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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
Daniel Green Company
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(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(4) Date Filed:
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DANIEL GREEN COMPANY
ONE MAIN STREET
DOLGEVILLE, NEW YORK 13329
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 6, 2000
The Annual Meeting of Stockholders of Daniel Green Company (the "Company")
will be held at the Marriott Hotel, Carrier Circle, Syracuse, New York on
Thursday, April 6, 2000 at 10:00 o'clock in the forenoon, for the following
purposes:
1. To elect six persons to the Board of Directors of the Company.
2. To ratify the action of the Board of Directors in selecting Deloitte &
Touche LLP as auditors for the Company for 2000.
3. To approve a proposal to change the jurisdiction of incorporation of the
Company from the Commonwealth of Massachusetts to the State of Delaware
through merger of the Company into its wholly owned Delaware subsidiary
which shall be the surviving corporation known as Daniel Green Company
and to approve new By-Laws.
4. To transact such other business as may properly come before the meeting.
Stockholders of record as of the close of business on February 11, 2000 are
entitled to notice of and to vote at the meeting and at any adjournment thereof.
By order of the Board of Directors
GARY E. PFLUGFELDER, Clerk
March 1, 2000
A FORM OF PROXY AND A RETURN ENVELOPE ARE ENCLOSED FOR THE USE OF
STOCKHOLDERS. IT IS REQUESTED THAT YOU FILL IN, DATE AND SIGN THE ENCLOSED PROXY
AND RETURN IT IN THE ENCLOSED ENVELOPE EVEN IF YOU PLAN TO ATTEND THE MEETING IN
SYRACUSE ON APRIL 6, 2000.
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DANIEL GREEN COMPANY
ONE MAIN STREET
DOLGEVILLE, NEW YORK 13329
PROXY STATEMENT
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 6, 2000
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Daniel Green Company, a corporation organized under the laws of
The Commonwealth of Massachusetts (the "Company"), for use at the Annual Meeting
of Stockholders of the Company to be held on Thursday, April 6, 2000 at 10:00
A.M. at the Marriott Hotel, Carrier Circle, Syracuse, New York, together with
any and all adjournments thereof. It is anticipated that this Proxy Statement
and the enclosed proxy will first be sent or given to stockholders on or about
March 1, 2000. A copy of the Annual Report to Stockholders of the Company for
the year ended December 31, 1999, including audited financial statements, is
being mailed with this Proxy Statement.
The close of business on February 11, 2000 has been fixed as the record
date for the determination of stockholders entitled to notice of, and to vote
at, the meeting and at any adjournment. Each stockholder shall be entitled to
one vote for each share held of record in his or her name on that date. There
were outstanding on the record date 1,567,342 shares of Common Stock, $2.50 par
value per share, of the Company, being the only class of stock of the Company
issued and outstanding and entitled to vote at the meeting.
The enclosed proxy is solicited by and on behalf of the Company, which has
designated the nominees for Directors listed below. A stockholder giving such
proxy has the right to revoke it at the meeting or at any time prior thereto.
All shares represented by proxies in the form enclosed herewith will be voted at
the meeting and at any adjournments in accordance with the terms of such
proxies, provided such proxies appear to be valid and to have been executed by
stockholders of record entitled to vote at the meeting and have not previously
been revoked. If no contrary instructions are given, the persons named in the
proxy will vote FOR the election of each of the Board's nominees for the Board
of Directors, FOR the ratification of the action of the Board of Directors in
selecting Deloitte & Touche LLP as auditors for the Company and FOR the merger
of the Company (a Massachusetts corporation) into its wholly owned Delaware
subsidiary which shall be the surviving corporation known as Daniel Green
Company, thus effecting a reincorporation of the Company in Delaware; and to
approve new By-Laws (the "Reincorporation Proposal").
The Board of Directors does not know of any matters not specifically
referred to below which may come before the meeting. However, if any other
matters are properly presented to the meeting, it is the intention of the
persons named in the accompanying proxy to vote, or otherwise act, in accordance
with their best judgment on such matters.
In accordance with the By-Laws of the Company, a majority of the
outstanding shares of Common Stock entitled to vote, present in person or
represented by proxy at the meeting, is required to constitute a quorum for the
transaction of business. The affirmative vote of 66 2/3% of the outstanding
shares of Common Stock is required for approval of the Reincorporation Proposal
merger. The affirmative vote of a majority of the quorum shall be required for
the election of Directors and to pass any measure properly presented to the
meeting other than the Reincorporation Proposal. Shares which abstain from
voting on any matter shall be included for purposes of determining the presence
of a quorum, but shall be excluded in tabulating votes cast for or against any
proposal to which an abstention pertains. Similarly, shares voted by record
holders exercising proxy authority on behalf of beneficial owners shall be
included for purposes of determining the presence of a quorum, but shall be
excluded in tabulating votes cast for or against any matter with respect to
which required voting authority has not been granted.
All costs of preparing, assembling and mailing the enclosed proxy material,
and any additional material which may hereafter be sent in connection with the
solicitation and collection of the enclosed proxy, will be paid by the Company
and no part will be paid directly or indirectly by any other person.
Solicitation of proxies
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may be made by personal interview, mail, telephone or telecopier by officers and
regular employees of the Company but no additional compensation will be paid
them for the time so employed.
I. ELECTION OF DIRECTORS
The size of the Board of Directors is currently seven. David T. Griffith
has informed the Board that he does not intend to stand for re-election. The
Board does not presently intend to fill this directorship. Accordingly,
effective upon the election of directors at the year 2000 annual meeting the
size of the Board of Directors shall be fixed at six directors. Each of the
persons named below has been nominated by the Board for election and has
consented to serve as a Director (unless unexpectedly unavailable) until the
next annual meeting of stockholders and until his successor is duly elected and
qualified. Each nominee now serves as a Director. Set forth below are the names
and certain information about the Company's six nominees for Director:
EDWARD BLOOMBERG, Age: 62
Edward Bloomberg has been a Director of the Company since 1993. For more
than the last five years Mr. Bloomberg has been an independent investment
advisor.
STEVEN M. DEPERRIOR, Age: 41
Steven M. DePerrior has been a Director of the Company since 1996. He is a
Principal with Burke Group, which provides certain human-resources consulting
services to the Company. Mr. DePerrior also serves on the board of directors of
Centennial Technologies.
GREGORY M. HARDEN, Age: 43
Gregory M. Harden has been a Director of the Company since 1996. He is
President and Chief Executive Officer of Harden Furniture Co., Inc. , a
furniture manufacturer in McConnellsville, New York. Mr. Harden also serves on
the board of directors for Oneida, Ltd. and New York Design Center.
GARY E. PFLUGFELDER, Age: 68
Gary E. Pflugfelder has been a Director of the Company since 1983. Mr.
Pflugfelder is sales consultant to, and prior to September 6, 1992 served as
General Manager of, the Personal Financial Security Division of Aetna Life &
Casualty Company.
JAMES R. RIEDMAN, Age: 40
James R. Riedman has been a Director of the Company since 1993 and has been
Chairman of the Board of Directors and Chief Executive Officer of the Company
since 1996. Mr. Riedman is President of Riedman Corporation, a commercial
insurance agency which obtains property and casualty insurance coverage for the
Company.
GREG A. TUNNEY, Age: 38
Greg A. Tunney has been a Director of the Company since 1998 and has been
President and Chief Operating Officer of the Company since 1998. Prior to April
1998, Mr. Tunney had been a Vice President of Brown Shoe Company since 1992.
There are no family relationships among the Directors or the executive
officers of the Company.
A stockholder using the enclosed form of proxy may authorize the persons
named in the proxy to vote for all or any of the above named nominees or may
withhold from said persons authority to vote for all or any of such nominees.
The Board of Directors recommends a vote FOR the nominees named above. If, for
any reason, any of the nominees named above should not be available for election
as contemplated, it is the intention of the persons named in the proxy to vote
for such other person or persons, if any, as the Board of Directors may
recommend. The Board of Directors has no reason to believe any nominees will be
unavailable.
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MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES
OF THE BOARD OF DIRECTORS DURING 1999
The Board of Directors held five meetings during 1999. Each of the
Directors attended more than 75% of the total number of meetings of the Board of
Directors and any committee on which he served.
The Board has a Compensation/Pension Committee whose function is to review
executive compensation, including the grant of stock options under the Company's
Stock Incentive Plan, and matters relating to the Company's benefit plans. The
members of the Compensation/Pension Committee at the end of 1999 were Messrs.
Pflugfelder, DePerrior and Griffith. The Compensation/Pension Committee met
twice during 1999.
The Board has a Nominating Committee whose function is to select candidates
for nomination to the Board of Directors. The members of the Nominating
Committee at the end of 1999 were Messrs. Riedman, Bloomberg and DePerrior. The
Nominating Committee did not meet during 1999. While there is no formal
procedure established for stockholders to submit recommendations to the
Nominating Committee, the Nominating Committee will consider candidates whose
names are submitted to the Company.
The Board also has an Audit Committee whose members at the end of 1999 were
Messrs. Bloomberg, Griffith and Harden. The Audit Committee met three times
during 1999. In carrying out its responsibilities, the Audit Committee reviews
the Company's policies and procedures for internal accounting and financial
controls with the Company's independent auditors and with management and also
reviews the degree of cooperation extended to the auditors by Company employees.
The Committee also reviews the results of the audit of the Company's year-end
financial statements and notes.
Other functions of the Audit Committee are to recommend the selection of
the Company's independent auditors and to approve any professional service
rendered by the independent auditors after considering whether providing such
service will affect the independence of the auditors.
A Special Committee of the Board was appointed on November 18, 1999 to
consider, negotiate and vote upon an agreement with Riedman Corporation for the
purchase by the Company of the common stock of Penobscot Shoe Company which
Riedman Corporation had acquired in a cash tender offer. All of the members of
the Board other than James R. Riedman, President of Riedman Corporation, and
Greg Tunney, President of the Company, were appointed to the Special Committee.
The Special Committee met five times, including meetings with independent
counsel. A Stock Purchase Agreement was unanimously approved by the Committee
and signed by the Company and Riedman Corporation on February 10, 2000. See
"Certain Relationships and Related Transactions."
COMPENSATION OF DIRECTORS
Each Director receives a $500 fee for each meeting of the Board of
Directors attended. In addition, each Director who is not an officer of the
Company receives a $500 fee for each meeting of a committee of the Board
attended ($650 in the case of the committee chairman). Directors who are not
officers of the Company are also paid an annual retainer of $2,500.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to the
beneficial ownership of the Company's Common Stock by each beneficial owner
known by the Company to own 5% or more of the Common Stock, each current
Director, each nominee for Director, the Chief Executive Officer of the Company
and all Directors, nominees for Director and executive officers of the Company
as a group, as of February 1, 2000.
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PERCENTAGE OF
SHARES OF COMMON COMMON STOCK
STOCK BENEFICIALLY BENEFICIALLY
NAME AND ADDRESS OWNED AS OF OWNED AS OF
OF BENEFICIAL OWNER FEBRUARY 1, 2000 FEBRUARY 1, 2000
- ------------------- ------------------ -----------------
Edward Bloomberg, Director.............................. 129,500(1) 8.26%
11 Turnagain Road
Kentfield, CA 94904
Michael J. Crew......................................... 101,650(2) 6.49%
Investment Advisor
681 Falmouth Rd., Box C-2
Mashpee, MA 02649
Steven DePerrior, Director.............................. 500 *
Burke Group
10 East Street
Honeoye Falls, NY 14472
David T. Griffith, Director............................. 51,432 3.28%
M. Griffith, Inc.
555 French Road
P.O. Box 895
New Hartford, NY 13413
Gregory Harden, Director................................ 2,000 *
Harden Furniture
Mill Pond Way
McConnellsville, NY 13401
Gary E. Pflugfelder, Director & Clerk................... 5,000(3) *
500 South Salina Street
Suite 320
Syracuse, NY 13202
James R. Riedman, Chairman & CEO........................ 561,855(4) 35.85%
Riedman Corporation
45 East Avenue
Rochester, NY 14064
Riedman Corporation..................................... 551,355(5) 35.18%
45 East Avenue
Rochester, NY 14604
Retirement Committee of the Daniel Green Company
Retirement Savings Partnership Plan................... 58,117 3.71%
One Main Street
Dolgeville, NY 13329
Greg A. Tunney, President............................... 53,540(6) 3.42%
Daniel Green Company
One Main Street
Dolgeville, NY 13329
8 Officers and Directors as a Group..................... 828,827(1)(3)(4) 52.89%
(5)(6)(7)
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* Less than 1%
(1) Includes 14,000 shares held by members of Mr. Bloomberg's family and 61,500
shares held by Mr. Bloomberg on behalf of clients in his capacity as an
investment advisor, as to which Mr. Bloomberg disclaims beneficial
ownership.
(2) Based solely upon information provided to the Company on a Schedule 13D
filed on August 10, 1998.
(3) Includes 500 shares owned by a family member, as to which Mr. Pflugfelder
disclaims beneficial ownership.
(4) Includes 551,355 shares beneficially owned by Riedman Corporation, of which
Mr. Riedman is president and a director, as to which Mr. Riedman disclaims
beneficial ownership.
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(5) Includes 25,000 shares that Riedman Corporation may purchase through
exercise of a stock option granted to it on July 29, 1997 in connection with
a bridge loan to the Company and 50,000 shares that Riedman Corporation may
purchase through exercise of a stock option granted to it on September 1,
1999 in connection with guaranties provided for certain bank financing for
the Company.
(6) Includes 50,000 shares of the Company's stock that Mr. Tunney may purchase
through the exercise of a stock option granted to him under the Company's
Stock Incentive Plan.
(7) Includes 25,000 shares that John E. Brigham, Chief Financial Officer of the
Company, may purchase through exercise of a stock option granted to him
under the Company's Stock Incentive Plan.
EXECUTIVE OFFICERS OF THE COMPANY
In addition to Mr. Riedman, the following persons served as executive
officers of the Company during 1999. The position with the Company and the
principal employment of each such person for the five years prior to December
31, 1998, were as follows:
Mr. Tunney became President of the Company on April 1, 1998. Prior to his
appointment as President of the Company, Mr. Tunney had served as a Vice
President of Brown Shoe Company in Saint Louis, Missouri since 1992.
Mr. W. Lee Bynon, age 56, was Executive Vice President of Sales and
Marketing of the Company until February 26, 1999 and, prior to 1998, had served
as the Vice President, Sales for the Company since 1991.
Mr. John E. Brigham, age 46, is Treasurer and Chief Financial Officer of
the Company. He has served in that capacity since October, 1998. Prior to
joining the Company, Mr. Brigham was a Business Development Executive for
Charterhouse Group International, Inc. from April, 1998 through October, 1998
and prior to that, Mr. Brigham worked for EMI Company where he held the
positions of President and Chief Operating Officer from 1996 through 1998 and
Senior Vice President and Chief Financial Officer from 1994 through 1996.
COMPENSATION OF EXECUTIVE OFFICERS DURING 1998
The following information concerning annual and long-term compensation is
furnished for the years 1997, 1998 and 1999 with respect to the Chief Executive
Officer of the Company and each executive officer of the Company who received
compensation for 1999 which exceeded $100,000.
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION ------------------
--------------------------- OTHER ANNUAL SECURITIES
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION UNDERLYING OPTIONS
- --------------------------- ---- -------- ------- ------------ ------------------
Greg A. Tunney............... 1999 $165,843 -0- $ 162(1) 0
(President since April,
1998) 1998 $119,400 -0- $ 149(1) 50,000 Shares(3)
James R. Riedman............. 1999 $ 25,000 $ 1,000 50,000 Shares(4)
(CEO since June, 1996) 1998 $ 25,000 -0- -0- -0-
1997 $ 25,000 -0- -0- 25,000 Shares(4)
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LONG-TERM
COMPENSATION
ANNUAL COMPENSATION ------------------
--------------------------- OTHER ANNUAL SECURITIES
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION UNDERLYING OPTIONS
- --------------------------- ---- -------- ------- ------------ ------------------
John E. Brigham.............. 1999 $154,492 -0- $ 270(1) 25,000 Shares(5)
(CFO since October, 1998)
Warren J. Reardon............ 1999 $17,000 -0- 0
(President until February,
1998) 1998 $ 17,000 $85,000 $21,054(1)(2) 2,000 Shares
1997 $101,500 -0- $23,794(1)(2)
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(1) Figure reflects amount of annual premiums for group life insurance paid by
the Company:
W. Reardon, 1997 -- $112, 1998 -- $136
G. Tunney, 1998 -- $149, 1999 -- $162
J. Brigham, 1999 -- $270
(2) Figure reflects cash surrender value of life insurance policy assigned by
the Company to Mr. Reardon (1997 -- $12,282; 1998 -- $9,518) and estimated
value of occupancy of house owned by the Company (1997 & 1998 -- $11,400).
The amounts included in the Bonus column were separation/consulting fee
payments.
(3) Right to exercise vests when average trading price of common stock reaches
certain milestones, as follows:
$5.50 share -- option effective as to 25,000 shares
$6.50 share -- option effective as to 12,500 shares
$7.50 share -- option effective as to 12,500 shares
In addition, 3,540 shares of Common Stock were transferred in 1999 to Mr.
Tunney's account under the Company's Retirement Savings Partnership Plan.
(4) Options granted to Riedman Corporation of which James R. Riedman is
President, in connection with a bridge loan and guaranties provided for
certain bank financing for the Company.
(5) Right to exercise vests when average trading price of common stock reaches
certain milestones, as follows:
$5.50 share -- option effective as to 12,500 shares
$6.50 share -- option effective as to 6.250 shares
$7.50 share -- option effective as to 6.250 shares
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Riedman Corporation, a commercial insurance agency of which James R.
Riedman is president, obtains property and casualty insurance for the Company.
During 1997, 1998 and 1999, the Company paid approximately $443,328, $272,102
and $234,700, respectively, for such insurance coverage. Riedman Corporation's
total fees in connection with these transactions were less than approximately
$30,000 for 1997, $26,000 for 1998 and $21,476 for 1999.
Riedman Corporation entered into a Stock Purchase Agreement with the
Company dated February 10, 2000. Because James R. Riedman is both President and
director of Riedman Corporation and Chairman and CEO of the Company, the Board
of Directors appointed a Special Committee of all directors other than Mr.
Riedman and Greg A. Tunney, President of the Company, to consider, negotiate and
vote upon the Stock Purchase Agreement on behalf of the Company. The Agreement
provides for the sale by Riedman Corporation to the Company of all of the
outstanding stock of Penobscot Shoe Company ("Penobscot") for approximately
$17.8 million. Penobscot is a Maine corporation engaged in the design, importing
and sale of branded footwear to retailers.
Riedman Corporation acquired the Penobscot stock in a cash tender offer
(commenced October 12, 1999) and cash out merger (concluded January 18, 2000).
Prior to the Riedman Corporation tender offer, the Company had negotiated
directly with Penobscot to conduct its own cash tender offer at $11.75 per
share. However, the Company was unable to secure necessary financing without the
guaranties of Riedman
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Corporation which determined that the terms were unacceptable. Accordingly, with
the approval of the Company's Board of Directors, Riedman Corporation proceeded
to make the acquisition at the same price per share.
The Special Committee of the Company's Board of Directors retained
independent legal counsel and an appraiser to advise it with respect to its
fiduciary obligations and the terms of the Stock Purchase Agreement with Riedman
Corporation, which after negotiation was unanimously approved by the Special
Committee. The Purchase Price reflects the sum of (a) $11.75 per share times the
number of shares of Penobscot acquired by Riedman Corporation in the tender
offer, (b) interest on the funds Riedman Corporation borrowed (the "Acquisition
Loan") to fund the escrow agreement for all the Penobscot shares' cash price and
(c) an agreed amount for the net earnings of Penobscot between the commencement
of the tender offer and the closing of the Stock Purchase Agreement. The balance
of the Acquisition Loan escrow funds, after payment of the tendered Penobscot
shares, was paid over to Penobscot together with interest earned while in
escrow. Riedman Corporation then borrowed $3 million from Penobscot to reduce
the Acquisition Loan. This amount and interest thereon will be offset against
the Purchase Price at closing.
The Company has agreed to pay all Penobscot stockholders who dissented and
exercised appraisal rights the "fair value" of their shares under Maine law. It
has also agreed to pay all remaining stockholders (those who neither tendered
nor dissented) $11.75 per share. In furtherance of these agreements, the Company
has agreed to defend and indemnify Riedman Corporation, its officers, directors
and agents, from liability to Penobscot stockholders for claims arising after
closing the Stock Purchase Agreement which relate to acts or omissions of the
Company. Riedman Corporation has made various customary representations and
warranties to the Company concerning both Penobscot and the conduct of the
tender offer and merger by Riedman Corporation.
The Stock Purchase Agreement is subject to regulatory approvals, financing
and certain other matters. The regulatory approval is required by the
Hart-Scott-Rodino Antitrust Improvements Act. The financing is dependent upon
continuation of a $1 million Riedman Corporation guaranty of a Company
refinancing concluded in August, 1999. In connection with that refinancing the
Board of Directors, James R. Riedman abstaining, approved the grant to Riedman
Corporation of an option to purchase 50,000 shares of the Company's common stock
at $4.75 per share for 10 years. At the time the Company's common stock was
trading at $3 7/16 high and $3 1/8 low.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers and persons who hold more than 10% of its
Common Stock to file with the Securities and Exchange Commission (the "SEC")
reports of ownership and changes in ownership of Common Stock. Officers,
directors and greater-than-10% shareholders are required by SEC regulation to
furnish the Company with copies of all Section 16(a) forms they file.
Based solely on review of the copies of such reports furnished to the
Company or written representations that no other reports were required, the
Company believes that, with respect to its 1999 fiscal year, all filing
requirements applicable to the Company's officers, directors and
greater-than-10% shareholders were complied with, except that reports of the
following were not timely filed:
(a) 3,540 shares of Common Stock were allocated on July 1, 1999 to the
account of Greg Tunney under the Company's Retirement Savings Partnership
Plan, and
(b) an option to purchase 50,000 shares at $4.75 per share for 10
years was granted on September 1, 1999 to Riedman Corporation in connection
with its guarantee of certain bank financing for the Company.
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II. RATIFICATION OF THE SELECTION OF AUDITORS
The Company's financial statements for the year ended December 31, 1999
were examined by Deloitte & Touche LLP, independent certified public
accountants. Deloitte & Touche LLP (or a predecessor firm) has served as the
Company's independent auditors since 1973. The Board of Directors, on the
recommendation of the Audit Committee, has appointed Deloitte & Touche LLP as
the independent auditors of the Company for 2000, subject to ratification by the
stockholders.
A representative of Deloitte & Touche LLP will be present at the meeting to
answer questions and make a statement if he desires to do so.
The Board of Directors recommends a vote FOR the ratification of its
selection of Deloitte & Touche LLP as the Company's independent auditors. In the
event that stockholders do not ratify the appointment, the appointment will be
reconsidered by the Audit Committee and the Board of Directors.
III. REINCORPORATION OF THE COMPANY IN DELAWARE
GENERAL
The Board of Directors has approved and, for the reasons described below,
recommends that the Company's stockholders approve the reincorporation of the
Company in Delaware from Massachusetts, its present jurisdiction of
organization, by approving the proposed Agreement and Plan of Merger (the
"Merger Agreement"), a copy of which is attached hereto as Appendix A, and the
other related agreements and actions further described below.
Stockholders are urged to read carefully the following sections of this
Proxy Statement, including the related appendices, before voting on the
Reincorporation Proposal.
Under the Merger Agreement, the Company will be merged into a wholly owned
subsidiary, Daniel Green Company ("New Daniel Green"), incorporated in Delaware.
The Certificate of Merger provides that the name of the surviving corporation
will be Daniel Green Company. Upon completion of the merger, each outstanding
share of the Company's Common Stock, par value $2.50 per share, will
automatically be converted into one share of New Daniel Green Common Stock, par
value $.01 per share ("New Daniel Green Common Stock"). Each certificate
representing issued and outstanding shares of the Company's Common Stock (other
than shares of the Company's Common Stock in respect of which dissenters' rights
shall have been properly exercised), together with rights to purchase Common
Stock, will continue to represent the same number of shares of Common Stock and
rights to purchase Common Stock of New Daniel Green.
Upon the effectiveness of the merger, it will not be necessary for
stockholders of the Company to exchange their existing stock certificates for
stock certificates of New Daniel Green. Delivery of stock certificates issued by
the Company prior to the merger will constitute "good delivery" of shares in
transactions subsequent to the merger. When presently outstanding certificates
are presented for transfer after the merger, new certificates for stock of New
Daniel Green will be issued. New certificates will also be issued upon the
request of any stockholder, subject to normal requirements as to proper
endorsement, signature guarantee, if required, and payment of applicable taxes.
All obligations under all employee benefit plans of the Company will also
be assumed by New Daniel Green, including, without limitation, obligations under
the Company's (i) Retirement Savings Partnership Plan and (ii) 1995 Stock
Incentive Plan. Under Massachusetts law, the affirmative vote of two-thirds of
the outstanding shares of the Company's Common Stock is required for approval of
the Merger Agreement and the other terms of the Reincorporation Proposal. See
"Reincorporation of the Company in Delaware -- Vote Required for the
Reincorporation." No other approval is required for the Reincorporation
Proposal. If approved by the stockholders at the upcoming Annual Meeting, it is
anticipated that the Reincorporation Proposal will become effective at the
earliest practicable date (the "Effective Date"); however, pursuant to the
Merger Agreement, the merger may be delayed or abandoned or the Merger Agreement
may be amended prior to the Effective Date, if the Board of Directors deems it
inadvisable to proceed as contemplated herein, except that the principal terms
may not be amended without stockholder approval.
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This discussion is qualified in its entirety by reference to the Merger
Agreement, the Certificate of Incorporation of New Daniel Green (the
"Certificate of Incorporation") and the by-laws of New Daniel Green (the
"By-laws"), draft copies of which are attached hereto as Appendices A, B and C,
respectively. In the Certificate of Incorporation, New Daniel Green will have
4,000,000 shares of Common Stock, par value $.01 per share, and 1,000,000 shares
of Preferred Stock, par value $.01 per share, authorized. The Company currently
has 4,000,000 shares of Common Stock, par value $2.50 per share, and no shares
of Preferred Stock authorized.
Approval by stockholders of the Reincorporation Proposal will constitute
approval of the Merger Agreement, the Certificate of Incorporation and the
By-laws, draft copies of which are set forth as Appendices A, B and C,
respectively, to this Proxy Statement.
PRINCIPAL REASONS FOR THE REINCORPORATION
The reincorporation will allow the Company to take advantage of the highly
developed body of statutory and case law available in Delaware. By contrast, the
Massachusetts corporation laws are divided into several different chapters
adopted at different times with overlapping and sometimes confusing provisions.
While attempts have been and may in the future be made to reform these
provisions, there is no assurance that such laws will be successfully reformed.
For many years, Delaware has followed a policy of encouraging incorporation in
that state and, in furtherance of that policy, has long been a leader in
adopting, construing and implementing comprehensive, modern and flexible
corporate laws responsive to the legal and business needs of corporations
organized under its laws. Many major American corporations have initially chosen
Delaware for their state of incorporation or have subsequently reincorporated in
Delaware in a manner similar to that proposed. Both the legislature and courts
in Delaware have demonstrated an ability and a willingness to act quickly and
effectively to meet changing business needs. Its court system has been
responsive to requests for interpretation and clarification of corporate laws
and of issues involving the rights and obligations of directors, officers and
stockholders. Moreover, the Delaware courts have rendered a substantial number
of decisions interpreting and explaining Delaware law, thereby providing greater
predictability with respect to corporate legal affairs. While both Delaware and
Massachusetts corporations may include a provision in their charter documents
which reduces or limits the liability of directors in certain circumstances,
Delaware case law is more developed than Massachusetts case law on this issue
and therefore more useful in providing guidance in this regard. The Company
believes that these provisions should enable it to continue to attract and
retain qualified directors.
NO CHANGE OF NAME, BOARD MEMBERS, BUSINESS MANAGEMENT, LOCATION OF PRINCIPAL
OFFICES OR EMPLOYEE PLANS; CHANGE IN AUTHORIZED SHARES AND PAR VALUE
The Reincorporation Proposal will effect a change in the legal domicile of
the Company and other changes of a legal nature, the material aspects of which
are described in this Proxy Statement. The number of outstanding shares will
remain unchanged. Reincorporation will NOT result in any significant change in
the Company's name, business, management, fiscal year, location of principal
executive offices, telephone number, net worth, assets or liabilities. All
employee benefit plans of the Company will be continued by New Daniel Green, and
all shares of Common Stock outstanding and rights and options to purchase shares
of Common Stock will automatically be converted into, or become exercisable for
the same number of shares of, New Daniel Green Common Stock at the same exercise
prices per share and otherwise upon the same terms and subject to the same
conditions as in effect prior to the reincorporation. After completion of the
merger, New Daniel Green will have the same number of outstanding shares of
Common Stock as the Company currently has. The authorized shares shall be
changed from 4,000,000 shares of Common Stock, par value $2.50 per share to
4,000,000 shares of Common Stock, par value $.01 per share and an additional
1,000,000 shares of Preferred Stock, par value $.01 per share, the terms of
which shall be determined by the Board of Directors.
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POSSIBLE DISADVANTAGES
Despite the belief of the Board of Directors that the Reincorporation
Proposal is in the best interests of the Company and its stockholders, there are
certain differences in the substantive rights and protections afforded to
stockholders under Delaware and Massachusetts law. In addition, franchise taxes
in Delaware will be greater than in Massachusetts. For a comparison of
stockholders' rights and powers of management under Delaware and Massachusetts
law, see "-- Significant Differences Between Corporation Laws of Massachusetts
and Delaware" below.
SIGNIFICANT DIFFERENCES BETWEEN THE CORPORATION LAWS OF MASSACHUSETTS AND
DELAWARE
Pursuant to the Merger Agreement, upon consummation of the merger, the
Company will be governed by Delaware law and by the New Daniel Green Certificate
of Incorporation and By-laws. The corporation laws of Massachusetts and Delaware
differ in certain respects. The principal differences which could materially
affect the rights of stockholders are summarized below. The following discussion
summarizes the more important differences in the corporation laws of Delaware
and Massachusetts and does not purport to be an exhaustive discussion of all of
the differences. Such differences can only be determined in full by reference to
the Massachusetts General Laws and to the Delaware General Corporation Law and
to the case law interpreting these statutes. In addition, both Massachusetts and
Delaware law provide that many of the statutory provisions, as they affect
various rights of holders of shares, may be modified by provisions in the
charter or by-laws of the corporation (collectively, "constituent documents").
EXCULPATION OF DIRECTORS
Under Massachusetts law, a corporation's articles of organization may limit
the personal liability of its directors for breaches of their fiduciary duties.
This limitation is generally unavailable for acts or omission by a director that
(i) were in violation of such director's duty of loyalty, (ii) were in bad faith
or that involved intentional misconduct or a knowing violation of law or (iii)
involved a financial profit or other advantage to which the director was not
legally entitled. Massachusetts law also prohibits the elimination or limitation
of director liability for unauthorized loans to insiders or distributions that
occur when a corporation is, or that render a corporation, insolvent.
Delaware law permits a corporation to provide in its certificate of
incorporation that a director shall not be personally liable for monetary
damages stemming from breaches of fiduciary duties. Under Delaware law, a
charter provision limiting director liability cannot relieve a director of
personal liability for (i) any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) acts or omissions not in good faith or
that involve intentional misconduct or a knowing violation of law, (iii)
unlawful payment of dividends or unlawful repurchases or redemptions of stock or
(iv) any transactions from which the director derived an improper personal
benefit.
The Articles of Organization of the Company and the Certificate of
Incorporation of New Daniel Green provide for limitations on director's
liability as permitted by Massachusetts and Delaware law, respectively.
INDEMNIFICATION OF DIRECTORS, OFFICERS AND OTHERS
Delaware law generally permits indemnification of officers, directors,
employees and agents of a Delaware corporation against expenses (including
attorneys' fees) incurred in connection with a derivative action and against
expenses (including attorney's fees), judgments, fines and amounts paid in
settlements incurred in connection with a third party action, provided there is
a determination by a majority vote of disinterested directors or independent
legal counsel or the stockholders that the person seeking indemnification acted
in good faith and in a manner reasonably believed to be in, or not opposed to,
the best interests of the corporation (and, with respect to any third party
criminal action or proceeding, had no reasonable cause to believe his
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conduct was unlawful). However, when the individual being indemnified has
successfully defended the action on the merits or otherwise, Delaware law
requires indemnification. In addition, without court approval no indemnification
may be made in respect of any derivative action in which such person is adjudged
liable to the corporation. Finally, Delaware law, unlike Massachusetts law, does
not permit a corporation to indemnify persons against judgments in actions
brought by or in the right of the corporation (although it does permit
indemnification in such situations if approved by the Delaware Court of Chancery
and for expenses of such actions).
Massachusetts law similarly permits indemnification of expenses in a
derivative or third party action, except that no indemnification shall be
provided for any person with respect to any matter as to which he shall have
been adjudicated not to have acted in good faith in the reasonable belief that
his action was in the best interests of the corporation or, to the extent that
such matter relates to service with respect to any employee benefit plan, in the
best interests of the participants or beneficiaries of such benefit plan. Such
indemnification is permitted to the extent authorized in the corporation's
constituent documents or as set forth in a stockholders' vote.
Expenses incurred by an officer or director in defending an action may be
paid in advance under Delaware and Massachusetts law if such director or officer
undertakes to repay such amounts should it be determined ultimately that he is
not entitled to indemnification. Delaware law also permits the advancement of
expenses to employees and agents of the corporation without such an undertaking
to repay such amounts. In addition, both Delaware and Massachusetts law permit a
corporation to purchase indemnity insurance for the benefit of its officers,
directors, employees and agents whether or not the corporation would have the
power to indemnify against the liability covered by the policy.
The SEC has expressed its position that the indemnification of directors,
officers and controlling persons against liabilities arising under the
Securities Act, is against public policy as expressed in the Securities Act and
is, therefore, unenforceable.
The indemnification and limitation of liability provisions of Massachusetts
law, and not Delaware law, will apply to actions of the Company's directors,
officers, employees and agents taken prior to its merger into New Daniel Green.
APPROVAL OF BUSINESS COMBINATIONS AND ASSET SALES: STATE LAW
Massachusetts law generally requires approval of mergers and consolidations
and sales, mortgages, leases or exchanges of all or substantially all of a
corporation's property by a vote of two-thirds of the shares of each class of
stock outstanding and entitled to vote thereon, except that (i) the articles of
organization may provide for a vote of a lesser proportion but not less than a
majority of each such class and (ii) unless required by the corporation's
articles of organization, an agreement providing for a merger need not be
submitted to the stockholders of a corporation surviving a merger but may be
approved by vote of its directors if (a) the agreement of merger does not change
the name, the amount of shares authorized of any class of stock or other
provisions of the articles of organization of such corporation, (b) the
authorized unissued shares or shares held in the treasury of such corporation of
any class of stock of such corporation to be issued or delivered pursuant to the
agreement of merger do not exceed 15% of the shares of such corporation of the
same class outstanding immediately prior to the effective date of the merger,
and (c) the issue by vote of the directors of any unissued stock to be issued
pursuant to the agreement of merger has been authorized in accordance with the
provision of Massachusetts law governing the issue of authorized but unissued
capital stock. The Articles of Organization of the Company provide that in any
merger or consolidation the approval of two-thirds of the shares of each class
of stock outstanding and entitled to vote is required.
Delaware law generally requires that mergers and consolidations, and sales,
leases or exchanges of all or substantially all of a corporation's property and
assets, be approved both by the directors and by a vote of the holders of a
majority of the outstanding stock entitled to vote, though a corporation's
certificate of incorporation may require a greater-than-majority vote. The
Certificate of Incorporation of New Daniel Green will not so provide. Under
Delaware law, a corporation that is the surviving corporation in a merger need
not have stockholder approval for the merger if (i) each share of the surviving
corporation's stock outstanding
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prior to the merger remains outstanding in identical form after the merger, (ii)
there is no amendment to its certificate of incorporation and (iii) the
consideration going to stockholders of the non-surviving corporation is not
common stock (or securities convertible into common stock) of the surviving
corporation or, if it is such stock or securities convertible into such stock,
the aggregate number of shares of common stock actually issued or delivered, or
initially issuable upon conversion, does not exceed 20% of the shares of the
surviving corporation's common stock outstanding immediately prior to the
effective date of the merger.
ACTION BY CONSENT OF STOCKHOLDERS
Under Massachusetts law, any action to be taken by stockholders may be
taken without a meeting only if all stockholders entitled to vote on the matter
consent to the action in writing, and a corporation may not provide otherwise in
its charter documents or by-laws.
Under Delaware law, unless otherwise provided in the certificate of
incorporation, any action to be taken by the stockholders may be taken without a
meeting, without prior notice and without a vote, if the stockholders having the
number of votes that would be necessary to take such action at a meeting at
which all of the stockholders were present and voted consent to the action in
writing. The New Daniel Green Certificate of Incorporation provides that
stockholder action by written consent is not allowed.
DISSENTERS' RIGHTS
Under Massachusetts law, unless a vote of the stockholders was not required
to approve the action, dissenting stockholders who follow prescribed statutory
procedures are entitled to receive the appraised value of their shares in
connection with any merger or sale of substantially all the assets of a
corporation and in connection with certain mergers, reclassifications and other
transactions which may adversely affect the rights or preferences of
stockholders. There will be such dissenters' rights for the merger being voted
on in connection with the Reincorporation Proposal. See "Rights of Appraisal"
below.
Delaware law provides similar rights in the case of a merger or
consolidation of a corporation except that such rights are not provided when a
corporation will survive the merger or consolidation and no vote of its
stockholders is required to approve the merger. Also, such rights are not
provided as to shares of a corporation listed on a national securities exchange,
designated as a national market system security on an inter-dealer quotation
system by the National Association of Securities Dealers, Inc. or held of record
by more than 2,000 stockholders where such stockholders are required to accept
in such a merger only (i) shares of the surviving or resulting corporation, (ii)
shares of a corporation listed on a national securities exchange or held of
record by more than 2,000 holders, (iii) cash in lieu of fractional shares, or
(iv) any combination thereof. Delaware law does not provide dissenters' rights
in connection with sales of substantially all of the assets of a corporation,
reclassifications of stock or other amendments to the certificate of
incorporation which adversely affect a class of stock; provided, however, that a
corporation may provide in its certificate of incorporation that appraisal
rights shall be available as a result of an amendment to its certificate of
incorporation, a merger or a sale of all or substantially all of its assets. New
Daniel Green's Certificate of Incorporation, however, does not provide for the
appraisal rights described in the preceding sentence.
INTERESTED DIRECTOR TRANSACTIONS
Delaware law provides that no transaction between a corporation and a
director or officer or any entity in which any of them have an interest, is void
or voidable solely for that reason, solely because the director or officer is
present at or participates in the meeting of the board or committee which
authorizes the contract or transaction, or solely because his or their votes are
counted for such purpose if (i) after full disclosure of the material facts as
to the interested director's or officer's relationship or interest and as to the
transaction, the transaction is approved by the disinterested directors, which
may be less than a quorum, or the stockholders or (ii) the transaction is fair
to the corporation at the time it is approved. Delaware law also permits
interested directors to be counted in determining the presence of a quorum at a
meeting of the board or of a committee that authorizes an interested director or
officer transaction.
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Massachusetts law contains no provision comparable to that of Delaware,
expressly providing only that directors who vote for and officers who knowingly
participate in loans to officers or directors are jointly and severally liable
to the corporation for any part of the loan which is not repaid, unless (i) a
majority of the directors who are not direct or indirect recipients of such
loans or (ii) the holders of a majority of the shares entitled to vote for such
directors, have approved or ratified the loan as one which in the judgment of
such directors or stockholders, as the case may be, may reasonably be expected
to benefit the corporation.
ANTI-TAKEOVER STATUTES
Business Combination Statutes. Delaware's "business combination" statute is
substantially similar to its Massachusetts counterpart. However, whereas
Delaware law provides that, if a person acquires 15% or more of the stock of a
Delaware corporation without the approval of the board of directors of that
corporation, such person may not engage in certain transactions with the
corporation for a period of three years, in Massachusetts, the threshold is only
5%, with certain persons being excluded. Both the Delaware and Massachusetts
statutes include certain exceptions to this prohibition. If, for example, the
board of directors approves the stock acquisition or the transaction prior to
the time that the person becomes an interested stockholder, or if the interested
stockholder acquires 85% (under the Delaware statute) or 90% (under the
Massachusetts statute) of the voting stock of the corporation (excluding voting
stock owned by directors who are also officers and by certain employee stock
plans) in one transaction, or if the transaction is approved by the board of
directors and by the affirmative vote of two- thirds of the outstanding voting
stock that is not owned by the interested stockholder, then the prohibition on
business combinations is not applicable.
Massachusetts Control Share Acquisition Statute. Under the Massachusetts
Control Share Acquisition statute for Massachusetts corporations, a person who
acquires beneficial ownership of shares of stock of a corporation in a threshold
amount equal to or greater than one-fifth, one-third, or a majority of the
voting stock of the corporation (a "control share acquisition") must obtain the
approval of a majority of shares entitled to vote generally in the election of
directors (excluding (i) any shares owned by such person acquiring or proposing
to acquire beneficial ownership of shares in a control share acquisition, (ii)
any shares owned by any officer of the corporation and (iii) any shares owned by
any employee of the corporation who is also a director of the corporation) in
order to vote the shares that such person acquires in crossing the foregoing
thresholds. The statute does not require that such person consummate the
purchase before the stockholder vote is taken. Certain transactions are excluded
from the definition of "control share acquisition," including shares acquired
pursuant to a tender offer, merger or consolidation if the transaction is
pursuant to an agreement of merger or consolidation to which the corporation
issuing the shares is a party.
The Massachusetts Control Share Acquisition statute permits, to the extent
authorized by a corporation's constituent documents, redemption of all shares
acquired by an acquiring person in a control share acquisition for fair value
(which is to be determined in accordance with procedures adopted by the
corporation) if (i) no control acquisition statement is delivered by the
acquiring person or (ii) a control share acquisition statement has been
delivered and voting rights were not authorized for such shares by the
stockholders in accordance with applicable law.
The Massachusetts Control Share Acquisition statute permits a Massachusetts
corporation to elect not to be governed by the statute's provisions, by
including a provision in the corporation's articles of organization or by-laws
pursuant to which the corporation opts out of the statute. The Company did not
opt out of this statute.
Delaware does not have a similar statute.
DIVIDENDS AND STOCK REPURCHASES
Under Massachusetts law, the directors of a corporation will be jointly and
severally liable if a payment of dividends or a repurchase of a corporation's
stock is (i) made when the corporation is insolvent, (ii) renders the
corporation insolvent or (iii) violates the corporation's articles of
organization. Stockholders to whom a corporation makes any distribution (except
a distribution of stock of the corporation) if the corporation is, or is thereby
rendered, insolvent, are liable to the corporation for the amount of such
distribution made, or for the amount of such distribution which exceeds the
amount which could have been made without rendering the
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corporation insolvent, but in either event only to the extent of the amount paid
or distributed to them, respectively. In such event, a stockholder who pays more
than such holder's proportionate share of such distribution or excess shall have
a claim for contribution against the other stockholders.
Under Delaware law, the directors of a corporation are jointly and
severally liable for negligently or willfully making improper dividend payments,
stock repurchases or redemptions. Directors held to be liable pursuant to this
provision of Delaware law are entitled to be subrogated to the rights of the
corporation against stockholders receiving dividends on, or assets for the sale
or redemption of, their stock with knowledge that such dividend, repurchase or
redemption was unlawful. Under Delaware law, a corporation generally is
permitted to declare and pay dividends out of surplus or out of net profits for
the current and/or preceding fiscal year, provided that the capital of the
corporation is not less than the aggregate amount of capital represented by the
issued and outstanding stock of all classes having a preference upon the
distribution of assets. For purposes of declaring and paying dividends, the
board of directors of a Delaware corporation may increase the corporation's
surplus pursuant to a revaluation thereto in accordance with Delaware law. In
addition, a corporation may generally redeem or repurchase shares of its stock
if the capital of the corporation is not impaired and if such redemption or
repurchase will not impair the capital of the corporation.
INSPECTION RIGHTS
Inspection rights under Delaware law are more extensive than under
Massachusetts law. Under Massachusetts law, a corporation's stockholders have a
right to inspect only the corporation's charter, by-laws, records of all
meetings of incorporators and stockholders and transfer records. Under Delaware
law, stockholders, upon the demonstration of a proper purpose, have the right to
inspect a corporation's stock ledger, stockholder lists and other books and
records.
ANNUAL MEETING OF STOCKHOLDERS
Under Massachusetts law, the notice of the annual meeting must contain the
purpose of the meeting, while the purpose of the annual meeting need not be
included in the notice of the annual meeting under Delaware law. The by-laws of
the Company require that the notice of the annual meeting be given at least
seven days before the meeting, while New Daniel Green's By-laws require that
such notice be given at least ten days before the annual meeting.
SPECIAL MEETINGS OF STOCKHOLDERS
A special meeting of stockholders of a Massachusetts corporation with a
class of voting stock registered under the Securities Exchange Act of 1934, as
amended, may be called by the holders of shares entitled to cast not less than
40% of the votes at the meeting. Stockholders of a Delaware corporation do not
have a right to call special meetings unless it is conferred in the
corporation's certificate of incorporation or by-laws. New Daniel Green's
By-laws do not permit stockholders to call a special meeting.
PROXIES
Massachusetts law permits the authorization by a stockholder to vote by
proxy to be valid for no more than six months. Delaware law permits a proxy to
be valid for up to three years unless the proxy provides for a longer period.
CLASSIFIED BOARD
Massachusetts law requires, unless a corporation chooses otherwise, and
Delaware law permits, but does not require, a board of directors to be divided
into classes with each class having a term of office no longer than one year.
Massachusetts law limits the term of directors on a classified board to five (5)
years. Previously the Company's Board of Directors voted to opt out of the
Massachusetts staggered board statute. The New Daniel Green will not have a
classified Board of Directors.
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REMOVAL OF DIRECTORS
Under Massachusetts law, any director or the entire board of directors may
be removed, except as otherwise provided in the constituent documents, with or
without cause, by the holders of a majority of the shares entitled to vote at an
election of directors, except that directors of a class elected by a particular
class of stockholders may be removed only by the vote of a majority of the
shares of the particular class of stockholders entitled to vote for the election
of such directors. In addition, a director may be removed for cause by a vote of
the majority of the directors then in office.
Under Delaware law, a director serving on a board which is not classified
may be removed with or without cause by a majority of the outstanding shares
entitled to vote at an election of directors. In the case of a Delaware
corporation whose board is classified, holders of a majority of the outstanding
shares entitled to vote at an election of directors may effect such removal only
for cause unless the certificate of incorporation otherwise provides. New Daniel
Green will not have a classified Board of Directors, and its Certificate of
Incorporation will provide for the removal of directors with or without cause,
only by vote of a majority of the shares of stock outstanding and entitled to
vote.
CHANGE IN NUMBER OF DIRECTORS
Under Massachusetts law, the number of directors is determined in the
manner provided in the corporation's by-laws. The board of directors may be
enlarged by the stockholders or, if authorized by the by-laws, by vote of a
majority of directors. The Company's by-laws fix the number of directors at not
less than five nor more than eleven, the exact number within said limits to be
fixed from time to time by the stockholders. The number of Directors of the
Company is being fixed at six at the Annual Meeting of Stockholders pursuant to
this Proxy Statement.
Under Delaware law, the number of directors shall be fixed by or in the
manner provided in the by-laws unless the number of directors is fixed in the
corporation's certificate of incorporation. The By-laws of New Daniel Green
require that it have three or more directors, the number of which shall be
determined from time to time by the directors. Upon the consummation of its
merger with the Company, New Daniel Green will have six directors.
FILLING VACANCIES ON THE BOARD OF DIRECTORS
Under Massachusetts law and the articles of organization, any vacancy in
the board of directors, however occurring, including a vacancy resulting from
enlargement of the board and any vacancy in any other office, may be filled in
the manner prescribed in the by-laws, or, in the absence of any such provision
in the by-laws, by the directors. The Company's by-laws allow the Board of
Directors to fill vacancies on the Board.
Under Delaware law, vacancies and newly created directorships may be filled
by a majority of directors then in office, unless otherwise provided in the
corporation's certificate of incorporation or by-laws, provided that if, at the
time of filling any vacancy or newly created directorship, the directors then in
office constitute less than a majority of the entire board as constituted
immediately prior to any increase, the Delaware Court of Chancery may, upon
application of any stockholder or stockholders holding at least 10% of the total
number of shares at the time outstanding having the right to vote for such
directors, summarily order an election to be held to fill any such vacancies or
newly created directorships or to replace the directors chosen by the directors
then in office.
CHARTER AMENDMENTS
Under Massachusetts law, a majority vote of each class of stock outstanding
and entitled to vote thereon is required to authorize an amendment of the
articles of organization effecting one or more of the following: (i) an increase
or reduction of the capital stock of any authorized class; (ii) a change in the
par value of authorized shares with par value, or any class thereof; (iii) a
change of authorized shares (or any class thereof) from shares with par value to
shares without par value, or from shares without par value to shares with par
value; (iv) certain changes in the number of authorized shares (or any class
thereof); or (v) a
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corporate name change. Subject to certain conditions, a two-thirds vote of each
class of stock outstanding and entitled to vote thereon is required to authorize
any other amendment of the articles of organization, or, if the articles of
organization so provide for a vote of a lesser proportion but not less than a
majority of each class of stock outstanding and entitled to vote thereon. If any
amendment requiring a two-thirds vote would adversely affect the rights of any
class or series of stock, a two-thirds vote of such class voting separately, or
a two- thirds vote of such series, voting together with any other series of the
same class adversely affected in the same manner, is also necessary to authorize
such amendment.
Under Delaware law, charter amendments require the approval of the board of
directors and both a general vote of a majority of all outstanding shares
entitled to vote thereon, and a class vote of a majority of outstanding shares
of each class entitled to vote as a class. In addition, Delaware law requires a
class vote when, among other things, an amendment will adversely affect the
powers, preferences or special rights of a particular class of stock. Under
Delaware law, a provision in a corporation's certificate of incorporation
requiring a supermajority vote of the Board of Directors or stockholders may be
amended only by such supermajority vote.
Both Delaware and Massachusetts law provide that the certificate of
incorporation and articles of organization, respectively, may authorize one or
more classes of stock and authorize the board of directors to fix the
designations, preferences and relative participating, optional or other special
rights, and qualifications, limitations or restrictions thereof as stated in a
resolution of the board providing for the issue of such stock. The Company's
Articles or Organization contain no such provision. The Certificate of
Incorporation of New Daniel Green does, with respect to preferred stock.
AMENDMENTS TO BY-LAWS
Both Delaware and Massachusetts law provide that stockholders may amend a
corporation's by-laws and, if so provided in its charter, the board of directors
may also have this power. Under Delaware law, the power to adopt, amend or
repeal by-laws lies in the stockholders entitled to vote; provided, however,
that any corporation may, in its certificate of incorporation, confer the power
to adopt, amend or repeal by-laws upon the directors. Under Massachusetts law,
the power to make, amend or repeal by-laws also lies in the stockholders
entitled to vote; provided, that the directors may also make, amend or repeal
the by-laws, except with respect to any provision which by law, the articles of
organization or the by-laws requires action by the stockholders. Under both the
Articles of Organization of the Company and the Certificate of Incorporation of
New Daniel Green, the directors are granted the power to amend their respective
by-laws, subject to the qualifications described above. The By-laws of New
Daniel Green further prohibit the Board of Directors from amending the By-laws
which have been amended by the stockholders. Certain By-laws of New Daniel Green
require a vote of two-thirds of the shares outstanding and entitled to vote to
be amended. They include By-laws defining a quorum for stockholder meetings and
approval of actions, fixing the minimum and maximum number of directors,
specifying the vote required for election of directors and determining those
persons who have the right to call special meetings of the Board of Directors.
VOTING REQUIREMENTS AND QUORUMS FOR STOCKHOLDER MEETINGS
Under Massachusetts law and the Company's by-laws, a majority of the issued
and outstanding stock entitled to vote at any meeting constitutes a quorum.
Except for the election of directors and other fundamental matters such as
mergers, consolidations and sale of substantially all the Company's assets,
Massachusetts law does not prescribe the percentage vote required for
stockholder action.
Under the by-laws of the Company, a majority of the shares entitled to vote
constitutes a quorum for the transaction of business. The Company's by-laws
provide that (except where a larger vote is required by law, the Articles of
Organization of the Company or the by-laws of the Company) action of the
stockholders on any matter properly brought before a meeting requires, and may
be effected by, the affirmative vote of the holders of a majority of the shares
of stock present or represented and entitled to vote and voting on such matter.
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Under Delaware law, a majority of the issued and outstanding stock entitled
to vote at any meeting of stockholders shall constitute a quorum for the
transaction of business at such meeting, unless the certificate of incorporation
or by-laws specify a different percentage, but in no event may a quorum consist
of less than one-third of the shares entitled to vote at the meeting. Under
Delaware law, the affirmative vote of the majority of shares present in person
or represented by proxy at a duly held meeting at which a quorum is present and
entitled to vote on the subject matter is deemed to be the act of the
stockholders, unless Delaware law, the certificate of incorporation or the
by-laws specify a different voting requirement.
The New Daniel Green By-laws provide that, except as otherwise provided by
law or in the Certificate of Incorporation of New Daniel Green or the New Daniel
Green By- laws, the holders of a majority of the shares entitled to vote at a
meeting of the stockholders shall constitute a quorum for the transaction of
business. The New Daniel Green By-laws provide that when a quorum is present,
action on a matter is approved by the affirmative vote of a majority of the
total vote cast, unless the Certificate of Incorporation of New Daniel Green or
Delaware law requires a higher percentage of affirmative votes. The New Daniel
Green Certificate of Incorporation does not alter the statutory voting
requirement for stockholder approval.
BUSINESS CONDUCTED AT STOCKHOLDER MEETINGS
Neither the Articles of Organization nor the By-laws of the Company require
a stockholder to give prior notice of business which he proposes to bring before
an annual meeting of stockholders.
The By-laws of New Daniel Green provide that at an annual meeting, subject
to any other applicable requirements, a stockholder may properly bring a
proposal before such Annual Meeting by giving timely prior written notice to the
Secretary of New Daniel Green of such stockholder's intention to bring such
proposal before the meeting. To be timely, notice must be received by New Daniel
Green not less than 90 days nor more than 120 days prior to the anniversary date
of the preceding year's annual meeting, subject to certain exceptions. The
notice must contain certain information about such business and the stockholder
who proposes to bring the business before the meeting, including a brief
description of the business the stockholder proposes to bring before the
meeting, the name and address of the stockholder proposing such business, the
reasons for conducting the business at the meeting, the class and number of
shares of stock of the Company beneficially owned by such stockholder, and any
material interest of such stockholder in the business so proposed. If the
Chairman of the Board of Directors determines that business was not properly
brought before the meeting in accordance with the foregoing procedures, such
business will not be conducted at the meeting. Under the New Daniel Green
By-laws, the Chairman has the right to establish the rules for conduct of
stockholder meetings.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE REINCORPORATION
The following is a discussion of certain federal income tax consequences to
holders of the Company's Common Stock which will be converted to New Daniel
Green Common Stock as a result of the merger. The discussion does not address
all of the tax consequences that may be relevant to particular stockholders in
light of their own circumstances or to taxpayers subject to special treatment
under the federal income tax laws (for example, insurance companies, financial
institutions, broker-dealers, tax-exempt organizations, foreign entities and
individuals who are not citizens or residents of the United States or who
acquired their shares in compensatory transactions), and does not address any
aspects of state, local or foreign law. In addition, the following discussion
does not address the tax consequences of transactions prior to or after the
merger (whether or not effected in connection with the merger.)
The following discussion is based on the provisions of the Internal Revenue
Code of 1986, as amended, the Treasury Regulations thereunder, and
administrative rulings and judicial decisions in effect as of the date hereof.
Subsequent legislative, administrative or judicial changes or interpretations
could affect the accuracy of the statements or conclusions set forth herein. Any
such change could apply retroactively. Each stockholder is urged to consult his
or her own tax advisor as to the federal, state, local and foreign tax
consequences of the merger.
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Neither the Company nor New Daniel Green requested a ruling from the IRS
with respect to the federal income tax consequences of the merger, nor obtained
an opinion of counsel. The Company's management believes, nevertheless, that
subject to the limitations, qualifications and exceptions herein, for federal
income tax purposes:
(1) No gain or loss will be recognized by the stockholders upon the
conversion of the Company's Common Stock into New Daniel Green Common Stock
in the merger.
(2) The aggregate tax basis of the shares of New Daniel Green Common
Stock held by each stockholder in the merger will equal the aggregate basis
of the shares of the Company's Common Stock surrendered therefor.
(3) The holding period of the New Daniel Green Common Stock held by
each stockholder in the merger will include the period during which the
stockholder held the shares of the Company's Common Stock surrendered
therefor, provided that such Company Common Stock was held by such
stockholder as a capital asset at the time of the merger.
(4) Neither the Company nor New Daniel Green will recognize gain or
loss upon the merger.
DISSENTERS' RIGHTS OF APPRAISAL
Under Massachusetts law, stockholders of Massachusetts corporations have
the right to dissent from corporate reorganizations, including a merger, and
receive cash equal to the appraised value of their shares. See "Rights of
Appraisal" for a more detailed description of those rights.
VOTE REQUIRED FOR THE REINCORPORATION PROPOSAL
Approval of the Reincorporation Proposal, which includes approval of the
Merger Agreement, the Certificate of Incorporation and the By-laws, will require
the affirmative vote of two-thirds of the outstanding shares of the Company's
Common Stock entitled to vote.
The Board of Directors considers the reincorporation to be advisable and in
the best interests of the stockholders and recommends that you vote FOR approval
of the Reincorporation Proposal.
RIGHTS OF APPRAISAL
The following summary of the rights of dissenting stockholders is qualified
in its entirety by reference to the provisions of Sections 86 through 98,
inclusive, of Chapter 156B of the General Laws of Massachusetts, a copy of which
is attached hereto as Appendix D.
Any stockholder (i) who files with the Company before the taking of the
vote on the approval of the Reincorporation Proposal written objection to the
proposed action stating that such stockholder intends to demand payment for such
stockholder's shares if the action is taken, and (ii) whose shares are not voted
in favor of such action, has or may have the right to demand in writing from New
Daniel Green within 20 days after the date of mailing to such stockholder of
notice in writing that the corporate action has become effective, payment for
his shares and an appraisal of the value thereof. New Daniel Green and any such
stockholder shall in such case have the rights and duties and shall follow the
procedure set forth in Sections 88 to 98, inclusive, of Chapter 156B of the
General Laws of Massachusetts.
A stockholder intending to exercise his dissenter's right to receive
payment for such stockholder's shares must file with the Company written
objection to the Reincorporation Proposal before the taking of the vote by the
stockholders on such Proposal and must not vote in favor of the Reincorporation
Proposal at the Annual Meeting. A stockholder's failure to vote against the
Reincorporation Proposal will not constitute a waiver of such stockholder's
appraisal rights with respect to the Reincorporation Proposal, provided that
such stockholder does not vote in favor of the Reincorporation Proposal; and
provided, further, that a vote against the Reincorporation Proposal without the
filing of a written objection with the Company as described above
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will not be deemed to satisfy notice requirements under Massachusetts law with
respect to appraisal rights. The written objection must state that the
stockholder intends to demand payment for such stockholder's shares if the
Reincorporation Proposal is consummated. Within 10 days after the
reincorporation becomes effective, New Daniel Green will give written notice of
the effectiveness by registered or certified mail to each stockholder who filed
a written objection and who did not vote in favor of the Reincorporation
Proposal. Within 20 days after the mailing of that notice, any stockholder to
whom New Daniel Green was required to give that notice may make written demand
for payment for such stockholder's shares from New Daniel Green and New Daniel
Green will be required to pay to such stockholder the fair market value of such
stockholder's shares within 30 days after the expiration of the 20-day period.
If during the 30-day period New Daniel Green and the dissenting stockholder
do not agree as to the fair value of the shares, New Daniel Green or the
stockholder may, within four months after the end of the 30-day period, have the
fair value of stock of all dissenting stockholders determined by judicial
proceedings by filing a bill in equity in the Superior Court in New Castle
County, Massachusetts. For the purposes of the Superior Court's determination,
the value of the shares of the Company would be determined as of the date
preceding the date of the vote of the stockholders approving the Reincorporation
Proposal and would be exclusive of any element of value arising from the
expectation or accomplishment of the reincorporation. Upon making written demand
for payment, the dissenting stockholder will not thereafter be entitled to
notices of meetings of stockholders, to vote, or to dividends unless (i) no suit
is filed within four months to determine the value of the stock, (ii) any suit
is dismissed as to that stockholder, or (iii) the stockholder, with the written
approval of New Daniel Green, withdraws the objection in writing.
The enforcement by an objecting stockholder of his appraisal rights as set
forth in Sections 85 through 98, inclusive, of Chapter 156B of the Massachusetts
General Laws shall be an exclusive remedy except for the right of any such
objecting stockholder to bring or maintain an appropriate proceeding to obtain
relief on the ground that the merger will be or is illegal or fraudulent as to
such objecting stockholder.
The provisions of Sections 86 through 98 of Chapter 156B of the
Massachusetts General Laws are technical in nature and are complex. Any
stockholder desiring to exercise his appraisal rights should consult legal
counsel for assistance since the failure to comply strictly with the provisions
may nullify such appraisal rights.
Notwithstanding the foregoing, the Merger Agreement provides that, if the
Board of Directors deems it inadvisable to proceed as contemplated therein, the
merger may be delayed or abandoned or the Merger Agreement may be amended,
except that the principal terms may not be amended without stockholder approval.
IV. PROPOSALS FOR NEXT ANNUAL MEETING
A stockholder proposal submitted for inclusion in the proxy and proxy
statement relating to the next Annual Meeting of Stockholders of the Company
must be received by the Company no later than November 12, 2000.
STOCKHOLDERS OF RECORD AS OF THE CLOSE OF BUSINESS ON FEBRUARY 11, 2000 AND
BENEFICIAL OWNERS OF THE COMPANY'S COMMON STOCK ARE ENTITLED TO RECEIVE A COPY
WITHOUT CHARGE OF THE COMPANY'S 1999 ANNUAL REPORT TO THE SEC ON FORM 10-KSB.
STOCKHOLDERS WHO WISH TO RECEIVE A COPY OF THIS REPORT SHOULD WRITE TO: MR. JOHN
BRIGHAM, CHIEF FINANCIAL OFFICER, DANIEL GREEN COMPANY, ONE MAIN STREET,
DOLGEVILLE NEW YORK 13329.
GARY E. PFLUGFELDER, Clerk
March 1, 2000
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APPENDIX A
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER ("Merger Agreement"), dated as of February 17,
2000, by and between Daniel Green Company, a Massachusetts corporation (the
"Company"), and Daniel Green Company, a Delaware corporation ("New Daniel
Green").
WHEREAS, the Company is a corporation duly organized and existing under the
laws of the Commonwealth of Massachusetts;
WHEREAS, New Daniel Green is a corporation duly organized and existing
under the laws of the State of Delaware;
WHEREAS, the Company has authority to issue 4,000,000 shares of Common
Stock, par value $2.50 per share (the "Company's Common Stock"), of which
1,567,342 shares are issued and outstanding;
WHEREAS, prior to the Effective Date of the Merger (as such terms are
hereinafter defined), additional shares of the Company's Common Stock may be
issued upon the exercise of rights or options to purchase the Company's Common
Stock and pursuant to employee benefit plans of the Company;
WHEREAS, New Daniel Green has authority to issue 4,000,000 shares of Common
Stock, par value $.01 per share (the "Delaware Common Stock") and 1,000,000
shares of preferred stock par value $.01 per share, (the "Delaware Preferred
Stock");
WHEREAS, one hundred (100) shares of the Delaware Common Stock are issued
and outstanding, all of which are owned, beneficially and of record, by the
Company;
WHEREAS, the respective Board of Directors of the Company and New Daniel
Green have determined that, for the purpose of effecting the reincorporation of
the Company in the State of Delaware, it is advisable and in the best interest
of both corporations that the Company merge with and into New Daniel Green upon
the terms and conditions hereinafter provided and in accordance with the laws of
the State of Delaware and the Commonwealth of Massachusetts in a transaction
qualifying as a reorganization within the meaning of Section 368(a) of the
Internal Revenue Code of 1986, as amended (the "Code"); and
WHEREAS, the respective Board of Directors of the Company and New Daniel
Green have unanimously approved this Merger Agreement and directed that this
Merger Agreement be submitted to a vote of their respective stockholders for
approval.
NOW, THEREFORE, in consideration of the mutual agreements hereinafter set
forth, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and New Daniel Green
hereby agree as follows:
1. Merger. Subject to the terms and conditions of this Merger
Agreement, the Company shall be merged with and into New Daniel Green (the
"Merger") in accordance with Section 253 of the Delaware General
Corporation Law ("DGCL") and Section 79 of the Massachusetts Business
Corporation Law ("MBCL") such that New Daniel Green shall be the surviving
corporation (hereinafter referred to as the "Surviving Corporation"). The
Merger shall become effective upon the date (the "Effective Date") on which
a certified copy of this Merger Agreement or a Certificate of Merger,
executed and acknowledged on behalf of New Daniel Green and the Company, in
accordance with the requirements of the DGCL and the MBCL, has been filed
with the Delaware Secretary of State and the Massachusetts Secretary of
State.
2. Certificate of Incorporation. The Certificate of Incorporation of
New Daniel Green, as in effect on the Effective Date, shall be the
Certificate of Incorporation of the Surviving Corporation without change or
amendment, until thereafter amended in accordance with the provisions
thereof and applicable laws.
3. Directors, Officers and By-Laws. The directors of the Company
immediately prior to the Effective Date shall be the directors of the
Surviving Corporation, each to hold office in accordance with
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the Certificate of Incorporation and the By-Laws of the Surviving
Corporation. The officers of the Company immediately prior to the Effective
Date shall be the officers of the Surviving Corporation, each to hold
office in accordance with the Certificate of Incorporation and the By-Laws
of the Surviving Corporation, except that the person serving as Secretary
of New Daniel Green shall serve as Secretary of the Surviving Corporation
and the position of Clerk of the Company shall no longer exist and any
person serving in such position shall not continue as an officer of the
Surviving Corporation. The By-Laws of New Daniel Green, as in effect on the
Effective Date, shall be the By-Laws of the Surviving Corporation without
change or amendment until thereafter amended in accordance with the
provisions thereof and applicable laws.
4. Succession. From and after the Effective Date, the Surviving
Corporation shall succeed, insofar as permitted by law, to all of the
rights, assets, liabilities and obligations of the Company; and the title
to any real estate vested by deed or otherwise, in either of the Company
and/or the Surviving Corporation, shall not revert or be in any way
impaired by reason of the Merger, but all rights of creditors and all liens
on any property of either of said corporations shall be reserved
unimpaired, and all debts, liabilities and duties of said corporations
shall, as of the Effective Date, attach to the Surviving Corporation, and
may be enforced against the Surviving Corporation to the same extent as if
said debts, liabilities, and duties had been incurred or contracted by it,
and any claim existing or action or proceeding pending by or against any of
said corporations may be prosecuted as if the Merger had not taken place,
or the Surviving Corporation may be substituted in its place. The employees
and agents of the Company shall become the employees and agents of the
Surviving Corporation and continue to be entitled to the same rights and
benefits which they enjoyed as employees and agents of the Company.
5. Further Assurances. From time to time as and when requested by the
Surviving Corporation or by its successors and assigns, there shall be
executed and delivered on behalf of the Company and/or the Surviving
Corporation such deeds and other instruments, and there shall be taken or
caused to be taken by it such further and other action, as shall be
appropriate or necessary in order to vest, protect or confirm, of record or
otherwise, in the Surviving Corporation the title to and possession of all
property, interest, assets, right, privileges, immunities, powers,
franchises, and authority of the Company, and otherwise to carry out the
purposes of this Merger Agreement, and the officers and directors of the
Surviving Corporation are fully authorized, in the name and on behalf of
the Company, or otherwise, to take any and all such action and to execute
and deliver any and all such deeds and other instruments.
6. Conversion of Shares. Upon the Effective Date, each share of the
Company's Common Stock issued and outstanding or held in the treasury of
the Company immediately prior thereto (other than shares of the Company's
Common Stock in respect of which dissenters' rights shall properly have
been exercised in accordance with the MBCL) shall, by virtue of the Merger
and without any action on the part of any holder thereof, be changed and
converted into one fully paid and non assessable share of Delaware Common
Stock.
(a) Upon the Effective Date, the one hundred (100) shares of
Delaware Common Stock currently issued and outstanding in the name of
the Company shall be canceled and retired without any consideration
being issued or paid therefor and shall resume the status of authorized
and unissued shares of Delaware Common Stock, and no shares of Delaware
Common Stock or other securities of the Surviving Corporation shall be
issued in respect thereof.
(b) Upon the Effective Date each outstanding option to purchase
shares of the Company's Common Stock under the stock option plans of the
Company (an "Old Option") and outstanding immediately prior to the
Effective Date shall, by virtue of the Merger and without any action on
the part of the holder thereof, be converted into and become an option
(the "New Option") to purchase, upon the same terms and conditions, the
number of shares of Delaware Common Stock which is equal to the same
number of shares of Company's Common Stock which may be purchased under
such Old Option. The exercise price per share under each New Option
shall be equal to the exercise price per share immediately prior to the
Effective Date with respect to each Old Option. All of the Company's
stock option plans and stock options granted thereunder, outstanding
immediately prior
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to the Effective Date are automatically amended to permit plan
continuance and stock option continuance and conversion into those of
the Surviving Corporation following the Merger notwithstanding any
provisions heretofore contained in such plans or outstanding options
providing for termination in the event of a merger in which the Company
is not the surviving corporation.
(c) Upon the Effective Date, all other outstanding stock rights in
effect as of the Effective Date including, but not limited to, rights
under the Rights Agreement between the Company and The First National
Bank of Boston dated February 9, 1996, shall be assumed by, and continue
to be the obligation of, the Surviving Corporation. To the extent any
rights plan of the Company provided for the issuance or purchase of, or
otherwise related to, the Company's Common Stock, after the Effective
Date such plan shall be deemed to provide for the issuance or purchase
of, or otherwise relate to, Delaware Common Stock.
7. Stock Certificates. Upon the Effective Date, each certificate
representing issued and outstanding shares of the Company's Common Stock
(other than shares of the Company's Common Stock in respect of which
dissenters' rights shall properly have been exercised in accordance with
the MBCL) shall be deemed and treated for all purposes as representing the
shares of Delaware Common Stock into which such shares of the Company's
Common Stock have been converted. Each stockholder of the Company may, but
is not required to, exchange any existing stock certificates representing
shares of the Company's Common Stock for stock certificates representing
the same number of shares of Delaware Common Stock. All shares of Delaware
Common Stock into which shares of the Company's Common Stock shall have
been converted pursuant to this Merger Agreement shall be deemed to have
been issued in full satisfaction of all rights pertaining to such converted
shares. When the Merger becomes effective, the holders of certificates
representing the Company's Common Stock outstanding prior to the Effective
Date (except for shares of the Company's Common Stock in respect of which
dissenters' rights shall have been properly exercised in accordance with
the MBCL) shall cease to have any rights with respect to such stock, and
their sole rights shall be with respect to the Delaware Common Stock into
which their shares of the Company's Common Stock are to be converted by the
Merger. Upon the Effective Date, the stock transfer books of the Company
shall be closed and no transfer of shares of the Company's Common Stock
outstanding immediately prior to the Effective Date shall thereafter be
made or consummated.
8. Stockholder Approval. This Merger Agreement shall be submitted to
a vote of the stockholders of the Company and the sole stockholder of New
Daniel Green in accordance with the laws of the Commonwealth of
Massachusetts and the State of Delaware, respectively. In the event that
this Merger Agreement shall be not approved by the requisite vote of
holders of two-thirds of the Company's Common Stock outstanding and
entitled to vote at the Company's year 2000 annual meeting or any
adjournment thereof, this Merger Agreement shall thereupon be terminated
without further action of the parties hereto.
9. Plan of Reorganization. This Agreement is intended to be a plan of
reorganization within the meaning of Section 368(a) of the Code and the
Treasury Regulations promulgated thereunder.
10. Amendment. Subject to applicable law, this Merger Agreement may
be amended, modified or supplemented by written agreement of the parties
hereto at any time prior to the Effective Date with respect to any of the
items contained herein.
11. Abandonment. At any time before the Effective Date, this Merger
Agreement may be terminated and the Merger may be abandoned by the Board of
Directors of either New Daniel Green or the Company or both,
notwithstanding the approval of this Merger Agreement by the stockholders
of the Company or the sole stockholder of New Daniel Green.
12. Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the Commonwealth of Massachusetts, except
to the extent the laws of the State of Delaware are required to apply to
the Merger.
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IN WITNESS WHEREOF, this Merger Agreement is hereby executed on behalf of
the Company and New Daniel Green by their respective duly authorized officers as
of the date first written above.
DANIEL GREEN COMPANY
a Massachusetts corporation
--------------------------------------
Name: James R. Riedman
Title: Chairman and CEO
DANIEL GREEN COMPANY
a Delaware corporation
--------------------------------------
Name: Greg A. Tunney
Title: President
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APPENDIX B
CERTIFICATE OF INCORPORATION
OF
DANIEL GREEN COMPANY
FIRST: The name of the corporation is Daniel Green Company (the
"Corporation").
SECOND: The Corporation's registered office in the State of Delaware is c/o
The United States Corporation Company, 1013 Centre Road, in the City of
Wilmington, County of New Castle. The name of its registered agent at such
address is The United States Corporation Company.
THIRD: The nature of the business of the Corporation and its purpose is to
engage in any lawful act or activity for which corporations may be organized
under the General Corporation Law of the State of Delaware.
FOURTH: The total number of shares of all classes of stock which the
Corporation shall have authority to issue is 5,000,000 shares, consisting of
4,000,000 shares of Common Stock, par value $.01 per share, and 1,000,000 shares
of Preferred Stock, par value $.01 per share.
The Preferred Stock may be issued at any time and from time to time in one
or more series. The Board of Directors is hereby authorized to provide for the
issuance of shares of Preferred Stock in series and, by filing a certificate of
designation pursuant to the applicable provisions of the General Corporation Law
of the State of Delaware (hereinafter referred to as a "Preferred Stock
Certificate of Designation"), to establish from time to time the number of
shares to be included in each such series, and to fix the designation, powers,
preferences and rights of shares of each such series and the qualifications,
limitations and restrictions thereof.
The authority of the Board of Directors with respect to each series of
Preferred Stock shall include, but not be limited to, determination of the
following:
(a) the designation of the series, which may be by distinguishing
number, letter or title;
(b) the number of shares of the series, which number the Board of
Directors may thereafter (except where otherwise provided in the applicable
Preferred Stock Certificate of Designation) increase or decrease (but not
below the number of shares thereof then outstanding);
(c) whether dividends, if any, shall be cumulative or noncumulative
and the dividend rate of the series;
(d) the dates on which dividends, if any, shall be payable;
(e) the redemption rights and price or prices, if any, for shares of
the series;
(f) the terms and amount of any sinking fund provided for the purchase
or redemption of shares of the series;
(g) the amounts payable on shares of the series in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the
affairs of the Corporation;
(h) whether the shares of the series shall be convertible or
exchangeable into shares of any other class or series, or any other
security, of the Corporation or any other corporation, and, if so, the
specification of such other class or series or such other security, the
conversion or exchange price or prices or rate or rates, any adjustments
thereof, the date or dates as of which such shares shall be convertible or
exchangeable and all other terms and conditions upon which such conversion
or exchange may be made;
(i) restrictions on the issuance of shares of the same series or of
any other class or series;
(j) the voting rights, if any, of the holders of shares of the series;
and
(k) such other terms and provisions as the Board of Directors may
determine.
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FIFTH: The name and mailing address of the incorporator is as follows:
- ---------------------------------------------
-----------------------------------------------------
-----------------------------------------------------
SIXTH: The following provisions are inserted for the management of the
business and for the conduct of the affairs of the Corporation and for the
purpose of creating, defining, limiting and regulating the powers of the
Corporation and its directors and stockholders:
(a) The election of directors may be conducted in any manner approved
by the Chairman at the time when the election is held and need not be by
ballot.
(b) All corporate powers and authority of the Corporation (except as
at the time otherwise provided by law, by this Certificate of Incorporation
or by the By-Laws) shall be vested in and exercised by the Board of
Directors.
(c) The Board of Directors shall have the power without the assent or
vote of the stockholders to adopt, amend, alter or repeal the By-Laws of
the Corporation, except to the extent that the By-Laws or this Certificate
of Incorporation otherwise provide.
(d) No director of the Corporation shall be liable to the Corporation
or its stockholders for monetary damages for breach of his or her fiduciary
duty as a director, provided that nothing contained in this Certificate of
Incorporation shall eliminate or limit the liability of a director (i) for
any breach of the director's duty of loyalty to the Corporation or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of the law, (iii) under
Section 174 of the General Corporation Law of the State of Delaware or (iv)
for any transaction from which the director derived an improper personal
benefit.
SEVENTH: The Corporation reserves the right to amend, alter, change or
repeal any provision contained in this certificate in the manner now or
hereafter prescribed by statute; and all rights herein conferred upon the
stockholders are granted subject to this reservation.
IN WITNESS WHEREOF, I, the undersigned, being the incorporator hereinabove
named, for the purpose of forming a corporation pursuant to the General
Corporation Law of the State of Delaware, do make and file this Certificate of
Incorporation, hereby declaring and certifying that the facts herein stated are
true, and accordingly have hereunto set my hand this 17th day of February, 2000.
--------------------------------------
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APPENDIX C
DANIEL GREEN COMPANY
(A DELAWARE CORPORATION)
BY-LAWS
AS ADOPTED ON FEBRUARY 17, 2000
ARTICLE I
STOCKHOLDERS
Section 1.1 Annual Meetings. The annual meeting of the stockholders of the
Corporation for the election of directors and for the transaction of such other
business as properly may come before such meeting shall be held at such place,
either within or without the State of Delaware, and at 10:00 a.m. local time on
the first Thursday in April (or, if such day is a legal holiday, then on the
next succeeding business day), or at such other date and hour, as may be fixed
from time to time by resolution of the Board of Directors and set forth in the
notice or waiver of notice of the meeting. [Sections 211(a), (b).](1)
Section 1.2 Special Meetings. Special meetings of the stockholders may be
called at any time by the Chairman (or, in the event of the Chairman's absence
or disability, by the President or any Vice President) or the Board of
Directors. Such special meetings of the stockholders shall be held at such
places, within or without the State of Delaware, as shall be specified in the
respective notices or waivers of notice thereof. [Section 211(d).] Except as
otherwise required by law, special meetings of the stockholders cannot be called
by the holders of Common Stock, but only by the Chairman of the Board or by the
Board of Directors pursuant to a resolution adopted by a majority of the Entire
Board, being the total number of authorized directors if there were no
vacancies.
Section 1.3 Notice of Meetings; Waiver. The Secretary or any Assistant
Secretary shall cause written notice of the place, date and hour of each meeting
of the stockholders, and, in the case of a special meeting, the purpose or
purposes for which such meeting is called, to be given personally or by mail,
not less than 10 nor more than 60 days prior to the meeting, to each stockholder
of record entitled to vote at such meeting. If such notice is mailed, it shall
be deemed to have been given to a stockholder when deposited in the United
States mail, postage prepaid, directed to the stockholder at such stockholder's
address as it appears on the record of stockholders of the Corporation, or, if
such stockholder shall have filed with the Secretary of the Corporation a
written request that notices to such stockholder be mailed to some other
address, then directed to such stockholder at such other address. Such further
notice shall be given as may be required by law.
No notice of any meeting of stockholders need be given to any stockholder
who submits a signed waiver of notice, whether before or after the meeting.
Neither the business to be transacted at, nor the purpose of, any regular or
special meeting of the stockholders need be specified in a written waiver of
notice. The attendance of any stockholder at a meeting of stockholders shall
constitute a waiver of notice of such meeting, except when the stockholder
attends a meeting for the express purpose of objecting, at the beginning of the
meeting, to the transaction of any business on the ground that the meeting is
not lawfully called or convened. [Sections 222, 229.]
Section 1.4 Quorum. Except as otherwise required by law or by the
Certificate of Incorporation, the presence in person or by proxy of the holders
of record of a majority of the shares entitled to vote at a meeting of
stockholders shall constitute a quorum for the transaction of business at such
meeting. [Section 216.]
Section 1.5 Voting. If, pursuant to Section 5.5 of these By-Laws, a record
date has been fixed, every holder of record of shares entitled to vote at a
meeting of stockholders shall be entitled to one vote for each share outstanding
in such stockholder's name on the books of the Corporation at the close of
business on such record date. If no record date has been fixed, then every
holder of record of shares entitled to vote at a meeting
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(1) Citations are to the General Corporation Law of the State of Delaware as in
effect on February 1, 2000, and are inserted for reference only, and do not
constitute a part of the By-Laws.
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of stockholders shall be entitled to one vote for each share of stock standing
in such stockholder's name on the books of the Corporation at the close of
business on the day next preceding the day on which notice of the meeting is
given, or, if notice is waived, at the close of business on the day next
preceding the day on which the meeting is held. Except as otherwise required by
law or by the Certificate of Incorporation, the vote of a majority of the shares
represented in person or by proxy at any meeting at which a quorum is present
shall be sufficient for the transaction of any business at such meeting.
[Sections 212(a), 216.]
Section 1.6 Voting by Ballot. No vote of the stockholders need be taken by
written ballot or conducted by Inspectors of Elections unless otherwise required
by law. Any vote which need not be taken by ballot may be conducted in any
manner approved by the Chairman.
Section 1.7 Adjournment. If a quorum is not present at any meeting of the
stockholders, the stockholders present in person or by proxy shall have the
power to adjourn any such meeting from time to time until a quorum is present.
Notice of any adjourned meeting of the stockholders of the Corporation need not
be given if the place, date and hour thereof are announced at the meeting at
which the adjournment is taken, provided, however, that if the adjournment is
for more than 30 days, or if after the adjournment a new record date for the
adjourned meeting is fixed pursuant to Section 5.5 of these By-Laws, a notice of
the adjourned meeting, conforming to the requirements of Section 1.3 hereof,
shall be given to each stockholder of record entitled to vote at such meeting.
At any adjourned meeting at which a quorum is present, any business may be
transacted that might have been transacted on the original date of the meeting.
[Section 222(c).]
Section 1.8 Proxies. Any stockholder entitled to vote at any meeting of
the stockholders or to express consent to or dissent from corporate action
without a meeting may authorize another person or persons to vote at any such
meeting and express such consent or dissent for such stockholder by proxy. A
stockholder may authorize a valid proxy by executing a written instrument signed
by such stockholder, or by causing his or her signature to be affixed to such
writing by any reasonable means including, but not limited to, by facsimile
signature, or by transmitting or authorizing the transmission of a telegram,
cablegram or other means of electronic transmission to the person designated as
the holder of the proxy, a proxy solicitation firm or a like authorized agent.
No such proxy shall be voted or acted upon after the expiration of three years
from the date of such proxy, unless such proxy provides for a longer period.
Every proxy shall be revocable at the pleasure of the stockholder executing it,
except in those cases where applicable law provides that a proxy shall be
irrevocable. A stockholder may revoke any proxy which is not irrevocable by
attending the meeting and voting in person or by filing an instrument in writing
revoking the proxy or by filing another duly executed proxy bearing a later date
with the Secretary. Proxies by telegram, cablegram or other electronic
transmission must either set forth or be submitted with information from which
it can be determined that the telegram, cablegram or other electronic
transmission was authorized by the stockholder. Any copy, facsimile
telecommunication or other reliable reproduction of a writing or transmission
created pursuant to this section may be substituted or used in lieu of the
original writing or transmission for any and all purposes for which the original
writing or transmission could be used, provided that such copy, facsimile
telecommunication or other reproduction shall be a complete reproduction of the
entire original writing or transmission. [Sections 212(b), (c).]
Section 1.9 Organization; Procedure. At every meeting of stockholders the
presiding officer shall be the Chairman or, in the event of the Chairman's
absence or disability, a presiding officer chosen by a majority of the
stockholders present in person or by proxy. The Secretary, or in the event of
the Secretary's absence or disability, the Assistant Secretary, if any, or if
there be no Assistant Secretary, in the absence of the Secretary, an appointee
of the presiding officer, shall act as Secretary of the meeting. The order of
business and all other matters of procedure at every meeting of stockholders may
be determined by such presiding officer.
Section 1.10 Consent of Stockholders in Lieu of Meeting. Actions by
stockholders may only be taken at a meeting convened at which a quorum is
present. No action required or permitted to be taken at a meeting of the
stockholders shall be taken by written consent.
Section 1.11 Notice of Stockholder Business and Nominations.
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(a) Annual Meetings of Stockholders. (i) Nominations of persons for
election to the Board of Directors of the Corporation and the proposal of
business to be considered by the stockholders may be made at an annual meeting
of stockholders (A) pursuant to the Corporation's notice of meeting, (B) by or
at the direction of the Board of Directors or (C) by any stockholder of the
Corporation who was a stockholder of record at the time of giving of notice
provided for in this Section 1.11, who is entitled to vote at the meeting and
who complied with the notice procedures set forth in this Section 1.11.
(ii) For nominations or other business to be properly brought before an
annual meeting by a stockholder pursuant to clause (C) of paragraph (a)(i) of
this Section 1.11, the stockholder must have given timely notice thereof in
writing to the Secretary of the Corporation and such other business must be a
proper matter for stockholder action. To be timely, a stockholder's notice shall
be delivered to the Secretary at the principal executive offices of the
Corporation not later than the close of business on the 90th day nor earlier
than the close of business on the 120th day prior to the first anniversary of
the preceding year's annual meeting; provided, however, that in the event that
the date of the annual meeting is more than 30 days before or more than 60 days
after such anniversary date, notice by the stockholder to be timely must be so
delivered not earlier than the close of business on the 120th day prior to such
annual meeting and not later than the close of business on the later of the 90th
day prior to such annual meeting or the 10th day following the day on which
public announcement of the date of such meeting is first made. In no event shall
the public announcement of an adjournment of an annual meeting commence a new
time period for the giving of a stockholder's notice as described above. Such
stockholder's notice shall set forth (A) as to each person whom the stockholder
proposes to nominate for election or reelection as a director all information
relating to such person that is required to be disclosed in solicitations of
proxies for election of directors in an election contest, or is otherwise
required, in each case pursuant to Regulation 14A under the Securities Exchange
Act of 1934, as amended (the "Exchange Act") and Rule 14a-11 thereunder
(including such person's written consent to being named in the proxy statement
as a nominee and to serving as a director if elected); (B) as to any other
business that the stockholder proposes to bring before the meeting, a brief
description of the business desired to be brought before the meeting, the
reasons for conducting such business at the meeting and any material interest in
such business of such stockholder and the beneficial owner, if any, on whose
behalf the proposal is made; and (C) as to the stockholder giving the notice and
the beneficial owner, if any, on whose behalf the nomination or proposal is made
(1) the name and address of such stockholder, as they appear on the
Corporation's books, and of such beneficial owner and (2) the class and number
of shares of the Corporation which are owned beneficially and of record by such
stockholder and such beneficial owner.
(iii) Notwithstanding anything in the second sentence of paragraph (a)(ii)
of this Section 1.11 to the contrary, in the event that the number of directors
to be elected to the Board of Directors of the Corporation is increased and
there is no public announcement naming all of the nominees for director or
specifying the size of the increased Board of Directors made by the Corporation
at least 100 days prior to the first anniversary of the preceding year's annual
meeting, a stockholder's notice required by this Section 1.11 shall also be
considered timely, but only with respect to nominees for any new positions
created by such increase, if it shall be delivered to the Secretary at the
principal executive offices of the Corporation not later than the close of
business on the 10th day following the day on which such public announcement is
first made by the Corporation.
(b) Special Meetings of Stockholders. Only such business shall be
conducted at a special meeting of stockholders as shall have been brought before
the meeting pursuant to the Corporation's notice of meeting. Nominations of
persons for election to the Board of Directors may be made at a special meeting
of stockholders at which directors are to be elected pursuant to the
Corporation's notice of meeting (i) by or at the direction of the Board of
Directors or (ii) by any stockholder of the Corporation who is a stockholder of
record at the time of giving of notice provided for in this Section 1.11, who
shall be entitled to vote at the meeting and who complies with the notice
procedures set forth in this Section 1.11. In the event the Corporation calls a
special meeting of stockholders for the purpose of electing one or more
directors to the Board of Directors, any such stockholder may nominate a person
or persons (as the case may be), for election to such position(s) as specified
in the Corporation's notice of meeting, if the stockholder's notice required by
paragraph (a)(ii) of this Section 1.11 shall be delivered to the Secretary at
the principal executive offices of the Corporation not earlier than the close of
business on the 120th day prior to such special meeting and not
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later than the close of business on the later of the 90th day prior to such
special meeting or the 10th day following the day on which public announcement
is first made of the date of the special meeting and of the nominees proposed by
the Board of Directors to be elected at such meeting. In no event shall the
public announcement of an adjournment of a special meeting commence a new time
period for the giving of a stockholder's notice as described above.
(c) General. (i) Only such persons who are nominated in accordance with
the procedures set forth in this Section 1.11 shall be eligible to serve as
directors and only such business shall be conducted at a meeting of stockholders
as shall have been brought before the meeting in accordance with the procedures
set forth in this Section 1.11. Except as otherwise provided by law, the
Chairman of the meeting shall have the power and duty to determine whether a
nomination or any business proposed to be brought before the meeting was made,
or proposed, as the case may be, in accordance with the procedures set forth in
this Section 1.11 and, if any proposed nomination or business is not in
compliance with this Section 1.11, to declare that such defective proposal or
nomination shall be disregarded.
(ii) For purposes of this Section 1.11, "public announcement" shall mean
disclosure in a press release reported by the Dow Jones News Service, Associated
Press or comparable national news service or in a document publicly filed by the
Corporation with the Securities and Exchange Commission pursuant to Section 13,
14 or 15(d) of the Exchange Act.
(iii) Notwithstanding the foregoing provisions of this Section 1.11, a
stockholder shall also comply with all applicable requirements of the Exchange
Act and the rules and regulations thereunder with respect to the matters set
forth in this Section 1.11. Nothing in this Section 1.11 shall be deemed to
affect any rights of (1) stockholders to request inclusion of proposals in the
Corporation's proxy statement pursuant to Rule 14a-8 under the Exchange Act or
(2) the holders of any series of Preferred Stock to elect directors under
specified circumstances.
ARTICLE II
BOARD OF DIRECTORS
Section 2.1 General Powers. Except as may otherwise be provided by law, by
the Certificate of Incorporation or by these By-Laws, the property, affairs and
business of the Corporation shall be managed by or under the direction of the
Board of Directors and the Board of Directors may exercise all the powers of the
Corporation. [Section 141(a).]
Section 2.2 Number. The number of Directors constituting the entire Board
of Directors initially shall be three (3). Following the merger of the
Corporation with Daniel Green Company, a Massachusetts corporation, the number
of Directors constituting the entire Board of Directors shall be six (6), which
number may be modified from time to time exclusively by resolution adopted by a
majority of the Entire Board of Directors, but in no event shall the number of
Directors be less than three. [Section 141(b).]
Section 2.3 Election of Directors and Term of Office. Except as otherwise
provided in Sections 2.12 and 2.13 of these By-Laws, the Directors shall be
elected at each annual meeting of the stockholders as provided for below. If the
annual meeting for the election of Directors is not held on the date designated
therefor, the Directors shall cause the meeting to be held as soon thereafter as
convenient. At each meeting of the stockholders for the election of Directors,
provided a quorum is present, the Directors shall be elected by a plurality of
the votes validly cast in such election. Each Director (whenever elected) shall
hold office until such Director's successor has been duly elected and qualified,
or until the Director's earlier death, resignation or removal. [Sections 141
(b), 211(b), (c), 216.]
Section 2.4 Annual and Regular Meetings. The annual meeting of the Board
of Directors for the purpose of electing officers and for the transaction of
such other business as may come before the meeting shall be held as soon as
possible following adjournment of the annual meeting of the stockholders at the
place of such annual meeting of the stockholders. Notice of such annual meeting
of the Board of Directors need not
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be given. The Board of Directors from time to time may by resolution provide for
the holding of regular meetings and fix the place (which may be within or
without the State of Delaware) and the date and hour of such meetings. Notice of
regular meetings need not be given, provided, however, that if the Board of
Directors shall fix or change the time or place of any regular meeting, notice
of such action shall be mailed promptly, or sent by telegram, radio or cable, to
each Director who shall not have been present at the meeting at which such
action was taken, addressed to such Directors at such Director's usual place of
business, or shall be delivered to such Director personally. Notice of such
action need not be given to any Director who attends the first regular meeting
after such action is taken without protesting the lack of notice to such
Director, prior to or at the commencement of such meeting, or to any Director
who submits a signed waiver of notice, whether before or after such meeting.
[Section 141(g).]
Section 2.5 Special Meetings; Notice. Special meetings of the Board of
Directors shall be held whenever called by the Chairman or, in the event of the
Chairman's absence or disability, by the President or any Vice President, at
such place (within or without the State of Delaware), date and hour as may be
specified in the respective notices or waivers of notice of such meetings.
Special meetings of the Board of Directors may be called on 24 hours' notice, if
notice is given to each Director personally or by telephone or telegram, or on
five days' notice, if notice is mailed to each Director, addressed to such
Director at such Director's usual place of business. Notice of any special
meeting need not be given to any Director who attends such meeting without
protesting the lack of notice to such Director, prior to or at the commencement
of such meeting, or to any Director who submits a signed waiver of notice,
whether before or after such meeting, and any business may be transacted
thereat. [Sections 141(g), 229.]
Section 2.6 Quorum; Voting. At all meetings of the Board of Directors, the
presence of a majority of the total authorized number of Directors shall
constitute a quorum for the transaction of business. Except as otherwise
required by law, the vote of a majority of the Directors present at any meeting
at which a quorum is present shall be the act of the Board of Directors.
[Section 141(b).]
Section 2.7 Adjournment. A majority of the Directors present, whether or
not a quorum is present, may adjourn any meeting of the Board of Directors to
another time or place. No notice need be given of any adjourned meeting unless
the time and place of the adjourned meeting are not announced at the time of
adjournment, in which case notice conforming to the requirements of Section 2.5
shall be given to each Director.
Section 2.8 Action Without a Meeting. Any action required or permitted to
be taken at any meeting of the Board of Directors may be taken without a meeting
if all members of the Board of Directors consent thereto in writing, and such
writing or writings are filed with the minutes of proceedings of the Board of
Directors. [Section 141(f).]
Section 2.9 Regulations; Manner of Acting. To the extent consistent with
applicable law, the Certificate of Incorporation and these By-Laws, the Board of
Directors may adopt such rules and regulations for the conduct of meetings of
the Board of Directors and for the management of the property, affairs and
business of the Corporation as the Board of Directors may deem appropriate. The
Directors shall act only as a Board, and the individual Directors shall have no
power as such.
Section 2.10 Action by Telephonic Communications. Members of the Board of
Directors may participate in a meeting of the Board of Directors 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 provision shall constitute presence in person at such
meeting. [Section 141(I).]
Section 2.11 Resignations. Any Director may resign at any time by
delivering a written notice of resignation, signed by such Director, to the
Chairman or the Secretary. Unless otherwise specified therein, such resignation
shall take effect upon delivery. Section 141(b).]
Section 2.12 Removal of Directors. Any Director may be removed at any
time, either for or without cause, upon the affirmative vote of the holders of a
majority of the outstanding shares of stock of the Corporation entitled to vote
for the election of such Director, cast at a special meeting of stockholders
called for the purpose. Any vacancy in the Board of Directors caused by any such
removal may be filled at such
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meeting (or in the written instrument effecting such removal, if such removal
was effected by consent without a meeting), by the stockholders entitled to vote
for the election of the Director so removed. If such stockholders do not fill
such vacancy at such meeting (or in the written instrument effecting such
removal, if such removal was effected by consent without a meeting), such
vacancy may be filled in the manner provided in Section 2.13 of these By-Laws.
[Sections 141(b), 228]
Section 2.13 Vacancies and Newly Created Directorships. If any vacancies
shall occur in the Board of Directors, by reason of death, resignation, removal
or otherwise, or if the authorized number of Directors shall be increased, the
Directors then in office shall continue to act, and such vacancies and newly
created directorships may be filled by a majority of the Directors then in
office, although less than a quorum. A Director elected to fill a vacancy or a
newly created directorship shall hold office until such Director's successor has
been elected and qualified or until such Director's earlier death, resignation
or removal. Any such vacancy or newly created directorship may also be filled at
any time by vote of the stockholders. [Section 223.]
Section 2.14 Compensation. The amount, if any, and form of consideration,
which each Director shall be entitled to receive as compensation for such
Director's services as such, shall be fixed from time to time by resolution of
the Board of Directors. [Section 141(h).]
Section 2.15 Reliance on Accounts and Reports, etc. A Director, or a
member of any Committee designated by the Board of Directors shall, in the
performance of such member's duties, be fully protected in relying in good faith
upon the records of the Corporation and upon information, opinions, reports or
statements presented to the Corporation by any of the Corporation's officers or
employees, or Committees designated by the Board of Directors, or by any other
person as to the matters the member reasonably believes are within such other
person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Corporation. [Section 141(e).]
ARTICLE III
EXECUTIVE COMMITTEE AND OTHER COMMITTEES
Section 3.1 How Constituted. The Board of Directors may designate one or
more Committees, including an Executive Committee, each such Committee to
consist of such number of Directors as from time to time may be fixed by the
Board of Directors. The Board of Directors may designate one or more Directors
as alternate members of any such Committee, who may replace any absent or
disqualified member or members at any meeting of such Committee. Thereafter,
members (and alternate members, if any) of each such Committee may be designated
at the annual meeting of the Board of Directors. Any such Committee may be
abolished or re-designated from time to time by the Board of Directors. Each
member (and each alternate member) of any such Committee (whether designated at
an annual meeting of the Board of Directors or to fill a vacancy or otherwise)
shall hold office until such Director's successor shall have been designated or
until such Director shall cease to be a Director, or until such Director's
earlier death, resignation or removal. [Section 141(c).]
Section 3.2 Powers. During the intervals between the meetings of the Board
of Directors, the Executive Committee, except as otherwise provided in this
section, shall have and may exercise all the powers and authority of the Board
of Directors in the management of the property, affairs and business of the
Corporation. Each such other Committee, except as otherwise provided in this
section, shall have and may exercise such powers of the Board of Directors as
may be provided by resolution or resolutions of the Board of Directors. Neither
the Executive Committee nor any such other Committee shall have the power or
authority:
(a) to approve or adopt, or to recommend to the stockholders, any
action or matter expressly required by the General Corporation Law of the
State of Delaware to be submitted to the stockholders for approval; or
(b) to adopt, amend or repeal any by-law of the Corporation;
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(c) and unless a resolution of the Board of Directors so provides, no
such Committee shall have the power or authority to:
(d) declare a dividend;
(e) authorize the issuance of stock; or
(f) adopt a certificate of ownership and merger pursuant to Section
253 of the General Corporation Law of the State of Delaware (Merger of
Parent Corporation and Subsidiary or Subsidiaries).
(g) The Executive Committee shall have, and any such other Committee
may be granted by the Board of Directors, power to authorize the seal of
the Corporation to be affixed to any or all papers which may require it.
[Section 141(c).]
Section 3.3 Proceedings. Each such Committee may fix its own rules of
procedure and may meet at such place (within or without the State of Delaware),
at such time and upon such notice, if any, as it shall determine from time to
time. Each such Committee shall keep minutes of its proceedings and shall report
such proceedings to the Board of Directors at the meeting of the Board of
Directors next following any such proceedings.
Section 3.4 Quorum and Manner of Acting. Except as may be otherwise
provided in the resolution creating such Committee, at all meetings of any
Committee the presence of members (or alternate members) constituting a majority
of the total authorized membership of such Committee shall constitute a quorum
for the transaction of business. The act of the majority of the members present
at any meeting at which a quorum is present shall be the act of such Committee.
Any action required or permitted to be taken at any meeting of any such
Committee may be taken without a meeting, if all members of such Committee shall
consent to such action in writing and such writing or writings are filed with
the minutes of the proceedings of the Committee. The members of any such
Committee shall act only as a Committee, and the individual members of such
Committee shall have no power as such. [Section 141(c).]
Section 3.5 Action by Telephonic Communications. Members of any Committee
designated by the Board of Directors may participate in a meeting of such
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 provision shall constitute
presence in person at such meeting. [Section 141(I).]
Section 3.6 Absent or Disqualified Members. In the absence or
disqualification of a member of any Committee, the member or members thereof
present at any meeting and not disqualified from voting, whether or not such
member or they constitute a quorum, may unanimously appoint another member of
the Board of Directors to act at the meeting in the place of any such absent or
disqualified member. [Section 141(c).]
Section 3.7 Resignations. Any member (and any alternate member) of any
Committee may resign at any time by delivering a written notice of resignation,
signed by such member, to the Chairman. Unless otherwise specified therein, such
resignation shall take effect upon delivery.
Section 3.8 Removal. Any member (and any alternate member) of any
Committee may be removed at any time, either for or without cause, by resolution
adopted by a majority of the whole Board of Directors.
Section 3.9 Vacancies. If any vacancy shall occur in any Committee, by
reason of disqualification, death, resignation, removal or otherwise, the
remaining members (and any alternate members) shall continue to act, and any
such vacancy may be filled by the Board of Directors.
ARTICLE IV
OFFICERS
Section 4.1 Executive Officers. The executive officers of the Corporation
shall be a Chief Executive Officer (who may be the Chairman of the Board or the
President), a President, one or more Vice Presidents, a Secretary and a
Treasurer. Any person may hold two or more offices.
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Section 4.2 Election. Unless otherwise determined by the Board of
Directors, the officers of the Corporation shall be elected by the Board of
Directors at the annual meeting of the Board of Directors, and shall be elected
to hold office until the next succeeding annual meeting of the Board of
Directors. In the event of the failure to elect officers at such annual meeting,
officers may be elected at any regular or special meeting of the Board of
Directors. Each officer shall hold office until such officer's successor has
been elected and qualified, or until such officer's earlier death, resignation
or removal. [Section 142(b).]
Section 4.3 Salaries. The salaries of all officers and agents of the
Corporation shall be fixed by the Board of Directors.
Section 4.4 Removal and Resignation; Vacancies. Any officer may be removed
for or without cause at any time by the Board of Directors. Any officer may
resign at any time by delivering a written notice of resignation, signed by such
officer, to the Board of Directors, the Chairman or the President. Unless
otherwise specified therein, such resignation shall take effect upon delivery.
Any vacancy occurring in any office of the Corporation by death, resignation,
removal or otherwise, shall be filled by the Board of Directors. [Section
142(b), (e).]
Section 4.5 Authority and Duties of Officers. The officers of the
Corporation shall have such authority and shall exercise such powers and perform
such duties as may be specified in these By-Laws, except that in any event each
officer shall exercise such powers and perform such duties as may be required by
law. [Section 142(a).]
Section 4.6 The Chairman of the Board of Directors. The Chairman of the
Board of Directors shall preside at all meetings of the directors at which the
Chairman is present and shall have such other duties as may from time to time be
delegated to him by the Board of Directors. The Chairman shall be the Chief
Executive Officer unless otherwise determined by the Board of Directors.
Section 4.7 The Chief Executive Officer. The Chief Executive Officer
shall, subject to the control of the Board of Directors, have general
supervision, direction and control of the business and affairs of the
Corporation. The Chief Executive Officer shall preside at all meetings of the
stockholders and, in the absence of the Chairman of the Board, at all meetings
of the Board of Directors. The Chief Executive Officer is ex officio a member of
the Executive Committee and has the general powers and duties of management
usually vested in the office of chief executive officer of a corporation and
such other powers and duties as may be prescribed by the Board of Directors or
these By-laws.
Section 4.8 The President. In the absence or disability of the Chief
Executive Officer, the President shall perform all of the duties of the Chief
Executive Officer and when so acting has all the powers and is subject to all
the restrictions upon the Chief Executive Officer, including the power to sign
all instruments and to take all actions which the Chief Executive Officer is
authorized to perform by the Board of Directors or these By-laws. The President
has the general powers and duties usually vested in the office of president of a
corporation and such other powers and duties as may be prescribed by the Chief
Executive Officer or the Board of Directors or these By-laws.
Section 4.9 The Vice President. In the absence or disability of the Chief
Executive Officer and the President, the Vice President most senior in the order
of his or her rank and seniority shall perform all of the duties of the Chief
Executive Officer, and when so acting has all the powers of and is subject to
all the restrictions upon the Chief Executive Officer, including the power to
sign all instruments and to take all actions which the Chief Executive Officer
is authorized to perform by the Board of Directors or these By-laws. The various
ranks of Vice Presidents have the general powers and duties usually vested in
the office of a vice president of a corporation and each of them has such other
powers and perform such other duties as from time to time may be prescribed for
them respectively by the Board of Directors, the Executive Committee of the
Board of Directors, the Chief Executive Officer or these By-laws.
Section 4.10 The Secretary. The Secretary shall have the following powers
and duties:
(a) The Secretary shall keep or cause to be kept a record of all the
proceedings of the meetings of the stockholders and of the Board of
Directors in books provided for that purpose.
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(b) The Secretary shall cause all notices to be duly given in
accordance with the provisions of these By-Laws and as required by law.
(c) Whenever any Committee shall be appointed pursuant to a resolution
of the Board of Directors, the Secretary shall furnish a copy of such
resolution to the members of such Committee.
(d) The Secretary shall be the custodian of the records and of the
seal of the Corporation and cause such seal (or a facsimile thereof) to be
affixed to all certificates representing shares of the Corporation prior to
the issuance thereof and to all instruments the execution of which on
behalf of the Corporation under its seal shall have been duly authorized in
accordance with these By-Laws, and when so affixed the Secretary may attest
the same.
(e) The Secretary shall properly maintain and file all books, reports,
statements, certificates and all other documents and records required by
law, the Certificate of Incorporation or these By-Laws.
(f) The Secretary shall have charge of the stock books and ledgers of
the Corporation and shall cause the stock and transfer books to be kept in
such manner as to show at any time the number of shares of stock of the
Corporation of each class issued and outstanding, the names (alphabetically
arranged) and the addresses of the holders of record of such shares, the
number of shares held by each holder and the date as of which each became
such holder of record.
(g) The Secretary shall sign (unless the Treasurer, an Assistant
Treasurer or Assistant Secretary shall have signed) certificates
representing shares of the Corporation the issuance of which shall have
been authorized by the Board of Directors.
(h) The Secretary shall perform, in general, all duties incident to
the office of secretary and such other duties as may be specified in these
By-Laws or as may be assigned to the Secretary from time to time by the
Board of Directors, or the President.
Section 4.11 The Treasurer. The Treasurer shall be the chief financial
officer of the Corporation and shall have the following powers and duties:
(a) The Treasurer shall have charge and supervision over and be
responsible for the moneys, securities, receipts and disbursements of the
Corporation, and shall keep or cause to be kept full and accurate records
of all receipts of the Corporation.
(b) The Treasurer shall cause the moneys and other valuable effects of
the Corporation to be deposited in the name and to the credit of the
Corporation in such banks or trust companies or with such bankers or other
depositaries as shall be selected in accordance with Section 8.5 of these
By-Laws.
(c) The Treasurer shall cause the moneys of the Corporation to be
disbursed by checks or drafts (signed as provided in Section 8.6 of these
By-Laws) upon the authorized depositaries of the Corporation and cause to
be taken and preserved proper vouchers for all moneys disbursed.
(d) The Treasurer shall render to the Board of Directors or the
President, whenever requested, a statement of the financial condition of
the Corporation and of all the Treasurer's transactions as Treasurer, and
render a full financial report at the annual meeting of the stockholders,
if called upon to do so.
(e) The Treasurer shall be empowered from time to time to require from
all officers or agents of the Corporation reports or statements giving such
information as the Treasurer may desire with respect to any and all
financial transactions of the Corporation.
(f) The Treasurer may sign (unless an Assistant Treasurer or the
Secretary or an Assistant Secretary shall have signed) certificates
representing stock of the Corporation the issuance of which shall have been
authorized by the Board of Directors.
(g) The Treasurer shall perform, in general, all duties incident to
the office of treasurer and such other duties as may be specified in these
By-Laws or as may be assigned to such Treasurer from time to time by the
Board of Directors, or the President.
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Section 4.12 Additional Officers. The Board of Directors may appoint such
other officers and agents as it may deem appropriate, and such other officers
and agents shall hold their offices for such terms and shall exercise such
powers and perform such duties as may be determined from time to time by the
Board of Directors. The Board of Directors from time to time may delegate to any
officer or agent the power to appoint subordinate officers or agents and to
prescribe their respective rights, terms of office, authorities and duties. Any
such officer or agent may remove any such subordinate officer or agent appointed
by such officer, for or without cause. [Section 142(a), (b).]
Section 4.13 Security. The Board of Directors may require any officer,
agent or employee of the Corporation to provide security for the faithful
performance of such person's duties, in such amount and of such character as may
be determined from time to time by the Board of Directors. [Section 142(c).]
ARTICLE V
CAPITAL STOCK
Section 5.1 Certificates of Stock. The shares of the Corporation shall be
represented by certificates, provided that the Board of Directors may provide by
resolution or resolutions that some or all of any or all classes or series of
the stock of the Corporation shall be uncertificated shares. Any such resolution
shall not apply to shares represented by a certificate until each certificate is
surrendered to the Corporation. Notwithstanding the adoption of such a
resolution by the Board of Directors, every holder of stock in the Corporation
represented by certificates and upon request every holder of uncertificated
shares shall be entitled to have a certificate signed by, or in the name of the
Corporation, by the President or a Vice President, and by the Treasurer or an
Assistant Treasurer, or the Secretary or an Assistant Secretary, representing
the number of shares registered in certificate form. Such certificate shall be
in such form as the Board of Directors may determine, to the extent consistent
with applicable law, the Certificate of Incorporation and these By-Laws.
[Section 158.]
Section 5.2 Signatures; Facsimile. All of such signatures on the
certificate may be a facsimile, engraved or printed, to the extent permitted by
law. In case any officer, transfer agent or registrar who has signed, or whose
facsimile signature has been placed upon a certificate shall have ceased to be
such officer, transfer agent or registrar before such certificate is issued, it
may be issued by the Corporation with the same effect as if such person were
such officer, transfer agent or registrar at the date of issue. [Section 158.]
Section 5.3 Lost, Stolen or Destroyed Certificates. The Board of Directors
may direct that a new certificate be issued in place of any certificate
theretofore issued by the Corporation alleged to have been lost, stolen or
destroyed, upon delivery to the Board of Directors of an affidavit of the owner
or owners of such certificate, setting forth such allegation. The Board of
Directors may require the owner of such lost, stolen or destroyed certificate,
or such owner's legal representative, to give the Corporation a bond sufficient
to indemnify it against any claim that may be made against it on account of the
alleged loss, theft or destruction of any such certificate or the issuance of
any such new certificate. [Section 167.]
Section 5.4 Transfer of Stock. Upon surrender to the Corporation or the
transfer agent of the Corporation of a certificate for shares, duly endorsed or
accompanied by appropriate evidence of succession, assignment or authority to
transfer, the Corporation shall issue a new certificate to the person entitled
thereto, cancel the old certificate and record the transaction upon its books.
Within a reasonable time after the transfer of uncertificated stock, the
Corporation shall send to the registered owner thereof a written notice
containing the information required to be set forth or stated on certificates
pursuant to Sections 151, 156, 202(a) or 218(a) of the General Corporation Law
of the State of Delaware. Subject to the provisions of the Certificate of
Incorporation and these By-Laws, the Board of Directors may prescribe such
additional rules and regulations as it may deem appropriate relating to the
issue, transfer and registration of shares of the Corporation. [Section 151.]
Section 5.5 Record Date. In order to determine the stockholders entitled
to notice of or to vote at any meeting of stockholders or any adjournment
thereof, the Board of Directors may fix, in advance, a record date, which record
date shall not precede the date on which the resolution fixing the record date
is adopted by the
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Board of Directors, and which shall not be more than 60 nor less than 10 days
before the date of such meeting. 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.
In order that the Corporation may determine the stockholders entitled to
receive payment of any dividend or other distribution or allotment of any rights
of the stockholders entitled to exercise any rights in respect of any change,
conversion or exchange of stock, or for the purpose of any other lawful action,
the Board of Directors may fix a record date, which record date shall not
precede the date upon which the resolution fixing the record date is adopted,
and which record date shall be not more than 60 days prior to such action. If no
record date is fixed, the record date for determining stockholders for any such
purpose shall be at the close of business on the day on which the Board of
Directors adopts the resolution relating thereto. [Section 213.]
Section 5.6 Registered Stockholders. Prior to due surrender of a
certificate for registration of transfer, the Corporation may treat the
registered owner as the person exclusively entitled to receive dividends and
other distributions, to vote, to receive notice and otherwise to exercise all
the rights and powers of the owner of the shares represented by such
certificate, and the Corporation shall not be bound to recognize any equitable
or legal claim to or interest in such shares on the part of any other person,
whether or not the Corporation shall have notice of such claim or interests.
Whenever any transfer of shares shall be made for collateral security, and not
absolutely, it shall be so expressed in the entry of the transfer if, when the
certificates are presented to the Corporation for transfer or uncertificated
shares are requested to be transferred, both the transferor and transferee
request the Corporation to do so. [Section 159.]
Section 5.7 Transfer Agent and Registrar. The Board of Directors may
appoint one or more transfer agents and one or more registrars, and may require
all certificates representing shares to bear the signature of any such transfer
agents or registrars.
ARTICLE VI
INDEMNIFICATION
Section 6.1 Nature of Indemnity. 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 or has agreed to become a director or officer of the
Corporation, or is or was serving or has agreed to serve at the request of the
Corporation as a director or officer, of another corporation, partnership, joint
venture, trust or other enterprise, or by reason of any action alleged to have
been taken or omitted in such capacity, and may indemnify any person who was or
is a party or is threatened to be made a party to such an action, suit or
proceeding by reason of the fact that such person is or was or has agreed to
become an employee or agent of the Corporation, or is or was serving or has
agreed to serve at the request of the Corporation as an employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by such person or on such
person's behalf in connection with such action, suit or proceeding and any
appeal therefrom, if such person acted in good faith and in a manner such person
reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding had no
reasonable cause to believe such person's conduct was unlawful; except that in
the case of an action or suit by or in the right of the Corporation to procure a
judgment in its favor (1) such indemnification shall be limited to expenses
(including attorneys' fees) actually and reasonably incurred by such person in
the defense or settlement of such action or suit, and (2) no indemnification
shall be made in respect of any claim, issue or matter as to which such person
shall have been adjudged to be liable to the Corporation unless and only to the
extent that the Delaware Court of Chancery or the court in which such action or
suit was brought shall determine upon application that, despite the adjudication
of liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which the Delaware
Court of Chancery or such other court shall deem proper.
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The termination of any action, suit or proceeding by judgment, order
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the person did not act in good
faith and in a manner which such person reasonably believed to be in or not
opposed to the best interests of the Corporation, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that such
person's conduct was unlawful.
Section 6.2 Successful Defense. To the extent that a director, officer,
employee or agent of the Corporation has been successful on the merits or
otherwise in defense of any action, suit or proceeding referred to in Section
6.1 hereof or in defense of any claim, issue or matter therein, such person
shall be indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by such person in connection therewith.
Section 6.3 Determination That Indemnification Is Proper. Any
indemnification of a director or officer of the Corporation under Section 6.1
hereof (unless ordered by a court) shall be made by the Corporation unless a
determination is made that indemnification of the director or officer is not
proper in the circumstances because such person has not met the applicable
standard of conduct set forth in Section 6.1 hereof. Any indemnification of an
employee or agent of the Corporation under Section 6.1 hereof (unless ordered by
a court) may be made by the Corporation upon a determination that
indemnification of the employee or agent is proper in the circumstances because
such person has met the applicable standard of conduct set forth in Section 6.1
hereof. Any such determination shall be made (1) by a majority vote of the
directors who are not parties to such action, suit or proceeding, or (2) by a
committee of such directors designated by majority vote of such directors, even
though less than a quorum, or (3) if there are no such directors, or if such
directors so direct, by independent legal counsel in a written opinion, or (4)
by the stockholders.
Section 6.4 Advance Payment of Expenses. Expenses (including attorneys'
fees) incurred by a director or officer in defending any civil, criminal,
administrative or investigative action, suit or proceeding shall be paid by the
Corporation in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of the director or
officer to repay such amount if it shall ultimately be determined that such
person is not entitled to be indemnified by the Corporation as authorized in
this Article. Such expenses (including attorneys' fees) incurred by other
employees and agents may be so paid upon such terms and conditions, if any, as
the Board of Directors deems appropriate. The Board of Directors may authorize
the Corporation's counsel to represent such director, officer, employee or agent
in any action, suit or proceeding, whether or not the Corporation is a party to
such action, suit or proceeding.
Section 6.5 Procedure for Indemnification of Directors and Officers. Any
indemnification of a director or officer of the Corporation under Sections 6.1
and 6.2, or advance of costs, charges and expenses to a director or officer
under Section 6.4 of this Article, shall be made promptly, and in any event
within 30 days, upon the written request of the director or officer. If a
determination by the Corporation that the director or officer is entitled to
indemnification pursuant to this Article is required, and the Corporation fails
to respond within 60 days to a written request for indemnity, the Corporation
shall be deemed to have approved such request. If the Corporation denies a
written request for indemnity or advancement of expenses, in whole or in part,
or if payment in full pursuant to such request is not made within 30 days, the
right to indemnification or advances as granted by this Article shall be
enforceable by the director or officer in any court of competent jurisdiction.
Such person's costs and expenses incurred in connection with successfully
establishing such person's right to indemnification, in whole or in part, in any
such action shall also be indemnified by the Corporation. It shall be a defense
to any such action (other than an action brought to enforce a claim for the
advance of costs, charges and expenses under Section 6.4 of this Article where
the required undertaking, if any, has been received by the Corporation) that the
claimant has not met the standard of conduct set forth in Section 6.1 of this
Article, but the burden of proving such defense shall be on the Corporation.
Neither the failure of the Corporation (including its Board of Directors, its
independent legal counsel, and its stockholders) to have made a determination
prior to the commencement of such action that indemnification of the claimant is
proper in the circumstances because such person has met the applicable standard
of conduct set forth in Section 6.1 of this Article, nor the fact that there has
been an actual determination by the Corporation (including its Board of
Directors, its independent legal counsel, and its stockholders) that the
claimant has not met such applicable
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standard of conduct, shall be a defense to the action or create a presumption
that the claimant has not met the applicable standard of conduct.
Section 6.6 Survival; Preservation of Other Rights. The foregoing
indemnification provisions shall be deemed to be a contract between the
Corporation and each director, officer, employee and agent who serves in any
such capacity at any time while these provisions as well as the relevant
provisions of the Delaware Corporation Law are in effect and any repeal or
modification thereof shall not affect any right or obligation then existing with
respect to any state of facts then or previously existing or any action, suit or
proceeding previously or thereafter brought or threatened based in whole or in
part upon any such state of facts. Such a "contract right" may not be modified
retroactively without the consent of such director, officer, employee or agent.
The indemnification provided by this Article VI shall not be deemed
exclusive of any other rights to which those indemnified may be entitled under
any by-law, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in such person's official capacity and as to action
in another capacity while holding such office, and shall continue as to a person
who has ceased to be a director, officer, employee or agent and shall inure to
the benefit of the heirs, executors and administrators of such a person.
Section 6.7 Insurance. The Corporation may purchase and maintain insurance
on behalf of any person who is or was or has agreed to become a director or
officer of the Corporation, or is or was serving at the request of the
Corporation as a director or officer of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against such
person and incurred by such person or on such person's behalf in any such
capacity, or arising out of such person's status as such, whether or not the
Corporation would have the power to indemnify such person against such liability
under the provisions of this Article, provided that such insurance is available
on acceptable terms, which determination shall be made by a vote of a majority
of the entire Board of Directors.
Section 6.8 Severability. If this Article or any portion hereof shall be
invalidated on any ground by any court of competent jurisdiction, then the
Corporation shall nevertheless indemnify each director or officer and may
indemnify each employee or agent of the Corporation as to costs, charges and
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement with respect to any action, suit or proceeding, whether civil,
criminal, administrative or investigative, including an action by or in the
right of the Corporation, to the fullest extent permitted by any applicable
portion of this Article that shall not have been invalidated and to the fullest
extent permitted by applicable law.
ARTICLE VII
OFFICES
Section 7.1 Registered Office. The registered office of the Corporation in
the State of Delaware shall be located at 1013 Centre Road Wilmington, Delaware
19805-1297, County of New Orange.
Section 7.2 Other Offices. The Corporation may maintain offices or places
of business at such other locations within or without the State of Delaware as
the Board of Directors may from time to time determine or as the business of the
Corporation may require.
ARTICLE VIII
GENERAL PROVISIONS
Section 8.1 Dividends. Subject to any applicable provisions of law and the
Certificate of Incorporation, dividends upon the shares of the Corporation may
be declared by the Board of Directors at any regular or special meeting of the
Board of Directors and any such dividend may be paid in cash, property, or
shares of the Corporation's capital stock.
A member of the Board of Directors, or a member of any Committee designated
by the Board of Directors shall be fully protected in relying in good faith upon
the records of the Corporation and upon such
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information, opinions, reports or statements presented to the Corporation by any
of its officers or employees, or Committees of the Board of Directors, or by any
other person as to matters the Director reasonably believes are within such
other person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Corporation, as to the value and amount
of the assets, liabilities and/or net profits of the Corporation, or any other
facts pertinent to the existence and amount of surplus or other funds from which
dividends might properly be declared and paid. [Sections 172, 173.]
Section 8.2 Reserves. There may be set aside out of any funds of the
Corporation available for dividends such sum or sums as the Board of Directors
from time to time, in its absolute discretion, thinks proper as a reserve or
reserves to meet contingencies, or for equalizing dividends, or for repairing or
maintaining any property of the Corporation or for such other purpose as the
Board of Directors shall think conducive to the interest of the Corporation, and
the Board of Directors may similarly modify or abolish any such reserve.
[Section 171.]
Section 8.3 Execution of Instruments. The Chairman, the President, any
Vice President, the Secretary or the Treasurer may enter into any contract or
execute and deliver any instrument in the name and on behalf of the Corporation.
The Board of Directors, the Chairman or the President may authorize any other
officer or agent to enter into any contract or execute and deliver any
instrument in the name and on behalf of the Corporation. Any such authorization
may be general or limited to specific contracts or instruments.
Section 8.4 Corporate 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, the Chairman or the President. Such
authorization may be general or confined to specific instances. Loans so
authorized 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, the Chairman or the President shall authorize. When so
authorized by the Board of Directors, the Chairman or the President, 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, 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 8.5 Deposits. Any funds of the Corporation may be deposited from
time to time in such banks, trust companies or other depositaries as may be
determined by the Board of Directors, the Chairman or the President, or by such
officers or agents as may be authorized by the Board of Directors, the Chairman
or the President to make such determination.
Section 8.6 Checks. All checks or demands for money and notes of the
Corporation shall be signed by such officer or officers or such agent or agents
of the Corporation, and in such manner, as the Board of Directors, the Chairman
or the President from time to time may determine.
Section 8.7 Sale, Transfer, etc. of Securities. To the extent authorized
by the Board of Directors, or by the Chairman, the President, any Vice
President, the Secretary or the Treasurer or any other officers designated by
the Board of Directors, the Chairman or the President may sell, transfer,
endorse, and assign any shares of stock, bonds or other securities owned by or
held in the name of the Corporation, and may make, execute and deliver in the
name of the Corporation, under its corporate seal, any instruments that may be
appropriate to effect any such sale, transfer, endorsement or assignment.
Section 8.8 Voting as Stockholder. Unless otherwise determined by
resolution of the Board of Directors, the Chairman, the President or any Vice
President shall have full power and authority on behalf of the Corporation to
attend any meeting of stockholders of any corporation in which the Corporation
may hold stock, and to act, vote (or execute proxies to vote) and exercise in
person or by proxy all other rights, powers and privileges incident to the
ownership of such stock. Such officers acting on behalf of the Corporation shall
have full power and authority to execute any instrument expressing consent to or
dissent from any action of
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any such corporation without a meeting. The Board of Directors may by resolution
from time to time confer such power and authority upon any other person or
persons.
Section 8.9 Fiscal Year. The fiscal year of the Corporation shall commence
on the first day of January of each year and shall terminate in each case on the
last day of December.
Section 8.10 Seal. The seal of the Corporation shall be circular in form
and shall contain the name of the Corporation, the year of its incorporation and
the words "Corporate Seal" and "Delaware". The form of such seal shall be
subject to alteration by the Board of Directors. The seal may be used by causing
it or a facsimile thereof to be impressed, affixed or reproduced, or may be used
in any other lawful manner.
Section 8.11 Books and Records; Inspection. Except to the extent otherwise
required by law, the books and records of the Corporation shall be kept at such
place or places within or without the State of Delaware as may be determined
from time to time by the Board of Directors.
ARTICLE IX
AMENDMENT OF BY-LAWS
Section 9.1 Amendment. These By-Laws may be amended, altered or repealed
(a) by resolution adopted by a majority of the Board of Directors at any
special or regular meeting of the Board if, in the case of such special meeting
only, notice of such amendment, alteration or repeal is contained in the notice
or waiver of notice of such meeting; or
(b) by resolution adopted by vote of holders of two-thirds of the shares
outstanding and entitled to vote thereon, with respect to Sections 1.5, 1.6,
1.10, 1.11, 2.2, 2.3, 2.5 and 2.12, and by vote of holders of a majority of such
shares, with respect to all other Sections, at any regular or special meeting of
the stockholders if, in the case of such special meeting only, notice of such
amendment, alteration or repeal is contained in the notice or waiver of notice
of such meeting; provided that any such amendment, alteration or repeal of the
By-laws by the stockholders may not be amended, altered or repealed by the Board
of Directors pursuant to clause (a) of this Section 9.1. [Section 109(a).]
ARTICLE X
CONSTRUCTION
Section 10.1 Construction. In the event of any conflict between the
provisions of these By-Laws as in effect from time to time and the provisions of
the certificate of incorporation of the Corporation as in effect from time to
time, the provisions of such certificate of incorporation shall be controlling.
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APPENDIX D
PROVISIONS OF THE GENERAL LAWS OF MASSACHUSETTS
RELATING TO THE RIGHTS OF DISSENTING STOCKHOLDERS
(SECTIONS 86 TO 98 OF CHAPTER 156B OF THE
GENERAL LAWS OF MASSACHUSETTS)
86. Right of Appraisal. If a corporation proposes to take a corporate
action as to which any section of this chapter provides that a stockholder who
objects to such action shall have the right to demand payment for his shares and
an appraisal thereof, sections eighty-seven to ninety-eight, inclusive, shall
apply except as otherwise specifically provided in any section of this chapter.
Except as provided in sections eighty-two and eighty-three, no stockholder shall
have such right unless (1) he files with the corporation before the taking of
the vote of the shareholders on such corporate action, written objection to the
proposed action stating that he intends to demand payment for his shares if the
action is taken and (2) his shares are not voted in favor of the proposed
action.
87. Notice of Stockholders Meeting to Contain Statement as to Appraisal
Rights. The notice of the meeting of stockholders at which the approval of such
proposed action is to be considered shall contain a statement of the rights of
objecting stockholders. The giving of such notice shall not be deemed to create
any rights in any stockholder receiving the same to demand payment for his
stock, and the directors may authorize the inclusion in any such notice of a
statement of opinion by the management as to the existence or non-existence of
the right of the stockholders to demand payment for their stock on account of
the proposed corporate action. The notice may be in such form as the directors
or officers calling the meeting deem advisable, but the following form of notice
shall be sufficient to comply with this section:
"If the action proposed is approved by the stockholders at the meeting and
effected by the corporation, any stockholder (1) who files with the corporation
before the taking of the vote on the approval of such action, written objection
to the proposed action stating that he intends to demand payment for his shares
if the action is taken and (2) whose shares are not voted in favor of such
action has or may have the right to demand in writing from the corporation (or,
in the case of a consolidation or merger, the name of the resulting or surviving
corporation shall be inserted), within twenty days after the date of mailing to
him of notice in writing that the corporate action has become effective, payment
for his shares and an appraisal of the value thereof. Such corporation and any
such stockholder shall in such cases have the rights and duties and shall follow
the procedure set forth in sections 88 to 98, inclusive, of chapter 156B of the
General Laws of Massachusetts."
88. Notice to Objecting Stockholder that Corporate Action has Become
Effective. The corporation taking such action, or in the case of a merger or
consolidation the surviving or resulting corporation, shall, within ten days
after the date on which such corporate action became effective, notify each
stockholder who filed written objection meeting the requirements of section
eighty-six and whose shares were not voted in favor of the approval of such
action, that the action approved at the meeting of the corporation of which he
is a stockholder has become effective. The giving of such notice shall not be
deemed to create any rights in any stockholder receiving the same to demand
payment for his stock. The notice shall be sent by registered or certified mail,
addressed to the stockholder at his last known address as it appears in the
records of the corporation.
89. Demand for Payment By Objecting Stockholder. If within twenty days
after the date of mailing of a notice under subsection (e) of section
eighty-two, subsection (f) of section eighty-three, or section eighty-eight any
stockholder to whom the corporation was required to give such notice shall
demand in writing from the corporation taking such action, or in the case of a
consolidation or merger from the resulting or surviving corporation, payment for
his stock, the corporation upon which such demand is made shall pay to him the
fair value of his stock within thirty days after the expiration of the period
during which such demand may be made.
90. Determination of Value of Stock By Superior Court. If during the
period of thirty days provided for in section eighty-nine the corporation upon
which such demand is made and any such objecting stockholder fail to agree as to
the value of such stock, such corporation or any such stockholder may within
four months after the expiration of such thirty-day period demand a
determination of the value of the stock of all such
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objecting stockholders by a bill in equity filed in the superior court in the
county where the corporation in which such objecting stockholder held stock had
or has its principal office in the commonwealth.
91. Bill in Equity to Determine Value of Stock of Objecting Stockholders on
Failure to Agree on Value Thereof Etc.; Parties to Bill Etc.; Service of Bill on
Corporation; Notice to Stockholder Parties Etc. If the bill is filed by the
corporation, it shall name as parties respondent all stockholders who have
demanded payment for their shares and with whom the corporation has not reached
agreement as to the value thereof. If the bill is filed by a stockholder, he
shall bring the bill in his own behalf and in behalf of all other stockholders
who have demanded payment for their shares and with whom the corporation has not
reached agreement as to the value thereof, and service of the bill shall be made
upon the corporation by subpoena with a copy of the bill annexed. The
corporation shall file with its answer a duly verified list of all such other
stockholders, and such stockholders shall thereupon be deemed to have been added
as parties to the bill. The corporation shall give notice in such form and
returnable on such date as the court shall order to each stockholder party to
the bill by registered or certified mail, addressed to the last known address of
such stockholder as shown in the records of the corporation, and the court may
order such additional notice by publication or otherwise as it deems advisable.
Each stockholder who makes demand as provided in section eighty-nine shall be
deemed to have consented to the provisions of this section relating to notice,
and the giving of notice by the corporation to any such stockholder in
compliance with the order of the court shall be a sufficient service of process
on him. Failure to give notice to any stockholder making demand shall not
invalidate the proceedings as to other stockholders to whom notice was properly
given, and the court may at any time before the entry of a final decree make
supplementary orders of notice.
92. Bill in Equity to Determine Value of Stock of Objecting Stockholders on
Failure to Agree on Value Thereof, Etc.; Entry of Decree Determining Value of
Stock; Date on Which Value is to be Determined. After hearing the court shall
enter a decree determining the fair value of the stock of those stockholders who
have become entitled to the valuation of and payment for their shares, and shall
order the corporation to make payment of such value, together with interest, if
any, as hereinafter provided, to the stockholders entitled thereto upon the
transfer by them to the corporation of the certificates representing such stock
if certificated or if uncertificated, upon receipt of an instruction
transferring such stock to the corporation. For this purpose, the value of the
shares shall be determined as of the day preceding the date of the vote
approving the proposed corporate action and shall be exclusive of any element of
value arising from the expectation or accomplishment of the proposed corporate
action.
93. Bill in Equity to Determine Value of Stock of Objecting Stockholders on
Failure to Agree on Value Thereof, Etc.; Court May Refer Bill, Etc., to Special
Master to Hear Parties, Etc. The court in its discretion may refer the bill or
any question arising thereunder to a special master to hear the parties, make
findings and report the same to the court, all in accordance with the usual
practice in suits in equity in the superior court.
94. Bill in Equity to Determine Value of Stock of Objecting Stockholders on
Failure to Agree on Value Thereof, Etc.; Stockholder Parties May Be Required to
Submit Their Stock Certificates for Notation Thereon of Pendency of Bill, Etc.
On motion the court may order stockholder parties to the bill to submit their
certificates of stock to the corporation for notation thereon of the pendency of
the bill, and may order the corporation to note such pendency in its records
with respect to any uncertificated shares held by such stockholder parties, and
may on motion dismiss the bill as to any stockholder who fails to comply with
such order.
95. Bill in Equity to Determine Value of Stock of Objecting Stockholders on
Failure to Agree on Value Thereof, Etc.; Taxation of Costs, Etc.; Interest on
Award, Etc. The costs of the bill, including the reasonable compensation and
expenses of any master appointed by the court, but exclusive of fees of counsel
or of experts retained by any party, shall be determined by the court and taxed
upon the parties to the bill, or any of them, in such manner as appears to be
equitable, except that all costs of giving notice to stockholders as provided in
this chapter shall be paid by the corporation. Interest shall be paid upon any
award from the date of the vote approving the proposed corporate action, and the
court may on application of any interested party determine the amount of
interest to be paid in the case of any stockholder.
D-2
45
96. Stockholder Demanding Payment for Stock Not Entitled to Notice of
Stockholders' Meetings or to Vote Stock or to Receive Dividends, Etc.;
Exceptions. Any stockholder who has demanded payment for his stock as provided
in this chapter shall not thereafter be entitled to notice of any meeting of
stockholders or to vote such stock for any purpose and shall not be entitled to
the payment of dividends or other distribution on the stock (except dividends or
other distributions payable to stockholders of record at a date which is prior
to the date of the vote approving the proposed corporate action) unless:
(1) A bill shall not be filed within the time provided in section
ninety;
(2) A bill, if filed, shall be dismissed as to such stockholder; or
(3) Such stockholder shall with the written approval of the
corporation, or in the case of a consolidation or merger, the resulting or
surviving corporation, deliver to it a written withdrawal of his objections
to and an acceptance of such corporate action.
Notwithstanding the provisions of clauses (1) to (3), inclusive, said
stockholder shall have only the rights of a stockholder who did not so demand
payment for his stock as provided in this chapter.
97. Certain Shares Paid for By Corporation to Have Status of Treasury
Stock, Etc. The shares of the corporation paid for by the corporation pursuant
to the provisions of this chapter shall have the status of treasury stock or in
the case of a consolidation or merger the shares or the securities of the
resulting or surviving corporation into which the shares of such objecting
stockholder would have been converted had he not objected to such consolidation
or merger shall have the status of treasury stock or securities.
98. Enforcement By Stockholder of Right to Receive Payment for His Shares
to be Exclusive Remedy; Exception. The enforcement by a stockholder of his
right to receive payment for his shares in the manner provided in this chapter
shall be an exclusive remedy except that this chapter shall not exclude the
right of such stockholder to bring or maintain an appropriate proceeding to
obtain relief on the ground that such corporate action will be or is illegal or
fraudulent as to him.
D-3
46
PROXY
DANIEL GREEN COMPANY
ANNUAL MEETING OF STOCKHOLDERS -- THURSDAY, APRIL 6, 2000, AT 10:00 A.M.
The undersigned stockholder in Daniel Green Company (the "Company") hereby
appoints James R. Riedman and Greg A. Tunney, or any of them, proxies for the
undersigned with all the powers the undersigned would possess if personally
present, to vote all common stock of the undersigned in the Company at the
Annual Meeting of Stockholders of said company on April 6, 2000 and at all
adjournments thereof, for the election of six directors, upon the proposal to
ratify the selection of Deloitte & Touche LLP as auditors for the Company upon
the proposal to reincorporate the Company in Delaware with new By-Laws and in
their discretion upon any other matter which may properly come before said
meeting or any adjournment. The undersigned hereby revokes all previous proxies.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS. UNLESS OTHERWISE
INSTRUCTED, THIS PROXY WILL BE VOTED FOR PROPOSALS 1, 2 AND 3 SET FORTH ON THE
REVERSE SIDE.
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SEE REVERSE
SIDE SIDE
DETACH HERE
47
[X] PLEASE MARK VOTES AS IN THIS EXAMPLE
MANAGEMENT RECOMMENDS A VOTE FOR ITEMS 1, 2 AND 3
1. Election of six Directors.
NOMINEES: Edward Bloomberg, Steve M. DePerrior, Gregory M. Harden, Gary E.
Pflugfelder, James R. Riedman and Greg A. Tunney
[ ] FOR [ ] WITHHELD
[ ]
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For all nominees except as noted above
2. To ratify the appointment of Deloitte & Touche, LLP as auditors for the
Company for 2000.
[ [ [
] FOR ] AGAINST ] ABSTAIN
3. To approve the Reincorporation Proposal, including the Merger Agreement, the
Certificate of Incorporation and the By-laws.
[ [ [
] FOR ] AGAINST ] ABSTAIN
PLEASE COMPLETE, SIGN, DATE AND RETURN IN THE ENCLOSED ENVELOPE AS SOON AS
POSSIBLE.
Signature:
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Date:
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Co-Owner Signature:
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Date:
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