SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
[Amendment No. ..................]
Filed by the Registrant /X/
Filed by a Party other than the Registrant /_/
Check the appropriate box:
/X/ Preliminary Proxy Statement
/_/ Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/_/ Definitive Proxy Statement
/_/ Definitive Additional Materials
/_/ Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
SI Handling Systems, Inc.
(Name of Registrant as Specified in Its Charter)
Ronald J. Semanick, Corporate Secretary
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
|X| $125 per Exchange Act Rules O-11(c)(1)(ii), 14a-6(I)(1), 14a-6(I)(2) or
Item 22(a)(2) of Schedule 14A.
/_/ $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(I)(3).
/_/ Fee computed on table below per Exchange Act Rules 14a-6(I)(4) and O-11.
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule O-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:
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5) Total fee paid:
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/_/ Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:_____________________________________________
2) Form Schedule or Registration Statement No.: ______________________
3) Filing Party: ______________________________________________________
4) Date Filed: _______________________________________________________
<PAGE>
SI HANDLING SYSTEMS, INC.
600 Kuebler Road, Easton, Pennsylvania 18040
Telephone (610) 252-7321
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
The Annual Meeting of Shareholders of SI Handling Systems, Inc., a
Pennsylvania corporation (the "Company"), will be held at the Metropolitan
Edison Building, 2121 Sullivan Trail, Easton, Pennsylvania 18040 on
Wednesday, July 17, 1996, at 11:00 a.m., local time, for the following
purposes:
1. To elect five directors to the Board of Directors.
2. To approve the amendment and restatement of the Company's
Articles.
3. To approve the amendment and restatement of the Company's Bylaws.
4. To transact such other business as may properly come before the
meeting or at any adjournment or adjustments thereof.
IF YOU DO NOT EXPECT TO ATTEND THE MEETING IN PERSON, PLEASE SIGN AND
DATE THE ACCOMPANYING PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED POSTAGE
PAID ENVELOPE.
June 17, 1996 RONALD J. SEMANICK
Easton, Pennsylvania Secretary
<PAGE>
SI HANDLING SYSTEMS, INC.
600 Kuebler Road, Easton, Pennsylvania 18040
June 17, 1996
Proxy Statement
This Proxy Statement and the accompanying form of proxy are being mailed on
or about June 17, 1996 to the shareholders of SI Handling Systems, Inc. (the
"Company"). They are being furnished in connection with the solicitation by the
Board of Directors of proxies to be voted at the 1996 Annual Meeting of
Shareholders to be held at the Metropolitan Edison Building, 2121 Sullivan
Trail, Easton, Pennsylvania 18040 on Wednesday, July 17, 1996 at 11:00 a.m.,
local time, and at any adjournment thereof. The cost of such solicitation will
be borne by the Company.
Only the shareholders of record at the close of business on May 29, 1996,
of the outstanding shares of Common Stock of the Company will be entitled to
vote at the meeting. A shareholder giving a proxy may revoke it at any time by
giving written notice of such revocation to the Secretary of the Company before
it is exercised. A proxy may also be revoked by executing a later proxy or by
attending the meeting and voting in person, provided written notice of such
actions are given to the Secretary of the Company before the enclosed proxy is
exercised.
At the close of business as of the above record date, there were
outstanding and entitled to vote 2,448,696 shares of the Company's Common Stock.
Each holder of shares entitled to vote has the right to one vote for each share
standing in the holder's name on the books of the Company. However, in the
election of directors, voting may be cumulative so that each share has as many
votes as there are directors to be elected, and those votes may be distributed
among the nominees in any way the shareholder desires. To vote cumulatively, the
shareholder must write the words "cumulate for" followed by the name of the
nominee or nominees selected on the line provided under Item 1 of the proxy.
The shares represented by each properly executed proxy will be voted in the
manner specified by the shareholder. If instructions are not given, the shares
will be voted in the election of directors as specified below, for adoption of
the amendment and restatement of the Company's Articles and for approval of the
amendment and restatement of the Company's Bylaws. The proxies being solicited
may be voted cumulatively and the vote distributed among all or less than all of
the nominees for election as directors, if the proxy holders, in the exercise of
their discretion, deem it desirable.
Under Pennsylvania law and the Company's Bylaws, the presence, in person or
by proxy, of shareholders entitled to cast at least a majority of the votes that
all shareholders are entitled to cast will constitute a quorum for the purposes
of the Annual Meeting. Directors are elected by a plurality of the votes cast at
the meeting. Accordingly, directions to withhold authority will have no effect
on the outcome of the vote. For the adoption of the proposal to amend and
restate the Company's Articles, the affirmative vote of a majority of the votes
cast on the proposal is required. For the approval of the proposal to amend and
restate the Company's Bylaws, the affirmative vote of a majority of the
outstanding shares of Common Stock of the Company is required. Abstentions and
broker non-votes will be treated as present for purposes of determining the
presence of a quorum. Because directors are elected by a plurality of votes,
abstentions and broker non-votes will not have an impact on their election.
Abstentions and broker non-votes will not be counted as votes cast and therefore
will have no effect on the adoption of the Articles proposal. Abstentions and
broker non-votes will have the effect of votes against the Bylaws proposal.
2
<PAGE>
Principal Shareholders
Security Ownership of Management and Certain Beneficial Owners
The following table sets forth certain information as of May 29, 1996
(unless otherwise noted) regarding the ownership of Common Stock (I) by each
person known by the Company to be the beneficial owner of more than five percent
of the outstanding Common Stock, (ii) by each director or nominee of the
Company, (iii) by the executive officers of the Company named in the Summary
Compensation Table included elsewhere in this Proxy Statement, and (iv) by all
current executive officers and directors of the Company as a group. Unless
otherwise stated, the beneficial owners exercise sole voting and/or investment
power over their shares.
<TABLE>
<CAPTION>
Right To Acquire
Ownership Under
Options
Number Of Shares Exercisable Percentage
Beneficial Owner Beneficially Owned Within 60 Days of Class(1)
<S> <C> <C> <C>
Trigran Investments, L.P. (2)............... 166,000 -- 6.78%
155 Pfingsten, Suite 360
Deerfield, IL 60015
L. Jack Bradt (3)........................... 251,548 -- 10.27%
10 Ivy Court
Easton, Pennsylvania 18045
Edward J. Fahey ............................ 5,000 --
Leonard S. Yurkovic ........................ 40,572 9,300 2.03%
Elmer D. Gates ............................. -- --
Michael J. Gausling ........................ -- --
James L. Thatcher .......................... 12,229 750
All current directors and executive
officers as a group
[11 persons] (3)......................... 324,657 31,650 14.37%
- ---------------------------
<FN>
(1) The percentage for each individual, entity or group is based on the
aggregate number of shares outstanding as of May 29, 1996 (2,448,696) and
all shares issuable upon the exercise of outstanding stock options held by
each individual or group that are presently exercisable or exercisable
within 60 days after May 29, 1996. Percentages of less than one percent are
not shown.
(2) This information is presented in reliance on information disclosed in a
Schedule 13D filed with the Securities and Exchange Commission on February
1, 1996.
(3) Includes 47,481 shares held by members of Mr. Bradt's immediate family. Mr.
Bradt disclaims beneficial ownership of such shares.
</FN>
</TABLE>
3
<PAGE>
ELECTION OF DIRECTORS
At the meeting, five nominees will stand for election as directors of the
Company to hold office for a period of one year or until their successors have
been elected and qualify.
If the enclosed proxy is duly executed and received in time for the
meeting, it is the intention of the persons named therein to vote the shares
represented thereby for the five persons nominated for election as directors
unless authority is withheld.
If any nominee should refuse or be unable to serve, the proxy will be voted
for such other person as shall be designated by the Board of Directors.
Management has no knowledge that any of the nominees will refuse or be unable to
serve.
Information concerning the nominees for election as directors is set forth
below:
<TABLE>
<CAPTION>
Name, Other Positions Or Offices With The Company Director
and Principal Occupation For Past Five Years Since Age
<S> <C> <C>
L. Jack Bradt............................................................ 1958 68
Northampton County Health and Human Services Director,
Entrepreneur-in-Residence at Lehigh University, and founder,
former CEO and Chairman of the Board of the Company.
Edward J. Fahey.......................................................... 1992 67
Chairman of the Board of the Company, former Vice President
of Engineered Systems Company (1989-1993), manufacturers of
aircraft arresting systems and mid-air recovery equipment.
Elmer D. Gates........................................................... 1996 66
Vice Chairman of Fuller Company, a company involved in the
design and manufacture of plants, machinery and equipment
used in the cement, paper, power and processing industries. (1)
Michael J. Gausling...................................................... 1995 38
President, CEO, and founder of STC Technologies, Inc.,
a manufacturer of clinical diagnostic products.
Leonard S. Yurkovic...................................................... 1983 58
President and Chief Executive Officer of the Company.
- -----------------------------
<FN>
(1) Mr. Gates is a director of Pennsylvania Power and Light Company, an
electric utility providing service to various counties in Central Eastern
Pennsylvania, and Vice Chairman and a director of Ambassador Bank. He was
also Chairman, Chief Executive Officer, and a director of Birdsboro
Ferrocast, Inc., a steel foundry located in Birdsboro, PA. In 1992,
Birdsboro Ferrocast filed a petition under Chapter 11 of the Bankruptcy
Code.
</FN>
</TABLE>
4
<PAGE>
ADDITIONAL INFORMATION CONCERNING CERTAIN DIRECTORS
AND COMMITTEES
There are two standing committees of the Board of Directors: the Audit
Committee and the Compensation Committee.
The Audit Committee reviews and discusses with the Company's external
auditors the scope of their annual audit and related fees as well as any other
services provided by them. It reviews with the auditors the results of the audit
and the year-end financial statements and recommends to the Board of Directors
matters related to the selection and engagement of the independent auditors. The
members of the Audit Committee during fiscal year 1996 were Mr. Bradt, Chairman,
and Messrs. Bergkvist (until his retirement), and Adams (until his resignation),
and Messrs. Gates and Gausling, both of whom were additions to the Board of
Directors during fiscal year 1996.
The Compensation Committee reviews and recommends to the Board of Directors
matters with respect to the remuneration arrangements for officers and directors
of the Company including salaries and other direct compensation and stock option
awards. Mr. Gausling succeeded Mr. Adams as chairman of the Compensation
Committee. The other members of the Compensation Committee during fiscal year
1996 were Mr. Bergkvist (until his retirement) and Messrs. Bradt and Gates, the
latter having been appointed to the Board of Directors during fiscal year 1996.
There were two meetings of the Audit Committee and one meeting of the
Compensation Committee during the recently ended fiscal year. The Board of
Directors met four times during the year. Each director attended more than 75%
of the meetings of the Board of Directors and committees of the Board of
Directors on which he served.
COMPENSATION OF DIRECTORS
Directors who are employees of the Company receive no additional
remuneration for their services as directors. The Chairman of the Board of
Directors and other non-employee directors receive an annual retainer of $12,000
and $6,000, respectively; a fee of $1,200 for each Board meeting attended; and a
fee of $200 for each Board meeting held by telephone conference. There are no
additional directors' fees paid for serving on the Audit and Compensation
Committees of the Board of Directors. Directors are also reimbursed for their
customary and usual expenses incurred in attending Board and Committee Meetings
including those for travel, food, and lodging.
The Company permits its directors, at their election, to defer receipt of
payment of directors' fees. During fiscal 1996, $18,000 of directors' fees was
deferred. Deferred directors' fees accrue interest at the prime rate of interest
charged by the Company's principal bank. During fiscal 1996, distributions under
the Directors' Deferred Compensation Plan totaled $18,707. The Board of
Directors has under consideration a proposal to permit directors to elect
deferral of fees in units equivalent to shares of Common Stock of the Company.
5
<PAGE>
EXECUTIVE COMPENSATION
Compensation Committee Report on Executive Compensation
The Securities and Exchange Commission has promulgated regulations
requiring Proxy Statements to contain more detailed and uniform reporting of
executive compensation and an explanation of the philosophy and methods used in
determining executive compensation.
Compensation Philosophy and Practices
It is the Company's policy to offer internally and externally competitive
compensation opportunities for its employees based on a combination of factors,
including corporate performance and individual contribution to the business
consistent with corporate needs and objectives.
The Compensation Committee of the Company, whose members are identified
above, annually reviews and recommends compensation for the Company's executive
officers to the Board of Directors. The annual compensation review permits an
ongoing evaluation of the link between the Company's performance and its
executive compensation in the context of the compensation programs of other
companies. A significant part of executive officers' compensation is dependent
upon the Company's annual financial performance and return on equity.
There are four basic elements to executive officer compensation: salary,
bonus, auto allowance, and stock options granted at market value vesting over a
period of time, typically four years. The stock option program rewards executive
officers for successful long-term strategic management and enhancement of
shareholder value by providing an opportunity to acquire equity ownership in the
Company stressing both annual and long-term performance and supporting a
performance-oriented environment which allows the Company to attract and retain
qualified management personnel. The Compensation Committee believes equity
ownership in the Company by management aligns the interest of shareholders and
management.
Salaries for executive officers are determined with reference to a position
rate for each officer. The position rates are determined annually by evaluating
the responsibilities of the position and taking into consideration, among other
things, salaries paid to other executives in comparable positions in
comparably-sized companies, levels of experience, and job responsibilities. The
Compensation Committee determines adjustments to executive officer salary based
on the recommendation of the Chief Executive Officer. The salary adjustment
recommendations are based on performance criteria such as financial performance,
strategic decisions, personnel development, individual performance, and
potential of the individual in the job.
The Compensation Committee awards bonuses to the Company's executive
officers pursuant to an existing Executive Officer Incentive Plan. The bonus
amounts for executive officers is at risk and will vary from year to year. The
bonus pool is calculated based on a formula tied principally to the Company's
profitability and return on equity. The pool is allocated by the Compensation
Committee, on the recommendation of the Chief Executive Officer, among the
executive officers, based on a series of factors, including financial
objectives, other business objectives, and assessment of personal contribution.
The financial objectives include a pre-tax earnings target and effective
management of the Company's operations to provide positive cash flow and backlog
adequacy.
The Compensation Committee may grant stock options each year to executive
officers and key employees based on a variety of factors, including the
financial performance of the Company and an assessment of personal contribution.
The options are granted with an
6
<PAGE>
exercise price equal to the market price of the Company's Common Stock on the
date of grant, vest over a period of four years, and expire after five years.
The options provide value to the recipients as the price of the Company's stock
appreciates from the date when the options were granted. Historically, stock
options have been granted based on position rate. The size of previous option
grants held by an executive officer are considered in determining annual award
levels. The target is to provide executive officers with equity ownership in the
Company and align closely executive interests with the longer term interests of
shareholders.
CEO Compensation
Salary and Stock Options
The Company's most highly compensated officer was Leonard S. Yurkovic,
President and CEO. Mr. Yurkovic's performance was reviewed by the Compensation
Committee and discussed with the Board of Directors and Mr. Yurkovic. The
Compensation Committee did not increase the Chief Executive Officer's salary for
fiscal 1996 nor did it grant any stock options because the Company's fiscal 1995
operating results were negative and, thus return on equity and earnings from
operations before income taxes targets were not met.
Bonus Plan
Fiscal 1996 was a year of transition for the Company. In addition to
leading the Company through its most financially successful year, Mr. Yurkovic
initiated and completed the restructuring of the Company into focused business
units. The Compensation Committee granted a bonus of $40,000 pertaining to the
Executive Officer Incentive Plan to Mr. Yurkovic for the fiscal year ended March
3, 1996. The bonus was predicated on the Company achieving its corporate
"performance hurdle" of planned pre-tax earnings and effective management of the
Company's operations to provide positive cash flow.
No officer or director of the Company has an employment contract with the
Company.
Conclusion
The Company's executive compensation program is designed to link the
performance of management to accomplishing both short and long-term earnings
goals and building shareholder value. The individual elements are understandable
and together provide compensation that is well suited for a Company of our size.
The management team understands the linkage of operating performance and their
own compensation.
The foregoing constitutes the report of the Compensation Committee of the
Board of Directors for the Company's fiscal year ended March 3, 1996.
COMPENSATION COMMITTEE
Michael J. Gausling, Chairman
L. Jack Bradt
Elmer D. Gates
7
<PAGE>
Compensation
Set forth below is certain information relating to compensation received by
the Company's "Named Executive Officers" whose total annual salary and bonus for
the fiscal year ended March 3, 1996 exceeded $100,000. No other officer of the
Company received in excess of $100,000 in total annual salary and bonus for
fiscal 1996.
<TABLE>
<CAPTION>
Summary Compensation Table
Long-Term
Comp.
Fiscal Other Annual Stock All Other
Year Salary Bonus Compensation Options Compensation
Name and Position (1) ($)(2) ($) ($)(3) (#)(4) ($)(5)
<S> <C> <C> <C> <C> <C> <C>
Leonard S. Yurkovic 1996 $152,885 $40,000 $4,620 -0- $10,462
President and Chief 1995 150,000 -0- 4,200 7,500 5,538
Executive Officer 1994 146,687 -0- 4,200 -0- 5,692
James L. Thatcher 1996 $ 87,654 22,566 4,620 -0- 5,999
Vice President - 1995 86,000 -0- 4,200 1,500 3,440
Manufacturing 1994 85,307 -0- 4,200 -0- 3,409
& Assembly
Services and
Customer &
Software Services
- ------------------------
<FN>
(1) The Company's fiscal year ends on the Sunday nearest to the last day of
February. The fiscal years ended March 3, 1996, February 26, 1995, and
February 27, 1994 were 53, 52, and 52 weeks, respectively.
(2) This column includes employee pre-tax contributions to the Company's 401(k)
Retirement Savings Plan.
(3) This column consists of an auto allowance of $385 per month for the
business usage of personal automobiles. Prior to March 1, 1995 the auto
allowance was $350 per month.
(4) Options become exercisable in increments of 25% on the anniversary date of
the grant. Thus at the end of four years the options are fully exercisable.
Currently, all options have a term of five years. All stock option figures
have been adjusted to reflect stock splits and dividends.
(5) This column includes the amounts expensed for financial reporting purposes
for Company contributions to the Company's 401(k) Retirement Savings Plan
pertaining to basic, matching, and profit sharing contributions.
</FN>
</TABLE>
Stock Options Granted to Named Executive Officers During Last Fiscal Year
No stock options were granted to the Named Executive Officers during fiscal
1996.
8
<PAGE>
Stock Options Exercised During Fiscal Year 1996 and Held by Named Executive
Officers as of March 3, 1996.
The following table sets forth certain information regarding options for
the purchase of the Company's Common Stock that were exercised and/or held by
the Company's Named Executive Officers during fiscal 1996.
Aggregated Option Exercises in Fiscal Year Ended March 3, 1996
And Fiscal Year End Option Values
<TABLE>
<CAPTION>
Number of Value Of
Shares Covered Unexercised
# of By Unexercised In-The-Money
Shares Options At Options At
Acquired March 3, 1996 March 3, 1996
On Value Exercisable/ Exercisable/
Name and Position Exercise Realized Unexercisable Unexercisable
<S> <C> <C> <C> <C>
Leonard S. Yurkovic 7,975 (1) $32,931 6,038/7,012 $ 0/0
James L. Thatcher 1,110 5,348 7,566/1,125 21,845/0
- ------------------------
<FN>
(1) With approval from the Compensation Committee, on September 6, 1995, Mr.
Yurkovic delivered 3,162 shares of common stock with a market value of
$7.75 per share to the Company in order to exercise options to obtain 6,600
shares. On June 16, 1995, Mr. Yurkovic acquired 1,375 shares of common
stock by exercising 1,375 options to obtain the shares.
</FN>
9
<PAGE>
STOCK PERFORMANCE CHART
The following graph illustrates the cumulative total shareholder return on
the Company's (SIHS) Common Stock during the five fiscal years ended March 3,
1996 with comparison to the cumulative total return on the NASDAQ Stock Market -
US Index, a Peer Group of Construction and Related Machinery Companies [SIC Code
353], and a Peer Group of SIHS depicting Conveyor and Conveying Equipment
Companies. This comparison assumes $100 was invested on March 1, 1991 in the
Company's Common Stock and in each of the foregoing indexes and assumes
reinvestment of dividends.
[GRAPHIC OMITTED - PERFORMANCE CHART]
</TABLE>
<TABLE>
<CAPTION>
3/1/91 2/28/92 2/26/93 2/25/94 2/24/95 3/1/96
<S> <C> <C> <C> <C> <C> <C>
SI Handling Systems, Inc. 100 253 178 287 204 228
(1) Peer Group - SIC Code 353 100 104 109 119 140 241
(2) Peer Group - Conveyor, Etc. 100 143 95 80 65 62
Nasdaq Stock Market -
US Index 100 158 165 193 197 277
- ------------------------
<FN>
(1) The Peer Group of Construction and Related Machinery Companies [SIC Code
353] from the 1995 Nasdaq Fact Book & Company Directory includes: A.S.V.,
Inc., C.E.C. Industries Corporation, Cascade Corporation, Dreco Energy
Services Ltd., ERC Industries, Inc., Gardner Denver Machinery Inc., JLG
Industries, Inc., Lufkin Industries, Inc., Newpark Resources, Inc., Quipp,
Inc., The Raymond Corporation, Rexworks Inc., and SI Handling Systems, Inc.
The total returns of each member of the Peer Group were determined in
accordance with Securities and Exchange Commission regulations; i.e.,
weighted according to each such issuer's stock market capitalization.
(2) The Peer Group of Conveyor and Conveying Equipment Companies includes:
Interlake Corp., Prob Robots, Inc., SI Handling Systems, Inc., and Transact
International, Inc. The Company included the same members of the Peer Group
in constructing the stock performance chart as it did in the prior year.
This Peer Group is shown here because it was used last year; it will be
dropped in 1997 in favor of the Peer Group of Construction and Related
Machinery Companies [SIC Code 353] from the 1995 Nasdaq Fact Book & Company
Directory. The total returns of each member of the Peer Group were
determined in accordance with Securities and Exchange Commission
regulations; i.e., weighted according to each such issuer's stock market
capitalization.
</FN>
</TABLE>
10
<PAGE>
AMENDMENT AND RESTATEMENT OF THE COMPANY'S ARTICLES
The Board of Directors has recommended to the shareholders the adoption of
the proposed amendment and restatement of the Articles of the Company in the
form attached as Exhibit A to this proxy statement. The amendments are designed
to update the Articles and provide for the elimination of cumulative voting in
the election of directors.
Elimination of Cumulative Voting
The Pennsylvania Business Corporation Law of 1988, as amended (the "BCL"),
provides that shareholders shall be entitled to cumulate their votes in the
election of directors unless otherwise provided in the Articles. While the
shareholders of the Company adopted an amendment to the Company's Bylaws in 1971
to eliminate cumulative voting, the amendment was not included in the Articles
as required by the BCL. The Board of Directors has therefore decided to
recommend to the shareholders at this time the amendment to the Articles to
eliminate cumulative voting.
Under cumulative voting, a shareholder is entitled to multiply the number
of shares held by the number of directors to be elected and to cast those votes
for one or more candidates. Thus, a shareholder owning 100 shares of Common
Stock would be entitled at the Annual Meeting at which five directors are to be
elected to 500 votes, which could be cast for one candidate or spread among two,
three, four or five candidates. Cumulative voting enables a minority shareholder
or group of minority shareholders holding slightly more than 16 2/3% of the
shares voting at the meeting to elect one director when five directors are to be
elected. If this proposal is approved by the shareholders, a shareholder would
still be able to vote for only one director but would only have a number of
votes equal to the number of shares held.
As noted above, with cumulative voting in effect, it would be possible for
representation on the Board of Directors to be obtained by minority shareholders
whose interests and goals might be inconsistent with those of a majority of the
shareholders. The Board of Directors believes that any such representation could
be disruptive and could impair the efficient management of the Company for the
benefit of shareholders generally. The non-cumulative or "straight" voting
method of election would foreclose the possibility that the holders of a
minority of the shares (acquired through a tender offer or otherwise) might
elect one or more directors. The Board of Directors believes that this would be
in the best interests of the Company and its shareholders.
The change from cumulative voting to straight voting in the election of
directors could, under certain circumstances, make it more difficult for a
shareholder who acquires a substantial number of shares of the Company's Common
Stock to obtain certain representation on the Board of Directors. See also
"Amendment and Restatement of the Company's Bylaws -- Antitakeover Provisions"
for a discussion of amendments to the Bylaws which may delay or discourage a
person desiring to take over the Company.
Other Changes
The other amendments to the Articles delete Sections 3 and 4 as being no
longer necessary in view of amendments to the BCL, update the address of the
Company's registered office in Section 2 and state in new Section 3 that the
Company was incorporated under the Pennsylvania Business Corporation Law of
1933.
11
<PAGE>
Required Vote of Shareholders
The favorable vote of a majority of the votes cast on this proposal is
required for adoption of the amendment and restatement of the Company's
Articles.
Shareholders are not entitled to dissenting shareholder rights with respect
to this proposal.
The Board of Directors recommends that the shareholders vote FOR the
amendment and restatement of the Company's Articles.
AMENDMENT AND RESTATEMENT OF THE COMPANY'S BYLAWS
The Board of Directors has recommended to the shareholders for their
approval that the Company's Bylaws be amended and restated in the form attached
as Exhibit B to this proxy statement (the "New Bylaws"). The amendments are
designed to update and modernize the current Bylaws (the "Old Bylaws"), giving
effect to a number of changes in the BCL which have taken place over the last
ten years. The amendments also permit the Board of Directors to amend the Bylaws
without shareholder approval except with respect to matters that are expressly
committed by the BCL to the shareholders.
The following is a summary of the material changes made by the New Bylaws.
Parenthetical references are to the sections of the New Bylaws. The following
description is qualified in its entirety by reference to the full text of the
New Bylaws.
Notices
The notice provisions contained in Article II of the New Bylaws add
provisions authorized by the BCL. These include permission to send notice to
shareholders by bulk mail if the notice is deposited in the U.S. mail at least
20 days prior to the date of the meeting (ss. 2.01(b)); shortening the required
notice period for shareholder meetings which are not called for the purpose of
considering a fundamental change from ten days to five days (ss. 2.03(a)); and
eliminating the requirement of notice if the giving of such notice would be
unlawful (ss. 2.06(a)) or if the Company has been unable to communicate with a
shareholder for more than 24 consecutive months (ss. 2.06(b)). The New Bylaws
also permit the Board of Directors to provide by resolution for one or more
persons to participate in a shareholder meeting by conference telephone (ss.
2.07).
The New Bylaws provide, as allowed by the BCL, that any resolution
contained in the notice of meeting may be adopted with such clarifying or other
amendments as do not enlarge its original purpose (ss. 2.05).
Shareholder Meetings
The Old Bylaws provide that the Annual Meeting of Shareholders will be held
within six months of the close of the fiscal year and, if the meeting is not
held within a calendar year, any shareholder may call the meeting at any time
thereafter. The New Bylaws provide in Section 3.02 that the date of the Annual
Meeting may be fixed by the Board of Directors but, if no such date is fixed,
the meeting shall be held on the third Wednesday of July. If the Annual Meeting
shall not have been held within six months after the designated date, any
shareholder may call the meeting at any time thereafter.
12
<PAGE>
The Old Bylaws provide that special meetings of the shareholders may be
called at any time by the President, the Board of Directors or the holders of a
majority of the shares entitled to vote. The New Bylaws provide that special
meetings may be called by the President or the Board of Directors (ss. 3.03).
This means that the holders of a majority of the outstanding shares would no
longer be able to call a special meeting and would therefore have to wait until
the next Annual Meeting to take any desired action. This therefore may have the
effect of delaying a change of control of the Company.
The New Bylaws carry forward the provision in the Old Bylaws that, when a
meeting for the election of directors has been adjourned for lack of a quorum,
those shareholders attending the adjourned meeting may elect directors even
though they do not constitute a quorum (ss. 3.04(d)). The New Bylaws also
contain a similar provision for other action by the shareholders if the meeting
has been adjourned for at least 15 days and the notice states such action may be
taken (ss. 3.04 (e)).
The New Bylaws in Section 3.05 state the rule as set forth in the BCL that
whenever any corporate action is to be taken by vote of the shareholders, it
shall be authorized upon receiving the affirmative vote of a majority of the
votes cast by all shareholders entitled to vote thereon. The Old Bylaws require
the vote of a majority of the outstanding shares in order to amend the Bylaws
but are silent with respect to other matters.
The New Bylaws modernize the proxy voting rules by providing for electronic
transmission of a proxy so long as it sets forth a confidential and unique
identification number or other mark furnished by the Company to the shareholder
(ss. 3.08(b)). The New Bylaws also add a number of rules for voting by various
persons as set forth in the BCL (ss.ss. 3.08(a) (3), 3.09, 3.10, 3.11, 3.12(c)
and 3.15).
The Old Bylaws require that a record date for shareholders entitled to vote
or to receive distributions cannot be more than 50 days prior to the date of the
meeting or distribution. The New Bylaws expand this period to 90 days (ss.
3.12(a)). If no record date is fixed, the New Bylaws change the assumed record
date from ten days preceding the meeting to the day before the date on which
notice of the meeting is given (ss. 3.12(b)). The New Bylaws also provide that
the record date shall apply to any adjournment of the meeting unless the board
fixes a new record date for the adjourned meeting.
The New Bylaws also describe in greater detail the duties of the judge or
judges of election (ss. 3.14) and specifically authorize the payment by the
Company of the expenses of solicitation of proxies on behalf of the Board of
Directors or its nominees (ss. 3.08(d)).
The New Bylaws provide that in the election of directors voting need not be
by ballot unless required by the vote of the shareholders before voting begins
(ss. 4.02(e)). The Old Bylaws require voting by ballot if demanded by any
shareholder.
Election and Removal of Directors
The Old Bylaws provide that the Board of Directors shall have five members.
The New Bylaws state that the number of directors shall be determined from time
to time by resolution of the board (ss. 4.03(a)). Accordingly, the New Bylaws
will allow the board to increase or decrease the number of directors without
further action by the shareholders.
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The New Bylaws require in Section 4.02 that any shareholder desiring to
nominate a person for election as a director must give written notice not less
than 60 days prior to the date fixed by the Bylaws for the Annual Meeting of
Shareholders. The notice must contain information regarding the nominee and the
consent of the nominee to serve if elected. If the procedure is not followed,
the judge or judges of election or, if they have not been appointed, the
presiding officer of the meeting may declare that the nomination shall be
disregarded. This Section does not apply to nominations made by the Board of
Directors.
The Old Bylaws are silent on the removal of directors although the BCL
provides that, unless otherwise provided in a Bylaw adopted by the shareholders,
directors may be removed by vote of the shareholders without assigning cause.
The New Bylaws specifically provide that directors may be removed by vote of the
shareholders only for cause (ss. 4.05(a)). The New Bylaws also provide, as
permitted by the BCL, that the board may declare vacant the office of a director
who has been judicially declared of unsound mind or has been convicted of an
offense punishable by imprisonment for a term of more than one year or who has
not accepted the office within 60 days after selection by written notice or by
attending a meeting.
Limitation of Liability and Indemnification of Directors and Officers
The New Bylaws carry forward the provisions of the Old Bylaws limiting the
liability of directors except for self-dealing, willful misconduct or
recklessness or liability under any criminal statute or for payment of taxes
(ss. 7.01). The New Bylaws also extend this limitation to officers of the
Company as well as stating that the officers shall be subject to the same
standards of conduct as the directors (ss. 5.01(c)).
The New Bylaws also carry forward the provisions of the Old Bylaws on
indemnification of and advancing expenses to directors, officers, employees and
agents (ss. 7.02) and the requirement that any change in Article VII be adopted
by 75% of the Board of Directors or 75% of the outstanding shares except that
decreases in exposure or increases in indemnification rights under the BCL shall
automatically be incorporated in Article VII unless prohibited by the BCL (ss.
7.04).
Conflict of Interest Transactions
The New Bylaws add Section 8.04, taken from the BCL, which states that no
transaction in which a director or officer has an interest shall be void or
voidable if, after full disclosure, the transaction is approved by a majority of
disinterested directors or by the shareholders or if the transaction is fair to
the Company at the time it is authorized.
Amendment of Bylaws
The Old Bylaws may only be amended by the vote of a majority of the
outstanding shares. The New Bylaws permit amendments by either (i) the
shareholders by a majority of the votes cast at a meeting of shareholders or
(ii) with respect to matters that are not expressly committed to the
shareholders by the BCL, the Board of Directors.
Miscellaneous Changes
The New Bylaws update the location of the registered office of the Company
(ss. 1.01), the Company's fiscal year (ss. 1.03) and the procedures for Board of
Director meetings and committees (ss. 2.02, 2.07, 4.01(b) and 4.06-4.11).
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The provision in the Old Bylaws allowing the payment of dividends out of
surplus has been eliminated due to the deletion of this concept from the BCL.
The requirement for the furnishing of an annual statement at the Annual Meeting
has also been eliminated in the light of the more extensive requirements of the
SEC proxy rules.
Antitakeover Provisions
The New Bylaws carry forward the action taken by the Board of Directors in
1990 determining that certain antitakeover provisions in the BCL (subchapter 25G
relating to control share acquisitions and subchapter 25H relating to
disgorgement) shall not be applicable to the Company (ss. 8.08).
Certain provisions of the New Bylaws discussed above may delay or
discourage a person desiring to take over the Company, namely, the elimination
of the right of shareholders to call a special meeting; the requirement for
advance nominations of directors by shareholders; and the provision limiting the
removal of directors other than for cause. The Board of Directors does not know
of any attempt or intention by any person at the present time to take over the
Company.
Required Vote of Shareholders
The favorable vote of a majority of the outstanding shares of Common Stock
is required for the approval of the amendment and restatement of the Company's
Bylaws.
The Board of Directors recommends that the shareholders vote FOR the
amendment and restatement of the Company's Bylaws.
--------------------------------------------------------------
INDEPENDENT ACCOUNTANTS
The Company's independent public accountants beginning in 1968 and
thereafter have been KPMG Peat Marwick LLP, and such firm is expected to be the
Company's independent auditors for the current year. Representatives of that
firm are expected to be present at the shareholders' meeting and available for
questions and will be given an opportunity to make a statement if they so
desire.
1997 SHAREHOLDER PROPOSALS
Appropriate shareholder proposals which are intended to be presented at the
1997 Annual Shareholders' Meeting must be received by the Company no later than
February 17, 1997, in order to be included in the 1997 proxy materials.
OTHER MATTERS
The Company may pay brokers, nominees, fiduciaries, or other custodians for
their reasonable expenses in sending proxy materials to, and obtaining
instructions from, persons for whom they hold stock of the Company. The Company
expects to solicit proxies primarily by mail, but directors, officers, and
regular employees of the Company may also solicit in person, by telephone,
telegraph, or telefax.
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As of the date of this Proxy Statement, management has no knowledge of any
matters to be presented at the meeting other than those referred to above. If
any other matters properly come before the meeting, the persons named in the
accompanying form of proxy intend to vote such proxy in accordance with their
best judgement.
THE COMPANY WILL PROVIDE WITHOUT CHARGE, ON THE WRITTEN REQUEST OF ANY
SHAREHOLDER, A COPY OF ITS ANNUAL REPORT ON FORM 10-K, FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION FOR THE FISCAL YEAR ENDED MARCH 3, 1996. REQUESTS SHOULD
BE DIRECTED TO THE SECRETARY OF THE COMPANY, 600 KUEBLER ROAD, EASTON,
PENNSYLVANIA 18040.
16
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Exhibit A
PROPOSED AMENDED AND RESTATED
A R T I C L E S
OF
SI HANDLING SYSTEMS, INC.
(a Pennsylvania Registered Corporation)
...oo0oo...
(Deletions are [bracketed]; additions are underscored)
-----------
1. The name of the corporation is:
SI HANDLING SYSTEMS, INC.
2. The address of its registered office in this Commonwealth is:
600 Kuebler Road
Easton, Northampton County, Pennsylvania 18040
---------------------------------------------------------------------------
[3. The purpose or purposes of the corporation are: to design, manufacture and
sell materials handling equipment and products allied therewith.]
[4. The term of its existence is perpetual.]
3. The corporation was incorporated under the Business Corporation Law of
1933.
- --------------------------------------------------------------------------------
[5]4. The authorized capital stock of this corporation shall be five million
-- shares of common stock par value $1.00 per share.
5. The shareholders of the corporation shall not have the right to cumulate
their votes for the election of directors.
- --------------------------------------------------------------------------------
A-1
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Exhibit B
PROPOSED AMENDED AND RESTATED
B Y L A W S
OF
SI HANDLING SYSTEMS, INC.
(a Pennsylvania Registered Corporation)
...oo0oo...
ARTICLE I
Offices and Fiscal Year
Section 1.01. Registered Office.--The registered office of the corporation
in the Commonwealth of Pennsylvania shall be at 600 Kuebler Road, Easton,
Pennsylvania 18040 until otherwise established by an amendment of the articles
of incorporation (the "articles") or by the board of directors and a record of
such change is filed with the Department of State in the manner provided by law.
Section 1.02. Other Offices.--The corporation may also have offices at such
other places within or without the Commonwealth of Pennsylvania as the board of
directors may from time to time appoint or the business of the corporation may
require.
Section 1.03. Fiscal Year.--The fiscal year of the corporation shall end on
the Sunday nearest the last day of February in each year.
ARTICLE II
Notice - Waivers - Meetings Generally
Section 2.01. Manner of Giving Notice.
(a) General Rule.--Whenever written notice is required to be given to any
person under the provisions of the Business Corporation Law or by the articles
or these bylaws, it may be given to the person either personally or by sending a
copy thereof by first class or express mail, postage prepaid, or by telegram
(with messenger service specified), telex or TWX (with answer back received) or
courier service, charges prepaid, or by facsimile transmission, to the address
(or to the telex, TWX, facsimile or telephone number) of the person appearing on
the books of the corporation or, in the case of directors, supplied by the
director to the corporation for the purpose of notice. If the notice is sent by
mail, telegraph or courier service, it shall be deemed to have been given to the
person entitled thereto when deposited in the United States mail or with a
telegraph office or courier service for delivery to that person or, in the case
of telex or TWX, when dispatched or, in the case of facsimile transmission, when
received. A notice of meeting shall specify the place, day and hour of the
meeting and any other information required by any other provision of the
Business Corporation Law, the articles or these bylaws.
(b) Bulk Mail.--If the corporation has more than 30 shareholders, notice of
any regular or special meeting of the shareholders, or any other notice required
by the Business Corporation Law or by the articles or these bylaws to be given
to all shareholders or to all holders of a class or series of shares, may be
given by any class of postpaid mail if the notice is deposited
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in the United States mail at least 20 days prior to the day named for the
meeting or any corporate or shareholder action specified in the notice.
(c) Adjourned Shareholder Meetings.--When a meeting of shareholders is
adjourned, it shall not be necessary to give any notice of the adjourned meeting
or of the business to be transacted at an adjourned meeting, other than by
announcement at the meeting at which the adjournment is taken, unless the board
fixes a new record date for the adjourned meeting in which event notice shall be
given in accordance with Section 2.03.
Section 2.02. Notice of Meetings of Board of Directors.--Notice of a
regular meeting of the board of directors need not be given. Notice of every
special meeting of the board of directors shall be given to each director by
telephone or in writing at least 24 hours (in the case of notice by telephone,
telex, TWX or facsimile transmission) or 48 hours (in the case of notice by
telegraph, courier service or express mail) or five days (in the case of notice
by first class mail) before the time at which the meeting is to be held. Every
such notice shall state the time and place of the meeting. Neither the business
to be transacted at, nor the purpose of, any regular or special meeting of the
board need be specified in a notice of the meeting.
Section 2.03. Notice of Meetings of Shareholders.
(a) General Rule.--Except as otherwise provided in Section 2.01(b), written
notice of every meeting of the shareholders shall be given by, or at the
direction of, the secretary or other authorized person to each shareholder of
record entitled to vote at the meeting at least (1) ten days prior to the day
named for a meeting (and, in case of a meeting called to consider a merger,
consolidation, share exchange or division, to each shareholder of record not
entitled to vote at the meeting) called to consider a fundamental change under
15 Pa.C.S. Chapter 19 or (2) five days prior to the day named for the meeting in
any other case. If the secretary neglects or refuses to give notice of a
meeting, the person or persons calling the meeting may do so. In the case of a
special meeting of shareholders, the notice shall specify the general nature of
the business to be transacted.
(b) Notice of Action by Shareholders on Bylaws.--In the case of a meeting
of shareholders that has as one of its purposes action on the bylaws, written
notice shall be given to each shareholder that the purpose, or one of the
purposes, of the meeting is to consider the adoption, amendment or repeal of the
bylaws. There shall be included in, or enclosed with, the notice a copy of the
proposed amendment or a summary of the changes to be effected thereby.
(c) Notice of Action by Shareholders on Fundamental Change.--In the case of
a meeting of the shareholders that has as one of its purposes action with
respect to any fundamental change under 15 Pa.C.S. Chapter 19, each shareholder
shall be given, together with written notice of the meeting, a copy or summary
of the amendment or plan to be considered at the meeting in compliance with the
provisions of Chapter 19.
(d) Notice of Action by Shareholders Giving Rise to Dissenters Rights.--In
the case of a meeting of the shareholders that has as one of its purposes action
that would give rise to dissenters rights under the provisions of 15 Pa.C.S.
Subchapter 15D, each shareholder shall be given, together with written notice of
the meeting:
(1) a statement that the shareholders have a right to dissent and
obtain payment of the fair value of their shares by complying with the
provisions of Subchapter 15D (relating to dissenters rights); and
(2) a copy of Subchapter 15D.
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Section 2.04. Waiver of Notice.
(a) Written Waiver.--Whenever any written notice is required to be given
under the provisions of the Business Corporation Law, the articles or these
bylaws, a waiver thereof in writing, signed by the person or persons entitled to
the notice, whether before or after the time stated therein, shall be deemed
equivalent to the giving of the notice. Neither the business to be transacted
at, nor the purpose of, a meeting need be specified in the waiver of notice of
the meeting.
(b) Waiver by Attendance.--Attendance of a person at any meeting shall
constitute a waiver of notice of the meeting except where a person attends a
meeting for the express purpose of objecting, at the beginning of the meeting,
to the transaction of any business because the meeting was not lawfully called
or convened.
Section 2.05. Modification of Proposal Contained in Notice.--Whenever the
language of a proposed resolution is included in a written notice of a meeting
required to be given under the provisions of the Business Corporation Law or the
articles or these bylaws, the meeting considering the resolution may without
further notice adopt it with such clarifying or other amendments as do not
enlarge its original purpose.
Section 2.06. Exception to Requirement of Notice.
(a) General Rule.--Whenever any notice or communication is required to be
given to any person under the provisions of the Business Corporation Law or by
the articles or these bylaws or by the terms of any agreement or other
instrument or as a condition precedent to taking any corporate action and
communication with that person is then unlawful, the giving of the notice or
communication to that person shall not be required.
(b) Shareholders Without Forwarding Addresses.--Notice or other
communications need not be sent to any shareholder with whom the corporation has
been unable to communicate for more than 24 consecutive months because
communications to the shareholder are returned unclaimed or the shareholder has
otherwise failed to provide the corporation with a current address. Whenever the
shareholder provides the corporation with a current address, the corporation
shall commence sending notices and other communications to the shareholder in
the same manner as to other shareholders.
Section 2.07. Use of Conference Telephone and Similar Equipment.--Any
director may participate in any meeting of the board of directors, and the board
of directors may provide by resolution with respect to a specific meeting or
with respect to a class of meetings that one or more persons may participate in
a meeting of the shareholders of the corporation, by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other. Participation in a meeting
pursuant to this section shall constitute presence in person at the meeting.
ARTICLE III
Shareholders
Section 3.01. Place of Meeting.--All meetings of the shareholders of the
corporation shall be held at the registered office of the corporation unless
another place is designated by the board of directors in the notice of a
meeting.
Section 3.02. Annual Meeting.--The board of directors may fix and designate
the date and time of the annual meeting of the shareholders, but if no such date
and time is fixed and designated by the board, the meeting for any calendar year
shall be held on the third
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Wednesday of July in such year, if not a legal holiday under the laws of
Pennsylvania, and, if a legal holiday, then on the next succeeding business day,
not a Saturday, at 11:00 o'clock A.M., and at said meeting the shareholders then
entitled to vote shall elect directors and shall transact such other business as
may properly be brought before the meeting. If the annual meeting shall not have
been called and held within six months after the designated time, any
shareholder may call the meeting at any time thereafter.
Section 3.03. Special Meetings.--Special meetings of the shareholders may
be called at any time by the president or by resolution of the board of
directors, who may fix the date, time and place of the meeting. If the president
or the board does not fix the date, time or place of the meeting, it shall be
the duty of the secretary to do so. A date fixed by the secretary shall not be
more than 60 days after the date of the adoption of the resolution of the board
calling the special meeting.
Section 3.04. Quorum and Adjournment.
(a) General Rule.--A meeting of shareholders of the corporation duly called
shall not be organized for the transaction of business unless a quorum is
present. The presence of shareholders entitled to cast at least a majority of
the votes that all shareholders are entitled to cast on a particular matter to
be acted upon at the meeting shall constitute a quorum for the purposes of
consideration and action on the matter. Shares of the corporation owned,
directly or indirectly, by it and controlled, directly or indirectly, by the
board of directors of this corporation, as such, shall not be counted in
determining the total number of outstanding shares for quorum purposes at any
given time.
(b) Withdrawal of a Quorum.--The shareholders present at a duly organized
meeting can continue to do business until adjournment notwithstanding the
withdrawal of enough shareholders to leave less than a quorum.
(c) Adjournments Generally.--Any regular or special meeting of the
shareholders, including one at which directors are to be elected and one which
cannot be organized because a quorum has not attended, may be adjourned for such
period and to such place as the shareholders present and entitled to vote shall
direct.
(d) Electing Directors at Adjourned Meeting.--Those shareholders entitled
to vote who attend a meeting called for the election of directors that has been
previously adjourned for lack of a quorum, although less than a quorum as fixed
in this section, shall nevertheless constitute a quorum for the purpose of
electing directors.
(e) Other Action in Absence of Quorum.--Those shareholders entitled to vote
who attend a meeting of shareholders that has been previously adjourned for one
or more periods aggregating at least 15 days because of an absence of a quorum,
although less than a quorum as fixed in this section, shall nevertheless
constitute a quorum for the purpose of acting upon any matter set forth in the
notice of the meeting if the notice states that those shareholders who attend
the adjourned meeting shall nevertheless constitute a quorum for the purpose of
acting upon the matter.
Section 3.05. Action by Shareholders.--Except as otherwise provided in the
Business Corporation Law or the articles or these bylaws, whenever any corporate
action is to be taken by vote of the shareholders of the corporation, it shall
be authorized upon receiving the affirmative vote of a majority of the votes
cast by all shareholders entitled to vote thereon and, if any shareholders are
entitled to vote thereon as a class, upon receiving the affirmative vote of a
majority of the votes cast by the shareholders entitled to vote as a class.
Section 3.06. Organization.--At every meeting of the shareholders, the
chairman of the board, if there be one, or, in the case of vacancy in office or
absence of the chairman of the board, one of the following persons present in
the order stated: the president, the vice
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presidents in their order of rank and seniority, or a person chosen by vote of
the shareholders present, shall act as chairman of the meeting. The secretary
or, in the absence of the secretary, an assistant secretary, or, in the absence
of both the secretary and assistant secretaries, a person appointed by the
chairman of the meeting, shall act as secretary of the meeting.
Section 3.07. Voting Rights of Shareholders.--Unless otherwise provided in
the articles, every shareholder of the corporation shall be entitled to one vote
for every share standing in the name of the shareholder on the books of the
corporation.
Section 3.08. Voting and Other Action by Proxy.
(a) General Rule.--
(1) Every shareholder entitled to vote at a meeting of shareholders may
authorize another person to act for the shareholder by proxy.
(2) The presence of, or vote or other action at a meeting of
shareholders by a proxy of a shareholder shall constitute the presence of,
or vote or action by the shareholder.
(3) Where two or more proxies of a shareholder are present, the
corporation shall, unless otherwise expressly provided in the proxy, accept
as the vote of all shares represented thereby the vote cast by a majority
of them and, if a majority of the proxies cannot agree whether the shares
represented shall be voted or upon the manner of voting the shares, the
voting of the shares shall be divided equally among those persons.
(b) Execution and Filing.--Every proxy shall be executed in writing by the
shareholder or by the duly authorized attorney-in-fact of the shareholder and
filed with the secretary of the corporation. A telegram, telex, cablegram,
datagram or similar transmission from a shareholder or attorney-in-fact, or a
photographic, facsimile or similar reproduction of a writing executed by a
shareholder or attorney-in-fact:
(1) may be treated as properly executed for purposes of this
subsection; and
(2) shall be so treated if it sets forth a confidential and unique
identification number or other mark furnished by the corporation to the
shareholder for the purposes of a particular meeting or transaction.
(c) Revocation.--A proxy, unless coupled with an interest, shall be
revocable at will, notwithstanding any other agreement or any provision in the
proxy to the contrary, but the revocation of a proxy shall not be effective
until written notice thereof has been given to the secretary of the corporation.
An unrevoked proxy shall not be valid after three years from the date of its
execution unless a longer time is expressly provided therein. A proxy shall not
be revoked by the death or incapacity of the maker unless, before the vote is
counted or the authority is exercised, written notice of the death or incapacity
is given to the secretary of the corporation.
(d) Expenses.--The corporation shall pay the reasonable expenses of
solicitation of votes, proxies or consents of shareholders by or on behalf of
the board of directors or its nominees for election to the board, including
solicitation by professional proxy solicitors and otherwise.
Section 3.09. Voting by Fiduciaries and Pledgees.-Shares of the corporation
standing in the name of a trustee or other fiduciary and shares held by an
assignee for the benefit of creditors or by a receiver may be voted by the
trustee, fiduciary, assignee or receiver. A shareholder whose shares are pledged
shall be entitled to vote the shares until the shares
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have been transferred into the name of the pledgee, or a nominee of the pledgee,
but nothing in this section shall affect the validity of a proxy given to a
pledgee or nominee.
Section 3.10. Voting by Joint Holders of Shares.
(a) General Rule.--Where shares of the corporation are held jointly or as
tenants in common by two or more persons, as fiduciaries or otherwise:
(1) if only one or more of such persons is present in person or by
proxy, all of the shares standing in the names of such persons shall be
deemed to be represented for the purpose of determining a quorum and the
corporation shall accept as the vote of all the shares the vote cast by a
joint owner or a majority of them; and
(2) if the persons are equally divided upon whether the shares held by
them shall be voted or upon the manner of voting the shares, the voting of
the shares shall be divided equally among the persons without prejudice to
the rights of the joint owners or the beneficial owners thereof among
themselves.
(b) Exception.--If there has been filed with the secretary of the
corporation a copy, certified by an attorney at law to be correct, of the
relevant portions of the agreement under which the shares are held or the
instrument by which the trust or estate was created or the order of court
appointing them or of an order of court directing the voting of the shares, the
persons specified as having such voting power in the document latest in date of
operative effect so filed, and only those persons, shall be entitled to vote the
shares but only in accordance therewith.
Section 3.11. Voting by Corporations.
(a) Voting by Corporate Shareholders.--Any corporation that is a
shareholder of this corporation may vote at meetings of shareholders of this
corporation by any of its officers or agents, or by proxy appointed by any
officer or agent, unless some other person, by resolution of the board of
directors of the other corporation or a provision of its articles or bylaws, a
copy of which resolution or provision certified to be correct by one of its
officers has been filed with the secretary of this corporation, is appointed its
general or special proxy in which case that person shall be entitled to vote the
shares.
(b) Controlled Shares.--Shares of this corporation owned, directly or
indirectly, by it and controlled, directly or indirectly, by the board of
directors of this corporation, as such, shall not be voted at any meeting and
shall not be counted in determining the total number of outstanding shares for
voting purposes at any given time.
Section 3.12. Determination of Shareholders of Record.
(a) Fixing Record Date.--The board of directors may fix a time prior to the
date of any meeting of shareholders as a record date for the determination of
the shareholders entitled to notice of, or to vote at, the meeting, which time,
except in the case of an adjourned meeting, shall be not more than 90 days prior
to the date of the meeting of shareholders. Only shareholders of record on the
date fixed shall be so entitled notwithstanding any transfer of shares on the
books of the corporation after any record date fixed as provided in this
subsection. The board of directors may similarly fix a record date for the
determination of shareholders of record for any other purpose. When a
determination of shareholders of record has been made as provided in this
section for purposes of a meeting, the determination shall apply to any
adjournment thereof unless the board fixes a new record date for the adjourned
meeting.
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(b) Determination When a Record Date is Not Fixed.--If a record date is not
fixed:
(1) The record date for determining shareholders entitled to notice of
or to vote at a meeting of shareholders shall be at the close of business
on the day next preceding the day on which notice is given.
(2) The record date for determining shareholders 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.
(c) Certification by Nominee.--The board of directors may adopt a procedure
whereby a shareholder of the corporation may certify in writing to the
corporation that all or a portion of the shares registered in the name of the
shareholder are held for the account of a specified person or persons. Upon
receipt by the corporation of a certification complying with the procedure, the
persons specified in the certification shall be deemed, for the purposes set
forth in the certification, to be the holders of record of the number of shares
specified in place of the shareholder making the certification.
Section 3.13. Voting Lists.
(a) General Rule.--The officer or agent having charge of the transfer books
for shares of the corporation shall make a complete list of the shareholders
entitled to vote at any meeting of shareholders, arranged in alphabetical order,
with the address of and the number of shares held by each. The list shall be
produced and kept open at the time and place of the meeting and shall be subject
to the inspection of any shareholder during the whole time of the meeting for
the purposes thereof except that, if the corporation has 5,000 or more
shareholders, in lieu of the making of the list the corporation may make the
information therein available at the meeting by any other means.
(b) Effect of List.--Failure to comply with the requirements of this
section shall not affect the validity of any action taken at a meeting prior to
a demand at the meeting by any shareholder entitled to vote thereat to examine
the list. The original share register or transfer book, or a duplicate thereof
kept in the Commonwealth of Pennsylvania, shall be prima facie evidence as to
who are the shareholders entitled to examine the list or share register or
transfer book or to vote at any meeting of shareholders.
Section 3.14. Judges of Election.
(a) Appointment.--In advance of any meeting of shareholders of the
corporation, the board of directors may appoint judges of election, who need not
be shareholders, to act at the meeting or any adjournment thereof. If judges of
election are not so appointed, the presiding officer of the meeting may, and on
the request of any shareholder shall, appoint judges of election at the meeting.
The number of judges shall be one or three. A person who is a candidate for an
office to be filled at the meeting shall not act as a judge.
(b) Vacancies.--In case any person appointed as a judge fails to appear or
fails or refuses to act, the vacancy may be filled by appointment made by the
board of directors in advance of the convening of the meeting or at the meeting
by the presiding officer thereof.
(c) Duties.--The judges of election shall determine the number of shares
outstanding and the voting power of each, the shares represented at the meeting,
the existence of a quorum, and the authenticity, validity and effect of proxies,
receive votes or ballots, hear and determine all challenges and questions in any
way arising in connection with nominations by shareholders or the right to vote,
count and tabulate all votes, determine the result and do such acts as may be
proper to conduct the election or vote with fairness to all shareholders. The
judges of election shall perform their duties impartially, in good faith, to the
best of their ability and as expeditiously as is practical. If there are three
judges of election, the decision,
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act or certificate of a majority shall be effective in all respects as the
decision, act or certificate of all.
(d) Report.--On request of the presiding officer of the meeting or of any
shareholder, the judges shall make a report in writing of any challenge or
question or matter determined by them, and execute a certificate of any fact
found by them. Any report or certificate made by them shall be prima facie
evidence of the facts stated therein.
Section 3.15. Minors as Security Holders.--The corporation may treat a
minor who holds shares or obligations of the corporation as having capacity to
receive and to empower others to receive dividends, interest, principal and
other payments or distributions, to vote or express consent or dissent and to
make elections and exercise rights relating to such shares or obligations
unless, in the case of payments or distributions on shares, the corporate
officer responsible for maintaining the list of shareholders or the transfer
agent of the corporation or, in the case of payments or distributions on
obligations, the treasurer or paying officer or agent has received written
notice that the holder is a minor.
ARTICLE IV
Board of Directors
Section 4.01. Powers; Notation of Dissent.
(a) General Rule.--Unless otherwise provided by statute, all powers vested
by law in the corporation shall be exercised by or under the authority of, and
the business and affairs of the corporation shall be managed under the direction
of, the board of directors.
(b) Notation of Dissent.--A director of the corporation who is present at a
meeting of the board of directors, or of a committee of the board, at which
action on any corporate matter is taken on which the director is generally
competent to act, shall be presumed to have assented to the action taken unless
his or her dissent is entered in the minutes of the meeting or unless the
director files his or her written dissent to the action with the secretary of
the meeting before the adjournment thereof or transmits the dissent in writing
to the secretary of the corporation immediately after the adjournment of the
meeting. The right to dissent shall not apply to a director who voted in favor
of the action. Nothing in this section shall bar a director from asserting that
minutes of the meeting incorrectly omitted his or her dissent if, promptly upon
receipt of a copy of such minutes, the director notifies the secretary, in
writing, of the asserted omission or inaccuracy.
Section 4.02. Qualifications and Selection of Directors.
(a) Qualifications.--Each director of the corporation shall be a natural
person of full age who need not be a resident of the Commonwealth of
Pennsylvania or a shareholder of the corporation.
(b) Notice of Certain Nominations Required. --Nominations for election of
directors may be made by any shareholder entitled to vote for the election of
directors only if written notice (the "Notice") of the shareholder's intent to
nominate a director at the meeting is given by the shareholder and received by
the secretary of the corporation in the manner and within the time specified in
this section. The Notice shall be delivered to the secretary of the corporation
not less than 60 days prior to the date fixed by these bylaws for the annual
meeting of shareholders; provided, however, that, if directors are to be elected
by the shareholders at any other time, the Notice shall be delivered to the
secretary of the corporation not later than the seventh day following the day on
which notice of the meeting was first mailed to shareholders. In lieu of
delivery to the secretary, the Notice may be mailed to the secretary by
certified mail,
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return receipt requested, but shall be deemed to have been given only upon
actual receipt by the secretary. The requirements of this subsection shall not
apply to a nomination for directors made to the shareholders by the board of
directors.
(c) Contents of Notice.--The Notice shall be in writing and shall contain
or be accompanied by:
(1) the name and residence address of the nominating shareholder;
(2) a representation that the shareholder is a holder of record of
voting stock of the corporation and intends to appear in person or by proxy
at the meeting to nominate the person or persons specified in the Notice;
(3) such information regarding each nominee as would have been required
to be included in a proxy statement filed pursuant to Regulation 14A of the
rules and regulations established by the Securities and Exchange Commission
under the Securities Exchange Act of 1934 (or pursuant to any successor act
or regulation) had proxies been solicited with respect to such nominee by
the management or board of directors of the corporation;
(4) a description of all arrangements or understandings among the
shareholder 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 the shareholder; and
(5) the consent of each nominee to serve as a director or the
corporation if so elected.
(d) Determination of Compliance.--If a judge or judges of election shall
not have been appointed pursuant to these bylaws, the presiding officer of the
meeting may, if the facts warrant, determine and declare to the meeting that any
nomination made at the meeting was not made in accordance with the procedures of
this section, and, in such event, the nomination shall be disregarded. Any
decision by the presiding officer of the meeting made in good faith shall be
conclusive and binding upon all shareholders of the corporation for any purpose.
(e) Election of Directors.--In elections for directors, voting need not be
by ballot, unless required by vote of the shareholders before the voting for the
election of directors begins. The candidates receiving the highest number of
votes shall be elected.
Section 4.03. Number and Term of Office.
(a) Number.--The board of directors shall consist of such number of
directors, as may be determined from time to time by resolution of the board of
directors.
(b) Term of Office.--Each director shall hold office until the expiration
of the term for which he or she was selected and until a successor has been
selected and qualified or until his or her earlier death, resignation or
removal. A decrease in the number of directors shall not have the effect of
shortening the term of any incumbent director.
(c) Resignation.--Any director may resign at any time upon written notice
to the corporation. The resignation shall be effective upon receipt thereof by
the corporation or at such subsequent time as shall be specified in the notice
of resignation.
Section 4.04. Vacancies.
(a) General Rule.--Vacancies in the board of directors, including vacancies
resulting from an increase in the number of directors, may be filled by a
majority vote of the remaining members of the board though less than a quorum,
or by a sole remaining director, and each person so selected shall be a director
to serve until the next annual meeting of shareholders,
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and until a successor has been selected and qualified or until his or her
earlier death, resignation or removal.
(b) Action by Resigned Directors.--When one or more directors resign from
the board effective at a future date, the directors then in office, including
those who have so resigned, shall have power by the applicable vote to fill the
vacancies, the vote thereon to take effect when the resignations become
effective.
Section 4.05. Removal of Directors.
(a) Removal by the Shareholders.--The entire board of directors, or any
individual director may be removed from office by vote of the shareholders
entitled to vote thereon only for cause. In case the board or any one or more
directors are so removed, new directors may be elected at the same meeting. The
repeal of a provision of the articles or bylaws prohibiting, or the addition of
a provision to the articles or bylaws permitting, the removal by the
shareholders of the board or a director without assigning any cause shall not
apply to any incumbent director during the balance of the term for which the
director was selected.
(b) Removal by the Board.--The board of directors may declare vacant the
office of a director who has been judicially declared of unsound mind or who has
been convicted of an offense punishable by imprisonment for a term of more than
one year or if, within 60 days after notice of his or her selection, the
director does not accept the office either in writing or by attending a meeting
of the board of directors.
Section 4.06. Place of Meetings.--Meetings of the board of directors may be
held at such place within or without the Commonwealth of Pennsylvania as the
board of directors may from time to time appoint or as may be designated in the
notice of the meeting.
Section 4.07. Organization of Meetings.--At every meeting of the board of
directors, the chairman of the board, if there be one, or, in the case of a
vacancy in the office or absence of the chairman of the board, one of the
following officers present in the order stated: the president or a person chosen
by a majority of the directors present, shall act as chairman of the meeting.
The secretary or, in the absence of the secretary, an assistant secretary, or,
in the absence of the secretary and the assistant secretaries, any person
appointed by the chairman of the meeting, shall act as secretary of the meeting.
Section 4.08. Regular Meetings.--Regular meetings of the board of directors
shall be held at such time and place as shall be designated from time to time by
resolution of the board of directors.
Section 4.09. Special Meetings.--Special meetings of the board of directors
shall be held whenever called by the chairman, the president or by two or more
of the directors.
Section 4.10. Quorum of and Action by Directors.
(a) General Rule.--A majority of the directors in office of the corporation
shall be necessary to constitute a quorum for the transaction of business and
the acts of a majority of the directors present and voting at a meeting at which
a quorum is present shall be the acts of the board of directors.
(b) Action by Written Consent.--Any action required or permitted to be
taken at a meeting of the directors may be taken without a meeting if, prior or
subsequent to the action, a consent or consents thereto by all of the directors
in office is filed with the secretary of the corporation.
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Section 4.11. Executive and Other Committees.
(a) Establishment and Powers.--The board of directors may, by resolution
adopted by a majority of the directors in office, establish one or more
committees to consist of one or more directors of the corporation. Any
committee, to the extent provided in the resolution of the board of directors,
shall have and may exercise all of the powers and authority of the board of
directors except that a committee shall not have any power or authority as to
the following:
(1) The submission to shareholders of any action requiring approval of
shareholders under the Business Corporation Law.
(2) The creation or filling of vacancies in the board of directors.
(3) The adoption, amendment or repeal of these bylaws.
(4) The amendment or repeal of any resolution of the board that by its
terms is amendable or repealable only by the board.
(5) Action on matters committed by a resolution of the board of
directors to another committee of the board.
(b) Alternate Committee Members.--The board may designate one or more
directors as alternate members of any committee who may replace any absent or
disqualified member at any meeting of the committee or for the purposes of any
written action by the committee. In the absence or disqualification of a member
and alternate member or members of a committee, the member or members thereof
present at any meeting and not disqualified from voting, whether or not
constituting a quorum, may unanimously appoint another director to act at the
meeting in the place of the absent or disqualified member.
(c) Term.--Each committee of the board shall serve at the pleasure of the
board.
(d) Committee Procedures.--The term "board of directors" or "board," when
used in any provision of these bylaws relating to the organization or procedures
of or the manner of taking action by the board of directors, shall be construed
to include and refer to any executive or other committee of the board.
Section 4.12. Compensation.--The board of directors shall have the
authority to fix the compensation of directors for their services as directors
and a director may be a salaried officer of the corporation.
ARTICLE V
Officers
Section 5.01. Officers Generally.
(a) Number, Qualifications and Designation.--The officers of the
corporation shall be a president, one or more vice presidents, a secretary, a
treasurer, and such other officers as may be elected in accordance with the
provisions of Section 5.03. Officers may but need not be directors or
shareholders of the corporation. The president and secretary shall be natural
persons of full age. The treasurer may be a corporation, but if a natural person
shall be of full age. The board of directors may elect from among the members of
the board a chairman of the board who shall not be an officer of the
corporation. Any number of offices may be held by the same person.
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(b) Bonding.--The corporation may secure the fidelity of any or all of its
officers by bond or otherwise.
(c) Standard of Care; Limitation of Liability.--In lieu of the standards of
conduct otherwise provided by law, officers of the corporation shall be subject
to the same standards of conduct, including standards of care and loyalty and
rights of justifiable reliance, as shall at the time be applicable to directors
of the corporation. An officer of the corporation shall not be personally
liable, as such, to the corporation or its shareholders for monetary damages
(including, without limitation, any judgment, amount paid in settlement,
penalty, punitive damages or expense of any nature (including, without
limitation, attorneys' fees and disbursements)) for any action taken, or any
failure to take any action, unless the officer has breached or failed to perform
the duties of his or her office under the articles, these bylaws, or the
applicable provisions of law and the breach or failure to perform constitutes
self-dealing, willful misconduct or recklessness. The provisions of this
subsection shall not apply to the responsibility or liability of an officer
pursuant to any criminal statute or for the payment of taxes pursuant to local,
state or federal law.
Section 5.02. Election, Term of Office and Resignations.
(a) Election and Term of Office.--The officers of the corporation, except
those elected by delegated authority pursuant to Section 5.03, shall be elected
annually by the board of directors, and each such officer shall hold office for
a term of one year and until a successor has been selected and qualified or
until his or her earlier death, resignation or removal.
(b) Resignations.--Any officer may resign at any time upon written notice
to the corporation. The resignation shall be effective upon receipt thereof by
the corporation or at such subsequent time as may be specified in the notice of
resignation.
Section 5.03. Subordinate Officers, Committees and Agents.--The board of
directors may from time to time elect such other officers and appoint such
committees, employees or other agents as the business of the corporation may
require, including one or more assistant secretaries, and one or more assistant
treasurers, each of whom shall hold office for such period, have such authority,
and perform such duties as are provided in these bylaws, or as the board of
directors may from time to time determine. The board of directors may delegate
to any officer or committee the power to elect subordinate officers and to
retain or appoint employees or other agents, or committees thereof, and to
prescribe the authority and duties of such subordinate officers, committees,
employees or other agents.
Section 5.04. Removal of Officers and Agents.--Any officer or agent of the
corporation may be removed by the board of directors with or without cause. The
removal shall be without prejudice to the contract rights, if any, of any person
so removed. Election or appointment of an officer or agent shall not of itself
create contract rights.
Section 5.05. Vacancies.--A vacancy in any office because of death,
resignation, removal, disqualification, or any other cause, may be filled by the
board of directors or by the officer or committee to which the power to fill
such office has been delegated pursuant to Section 5.03, as the case may be, and
if the office is one for which these bylaws prescribe a term, shall be filled
for the unexpired portion of the term.
Section 5.06. Authority.--All officers of the corporation, as between
themselves and the corporation, shall have such authority and perform such
duties in the management of the corporation as may be provided by or pursuant to
resolutions or orders of the board of directors or, in the absence of
controlling provisions in the resolutions or orders of the board of directors,
as may be determined by or pursuant to these bylaws.
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Section 5.07. The Chairman of the Board.--The chairman of the board shall
preside at all meetings of the shareholders and of the board of directors, and
shall perform such other duties as may from time to time be requested by the
board of directors.
Section 5.08. The President.--The president shall be the chief executive
officer of the corporation and shall have general supervision over the business
and operations of the corporation, subject however, to the control of the board
of directors. The president shall sign, execute, and acknowledge, in the name of
the corporation, deeds, mortgages, bonds, contracts or other instruments,
authorized by the board of directors, except in cases where the signing and
execution thereof shall be expressly delegated by the board of directors, or by
these bylaws, to some other officer or agent of the corporation; and, in
general, shall perform all duties incident to the office of president and such
other duties as from time to time may be assigned by the board of directors.
Section 5.09. The Vice Presidents.--The vice presidents shall perform the
duties of the president in the absence of the president and such other duties as
may from time to time be assigned to them by the board of directors or the
president.
Section 5.10. The Secretary.--The secretary or an assistant secretary shall
attend all meetings of the shareholders and of the board of directors and all
committees thereof and shall record all the votes of the shareholders and of the
directors and the minutes of the meetings of the shareholders and of the board
of directors and of committees of the board in a book or books to be kept for
that purpose; shall see that notices are given and records and reports properly
kept and filed by the corporation as required by law; shall be the custodian of
the seal of the corporation and see that it is affixed to all documents to be
executed on behalf of the corporation under its seal; and, in general, shall
perform all duties incident to the office of secretary, and such other duties as
may from time to time be assigned by the board of directors or the president.
Section 5.11. The Treasurer.--The treasurer or an assistant treasurer shall
have or provide for the custody of the funds or other property of the
corporation; shall collect and receive or provide for the collection and receipt
of moneys earned by or in any manner due to or received by the corporation;
shall deposit all funds in his or her custody as treasurer in such banks or
other places of deposit as the board of directors may from time to time
designate; shall, whenever so required by the board of directors, render an
account showing all transactions as treasurer, and the financial condition of
the corporation; and, in general, shall discharge such other duties as may from
time to time be assigned by the board of directors or the president.
Section 5.12. Salaries.--The salaries of the officers elected by the board
of directors shall be fixed from time to time by the board of directors or by
such officer as may be designated by resolution of the board. The salaries or
other compensation of any other officers, employees and other agents shall be
fixed from time to time by the officer or committee to which the power to elect
such officers or to retain or appoint such employees or other agents has been
delegated pursuant to Section 5.03. No officer shall be prevented from receiving
such salary or other compensation by reason of the fact that the officer is also
a director of the corporation.
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ARTICLE VI
Certificates of Stock, Transfer, Etc.
Section 6.01. Share Certificates.
(a) Form of Certificates.--Certificates for shares of the corporation shall
be in such form as approved by the board of directors, and shall state that the
corporation is incorporated under the laws of the Commonwealth of Pennsylvania,
the name of the person to whom issued, and the number and class of shares and
the designation of the series (if any) that the certificate represents. If the
corporation is authorized to issue shares of more than one class or series,
certificates for shares of the corporation shall set forth upon the face or back
of the certificate (or shall state on the face or back of the certificate that
the corporation will furnish to any shareholder upon request and without
charge), a full or summary statement of the designations, voting rights,
preferences, limitations and special rights of the shares of each class or
series authorized to be issued so far as they have been fixed and determined and
the authority of the board of directors to fix and determine the designations,
voting rights, preferences, limitations and special rights of the classes and
series of shares of the corporation.
(b) Share Register.--The share register or transfer books and blank share
certificates shall be kept by the secretary or by any transfer agent or
registrar designated by the board of directors for that purpose.
Section 6.02. Issuance.--The share certificates of the corporation shall be
numbered and registered in the share register or transfer books of the
corporation as they are issued. They shall be executed in such manner as the
board of directors shall determine. In case any officer, transfer agent or
registrar who has signed, or whose facsimile signature has been placed upon, any
share certificate shall have ceased to be such officer, transfer agent or
registrar because of death, resignation or otherwise, before the certificate is
issued, the certificate may be issued with the same effect as if the officer,
transfer agent or registrar had not ceased to be such at the date of its issue.
The provisions of this Section 6.02 shall be subject to any inconsistent or
contrary agreement in effect at the time between the corporation and any
transfer agent or registrar.
Section 6.03. Transfer.--Transfers of shares shall be made on the share
register or transfer books of the corporation upon surrender of the certificate
therefor, endorsed by the person named in the certificate or by an attorney
lawfully constituted in writing. No transfer shall be made inconsistent with the
provisions of the Uniform Commercial Code, 13 Pa.C.S. ss.ss. 8101 et seq., and
its amendments and supplements.
Section 6.04. Record Holder of Shares.--The corporation shall be entitled
to treat the person in whose name any share or shares of the corporation stand
on the books of the corporation as the absolute owner thereof, and shall not be
bound to recognize any equitable or other claim to, or interest in, such share
or shares on the part of any other person.
Section 6.05. Lost, Destroyed or Mutilated Certificates.--The holder of any
shares of the corporation shall immediately notify the corporation of any loss,
destruction or mutilation of the certificate therefor, and the board of
directors may, in its discretion, cause a new certificate or certificates to be
issued to such holder, in case of mutilation of the certificate, upon the
surrender of the mutilated certificate or, in case of loss or destruction of the
certificate, upon satisfactory proof of such loss or destruction and, if the
board of directors shall so determine, the deposit of a bond in such form and in
such sum, and with such surety or sureties, as it may direct.
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ARTICLE VII
Liability of Directors; Indemnification of Directors,
Officers and Other Authorized Representatives
Section 7.01. Limitation of Liability of Directors. --To the fullest extent
permitted by the Business Corporation Law, a director of the corporation shall
not be personally liable to the corporation, its stockholders or others for
monetary damages for any action taken or any failure to take any action unless
the director has breached or failed to perform the duties of his or her office
as set forth in 15 Pa. C. S. Subchapter 17B and such breach or failure
constitutes self-dealing, willful misconduct or recklessness. The provisions of
this Section 7.01 shall not apply with respect to the responsibility or
liability of a director under any criminal statute or the liability of a
director for the payment of taxes pursuant to local, state or federal law.
Section 7.02. Indemnification.
(a) General Rules.--The corporation shall indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending or
completed action, suit, or proceeding, whether civil, criminal, administrative,
or investigative ("Proceeding"), by reason of the fact that such person is or
was a director, officer, employee, or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, employee, or
agent of another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys' fees), amounts paid in
settlement, judgments, and fines actually and reasonably incurred by such person
in connection with the Proceeding; provided, however, that no indemnification
shall be made in any case where the act or failure to act giving rise to the
claim for indemnification is determined by a court to have constituted willful
misconduct or recklessness.
(b) Advancing Expenses.--Expenses (including attorneys' fees) incurred in
defending a Proceeding shall be paid by the corporation in advance of the final
disposition of the Proceeding upon receipt of an undertaking by or on behalf of
the director, officer, employee, or agent to repay such amount if it shall be
ultimately determined that such person is not entitled to be indemnified by the
corporation as authorized in this Section 7.02.
(c) Scope of Articles.--The indemnification and advancement of expenses
provided by this Section 7.02 shall not be deemed exclusive of any other right
to which persons seeking indemnification and advancement of expenses may be
entitled under any agreement, vote of shareholders or disinterested directors,
or otherwise, both as to actions in such persons' official capacity and as to
their actions in another capacity while holding office, and shall continue as to
a person who has ceased to be a director, officer, employee, or agent and shall
inure to the benefit of the heirs, executors, and administrators of such person.
(d) Insurance.--The corporation may purchase and maintain insurance on
behalf of any person, may enter into contracts of indemnification with any
person, may create a fund of any nature (which may, but need not be, under the
control of a trustee) for the benefit of any person, and may otherwise secure in
any manner its obligations with respect to indemnification and advancement of
expenses, whether arising under this Section 7.02 or otherwise, to or for the
benefit of any person, whether or not the corporation would have the power to
indemnify such person against such liability under the provisions of this
Section 7.02.
Section 7.03. Effective Date.--The limitation of liability provided in
Section 7.01 and the right to indemnification and advancement of expenses
provided in Section 7.02 shall apply to any action, or any failure to take any
action, occurring on or after January 27, 1987.
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Section 7.04. Amendment or Repeal.--Notwithstanding anything herein
contained to the contrary, this Article VII may not be amended or repealed, and
a provision inconsistent herewith may not be adopted, except by the affirmative
vote of 75% of the members of the entire Board of Directors or by the
affirmative vote of shareholders of the corporation entitled to cast at least
75% of all votes which shareholders of the corporation are then entitled to cast
except that, if the Business Corporation Law is amended or any other statute is
enacted so as to decrease the exposure of directors to liability or to increase
the indemnification rights available to directors, officers or others, this
Article VII and any other provisions of these bylaws inconsistent with such
decreased exposure or increased indemnification rights shall be amended,
automatically and without any further action on the part of shareholders or
directors, to reflect such decreased exposure or to include such increased
indemnification rights, unless such legislation expressly or otherwise requires.
Any repeal or modification of this Article by the shareholders of the
corporation shall be prospective only, and shall not adversely affect any
limitation on the personal liability of a director of the corporation or any
right to indemnification from the corporation for any action taken or any
failure to take any action occurring prior to the time of such repeal or
modification.
Section 7.05. Severability.--If, for any reason, any provision of this
Article VII shall be held invalid, such invalidity shall not affect any other
provision not held so invalid, and each such other provision shall, to the full
extent consistent with law, continue in full force and effect. If any provision
of this Article VII shall be held invalid in part, such invalidity shall in no
way affect the remainder of such provision, and the remainder of such provision,
together with all other provisions of this Article VII shall, to the full extent
consistent with law, continue in full force and effect.
ARTICLE VIII
Miscellaneous
Section 8.01. Corporate Seal.--The corporation shall have a corporate seal
in the form of a circle containing the name of the corporation, the year of
incorporation and such other details as may be approved by the board of
directors. The affixation of the corporate seal shall not be necessary to the
valid execution, assignment or endorsement by the corporation of any instrument
or other document.
Section 8.02. Checks.--All checks, notes, bills of exchange or other
similar orders in writing shall be signed by such one or more officers or
employees of the corporation as the board of directors may from time to time
designate.
Section 8.03. Contracts.--Except as otherwise provided in the Business
Corporation Law in the case of transactions that require action by the
shareholders, the board of directors may authorize any officer or agent to enter
into any contract or to execute or deliver any instrument on behalf of the
corporation, and such authority may be general or confined to specific
instances.
Section 8.04. Interested Directors or Officers; Quorum.
(a) General Rule.--A contract or transaction between the corporation and
one or more of its directors or officers or between the corporation and another
corporation, partnership, joint venture, trust or other enterprise in which one
or more of its directors or officers are directors or officers or have a
financial or other interest, shall not be void or voidable solely for that
reason, or solely because the director or officer is present at or participates
in the meeting of the board of directors that authorizes the contract or
transaction, or solely because his, her or their votes are counted for that
purpose, if:
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(1) the material facts as to the relationship or interest and as to the
contract or transaction are disclosed or are known to the board of
directors and the board authorizes the contract or transaction by the
affirmative votes of a majority of the disinterested directors even though
the disinterested directors are less than a quorum;
(2) the material facts as to his or her relationship or interest and as
to the contract or transaction are disclosed or are known to the
shareholders entitled to vote thereon and the contract or transaction is
specifically approved in good faith by vote of those shareholders; or
(3) the contract or transaction is fair as to the corporation as of the
time it is authorized, approved or ratified by the board of directors or
the shareholders.
(b) Quorum.--Common or interested directors may be counted in determining
the presence of a quorum at a meeting of the board which authorizes a contract
or transaction specified in subsection (a).
Section 8.05. Deposits.--All funds of the corporation shall be deposited
from time to time to the credit of the corporation in such banks, trust
companies or other depositaries as the board of directors may approve or
designate, and all such funds shall be withdrawn only upon checks signed by such
one or more officers or employees of the corporation as the board of directors
shall from time to time designate.
Section 8.06. Corporate Records.
(a) Required Records.--The corporation shall keep complete and accurate
books and records of account, minutes of the proceedings of the incorporators,
shareholders and directors and a share register giving the names and addresses
of all shareholders and the number and class of shares held by each. The share
register shall be kept at either the registered office of the corporation in the
Commonwealth of Pennsylvania or at its principal place of business wherever
situated or at the office of its registrar or transfer agent. Any books, minutes
or other records may be in written form or any other form capable of being
converted into written form within a reasonable time.
(b) Right of Inspection.--Every shareholder shall, upon written verified
demand stating the purpose thereof, have a right to examine, in person or by
agent or attorney, during the usual hours for business for any proper purpose,
the share register, books and records of account, and records of the proceedings
of the incorporators, shareholders and directors and to make copies or extracts
therefrom. A proper purpose shall mean a purpose reasonably related to the
interest of the person as a shareholder. In every instance where an attorney or
other agent is the person who seeks the right of inspection, the demand shall be
accompanied by a verified power of attorney or other writing that authorizes the
attorney or other agent to so act on behalf of the shareholder. The demand shall
be directed to the corporation at its registered office in the Commonwealth of
Pennsylvania or at its principal place of business wherever situated.
Section 8.07. Amendment of Bylaws.--These bylaws may be amended or
repealed, or new bylaws may be adopted, either (i) by vote of the shareholders
at any duly organized annual or special meeting of shareholders, or (ii) with
respect to those matters that are not by statute committed expressly to the
shareholders and regardless of whether the shareholders have previously adopted
or approved the bylaw being amended or repealed, by vote of a majority of the
board of directors of the corporation in office at any regular or special
meeting of directors. Any change in these bylaws shall take effect when adopted
unless otherwise provided in the resolution effecting the change.
B-17
<PAGE>
Section 8.08. Inapplicability of Certain Provisions. (Adopted June 27,
1990.)
(a) Control Share Acquisitions.--Subchapter 25G of the Business Corporation
Law, relating to control share acquisitions, shall not be applicable to the
corporation.
(b) Disgorgement.--Subchapter 25H of the Business Corporation Law, relating
to disgorgement, shall not be applicable to the corporation.
B-18
<PAGE>
SI HANDLING SYSTEMS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Edward J. Fahey and Ronald J. Semanick, or
either of them acting in the absence of the other, as proxyholders, each with
the power to appoint his substitute, and hereby authorizes them to represent and
to vote, as designated on the reverse side, all shares of Common Stock of SI
Handling Systems, Inc., held of record by the undersigned on May 29, 1996, at
the Annual Meeting of Shareholders to be held on July 17, 1996, at 11:00 A.M.,
E.D.T., or at any adjournment thereof.
This proxy when properly executed will be voted in the manner directed on
the reverse side. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR
PROPOSALS 1., 2., and 3. This proxy may be voted, in the discretion of the
proxyholders, upon such other business as may properly come before the Annual
Meeting of Shareholders or any adjournment thereof. The Board of Directors does
not presently know of any other matters to be presented at the meeting.
Please vote and sign on the other side. No postage is required if this
proxy is returned in the enclosed envelope and mailed in the United States.
(To Be Signed On Reverse Side) SEE
REVERSE
SIDE
-----------------------------------------------------------------
/x/ Please mark your
votes as in this
example.
1. Election of FOR all /_/
Directors: nominees
listed below.
WITHHOLD AUTHORITY to vote /_/
for all nominees listed below.
*EXCEPTIONS /_/
NOMINEES: L. Jack Bradt, Edward J. Fahey, Elmer D. Gates, Michael J. Gausling,
and Leonard S. Yurkovic.
(INSTRUCTIONS: To withhold authority to vote for any individual nominee, mark
the "Exceptions" box and print that nominee's name on the line below. To vote
cumulatively, mark the "Exceptions" box, write "cumulate for" and print the name
of the nominee(s) selected.)
*Exceptions______________________________________________________________
2. To approve the amendment and restatement of the Company's
Articles.
FOR AGAINST ABSTAIN
/_/ /_/ /_/
3. To approve the amendment and restatement of the Company's Bylaws.
FOR AGAINST ABSTAIN
/_/ /_/ /_/
4. In their discretion, the Proxies are authorized to vote upon such
other matters as may properly come before the meeting or at any
adjournments thereof.
I plan to attend the meeting. /_/
SIGNATURE(S) _______________________________________ DATE______________
Note: Please sign exactly as name appears hereon. Joint owners should each sign.
When signing as attorney, executor, administrator, trustee or guardian, please
give full title as such.
