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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
QuickResponse Services, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
QuickResponse Services, Inc.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------------------
4) Date Filed:
------------------------------------------------------------------------
<PAGE>
[LOGO]
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders (the
"Annual Meeting") of QuickResponse Services, Inc. (the "Company") to be held May
30, 1997, at 12:00 noon at the Company's headquarters, 1400 Marina Way South,
Richmond, California 94804.
At the Annual Meeting, you will be asked to consider and vote upon the
following proposals: (i) to elect eight directors of the Company, (ii) to
approve the proposed reincorporation of the Company from the State of California
to the State of Delaware and (iii) to ratify the appointment of Deloitte &
Touche LLP as independent auditors of the Company for the fiscal year ending
December 31, 1997.
The enclosed Proxy Statement more fully describes the details of the
business to be conducted at the Annual Meeting. After careful consideration, the
Company's Board of Directors has unanimously approved each of the proposals and
recommends that you vote FOR each such proposal.
After reading the Proxy Statement, please mark, date, sign and return the
enclosed proxy card in the accompanying reply envelope. If you decide to attend
the Annual Meeting and would prefer to vote in person, please notify the
Secretary of the Company that you wish to vote in person and your proxy will not
be voted. YOUR SHARES CANNOT BE VOTED UNLESS YOU SIGN, DATE AND RETURN THE
ENCLOSED PROXY OR ATTEND THE ANNUAL MEETING IN PERSON.
A copy of the Company's 1996 Annual Report has been mailed concurrently
herewith to all shareholders entitled to notice of and to vote at the Annual
Meeting.
We look forward to seeing you at the Annual Meeting.
Sincerely yours,
/s/ H. Lynn Hazlett
H. Lynn Hazlett
PRESIDENT AND CHIEF EXECUTIVE OFFICER
Richmond, California
April 30, 1997
IMPORTANT
PLEASE MARK, DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT AT YOUR EARLIEST
CONVENIENCE IN THE ENCLOSED POSTAGE-PREPAID RETURN ENVELOPE SO THAT IF YOU ARE
UNABLE TO ATTEND THE ANNUAL MEETING, YOUR SHARES MAY BE VOTED.
<PAGE>
QUICKRESPONSE SERVICES, INC.
1400 MARINA WAY SOUTH
RICHMOND, CALIFORNIA 94804
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 30, 1997
TO OUR SHAREHOLDERS:
You are cordially invited to attend the Annual Meeting of Shareholders (the
"Annual Meeting") of QuickResponse Services, Inc., a California corporation (the
"Company"), to be held on May 30, 1997, at 12:00 noon, local time, at the
Company's headquarters, 1400 Marina Way South, Richmond, California 94804, for
the following purposes:
1. To elect eight directors to serve for the ensuing year or until their
respective successors are duly elected and qualified. The nominees are H.
Lynn Hazlett, Garen K. Staglin, Garth Saloner, Peter R. Johnson, Steven D.
Brooks, Tania Amochaev, Philip Schlein and John P. Dougall. In the event
that the shareholders approve Proposal 2, the foregoing nominees will be
elected for the following terms: H. Lynn Hazlett, Garen K. Staglin and
Garth Saloner for a three-year term; Peter R. Johnson, Steven D. Brooks and
Tania Amochaev for a two-year term; and Philip Schlein and John P. Dougall
for a one-year term.
2. To approve the proposed reincorporation of the Company from the State of
California to the State of Delaware.
3. To ratify the appointment of Deloitte & Touche LLP as independent auditors
of the Company for the fiscal year ending December 31, 1997.
4. To transact such other business as may properly come before the meeting or
any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement that accompanies this Notice. Only shareholders of record at the
close of business on April 4, 1997, are entitled to notice of and to vote at the
Annual Meeting and at any continuation or adjournment thereof.
All shareholders are cordially invited and encouraged to attend the Annual
Meeting. In any event, to assure your representation at the meeting, please
carefully read the accompanying Proxy Statement which describes the matters to
be voted on at the Annual Meeting and sign, date and return the enclosed proxy
card in the reply envelope provided. Should you receive more than one proxy
because your shares are registered in different names and addresses, each proxy
should be returned to assure that all your shares will be voted. If you attend
the Annual Meeting and vote by ballot, your proxy will be revoked automatically
and only your vote at the Annual Meeting will be counted. The prompt return of
your proxy card will assist us in preparing for the Annual Meeting. We look
forward to seeing you at the Annual Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Shawn M. O'Connor
SHAWN M. O'CONNOR
VICE PRESIDENT, CHIEF FINANCIAL OFFICER AND
SECRETARY
Richmond, California
April 30, 1997
ALL SHAREHOLDERS ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING IN
PERSON. IN ANY EVENT, TO ENSURE YOUR REPRESENTATION AT THE ANNUAL MEETING, YOU
ARE URGED TO VOTE, SIGN AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN
THE POSTAGE-PREPAID ENVELOPE ENCLOSED FOR THAT PURPOSE.
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PROXY STATEMENT
FOR THE ANNUAL MEETING OF SHAREHOLDERS OF
QUICKRESPONSE SERVICES, INC.
TO BE HELD MAY 30, 1997
GENERAL
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of QuickResponse Services, Inc., a California
corporation (the "Company" or "QRS"), of proxies to be voted at the Annual
Meeting of Shareholders (the "Annual Meeting") to be held on May 30, 1997, or at
any adjournment or postponement thereof, for the purposes set forth in the
accompanying Notice of Annual Meeting of Shareholders. Shareholders of record
on April 4, 1997, will be entitled to vote at the Annual Meeting. The Annual
Meeting will be held at 12:00 noon at the Company's headquarters, 1400 Marina
Way South, Richmond, California 94804.
It is anticipated that this Proxy Statement and the enclosed proxy card
will be first mailed to shareholders on or about April 30, 1997.
VOTING RIGHTS
The close of business on April 4, 1997, was the record date for
shareholders entitled to notice of and to vote at the Annual Meeting and any
adjournments thereof. At the record date, the Company had 8,417,345 shares of
its Common Stock outstanding and entitled to vote at the Annual Meeting. These
shares were held by 51 shareholders of record and approximately 1,300 beneficial
owners. Holders of Common Stock are entitled to one vote for each share of
Common Stock so held. A majority of the shares of Common Stock entitled to vote
will constitute a quorum for the transaction of business at the Annual Meeting.
If any shareholder is unable to attend the Annual Meeting, such shareholder
may vote by proxy. The enclosed proxy is solicited by the Company's Board of
Directors (the "Board of Directors" or the "Board") and, when the proxy card is
returned properly completed, it will be voted as directed by the shareholder on
the proxy card. Shareholders are urged to specify their choices on the enclosed
proxy card. If a proxy card is signed and returned without choices specified,
in the absence of contrary instructions, the shares of Common Stock represented
by such proxy will be voted FOR Proposals 1, 2 and 3 and will be voted in the
proxy holders' discretion as to other matters that may properly come before the
Annual Meeting. An automated system administered by the Company's transfer
agent tabulates shareholder votes.
Approval of Proposals 1 and 3 will require the affirmative vote of a
majority of the shares present and voting at the Annual Meeting, provided the
number of shares present or represented and entitled to vote at the Annual
Meeting constitutes a quorum. Abstentions and broker non-votes (i.e. where the
broker or nominee submits a proxy specifically indicating the lack of
discretionary authority to vote on a matter) on either of these proposals will
be counted for purposes of determining the presence or absence of a quorum, but
do not constitute a vote "for" or "against" such proposal and will be
disregarded in calculating the votes cast as to such proposal.
For purposes of the approval of Proposal 2, abstentions and broker non-
votes will be counted for purposes of determining the presence or absence of
quorum. Because approval of Proposal 2 will require the affirmative vote of a
majority of the Company's shares outstanding on the Record Date that are
entitled to vote on the proposal, abstentions and broker non-votes will have the
same effect as votes against approval of the proposal.
REVOCABILITY OF PROXIES
Any person giving a proxy has the power to revoke it at any time before its
exercise. A proxy may be revoked by filing with the Secretary of the Company an
instrument of revocation or a duly executed proxy bearing a later date, or by
attending the Annual Meeting and voting in person.
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SOLICITATION OF PROXIES
The Company will bear the cost of soliciting proxies. Copies of
solicitation material will be furnished to brokerage houses, fiduciaries and
custodians holding shares in their names that are beneficially owned by others
to forward to such beneficial owners. The Company may reimburse such persons
for their costs of forwarding the solicitation material to such beneficial
owners. The original solicitation of proxies by mail may be supplemented by
solicitation by telephone, telegram or other means by directors, officers,
employees or agents of the Company. No additional compensation will be paid to
these individuals for any such services. Except as described above, the Company
does not intend to solicit proxies other than by mail.
THE ANNUAL REPORT OF THE COMPANY FOR THE FISCAL YEAR ENDED DECEMBER 31,
1996, HAS BEEN MAILED CONCURRENTLY WITH THE MAILING OF THE NOTICE OF ANNUAL
MEETING AND PROXY STATEMENT TO ALL SHAREHOLDERS ENTITLED TO NOTICE OF AND TO
VOTE AT THE ANNUAL MEETING. THE ANNUAL REPORT IS NOT INCORPORATED INTO THIS
PROXY STATEMENT AND IS NOT CONSIDERED PROXY SOLICITING MATERIAL.
--------------------------------------------------------
PROPOSAL NO. 1:
ELECTION OF DIRECTORS
--------------------------------------------------------
At the Annual Meeting, eight directors (constituting the entire Board) are
to be elected to serve until the next Annual Meeting of Shareholders and until a
successor for such director is elected and qualified, or until the death,
resignation or removal of such director. It is intended that the proxies will
be voted for the eight nominees named below for election to the Company's Board
of Directors unless authority to vote for any such nominee is withheld. There
are eight nominees, each of whom is currently a director of the Company. All of
the current directors were elected to the Board by the shareholders at the last
Annual Meeting. Each person nominated for election has agreed to serve if
elected, and the Board of Directors has no reason to believe that any nominee
will be unavailable or will decline to serve. In the event, however, that any
nominee is unable or declines to serve as a director at the time of the Annual
Meeting, the proxies will be voted for any nominee who shall be designated by
the current Board of Directors to fill the vacancy. Unless otherwise
instructed, the proxyholders will vote the proxies received by them for the
nominees named below. The eight candidates receiving the highest number of the
affirmative votes of the shares entitled to vote at the Annual Meeting will be
elected directors of the Company. The proxies solicited by this Proxy Statement
may not be voted for more than eight nominees.
NOMINEES
Set forth below is information regarding the nominees to the Board of
Directors.
Position(s) with the Elected
Name Company Age Director
- ---- -------------------- --- --------
Peter R. Johnson Chairman of the Board of Directors 48 1985
(2)(3)(4) and the Nomination Committee
Tania Amochaev (4) Former President and Chief 47 1992
Executive Officer, Director,
Chairman of the Executive Committee
Steven D. Brooks Director, Chairman of the Audit 45 1994
(2)(3)(4) Committee
John P. Dougall Director 53 1990
H. Lynn Hazlett President, Chief Executive Officer 60 1994
and Director
Garth Saloner (1)(2) Director 42 1993
Philip Schlein (1) Director 63 1996
Garen K. Staglin Director, Chairman of the 52 1991
(1)(3)(4) Compensation Committee
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(1) Member of the Compensation Committee
(2) Member of the Audit Committee
(3) Member of the Nomination Committee
(4) Member of the Executive Committee
COMPOSITION OF CLASSIFIED BOARD
In the event that the shareholders approve Proposal 2, the Board of
Directors will be classified into three classes of directors. Class I would
hold office initially for a one-year term expiring at the 1998 Annual Meeting of
Shareholders, Class II would hold office initially for a two-year term expiring
at the 1999 Annual Meeting of Shareholders, and Class III would hold office
initially for a three-year term expiring at the 2000 Annual Meeting of
Shareholders. At each annual meeting following this initial classification and
election, the successors to the class of directors whose terms expire at that
meeting would be elected for a term of office to expire at the third succeeding
annual meeting of shareholders after their election or until their successors
have been duly elected and qualified. The classes would be divided as follows:
Class I, to hold office until the 1998 Annual Meeting of Shareholders:
John P. Dougall
Philip Schlein
Class II, to hold office until the 1999 Annual Meeting of Shareholders:
Peter R. Johnson
Tania Amochaev
Steven D. Brooks
Class III, to hold office until the 2000 Annual Meeting of Shareholders:
H. Lynn Hazlett
Garth Saloner
Garen K. Staglin
BUSINESS EXPERIENCE OF NOMINEES FOR ELECTION AS DIRECTORS
MR. JOHNSON founded the Company in 1985 and has been Chairman of the Board
since the Company's inception. Mr. Johnson served as President of the Company
from inception to September 1987 and as President and Chief Executive Officer
of the Company from September 1987 to March 1991 and again from January 1992 to
May 1993. Before founding the Company, Mr. Johnson was a corporate general
manager of the Myer Emporium Limited, a large retailer in Australia. Mr.
Johnson served as President and Chief Executive Officer of UNIQUEST Incorporated
from December 1993 to December 1994. From 1995 to the present, Mr. Johnson has
been a private investor in and a consultant to technology companies.
MS. AMOCHAEV was named a director of the Company in May 1992 and was named
Chairman of the Executive Committee of the Board of Directors in February 1997.
Ms. Amochaev served as President of the Company from May 1992 until February
1997 and as Chief Executive Officer from May 1993 until February 1997. Before
joining the Company, from 1988 to 1992, Ms. Amochaev was Chief Executive Officer
of Natural Language, Inc., a client server database tool software company. From
1984 to 1987, Ms. Amochaev was President and Chief Executive Officer of Comserv
Corporation, a manufacturing applications software company that was sold in 1987
to Management Science America. Ms. Amochaev currently serves as a director of
Walker Interactive Systems, Inc., a financial software company, and Government
Technology Services, Inc., a government software company.
5
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MR. BROOKS was named a director of the Company in January 1994. From 1996
to the present, Mr. Brooks has been a private investor and a consultant to
information technology companies. From 1994 to 1996, Mr. Brooks served as head
of Global Technology Investment Banking at Union Bank of Switzerland. From 1989
to 1994, Mr. Brooks was a principal in two private investment partnerships:
Rainwater Inc. and The Powerhouse Group. Prior to 1991, Mr. Brooks served in
senior investment banking positions at Robertson, Stephens & Co., an investment
bank, and practiced securities law at Davis Polk & Wardwell in New York City.
Mr. Brooks is a Director of Paychex, Inc., a national payroll processing and
business services company, VERITAS Software Corporation, a storage management
software company, and several private companies.
MR. DOUGALL was named a director of the Company in July 1990. Mr. Dougall
has been employed since November 1996 by Aristocrat Leisure Limited, an
Australian publicly listed company and a supplier to gambling and entertainment
companies where he currently serves as Chairman and Chief Executive Officer.
From January 1992 to September 1996, Mr. Dougall served as Chief Executive
Officer of AWA Limited, an electronics and telecommunications company. Mr.
Dougall held various executive positions with the Company from July 1990 to
January 1992, serving as President of the Company from February 1991 to June
1991 and as President and Chief Executive Officer from June 1991 to January
1992. From February 1988 to June 1990, Mr. Dougall was the Executive Director
of Paxus Corporation, a software services and outsourcing firm.
DR. HAZLETT was named a director of the Company in 1994 and was named
President and Chief Executive Officer in February 1997. From January 1995 until
joining the Company, Dr. Hazlett was a consultant to manufacturing and retailer
companies. He was also a consultant to QRS from 1995 until February 1997. Dr.
Hazlett served as Vice President, Business Systems at VF Corporation, a global
apparel manufacturer, from 1989 to January 1995. From 1984 to 1989, Dr. Hazlett
served as President and Chief Executive Officer of Information and
Communications, Inc., a division of Carson Pirie Scott & Company. He has also
served as Corporate Vice President and Chief Information Officer at Levi
Strauss. Dr. Hazlett currently serves as a Director of the National Industries
for the Blind and as a member of the American Apparel Manufacturing Association
Management System Committee.
MR. SALONER was named a director of the Company in December 1993. Mr.
Saloner has served as the Robert A. Magowan Professor of Strategic Management
and Economics at the Graduate School of Business at Stanford University since
1990. He also serves as Associate Dean for Academic Affairs and Director of
Research and Course Development at Stanford. From 1982 to 1990, Mr. Saloner was
a professor in the Economics Department of the Massachusetts Institute of
Technology. He currently serves as a Director of Brilliant Digital
Entertainment, Inc., an entertainment company.
MR. SCHLEIN was named a director of the Company in February 1996. Mr.
Schlein has been a general partner of BVMS Partners L.P., a venture partner of
U.S. Venture Partners, a venture capital firm, since April 1985. Mr. Schlein
held various executive positions with R.H. Macy & Company, Inc. from September
1957 to December 1973 and was President and Chief Executive Officer of its
Macy's California division from January 1974 to January 1985. Mr. Schlein
currently serves as a director of Burnham Pacific Incorporated, a commercial
real estate development and leasing company. Additionally, Mr. Schlein has
previously served as a director of Apple Computer, Inc.
MR. STAGLIN was named a director of the Company in 1991. Since 1991, Mr.
Staglin has served as the Chief Executive Officer and Chairman of the Board of
Directors of SafeLite Glass Corporation, a replacement auto glass manufacturing
and retailing company. From 1980 to 1991, Mr. Staglin was a Vice President and
General Manager of Automatic Data Processing, a computer networking services
company. Mr. Staglin currently serves as a director of First Data Corporation,
a supplier of computer services for credit card processing and other financial
services, CyberCash, Inc., a provider of secure transaction services for the
Internet, and Grimes Aerospace Corporation, a manufacturer of aircraft
replacement parts and repair services.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE ELECTION
OF ALL OF THE ABOVE NOMINEES FOR ELECTION AS DIRECTORS.
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BOARD MEETINGS AND COMMITTEES
The Board of Directors held five meetings during fiscal 1996. All eight of
the directors constituting the Board of Directors during fiscal 1996 attended
more than 75% of the aggregate of (i) the total number of meetings of the Board
of Directors held during the fiscal year and (ii) the total number of meetings
held by all committees of the Board on which such director served. There are no
family relationships among executive officers or directors of the Company. The
Board of Directors has an Audit Committee, a Compensation Committee, a
Nomination Committee and an Executive Committee.
The Audit Committee of the Board of Directors held three meetings during
fiscal 1996. The Audit Committee, which is currently comprised of Directors
Brooks (Chairman), Johnson and Saloner, recommends engagement of the Company's
independent auditors, approves services performed by such auditors and reviews
and evaluates the Company's accounting system and its system of internal
controls.
The Compensation Committee of the Board of Directors held five meetings
during fiscal 1996. The Compensation Committee, which is currently comprised of
Directors Staglin (Chairman), Saloner and Schlein, has overall responsibility
for the Company's compensation policies and determines the compensation payable
to the Company's executive officers, including their participation in certain of
the Company's employee benefit and stock option plans.
The Nomination Committee held one meeting during fiscal 1996. The
Nomination Committee of the Board of Directors consists of Directors Johnson
(Chairman), Brooks and Staglin. The Nomination Committee, on behalf of the Board
of Directors, makes nominations for Board of Directors to the Company.
The Executive Committee of the Board of Directors held five meetings during
fiscal 1996. The Executive Committee, which is currently comprised of Directors
Amochaev (Chairman), Brooks, Johnson and Staglin, has, in the intervals between
meetings of the Board of Directors, all the authority of the Board of Directors
in the management of the business and affairs of the Company, including, without
limitation, the power and authority to manage succession planning and evaluation
of strategic matters including mergers and acquisitions; provided, however, that
the Executive Committee shall not exercise its power and authority in a manner
inconsistent with any action, direction or instruction of the Board of
Directors.
DIRECTOR COMPENSATION
Effective as of July 1, 1994, non-employee directors each receive a
quarterly fee of $2,000 for Board membership, as well as $1,000 per meeting
attended. In addition, the Chairpersons of the Audit, Compensation and
Executive Committees each receive $2,000 per year. Effective as of February
1997, the members of the Executive Committee each receive an annual retainer of
$5,000. Also, each non-employee director of the Company who is not appointed as
a director pursuant to any contractual or other right or arrangement is eligible
for reimbursement in accordance with Company policy for expenses incurred in
connection with his attendance at meetings of the Board of Directors and the
committees thereof.
In addition, under the Automatic Option Grant Program of the Company's 1993
Stock Option/Stock Issuance Plan, as amended (the "1993 Plan"), (i) each
individual who first becomes a non-employee Board member, whether through
election by the Company's shareholders or appointment by the Board, and who has
not been in the prior employ of the Company, will receive, at the time of such
initial election or appointment, an automatic option grant for 5,000 shares of
Common Stock and (ii) each individual serving as a non-employee director on the
date of each Annual Meeting of Shareholders beginning with the 1994 Annual
Meeting will be granted a 5,000-share option on the date of such meeting,
provided such individual has served as a non-employee Board member for at least
six months. Mr. Schlein received an option grant of 5,000 shares of
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Common Stock under the Automatic Option Grant Program on February 16, 1996 in
connection with his appointment to the Board of Directors. The exercise price
for such grant was $21.875 per share, the fair market value per share of the
Common Stock on the grant date. Messrs. Brooks, Dougall, Hazlett, Johnson,
Saloner, Schlein and Staglin each received an option grant for 5,000 shares of
Common Stock under the Automatic Option Grant Program on May 24, 1996, in
connection with their re-election to the Board as non-employee directors at the
1995 Annual Stockholders Meeting. Each such grant has an exercise price of
$36.5625 per share, the fair market value per share of the Common Stock on the
grant date. Each of the options granted under the Automatic Grant Program has a
maximum term of 10 years, subject to earlier termination following the
optionee's cessation of Board service. Each option will become exercisable for
the option shares in a series of four successive equal annual installments over
the optionee's period of continued Board service, with the first such
installments to become exercisable upon the optionee's completion of six months
of Board service measured from the grant date. However, the option will
immediately become exercisable for all the option shares upon (i) certain
changes in ownership or control of the Company or (ii) the death or disability
of the optionee while serving as a Board member. In addition, upon the
successful completion of a hostile tender offer for more than 50% of the
Company's outstanding voting stock, each such option may be surrendered to the
Company for a cash distribution per surrendered option share in an amount equal
to the excess of (a) the tender offer price paid per share of Common Stock over
(b) the exercise price payable for such option share.
During 1996, pursuant to a consulting agreement, Dr. Hazlett performed
consulting services for the Company's Collaborative Replenishment Services
business and received $96,000 in consulting fees in connection therewith.
MANAGEMENT
Set forth below is information regarding the executive officers of the
Company who are not directors:
Name Age Position
- ---- --- --------
Paul Benchener 51 Vice President, Marketing
Stephen Brown 40 Vice President, Sales
Kathleen Dell 40 Vice President, Demand Chain Products
Shawn M. O'Connor 37 Vice President, Chief Financial Officer and
Secretary
John S. Simon 40 Executive Vice President
Philip Swift 46 Vice President, Product Development
MR. BENCHENER joined the Company in August 1996 as Vice President,
Marketing. Prior to joining the Company, from 1992 to 1996, Mr. Benchener was
Director of Global Quick Response Services at Levi Strauss & Co, a manufacturer
of apparel. From 1976 to 1995, Mr. Benchener held various positions with Levi
Strauss & Co. Mr. Benchener currently serves as Chair of the Voluntary
Interindustry Commerce Standards Board and on the Executive Committee of the
Uniform Code Council.
MR. BROWN joined the Company in June 1995 as Vice President, Sales. The
Company has accepted Mr. Brown's resignation effective June 30, 1997. Prior to
joining the Company, from 1984 to June 1995, Mr. Brown held various management
positions with Federal Express, a global transportation and logistics firm.
MS. DELL joined the Company in February 1993 as Vice President, Marketing,
and became Vice President, Demand Chain Products, in September 1996. The
Company has accepted Ms. Dell's resignation effective March 31, 1997. Before
joining the Company, from 1987 to 1993, Ms. Dell held various management
positions with General Electric Medical Systems, a manufacturer and designer of
diagnostic medical imaging equipment and services.
MR. O'CONNOR joined the Company in February 1995 and became Vice President,
Chief Financial Officer and Secretary in March 1995. Before joining the
Company, from 1992 to 1994, Mr. O'Connor was Vice President and Chief Financial
Officer for Diasonics Ultrasound, Inc., a medical equipment manufacturer. From
1988 to 1992, Mr. O'Connor held various management positions with Diasonics,
Inc.
MR. SIMON has held various positions with the Company since 1988, and
currently serves as Executive Vice President. From 1980 to 1988, Mr. Simon was
employed by Carter Hawley Hale Stores, Inc., a retail company,
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most recently as Senior Program Manager of its Information Services Division,
and prior to that held a number of merchandising, store management, and
information services positions.
MR. SWIFT joined the Company in October 1996 as Vice President, Product
Development. Before joining the Company, from 1992 to 1996, Mr. Swift was
Department Head of Information Products at VISA, a credit card transaction
processing company. From 1989 to 1991, Mr. Swift was Senior Project Manager at
Matson Navigation, a shipping company.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the ownership
of the Company's Common Stock as of December 31, 1996, by (i) all persons known
by the Company to be beneficial owners of five percent or more of its
outstanding Common Stock, (ii) each director of the Company and each nominee for
director, (iii) the Chief Executive Officer and each of the other executive
officers of the Company named in the Summary Compensation Table below
(collectively, the "Named Executive Officers") and (iv) all executive officers
and directors of the Company as a group.
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AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP (1)
-----------------------------------
NAME AND ADDRESS OF BENEFICIAL OWNER NUMBER OF SHARES PERCENT OF CLASS
- ------------------------------------ ---------------- ----------------
Peter R. Johnson (2) 1,147,650 -
1400 Marina Way South
Richmond, CA 94804
Warburg, Pincus Counselors, Inc. (5) 863,300 10.27%
466 Lexington Avenue
New York, NY 10017
The Kaufmann Fund, Inc. (3) 790,000 9.40%
140 East 45th Street, 43rd Floor
New York, NY 10017
Essex Investment Management Company (4) 635,000 7.56%
125 High Street, 29th Floor
Boston, MA 02110
Wilke/Thompson Capital Management, Inc. (6) 482,900 5.74%
3800 Norwest Center, 90 S. 7th Street
Minneapolis, MN 55402
Tania Amochaev (2) 26,835 *
Paul Benchener 485 *
Steven D. Brooks (7) 26,250 *
Stephen Brown (2) 8,321 *
Kathleen Dell (2) 30,580 *
John P. Dougall (2) 3,750 *
H. Lynn Hazlett (2) 19,997 *
Shawn M. O'Connor (2) 30,304 *
Garth Saloner (2) 11,250 *
Philip Schlein(2) 1,250 *
John S. Simon (2) 25,308 *
Garen K. Staglin (2) 31,500 *
Philip Swift 31 *
All current executive officers and directors
as a group (14 persons) (8) 1,363,511 16.21%
- ----------------
* Less than 1%.
10
<PAGE>
(1) Beneficial ownership is determined under the rules of the Securities and
Exchange Commission and generally includes voting or investment power with
respect to securities. Shares of Common Stock subject to options, warrants and
convertible notes currently exercisable or convertible, or exercisable or
convertible within 60 days of December 31, 1996, are deemed outstanding for
computing the percentage of the person holding such options but are not deemed
outstanding for computing the percentage of any other person. Except as
indicated by footnote, and subject to community property laws where applicable,
the persons named in the table have sole voting and investment power with
respect to all shares of Common Stock shown as beneficially owned by them.
(2) The amounts shown include shares issuable upon exercise of options to
purchase shares of Common Stock that were currently exercisable or exercisable
within 60 days of December 31, 1996, as follows: Mr. Johnson, 7,500; Ms.
Amochaev, 26,536; Mr. Brown, 7,500; Ms. Dell, 24,750; Mr. Dougall, 3,750; Dr.
Hazlett, 19,997; Mr. O'Connor, 30,000; Mr. Saloner, 11,250; Mr. Schlein, 1,250;
Mr. Simon, 23,500; and Mr. Staglin, 3,750.
(3) Pursuant to a Schedule 13G dated February 19, 1997, and filed with the
Securities and Exchange Commission, The Kaufmann Fund, Inc. has reported that as
of December 31, 1996, it had sole voting and dispositive power over all of these
shares.
(4) Pursuant to a Schedule 13G dated January 16, 1997, and filed with the
Securities and Exchange Commission, Essex Investment Management Company has
reported that as of December 31, 1996, it had shared voting and dispositive
power over all of these shares.
(5) Pursuant to a Schedule 13G dated January 13, 1997, and filed with the
Securities and Exchange Commission, Warburg, Pincus Counselors, Inc. has
reported that as of December 31, 1996, it had sole voting and dispositive power
over all of these shares.
(6) Pursuant to a Schedule 13G dated January 30, 1996, and filed with the
Securities and Exchange Commission, Wilke/Thompson Capital Management, Inc. has
reported that as of December 31, 1996, it had shared dispositive power over all
of these shares.
(7) Represents 15,000 shares issuable upon exercise of warrants to purchase
shares of Common Stock that were exercisable within 60 days of December 31,
1996, and 11,250 shares issuable upon exercise of options to purchase shares of
Common Stock that were exercisable within 60 days of December 31, 1996.
(8) The amount shown includes 186,033 shares issuable upon exercise of options
and warrants to purchase shares of Common Stock that were exercisable within 60
days of December 31, 1996.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES ACT OF 1934
Section 16(a) of the Securities and Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who own more than 10% of
a registered class of the Company's equity securities, to file with the
Securities and Exchange Commission (the "SEC") initial reports of ownership and
reports of changes in ownership of Common Stock and other equity securities of
the Company. Officers, directors and greater than 10% shareholders are required
by SEC regulations to furnish the Company with copies of all Section 16(a) forms
they file.
John P. Dougall, Director, failed to file on a timely basis one Form 4
reflecting one sale of the Company's Common Stock. To the Company's knowledge,
based solely upon a review of copies of reports furnished to the Company and
written representations that no other reports were required during the fiscal
year ended December 31, 1996, all the other Company's officers, directors and
greater than 10% shareholders complied with the Section 16(a) filing
requirements applicable thereto.
11
<PAGE>
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table provides certain summary information concerning the
compensation earned for services rendered in all capacities to the Company and
its subsidiaries for the 1996, 1995 and 1994 fiscal years by (i) the Company's
Chief Executive Officer and (ii) each of the four other most highly compensated
executive officers of the Company serving as such as of the end of the 1996
fiscal year whose base salary and bonus for such year was in excess of $100,000.
All the individuals named in such table will be hereafter referred to as the
"Named Executive Officers." No other executive officer of the Company who would
have otherwise been included in such table on the basis of salary and bonus
earned for the 1996 fiscal year resigned or terminated employment during that
fiscal year.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Compensation
Awards
------
Annual Compensation Securities
Name and Principal ------------------- Underlying All Other
Position Year Salary(1) Bonus Options(#) Compensation (7)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Tania Amochaev(2) 1996 $275,000 $150,000 12,500 $9,478
Former President and Chief 1995 $230,000 $150,000 25,000 $9,222
Executive Officer 1994 $200,000 $120,000 100,000 $6,952
Paul Benchener 1996 $ 70,269(4) $75,000 45,000 $2,250
Vice President, Marketing 1995 - - - -
1994 - - - -
Stephen Brown 1996 $125,000 $32,638 10,000 $41,944
Vice President, 1995 $67,708(5) $24,000 30,000 $15,779
Sales 1994 - - - -
H. Lynn Hazlett(3) 1996 - - - $96,000
President and Chief 1995 - - - $105,000
Executive Officer 1994 - - - -
Shawn M. O'Connor 1996 $157,500 $73,720 20,000 $4,750
Vice President, Chief 1995 $126,730(6) $65,000 65,000 $3,375
Financial Officer and 1994 - - - -
Secretary
John S. Simon 1996 $167,500 $72,029 25,000 $5,777
Executive Vice President 1995 $160,000 $65,000 24,000 $7,140
1994 $145,000 $55,000 15,000 $5,075
</TABLE>
- ---------------
(1) Includes employee contributions to the Company's 401(k) Plan.
(2) Ms. Amochaev resigned her position as President and Chief Executive
Officer of the Company effective February 10, 1997.
(3) Mr. Hazlett assumed the position of President and Chief Executive Officer
of the Company effective February 10, 1997.
(4) Mr. Benchener's annual salary was $180,000 for the 1996 fiscal year.
(5) Mr. Brown's annual salary was $125,000 for the 1995 fiscal year.
(6) Mr. O'Connor's annual salary was $150,000 for the 1995 fiscal year.
(7) The indicated amount for each Named Executive Officer is comprised of (i)
matching contributions made by the Company to the Company's 401(k) Plan on
behalf of such officer, (ii) long-term disability insurance premiums paid
by the Company on behalf of such officer, (iii) life insurance premiums
paid by the Company on behalf of such officer, (iv) supplemental health
insurance premiums paid by the Company on behalf of Mr. Simon's former
spouse, (v) reimbursed moving expenses and (vi) consulting fees.
12
<PAGE>
<TABLE>
<CAPTION>
Employer Disability Life Supplemental Reimbursed
401(k) Plan Insurance Insurance Health Insurance Moving Consulting
Name Year Contribution Premium Premium Premium Expenses Fees
- ---- ---- ------------ ------- ------- ------- -------- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Tania Amochaev 1996 $4,750 $4,042 $686 - - -
Former President and Chief 1995 $4,620 $3,916 $686 - - -
Executive Officer 1994 $2,000 $4,058 $894 - - -
Paul Benchener 1996 $2,250 - - - - -
Vice President, 1995 - - - - - -
Marketing 1994 - - - - - -
Stephen Brown 1996 $4,750 - - - $37,194 -
Vice President, 1995 $3,105 - - - $12,674 -
Sales 1994 - - - - - -
H. Lynn Hazlett 1996 - - - - - $96,000
President and Chief 1995 - - - - - $105,000
Executive Officer 1994 - - - - - -
Shawn M. O'Connor 1996 $4,750 - - - - -
Vice President, Chief 1995 $3,375 - - - - -
Financial Officer and 1994 - - - - - -
Secretary
John S. Simon 1996 $4,750 $588 $439 - - -
Executive Vice President 1995 $4,620 $569 $484 $1,467 - -
1994 $2,000 $871 $692 $1,512 - -
</TABLE>
STOCK OPTIONS
The following table sets forth information concerning the stock options
granted during the 1996 fiscal year to the Named Executive Officers. No stock
appreciation rights were granted during the 1996 fiscal year to the Named
Executive Officers.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Individual Grants
-----------------------------------------------------------------
Number of Percent of Total
Securities Options Potential Realizable Value at Assumed
Underlying Granted to Annual Rates of Stock Price
Options Employees in Exercise or Base Expiration Appreciation
Name Granted(#) Fiscal Year(1) Price Share(2) Date for Option Term(3)
---- ----------- -------------- -------------- ---- ---------------------------
5% 10%
-- ---
<S> <C> <C> <C> <C> <C> <C>
Tania Amochaev 12,500(4)(5) 5% $29.00 12/22/06 $ 590,474 $ 940,232
Paul Benchener 35,000(6) 14% $29.25 08/11/06 1,667,581 2,655,344
10,000(4) 4% $29.00 12/22/06 472,379 752,185
Stephen Brown 10,000(4) 4% $29.00 12/22/06 472,379 752,185
H. Lynn Hazlett 5,000(7) 2% $36.56 05/23/06 113,987 288,865
Shawn M. O'Connor 20,000(4) 8% $29.00 12/22/06 944,758 1,504,371
John S. Simon 25,000(4) 10% $29.00 12/22/06 1,180,949 1,880,463
</TABLE>
(1) The Company granted options to purchase 253,250 shares of Common Stock
during the 1996 fiscal year. All options were granted under the 1993 Plan. The
Plan Administrator may grant two types of stock appreciation rights in
connection with option grants made under such plan: tandem stock appreciation
rights which provide the holders with the right to surrender their options for
an appreciation distribution from the Company, payable in cash or Common Stock,
equal in amount to the excess of (a) the fair market value of the shares of
Common Stock subject to the surrendered option over (b) the aggregate exercise
price payable for such shares, and limited stock appreciation rights which allow
the holders to surrender their options to the Company, upon the successful
completion of a hostile tender offer for more than 50% of the outstanding Common
Stock, for a cash distribution in an amount per surrendered option share equal
to the excess of (a) the tender offer price
13
<PAGE>
paid per share of Common Stock over (b) the exercise price payable for such
share. No stock appreciation rights were granted to the Named Executive
Officers during the 1996 fiscal year.
(2) The exercise price may be paid in cash, in shares of the Company's Common
Stock valued at fair market value on the exercise date or through a cashless
exercise procedure involving a same-day sale of the purchased shares. The
Company may also finance the option exercise by loaning the optionee sufficient
funds to pay the exercise price for the purchased shares and the Federal and
state income or employment tax liability incurred by the optionee in connection
with such exercise. The optionee may be permitted, subject to the approval of
the Plan Administrator, to apply a portion of the shares purchased under the
option (or to deliver existing shares of Common Stock) in satisfaction of such
tax liability. The Plan Administrator also has the discretionary authority to
reprice outstanding options through the cancellation of those options and the
grant of replacement options with an exercise price equal to the lower fair
market value of the option shares on the regrant date.
(3) There is no assurance that the actual stock price appreciation over the 10-
year option term will be at the five percent and ten percent assumed annual
rates of compounded stock price appreciation or at any other level. Unless the
market price of the Company's Common Stock does, in fact, appreciate over the
option term, no value will be realized from the option grants.
(4) Each option will become exercisable in a series of four equal and
successive annual installments upon optionee's completion of each year of
service measured from the grant date. The grant date for each option was
December 23, 1996. The shares subject to such option will vest immediately in
the event the Company is acquired by a merger or asset sale, unless the option
is assumed by the acquiring entity. The Plan Administrator also has the
discretionary authority to provide for accelerated vesting of the option shares
upon (i) the occurrence of such acquisition, whether or not the option is
assumed, (ii) the termination of the optionee's employment within a specified
period following such acquisition, if the option does not otherwise accelerate
at the time of the acquisition, or (iii) a hostile change in control of the
Company's outstanding voting stock or change in the majority of the Board
effected through one or more proxy contests, or the subsequent termination of
the optionee's employment within a specified period following such hostile
change in control.
(5) The option will become exercisable in full upon the optionee's completion
of one year of service measured from the grant date. The grant date for the
option was December 23, 1996. The shares subject to such option will vest
immediately in the event the Company is acquired by a merger or asset sale,
unless the option is assumed by the acquiring entity. The Plan Administrator
also has the discretionary authority to provide for accelerated vesting of the
option shares upon (i) the occurrence of such acquisition, whether or not the
option is assumed, (ii) the termination of the optionee's employment within a
specified period following such acquisition, if the option does not otherwise
accelerate at the time of the acquisition, or (iii) a hostile change in control
of the Company's outstanding voting stock or change in the majority of the Board
effected through one or more proxy contests, or the subsequent termination of
the optionee's employment within a specified period following such hostile
change in control.
(6) The option will become exercisable in four equal and successive annual
installments upon the optionee's completion of each year of service measured
from the grant date. The grant date for the option was August 12, 1996. The
shares subject to such option will vest immediately in the event the Company is
acquired by a merger or asset sale, unless the option is assumed by the
acquiring entity. The Plan Administrator also has the discretionary authority to
provide for accelerated vesting of the option shares upon (i) the occurrence of
such acquisition, whether or not the option is assumed, (ii) the termination of
the optionee's employment within a specified period following such acquisition,
if the option does not otherwise accelerate at the time of the acquisition, or
(iii) a hostile change in control of the Company's outstanding voting stock or
change in the majority of the Board effected through one or more proxy contests,
or the subsequent termination of the optionee's employment within a specified
period following such hostile change in control.
(7) The option will become exercisable in four equal and successive
installments upon optionee's completion of six months of service measured from
the grant date. The grant date for each option was May 24, 1996. The shares
subject to such option will vest immediately in the event the Company is
acquired by a merger or asset sale, unless the option is assumed by the
acquiring entity. The Plan Administrator also has the discretionary authority
to provide for accelerated vesting of the option shares upon (i) the occurrence
of such acquisition, whether or not the option is assumed, (ii) the termination
of the optionee's employment within a specified period following such
acquisition, if the option does not otherwise accelerate at the time of the
acquisition, or (iii) a hostile change in control of the Company's outstanding
voting stock or change in the majority of the Board effected through one or more
proxy contests, or the subsequent termination of the optionee's employment
within a specified period following such hostile change in control.
14
<PAGE>
STOCK OPTION EXERCISES AND HOLDINGS
The following table sets forth certain information with respect to the
Named Executive Officers concerning the exercise of options during the 1996
fiscal year and unexercised options held by the Named Executive Officers at the
end of the 1996 fiscal year. No Named Executive Officers exercised SARs during
the 1996 fiscal year, and there were no SARs held by such individuals at the end
of the 1996 fiscal year.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised in-the-Money
Underlying Unexercised Options Options at Fiscal Year-End
at (market price of shares less
Fiscal Year-End exercise price)(1)(2)
(Number of Shares)
Shares Acquired -------------------------------- ---------------------------------
Name on Exercised (#) Value Realized(3) Exercisable Unexercisable Exercisable Unexercisable
- ---- ---------------- ----------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Tania Amochaev 60,000 $1,551,576 26,536 135,750 $439,510 $1,845,250
Paul Benchener - - - 45,000 - -
Stephen Brown - - 7,500 32,500 58,125 174,375
H. Lynn Hazlett - - 19,997 20,003(4) 239,650 199,719
Shawn O'Connor - - 30,000 55,000 369,375 420,625
John Simon 6,000 172,062 23,500 60,500 429,938 552,938
</TABLE>
- ---------
(1) "In-the-money" options are options whose exercise price was less than the
market price of the Company's Common Stock on December 31, 1996, the last
business day of the 1996 fiscal year.
(2) Based upon the market price of $28.50 per share, which was the closing
price per share of the Company's Common Stock as quoted on the Nasdaq
National Market on December 31, 1996.
(3) Equal to the excess of (i) the market price of the purchased share on the
date the option was exercised over (ii) the exercise price paid for the
shares.
(4) Does not include the option grant for 150,000 shares of common stock
granted on February 12, 1997 at an exercise price of $28.375 per share, the
fair market value of the Common Stock on such date.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors (the "Committee") is
currently comprised of three non-employee directors, Garen K. Staglin
(Chairman), Garth Saloner and Philip Schlein. Mr. Peter R. Johnson was a member
of this Committee from July 1994 to February 1996.
The Committee administers the Company's compensation policies and programs.
The Committee has responsibility for executive compensation matters, including
setting the base salaries of the Company's executive officers, approving
individual bonuses and bonus programs for executive officers, administering
certain employee benefit programs, and administering the Company's 1993 Plan,
under which grants may be made to executive officers and other key employees.
The following is a summary of policies of the Committee that affect the
compensation paid to the Company's executive officers, as reflected in the
tables and text set forth elsewhere in this proxy statement.
15
<PAGE>
GENERAL COMPENSATION POLICY. The overall policy of the Committee is to
offer the Company's executive officers competitive compensation opportunities
based upon their personal performance, the financial performance of the Company
and their contribution to that performance. One of the primary objectives is to
have a substantial portion of each executive officer's compensation contingent
upon the Company's financial success as well as upon such executive officer's
own level of performance. Each executive officer's compensation package is
generally comprised of three elements: (i) base salary, which is determined on
the basis of the individual's position and responsibilities with the Company,
the level of his or her performance, and the financial performance of the
Company, (ii) incentive performance awards payable in cash and tied to the
achievement of specified performance goals and (iii) long-term stock-based
incentive awards designed to strengthen the mutuality of interests between the
executive officers and the Company's shareholders. Generally, as an executive
officer's level of responsibility increases, a greater portion of that
individual's total compensation will be dependent upon Company performance and
stock price appreciation rather than base salary.
FACTORS. The principal factors considered in establishing the components of
each executive officer's compensation package for the 1996 fiscal year are
summarized below. The Committee may, in its discretion, apply entirely
different factors, such as different measures of financial performance, for
future fiscal years.
BASE SALARY. In setting the base salary for each executive officer,
the Committee considers executive compensation data compiled from surveys of
computer services companies. The Committee selects such corporations on the
basis of a number of factors, such as their size and organizational complexity,
the nature of their businesses, the regions in which they operate, the structure
of their compensation programs (including the extent to which they rely on
bonuses and other contingent forms of compensation) and the availability of
compensation information. The corporations with whom the Company compares its
compensation are not necessarily those included in the indices used to compare
shareholder return in the Stock Performance Chart. These surveys are performed
and compiled by various independent outside consulting firms and are conducted
on local as well as national bases. Using survey data as a starting point, the
Committee evaluates each executive's level of performance as compared to the
performance of other officers within the Company to determine the executive's
base salary. Adjustments to each officer's base salary are considered annually
and are determined based upon: (i) changes in the level of base salaries of
comparable positions in the market as determined by survey data, (ii) personal
performance in the past fiscal year and (iii) the overall performance of the
Company.
INCENTIVE COMPENSATION. For the 1996 fiscal year, a bonus program was
established under which each executive officer could earn a bonus on the basis
of the Company's revenue, the Company's net operating profit and that person's
individual performance, based on predetermined goals. The potential bonus
amount would be determined by each individual's base salary and job level, and
the actual bonus paid varied with the factors described above. The amounts paid
to each executive officer under the program ranged from a high of $150,000 to a
low of $17,066 for the entire 1996 fiscal year.
LONG-TERM STOCK-BASED INCENTIVE COMPENSATION. From time to time, the
Committee approves annual grants of stock options to each of the Company's
executive officers under the 1993 Plan. The grants are designed to align the
interests of each executive officer with those of the shareholders and provide
each individual with a significant incentive to manage the Company from the
perspective of an owner with an equity stake in the business. Each grant
generally allows the officer to acquire shares of the Company's Common Stock at
a fixed price per share (the market price on the grant date) over a specified
period of time (up to 10 years). The option generally becomes exercisable in a
series of annual installments over the officer's continued employment with the
Company. Accordingly, the option provides a return to the executive officer
only if the market price of the shares appreciates over the option term and the
officer continues in the Company's employ. The size of the option grant to each
executive officer is designed to create a meaningful opportunity for stock
ownership and is based upon the executive officer's current position with the
Company, internal comparability with option grants made to other Company
executives, the executive officer's current level of performance and the
executive officer's potential for future responsibility and promotion over the
option term. The Committee also takes into account the number of vested and
unvested options held by the executive officer in order to maintain an
appropriate level of equity incentive for that
16
<PAGE>
individual. However, the Committee does not adhere to any specific guidelines
as to the relative option holdings of the Company's executive officers.
CEO COMPENSATION. The compensation payable to Ms. Amochaev, the Company's
Former President and Chief Executive Officer during fiscal year 1996, was
determined pursuant to the above principles and by the terms of her employment
agreement, which was entered into as of April 22, 1992. Ms. Amochaev's base
salary for fiscal year 1996 was $275,000. Based upon the Committee's evaluation
of the overall performance of the Company and Ms. Amochaev's individual
performance as President and Chief Executive Officer in fiscal year 1996, she
was awarded a bonus of $150,000. In addition, Ms. Amochaev was also granted
options to purchase 12,500 shares of the Company's Common Stock under the terms
and conditions of the 1993 Plan. Such options will become exercisable one year
from the grant date. The exercise price of $29.00 of these options is equal to
100% of the fair market value of the Company's Common Stock on the date of the
grant. The Committee's favorable evaluations of overall Company performance was
based on the Company's having met certain stated goals and milestones such as
revenue and operating profit growth, long-term strategy and new product
introduction.
In February 1997, Ms. Amochaev, who had been the President and Chief
Executive Officer since 1993, decided, for personal reasons, to transition from
her current operating management role with the Company and has assumed the
position of Chairman of the Executive Committee, allowing her to continue to
contribute to the strategic and technological oversight of the Company. The
Board of Directors named H. Lynn Hazlett as Ms. Amochaev's successor as
President and Chief Executive Officer effective February 10, 1997.
Dr. Hazlett's base salary for fiscal year 1997 is $275,000 and his
targeted bonus is $150,000. In addition, Dr. Hazlett was granted options to
purchase 150,000 shares of the Company's Common Stock under the terms and
conditions of the 1993 Plan. Such option will become exercisable in two equal
and successive annual installments upon his completion of each year of service
measured from the grant date. The exercise price of $28.375 of these options is
equal to 100% of the fair market value of the Company's Common Stock on the date
of grant. Dr. Hazlett was also paid a signing bonus of $150,000. Dr. Hazlett
will be eligible for an additional $150,000 bonus if consulting revenue from his
prospects and clients exceeds a targeted amount in 1997 and another $150,000 if
consulting revenue exceeds a targeted amount in 1998.
TAX LIMITATION. As a result of Federal tax legislation enacted in 1993, a
publicly held company such as the Company will not be allowed a Federal income
tax deduction for compensation paid to certain executive officers, to the extent
that compensation exceeds $1 million per officer in any year. This limitation
was in effect for the 1996 fiscal year, but the compensation paid to the
Company's executive officers for the 1996 fiscal year did not exceed the $1
million limit per officer. In addition, the shareholders approved at the 1994
Annual Meeting an amendment to the Company's 1993 Plan which imposed a limit on
the maximum number of shares of Common Stock for which any one participant may
be granted stock options, stock appreciation rights and direct stock issuances
over the remaining term of the plan. The effect of this amendment to the 1993
Plan is to exempt from the $1 million limitation any compensation deemed paid to
an officer when he exercises an outstanding option under the 1993 Plan. Because
it is very unlikely that the cash compensation payable to any of the Company's
executive officers in the foreseeable future will approach the $1 million limit,
the Compensation Committee has decided at this time not to take any other action
to limit or restructure the elements of cash compensation payable to the
Company's executive officers. The Compensation Committee will reconsider this
decision should the individual cash compensation of any executive officer ever
approach the $1 million level.
Submitted by the Compensation Committee of the Company's Board of
Directors:
Garen K. Staglin, Chairman, Compensation Committee
Garth Saloner, Member, Compensation Committee
Philip Schlein, Member, Compensation Committee
17
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee of the Company's Board of
Directors are currently Garth Saloner, Garen K. Staglin and Philip Schlein.
Mr. Peter R. Johnson was a member of this committee from July 1994 until
February 1996.
No member of the Compensation Committee was at any time during the 1996
fiscal year, or, other than Mr. Johnson, at any other time, an officer or
employee of the Company. No executive officer of the Company serves as a member
of the Board of Directors or Compensation Committee of any entity which has one
or more executive officers serving as a member of the Company's Board of
Directors or Compensation Committee.
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT
AND CHANGE-IN-CONTROL AGREEMENTS
The Company has an existing employment agreement with Ms. Tania Amochaev,
the former Chief Executive Officer of the Company, pursuant to which Ms.
Amochaev is to be paid a base monthly salary of $35,416 from January 1, 1997
through February 28, 1997; a base monthly salary of $17,708 from March 1, 1997
through August 31, 1997; and a base monthly salary of $3,500 from September 1,
1997 through December 31, 1997. The employment agreement is terminable by
either party at any time. However, if Ms. Amochaev's employment is terminated
other than for cause, she will be entitled to the continuation of salary and
benefits for a period of six months. Should Ms. Amochaev's salary be reduced by
15% or more or her responsibilities be reduced following a change in control of
the Company, then upon her resignation she will be entitled to continued salary
and benefits for a period of six months. On December 2, 1994, Ms. Amochaev was
granted an option for 75,000 shares at an exercise price of $14.125 per share,
the fair market value per share on the grant date. The option will become
exercisable upon Ms. Amochaev's completion of six (6) years of service with the
Company, measured from the grant date. However, the option is subject to
acceleration upon attainment of certain performance milestones. In addition,
the option will become immediately exercisable for all the option shares in the
event the Company is acquired through a merger or asset sale in which (i) the
option is not to be assumed by the successor corporation, (ii) the amount
payable to the Company's stockholders is not less than a prescribed minimum
dollar value per outstanding share or (iii) Ms. Amochaev ceases to serve as both
the Chief Executive Officer and member of the Board of the successor
corporation.
The Company entered into an employment agreement with Dr. H. Lynn Hazlett,
the current Chief Executive Officer of the Company, on February 10, 1997,
pursuant to which Dr. Hazlett is to be paid a base salary of $275,000 per year,
subject to periodic adjustments by the Board of Directors, and will be entitled
to an additional incentive compensation based upon the achievement of specified
individual and Company performance targets. The employment agreement is
terminable by either party at any time. However, if Dr. Hazlett's employment is
terminated other than for cause, he will be entitled to the continuation of
salary and benefits for a period of six months. Should Dr. Hazlett's salary be
reduced by 15% or more or his responsibilities be reduced following a change in
control of the Company, then upon his resignation he will be entitled to
continued salary and benefits for a period of 24 months less the period of
employment. Dr. Hazlett will be eligible for an additional $150,000 bonus if
consulting revenue exceeds a targeted amount in 1997 and another $150,000 if
consulting revenue exceeds a targeted amount in 1998.
If John Simon's employment is terminated other than for cause, then he will
be entitled to a continuation of salary and benefits for a period of six months.
Should Mr. Simon's salary be reduced by 25% or more or his responsibilities be
otherwise materially reduced following a change in control of the Company, then
upon his resignation he will be entitled to continued salary and benefits for a
period of six months from the date of the change in control.
If Paul Benchener's employment is terminated other than for cause, then he
will be entitled to a continuation of salary and benefits for a period of 12
months. Should Mr. Benchener's salary be reduced by 15% or more or his
responsibilities be reduced following a change in control of the Company, then
upon his resignation, he will be entitled to continued salary and benefits for a
period of 12 months. In addition, should there be a change of
18
<PAGE>
control prior to the full vesting of his initial option grant for 35,000 shares
of stock, the unvested shares will accelerate and vest in full 12 months from
the date of change of control.
None of the Company's other executive officers have employment agreements
with the Company, and their employment may be terminated at any time at the
discretion of the Board of Directors. However, the Compensation Committee of
the Board of Directors has the authority as Plan Administrator of the 1993 Plan
to provide for the accelerated vesting of the shares of Common Stock subject to
outstanding options held by the Chief Executive Officer and the Company's other
executive officers, whether granted under that plan or any predecessor plan, in
the event their employment were to be terminated (whether involuntarily or
through a forced resignation) following (i) an acquisition of the Company by
merger or asset sale or (ii) a change in control of the Company effected
through a successful tender offer for more than 50% of the Company's outstanding
Common Stock or through a change in the majority of the Board as a result of one
or more contested elections for Board membership. The Compensation Committee
also has the authority under the 1993 Plan to accelerate the vesting of
outstanding options immediately upon such acquisition or hostile take-over.
MATERIAL TRANSACTIONS WITH RELATED PARTIES
On March 20, 1995, the Company entered into a two-year consulting contract
with H. Lynn Hazlett, one of the Company's directors, pursuant to which Dr.
Hazlett provides sales and marketing services relating to the Company's
Collaborative Replenishment Service ("CRS") business. As compensation for his
services, Dr. Hazlett received (i) an option to purchase 25,000 shares of the
Company's Common Stock at an exercise price of $16.00 per share, the market
price on the date of grant, which option will vest monthly over a period of 48
months, provided Dr. Hazlett provides consulting services under the contract for
24 months and either continues to provide consulting services or remains a
member of the Board for an additional 24-month period and (ii) $25,000 in cash
compensation upon signing of the agreement. Dr. Hazlett also received $8,000
monthly during the course of his provision of services under the contract. This
contract was terminated upon Dr. Hazlett's appointment as President and Chief
Executive Officer of the Company effective February 10, 1997.
PERFORMANCE GRAPH
The following graph compares the cumulative total shareholder return on the
Common Stock of the Company with that of the S&P 500 Stock Index, a broad market
index published by Standard & Poor's Corporation, and a selected retail
processing services company stock index compiled by Alex. Brown & Sons
Incorporated. The comparison for each of the periods assumes that $100 was
invested on August 5, 1993 (the date of the Company's initial public offering)
in the Company's Common Stock, the stocks included in the S&P 500 Stock Index
and the stocks included in the retail processing services company index. These
indices, which reflect formulas for dividend reinvestment and weighing of
individual stocks, do not necessarily reflect returns that could be achieved by
individual investors.
19
<PAGE>
COMPARISON OF YEARLY CUMULATIVE TOTAL RETURN
AMONG QRS, S&P 500 INDEX AND PROCESSING SERVICES COMPANY INDEX
(CHART)
QRSI INDEX S&P500
08/31/93 100.0% 100.0% 100.0%
09/01/93 100.0% 100.2% 99.9%
09/02/93 97.5% 100.0% 99.5%
09/03/93 103.8% 100.1% 99.5%
09/07/93 103.8% 100.2% 98.9%
09/08/93 106.3% 100.1% 98.5%
09/09/93 117.1% 100.1% 98.7%
09/10/93 129.1% 101.1% 99.6%
09/13/93 128.5% 103.7% 99.7%
09/14/93 124.1% 103.8% 99.2%
09/15/93 129.1% 104.8% 99.6%
09/16/93 132.9% 106.1% 99.1%
09/17/93 131.6% 107.2% 99.0%
09/20/93 131.6% 107.8% 98.2%
09/21/93 136.7% 107.0% 97.7%
09/22/93 145.6% 107.8% 98.4%
09/23/93 159.5% 111.2% 98.7%
09/24/93 151.3% 111.1% 98.7%
09/27/93 149.4% 112.3% 99.6%
09/28/93 149.4% 112.9% 99.6%
09/29/93 141.8% 115.1% 99.3%
09/30/93 141.8% 114.5% 99.0%
10/01/93 141.1% 114.4% 99.5%
10/04/93 141.8% 113.8% 99.5%
10/05/93 137.3% 112.6% 99.5%
10/06/93 137.3% 113.6% 99.4%
10/07/93 142.4% 113.4% 99.1%
10/08/93 143.0% 114.2% 99.3%
10/11/93 139.2% 114.1% 99.4%
10/12/93 139.2% 114.6% 99.5%
10/13/93 143.0% 117.2% 99.6%
10/14/93 153.8% 120.4% 100.7%
10/15/93 141.8% 121.1% 101.3%
10/18/93 145.6% 120.9% 101.1%
10/19/93 139.9% 119.3% 100.6%
10/20/93 141.8% 118.6% 100.5%
10/21/93 141.1% 119.2% 100.4%
10/22/93 140.5% 120.1% 99.9%
10/25/93 143.0% 120.4% 100.1%
10/26/93 140.5% 120.5% 100.2%
10/27/93 148.1% 121.1% 100.2%
10/28/93 149.4% 123.3% 100.9%
10/29/93 151.9% 124.6% 100.9%
11/01/93 150.6% 125.6% 101.2%
11/02/93 145.6% 125.5% 101.1%
11/03/93 139.2% 123.4% 99.9%
11/04/93 132.9% 121.3% 98.7%
11/05/93 130.4% 120.0% 99.1%
11/08/93 140.5% 120.5% 99.3%
11/09/93 141.8% 123.2% 99.3%
11/10/93 139.2% 122.7% 100.0%
11/11/93 136.7% 123.3% 99.8%
11/12/93 139.2% 124.4% 100.4%
11/15/93 138.0% 124.1% 100.0%
11/16/93 138.0% 124.3% 100.7%
11/17/93 134.2% 121.0% 100.3%
11/18/93 122.2% 118.8% 100.0%
11/19/93 121.5% 118.3% 99.8%
11/22/93 115.2% 116.9% 99.0%
11/23/93 126.6% 116.0% 99.5%
11/24/93 126.6% 114.3% 99.7%
11/26/93 125.3% 114.6% 99.9%
11/29/93 125.3% 114.5% 99.6%
11/30/93 121.5% 113.5% 99.6%
12/01/93 126.6% 117.9% 99.6%
12/02/93 125.3% 119.0% 99.9%
12/03/93 134.8% 118.4% 100.3%
12/06/93 132.9% 118.8% 100.6%
12/07/93 132.9% 116.9% 100.7%
12/08/93 141.8% 117.5% 100.6%
12/09/93 141.8% 116.6% 100.1%
12/10/93 141.8% 116.0% 100.1%
12/13/93 140.5% 116.2% 100.5%
12/14/93 138.0% 116.7% 99.9%
12/15/93 125.3% 116.5% 99.6%
12/16/93 127.8% 116.7% 100.0%
12/17/93 130.4% 118.6% 100.6%
12/20/93 121.5% 119.0% 100.5%
12/21/93 123.4% 118.2% 100.4%
12/22/93 115.2% 118.1% 100.8%
12/23/93 115.2% 118.6% 100.8%
12/27/93 112.7% 119.8% 101.5%
12/28/93 112.7% 118.5% 101.6%
12/29/93 115.2% 119.1% 101.5%
12/30/93 112.7% 118.4% 101.1%
12/31/93 111.4% 118.0% 100.6%
01/03/94 113.9% 118.0% 100.4%
01/04/94 122.8% 118.6% 100.7%
01/05/94 122.8% 118.4% 100.9%
01/06/94 121.5% 118.8% 100.8%
01/07/94 117.7% 119.3% 101.4%
01/10/94 117.7% 119.2% 102.5%
01/11/94 117.7% 120.1% 102.3%
01/12/94 117.7% 118.9% 102.3%
01/13/94 118.4% 117.6% 101.9%
01/14/94 116.5% 119.3% 102.4%
01/17/94 116.5% 121.4% 102.1%
01/18/94 113.9% 120.3% 102.3%
01/19/94 113.9% 117.1% 102.3%
01/20/94 115.2% 117.7% 102.5%
01/21/94 106.3% 118.8% 102.4%
01/24/94 106.3% 118.7% 101.8%
01/25/94 103.8% 119.9% 101.6%
01/26/94 113.9% 118.3% 102.1%
01/27/94 116.5% 118.9% 102.9%
01/28/94 118.4% 120.3% 103.3%
01/31/94 120.3% 119.8% 103.9%
02/01/94 120.3% 119.9% 103.5%
02/02/94 120.3% 118.6% 104.0%
02/03/94 119.6% 117.7% 103.7%
02/04/94 113.9% 116.8% 101.3%
02/07/94 110.1% 116.6% 101.8%
02/08/94 110.1% 114.9% 101.6%
02/09/94 111.4% 115.2% 102.0%
02/10/94 107.6% 115.1% 101.2%
02/11/94 111.4% 113.8% 101.4%
02/14/94 112.7% 112.3% 101.4%
02/15/94 111.4% 114.2% 101.9%
02/16/94 113.9% 115.6% 102.0%
02/17/94 112.7% 115.4% 101.5%
02/18/94 112.7% 114.3% 100.9%
02/22/94 116.5% 114.1% 101.7%
02/23/94 113.9% 113.3% 101.5%
02/24/94 116.5% 111.7% 100.1%
02/25/94 116.5% 112.4% 100.5%
02/28/94 113.9% 113.4% 100.8%
03/01/94 116.5% 112.8% 100.2%
03/02/94 115.2% 113.0% 100.3%
03/03/94 113.9% 112.9% 99.9%
03/04/94 116.5% 112.9% 100.3%
03/07/94 127.8% 114.0% 100.7%
03/08/94 127.8% 114.2% 100.5%
03/09/94 126.6% 114.5% 100.8%
03/10/94 126.6% 113.8% 100.1%
03/11/94 125.3% 113.5% 100.6%
03/14/94 125.3% 113.5% 100.8%
03/15/94 130.4% 113.0% 100.7%
03/16/94 129.1% 113.4% 101.3%
03/17/94 128.5% 115.1% 101.6%
03/18/94 130.4% 115.3% 101.6%
03/21/94 127.8% 114.7% 101.1%
03/22/94 125.3% 115.5% 101.1%
03/23/94 129.1% 115.6% 101.1%
03/24/94 121.5% 113.7% 100.2%
03/25/94 120.3% 113.2% 99.4%
03/28/94 116.5% 111.8% 99.2%
03/29/94 112.7% 111.4% 97.6%
03/30/94 105.7% 110.3% 96.1%
03/31/94 108.9% 109.5% 96.2%
04/04/94 105.1% 108.1% 94.7%
04/05/94 112.7% 109.2% 96.7%
04/06/94 108.9% 109.4% 96.7%
04/07/94 108.5% 110.2% 97.3%
04/08/94 102.5% 109.6% 96.4%
04/11/94 97.5% 109.4% 97.0%
04/12/94 88.6% 108.1% 96.5%
04/13/94 82.9% 106.8% 96.3%
04/14/94 86.1% 106.4% 96.3%
04/15/94 87.3% 106.6% 96.3%
04/18/94 84.8% 107.1% 95.4%
04/19/94 89.2% 106.5% 95.5%
04/20/94 89.9% 106.3% 95.3%
04/21/94 89.9% 108.5% 96.8%
04/22/94 89.9% 110.3% 96.6%
04/25/94 92.4% 112.6% 97.7%
04/26/94 92.4% 111.6% 97.5%
04/28/94 90.5% 111.3% 96.9%
04/29/94 88.6% 111.9% 97.3%
05/02/94 88.0% 113.3% 97.7%
05/03/94 88.0% 113.2% 97.7%
05/04/94 87.3% 113.8% 97.4%
05/05/94 88.6% 113.7% 97.4%
05/06/94 86.7% 110.7% 96.6%
05/09/94 77.2% 109.7% 95.4%
05/10/94 75.9% 109.9% 96.2%
05/11/94 72.2% 108.5% 95.2%
05/12/94 65.2% 109.2% 95.7%
05/13/94 63.3% 111.4% 95.8%
05/16/94 63.3% 110.0% 95.9%
05/17/94 58.9% 111.2% 96.9%
05/18/94 62.0% 111.1% 97.9%
05/19/94 62.0% 111.4% 98.5%
05/20/94 58.2% 111.4% 98.1%
05/23/94 58.2% 110.4% 97.8%
05/24/94 59.8% 110.3% 98.1%
05/25/94 61.4% 109.3% 98.4%
05/26/94 62.0% 109.2% 98.6%
05/27/94 59.5% 109.3% 98.7%
05/31/94 62.0% 109.9% 98.5%
06/01/94 62.0% 110.0% 98.7%
06/02/94 62.0% 110.6% 98.7%
06/03/94 59.5% 110.5% 99.3%
06/06/94 63.3% 112.1% 99.0%
06/07/94 62.0% 112.5% 98.8%
06/08/94 60.1% 114.4% 98.6%
06/09/94 63.3% 113.6% 98.8%
06/10/94 61.1% 114.4% 98.9%
06/13/94 63.3% 113.9% 99.0%
06/14/94 59.5% 114.8% 99.7%
06/15/94 62.0% 113.9% 99.4%
06/16/94 63.3% 114.6% 99.6%
06/17/94 60.8% 114.6% 98.9%
06/20/94 60.8% 114.1% 98.3%
06/21/94 48.1% 112.1% 97.4%
06/22/94 52.5% 111.2% 97.7%
06/23/94 49.2% 110.2% 97.0%
06/24/94 49.4% 108.7% 95.5%
06/27/94 52.5% 110.5% 96.5%
06/28/94 54.4% 110.5% 96.2%
06/29/94 51.9% 111.4% 96.6%
06/30/94 50.6% 110.6% 95.8%
07/01/94 53.8% 112.1% 96.3%
07/05/94 51.3% 110.6% 96.3%
07/06/94 50.6% 111.4% 96.2%
07/07/94 50.6% 110.7% 96.7%
07/08/94 54.4% 111.3% 97.0%
07/11/94 50.6% 111.4% 96.7%
07/12/94 50.6% 110.9% 96.6%
07/13/94 47.2% 111.4% 96.8%
07/14/94 49.4% 113.7% 97.8%
07/15/94 46.8% 112.8% 98.0%
07/18/94 46.8% 114.0% 98.2%
07/19/94 46.8% 114.4% 97.9%
07/20/94 46.8% 113.2% 97.4%
07/21/94 46.8% 112.1% 97.6%
07/22/94 52.5% 113.9% 97.7%
07/25/94 54.4% 112.8% 98.0%
07/26/94 54.4% 113.1% 97.8%
07/27/94 53.2% 112.3% 97.6%
07/28/94 51.9% 111.9% 98.0%
07/29/94 54.4% 112.5% 98.9%
08/01/94 53.2% 113.5% 99.4%
08/02/94 54.4% 113.8% 99.4%
08/03/94 53.8% 112.1% 99.5%
08/04/94 55.4% 110.8% 98.9%
08/05/94 55.7% 111.7% 98.6%
08/08/94 58.2% 111.6% 98.8%
08/09/94 60.8% 110.7% 98.8%
08/10/94 60.8% 111.0% 99.3%
08/11/94 63.3% 110.4% 99.0%
08/12/94 64.6% 109.9% 99.6%
08/15/94 64.6% 110.7% 99.5%
08/16/94 69.0% 111.1% 100.3%
08/17/94 69.6% 110.5% 100.3%
08/18/94 69.6% 111.1% 99.9%
08/19/94 65.8% 111.1% 100.0%
08/22/94 65.8% 111.6% 99.7%
08/23/94 69.6% 112.7% 100.2%
08/24/94 67.7% 113.4% 101.2%
08/25/94 65.8% 113.4% 101.0%
08/26/94 67.1% 113.7% 102.2%
08/29/94 65.8% 113.2% 102.4%
08/30/94 67.1% 113.6% 102.7%
08/31/94 64.6% 113.6% 102.6%
09/01/94 67.1% 113.6% 102.1%
09/02/94 68.4% 113.3% 101.6%
09/06/94 68.4% 114.0% 101.8%
09/07/94 73.4% 113.8% 101.6%
09/08/94 75.9% 114.4% 102.1%
09/09/94 75.9% 113.6% 101.0%
09/12/94 72.2% 113.1% 100.6%
09/13/94 75.3% 114.4% 100.8%
09/14/94 75.9% 114.8% 101.1%
09/15/94 75.9% 116.8% 102.4%
09/16/94 75.9% 116.1% 101.6%
09/19/94 73.4% 117.5% 101.6%
09/20/94 72.2% 116.6% 100.0%
09/21/94 72.2% 115.9% 99.5%
09/22/94 75.3% 116.1% 99.5%
09/23/94 74.7% 116.8% 99.2%
09/26/94 70.9% 117.6% 99.4%
09/27/94 74.7% 117.4% 99.7%
09/28/94 74.7% 117.2% 100.3%
09/29/94 74.7% 116.2% 99.7%
09/30/94 78.5% 115.3% 99.8%
10/03/94 76.6% 115.0% 99.6%
10/04/94 74.7% 114.9% 98.1%
10/05/94 77.2% 114.1% 97.8%
10/06/94 70.3% 112.0% 97.6%
10/07/94 72.2% 112.0% 98.2%
10/10/94 78.5% 113.6% 99.0%
10/11/94 77.2% 115.3% 100.5%
10/12/94 79.1% 116.2% 100.4%
10/13/94 81.0% 116.5% 100.9%
10/14/94 81.0% 116.8% 101.2%
10/17/94 79.7% 116.4% 101.2%
10/18/94 78.5% 116.0% 100.9%
10/19/94 81.0% 119.4% 101.4%
10/20/94 78.5% 119.1% 100.7%
10/21/94 79.7% 117.9% 100.3%
10/24/94 78.5% 119.9% 99.4%
10/25/94 79.1% 118.4% 99.6%
10/26/94 77.2% 118.5% 99.8%
10/27/94 77.2% 119.6% 100.5%
10/28/94 82.3% 121.6% 102.2%
10/31/94 82.3% 121.5% 101.9%
11/01/94 79.1% 120.3% 101.0%
11/02/94 78.5% 119.8% 100.6%
11/03/94 78.5% 120.9% 100.9%
11/04/94 81.6% 121.5% 99.7%
11/07/94 79.7% 121.8% 99.9%
11/08/94 81.0% 122.5% 100.5%
11/09/94 83.5% 123.3% 100.4%
11/10/94 83.5% 123.2% 100.2%
11/11/94 81.0% 122.9% 99.7%
11/14/94 80.4% 122.9% 100.5%
11/15/94 83.5% 122.7% 100.3%
11/16/94 79.7% 122.0% 100.4%
11/17/94 80.4% 122.5% 100.0%
11/18/94 75.9% 121.9% 99.5%
11/21/94 73.4% 121.9% 98.9%
11/22/94 77.2% 119.6% 97.1%
11/23/94 75.9% 118.2% 97.1%
11/25/94 74.1% 117.7% 97.6%
11/28/94 73.4% 118.0% 98.0%
11/29/94 72.5% 117.9% 98.2%
11/30/94 70.9% 115.3% 97.9%
12/01/94 72.2% 115.7% 96.8%
12/02/94 71.5% 116.4% 97.8%
12/05/94 72.2% 115.8% 97.8%
12/06/94 72.2% 116.4% 97.7%
12/07/94 67.1% 117.2% 97.3%
12/08/94 65.8% 115.2% 96.1%
12/09/94 69.6% 114.0% 96.4%
12/12/94 65.2% 113.9% 97.0%
12/13/94 65.8% 115.4% 97.1%
12/14/94 64.6% 117.9% 98.1%
12/15/94 64.6% 118.5% 98.2%
12/16/94 64.6% 118.3% 99.0%
12/19/94 69.6% 118.2% 98.8%
12/20/94 64.6% 118.1% 98.6%
12/21/94 64.6% 118.4% 99.2%
12/22/94 65.8% 119.8% 99.2%
12/23/94 64.6% 120.6% 99.2%
12/27/94 60.8% 121.6% 99.8%
12/28/94 65.8% 122.1% 99.4%
12/29/94 60.8% 122.4% 99.5%
12/30/94 63.9% 121.2% 99.1%
01/03/95 64.6% 123.7% 99.0%
01/04/95 64.6% 124.7% 99.4%
01/05/95 64.6% 125.7% 99.3%
01/06/95 60.8% 126.7% 99.4%
01/09/95 64.6% 126.5% 99.4%
01/10/95 65.8% 127.9% 99.6%
01/11/95 67.1% 128.7% 99.6%
01/12/95 65.8% 128.5% 99.6%
01/13/95 65.8% 128.6% 100.5%
01/16/95 67.1% 129.0% 101.3%
01/17/95 65.8% 128.0% 101.4%
01/18/95 67.1% 127.2% 101.3%
01/19/95 67.1% 126.4% 100.7%
01/20/95 67.1% 125.8% 100.3%
01/23/95 63.3% 125.3% 100.5%
01/24/95 60.1% 125.6% 100.5%
01/25/95 55.7% 125.1% 100.8%
01/26/95 55.7% 124.7% 101.0%
01/27/95 58.9% 124.7% 101.5%
01/30/95 59.5% 124.9% 101.1%
01/31/95 65.2% 125.7% 101.5%
02/01/95 74.7% 126.0% 101.5%
02/02/95 82.3% 126.7% 102.0%
02/03/95 82.3% 127.3% 103.2%
02/06/95 84.8% 129.3% 103.9%
02/07/95 84.8% 130.1% 103.7%
02/08/95 83.5% 130.8% 103.8%
02/09/95 87.3% 131.6% 103.6%
02/10/95 87.3% 131.6% 103.9%
02/13/95 87.3% 133.2% 103.9%
02/14/95 84.8% 133.8% 104.1%
02/15/95 88.6% 132.8% 104.5%
02/16/95 87.3% 133.5% 104.7%
02/17/95 84.8% 131.8% 104.0%
02/21/95 82.3% 129.8% 104.1%
02/22/95 82.3% 129.6% 104.6%
02/23/95 82.9% 131.8% 105.0%
02/24/95 82.3% 130.7% 105.3%
02/27/95 81.0% 130.3% 104.4%
02/28/95 81.0% 132.1% 105.1%
03/01/95 85.4% 130.8% 104.8%
03/02/95 86.1% 131.0% 104.7%
03/03/95 87.3% 131.6% 104.7%
03/06/95 87.3% 129.8% 104.8%
03/07/95 87.3% 129.9% 104.0%
03/08/95 87.3% 129.9% 104.2%
03/09/95 84.8% 131.1% 104.2%
03/10/95 92.4% 133.4% 105.6%
03/13/95 91.1% 135.7% 105.7%
03/14/95 93.7% 134.9% 106.3%
03/15/95 95.6% 135.9% 106.1%
03/16/95 95.6% 136.7% 106.9%
03/17/95 97.5% 137.2% 106.9%
03/20/95 97.5% 137.8% 107.0%
03/21/95 96.8% 138.3% 106.8%
03/22/95 97.5% 139.5% 106.9%
03/23/95 97.5% 139.0% 107.0%
03/24/95 97.5% 139.7% 108.1%
03/27/95 94.9% 141.5% 108.5%
03/28/95 94.9% 143.1% 108.7%
03/29/95 94.9% 142.4% 108.5%
03/30/95 94.9% 142.0% 108.3%
03/31/95 97.5% 142.5% 108.0%
04/03/95 97.5% 141.6% 108.3%
04/04/95 94.9% 141.7% 109.0%
04/05/95 94.9% 140.9% 109.1%
04/06/95 97.5% 141.8% 109.2%
04/07/95 96.2% 143.0% 109.2%
04/10/95 94.9% 141.8% 109.4%
04/11/95 95.6% 141.9% 109.1%
04/12/95 97.5% 141.4% 109.4%
04/13/95 94.9% 141.4% 109.8%
04/17/95 94.9% 138.8% 109.2%
04/18/95 97.5% 137.6% 109.0%
04/19/95 96.2% 136.4% 108.9%
04/20/95 97.5% 136.3% 109.0%
04/21/95 96.2% 136.6% 109.7%
04/24/95 96.2% 137.3% 110.6%
04/25/95 95.6% 136.8% 110.5%
04/26/95 87.3% 138.5% 110.6%
04/27/95 92.4% 138.6% 110.8%
04/28/95 94.3% 138.8% 111.0%
05/01/95 96.2% 137.9% 110.9%
05/02/95 96.2% 135.7% 111.1%
05/03/95 94.9% 135.4% 112.3%
05/04/95 94.9% 136.7% 112.3%
05/05/95 94.9% 137.4% 112.2%
05/08/95 97.5% 137.7% 113.0%
05/09/95 96.2% 139.1% 112.9%
05/10/95 94.9% 138.8% 113.1%
05/11/95 96.8% 138.3% 113.1%
05/12/95 96.2% 137.7% 113.4%
05/15/95 98.7% 137.2% 113.8%
05/16/95 98.7% 138.1% 113.9%
05/17/95 97.2% 137.9% 113.7%
05/18/95 96.2% 136.2% 112.1%
05/19/95 98.7% 137.7% 112.0%
05/22/95 96.8% 137.5% 113.0%
05/23/95 96.2% 137.4% 114.0%
05/24/95 97.5% 134.8% 114.0%
05/25/95 97.5% 134.7% 114.0%
05/26/95 97.5% 135.9% 113.0%
05/30/95 100.0% 135.5% 112.9%
05/31/95 101.3% 135.5% 115.1%
06/01/95 101.3% 138.9% 115.1%
06/02/95 101.3% 139.3% 114.9%
06/05/95 106.3% 140.6% 115.5%
06/06/95 103.2% 141.4% 115.5%
06/07/95 105.1% 139.8% 115.0%
06/08/95 105.1% 139.9% 114.8%
06/09/95 102.5% 140.6% 113.9%
06/12/95 102.5% 141.5% 114.5%
06/13/95 102.5% 145.5% 115.6%
06/14/95 105.1% 143.0% 115.7%
06/15/95 105.1% 147.1% 115.9%
06/16/95 108.9% 146.3% 116.5%
06/19/95 108.9% 148.4% 117.6%
06/20/95 108.9% 152.6% 117.6%
06/21/95 109.2% 152.3% 117.3%
06/22/95 112.0% 152.8% 118.9%
06/23/95 112.7% 152.9% 118.6%
06/26/95 112.0% 151.7% 117.4%
06/27/95 108.9% 149.7% 117.0%
06/28/95 115.2% 150.0% 117.5%
06/29/95 116.5% 151.0% 117.3%
06/30/95 119.0% 152.1% 117.5%
07/03/95 119.0% 151.9% 118.0%
07/05/95 119.0% 150.3% 118.1%
07/06/95 116.5% 152.1% 119.5%
07/07/95 119.0% 154.6% 120.0%
07/10/95 115.2% 152.4% 120.2%
07/11/95 115.2% 148.1% 119.7%
07/12/95 115.2% 149.6% 121.0%
07/13/95 115.2% 149.2% 121.0%
07/14/95 117.1% 148.8% 120.8%
07/17/95 115.2% 148.4% 121.4%
07/18/95 116.5% 147.8% 120.5%
07/19/95 106.3% 139.2% 118.9%
07/20/95 101.3% 141.3% 119.4%
07/21/95 105.1% 141.5% 119.4%
07/24/95 106.3% 141.2% 120.1%
07/25/95 101.3% 142.1% 121.0%
07/26/95 106.3% 142.7% 121.2%
07/27/95 107.6% 146.8% 121.9%
07/28/95 105.1% 146.2% 121.4%
07/31/95 108.9% 145.2% 121.2%
08/01/95 110.1% 145.8% 120.7%
08/02/95 107.6% 143.7% 120.5%
08/03/95 112.7% 144.6% 120.5%
08/04/95 107.6% 144.6% 120.6%
08/07/95 112.7% 143.6% 120.8%
08/08/95 107.6% 143.4% 120.9%
08/09/95 112.7% 144.9% 120.7%
08/10/95 107.6% 142.7% 120.3%
08/11/95 107.6% 142.1% 119.8%
08/14/95 110.8% 141.8% 120.7%
08/15/95 111.4% 143.8% 120.5%
08/16/95 110.1% 145.4% 120.8%
08/17/95 110.1% 146.6% 120.6%
08/18/95 113.9% 147.2% 120.6%
08/21/95 111.4% 147.9% 120.4%
08/22/95 110.1% 147.6% 120.7%
08/23/95 110.1% 147.8% 120.2%
08/24/95 117.1% 147.2% 120.3%
08/25/95 115.8% 147.7% 120.8%
08/28/95 113.9% 146.2% 120.6%
08/29/95 113.9% 146.3% 120.8%
08/30/95 116.5% 147.7% 121.0%
08/31/95 116.5% 148.8% 121.2%
09/01/95 113.9% 151.6% 121.6%
09/05/95 115.8% 152.5% 122.8%
09/06/95 113.9% 154.6% 123.0%
09/07/95 117.7% 157.4% 123.0%
09/08/95 113.9% 157.2% 123.5%
09/11/95 117.7% 158.2% 123.8%
09/12/95 117.7% 159.5% 124.4%
09/13/95 117.7% 159.7% 124.9%
09/14/95 116.5% 161.9% 125.9%
09/15/95 117.7% 159.5% 125.8%
09/18/95 119.6% 159.5% 125.7%
09/19/95 117.7% 160.8% 126.0%
09/20/95 120.3% 158.9% 126.6%
09/21/95 120.3% 159.8% 125.8%
09/22/95 120.3% 161.1% 125.5%
09/25/95 116.5% 160.7% 125.5%
09/26/95 125.9% 159.1% 125.4%
09/27/95 126.6% 158.7% 125.3%
09/28/95 127.8% 160.4% 126.4%
09/29/95 131.6% 160.5% 126.1%
10/02/95 135.4% 158.7% 125.5%
10/03/95 124.7% 157.7% 125.6%
10/04/95 124.1% 154.8% 125.4%
10/05/95 127.8% 158.2% 125.7%
10/06/95 126.6% 158.5% 125.7%
10/09/95 121.5% 157.1% 124.8%
10/10/95 113.9% 156.1% 124.6%
10/11/95 115.8% 158.7% 125.0%
10/12/95 113.9% 160.1% 125.8%
10/13/95 113.9% 160.7% 126.1%
10/16/95 130.4% 162.0% 125.8%
10/17/95 127.8% 161.8% 126.6%
10/18/95 131.6% 161.7% 126.7%
10/19/95 135.4% 160.2% 127.4%
10/20/95 135.4% 161.3% 126.7%
10/23/95 134.2% 160.3% 126.2%
10/24/95 131.6% 159.5% 126.5%
10/25/95 131.6% 158.1% 125.7%
10/26/95 135.4% 157.3% 124.4%
10/27/95 132.3% 157.9% 125.1%
10/30/95 129.7% 158.6% 125.8%
10/31/95 126.6% 158.3% 125.4%
11/01/95 126.6% 158.4% 126.0%
11/02/95 127.2% 160.6% 127.2%
11/03/95 129.1% 159.5% 127.4%
11/06/95 129.1% 157.8% 126.9%
11/07/95 128.5% 157.9% 126.5%
11/08/95 126.6% 159.0% 127.6%
11/09/95 124.1% 156.8% 128.0%
11/10/95 125.3% 156.0% 127.9%
11/13/95 122.8% 157.3% 127.8%
11/14/95 122.8% 158.1% 127.1%
11/15/95 126.3% 159.8% 128.1%
11/16/95 126.6% 161.7% 128.9%
11/17/95 125.3% 165.8% 129.4%
11/20/95 125.3% 163.6% 128.8%
11/21/95 125.3% 162.3% 129.5%
11/22/95 126.6% 162.6% 129.1%
11/24/95 126.6% 162.3% 129.4%
11/27/95 127.8% 162.9% 129.7%
11/28/95 125.3% 166.4% 130.8%
11/29/95 127.2% 168.3% 131.1%
11/30/95 130.4% 170.3% 130.6%
12/01/95 125.3% 170.0% 130.9%
12/04/95 125.3% 172.1% 132.4%
12/05/95 126.6% 173.5% 133.2%
12/06/95 120.3% 175.5% 133.8%
12/07/95 119.3% 172.9% 132.9%
12/08/95 120.3% 173.2% 133.2%
12/11/95 117.7% 172.7% 133.6%
12/12/95 111.4% 169.8% 133.5%
12/13/95 112.0% 170.9% 134.1%
12/14/95 111.4% 172.1% 133.1%
12/15/95 107.0% 173.4% 133.0%
12/18/95 92.4% 172.3% 130.9%
12/19/95 103.8% 171.0% 132.0%
12/20/95 100.0% 167.2% 130.7%
12/21/95 103.8% 169.3% 131.7%
12/22/95 100.0% 170.7% 132.0%
12/26/95 101.3% 171.2% 132.5%
12/27/95 100.0% 174.0% 132.6%
12/28/95 94.9% 174.4% 132.5%
12/29/95 93.0% 177.9% 132.9%
01/02/96 89.9% 175.8% 133.9%
01/03/96 98.7% 175.0% 134.0%
01/04/96 105.1% 171.1% 133.2%
01/05/96 111.4% 176.3% 133.0%
01/08/96 108.9% 176.1% 133.4%
01/09/96 108.9% 175.4% 131.5%
01/10/96 105.1% 175.1% 129.1%
01/11/96 101.3% 177.7% 130.0%
01/12/96 97.5% 176.3% 129.8%
01/15/96 97.8% 170.7% 129.4%
01/16/96 101.3% 169.9% 131.3%
01/17/96 97.5% 175.2% 130.8%
01/18/96 97.5% 181.1% 131.2%
01/19/96 97.5% 178.6% 132.0%
01/22/96 97.5% 177.9% 132.3%
01/23/96 97.8% 179.3% 132.2%
01/24/96 99.4% 179.2% 133.7%
01/25/96 102.5% 180.0% 133.1%
01/26/96 98.7% 180.0% 134.1%
01/29/96 97.5% 180.1% 134.7%
01/30/96 100.0% 184.1% 135.9%
01/31/96 100.0% 183.3% 137.2%
02/01/96 100.0% 182.6% 137.7%
02/02/96 116.5% 185.6% 137.2%
02/05/96 112.7% 185.0% 138.4%
02/06/96 111.4% 186.3% 139.4%
02/07/96 112.7% 188.0% 140.2%
02/08/96 111.4% 192.3% 141.5%
02/09/96 110.1% 191.3% 141.6%
02/12/96 112.7% 193.5% 142.7%
02/13/96 111.4% 191.8% 142.5%
02/14/96 108.9% 192.2% 141.4%
02/15/96 113.9% 190.3% 140.5%
02/16/96 110.8% 190.1% 139.8%
02/20/96 108.9% 187.9% 138.2%
02/21/96 111.4% 191.0% 139.8%
02/22/96 108.9% 194.9% 142.1%
02/23/96 108.9% 191.6% 142.2%
02/26/96 116.5% 192.7% 140.3%
02/27/96 119.0% 192.3% 139.6%
02/28/96 121.5% 190.9% 139.1%
02/29/96 124.1% 188.5% 138.2%
03/01/96 126.6% 188.8% 139.0%
03/04/96 127.8% 187.2% 140.4%
03/05/96 127.8% 190.6% 141.5%
03/06/96 125.3% 192.9% 140.6%
03/07/96 122.8% 192.2% 141.0%
03/08/96 120.3% 190.8% 136.7%
03/11/96 124.1% 191.2% 138.1%
03/12/96 121.5% 191.4% 137.4%
03/13/96 121.5% 192.7% 137.8%
03/14/96 121.5% 195.7% 138.2%
03/15/96 125.3% 194.8% 138.4%
03/18/96 125.3% 195.7% 140.8%
03/19/96 121.5% 193.2% 140.6%
03/20/96 125.3% 192.0% 140.2%
03/21/96 130.4% 191.3% 140.0%
03/22/96 131.6% 189.9% 140.4%
03/25/96 129.1% 187.5% 140.2%
03/26/96 130.4% 188.5% 140.9%
03/27/96 132.9% 188.3% 140.0%
03/28/96 129.1% 190.5% 140.0%
03/29/96 130.4% 189.8% 139.2%
04/01/96 130.4% 191.3% 141.0%
04/02/96 129.1% 194.3% 141.4%
04/03/96 140.5% 194.7% 141.5%
04/04/96 141.1% 195.8% 141.5%
04/08/96 141.8% 191.5% 139.0%
04/09/96 143.0% 189.0% 138.5%
04/10/96 144.3% 189.5% 136.7%
04/11/96 146.8% 190.4% 136.2%
04/12/96 141.8% 189.6% 137.4%
04/15/96 141.8% 187.0% 138.6%
04/16/96 141.8% 188.6% 139.1%
04/17/96 143.0% 187.7% 138.4%
04/18/96 141.8% 188.4% 138.8%
04/19/96 141.8% 187.5% 139.2%
04/22/96 146.8% 191.4% 139.8%
04/23/96 140.5% 190.2% 140.6%
04/24/96 145.6% 191.4% 140.3%
04/25/96 145.6% 194.1% 140.8%
04/26/96 145.6% 197.3% 141.0%
04/29/96 145.6% 197.1% 141.1%
04/30/96 148.1% 198.4% 141.1%
05/01/96 160.8% 195.7% 141.2%
05/02/96 157.0% 192.7% 138.8%
05/03/96 157.0% 193.9% 138.4%
05/06/96 158.2% 192.4% 138.2%
05/07/96 157.0% 191.7% 137.7%
05/08/96 162.0% 189.6% 139.1%
05/09/96 158.2% 189.5% 139.2%
05/10/96 172.2% 191.3% 140.7%
05/13/96 170.9% 195.8% 142.7%
05/14/96 182.3% 196.1% 143.6%
05/15/96 172.2% 195.5% 143.5%
05/16/96 174.1% 197.1% 143.4%
05/17/96 174.7% 194.5% 144.3%
05/20/96 186.1% 194.6% 145.2%
05/21/96 188.0% 193.5% 145.1%
05/22/96 184.8% 196.6% 146.3%
05/23/96 188.0% 198.2% 145.8%
05/24/96 185.1% 197.1% 146.4%
05/28/96 177.2% 193.9% 145.0%
05/29/96 167.1% 193.1% 144.1%
05/30/96 165.8% 194.7% 144.9%
05/31/96 169.6% 194.9% 144.3%
06/03/96 165.8% 195.9% 144.0%
06/04/96 173.4% 199.4% 145.1%
06/05/96 175.9% 201.8% 146.4%
06/06/96 173.4% 201.2% 145.2%
06/07/96 169.6% 201.5% 145.2%
06/10/96 170.9% 199.9% 145.0%
06/11/96 178.5% 198.7% 144.7%
06/12/96 181.0% 198.3% 144.3%
06/13/96 178.5% 199.0% 144.1%
06/14/96 185.4% 198.9% 143.6%
06/17/96 181.6% 201.3% 143.5%
06/18/96 170.9% 201.8% 142.8%
06/19/96 162.0% 196.4% 142.8%
06/20/96 146.2% 193.5% 142.8%
06/21/96 141.8% 185.1% 143.9%
06/24/96 150.6% 186.1% 144.3%
06/25/96 144.3% 184.5% 144.2%
06/26/96 143.0% 191.2% 143.3%
06/27/96 143.0% 196.4% 144.2%
06/28/96 145.6% 192.4% 144.7%
07/01/96 155.1% 198.9% 145.8%
07/02/96 164.6% 198.3% 145.3%
07/03/96 172.2% 194.9% 145.1%
07/05/96 162.0% 191.6% 141.8%
07/08/96 153.2% 194.1% 140.8%
07/09/96 153.8% 192.1% 141.2%
07/10/96 153.2% 189.2% 141.5%
07/11/96 149.4% 189.4% 139.3%
07/12/96 146.8% 190.5% 139.4%
07/15/96 148.1% 185.5% 135.9%
07/16/96 148.7% 178.6% 135.6%
07/17/96 150.6% 184.2% 136.8%
07/18/96 150.6% 190.3% 138.8%
07/19/96 145.6% 190.3% 137.8%
07/22/96 143.0% 189.8% 136.7%
07/23/96 140.5% 188.5% 135.2%
07/24/96 141.8% 185.3% 135.2%
07/25/96 141.8% 187.0% 136.2%
07/26/96 141.8% 187.0% 137.2%
07/29/96 141.8% 186.4% 136.1%
07/30/96 141.8% 187.6% 137.0%
07/31/96 141.8% 187.6% 138.0%
08/01/96 144.3% 188.5% 140.2%
08/02/96 149.4% 189.8% 142.9%
08/05/96 146.8% 187.1% 142.4%
08/06/96 147.5% 187.8% 142.9%
08/07/96 149.4% 192.2% 143.3%
08/08/96 146.8% 189.6% 142.9%
08/09/96 144.3% 191.5% 142.8%
08/12/96 148.1% 193.1% 143.6%
08/13/96 147.5% 193.1% 142.4%
08/14/96 146.8% 195.7% 142.8%
08/15/96 146.8% 194.9% 142.9%
08/16/96 149.4% 196.2% 143.5%
08/19/96 155.7% 196.4% 143.8%
08/20/96 157.0% 193.7% 143.6%
08/21/96 167.1% 196.9% 143.5%
08/22/96 162.0% 200.1% 144.7%
08/23/96 167.1% 201.9% 143.9%
08/26/96 165.8% 204.3% 143.2%
08/27/96 161.1% 202.5% 143.7%
08/28/96 163.3% 204.1% 143.4%
08/29/96 159.5% 201.4% 141.8%
08/30/96 160.8% 201.0% 140.6%
09/03/96 159.5% 200.8% 141.2%
09/04/96 162.7% 203.6% 141.4%
09/05/96 157.0% 200.1% 140.1%
09/06/96 159.5% 205.0% 141.4%
09/09/96 168.4% 203.6% 143.2%
09/10/96 167.1% 202.3% 143.2%
09/11/96 174.7% 202.5% 143.9%
09/12/96 189.9% 204.5% 144.8%
09/13/96 202.5% 207.4% 146.8%
09/16/96 210.1% 211.0% 147.5%
09/17/96 206.3% 211.4% 147.3%
09/18/96 201.3% 209.2% 147.0%
09/19/96 201.3% 212.5% 147.3%
09/20/96 201.3% 216.5% 148.2%
09/23/96 196.2% 212.9% 148.1%
09/24/96 196.2% 216.2% 147.9%
09/25/96 191.1% 217.5% 148.0%
09/26/96 191.1% 212.9% 148.0%
09/27/96 196.2% 215.1% 148.0%
09/30/96 188.6% 214.1% 148.3%
10/01/96 189.2% 214.1% 148.7%
10/02/96 198.7% 217.8% 149.7%
10/03/96 194.9% 218.2% 149.4%
10/04/96 200.6% 219.8% 151.3%
10/07/96 203.8% 217.8% 151.7%
10/08/96 201.9% 211.9% 151.1%
10/09/96 200.0% 216.4% 150.3%
10/10/96 188.6% 222.2% 149.8%
10/11/96 192.4% 226.5% 151.1%
10/14/96 191.1% 224.8% 151.8%
10/15/96 192.4% 226.8% 151.6%
10/16/96 191.1% 219.8% 152.0%
10/17/96 189.2% 219.2% 152.5%
10/18/96 186.1% 217.9% 153.3%
10/21/96 187.3% 214.3% 153.1%
10/22/96 187.3% 207.9% 152.4%
10/23/96 183.5% 212.0% 152.6%
10/24/96 186.1% 216.7% 151.5%
10/25/96 186.1% 216.5% 151.2%
10/28/96 187.3% 215.1% 150.4%
10/29/96 188.0% 213.4% 151.3%
10/30/96 188.0% 212.1% 151.2%
10/31/96 188.0% 214.3% 152.1%
11/01/96 183.5% 215.6% 151.8%
11/04/96 172.2% 216.1% 152.5%
11/05/96 170.9% 216.7% 154.1%
11/06/96 174.7% 219.1% 156.3%
11/07/96 172.2% 218.7% 157.0%
11/08/96 172.8% 219.8% 157.7%
11/11/96 176.6% 221.4% 157.9%
11/12/96 166.8% 219.3% 157.4%
11/13/96 172.8% 217.7% 157.7%
11/14/96 165.8% 217.2% 158.7%
11/15/96 162.7% 217.2% 159.1%
11/18/96 155.1% 215.4% 159.0%
11/19/96 155.7% 211.3% 160.1%
11/20/96 156.3% 210.5% 160.5%
11/21/96 154.4% 210.1% 160.2%
11/22/96 160.8% 215.4% 161.5%
11/25/96 167.1% 214.9% 163.3%
11/26/96 164.6% 211.9% 163.1%
11/27/96 155.7% 212.5% 162.9%
11/29/96 157.0% 211.0% 163.3%
12/02/96 157.0% 211.9% 163.2%
12/03/96 162.7% 210.4% 161.4%
12/04/96 157.0% 208.4% 160.7%
12/05/96 163.9% 208.1% 160.6%
12/06/96 155.7% 204.6% 159.5%
12/09/96 160.8% 204.0% 161.7%
12/10/96 164.6% 201.8% 161.3%
12/11/96 162.0% 200.9% 159.8%
12/12/96 162.0% 202.8% 157.3%
12/13/96 161.4% 200.3% 157.2%
12/16/96 154.4% 201.2% 155.5%
12/17/96 148.7% 197.5% 156.6%
12/18/96 149.4% 197.0% 157.8%
12/19/96 153.8% 197.2% 160.9%
12/20/96 150.6% 201.8% 161.5%
12/23/96 146.8% 200.9% 161.1%
12/24/96 148.1% 202.3% 162.0%
12/26/96 148.1% 201.4% 163.0%
12/27/96 146.8% 202.7% 163.3%
12/30/96 141.8% 204.7% 162.6%
12/31/96 144.3% 205.0% 159.8%
01/02/97 142.4% 204.2% 159.0%
01/03/97 142.4% 205.4% 161.4%
01/06/97 144.3% 203.9% 161.3%
01/07/97 141.8% 204.4% 162.5%
01/08/97 138.0% 199.3% 161.4%
01/09/97 138.6% 200.4% 162.8%
01/10/97 136.1% 200.9% 163.8%
01/13/97 134.8% 202.9% 163.8%
01/14/97 141.8% 206.8% 165.9%
01/15/97 146.2% 203.7% 165.5%
01/16/97 157.0% 202.4% 166.1%
01/17/97 165.8% 199.6% 167.4%
01/20/97 172.8% 201.4% 167.5%
01/21/97 175.9% 204.8% 168.8%
01/22/97 177.2% 201.5% 169.6%
01/23/97 178.5% 195.2% 167.7%
01/24/97 175.3% 189.7% 166.2%
01/27/97 170.9% 190.4% 165.0%
01/28/97 164.6% 190.7% 165.0%
01/29/97 169.6% 188.0% 166.6%
01/30/97 167.1% 189.5% 169.2%
01/31/97 168.4% 190.8% 169.6%
02/03/97 165.8% 195.1% 169.7%
02/04/97 164.6% 198.6% 170.3%
02/05/97 162.0% 196.6% 167.9%
02/06/97 150.6% 196.1% 168.3%
02/07/97 157.0% 197.5% 170.3%
02/10/97 146.8% 189.1% 169.4%
02/11/97 147.5% 190.2% 170.3%
02/12/97 143.7% 192.4% 173.2%
02/13/97 143.0% 202.5% 175.1%
02/14/97 143.0% 202.2% 174.4%
02/18/97 141.1% 199.7% 176.1%
02/19/97 139.2% 197.3% 175.3%
02/20/97 139.2% 193.1% 173.2%
02/21/97 140.5% 190.9% 173.0%
02/24/97 139.2% 190.8% 174.8%
02/25/97 138.6% 195.6% 174.8%
NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN ANY OF THE COMPANY'S
PREVIOUS FILINGS UNDER THE SECURITIES ACT OF 1933 OR THE EXCHANGE ACT THAT MIGHT
INCORPORATE FUTURE FILINGS, INCLUDING THIS PROXY STATEMENT, IN WHOLE OR IN PART,
THE PRECEDING COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION AND THE
PRECEDING PERFORMANCE GRAPH SHALL NOT BE INCORPORATED BY REFERENCE INTO ANY SUCH
FILINGS, NOR SHALL SUCH REPORT OR GRAPH BE INCORPORATED BY REFERENCE INTO ANY
FUTURE FILINGS.
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-----------------------------------------------------
PROPOSAL NO. 2:
REINCORPORATION IN THE STATE OF DELAWARE
-----------------------------------------------------
GENERAL
The Board of Directors has unanimously approved, and for the reasons
described below, recommends that the shareholders approve, a reorganization in
which the Company's state of incorporation would be changed from California to
Delaware. This change would be accomplished by merging QuickResponse (referred
to in this proposal as "QuickResponse California") into a wholly-owned Delaware
subsidiary (referred to in this proposal as "QuickResponse Delaware") newly
formed for this purpose, with each share of QuickResponse California's
outstanding Common Stock being exchanged for one share of Common Stock of
QuickResponse Delaware. Upon completion of the merger, all of the previously
outstanding shares of Common Stock of QuickResponse California will be
automatically converted into shares of Common Stock of QuickResponse Delaware.
The proposed reorganization will be accomplished pursuant to the terms of an
Agreement and Plan of Merger between QuickResponse Delaware and QuickResponse
California, a copy of which is attached to this Proxy Statement as APPENDIX A.
At and after the effective date of the merger, each certificate that
previously represented shares of Common Stock of QuickResponse California will
be deemed for all purposes to evidence the right to receive the number of shares
of Common Stock of QuickResponse Delaware into which those shares of Common
Stock of QuickResponse California have been converted as a result of the merger.
IT WILL NOT BE NECESSARY FOR SHAREHOLDERS OF QUICKRESPONSE CALIFORNIA TO HAVE
THEIR STOCK CERTIFICATES EXCHANGED FOR STOCK CERTIFICATES REPRESENTING THE
SHARES OF QUICKRESPONSE DELAWARE. The Common Stock of QuickResponse California
is qualified for trading on the Nasdaq National Market under the symbol "QRSI,"
and after the reincorporation, QuickResponse Delaware's Common Stock will
continue to be traded on the Nasdaq National Market under the same symbol. The
reorganization will not result in any change in the name, business, management,
assets, liabilities or net worth of QuickResponse. QuickResponse Delaware will
be governed by Delaware law and a new certificate of incorporation and bylaws,
which will result in certain changes in the rights of shareholders. See
"Changes in QuickResponse's Charter to be Effected by Reincorporation" and
"Certain Differences in State Corporation Laws."
Assuming that the proposed reorganization of QuickResponse is approved,
QuickResponse's 1993 Stock Option/Stock Issuance Plan (the "1993 Plan") will be
assumed by QuickResponse Delaware. In addition, the Agreement and Plan of
Merger provides that QuickResponse Delaware will assume all options outstanding
under the 1993 Plan and such options will be exercisable for shares of
QuickResponse Delaware Common Stock on the same terms as the outstanding
options.
Shareholders should note that approval of the proposed reorganization will
constitute approval of the assumption of the 1993 Plan and the outstanding
options by QuickResponse Delaware, approval of the Certificate of Incorporation
and Bylaws of QuickResponse Delaware and approval of the assumption and
amendment of QuickResponse California's Indemnification Agreements with each of
the Company's directors.
The affirmative vote of holders of a majority of the outstanding shares
entitled to vote will be required to approve the Agreement and Plan of Merger.
If approved by the shareholders, it is anticipated that the reorganization would
be completed within 30 days of shareholder approval. However, the
reorganization may be delayed or abandoned, either before or after shareholder
approval, if circumstances arise which, in the opinion of the Board of
Directors, make it inadvisable to proceed.
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Important aspects of the reorganization and reincorporation of the Company
in Delaware are outlined below.
DISSENTERS' RIGHTS OF APPRAISAL
Under California law shareholders have the right, in some circumstances, to
dissent from certain corporate reorganizations and receive cash for their
shares. However, California law does not permit dissenters' rights in
connection with the type of reorganization presently proposed by QuickResponse
and described herein.
PRINCIPAL REASONS FOR REINCORPORATION
For many years Delaware has followed a policy of encouraging incorporation
in that state, and, in furtherance of that policy, has adopted comprehensive,
modern and flexible corporate laws which are periodically updated and revised to
meet changing business needs. As a result, many major corporations are now
incorporated in Delaware. The Delaware courts have developed considerable
expertise in dealing with corporate issues, and a substantial body of case law
has developed construing Delaware law and establishing public policies with
respect to corporate legal affairs.
In addition to these general reasons, the Board of Directors has
recommended the proposed reorganization of the Company under Delaware law
because it will permit the Company to limit the liability of its directors and
to provide indemnification to its officers, directors, and employees to a degree
greater than is presently possible under California law. The Company seeks to
retain the most capable individuals available to serve as its officers and
directors. The Board of Directors believes that the adoption of the
reincorporation, including the approval of the indemnification agreements
discussed herein, could be a significant factor in attracting such individuals
and in encouraging existing directors and officers to continue to serve in these
capacities and freeing them to make corporate decisions on the merits rather
than out of a desire to avoid personal liability. To date, the Company has not
experienced difficulty in attracting and retaining qualified directors but
concern has been expressed regarding the matter of personal liability. It
should be noted that there may be an inherent conflict of interest in the Board
of Directors' recommendation of the proposed reorganization due to the interest
of the members of the Board of Directors in obtaining the protection of such
limited liability provisions.
The principal changes effected by the Delaware reincorporation will be the
inclusion in the Company's charter of a new provision further limiting director
liability, the elimination of the shareholders' ability to call a special
meeting of shareholders, the addition of new provisions requiring a
supermajority vote of shareholders to amend or repeal certain provisions of the
Bylaws and Certificate of Incorporation and requiring a supermajority vote of
directors to increase or reduce the number of directors, and the institution of
a classified Board of Directors. See "Changes in QuickResponse's Charter to be
Effected by Reincorporation." Additionally, as reorganized, the Company would
assume and amend the existing indemnification agreements with its directors.
See "Certain Differences in State Corporation Laws."
Although not presently proposed or included in the new Certificate of
Incorporation or Bylaws, Delaware law would allow the future inclusion of
certain other provisions not permitted under California law. Such provisions,
subject to shareholder approval if later proposed by the Board of Directors,
would provide for greater continuity, stability and independence of the Board of
Directors. The Company could also adopt share purchase rights plans, sometimes
referred to as "poison pills," which typically take the form of an issuance of a
dividend to shareholders of rights to acquire shares of the Company or an
acquiring corporation at less than half their fair market value. The Company's
adoption of such a share purchase rights plan would not require shareholder
approval. In addition, certain other provisions designed to discourage non-
negotiated takeover attempts, particularly those involving unequal treatment of
the Company's shareholders, could later be adopted. The inclusion of such anti-
takeover provisions in the QuickResponse Delaware Certificate of Incorporation,
many of which may be prohibited under California law, is permitted under
Delaware law.
The proposed reorganization does not result from any pending legal action
against the officers, directors or employees of the Company which would be
covered by such indemnification provisions. Similarly, the Board of Directors
has no present knowledge of any proposed tender offer or other attempt to change
the control of the Company, and no tender offer or other type of change of
control is presently pending or has occurred in the past. Nonetheless, if
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such action were attempted in the future, the laws of Delaware would be better
suited to the defense of such action than the laws of California.
CHANGES IN QUICKRESPONSE'S CHARTER TO BE EFFECTED BY REINCORPORATION
The following discussion summarizes the material differences between
the Certificate of Incorporation and Bylaws of QuickResponse Delaware and the
Amended and Restated Articles of Incorporation and Bylaws of QuickResponse
California. A copy of the form of Certificate of Incorporation of QuickResponse
Delaware is attached hereto as APPENDIX B and a copy of the form of Bylaws of
QuickResponse Delaware is attached hereto as APPENDIX C, and all statements
herein concerning such documents are qualified by reference to the exact
provisions thereof. Approval of the reorganization by the shareholders will
result in the adoption of all such charter provisions set forth in the
QuickResponse Delaware Certificate of Incorporation and Bylaws.
LIMITATION OF LIABILITY AND INDEMNIFICATION. Although both California and
Delaware law allow for some protection of directors with respect to personal
liability, there are certain differences between these laws regarding limitation
of liability and indemnification, which will be considered below.
The California General Corporation Law permits California corporations to
include in their articles of incorporation a provision eliminating the liability
of a director to the corporation or shareholders for monetary damages except
under certain circumstances. Under the California law, personal liability of a
director for monetary damages cannot be limited or eliminated where liability
arises from: (a) intentional misconduct or a knowing and culpable violation of
law; (b) acts or omissions that a director believes to be contrary to the best
interests of the corporation or its shareholders, or that involve the absence of
good faith on the part of the director; (c) receipt of an improper personal
benefit; (d) acts or omissions that show a reckless disregard for the director's
duty to the corporation or its shareholders, where the director in the ordinary
course of performing a director's duties should be aware of a risk of serious
injury to the corporation or its shareholders; (e) acts or omissions that
constitute an unexcused pattern of inattention that amounts to an abdication of
the director's duty to the corporation and its shareholders; (f) interested
transactions between the corporation and a director in which a director has a
material financial interest and (g) improper distributions, loans or guarantees.
The Delaware General Corporation Law (the "DGCL") permits a corporation to
include a provision in its certificate of incorporation which limits or
eliminates the personal liability of a director for monetary damages arising
from breaches of his fiduciary duties to the corporation or its shareholders,
subject to certain exceptions. Such a provision is included in the
QuickResponse Delaware Certificate of Incorporation. A director would still be
liable in such cases for the following: (i) breach of the director's duty of
loyalty to the Company or its shareholders; (ii) acts or omissions not in good
faith or involving intentional misconduct or a knowing violation of the law;
(iii) willful or negligent conduct in paying dividends or repurchasing stock out
of other than lawfully available funds (a violation of Section 174 of the DGCL)
or (iv) any transaction from which the director derives an improper personal
benefit. In effect, after the reincorporation, a director of the Company could
not be held liable for damages to the Company or its shareholders for gross
negligence or lack of due care in carrying out his fiduciary duties as a
director. He could still, however, be liable in such cases if the director acted
in bad faith or in breach of the director's duty of loyalty to the Company.
The liability limitation provision in the QuickResponse Delaware
Certificate of Incorporation will not extend to acts or omissions of a director
which occurred before the date on which the Certificate of Incorporation became
effective. The provision also cannot limit a director's liability for violation
of, or otherwise relieve QuickResponse Delaware or its directors from the
necessity of complying with, federal and state securities laws, nor affect the
availability of non-monetary remedies such as injunctive relief or rescission.
California law permits indemnification of expenses incurred in derivative
or third-party actions, except that with respect to derivative actions (a) no
indemnification may be made without court approval when a person is adjudged
liable to the corporation in the performance of that person's duty to the
corporation and its shareholders, unless the court determines such person is
entitled to indemnity for expenses, and then such indemnification may be made
only to the
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extent that the court shall determine, and (b) no indemnification may be made
without court approval in respect of amounts paid or expenses incurred in
settling or otherwise disposing of a threatened or pending action or amounts
incurred in defending a pending action which is settled or otherwise disposed of
without court approval. Indemnification is permitted by California law only for
acts taken in good faith and believed to be in the best interests of the
corporation and its shareholders, as determined by a majority vote of a
disinterested quorum of the directors, independent legal counsel (if a quorum of
independent directors is not obtainable), a majority vote handling the action of
a quorum of the shareholders (excluding shares owned by the indemnified party),
or the court in which the action is or was pending.
Delaware law generally permits indemnification of expenses incurred in the
defense or settlement of a derivative or third-party action, provided there is a
determination by a majority vote of the directors who are not parties to such
action, even though less than a quorum, or, if there are no such directors or if
such directors so direct, by independent legal counsel in a written opinion, or
by the shareholders, that the person seeking indemnification acted in good faith
and in a manner reasonably believed to be in or (in contrast to California law)
not opposed to the best interests of the corporation. Without court approval,
however, no indemnification may be made in respect of any derivative action in
which such person is adjudged liable for negligence or misconduct in the
performance of his or her duty to the corporation.
California law requires indemnification if the individual has successfully
defended the action on the merits. Delaware law, in contrast, requires
indemnification in the event of a successful defense, whether on the merits or
otherwise. Delaware law also requires indemnification of expenses if the
individual being indemnified has successfully defended the action on the merits
or otherwise.
The Bylaws of QuickResponse Delaware provide for indemnification to the
fullest extent permitted by Section 145 of the DGCL and provide that expenses
incurred by an individual in his capacity as a director of QuickResponse or in
certain other capacities in defending a civil or criminal action shall be paid
by QuickResponse in advance of the final disposition of the matter upon receipt
of an undertaking from the director to repay the sum advanced if it shall
ultimately be determined that he is not entitled to be indemnified by
QuickResponse pursuant to the terms of the DGCL. The form of this new Bylaw
provision is included in APPENDIX C.
California corporations may include in their articles of incorporation a
provision which extends the scope of indemnification through agreements, bylaws
or other corporate action beyond that specifically authorized by statute. The
Amended and Restated Articles of Incorporation of QuickResponse California
include such a provision. QuickResponse California's Amended and Restated
Articles of Incorporation permit indemnification beyond that expressly mandated
by the California Corporations Code and limit director monetary liability to the
extent permitted by California law. QuickResponse California also has entered
into indemnification agreements with its directors, following approval of such
agreements by the Company's shareholders. Delaware law states that the
indemnification provided by statute shall not be deemed exclusive of any other
rights under any bylaw, agreement, vote of shareholders or disinterested
directors or otherwise. Under Delaware law, therefore, QuickResponse Delaware
is permitted to enter into indemnification agreements with directors. The
indemnification agreements entered into by QuickResponse California with its
officers and directors will be assumed by QuickResponse Delaware upon completion
of the proposed reincorporation. The indemnification agreements also provide
for contribution by the Company, with certain exceptions, to amounts paid by a
director in any situation in which the Company and such individual are jointly
liable (or would be if the Company were joined in the litigation) if for any
reason indemnification is not available. Such contribution would be based on the
relative benefits to, and relatives fault of, the Company and the individual
with respect to the transaction from which liability arose. This provision
could be applicable in the event a court found that indemnification under the
federal securities laws is against public policy and thus not enforceable, and
could also be applicable in other cases where the Company was unable to obtain
satisfactory and affordable insurance for its directors and officers. If the
proposed reincorporation is approved, the text of the indemnification agreements
will be amended to read substantially as set forth in APPENDIX D hereto. A vote
in favor of the proposed reincorporation is also approval of such amendments to
the indemnification agreements and approval for the Company to enter into
similar indemnification agreements with future directors of QuickResponse
Delaware, as well as with certain officers of QuickResponse Delaware.
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The Certificate of Incorporation of QuickResponse Delaware also provides
that if the DGCL is amended in the future to reduce further the liability of a
director for breach of his fiduciary duty to the Company or its shareholders,
such change shall also apply to the directors of the Company. While the Company
is not aware of any proposals in the Delaware legislature to limit further the
liability of directors, management of the Company and the Board of Directors
believe it is advisable in light of current conditions in the insurance markets
to make provision for such changes now rather than to await a further
shareholder vote on the changes at a later date. In addition, the Certificate
of Incorporation of QuickResponse Delaware provides that any future repeal or
modification of the terms of the Certificate of Incorporation shall not
adversely affect any right or protection of a director existing at the time of
the repeal or modification.
ELIMINATION OF SHAREHOLDER ABILITY TO CALL SPECIAL MEETINGS. California
law permits holders of 10% of the outstanding voting securities of a company to
call a special meeting of shareholders. Delaware law does not require that
shareholders be allowed to call a special meeting of shareholders. The
Certificate of Incorporation of QuickResponse Delaware provides that special
meetings of shareholders may be called only by the Board of Directors, the
Chairman of the Board or the President. Shareholders are not permitted to call
a special meeting of shareholders. The business permitted to be conducted at
any special meeting of shareholders will be limited to the business brought
before the meeting by the Board of Directors or by the person that called the
special meeting. Elimination of the right of shareholders to call a special
meeting would eliminate a shareholder's ability to force shareholder
consideration of a proposal over the opposition of the Board of Directors by
calling a special meeting of shareholders prior to such time as the Board
believed such consideration to be appropriate. For example, proposed amendments
to the Bylaws or removal of directors for cause could, if the Board of Directors
so desired, be delayed until the next Annual Meeting of shareholders.
Shareholders should recognize that elimination of the procedure for
shareholders to call special meetings may render more difficult, discourage or
delay a merger, proxy contest or the assumption of control of the Company by a
large shareholder or group of shareholders. To the extent that this provision
enables the Board of Directors to resist a takeover or change in control, it may
be more difficult to remove the existing Board of Directors and management.
This provision does not result from any present knowledge on the part of
the Board of Directors of any proposed attempt to change the control of the
Company, and no change of control is presently pending or has occurred in the
past.
CHANGE IN THE NUMBER OF DIRECTORS. The QuickResponse Delaware Certificate
of Incorporation provides that the Bylaws may be amended or rescinded at any
time by the Board of Directors. One effect of this provision is to allow the
Board of Directors to determine the authorized number of directors without a
shareholder vote. Under California law, the directors can change the number of
directors only if the shareholders have adopted a provision in the articles of
incorporation or bylaws permitting the directors to fix their number within the
bounds of a stated minimum and maximum number. The Bylaws of QuickResponse
California currently provide that the Board of Directors shall consist of from
five to nine directors, as fixed from time to time by the Board of Directors.
The Bylaws of QuickResponse Delaware provide that the number of authorized
directors shall be set by resolution of the Board of Directors; however, as
provided in the QuickResponse Delaware Certificate of Incorporation, 66-2/3% of
the entire Board of Directors may amend the Bylaws from time to time to increase
or decrease the number of directors.
CLASSIFIED BOARD OF DIRECTORS. The proposed Certificate of Incorporation
and Bylaws of QuickResponse Delaware provide for a classified Board of Directors
and permit the Board to create new directorships and to elect new directors to
serve for the full term of the class of directors in which the new directorship
was created. The terms of the directors are staggered to provide for the
election of approximately one-third of the Board members each year, with each
director serving a three-year term. The Board (or its remaining members, even
though less than a quorum) is also empowered to fill vacancies on the Board
occurring for any reason for the remainder of the term of the class of directors
in which the vacancy occurred.
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TWO-THIRDS SUPERMAJORITY TO AMEND CERTAIN PROVISIONS OF BYLAWS. The
proposed Certificate of Incorporation of QuickResponse Delaware provides in
Article 11 that (i) any amendment to the Bylaws that increases or reduces the
authorized number of directors shall require the affirmative approval of at
least 66-2/3% of the directors and (ii) any amendment to the Bylaws by the
shareholders that increases or reduces the authorized number of directors or the
percentage vote necessary to amend such provision of the Bylaws will require the
affirmative approval of holders of 66-2/3% of the outstanding shares of stock of
the Company. In contrast, the Amended and Restated Articles of Incorporation of
QuickResponse California provide that (i) a majority of the directors may fix
the number of directors at any number between the range of five and nine and
(ii) any amendment or repeal of the Bylaws may be made by a vote of the holders
of a majority of the outstanding shares of the Company.
This provision is principally intended to prevent a shareholder or
shareholders having a majority of the Common Stock from making changes in the
Bylaws to increase the number of directors. However, the Bylaws of the Company
will continue to be subject to change by a majority vote of the Board of
Directors, except for increases or decreases in the size of the Board which
require a 66-2/3% vote of the Board of Directors.
This provision may have the effect of discouraging efforts to acquire
control of the Board of Directors. Shareholders should recognize that this
proposed amendment could render more difficult or discourage a merger, tender
offer, proxy contest or the assumption of control of the Company by a large
shareholder or group of shareholders. To the extent that this provision enables
the Board of Directors to resist a takeover or change in control of the Company,
it could make it more difficult to remove the existing Board of Directors and
management.
This provision does not result from any present knowledge on the part of
the Board of Directors of any proposed tender offer or other attempt to change
the control of the Company and no tender offer or other type of change of
control is presently pending or has occurred in the past.
TWO-THIRDS SUPERMAJORITY TO AMEND CERTAIN ARTICLES OF THE CERTIFICATE OF
INCORPORATION. The proposed Certificate of Incorporation of QuickResponse
Delaware provides in Article 11 that Articles 6, 7, 10, 11 and 12 of
QuickResponse Delaware's Certificate of Incorporation may be amended or repealed
only by a vote of holders of at least 66-2/3% of the outstanding voting shares
of the Company. Articles 6, 7, 10, 11 and 12 are the provisions of QuickResponse
Delaware's Certificate of Incorporation regarding the amendment of the Company's
Bylaws to increase or reduce the number of directors, the removal of directors,
the elimination of shareholder action by written consent, the amendment of
QuickResponse Delaware's Certificate of Incorporation and the limitation of
liability of directors, respectively. These provisions are discussed above.
QuickResponse California's Amended and Restated Articles of Incorporation
generally may be amended by a vote of shareholders holding a majority of the
shares.
Article 11 of the Certificate of Incorporation of QuickResponse Delaware is
intended to prevent the holder or holders of a majority of the voting shares of
the Company from circumventing the proposed provisions of the Certificate of
Incorporation described above by amending the Certificate of Incorporation to
delete or modify them. Delaware law provides generally that the Certificate of
Incorporation may be amended by a vote of shareholders holding a majority of the
shares. However, where the Certificate of Incorporation requires a
supermajority vote with respect to a particular matter, under Delaware law the
same supermajority vote is required to amend such supermajority requirement of
the Certificate of Incorporation. Therefore, to amend or repeal the provision in
the Certificate of Incorporation, which requires the affirmative approval of
holders of 66-2/3% of the outstanding Common Stock of the Company, the same 66-
2/3% vote would be necessary. Without the inclusion of this provision in the
QuickResponse Delaware Certificate of Incorporation, the articles requiring a
supermajority vote could be repealed or amended by a vote of shareholders
holding a majority of shares.
Article 11 of the Certificate of Incorporation of QuickResponse Delaware
may have the effect of discouraging efforts to acquire control of the Board of
Directors. Shareholders should recognize that these supermajority provisions
could render more difficult or discourage a merger, tender offer, proxy contest
or the assumption of control of the Company by a large shareholder or group of
shareholders. To the extent that this provision enables the Board of Directors
to resist a takeover or change in control of the Company, it could make it more
difficult to remove the existing Board of Directors and management.
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This provision does not result from any present knowledge on the part of
the Board of Directors of any proposed tender offer or other attempt to change
the control of the Company and no tender offer or other type of change of
control is presently pending or has occurred in the past.
AUTHORIZED STOCK. The Amended and Restated Articles of Incorporation of
QuickResponse California authorize 30,000,000 shares of capital stock, no par
value, which consists of 20,000,000 shares of Common Stock, no par value, and
10,000,000 shares of Preferred Stock, $.01 par value. The Certificate of
Incorporation of QuickResponse Delaware will provide for the same number of
shares of Common and Preferred Stock, each with a par value of $0.001. The
Amended and Restated Articles of Incorporation of QuickResponse California and
the Certificate of Incorporation of QuickResponse Delaware each authorize the
Board of Directors to fix the rights, preferences, privileges and restrictions
of one or more series of the authorized shares of Preferred Stock, including
dividend rights, conversion rights, voting rights, terms of redemption and
liquidation preferences without further vote or action by the shareholders.
Although the Board has no present intention of doing so, issuance of the
authorized Preferred Stock with terms giving it substantial voting power,
conversion or other rights could have the effect of (i) delaying, deferring or
preventing a change in control of the Company or (ii) otherwise modifying the
rights of holders of the Company's Common Stock under either California or
Delaware law.
CERTAIN DIFFERENCES IN STATE CORPORATION LAWS
In addition to the matters discussed above, Delaware law differs in many
respects from California law. Certain differences which could materially affect
the rights of shareholders are discussed below.
CLASSIFIED BOARD OF DIRECTORS. A classified board means that a certain
number, but not all, of the directors are elected on a rotating basis each year.
Under California law, directors generally are elected annually. Delaware law
permits, but does not require, a classified board of directors, with staggered
terms under which one-half or one-third of the directors are elected for terms
of two or three years, respectively. This method of electing directors makes a
change in the composition of the board of directors, and a potential change in
control of a corporation, a lengthier and more difficult process. The
Certificate of Incorporation and Bylaws of QuickResponse Delaware provide for a
classified Board of Directors.
REMOVAL OF DIRECTORS. Under California law, any director or the entire
board of directors may be removed, with or without cause, with the approval of a
majority of the outstanding shares entitled to vote; however, no individual
director may be removed (unless the entire board is removed) if the number of
votes cast against such removal would be sufficient to elect the director under
cumulative voting. Under Delaware law, a director of a corporation with a
classified Board of Directors may be removed only for cause, unless the
certificate of incorporation otherwise provides. The term "cause" with respect
to the removal of directors is not defined in the DGCL and its meaning has not
been precisely delineated by the Delaware courts. The Certificate of
Incorporation and Bylaws of QuickResponse Delaware provide for a classified
Board of Directors.
CERTAIN BUSINESS COMBINATIONS. In the past several years, a number of
states (but not including California) have adopted special laws designed to make
certain kinds of "unfriendly" corporate takeovers, or other transactions
involving a corporation and one or more of its significant shareholders, more
difficult. Under Section 203 of the DGCL ("Section 203"), certain "business
combinations" with "interested stockholders" of Delaware corporations are
subject to a three-year moratorium unless specified conditions are met.
Section 203 prohibits certain mergers, consolidations, sales of assets and
other transactions ("business combinations") with an "interested stockholder"
(generally a 15% stockholder) for three years following the date the stockholder
became an interested stockholder. The prohibition on business combinations is
subject to certain exceptions, the most significant of which are that the
prohibition does not apply if: (i) the business combination or transaction in
which the stockholder becomes an interested stockholder is approved by the Board
of Directors prior to the stockholder becoming an interested stockholder; (ii)
the business combination is with an interested stockholder who became an
interested stockholder in a transaction whereby he acquired 85% of the
corporation's voting stock; (iii) the
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business combination is approved by the Board of Directors and authorized by the
affirmative vote of at least 66-2/3% of the outstanding voting stock which is
not owned by the interested stockholder; or (iv) an exemption is available.
Section 203 is currently under challenge in lawsuits arising out of ongoing
takeover disputes, and it is not yet clear whether and to what extent its
constitutionality will be upheld by the courts. The United States District
Court for the District of Delaware has consistently upheld the constitutionality
of Section 203 but the Delaware Supreme Court has not yet considered the issue.
So long as the constitutionality of Section 203 is upheld, the Company believes
that it will have the effect of encouraging any potential acquiror to negotiate
with the Company's Board of Directors. Section 203 should also discourage
certain potential acquirors unwilling to comply with its provisions.
Section 203 only applies to Delaware corporations which have a class of
voting stock that is listed on a national securities exchange, authorized for
quotation on an inter-dealer quotation system of a registered national
securities association (as is QuickResponse California and as QuickResponse
Delaware will be), or are held of record by more than 2,000 shareholders.
However, a Delaware corporation may, through its certificate of incorporation or
bylaws, elect not to be governed by the statute. The QuickResponse Delaware
Certificate of Incorporation and Bylaws do not contain such an election;
consequently, the statute will apply to business combinations involving
QuickResponse Delaware.
ADDITIONAL TAKEOVER PROTECTION. Delaware law also allows the inclusion in
a certificate of incorporation of certain provisions which may protect non-
controlling shareholders against unfavorable mergers or other business
combinations. Some companies have adopted provisions requiring that unless
certain minimum price criteria and procedural requirements are satisfied,
business combinations must be approved by a supermajority of the holders of the
corporation's outstanding voting stock. Such provisions are not being proposed
by the Company at this time. Under California law, similar provisions could be
inserted in QuickResponse California's Amended and Restated Articles, but the
vote required to approve any merger or business combination could not exceed 66-
2/3%.
In addition, there is a substantial body of case law in Delaware addressing
a corporation's right to adopt share purchase rights plans, sometimes referred
to as "poison pills." Such plans typically take the form of an issuance of a
dividend to shareholders of rights to acquire shares of the Company or, under
certain circumstances, an acquiring corporation at less than half their fair
market value. Adoption of a share purchase rights plan by QuickResponse
Delaware, which would not require shareholder approval, could have the effect of
delaying, deferring or preventing a change in control of the Company. There is
no similar body of law in California, and the validity of such plans is,
therefore, questionable. If the reincorporation is approved, the Board of
Directors intends to consider the adoption of such a plan.
SHAREHOLDER VOTING AND APPRAISAL RIGHTS. With certain exceptions,
California law requires that a merger, sale of assets or similar transaction be
approved by a majority vote of each class of shares outstanding. Delaware law
does not require such class voting, except in the case of transactions involving
an amendment to the certificate of incorporation that adversely affects a
specific class in a manner different than other classes. Should the Company
authorize and issue shares of a new class of capital stock, the holders thereof
would vote with the holders of the Common Stock on proposals not adversely
affecting the Common Stock. In such event the holders of Common Stock, if in
the minority, would be unable to control the outcome of a vote, and, if in the
majority, would be able to control the outcome of such a vote. California law
also provides that, except in certain circumstances, when a tender offer or a
proposal for a reorganization or for a sale of assets is made by an interested
party (generally a controlling or managing party of the target corporation), an
affirmative opinion in writing as to the fairness of the consideration to be
paid to the shareholders must be delivered to the shareholders. This fairness
opinion requirement does not apply to a corporation which does not have shares
held of record by at least 100 persons, or to a transaction which has been
qualified under California state securities laws. Furthermore, if a tender of
shares or vote is sought pursuant to an interested party's proposal and a later
proposal is made by another party at least 10 days prior to the date of
acceptance of the interested party's proposal, the shareholders must be informed
of the later offer and be afforded a reasonable opportunity to withdraw any
vote, consent or proxy, or to withdraw any tendered shares. Delaware law has no
comparable provision and the shareholders of QuickResponse Delaware might,
therefore, be deprived of an opportunity to consider such other proposals.
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Delaware law does not require dissenters' rights of appraisal with respect
to (a) a sale of assets in a reorganization, (b) a merger by a corporation, the
shares of which are either listed on a national securities exchange or widely
held (by more than 2,000 shareholders) if such shareholders receive shares of
the surviving corporation or of a listed or widely held corporation or (c)
shareholders of a corporation surviving a merger if no vote of such shareholders
is required to approve the merger. Under Delaware law no vote of the
shareholders of a corporation surviving a merger is required if the number of
shares to be issued in the merger does not exceed 20% of the shares of the
surviving corporation outstanding immediately prior to such issuance and if
certain other conditions are met. California law does, in general, afford
dissenters' rights in a sale of assets reorganization, and its exclusions from
dissenters' rights in mergers are somewhat different from those in Delaware.
Dissenters' rights are not available under California or Delaware law to
shareholders of a Company with respect to the proposed reincorporation.
INSPECTION OF SHAREHOLDERS LIST. Both California law and Delaware law
allow any shareholder to inspect the shareholders list for a purpose reasonably
related to such person's interest as a shareholder. California law provides, in
addition, for an absolute right to inspect and copy a corporation's shareholders
list by persons holding five percent or more of the corporation's voting shares,
or any shareholders holding one percent or more of the corporation's voting
shares who have filed a Schedule 14B with the Securities and Exchange Commission
relating to the election of directors. Delaware law does not provide for any
such absolute right of inspection. Lack of access to shareholder records could
result in impairment of the shareholder's ability to coordinate opposition to
management proposals, including proposals with respect to a change in control of
the Company.
DIVIDENDS AND REPURCHASE OF SHARES. Delaware law permits a corporation,
unless otherwise restricted by its certificate of incorporation, to declare and
pay dividends out of surplus or, if there is no surplus, out of net profits for
the fiscal year in which the dividend is declared and/or for the preceding
fiscal year, as long as the amount of capital of the corporation is not less
than the aggregate amount of the capital represented by the issued and
outstanding stock of all classes having a preference upon the distribution of
assets. In addition, Delaware law generally provides that a corporation may
redeem or repurchase its shares provided such redemption or repurchase would not
impair the capital of the corporation. The ability of a Delaware corporation to
pay dividends on, or to make repurchases or redemptions of, its shares is
dependent on the financial status of the corporation standing alone, not
consolidated with subsidiary or parent corporations. In determining the amount
of surplus of a Delaware corporation, the assets of the corporation, including
stock of subsidiaries owned by the corporation, must be valued at their fair
market value as determined by the Board of Directors, regardless of their
historical book value.
Under California law, any distributions to shareholders (including
dividends and repurchases of shares) are limited either to retained earnings or
to an amount that would leave the corporation with assets (exclusive of
goodwill, capitalized research and development expenses and deferred charges) in
an amount equal to at least 125% of its liabilities (exclusive of deferred
taxes, deferred income and other deferred credits) and with current assets in an
amount at least equal to its current liabilities (or 125% of its current
liabilities if the average pre-tax and pre-interest earnings for the preceding
two fiscal years were less than the average interest expenses for such years).
Such limitations are applied to California corporations on a consolidated basis.
Under California law, there are certain exceptions to the foregoing limitations
for repurchases of shares in connection with certain rescission actions or
pursuant to certain employee stock plans.
LOANS TO OFFICERS AND EMPLOYEES. Under California law, any loan or
guaranty to or for the benefit of a director or officer of the corporation or
its parent requires approval of the shareholders unless such loan or guaranty is
provided under a plan approved by shareholders owning a majority of the
outstanding shares of the corporation. In addition, under California law,
shareholders of any corporation with 100 or more shareholders of record may
approve a bylaw authorizing the board of directors alone to approve loans or
guaranties to or on behalf of officers (whether or not such officers are
directors) if the board determines that any such loan or guaranty may reasonably
be expected to benefit the corporation. The Bylaws of QuickResponse California
authorize such loans or guaranties. Under Delaware law, a corporation may make
loans to, guarantee the obligations of or otherwise assist its officers or other
employees and those of its subsidiaries (including directors who are also
officers or employees) when such action, in the judgment of the directors, may
reasonably be expected to benefit the corporation.
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DISSOLUTION. Under California law, shareholders holding 50% or more of the
total voting power may authorize a corporation's dissolution, with or without
the approval of the corporation's board of directors, and this right may not be
modified by the articles of incorporation. Under Delaware law, unless the board
of directors approves the proposal to dissolve, the dissolution must be approved
by shareholders holding 100% of the total voting power of the corporation. Only
if the dissolution is initiated by the board of directors may it be approved by
a simple majority of the corporation's shareholders. In the event of such
board-initiated dissolution, Delaware law allows a Delaware corporation to
include in its certificate of incorporation a supermajority voting requirement
in connection with dissolutions. QuickResponse Delaware's Certificate of
Incorporation contains no such supermajority voting requirement, however, and a
majority of shares voting at a meeting in which a quorum is present would be
sufficient to approve a dissolution of QuickResponse Delaware which had
previously been approved by its Board of Directors.
APPLICATION OF CALIFORNIA LAW AFTER REINCORPORATION
If the proposed reorganization is effected, it is possible that
QuickResponse Delaware will be subject to certain provisions of California's
corporation laws in the present or future. Since Delaware and California law
conflict in certain areas, it is uncertain which law would prevail. Section
2115 of the California Corporations Code provides that if the average of certain
property, payroll and sales factors results in a finding that more than 50% of
QuickResponse Delaware's business is conducted in California for a particular
fiscal year and more than 50% of QuickResponse Delaware's outstanding voting
securities are held of record by persons having addresses in California,
QuickResponse Delaware will become subject to certain provisions of California
law regardless of its state of incorporation. QuickResponse Delaware would
continue to be subject to such provisions until the end of any fiscal year in
which more than 50% of its business is conducted outside of California or 50% of
its outstanding voting securities are held by persons having addresses outside
of California. Foreign corporations which have securities listed on the New
York or American Stock Exchange, and foreign corporations which have a class of
securities trading as a Nasdaq National Market security with at least 800 equity
holders as of the date of its most recent Annual Meeting of shareholders, are
exempt from Section 2115. QuickResponse California as of April 4, 1997, had
and, upon the reincorporation, QuickResponse Delaware will have, less than 800
equity holders, and may therefore be subject to Section 2115 of the California
Corporations Code.
If QuickResponse Delaware is subject to the provisions of California law
referred to above, and such provisions are enforced by the courts in a
particular case, many of the Delaware laws described under "Changes in
QuickResponse's Charter to be Effected by Reincorporation" and "Certain
Differences in State Corporation Laws" would not apply to QuickResponse
Delaware. The California provisions relating to the election and removal of
directors, classified boards of directors, standard of liability for directors,
indemnification of directors, dividends and repurchases of shares, shareholder
meetings, approval of certain corporate transactions, appraisal rights and
inspection of corporate records would apply.
Although QuickResponse Delaware currently may be subject to the provisions
of Section 2115, the Board of Directors believes that the Company in the near
future will likely become exempt from Section 2115 and therefore that
reincorporation at this time is appropriate.
FEDERAL INCOME TAX CONSEQUENCES
The reorganization provided for in the Agreement and Plan of Merger is
intended to be tax free under the Internal Revenue Code of 1986, as amended.
Accordingly, no gain or loss will be recognized to the holders of QuickResponse
California shares as a result of the consummation of the reorganization, and no
gain or loss will be recognized by QuickResponse California or QuickResponse
Delaware. Each former holder of QuickResponse California shares will have the
same basis in the QuickResponse Delaware stock received by such holder pursuant
to the reorganization as the holder had in the QuickResponse California shares
held by such holder at the time of the consummation of the reorganization, and
his holding period with respect to such QuickResponse Delaware stock will
include the period during which the holder held the corresponding QuickResponse
California shares, provided the latter were held by the holder as capital assets
at the time of the consummation of the reorganization.
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VOTE REQUIRED
The affirmative vote of a majority of the outstanding shares of Common
Stock on the Record Date entitled to vote is required to approve the proposed
reincorporation in Delaware.
RECOMMENDATION OF BOARD OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS THAT THE COMPANY REINCORPORATE IN THE
STATE OF DELAWARE BECAUSE OF THAT STATE'S COMPREHENSIVE, MODERN AND FLEXIBLE
CORPORATE LAWS AND BECAUSE THE REINCORPORATION WILL ASSIST THE COMPANY IN
RETAINING AND ATTRACTING THE MOST QUALIFIED PERSONS AS OFFICERS AND DIRECTORS.
ACCORDINGLY, THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE
REINCORPORATION.
------------------------------------------------------------
PROPOSAL NO. 3:
RATIFICATION OF INDEPENDENT AUDITORS
------------------------------------------------------------
The Company is asking the shareholders to ratify the selection of Deloitte
& Touche LLP as the Company's independent auditors for the fiscal year ending
December 31, 1997. The affirmative vote of the holders of a majority of the
shares represented and voting at the Annual Meeting will be required to ratify
the selection of Deloitte & Touche LLP.
In the event the shareholders fail to ratify the appointment, the Audit
Committee of the Board of Directors will consider it as a direction to select
other auditors for the subsequent year. Even if the selection is ratified, the
Board in its discretion may direct the appointment of a different independent
accounting firm at any time during the year if the Board determines that such a
change would be in the best interest of the Company and its shareholders.
Deloitte & Touche LLP has audited the Company's financial statements
annually since 1988. Its representatives are expected to be present at the
Annual Meeting, will have the opportunity to make a statement if they desire to
do so, and will be available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE PROPOSAL
TO RATIFY THE SELECTION OF DELOITTE & TOUCHE LLP AS THE COMPANY'S INDEPENDENT
AUDITORS FOR THE FISCAL YEAR ENDING DECEMBER 31, 1997.
OTHER BUSINESS
The Board of Directors knows of no other business that will be presented
for consideration at the Annual Meeting. If other matters are properly brought
before the Annual Meeting, however, it is the intention of the persons named in
the accompanying proxy to vote the shares represented thereby on such matters in
accordance with their best judgment.
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SHAREHOLDER PROPOSALS
Proposals of shareholders that are intended to be presented at the
Company's Annual Meeting of shareholders to be held in 1998 must be received by
January 22, 1998, in order to be included in the proxy statement and proxy
relating to that meeting.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Shawn M. O'Connor
SHAWN M. O'CONNOR
VICE PRESIDENT, CHIEF FINANCIAL OFFICER AND
SECRETARY
April 30, 1997
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APPENDIX A
AGREEMENT AND PLAN OF MERGER
OF QUICKRESPONSE DELAWARE, INC.
A DELAWARE CORPORATION
AND
QUICKRESPONSE SERVICES, INC.
A CALIFORNIA CORPORATION
THIS AGREEMENT AND PLAN OF MERGER dated as of __________, 1997 (the
"Agreement") is between QuickResponse Delaware, Inc., a Delaware corporation
("QuickResponse Delaware") and QuickResponse Services, Inc., a California
corporation ("QuickResponse California"). QuickResponse Delaware and
QuickResponse California are sometimes referred to herein as the "Constituent
Corporations."
RECITALS
A. QuickResponse Delaware is a corporation duly organized and
existing under the laws of the State of Delaware and has an authorized capital
of 30,000,000 shares, 20,000,000 of which are designated "Common Stock", $0.001
par value, and 10,000,000 of which are designated "Preferred Stock", $0.001 par
value. As of _________, 1997, 1,000 shares of Common Stock were issued and
outstanding, all of which were held by QuickResponse California. No shares of
Preferred Stock were outstanding.
B. QuickResponse California is a corporation duly organized and
existing under the laws of the State of California and has an authorized capital
of 30,000,000 shares, 20,000,000 of which are designated "Common Stock", no par
value, and 10,000,000 of which are designated "Preferred Stock", $.01 par value.
As of __________, 1997, ____________ shares of Common Stock and no shares of
Preferred Stock were outstanding.
C. The Board of Directors of QuickResponse California has determined
that, for the purpose of effecting the reincorporation of QuickResponse
California in the State of Delaware, it is advisable and in the best interests
of QuickResponse California that QuickResponse California merge with and into
QuickResponse Delaware upon the terms and conditions herein provided.
D. The respective Boards of Directors of QuickResponse Delaware and
QuickResponse California have approved this Agreement and have directed that
this Agreement be submitted to a vote of their respective stockholders and
executed by the undersigned officers.
NOW, THEREFORE, in consideration of the mutual agreements and
covenants set forth herein, QuickResponse Delaware and QuickResponse California
hereby agree, subject to the terms and conditions hereinafter set forth, as
follows:
I. MERGER
1.1 MERGER. In accordance with the provisions of this Agreement, the
Delaware General Corporation Law and the California General Corporation Law,
QuickResponse California shall be merged with and into QuickResponse Delaware
(the "Merger"), the separate existence of QuickResponse California shall cease
and QuickResponse Delaware shall be, and is herein sometimes referred to as, the
"Surviving Corporation," and the name of the Surviving Corporation shall be
QuickResponse Services, Inc.
1.2 FILING AND EFFECTIVENESS. The Merger shall become effective when
the following actions shall have been completed:
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(a) This Agreement and the Merger shall have been adopted and
approved by the stockholders of each Constituent Corporation in accordance with
the requirements of the Delaware General Corporation Law and the California
General Corporation Law;
(b) All of the conditions precedent to the consummation of the Merger
specified in this Agreement shall have been satisfied or duly waived by the
party entitled to satisfaction thereof;
(c) An executed Certificate of Merger or an executed counterpart of
this Agreement meeting the requirements of the Delaware General Corporation Law
shall have been filed with the Secretary of State of the State of Delaware; and
(d) An executed Certificate of Merger or an executed counterpart of
this Agreement meeting the requirements of the California General Corporation
Law shall have been filed with the Secretary of State of the State of
California.
The date and time when the Merger shall become effective, as
aforesaid, is herein called the "Effective Date of the Merger."
1.3 EFFECT OF THE MERGER. Upon the Effective Date of the Merger, the
separate existence of QuickResponse California shall cease and QuickResponse
Delaware, as the Surviving Corporation, (i) shall continue to possess all of its
assets, rights, powers and property as constituted immediately prior to the
Effective Date of the Merger (ii) shall be subject to all actions previously
taken by its and QuickResponse California's Board of Directors, (iii) shall
succeed, without other transfer, to all of the assets, rights, powers and
property of QuickResponse California in the manner more fully set forth in
Section 259 of the Delaware General Corporation Law, (iv) shall continue to be
subject to all of its debts, liabilities and obligations as constituted
immediately prior to the Effective Date of the Merger and (v) shall succeed,
without other transfer, to all of the debts, liabilities and obligations of
QuickResponse California in the same manner as if QuickResponse Delaware had
itself incurred them, all as more fully provided under the applicable provisions
of the Delaware General Corporation Law and the California General Corporation
Law.
II. CHARTER DOCUMENTS, DIRECTORS AND OFFICERS
2.1 CERTIFICATE OF INCORPORATION. The Certificate of Incorporation
of QuickResponse Delaware as in effect immediately prior to the Effective Date
of the Merger shall continue in full force and effect as the Certificate of
Incorporation of the Surviving Corporation until duly amended in accordance with
the provisions thereof and applicable law.
2.2 BYLAWS. The Bylaws of QuickResponse Delaware as in effect
immediately prior to the Effective Date of the Merger shall continue in full
force and effect as the Bylaws of the Surviving Corporation until duly amended
in accordance with the provisions thereof and applicable law.
2.3 DIRECTORS AND OFFICERS. The directors and officers of
QuickResponse California immediately prior to the Effective Date of the Merger
shall be the directors and officers of the Surviving Corporation until their
successors shall have been duly elected and qualified or until as otherwise
provided by law, the Certificate of Incorporation of the Surviving Corporation
or the Bylaws of the Surviving Corporation.
III. MANNER OF CONVERSION OF STOCK
3.1 QUICKRESPONSE CALIFORNIA COMMON SHARES. Upon the Effective Date
of the Merger, each share of QuickResponse California Common Stock, no par
value, issued and outstanding immediately prior thereto shall by virtue of the
Merger and without any action by the Constituent Corporations, the holder of
such shares or any other person, be converted into and exchanged for one fully
paid and nonassessable share of Common Stock, $.001 par value, of the Surviving
Corporation.
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3.2 QUICKRESPONSE CALIFORNIA OPTIONS, STOCK PURCHASE RIGHTS AND
CONVERTIBLE SECURITIES. Upon the Effective Date of the Merger, the Surviving
Corporation shall assume and continue the stock option plans and all other
employee benefit plans of QuickResponse California. Each outstanding and
unexercised option, or other right to purchase, or security convertible into,
QuickResponse California Common Stock shall become an option, or right to
purchase, or a security convertible into the Surviving Corporation's Common
Stock on the basis of one share of the Surviving Corporation's Common Stock for
each share of QuickResponse California Common Stock issuable pursuant to any
such option, or stock purchase right or convertible security, on the same terms
and conditions and at an exercise or conversion price per share equal to the
exercise or conversion price per share applicable to any such QuickResponse
California option, stock purchase right or other convertible security at the
Effective Date of the Merger. There are no options, purchase rights for or
securities convertible into Preferred Stock of QuickResponse California.
A number of shares of the Surviving Corporation's Common Stock shall
be reserved for issuance upon the exercise of options, stock purchase rights and
convertible securities equal to the number of shares of QuickResponse California
Common Stock so reserved immediately prior to the Effective Date of the Merger.
3.3 QUICKRESPONSE DELAWARE COMMON STOCK. Upon the Effective Date of
the Merger, each share of QuickResponse Delaware Common Stock, $.001 par value,
issued and outstanding immediately prior thereto shall, by virtue of the Merger
and without any action by QuickResponse Delaware, the holder of such shares or
any other person, be cancelled and returned to the status of authorized but
unissued shares.
3.4 EXCHANGE OF CERTIFICATES. After the Effective Date of the Merger,
each holder of an outstanding certificate representing shares of QuickResponse
California Common Stock may, at such stockholder's option, surrender the same
for cancellation to Chase Mellon Shareholder Services, as exchange agent (the
"Exchange Agent"), and each such holder shall be entitled to receive in exchange
therefor a certificate or certificates representing the number of shares of the
Surviving Corporation's Common Stock into which the surrendered shares were
converted as herein provided. Until so surrendered, each outstanding
certificate theretofore representing shares of QuickResponse California Common
Stock shall be deemed for all purposes to represent the number of whole shares
of the Surviving Corporation's Common Stock into which such shares of
QuickResponse California Common Stock were converted in the Merger.
The registered owner on the books and records of the Surviving
Corporation or the Exchange Agent of any such outstanding certificate shall,
until such certificate shall have been surrendered for transfer or conversion or
otherwise accounted for to the Surviving Corporation or the Exchange Agent, have
and be entitled to exercise any voting and other rights with respect to and to
receive dividends and other distributions upon the shares of Common Stock of the
Surviving Corporation represented by such outstanding certificate as provided
above.
Each certificate representing Common Stock of the Surviving
Corporation so issued in the Merger shall bear the same legends, if any, with
respect to the restrictions on transferability as the certificates of
QuickResponse California so converted and given in exchange therefore, unless
otherwise determined by the Board of Directors of the Surviving Corporation in
compliance with applicable laws.
If any certificate for shares of QuickResponse Delaware stock is to be
issued in a name other than that in which the certificate surrendered in
exchange therefor is registered, it shall be a condition of issuance thereof
that the certificate so surrendered shall be properly endorsed and otherwise in
proper form for transfer, that such transfer otherwise be proper and that the
person requesting such transfer pay to the Exchange Agent any transfer or other
taxes payable by reason of issuance of such new certificate in a name other than
that of the registered holder of the certificate surrendered or establish to the
satisfaction of QuickResponse Delaware that such tax has been paid or is not
payable.
IV. GENERAL
4.1 COVENANTS OF QUICKRESPONSE DELAWARE. QuickResponse Delaware
covenants and agrees that it will, on or before the Effective Date of the
Merger:
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(a) Qualify to do business as a foreign corporation in the State of
California and in connection therewith irrevocably appoint an agent for service
of process as required under the provisions of Section 2105 of the California
General Corporation Law.
(b) File any and all documents with the California Franchise Tax
Board necessary for the assumption by QuickResponse Delaware of all of the
franchise tax liabilities of QuickResponse California.
(c) Take such other actions as may be required by the California
General Corporation Law.
4.2 FURTHER ASSURANCES. From time to time, as and when required by
QuickResponse Delaware or by its successors or assigns, there shall be executed
and delivered on behalf of QuickResponse California such deeds and other
instruments, and there shall be taken or caused to be taken by it such further
and other actions as shall be appropriate or necessary in order to vest or
perfect in or conform of record or otherwise by QuickResponse Delaware the title
to and possession of all the property, interests, assets, rights, privileges,
immunities, powers, franchises and authority of QuickResponse California and
otherwise to carry out the purposes of this Agreement, and the officers and
directors of QuickResponse Delaware are fully authorized in the name and on
behalf of QuickResponse California or otherwise to take any and all such action
and to execute and deliver any and all such deeds and other instruments.
4.3 ABANDONMENT. At any time before the Effective Date of the
Merger, this Agreement may be terminated and the Merger may be abandoned for any
reason whatsoever by the Board of Directors of either QuickResponse California
or of QuickResponse Delaware, or of both, notwithstanding the approval of this
Agreement by the shareholders of QuickResponse California or by the sole
stockholder of QuickResponse Delaware, or by both.
4.4 AMENDMENT. The Boards of Directors of the Constituent
Corporations may amend this Agreement at any time prior to the filing of this
Agreement or certificate in lieu thereof with the Secretary of State of the
State of Delaware, provided that an amendment made subsequent to the adoption of
this Agreement by the stockholders of either Constituent Corporation shall not:
(1) alter or change the amount or kind of shares, securities, cash, property
and/or rights to be received in exchange for or on conversion of all or any of
the shares of any class or series thereof of such Constituent Corporation, (2)
alter or change any term of the Certificate of Incorporation of the Surviving
Corporation to be effected by the Merger or (3) alter or change any of the terms
and conditions of this Agreement if such alteration or change would adversely
affect the holders of any class or series of capital stock of either Constituent
Corporation.
4.5 REGISTERED OFFICE. The registered office of the Surviving
Corporation in the State of Delaware is located at 32 Lockerman Square, Suite L-
100, City of Dover, County of Kent, Delaware 19901, and The Prentice-Hall
Corporation System, Inc., is the registered agent of the Surviving Corporation
at such address.
4.6 AGREEMENT. Executed copies of this Agreement will be on file at
the principal place of business of the Surviving Corporation at 1400 Marina Way
South, Richmond, California 94804 and copies thereof will be furnished to any
stockholder of either Constituent Corporation, upon request and without cost.
4.7 GOVERNING LAW. This Agreement shall in all respects be
construed, interpreted and enforced in accordance with and governed by the laws
of the State of Delaware and, so far as applicable, the merger provisions of the
California General Corporation Law.
4.8 COUNTERPARTS. In order to facilitate the filing and recording of
this Agreement, the same may be executed in any number of counterparts, each of
which shall be deemed to be an original and all of which together shall
constitute one and the same instrument.
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IN WITNESS WHEREOF, this Agreement having first been approved by the
resolutions of the Board of Directors of QuickResponse Delaware and
QuickResponse California, is hereby executed on behalf of each of such two
corporations and attested by their respective officers thereunto duly
authorized.
QUICKRESPONSE DELAWARE, INC.,
a Delaware corporation
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
ATTEST:
- ----------------------------
Shawn M. O'Connor, Secretary
QUICKRESPONSE SERVICES, INC.
a California corporation
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
ATTEST:
- ----------------------------
Shawn M. O'Connor, Secretary
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CERTIFICATE OF SECRETARY
QUICKRESPONSE DELAWARE, INC., A DELAWARE CORPORATION
The undersigned, Shawn M. O'Connor, Secretary of QuickResponse
Delaware, Inc., a corporation organized and existing under the laws of the State
of Delaware, hereby certifies, as such Secretary, that the Agreement and Plan of
Merger to which this Certificate is attached, after having been first duly
signed on behalf of the said corporation and having been signed on behalf of
QuickResponse Services, Inc., a corporation of the State of California, was duly
adopted by the sole stockholder of the corporation, which Agreement and Plan of
Merger was thereby adopted as the act of the stockholders of said QuickResponse
Delaware, Inc., a Delaware corporation, and constitutes the duly adopted
agreement and act of said corporation.
WITNESS my hand this day of , 1997.
---- -------
--------------------------------------
Shawn M. O'Connor, Secretary
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CERTIFICATE OF SECRETARY
QUICKRESPONSE SERVICES, INC., A CALIFORNIA CORPORATION
The undersigned, Shawn M. O'Connor, hereby certifies that he is the
duly elected and acting Secretary of QuickResponse Services, Inc., a California
corporation ("QuickResponse California"), and hereby certifies that the attached
Agreement and Plan of Merger between QuickResponse Delaware, Inc., a Delaware
corporation, and QuickResponse California was duly approved by the shareholders
of QuickResponse California on , 1997.
--------
IN WITNESS WHEREOF, the undersigned has hereunto subscribed his name
this day of , 1997.
----- -------
---------------------------------
Shawn M. O'Connor, Secretary
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APPENDIX B
CERTIFICATE OF INCORPORATION OF
QUICKRESPONSE DELAWARE, INC.
FIRST: The name of this corporation is QuickResponse Delaware, Inc.
SECOND: The address of the registered office of the corporation in
the State of Delaware is 32 Loockerman Square, Suite L-100, City of Dover,
County of Kent, Delaware 19901, and the name of its registered agent at that
address is The Prentice-Hall Corporation System, Inc.
THIRD: The name and mailing address of the incorporator of the
corporation is:
Andrew Baw
Brobeck, Phleger & Harrison LLP
Two Embarcadero Place
2200 Geng Road
Palo Alto, California 94303
FOURTH: The purpose of the corporation is to engage in any lawful act
or activity for which corporations may be organized under the General
Corporation Law Of Delaware.
FIFTH: The corporation is authorized to issue 30,000,000 shares,
20,000,000 of which are designated "Common Stock," $0.001 par value, and
10,000,000 of which are designated "Preferred Stock," $0.001 par value. The
Board of Directors is hereby authorized to fix or alter the rights, preferences,
privileges and restrictions granted to or imposed upon any series of Preferred
Stock, and the number of shares constituting any such series and the designation
thereof, or of any of them. The Board of Directors is also authorized to
increase or decrease the number of shares of any series, prior or subsequent to
the issue of that series, but not below the number of shares of such series then
outstanding. In case the number of shares of any series shall be so decreased,
the shares constituting such decrease shall resume the status which they had
prior to the adoption of the resolution originally fixing the number of shares
of such series.
SIXTH: In furtherance and not in limitation of the powers conferred
by statute, the Board of Directors is expressly authorized to make, repeal,
alter, amend and rescind from time to time any or all of the bylaws of the
corporation; provided, however, that any bylaw amendment adopted by the Board of
Directors increasing or reducing the authorized number of directors or amending,
repealing, altering or rescinding Article 3, Section 3.2 of the Bylaws of the
corporation shall require a resolution adopted by the affirmative vote of not
less than sixty-six and two-thirds percent (66-2/3%) of the directors. Any
Bylaw amendment adopted by the stockholders increasing or reducing the
authorized number of directors or amending, repealing, altering or rescinding
Article 3, Section 3.2 of the Bylaws of the corporation shall require the
approval of not less than sixty-six and two-thirds percent (66-2/3%) of the
total voting power of all outstanding shares of stock of the corporation
entitled to vote thereon.
SEVENTH: The number of directors of the corporation shall be fixed
from time to time by a Bylaw or amendment thereof duly adopted by the Board of
Directors.
The Board of Directors shall be classified with respect to the time
for which they severally hold office into three classes designated Class I,
Class II and Class III, as nearly equal in number as possible. Each director
shall serve for a term ending on the date of the third annual meeting of
stockholders following the annual meeting at which the director was elected;
provided, however, that the directors first elected to Class I shall serve for a
term ending on the annual meeting next following the end of fiscal year 1997,
the directors first elected to Class II shall serve for a term ending on the
annual meeting next following the end of fiscal year 1998 and the directors
first elected to Class III shall
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serve for a term ending on the annual meeting next following the end of fiscal
year 1999. Notwithstanding the foregoing, each director shall serve until his
successor shall have been duly elected and qualified, unless he shall resign,
become disqualified, disabled or shall otherwise be removed.
At each annual election, directors chosen to succeed those whose terms
then expire shall be of the same class as the directors they succeed, unless by
reason of any intervening changes in the authorized number of directors, the
Board shall designate one or more directorships whose term then expires as
directorships of another class in order more nearly to achieve equality of
number of directors among the classes.
Notwithstanding the rule that the three classes shall be as nearly
equal in number of directors as possible, in the event of any change in the
authorized number of directors, each director then continuing to serve as such
shall nevertheless continue as a director of the class of which he is a member
until the expiration of his current term, or his prior death, resignation or
removal. If any newly created directorship may, consistently with the rule that
the three classes shall be as nearly equal in number of directors as possible,
be allocated to any class, the Board shall allocate it to that of the available
class whose term of office is due to expire at the earliest date following such
allocation.
EIGHTH: No stockholder will be permitted to cumulate votes in any
election of directors.
NINTH: Special meetings of the stockholders of this corporation for
any purpose or purposes may be called at any time upon the request in writing of
a majority of the Board of Directors or by the Chairman of the Board or the
President of the corporation. Any such request shall state the purpose or
purposes of the proposed meeting. As soon as reasonably practicable after
receipt of such a request, written notice of such meeting, stating the place,
date (which shall be sixty (60) days from the date of the notice) and hour of
the meeting, shall be given to each stockholder entitled to vote at such
meeting. Special meetings may not be called other than as provided in this
ARTICLE NINTH.
TENTH: Stockholders of the corporation shall take action by meetings
held pursuant to this Certificate of Incorporation and the Bylaws. Stockholders
may not take any action by written consent in lieu of a meeting. Meetings of
stockholders may be held within or outside of the State of Delaware, as the
Bylaws may provide. The books of the corporation may be kept (subject to any
provision contained in the statute) outside the State of Delaware at such place
or places as may be designated from time to time by the Board of Directors or in
the Bylaws of the corporation.
ELEVENTH: The corporation reserves the right to amend, alter, change
or repeal any provision contained in this Certificate of Incorporation, in the
manner now or hereafter prescribed by statute, and all rights conferred on
stockholders herein are granted subject to this reservation. Notwithstanding
the foregoing, the provisions set forth in ARTICLES SIXTH, SEVENTH, TENTH,
TWELFTH and this ARTICLE ELEVENTH may not be repealed or amended in any respect
unless such repeal or amendment is approved by the affirmative vote of not less
than sixty-six and two-thirds percent (66-2/3%) of the total voting power of all
outstanding shares of stock of this corporation entitled to vote thereon, unless
such amendment or repeal has been previously approved by the vote of not less
than sixty-six and two-thirds percent (66-2/3%) of the members of the Board of
Directors, in which case those Articles of this Certificate of Incorporation may
be so amended or repealed by a vote of not less than a majority of the total
voting power of all outstanding shares of stock of the corporation entitled to
vote thereon.
TWELFTH: A director of the corporation shall not be personally liable
to the corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach of the
director's duty of loyalty to the corporation or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the Delaware General
Corporation Law, or (iv) for any transaction from which the director derived any
improper personal benefit. If the Delaware General Corporation Law is hereafter
amended to authorize, with the approval of a corporation's stockholder, further
reductions in the liability of the directors of a corporation for breach of
fiduciary duty, then a director of the corporation shall not be liable for any
such breach to the fullest extent permitted by the Delaware General Corporation
Law as so amended. Any repeal or modification of the foregoing provisions of
this ARTICLE TWELFTH by the stockholders of the corporation shall not adversely
affect any right or protection of a director of the corporation existing at the
time of such repeal or modification.
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THIRTEENTH: Elections of directors need not be by written ballot
unless the Bylaws of the corporation shall so provide.
THE UNDERSIGNED, being the incorporator hereinbefore named, for the
purpose of forming a corporation to do business both within and without the
State of Delaware, and in pursuance of the Delaware General Corporation Law,
does hereby make this Certificate, hereby declaring and certifying that this is
my act and deed and the facts herein stated are true, and accordingly have
hereunto set my hand this ____ day of March 1997.
---------------------------------
Andrew Baw
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APPENDIX C
BYLAWS
OF
QUICKRESPONSE SERVICES, INC.
ARTICLE I
OFFICES
Section 1. The registered office shall be in the City of Wilmington,
County of New Castle, State of Delaware.
Section 2. The corporation may also have offices at such other places
both within and without the State of Delaware as the Board of Directors may from
time to time determine or the business of the corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. All meetings of the stockholders for the election of
directors shall be held at such time and place either within or without the
State of Delaware as shall be designated from time to time by the Board of
Directors and stated in the notice of the meeting. Meetings of stockholders for
any other purpose may be held at such time and place, within or without the
State of Delaware, as shall be stated in the notice of the meeting or in a duly
executed waiver of notice thereof.
Section 2. Annual meetings of stockholders, commencing with the year
1997, shall be held at such date and time as shall be designated from time to
time by the Board of Directors and stated in the notice of the meeting, at which
they shall elect by a plurality vote a Board of Directors, and transact such
other business as may properly be brought before the meeting.
Section 3. Written notice of the annual meeting stating the place,
date and hour of the meeting shall be given to each stockholder entitled to vote
at such meeting not fewer than ten (10) nor more than sixty (60) days before the
date of the meeting.
Section 4. The officer who has charge of the stock ledger of the
corporation shall prepare and make, at least ten (10) days before every meeting
of stockholders, a complete list of the stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
ten (10) days prior to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the notice of the
meeting, or, if not so specified, at the place where the meeting is to be held.
The list shall also be produced and kept at the time and place of the meeting
during the whole time thereof and may be inspected by any stockholder who is
present.
Section 5. The stockholders of the corporation may not call special
meetings of the stockholders for any purpose or purposes.
Section 6. The holders of a majority of the stock issued and
outstanding and entitled to vote thereat, present in person or represented by
proxy, shall constitute a quorum at all meetings of the stockholders for the
transaction of business except as otherwise provided by statute or by the
certificate of incorporation. If, however,
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such quorum shall not be present or represented at any meeting of the
stockholders, the stockholders entitled to vote thereat, present in person or
represented by proxy, shall have power to adjourn the meeting from time to time,
without notice other than announcement at the meeting, until a quorum shall be
present or represented. At such adjourned meeting at which a quorum shall be
present or represented any business may be transacted which might have been
transacted at the meeting as originally notified. If the adjournment is for
more than thirty (30) days, or if after the adjournment a new record date is
fixed for the adjourned meeting, a notice of the adjourned meeting shall be
given to each stockholder of record entitled to vote at the meeting.
Section 7. When a quorum is present at any meeting, the vote of the
holders of a majority of the stock having voting power, present in person or
represented by proxy, shall decide any question brought before such meeting,
unless the question is one upon which by express provision of the statutes or of
the certificate of incorporation a different vote is required, in which case
such express provision shall govern and control the decision of such question.
Section 8. Unless otherwise provided in the certificate of
incorporation each stockholder shall at every meeting of the stockholders be
entitled to one (1) vote in person or by proxy for each share of the capital
stock having voting power held by such stockholder, but no proxy shall be voted
on after three (3) years from its date, unless the proxy provides for a longer
period.
Section 9. Nominations for election to the Board of Directors must be
made by the Board of Directors or by any stockholder of any outstanding class of
capital stock of the corporation entitled to vote for the election of directors.
Nominations, other than those made by the Board of Directors of the corporation,
must be preceded by notification in writing received by the Secretary of the
corporation not less than twenty (20) days nor more than sixty (60) days prior
to any meeting of stockholders called for the election of directors. Such
notification shall contain the written consent of each proposed nominee to serve
as a director if so elected and the following information as to each proposed
nominee and as to each person, acting alone or in conjunction with one or more
other persons as a partnership, limited partnership, syndicate or other group,
who participates or is expected to participate in making such nomination or in
organizing, directing or financing such nomination or solicitation of proxies to
vote for the nominee:
(a) the name, age, residence, address, and business address of
each proposed nominee and of each such person;
(b) the principal occupation or employment, the name, type of
business and address of the corporation or other organization in which such
employment is carried on of each proposed nominee and of each such person;
(c) the amount of stock of the corporation owned beneficially,
either directly or indirectly, by each proposed nominee and each such person;
and
(d) a description of any arrangement or understanding of each
proposed nominee and of each such person with each other or any other person
regarding future employment or any future transaction to which the corporation
will or may be a party.
The presiding officer of the meeting shall have the authority to
determine and declare to the meeting that a nomination not preceded by
notification made in accordance with the foregoing procedure shall be
disregarded.
Section 10. At any meeting of the stockholders, only such business
shall be conducted as shall have been brought before the meeting (a) pursuant to
the corporation's notice of meeting, (b) by or at the direction of the Board of
Directors or (c) by any stockholder of the corporation who is a stockholder of
record at the time of
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giving of the notice provided for in this Bylaw, who shall be entitled to vote
at such meeting and who complies with the notice procedures set forth in this
Bylaw.
For business to be properly brought before any meeting by a
stockholder pursuant to clause (c) of this Section 12, the stockholder must have
given timely notice thereof in writing to the Secretary of the corporation. To
be timely, a stockholder's notice must be delivered to or mailed and received at
the principal executive offices of the corporation not less than twenty (20)
days nor more than sixty (60) days prior to the date of the meeting. A
stockholder's notice to the Secretary shall set forth as to each matter the
stockholder proposes to bring before the meeting (a) a brief description of the
business desired to be brought before the meeting and the reasons for conducting
such business at the meeting, (b) the name and address, as they appear on the
corporation's books, of the stockholder proposing such business, and the name
and address of the beneficial owner, if any, on whose behalf the proposal is
made, (c) the class and number of shares of the corporation which are owned
beneficially and of record by such stockholder of record and by the beneficial
owner, if any, on whose behalf of the proposal is made and (d) any material
interest of such stockholder of record and the beneficial owner, if any, on
whose behalf the proposal is made in such business.
Notwithstanding anything in these Bylaws to the contrary, no business
shall be conducted at a meeting except in accordance with the procedures set
forth in this Section 12. The presiding officer of the meeting shall, if the
facts warrant, determine and declare to the meeting that business was not
properly brought before the meeting and in accordance with the procedures
prescribed by this Section 12, and if such person should so determine, such
person shall so declare to the meeting and any such business not properly
brought before the meeting shall not be transacted. Notwithstanding the
foregoing provisions of this Section 12, a stockholder shall also comply with
all applicable requirements of the Securities Exchange Act of 1934, as amended,
and the rules and regulations thereunder with respect to the matters set forth
in this Section 12.
Section 11. The stockholders of the Corporation may not take action
by written consent without a meeting but must take any such actions at a duly
called annual or special meeting.
ARTICLE III
DIRECTORS
Section 1. The number of directors which shall constitute the whole
Board of Directors shall be determined by resolution of the Board of Directors
or by the stockholders at the annual meeting of the stockholders, except as
provided in Section 2 of this Article, and each director elected shall hold
office until his successor is elected and qualified. Directors need not be
stockholders.
Section 2. Vacancies and new created directorships resulting from any
increase in the authorized number of directors may be filled by a majority of
the directors then in office, though less than a quorum, or by a sole remaining
director, and the directors so chosen shall hold office until the next annual
election and until their successors are duly elected and shall qualify, unless
sooner displaced. If there are no directors in office, then an election of
directors may be held in the manner provided by statute. If, at the time of
filling any vacancy or any newly created directorship, the directors then in
office shall constitute less than a majority of the whole Board of Directors (as
constituted immediately prior to any such increase), the Court of Chancery may,
upon application of any stockholder or stockholders holding at least ten percent
(10%) of the total number of the shares at the time outstanding having the right
to vote for such directors, summarily order an election to be held to fill any
such vacancies or newly created directorships or to replace the directors chosen
by the directors then in office.
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Section 3. The business of the corporation shall be managed by or
under the direction of its Board of Directors which may exercise all such powers
of the corporation and do all such lawful acts and things as are not by statute
or by the certificate of incorporation or by these bylaws directed or required
to be exercised or done by the stockholders.
MEETINGS OF THE BOARD OF DIRECTORS
Section 4. The Board of Directors of the corporation may hold
meetings, both regular and special, either within or without the State of
Delaware.
Section 5. The first meeting of each newly elected Board of Directors
shall be held at such time and place as shall be fixed by the vote of the
stockholders at the annual meeting, and no notice of such meeting shall be
necessary to the newly elected directors in order legally to constitute the
meeting, provided a quorum shall be present. In the event of the failure of the
stockholders to fix the time or place of such first meeting of the newly elected
Board of Directors, or in the event such meeting is not held at the time and
place so fixed by the stockholders, the meeting may be held at such time and
place as shall be specified in a notice given as hereinafter provided for
special meetings of the Board of Directors or as shall be specified in a written
waiver signed by all of the directors.
Section 6. Regular meetings of the Board of Directors may be held
without notice at such time and at such place as shall from time to time be
determined by the Board of Directors.
Section 7. Special meetings of the Board of Directors may be called
by the president on two (2) days' notice to each director by mail or forty-eight
(48) hours notice to each director either personally or by telegram; special
meetings shall be called by the president or secretary in like manner and on
like notice on the written request of two directors unless the Board of
Directors consists of only one director, in which case special meetings shall be
called by the president or secretary in like manner and on like notice on the
written request of the sole director.
Section 8. At all meetings of the Board of Directors a majority of
the directors shall constitute a quorum for the transaction of business, and the
act of a majority of the directors present at any meeting at which there is a
quorum shall be the act of the Board of Directors, except as may be otherwise
specifically provided by statute or by the certificate of incorporation. If a
quorum shall not be present at any meeting of the Board of Directors, the
directors present thereat may adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum shall be present.
Section 9. Unless otherwise restricted by the certificate of
incorporation of these bylaws, any action required or permitted to be taken at
any meeting of the Board of Directors or of any committee thereof may be taken
without a meeting, if all members of the Board of Directors or committee, as the
case may be, consent thereto in writing, and the writing or writings are filed
with the minutes of proceedings of the Board of Directors or committee.
Section 10. Unless otherwise restricted by the certificate of
incorporation or these bylaws, members of the Board of Directors, or any
committee designated by the Board of Directors, may participate in a meeting of
the Board of Directors, or any committee, by means of conference telephone or
similar communications equipment by means of which all persons participating in
the meeting can hear each other, and such participation in a meeting shall
constitute presence in person at the meeting.
COMMITTEES OF DIRECTORS
Section 11. The Board of Directors may, by resolution passed by a
majority of the whole Board of Directors, designate one or more committees, each
committee to consist of one or more of the directors of the
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corporation. The Board of Directors 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.
In the absence of disqualification of a member of a committee, the
member or members thereof present at any meeting and not disqualified from
voting, whether or not he or they constitute a quorum, may unanimously appoint
another member of the Board of Directors to act at the meeting in the place of
any such absent or disqualified member.
Any such committee, to the extent provided in the resolution of the
Board of Directors, shall have and may exercise all the powers and authority of
the Board of Directors in the management of the business and affairs of the
corporation and may authorize the seal of the corporation to be affixed to all
papers which may require it, but no such committee shall have the power or
authority in reference to amending the certificate of incorporation, adopting an
agreement of merger or consolidation, recommending to the stockholders the sale,
lease or exchange of all or substantially all of the corporation's property and
assets, recommending to the stockholders a dissolution of the corporation or a
revocation of a dissolution or amending the bylaws of the corporation; and,
unless the resolution or the certificate of incorporation expressly so provide,
no such committee shall have the power or authority to declare a dividend or to
authorize the issuance of stock. Such committee or committees shall have such
name or names as may be determined from time to time by resolution adopted by
the Board of Directors.
Section 12. Each committee shall keep regular minutes of its meetings
and report the same to the Board of Directors when required.
COMPENSATION OF DIRECTORS
Section 13. Unless otherwise restricted by the certificate of
incorporation or these bylaws, the Board of Directors shall have the authority
to fix the compensation of directors. The directors may be paid their expenses,
if any, of attendance at each meeting of the Board of Directors and may be paid
a fixed sum for attendance at each meeting of the Board of Directors or a stated
salary as director. No such payment shall preclude any director from serving
the corporation in any other capacity and receiving compensation therefor.
Members of special or standing committees may be allowed like compensation for
attending committee meetings.
REMOVAL OF DIRECTORS
Section 14. Unless otherwise restricted by the certificate of
incorporation or bylaw, any director or the entire Board of Directors may be
removed, with or without cause, by the holders of a majority of shares entitled
to vote at an election of directors.
ARTICLE IV
NOTICES
Section 1. Whenever, under the provisions of the statutes or of the
certificate of incorporation or of these bylaws, notice is required to be given
to any director or stockholder, it shall not be construed to mean personal
notice, but such notice may be given in writing, by mail, addressed to such
director or stockholder, at his address as it appears on the records of the
corporation, with postage thereon prepaid, and such notice shall be deemed to be
given at the time when the same shall be deposited in the United States mail.
Notice to directors may also be given by telegram.
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Section 2. Whenever any notice is required to be given under the
provisions of the statutes or of the certificate of incorporation or of these
bylaws, a waiver thereof in writing, signed by the person or persons entitled to
said notice, whether before or after the time stated therein, shall be deemed
equivalent thereto.
ARTICLE V
OFFICERS
Section 1. The officers of the corporation shall be chosen by the
Board of Directors and shall be a president, treasurer and a secretary. The
Board of Directors may elect from among its members a Chairman of the Board and
a Vice Chairman of the Board. The Board of Directors may also choose one or
more vice-presidents, assistant secretaries and assistant treasurers. Any
number of offices may be held by the same person, unless the certificate of
incorporation or these bylaws otherwise provide.
Section 2. The Board of Directors at its first meeting after each
annual meeting of stockholders shall choose a president, a treasurer and a
secretary and may choose vice presidents.
Section 3. The Board of Directors may appoint such other officers and
agents as it shall deem necessary who shall hold their offices for such terms
and shall exercise such powers and perform such duties as shall be determined
from time to time by the Board of Directors.
Section 4. The salaries of all officers and agents of the corporation
shall be fixed by the Board of Directors.
Section 5. The officers of the corporation shall hold office until
their successors are chosen and qualify. Any officer elected or appointed by
the Board of Directors may be removed at any time by the affirmative vote of a
majority of the Board of Directors. Any vacancy occurring in any office of the
corporation shall be filled by the Board of Directors.
THE CHAIRMAN OF THE BOARD
Section 6. The Chairman of the Board, if any, shall preside at all
meetings of the Board of Directors and of the stockholders at which he shall be
present. He shall have and may exercise such powers as are, from time to time,
assigned to him by the Board of Directors and as may be provided by law.
Section 7. In the absence of the Chairman of the Board, the Vice
Chairman of the Board, if any, shall preside at all meetings of the Board of
Directors and of the stockholders at which he shall be present. He shall have
and may exercise such powers as are, from time to time, assigned to him by the
Board of Directors and as may be provided by law.
THE PRESIDENT AND VICE-PRESIDENTS
Section 8. The president shall be the chief executive officer of the
corporation; and in the absence of the Chairman and Vice Chairman of the Board,
he shall preside at all meetings of the stockholders and the Board of Directors;
he shall have general and active management of the business of the corporation
and shall see that all orders and resolutions of the Board of Directors are
carried into effect.
Section 9. He shall execute bonds, mortgages and other contracts
requiring a seal, under the seal of the corporation, except where required or
permitted by law to be otherwise signed and executed and except where
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the signing and execution thereof shall be expressly delegated by the Board of
Directors to some other officer or agent of the corporation.
Section 10. In the absence of the president or in the event of his
inability or refusal to act, the vice-president, if any, (or in the event there
be more than one (1) vice-president, the vice-presidents in the order designated
by the directors, or in the absence of any designation, then in the order of
their election) shall perform the duties of the president, and when so acting,
shall have all the powers of and be subject to all the restrictions upon the
president. The vice-presidents shall perform such other duties and have such
other powers as the Board of Directors may from time to time prescribe.
THE SECRETARY AND ASSISTANT SECRETARY
Section 11. The secretary shall attend all meetings of the Board of
Directors and all meetings of the stockholders and record all the proceedings of
the meetings of the corporation and of the Board of Directors in a book to be
kept for that purpose and shall perform like duties for the standing committees
when required. He shall give, or cause to be given, notice of all meetings of
the stockholders and special meetings of the Board of Directors and shall
perform such other duties as may be prescribed by the Board of Directors or
president, under whose supervision he shall be. He shall have custody of the
corporate seal of the corporation and he, or an assistant secretary, shall have
authority to affix the same to any instrument requiring it and when so affixed,
it may be attested by his signature or by the signature of such assistant
secretary. The Board of Directors may give general authority to any other
officer to affix the seal of the corporation and to attest the affixing by his
signature.
Section 12. The assistant secretary, or if there be more than one
(1), the assistant secretaries in the order determined by the Board of Directors
(or if there be no such determination, then in the order of their election)
shall, in the absence of the secretary or in the event of his inability or
refusal to act, perform the duties and exercise the powers of the secretary and
shall perform such other duties and have such other powers as the Board of
Directors may from time to time prescribe.
THE TREASURER AND ASSISTANT TREASURERS
Section 13. The treasurer shall have the custody of the corporate
funds and securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the corporation and shall deposit all moneys
and other valuable effects in the name and to the credit of the corporation in
such depositories as may be designated by the Board of Directors.
Section 14. He shall disburse the funds of the corporation as may be
ordered by the Board of Directors, taking proper vouchers for such
disbursements, and shall render to the president and the Board of Directors, at
its regular meetings, or when the Board of Directors so requires, an account of
all his transactions as treasurer and of the financial condition of the
corporation.
Section 15. If required by the Board of Directors, he shall give the
corporation a bond (which shall be renewed every six (6) years) in such sum and
with such surety or sureties as shall be satisfactory to the Board of Directors
for the faithful performance of the duties of his office and for the restoration
to the corporation, in case of his death, resignation, retirement or removal
from office, of all books, papers, vouchers, money and other property of
whatever kind in his possession or under his control belonging to the
corporation.
Section 16. The assistant treasurer, or if there shall be more than
one (1), the assistant treasurers in the order determined by the Board of
Directors (or if there be no such determination, then in the order of their
election) shall, in the absence of the treasurer or in the event of his
inability or refusal to act, perform the duties and exercise the powers of the
treasurer and shall perform such other duties and have such other powers as the
Board of Directors may from time to time prescribe.
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ARTICLE VI
CERTIFICATE OF STOCK
Section 1. Every holder of stock in the corporation shall be entitled
to have a certificate, signed by, or in the name of the corporation by, the
chairman or vice- chairman of the Board of Directors, or the president or a
vice-president and the treasurer or an assistant treasurer, or the secretary or
an assistant secretary of the corporation, certifying the number of shares owned
by him in the corporation.
Certificates may be issued for partly paid shares and in such case
upon the face or back of the certificates issued to represent any such partly
paid shares, the total amount of the consideration to be paid therefor, and the
amount paid thereon shall be specified.
If the corporation shall be authorized to issue more than one class of
stock or more than one series of any class, the powers, designations,
preferences and relative, participating, optional or other special rights of
each class of stock or series thereof and the qualification, limitations or
restrictions of such preferences and/or rights shall be set forth in full or
summarized on the face or back of the certificate which the corporation shall
issue to represent such class or series of stock, provided that, except as
otherwise provided in section 202 of the General Corporation Law of Delaware, in
lieu of the foregoing requirements, there may be set forth on the face or back
of the certificate which the corporation shall issue to represent such class or
series of stock, a statement that the corporation will furnish without charge to
each stockholder who so requests the powers, designations, preferences and
relative, participating, optional or other special rights of each class of stock
or series thereof and the qualifications, limitations or restrictions of such
preferences and/or rights.
Section 2. Any of or all the signatures on the certificate may be
facsimile. In case any officer, transfer agent or registrar who has signed or
whose facsimile signature has been placed upon a certificate shall have ceased
to be such officer, transfer agent or registrar before such certificate is
issued, it may be issued by the corporation with the same effect as if he were
such officer, transfer agent or registrar at the date of issue.
LOST CERTIFICATES
Section 3. The Board of Directors may direct a new certificate or
certificates to be issued in place of any certificate or certificates
theretofore issued by the corporation alleged to have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
the certificate of stock to be lost, stolen or destroyed. When authorizing such
issue of a new certificate or certificates, the Board of Directors may, in its
discretion and as a condition precedent to the issuance thereof, require the
owner of such lost, stolen or destroyed certificate or certificates, or his
legal representative, to advertise the same in such manner as it shall require
and/or to give the corporation a bond in such sum as it may direct as indemnity
against any claim that may be made against the corporation with respect to the
certificate alleged to have been lost, stolen or destroyed.
TRANSFER OF STOCK
Section 4. Upon surrender to the corporation or the transfer agent of
the corporation of a certificate for shares duly endorsed or accompanied by
proper evidence of succession, assignation or authority to transfer, it shall be
the duty of the corporation to issue a new certificate to the person entitled
thereto, cancel the old certificate and record the transaction upon its books.
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FIXING RECORD DATE
Section 5. In order that the corporation may determine the
stockholders entitled to notice of or to vote at any meeting of stockholder or
any adjournment thereof, or to express consent to corporate action in writing
without a meeting, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the purpose of any
other lawful action, the Board of Directors may fix, in advance, a record date,
which shall not be more than sixty (60) nor less than ten (10) days before the
date of such meeting, nor more than sixty (60) days prior to any other action.
A determination of stockholders of record entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of the meeting; provided,
however, that the Board of Directors may fix a new record date for the adjourned
meeting.
REGISTERED STOCKHOLDERS
Section 6. The corporation shall be entitled to recognize the
exclusive right of a person registered on its books as the owner of shares to
receive dividends, and to vote as such owner, and to hold liable for calls and
assessments a person registered on its books as the owner of shares and shall
not be bound to recognize any equitable or other claim to or interest in such
share or shares on the part of any other person, whether or not it shall have
express or other notice thereof, except as otherwise provided by the laws of
Delaware.
ARTICLE VII
GENERAL PROVISIONS
DIVIDENDS
Section 1. Dividends upon the capital stock of the corporation,
subject to the provisions of the certificate of incorporation, if any, may be
declared by the Board of Directors at any regular or special meeting, pursuant
to law. Dividends may be paid in cash, in property or in shares of the capital
stock, subject to the provisions of the certificate of incorporation.
Section 2. Before payment of any dividend, there may be set aside out
of any funds of the corporation available for dividends such sum or sums as the
directors from time to time, in their absolute discretion, think proper as a
reserve or reserves to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the corporation, or for such other
purposes as the directors shall think conducive to the interest of the
corporation, and the directors may modify or abolish any such reserve in the
manner in which it was created.
CHECKS
Section 3. All checks or demands for money and notes of the
corporation shall be signed by such officer or officers or such other person or
persons as the Board of Directors may from time to time designate.
FISCAL YEAR
Section 4. The fiscal year of the corporation shall be fixed by
resolution of the Board of Directors.
SEAL
Section 5. The Board of Directors may adopt a corporate seal having
inscribed thereon the name of the corporation, the year of its organization and
the words "Corporate Seal, Delaware." The seal may be used by causing it or a
facsimile thereof to be impressed or affixed or reproduced or otherwise.
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INDEMNIFICATION
Section 6. The corporation shall, to the fullest extent authorized
under the laws of the State of Delaware, as those laws may be amended and
supplemented from time to time, indemnify any director made, or threatened to be
made, a party to an action or proceeding, whether criminal, civil,
administrative or investigative, by reason of being a director of the
corporation or a predecessor corporation or, at the corporation's request, a
director or officer of another corporation, provided, however, that the
corporation shall indemnify any such agent in connection with a proceeding
initiated by such agent only if such proceeding was authorized by the Board of
Directors of the corporation. The indemnification provided for in this Section
6 shall: (i) not be deemed exclusive of any other rights to which those
indemnified may be entitled under any bylaw, agreement or vote of stockholders
or disinterested directors or otherwise, both as to action in their official
capacities and as to action in another capacity while holding such office, (ii)
continue as to a person who has ceased to be a director and (iii) inure to the
benefit of the heirs, executors and administrators of such a person. The
corporation's obligation to provide indemnification under this Section 6 shall
be offset to the extent of any other source of indemnification or any otherwise
applicable insurance coverage under a policy maintained by the corporation or
any other person.
Expenses incurred by a director of the corporation in defending a
civil or criminal action, suit or proceeding by reason of the fact that he is or
was a director of the corporation (or was serving at the corporation's request
as a director or officer of another corporation) shall be paid by the
corporation in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of such director to
repay such amount if it shall ultimately be determined that he is not entitled
to be indemnified by the corporation as authorized by relevant sections of the
General Corporation Law of Delaware. Notwithstanding the foregoing, the
corporation shall not be required to advance such expenses to an agent who is a
party to an action, suit or proceeding brought by the corporation and approved
by a majority of the Board of Directors of the corporation which alleges willful
misappropriation of corporate assets by such agent, disclosure of confidential
information in violation of such agent's fiduciary or contractual obligations to
the corporation or any other willful and deliberate breach in bad faith of such
agent's duty to the corporation or its stockholders.
The foregoing provisions of this Section 6 shall be deemed to be a
contract between the corporation and each director who serves in such capacity
at any time while this bylaw is in effect, and any repeal or modification
thereof shall not affect any rights or obligations then existing with respect to
any state of facts then or theretofore existing or any action, suit or
proceeding theretofore or thereafter brought based in whole or in part upon any
such state of facts.
The Board of Directors in its discretion shall have power on behalf of
the corporation to indemnify any person, other than a director, made a party to
any action, suit or proceeding by reason of the fact that he, his testator or
intestate, is or was an officer or employee of the corporation.
To assure indemnification under this Section 6 of all directors,
officers and employees who are determined by the corporation or otherwise to be
or to have been "fiduciaries" of any employee benefit plan of the corporation
which may exist from time to time, Section 145 of the General Corporation Law of
Delaware shall, for the purposes of this Section 6, be interpreted as follows:
an "other enterprise" shall be deemed to include such an employee benefit plan,
including without limitation, any plan of the corporation which is governed by
the Act of Congress entitled "Employee Retirement Income Security Act of 1974,"
as amended from time to time; the corporation shall be deemed to have requested
a person to serve an employee benefit plan where the performance by such person
of his duties to the corporation also imposes duties on, or otherwise involves
services by, such person to the plan or participants or beneficiaries of the
plan; excise taxes assessed on a person with respect to an employee benefit plan
pursuant to such Act of Congress shall be deemed "fines."
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ARTICLE VIII
AMENDMENTS
Section 1. Subject to the Certificate of Incorporation of the
corporation, these bylaws may be altered, amended or repealed or new bylaws may
be adopted by the stockholders or by the Board of Directors, when such power is
conferred upon the Board of Directors by the certificate of incorporation at any
regular meeting of the stockholders or of the Board of Directors or at any
special meeting of the stockholders or of the Board of Directors if notice of
such alteration, amendment, repeal or adoption of new bylaws be contained in the
notice of such special meeting. If the power to adopt, amend or repeal bylaws
is conferred upon the Board of Directors by the certificate or incorporation, it
shall not divest or limit the power of the stockholders to adopt, amend or
repeal bylaws.
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APPENDIX D
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QUICKRESPONSE SERVICES, INC.
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (this "Agreement") is made and entered
into this ____ day of _______, 1997 between QuickResponse Services, Inc., a
Delaware corporation (the "Company"), and _______________ ("Indemnitee").
WHEREAS, Indemnitee, a member of the Board of Directors or an officer,
employee or agent of the Company, performs a valuable service in such capacity
for the Company;
WHEREAS, the stockholders of the Company have adopted Bylaws (the
"Bylaws") providing for the indemnification of the directors of the Company to
the maximum extent authorized by Section 145 of the Delaware General Corporation
Law, as amended (the "Code");
WHEREAS, the Bylaws and the Code, by their non-exclusive nature,
permit contracts between the Company and the members of its Board of Directors,
officers, employees or agents with respect to indemnification of such directors,
officers, employees or agents;
WHEREAS, in accordance with the authorization as provided by the Code,
the Company either has purchased and presently maintains or intends to purchase
and maintain a policy or policies of Directors and Officers Liability Insurance
("D & O Insurance") covering certain liabilities which may be incurred by its
directors and officers in the performance of their duties as directors and
officers of the Company;
WHEREAS, as a result of developments affecting the terms, scope and
availability of D & O Insurance there exists general uncertainty as to the
extent of protection afforded members of the Board of Directors or officers,
employees or agents by such D & O Insurance and by statutory and bylaw
indemnification provisions; and
WHEREAS, in order to induce Indemnitee to continue to serve as a
member of the Board of Directors, officer, employee or agent of the Company, the
Company has determined and agreed to enter into this contract with Indemnitee.
NOW, THEREFORE, in consideration of Indemnitee's continued service as
a director, officer, employee or agent after the date hereof, and for other good
and valid consideration, the receipt and adequacy of which is hereby
acknowledged, the parties hereto agree as follows:
1. INDEMNIFICATION OF INDEMNITEE. The Company hereby agrees to
hold harmless and indemnify Indemnitee to the fullest extent authorized or
permitted by the provisions of the Code, as may be amended from time to time.
2. ADDITIONAL INDEMNITY. Subject only to the exclusions set forth
in Sections 3 and 6(c) hereof, the Company hereby further agrees to hold
harmless and indemnify Indemnitee:
(a) against any and all expenses (including attorneys' fees),
witness fees, judgments, fines and amounts paid in settlement actually and
reasonably incurred by Indemnitee in connection with any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (including an action by or in the right of the Company) to which
Indemnitee is, was or at any time becomes a party, or is threatened to be made a
party, by reason of the fact that Indemnitee is, was or at any time becomes a
director, officer, employee or agent of the Company or any subsidiary of the
Company, or is or was serving or at any time serves at the request of the
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Company as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise;
and
(b) otherwise to the fullest extent as may be provided to
Indemnitee by the Company under the non-exclusivity provisions of Article 6 of
the Bylaws of the Company and the Code.
3. LIMITATIONS ON ADDITIONAL INDEMNITY.
(a) No indemnity pursuant to Section 2 hereof shall be paid by
the Company:
i) in respect to remuneration paid to Indemnitee if it
shall be determined by a final judgment or other
final adjudication that such remuneration was in
violation of law;
ii) on account of any suit in which judgment is rendered
against Indemnitee for an accounting of profits made
from the purchase or sale by Indemnitee of
securities of the Company pursuant to the provisions
of Section 16(b) of the Securities Exchange Act of
1934 and amendments thereto or similar provisions of
any federal, state or local statutory law;
iii) on account of Indemnitee's conduct which is finally
adjudged to have been knowingly fraudulent or
deliberately dishonest or to constitute willful
misconduct;
iv) on account of Indemnitee's conduct which is the
subject of an action, suit or proceeding described
in Section 6(c)(ii) hereof;
v) on account of any action, claim or proceeding (other
than a proceeding referred to in Section 7(b)
hereof) initiated by the Indemnitee unless such
action, claim or proceeding was authorized in the
specific case by action of the Board of Directors;
vi) if a final decision by a Court having jurisdiction
in the matter shall determine that such
indemnification is not lawful (and, in this respect,
both the Company and Indemnitee have been advised
that the Securities and Exchange Commission believes
that indemnification for liabilities arising under
the federal securities laws is against public policy
and is, therefore, unenforceable and that claims for
indemnification should be submitted to appropriate
courts for adjudication); and
vii) except to the extent the aggregate of losses to be
indemnified thereunder exceeds the sum of (a) such
losses for which the Indemnitee is indemnified
pursuant to Section 1 hereof and (b) any additional
amount paid to the Indemnitee pursuant to any D & O
Insurance purchased and maintained by the Company.
(b) No indemnity pursuant to Section 1 or 2 hereof shall be paid
by the Company if the action, suit or proceeding with respect to which a claim
for indemnity hereunder is made arose from or is based upon any of the
following:
i) Any solicitation of proxies by Indemnitee, or by a
group of which he was or became a member consisting
of two or more persons that had agreed (whether
formally or informally and whether or not in
writing) to act together for the purpose of
soliciting proxies, in opposition to any
solicitation of proxies approved by the Board of
Directors.
ii) Any activities by Indemnitee that constitute a
breach of or default under any agreement between
Indemnitee and the Company.
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4. CONTRIBUTION. If the indemnification provided in Sections 1 and
2 hereof is unavailable by reason of a Court decision described in Section
3(a)(vi) hereof based on grounds other than any of those set forth in paragraphs
(i) through (v) of Section 3 (a) hereof, then in respect of any threatened,
pending or completed action, suit or proceeding in which the Company is jointly
liable with Indemnitee (or would be if joined in such action, suit or
proceeding), the Company shall contribute to the amount of expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred and paid or payable by Indemnitee in such proportion as is
appropriate to reflect (i) the relative benefits received by the Company on the
one hand and Indemnitee on the other hand from the transaction from which such
action, suit or proceeding arose, and (ii) the relative fault of the Company on
the one hand and of Indemnitee on the other in connection with the events which
resulted in such expenses, judgments, fines or settlement amounts, as well as
any other relevant equitable considerations. The relative fault of the Company
on the one hand and of Indemnitee on the other shall be determined by reference
to, among other things, the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent the circumstances resulting in
such expenses, judgments, fines or settlement amounts. The Company agrees that
it would not be just and equitable if contribution pursuant to this Section 4
were determined by pro rata allocation or any other method of allocation which
does not take account of the foregoing equitable considerations.
5. NOTIFICATION AND DEFENSE OF CLAIM. Not later than thirty (30)
days after receipt by Indemnitee of notice of the commencement of any action,
suit or proceeding, Indemnitee shall, if a claim in respect thereof is to be
made against the Company under this Agreement, notify the Company of the
commencement thereof; but Indemnitee's omission so to notify the Company will
not relieve the Company from any liability which it may have to Indemnitee
otherwise than under this Agreement. With respect to any such action, suit or
proceeding as to which Indemnitee notifies the Company of the commencement
thereof:
(a) The Company will be entitled to participate therein at its
own expense.
(b) Except as otherwise provided below, to the extent that it
may wish, the Company shall, jointly with any other indemnifying party similarly
notified, be entitled to assume the defense thereof, with counsel reasonably
satisfactory to Indemnitee. After notice from the Company to Indemnitee of its
election to assume the defense thereof, the Company will not be liable to
Indemnitee under this Agreement for any legal or other expenses subsequently
incurred by Indemnitee in connection with the defense thereof, other than
reasonable costs of investigation or as otherwise provided below. Indemnitee
shall have the right to employ its own counsel in such action, suit or
proceeding, but the fees and expenses of such counsel incurred after notice from
the Company of the Company's assumption of the defense thereof shall be at the
expense of Indemnitee unless (i) the employment of counsel by Indemnitee has
been authorized by the Company; (ii) Indemnitee shall have reasonably concluded
that there may be a conflict of interest between the Company and Indemnitee in
the conduct of the defense of such action; or (iii) the Company shall not in
fact have employed counsel to assume the defense of such action; in each of
which cases the fees and expenses of Indemnitee's separate counsel shall be paid
by the Company. The Company shall not be entitled to assume the defense of any
action, suit or proceeding brought by or on behalf of the Company or as to which
Indemnitee shall have made the conclusion provided for in (ii) above.
(c) The Company shall not be liable to indemnify Indemnitee
under this Agreement for any amounts paid in settlement of any action or claim
effected without its written consent. The Company shall be permitted to settle
any action except that it shall not settle any action or claim in any manner
which would impose any penalty or limitation on Indemnitee without Indemnitee's
written consent. Neither the Company nor Indemnitee will unreasonably withhold
its consent to any proposed settlement.
6. ADVANCEMENT AND REPAYMENT OF EXPENSES.
(a) In the event that Indemnitee employs his or her own counsel
pursuant to Sections 5(b)(i) through (iii) above, the Company shall advance to
Indemnitee, prior to any final disposition of any threatened or pending action,
suit or proceeding, whether civil, criminal, administrative or investigative,
any and all reasonable expenses (including legal fees and expenses) incurred in
investigating or defending any such action, suit or
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proceeding within ten (10) days after receiving from Indemnitee copies of
invoices presented to Indemnitee for such expenses.
(b) Indemnitee agrees that Indemnitee will reimburse the Company
for all reasonable expenses paid by the Company in investigating or defending
any civil or criminal action, suit or proceeding against Indemnitee in the event
and only to the extent it shall be ultimately determined by a final judicial
decision (from which there is no right of appeal) that Indemnitee is not
entitled, under the provisions of the Code, the Bylaws, this Agreement or
otherwise, to be indemnified by the Company for such expenses.
(c) Notwithstanding the foregoing, the Company shall not be
required to advance such expenses to Indemnitee in respect of any action arising
from or based upon any of the matters set forth in subsection (b) of Section 3
or if Indemnitee (i) commences any action, suit or proceeding as a plaintiff
unless such advance is specifically approved by a majority of the Board of
Directors or (ii) is a party to an action, suit or proceeding brought by the
Company and approved by a majority of the Board which alleges willful
misappropriation of corporate assets by Indemnitee, disclosure of confidential
information in violation of Indemnitee's fiduciary or contractual obligations to
the Company, or any other willful and deliberate breach in bad faith of
Indemnitee's duty to the Company or its shareholders.
7. ENFORCEMENT.
(a) The Company expressly confirms and agrees that it has
entered into this Agreement and assumed the obligations imposed on the Company
hereby in order to induce Indemnitee to continue as a director, officer,
employee or other agent of the Company, and acknowledges that Indemnitee is
relying upon this Agreement in continuing in such capacity.
(b) In the event Indemnitee is required to bring any action to
enforce rights or to collect moneys due under this Agreement and is successful
in such action, the Company shall reimburse Indemnitee for all Indemnitee's
reasonable fees and expenses, including attorney's fees, in bringing and
pursuing such action.
8. SUBROGATION. In the event of payment under this agreement, the
Company shall be subrogated to the extent of such payment to all of the rights
of recovery of Indemnitee, who shall execute all documents required and shall do
all acts that may be necessary to secure such rights and to enable the Company
effectively to bring suit to enforce such rights.
9. CONTINUATION OF OBLIGATIONS. All agreements and obligations of
the Company contained herein shall commence upon the date that Indemnitee first
became a member of the Board of Directors or an officer, employee or agent of
the Company, as the case may be, and shall continue during the period Indemnitee
is a director, officer, employee or agent of the Company (or is or was serving
at the request of the Company as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise) and shall continue thereafter so long as Indemnitee shall be
subject to any possible claim or threatened, pending or completed action, suit
or proceeding, whether civil, criminal or investigative, by reason of the fact
that Indemnitee was a director, officer, employee or agent of the Company or
serving in any other capacity referred to herein.
10. SURVIVAL OF RIGHTS. The rights conferred on Indemnitee by this
Agreement shall continue after Indemnitee has ceased to be a director, officer,
employee or other agent of the Company and shall inure to the benefit of
Indemnitee's heirs, executors and administrators.
11. NON-EXCLUSIVITY OF RIGHTS. The rights conferred on Indemnitee by
this Agreement shall not be exclusive of any other right which Indemnitee may
have or hereafter acquire under any statute, provision of the Company's
Certificate of Incorporation or Bylaws, agreement, vote of stockholders or
directors, or otherwise, both as to action in his official capacity and as to
action in another capacity while holding office; provided, however, that this
Agreement shall supersede and replace any prior indemnification agreements
entered into by and between the Company
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and Indemnitee and that any such prior indemnification agreement shall be
terminated upon the execution of this Agreement.
12. SEPARABILITY. Each of the provisions of this Agreement is a
separate and distinct agreement and independent of the others, so that if any or
all of the provisions hereof shall be held to be invalid or unenforceable for
any reason, such invalidity or unenforceability shall not affect the validity or
enforceability of the other provisions hereof or the obligation of the Company
to indemnify the Indemnitee to the full extent provided by the Bylaws or the
Code.
13. GOVERNING LAW. This Agreement shall be interpreted and enforced
in accordance with the laws of the State of Delaware.
14. BINDING EFFECT. This Agreement shall be binding upon Indemnitee
and upon the Company, its successors and assigns, and shall inure to the benefit
of Indemnitee, his or her heirs, personal representatives and assigns and to the
benefit of the Company, its successors and assigns.
15. AMENDMENT AND TERMINATION. No amendment, modification,
termination or cancellation of this Agreement shall be effective unless it is in
writing and is signed by both parties hereto.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
and as of the day and year first above written.
QUICKRESPONSE SERVICES, INC.
a Delaware corporation
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
INDEMNITEE
------------------------------------
Name:
Address:
----------------------------
------------------------------------
------------------------------------
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THIS PROXY IS SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS OF
QUICKRESPONSE SERVICES, INC.
H. Lynn Hazlett and Shawn M. O'Connor or either of them, are hereby appointed
as the lawful agents and proxies of the undersigned (with all powers the
undersigned would possess if personally present, including full power of
substitution) to represent and to vote all shares of capital stock of
QuickResponse Services, Inc. (the "Company") which the undersigned is
entitled to vote at the Company's Annual Meeting of Shareholders on May 30,
1997, and at any adjournments or postponements thereof as follows:
(CONTINUED, AND TO BE MARKED, DATED AND SIGNED, ON THE OTHER SIDE)
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Please mark
your vote as /X/
indicated in
this example
1. The election of all nominees listed below for the Board of Directors, as
described in the Proxy Statement:
/ / FOR all nominees listed below
(except as marked to the contrary below)
/ / WITHHOLD AUTHORITY
to vote for all nominees listed below
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE
A LINE THROUGH THE NOMINEE'S NAME ON THE LIST BELOW:
Tania Amochaev, Steven D. Brooks, John P. Dougall, H. Lynn Hazlett, Peter R.
Johnson, Garth Saloner, Philip Schlein and Garen K. Staglin
2. Proposal to approve the reincorporation of the Company in the State of
Delaware:
/ / FOR / / AGAINST / / ABSTAIN
3. Proposal to ratify the appointment of Deloitte & Touche LLP as independent
auditors of the Company for the fiscal year ending December 31, 1997:
/ / FOR / / AGAINST / / ABSTAIN
4. Transaction of any other business which may properly come before the
meeting and any adjournment or postponement thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE ABOVE PROPOSALS.
THIS PROXY WILL BE VOTED AS DIRECTED, OR, IF NO DIRECTION IS INDICATED, WILL
BE VOTED "FOR" EACH OF THE ABOVE PROPOSALS AND, AT THE DISCRETION OF THE
PERSONS NAMED AS PROXIES, UPON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE
THE MEETING. THIS PROXY MAY BE REVOKED AT ANY TIME BEFORE IT IS VOTED.
I/We do / / or do not / / expect to attend
this meeting.
DATE: , 1997
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(Signature)
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(Signature if held jointly)
Please sign exactly as shown on your stock certificate and on the envelope in
which this proxy was mailed. When signing as partner, corporate officer,
attorney, executor, administrator, trustee, guardian or in any other
representative capacity, give full title as such and sign your name as well.
If stock is held jointly, each joint owner should sign.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY, USING
THE ENCLOSED ENVELOPE.
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