / / AGAINST / / ABSTAIN / /
5. In their discretion, the proxies are authorized to vote upon such
other business as may properly come before the meeting or any postponement
or adjournment thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER OF BARRA, INC. UNLESS OTHERWISE
SPECIFIED, THE SHARES SUBJECT TO THIS PROXY WILL BE VOTED FOR PROPOSALS 1,
2, 3 AND 4. THE BOARD OF DIRECTORS OF BARRA, INC. RECOMMENDS A VOTE "FOR"
PROPOSALS 1, 2, 3 AND 4.
I/We do / / or do not / /
expect to attend the annual meeting at BARRA, Inc., 2100
Milvia Street, Berkeley, CA 94704, on Wednesday, August 5,
1998 at 2:00 p.m., local time.
NOTE: Signature(s) should agree with name on stock
certificate(s) as printed thereon. Executors,
administrators, trustees and other fiduciaries should
so indicate when signing. If more than one fiduciary,
all should sign. ALL JOINT OWNERS MUST SIGN.
Signature(s)___________________________________Date____________________________
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