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Exhibit 2.2
STOCK PURCHASE AND STANDSTILL AGREEMENT
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This STOCK PURCHASE AND STANDSTILL AGREEMENT, dated as of November 3,
2000 (this "Agreement"), is made and entered into by and among READING
ENTERTAINMENT, INC., a Nevada corporation ("Reading"), FA, INC., a Nevada
corporation and a wholly owned subsidiary of Reading ("FA"), CITADEL HOLDING
CORPORATION, a Nevada corporation ("Citadel"), and XXXXX CORPORATION, a Nevada
corporation ("Xxxxx" and, collectively with Reading, FA and Citadel, the
"Stockholders"), on the one hand, and NATIONAL AUTO CREDIT, INC., a Delaware
corporation ("NAC" or the "Company"), on the other hand.
WHEREAS, certain disputes and differences have arisen between the
Company and Xxx X. Xxxxxxxx, a former executive officer and current director and
stockholder of the Company ("Xxxxxxxx"), and certain of his affiliates
(collectively, the "Xxxxxxxx Parties"), which disputes have resulted in
litigation styled National Auto Credit, Inc. v. Xxx X. Xxxxxxxx, C.A. No. 17973
and Xxx X. Xxxxxxxx v. Xxxxx X. Xxxxx, et al., C.A. No. 17984, both pending in
the Court of Chancery of the State of Delaware (collectively referred to herein
as the "Actions"); and
WHEREAS, the Xxxxxxxx Parties and the Company wish to enter into a
settlement agreement in the form attached as Attachment A to this Agreement (the
"Settlement Agreement") pursuant to which, among other things, (i) all disputes
between the Company and the Xxxxxxxx Parties, including the Actions, will be
settled without the admission of fault by any of them and (ii) the Company will
repurchase all of the shares of common stock, par value $.05 per share, of the
Company ("Company Common Stock") beneficially owned by the Xxxxxxxx Parties; and
WHEREAS, the Stockholders own an aggregate of 10,055,000 shares of
Company Common Stock (the "Common Shares") and 100 shares of Series A
Convertible Preferred Stock, par value $.05 per share, of the Company (the
"Preferred Shares" and, together with the Common Shares, the "Shares") and,
absent the repurchase by the Company of certain of the Shares, as contemplated
hereby, the consummation of the transactions contemplated by the Settlement
Agreement would have the effect of vesting ownership of shares representing a
majority of the voting power of the Company in the Stockholders; and
WHEREAS, the Stockholders support the execution of the Settlement
Agreement by the Company and the consummation by the Company of the transactions
contemplated thereby and desire to assist the Company in its efforts to resolve
the disputes between it and the Xxxxxxxx Parties, including the Actions; and
WHEREAS, in furtherance of the foregoing, the Company desires to
acquire from FA and FA is willing to sell to the Company Five Million Two
Hundred Seventy-Seven Thousand Eight Hundred Seventy-Nine (5,277,879) of the
Common Shares and all 100 of the Preferred Shares (collectively, the "Subject
Shares"), upon the terms and subject to the conditions hereinafter set forth,
such that at the time of the purchase of the Subject Shares, and after giving
effect to the transactions contemplated by the Settlement Agreement, the
Stockholders shall own an aggregate of 33% of the issued and outstanding shares
of Company Common Stock, on a fully diluted basis
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(based on the number of shares of Company Common Stock issued and outstanding on
the date hereof, assuming the prior exercise, conversion or exchange, as the
case may be, of any options, warrants, rights to acquire and securities
convertible into or exchangeable for such Company Common Stock issued and
outstanding on the date hereof, and after taking into account the repurchase by
the Company of the Common Shares owned by the Xxxxxxxx Parties, which repurchase
is occurring simultaneously with the execution and delivery of this Agreement);
and
WHEREAS, the Stockholders are willing to agree to certain restrictions
regarding the shares of the Company Common Stock they will continue to own
following the consummation of the transactions contemplated hereby.
NOW THEREFORE, in consideration of the above premises and the promises
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Stockholders and the Company
hereby agree as follows:
1. Repurchase of Subject Shares.
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(a) Upon the terms and subject to the conditions of this
Agreement, at the closing of the transactions contemplated hereby (the
"Closing"), which Closing is taking place contemporaneously with the execution
and delivery of the Agreement by the parties hereto, FA shall sell, transfer and
convey to the Company, and the Company shall acquire from FA, the Subject Shares
at a purchase price equal to the sum of (a) Seven Million Nine Hundred Sixteen
Thousand Nine Hundred Sixty-Eight Dollars and Fifty Cents ($7,916,968.50) ($1.50
per Subject Share) and (b) an interest factor accruing from April 5, 2000 to the
date of the Closing at the simple annual rate of 12% (collectively, the
"Purchase Price").
(b) At the Closing (A) the Company shall deliver to FA (i) the
Purchase Price, in immediately available United States Dollars, by wire transfer
to a bank account designated by FA, and (ii) an irrevocable instruction to its
transfer agent to issue a certificate representing 1,484,368 Common Shares,
representing the Common Shares in excess of the Subject Shares represented by
the Certificate (defined hereinbelow), duly executed by the Company in
contemplation of delivery of the same to FA at Closing hereunder (the "Excess
Shares"); and (B) FA shall deliver to the Company (i) a certificate (the
"Certificate") representing 6,762,247 Common Shares, duly endorsed or
accompanied by stock powers duly executed in blank and otherwise in form
reasonably satisfactory to the Company for transfer on the books of the Company
and (ii) such other instruments and documents as may be reasonably requested by
the Company to evidence its purchase of the Subject Shares. At the Closing,
subject to the delivery of the Purchase Price in accordance with this Paragraph,
FA shall simultaneously sell, convey, assign, transfer and deliver to the
Company, and the Company shall purchase, acquire and accept from FA, good and
valid title to the Subject Shares, free and clear of all liens, claims, charges
or other encumbrances (collectively, "Liens").
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2. Representations and Warranties of the Company.
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The Company hereby represents and warrants to the Stockholders as
follows:
(a) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and has
all requisite corporate power and corporate authority to enter into this
Agreement, and to consummate the transactions contemplated hereby.
(b) The execution, delivery and performance by the Company of
this Agreement, and the consummation by the Company of the transactions
contemplated hereby, have been authorized by all necessary corporate action.
This Agreement has been duly executed and delivered by the Company and, assuming
that this Agreement constitutes a valid and binding obligation of each of the
Stockholders, constitutes a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms.
(c) The execution and delivery by the Company of this
Agreement do not, and the consummation by the Company of the transactions
contemplated hereby and compliance by the Company with the terms hereof will
not, conflict with, or result in any violation of or default under (i) any
provision of the Company's Restated Certificate of Incorporation, as amended,
the Company's Amended and Restated By-Laws or any other similar organizational
documents of the Company, (ii) any judgment, order, injunction or decree (an
"Order"), or statute, law, ordinance, rule or regulation ("Applicable Law"),
applicable to the Company or the property or assets of the Company or (iii) any
note, bond, mortgage, indenture, license, agreement, lease or other instrument
or obligation ("Contracts") to which the Company is party or by which the
Company or any of the Company's assets may be bound. No consent, approval, order
or authorization of, notice to, or registration, declaration or filing with
("Governmental Approval") any court, administrative agency or commission or
other governmental entity, authority or instrumentality, domestic or foreign
("Governmental Authority"), is required to be obtained or made by or with
respect to the Company in connection with the execution and delivery of this
Agreement or the consummation by the Company of the transactions contemplated
hereby.
(d) Set forth on ATTACHMENT B are true, correct and complete
schedules setting forth the following:
(i) The total number of shares of Company Common Stock
currently issued and outstanding;
(ii) The total number of shares of Company Common Stock being
simultaneously repurchased from the Xxxxxxxx Parties;
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(iii) The total number of shares of Company Common Stock
subject to issuance upon the exercise of currently outstanding stock
options, calculated without reference to whether or not such options
are currently vested or exercisable;
(iv) The total number of shares of Company Common Stock
subject to issuance upon the exercise of conversion or exchange rights
under securities convertible into or exchangeable for Company Common
Stock or the exercise of any other rights to acquire Company Common
Stock, calculated without reference to whether or not such conversion,
exchange or other rights are currently vested or exercisable;
(v) All outstanding equity securities of the Company, other
than Company Common Stock; and
(vi) All outstanding commitments to issue, grant or otherwise
transfer to any person any equity securities of the Company or any of
its subsidiaries, or any other securities convertible into or
exchangeable for or any other right to acquire equity securities of the
Company or any of its subsidiaries, calculated without reference to
whether such conversion, exchange or other rights are currently vested
or exercisable.
(e) The Settlement Agreement, attached hereto as ATTACHMENT A,
is a true, correct and complete copy of the settlement agreement with Xxxxxxxx
encompassing and including all agreements between the Company, its officers,
directors, affiliates and associates, on the one hand, and Xxxxxxxx, his
affiliates, associates, relatives and related parties, on the other hand, and is
being simultaneously entered into by the parties thereto.
(f) Immediately following the Closing, the Board of Directors
of the Company will be comprised of the individuals set forth an ATTACHMENT C,
all of whom have agreed to continue as directors of the Company for the
remainders of their respective terms, as such terms are likewise set forth on
ATTACHMENT C.
(g) Attached hereto as ATTACHMENT D is a true and correct copy
of the Amended and Restated By-Laws of the Company, as presently in force.
(h) Attached hereto as ATTACHMENT E is a schedule of all
Affiliate Agreements (as such term is defined in Xxxxxxxxx 0, xxxxx) to which
the Company is a party as of the date hereof, together with a summary of the
principal business terms of each such Affiliate Agreement.
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3. Representations and Warranties of the Stockholders.
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The Stockholders represent and warrant to the Company as set forth
below. The representations and warranties set forth in clauses (a) through (c)
are made on an individual basis, and each Stockholder makes the representations
and warranties set forth therein only with respect to itself. The
representations set forth in clause (d) below are made by the Stockholders on a
joint and several basis.
(a) Each of the Stockholders is a corporation duly organized,
validly existing and in good standing under the laws of the state of its
incorporation, and each has all requisite power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby.
(b) The execution, delivery and performance by each of the
Stockholders of this Agreement, and the consummation by each of the Stockholders
of the transactions contemplated hereby, have been authorized by all necessary
action, corporate or otherwise. This Agreement has been duly executed and
delivered by each of the Stockholders, and, assuming that this Agreement
constitutes a valid and binding obligation of the Company, constitutes a valid
and binding obligation of each such Stockholder, enforceable against each such
Stockholder in accordance with its terms.
(c) The execution and delivery by each Stockholder of this
Agreement do not, and the consummation by each Stockholder of the transactions
contemplated hereby and compliance by each Stockholder with the terms hereof
will not, conflict with, or result in any violation of or default under, (i) any
provision of the certificate of incorporation, by-laws or any other similar
organizational documents of such Stockholder, (ii) any Order, or Applicable Law,
applicable to any of the Stockholders or the property or assets of any such
Stockholder or (iii) any Contracts to which any Stockholder is a party or by
which any Stockholder or any Stockholder's assets may be bound. No Governmental
Approval of any Governmental Authority is required to be obtained or made by or
with respect to any Stockholder in connection with the execution and delivery of
this Agreement by such Stockholder or the consummation by such Stockholder of
the transactions contemplated hereby.
(d) The Stockholders own an aggregate of 10,055,000 shares of
Company Common Stock and 100 shares of Series A Convertible Preferred Stock, par
value $.05 per share, of the Company ( "Company Preferred Stock"), in each case,
including the Subject Shares, and have good and valid title to such Shares, free
and clear of all Liens, and such Shares are the only securities of the Company
that the Stockholders or any of their Affiliates (as defined below) own
beneficially or of record as of the date hereof. As used herein, the term
"Affiliate" shall mean (i) any entity in which any one or more of the
Stockholders owns, directly or indirectly, a greater than 15% beneficial
interest, (ii) any partnership in which any of the Stockholders is a general
partner or managing member and (iii) any entity in which Xxxxx X. Xxxxxx
("Xxxxxx") or any of his children owns, directly or indirectly, a greater than
10% beneficial interest (other than through their ownership interest in any of
the Stockholders) or in which Xxxxxx or any of his children serves as an
officer, director, general partner or managing member. Notwithstanding the
foregoing, no entity shall be deemed to
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be an Affiliate for purposes of this Agreement if, and to the extent that, such
entity acquires, or continues to hold, shares of Company Common Stock or other
equity securities of the Company (i) over the opposition of any of the
Stockholders or Xxxxxx, which opposition shall be expressed in writing with a
copy delivered to the Company in accordance with the notice provisions set forth
in Paragraph 11 hereof, and (ii) with the intention or for the purpose of
causing a breach of the obligations of any of the Stockholders to the Company
pursuant to this Agreement. The term "Affiliate" shall not include the Company
or any of its subsidiaries or Xxxx Biomedical, Inc. ("Xxxx"), so long as, in the
case of Xxxx, the combined ownership, direct or indirect, of the Stockholders in
such company represents less than 20% of the voting power of such company. To
the best knowledge and belief of each of the Stockholders, Xxxx does not
beneficially own any of the Company's equity securities.
4. Standstill Agreement.
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(a) Each of the Stockholders hereby covenants and agrees that,
from and after the date hereof and at all times through and including August 31,
2003, unless this Agreement shall be earlier terminated in accordance with the
provisions of Paragraph 10 hereof, they, and each of them, will not, nor will
they permit their respective Affiliates to, directly or indirectly, in any
manner acquire, or agree to acquire, any beneficial interest in any equity
securities of the Company, to the extent that the acquisition of such equity
securities would increase the beneficial ownership of the Stockholders and their
Affiliates to more than 33% of the aggregate voting power of the Company's
equity securities then outstanding, calculated on a fully diluted basis.
(b) Each of the Stockholders hereby covenants and agrees that,
from and after the date hereof and at all times through and including August 31,
2003, unless this Agreement shall be earlier terminated in accordance with the
provisions of Paragraph 10 hereof, they, and each of them, will not, nor will
they permit their respective Affiliates, to make or in any way participate in
any "solicitation" of "proxies" (as such terms are used in the proxy rules of
the United States Securities and Exchange Commission) to vote any voting
securities of the Company ("Company Voting Stock") in connection with the
election of the directors of the Company (other than proxies to vote Company
securities beneficially owned by any one or more of the Stockholders and/or
their respective Affiliates, which proxies shall be voted in accordance with
Paragraph 6, hereof), or otherwise seek to alter the composition of the
Company's Board of Directors.
(c) Each of the Stockholders hereby covenants and agrees that,
from and after the date hereof and at all times through and including August 31,
2001, unless this Agreement shall be earlier terminated in accordance with the
provisions of Paragraph 10 hereof, they, and each of them, will not, nor will
they permit their Affiliates to make or in any way participate in any way in any
"solicitation" of "proxies" (as such terms are used in the proxy rules of the
United States Securities and Exchange Commission) to vote Company Voting Stock,
with respect to any matter, other than the election of directors of the Company,
which is governed by Paragraph 4(b) hereof (a "Non-Election Issue"), which may
be submitted to a vote of the stockholders of the Company, other than
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proxies to vote Company Voting Stock beneficially owned by any one or more of
the Stockholders and/or their respective Affiliates with respect to any such
Non-Election Issue.
(d) Notwithstanding anything to the contrary contained in
Paragraphs 4(a) through 4(c) hereof, nothing contained in this Agreement shall
be construed to prevent any of the Stockholders or any of their respective
Affiliates from: (i) making a tender offer for all of the outstanding Company
Common Stock so long as such tender offer is made on an any and all basis; or
(ii) communicating with any other holder or holders of the Company's outstanding
securities, including, without limitation, the expression of the opinion of the
Stockholders with respect to any third-party solicitation of proxies, provided
that such Stockholder does not (A) provide to any security holder of the Company
a form of proxy or other authorization permitting the Stockholder (or its
designee) to vote any equity security of the Company on such security holder's
behalf or (B) accept from any security holder of the Company a proxy or other
authorization permitting the Stockholder (or its designee) to vote any equity
security of the Company on such security holder's behalf, provided that clauses
(A) and (B), above, shall not be deemed to prevent the solicitation of proxies
to vote Company securities beneficially owned by such Stockholders, as
contemplated by Paragraphs 4(b) and 4(c) above.
5. Restrictions on Sales of Shares
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(a) From and after the date hereof and at all times prior to
the termination of this Agreement in accordance with the provisions of Paragraph
10 hereof, no Stockholder shall, directly or indirectly, sell, pledge, assign,
dispose of or otherwise transfer (other than in connection with a pledge to
secure indebtedness owed to any one or more institutional lender(s))
(collectively, "Transfer") any of the shares owned by such Stockholder, and no
Stockholder shall permit any Affiliate of such Stockholder to Transfer any of
the shares owned by such Affiliate, in each case, other than to a Permitted
Transferee (as defined below).
(b) As used in this Agreement, the term "Permitted Transferee"
means: (i) the Company and its affiliates (as used in this Agreement, the term
"affiliates" shall have the meaning ascribed to such term in Rule 12b-2 of the
General Rules and regulations promulgated under the Securities Exchange Act of
1934, as amended (the "Exchange Act")); (ii) any Affiliate of any Stockholder
who agrees in writing to be bound by the provisions of Paragraph 4 hereof; (iii)
any Transferee who is a party to any tender offer, merger, reorganization or
transfer of all or substantially all of the assets of the Company approved by
the Board of Directors of the Company; (iv) any Transferee that agrees in
writing to be bound by the provisions of Paragraph 4 hereof; (v) any Transferee
who, after giving effect to the proposed Transfer, will own, directly or
indirectly, beneficially or of record, not more than 15% of the issued and
outstanding Company Voting Stock (including, for purposes of this calculation,
any shares of Company Voting Stock held by affiliates of such Transferee); (vi)
any person or entity to whom a Stockholder Transfers Shares in reliance on the
provisions of Rule 144 promulgated under the Securities Act of 1933, as amended
(other than the provisions of Rule 144(k) thereunder or any successor provision
thereto), and in compliance with the
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restrictions on volume, manner of sale and any other applicable restrictions
imposed thereby; (vii) any Transferee who acquires Shares pursuant to a tender
offer for the securities of the Company or (viii) any successor by merger of any
Stockholder or (ix) any Transferee who acquires shares pursuant to the exercise
of FA's piggyback registration rights or in a registered secondary offering of
Shares, provided that such shares are offered for sale in an underwritten public
offering or otherwise sold in a broadly distributed public offering.
Notwithstanding anything to the contrary contained herein, a Permitted
Transferee that agrees to be bound by the provisions of Paragraph 4 hereof shall
not be entitled to any other rights or benefits under this Agreement; provided
that such limitations will not apply to the transfer under clause (viii) above.
(c) In the case of any Transfer to a Permitted Transferee
under clauses (ii) or (iv) of Paragraph 5(b) above, or, to the extent that the
sale involves a sale of greater than 10% of issued and outstanding Company
Voting Stock, under clause (v) of Paragraph 5(b) above, the Transferring
Stockholder shall deliver to the Company (A) at least seven (7) Business Days
prior to such Transfer, a written notice stating its intention to Transfer the
Shares to be Transferred, the name of the Transferee, whether such Transferee is
an Affiliate, the number of Shares to be Transferred, and the price and other
material terms and conditions of the Transfer, and (B) in the case of any
Transfer to a Permitted Transferee under clauses (ii), (iv) or (viii) of
Paragraph 5(b) above, on or prior to the effective date of such Transfer and in
a form reasonably acceptable to the Company in consultation with its legal
counsel, the Transferee's written acknowledgment of and agreement to be bound by
the provisions of Paragraph 4 hereof. In the case of a Transfer to a Permitted
Transferee made solely under the authority of clause (v) of Paragraph 5(b) above
and involving a sale of greater than 10% of the Company's issued and outstanding
Voting Stock, the Company will have the right, upon notice to the Stockholders,
to terminate the obligations imposed upon the Company pursuant to Paragraph 8(a)
hereof.
(d) At, or promptly following the Closing,
(i) Each certificate representing the Shares, other
than the Subject Shares, shall be stamped or otherwise
imprinted with the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO THE RESTRICTIONS ON TRANSFER CONTAINED IN
THE STOCK PURCHASE AND STANDSTILL AGREEMENT, DATED AS
OF NOVEMBER 3, 2000, BY AND AMONG READING
ENTERTAINMENT, INC., FA, INC., CITADEL HOLDING
CORPORATION, XXXXX CORPORATION AND NATIONAL AUTO
CREDIT, INC. (THE "COMPANY") AND MAY NOT BE
TRANSFERRED EXCEPT AS PERMITTED BY THE TERMS THEREOF.
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(ii) Each certificate representing Shares that were
acquired from the Company by FA on April 5, 2000, shall be
stamped or otherwise imprinted with the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF ANY
STATE. THE SHARES REPRESENTED BY THIS CERTIFICATE MAY
NOT BE OFFERED, SOLD, PLEDGED, ASSIGNED, DISPOSED OF
OR OTHERWISE TRANSFERRED ("TRANSFERRED"), AND THE
COMPANY WILL NOT REGISTER THE TRANSFER OF SUCH
SECURITIES, EXCEPT (A) PURSUANT TO RULE 144 UNDER THE
ACT OR (B) UPON RECEIPT BY THE COMPANY OF AN OPINION
OF COUNSEL, REASONABLY SATISFACTORY TO THE COMPANY,
THAT SUCH TRANSFER IS EXEMPT FROM REGISTRATION UNDER
THE ACT.
With respect to Shares (A) that are Transferred to a Permitted
Transferee pursuant to clauses (iii), (v) or (vii) of Paragraph 5(b) hereof, and
(B) as to which the Transfer restrictions imposed by this Agreement have as a
result of such Transfer terminated, upon request of the Transferring
Stockholder, the Company shall cause to be issued certificates representing such
Shares without the restrictive legend set forth above in clause (i) stamped or
otherwise imprinted thereon. With respect to any Shares (X) that are Transferred
to a Permitted Transferee pursuant to clauses (vi) or (ix) of Paragraph 5(b)
hereof, and (Y) as to which all Transfer restrictions have terminated (including
any Transfer restrictions imposed by this Agreement and any Transfer
restrictions imposed by federal or state securities laws), upon request of the
Transferring Stockholder, the Company shall cause to be issued certificates
representing such Shares without any portion of the restrictive legends set
forth above in clauses (i) and (ii) stamped or otherwise imprinted thereon. Upon
the termination of this Agreement, the Company, upon the request of any holder
of Shares, shall cause to be issued certificates representing such Shares
without the legend set forth above in clause (i) stamped or otherwise imprinted
thereon.
6. Voting Agreement.
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In connection with each election of directors of the Company occurring
after the date hereof and prior to the termination of this Agreement in
accordance with the provisions of Paragraph 10 hereof, whether at an annual or
special meeting of the Company's stockholders or otherwise, each Stockholder
shall vote, or shall cause to be voted, all shares of the Company's outstanding
equity securities as to which such Stockholder exercises voting control in the
same manner and in the same proportion as the shares held by all stockholders of
the Company other than the Stockholders are voted in connection with such
election. Notwithstanding the foregoing, each Stockholder shall be
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free to cast all of the votes which such Stockholder is entitled to cast in
favor of the election of the Stockholder Nominees.
7. Board Representation.
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(a) Upon written notice from the Stockholders designating
their nominees, the Company shall promptly cause two (2) designees of the
Stockholders (including any successors to such designees, the "Stockholder
Nominees") to be appointed to the Company's Board of Directors. So long as the
nominees specified in such notice are directors and/or executive officers of any
one or more of the Stockholders, such nominees shall be appointed to the Board
of Directors of the Company before any other action is taken by the Board of
Directors of the Company (other than ministerial actions such as the calling of
a meeting of the Board of Directors of the Company to take action upon such
nominees). The Stockholder Nominees shall initially be Xxxxx X. Xxxxxx and Xxxxx
X. Xxxxx and shall be appointed to fill vacancies on the Company's Board of
Directors created by the resignation therefrom, as contemplated by the
Settlement Agreement, of Xxxxxxxx and/or certain other individuals appointed by
or affiliated with Xxxxxxxx having terms of office expiring at the 2002 annual
meetings of the Company's stockholders. Until the termination of this Agreement
in accordance with the provisions of Paragraph 10 hereof, the Company shall
cause the Stockholder Nominees to be included in the slate of nominees nominated
by the Company's Board of Directors for election as directors of the Company
with respect to each annual or special meeting of the Company's stockholders
held for the purpose of electing directors of the Company (or with respect to
any election of directors of the Company to be effectuated through action by
written consent), and shall solicit proxies from the holders of the outstanding
Company Voting Stock in favor of the election of the Stockholder Nominees on the
same basis and to the same extent that proxies are solicited in favor of the
election of all other nominees for director of the Company nominated by the
Board of Directors of the Company. Any vacancy on the Company's Board of
Directors created by the resignation or removal of a Stockholder Nominee shall
be filled by the appointment of another Stockholder Nominee. The Stockholders
will cause each Stockholder Nominee to deliver to the Company along with such
Stockholder Nominee's notice of nomination a completed directors and officers
questionnaire in the form then in use by the Company.
(b) The Stockholders acknowledge and agree that the
Stockholder Nominees will be required to recuse themselves from any
deliberations of the Company's Board of Directors regarding whether or not the
Company should or will amend or terminate this Agreement and the Stockholder
Nominees shall not vote on any resolution or other proposed action of the
Company's Board of Directors regarding such amendment or termination.
(c) Until such time as the Stockholder Nominees have been
appointed to the Company's Board of Directors, or in the event that thereafter
any Stockholder Nominee for any reason is not able to attend any meeting of the
Board of Directors or any committee of the Board of Directors on which such
Stockholder Nominee serves, the Stockholders shall be entitled to send an
observer to such meeting in the stead of such absent Stockholder Nominee;
provided that any such
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observer shall not be entitled to vote on any matter before the Company's Board
of Directors, and the presence or absence of such observer shall not be
considered for purposes of determining the existence of a quorum. The costs and
expenses of the attendance of such observer at any such meeting will be treated
the same as if such cost or expense had been incurred by a director of the
Company.
(d) The Company shall give to the Stockholder Nominees (and
prior to the appointment of such Stockholder Nominees, to the Stockholders) not
less than three (3) full business days notice of any meeting of the Board of
Directors of the Company or any meeting of any committee of the Board of
Directors of the Company upon which any Stockholder Nominee serves. In other
words, and by way of example, notice of any meeting to be held on a Friday must
be received by not later than the close of business on the preceding Monday,
assuming that there are no legal holidays during such period. This notice must
be accompanied by an agenda for the meeting, and copies of any and all materials
provided to any one or more of the other directors of the Company with respect
to that meeting. In the event that materials are distributed to any one or more
directors of the Company following the giving of such notice, copies of such
materials will be provided to the Stockholder Nominees (and prior to the
appointment of such Stockholder Nominees, to the Stockholders) on the same day
as they are provided to such directors. The purpose of this provision is to
ensure that the Stockholder Nominees (or prior to the appointment of such
Stockholder Nominees, the Stockholders) are provided the same access to
information as any other director of the Company.
8. Company Covenants.
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(a) At all times from and after the date hereof until the
earliest to occur of (i) the preparation, adoption and public disclosure by the
Board of Directors of the Company of a five-year business plan for the Company
and its subsidiaries on a consolidated basis (the Company and its subsidiaries
being collectively referred to herein on a consolidated basis as "NAC") and (ii)
the termination of this Agreement in accordance with the provisions of Paragraph
10 hereof, the Company shall not, directly or indirectly through one or more
affiliates (A) acquire any assets, in any transaction or in any series of
related transactions, by merging or consolidating or otherwise combining with
any one or more corporations, partnerships or/or other entities, or by purchase
(whether for cash, debt and/or securities) in a transaction which would be
material to NAC or (B) issue, in any transaction or in any series of related
transactions, a material amount of the securities of NAC.
(b) At all times from and after the date hereof until the
termination of this Agreement in accordance with the provisions of Paragraph 10
hereof, the Company, consistent with the stockholder approval policy of The
Nasdaq Stock Market, as set forth in Section 4310(G) of the National Association
of Securities Dealers, Inc. Manual or any successor provision thereto, shall
obtain the approval of its stockholders for any plan or arrangement: (i) in
connection with the acquisition of the stock or assets of another company (A) if
any director, officer or substantial
11
12
stockholder of the Company has a 5% or greater interest (or such persons
collectively have a 10% or greater interest), directly or indirectly, in the
company or assets to be acquired or in the consideration to be paid in the
transaction or series of related transactions and the present or potential
issuance of Company Voting Stock, or securities convertible into or exercisable
or exchangeable for Company Voting Stock, could result in an increase in
outstanding shares of Company Voting Stock or voting power of 5% or more; or (B)
where, due to the present or potential issuance of Company Voting Stock, or
securities convertible into or exercisable or exchangeable for Company Voting
Stock, other than pursuant to a public offering for cash, (1) the Company Voting
Stock (or securities convertible into or exercisable or exchangeable for Company
Voting Stock) to be issued has or will have upon issuance voting power equal to
or in excess of 20% of the voting power outstanding before the issuance of such
Company Voting Stock or such securities convertible into or exercisable or
exchangeable for Company Voting Stock; or (2) the number of shares of Company
Voting Stock (or securities convertible into or exercisable or exchangeable for
Company Voting Stock) to be issued is or will be equal to or in excess of 20% of
the number of shares of Company Voting Stock outstanding before the issuance of
the stock or securities; (ii) in connection with a transaction other than a
public offering involving (A) the sale or issuance by the Company of Company
Voting Stock (or securities convertible into or exercisable or exchangeable for
Company Voting Stock) at a price less than the greater of book or market value,
which sale or issuance, together with sales by officers, directors or
substantial stockholders of the Company, equals 20% or more of the Company
Voting Stock or 20% or more of the voting power outstanding before the issuance;
or (B) the sale or issuance by the Company of Company Voting Stock (or
securities convertible into or exercisable or exchangeable for Company Voting
Stock) equal to 20% or more of the Company Voting Stock or 20% or more of the
voting power outstanding before the issuance; or (iii) pursuant to which any
person shall acquire more than 33% of the Company's total assets (calculated on
a consolidated basis in accordance with United States generally accepted
accounting principles, consistently applied). Notwithstanding the foregoing, the
Company and the Stockholders shall amend this Paragraph 8(b) if, and to the
extent that, any such amendment is necessary to attain compliance with the
listing criteria of any recognized securities exchange or automated inter-dealer
quotation system upon which listing of the Company's securities is sought or
obtained. The Company represents that it is not currently aware of any such
listing criteria which would require such amendment.
(c) The Company shall give prompt notice to the Stockholders
of any proposed changes to the Settlement Agreement.
9. Related Party Transactions.
--------------------------
From and after the date hereof, until the termination of this Agreement
in accordance with the provisions of Paragraph 10 hereof, the Board of Directors
of the Company shall periodically conduct a review of all Related Party
Transactions, defined below and shall utilize the Audit Committee or a
comparable committee of the Company's Board of Directors, in either event,
consisting entirely of disinterested directors, for review of potential conflict
of interest situations. Moreover, until the termination of this Agreement in
accordance with the provisions of Paragraph 10
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hereof, NAC shall not make any payments, loans, advances or other distributions
to, or enter into any transaction, agreement or arrangement (each, a "Related
Party Transaction") with, any of its affiliates, officers, directors or
stockholders or any associates or family members of any of the foregoing
(collectively, the "Company Affiliates"), or make any changes in or modify any
agreements, Contracts, arrangements, payables, obligations or understandings
between NAC and any such Company Affiliate (the "Affiliate Agreements"), other
than in the ordinary course of business consistent with past practice or as
required by the Affiliate Agreements, unless such Related Party Transaction or
Affiliate Agreement amendment shall have previously been approved by the
Company's Board of Directors (including by a majority of the disinterested
directors) or by a committee of the Company's Board of Directors consisting
solely of disinterested directors.
10. Termination.
-----------
(a) This Agreement may be terminated at any time:
(i) by mutual written agreement of the Company and
the Stockholders;
(ii) by either the Company or the Stockholders,
effective upon notice to the other party or parties of such
termination, if any Governmental Authority shall have issued
an order, decree or ruling or taken any other action (which
order, decree or ruling the parties shall use their reasonable
best efforts to lift), in each case permanently restraining,
enjoining or otherwise prohibiting the transactions
contemplated by this Agreement, and such order, decree, ruling
or other action shall have become final and nonappealable;
(iii) by either the Company or the Stockholders,
effective upon notice to the other party or parties of such
termination, if a proposal to sooner terminate the Agreement
is approved by either (A) the holders of a majority of the
combined voting power of the Company's outstanding capital
stock entitled to vote thereon (calculated without reference
to any equity securities of the Company held by the
Stockholders or their respective Affiliates) or (B) a majority
of the independent Directors of the Company (provided that, in
the case of a termination under clause (B) above, the
provisions of Paragraphs 8 and 9 hereof will survive any such
termination until immediately following the next annual
meeting of the Company's stockholders occurring not less than
120 days following receipt of notice of such termination);
(iv) by either the Company or the Stockholders,
effective upon notice to the other party or parties of such
termination, in the event that any person or entity not
affiliated with, or acting at the request or direction of, the
Company or any of the Stockholders, directly or indirectly,
shall in any manner acquire, agree to acquire or initiate a
fully financed and unconditional (other than usual and
customary conditions
13
14
to closing) tender offer or exchange offer seeking to acquire,
directly or indirectly, a beneficial interest in securities of
the Company representing in excess of 15% of the then issued
and outstanding Company Voting Stock;
(v) by either the Company or the Stockholders,
effective upon notice to the other party or parties of such
termination, in the event that the Board of Directors of the
Company shall propose any Change in Control Transaction (as
defined below); provided that in the case of a termination
under this Paragraph 10(a)(v), the provisions of Paragraphs 6,
8(b) and 9 will survive any such termination until immediately
following the next annual meeting of the Company's
stockholders occurring not less than 120 days following
receipt of notice of such termination. As used in this
Agreement, the term "Change in Control Transaction" means (i)
any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) or all or
substantially all of the assets of the Company; (ii) any sale,
lease exchange or other transfer (in one transaction or a
series of related transactions) of shares of capital stock of
the Company such that any person or group (other than the
holders generally of the Company's capital stock immediately
prior to such transaction or series of transactions) shall
become the owner, directly or indirectly, beneficially or of
record, of shares representing more than twenty percent (20%)
of the aggregate ordinary voting power represented by the
issued and outstanding Company Voting Stock ; or (iii) any
merger, consolidation, recapitalization, acquisition or
similar transaction (other than any such transaction involving
only the Company and/or one or more wholly owned subsidiaries
of the Company) in which the outstanding Company Voting Stock
is converted into or exchanged for cash, securities or other
property, such that immediately after such transaction any
person or group (other than the holders generally of such
capital stock immediately prior to such transaction or series
of transactions) shall become the owner, directly or
indirectly , beneficially or of record, of shares representing
more than twenty percent (20%) of the aggregate ordinary
voting power represented by the issued and outstanding Company
Voting Stock; or
(vi) by the Stockholders, effective upon notice to
the Company of such termination, in the event that any
Stockholder Nominee, in favor of whose election to the
Company's Board of Directors each of the Stockholders has
voted its Shares, is (A) not elected to the Company's Board of
Directors as a result of any action or inaction by the Company
or (B) removed from the Company's Board of Directors and not
replaced by another Stockholder Nominee; PROVIDED, HOWEVER,
that the resignation of a Stockholder Nominee or the refusal
of a Stockholder Nominee to stand for election shall not
result in a termination of this Agreement pursuant to this
Paragraph 10(a)(vi) so long as any vacancy resulting from such
resignation or refusal is filled by a Stockholder Nominee
promptly following the receipt by the Company of written
notification from the Stockholders as to the identity of such
replacement
14
15
Stockholder Nominee and a completed directors and officers
questionnaire in the form used by the Company in connection
with its most recent annual meeting of stockholders.
(b) This Agreement shall terminate automatically, and without
any action on the part of any party hereto:
(i) in the event that the Stockholders collectively
own, directly or indirectly, beneficially or of record,
together with all Affiliates of such Stockholders, Shares
representing, in the aggregate, less than 10% or 90% or more
of the Company's then issued and outstanding Company Voting
Stock; or
(ii) on August 31, 2003.
11. Notices.
-------
All notices and other communications hereunder shall be in writing and
shall be deemed given on the day when delivered personally or by facsimile
transmission (with confirmation), on the next Business Day when delivered to a
nationally recognized overnight courier or five (5) Business Days after
deposited as registered or certified mail (return receipt requested), in each
case, postage prepaid, addressed to the recipient party at its address set forth
below (or at such other address or facsimile number for a party as shall be
specified by like notice; provided, however, that any notice of a change of
address or facsimile number shall be effective only upon receipt thereof):
(a) If to the Company, to:
National Auto Credit, Inc.
00000 Xxxxxx Xxxx
Xxxxx, Xxxx 00000
Attention: Xxxxx X. Xxxxx, Chief Executive Officer
Facsimile: (000) 000-0000
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx X. Xxxxxx, Esquire
Facsimile: (000) 000-0000
15
16
and
De Xxxxxxx Xxxxxxxxxxx Xxxxx & Xxxxx
0000 X. Xxxxxx, X.X., Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxx X. XxXxxxxxx, Esq.
Facsimile: (000) 000-0000
(b) if to the Stockholders, to:
In the case of Reading Entertainment, Inc., to:
Reading Entertainment, Inc.
000 X. Xxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: S. Xxxxx Xxxxxxxx, Vice Chairman
Facsimile: (000) 000-0000
In the case of FA, Inc., to:
c/o Reading Entertainment, Inc.
000 X. Xxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx Xxxxxxxxxx 00000
Attention: S. Xxxxx Xxxxxxxx, Vice Chairman
Facsimile: (000) 000-0000
In the case of Citadel Holding Corporation, to:
c/o Reading Entertainment, Inc.
000 X. Xxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: S. Xxxxx Xxxxxxxx, Vice Chairman
Facsimile: (000) 000-0000
In the case of Xxxxx Corporation, to:
c/o Reading Entertainment, Inc.
000 X. Xxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: S. Xxxxx Xxxxxxxx, President
Facsimile: (000) 000-0000
16
17
12. Miscellaneous.
-------------
(a) This Agreement may not be amended except pursuant to a
writing signed by all parties hereto. Notwithstanding anything to the contrary
contained herein, the Stockholders shall not be entitled to amend the provisions
of Paragraph 4 hereof unless: (i) the holders of a majority of the combined
voting power of the Company's outstanding capital stock entitled to vote thereon
(calculated without reference to any equity securities of the Company held by
the Stockholders or their respective Affiliates) shall approve a proposal
submitted by the Board of Directors of the Company authorizing such amendment or
(ii) a majority of the independent members of the Company's Board of Directors
shall approve a resolution authorizing such amendment.
(b) Unless specifically provided herein, this Agreement is not
intended to create, and shall not create, any rights in any person or entity
that is not a party to this Agreement.
(c) This Agreement has been prepared, and negotiations in
connection with it have been carried on, by the efforts of each of the parties
hereto, and this Agreement is to be construed fairly and in accordance with its
plain meaning, and not strictly against any particular party, and no party
hereto shall be deemed to be the draftsperson hereof.
(d) This Agreement constitutes the entire understanding of the
parties concerning its subject matter and may not be modified, altered, or
discharged except by a writing signed by all of the parties. No representations
or promises except those set forth herein have been made to induce any party to
enter into this Agreement.
(e) This Agreement shall be binding on each of the parties
hereto and on their respective successors and assigns.
(f) The representations and warranties set forth in Paragraphs
2 and 3 hereof shall survive indefinitely following the execution and delivery
of this Agreement and the consummation of the transactions contemplated hereby.
(g) This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, excluding its choice of law
or conflicts of law or other provisions which might result in the selection of
the substantive law of another jurisdiction. Each party hereto agrees that any
claim relating to this Agreement shall be brought solely in the State or Federal
Court for such jurisdiction, and each party hereto consents to the jurisdiction
of such Court for purposes hereof.
(h) This Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
17
18
(i) If any provision in this Agreement shall be found or be
held to be invalid or unenforceable, then the meaning of such provision shall be
construed, to the extent feasible, so as to render the provision enforceable,
and if no feasible interpretation would save such provision, it shall be severed
from the remainder of this Agreement which shall remain in full force and effect
unless the severed provision is essential and material to the rights or benefits
received by any party hereto. In such event, the parties to this Agreement shall
use best efforts to negotiate, in good faith, a substitute, valid and
enforceable provision or agreement which most nearly effects the parties' intent
in entering into this Agreement.
[SIGNATURE PAGE FOLLOWS]
18
19
IN WITNESS WHEREOF, the undersigned parties have executed this Stock
Purchase and Standstill Agreement as of the date first above written.
NATIONAL AUTO CREDIT, INC.
By:
------------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
READING ENTERTAINMENT, INC.
By:
------------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
FA, INC.
By:
------------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
CITADEL HOLDING CORPORATION
By:
------------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
XXXXX CORPORATION
By:
------------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
19
20
ATTACHMENT A
SETTLEMENT AGREEMENT AND RELEASE
(INCLUDING AGREEMENT FOR SALE OF SHARES)
21
ATTACHMENT B
NATIONAL AUTO CREDIT, INC.
COMMON STOCK OUTSTANDING AS OF NOVEMBER 3, 2000
22
ATTACHMENT B
------------
NATIONAL AUTO CREDIT, INC.
COMMON STOCK OUTSTANDING
AS OF 11/03/00
COMPANY TREASURY SHARES OF COMPANY
COMMON STOCK SHARES OF COMMON STOCK
COMPANY
COMMON
ISSUED STOCK OUTSTANDING
------ ----- -----------
NUMBER OF SHARES AT 11/03/00 36,710,907 (1,957,945) 34,752,962
Purchase of shares of Company Common Stock held by
the Xxxxxxxx Parties and certain related parties: 15,921,865 (15,921,865) (15,921,865)
Purchase of shares of Company Common Stock held by Citadel
and FA, Inc.:
Total shares of Company Common Stock held by
Citadel and FA, Inc. 10,055,000
Shares of Company Common Stock purchased by NAC (5,277,879) (5,277,879) (5,277,879)
---------------
Remaining shares of Company Common Stock held by
Citadel and FA, Inc. 4,777,121
---------------
--------------------------------------------------------
TOTAL SHARES OUTSTANDING 36,710,907 (23,100,876) 13,610,031
--------------------------------------------------------
Shares of Company Common Stock subject to issuance upon exercise of
options outstanding:
1993 Equity Plan 855,000 855,000
1983 Stock Option Plan 4,400 4,400
--------------------------------------------------------
TOTAL SHARES OF COMPANY COMMON STOCK OUTSTANDING ON A
FULLY DILUTED BASIS 37,570,307 (22,922,023) 14,648,284
========================================================
Ownership of Citadel and FA on shares outstanding 35.1%
Ownership of Citadel and FA on a fully diluted basis 33.0%
23
ATTACHMENT B
------------
SCHEDULE (i)
The total number of shares of Company Common Stock currently outstanding:
34,752,962
24
ATTACHMENT B
------------
SCHEDULE (ii)
The total number of shares of Company Common Stock being simultaneously
repurchased from the Xxxxxxxx Parties:
15,743,012
25
ATTACHMENT B
------------
SCHEDULE (iii)
The total number of shares of Company Common Stock subject to issuance upon the
exercise of currently outstanding stock options, calculated without reference to
whether or not such options are currently vested or exercisable:
859,400
26
ATTACHMENT B
------------
SCHEDULE (iv)
The total number of shares of Company Common Stock subject to issuance upon the
exercise of conversion or exchange rights under securities convertible into or
exchangeable for Company Common Stock or the exercise of any other rights to
acquire Company Common Stock, calculated without reference to whether or not
such conversion, exchange or other rights are currently vested or exercisable:
100 shares of Series A Preferred Stock
27
ATTACHMENT B
------------
SCHEDULE (v)
All outstanding equity securities of the Company, other than Company Common
Stock:
100 Shares of Series A Preferred Stock
28
ATTACHMENT B
------------
SCHEDULE (vi)
All outstanding commitments to issue, grant or otherwise transfer to any person
any equity securities of the Company or any of its subsidiaries, or any other
securities convertible into or exchangeable for or any other right to acquire
equity securities of the Company or any of its subsidiaries, calculated without
reference to whether such conversion, exchange or other rights are currently
vested or exercisable:
None, except as provided in Attachment B Schedules (i) through (v).
29
ATTACHMENT C
POST-CLOSING COMPOSITION OF
NATIONAL AUTO CREDIT, INC.
BOARD OF DIRECTORS
30
ATTACHMENT C
POST-CLOSING COMPOSITION OF NATIONAL AUTO CREDIT, INC. BOARD OF DIRECTORS:
NAME TERM EXPIRES AT ANNUAL MEETING
---- ------------------------------
Xxxxx X. XxXxxxxx Through 2000
Xxxxxxx X. Xxxxxx Through 2000
Xxxxx Xxxxxxxxx Through 1999(1)
Xxxxxx Xxxxxxxx Through 2001
Xxxxx Y. L. Toh Through 2001
Xxxx X. Xxxxxxx Through 2000
Xxxxxxx X. Xxxxxxxx Through 2001
Xxxxx Xxxxx Through 2002
Xxxxx X. Xxxxxx Through 2002
Xxxxx X. Xxxxx Through 1999(1)
--------
(1) Xxxxx Xxxxxxxxx and Xxxxx X. Xxxxx stand for re-election at the next Annual
Meeting of National Auto Credit, Inc.'s shareholders with their terms to expire
in 2002.
31
ATTACHMENT D
AMENDED AND RESTATED BY-LAWS OF
NATIONAL AUTO CREDIT, INC.
32
ATTACHMENT D
AMENDED AND RESTATED BY-LAWS OF NATIONAL AUTO CREDIT, INC.
Incorporated Under the Laws of the State of Delaware
ARTICLE I.
OFFICES
Section 1. REGISTERED OFFICE. The registered office of the corporation
shall be in the City of Wilmington, County of New Castle, State of Delaware.
Section 2. OTHER OFFICES. The corporation may also have offices at such
other places both within and without the State of Delaware as the board of
directors may from time to time determine or the business of the corporation may
require.
ARTICLE II.
FISCAL YEAR - STOCKHOLDERS
Section 1. FISCAL YEAR. The first fiscal year of the
corporation shall end January 31, 1996 and thereafter commence on the first day
of February each year and end on the last day of January unless changed from
time to time by action of the board of directors.
Section 2. ANNUAL MEETING. The annual meeting of the
stockholders for the election of directors and for the transaction of any other
proper business, shall be held at such date and time during the first eight
months of each calendar year as shall be determined by the board of directors.
If no earlier date is determined by the board of directors, the annual meeting
shall be held on the fourth Tuesday in August of each year, if not a legal
holiday under the laws of the State where such meeting is to be held and if a
legal holiday under the laws of such State, then on the next succeeding business
day not a legal holiday under the laws of such State.
33
Section 3. SPECIAL MEETINGS. Special meetings of the
stockholders, for any purpose or purposes, unless otherwise provided by statute
or by the Certificate of Incorporation, may be called at any time by the
chairman of the board, or the president, or any vice president, or secretary,
and shall be called by the president or secretary at the request in writing of a
majority of the directors, or at the request in writing of stockholders owning a
majority in amount of the entire capital stock of the corporation issued and
outstanding and entitled to vote. Any such request shall state the purpose or
purposes of the proposed meeting.
Section 4. PLACE OF MEETINGS. All meetings of the stockholders
for the election of directors shall be held at such place either within or
without the State of Delaware as shall be designated from time to time by the
board of directors and stated in the notice of the meeting. Meetings of
stockholders for any other purpose may be held at such time and place, within or
without the State of Delaware, as shall be stated in the notice of such meeting.
Section 5. NOTICE OF MEETINGS AND ADJOURNED MEETINGS. Written
notice of the annual meeting or a special meeting stating the place, date and
hour of the meeting and the purpose or purposes for which the meeting is called
shall be given to each stockholder entitled to vote at such meeting not less
than ten (10) nor more than fifty (50) days before the date of the meeting.
Business transacted at any special meeting of stockholders shall be limited to
the purposes stated in the notice. When a meeting is adjourned to another time
or place, notice need not be given of the adjourned meeting if the time and
place thereof are announced at the meeting at which the adjournment is taken. At
the adjourned meeting the corporation may transact any business which might have
been transacted at the original meeting. If the adjournment is for more than
thirty (30) days or if a new record date is fixed for the adjourned
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34
meeting, a notice of the adjourned meeting shall be given to each stockholder of
record entitled to vote at the meeting.
Section 6. STOCKHOLDERS' LIST. The officer who has charge of
the stock ledger of the corporation shall prepare and make, at least ten (10)
days before every meeting of stockholders, a complete list of the stockholders
entitled to vote at the meeting, arranged in alphabetical order and showing the
address of each stockholder and the number of shares registered in the name of
each stockholder. Such list shall be open to the examination of any stockholder,
for any purpose germane to the meeting, during ordinary business hours, for a
period of at least ten (10) days prior to the meeting, either at a place within
the city where the meeting is to be held, which place shall be specified in the
notice of the meeting, or, if not so specified, at the place where the meeting
is to be held. The list shall also be produced and kept at the time and place of
the meeting during the whole time thereof, and may be inspected by any
stockholder who is present.
Section 7. QUORUM AND ADJOURNMENTS. At such meeting of the
stockholders, except as otherwise provided by statute or by the Certificate of
Incorporation, the holders of a majority of the issued and outstanding shares of
each class of stock entitled to vote thereat, present in person or represented
by proxy, shall be necessary and sufficient to constitute a quorum for the
transaction of business. If, however, such quorum shall not be present or
represented at any meeting of the stockholders, the stockholders entitled to
vote thereat, present in person or represented by proxy, shall have power to
adjourn the meeting from time to time, without notice other than announcement at
the meeting, until a quorum shall be present or represented.
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35
Section 8. VOTING. When a quorum is present or represented at
any meeting, the vote of the holders of a majority of the shares of stock having
voting power present in person or represented by proxy shall decide any question
brought before such meeting, unless the question is one upon which by express
provision of the statutes or of the Certificate of Incorporation or of these
By-Laws a different vote is required, in which case such express provision shall
govern and control the decision of such question.
Section 9. PROXIES. At each meeting of the stockholders, each
stockholder shall, unless otherwise provided by the Certificate of
Incorporation, be entitled to one vote in person or by proxy for each share of
stock held which has voting power upon the matter in question, but no proxy
shall be voted after three years from its date, unless the proxy provides for a
longer period.
Section 10. PROCEDURES FOR ACTION BY WRITTEN CONSENT.
10.1 REQUEST FOR RECORD DATE. (a) The record date for determining
stockholders entitled to express consent to corporate action in writing without
a meeting shall be as fixed by the board or as otherwise established under this
Section 10.1 Any person seeking to have the stockholders authorize or take
corporate action by written consent without a meeting shall, by written notice
addressed to the Secretary and delivered to the Corporation and signed by a
stockholder of record, request that a record date be fixed for such purpose. The
written notice shall contain at a minimum the information set forth in Section
10.1(b). Following receipt of the notice, the board shall have five (5) business
days to determine the validity of the request. Following the determination of
the validity of the request, the board may fix a record date for such purpose
which shall be no more then five (5) business days after the date upon which the
resolution fixing the record date is adopted by the board and shall not precede
the date such
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36
resolution is adopted. If the board fails within ten (10) business days after
the Corporation receives such notice to fix a record date for such purpose, the
record date shall be the day on which the first written consent is delivered to
the Corporation in the manner described in Section 10.3 below unless prior
action by the board is required under the General Corporation Law of Delaware,
in which event the record date shall be at the close of business on the day on
which the board adopts the resolution taking such prior action.
(b) Any stockholder's notice required by this Section 10.1 shall
describe the action that the stockholder proposes to take by consent. For each
such proposal, the notice shall set forth (i) the text of the proposal
(including the text of any resolutions to be effected by consent and the
language of any proposed amendment to the bylaws of the Corporation), (ii) the
reasons for soliciting consents for the proposal, (iii) any material interest in
the proposal held by the stockholder and the beneficial owner, if any, on whose
behalf the action is to be taken, and (iv) any other information relating to the
stockholder, the beneficial owner, or the proposal that would be required to be
disclosed in filings in connection with the solicitation of proxies or consents
pursuant to Section 14 of the Securities Exchange Act of 1934, as amended
("Exchange Act") and the rules and regulations promulgated thereunder. To the
extent the proposed action by consent involves the election of directors, the
notice shall set forth as to each person whom the stockholder proposes to elect
as a director (i) the name, age, business address and residence address of the
person, (ii) the principal occupation and employment of the person, (iii) the
class or series and number of shares of capital stock of the Corporation which
are owned beneficially or of record by the person, and (iv) any other
information relating to the person that would be required to be disclosed in a
proxy statement or other filings required to be made in connection with
solicitations of proxies or consents for the
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37
election of directors pursuant to Section 14 of the Exchange Act and the rules
and regulations promulgated thereunder. In addition to the foregoing, the notice
shall set forth as to the stockholder giving the notice and the beneficial
owner, if any, on whose behalf the notice is given (i) the name and address of
such stockholder and of such beneficial owner, as they appear on the
Corporation's books, (ii) the class and number of shares of capital stock of the
Corporation which are owned beneficially and of record by such stockholder and
such beneficial owner, as to the stockholder giving the notice, (iii) a
description of all arrangements or understandings between such stockholder and
any other person or persons regarding the proposed action by consent, (iv) a
representation whether the stockholder or the beneficial owner, if any, intends
or is part of a group which intends to (1) deliver a proxy statement and/or
consent solicitation statement to holders of at least the percentage of the
Corporation's outstanding capital stock required to effect the action by consent
either to solicit consents or to solicit proxies to execute consents, and/or (2)
otherwise solicit proxies or consents from stockholders in support of the action
to be taken by consent, and (v) any other information relating to such
stockholder that would be required to be disclosed in a proxy statement or other
filings required to be made in connection with solicitations of proxies or
consents relating to the proposed action by consent pursuant to Section 14 of
the Exchange Act and the rules and regulations promulgated thereunder. The
Corporation may require the stockholder of record and/or beneficial owner
requesting a record date for proposed stockholder action by consent to furnish
such other information as it may reasonably require to determine the validity of
the request for a record date.
10.2 FORM OF CONSENT. Every written consent purporting to take or
authorize the taking of corporate action and/or related revocations (each such
written consent and related
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revocation is referred to in this Section 10 as a "Consent") shall bear the date
of signature of each stockholder who signs the Consent, and no Consent shall be
effective to take the corporate action referred to therein unless, within 60
days of the earliest dated Consent delivered in the manner required by this
Section 10.2, Consents signed by a sufficient number of stockholder to take such
action are so delivered to the Corporation.
10.3 DELIVERY OF CONSENT. A Consent shall be delivered to the
Corporation by delivery to its registered office in the State of Delaware or its
principal place of business. Delivery shall be made by hand or by certified or
registered mail, return receipt requested. In the event of the delivery to the
Corporation of a Consent, the Secretary of the Corporation shall provide for the
safe-keeping of such Consent and shall promptly conduct such ministerial review
of the sufficiency of the Consents and of the validity of the action to be taken
by shareholder consent as the Secretary deems necessary or appropriate,
including, without limitation, whether the holders of a number of shares having
the requisite voting power to authorize or take the action specified in the
Consent have given consent; provided, however, that if the corporate action to
which the Consent relates is the removal or replacement of one or more members
of the board, the Secretary of the Corporation shall promptly designate two
persons, who shall not be members of the board, to serve as Inspectors with
respect to such Consent and such Inspectors shall discharge the functions of the
Secretary of the Corporation under this Section 10.3. If after such
investigation the Secretary or the Inspectors (as the case may be) shall
determine that the Consent is valid and that the action therein specified has
been validly authorized, that fact shall forthwith be certified on the records
of the Corporation kept for the purpose of recording the proceedings of meetings
of stockholders, and the Consent shall be filed in such records, at which time
the Consent shall become effective as stockholder
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action. In conducting the investigation required by this Section 10.3, the
Secretary or the Inspectors (as the case may be) may, at the expense of the
Corporation, retain special legal counsel and any other necessary or appropriate
professional advisors, and such other personnel as they may deem necessary or
appropriate to assist them, and shall be fully protected in relying in good
faith upon the opinion of such counsel or advisors.
10.4 EFFECTIVENESS OF CONSENT. No action by written consent without a
meeting shall be effective until such date as the Secretary or the Inspectors,
as applicable, certify to the Corporation that the consents delivered to the
Corporation in accordance with Section 10.3 represent at least the minimum
number of votes that would be necessary to take the corporate action.
10.5 CHALLENGE TO VALIDITY OF CONSENT. Nothing contained in this
Section 10 shall in any way be construed to suggest or imply that the board or
any stockholder shall not be entitled to contest the validity of any consent or
revocation thereof, whether before or after such certificate by the Secretary or
the Inspectors, as applicable, or to take any other action (including, without
limitation, the commencement, prosecution, or defense of any litigation with
respect thereto, and the seeking of injunctive relief in such litigation).
ARTICLE III.
BOARD OF DIRECTORS
Section 1. NUMBER OF DIRECTORS. The number of directors
constituting the whole board shall be thirteen (13), and no vacancy shall be
deemed to exist in the board unless the number of directors in office falls
below that number. No decrease in the number of
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40
directors shall shorten the term of any incumbent director. Directors may, but
need not, be stockholders.
Section 2. ELECTION OF DIRECTORS. The directors shall be
elected at the annual meeting of stockholders, or if not so elected, at a
special meeting of stockholders called for that purpose. Directors shall hold
office for a term of three years and shall be divided into three classes so that
approximately one-third of the board shall stand for election at each annual
meeting of stockholders. At the annual meeting of stockholders in 1996, and at
each annual meeting thereafter, approximately one-third of the membership of the
board shall be elected for three year terms. If the number of directors is
changed, any increase or decrease in directors shall be apportioned among the
classes so as to maintain all classes as nearly equal in number as possible and
any individual director elected to any class shall hold office for a term which
shall coincide with the term of such class. At any meeting of stockholders at
which directors are to be elected, only persons nominated as candidates shall be
eligible for election, and the candidates receiving the greatest number of votes
shall be elected. Nominations for the election of directors may be made by the
board of directors. Nominations for election of directors may also be made by
any stockholder entitled to vote for the election of directors, by notice in
writing, delivered or mailed, postage prepaid, to the secretary of the
corporation not less than fourteen nor more than fifty days prior to any meeting
of the stockholders called for the election of directors. Each such notice shall
set forth the name, age, business address, residence address and principal
occupation or employment of each nominee proposed in such notice, and the number
of shares of stock of the corporation which are beneficially owned by such
nominee. The chairman of the meeting at which directors are to be elected may,
if the facts warrant, determine that a nomination was not made in accordance
with the foregoing
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procedure and, if the chairman should so determine, the defective nomination
shall be disregarded.
Section 3. VACANCIES. A resignation from the board of
directors shall be deemed to take effect immediately or at such other time as
the director may specify. When one or more directors shall resign from the
board, effective at a future date, a majority of the directors then in office,
including those who have resigned, although less than a quorum, shall have the
power to fill such vacancy or vacancies, the vote thereon to take effect when
such resignation or resignations shall become effective. Newly created
directorships resulting from an increase in the number of directors and
vacancies occurring in the board for any reason may be filled by vote of a
majority of the directors then in office, although less than a quorum, or by a
sole remaining director, at any meeting of the board. A director elected to fill
a vacancy shall be elected to hold office until the expiration of the term of
the class to which he or she has been elected and until a successor shall be
duly elected or qualified or until his or her earlier death, resignation or
removal.
Section 4. ANNUAL MEETING. After each annual election of
directors, on the same day the board of directors may meet for the purpose of
organization, the election of officers and the transaction of other business at
the place where the annual meeting of the stockholders for the election of
directors is held. Notice of such meeting need not be given. Such meeting may be
held at any other time or place which shall be specified in a notice given as
hereinafter provided for special meetings of the board of directors or in a
consent and waiver of notice thereof signed by all the directors.
Section 5. REGULAR MEETINGS. Regular meetings of the board of
directors may be held at such places (within or without the State of Delaware)
and at such times as the board
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shall by resolution determine. If any day fixed for a regular meeting shall be a
legal holiday at the place where the meeting is to be held, then the meeting
which would otherwise be held on that day shall be held at such place at the
same hour and on the next succeeding business day not a legal holiday. Notice of
regular meetings need not be given.
Section 6. SPECIAL MEETINGS. Special meetings of the board of
directors shall be held whenever called by the president, or by any vice
president, or by any two of the directors. Notice of each such meeting shall be
mailed to each director, addressed to such director at his or her residence or
usual place of business, at least three (3) days before the day on which the
meeting is to be held, or shall be sent to such director by telegraph, cable or
wireless so addressed, or shall be delivered personally or by telephone, at
least 24 hours before the time the meeting is to be held. Each such notice shall
state the time and place (within or without the State of Delaware) of the
meeting but need not state the purposes thereof, except as otherwise provided by
statute or by these By-Laws. Notice of any meeting of the board need not be
given to any director who shall be present at such meeting; and any meeting of
the board shall be a legal meeting without any notice thereof having been given,
if all of the directors then in office shall be present thereat.
Section 7. QUORUM. Except as otherwise provided by statute or
by these By-Laws, a majority of the total number of directors (or the closest
whole number thereto) shall be required to constitute a quorum for the
transaction of business at any meeting, and the affirmative vote of a majority
of the directors present at a meeting at which a quorum is present shall be
necessary for the adoption of any resolution or the taking of any other action.
In the absence of a quorum, the director or directors present may adjourn any
meeting from time to time until a quorum be had. Notice of any adjourned meeting
need not be given.
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Section 8. TELEPHONE COMMUNICATIONS. Members of the board of
directors or any committee thereof may participate in a meeting of such board or
committee by means of conference telephone or similar communications equipment
by means of which all persons participating in the meeting can hear each other,
and participation in a meeting pursuant to this subsection shall constitute
presence in person at such meeting.
Section 9. ACTION OF DIRECTORS WITHOUT A MEETING. Any action
required or permitted to be taken at any meeting of the board of directors or of
any committee thereof may be taken without a meeting if all members of the board
or of such committee, as the case may be, consent thereto in writing and such
written consent is filed with the minutes or proceedings of the board or such
committee.
Section 10. COMPENSATION. Directors, as such, shall not
receive any stated salary for their services, but by resolution of the board of
directors a fixed sum and expenses of attendance, if any, may be allowed for
attendance at such regular and special meeting of the board or of any committee
thereof. Nothing herein contained shall be construed so as to preclude any
director from serving the corporation in any other capacity, or from serving any
of its stockholders, subsidiaries or affiliated corporations in any capacity,
and receiving compensation therefor.
Section 11. COMMITTEES. The board of directors may, by
resolution passed by a majority of the whole board, designate one or more
committees, each committee to consist of two or more of the directors of the
corporation. The board may designate one or more directors as alternate members
of any committee who may replace any absent or disqualified member at any
meeting of the committee. Any such committee, to the extent provided in the
resolution, shall have and may exercise the powers of the board of directors in
the management
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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; provided,
however, that in the absence or disqualification of any member of such committee
or committees, the member or members thereof present at any meeting and not
disqualified from voting, whether or not such member or members 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. Such
committee or committees shall have such name or names as may be determined from
time to time by resolution adopted by the board of directors. Each committee
shall keep regular minutes of its meetings and report the same to the board of
directors when required.
Section 12. INDEMNIFICATION. The corporation shall indemnify
any person who was or is a party, or is threatened to be made a party, to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that such
person is or was a director, officer, employee or agent of the corporation or
served any other enterprise at the request of the corporation, against any and
all expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement, actually and reasonably incurred in connection with such action,
suit or proceeding, in any circumstances, and to the full extent, permitted by
Section 145 of the Delaware Corporation Law, any amendment thereto, or any law
of similar import.
ARTICLE IV.
NOTICES
Section 1. NOTICES. Whenever under the provisions of the
statutes or of the Certificate of Incorporation or of these By-Laws, notice is
required to be given to any director
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or stockholder, it shall not be necessary that personal notice be given, and
such notice may be given in writing, by mail, addressed to such director or
stockholder, at such director or stockholder's address as it appears on the
records of the corporation or at his or her residence or usual place of
business, with postage thereon prepaid, and such notice shall be deemed to be
given at the time when the same shall be deposited in the United States mail.
Notice to directors may also be given by telegraph, cable or wireless, and such
notice shall be deemed to be given when the same shall be filed, or in person or
by telephone, and such notice shall be deemed to be given when the same shall be
delivered.
Section 2. WAIVER OF NOTICE. Whenever any notice is required
to be given under the provisions of the statutes or of the Certificate of
Incorporation or of these By-Laws, a waiver thereof in writing, signed by the
person or persons entitled to said notice, whether before or after the time
stated therein, shall be deemed equivalent thereto.
ARTICLE V.
OFFICERS
Section 1. OFFICERS. The officers of the corporation shall be
a chairman of the board, a president, one or more vice presidents, a secretary,
and a treasurer. Any two or more offices may be held by the same person.
Section 2. ELECTION OF OFFICERS. The officers shall be
elected by the board of directors and each shall hold office at the pleasure of
the board of directors until a successor shall have been duly elected and
qualified, or until such officer's death, or until such officer resigns or has
been removed in the manner hereinafter provided.
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Section 3. OTHER OFFICERS. In addition to the officers named
in Section 1 of this Article, the corporation may have such other officers and
agents as may be deemed necessary by the board of directors. Such other officers
and agents shall be appointed in such manner, have such duties and hold their
offices for such terms, as may be determined by resolution of the board of
directors.
Section 4. RESIGNATION. Any officer may resign at any time by
giving written notice of resignation to the board of directors, to the president
or to the secretary of the corporation. Any such resignation shall take effect
at the time specified therein; and, unless otherwise specified therein, the
acceptance of such resignation shall not be necessary to make it effective.
Section 5. REMOVAL. Any officer may be removed, either with or
without cause, by action of the directors.
Section 6. VACANCY. A vacancy in any office because of death,
resignation, removal or any other cause shall be filled by the board of
directors.
Section 7. CHAIRMAN OF THE BOARD. The chairman of the board
shall be the chief executive officer of the corporation, shall preside at all
meetings of stockholders and of the board of directors, shall have general
control and management of the business affairs and policies of the corporation,
and shall see that all orders and resolutions of the board of directors are
carried into effect. Except where by law the signature of the president is
required, the chairman of the board shall possess the same power as the
president to sign all certificates, contracts, and other instruments of the
corporation. During the absence or disability of the president, the chairman of
the board shall exercise all the powers and discharge all of the duties of the
president. The chairman shall have such other powers and
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perform such other duties as from time to time may be conferred or imposed upon
the chairman by the board of directors.
Section 8. PRESIDENT. The president of the corporation shall
be the chief operating officer of the corporation. During the absence or
disability of the chairman of the board, the president shall exercise all of the
powers and discharge all of the duties of the chairman of the board. The
president shall possess power to sign all certificates, contracts and other
instruments of the corporation. The president shall, in the absence of the
chairman of the board, preside at all meetings of the stockholders and of the
board of directors. The president shall perform all such other duties as are
incident to the office of president or are properly required by the board of
directors.
Section 9. VICE PRESIDENT. In the event of the absence or
disability of the chairman of the board and the president, the vice president,
or, in case there shall be more than one vice president, the vice president
designated by the board of directors, shall perform all the duties of the
president, and when so acting, shall have all the powers of, and be subject to
all the restrictions upon, the president. Except where by law the signature of
the president is required, each of the vice presidents shall possess the same
power as the president to sign all certificates, contracts, obligations and
other instruments of the corporation. Any vice president shall perform such
other duties and may exercise such other powers as from time to time may be
assigned by these By-Laws or by the board of directors or by the president.
Section 10. SECRETARY. The secretary shall, if present, act as
secretary of, and keep the minutes of, all the proceedings of the meetings of
the stockholders and of the board of directors and of any committee of the board
of directors in one or more books to be kept for
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that purpose; shall perform such other duties as shall be assigned by the
president or the board of directors; and, in general, shall perform all duties
incident to the office of secretary.
Section 11. TREASURER. If required by the board of directors,
the treasurer shall give a bond for the faithful discharge of the duties of the
treasurer, in such sum and with such surety or sureties as the board of
directors shall determine. The treasurer shall keep or cause to be kept full and
accurate records of all receipts and disbursements in the books of the
corporation and shall have the care and custody of all funds and securities of
the corporation. The treasurer shall disburse the funds of the corporation as
may be ordered by the board of directors, shall render to the president and
directors, whenever they request it, an account of all transactions performed as
treasurer and shall perform such other duties as may be assigned by the chairman
of the board or the board of directors; and, in general, shall perform all
duties incident to the office of treasurer.
Section 12. CONTROLLER. The controller, if such office is
created by the board, shall be the chief financial officer of the corporation.
The controller shall keep or cause to be kept all books of account and
accounting records of the corporation and shall keep and maintain, or cause to
be kept and maintained, adequate and correct accounts of the properties and
business transactions of the corporation. The controller shall prepare or cause
to be prepared appropriate financial statements for the corporation and shall
perform such other duties as may be assigned by the chairman of the board or the
board of directors; and, in general, shall perform all duties incident to the
office of controller.
Section 13. SALARIES. The salaries of the officers shall be
fixed from time to time by the board of directors or by the chairman of the
board. Any such decision by the chairman of the board shall be final unless
expressly overruled or modified by action of the
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board of directors, in which event such action of the board of directors shall
be conclusive of the matter. Nothing contained herein shall preclude any officer
from serving the corporation in any other capacity, including that of director,
or from serving any of its stockholders, subsidiaries or affiliated corporations
in any capacity and receiving a proper compensation therefor.
ARTICLE VI.
LOANS, CHECKS, DEPOSITS, ETC.
Section 1. GENERAL. All checks, drafts, xxxx of exchange or
other orders for the payment of money, issued in the name of the corporation,
shall be signed by such person or persons and in such manner as may from time to
time be designated by the board of directors, which designation may be general
or confined to specific instances.
Section 2. LOANS AND EVIDENCES OF INDEBTEDNESS. No loan shall
be contracted on behalf of the corporation, and no evidence of indebtedness
shall be issued in its name, unless authorized by the board of directors. Such
authorization may be general or confined to specific instances. Loans so
authorized by the board of directors may be effected at any time for the
corporation from any bank, trust company or other institution, or from any firm,
corporation or individual. All bonds, debentures, notes and other obligations or
evidences of indebtedness of the corporation issued for such loans shall be
made, executed and delivered as the board of directors shall authorize. When so
authorized by the board of directors any part of or all the properties,
including contract rights, assets, business or good will of the corporation,
whether then owned or thereafter acquired, may be mortgaged, pledged,
hypothecated or conveyed or assigned in trust as security for the payment of
such bonds,
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debentures, notes and other obligations or evidences of indebtedness of the
corporation, and of the interest thereon, by instruments executed and delivered
in the name of the corporation.
Section 3. BANKING. All funds of the corporation not otherwise
employed shall be deposited from time to time to the credit of the corporation
in such banks, trust companies or other depositories as the board of directors
may authorize. The board of directors may make such special rules and
regulations with respect to such bank accounts, not inconsistent with the
provisions of these By-Laws, as it may deem expedient. For the purpose of
deposit and for the purpose of collection for the account of the corporation,
checks, drafts and other orders for the payment of money which are payable to
the order of the corporation shall be endorsed, assigned and delivered by such
person or persons and in such manner as may from time to time be authorized by
the board of directors.
Section 4. SECURITIES HELD BY THE CORPORATION. Unless
otherwise provided by resolution adopted by the board of directors, the chairman
of the board, the president or any vice president may from time to time appoint
an attorney or attorneys, or an agent or agents, to exercise in the name and on
behalf of the corporation the powers and rights which the corporation may have
as the holder of stock or other securities in any other corporation to vote or
to consent in respect of such stock or other securities; and the chairman of the
board, the president, or any vice president may instruct the person or persons
so appointed as to the manner of exercising such powers and rights, and the
chairman of the board, the president, or any vice president may execute or cause
to be executed in the name and on behalf of the corporation and under its
corporate seal, or otherwise, all such written proxies, powers of attorney or
other written instruments as the chairman of the board, the president, or any
vice-
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president may deem necessary in order that the corporation may exercise
such powers and rights.
ARTICLE VII.
SHARES AND THEIR TRANSFER
Section 1. SHARE CERTIFICATES. Every stockholder shall be
entitled to have a certificate certifying the number of shares of stock of the
corporation owned by him, signed by, or in the name of the corporation by the
chairman of the board or the president or a vice president and by the treasurer
or an assistant treasurer, or the secretary or an assistant secretary of the
corporation (except that when any such certificate is countersigned by a
transfer agent other than the corporation or its employee of by a registrar
other than the corporation or its employee the signatures of any such officers
may be facsimiles). If the corporation shall be authorized to issue more than
one class of stock or more than one series of any class, the designations,
preferences and relative, participating, optional or other special rights of
each class of stock or series thereof and the qualifications, limitations or
restrictions of such preferences and/or rights shall be set forth in full or
summarized on the face or back of the certificate which the corporation shall
issue to represent such class or series of stock, provided that, except in the
case of restrictions on transfers of securities which are required to be noted
on the certificate, in lieu of the foregoing requirements, there may be set
forth on the face or back of the certificate which the corporation shall issue
to represent such class or series of stock, a statement that the corporation
will furnish without charge to each stockholder who so requests the
designations, preferences and relative, participating, optional or other special
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rights of each class of stock or series thereof and the qualifications,
limitations or restrictions of such preferences and/or rights.
Section 2. LOST, STOLEN OR DESTROYED CERTIFICATES. The board
of directors may direct a new certificate or certificates to be issued in place
of any certificate or certificates theretofore issued by the corporation alleged
to have been lost, stolen or destroyed, upon the making of an affidavit of that
fact by the person claiming the certificate of stock to be lost, stolen or
destroyed. When authorizing such issue of a new certificate or certificates, the
board of directors may, in its discretion and as a condition precedent to the
issuance thereof, require the owner of such lost, stolen or destroyed
certificate or certificates, or his or her legal representative, to advertise
the same in such manner as it shall require and/or give the corporation a bond
in such sum as it may direct as indemnity against any claim that may be made
against the corporation with respect to the certificate alleged to have been
lost, stolen or destroyed.
Section 3. TRANSFERS. Upon surrender to the corporation or the
transfer agent of the corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer, it shall be the duty of the corporation to issue a new certificate to
the person entitled thereto, cancel the old certificate and record the
transaction upon its books.
Section 4. RECORD DATES. In order that the corporation may
determine the stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, or to express consent to corporate
action in writing without a meeting, or entitled to receive payment of any
dividend or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or exchange of stock or
for the
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purpose of any other lawful action, the board of directors may fix, in
advance, a record date, which shall not be less than ten (10) days before the
date of such meeting, nor more than sixty (60) days prior to such meeting or to
any other action. A determination of stockholders of record entitled to notice
of or to vote at a meeting of stockholders shall apply to any adjournment of the
meeting; provided, however, that the board of directors may fix a new record
date for the adjourned meeting.
Section 5. PROTECTION OF CORPORATION. The corporation shall be
entitled to recognize the exclusive right of a person registered on its books as
the owner of shares to receive dividends, and to vote as such owner, and to hold
liable for calls and assessments a person registered on its books as the owner
of shares, and shall not be bound to recognize any equitable or other claim to
or interest in such share or shares on the part of any other person, whether or
not it shall have express or other notice thereof, except as otherwise provided
by the laws of Delaware.
ARTICLE VIII.
CORPORATE SEAL
The corporate seal shall have inscribed thereon the name of
the corporation, the year of its organization and the words "Corporate Seal,
Delaware." The seal may be used by causing it or a facsimile thereof to be
impressed or affixed or reproduced or otherwise.
ARTICLE IX.
MISCELLANEOUS
Except as otherwise provided herein, these By-Laws may be
altered, added to, amended or repealed as follows: (a) at any meeting of the
stockholders by affirmative vote of
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80% of the outstanding shares of each class of stock outstanding and entitled to
vote thereat, provided notice of the proposed alteration, addition, amendment or
repeal shall have been given in the notice of such meeting; or (b) by the board
of directors, except with respect to any provision of which By-Laws, the
Certificate of Incorporation or By-Laws requires action by the stockholders. Any
By-Law adopted by the board of directors may be amended or repealed by the
stockholders, as provided in this Section.
Dated as of: April 05, 2000
* * * * * * * * * END OF BY-LAWS * * * * * * * * *
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ATTACHMENT E
AFFILIATE AGREEMENTS
56
ATTACHMENT E
AFFILIATE AGREEMENTS
None
57
QUESTIONNAIRE FOR DIRECTORS, OFFICERS AND
CERTAIN OTHER PERSONS RELATED TO
NATIONAL AUTO CREDIT, INC.
Information Furnished by
----------------------------------
(Name of Individual Responding)
This questionnaire is addressed to all directors, executive officers,
and certain other persons related to National Auto Credit, Inc. and its
subsidiaries (collectively, the "Company") and will be used by the Company in
connection with the preparation and finalization of the Company's Proxy
Statement for the Annual Meeting of Stockholders to be held in November 2000,
pursuant to the Securities Exchange Act of 1934 ("1934 Act"). Your signature at
the end of this Questionnaire will constitute your consent for use by the
Company in any such filing of the information contained in your answers.
Pursuant to the 1934 Act, you and the Company may be liable for all
material misstatements and omissions with respect to all information supplied by
its directors and officers.
If you have any questions concerning this questionnaire, please address
them to Xxxxx X. Xx Xxxxxxx, Esquire, Counsel to the Company, (000) 000-0000.
When completed, please sign and promptly return the questionnaire and any
attachments before November __, 2000, to Xxxxx X. Xx Xxxxxxx, De Xxxxxxx
Xxxxxxxxxxx Xxxxx & Xxxxx, 0000 X Xxxxxx, X.X., Xxxxx 000, Xxxxxxxxxx, XX 00000.
It is important that each person respond as fully as possible to all
applicable questions in the space provided. PLEASE ANSWER ALL QUESTIONS, UNLESS
A QUESTION SPECIFICALLY STATES THAT IT IS APPLICABLE ONLY TO A PARTICULAR GROUP
OF PERSONS, E.G.; "EXECUTIVE OFFICERS," AND YOU ARE NOT A MEMBER OF THAT GROUP.
WHENEVER INFORMATION IS REQUESTED WITH RESPECT TO THE COMPANY, YOU SHOULD ALSO
PROVIDE SUCH INFORMATION WITH RESPECT TO ANY SUBSIDIARIES. If the response is
"no," "none," or "not applicable," please so indicate.*
TERMS THAT HEREINAFTER APPEAR IN QUOTATION MARKS ARE DEFINED IN
APPENDIX I. SINCE UNDERSTANDING THE MEANING OF THESE TERMS IS IMPORTANT TO
CORRECTLY ANSWERING THE QUESTIONNAIRE, IT IS REQUESTED THAT YOU REFER TO
APPENDIX I BEFORE ANSWERING ANY QUESTION THAT INCLUDES ONE OF THESE TECHNICAL
TERMS. Insofar as questions herein relate to "associates" of yours, your answers
are deemed to be made upon the basis of information and belief.
The Company's last fiscal year ended on January 31, 2000.
------------------------------
* If the space provided for an answer to a given question is
insufficient, please complete your answer on a separate page indicating
the number of the question to which the answer refers, and attach the
additional page to the Questionnaire.
58
BIOGRAPHICAL INFORMATION
1. BACKGROUND INFORMATION
(a) Full Name:___________________________________________________
Name(s) previously used:_____________________________________
(b) Residence Address (do NOT submit a P.O. Box):
_____________________________________________________________
(c) Residential Telephone:_______________________________________
(d) Principal Occupation or Business:____________________________
Name of Business: ___________________________________________
(e) Position and Duties:_________________________________________
(f) Business Address:____________________________________________
_____________________________________________________________
(g) Business Telephone:__________________________________________
(h) Marital Status:______________________________________________
(i) Date of Birth:_______________________________________________
(j) Place of Birth:______________________________________________
(k) Social Security Number:______________________________________
(l) Please describe below each of your principal occupations or
employments during the past five years, including the name and address and the
principal business of each of the organizations with which you were affiliated
and the positions you held therein, including the dates thereof.
ANSWER:
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59
(m) If you are an officer or director of any other publicly-held
corporation, please list below:
ANSWER:
Name Type of Business
---- ----------------
(n) Describe the nature of any "family relationship" between you and
any other director, "executive officer" or person nominated or chosen to become
a director or an "executive officer" of the Company, or of any "subsidiary" or
other "affiliate" of the Company.
ANSWER:
2. EXECUTIVE OFFICERS AND KEY EMPLOYEES
------------------------------------
(a) If you are or were during the past fiscal year an "executive
officer" of the Company, set forth the date when you were first elected as
"executive officer", your exact title and the date on which your present term of
office will expire (or the date when you ceased to be an "executive officer").
ANSWER:
(b) If you expect to be named as an "executive officer" of the Company,
please set forth the anticipated date of your election as an "executive
officer."
ANSWER:
(c) Set forth all positions and offices with the Company which you
presently hold or have held (during the past fiscal year), and if you were or
are a vice-president in charge of a principal business function, state such
principal business function.
ANSWER:
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60
(d) If you were an "executive officer" of the Company during the past
fiscal year but are no longer, set forth all positions and offices with the
Company which you held during that period and the effective date of your
resignation.
ANSWER:
(e) State in detail the nature of any arrangement or understanding
between you and any other person(s) (naming such person(s)) pursuant to which
you were selected or have been nominated to be an "executive officer" of the
Company.
ANSWER:
(f) If you were an "executive officer" during the Company's last fiscal
year, did you: (i) serve as a member of the compensation committee (or other
board committee performing equivalent functions or, in the absence of any such
committee, the board of directors) of another entity, one of whose "executive
officers" served on the Company's board of directors or its compensation
committee; or (ii) serve as a director of another entity, one of whose
"executive officers" served on the Company's compensation committee?
ANSWER:
(g) Please describe the circumstances, if any, of your participation
during the Company's last fiscal year, in deliberations of the Compensation
Committee of the Company concerning executive compensation decisions.
ANSWER:
3. DIRECTORS
(a) Set forth the date when you were first elected or anticipate being
elected as a director and the date on which your present term of office will
expire (or the date on which you ceased to be a director).
ANSWER:
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61
(b) Set forth all positions and offices with the Company (other than
director) which you presently hold.
ANSWER:
(c) Describe any standard or other arrangements, stating amounts,
pursuant to which you were compensated for any services provided AS A DIRECTOR
OF THE COMPANY during the Company's last fiscal year.
ANSWER:
(d) State in detail the nature of any arrangement or understanding
between yourself and any other person(s) (naming such person(s)) pursuant to
which you were selected or have been nominated to be a director of the Company.
ANSWER:
(e) List all directorships held by you in any company which has a class
of securities registered on a national securities exchange, or is required to
file annual, quarterly, or other periodic reports with the Securities and
Exchange Commission, or is registered with the Securities and Exchange
Commission as an investment company under the Investment Company Act of 1940, as
amended.
ANSWER:
(f) Please describe the circumstances, if any, of your participation
during the Company's last fiscal year, in deliberations of the Compensation
Committee of the Company concerning executive compensation decisions.
ANSWER:
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62
4. INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS
(a) If during the past five years any of the following events have
occurred involving you, please state the name and relationship of such person
involved, describe the event or events that occurred, and explain any mitigating
circumstances associated with each event:
(i) A petition under any United States, state or foreign bankruptcy
insolvency law has been filed by or against you, or a receiver, fiscal
agent or similar officer has been appointed by a court for your
business or property, or the business or property of any partnership of
which you were a general partner at or within five years before the
time of such filing, or the business or property of any corporation or
business association of which you were an executive officer at or
within five years before the time of such filing.
ANSWER:
(ii) You have been "convicted" in a criminal proceeding (excluding
traffic violations and other minor offenses) or are the subject of a
pending criminal proceeding.
ANSWER:
(iii) You have been the subject of any order, judgment or decree,
issued by a court of competent jurisdiction and not subsequently
reversed, suspended or vacated, which permanently or temporarily
enjoins or otherwise limits your participation in any of the following
activities:
(A) Acting as a futures commission merchant, introducing
broker, commodity trading advisor, commodity pool operator,
floor broker, leverage transaction merchant, any other person
regulated by the Commodity Futures Trading Commission, or an
associated person of any of the foregoing, or as an investment
adviser, underwriter, broker or dealer in securities, or as an
affiliated person, director or employee of any investment
company, bank, savings and loan association or insurance
company, or engaging in or continuing any conduct or practice
in connection with such activity; or
(B) Engaging in any type of business practice; or
(C) Engaging in any activity in connection with the purchase
or sale of any security or commodity or involving a possible
violation of federal or state securities laws; or
(D) Engaging in any act or omission to act constituting
conduct inconsistent with just and equitable principles of
trade.
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63
ANSWER:
(iv) You have been the subject of any order, judgment or decree, issued
by a United States, state or foreign authority and not subsequently
reversed, suspended or vacated, which bars, suspends, expels or
otherwise limits for more than 60 days your right to engage in any
activity described in (iii) above, or to be associated with persons
engaged in any such activity.
ANSWER:
(v) You have been found, by a court of competent jurisdiction in a
civil action or by the Securities and Exchange Commission, to have
violated any federal or state securities laws, which finding has not
been subsequently reversed, suspended or vacated.
ANSWER:
(vi) You have been found by a court of competent jurisdiction in a
civil action or by the Commodity Futures Trading Commission to have
violated any Federal Commodities Law, and the judgment or finding has
not been subsequently reversed, suspended or vacated.
ANSWER:
(vii) You have been subject to a U.S. Postal Service false
representation order entered within the past five years or subject to a
restraining order or preliminary injunction with respect to conduct
alleged to have violated 39 U.S.C. ss.3005.
ANSWER:
(b) Please state whether you have been a party to any legal proceedings
in the past five years, including proceedings in which a partnership or
corporation was involved for which you were general partner, or an officer or
director, respectively. If so, give the approximate date the complaint was
filed, name of court, brief statement of facts alleged and relief sought and
outcome of the case, or present status, if still pending.
ANSWER:
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64
(c) If you or an "associate" of yours is PRESENTLY involved in any
pending legal proceedings (including bankruptcy, receivership or similar
proceeding) to which the Company or any of its "subsidiaries" is also a party or
of which any of their property is the subject, and the involvement of you or any
such person in these proceedings is either as a party adverse to the Company or
any of its "subsidiaries," furnish the following information for each such
proceeding: the name of the court or agency in which the proceeding is pending,
the date instituted, the principal parties thereto, a description of the factual
basis alleged to underlie the proceeding, and the relief sought.
ANSWER:
(d) If you are aware of any such proceedings that are being
contemplated by any government authorities, please furnish the information
requested in (a) above for such contemplated proceedings.
ANSWER:
5. SECURITY HOLDINGS
(a) Please list in the table below the number of shares of the Company,
any of its "subsidiaries," or its parent owned, as of the date of this
questionnaire, either directly or as an indirect beneficial owner by (1) you,
(2) your spouse, (3) minor children or relatives of yours who live in your home,
and (4) and any other "associate" of yours.
Holdings of Spouse, Holdings of
Class of Minor Children and Other
Securities of Relatives Sharing "Associates"
The Company Your Holdings Home (Specify) (Specify)
--------------------------------------------------------------------------
If after reviewing the explanation of the term "beneficial ownership"
in Appendix I, you deny "beneficial ownership" of any securities listed above,
please so indicate by placing an asterisk by the securities with respect to
which you make such denial and describe the basis upon which your denial is
made.
(b) Please review the definition of "beneficial ownership" contained in
Appendix I. Other than those shares listed above in item 5(a), are there any
other securities of the Company, any of its "subsidiaries," or its parent of
which you are the beneficial owner? If so, please list below:
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65
Class of Security Total Number of Shares Nature of
Of the Company Beneficially Owned Beneficial Ownership
-------------------------------------------------------------------------------
(c) Enter in the table below the names and addresses of any "person or
persons" or any "group of persons" (excluding directors and "executive officers"
of the Company, other than yourself) known by you to be the "beneficial owner"
of more than five percent of the outstanding shares of the common stock of the
Company, or any of its "subsidiaries."
Class of Security Total Number of Shares
Of the Company Beneficially Owned Name and Address
-------------------------------------------------------------------------------
(d) With respect to your answers to questions 5(a), (b), and (c) above,
please state whether you have any ownership interest in any shares of common
stock of the Company, any of its "subsidiaries" or its parent, for which you, or
any person or group known by you to own beneficially more than five percent of
such shares, may be deemed to be the "beneficial owner" of such shares. If you
have not so indicated in your response to questions (a), (b), and (c), please
provide all material, relevant information including a description of the
security, power, trust, account, or arrangement pursuant to which such shares
will or may be acquired, the duration of such security or power, the number of
such shares involved, and the name of such "beneficial owner."
ANSWER:
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66
(e) Describe any contractual or other arrangements known to you,
including any pledge of securities of the Company, or any of its "subsidiaries"
or its parent, the operation of the terms of which may at a subsequent date
result in a change in control of the Company.
ANSWER:
(f) Describe any contractual arrangement, existing or contemplated,
which may effect a change in your percentage ownership of Company shares with
respect to a particular class of securities or a different type of security.
ANSWER:
6. ANNUAL COMPENSATION.
-------------------
If you are an "executive officer" of the Company, please provide the
following information. NOTE: Amounts deferred at your election should be
included in salary or bonus, as the case may be, for the year in which earned.
Please indicate the amounts of any salary or bonus forgone at your election
under a Company program under which stock, stock based or other forms of
non-cash compensation may be received by you in lieu of a portion of annual
compensation earned in a covered fiscal year. For non-cash compensation,
disclose the fair market value at the time the compensation is awarded, earned
or paid.
(a) the dollar value of base salary (cash and non-cash) earned by
you during the fiscal year.
2000:
1999:
1998:
(b) the dollar value of bonus (cash and non-cash) earned by you
during the fiscal year.
2000:
1999:
1998:
(c) the dollar value of perquisites and other personal benefits,
securities or property (not properly categorized as salary or bonus) received by
you during the fiscal year.
2000:
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67
(d) earnings (including the interest or dividend rate) on restricted
stock, options, SARs or deferred compensation paid to you during the fiscal year
or payable during that period but deferred at your election:
2000:
(e) earnings on long-term incentive plan compensation paid during the
fiscal year or payable during that period but deferred at your election:
2000:
(f) amounts reimbursed during the fiscal year to you for the payment
of taxes:
2000:
(g) the dollar value of the difference between the price paid by you
for any security of the Company purchased from the Company (through deferral of
salary or bonus, or otherwise), and the fair market value of such security at
the date of purchase. Indicate whether such discount is available, generally,
either to all securityholders or to all salaried employees of the registrant.
2000:
7. LONG-TERM COMPENSATION.
----------------------
If you are an "executive officer" of the Company, please provide the
following information:
(a) the number of shares and dollar value (net of any consideration
paid by you) of any award of restricted stock, including share units (calculated
by multiplying the closing market price of the Company's unrestricted stock on
the date of grant by the number of shares awarded) for each of the following
fiscal years:
2000: # $
1999: # $
1998: # $
(b) the number and value of the aggregate restricted stock holdings at
the end of the Company's last fiscal year:
2000: # $
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(c) if any of the restricted stock awards described in (a) above will
vest, in whole or in part, within three years from the date of grant, the total
number of shares awarded and the vesting schedule:
ANSWER:
(d) are dividends paid on restricted shares held by you? If so, is the
dividend rate the same as that paid on unrestricted shares?
ANSWER:
(e) the number of shares subject to stock options granted, with or
without tandem stock appreciation rights, and the number of shares related to
stock appreciation rights ("SARs") granted for each of the following fiscal
years:
2000: Options SARs
1999: Options SARs
1998: Options SARs
(f) the dollar value of all payouts pursuant to long-term incentive
plans or arrangements ("LTIPs"):
2000:
1999:
1998:
(g) with respect to payouts in question (f) above, was any performance
target, goal or condition to payout waived? If so, please explain:
ANSWER:
8. (a) OTHER COMPENSATION.
------------------
If you are an "executive officer" of the Company, please describe below
any other compensation received by you for services rendered to or on behalf of
the Company and not described in your responses to questions 6 and 7 as of the
end of the Company's last fiscal year, including, but not limited to: payments
received upon termination or change in control; amounts earned on deferred
compensation, restricted stock and SARs (if the amount represented interest,
indicate the rate of interest); amounts earned on LTIP compensation; Company
contributions to defined contribution plans (E.G., the Company's 401(k) Plan);
amounts associated with split-dollar
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69
insurance policies; and amounts received for serving as a director of a
subsidiary of the Company. (LTIP awards and amounts received on exercise of
options and SARs need not be reported here.)
ANSWER:
(b) MORE ON OPTIONS AND SARS.
------------------------
(i) With respect to option and SAR grants to you as of the end
of the Company's last fiscal year, please provide the following information (add
more rows if necessary):
Number of Exercise or Market price
shares base price Expiration of stock on
Grants Grant Date Covered ($/Share) Date Date of Grant
------ ---------- --------- ----------- ---------- -------------
Option
Grant 1
Option
Grant 2
SAR
Grant 1
Additional Information (if any):
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70
(ii) With respect to aggregate option and/or SAR EXERCISES in
the Company's last fiscal year and the values of options and SARs held by you at
fiscal year-end, please provide the following:
Number of unexercised options and Value of unexercised in-the-money
SARs at 1/31/00 options and SARs at 1/31/00 (1)
--------------------- ----------------- ------------------ ----------------- ----------------------
Shares acquired Value realized on
On Exercise Date of Exercise
-------- ----------------
($) (2) Exercisable Unexercisable Exercisable Unexercisable
------- ----------- ------------- ----------- -------------
----------
(1) Options or freestanding SARs are "in-the-money" if the fair market
value of the underlying securities exceeds the exercise or base price
of the option or SAR. On January 31, 2000 the closing market value of
the Company's common stock was $____________.
(2) In calculating the value, do not include the value of any related
payment or other consideration provided (or to be provided) by the
Company on your behalf. Any payments or other consideration should be
described below.
Additional Information (if any):
(c) MORE ON LTIPS. Please indicate whether you were awarded any shares,
units or other rights pursuant to a long-term incentive plan during the
Company's last fiscal year (include the name of the plan and any other
information you deem relevant):
ANSWER:
(d) DEFINED BENEFIT OR ACTUARIAL PLANS. Please indicate whether you are
covered by any defined benefit or actuarial plan under which you shall be
entitled to a pension or other similar benefit, whether or not such benefit is
determined primarily by final compensation (or average final compensation) and
years of service.
ANSWER:
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9. EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS.
(a) Are you a party to or participant in (i) any employment contract
with the Company or (ii) any compensatory plan or arrangement which results or
will result from your resignation, retirement or any other termination of your
employment with the Company or from a change in control of the Company, or a
change in your responsibilities following a change in control? If so, describe
the agreement, plan or arrangement and the amounts to be received (including all
periodic payments and installments):
ANSWER:
(b) Please state below whether any compensation of the type described
in Questions 5 through 8 has been received by you or accrued for your benefit
from a third party pursuant to any transaction between the Company and such
third party where the primary purpose of the transaction is to furnish such
compensation.
ANSWER:
10. INDEBTEDNESS
(a) State if you or any "associate" of yours has been indebted to the
Company or any of its "subsidiaries" at any time during the last two fiscal
years of the Company.
ANSWER:
(b) If your answer to (a) is affirmative, state:
(i) The largest aggregate amount of indebtedness outstanding at
any time during such period and indicate the breakdown of such
indebtedness between the Company or its "subsidiaries."
ANSWER:
(ii) The nature of any such indebtedness, the details of the
"transaction" in which it was incurred and the date of such
"transaction."
ANSWER:
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72
(iii) The amount of any such indebtedness outstanding as of the date
of your response to this Questionnaire.
ANSWER:
(iv) The rate of interest paid or charged thereon.
ANSWER:
11. TRANSACTIONS WITH MANAGEMENT
(a) If you or a relative, spouse, or relative of your spouse who is
living in your home has had during the previous three fiscal years, or now has,
any material interest, direct or indirect, in any "transaction" or proposed
"transaction" to which the Company or any "subsidiary" of the Company was or is
to be a party, including the ownership or issuance of stock of the Company,
please describe such "transaction" and your interest therein, the date of such
"transaction," and state, where practicable, the amount of such interest. If the
interested person is one other than yourself, state his name, his relationship
to you or to the Company or any "subsidiary," the nature of his interest, the
date of such "transaction," and where practicable, the amount of his interest.
Your response should include, but not be limited to, the following types of
"transactions," if any: brokerage discounts, loan arrangements, and business
arrangement, concurrent or subsequent, with parties to which the Company pursued
a business relationship.(1)
ANSWER:
(b) If any "transaction" described in the answer to (a) above involved
or is to involve the purchase or sale of assets by or to the Company or any of
its "subsidiaries" otherwise than in the ordinary course of business, state the
cost of the assets to the purchaser and, if acquired by the
-------------------------------
(1) This question applies to the receipt of any remuneration, directly or
indirectly, for services in any capacity, except salaries and directors' fees.
It includes, for example, insurance and other benefits not directly referred to
above. This question does NOT apply to any "transaction" or interest therein
where: (a) the rates or charges involved in the "transaction" are determined by
competitive bids, or the "transaction" involves the rendering of services as a
common or contract carrier, or public utility, at rates or charges fixed in
conformity with the law or governing authority; (b) the "transaction" involves
services as a bank depository of funds, transfer agent, registrar, trustee under
a trust indenture, or similar services or (c) your interest arises solely from
the ownership of securities of the Company or any of its "subsidiaries," and you
receive no extra or special benefit not shared on a pro rata basis by all
holders of securities of the same class.
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73
seller within two years prior to the "transaction," the cost to the seller. (In
answering this question, please make a separate statement with respect to each
"transaction.")
ANSWER:
12. CERTAIN BUSINESS RELATIONSHIPS
If any of the following relationships now exist, or existed during the
Company's last fiscal year, name the entity involved, the nature of your
affiliation with such entity, the nature of the relationship between the entity
and the company, and the amount of business done between the entity and the
Company during the last fiscal year, or proposed to be paid during the current
fiscal year.
(a) You are, or during the last fiscal year were, an "executive
officer" or owner of more than 10% of the equity interest in any business or
professional entity THAT MADE ANY PAYMENTS FOR PROPERTY OR SERVICES TO THE
COMPANY during the past fiscal year;
(b) You are, or during the last fiscal year were, an "executive
officer" or owner of more than 10% of the equity interest in a business or
professional entity WHICH RECEIVED FROM THE COMPANY PAYMENTS for property or
services during the past fiscal year or proposed to be received during the
fiscal year;
(c) You are, or during the last fiscal year were, an "executive
officer" or owner of more than 10% of the equity interest in a business or
professional entity to which the Company is indebted;
(d) You are, or during the last fiscal year were, a member of or
counsel to a law firm that the Company retained during the last fiscal year, or
proposes to retain during the current fiscal year;
(e) You are, or during the last fiscal year were, a partner or
executive officer of an investment banking firm that performed services for the
Company during the last fiscal year or proposes to do so during the current
fiscal year; or
(f) You have an interest in any transaction similar to those described
in (a)-(e) above.
ANSWER:
13. TRANSACTIONS WITH PENSION OR SIMILAR PLANS
Briefly describe any "transactions" since the beginning of the
Company's last fiscal year, or any presently proposed "transactions," to which
any pension, retirement, savings or similar
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74
plan provided by the Company, any of its "subsidiaries" or its parent was or is
to be a party, in which you or your spouse, a relative of yours or a relative of
your spouse who has the same home as you had, have or are to have, a direct or
indirect material interest, stating the nature of your or their interest in the
"transaction" and the amount of such interest.(2)
ANSWER:
14. INDEMNIFICATION
Do you know of any contract, charter provision, arrangement or statute
under which you are insured or are or will be indemnified in any manner against
any liability which you may incur in your capacity as a director or officer of
the Company, other than the indemnification provisions of the Company's charter
documents? If so, please describe.
ANSWER:
15. TRANSACTIONS WITH PROMOTERS
(a) Please state the names of the "promoters" of the Company, the
nature and amount of anything of value (including money, property, contracts,
options or rights of any kind) received or to be received by each "promoter",
directly or indirectly, from the Company, and the nature and amount of any
assets, services or other consideration therefor received or to be received by
the Company.
ANSWER:
(b) As to any assets acquired or to be acquired by the Company from a
"promoter", state the amount at which the assets were acquired or are to be
acquired. State also the principle followed or to be followed in determining
such amount, identify the persons making the determination and their
relationship, if any, with the Company or any "promoter." If the assets were
acquired by the "promoter" within two years prior to their transfer to the
Company, also state the cost thereof to the "promoter."
--------------------------------------
(2) This question does not apply to any "transaction" or interest therein
involving (a) payments to the plan, or payments to beneficiaries, pursuant to
the terms of the plan, or (b) payment of remuneration for services not in excess
of five percent of the aggregate remuneration received by you during the
Company's last fiscal year from the Company or any of its "subsidiaries," or (c)
an interest of the Company or any of its "subsidiaries" which arise solely from
its general interest in the success of the plan.
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75
ANSWER:
16. SIGNIFICANT EMPLOYEES
Please note the name and position of any significant employees or
consultants of the Company who are not "executive officers" or directors but
who, in your opinion, may make significant contributions to the business of the
Company.
ANSWER:
17. BOOKS AND RECORDS. Do you have any knowledge or reason to believe that the
books and records of the Company do not, in reasonable detail, accurately and
fairly reflect the transactions and dispositions of the Company? The types of
conduct or activities to which this question is addressed are set forth in
Appendix II to this questionnaire. If so, please provide details.
ANSWER:
18. COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT
Section 16(a) of the Securities Exchange Act requires reports (on Form
3, Form 4 and Form 5) by each of the Company's directors, "executive officers"
and 10% beneficial owners of transactions in any of the Company's securities
(e.g., purchases, gifts or sales of the Company's securities, stock option
grants and/or exercises, etc.) that are "beneficially owned" by such persons.
Please describe below any transactions or changes in your security holdings
during the past fiscal year (or if you became an officer, director or 10%
beneficial owner during the past fiscal year, two fiscal years) and state
whether or not such transactions were timely reported on a Form 3, 4 or 5.
Timely
Transaction Reported?
--------------------------
ANSWER:
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* * * * * * *
The information submitted herein is correct and complete to the best of
the undersigned's knowledge as of the date of completion of this questionnaire.
The undersigned agrees that if at any time hereafter any of the
information set forth above changes or for any reason becomes incorrect, the
undersigned will promptly notify and furnish any necessary or appropriate
correcting information to the attorney named on page one hereof at the address
and telephone number first shown above; otherwise, it will be understood that
the above information continues to be, to the best of the knowledge, information
and belief of the undersigned, complete and correct.
Dated: __________________ _______________________________________
Signature
_______________________________________
Print Name
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APPENDIX I
"AFFILIATE" - The term denotes a person that directly or indirectly
controls, or is controlled by, or is under common control with, the Company.
"ASSOCIATE" - The term denotes (a) any corporation or organization
(other than the Company) of which you are an officer or partner or are, directly
or indirectly, the beneficial owner of ten percent or more of any class of its
equity securities; or (b) any trust or other estate in which you have a
substantial beneficial interest or as to which you serve as trustee or in a
similar fiduciary capacity; or (c) your spouse, or any relative of yours or your
spouse who shares your home or who is a director or officer of the Company or
any of its subsidiaries.
"BENEFICIAL OWNERSHIP" - Securities should be considered beneficially
owned by any person, even though the securities may not be registered in the
name of that person, if benefits substantially equivalent to those of ownership
of the securities are enjoyed by that person by reason of any contract,
understanding, relationship, or agreement or other arrangement.
Specifically, a beneficial owner of a Company's stock includes any
person who, directly or indirectly, through any contract, arrangement,
understanding, relationship, or otherwise HAS OR SHARES (i) VOTING POWER (which
includes the power to vote, or to direct the voting of such stock) and/or (ii)
INVESTMENT POWER (which includes the power to dispose, or to direct the
disposition of such stock).
In addition to the foregoing, a person is deemed to be the beneficial
owner of a Company's stock if such person has the right to acquire beneficial
ownership of such stock at any time within 60 days, including any such right so
acquired through (a) the exercise of an option, warrant, or right, (b) the
conversion of a security, (c) the power to revoke a trust, discretionary
account, or similar arrangement, or (d) the automatic termination of a trust,
discretionary account, or similar arrangement. However, if a security or power
described in clauses (a),(b), or (c) is acquired in order to change or influence
the control of a company, the holder of the security or power is deemed to be
the beneficial owner without regard to such 60-day period.
"CONTROL PERSON" - The term denotes a person who possesses the power,
directly or indirectly, to direct the management and policies of the Company,
unless such power is solely the result of an official position with such
Company.
"CONVICTION" - The term refers to a judgment or sentence in which the
accused is found guilty of a criminal offense. The term includes, but is not
limited to, a guilty plea or plea bargain.
"EXECUTIVE OFFICER" - For purposes of this questionnaire, the term
refers to the president, any vice-president in charge of a principal business
function (such as sales, administration, or finance), secretary, treasurer, or
any other person performing similar policy-making functions for the Company or
its subsidiaries.
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"FAMILY RELATIONSHIP" - The term refers to any relationship by blood,
marriage, or adoption, not more remote than first cousin.
"GROUP OF PERSONS" - The term "group" means two or more persons acting
as a partnership, limited partnership, syndicate, or other group for the purpose
of acquiring, holding, or disposing of the common stock of a company. For
purposes of this Questionnaire, the Company does not consider its Board of
Directors and/or its executive officers, as such, to constitute a "group."
"INCENTIVE AND COMPENSATION PLANS AND ARRANGEMENTS" - The terms refer
to stock options, stock appreciation rights plans, phantom stock plans, and any
other incentive or compensation plan or arrangement pursuant to which the
measure of benefits is based on objective standards or on the value of
securities of a company or another person, granted, awarded or entered into at
any time in connection with services to a company or its subsidiaries.
"LIFE OR HEALTH INSURANCE AND MEDICAL REIMBURSEMENT PLANS" - The term
refers to the cost of premiums paid by a company or any of its subsidiaries on
life insurance, health insurance, and medical reimbursement plans for the
benefit of an executive officer or director of such company, unless the sole
beneficiary under the policy is such company or its subsidiaries.
"PENSION OR RETIREMENT PLANS; ANNUITIES; EMPLOYMENT CONTRACTS; DEFERRED
COMPENSATION PLANS" - The term refers to amounts expensed for financial
reporting purposes by a company (and subsidiaries) for the year, representing
the contribution, payment, or accrual for a person's account under any existing
pension or retirement plans, annuity contract, deferred compensation plan or
similar arrangement.
"PERSON" OR "PERSONS" - The term denotes any natural person, company,
government, political subdivision, agency, or instrumentality of a government.
"PERSONAL BENEFITS" - The term refers to the value of personal benefits
which are not directly related to a person's job performance, furnished by a
company (or subsidiaries) directly, or through third persons.
"PROMOTER" - The term "promoter" includes (a) any person who, acting
alone or in conjunction with one or more other persons, directly or indirectly
takes the initiative in founding and organizing the business or enterprise of an
issuer; or (b) any person who, in connection with the founding or organizing of
the business or enterprise of an issuer, directly or indirectly receives ten
percent or more of any class of securities of the issuer or ten percent or more
of the proceeds from the sale of any class of securities, except if received
solely as underwriting commissions if such person does not otherwise take part
in founding and organizing the enterprise.
"SALARIES" - The term includes all cash remuneration distributed or
accrued in the form of salaries, fees, directors' fees, commissions, or bonuses.
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"STOCK PURCHASE PLANS, PROFIT SHARING AND THRIFT PLANS" - The term
refers to the amount of any contribution, payment or accrual for a person's
account under any stock purchase, profit sharing, thrift, or similar plan which
has been expensed during a fiscal year by a company and its subsidiaries for
financial reporting purposes.
"SUBSIDIARY" - An entity owned wholly or partially by the Company.
"TRANSACTION" - The term "transaction" is to be understood in its
broadest sense, and includes the direct or indirect receipt of anything of
value.
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APPENDIX II
(a) The making of questionable, unlawful or improper payments
or the rendering of any services or favors to government officials or employees
or their relatives, whether or not legal, to obtain or retain business or to
receive preferential treatment or consideration with regard to business or to
pay for favorable treatment obtained in the past.
(b) The making of questionable, unlawful or improper payments
or the rendering of any service or favors to persons other than government
officials or employees, or to relatives of such persons, whether or not legal,
to obtain or retain business or to receive preferential treatment or
consideration with regard to business or to pay for favorable treatment obtained
in the past.
(c) Any contributions, whether or not legal, made to any
political party, political candidate or holder of governmental office.
(d) Any bank accounts, funds or pools of funds created or
maintained without being reflected on the Company's books of account, or as to
which the receipts and disbursements therefrom have not been reflected on such
books.
(e) Any receipts or disbursements, the actual nature of which
has been disguised or intentionally misrecorded on the Company's books of
account.
(f) Any fees paid to consultants or commercial agents which
exceeded the reasonable value of the services purported to have been rendered.
(g) Any payments which involved any unlawful or improper
purpose or understanding that such payments were or are to be received.
(h) Any payments, loans, disbursements or reimbursements made
to personnel of the Company for the purposes of enabling them to expend time or
to make contributions or payments of the kind or for the purposes referred to in
paragraphs (a)-(g) above.
In connection with the above, please observe the following:
(A) Each paragraph is to be read as relating to
the activities or conduct of the Company as well as to the conduct of any person
who has acted or is acting on behalf of or for the benefit of the Company.
Persons who have acted or are acting on behalf of or for the benefit of the
Company, include, but are not necessarily limited to, directors, officers,
employees, agents, consultants and sales representatives.
(B) Each paragraph is to be read as relating to
activities or conduct both within and outside the United States.
(C) The terms "payments" and "contributions"
include not only the giving or receiving of cash or merchandise but also the
giving or receiving of anything else of value -- for
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example, services or the use of property or loans or special opportunities and
the offer or promise of any of the same.
(D) The term "indirectly" means an act done through
an intermediary or intermediaries. Payments to sales agents or representatives
which are passed on in whole or in part to purchasers, or compensation or
reimbursement to persons in consideration for their acts, are examples of acts
done through intermediaries.
(E) Your answer should consider not only matters
of which you have direct personal knowledge, but also those matters which you
have reason to believe may have existed or occurred (for example, you may not
"know" from your own personal knowledge that certain contributions were made by
the Company, but, based upon information which has otherwise come to your
attention, you may nonetheless have "reason to believe" that such a contribution
was made. In such case, your response would be "yes").
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