Exhibit 2
---------
AGREEMENT
---------
AGREEMENT (the "Agreement"), dated as of December 14, 1998, by
and among Columbia Laboratories, Inc., a Delaware corporation (the "Company"),
Xxxxxxx X. Xxxxxxx and Xxxxxx X. Xxxxx (the "Management Group"), and Xxxxx X.
Xxxxxxxxxxx, Xxxxx Xxx, Xxxxxxx Xxxxxx, Xxxxxxx X. Xxxxxxxx, Xxxxx X. Xxxxx and
Xxxxx Partners, L.P. (Messrs. Xxxxxxxxxxx, Xxx, Xxxxxx, Xxxxxxxx and Xxxxx,
together with Xxxxx Partners, L.P., being referred to herein, collectively, as
the "Signing Stockholders").
WHEREAS, the Company and certain of the Signing Stockholders
have been engaged in discussions regarding the management and operation of the
Company in anticipation of the Company's 1998 Annual Meeting of Stockholders
(the "1998 Meeting"); and
WHEREAS, the Company and the Signing Stockholders desire to
enter into this Agreement to express their understandings and agreements with
respect to the nomination of persons to serve on the Board of Directors of the
Company during the period commencing on the date hereof and ending immediately
prior to the Company's 2000 Annual Meeting of Stockholders or December 31, 2000,
if sooner (the "Term").
NOW, THEREFORE, in consideration of the promises and the
mutual covenants herein contained, the parties hereto, intending to be legally
bound, hereby agree as follows:
1. 1998 Annual Meeting. As soon as reasonably practicable
-------------------
after the date hereof, the Company shall establish a record date of December 28,
1998 for purposes of determining eligibility to vote at the 1998 Meeting. The
Company shall call the 1998 Meeting to be held at 10:00 A.M., E.D.T., on January
28, 1999, at such location as the Company may determine within the City of New
York. The 1998 Meeting shall not be cancelled or adjourned without the consent
of the Signing Stockholders.
2. Increase in Directorships. The Company agrees that during
-------------------------
the Term it will not change the size of the Company's Board of Directors without
the consent of a majority of the New Designees (as defined below).
Notwithstanding the foregoing, the Company (i) may increase the number of
members of the Board of Directors by one member to include as a director the
person separately disclosed to Xxxxx X. Xxxxxxxxxxx in writing by a letter dated
the date hereof (the "Approved Designee") and (ii) shall increase the number of
members of the Board of Directors by one additional member to include as a
director, if designated and approved in accordance with Section 3(a) hereof, the
Additional New Designee (as defined below).
3. Board of Directors.
-------------------
(a) For the duration of the Term, the Company agrees that it
will take all actions reasonably within its power, including those actions
specified in Section 3(c), to provide that the Board of Directors of the Company
will include five (5) persons designated by the Management Group (the "Incumbent
Designees"), which shall initially consist of Messrs. Xxxxxxx X. Xxxxxxx, Xxxxxx
X. Xxxxx, Xxxxxxxxx xx Xxxxxxx, Xxxx Xxxxxxx and Xxxxxx X. Xxxxxxx, and three
(3) persons designated by the Signing Stockholders, which shall initially
consist of Messrs. Xxxxx X. Xxxxxxxxxxx, Xxxxxx X. X'Xxxxxxx and Xxxxxx X.
Xxxxxxxx (together with any Additional New Designee, the "New Designees").
Within ninety (90) days after the date hereof, the Signing Stockholders may
designate a fourth person to serve on the Board of Directors (the "Additional
New Designee"), which person shall be subject to the approval of a majority of
the Incumbent Designees, such approval not to be unreasonably withheld. The
individuals separately disclosed to the Incumbent Designees by a letter dated
the date hereof are deemed to have been approved for this purpose, and no
further approval shall be required if any one of those persons is designated by
the Signing Stockholders as the Additional New Designee. If the Additional New
Designee is designated and approved by such date, the Board of Directors of the
Company shall promptly take all necessary corporate action to increase the
number of members of the Board of Directors of the Company by one member to
include as a director the Additional New Designee. If the Additional New
Designee is designated but not approved, the Signing Stockholders shall have the
right to designate a substitute Additional New Designee within thirty (30) days
after the date of such disapproval, which person shall be subject to the same
approval process as described above. If the Additional New Designee (or any
substitute Additional New Designee) is not so designated and approved, the
Signing Stockholders shall have the right to designate only three members to
serve on the Board of Directors for the duration of the Term, which number may
be further reduced in accordance with Section 3(b) below. The Board of Directors
by approval of this Agreement hereby nominates Messrs. Bologna, Meier, de
Ziegler, Carvais, Strauss, Apostolakis, X'Xxxxxxx and Oskowitz as candidates for
election to the Board of Directors at the 1998 Meeting.
(b) For the duration of the Term, the Signing Stockholders
agree that, notwithstanding Sections 3(a) and 3(c) of this Agreement, if the
aggregate number of shares of the Company's common stock, par value $0.01 per
share (the "Common Stock"), beneficially owned by Signing Stockholders who at
------------
such time have filed Schedule 13D's acknowledging cooperation with respect to
matters relating to the Company or referring to the possibility of being deemed
members of a group (whether or not disclaimed) (i) falls below 9% of the
outstanding shares of Common Stock, the Signing Stockholders will have the right
to designate only two (2) persons for nomination to the Board of Directors at
the next annual meeting of stockholders, (ii) falls below 6%
2
of the outstanding shares of Common Stock, the Signing Stockholders will have
the right to designate only one (1) person for nomination to the Board of
Directors at the next annual meeting of stockholders, and (iii) falls below 5%
of the outstanding shares of Common Stock, the Signing Stockholders will not
have the right to designate any persons for nomination to the Board of Directors
at the next annual meeting of stockholders. Upon the designation and approval of
the Additional New Designee pursuant to Section 3(a) hereof, the number of
persons which the Signing Stockholders have the right to designate pursuant to
clause (i) and clause (ii) above shall be increased by one (1) person.
Notwithstanding the foregoing, if the Signing Stockholders' share ownership
falls below 5% of the outstanding shares of Common Stock, but Xxxxx X.
Xxxxxxxxxxx (including any entities as to which he has claimed beneficial
ownership in his current Schedule 13D) beneficially owns at least 80% of the
number of outstanding shares of Common Stock reported as beneficially owned by
him in Amendment No. 3 to his Schedule 13D (totalling 926,000 shares) at all
times during the Term, the Company shall then use its best efforts to nominate,
recommend and effectuate the election of Xx. Xxxxxxxxxxx to the Board of
Directors at the 1998 Meeting and the 1999 Annual Meeting of Stockholders (the
"1999 Meeting"). For purposes of this Section 3(b), the term "outstanding
shares" shall mean all issued and outstanding shares of the Company's Common
Stock as of December 10, 1998 (totalling 28,684,687 shares), without regard to
any issuance of shares of Common Stock after such date.
(c) Subject to Section 3(b) of this Agreement, at the 1999
Meeting, the Company agrees to use its best efforts to nominate each of the
Incumbent Designees and the New Designees for election to the Board of
Directors. At the 1999 Meeting, the Company shall recommend to its stockholders
that the Incumbent Designees and the New Designees be elected to the Board of
Directors and use its best efforts to effectuate the election of the Incumbent
Designees and the New Designees to the Board of Directors.
(d) If during the period commencing with the succession to
office of the Board of Directors following the 1998 Meeting and ending
immediately prior to the Company's 2000 Annual Meeting of Stockholders (the
"2000 Meeting") at which directors are elected, a vacancy is created on the
------------
Board of Directors by reason of the death, removal or resignation of any
director, the parties hereto agree to take such action to approve and elect a
person to fill such vacancy, which person shall be designated for election as a
director (i) by the remaining Incumbent Designees, if the person who has ceased
to be a director was an Incumbent Designee, and (ii) by the remaining New
Designees, subject to the approval of a majority of the Incumbent Designees, not
to be unreasonably withheld, if the person who has ceased to be a director was a
New Designee; provided, however, if Xxxxxx X. Xxxxxxx shall resign from the
-------- -------
Board of Directors at any time when the Approved Designee is a member of the
Board of Directors or the Additional New Designee is not on the Board of
Directors, no action
3
shall be taken to replace Xx. Xxxxxxx as a member of the Board of Directors, and
the number of members of the Board of Directors shall be reduced by one member;
provided further, however, if Xxxxxx X. Xxxxxxx shall resign from the Board of
-------- ------- -------
Directors at any time when the Approved Designee is not a member of the Board of
Directors (and the Additional New Designee is on the Board of Directors), a vote
of the majority of the entire Board of Directors shall be required to approve
and elect a person to replace Xx. Xxxxxxx as a member of the Board of Directors,
and thereafter the same vote shall be required to approve and elect any
successor to the person so elected to replace Xx. Xxxxxxx, or any of such
person's immediate or subsequent successors. Notwithstanding the foregoing, if
during the period commencing with the succession to office of the Board of
Directors following the 1998 Meeting and ending immediately prior to the
Company's 2000 Meeting at which directors are elected, a vacancy, or vacancies,
is or are created on the Board of Directors by reason of a New Designee's
resignation from the Board of Directors and, at such time, the Signing
Stockholders shall have lost their right to designate one or more persons for
nomination to the Board of Directors at the next annual meeting of stockholders
pursuant to Section 3(b) hereof, the Incumbent Designees shall approve and elect
a person to fill the vacancy or vacancies caused by each such resignation.
4. Amendment of By-Laws. Effective at the 1998 Meeting, the
--------------------
By-Laws of the Company shall have been amended and restated in the form attached
as Exhibit A hereto.
---------
5. Committee Participation. The Company agrees that during the
-----------------------
period commencing with the succession to office of the Board of Directors
following the 1998 Annual Meeting and until the end of the Term, the Audit
Committee and the Compensation Committee shall each consist of one Incumbent
Designee, one New Designee (which shall be Xxxxx X. Xxxxxxxxxxx) and Xxxxxx X.
Xxxxxxx (or his successor), in each case to the extent such person shall
otherwise be eligible to participate on such committee. During the Term there
shall be no executive committee of the Board of Directors or other committee to
which the Board of Directors may otherwise delegate all or any substantial
portion of its authority.
6. No Proxy Contests or Other Stockholder Actions. During the
----------------------------------------------
Term, each of the Signing Stockholders agrees that he or it:
(a) shall cause all shares of capital stock of the Company
which have the right to vote generally in the election of directors or
otherwise, including, without limitation, shares of Common Stock
(collectively, "Voting Stock"), that are beneficially owned (within the
meaning of Regulation 13D and Rules 13d-3 and 13d-5 under the Exchange
Act) by such party (i) to be present,
4
in person or by proxy, at all meetings of stockholders of the Company
so that all such shares may be counted for the purpose of determining
if a quorum is present at such meetings, (ii) to be voted as provided
in Section 3 and in favor of the election of the Incumbent Designees
and the New Designees to the Board of Directors at the 1998 Meeting and
the 1999 Meeting, (iii) to be voted in favor of persons nominated and
recommended by the Board of Directors of the Company in any other
election of directors and (iv) to be voted in a manner consistent with
the recommendation of the Board of Directors with respect to any other
matter brought before stockholders of the Company (whether at a meeting
or by written consent) other than a vote with respect to a business
combination, sale, lease or exchange of property and assets,
recapitalization, authorization or issuance of securities or
dissolution involving the Company;
(b) shall not directly or indirectly (except through
the Company pursuant to due authorization) solicit any proxies or
consents with respect to Voting Stock or in any way participate in any
"solicitation" of any "proxy" with respect to shares of Voting Stock
(as such terms are defined in Rule 14a-1 under the Exchange Act) or
become a "participant" in any election contest with respect to the
Company (as such term is used in Rule 14a-11 under the Exchange Act) or
request or induce or attempt to induce any other person to take any
such actions or attempt to advise, counsel or otherwise influence in
any way any person with respect to the voting of Voting Stock;
(c) except to the extent previously disclosed on a
Schedule 13D or amendment thereto filed with the Securities and
Exchange Commission prior to November 23, 1998 or to the extent
appropriate to reflect this Agreement, shall not (i) form, join or
otherwise participate in any "group" (within the meaning of Section
13(d)(3) of the Exchange Act or Rule 13d-5 thereunder) with respect to
any Voting Stock (a "13D Group"), (ii) otherwise act in concert with
any other person for the purpose of holding or voting Voting Stock, or
(iii) file any amendment to any Schedule 13D that relates to a plan or
proposal referred to in paragraph (d) of Item 4 of Schedule 13D or that
contains any statement that is in any way inconsistent with the
provisions of the Agreement;
(d) shall not deposit any Voting Stock in a voting
trust or subject any Voting Stock to any arrangement or agreement with
respect to the voting of such Voting Stock or other agreement having
similar effect, except that this clause (d) shall not apply to any
arrangements that are reflected in the Company's 1998 Proxy Statement;
5
(e) except as expressly contemplated hereby, shall
not make any proposal (including any proposal pursuant to Rule 14a-8
under the Exchange Act) or bring any business before any meeting of
Stockholders and, other than actions proposed or taken at any meeting
of the Board of Directors, shall not take or seek to take any action in
the name or on behalf of the Company except pursuant to the performance
of any responsibilities attendant to any office in the Company held by
such party or pursuant to a resolution adopted by the Board of
Directors;
(f) shall not call, request the call, or seek to
call, any special meeting of stockholders of the Company;
(g) for a period of twelve (12) months following the
succession to office of the New Designees, shall not take any action to
remove, or otherwise seek the removal of, Xxxxxxx X. Xxxxxxx as
Chairman of the Board of Directors or Xxxxxx X. Xxxxx as President and
Chief Executive Officer of the Company; and
(h) shall not enter into any discussions,
negotiations, arrangements or understandings with any other person with
respect to any of the foregoing matters referred to in this Section 6
or take any action that would otherwise be in contravention of any
provision of this Agreement.
7. Confidentiality Obligations of the Directors. Each of the
---------------------------------------------
Signing Stockholders who serves as a director on the Board of Directors
acknowledges that as a director such person will receive and have access to
certain non-public information concerning the Company and that he is aware that
the United States securities laws prohibit any person who has material,
non-public information concerning the matters of the Company from purchasing or
selling securities of the Company or from communicating such information to any
other person under circumstances in which it is reasonably foreseeable that such
person is likely to purchase or sell such securities. Each of the Signing
Stockholders who serves as a director on the Board of Directors also
acknowledges that he is aware that he will be subject to Sections 16(a) and (b)
of the Exchange Act and the rules and regulations promulgated thereunder.
8. Representations and Warranties of the Signing Stockholders.
----------------------------------------------------------
The Company hereby represents and warrants to the Signing Stockholders as
follows:
(a) Authorization of Agreement. The Company has the
--------------------------
requisite power and authority to execute and deliver this Agreement and
to consummate the transactions contemplated hereby. The execution,
delivery and
6
performance by the Company of this Agreement have been duly authorized
by all necessary corporate action on behalf of the Company. This
Agreement has been duly executed and delivered by the Company and
(assuming the due authorization, execution and delivery by the other
parties hereto) constitutes the legal, valid and binding obligations of
the Company, enforceable against the Company in accordance with its
terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium and similar laws affecting creditors' rights and remedies
generally, and subject, as to enforceability, to general principles of
equity, including principles of commercial reasonableness, good faith
and fair dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity).
(b) Conflicts; Consents of Third Parties. Neither the
------------------------------------
execution and delivery by the Company of this Agreement nor the
compliance by the Company with any of the provisions hereof will (i)
conflict with, or result in the breach of, any provision of the
certificate of incorporation or by-laws of the Company, (ii) conflict
with, violate, result in the breach of, or constitute a default under
any note, bond, mortgage, indenture, license, agreement or other
obligation to which the Company is a party or by which the Company or
its properties or assets are bound, or (iii) violate any statute, rule,
regulation, order or decree of any governmental body or authority by
which the Company is bound.
9. Representations and Warranties of the Signing
---------------------------------------------
Stockholders. Each of the Signing Stockholders hereby represents and warrants to
------------
the Company as follows:
(a) Authorization of Agreement. Each of the Signing
--------------------------
Stockholders has the requisite power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated
hereby. The execution, delivery and performance by each partnership or
corporation which is a Signing Stockholder of this Agreement has been
duly authorized by all necessary partnership or corporate action on
behalf of such Signing Stockholder. This Agreement has been duly
executed and delivered by each of the Signing Stockholders and
(assuming the due authorization, execution and delivery by the other
parties hereto) constitutes the legal, valid and binding obligations of
such Signing Stockholder, enforceable against such Signing Stockholder
in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally, and subject, as to
enforceability, to general principles of equity, including principles
of commercial reasonableness, good faith and fair dealing (regardless
of whether enforcement is sought in a proceeding at law or in equity).
7
(b) Conflicts; Consents of Third Parties. Neither the
------------------------------------
execution and delivery by the Signing Stockholders of this Agreement
nor the compliance by the Signing Stockholders with any of the
provisions hereof will (i) conflict with, or result in the breach of,
any provision of the certificate of incorporation or by-laws or similar
constitutive documents of any partnership or corporation which is a
Signing Stockholder, (ii) conflict with, violate, result in the breach
of, or constitute a default under any note, bond, mortgage, indenture,
license, agreement or other obligation to which any of the Signing
Stockholders is a party or by which any such Signing Stockholder or its
properties or assets are bound, or (iii) violate any statute, rule,
regulation, order or decree of any governmental body or authority by
which any of the Signing Stockholders is bound.
(c) Ownership of Shares. Each Signing Stockholder is
-------------------
the beneficial owner (within the meaning of Regulation 13D and Rules
13d-3 and 13d-5 under the Exchange Act) of the shares of Common Stock
indicated as being beneficially owned by such Signing Stockholder on
Exhibit B hereto. Upon the request of the Board of Directors in
connection with the nomination of persons for election to the Board of
Directors at the 1999 Meeting, each of the Selling Stockholders shall
deliver to the Board of Directors, not less than twenty (20) days prior
to the date established as the record date for the 1999 Meeting, a
statement in writing that sets forth the number of shares of Common
Stock then beneficially owned by such Signing Stockholder as of such
date, which statement shall be certified in writing by the record owner
or broker-dealer, if any, holding such shares.
(d) Information. The Signing Stockholders have
-----------
furnished the Company with the information required under Item 401 of
Regulation S-K with respect to each of the New Designees, and will
furnish the Company any other information regarding the New Designees
it shall reasonably request in connection with the preparation of the
Company's 1998 Proxy Statement for the 1998 Meeting.
10. Miscellaneous.
-------------
(a) Amendment. No change or modification of this Agreement
---------
shall be valid, binding or enforceable unless the same shall be in writing and
signed by the Company, Xxxxxxx X. Xxxxxxx, Xxxxxx X. Xxxxx and the holders of a
majority of outstanding shares of Common Stock then beneficially owned by the
Signing Stockholders.
8
(b) No Waiver. Any waiver by any party of a breach of any
---------
provision of this Agreement shall not operate as or be construed to be a waiver
of any other breach of such provision or of any other provision of this
Agreement. The failure of a party to insist upon strict adherence to any term of
this Agreement on one or more occasions shall not be considered a waiver or
deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement.
(c) Notices. All notices, requests or instruction hereunder
-------
shall be in writing and delivered personally or sent by registered or certified
mail, postage prepaid or by telecopy (or like transmission), as follows:
(1) if to the Company:
0000 Xxxxxxxxx 000 Xxxxxx
Xxxxxxxx, Xxxxxxx 00000
Attention: President
Fax: (000) 000-0000
with a copy to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxx, Esq. or
Xxxx X. Xxxxxxx, Esq.
Fax: (000) 000-0000
(2) if to any other party hereto, at his or
its address set forth in the records of
the Company or such other address as may
be specified by such party by written
notice as provided herein.
(d) Counterparts. This Agreement may be executed in two or
------------
more counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute one and the same instrument.
(e) Governing Law. This Agreement, and all amendments hereto,
-------------
shall be governed by and construed in accordance with the laws of the State of
Delaware.
9
(f) Submission to Jurisdiction. The parties hereto hereby
--------------------------
irrevocably submit to the exclusive jurisdiction of any federal or state court
located within the State of New York, Borough of Manhattan, over any dispute
arising out of or relating to this Agreement or any of the transactions
contemplated hereby and each party hereby irrevocably agrees that all claims in
respect of such dispute or any suit, action proceeding related thereto may be
heard and determined in such courts. The parties hereby irrevocably waive, to
the fullest extent permitted by applicable law, any objection which they may now
or hereafter have to the laying of venue of any such dispute brought in such
court or any defense of inconvenient forum for the maintenance of such dispute.
Each of the parties hereto agrees that a judgment in any such dispute may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.
(g) Complete Agreement. This Agreement constitutes the
------------------
complete understanding among the parties with respect to its subject matter and
no alteration or modification of any of its provisions shall be valid unless
made in writing and signed by all of the parties hereto.
(h) Section Headings. The section headings contained in this
----------------
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
(i) Binding Effect; Successors and Assigns. All of the terms
--------------
of this Agreement shall be binding upon and shall inure to the benefit of and
shall be binding upon the heirs, executors, administrators, personal
representatives, successors and permitted assigns of the parties hereto, but
neither this Agreement nor any of the rights, interests, or obligations
hereunder may be assigned by any of the parties hereto without the prior written
consent of the other parties and any such attempted assignment without consent
shall be void.
(j) Expenses. Not later than five (5) months after the date
--------
hereof, the Company shall reimburse the Signing Shareholders up to $60,000 for
the reasonable and documented legal fees and expenses incurred by the Signing
Shareholders in connection with the negotiation, execution and delivery of this
Agreement.
10
IN WITNESS WHEREOF, the parties have signed this Agreement as
of the date first set forth above.
COLUMBIA LABORATORIES, INC.
By:
-------------------------------
Name:
Title:
----------------------------------
Xxxxxxx X. Xxxxxxx
----------------------------------
Xxxxxx X. Xxxxx
----------------------------------
Xxxxx X. Xxxxxxxxxxx
----------------------------------
Xxxxx Xxx
----------------------------------
Xxxxxxx Xxxxxx
----------------------------------
Xxxxxxx X. Xxxxxxxx
----------------------------------
Xxxxx X. Xxxxx
11
XXXXX PARTNERS, L.P.
By:
-------------------------------
Name:
Title:
12
EXHIBIT A
---------
AMENDED AND RESTATED BY-LAWS
COLUMBIA LABORATORIES, INC.
ARTICLE I.
MEETINGS OF STOCKHOLDERS
SECTION 1. Annual Meeting. A meeting of stockholders shall be
--------------
held annually for the election of directors and the transaction of such other
business as is related to the purpose or purposes set forth in the notice of
meeting on such date as may be fixed by the Board of Directors, or if no date is
so fixed on the second Tuesday in April in each and every year, unless such day
shall fall on a legal holiday, in which case such meeting shall be held on the
next succeeding business day, at such time and at such place as may be fixed by
the Board of Directors.
SECTION 2. Special Meetings. Special meetings of the
----------------
stockholders for any purpose may be called by the Board of Directors, the
Chairman of the Board, the President or the Secretary, and shall be called by
the Chairman of the Board, the President or the Secretary at the written request
of the holders of record of a majority of the outstanding shares of the
Corporation entitled to vote at such meeting. Special meetings shall be held at
such time as may be fixed in the call and stated in the notices of meeting or
waiver thereof. At any special meeting only such business may be transacted as
is related to the purpose or purposes for which the meeting is convened.
SECTION 3. Place of Meetings. Meetings of stockholders shall
-----------------
be held at such place, within or without the State of Delaware or the United
States of America, as may be fixed in the call and stated in the notice of
meeting or waiver thereof.
SECTION 4. Notice of Meetings; Adjourned Meetings. Notice of
--------------------------------------
each meeting of stockholders shall be given in writing and shall state the
place, date and hour of the meeting. The purpose or purposes for which the
meeting is called shall be stated in the notices of each special meeting and of
each annual meeting at which any business other than the election of directors
is to be transacted.
A copy of the notice of any meeting shall be given, personally
or by mail, not less then ten (10) nor more than sixty (60) days before the date
of the meeting, to each stockholder entitled to vote at such meeting. If mailed,
such notice shall be deemed given when deposited in the United States mail, with
postage thereon prepaid, directed to the stockholder at his address as it
appears on the record of stockholders.
When a meeting is adjourned for less than thirty (30) days in
any one adjournment, it shall not be necessary to give any notice of the
adjourned meeting if the time and place to which the meeting is adjourned are
announced at the meeting at which the adjournment is taken, and at the adjourned
meeting any business may be transacted that might have been transacted on the
original date of the meeting. When a meeting is adjourned for thirty (30) days
or more, notice of the adjourned meeting shall be given as in the case of an
original meeting.
2
SECTION 5. Waiver of Notice. The transactions of any meeting
----------------
of stockholders, however called and with whatever notice, if any, are as valid
as though had at a meeting duly held after regular call and notice, if: (a) all
the stockholders entitled to vote are present in person or by proxy and no
objection to holding the meeting is made by anyone so present, and if, either
before or after the meeting, each of the persons entitled to vote, not present
in person or by proxy, signed a written waiver of notice, or a consent to the
holding of the meeting, or an approval of the action taken as shown by the
minutes thereof.
Whenever notice is required to be given to any stockholder, a
written waiver thereof signed by such stockholder, whether before or after the
time thereon stated, shall be deemed equivalent to such notice. Attendance of a
person at a meeting of stockholders shall constitute a waiver of notice of such
meeting, except when such stockholder attends for the express purpose of
objecting, at the beginning of the meeting, to the transaction of any business
because the meeting is not lawfully called or convened. Neither the business to
be transacted at, nor the purpose of any meeting of stockholders need be
specified in any written waiver of notice thereof.
SECTION 6. Qualification of Voters. Except as may be otherwise
-----------------------
provided in the Certificate of Incorporation, every stockholder of record shall
be entitled to one vote on each matter submitted to a vote at a meeting of
stockholders for every share standing in his name on the record of stockholders.
3
SECTION 7. Quorum. At any meeting of the stockholders the
------
presence, in person or by proxy, of the holders of a majority of the shares
entitled to vote thereat shall constitute a quorum for the transaction of any
business.
When a quorum is once present to organize a meeting, it is not
broken by the subsequent withdrawal of any stockholders. The stockholders
present may adjourn the meeting despite the absence of a quorum.
SECTION 8. Proxies. Every stockholder entitled to vote at a
-------
meeting of stockholders or to express consent or dissent without a meeting may
authorize another person or persons to act for him by proxy. Every proxy must be
executed by the stockholder or his attorney-in-fact. No proxy shall be valid
after the expiration of three (3) years from the date thereof unless otherwise
provided in the proxy.
Every proxy shall be revocable at the pleasure of the
stockholder executing it, except as otherwise provided therein and as permitted
by law. Except as otherwise provided in the proxy, any proxy holder may appoint
in writing a substitute to act in his place.
SECTION 9. Voting. Except as otherwise required by law,
------
directors shall be elected by a plurality of the votes cast at a meeting of
stockholders by the holders of shares entitled to vote in the election.
Whenever any corporate action, other than the election of
directors, is to be taken by vote of the stockholders at a meeting, it shall,
except as otherwise required
4
by law or the Certificate of Incorporation, be authorized by a majority of the
votes cast thereat, in person or by proxy.
SECTION 10. Action Without A Meeting. Whenever stockholders
------------------------
are required or permitted to take any action at a meeting or by vote, such
action may be taken without a meeting, without prior notice and without a vote,
by consent in writing setting forth the action so taken, signed by the holders
of outstanding shares having not less than the minimum number of votes that
would be necessary to authorize or take such action at a meeting at which all
shares entitled to vote thereon were present and voted. Prompt notice of the
taking of the corporate action without a meeting by less than unanimous written
consent shall be given to those stockholders who have not consented in writing.
SECTION 11. Record Date. The Board of Directors is authorized
-----------
to fix a day not more than sixty (60) days nor less than ten (10) days prior to
the day of holding any meeting of stockholders as the day as of which
stockholders entitled to notice of and to vote at such meeting shall be
determined; and only stockholders of record on such day shall be entitled to
notice or to vote at such meeting.
SECTION 12. Inspectors of Election. The Chairman of any
----------------------
meeting of the stockholders may appoint one or more Inspectors of Election. Any
Inspector so appointed to act at any meeting of the stockholders, before
entering upon the discharge of his or her duties, shall be sworn faithfully to
execute the duties of an Inspector at such meeting with strict impartiality, and
according to the best of his or her ability.
5
ARTICLE II.
BOARD OF DIRECTORS
------------------
SECTION 1. Power of Board and Qualification of Directors. The
---------------------------------------------
business and affairs of the Corporation shall be managed by the Board of
Directors.
SECTION 2. Number of Directors. The number of directors
-------------------
constituting the entire Board of Directors shall be such number not less than
one (1) nor more than fifteen (15) as may be fixed from time to time by
resolution adopted by the stockholders or by the Board. The number of directors
constituting the initial Board of Directors shall be three.
SECTION 3. Election and Term of Directors. At each annual
------------------------------
meeting of stockholders, directors shall be elected to serve until the next
annual meeting.
SECTION 4. Resignations. Any director of the Corporation may
------------
resign at any time by giving written notice to the Board of Directors, the
Chairman of the Board, the President or the Secretary of the Corporation. 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 of Directors. Any or all of the directors
--------------------
nay be removed with or without cause by vote of the stockholders.
SECTION 6. Newly Created Directorships and Vacancies. Newly
-----------------------------------------
created directorships resulting from an increase in the number of directors and
vacancies occurring in the Board of Directors for any reason except the removal
of
6
directors by stockholders without cause may be filled by vote of a majority of
the directors then in office although less than a quorum exists, or may be
filled by the stockholders. Vacancies occurring as a result of the removal of
directors by stockholders, without cause, shall be filled by the stockholders. A
director elected to fill a vacancy or a newly created directorship shall be
elected to hold office until the next annual meeting of stockholders.
SECTION 7. Committees of Directors. The Board of Directors, by
-----------------------
resolution adopted by a majority of the entire Board of Directors, may designate
from among its members committees, each consisting of one or more directors, and
to which, to the extent provided in the resolution, the Board of Directors may
delegate authority with respect to certain specific matters from time to time;
provided, however, that with the exception of the Audit Committee and the
Compensation Committee, the Board of Directors may not designate any committee
which shall have all or any substantial portion of the authority of the Board of
Directors, including without limitation the power and authority to declare a
dividend or to authorize the issuance of stock.
The Board of Directors may designate one or more directors as
alternate members of any such committee, who may replace any absent member or
members at any meeting of such committee.
SECTION 8. Compensation of Directors. The Board of Directors
-------------------------
shall have authority to fix the compensation of directors for services in any
capacity, or to
7
allow a fixed sum plus expenses, if any, for attendance at meetings of the Board
or of committees designated thereby.
SECTION 9. Interest of Director in a Transaction.
-------------------------------------
(a) No contract or transaction between the Corporation and one
or more of its directors or officers, or between the Corporation and any other
corporation, partnership, association or other organization in which one or more
of its directors or officers are directors or officers, or have a financial
interest, shall be void or voidable solely for this reason, or solely because
the director or officer is present at or participates in the meeting of the
Board or committee thereof which authorized the contract or transaction, or
solely because his or their votes are counted for such purpose, if:
(1) The material facts as to his relationship or interest and
as to the contract or transaction are disclosed or are known to the
Board of Directors or the committee, and the Board or committee, in
good faith, authorizes the contract or transaction by the affirmative
vote of a majority of the disinterested directors, even though the
disinterested directors be less than as quorum; or
(2) The material facts as to his relationship or interest and
as to the contract or transaction are disclosed or are known to the
8
stockholders entitled to vote thereon, and the contract or
transaction is specifically approved, in good faith, by vote of the
stockholders; or
(3) The contract or transaction is fair as to the Corporation
as of the time it is authorized, approved or ratified, by the Board
of Directors, a committee thereof, or the stockholders.
(b) Common or interested directors may be counted in
determining the presence of a quorum at a meeting of the Board of Directors or
of a committee which authorized the contract or transaction.
ARTICLE III.
MEETINGS OF THE BOARD
---------------------
SECTION 1. Regular Meetings. Regular meetings of the Board of
----------------
Directors may be called by the Chairman of the Board or the President, without
notice, at such time and place, within or without the State of Delaware, or the
United States of America, as may from time to time be fixed by the Chairman of
the Board or the President, but not less than six (6) times annually.
SECTION 2. Special Meetings; Notice; Waiver. Special meetings
--------------------------------
of the Board of Directors may be held at any time, place, within or without the
State of Delaware or the United States of America, upon the call of the Chairman
of the Board or the President, by oral, telegraphic or written notice, duly
given to or sent or mailed to each director not less than two (2) days before
such meeting. Special meetings shall
9
be called by the Chairman of the Board or the President upon the written request
of any five (5) directors.
Notice of a special meeting need not be given to any director
who submits a signed waiver or notice, whether before or after the meeting, or
who attends the meeting without protesting, prior thereto or at its
commencement, the lack of notice to him.
A notice, or waiver of notice, need not specify the purpose of
any special meeting of the Board of Directors.
SECTION 3. Quorum; Action by the Board; Adjournment. At all
----------------------------------------
meetings of the Board of Directors, a majority of the whole Board shall
constitute a quorum for the transaction of business, except that when the number
of directors constituting the whole Board shall be an even number, one-half of
that number shall constitute a quorum.
The vote of a majority of the directors present at the time of
the vote, if a quorum is present at such time, shall be the act of the Board,
except as may be otherwise specifically provided by law or by the Certificate of
Incorporation or by these By-Laws.
A majority of the directors present, whether or not a quorum
is present, may adjourn any meeting to another time and place.
SECTION 4. Action Without a Meeting. Any action required or
------------------------
permitted to be taken at any meeting of the Board, or any committee thereof, may
be
10
taken without a meeting if all members of the Board or committee, as the case
may be, consent thereto in writing, and the writing or writings are filed with
the minutes or proceedings of the Board or committee, whether done before or
after the action so taken.
SECTION 5. Action Taken by Conference Telephone. Members of
------------------------------------
the Board of Directors, or any committee thereof, may participate in a meeting
by means of conference telephone or similar communications equipment, by means
of which all persons participating in the meeting can hear each other. If one or
more of the members of the Board of Directors participating in the meeting is
involuntarily disconnected from such meeting or can no longer hear or be heard
by all other participating members, then such meeting shall be adjourned by
either the Chairman of the Board or the President until such time as all members
of the Board of Directors participating in the meeting are reconnected or
restored to such meeting so that all persons can participate fully.
ARTICLE IV.
OFFICERS
--------
SECTION 1. Officers. The Board of Directors shall elect a
--------
President, one or more Vice Presidents, a Secretary and a Treasurer of the
Corporation, and from time to time, may elect or appoint such other officers as
it may determine. Any two or more offices may be held by the same person.
11
Notwithstanding Section 3 of Article III of these By-Laws,
until after the annual meeting of stockholders to be held in 2000, a vote of 75%
of the members constituting the whole Board shall be required in order to elect
anyone other than Xxxxxxx X. Xxxxxxx to the position of Chairman of the Board
and anyone other than Xxxxxx X. Xxxxx to the positions of President and Chief
Executive Officer.
Securities of other corporations held by the corporation may
be voted by any officer designated by the Board, and, in the absence of any such
designation, by the President, any Vice President, the Secretary, or the
Treasurer.
The Board may require any officer to give security for the
faithful performance of his duties.
SECTION 2. President. The President shall be the chief
---------
executive and chief operating officer of the Corporation with all the rights and
powers incident to that position.
SECTION 3. Vice President. The Vice Presidents shall perform
--------------
such duties as may be prescribed or assigned to them by the Board of Directors,
the Chairman of the Board or President. In the absence of the President the
first-elected Vice President shall perform the duties of the President. In the
event of the refusal or incapacity of the President to function as such, the
first-elected Vice President shall perform the duties of the President until
such time as the Board of Directors elects a new President. In the event of the
absence, refusal or incapacity of the first-elected Vice President, the other
Vice Presidents, in order of their rank, shall so perform the
12
duties of the President; and the order of rank of such other Vice Presidents
shall be determined by the designated rank of their offices or, in the absence
of such designation, by seniority in the office of Vice President; provided that
said order or rank may be established otherwise by action of the Board of
Directors.
SECTION 4. Treasurer. The Treasurer shall perform all the
---------
duties customary to that office, and shall have the care and custody of the
funds and securities of the Corporation. He shall at all reasonable times
exhibit his books and accounts to any director upon application, and shall give
such bond or bonds for the faithful performance of his duties with such surety
or sureties as the Board of Directors from time to time may determine.
SECTION 5. Secretary. The Secretary shall act as secretary of
---------
and shall keep the minutes of the Board of Directors and of the stockholders,
have the custody of the seal of the Corporation and perform all of the other
duties usual to that office.
SECTION 6. Assistant Treasurer and Assistant Secretary. Any
-------------------------------------------
Assistant Treasurer or Assistant Secretary shall perform such duties as may be
prescribed or assigned to him by the Board of Directors, the Chairman of the
Board, or the President. An Assistant Treasurer shall give such bond or bonds
for the faithful performance of his duties with such surety or sureties as the
Board of Directors from time to time may determine.
13
SECTION 7. Term of Office; Removal. Each officer shall hold
-----------------------
office for such term as may be prescribed by the Board. Notwithstanding Section
3 of Article III, removal of the Chairman of the Board or the President for
cause shall require the vote of 75% of the members constituting the whole Board,
and removal of the Chairman of the Board or the President without cause shall
require the vote of 66.67% of the members constituting the whole Board. All
other officers may be removed at any time by the Board, with or without cause,
by the vote of the majority of the Board. The removal of any officer without
cause shall be without prejudice to his contract rights, if any. The election or
appointment of an officer, shall not, of itself, create contract rights.
SECTION 8. Compensation. The compensation of all officers of
------------
the Corporation shall be fixed by the Board of Directors.
ARTICLE V. SHARE
CERTIFICATES
------------
SECTION 1. Form of Share Certificates. The shares of the
--------------------------
Corporation shall be represented by certificates, in such form as the Board of
Directors may from tine to time prescribe, signed by the Chairman of the Board,
the President, or a Vice President, and by the Secretary, an Assistant
Secretary, the Treasurer or an Assistant Treasurer, and shall be sealed with the
seal of the Corporation or a facsimile thereof. The signatures of the officers
upon a certificate may be facsimiles if the
14
certificate is countersigned by a transfer agent or registered by a registrar
other than the Corporation or its employees. In case any such officer who has
signed or whose facsimile signature has been placed upon a certificate shall
have ceased to be such officer before such certificate is issued, it may be
issued by the Corporation with the same effect as if he were such officer at the
date of issue.
SECTION 2. Lost Certificates. In case of the loss, theft,
-----------------
mutilation or destruction of a stock certificate, a duplicate certificate will
be issued by the Corporation upon notification thereof and receipt of such
proper indemnity or assurances as the Board of Directors may require.
SECTION 3. Transfer of Shares. Transfers of shares of stock
------------------
shall be made upon the books of the Corporation by the registered holder in
person or by duly authorized attorney, upon surrender of the certificate or
certificates for such shares properly endorsed.
SECTION 4. Registered Stockholders. Except as otherwise
-----------------------
provided by law, 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 or other distributions and to vote as such owner, and to hold such
person liable for calls and assessments, and shall not be bound to recognize any
equitable or legal claim to or interest in such shares on the part of any other
person.
15
ARTICLE VI.
INDEMNIFICATION
---------------
SECTION 1. Actions by or in the Right of the Corporation. Any
---------------------------------------------
person made a party to an action by or in the right of the Corporation to
procure a judgment in its favor by reason of the fact that he, his testator or
intestate, is or was a Director or officer of the Corporation shall be
indemnified by the Corporation against the reasonable expenses, including
attorneys' fees, actually and necessarily incurred by him in connection with the
defense of such action or in connection with an appeal therein, to the fullest
extent permitted by the General Corporation Law or any successor thereto.
SECTION 2. Action or Proceeding Other Than by or in the Right
--------------------------------------------------
of the Corporation. Any person made or threatened to be made a party to an
------------------
action or proceeding other than one by or in the right of the Corporation to
procure a judgment in its favor, whether civil or criminal, including an action
by or in the right of any other corporation of any type or kind, domestic or
foreign, which any Director or officer of the Corporation served in any capacity
at the request of the Corporation, by reason of the fact that he, his testator
or intestate, was a Director or officer of the Corporation, or served such other
corporation in any capacity, shall be indemnified by the Corporation against
judgments, fines, amounts paid in settlement and reasonable expenses, including
attorneys' fees actually and necessarily incurred as a result of such action or
proceeding, or any appeal therein, if such Director or officer acted in good
16
faith for a purpose which he reasonably believed to be in the best interests of
the Corporation and, in criminal actions or proceedings, in which he had no
reasonable cause to believe that his conduct was unlawful. The termination of
any such civil or criminal action or proceeding by judgment, settlement,
conviction or upon a plea of nolo contendere, or its equivalent shall not in
itself create a presumption that any such Director or officer did not act in
good faith for a purpose which he reasonably believed to be in the best
interests of the Corporation or that he had reasonable cause to believe that his
conduct was unlawful.
SECTION 3. Opinion of the Counsel. In taking any action or
----------------------
making any determination pursuant to this Article, the Board of Directors and
each Director, officer or employee, whether or not interested in any such action
or determination, may rely upon an opinion of counsel selected by the Board.
SECTION 4. Other Indemnification; Limitation. The
---------------------------------
Corporation's obligations under this Article shall not be exclusive or in
limitation of but shall be in addition to any other rights to which any such
person may be entitled under any other provision of these By-Laws, or by
contract, or as a matter of law, or otherwise. All of the provisions of this
Article VI of the By-Laws shall be valid only to the extent permitted by the
Certificate of Incorporation and the laws of the State of Delaware.
17
ARTICLE VII.
MISCELLANEOUS PROVISIONS
------------------------
SECTION 1. Corporate Seal. The corporate seal shall have
--------------
inscribed thereon the name of the Corporation and shall be in such form as the
Board of Directors may from time to time determine.
SECTION 2. Fiscal Year. The fiscal year of the Corporation
-----------
shall be the twelve month period ending December 31.
SECTION 3. Checks and Notes. All checks and demands for money
----------------
and notes or other instrument evidencing indebtedness or obligations of the
Corporation shall be signed by such officer or officers or other person or
persons as shall be authorized from time to time by the Board of Directors.
ARTICLE VIII.
AMENDMENTS
----------
SECTION 1. Power to Amend. By-Laws of the Corporation may be
--------------
adopted, amended or repealed by the Board of Directors, subject to amendment or
repeal by the stockholders entitled to vote thereon. Notwithstanding the
foregoing provisions, any amendment to or repeal of Sections 1 or 2 of Article
III, Sections 1 or 7 of Article IV, or Section 1 of Article VIII of these
By-Laws by the Board of Directors shall require the vote of 75% of the members
constituting the whole Board.
18
EXHIBIT B
---------
SIGNING STOCKHOLDERS'
BENEFICIAL OWNERSHIP INTEREST
IN COMMON STOCK
Signing Stockholder Ownership Interest
------------------- ------------------
Xxxxx X. Xxxxxxxxxxx
935,900
Xxxxx Xxx 214,000
Xxxxxxx Xxxxxx 375,000
Xxxxxxx X. Xxxxxxxx 1,352,600
Xxxxx X. Xxxxx 968,100
Xxxxx Partners, L.P. 460,000
