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PROFESSIONAL VETERINARY PRODUCTS, LTD.
10100 J Street
Omaha, Nebraska 68127
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To Shareholders of Professional Veterinary Products, Ltd:
Notice is hereby given that a special meeting of shareholders of
Professional Veterinary Products, Ltd. (the "Company") will be held at Bartle
Hall Convention Center, 301 West 13th, Kansas City, Missouri 64105 on
Saturday, August 17, 1996, at 8:00 a.m., Central Daylight Time, for the
purposes of considering and voting upon the following matters:
1. To amend the Company's Articles of Incorporation by amending Article
III to provide that the Company shall not pay any dividends on its capital
stock; providing for the repurchase of stock owned by a shareholder of the
Company at the price paid for such stock by the shareholder; fixing the
price of a share of common stock at $3,000 per share, or such lesser amount
as determined by the Company's Board of Directors; and to provide for
restrictions on the sale, assignment or other transfer of the stock by all
shareholders.
2. To amend the Company's Articles of Incorporation by adding a new
Article X governing disposition of Company assets upon the liquidation or
dissolution of the Company.
3. To amend the Bylaws of the Company to make them consistent with the
Company's Articles of Incorporation by replacing Article VI, Section 5 in its
entirety, and deleting certain language in Article VI, Section 4 of the
Bylaws.
4. To transact such other business as may properly come before the
special meeting or any adjournment thereof.
Only shareholders of record at the close of business on July 15, 1996,
will be entitled to notice of and to vote at this meeting or any adjournment
thereof.
All shareholders are cordially invited to attend the meeting in person.
However, to assure the presence of a quorum, you are requested to promptly
sign, date and return your proxy in the enclosed, self-addressed, stamped
envelope whether or not you plan to attend the meeting.
BY ORDER OF THE BOARD OF DIRECTORS
Dr. Lionel Reilly, President
July 25, 1996
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PROXY STATEMENT
PROFESSIONAL VETERINARY PRODUCTS, LTD.
10100 J STREET
OMAHA, NEBRASKA 68127
PROXY STATEMENT
Special Meeting of Shareholders
August 17, 1996
INTRODUCTION
This proxy statement is furnished in connection with the solicitation by
the Board of Directors of Professional Veterinary Products, Ltd. (the
"Company") of proxies for use at the special meeting of shareholders of the
Company to be held on August 17, 1996 (the "Special Meeting"). This proxy
statement and the enclosed proxy are first being sent to shareholders on or
about July 25, 1996.
Only holders of Company common stock of record at the close of business
on July 15, 1996, the record date established by the Board of Directors for
the Special Meeting, are entitled to notice of and to vote at the Special
Meeting and any adjournment thereof. On the record date, there were 870
shares of Company common stock issued and outstanding held by 870
shareholders of record. Each share of common stock is entitled to one vote
on each matter properly presented to the Special Meeting.
Proxies solicited by the Board of Directors will be voted in accordance
with instructions on the proxy. Unless a contrary instruction is indicated,
proxies will be voted FOR the proposals to amend the Articles of
Incorporation and Bylaws of the Company, as described in more detail below.
Prior to the Special Meeting, the Company's Board of Directors will
appoint inspectors of election and tellers of vote. The inspectors and
tellers will tally all votes cast in person or by proxy for the proposed
amendments to the Articles of Incorporation and Bylaws. The presence in
person or by proxy of a majority of the outstanding shares of common stock
entitled to vote at the Special Meeting is necessary to constitute a quorum.
If a quorum is not present in person or represented by proxy, the
shareholders entitled to vote, present or represented by proxy,
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have the power to adjourn the Special Meeting from time to time, without
notice other than an announcement at the Special Meeting, until a quorum is
present or represented.
THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY RECOMMENDS THAT YOU VOTE
FOR THE PROPOSALS TO AMEND THE ARTICLES OF INCORPORATION AND BYLAWS OF THE
COMPANY.
A shareholder may revoke his or her proxy at any time prior to its
exercise by filing with the Secretary of the Company or the presiding officer
of the Special Meeting a written notice of revocation. A shareholder
attending the Special Meeting may revoke his or her proxy in person at the
Special Meeting at any time prior to its exercise and a shareholder's proxy
may be revoked or superseded by a duly executed proxy of later date.
The cost of soliciting proxies will be borne by the Company. In addition
to solicitation by mail, directors, officers and regular employees of the
Company may solicit proxies personally or by telephone or facsimile on behalf
of the Company without additional compensation for such services.
THE ENCLOSED PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE COMPANY and delegates discretionary authority with respect to additional
matters which properly come before the Special Meeting. Although the Board
of Directors is not aware of any additional matter, if other matters do
properly come before the Special Meeting, proxies will vote thereon in
accordance with their best judgment.
PROPOSED AMENDMENT TO THE COMPANY'S ARTICLES OF INCORPORATION AND BYLAWS
The Board of Directors has approved for submission to a vote of the
shareholders a proposal to amend the Company's Articles of Incorporation and
Bylaws in certain respects, and as described in more detail below. Appendix
A to this Proxy Statement contains the complete text of the proposed
Certificate of Amendment to the Articles of Incorporation, including the new
language to the Articles of Incorporation (which is underlined or in all
capital letters), and the current language which is to be deleted (which has
a line marked through it or is in brackets). Appendix B to this Proxy
Statement contains the complete text of the proposed Sixth Amendment to the
Bylaws of the Company, including the new language (which is underlined or in
all capital letters), and the current language which is to be deleted (which
has a line marked through it or is in brackets).
Background
In August 1995 the Company registered its common stock with the
Securities and Exchange Commission ("SEC") under Section 12(g) of the
Securities Exchange Act of 1934 (the "Exchange
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Act"). Issuers engaged in interstate commerce with total assets exceeding
$10 million ($5 million in 1995 at the time of the Company's registration)
and that have outstanding "securities" held by 500 or more shareholders are
required to register under Section 12(g) of the Exchange Act.
As an Exchange Act registered company, the Company is required to file a
number of reports and documents with the SEC, including, but not limited to,
quarterly reports on Form 10-Q, and annual reports on Form 10-K. Such SEC
filings, and the legal and accounting costs which are incurred in connection
therewith, as well as other obligations imposed under federal securities laws
(including obligations imposed under the Securities Act of 1933), impose a
significant cost, both in monetary cost and management time, upon the
Company. After further review by Company management and the Board of
Directors of the costs and benefits to the Company of such Exchange Act
registration, the Board of Directors directed counsel for the Company to
explore whether the Company could obtain a determination from the Staff of
the SEC that the Company's common stock did not constitute a "security" for
purposes of the federal securities laws.
After further legal review and consultation with the SEC Staff by legal
counsel for the Company, on June 27, 1996, the Company submitted a letter to
the SEC, requesting that the SEC Staff not recommend any action to the
Securities and Exchange Commission with respect to the issuance of its common
stock by the Company without registration under the Securities Act of 1933
and the deregistration by the Company of its common stock under the Exchange
Act. The letter requested from the SEC is commonly referred to as a
"No-Action Letter." Such No-Action Letter is based on the factual and legal
representations made to the SEC in the request letter, and merely expresses
the SEC Staff's position on any potential enforcement action, and does not
purport to express any legal conclusion on the questions presented. On July
12, 1996, the SEC Staff issued a No-Action Letter to the Company confirming
the Company's request, subject to the approval and execution of the proposed
amendments to the Articles of Incorporation and Bylaws.
In requesting the SEC No-Action letter, the Company focused on the
following factors which its believes supports its position that its common
stock is not a "security" for purposes of federal securities laws. These
factors include certain matters which are based on the Company's adoption of
the proposed amendments to the
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Articles of Incorporation and Bylaws.
(1) The stock can only be issued to licensed, practicing veterinarians,
who purchase it for the purpose of gaining membership in a veterinary buying
cooperative organization.
(2) The issuance and repurchase price of such stock is set at the same
fixed price, so that the shareholder may not receive more for such stock than
the initial price paid for it.
(3) No dividends have been paid on the stock, and are prohibited to be
paid under the Articles of Incorporation and Bylaws, as proposed to be
amended.
(4) The Articles of Incorporation, as proposed to be amended, prohibit
the sale or transfer (including pledge or hypothecation) of the stock, except
back to the Company at the initial purchase price.
(5) There is not, and never has been, any trading market in the
Company's stock.
(6) The rebates received by the shareholders of the Company are based
solely on the volume of purchases by the shareholder from the Company, and
not on the number of shares of stock held by a shareholder.
(7) Upon liquidation or dissolution of the Company, the shareholder is
entitled to receive back only the initial purchase price of the stock.
(8) The Company has the right to repurchase the stock at the initial
sale price if the holder should no longer be a licensed, practicing
veterinarian.
Upon the basis of these factors, and others described in the Company's
request letter, the Company has requested and received the affirmation by the
SEC Staff, through means of a No-Action Letter, that the Company's stock is
not a security as defined under the federal securities laws.
Proposed Amendments to the Articles of Incorporation
(1) Prohibition on Payment of Dividends. The first proposed revision to
the Articles of Incorporation is the addition of a sentence to Article III(A)
which states that the Company shall not pay any dividends on its capital
stock. The term "capital stock" is used in order to be consistent with the
existing language in Article III, and refers to the "common stock" which is
issued to each shareholder of the Company. No dividends have ever been paid
on the common stock of the Company, and none are anticipated to be paid. The
Board of Directors considers this additional language to be consistent with
the past and current policies of the Company, and that this amendment
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formalizes such policies in the Company's Articles of Incorporation. This
prohibition does not affect the issuance of rebates to shareholders, which
are based on the percentage of purchases made by such shareholders.
(2) Repurchase of Stock by the Company. The second proposed revision is
the addition of a sentence to Article III(C) which states that in the event a
shareholder is no longer qualified to be a shareholder under Article III(B)
(i.e., is no longer a licensed, practicing veterinarian), the Company has the
right to purchase the stock at the initial sale price paid by the
shareholder.
The class of persons or entities that are eligible to become
shareholders of the Company is limited by the qualifications of Article
III(B). Those qualifications which are imposed on shareholders under Article
III(B) include the requirement that the shareholder be a licensed, practicing
veterinarian (or business entity comprised of veterinarians). Each
shareholder is required to purchase one share of stock (and one share only)
for a designated purchase price. The initial organizational shares were
issued by the Company for $2,000 per share. But since such time (August
1982), shares have been sold for $3,000 per share. The proposed amendment
language is intended to make clear that any person or entity which is no
longer qualified to be a shareholder of the Company under Article III(B) must
sell his share of stock back to the Company at the price originally paid for
such share of stock. As a result such shareholder cannot realize any gain or
profit from such sale of the share of stock.
(3) Fixing a Maximum Price Per Share of Stock. The third proposed
revision is the addition of language to the first sentence of Article III(D)
which states that a share of stock of the Company may be sold at a price of
$3,000 per share, or such lesser amount as determined by the Board of
Directors in its discretion. The addition of this language fixes in the
Articles of Incorporation a maximum price per share in connection with the
sale by the Company, although the price per share may be lower, if so
determined by the Board of Directors in its discretion. As noted above, the
Company has sold its shares at a price of $3,000 per share since August 1982.
There is currently no intention by the Board of Directors to change the
price from $3,000 per share.
(4) Restrictions on the Sale or Other Transfer of Stock. The fourth
proposed revision prohibits a shareholder from selling, assigning, or
otherwise transferring (including through a pledge or hypothecation) the
stock of the Company except in compliance with the provisions of Article III.
Under the prior language of Article III, which is being deleted, any
shareholder desiring to sell the share of stock was required to notify the
Board of Directors, which then had an option for 60 days to repurchase such
share of stock at the price the shareholder paid for such share of stock.
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Under the amended language of Article III(D), in the event a
shareholder desires to sell such shareholder's share of stock, the
shareholder must give written notice to the Company, and the Company is
required to repurchase such share of stock (subject to any legal restrictions
on such repurchase) within 90 days of receipt of such notice. The repurchase
price remains the price the selling shareholder paid for such share of stock.
In the event of the death of a shareholder, the Company is also required to
repurchase the shareholder's share of stock at the price the deceased
shareholder paid for such share of stock.
Transfers of stock by shareholders to third parties in the past have
been very limited in number and have been at the same price such shareholder
paid for the share of stock. The Company does not believe this proposed
amendment will result in any material change to shareholders from the current
policies and procedures of the Company. In the event, for example, of the
sale or other transfer by a veterinarian shareholder of his or her practice,
the shareholder would be required to sell the share of stock to the Company,
but the Company could then issue a new share of stock to the transferee of
the veterinarian practice, assuming that such transferee met the Company's
qualifying standards.
(5) Provisions Governing Liquidation or Dissolution of the Company.
The final proposed revision to the Company's Articles of Incorporation is the
addition of a new Article X which addresses the Company's obligations upon
liquidation or dissolution of the Company (an event which the Company
currently believes is very unlikely). The Company's Articles of
Incorporation and Bylaws are currently silent with respect to liquidation or
dissolution, and under Missouri Corporation Law, the shareholders of the
Company would be entitled to share on a pro rata basis in any funds remaining
after payment of all liabilities of the Company in such event.
Under the language of proposed Article X, in the event of the
liquidation or dissolution of the Company, the Company must first pay all
debts, liabilities and obligations legally owed by it. After payment of such
obligations, the Company would then distribute to each shareholder an amount
equal to the amount paid by such shareholder for his or her share of stock.
In the event there would be any additional funds remaining after such
distribution to shareholders, such excess funds would be distributed as
follows. Each shareholder would be entitled to designate to the Company that
such shareholder's pro rata portion of such funds be distributed by the
Company to one of three entities: (1) the American Veterinary Medical
Association; (2) the state Veterinary Medical Association selected by the
shareholder; or (3) the College of Veterinary Medicine selected by the
shareholder.
Under proposed Article X, no shareholder would receive any gain or
"profit" from the ownership of the share of Company stock
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in the event of the liquidation or dissolution of the Company, but would
receive, at most, an amount equal to the amount paid by such shareholder for
the share of stock. In the event the Company was insolvent, or had legal
obligations exceeding the Company's assets, the shareholder would receive no
distribution of funds in connection with the ownership of the share of
Company stock.
Required Vote and Recommendation
Approval of the above-described amendments to the Articles of
Incorporation requires a two-thirds vote of the shares of the Company at a
meeting in which a majority of the shares are represented. Proxies which are
submitted to the Company but on which the shareholder abstains from voting on
this issue (Proposal 1 on the Proxy Card), will count towards the necessary
quorum, but will have the same effect as a negative vote on the proposal to
amend the Articles of Incorporation.
For the reasons set forth above, the Board of Directors believes that
the adoption of the proposed amendments to the Articles of Incorporation is
in the best interests of the Company and its shareholders and unanimously
recommends that shareholders vote "FOR" the proposal which is Proposal 1 on
the Company's Proxy Card.
Proposed Amendments to the Company's Bylaws
The purpose for the proposed amendments to the Company's Bylaws (as
provided for by the Sixth Amendment to the Bylaws as shown at Appendix B) is
to make the Bylaws consistent with the amendments proposed to the Articles of
Incorporation. In this regard, two sections of the Bylaws are proposed to be
amended, Sections 4 and 5 of Article VI.
(1) Prohibition on the Payment of Dividends. The first proposed
revision to the Company's Bylaws is the replacement in its entirety of
Article VI, Section 5 of the Bylaws. This section currently provides that
the Board of Directors of the Company may declare dividends as and when
deemed expedient, provided that the Board in its discretion is given
authority to set apart funds for working capital or contingency reserves.
The new language proposed for this section prohibits any payment of dividends
by the Company on its common stock, consistent with the proposed amendment to
Article III(A) discussed above. As noted above, the Company has never paid
any dividends on its common stock, and has no intention to do so, and thus
this proposed amendment is consistent with the past and current practices and
policies of the Company. The proposed amendment also adds a statement that
any payment to shareholder upon the liquidation or dissolution of the Company
is to be done in accordance with the Company's Articles of Incorporation. The
Bylaws are currently silent as to any distributions to shareholders upon
liquidation or dissolution of the Company.
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(2) Deletion of Reference to Dividends in Closing of Transfer Books.
The second proposed revision to the Company's Bylaws is the deletion of
various references to the determination of the record date in connection with
the payment of any dividends by the Company. Since the Company will be
prohibited from paying any dividends if the proposed amendments to the
Articles of Incorporation and Bylaws are passed, these references are deleted
for consistency purposes, and to avoid any implication that payment of
dividends is permissible.
Required Vote and Recommendation
Approval of the above-described proposed amendments to the Company's
Bylaws requires a majority vote of the shareholders at a meeting at which a
quorum (which is a majority of the total number of shares issued and
outstanding) is present. Proxies which are submitted to the Company but on
which the shareholder abstains from voting on this issue (Proposal 2 on the
Proxy Card), will count towards the necessary quorum, but will have the same
effect as a negative vote on the proposed amendments to the Bylaws.
For the reasons set forth above, the Board of Directors believes that
adoption of the proposed amendments to the Bylaws of the Company is in the
best interests of the Company and its shareholders and unanimously recommends
that shareholders vote "FOR" the proposal which is Proposal 2 on the Proxy
Card.
Effect of the Amendments to the Company's Articles of Incorporation and
Bylaws
In addition to the specific effects of the proposed amendments to the
Company's Articles of Incorporation and Bylaws described above, the Company
also intends to deregister its common stock under the Exchange Act after the
adoption of the proposed Amendments to the Articles of Incorporation and
Bylaws. The Company will no longer be required to file Exchange Act reports
with the SEC as a result of such deregistration, including quarterly reports
on Form 10-Q and annual reports on Form 10-K. In addition, the Company will
not be required to file its proxy statements with the SEC, or comply with the
SEC proxy rules in connection with its annual or special meetings of
shareholders. As a result, although the Company intends to continue to make
available annual audited financial statements to its shareholders, the
Company will not be required to file, and shareholders will not have access
to, periodic SEC filing documents which may provide helpful information about
the Company to the shareholders.
OWNERSHIP OF SECURITIES BY DIRECTORS AND EXECUTIVE OFFICERS
The following table identifies the members of the Board of Directors of
the Company. Each director is also a shareholder of
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the Company who, directly or indirectly through his veterinary practice
group, owns one share of stock in the Company. Since each shareholder of the
Company owns only one share of stock, there are no shareholders owning 5% or
more of the Company's common stock.
Director's Name, Address and District Term Expires
Dr. M.K. Moore, Chairman of the Board 1997
Kimo, Inc.
R.R. #1, Box 13
Superior, Nebraska 68978
District 1
Dr. Robert Hertzog (Chairman Emeritus) 1996
Lee's Summit Animal Clinic
411 S. Market
Lee's Summit, Missouri 64063
Dr. Daryl Olsen, Vice Chairman 1998
Audubon-Manning Vet Clinic
1786-190th St.
Audubon, Iowa 50025
District 2
Dr. Tony Forshey, Secretary 1997
Northwest Veterinary Hospital
3491 SH 108 P.O. Box 321
Wauseon, Ohio 43567
District 6
Dr. Matt Caldwell 1996
Milledgeville Veterinary Clinic
Box 100, Rt 88
Milledgeville, Illinois 61051
District 3
Dr. Charles Koenig 1996
Limerick Veterinary Hospital
345 West Ridge Pk
Limerick, Pennsylvania 19468
District 7
Dr. James S. Reid 1998
Vienna Animal Hospital, Inc.
531 Maple Ave. West
Vienna, Virginia 22180
District 8
Dr. Dick Taylor 1999
Howard County Vet Service, P.C.
293 Hwy 5 & 240
Fayette, Missouri 65248
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District 4
Dr. Pete Sherlock 1999
Washington Vet Clinic
RR 2
Washington, KS 66968
District 5
Dr. Lionel Reilly is the President and Chief Executive Officer of the
Company, a position which he has held since January 1, 1983. Neither Dr.
Reilly, nor any management officers or employees of the Company own any
shares of the Company.
SHAREHOLDER PROPOSAL
The Company currently expects to hold its next meeting of shareholders
for the election of directors no later than mid-December 1996. In order for
any shareholder proposal to be included as an item of business for this
meeting of shareholders of the Company, it must be received at the principal
executive offices of the Company no later than October 15, 1996.
OTHER BUSINESS
The Board of Directors does not know of any other matter to
be presented at the Special Meeting, but should any other matter
properly come before the Special Meeting or any adjournment
thereof, Proxies will vote on such matter in accordance with
their best judgment.
BY ORDER OF THE BOARD OF DIRECTORS
Dr. Lionel Reilly, President
July 25, 1996
TO BE CERTAIN THAT YOUR SHARES WILL BE REPRESENTED AT THE SPECIAL MEETING OF
SHAREHOLDERS, WE URGE YOU TO SIGN AND RETURN THE ENCLOSED PROXY PROMPTLY,
WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING IN PERSON.
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APPENDIX A
CERTIFICATE OF AMENDMENT
OF
ARTICLES OF INCORPORATION
OF
PROFESSIONAL VETERINARY PRODUCTS, LTD.
Pursuant to the provisions of the corporation laws of the State of
Missouri, Section 351.085, the undersigned Corporation does hereby make the
following Certificate of Amendment by the hands of its duly authorized
officers:
FIRST: The name of the Corporation is Professional Veterinary Products,
Ltd.
SECOND: The shareholders of the Corporation duly adopted the following
resolutions by at least a 2/3 vote at a properly held and constituted
shareholder's meeting at which a quorum of the shares were present on the
17th day of August, 1996, in Kansas City, Missouri.
RESOLVED, that Article III of the Articles of Incorporation be amended to
read in its entirety as follows: [Underlined text or text in all capital
letters is new language. Text in brackets is to be deleted.]
(A) The aggregate number, class and par value, if any, of shares which
the Corporation shall have authority to issue shall be: The total authorized
capital stock of the Corporation shall be 30,000, and the capital stock shall
have no par value. THE CORPORATION SHALL NOT PAY ANY DIVIDENDS ON ITS
CAPITAL STOCK.
(B) No one may own stock in the Corporation other than a licensed,
practicing veterinarian (or business entity comprised of veterinarians such
as a partnership or a corporation) the majority of whose practice is within a
50-mile practice area. Stock shall not be issued to a veterinarian who does
not have a reputation of a high standard for morals, ethics, and excellence
in his practice. Further, no solo practitioner nor practice with multiple
veterinarians may own more than one (1) share of the Corporation's stock.
Veterinarians involved in a multiple veterinary practice may not own stock if
the practice itself already owns one (1) share of stock or if any of that
veterinarian's fellow practitioners own a share of stock.
(C) If a shareholder owes money to the Corporation and fails to make
payments by the due date, the Board of Directors shall have the option to
repurchase the stock owned by the shareholder at the price the shareholder
paid for the stock. This option shall extend for a period of six months
after due
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date of the debt. IN THE EVENT A SHAREHOLDER IS NO LONGER QUALIFIED TO BE A
SHAREHOLDER UNDER ARTICLE III(B) ABOVE, THEN THE CORPORATION SHALL REPURCHASE
THE STOCK OWNED BY SUCH SHAREHOLDER, AND SUCH SHAREHOLDER SHALL SELL SUCH
STOCK TO THE CORPORATION, AT THE PRICE THE SHAREHOLDER PAID FOR SUCH STOCK.
(D) The Corporation shall sell a share of stock only to a qualified
veterinarian or practice after the approval of the Board of Directors of the
Corporation, AT A PRICE OF $3,000 PER SHARE, OR SUCH LESSER AMOUNT AS
DETERMINED BY THE BOARD OF DIRECTORS IN ITS DISCRETION.
[Any shareholder desiring to sell stock must notify the Board of Directors of
the Corporation of the intended transferee. The Board will then have an option
for 60 days to repurchase the shareholder's stock at the price the shareholder
paid for the stock.] NO SHAREHOLDER OF THE CORPORATION MAY SELL, ASSIGN, OR
OTHERWISE TRANSFER (INCLUDING THROUGH ANY PLEDGE OR HYPOTHECATION) ANY STOCK
OF THE CORPORATION HELD BY SUCH SHAREHOLDER EXCEPT IN COMPLIANCE WITH THIS
ARTICLE III. IN THE EVENT A SHAREHOLDER DESIRES TO SELL SUCH SHAREHOLDER'S
SHARE OF STOCK, SUCH SHAREHOLDER SHALL GIVE WRITTEN NOTICE OF PROPOSED SALE
TO THE CORPORATION, AND THE CORPORATION SHALL, SUBJECT TO ANY LEGAL
RESTRICTIONS ON SUCH PURCHASE, REPURCHASE SUCH SHARE OF STOCK FROM THE
SELLING SHAREHOLDER WITHIN NINETY DAYS OF RECEIPT OF SUCH WRITTEN NOTICE OF
SALE AT THE PRICE THE SELLING SHAREHOLDER PAID FOR SUCH SHARE OF STOCK. IN
THE EVENT OF THE DEATH OF A SHAREHOLDER, THE CORPORATION SHALL REPURCHASE
SUCH SHARE OF STOCK FROM THE LEGAL REPRESENTATIVE OF THE ESTATE OF THE
DECEASED SHAREHOLDER, AND SUCH LEGAL REPRESENTATIVE SHALL SELL SUCH SHARE OF
STOCK TO THE CORPORATION AT THE PRICE THE DECEASED SHAREHOLDER PAID FOR SUCH
SHARE OF STOCK.
RESOLVED, that a new Article X be added to the Articles of Incorporation
of the Corporation as follows:
Upon the liquidation or dissolution of the Corporation, in the event the
Corporation has excess funds or assets after payment of all debts,
liabilities and obligations legally owed by the Corporation, such funds or
assets shall be distributed first to the shareholders of the Corporation
provided that each shareholder shall be paid no more than the amount such
shareholder paid for the share of stock held by such shareholder. Any funds
or assets remaining after the distribution to shareholders shall be
distributed as follows: Each shareholder shall be entitled to designate to
the Corporation that any excess funds, determined on a pro rata per
shareholder basis, shall be distributed by the Corporation to either (i) the
American Veterinary Medical Association, (ii) the state Veterinary Medical
Association selected by the shareholder, or (iii) the College of Veterinary
Medicine selected by the shareholder.
FURTHER RESOLVED, that since the Board of Directors and Shareholders of
the Corporation have adopted the aforesaid
<PAGE>
Amendments, the Corporation is hereby authorized to make by the hands of its
President and Secretary a Certificate setting forth the Amendments and cause
the same to be filed pursuant to the corporate laws of the State of Missouri.
THIRD: The total number of outstanding shares having voting power of
the Corporation is 870 and the total number of votes entitled to be cast by
the holders of all of the outstanding shares is 870. Of the 870 shares
entitled to vote, , representing over 2/3 of those voting, voted for these
Amendments, and voted against these Amendments.
Dated this day of , 1996.
PROFESSIONAL VETERINARY PRODUCTS,LTD.
By:
Dr. Lionel Reilly, President
ATTEST:
Dr. Tony Forshey, Secretary
[Affix Seal]
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APPENDIX B
SIXTH AMENDMENT TO
THE BYLAWS OF
PROFESSIONAL VETERINARY PRODUCTS, LTD.
The following Amendments to the Bylaws of Professional Veterinary Products,
Ltd. were made at a Special Meeting of Shareholders of the Corporation held
on August 17, 1996, at Kansas City, Missouri:
RESOLVED, that Section 5 of Article VI is hereby amended in its entirety
to state as follows:
[Deleted language is crossed out or in brackets; new language is underlined or
in all capital letters.]
Section 5. [DIVIDENDS. Subject to the provisions of the Articles of
Incorporation, if any, the directors may declare dividends upon the capital
stock of the corporation as and when they deem expedient. Before declaring
any dividend there may be set apart out of any funds of the corporation
available for dividends such sum or sums as the directors from time to time in
their discretion think proper for working capital or as a reserve fund to meet
contingencies or for equalizing dividends or for such other purposes as the
directors shall think conducive to the interest of the corporation.]
NO PAYMENT OF DIVIDENDS. THE CORPORATION SHALL NOT PAY ANY DIVIDENDS ON ITS
CAPITAL STOCK. ANY PAYMENT TO SHAREHOLDERS FROM THE CORPORATION UPON
LIQUIDATION OR DISSOLUTION OF THE CORPORATION SHALL BE IN ACCORDANCE WITH THE
CORPORATION'S ARTICLES OF INCORPORATION.
RESOLVED, that Section 4 of Article VI is hereby amended in its entirety
to state as follows: [Deleted language is crossed out or in brackets.]
Section 4. CLOSING OF TRANSFER BOOKS. The Board of Directors shall
have power to close the stock transfer books of the Corporation for a period
not exceeding sixty (60) days preceding the date of any meeting of
stockholders [or the date for the payment of any dividend] or the date for
the allotment of rights or the date when any change or conversion or exchange
of capital stock shall go into effect, provided, however, that in lieu of
closing the stock transfer books as aforesaid, the Board of Directors may fix
in advance a date, not exceeding sixty (60) days preceding the date of any
meeting of stockholders [or the date for the payment of any dividend], or the
date for the allotment of rights, or the date when any change or conversion
of or exchange of capital stock shall go into effect, as a record
<PAGE>
date for the determination of the stockholders entitled to receive
[payment of any such dividends, or to] any such allotment of rights, or to
exercise the rights in respect of any such change, conversion, or exchange of
capital stock, and in such cases such stockholders only as shall be
stockholders of record on the date so fixed shall be entitled to such notice
of, and to vote at, such meeting, [or to receive payment of such dividends],
or to receive such allotment of rights, or to exercise such rights, as the
case may be, notwithstanding any transfer of any stock on the books of the
corporation after any such record date fixed as aforesaid.
No further Amendments were made to the Bylaws at the time of the Special
Meeting of the Shareholders held on August 17, 1996 at Kansas City, Missouri.
I, Dr. Tony Forshey, being the Secretary of Professional Veterinary
Products, Ltd., do hereby certify that I am Secretary of the Corporation and
that these Amendments to the Bylaws were adopted at a Special Meeting of the
Shareholders held on August 17, 1996, at Kansas City, Missouri.
WITNESS MY HAND and corporation seal this day of , 1996.
_________________________________
Dr. Tony Forshey, Secretary
(Affix seal)
<PAGE>
PROXY
IMPORTANT - PLEASE SIGN AND RETURN IMMEDIATELY
PROFESSIONAL VETERINARY PRODUCTS, LTD.
10100 J Street
Omaha, Nebraska 68127
This Proxy is solicited on behalf of the Board of Directors
for the Special Meeting of Shareholders
The undersigned shareholder of Professional Veterinary Products, Ltd.
(the "Company") hereby constitutes and appoints Dr. Daryl Olsen, Dr. Pete
Sherlock and Dr. James Reid, and each or any of them, with full power of
substitution, as Proxies of the undersigned to vote and otherwise act in
respect of the share of common stock of the Company, which the undersigned
may be entitled to vote at the Special Meeting of shareholders of the Company
to be held on Saturday, August 17, 1996, at 8:00 a.m., Central Daylight Time,
at Bartle Hall Convention Center, 301 West 13th, Kansas City, Missouri, or
any adjournment thereof, with all the rights and powers the undersigned would
possess if personally present. Proxies are instructed to vote as specified on
the reverse side.
Continued on reverse side
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING:
1. AMENDMENT TO THE COMPANY'S ARTICLES OF INCORPORATION;
Proposal to amend Article III of the Company's Articles of
Incorporation, and add a new Article X to the Articles of
Incorporation, as provided in the Company's Proxy Statement.
FOR AGAINST ABSTAIN
/ / / / / /
2. AMENDMENT TO THE COMPANY'S BYLAWS; Proposal to amend Article VI of the
Company's Bylaws, as provided in the Company's Proxy Statement.
FOR AGAINST ABSTAIN
/ / / / / /
3. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH
BUSINESS AS MAY PROPERLY COME BEFORE THE SPECIAL MEETING, INCLUDING BUT NOT
LIMITED TO, MATTERS PRESENTED AT THE SPECIAL MEETING WHICH WERE NOT KNOWN TO
THE BOARD OF DIRECTORS A REASONABLE TIME BEFORE THE SOLICITATION OF PROXIES.
IF NO DIRECTION IS INDICATED, THIS PROXY WILL BE VOTED FOR ALL PROPOSALS
ABOVE.
Please sign exactly as name appears hereon. When signing as attorney,
personal representative, trustee, or guardian, please give full title. All
joint owners and trustees should sign. If the signer is a corporation, please
sign in full corporate name, by duly authorized officer.
______________________________________
Signature (no witness required)
______________________________________
Signature
Dated:________________________________
Please Sign and Date Here and Return Promptly
