SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
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 Rule 140-11(c) or Rule 240-2
NEW WORLD COFFEE - MANHATTAN BAGEL, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
1) Title of each class of securities to which transaction applies:
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):
<PAGE>
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>
NEW WORLD COFFEE - MANHATTAN BAGEL, INC.
246 Industrial Way West
Eatontown, New Jersey 07724
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The annual meeting of the stockholders of New World Coffee - Manhattan
Bagel, Inc, a Delaware corporation, will be held on August 17, 1999 commencing
at 9:30 a.m. at the Company's offices located at 246 Industrial Way West,
Eatontown, New Jersey 07724. The meeting is called for the following purposes:
1. Election of directors;
2. Ratification of the selection of Arthur Andersen LLP as the Company's
independent auditors for the fiscal year ending December 26, 1999;
3. Approval of a Restated Certificate of Incorporation which provides for
(a) a one for two common stock combination (b) a staggered Board of Directors
and (c) various procedural provisions related to the operation of the Board of
Directors and stockholders voting.
4. To transact such other business as may properly come before the annual
meeting or any adjournments thereof.
Stockholders of record at the close of business on July 1, 1999 are
entitled to notice of, and to vote at the Annual Meeting of Stockholders.
Sending in your proxy will not prevent your attending and voting at the meeting
in person should you later decide to do so.
The accompanying form of proxy is solicited by the Board of Directors of
the Company. Reference is made to the enclosed proxy statement for further
information with respect to the business to be transacted at the Annual Meeting
of Stockholders.
<PAGE>
If you do not expect to attend the Annual Meeting of Stockholders in
person, please sign and date the enclosed proxy and mail it promptly in the
enclosed envelope.
By order of the Board of Directors.
Jerold E. Novack, Secretary
DATED: July 12, 1999
<PAGE>
NEW WORLD COFFEE - MANHATTAN BAGEL, INC.
246 Industrial Way West
Eatontown, New Jersey 07724
PROXY STATEMENT
July 12, 1999
This proxy statement is being mailed to stockholders of record as of July
1, 1999 and is furnished in connection with the solicitation of proxies by the
Board of Directors of New World Coffee - Manhattan Bagel, Inc. (the "Company")
in connection with the Annual Meeting of Stockholders (the "Annual Meeting") of
the Company to be held on August 17, 1999, commencing at 9:30 a.m. at the
offices of the Company located at 246 Industrial Way West, Eatontown, New Jersey
07724. Proxies will be voted in accordance with directions specified thereon and
otherwise in accordance with the judgment of the persons designated as proxies.
Any proxy on which no direction is specified will be voted in favor of the
action described in the proxy statement.
A proxy in the enclosed form may be revoked at any time, prior to it being
voted at the Annual Meeting by sending a subsequently dated proxy or by giving
written notice to the Company, in each case to the attention of Jerold E.
Novack, Secretary, at the address set forth above. Stockholders who attend the
Special Meeting may withdraw their proxies at any time before their shares are
voted by notifying the Company at the meeting and voting their shares in person.
The expense of the solicitation of proxies for the Annual Meeting,
including the cost of preparing, assembling and mailing the notice, proxy and
proxy statement, the handling and tabulation of proxies received and the charges
of brokerage houses and other institutions, nominees or fiduciaries in
forwarding such documents of the proxy material to beneficial owners, will be
paid by the Company. In addition to the mailing of the proxy material, such
solicitation may be made in person or by telephone and telegraph by directors,
officers or regular employees of the Company. It is estimated that the total
cost of proxy solicitations by the Company will not exceed $7,500.
The matters to be considered at the Annual Meeting include: (1) election of
directors; (2) ratification of Arthur Andersen LLP as the Company's independent
auditors for the fiscal year ending December 26, 1999; (3) approval of a
Restated Certificate of Incorporation which provides for (a) a one for two
common stock combination (b) a staggered Board of Directors and (c) various
procedural provisions related to the operation of the Board of Directors and
stockholder voting; and (4) to transact such other business as may properly come
before the Annual Meeting or any adjournments thereof. The Company is aware of
no other matters to be presented for action at the Annual Meeting.
<PAGE>
OUTSTANDING VOTING SECURITIES AND VOTING RIGHTS
Holders of Common Stock at the close of business on July 1, 1999 will be
entitled to vote. Each share of Common Stock entitles the holder to one (1) vote
on each matter to be voted upon. On the record date there were 20,485,047
outstanding shares of Common Stock (excluding any treasury shares), which is the
only class of voting stock outstanding.
MATTERS TO BE VOTED UPON
1. ELECTION OF DIRECTORS
The Company's Board of Directors presently consists of five (5) members
with the term of office of the current directors scheduled to expire at the
Annual Meeting or until the election and qualification of their respective
successors.
All directors are to be elected as directors by a plurality of the votes
cast at the Annual Meeting. Unless otherwise directed, the persons named in the
accompanying Proxy have advised management that it is their intention to vote
for the election of directors set forth in this proxy statement.
The following table sets forth certain information with respect to the
nominees for the election of directors. The "Year Term Expires" is premised upon
the approval of the Restated Certificate of Incorporation and the institution of
a staggered Board of Directors.
<TABLE>
<CAPTION>
Year Term Expires
Name Age Position if Elected
<S> <C> <C> <C>
Ramin Kamfar 35 Chairman of the Board of Directors; 2002
Chief Executive Officer
Karen Hogan 37 Director 2002
Keith F. Barket 37 Director 2001
Edward McCabe 61 Director 2001
Leonard Tannenbaum 27 Director 2000
</TABLE>
<PAGE>
Officers
The officers of the Company and their ages as of July 12, 1999 are as
follows:
<TABLE>
<CAPTION>
Name Age Position with the Company
<S> <C> <C>
R. Ramin Kamfar 35 Chairman and Chief Executive Officer and Director
Sanford Nacht 66 President and Chief Operating Officer
Jerold E. Novack 43 Chief Financial Officer and Secretary
Jason Gennusa 40 Vice President - Manufacturing
Andrew Gennusa 33 Vice President - Construction
Michael Ryan 43 Vice President - Franchise Services
Rocco Fiorentino 43 Vice President - Business Development
Barry Levine 49 Vice President - Coffee
Robert Williams 49 Vice President - Coffee
</TABLE>
Mr. Kamfar has served as a Director since founding the Company and as
Chairman and Chief Executive Office since December 1998. From May 1996 to
December 1998, he also served as President of the Company. Between October 1993
and May 1996, Mr. Kamfar served in a number of capacities, including
Co-President and Co-Chief Executive Officer of the Company. Between 1988 and
1993, he worked in the Investment Banking Division of Lehman Brothers Inc., New
York, NY, most recently as a Vice President in the firm's Private Placement
Group. Prior to Lehman Brothers, Mr. Kamfar worked at First Growth (U.K.) Ltd.
where he gained experience in real estate finance and development. Mr. Kamfar
has a B.S. degree with distinction in Finance from the University of Maryland
and an M.B.A. degree with distinction in Finance from The Wharton School at the
University of Pennsylvania.
Mr. Nacht has served as President and Chief Operating Officer of the
Company since December 1998. From September 1997 to December 1998, Mr. Nacht, as
President of Sterling Management Group, LLC, Princeton, NJ, served Manhattan
Bagel Company, Inc. as a management and operations consultant. From 1995 to
1997, Mr. Nacht was employed by York Management Services, Inc., a private
investment and turnaround management company located in Somerset, NJ, in various
positions including President and Chief Executive Officer. Prior to that Mr.
Nacht was Chief Executive Officer for Gordon Construction, New York, NY. Mr.
Nacht has an undergraduate degree from the Wharton School at the University of
Pennsylvania and an M.B.A. degree from Pace University.
Mr. Novack joined the Company as Vice President-Finance in June 1994 and
has served as Chief Financial Officer since January 1999. From 1991 to 1994, he
served as Vice President/Controller of The Outdoor Furniture Store, Inc.,
Woodbridge, NJ a specialty retail chain. From 1988 to 1991, he served as
Controller for Richmond Ceramic Tile, Inc., New York, NY a retailer and
distributor of ceramic tile. From 1985 to 1988, Mr. Novack served as Assistant
Controller for Brooks Fashion Stores, Inc., New York, NY a specialty retail
chain. Prior to 1985, Mr. Novack served as Import Division Controller for
Mercantile Stores Company, Inc., New York, NY a department store chain. Mr.
Novack has a B.S. degree in Accounting from Brooklyn College, City University of
New York.
<PAGE>
Mr. Jason Gennusa has served as Vice President - Manufacturing of the
Company since November 1998. Mr. Gennusa is a co-founder of Manhattan Bagel
Company, Inc. and served as President of that company since 1987.
Mr. Andrew Gennusa has served as Vice President - Construction of the
Company since November 1998. Mr. Gennusa is a co-founder of Manhattan Bagel
Company, Inc. and served as a Vice President of that company since 1987.
Mr. Ryan has served as Vice President - Franchise Services of the Company
since November 1998. From 1995 to November 1998, Mr. Ryan served initially as
Director of Operations, and subsequently as Vice President - Franchise Services
of Manhattan Bagel Company, Inc. From 1994 to 1995, he served as Director of
Operations for T.J. Cinnamons, Secaucus, New Jersey. From 1973 to 1994, he
served in various capacities at Dunkin Donuts, most recently as Development
Manager.
Mr. Fiorentino has served as Vice President - Development of the Company
since November 1998. From May 1996 to November 1998, Mr. Fiorentino served as
Director of Business Development of Manhattan Bagel Company, Inc. From 1985 to
1996, he served as President of Specialty Bakeries, Inc., Moorestown, NJ, a
franchisor of Bagel Builders, which he co-founded and subsequently sold to
Manhattan Bagel Company, Inc.
Mr. Levine joined the Company as Vice President-Coffee in October 1996.
From 1985 to 1996, he served as co-founder and co-Chief Executive Officer of
Willoughby's, Branford, CT where he jointly directed coffee sourcing and
roasting, site selection, store design, operations, strategic planning and
development. From 1980 to 1987 he co-founded and operated New York Bread
Express, New York, NY a wholesale baked goods distributor. Prior to that time,
Mr. Levine held various positions in the publishing industry.
Mr. Williams joined the Company as Vice President-Coffee in October 1996.
From 1985 to 1996, he served as co-founder and co-Chief Executive Officer of
Willoughby's, Branford, CT where he jointly directed coffee sourcing and
roasting, site selection, store design, operations, strategic planning and
development. From 1980 to 1987 he co-founded and operated New York Bread
Express, New York, NY a wholesale baked goods distributor. Prior to that time
Mr. Williams held various positions in the publishing industry.
Directors
Ms. Hogan has served as a director of the Company since December 1997. From
1992 to 1997, Ms. Hogan served as Senior Vice President, Preferred Stock Product
Management at Lehman Brothers, Inc. From 1985 to 1992, Ms. Hogan served as Vice
President, New Product Development Group at Lehman Brothers, Inc. New York, NY.
Ms Hogan has a B.S. degree from the State University of New York at Albany and
an M.B.A. degree in Finance and Economics from Princeton University.
Mr. Barket has served as a director of the Company since June 1995. Mr.
Barket is the Managing Director - Real Estate for Angelo, Gordon & Co., New
York, NY. From 1988 to 1997, Mr. Barket was a Managing Director of Amerimar
Enterprises Inc., New York, NY, a real estate investment and development company
during which time he was involved in a variety of office, retail, residential
and hotel projects. From 1984 to 1986, he worked as a senior tax accountant with
Arthur Andersen & Co., New York, NY. Mr. Barket has B.A. degree from Georgetown
University and an M.B.A. degree from The Wharton School at the University of
Pennsylvania.
<PAGE>
Mr. McCabe has served as director of the Company since February 1997. Mr.
McCabe is Chief Executive Officer of Powerhouse Partnership, Inc., New York, NY.
From 1991 to 1998, Mr. McCabe was Chief Executive Office of McCabe & Company,
New York, NY, an advertising and communications company. From 1967 to 1986 he
served in various capacities, most recently as President and Worldwide Creative
Director, at Scali, McCabe, Sloves, Inc., New York, NY, an advertising agency he
co-founded.
Mr. Tannenbaum, C.F.A., has served as a director of the Company since March
1999. Mr. Tannenbaum is currently a managing partner at MYFM Capital, LLC which
he founded in 1999. From April 1997 to 1999, he was a principal with LAR
Management, Inc., which manages a $50,000,000 hedge fund. From June 1996 to
April 1997, he was an associate with Pilgrim Baxter, a mutual fund manager. From
1994 to 1996, he was an Assistant Vice President and analyst in the Small
Company Group at Merrill Lynch. Mr. Tannenbaum is also a director of Westower,
Inc. and General Devices, Inc., each a publicly traded company. Mr. Tannenbaum
is the designee of BET Associates, L.P. Mr. Tannenbaum is a graduate of the
Wharton School of The University of Pennsylvania, where he received a BS in
Strategic Management and an MBA in Finance.
There are no family relationships between any of the directors or executive
officers of the Company except that Jason Gennusa and Andrew Gennusa are
brothers.
Employment Contracts
As of February 1999, the Company approved a new employment agreement with
Mr. Kamfar, the Company's Chairman and Chief Executive Officer. The agreement
expires on December 31, 2000 but is automatically renewed for additional
one-year periods commencing each January 1 unless either party gives written
notice to the other of its desire not to renew such term, which notice must be
given no later than ninety (90) days prior to the end of each term on any such
renewal. The agreement provides for a compensation package of $175,000 per year,
and an annual performance bonus of between 0% and 50% of the base salary for
calendar year 1999 and any subsequent calendar year. Each bonus is based on the
attainment of certain corporate and individual goals. Pursuant to the agreement,
Mr. Kamfar has agreed to maintain the confidentiality of any confidential or
proprietary information of the Company.
In the event that the Company terminates Mr. Kamfar's employment upon a
change in control or terminates Mr. Kamfar's employment other than for cause, he
will be paid severance compensation equal to two times his annual base salary
(at the rate payable at the time of such termination) plus an amount equal to
the greater of two times the amount of his bonus for the calendar year preceding
such termination or 25% of his base salary. For a period of one year following
Mr. Kamfar's voluntary termination or termination for cause, Mr. Kamfar cannot
perform services for, have an equity interest (except for an interest of 10% or
less in an entity whose securities are listed on a national securities exchange)
in any business (other than the Company) or participate in the financing,
operation, management or control of, any firm, corporation or business (other
than the Company) that engages in the marketing or sale of specialty coffee as
its principal business.
<PAGE>
Mr. Kamfar's employment agreement defines a "change of control" as: 1) the
acquisition of more than 40% of the voting stock of the Company by a single
person or group; 2) a change in the majority of the Board of Directors as a
result of a cash tender offer, merger, sale of assets or contested election; 3)
the approval by shareholders of the Company of a merger or sale of all or
substantially all of the Company's assets; 4) the closing of a transaction in
which more than 50% of the Company's voting power is transferred and 5) a tender
offer which results in a person or a group acquiring more than 40% of the
Company.
As of February 1999, the Company approved a new employment agreement with
Mr. Novack, the Company's Chief Financial Officer. The agreement expires on June
30, 2000. The agreement provides for a compensation package of $130,000 per
year, increasing to $150,000 per year on July 1, 1999, and an annual performance
bonus of 25% to 50% of the base salary based on the attainment of certain
corporate, departmental and individual goals. Pursuant to the agreement, Mr.
Novack has agreed to maintain the confidentiality of any confidential or
proprietary information of the Company.
In the event that the Company terminates Mr. Novack's employment other than
for cause, he will be paid severance compensation equal to his base salary (at
the rate payable at the time of such termination) for a period of nine months.
In the event Mr. Novack terminates his employment voluntarily, he will be paid
severance compensation equal to his base salary (at the rate payable at the time
of such termination) for a period of six months. For a period of one year
following Mr. Novack's voluntary termination or termination for cause, Mr.
Novack cannot perform services for, have an equity interest (except for an
interest of 5% or less in an entity whose securities are listed on a national
securities exchange) in any business (other than the Company) or participate in
the financing, operation, management or control of, any firm, corporation or
business that engages in the marketing or sale of specialty coffee or bagels as
its principal business.
As of November 24, 1998, the Company entered into an employment agreement
with Mr. Nacht, the Company's President. The agreement expires on December 1,
2000, but is automatically renewed for additional one-year periods unless either
party gives notice to the other of its desire not to renew such term, which
notice must be given no later than ninety (90) days prior to the commencement of
any such renewal. The agreement provides for a compensation package of $160,000
per year, an annual service bonus equal to twenty-five (25%) percent of the base
salary payable during each fiscal year, and an annual performance bonus of up to
twenty-five (25%) percent of the base salary payable during each fiscal year. In
lieu of any of the foregoing bonus provisions for the year ending December 31,
1998, Mr. Nacht is entitled to a guaranteed bonus of (i) $100,000 payable within
ten days after the effective date of the plan of reorganization of Manhattan
Bagel Company, Inc. and (ii) $100,000 payable during calendar year 1999, at the
same time as 1998 bonuses are paid to other executive employees of the Company
but in no event later than March 31, 1999. Pursuant to the agreement, Mr. Nacht
has agreed to maintain the confidentiality of any confidential or proprietary
information of the Company.
<PAGE>
In the event that the Company terminates Mr. Nacht's employment other than
for cause, he will be paid severance compensation equal to his annual base
salary (at the rate payable at the time of such termination) for a period of
nine months. In the event the Company elects not to automatically extend Mr.
Nacht's employment for one year at the end of each term of his employment, Mr.
Nacht will be paid severance compensation equal to his annual base salary (at
the rate payable at the time of such termination) for a period of six months.
For a period of two years following Mr. Nacht's termination for any reason other
than an unremedied material default by the Company, Mr. Nacht cannot, directly
or indirectly, within 50 miles of any location operated by the Company or a
franchisee, conduct or have an interest in, or consult for or have any
relationship with any business 25% or more of the sales of which are represented
by sales of coffee and bagels.
As of November 24, 1998, the Company entered into an employment agreement
with Mr. J. Gennusa, the Company's Vice President - Manufacturing. The agreement
expires on November 23, 2000, but is automatically renewed for additional
one-year periods unless either party gives notice to the other of its desire not
to renew such term, which notice must be given no later than ninety (90) days
prior to the commencement of any such renewal. The agreement provides for a
compensation package of $132,500 per year, an annual performance bonus of up to
twenty-five (25%) percent of the base salary payable during each fiscal year if
the annual operating budget of the Company for such fiscal year has been
achieved, and an annual performance bonus of up to twenty-five (25%) percent of
the base salary payable during each fiscal year if the operating budget for
which Mr. J. Gennusa is responsible is achieved. In addition, Mr. J. Gennusa has
been granted options to purchase up to 250,000 shares of the Company's common
stock at an exercise price of $1.656, which options expire ten years from the
date of grant. Pursuant to the agreement, Mr. J. Gennusa has agreed to maintain
the confidentiality of any confidential or proprietary information of the
Company. In the event that Mr. J. Gennusa's employment agreement is terminated
for any reason other than the expiration of its term, the Company shall not be
obligated to pay any compensation or expenses or provide other benefits other
than those accrued to the date of termination.
As of November 24, 1998, the Company entered into an employment agreement
with Mr. A. Gennusa, the Company's Vice President - Construction. The agreement
expires on November 23, 2000, but is automatically renewed for additional
one-year periods unless either party gives notice to the other of its desire not
to renew such term, which notice must be given no later than ninety (90) days
prior to the commencement of any such renewal. The agreement provides for a
compensation package of $132,500 per year, an annual performance bonus of up to
twenty-five (25%) percent of the base salary payable during each fiscal year if
the annual operating budget of the Company for such fiscal year has been
achieved, and an annual performance bonus of up to twenty-five (25%) percent of
the base salary payable during each fiscal year if the operating budget for
which Mr. A. Gennusa is responsible is achieved. In addition, Mr. A. Gennusa has
been granted options to purchase up to 250,000 shares of the Company's common
stock at an exercise price of $1.656, which options expire ten years from the
date of grant. Pursuant to the agreement, Mr. A. Gennusa has agreed to maintain
the confidentiality of any confidential or proprietary information of the
Company. In the event that Mr. A. Gennusa's employment agreement is terminated
for any reason other than the expiration of its term, the Company shall not be
obligated to pay any compensation or expenses or provide other benefits other
than those accrued to the date of termination. Stock Ownership
<PAGE>
The following table sets forth as of July 1, 1999 the number of shares of
Common Stock owned by each director, officer and 5% shareholder of the Company:
<TABLE>
<CAPTION>
Shares
Name and Address of Beneficially
Beneficial Owner ** Owned Percentage
<S> <C> <C>
Fidelity Management & Research 1,192,100 5.9%
82 Devonshire Street
Boston, MA 02109
R. Ramin Kamfar 724,762(1) 3.5%
Chairman and Chief Executive
Officer and Director
Sanford Nacht -- (2) *
President and Chief Operating Officer
Jerold E. Novack 517,407(3) 2.5%
Vice President - Finance
Jason Gennusa 530,000(4) 2.6%
Vice President - Manufacturing
Andrew Gennusa 530,000(5) 2.6%
Vice President - Construction
Barry Levine 204,204(6) *
Vice President - Coffee
Robert Williams 204,204(6) *
Vice President - Coffee
Keith F. Barket 60,212(7) *
Director
Edward McCabe 32,185(8) *
Director
Karen Hogan 46,037(9) *
Director
Leonard Tannenbaum 7,500(10) *
Director
All directors and executive officers 2,856,511 13.3%
As a group (11 persons)
---------------------------
</TABLE>
* Less than one percent (1%).
** Address for each officer and director of the Company is the Company's
principal office located at 246 Industrial Way West, Eatontown, NJ.
<PAGE>
(1) Includes 193,735 shares which may be acquired upon the exercise of
options which will be exercisable within 60 days. Does not include 141,666
shares underlying stock options which are not exercisable within 60 days.
(2) Does not include 250,000 shares underlying stock options which are not
exercisable within 60 days.
(3) Includes 298,324 shares which may be acquired upon the exercise of
options which will be exercisable within 60 days. Does not include 145,000
shares underlying stock options which are not exercisable within 60 days.
(4) Includes 250,000 shares which may be acquired upon the exercise of
presently exercisable options.
(5) Includes 250,000 shares which may be acquired upon the exercise of
presently exercisable options.
(6) Includes 120,000 shares which may be acquired upon the exercise of
presently exercisable options.
(7) Includes 40,000 shares which may be acquired upon the exercise of
presently exercisable options.
(8) Includes 30,000 shares which may be acquired upon the exercise of
presently exercisable options.
(9) Includes 20,000 shares which may be acquired upon the exercise of
presently exercisable options.
(10) Does not include 750,000 shares owned beneficially by BET Associates,
L.P., of which Mr. Tannenbaum is a limited partner owning 10% of the interest of
the limited partners, and of which shares Mr. Tannenbaum disclaims beneficial
ownership. BET Associates, L.P. also holds a warrant to purchase 1,000,000
shares, which is not exercisable within the next 60 days.
<PAGE>
Directors' Compensation
Each non-employee director of the Company is paid $1,000 for each of the
quarterly Board meetings of each calendar year, $500 for each additional Board
meeting held in the same calendar year and $250 for each committee meeting. Such
payments are made in Common Stock of the Company. Employee directors are not
compensated for service provided as directors. Additionally, each non-employee
director receives stock option to purchase 10,000 shares of Common Stock on the
date on which such person first becomes a director, and on October 1 of each
year if, on such date, he or she shall have served on the Company's Board of
Directors for at least six months. The exercise price of such options shall be
equal to the market value of the shares of Common Stock on the date of grant.
All directors are reimbursed for out-of-pocket expenses incurred by them in
connection with attendance of Board meetings and committee meetings.
Compliance with Section 16(a) of the Exchange Act
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors and persons who own more than ten percent of a registered
class of the Company's equity securities (collectively, the "Reporting Persons")
to file reports of ownership and changes in ownership with the Securities and
Exchange Commission and to furnish the Company with copies of these reports.
Based solely on the Company's review of the copies of such forms received by it
during its fiscal year ended December 27, 1998, the Company believes that all
filing requirements applicable to the Reporting Persons were complied with.
Certain Transactions
On August 29, 1997, the Company sold two stores to 723 Food Corp., a
corporation owned by Jerold E. Novack and Richard Windisch. Mr. Novack is Vice
President - Finance of the Company. Mr. Windisch served as the Company's Vice
President - Operations from January 1998 to February 1999, and, from September
1994 to July 1996. The stores included an existing operation and another store
which was partially constructed. The purchase price was $575,000, which was part
in cash and notes. This transaction was approved by the Board of Directors of
the Company. The Company believes that the terms of this transaction are as
favorable to the Company as those which could have been obtained from
unaffiliated third parties.
In fiscal year ended December 28, 1997, Capico International, a corporation
for which Ronald Hari, a former director of the Company, serves as President and
Chief Executive Officer, was paid a consulting fee of $70,000 by the Company
with respect to assistance in developing international and multi-unit
franchising.
On or about March 25, 1998, the officers of the Company, R. Ramin Kamfar
and Jerold E. Novack, signed an agreement to purchase four stores from the
Company. Mr. Kamfar is Chief Executive Officer of the Company and Mr. Novack is
Chief Financial Officer. The purchase price was $1,250,000. This transaction was
approved by the Board of Directors of the Company. The Company believes that the
term of this transaction are as favorable to the Company as those which could
have been obtained from unaffiliated third parties.
Leonard Tannenbaum, director of the Company, is a limited partner and the
owner of ten (10%) percent of the limited partners' interest in BET Associates,
L.P. ("BET"). On November 24, 1998, the Company completed a $5 million dollar
debt transaction with BET, which funds were used for the acquisition of
Manhattan Bagel Company, Inc. Mr. Tannenbaum serves on the Company's Board of
Directors as the designee of BET pursuant to the terms of the foregoing
transaction.
<PAGE>
Each of the nominees for election as a director has advised the Company of
his willingness to serve as a director and management believes that each nominee
will be able to serve. If any nominee becomes unavailable, proxies may be voted
for the election of such person or persons who may be designated by the Board of
Directors.
THE BOARD OF DIRECTORS RECOMMENDS VOTING "FOR" THE
ELECTION OF DIRECTORS SET FORTH IN THIS PROXY STATEMENT
2. SELECTION OF AUDITORS
The Board of Directors recommends that the stockholders ratify the
selection of Arthur Andersen LLP, independent auditors, which served as the
Company's independent auditors to audit the Company's consolidated financial
statements for the fiscal year ending December 26, 1999.
THE BOARD OF DIRECTORS RECOMMENDS VOTING "FOR" THE
SELECTION OF ARTHUR ANDERSEN LLP AS THE COMPANY'S INDEPENDENT
AUDITORS FOR THE FISCAL YEAR ENDING DECEMBER 26, 1999
3. APPROVAL OF RESTATED CERTIFICATE OF INCORPORATION
(a) Common Stock Combination: The Restated Certificate of Incorporation
(the "Certificate") provides for a one for two common stock combination. If
approved, each outstanding share of common stock would become one-half share,
and the total number of shares of common stock outstanding as of the record date
would be reduced from 20,485,047 shares to 10,242,523 shares (all shares issued
thereafter in and before the filing of the Certificate would be similarly
reduced). It is the intent of the Company to try to effect an increase of the
current market price of the common stock. Such increase would benefit the
Company by helping secure a continuation of the listing of the common stock on
the NASDAQ National Market. In addition, it is believed that an increase in the
price of the common stock will encourage financial institutions to give greater
attention to the Company and to its prospects. There can be no assurance,
however, of the extent of any price increase which may result from the proposed
common stock combination in the short or long term.
(b) Staggered Board of Directors: The Certificate provides for a staggered
Board of Directors. In general, one-third of the directors would be elected in
each year. In order to effect this arrangement, and in view of the fact that the
Company's Board of Directors consists of five persons, at the forthcoming annual
meeting, and assuming approval of the Restated Certificate of Incorporation, two
directors would be elected to a three year term, two directors would be elected
to a two year term and one director would be elected to a one year term. When
directors are elected at the next and following annual meetings of stockholders,
they will be elected to three year terms. The purpose of this provision is to
elect not more than two-fifths of the Board of Directors during any one year.
Such provision provides stability and continuity to the Board of Directors. In
the event of a proxy contest, a party seeking control of the Board of Directors
would have to win two successive annual elections to elect a majority of the
directors.
<PAGE>
(c) Board of Directors Removal/Proposals: Directors may be removed for
cause only by the affirmative vote of the holders of two-thirds of the Company's
voting stock, or if the director is an Interested Person or the designee of an
Interested Person (someone who is the holder of ten percent or more of the
Company's voting stock), by a vote of a majority of the Company's voting stock
excluding the voting stock held by the Interested Person. Proposals made by an
Interested Person or a director who is a designee of an Interested Person will
require the approval of two-thirds of the Company's voting stock excluding
holdings of the Interested Person. These provisions make it more difficult for a
large stockholder to remove directors or affect Board of Directors actions.
(d) Provisions Related to Stockholder/Voting.
(i) Stockholder nominations for election of directors at an annual meeting
of stockholders must be made not less than 90 days, nor more than 60 days,
before the end of a period of one year after the immediately prior annual
meeting of stockholders. For example, nominations by stockholders for election
at the annual meeting of stockholders to be held in the year 2000 must be made
between May 19, 2000 and June 18, 2000, subject to the provisions of the
Restated Certificate of Incorporation. The notice of nomination shall provide
information on the nominees and their willingness to serve. If the Company calls
a special meeting of stockholder to elect directors, the nomination must be made
by the later of the 60th day before such meeting or the 10th day after notice of
the meeting is given. The purpose of this provision is to give the Company
reasonable notice of stockholder nominated directors and their qualifications.
(ii) Proposals by stockholders must be made not less than 90 days, nor more
than 60 days, before the end of a period of one year after the immediately prior
annual meeting of stockholders. For example, proposals at the annual meeting of
stockholders to be held in the year 2000 must be made between May 19, 2000 and
June 18, 2000, subject to the provisions of the Restated Certificate of
Incorporation. If the Company calls a special meeting of stockholders, proposals
must be made by the later of the 60th day before such meeting or the 10th day
after notice of the meeting is given. The purpose of this provision is to give
the Company reasonable notice of stockholder proposals so the same can be
properly evaluated.
(iii) Voting by stockholders shall take place at meetings, and not by
written consent. This provision is intended to prevent secretive voting by large
stockholders without notice or an opportunity of other stockholders to know and
respond to the issues.
(iv) If a Business Transaction (merger, sale of assets, issuance of capital
stock, recapitalization or liquidation or a transaction with an Interested
Person) is proposed by an Interested Person, approval of the same must be by the
affirmative vote of the holders of two-thirds of the Company's voting stock,
excluding the voting stock held by the Interested Person. This provision is
designed to insure broad stockholder approval of fundamental transactions and
transactions which are related to large stockholder.
<PAGE>
The Company believes that the stability of the Board of Directors, and
broad stockholder support of fundamental proposals made by a large stockholder,
are necessary to the stability, continuity and growth of the Company's business,
and to make it more difficult for a third party to take control of the Company
on terms that would be substantially unfavorable to the other stockholders.
THE BOARD OF DIRECTORS RECOMMENDS YOU VOTE FOR THE APPROVAL
OF THE RESTATED CERTIFICATE OF INCORPORATION.
4. OTHER MATTERS
The Board of Directors has no knowledge of any other matters which may come
before the Annual Meeting and does not intend to present any other matters.
However, if any other business shall properly come before the Annual Meeting or
any adjournment thereof, the persons named as proxies will have discretionary
authority to vote the shares of Common Stock represented by the accompanying
proxy in accordance with their best judgment.
PROCEDURE FOR SUBMISSION OF YEAR 2000 STOCKHOLDER PROPOSALS
Assuming approval of the Restated Certificate of Incorporation, proposals
by stockholders for inclusion in the 2000 annual meeting of stockholders proxy
statement must be received by New World Coffee-Manhattan Bagel, Inc., 246
Industrial Way West, Eatontown, New Jersey 07724, between May 19, 2000 and June
18, 2000, subject to the provisions of the Restated Certificate of
Incorporation. All such proposals are subject to the applicable rules and
requirements of the Securities and Exchange Commission.
OTHER MATTERS
So far as the Board of Directors is aware, only the aforementioned matters
will be acted upon at the Annual Meeting. If any other matters properly come
before the Annual Meeting, it is intended that the accompanying proxy may be
voted on such other matters in accordance with the best judgment of the person
or persons voting said proxy.
By order of the Board of Directors.
Dated: July 12, 1999
Jerold E. Novack, Secretary
<PAGE>
COMMON STOCK PROXY
____________________________________________________
NEW WORLD COFFEE - MANHATTAN BAGEL, INC.
246 Industrial Way West
Eatontown, New Jersey 07724
This Proxy is Solicited on Behalf of the Board of Directors.
The undersigned, revoking all previous proxies, hereby appoints R. Ramin
Kamfar and Jerold E. Novack, and each of them, proxies with power of
substitution to each, for and in the name of the undersigned to vote all shares
of Common Stock of New World Coffee - Manhattan Bagel, Inc. (the "Company"),
held of record by the undersigned on July 1, 1999 which the undersigned would be
entitled to vote if present at the Annual Meeting of Shareholders of the Company
to be held on August 17, 1999, at 9:30 a.m. at 246 Industrial Way West,
Eatontown, New Jersey 07724, and any adjournments thereof, upon the matters set
forth in the Notice of Annual Meeting.
The undersigned acknowledges receipt of the Notice of Annual Meeting and
Proxy Statement.
1. ELECTION OF DIRECTORS
FOR all nominees listed below Withhold Authority to vote for all
(except as marked to the contrary nominees listed below _________
below) _________
(Instruction: To withhold authority to vote for an individual nominee
strike a line through such nominee's name in the list below).
Nominees if Item 3 is approved for the terms set forth in the Proxy
Statement:
R. RAMIN KAMFAR
KEITH F. BARKET
KAREN HOGAN
EDWARD McCABE
LEONARD TANNENBAUM
2. RATIFICATION OF THE APPOINTMENT OF ARTHUR ANDERSEN LLP AS THE COMPANY'S
INDEPENDENT AUDITORS FOR THE FISCAL YEAR ENDING DECEMBER 26, 1999.
FOR __________ AGAINST ____________ ABSTAIN _________
3. APPROVAL OF RESTATED CERTIFICATE OF INCORPORATION.
FOR __________ AGAINST ___________ ABSTAIN _________
4. TRANSACTION OF SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE
MEETING AND ANY ADJOURNMENT OR POSTPONEMENT THEREOF.
FOR __________ AGAINST ___________ ABSTAIN ____________
PLEASE SIGN ON THE REVERSE SIDE AND RETURN THIS PROXY PROMPTLY IN THE
ENCLOSED ENVELOPE.
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY
and when properly executed will be voted as directed herein. If no direction is
given, this Proxy will be voted "FOR" all proposals.
(Date)
(Signature)
(Signature, if held jointly)
Please sign exactly as name appears below. If Shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please list full title as such. If a corporation, please
sign in full corporate name by president or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
Please sign, date and return promptly in the enclosed envelope. No postage
need be affixed if mailed in the United States.
<PAGE>
EXHIBIT "A"
RESTATED CERTIFICATE OF INCORPORATION
New World Coffee-Manhattan Bagel, Inc., a corporation organized and
existing under the laws of the State of Delaware, hereby certifies as follows:
1. The present name of the corporation is New World Coffee-Manhattan Bagel,
Inc. The original Certificate of Incorporation of the corporation, under the
name "World Coffee, Inc.," was filed with the Secretary of State of Delaware on
October 21, 1992.
2. Pursuant to Sections 242 and 245 of the General Corporation Law of the
State of Delaware, this Restated Certificate of Incorporation restates and
integrates and further amends the provisions of the Certificate of Incorporation
of this corporation.
3. The text of the Restated Certification of Incorporation as heretofore
amended or supplemented is hereby restated and further amended to read in its
entirety as set forth in Exhibit A attached hereto.
IN WITNESS WHEREOF, this Restated Certificate of Incorporation has been
signed under the seal of the corporation this ____ day of _________, 1999.
NEW WORLD COFFEE-MANHATTAN
BAGEL, INC.
By: /s/ Jerold E. Novack
-------------------------------
Secretary
<PAGE>
RESTATED CERTIFICATE OF INCORPORATION
OF
NEW WORLD COFFEE-MANHATTAN BAGEL, INC.
FIRST: The name of the Corporation is New World Coffee-Manhattan Bagel,
Inc.
SECOND: The address of its registered office in the State of Delaware is 25
Greystone Manor, Lewes, DE 19958-9776, County of Sussex. The name of its
registered agent at such address is Harvard Business Services, Inc.
THIRD: 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 the State of Delaware.
FOURTH: The total number of shares which the Corporation shall have
authority to issue is Fifty-Two Million (52,000,000), consisting of Fifty
Million (50,000,000) shares of common stock, and Two Million (2,000,000) shares
of preferred stock, all of par value of $.001) per share.
A. Preferred Stock
1. The preferred stock of the Corporation may be issued from time to time
in one or more series of any number of shares, provided that the aggregate
number of shares issued and not cancelled in any and all such series shall not
exceed the total number of shares of preferred stock hereinabove authorized.
2. Authority is hereby vested in the Board of Directors from time to time
to authorize the issuance of one or more series of preferred stock and, in
connection with the creation of such series, to fix by resolution or resolutions
providing for the issuance of shares thereof the characteristics of each such
series including, without limitation, the following:
(a) the maximum number of shares to constitute such series, which may
subsequently be increased or decreased (but not below the number of shares of
that series then outstanding) by resolution of the Board of Directors, the
distinctive designation thereof and the stated value thereof if different than
the par value thereof;
<PAGE>
(b) whether the shares of such series shall have voting powers, full or
limited, together with any other series of preferred stock or common stock, or
as a separate class, or no voting powers, and if any, the terms of such voting
powers;
(c) the dividend rate, if any, on the shares of such series, the conditions
and dates upon which such dividends shall be payable, the preference or relation
which such dividends shall bear to the dividends payable on any other class or
classes or on any other series of capital stock and whether such dividend shall
be cumulative or noncumulative;
(d) whether the shares of such series shall be subject to redemption by the
Corporation, and, if made subject to redemption, the times, prices and other
terms, limitations, restrictions or conditions of such redemption;
(e) the relative amounts, and the relative rights or preference, if any, of
payment in respect of shares of such series, which the holders of shares of such
series shall be entitled to receive upon the liquidation, dissolution or
winding-up of the Corporation;
(f) whether or not the shares of such series shall be subject to the
operation of a retirement or sinking fund and, if so, the extent to and manner
in which any such retirement or sinking fund shall be applied to the purchase or
redemption of the shares of such series for retirement or to other corporate
purposes and the terms and provisions relative to the operation thereof;
(g) whether or not the shares of such series shall be convertible into, or
exchangeable for, shares of any other class, classes or series, or other
securities, whether or not issued by the Corporation, and if so convertible or
exchangeable, the price or prices or the rate or rates of conversion or exchange
and the method, if any, of adjusting same;
(h) the limitations and restrictions, if any, to be effective while any
shares of such series are outstanding upon the payment of dividends or the
making of other distributions on, and upon the purchase, redemption or other
acquisition by the Corporation of, the Common Stock (as defined below) or any
other class or classes of stock of the Corporation ranking junior to the shares
of such series either as to dividends or upon liquidation, dissolution or
winding-up;
(i) the conditions or restrictions, if any, upon the creation of
indebtedness of the Corporation or upon the issuance of any additional stock
(including additional shares of such series or of any other series or of any
other class) ranking on a parity with or prior to the shares of such series as
to dividends or distributions of assets upon liquidation, dissolution or
winding-up; and
<PAGE>
(j) any other preference and relative, participating, optional or other
special rights, and the qualifications, limitations or restrictions thereof, as
shall not be inconsistent with law, this Article Fourth or any resolution of the
Board of Directors pursuant hereto.
In connection with the above, a Certificate of Designation of Series B
Convertible Preferred Stock filed on January 22, 1997 and a Certificate of
Designation of Series A Junior Participating Preferred Stock filed on June 16,
1999, are hereby confirmed.
B. Common Stock
1. The common stock of the Corporation may be issued from time to time in
any number of shares, provided that the aggregate number of shares issued and
not cancelled shall not exceed the total number of shares of common stock
hereinabove authorized ("Common Stock").
2. Unless expressly provided by the Board of Directors of the Corporation
in fixing the voting rights of any series of Preferred Stock, the holders of the
outstanding shares of Common Stock shall exclusively possess all voting power
for the election of directors and for all other purposes, each holder of record
of shares of Common Stock being entitled to one vote for each share of such
stock standing in his name on the books of the Corporation.
3. Subject to the prior rights of the holders of Preferred Stock now or
hereafter granted pursuant to Article Fourth, the holders of Common Stock shall
be entitled to receive, when and as declared by the Board of Directors, out of
funds legally available for that purpose, dividends payable either in cash,
stock or otherwise.
4. In the event of any liquidation, dissolution or winding-up of the
Corporation, either voluntary or involuntary, after payment shall be made in
full to the holders of Preferred Stock of any amounts to which they may be
entitled, the holders of Common Stock shall be entitled to the exclusion of the
holders of Preferred Stock of any and all series to share, ratably according to
the number of shares of Common Stock held by them, in all remaining assets of
the Corporation available for distribution to its stockholders.
5. Each share of Common Stock outstanding immediately prior to the filing
of this Restated Certificate of Incorporation shall, upon the filing of this
Restated Certificate of Incorporation, represent one half (1/2) share of Common
Stock, such that the _________ shares of Common Stock outstanding immediately
prior to the filing of this Restated Certificate of Incorporation shall, upon
the filing of this Amended Certificate of Incorporation, be combined into
__________ shares of Common Stock .
FIFTH: The Corporation is to have perpetual existence.
<PAGE>
SIXTH: The private property of the stockholders shall not be subject to the
payment of the Corporation's debts to any extent whatever.
SEVENTH: The following provisions are included for the management of the
business and for the conduct of the affairs of the Corporation and for defining
and regulating the powers of the Corporation and its directors and stockholders
and are in furtherance and not in limitation of the powers conferred upon the
Corporation by statute:
A. 1. The business and affairs of the Corporation shall be managed by or
under the direction of a Board of Directors consisting of such number of
directors as is determined from time to time by resolution adopted by
affirmative vote of a majority of the entire Board of Directors; provided,
however, that in no event shall the number of directors be less than three nor
more than nine. The directors shall be divided into three classes, designated
Class I, Class II and Class III. Each class shall consist, as nearly as may be
possible, of one-third (1/3) of the total number of directors constituting the
entire Board of Directors. By unanimous written consent of the Board of
Directors, the initial classes shall be elected as follows: Class I directors
shall be elected for a one-year term, Class II directors for a two-year term and
Class III directors for a three-year term. At each succeeding annual meeting of
stockholders, successors to the class of directors whose terms expires at that
annual meeting shall be elected for three-year terms. If the number of directors
is changed, any increase or decrease shall be apportioned among the classes so
as to maintain the number of directors in each class as nearly equal as
possible, and any additional director of any class elected to fill a vacancy
resulting from an increase in such class shall hold office for a term that shall
coincide with the remaining term of that class, but in no case will a decrease
in the number of directors shorten the term of any incumbent director. A
director shall hold office until the annual meeting for the year in which his or
her term expires and until his or her successor shall be elected and shall
qualify, subject, however, to prior death, resignation, retirement,
disqualification or removal from office as set forth herein. Except as otherwise
required by law, any vacancy on the Board of Directors that results from an
increase in the number of directors and any other vacancy occurring in the Board
of Directors shall be filled only by a majority of the directors then in office,
even if less than a quorum, or by a sole remaining director. Any director
elected to fill a vacancy not resulting from an increase in the number of
directors shall have the same remaining term as that of his or her predecessor.
2. Any director, or the entire Board of Directors, may be removed from
office only for cause and only by the affirmative vote of not less than
two-thirds (2/3) of the votes entitled to be cast by the holders of all of the
then outstanding shares of Voting Stock (as defined in Article Ninth, Section
C), voting together as one class; provided, however, that if a proposal to
remove a director is made by or on behalf of an Interested Person (as defined in
Article Ninth, Section C) or a director who is not an Independent Director (as
defined in Article Ninth, Section C), then such removal shall also require the
affirmative vote of not less than two-thirds (2/3) of the votes entitled to be
cast by the holders of all of the then outstanding shares of Voting Stock,
voting together as one class, excluding Voting Stock beneficially owned by such
Interested Person.
<PAGE>
3. Notwithstanding the foregoing, whenever the holders of any one or more
classes or series of stock issued by the Corporation shall have the right,
voting separately by class or series, to elect directors, the election, term of
office, filling of vacancies and other features of such directorships shall be
governed by the terms of this Certificate of Incorporation applicable thereto,
and such directors so elected shall not be divided into classes pursuant to
Article Seventh, Section A unless expressly provided by such terms.
B. In furtherance and not limitation of the powers conferred by statute,
the Board of Directors is expressly authorized:
1. To make, alter, amend or repeal the By-Laws of the Corporation. The
holders of shares of Voting Stock shall, to the extent such power is at the time
conferred on them by applicable law, also have the power to make, alter, amend
or repeal the By-Laws of the Corporation, provided that any proposal by or on
behalf of an Interested Person or a director who is not an Independent Director
to make, alter, amend or repeal the By-Laws shall require approval by the
affirmative vote described in Article Ninth, Section A, unless either (a) such
action has been approved by a majority of the Board of Directors as constituted
prior to such Interested Person first becoming an Interested Person; or (b)
prior to such Interested Person first becoming an Interested Person, a majority
of the Board of Directors shall have approved such Interested Person becoming an
Interested Person and, subsequently, a majority of the Independent Directors has
approved such action.
2. To set apart out of any of the funds of the Corporation available for
dividends a reserve or reserves for any proper purpose and to abolish any such
reserve in the manner in which it was created.
3. By a majority of the whole Board of Directors, to designate one or more
committees, each committee to consist of one or more of the directors of the
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. The By-Laws may provide that in the
absence or 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, or in the By-Laws of the Corporation,
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 (except that a committee may, to
the extent authorized in the resolution or resolutions providing for the
issuance of shares of stock adopted by the Board of Directors as provided in
Article Fourth hereof, fix the designations and any of the preferences or rights
of such shares relating to dividends, redemption, dissolution, any distribution
of assets of the Corporation or the conversion into, or the exchange of such
<PAGE>
shares for, shares of any other class or classes or any other series of the same
or any other class or classes of stock of the Corporation or fix the number of
shares of any series of stock or authorize the increase or decrease of the
shares of any series), 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 By-Laws of the Corporation; and, unless the resolution or
By-Laws expressly so provide, no such committee shall have the power or
authority to declare a dividend, to authorize the issuance of stock or to adopt
a certificate of ownership and merger pursuant to Section 253 of the General
Corporation Law of the State of Delaware.
4. When and as authorized by the stockholders in accordance with statute,
to sell, lease or exchange all or substantially all of the property and assets
of the Corporation, including its goodwill and its corporate franchises, upon
such terms and conditions and for such consideration, which may consist in whole
or in part of money or property including shares of stock in, and/or other
securities of, any other corporation or corporations, as the Board of Directors
shall deem expedient and for the best interests of the Corporation.
5. To the full extent permitted or not prohibited by law, and without the
consent of or other action by the stockholders, to authorize or create
mortgages, pledges or other liens or encumbrances upon any or all of the assets,
real, personal or mixed, and franchises of the Corporation, including
after-acquired property, and to exercise all of the powers of the Corporation in
connection therewith.
C. In addition to any other considerations which the Board of Directors may
lawfully take into account, in determining whether to take or to refrain from
taking corporate action on any matter, including proposing any matter to the
stockholders of the Corporation, the Board of Directors may take into account
the long-term as well as the short-term interests of the Corporation and its
stockholders (including the possibility that these interests may be best served
by the continued independence of the Corporation), customers, employees and
other constituencies of the Corporation and its subsidiaries, including the
effect upon communities in which the Corporation and its subsidiaries do
business. In so evaluating any such determination, the Board of Directors shall
be deemed to be performing their duties and acting in good faith and in the best
interests of the Corporation within the meaning of Section 145 of the General
Corporation Law of the State of Delaware, or any successor provision.
D. Subject to the rights of holders of any class or series of stock having
a preference over the Common Stock as to dividends or upon liquidation,
dissolution or winding-up, nominations for the election of directors may be made
by the Board of Directors or by any stockholder entitled to vote in the election
of directors generally. However, any stockholder entitled to vote in the
election of directors generally may nominate one or more persons for election as
directors at an annual meeting only pursuant to the Corporation's notice of such
meeting or if written notice of such stockholder's intent to make such
nomination or nominations has been received by the Secretary of the Corporation
not less than sixty nor more than ninety days prior to the first anniversary of
the preceding year's annual meeting; provided, however, that in the event that
the date of the annual meeting is advanced by more than thirty (30) days or
delayed by more than sixty (60) days from such anniversary, notice by the
<PAGE>
stockholder to be timely must be so received not earlier than the ninetieth day
prior to such annual meeting and not later than the close of business on the
later of (1) the sixtieth day prior to such annual meeting; or (2) the tenth day
following the day on which notice of the day of the annual meeting was mailed or
public disclosure thereof was made by the Corporation, whichever first occurs.
For purposes of calculating the first such notice period following adoption of
this Certificate of Incorporation, the first anniversary of the 1999 annual
meeting shall be deemed to be _______, 2000. Each such notice shall set forth:
(a) the name and address of the stockholder who intends to make the nomination
and of the person or person to be nominated; (b) a representation that the
stockholder is a holder of record of stock of the Corporation entitled to vote
at such meeting and intends to appear in person or by proxy at the meeting to
nominate the person or persons specified in the notice; (c) a description of all
arrangements or understandings between the stockholder and each nominee and any
other person or persons (naming such person or persons) relating to the
nomination or nominations; (d) the class and number of shares of the Corporation
which are beneficially owned by such stockholder and the person to be nominated
as of the date of such stockholder's notice and by any other stockholders known
by such stockholder to be supporting such nominees as of the date of such
stockholder's notice; (e) such other information regarding each nominee proposed
by such stockholder as would be required to be included in a proxy statement
filed pursuant to the proxy rules of the Securities and Exchange Commission; and
(f) the consent of each nominee to serve as a director of the Corporation if so
elected as evidenced by the signature of such nominee.
In addition, in the event the Corporation calls a special meeting of
stockholders for the purpose of electing one or more directors, any stockholder
entitled to vote in the election of directors generally may nominate one or more
persons for election as directors at a special meeting only pursuant to the
Corporation's notice of meeting or if written notice of such stockholder's
intent to make such nomination or nominations, setting forth the information and
complying with the form described in the immediately preceding paragraph, has
been received by the Secretary of the Corporation not earlier than the ninetieth
day prior to such special meeting and not later than the close of business on
the later of (i) the sixtieth day prior to such meeting; or (ii) the tenth day
following the day on which notice of the date of the special meeting was mailed
or public disclosure thereof was made by the Corporation, whichever comes first.
No person shall be eligible for election as a director of the Corporation
unless nominated in accordance with the procedures set forth in this Article
Seventh, Section D. The presiding officer of the meeting shall, if the facts
warrant, determine and declare to the meeting that nomination was not made in
accordance with the procedures prescribed by Article Eighth, Section D, and if
he or she should so determine, the defective nomination shall be disregarded.
Elections of directors need not be by written ballot unless the By-Laws of
the Corporation shall so provide.
<PAGE>
EIGHTH:
A. Meetings of the stockholders may be held within or without the State of
Delaware, as the By-Laws may provide. Any action required or permitted to be
taken by the stockholders of the Corporation must be effected at a duly called
annual or special meeting of such stockholders and shall not be effected by a
consent in writing by any such holders. Subject to the express rights of holders
of any class or series of stock having preference over the Common Stock as to
dividends or upon liquidation, dissolution or winding-up, special meetings of
the stockholders of the Corporation may be called only by the holders of a
majority of the outstanding shares of Common Stock or by a majority of the Board
of Directors.
Except as otherwise required by law or by this Certificate of
Incorporation, the holders of not less than one-third (1/3) in voting power of
the shares entitled to vote at any meeting of stockholders, present in person or
by proxy, shall constitute a quorum, and the act of the holders of a majority in
voting power of the shares present in person or by proxy and entitled to vote on
the subject matter shall be deemed the act of the stockholders. If a quorum
shall fail to attend any meeting, the presiding officer may adjourn the meeting
to another place, date or time. If a notice of any adjourned special meeting of
stockholders is sent to all stockholders entitled to vote thereat, stating that
it will be held with one-quarter (1/4) in voting power of the shares entitled to
vote thereat constituting a quorum, then except as otherwise required by law,
one-quarter (1/4) in voting power of the shares entitled to vote at such
adjourned meeting, present in person or by proxy, shall constitute a quorum,
and, except as otherwise required by law or this Certificate of Incorporation,
all matters shall be determined by the holders of a majority in voting power of
the shares present in person or by proxy and entitled to vote on the subject
matter.
B. At any meeting of the stockholders, only such business shall be
conducted as shall have been properly bought before such meeting. To be properly
bought before an annual meeting, business must be (1) specified in the notice of
meeting (or any supplement thereto) given by or at the direction of the Board of
Directors; (2) otherwise properly brought before the meeting by or at the
direction of the Board of Directors; or (3) otherwise properly brought before
the meeting by a stockholder. For business to be properly brought before an
annual meeting by a stockholder, the stockholders must have given timely notice
thereof in writing to the Secretary of the Corporation. To be timely, a
stockholder's notice must be received not less than sixty (60) days nor more
than ninety (90) days prior to the first anniversary of the preceding year's
annual meeting; provided, however, that in the event that the date of the annual
meeting is advanced by more than thirty (30) days or delayed by more than sixty
(60) days from such anniversary, notice by the stockholder to be timely must be
so received not earlier than the ninetieth day prior to such annual meeting and
not later than the close of business on the later of (1) the sixtieth day prior
to such annual meeting; or (2) the tenth day following the date on which notice
of the date of the annual meeting was mailed or public disclosure thereof was
made, whichever first occurs. For purposes of calculating the first such notice
period following adoption of this Certificate of Incorporation, the first
anniversary of the 1999 annual meeting shall be __________, 2000. Each such
notice shall set forth as to each matter the stockholder proposes to bring
before the annual meeting: (a) a brief description of the business desired to be
brought before the annual 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; (c) the class, series and
number of shares of the Corporation which are beneficially owned by the
stockholder; and (d) and material interest of the stockholder in such business.
<PAGE>
No business shall be conducted at any meeting of the stockholders except in
accordance with the procedures set forth in Article Eighth, Section B. The
presiding officer of the meeting shall, if the facts warrant, determine and
declare to the meeting that business was not properly bought before the meeting
and in accordance with the provisions of Article Eighth, Section B, and if he or
she should so determine, any such business not properly brought before the
meeting shall not be transacted. Nothing herein shall be deemed to affect the
Corporation's proxy statement pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (the "Exchange Act") and Rule 14a-8 thereunder.
The books of the Corporation may be kept outside of 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 By-Laws of the Corporation.
NINTH:
A. In addition to any affirmative vote required by law or this Certificate
of Incorporation or the By-Laws of the Corporation, and except as otherwise
expressly provided in Section B of this Article Ninth, a Business Transaction
(as hereinafter defined) with, or proposed by or on behalf of, any Interested
Person (as hereinafter defined) or any Affiliate (as hereinafter defined) of any
Interested Person or any person who thereafter would be an Affiliate of such
Interested Person shall require approval by the affirmative vote of not less
than two-thirds (2/3) of the votes entitled to be cast by holders of all the
then outstanding Voting Stock, voting together as one class, excluding Voting
Stock beneficially owned by such Interested Person in accordance with Section
203 of the General Corporation Law of the State of Delaware. Such affirmative
vote shall be required notwithstanding the fact that no vote may be required, or
that a lesser percentage may be specified, by law or in any agreement with any
national securities exchange or otherwise.
B. The provisions of this Article Ninth, Section A, shall not be applicable
to any particular Business Transaction, and such Business Transaction shall
require only such affirmative vote, if any, as is required by law or by any
other provision of this Certificate of Incorporation or the By-Laws of the
Corporation, or any agreement with any national securities exchange, if either
(1) the Business Transaction shall have been approved by a majority of the Board
of Directors as constituted prior to such Interested Person first becoming an
Interested Person or (2) prior to such Interested Person first becoming an
Interested Person, a majority of the Board of Directors shall have approved such
Interested Person becoming an Interested Person and, subsequently, a majority of
the Independent Directors (as hereinafter defined) shall have approved the
Business Transaction.
<PAGE>
C. The following definitions shall apply with respect to Article Tenth.
1. The term "Affiliate" shall mean a person that directly, or indirectly
through one or more intermediaries, controls, or is controlled by, or is under
common control with, a specified person.
2. A person shall be a "Beneficial Owner" of any Capital Stock (a) which
such person or any of its Affiliates beneficially owns, directly or indirectly;
(b) which such person or any of its Affiliates has, directly or indirectly, (i)
the right to acquire (whether such right is exercisable immediately or subject
only to the passage of time or the occurrence of one or more events), pursuant
to any agreement, arrangement or understanding or upon the exercise of
conversion rights, exchange rights, warrants or options, or otherwise, or (ii)
the right to vote pursuant to any agreement, arrangement or understanding;
provided, however, that a person shall not be deemed the beneficial owner of any
security if the agreement, arrangement or understanding to vote such security
arises solely from a revocable proxy or consent solicitation made pursuant to
and in accordance with the Exchange Act, and is not also then reportable on
Schedule 13D under the Exchange Act (or a comparable or successor report); or
(c) which is beneficially owned, directly or indirectly, by any other person
with which such person or any of its Affiliates has any agreement, arrangement
or understanding for the purpose of acquiring, holding, voting or disposing of
any shares of Capital Stock (except to the extent permitted by the proviso of
clause (b)(ii) above). For the purposes of determining whether a person is an
Interested Person pursuant to paragraph (7) of this Section C, the number of
shares of Capital Stock deemed to be outstanding shall include shares deemed
beneficially owned by such person through application of this paragraph (2) of
Section C, but shall not include any other shares of Capital Stock that may be
issuable pursuant to any agreement, arrangement or understanding, or upon
exercise of conversion rights, warrants or options, or otherwise.
3. The term "Business Transaction" shall mean any of the following
transactions when entered into by the Corporation or a subsidiary of the
Corporation with, or upon a proposal by or on behalf of, any Interested Person
or any Affiliate of any Interested Person:
(a) any merger or consolidation of the Corporation or any subsidiary with
(i) any Interested Person or (ii) any other corporation which is, or after such
merger or consolidation would be, an Affiliate of an Interested Person;
(b) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition (in one transaction or a series of transactions), except
proportionately as a stockholder of the Corporation, to or with the Interested
Person of assets of the Corporation (other than Capital Stock (as hereinafter
defined)) or of any subsidiary of the Corporation which assets have an aggregate
market value equal to ten percent (10%) or more of the aggregate market value of
all the outstanding stock of the Corporation;
<PAGE>
(c) any transaction that results in the issuance of shares or the transfer
of treasury shares by the Corporation or by any subsidiary of the Corporation of
any Capital Stock or any capital stock of such subsidiary to the Interested
Person, except (i) pursuant to the exercise, exchange or conversion of
securities exercisable for, exchangeable for or convertible into stock of the
Corporation or any such subsidiary which securities were outstanding prior to
the time that the Interested Person became such, (ii) pursuant to a dividend or
distribution paid or made, or the exercise, exchange or conversion of securities
exercisable for, exchangeable for or convertible into stock of the Corporation
or any such subsidiary which security is distributed, pro rata to all holders of
a class or series of stock of the Corporation subsequent to the time the
Interested Person became such, (iii) pursuant to an exchange offer by the
Corporation to purchase stock made on the same terms to all holders of said
stock, (iv) any issuance of shares or transfer of treasury shares of Capital
Stock by the Corporation, provided, however, that in the case of each of clauses
(ii) through (iv) above there shall be no increase of more than one percent (1%)
in the Interested Person's proportionate share of the Capital Stock of any class
or series or of the Voting Stock or (v) pursuant to a public offering or private
placement by the Corporation to an Institutional Investor;
(d) any reclassification of securities, recapitalization or other
transaction involving the Corporation or any subsidiary of the Corporation which
has the effect, directly or indirectly, of (i) increasing the proportionate
share of the stock of any class or series, or securities convertible into the
stock of any class or series, of the Corporation or of any such subsidiary which
is owned by the Interested Person, except as a result of immaterial changes due
to fractional share adjustments or as a result of any purchase or redemption of
any shares of stock not caused, directly or indirectly, by the Interested Person
or (ii) increasing the voting power, whether or not then exercisable, of an
Interested Person in any class or series of stock of the Corporation or any
subsidiary of the Corporation;
(e) the adoption of any plan or proposal by or on behalf of an Interested
Person for the liquidation or dissolution of the Corporation; or
(f) any receipt by the Interested Person of the benefit, directly or
indirectly (except proportionately as a stockholder of the Corporation), of any
loans, advances, guarantees, pledges, tax benefits or other financial benefits
(other than those expressly permitted in subparagraphs (a) through (e) above)
provided by or through the Corporation or any subsidiary.
4. The term "Capital Stock" shall mean all capital stock of the Corporation
authorized to be issued from time to time under Article Fourth of this
Certificate of Incorporation.
<PAGE>
5. The term "Independent Directors" shall mean the members of the Board of
Directors who are not Affiliates or representatives of, or associated with, an
Interested Person and who were either directors of the Corporation prior to any
person becoming an Interested Person or were recommended for election or elected
to succeed such directors by a vote which includes the affirmative vote of a
majority of the Independent Directors.
6. The term "Institutional Investor" shall mean a person that (a) has
acquired, or will acquire, all of its securities of the Corporation in the
ordinary course of its business and not with the purpose nor with the effect of
changing or influencing the control of the Corporation, nor in connection with
or as a participant in any transaction having such purpose or effect, including
any transaction subject to Section 13 of the Exchange Act and Rule 13d-3(b)
thereunder, and (b) is a registered broker dealer; a bank as defined in Section
3(a)(6) of the Exchange Act; an insurance company as defined in, or an
investment company registered under, the Investment Company Act of 1940; an
investment advisor registered under the Investment Advisors Act of 1940; an
employee benefit plan or pension fund subject to the Employee Retirement Income
Security Act of 1974 or an endowment fund; a parent holding company, provided
that the aggregate amount held directly by the parent and directly and
indirectly by its subsidiaries which are not persons specified in the foregoing
subclauses of this clause (b) does not exceed one percent (1%) of the securities
of the subject class; or a group, provided that all the members are persons
specified in the foregoing subclauses of this clause (b).
7. The term "Interested Person" shall mean any person (other than the
Corporation, any subsidiary, any profit-sharing, employee stock ownership or
other employee benefit plan of the Corporation or any subsidiary or any trustee
of or fiduciary with respect to any such plan when acting in such capacity) who
(a) is the beneficial owner of Voting Stock representing ten percent (10%) or
more of the votes entitled to be cast by the holders of all of the then
outstanding shares of Voting Stock; or (b) has stated in a filing with any
governmental agency or press release or otherwise publicly disclosed a plan or
intention to become or consider becoming the beneficial owner of Voting Stock
representing ten percent (10%) or more of the votes entitled to be cast by the
holders of all then outstanding shares of Voting Stock and has not expressly
abandoned such plan, intention or consideration more than two years prior to the
date in question; or (c) is an Affiliate of the Corporation and at any time
within the two-year period immediately prior to the date in question was the
beneficial owner of Voting Stock representing ten percent (10%) or more of the
votes entitled to be cast by holders of all then outstanding shares of Voting
Stock.
8. The term "person" shall mean individual, corporation, partnership,
unincorporated association, trust or other entity.
9. The term "subsidiary" means any company of which a majority of the
voting securities are owned, directly or indirectly, by the Corporation.
10. The term "Voting Stock" shall mean Capital Stock of any class or series
entitled to vote in the election of directors generally.
<PAGE>
D. A majority of the Independent Directors shall have the power and duty to
determine, on the basis of information known to them after reasonable inquiry,
for the purposes of (1) this Article Ninth, all questions arising under Article
Ninth including, without limitation (a) whether a person is an Interested
Person, (b) the number of shares of Capital Stock or other securities
beneficially owned by any person; and (c) whether a person is an Affiliate of
another; and (2) this Certificate of Incorporation, the question of whether a
person is an Interested Person. Any such determination made in good faith shall
be binding and conclusive on all parties.
E. Nothing contained in this Article Ninth shall be construed to relieve
any Interested Person from any fiduciary obligation imposed by law.
TENTH: Whenever a compromise or arrangement is proposed between the
Corporation and its creditors or any class of them and/or between the
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of the Corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this corporation under
the provisions of Section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers appointed
for the Corporation under the provisions of Section 279 of Title 8 of the
Delaware Code order a meeting of the creditors or class of creditors, and/or of
the stockholders or class of stockholders of the Corporation, as the case may
be, to be summoned in such manner as the said court directs. If a majority in
number representing three fourths in value of the creditors or class of
creditors, and/or of the stockholders or class of stockholders of the
Corporation, as the case may be, agree to any compromise or arrangement and to
any reorganization of the Corporation as consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application has been made,
be binding on all the creditors or class of creditors, and/or on all the
stockholders or class of stockholders, of the Corporation, as the case may be,
and also on the Corporation.
ELEVENTH: The Corporation shall, to the fullest extent permitted by the
provisions of Section 145 of the General Corporation Law of the State of
Delaware, as the same may be amended and supplemented, indemnify any and all
persons whom it shall have power to indemnify under said section from and
against any and all of the expenses, liabilities or other matters referred to in
or covered by said section, and the indemnification provided for herein shall
not be deemed exclusive of any other rights to which those indemnified may be
entitled under any By-Law, agreement, vote of stockholders or disinterested
directors or otherwise, both as to action in his official capacity and as to
action in another capacity while holding such office, and shall continue as to a
person who has ceased to be a director, officer, employee, or agent and shall
inure to the benefit of the heirs, executors and administrators of such a
person.
<PAGE>
The Board of Directors of the Corporation may, in its discretion, authorize
the Corporation to purchase and maintain insurance on behalf of any person who
is or was a director, officer, employee or agent of the Corporation, or is or
was serving at the request of the Corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise against any liabilities asserted against him or incurred by him in
any such capacity, or arising out of his status as such, whether or not the
Corporation would have the power to indemnity him against such liability under
the foregoing paragraph of this Article Eleventh.
TWELFTH: No director of the Corporation shall be personally liable to the
Corporation or any stockholder of the Corporation for monetary damages for
breach of fiduciary duty as a director, provided that this Article Twelfth shall
not eliminate or limit the liability of a director (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 Title 8 of the Delaware
Code, or (iv) for any transaction from which the director derived an improper
personal benefit. No amendment to or repeal of this Article Thirteenth shall
apply to or have an effect on the liability or alleged liability of any director
of the Corporation for or with respect to any acts or omissions of such director
occurring prior to the effective date of such amendment or repeal.
THIRTEENTH: The Corporation reserves the right to amend, alter, change or
repeal any provisions contained in this Certificate of Incorporation, in the
manner now or hereafter prescribed by statute, and all rights conferred upon
stockholders herein are granted subject to this reservation.
